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Employment Relations in Russia LIR 554: COMPARATIVE EMPLOYMENT RELATIONS 10/07/2008 Chinweoke Ofuonye Deirdre Darnall Emmy Yimei Lin Kerri Kristich U.S.S.R THE RUSSIAN FEDERATION •Founded after dissolution of Soviet Union in 1991. •World's leading natural gas exporter and 2nd leading oil exporter. •Largest stockpile of nuclear weapons of mass destruction in the world. •Second largest fleet of ballistic missile submarines and world’s top supplier of weapons accounting for around 30% of worldwide weapons sales. •One of the world's fastest growing major economies and is the world’s largest country •Permanent member of the United Nations Security Council and the G8 •2nd largest collection of billionaires in the world, gaining 50 billionaires in 2007 for a total of 110 Ex-USSR countries: Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan RUSSIA Capital and states Moscow, 83 subjects grouped into 7 federal districts Language(s) Russian, 27 other sub-official languages Population 142 million (9th) ↓ Religions Christianity, Islam, Buddhism, Judaism and atheism Nominal GDP/Per capita $1.290 trillion (11th)/ $9,075 (54th) Unemployment rate 6.22% ↓ Political system Representative democracy Currency Russian Ruble Government Federal semi-presidential republic Economic system Mixed (Shifting towards Capitalism) Foreign perception Powerful Russia: Its Politics Political Structure • The Russian Federation • Three branch System – Executive Branch – Legislative Branch • Federal Council: republics, oblasts and krais, federal cities • Duma – Judicial Branch • Constitutional Ct. • Supreme Ct. • Superior Ct. of Arbitration Political Parties • • • • United Russia Communist Party of the Russian Federation Liberal Democratic Party of Russia A Just Russia Democracy or Not? 1. Are Key Officials Elected by the People? 2. Are Political Powers Divided Among the Branches of the State? 3. Are Laws Supreme? Russia: Its Economy Economic Facts Fiscal Year calendar year GDP (nominal) $1.290 trillion GDP (PPP) $2.097 trillion (9th ) GDP growth 8.1%(35th ) GDP per capita $14,800(75th ) Inflation 12% Average salary $640 per month (early 2008) Population below poverty line 15.8% Imports $260.4 billion Exports $365 billion Soviet Union (1922 to 1991 ) Key word: Centrally Planned Economy • The Communist Party controlled all aspects of economic activity • Prices were ONLY an accounting mechanism • Plan Setting (five-year plan and annual plans): countrywide regional unit • Management: top down Boris Yeltsin(1991-1999) • freeing nearly all prices • slashing defense spending • eliminating the old centralized distribution system • completing an ambitious voucher privatization program • establishing private financial institutions • decentralizing foreign trade 1993 small enterprises all enterprises 15% 33% 67% 85% State Owned Private Owned State Owned Private Owned Vladimir Putin(2000-2008) Dmitry Medvedev(2008-) Issues to solve: • Price • Privatization of Essential Sectors • Law **lack of legislation **lack of effective law enforcement **Government decisions affecting business are arbitrary and inconsistent Its Employment Relations system Labor Progression and Role of HR • Free labor & capitalism • Forced labor vs. true market – Little to no rewards for hard work – Little motivation • Entrepreneurial characteristics – “Business” – Profit making Labor Progression and Role of HR • Previously assigned to specific occupation and job • Career changes frowned upon • No initiative for employees at work – Little reward through promotions – Internal motivation and personal effort considered secondary to external evaluation • Positive and negative consequences Positive Consequences • 2 strategies – Survival – Active search for a new career Negative Consequences • Demise of previous enterprises COMPARISONS RUSSIA U.S.A Checks and balances Low High Authority Centralized, flows down Diffused from people, flows up Social philosophy Socialism → Capitalism Dominant capitalism Rights Subordinated for common good Celebrated, protected Literacy & 99% / 6.22% ↓ Unemployment rates 99%/ 4.6% Health care Free, universal Primarily self-funded, Employer and National programs Education Paid by Govt./ Free Primarily self-funded Rewards system No defined basis, thus low motivation Meritocracy or Seniority THANK YOU! Sources Modern Russia, Mikk Titma & Nancy Brandon Tuma. New York, NY. 2001. Developments in Russian Politics, edited by Steven White, Zvi Gitelman & Richard Sakwa. Durham, NC. 2005. http://en.wikipedia.org/wiki/Economy_of_Russia http://www.theodora.com/wfb/russia_economy.html http://www.goehner.com/russinfo.htm http://www.transparency.org/policy_research/surveys_indices/cpi/2008