Maritime HRM - Personnel Selection, Retention and Career Planning, Planning and Investment in Education and Training

International Maritime Human Resource Management textbook modules
Modules author: Maria Anne Wagtmann, PhD, mariaannewagtmann@yahoo.com

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You have opened a document with a module of a planned textbook to a course in International
Maritime Human Resource Management. The course and textbook were not completed however.
Therefore, one of the planned authors, Maria Anne Wagtmann, wishes to share the course modules she
wrote with the public, while still retaining the copyright. Thus, these materials may be downloaded by
anyone interested and information about the URLs at which they are placed may be passed on to others.

The overview of entire envisioned course was as follows (total course content: 7.5 ECTS; total 4.0 ECTS
based on external content):
1. Shore-based HRM (1.5 ECTS, 0.5 ECTS based on external content) written by Maria Anne Wagtmann
2. HRM on board ships and in the ship-shore interface, including occupational safety, psychological and
health issues (1.5 ECTS, 1.0 ECTS based on external content) to be written by another author
3. Wage and benefit creation, role of unions and employers organisations (1.5 ECTS, 1.0 ECTS based on
external content) written by Maria Anne Wagtmann
4. Labour conditions regulation on land and on board ship (1.5 ECTS, 1.0 ECTS based on external content)
partially written by Maria Anne Wagtmann, part to be written by another author
5. Personnel selection, retention and career planning, planning and investment in education and training
(1.5 ECTS, 0.5 ECTS based on external content) written by Maria Anne Wagtmann

Elaboration of each course element written by Maria Anne Wagtmann
1. Shore-based HRM (1.5 ECTS, 0.5 ECTS based on external content)
A. Role of HRM ideal and true roles, operational tasks, possible strategy implementation
B. Organisational structure and culture
C. Variation according to maritime firm type, with focus on ports and port firms
D. Variation of HR practices across regions and firms
E. International HR and HR coordination
F. Ethical issues

3. Wage and benefit creation, role of unions and employers organisations (1.5 ECTS, 1.0 ECTS based on
external content)
A. Neo-classical wage equilibrium models
B. Wages and benefits as motivation factors
C. Performance-based pay
D. Unions in general, in maritime transport, national variations and ITF
E. Employers organisations in maritime transport, national variations and
F. Collective bargaining at national level and in the international bargaining forum

4. A Labour conditions regulation on land and on board ship (1.5 ECTS, 1.0 ECTS based on external
content)
A. ILO, EU and national regulation of labour conditions on land, including the roles of occupational
health and safety authorities and other authorities and institutions
B. ILOs 2006 Maritime Labour Convention (partially written by Maria Anne Wagtmann)

5. Personnel selection, retention and career planning, planning and investment in education and
training (1.5 ECTS, 0.5 ECTS based on external content)
A. Variations in selection processes and legislation for shore and ship-based positions
B. Assessing personal and professional qualifications, including psychological, cognitive and skills tests
C. Employee retention and career planning plans
D. Planning education and training
E. Investing in education and training at home and abroad, with focus on MET in economies of
transition and developing countries
Module 5, Personnel selection, retention and career planning, investment in MET - by Maria A. Wagtmann
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Module 5. Personnel selection, retention and career planning, planning and
investment in education and training
1. The personnel selection process for shore and ship-based positions
1.1 General introduction to personnel employment decisions
Recruitment refers commonly to searching for and then employing suitable potential job
candidates; in contrast, personnel selection is more general term in that both organisation-
internal and external candidates may be considered for a specific position. In North America,
Western Europe and many other world regions, the goal of the personnel selection process has
been viewed in the last 50 years as finding the most suited person to do a certain job.
However, the personnel department may, in cooperation with the unit(s) which are looking to
fill one or more positions, either choose or be forced to change job characteristics in the
personnel selection process. This commonly occurs (a) in situations where there is a lack of
qualified or otherwise suited candidates as well as (b) due to broader societal objectives such
as ensuring sufficient employment opportunity for both men and women, for persons with
different skin colours, ethnic and/or religious backgrounds or for persons with minority sexual
orientations. In relation to ensuring sufficient employment opportunity for such groups, the
issue of making up for indirect discrimination is often in focus; indirect discrimination can oc-
cur when, e.g., certain working conditions are more favourable to certain societal groups or
when the required qualifications are more easily met by one societal group than another.
A number of countries have enacted policies that seek to ensure that firms and organisations
employ a diverse workplace composed of employees of both sexes and of all age and ethnic
groups and skin colours. Such policies are more commonly referred to as positive
discrimination in British English, whereas in the USA one speaks of affirmative action, in
Canada of employment equity and in India of reservation. However, also in countries where
this is not required, some firms and organisations follow own such policies, as their managers
or owners prefer to have a diverse workforce, whereas many other firms and organisations do
not follow such policies unless forced to do so, perhaps because there is also controversy
about whether these policies are fair or are the proper rectifying measures for possible
discrimination. At this point, you must read the Wikipedia (2010a) article on Affirmative
Action, which is found at: http://en.wikipedia.org/wiki/Affirmative_action.
Here, for the case of land-based work, it is important to obey national anti-discrimination legis-
lative requirements and to also consider whether it would otherwise be prudent, based on job
and stakeholder characteristics, to seek consciously to have a diverse workforce through ones
recruitment policies. Here, an overview of anti-discrimination law for 33 countries around the
world is found in the freely accessible work from the internet Baker & McKenzie (2009).
For work on board ships, the International Labour Organisation (henceforth: ILO) Maritime
Labour Convention (2006) does not directly deal with the issue of how the maritime transport
industry should act with relation to the potential issue of discrimination. Instead, its Article III
states that each country which is a member of the ILO and thus subject to the Maritime Labour
Convention upon its ratification shall satisfy itself that the provisions of its law and regulations
respect, in the context of this Convention, the fundamental rights to [...] the elimination of
discrimination in respect of employment and occupation. Here, in practice, due to
shipowners/ship operators being able to chose the flag of the ships they own/operate,
shipowners or ship operators may chose to seek to employ seafarers from particular nations
for a wide variety of reasons. Most commonly, considerations about wage levels, the quality of
the countrys nautical education, the quality of the English-language skills of the seafarers, and
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the stability of the future maritime labour supply from the country in quest are paramount;
however, it cannot be ruled out that some industry actors make choices based on more
irrational preferences for certain nationalities or ethnic groups. However, for all shipowners
and operators, with regard to the shipmasters management of these on board ship, it is very
important in the case of a multinational crew that the employer of the shipmaster ensure that
the shipmaster does not him- or herself treat one crew nationality better than the other or
allow other crew members to do so. This is the case first and foremost for ethical reasons.
However, such differential treatment can easily also lead to a bad workplace climate on board
ship (Knudsen, 2003a), which may also increase the risk of accidents and result in other non-
optimal operational procedures. Moreover, in some instances, complaints about such treatment
have also been filed in Port State Control inspections and/or to the ITF inspectors, with
resulting legal investigations by the Port State Control officers and/or legal or sympathy ac-
tions being taken by ITF affiliates and associated organisations.
A third societal concern that may lead to employers to change job characteristics in the per-
sonnel selection process is the concern present in a number of countries or regions that there
are either some or a sufficient number of jobs available for persons with disabilities or who
have to work at a reduced work tempo or under other special circumstances due to certain
medical conditions. With regard to this issue, now read Enables (2007) Fact Sheet 1 before
you continue reading this text. The fact sheet is found at:
http://www.un.org/disabilities/documents/toolaction/employmentfs.pdf. In a number of coun-
tries, governments may provide subsidies for the creation of positions for and/or the recruit-
ment and employment of persons with disabilities or special needs due to a medical condition.
For example, for the case of Sweden (Swedish Institute, 2007, p.2):
Via its labor market agencies, the states task is to make it easier for people to
find and keep jobs. Employers who hire a person with a reduced work capacity are
in certain cases entitled to wage subsidies.
Here, with the high, middle and low per capita capital income country categories, there are
large variations with regard to the attention that is placed on this issue and the means by
which it is addressed. Still, the disabled and ill fair somewhat better in the high per capita in-
come countries taken as a whole, for in developing countries, 80% to 90% of persons with
disabilities of working age are unemployed, whereas in industrialized countries the figure is
between 50% and 70%. (Zarocostas, 2005)
With regard to work on board commercial ship and on the docks, it is relatively uncommon
that persons with disabilities are employed, due to the physically demanding nature of such
work. However, some port machinery may be operated by persons with certain limited disa-
bilities or reduced work capacity, and a very few cruise companies that have offered cruise
services that were designed to be accessible to persons with physical disabilities have also e-
mployed a few persons with disabilities on board cruise ships.
In contrast, in office-based positions in areas such as logistics planning, freight-forwarding and
customer services, there are comparatively larger possibilities for employing such persons with
physical disabilities or reduced work capacity due to a medical condition.
With regard to recruitment, some countries, e.g. Japan, have until recently had a tradition of
life-long employment, whereas in others, more periodic hiring and firing has been more
common. With regard to employment law, employment protection legislation (EPL) is a term
commonly used when speaking of regulatory provisions that relate to hiring and firing,
particularly those governing unfair dismissals, termination of employment for economic
reasons, severance payments, minimum notice periods, administrative authorization for
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dismissals, and prior consultations with trade union and/or labour administration
representatives (Cazes & Nesporova, 2003, p.2). In Table 1, 21 different high income OECD
countries have been ranked based on an overall measurement of EPL.
Table 1. Ranking of 21 OECD countries in terms of relative laxity or strictness of EPL
(Cazes & Nesporova, 2003, p.13)
European
Countries
Ranking from lowest
to highest employment
protection measures
Austria 16
Belgium 17
Denmark 5
Finland 10
France 14
Germany 15
Greece 18
Ireland 12
Italy 21
Netherlands 9
Norway 11
Portugal 19
Spain 20
Sweden 13
Switzerland 6
United Kingdom 7
Non-European
Countries
Ranking continued
Canada 3
United States 1
Australia 4
New Zealand 2
Japan 8

Of the countries included in Table 1, it is seen that the United States has the least strict EPL,
followed by New Zealand, Canada, Australia, and Denmark, respectively. Thus, in these
countries, it is generally relatively easy to terminate employment for shore-based employees.
In contrast, this is most difficult in the following countries depicted in Table 1: Italy, Spain,
Portugal, Greece and Belgium. Aside from Denmark, the four other Northern Maritime
University Countries have intermediate placement on the scale, from place 7 (for the United
Kingdom) to placed 11, 13 and 15 for Norway, Sweden and Germany, respectively. If you wish
to supplement the overview, with more specific data, an overview of employment termination
legislation for around 35 countries all over the world is found in the following freely accessible
work from the internet: Baker & McKenzie (2009).
In relation to the above table, it must also be said that a countrys level of EPL is not
necessarily related to the same countrys (a) level of unemployment benefits or (b) levels of
responsibilities and control the unemployed with regard to actively seeking new positions and
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improvement ones job-related skills during periods of unemployment. Here, for example,
among the five countries with the least strict EPL, Denmark as part of the so-called Flexi-
curity labour market model (see Wikipedia, 2010c) maintains markedly higher general levels
of unemployment benefits (i.e., point a above) combined with stringent demands pertaining to
the job-seeking and continuing education responsibilities of the unemployed (point b).
Returning now to EPL, whether and when it is possible for employers to terminate existing
employment agreements and how costly this is seems to affect employer propensity to
terminate employment. In countries where it is relatively difficult to terminate the employment
of current employees, many employers may choose to instead seek to retrain their existing
workforce. However, also in a number of firms with relatively lax EPL legislation, this approach
is attempted in many instances, instead of hiring new employees. Thus, in many instances, the
personnel department and the units it services have the choice between either (i) hiring new
persons with the perceived right qualifications and also firing existing employees who do not
have the correct qualifications or (ii) retraining existing employees so that they obtain the
needed qualifications and can be put to work in new task areas. We will return to make some
further points on the economics of training in Section 4 of this chapter.
However it is also probably that other cultural characteristics influence the personnel selection
processes as well. Here, Harris, Brewster & Sparrow (2003, pp. 84-5) note:
Germany, Japan, France and Switzerland are noted for having generally internal
labour markets where recruitment tends to be focused on specialised entry points
at low levels of the hierarchy, and therein promotion is through internal
assessment. Internal labour markets are considered to have such benefits as
improved morale, commitment and security among employees, more opportunity to
assess (and more accurate assessment of) competencies and accrued knowledge,
more control over salary levels given lower exposure to market forces [...] Britain,
the USA, Denmark, the Netherlands and Hong Kong tend to be characterised as
external labour markets where candidates can move into and out of the hierarchy
at any level. [..] The advantages of such labour markets can be the opportunity to
bring in new blood as part of culture-change processes, insights into competitor
capabilities, and the ability to respond to equal opportunities issues more visibly.
1.2 Personnel selection processes in general
There are a number of national or, for the case of the EU, supra-national rules about
employment that must be respected every time an employee or potential employee is to be
selected for a job. These include, e.g., rules about the minimum age for working at all or for
working in certain positions, rules about employment contracts and about granting employees
holiday or vacation leave, and possibly other types of leave (e.g. maternity and/or parental
leave in connection with a pregnancy or an adoption of a child). This aspects will not be dis-
cussed further here; instead the student is urged to familiarize him or herself with the relevant
rules and laws in the country(-ies) where he or she is planning to work.
Drawing on the so-called Harvard model of human resource management (Beer et al., 1984),
which was discussed in Section 1.3 of Module 1, the personnel selection process is a process
related to both the qualitative and quantitative management of human resources, as depicted
in Figure 1 below.

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Figure 1. The Personnel Selection Process as a part of the Harvard Model of Human Resource Management
(adaptation of Beer et al., 1984, p.16)

From the above figure, it is seen that a given personnel selection process may in part depend
on or be influenced by the viewpoints of other stakeholders such as, e.g., the ownership of the
company, the coming colleagues and managers of the persons to be recruited, union
representatives (if some or all of the workforce is unionised in the organisation in question),
local community or country stakeholders who may press for certain employment choices (e.g.
employment of some disabled persons or employment of both sexes), etc. Moreover, there are
situational factors, i.e. the current labour market conditions or the current legislative statutes
on various aspects of employment, including EPL, minimum age rules, rules about employment
contracts, holiday time and other types of leave, which will influence the selection policies.
If, e.g., external recruitment is chosen, in some countries, it is common for certain types of
positions to be announced in newspapers or relevant business, industry or academic periodi-
cals. In others, internet-based job announcements are the main communication channel in the
search for new staff. In yet other countries, a combination of both may be used. Beyond this,
in some countries, the public sectors job placement unit for the unemployed maintains a
database of all unemployed job applicants, in which potential employers may search for
candidates at no charge; in some of these countries, also job-seekers currently under
employment may also place their data in the same database as well. In contrast, in other
countries, only private employment bureaus keep such lists, whereas in yet other countries,
both private employment bureaus and a public sector job placement unit database may offer
firms and organisations varying information and services concerning potential job applicants,
from which these firms and organisations can choose. Finally, word-of-mouth and general
organisational reputation may also play a major role in relation to recruitment via both
announced positions and unsolicited applications for employment.
In relation to the issue of whether private sector employment agencies can charge fees from
job-seekers, article 7 of ILOs 181
st
Convention, the Private Employment Agencies
Convention of 1997 (ILO, 1997a) states:
1. Private employment agencies shall not charge directly or indirectly, in whole or in part, any
fees or costs to workers.
2. In the interest of the workers concerned, and after consulting the most representative
organizations of employers and workers, the competent authority may authorize exceptions to
the provisions of paragraph 1 above in respect of certain categories of workers, as well as
specified types of services provided by private employment agencies.
A.
Stakeholders
B.
Situational
Factors
C. Personnel
Selection Policy
concerning
Recruitment,
internal
selection
assessment of
candidates and
selection
D.
Outcomes
of Personnel
Selection
Policies
E. Long-
term
Consequen-
ces of
Personnel
Selection
Policies
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3. A Member which has authorized exceptions under paragraph 2 above shall, in its reports
under article 22 of the Constitution of the International Labour Organization, provide
information on such exceptions and give the reasons therefore.
Here, although the main rule from this article 7 is that employers are to bear the costs of
seeking employees, in a number of countries it is commonplace that either jobs seekers or
those job seekers who are successfully placed in a job either in part or in whole pay the costs
for private employment agencies efforts to match job seekers with employers. Here, it is to be
mentioned that although the ILO Private Employment Agencies Convention has entered into
force, it has only been formally ratified by 23 countries as of 12
th
April 2010 (ibid). However,
some actors in the global shipping industry have also sought to ensure that seafarers and po-
tential seafarers from developing countries are not faced with excessive fees. For example, the
report from the Det norske Veritas (2004), which was used in connection with Module 1s
structured assignment 1.15, stated the following on p. 33 with regard to fees in the
Philippines:
A certain strata of these graduates serve as seafarers many years, a lower strata
never finds employment thus causing the practice of errand boys/utility boys (i.e.
seafarers that offer their services for free for manning agents or act as unpaid
assistance for crewing managers). This practice does still occur in the lower tier of
the manning agencies, but was more common earlier when the crewing manager
was a powerful gatekeeper. [...] Placement fees are not uncommon. For workers
seeking contracts for land-based work, it is the rule. A land-based OFW typically
pays 1 months salary for placement. Seafarers are also frequently asked for place-
ment fees. Manning agents like [name omitted to avoid accidental promotion of
specific agencies] which do not ask for placement fees, typically get the best
seafarers and can charge fees accordingly from principals (instead of crew).
Concerning the assessment and selection of candidates, the coming section 2 will deal with
psychological, cognitive, skills and other tests, which are sometimes used to assess, then
select those job applicants judged to be most suited for the available positions. Such tests are
however only a potential part of the assessments. Other common assessments include:
1. Assessment of the official application letter or application form itself
2. Assessment of rsums or curriculum vitae
3. Assessment of educational courses certificates and diplomas
4. Assessment via contacts to third-party references provided by the applicant or via
reference letters
5. Assessment based on bio-data
6. Assessment based on background checks
7. Job interviews
Of the above, the formulations and job, educational and other life experiences mentioned in 1
and 2 are commonly assessed to determine if they match the personal characteristics needed
for the job and/or the personal characteristics which were mention in the announcement for
the position being applied for.
Concerning point 3, educational course certificates and diplomas sent with a job application are
sometimes first checked for their authenticity, first. Here, in some countries, it is common that
the applicants must send officially embossed or notarized transcripts and diplomas from the
courses and/or degree programs that he or she was completed, which are then returned to the
applicant in the case of an unsuccessful application, whereas in others, the potential employers
may be allowed to contact the educational institutions for verification purposes. Here, in yet
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other countries, such contact may however only be allowed if the job applicant provides a
written statement of permission which then must be presented to the releasing authority.
Here, the situation is somewhat similar with regard to point 4, reference checks. In some
countries, a potential employer may simply contact a person listed as a reference on a
reference list without further ado, whereas in others, if a current or former employer or public
sector educator is listed on a reference list, this person may need a specific statement of
permission from the job applicant before he or she is permitted to state his or her personal
views on the application. In such countries, the open reference letter may instead be used.
Here, the job applicant will request such a letter from current or former employers or col-
leagues and then include these letters in copy in the application.
An individuals bio-data or biographical data is information about the individuals life history,
lifestyle, hobbies and interests. As such it may include information about, e.g., age, sex, place
of birth, place of resident, family background, number of siblings, careers of parents and
siblings, ones educational track and work experience, ones marital status and number of
children, medical history, physical characteristics (weight, height, body mass index, etc.),
hobbies and free time past times. Assessments via bio-data are allowed in a number of
countries. However, general bio-data analyses are not commonly practiced in other countries
(e.g. the United States), as they is not considered to be respective of the individual efforts to
qualify him- or herself on own merits. Here, those bio-data characteristics that are specifically
relevant to the requirements of a job category (e.g., whether an airplane pilot still has the
required perfect or near perfect vision) may still be used. Moreover, there are a lot of countries
that allow some bio-data assessment, yet prohibit certain data uses, e.g. the elimination of job
seekers on the basis of their age, sex, marital status, whether they have children or not, etc.
Background checks are conducted when e.g. the criminal record, litigation record or the
personal credit record of a potential employee is looked into. Here, once again, legislation
varies markedly from country to country. To illustrate this, you must now read the Wikipedia
(2010b) article on background checks at: http://en.wikipedia.org/wiki/Background_check#Pre-
employment_screening_in_the_U.S., which explains common usage patterns in the United
Kingdom and the United States, before you continue reading about job interviews.
The job interview is widely used by almost all organisations (Bratton & Gold, 2004), in a wide
number of countries. It can, however, however be organised in a number of ways, including:
o Structured interview is conducted on the basis of fully predetermined questions on
which the interviewer conducts the interview.
o Semi-structured interview key questions and themes are written down beforehand,
yet some freedom is allowed in the interview process with regard to question order and to
perhaps skipping some themes or discussing issues deemed important by the interviewee,
yet which were not predetermined by the interviewer
o Non-structured interview the themes are not pre-determined beforehand in a
systematic way by the interviewing person(s)
o Panel interview Here, two or more persons in the employing or representing the
employing organisation conduct the interview. Here, it is common that a certain person on
the panel is responsible for asking certain questions and the next person on the panel
asked certain other questions, etc.
o Group interview Here, more than one job applicant is interviewed at the same time by
one or more interviewers. This is not used in everywhere in the world, as in some places,
there is concern that job applicants should not be required to elaborate on their personal
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circumstances and qualifications in front of other applicants whom they do not know and
who are not bound by employment legislation as employers and employment bureaus are.
The above description of possible elements of the selection process indicates that there can be
individual variations between organisations concerning the assessment process. Moreover,
there are also variations in patterns between countries based on concerns about what would
be discriminatory, what best ensures all societal groups access to the job market, and privacy
and personal employment-related data protection rights, which in the EU are regulated
through two directives, which have then been implemented in the EU member states
legislation:
o Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on
the protection of individuals with regard to the processing of personal data and on the free
movement of such data.
o Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002
concerning the processing of personal data and the protection of privacy in the electronic
communications sector (Directive on privacy and electronic communications).
At the global level, the International Labour Organisation (ILO) has also published a code of
practice concerning the protection of employees personal data (ILO, 1997b). In some coun-
tries, some of its recommendations have been implemented, and in many regions of the world,
adherence to its principles is considered good employment practice by various stakeholders.
Here, regardless of the national regulations that one works under, as a human resource pro-
fessional working with personnel assessment and selection, it is important to monitor the short
and long-term outcome of the choices that ones personnel department makes in its personnel
selection processes, as also indicated in the above Figure 1. Moreover, it is important for HR
departments to seek to develop personnel selection processes that fulfil the following four
ideals:
1. Optimization to organisational constraints: In other words, the selection processes
must be optimized in relation to organisational time schedules, deadlines and costs
2. Optimization with regard to discriminatory ability: Said in another way, the
selection processes must enable the assessors to rank or otherwise distinguish among
the candidates to enable selection.
3. Reliability: This means that the processes are standardized such than one assessor
would reach the same results as the next would.
4. Validity: This criterion relates to the extent to which the personnel selection criteria
actually match the qualities needed to perform well in the job in question.
1.2.1 Structured Assignment 5.1 An Introduction to the Protection of the Personal
Data of Employees in various EU Member States
This structured assignment is based on selected pages in part one, i.e. Study on the
protection of workers personal data in the European Union: general issues and sensitive data,
of Hendrickx, F., 2002. Protection of workers personal data in the European Union. Two
studies. Background research paper produced for the European Commission, Directorate
General for Employment and Social Affairs. Brussels, Belgium: European Commission [online].
Available at: http://ec.europa.eu/social/BlobServlet?docId=2507&langId=en. The selected
passages that you must read are listed with each question of this structured assignment.
1. First, you must read the Section 4. From transparency to access on pp. 30-32. Here, you
must first discuss the possible reasons why the Italian Garante ruled that employees
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requesting access to their evaluation data were to be granted such access and what the
German section 83, subsection 1 of the Betriebsverfassungsgesetz (BetrVG) grants
individual employees the right to access to personnel files related to each of them. After
this, you must also discuss possible reasons why the Irish Data Protection (Amendment)
Bill 2002 specifies that no other person can force employees to make access requests or
reveal the results of access requests in certain future employer-related situations. Here,
you may use up to 600 words to answer this question. Beyond, this, if you so choose, you
may include full bibliographical references to other relevant literature you have read.

2. Now you must read a few sub-sections related to health and medical data. Start with the
section A. Health and Medical Data on p. 45 and continue to read until you reach the end of
the subsection d. Genetic tests. After reading this, you must answer two questions:

a. First, imagine that you are an EU resident seeking work as a dock worker in one of the
countries. Based on this fictive situation of you being a potential dock worker employee,
please indicate which countrys data protection legislation concerning collection and
protection of your personal health and medical data you would consider to offer you the
best protection. Here, you must justify your answer, and you may write up to 500 words.
Moreover, if you so choose, you may include full bibliographical references to other
relevant literature you have read beyond the 500 word limit.

b. Second, you must take the employers perspective. Imagine that you are a port HR
recruiter and assessor in a private stevedoring company that operates in multiple European
countries included in the above reading. From the perspective of the HR recruiter and as-
sessor in the ports industry, please indicate which countrys data protection legislation
concerning collection and protection of your personal health and medical data you feel most
adequately meets your companys recruitment and assessment needs. Also here, you must
justify your answer, and you may write up to 500 words. Once again, if you so choose, you
may include full bibliographical references to other relevant literature you have read
beyond the 500 word limit.
1.3 Remarks about the Selection of Dock Workers
Concerning dock workers, various organisational issues concerning this group of employees
have been covered in Module 1s Subsection 4.3 and structured assignments 1.9 1.14 as well
as in Module 3s structured assignments 3.1 and 3.6. Here, it has been mentioned in multiple
places that employment levels in ports generally have declined greatly, as (a) new technology
has been placed in ports, which has also lessened the amount of very strenuous physical lifting
work to a great extent and (b) port reform has been enacted.
Due to the elimination of many positions and the power of unions in many ports, it is often
seen that retraining of some of the current port workers has been recommended and also
utilized in a number of cases, to minimize the number of dock worker layoffs (see, e.g. World
Bank, 2008, pp.318-23). This will be discussed further in Sections 3 5 of this Module.
Moreover, regardless of whether the filling of restructured positions with retrained employees
or the recruitment of new dock workers or a combination of both methods have been used, in
most recent personnel selection process in ports, HR employees have commonly had to change
job descriptions and assessment methods to account for assessing candidates suitabilty in
relation to, e.g. (ibid., p. 319):
o Reclassifications of tasks and new job patterns
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o The future possible need for the dock worker to accept retraining and skill upgrading
courses
o Greater emphasis on the professionalism and work discipline of the individual dock worker
o Greater demands that the dock workers participate in the implementation of port and
terminal policies in a very systematic manner
o Longer and/more more flexible working hours plus possibly an increased workload
o The abolishment of systems of seniority
o Wider wage differentials and an increased use performance-based pay incentives (the latter
were discussed in Module 3s Subsection 3.3.)
Generally, the educational requirements for dock workers are not high; in many ports, training
before or on the job may be offered by the port itself. However, in other situations, training in
operation of machinery is conducted externally and is a prerequisite to employment, thus
limiting the potential supply of dock workers in the region. ). For the case of surveyed
European Union countries, Turnbull (2009a, p. 11) notes:
In the majority of countries (57%), certified training is a condition of entry to the
industry. Initial (minimum) training typically lasts for 3 weeks (15 days) although in
some cases it is less than a week (e.g. Finland and Italy).
Here, there are also some systems in place in various ports of the world that require the
registration of dockers with the proper qualifications before these can be offered employment
(see, e.g., Suykens, 2000, which was the obligatory text to Module 3s Structured Assignment
3.1). In contrast, the union hiring hall system, in which ports and port firms recruitment of
dock working labour had to go through a union-controlled employment bureau, is now only still
present in a very few ports of the world (see, e.g., Stallone, 2001)
However, regardless of whether registration systems for potential employees are in place or
not, the general public image of the port must be monitored and sought to be either bettered
or maintained as positive, in order to attract new employees. In the words of Notteboom
(2010, p. 18):
Ports have to offer attractive careers for young people by offering good working
conditions and stimulating a sense of pride about the port.
Structured Assignment 5.2 Assessment of the Initial Information to Be Submitted by
Persons Seeking Employment in the Port of Montral (Canada)
This structured assignment is based on the information for port employment-seekers of the
Port of Montral. As the language of this course is English, this ports English language pages
will be used here; however, those who understand French are of course welcome to also
consult this ports French language web pages. Here, first please examine the initial human
resource webpage of the Port of Montral (located at: http://www.port-
montreal.com/site/2_0/2_6.jsp?lang=en), the Available positions page (located at:
http://www.port-montreal.com/ws?lang=en&map=offers&action=offers) and, finally, the
Employment Application Form, which is located at: http://www.port-
montreal.com/pdf/form_en.pdf.
1. Based on the initial human resource webpage of the Port of Montral (i.e., the page located
at: http://www.port-montreal.com/site/2_0/2_6.jsp?lang=en), please list the key messa-
ges that you believe that the Port is trying to communicate to prospective employees. Then
assess which motivating effect these messages may have on prospective employees, based
on the theories presented in Module 3s Section 3, which was titled Motivation issues
related to wages and benefits, including performance-based pay systems. Here, you may
11

write up to 500 words. Moreover, if you so choose, you may include full bibliographical
references to other relevant literature you have read beyond the 500 word limit.

2. Based on all documents, sketch how you believe that the HR department conducts the
applicant assessment process, including which of the following assessment types are used:

Assessment of the official application letter or application form itself
Assessment of enclosed rsums or curriculum vitae
Assessment of enclosed educational course certificates and diplomas
Assessment via contacts to third-party references provided by the applicant or via
reference letters
Assessment based on bio-data
Assessment based on background checks
Job interviews

Finally, comment on the reliability and validity of the assessment process. Here, you may write
up to 800 words. Furthermore, if you so choose, you may include full bibliographical references
to other relevant literature you have read beyond this word limit.
1.3 Remarks about the Selection of Seafarers
As previously discussed in depth in Subsection 2.3 of Module 3, due to the relatively free
choice of flag state, shipowners or ship operators essentially have the opportunity to source
their seafarers from a huge number of seafarer supplying countries, yet there is currently a
shortage of officers on the world market. There are multiple ways in which ship owners or
operators choose to man their ships, as illustrated in Figure 2, below.
Figure 2. Multiple possible seafarer labour employment chains (adaptation of Figure
1 of Ruhullah, 2004, p. 27)

In relation to the above figure, a study of a sample of Greek shipping companies (Theotokas &
Progoulaki, 2007) showed that Greek crew members were in most cases (87%) managed by
the Greek companys own crew department through supply chain 1; if this was not the case,
an company affiliated ship or crew management agency, i.e. supply chain 2 or 3, was always
used. For the foreign crew members, of whom the greatest portion were Filipino, Ukrainian or
Russian, with seafarers from seven other labour supplying states also being reported used,
supply chain 1 was only used in 32% of the cases and the company affiliated ship or crew
management agency was also only used in 11% of the cases, leaving 57% of the foreign crew
12

managed through company-independent ship and crew-management units and supply chains
and supply chains 2, 3 or 4.
In chain 1 and chain 3 of Figure 2, it is either the ship owner or operator (chain 1) or the ship
management company (chain 3) that is responsible for most of the personnel
recruitment/selection and management functions. Here, however, as mentioned in subsection
1.4, Module 1, in cases where ship management is used, it is common that the ship owner or
operator still retains the final decision-making control of the choice of nationality of the
seafarers and the choice of the flag state (Mitroussi, 2004a, p.37). For supply chain choices 2
and 4, the probable delimitation of responsibility is as indicated in Table 2 below:
Table 2. Probable delimitation of employment responsibility in Supply Chains 2 & 4
(see, e.g. Ruhullah, 2004, pp. 29-30)
Mode 2: Ship owner
or operator
Mode 4: Ship
manager
Mode 2 and 4: Crewing agent
Legality of recruitment & selection process
Quality of pre-employment experience
Possibly attending to family while seafarer is at sea
Quality of post-contract period contact
Legality of post-contract period requirements
Possibly remuneration responsibility
Legality of work conditions on ship
Poss. remuneration responsibility
Quality of work place experience on
ship
Responsiblity for enabling commun-
ication to family while at sea

However, aside from the above figure, there is also another dimension: the issue of whether
the crewing agent employs the crew and act in its own name or whether it merely acts as an
agent for the owners. For the case of Filipino Seafarers, their employment circumstances are
regulated by a unique employment agency, the Philippine Overseas Employment Agency
(POEA, 2010a), which deals specifically with the many Filipino seafarers, Filipino health care
sector employees and other categories of Filipino workers who work outside of the Philppines.
Section 1 of its Rules and Regulations on the Recruitment and Employment of Seafarers
(Philippine Overseas Employment Agency, 2002) specifies that only Filipino citizens,
partnerships or corporations at least seventy-five percent (75%) of the authorized and voting
capital stock of which is owned and controlled by Filipino citizens may be permitted to
engage in the business of recruitment and placement of Filipino seafarers. Thus, the unit
directly recruiting the Filipino seafarers must be run mainly by Filipinos a situation that
further the crewing agent type of organisation. Here, however, many foreign shipowners and
ship management firms seem to prefer the principal-agent type of employment.
Beyond the above discussion of who is responsible for what in the seafarer labour supply
chain, as stated in Section 1.1 of this module, considerations about wage levels, the quality of
the countrys nautical education, the quality of the English-language skills of the seafarers, and
the stability of the future maritime labour supply from the country in question are usually
placed in focus in decisions about which countries seafarers will be used. In some countries,
e.g. the Philippines (see Amante, 2004, which was the assigned external text to Module 3s
Structured Assignment 3.20), the union hiring hall system is still used to some extent.
However, a few more remarks about wage levels and costs should be made here. In cases in
which responsibility for crewing has been delegated out to a ship management or crewing
company, there are two common ways of remuneration to the ship management or crewing
company: a lump sum may be paid for the services rendered over a period of time or
remuneration may be based on a cost plus fee agreement (see BIMCO, 2010a). In the later
case, of course, the costs are variable but there may also be more flexibility in the contract,
13

whereas the former type of contract offered the advantage that costs had been agreed
beforehand. In relation to both contract types and also in cases when crewing activities are
kept in house, most shipowners or ship operators take the organisation of work on board
ship as a given, at least in the short and medium term, and they also find it difficult to
measure crew and individual crew member productivity. Also ship management firms also
seem to work in this way. Such actors will therefore typically man their ships with crews of
nationalities whose qualifications can be accepted by the chosen flag state or flag states. Here,
the relevant unit of analysis for the cost comparison of seafarers of various nationalities is
typically perceived to be wage costs plus supplementary costs (social payments, insurance,
etc). This is also true for the case of the lump sum contract over a longer period than the
single period of the contract, as the future fluctuations in the lump sum to be paid will be dir-
ectly related to these cost items as well.
Moreover, as mentioned in Module 3s Subsection 2.3.3, some supplementary cost items vary
according to individual seafarer characteristics. For example, insurance premiums increase as
the seafarer covered gets older (Leggate & McConville 2002, p.456), which may lead to certain
maritime employers to seek to avoid employment of the older seafarers, although this is age
discrimination, which is illegal in many countries. Finally the total labour costs per ship are also
related to the underlying choice of flag registers because the minimum manning requirements
vary among the different types of flag registers, i.e. national, second or open registers (see,
e.g., Winchester, Sampson & Shelly, 2006).
There are a few larger shipowners, operators and ship management firms that seek to mea-
sure various aspects of resource efficiency or goal effectiveness of either a few key employees
on board or the entire crew and use performance-based pay either on the individual or group
level, as was previously discussed in Module 3. Here, this is a potential motivating and
disciplining instrument, yet care may be taken to ensure that the performance-based
measures in fact further the right behaviour and that the positive variations in performance are
in fact attributable to the crew members who are rewarded for them. For example,
performance-based pay for a good safety record may possibly work dysfunctionally in practice,
with certain crews in fact suppressing information about safety problems in hopes of achieving
the performance-based pay. Conversely if performance-based pay is put in place to encourage
near-miss potential safety reporting, then certain crews may conduct excessive reporting on
safety problems to receive this pay. Similarly, in the case of some shipmasters having better
fuel efficiency records when in charge of either bulkers or container ships, before performance-
based pay is paid to the shipmasters with the best fuel efficiency records, it is perhaps best
investigated if cargo loading optimality or non-optimality contributed to the difference. For
here also the factor of the extent to which the bulk cargo or the containers are loaded evenly
and correctly on the ship at the ports served also plays a major role with regard to fuel
efficiency, yet is most often out of the direct control of the shipmaster.
Finally, in some specialist smaller segments of commercial shipping, e.g. on scientific vessels,
certain types of tugs, ships carrying highly sensitive cargos, or on very modern and techno-
logically advanced ships, it may make sense to seek to measure not only labour costs but also
labour benefits, i.e. labour productivity in terms of effectiveness and efficiency in relation to
specific goals or tasks, as employing the most skilled specialists, even if their wages are
relatively more expensive, may be the most sound business decision, due to possible large
differences in labour productivity measures related to precision, accident prevention, etc. Here,
higher labour costs may be acceptable if this results in better productivity measures, which
then result in greater cost savings in other respects.
14

In relation to the assessment of seafarer qualifications, the International Maritime Organisation
maintains a White List of countries that it perceives have fulfilled the maritime educational
quality criteria specific in the IMOs STCW Convention; however this list is commonly viewed
by shipping industry employers as being an insufficient measure of the quality of maritime
education simply because the great majority of Member States of the IMO have achieved
White List status (Mansell, 2009, pp.175-176). Thus, a number of maritime employers and
also some flag states demand supplementary testing of seafarers from certain countries, as
will be discussed in Subsection 2.2.2 of this module.
Returning to the STCW Convention, Yamamoto (2002:69, 71) notes that due to the wish to
achieve a source of income, many developing countries may adhere to a policy of merely
seeking to fulfil a bare minimum of skills, experience and competency. Moreover, other authors
suggest that the minimum demands stipulated in the IMOs SCTW convention and ISM Protocol
together with the lack of money for seafaring education may have actually lead to a decrease
in the quality of education offered. For example, Zac et al. (2000:64) describe some problems
with maritime education in Croatia that occurred after the STCW 95 Convention was ratified:
Since the higher education MET institutions are no longer a part of the local
university, theoretically, the requirements to be met by students for the entry level
need not necessarily to follow university standards. Another direct negative
consequence is decrease of the requirements for the electing academic staff they
are no more required to obtain appropriate academic degrees (M.Sc. and Ph.D.) as
before. As the STCW 95 convention, more or less clearly, prescribed a minimum
content of education programmes, there are numerous requests for a stricter
application of STCW 95 provisions, thus abandoning additional subjects (such as
higher mathematics).
Fraud of the training certificates mandated by, e.g., the SCTW Convention is a very wide-
spread problem, especially in a number of developing countries. According to Obando-Rojas et
al. (2004:302), a number of seafarers are:
reluctant to invest personally in expensive mandatory vocational training,
regarding investment in fraudulent certificates as more cost effective. In one
labour-supplying country in the sample, for example, the cost of a genuine Basic
Safety Training certificate from a private training establishment was $200, but the
average price of a fraudulent BST was found to be about $50. The high cost of
training is blamed by one of the manning agents interviewed in the Far East as the
root cause for fraudulent practices: Fraud is likely to increase. Too many certi-
ficates, too expensive to train and issue. (Crewing Agent A). Other shipowners
interviewed agreed that the cost of training is getting higher for the seafarer in
relation to the salary they can earn at sea, thus making an increase in fraud likely.
A large proportion of seafarers interviewed share this concern.
Of course, it is plausible that some seafarers on short-term contracts of employment may
choose to cheat on their certificates due to their need to earn money to support themselves
and their families. Moreover, the majority of seafarers from the developing countries are on
short-term employment contracts, and have in most cases very little, if any economic
protection during possible periods of un- or underemployment. Therefore it is to be expected
that these seafarers will be seeking to minimize their certificate maintenance costs, as well as
other costs, to enable them to save for an uncertain future. This in turn probably leads some
seafarers to purchase fake certificates to the detriment of investment of paying for training
and examination, as the latter approach would be much more costly to them.
15

The 2006 ILO Maritime Labour Convention (ILO, 2006) will, after its ratification, encourage
labour supplying states to control certification. The obligatory Standard A5.3 Labour-
supplying responsibilities of this same convention states the following:
1. Each Member shall enforce the requirements of this Convention applicable to
the operation and practice of seafarer recruitment and placement services
established on its territory through a system of inspection and monitoring and legal
proceedings for breaches of licensing and other operational requirements provided
for in Standard A1.4.
This standard is also subject to the flag-state double control mechanism (Payoyo 2008:4);
therefore we expect to see some decline in the production of fraudulent maritime education
and training certificates after the ratification of the ILO Maritime Labour Convention. However,
we do not believe that this will eliminate the problems altogether, as also the labour-supply
state procedures and the flag state control thereof are not expected to be entirely fail-proof.
Here, Obanda-Rojas et al. (2004:303) note:
[T]here is evidence of fraudulent practices in certain maritime administrations
themselves. This appears most obviously in the stealing (for black market sale) of
blank certificates by individual administration staff or the staff of the
administrations printers. But more serious than theft is systematic
maladministration by some authorities. Administrative deficiencies occur where
genuine certificates are issued but the seafarers concerned do not meet the
requirements for those certificates (commonly because they do not have the
required training documentation). One of the research team witnessed a
transaction for a full set of senior officer certificates and endorsements which took
place in the doorway of the maritime administration of a labour supplying country;
there were three separate individuals, working as agents for administration
officers, soliciting for business in the doorway at the time. Another type of
administrative deficiency occurs where seafarers present fraudulent national
certificates to obtain endorsements of recognition issued by a foreign
administration. In many cases, these forged documents pass undetected because
their authenticity is not verified by the administration issuing the endorsement (by
checking with the relevant training establishments or the foreign maritime
administration that has issued the presented documents).
Here, there is the potential problem that a dangerously wide tolerance zone may be created
after the implementation of the ILO Maritime Labour Convention, thus rendering much of the
protection against fraudulent certificates anticipated by the more optimistic stakeholders and
hoped for by, e.g., the quality shipping segment, the unions, the insurers and the environ-
mentalists seriously deficient.
Finally, with regard to obligatory assessment of the seafarers physical capabilities for working
as a seafarer, national legislation differs markedly, similar to what was illustrated by
Structured Assignment 5.1. However, these differences may possibly be minimized somewhat
because the International Maritime Organisations STW Sub-Committee is currently working on
new mandatory provisions for medical standards, which will be proposed for the coming
revision of the STCW Convention (BIMCOb, 2010). Unless international agreement on this
issue is achieved, the firms policy on this issue must be carefully considered, as there is
substantial debate and controversy on this issue. According to the former President of the
International Maritime Health Association and advisor to the UK Department of Transport, Dr.
Tim Carter (Wagtmann, 2008):
[E]mployers and crewing agencies should be able to test and intervene to prevent
those with health conditions that might endanger vessel safety, lead to a high risk
16

for disease transmission on board or require evacuation or diversion working at
sea. However the issue of whether tests that are additional to the statutory
requirements are being done in the interest of seafarers and maritime safety or in
the economic interest of the employer becomes paramount. The boundary between
prudent selection and discrimination is a hard one to define. [...]
it is my view that at least some employers and P&I Clubs overuse this argument.
For example, it is clear to me that a person who is extremely obese would have
trouble performing emergency duties such as fire fighting. However, this is not
necessarily the case for a person who is only mildly overweight, yet he or she may
not be accepted when recruited in certain countries because the employer does not
want to be met with demands in the future concerning the nutritional quality of the
food on ships or opportunities for exercise while on board. Female seafarers from
some major crewing countries are required to have gynaecological examinations
and sign declarations that they will not engage in unprotected sexual intercourse.
To me such practices indicate that the system has crossed the line and entered the
realm of discriminatory treatment.
I worry that the whole process functions as a deterrent to a much larger group of
seafarers and seeks to ensure that only the most physically fit members of the
developing countrys seafaring population are those who work on board the ships
owned by international companies. Should they develop a health problem they are
simply not selected for future contracts.
1.3.1 Structured Assignment 5.3 Insurance Matters in relation to crews
Insurance matters are indirectly addressed by the forthcoming ILO (2006) Maritime Labour
Conventions Regulation 4.2, which is about shipowners liability with regard to sickness, injury
or death occurring in connection with their employment. Moreover, private insurance schemes
will be commonly used to ensure seafarer compensation for the ships loss or foundering; this
area is the subject of the Maritime Labour Conventions Regulation 2.6. Finally, in a number of
countries, private insurance schemes are used to achieve the level of social security coverage
for seafarers mandated by Regulation 4.5 of the Maritime Labour Convention. The above
stated regulations in the Maritime Labour Conventions will replace a number of previous ILO
conventions which addressed the same issues.
In the Maritime Labour Convention, social protection of seafarers falls under the primary
jurisdiction of the labour supplying state, according to Regulation 5.3 of the Maritime Labour
Convention, whereas flag states are primarily responsible for ensuring that the Maritime
Labour Convention rules concerning employment on board ship have been implemented on all
ships flying the flag of the chosen flag state. As the Maritime Labour Convention allows for
some flexibility in implementation (Payoyo, 2008), it is to be expected that crew-related
insurance offerings will vary somewhat for specific flag state and labour supplying states.
Therefore we will take the current seafarer insurance regulations and regime of country of Nor-
way as our example in this structured assignment.
First, you must read pp. 24 39, i.e. Sections 4.1 to 4.3 of Selss, T.D., 2009. Ship owners'
liability towards crew members and their insurance cover for such claims. Masters Thesis.
Oslo, Norway: University of Oslo, Faculty of Law [online]. Available at:
http://www.duo.uio.no/publ/jus/2009/94334/FerdigxNavnxmedxvedlegg.pdf.
1. On the bottom half of page 25, a number of possible insurance types that are either found
under standard coverage by Skuld P& I rules or are additional insurance types for risks are
listed. Please make two lists, in which you state which of the mentioned types of insurance
17

are directly related to (a) insuring the crew (list 1) and (b) insuring the firm against risks
which are related to crew-related matters (list 2).

2. On p. 26, it is mentioned that the standard insurance for crew shall cover the members
liability for and then ten items are listed. Indicate which of the following Maritime Labour
Convention regulation(s) do these items, taken as a whole, refer to: Regulation 2.6 and/or
Regulation 4.2 and/or Regulation 5.3. Here, you can also consult the text of the ILO (2006)
Maritime Labour Convention, which is found at: http://www.ilo.org/ilolex/cgi-
lex/convde.pl?C186.

3. For the case of seafarers who are permanent residents of Norway, indicate areas in which
national insurance schemes or public sector welfare benefits also give compensation to
seafarers, thus reducing the burden of coverage born by the private sector insurance.
1.4.3 Structured assignment 5.4 Flag State Recognition of Certificates
For this structured assignment, you must read all website information about three flag states
recognition of the maritime education and training certificates from other countries and then
compare the flag states in terms of strictness. The three flag states are Bahamas, Denmark
and Singapore. Therefore, first please read all regulations about recognition of foreign training
certifications on the following web pages, including the relevant sub-pages:
o Bahamas Maritime Authority: http://www.bahamasmaritime.com/index.php?page=19 and
relevant sub-web pages
o Danish Maritime Authority:
http://www.dma.dk/Manning/Sider/DanishRecognitionofForeignCertificates.aspx and
relevant sub-pages
o Maritime and Port Authority of Singapore:
http://www.mpa.gov.sg/sites/port_and_shipping/shipping/manning_for_singapore_register
ed_ships/manning_requirements.page and relevant sub-web pages
After you have read these web pages, please indicate (a) which of the three countries in your
opinion has the most restrictive criteria for recognition of the educational, training and
competencies certificates from foreign seafarers and (b) which of the three countries in your
opinion has the least restrictive criteria for this recognition. After this, you may write up to 700
words to justify your answer to this question. Beyond, this, if you so choose, you may include
full bibliographical references to other relevant literature you have read.
1.4.4 Structured assignment 5.5 Sample Manning Agreement Documents of the
Philippine Overseas Employment Administration
For this structured assignment, you must examine the following documents: Philippine
Overseas Employment Administration (2010b): Sample Manning Agreement. Mandaluyong City,
Philippines: POEA [online]. Available at:
http://www.poea.gov.ph/agency/manning_agreement.pdf and Philippine Overseas
Employment Administration (2010c): Sample Special Power of Attorney. Mandaluyong City,
Philippines: POEA [online]. Available at: http://www.poea.gov.ph/agency/spa1.pdf.
1. First, elaborate on the Sample Special Power of Attorney, by explaining:
Who grants this power of attorney
To whom it is granted
18

Who is typically informed or needs to be inform of the granting of such a power of
attorney
In answering this question, you may write up to 400 words in your answer.
2. Please seek to place the responsibilities of the sample manning agreement within the
frameworks of Figure 2. Multiple possible seafarer labour employment chains by indicating
in your opinion which of the four supply chain(s) in this figure it is suited for use in. For
each supply chain type that you deem suited, please indicate which unit is the principal
and which is the agent. Then justify your answer in a few words. Here, you may write up
to 500 words in your answer.

3. Finally, based on your answer to 2, please fill in the figure on the next page to indicate who
bears responsibility for what according to the Sample Manning Agreement. If it is the
case that one actor type bears responsibility for some areas only in one or some of the
supply chains that you indicated suited in your answer to question 2, please also write this
in the figure, in relation to the areas for which you perceive that this is the case.
Ship owner or operator Ship manager Crewing agent

19

2. Assessment of employees and potential employees qualifications and suitability
for jobs and/or tasks via Psychological, Cognitive and Skills Tests
2.1 Introduction to Psychological, Cognitive and Skills Tests
According to Analoui (2007, p. 150), there are a number of types of tests that can potentially be assessed
in the personnel selection process and in other points in the course of employment, e.g. when departments
are restructuring or attempts are made to put together persons in teams:
o Aptitude tests: test that measures a persons capacity, talent or ability to learn and perform a job.
o Psychomotor test: test that measures a persons strength, dexterity and coordination.
o Job knowledge test: test used to measure the job-related knowledge of an applicant.
o Proficiency tests: tests used to measure how well a job applicant can do a sample of work to be
performed in the job.
o Interest tests: tests designed to determine how a persons interests compare with the interests of
successful people in a specific job.
o Personality tests: tests that attempt to measure personality traits.
o Polygraph: a device that records physical changes in a persons body as he or she answers questions
(also known as a lie detector)
o Graphology (handwriting analysis): use of a trained analyst to examine a persons handwriting to assess
the persons personality, emotional problems and honesty.
In this text, the following of the above test types are considered to be psychological tests: Interest tests,
personality tests, polygraph and graphology, as they deal with features mainly related to psychological
characteristics, e.g. the formation of personality and what motivates the individual. In contrast, aptitude
tests are classified by us cognitive tests, as they measure a persons intellectual abilities and capacities.
Finally, skills tests include psychomotor, job knowledge and proficiency tests.
Generally speaking, skills tests are best at providing information about a persons current level of skills.
Here, the skills tests must be optimally matched to the work skills required for the completion of the job. In
contrast, cognitive tests seek to provide information about a persons ability and capacity for learning in
one or more areas. As such, they seek to be say more about whether a person will be able to learn the
necessary skills or not. Of course, in many cases, it makes sense to combine the two types of tests. For, e.g.,
very physically demanding types of marine engineering work on some specialist ships, with requires both
physical strength and good coordination skills, but the ability to do advanced mathematical and physics
calculations, it might make sense to test young people seeking to educate themselves for this type of
marine engineering work to see if they have the necessary psychomotor characteristics as well as the
necessary mathematical and logical cognition skills which would ensure that they would be able to both
fulfil the physically demanding parts of the work and also master the fundamental physics and mathe-
matical knowledge that they will be taught in the course of their marine engineering studies. Another
example is the cultural intelligence quotient used at US maritime academy, to help nautical students to
assess their abilities and skills in relation to multicultural crews (see Benton & Lynch, 2006). In measuring
this quotient, both cognitive features and concrete intercultural coping skills are examined.
Also in later career times, such testing may also be potentially beneficial to the employee. As note by
Franck and Irminger (2008, p. 131) in their presentation of their seafarer competence testing battery:
20

Once candidates become employees, the next challenge is guiding these employees on their
way to new and more responsible positions, as they increase their skills. Counseling to the
required competences and knowledge ensures that young people can quickly and confidently
move into the right positions.
Psychological tests are a bit different. Here, as mentioned psychological characteristics such as personality
features and motivational factors are in focus. Moreover, Price (2007, p. 359-60) notes the following:
Psychological testing has been used for different purposes in mainland Europe and North
America, with the UK taking an intermediate view (Drenth, 1978). The reasons for this are
complex and reflect different traditions. The softer European approach has relied on more
descriptive, observational methods such as projective techniques and qualitative performance
tests that draw on psychoanalytic theory. Conversely, the American approach was dominated
by behaviourist attitudes, emphasizing objectivity and the quantitative use of data. The led to
the development of a massive range of paper and pencil tests, suitable for individual or group
use. Many European selection theorists have never been convinced of their merits. However,
in recent years, growth of a more systematic methodology has meant that the two approaches
have converged to a considerable extent.
Despite the methodological disputes mentioned in the above, it must be mentioned that a persons person-
ality characteristics are not only the result of psychological factors. Also factors in the persons social envi-
ronment (e.g., nature of upbringing, societal norms, interaction episodes with other people in ones adult
years, both at work and in ones free time) and bodily and biochemical factors (e.g. related to ones nervous
system, ones dexterity and physical strength, and to the external physical environment) play a role in the
development and manifestation of an individuals personality. This relationship is depicted in Figure 3.
For the case of, e.g., graphology tests, also knowing as handwriting analysis, one could argue that there are
inherent validity problems of such tests, as ones handwriting stye is also influenced by social environment
factors such as (a) how one was taught to write by hand and (b) which examples of handwriting were used
as good examples during the teaching process as well as by the bodily factor (c) the psychomotoric
characteristics of ones fingers strength, dexterity and coordination ability. Here, Thomas & Vaught (2001,
p. 35) also note:
Figure 3. Factors which influence personality

21

There is little evidence that graphology is accurate in predicting personality traits, or that the
narrow traits that many analysts infer from handwriting samples correlate with job perfor-
mance.
Concerning polygraph or lie detector tests, it must be noted that a substantial portion of the scientific com-
munity, including a majority of the surveyed members of the Society for Psychophysiological Research and
Fellows of the American Psychological Association's Division 1 did not believe that polygraph tests give valid
or reliable results (Iacono & Lykken, 1997). Here, the commonly stated validity and reliability problems in-
clude the circumstance that persons with especially sensitive nervous systems may fail the test, even if they
give truthful answers, whereas seasoned liars or persons who have practiced taking lie detector tests may
be able to pass, even if they lie. Based on the above, we will eliminate graphology and polygraph tests from
our further considerations.
Concerning the other psychological test types, e.g. personality and interest tests, if you as a student feel the
need to get the feel for such tests work in practice, it is recommended that you do an internet search
engine search for example personality tests and then examine some of the free examples that you get
through this search, possibly also taking some sample tests if you so choose and if you feel that the
websites conditions are acceptable to you. Here, if you speak another language than English, you might
also be able to find such tests in multiple languages if you use translations of the above terms and other
common terms for such tests in the other language(s) that you speak.
In relation to personality and interest tests, it must be noted that the quality of these tests varies greatly.
Some have not be validated properly in general terms, some are marked by the problem that the
respondents can fake answers by answering in the desired way, and in many circumstances the link
between the measured characteristics of the test and success in concrete jobs has not been proven
(Morgeson et al., 2007). Moreover, some English-language tests are reported to have an adverse impact
on ethnic minority groups or non-Native speakers of English, in which the native English speakers score dis-
proportionally higher (Wood & Baron, 1992, p.34); this problem probably exists in some tests of other
languages as well. To remedy the adverse impact problem, some psychological tests have been sought
translated, but with mixed results, as persons of various nationalities have different or perhaps even lacking
life experiences about certain topics covered or mentioned in the first language version of the test, and
there are also variations among cultures in issues such as which themes are taboo, when over- and
understatement is considered proper behavior, which may mean that the same items, despite a suitable
translation, as assessed in different ways by persons from different cultural backgrounds. Finally, a number
of nuances in such test simply cannot be translated perfectly, due to the fact that certain words or phrases
do not have exact equivalents in other languages. Thus, taking the example of Biggs (1988) personality and
interest-related categorization of individuals learning styles, Skaates (2004, p. 13-4) noted:
Biggs developed his Study Process Questionnaire by identifying various traits of student
learning, placing these traits on various versions of a questionnaire [] However, the results of
the use of various []versions of Biggs Study Process Questionnaire [] are not equivocal
regarding the factor loadings; this circumstance in turn calls into question the underlying three
motive theory. For example, some non-Australian, non-Canadian tests indicated validity only
for two factor solutions, the two loading factors being utilizing motives/ surface strategy and
internalizing motives/deep strategy []. Furthermore, [] the relationship between students
scores on various items of the Study Process Questionnaire and student demographic
characteristics such as age, gender, and extra-curricular experience varied significantly from
country to country.
22

On the basis of the above, one receives the best results from personality and interest tests if one checks the
following:
o Whether the test under consideration has been validated in relation to what it claims to measure and
in which population it has been validated
o Has the test been constructed in a way that makes it difficult to fake answers
o For English-language tests also used toward non-native speakers of English and/or ethnic minorities: Is
there an adverse impact factor here and, if so, how large is this problem?
o For tests that have been translated into another language: Has the translation been checked and has
the translated version been validated to ensure that it leads to the same results as the original
language version?
o Is there a link between what the test measures and performance in the particular position or positions
for which the test is being considered used?
Here, there is also differing national legislative and court case law practice concerning the use
of the test. In the United States, a few employees have successfully sued their employers
when these employers sought to use results from personality tests taken in the initial job
application on the medium and long term as indicators as to which promotion or further job
opportunities these employees should be given. Here, some of issue that were at hand in these
cases were (a) although the personality characteristics of adults of above 25 years of age are
generally relatively inert, these can still change to a greater extent for individual adults, and
(b) the low predictive validity of such tests in relation to job performance. In the coming
structured assignment, we will look at regulations concerning the use of data from
psychological tests in various EU member states. However, before we do this, it is interesting
to note a general ranking of correlation results for various application assessment methods as
discussed in this sub-section as well as the previous Section 1 of this module. The correlation
results, which are mainly based on UK data, are depicted in Table 3 on the next page.
Table 3 suggests that a combination of cognitive and skills tests provide the best correlation to
subsequent adequate job performance. After this, work sample tests, analyses of bio-data
(according to the UK practices for this), the use of an external assessment centre (which then
chooses and conducts a number of assessment procedures) and of structured & semi-
structured interviews also provide relatively high correlations as stand-alone methods. In
contrast, personality tests, non-structured interviews, references and graphology score as
stand-alone measures the lowest in the regression analysis.
Table 3. Correction between (a) Assessment Method and (b) Subsequent Adequate
Job Performance, mainly based on UK data (sources: Bertua et al., 2005; Price, 2007,
p. 367; Roth et al., 2005 & Smith, 1991)
Correlation range Assessment Method
0.5 - 0.6 Combined use of cognitive & skills tests
Work sample tests
Analysis of bio-data
Use of an external assessment centre
Structured & semi-structured interviews
Personality tests
Non-structured interviews
References
Graphology
0.3 - 0.49
Less than 0.3

23

Here, due to the relatively low score of personality tests, it is worth mentioning that many US
personnel psychologist suggest that the use of psychological tests, also when the above
methodological considerations have been taken into account, only account for at most around
15% of the total decision about whom to employ and are not used as a stand-alone measure
(Morgeson et al., 2007).
Structured Assignment 5.6 An Introduction to Legislation about the Collection and
Use of Psychological Test Data in Employment Contexts in various EU Member States
Similarly to Structured Assignment 5.1, this structured assignment is based on selected pages
in part one, i.e. Study on the protection of workers personal data in the European Union:
general issues and sensitive data, of Hendrickx, F., 2002. Protection of workers personal data
in the European Union. Two studies. Background research paper produced for the European
Commission, Directorate General for Employment and Social Affairs. Brussels, Belgium:
European Commission [online]. Available at:
http://ec.europa.eu/social/BlobServlet?docId=2507&langId=en. Here, you must first read the
following pages before you answer the questions: Section e titled Psychological tests on pp.
65-68.
1. Discuss possible advantages and disadvantages seen from (a) the employer or potential
employer perspective and (b) the employee or potential employee perspective if
psychological and cognitive test data is treated as other medical information. Here you may
write up to 600 words. Beyond, this, if you so choose, you may include full bibliographical
references to other relevant literature you have read.

2. Comment on what you perceive as the possible strengths and weaknesses of the Finnish
Employee Privacy Acts rules about personality and aptitude assessment seen from the
perspective of (a) the employer or potential employer and (b) the employee or potential
employee. Also here you may write up to 600 words. Similarly, if you so choose, you may
include full bibliographical references to other relevant literature you have read.

2.2 Use of Psychological, Cognitive and Skills Tests in Ports and with regard to
Seafarers
2.2.1 Use of Psychological, Cognitive and Skills Tests in Ports
With regard to the use of psychological, cognitive and skills tests in ports, the authors of this
text were not able to find newer academic studies of this area; however, as expected, they
could find some internet and newspaper sources indicating that these types of tests are in use
in certain port operating or stevedoring firms.
Based on this, the following statements will be made: It is important that the psychological,
cognitive and skills tests used in a port or more ports for personnel selection purposes are only
used in a manner allowed by the law of the country in which they are used. Here, multinational
port or stevedoring companies must be aware that laws on what is allowed differs from
country to country, also within the European Union, as was indicated by Structured
ASsignment 5.5. Moreover, based on Table 2, it is suggested that much more weight should be
put on cognitive and skills test than on personality or interest tests, and that for each job type
to be filled that [i]nformation about the business and technical processes, informational and
other connection points as well as the cultured aspects is gathered from different parties in the
business (Frank & Irminger, 2008, p. 127) to enable the optimal selection of tests with regard
24

to purpose. Here, finally, the following aforementioned test-specific aspects should also be
checked beforehand:
o Whether the test under consideration has been validated in relation to what it claims to measure and
in which population it has been validated
o Has the test been constructed in a way that makes it difficult to fake answers
o For English-language tests also used toward non-native speakers of English and/or ethnic minorities: Is
there an adverse impact factor here and, if so, how large is this problem?
o For tests that have been translated into another language: Has the translation been checked and has
the translated version been validated to ensure that it leads to the same results as the original
language version?
o Is there a link between what the test measures and performance in the particular position or positions
for which the test is being considered used?
2.2.2 Use of Psychological, Cognitive and Skills Tests with Regard to Seafarers
Here, most of the advice in the previous sub-section apply to seafarers as well. Here, drawing
on the criticism of the STCW Conventions White List, as mentioned in Subsection 1.4, a
number of seafaring employers perceive a need for extra skills tests of the seafarers they
employ. Moreover, in the case that tests are used, the legal framework concerning data
protection may be a bit more difficult in certain circumstances. Here, in cases in which the
crewing responsibility has been delegated by the ship owner, ship operator or ship
management company to a crewing company (see Figure 2, also in Subsection 1.4), the ship
owner, ship operator or ship management company may either simply specify which tests are
to be used by the crewing company and a threshold acceptable score for these tests or
delegate the responsibility for the tests to the crewing company without any further
specifications. However, in other instances, it may be that test data may in fact be transferred
from one country to another. In this case, both countries legal rules concerning such tests
must be fulfilled.
Seafaring is a demanding field of work in many respects; therefore it is no surprise that the
STCW Convention has sought to set an international standard. Here, also, Sharma (2002,
p.22) states for the case of ship officers:
it is one of the rare professions where one can get an opportunity to apply all of
what the student has learnt in his college. And one has to learn a lot at college and
constantly update this knowledge at sea.
In the future, the industry can also only expect stakeholder demands to increase, with stricter
technical and operational demands, stricter laws, and correspondingly more complex
technology (Short 2004). Moreover, the shipping industrys chosen response to these demands
has been the increased use of testing (Bordal et al., 2002, p. 20). In India, for example, the
use of a test evaluating factors such as adaptability, emotional strength, frustration tolerance
level, tendency towards anger and aggression, anxiety, depression and loneliness has been
made obligatory for all future maritime officers apply for admission to pre-sea MET courses
(Director General of Shipping, India, 2006).
Moreover, as discussed in this modules subsection 1.1, due to the recent and current ship
officer shortage, some shipowners have been forced to change the job characteristics or
requirements for the seafaring officers they employ. Here there is a growing concern about
25

substandard seafarers being employed both at sea and in shore-based positions (Lloyds Ship
Manager, 2007a), which may also lead to further testing by some stakeholders.
However, some of this changing of job characteristics has also been marked by concern about
broader societal objectives, such as providing opportunities to the disadvantaged. Here, The
United States has recently sought to fill empty places in its maritime academies by running
campaigns to disadvantaged and impoverished inner city youth (Joshi 2008b), something
which has also been enabled by the recent years of a worldwide shortage of officers (Lloyds
List, 2008b). Also in Denmark, one smaller ship owner has sought to re-socialise young Danes
who have run into problems with the law, as a part of recruitment program which
encompasses both potential Danish ratings and Danish officers (Mikkelsen, 2008). Also here,
when such societal objectives are also sought fulfilled, the participating firms or public sector
units may perceive a need to test potential applicants to ensure their suitability.
In relation to the psychological tests of seafarers to reduce potential dangers at sea, Carter
(2005, p. 63) notes a bit critically:
There has been no validation of psychological test methods as predictors of risk at
sea, although they had been widely used in some countries for a number of years.
Studies on defence force naval recruits were not considered to be relevant to
merchant seafarers, as there were major differences in organisational structure,
oversight, financial pressures and crewing levels.
Thus, although psychological tests are attempted used to reduce the risk of risky human
behaviour or other types of human error at sea, the testing methods used still need to be
validated for the specific case of commercial shipping. In contrast, there is evidence from a
Polish round of tests that seafarers do not deviate negatively from the population on the
personality characteristics neuroticism, extraversion, openness, agreeableness and
conscientiousness, intellectual aptness, kinetic coordination, attention span, analytical and
detail oriented thinking (Jezewska, 2003): this round of personality testing of Polish seafarers
was also used to developing Polish seafarers health promotion and leadership testing
initiatives (Jezewska et al., 2007). Moreover, for the specific case of Polish cadets attending
maritime education and training programs, it was also sought compared to their studies and
career development in Jezewska & Leszczynska (2004). Similarly, in the Philippines, Jaleco et
al. (2010) found that the psychosocial behaviour among the marine engineering graduates of
the John B. Lacson Foundation Maritime University-Molo was very satisfactory.
With regard to cognitive and skills tests, we note that such tests are in used in a number of
cases in which shipowners perceive that the training of seafarers has been lacking in relation
to the requirements in the STCW Convention or the ISM Code. As an example of the extreme
case, some tanker operators such as Teekey and NYK have even gone so far as to develop own
competency standards and then have their own competency levels certified by Det Norske
Veritas (Horck 2007, p. 221).
However, in cases where, e.g., the obligatory STCW requirements are met, other competences
may also come into focus. For example, based on future market needs, a Norwegian study
called Future Competences of Seafarers (Bordal et al., 2002) concluded that while Norwegian
ship officers are strong in the professional seafaring officer competence requirements, they are
much less strong concerning general management and interpersonal competence. Here, to
some extent, also the ISM Codes focus on human factors is indirectly related to these latter
types of competences. Thus, to some extent, it also makes sense to assess these competence
areas as well in seafarers to ensure a safe and pleasant working environment on board.
However, in high income traditional maritime nations such as Norway, where seafaring officers
26

typically also fulfil a number of land-based positions, it is also possible that some employers
seek to find seafaring officers who are also strong in these fields as well for filling future shore-
based position, and this also during the initial sea time of the potential future shore-based
employee. However, whether this is a good idea or not can clearly be discussed as some
would argue and some legal regimes also mandate - that one should test competencies
related to the currently sought position only.
Pertaining to English language skills, a large number of shipowners perceive that some crew
from certain non-English speaking countries have relatively weak English-language skills (see
Wu & Morris, 2006; Sharma, 2002). Here, it to be noted that for the purposes of navigation
communication and other ship-shore based communication, the IMO has developed a
recommended Standard Maritime Navigational Vocabulary (SMNV) and Standard Maritime
Communication Phrases (SMCP). Here, navigational schools in countries where English is not
the mother tongue place various levels of emphasis on these specialised English vocabularies
compared to normal communicative English, just as the total ambition level for the level of
proficiency in the English language varies from maritime academy to maritime academy.
Although the maritime English vocabulary and communication phrases have been modelled on
the special cockpit-control tower English which is spoken world-wide between pilots on
aircraft and the control power personnel in airports for safety reasons, there is some
controversy about whether a too one-sided focus on the standard maritime vocabulary and
phrases will actually improve safety on board ships (compare, e.g., Loginovsky, 2002;
Pritchard, 2003; Rojo-Laurilla, 2007 Sampson & Zao, 2003; Short, 2006; Winbow, 2002).
Here, some authors point out that the standard maritime phrases are only usable in a few
critical situations, and that there are also many potential possibilities for errors, including
potentially unsafe errors, in other aspects of operating and maintaining the ship and being on
board in a crew environment in which crew members come from different countries and have
different mother tongues. Moreover, some authors point out that while airplane crew are only
on board an airplane for a number of hours, the crew on board a merchant ship is typically
together for weeks at a time and that also management and social problems may arise if the
English-language training has been too narrowly focused on certain phrases. This first two
points of criticism can possibly be solved by employing a crew composed of members with a
single mother tongue, e.g. speakers of Cantonese Chinese from China and the Hong Kong
Special Administrative District, who then only have to use the standard maritime English
vocabulary in their communications with pilots and various shore-based units, as they can use
their native tongue on board ship. However, a final point of possible criticism is that in many
English-language maritime academies, the standard maritime vocabulary and phrases are
also not taught as such, meaning that persons who have studied at such a school may not
recognize these phases when they are attempted used by non-native English speaking ship
personnel. This possible problem area applies for all non-native English speaking crews,
regardless of whether they are composed of one or more other native languages.
In relation to the above debate, there is a small number of English language competence tests
specially developed or being developed for commercial shipping (see Takagi et al, 2006). One
example of a test battery is the MarTEL test battery (see: http://www.martel.pro/). It focuses
more heavily on the standard maritime vocabulary and phrases (see, e.g. Ziarati, 2009;
Ziarati et al, 2009). A second example is as follows: The umbrella organisation for the national
shipowners employers associations, the International Shipping Federation, has together with
the private sector maritime training company Marlins developed the ISF Marlins English
Language Test (see: http://www.marlins.co.uk/isf_test.htm), which also focuses to some
extent on the standard maritime vocabulary. On the Marlins website, other maritime
competence and skills tests are also offered. Here, there is a lack of an overall study of which
27

tests are best on which measures. Therefore HR managers can only be advised to examined
several tests and choose the one that seems to fit their needs best, both in terms of the
language competencies assessed and the way the test is scored and administered.
Structured Assignment 5.7 On the Development of Behavioural Markers for Assess-
ment of Seafaring Officers Skills in Managing Crisis Situations
For this structured assignment, please first read Gatfield, D., 2005. Using simulation to deter-
mine a framework for the objective assessment of competence in maritime crisis management.
In: Proceedings of the Society for the Advancement of Games and Simulations in Education
and Training 2005 Conference held in Portsmouth UK at the University of Portsmouth.
Southampton, UK: Warsash Maritime Academy (online). Downloadable from:
http://www.solent.ac.uk/mhfr/resources/SAGSET%202005.pdf.
1. Write in up to 800 words (a) the reason why a system to assess competence in crisis
management of marine engineering officers with the vessel engine control room is being
developing and (b) provide your opinion of whether such a tool would be of use to those
firms who hire or employ marine engineering officers. Here, you may site external sources,
listing these in a separate list which does not count toward the 800 words, if you do so.

2. Summarize in up to 600 words the process of developing this framework for assessment
until the date of the article.
Structured Assignment 5.8 Assessment of the American Clubs Guidance on Pre-
Employment Medical Examinations
For this assignment, you first need to assess and read (a) American Club, 2008. Guidance for
Members on Pre-Employment Medical Examinations (PEMEs). New York, New York USA:
American Club [online]. Available at: http://www.american-
club.com/forms/non_peme_guidelines_form.pdf, (b) the explanatory overheads of Moore, W.,
2009. The American Club Pre-Employment Medical Exam (PEME) Program. New York, New
York USA: Shipowners Claims Bureau, Inc. [online]. Available at: http://www.american-
club.com/seminars/pemeprogram.pdf, and (c) the background web page American Club, 2010.
PEME Medical Forms. New York, New York USA: American Club [online]. Available at:
http://www.american-club.com/index.cfm?objectId=D4916452-1185-12E0-
57BFC637B61E7FD6.
1. First, summarize the reasons for the use of these forms by the P & I Insurance company
The American Club - Shipowner Claims Bureau. Here, you may write up to 400 words in
your summary.

2. Second, discuss possible advantages and possible problems of the shipowners use of these
forms, if the shipowners crewing is organised according to (a) employment chain 1 and (b)
employment chain 4 of Figure 2 of Subsection 1.4 of this module. Here, you may write up
to 600 words and you may also site external sources, listing these in a separate list which
does not count toward the 800 words, if you choose to do so in your answer.

3. Finally, take the perspective of a seafarers union. Are there aspects of the questionnaire
would such a union potentially find positive, in your opinion, and are there aspects which
the union might possibly wish to raise with either (a) the employer using the form or (b)
the government in the country in question? Here, similarly, you may write up to 600 words
28

and you may also site external sources, listing these in a separate list which does not count
toward the 800 words, if you choose to do so in your answer.

29

3 Employee Performance Appraisal, Retention and Career Planning Schemes

3.1 General information about performance appraisal, and human resources work
with retention and career planning
According to Analoui (2007, p. 202), performance appraisal is an instrument used to evalu-
ate the performance of an organisation and its employees. Performance appraisal has essenti-
ally two goals: to create a measure that accurately assesses the level of a persons perfor-
mance in a job, and to create an evaluation system that will advance one or more operational
functions in an organisation. In the following, we will first discuss the level of assessing an in-
dividual employees performance in a job, then go on to discuss retention and career planning
in general. In subsection 3.2, we will discuss appraisal, retention and career planning with
regard to dockers in ports and port firms; in Subsection 3.3, we discuss the same for the case
of seafarers on merchant ships; and in Subsection 3.4, we discuss this for the case of shore-
based maritime transport industry employees. Finally in subsection 3.5, we return to discuss
the creation of an organisational unit level evaluation system of human resource performance.
Figure 4 below seeks to place performance appraisal in the framework of the Harvard model of
Human Resource Management, which was first discussed in Module 1, Subsection 1.3.
Figure 4. Performance Appraisal in the Context of General Human Resource Manage-
ment (adaptation of Beer et al., 1984, p. 16 and various insights from Tahvanainen,
1998)

In Figure 4, the four boxes above the blue line concern aspects of the Harvard Model of Human
Resource Management discussed in Module 1; here, by performing performance assessment,
human resource employees are mainly dealing with the policy issue of managing human
resources in qualitative terms, i.e. regarding efficiency and other performance criteria.
However, in the first red box below the blue line and also the blue box, it is seen that also a
number of quantitative issues may be at stake (a) how much performance-related pay is to
be paid, an issue which as discussed in Module 3 Subsection 3.3 and (b) how much money to
invest in general or employee specific education and training measures as well as in career
30

planning and retention efforts for individual employees. Here, the issues of career planning and
retention will be discussed further in this sub-section, whereas Section 4 of this Module will
deal with planning education and training. Finally, after performance evaluation, the individual
employees results may be cumulated and reported, as indicated in the green box below the
blue line. Such reporting is commonly used to revise the organisations strategies and goals
and also to revise specific HRM policy choices concerning both the qualitative and quantitative
management of human resources, the reward systems, the organisational optimization of work
systems and perhaps even the command and employee input systems; it will be discussed in
the coming Subsection 3.4 of this module.
In Module 1s subsection 5.2.1 and 5.2.2 on the basis of Liberman & Torbirn (2000), we
discussed the circumstance that types of appraisal that are considered acceptable or
positive by employees appears to vary between countries and the resulting fundamental
dilemmas for multinational companies who seek to conduct appraisal in multiple countries also
with the goal of comparing the various units performance. We therefore recommend that the
student reread these passages, if he or she does not recall their content, as the points made
there must be considered as necessary background information for the maritime transport
sector-specific remarks that we make in the next three three sub-sections of this module.
Career planning refers to conversations with employees about their future career wishes and
expectations, possibly seeking to influence these expectations, coaching employees about what
they need to do to reach their own goals or to convince the employing organisation to promote
them in their preferred career paths and also providing suitable education and training, as
discussed in the coming Section 4. Here, career planning is generally more extensive in those
countries whose organisations make a relatively greater use of internal labour markets as
opposed to external labour markets in their personnel selection work. However, in both market
models, it is seen that not all employees are provided with career planning opportunities. For
example, in the Greek shipping industry, the survey of Theotokas & Progoulaki (2007) showed
that 86% of the officers of Greek nationality in the surveyed companies were offered career
plans, whereas the figure for the foreign officers in the same sample of Greek-owned
companies was only 14%.
Retention is related to career planning, but a bit different it is the attempt to keep an
employee working in the same organisation. Here, for the case of a time-unlimited
employment contract, the issue is to seek to minimize the chances of the employee seeking
employment elsewhere. For the case of time limited contracts which are renewed, as is the
case for seafarers of many countries, the issue is to signal to the seafarer(s) in question that
one wishes to employ them again on a new contract. Seen from the point of view of the
employee, retention is related to a number of issues, which we discuss using Figure 5.
First, on the horizontal axis, of this figure, Welch (2002) indicates the importance of the factor
of the employee perception of his or her psychological contract with the particular employer in
question. Here, by psychological contract, we mean the employees beliefs concerning the
reciprocal obligations between him or her and the employing organisation. In other words, the
employee expects to fulfil what he or she perceives as the employers demands concerning ful-
filling a number of tasks in a specified manner or according to efficiency, effectiveness or other
considerations (e.g. safety). In turn the employee expects to receive certain things from the
employer, e.g., acceptable wages and benefits, fair treatment, acceptable working conditions,
an acceptable information about future tasks or changes in the company, career planning
and/or education, etc. Each employees perception of the psychological contract will be slightly
31

Figure 5. Retention Likelihood (adaptation of figures in Welch, 2002, pp.156-158)

different; however, there may also be systematic national or regional variations among
employees as well as discussed in Module 1s Subsections 2.2 and 5.2.1.
The vertical access deals with the extent to which the employee perceives a close relationship
to the company or that the relationship is more impersonal or arms-length. Here, there may
also be systematic national or regional variations as discussed in Module 1s Subsections 2.2.
and 5.2.1; these variations may also be related to the relative use of permanent employment
contracts versus temporary employment contracts in the country or region in question, the
national or regional discourses about the desirability of close relationships between employers
and their employees, about whether internal recruitment is to be preferred to external and
about lifetime employment and finally, the national level of employment protection
legislation, as discussed in Section 1 of this module.
Finally, regarding both axes, it is likely that national labour market circumstances such as the
general level of unemployment and whether there exists labour market failure in the job
markets potentially accessible to the employee (see, e.g., subsections 2.3.4 and 2.4.3 of
Module 3) and the extent of unemployment insurance protection also influence perceptions of
individual employees concerning how much tolerance they have for violations of their
psychological contact, i.e. when they would consider the psychological contract broken.
Moreover, the same factors can also influence the employees preferences for a close
relationship here, however, it is not certain that the employers are similarly influenced. Thus,
retention is in sum influenced by the individuals perception of events during the course of his
or her employment, the nature of the employment relationship, as well as broader societal
circumstances which can vary from nation to nation.
However, in the instance that an employee perceived who initially perceived a close
relationship to the company and an intact psychological contract, i.e. position T
1
in the above
figure, then perceived that the psychological contract is broken, the initial perceptive reaction
of this same employee is likely to be a move to position T
2
in the same figure (ibid.). Here, if
the company is utterly successful in perceiving this and immediately repairing the
psychological contract, the employee may return to position T
1
. However it is also likely that
even if the social contract is renegotiated and thus repaired, for a period of time the employee
may still be testing the relationship to the company and thus place himself or herself in
position T
3
, where he or she is still more psychological distanced from the company and thus
does not have the close relationship that once exists (ibid.). This is due to the fact that trust in
workplace relationships is temporarily asymmetric: it takes time to build up, yet can be
destroyed very quickly (Lewicki & Bunker, 1996, pp. 124-5). Here, what happens after this is
uncertain. If, over time, the trust can be built up, the employee may end up in the green initial
32

field of Figure 5 again, with the close relationship renewed. However, it may also occur that
the employee does not return to this field again and maintains an arms length distance, thus
remaining in the same square of Figure 5 as position T
3
. Moreover, if a further break of the
psychological contract occurs, it is likely that the employee will move to the red quadrant of
Figure 5, where he or she will seek to leave if a suitable alternative job or life path that
guarantees economic security can be found.
In the instance that the relationship between the employee and the firm is more distant in its
point of departure one can say that the relationship starts in point T
3
and that what probably
happens after a single grave breech of the psychological contract is a marked immediate
increase in the propensity of the employee to consider leaving.
3.2 Performance appraisal and human resources work with retention and
career planning with regard to dock workers and stevedores in ports
In decades gone past, dock work and stevedoring was generally considered by employers and
industry outsiders to be unskilled labour that could be conducted by anyone who was
physically strong enough for the work; however, in practice, in workplaces, some specialization
and training through socialisation occurred in practice (see, e.g., Danish Maritime Authority,
2001, p. 21). However, in recent history, Turnbull (2009a, p. 7) notes:
With the introduction of new technology, most notably containerisation, much of
the variation has been removed as cargo is unitised, but employment levels still
fluctuate and new skills are required. Driving skills are no less demanding than the
physical effort associated with manual handing. Maintaining high levels of efficiency
and service quality on a modern-day container terminal requires concentration,
consistency, precision and effective communication skills. Investment in physical
capital must be matched by investment in human capital. Above all, terminal
operators need to ensure the reliability of all their investments. Accidents,
breakdowns or other stoppages can be very costly.
With the cost of ship-to-shore gantry cranes, straddle carriers, top-loaders and
other equipment running to several million euros, it is hardly surprising that
terminal operators prefer to employ regular, dedicated workers to operate such
expensive equipment. High levels of efficiency are more easily sustained when port
workers are familiar with the equipment, terminal layout, vessels, etc. [...] The
modern-day port worker is not only highly skilled but increasingly multi-skilled.
Based on the above work characteristics, some ports use very specified assessment schemes
to communicate about performance demands and appraisal to their employees, at the level of
daily operations. This is illustrated by Table 4 on the next page, which is an excerpt of the
English translation of the competences assessment scheme with regard to loading/ unloading
loads and handling, stowing and levelling cargoes in the Port of Hamburg (Scharringhausen,
2005).
The scheme is actually much more detailed, meaning that in practice it also encompasses,
e.g., specifications about (a) the wide range of cargo handling tools and devices used (e.g.
trolleys, pallets, platforms, big bags, barrels, bales, containers), (b) special types of cargo
requiring special attention (fragile goods, hazardous and/or noxious substances, perishable
goods, oversized cargos, lifestock, etc.), (c) various handling procedures, (d) variations in
packaging materials (cardboard, wood, polystyrene, etc.), (e) how to handle shippers
demands concerning the stowing conditions with regard to, e.g., temperature, humidity, light
conditions, etc. Moreover, the correct use of both the working equipment and the protective
equipment mandated by occupational health and safety regulations are measured, when the
33

scheme is used. Finally, the performance of the employees is measured at different times, i.e.
both at the start of a shift, when they are expected to be less tired, and at the end, when they
may be more fatigued, and during non-peak and peak periods, to ensure that the stress of
working in peak situations does not impede on their ability to carry out their tasks precisely
and in full accordance with the specified procedures (Scharringhausen, 2005).
Table 4. Scheme for Dockers Performance Assessment in the Port of Hamburg, with
examples of achievement criteria (Scharringhausen, 2005)
Competence elements Achievement criteria
1. The dock worker uses cargo
handling tools and devices.
The tools and devices are used in accordance with
the weight and form of the handled load.
The tools and devices are used according to the
provisions in the technical specifications.
The tools and devices are correctly and attentively
used, avoiding their degradation and the damage of
the cargo being handled.
The technical faults appeared during the usage of
the tools and devices are promptly reported to the
responsible persons.
2. The dock worker applies the
cargo handling procedures.
4 achievement criteria are used
3. The dock worker forms unitary
loading/ unloading loads.
4. The dock worker stows the
packaged cargo.
5. The dock worker levels bulk
cargoes.

In the Port of Rotterdam, Netherlands, the employing organisations worked together with the
local unions to put together four different general competencies descriptions, for the four dif-
ferent specializations of dock workers at this port: (a) Work with containers, (b) Work with Ro-
Ro vessels, (c) work with mixed cargo vessels, (d) work with bulk cargo vessels (Veringa,
2005). In Rotterdam, to take the example of the dock workers working with containers, the
format of the competency profile is as follows (Veringa, 2005, p. 87-89):
The job description states that:
The dock worker is employed by a container handling company in the port. The dock worker
works in shifts, loading and unloading seagoing vessels, freight barges, railway wagons and
lorries, with the aid of various loading and unloading equipment.
The work consists of:
operating cranes, straddle carriers, terminal tractors and reachstackers.
securing and unfastening cargo with the aid of bars, stackers and twist locks.
in the role of (radio) signaller on deck and (radio) signaller on shore, communicating by
walkie-talkie with crane drivers in connection with positioning the cargo. [...]
On the basis of the job description the dock worker is responsible for the following key tasks:
34

loading and unloading the ship
moving cargo
securing and unfastening cargo
communicates with deck/ crane and shore
checks cargo
These key tasks are explained in a description of the process, with attention being paid to the
same points as in the job description:
role and responsibilities
complexity
which other persons are involved
which aids are used
what the desired result is.
Key demands are capabilities someone must have if they are to perform the key tasks well. In
the competency profile for the dock worker containers, these are defined as follows:
The dock worker has to make a choice between working safely and working quickly. Ships
must be loaded and unloaded as quickly as possible. This yields money for the company. It
is also very important that the cargo is handled in a safe manner.
The dock worker has to work in a job with irregular shifts and a lot of stress, and he must
keep physically fit. Switching from day to night shift is physically very demanding on the
dock worker, as is working under stress.
The dock worker has to judge when he can solve problems himself and when he needs to
report them to his superior.
The dock worker has to work meticulously and accurately. Any mistakes made can have
extremely serious consequences.
The dock worker has to show flexibility with respect to the jobs he carries out (today
securing cargo, tomorrow driving a gantry crane).
Following a description of what the work of the dock worker entails and which capabilities he
must possess to perform this work well, a list of competencies which the dock worker must
satisfy was drawn up.
operating a reachstacker
operating a terminal tractor
operating a straddle carrier
operating a forklift
operating a gantry crane
entering cargo data
using manual tools
acting responsibly
co-operating with colleagues and other parties involved
updating his professional skills
With regard to the above list of competencies, these are also specified in much more detail in
the full-length Port of Rotterdam competency profiles. In relation to Figure 4 in Subsection 3.1
of this module, Veringa (2005) specifies that these performance specifications, which could be
placed in Box C of Figure 4, are mainly used to ensure that the Ports goal of being flexible, to
enable superior customer-orientation (with in turn is related to Box A of Figure 4), is met via
the assessment (Box D) of individual (box C1) and collective (box E) educational and training
35

needs. Moreover, Veringa (ibid.) also states that this assessment of educational and training
needs also result in the planning of suited courses towards the aim of fulfilling the performance
specifications (box C), which ultimately should ensure the goals of flexibility and superior
customer-orientation (Box A, once again). We will return to the issue of education and training
in Sections 4 and 5 of this module.
However, here is must also be specified that the increased demands for flexibility and thus
multi-skilled employees that are described in the above paragraphs are related to the new
forms for port organisation that have come as a result of the port reform processes which were
previously discussed in Module 1s Subsection 4.3 and structured assignments 1.9 1.14 and
Module 3s structured assignments 3.1 and 3.6. Here, the abolishment of rigid and outdated
job descriptions and duties and the reclassification of posts (World Bank 2008, p. 317-8) are
typical organisation changes that also lead to rounds of renewed clarification of performance
expectations, which in turn relate to Boxes A and C of the performance appraisal Figure 4 in
the previous subsection of this Module. Here, with regard to performance appraisal, education
investments and the meeting of the port organisations goals, Turnbull & Wass (2007, p. 603)
describe the more long-term oriented practice of the container handling services company
European Combined Terminals (ECT), which also operates in Rotterdam, as follows:
ECT spent up to 10 percent of its annual turnover on training to ensure that all its
port workers can now undertake up to four different jobs on the container terminal
and the companys collective agreement provides for functional combinations of
two or three jobs to be performed within the same shift. These changes, in
conjunction with increasing automation and the phasing out of noncontainer
operations, enabled ECT to reduce wage costs from over 60 percent of its operating
costs in 1996 to just over 50 percent by 2000.
With regard to the ports more general long-term processes towards developing such flexibility,
Turnbull & Wass (ibid., p. 588, 589) state the following:
[Regarding] employment arrangements in tool ports, [...] there is typically an
institutionalized division of labor between dockers (quay-side cargo handling) and
stevedores (ship-side cargo handling). The former are often permanent employees
of the public port authority, whereas the latter are usually registered by the state
and hired on a casual basis by independent private operators. Containerization and
the transition to a landlord structure require the integration of these two groups
and a shift from port- to company-based employment if operational efficiency is to
be maximized. [... U]nder a landlord model, especially at the ports container
terminals, the best practice employment system comprises: a core of permanent,
highly skilled and functionally flexible crane drivers (e.g., ship-to-quay and other
heavy lift equipment); access to a group of regular casual workers who are
familiar with the companys operations, typically supplied by a union hiring hall or
state-run labor pool to meet peak operational demand and/or perform less-skilled
tasks (e.g., container un/lashing and basic driving jobs); and temporal flexibility
across the entire workforce.
Moreover, the temporal flexibility, i.e. flexibility with regard to working hours and worktime, is
most often also a key element in the new clarification of performance expectations (i.e. box
C of Figure 4), as is the demand for a more multi-skilled labour force. The employer
perspective on this issue was presented in Module 3s Structured Assignment 3.2, which
presented Nottebooms (2010, p. 45-51) work on relations of labour productivity, flexibility
and indirect labour costs to ports performance. However, this process does not always go as
smoothly as is hoped by employers, as stakeholders such as employees and their unions may
opposed major reforms, if they perceive that these worsen their circumstances. For the case of
New Zealand, Reveley (1999) describes the way in which unregulated casual work very quickly
36

replaced more permanent and negotiated work arrangements in this countrys ports, as a
consequence of both efforts at port reform and as the passing of this countrys Employment
Contracts Act in 1991, which gave the unions more difficult operating conditions and thus less
power to set limits on flexibility with regard to working hours and worktime, which then, in
turn, resulted in some workplace struggle as well as societal debate of the circumstance that
the unions now had less power and that working conditions had been changed in this way.
Here, however, Turnbull (2009a, p. 9) notes why this has been undertaken, seen from the
perspective of the terminal operators, which is usually more narrow that the societal
perspectives:
Under the landlord model, for example, terminal operators may prefer direct
employment but this does not diminish their need for flexibility and access to
additional labour to meet peak operating periods or unsocial hours (e.g. night
shifts and weekend work). Where port labour pools exist, operators have access to
additional labour to meet their daily operating requirements .If these workers are
multi-skilled, then the pools ability to satisfy requests for additional labour is
greatly enhanced and the costs of their own operations are greatly reduced.
These developments, which have been mainly described based on European and New Zealand
examples, are also mirrored in other world regions. Here, World Bank (2008, p. 317) describes
the following for the case of a pair of Latin American ports: [C]ompetition arising due to the
proximity of the Port of Sepetiba to the Port of Rio de Janeiro, Brazil, has encouraged the latter
to negotiate more flexible labor arrangements. Moreover, for the case of Ghana, this same
World Bank report (ibid, p. 322) notes:
As a strategic option to achieve its development objectives, the government of
Ghana designed in 1998 the Ghana Trade and Investment Gateway Project [...] to
create an environment conductive to economic growth and development led by
private sector initiatives.
Within this context, the government of Ghana has approved a policy to further
improve the operation of the ports, which will reduce the cost of operations and
shorten the turnaround time of ships. The policy entails increased private sector
participation in the management of ports. The Ghana Ports and Harbours Authority
(GPHA) will be converted into a landlord port authority while the private sector
will participate in port operations, particularly container handling operations,
dockyards, and sites maintenance and services.
Concerning strategy HR considerations, the cumulative strategic goal of the individual
operative tools that are used to manage the docker labour workforce may focus on meeting
the market-oriented demands of the key port stakeholder the customer to an increased extent
(Notteboom, 2010, pp. 29-30). In Figure 6 on the next page, some of Nottebooms insights
(ibid) have been sought inputted into the human resource management model of Beer et al.
1984, p. 16, as was originally presented in Figure 3 of Sub-section 1.3 of Module 1.
In Figure 6, it is seen that customers demands, which are derived from the intense compe-
tition that they are subjected to, essentially are about ensuring efficient service when in port,
i.e., minimization of ship turnaround and cargo handling times in ports and minimization of
cargo damages and other irregularities, as indicated in the D-box of the figure. To meet these
demands in order to ensure the ports future competitive can be said to be the strategic aim of
the port, as shown in box E. With these future goals in mind, the strategic port HR policies (in
Box C) mainly concentrate on (a) increasing labour productivity, (b) increasing labour flexi-
bility, (c) increasing cargo handling value per docker and (d) reducing indirect costs of port
labour. However, this is often a very difficult balancing act, due to employees concerns that
37

their working conditions may also be worsened, which sometimes may lead to strikes or other
disturbances in cooperation. It is here also to be noted that article 3 of the ILO Dock Work
Convention 137 states that Registered dock workers shall have priority of engagement for
dock work (ILO, 1973) may also be a point of contention, especially in the countries that have
explicitly ratified it. Thus also dialogue with employees and their unions is often attempted to
ensure understanding and cooperation in relation to more wide-ranging strategic reforms.
Figure 6. How customer demands drive strategic HR work in ports (based on a
combination of Beer et al., 1984, p. 16 & Notteboom, 2010)

With regard to employers work to retain the staff they employ at ports, in recent years, due to
the port structuring processes, reducing port workforces has been the a issue, with some ports
of the world having to shed as much as 2/3 of their workforce (Hill, 2005, p. 77). The issue of
reducing the workforce will therefore be treated here, before we move on to look at retention
policies. Here, Hill (ibid., p. 78) notes:
A preferred strategy is to phase out the workforce by voluntary retirement. When
this is not possible, or is insufficient, the workers may be employed causally or
given reduced hours to ease the process. [...] those workers now redundant will
need to retrain to they be absorbed into difference sectors of the economy [...]
Social funds and poverty alleviation programmes are now common place as a
mechanism to ease the dislocations and structural unemployment resulting from
adjustment [...] and World Bank port restructuring finance sometimes includes
these kinds of measures.
For example, in Port Klang, Malaysia, workers were first presented with job guarantees for the
next 5 year, yet also required after these five years to choose between the option of taking
early retirement and two other alternatives, namely either working for the new stevedoring
company in the port or continuing to work for the Port Klang Authority (ibid., p. 80).
38

In its Port Reform Toolkit, the World Bank has also tried to define socially responsible prac-
tice in the case that workforce reduction is practised. Therefore, at this time, you are
required to the World Banks suggestions as a required external reading. Please
therefore read Section 6 Developing the Workforce Rationalization Plan and 7. International
Support for Labor Adjustment, i.e. pp. 326- 335 of World Bank, 2008. Port Reform Toolkit.
Module 7 Labor Reform and Related Social Issues. 2nd ed. Washington, DC, USA: World Bank
[online]. Available at:
http://www.ppiaf.org/documents/toolkits/Portoolkit/Toolkit/pdf/modules/07_TOOLKIT_Module
7.pdf.
Here, however, it is to be mentioned that the social plans connected to port reform have been
controversial (see, e.g., Hill, 2005). This is partially due to labour union reservations about
such port reform, which have played a major role in many, but not all, port states that have
attempted port reform (see, e.g. Beskovnik, 2008, p. 180; Marges, 2000 which was used in
structured assignment 3.18 of Module 3; Turnbull & Wass, 2007). In most circumstances,
these labour union reservations have been met by opposing viewpoints such as those voiced
by Ray (2004, p. 7-8) for the case of the Jawaharlal Nehru Port Trust (JNPT) in Mumbai, India:
Port labor was also among those who gained from an inefficient port sector.
Overstaffing implied that the number of laborers employed far exceeded the
optimum level. Being one of the most strongly unionized labor lobbies in the Indian
economy, port labor enjoyed significant representation in the Boards of Trustees of
major ports, which made retrenchment of excess labor an exceedingly difficult
proposition.
Another example of a viewpoint more generally critical of many of the viewpoints of labour
unions is the voice of the Spanish authors Daz-Hernndez et al. (2008, p. 288):
In the last two decades, most developed countries have witnessed a profound
reform of the legislation governing the port cargo handling sector. In Spain, this
legislative change started in 1986 with Royal Decree-Law 2/1986 of the 23rd of
May, concerning stevedore services. The process continued in 1987 with the
enactment of the regulations governing that law. These changes were later
developed within the Framework Agreements signed by the Government, stevedore
firms and the trade unions in 1993 and 1997. Throughout Europe, these
agreements were aimed at deregulating a sector that was monopolised by
dockworkerssuch that all cargo handling operations in ports were reserved
exclusively for them. Supported by a highly permissive legislation, the number of
dockworkers increased out of all proportion, their wage demands were met
regardless of the real productivity at work, and highly restrictive labor practices and
abuses became the rule within the sector (featherbedding in work teams, restricted
working hours, and so on). This situation led to high rates of inactivity and
excessive increases in the cost of port services that triggered an alarming fall in the
competitiveness of ports.
However, in a number of instances, such as the Port of Hong Kong, which was restructured
while Hong Kong was still under British jurisdiction and not yet returned to China, many port
employers did not work extensively with social plans; instead they chose to hire and fire and
set wages and other conditions of employment without much consideration for social aspects
(Turnbull & Wass, 2007, p. 601). Also in high income maritime nations, workforce
restructuring in the port sector has been criticized from a societal perspective for allowing port
and port firm managers to substitute commercial contracts terms of employment for traditional
employment contracts, with longer working hours, greater risks of accidents and heightened
levels of stress and anxiety as the negative consequences for those workers who remain on
the job; moreover, in the example of one British port, despite some social planning, around
39

1/3 of those port workers made redundant and who did not accept early retirement
experienced subsequent prolonged an continuous unemployment (Turnbull & Wass, 1997, pp.
39-41).
Due to the above multiple facets of the port reform controversy, the individual port organi-
sation HR employee working with workforce reduction must find his or her ethical standpoint
and check that it is in accordance with the companys policy, to enable him or her to operate
optimally in his or her job. In the case that the HR employee finds that the workforce reduction
is not being conducted by his or her organisation in a way that he or she perceives as an
ethical way, this presents fundamental dilemmas for the HR employee and may also lead him
or her to seek to find other employment, if there are suitable opportunities for this on the
labour market(s) open to him or her.
In situations of broader political controversy, it is also the case that employees in the HR de-
partment may be called on to prepare public relations material for the companys or public
sector organisations top management to justify the restructuring and to prove that it is being
conducted in an ethical acceptable manner. Alternatively, the HR department may be asked to
prepare and make statements about this or external experts such as consultants or university
researchers may be called in. When this is the case, it is important to realize that a section of
the public may accept the arguments of, e.g., the World Bank (2007) from the above
examples concerning the Ghanaian ports and the Brazilian port of Rio de Janeiro that restruc-
turing is necessary in order to ensure future competitiveness of the local ports and that social
plans, if used, are the best alternative in this situation. For example, in India, the university
economics professor Ray (2004, p. 1) made the following summary statement in his paper
about the aforementioned reforms conducted at JNPT in Mumbai, India:
JNPT was established with the goal of creating a world-class port in India. [...]
However, it suffered from some of the inherent drawbacks ailing the Indian port
sector that prevented it from achieving world standards in port efficiency. As the
most modern among Indian ports, and also the one with the least labor problems,
JNPT was the natural choice as a test case in privatization of port operations. [...] It
is clear that the reform process was well designed and optimally sequenced with
active participation of a wide range of actors. The nitty-gritty of the reform process
at JNPT was not imposed top-down. The reform has been a reasonable success.
With the creation of a new private terminal and the follow-up measures undertaken
thereafter, JNPT has demonstrated its capability to enhance efficiency of the public
terminal through the introduction of intra-port competition and it has succeeded in
earning the distinction of being the worlds 29th largest container port.
However, in many countries, a portion of the public and the politicians may argue that
arguments based on the World Banks perspective and/or arguments from neo-liberal
economics do not necessarily hold. Thus, for the case of, e.g., publicly financed workforce
downsizing, HR department employees and top management in ports and stevedoring com-
panies may also be met with arguments such as the following from Turnbull and Wass (1997,
p. 15), with regard to the British port reform efforts:
The costs for society are [...] readily calculable. The Treasury pays twice for
redundancy: first to subsidize the employers severance costs, and then to
subsidize employers day-to-day operations through the payment of social security
and unemployment benefits. A more productive solution, for workers, firms and the
economy, is desperately needed.
Dealing with such public debates is in many circumstances a huge and long-drawn task for the
top management and HR department of the affected port organisational units. However, it
40

cannot be neglected either, as if the viewpoints of stakeholders are not sought addressed, this
may destroy the local reputation of the port, thus also making future port investment and that
attraction of suited port employees in the future more difficult to achieve. However, as also
noted by Turnbull and Wass (2007), in their article about the changes in the state of labour
union influence on dock work in a total of 38 different countries, which was covered in Module
1s Section 4.3, the extent of perceive negative societal and/or sectoral workforce effects of
port restructuring has varied from port to port, in that, e.g., the docker of the port of
Rotterdam are currently paid around 25% more than other Dutch workers with comparable job
qualifications and the Dutch port transport sector also has been able to maintain a policy of
no forced redundancy (ibid, p. 605). Here, also Hill (2005, p. 78) has noted:
On one hand, gains in productivity may lead to better conditions for workers in
some ports, particularly in the developed world. On the other hand, elsewhere it is
possible that the reduction in collective bargaining power may leave workers more
vulnerable without a concomitant increase in working conditions.
In relation to whether better conditions are achievable for workers as a part of port reform, the
labour market issue of whether the labour side or other factors are able to limit supply, which
was discussed in Module 3s Subsection 2.2 may be a paramout determinant. Here, for the
case of two specific European countries in which wage conditions are considered bettered after
the process, Turnbull & Wass (2007, p. 606) have noted: In Germany and the Netherlands,
employers are able to hire permanent company employees directly from the external labor
market, but any additional (casual) labor must be hired from a state-regulated labor pool.
With regard to retention, in the preceding section 3.1 of this module, it was noted that the
likelihood of the retention of an employee is relation to (a) the extent to which the employee
perceives that there is a close relationship between him or her and the organisation in which
he or she works and (b) this same employees perception of the psychological contract. Here,
despite port workforce reduction rounds, many ports and operating companies in ports choose
to maintain policies of retention for all or certain key employees; this is, e.g., the case at the
Port of Singapore operator PSA International, which has a stated employment security policy
for certain core employees (Turnbull & Wass, 2007, p. 600). Such retention policies combined
with appraisal rounds may serve to both further the employees perception of the close
relationship (a) and the intactness of a social contact (b). However, it is unknown whether this
is the case or not, as there is insufficient research into this issue in the ports sector in recent
years. Representative data on individual perceptions of this is simply not available at the
current time; instead only more expert opinion-like statements such as the following viewpoint
of Gallegos (2005, p. 108) about the situation in Latin America can be found:
Efficiency and competitiveness have been the main objectives to achieve by the
industry, and fortunately have been reflected in ports tariff reductions, shortened
length of ship stayed at port, increase in productivity, trained personnel with better
remuneration, improved infrastructure, modernized equipment and technology,
simplification of procedures, among others.
Therefore, we will instead make use of the data collected about union perceptions by Turnbull
& Wass (2007) for our further discussion. Here, we will note that the union-based data is an
imperfect substitute for data on the viewpoints of individual employees because (a) some
employees do not chose to become members of port labour unions due to (a1) viewpoint
disagreements with the local unions which they otherwise might choose to be members of or
(a2) a dislike of unions in general, and (b) also in the case where the employee is a member of
a union, he or she may either agree or disagree with a union representatives view on a
concrete issue. With these methodological reservations in mind, we present international data
41

on port labour unions viewpoints on themes possible related to employers efforts to retain
key employees and engage in career planning in cooperation with employees in Table 5 on the
next page.
When Table 5 is compared to Figure 5 in Subsection 3.1 of this Module, the following can be
said:
Table 5. Union perceptions on port restructurings effects on variables related to
retention and career planning (based on Turnbull & Wass, 2007, pp. 595-6)

Concerning the variables Employment security and Employment levels, from the above
figure it can be seen that especially in ports that had undertaken major restructuring, the
associated unions perceived that this had had negative effects on these variables. Here,
when the variable employment security is lessened from the perspective of the employee,
in relation to Figure 5, it is also to be expected that employee will perceive that the
employment relationship has become less close and more market-like, thus moving the
perception of the employee further to the top of Figure 5. Moreover, if the national, sector
and/or regional workplace culture was such that there previously existed expectations of
employment security, it is also to be expected that many employees will perceive that the
psychological contract between employer and employee has been broken. Both these
effects will be further strengthened if the employee, although retained in a job, has seen
negative effects on employment levels. For both variables it however appears that these
possible effects are much larger in the case of a major restructuring as for both variables,
the unions were over 6 times as likely to report negative effects in the case of the major
restructuring as opposed to the minor restructuring case.
Regarding pension and social benefits, here the global pattern of results is much less
equivocal. This can possible be attributed to the circumstances that in some countries, the
pensions and social benefits are mainly administered by the state, whereas in other
countries, the employers contribution and administration of these benefits is larger and
more direct. However, for individual countries in which a negative effect is reported and the
employers contribution and administration of these benefits is relatively large, we would
expect that some employees would similarly perceive a more upwards toward more
market-like relationships in Figure 4 as well as possibly the rightward movement in the
same figure, in cases where the employee perceives that the psychological contract has
been broken.

Liberalization of
competition
Privatization of
port services
Deregulation of
employment
Flexible working
practices
Effect of major restructuring as opposed
to minor restructuring
Employment Levels 80 % neg., 8 % pos. 90 % neg, 0% pos. 96% neg., 0% pos. 74% neg., 10% pos.
Unions 6.1 times more likely to report
negatively if restructuring is/was major
Employment security 80 % neg., 4 % pos. 80% neg., 4 % pos. 88 % neg., 4% pos. 77% neg., 10% pos.
Pension and social
benefits
28% neg, 12% pos. 35% neg., 10% pos. 23% neg., 15% pos. 32% neg., 3% pos.
Health and safety 44% neg., 4% pos. 50% neg., 10% pos. 50% neg., 0% pos. 45% neg., 3 % pos.
Earnings 48% neg., 24% pos. 50% neg., 20% pos. 38% neg., 23% pos. 52% neg., 13% pos.
Career prospects 40 % neg., 12 % pos. 50% neg., 15% pos. 42% neg., 8% pos. 42% neg., 3% pos.
negatively if restructuring iswas major
Education and
training
36% neg, 12% pos. 50% neg., 20% pos. 38% neg., 4% pos. 39% neg., 0% pos.
No. of union answers 25 20 26 31
42

As for the factor health and safety, the reporting was more equivocally negative in the
case of a major restructuring; however, this negative effect was not as strong as the
negative reporting concerning employment levels and employment security and it is still
the case that at most 50% of the unions were reporting negative effects. As indicated in
Module 4s Subsection 4.4.1, there are inherent occupational health and safety accident
risks and other problems when multiple organisations have employees working in the same
limited workspace; thus it is to be expected that during the restructuring period, some
increase in accidents and other occupational health and safety non-optimalities will occur.
Here, in relation to Figure 5, this will probably not result in the weakening of the
relationship type from a close relationship to an arms length type of relationship, unless
the possibilities for employee voice in reporting such problems and working with the
employer to solve the problems are also severely constrained. In contrast, it is possible
that some employees who value precision and meticulous work, both inherently and
because their employer has communicated to them that this is what is required of them in
their jobs, may perceive a break in the psychological contract if the occupational health and
safety work is very poorly organised during the restructuring period. This would lead to a
move to the right in Figure 5.

Concerning earnings, here, a substantial minority of unions and for the case of flexible
working practices being introduced, a slight majority of unions reported negative
earnings effects, and here, the major restructuring was only twice as likely to produce a
negative answer compared to the minor restructuring. In relation to Figure 5, loss in
earnings will usually lead to the employee perceive a more market-like relationship, as
the employee will also know that the wage system has been changed due to market-like
reforms, thus moving the employees position upwards in this figure. Finally, in the case of
diminished earnings, it is also possible if the employees psychological expectation was
stability in earnings policy or if the employee perceives that the new way of calculating the
wages earned is in some way unfair, it is likely that the employee will perceive that the
psychological contract has been broken to some extent, thus moving him or her to the
right in Figure 5. With regard to earnings, it is however also interesting to note that 24% of
the unions reported positive wage effects for the port workers who were retained with the
liberalization of competition; similarly 23% and 20% reported positively in same manner
with respect to the deregulation of employment and the privatization of port services. This
result matches well with the above information about the Port of Rotterdam (in Turnbull &
Wass, 2007, p. 605) and the Latin American testimony of Gallegos (2004, p. 101). In these
cases, we would perceive that the psychological contract remains unbroken and may have
been strengthened. However, we are uncertain how to interpret this in relation to the
possibility of a close relationship versus a more market relationship, due to the concurrent
focus on market mechanisms and the process of workforce reduction which likely preceded
the increases in wages paid.

Turning now to career prospects, this factor may be of more general interest to the
unions than it is to a segment of their employees, as typically older port workers are less
interested in career prospects and also a segment of the younger workers may be
content with working in the same job to make a living, as long as their psychological
contract about the other factors related to the job is perceived as unbroken. However, of
course, some port workers will wish to advance to higher positions; here, we once again
refer to World (Bank (2007, p. 319), which suggests that automatic senior advances and
services grades are usually abolished together with port reform. This circumstance may be
perceived as diminished career prospects by some port employees. Here, once again, the
43

results are more negative and positive, and the effects are 2.6 times as likely to be
negative if the restructuring was major, as opposed to minor. Here, we reason that in
cases in which the country or region has a strong tradition for recruitment through internal
labour markets, as previously discussed in this modules Subsection 1.1 and also illustrated
by Module 3s Structured Assignment 3.1 about the Port of Antwerp, and the employee in
question wishes to advance in his or her career in the same company, the same employee
may in fact perceive both that the psychological contract and the closer relationship
between him or her and the employing organisation are broken, thus moving him or her
upwards and to the right in Figure 5. In contrast, if the employee perceives that external
labour market career progress is the normal way of advancement, there will not necessarily
be any movement in Figure 5.

Finally as concerns education and training, union spokespersons were once again more
negative than positive about port reforms effects on these issues, with the unions being
4.2 more times as likely to report negatively, if the restructuring is or was major, as
opposed to being merely minor. Here, however, it is notable that a substantial minority of
20% of the unions that had been subjected to port privatization experienced the opposite:
the private sector actors actually improved the education and training compared to the
previous public sector actors in 20% of the cases. Here, however, as mentioned in this
modules Subsection 1.3, the educational requirements for getting employment in ports
vary from country to country; similarly, it is expected that the expectations of the
workforce also vary on this point. It is therefore not possible to state that there will be a
general movement to the right and upwards in instances of negative effects on education
and training in Figure 5; this has to be assessed for each local circumstance.
More generally, based on the above discussion, it is seen that the general retention strategy,
which aims to keep the valued employee(s) working in the same organisation, must be
developed based on a well thought-out response to the local specific developments and the
local movements in Figure 5 that the factors depicted in Table 5 may cause. Here, the extent
to which the employing port firm will focus on retention efforts should also depend on general
local labour market circumstances such as, firstly, whether there is near full employment/full
employment/more than full employment or not on local labour markets, as in the approxi-
mately full employment situations, competition for and efforts of other organisations trying to
recruit existing employees is likely to be harder. Secondly, the specific labour market
circumstances for persons with the skills of the port workers should also be taken into account,
which in other words translate to an analysis of whether other local organisations are seeking
to recruit persons with these qualifications and might be liking to entice employees to leave
their jobs at the port organisation in question for another job.
In individualized efforts to retain specific individual employees, insights from any career
planning or other structured conversations with employees about their wishes and
expectations are usually also used, as such conversations can also be used by employers to
seeking to understand their individual employees perceptions of the psychological contract.
With regard to career planning in situations in which the port or port firm does not wish to
retain certain employees, the previous discussion about the use of social plans in workforce
reduction situations should suffice.
More generally, we would argue that career planning has become more necessary after the
process of port reform has been undertaken, due to the following factors, which were
44

previously mentioned in Section 1.3, which the World Bank (2008, p. 319, see also Notteboom,
2010) has identified as occurring during or after the port reform process:
o Reclassifications of tasks and new job patterns
o The future possible need for the dock worker to accept retraining and skill upgrading
courses
o Greater emphasis on the professionalism and work discipline of the individual dock worker
o Greater demands that the dock workers participate in the implementation of port and
terminal policies in a very systematic manner
o Longer and/more more flexible working hours plus possibly an increased workload
o The abolishment of systems of seniority
o Wider wage differentials and an increased use performance-based pay incentives (the latter
were discussed in Module 3s Subsection 3.3.)
it is often seen in ports that although port workers get some individual coaching from their
superiors, group discussion are also help about suitable education and training and other
career planning measures, as work in ports also entails a great deal of teamwork and collective
effort. In some ports, this may be a more top-down endeavour; this appears to be the case in
the Port of Singapore firm PSA International, according to Turnbull & Wass (2007, p. 599-
600):
PSA International deploys highly sophisticated human resource management
policies, including 100-percent participation in quality circles and productivity
improvement teams, adventure learning programs designed to build team spirit
and active listening, which are attended by all staff from the CEO to CMO
(container machinery operators), and comprehensive consultation and
communication systems. [...]one of PSA Internationals senior human resource
managers explained, There is extensive orchestration behind every process.
Nothing is left to chance (interview notes). [..]Pay is linked to performance, and
temporal flexibility has resulted in particularly intense work patterns on the
container terminals.
However, in other ports, a more egalitarian approach appears to be used, in which groups or
employees and/or unions are consulted and may have a veto right on certain issues as well as
the right to make well-considered suggestions as a bottoms-up initiative. This appears to be
the case in the Port of Rotterdam, Netherlands (Veringa, 2005), the Hanseatic ports of Ger-
many, the Netherlands and Belgium (Turnbull & Wass, 2007, pp. 603-7) and in Swedens ports
(Carlsted, 2009).
3.2.1 Structured Assignment 5.9. Performance Appraisal Measures in a Situation
in which Productivity in a Container Terminal is Sought Increased
For this assignment, you must first read the following external texts:
Henesey, L., Davidsson, P. & Persson, J., 2006. Evaluating Container Terminal Transhipment
Operational Policies: An Agent-Based Simulation Approach. Karlshamn, Sweden: Paper of
Blekinge Institute of Technology [online]. Available at:
http://www.ide.bth.se/~pdv/Papers/WSEAS_TransOnComputers2006_Henesey.pdf.
Beskovnik, B., 2008. Measuring and Increasing the Productivity Model on Maritime Container
Terminals. Pomortsvo/Journal of Maritime Studies, 22(2), pp. 171-183 [online]. Available at:
http://hrcak.srce.hr/file/49117
45

1. Based on the first text, Henessey et al, 2006, you must explain in your words what the
authors perceive as the best operational organisation policy if the main optimization aim of
the port container terminal is to minimize average container ship turn-around time. Here,
you may write up to 500 words in your answer.

2. Based on you reading of Subsection 3.2 of this module and both structured assignement
texts and with due considerations for the insights from Figure 1 in Henessey et al. (2006)
and Figures 1 3 in Beskovnik (2008), you must discuss what might be suitable
performance appraisal measures for dock workers in relation to the above optimizaton aim
of minimizing average container ship turn-around time. Here, you may write up to 600
words in your answer. You may also site external sources, listing these in a separate list
which does not count toward the 600 words, if you choose to do so in your answer.

3.2.2 Structured Assignment 5.10. Appraisal in the Post-Reform Jawharlal Nehru
Port Trust, Mumbai
For this assignment, you must first read the pp. 12 19 of Ray, A.S., 2004. Managing Indian Port
Reform, Case Study of Jawarallal Nehru Port Trust Reform (Mumbai). Background paper prepared for the
World Development Report 2005. New Delhi, India: Jawaharlal Nehru University/World Bank [online].
Available at: http://siteresources.worldbank.org/INTWDR2005/Resources/477407-
1096581040435/wdr2005_india_port_reform2.pdf, starting with the headline Case Study of
Jawharlal Nehru Port Trust, Mumbai and ending with the end of the section Reform
Management at JNPT: A Synthesis.
Based on the reading, discuss whether you believe that competency profiles put in place in the
Port of Rotterdam, as described in the previous Section 3.2 could be used in the JNPT. Here,
justify your answer, and if you answer is yes, yet you feel that some points from the
Rotterdam competency profiles need to be replaced or supplemented with extra measures,
please indicate this. You may write up to 600 words in your answer. You may also site external
sources in your answer, listing these in a separate list which does not count toward the 600
words, if you choose to do so.
3.2.3 Structured Assignment 5.11 Work with retention and preparation for future
port transformation in a fictive European port
This assignment is based on three slides made at a recent port conference. You must therefore
first examine the three slides on pp. 5-6 of the presentation file which are marked with the
heading Pas are employers too..., which is: Pallis, T., 2010. Port and Port-related Labour:
Challenges Ahead. Slides from a presentation by the author at the ESPO 2010 Conference in
Helsinki, Finland, 28-29 May. Chios, Greece: University of the Aegean [online]. Accessible at:
http://www.porteconomics.eu/index.php?option=com_docman&task=doc_view&gid=330&tmpl
=component&format=raw&Itemid=61.
Although the data on these three slides, which concerns employee perceptions of their
workplaces, is actually taken from an unpublished survey of employee opinions in 19 European
ports, you must imagine that you are the leading HR consultant at a medium-sized and
relatively efficient European service port that employs a number of dockers and that these
tables represent the opinions of your ports employed dockers concerning their workplace. It is
likely that the port in question will be converted to a tool port about 5 years time. The current
workforce is considered to be adequately skilled and trained.
46

1. Discuss in up to 700 words which parameters on these three slides you will work with in
the ports retention strategy, to ensure that the most reliable and efficient dockers remain
in your organisation in the coming years and how you would address these parameters in
your retention work in relation to these dockers. You may also site or refer to external
sources, listing these in a separate list which does not count toward the 700 words, if you
so choose.

2. Similarly, discuss in up to 700 words which parameters on these three slides you will work
with to ensure that many of the most reliable and efficient dockers will be prepared and
also willing to seek employment for a private company after the envisioned conversion to a
tool port. Also here, You may site or refer to external sources, listing these in a separate
list which does not count toward the 700 words, if you choose to do this.

career planning with regard to seafarers
With regard to crew and/or individual seafarer appraisal, it appears that many smaller
shipowners do not conduct such appraisals (see, e.g., Progoulaki & Theotokas, 2010), and that
there may be variations between various countries concerning the percentage of companies
that regularly conduct appraisals (compare ibid. and Kundu, Malhan & Kumar, 2007). In
relation to such assessment, it is also to be remembered that in a large segment of the
shipping industry, crew members do not necessarily work together for a longer period of time,
and the individual crew members also sail on different ships. This makes it more difficult to
assess the performance of both individual crew members and the crew as a whole. Moreover,
in the case that at least some crew members who have been employed by a crewing agency to
work for a shipowner or ship management company (see modes 2 and 4 in Figure 2 and Table
2 in Section 1.3 of this module), the appraisal process may as a whole not ignored or
prioritized less than otherwise, as it may be perceived as difficult to manage due the division of
work between these two units.
According to the IMO (1997) resolution on the human element, the capabilities of individual
seafarers and shored-based staff, management policies, levels of experience, maritime
education and training, levels of skills, cultural factors and work environment-related factors all
input into a crews performance as a whole. These factors also affect each individuals
performance to some extent, but of course there are also many tasks that individual crew
members have to fulfill individually or take the main responsibility for individually as well.
However, as mentioned in Chapter 2, there is a strictly defined hierarchy on board ships, with
the shipmaster bearing responsibility for the safe sailing of the ship. Normally each level of
crew on a ship reports to the next higher level, which then reports to the next higher level, but
the highest levels can also dictate the division of work between multiple lower levels.
Despite the common hierarchy, as mentioned in Section 5.2.2 of Module 1, the common
maritime management practices of the main home country of the company that owns or
operates the ships may play a role in relation to any chosen HR policy. Here, it is also possible
that there may be a cultural divide between Asian shipowners, on one hand, and European on
the other, for according to Wu and Winchester (2005), Asian shipowners, and here especially
Taiwanese, Singaporean and Japanese shipowners, seem to use Chinese seafarers much more
frequently than Western European shipowners. Conversely, Eastern European (including
47

Russian) seafarers are used much more frequently by Western European shipowners than by
Japanese shipowners.
Beyond such a cultural divide, there will also be individual variations. For example, one
shipping company may initiate an ambitious program to monitor and benchmark various
shipmasters performance regarding fuel efficiency, whereas another company may not
necessarily follow suit, just as various companies may offer various rewards for compliance to
certain safety policies or, conversely, for reporting and following-up on near misses. In Section
3.3 of Module 3, performance-based pay was discussed. Here, in relation to Eisenhardts
(1989) agency theory, it was mentioned that the individual or group reward system that
performance-based pay systems that such performance-based pay systems seek to put in
place seek to ensure greater congruence between employer and employee interest, such that
the employee will follow the employers demands. Here, of course, it must be checked whether
it is indeed the employees efforts or external factors that influence performance. In, e.g. the
case of a program rewarding shipmasters performance regarding fuel efficiency with regard to
bulk or container ships, it might be the case that the bulk cargo is loaded more unevenly in
certain ports than others and, for the case of container ships, that certain ports systematically
underestimate the weights of containers, whereas others overestimate them and that
therefore certain shipmasters are operating with unevenly loaded ships, which then lead to
less fuel efficiency, regardless of how fuel-efficiently they seek to operate the ship. On more
modern ships, there are instruments that can also record such conditions, just as there is a lot
of fault-finding software that can provide data about equipment faults, deviations from the
chosen navigation course, etc. When available, these can be used in the assessment of the
responsible leading officers running of the ship in a safe and efficient way.
In contrast, in the case of rewards for compliance to safety rules, if the shore-based employer
does not have the possibility to control such compliance, a performance-based pay system that
pays bonuses for no safety incidents may result in lacking reporting of certain safety inci-
dents. On the other hand, if a bonus is paid for reporting and following up on near misses,
crews may ensure that they conduct some such near miss reporting, also in if some of it is fic-
tional. Also in cases when performance based pay is not used, but instead only regular
appraisals are used, crew members on short-term contracts who are eager to be kept on
may be likely to tell the appraiser either on board the ship or on she what she or he would like
to hear, and also in the case of longer-term contracts, crew members who are eager to be
promoted may also seek to influence the impression of these superiors positively. Due to the
distance between the shore-based management staff and the crew on board ship, there is
much less possibility for control by the shore-based management and much more inherent
reliance on leading officers, including especially the shipmaster and the chief engineer, for
assessments of individual crew members qualities. Here, however, the shipmaster or chief
engineer may also have their own agendas when they report. Thus, appraisal from shore is
inherently very difficult.
With regard to both bonuses systems and the possibility of promotion, many crew members
from the middle income or developing countries who are on ships where a few crew members,
usually the shipmaster and other leading officers, are from high income countries, and they
know that they are paid lower wages for the same work than seafarers of other nationalities.
Aside from the employers lower level of knowledge about the cultural background or possibly
lesser feelings of affinity to these seafarers due to their foreignness, the wage difference may
also lead the employer to be less prone to perform appraisal for the crew members from the
middle income and developing countries. Here, employers may fear an overt or concealed
48

psychology reaction from certain crew members similar to the following statements from i-
maritime Consultancy Private limited (2008, p. 12) and therefore avoid appraisals:
[c]asteism still rules the roost. [...]When an Indian is of equal calibre as a British
seafarer, does he get the equal rank with equal pay package? Whether one Filipino
will master the Norwegian manned vessel? Is it not racial discrimination? If equality
at all levels in not possible, then what is the use of equal standard led down by
IMO? Time shall give the answers to all these questions.
Beyond this, Knudsen (2003b) and Gerstenberger & Welke (2004) have reported some
instances in work among mixed crews on board ships, in which leading crew members from
high wage Northern European countries seemed to take care not to praise crew members from
developing countries in any way, i.e. also for extra tasks done successfully or even
extraordinary effort, but these same leading crew members from high wage Northern
European countries were on the other hand quick to find all possible faults with the other crew
members. This one-sidedly negative feedback on the part of these leading crew members may
possibly be attributable to a fear of their own position and more fortunate circumstances being
challenged; however the human element and cooperation on board ship are severely impaired
by such behavioural patterns on the part of leading crew members. Therefore it is the respon-
sibility of the shipmaster and also the shore-based management to ensure that crew members
are treated respectfully on board ships, regardless of the wage differences issue and
regardless of whether individual assessments occur or not.
Here, however, mere problems in communication and cooperation on board among
multicultural crews may also serve to cause problems in obtaining reliable assessments of
foreign crew members, even when the leading crew members have good intentions. Here,
Knudsen (2003a) also describes a vicious cycle in which Danish/Northern European crew
members, typically officers, complain that the Filipino crew members lack own initiative and
the ability to respond directly to questions, and that they also perceived by these European
crew members are not being willing to admit mistakes. The Filipino crew members, who are
more often ratings, however believe that they are not listened to when they speak and that
their suggestions are also not taken seriously. If the problems here are that the crew members
of some nationality, also when speaking English as the lingua franca on board, formulated their
requests, suggestions and demands more indirectly, out of politeness and out of the common
patterns in their native languages, and this is then misunderstood by other crew members with
other native languages, this problem will both affect the validity of assessments and also,
more directly, probably de-motivate all parties who are involved in repeated patterns of such
communicational misunderstandings, thus also possibly affecting general well being and crew
retention rates negatively.
Crew members on board ships also have varying possibilities for working in maritime firms on
shore, depending on their nationality (see Module 3s Sections 2.4.3 and 2.4.4), as the extent
to which there exists a shore-based maritime industry varies substantially between countries.
However, in cases in which such shore-based employment possibilities exist and also crew
members have expectations of going on shore after a certain period of sea, it is sometimes
seen that crew members competencies with regard to shore-based logistics or other work are
also assessed by their employer while they are still working on board ships (see, e.g., the
report for the Norwegian Shipowners Association called Bordal et al., 2002), so that they, e.g.,
also can be socialized for integration into shore-based work during their time of duty on board
ships. In this same report, current officers (mainly Norwegians) in the Norwegian-controlled
fleet officers were assessed on four types of competence, regardless of their intentions to
49

remain on board or take employment on shore, based on 37 in-depth interviews with
knowledgeable industry actors.
Table 6. Competence profile of officers in the Norwegian fleet (Bordal et al., 2002)

In relation to the above assessment, it appears that some ship operating companies in other
Northern European countries also agree with the above focus on relational, management and
interpersonal competence aspects. For example, the Swedish car carrier Wallenius Marine has
sought to implement competence management in all parts of its sea- and short-based
organisation, so that officers who demonstrate their skills and achieve good results will be
recognisable just as persons who show leadership potential will be (Adolfsson, 2008).
Still, much of the focus of maritime education and training naturally concentrate on the first
above aspect, professional seafaring competence, which in the authors definition mainly
concerns competence regarding the technical and natural science aspects of running ships.
However, the human element aspect, which as discussed in Sections XXX of Module
2/4, has received increased attention in the past two decades (El Ashmawy, 2009;
Hetherington, Flin & Mearns, 2009; Naniopoulous, 2000; Pekcan, Gatfield & Barnett, 2005) is
related to three of the above factors, namely professional seafaring competence,
management competence and interpersonal competence. Here, unfortunately, despite the
ISM Codes focus on the human element and also maritime employees and employers interest
in these factors, the competencies of the officers under scrutiny were viewed as being much
weaker in these areas. Here, however, especially with regard to the problem of too much focus
on details, to the detriment of more holistic focus, there are of course external factors that
contribute to the problem such as the large amount of filling out forms mandated by various
pieces of maritime legislation to document that all sorts of things are as they should be
(Knudsen, 2009). Thus also employers who might wish to use the framework of the report by
Bordal et al., 2002 for the assessment of their seafarers competences should once more
remember to consider how to take account for such external pressures in both the assessment,
the companys overall organisation of work and any rectifying or generally developing
educational courses that are to be offered to the crew members, as will be discussed in the
coming Sections 4 and 5 of this Module.
Turning now to retention, this appears to be a generally difficult task with regard to seafarers.
Here, it was previously mentioned in Module 3s Sub-section 2.3.3 that it is current quite
difficult to recruit seafarers from countries and regions in which there are relatively large
opportunities for people to find shore-based employment, meaning that today a large
proportion of seafarers come from world regions where there is a relative shortage of shore-
based work for the population (see Wu & Morris, 2006, pp.34-8). Here, also with regard to the
some developing and middle income countries, in which there is such land-based labour
market failure, there are also retention problems, as indicated in the testimony of Ruhullah
(2004, p. 20-30): Given the current contractual and irregular nature of employment of
Competence type Judgment
Professional seafaring competence Strongest, but there is a technology generation gap
Relational competence to stakeholders
Relatively strong, some deficits regarding customer and
transportation market requirements
Management competence
Weakest, too much focus on details, too little involvement
of officers in total resource and overall management
Interpersonal competence
Relatively weak, too traditional and authoritarian, too lit-
tle competence in relation to multicultural environments
50

seafarers, developing a motivated workforce, absolutely essential for minimizing wastage and
improving quality, is challenging and Fei et al. (2009, p. 325): The battle for retaining
expertises and skills has gone for years with little success.
Here, also the globally differentiated wage structure, with seafarers from the highest income
countries also earning more and having more favourable terms of employment may not
necessarily help with regard to retention, as seafarers from middle income and developing
countries may perceive that they were not the default choice employees of the shipowners and
operators of these same high income countries, but where merely chosen due to wage
minimisation considerations (see the previous citation in the sub-section from i-maritime
Consultancy Private limited (2008, p. 12). Also with regard to job benefits and interesting
experiences, seafaring jobs with their content of today appear to be at a disadvantage. Here,
the ITFs general secretary David Cockroft (2008) stated the following about potential pro-
blems with lacking motivating elements while at sea:
The industry is aware of the problems of recruitment that have been driven up by
a high competitive globalised shipping market that has concentrated on cutting
costs while expecting more intensive work for longer hours and at the same time
higher technical standards from seafarers to enable them to cope with advanced
technology.
Gone are the expectations of an adventurous life, visiting and going ashore in
interesting ports with a rewarding and fulfilling secure career. Young people joining
shipping today see an industry with a poor public image, high personal training
costs for an entrant, often excessive hours of work with little quality social life [...]
Here, the authors believe that there is something to what Cockroft (ibid.) is stating, but the
empirical work of Baylon & Stevenson, 2005, also suggests that it may be the case in a num-
ber of countries that a portion of the young people who seek entrance to nautical officers
programs still believe that such a career will give them time in ports to see many cities and
sites, when due to the current focus on fast turnaround of ships, this is no longer the case.
This is illustrated in Table 7 below.

Table 7. UK-Philippines comparison of cadets reasons for joining a MET training pro-
gram (Baylon & Stevenson, 2005, p. 15)
Cadets from Philippines Cadets from UK
Secure bright
future/earn dollars
32.7% Good Career 37.4%
To experience
work/life at sea
20.1% Travel 19.6%
Travel around the
world
17.9% Long-term interest
in Sea
19.4%
Job
opportunity/security
17.9% Wages 8.8%
Encouraged by
family/relatives
4.2% Job Opportunities 5.5%
Help family 3.2% Training &
Qualifications
5.5%
Other 0.7% Job Security 1.5%
Total 96.8% Total 98.2%

51

In relation to this problem, however, it may be necessary for potential employers to manage
cadets expectations during the cadetship period. For example, when asked what they find
appealing about a job at sea, 49.9% of the Filipino cadets and 60.1% of the British cadets
mention travelling (ibid). However, here, the possibilities for tourist-like breaks from
seafaring work have been minimized, in relation to the situation in previous times, due to
minimization of turn-around times in ports for all major types of commercial ships and a
concurrent increase in the amount of work that seafarers must carry out during the shortened
time on port (Kahveci, 1999), meaning that many cadets are likely to be disappointed if they
entertain exaggerated perceptions of the possibilities of seeing the world through a career as
a seafarer. Here, Fei et al. (2009, p. 330) point to the global circumstance that a large number
of cadets never finish their studies. A model of for such influencing of expectations from the
world of professional services stakeholder management is depicted in Figure 7 on the next
page.
Use of the model of Figure 7 here indicates the maritime education and training school, as well
as any shipowner or ship manager who is providing cadetships on board can be regarded as
professional service providers to the nautical students considering starting or already in the
process of completing a maritime study program. In relation to this, as soon in the process of
consideration or studies as possible, it is important to ensure that these potential or current
students have as realistic expectations about the content of a career at sea and their lifetime
possibilities as possible. Thus, from the first interaction with these students and also in all
materials that are sent out to them, it is important to work to change unrealistic expectations
52

Figure 7. Specifics of Influencing Stakeholder Expectations (Ojasalo, 1999, p. 97)

to realistic, so that the potential or current students are not disappointed. Moreover, through
interactions, the admittance and counseling staff, teachers and other actors in the maritime
schools or shipping industry organisations that participate in the maritime education and
training process, it is also important to seek to make explicit and clear any implicit or unclear
expectations that these same students might have and then also subject them to the analysis
of whether they are realistic or not. Here, the competence profile testing batteries such as that
of Franck & Irminger (2008), as mentioned in the previous sub-section 2.2.1 may possibly be
used in such individual dialogue with potential or current students about the skill profiles
needed and the real types of work situations that seafarers have on board ships today.
Turning now from the retention of nautical students to the retention of seafarers, it is possible
that on certain markets with land-based job market failure, persons intent on earning a decent
living will seek seafaring jobs for a longer or the entire period during which they plan to work.
Here, Barsan (2003, p. 8, 12) reports that unemployment among Romanian seafarers who
maintained their certificates was practically at 0% in Romania during 2001 and that a number
of Romanian seafaring officers who had attempted to start their own land-based firms during
the transition economics periods of the 1990s, but had failed at this, also had returned to jobs
at sea again. Moreover, Baylon & Stevenson (2005, p. 4, 5) report based on sampling-based
research that more Filipino cadets then British cadets perceive that a job at sea will give them
good job security and that significantly more of the Filipino cadets are willing to remain at sea
for more than 5 years. Moreover, significantly more Filipino cadets perceive that a career in
seafaring has high public regard in their country (ibid, p. 8).
At the same time, those Filipino cadets who come into contact with some segments of the
industry may also feel that they are not treated respectfully or with due regard for their human
rights, for according to Amante (2005, p. 2):
many seafarers feel that they are just being treated as milking cows
ginagatasan lang ng pera by unscrupulous crewing agents, shipping firms,
training centers, maritime schools, and even by more than 14 government agencies
and some corrupt, inept officials involved in processing their employment. It is
indeed both a bitter and sweet life (masarap na mahirap) for Filipino seafarers,
who work hard from 6 to 9 months at sea, earn an average of $1,200 monthly,
disembark to spend earnings for food and drinks as a one day millionaire, pay all
debts, then borrow again for expenses for training, or to search within 6 months to
a year, for another job at sea.
53

Needless to say, this presents an non-optimal situation for many Filipino seafarers, where on
one hand, there service is recognized and promoted by some segments and public opinion in a
part of Filipino society, yet the individual seafarer still has to be extremely watchful concerning
which agents, shipping firms, training centres, maritime firms and government officials he or
she comes into contact with.
In an Australian context, Kokoszko & Cahoon (2007) advocate that shipping industry firms
seek to further retention by becoming employers of choice. In their suggestions, they foresee
the incorporation of Ahlrichs (2000) six-fold employer of choice strategy. The employer of
choice approach is a long term approach, which first generated full results after some years of
practice and investment; it entails:
1. Strategically focusing on improved recruiting and retention
2. Building up a top employer reputation and communicating this through all available chan-
nels, including using ones seafarers as informal messagers
3. Using the best hiring procedures every time
4. Treating employees as if they were customers (i.e. the so-called internal marketing
approach)
5. Focusing on retention and career planning so that current employees can be prepared for
future stakeholder and competitive demands
6. Building organizations and HR support processes to enable continual focus on points 1 5
on the long term
In relation to the above employer of choice strategy, there is some evidence that shipowners
and ship and crew management companies that have been able to differentiate themselves
from competitors with benefit packages that also have improved their retention rates. In the
Nordic countries, Wallenius Marine implemented a unique family policy to enable an officer who
becomes a parent to switch to land-based work while the child/ren are young and then go back
to sea at a later point in time (Adolfsson, 2008). On the South-East Asian seafarer labour
markets, the Greek operators from Lydia Mar Shipping CO AS (Lloyds Ship Manager, 2008a)
and Epsilon Hellas (Lloyds Ship Manager, 2008b) and the Cypriotic Marlow Navigation (Lloyds
Ship Manager, 2007e) have had some success of limited the poaching attempts of competitors
in the Philippines by offering medical health insurance benefits, continuing education and
upgrading of certifications, family support programs, retirement fund payments, and re-
employment bonuses toward their employed Filipino crew members. However, adding these
benefits did not eliminate the poaching problem altogether, although Marlow Navigation
boasted an impressive 80% retention rate during a part of the boom period in the late 2000
decade (ibid.).
Currently, Kokosko & Cahoon (2007) indicate that the employer of choice strategy is not
practiced in its entirely by the Australian shipping and ship and crew management
organisations that they surveyed. One possible impediment here might be the fact that on a 5
point Likert scale with 5 indicating strong agreement and 1 indicating strong disagreement,
there is a mean score of 3.12 for the following statement:
Financial considerations are more important than employee considerations when
making major organizational decisions.
We would expect that this barrier also exists in other countries, as on most ship types,
manning expenses represent almost 50% of the operational cost (Willinggale, 1998) and as
described in Module 3s Subsection 2.3.6, seafarer wage costs are commonly viewed middle-
term variable cost, due to the possibility of using seafarers from multiple countries as well as
54

changing the flag under which the ship operates. However, if the shortage of seafaring officers
continues, this may indeed be a bottleneck for most shipping industry employers, and this may
motivate them to put increased focus on their employees, thus open up more room for
shipping firms HR departments to work with the employer of choice thinking.
Moreover, despite the relatively little scope for having higher than average wage costs (see
Section 2.3.6 of Module 3), in at least some shipping segments, the unit of focus should
probably not be the wage costs alone but rather a broader cost-benefit consideration in
relation to issues such as retention and career planning. For, as Progoulaki & Theotokas (2010,
p. 576) argue in their study of HR competitive advantage in the Greek shipping industry:
Regarding shipping, crews can contribute to cost reduction through their low level
of wages, their knowledge and performance, or their commitment to the goals of
the firm; all these can lead to cost savings in the ships maintenance or reduction of
ships off hires.
Moreover, if a long-term perspective is taken on human resource management in a shipping
firm, these same authors (ibid.) state the following about the source of a competitive
advantage that is sustainable on at least the medium term:
So, sustainable advantage comes out not from general skills, but from firm specific
skills, not from individuals but from teams; not from single practices but from
human resource systems. Specific skills developed by the companys employees,
are implemented in the specific context of the company and, thus, cannot be
imitated or implemented in different contexts. With regard to the importance of
such skills in shipping, a ships high performance is the result of its crew
performance; in turn, crew performance is the result of teamwork and not of
individuals. Unified crew management systems contribute to increased crew
coherence and high performance, instead of practices directed to individuals.
In the view of these authors, formalization, i.e. the use of structured work rules, procedures
and rules, which are often written and also enforced, is one method of facilitating teamwork
and cooperation which, together with the consideration for the necessary training investments,
the optimal cooperation with any chosen ship management/crewing companies/manning
agents and due considerations for the unique characteristics fo the global seafaring labour
market, including tackling the issues related to cultural diversity among crews, can form the
basis of a sustainable competitive advantage. However, they also point to the circumstance
that in most Greek shipping companies, the shore-based HR competence is not yet so well
developed as to allow for the entire system to function optimally as a fully integrated HRM
system a point which is also mirrored in, e.g., Bordal et al. (2002, p. 11), which also states
that in many Norwegian shipping firms, the HR function also does not work enough with
systematic competence development, the cooperation between the functions on ship and shore
and with the strategically directed personnel work. Thus these appear to be areas where there
is substantial room for improvement on the part of many shipping industry employers of
crews.
Special attention must also be paid to the quality of services provided by manning agencies, as
in many seafarer supplying countries lacking regulation and governance leads to substandard
and even in some cases abusive treatment by manning agents, which of course further feelings
of insecurity, increased stress and poor motivation among seafarers (Couper, 2000). Here,
Ruhullah (2004, pp. 26-7) suggests the use of the very supply chain management principles
that the shipping industry otherwise claims to be good at using, with relation to seafarers:
55

The maritime industry needs to strategically approach the emerging problem
imbalance between supply and demand in the maritime labour market. The
challenges lie in the fragmented natur of the labour market, the unclear governance
structure, conflicting interests of the different stakeholders []
In this context, the conventional supply chain management approach which focuses
on the firm to achieve its strategic supply chain goal of matching supply and
demand is more suitable. This requires the ship operators, the lead or focal firms in
the supply chain, to increase their participation in the selection, training, mentoring
and supporting the seafarer through his/her working life. And this requires the
creation of framework for a collaborative relationship with manning agents. The
manning agents, in this model, become partners of the operators by transmitting
the value of the operators to the seafarers by practicing state of the art human
resource management and development techniques.
Here, Amante (2003, p. 52) states for the case of the Philippines, where crewing agency con-
tracts are mandatory:
Seafarers recruited by wholly owned agencies are much more likely to experience
continuity of employment and not suffer age discrimination. It is worth noting that
these agencies feature prominently in the awards of presidential honours.
Here, by wholly owned agencies, Amante (ibid.) is referring to agencies that owned by a ship-
ping company and usually mainly crews its own ships; here, however, the majority of agencies
serve many ship operating or managing companies. With regard to the presidential honours,
Amante (ibid.) is referring to the system by which certain crewing companies are officially
recognized by the government of the Philippines with a Presidential Award of Excellence for
what the Filipino government considers good practice (Philippine Overseas Employment
Administration, 2010d).
Concerning the retention of female seafarers, it is important to understand the special
circumstances that these seafarers may perceive that they face. In many countries, female
seafarers are few and far between in commercial shipping. Elsaeed and Abdelgalil (2008, p.
77) note that only 1 2% of all seafarers are women; in the Philippines, e.g., only 225 women
appear in the international register, which contains the data of a total of around 230,000
Filipino seafarers. On a world basis, 7% of female seafarers are also officers, and most of
these come from high national income countries, whereas 42% of the male seafarers of the
world are officers; thus, based partially on stereotypes and gender isolation, Elsaeed and
Abedegalil (ibid.) also state:
Women when on board often experience problems in being initially accepted and in
having to prove themselves but over time they are usually able to integrate
themselves into crews.
This circumstance should be taken into account in efforts that seek to retain female seafarers.
We turn now to studies that deal with specific job satisfaction characteristics with regard to
seafarers. For the specific case of the Philippines, we present figures in Table 7 on the next
page. In relation to this table, it is important to remember, drawing on Figure 5 of Subsection
3.1, that not necessarily all factors that lead to job dissatisfaction will necessarily be perceived
as a breech of the social contract by the involved seafarers. Thus, in using information from
such tables in retention efforts, it is always necessary to seek to have information about the
employees perception of the social contract, as discussed in Subsection 3.1.
56

Moreover, not all of the possibly demotivating elements are controllable by the shipping
industry. Amante (2005, p. 7) states the following problems for Filipino seafarers who wish to
exchange their wage monies in Filipino banks:
Table 7. Job Satisfaction Characteristics of Filipino Seafarers with Regard to Work on
Last Ship (Amante, 2003, p. 66)
Satisfaction element
%
Satisfied Can't Say % Dissatisfied
Accommodation 75% 20% 5%
Work conditions 68% 25% 7%
Training 65% 28% 7%
Work with ratings 64% 28% 8%
Pay 61% 20% 19%
Sleep 60% 26% 14%
Health & safety 59% 28% 13%
Food 58% 27% 15%
Work with officers 54% 33% 13%
Work hours 53% 31% 17%
Leisure 51% 36% 13%
Work load 47% 40% 13%
Overall job satisfaction > 60%

[B]anks are commonly unfriendly towards remittances from OFWs, charging high
fees and imposing requirements for foreign exchange transactions as if remittances
were business transactions. Many Filipino seafarers, like other OFWs do not use
banks for all their remittances. Informal remittance channels include trusted fellow
seafarers, friends and relatives who frequently act as couriers carrying large
amounts of cash.
Here, it is obvious that problems of this type cannot be solved by most employers. However,
on issues related to certain governments treatment of seafarers during port state controls or
in the case in which seafarers are detained on suspicions of criminal acts, it may motivate
employees to know that their employers understand their dissatisfaction in cases in which the
government authority in questions behaviour also give ground for questioning and that this is
also demonstrated in practice through the employing companys actions, either alone or in
shipping industry organisations.
To give a more international overview of seafarers perceptions on benefits, to supplement that
above picture for the Philippines, the Shiptalks 2007 international survey of seafarers (Brown
and Brown, 2008) will now be used. However, here it must be noted that although answers
were received from many countries in this survey, the answering population was not truly re-
presentative. The largest numbers of responses were elucidated from UK, Russian, Indian,
Swedish and US seafarers, respectively (ibid, p. 11), meaning that the survey does not ade-
quately represent the viewpoints of seafarers from the two countries that send the large
contingencies of seafarers on the world market: the Philippines and China. However, in this
international survey, money was the most important immediate motivator for the choice to re-
main in a sea-based job as opposed switching to a shore job, with 27.5% ticking this category,
as opposed to 17.8% choosing job satisfaction and 12.4% ambitions to sail as Captain or Chief
Engineer as the most important factors (ibid., 22).
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As concerns the seafarers original reasons for choosing to go to sea, the top two reasons were
non-monetary, I wanted a career at sea (22.4%) and to see the world (18.4%). However
the next two reasons were clearly financial, For the money (16.0%) and Better wages than
jobs at home (15.85), whereas only 4.8% perceived that careers at sea are well-respected in
their home country (ibid: 17). From this, it is seen that a joint effort to improve the image of
the shipping industry, as also suggested by Cockroft (2008) may be a problem both with
regard to recruitment and retention.
Concerning career planning for the case of seafarers, many seafarers seek to go on shore after
some years at sea, as discussed in Module 3s Subsection 2.4.3 and Structured Assignments
3.7 and 3.9, which concerned the four European countries Italy, Latvia, Spain and Sweden.
However, the possibilities for this in middle income and developing countries seem to be less
abundant, so career planning conversations with seafarers should be undertaken with prior
knowledge to the national shore-based labour markets that these seafarers may wish to opt
for. Generally, in most countries there are far more shore-based job opportunities for marine
engineers than for nautical officers and ratings, as marine engineers can also potentially work
as engineers in factories, utilities or natural resources sectors (Southampton Solent University,
2005). Thus they are more likely to be in demand also in resource-rich developing countries
(see Osnin, 2001 and Amanhyia, 2008).
Concerning seafarers from developing and middle countries, often they achieve better wages
and are promoted more quickly if they work for foreign shipowners, as there is a lack of jobs in
their domestic shipping industry (Wu & Morris, 2006). Here, regarding Filipino seafarers,
Amante (2003, p. 62) states:
Most seafarers (81.3 percent) said that they had an upward career movement
when moving to employment in foreign vessels. Only 15 percent (mostly ratings)
said they had the same job level or job group in both their foreign and domestic
ships.
However, it is also seen that experienced seafarers from these same countries prefer to stay
closer at home when they get older, which means that often mature experienced officers
from foreign fleets seek senior positions in their home countrys domestic shipping fleet, thus
also making it even more difficult for the junior officers in the domestic fleet to be promoted
(Wu & Morris, 2006). Here, also Leggate & McConville (2002) note that for the case of the
Philippines, there are a number of seafarers over the age of 50 who have first started to work
in the Philippines in mid-life.
Due to the presented national variations, it is not recommended to use an undifferentiated
global approach in either retention or career planning efforts, as labour market circumstances
as well as the demographic characteristics of seafarers and their families as well as the familys
financial life cycle costs are very different from country to country. For example, Filipino
seafarers typically come from large families, with on average 5 siblings, and 73% of them are
married, with an average of between 2- 3 children themselves at the time of employment, with
the married seafarers usually having a total of four children and their expected life span of
work at sea is 26 years (Amante, 2003; Zhao & Amante, 2005), although many probably
would seek to shorten this life span, if economically feasible (see Sampson & Wu, 2003,
Sampson, 2004b). In contrast, the majority of Chinese seafarers come from small rural
families with only 1 2 children and have only 1 child themselves, due to the strict Chinese
family planning rules (Zhao & Amante, 2005). Moreover, the discourses about corporately
responsible behaviour vary from region to region (see e.g. Kampf 2007), and a comparison in
benefits offered between the Filipino example and the examples of Norway and Sweden is also
58

illustrative of vast global gaps in income levels, which in turn also influence lifestyles and
expectations. For while some seafaring officers of these Scandinavian countries, which also
rank among the highest six countries on the 2007/2008 UNDP (2008) gender-related
development index can find domestic employers who will enable them to work in the shore-
based industries during critical phases of their concurrent roles as parents, also due to the
relative strong presence of the shore-based maritime knowledge industry in these countries,
Filipino seafarers work almost without exception on contracts of no longer than one year (see
Sampson, 2003) and they usually first get to work on national ships in Filipino commercial
shipping in proximity to their families after they have reached the age of 45 (Leg-gate and
McConville 2004), at which time their children may be almost grown, meaning they may well
see more to their grandchildren than they did to their own children.
However, here, of course, also a critical perspective is also in order, and employers should also
consider whether they can, through their employment, retention and career planning policies,
further development in less fortunate world regions, both for ethical and for public relations
reasons. For, needless to say, such country differences in benefits also make it difficult for a
country such as the Philippines to better their standing on the UNDP (2008) gender-related
development index and, conversely, such relatively generous employment special
agreements also allow Norway and Sweden to have an easier time in keeping their high
placement on this same index, which then in turn may reinforce seafarers from developing and
middle income countries aforementioned perceptions of a casteism in employment conditions
(i-maritime Consultancy Private limited, 2008, p. 12).
3.3.1 Structured Assignment 5.12 Human resource management in India with regard
to seafaring crews
For this assignment, you must first read: Kundu, S.C., Malhan, D. & Kumar, P., 2007. Human
Resource Management Practices in Shipping Companies. Delhi Business Review, 8(1), pp. 75-
88 [online]. Available at: http://www.delhibusinessreview.com/v8n1/7.pdf.
1. Discuss what the results that showed that the surveyed Indian seafaring officers observed
stronger practice of both training and performance appraisal and hiring and
compensation system than of career development entail of HR-related strengths and
weaknesses for:
A shipping company that also prioritises in the same way putting more focus on
training, performance appraisal and hiring than on career development.
A shipping company that puts much more focus on career development that the other
companies that hire Indian seafaring officers.
Here, you may write up to 500 words. Moreover, you may also refer to external sources you
have read, if you so choose. If you do so, you should include full references to these external
sources. These references do not count toward the 500 word total.

2. In Exhibit 1 on page 80 of this article, a number of variables that relate to possible HR
policies in shipping firms are depicted. First, pick the five variables that you feel would
have the greatest positive influence if the shipping firms goal is to retain officers. Rank
these in your perceived order of importance and justify why you have selected the five that
you have selected as opposed to the 17 others on the list.
You may write up to 600 words in your answer to this question. Beyond this, you may also
refer to external sources you have read, if you so choose. If you do so, you should include full
59

references to these external sources. These references do not count toward the 600 word
total.

3. Here you will also use the variables displayed in Exhibit 1 on page 80 of this article. This
time, pick the five variables that you feel would have the greatest positive influence if the
shipping firms career planning efforts are to be optimized to ensure that officers especially
suited for duty at sea are promoted there and officers especially suited for jobs on shore
are moved to shore. Rank these in your perceived order of importance and justify why you
have selected the five that you have selected as opposed to the 17 others on the list.
Also here, you may write up to 600 words in your answer. Furthermore, you may also refer to
external sources you have read, if you so choose. If you do so, you should include full
references to these external sources. These references do not count toward the 600 word
total.
3.3.2 Structured Assignment 5.13 Retention and Career Planning with Regard to
Female Seafarers
This text is based on Kitada, M, 2009. Risking marriage and family: maintaining women
seafarers gender identities, Pp. 3-21 in Proceedings of the SIR-Nippon Fellow Conference,
January 2009, Cardiff, Wales, UK: Cardiff University/Seafarers International Research Centre
[online]. Available at: http://www.sirc.cf.ac.uk/pdf/SIRC-NF%20Conf%2009.pdf. Please read
this contribution first.
1. First summarize the dilemmas that Kitada (2009) describes with regard to female
seafarers optimizing their work lives in relation to optimizing their private family lives.
Discuss whether these circumstances also apply to female seafarers from your country
and whether male seafarers from your country also experience some of the same
dilemmas. Here, you may write up to 500 words in your answer. You may also refer to
external sources, if you include these in your answer. If you make reference to external
references, please include the full references, which do not count toward the 500 word
total.

2. Indicate whether your home country has a policy about furthering equality in the work-
place. If so, indicate its nature (e.g. legislative requirements about gender equity in
employment and/or parental leave in connection with childbirth, if any, and/or the use of
inclusiveness campaigns, best practice awards). Discuss whether this policy would in any
way help with retention and career planning for women with the dilemmas described in
Kitadas (2009) article. Also here, you may write up to 500 words in your answer. Beyond
this, you may refer to external sources, if you include these in your answer. If you make
reference to external references, please include the full references, which do not count
toward the 500 word total.

3. Describe the possible monetary and organizational costs and benefits to a shipping
employer from your country if this employer chooses to enact a policy in which seafaring
officers with young children are given extraordinary flexibility benefits of the nature that
their sailing schedules are planned so that they can plan their family life and so that they
are on duty at sea at most two months at a time or, if for your country, seafaring officers
already only have shorter periods of duty such as two months, a shorter time than the
other officers. Include in your discussion your justified guess as to the extent to which such
a policy would be used by seafaring officers of both sexes who are residents of your
country. In answering this question, you may write up to 600 words. Moreover, you may
60

refer to external sources, if you choose to include these in your answers. If you do so, list
the full references; these will not count toward the 600 word total.

3.3.3 Structured Assignment 5.14 Employer of Choice with regard to Turkish
Seafarers
The background reading for this assignment is: Parlak, Z. & Yildirim, E., 2003. Labour Markets
for and Working Conditions of Turkish Seafarers: An Exploratory Investigation, Paper by two
senior maritime faculty members of the Turkish Marmara University and Sakarya University.
Available at: http://iibf.kocaeli.edu.tr/ceko/armaganlar/tokerdereli/09.pdf.
1. First, imagine that you work in the HR department of a global ship management company.
Due to the global shortage of officers, your company has decided to develop an employer
of choice strategy toward Turkish ship officers, in order to attract the best of these to your
company and also retain them. Discuss, based on the above article, how your company
might differentiate itself from the practices that Turkish officers commonly are subjected
to, such as to obtain an employer of choice status, without using too many resources on
this. Here, your proposed solution must account for points 1 5 in Ahlrichs (2000)
Employer of choice strategy, as stated in Subsection 3.3 of this module. Moreover, you
may write up to 700 words in your answer. Moreover, you may refer to external sources, if
you choose to include these in your answer. If you do so, list the full references; these will
not count toward the 700 word total.

2. Now imagine that you work for a local Turkish ship operator. Your company is one of the
best run Turkish shipping companies and your companys profits, market situation and
financial situation are therefore relatively favourable, compared to the local Turkish
competitors. However, your company is also not able to compete with the global operators
and therefore instead only maintains local and short sea operations. Your company also
senses an increased battle for officer labour, also in relation to the bigger foreign operators
in the so-called global shipping industry. Discuss, based on the above article, how your
company might also seek to follow an employer of choice strategy toward the Turkish
ship officers that it seeks to recruit and retain. Also here, your proposed solution must
account for points 1 5 in Ahlrichs (2000) Employer of choice strategy, as stated in
Subsection 3.3 of this module. In your answer, you may write up to 700 words. You may
also refer to external sources, if you choose to include these in your answer. If you do so,
list the full references; these will not count toward the 700 word total.

career planning with regard to land-based maritime industry employees
In relation to land-based maritime industry employees, such as persons who work with
functions such as freight forwarding, logistics coordination, strategic planning, ship finance,
crewing, ship maintainance, sales and customer service, etc., performance appraisal, retention
and career planning issues are relatively similar to those in other shore-based firms, meaning
that the general description of this area found in Subsection 3.1 of this module should provide
a good fundament for work with these personnel groups. However, a few shipping industry-
specific remarks will still be made.
Firstly, Bordal et al. (2002, pp.9-10, 25) indicate that they perceive that there are the
following strategic human resource deficits in a number of Norwegian shipping firms: A
strategic need for the human resources function to be more directly linked to firm strategy, a
61

more holistic approach to human resource management than mere ad hoc personal
administrative work, organizational changes that enable increased interaction between middle
managers and the human resource department and the creation and implementation of
competence strategies. Based on the authors literature review, she believes that it is possible
that not only a number of Norweigan shipping firms are marked by this HR weakness; also a
number of non-Norwegian maritime transportation organizations may also be characterized by
a more reactive and ad hoc approach to human resources, as also discussed in Module 1s
Subsection 1.1. Here, improving this situation for the benefit of the affected organizations and
their employees is contingent on (a) the presence of human resource personnel or employees
who work with HR albeit in a more ad hoc manner who recognize the potential organizational
benefits of giving the HR work greater strategic priority and (b) persons in the top
management also being receptive and supportive of this change and its implementation.
However, from a realistic point of view, it is also probably the case that in a number of firms,
the HR work will continue to be reactive, if conditions (a) and (b) are not both fulfilled, or even
if both conditions (a) and (b) are fulfilled, but the organization in question has a lack of
resources or puts other priorities higher.
Moreover, as maritime transport is by nature a very international sector of the economy, yet
there are in some regions (e.g. the Baltic Sea, the Mediterranean Sea or South East Asia)
room for regional actors and in some countries (e.g. Indonesia, Norway, the Philippines and
the United States) even a large national shipping transport sector, the issue of fit between
the general level of international orientation of the organization in question and its market is
also a key factor that determines the success of work with human resources. In order to
address this issue, you must now read the following obligatory external reading:
Treven, S., 2001. Human Resource Management in International Organizations. Management
Journal of Contemporary Management Issues (open access journal published by the Faculty of
Economics, Split, Croatia), 6(1-2), pp.177-189, available at:
http://www.efst.hr/management/vol6no1.html.
Returning to the general organizational theory from Module 1s Subsection 2.1, the
ethnocentric approach to staffing international companies may commonly be used in
companies that merely create a separate international division for its foreign business
activities (see Albaum et al., 2005). In contrast, the polycentric approach would typically be
used an international organizational structure based on geographic area of customers and the
geocentric approach commonly for the international organizational structured based on
products (see ibid. and also Module 1s Subsection 2.1) In addition to the the ethnocentric,
polycentric and geocentric approaches to staffing described in this obligatory external reading
by Treven (2001, p. 178), some authors operate with a fourth approach: the regiocentric
approach. According to Cooper, 2010, this approach is characterized by the selection of:
management personnel from within a region of the world which most closely
resembles that of the host country. The company has expanded its search beyond
the borders of the host country, but has stopped short of seeking management
personnel from its operations throughout the world. The theory behind this
selection process is that nationals of the region in which operations actually take
place are better able to deal with language and cultural problems than are
managers from outside the region.
In relation to the regiocentric approach, if, e.g., a British shipping company chooses to located
its North Western Continental European logistics centre in the Netherlands and its Asian
logistics centre in Singapore or Hong Kong, one might say that it is seeking to pursue the
regiocentric approach to HR. In this example, it might indeed by the case that the Dutch staff
62

would be more competent in dealing with logistics issues with customers and other
stakeholders in key European nations such as France and Germany than the UK-based staff
might be, due to, e.g. greater knowledge of these continental European foreign language and
cultures as well as more specific knowledge of the logistics infrastructure and stakeholders in
the region; however, in contrast to the full-fledged polycentric organization, the Dutch staff
might still experience a few more problems in dealing with some French or German
stakeholders or requirements. As such, the regiocentric approach is a less extreme form of
adaptation to local and regional circumstances than the polycentric approach and is mainly
also used in an organization that is structured internationally based on geographic area
(Albaum et al, 2005).
Moreover, the above obligatory reading by Traven (2001) has also dealt with the management
of ex patriot employees, i.e. employees who are sent from one country to another by their
host organization. Here, according to Edstrm & Galbraith (1977), employees are typically sent
abroad for one of three reasons: (a) the need to fill positions, due to a lack of local expertise,
(b) for the organizational purpose of developing internationally-minded managers and (c) for
the general purpose of developing the entire organization. Figure 8 below indicates the
common characteristics of the policies of sending employees abroad for each of these three
purposes.
Figure 8. Characteristics of firms and organisations policies about sending
employees abroad, categorized according to the three main reasons for sending
employees abroad (Edstrm & Galbraith, 1977)

In relation to motivation and retention issues, it is to be mentioned that there are a number of
professional organizations for specific personnel categories in the shipping industry. Here, for
example, also navigation officers who continue work in shore-based positions may choose to
be a member of the Nautical Institute (2010). Moreover, there are specific organisations for,
e.g., younger shore-based employees such as BIMCO 39 (BIMCO, 2010c) or for women
professional in the maritime sector; here, two shipping organization for women with web page
63

information are depicted in Table 8 on the next page. There are however also yet other
regional professional forums for women in maritime transportation, including the Network for
Professional Women in the Maritime and Port Sectors of the West and Central Africa Region
and the Arab International Womens Maritime Forum for the Middle East and North Africa
(Elsaaed & Abdelgalil, 2008, p. 78-9).
Table 8. Professional organisations for women in the shipping sector

In some countries, such as the UK, there is a relatively strong tradition for membership in such
professional organizations, due to the historical traditions in which professionals in certain
maritime professions sought to positively influence practice and ethical standards through
membership and the development of common standards in such organisations (Parker, 2003).
However, many other countries do not have as strong traditions in this respect. Membership in
such organizations is usually at the prerogative of the individual employee.
However, members in these and other maritime professional organisations may have positive
side effects with regard to assessments, retention and career planning in that the discussions
and events of such organisations may inspire and motive the employee who opts for such
membership and well as provide him or her with more industry knowledge. Moreover, a
presentation made by an employee from a maritime firm or organisation at such an
organisation usually generates positive word-of-mouth for the maritime firm or organisation.
Based on such considerations, it is often the case that maritime companies or organisations
seek to create some space for the participation in activities in such organisations, by, e.g.,
allowing the employees who participate some freedom in arranging their work activities so that
they can also attend meetings in such organisations as well.
At the same time, there are also potential dangers to such participation, such as the dangers
of the (accidental or purposeful) revelation of confidential organisational knowledge to other
industry actors or problem that the employee who participates actively in such an organisation,
especially in case of problems or strife at the workplace, may identify him- or herself with the
chosen professional organisation more than the company and thus be more likely to work in
another way than the other staff in the organisation. These types of problems are relatively
difficult to control. Therefore, in cases where employees participating in such forums, the HR
staff should seek to ensure that there is adequate understanding of the firms or organisations
policies on which information is confidential and that there also is a sufficiently strong
corporate culture, so that the positive benefits of such participation can be reaped by the firm
or organisation, while at the same time the potential dangers are actively minimised.
3.4.1 Structured Assignment 5.15 Which assessment factors should be used with
regard to freight transportation customer service personnel?
For this structured assignment, you must first read Tuna, O. & Silan, M., 2002. Freight
Transportation Selection Criteria: An Empirical Investigation of Turkish Liner Shipping. In IAME
Panama 2002 Conference Proceedings, 13 15 November 2002. Santiago, Chile: ECLAC
[online] Available at:
http://www.eclac.cl/transporte/perfil/iame_papers/proceedings/AgendaProceedings.html.
Women's International Shipping
& Trading Association (WISTA)
http://www.wista.net/
Pacific Women and Maritime
Association
http://www.spc.int/maritime/index.php?optio
n=com_content&task=category&sectionid=6&id
=18&Itemid=33
64

1. After the implementation of a customer relationship management database, a Turkish
freight transporter is seeking to create a performance assessment measure for its customer
service personnel. As a HR department employee, you have been asked to assist. You must
therefore list up to 6 measures that you believe should be used with regard to the
employees who serve the Turkish customers. Based on the information in this article,
create such a list of up to six measures and explain your justification for the included
measures in relation to the future performance assessment of individual employees in the
customer service department. In your answer, you may write up to 700 words. You may
also refer to external sources, if you choose to include these in your answer. If you do so,
list the full references; these will not count toward the 700 word total.

2. Due the stated possibilities for Turkey to develop to a regional logistics centre in the East
Mediterranean Sea Region, due to its land bridge position both in East-West and South-
North axes, a leading Turkish freight forwarding company has a major foreign customer
from Italy who has suggested that it and the Turkish freight forwarding company should
enact an employee exchange program, in which one customer service employee from the
Turkish freight forwarding company goes for several months to the Italian customer
company unit which deals with the Turkish freight forwarding company on a daily basis and
the customer also gets the opportunity to send one of its shipping and logistics specialists
to work inside the Turkish freight company for some weeks with its own shippings.
Top management at the Turkish freight forwarding company has just said yes to this exchange
proposal. Based on insights from the external reading by Treven, 2001 as well as from this
structured assignments article, you must now prepare a pre-departure training and orientation
session of 3 days for the fluent English and very basic Italian-speaking Turkish employee who
is to be exchanged, and prepare a proposal for how the ex patriot is to be remunerated and
evaluated upon return, with the aim of retaining this key employee in the organisation and the
planning of his future career, so that the knowledge that he acquires in Turkey can be used
optimally in the Turkish freight forwarding company.
Please write a proposal about this of up to 1000 words, with a justification of why you choose
what you choose. In this answer, you may refer to external sources. If you do this, please list
the full references separately; they will not count toward the word limit of 1000 words.
3.5 Use of Assessment and Career Planning-related data in Maritime Organisations
Overall Knowledge Assets Management, Planning and Reporting
If we return to Figure 4 of Subsection 3.1 of this Module, box E in this same figure shows that
organisations can also aggregate the results of many individual employees assessments and
career planning conversations and schemes for use in overall knowledge assets management,
planning and reporting. This is also increasingly attempted in firms and organisations. Here,
however, it is to be noted that national or EU data protections laws, as discussed in this
Modules Subsection 1.2, about individual employees data may also set some limits to this
results accumulation for management, planning and reporting based on aggregate data and/or
require informed consent for some aspects of this endeavour. Here, the national and/or EU
rules must of course be followed when this approach is used.
This kind of aggregating the results from individual conversations may be very helpful in
relation to the assessment of whether a unit is contributing to its own stated goals and to the
goals of the entire organisation. Moreover, in cases in which group evaluations, as discussed in
Module 1s Subsection 5.2.1, are used or also also used, these can also be used in the same
manner, i.e. toward the evaluation of whether the unit in question is contributing to its own
65

stated goals and to the goals of the entire organisation. The practical value of this is
demonstrated by Jenssens (2003, p. 102) characterisation of the success of an innovative
Norwegian shipowner as follows:
The company employed a higher number of engineers than most of the companys
competitors. This made it possible to develop special skills, core competencies and
new technical solutions. [] the company also stimulated its employees to
continually focus on developing new solutions, frequently in co-operation with
customers or other companies.
In relation to the above statement, it can only be made based on the aggregation of data.
However, there are also descriptive aspects of knowledge dissemination that are highly
relevant to an organisations overall knowledge assets management and planning. One
example is the extent to which knowledge is disseminated among actors (Nonaka & Takeuchi,
1995). Here, knowledge can be disseminated at multiple levels:
A. Within an organisational unit
B. Within the organisation as a whole
C. Between organisations that cooperate to solve certain tasks
D. Between organisations that are competitors
E. Between organisations and firms in an industry on a national basis
F. Between organisations and firms in an industry on an international basis
G. Between an organisation and research/educational institutions and/or R&D institutions
H. From one industry to another
I. From mature individuals in the industry or who have retired from the industry to
younger individuals who are still planning their careers and educational efforts
In relation to the above possibilities, it is relevant to note the following three key
characteristics of the global maritime transport industry (Fei et al, 2009, p. 330):
1. High mobility rate between companies within the industry;
2. High and almost one-way direction movement of personnel from the shipping industry to
other maritime related industries; and
3. Low intake of graduates from maritime education institutions due to the difficulty in
attracting candidates studying nautical courses.

In relation to the above, the relatively widespread use of shorter-term contracts concerning
seafarers on board ship contributes markedly to the overall, global high mobility rate between
companies with the industry; in contrast, it is to be expected that there will be some variation
between shore-based units across countries. For example as mentioned at the end of this
modules Subsection 1.1, the maritime nations Germany, Japan and France are characterized
by strong internal labour markets whereas the maritime countries/administrative distracts
Britain, the USA, Denmark, the Netherlands and Hong Kong to a greater extent rely on
external labour markets, which increases mobility among firms and organisations both within
an industry and across industries (Harris, Brewster & Sparrow, 2003). Thus, with regard to
shore-based maritime work, we would also expect to find higher mobility rates in Britain, the
USA, Denmark, the Netherlands and Hong Kong than in Germany, Japan and France.

Employee mobility between firms generally increases knowledge dissemination between
organisations and firms in an industry (points E and F, above) and it may also further the
exchange of knowledge between organisations and related research/educational institutions
and/or R&D institutions (point G). however, these is also an increased risk that knowledge may
also disseminate to an increased extent to competitors (point D), even if employment
66

contracts contain passages about secrecy, also after the termination of employment for an
individual employer, and the like.

In contrast, internal labour markets gives the organisation in question more opportunity to
assess competencies and accrued knowledge over time (points A and B above) and also
usually increases the quality of such assessment (ibid), yet this internal sharing may occur to
the detriment of the absorption of knowledge from collaborating organisations (point C), from
other industry firms (points E and F), from research/education as well as R&D institutions
(point G) and from other, related industries (point H). Here, especially with regard to marine
engineering, there are a number of potentially relevant technological insights about the
workings of machines and their maintenance that marine engineers can receive via inputs from
related industries.

Finally, in some developing maritime labour supplying nations, there is three-fold combination
of labour market problems, namely low quality of both basic and maritime education and
training (MET, Sampson, 2004a), land-based job market failure (Wu & Morris, 2006) and
discrimination against at least some of the older employees (Leggate & McConville, 2002). In
this circumstance, it is seen that older employees who leave or are forced to the sector due to,
e.g., their age do not necessarily find work for wages on land, yet may still choose to share
knowledge with young persons in their local region, to make up for the low local educational
quality, without receiving any wages for this work. In this case, this is a free input that lowers
the public sector or industry costs of achieving quality in education. Therefore we will return to
this last point from both a knowledge and education investment management perspective in
Section 5 of this module.

A number of authors work with the term tacit knowledge or its synonyms, such as embed-
ded knowledge. Hall (1997, p.47) describes this knowledge as characterized by causal am-
biguity, it is acquired by observation and experience, e.g. the training of a Buddhist novice.
The opposite of such tacit knowledge is explicit knowledge, i.e. knowledge that can be more
easily written down or orally transmitted, possibly with the help of charts, diagrams, or the
like.

In relation to understanding the dissemination of tacit and explicit knowledge, the framework
of Nonaka & Takeuchi (1995), as depicted in Figure 9 below is helpful.

Figure 9. The Knowledge Conversion and Sharing Processes of Nonaka & Takeuchi
(1995, p. 64, 71-2)

From: To: Tacit knowledge Explicit knowledge

Tacit Socialization Externalization
knowledge

Explicit Internalization Transmission or
Knowledge Combination

In the above figure, it is seen that when tacit knowledge is transmitted to other individuals,
this usually occurs through a process of socialisation as was also suggested by Halls (1997, p.
47) figurative example of the Buddhist novice. This is a relatively slow means of transmission,
due to the nature of the knowledge itself. It is therefore helpful if the persons involved in the
67

transfer are made aware of it and that whenever possible, a portion of the tacit knowledge is
transformed to explicit knowledge by, e.g., the writing down of the knowledge that can be
written down, as an aid to the knowledge sharing process. However, as soon as the knowledge
is written down, it may also more easily land in the wrong hands, i.e. the hands of compete-
tors. However, in some cases, a combination of externalized, previously tacit knowledge and
still tacit knowledge may enables the combination of the organisational knowledge, i.e. the
tacit knowledge combined with the explicit elements, to remain intransparent to competitors,
and thus provided the medium-term sustainable competitive advantage that was also men-
tioned in Subsection 3.3 of this module, based on Progoulaki & Theotokas (2010).

Internalization in the above figure commonly refers to the situation in which book knowledge is
applied in practice. An example would be when a nautical student practices what he or she has
learned from textbooks on a simulator or during a cadetship voyage. Here, there are of course
a number of situations both on ship and on shore when knowledge is so internalized; in a port,
for example, knowledge of occupational safety and health rules is internalized by practice and
it is perhaps only through practice that optimal arrangements between multiple actors and a
logic of solving potential issues in this area in a specific port can be created. Similarly, a
shore-based maritime firm employee engaged in wage negotiations with employees and pos-
sibly also their chosen unions may have explicit knowledge of labour relations, but this may
prove insufficient for such negotiations so he or she will internalize which aspects of the ex-
plicit knowledge are especially relevant in specific situations only through experience. This
knowledge-of-practice then also become tacit.

Explicit knowledge may be either transmitted via documents, papers, presentations to other
actors or the explicit knowledge from one source may be combined with another explicit know-
ledge source. Textbooks, such as this course textbooks, are good examples of the process of
the combination of various explicit knowledge contributions, in that the insights from multiple
research-based and practitioner works are used in the writing of a textbook, in order to pro-
vide a global overview for the learner.

However, also outside of the academic learning context of this course such knowledge combin-
ation may be necessary. Here, for example, if a small stevedoring firm is taken over by a lar-
ger firm, the management after the take-over may wish to combine certain elements of the
explicit knowledge from customer service, goods handling and safety procedure from the firm
which has been taken over with other elements about the same issues from the firm that was
responsible for the take-over.

Such knowledge sharing processes should be managed and motivated by the responsible
managers, with the possible assistance or overall coordination by the human resources
department. In relation to the shipping industry, there are a number of stakeholder and situ-
ational factors which can be said to generally influence the possibilities and limits for shipping
organisations to practice knowledge management. These are depicted on the next page, in
Table 9. Here, a couple of the employee-relationship related factors are especially
noteworthy, in the author of this e-textbooks opinion, namely points 3, Short-term
relationships form a barrier to both learning and knowledge sharing motivation and 5, Low
trust between employees are a potential barrier. Here, as was argued in Module 3s
Subsection 2.3.6, strong and/or perceived strong cost pressures have further the system of
international sourcing of maritime labour, which may also have lead to these factors short-
term relationships and, also consequently, low trust. However, there is also a potentially

68

Table 9. Shipping-Industry Specific Knowledge Management Factors related to
Stakeholders and the Industrys Situation (adaptation of Table 2 in Fei et al. 2009, p.
234)

very high cost incurring factor that has gone relatively untreated in the same cost calculations
due to its inpredictability: the hidden cost of the potential maritime accident.

For the case of transport by ship of oil or of hazardous and noxious substances, the costs of an
accident in which such substances lead from the ship into the sea are exorbitant (see Kim,
2003). This is also the reason why the system of vetting inspections has been developed for
this section of the shipping industry. In this segment, leading officers in certain companies and
on certain tanker ship types are more commonly rewarded with premium wages and longer-
term contracts; some time this concerns the shipmaster only, and at other times, multiple
crew members get these better terms. However, here, it is possible that the wage costs are
overestimated and potentially knowledge management efficiency and effectiveness benefits are
systematically underestimated for multiple segments of the shipping industry in relation to
decisions to employ crew members on short-term contracts and in market-like relationships
that do not further trust. Here, this may especially be the case due to the necessarily of
experimental knowledge with regard to each specific ship construction a knowledge-type
factor which is also included in the table above. If it is the case that the ship master and
leading crew members change ships frequently, as is practiced in a substantial segment of the
shipping industry, in this situation it is also likely that no shipmaster and his/crew crew is
actually even operating the ship as optimally as possible, both with regard to safety and
efficiency and effectiveness factors such as fuel efficiency, as would be the case were the
shipmaster and the crew to only operate this one type of ship all the time.

Here, however, as ships are normally ordered at different points in time in smaller order a-
mounts, it is usually also not possible in all but the largest most commercial shipping com-
panies to get specific crews members to operate ships with identical or almost identical equip-
Factor type Specific factors & their influence on knowledge dissemination
1. International regulation and governance necessitates
knowledge dissemination across national borders in
international organisations
2. The international workforce is a potential barrier to
knowledge dissemination
1. Distance between management and employees makes
knowledge dissemination difficult
2. Low commitment to organisation makes ot difficult
1. Communication in lingua franca is a potential barrier
2. Cultural differences are a potential barrier
3. Short-term relationships form a barrier to both learning and
knowledge sharing motivation
4. Strict hierarchies are a potential barrier
5. Low trust between employees are a potential barrier
1. Highly experiential knowledge is marked by barriers, as it is
difficult to write down or document to transmit to others
2. Written rules, instructions, explanatory papers, etc. are
relatively easy to disseminate if the infrastructure is in place.
Contextual
factors
Organisation-
al factors
Employee-
relationship
related
factors
Knowledge
type factors
69

ment and equipment placement. Thus there are many major real-like dilemmas in relation to
optimizing knowledge management in relation to ships crews.

In relation to knowledge management, for internal registering of knowledge management,
there are currently some fairly-well established models or procedures such as the Balanced
Scorecard (Kaplan & Norton, 1992) or knowledge assets reporting (Sveiby, 1997). However,
the various procedures and models for aggregating data about knowledge-related assets are
still under development (Bukh, Christensen & Mouritsen, 2005), specific models will not be
treated in depth here. Instead, based on the fundamental information in this chapter, maritime
HR professionals are advised to examine existing models critically before deciding on the
implementation of a specific model if this decision has not been taken by top management.
Here, a few maritime companies also publish external materials concerning an assessment
and/or description of their knowledge management activities or knowledge-related assets to
date (see Copenhagen Malm Port, 2010, pp. 17-9; Det Norske Veritas, 2009, pp. 42-7) or
plans for future knowledge development (see, e.g., Maritime Research and Development
Advisory Panel (MRDAP, 2009), which has made such a plan for the Maritime and Port
Authority of Singapore. Moreover, concerning knowledge assets reporting in, e.g., annual
reports, for a few countries there are also national guidelines (e.g., for Denmark: Ministry of
Science, Technology and Innovation, 2003).

3.5.1 Structured Assignment 5.16 Technology and Organisational Culture Variables
in relation to Knowledge Management in Shipping Firms

For this assignment, you must first read Fei J, Chen S, and Chen S. L., 2009. Organisational
Knowledge Base and Knowledge Transfer in the Shipping Industry. Electronic Journal of Know-
ledge Management, 7(3), pp. 325 340 Available at: http://www.ejkm.com/volume-7/v7-
3/v7-i3-art3.htm.

1. Choose a major shipping actor, e.g. a shipping firm, ship management firm or crewing
firm, from your home country or a neighbouring country, about which you have some
knowledge and which has an internet sight. Here, you must write the name of the firm and
then state the internet site.

2. Discussed, based on Figure 3 and the discussion of Figure 3 (pp. 330-1) in this article,
which specific factors and institutions you believe especially influence the organisational
knowledge based of the chosen firm. Here, you may write up to 600 words in your
assessment. You may also refer to external sources, if you choose to include these in your
answer. If you do so, list the full references; these will not count toward the 600 word
total.

3. In relation to Figure 5 of this same article (see p. 335), discuss (a) which knowledge
transfer mechanisms are technically feasible in relation to the ships on which crews related
to your firm work and (b) which knowledge transfer mechanisms you would deem
especially suitable based on your knowledge of the chosen firms organisational culture and
the common employee preferences and expectations in the home country of the firm. In
answering this question, you may write up to 750 words. Here, you may similarly refer to
external sources, if you choose, provided that you list the full references to these sources.
These references will not count toward the 750 word limit.

70

4. Education and Training in the World of Maritime Transportation
4.1 Education and Training in Ports and for Port Workers

In relation to the area of education and training in ports and for port workers, there are a
number of very good existing public source texts written by external sources which both ex-
plain the general education strategy and present underlying institutional frameworks and
differences among nations, thus providing a good international overview. Based on this
fortunate circumstance, this sections text is rather short and will be mainly based on these
external sources, after a few brief remarks.

Here, however, it is to be noted that although the World Bank (2008) has recommended edu-
cation and training as an integral part of port reform, privatisation and technology moderni-
sation processes, in certain ports, especially in developing countries, there are perceptions that
the financing to effectuate the needed education is severely insufficient (see, Hill, 2005;
Marges, 2000; Turnbull & Wass, 2007). In such cases, it is relatively difficult, if not impossible,
to conduct education and training in an acceptable manner. This problem seems, however, to
remain unsolved for a number of ports in developing countries.

4.1.1 Structured Assignment 5.17 Training and Education for Port Workers in Europe,
including Underlying Institutional Differences
For this structured assignment, you must first read Turnbull, Peter, 2009b. Training and
Qualification Systems in the EU Port Sector: Setting the State of Play and Delineating an ETF Vision. Final
Report of July 2009. Brussels, Belgium: European Transport Workers Federation. Available at:
http://www.itfglobal.org/files/extranet/-75/17739/Final%20report%20EN.pdf [accessed 5
th
May 2010].
1. Concerning the Section of the paper titled VET in the European Union, please take the
employers perspective and discuss the advantages and disadvantages to ports and firms in
ports if (a) training is mainly regulated by the state (as opposed to the market) and the
converse (i.e. regulated by the market instead of the state) and if (b) the local of training
is an external school (as opposed to the workplace itself) and the converse (i.e. the local is
the workplace, not an external school). Here, you may write up to 800 words in your
answer to this question. You may also refer to external sources, if you choose to include
these in your answer. If you do so, list the full references; these will not count toward the
800 word limit.

2. On p. 10, Turnbull (2009b) writes the following:
As the business setting is now dominated by a handful of global terminal operators
(GTOs) the six leading port operates in Europe handled nearly 705 of the total
European container throughput in 2002, compared to 53% in 1998 it is clear that
GTOs will play an increasingly important role in the future training and development
of port workers.
Please specify what sort of threats and opportunities this development may open up for with
regard to (a) smaller private port terminal operators, (b) public port authorities and (c) smaller
stevedoring firms. Here, you may write up to 700 words in your answer to this question. You
may also refer to external sources, if you choose to include these in your answer. If you do so,
list the full references; these will not count toward the 700 word specification.
3. Discuss the potential strengths and weaknesses of port employers sharing joint
responsibility for the organising of port worker training courses with the unions that
represent a substantial portion of the employees from the point of view of the employer.
71

Here, you should at least base this discussion on the information in this articles sections
Port Organisation, Employment and the Training of Dockworkers (pp. 11-14) and The ETF
Survey of Training and Health and Safety at Work, 2008 (pp. 14-31). Discuss whether
differences in port organisation (i.e. service ports versus tool ports versus landlord ports
versus fully privatised ports) plays any role in determining these strengths and weak-
nesses. In answering this question, you may write up to 800 words. If you choose, you
may also refer to other external sources. If you do this, list the full references, which will
not count toward the 800 word limit.

4.1.2 Structured Assignment 5.18 Training and Education of Port Workers in Rotter-
dam, Netherlands, New Orleans, USA and Durban, South Africa
In order to solve this structured assignment, you must first read DeLangen, P.W., 2008.
Analysis Training and Education in Ports, Rotterdam, Netherlands: Erasmus University
Rotterdam, available at:
1. Based on Figure 1 of this article, discuss the lowest three of the total of five boxes for a
major or medium sized port in your home country, who name you and port type (e.g.
service port, tool port, landlord port, fully private port) you also indicate in your answer. If
your home country is the Netherlands, the USA or South Africa, choose another port than
the covered ports of Rotterdam, New Orleans or Durban for your analysis. For each box,
you must discuss what the real-life conditions are in the port in question, in relation to the
statement in the respective box. Moreover, for the box at the bottom of the figure, include
a discussion of the possible stakeholder labour unions as a potential cluster actor. Thus,
for the port in question, also specifically discuss whether labour unions are present and
involved in the debates, their relative strength and whether their influence is perceived as
positive or negative by the employing organisation stakeholders. Here, you may write up to
800 words in your answer to this question. You may also refer to external sources, if you
choose to include these in your answer. If you do so, list the full references; these will not
count toward the 800 word limit.

2. Concerning the port of Durban, South Africa, the following is stated on p. 7 in the article:
Specific to Durban are the South African regulations related to education. Firms
have to pay to a national education fund, but these contributions can be (partially)
refunded if companies invest in training of employees. This regulation provides
firms with incentives to invest in training and education. These acts create an
institutional and financial framework to encourage partnerships between the public
and private sectors. Furthermore, the acts lead to standards for education.
Discuss whether in your opinion these education regulations will provide a long-term
competitive advantage based on superior knowledge for South African ports, compared to the
ports in the coastal countries that are South Africas southern African neighbours or whether,
conversely, they might mean a long-term competitive disadvantage based on a higher cost
level. In your discussion, focus especially on the other external factors which determine
whether the one or the other would occur. In answering this question, write up to 600 words,
aside from the references to any external sources that you might also consult to answer this
question. If you include external references, please list them; they do not count up to the 600
word limit.
72

3. Discuss the same issue for the fictive case that the ports of the Australian federate State of
Victoria, in which, e.g., the Port of Melbourne is located, begin to require that all port firms
either paid to education fund for port workers run by the Port of Victoria or invest in own
programs to train employees, when the neighboring Australian federal states of New South
Wales (the federal state in which the Port of Sydney is located) and South Australia (the
federal state in which the Port of Adelaide is located) did not do the same. In other words,
discuss whether, in this case, would such educational regulations provide a long-term
competitive advantage based on superior knowledge for the ports in the Australian federal
state of Victoria, compared to the ports in the neighbouring federal states of New South
Wales and South Australia, or whether, conversely, they might mean a long-term
competitive disadvantage based on a higher cost level. In your discussion, focus especially
on the other external factors which determine whether the one or the other would occur.
Also answering this question, write up to 600 words, aside from the references to any
external sources that you might also consult to answer this question. If you include
external references, please list them; they do not count up to the 600 word limit. Here, as
concerns external sources, the web pages of Ports Australia (2010) at:
http://www.portsaustralia.com.au/, including a map of the Australian ports at:
http://www.portsaustralia.com.au/misc/Ports%20Australia%20map.pdf may help you in
this discussion.
4.1.3 Structured Assignment 5.19 The French Approach to Training in Ports
In order to solve this assignment, first read: Galbrun, X., 2009. Training and qualification
systems in the EU Port Sector - The French approach of CQP. Paper presented at Training and
qualification systems in the EU port sector: setting the state of play and delineating an ETF
vision - Final workshop, Limassol, Cyprus, 26 - 27 February. Brussels, Belgium: European
Transport Workers Federation [online]. Available at: http://www.itfglobal.org/files/extranet/-
75/15444/Galbrun.pdf.
1. In this article, we get the perspective of a certain French ports employers association
called UNIM on training and qualification of port workers in France. Based on this article,
discuss the strengths and weaknesses with regard to the practical implementation of
training for potential and current port workers in France, seen from an employers
perspective. Here, you may write up to 500 words in your answer. If you choose, you may
also refer to other external sources. If you do this, list the full references, which will not
count toward the 500 word limit.

Ports in Northern France compete with ports in, e.g., Belgium and the Netherlands. Therefore,
based on article for this assignment, as well as the description of the training in effect in the
Port of Rotterdam, as discussed in the DeLangen (2008) text used in the previous assignment,
provide remarks about the strategic strengths, weaknesses, opportunities and threats of the
French approach to training with regard to knowledge-based competition between the ports of
Northern France and the Port of Rotterdam. In answering this question, please write up to 700
words, aside from the references to any external sources that you might also consult to answer
this question. If you include external references, please list them; they do not count up to the
700 word limit.
4.2 Maritime Education for Seafarers
With regard to maritime education and training for seafarers, as previously mentioned in
Module 3s Subsection 2.3.5, there is a huge global spread in the conditions under which such
73

education, also called maritime education and training (thus, henceforth: MET), is offered.
On one hand, most maritime schools in Western Europe and other so-called traditional
maritime nations that are marked by a very high level of per capita national income generally
enjoy very fortunate financing circumstances, compared to the rest of the word. In these
countries, although there are national variations due to differences in educational traditions
and political viewpoints, maritime education is typically relatively heavily subsidized by the
public sector (Mazzarino, 2005; Yamamoto, 2002). Concerning the formerly Communist
countries of Eastern Europe and the former Soviet Union, in these countries, there are
generally much bigger problems in financing, which in some circumstances are quite severe
(Zac et al., 2000). However, for most of these countries, maritime education generally has a
good reputation and officer MET is also commonly characterised as being detailed,
systematised and with strong scientific foundations (ibid., Barzan, 2007).
In contrast, in the developing countries, vast quality spreads between countries, but also
within certain countries, are common. For the case of India, a quote from i-maritime
Consultancy Private Limited (2008, p. 4) illustrates this problematic very well:
When DG shipping gave the licences to private players to set up the institutes, it
used its due diligence very sparingly; people with inadequate capability have also
got the licence. DG Shipping restricted itself to setting up the minimum
infrastructure and associated facilities requirement guidelines on pen and paper.
Results, as opined by the participants, are poor quality of training, lip service to the
infrastructure and even worse, dud certificates. DG Shipping is taking the
responsibility of approved institutes to the extent of inspection but do not concern
about what the non-approved institutes are doing or what the students of such
institutes are facing. Few unfair activities spoil the impression about the standard of
overall Indian maritime education.
However, developing countries such as India are also seeking to rectify these problems. E.g.,
an Indian educational blogger noted on September 25, 2005 that the Indian Directorate
General of Shipping has chosen to make rating of maritime colleges mandatory
(http://prayatna.typepad.com/education/rating_educational_institutions/) to eliminate the
potential of a few unserious actors ruining the general reputation of seafarers from India.
For the case of the Philippines, which according to Table 3 of Module 3 was one of the two
largest seafaring labour supplying countries in the world, supplying over 120,000 seafarers to
the world, the quality spread problems appear however to be more difficult to rectify. Here,
Amante (2007, p. 41) has reported, as also indicated in Subsection 2.3.5 of Module 3, that less
than 50% of maritime engineering and only about 40% of the navigation officer school
graduates were able to pass the official Filipino license examinations in the previous decade
This circumstance of poor quality has resulted in a decreased interest among young people
(here: mostly young men) in the Philippines to commence MET programs, which also usually
require that their family and relatives save for many years to pay the very high level of tuition,
in relation to the familys annual income (ibid.). However, at the same time, the Philippines is
the developing country which has received the large amount of non-state sector support for
MET, which has come from a multitude of individual shipping companies, from national
shipowners associations from countries such as Japan, Norway and the Netherlands, and even
from the international union confederation of the ITF (Wagtmann & Poulsen, 2010). Programs
supported by such actors usually have much fewer or almost no quality problems.
Finally, similar to the situation in the Philippines, tuition fees are also a similarly often
insurmountable barrier for Chinese students, as the total tuition fee for an officers program
commonly corresponds to the average annual income for 17.5 Chinese rural workers (Zhao &
74

Amante, 2005, p. 553). This is also the case in a number of other developing and middle
income countries as well (see, e.g., Barsan, 2007).
Concerning ensuring quality in MET, Sampson (2004a) has correctly noted that the main
modus through which the global shipping industrys stakeholders have sought to ensure a
sufficient level of quality has been regulations such as the IMOs International Convention on
Standards of Training, Certification and Watchkeeping for Seafarers, 1978, with later
amendments until 2006 (commonly called the STCW Convention). However, as indicated in
Figure 10 on the next page, this regulation alone has proven insufficient to ensure quality.
In later years, increased educational standards as well as technological developments which
have mandated investment in expensive electronic training equipment such as simulators has
worsened the finance and quality crisis of many MET institutions in the middle and low income
countries, and such investments, when made, have all too often been made to the detriment
of equally necessary investments in staff qualifications (Cicek & Er, 2007; Sampson, 2004a;
Short, 2004, Wagtmann & Poulsen, 2009). In this situation, due to factors such as the wish to
achieve a source of income and/or to insufficient governmental support, a number MET
institutions in developing countries or transition economies adhere to a MET policy of merely
Figure 10. An overview of events leading to the current state of global maritime
education (after Sampson, 2004a, this figure first appeared as Figure 6 in Wagtmann
& Poulsen, 2009)

seeking to fulfil a bare minimum of skills, experience and competency (Wagtmann & Poulsen,
2009; Yamamoto, 2002; Zac et al, 2000). Here, however, seafarers from such bare bones
programs are likely to only find employment in the less reputable segments of the shipping
industry, if at all (see Amante, 2007 or Amante, 2003)
For the case of South Africa, CEO Tsietsi Mokhele of the countrys maritime safety authority
(SAMSA) illustrated the situation as follows in a statement to a parliamentary committee in
May 2008: The shipping industry has put little into training; government has done little to
promote maritime training; and, now, there are no replacements for those skilled people who
are retiring (South African Press Association, 2008).
75

In making the above allegations about a global financing problem with regard to MET, we are
not however excluding the circumstance that individual maritime education and research
institutions in transition economy and developing countries can indeed success and excel
through excellence in maritime partnerships with the private sector or with other donors and
partnerships with institutions in more well-off countries, for there is also ample evidence of this
and also studies of how this is achieved (see, e.g., the Estonian-Turkish study of Yilmaz et al.,
2007; Kozlova,2007 and Kostylev, 2006 for the case of a leading Russian maritime academy).
However, we maintain that this is not the main pattern, and that most maritime schools in the
transition economy and developing countries are threatened by financing problems.
Some academics (e.g. Pourzanjani et al. (2002) propose a larger mandatory government
financing role. From the internal Asian perspective, also Singapore-based Sharma (2002, p.26)
predicts that partnering between state-run maritime training institutions and manning agents
will come to play an increased role in the future. However, other academics or business actors
advocate a firm or firm coalition-specific model for labour supply chain management, from
education to retention issues, via firm-specific investments through, e.g., manning agents
(see, e.g., Ruhallah, 2004, p. 29-31). Liberalists would tend to prefer such a system, and
other persons with less optimistic views of various national or local public sectors capabilities
of playing the leading role in solving maritime education problems also in the case of more
favourable public sector financial circumstances also adhere to this opinion. For example, the
Philippine manning industry, on the basis of the impressive results of Norwegian and Japanese
investments in seafaring education in the country, would like to attract similar investments
from other shipowners (Lloyds List, 2007). In relation to this, the Filipino actors in both the
public and private sector would most like to see the firm coalition model, with e.g. European
shipowner organisations or at least actors of a specific nationality grouping together (ibid.,
Lloyds List, 2008a). Finally, in the same vein, there are voices also from the education sector
that point to constant gaps between MET and the realities of maritime business, as
summarized eloquently in the statement of Horck (2007, p.220):
It is now six years since [it was] (2001) reported, after the meeting of the Inter-
national Maritime Universities (IAMU) in Kobe (AGA2), that the MET institutions
often are said to be too remote for the real world. It is 27 years since the first
Rector of WMU, Slve Arvedson, at an international STCW meeting in Malm
November 1980, spoke about the need of bridging the gaps between the ships and
the MET institutions. Still in 2007 these appeals are relevant.
Due to the recent focus on the officer shortage situation (see BIMCO/ISF 2005 or Module 3s
Structured Assignment 3.2), the tendency seems to have been in the recent 4 5 years, that
more and more maritime schools in developing and transition economies were contacted by
shipowners. A statement from the Constantza Maritime University (Barzan 2007, p. 263) is
illustrative of this change:
Year after year, one of the most difficult tasks for the rector and the deans was to
find and convince Romanian and mainly foreign owners to accept our cadets on
their ships. [...] Starting with 2005 the crewing and shipping companies came to
our University asking for cadets and officers. At first we were surprised by such a
change in attitude. After a while it became clear that the new approach of the ow-
ners was dictated by the already existing lack of officers and the prognosis confir-
ming shortage of well trained officers for the merchant fleet during the next 10
years.
The ship management industry association InterManager now requires of its members that
they adapt a formal cadet programming offering at least one cadetship per ship under full
management by the member in question (Lloyds Ship Manager, 2007b). Former InterManager
76

president Rajaish Bajpaee has stated that that attitude of shipping and ship and crew
management companies to their crews competencies could be viewed as a mirror of corpor-
ate social responsibility (BIMCO 2007, p. 70).
Still, there is still a large segment of the global maritime industry that views investment in
seafarers education as an exclusive public sector responsibility and is loath to contribute
(Short 2004), and the appeals of organisations such as BIMCO and ISF (see, e.g., Osler 2007)
for shipowners to focus to an increased extent on training cadets have been ignored by most
industry companies (Lloyds Ship Manager, 2007d). Due to this lack of broad industry interest,
we expect to see only moderately increased growth in these types of arrangements on the
short- and medium-term future. For we believe that the dominating mentality is that which
was described by current Intermanager president Ole Stene as follows: Shipowners think
nothing about investing $ 120m in a new ship. But you look at their eyebrows rise when you
ask them to increase the management fee or worse still, pay for a cadet berth of one of their
ships being delivered out of a shipyard into third party management (Hand, 2008).
In the worst case, ship owners and ship and crew management companies that have not in-
vested in training poach senior officers, to the detriment of those private sector interests who
have invested heavily in training; this phenomenon was especially prevalent in the Philippines
during the boom situation (Lloyds List, 2007). Due to this problem and a preference for using
the private sector, the Filipino government looked into making cadet places and other training
measures part of the licensing criteria for manning agents and principals who set up or operate
in the country (Lloyds List, 2008a). However, ultimately this idea was abandoned as there was
great uncertainty as to whether this measure would indeed succeed in improving educational
quality or whether it would merely deter a number of operators from setting up, due to the
fact that the international open register system also in many aspects competes on a very low
common denominator (see, e.g., DeSombre, 2006; Lillie, 2008; Llcer, 2003).
At the same time, it must be mentioned that a few maritime seafarer supplier nations Norway
enjoy more intense relationships with stakeholder coalitions in certain donor countries. For
example, both the Japanese shipping industry and the Japanese International Cooperation
Agency invest measurably in upgrading seafarer training in the Philippines (Amante 2007, p.
50); moreover, Japan seems to be seeking through such maritime educational programs in
other South East Asian countries as well as offering economic assistance to the upgrading and
maintenance of maritime aids to navigation and other coastal state services in the poorer
countries of this region to be optimising its overall maritime position and reputation in the
region (see, e.g., Zhu, 2006). Finally, Japans international development agency has also been
active in assessing maritime education needs in other countries such as Egypt and Vietnam
(see, e.g., JICA, 2000). Also the Norwegian and Dutch shipping industries have invested in
MET in the Philippines. Here, we will return to such investments in MET on the part of industry
organisations and individual shipping industry actors in Section 5 of this Module.
In some countries such as Great Britain, there has been debate about fast tracking (see,
e.g., Gardner et al., 2001), i.e. attempts to provide more MET in a shorter period of time to
make up for the domestic lack of officer trainees. Concerning this debate we expect it to
continue in the coming years, for on one hand, educational authorities in e.g. some Western
countries and flag states around the world are seeking to alleviate some of the problems cau-
sed by the shortage of officers through educational fast-tracking attempts.
However, there are controversies among industry representative about fast-track approaches;
especially insurers and oil companies tend to take a more conservative view about such
77

approached. For example, managing director of the North of England P&I Club Mr Rodkey
Eccleston has stated (Lloyds Ship Manager, 2007c):
In the recent years of booming freight markets we have also seen a significant
reduction in the amount of sea time require to btain qualifications. Seafarer
education is now so focused on running ships in accordance with procedures that,
when an incident occurs for which there are no procedures, crews do not always
have the training, initiative or experience to think independently.
Also Andreas Droussiotis, Managing Director of Hanseatic Shipping has openly stated his fear
that some seafarers may be promoted too swiftly or because there is no alternative, if the
employee fears losing the employee, thus compounding the risk of accident due to lack of
experience (Lloyds Ship Manager, 2007a). Our third and final statement comes from the union
side. In 2006, the UK labour union for maritime officers Numast (now Nautilus, with divisions
in the UK, Netherlands and Singapore) urged the British government to limit the duration of
the so-called Crew Equivalence Certification after a series of accidents on ships which the
union believed to have been related to a decline in crewing standards (Kostylev and
Loginovsky 2007, p.47).
Here, it is difficult to predict for the future. However, ultimately the political success or failure
of such fast tracking attempts may be determined by whether or not there is a major maritime
accident that receives media and political attention, in which the actions of fast-tracked officers
are determined to have been a major contributing factor to the accident. Such as accident has
now yet occurred. However, statistics from the International Union of Marine Insurance (IUMI)
indicate that the frequency of total and serious partial loss claims related to maritime incidents
increased greatly from 2000 to 2006 (Lloyds Ship Manager, 2007c). Moreover, tanker
accidents also rose from the first quarter of 2006 to the first quarter of 2008 (Lloyds List,
2008c). Therefore marine insurers also generally believe that accidents may increased further,
if the officer shortage situation worsens (Lloyds Ship Manager, 2007c).
In the above discussion, we have mainly focus on education for officers, due to higher levels of
responsibility that work as officers on ships entail. However, this perspective is admittedly
weak, in that a ships crew can of course only operate adequately if all crew members ratings
as well as officers are adequately trained. Moreover, also ratings commonly show an interest
in training and some development of their skills. Here, the de facto situation in the face of the
global shortage of officers and global overabundance of ratings (see BIMCO/ISF, 2005) and the
circumstance that in some major labour supplying countries such as the Philippines, MET
quality is not sufficient to ensure that all those who graduate from MET programs actually also
can pass the officer certificate examinations (Amante, 2003), a large number of persons from
developing countries who have either completed an entire course of education which has been
announced as an officer training course, yet have not passed the certificate examinations
end up working as ratings. Moreover, due to the high tuition levels and relatively low income
and social insurance program levels in a number of developing and transition economy
countries, a number of cadets are forced to discontinue their studies if their source of financing
disappears, due to, e.g., illness or the sudden unemployment of a family member who is
contributing to payments for this education. In this case, it is also relatively commonly seen
that the student who has completed a part of an officer training program then chooses to offer
his or her labour as a rating.
Generally, training of ratings is prioritised much less highly than training of officers. However,
due to its apartheid part, South Africa seeks today to main commitment to training at all levels
of society, which also means that shipping companies situated in South Africa who employ
South African ratings must also develop training plans for them. This has, however, proven to
78

be problematic with regard to this countrys ratings, who are not globally wage competitive, as
they demand higher wages than ratings from other countries; moreover, South African
employers show general reluctance to employ South African rating meaning that they also only
in rare circumstances are very involved in the training of the ratings (see Bonnin et al., 2004;
Rugganen, 2005). Here, in contrast, also the South African employers generally contribute
more to the education of maritime officers.

4.2.1 Structured Assignment 4.20 The Situation of South African MET and the
Countrys Current Seafarers
For this structured assignment, you must first read: Ruggunan, S., 2009. Globalisation and
transformation of the South African merchant navy: A case of flag of (in)convenience shipping.
Pp. 131-50 in Kagwanja, P. & Kondlo, K., eds., 2009. State of the Nation: South Africa 2008.
Cape Town, South Africa: HSPC Press [online]. Available at:
http://www.hsrcpress.ac.za/product.php?productid=2231&freedownload=1.
1. Based on this articles text, summarize the problems and obstacles that the South African
system of MET faces, as well as the current possibilities for bettering the system. Here, you
may write up to 500 words in your summary.

2. Based on this articles text, summarize the stated current job situation and future job
perspectives for (a) current South African seafaring officers and (b) current South African
seafaring ratings. In answering this question, you may write up to 600 words.
4.3 Educational Offerings for Shore-based Maritime Employees
More maritime employers seem to perceive a need for continuing maritime education, also for
their shore-based employees (Wagtmann et al., 2009). However, there are vastly diverging
perspectives on this issue from country to country, also within the same region, due to
differing traditions concerning combining continuing education and employment. Tables 10
14 provide an initial impression of such differences, which much be considered carefully by
international HR managers working with continuing education in multiple organisational units
in multiple countries. In these tables, the main focus is on the Northern Maritime University
core countries of Denmark, German, Norway, Sweden and UK, and the sampled maritime firms
and organisations can only be regarded as a convenience sample.

79

Table 10. Convenience Sample Respondents Answers to How would you describe
your knowledge with respect to qualifications and education offerings regarding your
sector? (Wagtmann et al., 2009)

Table 11. Convenience Sample Respondents Answers to Does your company/
organisation have a specific strategy for the education and training or a personnel
development plan for staff? (Wagtmann et al., 2009)

Country
Total Number of
Responding
Companies
None
Basic
Under-
standing
Good
Under-
standing
Expert
All responses 69 0% 23% 51% 26%
Denmark 27 0% 19% 56% 26%
Germany 2 0% 0% 0% 100%
Norway 5 0% 60% 40% 0%
Sweden 9 0% 22% 44% 33%
UK 7 0% 29% 57% 14%
Other Country 13 0% 23% 46% 31%
Country Unspecified 6 0% 17% 67% 17%
Country Unspecified
Total Number of
Companies per
Country
Yes No
All responses 69 48% 52%
Denmark 27 41% 59%
Germany 2 100% 0%
Norway 5 20% 80%
Sweden 9 56% 44%
UK 7 71% 29%
Other Country 13 38% 62%
Country Unspecified 6 67% 33%
80

Table 12. Convenience Sample Respondents Answers to What Level of educational
qualification would most interest you/your employees? (Wagtmann et al., 2009)

Table 13. Convenience Sample Respondents Answers to Does your organisation
motivate employees to take part in part-time business degree programs or specific
university-level business courses that are relevant to your business? (Wagtmann et
al., 2009)

Table 14. Convenience Sample Respondents Answers to How much time do you
consider necessary for your employees education per year (in weeks)? (Wagtmann
et al., 2009)

The task of international education planning is very complex. Firstly, based on the above
tables, it becomes evidence that employees from different countries may have different
Country
Total Number of
Responding
Companies
Post-
Graduate
MBA Bachelor
Vocational
Training
Specific
Topics
Other
All responses 68 10% 9% 18% 10% 41% 12%
Denmark 27 11% 4% 19% 11% 48% 7%
Germany 2 0% 0% 50% 0% 0% 50%
Norway 5 0% 0% 40% 0% 60% 0%
Sweden 9 11% 0% 11% 11% 56% 11%
UK 7 29% 0% 0% 43% 29% 0%
Other Country 12 8% 33% 8% 0% 33% 17%
Country Unspecified 6 0% 17% 33% 0% 17% 33%
Country
Total Number of
Responding
Companies
Yes No
All responses 69 46% 54%
Denmark 27 41% 59%
Germany 2 0% 100%
Norway 5 60% 40%
Sweden 9 33% 67%
UK 7 57% 43%
Other Country 13 46% 54%
Country Unspecified 6 83% 17%
Total No. of
Responding
Companies
Up to
1wk
1-2wks 2-3wks >4
Total No. of
Responding
Companies
Up to
1wk
1-2wks 2-3wks >4
Total No. of
Responding
Companies
Up to
1wk
1-2wks 2-3wks >4
All responses 66 24% 27% 26% 23% 64 22% 41% 22% 16% 65 31% 42% 15% 12%
Denmark 26 23% 19% 38% 19% 24 25% 50% 8% 17% 25 36% 44% 8% 12%
Germany 1 0% 100% 0% 0% 1 0% 100% 0% 0% 1 100% 0% 0% 0%
Norway 5 40% 40% 20% 0% 5 60% 20% 20% 0% 5 40% 60% 0% 0%
Sweden 9 44% 33% 0% 22% 9 33% 44% 11% 11% 9 44% 33% 11% 11%
UK 6 33% 17% 33% 17% 6 17% 33% 33% 17% 6 17% 33% 17% 33%
Other Country 13 8% 31% 15% 46% 13 0% 31% 54% 15% 13 15% 38% 31% 15%
Country Unspecified 6 17% 33% 33% 17% 6 17% 33% 17% 33% 6 17% 50% 33% 0%
For Senior Management For Operational Management
Country
For Other Staff Levels
81

knowledge and skill levels in key areas such as knowledge of logistics and maritime transport,
fluency in foreign languages and computer skills. Moreover, similar to the organisational
situation concerning education for port workers, as described in the reading for Structured
Assignment 5.17 of this module (i.e., Turnbull, 2009b), there are national institutional
variations with regard to factors such as the degree of public sector co-financing for such
continuing education and whether it commonly takes place at the workplace, in, e.g.,
organisation-specific courses or whether students are commonly sent to private or public
sector training institutions. Thus, a course that is relatively inexpensive and also readily
available in one country may prove to be more difficult to organise in other.
Large shipping companies or other companies in the maritime transport industry may offer
traineeships or own educational programs. For example (here, and in the next paragraphs, all
references to specific firms are meant as examples only and thus not as recommendations or
endorsements of any specific training programme), the global container ship operator Maersk
Line, which is a part of the A.P. Moller-Maersk Group offers a Maersk Line Graduate
Programme, a Maersk International Finance Programme and a Maersk Internatioanl
Technology & Science Programme for university graduates with at least a Bachelors degree in
business administration or a study program in engineering or the natural sciences.
However, due to the global nature of shipping, there is a small number of global private sector
actors such as Lloyds and Det Norske Veritas that offer courses and training at various levels
and on various themes, including also correspondence courses; these are supplemented in a
number of country by more national or regional private sector institutions offering courses.
Moreover, a number of national industry organisations such as shipowners organisations also
offer courses for their membership. Finally there are some international stakeholder
organisations such, e.g., as BIMCO, the International Chamber of Shipping (ICS) and the
Institute of Chartered Shipbrokers that offer maritime sector-specific educational courses for
shore-based staff.
Concerning executive and middle management education, part-time Master of Business
Administration programs specialised in shipping are also now offered by around a dozen
universities in Europe and Asia. These programs are probably the most prestigious offering on
the market and are targeted mainly at promising candidates for management positions.
Beyond the above task-related considerations, in certain parts of the world, including various
previously disadvantaged groups is an objective which also must be considered in firms and
organisations educational considerations. For example, this is the case in South Africa, due to
previous years of apartheid (Bonnin et al., 2004; DeLangen, 2008). Also the issue of gender
equality does concern a segment of the population in developing countries very much, because
of the 800 million people on this earth who lack basic literacy skills, 2/3 of them are women,
and women in developing countries get married on average some 6 years earlier than the
female inhabitants of the OECD countries (Elsaeed & Abdelgalil, 2008, p. 71) There are
therefore a number of public sector institutions and private sector actors who focus on
improving gender equity with regard to access to training for shore-based maritime sector
career. According to these same authors (ibid., p. 83):
In 1996, the Institute of International Transport and Logistics launched a joint
project between AASTMTM, Norwegian Shipping Academy and NORAD (sponsor),
offering a Graduate Diploma in International Transport and Logistics. Around 25%
of the total Diploma students are women (Arab, African and Asian women).

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4.3.1 Structured Assignment 5.21 International perspectives on post-graduate
maritime study programs for shore-based employees
In this structured assignment, you must first read: Ng, K.Y.A., Koo, A.C. & Pallis, A., 2009.
Professionalization of maritime industries and postgraduate maritime studies: A students
survey. Paper presented at the 2009 International Association of Maritime Economists
Conference in Copenhagen, Denmark from 24th 26th June. Rotterdam, Netherlands:
www.porteconomics.eu [online]. Available at:
1. Summarize briefly the information in the article about the factors that have driven the
recent development of professional master degrees, both in general, and with regard to the
maritime studies. Here, you may write up to 300 words in your summary.

2. Imagine that you are a maritime employer in a private sector maritime transportation firm
situated in your home country. Your organisation is in need of more highly qualified middle
managers, and you know of a Master Mariner, who has worked for your company and
gradually advanced through its hierarchy for some 10 years and is also perceived to have
shown above-average performance on the job and loyalty to your firm. This person has
also demonstrated a broad interest for developing the shore-based ship management and
other business activities to the benefit of the firm, yet has indicated interest in moving to a
shore-based job and possibly also taking part in a part-time post-graduate maritime study
program, so that he understands all fundamental economic and business administration
matters of the maritime transport sector. Discuss on this basis whether it could be a good
idea for your firm to contribute by paying the majority of his educational expenses for
participation in such a study program and, if so, under which conditions this should occur.
In your answer, you may also take local labour market and educational market and
financing practices into account. Here, you may write up to 500 words in your answer to
this question. If you include external references, you must list them; they do not count up
to the 500 word limit.

3. List any key differences that you find in the article between (a) the group of East Asian
students and (b) the group of European students concerning motivations for taking part in
such study programs, the issues considered when the students chose to pursue studies in
the program, the channels through which the students sought to or found information
about the study programs and the descriptions provided by the students of their
experiences in these programs. Here, you may write up to 700 words in your answer to
this question.

4. Imagine that you are a leading HR manager in a major logistics firm situated in Europe.
You have been invited to provide inputs on the improvement of European part-time
maritime professional degrees for a specific European university that offers such a
program. Based on the information in this article, which improvements would you suggest
and why? Here, you may also write up to 700 words in your answer.

83

5. Investing in education and training at home and abroad, with focus on MET in
economics of transition and developing countries
5.1 Introduction
Due to the current global lack of seafaring officers and the unfavourable age structure of the
current global labour force of seafaring officers, as discussed in Module 3s Subsection 2.3.5,
as well as the current global lack of finance for MET, which as indicated in this modules
Subsection 4.2, especially hits institutions that seek to offer MET in middle income and
developing countries hard, we turn now to the final issue in this chapter: The discussion of the
circumstances under which a maritime employer of seafaring labour might fruitfully choose to
co-finance MET, either alone or as part of a joint effort of an industry organisation, and, if so,
which criteria this maritime employer should focus on in choosing a supply country and in
either selecting an existing MET institution with whom to cooperate or choosing to found a new
MET institution.
Concerning joint efforts by shiping industry stakeholder organisations, the Japanese (Amante,
2007) and Norwegian Shipowners Association initiatives (see Norwegian Shipowners
Association 2010a & b) to co-finance maritime education are probably the best-known
shipowners association initiatives; here, the Norwegian Shipowners Association runs the NSA
Global Competence Program which currently supports a number of training initiatives in Brazil,
China, Russia, the Philippines and Vietnam, whereas the Japanese Shipowners Association
cooperates with the Japanese International Development Agency concerning MET in countries
such as the Philippines, Vietnam and Egypt (Amante, 2007; JICA, 2000). However, also other
national shipowners associations such as the Royal Association of Netherlands Shipowners
have invested through Netherlands Shipping Training Centre in maritime education at a Filipino
and a South Korean maritime academy (see Netherlands Shipping Training Centre, 2010).
Moreover, the international employers association The International Maritime Employers
Committee (IMEC), whose function and activities were described in Module 3s Subsection 5.3,
has become financially involved in seeking to upgrade training in the Philippines and elsewhere
through its International Maritime Training Trust (International Maritime Employers
Committee, 2010). Finally, in a few instances in, e.g., the Philippines and South Africa, the
national and international (ITF) maritime trade union movement has invested in MET
institutions; in South Africa, these ITF investments have also involved activities the relatively
neglected area of ensuring quality in the education of ratings (Bonnin et al., 2004; Zhao and
Amante, 2005).
Additionally, there are a lot of individual shipping industry firms who are involved in training
activities. Here, we will only mention two examples, to give an idea of the scope; thus these
examples are not to be regarded as endorsements or advertisements for specific training
programs. Firstly, the ship management company V.Ships has provided training for a total of
over 11100 cadets per May 2008 and continues to do so, also using its own training ships and
simulators in this work (Burley, 2008; V.Ships, 2010). Moreover, in addition to training own
cadets, V.Ships also focuses on upgrading the qualifications of the ratings and officers that it
employs; such supplementary training is situated in 16 locations around the globe (ibid.). The
second example is the shipping industry Stena Groups own ship management subsidiary
Northern Marine. Northern Marine has to date trained over 1000 cadets, and currently around
200 cadets are undergoing training (Northern Marine, 2010). The cadets come from the
following countries: Croatia, Grenada, India, Russia, Sweden and UK, and currently a maritime
academy is being completed in Angola, to enable the training of cadets in this country also
(Infomarine on-line, 2010; Salton, 2008). However, among the various nationalities of cadets,
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the type of degree awarded and also the length of training both on land and at sea vary, both
according to the national educational customs in the supplying countries and with
consideration for the minimum requirements of Northern Marine. This is depicted for the case
of the four labour supplying countries India, Ireland, Philippines and the UK in Table 15.
Table 15. Variations in the training programs of Northern Marines Cadets from 4
countries (based on Salton, 2008, slides 5-7)

5.2 Structured Assignment 5.21 A Comparative Examination of the Features of the
Joint Training Programs of the Dutch and Norwegian Shipowners Associations
In solving this assignment, you must compare information from the following websites,
including all sub-pages:
Netherlands Shipping Training Centre, 2010. Web pages of the Netherlands Shipping
Training Centre. Palompon, Leyte, Philippines: Netherlands Shipping Training Centre
[online]. Available at: http://www.nstc.ph/cgi/index.php?item=main (for the
perspective of the shipowners from the Netherlands)
Norwegian Maritime Foundation of the Philippines, Inc., 2010. Norwegian Training
Center Manila. Manila, Philippines: Norwegian Training Center [online web pages].
Available through the main page at: http://www.ntcm.com.ph/NTC-
M_nonflash/Index.html (concerning the offering of the Norwegian Shipowners
Association)
Norwegian Shipowners Association, 2010a. Philippines Cadet Program. Manila,
Philippines: Norwegian Training Center [online web pages]. Available through the main
page at: http://www.ntcm.com.ph/NTC-M_nonflash/NSA/nsaintro.html (also
concerning the offering of the Norwegian Shipowners Association)

1. First, compare and contrast the key features of the nautical degree programs that the
Dutch and Norwegian shipowners are involved in in the Philippines. For example: Which
elements seem to be more thorough in the one or the other and are there any omissions or
other differences that you notice? Here, you may write up to 500 words in your answer.

2. Describe the financing of nautical studies in each of these programs in terms of how much
of the tuition and living expenses are paid by (a) the student and his or her family and (b)
by the employing side, i.e. either through the shipowners association or through
association funds? Also here, you may write up to 500 words in your answer.
British & Irish Cadets Indian Cadets Filipino Cadets
Type of
degree
Vocational degree system
Higher National Diploma
Obtained
BS in Marine
Transportation or
Marine Engineering
Deck cadets have
minimum of 12 months
seatime
12 months study at AMET
University, 12 months at
Glasgow Nautical College
3 years in a MET
institution
Engineering cadets have
minimum of 6 months
seatime
15 months sea time of deck
cadets
1 year at sea
Certifi-
cates
earned
UK HND & MCA Officer of
the Watch (OOW)
cerfication
UK MCA Officer of the
Watch (OOW) cerfication
Exam gives them
OOW Deck or Engine
license
Length of
study &
seatime
85

3. Describe the criteria for recruitment of each of these programs. For example, are the
criteria explain in equal detail on both websites or does one website appear to be more
thorough than the other? Moreover, can you determine whether both programs put equally
stringent requirements on the applicants or is the one program more stringent with regard
to admission requirements? Here, you may write up to 7++ words in your answer.

4. Do either or both of the websites try to demonstrate that they represent responsible
employers to potential cadets? If so, please indicate the arguments that you find on each
website about this issue. When answering this question, you may use up to 600 words.

5. Finally, comment on the continuing education offerings for existing crew members on both
websites. Are all levels of crew members covered by such offerings on the part of both the
Norwegians and the Dutch? Do both countries offer an equal number of courses and is the
content of the courses the same? Are the Norwegian courses generally longer than the
Dutch courses or vice versa or is the length similar? In assessing these and other
differences in the continuing education offcerings, you may write up to 800 words.

5.3 Structured Assignment 5.22 Filipino Expectations concerning Japanese
Investments in MET
For this assignment, please read pp. 1-5 & 33-43 of Amante, M.S.V., 2007. Labor Dimension of
the Japan-Philippine Economic Partnership Agreement (JPEPA). [Online] Available at:
http://www.ide.go.jp/English/Publish/Download/Vrf/pdf/vrf_429.pdf via a Google search using
the article title.
1. Based on the text of these pages of this article, briefly describe the societal expectations of
the citizens to the Philippines to the efforts of Japanese shipowners to educate Filipino
seafarers, as they are presented or seem implicitly suggested in the text. In order words,
which benefits to the Filipinos expect to achieve from such investments and how do they,
for their part, seek to help the Japanese in achieving this aim? Here, you may write up to
600 words in your answer to this question.

2. Based on your reading of this text, discuss whether it is possible to deduce whether the
Japanese approach to educating and training Filipino seafarers differs from either the Dutch
or the Norwegian approaches (or both approaches), which were the subject of Structured
Assignment 5.21.

5.4 A general decision-making support model for potential investments in
maritime education and training in third countries
After having presented some of the largest and most well-known private sector investment in
MET programs in the introductory subsection 5.1 and the two structured assignments of
Subsections 5.2 and 5.3, we now move to a general presentation of certain issues which
should be discussed in relation to the overall discussion of whether a given shipping industry
actor should invest in seafaring training or not. Here, such investments are always at least
medium-term and probably also best regarded as long-term, even though of course it is also
difficult to speak of the long-term in the world of shipping due to the very volatile nature of
freight markets as well as the many new demands to maritime education and training that are
raised and discussed in, e.g, the IMO.
86

Figure 11. Four levels of issues to consider with regard to a shipping industry firm or
organisations potential investments in MET in third countries

In Figure 11, we present a general framework model, which focuses on four key aspects of
such a possible investment: (1) Should the company go for such an investment alone or
together with other industry actors, (2) Which country should be chosen for such an
investment, (3) Should existing MET institutions receive the investment money or should a
training institution be founded, and (4) to what extent should the course of education invested
in follow a pre-existing model or be specially tailored to own needs?
Having presented this overview, we turn now to discuss the specific factors in each of the four
quadrants of Figure 11. First, concerning the issue of a company effort alone versus a joint
industry effort to finance MET, for the case of smaller and medium-sized shipowners, usually
the company alone effort is precluded. However, if the shipping industry company in
question has required size to invest in MET, it is worthwhile first considering the preferences of
the host country, if it has such, unless of course the company is question is one of the very
largest ship controlling companies in the world. Here, actors such as the Government of the
Philippines (Amante, 2007) have stated that they generally prefer joint efforts by national
shipowner associations or other constellations of maritime firms. If it is the case that such a
preference has been stated by the country in question, and the individual company decided to
follow this, then the next step is to check if there might be a suitable collective organisation.
This is in many instances a real barrier, as only a few national shipowners associations invest
collectively in MET, and not all ship operating or managing companies wish to organise
themselves in organisations such as InterManager or IMEC which have common policies about
87

such investments. Here, if the company considering financing MET does not find a suited
industry organisation, it is often forced to go at it alone.
Concerning a suited industry organisation, it is also likely that the best cooperation is achieved
among the shipowners invested together through an organisation if they have similar
preferences about flag state choices, ship types (i.e. tankers versus bulkers versus container
ships, new or old ships, standard or state-of-the-art technology on the ship, size of the ships,
etc.) and requirements to crew concerning technical sophisticated, as all of these three factors
influence the expectations to the delivered MET to a great extent. However, conservely, if the
ship operators that go together to finance MET are very similar, the risk of poaching
maritime graduates from each other will be relatively large if skills are similar and at least
some of the companies will also experience difficulties in finding manpower in the first years
after the educational investment. Such poaching has the potential to ruin the collaborative
investment; however, on the other hand, on most labour markets, it is strictly forbidden to
limit the employees rights to shop around after a potential after-study commitment period has
been served. It is therefore necessary that a certain cooperative standard exists among the
firms that go together and they also seek to address the issue of possibly not achieving the
necessary numbers of needed officers in the initial years of the joint investment in a proactive
manner such as to find a solution and an anti-poaching policy that is both legal and perceived
as fair by all members of the coalition investing in education.
Finally, should it be the case that some of the shipping industry companies in the coalition
have questionable practices with regard to the treatment of either cadets or employees, this
may potentially also ruin the reputation of the joint educational project itself. It is therefore
important for the individual shipping company to consider beforehand whether its possible
educational investment cooperation partners have the necessary minimum level of adherence
to ethical and accepted HR policies before the investments are undertaken.
Turing now to square two, the country choice selection criteria, in many situations, these will
be initially investigated concurrently with the first issue of whether the company wants to go at
investment in MET alone or partner with other maritime industry companies. Here, as in other
medium- or long-term investments in a foreign country, investors will be concern about the
political and economic stabilityof the country, as problems in these areas can either, in the
worst case extreme situation, preclude the provision of MET for some time or, in the less
extreme situation, make the provision of MET much more expensive and difficult than
otherwise. Also the fundamental level of educational competence for the typical school leavers
who would come into consideration as typical applicants for cadetships should be considered. If
this level of competence is lower than in other similar countries, this will mean that the
company or companies financing the MET will have to also make up for this gap. Moreover, the
relative presence or absence of persons in the potential country with the qualifications to teach
in the maritime educational courses being planned is also a factor which should be discussed,
as if there are only a very few or no persons with such qualifications, the foreign financiers will
have to send many more ex patriot maritime instructors and also possibly some persons with
fundamental cultural and institutional knowledge of the potential host country as well.
Analyses of the general level of costs of providing education should also be conducted; here,
for certain countries, it is also to be considered that common computer and internet equipment
may be relatively more expensive to run, maintain and safeguard than would be the case in
high income countries, due to the lack of reliable sources of electricity and of reparations
personnel. In contrast, however, teachers and service staff salaries will commonly be lower.
Also related to the cost considerations are considerations about the charging of possible tuition
88

fees versus the sponsoring of free education for cadets and possibly also some living expenses
scholarships for some of them. The existing patterns of the financing of continuing education
should be studied, in relation to this issue, as well as which segments of the population are
ablel to afford such education in relation to the segments that one wishes to target with the
new MET programs.
The labour market culture should also be investigated. Here, if companies invest vastly in MET,
then they would prefer a labour market culture in which employees seek as a point of
department to maintain relationships to their employers as this would minimize the risk of
poaching. Moreover, the work ethic of the population i.e. the preference for having a salaried
job, as opposed to making a living in the informal economy should also be investigated as
should the extent to which employee and labour relations are generally harmonious. For
countries in which labour relations between employers/employers associations and unions are
generally marked by a lot of strife, including strikes and lock outs, are generally less
favourable for investments than countries where this is not the case. Moreover, concerning
relations to individual employees, countries in which excessive lawsuits or other legal rambling
are more commonly used by a segment of the workforce are also not necessarily the best
choice.
Beyond this, there should of course be as good of a match between the investors and the
coming cadets and seafarers perceptions concerning wages, benefits and working conditions as
possible. Finally, it is important to mind the perceptions of the national stakeholders. Here, for
the case of foreign investments, some domestic shipping industry operators in the country in
which one is considering investing may consider such foreign investments a threat to their own
industry, whereas other home country stakeholders may initially see the investments as
positive. Here, if there is such a division, the investing company or companies should also
make considerations as to their long-term reputation in the country. In other words: Can they
maintain the good relations to majority public opinon in the country in question, or it is
possible that they will be perceived as imposters or poachers with regard to domestic industry
needs. For the case of marine engineers, it is here also possible that not only the domestic
shiping industry may fear poaching, also possibly some domestic utility and manufacturing
companies may fear the same.
We move now to point 3 in Figure 3: the use of existing MET institutions versus the creation of
own. Here, it is obvious that the quality and the preferences of the countrys existing MET
institutions set the framework for choices in this area. However, due to the global problem of
financing of MET in developing and middle income countries (Sampson, 2004a), it is rare to
meet the MET institution that will overtly show disinterest in such investments. Thus, quality is
usually the main issue. Quality can be assessed directly, through student and former student
testimonials; however, a more indirect measure can be made through a combined analysis of
(a) whether the chosen flag states directly or indirectly recognize the qualities of the existing
MET institutions by, e.g., accepting the maritime certificates of competency from host country
in which the institution is situated and (b) the percentage of graduates from the MET
institution in question who are actually able to pass the labour supplying states certificate
examinations.
In some labour supplying states, a number of MET institutions will in principle be very
interested in cooperating with shipping industry companies concerning MET; however,
government sector bureaucracy or legal requirements may render such cooperation less
favourable to the private sector firms; this has, e.g., been a problem in some public sector
universities in India (i-maritime Consultancy Private Limited, 2008). Moreover, sometime governmental
89

mandates to such public sector MET institutions result in these MET institutions have to stipulate a large
number of inflexible contractual demands, which also are not necessarily perceived as optimal by private
sector MET investors. In these cases, it is sometimes the solution to work with private sector institutions
(ibid.). However, in some countries, working with public sector or semi-public sector institutions is
advantageous, as these institutions have a support framework which has been put in place through certain
elements of good governance in the public sector. In countries such as China, Russia, and South Africa,
there are some public sector MET institutions that benefit from such public sector support structures
(Bonnin et al, 2004; Koslova, 2007; Wu, 2004).
Similar to the need for a match between the national labour market culture and the shipping company(-ies)
culture, it is advisable that there is a suitable match between the MET institutions culture and the
company culture. Moreover, it is also worth consideration whether the current obligations of the MET
institution toward other stakeholders may present a problem in relation to further MET cooperation with a
new financing stakeholder. Here, the issue of the domestic shipping industry fearing being side-tracked may
also surface; however, in some instances, it is also advisable to avoid entering into MET cooperation with
an instution if this institution cooperates with a competitor whom one does not trust with regard to, e.g.,
HR practices or ethical competitive practices.
Finally, concerning costs, it is important to consider the life cycle, opportunity and sunk costs profiles of
working with an existing MET institution versus creating ones own MET institution. Here, typically, the
initial investment costs will be larger, if one establishes an own institution; however, if one takes the
lifecycle perspective, this difference may be nullified, if the existing institutions are less effective in their
administration or output costs. Concerning opportunity costs, on some markets, there are only a few well-
educated secondary school leavers at the current point in time who might come into consideration as
potential cadets. Here, if one does not make an optimal offer, another shipping stakeholder make indeed
seize the chance and thus preclude later entry of other shipping stakeholders. Finally, from a sunk cost
analysis, it is usually the case that the own establishment entails by far the largest sunk costs, which also is
the reason why the own establishment of a new school is often more generally perceived as the higher risk
alternative.
We move now to the final square in Figure 11. Here, the issue is whether the new MET should be tailored
specifically to own needs or follow a prearranged scheme. Here a key issue is the shipping segment which
one is in, for for the case of, e.g, tanker ships, there are generally much stricter own industry requirements
from, e.g., the vetting system, the oil and chemical producers and their interest organisations, and the
marine insurers, due to the high sums of pollution damages that have to be paid in the event of a maritime
accident in which oil or a hazardous or noxious substance is spilled from a tanker ship. Conversely, for
operators in specialised shipping segments, like the project shipping segment, it may be that current
general MET programs do not serve the needs of the segment optimally and there thus is more space for
creating innovations in the educational program. Here, also, for almost all segments, if the ship operator
wishing to invest in education is a lead user concerning new technology and implementing of new
management practices, this same ship operator will also probably benefit more from a more innovative
curriculum. Here, however, the curriculum must still be very well-founded; thus in this case, an analysis of
the sufficiency of the companys contacts with leading MET developers is also in order.
Concerning cost issues, it is usually costly to develop novel courses, additions to courses or ways of
teaching. Thus the costs must first be analysed as a potential financing barrier, but also from a cost-benefit
analysis. In the cost-benefit analysis it is also worth considering that if the company plans to then mainly
90

use the seafarers that it educates itself, due to their unique qualifications, this same company will then be
cutting itself off from other portions of the labour market. Here, this could render the company vulnerable,
if these same seafarers realize their extraordinary worth to this company and then make extraordinarily
high high and benefit demands.
Finally, it has to be remembered that all educational innovations still have to meet the indirect approval of
flag and labour supplying states in that the educated seafarers still have to pass the national certification
examinations in the labour supplying state, which then are assessed as being sufficient by the flag states,
when they make decisions about which certificates from which labour supplying states they should accept.
There is usually not a realy quality problem for those companies that have educational investment
ambitions, to the contrast. However, here, the issue of bureaucracy and documentation, especially toward
the labour supplying states maritime administration, may surface.
Based on the above, there are a huge number of factors which influence the decision of how to invest in
MET and, if so, in which way. The above checklist is very exhaustive, and unfortunately, usually most
investors find that they cannot find an exact match to their needs, so that have to make compromises and
experiment by trial and error as well. Here, however, the framework presented in Figure 11 should
heighten the discussion and help to structure it, so that the overview over many important issues is not lost
during the course of the complicated negotiations and considerations about this issue.

6. CONCLUSION TO MODULE 5
Through the completion of this Module, you have learned about personnel selection, retention
and career planning in the maritime transport and ports sectors. Beyond this, you have
learned about planning and investment in education and training. Section 1 dealt with
variations in selection processes and legislation for shore and ship-based positions, whereas
the theme of section 2 was assessing personal and professional qualifications, including
psychological, cognitive and skills tests. In section 3, employee retention and career planning
plans were discussed for the case of port workers, seafarers and shore-based employees,
whereas section 4 dealt with planning education and training. Finally, for the specific case of
seafarers, investing in maritime education and training for seafarers at home and abroad was
the focus on Section 5, and here focus was especially placed on MET in economies of transition
and developing countries.
The organisation, economic and sociological considerations about personnel selection,
retention, career planning and investment in education and training were supplemented by
structured assignments which took their points of departure in local circumstances in many
different countries around the world as well as global labour market and educational market
issues. Each assignment was connected to external textual readings, most of which were
written by stakeholders or academics who presented the viewpoints of stakeholders in real-life
situations. Thus based on the completion of this module, you should have a solid overall
understanding of these issues. However, in specific job-related situations, it may be necessary
to work with navigation and marine engineering experts to assess the quality of seafarers or
maritime education and training from specific countries. Similarly you may need to consult
lawyers, economists and accounting experts concerning firm-specific policies and cost and
91

efficiency calculations with regard to policies and investments and policies in personnel
selection, retention, career planning and education.
Should you have questions on the unit, please contact the course instructor or the author,
Maria Anne Wagtmann, PhD at mariaannewagtmann@yahoo.com.
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