WHY TO NATIONS DIFFER IN HRM?
National Context
KEY BUSINESS PRACTICESAND INDUCED FACTOR
CONDITIONS
INSTITUTIONS
NATIONAL &BUSINESSCULTURE
NATIONAL DIFFERENCES IN HRM POLICIESRecruitment
SelectionTraining and Development
Performance AppraisalCompensation
Labor Relations
Exhibit 12.1
The National Context and HRM
SOCIAL INSTITUTIONSSOCIAL INSTITUTIONS
Include the family, educational, economic, and the political and legal systems
Closely linked with national and business culture
THREE TYPES OF THREE TYPES OF ISOMORPHISMISOMORPHISM
Coercive Mimetic Normative
THE NATIONAL CONTEXT THE NATIONAL CONTEXT AND KEY BUSINESS AND KEY BUSINESS
PRACTICESPRACTICES
Education and training of labor pool
Laws and cultural expectations for selection practices
Types of jobs favored
The national context and The national context and key business practices, key business practices,
continuedcontinued
Laws and cultural expectations of fair wage and promotion criteria
Laws and traditions regarding labor relations
RESOURCE POOLRESOURCE POOL
The resource pool represents all the human and physical resources available in a country - both from natural and induced factor conditions
RECRUITMENTRECRUITMENT
Attract qualified applicants
US RECRUITMENT US RECRUITMENT STRATEGIESSTRATEGIES
Open and public See Exhibit 12.3
0 10 20 30 40 50
Newspapers
Walk-ins
Employee Referrals
Promotion from Within
Universities
State Employment Service
Private Employment Service
Percent Recruited
Office/Clerical Production/Service Professional/Technical Sales
KOREAN RECRUITMENT: A KOREAN RECRUITMENT: A COLLECTIVIST APPROACHCOLLECTIVIST APPROACH
Backdoor School contacts
SELECTIONSELECTION
THE US APPROACH TO THE US APPROACH TO SELECTIONSELECTION
Match skills and job requirements
Universalistic criteria See Exhibit 12.4
APPLICATION
INITIAL INTERVIEWS
EMPLOYMENT TESTS
REFERENCES CHECKS
PRELIMINARY SELECT ORREJECT
FINAL INTERVIEWS
HIRING DECISION
SELECTION IN COLLECTIVIST SELECTION IN COLLECTIVIST CULTURESCULTURES
The in-group Preference for family Value personal
characteristics High school and university
ties substitute for family membership
IMPLICATIONS FOR THE IMPLICATIONS FOR THE MULTINATIONALMULTINATIONAL
Managers must follow local norms to get best workers
Often a tradeoff with benefits of home country practices
TRAINING AND DEVELOPMENTTRAINING AND DEVELOPMENT
DIFFERENCES IN TRAINING DIFFERENCES IN TRAINING AND DEVELOPMENTAND DEVELOPMENT
Result from:–differences in educational systems
–values regarding educational credentials
–cultural values regarding other personnel practices
Exhibit 12.5 shows Exhibit 12.5 shows training systems used in training systems used in
different countriesdifferent countries
Type Example Countries Features and Sources of Institutional PressuresCooperative Austria, Germany,
Switzerland, and some LatinAmerican Countries
Legal and historical precedents for cooperationamong companies, unions, and the government.
Company-BasedVoluntarism/highlabor mobility
USA and the UK Lack of institutional pressures to providetraining. Companies provide training based onown cost-benefits.
Voluntarism/lowlabor mobility
Japan Low labor turnover encourages investment intraining without institutional pressure
State-DrivenIncentive Provider Hong Kong, Korea,
Singapore, Taiwan, ChinaGovernment identifies needs for skills and usesincentives to encourage companies to train inchosen areas.
Supplier Developing countries in Asiaand Africa, transitioneconomies
No institutional pressures for companies totrain. Government provides formal trainingorganizations.
Exhibit 12.5 shows skills Exhibit 12.5 shows skills taught by U.S. taught by U.S. organizationsorganizations
0% 20% 40% 60% 80% 100%
Management
Computer
Technical
Procedures
Clerical
Sales
Remedial/Basic
VOCATIONAL EDUCATION IN VOCATIONAL EDUCATION IN GERMANYGERMANY
Standardized national system = a well trained labor force
Affects over 65% of 15 to 16 year olds
Collaboration of employers, unions, and state
See Exhibit 12.6 - Dual system
DUAL SYSTEMPart-time Lower Vocational School
+In-Plant Training
SKILLED WORKERCERTIFICATE
EMPLOYMENTEXPERIENCE
COLLEGE LEVEL Vocational Training
Employment asMEISTER
MANAGEMENT MANAGEMENT DEVELOPMENT: U.S.A.DEVELOPMENT: U.S.A.
Senior level managers often identify managerial potential
Appraisals of managerial readiness
Assessment centers Mentoring "Fast track" careers
MANAGEMENT DEVELOPMENT: MANAGEMENT DEVELOPMENT: TRADITIONAL JAPANESE STYLETRADITIONAL JAPANESE STYLE
Recruits directly from universities Join the company as a group Selected on personal qualities
and fit with the corporate culture Mutual commitment of permanent
employment
Similar pay and promotion for first ten years - age seniority
Informal recognition of those high performance managers
Management development: Management development: traditional Japanese style, traditional Japanese style,
continuedcontinued
SHIFITING SOCIAL SHIFITING SOCIAL INSTITUTIONS: PRESSURES INSTITUTIONS: PRESSURES
FOR CHANGEFOR CHANGE Asahi ties promotions to
evaluations Matsushita uses merit pay
for managers Honda is phasing out
seniority
IMPLICATIONS FOR THE IMPLICATIONS FOR THE MULTINATIONALMULTINATIONAL
Examine feasibility of exporting training
IHRM orientation affects training needs of local managers
Locations advantages - see Exhibit 12.9
0 500 1000 1500
Singapore
Japan
Czech Republic
Britian
U.S.
Germany
Colombia
Math
Science
PERFORMANCE APPRAISALPERFORMANCE APPRAISAL
Identifying people to reward, promote, demote, develop and improve, retain, or fire
U.S. PERFORMANCE U.S. PERFORMANCE APPRAISAL SYSTEMAPPRAISAL SYSTEM
Performance standards Performance measures Performance feedback Human resources decisions Must meet legal
requirements
PERFORMANCE APPRIASAL IN PERFORMANCE APPRIASAL IN COLLECTIVIST CULTUESCOLLECTIVIST CULTUES
Managers work indirectly to sanction poor performance
Often avoid direct performance appraisal feedback
COMPENSATIONCOMPENSATION
Wages and salaries, incentives such as bonuses, and benefits such as retirement contributions
COMPENSATION IN THE U.S.COMPENSATION IN THE U.S.
Wages and salaries differ based on two major factors –external– internal
COMPENSATION IN JAPAN: COMPENSATION IN JAPAN: TRADITIONAL APPROACHTRADITIONAL APPROACH
Base salaries for positions Skill and educational
requirements Age Marital status and family
size may count Bonuses
NEW MERIT (Japanese style) NEW MERIT (Japanese style) Can affect pay raises to a
greater degree the traditional position/seniority system
Does not match the Western view - Nenpo
Stresses attitudes as much as performance
EX 12.10 THE JAPANESE PAY EX 12.10 THE JAPANESE PAY RAISE FORMULARAISE FORMULA
INDIVIDUAL'SBASE SALARY
RAISE
XX X =PERCENT
RAISE FOREACH
POSITION
INDIVIDUAL'SMERIT RAISE
PERCENT
SENIORITYPERCENT
EVALUATION/COMPENSTATION: EVALUATION/COMPENSTATION: Implications for the MultinationalImplications for the Multinational
Match HRM orientation Seek location advantages
in wages See Exhibit 12.12 next
Country
AverageCost of
Labor PerHour in U.S.
AverageHours
Worked PerWeek
USA 19.20 38Korea 6.71 47Sri Lanka 0.47 43Denmark 22.96 32Germany 26.18 33Greece 8.91 36Japan 20.89 36
A COMPARATIVE VIEW OF A COMPARATIVE VIEW OF LABOR RELATIONSLABOR RELATIONS
PATTERNS OF LABOR PATTERNS OF LABOR RELATIONS DEPEND ON: RELATIONS DEPEND ON:
Historical factors Ideology reasons Management views of
unions
UNION MEMBERSHIP DENSITY UNION MEMBERSHIP DENSITY
Germany: estimated 40% belonged to trade unions
U.S.A.: 14.2% nonagricultural workforce--down from a high of over 35% in the early 1940s
Denmark: over 80% unionized Great Britain: approximate 50%
unionized
SOME HISTORICAL UNION SOME HISTORICAL UNION DIFFERENCESDIFFERENCES
German–formalized, legalistic–bargaining centralized between large unions and large corporations
–works council
French--militant/strong ideologies
U.S.--"bread and butter" issues--wages, benefits, and working conditions
UNION STRUCTURESUNION STRUCTURES
Enterprise Craft Industrial Local Ideological White collar/professional
IMPLICATIONS FOR THE IMPLICATIONS FOR THE MULTINATIONALMULTINATIONAL
Must deal with local labor practices
A factor in location choice - see Exhibit 12.16
EXHIBIT 12.16 WHO GETS EXHIBIT 12.16 WHO GETS ALONG?ALONG?
0 2 4 6 8 10
Ratings of Productive Industrial Relations
Norway
Singapore
U.S.
Mexico
France
Russia
CONCLUSIONSCONCLUSIONS National context and HRM
–contrasts between individualist U.S. v. collectivist
Recruitment and selection Training and development Performance evaluation and
compensation
Unionization Implications for location
decisions
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