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11. HRM in the Local Context: Knowing When and How to Adapt. Learning Objectives. Understanding how the national context affects HRM practices Identify how recruitment and selection practices differ in various national contexts

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11

HRM in the Local Context:

Knowing When and How to Adapt


Learning objectives
Learning Objectives

  • Understanding how the national context affects HRM practices

  • Identify how recruitment and selection practices differ in various national contexts

  • Identify possible host adaptations in recruitment and selection practices


Learning objectives1
Learning Objectives

  • Identify how training and development techniques are used in different countries

  • Identify sources of high-quality workers in different nations

  • Understand how training must be adapted to host country workers

  • Identify how performance evaluation and compensation practices differ in various national contexts


Learning objectives2
Learning Objectives

  • Identify possible host country adaptations in performance evaluation and compensation practices for a multinational company

  • Understand how labor costs vary

  • Have an appreciation of how the national context and historical conditions affect the relationship of management and labor


Why do nations differ in hrm
Why Do Nations Differ in HRM?

  • Because of the national context

    • National culture and social institutions influence how managers make decisions regarding strategies

  • Countries vary widely with regards to social institutions and national culture

    • Multinationals must select and implement practices that meet national context



Why do nations differ in hrm1
Why Do Nations Differ in HRM? Differences in Local HRM Practices

  • Resource pool: all the human and physical resources available in a country

    • Both from natural and induced factor conditions

    • Include quality of labor, availability of scientific laboratories


Key factors that influence the resource pool
Key Factors that Influence the Resource Pool Differences in Local HRM Practices

  • The quality, quantity, and accessibility of raw material

  • The quantity, quality, and cost of personnel available

  • The scientific, technical, and market-related knowledge available to firms


Resource pool
Resource Pool Differences in Local HRM Practices

  • The cost and amount of capital available to firms for operations and expansion

  • The type, quality, and costs of supporting institutions such as the systems of communication, education, and transportation


Why do nations differ in hrm2
Why Do Nations Differ in HRM? Differences in Local HRM Practices

  • Natural factor conditions: national resources that occur naturally

    • E.g., abundant water supply

  • Induced-factor conditions: national resources created by a nation

    • E.g., superior educational system


Characteristics of the national context that affect hrm
Characteristics of the National Context That Affect HRM Differences in Local HRM Practices

  • Education and training of the labor pool

  • Laws and cultural expectations for selection practices

  • Types of jobs favored by applicants

  • Laws and cultural expectations regarding fair wages and promotion criteria

  • Laws and traditions regarding labor practices


Recruitment strategies
Recruitment Strategies Differences in Local HRM Practices

  • Walk-ins or unsolicited applications

  • Newspaper or Internet advertisement

  • Company Web site job posting

  • Internal job postings

  • Public and private personnel agencies

  • Placement services of educational institutions

  • Current employee recommendations


Exhibit 11 2 steps in the recruiting process
Exhibit 11.2: Steps in the Recruiting Process Differences in Local HRM Practices


Recruitment in the u s
Recruitment in the U.S. Differences in Local HRM Practices

  • U.S. managers tend to see newspapers as one of the most effective recruitment methods.

  • Fear that recruitment by personal contacts may result in bias against some groups.

  • U.S. value open and public advertisements as a reflection of individualistic culture.



Recruitment in korea
Recruitment in Korea Companies

  • Backdoor recruitment: prospective employees are friends or relatives of those already employed

  • Managers are recruited from prestigious universities


Recruitment around the world
Recruitment Around the World Companies

  • Individuals around the world have preferred way to find jobs

  • International Social Survey Program data was analyzed

  • Looking for jobs through public vs. private agencies

    • Individuals in former communist and socialist societies were more likely to rely on public agencies


Recruitment around the world cont
Recruitment Around the World (cont.) Companies

  • Advertising in newspapers and responding to newspaper ads

    • Both very public forms of recruitment

    • Individualistic societies have higher preference for such forms

  • Apply directly versus asking friends/relatives for job

    • Individualistic and high femininity societies more likely to favor direct application

    • Socialist societies rely on asking friends/relatives





Selection in the u s
Selection in the U.S. vs. Private Agency

  • Job qualifications

  • Match skills and job requirements

  • Individual achievements

  • Prohibitions against nepotism—the hiring of relatives

  • Forbidding managers to supervise family members



Selection in collectivist cultures
Selection in Collectivist Cultures vs. Private Agency

  • Based on the in-group

  • Preference for family

  • Value potential trustworthiness, reliability, and loyalty over performance-related background

  • High school and university ties substitute for family membership


Implications for the multinational recruitment and selection
Implications for the Multinational: Recruitment and Selection

  • Managers must follow local norms to get best workers

  • Often a tradeoff between home practices and costs of following local traditions


Training and development
Training and Development Selection

  • Need for training and development varies by country

  • Differences in training and development due to

    • Differences in educational systems

    • Values regarding educational credentials

    • Cultural values regarding other personnel practices



Exhibit 11 9 key specific training and development characteristics of selected countries
Exhibit 11.9: Key Specific Training and Development Characteristics of Selected Countries


Exhibit 11 9 key specific training and development characteristics of selected countries1
Exhibit 11.9: Key Specific Training and Development Characteristics of Selected Countries


Exhibit 11 9 key specific training and development characteristics of selected countries2
Exhibit 11.9: Key Specific Training and Development Characteristics of Selected Countries


Exhibit 11 9 key specific training and development characteristics of selected countries3
Exhibit 11.9: Key Specific Training and Development Characteristics of Selected Countries


Exhibit 11 9 key specific training and development characteristics of selected countries4
Exhibit 11.9: Key Specific Training and Development Characteristics of Selected Countries


Training and development in the u s
Training and Development in the U.S. Characteristics of Selected Countries

  • Companies with over 100 employees invest more than $60 billion in training costs.

  • Management development and computer skills are the most popular.

  • There is growing pressure for training as the U.S. shifts to the service sectors.


Exhibit 11 10 skills taught by u s organization
Exhibit 11.10: Skills Taught by U.S. Organization Characteristics of Selected Countries


Training and development in germany
Training and Development in Germany Characteristics of Selected Countries

  • Two major forms of vocational education

  • General and specialized vocational schools and professional and technical colleges

  • Dual system: combination of in-house apprenticeship training with part-time vocational-school training, and leads to a skilled certificate

    • Meister: a master technician


German dual system
German Dual System Characteristics of Selected Countries

  • Stems from collaboration among employers, unions, and the state

  • Costs shared between companies and state

  • Employers have obligation to release employees for training


Exhibit 11 11 skilled worker training in germany
Exhibit 11.11: Skilled Worker Training in Germany Characteristics of Selected Countries



Training and development in the u s1
Training and Development in the U.S. Pressure

  • Senior level managers often identify managerial potential

  • Appraisals of managerial readiness based on

    • Assessment centers

    • Mentoring

    • “Fast track” careers

  • Remains the responsibility of the individual


Training and development in japan
Training and Development in Japan Pressure

  • Permanent employment

  • Recruitment directly from universities

  • Join the company as a group

  • Selected on personal qualities that fit the corporate culture

  • Similar pay and promotion for first ten years—age seniority

  • Informal recognition of those high performing managers


Training and development in japan1
Training and Development in Japan Pressure

  • Shifting social institutions: pressures for change

    • Asahi ties promotions to evaluations

    • Matsushita uses merit pay for managers

    • Honda is phasing out seniority


Implications for the multinational training and development
Implications for the Multinational: Training and Development Pressure

  • Examine feasibility of exporting training

  • IHRM orientation affects training needs of local managers

  • Locations advantages


Exhibit 11 13 workers of the future student math and science scores from selected countries
Exhibit 11.13: Workers of the Future: Student Math and Science Scores from Selected Countries


Performance appraisal
Performance Appraisal Science Scores from Selected Countries

  • Identifying people to reward, promote, demote, develop and improve, retain, or fire

  • Not everyone can climb the corporate ladder

  • Need to assess how employees perform


U s performance appraisal
U.S. Performance Appraisal Science Scores from Selected Countries

  • U.S. legal requirements regulate performance evaluation practices to ensure their fairness

  • Performance evaluations must relate clearly to the job and performance

  • Performance standards must be provided in writing

  • Supervisors must be able to measure the behaviors they rate


U s performance appraisal cont
U.S. Performance Appraisal Science Scores from Selected Countries(cont.)

  • Supervisors must be trained to use evaluation measures

  • Supervisors and subordinates must discuss appraisals openly

  • Appeals procedures must be in place


Performance appraisal in collectivist cultures
Performance Appraisal in Collectivist Cultures Science Scores from Selected Countries

  • Managers work indirectly to sanction poor performance

  • Often avoid direct performance appraisal feedback



Compensation
Compensation Performance Appraisals

  • Wages and salaries, incentives such as bonuses, and benefits such as retirement contributions

  • Wide variations on how to compensate workers


Compensation in the u s
Compensation in the U.S. Performance Appraisals

  • Wages and salaries differ based on two major factors

    • External: include local and national wage rates, government legislation, and collective bargaining

    • Internal: include the importance of the job to the organization, its ability to pay, and the employee’s relative worth to the business


Compensation japan
Compensation: Japan Performance Appraisals

  • Traditional approach

    • Base salaries on positions

    • Skill and educational requirements

    • Age

    • Marital status and family size may count

    • Bonus system: employees often receive up to 30% of their base salary during traditional gift-giving seasons


New merit japanese style
New Merit (Japanese style) Performance Appraisals

  • Can affect pay raises to a greater degree than traditional position/seniority system

  • Nenpo system: based on yearly performance evaluations that emphasize goals

    • Although goals are not always the same as in Western companies

  • Stresses attitudes as much as performance



Implications for the multinational performance evaluation and compensation
Implications for the Multinational: Performance Evaluation and Compensation

  • Match HRM orientation

  • Seek location advantages in wages



A comparative view of labor relations
A Comparative View of Labor Relations Selected Countries

  • Patterns of labor relations depend on:

    • Historical factors

    • Ideology reasons

    • Management views of unions


Union membership density
Union-Membership Density Selected Countries

  • Proportion of workers in a country who belong to unions

    • Germany: estimated 40% belonged to trade unions

    • U.S.: 14.2% of nonagricultural workforce

    • Denmark: over 80% unionized

    • Great Britain: approximate 50% unionized



Historical and institutional differences germany
Historical and Institutional Differences: Germany Selected Countries

  • Germany

    • Formalized, legalistic, and low-conflict bargaining between unions and large corporations

  • French

    • Militant/strong ideologies

  • U.S.

    • “Bread and butter” issues: wages, benefits, and working conditions


Union structures
Union Structures Selected Countries

  • Enterprise union: represents all people in one organization, regardless of occupation or location

  • Craft union: represents people from one occupational group, such as plumbers

  • Industrial union: represents all people in a particular industry, regardless of occupational type


Union structures cont
Union Structures (cont.) Selected Countries

  • Local union: represents one occupational group in one company

  • Ideological union: represents all types of workers based on some particular ideology or religious orientation

  • White collar or professional union: represents particular occupational group, similar to craft union



Implications for the multinational the search for harmony
Implications for the Multinational: The Search for Harmony Selected Countries

  • Must deal with local labor practices

  • A factor in location choice


Exhibit 11 21 who gets along
Exhibit 11.21: Who Gets Along? Selected Countries


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