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HRM in the Local Context: Knowing When and How to Adapt

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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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slide1

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?
  • 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
  • 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
  • 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?
  • 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
  • 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
  • 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
recruitment in the u s
Recruitment in the U.S.
  • 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
  • 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
  • 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.)
  • 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.
  • 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
  • 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
  • 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.
  • 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.
training and development in germany
Training and Development in Germany
  • 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
  • Stems from collaboration among employers, unions, and the state
  • Costs shared between companies and state
  • Employers have obligation to release employees for training
training and development in the u s1
Training and Development in the U.S.
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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(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
  • Managers work indirectly to sanction poor performance
  • Often avoid direct performance appraisal feedback
compensation
Compensation
  • 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.
  • 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
  • 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)
  • 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
  • Patterns of labor relations depend on:
    • Historical factors
    • Ideology reasons
    • Management views of unions
union membership density
Union-Membership Density
  • 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
  • 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
  • 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.)
  • 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
  • Must deal with local labor practices
  • A factor in location choice
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