CHAPTER 9: HRM in the Local Context: Knowing When and How to Adapt -…
CHAPTER 9: HRM in the Local Context:
Knowing When and How to Adapt
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.
all the human and physical resources available in a country
Both from natural and induced factor conditions
abundant water supply.
superior educational system
Characteristics of the National Context That Affect HRM
Education and training of the labor pool
Laws and cultural expectations of selection practices
Types of jobs favored by applicants
Laws and cultural expectation regarding fair wages and promotion criteria
Laws and traditions regarding labor practices
The major steps in recruitment:
Employers determine the types of people and skills that are necessary for the job.
Employers generate a pool of applicants for the job.
Managers determine that jobs are available.
Steps in the Recruiting Process
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 Around the World
Advertising in newspapers and responding to newspaper ads
Apply directly versus asking friends/relatives for job
Selection in the U.S.
Match skills and job requirements
Prohibitions against nepotism
Forbidding managers to supervise family members
Selection in Collectivist Cultures
always takes the in-group into account
Preference is given to hiring relatives, first of all of the employer
value potential trustworthiness, reliability, and loyalty over performance-related background
In cases when needed skills are not available inside the family, the selection process still prioritizes personal characteristics over technical characteristics.
In Korean and Japanese culture, high school and university ties substitute for family membership.
Selection Around the World
A comparison of current selection practices in 13 countries
Differences in selection
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
Management Development in the United States
Senior level managers often identify managerial potential.
Appraisals of managerial readiness based on
“Fast track” careers
Remains the responsibility of the individual.
Management Development in Japan
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
Shifting social institutions: pressures for change
Asahi ties promotions to evaluations
Matsushita uses merit pay for managers
Honda is phasing out seniority
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.
Performance Appraisal Around the World
Australia, Canada and the United States
Very high on individualism where there is heavy emphasis on the individual development of the employee
Collectivist Societies (e.g., China, Japan, Korea, Indonesia)
Human resource decisions should take into account personal background characteristics more than achievement
Wages and salaries, incentives such as bonuses, and benefits such as retirement contributions.
Wide variations on how to compensate workers.
Compensation Around the World
Pay incentives should be important
Pay should be contingent on group performance
Pay should be contingent on organizational performance
Incentives should be a significant amount of pay
Job performances should be the basis of pay raises
Benefits should be important
Benefits should be more generous
Pay should be based on long-term results
Using seniority as a determinant of pay decision
Base salaries on positions
Skill and educational requirements
Marital status and family size may count
Bonus system: employees often receive up to 30% of their base salary
New Merit System
Can affect pay raises to a greater degree than traditional position/seniority system.
Nenpo system: based on yearly performance evaluations that emphasize goals.
Stresses attitudes as much as performance.
A Comparative View of Labor Relations
Management views of unions
Germany: estimated 40% belonged to trade unions
U.S.: 14.2% of nonagricultural workforce
Denmark: over 80% unionized
Great Britain: approximate 50% unionized
White collar or professional union
Implications for the Multinational: The Search for Harmony
Must deal with local labor practices
A factor in location choice