NATIONAL DIFFERENCES IN HRM: KNOWING WHEN AND HOW TO ADAPT CHAPTER 12 NATIONAL DIFFERENCES IN HRM: KNOWING WHEN AND HOW TO ADAPT

WHY TO NATIONS DIFFER IN HRM?

Exhibit 12.1 The National Context and HRM

SOCIAL INSTITUTIONS Include the family, educational, economic, and the political and legal systems Closely linked with national and business culture

THREE TYPES OF ISOMORPHISM Coercive Mimetic Normative

THE NATIONAL CONTEXT AND KEY BUSINESS PRACTICES Education and training of labor pool Laws and cultural expectations for selection practices Types of jobs favored

The national context and key business practices, continued Laws and cultural expectations of fair wage and promotion criteria Laws and traditions regarding labor relations

RESOURCE POOL The resource pool represents all the human and physical resources available in a country - both from natural and induced factor conditions

RECRUITMENT Attract qualified applicants

US RECRUITMENT STRATEGIES Open and public See Exhibit 12.3

KOREAN RECRUITMENT: A COLLECTIVIST APPROACH Backdoor School contacts

SELECTION

THE US APPROACH TO SELECTION Match skills and job requirements Universalistic criteria See Exhibit 12.4

SELECTION IN COLLECTIVIST CULTURES The in-group Preference for family Value personal characteristics High school and university ties substitute for family membership

IMPLICATIONS FOR THE MULTINATIONAL Managers must follow local norms to get best workers Often a tradeoff with benefits of home country practices

TRAINING AND DEVELOPMENT

DIFFERENCES IN TRAINING AND DEVELOPMENT Result from: differences in educational systems values regarding educational credentials cultural values regarding other personnel practices

Exhibit 12.5 shows training systems used in different countries

Exhibit 12.5 shows skills taught by U.S. organizations

VOCATIONAL EDUCATION IN GERMANY 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

MANAGEMENT DEVELOPMENT: U.S.A. Senior level managers often identify managerial potential Appraisals of managerial readiness Assessment centers Mentoring "Fast track" careers

MANAGEMENT DEVELOPMENT: TRADITIONAL 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

Management development: traditional Japanese style, continued Similar pay and promotion for first ten years - age seniority Informal recognition of those high performance managers

SHIFITING 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 Examine feasibility of exporting training IHRM orientation affects training needs of local managers Locations advantages - see Exhibit 12.9

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

U.S. PERFORMANCE APPRAISAL SYSTEM Performance standards Performance measures Performance feedback Human resources decisions Must meet legal requirements

PERFORMANCE APPRIASAL IN COLLECTIVIST CULTUES Managers work indirectly to sanction poor performance Often avoid direct performance appraisal feedback

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

COMPENSATION IN THE U.S. Wages and salaries differ based on two major factors external internal

COMPENSATION IN JAPAN: TRADITIONAL APPROACH Base salaries for positions Skill and educational requirements Age Marital status and family size may count Bonuses

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 RAISE FORMULA

EVALUATION/COMPENSTATION: Implications for the Multinational Match HRM orientation Seek location advantages in wages See Exhibit 12.12 next

A COMPARATIVE VIEW OF LABOR RELATIONS

PATTERNS OF LABOR RELATIONS DEPEND ON: Historical factors Ideology reasons Management views of unions

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 DIFFERENCES 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 STRUCTURES Enterprise Craft Industrial Local Ideological White collar/professional

IMPLICATIONS FOR THE MULTINATIONAL Must deal with local labor practices A factor in location choice - see Exhibit 12.16

EXHIBIT 12.16 WHO GETS ALONG?

CONCLUSIONS 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