Culture in HRM

HRM in the local context

Ing. Alexandra Pappová
Department of international business, 4a21
[email protected]
Content
Culture – components and levels

National context – how does it influence the HRM

 Recruitment
 Selection
 Training and development
 Performance appraisal
 Compensation
 Labor relation
Culture
Pervasive and shared beliefs, norms and values that
guide everyday life
 Solutions for problems, of adaptation; how children are
educated, whom to marry; how to dress ; what to eat
 passed on to future group members through rituals,
stories and symbols (that communicate the norms,
values and beliefs of society or a group)
 Rituals – formal ceremonies (baptism, graduation)
 Stories – nursery rhymes, proverbs, traditional legends
 Symbols – may be physical (flag) or holy artefacts. In IB
– office size and location
Culture norms, values, beliefs
Culture norms – prescribe and proscribe behaviors
(should and cannot do)
Cultural values – what is good, beautiful, holy
Cultural beliefs – understanding what is true (science
vs. Religion)

Front stage of the culture – easily observable aspect

of culture
Back stage of the culture – unterstood only by its
members or insiders
Levels of culture in multinational
management
3 levels of culture that may influence multinational
operation – national culture, business culture,
occupation and organizational culture

National culture – the dominant culture within the

political boundaries of the nation-state (more than
one major culture within boundaries)
 Subcultures – regional and rural/urban culture
 Major social institutions (beliefs, education, family,
politics, law, economics)are closely intertwined with
national culture
Levels of culture in multinational
management
Business s culture - norms, values, beliefs that
pertain to all aspects of doing business in a culture
 The correct, acceptable way to conduct business in a
society
 The priorities given to seniority, women´s role, how
superiors should behave etc.
 How the employees are being selected, promoted; how
the subordinates are led and motivated; organizational
structure
Levels of culture in multinational
management
Occupational – distinct cultures of occupational
groups such as physicians, lawyers, accountants and
craftspeople
 Norms, values, beliefs and expected ways of behaving
for people in the same occupational group
Organizational culture – the norms, values and
beliefs concerning the organization shared by
members of the organization
HRM in the local context
Why do nations differ in HRM?
National context - national culture and social
institutions that influence how managers make
decisions regarding the strategies of their organization
 National culture
 Available labor other natural resources
 Characteristics of political and legal institutions
 National and business culture
 Factor conditions (resource pool)

and their combined effect on business environment

Exhibit 11.1: How the National Context Leads to
National Differences in Local HRM Practices
National context – the resource pool
All the human and physical resources available in a
country
RP is influenced by:
 The quality, quantity and accessability of raw material
 The quality, quantity and cost of personnel available
 The scientific, technical and market-related knowledge
available to firms
 The cost and amount of capital available to firms for
operations and expansion
 The type, quality and costs of supporting institution
(communication, education and transportation)
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
The impact of national context on HRM
Recruitment
Selection
Training and development
Performance appraisal
Compensation
Labor relation
1. Recruitment Strategies
Walk-ins
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.
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.

Collectivism – Responsibility, achievment and rewards

are group-based
Individualistism – to be independent; individual
responsibility for succes or failure
Exhibit 11.3: Most Effective Recruiting
Sources for U.S. Companies
Recruitment in Korea
Backdoor recruitment: prospective employees are
friends or relatives of those already employed
Managers are recruited from prestigious universities
2. 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
Exhibit 11.7: Typical Steps in U.S.
Personnel Selection
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
Managers must follow local norms to get best workers
Often a tradeoff between home practices and costs of
following local traditions
3. 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
 Government requirements towards employee´s
trainings
 Life time employment
 Cultural values regarding other personnel practices
Exhibit 11.8: Training Systems around the
World
Exhibit 11.9: Key Specific Training and Development
Characteristics of Selected Countries
Exhibit 11.9: Key Specific Training and Development
Characteristics of Selected Countries
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 (technical skills, critical thinking,
team building skills and learning abilities on the job).
Exhibit 11.10: Skills Taught by U.S.
Organization
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
 collaboration among employers, unions, and the state
 Costs shared between companies (2/3) and state
 Employers have obligation to release employees for
training
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
Permanent employment (Confucian values)
Recruitment directly from universities
Join the company as a group
Selected on personal qualities that fit the corporate
culture (hope to make long-term employment)
Similar pay and promotion for first ten years—age
seniority
Aging more expensive managerial workforce
4. 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. legal requirements regulate performance
evaluation practices to ensure their fairness
Performance appraisal system contains
 performance standards (goals, q/q of output),
 performance measures,
 feedback (interview; tell-and sell, tell-and-listen,
problem-solving )
 and HR decisions related to remuneration, promotion
or termination.
Performance evaluations must relate clearly to the job
and performance
U.S. Performance Appraisal
(cont.)
Performance standards must be provided in writing
Supervisors must be able to measure the behaviors
they rate
Supervisors must be trained to use evaluation
measures
Supervisors and subordinates must discuss appraisals
openly
Appeals procedures must be in place
5. 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.
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
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)
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
Exhibit 11.17: Labor Costs and Hours
Worked Per Week in Selected Countries
Summary - Learning Objectives
Define culture and understand basic components of
culture

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
Summary - Learning Objectives (cont.)
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
Thank you for attention

Have a nice day!