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12HRMintheLocalContext:KnowingWhenandHowtoAdaptLearningObjectives(1of3)HaveabasicunderstandinghowthenationalcontextaffectsHRMpractices.Describehowrecruitmentandselectionpracticesdifferamongnationalcontexts.Identifypossiblehostadaptationsinrecruitmentandselectionpracticesforamultinationalcompany.Explainhowtraininganddevelopmenttechniquesareusedindifferentcountries.LearningObjectives(2of3)Namesourcesofhigh-qualityworkersindifferentnations.Understandhowtrainingmustbeadaptedtohostcountryworkers.Identifyhowperformanceevaluationandcompensationpracticesdifferinvariousnationalcontexts.LearningObjectives(3of3)Discusspossiblehostcountryadaptationsinperformanceevaluationandcompensationpracticesforamultinationalcompany.Understandhowlaborcostsvaryamongnations.Appreciatehowthenationalcontextandhistoricalconditionsaffecttherelationshipbetweenmanagementandlaborindifferentcountries.KeyQuestionsRegardingLocalEmployeesHowcanweidentifytalentedlocalemployees?Howcanweattracttheseemployeestoapplyforjobs?Canweuseourhomecountry’strainingmethodswithlocalemployees?Whattypesofappraisalmethodsarecustomary?Whattypesofrewardsdolocalpeoplevalue?Doanylocallawsaffectstaffing,compensation,andtrainingdecisions?WhyDoNationsDifferinHRM?(1of2)Becauseofthenationalcontext:NationalcultureandsocialinstitutionsinfluencehowmanagersmakedecisionsregardingstrategiesCountriesvarywidelywithregardstosocialinstitutionsandnationalcultureMultinationalsmustselectandimplementpracticesthatmeetnationalcontext.Exhibit12.1:

HowtheNationalContextLeadstoNationalDifferencesinLocalHRMPracticesWhyDoNationsDifferinHRM?(2of2)Becauseoftheresourcepool:allthehumanandphysicalresourcesavailableinacountryIncludesqualityoflabor,availabilityofscientificlaboratories,andsourcesoffuelArisesfrombothfromnaturalandinducedfactorconditionsUniquetoeachcountryKeyFactorsthatInfluence

theResourcePoolThequality,quantity,andaccessibilityofrawmaterialThequantity,quality,andcostofpersonnelavailableThescientific,technical,andmarket-relatedknowledgeavailabletofirmsThecostandamountofcapitalavailabletofirmsforoperationsandexpansionThetype,quality,andcostsofsupportinginstitutionssuchasthesystemsofcommunication,education,andtransportationNationalFactorConditions:NaturalandInducedNaturalFactorConditions:nationalresourcesthatoccurnaturally.E.g.,abundantwatersupplyInduced-FactorConditions:nationalresourcescreatedbyanation.E.g.,superioreducationalsystemCharacteristicsoftheNationalContextThatAffectHRMEducationandtrainingofthelaborpoolLawsandculturalexpectationsofselectionpracticesTypesofjobsfavoredbyapplicantsLawsandculturalexpectationsregardingfairwagesandpromotioncriteriaLawsandtraditionsregardinglaborpracticesRecruitmentThemajorstepsinrecruitmentManagersdeterminethatjobsareavailableEmployersdeterminethetypesofpeopleandskillsthatarenecessaryforthejobEmployersgenerateapoolofapplicantsforthejobExhibit12.2:

StepsintheRecruitingProcessRecruitmentStrategiesWalk-insorunsolicitedapplicationsAdvertisementsplacedinnewspaperorontheInternetCompanyWebsitejobpostingsInternaljobpostingsPublicandprivatepersonnelagenciesPlacementservicesofeducationalinstitutionsCurrentemployeerecommendationsRecruitmentintheU.S.U.S.managers:Tendtoseeonlineorprintadvertisingasoneofthemosteffectiverecruitmentmethods.FearemployeereferralsresultintherecruitmentofpeoplewithsimilarbackgroundsFearthatrecruitmentbypersonalcontactsmayresultinbiasesagainstsomegroups.Openandpublicadvertisementsarethemosteffective,reflectiveofindividualisticU.S.culture.Exhibit12.3:

MostEffectiveRecruitingSourcesforU.S.CompaniesRecruitmentin

CollectivistCountriesWhiletheU.S.favorsopenformsofrecruitment,recruitmentincollectivistsocietiestendstofocusonthein-group,suchasthefamilyandfriendsofcurrentemployees.BackdoorRecruitment:prospectiveemployeesarefriendsorrelativesofthosealreadyemployedManagersarerecruitedfromprestigiousuniversities.RecruitmentAroundtheWorld(1of2)Notonlycompaniesbutindividualshaverecruitmentpreferencesbasedonnationalculture&socialinstitutions.Lookingforjobsthroughpublicvs.privateagencies:Individualsinformercommunistandsocialistsocietiesweremorelikelytorelyonpublicagencies.Individualsinmoreindividualisticsocietiesusedprivateagencies.RecruitmentAroundtheWorld(2of2)Postingadsandrespondingtoads:Bothareverypublicformsofrecruitment.Individualisticsocietiesandegalitarian(low-masculinity)societiesprefersuchforms.Applicantsapplydirectly.IndividualsinSocialistsocietiesandformercommunistcountriesprefertotalktofriends,relativesandotherconnectionstofindajob.Exhibit12.4:

PreferredWaystoLookforaNewJob:Publicvs.PrivateAgencyExhibit12.5:

PreferredWaystoLookforaNewJob:AnsweredAdsvs.AdvertisedExhibit12.6:

PreferredWaystoLookforaNewJob:Applyvs.Friends&FamilySelectionintheU.S.Gatherinformationonacandidate’sjobqualificationsFindamatchbetweenthecandidate’sskillsandthejobrequirements.Thefocusisontheindividual’sachievementsratherthangroupaffiliations.ManyfirmsprohibitNepotism,thehiringofrelatives.Manyalsoprohibitmanagersfromsupervisingfamilymembers.Exhibit12.7:

StepsinU.S.PersonnelSelectionSelectionin

CollectivistCulturesHiringalwaystakesthein-groupintoaccount.Preferenceisgiventohiringrelativesoffirst,theemployer,thenrelativesofemployees.Thisselectionvaluespotentialtrustworthiness,reliability,andloyaltyoverperformance-relatedbackground.Highschoolanduniversitytiesmaysubstituteforfamilymembership.ImplicationsfortheMultinational:RecruitmentandSelectionRecruitmentandselectionofhostcountryworkersrequiresthatmanagersofMNCsunderstandandadapttolocalpractices.Iflocalnormsarenotfollowed,theMNCmaynotgetthebestemployees,andmayoffendculturalnormsorbreakhostcountrylaws.ManyfirmsnowusingElectronicHumanResources(eHR).TrainingandDevelopmentWithinacountry,theneedfortraininganddevelopmentvarieswidelyindustry,technology,etc.,butbroadnationaldifferencesexist.Differencesintraininganddevelopmentaredueto:DifferencesineducationalsystemsEmphasisontrainingplacedbynationalgovernmentsCulturalvaluesregardingotherpersonnelpracticesExhibit12.8:

TrainingSystemsaroundtheWorldExhibit12.9:

Training&Development

inSelectedCountriesTrainingandDevelopment

intheU.S.Companieswithover100employeesinvestmorethan$60billionintrainingcosts.Managementdevelopmentandcomputerskillsarethemostpopular.ThereisgrowingpressureonU.S.businessestosupplementbasiceducationaltraining.Thetransitiontoaservicesectoreconomymeanstheneedforspecializedskillstrainingwillincrease.Exhibit12.10:

SkillsTaughtbyU.S.OrganizationTrainingandVocationalEducationinGermanyAsophisticatedandstandardizednationalsystemprovidestwomajorformsofvocationaleducation:GeneralandspecializedvocationalschoolsandprofessionalandtechnicalcollegesDualsystem:Acombinationofin-houseapprenticeshiptrainingwithpart-timevocational-schooltrainingleadstoaskilledworkercertificate.Withadvancedtraining,onecanachievethestatusofMeister:amastertechnician.TheGermanDualSystemStemsfromcollaborationamongemployers,unions,andthestateCostsaresharedbetweencompaniesandthestate.Employershaveanobligationtoreleaseemployeesfortraining.Producesawell-trainednationallaborforcewithskillsthatarenotcompanyspecificDualSystemunderstressduetoeconomicdownturnExhibit12.11:

Germany’sApprenticeshipProgramunderPressureImplicationsfortheMultinational:TrainingandDevelopmentBeforeoperatinginahostforeigncountry,multinationalmanagersmust:ConsiderthequalityofworkersandmanagersthereExaminethefeasibilityofexportingtrainingtothemAdaptationofmanagement-developmenttodifferentnationalcontextsdependsonintendeduseofhostcountrymanagers.PerformanceAppraisalPerformanceAppraisal:Identifyingpeopletoreward,promote,demote,develop&improve,orterminateNoteveryonecanmoveupthecorporateladder.AssumptioninindividualisticculturesisthatperformanceappraisalsystemsproviderationalandfairsolutionstotheseHRproblems.PerformanceAppraisal

intheU.S.U.S.systemvalueslinksamongindividualrights,dutiesandrewards,andequalopportunity.TheidealU.S.systemisrational,logicalandlegal.Suchsystemshavefourelements:PerformancestandardsPerformancemeasuresPerformancefeedbackHumanresourcedecisionsPerformanceAppraisalAroundtheWorld(1of3)Australia,CanadaandtheUnitedStatesThese3areamongthetopfivecountriesforallperformance-appraisalpurposes.Veryhighonindividualism,withheavyemphasisontheindividualdevelopmentoftheemployeePerformanceappraisalsareseenasthemosteffectivemethodtogaugehowwellanemployeeisdoingandhowtheirperformancecanbeimproved.Exhibit12.12:

Cross-NationalDifferencesinPurposesofPerformanceAppraisalsPerformanceAppraisalAroundtheWorld(2of3)TaiwanandLatinAmericaAlsofigureprominentlyonthelistPossibleeffectsofsocialinstitutionssuchasgovernmentandtradeagreementsMaybeemulatingWestern-basedsystemsbecauseofadesiretosatisfytradeagreementsandothercompetitivenessrequirementsPerformanceAppraisalAroundtheWorld(3of3)InCollectivistSocieties,performanceappraisalsmaynotbeasimportant:Ageandin-groupmembershipsprovidealargecomponentofthepsychologicalcontractwiththeorganization.Humanresourcedecisionstakeintoaccountpersonalbackgroundcharacteristicsmorethanachievement.Managersindirectlysanctionpoorperformance,andoftenavoiddirectperformanceappraisalfeedback.CompensationCompensation:includeswagesandsalaries,incentivessuchasbonuses,andbenefitssuchasretirementcontributions.Therearewidevariationsamongcountriesandorganizationsonhowtocompensateworkers.Acountry’seconomicdevelopment,culturaltraditions,laborunions,andlegalinstitutionsallaffectcompensation.CompensationintheU.S.IntheU.S.,wagesandsalariesdifferbasedontwomajorfactors:External:includeslocalandnationalwagerates,governmentlegislation,andcollectivebargainingInternal:includestheimportanceofthejobtotheorganization,itsaffluenceanditsabilitytopay,andtheemployee’srelativeworthtothebusiness94%offirmsusecomparativewagedatatodeterminecompensation.CompensationAroundtheWorld:AStudyof10CountriesManagersofallcountriesandregionsbelieved:Payincentivesshouldbeimportant.Payshouldbecontingentongroupperformance.Payshouldbecontingentoncompanyperformance.Incentivesshouldbeasignificantamountofpay.Jobperformancesshouldbethebasisofpayraises.Benefitsshouldbeimportant.Benefitsshouldbemoregenerous.Payshouldbebasedonlong-termresults.CompensationinJapan(1of2)LikeU.S.firms,Japanesefirmsdeterminebasesalarieslargelybyclassificationofpositions.Seniorityhastwoeffects:Eachpositionhasminimumagerequirementsinadditiontoeducationalrequirements.Astheemployeegainsseniority,eligibletomoveup.Seniorityfactorsintopaydecisions,butatadecliningrate,diminishingafterage45.CompensationinJapan(2of2)Morerecently,theJapaneseviewofmeritaffectspay,amajorshift.EconomicpressureshaveledtoadoptionoftheNenpoSystem,anevaluationbasedonyearlyperformanceevaluationsthatemphasizegoals.Bonussystem:Workersoftenreceiveasmuchas30%ofbasesalary,usuallygiventwiceayear,duringtraditionalgiftgivingseasons.Exhibit12.13:

TheJapanesePayRaiseFormula:ChangingtheBalanceImplicationsfortheMultinational:PerformanceEvaluationandCompensationMultinationalcompaniesmustmatchtheirperformanceevaluationsystemtotheirmultinationalstrategies.Ifamultinationalislocatedinmanynations,itmayneedseveraldifferentcompensationpackagesforhostcountrynationals.MultinationalsseekinglocationadvantagesinwagesmayconsiderEasternEuropeandIndia.AComparativeViewof

LaborRelationsVariationsoflaborrelationsarisefromculturaldifferences,butalso:HistoricalfactorsIdeologicalreasonsManagementviewsofunionsUnion-MembershipDensityUnion-MemberDensityistheproportionofworkersinacountrywhobelongtounions.IntheU.S.,unionmembershiphasdeclinedconsiderablyoverthepast30years.Unionmembershipinindustrializedcountriesgenerallyaveragesover50%.InSouthAfricawiththeopeningofunionstotheformerlybarredblackpopulation,membershiphasmorethandoubledinsize.Exhibit12.14:

UnionDensity,SelectedCountriesHistoricaland

InstitutionalDifferencesBritainUnionsdevelopedwithoutgovernmentinterference.Lackofgovernmentinterventionledmanagementandworkerstodevelopstrongadversarialrelationshipsthatremaininexistencetoday.GermanyLaborrelationsareformalized,legalistic,andlow-conflictwithcentralizedbargainingamongunionsandcorporations;governmentisanintermediary.Historicaland

InstitutionalDifferencesFrenchUnionsbeganlate,anddevelopedslowly.ThelackoflegalprotectionofFrenchworkersanddifficultiesofunionizationledtohighlymilitantunions,somewithideologicalorientations.U.S.Legalprotectionforunionspassedin1935.Unions

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