National Variations in Human Resource Management

Introduction

It is becoming increasingly difficult to ignore the fact that human resource management is a comprising element of any successful business. However, human resource management differs in various countries in regards to organisational behaviour and approaches to training. These two major factors have amended the positioning of human resources in a large business context. For this reason, such issues as learning and education, institutionalisation of organisational culture, industrial relations, and approaches to line management have become a central concern worldwide. Companies start finding new ways to arrange the performance of their human resources, so the current state of human resource management is changing. The following essay focuses on a discussion regarding national variations in human resource management and how they deliver a significant value to the competitiveness of such developed countries as the United Kingdom, the United States, Germany, Japan, and China.

Key Arguments

To speak about human resources in a broad context, various models should be briefly introduced. A traditional Gospel HRM model suggests that human resources demonstrate their value at quality of their labour (Poole 1999). Thus, investing in human resources will bring nothing more but a driving force of production. On the contrary, more up-to-date models such as best practice and best fit models regard workforce as a key participant of business processes (Stredwick 2014). They position human resources as an entity with its feelings, desires, and anxieties, stressing that all these factors should be addressed at the workplace. To the greatest extent, best practice and best fit/contingency models recognise an employee as a personality (Stredwick 2014). In a similar way, guest model values reciprocal commitment, which is a moderately simple but an effective method to gain competitive advantage in human resource management (Stredwick 2014). Simultaneously, such models as Harvard Framework consider a combination of labour skills and personal characteristics of an employee, with commitment, cost effectiveness, and professional competence being the central outcomes of this model (Stredwick 2014).

Hence, human resources are definitely an object for reasonable investment, as the firm is able to gain the desired competitive advantages through providing favourable environments for personnel’s operational excellence. Nevertheless, human resource management should be appropriately applied, otherwise it may become an additional source of expenditures for the company. In regards to international perspective of human resource management, economically developed countries seem to comprehend the real value of the human resources. Exceptions, however, exist. China can provide numerous examples of companies that cultivate a bureaucratic organisational form, which presupposes that the entire power and decision-making is concentrated within the chief executive team or any other group of original owners (Festing & Royer 2008). In the same way, post-Soviet countries face much heavier problems with human resource management. A common practice in these countries is a low appliance of HRM, with organisational behaviour existing on the most primitive level (Hayton 2012).

At the same time, converging of organisational behaviour approaches is evident. Most of German, British, and even Japanese companies start implementing various American practices of human resource management, with the United States having obtained unexpected leadership in international human resource management (Shroeter 2005). It is a certain advantage for the U.S., since its excellent HRM practices applied by other economically developed countries makes the United States superior on the international market. This way, many companies are assumed to undergo some degree of “Americanisation” of human resource management (Brewster & Mayrhofer 2012). Americanisation in this context implies focusing on personal traits of an employee and establishing the diversification in the workforce, as these principle complies with the basics of democracy (Brewster & Mayrhofer 2012). There has been little agreement on the credibility of models based on the American Dream principles, even though their essence is based on provision of personal fulfilment for an employee through the appliance of the democratic ethical code. Nevertheless, the tendency to accept bottom-up models cannot be recognised as a negative influence (Brewster & Mayrhofer 2012). Bottom-up models imply more freedom for average workforce as well as less authoritative pressure. Additionally, bottom-up models promote a leadership model that serves a function of motivating rather than regulating (Price 2011). The opposite model is present in Chinese and Japanese doctrines of organisational behaviour, even though Japanese companies attempt to implement American models of HRM.  

In spite of the evidence presented above, functional equivalents of these approaches can present a significant value for national competitiveness. It is worth saying that Japanese and Chinese companies organise operational performance according to a linear principle (Brewster & Mayrhofer 2012). Generally speaking, a particular worker is responsible for a limited number of activities, even though a personal intention to cope with harder tasks is present. Such approaches guarantee a stable production at the country level (Doellgast 2012). By contrast, American and British models appreciate workforce’s enthusiasm (Price 2011). These countries gain a competitive advantage through employees’ commitment and enthusiasm. Emergence of internal motivation for each worker results in completion of extraordinary tasks and optimisation of operational activities. As a result, the U.K. as well as the U.S. demonstrate top results at the macroeconomic level (Hayton 2012). On the contrary, simplicity and strict organisational structuring are recognised as the best HRM practices in Japanese companies. For example, top-down and linear performance can be traced in any aspect of Japanese Sony Corporation (Hayton 2012). The same tendency is typical of other Japanese firms, as the described approach to human resource management enables Japan to export a wide range of products with sufficient quality and accessibility worldwide (Hayton 2012).

In 1980s, the United States as well as the United Kingdom have experienced a major reformation in business orientation (Blackford 2008). Proactive implementation of information technologies proclaimed a new era of digital revolution, so many companies downsized or separated into multiple organisations in the United States. The use of technology on a regular basis presupposes less participation of the workforce, which is why the same reduction of corporate size was observed in the U.K. Surprisingly, a limited number of employees resulted in increasing their decision-making role, which was successfully applied to already implemented technologies. In such a way, both countries have comprehended the idea that technology itself does not deliver a competitive advantage. Instead, workforce is the main driving force that can deploy IT in a beneficial way (Blackford 2008).

This tendency took another direction in Germany, where liberalisation and deployment of technology were associated with a new field of competition and opportunities. In the beginning of 2000s, the German vision of human resource management was changed towards the idea that information technologies can significantly facilitate daily human operations (Blackford 2008). As a consequence, the German economy experienced an extreme rise in early 2000s because workforce was enabled to demonstrate a better productivity via proactive use of IT for optimization of operational performance.

On the contrary, China did not change its visions much; however, related positive changes can be observed in the amendments of the Employment Contract Law (Festing & Royer 2008). These changes create an entirely new framework, where companies are strictly required to sign flexible employment contracts. That was a reaction on the rising violation of employee rights and lack of job security. Thus, the amended Employment Contract Law expects organisations to initiate special procedures for consultation of workers regarding the adoption of workplace rules and policies (Festing & Royer 2008). Additionally, the protection of migrant workers is also provided nowadays. According to the Employment Promotion Law, refusal to hire a migrant can become a subject to ethnical discrimination (Festing & Royer 2008). The increase of migrant labour becomes apparent, as its involvement in the establishment of economic competitive potential of China is obvious. Taking these points into account, the growth of national market in China is evident. Furthermore, recent legal changes enable this country to take more confident actions at the global market.

Another way of organisational reforms that is different from the German, British, and American ways can be presented with Japan. Its knowledge-intensive management caused an entire revolution in human resource management in 1980s – 2000s (Witt & Redding 2014). An accurate approach to fostering positive attitudes to knowledge and learning developed Japanese HRM to the level of a corporate philosophy. Such vision of human resource management can be explicitly traced in automotive industry, and many American competitors attempt to implement similar models in their companies.

Employment Relations

As long as the process of globalisation is unavoidable for the major segments of macroeconomics, many companies accepted the need for cultural alignment. In other words, organisational culture based on a distinct national framework is not applicable any longer. The so-called Americanisation of European human resource management produces its impacts (Shroeter 2005). Labour-oriented management structures have been transformed into orientation at human resources as an object of reasonable investment. As a consequence, the provision of job and life welfare has become a compulsory element: rewards are not a result of a devoted performance of workers but its external motivating factor. This direction was taken in the United Kingdom, the United States, and Germany (Blackford 2008). The organisations in these countries seek for determined and enthusiastic workers regardless of their cultural identity. This tendency, however, has revealed a new problem for organisational leadership. Enthusiastic workers also seek for companies, in which they will be able to fulfil their professional desires, so they do not differentiate between international and “native” companies (Stredwick 2014). The main challenge for leaders is to provide enough freedom for such workers and simultaneously preserve them from standard deviation. It is difficult to argue that these factors negatively reflect on the national competitiveness of these countries. A quite different problem can be indicated in workplace ageism, even though senior age is proved not to influence worsening of professional skills. This problem was particularly indicated in the U.S. human resource management, in spite of the trends on democratic and diversified models (Hayton 2012).

Japanese as well as Chinese HRM values workforce for their operational abilities, regardless of age, gender, or any other personal factors (Keizer 2010). This vision of human resource management is quite typical of companies with authoritative leadership and institutionalised organisational culture. Chinese as well as Japanese companies are usually large and are based on unification of multiple firms. Still, each firm has its strict hierarchy, which consists of chief executive team and subordinate departments (Keizer 2010). Division of departments is usually made according to the functions of each department. That is why the performance of a worker is measured by the quality of serving certain operational functions in a firm (Keizer 2010). This preserves job security even when an employee reaches a retiring age. Thus, internal labour markets of Japan and China are also institutionalised, as each company needs to hire workforce for a lifetime period (Keizer 2010).

Industrial Relations

The peculiar differences in national approaches to industrial relations can be described by the case of the Toyota company in the United States (Hayton 2012). The Japanese department was demonstrating positive results in arrangement of workforce’s performance, which positively reflected on production (Hayton 2012). The American department was deploying its bottom-up model of HRM, but successful production of vehicles failed in the U.S. departments because of lack of understanding among designers and manufacturers. Thus, the influence of national variations in HRM on the productivity of the companies and the entire country is apparent.

Actually, such production form is not typical for the U.S. Instead, the United States apply a collaborative teamwork model in the automotive industry. As a result, automotive manufacturers are guided by designers on a regular basis, so that mutual correction of performance is possible (Vance & Paik 2014). As for the U.K. automotive industry, it also attempts to implement Japanese forms of production philosophy, especially the lean manufacture (Vance & Paik 2014). Such form of production suggests economizing on raw materials in the incorporation of elements that are not primarily necessary. The U.K. human resource management positions this approach at the angle that workforce operations can be optimised, so that the principle “doing more with less effort” also emerges (Vance & Paik 2014). As for the German automotive industry, it does not follow the trends of Japanese production management, rather deploying the practices of total productive maintenance and total reliability maintenance (Vance & Paik 2014). These forms of production require more efforts from the workforce, but they ensure the quality of manufactured vehicles.

Work Relations

A drastic difference in work relations can also be admitted. German, British, and the U.S. companies are convinced to arrange operational activities according to the principle “doing more with less effort” (Vance & Paik 2014). At any rate, it is a reasonable reaction on the global processes; however, many employees have become concerned about their redundancy at the workplace. As a matter of fact, many firms realise the real value of human resources, so major downsizing and layoffs will not take place in the upcoming future. In contrast, Japanese and Chinese firms prefer to use linear approaches to operational performance, even though they tend to liberalise their organisational structure (Cooke 2008). Both visions on operational performance, however, do not disregard the value of human resources, despite of the fact that they take entirely different approaches to line management. To be more specific, Asian, especially Japanese automotive companies, take linear approach even in lines of production (Haghirian 2009). Workers are expected to complete a single set of monotonous activities without any additional intervention in the process of production and manufacturing. Eventually, it is worth saying that production principles are aligned with organisational behaviour. For example, American and German companies apply various models of sustainable maintenance while Japanese firms base their production models on a complex organisational philosophy and lean manufacture. Needless to say, any of these approaches contributes much to gaining international economic competitiveness.

Skills and Training

Another peculiar issue of international human resource management is presented in different views on skills, training, education, and knowledge. The American models of human resource management practice training and skill enhancement as an essential element. For example, Target Corporation deploys training on a regular basis as a HRM program (Hayton 2012). This leads to an increase in not only the quality of performance but also in commitment of the workforce. A similar principle can be traced in German and British companies, as they gain a competitive advantage through proactive involvement of educated and enthusiastic personnel’s performance (Hayton 2012).

Chinese companies tend to initiate training in terms of improvement of professional skills without respect to personal characteristics of the workers. Chinese companies approach skills and training as a way to advance operational capacity of its employees, so training usually relates to the improvement of professional abilities rather than fostering specific personal characteristics (AACSB International 2014). As a result, China easily produces enormous amounts of products and services worldwide. Conversely, Japanese firms realise the importance of education as a source of knowledgeable workforce (Keizer 2010). Knowledge is one of the primary objectives of training in Japanese firms, so such arrangement of training and education is well-justified. Knowledge basis is incorporated in operational philosophy and implementation of technology. That is why Japan is one of the technologically leading countries in international economics.

Human Resources as a Strategy and Investment

As it has been already discussed, human resources is an object for intensive investment nowadays. Globalisation and overall digitalisation of business still do not deny the fact that human resources is a central decision maker and the executive of daily operations in any company. Employee’s commitment is the most valuable asset of any contemporary company, because devotion and accountability create a foundation for a proactive strategic performance as well as for resisting external threats (Armstrong 2010). For this reason, the arrangement of the employee’s performance and provision of favourable conditions for their excellence is evidently purposeful in all economically developed countries.

The Relation of HRM to National Economic Success

Provided that education and training are recognised as an essential strategic element, their appropriate deployment and framework can lead to a national economic success. It is certainly true, but an obstacle is made with hardships in unification and alignment of all companies towards a nation-wide economic goal. Hence, relating human resource management to national economic success is definitely possible. However, any organisation faces the same challenges concerning cultural diversification, strategic alignment, and changes in market trends (Doellgast 2012). Likewise, talent management is still a problem, especially in terms of effective leadership. An average contemporary employee tends to fulfil their internal motives without much respect to the origin of the organisation (Martin 2010). Hence, companies have to render not only favourable cultural environment but also provide workers with unique professional opportunities.

Conclusion

All in all, the paper has discussed national variations in Human Resource Management. The discussion revealed that the developed countries under discussion have different approaches to HRM for gaining international economic competitiveness. Japanese organisations prefer to gain a competitive advantage through providing its workforce with sufficient knowledge of quality technologically-driven production. Chinese firms arrange the performance of their workforce according to linear principles, so that high intensity of production and operational performance renders macroeconomic competitive advantage. American, German, and British companies prefer to foster commitment in their employees, so that they would be able to complete extraordinary tasks. This approach enables these countries to obtain market and product leadership at the macroeconomic level. This way, the variations in institutionalisation, employment, work and industrial relations in different countries have their impact on achieving a competitive advantage in the global market. The role of training and education should be independently indicated, as it is a meaningful source for national competitive potential. Thus, the specific approaches to HRM described above enable such countries as the United States, Germany, the United Kingdom, Japan, and China obtain the desired competitive advantages at the international level.