- Introduction
- Factors in International HRM
- Aspects of Asian HRM
- Aspects of European HRM
- Comparison with the US practices
- Conclusion
- References
Introduction
When it comes to international HRM procedures, businesses continually follow talent market trends. These techniques are now being reviewed at SEIIC and are mostly based on US patterns. For instance, the average employee’s annual compensation rise is merely a few percent. For a variety of reasons, SEIIC HRM does not have much room to assess high achievers. The organization’s ability to have a significant worldwide effect is severely constrained by these HR methods, the performance evaluation system, and a company mentality that puts seniority above performance.
Factors in International HRM
Institutional variables precede management practice and constrain corporate action by ceding decision-making authority to outside parties because they give birth to national and regional variances as a result of extensive historical processes, national business systems, and cultural systems. Individualism and collectivism, as well as variations in short- and long-term orientation, are the first ways that culture has an impact on human management (Barry & Wilkinson, 2022). Individual incentives and performance-based compensation are examples of reward systems that have emerged in the US as a result of the country’s individualistic culture and success focus.
High levels of individualism are connected to the growth of human capital in businesses where workers are seen as the most valuable resources; as a result, individualism is linked to the expansion of the internal labor market. As opposed to the direct management and employee contact found in the US, the collectivist approach results in the recognition of trade unions and collective bargaining, which define industrial relations in Europe (Diaz‐Carrion et al., 2019). Additionally, due to the strong social obligation to aid friends in need, recruiting from inside the group occurs more frequently in collectivist societies. This affects several HRM activities, for instance, performance management.
In the collectivist eastern culture, reliability, loyalty, and compatibility between managers and employees are significant job seeker qualities, but in the individualistic western culture, competence is a crucial job seeker feature for managers. Additionally, as integration into the group is crucial in collectivist cultures, businesses hire local employees rather than foreign ones; in contrast, in individualistic cultures, businesses favor hiring international employees (Barry & Wilkinson, 2022). As a result, less individualistic cultures, like certain managers in Europe, may prioritize group cohesiveness more when making HRM decisions, whereas other cultures may place greater emphasis on personal traits that are associated with performance.
In addition, the long-term perspective of the US and Asian businesses may vary. For instance, American businesses are short-term focused, but Asian businesses are long-term focused. Japanese businesses, for instance, are long-term oriented, which enables them to engage in long-term programs like training and development so that staff members may gain knowledge and skills relevant to the company (De Cieri et al., 2022). In these settings, HRM activities, such as training and development, are different from US practices. Japanese businesses place a strong emphasis on market share when evaluating their performance, whereas US businesses place a stronger emphasis on short-term profit or share (Cooke et al., 2020). Therefore, current cash flows are taken into consideration while evaluating the performance of Japanese HRM. This results in shifting of compensation and benefits strategies. As a result, a focus on market share encourages Japanese businesses to be cost-effective and competitive, which is linked to ongoing development.
Additionally, workers in China have a moral connection to their employers, whereas Americans have a businesslike relationship with their employers. As a result, learning and development in China encourage businesses to treat workers morally so that they experience a sense of belonging. As employees are motivated to further their own personal interests, training in the US is concentrated on improving technical and interpersonal abilities. Levels of power distance and uncertainty avoidance also have an impact on participation processes such as communication, bargaining, and job interviews (De Cieri et al., 2022). For instance, performance management and motivation are impacted by expectations from manager-subordinate interactions.
Aspects of Asian HRM
There are several crucial aspects to distinguish while examining HRM practices in Asia. For instance, for hiring, Japanese businesses frequently use internal promotion. This is so that Japanese businesses may compete on price, cut expenses, and enhance quality since they are focused on market share and growth (De Cieri et al., 2022). Varied Asian transitional nations, including China, India, and Southeast Asian nations, have different demands for HRM. In order for businesses to increase their creativity and compete with multinational rivals, they require human capital, expertise, and technology advancement. As a result, Asian HR management creates and keeps more knowledgeable human resources as multinational corporations with top-notch goods start to appear in the region’s transition economies (Cooke et al., 2020). A contingency view on HRM rather than a universalist one may be more applicable for Asian organizations since businesses must adapt complicated technical procedures.
According to the contingency approach, a go-to-market strategy, a plan for quality improvement or innovation, or a strategy for cost reduction, an HR strategy is more effective when it is linked with a particular organizational and environmental context. In contrast, the universalist perspective holds that the performance of the company is simply correlated with human management. Chinese and Indian businesses are being pushed by recent globalization and competition to innovate and develop technology, which affects HRM strategies (Barry & Wilkinson, 2022). In order to enable employees to utilize knowledge to spur innovation, HRM management in these nations attempts to produce workers who are aware and experienced in a specific technology.
In order to achieve organizational learning, HR departments must foster skills including experimentation, knowledge transfer, teamwork, leadership, and purpose clarity. As a result, HRM strategies, including hiring, training, reviewing performance, rewarding employees, creating career paths, and using talented and creative human resources, are positively connected with organizational success in India (Cooke et al., 2020). Additionally, there is intense demand for Indian HR departments to develop the skills, resources, competencies, and strategies necessary to proactively address environmental constraints brought on by economic liberalization.
Aspects of European HRM
Along with knowledge and creativity, European HRM could also contain ideas of cultural adaptation and performance. Understanding European governance processes requires cultural adaptability because Europe does not become more homogeneous (Diaz‐Carrion et al., 2019). The management of European human resources can also explore initiatives to advance knowledge and technology. European businesses have less organizational liberty when it comes to hiring, terminating, and training personnel. As a result, job creation is hindered in Europe by labor regulation, powerful trade unions, employment protection, and employment contract legislation, as well as a relatively high level of job security (Diaz‐Carrion et al., 2019). In contrast, business transactions are dominated by large employer savings and government laissez-faire in the US (Barry & Wilkinson, 2022). As a result, some countries have taken action to create more flexible employment contracts by easing restrictions on hiring and discharging employees, as well as making it simpler for businesses to hire temporary or part-time workers.
Additionally, non-market institutional elements, including government action, regulation, engagement by labor unions, consultations, discussions, and communication amongst social partners, are included in European labor management. Therefore, European personnel management seeks to bring governments, companies, and unions’ interests into alignment (Barry & Wilkinson, 2022). This does not appear to be a crucial set of parties in the US who decide on personnel management policy and practice. Guidelines for human resources policy and practice are provided by US law.
Comparison with the US practices
While comparing HRM practices in the US, the institutions also have an impact on employment policies in Europe. China’s strong institutions serve as a representation of China’s ideological system and set guidelines for how people and businesses should behave. Trade unions and labor laws affect how employers and employees communicate in Europe. These regulatory frameworks and industrial relations systems discourage businesses from using market-based management techniques. Additionally, labor rules prevent firms from firing workers and promote corporate accountability. China’s economy is also greatly impacted by mixed economies and outdated political structures, despite the nation’s quick shift to a market economy (De Cieri et al., 2022). In contrast, businesses in the US have more autonomy, and as a result, management and employees there has a direct working connection.
Depending on the degree of institutional, legal, and cultural compatibility of the host country with HR practices, multinational corporations may also affect HRM practices. Big multinational companies may be compelled to support HRM policies at subsidiaries, nevertheless, due to firm-specific internal problems like low productivity. For instance, American and Japanese businesses have had issues with efficiency in their European affiliates. Therefore, factors like increased productivity, training and labor relations have an effect on staff management in Europe. Another example is that despite cultural differences, Toyota and Nissan maintain their unique management practices in their UK subsidiaries to boost efficiency, and they have affected a number of UK businesses connected to their operations (Diaz‐Carrion et al., 2019). Additionally, US businesses are adopting HRM methods in the UK and Ireland and have more influence over regional HRM practices as a result of less regulated labor market economics.
Conclusion
Concluding, it can be claimed that the level of organizational autonomy in HRM decision-making is determined by culture, institutions, and legal frameworks. First, HR departments in individualistic cultures, like those in the US, employ unique HR procedures. In order to effectively manage employees in a collectivist society, human resource management must consider the advantages of outside parties. European HRM practices are more constrained in their ability to manage human resources than American HRMs are due to institutions like the effect of labor laws and substantial government regulations.
SEIIC, in its turn, is left with two options – either pursue a standardized, global HRM system or adjust its practices specifically to operating regions. Both paths have their advantages and disadvantages. A globalized system is easier to implement, but it will not necessarily be successful in different regions of the world, especially in Asia, where a more nuanced methodology is required. SEIIC does not have capacities to influence existing companies’ practices in Europe or Asia. Tailoring HRM practices to a specific area of operation are more beneficial for SEIIC since it allows it to get on the market quicker and facilitates organizational growth. On the other side, it requires a thorough understanding of local conditions and investing in research on the market in the specific area.
References
Barry, M., & Wilkinson, A. (2022). Employee voice, psychologisation and human resource management (HRM). Human Resource Management Journal, 32(3), 631-646.
Cooke, F. L., Schuler, R., & Varma, A. (2020). Human resource management research and practice in Asia: Past, present and future. Human Resource Management Review, 30(4), 100778.
De Cieri, H., Sanders, K., & Lin, C. (2022). International and comparative human resource management: an Asia‐Pacific perspective. Asia Pacific Journal of Human Resources, 60(1), 116-145.
Diaz‐Carrion, R., López‐Fernández, M., & Romero‐Fernandez, P. M. (2019). Evidence of different models of socially responsible HRM in Europe. Business Ethics: A European Review, 28(1), 1-18.