Human Resources Management in South Korea - Report Example

Running Head: Human resources Management in South Korea What are the key influences that have shaped the development of Human resources Management inSouth Korea over the last thirty years? [Name of the writer] [Name of the institution] What are the key influences that have shaped the development of Human resources Management in South Korea over the last thirty years? The paper will discuss the development of human resources management in South Korea in different periods after 1945. The South Korean which was traditionally a agriculture based economy before 1950, surprised the world by its extraordinarily industrialization in the early 1960s. The paper will discuss the reasons behind the rapid economic development as well as the influences that shaped the development of HRM in South Korea over the last 50 years in four different periods, 1945-1961, 1961-1987, 1987-1997 and 1997 onwards. South Korea has one of the world’s largest economies. The success of industrial organizations in this country is extensively attributed to both management styles and work attitudes. The extraordinary growth of the Korean economy for the last 30 years has got the attraction of academics and business people from around the world. The country got a real annual growth rate of about 8 per cent in gross national product during this time. Growth in the corporate sector was prominent and in fact shaped the basis of the economic growth. However, it had many problems despite its quantitative growth (Park 2001). Bearing in mind that the success of HRM development in the South Korea was remarkably high, the only growth factor cannot give explanation all of performance of this country in human resource development. Therefore, it is not just growth but special characteristics of Korean growth that have in fact contributed to the growth of education. (Mabey 1998) The current economic recession has affected every country of the world. Over the last two years, businesses around the world have been hit by regional economic crisis. In Asian countries, currency crisis and the attendant business slump led to different approaches within the businessmen and financial experts for reducing waste and creating greater efficiencies. The South Korean economy which dodged the recession with a narrow margin has little impact on its business structure. The tight money policies enacted by the government forced Korean firms to reform in order to alter organizational competence and profits. Although there are several historical factors which boosted South Korean economy after 1950, the period of 1945-1961 has roots of HRM development and economic boom in the country. During this period people of this country took great interest in gaining education which was the result of strong social indicators and economic motivations. During the period of 1945-1961, education played a great role in changing the lives of Koreans. The changing environment of social indicators turned the attention of people towards education and thus the HRM development became a special subject for Korean companies. Education became as an important feature for people to get into good occupations which had become necessary for economic rewards and social status. During this period, the demand for education in the HRM development expanded many fold and there were many factors behind this trend. One of the most important factors behind this trend was the Japanese colonial rule in the country. The Japanese had established modern educational system. It was also the period of Japanese colonial rule when the primary education expanded in Korea. However, despite Japanese keenness to provide Koreans with more primary education, very few Koreans had permission to register themselves in secondary school or to get admission in college. Consequently, there was a big gap between Koreans and Japanese living in Korea in term of education standard. The period of 1961-1987 saw a rapid economic growth in South Korea. The period was also ideal time for the development of HRM development in the country. The strong human development was the result of export-oriented growth policy adopted by South Korea. The focus of the exports was on labour-intensive manufactured goods, especially during the 1960s and 1970s. The attention to these sectors gives a boost to the manufacturing of more capital or skill-intensive products. Consequently, the excellent performance of labour and skill-intensive export firms improved the growth of employment which had its clear impact on employees’ earnings. This whole situation had its direct and strong impact on education in the South Korean society. (Kwon 2001) The period between 1961 and 1987 had a very low unemployment rate in the history of South Korea. In the period of 1987-1997, the South Korean economy like the other economies of Asia faced the economic crisis which also affected the HRM development. However, the basic indicators remained strong. (Kim & Kim 2003) The South Korean government by understanding the importance of the future demand for skilled employees for export-oriented industrial development launched a variety of human resources management plans to meet demand for education. The late period of 1980s saw more focus on HRM development. In this period programs like two-year junior technical colleges, colleges and universities for a supply of skilled workers and technicians were initiated. In the period 1997 onwards, the South Korean economy saw many ups and downs, including the famous economic crisis of 1990s and the recent economic recession. In South Korea, the centre of attention is now on core businesses, workforce downsizing and reducing management cost in many parts, including human resource development (Cho, Park & Wagner 1999). The new economic trials also caused in the minds of the people the significance of competitiveness on the bases of transparency, rationality, and capability (Park 2001). Available at: http://www.12manage.com/images/picture_hrm_competences.jpg In terms of hiring employees, there are a variety of recruiting procedures in South Korean companies according to such factors as company size and the positions for which they are recruiting. A good number of Korean companies prefer to hire their management trainees from prestigious education institutions. Hiring is hence very competitive among the major corporations. They generally put out public hiring notices for college graduates using mass-media such as television, radio, newspapers, magazines and computer network communication. Smaller firms, on the other hand, tend to rely less on open hiring ways and testing and more on personal connections in recruiting. For example, they generally recruit workers through word of mouth or limited local advertisement (Koch, Nam & Steers 1995). For the major Korean firms, trends in both white-collar and blue-collar hiring are evident. Firstly, candidates for white-collar jobs are often actively hired from the better-know universities. All candidates must take company-sponsored entrance examinations that typically include English-language proficiency in addition to knowledge both in a major area and in general abilities or common sense. Furthermore, candidates must pass through extensive interviews, in which firm officials look at more interpersonal factors, such as personal responsibility, initiative and interpersonal style, and reference checks. At the blue-collar level, corporate approaches to hiring are quite different. This involves choosing a candidate either because he/she is recommended by a friend or relative who is already worked in the firm or at the very least hiring someone who get information about the job through such channels. Also, about ten percent of blue-collar employees come from vocational school placements (Koch, Nam & Steers 1995). Hiring stage in South Korea has different methods depending on the company’s size or the type of worker like other developed countries. HRM practitioners in South Korea planned projects in restructured organizational development, reallocation of employees, change management for leaders and marketing and finance-related courses (Cho, Park & Wagner 1999). The centre of attention was not so much on gaining new job-related knowledge or abilities as it is on moulding current and future leaders to fit into the companys corporate culture (Koch, Nam & Steers 1995). A culture of training for new workers became important feature in Korean firms. New workers go through four-week training, often in firms own training centre. The objective of the training is to transform inexperienced college graduates into warrior workers loyal to the company (Kearney 1991). The environment of training is seriously affected by the military culture. The new appointees learn the history, organization, and vision of the company. Training for technical affairs of the company and general management are also provided. Companies place importance on ongoing worker development and provide a variety of training programs. After coming out of economic crisis, low cost and high competence were targeted as priorities by the HRM experts. In the new system performance has got a new place for appraisals. In the old system, performance rating did not influence promotion and compensation decisions in a significant way. Under the new evaluation process for human resource, promotion and compensation came to depend heavily on performance ratings. “Substantial changes were made to use the appraisal system fair and trustworthy.” (Kim & Broscoe 1997) Available at: http://rphrm.curtin.edu.au/2005/issue2/emic01.png The HRM development in Asian countries is influenced by global factors because of economic crisis. The transformation of HRM system in South Korea and other Asian countries is a result of the effect of the two factors, the foreign currency crisis and the digital revolution. The foreign currency crisis has forced Asian companies to pursue a global standard and the digital revolution has caused a basic restructuring in the human resource management system. The transformation process explains that the significance of human resources as the core success part of the company is at last being realized by South Korean firms (Park 2001). For becoming successful in the world market, almost all companies determined that they needed to utilize their employees more effectively. (Rowley 1998; Rowley 2004) The situation of some Asian countries, including China, since economic reform and the situation of South Korea after economic crisis look similar. (Rowley 2002) All Asian economies tried hard to change and develop their negative situations, including management of companies. They realized that they had to accept international management skills to overcome this bad aspect. References Cho, Y, Park, HY & Wagner, S 1999, Training in a changing Korea, Training & Development, vol. 53, no. 5, pp. 98-99. Kearney, RP 1991, The warrior worker: the history and challenge of South Koreas economic miracle, Henry Holt and Company, New York. Kim, D. and Kim, S. (2003) Globalisation, financial crisis and industrial relations: the case of South Korea, Industrial Relations, 42, 3, 341-367 Kim, S & Briscoe, DR. 1997, Globalization and a new human resource policy in Korea transformation to a performance-based HRM, Employee Relations, vol.19, no. 4, pp. 298-308. Koch, M, Nam, SH & Steers, RM. 1995, Human resource management in South Korea, in LF Moore & PD Jennings (eds.), Human resource management on the pacific rim: institutions, practices and attitudes, Walter de Gruyter, Berlin, pp. 331 -347. Kwon, Seung Ho; Michael ODonnell, 2001, The Cheabol and Labour in Korea, Saffron Walden, ESS, United Kingdom Mabey, C, Salaman, G & Storey, J 1998, Human resource management: a strategic introduction, Blackwell, Oxford. Park, WW 2001, Human resource management in South Korea, in SB Pawan & AD Yaw (eds.), Human Resource Management in Developing Countries, Routledge, New York, pp. 311 - 346. Rowley, C & Benson, J. 2002, Convergence and divergence in Asian human resource management, Californian Management Review, vol. 44, no. 2, pp. 90 - 109. Rowley, C. & Benson, J., 2000, Japanese trade unions at the crossroads: dilemmas and opportunities created by globalization Rowley, C. & Benson, J., 2004, Towards an Asian model of human resource management?: a comparative analysis of China, Japan and South Korea Rowley, C. 1998, HRM in the Asia Pacific Region: Convergence Questioned, Cass, London, International Journal of Human Resource Management Read More