Convergence of HRM Practices in Europe - Coursework Example

HRM in Europe The modern process of globalization has captured all spheres of human activities (Briscoe, Randall, 2004). In the process of globalization economic and cultural boundaries between different countries are removed. Human resource management is a sphere where the influence of globalization is evident. On the background of globalization, relations between employers and employees are tending to be similar in Europe. A connection between globalization and HRM is an interesting and relevant topic for discussion. Moreover, there are even considerations about convergence of HRM practices in Europe. HRM was previously studied in the context of a certain country, i.e. there was an ethnocentric approach (Chapman, 1996; Clark et al., 1999). Ethnocentric approach has a serious drawback: it is hard to believe that Universalist approach can be applicable in other cultures and not only in the source culture. Nevertheless it is better to have such kind of methodological goal, which can be applicable in different nations. Similarities of HRM practices result from similar conceptualization of HRM. Employee management can seem to be similar in different countries at the first glance, but in reality there can be a lot of divergences and discrepancies. Another drawback of ethnocentric approach is its lack of concern about the nature of societal or cultural differences (Clark et al., 1999). It is more relevant to apply these considerations to the nature of employer-employees relations with regard to societal and cultural differences. HRM practices are usually studied by scientists or researchers, who belong to one or another nation and culture. Thus we can suppose that HRM strategies can hardly be identical around the world. If countries are culturally close to each other, then management models can be identical there. Cultures of “high repertoire” occur in developed countries with rich areas and contexts for managers’ decision making. Cultures of “low repertoire” occur in developing countries, where techniques and skills of managers are limited. A one of the pioneering polycentric studies by Guillen (1994) shows on the examples the United States, Germany, Great Britain, and Spain that HRM models applied in these countries witness the fact that introduced similarities of HRM were perceived in a different way by different nations. This researcher claims that each country has its own HRM model. In such a way, there is a need to conduct a study, which will clarify if there are certain similarities in European HRM models or each model is indigenous and is relevant to only one certain country (Ignjatovic, Sveltic, 2003). On the basis of the works of the leading European scientists, we’ll focus our attention on HRM in the following countries: France, Denmark, the Netherlands, Spain, Sweden, and the United Kingdom, Germany, as it is suggested in the study by Clark (1999). Managers from these countries presented their vision of HRM. In order to have a broader consideration about HRM, the scope of issues covered is the following: employment and labor management; employment relations; industrial relations; work relations (Brewster, Mayrhofer, & Morley, 2004). The first point to be considered is the issue of HRM convergence in Europe. First of all, managers from six European countries, all except Spain, noted that human resources are important corporate competitive force. Another similarity is managers’ agreement on the decentralization of responsibility from the governmental to organizational level; a shift of employees’ responsibilities to functions relevant to line management (Brewster, Mayrhofer, & Morley, 2004). Managers from five countries agreed upon this issue, except managers from Spain and Germany (Ferner, Quintanilla, and Varul, 2001). Another similar claim of managers from United Kingdom, Germany, France, and the Netherlands concerns HR strategies integration with corporate strategies (Brunstein, 1995). The USA can be considered as the leader of management sphere development. A concept of HRM appeared in the USA and spread around the world, starting from Britain and Australia and subsequently reached remote countries (Beardwell and Holden, 1997). Researchers and managers around the world have adapted US management practice, complemented it and incorporated in their countries. The influence of Britain is also essential. Thus sources referenced in this research paper are written by the scientists mainly from America and Britain (Arthur, 1992). HRM was developed in order to improve competitiveness of European countries. Thus in France, current HRM practices are connected with the state’s intention to develop conditions for more “affordable” employees; in Germany the main goal of HRM was to work out different kinds of agreements between an employer and employee (e.g. “M4-employee” and BMW’s “value-oriented personnel policy”) intended to decrease quantity of workforce and develop work force flexibility (Brunstein, 1995; Gould, 1993). Another factor of HRM convergence in Europe concerns shift of accents or so-called “decentralization” of industrial relations with governmental organizations institutions and changes of managerial strategies and activities in Europe. In such a way, power relations in the workplace were changed. Bargaining structures were decentralized in two main areas: structures of collective bargaining and changes in union membership. After introduction of decentralization, collective bargaining has shifted from national to company level (e.g., Baglioni, 1989; Ferner and Hyman, 1992; Katz, 1993). Union membership was not popular anymore. Moreover, there was a new stage of employee’s relation to power. European counties’ managers were greatly concerned about creation of a new reality for establishment of new relations between manager and employee. HRM was intended to develop strategic integration among employers and employees. For example, France has chosen to integrate strong relations between employees and employers. Legislation of employees’ independence made an emphasis on the importance of employees’ relations. Nevertheless, some European countries admit importance of human resources as a strong competitive force, Swedish culture has developed different attitude to human resources. Concerning another common feature of HRM practices in Europe, it is the unification of HRM practices with organizational decision making though this aspect has some divergences as well. In accordance with Storey (1992) “hard” and “soft” HRM practices are distinguished. “Hard” HRM practice requires employees’ commitment to organizational needs; “soft” HRM practice refers to organizational attitude to employees as the most valuable asset. Each European country chooses itself a kind of HRM practice. Thus, for example, in the Netherlands report, the Dutch peculiarities of cultural and institutional norms require “soft” HR strategies. Subordination of Dutch employees wouldn’t be beneficial for organization and could be a reason for constant conflicts. Further on, decentralization of HR issues from higher to lower levels identify that in different European countries these issues are covered in a different way. The issue of decentralization of industrial relations has not concerned only Denmark, France, the Netherlands, Germany, Spain, and Sweden (Nikandrou, Apospori, Papalexandris, 2005). Employees are still members of trade unions. These organizations perform a role of regulator of an employment process. Another great shift caused by institutional relations decentralization is evident in Germany and the Netherlands, where an employee representative can regulate manager-employee relations and even appeal to the court. After a brief overview of European human resources managerial practices on the example of seven countries, it is possible to claim that if to consider the nature of employer-employee relation in Europe, there is a need to refer to the sources of that particular country or refer to the works by the authors from the country to be considered. It is necessary to follow these steps in order to create an unprejudiced attitude to considerations about European managerial practices. In the process of the conducted study, it was agreed upon that convergence of HRM practices in Europe is present nowadays. These similarities can seem to be international, transnational or whatever they may be called. They are the following: human resources are important for any organization; decentralization of powers “from national-level institutions to the firm and within this to line management”; integration of corporate and HR strategies in the name of mutual reinforcing. In the result of polycentric approach to the study of these data, they can be identified as reliable ones. Generally speaking, convergence of HRM practices can be interpreted with regard to the fact that the power and impact of numerous macro forces such as different accent in employees’ representation and a greater empowerment of managers make European countries develop a new approach to management of the employment relationship (Scullion, Linehan, 2005). There is an interesting moment revealed in the process of this study, similar ways of HRM practices can be interpreted in a different way in different European countries, e.g. Sweden development of “soft” HRM practices caused by cultural background of that country and disregard to an individual and application of “hard” HRM practices to Dutch employees (Pudelko, 2006). Global economic and political trends are essential. Therefore it is desirable to follow the line of similar HRM practices in Europe. As far as we can see, Europe is on the cutting edge of convergence approach development in HRM practices. A detailed consideration of European countries about convergence in HRM practices, allows discussing this issue in detail. The main underpinnings for convergence are globalisation, technological developments or economic rationality (Monir, Tayeb, 2005). These issues make different managers practices have many things in common. If a total convergence of HRM practices occurs, historical, geographical and cultural reasons will be decreased. A starting point of managerial practices convergence in Europe is 90s (Gould, 1993). Nevertheless later on these practices were interpreted in a different way and divergence occurred. European countries may witness convergence/divergence of HRM practices. It is possible to make a conclusion that in spite of certain degree of convergence among European countries, there are essential differences in cultural and institutional contexts thus causing divergent employment relationships (Pieper, R., 1990). A modern outlook of HRM practices in Europe witnesses a wide consideration of previously uncovered issues. XXI century introduced certain peculiarities in the study of HRM practices. For example, a discussion scope is wider nowadays because of inclusion of new countries into European Union. Currently, a proper attention is paid to Russia. Convergence/divergence is a dynamic process (Ramirez, 2004). Some scientists underline that there are two kinds of convergence: “directional convergence” and “final convergence”. “Directional convergence” is referred to if in the course of time the direction of transformation equals the initial one, unlike final convergence, when in some years differences between countries disappear at all. In accordance with Mayrhofer et al. (2004), directional convergence is effective in case the following conditions are followed: there is a strong support of the HR department; there are essential investment in training; a well-developed level of communication with employees, communications with employees; system of rewards; changeable and innovative decision making for employees; inefficient maintenance of decision-making level and an essential changes in responsibility (Mayrhofer et al, 2004). With regard to the fact that there are numerous multinational companies nowadays, it is possible to trace similarities of policies of multinational organizations. Such kind of organizations functions as global organizations. Multinational workforce can be either the most precious asset or can otherwise lead to misunderstanding and lack of development. Fortunately or not, but multinational companies integrate their efforts and are constantly on the way to international development (Djelic, Quack, 2002). A common practice of HRM practices in MNCs is the main focus on economic dominance (Korten, 1995). Convergence of the great economic powers leads to unequal and injustice treatment to employees. It is even possible to claim that there occurs a renewed “imperialism”, which provides the stronger economic entities with enormous use of power. With regard to the numerous issues considered above, there is a need to determine whether there is European Convergence model or not. As far as we have concluded above, different European countries have their own peculiarities of HRM practices development with regard to their national and cultural traditions (Chapman, 1996). Nevertheless all European organizations are influenced by the European Union. Thus management practices in Europe are developing with regard to European regulations on management and human activities. Thus unlike America: “the degree to which [HRM] is influenced and determined by state regulations is lower in European countries” (Pieper, 1990:8). European context of HRM practices development covers a lot of issues, such as considerations about social security provision, development of personnel and industrial relations services and European countries have a considerable number of employers (Ferner, 1996). Therefore employers are interested in the development of a strong commitment among their employees to their organizations. Employees’ commitment is the main goal of HRM practices in Europe. Therefore currently it is possible to speak about European approaches in HRM (Paauwe, Boselie, 2005). A unification of ideas and experiences of different countries on the diverse cultural background makes HRM practices in Europe unique. Philosophical background of HRM practices development in Europe can be concluded in the following way: a dominance of pluralism, tolerance and other values, which are important influencing factors in HRM development. As far as we can see, a process of globalization influenced changes of HRM practices in Europe to the greatest extent. The main connection between the globalization and HRM practices in Europe can be justified by a proper consideration of the world society about “international organizations such as the European Union or global attempts to eliminate trade barriers. On the background of a total “McDonaldisation” of the society, there is a shift of accents in all spheres of human activities and personal identity. At this point a consideration about convergence occurs (Ritzer, 1993). In accordance with the claims of convergence, economies, management strategies and other issues will be alike around the world. It is possible to mention about two main strategies with regard to the issue of convergence: “rational actor” and “institutional models” (Gooderham et al., 1999, p. 33). In accordance with rational actor models, “firms pursue economic success by chasing technological and economic efficiency that will contribute to economic goals” (Gooderham et al., 1999, p. 34). Because of the fact that rational decision making, cost efficiency, dynamics and the presence of “template” models prevail in the management context, they would result in similar organizational structures and processes. In 80s there was a common idea of the majority of scientists that at a certain period of time there is always the most relevant strategy of employees’ management. Currently this idea is substituted with another one: international standardization and supra-national regulations could lead to equal types of labor organizing. For example, it is hard to question the claim that managers in each country develop their strategies on a certain cultural background and institutional context (Ferner, 1996). Each country transforms its HRM practices with regard to the needs of local and international market. A dynamic nature of HRM practices development witnesses the fact that it is impossible to reach convergence of HRM practices in Europe. Moreover, if to take into consideration issues connected with changes caused by HRM practices transformation, then it is possible to claim that organization are ‘embedded’ into certain national institutional settings thus certain changes introduced by the organizations can be referred to only with regard to specific social or cultural discourse (French, 2007). Thus currently it is desirable to develop studies directed on HRM development in different countries, taking into account social and cultural background of those countries (Sorge, 2004). In spite of cross-cultural studies, it is relevant to apply to the study of HRM different works with compatible cultural and institutional context variables. This research paper witnesses that there is an evident shift of HRM practices in Europe currently. The changes considered above are caused by the process of globalization and its consequences: global economic changes, integration of state powers etc. In spite of the fact, that countries considered have European development peculiarities, it is hard to question that there are a lot of “cultural prerequisites” preventing from European HRM practices convergence. The issue of convergence is rooted in 80s though an essential part of current works is devoted to this theme. The issue of convergence has been widely discussed in the current works, which determine convergence as a necessary measure taken by international organization for establishment of common goals and equal treatment with regard to their employees (Ferner, 1996). On the example of seven European countries it was concluded that shift in HRM practices was caused by a strong desire of international managers to create a favorable working atmosphere for employees and turn them into a strong competitive force. These goals are relevant to the majority of European countries. In order to reach this goal, managers are focused on development of a strong commitment to their organizations. Therefore it is can be concluded that convergence of European HRM practices was formed under the influence of the process of globalization. Works cited 1. Arthur, J.B., 1992. The link between business strategy and industrial relations systems in American steel minimills. 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Cross-national differences in human resources and organization. In: Harzing, A–W., van Ruysseveldt, J., eds. International Human Resource Management, London: Sage, pp.117–140. 29. Storey, J. Developments in the Management of Human Resources. Oxford: Blackwell, 1992. Read More