National Employment Systems of the US - Essay Example

Word Count: 1500

Argument For and Against the Likely Convergence of National Employment Systems on the US Model

Argument For and Against the Likely Convergence of National Employment Systems on the US Model

Across countries, there are similarities and differences in the national employment systems. Employment systems are considered to be the complex structure of reproductive and productive activities, different work time arrangements, and different payment schemes. They are often shaped by national cultures, vocational and educational training systems, social welfare systems, and societal structures. The argument successfully employs the reasons why there are various employment systems around the world. The aim of this paper is to compare German and the United States, more specifically to critically assess the arguments that support or which are against the possible convergence of the national employment systems in German on the US model. The German employment system has been selected to be the counterpart because German is one of the leading economies in Europe and around the world and is a prototype of the Continental Model.

Argument against Possible Convergent/ Divergent Argument

The National employment systems in the United States and German has become of great interest because both countries have big economies and they have multinational companies that operate in both countries (Schmid, 2002). The national employment system of the two countries often differs based on various employment factors such as employment relation, more specifically on issues that relate to labor unions, the wages of the top management team, and the training methods that they use on employees.

Labor unions in German are considered to be stronger than those that are found in the United States. Following the system of Mitbestimmung or co-determination, the labor unions in German are considered to be cooperative in nature because they provide a more democratic method of running a company, and aim at facilitating conflict resolution between the employer and employees. The process involves the formation of work council by the employees on the floor level, which then chooses the representatives who are tasked with putting the interest of the employees at a managerial level (Acton, 2012). The representation of the interests of workers often goes all the way up the company’s chain of command. The system is considered to be beneficial for the employees and the employers because it provides the venue for avoiding strikes and confrontation. The laws that are in place, specifically the Works Council Constitution Act, often force collaboration to be between the employee and the employer. Labor relation has been encouraged in the global market as well, with jobs and profits being at a risk. It is estimated that the experiences of German automobile manufactures in the United States could influence labor relation in the country in the future (Wever, 1995).

Another difference in the employment systems between the two countries is seen in training where the training method, more specifically the apprenticeship program, in German is considered to be better than what is used in the United States (Locke, 1995). The United States has its traditional way of apprenticeship that goes back many years. However, the practice has fallen out of practice in recent years as many Americans fail to train as apprentices. However, it is not the case in German where many young people still undergo the process, especially in fields such as banking, hospitality, information technology, and manufacturing. Generally, in Europe, the dual training is highly respected as a career path. The dual training aims at encouraging the trainees to split their days between the on-the-job time at the entity and classroom instructions that they get at a vocational school (Lynch, 1994). In dual training, the theory which trainees learn in class is often reinforced by the practices of the company. In addition, they are able to learn responsibilities and work habits. They are also able to absorb the culture of the organization. It is worth noting that the trainees are often paid for their time at work and in class, and the arrangement often lasts for two to four years depending on the industry. Both the employee and the employer often hope that the process will result in a permanent job. The German apprenticeship encourages the employer and the employee to respect the practical work and ensure that the practice becomes more than a short-term training process. It most cases, it is argued that it is hard for most companies in the United States to adopt apprenticeship because it is still expensive in the countries where companies have to start the program and pat school tuition, whereas, in German, the state often pays the tuition. The Americans often talk about the return on investment while the Germans look beyond the return on investment to the benefits in the long-term, for the society and the company.

Wages is another dimension that can be used to support the divergent argument on the national employment systems of the two countries. The factor mainly analyses the CEO remuneration in German and the US. In this case, the remuneration is German is lowest as compared to the US and the rest of Europe. In terms of the share of the basic compensation in the overall pay package then it is higher than in the US. More specifically, the CEOs in German have a higher total cash pay but a low non-cash remuneration, which explains why they have a total remuneration package that is low (Gangl, 2003). Factors that influence the remuneration of managers in German include the performance of the company. In addition, companies that have monitoring house banks often pay managers and the directors less that firms that are widely held.

The divergence between the two countries is also explained by the differences in cultural values or in other words, the difference in what is believed to be desirable. Cultural differences in the two countries result in the differences between the employment policies such as the differences in the remuneration policies as described above.

Argument for the Likely Convergence on National Employment Systems

As a representative of an economic power, the US Multinational Companies are considered to be the future to which the economic behavior and organization are trending naturally. The US model of international human resource management is regarded as the universal model that matches the internationalized operation in a world economy that is dominated by doctrines of free-market liberal capitalism. With globalization, companies all over the world, especially the multinational companies in the US have been forced to adopt the same practices in other countries. It means that there are converging pressures that are exerted through the global integration and the companies transferring their practices (Abramson, 1997). The impact of such practices includes the standardization of some employment through powerful multinational companies that operate both in the United States and in German such as pay and performance.

There have been converging pressures that have been exerted through global integration which results in convergence in the national employment systems of the two countries (Culpepper, 1999). Global integration encouraged different cultures and societies to integrate through a worldwide network of political ideas through communication, trade, and transportation. Generally, globalization has had an effect on many nations socially, politically, and economically. Globalization has affected the culture, environment, and the idea exchange between the US and Germany. The acceleration in globalization is attributed to emerging technologies, worldwide acceptance of markets, and free-trade activities. Globalization has had diverse implication for the human resources issues. There have been positive effects that include diversification of employees that encourage companies in the US and German to standardize their operations such as employment practices. The employment practices are often similar in companies that operate in both countries and often relate to the roles of managers because of the need to reach the common goal of the company (Lippert, 2014). Another employment practice that is usually similar includes the skills that are needed for the particular position. It is especially vital to ensure that the skills are similar to ensure that the competitiveness of the company has been maintained at a global level.

An analysis of the two countries using the Hofstede's cultural value, specifically on the four dimensions indicates that they have similar aspects in their national employment system. More specifically, the two countries are geared toward low power distance where both advocate for equality. The employment practices in these countries advocate for diversity and inclusion of every person. There are also laws that have been put in place to make sure that there is an equal employment opportunity for every person.

Conclusion

German and the United States are among countries that have the biggest economies around the world. In addition, they have many companies whose success, both nationally and internationally, depending on the national employment systems. The national employment systems of the two countries have factors that converge and diverge. From the analysis, it is clear that there are divergent factors in the national employment systems of the two countries. More specifically, the research in this paper indicated that Labor unions in German are stronger than those that are found in the United States. In addition, the apprenticeship program is seen to be better in German than what is used in the United States. Finally, an analysis of wages for top executives indicates that the CEOs’ remuneration in German is lowest as compared to the US and the rest of Europe. However, there are some converging arguments because of globalization, multinational companies in the US have been forced to adopt the same practices in other countries such as Germany. There have also been converging pressures that have been exerted through global integration that result in a convergence in the national employment systems of the two countries. However, even with the analysis, there is the need to go beyond the simple divergence and convergence, and also analyze some divergence and convergence as evident in the hybridization of employment practices.

Reference

Abramson, H. N., Encarnação, J. L., & Reid, P. P. (1997). Technology Transfer Systems in the United States and Germany: Lessons and Perspectives. Washington: National Academies Press.

Acton, Q. A. (2012). Issues in industrial relations and management. Atlanta, Georgia : ScholarlyEditions.

Culpepper, P. D. (1999). The German skills machine: Sustaining comparative advantage in a global economy. New York [u.a.: Berghahn.

Gangl, M. (2003). Unemployment dynamics in the United States and West Germany: Economic restructuring, institutions and labor market processes; with 51 tables. Heidelberg [u.a.: Physica-Verl.

Lippert, I., Huzzard, T., Jürgens, U., & Lazonick, W. (2014). Corporate governance, employee voice, and work organization: Sustaining high-road jobs in the automotive supply industry.

Locke, R. M. (1995). Employment relations in a changing world economy. Cambridge, Mass. [u.a.: MIT Press.

Lynch, L. M. (1994). Training and the private sector: International comparisons. Chicago: University of Chicago Press.

Schmid, G., & Gazier, B. (2002). The dynamics of full employment: Social integration through transitional labour markets. Cheltenham, U.K: E. Elgar Pub.

Wever, K. S. (1995). Negotiating competitiveness: Employment relations and organizational innovation in Germany and the United States. Boston, Mass: Harvard Business School Press.