Strategic Human Resources ManagementAcademic Year 2014 - 2015

Professor Dr. Tim De Feyter

Students: Sam Khabir (r0268750) Yinglan Xuan (r0476169) Nigora Tuychieva (r0478930) Slava Ponchev (r0485600)

Evidence-Based HRSTRATEGIC INTERNATIONAL HUMAN RESOURCES MANAGEMENT

ASSIGNMENT 1 Sam Khabir (r0268750), Yinglan (r0476169), Nigora Tuychieva (r478930), Slava Ponchev (r0485600)

The importance of critical thinking for an HR practitioner Critical reflection

Critical thinking and evidence-based strategy are fundamental for HR practitioners. They improve HR

practices, promote better results from HR decisions, and lead to the development of professional

competencies, all of which has a positive impact on the performance of organizations and HR departments.

The importance of critical thinking in the decision-making process is emphasized by the assumption that critical thinking and evidence HRM lead to better outcomes from decisions. One of the reasons for this is

that critical thinking increases mindful, deliberate decision making. Critical HR practitioners analyze the

situation carefully. They are aware that all people have cognitive limits and are prone to bias in making

decisions. Thus, they use decision frameworks or routines that call attention to assumptions, facts, and

goals- aspects that might otherwise be missed. Furthermore, practices requiring critical thinking develop a

questioning mindset. Thus, critical HR professionals question assumptions, show skepticism when

evaluating information and seek to understand the logic behind decisions. They lack blind faith in what others

argue to be right and effective and search for high-quality scientific evidence to support their choices. In this

way, HR professionals manage to reduce the uncertainty regarding the outcomes of their decisions.

Moreover, mindful HR practitioners consider the interests of affected stakeholders when making decisions

to reduce the risk of unintended outcomes. Although critical thinking and evidence-based HRM can lead to

better results form HR decisions, mindful decision-making or the use of best available scientific evidence

may not always be possible due to time and budget constraints or lack of access to relevant scientific

information. (Rousseau & Barends, 2011)

Critical thinking and evidence-based practices empower HR practitioners and contribute positively to their career. Evidence-based HRM enables HR practitioners to learn about recent trends and scientific studies in areas such as training, selection and feedback and develop their competencies and skills. It also

offers HR professionals the opportunity to build up a network of researchers and other EBHR practitioners,

which represents another possibility to gain knowledge and share constructive ideas. However, despite the

advantages that evidence-based HRM offers to practitioners, the development of new skills in scientific

research and the required ongoing learning may prove resource-intensive in terms of staff, time and money.

(Rousseau & Barends, 2011)

Critical thinking and evidence-based HRM are the first steps towards improving HR practices. This is true because evidence-based HR professionals question the effectiveness of HR practices in their

organizations and actively explore alternatives. Furthermore, EBHRM gives them the opportunity to gain

scientifically- proven knowledge in fundamental HR areas such as selection, training and feedback, on which

they can base their professional activities. Thus, evidence-based practitioners are also able to develop

strong arguments and convince others to use more constructive practices. Moreover, when it comes to new

HR practices, tools provided by scientific research can help them choose those, which will work effectively in

their organization and avoid imitation of practices from other companies based on blind faith. (Rousseau &

Barends, 2011)

In conclusion, HR decisions and practices can impact the future of organizations and their performance, thus

critical thinking and evidence-based HRM are essential for HR practitioners. They result in quality decisions,

effective HR practices and the improvement of professional skills, all of which contribute positively to the

performance of organizations. However, there are some problems associated with EBHRM mainly regarding

having limited access to relevant scientific information as well as a high cost in terms of time and money.

Reference: Rousseau D. and Barends E. (2011). Becoming an evidence-based HR practitioner. Human resource management journal, 21(3), 221-235.

Assignment 1

Strategic HRM STRATEGIC INTERNATIONAL HUMAN RESOURCES MANAGEMENT ASSIGNMENT 2 Sam Khabir (r0268750), Yinglan (r0476169), Nigora Tuychieva (r478930), Slava Ponchev (r0485600) The strategic HR management of Airport Express Train and Southwest Airlines - Critical reflection Airport Express Train and Southwest Airlines improved their business performance and achieved a sustainable competitive advantage through effective HRM by applying an internally consistent set of high-involvement, high-commitment, high-performance HR practices. However, these HR practices have benefits as well as downsides and require accurate and reliable measurement of their effectiveness. Airport Express Train and Southwest Airlines achieved competitive success not through high technology, patents or strategic position, but through the set of internally consistent, high-performance HR-practices the companies applied. According to SHRM researchers high-performance practices influence positively organizational performance by 1. Improving employee knowledge, skills, and abilities (KSAs), 2. Empowering employees to leverage their KSAs for organizational benefit, and 3. Increasing their motivation to do so (Combs, Liu, Hall, & Ketchen, 2006). This leads to greater job satisfaction, lower employee turnover, higher productivity, and better decision making, all of which help improve organizational performance (Combs, Liu, Hall, & Ketchen, 2006). Additionally, a meta-analysis of the relationship between HR and organizational performance including a total of 19, 319 organizations and ninety-two individual studies, conducted by Combs, Lui, Hall, and Ketchen, confirms the positive relationship for HR practices such as these applied at AET and SA - focus on training, high compensation, widespread participation, selectivity in hiring and employment security (Kuvaas & Dysvik). The researchers also found a significantly stronger relationship for systems of internally consistent or aligned HR practices than for individual practices. (Kuvaas & Dysvik). With respect to horizontal fit there is consensus among researchers, that high degree of integration between HR practices lead to the achievement of certain synergies, which will contribute positively to business performance (Garca-Carbonell, Martin-Alcazar & Sanchez-Gardey, 2014). Despite the significant amount of scientific research confirming the positive relationship between internally consistent high commitment HR practices and organizational performance, in the practice these HR strategies not always lead to success and competitive advantage. For instance, it is possible that organizations applying high performance HR practices are unprofitable and those using few or none of them - quite successful. This is due to the fact that other factors such as the technology firms use, their strategic position or patents also play an important role for their business performance. Additionally, with respect to organizational culture, for example in companies, where a significant part of the employees prefer routine and generally resist changes, the adoption of practices that require more effort, responsibility and involvement may force turnover. Furthermore, it is important to emphasize that the competitive success achieved by AET and SA is substantially more enduring and more difficult to duplicate by competitors. The main reason for this is, that the culture and practices that enable a firm to achieve competitive success through effectively managing people are difficult to understand even if they are well described (Pfeffer, 2005). According to Pfeffer it is often hard to comprehend the dynamics of a particular company and how it operates because the way people are managed often fits together in a system and it is easy to copy one thing but much more difficult to copy numerous things" (Pfeffer, 2005). However, although competitive advantage through workforce is easier to sustain and cannot readily be copied by competitors, it takes a lot of time to be achieved and may be beneficial only in the long-run. Therefore, companies, which would like to adapt the successful HR strategies of AET and SA have to first make sure that they can survive in the short-run, where sometimes cutting wages, employment levels and managing through fear can produce good results. The high-commitment practices applied by SA and AET contribute positively to the performance levels of the companies. However, these practices have also potential downsides. In the following, we briefly present the benefits and possible problems associated with the various HR practices implemented by AET and SA. Employment security: According to Pfeffer companies, which offer employment security such as SA and AET, increase employee involvement and productivity, because people are more willing to contribute to the work process when they need not fear their own or their coworkers' jobs (Pfeffer, 2005). Providing job security also helps SA and AET to keep qualified people in their organizations, which may result in cost savings with respect to recruiting and training of new employees. However, employment security creates pressure for the companies to be careful and selective in hiring and invest heavily in training programs (Pfeffer, 2005). Training: Both SA and AET offer training programs with an emphasis on organizational culture, customer service, and communication. AET offers additionally e-learning courses and on-the-job training (Kuvaas & Dysvik). Since training improves the knowledge, skills and abilities of employees and shows the firm's commitment to its employees, it may increase their motivation, job satisfaction and productivity. Nevertheless, training programs are cost-intensive. Therefore, HR practitioners should plan them carefully for instance by clearly defining objectives, linking them to the appropriate training methods and evaluating the training using multiple methods and sources (Griffith, 2015). Pfeffer also argues that training produce

STRATEGIC INTERNATIONAL HUMAN RESOURCES MANAGEMENT ASSIGNMENT 2

Sam Khabir (r0268750), Yinglan (r0476169), Nigora Tuychieva (r478930), Slava Ponchev (r0485600)

positive returns only if the employees are able to employ their skills after the training (Pfeffer, 2005). Decentralization of decision making and self-managed teams: These practices may attract qualified people who are dissatisfied with traditional workplaces (Hartman, 2015). Decentralization of decision making and self-managed teams enable employees' participation, which increases both job satisfaction and productivity (Pfeffer, 2005). Moreover, peer monitoring and expectations of coworkers influence positively the performance of self-managed teams (Pfeffer, 2005). This could explain why self-managed teams by SA achieve very short turnaround times gaining a large cost advantage. AET also saves coordination cost and improves its service by giving its employees on the trains the authority to solve problems immediately on the spot. However, too high expectations of coworkers and pressure may lead to lower job satisfaction, burnout or higher turnover rate (Pfeffer, 2005). Furthermore, although self-managed teams have the potential to improve the performance of individuals, if they are not managed in a proper way some team members may feel unimportant, contribute less to the work process and perform even worse than they would if working individually. Additionally, due to lack of authority figures to take control of situations, problems may sometimes grow, because no team member feels responsible or takes the initiative to find a solution (Hartman, 2015). Sharing of information: Through sharing of information on strategy, financial performance, and operational metrics SA and AET ensure that the employees are enough informed about organizational issues to be involved and send a symbolic message that their people are to be trusted (Kuvaas & Dysvik) and treated in an open and positive manner, all of which contributes to higher productivity. The practice of sharing information also enables the decentralization of decision making process and the effective work of self-managed teams. However, a downside of this practice is the risk of information leakage to competitors. Reduction of status differences: The HR practices of SA and AET reducing status differences among their employees such as a few hierarchical levels and informal, egalitarian atmosphere enhance communication across levels, enable cross-movement in the organizations, encourage cooperation and lead to cost savings. Pfeffer argues that reduction of status differences lead to better communication across levels because of the opportunity to interact in less formal settings (Pfeffer, 2005). Thus, for instance, senior managers are better informed about the work process and can communicate their ideas directly to everyone in the firm. Furthermore, the elimination of social categories in a company may encourage "us" versus "them" thinking, making everyone feel like they are all working together toward a common goal (Pfeffer, 2005). Also, due to fewer status barriers to be overcome cross-movement in the organization becomes easier (Pfeffer, 2005). This HR practice can also lead to extensive cost savings due to the reduction of benefits for top-level workers. However, the elimination of status symbols may be very difficult to implement (Pfeffer, 2005). For instance, some employees (high-level managers, but also workers in entry-level positions) who come from backgrounds in traditional, hierarchical companies, may have difficulties to adapt to an egalitarian structure. And workers who don't feel comfortable in their positions are less likely to engage constructively with colleagues (Hartman, 2015). Selective Hiring: SA and AET are very selective in recruiting and have a large pool of applicants. Both companies emphasize selecting for attitudes and fit with their organizational values and culture. Through a high-level of selectivity SA and AET ensure that they will find the right people and put them in the right position. Due to the fact that selective hiring increases the possibility of job-person and person-organization fit, it may lead to lower turnover, organizational commitment, and higher productivity. Nevertheless, high selectivity in recruiting is very time-consuming and cost-intensive because of coordination and extensive screening of applicants. It also requires a large pool of applicants. High Compensation Contingent on Organizational Performance SA's and AET's compensation practices such as collective pay for performance, profit-sharing, and high wages enhance employee motivation and commitment and decrease the turnover rate. High compensation, for instance, sends a message that the organization values its people, which contributes to lower turnover rate and high commitment. Moreover, high wages attract more applicants, which enables firms to be more selective when hiring people (Pfeffer, 2005). However, high wages are related to significant labor costs in the short-run while positive return on investment may be produced only in the long-run. With respect to employee ownership, Pfeffer argues that it aligns the interests of employees with those of shareholders by making employees shareholders (Pfeffer, 2005). Similarly, bonuses, which are based on the company's profitability encourage employees to identify with the whole firm (Pfeffer, 2005). Additionally, collective pay for performance should increase employee motivation and contribute to more productive teamwork. Finally, accurate measurement of the effectiveness of HR practices is crucial for organizations, which aim to achieve competitive advantage through the workforce. A failure to measure HR policy and practice implementation may hinder these organizations from being successful. Also, feedback from measurements is essential to improve the applied HR practices and learn how effective they actually are with respect to the intended results. (Pfeffer, 2005)

STRATEGIC INTERNATIONAL HUMAN RESOURCES MANAGEMENT ASSIGNMENT 2

Sam Khabir (r0268750), Yinglan (r0476169), Nigora Tuychieva (r478930), Slava Ponchev (r0485600)

References: Combs, J., Liu, Y., Hall, A., & Ketchen, D. (2006). How much do high-performance work practices matter? A meta-analysis of their effects on organizational performance. Personnel Psychology, 59, 501-528 Garca-Carbonell N., Martin-Alcazar F. and Sanchez-Gardey G. (2014). Deepening the consequences of double fit for organizational performance. Management Research Review, 37(12), 1026-1048. Griffith, J. (2015). Training and Development [PowerPoint slides]. Retrieved from https://cygnus.cc.kuleuven.be/webapps/blackboard/content/listContent.jsp?content_id=_14868705_1&course_id=_640250_1&navItem=content_lesson_plan&mode=quick Hartman, D. (2015). Advantages & Disadvantages of an Egalitarianism Company. Retrieved from http://smallbusiness.chron.com/advantages-disadvantages-egalitarianism-company-23291.html Pfeffer J. (2005). Producing sustainable competitive advantage through the effective management of people. The Academy of Management Executive. (19)4. 95-106

Assignment 2

Comparative HRMComparative HRM

STRATEGIC INTERNATIONAL HUMAN RESOURCES MANAGEMENT ASSIGNMENT 3

Sam Khabir (r0268750), Yinglan Xuan (r0476169), Nigora Tuychieva (r478930), Slava Ponchev (r0485600)

It is obvious that the organizations around the world are concerned with their performance level and try to adopt a practice that can help them attain their objectives and target performance level. However, there are clear distinctions between the approaches they may choose to reach a certain goal based on the contextual differences. These cultural differences play an important role in making these practices effective or result in their failure. Many of the values that are considered highly important in one culture might not be reflected in some of the practices and at the same time many of the practice that work well in a specific context and are widely accepted may not be favorable for others in another context. The case of RetailCo in the Netherlands can be a practical evidence proving the importance of the contextual factors while choosing the most suitable practices.

RetailCo differentiates itself from the other retail companies by selling its own brand targeting both upper and lower markets. The takeover of RetailCo by the US-based investment company led it to face the challenges as the differences in values and culture of the companies were very distinct. RetailCos core organizational culture and values are based on such as fairness, job security, promotion from within, egalitarian, collective bargaining and etc. As the organizational culture of the company is the reflection of the values of the Netherlands, RetailCo may benefit by keeping its core organizational culture and values, but at the same time learning from the universalistic approaches to improve its policies and practices, as it corresponds with the culture of Netherlands.

By implementing this approach, the RetailCo provides the opportunity for all workers to contribute equally and share recognition for success. Organizations are ethically responsible towards their employees to provide them a fair working environment. This results in more involvement, trust loyalty and commitment of the employees and it will benefit the firm by being able to attract and develop the best possible human resources for operating in highly competitive markets. The employees satisfaction level and the sense of organizational citizenship is enhanced on the equal level. In the case of RetailCo, it can be seen that many of the practices that considered effective in the home country did not result in the predicted outcomes due to the lack of consistency with the cultural values of the host country. The existence of organizations in the long-term is in pledge of balanced decisions between economic and the contextual specificities including cultural values.

It is crucial for companies to create a balance between the interest of stakeholders and shareholders. The organization needs to take into account the needs of shareholders and respond to their concerns. Difficulties in the creation of a balance between the interest of stakeholders and those of shareholders indicate to the complexity of this issue. There is a risk of incompatibility between the adopted practices and organizational and societal culture which can result in a bad reputation and legitimacy challenges for the organization. In RetailCo, a number of practices after the takeover by the American investors implemented which in some extent resulted in a better cost-management, appraisal system, economic efficiency and flexibility of the organization. However, the loss of trust between the employees and their employers, loss of their intrinsic motivations and loyalty to the organization resulted in a greater dissatisfaction of employees and increase of voluntary turnover which can harm their legitimacy and public image that has large consequences for the company from losing customers to inability to attract qualified employees.

A close monitoring system should be adapted by RetailCo to evaluate the performance of employees and this can result in a higher organizational performance. This appraisal system can help with the evaluation of individuals performance level and differences. Regardless of the overall performance of a group that is low or high, individuals may show differences in their independent performance. When it comes to the performance appraisal of the employees, the role of supervisor close monitoring control, developmental feedback, and personality is essential to detect problems and react on them. (Jing Zhou, 2003). Feedbacks can be given if necessary and corrective actions can increase the performance if implemented properly. In some of the cultures, feedbacks are widely accepted and employees are feedback oriented. Feedback orientation refers to an individuals overall receptivity to feedback, including comfort with feedback, tendency to seek feedback and process it mindfully, and the likelihood of acting

STRATEGIC INTERNATIONAL HUMAN RESOURCES MANAGEMENT ASSIGNMENT 3

Sam Khabir (r0268750), Yinglan Xuan (r0476169), Nigora Tuychieva (r478930), Slava Ponchev (r0485600)

on the feedback to guide behavior change and performance improvement (Manuel London, James W. Smither, 2003). At the same time, feedbacks can erode the employer-employee relationship by reducing the trust level between them. In some of the cultures, the employer-employee relationship based on trust is highly valorized and close controls are considered as an inappropriate behavior towards the employees. Cultural difference is an important element of the evaluation system. Feedback can evoke negative feelings and interfere with its acceptance (Sergeant et al., 2008).

It is also believed that high employee satisfaction result in a low turnover rate in the company. A low turnover rate can help the organizations save costs related to recruitment and training cost and time and at the same time prevent drops in their productivity level. It is important to mention that this approach limits the flexibility of the organization and employees who may not perform at their utmost level but remain in the organization and result in inflexibility for the organization for hiring external qualified candidates. The reason is the promotion from within the organization can be pivotal for the organization in long-term, as it motivates employees perform better and remain loyal and saves high training cost of new entrants.

Motivations such as salary are considered as extrinsic values and values such fairness and the opportunity to promote to higher positions are intrinsic values. Staffing policies significantly affect the buyers intrinsic motivation and commitment to their firms. (The Impact of Staffing Policies on Retail Buyer Job Attitudes and Behaviors, Ganesan & Weitz, 1996). Unfortunately, it makes more difficult to hire qualified managers from outside, as rewarding system is based on collective bargaining agreement can lead to high-performance workplace where labor and management jointly engage in problem-solving, addressing issues on an equal standing.

Organizations conform to contextual expectations in order to gain legitimacy and increase their probability of survival (Greenwood & Hinings, 1996). HR strategies, in other words, need to have external fit with business strategies and vertically integrated with them (Fomburn et al., 1984, Guest 1987, Schuler and Jackson 1987, Pfeffer 1998). Considering the contextual factors, it is the contingency approach that appears most convincing. Discrepancies in the adopted HR practice with the organizational culture may have both performance and societal. But the context itself is not the only determinant element as even in the same context organizations adopt different approaches and also encounter different outcomes. Institutional and strategic choice factors influence the shaping of HRM policies and practices and, therefore, have an impact on the HRM and firm performance linkage (Paauwe & Boselie, 2003). In addition to external fit, it is also argued that there needs to be internal fit between different aspects of HR strategy. This horizontal integration of HR means that HR strategy needs to achieve a high level of compatibility of its various elements, not creating policy conflicts between them. Human Resource Management in Context, (Farnham, 2010).

REFERENCES:

1. Bjrkman, I., & Stahl, G. (2006). International human resource management research: an introduction to the field. In: G. Stahl & I. Bjrkman (Eds.) Handbook of Research in International Human Resource Management, 1-11. Massachusetts: Edward Elgar Publishing.

2. Brewster, C. (2006). Comparing HRM policies and practices across geographical borders. In: G. Stahl & I. Bjrkman (Eds.) Handbook of Research in International Human Resource Management, 68-90. Massachusetts: Edward Elgar Publishing.

3. Paauwe, J., & Boselie, P. (2007). HRM and Societal Embeddedness. In: P. Boxall, J. Purcell & P. Wright (Eds.) The Oxford Handbook of Human Resource Management, 166-184. New York: Oxford University Press.

Retailco. should have a balanced HR practice based on

competitive advantage and the

contextual specificities

including cultural values

Before

Implementing the egalitarian approach can create a desirable environment for

the employees and enhance the performance of the company

BecauseIt corresponds with the culture in the Netherlands as they are in favor of strong egalitarian and lower

power distance

Theoretical ArgumentResearch on societal cultures shows the

Netherlands to have a culture typified by strongly egalitarian (low power distance) and individualistic

and relatively "feminine" and caring values.

Theoretical ArgumentIn a society in which equality is a basic value, the hierarchical nature of many

organizations forces a sometimes discomforting confrontation with

inequality.

Culture's Consequences: Comparing Values, Behaviors, Institutions and

Organizations Across Nations. 2nd Edition, Thousand Oaks CA: Sage Publications, (Geert

Hofstede, 2001)

Global Human Resource Management Casebook, (Corine Boon and Deanne N. Den

Hartog, 2012)

The Uniqueness Paradox in Organizational Stories (Joanne Martin et. al., 1983).

BecauseIt provides the opportunity for all workers to

contribute equally and share recognition for success

AssumptionOrganizations are ethically responsible towards their employees to provide them a fair working

environment

ButWorkers attempt to adapt to an egalitarian

structure may not be successful, especially if they come from a background in traditional,

hierarchical companies

Empirical EvidenceThe gray side of equality, (A. Mostafavi, 2008)

Providing a great level of job-security can benefit the organization

BecauseEmployees become more innovative

AssumptionEmployees are concerned with their status in an

organization

Theoretical ArgumentEmployees more curiosity and

enthusiasm for developing new ideas when they feel confident about their position and status in an organization

Empirical EvidenceInternational Journal of Manpower,

Satisfaction with job security as a predictor of organizational

commitment and jobperformance in a multicultural environment, (DA

Yousef, 1998).Because

Employees become committed to the organizationEmpirical Evidence

International Journal of Manpower, Satisfaction with job security as a predictor of organizational commitment and jobperformance in a

multicultural environment, (DA Yousef, 1998).But

Employees may not perform at their utmost level and they remain in the organization and result in

inflexibility for the organization

Empirical EvidencePerformance evaluation in work environments, Institute for

the Study of Labor, 1998.

Future-orienented recruitment (hiring people with highest potential to grow

within the organization) and those who fit into the culture of the

organization is a positive practice

Becauseit may lead to the minimum amount of compulsory redundancies as well as a decrease in the turnover

of employees

Empirical EvidenceThe American Psychological Association, (Mobley et. al., 1972)Review and conceptual analysis of the employee

turnover process.

Butit involves a lot of investment and training cost

InterpretationThe organization will remain committed for providing the training the

individuals need to acquire the necessary skills which is costly and time consuming,

Promotion from within the organization can be pivotal for the

organization in long-term

Becauseit motives employees perform better and remain loyal and saves high training cost of new entrants

AssumptionMotivations such as salary are considered as extrinsic values and values such as fairness and opportunity to promote to

higher positions are intrinsic values

Theoretical ArgumentStaffing policies significantly affect the

buyers intrinsic motivation and commitment to their firms.

Empirical EvidenceThe Impact of Staffing Policies on Retail Buyer

Job Attitudes and Behaviors, (Ganesan & Weitz, 1996).

Butit makes it more difficult to high qualified

managers from outside

Offering above-average pay and benefits to attract workers can help the organization improving its

performance level

Becausebenefits can attract workers who are more

productive than you could otherwise hire that can be a viable strategy.

BecauseEmployees with above-average salary are more likely to have higher than average performance

Theoretical ArgumentThe theory predicts that average

productivity rises, that the firm will attract a more able work force and that the variance in output across individuals at the firm will

rise as well.

Empirical evidenceThe National Bureau of Economic Research (The United States), Performance Pay and

Productivity (Edward P. Lazear, 1996).

ButIt can be successful only if highly qualified

employees and potentials are recruited

AssumptionFirms are motivated by self-interest, are rational actors, & are risk-

averse. Therefore, they try to motivate their employees by controlling their incentives

Providing job specific training for the employees and evaluating them based on a clear and proper appraisal matric

can help the employees perform better their tasks and improve the

performance of the organization and enable the employers to have a good insight about different performance

levels

BecauseThe expected performances and behavior as well as the evaluation criteria is well-communicated

with the employees and a specific training regarding their specific task enables them to

develop those skills

InterpretationIt provides insight into which skills and behaviors are expected in each of

the different jobs in a store. Each employee's skills and behaviors are compared with the desired skills and behaviors recorded in the matrix.

The resulting similarities and differences serve as input for the performance appraisal.

Global Human Resource Management Casebook, (Corine Boon and Deanne N. Den Hartog,

2012)

ButSolely relying on training may not make the

employees the desired proficiency afterwards

Interpretation"Worker training or mentoring is a skill in itself for which people need to be trained & if they are not and the training is delivered to the workforce

piecemeal, is not planned sufficiently" (J.Durhan, 2014).

ButIt might not be cost-effective

Theoretical Argument"From financial point of view, hiring external training is not always

necessarily cost effective"

(Jeff Durham, 2014), http://www.exploreadultlearning.co

.uk/job-training-pros-cons.html

Rewarding based on collective bargaining agreement can lead to high-

performance workplace where labor and management jointly engage in

problem-solving, addressing issues on an equal standing.

Becauseeverybody's word can be heard as it provides

legally based bilateral relationship.

Theoretical ArgumentIt promotes fairness and consistency in employment policies and personnel decisions within

and across institutions, (The journal of The University of Maryland, Baltimore County).

ButIt may result in the loss of information

transparency

Theoretical ArgumentDisproportionate effect of relatively few active employees on the many in the bargaining

unit. This is particularly the case when collective bargaining involves a system-wide structure of elections, (The journal of The University of Maryland, Baltimore County).

Flexible choice of working hours/department may result in

difficulties for the company

Becauseemployees may resist changes and result in

inflexibility for the company

Theoretical Argument"Employers and workers have different interests (Fox, 1974) and,

therefore, will respond differently to HR initiatives that might typically be perceived as promoting organizational rather than

worker interests and outcomes"

Testing universalistic and contingency HRM assumptions across job levels, (Clinton & E. Guest, 2013).

ButIt can counteract the employees' dissatisfaction,

boredom, and tediousness

AssumptionTwo aspects of flexible arrangement of working hours are considered:

one more subjected to company control and decision (variability) and one more connected to individual discretion and autonomy (flexibility)

Theoretical ArgumentHaving people do multiple jobs has a number of potential benefits. The

most obvious is that doing more things can make work more interesting variety is one of the core job dimensions that affect how

people respond to their work. Variety in jobs permits a change in pace, a change in activity, and potentially even a change in the people with whom one comes in contact, and each of these forms of variety can

make work life more challenging.

Influence of flexibility and variability of working hours on health and well-being, (Costa et. al., 2006).

The Academy of Management Executive, orgProducing Sustainable Competitive Advantage through the Effective

Management of People [andExecutive Commentary], (Jeffery et. a.l, 2005).

Evaluating positively and in an informal way without a determined apprisal

procidure is not sufficient individually

BecauseIt does not provide a good insight regarding which

employees are not performing well.

Empirical evidenceGlobal Human Resource Management Casebook, The case of Retailco.

(Corine Boon and Deanne N. Den Hartog, 2012)

ButInformal evaluation & feedback can be a prompt

approach when tasks are being done improperly.Employees can become aware of their improper behaviors & take the corrective actions

based on the received feedbacks.

Theoretical ArgumentThere are two types of feedbacks: Informative and Evaluative. Informative feedback tells the performer what behaviors are necessary for successful

performance of the job, and evaluative feedback informs the performer about whether s/he is performing successfully on the job. Both types are necessary

for the performer to meet his/her goals

Sources of feedback: A preliminary investigation. Organizational Behavior and Human

Performance, (Greller, M.M., & Herold, D.M,1975)

After

Before Take-overAssignment 3

Retailco. should have a balanced HR practice based on competitive advantage and the contextual specificities including

cultural values

Before

After

Adopting excessive central management approach can harm the organization performance

BecauseIt may result in the dissatisfaction of the

employees lacking the minimum autonomy that might be on the contrary to their cultural belief

and expectation

AssumptionCultural differences play an important role in the

preference of individuals when it comes to autonomy at work

AssumptionFirms are seeking a balance between their

performance level and their employees' work satisfaction

Theoretical Argument"In some of the cultures, individuals find meaning in his or her own uniqueness, who seeks to express his or her own internal

attributes (preferences, traits, feelings, motives) and is encouraged to do so. As a result, their performance is directly

affected by the degree of freedom they have in their tasks"

A Theory of Cultural Values and Some Implications for Work (Shalom H. Schwartz, 1999)

ButIt can standardize the behaviors and spread the expected performance and organizational culture

AssumptionIn some of the cultures dependency on others is

the preferred and common practice.

"Sharing common beliefs helps societies establish and reinforce standards and expectations among coexisting.

Individuals' abilities to live up to established expectations and reflect the common cultural identity inform the extent to which they may advance through life successfully with the benefits

and privileges of their societies' resources. Such expectations give societies the order and structure that holds them together,

helps them run smoothly and allows them to thrive" http://goo.gl/bTmMcz E.D. Johnson

A close monitoring system is a useful tool for the organizations to evaluate the performance of

employees and can result in a higher organizational performance

BecauseIt can help with the evaluation of individuals'

performance level and differences

Theoretical ArgumentRegardless of the overall performance of a group

that is low or high, individuals may show differences in their independent performance

When it comes to the performance appraisal of the employees, the role of supervisor close monitoring control,

developmental feedback, and personality is essential to detect problems and react on them. (Jing Zhou, 2003)

Becausefeedbacks can be given if necessary and

corrective actions can increase the performance if implemented properly

Theoretical ArgumentIn some of the cultures feedbacks are widely

accepted and employees are feedback oriented

"Feedback orientation refers to an individual's overall receptivity to feedback, including comfort with feedback,

tendency to seek feedback and process it mindfully, and the likelihood of acting on the feedback to guide behavior change and performance improvement" (Manuel Londona ,James W.

Smitherb, 2003).

ButIt can erode the employer-employee relationship

by reducing the trust level between them

Theoretical ArgumentIn some of the cultures, the employer-employee

relationship based on trust is highly valorized and close controls are considered as an inappropriate

behavior towards the employees

Cultural difference is an important element of the evaluation system. Feedback can evoke negative feelings and interfere

with its acceptance (Sergeant et. al., 2008).

Low level of union involvement can potentially reduce the performance of the company in long-

term

ButUnions can result in inflexibility for the company

and also lower their competitive advantage.

Theoretical ArgumentIn some of the contexts, unions are seen as very pragmatic organizations that seek to improve the economic and social

conditions of their members, focusing on improving the conditions of employment in the short run, primarily through

collective bargaining.

"Unions can have the power to impede a company's ability to compete and thrive. A firm might be in desperate trouble, yet its

unions may be unwilling to bend or compromise in order to help the company survive. Many employers find themselves left very inflexible

when they have union contracts to abide by. Meanwhile, if a union negotiates high wages for workers at a company, it may lead the

company to charge higher prices for its offerings, which can make it less competitive with rivals" Selena Maranjian. http://goo.gl/wAVFHy

BecauseEmployees' voice, needs, and demands cannot be heard and may result in their dissatisfaction

and consequently lower performance level

AssumptionFirms should ideally perform in a democratic system and pay attention to their employees'

needs and concerns

Academy of management journal. Employee Voice and Employee Retention

(Daniel G. Spencer, 1982).

BecauseThe minimum requirements such as safety or

health measures might be neglected and result in disasters for the company

AssumptionCompanies should be responsible towards their

employees and provide them appropriate working conditions

The Board of Regents of the University of Wisconsin System Job Satisfaction, Wages, and Unions (George J. Borjas, 1979).

Having a low job-security in an organization can have a negative impact on its performance level

BecauseThis can result in the dissatisfaction of the employees and lower their performance

especially in the context in which high job-security is an important value

AssumptionSatisfaction with job security is an element of

organizational commitment and job performance

When assessing the desirability of labour market reforms towards flexible labour market policies, the issue of job

insecurity and its effects on job satisfaction are important to policy makers as low job satisfaction implies lower productivity

(Wright et al, 2002).

ButIt can result in the inflexibility for the organization

and those employees that are not performing properly will remain in the company that has negative impact on its overall performance

AssumptionProviding high level of job security retains employees

at the organization and give few options to the employers to make the necessary changes

The Effect of the Employment-at-Will Rule on Employee Rights to Job Security and Fringe Benefits (J

DeGiuseppe Jr - Fordham Urb. LJ, 1981).

Variable payment system may not correspond with the cultural values of a country (The

Netherlands in this case) and result in

Becausein Some of the cultures differences are not

accepted and consider it as an unfair behavior which can result in negative consequences for the

company

AssumptionVariable compensation strategy is used as an incentive

to enhance the performance of the individuals

Empirical Evidencedifferent groups of employees are likely to respond differently in their distributive justice evaluations of

the fairness of criteria used to determine pay.

Journal of Academy of Management, Agency Theory and Variable Pay Compensation Strategies(Linda K. Stroh et. al., 1996).

The Journal of Business and PsychologyEmployees' Perceptions of the Distributive Justice of

Pay Raise Decisions: A Policy Capturing Approach, (James Dulebohn,; Joseph J., 1998)

ButVariable pay system can motivate individuals to perform better as they can be compensated with

higher amount

AssumptionThere are significant unanticipated costs in management time, administration and staff

recruitment and training as a result of pay system change through applying the framework developed,

identifying the relative effectiveness of the pay systems and illustrating the scope for organizational

context to influence pay system outcomes

The International Journal of Human Resource Management, The outcomes of variable pay systems: tales of multiple costs and

unforeseen consequences (Annette Cox, 2007).

A high level of out-sourcing can have a negative impact on the company as it may lose its

legitimacy

BecauseA high level of outsourcing to foreign countries will

be accompanied with a high number of lay-offs that can harm the image of the company in the

long-run

AssumptionMany firms out-source to foreign countries where the

costs of inputs are lower

AssumptionFirms are responsible towards the impact of their

decision on the society

AssumptionThe public image of a company has direct influence on

its legitimacy that impacts its overall performance

The Scandinavian Journal of Economics, The impacts of technology, trade and outsourcing on employment and labor composition (CJ

Morrison Paul et. al., 2002).

ButIt can improve the flexibility of the company and

its ability for cost control

InterpretationCompanies are concerned with their performance and

survival do they reserve different practices for themselves to promote their flexibility in difficulties

Journal of Management, Making More by Doing Less: An Analysis of Outsourcing and its Effects on Firm Performance (K. Matthew Gilley,

Abdul Rasheed, 2000).

Providing general training programs for the employees and evaluating them based on the competencies that are important in the home

country might not be effective

BecauseEvaluating the employees based on the

competencies that do not match with the contex and their organizational culture mployees in the

host country influences their desire and willingness to perform better

AssumptionDifferent wokring contexts require different type of

trainings in order to be effective

The Structure of Wages and Investment in General Training, Daron Acemoglu, Jorn-Steffen Pischke, 1998)

ButTrainers often have the experience of working in

the industry and can teach to industry-accepted standards

Empirical evidencehttp://goo.gl/BmT838

After Take-overAssignment 3

Retailco. should have a balanced HR practice based on competitive advantage

and the contextual specificities including

cultural values

Retailco. should keep its core organizational culture and values such as fairness, job security, promotion from within, egalitarian, collective

bargaining and etc. but at the same time learn from the the universalistic approaches to improve its policies & practices.

BecauseIt corresponds more with

the culture in the Netherlands

Theoretical ArgumentCorresponding with the

societal factors like internal equity, fairness,

and legitimacy,improves the companys reputation as well as its societal performance.

Handbook of research in international human

resource management, International human

resource management, and firm performance

(Jaap Paauwe and Elaine Farndale, 2006)

BecauseIt provides the

opportunity for all workers to contribute

equally and share recognition for success

AssumptionOrganizations are

ethically responsible towards their employees

to provide them a fair working environment

BecauseIt results in more involvement, trust

loyalty & commitment of the employees

BecauseIt will benefit the firm by being able to attract and develop the best possible

human resources for operating in highly

competitive markets.

BecauseIt enhances the

employees' satisfaction level and promotes the sense of organizational

citizenship

AssumptionHigh employee

satisfaction result in a low turnover rate in the

company

Theoretical ArgumentLow turn-over rate can help the organizations save costs related to

recruitment and training cost and time and at the same time prevent drops

in their productivity level.

ButIt limits the flixibility of

the organization and employees who may not perform at their utmost level but remain in the organization and result in inflexibility for the organization for hiring

external qualified candidates

BecausePromotion from within the

organization can be pivotal for the organization in long-term

Becauseit motives employees

perform better and remain loyal and saves

high training cost of new entrants

AssumptionMotivations such as

salary are considered as extrinsic values and

values such as fairness and opportunity to promote to higher

positions are intrinsic values

Theoretical ArgumentStafing policies

significantly affect the buyers intrinsic motivation and

commitment to their firms.

Empirical EvidenceThe Impact of Staffing

Policies on Retail Buyer Job Attitudes and

Behaviors, (Ganesan & Weitz, 1996).

ButIt makes it more difficult to have the high qualified

managers from outside

BecauseRewarding based on collective bargaining

agreement can lead to a high-performance

workplace where labor and management jointly

engage in problem solving, addressing issues on an equal

standing.

Becauseeverybody's word can be

heard as it provides legally based bilateral

relationship.

Theoretical ArgumentIt promotes fairness and

consistency in employment policies and

personnel decisions within and across

institutions, (The journal of The University of Maryland, Baltimore

County).

ButIt may result in the loss

of information transparency

Theoretical ArgumentDisproportionate effect of relatively few active employees on the many in the bargaining unit. This is particularly the case when collective bargaining involves a

system-wide structure of elections, (The journal of The University of Maryland, Baltimore

County).

BecauseThe organization needs

to also take into account the needs of

shareholders and respond to their

concerns.

Assumptionit is crucial for

companies to create a balance between the

interest of stakeholders and shareholders

ButThere is a risk of incompatibility between the adopted

practices and organizational and sosietical culture which can result in bad reputation & legitimacy challenges for the

organization.

AssumptionA close monitoring system should be adopted by Retailco. (which can be learned from the American appraisal system) to evaluate the performance of employees and can result in a

higher organizational performance

BecauseIt can help with the

evaluation of individuals' performance level and

differences

Theoretical ArgumentRegardless of the overall performance of a group

that is low or high, individuals may show

differences in their independent performance

When it comes to the performance appraisal of the employees, the role

of supervisor close monitoring control, developmental feedback,

and personality is essential to detect problems and react on them. (Jing

Zhou, 2003)

Becausefeedbacks can be given if necessary and corrective actions can increase the

performance if implemented properly

Theoretical ArgumentIn some of the cultures feedbacks are widely

accepted and employees are feedback oriented

"Feedback orientation refers to an individual's overall receptivity to feedback, including comfort with

feedback, tendency to seek feedback and process it mindfully, and the likelihood

of acting on the feedback to guide behavior change and performance

improvement" (Manuel London ,James W. Smither, 2003).

ButIt can erode the

employer-employee relationship by reducing the trust level between

them

Theoretical ArgumentIn some of the cultures, the

employer-employee relationship based on trust is highly valorized and close

controls are considered as an inpproperiate behavior towards the employees

Cultural difference is an important element of an evaluation system.

Feedback can evoke negative feelings and interfere with its

acceptance (Sergeant et. al., 2008).

ButIt can result in more inflexibity for the

organization and impede their economic golas in

some extend

AssumptionOrganization has to take

into account a wider range of stakeholders

than merely shareholders which should integrate

both economic and relational rationality.

The dominant coalition must balance competitive demands to gain competitive

advantage against institutional demands to gain legitimacy.

Becausewhen the firm focuses merely

on competitive pressure, financial performance may

improve, but at the same time the company faces the risk of

losing legitimacy and damaging its reputation.

when the firm focuses merely on competitive

pressure, financial performance may improve,

but at the same time the company faces the risk of

losing legitimacy and damaging its reputation.

ButIt is not an easy task to prioritize either of the

option

Theoretical ArgumentThere are also

differences in opinions on what factors should

be considered in the firm performance

Organizations conform to contextual expectations in order to gain legitimacy and increase their

probability of survival (Greenwood &Hinings, 1996).

BecauseHR strategies, in other

words, need to have external fit with

business strategies and be vertically integrated with them (Fombrun et al 1984, Guest 1987, Schuler and Jackson 1987, Pfeffer 1998).

AssumptionConsiderting the

contextual factors, it is the contingency approach

that appears most convincing

BecauseDiscrepancies in the adopted HR practice

with the organizational culture may have both

performance and societical

ButThe context itself is not

the only determinant element as even in the

same context organizations adopt

different approaches and also encouter different

outcomes

Theoretical ArgumentInstitutional and

strategic choice factors influence the shaping of

HRM policies and practices and, therefore, have an impact on the

HRM and firm performance linkage (Paauwe & Boselie,

2003).

Theoretical Argument"In addition to external fit,

it is also argued that there needs to be internal fit

between different aspects of HR strategy. This horizontal

integration of HR means that HR strategy needs to

achieve a high level of compatibility of its various

elements, not creating policy conflicts between them." ,

Human Resource Management in Context,

(Farnham, 2010)

ConcusionAssignment 3

Contexually-based HRMSTRATEGIC INTERNATIONAL HUMAN RESOURCES MANAGEMENT

ASSIGNMENT 4 Sam Khabir (r0268750), Yinglan Xuan (r0476169), Nigora Tuychieva (r478930), Slava Ponchev (r0485600)

There is an increasing need, because of continuous globalization, to learn systematically from those management

practices regarded as the most successful, no matter where in the world they originated (Levitt, 1983). Not only are

specific companies being investigated when analyzing competitive advantages; in addition, country-specific

management models are increasingly selected and their strengths and weaknesses compared with one another

(Porter, 1990; Garten, 1993; Thurow, 1993). This study aims to promote a better understanding of how management

practices of some major economies and HR policies may not be implemented in other countries context.

More specifically, this study examines the mini-job policy which was introduced in Germany in 2003 under the social

democratic chancellor Gerhard Schrder as part of a wide-ranging labor market reform. German "mini-jobs" are

precarious employment for up to 400 per month. Mini-jobbers" are exempted from tax and social insurance

payments for earnings of up to 400, and employers' social insurance contributions are considerably below those

for equivalent regular jobs.

The introduction of minimum hourly salaries can rarely help to solve the problems associated with the policy. Due

to the insurance cost, most of the companies and employees are reluctant to turn a mini-job into a paid job. Unlike

paid internships, mini-jobs usually leaned to remain mini-jobs. The assumption was that employers would eventually

hire mini-jobbers on a permanent basis, as the contextual incompatibilities of the policy to the other countries still

remain intact. The contextual variation between the countries arises a wide range of issues that is different than

that of in Germany. It can shorten the gap of wage inequalities between the mini-jobbers and their fully employed

colleagues. This can be in contrast with the aim of giving more cost-management flexibility to the employers in

some extends. Short working hours is not an answer to problems like in-work poverty and the government has no

business diverting people who would be happy working longer hours into such jobs. German unions say that

evidence shows that mini-jobs create a low pay wage trap and permanent, low skilled employment and may be

discriminatory under German labor law. Over 7 million Germans work at mini-jobs, and for most of them it is their

only source of income and poverty in work is on the increase and income inequality is growing faster in Germany

than in any other western European economy. Aside from the cap of 450 per month, company mini-jobbers are

typically paid a lower wage than their fully employed colleagues. The majority of mini-jobbers receive less than 7

per hour in Germany (58% earning less than 5 an hour.)

If the strategy of mini-jobs is going to be adopted in other countries, there should be a comprehensive contextual

understanding of that country in order to make a tailor-made version of the policy. Organizations conform to

contextual expectations in order to gain legitimacy and increase their probability of survival. But the suggested

theory by Oliver (1991) states that As organizations use different strategies to respond to institutional pressures,

similar environmental conditions do not necessarily lead to similar outcomes. There should be a balance between

the competitive pressures and institutional pressures in order to develop and shape HRM policies and practices,

and the related firm performance outcomes.

REFERENCES:

1. Levitt, T. (1983). The globalization of the markets. Harvard Business Review, 3, 92102.

2. Paauwe, J., & Farndale, E. (2006). International human resource management and firm performance. In: G. Stahl & I. Bjrkman (Eds.) Handbook of Research in International Human Resource Management, 91-112. Massachusetts: Edward Elgar Publishing.

Assignment 4

Sam -Yinglan