Abstract
Human Resource is an important component of an organization. Culture plays a big part in influencing the operation of human resource management. It is important for a human resource manager to be aware of different cultural nuances existing in the world to manage diversity in the work place. Before determining the effect of cultural influence on human resource management it is very important to view cultures on the basis of certain criterions such as power distance, individualism, collectivism, masculinity, femininity and uncertainty avoidance. This paper has highlighted how the predominance of these criterions has shaped the HRM practices in different countries around the world.
Introduction
The influence of culture is felt at every stage of Human Resource Management right from the selection and recruitment of staffing to training, evaluation, feedback and exit interviews. It is very important, therefore, to be aware of the differences in cultural nuances to effectively work in a culturally diverse organization. It is not possible to know every cultural norm of different cultures but an awareness of the existence of these cultural norms in the workplace would help an HR manager communicate with people of varied cultures more effectively without misinterpreting any information or body language. According to Hofstede, “cultures differ in at least five ways that may have important implications for understanding business” and therefore, in order to understand the effect of cultural differences on HRM practices in a company, we need to understand the basic criterions that define a particular culture ((Ivancevich, 2010, p. 97). This paper would highlight four different cultural criterions and analyze how HRM practices vary on the basis of cultural differences.
Cultural Criterions and HRM Practices
Power Distance
Power distance refers to the unequal distribution of power and wealth to that extent in which the less powerful have no qualms in accepting the unequal distribution of power. People belonging to power distance culture believes that people are not equal in this world and that some are vested with more power and some are with less and the less powerful are dependent on the more powerful people. Some typical common characteristics of power distance culture are autocratic leadership, multiple hierarchical levels, centralized authority and unequal power and wealth distribution. Countries which score above 70 on cultural scale of Hofstede’s analysis are Indonesia, Malaysia, Iraq, Kuwait, Nigeria, and Singapore. Countries which have less power distance include Denmark, Israel, Ausria and Ireland.
Indonesia is a country which scores 78 on cultural scale of Hofstede’s analysis. The prevalence of power distance is reflected in the work culture of Indonesia which exudes the mentality of parochial culture in which more attention is given to social relations, family relationship, personal background and less attention is given on competency and capability of someone to perform a task (Susilowati et al, 2012). The main authority to take decision is vested on one single powerful person who might be the founder or owner of the organization and employees look up to this person for every decision taken on their destinies. Needless to say, HR practices related to hiring, promotion and termination everything is dependent on the decision of this one person. Subordinates depend on the leaders to make all the important and difficult decisions which they comply with without contest.
In comparison in countries with low power distance like Canada, USA and Australia, employees frequently ignore the advice and judgments of their bosses or supervisors to have their work accomplished. They are free to take independent decisions and express their opinion to their bosses. They feel comfortable with greater amount of responsibility and autonomy. This attitude can also be seen in Denmark and Israel in which power distance is low and hence individuals are empowered to take organizational decisions without help from their supervisors.
Individualism – Collectivism
Individualistic culture fosters give and take relationships based on profit and loss. People in this culture give utmost priority to their own interests, goals and needs over others. This culture values independence and self-sufficiency and puts self-interests high above collective interests. Personal enjoyment and fun are given more importance than social norms. Collectivistic culture on the other hand encourages people to behave in accordance with social norms to maintain a semblance of harmony among group members. People in collective culture share resources and are willing to sacrifice their own interests for interests of others.
Collectivism is the core of Japanese culture which encourages people to give more priority to the interest of the groups than their own and foster a good bond with the group members. Japanese people are known to be loyal and risk averse and this shows in the HR practices in Japan. On the other hand, American culture is individualistic and it reflects in the work culture of the USA. Compared to US counterparts, Japanese firms practice high level of informal communication and decentralized decision making. Collective responsibility is given more preference over individual responsibility. Compared to the US culture which goes by hire and fire policy, Japan cherishes the policy of lifetime employment in which a considerable percentage of the workforce continues to work for the same company right after graduation till retirement. Due to the policy of lifetime employment in place, Japanese HR needs to be really careful while hiring employees. Their key concern remains to choose the right employees who will remain loyal and dedicated to the organization. On the other hand, in USA it is the least concern for employers to promote loyalty among workers. US goes by the policy of at-will employment in which an employer can fire an employee without any legal liability at any time without any reason or for a petty reason, excluding an illegal one (NSCL). Further, employers can modify the terms of employment at will without any prior notice. For instance, an employer can stop benefits, decrease paid time off and alter wages. This at-will policy leaves employees susceptible to sudden arbitrary dismissal and undeclared cuts in benefits and remuneration.
In Japan there are restrictions against arbitrary terminations. The Japanese government gives incentives to the companies which hire and retain aged employees and companies are liable to receive subsidies if they offer extended employment or reemployment to disabled people. In Japan there are various levels of pre-hiring and pre-screening processes in place to cull out the best candidates. After the selection of an employee, he is put on a probationary period during which the employer may terminate him if he proves to be extremely incompetent and unqualified (Havey). Since restrictions on termination of employees is also applicable to terminating someone from service during probationary period, it is the job of the HR to include provisions in the employee contract that would make dismissal of an employee during probationary period easier if he is found to be incompetent. Furthermore, in Japan the renewal of the fixed term employment contract converts automatically to lifetime employment under the 2008 Labor Contract Act.
Masculine and Feminine Culture & Uncertainty Avoidance
In masculine culture the gender roles are clearly differentiated. Men are meant to be tough and assertive and women are meant to be soft and tender. The society is very materialistic. Religion is very important in masculine culture with men having the right to be only priests. There is a staggering wage gap between men and women with very few women holding managerial positions. Family structure is traditional with the roles of men and women being clearly distinct. In Feminine culture, the gender roles are interchangeable and the society is relationship oriented. Religion has less importance in the society with men and women having equal rights to become priests. Wage gap between men and women is small and the number of women in managerial positions is higher. Family structure is flexible and gender roles are not differentiated.
Uncertainty avoidance refers to the extent to which members of a society accept changes and deal with the uncertainty of the future. The ambiguity of future evokes anxiety and different cultures show different mechanism to cope with the anxiety. Emphasis is laid on the extent to which the people of a particular society feel threatened by the uncalled for circumstantial developments and have created policies and beliefs in attempt of avoiding the ambiguity reflects the uncertainty avoidance parameters of a country. Cultures where high uncertain avoidance prevails avoid risk with organizations clearly maintaining written rules, defined structures and standardized procedures. Respect is given to the authority and promotions are based on seniority of age. Gender roles are traditional. Cultures with weak uncertain avoidance are more risk taking, show tolerance for different opinions and organizations have fewer rules and regulations in place and the structure is flexible. Promotions are based on merit rather than age.
The Arab World which includes countries like Iraq, Egypt, Libya, Kuwait, Saudi Arabia, and the United Arab Emirates shows the cultures of collectivism, masculinity, distance power and avoidance of uncertainty. The Arab world being a collective society believes in team participation and concerted effort to accomplish goals and objectives compared to the individualistic society like USA which puts more emphasis on individual performance and fulfillment of goals. There is a huge power distance in the entire Arab world with huge authority and power concentrated in the hands of few and that shows in the workplace too where bosses are the decision makers and rulers of their employees' destiny. The Arab world also shows high avoidance of uncertainly and hence the organizations avoid risks at all cost by making attempts to predict and control future (Hofstede, 2009). Therefore, the HR manager needs to be quite tactful and cautious as the ultimate power resides in the hands of the leaders who develop laws, rules and regulations to strengthen their own power and control. Since the Arab world has high predominance of masculinity in the culture with very little freedom allowed to females, some organizations in order to prevent the effect of glass ceiling offer the same growth opportunities to their female employees as the males.
Sweden is feminine country where gender roles are interchangeable with less wage gap between men and women and more women holding managerial positions. In Sweden the issue of decentralization of HRM is considered very important and HR practices have been organized into the system of both public and private sectors on a step by step basis over decades. Sweden assigns most of the HRM practices to agencies or unit including responsibilities related to management of employment and working conditions. There exists a culture of co-operation between employees and employers. The recruitment process is highly based on merit and skills with hiring targets fixed for disabled people and women. Equal and flexible wage system helps foster good employee relations. Performance assessment is a very important factor in Sweden with written assessment and 360 degree feedback in place. Performance assessment is crucial to career growth and remuneration.
Conclusion
Cultural influence is felt at every step of the way of human resource management right from the selection and recruitment of employees to exit. This paper has highlighted different cultural criterions as described by Hofstede and how the cultural differences have affected HRM practices in different countries around the world. The cultures prevalent in the world are divided into different types including power distance, individualism – collectivism, masculine and feminine and uncertainty avoidance. Cultures with high power distance create a work culture with power concentrated into the hands of top management and the subordinates having no power to make any decision. On the contrary, countries with low power distance empower employees to take organizational decisions without influence from supervisors. Individualistic countries like USA have organizations fully based on profit and loss policy with at-will employment in place whereas collective countries like Japan encourage employees to be more loyal and dedicated to the organizations. Cultures with high masculinity and uncertainty of avoidance try to avoid risks by making attempts to control future and a clear disparity in terms of opportunities for career growth is in place between men and women. On the other hand, feminine countries like Sweden encourages organizations to give equal wages to both men and women with more importance emphasized on decentralization of HRM and performance assessment of employees. Thus, in view of the differences in HRM practices in countries around the world with varied cultural nuances, it is clear how cultural differences make an effect on human resource management.
References
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