INTERNATIONAL HUMAN

RESOURCE
MANAGEMENT

[ Question 6 ]

Presented by: Lee Wei Zhi

Roy Teh
 Exam Question 6
Towhat extent are Western models of
HRM relevant to the developing world?

What best practices, if any, can be

exported unproblematically to developing
countries?

What modifications or adaptations, if any,

are needed? Give examples.
 Answering our question …
 Introduction
 Defining Developed / Developing nations
 What is Western HRM?
 Best Practices Adopted
 Modifications required
 Conclusion
 Introduction (1)
 Globalization has led to significant investment
flows into developing countries

 Along with investments, there is also the

introduction of Western management practices
with an intention of achieving above average
returns on investment (Jaegar 1993)
 Introduction (2)
 Many HRM theories have originated from
Western countries, particularly the USA which
has benefited the economic achievements of
the industrialised world (Jaegar 1993)

 Many developing countries disregarded the

fundamental differences in sociocultural
constraints, local conditions and circumstances
 Developed / Developing
Nations In Brief
 Developed nation :
The nations of Europe (including Russia), the
United States, Japan, Australia, and New
Zealand

 Developing nation :
Africa, Asia (except Japan), Latin America
 What is Western HRM?

2) Staffing
3) Performance Management
4) Compensation Management
5) Training & Development
6) Employee Relations
 Western HRM in India?
 Do not yield the same results in emerging
economies like India

 Motivation factors in US may not have an

universal appeal in developing nations

 As a manager, its very important to know

the exact employee’s motivating factor
 Staffing
 In US, it mainly consists of planning,
recruitment and selection

 Whereas in India, relationships supersedes

the above in a recruitment selection

 Also, indian firms tend to value employee

loyalty and tenure at the firm more than new
skills
Performance Management
 In US, it mainly consists of induction,
performance appraisals, remedies to poor
performance and rewarding good
performance

 Rewards will be an incentive for the

westerners to perform

 But, Indian culture preaches to have “only

the necessary” and discourages excessive
wealth accumulation
Compensation Management
 In US, it is more than administering payroll,
mainly :
1. To keep down labour cost
2. To motivate and retain workers

 Entails both financial and non-financial

rewards

 In Latin American, employees are more

concerned with the non-financial rewards
 Training & Development
 In US, HR needs to identify learning needs,
devise a plan, deliver the training, evaluate
outcomes

 Training is compulsory in this knowledge-

based economy

 In US, new technology is readily adapted,

while in India, new technology is always
treated with skepticism and caution
 Employee Relations
 In US, it is about fostering a sense of
partnership and the will to co-operate

 Logic is positive interpersonal relations =

productivity

 Indian Organizations have a very high level

of homogeneity (as compared to US). Often,
majority are from that city, have a common
language and have a common culture.
 EXPORTED HRM BEST PRACTICES

Staffing
 Recruiting based on job specifics – skills, responsibilities,
purpose
 Adopting a combination of common selection methods –
interviews, skill test, personality test, track records
(education, work experience, etc.)

Modifications/Adaptations:-
 Recruitment in Latin America is often based on family
connections
 Selection methods to include peer review of short listed
candidates – group decision and employee voice in a
collectivist society. Eg: Fujitsu Asia
 EXPORTED HRM BEST PRACTICES

Training & Development

 HR identifies learning needs, devise a plan, deliver the
training and evaluate the outcome.

Modifications/Adaptations:-
 Training to include personal development as a form of
long term employee investment – eg: Effective
Communication Skills
 Emphasize on-the-job training (apprenticeship)
 Companies in China also sends employees abroad to
foreign universities for training. Eg: Motorola China
 EXPORTED HRM BEST PRACTICES

Performance Management
 Performance Appraisal
 Benchmarking
 HR Scorecard adoption
 Tying Performance with Promotion

Modifications/Adaptation:-
 Performance measurement includes teamwork
contribution instead of only bottomline and profit
benchmarks
 EXPORTED HRM BEST PRACTICES

Compensation Management
 Performance, skill & knowledge based pay system
 Various types of performance bonuses
 Health Benefits

Adaptations/Modifications:-
 Group incentive bonus based on team performance for
collectivist countries such as China, Singapore, Malaysia
 Compensation often includes free meals,
accommodation allowance and special training package
in China.
 EXPORTED HRM BEST PRACTICES

Employee Relations
 Fostering a sense of partnership and will to co-operate
between employee and the company
 Includes employee voice, workplace safety, fairness in
HR decision – negotiations through Trade Unions

Modifications/Adaptations:-
 Trade unions in China & Singapore are sponsored by the
government rather than fully operated by union members
 CONCLUSION
 Many developing countries adopts Western
HRM extensively due to its easily available
materials and models

 However, Western HRM models may not be

entirely useful due to socio-cultural and
economy dynamics differences.

 Hybridmodels consisting of BEST PRACTICE

and BEST FIT elements will be most appropriate
to overcome these differences