Policy and Practice in European Human Resource Management

The Price Waterhouse Cranfield Survey

Chris Brewster, Ariane Hegewisch

• Publisher: Routledge
• Year: 2017
• Print ISBN: 9781138294523
• eBook ISBN: 9781351865012
• Topic: Business
• Subtopic: Business General
• Index: Business

This volume, first published in 1994, lays out and considers the evidence of trends in HRM in a variety of areas: overall strategy, the role and education of HR professionals, recruitment, training and development, pay, industrial relations, communication, flexibility, equal opportunities and EC social policy. Because the research examined data at the organisational level, the book is able to provide a unique analysis of what is happening in HRM in the very different cultures of European states, both EC and EFTA.

This volume is an indispensable source for all teachers and students of European HRM practices and policies. This book will also be a key reference source for practitioners wishing to understand HRM in the various European countries and to 'benchmark' their organisation against current practice.

Chapter 1

Human resource management in Europe Issues and opportunities

Chris Brewster and Ariane Hegewisch

Human resource management (HRM) has achieved significant importance in the last few years: in practice and in the literature. In both arenas the focus is increasingly international. Management of all kinds is ever more often conducted across national borders. This is the case not only for the giant private sector multinationals but also for organisations in the public sector and amongst smaller employers. The growth of major international trading ‘blocs’ – in South East Asia, North America and, in its most advanced form, in Europe – has accelerated these trends.

There is therefore a need to explore international differences in the way people are managed. With more organisations operating across international boundaries and more managers being transferred internationally (Dowling and Schuler 1990; Brewster 1991; Black, Gregerson and Mendenhall 1993) and with the increasing influence of international trading blocs such as the European Community the importance of comparative knowledge about such areas as labour markets, skills, legislation and trade unions is apparent (see, for example, Brewster et al. 1992).

It has been argued that there is a direct correlation between strategic HRM and economic success. Porter (1985) believed that HRM can help a firm obtain competitive advantage. Schuler and Macmillan (1984: 242) make a similar point, that ‘effectively managing human resources’ gives benefits which ‘include greater profitability’. Other authors make the point explicitly that ‘firms that engage in a strategy formulation process that systematically and reciprocally considers human resources and competitive strategy will perform better … over the long term’ (Lengnick-Hall and Lengnick-Hall 1988: 468); HRM has even been propounded as ‘the only truly important determinant of success’ (Beyer 1991: 1). Salaman (1991) comments ‘this is an obvious but important point’. Later texts by Porter (1985, 1991) and, in Europe, Pieper built on this to argue that ‘since HRM is seen as a strategic factor strongly influencing the economic success of a single company one can argue that it is also a strategic factor for the success of an entire nation’ (1990: 4). Such arguments have to be set in the context of the lack of empirical data to support them. Indeed on the autonomous, non-union, unregulated model that casual commentators often imply within the term HRM the evidence points in the opposite direction. Thus, those nations who are furthest from that model, those with most legal regulation and trade union influence, tend to have been most successful in recent years. This requires further empirical investigation.

These pragmatic rationales for comparative studies of HRM are linked to social science studies. Comparative international research for several decades now has examined production systems and management strategies in different cultural and national circumstances. Indeed, globalisation has been argued to be the most significant trend in modern business, with extensive implications for strategic management (Bartlett and Ghoshal 1989; Levitt 1983; Prahalad and Doz 1987). The implications of these and earlier international studies (Haire, Ghiselli and Porter 1966; England 1978; Ronen and Shenkar 1985) for HRM were manifest, but have only more recently been the focus of international comparative research. There is already, in addition to this strong tradition of research into international management practices, a stream of research into international cultural values (Hofstede 1980, 1991; Laurent 1983; Tayeb 1988). This provides a broad basis on which to study HRM internationally (Brewster and Tyson 1991).

Such studies have a value beyond the intrinsic interest of examination of different ways of doing things. They challenge our assumptions of the manner in which business is most effectively conducted and people are managed. Authors such as Hofstede (1980) have pointed out that assumptions about what objectives should be achieved in people management, how people should be trained and valued, what motivates them and how they should relate to colleagues and supervisors, vary from culture to culture.

There is a strong argument to be made, then, for the value of comparative studies. This book reports the results of such a study, focused on organisational policies and practices in human resource management in Europe. This first chapter has two objectives. The first is to outline the conceptual rationale for studying HRM in Europe, and to outline the form of study that we have been involved in. The second is to explain how the results of the study are presented in the rest of the book and to outline key findings.

CONCEPTUAL CONCERNS

Comparative studies are not unproblematic. In addition to methodological problems (examined in relation to our project in Appendix I) there are conceptual issues. An initial question concerns the universality of management practice. There are arguments both for universality and particularity (see Brewster and Tyson 1991: introduction). A fascinating recent study (Craig et al. 1992) has shown that on some very ‘hard’ measures – such as infant mortality, cost of living, cars, electricity use and telephones amongst others – countries in Europe, the United States and Japan are tending to diverge rather than converge. In general terms researchers who focus on the content of management tend to find similarities across national borders; those who focus on process tend to identify differences (Tayeb 1988). There is the associated question of the geopolitical focus that is taken. Clearly there are universal features of management; regional blocs (for example, North America, Pacific, European); and national state differences. Within the regional blocs there may be further regional variations as well as sector, size, ownership and other groupings that will provide sufficient similarities within them, and differences from other groupings, to be taken as units of analysis.

There is also a national comparative perspective. Many of the following chapters focus on HRM at this level. Internationally comparative data, particularly from the organisational level, is not common and we believe that a major contribution of this book is to add to that stock. Because international comparisons are much less frequent than within-country comparisons it is perhaps worth emphasising the point that over and over again in our data it is the differences between countries that prove to be more significant variables in HRM than, for example, the differences between organisational size or industrial sector. Given the importance of national cultures, governments, legislation, economics, ownership patterns, labour markets, trade unions, this should be no surprise – except that the within-country perspective often leads to this fact being ignored.

Pulling wider there is a regional perspective. It has been pointed out elsewhere, using our data (Filella 1991), that regional patterns (Nordic, Northern European, Latin) can be discerned. The direct correlation with some of the research by authorities on national cultures (Hofstede 1980, 1983, 1991; Laurent 1983; Adler 1986) is instructive.

Finally, it is also clear that from a global perspective Europe has a coherence of its own, and a distinctiveness from other major blocs. Such a perspective involves a considerable degree of generalisation: conflating differences elsewhere and, particularly, within Europe. However, the point has been made by another commentator on ‘the conditions and circumstances within Western Europe’ that although there are differences in HRM in each country, taken as a whole ‘they stand out as being distinct from other economic areas like the USA, USSR or Japan’. (Remer 1986: 363).

We have explored these distinctive features of European HRM elsewhere (Brewster 1993) and they are touched upon in other places throughout this text. Suffice it to say here that in many areas beyond the scope of this text – in culture, government, legislation and ownership patterns again, and in labour markets and trading relationships – Europe has both internal differences but also commonalities. Furthermore, within the HRM areas covered in this book will be found further evidence of similarities in issues and in trends: and further distinctions from other regions of the world. It can be found in, for example, decentralisation and devolvement, pay flexibility, the attention paid to training and development, in industrial relations and employee communications and the growth of flexible working patterns and perhaps most of all in the development of a social policy by Europe’s unique supranational level of government, the European Community.

HRM as a concept has come to Europe from the United States. It has been subject to significant criticism in Europe. Poole (1990) and Hendry and Pettigrew (1990) start from the Beer et al. (1985) model and wish to amplify it to include environmental factors. Hendry and Pettigrew add three headings: under ‘economic’ they include ownership and control, organisational size and structure, the growth part of an organisation, industry structure and markets; under ‘technical’ they refer to skill, work organisation and labour force requirements of technologies; ‘socio-political’ encompasses the institutional framework, particularly the national education and training system.

The environmental factors have been central to discussions of this issue in other European countries (see, for example, Bournois 1990 in France). A more explicit instance can be taken from Remer (1986), discussing personnel management in the more administrative German context: he does so in terms of ‘external characteristics’ (economy, technology, society, employers, politics, law, science, culture).

Pieper categorised the environmental factors affecting HRM similarly to Beer et al., or to Hendry and Pettigrew. However, he felt that this approach does not overcome the problem of presenting ‘lists’ of things and, in the last instance, is atheoretical and forced to rely once again on the black box of culture to explain international differences (1990: 22).

Whether these lists of environmental issues are external or are an intrinsic aspect of the HRM concept may be more than a matter of semantics. It is noteworthy that it is in general the American authors who have seen it as external. Focusing on these environmental issues as external to the concept has led to the often very detailed, case-study based, and sophisticated attempts to create a ‘contingency’ approach to HRM. Thus Schuler (1989), a leading figure in this movement, has attempted to link HRM strategies to lifecycle models (as did Fombrun and Tichy 1983 and Kochan and Barocci 1985) and to Porter’s models for achieving competitive advantage in different industry conditions (Schuler and Jackson 1987; Schuler 1989). Other authors have argued that HRM should be contingent upon markets (Baird, Meshoulam and Degive 1983; Dertouzos, Lester and Solow 1989) and upon groupings within organisational levels (Lorange and Murphy 1984). The examples could be multiplied (see also Macmillan and Schuler 1985, where the reciprocity of HR and strategy is clearly stated; Lengnick-Hall and Lengnick-Hall 1988; Schuler and Macmillan 1984; Schuler 1992).

This contingent determinism has been adopted by some authors in Europe (Staffelbach 1986; Ackermann 1986; Besseyre des Horts 1987, 1988). However contingency theory has come under attack in the corporate strategy literature (originated by Child 1976 and followed through by such authorities as Porter 1985 – see the recent debate on organisational economics led by Donaldson in the Academy of Management Review 1990). A major critique is that it allows little role for managerial action other than that of identifying the current position and matching strategy to it. Many of the ‘contingency’ school of HRM writers fall into a form of strategic determinism in which management’s task is essentially no more than to establish the ‘fit’ of HRM to a given – usually corporate-strategy driven – scenario. Such attempts have been sharply criticised by Conrad and Pieper (1990); by Staehle (1987), who criticises the American literature accessible in Germany for its derivative approach to personnel management which is seen as dependent upon corporate strategy, rather than contributory to it; and by Poole (1990: 5): ‘strategic choices imply discretion over decision-making (i.e. no situational or environmental determinism)’.

THE EUROPEANISATION OF THEORY

There is a general trend in theorising on the eastern side of the North Atlantic towards arguing that an over-ready acceptance of American models has gone beyond its provable value: and that the time is now ripe for distinguishing specifically European approaches. It is surely no coincidence that this coincides with the revitalisation of the European Community and Europe’s economic success compared to the USA.

Thurley and Wirdenius, for example, were concerned with the development of a functional model of management, particularly in the context of international business activities, rather than with HRM in particular or the comparative analysis of different national models of HRM. But they are relevant here because they try to distil what is particular to ‘Europe’ rather than the US or Japan. They focus on the cultural context of management, and, in the face of the predominance of American and Japanese conceptions of management, the need ‘now to distinguish "European Management" as a possible alternative approach’ (1991: 128). They see this as necessary to reflect the different cultural values and legal-institutional practices that are dominant in Europe. Such a European approach is said to be:

emerging, and cannot be said to exist e...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of figures
• List of tables
• List of contributors
• Acknowledgements
• 1 Human resource management in Europe: issues and opportunities: Chris Brewster and Ariane Hegewisch
• 2 The integration of human resource management and corporate strategy: Chris Brewster
• 3 The education and training of human resource managers in Europe: Shaun Tyson and Lennart Wikander
• 4 Human resources and line management: Chris Brewster and Magnus Söderström
• 5 Recruitment and selection in Europe: policies, practices and methods: Françoise Dany and Véronique Torchy
• 6 European experiments with pay and benefits policies: Jaime Filetta and Ariane Hegewisch
• 7 Key issues in training and development: Henrik Holt Larsen
• 8 Training and management development in Europe: Frank Bournois, Jean-Hugues Chauchat and Sylvie Roussillon
• 9 European industrial relations: change and continuity: Patrick Gunnigle, Chris Brewster and Mike Morley
• 10 Employee communication and participation: Chris Brewster, Ariane Hegewisch, Lesley Mayne and Olga Tregaskis
• 11 Flexible working practices: the controversy and the evidence: Chris Brewster, Ariane Hegewisch and Lesley Mayne
• 12 Equal opportunities policies in Europe: Ariane Hegewisch and Lesley Mayne
• 13 EC social policy and European human resource management: Paul Teague
• Appendices
• Index