International Human Resource Management

Contemporary HR Issues in Europe

Michael Dickmann, Chris Brewster, Paul Sparrow, Michael Dickmann, Chris Brewster, Paul Sparrow

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317681557
• Edition: 3
• Topic: Commerce
• Subtopic: Gestion des ressources humaines

International Human Resource Management provides a concise overview of the rich HR landscape in Europe to help students develop cutting-edge people management approaches.

The innovative, multi-disciplinary approach of the book provides a holistic picture of the key issues on the individual, organizational and societal levels. The book is divided into three parts:

• Part I explores the institutional and economic contexts that organizations face in different European countries. This section goes beyond exploring issues of diversity to include a discussion of the impact of the recent financial crisis.
• Part II concentrates on the key challenges and trends facing HR, including an aging population, migration, and sustainability, and analyzes the unique and inventive ways these are addressed in different countries across Europe.
• Part III focuses on the fundamental HR areas – recruitment and selection, performance management and rewards, employment relations, global careers, and so forth – and the ways in which these policies and practices are shaped by the European Union.

With broader coverage, the latest thinking in the field, and cutting-edge cases, examples and insights, this book will prove a highly valuable resource for students, researchers and practitioners working in human resource management, and international business.

1 Introduction and Overview of IHRM: Contemporary HR Issues in Europe

Michael Dickmann, Chris Brewster and Paul Sparrow

DOI: 10.4324/9781315773483-1

A European Perspective on HRM

This edition of the book continues the tradition of exploring international human resource management (IHRM) using a European perspective. It explores the underlying commonalities with people management elsewhere and investigates the fascinating variations of the HRM mosaic in Europe. Given the increasingly volatile, ambiguous and uncertain context in a region that has experienced massive change in the time following the various financial and other crises post-2008, this book synthesizes some of the key business and HRM reactions, ideas and challenges that Europe is faced with.

The first edition – edited by Chris Brewster and Hilary Harris – was published in 1999 and at that time deemed groundbreaking in that it drew on some eminent human resource management thinkers in Europe to debate ideas that were distinct, yet linked to the dominant US-led HRM discourse. In the 1990s it had increasingly become clear that North American and Asian multinational corporations (MNCs) managed their international staff in often highly distinct ways from their European counterparts. This led to European researchers investigating a range of different issues that were integrated in the book. However, the first edition covered the European perspective on IHRM, predominantly by exploring the issues from a firm’s orientation and also intended to identify practitioner concerns and to present insights in relation to these. This led, at times, to a descriptive view and some manifestly prescriptive recommendations.

The second edition covered the area in a more analytical and critical way. The second edition was published in 2008 but written, of course, just prior to the subsequent economic convulsions that were to come. Edited by Michael Dickmann, Chris Brewster and Paul Sparrow, it built on the previous distinctive contribution and broadened the perspective and approach to IHRM in Europe. It charted global work and careers within European MNCs in more detail and presented new ways to manage expatriates and other international workers. Incorporating the thoughts of leading European academics, it treated IHRM more strategically and explored international structures, strategies, policies and practices in relation to corporate configurations. In the second edition we observed that IHRM, and its more recent terminology of strategic IHRM, was still mostly conceptualized and examined from a North American – predominantly US – perspective. However, the variety of institutional environments, such as the more coordinated market economies that can be found in several of the European Union (EU) states, organizational strategies and structures, the broader economic context, employment relation systems as well as general decision patterns and preferences (to name but a few), were leading to distinct HRM landscapes in Europe. The original motives behind the series were still relevant. As we extended the coverage of the volume, it was evident that providing a European perspective was important because the predominance of North American thoughts in the sphere of management and in the diffusion through universities, consultancies and US MNCs meant that the North American paradigm still tended to dominate our thinking. DeFidelto and Slater (2001) noted that there exists a ‘Gulf Stream’ in management ideas, with them originating in the USA and reaching the UK first and then spreading over the European continent to finally reach the Southern European states. While some of this certainly takes place and is picked up by some of our contributors to this third edition, such as Stavrou and Papalexandris when they write about Greece and Cyprus, it is important to present competing ideas and distinct approaches. Various countries have developed diverse ‘solutions’ to their specific HRM challenges and will continue to display divergence. Moving beyond the predominant HRM paradigm to explore variations allows researchers and scholars to further develop and broaden their HRM concepts and insights.

Since the second edition of this book, many scholars have presented national or regional perspectives of HRM. Amongst those making a case for European distinctiveness are Brewster et al. (2004), Scholz and Böhm (2008), Brewster et al. (2008), Gooderham et al. (2008) and Morley et al. (2009). In addition, other continents have also had scholarly attention, with academics arguing for diversity in relation to Asia (Varma and Budhwar, 2013), Africa (Kamoche et al., 2004) or South America (Elvira and Davila, 2007). A recent handbook also looks at HRM in emerging markets (Horwitz and Budhwar, 2015).

This third edition is building on this earlier work. The starting point remains the same. We argue that there are a multitude of institutional, cultural and organizational factors that create a European distinctiveness of (international) HRM, albeit we outline a picture of diverse national approaches that lead to a European mosaic and admit that there are various degrees of convergence of HRM with other nations inside and outside the continent. But, in this edition, we are more ambitious and have radically reconceptualized and reintegrated the most pertinent discourse on European HRM. Since 2008 many countries in the world – and especially several states within Europe – have experienced some of the most challenging times for many decades due to the financial and sovereign debt crises that influenced the economies of nations, their GDP growth, unemployment and many other people-related issues.

Using predominantly institutional, organizational and individual perspectives the book sets out to illuminate the European HRM landscape in its present form, providing insights into its developments in relation to the key challenges and crises experienced. Given the intellectual history of this volume, our selection of contributions has been driven by two considerations: what are the contemporary issues; and can we discern and give voice to a specifically European perspective? This presents us potentially with a very wide-ranging set of issues and topics at the macro-, mezzo- and micro-level; we could cover a huge choice of subjects. Drawing on contemporary institutional theory, we identify those areas where the HRM activities of an organization in Europe are relatively constrained by institutional requirements (such as legislation, trade unions and so forth) and those where organizations have more autonomy. In the latter instance, where there is the opportunity for more autonomy, organizational policies and practices might not actually be specific to Europe and other mezzo-level factors might be at play; whilst in the former instance, where institutional pressures are strong, they likely will. Building on this, the third edition is characterized by:

Institutional, Organizational and Individual Perspectives. Discussions of HRM in European MNCs and/or in Europe are highly ‘critical’ and they go beyond the interest of organizations (Brewster, 2007). The discourse on institutional contexts and the interplay of stakeholders is very vibrant in Europe. In particular, Part I presents comprehensive data on GDP in different countries, unemployment rates, training and development investments and employment relations systems, and allows us to distinguish the different actors and their interests in Eastern, Western, Northern and Southern Europe.

Broad Foundations. The distinguished authors who contributed to this edition use a large number of theoretical foundations and a range of empirical data. Using the variety of perspectives outlined above allows the authors to access a large number of data sources, including economic, sociological, organizational and psychological data. Thereby, the book presents a nuanced picture of the variety of HRM approaches across Europe.

Long-Term Relationships and Developments. The book traces HRM developments in Europe over time. The authors were encouraged to adopt a long-term focus in order to be able to identify underlying determining forces and influencing factors. Obviously, the time perspective varies depending on the subject discussed. For instance, exploring HRM in Central and Eastern Europe (CEE) contrasts the current status quo with the situation found when the ‘iron curtain’ collapsed in 1989 and develops an impression of partial convergence to more established HRM systems in the Anglo-Saxon world. Several chapters use the massive financial crisis starting from 2008 as a point of departure to trace HRM reactions and the ability of employment systems and organizational, as well as individual, actors to react to these and to shape their context and linkages. It is interesting to see the variety of these reactions and coping mechanisms within Europe. For instance, Chapter 6 on Nordic HRM depicts the resilience of the Swedish, Norwegian, Danish, Finnish and Icelandic HRM systems. By contrast, Chapter 4, on Mediterranean HRM outlines the massive changes that Spain, Italy, Portugal and especially Greece and Cyprus have undergone and the enduring challenges they face. It recommends a more proactive management and strategic positioning of HRM in a move that would be likely to increase convergence to a more Western European HRM approach.

Interactions and Boundaries. A perspective that includes multiple stakeholders also needs to look at the interactions between them. Throughout the book we trace these, albeit that the level of analysis and the boundaries to the discussion vary. In Part I we look at regions and countries within Europe so that the reader will find a macro-analysis of HRM. Part II looks at sectors, industries and key challenges within organizations and presents a mezzo-analysis of HRM (see below). Part III concentrates on the micro-view of HRM and analyses; in particular, the interactions of global careerists and organizations. The boundaries of Parts II and III tend to be narrower and the recommendations more specific.

HRM in an International Context

More than half a century has passed since MacLuhan (1960) first described the world as a ‘global village’. However, international working is not a recent phenomenon. Four millennia ago, Assyrian ‘commercial organizations’ had expatriates, activities in several geographical regions and a strategy to search for new markets and resources (Moore and Lewis, 1999). In addition, they had head offices and foreign affiliates as well as management and operational structures. Today’s MNCs are not too dissimilar in that they also have organizational structures that stretch across borders and have the challenge of managing diverse national contexts and an international workforce.

In the last decades we have witnessed massive technological, sociocultural, political, legal and economic changes. The higher integration that has been a feature of economic liberalization and increased cross-national flows of services, goods and people has had enormous beneficial effects but has also created a very high degree of national interdependency and also some dysfunctional outcomes. The last years have shown all too clearly the potential downsides of increased international interdependence, with the sub-prime mortgage crisis emerging from the USA and spreading to other parts of the world. The massive impact on sovereign debts (and the ensuring crisis for several countries such as Ireland, Portugal, Italy, Spain, Greece and Cyprus), unemployment levels, GDP of countries and average wages have been felt by millions of people.

The associated challenges are at the heart of Part I of the book, which explores ‘Macro-Views: IHRM and Its Response to Crises in Europe’. While this part reinforces the argument that there is rich diversity of HRM in Europe, we go beyond earlier editions by focusing on distinct reactions to the financial and other crises of the early twenty-first century. This section uses mostly institutional, sociological and HRM management perspectives to trace the status quo of HRM policy and regulations, people management approaches and employment relations in Europe and to develop a nuanced landscape of country-level HRM.

In Chapter 3, Denise Currie and Paul Teague outline the history and impact of HRM regulation in Europe and on European firms. They depict a situation in which many EU governments have started to weaken employment protection, have curtailed the position of trade unions and have reduced social benefits. Similar changes are evident in the European institutions, such as courts, as well. This overall view develops an excellent basis for the in-depth investigations of HRM in specific regions of Europe that follow it.

In Chapter 4, Eleni T. Stavrou and Nancy Papalexandris discuss the evolving challenges to HRM in Mediterranean countries. Using a range of economic and social data sources they depict how austerity policies have led to a substantial decrease in GDP, a rise in unemployment and cuts in social security and real wages. They chart the reactions of workers and employment relation systems and recommend that HRM professionals undertake a range of change activities in order to raise productivity while reaping efficiency effects. In short, the authors suggest that Southern European HRM, especially that of Greece and Cyprus, needs to counter the severe crisis by becoming more strategic and moving to a stronger change management role. As events continue to unfold around Greece and its relationship with the EU, not surprisingly, the regional picture that is presented here is one of significant change.

In Chapter 5, Michael Morley, József Poór, Noreen Heraty, Ruth Alas and Aleksy Pocztowski analyse HRM developments in Central and Eastern Europe (CEE). The CEE region consists of Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Serbia, Slovakia and Slovenia. The chapter argues that the CEE countries had undergone massive employment relations and HRM changes in the 1990s, with a shift towards more pluralism, an increase in HRM function legitimacy and a move of human resource activities towards a more strategic and value adding orientation. These developments then facilitated a relative robustness of HRM in these countries when hit by the financial crises of the early twenty-first century. The picture is one of change which then established a new normality and continuity.

Chapter 6 also develops a picture of relatively robust HRM systems and significant continuity. Torben Andersen and Freddy Hällstén discuss the distinctiveness and resilience of Nordic HRM. While the CEE countries were seen to have moved towards a more strategic HRM and the Mediterranean countries were urged to adopt a stronger business and change focus in the preceding chapters, the authors depict a highly distinct approach to HRM in Sweden, Denmark, Finland, Iceland and Norway. At the core of the Nordic HRM model they identify co-workership with highly committed and engaged workers who are co-leaders of their organizations. The functioning of Nordic HRM relies on mutual trust, collaboration and accountability, with employers investing in people and meaningful jobs. The authors make a strong case for the enduring resilience of Nordic HRM which is supported by data, such as all these countries have unemployment levels lower than the EU average.

Given these themes of change and continuity, in Chapter 7 Alexandros Psychogios, Chris Brewster and Emma Parry draw up a crisis model that distinguishes crises of management, operations and legitimacy. They outline how countries in Western Europe have reacted to the financial crises. They depict a context in which workers are getting older (and fewer) within a rapidly changing technological and social environment. The authors observe that many organizations are less able to increase pay, offer new job opportunities or invest in talent. This leads to lower engagement and morale just at a time when this is crucial to create agile organizations that enable rapid learning and innovation. In addition, they urge HRM to be more strategic and to create a scalable workforce, flexible and adaptable infrastructures and networks that can absorb external and internal shocks more easily.

Part II of the book presents ‘Mezzo-Views: Cross-national HRM Strategies, Structures, Policies and Practices’ in diverse sectors or for key challenges of European HRM. By concentrating on the mezzo issues, our intention is to provide insight into some of the key challenges and trends of this and coming decades. While these developments are often generic, for example, an aging population, migration, sustainability, etc., we have encouraged the authors to analys...