Managing Human Resources in Central and Eastern Europe

Michael J. Morley, Noreen Heraty, Snejina Michailova

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9780415405614
• eBook ISBN: 9781134135349
• Topic: Business
• Subtopic: Business General
• Index: Business

Against the backdrop of ancient cultures, a communist legacy and eventual institutional atrophy, many of the societies of Central and Eastern Europe have pursued aggressive development trajectories since the early 1990s. This part of Europe is now characterized by a rising economic heterogeneity and a rapidly changing socio-cultural context, underscored by waves of restructuring, privatization, increasing foreign direct investment and an emerging individualism. While there has been a growing interest in the transition economies in the past number of years, the contemporary nature of human resource management in these societies is not well-documented.

This long-awaited text seeks to chart the contemporary landscape of HRM in this region. In doing this, it describes key aspects of the transition process as experienced in each of the economies under consideration, as well as describing key legislative and labour market developments and reforms. Finally, it discusses key trends in HRM policy and practice.

1 Studying human resource management in the international context

The case of Central and Eastern Europe

SNEJINA MICHAILOVA, NOREEN HERATY AND MICHAEL J. MORLEY

Introduction

Like all edited books, this volume is a result of the collective efforts over a long period of time of a number of individual researchers and research teams with whom we have had the pleasure of working. Many trade-offs have had to be made in terms of the range and depth of the material presented in the text, but our guiding principle was always to ensure an appropriate treatment of subject and of a geographic territory not historically well documented. With this in mind, and drawing upon the expertise of local authors/author teams in each country, we set ourselves the task of charting the landscape of human resource management (HRM) in the complex terrain that is contemporary Central and Eastern Europe and to do so in a way that would provide a broad account of commonalities and differences apparent in the range of economies examined. We openly acknowledge that each of the countries under investigation here is deserving of further in-depth analyses in its own right. That, however, is a task for others and for another day and one which will no doubt excavate in a much deeper way than we have attempted here in this broader regional comparative volume. Dedicated country-specific volumes on HRM in Central and Eastern Europe in this genre are beginning to emerge (see, for example, the edited volume by Domsch and Lidokhover (2007) on Human Resource Management in Russia).

Arguing that there are significant structural/institutional and configurational differences, along with significant practice differences, in HRM in Central and Eastern Europe (CEE) in contrast to Western Europe, Managing Human Resources in Central and Eastern Europe provides country derived, comparative, accounts of HRM in Estonia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Bulgaria and Russia. It details key aspects of the transition process as experienced in each of these economies under consideration, describes key legislative and labour market developments and reforms and discusses key trends in HRM policy and practice which are evident at organizational level.

In this introductory chapter, we explain the origin, the motivation and the purpose of the book. We then outline a number of main themes and issues that are of significance when studying human resource management in an international and comparative context and, in this instance, the context of Central and Eastern Europe. Finally, we introduce the contributions.

The Origin of the Book

Against the backdrop of ancient cultures, a communist legacy and eventual institutional atrophy, many of the societies of CEE have pursued aggressive development trajectories since the early 1990s. This part of Europe is now characterized by a rising economic heterogeneity and a rapidly changing socio-cultural context, underscored by waves of restructuring, privatization, increasing foreign direct investment and an emerging individualism. However, while there has been a growing interest in the transition economies in the past number of years, the contemporary nature of HRM in these societies is not well documented.

This volume in the Routledge Global HRM series represents one attempt to address this lacuna. The Global HRM Series has dedicated itself to providing accessible, coordinated, comprehensive texts on a diverse range of topics in global HRM. The texts to date have taken different approaches, some dedicated to providing comparative accounts of HRM in particular regions, including Africa, Asia-Pacific, Europe, Latin America, the Middle East and North America, others taking a particular global HRM practice as their point of departure, including, for example, global leadership, global careers, global industrial relations, global legal systems, global staffing and global compensation. This volume is designed to complement the earlier geographic regions covered in the series and to contribute to the emerging understanding of people management practices in this underdocumented region.

Several of the chapter contributors are members of the Cranfield Network on Comparative Human Resource Management (CRANET) and draw upon HRM data gathered under the auspices of this Network to detail the situation in their respective countries. The Network is a collaboration between 42 universities and business schools which

• carries out a regular international comparative survey of organizational policies and practices in comparative HRM across Europe; and
• provides benchmarks for comparing Europe with developments elsewhere in the world.

The data is collected through a standardized postal questionnaire addressed to the most senior HR/personnel specialist. Questions are focused at organizational level and cover major areas of HRM policies and practices. The standardized questionnaire is translated into all relevant languages and then adapted to the different national contexts (taking into consideration such factors as legislation, labour markets, culture). The results of the survey can only be understood in this context. During each round of the survey, amendments are made to capture new developments but on the whole, the questionnaire stays unchanged in order to be able to observe developments over time.

Studying HRM in the International Context

The traditional notion of HRM, which has for long been embedded in, and influenced by thinking in the United States of America, has been increasingly crowded out by the term ‘international human resource management’ (IHRM) as, for example, simply indicated by the growth in volume, range and diversity of contributions to this emerging literature.

The notion of IHRM has evolved to accommodate the needs associated with increasing globalization (Warner, 2005). IHRM comprises the world management of human resources (Schuler and Tarique, 2007; but see also Brewster, 2002; Brewster and Suutari, 2005; Briscoe and Schuler, 2004; Harris and Brewster, 1999; Poole, 1999), including issues related to enabling the multinational corporation (MNC) to be globally successful. Nonetheless, despite emerging evidence on its value to the international firm, and its increased visibility within academic quarters, confirming its own unique kind of legitimacy, defining and delimiting the nature of IHRM and all its constituent parts poses something of a challenge. This is perhaps hardly surprising. Determining the anatomy and impact of HRM and its associated activities in a domestic context has proven somewhat elusive. It was always going to be more so in an international one. The inevitable consequence is that there are many ongoing questions surrounding its pedigree and legitimacy (Morley et al., 2006a).

One of the fundamental questions in this regard is what is the most appropriate paradigm for enquiry in the field. Mayrhofer et al. (2000), among others, argue that there are essentially two paradigms for researching HRM in an international and/or comparative way, namely a universalist paradigm and a contextual paradigm. They highlight that it is to some degree the difference between these paradigms which has led to the conceptual confusion of what is the appropriate scope of the subject matter often obvious in the literature. The universalist paradigm, Mayerhofer et al. (2000) argue, which is dominant in the United States of America but is widely used in many other countries, is essentially a nomothetic social science approach: using evidence to test generalizations of an abstract and law-like character. The strength of this approach, they argue, is that good research based upon it tends to have a clear potential for theoretical development, it can lead to carefully drawn research questions, the research tends to be easily replicable and research methodologies sophisticated, and there is a coherence of criteria for judging the research. The contextual paradigm, by contrast, according to Mayrhofer et al. (2000) is idiographic, searching for an overall understanding of what is contextually unique and why. In the IHRM field it often involves a focus on understanding what is different between and within HRM in various contexts and what the antecedents of those differences are. As a contributor to explanation, this paradigm emphasizes external factors as well as the actions of the management within an organization and the approach acknowledges the importance of context.

Thus this approach to researching HRM explores the importance of such factors as culture, ownership structures, labour markets, the role of the state and trade union organization as aspects of the subject rather than external influences upon it. The scope of HRM goes beyond the organization: to reflect the reality of the role of many HR departments.

Beyond the paradigmatic question, distinct lines of enquiry are evident in the field. Morley (2007) describes three distinct, but overlapping, research trajectories that provide important lenses through which to explore HRM in an international context, namely an international, a comparative and a cross-cultural trajectory. The concept of ‘trajectory’ is used here in order to denote the existence of a distinctive line of enquiry, a distinctiveness which may be observed both in terms of differing points of departure in the original research effort and consequently unique developmental paths in terms of the major themes investigated.

Thus, it is suggested that an ‘international’ trajectory in the study of HRM can be conceptualized as an area of enquiry dedicated to charting the anatomy of HRM in the MNC and the unearthing of the HRM strategies, systems and practices pursued in the context of internationalization. In this trajectory, it is recognized that the ever-increasing complexity and uncertainty in which MNCs operate creates a unique set of organizational, co-ordination and managerial issues for the managers of these MNCs. Central among these is the management of employees on a global scale. In this international trajectory, HRM is concerned with identifying and understanding how MNCs manage their geographically dispersed workforces in order to leverage their HR resources for both local and global competitive advantage (Schuler et al., 2002).

The body of work arising from this trajectory has several unique features. A good deal of the theoretical and empirical effort in this trajectory has focused on expatriation and the international assignment cycle, where much evidence has now been accumulated. There is evidence too in this trajectory of a focus on the dominant coalition of the firm as the human capital base deserving of our research attention. Furthermore, given the MNC as a unit of analysis, much of the work has sought to examine headquarter–subsidiary relations and the diffusion of managerial practices and systems throughout firm subsidiaries. The overlapping ‘comparative’ trajectory in the study of HRM shows a preference for exploring the landscape, contours and national patterns of HRM as a result of the distinctive developmental paths of different countries and their subsequently idiosyncratic institutional and economic regimes. A long-established tradition, it is based on the premise that many relevant insights into organization processes and systems in a global era will come from studying them in a comparative context (Evans et al., 2002). Morley and Collings (2004) point to an increasing interest in comparative studies in a broadening range of countries, most especially CEE, China and India. This, they suggest, can be explained in part by the changing contours of foreign direct investment (FDI) location decisions in the global economy. While traditionally FDI flows have been concentrated in developed countries, recent years have heralded a shift in investment locations toward new destinations, on many of which there is a dearth of knowledge. Such new locations are now proving fertile ground for generating insights in this comparative tradition. Within this comparative trajectory, there is a focus on national systems elements as a basis for legitimate comparison and, as indicated above, the focus until relatively recently has largely been on economically successful and developed economies, with a growing emphasis in recent years on emerging economies.

The third trajectory, here labelled ‘cross-cultural’, may be conceived of as a research tradition dedicated to explicating tenets of national culture as the dominant paradigm for conditioning what is acceptable organizational practice in that socio-cultural context. In this genre, significant explanatory power is accorded to tenets of societal culture in accounting for similarities and differences in the conceptualization of, and in the practice of, HRM. Much of the empirical effort in this trajectory has been focused on the issue of dimensionalizing these cultural tenets and replicating enquiry in an array of contexts. And, as with the other trajectories outlined above, the range of contexts is continuously expanding.

An alternative approach to generating insight in the field is to take a ‘levels of analysis’ approach. The notion of studying HRM in the international context has been broadly related to two levels of analysis: macro (societal) and micro (organizational). The macro level is associated with how HRM and IHRM are developed, viewed and practised in different parts of the world, as summarized in a recent special issue on ‘Globalizing International Human Resource Management’ (Rowley and Warner, 2007). This analysis is predicated on the understanding that operating across national boundaries brings with it a bewildering variety of cultural and institutional specificities that make managing in this context especially complex (Morley et al., 2006b). Reflecting this complexity, studies conceptualized and pursued at the macro level of analysis typically examine the influence of national origin, institutions and culture on the respective country’s employment legislation, industrial relations, trade unions, consultation, patterns of company ownership, etc. and how specific company-related HRM practices are impacted by these macro conditions. All these contextual differences have led to different perspectives on the concept of HRM fro...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of illustrations
• Foreword
• Notes on contributors
• 1 Studying human resource management in the international context: The case of Central and Eastern Europe
• 2 Managing human resources in Estonia
• 3 Managing human resources in Lithuania
• 4 Managing human resources in Poland
• 5 Managing human resources in the Czech Republic
• 6 Managing human resources in Slovakia
• 7 Managing human resources in Hungary
• 8 Managing human resources in Slovenia
• 9 Managing human resources in Bulgaria
• 10 Managing human resources in Russia
• Index