The aim of this essay is to compare the Human Resources practices of the US and Germany, to highlight the reasons behind these differences, and to analyze the evidence these differences provide to the convergence/divergence debate. These countries have been chosen because the US is considered as an economic and political leader in today's society, and many countries often seek to follow or are indirectly influenced by the examples set by the US. Germany has been chosen as it is described as being 'Europe's economic giant'. Therefore, if it is true that countries often follow the example of the US, and that it is their methods that underpin their success, then Europe's economic giant should not be too different from the US, and should therefore provide substantial evidence for the convergence theory. Many benefits may be derived from comparing the Human Resources practices of different countries and regions. From a theoretical point of view, it can help to understand what underpins successful Human resources theories, and what individual factors support or hinder their implementation. From an organizational point of view, comparative Human Resources Management is particularly useful to multinational companies and companies looking to locate in a foreign country, as 'comparisons can identify the unique features of a nation's HRM system and in doing so, help multinational corporations to adopt and fit their Human resources policies and practices across countries".
[...] The realism is not that divergent in that HR practices are moving drastically away from each other, as Germany is still following USA's practice of individualism, but they are adapting it differently into their own cultures, and therefore the practices used will still be very different from that of any other context. References Arkin, Anat (1992) ‘Personnel Management in Germany: At Work in the Powerhouse of Europe Personnel Management. London : Feb 1992. Vol Iss ; pg.32 Brewster, Chris (1993) ‘Developing a ‘European' model of human resource management' The International Journal of Human Resource Management 4:4 December 1993 Church, Allan H., McMahan, Gary C. [...]
[...] These are identified by Giardini, Kabst & Muller-Camen 2005 as: a shift from collectivistic to individualistic management; the argument that HUMAN RESOURCES MANAGEMENT should become more integrated with organisational strategy; and that the responsibilities of HUMAN RESOURCES MANAGEMENT should fall more predominantly to line management. Whilst the theory of HUMAN RESOURCES MANAGEMENT may have changed, it seems that in some ways the practical implementation has yet to catch up. There is evidence for a move towards more individualistic management, as pay is increasingly being linked to performance, but many agreements are still negotiated on a collective basis by the works council. [...]
[...] This again is evidence of the individualistic nature of this model of HUMAN RESOURCES MANAGEMENT, and also plays a significant role in the next function, compensation. Compensation Collective bargaining plays a significant role in compensation in German organisations. As negotiations are usually on an industry wide level, there is usually little variation within companies on pay, as there is usually a relatively high minimum wage, which gives employees little incentive to leave. Even if a company is not a member of an employer association, there is usually little variation. [...]
[...] Much of the responsibilities of HUMAN RESOURCES MANAGEMENT, such as negotiations, are carried out by management and works councils, therefore line managers play a crucial role in influencing either side. As the emphasis on recruitment is on internal promotion, this also falls to the line management, to develop their subordinates, and recommend them for advancement. It can be said however that it is only the practical elements of HUMAN RESOURCES MANAGEMENT that are the responsibilities of line management, and not the underlying concepts or theories. [...]
[...] Then it will highlight the key areas of HRM, and for each one will examine the different approaches of Germany and USA to give a more detailed impression of each country's approach. The essay will then look at the different contexts of each country's practices and how they relate to each other to determine why they are similar or different, and determine whether the conclusions support the convergence or divergence theory. Muller states that there are three aspects that underpin German HRM theories. [...]
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