Comparing hrm approaches in uk and russia

Human resource management (HRM) means the activities of management in the employment relationship (Boxall and Purcell, 2003). The use of strategic HRM in an organisation helps function with its various activities like training n development, motivation, recruitment, employee selection, leadership, communication and reach their milestones. HRM strategy helps an organisation to focus on its micro-strategic issues. It also helps to provide a robust and link between its various activities conducted in a HRM department (Beardwell, 2004). This essay will cover the importance of understanding HR practices of two diverse countries. The study of comparative HRM is necessary to build a bridge between two different cultures. For example UK there is high rate of part time jobs due to a wide range of social and economic reasons. On the other hand, part time jobs in other parts of Europe are comparatively less. To know these difference and to easy cross culture businesses comparative HRM is necessary.

In the past half century with the rise in globalisation, international human resource management (IHRM) has gained popularity. However the study of international and comparative HRM is regarded as an expensive and time consuming research (Adler, 1984; Brewster et al, 1996; Tregaskis et al, 2003). Hyman, R 1999 says that cross broad expansion has created a need for the deep knowledge of IHRM to avoid complex business issues

Models of HRM

In HRM, there is no specific approach or single way to implement it. HRM is a style of management which can be measured and defined or even compared against an ideal model. There are two approaches or models of HRM – soft Model and hard Model.

Hard HRM emphasize the “resource” aspect of HRM, Legge refers to this as “Utilitarian Instrumentalism”. The hard HRM model focuses on the critical integration of human resource policies, systems and activities with business strategy. The hard HRM model characterizes human resources as factor of production. This means that the human resource is not the only resource capable of turning the production into wealth. Human Resources are viewed as passive, to be provided and deployed as numbers and skills at the right price, rather than the source of creative energy (Legge, 1995, p.66-67). Hard HRM model requires calculations and deep thinking as required by any other branch of management. Thus it communicates through the tough language of business and economics. This emphasis on the quantitative, calculative and business-strategic aspects of managing the “headcount” has been termed human asset accounting (Storey, 1987). The hard HRM model is closely related to scientific management as it treats human resource which posses some skills/attributes that the firm requires.

In contrast to hard HRM model, soft HRM model focuses on human relations rather than treating it as commodity. Soft HRM places an emphasis on “human” and is associated with the human relations school of Herzberg and McGregor (Storey, 1987). Legge refers to this as “Developmental Humanism” (Legge, 1995, p.66-67). The soft model approach treats employees as valued asset of firm which gives the firm a competitive advantage over others through employees professional skills, commitments, adaptability and performance. Employees are proactive rather than passive inputs into productive processes, capable of development, worthy of trust and collaboration which is achieved through participation (Legge, 1995, pp 66-67). The soft Model inspires employee’s resourcefulness by increasing employee commitment, participation and involvement. Walton (1985, p. 79) suggests that “a model that assumes low employee commitment and that is designed to produce reliable if not outstanding performance simply cannot match the standards of excellence set by world-class competitors” and discusses the choice that managers have between a strategy based on imposing control and a strategy based on eliciting commitment.

(Legge, 1995) in her analysis says that “use of HRM styles like hard and soft models in an organisation has always been debatable”. These models are primarily within normative, or prescriptive, models of human resource management. Soft HRM is associated with the human relations movement, the utilization of individual talents (McGregor, 1960). Soft HRM is also associated with the goals of flexibility and adaptability and implies that communication plays a central role in management (Storey and Sisson 1993). Hard HRM, on the other hand, stresses on the importance of ‘strategic fit’, where human resource policies and practices are closely linked to the strategic objectives of the organization (external fit), and are coherent among themselves (internal fit) ( Baird and Meshoulam,1988).

In UK, firms generally rely on numerical forms of flexibility than qualitative form. Both of these are supported by soft HRM models and theories of flexible specialisation. Hence UK employment system has failed to adopt best practice of HRM models. Almond, 2001 says in times of short term pressure if there is a lack of institutional lock-in to soft HRM firms resort to management unilateralism.

However in Russia employees are treated as human capital and are used to generate revenues for the organization. In Russia predominantly hard HRM model approach exists. The employee is like commodity which is found worthy if there is a short supply or plays a central role in company’s goals. The implementation of the hard Model varies from company to company depending on the calculations and quantitative approaches in a rational manner.

In Russia the companies have authoritative, hierarchical, bureaucratic type of structure whereas in UK the companies have participative management approaches, team concepts, and greater employee involvement. The Russian companies center of focus so far have been towards the technical aspects of their business – how to efficiently produce a product or provide a service, how to increase revenues and how to stay afloat in the market. However with the globalization of economies, many of them have started realizing the importance of other aspects of business – Human capital management, organizational structure, compensation, training, motivation and communication. In Russian, organizations perceived HR as a compliance function, existing to fill out forms and enforce rules, rather than a strategic part of organizational performance and success. However in UK the companies look at HR management as a strategic approach to an overall growth of the company. In this essay, using theories and literature, I will try to identify some of the key different HR practices and policies in Russia as compared to those of western countries like UK.

Compensation, bonuses, incentives:

In Russia, many of the small and mid size companies have no standard compensation system. There were no systematic, equitable pay scales and incentive structures flexible enough to withstand periods of growth and change. Most of the Russian companies’ main goal is to provide full employment. Unlike UK and American companies, Russian companies paid bonuses and incentives to their employees irrespective of their performance. However incentive pay was a traditional and integral part of the Russian compensation system. Most of the bonuses were divided equally across the organization or among members of a specific work group. Since employees received incentives regardless of individual performance, they came to see them more as an entitlement than as a reward for good performance (Puffer & Shekshnia, 1996). This approach complemented with the Russian culture of collectivism and high uncertainty avoidance. Unlike Russian culture, UK culture is more about individualism and social responsibility. In UK HR practices, the compensation system is focused towards employee’s performance.

Management of individual performance:

In Russia the HR have a different approach towards management of Individual performance and constructive discipline. Russian organization practices extensively the use of fines as a central focus of discipline systems. The employees are fined for every conceivable infraction. In fact some companies in Russia posted a list of standard fines to the employees as a reminder to the consequences of breaking rules. In contrast to this, UK HR practice follows a positive reinforcement and effective feedback techniques. The companies in UK have a formal performance appraisal and a feedback system. This helps in keeping track of an employee performance and interest and gives them effective feedback.

Motivation techniques:

In Russia the HR practice follows a centralized planning system on individual motivation. The company through its experience tries to motivate employees in ways which work best at that time.

The basic technique of their motivation is to provide monetary benefits to the employees. This creates an even more expectation despite of employee’s lackluster performance. However in UK, the HR practices not only focused on employee’s motivation but also to maintain a high level. The HR in UK uses non-monetary strategies to motivate employees. Some of them are job enrichment, cross-training, and organizational support of training and education.

Recruiting and staffing:

The recruitment and staffing procedures in Russia is completely different from UK. In Russia, the HR practices do not lay emphasis on spending time and money for recruiting qualified employees. The companies in Russia do not spend on advertisement for recruitment. The whole recruiting and staffing procedures is rudimentary. In contrast the UK HR practices have organized application and selection process such as testing, group and individual interviewing. The companies in UK spend a considerable amount of money on advertisement to recruit qualified employees. More over recruiting and staffing is considered as one of the central strategies of HR management in UK.

Internal Communication:

Russian and British companies both realize the importance of good internal communication for smooth running of the business. However the communication happens more naturally in UK than in Russia. In fact internal communication is a key challenge in Russia. Lack of this communication between people is a problem in smooth running of the business. In Russia there is a common belief that if you tell too much you are losing the power. Russians love to talk about daily affairs except the core things for the company. Historically Russian organizations have been good at vertical flow of information but very poor with horizontal flow of information. In both Russia and UK, companies use formalized mechanisms to increase internal communication flow. This system includes instruments like intranets, newsletters, regular department/company meetings, suggestion boxes/systems, etc. The formalized mechanism seems to be more useful for Russia, since UK employees indicates that by the time the information was available via formal channels, they often already knew much of the information from informal channels. In UK, employees were much more likely to share useful information with another employee through informal channels than was the case in Russia.

Training and Development:

Training and development formed more competitive HR strategies in UK than Russia and were more formalized in the UK than Russia. The UK employees have more diverse backgrounds and work in areas which they are not originally trained. Hence they require more formalized training. In UK all the trainings and development is supervised and coordinated by the HR department. The HR department strictly monitors the training progress. In UK, the initiative for training comes from individual, superiors or the HR department. The trainings are conducted once the HR department has the formal discussion with the employee. However in Russia, the practice of on the job training is more prevalent. In Russia an informal training approach is used as most of the people have the desired skill set for the job.

When talking about training and development for Russian employees, many HR and senior managers in Western firms maintain that a mix of hard and soft approaches and styles is necessary.

Conclusion

The HRM is transitioning from the traditional model which was focused only on administrative issues to a new HRM paradigm which lays emphasis on the strategic dimension of human capital management. The new responsibilities of HR require an integration of human capital in corporate strategy, to overcome the complex and diverse global labor market and to be able to incorporate young employees differing values and expectations than their predecessors.

Due to global economic downturn, investments in human capital are not likely to be a high priority for organization whose very survival is threatened by the global downturn. But for companies with strong balance sheets and compelling business models, the economic downturn presents important opportunities to strengthen their HR management capabilities and position them for the inevitable rebound:

Utilizing slack time to engage employees in professional development and technical training programs. This serves both to sharpen skills and to preserve morale during tough times.

Opportunistic hiring of talented individuals caught in downsizing at weaker enterprises, which augments the company’s human capital base for long-term growth

Promoting cross-divisional and cross-functional collaboration. This improves utilization of human resources and encourages teamwork between employees who previously had little or no contact.

While termination of employees is an avoidably painful process, how companies manage downsizing is an important component of human resource management. Generous treatment of departing workers – including high-quality placement services and severance packages – not only creates goodwill among former employees who will speak favorably about the company and who may indeed return as “boomerangs”. It also burnishes the company’s image as an attractive workplace (“employer brand”) and thereby strengthens its capacity to recruit and retain talented persons when the economy recovers.