hrm in the local context chapter 11, part 2. presentation outline performance appraisal purposes of...
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HRM in the Local Context
Chapter 11, part 2
Presentation Outline
Performance appraisal Purposes of performance appraisal Performance appraisal in the United States Performance appraisal around the world Performance appraisal in Japan and Korea Improving employee performance in East
Asia
Presentation Outline (2)
Compensation (pay and benefits) Compensation in the U. S. Comparing benefits in the U. S. and the EU Compensation in Japan Performance evaluation and compensation
summary
Presentation Outline (3)
Labor relations Union density Types of labor unions Labor relations in Germany Labor relations in Japan Labor relations in China
Performance Appraisal
Companies need to assess how employees perform
Identifying people to reward, promote, demote, develop and improve, retain, or fire
Performance appraisal is often used as a basis for merit pay
Performance appraisal is also used to identify future candidates for top management positions. Those people may receive "executive development" opportunities
Exhibit 11.14: Purposes of Performance Appraisals
U.S. Performance Appraisal
U.S. laws regulate performance evaluation practices to ensure their fairness
Performance evaluations must relate clearly to the job and to performance
Performance standards must be provided in writing
Supervisors must be able to measure the behaviors they rate
U.S. Performance Appraisal (2)
Supervisors must be trained to use evaluation measures
Supervisors must discuss must discuss appraisal with subordinates
Appeals procedures must be in place, so that the employee can challenge the evaluation
Performance Appraisalsaround the World
Managers agree that it is important to devise ways to get employees to give maximum performance (motivate employees)
In countries with high individualism, performance appraisals are seen as an important way to motivate employees Individual performance and the
development of each employee are important.
Performance Appraisalsaround the World (2)
Performance appraisals are becoming more important in Latin America and Taiwan. To make their companies more
competitive, companies in these areas are adopting western management practices.
Taiwan is an exception in East Asia (next slide).
Performance Appraisalsaround the World (3)
Performance appraisals are not as important in most of East Asia. Examples: China, Japan, South Korea,
Indonesia. Age and family connections are often
more important factors in promotion than achievement. Performance appraisals are less useful.
Performance Appraisals inJapan and Korea
Traditionally, the primary purpose of performance appraisals was to identify and develop candidates for top positions. In the first 8 – 10 years of a manager's
career, appraisals may not be done. When appraisals are done, they may not be
shared with the employee. Management's goal is to develop the "whole
man". When appraisals are done, job performance,
sincerity, loyalty, and attitude are evaluated.
Improving Employee Performancein East Asia
These are high-context societies. Managers often communicate displeasure with poor performance indirectly. The manager may ignore the poor
performer. The manager may communicate his
displeasure in a subtle way to an intermediary, such as a family member of the employee.
Improving Employee Performance
in East Asia (2) These are also collectivist societies. Group
performance is emphasized. Poor performance brings shame to the work
group. Work groups often
praise good performers provide informal training to those who need it use peer pressure to get poor performers to
do better The group's opinion will be communicated
subtly and indirectly.
Compensation in the U.S.
Wages and salaries differ based on these factors External: include local and national wage
rates, laws, and collective bargaining (if workers are represented by a labor union)
Internal: include the importance of the job to the organization, its ability to pay, and the employee’s relative worth to the business
Comparing Benefitsin the U.S. and the EU
In the United States Paid holidays average 10 per year. Most companies give a two-week vacation
after one year of employment. The Family Leave Act requires companies
that employ more than 50 people to provide up to 12 weeks of unpaid leave for the care of newborns.
Comparing Benefitsin the U.S. and the EU (2)
EU law requires companies to give at least 20 paid days off per year. In Sweden, the minimum is 30 days. German workers get an average of 30 days
per year. Many EU countries require employees
to give paid maternity leave. The minimum leave is often more than 12 weeks.
Traditional Compensation Systemin Japan
Qualifications for jobs include education, skills, and minimum age (seniority system)
Male employees younger than 45 may get a "family allowance", based on family size.
Where housing is expensive, housing allowances may also be provided.
Bonus system: bonuses are given in late spring and at the end of the year.
The Nenpo System in Japan(A Type of Merit System)
Pay raises are based on yearly performance evaluations that emphasize goals Goals are not always the same as in Western
countries. No automatic (seniority) pay raises,
family allowances, or housing allowances. Bonuses are still paid There is a growing trend toward the nenpo system
Performance Evaluation and Compensation Summary
Compensation for host-country nationals is usually based on local practices and labor market conditions. Observe national and local laws related to
compensation, benefits, and working hours. For U. S. companies, labor abuses – even by
contractors – result in a bad public image. As a country industrializes, wage rates
increase. Comparative advantages in wages tend to
be short-term.
Union-Membership Density
Proportion of the labor force in a country who belong to unions Germany: estimated 40% belong to
trade unions U.S.: 14.2% of nonagricultural
workforce Denmark: over 80% unionized Great Britain: about 50% unionized
Exhibit 11.18: Union Density in Selected Countries
Types of Labor Unions
Craft union: represents people from one occupation, such as plumbers. A company may have to bargain with
several unions Industrial union: represents all people in a
particular industry, regardless of occupation Some industrial unions have expanded to
cover more than one industry Enterprise union: represents all people in one
company, regardless of occupation or location
Types of Labor Unions (2)
Ideological union: represents all types of workers based on some particular ideology or religious orientation
White collar or professional union: represents a particular management or professional group
Local union: represents one occupational group in one company. Often affiliated with a national craft or industrial union
Exhibit 11.19: Popular Forms of Unions in Selected Countries
Labor Relations in Germany
All non-management employees in an industry are usually represented by the same national union.
There are unions specifically for management employees.
Management is usually careful to respect workers' rights Relations between management and labor are
usually smoother than in the United States. Strikes and lockouts are prohibited while the
contract is in force, but these laws are not always obeyed.
Labor Relations in Germany (2)
A national union negotiates with an employer federation that represents most companies in an industry Some companies will not be represented
on the negotiations committee that bargains with the union.
A national contract is negotiated. Local issues, such as safety, are
negotiated in each work place.
The "Social Contract" in Germany
Workers have a legal right to participate in company decision making (industrial democracy)
The pace of factory work is negotiated and often slower than in the U.S.
Automation and efficiency improvements may not be pursued if workers would lose jobs as a result.
Investment in former East Germany is sometimes seen as part of a company's social responsibility
Example: BMW built a new plant in Leipzig, Germany. Wage rates would have been lower in Poland or Slovakia.
Recent Trends in German Labor Relations
More employers are negotiating with unions directly, rather than through employer federations.
Weak unions are merging with more powerful unions to have more bargaining clout. Example: IG Metall, the metalworkers'
union, now represents workers in textiles and several other industries.
Labor Relations in Japan Company unions (enterprise unions) – weaker
than in U. S. or Europe Labor agreements can be enforced by law, but
are often vague If management and labor cannot resolve a
dispute, it may be settled by mediation or arbitration A mediator helps management and labor
come to an agreement An arbitrator decides what agreement
would be fair, and both sides accept it.
Labor Relations in Japan (2)
Most labor negotiations are related to bonuses
Strikes may occur during labor disputes. These are often just slowdowns. If a company has 2 or 3 work shifts, workers
may work a full shift and then picket during the next shift
Labor Relations in China The only legal union is the All-China Federation
of Trade Unions (ACFTU) Controlled by Chinese Communist Party Union leaders are appointed by the local
Communist Party Chinese government attempts to control
union activity, maintain political stability, and ensure continued production
Labor Relations in China (2) Labor organizing is a hot political issue
Foreign companies that buy state-owned enterprises often lay off many workers.
Workers are frustrated about layoffs, safety issues, and ACFTU unions that don't represent worker interests
Workers have resorted to street demonstrations, unauthorized strikes, and independent unions – all of which are illegal.
Dissatisfied workers often quit and find another job.
Labor Relations in China (3)
Communist party response to worker concerns Ordered ACFTU to organize more foreign-
owned enterprises and address safety issues It is illegal to oppose efforts by ACFTU to
organize workers Under ACFTU pressure, Wal-Mart agreed to
allow ACFTU to organize its stores "if workers request a union"
Labor Relations in China (4)
Local Communist Party committees have flexibility in determining benefit requirements
Housing for workers is often a required benefit.
Companies that buy state-owned enterprises must continue to provide housing for workers
New companies usually pay into a housing fund for workers
Exhibit 11.21: Who Gets Along?
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