Human Resource Management

in CEE: Past and Future

Prof. Dr. Sonia Ferencikova School of Management, Bratislava

Slovakia sferencikova@vsm.sk

Managing HR in CEE

• ”The composition of our membership has evolved over the years, with the changing HR landscape. Our typical member was initially a Western national based in a Western European city responsible for HR operations in CEE. Then it was a CEE national who re-located to the headquarters. These days, many members are CEE nationals based at CEE headquarters located in CEE capitals – some working for an emerging group of CEE multinationals. In other words, our membership base reflects several trends. First, the Western nationals were increasingly replaced in their CEE responsibilities by CEE nationals (the pool of talent in CEE gradually developed and was sufficiently rich to cover these positions). Second, the multinational companies in their search for cost cuts realized that the location of the headquarters in CEE makes sense. Third, some Central European companies formerly run in only one country began operating internationally, primarily in neighboring countries of CEE....” (Ferencikova, Gilett 2010)

Phases of HR development and HR research I.

Entry of foreign investors (outside in) • HR challenges for business success of FD investors • HQ – subsidiary HR practices transfer • „import“ - influence of foreign investor practices on the

performance of local FDI-invested companies • pros and cons of HQ HR practices and tools in CEE environment • cultural clashes in West-East joint ventures • expatriates – Alice in Wonderland, cross-cultural communication • case studies of FDI-invested companies • Cross-country comparison of various HR aspects (sometimes within

CEE, sometimes West vs. East) • „HR spillovers“ to local companies

Phases of HR development and HR research II.

Focus on internal HR issues in local companies (inside)

• development of HR function in former socialist countries

(communist legacy in organization and behaviour of local management and labor force)

• selected functions: education and development, development of local management, motivation (values), compensation, elite and leaders

• country studies, sometimes comparison of different countries of the region

Phases of HR development and HR research III.

Future:

CEE HR in international journals I.

• WU Wien database: 128 entries for HRM in CEE

• Journal of East European Management Studies, Journal of East-West Business, Journal of World Business, Journal of International Business Studies, Management International Review: studies mostly by „international“ scholars

• Favorite countries: Poland, Hungary, Russia, Czech Republic, Romania, Bulgaria, Slovenia...

• Many studies in local languages in local journals by „local“ scholars

CEE HR in international journals II.

• HR planning – 20 entries – out of that in 5 CEE authors

• Recruitment – 7 entries – 2 CEE

• Performance appraisal – 9 – 3 CEE

• Compensation – 8 – 3 CEE

• Reward systems – 11 – 3 CEE

• Quality of work and productivity – 5 – 2 CEE

• Training and carreer – 23 – 9 CEE

• Employee rights and unionization – 7 – 7 CEE

Migration Future topics (big ones) ???

Future topics (big ones)

• Migration within Europe (East-West), Europe – USA, migration Asia – Europe

• Sustainability of the regional differences in HR in Europe (productivity, compensation etc.)

• Trends in demographics as challenges for HR: 1. aging population, missing labor force, diversity issues

2. generation Y and new attitudes towards work, carreer, work-life balance (differences between West and East)

3. future of work and HRM (technology, social media etc.)

• Business education (management and crisis, ethics, CSR, compliance...)

• Ethics in business

Migration Future topics (micro ones) ???

Future topics (micro-ones)

• Talent identification, development and retention

• Retention, loyalty, engagement, communication, motivation, changing values

• Carrer management, work-life balance

• Leadership development, leadership styles and role models

• Teamwork, efficiency of cross-cultural and diverse teams, managing virtual teams

• HR issues in regional M&As

• Expatriation and its limits, redirection (East-East, East-West)

• Reverse knowledge transfer – subsidiaries to HQ

• HR and corporate social responsibility

Priorities in HRM in 2010 and 2011

Increase employee engagement 1 1 Performance management

Performance management 2 2 Increase employee engagement

T&D of all employees 3 3 Increase employee motivation

Increase employee motivation 4 4 T&D of all employees

Cutting costs 5 5 Developing high potentials

Developing high potentials 6 6 Retaining talents

Compensation and benefits 7 7 Compensation and benefits

Recruitment 8 8 Attracting talents

Retaining talents 9 9 Recruitment

Attracting talents 10 10 Cutting costs

Employer branding 11 11 Career management & succession planning

Career management & succession planning 12 12 Employer branding

Internal HR marketing 13 13 Internal HR marketing

Outsourcing HR 14 14 Outsourcing HR

Priority 2010 Priority 2011

Future

HR will become even more important and strategic and will cooperate more with the business 64%

HR will stay the same 30%

HR become less important and more administrative area 6%

strongly agree,

agree

neither agree, nor

disagree

disagree, strongly

disagree

HR needs to develop new skills to meet the needs of future

organization82% 14% 4%

Influence of crisis on talent management

30%

73%

42%

37%

30%

7%

32%

70%

27%

58%

63%

70%

93%

68%

0% 10

%

20

%

30

%

40

%

50

%

60

%

70

%

80

%

90

%

100

%

takes longer to find talent

increasing the need for internal talent

development

stronger competition among the talent

population

hiring of talent from external market is much

more easier

retention of talents is easier

decreased need fot talents

decreasing investment in talent development

no

yes

How to keep emploeeys engaged and motivated?

more intensive communication 66%

giving more frequent performance feedback 61%

increasing focus on coaching and mentoring 43%

providing additional developmental opportunities 41%

changing roles to expand responsibilities 30%

creating special compensation programs for high performers and at risk

employees 23%

increasing opportunities for special project assigmnment 18%

providing new opportunities for job rotation 16%

holding additional employees forums 9%

Phases of HR development and HR research III.

Future: inside out

• So far, very specific, internally diverse region, however from outside

relatively homogenous i.e. valuable for cross-country and cross-regional comparisons

• Dynamics higher in CEE than in WE – the reasons, search for competitive advantage in HR in the „mature“ times and for late-comers (innovation and new industries related to talents and knowledge?)

• Lessons for the rest of the world: gender diversity may be tackled the best in the world ? , young management and their development, expatriation.... etc. etc.

Thank you!

sferencikova@vsm.sk