Human Resource Management Issues In Europe

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The topic I have selected in relation to my essay is that of human resource management issues in Europe. The purpose of this essay is to discuss the main important factors influencing how people are managed in Europe and to briefly compare some of these with key factors to those in the USA and China.

Different countries have different national systems and governments that influence every aspect of life - social, health and business. The management of human resources in the work place is no exception. Every country has its own policies, laws, rules and regulations which all affect human resource management. The factors affecting human resource management in Europe, for example, differ from other business powerhouses such as China and the USA.

Human resource management (HRM) is, simply put, the strategic and coherent approach to the management of an organisation's most essential and important assets: the employees who are working there. It is these individuals who, independently and cooperatively, contribute and add to the achievement of the goals and aim of the business. The terms 'human resource management' and 'human resources' have mainly replaced the term 'personal management' as the description of the procedure concerned in managing people in organizations.

Human resources are multidimensional in nature. Generally within Europe, human resources may be defined as the knowledge, skills and creative abilities obtained by the population; whereas from the perspective of the individual enterprise, they represent the total of these qualities as exemplified in the talents and aptitudes of its employees (Human Resource Management. 2009. [online]. Available from URL:

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The reality of human resources is pervasive in nature as it is present in almost all enterprises. The focus is on results rather than on rules, and it aims to aids employees to fully develop their potential - ultimately for the benefit of the company, but to improve their productivity as an individual also. Good human resource management encourages employees to give their best to the organisation. It is all about people at work, both as individuals and groups. It involves assigning people tasks in order to produce the best results. An organisation will better meet its goals in the future by providing for competent and well-motivated employees in the present. The foundation and upkeep of cordial relations between people working at various levels in the organisation is paramount to its success. HR management is multidisciplinary, utilizing knowledge and influences drawn from psychology, economics and many other fields.

An efficient and successful HRM system allows organizations to deal with human resource issues strategically. This assists the employees to deliver high quality services, despite internal and external challenges faced by the organization. An effective human resource management system helps organizations prioritize their organizational and business strategies while effectively dealing with the changes inherent in sector reform and decentralization. HRM helps draw and retain competent employees, assists employees and managers in adapting to organizational change, and facilitates the use of technology to determine how and where work is performed (Meaning of Recruitment. 2010. [online]. Available from URL: http://www.scribd.com/doc/3804606/Recruitment

[Accessed 1st Dec 2010]).

Human Resources - "Challenges faced by HR Manager's as a result of Globalization". 2007. [online]. Available from URL:

http://en.allexperts.com/q/Human-Resources-2866/Challenges-faced-HR-Manager.htm

[Accessed 1st Dec 2010].

Human resource management involves more than just the duties already outlined: one of the most important among them is responsibility for staffing resources. For example, determination of the company's staffing needs and where to source the workforce from: independent contractors or hired employees. Usually small businesses have to carry out these functions and activities themselves due to the lack of funds, without exclusively-designated HR managers (Human Resource Management. [online]. Available from URL:

http://www.web-books.com/eLibrary/NC/B0/B66/055MB66.html

[Accessed 1st Dec]).

The job of a human resource manager comprises of duties such as employing people, appropriate training, developing employees' skills and capacities, utilising their talent, maintaining and compensating their services in relation to the job and organisational requirement. It is also the role of a human resource manager to recruit employees and encourage the development of those employees' qualities (Human Resource Management and Development. 2003. [online]. [Accessed 1st Dec]. Available from URL:

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McNamara, C. All about Human Resources and Talent Management. [online]. [Accessed 1st Dec]. Available from URL:

http://managementhelp.org/hr_mgmnt/hr_mgmnt.htm.

There has long been a substantial gap between the Anglo-Saxon and continental approaches to the way enterprises are organised and operated in Europe. Companies in the UK and Ireland have a significantly higher percentage of managers relative to other employees than companies in countries such as Germany, and particularly Italy (National Embeddedness and HRM Practices in US Subsidiaries in Europe and Australia. [online]. Accessed 1st Dec]. Available from URL:

http://www.ctw-congress.de/ifsam/download/track_15/pap00230.pdf).

This emphasis on management positions has itself been a factor in the development of human resource management within the British Isles. Although not all members and affiliates of professional personnel/HR bodies will be in management positions, the bigger the HR department and the more sophisticated its staff, the more HRM jobs can be expected to exist (Human resource management in an expanding Europe. [online]. [Accessed 1st Dec]. Available from URL:

http://www.fedee.com/accession2.shtml).

Even though the HRM concept is more developed in the UK than other places in Europe, not all big companies operate with specialist departments or give their head of HR/Personnel the title of a 'Director' (Human resource management in an expanding Europe. [online]. [Accessed 1st Dec]. Available from URL:

http://www.scribd.com/doc/36930634/Human-Resource-Management-in-an-Expanding-Europe).

The demands at present made upon HRM in the established EU countries differ significantly from those made upon their counterparts in new member states such as Poland, Hungary and the Czech Republic. In the new EU states, all functions are generally more subject to line management control than in the EU, and this is reflected in the lower level of perceived autonomy amongst employees in Eastern Europe. Working practices also contrast significantly, especially in the incidence of shift work (Human resource management in an expanding Europe. [online]. [Accessed 1st Dec]. Available from URL:

http://www.fedee.com/accession2.shtml).

There has been a lot of debate among scholars and policy makers both in relation to the extent to which national systems of industrial relations (IR) and human resource management (HRM) systems are converging. In Europe this debate has concerned both convergence within Europe and convergence between European systems and those of non-European states, most notably the USA (Fenton-O'Creevy, M. Diffusion of HRM to Europe and the Role of US MNCs: Introduction to the Special Issue. 2005. [online]. [Accessed 1st Dec]. Available from URL:

http://www.allbusiness.com/professional-scientific/management-consulting/1039496-1.html).

A significant part of the European convergence debate concerns whether, in Europe, collective employee relations, mediated by representative institutions are being replaced by HRM management systems intended to create a direct and individualised relationship between organization and employee. Some commentators have attributed this trend to the influence of a model of HRM derived from practices in the USA and increasingly adopted in Europe (Perkins, S.J and Vartiainen, M.A. European Reward Management. [online]. [Accessed 1st Dec]. Available from URL:

http://onlinelibrary.wiley.com/doi/10.1002/tie.20323/pdf).

Human Resource Management Practices:

Recruitment and Selection:

Recruitment and selection practices are bound by the law of the land, in particular with respect to sex, race and disability discrimination. In addition, there are new regulations relating to discrimination on the grounds of age. Unless exempted by provision of genuine occupational qualification, discrimination is against the law directly, indirectly or by victimization. In recent years, discrimination legislation has been extended by directives from the European Union, especially the European Convention on Human Rights (John Bratton and Jeff Gold, (2007)).

Competency frameworks have been developed to link HR practices to the key requirements of an organisations strategy. Competencies can be used to from a model or image of the kinds of employees that an organisation seeks to attract and recruit. The response to the image provides the basis for a compatible person-organisation fit. Images will feature in recruitment literature and, increasingly, on the internet via e-recruitment (Looking to the future: Human Resources Competencies. [Online]. [Accessed 2nd Dec]. Available from URL:

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About one third of organisations use some form of e-recruitment. Large savings in recruitment budgets can be made by advertising through websites. Some organisations use online applications to build a database of applications for future use (John Bratton and Jeff Gold, (2007)).

Key documents in recruitment and selection are job descriptions and personnel specifications, although there is a growing awareness of the limitations of traditional approaches to their construction. Some organisations have switched to performance contracts, which can be adjusted over time. In addition, personnel specifications may be stated as competencies, which appear more objective (John Bratton and Jeff Gold, (2007)).

Selection techniques seek to measure differences between applicants and provide a prediction of future performance at work. Techniques are chosen on the basis of their consistency in measurement over time - reliability - and the extent to which they measure what they are supposed to measure - validity. An applicant's experience of selection methods strongly influences his or her feelings towards the organisations (Lawrence S. Kleiman Revised by Tim Barnett. Employee Screening and Selection. [online]. [Accessed 2nd Dec]. Available from URL:

http://www.referenceforbusiness.com/management/Em-Exp/Employee-Screening-and-Selection.html).

The most common selection technique is the interview, which has been the subject of much research. Recent years have indicated that a structure and the use of behavioural interviewing based on competencies increase the effectiveness on interviews in selection. The use of competencies in selection is a reflection of the interest in assessing personality and abilities by the use of psychometric tests. Techniques of selection may be combined in assessment centres to provide a fuller picture of an applicant's strengths and weaknesses (John Bratton and Jeff Gold, (2007)).

The Recruitment and Selection Process is the key to the success of any Human Resources Department in an organisation. Recruitment and selection is a very significant task in an organisation. Recruiting and selecting the right people is of vital significance to the ongoing success of an organisation. This recruitment and selection policy sets out how to make sure that the best people are employed on merit and that the employment process is free from bias and discrimination (Recruitment and Selection Process. [online]. [Accessed 2nd Dec]. Available from URL:

http://hrmadvice.com/hrmadvice/hr-processes/recruitment-and-selection.html).

In free market countries, the personnel profession has adopted a 'best practice' model which fits the prevailing business ideology. This model prescribes a quest for the 'right (best) person for the job'. To achieve this goal, criteria are used to rate prospective applicants by means of selection techniques, including biographical data, interviews, psychometric tests, group exercises, simulated work samples and even handwriting analysis. The most definitive form of selection is likely to take place within the context of assessment centres, which involve several assessors and a variety of selection techniques. The 'best-person' or psychometric model has achieved the status of orthodoxy in free market countries. Elsewhere different models of resourcing apply (Recruitment and Selection. [online]. [Accessed 2dn Dec]. Available from URL:

http://www.hrmguide.net/hrm/chap8/ch8-links7.htm).

The recruitment and selection process is one of the fundamental human resource processes. Recruitment and selection is very sensitive as majority managers hire new employees and this process is always under strict monitoring from their side (Managing Human Resources. [online]. [Accessed 2nd Dec]. Available from URL:

http://highered.mcgraw-hill.com/sites/dl/free/0072934255/276898/noe34255_ch01.pdf).

Reward Management:

A reward system is a key mechanism that can influence each step of the strategy process. Current new pay literature stresses that an 'effective' pay system is one that is aligned with the organisation's business strategy No single best pay system exists. A pay system that may seem highly appropriate in one period, with a particular organisation and work design supporting a management strategy, can be highly inappropriate in the next, when the business strategy and organisational design has changed (John Bratton and Jeff Gold, (2007)).

Changes in reward systems reflect shifts in management thinking. The adoption of more IPRP systems is ideologically driven to encourage entrepreneurial behaviour, although there is an apparent lack of consensus on the type of reward system that might encourage such attitudinal and behavioural change (Kessler, 2001).

There are complex arguments that reward practices create, fulfil, change or violate the psychological contract. Explaining how this phenomenon involves, perceptual and cognitive processes that convince the employee that the organisations has 'reneged' on the contract (John Bratton and Jeff Gold, (2007)).

The reward or compensation employees receive for their effort and contribution to an organisation includes monetary and non-monetary components. Remuneration does not fully compensate employees for their hard work and time. It also has an impact on the recruitment and retention of talented individuals (Selecting and managing your team. [online]. [Accessed 2nd Dec]. Available from URL:

http://cnx.org/content/m35406/latest/).

The term reward management covers the strategy and practice of pay systems. Conventionally, human resources or personnel sections have been concerned with levels and schemes of payment while the procedure of paying employees via the payroll function has been the duty and responsibility of finance department. There is a trend towards integrating the two, motivated by new computerised packages offering a range of facilities (Compensation Management. [online]. [Accessed 2nd Dec]. Available from URL:

http://www.docstoc.com/docs/31319330/COMPENSATION-MANAGEMENT).

There are several factors that contribute to the overall success of employee award and incentive programs. Some examples include commitment and support by senior management, clearly defined goals and objectives, effective promotion with quality consistent communications and the right incentive, compensation and reward (HR Management Employee Incentive, Recognition and Reward Case Study. [online]. [Accessed 2nd Dec]. Available from URL:

http://www.hrmreport.com/article/HR-Management-Employee-Incentive-Recognition-and-Reward-Case-Study/).

Health and Safety:

Naidoo and Wills (2000) identify a number of benefits to organizations from the promotion of health in the workplace: 'hard' benefits for example as improvements in productivity as a result of reduced sickness, absence and staff turnover and 'soft' benefits which include enhanced corporate image.

Employee health and wellness should be an important aspect of managing the employment relationship. To follow the logic of the HRM model, organisations need to protect their investment in their human assets. As in other aspects of the employment relationship, government legislation and health and safety regulations influence the management of health and safety. The HASAWA 1974, for example, requires employers to ensure the health, safety and wellness at work of all employees. Furthermore, in Britain, the HSC has overall responsibility for workplace health and safety (John Bratton and Jeff Gold, (2007)).

EU directives and the Social Charter are an important source of health and safety regulations and counter 'pure market' ideology. With such developments in the law, and a growing awareness of safety hazards and wellness issues, it is likely that HRM professionals will face challenges and greater responsibilities in this area during the foreseeable future. Critical analysis of health and wellness management draws attention to the fact that an employment relation involves an economic and power relationship. Shareholder interests and return on investment may come before workers' health and safety. Wellness management arguably is a distraction because it manages the consequences rather than causes of ill-health (John Bratton and Jeff Gold, (2007)).

Human Resource Development:

People differentiate between human resource management and human resource development as a separate profession. They might include human resource management in human resource development, explaining that human resource development comprises of a wider range of activities to develop personnel within organisations e.g. career development, training, organisation development, etc (McNamara, C. All about Human Resources and Talent Management. [online]. [Accessed 1st Dec]. Available from URL:

http://managementhelp.org/hr_mgmnt/hr_mgmnt.htm).

Human resource development is the part of human resource management which specially deals with training and development of the employees. Human resource development includes training and employee after he/she is first employed, arising opportunities to learn new skills, distributing resources which beneficial for the individual's tasks, and any other developmental activities (Human Resource Management. [online]. [Accessed 2nd Dec]. Available from URL:

http://www.scribd.com/doc/915051/Human-Resouce-Management).

The human resource development pathway expands a manager's knowledge and skills in relation to people development and includes coaching and organisational learning. Being capable of coaching provides a manager with an additional inter-disciplinary skill set to release potential in others. It also helps a manager to lead or develop their workforce so that they can successfully manage performance. The reward or compensation employees receive for their effort and contribution to an organisation includes monetary and non-monetary components. Remuneration does not fully compensate employees for their hard work and time. It also has an impact on the recruitment and retention of talented individuals (John Bratton and Jeff Gold, (2007)).

The term reward management covers the strategy and practice of pay systems. Conventionally, human resources or personnel sections have been concerned with levels and schemes of payment while the procedure of paying employees via the payroll function has been the duty and responsibility of finance department. There is a trend towards integrating the two, motivated by new computerised packages offering a range of facilities (John Bratton and Jeff Gold, (2007)).

There are several factors that contribute to the overall success of employee award and incentive programs. Some examples include commitment and support by senior management, clearly defined goals and objectives, effective promotion with quality consistent communications and the right incentive, compensation and reward (HR Management Employee Incentive, Recognition and Reward Case Study. [online]. [Accessed 2nd Dec]. Available from URL:

http://www.hrmreport.com/article/HR-Management-Employee-Incentive-Recognition-and-Reward-Case-Study/).

Discrimination at work place issue in Europe and the on it law:

Discrimination occurs when an employer treats one employee less favourable than others. It could mean a female employee being paid less than a male colleague for doing the same job, or a minority ethnic employee being refused the training opportunities offered to white colleagues. Discrimination is not always unlawful as people are paid different wages depending on their status and skills. However, there are certain reasons that your employer cannot discriminate against you for (Equalities. [online]. [Accessed 3rd Dec]. Available from URL: http://www.hertscvs.org.uk/userimages/EQUALITIES%20TOOLKIT%20Final%20Final.pdf).

By law an employee cannot be discriminated again on the basis of any of the following points: gender, marriage or civil partnership, gender reassignment, pregnancy and maternity leave, sexual orientation, disability, race, colour, ethnic background, nationally, religion or belief and age (Discrimination in Employment. [online]. [Accessed 3rd Dec]. Available from URL:

http://d3employeesolutions.co.uk/Documents/No%205%20Discrimination%20in%20Employment%20v2.pdf).

The law of equal opportunity aims to create a 'level playing field' so that people are employed, paid, trained, and promoted only because of their skills, abilities and how they do their job (Sex Discrimination and Equal Pay. [online]. [Accessed 3rd Dec]. Available from URL:

http://www.nidirect.gov.uk/index/information-and-services/employment/discrimination-at-work/sex-discrimination-and-equal-pay.htm).

According to Thomas (1992), dimensions of workplace diversity include, but are not limited to: age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation, educational background, geographic location, income, marital status, military experience, religious beliefs, parental status, and work experience (Chan, A. The challenges of workplace diversity management. [online]. [Accessed 3rd Dec]. Available from URL:

http://workplace-diversity.blogspot.com/2007/02/challenges-of-workplace-diversity.html).

An employer also cannot dismiss an employee or treat them less favourably than other workers if they part time workers or are on a fixed term contract.

Direct discrimination occurs when an employer treats an employee less favourably than someone. For example, it would be direct discrimination if a driving job was only open to male applicants (What the Equality Act 2010 means for you as an employer. [online]. [Accessed 3rd Dec]. Available from URL:

http://ehrc-consult.limehouse.co.uk/portal/equality_bill/equality_act_employer?pointId=1264069804765).

Indirect discrimination is when a working condition or rule disadvantages one group of people more than another. For example, saying that applicants for a job must be clean shaven puts members of some religious groups at a disadvantage (Equality Britain. [online]. [Accessed 3rd Dec]. Available from URL:

http://www.equalitybritain.co.uk/bullyingintheworkplace.asp).

Diversity in the workplace

Cultural diversity includes a range of ways in which people experience a unique group identity, which includes gender, gender identity, sexual orientation, race, ethnic and age. An organization's culture tends to determine the extent to which it is culturally diverse (Diversity in Business. [online]. [Accessed 4th Dec]. Available from URL:

http://en.wikipedia.org/wiki/Diversity_%28business%29).

While diversity in the workplace brings about many benefits to an organization, it can also lead to many challenges. It is the responsibility of managers within organizations to use diversity as an influential resource in order to enhance organizational effectiveness. In the Journal of Applied Behavioural Science, C.L. Walck defines managing diversity in the workplace as "Negotiating interaction across culturally diverse groups, and contriving to get along in an environment characterized by cultural diversity" (Workplace Diversity. [online]. [Accessed 4th Dec] Available from URL:

http://www.reachinformation.com/define/Diversity_%28business%29.aspx).

In a journal entitled The multicultural organization, by Taylor Cox, Jr., Cox talks about three organization types which focus on the development on cultural diversity. The three organization types are: the monolithic organization, the plural organization, and the multicultural organization (Diversity. [online]. [Accessed 4th Dec]. Available from URL:

http://dictionary.sensagent.com/Diversity_%28business%29/en-en/).

The Human Rights Act

The Human Rights Act came into force on 2nd October 2000 and incorporates into UK law certain rights and freedoms set out in the European Convention on Human Rights.

An employee's human rights are protected by the law. If an employer is a public authority, the employer must follow the principles of the Human Rights Act.

The Human Rights Act is based on the European Convention on Human Rights and adds protection for workers' rights and freedoms. Provisions within the Act deal with work-related matters. If an employee works in the public sector, it's unlawful for an employer to violate his human rights under the convention, unless an Act of Parliament means it has no choice (Human Rights in the Workplace. [online]. [Accessed 4th Dec]. Available from URL:

http://www.nidirect.gov.uk/index/information-and-services/employment/discrimination-at-work/human-rights-in-the-workplace.htm).

Brief comparison with human resource management in China and the USA

Human resource management and labour-management relations in China are different from those in other countries because of different political and economic systems and social and cultural backgrounds. Lots of changes have taken place in human resource management since the 1978 economic reforms. As the economic reforms deepen and a market economy is established, changes will take place in the nature of labour- management relations and human resource management in Chinese enterprises (Zhao, S. Asia Pacific Journal of Human Resources. [online]. [Accessed 4th Dec] Available from URL:

http://apj.sagepub.com/content/32/2/3.full.pdf).

China's successful development as a major economic power can only be achieved with the aid of highly skilled, professionally trained management (World Bank, 1985; Fischer, 1990). In China the management training function is not only aligned to economic structure and development but also to political and ideological beliefs. Since management development is perceived as an important means of enhancing managerial competence and improving competitive advantage (Benson, 1996; Gregory and Wales, 1996; Osbaldeston and Barham, 1992), international companies involved in joint ventures need to be aware of the cross-cultural implications in the design and implementation of management training programmes for Chinese managers and its integration into the strategic human resource system (Siu, N.YM & Darby, R. A Study of Management Development Practices in a Foreign Joint Venture in China. [online]. [Accessed 4th Dec]. Available from URL:

http://rphrm.curtin.edu.au/1999/issue1/china.html).

The field of human resources management is rapidly developing in China. The competition for skilled professionals is more vigorous than at any other time in China's history. HR managers must learn to plan and recruit strategically in order to retain employees with desirable skills (Gross, A. Recruiting & Human Resource Issues in China. [online]. Accessed 4th Dec] Available from URL:

http://www.pacificbridge.com/publication.asp?id=51)

US economic prosperity has led to labour shortages, which are pushing organizations to engage in creative recruitment and retention practices and to employ workers from non-traditional sources, leading to a more diverse workforce. HR professionals are realizing that they need to update their technological skills and develop systems for managing more virtual organizations. Human resource (HR) is also trying to become more of a strategic partner in firms. HR has the potential to create competitive advantage for firms by successfully combining a reputation as being an employer of choice with a high performance work system and an effective set of incentives (Konrad A.M.; Deckop J. Human resource management trends in the USA - Challenges in the midst of prosperity. [online]. Accessed 4th Dec]. Available from URL:

http://www.ingentaconnect.com/content/mcb/016/2001/00000022/00000003/art00009

ÄŒesynienÄ-, R. GLOBALIZATION AND HUMAN RESOURCE MANAGEMENT. [online]. [Accessed 4th Dec] Available from URL:

http://www.leidykla.vu.lt/fileadmin/Ekonomika/82/41-56.pdf

Conclusion

In conclusion I have discussed a number of issues and problem regarding to Human resource management in Europe. I have given an introduction and history on what human resource management is. I have talked about the purpose, nature, functions and organisational implications of human resource management. I have mentioned the issues and problems employee sface or could face during the course of their employment e.g. discrimination of various sorts. I have talked about the law of which governs an employee's rights at the work place in Europe. I have written on and discussed a number of the human resource management practices as well. And at the end I have slightly discussed the human resource management system in China and the USA in comparison to Europe.