The Evolution of Human Resource Management

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Human resource management has undergone an enormous change over the past decades. Many years ago, large companies used to turn to their Personnel Department to manage all the activities around hiring, firing and paying their employees. Nowadays, more and more organizations consider the human resource department as a key in all kinds of employee management issues. The personnel department is more and more replaced by the human resource department.

An important switch in the strategic thinking came to mind through the publications of Hamel & Prahalad (1994). They began to emphasize the inner strengths of the corporations with their core competencies. They found out that, because of the fast evolution in the environment, a corporation had to continue with their own strengths instead of seeking to find an analytical approach to the right situation.

Human resource management has been defined in a various of ways. The most commonly used definitions for HRM are the following:

'Human resource management involves all management decisions that affect the relationship between the organization and their employees - its human resources' (Beer, 1985).

'The new HRM model is composed of policies that promote mutuality - mutual goals, mutual influence, mutual rewards, mutual responsibility. The theory is that policies of mutuality will elicit commitment which in turn will yield both better economic performance and greater human development' (Walton, 1985).

'The main dimensions of HRM involve the goal of integration, the goal of employee commitment, the goal of flexibility/adaptability and the goal of quality' (Guest, 1987).

'The notion of HRM is used… to refer to all those activities associated with the management of employment relationships in the firm' (Boselie, 2002).

In general, human resource management is defined as a variety of activities associated with managing all kinds of relationships of the employees. It is all about the hiring, firing, recruiting and training of the best employees, making sure that they are high performers and enhance a great variability of work. Other activities include managing the approach to employee benefits, compensation and promotion.

2.2 The Internationalization of Human Resource Management

Because the focus is on the cultural differences between countries in their view of human resource management, a short overview of the internationalization of HRM systems is given.

Not until the 1980s, international differences between countries affecting human resource management were mentioned in the literature. Since this time, the area of HRM got a managerialist orientation, meaning that employees and managers are free in determining the structure and implementation of the human resource practices and policies themselves. The literature was convinced that one HRM model was superior. Such a model was seen as being universally applicable to all kinds of organizations and nations, resulting in the implementation of the research designed for one country, to other, very different, countries. According to Hofstede (1980), this research ignored the fact that information about societies, their languages, their thoughts, values and culture is fundamental to understand the behavior of people within organizations.

Besides this research, another stream was developed (i.e. Adler, 1984; Smith, 1992; Rosenzweig & Nohria, 1994), which notified the problems in taking the generalizability of models for granted, as this would assume the stability of factors across perspectives. Cross-national societal frameworks are likely to create management practices that differ between countries.

Different types of HRM practices may be determined to a considerable degree by the imperative of maintaining external credibility through adherence to institutional structures, rules and norms at the national level, and may differ as a result of different national contexts (Gooderham, Nordhaug, & Ringdal, 1999). Moreover, it has been argued that the limitations imposed upon human resource practices by societal factors are required for employers to make choices that are favorable to the long-run competitiveness of the organization and country (Dore, 1989; Streeck, 1989; Purcell, 1993).

2.3 The Practices of Interest for this Research

As stated before, it is clear that there are a lot of factors affecting the human resource management system in different countries. Like mentioned earlier in the first chapter, the focus is on three different aspects of HRM.

2.3.1 National Education and Training

Delery and Doty (1997) referred training systems to whether an organization offers widespread training opportunities for their employees or whether they depend on selection and socialization processes to gain required skills. Investments in employee training are valuable in improving the skills of human capital within the organization (Becker, 1975). As Becker (1975:19) wrote: "most on-the-job training presumably increases the future marginal productivity of workers in the firms providing it". This practice turns out to be essential, because training has been suggested to be a high-performance HRM practice in research by many scholars, including Delaney and Huselid (1996) and MacDuffie (1995).

2.3.2 Reward System

Appraisals are conceptualized in terms of outcome-based performance ratings and the extent to which subordinate views are taken into account in these ratings (Delery & Doty, 1997). Performance appraisal systems help employees in getting feedback on their actions and such systems help to find ways to increase their ability that turns out to be useful for the company (Fey et al., 2009). Feedback provided by performance-related pay systems is useful in creating a sense of competence, achievement and control in workers (Bandura, 1977).

2.3.3 Employee Participation

Delery and Doty (1997) defined employee participation as the process of taking part in decisions as well as obtaining opportunities to communicate ideas for improvement. This is an essential practice to investigate because of the differences across cultures about the hierarchy within a company.