A Comparison of the Human Resources Policies and Practices of Germany and the USA

Résumé du document

The aim of this essay is to compare the Human Resources practices of the US and Germany, to highlight the reasons behind these differences, and to analyze the evidence these differences provide to the convergence/divergence debate. These countries have been chosen because the US is considered as an economic and political leader in today's society, and many countries often seek to follow or are indirectly influenced by the examples set by the US. Germany has been chosen as it is described as being 'Europe's economic giant'. Therefore, if it is true that countries often follow the example of the US, and that it is their methods that underpin their success, then Europe's economic giant should not be too different from the US, and should therefore provide substantial evidence for the convergence theory. Many benefits may be derived from comparing the Human Resources practices of different countries and regions. From a theoretical point of view, it can help to understand what underpins successful Human resources theories, and what individual factors support or hinder their implementation. From an organizational point of view, comparative Human Resources Management is particularly useful to multinational companies and companies looking to locate in a foreign country, as 'comparisons can identify the unique features of a nation's HRM system and in doing so, help multinational corporations to adopt and fit their Human resources policies and practices across countries".

Extraits

[...] This is due to the barely-existent (if at all) bargaining power of employees. Even if such a system were in place in the US, there would still be substantial differences concerning compensation due to the individual pay methods used. In Wever's study mentioned earlier, all three US firms linked their compensation to performance, probably on the basis of the regular performance appraisals. The number of organisations in the USA using at least one type of variable pay plan is 78% according to a report by Hewlett Associates, risen from 70% in 1999 (Konrad & Deckop, 2001). [...]

[...] It can be said however that it is only the practical elements of HUMAN RESOURCES MANAGEMENT that are the responsibilities of line management, and not the underlying concepts or theories. Overall, the German system seems to be based on long-serving laws and cultures, which are not susceptible to change. Although this system provides benefits to German business by providing stability, limiting confusion, and maximising employee involvement, it does also have disadvantages, namely the slow reactions to change and slow decision- making. [...]

[...] Even if a company is not a member of an employer association, there is usually little variation. This is however changing, as employee associations and unions are beginning to develop models for linking compensation to performance, but this is at an early stage. (Giardini, Kabst & Muller-Camen, 2005). As there is very little collective negotiation in the US, compensation tends to vary significantly between companies, levels of employee, and individual employees. Konrad & Deckop (2001) note wide disparities between the pay of workers and executives. [...]

[...] The context of organisations is relatively stable, and not particularly prone to change. The HR practices in place have been shown to be successful in German organisations, and are therefore unlikely to change. Even if the organisational environment was to facilitate a change in HR practices, the complex laws and regulations would make them difficult to change and it would be a very long and slow process if it were to occur at all. The USA's history however has embedded HUMAN RESOURCES MANAGEMENT in a different way. [...]

[...] This lack of strategic involvement and formal strategy is due to the nature of organisational activity in the US. This lack of strategic involvement and formal strategy is due to the nature of organisational activity in the US. Many organisations rely on short term performance, especially financially, and as a result many of the larger organisations have ‘stripped to their core competencies', according to some theorists, shorter-term perspective of many US firms leads them to pursue competitive strategies that minimize their dependence on human resources, rather than enhancing employee influence and managerial decision making.” (Wever, 1995). [...]