Human Resources Management Conduct a Series Specific

human resources management Conduct a series specific case studies companies, countries, approach issue human resource management development. Specific comparative analysis made practices U.S. countries.

Human resource management -- the case of McDonald's and Wal-Mart's HRM practices in Europe, Asia and the United States of America

The role of human resources management has changed dramatically throughout the past recent decades. Once the people operating the machineries and blindly implementing the decisions made by the managers, the employees have gradually metamorphosed into the most valuable organizational assets. They are the ones who put together their knowledge to create intellectual capital and support the employers in attaining their objectives.

The modern day staff members create value for the organization and represent it in all aspects of the business dimensions and the interactions with other categories of stakeholders -- customers, business partners, the general public, governmental and non-governmental institutions and so on. And this trend in the importance of the human resource is supported by the emergence of the services sector -- the largest generator of revenues and employment facilities --, but it is also present in all companies, services or non-services centric.

In this order of ideas, human resource management becomes a key success factor by striving to generate employee loyalty and performance, and the ultimate support in attaining organizational goals. Developing and implementing a HRM program is however a more difficult task, and it is pegged to a wide array of elements, such as managerial traits, the sector in which the company operates, the organizational resources or the nature of the work completed.

All these factors are quantitative, in the meaning that they can be measured and addressed in a numeric and objective manner. Still, there are other factors which are more salient and less difficult to address. One of these factors is represented by culture, in the meaning that it is intriguing to observe how the culture in one region impacts the human resource practices of the economic agent.

Answering this question is a highly intricate endeavor, for the specific reason that the role of culture in shaping human resource management is a qualitative factor -- it cannot be measured or quantified. It will as such be addressed through systematic research of various companies in diverse global regions. Emphasis would be placed on the HRM practices they developed and the scope is that of identifying whether differences occur and if they are pegged to the features of the local cultures.

2. Human resource practices in selected comparisons

The role of culture in shaping the human resource processes is rather difficult to estimate, but it is commonly accepted that such a role does indeed exist. Laraine Kaminsky (2002) for instance believes that "culture impacts on every stage of the HR cycle, from selection and recruitment, to feedback, evaluation, coaching, and exit interviews." In other words, when conducting international operations, the multinational corporation would develop HRM practices based on the features of the local culture.

On the other hand, it is also commonly accepted -- by a different spectrum of researchers -- that multinational corporations develop their own cultures, which they implement globally. In this order of ideas, regardless of the market in which they operate, the multinationals would develop the same HRM practices, as belonging to their own culture, rather than the local cultural features. "Organizations develop a culture of their own that is distinct from the national and industry contexts in which the organization is embedded, thus ignoring the potential impact of external environmental factors on organizational culture" (K'Obonyo and Dimba, 2007).

These statements regarding the role of culture in the development of HRM practices are quite generic, and in order to address the issue at hand from a more particular viewpoint, it is necessary to review the HRM practices implemented by specific multinational corporations operating in Europe, Asia, as well as the United States. For purposes of comparison, the cases of fast food giant McDonald's and retailing leader Wal-Mart would be assessed.

2.1. Culture and location in management

McDonald's and Wal-Mart are two of the most successful companies at the global level. They are often blamed for the impact of unhealthy nutrition on the population, respectively for the sacrifices made in the name of the lowest price, but from an economic standpoint, they are the epitomes of business success and the emblems of the globally triumphant American corporation.

The human resource management practices at McDonald's are centered on the attraction of employees, their retention and their training. McDonald's is globally renowned for promoting its employees to middle management positions and for allowing them to work flexible schedules, so that they can best meet their personal and professional responsibilities.

Within the United States of America, the human resource practices are focused on raising enthusiasm and integrating the staff members within the overall organizational culture. Employees are motivated to be more active and determined to prove their worth, and the company promises to reward them through incentives such as competitive wages, free or discounted meals, flexible hours, management training, promotional opportunities, medical insurance or even profit sharing.

"We strive to hire and keep the brightest and the best. And to do that, we've put together perks designed to make you smile -- even before you pick up your paycheck. From flexible schedules and competitive wages to management training and investment opportunities, our benefits let you know you're a valued part of our team" (Website of McDonald's, 2011).

This culture is highly common within the United States, where economic agents focus on raising enthusiasm and creating a dynamic, competitive and rewarding working environment. Here, companies strive towards integrating the staff members and aligning their individual goals with the overall goals of company. A similar approach was implemented by retail monolith Wal-Mart, who attempts to promote a cheerful working climate. Employees at Wal-Mart gather up each morning to give a cheerful morning salute, to start the day in a joyful mood.

Still, when this culture is exported to other global regions, it is less successful. The most relevant example in this sense is offered by the failure of Wal-Mart in Germany. The retailer operated in the European country for several years, but was eventually faced with the need to count its losses and close the store.

The reasons for Wal-Mart's failures in Germany can be assessed as multiple and linked to various stakeholder categories. Still, on a closer look, they are all due to the company's inability to recognize and adapt to the traits of the local culture. For instance, the German retail industry was already populated with European retailers, such as Metro, Carrefour, Cora or other hypermarkets, and Wal-Mart was unable to compete with them. Then, at the specific level of the human resource policies, Wal-Mart did not recognize that the German population was more private and would not show enthusiasm or enjoy the morning cheer. Also, the German employees were better protected by employment laws and fought the minimum wages as well as the corporate prohibitions from forming and joining unions.

Furthermore, the managers in charge of operations at Wal-Mart Germany were all Americans, who did not want to learn German. Subsequently, English became the official language of Wal-Mart Germany. These managers also ignored the specifics of the German market as well as its legislations (Knorr and Arndt, 2003).

Overall then, Wal-Mart's HRM practices in the European country were virtually imported from the United States, but they did not find a real applicability. The company strived to integrate its own culture in the German store, and did not recognize the particularities and importance of the local culture. In this particular case, the local culture did not play a real role in the development of HRM practices. Nonetheless, since Wal-Mart Germany was eventually closed down, the neglect of local cultures in the development of organizational strategies contours as an inadequate course of action.

And the retaliating giant seems to have learned this lesson and is now better at applying it in Asia. China was the first Asian country penetrated by Wal-Mart and the corporation strived to apply the same HRM model and organizational culture as in the United States. Still, to avoid failure from repeating, it made some concessions, the most important of them being that of allowing the Chinese employees to join unions (Dessler). Other than this however, the HRM policies in Wal-Mart China are similar to those in the United States, focusing on enthusiasm, employee commitment and the staff support in attaining customer satisfaction and organizational goals (Website of Wal-Mart China, 2011).

The experience of Wal-Mart's international expansion portrays a company focused on its own culture, and placing little emphasis on the cultural features of the regions in which it operates. The multinational organization strives to export its operations, its business model and its human resource strategies, and makes little effort towards adapting its HRM practices to the management and development of the staff members.

In the case of McDonald's, the managerial act they implement in China is also similar to that implemented in the United States. The emphasis also falls on integrating the employees within the organizational culture, and similar benefits are offered. Changes however occur at the level of the wages offered, these being regulated by national institutions in each region.

An observation which is however made in the human resource management policies and practices in China relative to those in the United States is that the quality of the Chinese efforts is inferior to that of HRM efforts in the U.S. For instance, while the managers in the United States are highly mature and experienced, the managers in China tend to be younger. Such a strategy would have been selected to encourage youth, enthusiasm and the company's commitment to management training and promotions.

Another observable difference between HRM in China and U.S. is represented by the training programs. These are quite specific in both regions, and train the employees on how to operate the machines, prepare the meals, ensure surveillance and other such operations. Still, in the United States, upon completion of the training programs, the employees have the opportunity of going to the Hamburger University -- McDonald's Center of Training Excellence. In China however, McDonald's does not operate such an educational facility, meaning that the training process is incomplete and does not have the same finality.

"If you are promoted to be a manager, you have chance to go to Hamburger University. However, in China, there is not any Hamburger University for crewmembers or managers to enter. Here the crewmembers just taught easily on how to do the procedure, not a complete training program. That means it is not a professional program. China McDonald's are just aware of the quantity not the quality" (JPKC).

Finally, a last difference is observed in the fact that the incentives offered by McDonald's China are significantly inferior to the incentives offered in the United States. In the North American country, the McDonald's employees are presented with benefits such as profit sharing or support in educational attainment, both of which are uncommon in China.

"There are some benefits the china McDonald's employees don't have, such as educational assistance. China McDonald's don't provide any program or scholarship for employee; profit sharing is strange for China McDonald's employees" (JPKC).

The incentives play an important role in employee retention, satisfaction and performances. And in the United States, the existence of more incentives as part of the HRM program creates higher levels of employee motivation. In China however, since the employees are presented with fewer incentives, they are less motivated and they perceive the job as just a job, rather than an opportunity and a place to work hard and prove their worth.

Within Europe, the HRM approach of McDonald's is quite similar to that in the United States. The underlying principles are the same, but differences occur when these are demanded by the national legislations. In Germany and the United Kingdom for instance, McDonald's was forced to respect the union and pay determinations implemented by the domestic authorities (Royle, 2003).

The specifics of the incentives offered also differed based on some cultural features. In the United States for instance, employees are less accustomed to sabbatical leave and reserve this for teachers usually. In Europe however, individuals place a more increased emphasis on the balance between work and personal life. At McDonald's this cultural trait has materialized in some executives in the UK, Germany, Switzerland and Netherlands getting sabbatical leave based on experience within the firm.

Another difference between U.S. And Europe HRM practices at McDonald's is represented by the offering of profit sharing opportunities. While this is common in the United States, it is often unheard of in European countries such as France, Sweden, Portugal or Italy. The company argues that the incentive packages in the European markets are already competitive and do not require this particular benefit (Berrone).

In spite of these differences, the human resource management and development policies and practices are rather similar at McDonald's. The company strives to preserve centralization of its HRM decisions and equity of employee incentives. This objective is difficult to attain in the context of different cross-country criteria, such as wage legislations or competition. Still, the fast food company struggles to overcome this impediment through the creation and implementation of TIP -- Targeted Incentive Program -- the short-term incentive package it implements as a global standard.

In terms of incentives, HRM values and other human resource management and development policies, McDonald's implements similar decisions. It strives to be slightly more wage competitive than other fast food companies in all markets in which it operates, but these decisions are not based on cultural differences, but on criteria such as legislations or intensity of competition faced.

"These overall policy decisions reflect a company, any company, trying to balance internal and external fairness concerns. Competitive base wages require that local and regional labor markets have a central role in a somewhat decentralized decision process" (Berrone).

All in all, both Wal-Mart and McDonald's appear as important international employers, but their primary focus is that of exporting the American culture into the regions where they operate. The human resource practices for management and development are similar to those implemented in the U.S., with two specific exceptions. The first exception is represented by the case when there are local needs that have to be met, such as legislative needs of working hours or wages. The second exception is represented by the case when the HRM policies in other global regions are inferior to those in the United States.

These findings lead to the ultimate conclusion that both Wal-Mart as well as McDonald's perceive the global market as a new source of income and tend to exclusively focus on this dimension. They tend to disregard the features of the local cultures and seldom include them in the development of the human resource policies. In other words, the HRM policies and practices are more so influenced by the organizational culture, rather than by the cultural diversity of the market in which the firms operate.

2.2. Measuring success of HRM processes

The means in which each economic agent develops and implements human resource management and development processes depend strictly on the internal decision making systems at the company. Still, the firms must also assess the success rates of their HRM programs.

Since the human resource management efforts are often qualitative and they integrate more sensitive issues, the quantification of the results they generate is quite intricate. Still, some possibilities on how to measure the results of the human resource programs include the following:

The measurement of employees' levels of satisfaction on the job before the implementation of the HRM practices and after the processes have been implemented; this could be attained through anonymous questionnaires

The comparative measurement of employee turnover rates before the HRM processes and in the aftermath of their implementation. This is quite straightforward to be achieved as it is clearly revealed in organizational documents and the already existent data just has to be retrieved, processed and interpreted.

The assessment of the levels of customer satisfaction before and after the implementation of the HRM practices. This means of measuring the success of HRM practices is mostly applicable within service institutions, where the employees directly interact with the customers and where the final satisfaction of the employees is pegged to the nature of the interaction between the clients and the staff members. Employee satisfaction is a direct indicator of employee efforts and performances, which are then reflected in customer satisfaction. In this setting, when customer services are higher after the implementation of HRM, a conclusion is drawn that the HRM processes had been successful.

2.3. Evolution and future of human resource management

The human resource practices have evolved tremendously throughout the past two decades. The concept of human resource management became popular during the 1980s decade, when academicians came to place more emphasis on the role of the employees within the changing organizational context. Since then, HRM has gradually transformed into a focal point of interest for both researchers as well as practitioners.

Throughout the years, systematic emphasis came to be placed on several dimensions of human resource management, such as communication, the organizational identity, the organizational hierarchy or employee motivation.

The past two decades in the evolution of human resource management have represented the concretization of efforts made since the beginning of time. The concepts used by HRM were applied since biblical times, yet they were not academically recognized. Then, during the Industrial Revolution, when factories were opened and employees had to be managed, a rudimentary form of HRM developed in the personnel department. Today, all functions regarding the personnel management have been assumed by HRM.

Human resource management is the oldest managerial model and the most effective one (Khilawala). It impacts all aspects of the organizational operations and it is implemented in an integrated manner to create the best results. Still, the evolution of HRM is yet to be complete.

Human resource management is rather sensitive to forces in the micro and macro environments, such as changing individual demands and expectations, as well as more social pressure on education or technological development. In this order of ideas then, it is expected for HRM to continue to develop throughout the next decades and this evolution would be aimed at readdressing the totality of changes impacting the workplace.

3. Factors affecting retention

A crucial aim of any human resource management process is that of positively affecting employee retention. Economic agents invest various resources in the hiring and development of the staff members and when these choose to leave the firm, the employer is faced with the loss of its investment in the respective employee, as well as the need to replace them. This in turn generates additional costs.

In order to positively impact retention, economic agents implement a wide array of incentives. The general perception is that the most important factor in retaining the staff members is represented by the financial rewards, including the salary, as well as other financial incentives, such as bonuses and premiums.

This perception is however challenged as other incentives are also considered essential in the retention of the employees. Wage is often associated with an incentive to become employed within a firm, but it is insufficient in ensuring the long-term retention of the employees.

The actual factors then, which ensure retention, vary from one organization to the other, but most importantly, from one employee to other. In the case of Wal-Mart for instance, the most compelling incentive is indeed represented by wage, as the other benefits are restricted. At McDonald's however, a powerful incentive is offered by the educational opportunity, the training programs and the advancement opportunities. In other words, in the case of McDonald's, the most important retention factor is represented by the support the company offers in the development of the professional career.

In other circumstances however, other factors might play a more important role. For instance:

Guler Aras and David Crowther (2010) believe that the most important factor in positively affecting employee retention is represented by the ability of the employee to be mentored, to receive coaching from a respectful superior, from whom they can learn and in turn, develop.

Gail Hawkins (2004) believes that the most important factor affecting employee retention is represented by the culture present within the employing organization. A culture based on communication, equality, equity and development would be characterized by low levels of employee turnover, whereas a culture with tense relationships and lack of transparency and opportunities for development would be characterized by low levels of employee retention.

4. Conclusions

4.1. Summary of findings

The role of the organizational staff members has changed dramatically throughout the past recent years, as has the importance of human resource management within economic agents. Employers across the globe strive to hire and retain the best staff members in an effort to maximize their own chances of attaining their pre-established profitability objectives.