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Human Resource Management in Germany

Introduction

Dynamism in the business environment has seen many businesses enhance their capabilities in order to compete at the global level. One of the sectors on which entities are focusing on is the human resource. This paper will analyse the various practices and processes that characterize human resource management in Germany. The paper will also focus of repatriation; one of the practices that both medium and large enterprises undertake to brace its managers for greater responsibilities by familiarising with practices in other economic and cultural contexts.  

Culture and Socio-Political Background of Germany

Germany has a special history with capitalism because of the events that characterize its economic history, especially in the twentieth century. This country was characterised by authoritarian regimes and static controls that thwarted economic development at a time when other countries were undergoing rapid industrial development (Almond & Verba, 2015). Its model of capitalism is often compared to that of Japan where cross-ownership of resources was dominant in an effort to protect companies from pressure by the shareholders. In the past there was a variety of ways through which individuals accumulated various forms of capital for investment. Initially, most people could only inherit what their parents or older relatives had owned. From as early as the 12th century, the German economy was characterised by civic liberty. On the contrary, there existed a landed nobility that had to remain loyal to the respective authorities that conferred this status. Feudalism was associated with creation of social classes. During this time, there were distinct social classes. The town rulers and their families formed the upper class. The land owning nobles formed the middle class and had to remain loyal to the rulers. At the bottom of this hierarchy was the peasants who had to rely on landowners and show loyalty by providing labour which could then be paid through part of the harvest or pieces of land. This class structure was altered when European countries ventured into slave trade. This introduced slaves as the lowest class that provided labour for meagre earnings that could only sustain their living. When the industrial revolution set in, Germany had to ensure that it remained competitive as firms from other countries were quickly taking over local markets. This saw an evolution of production to large unions that sought corporate efficiency. The government structure evolved into representative democracy. The leaders had to ensure that they address the grievances of the voters such as reducing the level of employment in order to secure the votes of the people. This led to encouragement of fragmentation of industries in an effort to create more job opportunities. This development was severely derailed by the two world wars where Germany was at the forefront but ended up losing in both cases. The effects of these wars were grave on both the economic and social progress of the country. After the Second World War, the country’s industries were restored and by the late 1950s, the rate of unemployment had fluctuated to the extent that there were many immigrants forming part of the country’s labour force (OECD, 2012). To date, German’s labour force is characterised by diversity and efficiency.

The economic development of Germany was powered by the intention off the government and policymakers to empower the people through job and income creation. The legal and policy framework within Germany is that meant to balance between the interests of the investors and those of the population. The provisions are meant to protect the employees by spelling out their rights and the obligations of the employers in regard to these rights. At the same time, the responsibilities of the employee towards their employer and the restraints to this relationship are spelt out. These laws and policies respect agreements between these parties (Pudelko, 2006). This means that so long as the employer and the employee reach an agreement that is within the law, the legal provisions are merely used to enforce this agreement and it is the responsibility of both parties to ensure that they fulfil whatever is spelt in the employment contract. This includes the working hours, responsibility allocation and remuneration.

OECD (2012) notes that despite the recent efforts of the government to achieve a balance between the interests of the labour force and those of the employees, the political aspect of governance has made most of the policies tend towards the people. Since the labour force makes the majority of the electorate, most of the HR agenda still focuses on the employees while ignoring the interests of the employer This is due to the fact that regimes must be popular among the population in order to retain power. This has seen the enhancement of flexibility, mobility and general efficiency of the employees both in the public and private sectors. The biggest beneficiaries of this imbalance have been the civil servants. The government focuses on leadership development, work quality and flexibility of the civil servants. This means that many civil servants’ jobs are lucrative with favourable working conditions. Since the private sector is competing for the best human resource with government departments, the entities within this sector must step up to ensure that the working conditions for their employees are at the optimum (Pudelko, 2006). This creates an equilibrium in favour of the employees within the country.

The Business Environment in Germany

The fact that there is an influx of foreigners in Germany in search of employment opportunities means that the country has one of the best business environments in the world. Employees within the public sector fall under either public employees or civil servants. The rights and obligations of the civil servants are stipulated in the Act on Federal Servants (OECD, 2012). These individuals are employed on a lifetime tenure and dismissal from work can only be allowed in cases such as gross misconduct. They receive full pension but are not allowed to go on strike. On the other hand, the law governing employment in the private sector permits individual contracts between the employers and the employees to override some clauses of the general provisions. These workers have the right to unionise and plan for strikes. However, the procedure to be undertaken in planning and executing the strikes is usually spelt out within the employment law in order to protect both the employer and the employees’ interests and wellbeing. The decision on what form of remuneration and employment benefits a private employer will offer depends on the agreement between the employee and the employer (Pudelko & Harzing, 2007). This has given space for the labour force to venture into rigorous work with many individuals in different industries work as freelancers. The German labour force is mainly comprised of older individuals with the percentage of workers over the age of 50 totalling to 44.2% in 2012. This percentage is far above the OECD average that stands at 34%. The proportion of young employees to older ones is lower than the global average (OECD, 2012).

Germany has made great strides towards having an inclusive workforce where the minority groups are well represented in major sectors. Before the onset of the new millennium, a large percentage of the German population was employed in the public sector. As technology developed policymakers began realising that the proportion of people who could secure employment opportunities within this sector was steadily fluctuating because of mechanization (Pudelko, 2006). The government started implementing policies aimed at empowering the firms with the discretion of hiring and firing using contract terms between them and the employees rather than having a national legal system. This was meant to create a good environment for investors. The government, through its agencies, also started encouraging contracting out where businesses were given the freedom to carry out their functions by giving out contracts to other firms or individuals. The economy underwent vigorous restructuring and reorganization to ensure that there was a balance between the interests of the employers and those of the employees.

In order to survive both internal and external competition, many enterprises within Germany started making changes aimed at achieving efficiency, especially in the human resource. Currently, most companies do not have central human resource management units. These units are attached to various branches and are answerable to managers on the ground rather than the central management which can easily lose touch with the reality because of distance or the amount of work that they are often associated with (OECD, 2012). The devolvement of these units has helped corporates avoid unnecessary management costs and inconveniences that may result from a delay in decision making regarding human resource activities. Despite decentralisation of HR units, budget, personnel and pay delegations are often managed from a central location (Pudelko & Harzing, 2007). This is due to the fact that these functions fall under the finance docket of most industries and decentralising the function may lead to lack of accountability. However, input and output of the various human resource units is determined at the lowest levels.

Many industries in Germany carry out recruitment and dismissal procedures in collaboration with specialised firms whose mandate is offering consultancy services and insights on these issues (OECD, 2012). Factors such as opportunities and working conditions are usually determined at the central management but the implementation of these issues falls under the individual HR units. This is due to the fact that these units are closer to the ground and its leaders can easily stay in touch with the individuals who are directly affected by these issues. For government workers, the ministries and government departments are responsible for advertising the jobs, recruiting individuals suitable for these jobs and evaluating the working conditions and the progress of the hired individuals. However, Pudelko (2006) notes that there are insufficient accountability frameworks within Germany, especially for the parastatals and state corporations. This means that each entity must come up with its own practice to guide the assessment of the human resource and the management of the entities. Despite lack of this framework, accountability remains an important issue in the country with many company’s rules providing for the process of holding the various members accountable for their actions.

Practices That Could Be in Conflict Between Cultures

In most Asian communities, cultural practices are anchored on individual effort. Therefore, most of the people from Asian countries tend to be preserved and pursue most duties individually. On the contrary, individuals from the western cultures like speaking up and assertiveness. Often, Asian employees may complain that individuals from Europe, America and Australia are pushy and do not value other people’s opinions while those from the Western cultures are likely to complain that the Asians are not assertive and are not open and observe that this is likely to affect accountability (Pudelko & Harzing, 2007). This challenge can be overcome by ensuring that communication between employees is well defined. Policies and practices that define the purpose and forms of communication should be incorporated into the organizational culture to avoid such conflicts.

Different cultures have different definitions of the relationships between genders and age. These differences are prominent in the two largest religions around the world: Christianity and Islam. For individuals who come from cultures related to Christianity, there are closer ties between men and women and their interactions are not limited. On the other hand, individuals from Muslim cultures must limit the interactions between individuals of opposite gender. One-on-one interactions between men and women draws less attention from most secular societies. On the other hand, employees from religious backgrounds are likely to avoid interactions that are within their mandate in an effort to observe their norms. It therefore becomes the role of the management to avoid such conflicts through allocating that do not raise much concern to certain individuals. For instance, roles such as marketing that require wide interactions can be given to individuals whose culture allow them to meet a variety of people. Age can also be a barrier to interactions in many cultures. In some countries, older people are treated with utmost respect to the extent that they limit the ability of the younger people to approach the older ones in a work setting. This means that young individuals who hold managerial positions can fail to holder older employee accountable for some actions or approach them due to fear.

Repatriation and Achieving Successful Repatriation of an Expatriate Manager

Most firms create expatriate managers in order to enrich their management with knowledge about business practices across the world. Expatriate managers enhance the ability of the business to compete on the global scale and across different cultures (Chiang et al., 2015). This is important, especially in human resource management and marketing. Despite the fact that maintaining expatriates is more expensive than having a manager work in their locality, middle and large enterprises take these risks because of the expected returns. In order to enhance successful repatriation of expatriate managers, the company should plan for the whole procedure and notify the manager in advance in order to prepare them psychologically for the repatriation process. There must also be sufficient incentives to the individuals after the completion of this process to keep them on the job and avoid distractions (Yamasaki, 2016). This individual must be taken through thorough education sessions to help them adjust to the changes and apply whatever they have learnt in the new environment in the decision-making process.

Training and development of expatriate managers is importation in helping them prepare to work in the new countries and adapting to the changing work positions. In most cases, the managers are expatriated with their families to support them and help them feel normal and socialize in the new country at all levels. Pre-program assessment helps the managers and their dependents to assess their tendencies against the culture of the new country. This assessment and subsequent training helps them overcome challenges such as language, currency and exchange rates, mores such as dress, food and holiday observance that may be unfamiliar to them. Training also helps in creating professional expectations within the managers, for instance, how to interact formally with high-level staff (Chiang et al., 2015).

Conclusion

The socio-political background of Germany is that characterised by efforts by various regimes to please the masses. These efforts manifested through the formation of favourable labour and employment policies. To date, this is still the trend with many policies favouring the employees despite claims that the government is making effort to balance the interests of the employer with those of the employees The business environment in the country has pushed for the decentralisation of HR units in an effort to establish accountability and hasten the decision-making process. These practices have worked in improving the general human resource environment in the country. 

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