Human Resources Management (HRM) Models in Different Cultures

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Ulrich Human Resources Management (HRM) Model

The most renowned HR model is the Ulrich HRM Model, which built the structure of the HR functions into four key roles, and each of these roles has a corresponding deliverable. Ulrich and Brockbank (2005) argued that HR must provide value to their organisation and these roles must be refined to reflect the contributions to the organisation.  Friedman (2007) identified the four roles as Strategic Partner, Change Agent, Administrative Expert and Employee Champion (Table 1). This model acknowledged the fact that HRM involves administrative activities; management of legal and employee relations’ issues and at the same time undertakes strategic business activities (Kramar & Steane, 2012).

4 HR Roles by Ulrich Role deliverables
Strategic Partner HRM Strategic alignment with management’s objectives

Single point of contact of internal stakeholders

Change Agent (Human Capital Developer) Participates in change management of teams

Develop and communicate clear visions of the future

Develop procedures that motivate and reward behaviour consistent with goals

Overcome employee resistance to change

Administrative Expert (Functional Expert) Delivers efficient processes (TM – identification, selection, training, compensation and benefits and performance management)
Employee Champion (Employee Advocate) Maximises employee engagement and commitment (motivation, discipline)

Table 1: Four HR Roles by Ulrich

Further investigating this model, the roles may be divided into function and focus. Exploring the implementation of Ulrich’s model to Talent Management (TM), Compensation and Benefits (CB) and Performance Management (PM), the HR manager can have both an operational function and a strategic focus. In TM for example, its duties such as recruitment, implementing policies on promotions are more of function of an Administrative Expert, however creation of strategies in line with management for recruitment such as policies to allow internal hiring before external is a function of the HR manager as a Strategic Partner. In CB, the HR manage as an Administrative Expert covers payroll processing, however the creation of incentives, benefits for employee satisfaction is a function as a Strategic Partner, furthermore, the implementation of changes in pay scale, strategies ads on its function as a Change Agent. Lastly in PM, the HR manager in a company has to act as the Employee Champion whereby they protect the employees’ interest and is the voice of the employees to identify the gaps within employees and management strategies. On the other hand they are also functioning as a Change Agent because they have to ensure that the performance management strategies to be used are carefully rolled out to the employees and are understood clearly.

Best Practice Model

Strategic HRM is mainly about integration and adaptation. Its concerns are to ensure that HRM is fully integrated with the strategies of the firm, the policies are coherent within the organisation and the practice is accepted and used by both the managers and employees in their everyday work (Schuler, 1992). This provided the basis for the classification of the Best Practice (BP) and Best Fit (BF) models for HRM. Armstrong & Taylor (2014) describes the BP model based on the assumption that there is a set of best HRM practices that are universal and ideal to be used in any situation and implementing them will lead to better organisational performance. Pfeffer (1998) further identified some best practices as employment security, selective hiring, self-managed teams, high compensation contingent on performance, training to provide a skilled and motivated workforce, reduction of status differences and sharing of information. Using this BP model into TM, CB and PM, the concept would be reviewing each area and finding the BP for the particular function of HR. In TM for example, Ahmad & Schroeder (2003) believed that selective hiring was best the best option for companies promising employment security as employees cannot be retained unless their attitudes, values and behaviour fit with that of the organisation. In other cases it could be where the organisation would have either use an internal or external resource in recruitment functions. Secondly, in CB, Pfeffer (1998) considered the best practice of high compensation contingent on performance however once again; this could be an ideal scenario for specific organisations or corporate cultures but may not be the case on different scenarios. Solmon & Podgursky (2000) argued that performance-based compensation programs encourage competition instead of collaboration, which would create more conflict and dissention. This would prove that in this particular case, it would not be the best practice.  Lastly in PM, Pfeffer (1998) preferred extensive training as the BP. Ahmad & Schroeder (2003) further explained this by having performance measuring methods to find out if the employee skills are being upgraded to maintain a work force consistent with management goals to improve productivity. However, although this could be a best practice in a manufacturing model, it could not be the same in a different industry.

Best-Fit Model

Best Fit (BF) on the other hand is perceived in terms of the integration and alignment of HR practices to the organisations business strategies. Armstrong & Taylor (2014) further expounded three models of BF as life cycle, competitive strategy and strategic configuration. Schuler & Jackson (1987) discussed that it is necessary to match the role characteristics of the employees in an organisation with its strategy. To implement this into TM, CB and PM, requires the corporate strategic visions to be in place in order to decide which policies should be used by the organisation. For example, the HR management function is more of a strategic resource and would act based on what is aligned to the goals and vision of the company. In TM, specifically in talent selection, choosing whether to employ based on a candidate’s attributes, skills or knowledge (best practice), compared to using a personality test, whether the applicant would fit with the company’s culture. This is the same in CB where the organisation’s reward system should be aligned to the strategic plans such as creating a performance based pay.  Lastly on PM, a best-fit strategy takes into account what specific performance measurement system would be ideal depending on whether the direction of the company is purely functional and administrative or to develop the employees further.

KF internationalisation strategy

There were two HRM strategies that KF implemented in their quest for internationalisation and it necessary to discuss both as it contributes to managing the current international workforce as well as to inculcate the company’s core strategic values. The first strategy implemented is standardisation and localisation. Chen & Wilson (2003) defined standardization as a management initiative by multinational enterprises to transfer their HRM policies to international practices with the confidence that these standardised operations will produce optimum performance for all branches. Furthermore, Ghotbi (2010) described standardisation and localisation as a “push-pull” influence, where the push influence is when the parent company or the headquarters pushes its policies and practices to the subsidiaries or branches, while the pull influence refers to the localised beliefs that avoid standardisation in the local level. Although KF has decentralised some of the HR tasks to be localised to its branches there is still a semblance of standardisation as the overall strategy is still with the Corporate HR and implemented by the local managers. The push and pull influence in this case is when they implemented the 180-degree performance management software, the Asian subsidiaries did not cooperate fully due to localised beliefs.

Aside from the standardisation and localisation approach, KF have also changed strategies initially from a Hard HR to a Soft HR strategy. Saha (2013) defined Hard HRM as part of the employment relations, which deals more of quantitative output of the employee, their contribution to the organisation and task completion based on timeline. Basically this is HR that focuses on processes with little empowerment or delegation that is ideal for an autocratic leadership style. On the other hand, the Soft HRM approach sees employees as a valuable asset with a significant contribution to the organisation (Roan, Bramble, & Lafferty, 2001). This approach shows a focus on long-term workforce planning, empowering employees by delegating responsibilities and features a flatter organisational structure. The directive of Corporate HR of KF to focus on cooperation and the well-being among the managers and global employees as well as to be considerate towards each other and develop their skills illustrates a more soft approach to HRM. This is a full turnaround to the HR manager’s initial effort to just attract the international employees as well as to integrate them into the company to produce the necessary output.

II. Q2

Aside from facilitating effective communication, which develops employee focus and improvement of job performance, performance appraisals are intended to enhance overall organisational performance (Schraeder, Becton, & Portis, 2007). With this in mind, KF implemented a 180-degree performance management system, which Sujith (2017) describes as one of the simplest ways to appraise employees. The process starts where employees are asked to critically evaluate their performance after which these are discussed and shared on a review meeting with their respective managers (Sujith, 2017). This is a performance management strategy based on an Attribute approach whereby the employees’ contextual performance are evaluated based on attributes that go beyond task based competency and cultivates behaviours that develop the effectiveness of the organisation (Fletcher, 2001). The issue with an attribute approach is there are vague performance standards and since this is beyond task based competencies; there is a strong possibility that the ratings would have a large variation thereby having a low reliability. Furthermore this method does not provide a specific direction on how an employee can contribute to the organisation’s vision.

The second performance management approach that KF implemented was the annual job satisfaction survey and a Support Measurement System (SMS) where the performance of the teams are measured based on their work relationships with the other departments. This is a strategy based on a Comparative approach as it involves the ranking of the employees or teams’ performance with respect to that of other teams in the organisation (Noe, 2008). It is a Comparative approach based on a paired comparison method, where each employee is paired with another and the number of times an employee is considered better gets the score (Bansal, Verma, Jain, & Jain, 2018). The disadvantage of this approach is such that it becomes harder to manage especially when the number of employees increases. This SMS was implemented as a two-fold strategy to firstly gauge the experience of other departments with respect to cooperation and coordination with other units and secondly, to compare the performances of each team and find out how to improve individual and team performances.

On the other hand some Human Resource (HR) practitioners have noted that there exists a number of companies that both managers and employees alike are dissatisfied with the performance appraisal process (Pichler, 2009) which could be one of the reasons why there was a lack of interest in the implementation of KF’s 180 degree performance management software. The idea of having to give a positive or negative criticism of themselves, co-workers and managers was a step in the process that the employees of KF did not want to accomplish. Neely (2004) discussed the main challenges in design and measurement of performance measurement systems as choosing the right measure, political and cultural issues, measurement focus and refreshing the measurement system. After looking at these challenges in can be noted that KF had lapses in the implementation of these HR performance measurements. The recommendations will be based on these challenges.

Recommendation 1: Direct Management team communication

Although KF has made improvements in their performance measurement metrics they have failed to properly introduce the new process. Best practice dictates that the CEO or at the very least the management team should conduct staff meetings to explain why the new process is being inaugurated and how anonymity will be protected (Dalton, 2005). It is also necessary that the goals of the performance appraisal be clearly identified whether it is administrative (to fire, retain, promote) or developmental (improve employee performance) (Kondrasuk, 2011). Since the HR tasks in KF is decentralised and only the local managers are implanting directives in coordination with the IHRM-manager there is a possible gap in communication of the corporate objectives to the local entities. By having the CEO and the management team directly communicate the goals, explain the process as well as identify the purpose of the performance management strategies to their employees, it will align with an effective strategic congruence where the system stimulates job performance that is consistent with the organisation’s strategy, goals and culture.

Recommendation 2: Review and strengthen localisation strategy

It is also necessary to review the current measure if they are a fit to the organisation as a whole considering the political and cultural issues that exist within the organisation. Particularly stated was the prevalence of the avoidance of the employees in the Asian subsidiaries to provide a critique of themselves, their co-workers and managers. Turgut & Mert (2014) identified one of the performance appraisal errors as the positive or negative leniency error because of the tendency to give higher ratings since some evaluators value good working relationship and are concerned of damaging this relationship by giving a lower rating. A global corporation like KF, there is a need to implement a more localised and cultural approach to the performance appraisals as there is a big difference in the way an individualist and collectivist cultures view themselves. Studies show that in Western (Individualist) cultures, have a tendency to rate themselves favourably compared to their Asian (collectivist) counterparts (Appelbaum, Roy, & Gilliland, 2011). The suggestion is that the manager should not only just be based on the locality, but also someone who understands and familiar with the culture to be able to use the appropriate approach. This is a strategy of specificity where the current system should be adjusted culturally by providing a detailed guidance to the employees about what is expected and how they can meet the expectations.

Recommendation 3: Focus measurement strategies

Lastly, a third criterion for an effective performance strategy is Reliability. Addressing performance measurement focus and refreshing the measurement system could provide the KF a much-needed reliable performance management strategy.  Specifically, the measurement focus should directly be targeted to the goals the organisation wants to achieve. The problem with some managers is that when presented with the raw data, there is a tendency to draw subjective conclusions (Neely, 2004). It is important that the focus is on development to get a more competent and efficient workforce. The greatest challenge is to consistently implement this strategy in order to prove the reliability of the performance management. Furthermore, in order to ensure that these performance measurements are refreshed and updated to the goals of the organisation, there should be a performance manager whose primary role is to manage the measurement system.

III. Q3

NZ Cultural Aspect

Starting with New Zealand (NZ), the first cultural dimension to be considered is its individualist culture (Hofstede Insights, 2018).  The culture of individualism pertains to societies in which the ties between individuals are loose and everyone is expected to look only after oneself and the immediate family as opposed to collectivism where people are integrated into extended groups to look after them for absolute loyalty (Murphy, 1999). Although KF’s initiative on performance-based pay could work in an individualist culture such as NZ as employees are self-reliant and display initiative (Hofstede Insights, 2018) it also creates a preference for autonomy and an individual-based reward mechanism, which generates a calculative relationship to the organisation (Murphy, 1999). KF has to realise that since there is a strong focus on the “I” rather that the “team”, each employee would welcome and accept the performance based pay as an individual, however the downside would be whenever the organisation needs a collaborative effort by the team or there is a need to work together, the individualist culture that NZ possess makes this a difficult challenge to face.

A second dimension to be discussed is NZ’s Long-term orientation. Hofstede Insights (2018) discusses that societies that score low on this dimension are called normative societies and are those who like to follow traditions (standard operating procedures, occupational standards) and people will comply with these norms that are already long established. Since NZ is a normative society, there is a need to consider how to implement the changes, as continually changing systems and procedures does not sit well because they tend to stick with long established traditions (Hofstede Insights, 2018). Therefore a proper implementation of a change management model is necessary in KF’s case.

NZ Institutional Aspect

The NZ government implemented a Skills evaluation tool and the Equitable Job Evaluation system in order to recognise that knowledge and skills can be acquired in a range of formal and informal ways and does not tie up to specific qualifications or years of experience as well as recognises the performance of services that needs on-going assessment and adjustment (Ministry of Business Innovation and Employment, 2009). This initiative by the government helps the organisations to classify skills, abilities as well as responsibility levels that enable them to implement a strategy of pay for performance, to complement with the tools in order to achieve their goal of having a more competent and efficient workforce. Since this tool allows for a diagnostic approach to performance assessment, it will help KF in its implementation of a performance-based pay to be able to analyse and process data for employee development as well as assist the company in creating proper performance appraisal systems.

Japan Cultural Aspect

The cultural dimension that KF needs to consider before implementing a new system in the major markets in Japan is uncertainty avoidance. Japan’s score (Hofstede Insights, 2018) is one of the highest-ranking uncertainty avoiding countries in the world. The Japanese does not like uncertainty or surprises, which means everything must be carefully planned and laid out before implementing changes or strategies. The corporate culture in Japan requires a lot of effort on feasibility and detailed facts and figures before rolling out a project which means the implementation of a performance based pay has to be carefully considered and reviewed in order for it to be accepted.

After considering Japan’s uncertainty avoidance, it is best to realise that its masculinity could be a good factor in implementing a performance based pay. The Japanese have a strong drive for excellence and competition as well as famous for being workaholics (Hofstede Insights, 2018). Ohlsson & Odelj (2007) enumerated a number of things that are typical to a high masculine organisation, such as the Japanese culture, and a couple of these are necessary for KF to take into account. Firstly, people live to work which means it is a significant role in one’s life and second is that they are money and things oriented, this justifies the expectations to excel in their careers otherwise they would see themselves as failures. With this cultural factor KF will be able to implement a performance based pay strategy that could be welcomed by the Japanese masculine culture.

Japan Institutional Aspect

Japanese employees work in rigid hierarchies and advancement is earned through hard work.

A significant institutional issue now officially recognised by the Japanese government is karoshi, or death by overwork, linking this to the Japanese masculine culture of being workaholics (Wahl & Hartley, 2008). The Japanese government instituted policies to shorten the work week as well as continually encouraging the private companies to start providing incentives to employees to have a work-life balance. However, since the implementation of these policies there has not been a positive response. KF has to consider this policy in the long term as although the performance based pay is a strong fit to the Japanese culture here and now, these policies could later on be a hindrance to employees strive for success.

France Cultural Aspect

Similar to Japan, France also rated relatively high for uncertainty avoidance. It’s score of 86 (Hofstede Insights, 2018), also shows the strong need for laws, rules and regulations in order to have the proper structure in life. Additionally, they are also planners in the sense that they would like to always be prepared before attending meetings and negotiations on the business environment. This need for advance and thorough planning would require a local in-depth review of the performance based pay system before its execution in this country.

KF also needs to consider France’s high score in power distance. Hofstede (2011) described societies with high power distance as having an uneven income distribution as well as older people are both respected and feared with a high sense of hierarchy. The implementation of a performance based pay in France could also have a negative effect on the team based in this country as it will not be always the case that the most senior person in the organisation is necessarily the best performer.

France Institutional Aspect

France on the other hand even with its high score in power distance, a performance based pay would be beneficial since the government instituted a 35-hour working week with a five week of holiday per year which focuses more on the quality of life (Hofstede Insights, 2018). KF’s plan of a performance-based pay, I believe, is a good strategy economically for the organisation as even if there were lesser time to work on a task, the output would be more important in long run and performing employees will adequately be rewarded.

IV. Q4

France’s Change Management: ADKAR

The combination of France’s strong power distance, their high uncertainty avoidance and individualist society (Figure 1) (Hofstede Insights, 2018) makes it necessary for them to have a fully structured and planned approach in change management. The best model to be applied for France is Prosci’s ADKAR model (Prosci Inc. , 2018), an acronym for Awareness, Desire, Knowledge, Action and Reinforcement (Hiatt, 2006). The reason behind this recommendation is because the ADKAR moves beyond the state of change as a context (current, transition, future) and clearly defines how one moves through the process. The idea is to change from the current state; one needs Awareness and Desire to support the change.  Moving through the transition successfully; one has to have the Knowledge and Ability to implement. In the future state; one has to reinforce to sustain all the changes made. Breaking down this process removes the uncertainty factor that is largely innate in France’s culture.

Figure 1 : France’s Cultural Values (Hofstede Insights, 2018)

The lifecycle for ADKAR change management model (Figure 2) starts when a need for change has been identified in which KF have introduced a 180-degree performance management software in order to integrate into a performance based pay. KF should have first created awareness by providing the employees the information on why the change is being made and the risks involved if not implemented.

The first three stages of the ADKAR change management model (Figure 2) deals with facilitating or preparing for the change. Awareness is to provide employees the information on why the change is necessary and the risks involved if not implemented. Desire represents the willingness to support the change. Knowledge is the actual information, training and tools to implement the change. Especially for the French these first three stages is key to a successful change management. They like structure, organisation and planning. With these stages, they will be equipped with the knowledge to enable them to accept what would happen. The good thing about the ADKAR model is that it is able to identify and assess the barrier point of each individual impacted by the change (Prosci Inc. , 2018), which enables the organisation to develop the necessary corrective action.  The possible barrier point in France would be in Desire. French subordinates normally pay respect and show submissiveness to their bosses however might do the opposite of what they promised to do, in the same way as the more senior employees would expect to be paid more because of the hierarchal structure of their corporate culture (Hofstede Insights, 2018). KF needs to make the necessary corrective action, as these factors will affect the French’s Desire to support the changes.

Furthermore, the next two stages are more of the engagement zone. Ability would be how the employees are able to engage and implement the changes while Reinforcement is to assure the changes will be sustainable. Since France is a high individualist society they are self-motivated in what they do (Hofstede Insights, 2018). With proper preparation on the initial stages, it will be easier for France to implement and sustain the change to be implemented by KF.

Figure 2: Prosci ADKAR model (Prosci Inc. , 2018)

Japan’s Change Management : Kotter’s eight step model

KF has to deliberate that implementing changes in the Japan branch would require a different change management model. Japan is one of the highest Uncertainty Avoidance countries in the world (Figure 3) (Hofstede Insights, 2018), which means like France there is a need for a detailed and long-term implementation. KF is recommended to use Kotter’s model of change management as the strategy focuses on a long-term, step-by-step process that is compatible with the Japanese cultural dimensions.

Figure 3: Japan’s cultural dimensions (Hofstede Insights, 2018)

Doutre (2012) believed that if Kotter’s change management model were followed in the prescribed order, it would yield the needed results. The first two steps, establishing a sense of urgency and forming a guiding coalition can be summarised as recognising the need for change (Figure 4). Japan’s high score in the long-term orientation (LTO) in Hofstede’s cultural dimension (Hofstede Insights, 2018) would fit this model of creating urgency as they tend to practice doing the best in one’s lifetime and serve to the durability of the companies they work for. Furthermore, Kotter’s model is change management based on a top-down approach whereby the implementation starts from the top of the organisation, which is ideal for a culture like Japan. However, this is also the greatest possibility where KF will encounter first conflict to the proposed change on performance-based pay. One of Japan’s traditional pillars of management is the concept of seniority where promotion and wages are determined based on the number of years in the company (Firkola, 2006). It will be difficult to form a powerful coalition, which is Kotter’s second step, mainly because these senior personnel will be the ones greatly affected by the change in wages, therefore their buy in to the strategy must be solidified first in order for a successful implementation.

The next two steps, creating and communicating the vision, summarised as change direction (Figure 4), necessitates to properly communicating KF’s visions and goals to be able to accurately direct the people to where the culture should lead.

Additionally, Kotter’s model requires KF to prepare the change behaviour by removing the blocks and resistance to the change as well as having short term goals with reward mechanisms in order to motivate the employees to continually support the initiative (Doutre, 2012). Other possible resistance factors for Japan could be another traditional management pillar of Enterprise unions where its main role was also known as Shunto – to negotiate the wage increases of the employees (Firkola, 2006). KF should provide incentives for those who are involved in the change process, especially the union leaders, which suit well with the Japanese culture of Masculinity (Hofstede Insights, 2018).

The final two steps of Kotter’s change management model are to assure that the change being implemented becomes the corporate culture.  Doutre (2012) suggested in order to do this is to build and analyse on what else still needs improving and anchor these changes to the organisation in order for it to become the company’s core values. The long eight-step process would be an ideal change management model for a country like Japan.

Figure 4: Adopted from Kotter’s Change management model

NZ Change management model: McKinsey’s 7s model

Although it would be ideal and easier for KF to implement a single change management model, the differences in cultural dimensions require different strategies per country. The recommended change management model to be used in NZ is the McKinsey Seven S model. The rationale behind this is that successful strategic implementation involves: clarifying the strategy, communicating to all levels of the organisation and rolling it out to the people (Maru, 2015)

The goal of this model is to show how the seven elements of the company: Structure, Strategy, Skills, Staff, Style, Systems and Shared values, can be connected in order to attain efficiency and productivity in an organisation (Ravanfar, 2015). It can be further divided into the “Hard S” – Strategy, Structure, Systems and the “Soft S” – Style, Staff, Skills, and Shared Values (Tom Peters Company, 2018). Considering that KF has NZ for its main hub and headquarters, the ideal change management model has to also start with its goals (Shared values) in the centre (Figure 5) and interconnected with all the other elements, which makes this model an ideal model for NZ. Maru (2015) believed that the McKinsey model is a holistic approach to strategies by an organisation that collectively determines how the company will operate. KF’s NZ operations is the hub of the all the branches including France and Japan and having this holistic approach set up in NZ would be able to implement the necessary change management models in the other countries. Since all the factors are interdependent, missing on any single factor could lead to the failure of the strategy.

Figure 5: Mckinsey 7s Model (Mind Tools Ltd. , 2018)

Beginning with the Hard S elements, these are easily identifiable in the organisation as they are tangible objects such as; mission and vision statements, corporate plans, organisational charts and systems and procedures. The Soft S elements on the other hand are more difficult and complex to determine. This could be where KF’s strategic implementation in NZ would face some challenges. It would be Style, which refers to the leadership style of the managers as well as the dominant values, beliefs and norms of the organisation, where KF will have a possible issue on implementation. NZ’s low score in power distance is a total opposite of both France and Japan’s hierarchal management style and cultural values (Hofstede Insights, 2018). With this difference, it could also affect the overall Shared Values.  Maru (2015) concluded that the share values keep all the employees working toward a common goal and those with weak shared values often find their employees following their own personal goals that are different or sometimes in conflict with the organisational values. KF has to realise all the cultural differences in order to roll out a successful change management strategy.

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