Over the past two decades the separate countries of the former European Community (EC) were unified into a common market for goods, service capital and even labor called the European Union (EU) Tariffs for goods moving across borders from one EU country to another generally disappeared and employees (with some exceptions) now find it easy to move freely between jobs in the EU countries. The introduction of a single currency – the Euro has further blurred many of these differences.
Companies doing business in Europe must adjust their human resource policies and practices to both European Union (EU) directives as well as to country specific employment laws. The directives are basically EU laws the objectives of which are binding on all member countries (although each member country can implement the directives as they so choose). For example, the EU directive on conformation of employment requires employers to provide employees with written terms and conditions of their employment but these terms vary from country to country. In England a detailed written statement is required, including things like rate of pay, date employment began, and hours of work. Germany doesn’t require a written contract, but it’s still customary to have on specifying most particulars should the job and conditions of work.
The interplay of directives and country laws means that human resources practices must vary from country to country.
Minimum EU wages: Most EU countries have minimum wage systems in place. Some set national limits. Others allow employers and unions to work out their own minimum wages.
Working hours: The EU sets the workweek at 48 hours, but most countries set it at 40 hours a week; and some like France, implemented a 35 hours workweek
Employee representation: Europe has many levels of employee representation. In France for instance employers with 50 or more employers must consult with their employees’ representatives on matters including working conditions, training, and profit sharing plans and layoffs. In Italy all employers with 15 or more employees must consult with their work councils on internal work rules and the working environment. By 2008 most companies – including all those with 50 or more employees in the EU – must inform and consult employers about employee related actions, even if firms don’t operate outside their own countries’ borders. And the consultation will then be ongoing rather than just or major, strategic decisions.
Termination of employment: There are a wide range of required notice periods when dismissing employees in Europe. They range form none in Spain to two months in Italy.
HR abroad: China
All terms in China must deal with national issues including relatively scarce employment services and an increasingly active union movement. However, how they deal with these issues depends to a large extent on the ownership of the firm. State owned enterprises use fewer modern human resources management tools than do giant Chinese multinationals like Lenova, for instance. There are therefore wide variations in HR management practices among companies in China and between Chinese and Western firms. For example
Because of governmental migration and other constraints it is surprisingly difficult to recruit, hire, and retain good employees. Sporadic labor shortages are fairly widespread.
In recruiting in China, employers should know that recruiting effectiveness depends to a great extent on non-recruitment human resource management issues. Employees are highly career oriented and gravitate toward employers than can provide the best career advancement training and opportunities. Firms like Siemens China, with impressive training and development programs have the least difficulty attracting good candidates. Poaching employees is a serious matter in China. The employer must verify that the applicant is free to sign a new employment agreement.
The dominant employee selection method involves analyzing the applicant’s resume and then interviewing him or her.
Employee appraisal is particularly sensitive to the cultural realities in China.
Although many managers endorse performance based pay in China, many employers to preserve group harmony make incentive pay a small part of the pay package. And as in other parts of Asia, team incentives are advisable.