Globalization and Human Resource Management Balaji.j Lecturer Dept of MBA GTEC ,Vellore 900373909 [email protected].

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Globalization represents the structural making of the world characterized by the free flow of tech- nology and human resources across national boundaries as well as the spread of Information Tech- nology and mass media presenting an ever-changing and competitive business environment. The article deals with the practical consequences of globalization for human resource manag ement (HRM ).Globalization makes national culture an increasingly strategic issue that has to be faced and properly managed. The problem is the balancing of the global trends in human resource management with the influence of national culture because many aspects of HRM are affected by differences in national culture. The article analyses the major challenges arising from globalization and affecting human resource management practices in the 21st century in selected industrialized countries (United Kingdom, France, USA, Japan) and Lihtuania as a new member of the E U . The general aim of the article is to analyse the problem of balancing seemingly opposing forces (globalization and the influence of national culture) and to identify trends in HRM across five coun- tries: United Kingdom, France, USA, Japan and Lithuania. Keywords: globalization, human resource management, cultural differences, trends.

Introduction
the object of the study is consequences of globalization for managing human resources across selected cultures. In todays global economy, the extent to which HRM activities are successful across cultures will largely depend on the managers abilities to understand and balance other cultures values and practice as regards such things as the importance of work, how power and status are conferred, the perceived

value and other fundamental differences in how people from different cultures view the world. the goal of the article is to investigate global and national (on the basis of several industrialized economies and Lithuania) trends in HrM. the research questions were: 9 What are the opposing dualities that the managers have to harmonize in international organisations?

9 Does the increasing global competition make HrM less differentiated (on the example of selected countries)? 9 What are the HrM trends in lithuanian companies? the following research methods have been used: system, logic and comparative analysis of scientific conceptions. Also, empirical studies carried out in different countries are presented. the primary data from lithuanian companies were collected. Other data were derived from printed papers, books and statistics.

1. Globalisation and its consequences for organisations

Globalisation requires attention to more than conducting business across national borders but also entails expanding competition for almost every type of organisation presenting management with the challenge to operate in diverse cultural settings (Edwards, 2006). OKeeffe contends that the advent of the global eco-

nomy has brought a realisation that the only lasting competitive advantage is an organisations ability to effectively exploit human resources. HrM has become a significant factor in the management for organizational success. The multinational companies (MNCs) and other international organizations face the challenge: what kind of a new form of glue helps to manage Hr worldwide? the idea emerging from organizational behaviour literature in recent years will help to find the answer. It comes from the work of Paul Evans and Yves Doz from InSEAD business school in France. Evans and Doz have described the managerial challenge in complex international organizations in terms of balancing the opposing dualities (Evans and Doz, 1999). they believe that the pace of change and the new complexity of globally operating companies create the need for harmonizing seemingly opposing forces, such as (Figure 1):

Figure 1. Opposing forces managers need to balance in international organizations. Source: created by the author with reference to Evans P. and Doz Y

they urge that such forces should be that need to be balanced. the analogy of considered not as binary, either/or deci- the human personality is a useful one. Just sions, but rather as complementary forces as any aspect of the personality taken to

an extreme is unhealthy and dysfunctional, the same is true for organizations. Thus, instead of trying to maximize anything (decentralization, teamwork, formality, and so on), an organisation should seek to ensure that it maintains a minimal threshold of desirable attributes. The whole challenge of managing across cultures is about balancing the seemingly opposing values and practices in such a ways as to create advantages from them. The research of Evans and Doz is particularly relevant to all areas of strategic HR across cultures. In addition to recognizing that dualities exist and must be balanced, it is clear that HRM requirements become less a matter of having the right people at the right place at the right time, but more a matter of integrating selection, reward and appraisal practices within organizational values which will allow a balanced outcome under a range of cultural conditions.

2. HRM in selected countries: trends and values

The previous chapter was an attempt to review the globalisation and its consequences for organisations. The analysis in this chapter is supported by examining the practice of HRM in Europe, Japan and the USA. Talking about European HRM, we mean a continent of diversity. Therefore, a focus lies on the UK and France, reflecting the relative volume of national publications of HRM practitioners from these countries and the dominant size of their economies in the EU. The danger of overviewing HRM within different cultures and nations is that it may

hide the variety that exists and thus oversimplify what can be a complex picture. Nevertheless, this review has sought to bring out the main trends and the principal tasks faced by HRM professionals. United Kingdom. The general context within which HRM changes have taken place in the UK is a reflection, primarily, of changing regulatory frameworks, globalization and strong pressures to drive costs downwards. The key role of labour, and thus HRM, in modern organizations is emphasized by Sparrow (1999). He concludes that getting the people issues right is critical. This perspective is reflected in the increased professionalism of the HRM function in the UK. Regulation. HRM practices in the UK are influenced by increasing levels of regulation arising both from the UK government and from membership in the EU. The UK governments tighter legislative controls on labour unions are the major contributory factor in the dramatic fall in strike activity in 1999/2001. Working days lost annually per 1000 workers plummeted from 330 between 1980 and 1983 to only 11 days in this period. But in 2006 the number of working days lost through strikes soared to the highest level since 2004 as the government faced increasing strife from public sector unions over job cuts, pay and pensions. Total days lost rose from 157,400 in 2005 to 754,500 in 2006, according to figures published by the Of- fice for National Statistics (Tayeb, 2008). More than 80 per cent of the days lost through strikes last year involved public sector workers.

The establishment of more employee supportive legislation is found in the introduction of the minimum wage. Nevertheless, much of current UK employment legislation remains restrictive and controlling labour. Policies emanating from the EU have worked in the opposite direction and seek to emphasize employee welfare, involvement and commitment. Incentive compensation. In addition to well established incentives for equal pay between men and women, there are strong pressures to move away from standard pay scales towards systems which reflect individual performance and behaviour and the specific demands and characteristics of particular (regional) labour markets. Despite the 1970 Equal Pay Act and the subsequent 1983 amendment incorporating the concept of equal value, a gender gap still exists in the UK. For example, in 2005 difference between mens and womens average gross hourly earnings was 20 per- cent (for comparison 26 percent in 1995) (Eurostat, 2008). Such contrasts are typi- cal of all sectors. The monitoring of equal opportunities on the basis of sex, race and disability remains a high priority for HRM professionals. The continued move towards increased use of performance-related pay presents a particular challenge to the HRM professional, since the systems, while motivating those receiving the payments, can have a considerable negative effect on the commitment and motivation of those who do not receive them. No matter how the system appears to be, it is unlikely that an organisation has sufficient resources to reward all those meeting their targets, and

in the longer term such schemes may be problematical as there will be strong upward pressures in salary costs. Globalization. Owing to globalization, the UK economy has been driven by a push for greater productivity with the resultant outcome of downsizing or total closure of plants. Maintaining commitment when an employees friends and relatives have been downsized can prove a major difficulty. One way that HRM practitioners have responded is by developing outplacement programmes. Such programmes provide details of other job opportunities within the firm, develop skills in job search outside the firm. A second major challenge arising from globalization has been foreign investment in the UK. In manufacturing, almost onefifth of UK workers are employed in foreign companies. Foreign investment both in manufacturing and other sectors has brought with it new HRM practices which can spill into domestic forms. For example, employment in Japanese manufacturing firms has risen from fewer than 5000 in 1980 to over 60 000 in 2000 (Institute for Employment Studies, 2004). Japanese plants have brought new HRM strategies fo- cused around team working and total quality management. Labour shortages. Like many advanced economies, the UK has an ageing population. By the year 2040, one in four will be a pensioner and barely half the population will be under 45 (Institute for Employment Studies, 2004). It may become a necessity to make fuller use of the older employee. Hiring older employees is a strategy already adopted by some UK companies. The

employment rate of older (over 65 years old) workers increased from 47.5 percent in 1995 to 57.4 percent in 2005 (Eurostat, 2008). UK employees work longer hours per week than employees in other EU countries. The average working week is 44 hours with only 28 days holiday per year. Breaking this long hours culture may become a major task for the HRM professional. From October 2000, changes in the UK work permit system have made it easier for immigrants to fill gaps in the labour mar- ket. Act 2004 sets out a progressive policy of welcoming immigrants where that helps UK economy. Net migration rose from 47867.000 persons in 1998 to 227158.000 in 2004 (Eurostat, 2008). Flexible working. A particular interest in the UK has been the debate about the ex- tent of new forms of working, which inclu- de outsourcing, flexible working patterns and the emergence of new forms of work. Outsourcin g. The move towards the flexible firm has seen a trend towards the outsourcing of activities outside the core (Gooderman, 1999). This may take the form of outsourcing to new suppliers or changing employment contracts to hire individuals as consultants rather than employees. Increasingly, too, UK firms are externalizing actual HRM activities. For example, a period of downsizing often sees the hiring of outplacement specialists. More recently, further externalization of HRM activities has been made possible through the development of information technology. Flexible working pattern s. An indicator of the importance of numerical

control of labour costs is seen in patterns of short-term contacts, temporary working and part-time working. The proportion of workplaces characterized by the first two forms of flexible working increased from 19 percent to 36 percent between 1980 and 2000. Similar increases have been recorded in the numbers of part-time workers. By 2000, the UK had over 6.7 million part- time workers (Institute for Employment Studies, 2004). New fo rms o f wo rk. The most striking new types of workplaces are called centres. These tend to be located where labour costs are low. Because of their newness, they have employed female with little experience of office work. Teleworking is another emerging trend. In the UK, the number of teleworkers is now estimated to more than 1.6 million. HRM practitioners need to develop skills appropriate to the recruitment, selection, and motivation of the workforce of a virtual office. In conclusion, todays HRM professional in the UK needs the ability to operate within an increasing degree of labour regulation and to simultaneously respond to a wide range of changing individual and organizational needs in new and creative ways. France. The current French HRM practices are the result of several constraints such as strong and specific regulations, a demography unique in Europe, the acceleration of internationalization of large organizations, and sociological upheaval. These practices are converging with those of other countries under pressure from similar factors. French HR managers are striving to adapt French organizations to their en-

vironment by relying on unique practices or practices similar to those implemented in other countries. The demographic and political environment is particularly characterized by the importance of the baby boomers and the second by the relationship between the State and the social partners. The French birth-rate remains consistently higher than in the main bordering countries (Germany, the UK, Italy, Spain). France displays an age structure characterized by its relative youth. Indeed, in 2006, 19.4 percent of the population was under the age of 20 compared with a 17.8 percent European average. Another characteristic is the low number of those between 54 and 65. The potential to infuse young blood into an organization is high. Moreover, net migration was considerably lower in comparison with the UK: minus 1407,000 persons in 1998 and 90879,000 persons in 2004 (Eurostat, 2008). The influence of the state in French industrial relations is still considerable. For instance, in July and October 2000, the government did not give its backing to the new convention on unemployment benefits signed by the employers organization and the trade unions. The law on the 35-hour workweek also reveals the invasion of the social field by the government. Labour laws are extremely comprehensive and de- tailed in France, this having an effect on HR functioning. Employers organizations and the majority of labour unions deplored the governments methods. As a result, a trust crisis arose and the French system of tripartite industrial relations (state, federations of employers, and labour unions) was challenged. This forced change resulted in

an increase in the number of days on strike in 2004 (460,000) in comparison with the lowest record in 1999 (353,000). The num- ber of strikes increased from 1607 in 1997 to 2131 in 2004 (ILO statistics, 2008) However, the HR function, which took over the task of innovation in the reforms of working hours, and negotiation and implementation of the new measures, gained more influence. The HR function took over measurement and financial tools in order to optimize choices and control the costs re- lated to the 35-hour workweek. Four HRM practices are particularly idiosyncratic to the French context and deserve particular consideration, namely career management, recruitment, training, and compensation. Career management. In France, following the general trend, the employee is more and more responsible for her/his own career. However, the HR function shares a core responsibility with line managers and top management for supporting employee development in an endeavour to keep their loyalty. HR managers have to deal with a new psychological contract where organizations no longer offer longterm employment and employees accept the responsibility for developing their own employability, both internal and external, but require the help of the organization to achieve their career goals. Career management is often based on the division of employees, especially between those who have and those who do not have the status of` cadre. Human resource managers pay great attention to the careers of the first category, among them the high potential employees, since qualitative flexibility is expected from them because they make

up the central core of the organization as defined by the model of the flexible firm. Recruitment. The use of the Internet as a recruitment tool is on the rise in France, particularly for large companies. Generalist and institutional Web sites stream the recruitment market out. The most common screening process remains the traditional employment interview. On average, the recruitment process requires three interviews, and the final hiring decision is made by the manager who will be responsible for the new employees performance. A rather controversial issue in France is the use of graphology. As a rule, want-ads require a handwritten cover letter along with a printed CV. HR managers have to face the low predictive validity of graphology. Between 75 percent and 80 percent of employers in France resort to the study of handwriting to help screen and place job applicants. With the increased use of the Internet to recruit, the use of graphology may diminish as a screening tool unless organizations specifically ask for handw- riting samples. Training. French labour laws strongly impact the training practices in France. French organizations with ten or more people on the payroll face a mandatory finan- cial contribution of 1.5 percent of the wage bill for training or face financial penalties. With fewer employees, the contribution is 0.15 percent of the wage bill. On average, organizations spend more than the legal minimum required, with a training contribution of around 3 percent of the wage bill. The access rate to training, i.e. the percentage of employees who participate in training programs during one year, is on

average 38 percent and is over 60 percent for large organizations. This rate also varies with the level of qualification, from 10 percent for unskilled workers to 60 percent for technicians and executive. The trend in training is for organizations to tailor their programs to their direct needs. With the reduction of working hours, employers are striving to deliver training outside working hours (Goetschy, 2000). Compensation. The French are champions of the individualization of compensation. Recognition of competencies constitutes an essential determinant of individualization. Nevertheless, an increasing individualization may give rise to a diminishing interest in the aims of the organization as a whole. Variable compensation concerns both collective and individual performance. At the collective level, gain sharing is on the rise. At the individual level, the widespread use of bonuses and exceptional premiums enables organizations to reward individual performance, yet keep a security margin in case the economy deteriorates. Nevertheless, as the variable part of compensation increases, this raises security and equity issues for the employee. The emphasis on individualization turns equity into a key issue. Trying to achieve equity furthers the expansion of flexible compensation through cafeteria plans which increase employee satisfaction regarding the benefits offered by the organization. However, in France this willingness to increase compensation flexibility collides with the importance of mandatory benefits. HR professionals encounter difficulty in linking the design and implementation

of compensation with organizational strategy. To sum it up, HRM is more than ever dedicated to the necessity of productivity within both the HR function and the organization as a whole. In order to make an impact, add value, and create a competitive advantage for the organization, HR professionals and line managers can no longer overlook the differing values of the employees. USA. Labour shortages. US economic prosperity during the 1990s has led to labour shortages, which are pushing organiza- tions to engage in creative recruitment and retention practices and to employ workers from non-traditional sources, leading to a more diverse workforce. HR professionals are realizing that they need to update their technological skills and develop systems for managing more virtual organizations. Human resource is also trying to become more of a strategic partner in firms. HR has the potential to create competitive advan- tage for firms by successfully combining a reputation as being an employer of choice with a high performance work system and an effective set of incentives. HR mana- gers are responding to labour shortages by stepping up recruitment efforts. In the 2000 Society of Human Resource Management Survey on HR Priorities, 64 percent of respondents indicated that recruitment would be a top issue and 46 percent said that training would be a top priority due to labour shortages (Konrad, 2001). Labour shortages have turned companies attention to retention practices, including fostering a sense of community, identifying and investing in the organizations

best people, making it easy to move within the organization, hiring very selectively, providing decision-making authority to all employees. The reason why US labour shortages have remained manageable is an expanding labour supply, as firms tap previously overlooked groups such as people with disabilities, former welfare recipients, older workers, ex-convicts, and foreign students. The employment of a more diverse workforce requires organizations to change practices, attitudes to enhance performance, and many organizations have developed a diversity of initiatives in response to these pressures. Globalization. Multinational companies are becoming increasingly important players in the global economy, and their HR practices are increasingly influenced by diverse cultures. A certain degree of fit between HR practices and local culture enhances performance, because congruent HR practices are consistent with existing behavioural expectations and routines that transcend the workplace. Management practices that are congruent with the national culture have been associated with enhanced firm financial performance. US firms seem to have learned this lesson. For expatriates, success is linked to several factors, including the quality of the people willing to take the assignment and company policies that ease relocation and adjustment for the expatriate and his/her family. Variable compensation Companies in the USA are moving toward pay systems that are flexible and strategically aligned with complex and changing business environments. Examples include the increasing

use of competence-based pay, in which pay is geared more to individual skills and abilities that contribute to company success than the job individuals perform. Perhaps the most significant trend, however, is the increasing use of variable pay plans. Variable pay (often referred to as incentive pay) plans conventionally refer to payments that are based on an objective or quantitative assessment of individual, group, or company performance, that do not add to base salary. Examples include bonuses, gain sharing plans, profit sharing, and stock based plans. According to a report by Hewitt Associates (2004), 80 percent of surveyed organizations currently have at least one type of variable pay plan in place, up from 87 percent in 2003 and 47 percent in 1990. Perhaps the most interesting variable pay trend is the increased use of stock option plans for lower level employees. Stock options have long been a significant component of top executive compensation in the USA. Stock options are a way to link employee pay to firm performance. This can increase employee morale and performance. Strategic HRM. HR is increasingly seeking a strategic role in business to help firms create value and gain competitive advantage in the marketplace. Effective HR practices that competitors cannot duplicate easily or quickly provide a competitive advantage to firms. HR can create value by developing systems to make an employer of choice to attract and retain a top quality talent. Becoming an employer of choice is costly, however, and these costs are only justifiable if the firms workforce demonstrates high productivity. In

addition, HR can become a strategic partner by providing tactical support for implementing a business strategy. HR is needed to determine the types of knowledge and skills needed in the workforce to carry out the firms strategy, identify hiring and training needs, and align the performance management system with strategic goals. Future directions. In late 2000 the US economy is slowing. Though workers may become easier to find in general as the economy slows, recruitment is likely to continue to be challenging in areas where skill shortages exist, such as IT. Hence, organizations with the most effective recruitment and retention systems may continue to garner a competitive advantage. The US workforce will continue to become more diverse, so firms are likely to continue experimenting with variable compensation and high performance work systems to enhance productivity. Japan. During an extended period of economic recession for most of the 1990s, broad and striking changes have been made to the Japanese employment system. How fundamental or reversible they are is harder to evaluate. Japans economy finally began to show signs of a recovery in 1999. If the economic recovery prevails, a considerable stabilization of Japanese HR practices can be expected, although at a higher level of market-oriented flexibility than previously existed. Traditional practices. Employment is based on the lifetime system; hiring of workers and managers into entry-level positions directly out of college is common. Pay rises and promotions are automatic. In the wage system based on seniority, sta-

tus and seniority are tied to the length of service rather than to job duties or merit. Although subordinates know that they can influence decisions, the ultimate decision comes from the top. Japanese managers make an active commitment to preserve harmony, through intricate social rituals like gift giving, bowing to superiors, and using honorific language to show deference. Workers often gain a broad perspective on production by being rotated through different departments. Such investments in breadth of skill and overall understanding of the production process are justified by the strong lifetime employment guarantees bonding workers to their companies and allowing the skilled and experienced production workers to contribute to management decisions. Changing HR practices. The breakdown of the interfirm network system of cross shareholding and preferential trading among member corporations of a business group has badly hurt the safety net of supporting the long-term growth strategy of Japanese firms and their ability to protect employees from downside market risks. Deregulation is another force for change. It has made Japanese markets more accessible to competitors, foreign as well as domestic. The aging population also has clear implications for corporate HR practice. With an aging workforce, the permanent employment and seniority system burdens firms with rising numbers of higher-paid and less productive workers. Recently, growing numbers of companies are explicitly weighting ability and performance over tenure and age in salary decision. Finally, the transition to a service econo-

my combined with socio-cultural and socio-economic changes has had a profound effect on Japans employment institutions. Although leading-edge manufacturers are still competitive, their contribution to Japanese domestic employment and income is shrinking, in favor of the emerging service sector as the next great engine of jobs and wealth. Employment practices of sales and service firms are different from those of manufacturing. Their younger workforce is more mobile, less committed to work and the firm (Debroux, 2004). Furthermore, since the organization of work in service firms is less team-based, individual performance is more easily evaluated. Accordingly, occupational skills are valued over firm-specific skills, so that broad job experience becomes the main driver of wages and performance rather than loyalty to one employer. Gender issues are rapidly surfacing in the Japanese traditionally male-dominated corporate world. Japanese women, long locked in the crouch of tea serving office ladies or contract workers performing low-skilled work on the assembly line, are standing up. Professional young women are flocking to new hightech ventures where gender does not seem to matter much. Such opportunities have been increasing steadily over the past few years and the Equal Opportunity Law, passed in 1985, which requested employers to make efforts not to discriminate, has been recently revised to make discrimination illegal. In conclusion, there are broad and striking changes sweeping the Japanese employment system. How fundamental they are is difficult to evaluate. No matter whe-

ther it regards performance pay or reductions of the workforce, the change of HR practices in Japanese companies seems to be slow and incremental, carefully avoiding abrupt or traumatic breaks with the past.

3. HRM in Lithuania
The previous part of the article showed that the process of globalisation and the development of multi-national companies unify HRM and at the same time underscore the importance of national cultural values. On comparing the changes in patterns of HMR in the UK, France, USA and Japan, let us proceed with the analysis of the peculiarities of HMR in Lithuania which is a representative country of the post-soviet bloc, on the one hand, and a new member of the EU since may 2005, on the other hand. In the case of post-soviet bloc countries, globalization poses distinct challenges to governments, the private sector and organized labour. The practice of HRM in Lithuania during 19902008 can be separa- ted into two periods. Each period was influ- enced by controversial groups of factors. The first period (19902004) was strongly influenced by traditions that came from the soviet regime (authoritarian work met- hods, lack of employee initiative, material priorities of the employers). This period could be characterized by the dominating so-called hard HRM. The second period (since 2005) was influenced by the new traditions (EU accession, huge increase in the emigration of employees, establishment of branches of international companies which have

brought new HRM strategies). In this period, the peculiarities of the so-called soft HRM emerged. As the scope of the article does not allow an exhaustive analysis of all functions of HRM, it will focus on one of them, viz. reward. The main problems of Lithuanian enterprises share one common feature: the managers attempt to mechanically increase salaries (following the trends in the market) rather than actually manage them. However, some executives are aware of this problem and make it a priority issue by searching the ways which would ensure that every litas spent on salaries increase the added value for the enterprise. They also begin to favour the idea that a sound reward system should contribute to restricting the influence exercised by the middle and lower management on the reward of their subordinates. In addition, the executives, fearing the decreasing supply of qualified labour force, shift their attention from material priorities to employees by implementing real employee motivation and development measures. This was in part proved by a survey carried out by the author of this article and other members of the Management Department of the Faculty of Economics of Vilnius University (Cesyniene, 2002), which interviewed managers of all levels of 12 manufacturing companies of Lithuania (in total 559). The findings of the questionnaire could be used to infer about the attitude of the managers to the employees and its motivation. While exploring the guides for objective-raising and decision-making, the technocratic orientation of managers became apparent. Their majority think that invol-

vement of employees into the formulation of the objectives and decision-making process is an important factor in improving personnel motivation, encouraging initia- tive. However, as far as making of impor- tant decisions is concerned, 33.8 percent of managers think that their opinion is not taken into consideration at all, 17.3 percent familiarise with the already passed decisions, 65.5 percent can observe the process of passing of important decisions as they are involved in the preparation of supporting information, and only 13.4 percent feel that they are making important decisions. The respondents equaled to zero the possibilities of staff to participate in this process. When answering the question about the ways of motivation, 45.3 percent of managers pointed out that the highest significance is given to the cash reward systems. Other forms of motivation are not widely used: 8 percent of managers pointed selfdevelopment and qualification upgrading plans as motivation measures; 6.3 percent said that employees are motivated by redesigning their work and by trying to increase job purposefulness; 3.3 percent of managers said the motivation is increased by involving the employees into company management. 14 percent of managers stated that employees are not motivated at all. Answering the question about the advantages and disadvantages of the reward systems applied in the companies, 12 percent of managers were rather self-critical, stating that there is no reward system applied in their company. Managers of the companies that apply such systems mentioned such major drawbacks: 1) limited financial

resources for incentives; 2) insufficient link between reward and the employees efforts, qualification and competence; 3) penalties are more often applied than incentives. The survey has revealed that up till 20042005 Lithuanian companies were dominated by the so-called hard HRM, with the focus on employee control, utmost exploitation of their potential and obtai- ning the maximum benefit from them, neglect of employees needs. However, the EU accession, dramatically increasing emigration of qualified and even low-qua- lified workers to the West and the growing competition urge the managers to shift their attention from the material priori- ties to their employees as one of the key resources of the competitive advantage. The intensive growth has led to tightening labour markets and an escalation in wage claims. The increasing labour demand and emigration have contributed to a declining unemployment rate and more job vacan- cies. The resulting wage growth has raised the standards of living. However, the real wage growth is currently running at rates well above the growth of labour productivity, and in 2006 the unit labour cost incre- ased by 11 percent year on year. These circumstances urge the managers to shift their attention to soft HRM, i.e. to the needs of their employees as one of the key resources of the competitive advantage.

Conclusions
1. Many aspects of HRM are affected both by globalization and by differences in national culture. Evans and Doz have

described the managerial challenge in 5. In late 2000 the US economy is slocomplex international organizations in wing. Though workers may become terms of harmonizing seemingly oppoeasier to find in general, recruitment is sing forces rather than making binary likely to continue to be challenging in either/or choices. areas where skill shortages exist. The 2. The overview of HRM within different US workforce will continue to become cultures and nations is that it can hide more diverse. Firms are likely to continue experimenting with variable comthe variety that exists and thus overpensation and high performance work simplify what can be a complex picture. systems to enhance productivity. Nevertheless, this review has sought to bring out the main trends and the prin- 6. The change of HR practices in Japanese companies seems to be slow and incipal tasks faced by HRM professionals cremental, carefully avoiding traumatic in the selected countries. breaks with the past. Japanese managers 3. The general context within which HRM have a strong sense of corporate changes have taken place in the UK is obligati- on to provide jobs, income and a reflection, primarily, of changing resecurity. gulation arising both from the UK go7. Lithuanian companies have been domivernment and from membership in the nated by the so-called hard HRM, EU, globalization and strong pressures with the focus on employee control, to drive costs downwards. utmost exploitation of their potential 4. The current French HRM practices are and obtai- ning the maximum benefit the result of several constraints such as from them, neglect of employees strong and specific state regulations, a needs. On the other hand, the lack of demography unique in Europe, the acqualified wor- kers and the growing celeration of internationalization of larcompetition urge the managers to shift ge organizations, and sociological uptheir attention to soft HRM, i.e. to the heaval. needs of their employees as one of the key resources of the competitive advantage.

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