Human Resource Management

T729

Similarities and Differences inHuman Resource Management in the European Union

Lisbeth Claus

Executive Summary

This study explores similarities and differences in human resource management(HRM) in the European Union (EU). Common factors in the development ofEuropean HRM are the importance of consultation, the emergence of flexible workpatterns, the role of work and the employer in the life of employees, and the introduc-tion of the Euro. National, company, and regional factors create divergence inEuropean HRM. National factors include societal hierarchy, different cultures andmental models, societal structure, and language. Company factors include size of com-panies, public versus private, and multinational or local. Regional factors differenti-ate along north-south and east-west axes. The EU had relatively little impact onHRM in terms of harmonization of labor and tax laws but had major impact on theopening up of markets to foreign competition and privatization of public sector com-panies. While cultural diversity remains strong, the influence of large multinationalcompanies may lead to more regional integration in the practice of HRM. EuropeanHRM is much more comfortable operating in a polycentric mode than U.S. HRM,which seeks universality and standardization. © 2003 Wiley Periodicals, Inc.

INTRODUCTION

here is a simplistic notion among U.S. HR executives that global companiesoperating in Europe can deal with European Union (EU) countries as a region-al entity. This notion has been reinforced by the growing economic and politicalunification of Europe resulting in the free movement of capital, goods, and peo-ple and ongoing harmonization of EU legislation. Some multinational compa-nies assume that their EU subsidiaries can be managed from a regionalperspective through shared HR services and that corporate culture and stan-

Thunderbird International Business Review, Vol. 45(6) 729–755 • November–December 2003

© 2003 Wiley Periodicals, Inc. • Published online in Wiley InterScience (www.interscience.wiley.com).

DOI: 10.1002/tie.10100

Lisbeth Claus is an associate professor of global HR at the Atkinson Graduate School ofManagement at Willamette University. She previously held faculty and administrative positions atthe Fisher Graduate School of International Business at the Monterey Institute of InternationalStudies and managerial positions with Safeway Inc. and Maritz Inc. She is president of the SHRMGlobal Forum. Her research interests lie in international HR, cross-cultural management, globalleadership, global teamwork, and global corporate social impact. E-mail: [email protected]

Lisbeth Claus

730 Thunderbird International Business Review • November–December 2003

dardized HR practices can be imposed throughout their Europeanoperations without major consequences. Chris Brewster (1994a,1994b, 1995), a prolific academic writer on the subject, makes thepoint that while there are substantial differences between the wayhuman resource management (HRM) is understood and opera-tionalized in each country, Europe as a whole has a differentapproach to HRM than the United States.

Keeping in mind this tension between globalization/standardizationand localization/adaptation of HR practices as well as the existenceof a distinct European regional approach, this article focuses on sim-ilarities and differences of HRM in the EU and explores whether ornot there is a European model of HRM leading to greater homo-geneity of HRM across the EU region.

LITERATURE REVIEW

European authors have acknowledged that HRM originally devel-oped in the United States (Brewster & Bournois, 1991; Brewster &Hegewisch, 1994; Brewster & Larsen, 1992). After taking root inthe United States, it spread, first to other nations with cultural prox-imity, then to more culturally distant countries (Clark & Mallory,1996). The claim has been made that U.S. HR models have domi-nated HRM research and practice worldwide (Brewster & Harris,1999; Harris & Brewster, 1999). European writers (Albert, 1989;Bournois, 1991; Conrad & Pieper, 1988; Gaugler, 1988; Guest,1990; Hendry & Pettigrew, 1990; Legge, 1989) have been critical ofapplying American HRM views to other countries, especially Europe.Such criticism is entirely valid. A theoretical or practice HR modeldeveloped in the cultural context of one country should not indis-criminately be applied to another country without testing the cultur-al biases of its assumptions.

While the hegemony of U.S. influence in HRM has been criticized,there is also a particular fondness among some European HRM aca-demic writers (at least those who publish in English) to compare andcontrast European with U.S. HRM (Brewster & Bournois, 1991;Brewster & Hegewisch, 1994; Hegewisch and Brewster, 1993;Pieper, 1990). Brewster and Bournois (1991) posed the followingquestion as a point of departure to justify such a comparison, “Towhat extent is there sufficient similarity in Europe to require us toquestion whether there may not be significant differences between

A theoretical orpractice HRmodel developedin the culturalcontext of onecountry shouldnot indiscrimi-nately be appliedto another country . . .

HRM in Europe as a whole and the United States of America?” (p.34). The comparison points out that in Europe, HRM is less depen-dent, companies have less autonomy and freedom of action, tradeunionism is more important, the social partners have more influence,legal regulations are more important, and there is a stronger traditionof employee involvement. Brewster and Hegewisch (1994) push thecomparison between European and American HRM even further andjustify the existence of a European HRM model based on these dif-ferences. They conclude that, “There are identifiable differencesbetween the way in which HRM is conducted in Europe and that ofthe United States, a difference which allows us to speak of aEuropean form of HRM . . .” (p. 5). Brewster and Bournois (1991)also speak of two paradoxical trends that run through HRM inEurope. On the one hand there are clear country differences that canbe understood and explained in the context of each national cultureand its manifestations in history, laws, institutions, and employeeorganizations. On the other hand, there is an identifiable differencebetween the ways in which HRM is conducted in Europe versus theUnited States (p. 47).

Brewster has made an important contribution in pioneering thenotion that there is a European HRM tradition distinct from others.He must be credited with being the first to attempt to develop a“European” model of HRM distinct from existing U.S. models. HisEuropean HRM model locates organizational issues within sectorial(organization size, structure, culture) and national influences. Healso spearheaded the development of a large body of empirical com-parative HR research across Europe (Brewster, Hegewisch, &Lockhart, 1991).

However, according to Clark and Mallory (1996), Brewster’sEuropean model has four main problems. First, talking aboutEuropean HRM is an example of reductionism that fails to take intoaccount the cultural diversity of the European nations. Second,Brewster overestimates the level of autonomy enjoyed by HR man-agers and organizations in the United States. Third, his model ispotentially culturally conditioned (as he uses the Anglo-American lit-erature) and inherently ethnocentric (as he perpetuates the view thatAmerican notions of HRM can be found to a greater or lesser degreein other countries). Finally, Brewster’s most critical problem is thathe does not take into account divergent understandings in differentnational settings. Responding to his critics, Brewster (1999) laterrevised his position and shifted his viewpoint from a European HRM

Similarities and Differences in Human Resource Management in the European Union

731Thunderbird International Business Review • November–December 2003

“There are identifiable differences

between the wayin which HRM is

conducted inEurope and that

of the UnitedStates, a

difference whichallows us to

speak of aEuropean form

of HRM . . .”

Lisbeth Claus


model to the existence of “models” depending on the paradigm used.This led him to consider a juxtaposition of a “universalistic”paradigm to a “contextual” paradigm. The universal paradigm uses amonothetic approach and tends toward acceptance of convergencewhile the contextual paradigm is ideographic and seeks to understanddifferences based on context.

Another crucial question that needs to be answered is whether onecan talk about Europe (i.e., speak of it in a universal manner), or aclustering of various countries with similar characteristics, orwhether one must consider Europe as a set of highly diverse andparticularistic countries. The HRM literature is mixed regardingthis issue. Laurent (1986) pointed out that every culture has devel-oped through its own history specific and unique insights into themanagement of organizations and their human resources. Pieper(1990) asserted that a single universal model of HRM does notexist. Clark and Mallory (1996) questioned whether it is valid totalk of a European notion or model of HRM given that the nationsof Europe do not share a common set of cultural characteristics.They suggested using a polycentric approach in developing an alter-native model for understanding European HRM. They argued thatthe nature of HRM and the type of practices that will predominatein a particular nation would be the result of three factors: the inter-national institutional context, the national culture, and the nation-al institutional context. Sparrow and Hiltrop (1994) opposed anyEuropean model of HR and asserted that one can only speak of“HRM in Europe” because of the marked differences in HR prac-tices between European countries. They stress the role of fourmajor dimensions (cultural factors, institutional factors, differencesin business structure and system, and factors related to the roles andcompetencies of HRM professionals), further divided into 23 fac-tors, resulting in distinctive national patterns of European HRM.This HRM model is, so far, the most elaborate theoretical and con-ceptual framework developed to compare national differences inHRM.

A number of authors (Brewster & Larsen, 1992, 2000; Clark &Mallory, 1996; Filella, 1991) talk about Europe as clusters of coun-tries with similarities. A problem with clustering countries is that dif-ferent researchers use various criteria to cluster and come up withdifferent country configurations. Clark and Mallory (1996) suggestthat three factors account for the allocation of nations to particularclusters: (1) geographic and cultural proximity, (2) language; and (3)

A number ofauthors talkabout Europe asclusters of countries withsimilarities.

religious traditions. Other authors (Bures & Vloeberghs, 2000; Cazal& Peretti, 1992; Clark & Pugh, 1999; Fenton-O’Creevy, 2001)focus more on differences in European HRM than on similarities.

In spite of divergence among HRM practices throughout Europe,there are also some signs of convergence as a result of globalization,the American influence, and the impact of the EU (Fenton-O’Creevy, 2001). The most important converging factor is thoughtto be as a result of the EU. In recent years, the EU has been con-structing a European “social model” of people managementthrough its European social policy and employment legislation(Teague, 1994). Through its directives and recommendations, theEU is streamlining HR practices related to health and safety, genderequality, employee involvement in work council participation,parental leave, etc. The European Social Fund plays a major role inaddressing asymmetries within the EU such as structural unemploy-ment, youth unemployment, and socioeconomic disparity issues(Matthews, 1997).

The literature review supports the duality put forward by Brewsterthat, on the one hand, there are distinct differences in the way HRMis viewed in the different European countries and, on the otherhand, there are clusters of similarities and a European identity thatmakes HRM specific to the region. This has led to attempts at devel-oping a European HRM model. The development of such aEuropean HRM model is attractive to facilitate the understanding ofthe complex legal, cultural, and structural factors that determine thepractice of HR in Europe. The search for a European model is evenmore attractive when one considers the growing structural, political,and legislative unification trends of the EU and the importance ofEuropean countries as business partners for countries worldwide. Inaddition, a number of recent societal changes (such as the recessionof the early 1990s, the relatively high level of structural unemploy-ment, the fall of the Berlin Wall, and the break up of the SovietUnion) have affected Europe and the practice of HRM. Europe,like other countries and continents, cannot ignore the people man-agement pressures resulting from globalization and increased inter-national competition. For Europe this is coupled with the burdenof its protective legislation and the aging of its demographic struc-ture. All these factors make the search for similarities and differencesin European HRM a worthwhile endeavor that can facilitate inter-national business ventures with European or multinational compa-nies located in the EU.



The most important

converging factor is thoughtto be as a result

of the EU.

CONCEPTUAL FRAMEWORK

Unfortunately, much of the current research on European HRM hasan ethnocentric bias, dominated by British, French, and/or Germanviews and practices with the exception of a few researchers, who haveused more polycentric or comparative approaches, and the labor rela-tions literature, which has always emphasized the importance ofnational institutional differences. The models on European HRMhave generally not taken into account the paradigms of Europeancountries other than the big three (United Kingdom, France, andGermany). There seems to be an inherent bias that nothing worth-while happens in HRM in the remaining 12 EU countries. Literaturereviews on European HRM have mainly focused on English publica-tions (sometimes German and French publications are reported aswell). As a matter of fact, most of the references cited in the literaturereview of this article are Anglo-Saxon as well. The Anglo-Saxon biasin the literature review is due to the fact that most academic HRjournals that are published in the various European countries in thelocal country languages are unavailable in libraries outside of theircountries and are not readily accessible through electronic periodicaldatabase searches. A systematic review of the HR literature in theother eight languages of the EU (Danish, Finnish, Flemish/Dutch,Greek, Italian, Spanish, Swedish, and Portuguese) is missing, unavail-able, in a language not understandable for most readers, or simplyassumed to be non-existent. In addition, most data collection forEurope-wide HR research projects was either done in English orusing instruments translated (and back-translated) from English.

Sparrow & Hiltrop (1994) noted that differences between societiescan be explained by cultural factors (a form of cultural reductionism)and must be modified to consider the interaction between the cul-tural norms, legal institutions, and underlying economic factors.Therefore differences in HRM(s) would most likely be the result ofthe interconnection between the culture and structure of a particularsociety. Such a particularistic view of HRM fits the sociology ofknowledge frame of reference suggesting that knowledge and prac-tice develop in a broader context (i.e., the cultural and structural ele-ments of a society). The context of this research assumes that thereare three macrocomponents that influence HR development inEurope: the international institutional context of the EU, the nation-al cultures, and the national structure of each country. Discoveringthe path of European HRM(s) and their similarities and differencescan only be done meaningfully by viewing its practice from a multi-

Lisbeth Claus


Unfortunately,much of the current researchon EuropeanHRM has an ethnocentric bias . . .

cultural and multilingual perspective and taking into account thebroader societal context in which professional HRM practicesemerge.

METHODOLOGY

“An international comparison of HR management is no easy under-taking” (Gaugler, 1988). The research viewpoint utilized in theEuro-HRM project is that cross-cultural and international researchcannot be reduced to empirical comparisons of data from differentcountries without attempting to understand the broader context. Asimilar assertion was made by Boxall (1995), who argued that credi-ble explanations in comparative HRM cannot be built on simplisticmethods and statistical databases but must be connected to thesocioeconomic outcomes. Cross-cultural research must be multilin-gual and undertaken with cultural savvy, and it should also utilize avariety of methods (quantitative and qualitative) and data (primaryand secondary). In addition, each method of data collection must bescrutinized for ethnocentrism. The Euro-HRM project was based onthe “Monterey model,” a heuristic model used in the training ofglobal professionals at the Monterey Institute of InternationalStudies. The Monterey model requires the integration of profession-al competency in a discipline (in this instance HR), language skills(the various languages of the EU countries), and cross-culturalknowledge/savvy (the various cultures of EU countries).

Data on the current status of Euro-HRM were obtained by conduct-ing a naturalistic inquiry in each country and a review of selectedlocal country articles and/or theses written on the development ofHR in a particular country. A total of 50 leading European HRexperts were interviewed in 14 different countries of the EU. Theseleading HR practitioners, academics, consultants, heads of HR pro-fessional organizations, and influencers in each country were consid-ered privileged because they were in an exceptional professionalposition to witness the development of HRM in their respectivecountries. Selection criteria for being considered a key witnessincluded HR prominence in their country, recommendations bythe head of the country’s HR professional organizations, andreferrals from other prominent HR experts. Although many of thecountries have a wider set of “HR experts” than could possibly beincluded in this research, the interviewees were among the leading“HR experts” who had been in a position to witness and be part



Cross-culturalresearch mustbe multilingual

and undertakenwith cultural

savvy . . .

of the development of HR as professionals in their respective coun-tries. Among the 50 HR experts from the 14 different countrieswho participated in the interviews, 21 were senior HR profession-als (directors and vice presidents of HR), 11 leading HR profes-sors, nine consultants, and nine influencers (staff of professionalHR associations, HR journalists).

Eleven fieldworkers were selected from two graduate schools ofthe Monterey Institute of International Studies (Fisher GraduateSchool of International Business and Graduate School ofInternational Policy Studies) to conduct the field interviews.Selection criteria to be considered as a fieldworker included native-like language proficiency, knowledge of the culture of the country,and at least one graduate-level course in the following three sub-jects: human resource management, international organizationalbehavior, or cross-cultural management. Fieldworkers completedtraining sessions focusing on the scope of the Euro-HRM research,the interview protocol, data collection techniques and the use ofthe data templates to report the data. Almost all fieldwork wasdone during the last two weeks of May 2000. When fieldworkerswere on assignment in the various European countries, they stayedin touch with each other and the principal investigator through anonline e-group. This enabled them to jointly problem-solve field-work issues that arose during the data collection period. All inter-views were conducted in the language of the country and almostall interviews were done face-to-face on location. Interviews wereaudiotaped in the original language and transcribed and translatedinto controlled English. Each in-depth interview, based on aninterview protocol, lasted approximately two hours. A few inter-views were conducted over the telephone because the intervieweewas not available at the time of the summer fieldwork. HR expertsalso supplied fieldworkers with local HR documentation and addi-tional support material. Fieldworkers prepared a summary of theirfieldwork in English and were involved in follow-up discussionswith the principal investigator to ensure accurate interpretation ofthe responses to the questions.

Concerns with this methodology were two-fold: Would a selection ofdifferent people being interviewed and the use of different fieldworkers following this open enquiry method produce differentresults and place the findings of the study in question? Whileacknowledging that the methodology could reduce the validity of thefindings, a number of factors were taken into consideration to safe-

Lisbeth Claus


Concerns withthis methodologywere two-fold:Would a selection of different peoplebeing inter-viewed and theuse of differentfield workers following thisopen enquirymethod producedifferent resultsand place thefindings of thestudy in question?



Table 1. List of HR Experts Interviewed for the Euro-HRM Research

Country HR Expert InterviewedAustria* Peter Gusmits, H. Neumann International Management

Consultants Susanne Herles, Konzerns Service und Beratung GMHBRudolf Krenn, Wiener Stadthalle Betriebs-und Verantstaltungs

GMBHWolfgang Mayrhofer, Wirtschaftsuniversität Wien

Belgium Daniel Bastin, SmithKline Beecham Luc De Decker, HRMagazineWilly Musschoot, Management Consulting François Pichault, University of LiègeMarc Van Aken, Glaverbel Daniël Vloeberghs, University of Antwerp

Denmark Ann-Charlotte Hasselager, Ledernes HovedorganisationHenrik Holt Larsen, Copenhagen Business SchoolPeter Moller, Novo Norsisk A/S

France Nadia Alard, Eligia Sylvie Cresson, Gras SavoyJean Fombonne, Author of doctoral thesis on HRM in FranceSophie Luneau, GaumontJean-Louis Mutte, Anderson Consulting

Germany Dieter Claus, Schwarzkoph & HenkelHans Böhm, DGFPMichael E. Domsch, Universität Bundeswehr HamburgMarcus Heidbrink, Kienbaum Management Consultants GMHBWerner Opgenoorth, Beiersdorf AG

Greece Gavrillidis, Hellenic Fabrics, S.A.Dimitris Hatjopetrou, Forum Management ConsultantsStella Ksitoriti-Kufida, University of MacedoniaDimitris Vrontos, Greek Personnel Management Association

Ireland Peter Mulholland, Allied Irish BankItaly Ruggero Cesarea, IRSO

Sandro Ciani, Parma Giovanni Costa, University of PaduaLuigi Di Marco, Milano

Luxembourg Bernadette Froment, LuxguardNetherlands Mechteld Nije, Deloitte and TouchePortugal Pedro Croce Rivera, CIMPOR

Rui Mora, PractitionerCarlos Moura, APGTRHMaria-Joao Safara, Consultant

Spain Roberto Carballo, Universidad Complense de MadridAlberto Fernandez Caveda, MadridRicardo Esteban, Griker & AssociatesCarmen Gomez de Ureta Merino, DNA Consultores Antonio Gonzales Suarez Bustamante, Dragados Gonzalo de Lucas Ruiz, AedipeAlberto Fuster de Carulla, Aedipe

Sweden Marie Hallander Larsson, Scandic Hotels Lennart Ryden, Pharmacia & Upjohn

United Kingdom Chris Brewster, Cranfield School of ManagementLesley James, TescoJudy Whittaker, CIPD

*Affiliation is at the time of research (Summer 2000).

guard for this bias with regard to interviewers and interviewees. Nosingle individual would be able to amass the cultural and linguisticsavvy to conduct the comprehensive study in nine different languagesand 14 different countries. In-depth preparation, fieldwork communi-cation, and post- fieldwork debriefing were intensive. Fieldworkers prac-ticed interviewing skills and gained familiarity with the pre-establishedstandardized research protocols before going on location. The issue ofwhether the interviewees were selected appropriately and whether dif-ferent interviewees would have produced different results can only beascertained at face validity. For the smaller countries (excluding theUnited Kingdom, Germany, and France), there is no doubt that theinterviewees were the leading HR experts in their country. For France,Germany, and the United Kingdom, due to the availability of a widerrange of experts, the decision might have been more subjective.

FINDINGS

The in-depth interviews with HR experts sought to analyze the fol-lowing broad issues: (1) Are there important issues an outsidershould know about HRM in particular European countries? (2) Isthere a European HR model or are HRM models country-specific?(3) What is the impact of the European Union on HR? and (4) Whatsimilarities and differences can be discerned in Euro-HRM?

Important issues an outsider should know about HRM in the EUcountries HR country experts had no trouble indicating what specific mattersoutsiders should be aware of regarding HR practice in their countryor when setting up an HR practice. While answers were differentfrom country to country most responses focused on, in order ofimportance, local labor laws, unique national cultures and subcul-tures, labor relations, social institutions that are specific to the coun-try, consultation with social partners, and the need for localization ofHR practices. In spite of different examples given in differentEuropean countries, there was general agreement among HR expertsthat these factors defined consistently the unique nature of HRM intheir country and for Europe as a whole.

Laws. HR experts indicated that it is paramount to know the intri-cacies of the country’s laws that govern employment and labor rela-tions. As a result of complicated labor legislation and regulations inmost EU countries, the early background of HR professionals tend-ed to be technical and law-related. Respondents strongly recom-

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HR countryexperts had notrouble indicatingwhat specificmatters outsidersshould be awareof regarding HRpractice . . .

mended the need for using “local” experts to ensure compliancewith country laws and regulations and their implementation. Thatlabor laws differ from country to country is nothing new. What isinteresting is their uniqueness in spite of EU directives and the trendtoward harmonization of labor and employment laws. As laws are areflection of the culture and the result of the institutionalization ofvalues, norms, and codes of conduct, the EU, as a political and eco-nomic union, has not yet managed to tackle the harmonization oflocal labor laws.

Culture. Each country has its unique culture and language. Thenational culture (and subcultures) is embedded in value dimensionsthat govern individual and social behavior and affect the corporateculture of companies. In spite of increased travel, the multilingualskills of the workforce in many European countries, and structuralopportunity for labor mobility within the EU, European workerstend to have relatively low labor mobility and hold on to their coun-try’s cultural roots. The cultural impact on management and HR iswell-documented in the management literature. Two Dutchmeninspired most of the debate (Hofstede, 1980, 1991; Trompenaars,1993). HR experts emphasized that importing HR practices that arecounter to the culture of the country or imposing standardized prac-tices without localization are seen as counterproductive and imperial-istic. Several examples of the lack of cultural savvy by U.S. companiescame up over and over again; such as the use of 360-degree evalua-tion as a means of performance appraisal, U.S.-style diversity man-agement (with a race and gender focus), implementation ofnon-smoking policies in the workplace, office layouts in cubicles, andthe introduction of casual dress days. U.S. companies are imposinguniform standards in their European operations on relatively trivialissues (such as smoking, office layouts, and dress code), but theseissues have strong cultural implications for Europeans. In fact, thereare only limited attempts to transfer more important essential ele-ments of a successful U.S. business culture (for example, the focus onentrepreneurship and innovation) to their European subsidiaries.Similarly, local HR practitioners in European subsidiaries of Americancompanies are often forced to focus on national and provincial fac-tors, because the legal and cultural issues are so different from U.S.practice, and they are not always given the opportunity to participatein strategic issues at the Pan-European or global corporate levels.

Subcultures. Within countries, there are different subcultures that affectHR. They are based on differential economic development, urban ver-sus rurally located companies, linguistic differences, and company size.



. . . the EU, as apolitical and

economic union,has not yet

managed totackle the

harmonization oflocal labor laws.

The most interesting example of subcultures in Europe can be seen inBelgium where HR in Wallonia (French-speaking) is very different fromHR in Flanders (Flemish-speaking). HR in Belgium developed alongdrastically different lines in spite of common Belgian labor legislationand tax systems. The professionalization of Flemish HR is considerablymore advanced than HR in Wallonia, mainly as a result of the differen-tial economic and social development of the country. In addition, theHR frame of reference is very different in both Belgian subcultures. InWallonia, the HR model is based on syndicalistic and collectivisticnotions, while in Flanders people management tends to be based moreon entrepreneurship and individualistic concerns. Hence, in spite of thesame Belgian legal context, HR practices and reward systems follow dif-ferent paths based on the linguistic and regional subcultures (Claus,Vloeberghs, & Pichault, 2002).

Labor relations. As a result of globalization and privatization, the powerof trade unions is considered to be decreasing overall in Europe. Spain,however, is bucking the trend as union membership has actually grownsignificantly. While labor relations are still very important in definingHR practices, labor unions in the EU are in the process of reinventingthemselves. Labor unions have strong political and national allegiances.Due to strong cultural, historical, and local solidarity, labor relations arebeing defined on a country-by-country basis rather than at theEuropean level. In general, labor relations in Europe tend to be coop-erative rather than adversarial as compared to the United States. Laborunions in the EU remain legitimate partners in the consultative processbetween employers, employees, and the government. Labor unions inthe various EU countries have worked very hard to affect labor legisla-tion. They have been successful in promoting laws for the protection ofthe workers in their respective countries as well as at the EU level. Bythe same token, their success has given rise to a specialized HR exper-tise within companies to deal with compliance with these laws. As aresult, unions may have created a professional HR force functioning asa spokesperson for management rather than for employees.

Institutions. Each country has developed a set of institutions that reflectstheir tradition and that influences the way HR is practiced. The natureof these institutions also differs from country to country. Of particularinterest in the EU is the development of strong and well-evolved socialsecurity systems (based either on the German Bismarck model or theBritish Beveridge model). While the entitlement of a vast array ofemployee benefits is guaranteed under these systems, there is an abun-dance of discussion as to the economic viability of providing these gen-

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. . . in spite ofthe sameBelgian legalcontext, HRpractices andreward systemsfollow differentpaths based onthe linguistic andregional subcul-tures

erous benefits to an aging population in view of global competitiveness.However, the idea of a social safety net is deeply engrained in Europeansociety and strongly supported by the social policy of the EU. Otherimportant institutions and structural differences that affect HR in theEU are education, political systems, religion, demography, family, andvarious social and administrative/regulatory organizations.

Consultation. In general in Europe, there are formal consultation pro-cesses in place that allow greater involvement of employees and tradeunions in the company’s decision-making processes. These consultationpractices are institutionalized in the important EU directive on workcouncils. HR in Europe is very often more consultative toward man-agement rather than controlling. As a result, HR is often more reactive,paternalistic, and administrative rather than top-strategic.

Need for localization. Importing HR practices from abroad withoutlocalization (to the culture, laws, or language of the country) has littlechance of successful implementation. European HR practitioners arereluctant to adopt foreign models of HR for practical as well as ideo-logical reasons. The European reaction of “malicious compliance”comes to mind, when global companies are imposing “foreign” HRpractices without adapting them to local cultural norms. In spite of thisreluctance, global companies seem to be adopting more and more stan-dardized initiatives.

In summary, HR experts recommend paying attention to local laborlaws, the local cultures and subcultures, the importance of labor rela-tions, specific institutions shaped by the country’s history, the impor-tance of consultation, and the need for localization of HR practices.These factors constitute the major differences when “European” HRMis contrasted with HR in the United States.

Does Euro-HRM Exist?Although the idea of a European HRM model had been suggested inthe literature review, the HR experts interviewed for this study almostunanimously agree that there is no European HRM model but thatthere are multiple ones operating in different countries and withincountries. When probed, respondents most often reasoned that a lackof a Euro-HRM model was due to the broadness of cultural differ-ences among countries. European societies are an amalgamation ofcountries founded on different social, cultural, religious, and ethnicsolidarities. While there is no European model yet, HR experts indi-cated that, especially in large multinational companies, the strategic



Importing HRpractices fromabroad withoutlocalization haslittle chance of

successful implementation.

global HR model is gaining influence as a corporate cross-borderHRM model. Respondents agreed that if there is a European HRMmodel, it is really a “global company” HRM model of multinationalcompanies operating in the EU. This global HRM model is heavilyinfluenced by the best practices of the large European and Americanmultinationals. The U.S. HRM model is also promoted through uni-versity education, best-selling management publications (often trans-lated into the different European languages) and leading U.S. HRMexperts who are frequent speakers at European HRM professionalconferences. The role of multinational companies is especially felt insmaller countries such as Belgium, Luxembourg, the Netherlands,Greece, and Portugal where many local companies in recent years havebecome subsidiaries of larger U.S., French, or German internationalcompanies.

While professional HR functions, processes, and competencies mightbe more or less similar around the world, Euro-HRM practices stillconsist of a multitude of different methods in which these functionsare implemented. These differences are based on nation, company,and industry characteristics. Although the Social Programme of theEU has provided a number of directives in the area of employment,training, and development funding to reduce structural unemploy-ment, its impact on HR is minimal as of yet and has not led to theharmonization of national employment and social legislation.

Are we heading toward a European model? There is no doubt thatwith increased communication and the integration of informationtechnology in HR services, HR tools will become more similar acrossEurope. Especially in the areas of leadership, HR scorecards, compe-tency management, and knowledge management there have beengreat developments in harmonizing the tools that aid managers andenable them to reinforce this European trend. HR experts indicatedthat blue-collar workers in the various European companies tend torespond more to local patterns while managers adopt global man-agement practices faster. They anticipate that, unlike in the manage-ment arena, there will not be a lot of change for the blue-collar sectorin the next decade. The management function is becoming morestandardized across Europe as a result of teamwork and interactionswith colleagues from abroad in other parts of global companies. Similartools and models are already being utilized across borders within thesame company. Globalization, technology, and economic cycles mightbe far more effective in developing a “global brand” of HR, althoughcultural differences will remain strong, and legal as well as cultural local-ization of HRM practices is necessary for operating in the EU countries.

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Are we headingtoward aEuropeanmodel?

HR experts predicted that for large companies operating across borders,the local management models might be replaced by a global model thatshows great similarity with the European and U.S. models of the multi-national companies. For senior management positions, this trend isalready underway in Europe. The corporate global HRM model seemsto be outpacing the EU in the area of harmonization of HR practices.

The Impact of the EU on HRRespondents perceive the impact of the EU on HR to be minimal at thelocal/national levels. This does not lessen the significance of HRM inthe EU. The implications for HR of belonging to the EU are mainlyrelated to the free movement of labor resulting in the ability of employ-ees to cross borders for employment opportunities. While borders aredisappearing, allowing for the free movement of people, there has beenrelatively little noticeable change in cross-border migration of workersmainly due to cultural factors. With regard to labor legislation, the EUhas mainly kept in place the local labor laws of the individual 15 mem-ber countries. There is a legal and regulatory employment framework inthe EU through its directives. As of yet, there are only a number of EUdirectives that relate to employment, and there is no real harmonizationof HR legislation or equalization of social and tax systems. EU directivesrelated to employment can be found in a number of areas such as healthand safety, vocational education and training, gender equality, employ-ee involvement and participation, and unemployment. Many EU coun-tries were already performing at a higher standard than the EUdirectives required. For countries that had not yet met these standards,the EU directives had a positive effect on HR. For example, in Greece,improvements in health and safety were obtained through the EU’sfinancial support incentives for safety and health training programs pro-vided by the European Social Fund. Prior to their entrance into the EU,countries like Greece were often not included in many labor statisticsand employment studies. This had a positive impact on Greece andhelped to increase its national presence and pride.

The EU’s most important impact on HR relates to the economic andpolitical consequences of creating an economic and political union.The EU had repercussions for companies and indirectly for HR. Theimpact of the EU is also felt by more established members (such as theUnited Kingdom), as a result of the recent entrance to the EU ofcountries like Portugal, Spain, Greece, and Austria, which caused thelabor market to open up for competition with the availability of cheap-er labor. The newer EU members were also affected by the imple-mentation of the EU directives (i.e., updating their employment laws)and/or upgrading their standards to levels set by the EU directives.



For countriesthat had not yet

met these standards, the

EU directives hada positive effect

on HR.

They, in turn, often benefited by receiving financial aid from theEuropean Social Fund for training and development. Overall, theimpact of the EU was perhaps felt most through deregulation of thepublic services and the development of social policy in the area ofemployment. To remain competitive, a more competitive and cus-tomer-oriented business model and, consequently, a more appropriatepeople management model were needed. However, according to theHR experts, the impact of globalization and the growing internation-alization of companies were perceived to be much greater on thedevelopment of the value-added HR model than the creation of aSingle European Market. The EU impact is not just through directiveson working time or equal opportunity. It is much more about theopening up of markets and the introduction of foreign competition.The true impact on HR of the Single European Market can be seen insectorial adjustments, increasing firm size and concentration, and thedevelopment of European firms (Hendry, 1994). The HR impact isfelt much more on maintaining productivity, restraining labor costs,and increasing quality standards due to competition. In addition, thelargest European companies (in terms of number of employees) tendto be public service companies such as utilities, railroads, and postalservices. The EU has put a lot of pressure on the public sector to pri-vatize. These indirect effects through the economic and performancechanges brought about by the EU have been much more significantfor HR than the European Union’s Social Charter, social programs,and employment-related directives. As one respondent said, “An HRmanager does not really spend time reading EU directives.”

In summary, despite the development of the EU, there is noEuropean model of HR. While there may be a common context inEuropean HR that distinguishes it from U.S. HR, the lack of har-monization of labor legislation and the cultural diversity result incountry-specific HR practices. The EU’s greatest impact on HRlies in deregulation, privatization, and the resulting increase incompetition. The impact of the global company model seems to bemore important in the standardization of HR practices than that ofthe EU.

SIMILARITIES AND DIFFERENCES IN EURO-HRM

According to the respondents, there are fewer similarities in HRM inthe EU than there are differences. This, again, points to the absenceof a genuine Euro-HRM model.

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As one respon-dent said, “AnHR managerdoes not reallyspend time reading EU directives.”

Similarities in Euro-HRMAlthough countries differ in how they go about HR services, HRMfunctions can be considered to be universal. While there is noEuropean HRM model, respondents admit that there are characteris-tics that make it distinct from HR in other continents. Similarities inEuropean HRM are the importance of consultation, the emergence offlexible work patterns, the role of work and the employer in the life ofemployees, and the use of the Euro as a common currency.

Consultative approach. European HRM is more consultative in itsapproach than U.S. HRM and requires a collaboration between dif-ferent stakeholders as social partners (management, employees,unions, and governments). This collaborative model is institutional-ized in the EU directive on consultation.

Temporary work and flexible work patterns. A recent development inthe EU countries is the growth of flexible work structures and tem-porary work patterns. The emphasis on temporary work structureshas developed as a response to reduce structural unemployment(especially youth unemployment) and has led to a greater emphasison competencies and polyvalence. In addition, the focus on work-lifebalance calls for more flexible work patterns.

Role of work and the employer. There is a different mentality in theEU countries regarding the role of work and the employer.Employees consider social benefits as entitlements and work-life bal-ance as an acquired right. The employer is responsible for theemployee and has to, in a sense, “take care of” and “care for” theemployee. Although the importance of a social safety net is acknowl-edged throughout Europe, social policies and social security benefitsare significantly different from country to country. Benefits packageshave core elements that are similar across the EU but they vary basedon local laws, entitlements, and traditions.

The use of the euro. The use of the euro as a common currency ismore than just a symbol of European unification. While compensa-tion and tax systems are far from harmonized in the EU, the Europrovides greater transparency for employees in compensation, bene-fit matters, and purchasing power.

Differences in Euro-HRMHR professionals must deal with very different realities based on thecontext of the country and the businesses in which they operate.



Although countries differin how they go

about HR services, HRM

functions can beconsidered to be

universal.

Factors that create differences in HRM in different European coun-tries are both nation- and company-based. National differences inHRM are mainly based on the extent to which there is hierarchy in thesociety, the different cultures and mental models, strong labor andsocial legislation incorporated in vastly different national laws, regula-tions, and different tax systems. Company factors relate especially tothe size of the companies, public versus private sector, and multina-tional versus local companies. Finally, some regional differences areclustered around the northern/southern and eastern/westernEuropean axes.

National factors. National factors creating divergences in Euro-HRMare: (1) hierarchy; (2) cultures and mental models; (3) societal struc-ture; and (4) languages. First, hierarchy and power distance in thesociety are especially relevant in creating differences in work andmanagement practices. As illustrated by Hofstede’s (1980) research,each nation is different in the function of its cultural characteristics.The United Kingdom, the Netherlands, and the Scandinavian coun-tries have a rather dim view of hierarchy and are more equality-based,while France, Germany, Greece, and Portugal are more status-based,thereby making it difficult to build a flat organizational structure.

Second, the different cultures and mental models, such as collec-tive/syndicalism versus individual/developmental models, impact thecompetencies needed to be an effective HR manager. The HR man-ager working in the individual/developmental model has a hard timeoperating in the collective/syndicalism model because it requiresworking in collective management, building relations with tradeunions, having knowledge of the labor laws and union practices, andpossessing strong negotiation skills and political intuition. In con-trast, in the individual/developmental environment, the HR manag-er must possess personal skills and human relationship skills (such assensitivity, curiosity, and attention to individual expectations) and awillingness to engage in dialogue. The practice of HR is also embed-ded in various social models that are operating in Europe. This studyidentified the existence of an Austrian social peace model (where har-mony is sought between the various stakeholders), a Dutch social jus-tice model (that accepts the interventionist role of the governmentto provide social protection in employment), a Belgian social com-promise model (requiring give-and-take among the representatives ofdifferent political, linguistic, and religious factions in decision mak-ing), a Swedish/Danish social equality model (based on theJanteloven concept of “Thou shalt not be better than anyone else”),a German co-determination model (with employee involvement and

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Factors that create differences inHRM in differentEuropean countries areboth nation- andcompany-based.

participation in the company), a Luxembourgeois consensus model(with tripartite representation of labor, management, and govern-ment), an Italian ideological model (emphasizing protection and sol-idarity based on Christian and Marxist values), and a Frenchcentralized administration model (a more authoritarian, legalistic,and administrative approach). These social models have considerableimpact on how the management-employee relationship is construedand the skills the HR professional needs required to operate withinthe appropriate country model.

Third, a structural component affecting HR is the strong labor andsocial legislation incorporated with vastly different national laws andregulations. In addition, each country has very different individualand corporate tax systems affecting the total compensation andreward systems that can be offered to attract, retain, and motivateemployees.

Fourth, languages play a major role in creating differences inEuropean HRM. In some European countries, people are proficientin multiple languages. In other countries (such as France, Austria, andthe United Kingdom), people have more limited linguistic capabilities.Smaller countries often have a cultural reference point (e.g., Germanyfor Austria and Luxembourg; France for French-speaking people fromWallonia and Luxembourg). In European countries with smaller pop-ulations, where the native language is not a world language (e.g.,Denmark, Luxembourg, Belgium, Netherlands, and Greece), peopleoften learn several other languages through their formal education.Multilingual HR professionals (often from smaller countries) have anadvantage over people with a dominant country language (such asEnglish, French, and German). They are in a position to tap intoanother cultural reference base. HR professionals from smaller coun-tries have the capacity to integrate the knowledge (HR and manage-ment) they acquire into their own practices and adapt it as needed. Inmost cases, for HR the reference language is English and the referencecountry is the United States. Therefore, inspiration comes mainlyfrom the United States and less from other EU countries.

Company factors. Company factors creating divergences of Euro-HRM are: (1) size of companies; (2) public versus private sector; and(3) multinational versus local companies.

The first company factor creating divergence in HRM is the size ofEuropean companies. The majority of companies in EU are small ormedium-sized. The number of employees working for the largest



. . . each countryhas very different

individual andcorporate tax

systems affectingthe total

compensationand reward

systems that canbe offered to

attract, retain,and motivate

employees.

5,000 employers in Europe range from as low as 1,960 employees toover 1 million. Only 41 European companies have more than100,000 employees and only 888 companies have more than 10,000employees. The large employers in the different European countriestend to be in the public rather than the private sector. Another factorthat influences HRM is that although some companies might have asmall number of employees at the local country level, they belong toa large global or multinational company. European integration ofHRM is possible for large companies, but the small and medium-sized enterprises still have the one HR administrator that is allocatedto the controlling/accounting department. Smaller firms do not havethe critical mass and cannot invest in HRM and HR development inthe same manner as large and multinational corporations. Howeverthese companies can, because of their small size, often avoid country-specific regulations and the imposition of the EU directives (such ashaving a work council if they have a certain number of employees).Within a particular country, there is not one model of HR but thereare large-company, small-company and start-up/new company mod-els. In the large company, HR is well established with modern sys-tems. In small companies (often family-owned), there is anowner/leader model based on mutual trust relations. In start-upcompanies, there is a global new economy model with limited hier-archy and a focus on entrepreneurship and rewards.

The second company factor creating HRM divergence relates towhether companies are in the public or private sector. Up to the mid-1980s, in most EU countries, there was strong governmental influencein the area of HR through government-owned businesses, state subsi-dies, and the support of the local economy. Public sector companieswere controlled by the state and labor relations were the basis thatinfluenced HRM. The public system was effectively connected withmonopolies (telecommunications, electric and gas power utilities, rail-ways, and postal service). Lack of customer orientation was a trademarkof these companies. This resulted in noncompetitive business sectors,bailouts of failed businesses by the state, and an emphasis on the union-ized public employee model of lifelong employment, extensive socialbenefits, and compensation based on seniority. The political nature ofthe business in many European countries was so deeply rooted in thesociety that it was taken for granted. With the entrance into the EU,privatization of public companies became the norm. Compared to theUnited States, the EU still has a much larger proportion of public toprivate sector employment. The industrial sector also produces varia-tions in HR practices between and within countries.

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Smaller firms donot have thecritical massand cannotinvest in HRMand HR development inthe same manner as largeand multinationalcorporations.

The third company factor creating HRM divergence is related tomultinational versus local companies. Multinational companies havea global model that is the closest to becoming an accepted “univer-sal” model. The corporate culture of these European and Americanglobal companies is based on attracting and retaining the bestemployees, building customer relations, developing employees, andcreating a winning corporate culture of empowerment and account-ability. Companies that work Europe-wide have pushed for Europeanor even global integration so that the HR tools and instruments atleast fit with each other. A good example is the European expatria-tion compensation for EU workers. Global companies have a ten-dency to abandon the expatriate and special compensation packagesfor their European expatriate employees and espouse a Europeanintegration standard. Foreign firms with subsidiaries in EU countriesuse the firm’s global model and adapt it to the constraints of the localcountry (mainly legislative, tax, and social requirements).Multinationals can have a differential impact on local HR dependingon the degree of integration of the HR organization: They can bringin more competitive value-added HR systems and practices and trans-fer knowledge to local HR components (as was the case in Belgium,Spain, and Greece). Or, they can limit the ability of the local HR pro-fessional to adapt corporate policy to the complexity of the country’slegal constraints (as was often the case in Luxembourg). A new HRmodel is evolving, and it is based on the forma mentis of the globalcompany with an emphasis on practices such as strategic visioning,development and execution of the people strategy, HR administrativecapabilities, emphasis on customer service in meeting employeeexpectations, competency development, and change management.

Regional differences. With regard to HRM, Europe is divided intonorth-south and east-west regional differences. Awareness of theimportance of people management is much more pronounced in thenorthern than in the southern countries. But, there is an increasedawareness in the south of the importance of HR professionalization.Although certain countries (Greece, Italy, Portugal, Spain, Austria,and Luxembourg) are considered behind in HR, they are all quicklycatching up with the more advanced HR countries. Several of thesecountries (especially those who recently entered the EU) are receiv-ing assistance from the European Social Fund for HR developmentand for bringing their standards in line with the EU directives. TheCranfield studies (Hegewisch & Brewster, 1993) have identified dif-ferences in HR practices between the European countries on a vari-ety of dimensions (from devolvement of HR services to line



Companies thatwork Europe-

wide havepushed for

European oreven global

integration sothat the HR toolsand instrumentsat least fit with

each other.

management to performance appraisals). Some north-south general-izations are, that the level of participation and co-determinationincreases form southern to northern countries and that the hierarchyflattens from south to north. In the long run, the north-south dif-ferences are expected to decrease with greater HR interaction and theproliferation of global company models. Common trends and simi-larities should become more important in HR in the future in spiteof the current legal, cultural, and tax divergences. Although the inte-gration of the new Eastern German Länder into unified Germany wasa German-specific issue requiring a German way of responding, itopened Europe’s frame of reference to the East. The integration andentering of new markets in eastern Europe called for a moreEuropean or global HRM model. Certain EU countries, such asGermany, Austria, and Greece are becoming focal points for theCentral and Eastern European neighboring countries. With the even-tual entrance of many of these countries to the EU, their HR refer-ence might become more Euro-centric rather than national. Thenorth-south regional groupings suggested in the literature have beenborne out by this study with culture being the main differentiator. Inaddition, an east-west axis is emerging as a result of the increasedinterest of “Western” European companies in “Eastern and Central”European markets. The main east-west differentiator is the country’slevel of economic and business development. However, the recentproliferation of HR professional associations in the Czech Republic,Hungary, Latvia, Poland, Slovakia, and Slovenia (with membershipsranging from 55 in Latvia to 960 HR practitioners in Slovenia) isanother testimony to the growing business and HRM developmentin these countries.

CONCLUSIONS

This study focused on similarities and differences in HRM in thecountries of the EU and the impact of the EU on HR practice. Ingeneral, similarities in Euro-HRM lie in greater employee consulta-tion with different stakeholders, the role of work and leisure in peo-ple’s lives, the development of different work patterns, and theintroduction of the Euro as a common currency in the majority ofEU countries. Although the role of unions is changing, they remainan integral partner (with the government) in the Euro-HRM scene.Creating differences in European HRM are national, company, andregional factors. National factors include societal hierarchy, differentcultures and mental models, societal structure, and language.Company factors include size of companies, public versus private, and

Lisbeth Claus


Common trendsand similaritiesshould becomemore importantin HR in thefuture in spite ofthe current legal,cultural, and taxdivergences.

multinational versus local companies. Regional factors differentiatealong north-south and east-west axes. A major obstacle toEuropeanization is the lack of harmonization of labor and tax laws.The EU had relatively little impact on HRM in terms of harmoniza-tion of labor and tax laws but had a major impact by opening up mar-kets to foreign competition and privatizing public sector companies.The unintended impact of the EU on HR is the need for competitivelabor in terms of cost and competencies. In spite of the marketdemand for intellectual capital and the pressures for competitiveness,the EU reinforces the social model of employment. That model isdeeply engrained in European societies and variations can be foundin different countries.

HR does not exist as a uniform practice in the EU. Instead, the waystandard HR services are delivered represents a collage of differentpractices. There are no differences in the basic HR functions (such asrecruiting, selection, compensation, benefits, training, labor rela-tions, employee relations, etc.) in Europe, but the context in whichHR services are delivered is vastly different from country to country.Variations in HR practices are mainly due to the different employ-ment/labor laws and the national cultures and the organizationalcontext of the company. As a result, in the EU countries HR can bemany different things on a continuum from personnel administrationto very strategic HR and people management. Macro forces thatshaped the development of HR in the past and present require thatHR adapts its practice to the legal, economic, political, social, struc-tural, cultural, ideological, and technological context of the country.

It is difficult to gauge the development of HR because professional-ization characteristics (such as body of knowledge, licensing, ethics,and professional organization) are value-laden Anglo-Saxon notions.Multifaceted indicators must be used to ascertain whether HR ismore or less developed in a country. They should include structuralvariables (such as size of company, economic sector, privatization,and legislation) as well as cultural indicators impacting management.A clear tendency is that HR in the EU is moving away from person-nel administration to strategic HR, and might move from national toEuropean and global HR as a result of the impact of global compa-nies. The HR dominance of the larger European countries and com-panies headquartered in these countries (such as France, Germany,and the United Kingdom) is evident. However, due to their ownnationalistic tendencies and ethnocentrism, they might not be theHR trendsetters in Europe. The U.S. HRM reference point is veryimportant and American companies (by being large global compa-



A major obstacle to

Europeanizationis the lack of

harmonization oflabor and tax

laws.

nies) are large employers of EU citizens through their European sub-sidiaries. Furthermore, small European countries often have an HRadvantage over the big European three by being more open to for-eign influences and flexible in implementing and integrating new HRpractices. This study has found highly developed HR bodies ofknowledge and advanced HR practices in small countries like theNetherlands and Belgium. Because of their global mindset, foreignlanguage capabilities, lack of notoriety on the global HR scene, andcontact with multinational firms, HR professionals in these countrieswere in position to absorb, synthesize, and integrate outside HRinfluences in their own country practices. Companies in smallercountries are, however, more vulnerable when it comes to HRbecause their companies are both smaller and family-owned (with lit-tle or no HR function) or have been swallowed up by foreign com-panies and lost their HR autonomy.

As a result of globalization, the “global company HR model” clearlyovershadows the development of a Euro-HRM model. This model isbased on “labor competitiveness” and the need for value-added HR.It also pushes for the development of standardized HR practiceswithin a company across borders and worldwide HR shared services.The standardized HR model does localize to comply with countrylegislation but largely ignores the necessary cultural adaptation.While the desire for standardized HR practices is attractive for glob-al economies of scale and scope, they cannot eradicate or ignore thestrong identification of people to their cultural and national roots.Due to the strong legal, cultural, and institutional differences fromcountry to country, there are dangers for a company that operatesthroughout Europe in managing HR in different regions. If HR is toadd value to the company, failing to take into account the impact ofculture as well as structure on people management will not result inpositive well-being and productivity for the employee. HR in Europeis positioned more as a link between the well-being of individuals andthe competitiveness of the company. Balancing both requirements isa major component of HR’s strategic role in Europe.

Globalization has a much further reaching consequence on the HRprofession than probably any other external force since the end of theindustrial revolution. It has engendered a series of mergers and acqui-sitions between European and U.S. companies and pushed for theprivatization of public companies, free trade, and greater competi-tiveness. Combined with technological and communication capabili-ties, companies need teams to function across borders and cultures

Lisbeth Claus


As a result ofglobalization, the“global companyHR model”clearly overshadows thedevelopment ofa Euro-HRMmodel.

and work together to achieve global objectives. All these factors havefocused executive attention on the value of the workers’ knowledgeand competencies, accountability, and productivity as well as the needto understand the local culture and structure in which people oper-ate. While cultural diversity remains strong, the influence of largermultinational companies may lead to more regional integration in thepractice of HRM.

It is interesting to note that while U.S. HR professionals may nothave specific knowledge of HR in the various EU countries,Europeans do not have a clear understanding themselves of HR intheir neighboring countries. The reference for HR in many Europeancountries is the United States. For multinational and global compa-nies there are solid HR networks within companies that allow forknowledge-sharing of HR best practices. There are also well-estab-lished academic ties through research cooperation and teaching pro-grams. As the context of HR throughout Europe is being subjectedto structural and business changes, looking for similarities and differ-ences may be too simplistic a way to grasp the many factors that cre-ate the context of HR in the different countries. European HRMlives more comfortably in a polycentric mode than U.S. HRM thatseeks universality and standardization. Differences based on culturaland structural factors are accepted as a way of life in Europe despitethe overarching infrastructure of the EU. What might be lost by theeconomies by organizing a “global” HR function of a company oper-ating in different EU countries could be gained in creativity, innova-tion, problem solving, and productivity of the culturally diverseEuropeans. As U.S. HR has generally espoused diversity of people inemployment practices and internalized its benefits, global companiesshould consider adopting diversity of HR practices within theirEuropean operations with the same resolve.

ACKNOWLEDGMENTS

The author is grateful for the comments, insights, and suggestions pro-vided by her colleagues through the journal’s peer review process. TheEuro-HRM research project was supported through a grant from theSHRM Foundation and made possible through the participation of thefollowing fieldworkers: Andrew Berdy, Rebecca Busich, Diane Castro,Carsten Eldrup, Robert Hector, Laurent Kounouho, Natanya Myers,Dounia Nouini, Morena Petrich, Lisa Sandblom, Jeroen Van Hijfte,and Astrid Ziebart. Their support is gratefully acknowledged.



It is interestingto note that

while U.S. HRprofessionalsmay not have

specific knowl-edge of HR in

the various EUcountries,

Europeans donot have a clear

understandingthemselves of

HR in theirneighboring

countries.

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