To get started with this lesson, this presentation is designed to give you an insight into some of the theory behind what we know as Comparative Employment Relations, or Comparative HRM.

The first thing to note in Comparative HRM theory is that there are two fundamentally different paradigms from which the field originates. The first of these is known as the Universal “best practice” paradigm. This way of thinking about HRM assumes that there is one formula for best practice. In other words, there is one best way of doing HRM, one best way of recruiting people, one best way of managing their performance, one best way of handling employee relations, etc. And the reason why these are considered “best practices” is because they are said to be linked to achieving high firm performance. If a practice works well for a firm, it is logical to think that this best practice might be adopted across the whole of the company so that other units can also benefit from it. This universalist approach takes an organization-level focus, meaning that it assumes management within the firm has sufficient autonomy to be able to implement whatever practices it deems appropriate.

The alternative IHRM paradigm is the Contextual or contingent “best fit” paradigm. This approach does not believe there is one best way of doing certain HRM practices, and instead it focuses on trying to explain what is different in HRM, and why, in different countries. This means that the HRM practices being put in place in a firm are not necessarily being implemented because of their ability to enhance firm performance per se. The contextualist paradigm considers what other factors there are in the firm’s operating environment which might prevent it from being able to implement what it wants to. This gives this paradigm a national level focus, and considers the range of national institutions and systems within a country context which might influence how HRM is carried out in this location.

Now we can further explore this contextualist paradigm from two directions. The first we have already addressed in the last lesson –the Culturalist perspective. This perspective is focused on the individual level and tries to explain individual reactions to HRM practices based on characteristics of national culture. It is based on the Programming of the mind and explores individual level behavior. The other perspective within the contextualist paradigm is known as the Institutionalist perspective. This perspective moves away from the individual level and focuses on the level of society as a whole. When taking an institutionalist approach, we explore the systems, traditions and norms within a society with respect to employment practices. This means we need an understanding of the social infrastructure within a country, in other words, the role of government and trade unions, employment legislation, education infrastructure, and so forth. By taking both a culturalist and institutionalist approach to exploring the context in which firms are operating, we can start to understand why they use the HRM practices they do.

The final issue I would like to highlight is to explore the extent to which the effect of globalization might be changing some of these patterns of HRM practices due to cultural and institutional factors. This is what is known as the Convergence/Divergence debate. Here, we will look at some definitions of Convergence and Divergence so that you can consider these as you continue with your reading. Firstly, Convergence is the notion that differences are diminishing as globalization becomes more entrenched, and societies move towards each other in the way they do things. This can happen in two ways:

Firstly, Directional Convergence assumes that the use of a particular HRM practice is at different levels in a range of countries, but that it is increasing (or decreasing) in use uniformly across all of these countries. In other words, this is a trend moving in the same direction, such as the use of email to communicate with employees is increasing in all organizations. However this is only Directional Convergence because there are different start and end points.

Final Convergence on the other hand, is a truer form of Convergence in that the use of a certain practice is becoming the same everywhere; there is movement towards a common end point. In other words, we might note that countries used to have very different policies for maternity leave, for example, but as time passes, all policies are starting to look more and more alike due to the effects of globalization. Now this is just an example and not necessarily reality for this particular practice, but you can see how Final Convergence is a different argument to Directional Convergence.

The opposite of Convergence is Divergence – this argument assumes that there is little evidence of such a moving together, and in fact societies remain steadfastly different and unique. The use of particular HRM practices therefore shows no patterns across countries as every context is different. So we see different start points and different end points.

There are however two alternatives to the Convergence/Divergence debate also. Firstly, there is the option of Stasis, that is, we are not observing any change over time. Despite the effects of globalization and the activities of multinational firms, there is evidence that you will read about which suggests that the HRM practices used by firms are actually very stable over long periods of time and are not affected greatly by changes in the national or international context.

The other option is Crossvergence. Crossvergence is a term used to denote the intermixing of national systems (cultural and/or institutional) between different countries. So in other words, when a practice is copied by another country, it may take on a different form due to the cultural or institutional context, although the name of the practice and perhaps the philosophy behind it remain unchanged. However, it is in effect a new practice which has been born of the new context.

Well, these are just a few of the debates in the field of Comparative HRM – best fit versus best practice, culturalist versus institutionalist explanations, and Convergence versus Divergence. You can read more about these in the readings which accompany this lesson.