schenken bei: sp nagesh chetan sethi sahil bhushan amit kumar gaurav gupta jagdeep singh
TRANSCRIPT
I H R M P R A C T I C E S I N G E R M A N Y
Schenken bei:
SP NageshChetan Sethi
Sahil BhushanAmit Kumar
Gaurav GuptaJagdeep Singh
Population: 82.34 million– Berlin (Capital) 3,404,000– Hamburg 1,754,00– Munich 1,294,000– Cologne 989,000– Frankfurt am Main 652,000– Stuttgart 593,000.
Currency: Euro
Founding member of the EEC
GDP Growth - real growth rate 1.8%
Inflation rate: 2.6%
Unemployment: 12.6%. However, the unemployment is high due to the higher unemployment rate in former East Germany (16.8% in East Germany vs. 8.4% in West Germany).
Germany Overview
1. Leading Economy: 3rd largest Economy
2. Global Player
3. High Productivity
4. Excellent Workforce
5. Innovative Power
6. First-Class Infrastructure
7. Inviting Incentives
8. Competitive Tax Conditions
9. Secure Investment Framework
10.Quality of Life
10 Reasons for Choosing Germany
Features of German business Environment
1. Economic Growth
2. Stable Economic Environment
3. Business Landscape
4. Foreign Direct Investment
5. Infrastructure
6. Workforce
7. Innovative Power
8. Trade Fairs
Since unification in 1989, Germany is Europe’s most populous nation and the continent’s largest economy. Situated at the heart of the European continent, and fundamentally shaped by Europe’s history, it is characterized by deep regional identities while at the same time also conveying a “national” German culture.
In today’s global business environment, developing successful business strategies and valuable business relationships, based on an awareness of this German culture, is essential for one’s organisation.
IHRM activitiesHuman Resource Planning
Recruitment and Selection
Training and Development
Performance Management
Remuneration
Repatriation
Employee Relation
1. Identifying top-management potential early.
2. Identifying critical success factors for future international managers.
3. Providing developmental opportunities.
4. Tracking and maintaining commitment to individual in international career
paths.
5. Tying strategic business planning to HRP an Vice-versa.
6. Dealing with multiple business units while attempting to achieve globally
and regionally focused strategies
Human Resource Planning (HRP)
Recruitment and SelectionEthnocentricKey management positions filled by parent-country nationals
PolycentricHost-country nationals manage subsidiaries and Parent company nationals hold key headquarter positions
RegiocentricHiring and promoting employees on the basis of the specific regional context of the subsidiary
GeocentricSeek best people, regardless of nationality, Best suited to Global and trans-national businesses
Causes of Expat assignment failure
Major Reasons in Germany:1. Inability of spouse to adjust2. Manager’s inability to adjust3. Language Problems
Remuneration /Compensation
How to adjust compensation to reflect national differences in economic circumstances and compensation practices.
How expatriate managers should be paid.
The German firm - high uncertainty avoidance - rules settled everything.
Expert based, need for education and certification, delegation, participative management, extensive employee protection, somewhat risk averse
For non-managerial employees, international firms normally adapt their compensation and performance appraisal systems to local laws, customs, and cultures.
While U.S. workers appreciate feedback from an appraisal system, German workers are resentful of feedback.
Some facts on IHRM in Germany
Co-determination In Germany, there is a statutory system for some form of employee representation
on the board of directors or supervisory boards of some types of company. Statutory works councils systems based on legislation or widely applicable collective
agreements exist in 12 EU members (primary is the German model of the betriebsrat)
Expatriates may face two tax bills for the same pay, one from the host country and one from the home country.
Most parent-country governments have devised regulations that allow the expatriate to minimize double taxation. Often, the expatriate may need to pay income tax in only one country.
In cases where additional taxes are incurred by the employee, the employer will usually reimburse the employee for this extra tax burden.
Tax Equalization
Headquarters Salary System
Headquarters pay scale plus differentials. The salary for the same job
at headquarters determines the base salary of the home country
national. The differential can be a positive addition to an expatriate’s
salary, or it can be a negative allowance to account for the extra
benefits that might be associated with the particular overseas
placement
Citizenship Salary System
The manager’s salary is based on the standard for the country of his or
her citizenship or native residence. An appropriate differential is then
added, based on comparative factors between the two countries
Types of Compensation system
Remuneration in GermanyTypically use balance sheet approach
Equalizes purchasing power to maintain same standard of living across countries Provides financial incentives to offset qualitative differences between
assignment locations.Pay for Schools, health care, etc.
Base SalarySame range as a similar position in the home country
Foreign service premiumExtra pay for work outside country of origin
AllowancesHardship, housing, cost-of-living and education allowances
TaxationFirm pays expatriate’s income tax in the host country
BenefitsLevel of medical and pension benefits identical overseas
German CultureKey Concepts and ValuesBusiness Etiquette
Appearance
Businessmen wear dark suits, solid conservative ties and white shirts
Women also dress conservatively, in dark suits and white blouses
Chewing gum while talking to someone is considered rude
Germans are strongly individualistic.
shake hands at both the beginning and the end of a meeting.
Age takes precedence over youth.
Punctuality is necessity.
When introduced to a woman, wait to see if she extends her
hand.
Appointments are mandatory and should be made 1 to 2 weeks
in advance.
Letters should be addressed to the top person in the functional
area, including the person's name as well as their proper business
title.
If you write to schedule an appointment, the letter should be
written in German.
Behavior in Business Situations
Germans are very private
Titles are very important
Shake hands at both the beginning and end of a meeting
Business decisions are not made over the phone
Communication
Germans value their time
As business men they work hard
They are under a lot of pressure
It’s considered bad etiquette to be late
Or too early!
It shows disrespect for their time
Punctuality
9 to 5 Monday-Saturday
Except a few business men 6 p.m. all the time
Sundays most jobs are closed
Unless they have a limited operating permit
Only a few business are 24 hours, i.e. Gas Stations etc.
Standard Work Schedule
Only 4% of women work in office management
Many women rights still very outdated
They believe women should be in the kitchen
taking care of the children
in the church
Many women don’t attend college or try to further their
education in any way
Women in the Workforce
Value order, privacy, punctuality
Are thrifty, hard working, industrious
Respect perfectionism
Have sense of community, strong desire for belonging
Appear reserved, unfriendly until you get to know them better
About German People
Shake hands with everyone present when arriving, leaving
Never shake hands with one hand in your pocket.
When introducing yourself, never use your title. Introduce
yourself by last name only.
Titles very important. Never use titles incorrectly. If unsure, err in
favor of a higher title.
Initial meetings are used to get to know each other. They allow
your German colleagues to determine if you are trustworthy.
Meetings adhere to strict agendas, including starting and ending
times.
At the end of a meeting, some Germans signal their approval by
rapping their knuckles on the tabletop.
Meeting & Greeting
Contacts vital to a business success. Use bank, German representative or Chamber of Industry and Commerce.
Rank very important in business. Strict vertical hierarchy. Power held by small number of people at top.
Deference given to authority. Subordinates rarely contradict or criticize boss publicly.
Decisions debated informally before meetings with compliance rather than consensus expected in meeting.
Decision making slow with thorough analysis of all facts.
Plans cautious with fallback positions, contingency plans, comprehensive action steps.
Corporate Culture
Being well, correctly dressed very important.
Gifts not exchanged at business meetings.
Give books, bourbon, whiskey, or classical music.
Dress & Gifts
Germans more formal and punctual than most of world. They
have prescribed roles and seldom step out of line.
Don't be offended if someone corrects your behavior. Policing
each other is a social duty.
Don’t lose your temper publicly. Compliment carefully and
sparingly.
Stand when an elder or higher ranked person enters room.
There is a strict protocol to follow when entering a room:
The eldest or highest ranking person enters the room first.
Men enter before women, if their age and status are roughly
equivalent.
The Bottom-line:When in Germany, do as the Germans do
• In comparison to a few years ago when the economy was a bit healthier, a new employee’s starting probation period is now really used by companies for what it is.
• No other reason could explain the results of a recent survey carried out by Germany’s Chamber of Industry and Commerce which show that in a sample of 21,000 companies, 50% of terminations took place during the probation period.
• One method that helps in the integration process is the mentor-model, which has long been known as a popular success measure for new CEOs and even the German Chancellor can also be helpful in orienting anyone new to a job.
First 100 days in German Organisation
The perfect negotiator: • having the patience of a clockmaker and not suffering from prejudices or stereotypes.• do not confront the other party immediately with arguments and demands. Take time
at the beginning of the negotiations to break the ice• Set up your goals and plan your negotiation time:• Genuinely communicate your own strengths: Make sure that you communicate your
own strengths, regardless of whether others have the same strengths or not.• Pick the right moment: which point in the negotiation process would be the best time
to use them. • Be fair and objective:
When negotiating, keep cool and do not let your emotions get the best of you. If your proposal or position leaves the other party annoyed, do not consider this to be a sign of success.
• Listen attentively, ask questions, repeat, and summarize: • "Visualize" your arguments:
Don't just make claims, but make your ideas clear with easy to follow steps• Use clever phrases: • Use of "I" & "We":
Negotiation in Germany
Power distance: status importance, hierarchy: Spain-Sweden
Individualism: group, socialization… vs. autonomy, personal challenges…USA-Japan
Uncertainty avoidance: risk, instability tendency: Italy-Hong Kong
Masculinity/femininity: rigid sexual stereotypes: Germany-Finland
Long-term/short-term orientation: China-USA
IHRM and National Cultural differences:Hofstede (1980)
“Diversity does not only makes Business Sense, It’s a Business must”Dr. Dieter Zetsche, Chairman of Board of Management, Daimler AG
Daimler’s Diversity management program has been in place since 2005. They aim to be one of the most highly respected companies in automotive industry for diversity and inclusion by 2010
Diversity management at Daimler: focused on implementation and are
currently working on the following activities:
Diversity awareness and in-depth training for managers
Performance evaluations incorporate diversity management criteria
Development programs: mentoring, staff rotation, international exchanges
Transparent placement processes
Flexible working arrangements
Marketing and recruitment initiatives for focused target groups
Germany’s commitment to diversity charter:Commitment along the following items:
1. Create a valuing Corporate Culture
2. Ensure fair and meritocratic processes
3. Ensure internal representation
4. Internal and external communication
5. Employee involvement
6. Yearly progress report
Benefits of Diversity to Daimler:
It improves customer care and marketplace competition
It enhances corporate image and reputation by maintaining ethics and values;
It helps becoming an employer of choice to attract and retain talent by improving people
management and development and being aware of labour market factors;
It has to do with complying with legislation;
It plays a key role in recognizing corporate social responsibility to improve relationships
with communities, make economic activity more inclusive, and improve business markets.
Compensation PoliciesCompensation is performance-based and success-orientedThe same basic principles apply worldwideA large proportion of variable compensation.Geared to individual performance and company profits. A Daimler Group component for all executivesCompensation in the collective bargaining sectorEmployee Pension PlanConversion of salary to gain capital gains/benefitsDirect insuranceMutual funds & company share entitlementAdditional Benefits Employee sales Daimler company health insurance fund sports, cultural and leisure facilities
Staffing and Recruitment Policies1. The company attracts talented individuals from all over the world.
2. No discrimination between men and women
3. Consists for both locals and expats
4. New recruits and in house movement of staff for optimal use of workforce
5. Adequate training provided to maintain required standard
6. Known for its tough screening process
1997: acquisition of Wertkauf
1998: take over of Interspar
Appointment of US citizen, Rob Tiarks, as CEO Ethnocentric approach unsuccessful
No adaptation to German Culture
No pre-departure training
Denial of differences between Germany and the United States
Do It the Wal-Mart Way
Why Wal-Mart FailedLow price strategies did not work
Poor product qualities
Dirty stores
Service
Wal-Mart in Berlin
Refused to have labor unions
Does not comply with local labor laws: Co-determination
Faces huge strikes
Hours of work
Video surveillance
Employee relationship
Hiring and Firing
Wal-Mart and Labour Unions
Wal-Mart’s ethnocentric approach was a failure
Human resources failed to recognize cultural differences
Wal-Mart survival only possible if labor was allowed to participate in management
Good employee-employer relationship is the key to success
Concluding Remarks