It goes without saying that Human Resource Management (HRM) practices and policies are significant for organizations and they play an important role in shaping firm performance. Yet standard HRM approaches often fail when organizations expand their operations across borders in general and emerging markets in particular. Evidence stresses that cross-national HR survey instruments, typically used to inform best practices in organizations, suffer from unique challenges mainly because they are applied across culturally and institutionally diverse regions and lack sufficient adaptation to the local context’s needs. A recent study on HRM practices across five emerging markets, namely Brunei, India, Jordan, Saudi Arabia, and the UAE, reveals significant variations, questioning the effectiveness of using one-size-fits-all HRM frameworks in diverse settings.[i] For policymakers and business leaders, understanding these differences is crucial for refining HRM practices that align with local norms while supporting global business objectives. If you’re interested in learning how diversity in institutional and cultural backgrounds shape HRM strategy, the following short article might be of interest to you.
Why Standardized HR Surveys Struggle Across Borders?
Standardized HR surveys have made it easier for multinational companies (MNCs) to collect large-scale data and create consistent practices across different locations. However, this process has a significant caveat: when we apply the same survey to vastly different markets, we often miss the nuances that make each country and context unique. Language, cultural traditions, economic levels, and institutional frameworks shape the workplace differently in each country, meaning a one-size-fits-all survey can overlook important details. Evidence of it is the widely varied level of employees’ job satisfaction across markets (see Figure 1), as well as the diverse levels of satisfaction in regard to employer's diversity policy, even in relatively homogenous institutionally contexts such as this of central Europe (see Figure 2).
For instance, standardized surveys may work well in Western contexts, but in regions like the Middle East, where “wasta”, i.e., a system of personal connections, plays a major role, HR managers may respond differently to questions than they would in a Western market.[ii] This proves that MNCs and policymakers need to appropriately recognize and address these cultural and institutional differences. Ignoring them risks missing the mark on what motivates employees, how talent is best recruited, and what keeps people engaged in their jobs. If these distinctions are overlooked, even well-intentioned HRM strategies can fall short, weakening employee morale and business outcomes.
Key Differences in HRM Practices Across Markets
There are two key ways that HRM practices vary across markets:
Differences in Institutional Support: Rules and regulations for HRM vary a lot from country to country, shaping everything from hiring processes to employee benefits. In places like the UAE, where institutions are well-developed, MNCs often find it easier to apply HR policies that align with global standards. However, in areas with less formal regulatory support, such as parts of India, HR practices are more likely to rely on informal networks and locally adapted customs than strict policies and guidelines.
The Role of Culture in HRM: Cultural values deeply influence how HRM practices are viewed and implemented. For instance, performance reviews and rewards, which often reflect Western standards focused on individual achievement, can be understood differently in cultures where communal and family responsibilities play a large part in work life. In countries with strong collectivist values, for example, teamwork and loyalty may matter more than individual performance, shaping how rewards and recognition are given.
Implications for Policy and Practice in Cross-Border HRM
When it comes to managing human resources across borders, it is crucial for policymakers to create HR guidelines that balance local needs with international standards. Here are some key recommendations to consider:
Encourage Flexible HR Policies: MNCs should adopt flexible HRM frameworks tailored to local contexts. Instead of applying the same performance metrics everywhere, HRM leaders might develop specific indicators that resonate with local values and motivational factors.
Promote Cross-Cultural Competency: Training programs for HRM professionals should emphasize cultural understanding. This equips them to appreciate and respect local norms while effectively implementing HR practices. This competency is particularly important in areas where informal networks, like “wasta” in the Middle East or “guanxi” in China, play a significant role.
Foster Institutional Collaboration: By working closely with local governments and organizations, MNCs can gain valuable insights into regional HRM requirements. These partnerships can help businesses navigate local regulations and build mutually beneficial relationships with authorities.
Design Culturally Adaptive Survey Instruments: HR surveys need to be culturally adapted when collecting data from different countries. For instance, in linguistically diverse areas, translating survey questions to capture culturally specific meanings can enhance accuracy and reliability. This approach allows MNCs to gather high-quality data that reflects local HR practices and employee needs.
Table 1 below provides an overview of the common problems (and the respective solutions) that HRM professionals and researchers face when applying survey instruments in different contexts.
Conclusion
In our increasingly interconnected world, finding success in business means more than just copying and pasting successful HR practices from one place to another. It is vital to truly understand and connect with the local cultures and norms that shape how people live, share, create and work. By valuing diversity and developing HR practices that can be adapted to different contexts, MNCs can significantly enhance employee engagement and overall organizational performance, especially in emerging markets.
For policymakers, these insights stress the need for flexible and context-specific HR policies. Such policies are key to sustaining growth in rapidly changing regions, ensuring that organizations succeed while respecting and integrating local traditions and practices.
[i] Darwish, T. K., Singh, S., Batsakis, G., & Potočnik, K. (2024). Cross‐country analysis of HRM parameters in emerging markets: an assessment of measurement invariance. British Journal of Management, 35(2), 692-705.
[ii] Zahra, S. A. (2011). Doing research in the (new) Middle East: Sailing with the wind. Academy of Management Perspectives, 25(4), 6-21.