Why HR policies should be tailored to different cultures

“Make sure your leaders are cross-culturally competent.”  That is what the audience, mostly Regional HR Heads and HR managers, heard at the 3^rd Annual Global Talent Mobility Congress on March 18 and 19 in Singapore.  The speaker was a Regional HR Manager of a US multinational company, with 8 years’ experience in Singapore.  He advised that multinational companies should decide on their ‘non-negotiables’ when it comes to HR policies and then localize what they can to get the best results from their employees and leaders.   

Improve Job Satisfaction

A recently released study, Cultural Impact of Human Resources Practices on Job Satisfaction, published in the latest edition of Cross Cultural Management, makes the case that following this advice will also lead to greater job satisfaction for employees.  Many previous studies have demonstrated that human resource management practices can have a positive relationship on organizational performance, but this research looked at how cross-cultural dimensions play a role in job satisfaction when looking at human resources policies. 

The study used survey data from 70,000 employees of three large multinational companies that had physical locations in each of the four global regions studied: Asia, Latin America, Europe and North America.  The research aggregated a regional cultural score based on the answers provided for each country in that region.  In that way, it took into account cultural differences among countries in each region. 

This study corroborates previous research that has shown that different HR practices are valued differently in different cultures.  And while extrinsic and intrinsic rewards are both important, their actual structure must be considered in the cultural context. 

Differentiate Recognition Programs

Regardless of culture, the most significant impact on job satisfaction was accomplishment and recognition.  Employees want to feel that they are performing their job well and they want to be recognized by their managers for having done a good job.  How they might like to be recognized by their management might differ, though, based on culture. 

In more collectivist cultures, such as you tend to find in Asia, connectivity to others is important so managerial praise and social rewards are more important.  In Asia, teamwork is also related to job satisfaction because people value working together as a team.  In more individualistic cultures, such as you find in North America, competition and being recognized for individual performance can better motivate employees.  These types of incentives would backfire in most parts of Asia where competitiveness is not as valued. 

The Need for Work-Life Balance

Another HR policy area was work-life balance.  Interestingly, these policies were much more important to job satisfaction in North America because work and home are seen as more separate.  In collectivist cultures, like Asia, work is seen as contributing to family life, so there is not the same sense of guilt for working women.  Therefore, there is not as great a perceived need to balance the two. 

These are just a few of the areas that were looked at in this study and the ones that dealt most directly with Asia.  Of course, it’s important to note that while there can be regional similarities, there are differences between country cultures, something that managers should be aware of. 

Beware of the ‘cookie-cutter’ approach

Multinational companies tend to be divided regionally, but many have a central HR organization that determine central HR policies and practices, as well as development programs. These policies and programs are often not tailored to regions, or when they are, the differences between countries’ cultures are not taken into account.

As the MNC Regional Manager mentioned in the first paragraph personally discovered, managers must recognize that their own culture and the policies that work well in their own culture may not be successful if directly transferred to another culture, and  therefore a more ‘culturally tailored’ approach may be necessary for both HR policies and practices.

Andreassi. (2014). Cultural Impact of Human Resources Practices on Job Satisfaction. Cross Cultural Management, 55-77.