International Human Resources Management - The Turkey Example
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International Human Resources Management - The Turkey Example Document Transcript

  • 1. Human Resources Management The Turkey Example Word Count: 2290 Prepared By: Mustafa Mert DIKMEN Module Leader: Dr. David ALLSOP Module Code: MBSP 0181Human resource management (HRM) is defined as a strategic and coherent approach to themanagement of an organisation’s most valued assets – the people working there who individually and Page 1
  • 2. collectively contribute to the achievement of its objectives. Since international HRM involves not onlythe management of expatriates but the worldwide management of people (Armstrong, 2006),multinational companies will need to manage the challenges of global efficiency and multinationalflexibility (Barlett and Goshal, 1991). Organisations will be largely contingent on the environmentalfactors affecting them. Therefore organisations need to achieve fit between what the organisation isand wants to become which can be identified as its strategy, culture, goals, technology, the people itemploys and its external environment, and what the organisation does which are its structure,processes, procedure and practices it puts into effect (Armstrong, 2006). The purpose of this essay isto critically examine the distinguishing features of HRM in Turkey by taking into consideration theabove statements. In Turkey’s dynamic economy, HRM is recognized as one of the most importanttools in maintaining organizational effectiveness and competitiveness (Aycan, 2001). HRM is adeveloping field in Turkey; however, some theoretical studies indicate that the understanding of HRMis weak in Turkish companies (Buyukkuslu, 1998). Therefore it can be said that the research on theevolution of HRM in Turkey is not sufficient.Research (Sonja and Phillips, 2004) assumes that managers in today’s multicultural global businesscommunity frequently encounter cultural differences, which can interfere with management practicesin organizations. Managers implement HRM practices based on their assumptions on the nature ofboth the task and the employees. However, these assumptions are shaped by different environmentalforces (Aycan et al, 2000). Therefore it is important for organisations to take into consideration thecultural aspects as an external factor affecting their HR practices. Turkey has a very diverse culturewhich is a blend of eastern and western culture and traditions. This clearly necessitates exclusive HRpractices which are evaluated in the emic environment in Turkey.Geert Hofstede (1991) has developed cultural value dimensions to compare cultures in differentcountries. According to Hofstede’s research, the Individualism index (which is the degree to which theties between individuals are loose or remain integrated into groups) of Turkey is 37. This low scoreindicates a great sense of unity and cohesion and may be thought of as an impact of the Asianinfluence in Turkey. The fact that many businesses are still family owned (Kwintessential, 2011)supports Hofstede’s cultural analysis in this sense. In addition, family loyalty is a vital aspect ofTurkish society and has a major impact on Turkish business practices (Communicaid, 2005). Also,bearing in mind that %99.8 of Turkey’s population is Muslim, it can be said that Islam is acontributing factor of unity in the Turkish culture. The PDI (power distance index) of Turkey has beenidentified as 67. According to Hofstede (1991), power distance is the extent to which the lesspowerful members of organisations and institutions accept and expect that power is distributedunequally. The number 67 is considered to be a high degree of power distance which reflects aperceived and accepted a social distance in Turkey. For example, age is a symbol of wisdom anddemands respect in all aspects of society in Turkey and senior members of a Turkish company usuallyhas very little opportunity to contact the executive officers which generally consists of elders. Inaddition, Turkey’s strong association with religion is also considered to be one of the reasons of thehigh PDI value (DePauw, 2011). Another index of Hofstede’s is the masculinity index (MAS) whichrefers to the distribution of emotional roles between genders. In Turkey, the MAS stands at 45 whichindicates that the Turkish society is a more caring society and favours maintaining long termrelationships with others. The Turks hospitable culture can be an example of the feminine side of theirculture. Turks also has a high UAI (85) which is common for all countries with Islamic majority. AsHofstede puts it, high UAI (Uncertainty Avoidance Index) countries do not deal well with uncertainsituations. For example, engaging in a business partnership with a Turkish businessman generallyrequires tying up a long-term relationship. In addition to Hofstede’s cultural dimensions there is one Page 2
  • 3. more dimension which is paternalism (Redding, Norman & Schlander, 1994). Paternalism describespeople in authority such as the managers or presidents of an organisation undertaking the role ofparents. According to the paternalistic behaviour, the one assuming the role of a parent considersproviding support and protection to others under their care as obligatory. Based on research (Aycan etal, 2000), Turkey is found to be highly paternalistic. Consequently in HRM practices, Turkey scoredhigh on job enrichment but low on performance-reward contingency. This supports the research doneon paternalistic culture in Turkey. Overall, the cultural dimensions in Turkey shows that the culture isa complete blend of western and eastern culture and implementing common HR practices may not bebeneficial for organisations operating in Turkey.Organizations are shaped by the institutional environment which surrounds them and adopt certainfeatures because of pressure from outside forces, including legal compulsion, gaining legitimacy,conforming to institutionalized rules, etc. (Chow, 2004). The human factor is considered to be anorganisations most valuable asset. Therefore, educational institutions in one country, plays a vital rolein the management of human resources. Yet in Turkey, the number of graduate programs offered inHRM and related fields are very low. Most of the universities in Turkey do not want to spend theirresources on the research of HRM. Companies prefer to get quick solutions by outsourcing theirknow-how and turn to globally recognized HR practices. However, these practices are usually notsuitable considering Turkey’s cultural context. Even though the overall education attainment level iscurrently showing an increasing trend, this is only a recent development. The same attainment levelsof the working population show that %60 of the labour force is composed of basic education graduatesor people who dropped out from basic education (ETF, 2006). Also, public authorities in Turkeyshows efforts to increase participation in vocational training but this still remains far from being anattractive option for secondary education students.Another legal aspect affecting the HR practices in Turkey is the public and private pension systems.SSK (Social Security Institution), ES (Retirement Fund) and BK (Self Employed) are the major publicpension institutions in Turkey. Prior to 1999 the pension system of Turkey was encountering hugefinancial difficulties, not because of the aging population like in most European countries at that timebut because of the extremely low minimum retirement ages. Pension regulations allowed the femaleand male workers to retire at the age of 38 and 43 respectively. A reform was needed in the pensionsystem and the reform took place in 1999. The entitlement age was set to 63/65 at first but then due tothe pressure from trade unions, these numbers were reduced to 58/60 for female and male workers(TÜSİAD, 2004). However, the real revolution was the private pension system which was constitutedin 2002. Implementation of the private pension system was a major milestone in the improvement ofthe public social security system, and hence a step towards rectifying the gap in public finance.(Privatewaterhousecoopers, 2003). Today, the total number of people who are in the private pensionsystem is over 2 million (TodaysZaman, 2010). The increasing number of private pension contractshas proved retirement plans of employees as an important matter for HRM. Corporate retirement plansnot only improve retention, but helps foster trust among employees and allows them to focus on theirwork (Matsuura, 2007).The minimum wage law is also an important environmental factor that organisations need to be awareof. The minimum wage in Turkey is currently 630 TL which is equivalent to around £250. Accordingto Bloomberg HT (2011), the poverty line was set to 1510 TL in February. This means that theminimum wage is very much under the poverty line. These figures are slowing down the employmentgrowth in Turkey. Page 3
  • 4. More importantly, discrimination issues which are one of the biggest issues in HRM are stillintensively in effect in Turkey. Most of the EU countries regulate different areas of discrimination;however, Turkey has only one law for these and there is no independent agency to monitor thediscrimination complaints (Sesen, 2006). The need for making detailed regulations is exponentiallyincreasing as people are being subject to discriminations of age, gender, wage, disability, etc. Incomparison to the Western countries, despite the fact that the percentage of young generation is higherin Turkey, the average ages of employees in the corporations tend to range close to 40’s (Mujtaba etal, 2004). Because security of the jobs of older employees in Turkey, the younger candidates havelittle opportunity to prove themselves useful. Even if they get an opportunity to find a place in theworkforce, they have trouble applying their fresh ideas into the organisation. This not only causesyoungsters to lose their hope of getting a decent job but cause migration of the young workforce. Agediscrimination is not the only discrimination the Turkish workforce is caused to experience. Wagediscriminations and occupational gender segregations are important issues in the Turkish labourmarket. Especially woman experience some difficulties such as low levels of wage compared to menand less level of chance given to woman in the management posts.External factors such as institutional and cultural features of an environment, determines the humanresources practices of organisations. However, this has led to vast variations of HRM practices amongorganisations in Turkey. The main functions of HR departments in Turkey are staffing, wage andcompensation determination, training and development, health-related issues, performance evaluation,transfers and promotions, catering services, transportation services, job security and career planning(Aycan, 2001). Most of the Turkish organisations fail to successfully implement the HR staffingfunction. Suggestion from employees or other contacts are still the most popular recruitment channelin Turkish organisations. This is perhaps the reflection of the collectivist culture in Turkey. Also, thereliance on one-on-one interviews as a method of selection can be seen as another aspect of thecollectivistic nature. The usage of objective and standard tests is very few, only by a couple oforganisations.Another challenging HR function is considered to be performance evaluation. The main reason for thisis, only one-third of the organisations assess performance on the basis of competencies andbehavioural criteria and the evaluators don’t receive the training necessary for performance evaluation.During the evaluation process of performances, a problem which can be seen in the majority ofTurkish organisations can be related to the high power distance culture. In high power distancecultures, the performance evaluation process is usually a one-way process where subordinates areevaluated only by their supervisors. Likewise, because of the collectivist culture of Turkey, peopletend to rate themselves lower than the rating they get from the others. Therefore, the self assessmentdoesn’t reveal consistent results. In addition giving and receiving performance feedback is a Turkeybecause people tend to get emotional, especially when they receive negative feedback (Aycan, 2001).It is recognized that if HRM is about investing in human capital from which a reasonable return isrequired, then it is proper to reward people differentially according to their contribution (Armstrong,2006). However, only 2/3 of the organisations in Turkey reported that they had a system that providedperformance-reward contingency (Andersen, 2000). According to Andersen, 60 percent of the white-collar and 27 percent of the blue-collar employees were being rewarded according to theirperformance. The rewards generally consisted of bonus and salary increase. Rewards like “employeeof the month” are not preferred for the reason that it would disrupt group harmony. The job evaluationprocess in Turkey is also quite interesting. The value of the job applied for, the salary offered to thecandidate is decided heavily through negotiations and the level of salary increase is determined by the Page 4
  • 5. inflation rate. Moreover, while the white-collar employees in Turkey receive common benefits whencompared to non-paternalistic cultures, the blue collar employees receive benefits such as pocketmoney for holidays and contribution to the educational expenses of their children.Perhaps one of the most distinguishing features of HRM practices in Turkey is the career managementand planning function of the organisations. Organisations act like career consultants because of theeducation system in Turkey where students are accepted to universities through a national universityentrance exam and they are offered a limited number of discipline and university choices. This leads toan incompatibility between the employee’s ability and his/her occupation. According to Andersen(2000), 58 percent of the organisations operating in Turkey had career management systems in 71percent of these organisations fulfilled the replacement needs within.The general features of HRM are considerably distinguishing in Turkey when compared to othercountries, especially the highly developed ones. One of the most important environmental factors thataffect HRM in Turkey is the unique culture it hosts. Turkey is considered to have a collectivist,paternalist and feminine culture with high power distance and uncertainty avoidance which is a mixedculture of both the west and the east; therefore, the HRM practices should be in accordance with thecurrent circumstances. The need for tailored HRM practices shows itself once again when the externalfactors such as legal and educational institutions surrounding the organisations are analysed. Factsshow that most of the organisations which are evaluating the external circumstances are using uniquetechniques to execute HR practices. However, the appropriateness of these practices is stillindeterminable as the research on the evolution of HRM in Turkey is still inadequate.References and Bibliography Page 5
  • 6. Aycan, Z. (2001) “Human Resource Management in Turkey-Current Issues and Future Challenges”,International Journal Of Manpower, Vol. 22 No. 3, pp. 252-60.Aycan, Z., Kanungo, R.N., Mendonca, M., Yu, K., Deller, J., Stahl, G. and Khursid, A. (2000),``Impact of culture on human resource management practices: a ten-country comparison’’,AppliedPsychology: An International Review, Vol. 49 No. 1, pp. 192-220Aycan, Z., Kanungo, R.N., Sinha, J.B.P. (1999). Organizational Culture and Human ResourceManagement Practices: The Model of Culture Fit. Journal of Cross-Cultural Psychology [online].30:501, p.501-526. Available from: http://jcc.sagepub.com/content/30/4/501 , [Accessed 27 March2011 ].Arthur Andersen (2000), 2001’e Dogru Insan Kaynaklari Arastirmasi (Human Resource ManagementResearch towards 2001), Sabah Yayincilik, Istanbul.Armstrong, M (2006) “A Handbook of Human Resource Management Practice”, 10th Edition,London, Kogan page limited.Aktug, R. (2010). Lehigh University [online]. Available from:http://www.lehigh.edu/~rea204/ea_paper4.pdf [Accessed 29 March 2011].Barlett, C A and Ghoshal, S (1991) Managing Across Borders: The transnational solution, LondonBusiness School, LondonBayraktaroğlu, S. and Ozdemir, Y. (2007) “İnsan Kaynaklarında Yaşanan Dönüşümler”. İçinde Kurtve Bayraktaroğlu (Der.) Türkiye’de İşletmecilikte Yeni Perspektifler, İstanbul.Bloomberg HT [online]. (2011). Yoksulluk sınırı 1510, 47 TL oldu. Available from:http://www.bloomberght.com/turkiye-ekonomisi/haber/867019-yoksulluk-siniri-1510-47-tl-oldu[Accessed 29 March 2011].Buyukuslu, A. R. (1998), “Türkiye’de İnsan Kaynakları Yönetimi ve Gelişimine Kritik BirYaklaşım”, MESS Mercek, Türkiye Metal Sanayicileri Sendikası, pp. 11-15Communicade [online]. (2005) Available from:http://www.communicaid.com/pdf/doingbusiness/Doing Business in Turkey.pdf [Accessed 28 March2011].DePauw [online]. (2011) Available from:http://academic.depauw.edu/mkfinney_web/teaching/Com227/culturalPortfolios/Turkey/Typologies.htm [Accessed 27 March 2011].ETF [online]. (2006) Available from:http://www.etf.europa.eu/pubmgmt.nsf/(getAttachment)/1B3803887FE4C350C12571FF00453AD9/$File/NOTE6UBGRL.pdf [Accessed 27 March 2011].Hofstede, G. (1991). Cultures and organizations. London: McGraw-HillKwintessential [online]. (2011) Available from: http://www.kwintessential.co.uk/etiquette/doing-business-turkey.html [Accessed 27 March 2011]. Page 6
  • 7. Mujtaba, B., Hinds, R., Oskal, C. (2004). Cultural Paradigms Of Age Discrimination And UnearnedPrivileges. Journal of Business [online]. 2:12, p.31-44. Available from: http://www.cluteinstitute-onlinejournals.com/PDFs/2004124.pdf [Accessed 29 March 2011].Pricewaterhousecoopers [online]. (2003) Available from: http://www.pwc.com/en_TR/tr/assets/ins-sol/publ/privatepension.pdf [Accessed 28 March 2011].Redding, S. G., Norman, A.,&Schlander, A. (1994). The nature of individual attachment to theory: Areview of East Asian variations. In H. C. Triandis, M. D. Dunnett, & L. M. Hough (Eds.), Handbookof industrial and organizational psychology (Vol. 4, pp. 674-688). Palo Alto, CA: ConsultingPsychologists Press.Sesen, E. [online] (2006). Equal Employment Opportunities in The Adaptation Process of Turkey toEU. In: ECPR 3rd Pan-European Conference, 21-23 September 2006, Bilgi University, Istanbul,Turkey. pp.1-11. Available from: http://www.jhubc.it/ecpr-istanbul/virtualpaperroom/057.pdf[Accessed 29 March 2011].Tamie Matsuura (2007). NLI-Research [online]. Available from: http://www.nli-research.co.jp/english/socioeconomics/2006/li060807.pdf [Accessed 28 March 2011].TodaysZaman[online] (2010). Turkey’s private pension system witnesses high growth. Available from:http://www.todayszaman.com/news-225982-turkeys-private-pension-system-witnesses-high-growth.html [Accessed 29 March 2011].TÜSİAD [online]. (2004) Available from: http://www.tusiad.us/Content/uploaded/TURKISH-PENSION-SYSTEM-EXECUTIVE SUMMARY.PDF [Accessed 28 March 2011]. Page 7