Germany has a population of 84 million and Berlin is the capital city. It has a highly skilled workforce and is known for its strong economy and innovation. Some key aspects of managing human resources in Germany include strong vocational training programs, works councils for employee representation, strict protections for things like parental leave and working hours, and adapting performance management and compensation to local customs. German culture values individualism, punctuality, and privacy.

1. IHRM PRACTICES IN
GERMANY

2. Germany Overview
• Germany Population – 84 Million (2022)
Berlin (capital) - 3.7 Million
• Currency – Euro
• Official Language – German
• States – 16
• President – Frank-walter Steinmeier
• Chancellor – Olaf Scholz
• Founding Member of the ECC (European Economic
Community)
• After the United States, Germany is the second most
popular country for migration in the world.

3. 10 Reasons for choosing Germany
1. Leading Economy – 4th Largest Economy in the world
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

4. Features of
German
Business
Environment
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 organization
1.Economic Growth
2.Stable Economic Environment
3.Business Landscape
4.Foreign direct investment
5.Infrastructure
6.Workforce
7.Innovative power
8.Trade fairs

5. IHRM Activities
Human Resource
Planning
Recruitment and
Selection
Training and
Development
Performance
Management
Remuneration Repatriation
Employee
Relation

6. Human Resource Planning (HRP)
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 and vice-versa.
6. Dealing with multiple business units while attempting to
achieve globally and regionally focused strategies.

7. Recruitment
and Selection
Ethnocentric
Key management positions filled by parent-country nationals
Polycentric
Host country nationals manage subsidiaries and parent country nationals
hold key headquarter positions
Regio centric
Hiring and promoting employees on the basis of the specific regional
context of the subsidiary
Geocentric
Seek best people, regardless of nationality, Best suited to Global and
Transnational businesses

8. Employee selection factors in Germany

9. Training and Development
Strong investment in vocational training at start of career – shift
toward lifelong learning recent trend.
Provision of training decreases with age of employee due to youth -centric HR
practices and anticipated early retirement.
Training industry and role specific are associated with technical performance,
productivity and efficiency.

10. Compensation
Headquartered salary system:
Headquartered PayScale 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 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.

11. Bonus – Giving a bonus on a yearly basis. Bonus schemes can encourage business objectives.
Absence policy - Making absence policy in such a way that both the party can make profit from
absenteeism.
Pension plans – There is no legal obligation to provide for an additional company pension scheme.
Termination of employment - If an employee resigns, the law requires them to give four weeks' notice.
Paying overtime - Ensure proper extra payments for overtime.
No overall minimum wage defined by law = minimum hourly wage.
Maximum working day of 8 hours or 10 hours.
18 working days of annual leave.
Employee Benefits

12. Six weeks leave at full pay prior to the child's birth and eight weeks at full
pay afterwards.
In the case of multiple birth, 12 weeks paid leave is allowed. Either parent in
both cases is then allowed up to three years of unpaid leave to stay at home
with the child.

13. Standard
work
schedule
The average working week in Germany is around 35-40 hours, one of the lowest in Europe.
The defined working week is Monday to Saturday, whilst the standard working week in
Germany for most industries is from Monday to Friday.
Typical office hours are 9-5 Monday-Thursday and 9-4 Monday-Friday. According to the
German labor law, working hours cannot exceed eight hours in one day or 48 hours in one
week.
Salary The average German salary is €3,770 per month (around €45,000 per year) for a full-
time, permanent role. The salary for a job paid at minimum wage, on a full-time basis is
€1,500 per month.

15. Some facts
on IHRM in
Germany
The Germany 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 for
an appraisal
system, German workers
are resentful of
feedback.

16. 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 type of company.
• Statutory works council systems based
on legislation or widely
applicable collective agreements exist
in 12 EU members (primary is
the German model of the Betriebs rat)
Tax Equalization
• Expatriates may face two tax bills for
the same pay, one from the host
country and 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 case where additional taxes are
incurred by the employee, the
employer will usually reimburse the
employee for this extra tax burden.

17. German
Culture
Key Concept
and Values
• Germans are strongly individualistic.
• Germans are very private.
• Germans value their time. As
businessmen they work hard.
• Shake hands at both the beginning and
end of a meeting.
• Punctuality is necessity.
• Appointments are mandatory and
should be made 1 to 2 weeks in advance.
(The letter should be written in German)
• Its considered bad etiquette to be late (or)
too early!
It shows disrespect for their time.

18. Languages
• The Official language of Germany is German, with over 95
percent of the country speaking German as their first
language.
The four most spoken languages in Germany are
1. English
56% of the population speak English
2. French
15% of the population speak French.
3. Russian
5% of the population speak Russian.
4. Turkish
1.8% of the population speak Turkish.
• Other languages spoken in the country are Sorbian,
Romani, Danish and Frisian.

20. Largest
Employers
1. Deutsche Post, Germany – 502,545
2. Siemens Group, Germany – 461,000
3. Daimler Chrysler, Germany – 382,724
4. Volkswagen Group, Germany – 344,902
5. Metro, AG – 204,076
6. Allianz Worldwide – 177,625
7. BMW AG- 105,798
8. Bayer Group – 93,700
9. Deutsche Lufthansa – 92,303
10. RWE Group – 85,928