Comparative employment relations involve conducting systematic cross-analysis of employment strategies across different nations. The concept has arisen due to increased globalization and increased interconnectedness across countries. Globalization has led to intensified calls for products and service uniformity across the globe. It is through globalization that countries have benefited from economies of scale, as well as standardization efforts. The determination of differences and similarities is based on theory and generalization (Hyman, 2009). However, there are several theoretical and methodological challenges that arise. The first challenge rises from the inability to find a comparative strategy that does not lead to uncertainties and contention. Most methods of performing comparative employment relations involve the alteration of different variables. Unfortunately, the variables that are altered are different from one country to another. It is, therefore, impossible to get a conclusive result. Additionally, the differences in interpretation of terms such as comparative can also result to the initiation of different analysis strategies. Whereas the definition of the term comparison may mean the analysis of similarities, it can also mean the analysis of glaring patterns about an issue e.g. employment relations. The manipulation of different variable yields different results.
Koen (2005) highlights theories such as the contingency theory. The contingency theory proposes that an organization has the same basic structure irrespective of its location. The contingency argues that the basic patterns of the organization include the consideration of factors such as control, coordination and communication. The contingency theory may be ideal for performing a comparison of employment relations across countries. However, the contingency is too general and thus fails to demonstrate the consistency and strength of correlation between two sets of variables. The theory does not consider variable such as size, technology and structural features of the organization. The contingency theory also focuses primarily on the formal structure and ignores the existence of the informal structure.
The second challenge involves making comparison on nations that have different employment relations strategies. It is tasking to make a comparison on nations that have different employment relations structures. According got Hyman (2009); comparative research involves a focus on cases that are similar in a large number of characteristics. When making a comparative analysis of different countries, it is unlikely that two countries can have distinctively unique characteristics. It is also difficult for an analyst to determine the variable and the constant when conducting a comparative analysis. Additionally, making a comparison that involves different nations would be difficult because of the meaning of language. Terms such as social relations and benchmarking cannot be assumed to carry the same meaning across different nations. Whereas some analysts argue that performing a comparative analysis after conducting some typification, the process of typification is quite tedious and may result to a problem of oversimplification. Koen (2005) also highlights the use of the cultural approach when making comparison of employment relations. The cultural approach focuses on the behavior of people within the organization rather than the structure of the organization. Organizational analysis of culture is based on the individual and cultural level. Koen (2005) also discusses the institutional approach of comparative institutional analysis. Comparative institutional analysis can be integrated into an analysis on employee relations because it focuses on the comparison that highlights differences that cannot be perceived differences in goals, context, environments and strategies. The differences that are analyzed using the comparative institutional analysis focus on the differences that are arise despite the glaring similarities of companies. The method of comparative analysis that an analysis uses is bound to yield different results. Different methods of analysis focus on different variables that provide different findings.
According to Hall & Soskice (2001), the varieties of capitalism approach are actor-centered with individuals, firms, and governments. The political economy is filled with multiple actors who strive to find favorable means to advance their interests. In a capitalist economy, however, firms are the center stage performers. Firms are the key agents of adjustments in the face of changes in technology or competition. Changes in the economic market alter the economic performance of the firm. Firms strive to establish their capacities for developing, producing and distributing commodities. Firms strive to improve their capacities so that they could establish strong relations with its employees, as well as external actors such as customers and shareholders. A firm’s ability to maintain strong external and internal relationships is difficult (Howell, 2005). In a hierarchical environment, for instance, firms may be forced to create contracts that bound actors towards similar targets. The relational capabilities of a firm can pose a serious coordination problem. Similarly, a firm may struggle to manage its operations if there are numerous external and internal actors. The varieties of capitalism approach emphasize on five main spheres that are ideal for improving employee relation. The first sphere is industrial relations which focus on the organization of employee wages, as well as the working conditions of employees. The sphere of industrial relations emphasizes on improving the working conditions employees; an essential element in national systems of employment, as well as HRM. The productivity level of employees is determined by factors such as their working environment, as well as their wages. An attractive wage motivates employees to remain focused on their respective duties. Ideal working conditions also boost the morale of employees, which subsequently increases their level of productivity. The second sphere focuses on vocational training and education. Employees are motivated to work in an environment where employers are not only focused productivity and results, but they also focus on the growth of their employees. According to Hall & Soskice (2001) firms need to secure a workforce that has suitable skills. Employers thus need to create opportunities for further training for its employees. Employees who receive on-the-job training, as well as off-work training are more productive and motivated than employees who are never taken through any vocational training. Employers should establish an environment where employees can work while at the same time grow. The third sphere is corporate governance that focuses on the organization’s ability to access funds and ensure investors of positive returns in their investments. HRM focuses mainly on employees needs hence issues related to the financial capabilities are covered under the national systems of employee relations. Firms must ascertain they have the financial capability to support their employees as agreed in the employment contract. The fourth sphere is the inter-firm relations where emphasis is on the formation of viable relationships with other companies e.g. suppliers and clients. A successful firm has an elaborate chain of other firms who they work together to attain a common goal i.e. satisfy the customer (Koen, 2005). The operations of a firm can only be successful if it can establish viable relations with other organizations. The last sphere focuses on the liberal market economies. The liberal market economy focuses on the coordination of firm activities through hierarchies and competitive market arrangements. The exchange of commodities is mandatory so that the actual business environment can be established.
Koen, C. (2005). Comparative international management. Mc Graw-Hill. Chapter 1: Introduction to the approaches to comparative international management
Hyman, R. (2009). How can we study industrial relations comparatively? Research paper
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