For the company to maintain a competitive advantage in the market, it must invest in the training and development of its employees. Development of human resources puts emphasis on training employees for both their current jobs and developing skills for future responsibilities. However, the training and development would be effective if supplemented with proper human resource management system. This has been the case for companies operating in Germany and Japan. This paper will discuss how the systems of human resource management and training have continued to provide Germany and Japan with sources of competitive edge over other major national economies such as the United Kingdom, America, and China. Germany and Japan, human resource management systems, seems to go in line with convergent theory whereas the United Kingdom, America, and China are still practicing divergent theory despite their efforts of moving towards convergent perspective.
In the event of an economic crisis, German companies do not lay off their workers, but instead, they agree with employees to reduce their working time to few hours or zero hours. Employees whom their working hours are reduced to zero during the economic recession period are encouraged to undergo training and development with an agreement to be receiving 61 percent to 68 percent of the previous net salary. Similarly, Japan focuses on flexible employment structures. Japan operates on the philosophy that human resources development is the foundation of nation success. Through this belief, Japan has been able to provide labor enriched with qualified personnel. However, for the United Kingdom, America and China is a different case as discussed below;
The above discussion has put it clear that the relationship between the management and the employees among the German and Japanese firms is the favorable one. For example, the German automakers, Volkswagen, are highly recommended for exhibiting good employment relations. The company uses the approach of reducing the working hours of each employee instead of laying some off. Volkswagen represents many of the German companies that adapt to this strategy to overcome the economic crisis. This is the opposite of the United States legal framework that does not emphasize the aspect of the national economy. Instead, it focuses on ensuring equity in employment. On other perspective, China employment relations comprises of high impaired employee rights, harsh working conditions, high employee turnover, migrant labor and underdeveloped employment laws. Even though, China government has introduced the labor contract system as practiced in Germany and Japan the employee relations in the country have not improved yet because of lack of effective implementation strategies.
Studies indicate that the success of the Japanese economic development can be attributed to its uniqueness of industrial relations system. This has been as a result of approaches that are focused towards improving the welfare of the employees. Similarly, according to EurWORK (2013) German industrial relations system has been voted as the best for dealing with the global economic crisis. This was evidenced in 2008 during global economic recession. The German’s trade unions, employer associations, work councils and company managements of the most affected industries worked together to overcome the phenomenon. German and Japanese industrial relations have been good for the economy. However, this is a different case for other nations. For example, in the United Sates, several stakeholders of the industrial relations do not work together to address the matters of national economy. Over the years there has been a decline of trade unions memberships due to lack of the company's management support. Similarly, the same labor relation issues are experienced in China. China’s labor rights have not met international standards yet. Employees are not allowed to elect their trade union representatives freely. Likewise, the United Kingdom industrial relations have the same characteristics as China and America. The majority of the workers registered with trade unions falls in the public sector compared to the private sector. Fulton (2016) noted that only 29 percent of the United Kingdom workers are registered with trade unions. Additionally, the collective bargaining does not cut across the whole Kingdom’s economy.
Skills Training, Productivity, and Education
In the discussion of the key elements, it is quite clear that Japanese labor market is endowed with highly qualified personnel. Similarly, German companies decision to avail an opportunity for the workers to undergo training and development provides the country with workers characterized with a right set of skills for production. According to the study conducted by Cech, Yao, Samolejova & Wicher (2016) among 67 Chinese manufacturing firms, it found that China does not put more weight on employee training and development. China views the human resource management main task as developing and implementing policies related to the company's human capital. However, some companies consider the importance of training and development and have established different training plans. American companies such as Amazon, SAS, and Bonobos appreciates the importance of training and development (Thottam, 2016). Therefore, the aspect of training and development is quite evident among the American Companies.
HR as a Strategy by Firms
Both German and Japanese firms use human resource as the investment. On the other hand, the United Kingdom, America, and China view human resource as the institutional environment. The three countries have continued to practice the traditional approaches when dealing with human capital.
From the above discussion of comparing German and Japanese human resource management systems with the United Kingdom, America and China it is clear that both German and Japanese practices help in developing national economies. German practices have enabled Germany to overcome several economic crises. Similarly, Japan human resource practices have produced high qualified employees’ hence high demand of workers in the Japanese economy. This is in contrast with the United Kingdom, America, and China
German and Japanese human resource practices are good for the national economy. These two nations can survive the economic downturns with ease. However, this is in contrast to some of the major national economies across the globe. The United Kingdom, America, and China are still practicing divergent theory despite the efforts of moving towards convergent perspective which has worked well for Germany and Japan.