Human resource management practices and diversity management in German and Indian companies - a comparative analysis

Human resource management practices and diversity management in German and Indian companies - a comparative analysis

[Abstract]: To sustain global growth and competitiveness, large corporations as well as medium sized manufacturing companies from the Western world expand their operations to emerging industrial economies in Asia and elsewhere. India, although geographically far and culturally complex, is becoming more and more a fulcrum of business expansion for German enterprises because of the abundance of skilled and qualified human resources in the sub continent. The contributions of the people in the German and Indian organisations are certainly determinant factors for successful entrepreneurship. Hence understanding the impacts of cultural affiliations of people working in these different environments and human resource management become important to adapt existing or develop future oriented HRM models to foster increasing multiculturalism. Moreover, the fact that cross-cultural research studies involving German and Indian organisations are rare makes this research a meaningful endeavour.

With this background, the research focuses on the HRM practices and diversity climate in Indian and German organisations in the manufacturing industries. The purpose of this study is to explore the differences of HRM and diversity management concepts in these organisations and understand their implications. As a result, the research question formulated was:

What are the HRM practices and diversity management practices in German and Indian manufacturing companies and how do they differ?

This research question poses a number of research issues to be investigated. In summary, besides demographic differences, research issues concerning four HRM practices (Hiring, performance appraisals, pay or compensation and training and development), cultural differences that could have impact on these HRM practices, the respective diversity climates and the eventual relationship between HRM practices and diversity climates in the sampled companies were examined. Both quantitative and qualitative research techniques were adopted for examining these research issues while the study as such was conducted under the post positivism paradigm, a methodology widely used in management research.

Perceptions regarding the aforementioned research issues of 64 German managers and 77 Indian managers employed in manufacturing companies, most of them in the automobile industry were sought using two questionnaires adapted for this study and tested in previous research studies. Although, a priori, India and Germany are two distinct nations in terms of cultural and several macro economic dimensions, this research formulates a null hypothesis in terms of the perceptual differences among German and Indian managers. Conclusions and interpretations are based on both quantitative and descriptive analysis of mean scores whereas hypothesis testing was undertaken using Chi-Square calculations within the cross-tab functions of the SPSS. For understanding the relationship between HRM practices and diversity climates non parametric test of correlation using Kendall’s tau –b was conducted.

The results of the quantitative analysis show no significant differences of perceptions among the two manager clusters and thus suggest, in general, the acceptance of the null hypothesis concerning all four HRM practices. Even in case of cultural dimensions, the differences found by other researchers such as Hofstede (1991) could not be confirmed with the method used in the study. In addition, the correlation analysis establishes links between HRM practices and diversity climates and suggests the rejection of null hypothesis. However, several trends implying perceptual differences could be found and these are described in the respective sections.

The research contributes to the body of knowledge in many ways. While it confirms certain debates in contemporary research, it highlights some contradicting aspects in a multicultural business context. The results also highlight emerging issues in international HRM and diversity management and thus stimulate future research. Finally, some strategic recommendations are presented to support German and Indian organisations to consolidate their growth and prosperity on their transitional path to true multicultural global organisations. The extended knowledge about HRM practices and diversity climates in German and Indian companies is useful for further studies on the relationship between HRM and diversity management and the performance levels of these companies.