Similarities and Differences in

Human Resource Management

in the European Union
Lisbeth Claus

Executive Summary
This study explores similarities and differences in human resource management
(HRM) in the European Union (EU). Common factors in the development of
European HRM are the importance of consultation, the emergence of flexible work
patterns, the role of work and the employer in the life of employees, and the introduc-
tion of the Euro. National, company, and regional factors create divergence in
European HRM. National factors include societal hierarchy, different cultures and
mental models, societal structure, and language. Company factors include size of com-
panies, public versus private, and multinational or local. Regional factors differenti-
ate along north-south and east-west axes. The EU had relatively little impact on
HRM in terms of harmonization of labor and tax laws but had major impact on the
opening up of markets to foreign competition and privatization of public sector com-
panies. While cultural diversity remains strong, the influence of large multinational
companies may lead to more regional integration in the practice of HRM. European
HRM is much more comfortable operating in a polycentric mode than U.S. HRM,
which seeks universality and standardization. © 2003 Wiley Periodicals, Inc.

INTRODUCTION

T
here is a simplistic notion among U.S. HR executives that global companies
operating in Europe can deal with European Union (EU) countries as a region-
al entity. This notion has been reinforced by the growing economic and political
unification of Europe resulting in the free movement of capital, goods, and peo-
ple and ongoing harmonization of EU legislation. Some multinational compa-
nies assume that their EU subsidiaries can be managed from a regional
perspective through shared HR services and that corporate culture and stan-
Lisbeth Claus is an associate professor of global HR at the Atkinson Graduate School of
Management at Willamette University. She previously held faculty and administrative positions at
the Fisher Graduate School of International Business at the Monterey Institute of International
Studies and managerial positions with Safeway Inc. and Maritz Inc. She is president of the SHRM
Global Forum. Her research interests lie in international HR, cross-cultural management, global
leadership, global teamwork, and global corporate social impact. E-mail: lclaus@willamette.edu
Thunderbird International Business Review, Vol. 45(6) 729–755 • November–December 2003
© 2003 Wiley Periodicals, Inc. • Published online in Wiley InterScience (www.interscience.wiley.com).
729
DOI: 10.1002/tie.10100
 Lisbeth Claus

dardized HR practices can be imposed throughout their European

operations without major consequences. Chris Brewster (1994a,
1994b, 1995), a prolific academic writer on the subject, makes the
point that while there are substantial differences between the way
A theoretical or human resource management (HRM) is understood and opera-
practice HR tionalized in each country, Europe as a whole has a different
model developed approach to HRM than the United States.
in the cultural
context of one
Keeping in mind this tension between globalization/standardization
and localization/adaptation of HR practices as well as the existence
country should
of a distinct European regional approach, this article focuses on sim-
not indiscrimi-
ilarities and differences of HRM in the EU and explores whether or
nately be applied
not there is a European model of HRM leading to greater homo-
to another
geneity of HRM across the EU region.
country . . .

LITERATURE REVIEW

European authors have acknowledged that HRM originally devel-

oped in the United States (Brewster & Bournois, 1991; Brewster &
Hegewisch, 1994; Brewster & Larsen, 1992). After taking root in
the United States, it spread, first to other nations with cultural prox-
imity, then to more culturally distant countries (Clark & Mallory,
1996). The claim has been made that U.S. HR models have domi-
nated HRM research and practice worldwide (Brewster & Harris,
1999; Harris & Brewster, 1999). European writers (Albert, 1989;
Bournois, 1991; Conrad & Pieper, 1988; Gaugler, 1988; Guest,
1990; Hendry & Pettigrew, 1990; Legge, 1989) have been critical of
applying American HRM views to other countries, especially Europe.
Such criticism is entirely valid. A theoretical or practice HR model
developed in the cultural context of one country should not indis-
criminately be applied to another country without testing the cultur-
al biases of its assumptions.

While the hegemony of U.S. influence in HRM has been criticized,

there is also a particular fondness among some European HRM aca-
demic writers (at least those who publish in English) to compare and
contrast European with U.S. HRM (Brewster & Bournois, 1991;
Brewster & Hegewisch, 1994; Hegewisch and Brewster, 1993;
Pieper, 1990). Brewster and Bournois (1991) posed the following
question as a point of departure to justify such a comparison, “To
what extent is there sufficient similarity in Europe to require us to
question whether there may not be significant differences between

730 Thunderbird International Business Review • November–December 2003

 Similarities and Differences in Human Resource Management in the European Union

HRM in Europe as a whole and the United States of America?” (p.

34). The comparison points out that in Europe, HRM is less depen-
dent, companies have less autonomy and freedom of action, trade
unionism is more important, the social partners have more influence,
legal regulations are more important, and there is a stronger tradition “There are
of employee involvement. Brewster and Hegewisch (1994) push the identifiable
comparison between European and American HRM even further and differences
justify the existence of a European HRM model based on these dif- between the way
ferences. They conclude that, “There are identifiable differences
in which HRM is
between the way in which HRM is conducted in Europe and that of
conducted in
the United States, a difference which allows us to speak of a
Europe and that
European form of HRM . . .” (p. 5). Brewster and Bournois (1991)
of the United
also speak of two paradoxical trends that run through HRM in
States, a
Europe. On the one hand there are clear country differences that can
be understood and explained in the context of each national culture difference which
and its manifestations in history, laws, institutions, and employee allows us to
organizations. On the other hand, there is an identifiable difference speak of a
between the ways in which HRM is conducted in Europe versus the European form
United States (p. 47). of HRM . . .”

Brewster has made an important contribution in pioneering the

notion that there is a European HRM tradition distinct from others.
He must be credited with being the first to attempt to develop a
“European” model of HRM distinct from existing U.S. models. His
European HRM model locates organizational issues within sectorial
(organization size, structure, culture) and national influences. He
also spearheaded the development of a large body of empirical com-
parative HR research across Europe (Brewster, Hegewisch, &
Lockhart, 1991).

However, according to Clark and Mallory (1996), Brewster’s

European model has four main problems. First, talking about
European HRM is an example of reductionism that fails to take into
account the cultural diversity of the European nations. Second,
Brewster overestimates the level of autonomy enjoyed by HR man-
agers and organizations in the United States. Third, his model is
potentially culturally conditioned (as he uses the Anglo-American lit-
erature) and inherently ethnocentric (as he perpetuates the view that
American notions of HRM can be found to a greater or lesser degree
in other countries). Finally, Brewster’s most critical problem is that
he does not take into account divergent understandings in different
national settings. Responding to his critics, Brewster (1999) later
revised his position and shifted his viewpoint from a European HRM

Thunderbird International Business Review • November–December 2003 731

 Lisbeth Claus

model to the existence of “models” depending on the paradigm used.

This led him to consider a juxtaposition of a “universalistic”
paradigm to a “contextual” paradigm. The universal paradigm uses a
monothetic approach and tends toward acceptance of convergence
while the contextual paradigm is ideographic and seeks to understand
differences based on context.

Another crucial question that needs to be answered is whether one

can talk about Europe (i.e., speak of it in a universal manner), or a
clustering of various countries with similar characteristics, or
whether one must consider Europe as a set of highly diverse and
particularistic countries. The HRM literature is mixed regarding
this issue. Laurent (1986) pointed out that every culture has devel-
oped through its own history specific and unique insights into the
management of organizations and their human resources. Pieper
(1990) asserted that a single universal model of HRM does not
exist. Clark and Mallory (1996) questioned whether it is valid to
talk of a European notion or model of HRM given that the nations
of Europe do not share a common set of cultural characteristics.
They suggested using a polycentric approach in developing an alter-
native model for understanding European HRM. They argued that
the nature of HRM and the type of practices that will predominate
in a particular nation would be the result of three factors: the inter-
national institutional context, the national culture, and the nation-
al institutional context. Sparrow and Hiltrop (1994) opposed any
European model of HR and asserted that one can only speak of
“HRM in Europe” because of the marked differences in HR prac-
tices between European countries. They stress the role of four
major dimensions (cultural factors, institutional factors, differences
in business structure and system, and factors related to the roles and
competencies of HRM professionals), further divided into 23 fac-
tors, resulting in distinctive national patterns of European HRM.
A number of This HRM model is, so far, the most elaborate theoretical and con-
authors talk ceptual framework developed to compare national differences in
about Europe as HRM.
clusters of
countries with A number of authors (Brewster & Larsen, 1992, 2000; Clark &
similarities. Mallory, 1996; Filella, 1991) talk about Europe as clusters of coun-
tries with similarities. A problem with clustering countries is that dif-
ferent researchers use various criteria to cluster and come up with
different country configurations. Clark and Mallory (1996) suggest
that three factors account for the allocation of nations to particular
clusters: (1) geographic and cultural proximity, (2) language; and (3)

732 Thunderbird International Business Review • November–December 2003

 Similarities and Differences in Human Resource Management in the European Union

religious traditions. Other authors (Bures & Vloeberghs, 2000; Cazal

& Peretti, 1992; Clark & Pugh, 1999; Fenton-O’Creevy, 2001)
focus more on differences in European HRM than on similarities.

In spite of divergence among HRM practices throughout Europe, The most

there are also some signs of convergence as a result of globalization, important
the American influence, and the impact of the EU (Fenton- converging
O’Creevy, 2001). The most important converging factor is thought factor is thought
to be as a result of the EU. In recent years, the EU has been con-
to be as a result
structing a European “social model” of people management
of the EU.
through its European social policy and employment legislation
(Teague, 1994). Through its directives and recommendations, the
EU is streamlining HR practices related to health and safety, gender
equality, employee involvement in work council participation,
parental leave, etc. The European Social Fund plays a major role in
addressing asymmetries within the EU such as structural unemploy-
ment, youth unemployment, and socioeconomic disparity issues
(Matthews, 1997).

The literature review supports the duality put forward by Brewster

that, on the one hand, there are distinct differences in the way HRM
is viewed in the different European countries and, on the other
hand, there are clusters of similarities and a European identity that
makes HRM specific to the region. This has led to attempts at devel-
oping a European HRM model. The development of such a
European HRM model is attractive to facilitate the understanding of
the complex legal, cultural, and structural factors that determine the
practice of HR in Europe. The search for a European model is even
more attractive when one considers the growing structural, political,
and legislative unification trends of the EU and the importance of
European countries as business partners for countries worldwide. In
addition, a number of recent societal changes (such as the recession
of the early 1990s, the relatively high level of structural unemploy-
ment, the fall of the Berlin Wall, and the break up of the Soviet
Union) have affected Europe and the practice of HRM. Europe,
like other countries and continents, cannot ignore the people man-
agement pressures resulting from globalization and increased inter-
national competition. For Europe this is coupled with the burden
of its protective legislation and the aging of its demographic struc-
ture. All these factors make the search for similarities and differences
in European HRM a worthwhile endeavor that can facilitate inter-
national business ventures with European or multinational compa-
nies located in the EU.

Thunderbird International Business Review • November–December 2003 733

 Lisbeth Claus

CONCEPTUAL FRAMEWORK

Unfortunately, much of the current research on European HRM has

an ethnocentric bias, dominated by British, French, and/or German
Unfortunately, views and practices with the exception of a few researchers, who have
much of the used more polycentric or comparative approaches, and the labor rela-
current research tions literature, which has always emphasized the importance of
on European national institutional differences. The models on European HRM
HRM has an have generally not taken into account the paradigms of European
ethnocentric countries other than the big three (United Kingdom, France, and
bias . . . Germany). There seems to be an inherent bias that nothing worth-
while happens in HRM in the remaining 12 EU countries. Literature
reviews on European HRM have mainly focused on English publica-
tions (sometimes German and French publications are reported as
well). As a matter of fact, most of the references cited in the literature
review of this article are Anglo-Saxon as well. The Anglo-Saxon bias
in the literature review is due to the fact that most academic HR
journals that are published in the various European countries in the
local country languages are unavailable in libraries outside of their
countries and are not readily accessible through electronic periodical
database searches. A systematic review of the HR literature in the
other eight languages of the EU (Danish, Finnish, Flemish/Dutch,
Greek, Italian, Spanish, Swedish, and Portuguese) is missing, unavail-
able, in a language not understandable for most readers, or simply
assumed to be non-existent. In addition, most data collection for
Europe-wide HR research projects was either done in English or
using instruments translated (and back-translated) from English.

Sparrow & Hiltrop (1994) noted that differences between societies

can be explained by cultural factors (a form of cultural reductionism)
and must be modified to consider the interaction between the cul-
tural norms, legal institutions, and underlying economic factors.
Therefore differences in HRM(s) would most likely be the result of
the interconnection between the culture and structure of a particular
society. Such a particularistic view of HRM fits the sociology of
knowledge frame of reference suggesting that knowledge and prac-
tice develop in a broader context (i.e., the cultural and structural ele-
ments of a society). The context of this research assumes that there
are three macrocomponents that influence HR development in
Europe: the international institutional context of the EU, the nation-
al cultures, and the national structure of each country. Discovering
the path of European HRM(s) and their similarities and differences
can only be done meaningfully by viewing its practice from a multi-

734 Thunderbird International Business Review • November–December 2003

 Similarities and Differences in Human Resource Management in the European Union

cultural and multilingual perspective and taking into account the

broader societal context in which professional HRM practices
emerge.

Cross-cultural
METHODOLOGY research must
be multilingual
“An international comparison of HR management is no easy under- and undertaken
taking” (Gaugler, 1988). The research viewpoint utilized in the
with cultural
Euro-HRM project is that cross-cultural and international research
savvy . . .
cannot be reduced to empirical comparisons of data from different
countries without attempting to understand the broader context. A
similar assertion was made by Boxall (1995), who argued that credi-
ble explanations in comparative HRM cannot be built on simplistic
methods and statistical databases but must be connected to the
socioeconomic outcomes. Cross-cultural research must be multilin-
gual and undertaken with cultural savvy, and it should also utilize a
variety of methods (quantitative and qualitative) and data (primary
and secondary). In addition, each method of data collection must be
scrutinized for ethnocentrism. The Euro-HRM project was based on
the “Monterey model,” a heuristic model used in the training of
global professionals at the Monterey Institute of International
Studies. The Monterey model requires the integration of profession-
al competency in a discipline (in this instance HR), language skills
(the various languages of the EU countries), and cross-cultural
knowledge/savvy (the various cultures of EU countries).

Data on the current status of Euro-HRM were obtained by conduct-

ing a naturalistic inquiry in each country and a review of selected
local country articles and/or theses written on the development of
HR in a particular country. A total of 50 leading European HR
experts were interviewed in 14 different countries of the EU. These
leading HR practitioners, academics, consultants, heads of HR pro-
fessional organizations, and influencers in each country were consid-
ered privileged because they were in an exceptional professional
position to witness the development of HRM in their respective
countries. Selection criteria for being considered a key witness
included HR prominence in their country, recommendations by
the head of the country’s HR professional organizations, and
referrals from other prominent HR experts. Although many of the
countries have a wider set of “HR experts” than could possibly be
included in this research, the interviewees were among the leading
“HR experts” who had been in a position to witness and be part

Thunderbird International Business Review • November–December 2003 735

 Lisbeth Claus

of the development of HR as professionals in their respective coun-

tries. Among the 50 HR experts from the 14 different countries
who participated in the interviews, 21 were senior HR profession-
als (directors and vice presidents of HR), 11 leading HR profes-
Concerns with sors, nine consultants, and nine influencers (staff of professional
this methodology HR associations, HR journalists).
were two-fold:
Would a Eleven fieldworkers were selected from two graduate schools of
selection of
the Monterey Institute of International Studies (Fisher Graduate
School of International Business and Graduate School of
different people
International Policy Studies) to conduct the field interviews.
being inter-
Selection criteria to be considered as a fieldworker included native-
viewed and the
like language proficiency, knowledge of the culture of the country,
use of different
and at least one graduate-level course in the following three sub-
field workers
jects: human resource management, international organizational
following this
behavior, or cross-cultural management. Fieldworkers completed
open enquiry training sessions focusing on the scope of the Euro-HRM research,
method produce the interview protocol, data collection techniques and the use of
different results the data templates to report the data. Almost all fieldwork was
and place the done during the last two weeks of May 2000. When fieldworkers
findings of the were on assignment in the various European countries, they stayed
study in in touch with each other and the principal investigator through an
question? online e-group. This enabled them to jointly problem-solve field-
work issues that arose during the data collection period. All inter-
views were conducted in the language of the country and almost
all interviews were done face-to-face on location. Interviews were
audiotaped in the original language and transcribed and translated
into controlled English. Each in-depth interview, based on an
interview protocol, lasted approximately two hours. A few inter-
views were conducted over the telephone because the interviewee
was not available at the time of the summer fieldwork. HR experts
also supplied fieldworkers with local HR documentation and addi-
tional support material. Fieldworkers prepared a summary of their
fieldwork in English and were involved in follow-up discussions
with the principal investigator to ensure accurate interpretation of
the responses to the questions.

Concerns with this methodology were two-fold: Would a selection of

different people being interviewed and the use of different field
workers following this open enquiry method produce different
results and place the findings of the study in question? While
acknowledging that the methodology could reduce the validity of the
findings, a number of factors were taken into consideration to safe-

736 Thunderbird International Business Review • November–December 2003

 Similarities and Differences in Human Resource Management in the European Union

Table 1. List of HR Experts Interviewed for the Euro-HRM Research

Country HR Expert Interviewed
Austria* Peter Gusmits, H. Neumann International Management
Consultants
Susanne Herles, Konzerns Service und Beratung GMHB
Rudolf Krenn, Wiener Stadthalle Betriebs-und Verantstaltungs
GMBH
Wolfgang Mayrhofer, Wirtschaftsuniversität Wien
Belgium Daniel Bastin, SmithKline Beecham
Luc De Decker, HRMagazine
Willy Musschoot, Management Consulting
François Pichault, University of Liège
Marc Van Aken, Glaverbel
Daniël Vloeberghs, University of Antwerp
Denmark Ann-Charlotte Hasselager, Ledernes Hovedorganisation
Henrik Holt Larsen, Copenhagen Business School
Peter Moller, Novo Norsisk A/S
France Nadia Alard, Eligia
Sylvie Cresson, Gras Savoy
Jean Fombonne, Author of doctoral thesis on HRM in France
Sophie Luneau, Gaumont
Jean-Louis Mutte, Anderson Consulting
Germany Dieter Claus, Schwarzkoph & Henkel
Hans Böhm, DGFP
Michael E. Domsch, Universität Bundeswehr Hamburg
Marcus Heidbrink, Kienbaum Management Consultants GMHB
Werner Opgenoorth, Beiersdorf AG
Greece Gavrillidis, Hellenic Fabrics, S.A.
Dimitris Hatjopetrou, Forum Management Consultants
Stella Ksitoriti-Kufida, University of Macedonia
Dimitris Vrontos, Greek Personnel Management Association
Ireland Peter Mulholland, Allied Irish Bank
Italy Ruggero Cesarea, IRSO
Sandro Ciani, Parma
Giovanni Costa, University of Padua
Luigi Di Marco, Milano
Luxembourg Bernadette Froment, Luxguard
Netherlands Mechteld Nije, Deloitte and Touche
Portugal Pedro Croce Rivera, CIMPOR
Rui Mora, Practitioner
Carlos Moura, APGTRH
Maria-Joao Safara, Consultant
Spain Roberto Carballo, Universidad Complense de Madrid
Alberto Fernandez Caveda, Madrid
Ricardo Esteban, Griker & Associates
Carmen Gomez de Ureta Merino, DNA Consultores
Antonio Gonzales Suarez Bustamante, Dragados
Gonzalo de Lucas Ruiz, Aedipe
Alberto Fuster de Carulla, Aedipe
Sweden Marie Hallander Larsson, Scandic Hotels
Lennart Ryden, Pharmacia & Upjohn
United Kingdom Chris Brewster, Cranfield School of Management
Lesley James, Tesco
Judy Whittaker, CIPD

*Affiliation is at the time of research (Summer 2000).

Thunderbird International Business Review • November–December 2003 737

 Lisbeth Claus

guard for this bias with regard to interviewers and interviewees. No

single individual would be able to amass the cultural and linguistic
savvy to conduct the comprehensive study in nine different languages
and 14 different countries. In-depth preparation, fieldwork communi-
cation, and post- fieldwork debriefing were intensive. Fieldworkers prac-
ticed interviewing skills and gained familiarity with the pre-established
standardized research protocols before going on location. The issue of
whether the interviewees were selected appropriately and whether dif-
ferent interviewees would have produced different results can only be
ascertained at face validity. For the smaller countries (excluding the
United Kingdom, Germany, and France), there is no doubt that the
interviewees were the leading HR experts in their country. For France,
Germany, and the United Kingdom, due to the availability of a wider
range of experts, the decision might have been more subjective.

FINDINGS

The in-depth interviews with HR experts sought to analyze the fol-

lowing broad issues: (1) Are there important issues an outsider
should know about HRM in particular European countries? (2) Is
there a European HR model or are HRM models country-specific?
(3) What is the impact of the European Union on HR? and (4) What
similarities and differences can be discerned in Euro-HRM?

HR country Important issues an outsider should know about HRM in the EU

experts had no countries
trouble indicating HR country experts had no trouble indicating what specific matters
what specific outsiders should be aware of regarding HR practice in their country
matters outsiders or when setting up an HR practice. While answers were different
should be aware from country to country most responses focused on, in order of
of regarding HR importance, local labor laws, unique national cultures and subcul-
practice . . . tures, labor relations, social institutions that are specific to the coun-
try, consultation with social partners, and the need for localization of
HR practices. In spite of different examples given in different
European countries, there was general agreement among HR experts
that these factors defined consistently the unique nature of HRM in
their country and for Europe as a whole.

Laws. HR experts indicated that it is paramount to know the intri-

cacies of the country’s laws that govern employment and labor rela-
tions. As a result of complicated labor legislation and regulations in
most EU countries, the early background of HR professionals tend-
ed to be technical and law-related. Respondents strongly recom-
738 Thunderbird International Business Review • November–December 2003
 Similarities and Differences in Human Resource Management in the European Union

mended the need for using “local” experts to ensure compliance

with country laws and regulations and their implementation. That
labor laws differ from country to country is nothing new. What is
interesting is their uniqueness in spite of EU directives and the trend
toward harmonization of labor and employment laws. As laws are a . . . the EU, as a
reflection of the culture and the result of the institutionalization of political and
values, norms, and codes of conduct, the EU, as a political and eco- economic union,
nomic union, has not yet managed to tackle the harmonization of has not yet
local labor laws. managed to
tackle the
Culture. Each country has its unique culture and language. The
harmonization of
national culture (and subcultures) is embedded in value dimensions
local labor laws.
that govern individual and social behavior and affect the corporate
culture of companies. In spite of increased travel, the multilingual
skills of the workforce in many European countries, and structural
opportunity for labor mobility within the EU, European workers
tend to have relatively low labor mobility and hold on to their coun-
try’s cultural roots. The cultural impact on management and HR is
well-documented in the management literature. Two Dutchmen
inspired most of the debate (Hofstede, 1980, 1991; Trompenaars,
1993). HR experts emphasized that importing HR practices that are
counter to the culture of the country or imposing standardized prac-
tices without localization are seen as counterproductive and imperial-
istic. Several examples of the lack of cultural savvy by U.S. companies
came up over and over again; such as the use of 360-degree evalua-
tion as a means of performance appraisal, U.S.-style diversity man-
agement (with a race and gender focus), implementation of
non-smoking policies in the workplace, office layouts in cubicles, and
the introduction of casual dress days. U.S. companies are imposing
uniform standards in their European operations on relatively trivial
issues (such as smoking, office layouts, and dress code), but these
issues have strong cultural implications for Europeans. In fact, there
are only limited attempts to transfer more important essential ele-
ments of a successful U.S. business culture (for example, the focus on
entrepreneurship and innovation) to their European subsidiaries.
Similarly, local HR practitioners in European subsidiaries of American
companies are often forced to focus on national and provincial fac-
tors, because the legal and cultural issues are so different from U.S.
practice, and they are not always given the opportunity to participate
in strategic issues at the Pan-European or global corporate levels.

Subcultures. Within countries, there are different subcultures that affect

HR. They are based on differential economic development, urban ver-
sus rurally located companies, linguistic differences, and company size.

Thunderbird International Business Review • November–December 2003 739

 Lisbeth Claus

The most interesting example of subcultures in Europe can be seen in

Belgium where HR in Wallonia (French-speaking) is very different from
HR in Flanders (Flemish-speaking). HR in Belgium developed along
drastically different lines in spite of common Belgian labor legislation
. . . in spite of and tax systems. The professionalization of Flemish HR is considerably
the same more advanced than HR in Wallonia, mainly as a result of the differen-
Belgian legal tial economic and social development of the country. In addition, the
context, HR HR frame of reference is very different in both Belgian subcultures. In
practices and
Wallonia, the HR model is based on syndicalistic and collectivistic
notions, while in Flanders people management tends to be based more
reward systems
on entrepreneurship and individualistic concerns. Hence, in spite of the
follow different
same Belgian legal context, HR practices and reward systems follow dif-
paths based on
ferent paths based on the linguistic and regional subcultures (Claus,
the linguistic and
Vloeberghs, & Pichault, 2002).
regional subcul-
tures
Labor relations. As a result of globalization and privatization, the power
of trade unions is considered to be decreasing overall in Europe. Spain,
however, is bucking the trend as union membership has actually grown
significantly. While labor relations are still very important in defining
HR practices, labor unions in the EU are in the process of reinventing
themselves. Labor unions have strong political and national allegiances.
Due to strong cultural, historical, and local solidarity, labor relations are
being defined on a country-by-country basis rather than at the
European level. In general, labor relations in Europe tend to be coop-
erative rather than adversarial as compared to the United States. Labor
unions in the EU remain legitimate partners in the consultative process
between employers, employees, and the government. Labor unions in
the various EU countries have worked very hard to affect labor legisla-
tion. They have been successful in promoting laws for the protection of
the workers in their respective countries as well as at the EU level. By
the same token, their success has given rise to a specialized HR exper-
tise within companies to deal with compliance with these laws. As a
result, unions may have created a professional HR force functioning as
a spokesperson for management rather than for employees.

Institutions. Each country has developed a set of institutions that reflects

their tradition and that influences the way HR is practiced. The nature
of these institutions also differs from country to country. Of particular
interest in the EU is the development of strong and well-evolved social
security systems (based either on the German Bismarck model or the
British Beveridge model). While the entitlement of a vast array of
employee benefits is guaranteed under these systems, there is an abun-
dance of discussion as to the economic viability of providing these gen-

740 Thunderbird International Business Review • November–December 2003

 Similarities and Differences in Human Resource Management in the European Union

erous benefits to an aging population in view of global competitiveness.

However, the idea of a social safety net is deeply engrained in European
society and strongly supported by the social policy of the EU. Other
important institutions and structural differences that affect HR in the
EU are education, political systems, religion, demography, family, and Importing HR
various social and administrative/regulatory organizations. practices from
abroad without
Consultation. In general in Europe, there are formal consultation pro- localization has
cesses in place that allow greater involvement of employees and trade little chance of
unions in the company’s decision-making processes. These consultation successful
practices are institutionalized in the important EU directive on work
implementation.
councils. HR in Europe is very often more consultative toward man-
agement rather than controlling. As a result, HR is often more reactive,
paternalistic, and administrative rather than top-strategic.

Need for localization. Importing HR practices from abroad without

localization (to the culture, laws, or language of the country) has little
chance of successful implementation. European HR practitioners are
reluctant to adopt foreign models of HR for practical as well as ideo-
logical reasons. The European reaction of “malicious compliance”
comes to mind, when global companies are imposing “foreign” HR
practices without adapting them to local cultural norms. In spite of this
reluctance, global companies seem to be adopting more and more stan-
dardized initiatives.

In summary, HR experts recommend paying attention to local labor

laws, the local cultures and subcultures, the importance of labor rela-
tions, specific institutions shaped by the country’s history, the impor-
tance of consultation, and the need for localization of HR practices.
These factors constitute the major differences when “European” HRM
is contrasted with HR in the United States.

Does Euro-HRM Exist?

Although the idea of a European HRM model had been suggested in
the literature review, the HR experts interviewed for this study almost
unanimously agree that there is no European HRM model but that
there are multiple ones operating in different countries and within
countries. When probed, respondents most often reasoned that a lack
of a Euro-HRM model was due to the broadness of cultural differ-
ences among countries. European societies are an amalgamation of
countries founded on different social, cultural, religious, and ethnic
solidarities. While there is no European model yet, HR experts indi-
cated that, especially in large multinational companies, the strategic

Thunderbird International Business Review • November–December 2003 741

 Lisbeth Claus

global HR model is gaining influence as a corporate cross-border

HRM model. Respondents agreed that if there is a European HRM
model, it is really a “global company” HRM model of multinational
companies operating in the EU. This global HRM model is heavily
Are we heading influenced by the best practices of the large European and American
toward a multinationals. The U.S. HRM model is also promoted through uni-
European versity education, best-selling management publications (often trans-
model? lated into the different European languages) and leading U.S. HRM
experts who are frequent speakers at European HRM professional
conferences. The role of multinational companies is especially felt in
smaller countries such as Belgium, Luxembourg, the Netherlands,
Greece, and Portugal where many local companies in recent years have
become subsidiaries of larger U.S., French, or German international
companies.

While professional HR functions, processes, and competencies might

be more or less similar around the world, Euro-HRM practices still
consist of a multitude of different methods in which these functions
are implemented. These differences are based on nation, company,
and industry characteristics. Although the Social Programme of the
EU has provided a number of directives in the area of employment,
training, and development funding to reduce structural unemploy-
ment, its impact on HR is minimal as of yet and has not led to the
harmonization of national employment and social legislation.

Are we heading toward a European model? There is no doubt that

with increased communication and the integration of information
technology in HR services, HR tools will become more similar across
Europe. Especially in the areas of leadership, HR scorecards, compe-
tency management, and knowledge management there have been
great developments in harmonizing the tools that aid managers and
enable them to reinforce this European trend. HR experts indicated
that blue-collar workers in the various European companies tend to
respond more to local patterns while managers adopt global man-
agement practices faster. They anticipate that, unlike in the manage-
ment arena, there will not be a lot of change for the blue-collar sector
in the next decade. The management function is becoming more
standardized across Europe as a result of teamwork and interactions
with colleagues from abroad in other parts of global companies. Similar
tools and models are already being utilized across borders within the
same company. Globalization, technology, and economic cycles might
be far more effective in developing a “global brand” of HR, although
cultural differences will remain strong, and legal as well as cultural local-
ization of HRM practices is necessary for operating in the EU countries.
742 Thunderbird International Business Review • November–December 2003
 Similarities and Differences in Human Resource Management in the European Union

HR experts predicted that for large companies operating across borders,

the local management models might be replaced by a global model that
shows great similarity with the European and U.S. models of the multi-
national companies. For senior management positions, this trend is
already underway in Europe. The corporate global HRM model seems For countries
to be outpacing the EU in the area of harmonization of HR practices. that had not yet
met these
The Impact of the EU on HR standards, the
Respondents perceive the impact of the EU on HR to be minimal at the EU directives had
local/national levels. This does not lessen the significance of HRM in a positive effect
the EU. The implications for HR of belonging to the EU are mainly
on HR.
related to the free movement of labor resulting in the ability of employ-
ees to cross borders for employment opportunities. While borders are
disappearing, allowing for the free movement of people, there has been
relatively little noticeable change in cross-border migration of workers
mainly due to cultural factors. With regard to labor legislation, the EU
has mainly kept in place the local labor laws of the individual 15 mem-
ber countries. There is a legal and regulatory employment framework in
the EU through its directives. As of yet, there are only a number of EU
directives that relate to employment, and there is no real harmonization
of HR legislation or equalization of social and tax systems. EU directives
related to employment can be found in a number of areas such as health
and safety, vocational education and training, gender equality, employ-
ee involvement and participation, and unemployment. Many EU coun-
tries were already performing at a higher standard than the EU
directives required. For countries that had not yet met these standards,
the EU directives had a positive effect on HR. For example, in Greece,
improvements in health and safety were obtained through the EU’s
financial support incentives for safety and health training programs pro-
vided by the European Social Fund. Prior to their entrance into the EU,
countries like Greece were often not included in many labor statistics
and employment studies. This had a positive impact on Greece and
helped to increase its national presence and pride.

The EU’s most important impact on HR relates to the economic and

political consequences of creating an economic and political union.
The EU had repercussions for companies and indirectly for HR. The
impact of the EU is also felt by more established members (such as the
United Kingdom), as a result of the recent entrance to the EU of
countries like Portugal, Spain, Greece, and Austria, which caused the
labor market to open up for competition with the availability of cheap-
er labor. The newer EU members were also affected by the imple-
mentation of the EU directives (i.e., updating their employment laws)
and/or upgrading their standards to levels set by the EU directives.
Thunderbird International Business Review • November–December 2003 743
 Lisbeth Claus

They, in turn, often benefited by receiving financial aid from the

European Social Fund for training and development. Overall, the
impact of the EU was perhaps felt most through deregulation of the
public services and the development of social policy in the area of
As one respon- employment. To remain competitive, a more competitive and cus-
dent said, “An tomer-oriented business model and, consequently, a more appropriate
HR manager people management model were needed. However, according to the
does not really HR experts, the impact of globalization and the growing internation-
spend time alization of companies were perceived to be much greater on the
reading EU development of the value-added HR model than the creation of a
directives.” Single European Market. The EU impact is not just through directives
on working time or equal opportunity. It is much more about the
opening up of markets and the introduction of foreign competition.
The true impact on HR of the Single European Market can be seen in
sectorial adjustments, increasing firm size and concentration, and the
development of European firms (Hendry, 1994). The HR impact is
felt much more on maintaining productivity, restraining labor costs,
and increasing quality standards due to competition. In addition, the
largest European companies (in terms of number of employees) tend
to be public service companies such as utilities, railroads, and postal
services. The EU has put a lot of pressure on the public sector to pri-
vatize. These indirect effects through the economic and performance
changes brought about by the EU have been much more significant
for HR than the European Union’s Social Charter, social programs,
and employment-related directives. As one respondent said, “An HR
manager does not really spend time reading EU directives.”

In summary, despite the development of the EU, there is no

European model of HR. While there may be a common context in
European HR that distinguishes it from U.S. HR, the lack of har-
monization of labor legislation and the cultural diversity result in
country-specific HR practices. The EU’s greatest impact on HR
lies in deregulation, privatization, and the resulting increase in
competition. The impact of the global company model seems to be
more important in the standardization of HR practices than that of
the EU.

SIMILARITIES AND DIFFERENCES IN EURO-HRM

According to the respondents, there are fewer similarities in HRM in

the EU than there are differences. This, again, points to the absence
of a genuine Euro-HRM model.

744 Thunderbird International Business Review • November–December 2003

 Similarities and Differences in Human Resource Management in the European Union

Similarities in Euro-HRM
Although countries differ in how they go about HR services, HRM
functions can be considered to be universal. While there is no
European HRM model, respondents admit that there are characteris-
tics that make it distinct from HR in other continents. Similarities in Although
European HRM are the importance of consultation, the emergence of countries differ
flexible work patterns, the role of work and the employer in the life of in how they go
employees, and the use of the Euro as a common currency. about HR
services, HRM
Consultative approach. European HRM is more consultative in its
functions can be
approach than U.S. HRM and requires a collaboration between dif-
considered to be
ferent stakeholders as social partners (management, employees,
universal.
unions, and governments). This collaborative model is institutional-
ized in the EU directive on consultation.

Temporary work and flexible work patterns. A recent development in

the EU countries is the growth of flexible work structures and tem-
porary work patterns. The emphasis on temporary work structures
has developed as a response to reduce structural unemployment
(especially youth unemployment) and has led to a greater emphasis
on competencies and polyvalence. In addition, the focus on work-life
balance calls for more flexible work patterns.

Role of work and the employer. There is a different mentality in the

EU countries regarding the role of work and the employer.
Employees consider social benefits as entitlements and work-life bal-
ance as an acquired right. The employer is responsible for the
employee and has to, in a sense, “take care of” and “care for” the
employee. Although the importance of a social safety net is acknowl-
edged throughout Europe, social policies and social security benefits
are significantly different from country to country. Benefits packages
have core elements that are similar across the EU but they vary based
on local laws, entitlements, and traditions.

The use of the euro. The use of the euro as a common currency is
more than just a symbol of European unification. While compensa-
tion and tax systems are far from harmonized in the EU, the Euro
provides greater transparency for employees in compensation, bene-
fit matters, and purchasing power.

Differences in Euro-HRM
HR professionals must deal with very different realities based on the
context of the country and the businesses in which they operate.

Thunderbird International Business Review • November–December 2003 745

 Lisbeth Claus

Factors that create differences in HRM in different European coun-

tries are both nation- and company-based. National differences in
HRM are mainly based on the extent to which there is hierarchy in the
society, the different cultures and mental models, strong labor and
Factors that social legislation incorporated in vastly different national laws, regula-
create tions, and different tax systems. Company factors relate especially to
differences in the size of the companies, public versus private sector, and multina-
HRM in different tional versus local companies. Finally, some regional differences are
European
clustered around the northern/southern and eastern/western
European axes.
countries are
both nation- and
National factors. National factors creating divergences in Euro-HRM
company-based.
are: (1) hierarchy; (2) cultures and mental models; (3) societal struc-
ture; and (4) languages. First, hierarchy and power distance in the
society are especially relevant in creating differences in work and
management practices. As illustrated by Hofstede’s (1980) research,
each nation is different in the function of its cultural characteristics.
The United Kingdom, the Netherlands, and the Scandinavian coun-
tries have a rather dim view of hierarchy and are more equality-based,
while France, Germany, Greece, and Portugal are more status-based,
thereby making it difficult to build a flat organizational structure.

Second, the different cultures and mental models, such as collec-

tive/syndicalism versus individual/developmental models, impact the
competencies needed to be an effective HR manager. The HR man-
ager working in the individual/developmental model has a hard time
operating in the collective/syndicalism model because it requires
working in collective management, building relations with trade
unions, having knowledge of the labor laws and union practices, and
possessing strong negotiation skills and political intuition. In con-
trast, in the individual/developmental environment, the HR manag-
er must possess personal skills and human relationship skills (such as
sensitivity, curiosity, and attention to individual expectations) and a
willingness to engage in dialogue. The practice of HR is also embed-
ded in various social models that are operating in Europe. This study
identified the existence of an Austrian social peace model (where har-
mony is sought between the various stakeholders), a Dutch social jus-
tice model (that accepts the interventionist role of the government
to provide social protection in employment), a Belgian social com-
promise model (requiring give-and-take among the representatives of
different political, linguistic, and religious factions in decision mak-
ing), a Swedish/Danish social equality model (based on the
Janteloven concept of “Thou shalt not be better than anyone else”),
a German co-determination model (with employee involvement and
746 Thunderbird International Business Review • November–December 2003
 Similarities and Differences in Human Resource Management in the European Union

participation in the company), a Luxembourgeois consensus model

(with tripartite representation of labor, management, and govern-
ment), an Italian ideological model (emphasizing protection and sol-
idarity based on Christian and Marxist values), and a French
centralized administration model (a more authoritarian, legalistic, . . . each country
and administrative approach). These social models have considerable has very
impact on how the management-employee relationship is construed different
and the skills the HR professional needs required to operate within individual and
the appropriate country model. corporate tax
systems affecting
Third, a structural component affecting HR is the strong labor and
the total
social legislation incorporated with vastly different national laws and
compensation
regulations. In addition, each country has very different individual
and reward
and corporate tax systems affecting the total compensation and
systems that can
reward systems that can be offered to attract, retain, and motivate
be offered to
employees.
attract, retain,
Fourth, languages play a major role in creating differences in and motivate
European HRM. In some European countries, people are proficient employees.
in multiple languages. In other countries (such as France, Austria, and
the United Kingdom), people have more limited linguistic capabilities.
Smaller countries often have a cultural reference point (e.g., Germany
for Austria and Luxembourg; France for French-speaking people from
Wallonia and Luxembourg). In European countries with smaller pop-
ulations, where the native language is not a world language (e.g.,
Denmark, Luxembourg, Belgium, Netherlands, and Greece), people
often learn several other languages through their formal education.
Multilingual HR professionals (often from smaller countries) have an
advantage over people with a dominant country language (such as
English, French, and German). They are in a position to tap into
another cultural reference base. HR professionals from smaller coun-
tries have the capacity to integrate the knowledge (HR and manage-
ment) they acquire into their own practices and adapt it as needed. In
most cases, for HR the reference language is English and the reference
country is the United States. Therefore, inspiration comes mainly
from the United States and less from other EU countries.

Company factors. Company factors creating divergences of Euro-

HRM are: (1) size of companies; (2) public versus private sector; and
(3) multinational versus local companies.

The first company factor creating divergence in HRM is the size of

European companies. The majority of companies in EU are small or
medium-sized. The number of employees working for the largest

Thunderbird International Business Review • November–December 2003 747

 Lisbeth Claus

5,000 employers in Europe range from as low as 1,960 employees to

over 1 million. Only 41 European companies have more than
100,000 employees and only 888 companies have more than 10,000
employees. The large employers in the different European countries
Smaller firms do tend to be in the public rather than the private sector. Another factor
not have the that influences HRM is that although some companies might have a
critical mass small number of employees at the local country level, they belong to
and cannot a large global or multinational company. European integration of
invest in HRM
HRM is possible for large companies, but the small and medium-
sized enterprises still have the one HR administrator that is allocated
and HR
to the controlling/accounting department. Smaller firms do not have
development in
the critical mass and cannot invest in HRM and HR development in
the same
the same manner as large and multinational corporations. However
manner as large
these companies can, because of their small size, often avoid country-
and multinational
specific regulations and the imposition of the EU directives (such as
corporations.
having a work council if they have a certain number of employees).
Within a particular country, there is not one model of HR but there
are large-company, small-company and start-up/new company mod-
els. In the large company, HR is well established with modern sys-
tems. In small companies (often family-owned), there is an
owner/leader model based on mutual trust relations. In start-up
companies, there is a global new economy model with limited hier-
archy and a focus on entrepreneurship and rewards.

The second company factor creating HRM divergence relates to

whether companies are in the public or private sector. Up to the mid-
1980s, in most EU countries, there was strong governmental influence
in the area of HR through government-owned businesses, state subsi-
dies, and the support of the local economy. Public sector companies
were controlled by the state and labor relations were the basis that
influenced HRM. The public system was effectively connected with
monopolies (telecommunications, electric and gas power utilities, rail-
ways, and postal service). Lack of customer orientation was a trademark
of these companies. This resulted in noncompetitive business sectors,
bailouts of failed businesses by the state, and an emphasis on the union-
ized public employee model of lifelong employment, extensive social
benefits, and compensation based on seniority. The political nature of
the business in many European countries was so deeply rooted in the
society that it was taken for granted. With the entrance into the EU,
privatization of public companies became the norm. Compared to the
United States, the EU still has a much larger proportion of public to
private sector employment. The industrial sector also produces varia-
tions in HR practices between and within countries.

748 Thunderbird International Business Review • November–December 2003

 Similarities and Differences in Human Resource Management in the European Union

The third company factor creating HRM divergence is related to

multinational versus local companies. Multinational companies have
a global model that is the closest to becoming an accepted “univer-
sal” model. The corporate culture of these European and American
global companies is based on attracting and retaining the best Companies that
employees, building customer relations, developing employees, and work Europe-
creating a winning corporate culture of empowerment and account- wide have
ability. Companies that work Europe-wide have pushed for European pushed for
or even global integration so that the HR tools and instruments at European or
least fit with each other. A good example is the European expatria- even global
tion compensation for EU workers. Global companies have a ten-
integration so
dency to abandon the expatriate and special compensation packages
that the HR tools
for their European expatriate employees and espouse a European
and instruments
integration standard. Foreign firms with subsidiaries in EU countries
at least fit with
use the firm’s global model and adapt it to the constraints of the local
each other.
country (mainly legislative, tax, and social requirements).
Multinationals can have a differential impact on local HR depending
on the degree of integration of the HR organization: They can bring
in more competitive value-added HR systems and practices and trans-
fer knowledge to local HR components (as was the case in Belgium,
Spain, and Greece). Or, they can limit the ability of the local HR pro-
fessional to adapt corporate policy to the complexity of the country’s
legal constraints (as was often the case in Luxembourg). A new HR
model is evolving, and it is based on the forma mentis of the global
company with an emphasis on practices such as strategic visioning,
development and execution of the people strategy, HR administrative
capabilities, emphasis on customer service in meeting employee
expectations, competency development, and change management.

Regional differences. With regard to HRM, Europe is divided into

north-south and east-west regional differences. Awareness of the
importance of people management is much more pronounced in the
northern than in the southern countries. But, there is an increased
awareness in the south of the importance of HR professionalization.
Although certain countries (Greece, Italy, Portugal, Spain, Austria,
and Luxembourg) are considered behind in HR, they are all quickly
catching up with the more advanced HR countries. Several of these
countries (especially those who recently entered the EU) are receiv-
ing assistance from the European Social Fund for HR development
and for bringing their standards in line with the EU directives. The
Cranfield studies (Hegewisch & Brewster, 1993) have identified dif-
ferences in HR practices between the European countries on a vari-
ety of dimensions (from devolvement of HR services to line

Thunderbird International Business Review • November–December 2003 749

 Lisbeth Claus

management to performance appraisals). Some north-south general-

izations are, that the level of participation and co-determination
increases form southern to northern countries and that the hierarchy
flattens from south to north. In the long run, the north-south dif-
Common trends ferences are expected to decrease with greater HR interaction and the
and similarities proliferation of global company models. Common trends and simi-
should become larities should become more important in HR in the future in spite
more important of the current legal, cultural, and tax divergences. Although the inte-
in HR in the
gration of the new Eastern German Länder into unified Germany was
a German-specific issue requiring a German way of responding, it
future in spite of
opened Europe’s frame of reference to the East. The integration and
the current legal,
entering of new markets in eastern Europe called for a more
cultural, and tax
European or global HRM model. Certain EU countries, such as
divergences.
Germany, Austria, and Greece are becoming focal points for the
Central and Eastern European neighboring countries. With the even-
tual entrance of many of these countries to the EU, their HR refer-
ence might become more Euro-centric rather than national. The
north-south regional groupings suggested in the literature have been
borne out by this study with culture being the main differentiator. In
addition, an east-west axis is emerging as a result of the increased
interest of “Western” European companies in “Eastern and Central”
European markets. The main east-west differentiator is the country’s
level of economic and business development. However, the recent
proliferation of HR professional associations in the Czech Republic,
Hungary, Latvia, Poland, Slovakia, and Slovenia (with memberships
ranging from 55 in Latvia to 960 HR practitioners in Slovenia) is
another testimony to the growing business and HRM development
in these countries.

CONCLUSIONS

This study focused on similarities and differences in HRM in the

countries of the EU and the impact of the EU on HR practice. In
general, similarities in Euro-HRM lie in greater employee consulta-
tion with different stakeholders, the role of work and leisure in peo-
ple’s lives, the development of different work patterns, and the
introduction of the Euro as a common currency in the majority of
EU countries. Although the role of unions is changing, they remain
an integral partner (with the government) in the Euro-HRM scene.
Creating differences in European HRM are national, company, and
regional factors. National factors include societal hierarchy, different
cultures and mental models, societal structure, and language.
Company factors include size of companies, public versus private, and
750 Thunderbird International Business Review • November–December 2003
 Similarities and Differences in Human Resource Management in the European Union

multinational versus local companies. Regional factors differentiate

along north-south and east-west axes. A major obstacle to
Europeanization is the lack of harmonization of labor and tax laws.
The EU had relatively little impact on HRM in terms of harmoniza-
tion of labor and tax laws but had a major impact by opening up mar- A major
kets to foreign competition and privatizing public sector companies. obstacle to
The unintended impact of the EU on HR is the need for competitive Europeanization
labor in terms of cost and competencies. In spite of the market is the lack of
demand for intellectual capital and the pressures for competitiveness, harmonization of
the EU reinforces the social model of employment. That model is labor and tax
deeply engrained in European societies and variations can be found
laws.
in different countries.

HR does not exist as a uniform practice in the EU. Instead, the way
standard HR services are delivered represents a collage of different
practices. There are no differences in the basic HR functions (such as
recruiting, selection, compensation, benefits, training, labor rela-
tions, employee relations, etc.) in Europe, but the context in which
HR services are delivered is vastly different from country to country.
Variations in HR practices are mainly due to the different employ-
ment/labor laws and the national cultures and the organizational
context of the company. As a result, in the EU countries HR can be
many different things on a continuum from personnel administration
to very strategic HR and people management. Macro forces that
shaped the development of HR in the past and present require that
HR adapts its practice to the legal, economic, political, social, struc-
tural, cultural, ideological, and technological context of the country.

It is difficult to gauge the development of HR because professional-

ization characteristics (such as body of knowledge, licensing, ethics,
and professional organization) are value-laden Anglo-Saxon notions.
Multifaceted indicators must be used to ascertain whether HR is
more or less developed in a country. They should include structural
variables (such as size of company, economic sector, privatization,
and legislation) as well as cultural indicators impacting management.
A clear tendency is that HR in the EU is moving away from person-
nel administration to strategic HR, and might move from national to
European and global HR as a result of the impact of global compa-
nies. The HR dominance of the larger European countries and com-
panies headquartered in these countries (such as France, Germany,
and the United Kingdom) is evident. However, due to their own
nationalistic tendencies and ethnocentrism, they might not be the
HR trendsetters in Europe. The U.S. HRM reference point is very
important and American companies (by being large global compa-

Thunderbird International Business Review • November–December 2003 751

 Lisbeth Claus

nies) are large employers of EU citizens through their European sub-

sidiaries. Furthermore, small European countries often have an HR
advantage over the big European three by being more open to for-
eign influences and flexible in implementing and integrating new HR
As a result of practices. This study has found highly developed HR bodies of
globalization, the knowledge and advanced HR practices in small countries like the
“global company Netherlands and Belgium. Because of their global mindset, foreign
HR model” language capabilities, lack of notoriety on the global HR scene, and
clearly
contact with multinational firms, HR professionals in these countries
were in position to absorb, synthesize, and integrate outside HR
overshadows the
influences in their own country practices. Companies in smaller
development of
countries are, however, more vulnerable when it comes to HR
a Euro-HRM
because their companies are both smaller and family-owned (with lit-
model.
tle or no HR function) or have been swallowed up by foreign com-
panies and lost their HR autonomy.

As a result of globalization, the “global company HR model” clearly

overshadows the development of a Euro-HRM model. This model is
based on “labor competitiveness” and the need for value-added HR.
It also pushes for the development of standardized HR practices
within a company across borders and worldwide HR shared services.
The standardized HR model does localize to comply with country
legislation but largely ignores the necessary cultural adaptation.
While the desire for standardized HR practices is attractive for glob-
al economies of scale and scope, they cannot eradicate or ignore the
strong identification of people to their cultural and national roots.
Due to the strong legal, cultural, and institutional differences from
country to country, there are dangers for a company that operates
throughout Europe in managing HR in different regions. If HR is to
add value to the company, failing to take into account the impact of
culture as well as structure on people management will not result in
positive well-being and productivity for the employee. HR in Europe
is positioned more as a link between the well-being of individuals and
the competitiveness of the company. Balancing both requirements is
a major component of HR’s strategic role in Europe.

Globalization has a much further reaching consequence on the HR

profession than probably any other external force since the end of the
industrial revolution. It has engendered a series of mergers and acqui-
sitions between European and U.S. companies and pushed for the
privatization of public companies, free trade, and greater competi-
tiveness. Combined with technological and communication capabili-
ties, companies need teams to function across borders and cultures

752 Thunderbird International Business Review • November–December 2003

 Similarities and Differences in Human Resource Management in the European Union

and work together to achieve global objectives. All these factors have
focused executive attention on the value of the workers’ knowledge
and competencies, accountability, and productivity as well as the need
to understand the local culture and structure in which people oper-
ate. While cultural diversity remains strong, the influence of larger It is interesting
multinational companies may lead to more regional integration in the to note that
practice of HRM. while U.S. HR
professionals
It is interesting to note that while U.S. HR professionals may not may not have
have specific knowledge of HR in the various EU countries, specific knowl-
Europeans do not have a clear understanding themselves of HR in
edge of HR in
their neighboring countries. The reference for HR in many European
the various EU
countries is the United States. For multinational and global compa-
countries,
nies there are solid HR networks within companies that allow for
Europeans do
knowledge-sharing of HR best practices. There are also well-estab-
not have a clear
lished academic ties through research cooperation and teaching pro-
understanding
grams. As the context of HR throughout Europe is being subjected
to structural and business changes, looking for similarities and differ- themselves of
ences may be too simplistic a way to grasp the many factors that cre- HR in their
ate the context of HR in the different countries. European HRM neighboring
lives more comfortably in a polycentric mode than U.S. HRM that countries.
seeks universality and standardization. Differences based on cultural
and structural factors are accepted as a way of life in Europe despite
the overarching infrastructure of the EU. What might be lost by the
economies by organizing a “global” HR function of a company oper-
ating in different EU countries could be gained in creativity, innova-
tion, problem solving, and productivity of the culturally diverse
Europeans. As U.S. HR has generally espoused diversity of people in
employment practices and internalized its benefits, global companies
should consider adopting diversity of HR practices within their
European operations with the same resolve.

ACKNOWLEDGMENTS

The author is grateful for the comments, insights, and suggestions pro-
vided by her colleagues through the journal’s peer review process. The
Euro-HRM research project was supported through a grant from the
SHRM Foundation and made possible through the participation of the
following fieldworkers: Andrew Berdy, Rebecca Busich, Diane Castro,
Carsten Eldrup, Robert Hector, Laurent Kounouho, Natanya Myers,
Dounia Nouini, Morena Petrich, Lisa Sandblom, Jeroen Van Hijfte,
and Astrid Ziebart. Their support is gratefully acknowledged.

Thunderbird International Business Review • November–December 2003 753

 Lisbeth Claus

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