HRM Practices in Korea
The Korean history of HRM can be divided into 3 distinct periods. During these periods the HRM paradigm changed from “seniority based HRM” to “ability based HRM” and finally to “performance based HRM”. The period up to 1987 can be called as the ‘era of seniority” when the main factors determining promotion and pay were age, education level and the length of service. Then from 1988-1997 was the “era of ability” here the promotion and pay was determined by the employees ability to work. Finally came the “era of performance” i. e.
1998 till now where employees are paid on the basis of his/her achievements. Before 1987 Korean companies enjoyed the “golden age” i. e. an era where everything they made sold well. Hence the paternalistic seniority based HRM took deep root, emphasizing “harmony” rather than “competition” among employees. The 1987 democracy movement changed the scenario, and the long suppressed desires of the workers started erupting slowly. Hence the core issue of HRM practices was to abolish discrimination among employees on the basis of education, gender etc.
The 1997 currency crisis made Korea to adopt “the North American style performance-based pay”. (Kweon-Taek, Chung(July2008) ‘Korea’s Shift to Pay-for-Performance’ SERI quarterly. Available from URL:http://search. proquest. com) The Korean management practices can also be studied from the viewpoint of Hofstede Cultural Dimension Study. The Confucius focused on order and hierarchy. The decision of those who were in authority were seldom challenged. Secondly, men were considered to be superior than women (Miles,2006,2007).
Another characteristics of these societies is collectivism. They stress on the importance of human relations and the priority was given to the group goals rather than the individual goals. “Geert Hofstede, in his study on the relationships between national culture and organizational culture found Korea to be one of the most collectivist societies in the world. (Hofstede,1980a,b,1996,2003; Perry,2002) These characteristics contributed to the ideas about how firms were organized (Rowley and Bae,2002, p. 530,2004, pp. 59-61). This is shown in the management of chaebols.
“Chaebols are large private business group that consist of several smaller units”. Some examples of chaebols are: Samsung, Hyundai, Lucky-Goldstar, Hanjin and SK Corp. “Management within the chaebol is paternalistic and dictatorial, with the influence of the founder apparent in how the firm is led and directed”. (Cho and Yoon, 2001, p. 75). In this case there is centralization of decision making, and the employees are seldom delegated the powers. Seniority based reward system along with life time employment are common. (Yoon, 2007, p. 16).
Lastly, the Korean HRM practices are moving towards a new direction. “Confucian traits such as patriarchy, collectivism, an emphasis on solidarity and cooperation, are no longer regarded as compatible with the modern market system”. While introducing new policies or reforming the old ones the government or the policy makers should keep in mind the cultural dimension. (Miles, Lilian(2008) , ‘The significance of cultural norms in the evolution of Korean HRM practices’, International Journal of Law and Management, Vol. 50, No. 1, pp. 33-46. Available from URL:http://search. proquest. com)