Business Success In Eastern Europe

Business Success In Eastern Europe

Case Study Analysis Business Success in Eastern Europe: Understanding and Customizing HRM The Problem Tremendous growth and profit opportunities exists in Eastern Europe, but the culture and their management practices make it difficult to attract, motivate, and retain high-quality workers. The situation Changes in Eastern Europe have occurred rapidly and often unpredictably. The financial risks are high and the short-to-medium-term gains are often too low to justify the expenditures. Many Western firms are investing rapidly in companies in former communist countries. Despite large investments from Western companies, Western managers know relatively little about the human resource management (HRM) practices or the difficulties that Western businesses encounter in Eastern Europe. To understand the evolution of HR and the challenges that Eastern European countries face in trying to transform their formally centrally controlled economies, I will examine three major activities since the end of the Soviet era and three factors that may contribute to greater risks in the region. The three major activities since the end of the Soviet era: (1) Performance appraisal (2) training and development (3) compensation and benefits. The two factors that may contribute to greater risks: (1) infrastructure (2) financing. Performance Appraisals Performance appraisals were unpopular in Eastern Europe because employee rewards were tied to government dictates rather than performance. Workers were guaranteed a monthly wage regardless of productivity. Using performance appraisals to determine rewards is becoming more common. However, there is still some resistance to performance-based pay, especially among older worker who are accustomed to the collectivist culture that supported guaranteed wages and bonuses. Training and Development Formerly, East European firms provided workers with merely basic knowledge training, hoping they would learn the res…


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