Human Resources Management

The Turkey Example Word Count: 2290

Prepared By: Mustafa Mert DIKMEN

Module Leader: Dr. David ALLSOP

Module Code: MBSP 0181

Human resource management (HRM) is defined as a strategic and coherent approach to the management of an organisation’s most valued assets – the people working there who individually and

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collectively contribute to the achievement of its objectives. Since international HRM involves not only the management of expatriates but the worldwide management of people (Armstrong, 2006), multinational companies will need to manage the challenges of global efficiency and multinational flexibility (Barlett and Goshal, 1991). Organisations will be largely contingent on the environmental factors affecting them. Therefore organisations need to achieve fit between what the organisation is and wants to become which can be identified as its strategy, culture, goals, technology, the people it employs and its external environment, and what the organisation does which are its structure, processes, procedure and practices it puts into effect (Armstrong, 2006). The purpose of this essay is to critically examine the distinguishing features of HRM in Turkey by taking into consideration the above statements. In Turkey’s dynamic economy, HRM is recognized as one of the most important tools in maintaining organizational effectiveness and competitiveness (Aycan, 2001). HRM is a developing field in Turkey; however, some theoretical studies indicate that the understanding of HRM is weak in Turkish companies (Buyukkuslu, 1998). Therefore it can be said that the research on the evolution of HRM in Turkey is not sufficient.

Research (Sonja and Phillips, 2004) assumes that managers in today’s multicultural global business community frequently encounter cultural differences, which can interfere with management practices in organizations. Managers implement HRM practices based on their assumptions on the nature of both the task and the employees. However, these assumptions are shaped by different environmental forces (Aycan et al, 2000). Therefore it is important for organisations to take into consideration the cultural aspects as an external factor affecting their HR practices. Turkey has a very diverse culture which is a blend of eastern and western culture and traditions. This clearly necessitates exclusive HR practices which are evaluated in the emic environment in Turkey.

Geert Hofstede (1991) has developed cultural value dimensions to compare cultures in different countries. According to Hofstede’s research, the Individualism index (which is the degree to which the ties between individuals are loose or remain integrated into groups) of Turkey is 37. This low score indicates a great sense of unity and cohesion and may be thought of as an impact of the Asian influence in Turkey. The fact that many businesses are still family owned (Kwintessential, 2011) supports Hofstede’s cultural analysis in this sense. In addition, family loyalty is a vital aspect of Turkish society and has a major impact on Turkish business practices (Communicaid, 2005). Also, bearing in mind that %99.8 of Turkey’s population is Muslim, it can be said that Islam is a contributing factor of unity in the Turkish culture. The PDI (power distance index) of Turkey has been identified as 67. According to Hofstede (1991), power distance is the extent to which the less powerful members of organisations and institutions accept and expect that power is distributed unequally. The number 67 is considered to be a high degree of power distance which reflects a perceived and accepted a social distance in Turkey. For example, age is a symbol of wisdom and demands respect in all aspects of society in Turkey and senior members of a Turkish company usually has very little opportunity to contact the executive officers which generally consists of elders. In addition, Turkey’s strong association with religion is also considered to be one of the reasons of the high PDI value (DePauw, 2011). Another index of Hofstede’s is the masculinity index (MAS) which refers to the distribution of emotional roles between genders. In Turkey, the MAS stands at 45 which indicates that the Turkish society is a more caring society and favours maintaining long term relationships with others. The Turks hospitable culture can be an example of the feminine side of their culture. Turks also has a high UAI (85) which is common for all countries with Islamic majority. As Hofstede puts it, high UAI (Uncertainty Avoidance Index) countries do not deal well with uncertain situations. For example, engaging in a business partnership with a Turkish businessman generally requires tying up a long-term relationship. In addition to Hofstede’s cultural dimensions there is one

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more dimension which is paternalism (Redding, Norman & Schlander, 1994). Paternalism describes people in authority such as the managers or presidents of an organisation undertaking the role of parents. According to the paternalistic behaviour, the one assuming the role of a parent considers providing support and protection to others under their care as obligatory. Based on research (Aycan et al, 2000), Turkey is found to be highly paternalistic. Consequently in HRM practices, Turkey scored high on job enrichment but low on performance-reward contingency. This supports the research done on paternalistic culture in Turkey. Overall, the cultural dimensions in Turkey shows that the culture is a complete blend of western and eastern culture and implementing common HR practices may not be beneficial for organisations operating in Turkey.

Organizations are shaped by the institutional environment which surrounds them and adopt certain features because of pressure from outside forces, including legal compulsion, gaining legitimacy, conforming to institutionalized rules, etc. (Chow, 2004). The human factor is considered to be an organisations most valuable asset. Therefore, educational institutions in one country, plays a vital role in the management of human resources. Yet in Turkey, the number of graduate programs offered in HRM and related fields are very low. Most of the universities in Turkey do not want to spend their resources on the research of HRM. Companies prefer to get quick solutions by outsourcing their know-how and turn to globally recognized HR practices. However, these practices are usually not suitable considering Turkey’s cultural context. Even though the overall education attainment level is currently showing an increasing trend, this is only a recent development. The same attainment levels of the working population show that %60 of the labour force is composed of basic education graduates or people who dropped out from basic education (ETF, 2006). Also, public authorities in Turkey shows efforts to increase participation in vocational training but this still remains far from being an attractive option for secondary education students.

Another legal aspect affecting the HR practices in Turkey is the public and private pension systems. SSK (Social Security Institution), ES (Retirement Fund) and BK (Self Employed) are the major public pension institutions in Turkey. Prior to 1999 the pension system of Turkey was encountering huge financial difficulties, not because of the aging population like in most European countries at that time but because of the extremely low minimum retirement ages. Pension regulations allowed the female and male workers to retire at the age of 38 and 43 respectively. A reform was needed in the pension system and the reform took place in 1999. The entitlement age was set to 63/65 at first but then due to the pressure from trade unions, these numbers were reduced to 58/60 for female and male workers (TÜSİAD, 2004). However, the real revolution was the private pension system which was constituted in 2002. Implementation of the private pension system was a major milestone in the improvement of the public social security system, and hence a step towards rectifying the gap in public finance. (Privatewaterhousecoopers, 2003). Today, the total number of people who are in the private pension system is over 2 million (TodaysZaman, 2010). The increasing number of private pension contracts has proved retirement plans of employees as an important matter for HRM. Corporate retirement plans not only improve retention, but helps foster trust among employees and allows them to focus on their work (Matsuura, 2007).

The minimum wage law is also an important environmental factor that organisations need to be aware of. The minimum wage in Turkey is currently 630 TL which is equivalent to around £250. According to Bloomberg HT (2011), the poverty line was set to 1510 TL in February. This means that the minimum wage is very much under the poverty line. These figures are slowing down the employment growth in Turkey.

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More importantly, discrimination issues which are one of the biggest issues in HRM are still intensively in effect in Turkey. Most of the EU countries regulate different areas of discrimination; however, Turkey has only one law for these and there is no independent agency to monitor the discrimination complaints (Sesen, 2006). The need for making detailed regulations is exponentially increasing as people are being subject to discriminations of age, gender, wage, disability, etc. In comparison to the Western countries, despite the fact that the percentage of young generation is higher in Turkey, the average ages of employees in the corporations tend to range close to 40’s (Mujtaba et al, 2004). Because security of the jobs of older employees in Turkey, the younger candidates have little opportunity to prove themselves useful. Even if they get an opportunity to find a place in the workforce, they have trouble applying their fresh ideas into the organisation. This not only causes youngsters to lose their hope of getting a decent job but cause migration of the young workforce. Age discrimination is not the only discrimination the Turkish workforce is caused to experience. Wage discriminations and occupational gender segregations are important issues in the Turkish labour market. Especially woman experience some difficulties such as low levels of wage compared to men and less level of chance given to woman in the management posts.

External factors such as institutional and cultural features of an environment, determines the human resources practices of organisations. However, this has led to vast variations of HRM practices among organisations in Turkey. The main functions of HR departments in Turkey are staffing, wage and compensation determination, training and development, health-related issues, performance evaluation, transfers and promotions, catering services, transportation services, job security and career planning (Aycan, 2001). Most of the Turkish organisations fail to successfully implement the HR staffing function. Suggestion from employees or other contacts are still the most popular recruitment channel in Turkish organisations. This is perhaps the reflection of the collectivist culture in Turkey. Also, the reliance on one-on-one interviews as a method of selection can be seen as another aspect of the collectivistic nature. The usage of objective and standard tests is very few, only by a couple of organisations.

Another challenging HR function is considered to be performance evaluation. The main reason for this is, only one-third of the organisations assess performance on the basis of competencies and behavioural criteria and the evaluators don’t receive the training necessary for performance evaluation. During the evaluation process of performances, a problem which can be seen in the majority of Turkish organisations can be related to the high power distance culture. In high power distance cultures, the performance evaluation process is usually a one-way process where subordinates are evaluated only by their supervisors. Likewise, because of the collectivist culture of Turkey, people tend to rate themselves lower than the rating they get from the others. Therefore, the self assessment doesn’t reveal consistent results. In addition giving and receiving performance feedback is a Turkey because people tend to get emotional, especially when they receive negative feedback (Aycan, 2001).

It is recognized that if HRM is about investing in human capital from which a reasonable return is required, then it is proper to reward people differentially according to their contribution (Armstrong, 2006). However, only 2/3 of the organisations in Turkey reported that they had a system that provided performance-reward contingency (Andersen, 2000). According to Andersen, 60 percent of the white-collar and 27 percent of the blue-collar employees were being rewarded according to their performance. The rewards generally consisted of bonus and salary increase. Rewards like “employee of the month” are not preferred for the reason that it would disrupt group harmony. The job evaluation process in Turkey is also quite interesting. The value of the job applied for, the salary offered to the candidate is decided heavily through negotiations and the level of salary increase is determined by the

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inflation rate. Moreover, while the white-collar employees in Turkey receive common benefits when compared to non-paternalistic cultures, the blue collar employees receive benefits such as pocket money for holidays and contribution to the educational expenses of their children.

Perhaps one of the most distinguishing features of HRM practices in Turkey is the career management and planning function of the organisations. Organisations act like career consultants because of the education system in Turkey where students are accepted to universities through a national university entrance exam and they are offered a limited number of discipline and university choices. This leads to an incompatibility between the employee’s ability and his/her occupation. According to Andersen (2000), 58 percent of the organisations operating in Turkey had career management systems in 71 percent of these organisations fulfilled the replacement needs within.

The general features of HRM are considerably distinguishing in Turkey when compared to other countries, especially the highly developed ones. One of the most important environmental factors that affect HRM in Turkey is the unique culture it hosts. Turkey is considered to have a collectivist, paternalist and feminine culture with high power distance and uncertainty avoidance which is a mixed culture of both the west and the east; therefore, the HRM practices should be in accordance with the current circumstances. The need for tailored HRM practices shows itself once again when the external factors such as legal and educational institutions surrounding the organisations are analysed. Facts show that most of the organisations which are evaluating the external circumstances are using unique techniques to execute HR practices. However, the appropriateness of these practices is still indeterminable as the research on the evolution of HRM in Turkey is still inadequate.

References and Bibliography

Aycan, Z. (2001) “Human Resource Management in Turkey-Current Issues and Future Challenges”, International Journal Of Manpower, Vol. 22 No. 3, pp. 252-60.

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Aycan, Z., Kanungo, R.N., Mendonca, M., Yu, K., Deller, J., Stahl, G. and Khursid, A. (2000), ``Impact of culture on human resource management practices: a ten-country comparison’’,Applied Psychology: An International Review, Vol. 49 No. 1, pp. 192-220

Aycan, Z., Kanungo, R.N., Sinha, J.B.P. (1999). Organizational Culture and Human Resource Management Practices: The Model of Culture Fit. Journal of Cross-Cultural Psychology [online]. 30:501, p.501-526. Available from: http://jcc.sagepub.com/content/30/4/501 , [Accessed 27 March 2011 ].

Arthur Andersen (2000), 2001’e Dogru Insan Kaynaklari Arastirmasi (Human Resource Management Research towards 2001), Sabah Yayincilik, Istanbul.

Armstrong, M (2006) “A Handbook of Human Resource Management Practice”, 10th Edition, London, Kogan page limited.Aktug, R. (2010). Lehigh University [online]. Available from: http://www.lehigh.edu/~rea204/ea_paper4.pdf [Accessed 29 March 2011].

Barlett, C A and Ghoshal, S (1991) Managing Across Borders: The transnational solution, London Business School, London

Bayraktaroğlu, S. and Ozdemir, Y. (2007) “İnsan Kaynaklarında Yaşanan Dönüşümler”. İçinde Kurt ve Bayraktaroğlu (Der.) Türkiye’de İşletmecilikte Yeni Perspektifler, İstanbul.

Bloomberg HT [online]. (2011). Yoksulluk sınırı 1510, 47 TL oldu. Available from: http://www.bloomberght.com/turkiye-ekonomisi/haber/867019-yoksulluk-siniri-1510-47-tl-oldu [Accessed 29 March 2011].

Buyukuslu, A. R. (1998), “Türkiye’de İnsan Kaynakları Yönetimi ve Gelişimine Kritik Bir Yaklaşım”, MESS Mercek, Türkiye Metal Sanayicileri Sendikası, pp. 11-15

Communicade [online]. (2005) Available from: http://www.communicaid.com/pdf/doingbusiness/Doing Business in Turkey.pdf [Accessed 28 March 2011].

DePauw [online]. (2011) Available from: http://academic.depauw.edu/mkfinney_web/teaching/Com227/culturalPortfolios/Turkey/Typologies.htm [Accessed 27 March 2011].

ETF [online]. (2006) Available from: http://www.etf.europa.eu/pubmgmt.nsf/(getAttachment)/1B3803887FE4C350C12571FF00453AD9/$File/NOTE6UBGRL.pdf [Accessed 27 March 2011].

Hofstede, G. (1991). Cultures and organizations. London: McGraw-Hill

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Mujtaba, B., Hinds, R., Oskal, C. (2004). Cultural Paradigms Of Age Discrimination And Unearned Privileges. Journal of Business [online]. 2:12, p.31-44. Available from: http://www.cluteinstitute-onlinejournals.com/PDFs/2004124.pdf [Accessed 29 March 2011].

Pricewaterhousecoopers [online]. (2003) Available from: http://www.pwc.com/en_TR/tr/assets/ins-sol/publ/privatepension.pdf [Accessed 28 March 2011].

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Redding, S. G., Norman, A.,&Schlander, A. (1994). The nature of individual attachment to theory: A review of East Asian variations. In H. C. Triandis, M. D. Dunnett, & L. M. Hough (Eds.), Handbook of industrial and organizational psychology (Vol. 4, pp. 674-688). Palo Alto, CA: Consulting Psychologists Press.

Sesen, E. [online] (2006). Equal Employment Opportunities in The Adaptation Process of Turkey to EU. In: ECPR 3rd Pan-European Conference, 21-23 September 2006, Bilgi University, Istanbul, Turkey. pp.1-11. Available from: http://www.jhubc.it/ecpr-istanbul/virtualpaperroom/057.pdf [Accessed 29 March 2011].

Tamie Matsuura (2007). NLI-Research [online]. Available from: http://www.nli-research.co.jp/english/socioeconomics/2006/li060807.pdf [Accessed 28 March 2011].

TodaysZaman[online] (2010). Turkey’s private pension system witnesses high growth. Available from: http://www.todayszaman.com/news-225982-turkeys-private-pension-system-witnesses-high-growth.html [Accessed 29 March 2011].

TÜSİAD [online]. (2004) Available from: http://www.tusiad.us/Content/uploaded/TURKISH-PENSION-SYSTEM-EXECUTIVE SUMMARY.PDF [Accessed 28 March 2011].

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