Cultural misunderstandings are a part of everyday life – but when you’re trying to harmonise HR policy and strategy across the world, the stakes are a lot higher
There is almost nothing in HR that makes more sense, on paper, than a global policy. By whichever measure you examine it, the world is getting smaller and more interconnected. Employees want to move seamlessly between continents and feel they have some sort of parity with colleagues on the other side of the world. Global consistency saves money and promotes fairness.
There’s also corporate governance to consider. “A global company will be held to account if problems arise anywhere in its business and it is seen not to have adhered to standards on, for instance, child labour or health and safety,” says Melanie Stancliffe, employment lawyer at Irwin Mitchell. “Having global policies and standards is not just about altruism or best practice, but hard commercial value.”
All of this is straightforward enough until you consider the practicalities. In some parts of the world, for example, it is perfectly legal to specify the age, gender and marital status of someone you are looking to recruit. A policy around LGBT inclusion, meanwhile, cannot count for much in a country where homosexuality is illegal. And in parts of Asia, if an employee dies in service, you are legally obliged to offer the job to their next of kin – which makes a meritocratic recruitment policy sound like hot air.
Broadly speaking, the pinch points arise in two areas: sheer legal incompatibility between different jurisdictions, and the cultural sensitivities that arise when what’s right and fair in one place is imposed on another. Stancliffe gives the example of Germany: companies there are legally obliged to agree certain terms of employment with works councils or other worker representatives, which means you cannot simply impose central policies. At the same time, particular cultural issues arise when Germans are asked to call out wrongdoing – given the association with some of the darker points in the country’s history – which means that, while a whistleblowing hotline is the right thing to do, it simply isn’t going to work.
Navigating these practicalities may mean being clear what you want on a strategic level, before considering what you can actually hope to achieve locally, says Laura Harrison, the CIPD’s strategy director. “Once you’ve gained deep intelligence from the markets, based on consultation with local managers, HR staff and lawyers, you then have to decide whether to address practices at a policy or a principles level,” she says. “And even if you do it at a policy level, you have to do it in a very collaborative way or it won’t make any difference. If your aim is to manage risk and maximise value, you have to negotiate rather than impose.”
Most businesses manage the issue of cultural and legal differences by having a relatively small number of non-negotiable global policies, supported by a longer list of global standards, which organisations in different countries have to adhere to as a minimum. Ben Bengougam, vice president of HR EMEA at Hilton Worldwide, estimates that his company can standardise around 90 per cent of the “important” aspects of HR policy. “With regard to things like the amount of time someone gets off, the access they get to external training, and disciplinary and performance management issues – we don’t need policies on those, because how different countries decide on those stems from the general culture that binds us all together,” he says. “People interpret them at a local level, but within the spirit of our culture and the way we do business as set out in our code of conduct.”
Where local laws don’t exist, or are less onerous than the global standard the company wants to introduce, you can encourage subsidiaries to comply with the more exacting standard as a matter of good practice. “You do get local resistance,” says Robert Mosley, an HR consultant who spent 13 years as senior vice president at Emirates Group. “For example, a subsidiary might resist a discrimination policy because their country has no discrimination legislation, but if you tackle it in the right way you can get them to raise the bar by adopting your standards.”
This is the approach favoured by international charity WaterAid. “We have a handful of policies that are truly global, and that everyone has to adhere to, wherever they work. These are things like our code of conduct, child protection, reporting serious malpractice, security, bullying and harassment,” says Rachel Westcott, director of people and organisational development. “Beyond that, we develop global standards, which are the minimum our federation members have to meet to be licensed by us – but they often go further with them.
“We have a growing list of these standards, including things such as performance management, reward, and health and safety,” she adds. “We try not to be prescriptive in terms of how they apply the standards, but we write them in a way that should be easy to comply with in any context. For example, we say that everyone needs retirement provision, supported by us, whether or not there is a legal requirement in any given country.”
But there’s a constant tension, and organisations ultimately have to be pragmatic, Westcott says: “Our standard on discrimination, for example, improves on the law in many countries where we operate, and we encourage local members to comply by making it very clear about our mission and values and that we expect them to raise standards.”
WaterAid’s aim in trying to harmonise its policies and standards is, says Westcott, “to create a common sense of what it is like to work for us in whichever of the 38 countries we operate in, and to get people to behave accordingly”. The driver at Imperial Tobacco, on the other hand, is to make HR more efficient and effective, but, above all, to generate better engagement internally throughout 75 countries. Imperial’s catalyst was an HR transformation designed to create what Rustin Richburg, director of global HR operations, describes as “a common taxonomy”, so that all 25,000 employees understand the same thing by ‘resourcing’ or ‘talent’, for example, and are clear what policies and standards they need to adhere to in their country.
“We use a traffic light system,” he says. “In red areas, you have to follow the policy, no matter what. Amber areas denote either best practice, or an agreement about how far a particular country can deviate from the guidelines. In green areas, you can do whatever you want so long as it is legal. I have a big chart in my office, with a list of the countries down one side, and columns next to it showing the policies they have, down to a detailed level – such as the long-service policy for a forklift truck driver in a specific area of Russia.”
The preparatory work involved “driving out interesting titbits, country by country, and working with local HR teams and lawyers in a series of workshops to continually pull them back into the global framework”, says Richburg. “In one country, for example, we had to work out how many wives we could load into the HR system, and in what order.”
The reason for harmonising the talent management system at Dutch bank ABN Amro is to provide HR professionals with data to help them see global trends, gaps and flashpoints that can be addressed through training or recruitment, says Derek Bruce, its head of international development, people and OD.
But he has to accommodate significant cultural variations, from different definitions of ‘talent’, to approaches to flexible working, to notions of a ‘career’. He says: “In Singapore, for instance, the culture is to work very hard at a job for two years, make a lot of money, and then move on. There is no brand loyalty, especially in the financial services sector. So the challenge there is how to recruit and retain people: we can’t make them stay with us, but we try to encourage it with a policy that supports sustainable learning.”
The bank is also encouraging people to work remotely in a results-based environment but, while that’s the cultural norm in the Netherlands, it’s very different in its Belgium office – despite the geographic proximity. In countries such as the US and Singapore, it will take even longer to achieve the shift, because of the strong presenteeism culture. ABN Amro allows local operations to adapt central policies to their own environment, while trying to encourage ‘better’ practice. But essential to the drive towards harmonising policies and standards is understanding that the head office country doesn’t have the monopoly on ‘best practice’, says Bruce. “For example, our French business is brilliant at talent management, so we drew heavily on their expertise when designing our new talent programme.”
Likewise, Westcott says WaterAid is inspired by the practices of individual countries. If people feel they have to ‘adapt’ to the standards of a ‘dominant’ country, they don’t fully engage: “You have to respect all countries and contexts and demonstrate that they have equal value and importance.”
But if this is the strategy, how do companies package their policies and standards for employees around the world?
Stancliffe advises putting overarching global policies in a global handbook and producing separate standards for each country. “It is practically easier than producing one big global manual, with certain sections applying to certain countries, and avoids the danger of employees becoming disgruntled if they perceive colleagues elsewhere to have more favourable terms,” she says.
Some produce only local handbooks, with common policies appearing in all of them. But there is general agreement that the handbook has to be electronic to allow for easy updating.
That won’t necessarily prevent cultural sensitivities from becoming a problem, of course. Bengougam points out that Hilton has a “global perspective on diversity and inclusion” and is determined to welcome guests regardless of race, gender or sexual orientation. But he admits: “We may occasionally face conflicts with our broader global philosophy on LGBT and inclusiveness – in this instance, we will always abide by local laws and cultural norms, and take a prudent, culturally sensitive approach where necessary.”
And simply writing more policies and increasing their complexity is counter-productive at a time when HR is being urged to hand people autonomy and focus on strategy rather than bureaucracy. “You can have some truly global overarching policies, such as disciplinary, grievance, harassment, alcohol or substance abuse and so on, because you will find no local laws that prevent you imposing the global standard,” says Mosley. “But for the main part, legal and cultural differences make global policies impossible to impose.”
The short answer, it seems, may be to encourage people simply to ‘do the right thing’ – a policy Google personified when it famously told employees: ‘Don’t be evil.’ But, as with so much in corporate life, that’s exactly the sort of common sense approach that runs the risk of being lost in translation.