HUMAN RESOURCES MANAGEMENT PRACTICES AND APPROACHES IN

ISRAEL

An Investigative Paper Submitted in Partial Fulfillment of the Requirements of the Subject

HUMAN RESOURCE MANAGEMENT

of the Business Management Department

DAVAO ORIENTAL STATE COLLEGE OF SCIENCE AND TECHNOLOGY Guang-Guang, Dahican, Mati City

Sublitted to

DR. ADRIATICO P. MANLAPAZ, JR.

(Subject Instructor)

Sublitted by

VANESSA ONG SILATAN and CHERRYL PAZ S. SILVANO

October 10, 2012

The transition from a Socialist approach to a free market approach and the rise of a new high-tech sector are two remarkable shifts that have occurred in the last two decades in Israel. In the face of these changes, human resource (HR) practitioners are currently expected to assume new roles, adopt different work values, and apply appropriate strategies. HR managers in the low-tech industry still adhere to traditional values and strategies, including a reliance on trade unions and an emphasis on job security and the employees years of work experience and seniority as key criteria for promotion. In the emerging high-tech sector, HR managers have adopted new values and developed new strategies, including human resource management programs, employee empowerment, higher salaries and better benefits, while placing an emphasis on employees talents and qualifications.
Source:
http://www.emeraldinsight.com/journals.htm/journals.htm?issn=01437720&volume=22&issue= 3&articleid=848302&show=html&PHPSESSID=qj5kp1babsuadbfaj 47luam41

Recent changes in Israeli society and economy and their relation to Organizational Politics Over the past three decades, Israel has undergone significant economic, industrial and cultural transformations. These developments have shifted public values considerably and may indirectly affect OP and HR practices. For example, Sagie and Weisberg (2001) maintain that in recent years, Israeli society has gone from being ascetic, collectivistic, closed, and relatively homogeneous, to being more materialistic, individualistic, open, and pluralistic. The impact of this trend on workplace practice is substantial. Instead of considering one's work as an obligation toward one's family or a contribution to society, it is widely perceived today as a means toward individual selfsatisfaction and achievement of personal goals (Elizur & Sagie, 1999; Harpaz, 1999). Workers now place greater emphasis than they did in the past on values such as employee empowerment, participation in decision-making, job enrichment, and career development. In addition, Israeli work culture is witnessing a shift towards short-term orientations favoring immediate gratification and a lack of long-term organizational commitment. Several major factors have contributed to this shift:

(1) A shift towards an open market economy: The Israeli economy, in the first decades of its existence, was heavily controlled by the government and by the central labor union organization (the Histadrut) which owned nearly one third of Israel's industrial and financial institutions. In the last 25

years, in a gradual progression unrelated to ideological affiliations, successive governments have implemented important structural reforms that have sharpened market competition, dismantled monopolies and cartels, increased efficiency, and benefited the consumer. A great deal of entrepreneurial energy has been generated and high profits made in the business sector. Yet, at the same time, the gaps in Israeli society have widened; polarities have increased, communities and whole social sectors have been neglected and left behind. Naturally, while the gross domestic product per capita and the standard of living have risen considerably, the value of collective social responsibility seems to have declined sharply.

(2) The decline of the socialist ideology that previously led the government to an over-involvement in the Israeli market has been replaced in the last two decades by a more dynamic and competitive market economy approach. As part of this trend, some stateowned and Histadrut-owned companies have been privatized. Concurrently, the decline of collectivismin Israel has had a decisive (negative) influence on the tendency of workers to join trade unions or to communicate with management through unions (Caspi, Weisberg, & Ben-Hador, 2000). A much sharper decrease in the unionization rate has occurred in the private sector than in the public sector. Most employees in public sector organizations are trade union members, compared to a minority of private sector employees. Thus, employees in the private sector are

inclined today to adopt free market competition norms, including employment contracts with little protection from the trade unions. Thus the cultural atmosphere of individualism and privatization is apparently no less important than economic problems as a catalyst for the transformation of the kibbutz (Sagie & Koslowsky, 2000).

(3) The rise of the high-tech industry: Another very significant development in Israel that has had an impact on work-related values is the rapid development of the Israeli high-tech industry. Over the last 20 years, Israel has become a world leader in developing and selling high technology. Today it is considered one of the most entrepreneurial countries in the world. It has the third largest concentration of start-ups in the world after the Silicon Valley and the Boston area and is ranked second to the US and first relative to its population. So far, however, Israel has not managed to establish any major hi-tech manufacturing corporations, and the nature of the industry is based on relatively early selling of IPs. Yet, about 75% of the growth of the Israeli GNP in recent years has come from the hi-tech industry. This development does not only represent an industrial success. It has been associated with a considerable cultural shift and changing work values. The start-up industry is by nature short-term oriented, emphasizing cutting-edge and rapidly changing technologies, short product life cycles and high employee turnover. In addition, there are often shortages of highly

skilled employees, and companies find it necessary to offer excessive salaries and benefits to attract the necessary employees. This unique situation has created a culture emphasizing immediate gratification and a prevailing psychological contract assuming short-term and very restricted mutual commitment between the employee and the employer. The rise of this work-related culture coincided with similar global trends resulting from technological revolutions in electronic communications and the rapid growth of the internet, and is contributing to a growing short-term value orientation in the Israeli workforce. In such an environment, a short-term perspective and a drive for immediate gratification, both of which are highly typical of individualistic societies, are prevalent.
Source: http://poli.haifa.ac.il/~eranv/material_vigoda/HRMR.pdf

Reaction: The changes happening in Israel in terms of its HR practices are indications that Israel is now open to broader ideas in human resource management. We think that the traditional strategies in some industries are giving both positive and negative effects for the industry itself as well as the employees. The existence of a union in an industry can result in limited choices regarding hiring new employees or even limiting the potential for dismissal of a poorly performing worker. Whenever choices are limited, free enterprise suffers. Also, the labor costs incurred in increasing the wages of the union members is accounted for somewhere whether passed along to the customers through higher prices of goods or services, or hiring fewer workers and limiting the wages of the non-union members. Also, unions have the ability to stop the operation of the firm in times of strike. We also think that work experience and seniority are not key criteria for promotion. Although it is important to hire a person with a work experience, it would still be better to look on the performance itself by employee evaluation. Another negative practice in Israel is Socialism. There is very little freedom and the government dictates the ideas of people. In a socialist planning, there is no price system for land or capital goods and incentives are reduced. Its a good thing that this practice is now declining in Israel. On the positive note, we think that job security is essential. Who would want to transfer from one job to another from time to time? Every employee wanted to be secure, that he will be able to keep his job. However, job security is not in

the hands of the employer alone. Factors such as education, work industry, work location, and the necessary skills and experience are also to be considered. The free market and the free price system make goods from around the world available to consumers. It also gives the largest possible scope to entrepreneurs, who risk capital to allocate resources so as to satisfy the future desires of the consumers as efficiently as possible. Saving and investment can then develop capital goods and increase the productivity and wages of workers, thereby increasing their standard of living. The free competitive market also rewards and stimulates technological innovation that allows the innovator to get a head start in satisfying consumer wants in new and creative ways. The high technology industry has been one of the fastest growing industries in the world. It gives great contribution in a countrys gross domestic product (GDP) or the monetary value of all the finished goods and services produced within a country's borders in a specific time period, reduced inflation, and higher wages for workers. Technology has automated many of the critical processes in the industry as well as the household and thus reduced risk to human life. In the high-tech sector, HR managers in Israel have adopted new values and developed new strategies and we think that these are all good since they all concern the value of the workers. As we have discussed before in our HRM

subject, personnel program is important so that the management will be able to express its point of view towards its employees and show what the employees could expect from their company. Also, management will be able to recognize the desire of every worker which includes job security, good working conditions, fair wages and salaries, opportunities to grow, and so on. To sum it all up, the condition and practices in Israel is telling us that they are now open to changes, they value liberty or freedom, and that they are ready to compete with the other fast-growing countries. With all these changes, it gives an impact on human resources. Therefore, Israel will need continuous study on human resources management so as to attain their objectives and at the same time give a fair value on the workers.

BIBLIOGRAPHY/REFERENCES:
http://www.emeraldinsight.com/journals.htm/journals.htm?issn=01437720&volume=22&issue= 3&articleid=848302&show=html&PHPSESSID=qj5kp1babsuadbfaj 47luam41 http://poli.haifa.ac.il/~eranv/material_vigoda/HRMR.pdf