The transferability question: comparing

HRM practices in the Philippines

with the US and Canada
1
Maria Carmen Galang
Abstract A survey of Philippine corporations was conducted to nd out the prevalence
and impact of practices in hiring, training and development, performance appraisal,
pay and occupational health and safety. Overall, many of the practices that are prescribed
in Western management can be found in most of the responding rms. Organizational
characteristics were also found to be associated with some of the practices. Many practices
were related to perceived organizational performance but only a few practices to voluntary
turnover rate. Comparisons with US and Canadian data show that there were differences in
most practices, but with the Philippines showing a higher extent of the HRM practice, and
more correlations with organizational characteristics than the US and Canadian samples,
suggesting that many of the practices developed in the West are easily transferred. Possible
explanations examined include differences in country context, differences in sample
characteristics and methodological artefacts from cross-cultural non-equivalence.
Keywords HRM practices; Philippines; comparative studies.
The question of transferability of management practices still remains paramount in
the minds of international managers, primarily because of a dearth of empirical evidence
and inadequate conceptual frameworks that can provide more specic guidelines.
The current study attempts to ll the rst gap by providing empirical data on an
Asian country that has not been well researched but which promises potential for
international business. The Philippines has a largely English-speaking population of more
than 75 million with an adult literacy rate of 94 per cent. Its performance in the economic
crisis that hit the East Asian region in mid-1997 provides condence for foreign
investment: it still posted positive, although modest, growth rates, and instituted sound
scal and economic reforms (Lim, 1999). Political risks may be a concern, but judging
from the past two recent political upheavals,
2
turnover in power is usually quick, with
relatively minimal disruption.
A survey of the top 1,000 corporations in the Philippines was undertaken in late 1998
to examine the question of transferability of various human resource management
(HRM) practices commonly found or prescribed in Western management. Specically,
the survey sought to determine (1) the prevalence of such practices in the Philippines,
(2) the nature of the business organizations in which these practices are utilized,
and (3) the organizational outcomes that are associated with such practices.
The International Journal of Human Resource Management
ISSN 0958-5192 print/ISSN 1466-4399 online q 2004 Taylor & Francis Ltd
http://www.tandf.co.uk/journals
DOI: 10.1080/0958519042000238419
Maria Carmen Galang, Faculty of Business, University of Victoria, POBox, 1700 STNCSC, Victoria,
BC, Canada V8W 2Y2 (fax: 250 721 6067; e-mail: cgalang@business.uvic.ca).
Int. J. of Human Resource Management 15:7 November 2004 12071233
The Philippine survey is part of the best practices in HRM research consortium, which
provided comparative data on the practices in the United States and Canada.
The Best Practices consortium
In 1991, a consortium of researchers from various institutions worldwide was created to
address the following questions (Teagarden et al., 1995; Von Glinow, 1993):
. Which HRM practices are most used currently? How effective are these practices?
. Which practices are related to organizational effectiveness and to employee job
satisfaction?
. Are there universal best HRM practices or only situation-specic best practices?
. Does HRM effectiveness vary with business strategy, national culture or subculture,
or the rms external environment?
Data are now available from twelve other countries Australia, Canada, China
(Peoples Republic), Indonesia, Japan, Kenya, South Korea, Mexico, Peru, Taiwan, the
United States and Venezuela and two regions Latin America and the Gulf states.
The consortium arrangement addresses the difculties in international management
research (e.g. complexity, cost, access, time constraints, methodological challenges).
Collection of country data is undertaken and personally funded by each member, but, by
pooling together these various data sets, all members have access to data that one might not
otherwise have had because of resource constraints. Because members also either come
from or have substantial exposure to and understanding of the country being surveyed,
the ethnocentric bias that has plagued much of international research is reduced. Each
member is able to reformulate the questions so as to achieve conceptual equivalence.
Although a standardized questionnaire is used so that data can be compared, the
consortium arrangement also allows each member to incorporate other items of personal
interest, while keeping in mind the practical consideration of the questionnaires length.
Existing literature
One of the primary driving forces when the best practices project started was to provide
guidance to business decision-makers in an increasingly global world, in terms of the best
way to manage human resources that would benet both the organization and its
members given various contextual characteristics (e.g. culture). Is the practice in country
A used in country B, and with the same positive results? The current state of research and
theory is not able to provide adequate answers (Teagarden and Von Glinow, 1997;
Tung and Punnett, 1993).
There is not much work covering several different countries simultaneously, and
that was the impetus for the best practices consortium (Von Glinow, 1993).
The Price Waterhouse Craneld Project (Brewster, 1993) surveyed selected European
countries, but none of the emerging economies so far. Moore and Jennings (1995)
covered Pacic Rim countries, and Pieper (1990) included several countries around
the globe (both excluding the Philippines however). Verma et al. (1995) covered the
newly industrializing economies in Asia including the Philippines. The country reports
in Moore and Jennings (1995), Pieper (1990) and Verma et al. (1995) are based on a
more qualitative approach, and often do not cover the same range of HRM practices.
The best practices project, on the other hand, utilizes the same data-gathering instrument
that would provide quantitative comparisons, and aims to cover countries in different
regions of the world.
1208 The International Journal of Human Resource Management
The development of theory that incorporates an international perspective has barely
started (Teagarden and Von Glinow, 1997). Given the global scope of the best practices
project, we are able to encompass different contexts that will eventually provide
empirical support for a comprehensive theory that identies the salient factors
driving differences and similarities, as well as factors inuencing successful transfer.
What empirical research is available has been limited to a few countries or a particular
region (e.g. Brewster, 1993; Moore and Jennings, 1995) and therefore is not a sufcient
basis for making generalizations. Hence, there are as yet no denitive answers to what is
universal, and what is context-specic, however context is dened (e.g. cultural, legal,
political, economic conditions of a country).
Methodology
A fourteen-page questionnaire was mailed in 1998, half from Canada and half from the
Philippines. Jobber and Saunders (1988) have shown that the country of origin of the mail
survey affects the response rate, but that such effects would differ depending on the
country involved. My contacts in the Philippines had advised that a survey originating
from an overseas university would have some prestige and credibility and therefore
increase response rates. No study has been done on the Philippines, so that information
gathered from this strategy would be useful for future surveys in the Philippines.
In terms of response rate, there was not much difference: eighty-two returns from
those mailed in the Philippines and eighty-six from those mailed in Canada. In terms of
organizational characteristics, chi-square analysis found signicant differences in only
two aspects, employment size and unionization. There were more companies that were
bigger (more than 1,000 employees) among those who responded to the Canadian
mailing, with twenty-ve respondents (37 per cent less missing answers) as opposed to
ten respondents (15 per cent) in the Philippine mailing, and there were more companies
that had fewer than 250 employees in the Philippine mailing, with thirty respondents
(41 per cent) as opposed to fteen respondents (22 per cent) in the Canadian mailing.
The respondents from the Canadian mailings were also more unionised (62 per cent of
sample, n 41) while those in the Philippine mailing were more non-union (56 per cent,
n 38). In terms of HRM practices, only with respect to experience as a hiring
criterion and training as a reward did the two groups differ, with the Philippine mailing
having a higher mean for experience and the Canadian mailing having a higher mean for
the training practice.
Follow-ups were made to ensure a higher response rate (Ferrell and Krugman, 1983):
rst, a postcard reminder, with the necessary contact numbers to request replacement
copies if needed; second, a telephone follow-up; third, a newcover letter anda complete set
of survey materials. As a way of enticing respondents to complete the survey, a stamped
envelope addressed to the research assistant based in the Philippines was provided and a
summary report offered to respondents. Ninety-three of the whole sample (55 per cent)
responded they wanted a copy of the report, and there were no differences in terms of
organizational characteristics between those wanting a copy and those who did not.
Variables
3
HRM practices
The practices covered by the survey included the functional areas of hiring (number of
practices 8), training and development n 10; performance appraisal n 11; pay
n 9 and occupational health and safety n 10; for a total of forty-eight practices.
Galang: The transferability question 1209
Respondents were asked the extent to which the listed items applied to their organization,
using the following scale: 1 not at all; 2 to a small extent; 3 to a moderate extent;
4 to a large extent; 5 to a very great extent.
Organizational characteristics
Information about employment size, unionization, industry, foreign ownership, product
diversity and organizational life cycle was also gathered. In addition, perceived
competitiveness of the business environment and status of the HRM department were
measured through a 5-point scale, with only the extreme ends anchored as very false for
1 and very true for 5. Perceived competitiveness of the business environment consisted
of four statements: marketplace competition has increased dramatically; conditions in
our business environment are rapidly changing; government regulations are rapidly
changing; the technology in our product/services is complex. Internal reliability for this
scale was at a 0:67: Status of the HRM department was the average rating given to
four statements: it is viewed as an important department in the company; it works closely
with the senior management group on the key strategic issues facing the company;
it seems to keep informed about the best human resource management practices that are
used in other countries; it is viewed as an effective department. Internal reliability was at
a 0:83: The average score was computed only for those respondents who indicated
that they had a separate HRM unit.
Organizational outcomes
Perceived organizational performance was measured by a 5-point scale consisting of ten
items, with internal reliability at a 0:92: Respondents were asked how accurately each
of the following described their respective companies (1 very false and 5 very true):
produces high quality goods; has a promising future; manages its people well; is exible
enough to change; has high quality people; has strong unied culture; is very effective
overall; has very satised workforce; has very productive workforce, and is seen as
leader in industry.
Voluntary turnover rate was determined by the question: About what voluntary
turnover rate has your company had in the last year? with an option to answer
dont know.
Results of the Philippine survey
Prole of respondents
Responses to the mailed questionnaire were received from 168 organizations. Leaving
out the questionnaires that were returned undelivered n 27; this constitutes a
response rate of 17.2 per cent. Most of the organizations belong to the services sector
(55 per cent), while 32 per cent are in manufacturing, with most (60 per cent) having
more than one related product/service. The majority (74 per cent) have 1,000 or fewer
employees, with an average voluntary turnover rate of 8.19 per cent. A little over half
(53 per cent) are unionized; and, among those unionized, 57 per cent have more than
half of their employees belonging to the union(s). Of those who responded to the foreign
ownership question (n 81; 48 per cent), thirty-six indicated that they are wholly locally
owned, and twenty are 100 per cent foreign-owned. Only ve organizations (3 per cent)
did not have a separate HRM unit. HRM departments had an average of 14.4 employees,
ranging from a minimum of one to a maximum of 197, with the median at eight.
1210 The International Journal of Human Resource Management
Most of the individuals who lled out the questionnaire hold jobs in HRM (78 per cent
of all respondents), and have an average tenure of 7.67 years in the company and 5.69
years in the position. The majority are less than 40 years old (53 per cent) and female
(58 per cent). Except for one, all completed post-secondary education (four-year degree),
with 41 per cent having some graduate work and 27 per cent a graduate degree.
Extent of HRM practices
Table 1 shows the percentage of rms utilizing each of the listed practices, among those
that responded to the particular item. For all practices, except for two under hiring
criteria, there were at least some rms reporting that the specied item did not apply.
The top ve practices, with the most number of rms reporting that the practice applied at
least to some extent, are the hiring criteria of proven work experience in a similar job
(n 166; 100 per cent), ability to perform technical job requirements (n 165; 100 per
cent) and potential to do a good job (n 163; 98.2 per cent), training to
improve technical job abilities (n 165; 98.2 per cent), and performance appraisal
to document subordinates performance (n 165; 98.2 per cent). The bottom ve
Table 1 Frequency distribution (%) of HRM practices in the Philippines
Practice Not
at all
Small
extent
Moderate
extent
Large
extent
Very
great
extent
Hiring criteria
Ability to perform technical
job requirements
0 3.0 18.2 44.8 33.9
Ability to get along well
with others
2.4 9.1 38.8 40.6 9.1
Right connections 21.7 25.9 26.5 21.1 4.8
Belief that person will stay
with company
5.5 15.8 37.0 27.9 13.9
Proven work experience
in similar job
0 4.8 20.5 44 30.7
Potential to do a good job 1.8 10.8 41.6 33.1 12.7
Fit with companys
values & ways
2.4 7.2 33.1 38.6 18.7
Future co-workers opinions 33.1 29.5 24.1 12.0 1.2
Training purposes
Provide reward to employees 10.2 31.9 33.7 19.3 4.8
Improve technical job abilities 1.8 10.1 28.6 36.3 23.2
Improve interpersonal abilities 2.4 16.7 33.9 32.7 14.3
Remedy past poor performance 5.4 17.9 44.0 20.2 12.5
Prepare employees for future job
assignments
3.0 18.0 30.5 32.9 15.6
Build teamwork within company 3.6 12.5 35.1 28.0 20.8
Initial training for new employees 5.4 25.1 34.1 24.6 10.8
Help employees understand
the business
4.8 24.4 39.3 22.0 9.5
Provide skills for a number of
different jobs
7.1 19.6 35.1 27.4 10.7
Teach employees about
companys values
3.0 21.6 29.3 30.5 15.6
Galang: The transferability question 1211
Table 1 (Continued)
Practice Not
at all
Small
extent
Moderate
extent
Large
extent
Very
great
extent
Appraisal purposes
Determine appropriate pay 7.7 23.8 28.6 28.6 11.3
Document subordinates
performance
1.8 8.3 29.2 38.1 22.6
Plan development activities 5.4 22.0 33.3 25.0 14.3
Salary administration 9.0 15.0 33.5 25.7 16.8
Recognition of subordinate
for things done well
2.4 13.1 32.1 34.5 17.9
Lay out specic ways
to improve performance
3.0 21.4 29.2 27.4 19.0
Discuss subordinates views 8.3 25.0 30.4 24.4 11.9
Evaluate subordinates
goal achievement
7.1 16.1 35.7 24.4 16.7
Identify subordinates
strengths & weaknesses
3.6 11.9 32.1 32.7 19.6
Allow subordinate to
express feelings
7.7 24.4 31.5 24.4 11.9
Determine subordinates
promotability
2.4 9.0 40.1 28.1 20.4
Pay
Incentives as important part in
pay strategy
10.3 18.2 22.4 28.5 20.6
Benets as important
part of total pay package
2.4 7.8 19.3 41.0 29.5
Portion of earnings contingent
on group performance
14.2 22.8 25.9 23.5 13.6
Long-term results more important 10.9 27.3 26.7 25.5 9.7
Seniority does not enter into pay
decisions
10.3 25.5 35.2 21.8 7.3
Incentives signicant portion of
total earnings
9.6 26.9 31.3 27.7 5.4
Very generous employee
benets package
7.3 20.6 28.5 33.9 9.7
Futuristic orientation of pay system 17.0 31.5 28.5 17.0 6.1
Job performance mainly
determines pay raises
5.4 22.3 27.7 27.1 17.5
Health & Safety (HS)
HS is considered top priority 4.3 14.7 31.9 28.8 20.2
HS management as a
strategic concern
3.7 17.8 33.1 30.7 14.7
Existing HS programme
is very cost effective
6.3 11.3 42.8 30.2 9.4
Very proactive HS programmes 7.4 17.2 36.2 27.6 11.7
Objectives clearly understood
by employees
7.4 25.9 33.3 24.7 8.6
Active promotion of HS programmes 7.5 21.3 31.3 27.5 12.5
Safety as an individuals
principal responsibility
3.7 19.3 39.1 27.3 10.6
1212 The International Journal of Human Resource Management
practices (with the most number of rms indicating that this practice does not apply at all)
are the use of future co-workers opinions as a hiring criterion (n 55; 33.1 per cent),
top management as a signicant barrier in health and safety programmes (n 43;
27 per cent), right connections as a hiring criterion (n 36; 21.7 per cent), regular
conduct of health and safety inspections of work sites (n 32; 19.9 per cent) and
futuristic orientation of the pay system (n 28; 17 per cent).
Organizational characteristics
Various statistical analyses (e.g. t-tests, one-way analyses of variance and bivariate
correlations), depending on the nature of the scale used to measure the variable, were
conducted to determine whether HRM practices differed according to the following
organizational characteristics: employment size, unionization, industry, product
diversity, life cycle, foreign ownership, perceived competitiveness of the environment
and status of the HRM department. Table 2a shows the F, t and r values from these
statistical analyses for hiring, training, performance appraisal and pay, and Table 2b for
health and safety practices.
The status of the HRM department accounted for signicant differences in almost all
HRM practices (forty-two practices, or 88 per cent of all practices listed). This result may
not be surprising considering that numerous studies in the US have found positive and
signicant relations between the presence of a HRM department and HRM practices
(Galang and Ferris, 1997). The six exceptions are the use of right connections, future
co-workers opinions and ability to get along well with others as hiring criteria; seniority
not entering into pay decisions; lack of top management support in occupational health
and safety, and legal compliance as main reason for health and safety programmes.
The next organizational characteristic that accounts for many differences in HRM
practices is perceived competitiveness of the environment: almost all the purposes listed
for performance appraisal (number of practices 9, 82 per cent) except for documenting
subordinates performance and salary administration; and almost all items under health
and safety (n 7; 70 per cent), except for existing health and safety programme as very
cost effective, the lack of top management support as a signicant barrier and legal
compliance as a main reason for health and safety programmes. For hiring, training and
pay, the difference that competitiveness of the environment makes is much more limited.
Signicant associations were found only for ability to get along well with others, t with
the companys values and ways of doing things and future co-workers opinions as hiring
criteria (n 3; 38 per cent); initial training for new employees and helping employees
understand the business as a purpose of training (n 2; 20 per cent); and the futuristic
Table 1 (Continued)
Practice Not
at all
Small
extent
Moderate
extent
Large
extent
Very
great
extent
Lack of top management
support as signicant barrier
27.0 29.6 23.3 13.8 6.3
Legal compliance as main
reason for programmes
7.5 17.4 36.0 24.8 14.3
Regular conduct of
worksite inspections
19.9 25.5 23.0 24.2 7.5
Galang: The transferability question 1213
orientation of the pay system (n 1; 11 per cent). Overall, perceived competitiveness of
the business environment accounted for differences in twenty-one practices (44 per cent).
Employment size accounted for differences in six of the training practices (60 per
cent), but only a few in the other functions (two practices in performance appraisal and
one pay practice). Unionization, industry, product diversity and organizational life cycle
accounted for only a few differences in total (n 4 or 8 per cent; 7 or 15 per cent; 2 or 4
per cent; and 1 or 2 per cent, respectively), while foreign ownership was not signicantly
associated with any practice across all functions.
Organizational outcomes
Correlations between HRM practices and organizational outcomes were computed.
Table 3 shows the correlation coefcients (r) between each of the listed HRM practices
and perceived organizational performance and voluntary turnover rate.
All ve functional areas were associated with perceived organizational performance
(a total of forty-two practices, or 88 per cent). All listed purposes in training
and performance appraisal were signicantly correlated with perceived organizational
performance. In pay, only seniority does not enter into pay decisions was not
signicantly correlated. Likewise, only one listed occupational health and safety practice
was not signicant (legal compliance as the main reason for health and safety
programmes); and lack of top management support as a signicant barrier was in the
negative direction. In hiring, three of the criteria listed were signicant and in the positive
direction: ability to perform the technical requirements of the job, t with companys
values and ways of doing things, and belief that the person will stay with the company
(ve years or longer). Having the right connections (school, family, friends, region,
government, etc.) was also signicantly correlated but in the negative direction.
None of the health and safety practices were signicantly related to voluntary turnover
rate, but the number of signicant correlations in the other functional areas was very low
(a total of 11 practices, or 23 per cent).
Comparison with US and Canada
In summary, HRM practices that are commonly found or prescribed in Western
management can also be found in the Philippines. This should not come as a surprise to
those familiar with the country, as much of the management education is modelled on US
theory and practice. The results would, of course, be more meaningful with some
comparative data, particularly with Western countries. Table 4 shows the means for the
Philippines, US and Canada (the Canadian and US surveys did not include health and
safety practices). Analysis of variance with post hoc comparison was conducted for each
HRM practice to determine whether means differed signicantly across the three
countries, and which country differed signicantly. As the bold and italic text in the table
indicate, there is much similarity between the US and Canada, which is expected, given
their geographical proximity, closer economic relations, cultural afnities and
similar economic systems. What is surprising is that the means of most of the practices
for the Philippines are signicantly higher than either the US or Canada, or both.
Although there was not an explicit hypothesis as to directions, one would have expected
that, HRM being a creation of Western management, the Philippines would have had
lower levels of such practices.
Nonetheless, there were strong similarities across the three countries. In terms of
means, four were in the top ve most prevalent practices in all three countries: the hiring
criterion of ability to perform the technical job requirements (this practice also had the
1214 The International Journal of Human Resource Management
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3
:
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8
*
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3
:
3
6
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Galang: The transferability question 1215
T
a
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2
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3
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6
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3
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3
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3
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5
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1216 The International Journal of Human Resource Management
T
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1218 The International Journal of Human Resource Management
T
a
b
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2
a
(
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t
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l
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t
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r

0
:
3
8
*
*
r

0
:
2
7
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*
r

0
:
2
9
*
*
I
n
c
e
n
t
i
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s
a
s
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m
p
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a
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t
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r

0
:
2
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r

0
:
2
5
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B
e
n
e

t
s
a
s
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m
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r

0
:
3
8
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r

0
:
2
4
*
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e
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n
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t
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f
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m
a
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e
r

0
:
2
7
*
*
r

0
:
2
3
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r

0
:
2
5
*
*
L
o
n
g
-
t
e
r
m
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e
s
u
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t
s
m
o
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i
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p
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t
a
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r

0
:
3
7
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*
r

0
:
2
9
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r

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:
2
8
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a
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e
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s
r

2
0
:
2
3
*
I
n
c
e
n
t
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s
s
i
g
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c
a
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r

0
:
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2
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V
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R

0
:
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3
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r

0
:
3
7
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r

0
:
2
7
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r

0
:
2
0
*
J
o
b
p
e
r
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m
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l
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p
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r

0
:
3
8
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0
:
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0
:
3
8
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o
.
o
f
s
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g
n
i

c
a
n
t
l
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a
s
s
o
c
i
a
t
e
d
p
r
a
c
t
i
c
e
s
3
4
(
8
9
.
5
%
)
2
5
(
6
5
.
8
%
)
2
8
(
7
3
.
7
%
)
*
*
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p
,
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1
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.
0
1
.
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p
,
.
0
5
.
Galang: The transferability question 1219
highest mean for all three countries); proven work experience in similar job; training to
improve technical job abilities, and benets as an important part of the total pay package.
Only one practice in the bottom ve, or least prevalent practice, was shared by all three
countries: futuristic orientation of the pay system.
As with the Philippine sample, the status of the HRM department of the US and
Canadian samples correlated with greatest number of practices (34 or 89.5 per cent out of
38 practices, 25 or 65.8 per cent, 30 or 78.9 per cent for the Philippines, the US and
Canada respectively), in comparison to all the other organizational characteristics
(see Table 2a). Comparing the three countries, however, there were fewer practices that
were signicantly correlated across all organizational characteristics for the US and
Canadian samples. The average percentage of practices that correlated signicantly with
the organizational characteristics other than status of HRM department was 9.7 per cent
Table 2b Health and safety (HS) practices signicantly associated with organizational
characteristics for the Philippines
Employment size
(none)
Unionization
Existing HS programme is very cost effective t 2:70**
Very proactive HS programmes t 2:36*
Active promotion of HS programmes t 2:07*
Industry
Very proactive HS programmes F 2:79*
Active promotion of HS programmes F 2:66*
Product diversity
(none)
Life cycle
Very proactive HS programs t 2:04*
Objectives clearly understood by employees t 2:52*
Foreign ownership
(none)
Status of the HRM department
HS is considered top priority r 0:27**
HS management as a strategic concern r 0:35**
Existing HS programme is very cost effective r 0:24**
Very proactive HS programmes r 0:35**
Objectives clearly understood by employees r 0:34**
Active promotion of HS programmes r 0:40**
Safety as individuals principal responsibility r 0:37**
Regular conduct of worksite inspections r 0:23**
Business competition
HS is considered top priority r 0:21*
HS management as a strategic concern r 0:19*
Very proactive HS programmes r 0:26**
Objectives clearly understood by employees r 0:21*
Active promotion of HS programmes r 0:25**
Safety as individuals principal responsibility r 0:27**
Regular conduct of worksite inspections r 0:18*
**p , .01.
*p , .05.
1220 The International Journal of Human Resource Management
T
a
b
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3
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r
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p
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d
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n
t
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f
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u
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d
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s
s
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r
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g
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s
&
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s
2
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5
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6
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l
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1
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*
Galang: The transferability question 1221
T
a
b
l
e
3
(
C
o
n
t
i
n
u
e
d
)
H
R
M
f
u
n
c
t
i
o
n
P
h
i
l
i
p
p
i
n
e
s

1
6
8

U
S

1
4
5

C
a
n
a
d
a

1
2
6

V
o
l
u
n
t
a
r
y
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u
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r
O
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a
n
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9
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e
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e

t
s
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1222 The International Journal of Human Resource Management
Table 4 Means of HRM practices in the Philippines, US and Canada
Practice Philippines
N 168
U.S.
N 145
Canada
N 126
Hiring criteria
Ability to perform technical
job requirements
4.10 3.98 4.08
Ability to get along well
with others
3.45 3.45 3.44
Right connections*** 2.61 2.66 2.06
Belief that person will stay
with company***
3.29 2.76 3.06
Proven work experience in
similar job**
4.01 3.68 3.82
Potential to do a good job*** 3.44 2.97 3.10
Fit with companys values & ways 3.64 3.44 3.58
Future co-workers opinions** 2.19 2.42 1.94
Training purposes
Provide reward to employees** 2.77 2.39 2.45
Improve technical job abilities 3.69 3.67 3.85
Improve interpersonal abilities** 3.40 2.99 3.19
Remedy past poor performance*** 3.17 2.54 2.68
Prepare employees for future
job assignments***
3.40 2.74 3.00
Build teamwork within company*** 3.50 2.84 3.02
Initial training for new employees*** 3.10 2.54 2.56
Help employees understand
the business***
3.07 2.46 2.69
Provide skills for a number of
different jobs***
3.15 2.36 2.62
Teach employees about
companys values***
3.34 2.64 2.76
Appraisal purposes
Determine appropriate pay 3.12 3.14 3.22
Document subordinates
performance**
3.71 3.56 3.33
Plan development activities** 3.21 2.73 2.98
Salary administration 3.26 3.22 3.11
Recognition for things done well 3.52 3.31 3.27
Lay out specic ways to
improve performance*
3.38 3.07 3.23
Discuss subordinates views 3.07 2.91 3.19
Evaluate subordinates goal achievement 3.27 3.15 3.25
Identify subordinates strengths &
weaknesses
3.53 3.35 3.27
Allow subordinates to express
feelings
3.08 2.83 2.98
Determine subordinates
promotability***
3.55 2.69 2.92
Pay
Incentives as important part in
pay strategy***
3.31 2.77 2.86
Benets as important part of total
pay package
3.87 3.72 3.78
Galang: The transferability question 1223
for the US (ranging from 2.6 per cent of all practices for unionization to 18.4 per
cent for employment size) and 4 per cent for Canada (ranging from 0 for
unionization, industry type and organizational life cycle to 15.8 per cent for
perceived competitiveness of the business environment). For the Philippines, the
average was 14.5 per cent, ranging from 2.6 per cent for unionization and
organizational life cycle to 39.5 per cent for perceived competitiveness of the
business environment. Apart from these differences in the number of signicant
correlations, the US and Canadian samples also show negative correlations. In the
US sample, all four practices signicantly correlated with perceived competitive-
ness are in the negative direction, and the correlation of seniority entering into pay
decisions with status of the HRM department is negative. Both US and Canadian
samples show negative correlations between the use of right connections as a
hiring criterion and status of the HRM department.
In terms of correlations with organizational performance (see Table 3), the
Philippine sample has the highest percentage of practices that correlated with
organizational performance at 86.8 per cent (ranging from 50 per cent for hiring to
100 per cent for training and performance appraisal), followed closely by Canada at
78.9 per cent (ranging from 62.5 per cent for hiring to 90.9 per cent for performance
appraisal) and a distinct third is the US with 44.7 per cent (ranging from 33.3 per
cent for hiring and pay to 60 per cent for training). Across all three countries, the
functional area with the highest number of practices correlating with organizational
performance was training: the Philippines at 100 per cent, Canada at 90 per cent and
the US at 60 per cent. Only one practice (use of right connections as a hiring
criterion) was negatively correlated with perceived organizational performance, and
this was in both Philippine and Canadian samples, while the correlation in the US
sample was not signicant.
Table 4 (Continued)
Practice Philippines
N 168
U.S.
N 145
Canada
N 126
Portion of earnings contingent on
group performance***
2.99 2.46 2.52
Long-term results more important*** 2.96 2.01 2.41
Seniority does not enter into
pay decisions*
2.90 2.96 2.61
Incentives signicant portion of
total earnings***
2.93 2.20 2.15
Very generous employee benets
package
3.18 3.16 3.19
Futuristic orientation of pay system*** 2.64 1.74 2.02
Job performance mainly determines
pay raises***
3.29 2.42 2.58
***p , .001.
**p , .01.
*p , .05.
Values in bold are not signicantly different.
Values in italics are signicantly different.
1224 The International Journal of Human Resource Management
Discussion
While the primary impetus of the Best Practices consortium was to provide comparative
data of rich descriptions, an understanding of the factors that drive differences or
similarities is necessary in generalizing and developing a theoretical framework. The
comparative data for the three countries illustrate differences and similarities, and, while
no expectations or predictions were made a priori, an attempt is made to explore possible
explanations. Such explorations serve to focus future research in order to advance our
understanding, although they may not provide denitive explanations in the current case.
Three possible sources might explain the observed differences and similarities: country
context, organizational factors or sample differences, and methodological artefacts.
While the primary interest in cross-cultural comparisons is differences in country
context, one must ensure that alternative explanations because of sample differences or
methodological artefacts can be ruled out.
Differences in country context
Earlier it was pointed out that differences are not surprising considering that the US and
Canada are similar in a lot of respects, while the Philippines was not. What needs to be
explored is the reason why the Philippines turned out to have higher means. Particularly
noticeable in Table 4 is the number of signicant differences in the area of training
between the Philippines, on the one hand, and the US and Canada, on the other. Being
advanced industrialized countries, the US and Canada might already have better trained
employees in the external labour market, so that it becomes less important for rms to
provide training. Aside from that, the Philippines is still in the catch-up phase, and so will
implement what they see as the practices that help, or have helped, these two countries
progress or advance. Given the access to information about management practices and
the fact that management education has largely been based on US theories, this then is
likely to explain the higher means observed in the Philippine sample. The diffusion of
management knowledge is supported by similarities in the top ve most prevalent
practices in all three samples, but the non-similarity in the bottom ve, or least prevalent,
practices suggests that this diffusion is not complete and is not without inuence from
other factors.
The inuence of country context may be examined, not just in the levels of HRM
practices, but also in the interrelationships among the variables, both in terms of the
number and direction of signicant correlations. There do not seem to be any country
differences in how the status of the HRM department and unionization compare with
other organizational determinants in inuencing the rms HRM practices. Across all
three countries, the status of the HRM department, with the highest number of signicant
correlations, is the most inuential and its inuence generally is in the positive direction,
while unionization, with the least number, does not seem to have a consistent effect on
organizations across the three countries.
Observed differences in the direction of correlations across the three countries may
reect differences in the underlying cultural values or beliefs. The negative direction for
all signicant correlations for perceived competitiveness in the US sample, compared to
the positive and non-signicant correlations for the Philippines and Canada respectively,
may indicate a different understanding or belief with respect to what it takes for rms to
respond effectively to the competitiveness in the business environment. The negative
correlation of use of right connections as a hiring criterion with the status of the HRM
department in the US and Canadian samples is as expected, while the observed non-
signicance for the Philippine sample may indicate that cultural expectations are still
Galang: The transferability question 1225
driving some of the decisions of some HRM departments. However, as this practice is
one of the ve least prevalent in the Philippines and is negatively correlated with
perceived organizational performance, this may mean that some Western inuence is
beginning to take place. Thus, while HRM departments in the Philippines may feel that
this practice should no longer be used, based on what they know from best practices in
the West, expectations from other stakeholders in the organization inuence some HRM
departments to continue to implement this practice. The non-signicant correlation of
this practice with organizational performance in the US sample may indicate that this
practice is being used in some rms, even if not acknowledged as a best practice, and that
some rms may benet from it.
Differences in the organizational proles of the country samples
It should be noted that the samples from the three countries differed signicantly in terms
of the status of the HRM department, industry sector, product diversity, organizational
life cycle and employment size (see Table 5). Only in perceived competitiveness of the
environment, perceived organizational performance and unionization were the three
samples not signicantly different.
1
The status of the HRM department in the Philippines
was signicantly higher than in the US and Canada, which did not differ signicantly
from each other. Most of the US and Canadian responding rms were in the
manufacturing sector (61 per cent and 44 per cent respectively, compared to
32 per cent for the Philippines), and had more than 1,000 employees (80 per cent
and 62 per cent respectively, compared to 26 per cent of the Philippine sample). The US
sample had the highest number of rms that had unrelated products and services (22 per
cent), with the Philippine and Canadian samples at only 5 per cent and 6 per cent
respectively. Voluntary turnover rate was not measured for the US and Canadian samples.
One probable explanation of the higher means in the Philippine sample is the higher
status of the HRM department in the Philippines, particularly when this organizational
variable also correlated with the most HRM practices in comparison to the US and
Canada. Gooderham et al. (1999) argued and found that the institutional environment,
which is reected to the differences in the role, status and position of the personnel
function within the rm, is a particularly salient consideration in comparative studies,
explaining variations in HRM practices in different countries.
There are other organizational characteristics in which the three country samples
differ, although the effect on HRM practices is unclear because of the inconsistency with
what might logically be expected. For instance, large organization size is usually
associated with more practices, but there are more large organizations, in terms of
employment size, in the Canadian and US samples. There are more organizations in the
services sector in the Philippine sample, and it could be argued that the services sector,
like banking and nancial institutions and consulting rms, is more likely to have the
kinds of HRM practices covered by the survey than an older industry like manufacturing.
However, the difference in terms of organizational life cycle, where there were more
organizations that considered themselves mature in all three samples, seems to contradict
this explanation.
According to Aycan et al. (1999), the effects of signicant differences in the
characteristics of samples can be minimized statistically by co-varying them out.
Removing the effect of the status of the HRM department, the variable that signicantly
correlated with the most number of practices, would show whether the observed
differences in HRM practices across the three countries (see Table 4) can be attributed to
this organizational characteristic, rather than differences in other respects. In order
1226 The International Journal of Human Resource Management
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Galang: The transferability question 1227
to remove the effect of the status of the HRM department, an analysis of covariance
(ANCOVA) was conducted with HRM department status included as a covariate. While
the samples from the three countries also varied signicantly in other organizational
characteristics, these characteristics were not associated with as many HRM practices as
HRM department status. Nonetheless, in order to further assess their effect, these other
characteristics, namely employment size, product diversity, industry type and
organizational life cycle, were also included in the analysis as main factors, as well as
second-order interaction terms with country.
As suspected, status of the HRM department was a signicant covariate, and removing
its effect then reduced the number of HRM practices where country had an effect
(whether as main effect or interaction effect with other organizational characteristics) to
just eight: proven work experience in similar job as a hiring criterion; performance
appraisal to document subordinates performance; training to remedy past poor
performance, to build teamwork within the company, to help employees understand the
business, to provide skills for a number of different jobs, to teach employees about
companys values, and as initial training for new employees. Note that six of these
practices are with respect to training, supporting one of the earlier interpretations of
country context. The only practice where status of the HRM department was not a
signicant covariate is that of future co-workers opinions as hiring criterion, with
organizational life cycle as the only signicant factor.
Organizational characteristics, particularly the status enjoyed by the HRM
department, thus have an effect, and perhaps an even stronger inuence on
HRM practices than external factors, but which HRM practices depends on which
organizational characteristics. Researchers, therefore, need to be careful when doing
comparative studies. Samples with similar organizational characteristics should be
selected, or organizational characteristics that are likely to affect HRM must be measured
so that their effects can be parsed out statistically, if the true effect of country context is
to be established.
Methodological artefacts
Perhaps the biggest concern in ensuring valid conclusions from cross-cultural studies is
that of equivalence: whether the nding is a true cross-cultural difference or an artefact
of the research methodology beyond that of non-comparable samples. Hui and Triandis
(1985), Mullen (1995) and Singh (1995) discuss the various equivalence problems in
cross-cultural research and suggest several strategies aimed at the research design,
diagnosing data or adjusting statistical analyses. Cross-cultural equivalence, specically
in terms of conceptual or functional equivalence, equivalence in operationalization and
instrument equivalence, needs to be established so that direct, especially quantitative,
comparisons are justied.
The various strategies that have been suggested have their respective limitations
as well as advantages. There is also a difference in opinion on the use of these strategies.
Singh (1995) considers the assessment or diagnosis of data provides evidence of the
more abstract aspects of equivalence. For Hui and Triandis (1985), demonstrating
instrument equivalence does not necessarily mean that conceptual or functional
equivalence can be assumed, as these aspects of equivalence are seen to be progressive,
from the more concrete to the higher, more abstract. Accepting or testing at a certain
level is meaningful only when all higher levels have been shown. Thus, since some
strategies address only one or some aspects of equivalence, using a combination of
different strategies is highly advisable.
1228 The International Journal of Human Resource Management
The problems that threaten valid cross-cultural comparisons will be discussed within
the context of the current research. The rst two aspects of conceptual or functional and
operationalization equivalence have been addressed to a large extent. The idea of a
consortium of international researchers allows the use of researchers who have an
understanding of at least two cultures, one of which includes the culture of origin of
the study. However, in future research, these aspects of equivalence can
be further strengthened by conrming the individual researchers understanding or
interpretation with other cultural insiders, at the stage of research design, and also at the
stage of interpreting the ndings.
Instrument equivalence involves item equivalence and scalar or metric equivalence.
Item equivalence is usually addressed prior to data collection by translation, at
minimum a technique called back-translation. In the case of the Philippines,
no translation was needed since the target population of the survey is bilingual.
While translation was deemed unnecessary, a review of studies on bilinguals
would help in addressing language concerns.
Bennett (1977) studied the response characteristics of Filipino bilinguals.
Using a questionnaire that measured perceptions of organizational characteristics, the
respondents who answered in the native language had more positive responses than those
who responded to the English version of the same questionnaire. The explanation
suggested was the use of a different reference group depending on the language of
presentation: the English response group used as their reference group the Europeans at
the top of the organization, categorising them unfavourably, while those using the native
language saw the items as relating to them as managers, and therefore answered more
positively. If the results of Bennetts study were applied to the current one, then the use of
the English language would likely not have resulted in higher means for the use of the
HRM practices.
Another study of bilinguals, this time Spanish/English, showed an opposite effect
(Marin et al., 1983). In this case, responding in English was inuenced by social
desirability, although Marin et al. also cautioned the reader about generalizing to all
bilinguals. Another difference is that the respondents were asked to answer a
questionnaire in both languages at different times, rather than have different groups, one
who responded in the native language and one in the English language, as in Bennetts
study with Filipino bilinguals. What perhaps can be generalized to bilinguals is Bond and
Yangs (1982) suggestion that the response in English (as the second language), either
demonstrating ethnic afrmation or cross-cultural accommodation, depends on how ego-
involving the item is. In addition, there is Candell and Hulins (1987) observation that
bilinguals make allowances for poor translation because of their knowledge of both
languages. In any case, these existing studies do not provide sufcient evidence yet of
how bilingualism in the Philippine sample in this study affected the results observed.
Is ethnic afrmation or cross-cultural accommodation at work in this case?
The above discussion addresses translation equivalence, but the question of scalar
equivalence of the instrument still needs to be explored. Scalar or metric equivalence is
particularly relevant in using Likert-type scales, or what Mullen (1995) calls soft variables.
Hard variables, such as unionization or voluntary turnover in this study, are affected by
calibration equivalence, a special case of translation equivalence. Measurement errors
pose threats to either the reliability or validity of the measures (Mullen, 1995). Threats to
validity in a cross-cultural context often refer to response set bias that results in systematic
error. The effect of language and culture on response patterns, however, may be different
for the specic language or culture under consideration (Hui and Triandis, 1989); hence,
only those studies involving Filipino subjects are considered here. A common cultural
Galang: The transferability question 1229
difference in response patterns is in the utilization of the midpoint versus the extreme ends
of a scale. In Stening and Everetts (1984) study of the effect of nationality on response
styles of expatriate and local managers from nine countries, the Filipinos showed a
tendency to use more of the extreme ends of the semantic differential scale, while the
Americans used the midpoint more.
A possible explanation of response styles attributable to cultural differences comes
from Aycan et al.: the likelihood of social desirability response bias of respondents
when they act as participants rather than as observers. The bias could be greater in some
cultural contexts (e.g., collectivism) where participants might have a tendency to try to
please the researcher, depending on the context and their relationship (1999: 5089).
In Hofstede and Bonds (1988) data, the Philippines ranks 31 out of 53 in the cultural
dimension of individualism, while the US ranks the highest, with Canada not far behind,
ranking 45. Analysing the response pattern of the current samples, the Philippine group
differed signicantly from the US sample in terms of the use of the midpoint but in the
opposite direction to that found by Stening and Everett (1984): the Philippine sample
tended to use more of the midpoint 3 response than the US sample. The Philippine
group also differed from both the US and Canadian samples in terms of the use of
extreme responses, with the Philippine sample tending to use less of 1 and more of 5,
thus supporting the social desirability effect. Stening and Everett (1984) observed the
equal use of both extreme ends of the scale, but it should be noted that their study used a
semantic differential scale rather than a Likert-type scale.
In summary, it is difcult to make denitive statements as to how linguistic and
cultural inuences on response patterns could have affected the results observed in this
study, because of the paucity of studies and their conicting ndings that may be partly
due to the different methodologies used. What is needed is to be cautious and take these
into consideration when designing future studies so that the effects can then be tested.
Threats to reliability arise from random or non-systematic errors from inconsistent
scoring due primarily to non-familiarity with the scoring methods or the research methods
(Mullen, 1995). Such random errors are reected in the reliability coefcients of
instruments consisting of more than one item. If there are differences in the reliability
of instruments across the different cultural groups, Singh (1995) suggests an adjustment
factor so that valid inferences can be made from the correlations between these
instruments. While there are several scales to which this concern of measurement error
pertains, these were used to correlate with each of the HRMpractices, and not with a scale
of these practices. The formula for adjustment that Singh suggested cannot be applied.
There are other strategies that have been suggested to assess equivalence, once data
have been collected. The primary reasons for not using these in the current study,
although relevant, are, particularly with respect to multi-item measures, the requirement
of a large number of items and subjects from different cultures that the current study does
not have (Hui and Triandis, 1985); availability of appropriate computer software, for
instance, in the item response approach suggested by Hui and Triandis (1985); or access
to the recommended software programs such as Multiple Group LISREL and Optimal
Scaling PRINCIPALS, which Mullen (1995) recommends rather than some
combinations of analysing internal structure.
Other methodological limitations That the management practices included in the
questionnaire are considered as the ideal may have affected the response rate, thus
contributing to bias in the results. That is, only those where most of these practices
applied responded to the survey request. However, this limitation is a possible
explanation for the observed country differences only to the extent that all three countries
1230 The International Journal of Human Resource Management
are affected differentially. Otherwise, the only caution that needs to be made is whether
the results for each country would be representative of the organizations in that country.
Common method variance could partially explain the strength and numerous signicant
associations between status of HRM department and HRM practices. However,
this argument may be countered by the fact that the competitiveness scale did not yield as
many signicant correlations with HRM practices in any of the three countries.
In summary, results suggest that many of the HRM practices developed in the
West are easily transferred to another country with a different culture and traditions,
and different economic, legal and political systems, but that some uniqueness is still
retained that may also be in response to different country conditions as well as
organizational characteristics. Among these organizational characteristics, practices are
more likely to transfer where the HRMdepartment enjoys a high status, overriding country
differences, and thus may lead to more convergence in HRM practices at the rm level.
Nonetheless, since methodological artefacts cannot be completely ruled out at this time,
these conclusions need to be taken with some caution, until future research can
resolve these issues.
Future research
Country differences in HRM practices at the rm level can be attributed to organizational
level characteristics and/or country-level differences in the legal, economic, political and
social environment. To zero in on which factor, the ideal way is to select samples that are
similar in factors that are not of interest in the study. A more practical way is measuring
along these extraneous factors so that their effects can be controlled in the statistical
analyses. However, the challenge, as Gooderham et al. (1999) have pointed out, is to
develop appropriate measures of the country context variable, either as a global index or
broken down into its various dimensions. Access to the appropriate countries that
represent a wide range of the values of the relevant variables is also a challenge. It is also
important to segregate rms in the sample in terms of their country of origin in order to
determine indigenous vs. foreign inuences in rm practices (Teagarden and Von
Glinow, 1997).
The instrument used in this study was constructed based on a model of HRM found in
the US. While this imposed etic (universal across cultures) approach makes sense if
addressing the question of transferability, an emic (unique to a culture) approach to
studying HRM may shed light not only on practices that are uniquely found in a specic
country but also those that are more salient for organizational success in that particular
environment (Berry, 1989). An emic approach also ensures cross-cultural equivalence at
the higher, more abstract levels (Hui and Triandis, 1985). The limitation of a purely emic
approach is that it is difcult to make comparisons across different cultures, but that is
usually resolved with a derived etic based on information from an emic stage.
Furthermore, as Teagarden and Von Glinow (1997) suggest, it may very well be that,
when in comes to HRM, it is the practices that are emic but the design philosophy behind
such practices is etic.
The previous discussions pointed to several other suggestions that can be made in
terms of improving research methodology so as to rule out methodological artefacts as
alternative explanations to cross-cultural ndings. In addition to the studies of response
style bias due to cultural differences, another that may be useful to consider in the future
is that of Hui and Triandis (1989), who found that those with a stronger tendency towards
extreme response styles like Hispanics will have more responses in the extreme points of
a 5-point scale, but not with a 10-point scale.
Galang: The transferability question 1231
Finally, the impact on other organizational outcomes, particularly in terms of nancial
performance, is of importance. Studies in the US have shown positive relationships
between rm nancial performance and HRM practices (Becker and Gerhart, 1996), and
a crucial test of transferability of practices is whether there is similarity in impact.
Nonetheless, even in the US, it is not quite clear yet whether organizational gains such as
nancial returns are in conict with employee gains. Cultural differences would probably
show in terms of the relationship between employee gains and organizational gains, as
this would reect differences in cultural values.
Notes
1 Based on a paper presented at the Pan-Pacic Conference XVI, Fiji, 31 May 1999. The
Philippine survey was partially funded by the Centre for Asia-Pacic Initiatives (CAPI),
University of Victoria. Althea Rabe of the College of Business Administration, University of
the Philippines, assisted in survey distribution and data entry.
2 The ousting of Presidents Ferdinand Marcos in 1986 and Joseph Estrada in 2001, after four days
of relatively non-violent mass protests.
3 The Best Practices survey contains more than the variables considered in this study.
4 Internal reliability coefcients (a) for status of HRM department, perceived competitiveness of
the business environment and perceived organizational performance are as follows: for the US,
0.78, 0.69 and 0.83 respectively; for Canada, 0.78, 0.66 and 0.90 respectively.
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