Literature Review of Employee’s Overall Perception of Human Resources Practices: Human Resources Management in Korea

Abstract

Korea is generally referenced as one of “Four dragons in Asia” with China, Hong Kong, and Singapore since Korea society has achieved rapid growth of economy during 20^th century. A study of business administration was introduced in Korea about 60 years ago and Human Resource Management (HRM) also have been developed to fit into the new era of business world (Lee, 2010). In 1978, Korean Academy of Organization Management was established and Korean Academy of Management was founded after 12 years later so as to encourage academic and scientific research of HRM in Korea. The development of HR in Korea however has been evaluated as not advanced as other developed countries such as the United States and European community. The current study aims to investigate the recent state of HRM in Korea, furthermore, to explore whether the HR departments of organizations in Korea have successfully built somewhat firm relationships with employees that would contribute to commitment of employees to organization. To do so, the previous studies especially dealing with history of development of HR management in Korea were analyzed and the results may be used for the future comparative analyses with the case of relationships of HR departments and employees in other countries.

Literature Review

Organizational Commitment and Perceived Organizational Support

Organizational commitment is defined as an affective attachment to organization and perceived cost associated with leaving the organization or an obligation to remain in the organization (Allen Meyer, 1990; Meyer & Allen, 1991). This definition has been a standard of a lot of studies regarding employees’ commitment to organization and provided a desirable form of commitment. Meyer and Allen (1991) specified the organizational commitment into 3 components: affective, continuance, and normative commitment, respectively. They argued that it might be possible to better understand the employees’ relationships with their organization when all three components are taken into account together. Thus, having a basic knowledge of the 3 components may be the first step for figuring out the relationships between HRM and employees. The following is a brief introduction of Meyer and Allen’s (1991) 3 types of commitment.

Affective commitment is employees’ psychological and emotional attachment to their organization, including identification with and involvement to the organization. The antecedents of this type of commitment are job characteristics, the degree to which employees can trust their organization, and the degree to which employees feel they actually can change or influence the organizational decisions. In addition, age and tenure tend to be positively related to the affective commitment.

Continuance commitment might serve as a basis for making decision of whether leaving the organization or not. Employees will consider the costs related to stopping their careers in the organization. The antecedents of this commitment could be anything that employees regard as causes of leaving the organization. Age, tenure, career satisfaction, and intent to leave are generally mentioned as the antecedents of continuance commitment. Among those antecedents, career satisfaction provides an explicit way in measuring expected outcomes of leaving the organization.

Normative commitment is related to employees’ feeling of obligation to their organization. Employees with normative commitment usually prefer to remain in the organization because they feel they ought to do so. The antecedents of normative commitment include the aforementioned antecedents of affective and continuance commitments and co-worker’s commitment as well. Co-worker’s commitment might provide generally required and accepted attitudes of employees to the organization.

Meyer, Allen, and Smith (1993) conducted further investigation to see whether the 3 commitments model could be generalized to the domain of occupational commitment. They found not only the generalizability of 3-commitment model across several domains, but demonstration of given hypothesis that commitment predicted employee’s behavior such as turnover intention and job satisfaction. Study of commitment have got more and more attentions by researchers because commitment might be able to predict the intent of and actual turnover, which are a considerably risky sign to retention of employees.

The previous studies have demonstrated that perceived organizational support (POS) and 3 domains of commitment have interactive relationships. POS refers to people’s comprehensive and thorough beliefs about the extent to which the organization cares about their well being and values their contributions. POS is strongly related to organization’s fair treatment, supervisory support, appropriate rewards, and favorable job environments.  (Fuller, Barnett, Hester, & Relyea, 2003). Fuller et al. (2003) provided some support that integration of employee’s evaluation of self-efficacy as a member for organization and the POS could predict the employees’ organizational support. That is, employees’ self-esteem might be affected by the feeling that their organization values and appreciates them. Colakoglu, Culha and Atay’s (2010) empirical study of employees in hotel industry revealed that POS is highly correlated to the affective and normative commitments. They also suggested that research and implications of POS and commitments might be important especially for the hotel industry where turnover rates are exceptionally higher than other business areas. We can find additional support of the relationships between POS and commitment in a study by Stinglhamber and Vandenberghe (2003). They distinguished intrinsically and extrinsically satisfying job conditions, that the former one includes feeling of competence, use of employee’s ability, and personal responsibility in organization and latter one refers to reinforcers such as pay, benefits, and relationships with supervisors or co-workers. The results showed that POS mediated the effects of positive extrinsically satisfying job conditions on affective commitment to organization; in addition, the perceived supervisor support fully mediated the effects of favorable intrinsically satisfying job conditions on affective commitment to organization and supervisor as well (Stinglhamber & Vandenberghe, 2003).  We can assume that POS might be a strong strategic manner for organization, which is facing some challenges such as dealing with cultural diversity or generating innovation within the organization context. According to Leveson and Bakalis (2009), employees tend to continually monitor their perceptions of commitment and differently respond to their organization depending on preformed beliefs of POS. In this study, employees showed greater commitment to their organization’s initiatives in managing cultural diversity if they interpreted the POS as supportive and caring (Leveson & Bakalis, 2009).

The significant effects of POS and organizational commitment together might demonstrate how much important it is to deliver sort of favorable and supportive messages to satisfy employees so as to pull out their behaviors that benefit both themselves and their organization. In other words, organizational management such as HRM and supervisors can influence employees in a variety of way. In the following section, roles of HRM will be analyzed to identify its specific effects on employees’ organizational behaviors.

Effects of HRM on Employees

Bhalla and Giri (2014) defined HRM as the organizational function that is related to issues of compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training. In consistent with this definition, HRM has been considered to be able to encourage employees to contribute effectively and productively to the organization’s overall performance, which turn in to enable to achieve the organization’s goals and objectives (Bhalla & Giri, 2014).

Tsui, Pearce, Porter and Tripoli (1997) agreed with the effects of HR practices to employees and they concluded that employees who had POS expressed higher level of affective commitment. Many other previous studies showed consistent conclusions that HR practices could influence the levels of organizational performance and employee’s attitudes as well (Arthru, 1994; Delaney & Huselid, 1996; Huselid, 1995). Overall management culture and style operated by top management also had a significant effect on the degree of employee’s commitment (Niehoff, Moorman, Blakely, & Fuller, 2001).

The positive effects of HRM would contribute to the deliver a message to employees that organization is interested in employee’s welfare in mind, and therefore trying to benefit not only the organization but also its employees. This perception of getting support by organization encourages employees to be more conscious about their responsibilities in workplace, have greater involvement in organization, and eventually have more trust in organization (Eisenberger, Fasolo, & Davis-LaMastro, 1990). When an employee perceives the organizational support, then the employee will perform knowledge-sharing behavior as the manner of generating one’s commitment to organization (Hsu-Hsin Chiang, Han, & Ju-Sung, 2011). This study’s results could be explained by on perspectives of social exchange and social identity theories. Employees with POS are more likely to have an intention of benefiting their organization (Hsu-Hsin Chiang et al., 2011). The POS is also one of antecedents of organizational citizenship behavior (OCB), which is commonly defined as individual behavior that is discretionary, not directly or explicitly recognized by the formal reward system, and that in the aggregate promotes the effective functioning of the organization (Singh, Singh, Kumar, & Gupta, 2015). We can also expect that POS may reduce employee’s citizenship fatigue, which lead to feeling of being too worn out or tired to engage in OCB (Bolino, Hsiung, Harvey, & Lepine, 2015).

The POS therefore is expected to have a power of enhancing both organization’s productivity and effectiveness and employees’ psychological well being and involvement to their organization. HR practitioners should need to consider those antecedents of the OCB if they want to retain some employees with high loyalty (Singh et al., 2015).

One study conducted by Chang, Tsai and Thai (2011) suggested that organizational learning might have significant relationships with OCB and organizational commitment. Organizational learning is generated by acquisition, distribution, interpretation, and memory of information about business in organization (Martinez-Costa & Jimenez-Jimenez, 2009). This activity was positively related to both OCB and organizational commitment, further, organizational learning could predict the commitment. Owing to the commitment, employees are willing to know about their organization’s culture, goals, and values and do something helpful to their organization. Both input and output of meaningful information regarding business may be accompanied by between employees or between organization and employees (Martinez-Costa & Jimenez-Jimenez, 2009). With this respect, HR practitioners should take some responsibilities of continuously updating employees about their roles and responsibilities; besides, HR practitioners should clearly communicate with employees that their career growth is closely tied with such good performance and behaviors (Shamsudin, Subramaniam, & Sri Ramalu, 2014). This way may reduce employees to engage in some deviant behaviors in workplace since they know what they have to do or what should be done for their satisfaction.

Hence, it seems to be plausible to think that the degree of which organization is willing to and actually focusing on sharing its goals, values, employee’s responsibilities and strategies might affect employees’ perceptions of organizational support and commitments. Indeed, we already have identified from the previous studies that committed employees are more likely to actively participate in information sharing with their co-workers and organization as one manner of pursuing their organizational goals. Thus, it might be meaningful to consider organizational communication as well.

Organizational Communication

In a theoretical concept, communication is regarded as the foundation of organization structures and processes; with this respect, communication is defined as constructive (Miller, 2006). It implies that communication is a social interaction and providing meanings to social reality, actions, events, roles and process. Organizational communication refers to the process of sharing a bundle of information between individuals and groups within different areas while making efforts to fulfill the common goals of organization (Smidts, Pruyn, & Riel, 2001).

Communication itself is basically important for all activities of organization. Many of previous studies regarding the effects of communication on organizational behaviors have been conducted for several years. Researchers have revealed various functions of communication within the workplace context. Allen (1995) found that communication was an important factor for perceiving and accommodating the organizational climate. Day-to-day communication enables employees to change and readjust their frame. Also, Allen (1995) argued that organizational level communication was much more important for employees in perceiving organizational support. Even positive personal feedback couldn’t influence employees to perceive as they are getting support from their organization in some cases.

A study conducted by Varona (1991) showed that communication factors actually had significant relationship with employee’s organizational commitment. Especially, top managers of the organization were likely to foster or inhibit communication satisfaction. Similarly, Snell, Shadur, and Wright (2000) suggested that employees who have high psychological contract tend to have commitment and comply with goals of organization; in addition, they are more likely to engage in active communication behaviors.

Several studies have identified whether there are relationships between communication and HRM. According to the results of Mazzei’s (2010) study, there was a relationship between communication and HRM systems, and this connection significantly contributed to organizational well being, collaborative workplace, and promote loyalty or commitment between organization and employees. Kim (2010) found that HRM being highly involved in the organizational strategic practices would encourage more meaningful communication with employees, and transmission of information about organizational strategies and plans would generate frequent feedback from employees to organization. Likewise, appropriate communication and feedback could lead to success of organization business as well as achievement of organization’s ultimate goals (Yu & Kim, 2003). Again, other study argued that high involvement HRM particularly requires intensive efforts to communicate in an active manner with employees (Kim, 2010).

On the other hand, lack of or ineffective communication seems to lead organization unsuccessful outcomes. Garvin (1998) indicated that because of the attributes of hierarchical structure, a few companies experienced isolation of particular department, poor coordination of activities, and limited communication between departments and employees. Furthermore, McClelland and Wilmot (1990) showed some examples of not effective communication within organization such as managers not having frequent meeting with their employees, lack of sharing organizational goals, and constraints on upper level management. Employees who were working at such type of organizations believed that their organization’s communication and interaction manner was inadequate, thus they rarely had an opportunity of expressing their opinion. For fostering effective organizational communication, first, the structure of organization should allow great autonomy to employees, and second, organizational culture and climate should strongly encourage active communication which in turn to improve employee’s positive perception on organization and to increase productivity (Spillan, Mino, & Rowles, 2002). Tomlinson (2001) showed several examples of Canadian companies that have succeeded to “branding” their HR department to employees. The branding HR department is similar to marketing HR department in concept, but includes more carefully devised strategies that enable employees to have a common look and feel for the HR department and to have a two-way communication with the HR department. Tomlinson (2001) argued that the HR department should assign a HR practitioner who will be in charge of internal communication, including providing up-to-date information of HR practices and developing particular strategies for effective communication with employees.

Overall perception of HR practices

As I mentioned on the previous sections, employees are under influence of HRM or HR practices. Although we initially have discussed individual HR practice effect, still need to consider whether employees compared to the perception of individual HR practice will differently perceive overall HR practices.

Overall perception of HR practices refers to employee’s general impression and belief regarding a variety of HR practices. This consideration is originally came from Fishbein model (Fishbein, 1967) and expanded by Chang (2003). Fishbein model (1967) explains that an individual’s attitude toward a particular object is a combination of one’s belief of attributes of the object and a following evaluation of the object. This model can be expressed as a formulation below (Ramdhani, Alamanda, & Sudrajat, 2012):

A0=∑i=1nbiei

A₀ = Attitude toward an object

b_i = Strength of belief that the object has attribute

e_i= The evaluation of attribute i

n  =  Number of convictions

According to this model, we can further assume that summation of multiple beliefs of particular object can affect the overall attitude toward the object (Chang, 2003). She argued that the Fishbein model could be applied to explanation of employee’s general attitudes on the diverse HR practices even though the model has been frequently used for understanding customer’s attitudes and behaviors; for instance, employee’s general attitudes toward the HR practices will be influenced by a composite of employee’s beliefs about each practice and evaluations of those beliefs.

Thus, we can also assume that the effects of employee’s overall perception on HR practices might be larger than or at least align with the effects of employee’s perception on each individual HR practice. This overall view on perception of employees toward HR practices is expected fitting well to the purpose of current study that analyzing relationships between HRM and employees in Korea.

HRM in Korea

As I mentioned above, introduction of HRM in Korea was not relatively long time ago compared to other developed countries (Lee, 2010). However, it is true that the growth of HRM area has been progressed quickly over many years. Knowing the growing importance of HRM for successful business, trends of research publication regarding HRM in Korea during the first 10 years of 2000s reflected increasing focus on organizational behavior of employees (Lee, 2010). Approximately 60 percent of studies have covered the issues of understanding employee behavior in organization (Lee, 2010). One study nevertheless showed that a role of HR practitioners was limited to certain practices (Hwang & Kim, 2011). They conducted this research in order to organize the role performance of HR practitioners in large Korean corporations. The essential roles identified by Hwang and Kim (2011) included 5 HR related areas: individual development, career development, organizational development, achievement management, and HRM, which consisted of 19 roles and 56 key actions of practitioners on the whole. They found that HR practitioners in such large companies believed that strategy management, development of educational programs, analysis of educational demands, business partner, and personnel development were top 5 important practices. Meanwhile, top 5 roles of HR practitioners in terms of frequency were instructor of education programs, educational program designer, educational program developer, administrator, and evaluator of educational programs (Hwang & Kim, 2011). Hwang and Kim (2011) also indicated that HR practitioners have not frequently performed practices that directly related to organization’s strategic development and interventions between employees and organization, which are central to main roles of HR practitioners. Relatively passive roles of the HR practitioners in organization’s strategic involvement also could be found in a study of J. Kim (2010). She mentioned that actual HR practices in Korean companies have not been successful to keep up with the development of theory of HRM for a long time as the HR practitioners solely served a role of evaluator or instructor in organization. This tendency was demonstrated by empirical study of H. Kim (2010). He indicated that HR department’s main responsibility was generally related to job design, payroll management, pension fund management and welfare plans. However, HR practitioners also should make some efforts to resolve the labor management issue because Korea is one of countries that is classified as having high level of hostile relationships between employees and organizations among OECD members (Ryu & Kim, 2007).

Discussion

The current study is overall review of organizational commitment, POS, communication, HRM effects and HRM tendency in Korea. At the same time, one of main purposes of this study is analyzing the relationships between HRM and employees in Korea. A study of Han (2016) focused on psychological aspects (e.g., OCB, well-being, and turnover intention) of Korean employees and the results were consistent with the studies reviewed in the previous sections that relationships between HR attributes and employees could impact the psychological processes of employees. Besides, Son (2009) provides additional support by examining the relationships among trust, mentoring functions received, work attitudes (i.e., job satisfaction and commitment) as reported by subordinates in organization. Although this study is not directly related to HR practices, but feeling of trust and mentoring functions are relevant attributes of HR practices. Son (2009) found that functions related to career and role modeling together was significantly related to employees’ organizational commitment; in addition to that, trust could improve their job satisfaction.

However, several studies also indicated that limited number of research about the perceptions of employees toward HRM or HR practices has been conducted (Choi, 2013; J. Kim, 2010; H. Kim, 2010). HRM in Korea seems to give a lot of attention to organization’s strategic abilities to maintain high quality of human and social capital (A. Kim, 2010; M. Lee & D. Lee, 2015). Most of studies about HRM in Korea focused on the function or effectiveness of particular HR system to organization. Furthermore, most of Korean studies that have been reviewed in the current study mentioned an importance of effective communication for composing supportive work environment to employees, but that was not core interest of those studies.

Despite of lack of information about the relationships of HRM and employees in Korea, one study about a change of employee-organization relationship with cases of Japanese companies might provide some cues for plausible inference. Hattori (2015) examined the evolving nature of the relationships between employees and organization with using empirical methods. Japanese were likely to have high level of psychological contracts, which is defined as an individual belief regarding a reciprocal exchange agreement between individuals and groups (Rousseau, 1989) with their organization in the past days, but nowadays they have experienced a variety of change in employment systems (Hattori, 2015). Korean employees were supposed to have high psychological contracts since they could get promotion depending on tenure, so it was natural to stay in one company for one’s whole life (Ryu & Kim, 2007). However, as a case of Japan, Korean society have been under influence of those changes such as adoption of “pay for performance” system (e.g., not depending on tenure), externalization of employment, and increasing ratio of part-time, temporary, and other limited contract employees (Hattori, 2015; Ryu & Kim, 2007). In Hattori’s study (2015) the Japanese employees’ psychological contracts were incrementally decreased as tenure and their commitments were rather increased when they experienced both horizontal and vertical movements of position in organization. The researcher indicated that recently functional movements in organization of Japanese are less frequently occurred than before; also, this tendency seems to be inevitable for organization of Korea while specialization of job has been rapidly developed today (Ryu & Kim, 2007). We could come up with an inference drawing on their perspectives that Korean employees have been experienced some sorts of decreasing commitments and psychological contracts or POS, which should be empirically proved by the future research.

In contrast, recent study of Kim and Han (2017) found considerably different conclusion compared to Hattori (2015). Their study aimed to examine whether there is any effect of certain type of organization on Korean public organization employees’ job satisfaction and commitments. They argued that the clan type culture, which refers to a management emphasizing high flexibility on organizational systems, HR practices, mentoring, morale, and POS within the organization, actually lowered the public employees’ commitments but improved their job satisfaction. However, the hierarchy culture, which represents high stability management and adherence to bureaucratic rules, improved their commitments but lowered the job satisfaction. Kim and Han (2017) indicated that their results might be restrictively generalized to workplace context because only public employees in Korea were included in the sample of study.

In addition to the difference of organization culture, Kernan, Watson, Fang, and Kim (2011) mentioned the possibility of difference in national culture might affect the various aspects of work behaviors. Kernan et al. (2011) found that in the recent reviews of cross-cultural management literature, different cultural values have been considered to draw various different reactions of employees. However, in an empirical study of testing Korean employees who are working in foreign countries and migrant employees in Korean companies, the results were not consistent with Kernan et al. (2011) (Oh, 2006). The researcher concluded that the effects of national culture were not significantly large to have an influence on management style, cultural adjustment, and job attitudes of employees; actually rather organizational difference mattered (Oh, 2006). The researcher however remained open to the possible effects of cultural difference by mentioning that the national difference partially affected the employees’ cultural adjustment.

As indicated before, we could see the mixed perspectives regarding HRM or management style and employees’ job attitudes. It may imply that Korean employees would have a different schema in perceiving particular HRM and relating organizational activities. Also, lack of study about Korean employees’ organizational perceptions would be a reason of such inconsistent results. Choi (2013) have suggested various possible directions for the future study of employee’s perceptions: measures of whether HR practices are regarded as acceptable to employees, whether HR practices fit to employee’s values and beliefs, whether there is effective communication channel in organization, and whether HR practices are operated in appropriate ways. It is somewhat true that studies regarding organization and HRM are limited to the previous studies conducted in the U.S.; besides, some of them solely imitated the previous studies without considering different contextual variables (H. Kim, 2010). The current study of literature review may be not sufficient to figure out significantly meaningful relationships between HRM and employees in Korea. However, this study might be still a good start of suggesting a need of future study about Korean HRM and employees while reflecting more recent information of an ongoing alternation of Korean organizational structures and employees’ perceptions of their work and life.

Also, few comparative studies regarding difference of employees’ perceptions in Korea and other countries have been conducted so far. As continuous growth of globalization of the world, researchers need to be prepared for culture related issues. Therefore, cross-cultural study is highly recommended to extend the scope of research in HRM and employees’ perceptions and to add more valuable support to the literature.

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