To be able to establish a link between human resource management (HRM) and. Investment in training and its contribution to national competitiveness one must understand what national competitiveness is. According to Porter (1990) some see it as a set of macro variables such as exchange rates, or low deficits that make a nation more competitive than others, while others see it as the superiority of some nation's management techniques that yield industrial advantage over foreign competitors. However, this might not be true as countries with large deficits such as the US and Japan still proves as national competitors.
Porter (1990) defined it as nation’s ability to increase its productivity and produce a rising living standard for its citizens by continually upgrading itself. Yet there is no one well defined definition but a series of broad ones. Porter (1990) however introduced his well-known national competitive diamond model that incorporates four factors. One of those factors is factor condition, which is concerned with labour skills and human capital. As Porter considers the creation of a skilled labour a driver of growth in national economy.
Koen (2005) introduced gospel's' (1992) three pillars of HRM, which are Work relations, Employment, and Industrial relations. By investigating the Japanese, German, UK, and US practices in this respect we will try to identify the importance of HRM in a nation's drive to competiveness.
Japan and Germany similarly have broad and simple job classification and there is low distinction between mangers and technical stuff. Both countries strongly invest in HRM and training. In Japan training is conducted in the company, whist Germany has a strong unified national Vocational and Education System (VET).This explains the "Polyvalence" of German and Japanese workers through the standardization of skill and not processes. In Japan, it is important to point out to the fact that workers and low management also engaged in the decision making process through the ringi system.
On the other hand, in the UK & US job classification are detailed. Job titles outline exactly what the workers duties are, responsibilities and salary. These countries do not have strong vocational training programs. Hence workers are not flexible in taking on a boarder range of tasks in time of change. Workers in the US are thought to have low autonomy whereas workers in the UK have considerably higher autonomy. Koen (2005) states that managers are motivated by quarterly performances they favor short-term profits and are unwilling to take long-term investment in human capital.
In Japan, there is an active internal labour market where workers are promoted. Employees gain recruitment upon graduating from university into-entry level position after the firm conducts a screening process and interviews. Japanese firms prefer recruiting employees who share the company's values rather than those who have been trained and worked elsewhere. Consequently, workers usually stay in one company in what is known as "lifetime employment" as a result of the heavy on the job training they receive. A study of the Japanese automotive industry showed that 1st year workers in Japan received 370-380 hours of training in their first year while European and American received 173 and 46 hours respectively. Similarly, German companies have an active internal labour market. Employers look for potential employees from specific technical colleges. In Germany, firm's favour on the job training, although it is not firm specific, it is broad and flexible which makes it a valuable source for the organization.
On the other hand the US has an active external labour market as they have a less regulated employment system compared to the Japanese and German. Hence layoffs are common and instead of promoting employees the US system relies on the external labour market. Job-hopping is seen as a common thing for US employees