Employee Training in the UAE
Tanmia’s CLMRI report of 2002 states that there was no training‐based career culture in the UAE because such jobs were filled by expatriates (Abdelkarim & Haan, 2002). Training was introduced for new technology, but not for already‐present human resources on any longterm basis. Programs have been duplicated naturally because of insufficient instruction is provided trainers. Certified employees of business organisations question the value of the programs that are available, although those in English and information technology are taken up by these institutions. There is wide variation in the quality of courses, but they are still considered the best way to impart training. The gap between the demand for skilled labour and the available human resources has not been not bridged by the government even after the establishment of the Institute of Administrative Development and the General Information Authority. UAE’s long‐term needs for human skills has been taken up by the government, which is making a concerted and coordinated effort to provide the necessary education and training initiatives, according to Han and Abdelkarim (2002).
Private Versus Public Sectors in the UAE
Employees in government and semi‐government positions are paid more than those in the private sector. The UAE Labour Force Survey provides data substantiating this, noting that the private sector paid its employees Dhs 5,000–7,999 per month while the public sector employees received Dhs 8,000–10,999 per month. These data does not break down the figures by occupation, so it cannot be confirmed if the difference is due to occupation, organisation or sector. The data show that people in the private sector could earn Dhs 35,000 and above (the highest paying salary level in the government sector was Dhs 20,000–24,999). This difference was because workers in the private sector work force had fewer educational qualifications than those in the three other sectors; and therefore the concentration was on lower paid jobs.
The Emirates view this imbalance as an effect of the work market, which provides employment opportunities particularly in private sectors (Al‐Fakhri, 2004). Employers point to inappropriate technical skills and a lack of expertise among graduates in spheres such as social skills, conversation, client customer associations, and ethics (Ahmed, 2003). Initiatives by the UAE to get nationals into the job market have had a great impact on employment opportunities, particularly in the private sector, according to Al‐Fakhri (2004).
The conventional employment level of Arabs is another problem besetting the UAE. The UAE is experiencing growth in the proportion of the young (the population of those below 15 years is 45%) at 25% per year with a 10% inflation rate (Gonzalez, et al., 2008). During the latter part of the twentieth millennium, most graduates did not join the private sector but chose to work in public sectors, according to Al‐Ali (2008).
Few attempts to develop the managerial capabilities of UAE nationals were made by the public services only a decade ago: work policies such as on‐site training, jobs for secondary education, and primary and secondary reforms were absent, or slow in developing. To build the managerial potential of Emiratis, public sectors base promotion on certain employment standards such as deployment of course, secondary education, and, recently, key and grade reforms applied retrospectively for approximately ten years. This led to a situation where Emirati graduates were forced to seek employment opportunities in the private sector (Abdelkarim, 2001; Al‐Ali, 2008).
According to Negrin and Tzafrir (2004), economic factors lead employees to quit an organisation. They use various economic models to demonstrate why employees quit; from these, labour turnover can be predicted. Schervish (1983) notes that a sound labour market helps establish stability within an organisation. Larger organisations can provide ample opportunity for employee growth, along with an increase in wages, ensuring attachment to the organisation (Idson & Feaster, 1990). Trevor (2001) points out that the level of unemployment in the country has an effect on job satisfaction, and so helps in the analysis of labour turnover in the market.
The Principles behind HR Practices
In organisations or firms, human resource management (HRM) practices function as a mediator between HRM strategies and HRM outcomes. Sheppeck and Militello (2000) divide HRM strategy into four groups: employment skill and work policies, supportive environment, performance measurement and reinforcement, and market organisation. Guest (1997) divides it into three categories, differentiated by innovation, focus on quality, and cost reduction. There are many other definitions in previous research on HRM strategy, but all strategies are intended to achieve the same organisational goal. Sivasubramaniam and Kroeck (1995) and Guest (1997) consider the various perspectives on human resource management from the point of view of fit or integration. They suggest that various types of human resource management can be classified as having internal or external fit. External fit explains HRM as a strategic integration, whereas internal fit is an ideal of practices. Several researchers have tried to examine which fit is appropriate. Youndt et al. (1996), who observe external fit, produce results that show more particular fit between high performance HRM practices and quality strategy. Stavrou‐Costea (2005) argues that effective human resource management can be the determining factor for the success of a firm. As supported by Lee and Lee’s (2007) work, the effect of HRM practices on business performance such as training and development, teamwork, compensation/incentive, HR planning, performance appraisal, and employee security helps improve firms’ business performance including employee’s productivity, product quality and the firm’s flexibility.
The overall purpose of HRM is to ensure that an organisation is able to achieve success through its people (Armstrong, 2009; Storey, 1992). A common theme in HRM literature has been the take‐up of ‘new style’ HRM practices designed to achieve high levels of employee performance, flexibility, and commitment (Bach & Sisson, 2000). This means that contemporary HR practices have a much more direct relationship to organisational policymaking and performance issues than was the case with traditional approaches to personnel management (Bach & Sisson, 2000).
Research has suggested that the study of HRM needs an international perspective (Brewster, Tregaskis, Hegewisch, & Mayne, 1996; Thomas. Kochan, Batt, & Dyer, 1992) to help highlight the context‐specific nature of HRM practices (Guthrie & Olian, 1991; Jackson & Schuler, 1995; Kuruvilla & Ranganathan, 2010; R. Locke & Thelen, 1995). However, in comparison with other parts of the world, the UAE has little available literature related to the field of HRM (Budhwar & Mellahi, 2007; Okpara & Wynn, 2008). Many authors argue that the Middle East region has management systems similar to most other developing countries (Budhwar & Mellahi, 2007; Debrah & Budhwar, 2004), emphasising sensitivity towards local cultural norms and restricted participation in decision‐making (Ali, 2004; C. Robertson, Al‐Habib, Al‐Khati, & Lanoue, 2001; Tayeb, 1997). This is a significant area that needs study with specific reference to the UAE.
Studies suggest that HR practices affect organisational outcomes by shaping employee behaviours and attitudes (Huselid, 1995; Kehoe & Wright, 2010; Ordiz & Fernández, 2005). It is important to note that while similarities in attitudes towards work and management practices exist across Middle Eastern countries, there are also considerable variations between countries in the Middle East that cannot be explained by cultural factors. Beyond the religious and cultural factors mentioned earlier lie a number of other macro‐factors that have shaped HRM in the region (Budhwar & Mellahi, 2007; Forstenlechner, Madi, Selim, & Rutledge, 2011; Murphy, 2001), such as market‐driven forces and economic liberalisation, which enable local organisations to compete with global organisations by developing new strategies to increase employment growth. This has resulted in some countries such as Saudi Arabia and Egypt experiencing job security erosion in the public sector, as firm have privatised, downsized, or closed (Budhwar & Mellahi, 2006).
It has been argued that human resource practices are inextricably linked to employees’ perceptions of organisational support, and that the two processes strongly influence an employee’s commitment to an organisation. According to Arthur (1994) ‘high commitment’ human resource activities increase organisational effectiveness by engendering conditions where employees feel more involved in the achievement of the organisation’s objectives, and are therefore more likely to work harder to help the company meet those objectives. The dominant approach used in testing the link between HRM and performance has considered HRM as an ideal set of practices (Delaney & Huselid, 1996; Huselid, 1995), very loosely labelled ‘high performance’, ‘high involvement’, or ‘high commitment’. High commitment practices increase organisational commitment by creating conditions where employees become highly involved in the organisation and work hard to accomplish its goals (Arthur, 1994; Youndt, 2000). This leads to lower turnover and higher productivity. Many organisations recognise the benefit of high commitment practices because, while they respond to employees’ needs and encourage them to take responsibility for their careers, they also motivate them to behave in ways that ultimately benefit the organisation (Baron & Kreps, 1999; Combs, Liu, Hall, & Ketchen, 2006). High commitment practices are those processes that encourage employees to adopt higher levels of responsibility for the achievement of an organisation’s goals. Many researchers have found that high commitment human resource management practices enhance employees’ levels of skill, motivation, information, and empowerment (D'Cruz & Noronha, 2011; Thomas. Kochan & Osterman, 1994; Lawler, 1992; Levine, 1995; Pfeffer, 1998). One explanation for the increased motivation of employees in high involvement organisations is that the employee is at the centre of the activities taking place. In order to ensure that this process is successful, HR departments need to develop and implement HR practices that support the workforce to become self‐programming and self‐managing (Guthrie, 2001; Lawler, 1992). This necessitates significant investment in human capital, but MacDuffie (1995) argues that such an investment is justifiable when the future benefits in terms of increased productivity will outstrip the costs.
Greater use of high commitment HR practices is likely to have two broad effects. First, as previous research suggests, high involvement in or high commitment to work practices enhances employee retention (Arthur, 1994; Huselid, 1995; Shaw, Delery, Jenkins, & Gupta, 1998). At the same time, greater use of these practices may increase firms’ exposure to distributions associated with the loss of employees (Guthrie, 2001).
Huselid (1995) suggests, after a study of over 900 organisations in the US, that HR practices be grouped into two categories: those that improve skills, and those that enhance motivation. The study finds that skill‐enhancing HR activities including selection, training, and development are associated with turnover and financial performance, and that motivation‐enhancing activities including performance appraisal and compensation activities are associated with measures of productivity. Arthur (1994) similarly finds a strong correlation between employee retention and productivity in high commitment HR systems.
So far, as noted by Legge (1998), the high commitment approach has principally been tested in private sector manufacturing organisations. Little attention has been given to evaluating their effects on performance in public sector organisations (Gould‐Williams, 2004) or in economies such as the UAE’s. This is a significant omission in light of the claim that these practices are ‘universally applicable’ (Wood, 1995, p. 57). The present research examines whether the positive effects of high commitment HRM practices reported in private sector organisations are replicated in public organisations (Gould‐Williams, 2004) in the UAE. This study goes some way to supplying the lack of research into the supposedly universal application of these HR principles.
The actual function of HRM within the value chain of an organisation is of significance. It has been postulated by some researchers that the role of HRM within an organisation is a significant factor in the firm’s ability to achieve its organisational objectives and develop a sustainable competitive advantage within the marketplace within which it operates. This is achieved via the policies each firm enacts, and the methods it uses to attract and retain the right employees for its needs (Holland, et al., 2007). The HR function can be thought of as having six menus, from which companies can choose the most appropriate practices. De Cieri and Kramar (2008, p. 58) state that each of these menus refers to a particular functional area of HRM: job analysis/ design, recruitment/ selection, training and development, performance management, pay structure/ incentive/benefits, and labour/ employee relations. The following sections discuss relevant aspects of the literature on each of these functions.
Job Analysis and Design
This refers to the process of getting detailed information about a job (De Cieri & Kramar, 2008, p. 60), which could provide information for a variety of purposes, including determining training needs, development criteria, and appropriate pay and productivity levels (Price, 2003, p. 362). Job design deals with making decisions about tasks that will be required in a given job (De Cieri & Kramar, 2008; Hacker, 2003).
There are two specific elements at play here. The first concerns the need to meet the organisation’s needs in terms of productivity, achievement and quality, while the second relates to the needs of individual employees and the requirement to provide them with a work environment that is challenging and rewarding (Armstrong, 2009; Campion, Medsker, & Higgs, 1993; Kozlowski & Bell, 2003; Stewart, 2006). The effectiveness of HR practices requires that the job be clearly understood by both jobholders and the organisation. The practice of job analysis provides this understanding (Siddique, 2004), and it has been suggested that organisations actively pursuing this practice as an HR planning strategy are likely to gain a competitive advantage (Anthony, Kacmar, & Perrewe, 2002; Dessler, 2003). The ultimate purpose of job analysis is to improve organisational performance and productivity, helping the organisation create a proper infrastructure by defining the tasks to be performed as well as the timelines for performing them. Job analysis thus has the potential to make a contribution to organisational performance both directly and interactively with other key HR practices (Anthony, et al., 2002; Siddique, 2004). It has been argued that job analysis and design can enhance performance of the employees and job satisfaction (Moyes, Shao, & Newsome, 2008).
2.5.2 Employee Recruitment and Selection
Any process for which an organisation seeks applicants and attracts potential employees is called recruitment; selection refers to the process by which an organisation identifies those applicants with the knowledge, skills, abilities, and other characteristics that will help it achieve its goals (De Cieri & Kramar, 2008, p. 30). The overall aim of the recruitment and selection process is to obtain at minimum cost the number and quality of employees required to satisfy the human resource needs of the organisation (Armstrong, 2003, p. 395). Hiring capable people is an attractive point of departure in the process; but building and sustaining a committed workforce is more likely to be facilitated by the employment of a range of sophisticated human resource management infrastructures (Y. Chew, 2005; Raghuram, Bird, & Beechler, 1993).
Employers try to select and recruit the right candidates. At the same time, job seekers gather information about organisations and current jobs offers; because they cannot gain complete knowledge of all alternatives and their potential characteristics, they rely on imperfect signals (Chan & Kuok, 2011). It has been noticed that organisations that want to fill their vacancy very quickly or who are unwilling to have recruitment processes such as job analysis, are possibly less discriminating in the quality and quantity of the candidates (Carless, 2007) while organisations who put effort into the process of recruitment turn on more search channels than organisations who do not (Russo, Rietveld, Nijkamp, & Gorte, 2000). When the cost of a mistake in recruitment is high, organisations are more discerning and the turnover of employees will increase (Chan & Kuok, 2011).
Employee Training and Development
Training is not simply a means of arming employees with the skills they need to perform their jobs: it is also often deemed to be representative of an employer’s commitment to their workforce (Storey & Sisson, 1993). It may also be perceived to reflect an overall organisational strategy that involves adding increased value, as opposed to reducing costs. Many of the world’s most successful companies are aware that the provisions they make for training and development activities lie at the heart of their ability to attract and retain the best employees for their organisation (Bassi & Buren, 1999). It is therefore imperative that employers provide an opportunity for their workforce to learn (Arlond, 2005; Bernsen, Segers, & Tillema, 2009), as proactive development schemes will not only improve the capabilities of their team but will also motivate staff and subsequently engender a more loyal employee set (Kyndt, Dochy, Michielsen, & Moeyaert, 2009).
Investment in training measures and the implementation of development schemes are becoming increasingly acknowledged as vital elements of HRM (Oakland & Oakland, 2001), and studies across a wide range of industries and sectors have all found a positive correlation between investment in training and employee commitment (Bassi & Buren, 1999). For example, studies completed by Irving and Thomas (1997) and Marchington and Wilkinson (1997) focus on employee commitment among hospital administrators, nurses, service workers, and clerical employees, as well as on scientists and engineers from a research laboratory; both confirm that employees were more committed to their jobs and the achievement of the objectives of the organisation when they felt that the company cared about their training and development needs. In summary, appropriate training contributes positively to employee retention because it makes employees feel recognised for their strengths, and it creates possibilities to develop their qualities (Kyndt, et al., 2009; Visser, 2001).
Performance management is mainly concerned with the individual’s performance and development. It is used to ensure that the employee’s activities and outcomes are congruent with the organisation’s goals (De Cieri & Kramar, 2008, p. 61), by focusing on future performance planning and improvement rather than on retrospective performance appraisal (Armstrong, 2003, p. 481). This requires management to act as partners within a framework in which they and the employees together can achieve the results required. For this to occur, managers need a clear understanding of the ways in which performance appraisal can help the organisation (Chelladurai, 2006). In addition, such appraisals can be used as feedback to individuals in order to influence and enhance subsequent performance. It has been argued that the results of performance appraisal of all employees provide insight into the effectiveness of the HR system, the developmental and training needs for the whole organisation, and the setting and articulating of organisational goals for the employees (Chelladurai, 2006). Appraisals cannot be performed effectively unless the line manager or person conducting them has the interpersonal interviewing skills to provide the feedback to people being appraised (Prowse & Prowse, 2009)