Human Resource Management and Economic Success: An Australian Perspective

Abstract

In this paper we examine case for a link at national and firm level between human resource management (HRM) and economic success in Australia. A brief history of industrial development of Australia (and New Zealand) is presented and some differentiating factors noted (Dowling/Boxall 1994). A key factor with regard to Australia is relatively small size of population and economy and disproportionate impact of globalisation and global political and economic events upon performance of Australian economy. Recent empirical research in US which argues that there is evidence that positive employee relations effectively serves as an intangible and enduring asset at firm level (Fulmer/Gerhart/Scott 2003) is noted, as is December 2003 special issue of International Journal of Human Resource Management which focuses on Developments in Comparative HRM and concludes that there is evidence both for and against hypothesis that there are no universal prescriptions for effective HRM. The editors (Wright and Brewster) argue that the variety of views about what makes for 'good HRM' and variety of understandings of which policies and practices lead to success is not only inevitable, but should be welcomed (Wright/Brewster 2003: 1305). The author is in broad agreement with this conclusion. Key words: HRM, Australian Perspective, Firm Performance, Economic Success, German Companies Operating in Australia Introduction The focus of this paper is on extent to which there is a connection between human resource management and economic success in Australia. Before commencing this analysis it is appropriate to provide some historical context. In doing so, it should be noted that Australia and New Zealand have a similar history and are an interdependent economic region so some information about New Zealand is also provided. While not attempting to reduce impact of human resource management policies and practices on firm performance, this paper argues that human resource management is one of several key components of equation in developing a business strategy that can be implemented effectively in an increasingly globalised market. As Dowling and Boxall (1994) 1 have noted, Australia and New Zealand are small, resource-based economies with low populations (Australia, 20 million; New Zealand, 4 million) located in geographically remote South Pacific. Both are former British colonies. They operate Westminster-style democracies and enjoy a strong reputation for political stability. Unlike most inhabitants of South, however, Australians and New Zealanders have traditionally enjoyed high standards of living. In both countries, high agricultural productivity has traditionally been a major source of this wealth. New Zealand's success has largely been based on ideal conditions for sheep grazing (producing high quality meat and wool) and dairy farming (producing cheap butter, cheese and other dairy products). Forest products (e.g. pulp and paper) and fisheries have also added significantly to national income. Australia is similarly famed for its sheep products but is also a major producer of grains (e.g. wheat, barley and sugar). Besides these agricultural strengths, Australia has historically exploited its major mineral deposits. Australia, with a large land mass of over 7.6 million square kilometres, has grown rich on iron, ore, coal, gold, alumina, lead, zinc, and other mineral resources. Unlike New Zealand, Australia is a droughtprone country, so value of its profound mineral deposits cannot be underestimated as a factor in supporting national output. In both countries, success of resource-based industries has enabled governments to protect relatively inefficient manufacturing sectors. This protection has been vital to employment in Australian and New Zealand cities. As some have remarked, protection of manufacturing has enabled governments to spread benefits of high agricultural and mining productivity 'to an increasingly urbanised population' (Blandy 1988). …