Thursday, 16 January 1986

A Comparison of Human Resources Practices Between Singapore and Britain (2009)

OBHR 201 - Human Capital Management


The Singaporean community is a very diverse community with four official languages. As for business and politics, English is the official language. The structure of society is built on fundamental values such as group harmony, loyalty and respect. This also applies in the world of business for Singaporeans as organizations within are very group oriented. The organizational structure is hierarchical and has a very strict chain of command. As for doing business, the cornerstone is building and nurturing relationships and when doing so, one has to be careful with one’s approach as the different ethnicities have very different customs and etiquettes.

Great Britain consists of four different countries – England, Scotland, Wales and Northern Ireland – who all have very strong identities and sense of nationalism. Britain has no core fundamental values like those stated for Singapore, but her society still has a strong class system to some extent where different norms apply to each class. Even though organizations in Britain have a more ‘flat’ structure, the class system still exists. Britain is also known for its status as a welfare state. There is a proper way to act in most situations and the British are sticklers for adherence to protocol. The British have been historically known for their stiff upper lip. This ‘grin and bear’ attitude in the face of adversity lives on today. The British are very reserved and private people. Privacy is extremely important. When it comes to doing business, it is not as important to establish long lasting relationships as in Singapore (UK – Language, Culture, Customs and Etiquette, n. d.). The concept of the learning organization is an outgrowth of British management culture, which spearheaded the development of learning as an experiential activity that occurs as part of the management process in order to develop valuable human resources (Jackson, 2002).

As has been often stated, Singapore is generally regarded as having a human resource (HR) culture that is rather weak and the HR department is often regarded as a largely ‘sideline’ and administrative job that has no real practical business use. This is however very much unlike the HR function in Britain, which places a higher emphasis on learning and development of the individual through the management process, representing a philosophy that believes in a higher sense of purpose for human resource management (HRM) rather than Singapore’s straightforward, profit-oriented judgment of HRM.

It would therefore be pertinent to question why this is so because of their potential similarities, which partly stems from Singapore once being a colony of Britain, and how Singapore’s HRM culture can be improved. We will do this by comparing HR practices between Singapore and Britain under the context of culture, followed by an analysis and some recommendations.

Comparison of HR Practices Between Singapore and Britain

Recruitment and Selection

When employing HR planning techniques in Britain, 63% of organisations recruit to maintain adequate personnel, 83% do sales and business forecasts, while slightly more than half of organizations analyze labour markets. Almost all organizations in Britain do a forecast of skills requirements at 94% (Dany & Torchy, 1994).

65% of British organizations experience recruiting problems, with the recruitment of qualified professionals the most significant challenge (Dany & Torchy, 1994). Britain often resorts to training and re-training programmes to circumvent its recruitment problem, with 67% of organizations engaging in these programmes (Dany & Torchy, 1994). This is especially so given Britain’s learning organization model and valuing of experiential learning, where the training and development of their workforce is a vital component of any worthwhile form of HRM (Jackson, 2002). Aside from this, 53% of British organizations also turn to hiring more part-time employees and employees on short term contracts. More specifically, British employees are more favourable with part time employment than short term contractual employment, with women making up more than half of these part time employees (Eurostat, 2002). Employment problems have also led Britain to lower age requirements, posing a potential child-labour problem.

Regardless of size, almost all organizations in Britain (97%) use applications forms. References are also one of the most popular means of selecting employees, with 92% of organizations using it. The next most commonly used method of selection, with endorsement from 71% of organizations, is through the interview.

British employers are keen to do interviewing because it serves a valuable information function. It facilitates a communication process between employers and candidates regarding important job characteristics and expectations of both parties. Furthermore, it fills gaps from other information sources, such as curriculum vitae and targets valued characteristics which can only be assessed in person, such as appearance or interpersonal skills (Arvey & Campion, 1982).

Larger British establishments are more likely to use systematic methods, particularly psychological and personality tests for management and technical staff, and work samples for clerical staff. There is a greater use of work samples for clerical, skilled and technical staff, reflecting the general perception of their usefulness for assessing easily measurable work involving criteria such as accuracy and competency in using equipment. Additionally, the larger the firm size, the more useful a structured form becomes for filtering large numbers of applicants, which reflects differences in methods of attracting applicants for managerial positions and differences in relevant labour markets. Larger British firms may view application forms as a useful marketing tool, which allows them to portray a particular organisational image and culture in order to attract high calibre candidates (Campbell, Lockyer & Scholarios 1997).

In Singapore, local daily newspapers have extensive classified ads for job vacancies. The print media is used most widely to recruit all levels of employees such as operators, supervisors and managers. With the exception of executive search firms (the second most frequently used method for managers), companies use the following methods regardless of job levels: employee referrals, walk-ins, employment agencies and rehires. Other innovative methods include career fairs, electronic media and campus drives (Campbell and Campbell, 1997).

Chew and Goh (1997) found that weighted application forms, reference checks, interviews and medical examinations were also frequently used. However, there are some differences for specific types of employees. Reference checks were more commonly used to select managers (58%), compared with supervisors (40%) and rank-and-file (37%). Performance tests, work samples, job ability tests and physical ability tests are more frequently used to select rank-and-file employees. Among the numerous recruitment methods, pamphlets, signs and bus advertisements, and radio and TV advertisements were among the least popular, with less than 20% of companies using any of these methods.

Compensation and Benefits

Compensation levels in Britain are influenced and determined by various laws, acts, and regulations.

The practice of having government-mandated minimum wages was first implemented in 1999 and has continued since. Under the National Minimum Wage (NMW), minimum wage rates vary according to age, falling approximately between £3.00 and £3.60 per hour (Duane, 2001). Hence, the NMW sets the lower limit for compensation, and wages in Britain will not end up at any value below this rate.

Britain’s Equal Pay Act was passed in 1970 to ensure that all employees had “equal pay for work of equal value, regardless of gender” (Duane, 2001). After amendments had been made to the act, it now states that regardless of whether a job evaluation plan exists in an organization, if a woman can prove that the work she did was equal in value to that of a man employed by the same organization “in terms of effort, skill, and decision-making”, she would have a valid case against her employer to fight for equal pay. However, as this procedure involves a lot of red-tape and is relatively ineffective, it has been reported by the Equal Opportunities Commission in 2000 that woman are paid an average of 20% less than men. This difference is even larger in the financial sector where women are paid 55% less than men (Duane, 2001).

Britain’s average wages for employees are only at a moderate level in comparison to the other European countries. However, more than half of the British organizations have made variable pay a more significant part of their compensation structure: 63% of public-sector organizations offer variable pay of some sort to their managerial employees, and 23% have included clerical workers in this program (Duane, 2001). With regards to variable pay programs in Britain, employee-sharing programs and group bonus programs are most commonly used. It is the trend in Britain to place an “emphasis on employee share ownership schemes”, where employees can own a share in the company’s stocks (Duane, 2001). Using merit pay to compensate managers and professionals is also growing in popularity in the United Kingdom, where pay is linked to employee performance based on merit (Duane, 2001).

In terms of benefits, Britain provides universal health care to its citizens, regardless of their status of employment. Funding for this health care service comes from two sources: 82% comes from general taxation, while the other 18% comes from the national insurance payment, which consists of contributions made by both employers and employees. In order to make health care cheaper and more efficient, the United Kingdom passed the National Health Service (NHS) and Community Care Act of 1990, which allows hospitals and other health service centers to autonomously control funding that they receive from the government, to encourage competition within the industry (Duane, 2001).

Most European countries have regulations mandated by the government, that “guarantee workers generous paid leaves, including holidays and vacations” (Duane, 2001). The UK is an exception to this, as it does not have any extra mandated vacation time beyond the typical eight bank holidays. However, British paid leave is still, on average, 22 days a year, which is high in comparison to other countries without additional mandated holidays.

Although there are trade unions that fight for workers’ rights, especially regarding compensation levels, these unions are gradually losing their influence in Britain (Communal, 2004).

Likewise for Singapore, the Singapore Employment Act sets the basic terms of employment and compensation. It is also possible for an employer and a union to set additional terms and conditions between them, but this has to be certified by the Industrial Arbitration Court (IAC). The purpose of the employment act is to protect employees, who may have weak bargaining power against their employers, from abuse or exploitation. Any term of employment that is less favorable than those stipulated by the Employment Act is “illegal, null and void” (Tan, 2004). The act only covers workers who are non-managerial employees.

Singapore has a National Wages Council (NWC), consisting of representatives from the government, employer associations and trade unions. The NWC makes recommendations on guidelines for annual wage adjustments, and although these are not mandatory, these guidelines are generally accepted and adopted by most organizations and trade unions (Tan, 2004). Unlike Britain, Singapore has no mandated minimum salary, and wage rates are purely dependent on the private and mutual agreement reached between an employer and an employee (The Employment Act: Payment of Salary, 2008). The Employment Act was amended in 1988 to give companies more flexibility to pay employees wage increases and variable bonuses, that were mostly performance-based (Tan, 2004)

The Employment Act also covers other forms of compensation such as entitlement to overtime pay, and extra pay for holiday work. Overtime cannot exceed 72 hours per month without prior approval from the Commissioner of Labor (Tan, 2004). Singapore’s 11 public holidays, employees’ entitlement to paid sick leave for 14 days a year and terms for terminating contracts also have to be observed by employers under the employment act. Under the act, employees are only eligible to receive retrenchment benefits after three years of service in a company. However, this entitlement would only be valid if the retrenchment benefits had already previously been included in the original employment contract (Tan, 2004). Otherwise, no retrenchment benefits will be offered.

Additionally, Singapore has a Worker’s Compensation Act which makes certain that workers receive compensation for any injuries suffered at the workplace. Singapore also has a compulsory savings scheme for all citizens, called the Central Provident Fund (CPF), which employees may only withdraw funds from during their old age or for specific investments such as buying a home. This fund comes from both employers and employees, both of whom need to contribute a “specified percentage of individual employees’ wages” into the employee’s CPF account (Tan, 2004). Singapore does not provide free health care for its citizens, but citizens can use their CPFs to pay for some forms of medical care.

Performance management and appraisal

Around 86% of British organizations operate a systematic approach in evaluating employee performance, and at least 20% of organizations had a formal performance management programme (Bevan & Thompson, 1991). The focus of British organizations is often on bottom-line delivery, and it was initially felt that performance appraisals might add to the pressures on managers’ time, and they might be a source of disappointment or discontent for employees who feel they are treated unreasonably.

However, a study revealed that annual appraisals encourage employees to feel valued, engenders a sense of personal and career development and increases organizational commitment (Strebler et al., 2001). Employees who receive appraisals are also not only more positive about their jobs but more competent at them as well (Borrill et al., 2001). Performance appraisal flourished in Britain due to a political climate that favoured an individualistic competitive philosophy (Anderson, 1993), with emphasis on the importance of lifelong learning in British culture.

Performance appraisal is widely used for managerial and white-collar staff in Britain, more so than for other categories of employee (Roomkin, 1989). The identification of training and development needs and evaluating individual performance are the main reasons performance appraisals are used in Britain’s private sector, with most large organizations appraising all employees (Rosemary, 2004).

This is in contrast with Singapore’s lesser interest in performance management and appraisal. In a 1990 survey done by the Singapore Institute of Personnel Management and the National Productivity Board, performance appraisal was ranked fourth out of a list of thirteen common HR functions done by companies. In general, appraisals were done once a year, with the likelihood of rank-and-file and supervisors being appraised more frequently. About nine out of ten companies with HR departments had appraisals compared to seven in ten companies without a separate HR department.

Mills (2003) stipulated that the most commonly used performance management and appraisal system design of companies in Singapore is the trait-based approach with 35.6% of companies doing so due to the difficulty of setting ‘objective’ performance goals for non-technical/sales positions. In smaller companies, where management staff has to handle their own paperwork, trait systems are less in evidence.

This is followed by performance management, with adoption by 26.7% of Singaporean organizations. It is more likely to be used by Western companies that have PM/A policies. Because of performance management’s linkage to performance-related pay, it is not favoured in unionized environments.

19.8% of companies utilize the hybrid system. The hybrid system is in a transitional phase – if Singaporean companies see the value of linking business strategy to individual responsibility and the benefits of cultural change, then they will side step the hybrid approach and upgrade to performance management. This is followed by management by objectives at 6%, and team performance management with 2.9% of companies adopting it. Team performance management is relatively new in Asia. As it frequently involves multi-rater feedback, which often requires specific training in qualitative feedback and suffers from administrative issues, it is yet to take hold in Singapore.

Government policies have far-reaching implications for HR practices at the organizational level for Singapore. When the National Wages Council recommended a flexible wage policy, the government pushed for the introduction of performance appraisal so that performance-based bonus payments could be implemented smoothly. In addition to the government, other forces which affect HR practices include headquarters influence on MNCs’ level of technology, organization size, and sectoral differences in HR (Yuen, 1998). With continual education, the systems are likely to become more refined although the wholesale adoption of western models, such as the open appraisal, is unlikely, especially with Singaporeans’ concern for ‘face’. In a culture were trust and relationship remain important, appraisal will include trait and personality variables (Mills, 2003).

Training & Development

In Britain, training has been considered important for many years, and is often “central to HRM in addressing performance issues and managing change” (Jackson, 2002). However, in spite of this, employees in Britain receive a moderately limited amount of training, with approximately only 10% of British organizations offering ten or more training days for managers per year (Duane, 2001). In a survey conducted by the Cranet Network from 1999 to 2000, it was reported that only 18% of organizations in Britain spent more than 5% of their wage bill on training, which was relatively low in comparison to the other European countries being surveyed (Communal, 2004). In general, compared to other leading economies, Britain’s practices in HRM are actually low in expenditure on training (Tayeb, 2005).

The standard method used for training managers in Britain is formal career planning, where managerial careers are planned carefully, and selected employees are trained to eventually become high-level managers. Performance appraisals, where managers are given feedback on how they can improve their own performance, and succession plans, where good performers are “selected to begin preparation for replacing key personnel, who for whatever reason are expected to leave the organization”, are also relatively common methods of management development in Britain (Duane, 2001).

Before designing a training program, it is essential to first complete a detailed assessment of employees’ needs, in order to determine an area of focus. According to data analysis, Britain has shown to be quite satisfactory in this aspect, with 80% of organizations engaging in some form of needs analysis before heavily investing in any employee training. The most common method of needs assessment in Britain is the use of performance appraisals. On the other hand, it has been suggested that, along with a majority of the European countries, British organizations seldom incorporate employee requests into their needs assessment for training programs (Duane, 2001).

The focus of training programs in British organizations has been on performance appraisal, staff communication and tem building, with a significant portion of British managers having been trained in these aspects. However, there has been a general lack of interest in and focus on foreign language training. This is a relatively pressing issue because following the unification of Europe, business opportunities in the region have been growing and this lack of foreign language training could act as a handicap for British organizations. Formal evaluation conducted immediately as well as some months after training, which is suggested to be the most informative means of assessing effectiveness, is quite commonly used in Britain as a method of monitoring the effectiveness of an organization’s training program (Duane, 2001).

Although Singapore is far from a leading practitioner of HRM, there has been increasing emphasis placed on the importance of training and skill upgrading for employees. Government ministers and leading unionists constantly remind Singaporean workers that they should “constantly upgrade their skills, accept changes and prepare to work for more than one employer in their lifetime” (Cappelli, 1999).

Management education, particularly management development programs, is offered by the three main universities in Singapore: Nanyang Technological University, National University of Singapore, and the Singapore Management University (Tan, 2004).

Most civil servants in Singapore receive their training at the Civil Service College (CSC), which is Singapore’s main public sector training institute. Seminars are also conducted and available at the Institute of Policy Studies (Tan, 2004)

Most workers in Singapore undergo on-the-job training (OJT) at some point in their careers. The Standard Productivity and Innovation Board (SPRING) estimates that 40% of the Singapore workforce undergoes some form of OJT every year. It has been reported that over 90% of the companies in Singapore do practice OJT (Tan, 2004).

In 1990, SPRING collaborated with a Japanese company to develop a “self-instructional OJT package” (Tan, 2004). This was implemented in the hope that more companies will engage in training their employees, and the package shows step-by-step and serves to guide companies on how structured OJT can be developed and implemented by an organization. Over 3,500 packages have been sold to 1,500 companies, and have trained over 10 000 employees on how to develop and deliver OJT (Tan, 2004).

However, while this sounds promising for the future of HR training in Singapore, there is evidently still much room for improvement. A study by Chew and Teo (1991) compared the HR practices in local firms and MNCs based on survey questionnaires. Some of the companies surveyed were locally owned, while others were jointly or fully foreign-owned. From this study, the local companies were found to have higher turnover rates, reflecting their inability to retain employees. This was attributed to their “comparatively ineffective selection function, the lack of training programs and less favorable pay and working conditions” (Chew, 1991).


We will be using the cultural dimensions developed by Hofstede (1984) to conduct an overarching analysis of the two countries.

Power distance

British organizations are flatter, while Singaporean organizations have greater hierarchy and tolerance for the unequal distribution of power. Culturally, Singaporeans are more accepting of a top-down and directive management style within the organization than the British, and acknowledge that power is often concentrated at the top. In Asian cultures, authority figures are generally given due respect and readily adhered to. Therefore, it is unsurprising that Singaporeans accept this unequal distribution of power as a fact of life and seldom consider changing it. This is evident, for example, in the small role that unions play in Singapore, where few Singaporeans actually want to actively fight for various issues, such as higher wages and compensation. However, since Britain is much lower in power distance, many citizens are intolerant of any practices which they deem to be unfair, and often actively join unions to promote change.


As shown in the chart, the business culture in Britain is based much more on individualism, contrary to Singapore's collectivist culture. It might be interesting to note and wonder why the more individualistic country (Britain) is a welfare state, while the more collectivistic country (Singapore) is not. Collectivistic cultures are more characteristic of welfare, in which people have a natural disposition to look after one another. It is plausible that Singapore has come a long way and worked hard to become the nation it is today, overcoming many obstacles in the process. Many Singaporeans, especially the older generation, acknowledge the importance of industriousness, and are aware that many things can be taken for granted if they are easily obtainable. Therefore, Singapore is not a welfare state and will not completely provide for the unemployed because it does not want them to free-ride and be a burden on the rest of the nation. However, the government still provides other subsidies for welfare areas such as medical care.

Uncertainty avoidance index

Interestingly, Singapore scores extremely low on this ranking. It would be commonly assumed that a country with such strict rules and regulations would be more averse to change and view new ideas more negatively, with a low inclination towards risk. Britain has a high score which implies that they are more skeptical to change and averse to taking risks. This is interesting as the western part of the world is more known to be risk-taking in order to generate profit. Britain’s risk-aversion could be linked to its likelihood of engaging in needs assessment before implementing any training programs. A needs assessment will help to ensure that the training will be effective with as little loss as possible. On the other hand, training in Singapore seems to be implemented on a more casual and flexible basis.


Both countries score somewhat similarly on this point. However, although both countries lean towards a feminine business culture, Singapore’s culture is slightly more masculine. This implies that Singaporean organizations create a more competitive working environment and that Singaporeans have a higher live-to-work mentality than the British. Singaporean firms’ strong focus on profit and the bottom-line could be a factor contributing to its more masculine competitiveness. On the other hand, with Britain’s rich history, its people tend to be more self-actualizing. This is demonstrated by British organizations’ greater willingness to implement PM, which would be seen as a waste of time and resources to many Singaporean companies.

Long term orientation

Britain’s business culture is more short-term oriented than Singapore’s. This is common for western countries as individualism stands strong and the focus on short term profits are high. It is worth noting that cultures with low uncertainty avoidance would be more short-term oriented, but when we compare these two cultures, it is not the case. Britain has demonstrated its short-term orientation through its TD, which are heavily lacking in foreign language training. As explained earlier in our comparisons, Britain’s lack of interest in foreign language training programs is evidence of its short-term orientation, and its inability to foresee the long-term advantages of such training. On the other hand, Singapore has more long-term orientation, with its leaders constantly reminding Singaporeans to upgrade their skills and be prepared for any future changes.


Singapore HRM essentially loses out to Britain in the arena of self actualization as an underlying philosophy. With the importance of learning in mind, Singaporean organizations should especially target improvement to its HRM in the areas of TD and PM/A.

Organisations should establish the mindset that training is essential, consisting of skill-based modules to include performance planning, tracking, feedback and coaching and appraisal as well as a consistent approach to a mid-year review. The involvement of line managers in the training process may prove to be beneficial as well. Performance indicators should be developed to ensure the success of TD, such as reaction (proof of effectiveness of training), learning (do staff now understand the system?) and application (can staff utilize new skills learnt?).

PM/A needs to be explicitly linked to the strategic focus of the organization and has to be seen as a developmental process, with employees being able to give feedback without fear and objective data to support ratings. Competencies, not just traits, should be used to direct job performance, forge a stronger corporate culture and be completely strategically focused. Appraisals should also be properly documented, with a second person ratifying the results. Avoid discussing pay during appraisal, as it can relegate the PM/A into a pay delivery system. Performance indicators should be developed to ensure the success of newly implemented PM/A systems, such as productivity measures and other tangible benefits.

Above this, members of the organization also need to know the importance of implementing such recommendations for it to translate into positive acceptance and results. A handbook describing the purpose, policies and processes for the PM/A system will be useful, especially in clearly conveying the benefits of the system and helping those new to it along.

Aside from TD and PM/A, Singaporean organizations should also relook recruitment and selection practices. While Singapore is low on prejudice compared to Britain, some degree of discrimination still exists which can prove to be a hindrance to recruitment. Some recommendations to overcome this is to be more open to possible labour markets, such as enticing foreign talent to one’s company. Part-time jobs can be offered to retirees and housewives, especially in the light of the increasing retirement age, and providing more training opportunities.

The Singapore government considers quality education and life-long learning crucial for national competitiveness. Because of the emphasis on competition and excellence, the country is slowly transforming itself from a society that endorses traditional Asian values to one that focuses on individual success. As such, the educational curriculum is being reviewed and revamped. Independent thinking, creativity and entrepreneurial spirit are increasingly emphasized. Furthermore, with the recent influence of western management practices, many local companies have employed foreign professionals. Many locals are studying management in universities abroad. Upon returning, western management practices get introduced, which have implications especially for more traditional Singaporean organizations (Tan & Torrington, 2004). Organizations should capitalize on this transformation which represents a broader, more open and liberal way of perceiving the world, business and HR.


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Retained Executive Search Firms said...

These statistics are incredibly interesting, they just go to show the differences between western and non-western countries.