HR practices across the GCC: How do they compare?

Published February 25th, 2015 - 01:18 GMT
For businesses across the world the top reasons to retain and engage employees are linked to performance management and rewards. (Shutterstock)
For businesses across the world the top reasons to retain and engage employees are linked to performance management and rewards. (Shutterstock)

As the Gulf region continues to grow and businesses expand, we are seeing huge competition for new talent and a focus on sustainable labour costs, which in turn is putting a spot light on HR departments. Looking globally, the best HR practices are those that develop talent, growth and innovation. Increasingly, therefore, the emphasis is on executing talent, whether it is candidate sourcing, assessment or training, necessary for achieving organisational acceleration and business goals.

For businesses across the world the top reasons to retain and engage employees are linked to performance management and rewards. Performance appraisals, whether they are quarterly or annual, are the standard best practice. Almost all of the organisations nowadays use a form of performance appraisal, varying from simple ranking schemes to complex behaviourally based rating schemes. They are a chance to take a step back and look at the bigger picture and really think about the goals of management, the business and the employee.

However, believes that appraisals alone are not enough. Regular meetings and feedback are even more important, especially in order to engage your workforce and iron out any issues before they become problems. They are also needed to keep a person motivated and highlight what works best, so that the employee may focus on improving and enriching the successful practices.

So, as today’s focus is shifted heavily towards motivating the employees, it is important to focus on enhancing their knowledge also through training and development. This is possible by widening the scope of human resource functions and hiring experienced managers who can strengthen the bond between employee and employer.

Across the GCC, human resource functions appear to be limited and focused on recruitment and talent acquisition, and much less around skills development and appraisals throughout their career path. Just take for example ‘Pay-for-performance’ which worldwide has become an increasing trend for employers that are looking to engage their workforces as well as increase the profitability of their businesses, yet for Gulf regions this concept is still relatively new.

Additionally, in the GCC the process of nationalisation, which promotes higher participation of local population in the national workforce, has an impact on appraisals, pay systems and pay incentives. Related to this, performance appraisal across the GCC is extended to family and tribes, who play a role in decision making. In Saudi Arabia, anecdotal evidence suggests that promotion of people with tribal or family connections is very common.

So, as previously mentioned, rewards, recognition and performance management are a part of the equation that can’t be ignored and play a role in reaching emiratisation and nationalisation targets for organisations. But it is important that companies in the GCC anchor them in more complete HR and managerial approaches and take into account the improvement of employee motivation and development.

Having said this, as these countries are becoming fast growing markets, organisations have come to value and understand the importance of effective HR practices. Consequently, a lot of effort and hard work has been invested lately in improving HR practices and strengthen HR frameworks in the regions, for example by creating progressive people practices and supporting labour market.

The impact of mega events on human resources, particularly the World Expo 2020 and FIFA World Cup 2022, will further accelerate demand for a more professional approach to people strategies and policies. Monster and industry experts agree that there is an urgent need for developing human resource practices to retain and groom local talent, through innovation and openness to change among both public and private sector employers, and ultimately also by the appraisal system.

If we take a look at salary increases, the GCC is making progress. Indeed, according to the latest figures from Aon Hewit, GCC companies are predicting an average salary increase of 5.1 per cent for 2015, with Oman and Saudi with the highest salary increase projection for 2015 at 5.4 per cent each.

As a result, HR practices in the Gulf will have to keep up and evolve to develop talent and keep up in a fast growing market environment. Implementing best international HR practices means bringing in the best of local talent as well as regional and international expertise, whilst offering professional training and development programmes on a regular basis.

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