chapter  7
31 Pages

Managing human resources in Hungary

There are visible differences between the levels of development in the human resource management (HRM) practices of different East European (EE) countries. These may be attributed to a variety of differences – in tradition, in levels of economic development and in the degree of centralisation in the previous economic and political systems of the various individual states. In these countries only traces of the characteristics of modern HRM could be detected within the framework of the systems then in force. Typically, approaches similar to the School of Scientific Management were also dominant in Hungary. In general terms HRM activity in this country prior to the changes which occurred at the end of the 1980s was very tightly controlled by the state. ‘The years following the political changes’, according to Antal (2004: 96), ‘were characterised by disintegration in every post-socialist country – and also in Hungary. Today, the shrinking of the national GDP has slowed to a halt and inflation has moderated. This situation has enhanced the value of these markets, which face a probably slow convergence in that they will not be able to catch up with Western countries in the near future, but, rather, in the space of two or three decades.’ During recent years it has become widely acknowledged that, in addition to traditional production-related factors, HRM is becoming more and more important for success to be achieved and for domestic and international competitiveness to be retained or strengthened. In this chapter we shall pay special attention to highlighting both the convergent and divergent trends of the development of HRM in Hungary. We propose to present an overview of HRM policies and practices in Hungary in the light of three different research projects. Our first HR benchmark survey offers insights into HR practices between 1997 and 2001, the second provides information on the HRM functions of multinational corporations operating through their Hungarian subsidiaries from 1988 to 2004, whilst the third comprises statistics, analytical detail and a stochastic analysis of Hungarian data vis-à-vis HRM practice in East European countries and in the whole CRANET (Cranfield Network on Comparative Human Resource Management) database also.1