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Practice Network:  Human Resource Practices in 
the Czech Republic

Scott L. Martin

I recently visited Prague and interviewed two human resource professionals. The first was Martin Safr, a SIOP member who operates a small test publishing firm called American Advanced Technologies. The second was Zdenek Modalek, a human resources manager for Orea Hotels. 

Here is my interview with Martin:

Would you please provide an overview of American Advanced Technologies?
We have four managing owners and five consultants who work with us. We started the company in 2001.

Would you describe your educational and employment background?
I received my masters degree in Czech literature, English, psychology and pedagogy. I began my career teaching language. I then worked as a political analyst at the Japanese Embassy in Prague. I have been working in the human resources and employment testing area since 2001.

What types of assessment systems do you offer?
We have one personality-based assessment system that is used for selection and promotion. We spent 2 years developing the system, which includes 20 scales and job-specific norms, and generates interview questions.

Who is using the instrument?
We have about 100 customers in the Czech Republic. KFC is a typical customer, and they use it for promoting individuals into area and assistant managers.

How common is your work in the Czech Republic?
We dont have a lot of good options when it comes to employment testing. Many of our tests were developed in the United States and translated for use in the Czech Republic. These instruments are often questioned by local organizations due to the quality of the translations or more significant measurement issues. The tests that have been developed here are generally intended for clinical as opposed to business applications. As a result, employment testing is not well known in the Czech Republic. 

How do human resource practices in the Czech Republic compare to those in other European countries or the United States?
Like many European countries, we believe that test results should always be shared with the test taker. We do not have the same testing standards and adverse impact concerns that exist in the United States, but we are very concerned about the privacy and security of test results. For instance, our test data is encrypted when it is sent electronically, and we store our test results in a local bank. Some topics that have been popular in the United States, like performance management, have not been the focus of attention here.

Here is my interview with Zdenek:

Would you please provide an overview of Orea Hotels?
Orea Hotels was originally the property of the trade unions and was sold into private hands in 1997. Our parent is the CIMEX group. We have a total of 29 hotels with 28 in the Czech Republic and one in Slovakia. We have 6,000 beds and 1,400 employees. Orea Hotels has been ranked in the top 100 firms in the Czech Republic.

Would you describe your educational and employment background?
I graduated from Charles University in Prague in 1994 with a degree in human resource management and people development. I then worked for the Ministry of Interior, Metro Stav (a construction firm), and APP (a computer company). I joined Orea Hotels in 1999.

What are the significant business objectives for Orea Hotels?
Our main challenge is changing from a noncommercial to commercial entity. We are in the process of upgrading from a two-star to a three-star hotel. In the future, we would like to expand into Hungary, Poland, and Austria. The key is to manage our brand in an effective manner.

How has the European Union impacted your business? 
On the positive side, the EU will help us expand. On the negative side, we are losing many of our talented employees because they now have other opportunities. 

What are your most significant human resource challenges?
We have focused on reducing turnover and improving customer service. Customer service is critical to our brand and will differentiate us from the competition. Employees must recognize that if our customer has one good or bad experience, he/she will generalize this experience to our entire chain.

How is the human resources department structured?
We have two employees at headquarters (myself and one assistant) and each hotel has one human resource professional. We organize key training programs and provide support with hiring such as advertising and basic assessment tools. However, the chain operates in a very decentralized manner, with the director of each hotel having full responsibility for human resource issues.

How is the human resources department perceived by the rest of the organization?
In the Czech Republic, the human resources department is typically viewed as having an administrative role, but there is more partnership at Orea Hotels. We continue to make progress in this area. As mentioned earlier, the EU has opened markets to many of our employees so we have challenges with turnover. Because the human resources department helps retain and hire good people, we are now viewed as more of a partner.

Can you share an example in which the HR department discovered an important human resource need?
Our anonymous questionnaires indicated that our vertical structure caused distortion in some of our communications. This led us to adjust the structure and implement a monthly magazine. One of our objectives is to help employees better understand our business.

Would you share a couple of other human resource initiatives?
We just implemented an Internet software program called Skills, which is used to evaluate learning and management skills. We also installed a module to test job-specific skills for cooks, waiters, receptionists, and managers following the 3-month probationary period. According to the Labor Code, we can release individuals during the probationary period and our standards are quite high.

How do you evaluate the effectiveness of HR initiatives?
We use turnover data and satisfaction surveys. All training programs have a feedback mechanism. We ask for feedback on a regular basis. For example, we request feedback following our monthly director meetings, and recently there was consensus that we should provide more interaction among all participants.

I thank Martin and Zdenek for taking the time to share their insights with TIP. As always, if you have thoughts on the above or other comments, please let me know at Scott_L_Martin@payless.com or 785.295.6801. Thanks very much!

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