LESSONS FROM THE ‘WILD EAST’ 299need to address the need for performance appraisal systems, cross -
cultural training, and management development (see below).
Under the communist system, people were selected for their posi-
tions because of their ties to the Communist Party or the military.
Administrators moved from the Komsomol to a trade union position,
and then to a party position (and then another and another). Compensa-
tion — often supplemented with perks such as cars, special housing,
dachas , or medical services — was linked to job hierarchy rather than
performance. Complete job security was the norm and there were no
incentives for working hard, or harder. The Communist Party controlled
management appointments in the business world, and those appoint-
ments carried little prestige. Most people saw them as transitional steps
and aspired to move past them into high - level Party work. Perestroika
ended all that. Jobs are less secure these days, and individual contribu-
tions to the success of an organization are increasingly important factors
in assessment. Variable fi nancial reward systems such as profi t sharing
and bonuses are becoming more common. New, radically different
career paths are on the horizon.
Performance and a ccountability Singling out individuals for special
fi nancial reward because of their extraordinary contributions, however,
violates the basic Russian urge to equalize. This element of the Russian
character is a serious impediment to new business creation. Successful
business people are quickly labeled profi teers — a label reinforced by the
behavior of the new oligarchs. But gradually, as the new generation of
executives becomes more infl uential, that perception is likely to change.
They advocate that accountability needs to be driven deep down
into organizations by creating profi t or responsibility centers. The new
Russian leaders realize that specifi c responsibility and authority over
organizational sub - units need to be delegated to executives (at all levels).
If the Russians who attempt to reinvent a new human resource
management agenda are to succeed, they must build on the Russian
cultural heritage, however. Business leaders must work with existing
values and reshape them in a way that Russians will accept and
internalize. In this process, a reinvented concept of leadership will be
essential.
Management Development
Russian organizations are most likely to achieve a productive corporate
renewal process if change management is initiated at senior levels.
Many executives who have the will to change lack the skill to do