Competencies for International HR - Essay Example

Competencies for International HR The work by Sparrow et al (2004) identifies a number of competencies for International HR. A look into the competencies after nearly a decade proves that they are all still relevant in the International HR. As the scholars define, “Global HRM involves managing international HRM activities through the application of global rule-sets” (Sparrow et al, 2004, p. 13). In fact, there is an increasing need for the competencies in the modern business climate. Admittedly, this changing role of HR is the combined result of globalisation of businesses and the emergence of IT. In the rapidly changing modern global economy, the ability of an organisation to adapt its operations is the most important factor that decides its future survival. Referring to Stroh and Caligiuri (1998), one of the most critical factors for the success of a company is its management of the human assets. The most important issue for HR in global organisations to decide at present is to decide whether they should depend on convergence or divergence. Convergence refers to developing the same basic rules and regulations for all locations, and divergence refers to allowing diversity according to local requirements. As Amstrong (2006) points out, the decision to make a company centralised or decentralised is dependent on a number of factors. These factors are: the extent to which there are well-defined local norms, the degree to which a unit is embedded in the local environment, the flow of resources from parent company to the subsidiary, and the nature of the industry (ibid). Admittedly, one thing becomes evident from this description: HR has an important role to play in this situation. A study in Malcrum(Alexander et al , 2009) with the support of HSBC looked into the role of internal and external communication in the present day international HR. It is found that the purposes in enhancing internal communication for businesses are creating understanding of the company strategy and direction, supporting organisational change, keeping people informed of company news, building company pride, and helping people to live values (ibid). Thus, it becomes evident that the purposes all are linked to HR. The main purpose of internal communication is employee engagement. Then, the study looked into how this internal communication is linked to external communication. In the present day business world, companies undergo rigorous scrutiny from the part of media and governments. That means companies will have to ensure that they practice what they preach. As Alexander et al (2009) states, if a company makes a public statement, it should make sure that the employees are aware of the same, and vice versa. When this point is discussed, it becomes necessary to point out how a lack of relationships with external media, governments and local communities can be destructive at times. An example is the crisis faced by Shell Oil in Nigeria. To illustrate, it was during 1990s that Shell Petroleum came under heavy fire from the part of international press and local media for alleged environmental pollution of the delta. Noted public figures like Saro-Wiwa raised their concern against the company, and mass agitation began in no time. The company realised that it had little chance for improving its image or to bounce back to its previous glory as it had not cared to keep relationships with international media or the local community. In order to improve its image, the company took the following public relation initiatives. Firstly, it started balancing its business with active citizenship/working in partnership with communities. Secondly, the company decided to position itself as a company that respects human rights and environment. Thirdly, the company started publicising itself as a law-abiding, non-sectarian company. As Turk and Scanlan (1999) reflect, the company decided to propagate what it did for community and environment. Thus, one thing becomes very evident. International HR needs to be able to keep both internal and external relationships alive until and unless world uniform culture and working conditions are achieved. To illustrate, Philips is a Dutch electronics giant. Presently, the company relies on Chinese workforce for more than a quarter of its total production. Also, the company is planning to shift its more production units to China. Evidently, China has a culture and business climate that is far too different from that of the West. According to Ballenger (2009), for a company like Philips which has to get line managers and employees from China, it becomes necessary to have good levels of relationships with them. First of all, employees may not be as dedicated to a foreign company as to a local company. In addition, the employees may be suspicious about the attitude of the management towards them. So, only a good level of internal networks can make the HR aware about such issues and keep the employees motivated and satisfied. The second important thing is external communication. Admittedly, nations like China have a highly fluctuating economy where changes are likely at any time. In such a society, it becomes necessary to ensure that the company remains well aware about he possible changes and also that the local community remains satisfied with the company. This is very necessary to ensure the long term survival of the company. Also, a good image is necessary to ensure proper supply of workforce. As already reported (Asia HR Executive Board, 2008), in China, most foreign companies are witnessing considerable degree of employee turnover. So, it becomes necessary for companies to find out the reasons behind this trend and take necessary steps to retain the staff (ibid). This turnover will adversely affect employee morale and public image. So, only good levels of internal and external networks can keep the company alive in such a climate. In the opinion of Torrington et al (2009, p. 6), HRM has two meanings at the same tome. While the first meaning is the traditional meaning of personnel management, the second is wider in nature, which means conducting people-oriented organisational activities (ibid). Following this, Beardwell and Claydon (2007, p. 76) clearly define the difference between the ‘personnel management tradition’ of HRM and the ‘human resource management tradition’ of HRM. While the former is dependent on the employers’ desire to treat people equally in organisations, the latter is the result of the employers’ need to have competitive advantage in the marketplace. And, admittedly, the latter is more important today (ibid). Also, while the former is delivered, monitored and policed by personnel specialists, the latter is provided by HR professionals in collaboration with line managers. Thus, there arises the first point that international HR requires strong personal networks both inside and outside the organisation, at the same time providing a structure to the collection of relationships. In order to understand this situation fully, it becomes necessary to look in to the HR Profession Map as developed by CIPD (2012). It shows the widening of the roles of HR. Presently; the HR functions can be divided into shared services, business partners, centres of expertise, vendor management, and corporate HR (ibid). The shared services include a number of HR administrative tasks along with offering information and advice through intranets and call centers. Business partners work on strategic development, organisational design, business performance or change management with various business units or line managers. Another way of HR is centers of expertise that provide support to business partners, develop corporate HR policies, employee relations, and so on (ibid). Another category is the vendor management which offers third party services like pension administration which are often managed through service-level agreements. Lastly, there is the corporate HR that is primarily aimed at governance: and it is responsible to see that that corporate values and legal requirements are properly followed (ibid). From the description, it becomes evident that while HR professionals develop strategies, the line managers are responsible to implement the same. That means HR professionals are in need of remaining in constant communication with their line managers both before and after developing strategies. A lack of communication in this area will have an adverse impact on the outcome. To illustrate, studies (Torrington et al, 2009) proved that the behavior of first-line managers is the most important factor explaining variations in job satisfaction and job discretion among employees. The scholars rightly point out that improving the relationship between managers and their employees is one of the most effective way of improving employee performance and motivation (ibid). Understanding this situation, Jennifer Palthe pointed out that in order to effectively implement HR policies, line managers need to work closely with HR practitioners to maintain consistency and effectiveness. In the present day business world where companies operate internationally, managing HR has become a rather difficult task. First of all, there are various cultural factors which make it necessary for companies to have different HR practices for different geographical areas. An example of this cultural difference is the typical Japanese view of lifetime employment in return for this loyalty. As a result, in Japan the incentive plans focus on work groups while in the West, still the focus is on individual workers. Thus, it becomes evident that inter-country cultural differences have several HR implications. First of all, there is the need to introduce suitable selection testing and pay plans for each local customs. Anyway, it is very evident that when a company reaches overseas, it is highly vulnerable to cultural issues. As Palthe (n.d) reminds, in order to meet the challenges of culture on HR, it becomes necessary to ensure proper understanding of the host culture. Another avenue that requires attention in the international HR is the way expatriates should be handled. They experience a lot of problems while leaving for a foreign land and also while coming back to their parent company after a while. So, it becomes a role of HR to recruit, train, send, and properly communicate with expatriates. This point becomes all the more important when the cultures are entirely different. Thus, the discussion so far has made it clear that HR is not only about handling employees justly. Presently, HR is about developing competency-based strategies. Snell et al (2001) reveal the fact that most companies have realized the changing role of HR. Presently, instead of being a blockade between line managers and employees in their transactions; HR is above the level of line managers. In this new step, HR acts as a source of information and resources (ibid). That means, presently, HR ensures that all the contingencies are met proactively and guidelines regarding the same are placed before line managers and employees. That means the transactions are largely automated along with seamless HR services. Thus, HR gets more time to invest in development and promotion of ideas. In addition, it gets adequate time to look into the development of dialogues. That means, with new roles in hand, HR manages to bring in appropriate knowledge and ideas. However, the mere problem is that with subsidiaries spread across the globe, HR is forced to handle all these things in a virtual atmosphere. Thus, the present day international HRM is a virtual department that is a network-based structure which is a collection of partnerships. Information is mediated through information technology. As there is newer and newer technology like Enterprise 2.0 that allow easy interaction, it is possible for HR to interact with various stakeholders from even remote parts of the world. First of all, such tools can be used as the way to spread company news, strategies and values to line managers, and various employees around the globe. Secondly, such tools can be used by line managers and other employees to look for necessary HR information as and when required. Thirdly, all stakeholders get a chance to opine publicly and compare their opinion with that of others. To illustrate, Merck, the pharmaceutical company, uses an IT system called ‘Joblink’ that tracks and analyzes job applications. This information immediately becomes available to line managers for further action. Another important HR movement towards virtualisation is seen in the development of e-learning known as ‘Performance Compass’. It acts as a source for managers to assess their developmental needs and connects them with external educational resources. The relationship with external parties should also be taken into consideration here. In the modern business world, all businesses depend on outsourcing important tasks. So, this outsourcing comes with a number of HR challenges. There are issues like staff training, job design, performance management, and compensation practices that need to be taken care of. Thus, in total, it becomes evident that all the points found by Sparrow, Brewster and Harris (2004) are relevant even today, and in fact, their importance has gone up. First of all, more and more companies have started using the low-paid workforce of Asian economies. Going to this new culture requires an understanding of, and respect for, the host cultures. Secondly, with the workforce spread across the globe, HR is no more a physical entity but is a virtual department that offers guidelines to line managers and employees. It also interacts with various other stakeholders using IT tools. References Amstrong, M., 2006. A handbook of human resource management practice, pp. 1-982, [Online] Available at: [Accessed 27 March 2012]. Alexander, Lindsay-Smith, S & Joerin, C., 2009. 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Virtual HR departments: Getting out of the middle, CAHRS Working Paper Series, pp. 1-29, [Online] Available at: [Accessed 27 March 2012]. Stroh, LK & Caligiuri, PM., 1998. Increasing global competitiveness through effective people management, Journal of World Business, 33(1), pp. 1-16. Turk, JV & Scanlan, LH., 1999. The evolution of public relations: Case studies from countries in transition, Fifteen Case Studies in International Publications, pp. 1-212, [Online] Available at: [Accessed 27 March 2012]. Torrington, D, Hall, L, Taylor, S & Atkinson, C., 2009. Fundamentals of Human Resource Management: Managing People at Work, UK: Financial Times Management. Read More