Development and Reward for the New Manager of Reardons Hotels Branch in Southern Spain - Term Paper Example

International Human Resource Management: Reardon’s hotel Case Study Name: Tutor: Course: Date: Introduction Reardon’s Hotels with its headquarters in Bristol, UK, is seeking to expand its business overseas. With its first international location being a rural location in Southern Spain, the hotel chain is facing a dilemma in adjusting to changes related to human resource management. The new location requires a manager who can not only maintain the image of the business but also grow the overseas branch into a reputable brand. This requires application of suitable human resource strategies that ensures that the new manager upholds organizational culture, work commitment, job satisfaction, work ethics and employee engagement that matches that of the parent company. Companies opting to venture overseas have to respond to a number of issues such as target market, segments, skills and competencies of employees, reward schemes and other employee benefits. Reardon’s hotels senior management is looking forward to a consistent reward scheme and incentives that motivate the new Southern Spain staff and also to ensure equity in the business. This case study seeks to devise an appropriate strategy for recruitment, selection, training and development and reward for the new manager of Reardon’s hotels branch in Southern Spain. Human resource management issues Part I: Recruitment Scullion and Collings (2006: 59) define recruitment as the process over which an organization identifies the need to employ after receiving application forms from potential applicants. International assignments require a more broad understanding of host country cultures and work processes. When recruiting people to take up international operations, the process should consider the global competitiveness of the potential applicants and their status of international experience and knowledge. For example, the new Reardon’s hotels manager to be recruited in Spain should have a wider understanding of Spanish culture and heritage, language, traditions and beliefs. Others include the understanding of the Spanish politics, technology, economy, social interactions and its environment. International human resource reiterates the need to have a diverse team with skills and competencies to handle international customers (Thoo & Kaliannan, 2013). This means that a suitable recruitment policy to get the right people at the right time for the right tasks should be based on a suitable approach. Common approaches for recruiting employees for global operations are the Perlmutter’s four approaches to internationalization such as ethnocentric, polycentric, regiocentric and geocentric. From the case study, the CEO will be recruiting the new hotel manager from its staff base in the UK. This is because the new manager already has a grasp of the values and operational procedures of the hotel chain. In this regard, the most appropriate approach will be the ethnocentric strategy. According to Perlmutter (1969), the ethnocentric staffing policy requires that the Multinational Corporation (MNC) appoint manager of its foreign subsidiaries from the parent country nationals. There is little room for promotion of host country nationals to the headquarters since all the technology experts and senior management will be recruited from parent country nationals. However, the best-fit global manager will need to have a global mindset, sound job knowledge and in-depth understanding of the organizations procedures, policies, structure, and history (Thoo & Kaliannan, 2013). For the new hotel manager in Spain, the daunting task is to seek the agreement of the CEO into recommending or releasing some of the best employees to take up some roles in the new location. Although the new subsidiary will be less independent and autonomous, Reardon’s hotels by adopting this strategy will not only be able to retain significant influence and control, but also disseminate knowledge to the Spanish market. Part II: Selection Selection is a process by which information is gathered to help evaluate and decide which candidate is recruited for a particular job (Scullion & Collings, 2006). A process for evaluating candidates can be effective and thorough but lack of insufficient candidates will ruin the process. The five core areas that guide selection criteria are personality, motivation, skills, attitudes and behavior (Dowling, et al., 2008). UK nationals falls into the European Union (EU) employment and labor market agreements for hiring foreign workers within its boundaries. This gives the expatriates a permanent work residence permit as employees in Spain. UK is an achievement-oriented country of wich when making a hiring decision will consider talents, knowledge and skills. Reardon’s hotels will be advertising and hiring internally because the existing pool of employees have the required qualifications. Some other considerations will be family background, gender, age and culture. The hotel chain will select someone with personal characteristics the fit the role of a manager. Since Reardon’s hotels uses the ethnocentric approach to staff its headquarters and subsidiaries, a four-stage process will be involved. First, self-selection will involve a decision by the Reardon employee in the management position to consider future roles in the international arena. Second, is to create a candidate pool for manpower requirements for the hotel in the Spanish operation. Third, technical skills assessment for global assignments will be undertaken. This will involve searching for managerial skills, administrative, technical experience, global experience, language skills, family flexibility and image, cultural adaptability and diversity and tolerance skills (Dowling, et al., 2008). For example, the new manager will not only represent demonstrate leadership, engagement and communication skills but also possess stress resistance and people skills within and outside the business premises. Finally, the best candidate is identified to take over the foreign assignment and deployed with his or her consent. Besides goal-oriented behavior, the potential candidate should have high cultural-adaptability levels, stable family and previous overseas experience. Part III: Training Organizations sending employees to take up internatioanl assignments in their established subsidiaries overseas go beyong the basic functions of human resource management (Armstrong & Murlis, 2004). Once recruited and selected, a successful expatriate taking up the role of hotel manager at Reardon’s Hotels in the Spanish subsidiary must handle a new cultural environment and be able to do the job well. This means that the expatriate should work competently, ensure that his or her family adapts well and learn to live comfortably in a new culture. Human resource functions of training, staffing and development have great impact on the organization. The best employees to work in foreign country and a new cultural environment should have the organization come to terms with the fact that the whole family will accompany the employee (Bolino & Feldman, 2000). This means that the success of the individual taking on the international assignment will not be successful when their families or spouces find difficulties in adjusting to the new surroundings. Some months before departure, it would be necessary to organize training for the employee and their family on Spanish language. Resident visa and work permit will have to be provided for on time as it is a necessity for the journey. Southern Spain has a number of international schools that speak standard English. Therefore, it is also necessary to prepare the children for enrolment into schools, assure health services and provide residence in the new surroundings. Training and development programmes support will also be extended to the partner or spouse of the expatriate manager on the needed knowledge and skills so as to secure gainful employment in Spain. Although English is a global international language spoken by most people in Spain, it cannot be ignored by international human resource management when mapping out reliable and effective Spanish language training programme to the spouse or partner of the expatriate who is not conversant in Spanish. In the foreign country, it will be frustrating when one cannot transact simple tasks like banking or grocery purchase because of a communication problem. While agreeing with ethnocentric model, centralized training will consider some cultural factors specific to Spain that will strongly impact on training practices. For instance, power distance in the UK is very small to a point where the relationship between trainees and the trainer tends toward equality. The trainees and trainer can use their surnames, but have the freedom to question or challenge the trainer. Reardon hotels should first identify managers with global potential in hotel management then provide them opportunities for training and development. This training will make the new manager more globally minded, learn other cultures and languages, work on cross-national projects and teams and be able to undertake more international assignments. Treven (2001) argues that an international organization should focus not only in employing parent country nationals, but also third country nationals and host country nationals into the team. When prepared for their work and life abroad, expatriates become more successful upon training. Expatriate failure is mainly caused by lack of training. The cross-cultural training methods are as shown in the table below. From the table above, cross-cultural training (CCT)is the most significant aspect of the expatriate training. Dealing with a new job is less challenging than coping with a new environment. Therefore, such training prepares an expatriate to work and live under different cultures by using various training methodologies such as field experience, culture assimilator, cases, role playing, area briefings and cultural briefings. Part IV: Development Development function aims to provide sufficient trained personnel to the organization so as to be able to growth with their work, contribute to better performance and fulfil their goals (Armstrong, 1996). The development of employees includes career development and training, organization development, education and planned individual learning. Human resource development at the international level develops special group of globally minded managers, offers specialized training to prepare expatriates for international assignments and conducts training and development of employees located in foreign subsidiaries. International human resource development programs can be created and transferred through centralized or decentralized methods (Stephen & Black, 1991). Reardon’s hotels takes the centralized approach because the training originates at the Bristol headquarters in the UK of which the corporate trainers will then travel to Spanish subsidiary, and in the event adapts to the new local situation. The management uses performance appraisals to determine the training, promotional and reward needs of employees. Cleveland, et al (1989) observes that performance evaluation companies are carried out more frequently for development or administration purposes. When the decisions on work conditions of employees are for administration purposes then performance evaluation will address layoffs, rewards or promotions. Improvement of the work performance of employees will be the function of the development intention of performance evaluation. The new manager will need to advise employees on appropriate behavior in the work environment and enhance their abilities through adequate training programs. Many UK multinational companies conduct performance appraisals annually using standarized evaluation systems. Performance evaluation at the international level is challenging for Reardon hotels because employees have to be evaluated based on their backgrounds and cultures. To make the evaluation meaningful, there is need to consider the cultural background of employees and consistency throughout the subsidiaries to avoid conflicts during performance comparisons (Tayeb, 2005). For example, in Spain, the public image of an individual is important and any public criticism can make the employee to exit the organization. The overall human resource management strategy of the organization determines the performance evaluation approach to be used. Reardon hotels having adopted the ethnocentric approach will most likely use similar performance evaluation process for its subsidiaries as used at the headquarters. Part V: Reward strategy Acquisition of new employees is largely defined by how the current employees are being remunerated. Sparrow, et al. (2004) observes that reward describes the continuum of combined elements that make work worthwhile and gratifying. The fundamental resource of living for employees is the pay. On the other hand, benefits include holidays and health insurance cover. Treven (2001) argues that remuneration decisions taken by employers has an impact on product or service sales at a competitive prices and the expenses of the company. Competition for employees in the labor market among employers is enhanced by the ability to make decisions about remuneration. The reward system for the new manager and employees in the Spanish subsidiary will determine whether the standing personnel will want to quit or keep their jobs. The reward system should be seen by the workforce as fair and supportive to the multi-headed team structures with common aims (Thoo & Kaliannan, 2013). A total reward strategy will be adopted at Reardon hotels where employees are provided with non-monetary and monetary returns in exchange for their results, efforts, talents and time. The five key rewards elements are compensation, benefits, work-life balance, recognition and performance and development and career opportunities (Armstrong & Murlis, 2004). Compensation involves fixed and variable pay while benefits can include profit sharing plan, life insurance and dental plan. Performance and recognition includes peer recognition awards, goal setting sessions and performance reviews. Work-life balance involves employee assistance programmes, on-site fitness facilities, job sharing and telecommuting. On the other hand, development and career opportunities comprise overseas assignment,leadership training, tuition reimbursement and job rotation (Csizmar, 2008). Total Reward Framework based on the Hay Group model takes on a strategy that focuses on total reward such as non-financial rewards and every financial measure (Hay Group, 2015). The needs of both employee and company are taken into account as the balanced approach ensures that interests of the company are met while engaging and motivating employees.  The main component of the expatriate pay will be the base pay. Pay forms the basis for pension contributions and in-service benefits that can be paid in local-country or home currency. Many allowances, for expatriates, directly relates to base pay such as housing allowance, cost-of-living allowance and foreign service premium (Dowling & Welch, 1988). On the other hand, extrinsic rewards satisfy the basic needs of an employee such as recognition, security and survival. An organization has two primary concerns while developing an international system of benefits and compensation; comparability and cost. Comparability concerns a compensation system that assigns salaries to employees that is competitive and internally comparable inside the marketplace. For instance, the salary of the new manager of Reardon hotels in Spain will be higher compared to that of an accountant or supervisor with each position receiving an amount that falls within the local market range. Reardons hotels should pay its employees in Spain according to the standards of the country i.e. localisation of compensation. Tayeb (2005) note that a firm can allow its subsidiary management to decide on pay systems that are sensitive to local conditions. This was also consistent with Sparrow, et al. (2004) who observed that even highly internationalised firms can comply with prevailing local practice so as to be taken as ‘good citizens’ throught its extensive operations. Moreover, people who may transfer from other locations should have their salaries considered by the international organization. Cost is another major concern for international organizations as they strive to minimize payroll and all expenses. The amount that home-country expatriates should be paid is influenced by the ethnocentric strategy. Also, the general policy of the organization influences expatriate remuneration. Dowling, et al. (2008) learn that these common approaches are: a region-based policy, a host-based policy and a home-based policy. The region determines compensation in the region-based policy while remuneration of emloyees in a home-based policy adheres to the salary scale of their home countries. In the host-based policy, benefits are tied to the home country but salaries are set at the level of the host country. Employees who remunerated for working outside their home countries depends on the distance of their relocation from their home region (Watson & Gangeram, 2005). In the region-based policy, an assignment outside the region or one further away will receive more compensation compared to an assignment that is within the home region. Reardons hotels manager in Spain should be remunerated based on the regions-based policy. Local labor market conditions influences how benefits and renumeration are paid even when ethnocentric or geocentric approaches are taken by an organization (Armstrong, 1996). Other factors that influence the level of renumeration and benefits are local laws, the use of expatriates, prevailing wage rates, and the availability of qualified local people who can take up vacant positions. Renumeration for those positions generally increase where there are few applicants available for the positions. Bringing in an expatriate is considered by the international human resources manager as one way to reduce expenses (Scullion & Collings, 2006). It is particularly difficult to undertake performance evaluation of expatriate managers. This is because the manager will have more roles abroad than if se or he was at home. The new Reardon’s hotel manager will not only be a trainer and counselor but also a diplomat and troubleshooter in addition to other assigned job roles. The new expatriate’s performance will be influenced by the new language, different way of doing business and the need to adapt to a new culture. Reardon hotels represents a specific market level in which it can develops a policy that apply globally in terms of benefits and salaries. For example, the hotel can emphasize on the quality of its employees and services by paying the highest wages in Southern Spain. Recommendations a. Ethnocentric staffing policy should be used by appointing the Reardon’s hotel manager from the parent country nationals. The appointee already knows the culture, values, vision and procedures of the company. b. Reardon’s hotels should advertise and hire internally because the existing pool of employees have the required qualifications. c. The components of the Reardon’s hotel manager compensation should constitute base salary, foreign service inducement, allowances, education alloances for children, relocation allowances and moving, tax equalization payments and spousal assistance. d. Reardons hotels should pay its employees in Spain according to the standards of the country or localisation of compensation. e. The total reward framework should translate into bottom-line results by being tied to a strong implementation plan. f. Adjust the average salary to £30,000 paid to managers in Spain as opposed to £45,000 paid to a manager in the UK based on localization strategy of base pay. g. Reardon’s hotels new manager in southern Spain should be trained alongside the spouse on new language, culture, methods of doing business and performance Conclusion Reardon’s hotels are expanding to Southern Spain with the expectation of hiring a new manager to take up the operations. The organization will use the ethnocentric approach of recruiting home nationals. Selection will be done by advertising and hiring internally. Training and development will be necessary to ensure the new appointee and the family becomes aware of the new language, culture and environment. Localization approach will be used to reward the new employee with the average salary being £30,000. However, allowances and other benefits will correspond to that paid to workers in the UK hotel chain. References Armstrong, M 1996, Personnel Management Practice, Kogan Page. Armstrong, M & Murlis, H 2004, Reward Management: A Handbook Of Remuneration Strategy And Practice. 5th Ed. London: Kogan Page. Bolino, MC & Feldman, DC 2000, Increasing the Skill Utilization of Expatriates, Human Resource Management, vol. 39, no. 4, pp. 367-379. 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