International Human Resource Management - Term Paper Example

? INTERNATIONAL HUMAN RESOURCE MANAGEMENT Introduction 3 Historical Background of HRM in Spain 4 al Framework of HRMin Spain 5 Structure of HRM and Technology 6 National Culture and HRM 8 Employment and Labor Relations in Spain 10 Case Study of HRM in Group Dragados, Spain 11 Conclusion 13 References 15 Introduction In the twenty first human capital has gained extreme importance and is one of the major sources of competitive advantage for the organizations. HR is responsible for providing and managing that precious human capital. The growing role and importance of Human resource in the long term sustainable growth of the organization has led to the development of many theories related to human resource management. HR has come a long way from its traditional role of personnel management to being considered the strategic partner of the organization. Today HR plays a proactive role in taking the initiatives and concentrating on the deliverables. HR is involved not only in the implementation of strategy but also in strategy formulation. HR is now considered one of the sources of competitive advantage for the company. Although the role and importance of HR is not debatable any more but in practice its role varies not only from company to company but also from country to country. This paper will discuss international human resource management and its various approaches with special reference to Spain. The aim of this paper is to study the institutional context that shapes and influences HRM in Spain. Different laws related to HRM, education and training system, employer organizations, trade union organization, collective bargaining structures, company governance arrangements and its impacts on HRM will be discussed here. A case study of a Spanish organization will also be discussed to study various practices and activities of HR. Historical Background of HRM in Spain Although human capital has always been important but recently the importance of human capital with comparison to capital, raw material, land and even technology has increased a lot. It is believed now that in this global world the key to success is having a better human capital than your competitors. It is difficult to obtain and control positive contributions from the employees hence efforts are made to make an environment that ensures voluntary flow of such employee behavior. The concept of Human resource management (HRM) has followed the same path which international HRM has followed moving from personnel management to strategic HRM. The development of HRM in Spain can be better understood if the developments are studied in the chronological order. The history of Spanish HRM can be divided into five periods. HRM during the Franco regime, (1950-9) marked by clerk autarchy The economic crises and political transition, Human Relations (1960-76) Development planning From the economic crises to economic recovery, labor relations (1977-85) conflicts and agreements HRM in today’s Spain In the period of clerk autarchy the main focus was on bureaucracy. HR was restricted to the daily management of data and ensuring working according to the pre-established rules and regulations. It was the era of personnel management. The purpose of the personnel management was to make employee’s comply with the rules and regulations of the business. Spain has seen different labor conditions during its development. The first form was the personnel management where foreman was assigned the role of personnel manager but in a very restricted form. The second phase was of the economic crises and political transition. It is marked by human resource development planning. In this phase the shift was towards technocracy. The qualified employees were given importance through various incentives for enhancing performance, training and development programs, appropriate selection process accompanied by adequate salary scales classified according to the service. Here the personnel management role of HR was to ensure that employees adapt according to the technical requirements of the organization. In the third phase from the economic crises to economic recovery (1977-85), marked by labor relations, conflicts and agreements related to social and legal issues were the major focus in this era. This era is characterized by the collective focus on employees and hence formulation of legal laws for improving labor relations. The fourth phase is the current scenario of HRM in Spain. According to the current situation HR is supposed to play four different roles which include being a strategic partner, an agent of change, employee champion and administrative expert. But these four internationally recognized roles of HR are rarely followed in Spain (Ignacio Florez Saborido et al 1992) Institutional Framework of HRM in Spain A research was conducted to study the role of HRM in Spain revealed following results. HRM in Spain has been most successful in administrative role and as HR advisor. To play as administrative expert takes up most of the time of HR professional these days and they are aiming to reduce that time. The role of HR as strategic partner is rarely achieved in some of the organizations in Spain. HR being a strategic partner is although the first objective in the process of transformation of HR functions. This study revealed that majority of HR professionals focus very little on the strategic activities and the professional who do have very little success in it. Majority of the HR professionals believe they are successful only as a role of HR advisor. A critical analysis of the strengths and weaknesses of HRM in Spain along with the study of the capabilities and qualifications of HR professionals helped in identifying the key strong areas of HR professionals. It includes knowledge expertise in HR, interpersonal communication skills and capacity of team work, HR management and maintenance of data related to HR and company knowledge. Most of these capabilities are related to administrative role of HR and the advisor role. HRM of Spain has still a long way to go and evolve a lot to play the new internationally identified role of HR as strategic partner and agent of change. The ability of the HR professionals and the support of the top management and technology were identified as the key factors in improving the role of HR (Christian Scholz, 2008). Structure of HRM and Technology Structure of HRM will give insight into how HR function is organized and the methodology for utilizing human resource. It also includes information regarding outsourcing of resources and usage of technology. The structure of Spanish organizations is centralized administration. There are specialized HR teams along with the technical internal consulting teams for problem resolution. The centralized structure means that most of the organizations have a HR representative in each business unit to ensure the routine function of HR whereas the HR leadership team develop the strategy of HR and also ensure integration of work among all HR functions. In the organizations where HR has a strong role to play and they deliver quantifiable results HR is also being involved in business strategy. Studies have shown that some organizations also have HR controllers in their HR function. It is the responsibility of HR control to integrate and apply business principles and cost minimization policies to HR policies, activities and practices. The responsibilities of HR controller includes budget management and an according staff planning, analysis of business decisions, maintenance and supervision of contract of vendors and suppliers and the evaluation of the HR activities and practices of the organizations (Brewster et al 2004). It is also identified in the study that for effective and HR activities a HR representative for hundred employees is required. It is also believed that use of technology also plays an important role in improving the efficiency of HR. Many organizations in Spain make use of information technology such as intranet and internet to provide HR services. The other sophisticated technologies such as employee self- service is although quite uncommon in Spain but the use of technology in organization and in the HR function is still above average than most of the European countries. There is strong inclination in Spain for the use of latest technology but it has not been feasible and successful in most organizations because of more personalization of application and the reduction in personnel. Hence some of the more advanced technology failed to give a positive return on investment. Outsourcing of some HR services is another phenomenon quite uncommon in Spain. Some of the companies are outsourcing services such as training and development, recruitment and selection and managing payrolls but the general trend in organizations are not in favor of outsourcing. However it is anticipated that in the future Spanish firm will outsource services such as relocation and expatriate services because of growing globalization, recruitment and selection and administration of benefits. These are some of the dynamics of the functions of HR in Spain. However we cannot generalize the HR functions of any country or business because it is built on the basic business knowledge and changes with the specific dimensions of the market. For this specific reason the movement of HR from personnel management to strategic human resource management is not universal. National Culture and HRM The management and human resource activities do not and cannot work in isolation. Many factors inside and outside the organization, play an important role in determining the efficiency and effectiveness of the HR activities and practices. Culture is a dynamic phenomenon constantly in the process of evolution with our interactions and it is shaped by leadership, structures, rules and regulations and principles that guide our behavior. When culture is brought into the organizations one can observe not only its creation, evolution and embodiment in daily routine and practices within the organization but also as a guiding force that stabilizes, constraints and provide organizational structure and meaning to the employees. Although culture is an abstract term but the forces that create this culture in the society and organization are very important. Hence culture should not only be understood but given the deserved importance as well (Schein, 2004). Organizational culture is “The collective programming of the mind which distinguishes the members of one organization from another” (Hofstede 2003). Organizational culture plays a very important role in the growth, performance and success of the organizations. Its importance today has increased manifold as compared to the past. Traditional sources of success or competitive advantage such as product, technology, economies of scale etc are becoming less important in today’s world. Organizational culture and human resource management capabilities are becoming more vital for sustained growth these days (Alvesson, 2002). Culture in any society is guided by collective programming of the society developed over time. The guidelines defined by culture are based on certain assumptions which reflect in the attitudes, behavior and values of the individuals and groups and organizations at large (Goffee et al. 2006). There are various contextual factors that determine the national HRM policies and practices. It includes national culture, contingent variables, institutions, dynamic business environment, industrial sector and organizational policies and practices (Tayeb, 2005). National culture includes socialization process, common values, norms and behaviors and customs, pressure groups and assumptions of managers upon which they base their decisions. The case of Spain with respect to culture is complicated because of it diversity. There is great difference in the culture, values and norms in different regions of the country. To complicate things even further each region south, north, east and west also has considerable amount of autonomy regarding legislation. Labor market also varies widely from region to region and moreover with very restricted mobility across regions. The general culture is of bureaucracy. Second contextual factor Institutions include national labor laws, trade unions, educational level and training setup and presence of international institutions such as employer’s federation and consulting organizations. As for labor laws it has already been discussed that in Spain there is great degree of diversity in legislation mainly due to autonomy of regions. As far as training is concerned most of the emphasis of the HR professionals in Spain is on technical and instrumental training such as labor relations, training, selection and personnel management and generally the strategic role of HR is missing in the training programs. HR strategic teaching is restricted to some modules in prestigious business schools (Marchington, 2005). Third contextual factor is business environment which include factor like Competition, business alliances, restructuring, technology change and globalization of business. With globalization of business the concept of HRM is also changing in Spain and moving from personnel management to hr development. Organizations such as FUNDIPE and ADIPE are working towards the promotion of global compact in principles relating to human and labor rights. Fourth contextual factor is industrial sector which includes factors like common strategies, goals, logic and standards of business etc. The trend in Spain is towards minimizing of personnel which is more apparent in public sector than in private sector. Fifth contextual factor is contingent variables such as age, size, nature, level of technology, business sector and presence of trade unions and HR strategies etc. Spain has a total population of 40,397,842 out of which the total workforce is 21.77 million. Employment and Labor Relations in Spain Public administration in Spain has changed a lot in the last two decades. Due to decentralization of power many functions including budgetary and human resources have been given to the regional authorities and central authority’s powers are restricted to planning activities only. This restructuring process also includes flexibility of personals. Flexible personals also serve the purpose of lowering cost and hence economic benefits. This trend of flexibility in the public sector is mostly driven by economic factors rather than political reasons. There is growing pressure on the government to cut down the size of organizations and hence employees in an attempt to curtail public debts. Public sector have even freeze salaries but there is still very little attempt towards privatization of public sectors. The cost of recruiting staff has been reduced by recruiting public employment officer through a decentralized system. In Spain mainly there are three types of contracts civil servants, labor contracts and temporary contracts. All types of contracts have reduced over the years to cut down size. Other attempts of reducing costs and employees include early retirements and cut down on extensions (David Farnham, 2000). Trade unions in Spain are not very strong. They are mainly disjointed efforts with competition among themselves. The cooperation among them is quite uncommon and inconsistent. The part union in Spain is much more in weak and fragment as compared to many other European countries. Spain witnessed a brief period of euphoria when trade unions were legalized in 1977, besides that generally the participation in trade unions is very low(Diamandourous, 2001). Case Study of HRM in Group Dragados, Spain Group Dragados was founded in 1941 in Spain with strong orientation for international construction and services. It has four major decisions construction, services, industrial and concessions. The corporate culture and the corporate identity of the organization are pro initiative and innovation. The company motivates and encourages constant professional development. The competitive advantage and point of differentiation for the company along with its business diversification is the human resource within the organization. As it has already been discussed that HR is not very much emphasized in most of the Spanish organizations and the role of HR is restricted to the administrative role or personnel management. This organization by investing in the human capital has made its competitive advantage over its competitors that is in alignment with the international trend of HR as strategic partner, agent of change and a source of competitive advantage. HRM policy of the group is directed towards strategic recruitment which means recruiting and selecting the right personnel and then develops them according to the requirements of the company objective. Development of employees is ensured through various training programs in which the main emphasis is on work safety and accident prevention. Remuneration and benefit package is also in alignment with business strategy. Dragados has designed a unique tutor plan which ensures smooth learning and integration of new employee in the organization. It helps employees understand their responsibilities through a constant flow of knowledge and information from senior and experienced employees. The Group has designed another training program called “Master Dragados” which ensures knowledge flow to high potential professionals from senior managers. It focuses on different management areas within the group. To abide by the law on Work Risk Prevention, the group has formed a separate department for prevention. It has developed a risk management system with well defined procedures to minimize risk. All these procedures are distributed to employees in the form of manual to ensure maximum compliance. The group has also developed an international human resource information management to integrate all international activities of HR. the basic responsibility of it is identify and recruit the best possible human resource anywhere in the world where the Dragados is operating. Hence with all these strategies the Group has earned the competitive advantage through its human resource management for sustainable growth (Howes, 2003) Conclusion HRM internationally has come a long way from the role of Personnel management to strategic human resource management that requires not be a strategic partner to the business but also a source of competitive advantage and agent of change. Unfortunately this transformation in HRM is not uniform throughout the world. Some countries have taken the initiative of adopting and accepting the important and dynamic role of HR whereas some others are lagging behind. Spain is one of those countries where still the emphasis in most of the organizations is on personnel management. The role of HR barring a few organizations is restricted to administrative role and an advisor. Very few companies in Spain realize the role of HR as strategic partner and agent of change. But some companies are quick to realize this change and have earned a competitive advantage for themselves through their HRM as was observed in the case study of The Group Dragados. After studying the structure, technology involvement, culture, legislation and labor laws, trade unions of Spain it is revealed that the role of HR is still quite weak in Spain and there is a lot of room for improvement to make it at par with if not the whole world but at least with the rest of the European countries. References Alvesson, M. (2002) Understanding organizational culture, London: Sage Publications Brewster, C., Mayrhofer, W., Morley, M., (2004) Human resource management in Europe: evidence of convergence, Oxford: Elsevier Butterworth Heinemann Diamandourous, Nikiforos P. (2001) Parties, politics, and democracy in new southern Europe, USA: The John Hopkins University Press Farnham, D. (2000) Human resource flexibilities in the public services, UN editions Goffee, R., Jones, G. (2006) Why should anyone be led by you?: what does it take to be a leader, Boston: Harvard Business Press Howes, R. (2003) Strategic management applied to international construction, London: Thomas Telford Limited Hofstede, Geert H. (2003) Culture’s consequences: comparing, values, behaviors, institutions and organizations across culture, London: Sage Publications Ignacio Florez Saborido, Manuel Gonzalez Rendon, Manuel Alcaide Castro, (1992) Human Resource Management in Spain, Employee Relations, Vol. 14 Issue: 5, pp.39 - 61. Marchington, M., Wilkinson, A. (2005) Human resource management at work: people management and development, London: CIPD Schein, Edgar H. (2004) Organizational culture and leadership, San Francisco: Jossey-Bass Scholz, C. (2008) Human Resource management in Europe, New York: Routledge Tayeb, Munir H. (2005) International Human Resource Management: A multinational company perspective, New York: Oxford University Press Read More