International Human Resource Management - Essay Example

?Globalization opened doors for rapid business expansion as well as increasing mobility of people. Migration influence business operations and positively viewed as an opportunity of multicultural and multi-ethic integration. This is true for all business, establishments and institutions who are managing diverse peoples from varied countries such as tourism industry and multinational corporations whose operations cross geographic borders. This trend requires strategic management considering numerous variables to be confronted within an unpredictable business climate. In such phenomenon of uncertainty, innovation is required (Beinhocker, 1997). As such, human resource management should be strategized with sensitivity to uncertain future, of variegated change processes, and of competition inherent to this type of business (Manning, 1998). Competent and highly skilled workers are necessary. Above all, the corporation must be sensitive to the culture of peoples where it is operating as well as the culture of people they are serving. This is an essay that will explicate international human resource management (IHRM) from the theoretical vantage of culture to determine strategic performance management and its competitive advantage amid contextual changes. The researcher will also explicate culture within the context of diversity in relation to IHRM amid challenges in international business operations, citing Marrriot International Inc., as an example. But before going further, it’s necessary to first define some relevant terminologies that is thematically used in this study. International refers to a scope of affairs that is involving two or more countries. Human resource management, on the other hand, refers to a system relating to hiring or employing, training, designating, performance managing and appraising employees’ performance (Jackson, Lafasto, Schultz, and Kelly, 1992). Culture also refers to beliefs, values and customs that are integral and are influential in their decision-makings, style of leadership and on how relations are managed (Pettigrew, 1979). Internal and external conditions are maybe influential to person’s emotional and psychological make up but its culture that molded persons’ perceptions, behaviors, organizational management, working relations and evening systems of operations (Pettigrew, 1979). Like external and internal environments, culture is undergoing continual change. HR policies and procedures therefore must be adjusted to cope with this change. Human Resource Management and Diversity Armstrong (2006) explained that human resource relate to management’s system where workers perform tasks to contribute to the achievement of corporation’s goals by employing persons, enhancing their skills, maximizing their capacities in exchange for just compensation for services rendered. Managers value performance and evaluate worker’s performance based on corporate standards as part of career development and employ coaching or feedback mechanism for the improvement of performance (Schneier and Beatty, 1979). HRM is essential in corporation's growth and in retaining competitive advantage thus, the need to capitalize superior human resource management. Consequentially, the increasing demand require High Performance Work Practices by ensuring that workers are hired through criteria of procedures; with compensation and incentives based on performance standards. It also encourage or mandate labor forces participation in production and decision-making as well as provide them skills to enhance their knowledge, abilities to improve their motivation (Delaney and Huselid, 1996). Thus, companies must have standard to manage worker’s performance to contribute quality results for the organization (Lingle and Schiemann, 1996: 56-61; de Waal and Coevert, 2007: 317-416) that measures efficiency and effectiveness of workers. It also involved managing organization, administering of personnel, management to manpower. The system fundamentally consider that HR works to meet needs and goals but also require management support to complete task such as support mechanism and capability-building to make workers more productive and responsive to goals. This means that commitment to quality performance is essential for strategic management. They also need to employ cooperative sharing of information and continuous monitoring. Broadnax et al (2001) pointed that performance management uphold accountability and justify resource allocation; provide opportunities that bridge managers and workers communication with stakeholders; help develop partnerships among organizations; and allow constructive feedback mechanism for improvement and positive change. Managers should be objective and appreciative of workers differences and expectations. They must be imbued with capacity for conflict management, conflict resolution or conflict transformation to sustain that desired teamwork in workplaces. Unresolved conflict may escalate and fracture company’s relation with employers, thus may impact with the corporation. Human Resource Management (HRM) involves series of activities aimed at meeting staff needs and dealing with issues relating to performance in accordance to standard regulations. In the case of international or multinational corporations, the general concept of HRM applies however there is elaborate appreciation of diversity of workforces in service areas which require heterogeneous labor forces--- of varied gender, race, and ethnicity. This means that corporations have adopted systems that accommodate diverse cultural groups of workers by being sensitive to different life styles, needs, work styles, and appreciating differences. Source: Phelps (1997). This is relevant because this challenge management to cease looking at issues at homogenous perspectives. If managed well, diversity improves creativity and organizational innovation in decision making relating to variegated problems. If not manage well, its likely that statistics of workforce turn-over will happen as everyone will be hindered to communicate and potential conflicts will transpire. The figure shown above helps how actions are done to foster diversity. International HR Performance Management & Marriot Experience IHRM deals with workers that are either national, expatriate, third country nationals (Dowling Festing, & Engle, 2008). It will also deal with the orientation of the various countries where workers came from; and matters relating to HR’s procurement, allocation, utilization (Dowling Festing, & Engle, 2008). Managers in this nature of work relate to macro environmental factors such as cultural, socio-economic, institutional, and political dissimilarities across countries (Negandhi, 1987; Kidger, 1991; Gronhaug and Nordhaug, 1992). Phelps (1993) and Phatak (1989) pointed that in a multicultural context, IHRM have four critical components to deal about. These are (a) company’s various environments or context (both inside and outside of the firm); (b) IHRM activities of finding, allocating, developing, supporting and valuing processes (Gregersen and Black, 1992; Delaney & Huselid, 1996); (c) the nature of borderless working environment and (d) potential outcome that is uncertain and vulnerable to changes. Milliman et al. (1991) further pointed on the need for managers to immediately project impact of external and internal influences on IHR management and possible adaptable measures (Dowling et al.,1994). With workers that came from varied nations, management is no longer hindered by geographic borders. For example, Marriot hotel with multinational employees, can relate to varied costumers from all over the world and generated much income from foreigners due to their skilled customer management system founded in diversity of HR. Marriot (2011) pointed that using the concept of diversity, it operated in 70 countries with 137,000 employees which speak varied languages, distinct cultural make up, with commitment to service and have considered its multicultural human resources as its assets for growth. It prided itself as a hospitality company that has complied international standard in embracing global diversity and inclusion in the market place. It maintained excellence in service and have increasingly popularize its corporate nature, goals, and service through online services and all social media. Marriot’s respect for cultural diversity are embedded on how they manage customers coming from varied countries all over the world with different backgrounds, language, tradition, religion and culture (Marriot, 2011). Its core values, founded by the Marriot family, lasted for more than 80 years now and have served as its guide and direction for development, expansion and growth. Marriot (2011) is of the purview that culture is the ‘life thread’ that links them to people within a continuum of time. As a leading hospitality industry, it commits for fair treatment and provides opportunities for human resources, customers, as well as investors. It claimed to have used its creativity to meet customers’ needs. It prided itself as a company that perpetuates its culture that has provided positive financial impact to the industry. Marriot (2011) is sensitive to details and its surroundings to ensure world class hotel service to variety of people and organizations. Above all, the company uses diversity as an instrument to succeed in this industry. Marriot experience is true in other companies too who have been appreciative of multiculturalism and diversity in building business relations. For instance, a mobile phone company can work with cheap labor forces in China. Information technology industry, like call centers, can outsource employees from third world countries with less standards for salaries. Salunkhe & Rao, (2009) cited a photocopying machine is designed in Toronto but its microprocessing chips are made in Taiwan while its physical case are manufactured in Japan and are assembled in South Korea, but the products are sold in Melbourne, London, Los Angeles, and India. These mean that we have transformed this world into a global village where companies can work with people from various countries with varied cultures. Whilst appreciating differences, the company can also utilize differences by valuing multiculturalism and intra-national diversity. These also note that despite cross-national differences, people have commonalities. Managers must therefore be onboard international level of analysis which assumes that people from different countries choose right spaces for ‘work force diversity’ and are sensitive to international relations. Salunkhe & Rao, (2009) cited examples to illustrate that a company indeed practice sensitiveness to other culture e.g. Greece folks ask question to show interest; Denmark people use professional titles when dealing with others; Japanese formally open business with a call card and these are not practiced by Italians but British people stick on schedules and adhere to timeliness. With globalizing trends, managers need to be abreast with different legal and political systems; know different economic climates and tax policies; deal with varying national cultures the primary values and practices that characterize particular countries. This is because culture is a powerful force in explaining person’s behavior, practices and belief system and that understanding all these are essential for managing culturally diverse organizations to synergize relationship with all stakeholders. It is in this context that Salunkhe & Rao, (2009) pointed that (a) there are distinct features to appreciate in managing people at work across national cultures; (b) such distinction explains attitudes, values, belief and behavior pattern; and (c) country-specific traditions and customs governs and influence the attitude and behaviors of the people in those countries. It is easy to spot companies that highly regard multiculturalism. These companies show the following features (Jackson et al., 1992; Salunkhe & Rao, 2009): (a) adopts the interests of distinct cultural and social groups in its mission, operations, and product or service; (b) have commitment to eradicate social inequities and racial discrimination within the corporation; (c) it has members with diverse cultural and social groups and are actively participating in organizational decisions; and (d) follows broader external social responsibilities to remove social inequities. IHRM Staffing By observing multinational corporations (MNCs), Festing & Engle (2008) pointed that there are three different international orientations that influence its policies. These orientations are ethnocentric, polycentric and geocentric. Researchers said that ethnocentric staffing policy would appoint mostly parent country nationals to top designations with its subsidiary companies (Festing & Engle, 2008). Polycentric staffing policy prefer to hire host country nationals (HCNs) while those companies practicing geocentric staffing policy simply meant that the company is interested with those best persons regardless of nationality and that could include third country nationals (TCNs). Heenan and Perlmutter (1979) however pointed another approach which is called regiocentrism, a system where managers are transferred on a regional basis, such as Europe. This is a compromise of pure and the polycentric/ethnocentric approach and a truly geocentric approach. This system of staffing applies to key positions in MNC subsidiaries only. Figure 1. Sample model of classifying staff. (Reiche and Harzing, 2009). There is however a dichotomized advantage and disadvantage of this kind of staffing (Negandhi, 1987; Phatak, 1989; Dowling, Festing & Engle, 2008). This is shown in table below: Source: Reiche and Harzing (2009). Reiche and Harzing also pointed that based on some studies MNC used this figure below to explicate the factors affecting decision of MNCs relating to staffing to ensure quality standard of performance and service from its employees. Figure 2. Source: Reiche and Harzing (2009). The Expatriate While IHRM created and organized the expatriate as labor forces, there are however some researches relating to their alleged premature return, low performance, adjustment problems and fast return rate due to some causes. Business managers call this as ‘expatriate failure’ due to underlying causes that held them incapable to adapt with the ideal international life cycle. This is otherwise known as dysfunctional failure (Nauman, 1992) but such could refer only to employees who’d quit or get fired but whose termination would be beneficial to the organization. Some expatriates quit from their assignment, get another job or are terminated due to their failure to meet desired expectations. Others were reassigned to other designations that are deemed fit to his or her skills. It is viewed that return of expatriate is an undesirable outcome in business management. Figure 3. Ideal international assignment cycle (Christensen and Harzing, 2004). Expatriate, as workers, also has expectation from the corporation he or she worked and vice versa such as those that are embodied in the contract of employment. There are also unwritten expectations that are not mutually agreed and may rise up in the process of managing HR, such as those expectations that are embedded in performance appraisal and working relations. Employers expect quality performance while employees expect support too to enhance performance management. Armstrong (2004:318) explained that performance management include clearly presented corporate strategy, sets of performance goals, regular constructive feedback mechanism, opportunities for improvement, and increasing motivation through performance and rewards. These are all essential in MNCs business strategies whose operations are expanded in other countries. MNCs need expatriates. They should be manage not in a one-size-fit-all-functions. The policies of contracting them must be tailored in accordance to the nature of international transfer. Expatriates, characterized with mastery of domestic dialect and knowledge, can help train local managers for a company subsidiary. In such case, the goals and expectations of the MNC should be communicated well to the expatriate to ascertain good performance in carrying out the designated functions. These goals should be specific, measurable, achievable, realistic and timely. Ergo, it must be practicable. The MNC should also be flexible to realize what the expatriate have successfully done and where he or she is confronting difficulties so that he can be assisted to improve performance, hence preventing expatriate failure. MNCs should also trained expatriates (Fenwick, 2004). The relation of performance and reward system should be communicated well too. Fenwick (2004) pointed that expatriates should enjoy transparency of corporate plans and direction to generate their genuine commitment to perform tasks, assume it with clarity with an end view of fulfilling it with the feeling of job satisfaction. There may be challenges ahead that may hinder immediate completion of tasks in an international assignment. This is the time when MNC must coordinate and assist expatriates to ensure that outcomes are achieved within specific context. Conclusion Culture defines how individual relate with families, friends, groups and even in workplaces. The values instilled from home and those we customarily practice reflect on individual system. Culture varies in every nation. The distinction of nationality of every person made a person different from another in language, feeling, thoughts, and the manner on how they relate with the society as well as in workplaces. But these differences aren’t a hindrance in developing a working environment that respect diversity and promote multiculturalism as its operational framework (Phelps, 1997). This is reflected on how Marriot International Inc. managed its services a leading hospitality industry of the world. Such expertise in maximizing expatriates in strategically advancing its business can be a model for other industries around the world in this era of borderless nations. Indeed multicultural and multinational organization can ensure quality services and performance of work by aligning strategies with corporation’s internal and external cultural environment, vision, goals and plans (Phelps, 1997). IHRM, if positively practiced by qualified managers and employees, can sail through difficulties and challenges to effect or translate organizational performance while managing expatriates. IHRM as system founded on philosophy, policies, procedures, programmes, and practices essentially governs and influence the organizational performance. With borderless economy and development of nations’ interrelatedness, multiculturalism is helpful in IHRM strategies. Diversity, as core value of multiculturalism, is an instrument for viable interrelationship. 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