International HRM - Assignment Example

?International Human Resource Management Table of Contents 0. Introduction 3 2.0. International HRM 4 3.0. Influencing Factors of IHRM 6 4.0. PEST Analysis in the US Context 6 4.1. Political Influences 7 4.2. Economical Influences 8 4.3. Social Influences 9 4.4. Technological Influences 9 5.0. Critical Analysis and Evaluation 10 6.0. Walmart: An Example 11 7.0. Conclusion 13 References 14 1.0. Introduction With increasing globalization, Human Resource Management (HRM) practices have been extended to the international dais, although it focuses on similar objectives as its key considerations. As a result, the concept has evolved to be wider and more complex to be defined within limited words. It has also expanded its dimensions by covering cultural, political, technological and economical divergences in order to determine appropriate set of objectives and strategies in order to attain them. Therefore, HRM practices differ from one nation and geographical region to another. With this belief, the discussion of the paper will emphasise on identifying various dimensions of International HRM in the context of the US. The objective of the paper is to evaluate the impact of political, economical, social and technological factors existing on the HRM practices in the US. Moreover, the paper will critically evaluate and analyse two key areas of HRM in modern day phenomenon, i.e. training & development and performance appraisal applied by a US based multinational company, i.e. Walmart. 2.0. International HRM In recent years, the world has witnessed steep rise in international activities which forced the managerial dimension to cross the regional boundaries and enter the international market. For instance, evidences reveal that since the early 20th century, international trade and production operations have increased substantially. This forced national companies to expand their business in the global platform recognising them as Multinational Companies (MNCs). Consequently, there are also few challenges which are faced by MNCs while implementing their HRM practices in the international platform. However, managing dichotomous cultures and economic factors with efficiency is termed to be the most challenging tasks of International HRM (IHRM) (Tayeb, 2005). Similar set of challenges were also faced by the US based MNCs in their global operations. Studies reveal that during early period, most of the US based international companies witnessed failure in their global operations, especially in managing their human resources with efficacy due to lack of effectiveness in the HRM policies. In other words, the companies were concerned in practicing similar kind of HRM policies in the international platform as it did in the national context, i.e. in the US. Consequently, the practices lacked affectivity and efficacy and thus faced the challenges in terms of expatriation (Ashamalla, 1998). In this context, numerous researches have been performed to identify the effect of global and local factors in determining the efficacy of IHRM practices by the US based international companies. Most of the researches stated that the IHRM practices and policies of the companies operating globally often tended to provided greater significance to the local factors without entirely ignoring the prospects of their parent companies. Evidences have also revealed that different factors existing in the external environment influences the IHRM practices. For instance, the IHRM practices and policies executed by the Japanese leaders globally tend to be highly focussed on the localised factors in terms of ‘corporate welfarism’, but in a tailored manner to adopt the changes present in the targeted market while training the expatriates. Likewise, the IHRM policies and practices implemented by the US subsidiaries tend to be based on developmental strategies to a large extent with a similar concern. Therefore, it becomes quite apparent that both the international and national factors influence the IHRM practices of MNCs due to which the HRM practices in their subsidiaries differ from that of their parent companies (Edwards & Kuruvilla, 2005). 3.0. Influencing Factors of IHRM With reference to the above discussion, it is quite apparent that HRM policies executed by a company in its international operations are highly affected by the external factors existing in its business environment. However, in the modern era, a company requires to maintain an alignment with its organisational objectives while designing its IHRM policies. With an in-depth perception it is also apparent that the internal factors of the organisation are its financial strategy, strengths and weaknesses, growth prospects and others. To be specific, while adopting a well-structured training & development method the company should be focused on its overall organisational goal and supervisory advancements as well. Therefore, not only the external, but also the internal factors play a decisive role in determining the efficacy of the HRM policies and practices executed by an international organisation (Du Plessisr, 2009). 4.0. PEST Analysis in the US Context Considering the proclamation provided by various researchers and analysts, it is quite evident that political, economical, social and technological factors strongly influence the IHRM practices of MNCs. For instance, political factors determine the deployment of labour force and their well-being in the national context; economical factors influence their needs and demands; social factors often influence the cultural perceptions and the psychological demands of the labour force; and technological factors reflect the need for development and advancement of the labour force in order to meet the international standard. Relying on this conception, a PEST analysis of the macro-environment of the US will be presented below, leaded by its critical evaluation in determining the IHRM policies of Walmart, a US based MNC. 4.1. Political Influences Recent studies based on this conception stated that the scenario is largely affected by the recent global recession which forced the government to reform the labour laws practices in the economy. For instance, the government will enforce few welfare cuts from the next financial year. The governmental laws in this concern prescribed that Employment and Support Allowance (ESA) payments will be limited after two years instead of one and the ‘burden-sharing savings’ including the acceptance of ‘welfare payments from RPI to CPI’ will be limited to three years instead of permanent continuation (Watt, 2011). Although labour unions that hold maximum power in the political environment concerning labour welfare have been reported to accept the reformation strategy, labour disputes and increasing migration to other nations can become a major challenge for the economy. However, the key objective in enforcing these reforms is to stimulate the economic sustainable growth rate after the recent economic downturn. Therefore, it is quite apparent that the political environment in the US influences the labour movements based on the developmental approach to a large extent. 4.2. Economical Influences The economic environment of the US has been recorded to be largely affected by the recent global recession which in turn is witnessed to affect the labour movements in the economy. To be mentioned, in the current period the US economy has been recorded to add 36,000 jobs in the non-farm sector with an objective to reduce unemployment rate. Despite this, unemployment rate figures to be around 9% in the economy depicting labour dissatisfaction. The payroll in the private sector was also recorded to increase by $50,000 in the early months of the current year, instead of $145,000 as was expected by the US government. This was again followed by the drop of 14,000 jobs in the public sector employment. As stated by economists, it is due to inefficient monetary policy practiced in the economy and the current status of Forex that depressed the employment rate in the economy (Trading Charts, 2011). 4.3. Social Influences Along with the economical factors, the social factors also possess a strong influence on the HRM practices in an economy. In the US, the social factors tend to emerge as the presence of different ethnic groups and continuously increase the migration rate. To be mentioned, the current social factors of the economy tend to be witnessing inequality in terms of ethnicity, distribution of wealth and opportunity (Acemoglu, 2011). According to Hofstede’s cultural dimensions, the reason for increasing inequalities in the US economy can be identified as high level of individualism and masculinity. The social aspects of the economy are further accumulated with lower level of power distance and uncertainty avoidance among the individuals (Geert Hofstede, 2009). 4.4. Technological Influences The technological factors in the US are recorded to be at its maturity stage with stiff competition and increasing demand. The industry is also recorded to employ a major proportion of the labour force in the economy. Not only as an employer, but also as a supporter of labour welfare programmes, the industry assists the labour forces of the economy. In its current performance, various medical innovations were rewarded by the industry along with improved information technology contrivances which can evidently prove to be highly beneficial for the labour movements in the economy (PwC, 2011). 5.0. Critical Analysis and Evaluation The two areas of HRM considered in this paper are training & development and performance appraisal. In the present era, both the key areas hold considerable significance in order to ensure the effectivity of the IHRM policies in the MNCs. An appropriate and effective training & development process configure the productivity of the labour force and an efficient performance appraisal initiative motivates the employees for further improvement (Sparrow, 2009). Therefore, it can be stated that both the areas are interlinked to stimulate efficiency in the IHRM policies and practices of multinational firms. In this regards, leaders of the MNCs often face challenges in training and developing expatriates in their international operations. Providing performance appraisals according to the employees’ expectations also emerge to be a challenge for the MNC leaders (Cieri & Et. Al., 2005). To relate it with the macro-environmental factors of the US, the trends depict to be favourable for improved training & development programmes with various amenities from political, social and technological factors. For instance, strong intervention of labour unions provides greater emphasis on the ethical behaviour of the employers and accelerated development of the workforce. Moreover, as the labour welfare strategies of the economy are largely based on the developmental approach, training & developmental processes are likely to be more efficient. The technological and the social factors also collaboratively increases the training & developmental processes of MNCs with rigid and stronger colonisation of labour laws. On the contrary, the economic downfall of the US, demonstrated through lower growth rate and increasing jobless rate along with inequality raises constraints to limit the efficacy of training & development measures adopted by the MNCs in terms of IHRM policies. The freshly set reforms also affect the performance appraisal schemes of MNCs with labour welfare cuts and hindered wage increment. It is quite apparent that the unemployment rate is at a high level despite incessant encouragement of the economic leaders. Foreign trade turmoil faced by the economy can also be stated as one of the major reasons for this consequence. However, medical inventions and support from the technological field can assist the labour movement of the economy to a large extent. 6.0. Walmart: An Example Walmart is a well-identified brand in the international context. It primarily deals with retail services, marketing a wide range of products to its customers all around the world. It is also recognised as one of the top employers in the world. Currently, the retail giant employs over 850,000 peoples in the US. 59% of the total labour forces employed in the company are females and almost 39% belongs to the minority population (Walmart, n.d.). In providing effective training & development assistance to the employees, the company practices its IHRM policies with due consideration to the ethnicity and diversity of the labour force. It emphasises on providing on-job training to the associates along with seminars focussed on the development of the associates (Walmart, n.d.). The company also offers wide ranging career opportunities to its employees besides diversity which is termed as a social need for the young associates according to the company leaders. The company partners with Employment Practices Advisory Panel (EPAP), which concentrates on acknowledging the employers about governmental and economic reforms (Walmart, n.d.). This can be identified as a result of the strong intervention of the political environment on the company’s operations in the international platform. Moreover, the company’s significant consideration to the aspect of discrimination among the employees also reflects the influence of social factors on the IHRM policies of the company. In its performance appraisal initiatives, the company concentrates on providing medical facilities to its employees in terms of regular health-care and insurance policies. Although the company does provide different saving benefits to its employees belonging to the US culture, it ignores providing post-employment advantages to them which is rather provided to the employees belonging to other ethnic groups depending upon their social requirements. However, the company follows a common rule of incentives and leaves based on the productivity of the employees as its performance appraisal measures (Walmart, 2009). This particular strategy of the company can also be related to the economical, social, technological and political factors. For instance, political regimes and social factors ensure strict regulations against discrimination and cultural perception of individualism and masculinity. An influence can be apparently witnessed in this regards with the environmental factors active in the US economy. 7.0. Conclusion With reference to the above discussion, it can be stated that external factors have a strong influence on the IHRM policies and practices of a company. The influences are strongly witnessed in the two key areas of HRM, i.e. training & development and performance appraisal. It not only defines the cultural prospects of an organisational behaviour but also ensures higher productivity from the employees by satisfying their cultural, technological and economical needs. However, it should be mentioned that besides external factors, internal factors existing in internal business environment of an organisation also play a crucial role in defining its IHRM policies and practices. Therefore, organisations implementing the concept of IHRM in their operations should also be concerned regarding the internal influencing factors, such as organisational goal and its financial strength, during its execution process. References Acemoglu, D., 2011. Economic Power Begets Political Power. The Economist Newspaper Limited. [Online] Available at: http://www.economist.com/economics/by-invitation/guest-contributions/economic_power_begets_political_power [Accessed April 09, 2011]. Ashamalla, M. 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