International Human Resource Management - Essay Example

?A Report Based On an International HRM Case Study Executive Summary An electronic company has planned to establish a manufacturing plant in the United States of America (US) or in a Scandinavian country whichever location will be appropriate for the company. The Human Resource Manager (HRM) of the company is entrusted with the task of analysing as well as selecting the suitable location. HRM has been entrusted with a task of analysis cultural values of the US and Scandinavia. The outcome of the analysis will assist the HRM of the company in determining best cultural values practiced in both of these societies. Moreover, an analysis of recruitment as well as training policies of both of these societies has been performed. Furthermore, payment and reward procedure as well as structure are indentified in both of these societies. All these analyses will assist the HRM of the company in determining the best location among a particular Scandinavian country and the US in relation to cultural values as well as recruitment and training process along with payment and rewards. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Cultural Values 5 Recruitment and Training 9 Payment and Reward 13 Recommendations and Conclusion 14 References 16 Introduction An electronics company is planning to establish a manufacturing plant. The company develops electronics to be utilised by the mobile phone industry worldwide. Moreover, the company is required to decide the suitable location for setting up its manufacturing plant. The company has planned to develop its manufacturing unit either in the United States of America (USA) or in a Scandinavian country which comprises Norway, Denmark, Sweden as well as Finland. As a Human Resource Manager (HRM) of the company, decisions are required to be proposed for better implementation of HR polices as well as practices. Furthermore, with better HR policies as well as practices, local employees of these two regions will be managed as well as be recruited for effective performance of the company. Globalisation and advancement of technology have increased competition in the global market. Moreover, with intense competition, HRMs of companies have acquired an important place to perform business operations both at national as well as in international markets in an effective manner (Edward & Rees, 2007). Furthermore, HRMs of companies are required to be managed efficiently as well as channelize in the right procedures to operate business operations with effectiveness (Kondalkar, 2007). Human Resource Management (HRM) provides policies as well as procedures for managing as well as directing employees in order to accomplish goals of a company effectively. HRM of the companies are involved with recruiting as well as selecting appropriate individuals for performing business operations of in an efficient manner (Harzing & Pinnington, 2010). Moreover, with effective HRM policies as well as procedures, employees of companies are facilitated with better training facilities as well as are motivated towards improving their performance (Johnson, 2009). The report will emphasize on the cultural values of the societies discussed i.e. Scandinavia and the USA in terms of especially employment practices. Moreover, recruitment practices to be followed by the company as well as the extent of training facilities required to be provided to the employees of these countries will also be recognised through the report. Furthermore, the most common payment as well as reward systems prevalent in the USA and in Scandinavian countries will also be observed. The report based on the overall assessment will emphasize on determining the most suitable location for establishing the manufacturing plant for the electronics company. Cultural Values The US is multicultural society where people of the society believe in equality. The US comprises varied races as well as cultures. Moreover, the culture of the country believes in ethnicity as well as the country is considered to be the third largest country with regard to population as well as size. The country is moving successfully towards attainment of unique diversity in culture (Communicaid Ltd., 2012). The economy of the country has developed in terms of technology. The major values of the American culture constitute the following: Individualism Individualism depends on the concept that the people of the US are provided with the opportunities of self-reliance as well as independence. Moreover, the US culture facilitates the people to concentrate upon personal development. People of the US follow these values as well as culture in the workplace of companies. People involved with a company are required to be competent as well as professional in their approaches as this is the most highly valued business culture in the US (Communicaid Ltd., 2012). Low Context Culture People of the US are mainly concerned with performing tasks as well as activities in workplace. Moreover, people of the US follow effective communication method for better exchange of information as well as opinions. The main objectives of the employees of a company are to perform efficiently in order to realize the company’s goals effectively. The employees of the companies are little concerned with the development of personal relationship inside the workplace (Communicaid Ltd., 2012). Egalitarianism The culture of the US is based on the concept of equality. Moreover, people of the US are provided with equal opportunities as well as rights along with equality in relation to social obligation. Corporate culture in the workplace of companies established in the US is dependent on the fact that success as well as financial prosperity of employees depend on hard work. Furthermore, a clear distinction is developed in the workplace with relation to the hierarchical structure of companies (Communicaid Ltd., 2012). These are the varied cultural values which exist in the workplaces of the US companies. Moreover, companies are required to establish all these values in the working atmosphere as well as in corporate culture. In the Scandinavia countries, the management of companies follow a democratic style in their operations. The managers of the companies in these countries are mainly concerned with the performance of the companies as well as with the accomplishment of company’s goals or objectives. Moreover, democratic managers in Scandinavia are mainly concerned with developing better relationship with employees. The employees of the companies in these countries are motivated to improve productivity as well as loyalty for the operations of the companies. Furthermore, employees are required to improve efficiency as well as demonstrate enhanced risk taking capabilities along with enthusiasm for attaining objectives of companies. The major values which are practiced in the managements of companies in these countries are care as well as trust. The employees are facilitated with better working environment as well as are delegated responsibilities for performing business operations effectively. The people of Scandinavia are independent in their thoughts as well as they improve their skills through personal interests. Moreover, the people are highly qualified as well as motivated which increase their creativity along with innovation. The employees of Scandinavian countries are competent as well as are regarded to be among the most motivated workers worldwide (Eriksen, Kruse & Larsen, 2006). With respect to cultural prospects in Scandinavia, the workplaces of companies are regarded to be more creative. Moreover, in the workplaces there are better flow of communication as well as ideas which facilitates in creating healthy relationship between top and lower level management. Furthermore, the management practices in Scandinavia are considered to be the best management practice worldwide due to business ethics as well as social responsibility along with environmental factors. The management of corporate world in Scandinavia also leads in certain factors which are related to trustworthiness of management as well as values provided to shareholders along with better satisfaction of customers (Eriksen, Kruse & Larsen, 2006). These values as well as culture are followed in Scandinavian countries which ensure the management practices to be the world’s best practice. These are the different management practices of the US as well as Scandinavia which are observed in the above discussion. HR manager is required to decide on the place or location which will be the most appropriate for performing business operations of the company. Moreover, decisions are also required to be made with regard to determining the best suitable country for acquiring competent human resource at low cost. HR manager of the company can use Dimension of Culture by Hofstede in order to ascertain cultural differences among these two societies. There are five cultural dimensions in this model that include firstly, power distance which signifies the relationship between top level and low level management of a company. Secondly, uncertainty avoidance signifies the extent of uncertainty as well as unknown situation faced in the society of the country. Thirdly, individualism versus collectivism signifies the extent to which people develop relationship with others in a company. In individualism, personal interest is the ultimate motive whereas in collectivism, group interests of people are more preferred in comparison to self interest. Fourthly, masculinity versus femininity signifies the role of gender in a country. Lastly, long-term orientation signifies the extent to which a country ascertains values as well as rewards to be accomplished (Department of Computer Technology and Programming, 2010). This model will assist the company in determining cultural differences of these two countries. For example, in terms of masculinity dimension, it is recognised that the US scores 62 whereas, Denmark scores 16 in this dimension. The low score in this dimension signifies that it is a feminine society. Companies of Denmark are managed effectively as well as decisions are made with the involvement of employees. Moreover, in consideration to power distance the US scores 40 which signifies equal rights for citizens whereas, in Norway equal rights as well as hierarchical method is followed for performing business activities effectively. Furthermore, in the uncertainty avoidance dimension, US scores 46 which signifies that new ideas are readily accepted. Whereas, Sweden scores 29 which signifies that culture of Sweden has low preferences in consideration to uncertainty avoidance. In case of individualism dimension, the US scores 91 which signifies that US culture possesses high individualism. Whereas, Finland scores 63 and it is also consider to be individualistic society (itim, 2013). Recruitment and Training The recruitment process of the company will depend on factors such as skills as well as professionals required for selecting individuals who will be appropriate and productive along with creative. The recruitment process will constitute of factors such as budget and selection procedures among others which will provide flexibility to the process as well as facilitate in conducting recruitment process inside specified budget. HR manager of the company is required to formulate recruitment process for selecting appropriate individuals for the company (Clarke & Combat Poverty Agency, 1996). The recruitment process of the company will comprise few steps which are as follows: Step 1: Identify the Need to Recruit HR manager of the company is required to decide on a few factors with regard to the need or requirement for recruiting as well as skills of individuals required to be recruited. Moreover, HR manager of the company is devoted with the responsibility of recruiting as well as selecting appropriate individuals. The selection criteria as well as recruitment process of the company is required to be approved as well as clear inside the company. Individuals coming for recruitment in the company are also required to be conscious of recruitment as well as selection process. Furthermore, working environment of the company is required to be flexible in order to recruit competent individuals at low cost (Cornelius, 2001). Step 2: Analyse the Requirement The requirements of the company are required to be analysed by HR manager for determining the job as well as the role to be performed by recruited individuals. Moreover, analyses are also required to be conducted in order to recognise knowledge as well as skills necessary for performing operations of the company is an efficient manner. Furthermore, individuals who are to be recruited must possess certain capabilities for performing assigned tasks competently (Cornelius, 2001). Step 3: Define the Selection Criteria The selection criteria of the company must be systematic as well as fair for evaluating and selecting individuals for the company. The individuals as well as HR manager are required to be aware of the job as well as the role to be performed. HR manager of the company should select appropriate individuals for the job (Cornelius, 2001). Step 4: Advertise the Vacancy The advertisement of vacancy of the company is required to be communicated through effective advertisement techniques. The advertisement of vacancy should be communicated through television, radio, hoarding and newspaper. The advertisement is required to be precise as well as clear. Moreover, the advertisement is required to specify the roles and essential requirements of the individuals to be recruited. Furthermore, operations as well as practices of the company must be communicated. All these will facilitate the electronics company in conducting the recruitment process in an effective manner (Cornelius, 2001). Step 5: Select the ‘Right’ Person Individuals approaching for the recruitment process are required to be selected in a systematic manner. First of all, a written test will be conducted of individuals appearing for recruitment. The questionnaire of the written test will comprise questions which will aid in assessing expertise as well as knowledge of individuals. After completion of the written test, individuals will be interviewed by the HR manager. Moreover, on assessment of written test as well as on the basis of interview certain individuals who possess essential potential as well as capabilities will be selected (Cornelius, 2001). These are the basic recruitment as well as selection process to be followed by the company in order to select appropriate individuals who will be perfect in performing business operations of the company in an efficient manner. This recruitment process will facilitate the company in recruiting appropriate individuals. Employees are essential for effective performance of a company as well as to accomplish the company’s objectives efficiently. There are three types of staffing policies which include Parent Company National (PCN) which signifies that local nationality employees are utilised for performing business operations of a company. Host Company National (HCN) signifies that operations of a company will be performed by host country individuals where business has been established. Third Country National (TCN) signifies that operations of a company are performed neither by PCN nor by HCN (Reiche & Harzing, 2008). In this regard, the electronics company should establish its manufacturing plant with HCN staffing policy which will assist the company in acquiring labour forces at low cost. The individuals selected are required to be provided with better training facilities for performing operations of the company in an effective as well as efficient manner. In the US, people acquire jobs as well as hierarchy of companies are obtained in accordance with their qualification. Moreover, people involved with corporate sector are required to be trained in an appropriate manner to perform business operations efficiently. Furthermore, varied training facilities are provided as well as huge investments are made in improving skills of employees. Therefore, training programs are an important element in the corporate sector in the US. As observed by Davidson (2012), there is a shortage of skilled employees in manufacturing sectors of the US. Moreover, the manufacturing sector in the US can employ more enhanced skilled employees but lack in terms of recruiting selective employees as well as due to inappropriate wage payment structure. There is also a scarcity of skilled employees in the US (Davidson, 2012). Employees in Scandinavian countries develop skills as well as competencies through personal interests and not with the intention of acquiring good salary. Moreover, people are facilitated with better educational opportunities as well as motivation which assist in acquiring enhanced skills. In this regard, people involved with companies perform business operations with better competency (Stephens, 1995). According to Iversen (1998), Scandinavia has demonstrated superior economic development as well as lower rate of unemployment along with high participation of labourers i.e. both men and women. Furthermore, employees are offered equal wage structure as well as full employment opportunities in these countries (Iversen, 1998). Payment and Reward Employees of companies are required to be paid in an appropriate manner in order to retain as well as maintain employees within the companies effectively. Moreover, payment structure as well as rewards which are to be offered to employees depends on certain factors which include job as well as role to be performed. Moreover, payment as well as rewards also depends on the size of a company such as turnover as well as budget among others. Furthermore, payment structure also relies upon the extent of responsibilities bestowed on an employee (Cornelius, 2001). In the US, payments as well as rewards are offered to employees on the basis of position of employees in the corporate world. Moreover, employees are offered payments in accordance with the expertise as well as skills. Furthermore, in the corporate sector of the US, there prevails an unequal structure of payment as well as rewards. In the US, almost 70 percent of employees are paid in cash whereas, rest are paid in noncash method as well as through deferred cash benefit techniques (Gerhart, Minkoff & Olsen, 1995). All these factors have led to the reduction of skilled employees in the US. In Scandinavia, payments as well as rewards are made in an equal manner irrespective of gender. Moreover, payment as well as rewards are offered to employees in Scandinavian countries on the basis of work performed (Oesch, 2010). In the Scandinavian countries, the Equal Pay Act was enacted in the year 1976, with the motive of providing equivalent payment for performing equal level of work. In the year 2001, the Equal Pay Act was revised and in accordance with this revised law, employers of companies are required to provide information to all employees as well as to those who are involved with companies about payment as well as rewards (Roseberry, 2009). These are the varied payment as well as reward systems which are utilised in these two societies. Moreover, level of payment differs in both the societies as in the US payments are made on the basis of position held in companies whereas, in Scandinavian countries, payments are made on the basis on work performed. Recommendations and Conclusion A company manufacturing electronic devices for mobile phone industry is planning to establish a manufacturing plant. Intense competition in markets worldwide due to globalisation as well as owing to advancement of technology has required HR manager of the company to be more competitive in recruiting as well as directing employees efficiently. In this regard, HR manager of the company is required to decide the most suitable location among the US and Scandinavian countries. Moreover, HR manager of the company is also required to perform an analysis of cultural values as well as recruitment process along with payment system of these two societies. After analysing all these factors it can be found out and reported to the senior management of the company that the most appropriate country for establishing manufacturing plant will be a Scandinavian country i.e. Denmark due to better economic development of this country. The economy has shown significant improvement in terms of financial stability and stable fiscal framework (OECD, 2012). The corporate culture of Denmark is creative as well as favourable for employees to perform business operations in an effective manner. Moreover, the managements of the companies in Denmark maintain enhanced communication flow which improves employee-management relationship as well as trust. Employees are involved in decision making process in the companies in Denmark which facilitates to enhance their morale and confidence consequently augmenting their level of productivity. This aspect can be an extremely invaluable aspect for the manufacturing unit to set up its operations in Denmark. Furthermore, all these aspects facilitate in improving working environment as well as motivation for improving performance of employees. In Denmark, there is greater number of skilled employees in comparison to certain other countries. Moreover, in Denmark there is enough availability of labour forces whereas, in the US there is a scarcity of skilled employees for manufacturing sector. These are the varied reasons for recommending the senior manager of the company to establish manufacturing plant in Denmark. References Clarke, J. & Combat Poverty Agency (1996). Managing Better 01: The Staff Recruitment Process. Combat Poverty Agency, Dublin. Communicaid Ltd. (2012). Doing Business in the United States of America. Available at: http://www.communicaid.com/access/pdf/library/culture/doing-business-in/Doing%20Business%20in%20the%20USA.pdf Accessed 3 January 2013. Cornelius, N. (2001). Human Resource Management: A Managerial Perspective. Cengage Learning EMEA, United Kingdom. Davidson, P. (2012). ‘Study Says Shortage of Skilled Workers Not That Severe’. Available at: http://www.usatoday.com/story/money/business/2012/10/14/jobs-skills-gap-study/1630359/ Accessed 3 January 2013. Department of Computer Technology and Programming (2010). ‘Geert Hofstede's Dimensions of Culture and Edward T. Hall's Time Orientations’. Available at: http://www.ctp.bilkent.edu.tr/~aydogmus/Hofstede_Hall.pdf Accessed 3 January 2013. Edward, T. & C. Rees (2007). International Human Resource Management. Pearson Education India, India. Eriksen, T. T., M. Kruse & G. Larsen (2006). ‘The Scandinavian Way’. Available at: http://www.cifs.dk/scripts/artikel.asp?id=1481&lng=2 Accessed 3 January 2013. Gerhart, B. A., H. B. Minkoff & R. N. Olsen (1995). ‘Employee Compensation: Theory, Practice, and Evidence’. Available at: http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1193&context=cahrswp Accessed 3 January 2013. Harzing, A. & A. Pinnington (2010). International Human Resource Management. SAGE, Great Britain. Iversen, T. (1998). ‘The Choices for Scandinavian Social Democracy in Comparative Perspective’, Oxford Review Of Economic Policy, 14(1), pp. 59-75. itim (2013). ‘The Hofstede Centre’. Available at: http://geert-hofstede.com/denmark.html Accessed 3 January 2013. Johnson, R. (2009). ‘Strategic International Human Resource Management towards achieving Sustained Competitive Advantage’. Otago Management Graduate Review, 7, pp. 63-79. Kondalkar, V. G. (2007). Organisational Behaviour. New Age International, India. Oesch, D. (2010). ‘What Explains High Unemployment Among low-Skilled Workers? Evidence from 21 OECD Countries’. European Journal of Industrial Relations, 16(1), pp. 39-55. OECD, (2012). ‘Economic Survey of Denmark 2012’. Available at: http://www.oecd.org/denmark/economicsurveyofdenmark2012.htm Accessed 3 January 2013. Reiche, B. S., & A. Harzing (2008). ‘International Assignments’. Available at: http://blog.iese.edu/reiche/files/2010/08/International-Assignments_Reiche-Harzing1.pdf Accessed 3 January 2013. Roseberry, L. (2009). ‘Equal Rights and Discrimination Law in Scandinavia’. Available at: http://www.scandinavianlaw.se/pdf/43-8.pdf Accessed 3 January 2013. Stephens, J. D. (1995). ‘The Scandinavian Welfare States Achievements, Crisis and Prospects’. Available at: http://www.unrisd.org/unrisd/website/document.nsf/ab82a6805797760f80256b4f005da1ab/218cad0393b83ee680256b67005b6836/$FILE/dp67.pdf Accessed 3 January 2013. Read More