Strategic human resource management - Essay Example

?Strategic Human Resource Management Introduction Strategic human resource management ensures that human resource management aligns human resource goals with overall business objectives. The force behind strategic human resource management is the growing need for firms to align their human resource strategies with the general business structure of overall goals, which demands proper alignment of human resource traditions with the general objectives of the firm. In the contemporary market characterised with intense competition, most organisations have diverted from conventional perception of human resource as passive resource that can be manipulated to get things done. Organisations now understand the importance of human resource in the competition-plagued market and treat their workforce as crucial source of competitive advantage. Many firms have realized that there is likely to be no organisation in absence of employees. Human resource practices are thus perceived to be geared towards supporting overall objectives of the firm. This paper explores strategic human resource management of Burger King in Vietnam. Company Background Burger King, often referred to as BK, is a multinational corporation headquartered in Florida, United States. Burger King’s roots can be traced back to Insta-Burger King, a restaurant chain in Florida founded in 1953. When Insta-Burger King was riddled with financial problems in 1954, David Edgerton and James McLamore, Miami-based franchisees, purchased the restaurant and gave it the now popular name, Burger King. The company has changed ownership severally since then with present owners focusing on restructuring to restore the company’s glory. By 2012, the company had approximately 12,700 outlets located in 73 nations. Burger King has basically relied on franchise business approach to grow globally and seek presence in many parts of the world. Burger King’s licensing of franchises differs from one location to another and depends on regions. Some franchises are categorised as master franchises and are mandated to sell the company’s sub-licenses. The company’s rapport with its franchises has never been smooth, leading to occasional legal challenges (Phi, 2012). Burger King became interested in Vietnam market in 2011 when the company collaborated with IPP/Blue Kite Vietnam. The company proceeded to establish its initial restaurant in Vietnam in 2012. Vietnam is perceived to be one of the most crucial markets for the company in Asia-Pacific (Phi, 2012). Through franchising, Burger King engaged with IPP group/BKV to ensure faster growth of the company in Vietnam (Phi, 2012). BKV in the strategic partnership was seen as a potential contributor in many crucial areas of the company. BKV was anticipated to provide employee training and development, finding strategic locations, and marketing of Burger King Brand among other roles. On the other hand, Burger king would ensure organisational as well as structural advancement while at the same time providing proficiency and assistance on its global operating system (Phi, 2012). Strategic Human Resource Management of Burger King in Vietnam The contemporary market is increasingly becoming competitive and consumer behaviour is also becoming very sophisticated. As such, firms which operate internationally are faced with the challenge competing on global scale. International human resource managers are tasked with the daunting role of developing workforce teams that can work in diverse business environments (Armstrong & Baron, 2002). In order to counter the growing global challenges in international business arena, strategic international human resource management is inevitable. Strategic international human resource management (SIHRM) can be referred to as the process whereby an international firm strategise on how to create and implement business policies and traditions for effectively managing its workforce on global scale(Armstrong, 2008). Strategic international human resource management comprises of issues affecting human resources, roles together with policies and practices emerging out of strategic operations of transnational corporations. The main objectives of strategic international human resource management are to facilitate the development and implementation of human resource strategies, guidelines and traditions that can ensure profitable operation of a firm in different parts of the world. It ensures that every business unit operates effectively within its locality. When entering new international markets, one of the main challenges for multinational firms is how to integrate well in the foreign culture. As such, the Burger King faces major challenges in Vietnam market as regards culture, geographical as well as constitutional provisions. International business enterprises must modify certain aspects of organisations and adapt them to operate internationally. Unlike domestic human resource management, strategic international human resource management is bombarded by globalisation, environmental and cultural divergence and variation of human resource policies and practices from one nation to another (Billsberry, Salaman & Storey, 2005). The Impact of Globalisation on Strategic International Human Resource Management Globalization refers to the process of integrating international economies to operate as one market (Sparrow, Brewster & Harris, 2004). It entails the elimination of national boundaries and the creation of a single global market and promotion of world trade through elimination of international trade barriers. According to Sparrow, Brewster and Harris (2004), emerging global market is one characterised by high level of uncertainty, competition, technological advancement and continuous reorganisations among others. Through globalization, conventional business boundaries become permeable resulting into increased rates of economic transformation, surging number and diverse market players increased intricacy and improbability (Sparrow, Brewster & Harris, 2004).For a company to remain relevant and competitive in the modern market, it has to take a global outlook regardless of whether it is a domestic or international corporation (Armstrong & Baron, 2002). Owing to complexities and other challenges of strategic international human resource management above domestic human resource management, international managers are required to exhibit higher professionalism, management quality, and cultural diversity knowledge. The managers must also be multi-skilled and be deployable among other desirable qualifications. Strategic Human Resource Management Models Many of the traditional strategic international human resource models integrate the influence of human resource programmes, like policies and practices, on the performance of international corporations in the global market. Strategic international human resource management models can either take a contingency dimension or universality (Kiessling & Harvey, 2005). Contingency (cultural) approach focuses on the consistency human resource management the overall strategies of the organisation. On the other hand, universalistic approach focuses on compatibility between human resource management and organisational strategy (Kiessling & Harvey, 2005). According to Kiessling and Harvey (2005), as corporations e begin to operate internationally, there is need to develop models that integrates the development process from strategic international human resource management (SIHRM) to strategic global human resource management (SGHRM) (Perkins & Shortland, 2006). Strategic global human resource management system is crucial for aligning the needs of employees of multinational corporations. SGHRM aligns organisational culture in accordance with supportive characteristics and traditions (Stahl, Bjorkman & Morris, 2012). SGHRM unlike SIHRM acknowledges that human resource effectiveness does not only depend on overall talent of the workers of a firm, but also on organised deployment of employees’ creativity across the entire global system of associations (Kiessling & Harvey, 2005). Strategic global human resource management demands that global human resource managers shift their focus on conventional approach of luring, selecting and developing employees to creating an organisational environment that will attract and facilitate leadership development while encouraging the spirit of teamwork. Organisational success in the current global market requires effective leadership and proper design of the strategic global human resource management system. As such, for Burger King to succeed in Vietnam market, the company needs to establish an efficient strategic global human resource management system design. It also needs to ensure that effective leadership is engaged in the process of the company’s development in the region (Kiessling & Harvey, 2005). Human resource is undeniably a reliable source of sustainable competitive advantage for every organisation. The ability of a firm to attract and retain diverse team of employees determines its success in the international market. This is crucial for creating a wide pool of unique talents that can push an organisation above its rivals in the market. One of the most significant roles of a global human resource manger concerns aligning the culture of emerging external linkages for the organisation. At the same time, the manager needs to enhance internal operations and cross-functional linkages, which are essential for effective operation of both internal and global systems of the organisation. Human resource policies of an organisation will be effective if they are aligned with overall objectives of the firm (Katou, 2008). Organisational strategies influence HRM policies as a determinant of organisational performance. The outcome of HRM depends on HRM policies (Katou, 2008). Organizational Performance Framework: Source: Anastasia A. Katou (2008). Measuring the impact of HRM on organisational performance. Journal of Industrial Engineering and Management. Influence of Environmental Factors on Strategic Human Resource Management Because human resource managers do not execute their duties in a vacuity, there are many environmental factors that affect strategic human resource management of every company. The business environment forms the macro unit while the organisation forms the micro unit. When considering the influence of environment on strategic human resource management, economic situations, labour markets, labour unions as well as laws of a country usually come into play. Environmental factors work separately or in unison to influence the manner in which human resource management function of an organisation operates. Any transformation in external environment of a firm produces profound effects on the workforce of companies. Human resource management of Burger King is responsible for linking the firm with its surroundings via environmental scanning (Aswathappa, 2005). The first environmental factor that influences strategic human resource management is technological innovation. Currently, there are numerous technological advancements going on across the world. The current world economy is known to be technology oriented. As such, multinational corporations require technical personnel in order to keep pace with emerging technologies and remain competitive in the market. Consequently, the recruitment of technical staff is one of the essential external environmental factors that Burger King must consider in order to operate profitably in Vietnam. Workers equipped with technical skills and experience is essential in keeping pace with dynamic job demands (Aswathappa, 2005). The second environmental factor that would affect the functioning of human resource management of Burger King in Vietnam is economic factors. Economic condition is a major determinant of the financial well-being of every corporation. When economic conditions are favourable, there is high probability of developing fresh expansion strategies as well as expansion of already established growth strategies. Unfavourable prevailing economic conditions usually necessitate contraction of development and expansion programmes of companies. Some expansion strategies are often cancelled in extreme cases. According to Phi (2012), Burger King decided to venture into Vietnam at a time when the country was experiencing an economic slump. However, having identified a strategic partner, Blue Kite Vietnam (BKV), the company made the decision to venture into a market they considered to be having great potential (Phi, 2012). The third environmental factor that would influence Burger King’s human resource function in Vietnam is employees’ associations. Employee associations increase the bargaining power of employees. These organisations have emerged stronger to counter the growing trend of industrialisation. Labour unions usually advocate and negotiate with the management of every organisation regarding employment terms and condition of member workers. Labour market is the fourth factor that is likely to influence the operation of human resource management function of Burger King in Vietnam. Labour markets create demand and supply for labour, which in turn influences the operation of human resource management function of organisations (Dowling, Festing & Engle, 2008). Labour market affects human resource activities but the influence is mainly on remuneration and external recruitment. As companies undergo organisational transformation, the demand for workers also changes to match the resultant organisational position. Intense competition in the market together with technological revolution requires employees to be flexible enough to adapt to any changes that may come forth. They must be in a position to acclamatise fast to changes in business environment. The fifth external environmental factor that is likely to affect the operation of Burger King’s human resource management function is legal factors (Dowling, Festing & Engle, 2008). Burger King has to manage and control its workforce in accordance with laws and regulations ratified by the government of Vietnam. Companies usually ensure effective management of their workforce to avoid litigation. Political influence on human resource management functions of international corporations is quite profound. Political influence of HR functions is founded on legislations that dictate minimum employment requirements and policies as regards tolerable and objectionable human resource practices (Amos, Ristow, Pearse & Ristow, 2008). Lastly, the structure, norms and education level of human resource in Vietnam is also likely to influence the manner in which the human resource management of the organisation functions (Armstrong, 2007). The national influence of manpower is manifested in change in employment structure and rising level of formal education among other determinants. Learned employees are in a position to question the decision made by the management and usually want their voice heard within the organisation, especially in matters that affect their welfare (Armstrong, 2007). Globalization has heightened competition in the market by removing trade obstacles. It has dissolved national boundaries making the flow of goods and services easier than ever before. Consequently, Burger King must conduct extensive research to know what its competitors, such as McDonald, plan to do. Despite the attractiveness of Vietnam market and good growth trend of Burger King, the threat of competition remains real to the company. Therefore, it is apparent that environmental factors influence particular performance of human resource management functions of every organisation. Alterations in both internal and external business environment pose a big challenge to international human resource managers. As such, human resource management of organisations must work ceaselessly to develop advanced management tools and techniques that would allow proper management of personnel across different regions or nations. Employee Performance Management One of the main focuses of human resource management of every organisation is to enhance the performance of employees through provision of favourable work conditions, developmental support and availing chances for all employees to take part in organisational decision-making. Presently, human resource management tasks are all geared towards developing effective workforce and nurturing employee motivation (Pulakos, 2009). The role of human resource management functions of organisation has evolved from performance appraisal to performance enabler and promoter (Pulakos, 2009). Performance management has become a mantra in employee management and it plays a critical role in fostering market leadership in the contemporary competitive global market. Performance management include setting performance objectives on mutual grounds, continuous performance review, provision of feedback and regular coaching as well as development and implementation of employee development programmes among others. Performance management is a methodical and an endless process through which the general performance of a firm can be boosted by improving the performance of individual workers of the organisation (Rolstadas, 1995). Performance management supports superior employee performance through development and communication of clear performance expectations, effective defining of roles and setting realistic standards (Cardy & Leonard, 2011). Armstrong and Baron (2002), argue that performance management is a tactical approach for enhancing organisational performance by increasing capability of workers. Performance management became a fashionable phrase in 1980s, when organisational performance was pegged on the concept of total quality management. Performance management is a continuous process that begins when an employee joins an organisation until such a time when he leaves. In its bid to establish presence in Vietnam, Burger King needs to employ all the relevant pre-requisites of a performance management system. The organisation should establish clear job description and performance strategies for its employees. It should recruit the correct batch of individuals, set reasonable performance standards, put in place effective compensation and motivation scheme and create employee development programs among other crucial elements of performance improvement. Performance management is a means through which an organisation rewards excellence. It enables the organisation to match the performance of individual employee with the overall organisational objectives and to emphasize on the significance of particular tasks in attaining the goals of the company. Clear performance expectations assist employees in comprehending what is required of them as they perform their duties. Benchmarking eliminates tasks that are no longer important for effective operation of the organisation. The establishment of effective feedback and coaching mechanism helps in identifying existing problems early enough to institute corrective measures. Burger king offer training to its coaches who in turn work as a team with restaurant employees to advance performance and also to ensure consistency in service delivery across the company’s global system. The fast food chain has also developed a new way of ranking its restaurants based on operations performance index. Further, the company ranks franchisees to improve transparency establish healthy competition. The Ability, Motivation and Opportunity (AMO) Model Excellent employee performance demands ability, motivation and opportunity (Harrison, 2005). The AMO model explores the relationship between high-performance work practices and overall organisational performance. The AMO model is utilises psychological theory to develop understanding of performance through predicting the behaviour of employees within an organisation (Jex & Britt, 2008). The model emphasizes on increasing the overall organisational performance by focusing on improving the ability of workers to execute their tasks efficiently (Griffin, 2012). The idea of unrestricted effort is based on the assumption that employees can deliver to the organisation more than just ensuring that work is completed. AMO model focuses on the development of employees at personal level (Ehnert, 2009). Ability encompasses practices that equip workers with essential skills to perform their duties based on the supposition that work will be extremely skillful. Ability suggests that employees usually want jobs that are in line with their talents and skills. Burger King must ensure that employees have the necessary skills to exploit the opportunities to utilize their optional effort via team work. The recruitment and selection programme of the company is such that only individuals who meet the anticipated qualities are engaged with (Purcell, 2007). Ability to use discretionary effort must be accompanied by motivation. Employee motivation can either be extrinsic or intrinsic (Frey, 2002). Extrinsic motivation factors include share-ownership programmes, remuneration increment and commission among other forms (Griffin, 2012). On the other hand, intrinsic motivation concerns employee job satisfaction. Burger King can establish a highly motivated workforce by establishing a favourable workplace culture where there is trust and coherence (Pride, Hughes & Kapoor, 2012). The company can motivate its employees to figure themselves as integral part of the organisation. Motivated workers exhibit high probability of staying with the organisation and also reduce employee absenteeism. Opportunity refers to the engagement of employees in decision-making process of the organisation (Marchington & Wilkinson, 2006). Decision making process should include even employees at the lowest rank. This would help to minimize chances of friction during the implementation process because it makes all employees feel responsible for the decisions of the firm. Employees tend to rebel when not included in the decision making process because they feel trivialised and also tend to think they are not part of the organisation. Participatory approach in decision making of the firm will ensure that each employee become responsible for pending tasks. According to greener (2010), AMO is crucial “in building strong front-line manager responsibility for aspects of people and performance management.” Conclusion In the contemporary global market characterised by intense competition and globalization, human resource functions of multinational organisations have become more complex. In order to survive the threat of competition in Vietnam, Burger King must embrace strategic international human resource management approach that will enable it to function optimally in Vietnam market. Human resource management operation is influenced by both internal and external environment, which the company must put into consideration. It must asses the qualification of its franchisees, develop and implement effective human resource management models in order to reap the benefits of the new market. Total number of words: 3,275 References Amos, T.L., Ristow, A., Pearse, N.J. & Ristow, L. (2008).Human resource management, 3rd Ed. 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