HR Manager at Kenworth Hotels - Essay Example

HRM- Report - As HR Manager at Kenworth Hotels Terms of reference On (put a your choice), the CEO of Kenworth Hotel Michael Kenworth and the three members of board of directors requested me the Human Resource Manager of the company to prepare a report to govern expansion program of the company into the international markets and specifically Spain at this time. Introduction Globalization as spurred by advancing technology and enhanced cross border movements of workers and traders has created great business opportunities worldwide. This has motivated many companies and businesses to seek to expand internationally to capture the perceived opportunities. The increase in expansion of businesses into multinational companies has led to great competition that has necessitated rise in demand for high tech and competitive managers. To become an effective manager, an individual needs to have broad knowledge about international affairs and different global cultures especially of the target market. This report is going to provide guidance on the appropriate selection process, training, remuneration, reward and promotion of manager to work for Kenworth Hotels in Spain. In so doing, the report will guide the audience into understanding various concepts of international labours, ethical practices; integration of businesses into international status. In the process, the report will highlight challenges and solutions for international companies. The report will also inform the executive of Kenworth Hotels about issues to give significant focus and concentration to ensure success of the intended foreign investment. Roles of multinational companies in improving labour conditions However good, globalization came and has grown in magnitude and scope with particular problems and challenges that requires fixing or addressing for companies or businesses intending to expand internationally to achieve success. Some issues related to globalization tend to be serious to overwhelm the abilities of managers and individual companies to exercise control and regulation (Dewhirst 2012). The most common issues related to globalization or internationalization of companies include cultural incompatibilities, price wars, compliance to rules and regulations governing businesses operations and transfer of knowledge among others. To survive and emerge successful in the process of globalization, businesses need to identify and understand the challenges related to internationalization. International companies need to comply with the labour laws set and established by the governments of the parent and host countries. Usually, international companies especially those involved with manufacturing of goods move to foreign countries that are underdeveloped than the parent countries (Bolden-Barrett 2014). The logic usually is that cost of production in the parent countries is usually exorbitant and unaffordable to them thus the need to move to developing destinations to cut costs of production. In developed parent countries, labour laws and civil rights movements as well as other Non-governmental Organizations concerned with fighting for human rights especially in the working places are usually strict and proactive. The bodies and laws concerned with labour activities in the developed parent countries tend to advocate for higher remuneration and rewards for workers depending on their experiences, responsibilities and years of service in the given fields. These aspects are usually looser in their developing destination markets targeted by most manufacturing multinational companies (Forbes 2010). Existence of loose labour laws and weaker organizations concerned with promotion of labour rights usually tempt the multinational companies to begin offering remunerations that are below the minimum wage bills. This mostly happen due to the understanding that many people have no jobs and are ready to take any wage for any job (Stahl, Björkman & Morris 2012, pg. 230). Furthermore, such labour exploitation as practiced by most multinational companies in the host countries attributes to the fact and understanding that most of the employable population have little or lack skill in particular levels of production. In order to produce and operate effectively, most multinational companies come with technicians who direct and guide local employees implementing and supporting operations for low pays. Such practices are usually unethical and can create significant enmity between the employees or local labour organizations and the individual multinational companies. To avoid such challenges and ensure equality and equity, multinational companies should establish internal wage bills that are higher than the local wage bills established by the governments of the host countries. Setting higher internal wage bills is usually possible considering significant cutting of costs of production in the host countries. Unlike in most of developed parent countries from where most of the multinational companies exit or expand their operations, the developing host countries tend to have relaxed laws about child labour. This has seen many companies face litigations and accusations for using underage children who should otherwise go to school. The motivation towards such conducts has been desire to maximize on profits considering that children know little about labour laws and standards (Durai 2010, pg. 73). Sometimes some companies ignore to make clean working environments and protective utilities to cushion employees from injuries. In cases of injuries to the children during production, most of the multinational companies involved in the unethical conducts tend to withdraw their responsibilities and leave the individual victims to suffer and perhaps bear their medical costs by themselves. Some companies might have good intentions to provide support to such victims, but fears confrontation with the international labour laws and UNICEF that are usually strict against child labour. To summarize, multinational companies need to conform by ethical standards governing labour and company practices established by international trade systems or local authorities to ensure equity and fairness. Balancing local and international requirements Multinational companies tend to face challenges in attempts to balance the local and international demands. UK that is the parent country of Kenworth Hotels is a developed country with strict laws governing companies and labour practices. The country also has strong trade unions that advocate for every aspect of employee rights and privileges. The destination host country, which is Spain ranks lower than UK in terms of economic and social power. As discussed earlier, most multinational companies tend to take advantage the differences in economic and social power between the developed and stable parent country to exploit labour and manipulate laws in their favours (Stadler 2011, pg. 63). Such practices have great potential to compromise performance and acceptance of the international companies in the destination host countries. Since labour requirements in UK can be stricter than Spain, Kenworth Hotel should not relax it tradition of abiding by the perceived tuff laws in the parent country. Transferring the standards of UK to Spain cannot cause significant harm to the ethical practices and traditions in the host country. In fact, carrying the traditions and ethical practices from UK to Spain may work to enhance working and ethical conditions in the destination country. In terms of minimum wage and rewards, UK labour laws recognize higher average wage margins than Spain. This is not to mean that Kenworth Hotels should transfer the same margins to the host country and start offering remunerations similar to those offered to its UK employees. Instead, Kenworth Hotels should review to understand the legally accepted wage margins in Spain to avoid creating imbalance in the host labour market (Bobo 2005, pg. 9). Even if the company needs to provide better pays to attract competent workers and managers, the pay should not be higher than threshold set by the government. To comfort the manager supposed to come UK where remunerations are higher than the margins accepted in Spain, the Human Resource manager of Kenworth Hotels should establish frameworks and measures to provide rewards, incentives and leaves that collectively equal the margins paid in the UK. Kenworth Hotels can also adopt strategic innovation to find and device techniques to reconcile the differences that may exist between the destination and the host country (Stahl, Björkman & Morris 2012, pg. 236). Good strategic innovation can include designing of policies that lean more on the international company and trade laws. Spain has to a signatory or ratified participant in the adoption of the specific international labour laws that Kenworth Hotels can use in balancing requirements (Wettstein 2009, pg. 113). For instance, Kenworth Hotels can identify measures to ensure strict conformity to human rights and employee rights as enshrined in the UNHCR and conventions of ILO respectively. Considering that Kenworth Hotels is planning a move to a new Spanish market where it has little experience, understanding and linguistic challenges, the management need to adopt open dialogue and transparency with the potential employees and local communities as well as with the governmental authorities to balance the implementation of the international and local requirements (Syrett 2003, pg. 19). This means that the HR department of the company in Spain will have to adopt strategic integration to organize various meetings and conferences with the local employees and the entire surrounding society. This will enable the company gather basic and valuable information on the preferences and culture of the local communities and behaviours of the local employees to ensure protection and observance of the favoured values. Enhanced, transparent and open communication with employees from the local community and members of the surrounding community is important in helping the company understand preferences of the locals thus create policies and regulations to help in adhering to the international and local laws (Daft 2010, pg. 91). Strategy for selection and recruitment of Manager off new subsidiary Since the CEO Michael Kenworth and board members of Kenworth Hotel prefer selection and promotion of one of the top officials in the company to act as the manager of the subsidiary branch, there is no need for HR to make advertisement for the vacancy to the public. Internal advertisement is thus the best way to receive application of the willing staff within the organization (Dolfsma, Duyesters and Costa 2009, pg. 19). The reason as to the favour of the board of directors for a local staff relates to the familiarity of the individual with the operations and cultures of the parent company that are transferable to the subsidiary destination in Spain. All applicants will direct their letters of interest to the HR office. The HR manager and staff will then resort to reviewing and analysis of the applicants. Priority will go to the applicants who have extensive experience in the organization and wide understanding of the cultures and organizational ethics and codes of conduct of the company (Dlabay & Scott 2010, pg. 71). Applicant staffs that have sufficient training and knowledge in management and administration will also get priority. Only staffs who meet the mention criteria will find their names shortlisted for interviews and examinations. The exams will involve tests on critical thinking and problem solving skills of the candidates. The tests will encompass case studies and fictional organizational challenges that individual candidates will have to answer. The shortlisted candidates will also have to perform aptitude tests on managerial mathematics to evaluate their mathematical skills. This will help in selection and recruitment of individuals who can perform accurate calculations of company’s resources and finances to prevent any possible losses that may hurt operations of the business (Gupta 1997, pg. 13). Mathematics test will also help in identification of a manager who can perform accurate comparison of the costs of operation in the new destination with that of the parent environment and estimate profits to expect. Interviews for the shortlisted candidates will be through oral administration and will focus on testing planning, administration, coordination and communication skills. Testing on planning will help identify a competitive candidate who can help the parent organization that will be financing initial operation costs of the new subsidiary to cut costs and ensure minimum operation costs but with good output. Interviews to determine planning skills of candidates will also be important in ensuring recruitment an individual who can maintain low cost of operation of the business in long-term and ensure that the subsidiary is profitable and can run its affairs with little resource dependence on the parent company (Lodge & Wilson 2006, pg. 23). Coordination tests will ensure selection and recruitment of a manager who is capable of engaging properly with junior employees to ensure maximum exploitation of their efforts and skills for the benefit of the organization. A manager with effective coordination skills will be able to mobilize and perform proper allocation of resources in accordance to the needs and efforts of the individual employees to ensure support for innovation, motivation and commitment to duties. Testing communication skills of the candidates will also help in identifying a manager who can relate well with employees and the public to ensure effective and productive relationships (Badry 2009, pg. 51). A manager with effective communication will be able to identify and solve problems easily with limited changes and difficulties. Strategy in training and development of the manager For the selected manager to fit well in the host country, the company has to organize training and development programs for the individual. Since the prevision recruitment and selection process led to identification of a candidate who is competent in many aspects of management as demonstrated through the tests, interviews and examinations. Now, the most important area of training and development to subject the qualified candidate concerns culture and beliefs of the society in the Spain. According to Sauvant, Mendoza and Irmak (2008, pg. 75), to ensure effectiveness of the training, the training and development program on cultural practices and behaviours of the community will be in the host country. Training in the host country will enable the individual candidate gain immediate practical understanding of the exact concepts and theories. Such training will include linguistic proficiency to enable the manager understand and speak Spanish, accepted corporate culture by the government of the country and traditions of the rural community and entire Spanish (Sankar & Rau 2006, pg. 115). This training program will take three months. Training on cultural practices of Spanish will help the manager interrelate properly with the local communities and at the same time protect important cultural practices to avoid clashes and lack of responsiveness from the locals. To strengthen the managerial skills of the manager especially on issue regarding finances, training and development program may extend to include financial management. The course will cover areas such as balance sheets, auditing and analysis of financial performance of an organization (Cullen & Parboteeah 2014, pg. 229). Since the candidate will have some significant knowledge about financial issues bearing success through the previous tests, the training program will take at most three months. Such training will help the manager perform proper if not accurate plans for the running of the organization. Pay and reward As mentioned earlier, balancing of wages and rewards is one of the major challenges faced by most multinational companies. Some tend to exploit employees in the receiving economy by offering low pays despite long hours of working. In the case of Kenworth Hotels and its expansionary plan to Spain, the payment margin for the manager will not exceed the average threshold that most of businesses offer for the position. This will be case despite the fact that the individual manager comes from UK where the average pay for the individuals in the same position is relatively higher. However, to ensure fairness and cover up for the difference, Kenworth Hotels will have to give more rewards and incentives to the manager so that the whole remuneration harmonizes with that of the managers in the UK headquarters and other areas of operations (Birkinshaw,Ghoshal & Markides 2004, pg.29) . Since the manager will have just gain promotion and deployed to a start up subsidiary, the magnitude of the rewards will not immediately compare with salary and remunerations of managers in the established branches. The general pay and rewards will be increasing with improvement in performance of the individual manager until the business stabilizes and capable of covering its bills independent of the parent business. Rewards and incentives will include things like house allowance, car and transport allowance, healthcare cover and responsibility allowance. Increasing the magnitude of the allowances and remunerations in bits will help in encouraging hard work to ensure that the individual manager perform their duties extraordinarily with anticipation of pay increase and recognition (Tallman 2007, pg. 118). Conclusion This is a report addressed to the CEO Michael Kenworth and board members of Kenworth Hotels in UK. On 16th May 2014, the board of the company requested the HR manager to create a report that would help in easy expansion of the company’s services to the international markets and Spain in particular. One of the issues that board of governors of Kenworth Hotels expected the report to address relates to the strategies that the company can adopt to ensure equality in the international labour market. One of the ways focused upon by the report relates to adherence and conformity to human rights as well as labour laws. To avoid this challenge and common trap for most of the multinational companies, the report contains advice for the top management of the company to ensure fair remuneration of employees in the planed subsidiary in Spain by creating an internal wage bill that is within the minimum national wage bill in Spain. Another challenge usually faced by multinational companies relate to firms employing underage children who are ignorant of the labour laws and proper codes of ethics related to employment. To avoid the interruptions related to the challenge, the report urges the management of Kenworth Hotels to exercise strict conformance to the international labour laws and conventions of UNICEF. The company should ensure treatment of workers in the planned subsidiary in Spain in the same manner as in UK and other countries where it runs its operations. The report also had to contain advice for the board of Kenworth Hotels on the strategies to adopt to ensure balancing of the local and international laws and investigate the impacts of such strategies on the policies of human resource. One of the strategies highlighted is strategic integration. Under the strategy, the HR management has to identify information that the company has about the targeted market and conduct further studies to understand other hidden or unclear information. For instance, the company already has some information about Spain and requires more information about cultural practices and government laws to establish proper internal policies and ethics to ensure conformance to the national and international laws. Other items of the report include strategies to conduct selection and recruitment, pay and remuneration and training and development for manager who will oversee operations in the subsidiary. With respect to the wish of the board of governors that the manager to oversee operations in the Spanish subsidiary should be one of the supervisors or deputy managers, advertisement for the position will be limited to the staffs. Selections for applicants shall be through interviews, tests and examinations to determine the most appropriate candidates for the position. Successful candidate will receive training and development on the culture and financial management in the host country and will take three months. 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