Transferability of the HR Systems from an American Context to France - Essay Example

TRANSFERABILITY OF THE HR SYSTEMS FROM AN AMERICAN CONTEXT TO THE FRANCE By Location Transferability of the HR systems from an American context to the France Given the fact that Fantasia Corp is an American based business organization, the HR practices that they use in the US might not effective in their operations in France. There are a number of factors that might lead to the need of some differences in the HR system used for the company’s operations in France. It should also be noted that the development of an HR system for operations in a new country will not be an easy task. Therefore, it should be noted that there are some issues and challenges that will be involved in the formulation and implementation of an HR system for Fantasia Corp’s operations in France. The HR Director has reservations about the transferability of the HR systems from an American context to the EU legislation, cultural and HR aspects. There are also concerns regarding the induction process for the expatriate workers. This paper aims at discussing the problems that Fantasia Corp will be anticipating in the process of implementing an HR system developed in the US in France. This paper will also give suggestions on how Fantasia Corp can overcome these challenges. In the last few decades, there has been a significant increase in the rate in which business organizations opt for global operations. Going for global markets present companies with more opportunities. Similarly, Fantasia Corp has also opted to expand their operations to Europe, with France being their targeted country. Recent researches reveal that organizations operating in different geographical environments usually have to operate under different HR practices and policies (Festing 2012, p. 43). This is due to the difference in social, political, cultural, and economic factors. Just like many other managerial practices, HRM is always affected by cultural beliefs. This is a factor that multinational corporations must take into consideration when intending to transfer some of their HR practices and policies to another country. Some of the practices that are socially allowed in America might not be admissible in France. This is a clear indication that some of the practices that have been successfully used by Fantasia Corp in the US might not be applicable in France. Therefore transferring the HR system used by Fantasia Corp in the US to France might have some performance consequences of their operations in France. HR researches have it that multinational corporations such as Fantasia Corp have to adapt to a certain degree to the cultural beliefs and practices of a host country. It should not be forgotten that in their operations in a foreign country they will need to used local human resource (Ferner, Almond & Colling 2005, p. 318). Even if they can be able to get some expertise from the US it will not be viable for the Fantasia Corp to import their entire human resource for their French operations from the US. In order for Fantasia Corp to make sure that their employees in France are subjected to a conducive working environment, which will encourage maximum productivity, they will have to make sure that they revise the HR system that they use to suit the cultural beliefs and practices of the French people. People’s behaviour in an organization can also be explained in terms of the social structure in a host country. Social structures can be used as guidanceforindividuals, through their positions and roles in an organization and the function of these institutions within the social system (Myloni, Harzing & Mirza 2004, p. 524). It cannot be doubted that social structures have an effect in the manner in which employees behave in an organization. Social institutions have a way of systematically influencing the practices of an organization. This results to processes and structures which reflects the social patterns. However, it is also suggested that the level to which an organization can be able to transfer HR practices to a host country depends on the business systems and social institution of the host country (Brewster 2004, p. 372). This can act as either and hindrance or facilitation of the transfer of an HR system from one country to another. In organizations with few formal institutions, the introduction of an HR system to a new country is not always as challenging as introducing the same for an organization with cohesive institutions. This is a clear indication that Fantasia Corp will not have an easy time withthe introduction of their HR system in France. One of the reasons comes from the facts that there is a big difference between the social structure in the US and the social structure in France. The other reason comes from the fact that Fantasia Corp has cohesive institutions. However, it should be noted that Fantasia Corp does not have to change the entire HR system so that they can be able to cope with the social institutions in France. All they have to do is get conversant with the social institutions in France so that they can be able to know which aspects of their HR system need to be changed (Quintanilla, Susaeta & Sánchez-Mangas 2008, p. 688). This will be the only way that the Fantasia Corp can be able to create a conducive working environment for their employees in France, especially those that they will be sourcing local. The result of such changes will be a situation whereby the company can be able to boost he profitability of their operations in France by making sure that they maximize the productivities of the employees that they use for their operations in France. This is what a multinational corporation gets when their HR systems reflects the social practices of the host country (Schuler, Budhwar & Florkowski 2002, p. 65). One of the factors that are believed to be of the highest influence to the transfer of HR systems is labour unions. If employees in France are represented by labour unions, then there is a high possibility that the practices of these labour unions will be in accordance with the HRM practices of the organizations in France. This is a clear implication that there is a high possibility that if Fantasia Corp chooses to transfer their HR system just has it is in the US they will have to face some conflicts with the rules and policies of the local labour unions. These differences might also result to unproductive attitude in the local employees. This will be a great hindrance to their performance (Shen et al. 2009, p. 243). Multinational corporations have no choice but to comply with the social practices of the host countries in order to survive there they are not forced or required by any type of regulation to comply with the social practices of the host countries. There is a significant difference in the selection methods that are used in the United States of America and those that are used in France. As compared to the US, the employee selection methods that are used in France have been observed to be less standardised. It has been observed that companies in France prefer using internal processes with much attention being paid on the references and recommendations. Interview and CVs were also highly regarded in France. This is a clear indication that Fantasia Corp will have to find a way through which they can make sure that they can integrate these section practices and policies into the HR system that they will be using in France (Sparrow, Brewster & Harris 2004, p. 178). Failure to do so, they will find themselves in a situation where they will not be able to get the best employees from the France labour market because most of the applicants will be prepared for the kind of selection process that they are used to. The ways in which basic salaries are determined in France are different from the way they are determined in the US. Despite the fact that French companies still depend on national and industrial agreements, there have been an increase in the trend in which the basic salaries are determined at company level. This is opposed to the US where basic wages and salaries are in most cases decided at company level(Scullion, Collings & Gunnigle 2007, p. 314). This is an implication that Fantasia Corp will have to take into consideration of national and industrial agreements when determining basic payments. Failure to do so, they might find themselves in a position where they are not able to compete for the most valuable employees in the market. It has also been observed that companies in the United States of America pay more attention to written performance appraisal as compared to companies in France. This means that the use of written reports in France might seem as something weird despite the fact that it is a common practice in the US. In most cases the process of appraisal through written reports can only be successful if highly contributed to by supervisors and employees. However, it will be hard for the Fantasia Corp to expect the employees that they will get in France to effectively participate in this form of appraisal given the fact that it will be a rather new practice to most of them (Hetrick 2002, p. 344). It will take some time before such employees are completely comfortable with that type of appraisal. There are a number of ways in which Fantasia Corp can make sure that they use the most appropriate HR system for their operations in France. This can be possible if policies are given by the main office in the US, but the HRM in France is given the right of giving suggestions on aspects of the HR system that should be changed so that it can suit the French environment. This is a kind of system that will involve more than mere collaboration between Fantasia Corp’s headquarters in the US and their office in France. Such an arrangement does not involve the HR team at the headquarters developing an HR system for the France operations. However, this involves the local HR reviewing the suggested HR system and making changes that will make it more suitable for the French business environment (Dowling, Festing & Engle Sr 2008, p. 201). Fantasia Corp can also consider making sure that they use the same HR system that they are using in the US in France, but make the implementation process will be made flexible enough for the social aspects of French culture and social structure can be incorporated into the HR system as it is implemented in France. This can be a way through which Fantasia Corp can make sure that the HR system being used in their French operations.As time goes by the HRM in France will be in a position to know which aspects of the original HR system should be changed so that it can be able to be effective in the French environment (Budhwar & Sparrow 2002, p. 398). The most important thing about HR system is their ability to bring out the best from an organization’s employees. This can only happen if the employees are comfortable. Being comfortable does not mean that an organization should encourage their employees to be in a comfort zone. However, it implies that an organization should make sure that they create an environment whereby they can get the most from human resource with their cultures and social structures being put into consideration. Other differences that might be existence between HR practices in the US and France is the applicable training and development. Fantasia Corp might choose to use standards in employee development and training. However, they also have the option of using different employee training and development techniques for their operations in France. However,in such cases the training plans to be used and the budget that is supposed to be used (Kabene et al. 2006, p. 15). This is because the HR training and development policies should not be of much difference from the training and development policies used by Fantasia Corp in the United States of America. The only aspects that could be changed are those aspects that might be of influence to the applicability of the training policies used by Fantasia Corp in the US in France. When starting operations in a foreign country, it should be noted that there are a number of differences that might lead to the need for an organization to change their compensation policies. This might not necessarily mean that an organization will have to change their entire compensation system (Stavrou & Brewster 2005, p. 192). However, there are some aspects of the compensation system that they will have to alter so that they fit to the situation in France. The laws that govern compensation in the US are different from the laws that govern employee compensation in France. Therefore, it would be inappropriate for the Fantasia Corp to imagine that they will be able to use the same compensation policies that they use in the US for their operations in France. This might not be optional. It might be a matter of considering their performance, but a case in which they have to comply with government regulations that relate to employee compensation in France (Budhwar & Debrah 2001, p. 505). This regulation might have some common feature of those used in the US, but there are some definite differences that should be considered in the development of an HR system to be used in France by Fantasia Corp. There will also be the need for induction training for the employees that the company will select from France. Induction training will be of high importance in this case because it is a way through which Fantasia Corp can make sure that these employees are familiarised with the company’s goals, culture, and strategies (McDonnell, Stanton & Burgess 2011, p. 22). However, it should also be noted that the kind of induction training that Fantasia Corp uses in the US might turn out to be different from the kind of induction training that would be appropriate for their activities in France. Attitude, culture, and social institution differences play a main role in the difference in the induction training methods that might be applicable in the US and those that might be applicable in France. This is an implication that Fantasia Corp will have to do all they can to make sure that the induction program used in France is a reflection of the program used in the US while at the same time looking at the aspects that can be altered to accommodate the social and cultural differences between the two countries. However, it should not be forgotten hat Fantasia Corp will also have to import some employees from the US. It will be unfair to the French employees working under the Fantasia Corp operations in France to work under an HR system that is meant for the American environment just because of the employees that the company will have to take to France(Holden 2001, p. 618). Therefore, the most logical thing for Fantasia Corp to do is to make sure that the employees that come from the US are also taken through induction training so that they can be able to familiarise with the cultural and social differences between them and the local people. Given the fact that the company will be targeting the local market through their operations in France, this would be the most logical option to take. Biobliography Brewster, C 2004, “European perspectives on human resource management” Human Resource Management Review, 14(4), 365-382. Budhwar, PS &Debrah, Y 2001, “Rethinking comparative and cross-national human resource management research” International Journal of Human Resource Management, 12(3), 497-515. Budhwar, PS & Sparrow, PR 2002, “An integrative framework for understanding cross-national human resource management practices” Human Resource Management Review, 12(3), 377-403. Dowling, P, Festing, M & Engle Sr, AD 2008, International human resource management: Managing people in a multinational context, Cengage Learning. Ferner, A, Almond, P & Colling, T 2005, “Institutional theory and the cross-national transfer of employment policy: The case of ‘workforce diversity’in US multinationals” Journal of International Business Studies, 36(3), 304-321. Festing, M 2012, “Strategic Human Resource Management in Germany: Evidence of Convergence to the US Model, the European Model, or a Distinctive National Model?” The Academy of Management Perspectives, 26(2), 37-54. Hetrick, S 2002, “Transferring HR ideas and practices: globalization and convergence in Poland” Human Resource Development International, 5(3), 333-351. Holden, R 2001, “Managing peoples values and perceptions in multi-cultural organisations: The experience of an HR director” Employee Relations, 23(6), 614-626. Kabene, SM, Orchard, C, Howard, JM, Soriano, MA & Leduc, R 2006, “The importance of human resources management in health care: a global context” Human resources for health, 4(20), 1-17. McDonnell, A, Stanton, P & Burgess, J 2011, “Multinational enterprises in Australia: Two decades of international human resource management research reviewed” Asia Pacific Journal of Human Resources, 49(1), 9-35. Myloni, B, Harzing, AWK & Mirza, H 2004, “Host country specific factors and the transfer of human resource management practices in multinational companies” International journal of Manpower, 25(6), 518-534. Quintanilla, J, Susaeta, L & Sánchez-Mangas, R 2008, “The Diffusion of Employment Practices in Multinationals:Americanness within US MNCs in Spain?” Journal of Industrial Relations, 50(5), 680-696. Schuler, RS, Budhwar, PS & Florkowski, GW 2002, “International human resource management: Review and critique” International Journal of Management Reviews, 4(1), 41-70. Scullion, H, Collings, DG & Gunnigle, P 2007, “International human resource management in the 21st century: emerging themes and contemporary debates” Human Resource Management Journal, 17(4), 309-319. Shen, J, Chanda, A, DNetto, B & Monga, M 2009, “Managing diversity through human resource management: An international perspective and conceptual framework” The International Journal of Human Resource Management, 20(2), 235-251. Sparrow, P, Brewster, C & Harris, H 2004, Globalizing human resource management, Routledge. Stavrou, ET & Brewster, C 2005, “The configurational approach to linking strategic human resource management bundles with business performance: myth or reality?” Management Revue, 186-201. Read More