Human Resources Management Challenges in the Middle East - Case Study Example

Human Resource Management in the Middle East Human resource management (HRM) refers to the management of an organizations human resources or workforce that derives production. It is the department in an organization that deals with issues related to performance management, organizational culture, hiring work force, sacking, employee motivation, employee training, compensation, organizational leadership, employee benefits, safe working environment, organization development, communication, well-being of all stakeholders, administration, and ensuring compliance with employment and labour laws (McNamara, 2012). Indeed, the HR department is very crucial in any organization as it serves the link between the employees and the management of any organization. Various theories, strategies, and models relate to HRM. Indeed, theories of strategic human resource management rely on organizational cultures and practices to assume that organizations develop a unique culture that is not prone to the impact of external environmental factors on organizational activities. Any organization seeks to succeed in establishing an effective human resource management as it correlates with the performance of an organization. Actually, effective human resource management enhances the performance of the employees and the entire company direction that aids in accomplishing the organizations goals and objectives (McNamara, 2012). Although, the human resource manager is responsible for human resource management in an organization, line mangers can equally take up this mandate upon authorization by the executive management of an organization. In the Middle East, HRM is a very fundamental aspect in business. Some of the richest countries in the world are in the Middle East and include UAE, Saudi Arabia, and Qatar. Nevertheless, some of the poorest countries in the world are also found in the Middle East and include Yemen and Sudan. The difference in economic development in the Middle East countries results from the different Human Resource Management approaches and other related factors. Whilst it is arguably true that unique similarities and differences exist between the Middle East Countries subject to the fact that they have unique opportunities and challenges, reflected in the HRM challenges in each country. The study on managing Human Resources in the Middle East generates an understanding on the dynamics and variables that dictate HRM policies and practices in this region. This paper will address human resource management in the Middle East countries and the challenges relating to it. The paper will highlight the models and future challenges for HRM policies and practices. The paper will specifically address HRM in Saudi Arabia and UAE while analysing the main features of these countries. It will equally denote the similarities and differences of these countries in HRM-related challenges. At the same time, the paper will address the ways by which each country can benefit from the knowledge and experience of the other as well as explaining the main challenges in developing a managerial career in Saudi Arabia. An overview of the main features of UAE and Saudi Arabia This paper will address the human resource management challenges with special concern on UAE and Saudi Arabia, which are both Middle East countries. The United Arab Emirates constitutes of seven emirates that include Dubai, Umm al-Qaiwain, Abu Dhabi, Fujairah, Sharjah, Ajman, and Ras al-Khaimah (Emirates.org, 2010). Geographically, UAE occupies an area of 83,600 sq. km along the southeast tip of the Arabian Peninsula. It lies east of Qatar, northeast of Saudi Arabia, and south west of Oman. Abu Dhabi is the largest of the seven federations and doubles as the capital city of The United Arab Emirates. UAE is currently one of the worlds fastest growing tourist destinations. UAE has huge oil reserves estimated at 97.8 billion barrels in 2011, and gas reserves estimated at 214.2 trillion cubic feet. UAE has an estimated population of 8.9 million residents of which about a third are South Asians, Europeans, and North Africans. The main religion in UAE is Islam and the official language is Arabic. There are more than 6,000 companies in UAE that includes manufacturing and distribution free trade zones. It has a GDP of 914.3 billion and an annual growth rate of 6.3%. Most notable is the fact that foreigners own many businesses in UAE and as such the UAE government seeks to place Emiratis in leadership positions (U.S Department of State, 2011). On the other hand, Saudi Arabia has an estimated population of 26.1 million people according to the 2011 census. The main religion in Saudi Arabia is Islam and the official language is Arabic. Saudi Arabia has a workforce rate of about 7.3 million people distributed in industries, government agencies, and agriculture. It has a GDP of about $622 billion with an annual growth rate of about 3.7% (U.S Department of State, 2011). Saudi Arabia is the world’s leading oil and gas producer (Central Intelligence Agency, 2012). The Saudi Arabia government seeks economic reforms and diversification with an aim of improving and maintaining its economy. The increasing global changes in the business environment results to the need for organizations to attract, recruit, retain, and develop effective employees (University of South Australia, 2010). However, where there is increasing business competition, low birth rates, and shortage of skills, HRM is becoming more challenging as days wore on. The challenges may be of legal compliance, ethical, business related, leadership related, and even related to distribution of rewards in organizations (Santa Clara University, 2010). Similarities between UAE and Saudi Arabia in terms of HRM-related challenges Both UAE and Saudi Arabia have not signed most international human rights and labour rights treaties. This is a big challenge to the HRM of organizations in these countries since they have no advocacy basis in case of human rights violations in the work place. These violations may include non-payment of wages, withholding of passports, and others. At the same breath, in both countries there is no legislated or administrative minimum wage. As such, the HRM faces a big problem in ascertaining remunerations for the workers. In both, countries, the Muslim religion forces the HRM to accord Friday as a day of rest. This is a big challenge since where not all workers are Muslims, and then a logistical challenge arises in ascertaining who should go for rest and who should keep working. Both UAE and Saudi Arabia deal with oil products where they produce and sell it to other countries. Hence, they face the same HRM challenges as they sell the oil to other countries that are not necessarily Muslim. In both countries, it is the duty of the HR to maintain and sustain corporate social responsibility. Hence, HRM faces the challenge of balancing the labour force needs of the organization, the need for change, and social corporate responsibility in the recruitment (Zanko, 2003). Another challenge that the HRM of both countries faces is the acute shortage of talents. This has led to layoffs in the engineering and production departments in the oil sectors. This jeopardizes the operations in this sector, as incompetent workers cannot work in the oil industry. As such, the HRM find it hard to find the qualified workforce in both countries. Moreover, the synonymous challenge that the HRM of both countries faces relates to employee allowances and salaries. Subject to the increasing living conditions in the globe, the HRM faces the challenge of increasing the remuneration of its workers of which some countries cannot afford. Additionally, the HRM faces the challenge of handling foreign work force that is very dominant in these countries. More so, the Saudization and the Emiratization policies adopted by the reference countries pose a great challenge to the HRM of both countries (Ramady, 2010). Accordingly, “The "Emiratization" policies cause a firm’s costs to increase as the number of expatriates increases in proportion to the number of nationals in a firm. These costs are perceived by the firms to constitute an implicit form of taxation on the hiring of expatriates” (Chartouni, n.y, p.1). Differences between UAE and Saudi Arabia in terms of HRM-related challenges From the GDP values and the annual growth rate figures, it is quite clear that UAE has a more stable economy than Saudi Arabia. As such, in Saudi Arabia, the management has not really adopted to the human resource as it has grown in UAE. Where the Saudi Arabian government relies on traditional administrative functions, UAE relies on the modern human resource department (Budhwar and Mellahi, n.y). Indeed, there have been many reported cases of human rights violations in Saudi Arabia than in UAE. This only proves that UAE have an effective HRM that have handled the challenges better than in Saudi Arabia (Sharma, 2009). Unlike in UAE, there are political and cultural challenges affecting the HR in Saudi Arabia (Budhwar and Mellahi, n.y). At the same time, in UAE residents tend to work on specific admin jobs unlike in Saudi Arabia where residents work in a variety of jobs. Additionally, there are ethical challenges in Saudi Arabia that are conspicuously absent in UAE subject to the diversity in the seven federations making up UAE. Moreover, the women working environment in Saudi Arabia is worse to that of UAE hence posing a major challenge to the HRM in Saudi Arabia. There is a lot of segregation and discrimination of women in Saudi Arabia where men decide on whether women should work. Actually, women constitute of only 15 percent of the national workforce with an unemployment rate of 26.9 percent. As such, HR in Saudi Arabia have the challenge of initiating and implementing education and labor policies that ensure equal opportunities for women in the labor force. Indeed, the government equally faces the challenge of isolating social barriers and creating a supportive cultural environment for women to join the labor force (AlMunajjed, 2010). How UAE and Saudi Arabia can help one another in terms of HRM policy and practice Both UAE and Saudi Arabia specialize in oil production and trade and hence encounter the same HRM challenges as seen here in. Indeed, they have many similarities in this end and hence could relevantly assist one another to solve these challenges. They can achieve this by adopting HRM policies and practices that can solve the HRM challenges (Burke and Cooper, 2005). These policies include allowance to movement of labor that draws from allowing free transfer of workers between the two countries. This is significant in according skill and professionalism in the work force thus minimizing the HRM challenges in the two countries (Mathis and Jackson, 2010). The two countries can equally form a common organization aimed at helping the managers to improve the HRM departments’ thus improving performance and offering solutions to the challenges. The adoption of performance planning and staff evaluation would equally settle most of the similar challenges between the two nations. Moreover, the two countries can adopt specific HR policies and practices in collaboration with the local trade union representatives to provide a high quality environment for the employees. Indeed, they can embrace equality as in both countries; women are discriminated in the working environment. At the same time, Saudi Arabia can adopt the workers diversity demonstrated in UAE to boost its workforce. Most significantly, UAE and Saudi Arabia should embrace the policy of training its work force, ensuring a better and safe working environment, improved employee relations, and streamlined recruitment and termination of employment (University of Oregon, 2009). Actually, Saudi Arabia should learn from UAE on the effective policies and practices that solve most HRM challenges. Other policies like layoffs and layoff benefits for the employees would enhance performance and play a major role in solving the challenges associated with HRM in the two countries. Main challenges in developing a managerial career in Saudi Arabia A manager seeking to develop his profession in Saudi Arabia would face many challenges (North and Goldenberg, 2011). The manager would face challenges in organizing the departments and developing a good relationship among all the departments in an organization. Indeed, the manger would face difficulties in establishing a stable relationship due to the cultural indifferences in Saudi Arabia (McNabb, 2005). Additionally, the political instabilities and the present wars in Saudi Arabia pose a great challenge to the development of a managerial career. Actually, Saudi Arabia has political conflicts that offers unstable environment for a Human Resource management course (Sharma, 2009). This jeopardizes the success of any managerial work. In addition, the manager may face challenges in creating a network that will enhance good relationship between the management and the line departments. The Muslim religion and its rules may pose a significant challenge to the development of a managerial career in Saudi Arabia especially where all workers or the manager himself is not a Muslim. Moreover, Saudi Arabia disregards human rights of the workers that would pose a major challenge to a managerial career. The aspect of attracting and retaining employees in the Saudi Arabian companies is a significant challenge to the development of a managerial career due to the policy of Saudization and the presence of more foreign workers (Sims, 2007). Moreover, compared to other Middle East countries like UAE, like the economy of Saudi Arabia is less stable and as such a manager may lack funds to run an organization, initiate policies and carry out normal practices. In conclusion, I find that Human Resource management is a fundamental aspect in any organization. It deals with compensation, organizational leadership, performance management, organization development, communication, organizational culture, hiring work force, sacking, employee motivation, employee training, employee benefits, and ensuring a safe working environment. Human Resource managers carry out Human Resource management in all organizations. In the Middle East, Human Resource management is equally important in the oil industry. However, it faces numerous challenges that sometimes unique or universal among the Middle East countries. The analysis on the Human Resource management challenges in UAE and Saudi Arabia manifests similarities and differences. A manager seeking to develop his managerial career in Saudi Arabia will face these challenges in his pursuit. References AlMunajjed, M. (2010). Women’s Employment in Saudi Arabia A Major Challenge. Booz and Company. Retrieved from: http://www.booz.com/media/uploads/Womens_Employment_in_Saudi_Arabia.pdf Budhwar, P, and Mellahi, K (n.y). Managing Human Resources in the Middle East. London: Routledge. Burke, R, and Cooper, C. (2005). Reinventing Human Resource Management: Challenges and New Directions. London: Routledge. Central Intelligence Agency. (2012). Saudi Arabia. Retrieved from: https://www.cia.gov/library/publications/the-world-factbook/geos/sa.html Chartouni, C. (n.y). Emiratization Policies in the UAE: An Intrafirm Bargaining and Matching Approach. Retrieved from http://www.iza.org/conference_files/EERTEC2011/chartouny_c7111.pdf Emirates. Org. (2010). United Arab Emirates. Retrieved from: http://www.emirates.org/ Mathis, R, and Jackson, J. (2010). Human Resource Management. London: Cengage Learning. McNabb, D. (2005). Public Utilities: Management Challenges for the 21st Century. London: Edward Elgar Publishing. McNamara, C. (2012). All about Human Resources and Talent Management. 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