Developing a Human Resource Management Strategy to Synthesise Human Resource Policies and Practices - Case Study Example

HRM Strategies of a Multinational Company - The Case of GlaxoSmithKline - ID Number Total Number of Words: 2,763 Executive Summary Managing a diverse group of employees from different countries can be a very tedious task. In line with this, the Hofstede’s value dimension framework is a very useful tool when it comes to analyzing the impact of culture in managing people. In general, it is necessary to determine whether or not the country has a high or low level of power distance and uncertainty avoidance. In the process of determining a specific country’s level of power distance and uncertainty avoidance, the human resource managers can have more power in terms of being able to effectively manage employees in different countries worldwide. A very high employee turnover rate can be very costly for GlaxoSmithKline. Therefore, when recruiting people, it is crucial for this company to offer a more attractive work flexibility schemes such as free childcare service during working hours and more attractive maternal and paternal leave among others. Table of Contents Executive Summary ………………………………………………………………………. 2 Table of Contents ………………………………………………………………………….. 3 1. Introduction ……………………………………………………………………….. 4 2. Brief Introduction about GlaxoSmithKline ……………………………………….. 4 3. GlaxoSmithKline’s HR Policies and Practices …………………………………… 5 4. Significance of National and Global Cultural Background and Institutional and Governance Framework on GlaxoSmithKline’s HR Policies and Practices ………………….……………………………………… 6 5. The Extend in Which GlaxoSmithKline has Centralized its HRM Policies And Practices ……………………………………………………………………… 7 6. Proposed Human Resource Management Strategy for GlaxoSmithKline ………… 8 7. Conclusion and Recommendations ……………………………………………….. 12 References ……………………………………………………………………………… 13 - 15 Appendix I – GlaxoSmithKline around the World ………………………………………. 16 Appendix II – Power Distance and Uncertainty Avoidance by Country Classification …. 17 1. Introduction Multinational corporations are companies that are legally registered and are currently manufacturing and selling their goods and services in multiple countries worldwide (Doob, 2013). In most cases, multinational companies are composed of foreign subsidiaries (Drucker, 1997). On the contrary, transnational corporations are large-scale companies that refuse to identify the business in a single country (Pitelis and Sugden, 2000, p. 72). GlaxoSmithKline is a good example of a multinational company. Specifically the main purpose of this report is to create and develop a human resource management strategy that is suitable in the case of GlaxoSmithKline. As part of going through the main discussion, this report will first provide a brief introduction about GlaxoSmithKline followed by analyzing the company’s HR policies and practices based on theoretical models related to human resource management. In relation to both national and global cultural background, institutional and governance framework where GlaxoSmithKline is currently operating, a critical exploration and evaluation will be conducted prior to discussing the extent in which GlaxoSmithKline have decided to centralize its HRM policies and practices. 2. Brief Introduction about GlaxoSmithKline As a British pharmaceutical company based in Brentford, London, GlaxoSmithKline manufactures a wide-range of pharmaceutical, vaccines and consumer healthcare products (GSK, 2014a). On top of its research and development (R&D) centres in UK, US, Belgium, China, and Spain (GSK, 2014c; Woods, 2011), GlaxoSmithKline managed to establish a total of 86 manufacturing sites in 36 different countries worldwide (GSK, 2014b). (See Appendix I – GlaxoSmithKline around the World on page 16) GlaxoSmithKline value its people. For this reason, a significant part of GlaxoSmithKline’s human resource strategies are mostly focused on its human capital management, resourcing, employee relation ns, and talent management. To maintain its competitiveness in the global pharmaceutical industry, GlaxoSmithKline offers a lot of exciting jobs, benefits, remuneration and compensation packages to all well-experienced professionals worldwide (GSK, 2014d, 2014f, 2014h). In response to its continuous business expansion, GlaxoSmithKline is currently employing more than 100,000 people in more than 115 countries worldwide (GSK, 2014i). 3. GlaxoSmithKline’s HR Policies and Practices In general, human resources aim to equip the business organization with the right people who have certain skills and talent that can contribute to the success of the business (GSK, 2014h). On the other hand, HR policies pertain to the organizational guidelines which are commonly used in managing the company’s employees (Armstrong, 2007, p. 147). In line with this, Armstrong (2007, p. 147) clearly explained that the HR policies serve as a guide each time the HR manager would create a cultural norm for its employment practices. Supported by the company’s Global Ethics and Compliance team, GSK’s HR policies are mainly based on the company’s “Code of Conduct” (GSK, 2014i; GSK, 2012). Using GSK’s Code of Conduct, the HR management of GlaxoSmithKline is able to design its employment policies that are directly related to its recruitment practices, fair labour practices, expected employees’ attitude and behaviour at work, business practices, employee benefits such as pension, healthcare support and management services, childcare plans, health and safety standards, and company shares, corporate incentives like management bonuses, sales incentives, and staff bonuses, and HR communications practices among others (GSK, 2014f; GSK, 2012). For instance, as part of its recruitment strategies, GlaxoSmithKline’s HR managers are expected to conduct “pre-employment and pre-engagement screenings” to ensure that each candidate is highly qualified for a specific job position (GSK, 2014i, p. 17). A significant part of GSK’s Code of Conduct is to protect the Company’s image when dealing with its global business partners, customers, competitors, staff, and suppliers (GSK, 2014i, 2014j). Therefore, it becomes a part of GlaxoSmithKline’s policies to encourage each employee to make it a habit to treat other people with respect and dignity at all times (GSK, 2014i, p. 14). In order to attract, retain, and give equal respect to each employee, GlaxoSmithKline’s policies include the need to establish workplace diversity, maintain “trust” between the company and its employees, and provide each worker with a safe working environment that is free from bullying and any forms of workplace discrimination and harassment (i.e. sexual harassment, gender or racial discrimination, etc.) (GSK, 2014, pp. 14 – 15). Failure to do so could increase the risks of terminating an employee or subject the person who violated the company’s policy through a disciplinary action (GSK, 2014i, p. 3). It means that each staff are expected continuously promote the practice a positive work attitude and behaviour that is aligned with both legal and ethical conduct (GSK, 2014j). 4. Significance of National and Global Cultural Background and Institutional and Governance Framework in GSK’s HRM Policies and Practices Aside from practicing the need to comply with the country-specific laws and regulations concerning employment and global environment, and health and safety (EHS) standards (i.e. statutory minimum wage, child labour laws, etc.) (GSK, 2014i, p. 15 – 16), there is a strong link between institutional and governance framework in the development of GSK’s HRM policies and practices. For instance, as part of GSK’s institutional framework, the company requires the HR managers to effectively integrate the importance of health and wellbeing of its employees when developing human resources strategies (GSK, 2014i, p. 16). For this reason, part of GSK’s HRM policies is to report any forms of health-related illnesses and injuries to the management so that the company can immediately respond to the healthcare needs of each employee. With regards to good governance, GlaxoSmithKline prohibit its employees to be involved in any forms of political agenda nor does the company support any person who wishes to run in politics (GSK, 2014i, p. 19). Most national and global business culture observes the anti-corruption laws. For this reason, a significant part of GSK’s HRM policies and practices is to ensure that each employee is able to maintain a zero tolerance level in the practice of bribery and corruption (GSK, 2014j, p. 9). This further explains why GSK created an organizational culture that observes the importance of “honesty and integrity” (GSK, 2014j, pp. 9 – 10). Therefore, when it comes to the need to hire a potential job applicant or promote a highly competitive employee, the HR manager of GSK is expected to choose the best candidate for each job post without showing any signs of “conflict of interest” (GSK, 2014j, p. 10). There are also some other strong evidence showing the link between the national and global cultural background as well as the GlaxoSmithKline’s human resource management policies and practices. According to Bell, Frain and Lauchs (2013), expensive gifts can be considered as a common form of bribery in business. Therefore, when it comes to accepting gifts or an invitation for entertainment purposes, part of the HRM policies and practices allow each employee to accept a universally accepted inexpensive gift(s) like calendars or mugs from a third party person or the company’s suppliers; so long as the gift is received on important occasion and is aligned with the values set by the company (GSK, 2014i, p. 10). 5. The Extent in Which GlaxoSmithKline has Centralized its HRM Policies and Practices The use of a formal strategic approach in recruitment and selection processes is one of the best strategies used in search for a highly qualified and highly competitive employee. In line with this, there are quite a lot of evidences showing that GlaxoSmithKline practice centralization in its HR practices. For instance, GlaxoSmithKline publicly announced its decision to launch its global recruitment technology back in 2011 (Woods, 2011). Using the official website of GlaxoSmithKline, interested applicants can apply for a specific job not only in UK but also in other countries like US, Brazil, India, Japan, Singapore, and Sri-Lanka among others (GSK, 2014g, 2014h). In fact, GlaxoSmithKline maintains its “GSK HR portal” as one of the strategies used for centralizing its HR practices (GSK HR, 2014). Using “GSK HR portal”, each one of the GSK employees are given the opportunity to access their individual “employee benefit information” (GSK HR, 2014). Using its recruitment technology, GlaxoSmithKline in China is currently working with Lumesse to strengthen its recruitment process in Beijing, Guangzhou, Shanghai, Tianjing, and Hong Kong (Woods, 2011). 6. Proposed Human Resource Management Strategy for GlaxoSmithKline Specifically the term “workforce diversity” is pertaining to a workforce with so many “different human qualities” that belongs to different cultural background (Daft, 2008, p. 333). In the process of creating organizational culture that promotes workforce diversity, GlaxoSmithKline was able to create competitive advantage out of the skills and talents of its global workforce (Andrews and Schlappa, 2014, p. 101). For this reason, a significant part of GlaxoSmithKline’s human resource management strategy should focus on developing a culture that strongly promotes workforce diversity. In real-world scenario, HR managers who are managing a diverse workforce are prone to experience a lot of constraints and challenges related to a diverse cultural background. In most cases, these constraints and challenges could arise right after GlaxoSmithKline has entered into merger and acquisition. In line with this, several studies have mentioned that right after a company enters into a merger and acquisition process, employees coming from two separate companies are more likely to show negative work attitude and behaviour as a result of resistance-to-change (Sanda and Adjei-Benin, 2011, p. 27; Guerrero, 2008). Specifically the presence of resistance-to-change can hinder GlaxoSmithKline’s ability to benefit from workforce diversity. In most cases, resistance-to-change can occur each time an employee would fear that they could lose their “old organizational culture” (Sanda and Adjei-Benin, 2011, p. 27). A good example of internal conflict occurred when GlaxoSmithKline decided to merge with Wellcome back in 1997 (Gratton and Truss, 2003). After the human resource management team of GlaxoSmithKline decided to integrate at least a couple of its HR practices in their business goals, it was unfortunate that the company has failed to align their own HR practices into the new business goal (Gratton and Truss, 2003). To increase the chances whereby the HR manager of GlaxoSmithKline could solve internal conflicts or organizational problem related to gender and social inequalities, group relationship, and uncertainties caused by socio-economic issues, the HR manager of GlaxoSmithKline should learn to adopt with the use of the Hofstede’s value dimension framework (i.e. power distance, individualism / collectivism, uncertainty avoidance, and masculinity / femininity) (Mueller, 2011, p. 136; Pauleen, 2007, p. 180). For instance, based on the Hofstede’s value dimension framework, the term “power distance” means that people who lives in a specific country are most likely to perceive that it is normal for power distribution within the workplace environment to be unequal (Pauleen, 2007, p. 180; Joynt and Warner, 2002, p. 108). In most case, business organizations that have a high score on power distance would have a “hierarchical pyramid” organizational structure whereas business organizations with low score on power distance would have a “relatively flat” organizational structure (Melkman and Trotman, 2005, p. 12). It means that the top management group of employees with high score on power distance will always have more authoritative power as compared to the middle and lower level employees (Pauleen, 2007, p. 180). With this in mind, assuming that GlaxoSmithKline has a low score on power distance, then, the HR manager of this particular company should start to create human resource management strategies that are more focused on removing the presence of “glass ceiling” or gender and racial discrimination practices (Rowley and Warner, 2013, p. 162). Likewise, the HR manager of GlaxoSmithKline should practice and make use of participative management style and offer work-related counselling services when managing a group of employees from countries with low score on power distance and low score on uncertainty avoidance (Rowley and Warner, 2013, p. 162; Boonstra, 2004, p. 88). On the other hand, uncertainty avoidance is all about the degree whereby employees would feel threatened by uncertain situations (Aswathappa, 2008, p. 184). As a general rule, countries with high uncertainty avoidance care a lot about laws, rules and regulations whereas countries with low uncertainty avoidance are “more willing to accept risks” (Brebbia and Zubir, 2012, p. 576). For this reason, employees from countries with high score on uncertainty avoidance tend to give more importance to corporate plans as compared to employees from countries with a relatively low score on uncertainty avoidance (Jong, Lalenis and Mamedouh, 2002, p. 238). In line with this, Jong, Lalenis and Mamedouh (2002, p. 238) further explained that the human resource management of GlaxoSmithKline should make use of indicative and a more flexible type of corporate plan when managing employees from countries with low score on uncertainty avoidance. Identified by Aswathappa (2008, p. 184), few countries with high uncertainty avoidance include: Japan, Germany, and Spain whereas few countries with low uncertainty avoidance include: Denmark and Great Britain. Assuming that the HR manager of GlaxoSmithKline is working with a group of people with high levels of uncertainty avoidance, the HR manager should then focus his/her strategies on avoiding internal conflict by obliging with the laws and not tolerating people with unusual attitude and behaviour (Aswathappa, 2008, p. 184). (See Appendix II – Power Distance and Uncertainty Avoidance by Country Classification on page 17) Individualism / collectivism are all about the comparison between “oneself as an individual” and the main concerns of a group of employees (Brebbia and Zubir, 2012, p. 576; Pauleen, 2007, p. 180). Assuming that GlaxoSmithKline would have a high score on collectivism, it means that the HR manager of this particular company will have lesser problem when it comes to managing a diverse group of employees. On the other hand, a feminine culture cares more about other people and their quality of life whereas a masculine culture is more focused on searching for more effective ways on how they can increase both “achievements and success” (Brebbia and Zubir, 2012, p. 577). Brebbia and Zubir (2012, 577) further explained that a feminine culture does not give too much importance on success. Assuming that the HR manager of GlaxoSmithKline is managing a large group of employees with masculine culture, the HR manager should focus on creating organizational culture that promotes the importance of teamwork. 7. Conclusion and Recommendations The human resource management of GlaxoSmithKline is currently handling a diverse group of workforce. As a common knowledge, high levels of employee turnover rate can be very costly on the part of the company. Among the cultural factors that human resource managers should consider include: (1) religious beliefs; (2) political and economic philosophy; (3) educational background of each employee; (4) language used; and (5) social structure. Most of GlaxoSmithKline’s employees are living in different countries worldwide. Creating a culture that observes flexible working practices is good in terms of attracting more people to join the team. In the process of observing more flexible working practices, the human resource manager of GlaxoSmithKline can have a better chance of winning the trust and loyalty of its employees. However, the human resource manager of this company should pay close attention to the levels of power distance and uncertainty avoidance in each country when designing its human resource policies and practices. In general, the presence of glass ceiling such as gender and racial discrimination can be very burdensome to the affected employees. In relation to high levels of anxiety and depression, the presence of gender and racial discrimination can decrease the productivity of its people. Therefore, to avoid internal conflicts caused by gender and racial discrimination, the human resource manager of GlaxoSmithKline should include workforce diversity and equal work opportunities in its human resource policies and practices. 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Cross-cultural Perspectives on Knowledge Management. Westport: Libraries Unlimited. Pitelis, C. and Sugden, R. (2000). The nature of the transnational firm. Routledge. Rowley, C. and Warner, M. (2013). WHITHER SOUTH EAST ASIAN MANAGEMENT: The First Decade of the New Millennium. Routledge. Sanda, M.-A. and Adjei-Benin, P. (2011). How is the Firm Dealing with the Merger? A Study of Employee Satisfaction with the Change Process . Journal of Management and Strategy, 2(2), pp. 28-37. Woods, D. (2011, December 2). GlaxoSmithKline enhances recruitment and talent strategy for Chinese growth. HRMagazine. [Online] Available at: http://www.hrmagazine.co.uk/hro/news/1020529/glaxosmithkline-enhances-recruitment-talent-strategy-chinese-growth [Accessed 15 March 2014]. Appendix I – GlaxoSmithKline Around the World Source: GSK, 2014g Appendix II – Power Distance and Uncertainty Avoidance by Country Classification Source: Aswathappa, 2008, p. 185 Read More