International Human Resource Management - Assignment Example

International Human Resource Management Contents Box A 3 Question 3: Relationship of national culture and human resource management 3 Introduction 3 Discussion 4 Conclusion 8 Box B 8 Question 1: Impact of national culture on selection process 8 Introduction 8 Discussion 9 Conclusion 13 References 14 Box A Question 3: Relationship of national culture and human resource management Introduction Culture plays a vital role in context of effectively managing people. Cultural differences are closely knitted with wide array of management practices. Human resource management practices are usually considered to be vulnerable in terms of cultural differences. Culture affects HRM practices and its implications are witnessed in appropriateness and design. The differences in team member’s preferences or perceptions are because of differences prevalent in culture. Organizational behaviour is altered due to cultural aspect and it encompasses work motivation, work orientation, conflicts, performance appraisal, decision making, rewarding, goal definition, management style, etc. Over the years cultural socialization has impacted governance structures. These structures basically comprise of utility functions and actions being undertaken within the firm. This study will mainly focus on establishing relationship between human resource management and national culture. Internationalization occurring across the world economy is enhancing degree of cultural diversity. Cross cultural concerns in many real world organizations is being addressed through integrated HRM policies. Discussion Cultural values have a strong influence on organizational behaviour. This influence is observed in the form of leadership approach, conflict type, acceptable behaviour, etc. Cultural values should be thoroughly analyzed in order to understand HRM preferences. There are certain value orientations that help in evaluating beliefs, intentions and feelings. Value orientations enable a firm to determine human act and focus on solutions which might be beneficial to solve daily problems. Cultural values of people belonging to different categories can be effectively evaluated. Human resource management practice is a universal concept. It is observed that human resource management practices suitable in one country might not hold relevance in another country. For instance, in United Kingdom or United States, pay for performance is a common practice but it shall not be a productive strategy in another country. Quality circle program has gained significance in Japan whereas it is not implemented as a practice in United States. National culture influences wide array of human resource management practices like performance appraisal system, leadership style, strategic decision making technique, etc. Hofstede’s cultural dimension is a theoretical framework which can help to analyze national cultural aspect. Culture can be defined as morals, knowledge, custom, belief, habits, and capabilities and art acquired by an individual belonging to a society. It is all about how people act or behave in a particular situation. There are four ways through which cultural aspects can be thoroughly studied (Heery and Noon, 2001). Primary socialization is one such way of internal learning procedure that takes place in local community or family. Second approach is enculturation which is a non-intentional process taking into consideration all those factors of an environment, essential to be learned. Secondary socialization takes place after primary socialization and it influences people to acquire skills, behaviour or knowledge to perform well. Holistic or analytical approach facilitates better understanding of national culture. Holistic approach considers culture to be a ‘way of life’. All those elements that are a part of ‘way of life’ are portrayed along with establishing some form of consistency between those elements (Trompenaars and Hampden-Turner, 2004). On the other hand, analytical approach states culture to be a set of dimensions and then distinguishable variables are determined. Hofstede’s cultural dimensions represent some factors that are essential to identify cultural domain of any specific region. This model is inclined towards work-related values. The framework was framed in 1980 and has already been applied across 72 countries. Average scores are given to different countries on basis of cultural dimension framework in order to identify national differences in context of work-related values or behaviour. There were four dimensions proposed in Hofstede’s model such as collectivism versus individualism, power distance, uncertainty avoidance and femininity versus masculinity. Values which are related to workplace cannot be stated as universal. These values are retained only when any multinational enterprise attempts to impose these values in all foreign ventures. Hofstede’s model is able to elaborate on variance prevalent across human resource management practices. Individualism versus collectivism denotes two forms of cultural dimensions (Stone and Stone-Romero, 2008). In individualistic approach, inclination is towards individual goals or self interests. There is no importance of group work within this approach. Individuals are given freedom to perform their own work and accomplish their own set goals. On the contrary, collectivism approach focuses on team work and accomplishment of common goals or objectives. Human resource management practices shall change across this dimension since more of individualism culture will not be well aligned with team work. Power distance framework denotes the extent of dependency of less powerful members of an organization on individuals possessing more power (Aycan, 2005). Power if distributed unequally tends to alter human resource management practices. For instance, unequal power distribution would initiate autocratic leadership approach whereas equal power distribution shall enable democratic approach. Uncertainty avoidance is related to risks and it is about individual undertaking risk factor. A learning organization is more inclined towards accepting risks and HR policies are framed for such risky scenario. Risk takers influence an organization to structure recruitment and performance appraisal systems accordingly (Brewster, 2006). On the other hand, less risk takers are influenced through motivational programs, reward schemes, etc. Masculinity versus femininity is all about differentiation between two sexes that is observed within many organizations. These factors denote national culture and all of them have a significant impact on human resource management activities. In a national culture where there exists high power distance, obedience and loyalty are stated as an important components. These components should be present within all team members. It is observed that management is likely to implement performance appraisal schemes not based on results criteria rather on behavioural criteria (Briscoe, Schuller and Claus, 2009). Team members are basically at less risk when they follow traditional procedure rather than undertaking any innovative task. Performance appraisal can be easily distinguished as it is highly based on two forms of orientation like results orientation or behavioural orientation. Specific country usually indicates specific human resource management practices. Life-time employment regulation was developed in Japan since culture of more loyalty, hard work, less competition, etc., was prevalent in this region. On the contrary, this policy was not applicable in organizations located in United States since competition is high and employees are more prone towards switching jobs. It is also observed that Japanese firms invest more in recreational activities in comparison to American firms (Dipboye and Johnson, 2008). This is simply because; in Japan importance is given to maintaining and developing strong relationships. Motivational activities are a medium to enhance relationship between employer and employee. American firms do spend money in motivational programs but it is comparatively less in relation to Japan. Hierarchical structure is shorter in some countries while bigger in other regions. This structure is also related to cultural aspect. Hierarchical structure is long when power distance factor in society is more. Promotion or flexibility in job structure is strongly correlated with culture of a country (Gerhart and Fang, 2005). Schwartz’s cultural value dimension outlined different forms of business culture like universalism versus particularism, communitarianism versus individualism, affective versus neutral, specific versus diffuse, inner direction versus outer direction, achievement versus ascription, and sequential time versus synchronous time. These factors contribute towards human resource management strategies. Outer direction aspect is high in case of Germany and hence it possesses decentralized decision making approach. On the contrary, United Kingdom mainly portrays inner direction and so implements centralized decision making. On basis of Hofstede’s model it can be stated that a region which encompasses low uncertainty avoidance is not aligned with planning activities. The major impact of culture is witnessed in reducing or increasing employee productivity. Every organization aims at building a highly competent workforce. Management needs to understand beliefs, attitudes or values possessed by team members in order to structure appropriate human resource policies (Gooderham, 2004). Culture basically portrays employee interests and this have a relationship with recruitment, selection, performance appraisal, training and development programs, or employee relations. For instance, collectivism approach will be aligned with implementing internal recruitment procedure but individualistic approach shall support external recruitment mechanism. Hence it is evident that national culture is a central component for any form of human resource management activities (Hofstede, 2001). This cultural domain changes from one region to another and its impact is observed on change in HRM tactics or policies. Culture and organizational performance is interrelated. This in turn emphasizes management to incorporate national cultural aspect within HRM policies. Conclusion As per this study cultural aspects is a prominent factor when it comes to structuring human resource management policies. Societal trends in one region are highly distinguishable from that of another region. Across the globe it is observed that HRM policies differ and this is completely due to cultural norms. A human resource management policy applicable for Japan might not hold relevance in United Kingdom. Employee motivation is an essential factor for any organization and this is closely knitted with national culture. Hofstede’s model and Schwartz’s model of cultural dimension are included in the study in order to analyze relationship between human resource management and national culture. These frameworks have been able to outline certain cultural dimensions which play a vital role in formulation of human resource management policies. Box B Question 1: Impact of national culture on selection process Introduction International human resource management encompasses wide array of activities that are undertaken to manage employees. These activities usually include human resource planning, compensation, staffing, training and development, performance management and industrial relations. National culture has an impact on talent management. This concept is all about talent acquisition, management and retention. There are talented individuals located across the globe. However the major challenge for any organization is to retain talent within the system. In this study selection process designed in three different countries will be discussed along with their differences. Selection is a vital component within the framework of talent management. Management or HR personnel need to select best individuals who have capabilities to address job responsibilities and duties. Cultural impact is observed while framing parameters for selection process. These parameters would usually differ from one region to another. In certain circumstance, more preference is given to home country nationals that are reflected in entire selection procedure. Discussion Selection process is always considered to be a crucial element in overall human resource management practices. Technical expertise or communication skills are not the only two factors which hold significance in selection process. There are other parameters too that govern overall selection process. Culturally fit is one such factors utilized to frame most appropriate selection process. Selection process can be stated as a procedure to place right individual on right job position. National culture factors highlight interests of employers and employees during selection process. Selection process is not similar to recruitment. Recruitment procedure enables an organization to motivate individuals in order to apply for a job. A pool of talented individuals is built through this process from which few people are selected for job positions (House, 2004). Selection mechanism facilitates choosing candidate possessing knowledge, skills or abilities. There are certain steps involved in selection process of employees. These steps are preliminary interviews, written tests, employment interviews, medical examination and appointment letter. In any region, these procedures are common but cultural aspects are incorporated within selection strategy formulation. On market basis it is observed that some countries focus on determining knowledge base of individuals whereas in other country focused is on collectivism approach of individuals (Huo, Huang and Napier, 2002). Cultural aspects can well demonstrated by Hofstede’s model of cultural dimensions. There are four factors of this model which can portray cultural constraint within selection process. Selection technique in China, Australia and United Kingdom are totally different and they represent specific cultural domain. Selection process in China is categorized into three dimensions such as interview, tests and behavioural event. Interview is a basic approach in selection procedure. Cultural dimension of China states that there is moderate degree of power distance and respect is shown by employers towards employees. Lowering of eyes in China is a mode of respect. Apart from this factor, punctuality also plays a critical role (Inglehart and Baker, 2000). Individuals are selected on basis of their punctuality as this culture relates hard work with culture. In Chinese companies wide array of tests are implemented within selection procedure. These tests mainly represent technology tests, problem solving tests, English proficiency tests, etc. Aptitude or psychological testing does not hold significance in Chinese firms because it eventually results into loss of potential candidates. The basic concepts are given more importance in Chinese firms rather than exploring wider knowledge base. On the other hand, skills are mostly analyzed by Chinese firms since it forms the basis of employee growth and productivity. In local markets of China skills are tested but in international markets other factors are emphasized like personality management, motivation, attitude, psychometric testing, etc. Behavioural events are also encouraged in Chinese firms. Appropriate employees are selected with the support of behavioural events like simulation exercises, leaderless group discussion or interactive role play. These approaches clearly indicate that collectivism is a prominent cultural dimension in China in comparison to individualistic approach. Excellent relationship with employees is the major area of concern for all Chinese organizations (Kiessling and Harvey, 2005). Team work is given more preference in relation to individual interests or goals. It can be stated that China previously had followed autocratic approach where people were ruled by a superior. However this trend is altered in present scenario and democratic approach is given more importance. Chinese firms believe in selecting those individuals who have common knowledge, skills, etc., so as to reduce scope for any organizational conflict. Group discussion without a leader is an effective technique implemented in selection process of China in order to analyze values possessed by candidate to perform as a team. On the contrary, selection process of Australia is distinguishable from that of China. Selection techniques implemented in Australia is divided into three segments like interview, tests and reference checks. Employment interview is a common approach followed in Australian firms (Noe, 2006). Selection interviews are strongly aligned with new methods and technologies. Non-directive interview is usually exhibited by firms based in Australia. This form of non-directive interview enables candidates to carry forward with their discussion. Structured interviews are adapted in certain scenarios. However mostly all Australia firms are inclined towards non-directive interviews since it provides flexibility to candidates to come across with their innovative ideas. Tests are also a part of selection procedure and in Australia abilities are characterised by level of job understanding. This understanding helps to determine dedication of candidates towards a specific job role. National culture of Australia and China are totally different. In Australia, importance is given to individual skills since factor of power distance is high in this country. On the contrary, low power distance in China, influences firms to emphasize on teamwork. Knowledge tests which do not hold significance for Chinese firms is of great value to Australian firms (Peppas, Peppas and Jin, 2001). This is simply because of evaluating potential of candidates. Managers of different department contribute their effective ideas in order to structure such selection tests. Reference checks are a common factor present in selection process of all Australian firms. Australians adapt egalitarian approach within workplace environment. This approach is clearly reflected in its reference check process where proper background verification is exhibited by a firm. Applicant’s merits are thoroughly analyzed by firms by performing reference checks. Physical examination is also encompassed in selection process since it is a way to evaluate efficiency level of applicants (Scullion, Collings and Caligiuri, 2010). Relationship building was a vital factor in national culture of China but it is not an important component for Australia. In Australia, cultural aspect is all about enhancing productivity rather than focusing on relationship building. Power distance factor is more in Australia and this reduces scope for forming effective relationships. United Kingdom is a hub for many multinational enterprises. These enterprises usually design a selection process to choose best candidates most suitable for a job position. In United Kingdom, cultural aspect outlines collective work to accomplish common goals and set higher targets. These performance standards are set by employee’s performance and it becomes responsibility of management to develop necessary skills within team members (Rollinson and Broadfield, 2002). According to Schwartz’s cultural dimension framework, there are two dimensions which are aligned with national culture of United Kingdom. These dimensions are universalism and achievement. The cultural aspect of United Kingdom states that individual should always be goal oriented and achieve higher standards. There selection process is not about just team work or individuals’ potential unlike China and Australia, but it comprises of setting forth future leaders for the organization (Schwartz, 2006). Selection process in United Kingdom includes aptitude testing, group discussion, presentation, role play and interview. In all these phases, focus is on identifying exceptional quality possessed by individuals. Team work is also an important factor but capabilities of individual workers are firstly judged so that they are able to work as a team. On the other hand, majority UK based firms emphasize on determining whether candidates are able to solve any specific problem given to them (Schaubroeck and Lam, 2002). These problems can be associated with industrial changes or organizational changes. It helps employers to identify potential of applicants. Job opportunities are easily grabbed by applicants but management usually implement proper selection strategies to choose suitable candidates. UK based firms provide flexibility to employees in terms of contributing their productive ideas. The three selection process differs due to differences prevalent in natural cultural aspects. Conclusion This study has clearly highlighted impact of national culture on organizational selection process. Cultural dimensions usually change from one country to another. It can be stated that selection process is an essential aspect in overall human resource management policy. This process supports an organization to hire best candidates who can improve upon organizational productivity. The level of organizational performance usually differs across United Kingdom, China and Australia. In United Kingdom, focus is on achievement and setting high standards in global platform. On the other hand, Australian cultural aspect denotes individualism and increased power distance factor. China has a unique national culture where crucial decisions are undertaken by management but collectivism is maintained throughout the country. China based firms basically select those individuals who share common knowledge, skills and interests. There are different techniques involved in selection process across these three countries. These differences result due to respective beliefs or attitudes. References Aycan, Z., 2005. The interplay between cultural and institutional/structural contingencies in human resource management practices. 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