Role and Effectiveness of HRM Policies and Practices - Assignment Example

International Human Resource Management Table of Contents Box A: Question 3 Introduction 3 Discussion 3 Conclusion 8 References 9 Box B: Question 311 Introduction 11 Discussion 11 Direct Compensation Process 12 Indirect Compensation Process 13 Conclusion 16 References 17 Box A: Question 1 This question will discuss how national government influences role and effectiveness of HRM policies and practices. Introduction Human Resource Management refers to the activities that are undertaken by organizations in order to utilize the human resources effectively. Human Resource Management basically includes staffing, performance management, human resource planning, training and development and benefits and compensation. In order to operate in an international environment, the human resource department of different companies must engage themselves in essential activities, such as international relocation and orientation, international taxation, host-government relations and language translations. The governments of different nations work greatly on the effectiveness of international human resource management policies. The inter-relation between industrial relations and human resource management has been profound in the industrial sector of every country. The governments of different countries have played pivotal role in order to incorporate interventions in the industries with respect to human resource management. National culture has a direct impact on the human resource management. Human resource management has not only been essential for preservation of employee’s interest but also for the benefit of consumers at a global level. The study illustrates about the influence of governments during successful implementation of international HR management practices and policies. Discussion This part will discuss about several aspects regarding HRM practices. Leadership commitment has been found to be one of the most essential steps towards the integration of human resource and practices. Several staffing reports of the past signify that government effectiveness has been one of the most important ingredients for the development of human resource policies in several nations. The Sri Lankan constitutional amendment in the year 2001, illustrates that independent public service commission, necessitates the commitment of senior officials as well as politicians. Based on a staffing study obtained from Swaziland, it is clear that realistic commitment is an essential form of human resource management practice. The Governments of different Asian countries have also played crucial roles, with respect to the establishment of human resource policies and practices in different nations. The governments of the Asian countries have developed the HRM practices by influencing union organizations in the industries (Soliman, 2009). This kind of approach helped top enhance the position of the employees and the industries were also benefited because they did not have to address individual queries or issues. The unions were responsible for answering the employees and they also highlighted complex issues to the management of the organizations. The government’s influences in the Asian countries were highly appreciated by the people as well as the organizations because of the interventions incorporated in the labour market were pervasive. According to Maruyama, the government’s control in the Industrial relations has been strongest in countries, such as Singapore, India, China, Germany, and Sri Lanka etc (Maruyama, 2004, p.27). It has been observed the strategies implemented by the State have been the strongest policies or practices in the international market of human resource practices. The Japanese and Korean market have been less influenced by the international marketing strategies. However, the government policies and regulations have been very effective in the human resource management strategies. The national governments of the countries have been able to establish sustainability by incorporating several laws in order to make human resource practices effective (Lu, 2008, p.12). The Industrial relations and human resource management in the Asian countries have been hybrid, due to introduction of Western concepts in the traditional Eastern markets. Freedom of association, trade unionism, and collective bargaining has been some important implications in the Asian business culture (Laurent, 2006). The governments of different Asian countries have worked in accordance with the Western companies in order to increase the foreign investments in the countries. Furthermore, the employment opportunities for the local population have been an important feature that has encouraged the foreign investments in the Asian countries. There are several policies that protect the rights of the employees and preserve the interest of the organizations. There are mainly three models that illustrate the influence of governments to that of human resource management policies and practices. First of all, the Appelbaum model provides evidence about the relationship between the governments of different nations and the human resource management practices. The Appelbaum model has been divided into three different boxes. The first box represents the high performance work systems and includes opportunity, motivation and ability to participate in the human resource management strategies. According to Bass, the second box of the model includes effective discretion effort in order to enhance human resource practices (Bass, 2001, p.11). The third box represents the firms’ performance after the incorporation of the organizational policies. It also signifies the output against the human research strategies that are implemented in the organization. Secondly, Becker’s model addresses the design of a human resource management system efficiently. Becker’s model includes seven different boxes. The design of Necker’s model has been constructed on a linear platform and it signifies the impact of human resource management practices on the society. The model also illustrates the government’s influence in the strategically approaches. According to Jones, the initial box of the Becker’s model contains information about business and strategic initiatives. The second box of the model includes information related to the design of human resource management system (Jones, 1999, p.8). The third box describes about the employee skills, design of the work procedures and the employee motivation strategies. The fourth box of the model includes information related to operating procedures of an organization. It also signifies the impact of the government policies on the management of human resource strategies. The fifth box contains information about productivity and creative discretionary efforts. The sixth box is very important for organizations because it contains information related to profitability and growth of organizations. The seventh box includes information about the market value of the strategic incorporations made by the organizations. The Becker’s model is an essential tool that signifies the influence of governments in human resource management practices. The third important model is the Guest’s model, which links human resource management and performance of an organization. Guest’s model has been constructed using six boxes, which directly relates to the effects of human resource management practices. The first box provides information about the differentiation strategies and cost quality of labours as well as production. The second box includes the human resource management practices, such as the training processes, selection, appraisals, rewards, involvement, job design, security and status of the employees (Gupta, 2004). The third box includes information related to the human resource management outcomes i.e. the quality measures, commitment to work and flexibility of the employees in the work culture. The fourth box includes relevant information regarding the behaviour outcomes, as a result of the human resource management practices. It includes motivation, effort, involvement, cooperation and organizational citizenship characteristics. The fifth box is very essential because it contains information related to performance outcomes (Dunning, 2009). The productivity, innovation and quality are the main parameters that signify high performance of employees. On the other hand, absence, turnover and labour are the parameters that signify the low performance of the organization as well as the employees. Finally, the financial outcomes and profitability of the organization is illustrated in the sixth box of the Guest’s model (Guest, 2007). The above models are very important part of human resource management practices because they explain about the role and effectiveness of government regulated policies on the human resource management practices implemented by the organizations. In order to understand the role of government intervened policies, it is essential to study the models thoroughly. The three models discussed above have been constructed to understand the relationship between the industry regulations and the effects of the government policies on the human resource management practices (Gephart, 2004). Human resource management policies and practices are not only developed in organizations based on their own requirements. The governments of different nations have a standard benchmark, based on which the organizations have constructed their organizational policies. The terms and conditions required to be adhered, are implemented for both, employers and employees. According to Eisenhardt, the government interventions have been profound because they have helped to organize a systematic work environment for the employees (Eisenhardt, 2009, p.16). The role of practices on the performance of organizations has been evident. It has been observed that human resource management practices are informal approaches used to manage people. The management of employees in an organization is done in order to enhance productivity and reduce the chances of conflicts in the organizations. In the contemporary era, implementation of labour union is restricted in most of the organizations because it increases the chances of conflicts and strikes (Fairclough, 2005). The companies prefer to utilize the productivity of the employees and ensure to address employee issues directly. Conclusion Based on the above discussion, it is possible to state that the role and effectiveness of national governments have been very essential during the implementation of human resource management policies and practices. The industrial relations and leadership values have played crucial role in the development of human resource management practices. The Appelbaum model, Becker model and Guest model are the three important approaches that prove the influence the government roles towards the human resource management practices. In the 21st century, several researchers and theorists have been working on the issues related to human resource practices and its implementations at the organizational level. Based on the studies obtained from the human capital theories and the models discussed above, it can be stated that the governments influence and effectiveness has been optimum in the implementation of human resource management policies and practices. References Bass, B., 2001. From transactional to transformational leadership. Organizational dynamics, 14(1), p.11. Dunning, J., 2009. Location and the multinational enterprise. Journal of international business studies, 19(1), p.12. Eisenhardt, K., 2009. Agency theory: An assessment and review. Academy of management review, 28(3), p.16. Fairclough, N., 2005. Peripheral vision disclosure analysis in organization studies. Organization studies, 8(3), p.24. Gephart, R., 2004. Qualitative research and the academy of management journal. Academy of management journal, 3(1), p.9. Guest, D. E., 2007. Human resource management and performance: A review and research agenda. International journal of human resource management, 12(2), p.19. Gupta, A., 2004. Organizing for knowledge flows within MNCs. International business review, 4(2), p.31. Jones, P., 1999. Employment relations, efficiency and effectiveness. International journal of employment studies, 54(3), p.8. Laurent., A., 2006. The cross-culture puzzle of international human resource management. Human resource management, 17(1), p.5 Lu, Y., 2008. Knowledge management and innovation strategy. Asia pacific journal of management, 15(3), p.12. Maruyama, M., 2004. Alternative concepts of management. Asia pacific journal of management, 11(1), p.27. Soliman, F., 2009. Modelling the appraisal of quality management programs. Employment relations’ record. 18(2), p.l7. Box B: Question 3 This question will discuss how the consistency of international compensation across international locations can be achieved when local environments differ. Introduction Increase of globalization has a discreet effect on the needs for organizations to expand and develop international compensation programs. International compensation literature mainly emphasizes on the intellectual capital. In the modern world, the management of the organizations must emphasize on the retention of human resource systems. Human Resource management can be considered as one of the most important and critical department of an organization to handle. There are several important elements and sub-elements within the developed human resource policies and practices. It is important for the multinational organizations to monitor and evaluate each and every developed and practices human resource policies in the global operating markets. Internationalization has created great amount of pressure for the consistency of compensation strategies. The convergence towards consistency is basically at the core or philosophical levels. It has been observed in the past that the U.S. companies relied on salaries on a greater extent compared to that of consistency. However, the Asian companies emphasize more on consistency and less on the salaries. This essay highlights the factors by which international compensation can be achieved even at international levels. Discussion It is true that global business environment has become highly competitive as well as saturated. Therefore, the organizations are trying to develop and implement unique human resource policies in the business operation process in order to gain competitive advantages over the competitors. Compensation strategy and practices is an effective and integral part of the human resource management process of the multinational corporations. The organizations generally develop an overall and consistent compensation policy of the employees. On the other hand, it is true that the multinational corporations have to consider that the local market environment generally differs from other international market places. The compensation policy structure and practices also differ from each other due to the different policy development process and compensation practices in different foreign markets (Tung, 1998). Each and every multinational corporation has to consider the developed industry standard human resource management and employee compensation policy in the different global market places, in which the workplace culture, tradition of the country and management approaches of organization in different global market places are considered. It is true that the consistency of international compensation across international locations can be achieved when the local environment of a host country usually differs from the local environment of home country (Tripples, 2006). Compensation process can be divided into two aspects, such as indirect compensation process and direct compensation process. It is highly important for the multinational organizations to change the indirect international compensation process in different market places comparing to the direct compensation process. Both of these compensation processes regarding the compensation policy and practices of multinational organizations in different market places are discussed below. Direct Compensation Process Direct compensation process of employees generally consists of salaries, monetary compensations, profit sharing of the organizations; incentives wage growth rate or increment after the performance evaluation. The multinational organizations can maintain similar types of compensation development process and practices in different countries as the organization has to maintain its own organizational culture and developed global industry standard. It can be stated that the mentioned aspects of the direct compensation policy does not change much in different countries. According to Vahlne, the organizations have to adjust with few aspects and currency of the country to develop and maintain a consistent compensation policy and practice development process in different global market places (Vahlne, 2006, p.5). If the organization fails to maintain the similarity in following the developed human resource management policy by the organization itself then it can hamper the stakeholder engagement aspect that may affect overall business performance. Direct compensation process in several countries has high similarity and limited differences. Therefore, it can be stated that the management of an organization has to adjust minimum aspects in the direct compensation process in home and host countries’ markets. Indirect Compensation Process Indirect compensation process can be considered as one of the important and critical part of the compensation policy of an organization in global market places. Indirect compensation elements include, earned leaves, sick leaves, performance evaluations of employees, accommodation facilities, office transportation facilities, holiday homes and other motivational aspects (Wood and Smith, 2004). It is true that employee compensation plays an important role in the effectiveness of human resource management process. Therefore, several multinational organizations are trying to develop and ensure effective indirect compensation process in order to motivate employees as the compensation of employees can be considered as one of the effective employee motivational tools. The indirect compensation process needs to be changed by the multinational organizations in different countries. The leave structure, official holidays, working hours and employment regulations generally differ from a country to another country. Therefore, the multinational organizations need to consider these things in order to maintain consistency in the global market places in spite of differentiation of local environment. The organizations need to consider local culture and tradition of different countries and market places before developing any compensation plan as it will help the organization to maintain consistency in the international compensation practices. According to Tieney, different employment compensation regulation in global market places can hamper overall human resource management practices of an organization (Tieney, 2013, p.18). Therefore, it can be proved and stated that both the direct and indirect compensation policy needs to consider the culture and localization of host countries in order to maintain consistency in the overall human resource management process. Compensation management is a representation between an employee and an organization. The compensation issue has been confidential and it has been governed by individual employer’s choice and preferences (Dessler, 2005). In the modern competitive world the compensation issues have been transparent. Most of the organizations have implemented policies and regulations that help the employees to updat5e themselves with the organizational developments. Compensations are believed to be fair and genuine, when it comes to international standards (Thyer, 2010). According to Strinati, compensation management includes timely payments as well as employer’s compensations, such as after retirement benefits or health insurance benefits (Strinati, 2004, p.98). Most of the organizations in the modern world have adopted policies, wherein they provide benefits to the employees directly over the salaries paid to them. Several companies of United States of America and United Kingdom have outsourced their business in order to reduce the investments. The employees of the outsourced businesses basically belong from the host countries. The salaries offered to the employees are based on the economic status of the host countries. In order to incorporate ethical approaches in the human resource management practices, the companies of US and UK have initiated programs to provide health insurance benefits to the employees in the host countries. According to Rutherford, this kind of approach can definitely be helpful for the host countries as well as the employees of the organizations (Rutherford, 1998, p.72). Indirect compensation processes have been very profound in the modern world. There are several instances, wherein organizations have initiated to pay against the indirect compensations (Raisch and Birkinshaw, 2008). It has been observed that the leaves of employees are counted towards payment during employee retirements, resignations or terminations. Most of the employees in the Asian countries have the tendency to preserve their leaves in order to get additional benefits during their payments. Organizations have enabled the employees to keep track of their leaves accurately and the payments are made to the employees based on their unused leaves, apart from the mentioned payments (Storey, 2009). The hospitality industry has been playing a pivotal role with respect to employee compensations at international levels. It has been observed that most of the companies of the hospitality sector have incorporated organizational policies similar to the host countries. For example, Marriot hotel groups have provided sustainability opportunities to the employees in the Asian countries, however in USA, Marriot provides high salaries to employees but the sustainability and growth opportunities are low compared to that of the Asian countries. Global compensation executives have made several attempts to resolve global convergence at a philosophical level (Parvis, 2013). In the contemporary era most of the organizations have incorporated international compensation policies successfully even when there are differences in the local environments of the host countries. Conclusion From the above discussion, it is evident that international employee compensation across international locations has been achieved by organizations significantly. As discussed above, there are majorly two organizational processes with respect to compensation across international locations. Direct compensation process is the method by which companies pay the employees’ salaries against their work. It is basically regarded as the employee’s right to get the salaries. On the other hand indirect compensation process is the method by which organizations pay the employees indirectly, via leaves or health insurances. It has been observed that most of the companies in the modern world have incorporated policies in an ethical manner and adopted both payment processes for their employees. Organizations have to experience several challenges due to the difference in the international policies and laws. However, most of the companies extend their operational procedures to the human resource management practices because it enables to maintain sustainability and profitability. Therefore, it can be stated that international compensation across international locations can be achieved when local environments differ. References Tripples, R., 2006. Contracting: The key to employment relations. International employment relations review, 43(1), p.2. Tung, R., 1998. American expatriated abroad. Journal of world business, 7(1), p.6. Vahlne, J., 2006. Commitment and opportunity development in the internationalization process. Management international review, 14(4), p.5. Parvis, L., 2013. Understanding Cultural Diversity in Today’s Complex World. London: Routledge. Raisch, S., and Birkinshaw, J., 2008. “Organisational ambidexterity: Antecedents, outcomes and moderators”. Journal of management. 34(3), pp. 375-409. Rutherford, J., 1998. Identity: Community, Culture, Difference. London: Lawrence and Wishart. Strinati, D., 2004. An Introduction to Theories of Popular Culture. 2nd ed. London: Routledge. Thyer, B., 2010. Cultural Diversity and Social Work Practice. New York: Charles C Thomas. Tierney, S., 2013. Accommodating Cultural Diversity. London: Ashgate. Wood, A., and Smith, M., 2004. Online Communication: Linking Technology, Identity, & Culture: Linking Technology, Identity, and Culture. London: Routledge. Dessler, G., 2005. Human Resource Management. London: Routledge. Storey, J., 2009. New perspectives on HRM. London: Sage. Read More