International and Comparative Human Resource Management - Coursework Example

International and Comparative Human Resource Management Student’s Name: Institution: Date: Table of Contents Table of Contents 2 Introduction 3 Internationalisation of HRM 3 Coordination and Engagement 6 Knowledge and Skills Transfer 9 Performance and Compensation Systems 13 Conclusion 16 References 17 International and Comparative Human Resource Management Introduction There are many firms which have subsidiaries in different countries. International human resource management comprises various principles which determine the manner in which multinational firms carry out their operations in various regions. Therefore, this requires multinational corporations to understand the manner in which their employees based in different geographical regions can be motivated to attain positive results in their workstations. Transnational firms also have to be aware of legal issues which are enforced in territories they operate from to ensure their human resource practices do not violate the law (Lengnick- Hall et al. 2009). Additionally, a firm has to consider cultural factors that have an impact on labour practices in particular regions. This paper will discuss various perspectives that affect the manner in which HRM is applied in different companies that have operations in different parts of the globe. Internationalisation of HRM Human resource management involves the decision making processes that have an impact on the way a firm relates with its employees. Therefore, workers of a particular firm are regarded as the most important resource that determines whether a firm attains the long term objectives it has set as it operates in its chosen industry. All personnel and labour functions a firm gets involved in must be aligned to its long term organisational strategy to ensure all stakeholders understand their contribution to crucial processes (Lengnick- Hall et al. 2009) . In the long run, a firm needs to find out how its corporate culture, size and goals can be combined with its internal human resource policies to make its employees more satisfied with their jobs. Corporate culture in transnational firms gives them an identity that helps them take advantage of various business opportunities in different geographical regions. Therefore, such firms are able to shape their own destiny by putting in place appropriate human resource policies to help them achieve their goals easily. There are various forces which impact on international HRM practices in business organisations. The increase in global competition and free movement of labour across geographical borders has made it necessary for business firms to be more open to changes that can make them improve their performance. In essence, MNC’s are compelled to improve their focus in specific industries they are operating to enable them conduct their operations without any disruptions. Business managers need to have knowledge about labour practices observed in various territories their organisations operate to help them make good business decisions (Schuler 2000). This knowledge is important because it helps business firms to improve their own labour policies to ensure they conform to regulatory requirements enforced in various regions. Therefore, for a firm to succeed in its international business operations, it needs to be more adept in dealing with different business challenges that it is likely to face in its operations abroad. The increase in globalisation has made more business firms to expand their operations to unexploited markets to increase their revenues. As a result, the desire for growth has made some firms to overlook important components of their operations as they strive to increase their global market share (Schuler 2000). Business firms are now able to use technological systems to monitor and coordinate functions in their subsidiaries in different locations. However, the way business firms use these technological systems impact on their overall operations. The internalisation of business operations favours companies that are more dynamic which are willing to change how they conduct their business operations to boost their revenues. Large firms need to adopt appropriate policies that encourage employees to have favourable perceptions towards workplace changes. They should also do more to encourage their workers to work in fast paced environments to improve their technical skills. Recruitment and retention practices that are applied in multinational organisations have to reflect their diverse employee backgrounds. For instance, Asian business practices differ greatly from those practiced in western business settings and business firms need to be aware about these differences to help them implement effective HR policies. Socio economic systems that exist in major Asian economies such as China, India, Malaysia and South Korea, are heavily influenced by local cultures (Schuler 2000). Therefore, firms that have operations in such countries need to familiarise themselves with local hiring practices to enable them attract qualified candidates with the right skills and competencies. This approach helps such firms to create high quality internal systems that identify and correct any flaws in the recruitment of staff in such regions. In the long run, a firm is able to review the manner in which it relates with its employees and its key stakeholders. Retention practices in multinational organisations cannot be successful if managers do not have a special understanding about the talents of employees working under them. These firms need to hire managers that understand the social, economic and legal environments that are practiced in specific regions their firms operate. As a result, such managers will be able to make important decisions that conform to their firms’ long term strategies within locations they are based (Treven 2001). This understanding is important because it helps business firms to come up with effective localisation processes to help them adapt to unique conditions found in specific locations where their operations are based. In essence, firms that adapt to local conditions are able to retain their employees because they know how to satisfy their personal as well as their professional needs. They are able to understand the nature of various labour markets and how they are structured to suit their operations. International business firms have to understand whether standardisation of HRM practices in all their units will help them achieve their goals in the long term. Managers need to find out how standardisation processes that need to be implemented will be of benefit to their firms in the long run. However, even though standardisation offers business firms opportunities to make their operations in different locations more uniform, managers must ensure that all operational processes adapt to local industry environments (Treven 2001). Standardisation practices that adapt to local industry conditions help firms to increase their market penetration rates because they are able to reach out to a wide variety of consumers. This approach helps a firm to identify specific advantages it is likely to obtain by operating in a particular country to help it attain the long term goals it has set for itself. Coordination and Engagement Transnational application of HRM cannot succeed without effective coordination and engagement. Multinational organisations need to implement effective communication policies that enable all employees in diverse global regions to exchange ideas. This will enable all stakeholders to understand specific policies that are being implemented and their significance to long term business operations. Consequently, senior managers must have the ability to organise different activities in all subsidiaries to ensure all processes run smoothly without any disruptions. In the long run, such approaches help multinational business firms to engage with all stakeholders spread out in different branches to find out their concerns and expectations (Treven 2001). Additionally, a firm is able to mobilise and plan ahead to deal with various challenges it faces in its operations in different countries. This makes it possible for a firm to identify and eliminate risks before they happen to boost its overall performance. Global business systems are complex and require a firm to find out specific areas of its operations in which it can gain an advantage over its competitors. Therefore, a firm has to understand values, expectations and behaviours that its employees in different locations cherish to come up with an appropriate internal HR policy. This approach helps a firm to determine the direction it intends to take in the medium term as shown through the nature of operations it engages in (Pettigrew, Thomas & Whittington 2002). As a result, a firm is able to review different operational tasks that need to be streamlined to offer it a stronger advantage over its competitors in the same industry. In addition to this, a firm has to find out if its employees need to acquire new skills to make them well prepared to perform new tasks in a fast paced dynamic working environment. For this to succeed, senior managers must give managers heading different country branches more freedom to make decisions that are beneficial to the operations of their units. The chain of command structure in an organisation defines the nature of responsibilities which are to be performed by different stakeholders in an organisation. It is prudent that a firm adopts an organisational structure that is beneficial to its operations to ensure that all employees are able to perform their duties without any difficulties. It is important for business firms to create flexible organisational structures that ensure decisions are made quickly to save time and costs (Pettigrew, Thomas & Whittington 2002). Division of labour policies need to be clearly spelt out to ensure middle managers are able to perform their duties with little or no interference from other senior managers. However, all managers must follow and respond to various systems of accountability put in place to make them more diligent. Therefore, organisational structures adopted by transnational firms should be well suited to their operations to enable their employees carry out their duties without unnecessary disruptions. Uniform communication and accountability procedures in a large transnational firm ensure that all employees understand what is expected of them as they perform their duties. As a result, all employees are able to follow laid down rules easily without any problem. Uniform moral codes of conduct enable an organisation to enforce high standards of discipline in its employees (Pettigrew, Thomas & Whittington 2002). They are able to deliver high quality results in different activities they are engaged in because they understand the importance of being diligent in their duties. A firm may either choose authoritarianism or collaborative management practices to make its employees more responsible in their duties. However, a firm should ensure that its managers are able to stay in control over crucial operational processes. They should be allowed to exercise their authority in a manner that brings positive long term results to the organisation. It is important for firms to have constant engagement with their employees to find out if they are satisfied with their working conditions. Job satisfaction has a big impact on productivity and turnover in any organisation. Multinational firms need to encourage their middle managers in different locations to interact with their subordinates to find out more issues about their lifestyles, social backgrounds and competencies (Price 2007). Therefore, all workers need to have effective channels through which they can communicate their dissatisfaction with different issues that face them in their work environments. This approach makes it possible for a firm to show its workers that it understands their concerns and it is working hard to resolve them to ensure normal work processes go on as scheduled. As a result, employees are able to develop important relationships with their seniors and this helps a firm to improve its performance. Labour and union issues in different areas have an impact on the manner in which human capital in different organisations is utilised. Therefore, business firms must understand how to handle various labour issues that may arise in different regions they operate from to resolve conflicts quickly without wasting time. Transnational firms also need to find out concessions they need to make as they negotiate with different industrial unions in locations their operations are based (Price 2007). All labour union transactions should conform to labour regulations that are enforced in different territories where there operations are based. Managers need to find out the average wage rates that are paid out to workers in industries their firms are operating in to ensure their firms do not incur a lot of costs. At the same time, they also need to carry out comparative analysis with other regions to ensure that their employees are satisfied with their working conditions. Knowledge and Skills Transfer Transnational firms need to identify the exact skills and competencies that are crucial for advancing their operations in different regions they are operating in. In some instances, multinational firms are forced to hire expatriates to work in foreign destinations to handle various specialised tasks in their new working environments. It is important for such firms to find out the costs they are likely to incur in developing their own human intellectual capital to help them achieve their long term objectives in specific industries they are operating in. This approach helps such firms to use proactive knowledge management processes to ensure that the employees they hire are able to perform the tasks they are assigned (Price 2007). In essence, firm needs to find out the exact intellectual capacity of its employees to help it determine if they are able to sustain high quality performance in the long term. Some multinational firms have been forced to develop training programs to ensure newly hired employees are given the required sets of skills to help them perform their duties more effectively. Transnational firms need to understand the industrial environments they are operating in to find out the suitable modes of training they can adopt to transfer skills and knowledge to newly hired recruits. Training programs that are implemented should be well designed to reflect the needs of targeted learners to make them well prepared to deal with different issues they are likely to face in their respective workstations. It is important for business firms to have training programs that are designed to deal with regional factors that have an impact on their operations (Price 2007). Such programs makes workers adequately equipped with competitive skills that help a firm register positive results in a particular industry. The manner in which knowledge is translated between individuals and their organisational units needs to be clearly defined by the management of a transnational organisation. Sharing of knowledge in different units spread out across diverse geographical regions by all employees should be given more emphasis. Such an approach makes it possible for workers to collaborate on various tasks within the organisation and this makes them more willing to make sacrifices to achieve positive output (Price 2007). There are different determinants that influence employees to be willing to share their knowledge and skills with other employees they work with. The working processes in an organisation must be structured in a way that encourages employees to share ideas with one another regarding various work processes. This approach makes employees more critical about their performance and overall dedication to the firm they are working for. It is also important for business organisations to encourage their employees to form teams to brainstorm and solve different types of problems they face in their workstations. Transnational firms that encourage their employees to form teams are more likely to benefit from improved innovation processes (Earley & Gibson 2002). In addition to this, they are able to benefit from a stronger unity of purpose because employees willing to collaborate form strong relationships with each other at the workplace. Strong relationships in an organisational setup shape different employee personalities aligning them to the long term expectations of an organisation. Business firms that have strong collaborative work systems are likely to benefit from their employees’ critical thinking skills in the long run. As a result, such firms are likely to retain their employees for longer periods of time and this helps to boost their competitiveness in industries they are operating in. Some firms opt for an ethnocentric approach when transferring knowledge and skills to their subsidiaries located in other global regions. Such firms hire managerial employees that are given the responsibility to manage all affairs in their respective subsidiaries on their behalf without making any changes to their overall policies. The ethnocentric approach to knowledge transfer does not always result in positive outcomes because some firms may not be aware of the needs and expectations of employees in a specific subsidiary. In many instances, employees who are seconded from headquarters to work in subsidiary units may find it difficult to delegate duties and responsibilities to their subordinates (Earley & Gibson 2002). The failure by such managers to take time to understand how employees in such environments apply their skills at the workplace may result in a lot of misunderstandings. Therefore business firms need to realise that they cannot use top-down knowledge transfer approaches to train their employees without taking time to find out how they are going to respond to such initiatives. Every subsidiary needs to be given an opportunity to implement organisational learning and knowledge transfer procedures which conform to their local environments. For this approach to succeed, a firm needs to hire managers who come from diverse geographical, social and cultural backgrounds. Such employees are able to understand the cultural and business practices of employees from particular countries and how they can be handled to enable the firm attain positive output (Earley & Gibson 2002). Therefore, the knowledge sharing systems adopted are able to include other factors in the local environment where a firm operates to help workers acquire specialised skills. It is also important for a firm to localise its training programs to retain its workers for longer periods of time because they are likely to be more satisfied with the manner they are treated by their managers. In the long term, a firm is able to develop a competent pool of employees who are capable of using their skills to solve different problems in their workstations. Managers in a firm need to be well trained about cross cultural management practices to make them better prepared to organise different work activities in different locations. Greater mobility of labour within a firm across different subsidiaries strengthens loyalty and cohesion in a firm. As a result, this makes it possible for employees working in a firm to develop their skills and experiences after getting exposed to a wide variety of working systems (Wocke, Bendixen & Rijamampianina 2007). This exposure makes them understand different types of organisational behaviour that are practiced in various locations and how they impact on the overall performance of the firm they work for. As a result, a firm is able to develop a pool of internationally competent workers who are capable of working in diverse geographical locations. Such employees are open minded and willing to learn new ideas to help them improve the manner in which they perform their duties. Performance and Compensation Systems An effective transnational firm needs to have effective methods through which it can assess the performance of all its employees and subsidiaries within specific timelines. Therefore, it needs to put in place effective measurement procedures to assess the output of its managers and employees, to find out if any improvements need to be made. The quality and quantity of output attained by employees should be assessed in comparison with existing resources to find out if they are well facilitated to perform their responsibilities. Assessing the performance of all employees in a transnational firm is a complex undertaking that requires careful planning (Wocke, Bendixen & Rijamampianina 2007). Consequently, all performance assessment procedures must consider the situations workers are working under. This makes it possible for a firm to find out the nature of tasks employees are required to perform and the resources they are given to perform them. A consistent performance evaluation mechanism which is not biased helps to strengthen employees’ trust in an organisation. They are likely to be encouraged to work harder to achieve different rewards in the firm they are working in. In some countries such as Japan and India, public criticism of an employee is taken as a harsh reprimand that makes the target of such public criticism lose face in public. This differs greatly with the western perspective where public criticism is not taken negatively by employees (Wocke, Bendixen & Rijamampianina 2007). Therefore, even though standardised benchmarks should be used to evaluate performance in a specific organisation, cultural and social backgrounds of employees need to be considered. Effective performance reviews should not create discontent in employees because they may feel that the organisation they are working for does not appreciate their efforts. In the long term, this may have a negative effect on their morale. Performance related bonuses and rewards must be related to the specific output achieved by each subsidiary unit to bring about uniformity in the manner in which various employees are rewarded for achieving positive results. Other additional non –financial benefits need to be given to employees in a transparent manner to avoid any form of bias that is likely to arise (Thite, Wilkinson & Shah 2012). The benefits offered to employees should be meaningful to the lifestyles they are leading to help them become more self-sufficient in their duties. Career advancement opportunities that arise in a firm should be offered to employees that have demonstrated their commitment and willingness to increase their knowledge in different organisational processes. This ensures that workers are more motivated to attain positive results in their workstations to help them advance their careers in the organisation. Compensation and payment schemes in a transnational firm must take note of different levels of skills and training of each employee. For instance, the salary of a manager has to be higher than that of an ordinary employee because by default, a manager performs more responsibilities at the workplace. The payroll is one of the largest fixed costs in any organisation, because employees’ salaries and wages have to be paid irrespective of its financial performance at any given period (Thite, Wilkinson & Shah 2012). Employees who are transferred from one location to another to work as expatriates are paid higher than local employees due to high costs of living and other considerations. Consequently, the payment structure in a firm also has to look at local labour market conditions to ensure that wages paid out are uniform with what other firms that are operating in the same industry are paying their workers in similar work grades. In any particular region, the cost of living, availability of qualified expertise, labour regulations and the average wage rates determine the salaries workers in a particular firm are paid. As a result, a transnational firm may be compelled to hire expatriates to work in foreign regions that lack qualified personnel to execute its functions. Many transnational firms have specific policies that outline how their expatriate personnel are to be compensated and specific benefits which they are eligible for (Theriou & Chatzoglou 2008). Some multinational firms offer high wages in comparison to other firms operating in different geographical regions to retain their most talented employees. In many instances, research and development employees that are charged with developing innovative products and processes are compensated highly than manufacturing employees. They are rewarded highly to encourage them to make sacrifices to enable a firm register positive performance in its operations. In some countries, labour unions have a lot of influence and they determine the amounts of wages and benefits workers in different industries are supposed to be paid. It is important for a firm to find out how it can deal with workers that are members of various trade unions. The agreements unions have with different firms in an industry are protected by law and as such, it is important for a multinational firm to familiarise itself with such agreements. Employers need to understand their obligations when dealing with such employees to protect themselves from lawsuits and industrial action by employees and their union representatives. Non payment benefits in form of annual leave, medical cover, commuter allowances and housing schemes also need to be considered by a multinational organisation (Theriou & Chatzoglou, 2008). Therefore, business firms need to offer appropriate contracts to employees which are in line with labour practices as mandated by law in regions they operate. Conclusion International human resource management involves a wide range of concepts. Every firm needs to understand the nature of the industry it operates in and geographical factors that have an impact on its operations in different regions. A multinational business firm also needs to find out the nature of skills and resources it needs to ensure that all its operations are productive and bring positive outcomes in the long run. This helps a firm to develop appropriate workplace policies which take note of workers’ backgrounds and competencies in different regions where its operations are based. References Earley, PC & Gibson, CB 2002, Multinational work teams: a new perspective, Lawrence Erlbaum Associates, New Jersey. Lengnick-Hall, ML, Lengnick-Hall, CA , Andrade, LS & Drake, B 2009, ‘Strategic human resource management: the evolution of the field’, Human Resource Management Review, vol. 19, pp. 64-85. 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Wocke, A, Bendixen, M & Rijamampianina, R 2007, ‘Building flexibility into multi-national human resource strategy: a study of four South African multi- national enterprises’, International Journal of Human Resource Management, vol. 18, no. 5, pp. 829−844. Read More