The Best Approach to Hiring Managers - Literature review Example

Human Resource Management Report Name: Subject: Institutional Affiliation: Professor: Date: Executive Summary With increasing globalization, more organizations are shifting focus from their traditional home/domestic markets and making forays into foreign markets through foreign subsidiaries. While this is good for business, it presents certain challenges for management when it comes to management of human relations in international markets. This report aims to present recommendations on how SuperMart can achieve success in the human resource management while penetrating the UK market. The report begins by recommending the best approach to hiring managers for the company’s operations in the UK. Secondly, the report presents recommendations on the learning and development resources the company should provide its employees in the UK. Thirdly, the report offers suggestions on how the company can minimize the risk of poor performance. Lastly, the report offers recommendations on how managers can achieve good employment relations in the UK market. This report recommends that the best approach to staffing its UK operations is to adopt a combination of the polycentric and ethnocentric approach to hiring employees. Second, the report recommends that the company should offer cross-cultural training and job specific or technical training as the main learning and development resources for its employees. Third, the report recommends that to reduce the risks of poor performance, the company must come up with a sound international human resource management strategy and implement an appropriate performance management system that takes into consideration cultural differences and geographic dispersion. Lastly, this report recommends that for SuperMart to achieve good employment relations, the company must implement or adopt a flexible employment policy that can adapt to the UK labour laws, regulations and labour market or environment. Approaches to Hiring Managers Managers have a vital role to play in determining the success or failure of a company. Since SuperMart has made a decision to penetrate the UK market, the company has to thoroughly explore various approaches to appointing its managers. The company faces a dilemma on whether to appoint US managers or UK managers, or a mix of both to run the new operations in the UK. According to Tiwari (2013, pp.356), the three approaches to appointing staff in multinational corporations (MNCs) are ethnocentric, polycentric and geocentric approaches. Tiwari (2013, pp.356) has pointed out that a polycentric approach to staffing in multinational corporations is a policy involved in recruiting and promoting staff who are citizens of the host country. On the other hand, the ethnocentric approach is the policy that involves sending staff from the parent or home country to the host country. The geocentric approach to staffing is adopted when a multinational company implements a transnational orientation. In this approach employees are recruited on the basis of their skills and experience regardless of their nationality (Tiwari, 2013, pp.356). In light of these approaches, it is safe to propose that SuperMart cannot adopt a single approach to staffing its UK operations. Therefore, it is recommended that the best approach would be to use a mix of the polycentric and the ethnocentric approaches in varying degrees wherever each one is suitable, and depending on the business environment/climate, as well as the needs of the organization and its potential customers. This mixed approach is also favourable as it will bring diversity into the organization. According to Treven (2001, pp.179), one of the main advantages of the polycentric approach is that it entails low costs when it comes to recruiting and training employees. This approach is also good as it has less problems with regard to employee adjustment and communication because employees come from the same region (Tiwari, 2013, pp.356). In the given scenario, SuperMart can adopt a polycentric approach to hire certain managerial positions. For instance, the company can use this approach when hiring middle-level managers in UK business since middle-level managers often interact with junior employees on a frequent basis at the workplace. Given that the company is expected to employ most of the junior staff from the local labour market, it would be a wise thing to hire middle-level managers from the host country. UK based middle-level managers will also encounter lesser challenges managing junior employees since they come from the same region and share a common culture. Furthermore, UK managers will have a better understanding of local business functionalities since they possess adequate knowledge of the local market. This can be beneficial for the company as it can lead to high returns and better company acceptance in local community. Lastly, appointing local managers will make the company become recognized as a legitimate operator and contributor to the local economy (Treven, 2001, pp.179). SuperMart can also incorporate the ethnocentric approach to staffing in the senior positions of management in the UK market. According to Tiwari (2013, pp.357), one of the advantages of the ethnocentric approach is that it helps to promote a unified culture in the organization. SuperMart can adopt the ethnocentric approach to staffing certain senior management positions with the aim of maintaining cultural similarity with the parent company. The other advantage of adopting the ethnocentric approach in staffing foreign subsidiaries of MNCs is that it helps to ensure the transfer of core competencies (Tiwari, 2013, pp.357). SuperMart can use this include approach in staffing certain management positions with the aim of ensuring the transfer of the company’s management/business practices and values. The company can benefit from incorporating this approach to its staffing policy in the UK market in the sense that it will also permit closer control as well as coordination of its international subsidiaries. Learning and Development Resources the Company should Provide There are certain learning and development needs that SuperMart will have to meet for US managers, UK managers, and the junior staff when entering the UK market. When it comes to the learning and development requirements that SuperMart should provide, the company should place an emphasis on orienting and training its US based managers on how to fit in the UK market. The company will also have to train the UK managers and junior staff that it will hire on SuperMart’s organizational culture, values, and operations. According to Tiwari (2013, pp357), the training and development of expatriates and employees engaged in international business is a crucial factor in determining the performance and quality of human resources in international business. Tiwari (2013, pp.357) has noted that the training should be focused on cross-cultural training, language training, and technical/job specific training. Cross-cultural training should promote an understanding, as well as an appreciation of the host country’s culture. On the other hand, language training should provide the knowledge of the type of language used to communicate in the host country, such as the rules that govern verbal, non-verbal, oral, and written communication in the host country. The fact that every job assignment is distinct means that both employees must be provided with job specific or technical training. This training involves teaching employees how to tackle the specific requirements of a job (Tiwari, 2013, pp.357). However, the most important form of learning and development that the company needs to provide its managers (both US and UK managers) is cross-cultural training as it will affect their working relationships and organizational performance. When it comes to cross-cultural training, Briscoe, Schuler & Tarique (2012, pp.11) prescribed a four-step or four-level approach to training. The first level of training is focused on the impact of differences in culture, and on raising the trainees’ awareness of such variations and how they can affect business outcomes. The second level of training is focused on attitudes and it aims at making the trainee understand how both negative and positive attitudes are formed, as well as how they can influence behaviour. The third level of training is aimed at providing factual knowledge about the host country, while the fourth level of cross-cultural training is aimed at building skills in areas such as language, along with adjustment and adaptation skills (Briscoe et al, 2012, pp.11-12). According to Coorens (2013, pp.31), these pre-departure cross-cultural training activities are largely focused on “soft skills” as well as cross-cultural competencies that the assignee requires in order to perform effectively during the assignment. The content of this training mainly focuses on the cultural background of the assignee, the culture-specific attributes of the host country, the duration of the assignment, the assignee’s level of contact with the host country environment, language skills, communication skills, tolerance for stress, and family situation (Coorens, 2013, pp.31). In light of these cross-cultural training requirements, SuperMart will need to train the US managers that it intends to post in the UK on the cultural differences between the US and the UK, and how these differences can affect business performance. Similarly, the company will have to offer the same training to the UK managers it will hire. However, it is important to acknowledge the fact that while the US and UK cultures are not significantly different, there are some marked differences in social hierarchy and class consciousness, and marked differences differences in language and communication styles, formal working relationships, and the role or status of women in organizations. SuperMart must train both the US managers and the UK managers on these differences since they can have a significant impact on business performance. For instance, Riel (200, pp.1) has noted that the British society is a more hierarchical one, which means that power in business is concentrated in the upper levels and middle-level managers often have little decision making authority. This hierarchial culture produces a more structures business environment and can influence how people act in meetings. The casual nature of the US business environment is less common in the UK (Riel, 2000, pp2). This means that the managers that SuperMart will send to the UK from the US must be taught about such cultural distinctions. The other difference between US and UK culture is the place of women in business in the UK. In the UK there are fewer women executives than in the US (Riel, 2000, pp3). UK managers may therefore be surprised or feel uncomfortable to be headed by a woman if SuperMart decides to appoint women in the top management positions in the UK subsidiary. Reducing the Risk of Poor Performance SuperMart faces certain risks of poor performance when entering the UK market. These risks arise out of the complexities involved in operating in a foreign country and employing staff from different nationalities. According to du Plessis (2010, pp.181), these complexities can be ascribed to six factors. The first factor is that when doing business internationally, there are more human resource activities to perform. This means that in order to operate in international markets, an organization’s human resource department must participate in activities that are not essentially in the domestic environment. Secondly, operating in a foreign market requires a broader perspective as the HR managers are faced with the difficulties of dealing with employees from different nationalities. Thirdly, the complexity of managing human resources in international markets calls for more involvement in the personal lives of employees. Human resource managers have to deal with issues such as housing arrangements, compensation packages and health care internationally (du Plessis, 2010, pp.181). The other factor is attributed to modifications in emphasis as the labour force mix of locals and expatriates varies. Human resource activities change as operations in foreign markets mature. The other factor that is attributed to complexities in international human resource management is risk exposure. The financial and human consequences of failure in the international sphere are more serious that in the domestic arena. The last factor that is ascribed to complexities in operating in foreign markets is that there are broader external influences when operating in international markets. These influences come from the type of government in the host country, the state of the foreign country’s economy, and the accepted procedures and policies in the host country (du Plessis, 2010, pp.181). To reduce the risk of poor performance at SuperMart’s UK subsidiary, the company’s human resource executives must implement a sound international human resource management strategy. The strategy should include the broad activities of international human resource management (IHRM) and encompass all the six activities that form domestic human resource management. According to Gomes (2012, pp.2), the broad activities of international human resource management - procurement, allocation, as well as utilization of human resources – encompass all the activities of domestic HRM. The activities in domestic HRM include planning, hiring employees, training and development, remuneration, performance management, and industrial relations (Gomes, 2012, pp2). SuperMart must ensure that it implements an effective strategy for dealing with issues such as hiring employees, training, remuneration, performance management and labour relations. The company also has to implement an effective performance management system for both expatriates and local employees in the UK market. Lucas, Lupton & Mathieson (2006, pp.185) has suggested that contextual influences function at the organizational level, national level, and the international level and culture is a critical contextual variable that has an influence on the implementation of performance management. Contradictory practices are ascribed to the culture of the country in which the head office is located. Therefore, SuperMart should implement a performance management practice or system that represents a combination of home and host country systems and models. The performance appraisal system must take into account a variety of host-contextual factors such national culture, legal and political systems, economic systems, as well as organization-specific factors like structure, strategy, and the culture of country of origin. However, SuperMart is likely to experience challenges when it comes to implementing an effective performance management system. Lucas et al (2006, pp.185) have also noted that there is a common agreement that performance management gets more complicated with a shift from domestic to international contexts. For example, the location of an expatriate executive in another nation can raise a variety of communication issues concerning how the person gets to tell what is expected of her/him, what targets are appropriate to a particular context, as well as who is responsible for evaluating his/her performance. The matter can be further complicated by if both home and host country managers are involved in the goal setting process yet the manager responsible for performance evaluation is not located locally but in the home country or even another host country. Consequently, the issue of cultural differences and geographical distance increases the problem of providing continuous review and support to expatriates (Lucas et al, 2006, pp.189). In light of these challenges, SuperMart should adopt a different approach to managing performance. Rather than dealing with performance management at the individual level in its UK operations, the company can implement performance management at the team level. This is particularly appropriate due to the complexities of cross-cultural performance assessment. Rather than setting individual goals and targets for managers, the company can set team goals. Furthermore, self-assessment and peer assessment is likely to be more useful, especially since the nature of expatriate assignments often relies on geographically distributed lines of reporting and usually involve as major elements team-work and participation. How to Achieve Good Employee Relations Achieving good employee relations is an important factor of success for any business organization. Given the important nature of maintaining good employee relations, SuperMart will have to implement a strategy that will ensure it achieves good employee relations. According to Leat (2008, pp.16), good employee relations have a direct impact not only on the success of the business, but also on employee and customer satisfaction. Shen & Edwards (2006, pp. 106) have noted that the debate on factors related to international employee relations is in line with the best-fit approach. This approach argues that international human resource management practices and policies are affected by a range of organization-specific and host-contextual factors. As a result, companies that operate in international markets and industrial relations in host countries can interfere with each other to various extents and in a variety of ways (Shen & Edwards, 2006, pp.106). Shen & Edwards (2006, pp.106); Stanton, Burgess, Vo, Edwards, Lewer, Hannif, & Bartman (2009, pp5) have pointed out that an ethnocentric approach to employee relations policy whereby a subsidiary’s policy is directly prescribed by the parent organization is subject to certain restrictions and limitations. To begin with, cultural and institutional variety makes it highly unlikely that a company with foreign subsidiaries will be capable of maintaining a centralized policy of employee relations in all the different countries it operates. Secondly, it is highly questionable if a centralized approach can actually produce the most favourable results. Companies that operate foreign subsidiaries are increasingly recognizing this limitation and admitting that policies concerning employee relations need to be flexible enough to accommodate local requirements (Shen & Edwards, 2006, pp.106; Stanton et al, 2009, pp.106). In light of these findings, the best way for SuperMart to achieve good employee relations is to implement a flexible employee relations policy. The policy must be able to accommodate or adapt to the local conditions in the UK. In particular, the employee relations policy the company should adopt must be in line with UKs labour laws. The policy must be in line with the country’s labour laws with respect to issues such as wages and remuneration, annual leave, sick leave, benefits, off days, minimum wage, the standard working hours per day and overtime, retrenchment, termination of duties, equal employment opportunities, and sexual harassment. References Briscoe, D. Schuler, R. & Tarique, I. 2012. International Human Resource Management: Policies and Practices for Multinational Enterprises. Abingdon: Taylor & Francis. Coorens, A. 2013. Increasing the Effectiveness of International Assignments: Aligning them with the Goals of the Organization and Assignees. Accessed from http://essay.utwente.nl/64098/1/MSc_A._Coorens_Business_Administration_(IM)_public.pdf Du Plessis, A. J. 2010. International Human Resource Management: An Overview of Its Effects on Managers in Global Organizations. Interdisciplinary Journal of Contemporary Research in Business. Vol. 2, No 4. Gomes, S. 2012. International Human Resource Management (IHRM). Chapter-2: Nature and Concepts of IHRM. Accessed from: https://xisspm.files.wordpress.com/2012/02/chap-2-concept-of-ihrm.pdf Leat, M. 2008. Employee Relations. Edinburgh: Edinburgh Business School. Heriot-Watt University. Lucas, R. Lupton, B. & Mathieson, H. 2006. Human Resource Management in an International Context. UK: CIPD. Riel, B. 2000. UK Culture Shock. A Comparison of American and British Styles. Workforce Magazine. 437, pp1-6. Accessed from http://www.bobriel.com/pdf%20files/workforce%20magazine.pdf Shen, J. & Edwards, V. 2006. International Human Resource Management in Chinese Multinationals. Routledge. Stanton, P., Burgess, J., Vo, A., Edwards, T., Lewer, J., Hannif, Z. & Bartman, T. 2009. Employment Relations in MNCs: An Australian Story. Sydney: Association of Industrial Relations Academics in Australia and New Zealand. Tiwari, N. 2013. Managing Human Resources in International Organizations. Global Journal of Management and Business Studies. Vol. 3, No. 4, pp. 356-357. Treven, S. 2001. Human Resource Management in International Organizations. Accessed from https://moj.efst.hr/management/Vol6No1-2-2001/11-Treven.doc Read More