International Human Resource Management Approaches - Coursework Example

International Human Resource Management Name: Course: Tutor: Date: Introduction Globalization is phenomenon that has changed the way people work. Some of the major changes regard the emphasis on competitiveness, diverse workforces, and flexible work. Globalization can, therefore, be viewed as a new theatre in the world development often characterized by escalated competition coupled with a dynamic technological innovation environment (Brewster, 2011). These changes have also laid significant emphasis on the quality of the products as well as customer service. These emphases have enhanced the importance of people management. In order to meet the challenges presented by the intense competition, the organization’s structures and cultures have been changed to decentralization, downsizing, and less hierarchical and bureaucratic nature (Brewster, 2011).. One of the significant developments has been the human resource management practices as the employers struggle with the challenges presented by the competitive economic environment. Thus, many organizations have increasingly turned to the unique services offered by the human resources as a significant source of competitive edge. In modern business environment human resources is viewed as a significant element in any enterprise. The profitability, which is a measure of success in many corporations, largely depends on the human resource. It is also an important factor in the 5ms of the production processes (man, machine, money, materials and methods). However, it must be recognized that out of the five Ms, it is only the man that is able to mobilize the other resources. Man or human resources, coupled with the other Ms, Helps in the successful completion of any tasks. With the globalization of markets, there are many issues that arise in the sphere of human resource management. In the contemporary business environment and cross boarder human relations, new concepts arise including the conversion of local HRM practices to international practices. The aim of this essay is to discuss what international human resource entails and how it impacts on an organizations performance. Towards A Definition (Brewster,(2011) observed that whereas many practitioners and scholars are in agreement that human capital management is an essential factor in the competitiveness of the enterprises, there is still many or varied opinions on how best the human resources complex activities are handled in practice. According to human resource scholars such as Dowling (2008), the organizations which perform well in regard to employee management often have strong discipline in the management of the human capital coupled with a special concern with the social capital. Social capital is viewed as the construction of relationships and networks among the employees in organizations as well as the culture and structure of the enterprise. Consequently, the reinforcement of the multiplier impacts of such combinations gives rise to inimitable conditions for the administration of employees (Harzing and Pinnington, 2014). These conditions, additionally drives more issues beyond the human resource excellence including employee engagement, knowledge management, and most importantly, workforce adaptability. International human resource management is about the global management of human capital including the process of procuring, allocating, and the effective utilization of the knowledge, skills, perspectives, and ideas in responding to the organization needs. It, therefore, is the process of hiring, allocating, and exploiting the human resource in international organizations is referred to as international human resource management (Harzing and Pinnington, 2014). According to Harzing and Pinnington (2014), the term International human resource management can also be viewed as the management of employees of multinational organizations and particularly the aspects that relate to the enterprise international operations. Some scholars such as O'Sullivan (2014) tend to view IHRM as complimentary to the study of industrial relations that often tend to be anchored on country differences. Human resource management is often viewed as the strategic approach to the administration and management of an enterprise’s most treasured asset- the employees who collectively and individually contribute to the success or attainment of the organization’s objectives (O'Sullivan, 2014). In the contemporary study of people management, the term human resource management has taken the place of personnel management as the description of the significant processes that are involved in people management in enterprises. Simply put, HRM means the recruitment of the employees, developing their capacity, maintaining, utilizing, and compensating their contribution in alignment with the organization requirement. Additionally, the strategic human resource management is viewed as the process that links the human resource functions with the strategic goals of an enterprise with the aim of improving the performance of the entity. Scullion and Paauwe (2004) opine that Human resource can also be viewed as the organizations process that integrates decisions about the employees with the decisions regarding the objectives that the entity is trying to attain. Thus, by integrating the human resource management with the company’s planning process, and with a special emphasis on the role and activities that support the broader enterprise missions while building a healthy relationship between the human resource and the organizations management, the enterprises can ensure that the management of the human capital contributes to the accomplishment of the organization’s mission and the managers can, therefore, be held accountable for their human resource decisions (Scullion and Paauwe, 2004). Sengupta (2007) indicated that previously, the HRM was seen as an operational department that dealt with the function of administering benefits, paying employee’s dues, recruiting new workers, and other administrative activities. To this end, there are many organizations that treat HRM as a necessary cost that has to be incurred in order to run the enterprise. Such an approach may allow the entity to operate effectively; however, according to Varma, Budhwar and DeNisi (2008), the organization would find it difficult to establish the needed synchronization of the organization and human resource strategy that is necessary to create a competitive edge in the marketplace. Organizations, therefore, have realized that success depends on the ability to recruit, develop, and maintain quality workers. Rao (2007) opines that companies are not just experimenting with their approach to the marketplace but also with how they enter the marketplace of talent including defining the relationship between the employees and the employer. Human Resource Management Approaches The central premise of the international human resource management is anchored on the view that employees are the drivers of an organization competitive advantage. Whereas technology and capital can be accessed by many enterprises; it is only people who are found to be enterprise-specific resource that has the capacity to enable organizations differentiate themselves from competition (Rao, 2007). Organizations, therefore, are faced by the challenge of maximizing the human contribution. In evaluating that notion, there are two distinct approaches that emerge from the study of HRM. One approach emphasizes the significance of people integration management with the enterprise strategy. The other perspective emphasizes the significance of the management policies that informs the employees’ commitment. These policies are seen as being aimed at the promotion of mutuality. The mutuality encompasses mutual goals, influence, rewards, respect, and responsibility. According to Harzing and Pennington (2014), the argument was that the mutuality policies would elicit employee commitment that would also guarantee better human development and greater economic performance. Best Practice and Best Fit The two human resource approaches can be illustrated by the distinction between best practice and best fit paradigm. The best fit paradigm is also referred to as strategic fit. The approach takes the view that organization HR policies should be aligned to the company’s purpose and strategy (Varma, Budhwar and DeNisi, 2008). It means, therefore, that in organizations with multi-divisions that often have different strategies, the policies would also vary in order to fit the requirement of the various business units. On the other hand, the best practice approach proposes that there exist some sets of HR practices that when adopted can improve the organizations performance in any given context. As Varma, Budhwar and DeNisi (2008).observed earlier, the best practices are associated with the employees’ commitment. Suffice to say, the employee commitment to the company, their competences, cost effectiveness, and the congruence between the workers and the company forms the conceptual outline of the best practices approach. The realization of these commitments should deliver benefits to the individual, the organization, and the society (Varma, Budhwar and DeNisi, 2008). The two approaches were the key employment patterns and policy models for enterprises until the organizations began to react to the increased pressure from heightened competition and the uncertainty of the market. Since markets have become unpredictable, many organizations have evolved employment relationships that enhance flexibility in responding to the customers’ demands (Harzing and Pinnington, 2014). The market uncertainty, increased competition, and an increasingly demanding consumer base can be viewed as the environmental factors that led to the development of the human resource management practice (Harzing and Pinnington, 2014). Nature of International Human Resource Management The IHRM is useful in organizational redefining in its role as an innovator. IHRM is composed of people-related functions including recruitment, training, development, compensation, performance appraisal, welfare, and industrial relations. These functions are both supportive and administration in nature (Scullion and Paauwe, 2004). Brewster et al. (2011), however, observed that there exist some differences between domestic and international human resource management. The international human resource management is viewed as placing more emphasis on such functions as relocation and associated orientation and helping the workers adapt to the new working environment outside of their culture. Secondly, the recruitment process for the international posting is expected to avail clear information and training on life, work and culture of the country the employee is to be posted (Brewster et al., 2011),. The HR should avail a comprehensive description of the responsibility and the tasks to be attained since they may be different from the local assignments. Thirdly, the HR professionals are required to ensure that the companies they work for behave ethically and demonstrate their social responsibilities in the countries they have operations (Scullion and Paauwe, 2004). The scope of international human resource management is wide because it operates beyond nations’ borders. Dowling (2008) is of the opinion that IHRM also plays a significant role in helping organizations define the values and norms that the international organizations should promote in order to shape the corporate culture that essentially promotes, respects, and protects the rights of the stakeholders. According to the author, the areas that such values are nurtured include performance management policies that incorporate the values associated with human rights and principles. The IHRM is also expected to promote the CSR policies that seek to improve the working conditions of the workers and the community (Dowling, 2008). Cultural Factors Cultural factors are a significant concern for IHRM. The cross cultural issues include the development of the capacities that are essential in handling cultural empathy, diplomacy, adaptability, positive attitude, as well as emotional maturity and stability (Dowling, 2008). According to Harzing and Pinnington (2014), however, there are other issues such as communication barriers that may hinder or offend the cultural sensibilities of the new station culture. Thus, the international corporation relies on various selection criteria in identifying the appropriate talent for the international posting. The criteria include professional skills, social skills, motivation, and language skills (Harzing and Pinnington, 2014). Dowling (2008), however, emphasizes that the important skill in the international posting is the ability to interact with other cultures. The Functions of IHRM Globalization, integration processes of the business straggles and operation across diverse cultures, ideas, and products, has an impact on the role assigned to the international human resource practitioners (Dowling, 2008). Previously, as observed by Brewster et al. (2011), the HRM were concerned with the domestic issues as they related to the workers, in the 21st century, human resource have to grapple with the effects of employees diversity and the interdependence of training and employees professional development. Consequently, the main functions of international human resource management are crucial concepts in the realization of the strategic performance of any international business (Brewster et al., 2011). These functions include hiring or recruitment, training, professional development, compensation and benefits, motivation, performance Management, evaluation, and managing change (Brewster et al., 2011). Recruitment and Selection Human resource management is a significant developmental factor in major organizations, thus, the establishment of HRM is often considered as the first step to the growth and success of an enterprise, especially for organizations with global footprints such as the Coca-Cola Company (Fahad, n. d.). According to Fahad (n. d.), Coca-cola recognizes that it is the employee factor that sustains its global presence. The organization also recognizes that it cannot have globally unified policies due to the cultural and government regulations as appertains to the different countries. Nevertheless, the company accepts that such cultural economic, and political differences should be addressed, as such, the human resource management comes in as an important role in handling the diversity in the selection, recruitment, career development, performance management, and employee management (Fahad, n. d.). Brewster et al. (2011), indicate that the human resource function of recruitment should be focused on hiring and retaining the best candidates in order to maintain a competitive edge. At coca-cola, according to Fahad (n. d.), the HRM is charged with the role of developing policies and practices as well as guidelines that ensure that the organization puts the right individuals at the right job in order to attain the enterprise’s objectives. The HR duties at coca-cola are, therefore, the hiring of the employees, development, working environment, compensation, and career development. IBM and Proctor and Gamble have similar approach to the treatment of the human resource procurement of talent policies (Fahad, n. d.). Coca-cola, IBM, and Proctor and Gamble all emphasis on the value of the workers as the most important assets. The organizations have developed retention strategies based on the benefits that the employees derive from working with the organizations (Fahad, n. d.). These organizations have over the years been working with sets of norms and values that have been central in attaining the organizations goals and objectives. The hiring or recruitment objectives ensure that the right people are at the right place and at the right time. It, therefore, involves the identification of the nature of the task and adopting a hiring process that guarantee the correct match in alignment with the organizations objectives (Harzing and Pinnington, 2014). The hiring and selection objectives should also ensure that the recruited individuals can be retained. Most of the retention is through a benefit package and professional development processes. Coca-Cola is one of the organizations that have perfected the retaining of staff through an elaborate compensation program (Fahad, n. d.). Performance Management Performance management involves a process where an organization develops a work environment that is aimed at empowering the workers to do their tasks at their best. The process that individual organizations may vary from one organization to the other, nevertheless, the process would generally involve the setting of goals, evaluation, and reward (Varma, Budhwar and DeNisi, 2008). Additionally, as Harzing and Pinnington (2014) indicated, effective performance management practices view the process as a continuous process of goal and objective setting, assessment of progress, provision of coaching, as well as feedback. Such a process ensures that the workers meet their work objectives and their career goals. It can, therefore be argued that the fundamental objective of performance management is the promotion and improvement of employee effectiveness through the continuous process where both employer and employees corroborate in planning, monitoring, and reviewing of the employee’s tasks objectives and the contribution to the organization performance. In addition, the standard of performance require that the employee performance in evaluated either annually, end of performance period, or at the completion of the task or work plan (Varma et al., 2008). An effective performance management process should be job specific, aligned with the enterprise strategic objectives and culture. It should also include a collaborative environment for setting objectives and goals as well as reviewing the performance on the basis of a two-way interaction and communication between the manager and the employee. The performance evaluation process Planning The planning stage is often meant to set the employee achievement objectives and to have a discussion on the anticipated level of job performance. It is to be noted that the expectations of performance for the employee is dependent on the tasks assigned. At the completion of the planning stage, the worker and management should be in agreement on what is expected (Harzing and Pinnington, 2014). It should also be noted that the objectives and goals identified should be achievable within a set duration. Assessment In the performance management process, the evaluation is an annual assessment of the workers performance. The assessment may often draw feedback other employees, suppliers, and clients in addition to management observation which may include the review of earlier evaluations. In organizations such as Coca-Cola, the employees are required to give an assessment of their individual performance. The personal assessment is then discussed in the evaluation interview and compared with the management assessment (Fahad, n. d.). Whereas the performance management process to be viewed as effective, the employee performance and progress should be continuously monitored, however, the monitoring of the day-to-day performance should not be reduced to micro-managing the employees, rather it should be focused on the results delivered and the individual employee behavior including also the team dynamics that may affect the workplace environment (Fahad, n. d.). It is therefore, essential that while the assessment is going on, the employee and manager should hold regular meetings to evaluate progress towards the attainment of the identified performance goals. The meetings should also identify any possible barriers that may hinder the accomplishment of the performance of the set objectives. At these meetings, the steps that should be taken to overcome the barriers should also be agreed on (Fahad, n. d.). The meetings should also be used to identify the changes that could be needed within the work plan because of shifts in the enterprise priorities, or, as in some cases, the employ may be required to assume new responsibilities (Varma et al., 2008). Finally, the meetings should be used to determine if there is any support needed from management to enable the attainment of the objectives. Recognition The part of recognition in the performance management process relates to recognizing the workers’ achievement and the areas that require improvement. During the recognition process the employer and the worker should agree on the ways to effect the improvements (Varma et al., 2008). The employer should also offer support to the employee. Ultimately, the employee should be given a verbal recognition and a bonus or even promotion for their achievement. Implementation of Performance Management System Many International human resource practitioners observe that having adequate tools and processes is a requisite necessity but not enough to attain an effective performance system. What matters in the performance system is how effectively and successfully it is applied and how seriously it is taken by management and employees (Varma et al., 2008). Thus, the most important part of the development of a performance management system is the implementation. Although there are several elements to the implementation of performance management, its central aspect is the provision of user-friendly and value-adding system to both management and employees. Legal Compliance The human resource management is also tasked with ensuring the legal compliance with tax and labor law which is crucial in ensuring the enterprise continued productive existence. Various countries have different legislations and regulations regarding labor relations (Varma et al., 2008). Thus, it is the IHRM function to ensure that the legal requirement and policies are adhered to by the organization. Conclusion To sum up, the HRM has a significant impact on the performance of an organization. HRM assists an enterprise allocate its human capital effectively, enhances operating efficiency, and encourages the application of innovation and creativity. HRM also encourages the development and transmission of the organization’s goals and objectives. Through the effective management of the recruitment process, the HRM helps an organization to hire and maintain the best talent in the industry. It is also noted that the HRM, through performance management enhances the productivity and the company’s competitive advantage. References Brewster, C., Sparrow, P., Vernon, G. and Houldsworth, E. 2011. International Human Resource Management, London: Chartered Institute of Personnel and Development. Dowling, P. 2008. International Human Resource Management: Managing People in a Multinational Context, Boston: Cengage Learning. Fahad Umar, F. n. d. Strategic Resources Management. [online] Available at: Accessed on 9 April 2017) Henry, H. (2014). Patronal Politics. Problems of International Politics, Cambridge: Cambridge University Press Harzing, A. and Pinnington, A. 2014. International Human Resource Management, SAGE. O'Sullivan, M. 2014, What Works at Work, Bath: The Starbank Press, Rao, V. 2007. Human Resources Management: Text and Cases, New Delhi: Excel Books India. Scullion,H. and Paauwe, J. 2004. International Human Resource Management: Recent Developments in Theory and Empirical Research, London: SAGE Publications Ltd. Sengupta, N. 2007. International Human Resource Management, Excel Books India. Varma, A., Budhwar, P. and DeNisi, A. 2008. Performance Management Systems: A Global Perspective, London: Taylor & Francis. Read More