International Human Resource Management - Essay Example

? International Human Resource Management Question Introduction Purpose of the report The purpose of the current report is to evaluate the criticalfactors that differentiate domestic human resource policies and international policies. Even though they show some strong similarities, the present report will analyze various cases and examples to highlight how the minute and critical differences have influential impact on the overall decision making process. Brief overview of the topic area Domestic human resource policies apply to those laws and regulation which are implemented in domestic organisation or companies with little or no relationship with international business. These companies generally cater to the local markets with products and services especially meant for the regional consumers. On the other hand, international human resource policies apply to all those rules and laws which are influenced by international business and their functions. International policies are generally used by multinational corporations and global organisations whose target markets are spread all across the world. Statement of objectives Through the current report, the researcher is going to evaluate critical similarities and differences between these domestic and international human resource policies and the different situations where each one influences the decision making process of the organisations. Definitions Domestic Human Resource Policies Domestic human resource policies of an organisation are limited to national borders. Basically, these are organisation with little or no international connection. There services are limited to local consumers and the employees are also locally recruited. Thus, cross-cultural interaction is rare and they are committed to management of local resources only (Black, 1999). International Human resource policies The international human resource management involves the same activities as the domestic human resource management has including human resource planning, staffing, recruitment, development and rewards etc, but critics argue that domestic human resource management usually engage with employees within one national boundary. International human resource policies can be described as those regulations and guidelines which help in facilitating the business and relationship between cross national organisations. It also encompasses all legal activities which will keep a check on normal functioning of the international business (Takeda and Helms, 2010). Overall international human resource policies are aimed at maintaining and effectiveness of human resources in an international context. Apart from the basic polices of planning, recruitment and selection, performance management, staffing, labour relations and compensation and benefits. International HR policies also take care of various functions such as monitoring and management of international laws, selection and recruitment for international assignments, expatriate employee development and training and management of their compensation and career issues Similarities between Domestic and Multinational Human Resource policies and practices  The core human resource policies concerning domestic and international environment are almost similar. They include basic human resource planning, compensation and performance management, reward system, development and appraisal, recruitment and selection etc. The existence of these similarities is because of the fact that policies and guidelines inside the office are almost similar. The other reason is that these policies have a single origin. It is only with the advent of globalization and international business networks, that these policies have been stretched and modified according to requirements. Human resource planning Human resource policies imply on all those planning processes which link the various needs of human capital of a firm to its strategic aim. The objective of the human resource planning process is to make the human resource qualified, competent and sufficient, so that they facilitate the completion of the objectives of the organisation. Human resource planning also involves in minimising employee turnover and enhancing the competitive advantage of the overall company resources. The key elements of the planning process include labour demand forecasting, evaluation of the present supply of labour and balancing of the projected labour supply and demand. In both national and international HR system, these remain similar. Recruitment and selection A basic recruitment and selection process includes a serious of steps with the objective of finding appropriate talent or candidates for a particular job profile. Human capital is one of the most important assets of an organisation and it is critical to acquire the right talents for the performing particular tasks. There are several parts of the process such as souring candidates, tracking and reviewing applicants, interview conduction and employment selection. The basic similarity between domestic and international policies lies in the fact that both follow the same guidelines. for example, while selecting a candidate for the post of Senior software engineer the educational qualifications, experience, overall skills and exposure will be almost similar and irrespective of the nation or organisation. Similarly, while interview process the questions asked and tests undertaken will fall in the similar category (Fellows, 1999) Performance Appraisal Performance can be described as a systematic evaluation of employee performance and understanding of employee abilities for further development and growth. The process of performance appraisal takes place in various phases like performance evaluation by supervisors as well as HR managers, final appreciation and feedback system (Brown, Hyatt and Benson, 2010). Every company wants to retain talent and skilled employees, irrespective of nation or boundaries. That explains the appreciation and incentives for good performance while training and revival programs will be conducted in case the employee performance fails. Difference between Domestic and Multinational Human Resource policies and practices  Multinational human resource policies imply obvious indulgence in international borders while its domestic counterpart performs within the local set and national borders. Apart from the basic regulations and facilities, International HRM follows more stringent policies like, taxation related to work location, language requirements and employment protocols, work permits etc (Gill and Meyer, 2011). In case of local HR policies, the regulations and rules comply only with the local taxation policies and ordinary employment issues. Further, HR managers of multinational organisations face the complexity of addressing issues to individuals from various nationalities. Therefore, these managers need to set up diverse HRM systems catering to the international and cross-cultural issues. Whereas in case of domestic HR managers, they have to deal with employee issues related to only one nationality. The various complexities and risks associated with international assignments can be summarized as follows; 1. Sustaining operations in the international business 2. Selection and recruitment for international assignments 3. Expatriate employees training and development 4. Expatriate compensation 5. Career and re-entry issues International employees International HR policies deal with a broader perspective because these organizations cater to three different categories of employees. Parent country nationals - A parent country national is an employee working in a nation different from their nation of origin. They are also known as expat. These assignments may be short term or long term, ranging from 6 months to 7-10 years. Parent country nationals generally work in a controlling position and usually lead one or more teams of local employees. The major reason for PCN expatriation is lack of skills and experience among the host country employees in order to finish the assignment. Host country nationals - An organisation’s employee who is the citizen of a nation where the firm’s plant or brand is established but the headquarters of the firm is located in another country. One major drawback of hiring HCNs is their lack of understanding in terms of the culture of the parent organisation. However, HCNs are familiar with the local culture and business environment and they are also less expensive. They are also productive and know the local business in a much better way (Vance and Paik, 2005). Third country nationals- Third country nationals describes those individuals or employees of other countries hired by contractor or government representing neither the host nation nor operational areas or the contracting government. These are generally citizens of a nation apart from the parent organisations or subsidiary country. They are usually less expensive and more adaptable compared to PCNs. They reflect geocentric attitude with knowledge about specific languages and cultures. However, the main drawbacks are that the locals might prefer their own employees as managers. Sometimes, issues can occur if the country of the TCN has unpleasant relations with the host country or they might have some ulterior harmful motive. It is clear that risk exposure is much more pronounced in case of international assignments. Apart from security and health concerns, international HR managers also face threats like terrorism. Thus, international HR policies must consider these aspects while selecting and preparing expatriates for international assignments. Summary and closing statement From the above study, it is clear that international HR policies deal with various external factors compared to domestic HR policies and management. Local codes, host nations’ laws ad practices etc are few of these factors which are taken into consideration while planning for expatriate assignment. The issues faced by international HR managers are also broader compared to domestic policies. Thus, it can be concluded that though HR policies have a similar point of origin, domestic and international HR policies differ in various aspects. Reference list Black, B., 1999. National culture and high commitment management. Employee Relations, 21(4), pp. 389 - 404. Brown, M., Hyatt, D. and Benson, J., 2010. Consequences of the performance appraisal experience. Personnel Review, 39(3), pp. 375 - 396. Fellows, H., 1999. Recruitment and Selection: A Competency Approach. Library Review, 48(6), pp. 49 - 50. Gill, C. and Meyer, D., 2011. The role and impact of HRM policy. International Journal of Organizational Analysis, 19(1), pp. 5 - 28. Takeda, M. B. and Helms, M. M., 2010. Globally sustainable management: A dynamic model of IHRM learning and control. The Learning Organization, 17(2), pp.133 - 148. Vance, C. M. and Paik, Y., 2005. Forms of host-country national learning for enhanced MNC absorptive capacity. Journal of Managerial Psychology, 20(7), pp. 590 - 606. Question 2 Introduction Purpose of the report The purpose of the current report is to evaluate an effective training program for successful completion of expatriate assignment. Brief overview of the topic area The topic will deal with expatriates and the difficulties which they face during expatriate assignments as well as proper cross-cultural training programs in order to facilitate better adjustments. The report will first define important elements of the study and will describe various training programs in detail. The various phases of adjustment during the stay in the host nation will also be discussed. Finally, the overall importance of cross-culture training will be discussed. Statement of objective The objective of the study is to evaluate the critical importance of cross-cultural training programs as well as analyse the various training facilities which facilitate the successful completion of foreign assignments in international HRM. Definition Expatriates A general definition of expatriates is an individual staying in a nation other their native country or country of birth, generally for work purposes. If an individual relinquishes his or her citizenship in the native country in order to become citizen of some other nation, they too can be regarded as expatriates. More often, this is a temporary staying in order to complete particular projects or assignments that are given to the individual. Repatriation Repatriation is the process when an expatriate returns to the country of origin. Sometimes repatriation is also used to describe when an individual converts a foreign currency into his/her own currency. Pre-departure Training and Post-arrival Training Pre-departure and post-arrival training are provided with the objective of the preparing the expatriate who is chosen for the host nation’s assignment. Pre-departure training includes cross cultural training programs and sequential training programs. The most widely applied post arrival training includes induction training. Adjustment dimensions Employees in foreign nations for long term assignments need to go through various circumstances before adjusting to the unknown. This adjustment process has various phases, generally known as U-shaped curve. The phases include exposure to an exotic new culture, realising necessary adjustments and moulding in the cultural environment. The initial phase is often described as “honeymoon phase” or “tourist phase” which ends when the employee starts experiencing problems daily. It can last from a few days to six months. This phase is followed by a steep downward turn ending into a culture shock. Various reasons can be attributed for this phase such as stress, sense of losing status, possessions or friends, obligation, rejections, anxiety, surprise or disgust over differences in culture. Those expatriates who decide to adapt, enter the “adjustment phase” or “recovery phase”. The last phase is known as “completion phase or “recovery phase” when the individual is fully adjusted and starts functioning in an effective and efficient manner (Black and Mendenhall, 1991). This acculturation process can be categorized into four adjustment dimensions: Self-oriented Here the individual is involved into activities which bring pleasure and happiness and reduce stress such as food, music, sports, art etc. It is also characterised by gaining technical competence in order to increase confidence and better adjustment. Others- oriented In this dimension, the expatriate tries to communicate with locals. This dimension is facilitated by relationship development with the individuals of the new culture and a sheer willingness to interact and communicate. Perceptual dimension Perceptual dimension include necessary skills in order to understand the behaviour of the foreign people and predict their future actions in order to reduce complexities, misunderstandings and tensions while building cross-cultural relationship. Cultural Toughness It describes the differences owing to the cultural distance (Shenkar, 2001). In some cultures, women find it more difficult to adjust then men expatriates. It is quite clear that facilitation of dimensions is an important function for the international HR managers. Various factors can be taken into consideration while selection and pre-training of expats. Skilful HR managers will not limit the selection criteria to technical competence but will also include competencies and skills which are in line with the expat’s dimensions. Preparing the expats with proper cross-cultural training programs is another crucial factor responsible for the effectiveness of the foreign assignment. Cross-cultural training methods Cross –cultural training can be categorised into pre-departure and post-arrival training methods. The various cross-cultural training methods for preparing expatriates are described as follows; Experiential Training Experiential training is conducted using various methods such as workshops, simulations and practical exercises. It also includes providing genuine and visual concepts about the host country (Caligiuri et al., 2001). For example, look-see trips are provided to the expat which gives them real experience as well as opportunity to interact with the foreign nationals. The only issue is that these trips might expose real scenario of the host nation (Brewster, 1995; Bennett, Aston and Colquhoun, 2000). The overall objective of the training is to prepare the expat in a direct manner beyond just intellectual experience. The concept of the training is based on learning by self-functioning and prepares the expat emotionally and intellectually (Gertsen, 1990). Attribution training Attribution training provides the expat with skills in acting and thinking as a host national. The objective is to give the expat an insight of the culture and understand the host nation’s point of view and well as behaviour. This helps the expat to be more isomorphic towards the new culture. This training is closely related to the teaching method of cultural assimilation. It includes a series of short episodes of intercultural encounters. These encounters are used as practices to interact with a new culture. Language training In language training, expats are taught about the native as well as business language of the host nation. While fluency might take months or years, various benefits can be attributed to this training method. Lack of proper language skills can decrease the speed of adjustment. It helps in entering informal discussions, using common courtesies and show empathy towards the host culture. This is turn helps in facilitating host country adaptation. Knowledge about the local language is also critical while sending visible behavioural signals such as politeness and acceptance (Brewster, 1995; Forster, 2000). It also helps in faster processing of information at professional and private level thus facilitating integration. Cultural awareness training The objective of culture awareness training is to provide the expatriate with necessary insights about the host country culture and various cultural differences associated with it. Culture training includes building of self-awareness and ranking of value charts but the process can also be stretched to more culture related approaches such as perceptual exercises and simulation games. Other methods included in this training program are self-assessments, role plays etc. They are especially helpful in increasing self-awareness and confidence which in turn helps the expat in accepting himself or herself in order to successfully adjust in the host culture (London, 2003). Interaction training Interaction training is basically used to give expatriates more information about the host culture through firsthand experience. In this method, interaction between expatriates, with existing local culture experience and new expats takes place. It can happen before host country departure or after arrival in the host nation. Sometimes, expat placement overlaps and they are used as a training method. They are extremely beneficial for the adjustment process of the expat as it might include possibilities such as introduction of important contacts, workplace operations, explanation of tasks and coaching. Families also benefit in similar manner by interacting with the outgoing families (Puck, Kittler and Wright, 2008). Induction training Induction training is that which is provided by employers to new employees aiming to facilitate adjustment to the new business environment. In case of expatriate induction, HR managers are also given cultural training apart from the normal training procedures. It is a type of post-arrival training. The procedures are systematic and often involves the immediate senior for the training the expats. During the initial phase of the business, the expat is provided with facilitation training where they talk with other workers for understanding and working better. The expat is also exposed to various philosophy and values related to both the host culture and organisation. Legal and health laws also form an important aspect in the training program. For example, legal obligations in terms of health and safety might be more stringent in some organisations compared to others. The expat is then given a firsthand experience regarding the organisations operations and productions and other facilities. The training is followed by evaluation of training exercise and feedback. Importance of cross cultural training program Various reasons can be attributed to the failure of expatriate programs. The most common is language problem followed by lack of communication and personality skills, lack of confidence and motivation and a difficulty in understanding (Littrell et al., 2006). However, if the expat is properly trained in terms of cultural differences and the challenges that might occur, he or she might be able to minimise them to a large extent. Proper training and induction program will help the expat to better understand the point of view of the host nation’s culture and business (Bonache and Brewster, 2001). This will help in avoiding any misunderstanding and negative perceptions regarding behaviour of host culture individuals as well the new expatriate. Thus, cross cultural training program will help in facilitating the successful completion of the expatriate program. Summary and Closing Statement Cross cultural training forms an important difference between domestic and international human resource policies. International managers are trained with special skills in order to provide training and development facilities to expatriates. From the above study, it can be concluded that proper and planned cross-cultural training and induction will have a definite positive influence on the overall adjustment process of the expatriate as well as facilitate in the proper execution of the training. Reference list Bennett, R., Aston, A. and Colquhoun, T., 2000. Cross-cultural training: A critical step in ensuring the success of international assignments. Human Resource Management, 39(2), pp. 239-250. Black, J. S. and Mendenhall, M. 1991. The U-Curve Adjustment Hypothesis Revisited: A Review and Theoretical Framework. Journal of International Business Studies, 22(2), pp. 225-247. Bonache, J., and Brewster, C., 2001. Knowledge transfer and the management of expatriation. Thunderbird International Business Review, 43(1), pp. 145–168. Brewster, C. 1995. Expatriate management: New ideas for international business. West Port: Quorem. Caligiuri, P., Phillips, J., Lazarova, M., Tarique, I. and Burgi, P. 2001. The theory of met expectations applied to expatriate adjustment: The role of cross-cultural training. International Journal of Human Resource Management, 12(3), pp. 357-372. Forster, N. 2000. Expatriates and the impact of cross-cultural training. Human Resource Management Journal, 10(3), pp. 63-78. Gertsen, M. C. 1990. Intercultural competence and expatriates. International Journal of Human Resource Management, 1(3), pp. 341-362. Littrell, L. N., Salas, E., Hess, K. P., Paley, M., and Riedel, S. 2006. Expatriate preparation: A critical analysis of 25 years of cross-cultural training research. Human Resource Development Review, 5(3), pp. 355-388. London, M. 2003. Job feedback: Giving, seeking, and using feedback for performance improvement. Philadelphia: Lawrence Erlbaum Associates. Puck, J. F., Kittler, M. G. and Wright, C., 2008. Does it really work? Re-assessing the impact of pre-departure cross-cultural training on expatriate adjustment. The International Journal of Human Resource Management, 19(12), pp. 2182-2197. Shenkar, O. 2001. Cultural distance revisited: Towards a more rigorous conceptualization and measurement of cultural differences. Journal of International Business Studies, 32(3), pp. 519-535. Read More