Practices in International Human Resource Management - Essay Example

PRACTICES IN INTERNATIONAL HUMAN RESOURCE MANAGEMENT In a world where there are no more boundaries, corporations and industries have started to think beyond the local community to keep abreast with global trends. Efforts have been focused on expanding the market internationally and making decisions that are geared towards worldwide competition1. All these entails top executives and managers to launch business activities to different parts of the world if it has to maximize its potentials and consequently boost stock market value. Besides, clients themselves have demanded for a workforce who is flexible and adaptive in an intercontinental sense that not much choice is left for corporate leaders. One specific example of a company which has jumped into the bandwagon is Asea Brown Bovery (ABB). ABB is merger of three nations including Sweden, Switzerland and the United States. It has employees in more than 140 countries, an executive team composed of Swedes, Swiss, Germans, and Americans, and a head office in Zurich. A former ABB President said that the conglomerate is an alliance of national companies with a worldwide organizational hub. There are certain similarities among nations but their also great differences. 2 Some are economically advanced while others are under political dictatorships. Some have citizens who are educationally and socially adept while others have people with minimum literacy and social skills development. Along this line, human resources practices evolve to cater to the employment of individuals who come from various geographical locations, cultural heritage and ethnic background. The challenge however is how to make things work under this specialized set-up in terms of which principles to follow in the entire human resources process of selection, recruitment, compensation and benefits, and career planning. This endeavor is very important considering that Maxwell insists that the more people are developed, the greater the extent of company achieving its dreams, goals and objectives. 3 The Human Resources Department (HRD) is now faced with looking for the right people who can run the global race. Most of the time, the preference is to get the local nationals or the citizens of the host country in which the company is situated. It is like a Canadian working for an American industry in Canada. The employee then is called a host-country national. In this way, labor cost is much cheaper compared with having to hire an expatriate (somebody living in a foreign country) who could either be a third-country national (a citizen of a country differing from the home or host country) or a home country national (an expatriate who is a citizen of the country where a multinational company is headquartered) to fill in the position. Moreover, host-country nationals are assumed to be more adept with the local business environment than the home-country personnel. However, it is inevitable to take on expatriate workers especially for managerial spots in the business ladder. The reasons may vary from launching new commercial ventures in an overseas location, seeing the need to protect highly specialized information and technology, and presuming that local nationals may be too patriotic that they can easily subject themselves to their own government’s influence and control. As such, expatriate selection is a human resource area that has been given attention.4 Expatriates usually bring with them a range of issues resulting from their assignment to a new country. As they arrive, they face culture shock in their second homes and in the workplace. They experience differences in health care, housing, education, food, language, customs, and cost of living especially that their spouses and dependents have to come along with them. Additionally, they have to deal with emotional difficulties like homesickness and feelings of isolation. In a Chinese publication called China Daily, there have been reports of expatriates failing terribly in their transfer.5 One British copy editor resigned after he found his wife committing suicide. Another U.S. editor was sent back to his country because he refused to sign a standard job contract in China. Thus, expatriates and their families experience a lot of stress working in other countries that it ultimately affects job performance. The sad thing is that the selection procedures used for expatriates are the same for local nationals. The expatriates are similarly assessed based on their technical know-how that other important success factors are not taken into account. Human resources personnel who are responsible in the selection procedure seem to have missed considering the home country national or third country national’s ability to interrelate with others and adapt with diverse cultures. Evidence from research has even showed that expatriate selection has proven to be indiscriminate and illogical.6 Nankervis and Grainger relate that in a recent survey of 60 Perth-based companies, results have shown that there has been an overemphasis on traditional recruitment interviews and job appraisals instead of using cross-cultural examinations, linguistic skills and psychological profiles. 7 In fact, among the home country or third country nationals only 26 percent have had previous cross-cultural training while a meager 22 percent received language coaching. Furthermore, the human resource departments largely use typical quantitative performance assessments for employees that measure only sales, profitability or return on investment. Most often than not, this method has failed to emphasise the intangible success indicators, including leadership, staff morale, internal and external relationship building, that benefit the company in the long run. On the other hand, various nationalities have placed certain cultural work values that need to be addressed and prioritized. 8 Studies have shown that academic achievement, language learning, stress management, and general adaptability are important factors that contribute to foreign assignee’s level of success. In specific, Brewster’s study suggests that European nationals place more importance to education and language skills. Meanwhile, Filipino, Indonesian, and Thai executives consider human factors to be most vital. With this, Maxwell agrees that people skills are essential for success.9 Companies which exhibit this achievement are usually composed of executives who get along well with employees. It is also about nurturing that essential human quality of being able to motivate each other to work as a team when they are able to understand each other and even empathize with what is going on in each of their lives. Thus, it is imperative that human resources practices are those that encourage an open environment for expatriates and the other employees in the company. This can be done when employees are readily able to admit their mistakes and accept the consequences rather than putting the blame on each one. Another factor which relates with culture refers to cultural distance. 10 Cultural distance is defined as the amount of difference between any two social systems ranging from minimal to substantial. Studies have shown that some measures of cultural distance from the United States are greater for countries found in the Mediterranean but smaller for Scandinavian nations. Most of the time expatriate managers tend to be ethnocentric that they judge conditions based on how they perceive it in their home country. One example is that executives from a U.S. company in an Asian country found it difficult to adapt to a cultural practice of nepotism or the hiring of relatives into the system. While the Asian counterparts found employing family members beneficial to business growth, the U.S. leaders opposed to it as it was strongly discouraged in their home country. The two companies ended up in separation. However, human resource as a liaison office is to ensure that there is a sense of cultural integration of two or more countries to facilitate smooth adaptation of expatriate employees. Much of the expatriate’s success can also be attributed to the amount of family support that he receives specially that research has indicated that spouse involvement is contributory to positive adjustment. 11 In Japanese corporations for instance, researchers have found that the assistance given by the companies to expatriate wives is a valid predictor of the latter’s psychological health. Conversely, expatriate wives are most dissatisfied when there is little or no orientation training and help given to them. More specifically, a study made by Anderson showed that the usual support given was primarily work-related but lacking in the personal and familial needs of the expatriate upon relocation. Once employed, the human resources department holds itself responsible for conducting orientation to employees. In the international practice however, recent research has confirmed that companies have allotted a few resources for orientation.12 This is despite the fact that the expatriate and his family needs to get acquainted and gradually accustomed to the host country’s culture, history, geography, politics and economy. For instance, U.S. research has indicated that 65 percent of organizations have no orientation training at all. Meanwhile, more Australian companies do provide orientation but is done in the form of information packs that are outdated, incomplete and mostly irrelevant. Copeland and Griggs recommend that a shift in the orientation phase of human resource management be instigated. The expatriate and his family should be assisted in studying the host country’s social and business etiquette, history and folklore, cultural values and priorities, religion and its role in daily life, practical matters relating to transportation and time zones and the language among others. 13 Without all these, the expatriate may be left committing different kinds of blunders that will adversely affect his relationships with coworkers and the community he lives in. To prevent this from happening, an effective orientation program should be in place. It is one in which the expatriate and his family learn to empathize with the host country and its people and include cultural seminars and trainings. In addition, it is deemed important for smooth work relationships to occur that the expatriate is able to clarify expectations of the work environment as well as get updated about company human resource policies and standard operating procedures. 14 The human resources management should properly explain about salary payments, allowances, and home leave privileges. In this way, much anxiety and antagonism can be avoided. Once the foreign employee has adjusted well to the new work and living environment, the human resources team then focuses on how to direct his career path. This is done by providing a mentor or sponsor who is responsible for providing a contact point from home to host country for the expatriate. Unfortunately, Selmer, Ebrahimmi, and Li found that mainland Chinese expatriates who have been assigned to Hong Kong were not given information about corporate development activities, suggesting little interest in their career development. 15 Added to this is the fact that performance evaluation practices are not credible most of the time. This leads the expatriate to be responsible for his own career enhancement at a time where mergers or acquisitions are prevalent during his foreign assignment. The next human resource concern is the consequent repatriation or return of the expatriate to his home country upon the completion of his foreign assignment. Expatriates have a need to know that they have a senior manager in the home office who is ensuring their promotion. It appears however, that when they get home returning from an assignment that involved independent decision-making, they get back doing traditional jobs that pose no new challenges for them at all. Hence, many human resource practices in multinationals need reassessment so that it is able to cater to the need of employees through and through. A number of implications are emphasized by all these findings.16 One is that human resources department managers should be aware of the cultural values of the host country and use it evaluate the adaptability of the home country national or third-country national and his family. Another one is that the selection criteria should be one which emphasizes not only employee’s technical capability but his overall psychological makeup as well. Those that can be chosen are those who have low ethnocentrism tendencies.17 The expatriate should be someone who has the desire to experience another culture and live in another nation. He should be screened in this way to see whether he will be capable of learning a new language together with his spouse and dependents. Newstrom further suggests that expatriates can be assigned to their own nation cluster so that easier adjustment can be facilitated.18 In a study of industrialized nations, it was shown that there are five sociocultural clusters including Anglo-American (United States, United Kingdom, etc.), the Nordic group, Latin European, Latin American, and Central European. Orientation programs should be implemented to facilitate his and his family’s adjustment to the new environment. Once this is done, the subsequent career development and repatriation should be carefully planned. Maxwell suggests that in order to be successful in developing people, three factors should be maintained. 19 One is that the right assumptions about people, their background and culture, should be made. Next is that, people should be asked proper questions about their needs and what keep them satisfied and performing at their best. Last is that, the right kind of assistance should be given to keep them going and their family providing a productivity conducive environment for the worker. Therefore, it is relevant that international human resources practices be directed towards developing a holistic approach to employment through careful selection, pre-departure and on-the-job-training, family assistance, language coaching and qualitative performance evaluation for the foreign employee if companies are indeed committed to be a global phenomenon. Works Cited Maxwell, John C. Developing the Leader Within You. Tennessee: Injoy Inc, 1993. Newstrom, John W. and Keith Davis. Organizational Behavior: Human Behavior at Work 9th ed. New York: McGraw Hill, 1993. Stone, Raymond J. Human Resources Management 4th ed. Australia: John Wiley & Sons Australian Limited, 2002. Read More