Expatriation & HRM - Essay Example

of Wollongong in Dubai Faculty of…………., Department of……………….. EXPATRIATION AND HRM Unilever Corporation Department of Human Resources Prepared by, ………name of student……… …..student ID…… 09 March 8, 2011 A report submitted to the Department of …name of department……. required for the partial fulfilment of the degree ……degree title…….. in …major subject… by ………student name……… University of Wollongong in Dubai 09 March 2011 Acknowledgement First of all I truly acknowledge the co-operation of my course in-charge Mr. /Ms ……name of teacher……. for guidance and support. I would like to extend my gratitude to the management, staff and officials of COMPANY.LTD for their time and access to their HR policies. Last but not the least I would like to extend my sincere thanks to my family and friends who’ve willingly supported me throughout this report work. Expatriation and HRM By ……student name…….. 09 March 2011 Abstract This report highlights challenges that expatriation has brought to human resource management which is an integral department of an organisation. It also explains extra-organisational factors actors as well as includes intra-organisational factors. Such factors are cross border expatriation, changed organisational structure and employee satisfaction’s issues, consumer behaviour shift, changed societal mind set, employee related government laws, changing norms, fluctuating market trends and variable economic conditions. Analysis of expatriation related practices by HRM department of UNILEVER.LTD is included along with the measures that have been taken to confront them. Recommendations with respect to changing techniques and methodologies have also been made. Table of Contents Statement of submission………………………………………………………………2 Acknowledgement…………………………………………………………………….3 Abstract………………………………………………………………………………..4 Table of contents………………………………………………………………………5 Chapter 1: Expatriation and HRM a. Introduction……………………………………………………………………6 b. Types of factors affecting expatriates………………………………………….7 c. Concluding remarks…………………………………………………………...12 Chapter 2: Unilever- an insight practical approach of HRM a. Introduction……………….……………………………………………………13 b. HRM- Practices at Unilever…………………………………………………….14 c. Result of survey conducted among expatriates at unilever……………………..15 d. Unilever’s HRM practices and Expatriation……………………………………15 Chapter 3: Recommendations…………………………………………………………..17 Chapter 4: Appendices Bibliography…………………………………………………………………………....18 Glossary……………………………………………………………..............................20 Chapter 1 Expatriation & HRM Introduction: Human resource management is of great importance for any organisation. Effective HRM helps the organisation to efficiently utilise its work force in order to meet its strategic targets and goals. This exercise comprises of procedures, methodologies, constraints and benefits. At the urge of 21st century, the world has taken the shape of a global village due to advance communication and information technology. Increasing population with limiting resources has made it hard for people to survive. Descending employment and increasing inflation in many countries, especially the third world countries have driven their skilled labour & professional workforce to expatriate for the economic benefit. With the emergence of globalisation, business environment has also globalised. International trade flows, formation of global economic forums, changes in organisational structure and expansion of companies into MNCs have resulted in availability of labour market and staffing requirements which has increased opportunities for skilled work force and business professionals (Edward & Rees, 2006). This cross border demand-driven employment opportunities is resulting in paradigm shift of many countries, like Hong Kong and Singapore, towards service oriented economies. On one hand, expatriation and immigration has brought in many benefits for business and corporate community like economic opportunities, exploration of new markets worldwide and development of multi-cultural work force but on the other hand, it has created challenges that cannot be overlooked. Factors like adverse cross-cultural integration, inability on an immigrant to adjust, changing societal demands has created a mixed business environment which has given rise to new challenges (Sparrow et al., 2004). These factors are often termed as ‘the factors affecting Expatriates’. Types of the ‘Factors Affecting Expatriates’: The factors that are directly or indirectly affecting expatriation and immigration can be divided into two many categories. Mainly these factors are Intra-organisational factors: These are the factors that are faced by an expatriate or immigrant within the internal boundaries of an organization. These include matters pertaining to employees as well as the inter-organisational factors affecting employees. While, factors that are external and uncontrollable by an organisation but have a great influence on the organisation are Extra-organisational factors. The factors affecting expatriate and immigrants include: a. Multi-cultural workforce Increased expatriation and cross border exchange of skilled labour and professionals has transformed the workplace environment. It has given rise to a mixed cultural workplace environment. Since people from different backgrounds, having diverse cultures and values are working at the same place, it becomes challenging for the HR department of an organisation to cope with their issues. Inter-relation stability becomes even difficult to maintain. Immigrants may have a tough time to integrate in new workplace having cultural dimensions. It requires the patience to tolerate the disputes and to respect the cultural differences. b. Adverse effect of diverse backgrounds New technology requires newer skills. Now it is compulsory for organisations to regularly upgrade and train their employees in accordance with the technological improvements. Lack of work force up gradation may result in business loss (Taylor et al., 1996). Hiring skilled labour in order to upgrade the work force may require hiring skilled individuals across the border. According to a survey report ‘recruiting high-quality employees ranked second as the priority for both international (40%) and domestic (46%) companies (Rioux et al., no date). These skilled labours and professionals actually cost more than the normally available ones. This factor is the main reason behind expatriation. This can expose the HRM to the adverse effects of expatriation and immigration caused by diversified backgrounds of employees. It is due to the fact that if anything seems ethical to one employee may b unethical for the other. For example, an expatriate who belong to a rural area of a third world country won’t take it normal to get a leave from work without informing the boss. On the other hand it would be highly unethical for one from the developed country. c. Difference in level of expertise Another important issue of HRM related with technology advancements. Up-graded technology require expertise which is absent in traditional labours. It can be fulfilled by importing skilled professionals from the international labour market via immigration or expatriation. It is linked the disadvantage of difference in level of expertise among the expatriates of same skill. An IT analyst of one country will have different perception of his work then the other. Majority of expatriated workforce in many organisations is confronting fear of losing job due to unavailability of the matching expertise to get along with the operations under modern environments. This is greatly affecting their performance. This HR practice of forcing employees to learn newer things and adopting newer technologies is not looked as a favourable sign amongst employees and workforce. d. Unreliability w.r.t Information handling With the impulse of advancement in information technology, it is becoming difficult and difficult to handle widely available information. HRM department of many organisations is confronting issues regarding information handling. There are bulks of data available to HR department, so processing all available information and deciding which information should be retained and which should not and how effectively to use that information, is an extremely tough task. But most of all the HRM of an organization face the threat of giving access, to an expatriate, to the sensitive data relating host country or the official matters. According to an organization it is highly risky due to the unreliability of the patriotic dimension of an immigrant. This behaviour often results in the provoking frustration and the feeling of being taken as un-trustable in expatriates. e. Maintaining quality and productivity Globalisation has increased competition. It has become very laborious to retain a customer when he has many choices. The only factor that retains a customer is his satisfaction and trust in your organisation which is gained by the quality of service or product provided. For any organisation, it is essential to maintain its quality standards. This is even true for a service organisation because the level of quality completely depends on its work force, especially the front desk employees. Therefore, in order to satisfy a customer, an organisation needs to satisfy its employee, so that he can perform his task efficiently and effectively. Hence it can be generalised, that customer satisfaction is proportional to employees’ motivation. An expatriate may face difficulty in maintaining the quality and productivity standard. It can be due to inactive workplace incorporation, lack of compatibility with the new cultural ethics and working norms. f. Work performance and workplace environment challenges The performance efficiency of an immigrant greatly depends on the level of satisfaction with the exposure to different nature of work, different place of work and the new organisation he is working for. Traditionally, it wasn’t important for organisations to consider migrants’ expectations and demands while making policies, but advent of globalisation has taught expatriates of their rights as well. This compelled organisation’s strategic management not to overlook them. It has been observed that taking into consideration, the expatriate’s perspective has resulted in improved employee performance and effective achievement of goals. g. Racism and ethnic differences Immigrants and expatriates may confront the issues pertaining race and ethnicity. In some societies racial and ethnic difference meant more than ethics. An immigrant will be more comfortable in working with the people having same race while he may face problem in working with that of different race. It may be due to difference in opinion, difference in perception, difference in views and difference in reaction towards a situation. h. Choosing the right organization Expatriates are exposed to different working opportunities. They also have a choice of selecting an organisation to work with. Immigrants, these days are very conscious about growth opportunities, compensations and fringe benefits. Immigrants may face problem in choosing the right organization to work with. It is a difficult task to judge an organization and its environment, located in host country, from the country of origin. Inability to opt the right option may result in limited growth opportunity, low or zero work satisfaction, lack of social integration etc. i. Effect of changing economic conditions Another major challenge of globalisation is the colossal impact of changing economic conditions. Because of advance reporting, an economic upset in any part of the world leave its effects internationally. Economic downturn in a country may result in increase pressure on an organisation working in that country in retaining all of its employees. This can cause its workforce to expatriate, causing a brain drain and shortage of skilled labour. As well as the expatriates working in that organization may face a fear of loosing job and inability to found another in host country. j. Variable customer psychology Changing environment and globalisation has made customer well aware about the trends. Now, a customer expects a lot from organisation, especially the service concern. Well-trained, motivated, efficient and potential employees equipped with necessary customer relationship skills are needed to meet the expectations of customer. But the demands and nature of customers are different in different countries and regions. An expatriate on a front desk job, in a host country, may experience problem in understanding the demand and mental approach of the customer with different psychology as compare to one in country of origin. k. Financial restraints affecting expatriates Financial restraints, either in form of inflation or compensation, play an important part in HRM. In form of inflation, it affects the economy, thus ultimately affecting organisation whereas in form of compensation, it directly affects an organisation. Increase in inflation results in increase in prices, decreased purchasing power, lower profits on one hand but escalating demand to increase salaries on the other. If the inflation is constantly increasing in the host country, it would be hard for the immigrant to survive. His tendency for savings will decrease gradually and he’ll be unable to remit to his family. This can cause him to become less loyal to organization and the host country and will consider returning to his native land. l. Lack of awareness of host country’s laws Another problem faced by an expatriate is his lack of knowledge and awareness about the governmental and commercial laws of host country. Poor knowledge about the rules and regulation may result in negligence of law and can be risky for himself, organization as well as for the society. Concluding remarks: As discussed above, with the rise of globalisation, there is also an increase in the trend of expatriation, immigration, professional migration, urbanisation, societal paradigm shifts, mix cultural working environment, increased governmental concerns for expatriates, print and electronic media’s influential intervention, unpredictable economic and market trends. According to Hetrick (2002), multinational firms are increasingly viewing HRM as one of the main control mechanisms by which employees can be integrated across national boundaries especially Expatriate managers. It has brought about the environment with mixed traditional business methodologies and has created a challenge for HR managers to confront issues, relating to multi cultural workforce and to maintain the quality, simultaneously (Price, no date). In order to deal with these challenges, organisations require efficient and effective human resource management department that needs to develop pro-HR policies and procedures, adopt modern ways of HR up gradation and training methodologies (Friedman, 2007)(Zhu, 2003). Chapter 2 Unilever -an insight practical approach of HRM Introduction Unilever is a British-Dutch multi-national corporation, established in 1890s, which is operating in nearly 180 countries and possessing more than 400 brands. It has 1, 67,000 employees belonging to 22 different nationalities as of 2010. It is a global market leader in all Food categories including Savoury, Spreads, Dressings, Tea and Ice Cream as well as in Mass Skin Care and Deodorants, and has very strong positions in different Home and Personal Care categories. Its portfolio ranges from nutritionally balanced foods to indulgent ice creams, affordable soaps, luxurious shampoos and everyday household care products. They produce world-leading brands including Lipton, Knorr, Dove, Axe, Hellmann’s and Omo, alongside trusted local names such as Blue Band, Pureit and Suave. The vision of Unilever is: “The four pillars of our vision set out the long term direction for the company – where we want to go and how we are going to get there: We work to create a better future every day We help people feel good, look good and get more out of life with brands and services that are good for them and good for others. We will inspire people to take small everyday actions that can add up to a big difference for the world. We will develop new ways of doing business with the aim of doubling the size of our company while reducing our environmental impact” (About us, 2011). Human Resource Management – Practices at unilever According to the employees and HR officials of unilever, the human resource management within the organisation is commendable. HR managers create such kind of policies that supports and develops the employees which enable them to efficiently deliver excellent work performance. The approach of power delegation entitles ‘empowering individual’, which enables the employees to not only dedicatedly contribute to accomplish the organisational targets but to also achieve their personal and career goals, simultaneously. HR department hires highly skilled individuals from different nationalities and promotes mixed cultural business environment across the organisation. Roles of HR department are categorised into three core areas: 1. Business partners They identify the demands of the business, so that it can make, develop, manage and implement the apposite strategy. They look after the appropriate structure; employees with required capabilities are at right place in order to constructively improve working relationships. 2. Expertise teams They work on the relevant policies, procedures, methodologies and techniques that help each business line to attract, hire, train and retain talented individuals possessing required skills. They also provide a connection with top external experts by arranging video conferences, conducting seminars, arranging workshops, exchange and rotate employees in different areas of on organisation and keep their staff up-to-date with industry’s changing trends and practice. 3. Service teams They are the HR managers who actually deal with information handling and analysis. They deliver and regularly bring in improvements, relating to services like payroll, recruitment, firing, promotions, pensions and benefits, within the boundaries of cost-effectiveness. Results of survey conducted among expatriates at Unilever: Unilever’s HRM practices and expatriation: Supporting Arguments: With the development of technology, techniques and methodologies, it becomes essential for Unilever to take some serious steps towards the development of its immigrant/expatriate employees, in order to effectively utilise its potential human resources. Development of HR has been done through different, recursive practices and few of them are: Proper training of immigrant employees Adoption of modern HR development techniques Conduction of seminars and workshops for expatriates’ awareness Arrangement of up gradation courses for professional migrants Arranging social events for its expatriate employees’ to help them incorporating in new society. Rotational postings. Counter-Arguments: Expatriate employees belong to a different culture face difficulty in adjusting to a newer environment. Being a multi-national organization, it would be more beneficial for the Unilever to place and post expatriate employees in their country of origin due to their familiarity with their culture and traditions Expatriate employees face psychological issues due to nostalgia, ethnic or racial discrimination, and poor adaptability to new society. This affects their work performance. Recommendations: Attrition rate have gone up in the recent years and expatriates are always looking to switch to better, big-names organisations. In these circumstances, it is essential to retain an immigrant. A research on comparative strategies being adopted by competitors to retain employees should be conducted on ad hoc basis. Moreover, employees should be reinforced about the offerings and they should be told what others are offering. Anastasi A Katou builds a hypothesis which states that there is a positive relation b/w HR policies and performances (Katou, 2008). Thus, by adopting such policies to increase or maintain employee retention rate is of significant importance. Paradigm shift of social norms and values have also brought a worthy impact on expatriation and HRM. Emergence of immigrant rights activism and awareness of migration rights have enabled organisations to consider its expatriate employees as assets and to take into account their welfare, in form of employee benefits. With the change in societal setup, different governments have legislated different laws relating to immigrants’ benefits and rights. These laws cover the minimum salary or wage per hour of an immigrant labour, working hour issues, incentives and employee facility matters, holidays and day-offs. In addition, international migration laws have also been promulgated, especially the ones relating to expatriates and immigrants. References Anastasia A. Katou, (2008), “Measuring the impact of human resource management on organisational performance”, _Journal of Industrial Engineering and Management About us. 2011, “Our Vision”, Unilever [online] http://www.unilever.com/aboutus/ourmission/ Alan Price, “Human Resource Management in a Business Context”, 2nd Edition, Thomson Learning Edwards, T., Rees, C. (2006), “International Human Resource Management: Globalisation, National Systems and Multinational Companies”, Pearson Education Ltd. Friedman, Berry. (2007) “Globalisation Implications for Human Resource Management Roles”, _Employee Responsibilities and Rights Journal_, vol. 19, no. 3. HRM Guide. “Organizational HRM”, HRM Guide [online] http://www.hrmguide.co.uk/hrm/chap4/ch4-links1.htm Rioux, S. M., Bernthal, P. R., Wellins, R. S., “The Globalisation Of Human Resource Practices”, Google docs [online] http://docs.google.com/viewer?a=v&q=cache:Qp4eNZw_ul0J:www.ddiworld.com/DDIWorld/media/trend-research/the-globalization-of-hr-practices_es_ddi.pdf%3Fext%3D.pdf+globalization+and+HRM&hl=en&gl=pk&pid=bl&srcid=ADGEESinVgqHrnFCl11VVzRDbOq1xBSMV4DXg9NWrmZ_Q-fEIY1tTjnSCd8yTUwVjWovzyvxOIKAGKPX3Nft0gBIVa0sCNRPS6j81leyWnx8H0udbrg3Hlm9-20kxKH9VtbNC0Bc4TRb&sig=AHIEtbQLYPmr7LoEckumBOBUITDgKslIUg&prmdo=1 Sparrow, P., Brewster, C., Harris, H., (2004), “Globalising Human Resource Management”, _Routledge, London_. Taylor, Beechler, Napier. (1996), “Towards and integrative model of strategic international human resource management”, _Academy of Management Review_, pp: 959-985 Zhu, Ying. (2003), “Responding to the challenges of globalisation: human resource development in Japan”, _Journal of World Business_, vol. 39, pp: 337 Glossary: Business – commercial activity done to get profit Cross cultural integration – inter-mixing of different cultures to give rise to a new culture Demand shift – increase or decrease in demand of anything Employee – person working at an organisation is the employee of that organisation Expatriate – one who has taken citizenship in a country other than its native land usually for the purpose of economic benefit Expatriation – the process of being expatriated Expertise – specific specialised skills Globalisation - is increasing connection and interaction among the countries of the world for the development of the global economy Go green revolution – revolution that aims at the use of environmental friendly products and process and to avoid things that are hazardous to environment Good will – intangible asset valued as the reputation of a business HRM - stands for Human Resource Management. These are the administrative activities in an organisation that focuses on planning, recruitment, selection, orientation, training, appraisal, motivation, and remuneration of the employees Immigrant – a person having immigration of the host country other than its origin country Incentives – financial or non financial reward, usually given to employees, for motivation and to increase work satisfaction Labour – human activity for the production of goods or services in an economy against an economic gain Market – a place of trading goods and services against an economic consideration MNC – stands for Multi-national companies. These are companies, operating its business in more than one country Multi-Culture – the environment, which comprises of peoples with different cultural backgrounds Open market – the type of market where prices are characterised by demand and supply mechanism Organisation – the group of people work collectively to attain a shared goal. It normally refers to the business entities and profitability goals PR – stands for personal relationship Retention – process of retaining something or someone Service-oriented economy - type of economy that greatly depends on services sector rather than the manufacturing sector Strategic management – level of management in an organisation that develops strategies for business Urbanisation – the process of movement of people from rural to urban areas Wok force - human capital of an organisation Read More