Globalization of Human Resource Management - Literature review Example

Globalization Globalization Introduction Contemporary developments have led to progressive convergence of human societies and inherent global integration of various activities including international markets. The current enhancements in strategies and forms of communication, computer technological developments communication, and sophisticated transport methods have made the world more inter-reliant ever. Currently, most international firms inherently manufacture their products in diverse nations and conduct marketing within the global market (McDonnell, Lavelle, and Gunnigle, 2014, p. 362). Such interactions and developments have enhanced transfer and exchange of money, raw materials, ideologies, diversity integration through various continental regions. Moreover, the integrations have led to various laws establishments, sociological movements and global integration of economic activities. Consequently, the term globalization defines the progression of integration and relations amongst organizations, individuals, and Nations of varied regions. The process of globalization enhances through investment, worldwide trade and information technology subsequently has effect on culture. In addition, globalization inherently has effect on environment, economic development, prosperity and political systems and physical well-being of societies across the world (GPF, 2015, p. 1). Essentially, globalization developments establish regulations that integrate international and local countries into a converged culture that embraces international policies. Globalization has led to establishment of new markets and wealth despite inflecting suffering, turbulence and disorder throughout the globe. Technological and policy development have impelled amplification in investment, international trade and migration making various individuals affirm that the globe has merged into economic qualitative development phase. The government has negotiated a dramatic change in barriers reduction to commerce and established agreements in international platforms to advance trades for skills, goods, investments and services. Citizens from all nations need to understand globalization policy changes and how to balance its cost and benefits (Globalization, 2015, p.1). Globalization of Human Resource Management The transformation of human resource to modern businesses faces complex and numerous challenges as well as exploits opportunities. Factors that results to rapid transformation of human resource arise from globalization. Many organizations across the globe compete to pool talented and excellent workers to carry out various tasks in their organizations. The organization talent acts as a source of sustainable competitive advantage that can affect organizational most important outcomes. These outcomes may include organizational survival, level of customer satisfaction, employee’s performance and profitability. Human resource requisite technological advantage and data analysis to build global information system for human resource that can collect data from different sources and store. The information stored in the system can help in predicting future performance of the organization and strategies needed to fulfill the needs (Raj, 2010, p. 360). Factors That Drives To Globalization Various factors act as a driving force to increasing level of globalization of human resource management. These factors include low cost labor and growth of consumers in developing countries, talent shortage in developed countries and technological progress. Discussion for these factors explained in detail below. Talent Shortage in Most Developed Countries Most of developed countries such as United States, japan and Germany face long-term shortage in talented employees despite current unemployment and downturn. The shortage of talent in these developed countries result from retirement and aging of professional and skilled employees. The study shows that these countries have more workers retiring than those joining labor force. The study shows prediction of talented workers shortage in manufacturing industries, hotel, transport, construction, IT, health care and finance services. These will necessitate the country to outsource the talented employees or workers from elsewhere across the globe (Bratton, Forshaw, Callinan, Sawchuk, and Corbett, 2010, p.475). Technological Progress The powerful technology such as intranet, internet, data warehousing, enterprise resource planning and data analytics have made globalization possible at cost effective manner. Technology created global platform, which allow people to share knowledge, share work, collaborate and compete thus improving the performance of the workers in organization. Cloud computing and virtualization to advance remote access as well as support technologies act as driving force to globalization. Many jobs such as animation, call centers, software development and transcription can remotely take place easily due to globalization (Barker, Mercer, and Bird, 2009, p.21). Availability of Low Labor Cost Emerging countries provide low labor cost to developed countries that necessitate them to outsource talented employees to work in multinational organization. Most developed countries make higher profit through employee workers from differ countries that provide labour at lower cost thus increasing globalization. Most organizations prefers to employ talented worker from other countries at lower cost than from within their country to cut on cost for production (Bidgoli, 2010, p.801). Human Resource Management in the Global Perspective: Theory and Practice Human resource management refers to universal terms of policies, processes and strategies that have gradually put in place to replace personal management (Morris et al., 2009, p. 978). Developing and managing human resources in global or international situation has posed a great challenge especially to multinational enterprises (Kramar and Syed, 2012, p. 12). Human resource management involves both practical business and academic theory, which addresses practical and theoretical techniques for managing workforce. The paper will define human resource management, business practice, theoretical discipline and international or global human resource management. The paper will also concentrate on issues or global perspectives in global human resource management (Marler, 2012, p. 6). Human Resource Management It refers to rational and strategic approach of managing most valued asset in an organization including employees to achieve outlined objectives. Human resource management defines organizations functions that focus on managing, recruiting and providing directions to the people working in an organization (Patel and Cardon, 2010, p. 265). Influence of human resource management has inherently outfaced personnel management as employed previously (Festing, 2012, p.37). Functioning as a company’s organization agent, HRM largely defines regulation of employment at workplace level and within the entire community (Gilmore and Williams, 2012, p. 319). Essentially, the model of HRM largely focuses on the following factors Developing needs for searching new working ways Advancing transformation as a the managing essential role Encouraging employees to ruminate management as partner and not an opponent Treating employees as individual and not a collective workforce Theory Theoretical discipline focuses on the assumption that employees have varying needs and goals, which should not refer to basic business resources. Theoretical discipline view workers positively presumptuous that they remain visionary towards business productivity hindered mainly by unsatisfactory training, process malfunction and lack acquaintance. It functions as an innovative view for managing workplace to ascertain that proper practice of human techniques may express organization goals and objectives positively (Chitakornkijsil, 2010, p. 379). In contrary, academic theory state, the goals for HRM that helps the organization meet those strategic goals through maintaining, attracting and managing employees effectively. The HRM seek to enhance fit between employee’s organization management and general strategic track of company. The academic theory states that humans or employees are not machine thus a need for interdisciplinary examination for individuals working in the organization. Consequently, other imperative related professional fields including sociology and psychology remains introduced for fundamental functioning (Chitakornkijsil, 2010). Practice HRM that defines various business activities entails entity processes, which find unified applications in attainment of fundamental theoretical goals of a specified firm. The following forms the different processes: Performance evaluation Administration benefits for employees Payroll Travel management Skills management Training and advancement Induction and placement Personnel governance Salaries and wages recompense Recruitment Labor force planning Time administration Travel management International or Global Human Resource Management It refers to a process of developing, employing and rewarding individuals or employees in global or international organizations. The process involves worldwide employee management to ensure that they perform the assigned tasks effectively and improve productivity of the organization. International firms or organizations operates overseas and rely mostly on parent company for manufacturing capacity or business expertise. Such organization or company may come with their own attitude in management as well as business style and implement them on organization at hand. The HR manager cannot risk in ignoring international influences to their employees at work. Issues in Global or International Human Resource Management Various issues arise with international human resource management. This issue includes: Varying of HRM policy and practices in different countries Different countries have their policies and practices that administer them in the performance of business activity. At time a particular sovereign countries may be unsuccessful in appreciating the policy used by other nations thus resulting to divergence. In contrary, a company may adopt policies and practices used by other country in carrying business thus causing into convergence. The extent in which human resource practices and policies differs from those of other country result to an issue known as convergence and divergence (David et al., 2014, p. 567). Managing people with different culture and environment Another problem arises in managing individuals who come from different culture and environment. A practice carried by an individual from on country may seem wrong to another person from another country with different culture (Vance and Paik, 2014, p. 326). This problem results from different societal influence that affects attitude, perception and personal reference towards a particular activity. The human resource manager has a task in persuading and encouraging the individual from different background understand and appreciate other people’s culture (Shirley and Reitsperger, 2013, p. 38). Different Approaches Different countries employ their approach while selecting, deploying, rewarding and developing employees from various countries. This results to an issue since each employee has own approach and different needs. The organization has a duty to distinguish different employees according to their needs and preferences while conducting the process. By choosing, the best and appropriate method for an employee improves the morale and motivates the performance of business activity that leads to productivity improvement (Robin and Jawad, 2012, p.70). Various International Organization Models International management of human resource also faces another issue in regards to variety of different models used. The human resource manager faces an impasse when deciding on a suitable and applicable model in managing a business with the aim of enhancing its productivity. Different employees from various countries also have their model of performing certain activity. Thus, HR manager has to make them appreciate the essentiality of using his model (Juul, Andersen and Minbaeva, 2013, p. 809). Extra cost will remain incurred in training of employees to enable them to adapt to the contemporary model (Sparrow, 2009, p11). Various international organization models include: Centralized Hub Model This model focuses on global market instead of local market. If looks at the factors that affect the performance of global market as whole rather than concentrating on local market. As a result, the model of such organization truly shows global focus rather than multinational (Chitakornkijsil, 2010). Coordinated Federation Model This model defines development of refined systems to administer and preserve the overall control of the organization operation. The model gives local management a scope to adopt policies and practices, which recognizes market conditions of local operation. The model ensures that practices adopted do not affect the performance of local markets (Parry, 2013, p. 13). Transitional Model The model largely maintains its intention on strategies related to global dimensions. These strategies focus on firms worldwide competence. The model also allows local market to respond to various market requirements. Thus, the model considers both the local and international operation of the business to enhance productivity (Mellahi, Demirbag, Collings, Tatoglu, and Hughes, 2013). Decentralized Federation Model It forms one of the traditional corporations of multinational activities. The model refers to the management of a national unit as a separate entity. The performance of national unit as separate entity seeks to maximize its operation to improve productivity in local environment. Effect of Globalization on Human Resources Management Globalization in business refers to integration of organization’s processes, strategies and operations to diverse product, ideas, culture and services. As a result, globalization has deep impact to the way organizations manage their employees due to the emphasis put across on diversity. Better understanding of impact of globalization on human resources helps manager devote better strategies in their organization to increase global business environment. The impact of globalization to human resource management includes: Diversity recruitment Rise in globalization has enables organizations of all sizes to interact with stakeholders and customers from diverse language, social background and cultures. In response to this, many human resource managers of an organization seek to employ workers from diverse background equally. Companies that engage in diverse recruitment seek to find and recognize the value of working with people who can relate well with their customers. The managers know very well that working with diverse employees can also contribute influences and range of ideas to the organization (Lertxundi and Landeta, 2012, p. 1788). This enables the firm to explore a competitive advantage due to excellent performance thus increasing customer loyalty that lead to increasing level of profit collection. Training emphasis Globalization has led to increased emphasis for training employees in human resource management. Training mainly focuses on the development of professional competencies and needs to the groups of workers or employees carrying out various tasks in the company (Mohamed, Singh, Irani, and Darwish, 2013, p. 2054). For instance, a company may offer language-training classes to enable its call Centre employee or staff know how to undertake and carry out telephone sales. The company can also train employees on how to use new platform of global software in carrying out the business. Company engaging on training employees emphasizes on gaining competitive edge for the company in global market in order to encourage employee’s diversity (Gilmore and Williams, 2012, p.319). Professional development push Globalization has also cause effect on professional development push for human resource management. The concern for professional management involves providing an opportunity for employees to achieve related goals in their career. Organizations develop their employee’s professionals through proving resources for employees to earn university degree. Other companies send employees to networking events or conferences and training days to acquire knowledge of how to interact and carry out business. This enables an employee feel the organizational concern in developing their competence and skill in field of their duty performance thus improving on quality production. The organization also benefit in adding skills and connection of their employees since they can take advantage of the employee to develop professional programs. These programs enables the organization maintain its competitive advantage in the market environment due to production of quality output. Law Management across Jurisdiction Another effect of globalization to human resource management creates a need for the business to understand as well as applies laws of jurisdiction in particular business. Federal government has set tax number and labor law for business operating in United States to comply. Number of laws also set for local and regional companies to comply with while operating in different countries and states. Company should understand that hiring an employee from different location or region might change the requirement on working hours, tax allowances and minimum wage. Thus, understanding of these laws plays vital role to organization since bleaching one of them may cause serious impact to business financial performance and its reputation (Barker, Mercer, and Bird, 2009, p. 21). Convergent Effect in Human Resource Management Because Of Globalization The issue of globalization has brought a great effect in human resource management. This effect has resulted due to increased openness of transparency and communication across the borders. Globalization makes it easier for organizations in a certain country to observe and emulate behaviors and practices of aspiring company model (Rowley and Benson, 2002, p. 90). Many organizations have adopted dissemination of approaches like just in time and total quality management techniques introduced by western capitalism. The use of international organizations for standard (ISO) has promoted development of standardizations. This has pooled customers from different country converge as they develop similar needs and desire for particular product with specific standards and quality. Profession for human resource management has also changed in past years thus expanding cross boarder operations. This has facilitated human resource management to move towards harmonization of professional standards and competency based on best practice recognized. Human resource professional obtaining a global professional in human resources (GPHR) certificate will help him have responsibilities to operate business across the border. This is because he possesses competencies for developing as well as implementing global human resource policies (Khavul, Benson, and Datta, 2010). The certificate obtained introduces standardization and uniform human resource practices and policies to the firm that enables it gain competitive advantage. The aforementioned factors for globalization have facilitated convergence among institutions and firms. Globalization has integrated production and markets that has led to similar production of product resulting to customers developing the same needs and desire (Dobbin, 2005, p. 569). Rapid increase in level of technology has led to similar performance of human resource that has led to convergence of HRM practices across boarders and culture. Other factors that facilitate convergence of human resource management include market power and costs significance. Other factors such as quality, productivity pressure, benchmarking and like-minded international development has led to convergence of human resource management (Yongsun, Chow, and Vanve, 2011). Besides, development and establishment of various multinational companies across the world has led to enhanced convergence of human resource personnel. Establishment of the multinational companies subsequently enhanced formulation or regulations including embracing diversity. Such global policies have enhanced convergence of human resource regulations, operations, and inherent personnel. Consequently, globalization influenced formation of multinational companies and introduction of international human resource policies that embraces diversity and convergence of personnel. According to Woywode (2002, p. 497), establishment of multinational companies including car industries led to formulation of human resource policies including working groups. Such car industries with locations in various parts of the globe including Japan, Germany, and France embraces convergence of human resources within the global market by encouraging working groups adaptation. It is imperative that globalization influenced human resource policies and realization of convergence. Factors That Continue To Foster Divergence in Human Resource Management Practice Advancement in intensity of technology and information broadcasting has led to globalization in free enterprise and market economy of some nations. However, market economies of some nations have no expectations of change due to factors including economic, political and legal environment of the countries. Number of cross-borders acquirement and merger has advanced in relation to globalization, which have affected management and implementation of human resource practices. It is reasonable for organization to assume that diversity occurs to an organization since the states stick to their political, economic and legal aspect. Culture also forms another factor that lead to diversity of human resource management. These result because different employees come from different background, which have different culture. Adoption of different culture could not be easy since each organization has what they believe in. if the culture do not tally, diversity emerges. Conclusion In conclusion, the paper has mainly focused on issue of globalization and the effect it has to human resource management. Globalization defines a process of developing, recruiting and rewarding employees in different areas across the globe. It focuses on how organization carries out business across the borders of other nation freely without any restriction. The paper has explained issues of globalization to human resource development into details. Factors such have availability of low labor cost leads to globalization. Globalization of human resource management has also led to convergence and divergence of human resource. Factors that lead to convergence include advancement in level of technology, productivity, quality and benchmarking. In the contrary, even though technology has some benefits towards attracting different customers together it may lead to divergence at some time. Factors that lead to divergence of human resource management include political factors, legal factors, cultural and economic factors. The organization has to consider these factors to enhance the productivity of the business. Bibliography Barker, B., Mercer, J., & Bird, R. (2009). 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