International and Comparative HRM Assignment.
The international Human resource Management of Multinational companies is one
that is subject to pressures. At the same time, there are pressures from internal consistency. International and Comparative HRM Assignment.
This is more in geocentric and ethnocentric Multinational companies, which aim to have parallel employment practices worldwide. On the other side, foreign subsidiaries of the multinationals face pressures for adaptation from local institutions. The country in which this host countries impact is related to the strength of local systems (Schulte, 1988, p.180). Most
of the research in the field of international human resource management practices has
examined their subsidiaries in the deregulated countries such as the United Kingdom and the
United States, in which organizational autonomy is restricted. As a result, of less research on
other countries, much less is known in those countries with strong systems.
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According to Edstrom and Galbraith (1977) there are three main reasons why
companies sent expatriates on international duties: to fill positions when there is skill gap, for
management development, and for organizational development. There may have been a shift
from filling a skill gap to management development, but these reasons are much in practice
today. Traditional practices dictate that only parent country nationals would be sent to fill the
expatriate positions. However, as companies become more international, the role of
employees from other countries has increased. Various researchers emphasize the growing
significance of bringing employees from other countries to the company’s headquarters.
Research has concentrated on the selection criteria used for international employees
or expatriates. Technical expertise and domestic track are cited as the most important. International and Comparative HRM Assignment.
However, most companies do not follow a systematic procedure in doing their selections.
Human Resource emphasizes the importance of integrating different practices, such as
selection, training, and rewarding. These practices are no longer looked at as separate tasks of
a personal department, but are part of integrated strategies, which are formally endorsed by
the management. Integration of employment practices is a prerequisite for development of a
committed workforce as well as one with a strong culture in the multinational companies. In
considering the international and comparative human resource, this paper will consider how
they are practiced in selected countries. These are countries have institutionally strong
systems.
International versus national Human Resource Management
Human resource management at the national level is less complex as that within
multinational companies. The confrontation within the external setting and the environment
lead to complex systems of Human Resources. This is coupled with different nationalities as
well as geographical distances and the different Human Resource systems. Higher proportion
of complexity arises because of what researchers say is national differences in the cultural
context, legislative systems, and the stage of development of the economy of the given
country. Based on the works of several scholars, Schulte (1988) says the following can be
classified as the higher complexity of international Human Resource Management.
Firstly, are more Human Resource Management activities and Functions: He says
because of higher complexity of the multinational companies, and their national and
international subsidiaries, the amount of Human Resource activities and functions increased.
This means that the department is faced with more task next to national Human Resource
Management, and it has to deal with diverse types of employees in the relevant countries
(Schuttle, 1988, p. 183). International and Comparative HRM Assignment.
Secondly, broader perspective: Schulte says, multinational companies have to
consider a wider array of factors, in reaching a solution to a given issue. They are faced with
different economic and cultural systems.
Thirdly, higher degree of involvement in the private sector of employees: This is
more so in the field of expatriation, where a higher percentage of involvement in the private
sector becomes necessary to reduce additional burden of expatriates. For instance, in coping
with different location, social security, and housing problems (Schuttle 1988, p. 183).
Fourthly, change in the importance of Human Resource Management activities as per
the maturity of the foreign business: Schulte say the Human Resource Activities can change
during the organization’s international process.
Fifthly, is the higher risk as well as degree of insecurity: Here, organizations face
risks in decision they have to take, for instance, in termination of expatriate employees earlier
than agreed among other hard decisions.
Lastly, we have higher degree of external influences: Schulte says multinational
companies operating within national context, face more external influences on their
management of human resources than national companies Schuttle 1988, p. 184).
We above, we see that international Human Resource Management is faced with a
variety of tasks beyond the national Human Resource Management. The international Human
Resource Management needs to deal with heterogeneous external factors such as cultural,
legislative, and economic aspects of the host countries, which lead to a higher degree of diversity, fragmentation, and dissimilarity (Dalton, & Druker, 2012, p. 588). They also face
higher internal complexities of multinational companies and their subsidiaries, requiring
more of international co-ordination. International and Comparative HRM Assignment.
Human Resource Practices in German, Japanese, UK, and US Multinational Companies
Similar to the German-owned firms, the multinational companies in Germany usually
select new employees through an analysis of applications and job interviews. This practice can be found in most countries. However, compared to other European countries, and more
so United Kingdom, tests are rarely used in Germany by the companies operating in the
country. Research has found out that this form of selection is only used for apprentices. Most
firms use structured inductions for newly recruited graduates. Most of the trainees in
Germany firms rotate for up to two years through different departments in the firm for
acquiring general introduction. Trainees in foreign firms on the centrally start in a specific
job for which they are given responsibility after a while.
When it comes to appraisals, there are minimal differences according to the national
ownership of companies operating in Germany. Most of the firms in the country have written
appraisal schemes. Subsidiary firms from UK and US use innovative appraisal schemes,
which they have transferred from their parent companies. In Germany, it is notable that
foreign firms invest less in initial vocational training, than the Germany firms do. Towards
further training, all the companies seem to invest equally towards employee training.
Cross-cultural training has been widely acknowledged as having impact on foreign
workers’ performance (Dalton, & Druker, 2012, p. 589-600). During the 1980s, companies
did not often give foreign workers with training. However, today, companies recognize the
significance of cross-cultural training, and they have increased their practices in availing the
necessary training to the employees.
Researchers studying the measurement of foreign employees performance say that
there are many difficulties related to doing so, including lack of comparability of data
between subsidiaries, external influences, and the challenge of finding a team of evaluators
that can ruminate the goals set by the home operations as well as the local circumstances
(Kopp, 2006, p. 583).
Human resource managers in the multinationals find it difficult to operationalize
successful expatriate assignments. Different researchers have used different methods to
measure this. Failure rate has been one of the most widely used. Nonetheless, there was
general agreement that American companies had a higher premature return rate than, their
European or Japanese counterparts (Pudelko, & Harzing, 2007, p. 211).
Compensation and benefits are factors that Human Resource Managers of
multinational companies have to deal with just as recruitment, selection, training, and other
duties. Organizations have an incentive to come up with fair staff compensation system. A
higher valued compensation and benefit package is needed to recruit the best candidates.
Compensation and benefits assist in binding employees with the organization as well as avoid
absenteeism (Kramar, & Syed, 2012. p.47). At an international level, multinational
companies can use their compensation systems to encourage or discourage international
mobility of their staff. Human Resource Managers at the international level face the issue of
compensation and benefit systems not being compatible with national systems and their
subsidiaries (Kapoor, 2011, p.7). Both the structure and level of compensation of similar
positions in different countries vary significantly. Even if the level is the same, there may be
differences in structure as the mix of variable, and fixed salaries as well as non-monetary
benefits vary.
The type of compensation and benefit system depends a lot on the internationalization
of the organization. Multinational organizations, which follow ethnocentric plan, try to
transfer their compensation as well as benefits systems to other countries to reduce the
administrative burden and to raise the simplicity and comparability. For example, all
expatriates are treated equally, regardless of the country they are working in.
7
Looking at Human Resource Management from a polycentric perspective, the country
specific different systems are the guiding factors. Therefore, the entire comparability lags
behind and the burden of administration surges. These disadvantages are decreased and the
advantages are used using geocentric strategy. Here, organizations guidelines reduce the
administration burden as well as raise the comparability of the system without losing sight of
national differences. A well-formulated international compensational system shows the
success of international Human Resource Management, as it shows the consideration of
cultural and external factors as well as the overall fit with the organizational circumstances
(Beardwell, & Holden, 2005, p 53).
The compensation and benefit systems of a multinational company vary with the stage
of internationalization. As internationalization advances, the home country based models loss
significance. Majority of multinational companies relate their foreign employees’
compensation to the basic salaries of the host country and balance out the difference so as to
avoid lower income levels that what the employee had before (Briscoe, Schuler, & Claus,
2008). Generally, international compensation systems show a higher degree of transparency
and flexibility among the employees. The challenge of compensating expatriates can be made
more transparent. A multinational company that wishes to use expatriates faces the challenge
of pay cuts, which the potential employee may not be willing to accept. On the other hand,
the companies aim at equalizing local pay for the same position (Beardwell, & Holden,
2005). The problem of comparability in many ways helps to solve the issue of transparency
when viewed from an expatriate context. International and Comparative HRM Assignment.
Organizational factors
The headquarters of multinationals choose different policies or practices across a
country but national and subsidiaries do not necessary do so. This is likely because of
organizational differences (Kapoor, 2011, 6). When it comes to the use of corporate as well
as Human Resource Strategies by multinational companies, it is clear that they have
developed strategies as well as policies that do differ a lot across countries. Having a Human
Resource strategy is a common thing among companies and does depend on the Headquarter
or origin of the company. About 90% of all multinational companies have Human Resource
Policies, which are a little different across the types and across the countries (Kapoor, 2011, 7).
Strategies Used by International Human Resource Managers
Related to strategic business partner in the development of competencies, businesses
continue to be shaped by the globalization. The International Human Resource Management
needs to understand the pertinent issues as well as contribute to the effective changes in management by way of active participation in discussing issues with the multinational
company (Dalton, & Druker, 2012). One example is the development of a superior customer
service by talent management in the host country by collaborating with the local market department. (Kramar, & Syed, 2012) argues that Human Resource needs to be more informed about the business it purports to serve. Business competences within the International Human
Resources can be developed through professional development practices such as job
enrichment, job re-design, and job rotation.
Human resource managers in multinationals companies play the harmonization of
local and global Human Resources procedures and policies. Given the differences in the international socio-cultural, political, and legal environments can affect the extent to which Human Resources procedures and policies can be standardization, international Human
Resources managers need to have the acumen to implement the Human Resource procedures
and Policies with their host country counterparts (Almond, 2011). For example, rather than applying a seniority based reward scheme, as found in Japan, Canon accepted a performance-
oriented strategy when operating in the US. More so, German manufacturers, which have experienced in dealing with unions, have selected to congregate in the largely non-unionized states. Kopp (2006) has found that Japanese companies tend to use ethnocentric staffing, practices than European and American organizations. International and Comparative HRM Assignment.The consequences face more
challenges with their international Human Resource Advisors. The managers are expected to make a balance between standardization and localization of Human Resource procedures and policies.
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Steaming from the standardization debate is the gravitation towards best practices in
the international Human Resource Management. Brewster and Harris (2006), for instance, suggests that many Human Resource Processes such as employee branding, talent
management, management of the international workforce, and management of international assignments can add to the company’s capacity to cope with globalization efficiently and effectively. PUdelko and Harzing (2008) have stated that due to subsidiaries of Japanese and
Germany multinationals in the United States gradual adaptation of the United States Human Resource practices, and United States corporations in Germany and Japan are less will to adapt, there is a unfairness towards American Human Resource practices. Researchers who
focus on Africa, Asia, Europe, South America, and Middle East have reported similar
interests. This means that there is an international search for a panacea in way of best
practices in the international human resource management. International and Comparative HRM Assignment.
The challenges facing International Human Resource Managers
Human Resource Managers in multinationals are concerned with the global
coordination as well as alignment of Human Resource procedures and Policies to the business
goals. The challenge in this area is having the required knowledge about the limitations and extent to which policies and procedures can be standardized across the globe (Dalton, 2012,
p. 602). There are some overarching international procedures and policies, which are used to
coordinate as well as align Human Resource business across the globe. With this, the
Management of these strategies at a local level is different due to environmental factors.
International Human Resources Managers face the challenge of diversity
management, more so, with respect to managing the expectations of the workforce. Societies
have a higher level of gender egalitarianism; tend to put emphasis on equal employment
issues as well as affirmative actions compared to those with low levels of gender
egalitarianism. As a result, equal opportunities, which are part of companies’ policy in
countries such as UK, US, and Canada, may not be easily put in place by multinational
companies’ Human Resource Managers in other countries (Selmer 2003, p. 127 ). This is leading to some women expatriates having to struggle to gain acceptance in some of the countries they go to work in around the world. Cultural differences can also result in cross cultural communication challenges as well as conflicts. Differences in communication and expectations style between the indigenous and foreign workers as well as their managers can be an origin of workplace conflicts. According to Hall (1990), communication difficulties can be worsened by the setting in which people interact. He says that some characteristics are believed to be mutual for people coming from a low setting culture; for example, the use of logical, explicit, and action-oriented communication style. In the centrally, people from high setting cultures tend to put emphasis on non-verbal signals, use of process-oriented and non-linear communication style. Due to this, the human resource management needs to have the necessary knowledge, abilities, and skills to manage diversity among the workers.
When it comes to effective facilitation of international goals of a company, the
Human Resource managers are having a hard time with managing the employee to work in harmony towards this common goal. With the coming of technological advancements, it is
now possible to conduct meetings as well as share practices and knowledge around the clock
(Kapoor, 2011, p. 8). However, there are differences concerning work time and this result in
logistical challenges in multinational companies. In other studies carried out regarding global
virtual teams using cultural dimensions, members’ perceptions and expectations differ from
one culture to another and country to country. International and Comparative HRM Assignment.
Conclusion
The paper has looked and compared the international Human Resource Management
practices around the world by using some of the countries that have many multinationals
operating across countries globally. National Human resource practices differ in countries
and affect how the multinational implement their policies to the subsidiaries, and tally them
with their headquarters. The differences also affect the expatriates who go to work in these
subsidiaries. However, globalization is bring some of commonness in the International
Human Resource Management. The managers are having challenges I dealing with diversity
of the workforce, and the differing practices. However, they are finding it beneficial to
transfer some of the innovative instruments and diversifying the headquarters by taking expatriates to go work there. The internationalization of multinational Human Resource Management will continue to undergo changes and this will bring continuous improvement in international Human Resource Management.
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International and Comparative HRM Assignment.