International Human Resources Management

Abstract

International human resource management is becoming increasingly important for the success of multi national organizations.  Presently, organizational forces have required that firms devise and implement global based strategies for the success of their businesses.  One of the   most crucial choices which IHRM practitioners encounter is whether to incorporate human resources regulations and practices in the regional context. International Human Resource Management Orientations (IHRMO) typology elaborates what IHRMO’s is and what is involved is established from reviewing literature from both this local and regional aspect.  The purpose of this study is to examine the inter-country differences which affect the IHRM. Some of the aspects explored include training and development, health and safety, payment systems, and the role of the human resource function.

Introduction

International human resource management (IHRM) is the practice of managing people across international boundaries by organizations that operate on the international level. In essence, it includes: the global management of employees and people and not just expatriates. The typical role commonly undertaken by a human resource manager includes: selection, recruitment, performance appraisal, dismissal, promotion management, training and so on. International HRM can be explained as a set of operations that are focused at managing the companies’ human resources at an international level so as to realize the company’s goals and achieve a competitive advantage over the competitors both at the national and international level (Marchington, 2013).  The typical functions of the IHRM may include: selection, recruitment, performance appraisal, training and development and dismissal function at an international level.  Other operations may include expatriate management, global skills management and so on (Spackman, 2010).

Differences between DHR and IRM

There are three types of employees managed at international level namely; home country employees, host country employees and third country employees. Among the significant differences   between the domestic HRM and international IHRM is that, domestic HRM is on national level while IHRM is on the international level (CFMS, 2010). Broadly speaking, international human resource management  perform the same functions  as those performed in the domestic HRM,  only that  in domestic,  these activities are performed within the boundaries of a nation. On the other hand, the international HRM performs these operations in at least more than three nations.   This is the country where the International organizations are based, the host nation where the unit is located and the countries where the employees or the human resources of an organization are derived.  This means that employees in an IHRM can be derived from the parent country, host nation, or a third nation (Saleeth, 2010).

 

Role of IHRM manager

International human resource managers are mandated to handle personnel issues that are associated to the foreign operations of an organization. In essence, IHRM operate worldwide in regions where there businesses are located. They assist in placement of employees who are expected to operate in oversees assignments. Other assignments may include:  preparing employees to working in international operations and translating the cultural and customs of the company in the host nations (Merkle, 2012).

Current Models of IHRM (in diagram form)

Adapted from Zheng (2011). “Towards An Extended International HRM Model for Emerging Multinational Enterprise” World Academy of Science, Engineering and Technology 53 2011. http://www.waset.org/journals/waset/v53/v53-17.pdf

Human Resource Planning Strategies (In diagram Form)

Adapted from Simpson, (2010). “Strategic HR Planning & Analysis Model”

Human Resources Systems Group

 

 

 

 

Inter-Country Differences in IHRM

How Inter-Country Difference Can Affect IHRM Practices and Policies

Human resource management practices and policies tend to vary from one country to another.  A study undertaken by Rao, (2010) was interested in evaluating the human resource management practices   in various countries around the world. The study offered snapshot for both the similarities and differences in the wide range of nations that were under study.   Aspects that were seen to be conspicuous were Cultural and Technological Differences.

Cultural Differences

Along with differences in nationality, people from different countries also have different cultures. Culture is the way of life of a particular group of people and national culture is hence the way of life of citizens of a particular country. In regard to Human resource management, culture has an effect on issues such as power-distance and also work ethic. Elements such as recruitment and training are also determined by cultural differences.

In this study it was found that employers tended utilize almost the same criterion for selecting their employees. In U.S for instance, employers tended to rank interviews.  The capability of a person in undertaking the technical necessities of the job and the proved   work experiences in a similar area are the methods that were employed   in this countries.  This behavior was similar in such countries as Latin America and Australia.   In these countries, the cultural differences showed a great influence across these countries. It was established that in Mexico, a top consideration for being hired   was based on having the right connection while in the People’s Republic of China, Korea and Indonesia, employee tests were regarded as one of the top three practices among the organization.  In Japan and Taiwan, one of the personnel selection criteria is the capability of an individual in getting along with others in the same company.  This criterion was not observable in other countries that were under study. With regard to the use of financial   incentives were seen to be counterintuitive.  The survey reveals that incentive plays a minimal role in US pay systems. Japan, the people’s republic of China is seen as playing a significant role.

Technological Differences

Like culture, technological differences that vary from country to country also have an effect on the manner in which the human resource aspect is handled. Technology is significant to the communication networks, transportation and also mechanization in the place of work. The technology that is in use in a particular country is also heavily dependent on the training facilities that are present in a country. When employing individuals form different nationalities, it is crucial that the human resource manager takes into account this factor since it can help in term of setting the necessary qualifications that need to be met. Some technologies require a special license to operate and it is thus crucial for the HR manager to ascertain this. Government regulations regarding the safety measures to be taken in the handling of these technologies should also be adhered to.

Legal or Legislative Factors

Different countries have different legal systems and this means that the part of the law that touches on employment will also differ. Issues of concern to international human resource management in this context include the minimum wage, employment age, taxation of salaries and also the rights of workers and those of the employer. Other elements that fall under this docket include the power of UNIONS and their membership. At times legally accepted ways of Dispute Resolution methods are also proposed by the law. In some countries, Industrial courts have the jurisdiction to rule on cases between employees and employers.

Industrial Differences

An industry is a collection of firms that supply the market with a similar product. Though the products may be the same, industry in which a firm’s work falls in may be categorized differently depending on the country being analyzed. Having an appreciation for this can be highly beneficial to a human resource administrator. Recruitment and training of personnel can be efficiently done with ample knowledge of this since positioning and placement of personnel will be tandem to the best practices that are already in application in the particular country.
Employment and Staffing in Finland and France

In Finland, there are about 125 000 employees who are either categorized as civil servants or employees under contract.  The municipal staff is also constituted of civil servants and those who are on contract in equal measure.  The ministry of finance is mandated for issuing policy guidelines with regard to the administration of state employees. The state agencies which are independent implement their own policies and personnel guidelines concerning human resource management aspects such as recruitment, vacancies, salaries and human resource development.   The central administration is mandated at directing and supervising the implementation process of the agencies through an approach of the management by results in their various policy fields (Khartoum, 2008, 26)

The department of service in Finland has a transparent recruitment system, clear and open employment qualifications for entry and also for promotion. The examinations required are the usual University tests. The rights and responsibilities of the state employees are clearly stipulated in the civil servants policies. The general terms and legal status of state employees are regarded as being the same as those of other employees. In Finland, the position is much more important that the career system. In other words, there is no elite system of education which has been initiated for the purpose of preparing “highfliers” in the civil employment system.  The terms of service and remuneration are stipulated by means of collective agreements identical to those of the private sector. The payment system (Khartoum, 2008, 27)

France

Public employees in France are contractual employees, civil servants, military staff and magistrates. The total number of civil employees is approximated to be 4.8 million which are categorized as state employees, local government employees, hospital administrative employees and workers for other public institutions. There are three educational levels which define the employment criteria and remuneration as well as the hierarchical level. These levels include category A consisting of degree materials, category C consisting of secondary school leavers and category C consisting of auxiliary staff.  Each of these categories is further divided into professional bodies. The civil service general service statute is the major legal foundation mandated for regulating all the civil servants with specific statutes have been initiated for each of these professional bodies.

Majority of public employees pursue a career system climbing steps within a grade on the framework of automatic seniority. In accessing higher grades of employment, in other words promotion, positive evaluation and success to the mandatory exam are needed.  Procedures for mobility such as job reassignment are available for those staff in higher category.  Civil employees belonging to some prestigious professional bodies or those who are in top management positions form the French higher civil service, including the staffs who are involved in designing policies. Informal membership in that category is not dependent on seniority. The top management rotates for each three to six years and is provided with some leave to work for a specified time in either private or semi public corporations. The government and employees are mandated to regulating the employee remuneration in the public sector. Civil employees in similar hierarchical level in each ministry and professional body obtain the same basic salary; where as the benefits and other bonuses differ for each of these professional bodies. Khartoum, 2008, 31)

Stora Enso is a worldwide paper industry which is based in Finland. The company has more than 32,000 workers and 85 production facilities operating in more than 35 nations worldwide. At Veitsiluoto Mill, all the reductions in the personnel that are deem necessary are conducted with respect to sensitivity and individuals on each of the employee needs. Staff changes are informed as the earliest stage possible. The required measures affecting employees are agreed upon together with the personnel. The companies’ employees are entitled to a safe and health work environment.  The management ensures that any abuse to employees be it psychological, sexual, harassment physical or abuse is kept at bar at the company.

The Veitsiluoto Mill incorporated the equality plan in 2001 which it continues to update regularly. The main goal of this plan is ensure that all employees understand the meaning of equality and how it should be taken into consideration.  When recruiting new employees, the company aims at upgrading the education level and the already existing employees have either individual or group related plans of development.  There are minimum education levels that are required for each new recruit depending on the task to be performed by both the blue and white collar workers. Additionally, the company and personal operation modes are developed  so  as to ensure that the tasks are varied, leading into the development of personal experiences  and the  support of working as a team ( StoraEnso, 2008,  18).

The human resource management at tiger brands is entailed with strategy development and execution, managing employees, commercial management, leadership, talent development among the employees, human resource management, Transformation, and company development.  Other functions of this departments includes: management of lip standards, skills development among employees such as the scorecard, reward and recognition programs, performance management systems, performance enhancement  systems , competency based recruitment , and leadership development programs (Kheswa, 2011). The HR function at Tiger is mandated to enable the organization achieve a high standard of performance culture.  It employs a combination of change management, capability development skills and organizational development in applying informed practice confounded from research in managing and implementing change. In addition, this organ is mandated to embed culture and values within the firm as continuous process (Kheswa, 2011).

  The main focus for the human resource management function at Adagio Paris Hotel in France is finding strategies that are aimed at recruiting and retaining the best employees. The company puts more emphasis on this aspect since they believe that employees and people in general, are the essence to offering an outstanding experience in hospitality sector. The management service at Adagio employs one of the profound systems in human resource including the success factors and people soft in recruiting and retaining the best performing employees and talented individuals.  The firm maintains sturdy relations with other firms in the hospitality industry and are accredited leaders in recruitment through the internet as well as electronic applicant tracking.  By use of updated databases, the management is able to track costs related to   drug testing, turn over statistics, as well as background research (Tripadvisor, 2013)

Health and Safety in China and Dubai

In accordance to the Chinese ministry of health, there were 13,218 cases of occupational illnesses in 2001. This was an increase of 13% in 2000.  Among these population, 2,355 passed away owing to the occupational damage. This only provided the iceberg of the health hazards that are extant in many workplaces in China. The actual situation may be even worse than that.  For instance, a report on the occupational health of employees, business enterprises, and autonomous regions in the country pointed out that the state owned enterprises that provided workers with protective equipments were 78%; employers for state owned enterprises were 57.2% while their private counterparts were a paltry 1.9% (SU, 2003).

In the present perspective, the health professionals place much emphasis on the status of occupational health and safety conditions.  Other sectors such as labor rights, multinational organizations, local factory operators and many Chinese workers have until recently put more emphasis on safeguarding occupational health and safety conditions. Owing to this aspect, China has developed as a world’s “factory floor “(Brown et al, 2012)

Saic Motor which is an organization based in China emphasizes on identifying the most efficient technologies that could be used in improving the efficiency and safety of the transportation system. The company develops measures in mitigating the potential threats and vulnerabilities within a significant system. At Saic, engineers are responsible for ensuring the safety and health regulations of the state are adhered to.  These personnel are mandated to evaluate the effectiveness of the transportation system by assessing the usefulness of the new designs through focus groups, interviews, and detailed simulations by use of the representatives of the human subjects (SAIC, 2013).

An examination of Apple, which is  a Chinese industry  manufacturing  iPads and iPhones  shows  serious concerns  with regard to the excessive working hours,  failings in the health and safety,  unpaid overtimes  and the interference of management  in trade unions.  In a most detailed public investigation by the independent labor association, more than half of the employees at this firm are being overworked. The auditing firm revealed that there were lack of protective tools and equipments, missing permits and blocked exits in the factory. On the other hand, the company management was found to be   biased in selecting candidates for placement in worker committees with the indication that these committees are not constituted by those who require representation,   but are dominated by the representatives of the management.  This aspect has left some workers feeling alienated and has diminished confidence in safety procedures (Garside, 2012).

 

The labor laws in Dubai involve a clear set of   safety regulations for employees working in each ministry.  For instance, construction and industrial workers are not allowed to work in the case when the environment becomes too hot.  This is an attempt at curbing injuries related to heat.  Workers in all sectors are allowed to work two hours less the normal ones during the month of Ramadan.  The Dubai municipality is mandated at overseeing safety   and health regulations. Those not following the stipulated laws and regulations are subjected to fines and penalties.  The Dubai municipality regulations differ for each organization and deal with issues such as environmental permits for different sectors, hazardous waste, the import of dangerous goods and environmental building codes (Dubai, 2013).

Safety and health is arising concern for many company in Dubai such Lube Oil. In 2004, Luke Oil aligned itself with the occupational safety and health administration so as to protect its workers from factory hazards in the production industry and designing means   of reducing potential health risks from lubricant and oil exposure as well as the metal working fluids. The alliance also emphasizes on establishing education programs, proper and safe use of oil products by its clients (High Beam, 2011).

Training and Development in Germany and Spain

The federal ministry of labor and that of education and research collaborates with the management of many organizations and in the field of training workers. The ministry supports German providers of training in developing the nation’s workforce in the local and international perspective. It has been noted that both the labor and education department in German and Spain have reached a particular agreement in promoting youth employment.  These agreements are established in a memorandum of understanding signed by the German federal minister of labor and social affairs and Spain labor minister. The objective of that memorandum is to work together in fostering youth employment. The collaboration between the two nations mainly focuses on international labor market polices as well as vocational training (Federal ministry of education, 2013).

Taking and example of Adidas, a German based corporation, the company considers its workers just like athletes who require constant training.  According to the management, employees at Adidas are provided with training and coaching program in building their strengths, overcoming their own challenges and improving their methods of realizing their objectives.  Training and development are some of the talent management tools the company considers in shaping the skills and experiences of these employees (Adidas, 2013). Endesa is another company based in Spain. In this corporation, employees are regarded as being as one of the major strategic assets of the corporation. Therefore, the company emphasizes on training as the key element for developing talents within the business structure. This training is normally adapted to the present and future needs of every worker in the organization. Moreover, the company is constantly in the process of constant improvements and the utilization of the most relevant and modern methods of initiating better and effective programs to the needs of the participants.

Payment/ compensation in India and Ireland

The Irish civil service is a common grading and pay system in Ireland. All the sectors and departments approach the grading systems in a similar way.  There is a central mechanism which determines each grade.  The rationale for this arrangement is promoting and preserving an impartial and independent civil service. There is however a fundamental question on the HR policies and regulations on whether these polices and regulations are still relevant or desirable (IPA, 2008).

In India, the reserve Bank of the state is mandated to oversee the payment systems in that country.  The reserve bank consistently strives towards making sure that the payment system runs smooth. The regulation of Payment and Settlement Systems board is charge of regulating these systems. The payment system in that country is regarded as one of the most essential components of a financial ad economic system in that country.  Since the payment systems are considered essential components of a financial system, the bank have opted t devised innovative ways of to make payments systems more efficient. The BPSS has tried to influence a change in the method of payment, from paper to electronic.  This is due to the fact that electronic means are considered to be both safer and efficient. Efforts are consistently being deployed to alter the people’s mindset and making them to turn into electronic payment systems (Business in Indian Banks, 2009).

On the other hand, the financial systems in Australia constitute a set of arrangements which cover the aspect of borrowing and lending of money. In addition, it also includes the transfer of ownership of financial claims.  The various sectors of the financial systems in this country include: banks, insurance, superannuation, financial markets, and the payment systems. With regard to the payment systems, there are several of them that are in use in Australia.  The Australian clearing association is mandated to oversee these payment systems. They include: cash, cheques, direct entry, EFTPOS and ATM, BPAY,  high value payments,  credit cards (VISA, master Card,  Diners Club) (Reserve Bank of Australia, 2009).

 

Functional Flexibility

Functional flexibility is the ability of a firm to move its workers to other responsibilities and duties   within that organization. It reflects the capability of an organization in adapting to the changing circumstances and also the requirements.  Apparently, Functional flexibility   is influenced by issues such as the management, training and outsourcing (Business Dictionary).

The concept of functional flexibility is normally perceived as a balance between the flexibility and security requirements of both employees and employers. This aspect has currently moved center space in the present European debate with regard to the upgrading of employment regulations.  The new flexibility model is poised to surpass the trade off between security and flexibility through adopting measures which take into account the consequently conflicting objectives at the same moment (Eurofound, 2008b). Flexibility is therefore an intergraded strategy adopted by many firms in Europe (European Commission, 2007a).

The concepts of flexibility and security warrant a further explanation and consideration. In this perspective, flexibility is concerned on successful transitions in the life cycle of the realities in work, on one side, economic inactivity, unemployment, job transitions, and retirement on the other hand. Flexibility seeks to facilitate the advancement of workers into better jobs and also mobility in upward directions. In addition, this concept also assists a lot in the optimal development of their careers and talent. Flexibility is concerned on the flexible work organizations that are able to counter the new needs in production, master of new skills and adopting new business models. Moreover, it concerns itself on stronger involvement of employees with regard to decision making plus enhanced autonomy in relation to their jobs (Wächter, 2004).

 

Time Flexibility

Time Flexibiltiy is another type of internal labor flexibility.  This means flexibility with regard to the time of work, in other words, working around the clock through shift work or some moment in a day, week, month or year. On the other hand, it may mean flexibility  during the course of the week, for instance in the case of part time employment contracts in comparison to full time employment contracts. Flexibility in work time could also be established during the course of the entire working life through issuing of leave schemes.   A research that was done recently on working time at organizational level distinguished between working time arrangements that were influenced by organizations necessities and arrangements in working time influenced by the needs of the employees (Chung et al, (2007). Apparently, organizational oriented flexibility could be related to economic development though improved company performance. On the other hand, employee oriented flexibility is related to social cohesion through enhanced work life balance at various phases in life.

Various researchers have tried to explore into the concept of flexibility by looking at the links between functional flexibility and numerical flexibility.  These researchers have attempted to figure out and explain on how companies are able to acquire these aspects concurrently. This could in turn result into a competitive advantage. Kalleberg (2001) observes rightly that the link is realized by use of the core-periphery model.  A study carried out by Tarique and Schuler, (2008) analyzed 178 responses from employers plus 245 from employees.   The finding of this study clearly reflected that of Kalleberg’s hypothesis that core-periphery model can not be accurately used to represent how organizations plan for their manpower.  Also the findings could not support the theory that it was paramount to have a category of employees who were lowly paid, low commitment and insecure jobs so as to protect a core category of employees who were effectively committed and who enjoy their employment when coupled with flexibility.
Conclusion

With the ever increasing number of organizations going global, demand for qualified, professional and informed International Human Resource Personnel has skyrocketed. This is because many an organization have flopped and lost millions of dollars because of poorly orchestrated internationalization strategies. These failures have served as valuable lessons to multinational organizations that are continuing to expand. When they do so, they have to engage the locals in employment and at times bring in professionals from other countries. As illustrated above, this is not a simple affair and as a result an increased importance of IHRM specialists who act as guides to the organization so as to ensure profitability through the firm satisfying its obligations to its international employees and any government that may have a stake in the same. This translates to increased productivity and profitability.

 

 

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