Human resource management is both academic theory and a business practice that addresses he theoretical and practice techniques of managing a workforce. While the theoretical aspects of the discipline may also be universal, the same cannot be said of its practice. The paper defines human resource management, the theoretical basis of the discipline, business practice and global or international human resource management. Thereafter, the paper concentrates on global perspective or issues in international human resource management practice.
Human resource management is the strategic and coherent approach to the management of an organization’s most valued assets – the people working here who individually and collectively contribute to the achievement of the objectives of the business. The terms “human resource management” (HARM) and “human resources” (HER) have largely replaced the term “personnel management” as a description of the processes involved in managing people in organizations.
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Human resource management can also be defined as the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. As a change agent, it is concerned with the nature of and regulation of the employment relationship at the level of the workplace and broader society. The human resource management model emphasizes. The need to search for new ways of working ; The central role of managing in promoting change ; The treatment of workers as individuals rather than part Of a collective workforce ; The encouragement of workers to consider management as ‘partners’ rather than as opponents – ‘us and us’, rather than ‘us and them’. The theoretical discipline is based primarily on the assumption that employees are individuals with varying goals and needs, and as such should to be thought of as basic business resources, such as trucks and filing cabinets.
It takes a positive view of workers, assuming that virtually all wish to contribute to the enterprise productively and that the main obstacles to their endeavourers are lack of knowledge, insufficient training and failure of process. It is an innovative view of the workplace management, which, asserts that human techniques when properly practiced, are expressive of the goals and operating practices of the enterprise overall. As an academic theory, the goal of human resource management is to help n organization to meet strategic goals by attracting, and maintaining employees and also to manage them effectively.
The key word here is ‘fit”, that is, human resource management approach seeks to ensure a fit between the management of an organization’s employees, and the overall strategic direction of the company. The basic premise of the academic theory of human resource management is that humans are not machines, therefore, we need to have an interdisciplinary examination of people in the workplace. That is why fields such as psychology, industrial engineering, industrial and organizational psychology, industrial relations, sociology etc play a major role.
PRACTICE Human resource management (HARM) as a business practice comprises several processes, which used together are supposed to achieve the theoretical goals mentioned above. These practical processes include: Workforce planning ; Recruitment (sometimes separated into attraction and selection) Induction and orientation ; Skills management ; Training and development ; Personnel administration ; Compensation in wage or salaries ; Time management ; Travel management (sometimes assigned to accounting) sometimes assigned to accounting) ; Employees benefits administration ; Personnel cost planning ; Performance appraisal. Payroll GLOBAL OR INTERNATIONAL HUMAN RESOURCE MANAGEMENT Global or international human resource management is the process of employing, developing and rewarding people in international or global organizations. It involves the world-wide management of people, not just the management of expatriates. An international organization or firm is one in which operations take place in subsidiaries overseas, which rely on the business expertise or manufacturing capacity of the parent company. Such impasses or organizations bring with them their own management attitudes and business styles.
Human resource managers of such organizations cannot afford to ignore the international influences on their work. ISSUES IN INTERNATIONAL (GLOBAL) HARM International human resource management involves a number of issues not present when the activities of the firm or organization are confined to one country. The issues in global HARM include: ; The variety of international organizational models that exist ; The extent to which HARM policy and practice should vary in different countries. (This is also known as the issue of Convergence and Divergence). The problem of managing people in different cultures and environments ; The approaches used to select, deploy, develop and reward expatriates who could be nationals of the parent company or ‘third-country nationals’ (Tics) – nationals of countries other than the parent company who work abroad in subsidiaries Of that organization. INTERNATIONAL ORGANIZATIONAL MODELS Bartlett and Shoal (1993) have identified 4 models 1. Decentralized federation in which each national unit is managed as a separate entity that seeks to optimize its performance in the local environment.
This is the traditional multinational corporation). 2. Coordinated federation in which the centre develops sophisticated management systems enabling it to maintain overall control, although scope is given to local management to adopt practices that recognize local market conditions. 3. Centralized hub in which the focus is on the global market rather than on local markets. Such organizations are truly global rather than multinational. 4. Transnational in which the corporation develops multi- dimensional strategic capacities directed towards competing globally but also allows local responsiveness to market requirements.
CONVERGENCE AND DIVERGENCE Another issue facing international organizations is the extent to which their human resource (HER) practices should either ‘converge’ worldwide to be basically the same in each location, or ‘diverge’ to be differentiated in response to local requirements. There is a natural tendency for managerial traditions in the parent company to shape to the nature of key decisions, but there are strong arguments for giving as much local autonomy as possible in order to ensure that local requirements are sufficiently taken into account. (This is known as global/local dilemma).
Convergence may be increasing as a result of the following factors: ; The power of markets ; The importance of cost ; Quality and productivity pressures ; The development of like-minded international cadres ; The widespread practice of benchmarking ‘best practice’. CULTURAL DIVERSITY Culture and environment diversity is a key issue in international human resource management (HARM). In a study that become a classic in the study of cultural differences, Hefted (1980) investigated value differences between over 1 1,000 employees in some 40 countries employed by International Business Machine (IBM).
His study focused on the influence of national cue True on the sub-cultures Of the worldwide organization. 4 key dimensions were identified. 1 . Individualism versus Collectivism – I. E. Where individualism is a national cultural attribute that favors people looking to themselves and their families as their first priority, and where collectivism is an attribute that favors people giving their prime loyalty to, and finding protection in, the wider group. 2. Power distance – I. E. He extent to which different cultures accept different distributions of power within the society; High Power distance society accepts wide differences of power between those at the top of society and those at the bottom, while Low Power distance society sees power as being shared much more equitably, leaving less of a power gap between the top and the bottom ranks. 3. Uncertainty Avoidance -?? I. E. The extent to which a society is tolerant of uncertainty and which therefore feels less need to avoid it (Low Avoidance) or feels threatened by it (High Avoidance). . Masculinity versus Femininity -?? I. E. Where a nation has a tendency to prefer assertiveness and materialism (masculinity), or has a higher concern for legislations and the welfare of others (femininity). Comparing the results obtained from the 40 different countries against the criteria of the framework, produced 8 ‘culture clusters’, labeled according to geographical areas (Asian, Near Eastern and Nordic) or language (Latin, Germanic and Anglo) and economic development (Less developed or More developed). . More developed Latin distance 2. Less developed Latin High power High power distance High uncertainty avoidance High uncertainty avoidance High individualism individualism Medium masculinity Low Whole range of masculinity (Belgium, France, Brazil Spain, Italy) 3. More developed Asian Medium power distance uncertainty avoidance individualism Medium masculinity (Columbia, Mexico, Chile, Argentina, Venezuela, Peru, Portugal) 4.
Less developed Asian High power distance High Low uncertainty avoidance Medium Low individualism High masculinity (Japan) Thailand, Hong Kong, Philippines, Singapore) 5. Near Eastern High power distance avoidance (Pakistan, India, Taiwan, 6. Germanic Low power distance High uncertainty High uncertainty avoidance Low individualism Medium individualism Medium masculinity High (Greece, Iran, Turkey, Switzerland) 7. Anglo w power distance High individualism (Australia, LISA, Canada, Britain, Ireland, Africa) (Austria, Israel, Germany, Yugoslavia) 8.
Nordic Low power distance Low-medium Low-medium uncertainty Medium individualism High High masculinity (Denmark, Norway, Sweden, Great Finland, Netherlands) New Zealand, South From this Hefted concluded that it was impractical to produce a unified managerial approach that could be adopted world wide to meet the needs of individuals and groups, their structures and the requirements of change. The conclusion to be drawn from this study is that a contingency approach to unman resource management is called for in these circumstances.
Couch also made an important contribution to our understanding of the international dimension of human resource management. He studied the characteristics of Japanese and American organizations to see if selected practices from Japan could be translated to the United States. Couch discovered the following differences in the behavior of Japanese and American organizations. Japanese organizations Offer lifetime employment workers only) Promote from within American organizations Offer (generally) short-term (Core employment Career paths are non-specialized
Shared decision-making High degree of mutual trust/loyalty between managers and employees Importance of collective responsibility Long -term performance appraisal important Success seen in terms of operative efforts Recruit form outside Generally specialized career paths Individual decision-making Varying degrees of trust/loyalty between managers and staff Individual responsibility for results Short-term performance more Success seen in terms of Co- individual achievements Couch then proposed what he called ‘Theory Z’ as opposed to McGregor Theories X and Y as a means by which American companies could imitate retain features of the Japanese approach to managing people. He argued that American firms could make changes in the following areas of human resource management: ; They could offer more secure employment prospects and better prospects of a career ; They could extend employee participation in decision-making ; They could place greater reliance on team-spirit and on recognizing the contribution of individuals to team effort ; They could encourage greater mutual respect between managers and their staff.
Given the difficulties of developing careers in today’s’ business organizations, here reducing the number of job levels, as well as minimizing the number of jobs is commonplace, it seems unlikely that most international organizations can offer their employees guarantees of long-term prospects. However, some of these characteristics have adopted in many organizations and indeed are regarded as ‘good’ or ‘best practices’. In view of the above, the ‘universalistic’ approach to HARM prevalent in the USA is rejected in Europe where the basic functions of HARM are given different weights between countries and are carried out differently. In addition, the cultural differences mentioned above have produced the slogan in international human resource management “Think GLOBALLY and act LOCALLY”.
This means that an international balancing act is required, which leads to the fundamental assumption made by Bartlett and Shoal that: ‘balancing the needs of co-ordination, control and autonomy and maintaining the appropriate balance are critical to the success of the multinational company. To achieve this balancing act, there are six capabilities that enable firms to integrate and concentrate international activities and also separate and adopt local activities: ; Being able to determine core activities and non-core Achieving consistency while allowing flexibility; activities; ; Building global brand equity while honoring local customs and laws; Obtaining leverage (bigger is better) while achieving focus (smaller is better); ; Sharing learning and creating new knowledge; ; Engendering a global perspective while ensuring local accountability.
Global human resource management provides an organized framework for developing and managing people who are comfortable with the strategic and operational paradoxes embedded in global or international organizations and who are capable of managing cultural diversity. Because of cultural diversities and issues of convergence and divergence, it is impractical to develop a truly international approach to global human resource management.