Training, Performance Management, Appraisal and Compensation Issues. Introduction: IHRM HRM refers to those activities which organization does for utilizing its human resources effectively, planning of human resource, recruitment, selection, performance appraisal, compensation management. From the beginning of globalization, companies’workforce has been diverse and cultural issues are appearing. As a result IHRM emerged.
International human resource management developed after 1980’s as a subject focusing mainly on what can be the opportunities and problems for MNC’s expatriation, why cross cultural issues are important for international companies and international aspect of HRM consists employee recruitment, selection, placement, performance and compensation management as well career development policies and practices.
International human resource management covers the broader perspective on human resource management which involves recruitment, selection, placement and effectively utilizing employees of the company. IHRM encompasses: Managing employees in the MNCs globally… (Poole, 1990; p1) Managing employees in the global surrounding and dealing with the problems that arise in MNCs operating in many foreign countries unlike working on behalf of foreign companies in own country or managing international employees in local companies…. Briscoe and Schuler, 2004; p1) The way MNCs manage their global employees to gain local as well as global competitive advantage…. (Scullion, 2005; p5) A branch of management studies which contains how human resource management are practiced and how it affects in cross-cultural situations… (Peptone, 2006; p523) Issues of international management of people of MNCs along with issues of different parts of their organizations and comparative analysis Of HRM in different countries…. Stahl and Bjork man, 2006; p1) “Complex relationship between globalization, national systems and companies [which Provides us with] three distinct “levels of analysis” for interpreting and understanding HRM Strategies and practices [the globalization effect, the regional and national effect, and the organization effect]”… (Edwards and Rees, 2008; p22) Management of employees in global and cross cultural context and comparative human resource management…. (Brewster et al, 2007, p5)
Identifying, Selecting and Managing the Global Workforce While talking about the global workforce, the term “expatriate” is largely been used in IHRM in an article in the management of human resource literature. Kobrin(1988) discussed that US multinational enterprises were minimizing the number of international assignees to reduce cost and because of the high failure of expatriate. Some years later, it seemed that this idea doesn’t reflect the current practices of MNEs.
According to the 2002 survey carried out by the consulting firm (ORC); from a sample of 775 MNEs the most common pattern among the majority of these companies, including the North Americans, is an increasing use of employees sending overseas. An expatriate is an employee who works for the company he/she represents for certain time period in overseas. There are abundant numbers of studies about the way organizations manage their pool of expatriates. The studies cover different areas: selection, training, relocation and adjustment, pay and performance, career development and return. Reasons for Expatriation: According to the Black et al. 1992), an expatriate has major three strategic roles. They are Monitoring (management function), transferring skills and knowledge, managerial development. Edstorm and Galbraith (1977) discussed that role of expatriate rely on the foreign strategy of the company. Companies going global used expatriates for coordination, while companies adopting multi-domestic strategy used expatriate for controlling. In implementer subsidiaries, which apply the resources developed in the headquarters or other units of the organization to a specific geographic area, use expatriates mainly for the transfer of the skill and knowledge.
On the other hand, globally integrated subsidiaries, which develops new expertise using the resources generated in other subsidiaries or in the headquarters, use expatriate for the coordination along with the transfer of knowledge. The other reason may include the trustworthiness of expatriates to increase the channel of communication between headquarter and subsidiaries and to ensure that head-office interests are well represented in the subsidiary. Strategic Choices in Expatriate Selection: The selection of expatriates may be on the basis of internal recruitment vs. xternal recruitment, team vs. individual assignments or on the basis of the incentives offered by the organization such as tangible or monetary reward or intrinsic rewards which may include the opportunity for professional development, security or recognition. Managing the Expats: * International assignment for the valid reasons: Assignees are allocated mainly to meet the business demands companies with effective expatriation look at their international assignment from the long term perspective.
Companies expect their expats to gain new ideas which are beneficial for the company or earn skills to lead the market. Companies expect their expats to gain new ideas which are beneficial for the company or earn skills to lead the market. Example 1: Nokia, one of the leading mobile phone manufacturing companies effectively use international assignment to generate knowledge. It has 36 Nokia centers in 11 countries. Upper level forms a team of capable employees n they are assigned in R n D center for creating a new product.
The most important thing that matters is executives should be aware of the reason for IA which also helps to gain knowledge and skills for the employee and the company. Furthermore; this awareness should also be in an employee. * Sending the right employee: Employees who are sent on foreign assignments often find difficulty to adapt in new culture. Suppose. Manager of an American car manufacturing company was send to Korea because of his working style in America, Koreans, not only found it offensive, but they would not even speak directly to him. * Repatriation and Career Management:
It is seen that companies are finding difficulty in managing the repatriates. For example, the position is not clearly defined after repatriation and they are given the less authority in their country. Employees find themselves in the “holding pattern” after their return to the company (Harvey,1989;Feldman and Thomas,1992;welch 1994;gregersen & black,1996;kamoche,1997;selmer,1999). In addition, the expatriate Sometimes, they may feel that they may not be able to cope up with the changes in their country which is called reverse culture shock (Black, 1992; Forster, 1994).
It has been reported that 10–25% of the expatriates leave their company within 1 year after repatriation (Black, 1992; Solomon, 1995; Black, Greger sen, Mendenhall, & Stroh, 1999). (Black, 1992; Forster, 1994). As per career is concerned, companies ignore the individual and professional development of the employees (Gregersen et al. , 1998). There’s a lack of international managers who can work in global environment. (Harvey, Buckley, Novice Vic, & Wiese, 1999). Companies lack knowledge of how international managers can be developed. (Selmer, 1998).
There’s not enough studies conducted how international capabilities gained by the employees can be applied in his home country. Importance of Cultural Awareness: The cultural differences have been quite an issue in international human resource management. It is very important that human resource managers should be concerned about the cultural sensitivities. .Example 2: In Papua New Guinea, there was research on number of accidents happening on that region. Study found out that drivers who were responsible for the accidents were chewing a kind of nut. Chewing this nut was a common thing for that people.
Therfore, it was decided that drivers are not allowed to chew the nut anymore associating it with the depressants such as alcohol, and were provided free coffee at certain locations. Managers did not know that the nut works same as coffee. This is an example recounted by Wyatt what works in home country does not work in another country. Coping with the cultural difference has been very challenging for MNCs. It has been a big responsibility for the firms to help staff and their families adjust in a new environment which can affect their performance as a whole.
Training, Performance Management, Appraisal and Compensation Issues: Expatriate performance management: Nokia Telecommunication The effective HRM has been a key factor today for the companies to gain sustaining competitive advantage. Before the term performance appraisal was a standard to measure the performance of employees but today employees go through series of processes in which they are assessed which is called performance management. The case company is Nokia Telecommunications; Finnish based MNCs operating in the telecommunication industry .
Nokia telecommunication is a company that has the largest number of foreign assignments with approx. 1200 expatriates for more than 15 years * Results of the research: The analysis revealed five different categories of expatriates as per job’s nature. 1. Top level manager:- They work in independent manner ant their performance is managed in distant way. They prepare their performance goal in common manner. 2. Middle level manager:- Some middle level managers were accountable to one or more superiors. Goals for the performance were prepared with mutual consent between employee and the superior 3.
Business establisher:- They were particularly concerned about the gain and loss to set up new companies in another country having minimum goals. 4. Customer oriented expatriates:- They work on the projects for current customer and they rely upon the information provided for the goal of measuring performance on daily relationship basis with project manager. 5. R & D managers:- They are similar to customer projects. The difference is that they are physically proximal to their mangers. * Managerial Implications:
This case underlines this point by demonstrating that despite the company’s standard performance management system intended for global use performance was managed differently. Therefore; one implication of this study is developing an expatriate PM system, a company should pay attention to specific situations and plans accordingly. Another implication is that companies may need to provide several PM tools for superiors’ and subordinates’ use. While standardizing the objectives of performance management, allowing diversity in the means and tool to achieve those objectives may be quite useful.
In fact, the development of alternative PM tools may result in effective performance management. References Brewster C, P Sparrow, and G Vernon. 2007. International Human Resource Management. London: CIPD House Dowling PJ, M Festing, and AD Engle Sr. 2008. International Human Resource Management: Managing People in Multinational Context. 5th Ed. Australia: Thomson Learning Delery, J. E. , & Doty, D. H. 1996. Modes of theorizing in strategic human resource management: Tests of universalistic, contingency, and configurational performance predictions.
Academy of Management Journal Haring AW and A Pinnington. 2010. International Human Resource Management. 3rd ed. India: SAGE publications. Harris H, C Brewster, and PR Sparrow. 2003. International Human Resource Management. London: CIPD House. Lazarova M, Michael Morley, and Tyson Shaun. 2008 “International comparative studies in HRM and performance”. International Journal of Human Resource Management 19(11): DOI: 10. 1080/09585190802404239 Mendenhall Mark, Gary R. Oddo, and Gunter K. Stahl. Readings and cases in International Human Resource Management. th Ed. Scullion H. 2001. International Human Resource Management. In: Human Resource Management: A Critical Text. London: International Thompson Business Press Schuler, R. , S. Youndblood, and V. Huber (eds. ) 1988. Human resource management choices and organizational strategy: From Readings in Personnel and Human Resource Management. St. Paul, MN: West Publishing. Tahvanainen, M. (2000). “Expatriate performance management: The case of Nokia Telecommunications” Human Resource Management 39: 267–275. DOI: 10. 1002/1099-050X (200022/23) | | |
For Milestone One, you will be required to format and revise a business letter in Microsoft Word. In the letter, you will summarize the findings of an initial meeting and request a follow-up meeting, using formatting and style conventions appropriate for the identified audience.
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