Assignment on The International Human Resource Management (GC0518)
Table of Contents
Task A: Analyse and Explain the changing role of the corporate human resource function in international firms.
The growth of international human resource management
Adjustment
Remuneration.
Culture.
Contracts and agreements.
Implications for the Human Resource Management
Research the local culture.
Integrate human resource management systems.
Selection.
Training.
Performance management
Remuneration.
Conclusion and Recommendation.
Task B: Factors affecting international compensation strategy.
Introduction.
Factors affecting international compensation strategy.
Social contract
Culture.
Trade unions.
Ownership and capital markets.
Managers’ autonomy.
Other Factors.
Conclusion.
Reference.
Task A: Analyse and Explain the changing role of the corporate human resource function in international firms
Introduction
In these times of internationalization and globalization, international human resource management is becoming an important concept for human resource practitioners to be aware of and to practice. This is vital for human resource managers in multinational corporations and international joint ventures, and also for domestic-based human resource managers who import staff from overseas.
In order to keep up with the pace, human resource managers will have to have a global vision of how to manage their people effectively both at home and abroad. Managing international human resources enables a business to compete more successfully in the world marketplace, and is an excellent developmental tool for its employees. Yet, as Gomez-Mejia, Balkin, and Cardy (2004: 329) point out, examples abound of failures in both expatriations (the process of sending a home country national to work in a foreign country) and repatriation (the process of acclimatizing an expatriate back into his or her home organization and country).
This paper examines the growth of international human resource management (IHRM), and key issues faced by human resource managers, and offer suggestions for an effective role for managers in implementing IHRM.
The growth of international human resource management
An appreciation of how to manage staff in an international context is critically important for businesses today. Shen (2013) explains international human resource management in terms of a system: “a set of distinct activities, functions, and processes that are directed at attracting, developing and maintaining the human resources of a multi-national corporation.” The domestic-based term of human resource management covers “all the concepts, strategies, policies and practices which organizations use to manage and develop the people who work for them” (Rudman, 2012). The only major difference between international human resource management and human resource management is the fact that one relates to multinational corporations and the other to domestic-based firms. Historically, the last two decades have seen a gradual transition in style and substance from personnel management to human resource management, and recently to international human resource management. Almost two decades ago Lundy (2014) already believes that the personnel management role lacked strategic relevance because it was mainly an administrative-type role, whereas the modern concept of human resource management is much more strategic in scope.
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He states that human resource management came about due to a “change in the functions, boundaries, substance and objectives” of the original personnel management function. Just as effective management of human resources plays a major role in the success of the domestic business, Scullion & Starkey (2010) suggest that effective management of human resources in a multinational corporation is a major determinant of success or failure in international business. Globalization is a trend that is widely regarded as a prime catalyst for international human resource management (Härtel, Fujimoto, Strybosch, and Fitzpatrick, 2012).
This removal of geographical borders when conducting business, and the subsequent erosion of cultural and distance barriers, has stimulated international business and caused human resource practitioners to develop new concepts and skills to manage people outside their traditional boundaries. According to Yip (2014), there are four major drivers of globalization: the global market with its consumer needs, wants and expectations; production and labor costs in different countries; government rules and regulations regarding taxes, tariffs, quality control, and import/export restrictions; and competitors’ actions. All these require a particular understanding and response from human resource managers, which will enable them to see just how different international human resource management is from domestic-based human resource management in their home country.
Adjustment
A central theme in the literature reflects “a strong socio-psychological and welfare concern which echoes the notion of ‘adjustment’ ” (Kamoche, 2011). “Effective international managers were said to be those who were adaptable, flexible, open-minded, speaking in foreign languages, and making friends with those of many nationalities” (Smith, 2012). Thus when a company’s business representative is going overseas to explore a new region it is a challenge for that person to adjust to a new lifestyle, language, conditions of employment, or different ways of operating human resource activities. Failure to adjust is often unacceptably high. Gomez-Mejia et al (2014) report comparatively high failure rates (as evidenced by a premature return) among US expatriates of 20-40 %, which is roughly three to four times higher than those experienced by European and Asian companies.
This is attributed to two generations of US economic dominance and a ‘colonial mentality,’ but specific causes of failure appear to be career blockages, culture shock, lack of pre-departure cross-cultural training, overemphasis on technical qualifications, getting rid of a troublesome employee and family problems. When a business intends to expand to an overseas market, human resource managers need to utilize human capital in order to conduct the business more efficiently and effectively…………………………
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