Critically analyze the similarities and differences between domestic HRM and international HRM.
Table of Contents
2.0 Similarities between Domestic and International HRM.
3.0 Differences between Domestic and International HRM.
Human Resource Management is a significant issue for the business, most importantly for the business that operates in the international marketplace. The effective management of human resources helps the business to achieve sustainable competitive advantages along with increased revenue and profits (Mullins, 2015). The key roles of human resource management are staff allocation, utilization, motivation and procurement. This report critically analyses the differences as well as similarities of home HRM and international HRM with examples. Then, the report suggests both domestic and international organizations deal with their human resources.
2.0 Similarities between Domestic and International HRM
There are a number of similarities between domestic and international human resource management. According to Mullins (2014), both domestic and international HRM deals with recruitment and selection, training and development, employee performance, rewards and incentives, industry relations. Aswathappa and Dash (2013) said both domestic and international HRM faces environmental factors including political issues, economic issues, social and legal issues, technological issues, and environmental issues. Britton and Gold (2012) said both domestic and global HRM have some common objectives that are: 1) to improve staff satisfaction and motivation; b) to improve business effectiveness and sustainability; 3) to achieve improved employee performance and productivity.
For example, in the manufacturing industry, internal factors related to top management impact the HRM activities of both domestic and international organizations. Then, the external factors related to economic, cultural, governmental and environmental factors impact both domestic and internal HRM in the manufacturing industry (Noe et al., 2014).
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In the service industry, both domestic and international organizations focus on the skills and experiences of staff. Both domestic and international organizations face high staff turnover in this industry because of cultural and social changes (Zheng, Soosay and Hyland, 2015). Both domestic and international organizations face skill shortages in this industry mainly in developing countries (Stahl and Zheng, 2012).
In the transformation and communication industry, both domestic and international organizations focus on recruitment and selection, employee health and safety issues, rewards and performance management, and training and development. In this industry, retaining staffs are a significant factor in both the domestic and international marketplace (Armstrong, 2015). Therefore, organizations need to give extra concentration on employee motivation, rewards and incentives to retain the staff for a long time basis.
In the finance and insurance industry, organizations spend more per employee in comparison to other industries in both the domestic and international market (Groseilliers and Altman, 2013). This is because social, economic and cultural changes cause problems in this industry. This industry needs to focus on people management, organizational culture and structure, training and development, and sustainable changes to gain long time success.
In the retail industry, the labor market is a key issue in both the domestic and international markets. In addition, both domestic and international organization focuses on part-time staffs in this industry. Thus, there is a high staff turnover in this industry. Therefore, both domestic and international organizations spend more on employee recruitment and selection, and training and development.
3.0 Differences between Domestic and International HRM
The differences between domestic human resource management and international human resources are recognized as more striking in comparison to similarities. In the case of the global market, human resource activities differ from domestic markets materially. The key reason is the domestic HRM faces employees come from a single nation, whereas the global HRM deals with staffs come from diverse culturally and educationally background (Boxall, et al., 2015). In addition, the activities of human resource management in the domestic and international market vary from country to country based on business culture and structure, HR roles and competencies. The administrative activities of human resource management vary from the international market to the domestic market. Claus (2013) differs the global HRM from domestic HRM by the interconnection of social and cultural issues within the business. Bratton and Gold (2013) find out differences between global and domestic HRM in the recruitment and selection process, in designing performance appraisals and rewards system, designing pay structure, contracting to the employees. For example, more part-time staffs are recruited in advanced nations including the UK in comparison to developing countries like Bangladesh………………….