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Human Resources Management



Introduction

Human Resources Management (HRM) is considered a universal concept with regard to processes, policies and strategies (Almond, 2011). Multinational organizations are increasingly acknowledging that the development and management of human resources in a global context is a core business challenge. HRM refers to a coherent and strategic approach used in managing the most valued assets in an organization that is, personnel who collectively and individually play a significant role in ensuring that the organization achieves its business objectives. HRM is both a business and an academic practice that is concerned with the practice and theoretical techniques utilized in workforce management (Ananthram & Chan, 2013).

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The theoretical aspect of HRM draws on the presumption that employees are people with different needs and goals, and thus, should not be perceived as other basic business resources. The practice aspect of HRM entails a number of processes that are used collectively in achieving the theoretical goals of HRM. Some of the HRM processes consist of workforce planning, employee training and development, skills management, payroll, and performance appraisal among others. Whereas the theoretical components of HRM are likely to be universal, the practice aspects of HRM are not (Brewster & Suutari, 2005).

With the onset of globalization, the integration of business strategies and operations across diverse ideas, products and cultures has a significant impact on HRM. Initially, HRM was only concerned with local employees; however, with globalized operations, HR managers have to take into consideration certain factors such as legal restrictions in various countries and workforce diversity among others (Brewster & Suutari, 2005). In this regard, current paper examines the changes and challenges in global HRM and analyzes the impact of technology, off-shoring, outsourcing, and labor migration on HRM.

Changes and Challenges in Global HRM

Global HRM is faced with a number of issues that are inexistent when a firm’s activities are restricted to one country. The following subsections provide a detailed discussion of the identified changes and challenges in global HRM.

Changes in Global HRM

The organizational models utilized in international organizations have an impact on the HR practices, which is a significant change and challenge as regards global HRM. Bj?rkman, Fey, and Park (2007) outlined four international organizational models, which included decentralized federation, coordinated federation, centralized hub, and transnational organizational models. With regard to the decentralized federation, each national subsidiary or unit is managed as an independent entity that is supposed to have optimal business performance in the local settings. The outcome of a decentralized federation organizational model is the conventional multinational model.

With regard to the coordinated federation model, the headquarters of an organization devise complex management systems aimed at ensuring that the parent company exercises and maintains overall control despite the fact that the local management is permitted to make use of practices that fit the local conditions. On a central hub model, emphasis is placed on the global market instead of the local market. Bj?rkman, Fey, and Park (2007) assert that organizations using this model tend to be global instead of being multinational. In a transnational model, the organization devises multi-dimensional strategic approaches and capacities that are geared towards global competition as well as allowing local responsiveness to the market demands.

The aforementioned international organizational models have significant implications for HRM practices. Depending on the organizational model, organizations can make use of any of the three approaches to staff and manage their subsidiaries, which include ethnocentric, polycentric and geocentric/global approaches (Ananthram & Chan, 2013). With regard to the ethnocentric strategy, the home country HRM practices are dominant, whereby headquarters situated in the home country have the responsibility of making core decisions.

In addition, expatriates are sourced from the home country and the subsidiaries adhere to the HRM practice of the home country. The ethnocentric approach to HRM fits the coordinated federation model. The polycentric HRM practice is characterized by each subsidiary company adopting local HRM practices (Almond, 2011). Local employees manage the subsidiary on the assumption that the managers at the headquarters are not knowledgeable about the local market conditions. The polycentric approach to HRM fits the decentralized federation model. The geocentric approach to HRM is characterized by the organization applying the integrated business strategy in managing and staffing personnel on a global basis. The geocentric approach is best suited for the central hub and transnational organizational models, which emphasize global markets rather than local ones.

Challenges in Global HRM

The existing literature on global HRM has placed a lot of emphasis on the challenges of global HRM. At the organizational level (macro level), global HRM is primarily concerned with ensuring that there is a fit between business goals and HR practices and policies. A significant challenge with respect to this relates to being knowledgeable regarding the degree to which HR practices and policies can be standardized on a global scale while still making sure that local market demands are satisfied. Regardless of the availability of all-encompassing global practices and policies that can be used in coordinating and aligning HRM and business goals on a global scale, the implementation of these approaches at the local settings is normally different because of a number of environmental factors (Ananthram & Chan, 2013). The institutional theory posits that organizations adapt because of the environmental pressures in order to survive. As a result, there is a need for global HRM to respect the local needs, traditions and customs to be considered effective.

The second challenge in global HRM relates to diversity management, particularly with respect to managing diverse workplace expectations. According to Ananthram and Chan (2013), societies with higher gender egalitarianism have a tendency of emphasizing on affirmative actions and equal employment opportunities compared to countries with low gender egalitarianism. Thus, equal employment opportunity and affirmative action, which form a component of HR policies in certain countries like the United Kingdom, Canada and the United States, are less likely to be implemented with ease in other countries. A case in this point is the difficulty that women expatriates face regarding their acceptance in some regions of the world. In addition, cultural differences increase difficulties in cross cultural communication. In this regard, different communication styles and expectations between indigenous employees and expatriates are likely to cause a workplace conflict (Brewster & Suutari, 2005).

The third challenge in global HRM relates to the effectiveness in facilitating virtual global teams. The dawn of communications technology increased the possibility of sharing knowledge and coordinating meetings across the globe. Nevertheless, diverse attitudes regarding the work time that is deemed acceptable are likely to pose a logistical challenge. Despite the fact that a virtual team is often viewed more efficient means of communication and its use can be hindered by challenges associated with cross cultural communication (Almond, 2011). For example, the nurturing of trust may be hindered by the absence of physical contact. There are some cultures whereby trust is a core requirement for decision-making.

The main challenges to global HRM at the micro level relate to operational functions of HRM such as selecting the most suitable expatriate, staffing issues, providing cross cultural employee training and development, effective repatriation, talent management, and performance management and appraisal. Moreover, there is an agreement in literature that for an expatriate to be successful, the accompanying family members must be well-adjusted to the new culture. As a result, global HRM executives have to emphasize the expatriates’ wellbeing in order to increase the chances of expatriates’ success while on cross-border assignments (Almond, 2011).

Lastly, the need for managing an expatriate in holistic manner is costly to an organization. Regardless of the fact that no reliable data exists about expenditures associated with repatriation and expatriation, cost estimates are in the range of $ 10,000-12,000 for the pre-departure trip (Ananthram & Chan, 2013). Some authors have reported estimates of about $ 1 million (Almond, 2011). Besides offering attractive perks and remuneration, other costs that are likely to be incurred include allowances and relocation costs. Moreover, the expenditures for cross cultural employee training and development such as foreign language training and business etiquettes may need family members to be included in the training program. As a result, global HRM has to consider the needs of individual expatriates, subsidiaries, and the parent firm.

Impact of Technology, Offshoring and Labor Migration on HRM Technology

Technology has revolutionized various business aspects including HR practices. In the current information era, the Internet and computers have significantly increased the impact that technology has on businesses. The impact of technology is evident in almost all business aspects, including HR, whereby impact of technology on HR practices is also significant. One of the ways, through which technology affects HR, is recruiting (Thite, 2014). Prior to the dawn of the Internet, recruiters had no other option but depend solely on print publications like newspapers in order to post available openings and get potential applicants. Networking was also used to recruit applicants; however, recruiters were not able to post an available opening in several locations and target millions of audience. Through technology, the efficiency and effectiveness of the recruitment function of HR has increased significantly (Thite, 2014).

Training is another aspect of HR that has been greatly affected by technology. In this regard, technology, particularly information technology (IT) has allowed HR personnel to provide training to new employees in a manner that is both efficient and effective. Technology facilitates access to training programs and company information remotely, which removes the need for employee trainers to interact directly with new employees (Ananthram & Chan, 2013). Other HR practices that are affected by technology include performance management and data retrieval and storage. With regard to performance management, HR personnel can make use of computer technology to monitor the performance of employees as well as obtain employee feedback. With respect to data retrieval and storage, technology reduces the vast paperwork associated with HR functions. For instance, electronic imaging has enabled organizations to store files electronically.

Offshoring

Offshoring involves outsourcing jobs and services to overseas service providers for the main purpose of improving productivity and reducing costs. When organizations decide to reduce costs by offshoring, the operations of the HR department are affected. Offshoring poses the need for HR departments to maintain communication between various cultures and time zones, which may require management changes and/or technological upgrades. The role of HRM in offshoring involves making sure that overseas employees possess the training abilities and skills required to complete the tasks at hand (Ananthram & Chan, 2013).

If offshoring is particularly adopted with the primary purpose of representing the interests of the firm on site or managing facilities that are located overseas, there is a need for the HR department to devise a plan to make sure that they constantly communicate with the offshore organizations. This also poses the need to work with local workers in order guarantee adherence to legal procedures. In order to effectively manage overseas employees, HR personnel have to be knowledgeable on what operations can be outsourced to a specific area (Thite, 2014).

Lastly, offshoring needs additional training for overseas employees. In offshoring, HR training comprises of two groups, which include training the hired workers who are charged with the responsibility of executing the HR functions overseas based on the organizations specific business expectations and practices. The training also entails training employees to be aware of the rules of behavior and cultural norms in order to make sure that they are capable of interacting with domestic employees.

Labor Migration

Labor migration and mobility are a significant challenge for HR managers. Migration refers to the movement of people between territories, which can be either permanent or temporary. Labor migration presents both challenges and opportunities for HRM. For multinational organizations, labor migrants may act as a crucial source of man power, diversity and skills (Ananthram & Chan, 2013). However, the management of migrant employees may present a significant challenge for HR managers. For instance, labor migration is accompanied with challenges associated with coping with the immigration regulations and rules, acknowledging diverse certification and education systems, management of diversity, management of relationship between employees from different nationalities and multinational workplaces, and challenges associated with international recruitment. Another issue that HR managers have to grapple with as a result of labor migration relates to safeguarding migrant workers’ rights at the workplace (Almond, 2011).

Conclusion

This paper has outlined the changes and challenges in global HRM as well as the impact of technology, offshoring, and labor migration on HR practices and policies. With regard to the changes in global HRM, the significant change in global HRM relates to the international organizational models, which have an impact on the manner, in which HR practices and policies are executed. The challenges in global HRM documented in this paper include the degree to which HR practices and policies can be standardized on a global scale while at the same ensuring that local traditions, practices and customs are adhered to; challenges associated with diversity management; effectiveness in facilitating virtual global teams; challenges associated with operational functions of HRM such as selecting the most suitable expatriate, staffing issues, providing cross cultural employee training and development, effective repatriation, talent management, and performance management and appraisal; and the costly nature of global HRM.

The paper has also documented the impacts of technology, off shoring and labor migration on HR practices. Technology has affected a number of HR aspects including recruiting, training, performance management, and data retrieval and storage. Off shoring affects the operations of the HR department in a number of ways including the issues of maintaining communication between various cultures and time zones, devising a plan to make sure that they constantly communicate with the offshore organizations and providing additional training for overseas employees. Lastly, labor migration presents an opportunity for HRM in the sense that it is a source of man power, diversity, and skill. At the same time, labor migration poses a significant HRM challenge such as workplace diversity management and management multinational workplace settings among others.

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