Understanding The Challenges And Importance Of International HRM Essay.

Using academic literature, critically analyse a key people issue / challenge in the context of global organisations. (In an international context).

You need to clearly define the topic you have chosen to focus on in terms of a specific issue / challenge related to International HRM. Critically review and discuss literature relevant for your topic, explain key concepts, theories and debates to show how these help create an understanding of the people issue / challenge you are focusing on.

Characteristic features of international HRM

International HRM can be defined as a complete guideline, a structure of activities and processes that are maintained by the unit in an international level order to achieve organizational success. International HRM especially focuses on international success, both from domestic and international perspective. International HRM is a mandatory unit of all multinational companies and organizations. Almost in all the multinational companies, international HRM is an important department. The tasks and functions of human resource department in international organizations and companies are also varied and valued (Certo 2018). There are certain characteristic features that international HRM is characterized with. International HRM department in any company has a broader perspective towards its employees. The unit of international GRM delves deeper into the personal lives of the employees. The department is also exposed more to risk and external influences. As already discussed, the roles and responsibilities of the international HRM department is varied and different. This department carry out the responsibility of both the national and the international human resource department. Apart from the traditional roles and functions of human resource department in any organization like recruitment, selection, training and development, performance appraisal and dismissal of the employees, the department also looks into international matters like expatriate management and global skills management.

International human resource management specifically deals with three branches of management. Home country employees, host country employees and third country employees are the three branches that international HRM deals with. In the context of home country employees, the headquarter is situated in the same place as the organization. The international HRM department manages the employees of host country where the employees are of the same nation of the place of organization (Ang and Van 2015). International HRM department also manages third country employees where the employees are working in a organization belonging from a different country. That is, employees working in headquarters of a certain organization though they do not belong to that country by origin.

Given the fact that the role and responsibility of international HRM is diverse, so is the complexity of its job role. Employees at international HRM go through a number of challenges and job complications. Some of the key challenges that international human resource department go through are listed below

Compliance with international laws: Expansion of any business overseas or the global market place requires a number of rules and legal connotations to be followed. The laws can be varied and at times can be grossly complicated to understand. Expanding a business overseas would require the organization to adhere to the tax liabilities and labor laws of the specific country which are expected to be different from the origin country. Expanding business into different countries may also require an organization to pay value added tax (Barak 2016)

Three branches of international HRM

Cultural diversity: Cultural diversity and its maintenance is perhaps one of the most critical task that is handled by department of international human resource management. It is not an easy task to mange people that are from different culture, different background, from different ethics and language. While on one hand, the human resource department feel that adapting a cultural diversity in workplace on one hand brings in fresh ideas and thoughts in the company, on the other hand it also invites much complication in work process.

Benefits and compensation: Benefits and compensation refers to the concept that employees will be paid in cash or kind for their efforts towards company. This approach on one hand while is beneficial to domestic companies, while on other hand carrying this approach may raise up some issues between domestic and international employees. For example, benefits of holidays in Asian country’s festive season may be a peak in Western countries. While the employees working in the home countries will be able to take leave during their festive season, since it would be a lean season for the company as well. Thus the Asian employees working in Western organizations suffers (Stone and Deadrick 2015). Thus, discrepancy and dissatisfaction crops up between employees. This dissatisfaction further results in employee attrition rate and also leaves an impact on the organizational structure and the working process.

Importance of cultural diversity in the context of international human resource management:  international human resource department has a hug role to play in then over all context of an organization. The inflation and the deflation of the company largely depends upon the human resource department and the kind of the employees this department recruit for the company. The human resource department encourages the recruitment of employees belonging from different culture in an organization (Cascio 2018). The prime reason behind encouraging such an approach is inculcating fresh and innovative ideas in an organization. People of different culture and cultural belief have different set of ideals and thought processes. The way an employee would look for a solution towards a certain problem would be no doubt different from an employee with another cultural background. There are different approaches to learn from. This multiple approach towards a certain issue brings an opportunity to the company to share and learn new skills and ideas (Story et al. 2014).

There is no iota of doubt that multinational companies are always prevalent with workload. In such a scenario, the international human resource department aims at providing the employees with a little leisure during the working hours. Cultural diversity and its maintenance again plays a very important role in this context (Dickmann, Brewster and Sparrow 2016). The human resource managers and officials celebrates the important functions and festive days of all the cultures within the workplace. For example, the human resource managers may plan to mail all the employees to dress in certain dress code during the Halloween. The human resource managers may also celebrate the festival of lights and colors by letting the employees wear bright colored outfits on a particular day. Likewise, Ester or Navratri may also be celebrated. The point is, though it does not provide the employees with holidays, yet it largely reduces stress and workload of the employees (Gomes et al. 2015). It is scientifically proven that maintaining a free, frolic and colorful work culture helps to lighten up stress building factors significantly. The employees in turn also get to learn about the culture and practices of the other workers. This not only lightens up the mood but also at the same time helps to strengthen the bond amongst the employees (Reiche et al. 2016).

Key challenges faced by international human resource management

Having employees from different cultural background also helps the international human resource managers to deal with foreign clients. For example, the presence of employees of the same culture and ethnicity induces a feeling of oneness to the foreign clients. The clients in the process may take more interest in the business deals just for the fact that an organization or a company gives a homely feeling. Having people within the organization from different cultural background also helps to serve the society better. That is, if an organization has employees from different cultural background, the organization as a whole will be able to understand the needs and demands of different sections of society (Allen et al. 2015). Not only that, since the context is about multinational companies, having cultural diversity in workplace allows the organization to get a clear insight about the demand and wants of customer overseas. Having such an insight, an organization would be able to understand better which particular country if it may serve would fetch the organization with better profit.

While the human resource managers are responsible for recruitment of diverse employees of different cultural origin, at the same time, this department is also responsible to keep a check about the maintenance of equality in workplace. It must not be that the voices of employees of certain cultures are left unheard. All the employees must feel that they are equally important for the company and are contributing towards the organizational benefit in equal amount (Bader, Schuster and Dickmann 2015).

The human resource department faces the challenge of dealing with the employees in the context of their team and respective departments. For example, it is likely that all the organization in the Asian countries follows deferential cultures. Due to this reason employees from Japan or India recruited in organizations in the USA would not be speaking up in meetings and conferences. Remaining calm and quiet and listening to the speeches is a mark of respect. This is their cultural learning. On the other hand, employees from the Western countries recruited in organizations of Vietnam and Malaysia would definitely speak and express their honest opinion in meetings and conferences. Since, employees hailing from the Western countries emphasize in flat organizational hierarchy,  they are likely to open up and speak in front of hierarchy. The issue crops up when the leaders or the managers misinterprets the language style and communication of these employees. At times, the managers and the leaders fail to understand the cultural perspective of these employees. The employees hailing from Western countries may be misinterpreted as rude and over spoken, while the employees from the Asian countries might be looked upon as uninterested, reluctant and casual by the western organizations. The continuation of this process of misreading and misunderstanding the group members may result in clash within team, poor team bond, lack of coordination and thus the same would result in organizational working structure. Lack of team support and lack of team coordination without any iota of doubt would result in lower rate of team productivity. In a wider perspective, if most of the teams face the same issue then the overall production of the organization will be hampered. This is a chain reaction, that is, lower the rate of productivity, sales would be low and that would again impact on the holding of salaries of the employees (Brewster 2017).

Importance of cultural diversity in the context of international human resource management

Apart from misinterpretation of managers and employees that may have detrimental impact on the organization, misunderstanding between the employees of different cultural background may also have the same affect on an organization. Overcoming misunderstanding based on cultural perspectives may be a challenge to the employees and to human resource department since employees are recruited by them. Sometimes the persisting challenges between the employees are hard to overcome. For example, the everlasting political fight between India and Pakistan may be an issue for an Indian and a Pakistani employee working for the same organization. Similarly, the negative cultural; stereotypes between the British and the French employees, between the Polish and the German employees may impact on the overall team coordination and bond.

Language and communication can be a major issue. It is imperative that the employees understand each other’s language. Miscommunication may lead to major misunderstandings between employees. Language barriers does not impose only a single challenge to the employees, it imposes a range of challenges (Farndale et al. 2017). Taking a scenario that all the employees in a particular organization are speaking English language even then the way an Indian would pronounce words would be different from  an African, again the accents of the Americans would not match the accents of British. Thus, there would be a gap in language and communication process within the organization. Apart from verbal communications, non-verbal communications also play a major role. Non verbal communications like gestures, body language, making eye contact are essentially a part of the culture that the employees belong to. It would be note worthy to assert that these are vastly different across cultures. For instance, shaking hands with seniors may be considered a good and friendly act in Western countries (Rees and Smith 2017). On the other hand, the same act might be looked down upon in the eastern countries.

Employees hailing from the western side of the globe might be regular in this act, that might be taken wrong by the eastern seniors. In Morocco, handshake is considered a healthy sign only if done within the same gender. In the United States it is mandatory to introduce oneself with the first mane and a form handshake.  Again discrepancy arises. Language and communication if is not clearly made within teams, the team members would not be able to have a feeling of oneness. The feeling of an outsider would not only hamper the work of the team but would also leave a major impact on the total organizational working process.

Role of human resource managers in promoting cultural diversity

There is no iota of doubt that cultural differences between the employees do create a negative impact on employee relationship as well as the organizational structure. However, there are certain cultural stereotypes that also leaves a positive impact. The international human resource department must focus of the positive aspects of the cultural differences, its notion and stereotypes (Brewster 2017). For instance, the notion that Asians hold more of intelligence and Americans hold more of confidence can be encouraged among the employees that would bring about a positive energy in the workplace. This is not a stereotype and thus can be encouraged to bring about a healthy competition in the workplace.

Training and development is imperative. The international human resource managers must provide the leaders and the managers of all the team with proper training regarding the cultural ethics and norms of all the employees persisting in the team. It is imperative to train the managers and the leaders of the team about the different cultural practices so that the employees does not feel aloof or unwanted in the team. Also, having diversity in workplace may raise the problems of language and communication. In order to mitigate that, the human resource department can arrange for language and communication sessions. It is crucial to communicate both verbally and in written with the team members in order to understand their issues. Again, style of communication also matters (Gomes et al. 2015). For example, the French speak softly than the Australians. Soft spoken French should not be taken for granted by the team leaders, neither the loud Australians must be held as too jovial for work. The HRM must clear the cultural practices with the leaders and the managers and also ask them to make team meetings about the same. This approach will not only result in a good team bonding, but will also show better productivity.

Conclusion

In the concluding segment, it can thus be said that the role and responsibilities of international HRM does not end at only selecting, recruiting and placing the employees in a particular organization. Delving deep, it has been found that international HRM faces a number of issues in dealing with employees from different cultures and national background. The report focuses on the issues of cultural diversity in workplace and its importance. The reader of the report would be helped to get a clearer insight about the need of cultural diversity in an organization in the context of HRM and the issues that international HRM faces. The report also suggests possible recommendations for the issues which if followed, will be able to curd the problems at greater level.   

Reference List

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