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Human Resource In Global Economy Deals

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Question:

Discuss about the Human Resource Management in Global Economy.
 
 

Answer:

Introduction

Human resource management (HRM) in global economy deals with anticipating the future human resource needs, hiring human resources, nurturing the talents, retaining the talents, allocating overseas assignments and others. This study will analyze critical theories and concepts of organizational HRM in respect to four areas like culture, diversity management, international performance management and training and development. Moreover, the study will analyze these four areas with accordance with the case study of No Name Aircraft. The organization operates beyond Australia and it has subsidiaries in China, Singapore and Vietnam. The study will align the theories and concepts of organizational HRM with the four aspects (culture, diversity management, international performance management and training and development) of this organization.

Organizational HRM, Diversity Management and Culture

Organizational HRM and Culture

Organizational culture is the system of shared value, assumption and belief, which govern the behaviour of the employees in an organizational setting. Every organization has different and unique organizational culture, which acts as the boundaries and guidelines for the behaviour of the organizational members. According to Hogan and Coote (2014), organizational culture incorporates the experience, expectation, value and philosophy, which holds the organization together and is reflected on its self-image, inner working, future expectations and interaction with outside world. Furthermore, O’Reilly III et al. (2014) opined that organization culture defines the way an organization treats its employees, customers and other stakeholders. A shared organizational culture facilitates in fostering unity within the employees from different backgrounds.

As per Büschgens, Bausch and Balkin (2013), effective communication pattern in the organization culture is extremely important for the success of an organization. Moreover, there should be free flow of communication both horizontally and vertically among the organizational culture. Such shared communication pattern makes clear understanding of the organizational goals and objectives. Therefore, the employees of the organization can better concentrate on the success of the organizational goals and objectives towards getting high level of organizational success. However, while looking at the organizational culture of No Name Aircraft, it has been found that there is a communication breakdown among the integrated team, and across teams and management. It can actually hinder the success of the organization.

 


According to Nica (2013), healthy organizational culture always look for opportunities to grow and always embrace changes for getting high level of success through innovation. Moreover, organizations can better gain competitive advantage over the competitor organizations through adapting unique features in their products. Therefore, adoption of changes and embracing innovation leads to high level of organizational success. However, while assessing the organizational culture of No Name Aircraft, it has been found that the staffs of the organization resist any attempt to make changes. Moreover, the Headquarter of the organization has failed to make a sense of urgency regarding the organizational changes among the employees of subsidiaries. In this way, the organizational culture can seem to be a hindrance for the organizational success and improve product quality.

Denison, Nieminen and Kotrba (2014) pointed out that healthy organizational culture develops team and foster teamwork, which collaborates towards achieving organizational goals. In case of international business, there should be high level of collaboration across the teams for getting organizational success. In such team oriented organizational culture, employees and managers rapidly offer their assistance for each other in solving complex organizational problems. Therefore, collaboration across the teams develops efficient organizational success. However, in case of No Name Aircraft, there is a lack of integration across the teams. Moreover, the teams are more likely to work to the specifications for their areas only. In this way, the working relationships across the teams are suffering. The employees and managers from one team are not cooperating with the members of other teams. Therefore, there is a lack of shared knowledge across the teams, which is lowering the quality of the aircrafts.

Apart from that, Lukas, Whitwell and Heide (2013) stated that supportive organizational culture develops prompt success of an organization. The employees can get adequate support from the manager towards better understanding the organizational goals and performing complex organizational task. However, the employees of No Name Aircraft are complaining that they are not getting adequate support from the managers towards getting organizational success. Therefore, it can be very difficult for the organization towards enhancing the quality of their products.

 

Organizational HRM and Diversity Management

Diversity management defines the strategies of utilizing best practice with proven results towards finding and creating diverse and inclusive workplace within organization. According to Olsen and Martins (2016), diversity management is the practice of supporting and addressing multiple lifestyles and personal characteristics of the employees from different cultural backgrounds. On the other hand, Sabharwal (2014) opined that diversity management includes educating the groups and providing enough support to the employees for the acceptance of or respect for different cultures, racial, economic, societal, geographical and political backgrounds.

Janssens and Zanoni (2014) pointed out that employees from diverse culture can bring individual talent and experience, which foster unique ideas towards solving complex organizational problems. However, while assessing the diversity management of No Name Aircraft, it has been found that the organization has confined simple policy that every organizational member should be respectful race, age, ethnicity, gender, sexual orientation, physical abilities, religious beliefs and other philosophies. However, the organization has issues with embracing rich values for the employee from different backgrounds. Moreover, the Headquarter of the organization has high level of intolerance in working employees from different generations. The senior managers are intolerant in working with the apprentices. It is actually making the working relationship within the organization strained.

Ashikali and Groeneveld (2015) pointed out that diversity management suggests the managers to provide equal opportunities to the employees from different cultural backgrounds and physical abilities. It can bring diverse collection of skills and experiences, which allow an organization towards providing services to the customers on global basis, which can even lead to high level of competitive advantage. In case of No Name Aircraft, it has been found that there is lack of recruitment of people with disabilities in China. The managers are actively ignoring and rejecting job applications of people with disabilities, even when their skills are above and beyond other candidates. In this way, the organization is breaching their ethical consideration through recruitment discrimination, which can even lead to legal action from rejected candidates with a disability.

As per Kaiser et al. (2013), the human resource managers of an organization should develop clear set of organizational policies for helping the employees in understanding the each other’s culture within their workplace. Moreover, the interaction among the employees from different cultural backgrounds is highly dependent on perceptions of each other among the employees. On the other hand, Kulik (2014) opined that the organizational members should also be concerned about diversity training, which can foster high level of cultural understanding among the employees from diverse backgrounds. However, while looking at the diversity management of No Name Aircraft, it can be seen that the human resource managers of this organization has not set any specific practices for managing diversity in the organization. There is high level of discrimination among the employees from diverse backgrounds. The organization also has lack of appreciation for the diverse employees across the subsidiaries, which prevent knowledge sharing and potentiality of creating competitive advantage over the rivals.

 

International Performance Management, Training and Development

International Performance Management

International performance management defines the process, which allows an international organization towards assessing and evaluating the individual as well as overall corporate objectives as per the set organizational standards. On the other hand, Brouthers, Nakos and Dimitratos (2015) opined that performance management identifies the gaps between the standard performance and actual performance. Furthermore, performance management process identifies the developmental and training needs for the employees having poor performance. On the other hand, the process is also associated with motivating the high performing employees through attractive reward and recognition process.

Gerschewski, Rose and Lindsay (2015) pointed out that international performance management needs regular assessment of the performance of the employees in all the subsidiaries across the globe. However, while assessing international performance management of No Name Aircraft, it has been found that performance review is only conducted in the Australian branch. No performance review is conducted at any of the subsidiaries. There is no formal performance management process for the expatriates in the international subsidiaries. Therefore, it is not possible to assess the actual performance level of the employees in the international subsidiaries.

On the other hand, Maley and Moeller (2014) opined that due to the variations in the environmental influences among the subsidiaries, performance management of the employees cannot be measured through uniform performance management process. The performance of the employees in different international subsidiaries can be affected by different environmental factors like political factor, social factor and others. Therefore, there should be clear and different performance management criteria for assessing the performance of the employees in different international subsidiaries. However, the Headquarter of No Name Aircraft takes very ad hoc approach in performance appraisal process and they do not consider any economic factor, which can impact their business target. There is no different set of performance appraisal criteria for the employees of Singapore, China and Vietnam.

Performance management can be effectively related to Goal Setting theory. Melnyk et al. (2014) goal setting theory set specific goals and objectives for employees, which leads to greater performance and better output. As per this theory, particular, clear and difficult goals are greater motivating factors than those of easy, vague and general goals. However, while assessing international performance No Name Aircraft, it can be seen that there is no specific set of goals and objectives for the subsidiaries of the organization. Moreover, the goals are not also challenging and realistic, which can give the employee a feeling of triumph. On the other hand, goal setting theory demonstrates of employee participation through high level of self-efficiency and goal commitment. However, the management of No Name Aircraft mostly uses centralized approach and the goals are not self-set by the employees. Therefore, the employees are not encouraged to meet the organizational goals effectively.

Training and Development

Considering the case of No Name, it is clear that the expatriates are not given adequate training so that they can work effectively in culturally diverse environment. According to the viewpoint of Kadiresan et al. (2015), behaviourism theory indicates directing and changing one’s behaviour into one particular direction. This helps an employee to change attitude and perception when given new responsibility. However, Wilson (2014) argued that negative reinforcement through behaviourism theory often creates biased appraisal from the trainer that prevents a potential candidate’s promotion. Furthermore, Minbaeva et al. (2014) highlighted that praising an employee based on performance that has been set by the instructor or the trainer helps in employee career development. Eventually, the candidate is able to deal with new responsibilities and role that indicate succession planning. While comparing the theory with No Name, it can be said that HR Department never focused on talent management, career planning and internal recruitment. Such ignorance has led to poor quality service and unachieved corporate objectives.

According to Donate, Peña and Sanchez de Pablo (2016), cognitive learning theory focuses on employee mental process improvement by educating, informing and motivating candidates. This theory does not involve physical performance evaluation but highlights one’s internal strength, knowledge and capability. On the other hand, Kadiresan et al. (2015) argued that cognitivism learning theory does not deal with motivating employees; instead it deals with encouraging problem-solving skills and strategic thinking capabilities of employees. While considering No Name, it can be said that the management neither educates nor inculcates problem-solving skills among employees. The organization never focuses on internal recruitment and identifies internal workforce talent recognition.

While considering the viewpoint of Maley and Moeller (2014), constructivism learning theory helps in employee performance management through active learning and development methods. Employees are given the opportunity to actively participate in new programs beyond their designated roles. On the other hand, Minbaeva et al. (2014) argued that through constructivism learning theory an organization is able to make their employees understand hidden talent, bring out experience and justify their personality in new activities. This creates a competitive culture of performance among employees and eventually candidates guide themselves to achieve new position. Such activities contribute largely in training and development accompanied by succession planning, career planning, career development and take over the role for fear of being side-lined in promotion.

Gerschewski, Rose and Lindsay (2015) pointed out that connectivism learning theory establishes the communicative network for sharing knowledge among employees. Even through employees are given training, still while practically working in new geographically diverse nation, they need advice from past seniors. This is actualized through connectivism theory where expatriates are trained through virtual technology in multiple environments. Furthermore, Wilson (2014) highlighted that connectivism learning theory establishes diverse opinions for connectivity, resources and information. Stimulating topics are discussed and learned through social networking technology. No Name does not have any such training initiatives taken earlier, due to which employees are extremely dissatisfied and performance is never as desired.

 

Conclusion

While concluding the study, it can be said that organizational culture defines the values, beliefs, assumption and behavior of the employees in an organization. It is the way an organization treats with its employees, customers and other stakeholders. Effective communication in the organizational culture develops shared value among the employees. However, in No Name Aircraft, there is communication breakdown and lack of integration across the teams. Moreover, the management does not believe in shared value of their knowledge for enhanced organizational performance. Diversity management is the practices of supporting different lifestyle and personal characteristics of the employees from different cultural, racial, age group, economic, physical abilities and social backgrounds. Diversity management needs proper understanding and respect for the employees from different backgrounds. However, there is an issue in the diversity management of No Name Aircraft. Senior managers feel uncomfortable in working with junior managers. Furthermore, there are no specific performance criteria in No Name Aircraft for measuring the actual performance of the employees. Training and development of international human resource require proper training programs to the expatriates. However, there is lack of proper training and development program for the expatriates of No Name Aircraft. The employees are not also getting any scope of career development within their organization.

Recommendation

Communicative and Teamwork Working Culture

No Name Aircraft should encourage flexible communication among the team members of international subsidiaries. It will foster shared value among the team members of the organization. Furthermore, the organization should also develop integrated teamwork for enhancing the team performance in the international subsidiaries.

Diversity Management

The senior managers of No Name Aircraft should understand the values and perspectives of junior managers. In this way, the organization will be able to apply the new and innovative talent of the new generation employees towards gaining high level of organizational success. Apart from that, the organization should also select the disable candidates, who are actually talented and contribute to organizational success.

Specific Performance Management Criteria

No Name Aircraft should conduct regular performance review for the employees in different international subsidiaries. In this way, the organization will be able to analyze the gaps in the performance level of the employees and provide adequate training for their further skill development.

Frequent Training and Development Program

The organization should organize frequent training session for the expatriates in its international subsidiaries. It will develop the skills and talents of these employees for handling organizational success. On the other hand, the organization should also provide better career development program towards motivating the employees for furthermore improved performance.

 

References

Ashikali, T. and Groeneveld, S., 2015. Diversity management in public organizations and its effect on employees’ affective commitment: The role of transformational leadership and the inclusiveness of the organizational culture. Review of Public Personnel Administration, 35(2), pp.146-168.

Brouthers, K.D., Nakos, G. and Dimitratos, P., 2015. SME entrepreneurial orientation, international performance, and the moderating role of strategic alliances. Entrepreneurship Theory and Practice, 39(5), pp.1161-1187.

Büschgens, T., Bausch, A. and Balkin, D.B., 2013. Organizational culture and innovation: A meta?analytic review. Journal of product innovation management, 30(4), pp.763-781.

Denison, D., Nieminen, L. and Kotrba, L., 2014. Diagnosing organizational cultures: A conceptual and empirical review of culture effectiveness surveys. European Journal of Work and Organizational Psychology, 23(1), pp.145-161.

Donate, M.J., Peña, I. and Sanchez de Pablo, J.D., 2016. HRM practices for human and social capital development: effects on innovation capabilities. The International Journal of Human Resource Management, 27(9), pp.928-953.

Gerschewski, S., Rose, E.L. and Lindsay, V.J., 2015. Understanding the drivers of international performance for born global firms: An integrated perspective. Journal of World Business, 50(3), pp.558-575.

Hogan, S.J. and Coote, L.V., 2014. Organizational culture, innovation, and performance: A test of Schein's model. Journal of Business Research, 67(8), pp.1609-1621.

Janssens, M. and Zanoni, P., 2014. Alternative diversity management: Organizational practices fostering ethnic equality at work. Scandinavian Journal of Management, 30(3), pp.317-331.

Kadiresan, V., Selamat, M.H., Selladurai, S., SPR, C.R. and Mohamed, R.K.M.H., 2015. Performance Appraisal and Training and Development of Human Resource Management Practices (HRM) on Organizational Commitment and Turnover Intention. Asian Social Science, 11(24), p.162.

Kaiser, C.R., Major, B., Jurcevic, I., Dover, T.L., Brady, L.M. and Shapiro, J.R., 2013. Presumed fair: ironic effects of organizational diversity structures. Journal of personality and social psychology, 104(3), p.504.

Kulik, C.T., 2014. Working below and above the line: The research–practice gap in diversity management. Human Resource Management Journal, 24(2), pp.129-144.

Lukas, B.A., Whitwell, G.J. and Heide, J.B., 2013. Why do customers get more than they need? How organizational culture shapes product capability decisions. Journal of Marketing, 77(1), pp.1-12.

Maley, J.F. and Moeller, M., 2014. Global performance management systems: The role of trust as perceived by country managers. Journal of Business Research, 67(1), pp.2803-2810.

Melnyk, S.A., Bititci, U., Platts, K., Tobias, J. and Andersen, B., 2014. Is performance measurement and management fit for the future?. Management Accounting Research, 25(2), pp.173-186.

Minbaeva, D., Pedersen, T., Björkman, I., Fey, C.F. and Park, H.J., 2014. MNC knowledge transfer, subsidiary absorptive capacity and HRM. Journal of International Business Studies, 45(1), pp.38-51.

Nica, E., 2013. Organizational culture in the public sector. Economics, Management and Financial Markets, 8(2), p.179.

O’Reilly III, C.A., Caldwell, D.F., Chatman, J.A. and Doerr, B., 2014. The promise and problems of organizational culture: CEO personality, culture, and firm performance. Group & Organization Management, 39(6), pp.595-625.

Olsen, J.E. and Martins, L.L., 2016. Racioethnicity, community makeup, and potential employees’ reactions to organizational diversity management approaches. Journal of Applied Psychology, 101(5), p.657.

Sabharwal, M., 2014. Is diversity management sufficient? Organizational inclusion to further performance. Public Personnel Management, 43(2), pp.197-217.

Wilson, J.P., 2014. International human resource development: Learning, education and training for individuals and organisations. Development and Learning in Organizations, 28(2).

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