Discuss about the Human Resource Management for Premier Technology Solutions.
Premier Technology Solutions is a multinational company based in Australia. The company was started in 1986 and provides technology related solutions to its clients. The company has a workforce of 140,508 employees and has been expanding its business into a number of countries of late. The company, which was originally started in 1986, today has its clients belonging from 29 different countries. The company has been expanding its business overseas and has recently decided to open up a new subsidiary in another country to help the headquarters carry out their operations smoothly.
In the present era of global competition, companies are highly relying upon their human resources to achieve market competencies for them. Human resources are the best resources right now and no business organisations can run without the presence of human resources. Premier Technology Solutions is operating in a service sector industry and it is very important for the company to have a talented pool of employees. In service sector especially, it is important for every company to have an effective human resource management as the entire business is dependent on the performance demonstrated by the employees. In case of Premier Technology Solutions, it has been decided that the new subsidiary will be opened up in India. The decision has been taken by some of the senior level executives, keeping in mind the benefit that an Indian subsidiary can provide in terms of economies of scale and an efficient pool of talent. During the expansion program, it is obvious that the company will face a number of problems when it will come to management of human resource and performing human resource functions. Therefore, in this assignment, we will discuss a number of human resource functional issues that the organisation will have to face while carrying out its expansion program.
Human Resource Issues
Human resource management is an approach that allows business organisations to manage their employees in the best possible manner. The approach aims at improving the relations between employees and employers by improving the overall work conditions for the employees. Human resource managers are able to make use of efficient human resource functions, such as training and development, compensation and benefits, career management, selection and recruitment, etc. that help them in improving the work conditions and optimise the performance of the employees. When companies have to perform the human resource functions for their organisations at an international or a global level, it becomes even more difficult for them as the issues related to these functions increase exponentially. Let us now discuss some critical issues that the company would face while trying to expand its business operations in India:
Staffing Approach à a major problem that the company will have to face while trying to expand its business by opening up a new subsidiary in India is related to the approach that it will adopt for staffing the new subsidiary. Multinational companies have to take a lot of care when they chose a staffing approach for any new subsidiaries. In this case, the company will have an option to choose from four staffing approaches:
Ethnocentric à in an ethnocentric approach, companies decides to staff its new subsidiary’s senior positions with home country employees while the lower positions are occupied by the host country employees.
Polycentric à in a polycentric approach, companies decides to staff their new subsidiary by hiring new employees from the host country itself.
Regiocentric à in this approach, business organisations staff their new subsidiaries by recruiting employees from various countries that fall within a geography region of the business.
Geocentric à in this staffing approach, companies staff their new subsidiaries by hiring employees who are best suited for the jobs, irrespective of their country of origin, cultural background, etc.
Selecting an adequate staffing approach is important as most of the operations and how a company will work depends upon the staffing approach. For example, an ethnocentric approach ensures establishment of home culture in the host country and also ensures proper reporting to the headquarters whereas, a polycentric approach reduces the control of the headquarters on a subsidiary and also makes it difficult to implement the home culture in the subsidiary. Further, selecting regiocentric or geocentric approaches can lead to recruitment of third country nationals that might demand a higher pay as compared to the host country or home country employees. Therefore, selecting a staffing approach for a new subsidiary, while planning for business expansion, is a major issue that the company will have to face.
Recruitment And Selection à the process of identifying job openings and then selection the best candidates suitable for the openings identified is known as recruitment and selection. The next and the most important human resource function is recruitment and selection and the company will face a lot of issues while performing this function. If the management of the company selects an ethnocentric staffing approach, it will have to choose expatriates that will be sent to the new location. Expatriate programs are very complicated and expensive and it can cost a lot of resources to the company if the expatriate programs are not managed properly. Expatriates are given a lot of additional benefits, such as hardship allowances, housing allowances, family allowances, etc. (Study.com, 2016). As a result, it becomes important to choose expatriates wisely, which proves to be an issue for the human resource managers. On the other hand, if the company selects a polycentric approach for staffing its new subsidiary, it will have to abide by a number of rules and regulations that the Indian government will put forward in terms of minimum wages, minimum number of Indian employees in the subsidiary, etc. Further, it might also become difficult for the company to exercise a proper control over the subsidiary in a polycentric approach while it might not also find the right talent to fit into the jobs. Therefore, recruitment and selection will also prove to be a great issue in the expansion efforts of the company (Smallbusiness.chron.com, 2016)..
Expatriate Management à expatriates are those employees who are sent overseas to fulfil an assignment for their companies. Due to globalization and increase in overseas business opportunities, expatriates who can go abroad and can handle the work operations of a company are under a great demand. Multinational companies are looking for employees that can work in the organisation and can be sent to foreign lands whenever required but it is not an easy task to manage this special category of employees. Companies have to look after a number of things before they can select an expatriate and send him or her to a foreign location. First of all, it is important that the expatriates being selected for a foreign job have the technical proficiencies that are required to fulfil the piece of work that will be assigned to them. Secondly, the company will also have to check whether the expatriates will be able to adjust in the work culture of the foreign subsidiary or not (Selmer and Suutari, 2011).. If the employees being sent on a foreign assignment are not cultural sensitive, they might experience a cultural shock and it becomes very difficult for such expatriates to successfully complete the task assigned to them. Thirdly, the companies also have to check the number of dependent family members that an employee being considered for an expatriate program has. If an expatriate has a greater number of dependent family members, it would become difficult for the company to handle their expenses and needs while the employee would be away for a foreign assignment. Lastly, it is important that the expatriates are given proper compensation and benefits that would help them in enjoying a proper living on a foreign land and maintain the same standard of living, which they had in their home country. If the expatriates feel any kind of economic distress or inability to sustain in a foreign land, the chances of failure of expatriate program increase exponentially (Bowman and Meacheam, 2000)..
Compensation And Benefits à another major problem that the human resource managers of the company will face while trying to expand their business operations in India is related to the compensation and benefits that will be given to the Australian employees and the Indian employees. It is obvious that the company would not staff the new subsidiary with Indian employees alone. It will definitely send some expatriates from its home country to look after the operations in the new subsidiary so that the reporting to the headquarters is proper (Yousef, 2015). In such a case, it becomes difficult to decide the compensation and benefits that will be given to the expatriates and to the Indian employees working along with them. The company will have to fix the salaries in such a way that neither the Indian employees feel under paid as compared to their Australian counterparts nor the Australian employees should feel that they are being under paid or feel any kind of financial distress while working on a foreign land. The company will have to conduct a number of surveys in order to gather knowledge about the basic pay rates in India for the jobs that the company is going to offer to the Indian employees. The company will also have to conduct a thorough research to check out the market trends for expatriates in India so that it can also pay its expatriates accordingly. As the company is entering a foreign market to expand its business operations, the wages it will offer to its employees would also have to be considered from a legal point of view (Smallbusiness.chron.com, 2016). It will be important to fulfil the restrictions or the basic pay grades that the government of the host country will put forward for the company. Further, the company will also have to take important decisions regarding the benefits that it will have to provide to the expatriates that would stay in India to look after the operations of the company. Expatriates are given bonuses and benefits in terms of housing allowances, hardship allowances, travel allowances, family allowances, etc. Therefore, the company will also have to consider the benefits that it will provide to its expatriates working in the Indian subsidiary.
Cultural Integration à culture is defined as the values, ethics, morals, religions, cuisines, languages, communication styles, etc. that a particular group of people follow. One of the greatest issues that the company will face while expanding its business operations in India is the integration of the Australian and the Indian culture. It is obvious that in the Indian subsidiary, the Australian and the Indian employees will have to work together. When the Indian and the Australian employees will work in the same place, it is obvious that they will face a lot of cultural issues that might cause a great deal of problem for the human resource management of the company (Scribd, 2016). Cultural differences, such as language, communication patterns, work cultures, etc. will play a major role in the subsidiary and it might become difficult for Indian as well as the Australian employees to work with each other as a team. For example, India rates 77 on the power distance index whereas Australia rates 36 on the same, which means that the Indians will demand a highly organised structure and differentiation in terms of power as compared to the Australian employees (Smallbusiness.chron.com, 2016). Therefore, dealing with cross cultural issues and trying to narrow down the cultural gaps that would exist between the two types of workforce in the foreign subsidiary would also be a great problem for the human resource management of the company.
Training And Development à another important issue that the company will face while its expansion in India is related to training and development of employees. The company will be sending expatriates to the new subsidiary and will also be hiring new staff from the host country itself, which makes it important that both types of employees are adequately trained and developed before they can start working on the foreign lands. The company will have to train and develop its Indian employees in such a way that the clients do not feel in the services being offered to them by the headquarters or the subsidiary. The company will also have to ensure that the Indian employees are aware about the work culture of the headquarters and communication style so that they can avoid communication barriers and can function properly (Dowling, Welch and Schuler, 1999). On the other hand, it is also important for the company to arrange for training and development programs for its home country employees (expatriates) that will be aimed at increasing their cultural awareness and sensitivity. Another issue that arises while planning the training and development program of the employees is that how and where they will be trained. The company can definitely not afford to call the Indian employees to its headquarters for training and development as it will be highly expensive and time consuming. Thus, the company will have to send a team of capable professionals to India before the commencement of work operations so that they can hold training and development sessions to train the Indian employees. The company will also have to hire professional helpers to help in training and developing their expatriates who will be travelling to India for looking after the work operations. Therefore, arranging for the training and development of the employees will also pose a great issue to the human resource managers of the company.
In the present era of globalization and international business, companies are trying their best to enter the international market and reap the benefits of having a global business. In such conditions, it is important that Premier Technology solutions tries its best to tap new market opportunities while the conditions are favourable. Due to expansion of business and a rise in the demand of the services of the company, it has become important to expand the business overseas and look after options that would help the management in serving their new clients and fulfilling the service demands. Planning a subsidiary in India is a great option as an Indian subsidiary will provide a lot of talented employees to handle the work operations and will also help in reducing the overall operating costs of the company.
It would obviously be difficult for the management to carry out the human resource functions smoothly as the differences between the two countries are great in number and the cultural differences will add up to the problems. Thus, the company will require an efficient and effective human resource management department that will understand the requirements of the human resources and will execute the human resource functions according to the demands of a situation.
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