Describe about the International Human Resource Management for Increased Globalization.
Over time, there has been increased globalization enabling easy mobility and cooperation between countries thus encouraging most institutions to operate internationally. As such, there is a need to develop and implement a Human Resource management that is capable of effectively managing employees of diverse culture and beliefs. Accordingly, global organizations should put great emphasize on integrating International Human Resource Functions to ensure an efficient management of the increased labor force that is characterized by cross- cultural practices. This paper seeks to examine the significance of including International Human Resource Management (IHRM) in the organization. Further, it explores the inherent challenges in global human resource management and ultimately provides the recommendations that can be applied to overcome the various problems identified (Harris et al., 2003, p.54).
Nature, Integration Process and Importance of IHRM
Nature of IHRM and Integration Process
Human resource is crucial to the growth of any organization. Thus, a significant attention should be given to the active management of human resource. International Human Resource Management refers to the administration of the workers of businesses that operate in in the global market. Notably, IHRM primarily entails global human resource management functions that include planning, staffing and efficiently utilizing the knowledge and the skills of the large labor force to achieve optimal production level that conforms to the Total Quality Management policies (Cogin and Williamson 2014, p.711).
IHRM primarily involve an active collaboration of human resource activities, the different types of personnel and the diverse kinds of countries of operation. The human resource activities entail similar functions to the domestic human resource management, that is, planning, organizing, hiring, training and development of the engaged workforce, remuneration and performance appraisal among others. IHRM deals with the management of different kinds of employees such as the parent country nations, host country nations, and third country nations. Finally, the countries involved in IHRM includes the host country which may have subsidiaries, the home state having the companies headquarter and any other country that provides additional source of labor and finance. Importantly, IHRM has a primary aim of ensuring effective interplay between the three dimensions to achieve optimal management of the human resources of international businesses (Harzing and Pinnington 2010, p.65).
The HR professionals have the responsibility of ensuring a functional integration of IHRM in the multi- national organization’s strategies. The role of Global HR experts changes depending on the worldwide orientation of the enterprise, hence, for effective International Human Resource Management; the managers should pay attention to the international organization strategy and afterwards develop HR policies that conform to the detected plans. Moreover, the IHR manager should identify any deviation of the set International human resource management strategies and ensure timely advice to the senior officials for corrective measures. Remarkably, the IHR managers must essentially focus on their worldwide proficiencies and acquire the vital skills that relate to the fundamental aspects of global human resource management (Laurent 1986, p.98).
Importance of IHRM
The increased globalization makes it necessary to modify the roles of the domestic human resource so as to manage the employees of the global organizations efficiently. Notably, the integration of the IHRM brings many benefits to the organization as discussed below;
IHRM acts as a human capital steward. International companies more often spend a large amount of money on workers because of the nature of the labor force required. Consequently, the management of such companies should ensure proficient management of such human capital investment. Incorporating International Human Resource Management into the enterprise’s strategies fundamentally guides and promotes the partnership of the employees in the various countries of operation with a primary aim of achieving the optimal return on the firm’s human capital investments (Laurent 1986, p.95).
Furthermore, IHRM monitors and the implements corporate HR policies. Global human resource management ensures satisfactory performance of corporate HR guidelines in all the branches and subsidiaries of the firm. Primarily, IHRM builds sound commitment of top management and plays a significant role in identifying areas of weaknesses and organizes the needed training. Moreover, International Human Resource Management enhances social responsibility by ensuring that future leaders are trained in a manner that makes them sensitive and equipped to deal with international challenges (Conger and O'Neill 2012, p.52).
Additionally, IHRM significantly improves the understanding of the different regulations in the countries of operation. Most multinational firms have a largely decentralized structure of organization which makes the need for political and laws management to be able to control the various global laws adequately. The domestic HR lacks the needed expertise to manage employees in different nations hence integrating IHRM gives the multinational firms the ability to develop and implement policies that conforms to the regulations of the various countries of operations (Harzing and Pinnington 2010, p.69)
Through International Human Resource Development, there is increased mobility that significantly aids the process of sharing materials, tools, and skills. Transfer of knowledge between countries of operation is made possible by the establishment of a global center of HR excellence that represents knowledge linkages. Through the networks, local information, and best practices can be passed from to the various employees and significantly enhances the performance of the global labor force of the global businesses (Tayeb 2005, p.76).
International Human Resource Management also assists in MNC strategic planning and control of human resources. Effective planning and monitoring of human resources are crucial to the success of most global businesses. As such, IHRM ensures workable survival plans by significantly enhancing the ability of the firms to attract, motivate and continuously train and develop human factor for internationalization purposes (Chitakornkijsil 2010, p.379)
It is worth noting that the aspect of integrating International Human Resource Management into the organization's strategy is an integral part of global businesses. The discussed roles ascertain the significance of the extended concepts of global human resource management.
Challenges of Integration of IHRM
Managing international human resources is complex and presents various problems that result from the fact that the employees are from more than one nation (Geppert et al., 2016). The notable challenges are as discussed below;
IHR managers face a challenge in developing workable staffing policies that adequately suits the parent country, host nation and other countries of operation. The success of the human resource management significantly relies on the ability of the department to attract the most competitive and appropriate applicants through the recruitment process. However, in International Human Resource Management, it is hard to draw a sufficient number of candidates during the hiring process (Muscalu 2015, p.351). The issues of expatriation, compensation, and repatriation significantly impacts on the success of IHRM in staffing. Moreover, the IHR manager has the responsibility of deciding the perfect time and place to deploy expatriation and repatriation to get the most favorable outcome.
Government Regulations in the countries of operation and different political climate
Most countries have different rules that govern working conditions, minimum wage rates among other aspects of employment. Moreover, there are labor unions which primarily aim at ensuring that the employers follow all the set regulations that pertain to the employment in the country of operation (Welch and Björkman 2015, p.320). Additionally, taxation presents a challenge to the businesses that operate globally because the states of operation have different tax rates and policies. As such, an integration of IHRM into the organization’s strategies should ensure compliance with the regulations set by the governments of the countries involved in International Human Resource Management. The integration, therefore, has a cost since the IHR manager needs additional HR services such as international taxation and development of flexible policies that conforms to the regulations of the countries of operation (Chitakornkijsil 2010, p.379).
Furthermore, the dynamic nature of political climate worldwide negatively impacts on the mobility and communication between the countries of operation. Some of the countries may experience political instability, thus, hindering the activities of the International Human Resource managers.
The cultural differences in the various countries of operation present a significant challenge to International Human Resource Managers. IHRM involves three types of states, that is, the host country, parent country and other countries of operation. Employees in these countries exhibit different cultural beliefs and practices. Thus, the managers face a serious challenge in procuring, allocating and utilizing the employees in the countries of operation. Notably, cultural and environmental diversity impedes the most vital aspects of human resource management such as planning, organizing, and staffing among others (Lim and Noriega 2007, p.72)
Global Health and Security Concerns
Expertly managing global health and security matters pose a great challenge to the IHRM. Most countries have set regulations governing health and safety matters of their active citizens. However, the rules differ from one country to another making it difficult for IHR managers to develop effective health and security policies that suit all the employees from the countries of operation.
Variety of International Organizational Model
There are different models of organizations worldwide. Notably, the type of business model significantly determines the type and nature of HR policies to be developed and implemented. Thus, IHRM faces a serious challenge in ascertaining the degree to which the HR strategies and practices should differ to match the different organization models in different countries (Tarique et al., 2015).
Managing Challenges facing International Human Resource Management
The inherent benefits of integrating IHRM into the organization’s strategy make it necessary to develop the needed measures vital for effective management of the challenges faced in global human resource management (Dowling 2008). Several strategies for effective IHRM are available to the top management for efficient global human resource management.
At the macro level, the management should ensure that the strategic international HRM is deployed to ensure that the institution’s key values and goals are significantly supported by the human resource guidelines, actions, and practices. This strategy enhances the formulation and implementation of universal policies that can be suitably applied in the countries of operation. At the middle level, HR professionals are primarily expected to put great focus on issues that relate to unions in the host country. At this level, the HR specialists have a responsibility of dealing with the union's regulations in the host country by ensuring that the policies developed in conformity with the host country’s laws. At the micro level, the HR officials are focused on nurturing a global mentality among the workforce by encouraging and developing HR competencies (Conger and O'Neill 2012, p.52).
Remarkably, IHRM should work with the senior management team with a primary aim of achieving the goals of the global firms. Importantly, there should be adequate communication between the senior management and the managers in the other countries and subsidiaries for identification of the competencies required to successfully carry out the roles of HR globally such as procurement, allocation, and utilization of the human resources for ideal production. The coordination of the managers involved in IHRM eliminates the challenges that hinder the staffing process. Moreover, the cooperation will significantly improve the success of the HR policies in the major aspects such as sourcing, training and development and creation of an appropriate reward and compensation system for the multinational firms to ensure compliance with the requirements of the respective labor unions. Additionally, the coordination provides harmonization of the health and safety regulations among the various countries (Brewster et al., 2007).
Fundamentally, the managers should seek a comprehensive understanding of the various cultures that prevails in the countries of operation. Due to the globalization trend in businesses, Managers are expected to have a vast knowledge of cultures to manage the different employees perfectly. Moreover, the full knowledge of cultural values significantly eliminates the challenges of communication barrier and cultural conflicts that exists between employees (Evans et al., 2002)
The increasing globalization has necessitated the incorporation of International Human Resource Management into the strategies of the international businesses. As such, the global firms should embrace the implementation of IHRM to enjoy the inherent benefits of the integration (Sengupta 2007, p.97). However, significant focus should be put on the strategies that aim at managing the challenges to effectively manage international employees.
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