Effectiveness of Human Resource Management Practices at RMC Global
In this era of global competition, the importance of Human Resource Management practices in the context of organizational performance has been realized to a great extent. In last few decades, great research has been conducted in the field of HRM and its relation to organizational performance. The researchers have found a strong positive relationship between human resource practices and enhanced organizational performance. Primary purpose of this research was to investigate the relation between human resource activities and organizational performance at RMC Global Company. Data was collected through mail questionnaire sent to employees of HR department of RMC Global Company, UK. 51 filled responses or questionnaires were received and utilized in the analysis of this study.
Overall research methodology of the study was based on onion model presented by Sounders. According to analysis, employees believed that they are provided an opportunity to participate in decision making, of business which affected their performance. Findings of the study show a positive relationship between human resource management practices and organizational performance. It depicts that RMC employees participate in innovative technologies to a great extent in order to contribute positively in the organizational performance. Further, the findings can draw a road map for the managers of UK insurance companies in order to appreciate the efforts of human resources to get sustaining competitive advantage in the industry. In conclusion, HR practices have positive relation with the organizational performance.
However, it is recommended that RMC Global Company should provide employees with more conducive and learning environment. Entire HRM activities should be executed in a best way in order to enhance the organizational performance. Aims and objectives of the study have indispensable importance and define various implications of this study, its beneficiaries, as well as the study outcomes. The main aim of the study is to examine how HR activities impact on performance of RMC Global Company.
Identification and investigation of various aspects of human resource management practice
Investigation of the impact of HR activities on individuals’ performance at RMC Global Company
Examination of the impact of HR activities on RMC Global Company’s performance
Suggesting of an effective implementation plan of HR practices to future performance of RMC Global Company and other insurance companies
All of these objectives are specific, measurable, reliable, attainable, and actionable that will contribute to the enhancement of RMC Global Company’s performance. These will also help the RMC Global Company to gain enduring growth in insurance sector.
As a result of growing forces which appeared in response of rapid change in the business environment, the direction of the policy is steered towards an assortment of reactions between industrial organizations, the rate of technological invention, variation in consumer demand as well as Globalization of markets. Manufacturers are the features that amplified the vitality of the competitive environment within which organizations are required to retort. Today a competitive and efficient human resource is important for the power of organizations that is facing the trials of business. Nowadays, the implication of containing a competitive human resource is equal to the achievement of organizations. An effective and competent human resource would produce productive and quality individuals that will ultimately decrease the difficulties associated with human resource just like absenteeism, turnover and job dissatisfaction of employees. What is meant by human resource management? Actually Human resource management is a philosophy, a policy, practice and a system which can stimulate individuals who are working in an organization. Activities of HRM are composed of staffing, development, performance appraisal, training and compensation management, health and safety as well as industrial relations.
HRM practices are the activities which can inspire the workers also enhance employees’ levels of job satisfaction and organizational commitment. In the early 1980s the Concept of HRM became prevalent, there was growing educational concern in the area of research and concept. Initial models of HRM were mostly conceptual lacking considerable experimental indication for their rationality. Decade of 1990s perceived a considerable change in the concept as experiential research began which initiated the process to probe link between performance and HRM practices. In modern times the research provides empirical confirmation of the relationship among performance and practices of HRM. Many researchers also contain a cumulative concern in the notion of HRM practices as well as the strongest connection among organizational performance and HRM practices. Basically, the concept of HRM surfaced in the 1980s from outdated personnel management practices. Typically personnel management was mostly considered a connecting the recital of simple functions of staffing, frequently steered, devoid of concern to other organisational actions as well as devoid of arrangement of administrative objectives. HRM is like a business that is progressed as an allowance of the typical role of personnel in the form of a very operative organisational action.
A human resource audit is a single system that is used to assess and evaluates all the activities in the arena of human resource management. Its sub-grouping is not perfect and methods of human resource assessment are not acknowledged evenly in the textbooks of modern times. Though, the literature of the combination of human resource auditing along with some other HRM assessment methods contain indication for the determinations of comparison and discussion.
I do hope you enjoyed reading this post on human resource management practices at RMC Global. There are many other titles available in the HRM Dissertation Collection that should be of interest to human resource management students and CIPD professional. There are many dissertation titles that relate to other aspects of HRM such as employee engagement, HRM Theory, absenteeism, training and development to name a few. It took a lot of effort to write this post and I would be grateful if you could share this post via Facebook and Twitter. Feel free to add your thoughts in the comments section. Thank you.
This is a human resource assessment based on Contemporary HRM and The Olympic Delivery Authority which is in charge of putting in place the necessary infrastructure for the London Olympic 2012. The assessment is based on four learning outcomes namely: investigate the traditional view of personnel management and the new approach of human resource management; evaluate the procedures and practices used for recruiting and selecting suitable employees; establish the effectiveness of principles and procedures for monitoring and rewarding the employee, and; explore rights and procedures on exit from an organization. A clear difference is put between the traditional personnel management and the contemporary human resource management. This assessment entails assuming the role of ODA Human Resource Director and responding to tasks common to this undertaking. It is clear that line managers are very instrumental in attaining human resource objectives and overall organizational objectives. Some of the motivations such as salary increments, bonuses, recognition among others play a crucial role in employee performance. The method of financial and non-financial rewards is based on the Motivation- Hygiene Theory by Herzberg which is utilized in ODA. Factors which determine employee performance in ODA include educations, skills and experience and professional qualifications. The strategy for monitoring organizational performance is designed as well as ODA’ exit strategy is stated. Overall human resource management as exemplified in ODA is very instrumental to organizational success.
Personnel Management and Contemporary HRM
As the HR Director of ODA you are to explain to the public the differences between traditional view of personnel management and contemporary human resource management. Examine critically the evolution and changing context in which HRM have operated in the past and now.
Some authors argue that there is a disparity between the contemporary human resource management and the traditional personnel management (Golding, 2010, p. 64; Paauwe, 2009, p. 115). They argue that these two fields can be used interchangeably and have no disparities in meaning and implication. Among those who ascribe to the notion that there is a difference between the two fields, their assumptions and theories are rather philosophical. The subject of personnel management has to do with the more administrative issues such as payroll in line with employment law and dealing with the associated tasks. On the other hand, human resource management encompasses the management of the workforce as one of the core resources which is instrumental a firm’s achievement.
When the disparity between the fields is acknowledged, HRM is regarded as being much wider in scope compared to personnel management because it entails and enhances personnel management functions while striving to form and nurture employees for the success of the organization. The major aim of HRM is to empower employees to attain their maximum efficiency levels (Golding, 2010, p. 87).
It is also worthwhile noting that personnel management can encompass administrative functions which are both routine and traditional. It is best referred to as being reactive and creating an enabling ground for the handling of concerns and demands presented in the workplace. On the other hand, human resource management entails the continuous strategies to administer and nurture a firm’s personnel department. In essence, with HRM, all the organization managers are engaged in one way or another and the main aim is to have the persons in charge of different departments nurture the necessary skills to deal the personnel related duties.
When it comes to motivations, personnel management is aimed at encouraging employees through rewards, salaries and bonuses. From the traditional point of view of personnel management, the contentment of employees is the ideal motive to enhance work performance (Golding, 20, p. 99).
There has been an evolution and changing context of Contemporary HRM from the past and now. Contemporary HRM models seem to indicate that the role of human resources have been shifting as firms strive to their human resource function to be more tactical and leaner. Authors such as Truss et al (2002, p. 41); Katz and Kahn, (1978, p. 163); and Struss et al, (1963, p. 25), argue that humans resources are playing a “strategic” tactical role based on the idea that the employees with the human resource departments are in a position to put into effect some judgment over the tasks and can deliberately alter or influence that role. Katz and Kahn (1978, p. 171) role-set theory, the duties performed by employees are socially developed through the attitudes and thinking of the role-set members. These have in essence shaped organizations behaviour and the general functions of human resource departments.
As a human resource expert, explain to the current staff of ODA your roles and activities as the HR director.
As an HR director in ODA, my roles and activities will encompass the following
This is one of my most fundamental roles in ODA. This is because, this duty ensures that the organization chooses the most capable and skillful persons from a pool of applicants. This role entails the assessment of the capability and competency of applicants with regard to the needs of ODA. By effectively performing this function, ODA will realize increased value and attain its organizational aims and objectives (Golding, 2010, p. 33).
Enhancement of Employee Compensation Packages
Motivating employees is one of my core functions in ODA. This can be attained through rewards, bonuses particularly to the employees who are excelling in their line of duty. The department will be assessing the employees from time to time and those who are seen as having exceeded their expectations are rewarded accordingly. As an HR director, I motivate employees through awards, holiday offers, salary increases, equities just to mention a few.
ODA Organization Planning
I am delegated with the duty of ensuring that, to together with the Human Resource Department, I plan for ODA future actions which will engage people. And one crucial aspect for this planning is the ODA employees. It’s fundamental that I ensure that the employees are sufficient to enhance ODA’s value. My role also entails planning for ODA future aims and objectives with regard to staff and making clear these goals to all employees and this important because it makes all persons to work towards a common goal in one direction (Golding, 2010, p. 28).
Evaluate the role and responsibilities that line managers played to manage people at work as strategic partners to HR Director.
Through the devolution of role and responsibilities to the line managers, they were accorded the chance to participate in daily employee management while I concentrated on the attainment and better alignment of ODA processes and systems with organizational goals. Dave Ulrich (1997; 2005) came up with new functions for the line managers when he described them as “business partners” and “shared services”. Line managers were delegated with roles and held responsible for the distribution and budgeting of resources and other employee administration issues in essence playing a more essential function in human resource management. They are very handy in employee development since they are working side-by-side with the employees and therefore their responses are more appropriate and timely (Whittaker and Marchington, 2003, p. 251).
There is increasing need to delegate more duties to the management of line managers such as the development of training tasks, budgeting and the dissemination of mentoring functions. In ODA, I found out that the line managers are crucial drivers of strategic change when accorded the duty of effecting human resources strategies in their line of operation. Line manager were more than glad in being delegated with human resource responsibilities because according to them, it add difference and braves them to work. The engagements of line managers enhanced my transformation as the HR Director in terms of approach towards human resources, relations and change. Increased use of line managers brought about enhanced workplace conditions because they have a better understanding of the range and involvements required.
Recruitment and Selection of Suitable Employees
Explain in analytical terms to the members of staff, human resource planning process for ODA in connection with London 2012 Olympics, the information needed and the various steps involved in the planning process for the actualization of its tasks.
In a nutshell, the human resource planning process for ODA entails identifying the position the organization has to fill what is referred to as personnel planning. We have to develop a structured process, forecast the personnel needs, do ratio and trend analysis and forecast human resource demand.
Design of the HR Management System for ODA
The main and fundamental issue involved in the human resource planning as far as ODA is concerned is to ensure that there is an appropriate system in place to manage the London 2012 Olympics. The design of the human resource management systems is to assist handle the human resources and align them to ODA’ goals. This system will manage the human resource procedures, guidelines, and strategies, tracking the changing human resource inclinations such as implementing more supple practices, outsourcing and technology changes.
Review ODA’s financial, operational and strategic plans to establish their effect on HR planning
This will entail periodic reviews of ODA’s strategic plans and should be in line with its vision, values and culture. The HR managers are to determine the both the long-term and short term requirements within the context of the tactical plan and direction established by ODA. As it plans, the HR planning should put into consideration the total ODA budget assigned for HR spending.
Determine the types and number of vacancies needed in every functional area in the course of ODA’s plan
Analysis of entity jobs should consists of analyzing job, abilities, responsibilities, equipment needed, knowledge and duties. These will include among other things, collecting information on the dynamics in the operating settings which might result in the reduction in HR budgets and programs. On the other hand, supply analysis need to investigate, current recruitment, adjustments, and attrition.
Identify the precise needs for each vacancy in the vacancy description
The job descriptions need to be carried out after the job analyses have been done. The descriptions should detail the responsibilities and duties and also the skills and knowledge required to perform the specific functions.
ODA’s Environmental Analysis
It is the second step and will entail the comprehension of HR planning process within the perspective of HR management. There is need as the HR director, to understand both the external and internal ODA environments with the information on the external environment encompassing among other things such as industry, technology, economy, and the labour regulations in UK, availability of employees and distribution of labour. Some of the internal data which is necessary with regard to ODA will encompass the prevailing status of ODA’s human resources, long and short-term strategies and plans for ODA.
Projecting HR Demand
The objective here is to establish the type and number of employees required in ODA’s future. Of course forecasting will entail the present and past events and also encompass future ODA’s objectives. As the HR Director for ODA, I use bottom up forecasting to anticipate future HR needs by collecting the various human resource needs from ODA’s units.
Planning and Reconciliation
This entails the building up of action plans that are informed by the collected data, investigations and available options. The main point here is that the process should be acknowledged by ODA’s top management and staff. The plans should be the main concern of the HR department and the main players and detractors identified. These plans may encompass management and training development plan, appraisal plan and HR supply plan.
Discuss how the HR planning process of ODA would affect the structured process of the organisation compared to that of LOCOG.
An effective human resource planning process will have major ramifications for ODA and LOCOG in general. This is because; it will influence the whole organization through the preparation of employees to attain the overall objectives not only for ODA but also for LOCOG in general. Without proper HR planning process, ODA and LOCOG will be ill prepared to handle the Olympics in 2012 making it a critical component of the whole process.
Evaluate interview as a technique of selecting staff into the organisation and discuss the other possible alternative selection methods available for ODA.
An interview is an avenue which is aimed at collecting the information from the prospective employee through oral responses. It can also be utilized to make useful predictions about the future selection of employees in an organization based on the oral and written responses. It is most accepted employee selection approach being utilized in many organizations to this day making it a valuable tool for management. As the ODA HR Director, I will utilize the interview to assess the required personnel to deliver London Olympics come 2012. It involves the following processes.
This entails writing down the job description details alongside the associated duties and responsibilities, required abilities, knowledge and other pertinent qualifications.
This will encompass recognizing the vacancy main duties and to attain this it is important to grade every job based on its significance to the achievement of the organization and the duration required to perform these duties.
The third step will involve the creation of interview questions with regard to the definite duties in a manner that the most crucial duties will attract more questions.
It is necessary that good descriptive answers be developed besides a 5-point-scale with appropriate answers based on the ratings.
At this stage, an interview panel is put in place and the interviews carried out. Structured situational interviews are preferred to sequential ones.
Besides carrying out the structured interviews, ODA has the choice of adopting the college recruiting approach or employing the services of On Demand Recruiting Services. With college recruitment, ODA HR department dispatches representatives to the universities to carry out applicant screening while with ODRS, ODA is able to benefit from the services of short terms applicant recruitment agencies to run its project.
Explain in clear terms to your staff how the selection that has been done so far and those you still intend to do could be considered as practices and procedures in the selection process ‘best practice’ in comparative terms to LOCOG. Using your understanding of the legal frameworks guiding recruitment and selection in the United Kingdom.
The selection and recruitment process so far espouses some of the best practices within the UK legal framework with special reference to LOCOG because; we applied anti-discrimination and equal opportunity legislation. Guided by this, we ensured that during the interview process we did not base employment on the personal characteristics of the prospective employees such as disability, country of origin, age, religion, sex, and marital status (Direct.gov.uk, 2010). Therefore, the reason for rejecting any would be employee was solely based on the ODA’s job description requirements. According to the UK law, after categorizing a selection of applicants, then ODA need to apply a selection approach to determine the final employees such as competence, skills, capability and experience. We adopted this subjective approach to the selection and recruitment and it was applied without favor to all the applicants, and this shall continue to the basis for selection and recruitment at ODA in future exercises
Principles and Procedures for Monitoring and Rewarding Employees
Explain ODA’s job evaluation process and then, lists and explain factors that determine employees’ pay.
Job evaluation is the systematic evaluation of jobs to establish the value of one job as measured against another. ODA’s job evaluation process has five steps as stated below:
At this stage, a job description is done, and if the position is currently held by ODA’s employees, then she will also have to review it and append his/her sign as well.
The HR manager reviews the job description and if he/she agrees, then the duties and requirements are approved and append his/her signature. Otherwise, it is returned to the line manager for changes.
This is the review stage whereby the HR reviews the job description in consultation with the line manager before presentation to the Job Evaluation Committee as stated in the succeeding step. The HR is to make sure that there is balance and uniformity in the descriptions by the doing changes for format and clearness. And if any changes are done, then it returned to the line manager for signature.
The Job Evaluation Committee is appointed by the ODA Human Resource Director and has representation of from all the ODA organization. This committee ensures that there is fairness in all jobs by utilizing the consistent and determined approach for evaluation and review.
ODA Human Resource Director reviews and confirms the titles and job evaluations as per the counsel and suggestions of the committee. There is also an appeals system in place should any employee of ODA feel that due process was not followed or rather some information was not considered.
Factors which determine employee pay include:
Education, Skills and Experience
Employees earning will commensurate with their level of education, skills and experience
ODA’s pay is determined by a number of items based on each employee’s per unit time such as per day or working hours. By this approach, an employee per hour or per day rate is determined for every unit of production.
This is based on the employee individual performance especially after evaluation has been conducted and is not the same as bonus.
Employees who possess exceptional professional qualifications are able to apply their knowledge in attaining ODA’s objectives and therefore, these professions attract special incentive pays from ODA.
Classify the varieties of reward systems as discussed in class and critically explain their impact on employees’ performance at ODA.
Individual Employment Rewards
This encompasses the incentives for the professional employees, merit pay incentives and piecework plans.
Pieceworkplan encourages ODA employees to work extra hours and enhance the attainment of organization’s objectives. That implies that the more an employee increases their man hours and production per unit time, the more their pay
Professional employees’ incentives are aimed at encouraging the employees to undertake special courses which are related to their line of duty and this in essence attracts increased skilled manpower to ODA. By doing so, the employees are rewarded generously with an incentive pay.
Recognition Based Awards
These are a form of non-financial rewards and will often include things such as approval, “thank you” messages and praise for a job well done.
Group Incentive Plans
This plan encourages team work among the ODA employees because by working together, they are able to achieve and surpass the set target and are compensated for these efforts accordingly.
ODA Organization Plan
This is an organization wide approach by ODA and may encompass sharing the proceeds after attaining the organizational objectives.
Incentives for Executives and Managers
These include the short term incentives such as stocks ownership plans, annual bonus besides other long term incentives. With the adoption of relevant motivational theory, explain how the HRs can be affected as a result of linking the theory and reward system in the organisation.
The most appropriate motivation theory for ODA is Motivation- Hygiene Theory by Herzberg. The Motivation-Hygiene Theory was advanced by Fredrick Herzberg, an American Psychologist. This theory is also referred to as Two-factor theory. Maslow’s thoughts influenced Herzberg definition of the working environment through the study of working motivation. His aim of research was to determine the work conditions and situations which were experienced negatively and positively by the workers; the drivers of work satisfaction (Ryan & Deci, 2007, p. 58). His study revealed that the employees were influenced by twin factors: “the motivator” and “hygiene factors”.
When the motivator factor is fulfilled it leads to satisfaction and the hygiene factors lead to dissatisfaction if they are not met (Cooper, 1999, p. 390). According to Herzberg, financial rewards such as money are a hygiene factor that will create dissatisfaction when it is not received in the appropriate quantities, though it is not encapsulated as the only positive motivator and satisfier (Rotenstan, 2007, p. 412). According to him, salary gives a favorable but short term feeling but the motivators causes lasting satisfaction (Armstrong, 2003; Wiley, 2003, p. 48). And by ODA adopting various financial reward mechanisms such as incentive plans, it has really motivated. The motivators which bring about satisfaction are factors include recognition, success, and sense of contribution, being challenged, independence, trust, responsibility, independence, and career development from ODA. The hygiene factors are necessary to ensure that the employee does not become dissatisfied (Findlay, Dawson & Sparks, 2006, p. 65). Workers are not engaged in their duties to cause higher motivation but a lack of it may generate dissatisfaction. The typical hygiene factors include: salary, company policies, status, working conditions and administration (Armstrong, 2003, p. 73).
As the HR Director, discuss the diverse ways by which the event organisers of London Olympic 2012 will device strategy at monitoring performance.
Typically Olympic events are onetime events and therefore, they hire short term staff in areas such technology, accounting and performance of the Olympics. It becomes more difficult to monitor the performance of staff when it is big and ensure accountable in such a scenario. However, with the assistance of internal auditors, even organizers are able to deal with non-compliance and material errors. It is therefore necessary that the event organizer higher auditors with diverse expertise in various auditing facets and there is need to invest in quality control processes and performance planning.
Exit from the Organisation
Discuss in clear terms what the exit procedures at the London 2012 are and compare it with what entails in another organisation. Based on your findings, can these procedures be seen or adjudged as best practices?
ODA has outlined an exit strategy which has been remitted to DCMS stating how the parks and the venues will be relinquished to OPLC. OPLC is communicating with the ODA over the exit strategy after which could see the title given to LDA after the Olympics. With regard to this, ODA has already put final touches to the post-game exit strategy alongside the responsibilities and the budget for the same with OPLC (ODA, 2009).
Under this exit strategy, ODA is also supposed to provide maintenance for the landscape till the official handover in 2014. The tunnel assets are also to be relinquished to the power companies who are charged with the future upkeep and running of the assets. ODA is also required to remove the temporal footbridges and highway bridges, elimination of transitory perimeter wall field (ODA, 2009).
Lastly, you are to consider the selection criteria the organisation would adopt in declaring an employee redundant and explain it to your audience.
According to Direct.gov.uk (2010), ODA has put in place an employee redundancy policy whereby the employees prior to the exit, will be given a one month notice ahead of their expected end of employment. The statutory redundancy policy for ODA will encompass:
Not less than a week’s notice for employees who are expected to serve from one month to two years
A notice of one week for every single year for ODA employees working for two to twelve years.
This human resource assessment investigated four main learning outcomes of: investigates the traditional view of personnel management and the new approach of human resource management; evaluating the procedures and practices used for recruiting and selecting suitable employees; establishing the effectiveness of principles and procedures for monitoring and rewarding the employee, and; explored rights and procedures on exit from an organization. It began by explaining the difference between personnel management and human resource management. It was found that there is indeed difference between the two fields in that personnel management deals with the administrative functions while human resource management is concerned with the formation of ongoing strategies to administer organizational personnel. Some of the roles of HR Director include employee recruitment, enhancement of employee compensation packages, and organizational planning.
The roles played by line managers are indisputable. HR directors and managers delegate duties and responsibilities to the line managers who are regarded as “business partners”. Line managers are given duties and held responsible for the distribution and budgeting of resources and other administrative issues. The process of recruitment and selection of suitable employees entails the design of HR management system for ODA, review of ODA’s financial operational and strategic plans, determining the types and types of vacancies needed in every functional area and identification of precise needs for each vacancy.
The interview is most preferred mode of selecting ODA staff. But besides carrying out the structured interviews, ODA has the choice of using ODRS services and college recruitment approaches. The selection and recruitment of employees is line with UK employment and LOCOG law. Among the factors which determine employee include piecework education, skills and experience besides the professional experience they hold.
Armstrong, M. (2003) Managing Reward Systems and Contemporary HRM, New York: New York University
Direct.gov.uk, (2010) Employment terms and conditions and terms. Contemporary HRM Direct.
Findlay, A. Dawson, J. & Sparks, L. (2006). Employment in the American Superstores: Findings from the project and Contemporary HRM. Working Paper 8705, Institute of Retail Studies, Starling
Golding, N., (2010) “Strategic Human Resource Management Contemporary HRM” in Beardwell, J. and
Claydon, T. (2010) Human Resource Management A Contemporary HRM Approach, FT Prentice Hall
Katz, D. and Kahn, R. L. (1978), The Social Psychology of Organizations and Contemporary HRM, 2nd edition, New York: Wiley
ODA ( 2009) Contemporary HRM Programme Delivery Baseline Report
Paauwe, J. (2009), ‘HRM and Performance: Achievement, Methodological Issues and Prospects’ Journal of Management Studies, 46 (1):
Rotenstan, H. (2007) Contemporary HRM – Prediction of the job satisfaction from the characteristics of personal work goals. Journal of Organizational Behaviour, I 9 (4), 409-430
Ryan & Deci (2007) Self Determination and Intrinsic motivation in Human behaviour – Contemporary HRM. New York: Plenum
Strauss, A., Schatzman, L., Ehrlich, D., Bucher, R. and Sabshin, M. (1963) ‘The hospital and its negotiated order’. In Friedson, E. (Ed.) The Hospital in Modern Society, New York: Macmillan
Truss, C., Gratton, L., Hope-Hailey, V., Stiles, P. and Zaleska, J. (2002), ‘Paying the piper: choice and constraint in changing HR functional roles Contemporary HRM, Human Resource Management Journal, 12 (2): 39-63.
Ulrich, D. (2005) The HR Value Proposition, Boston: Harvard Business School.
Whittaker, S. & Marchington, M. (2003) “Devolving HR Responsibility to the Line: Threat, Opportunity or Partnership?”, Employee Relations Contemporary HRM, Vol. 25, No. 3, p. 245-261.
Wiley, C. (2003) Non-financial rewards and employee motivation Contemporary HRM. University of Tennessee: Chattanooga
Do you have any interesting facts about Contemporary HRM and how it is deployed at your organisation? We are interested to know, feel free to comment below. Thank you.
Owing to the globalization, many companies have begun setting up their business boundaries beyond a single place. They are going from their primary market to other countries in order to have access to the much larger international market (Heidenreich, 2012). In management terms, the foreign countries where these businesses attempt to set up are the host countries while the country where the corporation has its head office is the home country. Multinational companies are a function of sovereign companies, each focusing on its domestic markets. But the independence of the subsidiary is not always true since a lot of times the subsidiary also has to borrow the policies of the parent company. While multi-nationalization is an organization wide phenomenon, dealing with the employees, from recruiting to managing is the job of the human resource department. It is assumed that Human resource management is a soft skill; however effective practice within the organization demands a much strategic focus in order to confirm that the organizational goals can be achieved via human resource. Today, when the terms ‘strategy’ and ‘human resource’ are combined, it means that the human resources becomes responsible for adopting the steps and practices to achieve the longer term organizational goals and objectives (Jiang, 2012).
There are not only the huge advantages that the multinational are benefitted from the host and the home country but also, there exist several critical strategic issues that these companies have to face. However, there are a lot of advantages the host country gets from multinationals in the form of investment opportunities, income for unemployed resulting in a much better standard of living. Speaking of multi-nationals, the main idea behind these multinational organizations is that they organize as per the local responsiveness in order to be efficient worldwide (Shah, 2012). This local responsiveness does not always hold true; some firms borrow the policies of the parent company assuming it to be better for the overall corporate results.
Misalignment of subsidiary from overall corporate strategy
Moving from one country to another creates the problem of misalignment between various departments and the overall corporate strategy. Usually the problem occurs when the human resource department is not aligned with the parent company’s mission and vision as it begins operations in another country to adapt as per local standards. The drift in one department of the organization causes the entire subsidiary to shake up as a result of unguided principles and policies.
Besides the merits of multinationals, one major strategic issue that the Human resource manager faces is based on the fact that when companies go global they tend to have a diverse workforce in their organization. And it is this organizational diversity that makes managing people across various religious, cultures, and standards, a major problem in implementing the goals of the organization as a team. Talking of diverse workforce culture, when a company moves from a country where unethical practices are considered to be the norm to a country that has stringent policies against any unethical practice, it is at that time when the problem for the management takes a start. For example, in countries such as Saudi Arabia, where bribery is thought to be the norm to run the business but such a practice is highly disregarded and looked down at in countries such as Brazil (Rose, 2012). Then managing employees from such a background becomes a problem for the manager in order to ensure that the disease of unethical does not spread in the organization.
Recruitment, selection and placement problems
Recruitment, selection and placement of the employees are the main functions of the human resource managers. However, this function is important and is viewed as the backbone of any business which guides the success or failure of the organization. Studies have also identified the three forms of approaches used to employ people beyond the local boundaries. Of the three approaches quite often multinational companies adopt the ethnocentric approach (CHOY, 2007). For instance had the company have a policy of employing people only from the parent company, the practice of ethnocentrism can pose a difficult situation for HR managers challenging them to train such nationals as per the local standards, policies and demands of the consumers such as American employees going to Saudi Arabia. Given the limited independence to select and recruit the people as HR wills, this diverse workforce tends to pose a problem of controlling of human power, their communication and remuneration.
The differences of employment practices
Another problem that the human resource faces is with respect to the employment practices. Under this are the problems of age, racial, sex and cast discrimination arises of which gender discrimination is very common (Wu, 2008).Given the differing laws and rules in each country it is important for the human resource to go by those laws to sustain and succeed beyond borders. For instance, countries such as India are really high in gender discrimination by restricting management and engineering position to men and softer skills jobs to women. Research by Pudelko (2007) clearly shows that when the a MNC moves from a country that does not offer equal employment opportunities such as India to a country that gives equal employment opportunity such as Thailand, the manager explicitly tends to discriminate the jobs based on gender in the latter case as followed previously in the other country. This happens because the HR manager is accustomed to policies adopted and practiced in the parent company and would be likely to follow the same policies at the subsidiary.
Basic salary and other forms of compensation
Human resource has the major function of motivating its employees to keep them committed to the organizational goal and mission. This motivational strategy largely comes from the compensation that the human resource manager engages in. Other than the selection problems, what is of particular challenge for the HR employer and the employee working in the organization is how to compensate employees in the multi-national context. The concern is how to appropriately measure and manage the compensation of the human power within the organization relative to employee contribution and performance in the MNC. And this is the basic function and duty of the HR managers towards their employees to regularly appraise the performance of its workers and keep giving proper constructive feedback (Sepura, 2009). For instance, if a company is based in the US, it tends to evaluate its employees based on performance only while that is not the case in Japan. Japanese firms value seniority and experience and would evaluate performance based on the employees experience in the industry and his position in the hierarchy (Harzing, 2006; Kono & Clegg, 2001).
Having offices in both developed and developing countries there tends to be a huge gap in the salary payout. For instance, workers working in US might earn 5 times more than their counterparts working in any underdeveloped nation, example India or Pakistan with the same skill set. Here comes the challenge for human resource to make sure that wherever it operates must do so in acceptable and fair boundaries. Nike a well-known company outsourced its manufacturing to Pakistan where under aged children worked for extensive long hours at a very low pay out of around 60 cents (Buckley, 2000). Quite similar is the case of MNCs that operate in low cost countries. In this case, the human resources management may face the ethical issue of whether to narrow the gap in compensation.
When it comes to paying basic salary, it is observed that a lot of MNCs that are fair in their practices want to and try to pay its workers a fair wage that is in line with the wage of their parent company. They also do so to retain and attract the best employees and avoid extensive training costs, but then again such practices are seen as disruptive for the local companies and the economy as a whole. The problem comes in when the local companies are not able to pay as much and this lead to disruption of the entire wage structure (Timo, 2005). As a result of this, the healthy competition falls out and they themselves fail to compete and work towards the economic growth. However, as a result of this factor the human resource is unable to decide again what compensation can work best for the employees. And how can this compensation make the organization seem as a non-disrupting entity which exists for the good of the economy (Marin, 2010).
Industrial relation factors
Freedom, voicing the opinion and autonomy are some concrete terms that are quite popularly used and practiced in countries such as Germany, UK and USA. Industrial relation factors pertaining to workers, employer and unions may vary from country to country. For instance, in much developed and open economies such as Germany, co-determination is the rule. This means that a lot of firms in Germany have their employees speak up and voice their opinion in corporate strategy and company operations such as wage and hour setting but that might not be appreciated elsewhere. For instance in countries like Japan where there is high power distance and a lot of centralization, employee contribution in these areas might not be the norm (McCrae, 2004). Here comes an issue that must be worked over by the human resource manager and this tends to greatly impact the HRM practices. If a multinational company appoints a local from Japan as the head of HR and have some workers from the parent company shifted to the subsidiary, this can create conflicts between the employer and employee. Because the head might not be familiar with the idea of employees collaborating and working together on issues of pay or perhaps other HR related issues, he might consider the employee to be interfering in matters he is not responsible which creates an uncomfortable working environment within the firm.
Attempting a balance between global and local amalgamation
One key challenge facing the MNC Human resource is how to attempt a balance between the global amalgamation and the local adaptation. The dilemma for the human resource is the fact whether it should go by the policies and practices of the home country because it views those practices to be much fair or should it adopt local policies which can be exploitative. When the human resource decides to adopt a fair culture for its employees based on ‘not-so-local’ practices they are accused of exporting the practices of another country and trying to impose it on locals ignoring their traditional and cultural values (Chen, 2008). However, when the human resource decides to go by the standards of the country where they are operating, a problem originates of ‘trying to exploit’ the employees that work under it and not being there for the better living standards of the host country citizens just because the policies of that country are generally exploitative in nature. This puts the practices and workings of the human resource manager at question as to which root to take. All in all, the country of origin for these MNCs is seen to be the major influence in shaping what balance to take (Almond, 2011). Quite a lot of research has been conducted on this issue and it was eventually comprehended that the way MNCs manage their foreign subsidiaries tends to be out of the result of the national origin (Harzing, 2003).Elaborating on the view, Harzing (2003) concluded that although MNCs are quite internationalized, their major controlling practices are determined by their country of origin.
Transferring the policies from the parent company is also much more problematic for the service oriented industries than the manufacturing firms. Because service provision requires the firm to deal with employees and the expectations of the customers who have differing cultural values, the burden of localization falls on the human resource to meet the local customer demands (Gamble, 2003).
The major cultural differences between various countries demand human resource department to act in accordance with the culture of the country’s foreign subsidiary. Lingual skills form another sort of barrier to most organizational growth. When a company is moving to another country they must make sure they are well aware of that company’s priority and value system in order to enhance the intercultural communication in cross-cultural management (Gullestrup, 2002). A lot of times, employees from the local context tend to prefer to be spoken in their own language because they tend to feel ethnocentric of their culture. For example, in Saudi Arabia, the locals do business in their own language and prefer to be spoken in Arabic only. A company moving to another country must also educate its employees of various languages to settle in well with the local populace. The difficulty for the human resource manager is when they have no knowledge of the culture of another country and do not have the required training to deal with the ethical dilemmas (WriteWork, 2004)
When there is a drift between the values of the parent company and the subsidiary that’s where human resource department has to come in and get to a congruent solution. Culture clashes are the most prominent problem in these businesses. When the company decides to shift, it must have an adaptive approach to its subsidiary, where there is high independence between the parent and the subsidiary and the corporation is much consistent with the local environment (Grewal R, 2008). However, given the senior management, usually it’s the other way round. Subsidiary is expected to borrow a lot of rules from the parents creating cultural differences to take over the legitimacy. Generally, US MNCs have an organizational structure that is often more centralized and formalized; in contrast, Japanese MNCs have strong but informal centralized co-ordination with a network of Japanese expatriate managers, yet are likely to adapt HRM practices to local conditions due to the perceived periphery status of subsidiaries. Now given the different cultures in each country it becomes difficult for the human resource to organize people from one country to the other with the cultural air being so different (Caprar, 2011).
Local labor laws
When a company begins its operations beyond its borders, it is important for them to recognize that the local employment relationship is governed by local labor laws. There are certain countries that favor the employees while there are others that favor the employer. Contrasting the labor laws in America and Europe, there is considerable difference in each area. Taking an example of US, they usually have really brief offer letters stating the pay, compensation, bonus or stock options and at the same time it also includes a statement favoring the employer that sates that the employees might be terminated at any time by the company without giving reasons. This concept of employment is a form of employment contract that is not recognized in any other country because it is seen as harsh and as a result it does not have a legal standing in the court. However, companies that have operated in Japan, Brazil or China would not be appreciative of such HR practices had the parent company been in US had the employer adopted the same policies.
Communication forms the backbone of any organization. It is only effective when taught rightly by the superior management in the company. Had the communication not been so strong and transparent, it can lead to major ethical problems for the organization as a whole and the HR particularly who is primarily concerned with the effective training of its people. It is the duty of the human resource manager to prepare its employees communication via training. It must be noted that broken communication can lead to corruption problems (Lager, 2010). Corruption might not be that big issues in the developed economies but developing economies do pose a question mark. In a survey in 2012 by Ernst and Young, around 39% people said that corruption occurred quite often in the developing countries (Newswire, 2012). Countries such as Pakistan and Brazil are rated quite high on the corruption continuum. A problem that occurs for the human resource is to prepare its employees shifting, or moving to these countries on how to deal and communicate with the people in such countries.
Four level training to avoid merger failure
It is important to make sure that a harmonious organizational culture is maintained and there is no merger failure of subsidiary and the culture (Weber, 2004). It is extremely important for the managers to train and orient their employees before shifting them to the international operation. Yet a lot of countries even today do not have structured or systematic overseas oriented training practices in order to acquaint them to the foreign country economics and practices. A lot of organizations are realizing the worth of international businesses and have been trying to incorporate the special training in their operations for their employees. This sort of training has four basic levels. The first level deals with cultural awareness. This initiative must be undertaken to acquaint the employees of the cultural differences and it impacts the business outcomes. The second level knowledge must deal with attitude formation as to how the attitude can lead to a particular type of behavior towards other. For instance, managers who form stereotypes tend to view their foreign based employees with a critical eye and unconsciously have a favorable or unfavorable behavior towards them. Level three is the factual knowledge of the country the subsidiary is going to be developed in. And lastly the problem comes of building up skills and adapting to those skills such as language adjustment (Weber, 2004).
However, in order to overcome the problem of strategic differences within the MNC, firms must look into the generic strategic international orientations when crossing the local borders to step in the international market. MNCs and the human power can help and create a hybrid of the strategic orientations in order to make sure that the practices of the host country are molded blue print of the home country corporation so that it meets the local demands of the customers, enable employees to adapt to the local standards to counter the overseas problems and ensure an alignment between the subsidiary and the parent entity.
Harzing, A.S., 2003. The relative impact of country of origin and universal contingencies in internationalization strategies and corporate control in multinational enterprises: Worldwide and European perspectives. Organization Studies, 24(2), p. 187.
Almond, P., 2011. Re-visiting ‘country of origin’ effects on HRM in multinational corporations. Human Resource Management Journal, 21(3), pp. 258-71.
Anabel Marin, S.S., 2010. Heterogeneous MNC subsidiaries and technological spillovers: Explaining positive and negative effects in India. Research Policy, 39(9), pp. 1227-41.
Buckley, S., 2000. The Littlest Laborers: Why Does Child Labor Continue To Thrive In The Developing World?
Caprar, D.V., 2011. Foreign locals: A cautionary tale on the culture of MNC local employees. Journal of International Business Studies , 42, pp. 608–28.
CHOY, W.K.W., 2007. Globalization and Workforce Diversity: HRM Implications for Multinational Corporations in Singapore. Singapore Management Review, 29(2), pp. 1-19.
Wu, C., 2008. Overt employment discrimination in MNC affiliates: home-country cultural and institutional effects. Journal of International Business Studies, 39(5), pp. 772-94.
Shah, F. A., 2012. A Critical Review of Multinational Companies, Their Structures and Strategies and Their Link with International Human Resource Management. IOSR Journal of Business and Management, 3(5), pp. 28-37.
Gamble, J., 2003. Transferring human resource practices from the United Kingdom to China: the limits and potential for convergence. International Journal of Human Resource Management, 14(3), pp. 369-38.
Gullestrup, H., 2002. The Complexity of Intercultural Communication In Cross-Cultural Management. Intercultural Communication and Changing National Identities, (6), pp.1-19.
Grewal R, C.M.D.F., 2008. Navigating Local Environments with Global Strategies: A Contingency Model of Multinational Subsidiary Performance. Marketing Science, 27(5), pp.886-902.
Harzing, A.W.K., 2006. Response styles in cross-national mail survey research: A 26-country study, International Journal of Cross-Cultural Management, 6, 243-266
Heidenreich, M., 2012. The social embedded of multinational companies: a literature review. Socio-Economic Review, pp. 549–79.
Jiang, K., 2012. How Does Human Resource Management Influence Organizational Outcomes? A Meta-Analytic Investigation Of Mediating Mechanisms .Academy of Management Journal, 55(6), pp. 1264-94.
Kono, T. & Clegg, S., 2001. Trends in Japanese management. Continuing strengths, current problems and changing priorities, Houndmills, New York: Palgrave.
Markus Pudelko, A.-W.H., 2007. HRM practices in subsidiaries of US, Japanese and German MNCs: Country-of-origin, localization or dominance effect? International Business review, pp. 1-40.
McCrae, R.R., 2004. Personality and Culture Revisited: Linking Traits and Dimensions of Culture. Journal of cross cultural psychology, 38(1), pp. 52-88.
Newswire, C., 2012. Only 52% of Canadian companies protect themselves against corruption risks when buying into business globally: Ernst & Young. Regional Business News.
Timo, N., 2005. A survey of employee relations practices and demographics of MNC chain and domestic luxury hotels in Australia. Employee Relations, 27(2), pp. 175-92.
Weber, R. A., 2004. Cultural Conﬂict and Merger Failure: An Experimental Approach. Management Science, 49(4), pp. 400-15.
Chen, R., 2008. The Cost of Doing Business Abroad in Emerging Markets and the Role of MNC Parent Companies. Multinational Business Review, 16(3), pp. 23-39.
Rose, C., 2012. The Corner House Case and the Incomplete Incorporation of the OECD Anti-Bribery Convention in the United Kingdom. Tulane Journal of International & Comparative Law, 20(2), pp. 351-83.
Sepura, 2009. Code of Business Conduct and Ethics. Sepura, pp. 1-6.
WriteWork contributors, 2004. Ethical difficulties faced by multinational companies in today’s business world.
This dissertation is focused on evaluating how workforce diversity within the workplace can be effectively managed in order to achieve desired level of performance. Managing diversity can be defined as formulating and implementing the systems that can be helpful in managing the people in a way that potential advantages of diversity are maximized and potential disadvantages are minimized. Workplaces nowadays are becoming increasingly diverse with employees from different cultures, genders, races and ethnic backgrounds are working together in order to achieve the common goals and objectives. This increases the importance of formulating and implementing effective strategies in order to manage workforce diversity at the workplace. Existing research highlights the importance of managing diverse workforce has been significantly increased because due to the increasing trend of globalization, the organizations are establishing their business operations in different countries of the world which requires them to recruit the employees who belong to different cultures and backgrounds, encouraging diversity is helpful for the businesses to grow and achieve the strategic competitive advantage. Academics believes a diversified workforce is helpful in strengthening the organization which results in increased growth and improved business profitability. It is a fact that when recruiting employees from different backgrounds it provides an opportunity to the firm to understand the perspective of different types of customers. The workforce quality can also be improved with the help of an effective diversity policy because it enables the organization to reach a larger pool of candidates who have desired skills and capabilities which are essential to fulfill the business needs.
To identify the role of managing workforce diversity in achieving high level of business performance
To discuss the role of effective human resource management practices in managing diversity at the workplace
To evaluate that how the diversity related issues can affect the motivation and satisfaction level of the employees at the workplace
To identify that how the management of workforce diversity can be helpful in improving the coordination among the employees at the workplace?
I do hope you enjoyed reading this post on managing employee diversity in the workplace. There are many other titles available in the HRM dissertation collection that should be of interest to human resource management students and CIPD professionals. There are many dissertation titles that relate to other aspects of HRM such as employee engagement, HRM Theory, absenteeism, training and development to name a few. It took a lot of effort to write this post and I would be grateful if you could share this post via Facebook and Twitter. Feel free to add your thoughts in the comments section. Thank you.