Introduction
The human resource management is responsible for managing the human resources of an organization. The HRM aims at improving the performance of an organization through effective management of human resource. It is involved in job description in an organization, planning and recruitment of employees.
According to Risher (2003), strategic human resource management involves merging the corporate strategy and the HRM strategy. The policies of HRM should be well defined for intended outcome to be realized.
Human Resource Management
Employees are the most valued asset of an organization. According to Greer (2001), human resource management is “a strategic and coherent approach to the management of the most valued asset of an organization.” Not all the management staffs of an organization are concerned with the firm.
The HRM is concerned with managing the workforce in the organization. The strategy involves policies laid down by the organization with a philosophical and ideological underpinning. HRM is mainly made of four component that include beliefs, information on people management, involvement of line managers and shaping of the employment relationships through set levers.
A HRM system comprises of HR philosophies, strategies, policies, processes, practices and programmes. According to Becker and Gerhart (1996), the components can be categorized into three groups that are the HR system architecture, policies and processes (practices).
According to Bartlett & Ghosal (2002), HRM emphasizes that firm workers are important in achieving the mandate of the organization through sustainable competitive advantage. There is need for integration of HRM strategy with the corporate strategy of the organization.
HRM helps the organization attain the necessary integration. Managing employees is not different from managing other resources of the organization. However, the differences arise in the nature of the resources being managed, i.e. people.
Since the behaviour and the performance of the human resource depends on factors such as motivation, ability, perception of roles and situational contingencies, HRM is concerned with ensuring the resources are productive by providing necessary support (Zheng, Yand & McLean, 2009).
The human resource of an organization is involved in various activities such as staffing of employees and enhancing their training. This involves recruitment of new company employees by selecting knowledgeable and skilled individuals with experience to fill up vacant positions in the firm.
The success of a recruitment exercise depends on planning, analysis of the job, recruitment and selection of the required staff (Risher, 2003). Other duties of the HRM is offering rewards to motivate employees, developing employees through education and training, maintain employees in the organization through proper administration and enhancing employee management relations.
Under employee relations, HRM is responsible for spearheading participation of employees in trade unions through negotiations. In spite of all these roles, Bartlett, Moran & Ghosal (2002) note that the activities that the human resource management is involved in vary from one organization to another. Moreover, HRM emphasizes on high employee commitment, workplace learning and enlightened leadership in an organization.
There are several HRM models. The Fombrun, Tichy and Devana model give emphasis to interrelatedness and coherence of GRM activities. In this model, HRM is made of four components that are employee selection, appraisal, development and their rewards. The four components aim at increasing the performance of an organization.
The Harvard HRM model has six components that include evaluation of situational factors, taking into account the interests of the stakeholder, HRM policies, and the outcomes of HR activities, long-term consequences and utilization of the feedback by the firm.
Similar to the Harvard HRM model, The Warwick model has five components that include the analysis of the organization’s environment internally and externally, business strategy and HRM content. All those internal or external factors that affect effectiveness of the human resources are usually considered under this model (Risher, 2003).
Globalization
Vandana Shiva (2005) seems to disagree with Thomas Friedman over the role of globalization in the international system. Vandana (2005) argues that the effects of globalization are so adverse to the people of the third world and other developing economies.
He observes that people of the third world have been presented a raw deal in the globalized economy. Globalization can be considered the buzzword for the 21st century. Globalization is a means or a process of reorienting and reconfiguring the world leading to the establishment of a new system of governance that is, a globalized world.
The one, which is, as Francis Fukuyama (1992) pointed out, characterized by the convergence of systems whether this will lead to the formation of a single global economy or just number of regional organizations with homogenized or converging objectives is a matter of debate.
Globalization has transformed the entire international system in very fundamental ways, not just the way Vandana (2005) thinks. Indeed, even the few entities, institutions and systems that have resisted the effects of globalization have been forced to transform the way they operate to withstand the effects of globalization.
Globalization has led to a massive transformation in which individuals, households and rural communities have become directly involved in global processes and an exposure to a more diversified economy. This has brought about a new relationship between power and the division of labor (Mittelman, 1997).
The transformations that have been imposed by globalization have not spared any entity in the international system, be they individual states, MNCs or any other non-state actors. Developed nations have been impacted by globalization as the developing nations.
Therefore, Vandana’s claim that developing nations are the only affected is null and void. In the rich nations for instance, globalization has led to generation of internal third world (Galbraith, 1992). While in the developing countries, centers of wealth have been created.
The effects of globalization however have not been uniform, just as Vandana argues. MNCs and other entities in the North have been affected differently from local firms and those in the South, an aspect that Vandan does not capture in his argument (Vandana, 2005).
Globalization involves forces that are beyond one country’s control and therefore reduces the power and scope of the state. It is associated with the declining regulatory role of the state (Sassen, 1997).
Held David et al capture the essence of globalization when they argue that it is the widening, deepening and speeding up of worldwide interconnectedness in all aspects of contemporary social life (Held, et al 1992). On the other hand, globalization has introduced a new way reasoning whereby the countries think globally and act locally.
The way think global and act locally work or regionally works is that while the functions related to technology, information, product brand development and finance are managed on global scale, functions related to manufacturing, sub-contracting and marketing are managed on regional or local basis to increase responsiveness (Dierks, 2001).
In a sense, the new technology innovativeness has led to a global-localization of production.
Under the think global act globally era, product design remained unchanged for decades. Calculators, television sets and other technologies looked the same and remained unchanged for decades globally. In the think global act local epoch, product models changed rapidly.
Indeed, there is almost a new model/style of computer almost every 3-6 months. The Coca-Cola company for instance remained unchanged between 1960 and 1980, but has had numerous changes in the last five or so years (Dierks, 2001).
International Human Resource Management
International Human Resource Management looks at the way any international company manages its human resources in various national contexts they usually work. Such organizations and companies have to work in a difficult surrounding of various issues and circumstances.
As explained above, globalization has is a common of the modern business environment as businesses are able to conduct business globally. Countries have opened up their borders for international trade and companies are able to operate in different markets other than their domestic markets.
Many organizations have ventured into other global markets by establishing subsidiaries across the globe in different regions. Apart from the ability of firms to operate globally, globalization has enabled mobility of factors of production including labour.
Employees could move from one country or region to work and operate in another. The mobility of labour means that firms must adjust their human resource policies from the local or country of origin level human resource policies to international human resource management that incorporates international regulations regarding employee relations.
In the international HRM, multinational organizations manage their employees in different countries of operation based on the country or region’s employee relations. The international human resource management incorporates all aspects of managing human resources at the global level including use of employee databases that are managed using information systems (Armstrong, 2006).
Strategy and International HRM
The word strategy was added to HRM to indicate the need to establish a relationship between the external strategy of an organization and the internal Human resource strategy. According to Armstrong (2006), the HRM policies and practices must fit into the company’s strategy as applied in the external business environment.
The immediate business condition faced by the organization in the external environment must be taken into consideration in order to attain the necessary competitive advantage.
Bratton & Gold (1999) adds that strategic planning as applied in the normal HRM only considers quantitative aspects of finance, marketing and productivity in the organization with less attention being given to the qualitative dimension such organizational culture, the value system of the firm and power depicted by company management.
In addition, unless the human resource section of the firm is involved in the strategic planning of the organization, it is difficult to achieve the strategic plans.
Strategic HRM involves cohesiveness of HR policies and practices, internalization of the role played by HR in the firm and employee integration. Cohesiveness is concerned with ensuring that HRM practices complement the company’s practices and policies.
The integration of workers ensures that there is identity of interest for the firm and its human resources. The matching model is used to describe the nature of any element of integration and the strategic planning and HRM link (Armstrong, 2006).
The Matching Model
Under this model, it is assumed that countries that experience high wages for employees are able to gain a competitive advantage through utilization of Porter’s generic strategies of cost effectiveness and differentiation of products. However, each of Porter’s strategy requires a unique set of responses from employees in order to reinforce the behaviour pattern.
HRM is responsible for matching the reciprocal employee behaviour to the application of generic strategies of Porter to organizations. To achieve this, HRM begins by matching the philosophy, policies, programs its practices and the five P’s so that the outcome stimulates and motivates the behaviour of employees towards each individual competitive strategy.
Rynes et al. (2004) postulates that the HRM practices and policies of an organization should be configured and managed in a manner that is congruent to the particular strategy of Porter.
Thus, the HRM practices should match the strategies of an organization in order to gain a competitive advantage and performance. In summary, the basic of the matching model is the fit between the external strategies of the firm and the internal strategies that include HRM strategies.
In spite of the benefits of the matching HRM model, Bratton & Gold (1999) argues that the matching model is based on a rational view of strategic decision making that is also based on predispositions and planning actions. Moreover, it is argued that the strategic decisions (both the firm’s and for HRM) are affected by organizational politics hence lack of clarity in terms of environmental influences.
Resource based model of International HRM
This model calls the attention of the strategic nature of employees of an organization and the importance of learning at the work place. Organizations possess unique competencies in their employees that enable them gain a competitive advantage over their competitors in an industry.
The competitiveness of employees is depicted by their knowledge and skills that ensure an organization lead in innovative products. The resourcefulness of employees can be increased through work place learning and education.
According to Bratton & Gold (1999), it is not possible to achieve the competitive advantage of an organization by analyzing the external environment alone, but by including the analysis of the company’s skills and capabilities carefully.
Therefore, in terms of a SWOT analysis, the matching model emphasized on the opportunities and threats facing the firm from the external environment while resource approach emphasizes the examination of internal strengths and weaknesses of a firm to form a competitive advantage.
Strategy in IHRM and Organizational Performance
According to Armstrong (2006), most HRM models make an assumption that an alignment between the strategies of the organization and HRM strategies could improve the competitiveness of the organization hence improved performance.
The resource-based model indicates that there exists a causal chain of policies of team empowerment, education and learning at work, commitment of employees, synergy and improved performance of an organization.
The cycle is called involvement – commitment cycle. According to Sims (1994), it is important that employees be committed to the organization because through commitment, they will share the goal and objectives of the organization.
The employees will then be loyal hence improving the performance of the firm. Through commitment, workers can show dignity, self worth and psychological involvement n the activities of the organization (Rynes, et al. 2004).
According to Rogers & Wright (1998), HRM assumes that employees are an important resource to an organization and the performance of the firm depends on them. The positive impact of HRM on the performance of the firm depends on formulation of appropriate policies and processes and their effective implementation.
In a study conducted by Farnham (2000) to find out the existing relationship between HRM and organizational performance, it was established that it is not easy to measure the impact of HRM practices on the performance of an organization. Doubts have been made concerning the validity of some studies.
According to Armstrong (2006), surveys that only ask about the number of the extent of HR practices are not sufficient to understand the existing link between HRM and performance of a company.
Comparative Human Resource Management
Comparative Human Resource Management focuses on specific countries, areas within the country, or different regions of the world. Countries usually possess different political and economic systems, employment, education laws, labour markets, as well as cultural expectations; therefore, all these issues should be taken into account to apply HRM policies and systems. (Brewster, Sparrow & Vernon 2007).
In spite of globalization, different countries have different human resource policies in place that regulate the way firms manage their human resources. In addition, people from different regions have different cultures and beliefs and values that must be incorporated into the management of human resources in multinational corporations.
Globalization has enabled many multinational corporations to go global and establish many subsidiaries that have diverse human resources that originate from different parts of the world.
The origin of diversity in human resources of multinational corporations is due to the labour mobility that results from the ease with which labour resources could move across the globe. The management of human resources in multinational companies requires incorporation of comparative human resources.
Examples of Comparative HRM
There are many examples that could be given concerning the application of comparative HRM in many firms across the world. Ford is a multinational corporation whose headquarters is in the U.S. however, the company has gone global and operates in many other countries across the world. Consequently, the human resources of the company has a third of its human resources from other countries across the world.
In order to establish a competitive advantage in the industry, there is needs for effective management of the company’s human resources. This calls for application of the comparative human resources.
Apart from the company adhering to employment regulations and policies in the different countries of operation, it is vital that the Human resource management understands and compares cultures from which the employees come from across the world in order to establish a common universal human resource policy (Brewster, Sparrow & Vernon 2007).
An understanding of comparative human resource is essential in understanding the management of human resources in firms operating in the European commission. This is because the inauguration of the EU led to the mobility of different people from different countries in EU working in different countries and regions in the same union.
For instance, many eastern European workers have migrated to work in the UK to work in factories and vegetable farms. Management of these workers calls for understanding of comparative HRM especially with respect to the cultures and organizations of the employees.
As noted by Edwards & Rees 2006), the need for comparative HRM was driven by the increase in the number of global firms operating in different countries across the world. For instance, McDonalds Corporation is present in many countries including China.
Secondly, the international community adopted policies that promoted international trade and competition. This led to organization to compete globally rather than nationally or regionally. This positive effect was also due to the integration of regions, economies and countries such as the EU, NAFTA and ASEAN among others.
The management education used in many western countries such as the U.S, Canada and UK were internationalized and adopted by many countries including many third world countries in Asia and Africa.
This meant that it was possible to apply management skills in firms operating in third world as those operating western countries, thereby driving comparative HRM.
Comparative HRM attempts to remove barriers while establishing uniform human resources in an organization to enhance harmony in their work and performance of the firm (Rynes, S et al. 2004).
As noted by Beardwell & Claydon (2006), cultural aspect is of vital aspect to comparative HRM as HRM managers in multinational organizations consider various cultural elements with respect to different regions and countries.
For instance, while considering power distance in organization, the power distance in many western firms such as the U.S. Canada and UK is small compared to firms in other countries such as India, France and Mexico. Most U.S firms have flatter structures that encourage easy mingling and interaction and employee assistance compared to firms with hierarchical structures that have a big power distance.
Consequently, a firm that has employees from countries with such diversity must treat employees based on their cultural background (Rynes, S et al. 2004)
Individualism and collectivism is an integral aspect of comparative HRM. Many liberal societies such as the U.S., Canada and UK have individuals that focus on their individual needs. These are individuals from loose end cultures.
On the contrary, individuals from societies such as China socialize their individuals in groups with collective responsibility.
As a multinational organization employs individuals from these two divides, it is important to note that employees from loose end societies such as the U.S. would focus on their own individual performance while individual from collective societies would focus on the performance of a whole group and the organization.
Comparative HRM should understand such differences and accommodate them in their management (Rogers, & Wright, 1998).
Related Issues of Comparative and IHRM to Globalization
Performance
Globalization encourages global operations of an organization. The ability of an organization to operate on a global scale means that there are many firms operating in the same market and industry. As the firm operates at the global level, the common performance of employees and the organization in general is of great importance.
This is because the firm is operating at a higher level in markets characterised by free entry and exit. In order to sustain its existence in the market, the organization needs to maintain its performance.
This calls for high performance from the employees of the firm. It is the duty of the international HRM to adopt policies that maximize the performance of employees such as good compensation and motivation policies (Bamber, & Lansbury & Wailes 2006, p. 109).
Working Conditions
The environment in which employees of a multinational corporation work is very important for the performance of the firm. Employees require good working conditions including a good management that is characterised by good leadership skills.
Although different organizations apply different leadership styles, it is important that transformational leadership and other inspirational leadership be applied to motivate employees to perform.
Both IHRM and CHRM concur that a good working environment characterised by high levels of communication and teamwork could helps employees gain high levels of autonomy, learning and excellence thereby improving their performance (Zheng, Yand, & McLean, 2009).
Technology
Advanced technology is an outcome of globalization. Many firms are utilizing technology to establish a competitive advantage either in reducing costs, marketing, improving manufacturing processes or for doing business via channels such as e-commerce and e-business.
Management of diverse human resources calls for has applied technology as different applications are used to develop employee databases for organizations. Due to technology, multinational organizations operating in different countries and regions are able to management their human resources from a central location.
Irrespective of the background, employees are required to use different devices and appliances used to perform different tasks in organizations. Human resource management in companies operating in different countries do train their employees in order to upgrade the system and technology. (Bamber, & Lansbury & Wailes 2006)
Labour Relations and Laws
Both Comparative and international human resource management for firms operating in the global business environment are required by the international labour organization to adhere to international labour regulations regarding hiring and treating of employees.
Additionally, the regulations in the countries of operation are required to reflect the internationally accepted labour regulations. Comparative HRM adheres to cultural elements while observing international and country employment regulations, which is similar to the international human resource management. (Zheng, Yand, & McLean, 2009).
Strategy
Strategy is important to both International and Comparative HRM. Both firms of managing human resources perceive the global business environment as being dynamic and characterized by uncertainty.
Therefore, human resource management should involve the aspect of strategic human resource management that incorporates different strategies that could help a multinational organization maintain its competitiveness in an uncertain environment.
Due to this, many organizations operating in many countries across different countries incorporate different strategies that are in line with the strategies of the organization in order to maintain competitiveness. (Sims, 1994)
Conclusion
International and Comparative HRM are two concepts that are applied in the global context of managing human resources. Globalization has enabled firms to operate at a global level rather at national or regional level whereby organizations compete internationally.
Due to globalization, labour has also become mobile with many people being in a position to operate and work in different countries and regions such as people from Eastern Europe working in Western or any other part of EU. IHRM is applied by organization operating at the global level.
IHRM involves the ability of an organization to manage its human resources in different subsidiaries based on the local or the country’s employee relations. On the contrary, comparative HRM considers the different cultural differences of the diverse employees of an organization. Both concepts are vital in the running of MNCs and establishment of their competitive advantage globally.
List of References
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