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Globalization has facilitated the growth of multinational; an increasing number of companies are diversifying their operations in different part of the globe. When operating in the international arena, a company has to manage a diverse work force; managing diverse human capital has continued to be a challenge to human resources managers.
The main challenge is how to develop a universal performance management system amidst changes occurring in different environment that affect personnel differently.
With diverse human capital, companies need to develop strategic human resource management practices, which will provide the company with global consistency of purpose as far as human performance management is concerned.
One major role that strategic international human management (SIHM) plays is to manage diverse human capital performance; performance management is a continuous process through which the output of human capital is gauged to ensure that goals are consistently being met in an effective and efficient manner.
The policy addresses activities affecting the performance of human capital in the efforts of formulating and implementing strategic needs that will facilitate an improve business within an organization; to undertake this task in a diverse human resources capital, is a challenge to personnel managers (Fernandez-Alles & Ramos-Rodríguez, 2009).
This paper looks into the problems encountered by human resources managers when performance managing their human capital from a diverse origin, it will also offer some suggestions on ways that the problems can be minimized.
Problems of performance managing in diverse human capital
Human resources are precious, they need to be managed effectively; when developing a personnel’s management strategy; an organization needs to have an effective performance appraisal and rewarding system. When an effective performance management is implemented, it boosts employees’ confidence and motivates them.
Performance management is defined as a continuous process that involves assessment of an employee in all dimensions with the aim of rewarding and establishing areas that can be improved for better performance.
When dealing with the international human resources management, there are three focus areas that managers have to look into, they are inter-unit linkage, internal operations, and competitive requirements; all the above areas have challenges they pose to personnel management (Hampden–Turner & Trompenaars, 2006).
To handle this section effectively, this section will look into every area and the problems/challenges associated:
- Inter-linkage issues
Diverse human capital has a variety of human components that need to be managed effectively; the differences in how people of different cultures, believes, traditions and values have offers the performance managers the problems of establishing key performance parameters.
When appraising the performance of an employee in the global arenas, factors that are likely to impact on his performance need to be well understood; in the case of an expatriate, he is likely to be affected by culture of the new country, job requirements and personal attributes.
When appraising and gauging the level of performance of such an employee, the above variables should be put into consideration.
External and internal environment has an impact on the general performance of the company; the ease of adoption and the environment that an expatriate operated in determines whether he will be able to work effectively and pose satisfying results at the end of the year.
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When appraising an expatriate, the culture adoption rate of the expatriate should be considered, they should be one of the parameters that need to be taken into account; the issue comes with how the human resource managers gauge the rate of adoption (Maznevski & DiStefano, 2000).
- Internal operations
An effective human resources management should ensure that internal operations of an organization are operating in their optimal form; human capital have the role of ensuring the operations are to the expected standards; the issue that face multinationals is how to control the internal structures in their absences.
Internal management is based on information from output and the inputs offered by human resource of a company; people have different viewpoints thus in a diverse human capital environment, the information that will be available for management to react on will be diverse and incomparable.
This make developing of internal similar business policies become a challenge to multinationals. Other than internal business operations, different countries have different labor policies that are mostly determined by the rate of economic development of the country that a multinational is operating.
The company has to ensure that it complies with the rules; the move may call for special or micro human resources policies that are challenging to manage. For example, there are countries that have wage limits while others do not have, others have fifty-five as the retirement age while others have sixty years, and this poses a challenge to personnel management.
An effective performance process helps an organization to learn and understand its staffs strengths, weaknesses, talents and capabilities. When the above attributes of employees are known, then a company can devise appropriate motivational, rewarding, training and mentoring programs to enhance performance within the organization.
When gauging the strengths and weaknesses of human staffs, management faces the challenge of harmonizing the available technological developments and favorability of production across different countries.
Sometimes a company may think that a certain employee is highly effective and a high performer but this is only facilitated by the level of technological development and the rate at which the business is doing in the country of establishment.
On the other hand, another employee who operates in an area of low technological development, and the business there is not as favorable, then the employee is gauged as a poor performer. The differences in technological development and general condition in the country of establishment can thus become an issue in performance management.
Multinationals have to keep in touch with the situation on the ground for all countries as well as implement measures that will ensure that an equitable performance appraisal is conducted putting all the parameters affecting the situation at hand.
International business communities are volatile and keep changing with changes in political, economical and social situations; management when appraising the level of performance has the task of ensuring they keep adjusting their policies with the situation on the ground; this will enhance the development of appropriate policies of management.
The changes in political situation keep affecting the rate of operation in an organization thus to effectively performance appraise, managers have the role of implementing flexible performance appraisal models of which managing them is an issue.
Separation of time and distance is another threat that challenge international human resource management performance; the differences limit the rate of contact between head managers and the subsidiary managers; there lacks the close interaction and sharing of ideas and issues becomes an issue.
The differences may also mean that some policies successfully implemented in a certain area are not applicable in another area. This may hinder the entire multinational operation.
Gauging the level of performance of such an employee
Different countries have different intellectual power; there are people who have highly innovative power while others have an abstract power. When managing people of this two areas, the personnel managers may have the problem of determining the best method that should be used in both cases and yet offer satisfactory results.
The differences of human beings capabilities affects the implementation of uniform policies to enhance performance since some countries may call for an innovation based appraisals while others calls for abstract power appraisal approach; whichever the approach, then the managers have a challenge developing best performance appraisal models to implement in their organizations (DiStefano & Maznevski, 2000).
Suggestions on ways that the problems can be minimized
Despite the challenges offered by international performance appraisal methods, the process is crucial and needs to be handled with utmost care and strategic moves adopted to ensure that the method has been successfully been handled.
The approach that human resources management will take will be of utmost good to the company and should ensure that all areas have been covered effectively.
The following are the best approaches to such an international appraisal strategy:
- Developing uniform appropriate performance standards
Since the company is same, the top management should come up with uniform corporate goals, objectives, mission statements and vision statements; they should define the expectations that stakeholders have from an organization, these policies cut across the board and employees in whichever the country should understand the role they have to play in their attainment.
Managers’ acts as agents of shareholders so they should be allocated some expectation that they should deliver form their teams and country of operation. With the overall expected and promised goals, human resources should get their position; every employee is seen to be performing a certain duty to fulfill the goals directly or indirectly.
Human resource departments should develop the performance standard that they want from every employee, having attained; they are the same standards that are used in performance appraisal. The corporate goals should be taken as overall but should be some goals that countries should be following depending with their potential and the capability that they have.
To ease the burden of appraisal, every country should have a competent team of human resources managers who have been empowered to appraise the performance of employees in the areas of their operation and if need be offer some advice to the higher office on the best approach they need to implement when managing their human capital.
The regional performance appraisal should be empowered to offer sound advice to the top management on the right policies unique to a certain country they should implement (Bullen & Eyler, 2010).
- Using a balanced score card for evaluation
Management should develop a balanced score card performance management approach; balanced scorecard assist human resources to look into qualitative and qualitative performance of an employee. It does not concentrate on one area of the human capital but goes into other specific areas that need to be appraised for an effective operation of the business.
When developing standards, human resources department looks into two main aspects: qualitative and quantitative. Quantitative standards are the deliverables that an employee is expected to produce when offered maximum support and mentorship from the management and the organization as a whole (Kaplan & Norton, 2001).
The tangible outcome that can be attributed to a certain employee when supported by other members of the team should be the vocal point in quantitative performance standard setting. When setting the expected level of quantitative output, the company should ensure that the potential of a certain country has been gauged.
It may be tricky to have similar expectations across the board but the expectation should reflect the potential that a certain country has.
There are different ways of coming up with the target that every individual is likely to get; the most common method is a top down approach where the top managers define the corporate goals and general target, then divide it among the departments that produce quantitative results (Takeuchi, Chen & Lam, 2009).
The next performance standard that an organization should set is qualitative performance; the performance is more concerned on the general attitude and conduct of employees within the organization; this is of importance especially when dealing with different cultures and environments.
It is important to note that depending with the country of operation, the way people portray their feeling and attitudes is different, so there is need to ensure that the right approach has been used.
The quantitative standards that are set in an organization are mostly the human resources policies that an organization should uphold; they include ethical conduct, the general accepted organizational behavior and the corporate principles.
The attitude and behavioral appraisal method can be universal but the expected results weighed against the level of social-cultural environment of the country of operation (Trudel, 2009).
- Culture intelligence approach
With the diverse cultures that multinationals gave to deal with, there is need to understand the culture of the country of operation, the culture of the people should be crucial in determining the approach to measuring their performances, attitudes, level of output, and expectations.
When the company understands what is actually happening in a certain country, then the managers can be able to implement the best policies and strategies that meet the needs of human capital in a certain country. The strategy of approach is mostly different in different countries thus there is need to have their cultural believes well-noted (Triandis, 2006).
Other than culture intelligence tools, managers should have root human resources management approach, this is where when they are diversifying and probably sending an expert, experts with a certain cultural affiliation should be sent to those countries that have similar cultural back ground (Hampden–Turner & Trompenaars, 2006).
Managing diversity is a challenge that faces multinational businesses; they have to deal with people of different cultural backgrounds and varying labor laws. Developing effective performance management strategic assists multinationals to manage diversity in an appropriate manner and be able to tap diverse intellectualism and talents available in the diverse human capital.
The best approach that multinationals should use is a micro-management approach where at country of operation level, they have competent human resources department with the authority to performance manage employees in that locality them advice the human resources department at corporate level.
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