Globalization gives great business opportunities to companies that have growth potential in different locations around the globe. It is of great importance that a company gets the right person for the right job at a given destination. This process involves organizational structures, procedures, and policies in human resource to operate a multinational company. This is opposed to just having the company in many locations, and in different countries.
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Once these structures are put in place, governance, which is crucial in ensuring the performance and productivity, is applied through international human resource management (Gartside, Griccioli & Richburg, 2011).
This paper discusses on the importance of international human resource management in today’s workplace and how they affect the performance of multinational organizations. It further outlines the concepts, policies and practises in the international business arena that have necessitated the introduction of human resource management from a global perspective.
International Human Resources Management (IHRM) in today’s global workplace
When companies expand their operations to other regions beyond their mother locations, it requires platforms to improve on technology, global policies and procedures which are then forwarded to individual regions to operate as independent entities. This is achieved through the introduction of procedures and operations that allow innovation in the local market. This means that employees may not follow the company’s standard operations, for example, in marketing.
This is because that region may require a different approach defined by the consumer spending patterns and interests. This requires that companies get individuals who adapt to new markets and drive growth while being consistent with the company’s procedures. This brings the issue of sourcing employees not only from the mother regions but also from the new destination because they are bound to understand the market better.
This means the leadership of these new locations should be granted power to make decisions on processes and procedures of their region. Different regions have different cultures, which is also another challenging factor to business executives.
When employees are exposed to areas with different cultures from what they are used to, they experience new ways of life, norms, rules and regulations which can be very challenging if a team from the locality is not intergraded to assist in orientating the team to the new region (Gartside, Griccioli & Richburg, 2011).
A good strategy that works well can be the introduction of short term assignments for employees to work in different regions like two years. This enables employees to experience different environments, which gives them an upper hand if they have to relocate in the future. Talent is also a good investment which the IHRM teams have given priority. Best results are obtained in cases where a given skill is natural as compared to situations where it is acquired through learning (Lundby, Jolton & Kraut, 2010).
Information systems connect a multinational organization so that these branches can share information and reports as one. With improved technology, sharing information is a major requirement for Human resources to coordinate operations of different regions and overcome the barriers posed by distance and challenges associated with limited time for face to face communication.
With processes that are real time, daily operations of different regions can easily be monitored and streamlined from one central location while involving all the parties. This has simplified the HR workload and improved efficiency since feedback, appraisal, and promotions can be awarded easily.
These systems have influenced the way management looks at employee competencies and talent. This is because the systems have a direct impact on employees. For instance, they share points where employees give their feedback on what is happening around them both inside and outside work (Dowling, Festing & Engle, 2008).
Impacts of human resources management on multinational organizations and business arena
Competitive advantage can be realized through good governance within the human resource department or completely lost. This is a very crucial aspect in business growth. This is influenced through the way it places different individuals according to their abilities and talent. When it comes to global workforce, it requires that performance be evaluated and feedback given frequently because this is what determines whether an employee is giving the expected output.
Employee productivity is one of the aspects that place a company in a competitive position. Thus, the human resource team can monitor its expatriates to ensure that they are compatible with the regions and roles given to perform.
This can be achieved through engaging the management of the various regions in active discussions through which employee issues are addressed. If a good relationship is built between the international human resource and employees through the management, then a company is better placed to achieve its goals (Wesley, Scroggins, Philip & Benson 2010).
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Transition of employees from the original company to new locations can be quite tricky. This is because of the institutional differences present in different countries. This requires that employees should be supported for them to manage in these new environments. The support offered to employees determines whether employees will drive business growth as expected. This depends on the incentives offered to counter-act the inconveniences that are likely to be experienced.
Rewards are also a form of incentive that should be given a careful approach and administered on performance and not aspects like age and positions. Such contingencies if observed well and administered fairly will encourage employees to work hard for even better results.
Failure to this can lead to great losses if employees are assigned new regions and demoralised from performing. Therefore, analysis should be done before employees are relocated to ensure that it is fair based on performance with issues that individual employees raise considered Wesley (Scroggins, Philip & Benson, 2010).
Future trends in IHRM
With every company seeking obtain a competitive advantage; Multinational companies should concentrate on the organization type that they adopt. This determines whether the organization can gain political support, adopt innovations that match the new location or have access to resources from the new country. An element that can be working effectively for one company may not be workable for the other companies.
This calls for extensive research before a company decides to venture into a new region. One of approaches to adopt before expanding business to other countries is “centricity approach”. This is whereby ownership of the company remains within the original founders. Though different entrepreneurs join the organization, the top leadership should be represented by an original member.
This is because this aspect maintains the bonds that existed before the company began diversifying. This also ensures that succession challenges that are bound to destroy a company are overcome (Ulrich, 2010).
Another approach is re invention based on the success that a company has achieved in the past. This will help a company avoid challenges faced in the past from recurring. It also provides a basis through which a company can adapt to the new trends to keep it at a competitive level. Changing leadership often is a form of reinvention. This aspect saves a company from the costly effects of arrogance associated with leaders who stay in power for long periods.
There often exists a distinct difference between the public and the private sector. Therefore, for a company to excel in a new location within a certain country, it is important to learn and work within the laws of that country, and this can lead to political support in future.
Breaking monopoly in new countries is an upcoming strategy that should be treated carefully to avoid collision with protected markets. This is the IHRM should consider before supporting the company’s decision to move its human resources to other countries (Ulrich, 2010).
International culture is also an upcoming factor that provides global understanding in future. This is when people from different origins are working under the same leadership. The IHRM is expected to introduce this culture in its workforce to prepare employees for future relocations. It is also expected that the IHRM will keep up with the upcoming technologies to achieve success when it comes to hiring the right candidates (Mary & Karen, 2004).
The global workforce plays a significant role in business growth and development because it is through employees that a company achieves business success. The IHRM has transformed today’s workplace, and this has seen many companies expand to other countries and achieve business growth.
This has also presented an opportunity to the workforce to work closely with the leadership. In turn, this has created a global team in which employees work from different backgrounds and culture to achieve a common goal. With continuing innovations and technologies, the world is bound to become one global village where IHRM will be the driving force that will support its divisions to gain competitive advantage.
Dowling, P, Festing, M & Engle, AD 2008, International human resource management: managing people in a multinational context, Thomson, South Melbourne, Vic.
Gartside D, Griccioli S & Richburg, R 2011, How to manage a global workforce. Web.
Lundby, K, Jolton, J & Kraut, AI 2010, Going Global Practical Applications and Recommendations for HR and OD Professionals in the Global Workplace, John Wiley & Sons, Hoboken.
Mary, K & Karen, T 2004, ‘International human resource management: overcoming disciplinary sectarianism’, Employee Relations, Vol. 26 Iss. 6, pp.595 – 612.
Ulrich, D 2010, Leadership in Asia: challenges, opportunities, and strategies from top global leaders, McGraw-Hill, New York.
Wesley, A, Scroggins, J, Philip, G & Benson, S 2010, ‘International human resource management: diversity, issues and challenges’, Personnel Review, Vol. 39 Iss. 4, pp.409 – 413.