Pay and Conditions of Work Should Not Be Standardized in Multi-National Companies - Literature review Example

Pay and Conditions of Work Should Not Be Standardized In Multi-National Companies Many organizations haveoutgrown their geographical boundaries. This has the consequential demands on the human resources management body to adapt a more globalized and internationally acceptable policies and procedures in order to stay competitive in the global market (Bohlander et al. 2015, p.45). Competitively, therefore, human resources managers must always be aware of what the global labour markets offer and so acquire them in order to add value to their organization. This, therefore, brings into context the argument presented by Plessis and Beaver (2008), in their paper, The Changing Role of Human Resource Managers for International Assignments. In their paper, the two authors present a fascinating scenario of the different socio-economic factors that should be considered especially in a multi-national organization that more often than not send its employees for international assignments. Introduction In his research paper published in the International Journal of Interdisciplinary Social Sciences, Andries J du Plessis Frederick (2008, p. 204) mentioned that proper and adequate human resource management especially in the global context places an organization on a more successful platform in the world marketplace. This appropriate management, Valentine, Jackson and Mathis (2013, p. 41) observed, involved proper and propositional remuneration for the employees especially those assigned to international businesses. In the face of the modern internationalization and globalization, international human resource management has become a useful concept for human resource practitioners to adopt and practice (Doran & Baker 2007, p. 39). To this end, Plessis noted that owing to the difference in the socio-economic and legal-political demands that vary from country to country, designing a remuneration packages for the employees could evidently differ from the domestic-based human resources management (Bohlander et al 2015, p.49). In other words, owing to the possible incompatibility that might exist especially in regards to a company’s standards of human resource management policies and practices, it would not be easy to standardize pay and conditions of work in multi-national organizations. In this light therefore, this paper present the argument presented by Andries J du Plessis and Bob Beaver (2008) in their paper titled, “The Changing Role of Human Resource Managers for International Assignments”, which was published in International Review of Business Research Papers. The paper presents an argument of the two authors by giving the supporting background of their position. Further, reviewing the position held by Du Plessis and Bob Beaver (2008) I sought to concede with them, presenting my explanation as well as justification. International Human Resource Management perspective Working condition and remunerations According to Du Plessis (2007, p. 2) cultural differences and cultural diversity of workplaces are the modern day realities in the human resource management department. Many scholars have noted the influence that cultural difference brings into the workplace. In this vein Sims (2007, p. 52) observed that different approaches towards collectivism and individualism cultures, which comes as a default in lieu of difference in culture, creates a certain degree of multiple negations human resource managers must consider especially in multi-national organizations (Harzing & Pinnington 2010, p. 77). This is because one culture may be collectivist in the sense that employees working as a team is highly valued whereas in other cultures are more individualistic in nature. Evidently, this difference would likely lead to the creation of multiple pay schemes for business organizations in terms of percentage rates. In agreement, (Gully et al., 2003, 1371) noted that in light of this cultural difference in the workplaces especially in regards to collectivism and orientation towards the provision for and protection of employees, Asian merit pay in countries such as Indonesia ad Singapore may have higher value increment than those allocators in the US. This points to the assertion by Plessis (2007, p. 6) that cultural difference influences and significantly shapes any business organization structure and HRM practices that have international outreach. Further, since multi-national organization must employ people from different cultural backgrounds, it must be observed therefore that the internal working condition would be substantially different from domestic ones (Plessis & Bob Beaver 2008, p. 163). In such cases thus, HR professionals must embrace internationally acceptable and integral measures and procedures in the management of to ensure productivity in the workforce. As such the HR professionals must also ensure that all employees are in a better position to understand and personally integrate other cultures as well as increase their cultural competence (Briscoe, Schuler & Tarique 2012, p. 157). This cultural awareness and preparation will ensure minimized culture shock that will somehow compromise an employee’s work productivity. Further, proper understandings of such cultural differences that exist in the internationally participating companies will also enable overseas assignments to a joy and easy ride for the assigned employees (Harzing & Pinnington 2010, p. 79). This means therefore that the compensation and the remuneration of employees who are sent to overseas companies are externally linked to the particular companies’ strategic goals and consequently to the very purpose of the assigned assignment. To this end, Plessis (2007, p. 8) observed that the compensation and the remuneration system should be adequately be integrated with all the expatriation policies and structures such as the selection, training, and professional development programs. That is to say that even though most of the multi-national organization’s systems are imprinted with their motherland culture and traditions, they, however, should be flexible to meet the steadily growing global demands and so incorporate the global standards. However, this does not mean that there should be a standardized system of remuneration and working conditions (Briscoe et al., 2012, p. 158). Adaptability is one unique feature of the humanity. However, the ability to adapt does not come overnight, but it takes a considerable period. In business, time is one of the key elements that strike the balance between the existences and extinct of a particular business, therefore, the time taken for an employee(s) send for overseas assignment is practically wasted (Du Plessis & Frederick 2008, p. 206). Arguably, one the other side, failure to adjust accordingly would comprise the productivity of the employees. Morris, Bjorkman and Stahl (2012, p. 65) observed that culture shock contributes negatively to ones productivity. This means that culture shock can easily cause one to have negative feelings towards a particular host country and its people in general and so creates a longing or desire to return home. The results would be reduced productivity. Briscoe et al., (2012, p. 159) observed that failure would range from the complexity of the new working environment to the cultural incompatibility that an employee’s family may struggle with to adopt and adjust to. Moreover, Du Plessis and Frederick (2008, p. 207) also observed that employees may be slow to re-adapt to new country’s way of life let alone the way of running business. These may in a way affect the general productivity of the employee. In agreement, Valentine et al., (2013, p. 67) also observed that people often tend to enjoy the external assignment, but the difference soon becomes a reality with shouting impact of the individual that in one way or another the general productivity is affected. Notably, people with different backgrounds have differing attitudes, behaviours and beliefs which if not properly integrated can easily lead to business failure (Sims 2007, p. 53). This means that HR practices and policies such as hiring, firing and rewarding are always determined by the existing policies and practices of the host country and so are purely based on the specific culture (Doran & Baker 2007, p. 69). As such overseas assignments in a new cultural environment may have inevitable challenges to both the expatriate and the local employees. Needless to say, the management of various HRM practices especially in the multi-national context may be a difficult task at times. Evidently, albeit it is true that globalization imposes a considerable pressure towards the reception of standardized system of human resource management, an equal measure of difficulties emerge inevitably (Morris et al., 2012, p. 67). It is noted that certain aspects of the HR management such as the very influence of local culture, the institutional arrangement and structures and different labor market policies continue to hold the standardization process at bay (Harzing & Pinnington 2010, p. 134). In this light, it is noted that the attempts toward standardization is often compromised because it involves critically assessment of the existing culture, rules and laws of the country concerned. In other words, regardless of the preparation and readiness or even the highly developed human resource policy structures in the parent company, it would be a misguide assumption that transferring such policies would be less financially involving, let alone compatibility with the hosting nation (Du Plessis & Beaver 2008, p. 169). Arguably, as suggested by Doran and Baker (2007, p. 71) a multi-national company’ HR policies and practices especially in multi-national companies should be an actual mix of both the parent HRM systems and the host country’s factors as well as the specific companies practices. Though it is expected that such international participating companies should be able to change their policies always to achieve an individual level of compliance throughout the organization, it is evident that such attempts are generally very costly particularly in terms of time and money (Briscoe et al., 2012, p. 159). Even though, as Thomas and Lazarora (2010, p, 76) suggested the human resource managers can make comprises together with the working personnel, the nagging question of the in regards to the sustainability and continued ability of such compromises. This leads to the position on which Plessis and Bob Beaver (2008) stand in their argument that the business processes and operations cannot actually be standardized owing to the natural difference that exist in various working contexts in different countries. This literally reflects Sims (2007, p. 57) argument that international human resource (IHRM) in this case has various aspects that determine both legally and culturally but the hosting country that the company seeks to enter. Having said that, it is still within the confines of mandates of human resource management to strategize and implement the company’s plans. Under such the multi-national company would be in a position to consider and evaluate what strategies are applicable in and under what circumstances (Plessis & Beaver 2008, p. 169). This mean that one policy may consider a success in one particular cultural setting in a given country, however the same policy would be lead to a considerable failure in its application in another different cultural setting and different country (Gully et al., 2003, 1373). Therefore, every working condition and workplace should be treated uniquely different and so demand different but suitable policies and structures. This demands that the HR professionals must always be aware of what their employees want in different countries and cultural different contexts. This thus points to the same end that pay and working condition of work should not be standardized in the multi-national companies (Doran & Baker 2007, p. 73). Analysis and Justification In any organization, the human workforce is the one irreplaceable component in the daily operation of the organization. Employees are the bearers of skills and knowledge that must be adequately managed if a business is to succeed. At the same time, it is of great import to always keep the working personnel encouraged and motivated in their work as a way of ensuring maximum productivity on their part (Sims 2007, p. 59). Moreover, it is within the company’s responsibility to constantly ensure that their employees upgrade their skills and are kept up to date with current global trends through special seminars and overseas trips/assignments. To this end, Harzing and Pinnington (2010, p. 136) argued that multinational companies constantly value the international experience of the human capital. This may be arguably be attributed to how the international organization values the employees’ knowledge as well as their external exposure. In other words, the skills or the expertise that an individual employee would have when exposed to the international business environment would no be easily obtained within the home country and such skills would be geared towards the success of the business/company (Gully et al., 2013, p. 1370). Furthermore, within a multi-national company, the employees are from different cultural background with different HR practice and policies as well as training, as such the workplace becomes a cultural mix (Valentine et al., 2013, p. 56). Therefore, this means that managing such a workforce require international acceptable approach so as to retain the workforce as well as ensure their maximum productivity. As a means of ensuring productivity, Plessis and Bob Beaver (2008, p. 174) suggested that up-to-date feedback should always be received by the HR management team in order to measure the employees’ performance appropriately. Through this approach, the management can suitable train the selected individuals for overseas assignments as well as manage them in new cultural settings (Thomas & Lazarora 2010, p. 93). This would reduce the evitable risks that are in accompaniment with overseas assignments. In this regards, the standards of evaluation and measurement should vary as compared to the domestic-based HR practices and policies. That is to say, the standards should take into account the varying background of every employee add the existing policy frameworks. To reflect this Dowling, Engle and Festing (2008, p. 89) in argued that many multi-national organization adopt international remuneration/compensation packages as a way of ensuring tat the policy is consistent with the overall strategy and structure the particular company’s needs. Additionally such international compensation policies seek always to attract and retain staffs as well as facilitate the international transfer of employees in the most cost-effective manner. However, it must be observed that based on the fore mentioned cultural diversity that comes with different geographical regions; the implementation of such policies cannot be a reality (Gully et al., 2013, p. 1371). Although, globalization have resulted in smooth cross- cultural integration, it must be realized that every country has its rules and laws upon which lay the foundation of business policies within the confines of that particular country. This, therefore, means that to every multi-national company that seeks to establish it operation or overseas assignments but be limited to the framework of the law of the land. As such rewards and employment conditions vary globally depending on the local market (Harzing & Pinnington 2010, p. 136). This places a demand for multinational companies to determine the internal and external business environmental factors of the host country before investing or deploying employees in the business assignment in the country. Owing to the difference cultural background and business environment, standardization of human resource policies and practices would be quite complex. This is because it would involve embracing employee diversity so that none feel a sense of being left out. It must be appreciated that in multinational companies and organization, diversity of the workforce is one essential element for the success of the business deals (Dowling et al., 2008, p. 123). Under such imbibing, everyone into the policy and practices would be one recommendable step but would present a milestone challenge to the human resource management. Further, standardization of the policies especially in regards to reward and working condition would involve having reconnaissance in the hosting country. This would demand financial involvement, yet the process may not bore fruits. Thus, the whole process would be expensive in terms of money and time. As such it is no doubt that the position held by Plessis and Beaver (2008) that pay and working condition should not be standardized holds more water. I heartily concede that such human resource policies should not be standardized in any way. Conclusion In summation, it is evident that different geographical localities have differing geographical rules and laws that govern the specific region. Upon those laws of the lands, business policies are structured in similar reflection so as not to contradict the very laws that govern the operation of every business entity within the borders. His means therefore that multination organizations must adopt the specific policies of the hosting country in order to operate within those regulations. This specifically affects he very policies and practices of human resource management especially those that operate internationally. As such international human resource management would have difficulty in embracing universally acceptable standards of operations. Therefore, owing to the possible incompatibility that might exist especially in regards to a company’s standards of human resource management policies and practices, it would not be easy to standardize pay and conditions of work in multi-national organizations. In the same breathe, therefore, this paper has presented a conceding argument that standardization of pay and working condition of multi-national companies should not be standardized. 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Valentine, S, Jackson, J & Mathis, R 2013, Study Guide for Human Resource Management, Cengage Learning, Cambridge. Read More