International and Comparative Human Resource Management Issues - Essay Example

International and Comparative Human Resource Management Human resource management is an organizational role that mainly deals with enlisting, management, provision of direction, definition of job description and assignment of tasks to employees working within respective organizations. Basically, human resource management can be said to be that role within an organization that touches on virtually every issue that affects employees. This includes employee reimbursement, safety, training, incentives, and so on. Based on globalization with respect to business operations today, human resource management has now assumed an international outlook more so with regards to multinational companies, thus the term “International Human Resource Management.” International human resource management therefore, is defined within the same scope of human resource management, but on a global level. Under international human resource management, human resource management policies are designed at the home country, then implemented and executed both at an organization’s home country and the host country. It is worth noting that these policies are made from a global perspective, that is, they are developed based on input sourced from across the world (Susan & Rosalie, 2001). The goal of this paper is to critically look at some of the outstanding issues relating to international human resource management. In particular, this paper will touch on issues such as the criteria that must be considered in the selection of an expatriate for an overseas assignment. This paper will look at technical ability, cross cultural suitability, family requirements (including those of dual career couples) host country language and any other closely related issues that must be looked at deeply before selecting an expatriate for an assignment in the host country (Chew, 2004; Storey, 1995, p. 366). To enable deeper understanding of this topic, it is important to get familiar with some of the technical words that are used in connection with the same. This will facilitate broad understanding through introduction of new terms and key concepts alike. Some of the key terms used with respect to this topic are highlighted next. The term Home Country refers to that country in which the headquarters to an organization are based. On the other hand, Host Country refers to the country where a subsidiary, be it whole or otherwise, or a joint venture to an organization is based. The term expatriate means an employee sourced from the home country to fill a post at the host country base. Comparatively, a local employee is one who is selected and hired from the host country base. There are some instances where the local employees may be sent to the home country for some reason or another, maybe to undergo training, or another relevant activity related to the organization, when this happens, the local employee is said to be a short term expatriate (Dowling, Festing & Engle, 2008). A third country national is an employee who emanates from a country other than the host or home country. An expatriate manager is defined within a narrow scope, also known as the international manager; this manger is defined as a manger in leadership position in an international setting. A global manager on the other hand, has a wider definition, and is defined as a manager with a hands-on experience with respect to international business and other related matters, the ability to perform across cultural and organizational barriers, and the ability to balance the concurrent demands of short term gains and long term developments. The term inpatriation means the process that involves the transfer of host and/or third country managers to the headquarters of the organization at the home country on either permanent or semi permanent basis. The reason as to why inpatriation is carried is because, there is argument that inpatriate managers can offer global outlook, when it comes development strategies when it comes to management of host country citizens (Dowling & Welch, 2008; Adler & Zhu, 2004, p.4). A lot of considerations are made by multinational companies when it comes to selection of expatriates to overseas assignments. These considerations are based on challenges that come along with the selection and recruitment of expatriates. These challenges more often than not take the form of costs. Zukauckas and Reichelt (n.d.) argue that most organizations, especially those that are just beginning, to a large extent depend on expatriates. Further, they argue that sending employees on assignments overseas is quite expensive. Costs vary between 2 to 5 times of the worker’s annual pre-tax base salary with respect to the host country (Zukauckas & Reichelt, n.d.). Standards of living in some host countries are also higher than others; for instance, in Tokyo, the standards of living there are quite high compared to other destinations such as Mumbai. Incidentally, assigning employees to third world countries can also prove to be quite exorbitant. This might be caused by limited availability of facilities such as schools, and/or even the style of housing that might lack the western outlook. There are also hidden costs that are associated with selection of expatriates that cannot be overlooked; these include things such as lost business opportunities as a result of a non successful assignment. Before taking a critical look on the considerations taken by companies that are contemplating to send employees on foreign assignments, despite the huge costs associated with the process and other drawbacks that come along with the same, it is important to understand why a company would want to send employees on overseas assignments. There are multiple reasons, which according to Shilling (1993) include the needs of a position which only an employee or a bunch of employees can fully comprehend and deliver, the availability of a local person, the level at which the organization is on the global platform, the strategic importance of the foreign company, the host country’s government policies, and finally and more importantly, the cost - the cheaper it is, the better. Currently, literature shows that the expatriate labor force has evolved and its make up structure includes young people, women, dual income families, and younger, growing families. A research carried out in 2008 revealed that the biggest groups of expatriate managers were on their first assignment, had their role cut out for them, transfer was based on region, and the assignment period was averagely between 3-4 years (Dowling & Welch, 2008). Sending workers on foreign assignments is a very sensitive issue. This is because there is a lot at stake during the whole process that can make the whole assignment a success or otherwise. First the company is fully aware that its reputation is of much importance thus it must be up held at all costs. It is also worth noting that cost cutting measures are essential for a company’s success, thus it would be a waste of resources and time to send an employee for an assignment of the outcome would turn out to be anything but success. Then there is the issue of employee satisfaction - human resource management should adequately consider the wellbeing and satisfaction of an employee. An expatriate should be content with their work in terms of work conditions, environment, reimbursement, and so on. These three are of significant value prior to selection of an employee to an overseas assignment. The considerations made are formed under these points as the criteria. These considerations as pointed out above are: technical ability, cross cultural suitability, family requirements (including those of dual career couples) and host country language (Brewster & Harris, 1999, p.176). Expatriate managers experience multiple complex issues during their assignments compared to their local counterparts. These issues revolve around amalgamation of large global acquisitions, comprehending what is meant by performance and accountability in an internationally incorporated system, managing global logistics, developing several country-specific corporate plans, and dealing in services and products with varying competitive dynamics in different markets globally. Thus, the issues of technical ability and cross cultural suitability are very important with respect to how expatriate managers handle global business operations. The biggest challenge to an expatriate manager is overseas assignment. Therefore companies handle the process intricately as it is critical in both ways, that is, from the manager’s and the company’s perspective (Brewster & Harris, 1999, p.176; Zamor, 2008). Companies are increasingly investing in multicultural training programs to facilitate successful operations by their employees in overseas assignments. Incidentally, most companies provide a range of support systems as part of the foreign assignments to their employees. One of the key barriers to multicultural adjustments is family. It is difficult for the families of expatriates to easily adjust to the social settings and fuse with the social network of a foreign country. To this end, most companies incorporate various programs aimed at assisting expatriates and their families to create friendships with fellow expatriates and host country nationals and to give support in the daily realities of living in foreign settings (Zamor, 2008). Overseas assignments to expatriates are quite expensive, but in spite of this, companies still go ahead and send their employees on these assignments. This is mostly important due to the technical ability of the employees, which comes through deeply understanding the company, its origins, its policies, values, products and services and so on. For smooth flow of operations, a company requires an individual who is technically able. It is from this angle that despite the costs, an expatriate will be sent on an assignment since he understands how the parent company runs its operations and this knowledge and ability can be transferred to local employees. Through working in foreign countries, expatriates learn the foreign markets and their operations, and also the reactions of consumers to either products or services offered by the company. They also gather skills in multicultural management and develop a global outlook (Chew, 2004, p.3). Below are some of the factors that must be critically looked at during an expatriate selection procedure. If one of these factors is overlooked or simply ignored it might lead to sending an ill prepared employee overseas, which ultimately might result to the assignment becoming a flop. The first consideration is the task to be achieved. A key area of concern to a company is whether the employee they are sending on an overseas assignment will ultimately deliver the expected results. Is the employee properly trained and qualified to with regards to the task at hand? Is the employee technically prepared to meet the employer’s expectations? This should not only be looked at from the angle of the employee being able to carry out the task at hand, but also the management capabilities of the employee on others. Any person who does not meet this requirement should not be sent on an overseas assignment (Dowling & Welch, 2008). The host country is also another critical factor. It is important to send employees to host countries that have a similar feel to that of the home country. This is because when the host country is so different to the home country, rigorous training has to be undergone by the expatriate as a means of preparation, and this might include family members who are accompanying him overseas. Incidentally, the training would encompass not only the business angle, but also regular life activities. The questions posed with respect to this factor are whether the employee enjoys learning new things and facing fresh challenges, whether the current skills that the employee has are different from then one he or she requires, whether the company have the capability of giving the appropriate skills to the employee through training, which will assist the employee both in carrying out his duties and also on a personal basis. More often than not, employees are fully prepared from a business perspective but are ill prepared when it comes to personal issues (O’Connell, 1999, p.256). How the expatriate adopts to the host country also falls among the key factors that should be considered when selecting an expatriate for a foreign assignment. An employee to an overseas assignment should be flexible in terms of how they think their willingness to discover new ways of doing things and any other situation that might come forth, positive or otherwise. There are cases where foreign life turns out to be much different than expected, full of unexpected and odd situations. As such, it is important that an employee possess skills that enable him to adapt to any situations that might spring forth. It is also important that an employee learn to be impartial with respect to cultures he comes across in the host country. Judging a culture as good or bad might put the employee in an awkward situation. This can play out against an employee if he works in a culture that practice different values than his (Zamor, 2008, p.27). Then of course there is the outstanding issue of language. Any expatriate who can carry out conversation in the local language of the host country has very high chances of becoming successful in his foreign assignment. It is common knowledge that business is usually carried out in formal language, which is English, but it becomes even easier for an expatriate to get along in a host country if he can speak the native language. Generally, a foreigner who can speak native language is normally welcome and accepted by the natives, more so if he is fluent, but a little knowledge of the local language of the host country by a foreigner earns them respect among the natives, thus making their work a lot much easier in terms of business and in their personal lives too. Lack of knowledge of the native language places the expatriate in a difficult position; it means that he is heavily dependent on others even when it comes to very minor tasks. This depicts the expatriate in a negative position as it shows that he is incapable of handling some cases if at all they come up. Another outstanding factor is the issue of family, for an expatriate who has family, all the issues discussed above apply to every single member of his household, except that the concept is now switched to family life from business life. A few questions come afore with regards to this factor. Is the spouse to an expatriate expected to work? And if the answer to this question is in the affirmative, will the host country under their laws allow the spouse to work? An expatriate’s children education is also a key concern when considering sending an expatriate on an overseas assignment. Educational amenities in the host country, in some instances, cannot measure up to that of the home country (Dowling & Welch, 2008, pp.4-7; O’Connell, 1999, p.256: Selmer, 1995, pp.20-22; Warner, 2005, p. 211). In view of the five factors analyzed in the sections above, technical ability and host country language skills should take centre stage when it comes to expatriate selection. This is because technical ability because helps in the smooth flow of business operations, thus the chances of the assignment being a flop are slim since the expatriate understands the business in depth. Host country language skills are also important since they make the expatriate’s life much easier and manageable in the host country. References Adler, J.S. & Zhu. J. (2005). Corporate culture and expatriate selection strategies in mncs: Are they related?- Some empirical evidence. p.4.Available: http://www.buseco.monash.edu.au/mgt/research/working-papers/2005/wp52-05.pdf [accessed on 22 April 2010]. Brewster, C. & Harris, H (1999) International HRM: Contemporary Issues in Europe. Routledge, London. Chew, J. (2004). Managing MNC expatriates through crises: a challenge for international human resource management, Research and Practice in Human Resource Management, 12(2), 1-30. Dowling, P. J., Festing, M. &. Engle, A.D. (2008) International Human Resource Management: Managing People in a Multinational (5th edition), Learning EMEA, New York. Dowling, P.J., Welch, D.E. (2008) ‘International human resource management: managing people in a multinational context (8th edition). Thomson, London. O’Connell, J. (1999) The Blackwell encyclopedic dictionary of international management Vol.7, Wiley-Blackwell, New York (pp.255-317). Selmer, J. (1995) Expatriate management: new ideas for international business. Greenwood Publishing Group, New York (pp20-22). Shilling, M. (1993). Avoid expatriate culture shock, Human Resource Magazine. Available: http://findarticles.com/p/articles/mi_m3495/is_n7_v38/ai_14363477/ [accessed on 22 April 2010]. Storey, J. (1995) Human Resource Management: A Critical Text, Routledge, New (p.366). Susan, S. & Rosalie, T.(2001) Introduction to the international human resource Overseas management. Special issue. Journal of World Business. [online] Available: http://www.accessmylibrary.com/article-1G1-80932233/introduction-international-human-resource.html [accessed on 22 April 2010]. Warner, M. (2005) Human Resource Management in China Revisited, Routledge, New York (p.211). Zamor, P. (2008). Intercultural Training for German Expatriates Going to China, BoD – Books on Demand, New York (p.27). Zukauckas, G. & Reichelt, E. (n.d.) Overseas assignments require complex plans. International Trade/Offshore Manufacturing/Sourcing/Export/Import/Consulting. Available: http://www.aimlink.com/I&I/HR1.html [accessed on 22 April 2010]. Read More