International Human Resource Management - Essay Example

International Human Resource This paper will deal with the subject of human resource management. Across three sections it will describe a range of hard and soft goals that can be used, how these goals may be weighted or treated differently for expat employees and local employees and lastly will give examples and applications regarding the above two sections. A goal is a projected state of affairs that a system or organization plans or intends to achieve. It is an organizational end point in some sort of development. It is in essence the direction towards which effort is directed. Many organizations aim to achieve their goals within a finite duration of time by setting deadlines (Goldratt and Cox, 1992). Goals are utilized to model agents’ relationship and subsequently to connect organizational needs to system requirements (Wimmer, 2004). Most companies follow a mixture of hard and soft goals. A goal is classified as hard when the criterion for its achievement is clearly set out and sharply defined. Hard goals are based on the traditional measures of financial performance. Soft goals are concerned with what the company wishes to achieve and where it wants to be as a social entity. As opposed to hard goals soft goals do not have a clear cut specified criteria to decide whether the goal has been satisfied or not. For a soft goal it is up to the original goal maker or an agreement between concerned agents to decide whether the goal has been achieved (Miltenburg, 2005). Soft goals can only be partially achieved. The kind of goals sought in a business strategy depends on the organization’s internal capabilities and the opportunities and threats in its external environment. Goals can be both short term as well as long term. Short term goals compel managers to make changes today and produce immediate results and show performance improvements. Long term goals on the other hand force managers to make changes today and for the company to improve and succeed in the future. However for a company to be successful, it goals must be consistent. Hard goals include financial goals, customer goals, operations goals, safety goals and employee goals.. The financial health of an organization needs to be focused on and for this an appropriate task would be to set specific financial goals and objectives. Financial goals generally address overall profitability, returns on investment, revenue growth and the financial strength of the company as such. In order to set effective financial goals, first the company’s key performance issues must be identified from a financial perspective. Following this performance targets must be identified and then these must be incorporated into financial goals. Some examples of financial goals include, increasing shareholder dividends by 1%, increase market share by 10% over the next three years, increase ratio of profit to sales by 10%, reduce uncollectible debt by 20%, maintain return on equity at a minimum of 10% etc (Max and Bacal, 2004). These goals become the company’s performance measures. By developing financial goals greater clarity is obtained on how the company is expected to perform. Customer goals are concerned with customer retention and maintaining customer satisfaction. Customers are the basis for any business selling any kind of goods or services. They can be internal or external customers. Customer service is generally defined as the measure of degree of caring communicated by the people, processes and environment in the organization towards its customers (Hosford-Dunn & Roeser & Valente, 2000). Customer goals are most important because without goals customers cannot perform, which in essence means that they will have no need for the goods and services offered. Hence any goal that aims to bring in more customers, retain existing customer and provides customer satisfaction is a customer goal. Maintaining a minimum of 90% customers returning to the store, receiving no more than two complaints validated by the manager per year, ensuring that 90% of the customers renew their contracts, contributing at least 2 customer service improvement strategies per year, contacting ten customers a week to follow up on feedback etc are some of the examples of customer goals (Max and Bacal, 2004). Blazey (2004), says that “operations are characterized by processes that are repeatable and regularly evaluated for change and improvement in collaboration with other affected units within the organization.” Operational goals are set in order to ensure efficiency across units. Examples of operational goals include the drive towards perfect order, removal of customer charge-backs and reduction in returns. Operational goals can also range from cost reduction, better service, and increased profitability to lessening damages, reduction in headcount or just simply all of the above and without any capital infusion. Safety goals are set to ensure the safety of employees within the organization. Employee safety is the main responsibility of the management and without specific goals, safety cannot be ensured successfully. Some of the safety goals include accountability on the part of the organization, ensuring safe working environments, identifying workplace hazards and controlling them, initiating safety programs and policies, setting up safety tracking devices, giving safety training to employees etc. Employees play a very crucial role in the development of the organization. Goals must be set to provide various services and incentives for them in order to induce them to give their best efforts towards the development of the company. Examples of employee goals include incentives, bonus, health and life insurance services, company housing for certain employees etc. These incentives and add-ons drive employees towards better effort and efficient work. Soft goals include Community goals and Environment Goals. Community goals are concerned with the organization’s contribution to community welfare, culture etc. Organizations must set specific goals to ensure that they benefit the community and society that they operate in. The setting of these goals is important for the development of the organization within the community. Responsible political involvement and action is an example of community goals. Environmental goals are concerned with the contributions that the organization makes towards the environment or the efforts taken by them to safeguard the same. These goals can range from reduction of harmful emissions into the environment, proper waste disposal to creating awareness programs to safeguarding the environment and training of the employees in environmental preservation. The next part of the paper will determine how the hard and soft goals of the organization may be weighted or treated differently for an expat employee as opposed to a local employee in the home country. Human resource management at all levels, that is handling both local and expat employees is important for the success of the organization. Certain management philosophies and techniques have been applied to managing domestic employees. However, applying the same philosophies and techniques while managing expatriate employees has often resulted in frustration and failure. Likewise the hard goals and soft goals of the organization are weighted and treated differently for local and expatriate employees. Some of the issues that the organization must consider when setting their hard and soft goals with respect to expatriate employees include international taxation, relocation and orientation, administrative services, expat-government relations, language translation services etc. These issues differ widely between expat and local employees (Dowling, Welch & Engle, 2008). Firstly, with respect to financial goals, expatriates are subject to international taxation and most often have to deal with both domestic (home country) as well as host country tax liabilities. Tax equalization policies must be planned and designed to ensure that there is no specific tax incentive or disincentive coupled with the international assignment given to the expatriate. The financial goals of the organization must include provisions for the planning and incorporation of tax equalization policies. Furthermore, the administration of these tax equalization policies is complex due to the wide variations in tax laws across countries and the possible time-lag between the settlement of domestic and international tax liabilities and the completion of the assignment by the expatriate. For this purpose many organizations take up the services of large accounting firms for advice on international taxation. This must also be taken into account when setting financial goals. Along with taxation issues, the salary and allowances to be given to the expatriate must also be considered and decided upon. Financial goals must also consider salary and allowances of expat employees. The same issue of international taxation does not apply to local employees as they come under the local taxation laws and liabilities. No specific equalization plans or policies need to be devised for local employees. The next hard goal to be considered is that of operations. The various units of the organization must consider the factors of international relocation and orientation of expat employees when formulating operational goals. The various departments in the organization must prepare and arrange for immigration and travel details of expat employees, provide for medical care and arrange for their training etc. Relocation will involve a significant amount of training and this must be a part of the operational goals of the organization. The same will not be applicable for local employees. It may be applicable on a smaller level with respect to local relocations and transfers. But it will not require the training and immigration arrangements which are of essence to an expat employee. Another factor that must be part of the operational goals with respect to expat employees is the administrative services that are to be offered. Providing these can be very complex and time consuming as policies and procedures may often be conflicting between the home country and the host country. What is required in the home country may be considered unethical in the host country. These factors must be taken into consideration when formulating operational goals. The next hard goal is that of employee goals. Employee goals aim at providing incentives and add-ons to employees in order to induce them to perform. When formulating employee goals certain factors must be taken into consideration with respect to expatriate employees. International relocation means that arrangements have to be made for expat employees for the provision of housing facilities, information and orientation regarding medical care that is available, recreation facilities and arrangements for schooling for children of employees. The same kinds of arrangements are not required for local employees. Information regarding schools, shopping, housing etc is not generally necessary for local employees. This distinction must be kept in mind when formulating employee goals. Additionally the level of involvement in employee’s personal lives is greater with respect to expat employees when compared to local employees. The organization must ensure that expatriate employees understand housing and health care arrangements, all aspects of the compensation package, etc. For expat employees the organization must be more involved in the personal life of the employee to provide the degree of support required. In the case of domestic employees however, the level of involvement of the organization in the personal life of the employee is highly limited. The firm may extend its arm only as far as providing health insurance programs or assistance during local transfers. Predominantly involvement in local employees’ personal life is restricted. Provision of language translation services is another aspect that may need to be provided for expat employees but is often absent for local employees. The next hard goal is safety. Safety is one of the most important aspects that must be considered when engaging expatriate employees. Terrorism is one of the major concerns of large organizations and expatriate employees. Terrorism and the risk that comes with it must be considered when formulating safety goals for employees. Emergency evacuation procedures, health measures etc have to be considered by organizations for their expat employees. While terrorism is also a point of concern for domestic employees, it is more so for expat employees as the organization is answerable to the expat government on the issue of his safety. With respect to soft goals, community goals are of vital importance with respect to expat employees. The organization must exhibit responsible political action by developing a cordial relationship with the government of the expat employee. Maintain good relationships with the expat employee’s country’s government will aid in resolving potential issues that can be caused due to ambiguous eligibility issues, compliance criteria for documentations, for example work permits etc. Cultural awareness is another important factor that must be taken into account when forming community goals. The organization must take it upon itself to ensure cultural awareness amongst its expat employees and orient them with the practices of the home country to prevent any dilemmas for senior officers and managers. Thus the hard and soft goals of the organization are weighted and treated differently for expatriate employees and local domestic employees. The above factors must be taken into consideration when formulating organization goals, especially with respect to expat employees. Examples of the above policy differences and differences in hard and soft goals between domestic and expatriate employees can be seen in many organizations across the world. Expat employees are given many additional benefits, add-ons and separate policies by many organizations. Companies are slowly recognizing the importance of sending at least a handful of expatriate employees into key markets and hence are altering their policies by offering lucrative salaries, tax benefits, and other benefit packages to those expat employees. According to Cheryl Spielman, “Companies that took a one-policy-fits-all approach to assigning expat packages are now considering separate policies tailored to the type of role expats are performing and the benefit the company reaps from the assignment.” According to Ashley Daly, senior manager for international assignments these benefit packages are necessary for the expat family to settle into the home country and without this kind of support, it is not possible for an expat employee to focus on the new job thus putting at risk the return on investment for the company (Ainsworth, 2009). International organizations such as Whirlpool, Arthur Andersen & Co., Westinghouse Electric Co etc., have greater percentage of success rates with respect to expat employees. These organizations have policies that prepare their expatriates. Firstly they supply expatriates with detailed information regarding tax liabilities, stock options etc. Secondly, they give all details regarding compensation packages, salary and allowances and other benefits. Thirdly they provide a short orientation session for the expat employees regarding the home country’s culture, its customs etc. Fourthly, they pay for a site visit to the home country for the employee and spouse to get a feel of the country, co-workers, living spaces etc. And lastly, they supply an appropriate outlet to expend his or her energy. The above five procedures or policies have ensured the successful handling of expatriate employees by these organizations (Oddou, 1991). Another example of the differentiation in policies and hard and soft golas between local and expatriate employees can be seen in the case of Carnegie Mellon. The Carnegie Mellon benefits program for expatriate employees includes medical care, prescription drugs, dental and vision care, long-term disability coverage, life insurance for the employee and dependents, and accidental death and dismemberment coverage. Other benefits include retirement schemes, tuition remissions, employee assistance programs, paid time off and paid holidays. Depending on the expat employee’s taxing status some United States mandatory benefits such as unemployment compensation, workers’ compensation and social security (Carnegie Mellon, 2008). The same benefits are not normally available to local employees. While domestic employees enjoy certain benefits such as life or health insurance, medical care etc., the extent of benefit programs offered to expat employees is much greater. In conclusion it can be said the organizations and human resource managers compete in competitive environments and markets where the levels of challenge for carrying on a business is constantly variable. The techniques and philosophies used to manage local or domestic employees is not the same as the techniques for managing expatriate employees. Hard and soft goals of the organizations are weighted differently depending upon whether an employee is domestic or expatriate. The application of the right techniques and goals for the right kind of employee is a critical success factor in any business venture. Hence, instead of a single policy for all employees, policy and goal variations based on what is expected of the employee are most crucial for the success of the organization. This alone will ensure employee development and subsequently organizational growth. References Ainsworth, S (2009). Expatriate Programs. Chemical and Engineering News. Retrieved July 24, 2009. http://pubs.acs.org/cen/employment/87/8714employment.html Blazey, M L (2004). nsights to Performance Excellence 2008: An Inside Look at the 2008 Baldrige Award Criteria. American Society for Qualit, 2004. Carnegie Mellon (2008). 2008 Benefits Overview. Retrieved July 24, 2009. http://www.cmu.edu/hr/international/forms/INTbk08.pdf Dowling, P & Welch, D E & Engle, A D (2008). International Human Resource Management: Managing People in a Multinational Context. Cengage Learning EMEA, 2008. p 1-19 Goldratt and Cox, (1992). The Goal: A Process of Ongoing Improvement. North River Press, 1992 Hosford-Dunn, H & Roeser, R J & Valente, M (2000). Audiology: Practice Management. Thieme, 2000. p 62,63 Max, D and Bacal, R (2004). Perfect Phrases for Setting Performance Goals: Hundreds of Ready-to-use Goals for Any Performance Plan or Review. McGraw-Hill Professional, 2004. Miltenburg, J (2005). Manufacturing Strategy: How to Formulate and Implement a Winning Plan. Productivity Press, 2005. p 216, 217 Oddou, G R (1991). Managing Your Expatriates: hat Successful Firms Do. All Business website. Retrieved July 24, 2009. http://www.allbusiness.com/government/employment-regulations-foreign-employees/277795-1.html Wimmer, M A (2004). Knowledge Management in Electronic Government: 5th IFIP International Working Conference. Springer, 2004. p 153 Read More