Human Resource Management in the Context of Globalization in India - Essay Example

Name : xxxxxxxxxxx Institution : xxxxxxxxxxx Title : Employment relations Tutor : xxxxxxxxxxx Course : xxxxxxxxxxx @2010 Table of Contents Title : Employment relations 1 Table of Contents 2 Introduction 3 Globalization and employment relations 3 Human resource management in the context of globalization in India 6 Employment relations and human resource management 7 Human resource management issues and challenges in international markets 8 Employer’s response 11 Trade unions response 13 Conclusion 15 Bibliography 16 Introduction Employment relations refer to those practices and policies concerned with regulation and management of relationships between the individual staff members and the organization within the work place. According to Schuler (2006), a sound employment relation is based on effective and safe work environment, motivation, and commitment of staff and effective systems for participation and communication. Employment relations are influenced by the government along with its agencies via laws, institutions, policies, programmes, and laws and by the broader economic, social, political, cultural, and technological characteristics of every country. The outcomes of employment relations are a set of laws which pertain to work, laying down wages and conditions and terms of employment for the staff. The employment conditions may include working hours, training, leave together with issues which relate to occupational health and safety, and conditions that apply to particular groups of workers. The laws also describe the responsibilities and roles of parties, collectively and individually through joint labour agreements, and through legislation. Globalization and employment relations Globalization can be defined as a practice in which local societies, cultures, and economies have been incorporated via a global system of transportation, trade, and communication. Blanpain (2007) states the term is at times to specifically define economic globalization which is the incorporation of countrywide economies into worldwide economy through capital flows, direct foreign investment, trade, migration, and technology. Globalization promotes competition both at firm’s level and nation’s level. This leads the state and management to employ plans designed to raise effectiveness of labor in order to benefit from human capital (Som, 2008). Nevertheless, the influence of globalization on employment relations and substantive results is conditional. Pressure for superior flexibility in exploitation of labor is ubiquitous although the result is controlled by cultural customs valuing security and hierarchy. The strategies used by different countries differ by historical conditions, resource endowments, and interior political forces comprising the effect of trade unions. Reduction in costs of communication and a fast technological change have enhanced globalization of financial markets and production. Globalization has led to more deregulation and liberalization, rivalry for competition and enlarged economic independence for nations. There is an increase in technology, information, and capital flows. Competitiveness is being based on innovation and knowledge productivity and skills and not upon natural resources and wages. The victory of international firms is to a great extent reliant on their capability to organize between and within organizations and across nationwide boundaries information, people, and money. Supporters of globalization dispute that expanded direct foreign investment and free trade increases earnings and employment in developing and advanced nations. Critics uphold that globalization possess a deleterious impact on working conditions, wages and employment on most developing nations workers. This is as a result of rivalry by multinational companies and the discern opening of global markets to global trade in favor of advanced countries. The fresh demands of global competition and remarkable progress in technology as a result of forces of globalization have substantially changed the operation and nature of market place and management of production in industries in India. Individual firms are now required to innovate in order to offer the accurate product at a right price and right time. These conditions are placing significant demands on the employers along with their firms to come up and implement fresh processes, structures, and strategies. There is a progressively more tactical role for employment relations in the firms to significantly change the traditional practices and related fields of human resource management. This has resulted to change in the nature of employment relations and employment relations and human resource management practices had been directed at improving the skills and flexibility of labor force within an atmosphere which emphasizes trust, communication, and cooperation between workers representative, managers, and workers. Globalization is stressing the significance of employment relations to economic development and industrialization in India. Employers are the driving force of economic adjustments and their firms must take a plan to build up a change agenda that can offer these benefits. Employers and organizations are required to have a strategy which is directed at advancing employment relations and seeks alterations in behavior and attitude in workplace and tackles the main subjects of compensation, skills development, work flexibility, and organization along with cross cultural organization. Human resource management in the context of globalization in India The adoption of liberalizing and globalizing policies in India has led to huge fiscal deficits, great debt obligations, and depletion of forex reserves. The conservative Indian economy has become open to a great global participation. Globalization has led an increase in private sector participation within the globe market. Human resource management is faced with many challenges generated by globalization since it should be globally mind set for both the employees and the mangers. In order to meet the challenges, firms are required to identify human resource as a tactical business element. The human resource department must develop an environment of harmony in cooperation and diversity throughout the organization and a culture that has and an international approach (Sims, 2001). It is also required to recognize the necessity of developing a set of practices that meets the requirements of an organization everywhere and anywhere around the globe. The organizations and human resource management are required to train their workers in a manner that will enable them to effectively perform globally. As consequently, organizations have demonstrated a paradigm change on basis of employers and employment duties. Presently, there are many multinational companies, distant owned subsidiaries, and joint ventures in India. Similarly, a great number of companies of Indian origin are establishing bases internationally. More and more firms are performing across cultural and geographic boundaries and most of them have adapted a global reality in their functioning. They are developing human resource structures, services, and policies that are in support of globalization. Employment relations and human resource management The conventional emphasis of employment relations is to achieve communal at industry and national ranks which are followed by application to every enterprise. Human resource management directly focuses on the firm and tries to support the concerns of individual workers, managers, and clusters of staff around particular jointly agreed corporate goals, so as to attain competitive advantage in market place (Whalen, 2008). The principles underlying human resource practices and policies are fundamentally individualistic and usually concerned with exploiting the integration of the organization, workplace flexibility, quality, innovation, and efficiency and worker commitment. Therefore, substantial emphasis is placed on workers induction and selection, motivation and leadership, training and extrinsic and intrinsic rewards to promote group and individual performance. Human resource management portrays a defy to employment relations since it can work to undermine the position of trade unions at firm level through emphasizing the dominance of relationships between individual workers and managers. Human resource management issues and challenges in international markets The human resource management faces several challenges as a result of globalization process such as creating practices which needs to be consistently used in diverse location and offices while still sustaining the local practices and cultures and communicating steady corporate culture within the whole organization (Smith, 2002). In order to cope with these challenges, confirms are supposed to view the human resource position not only an administrative position but also as a strategic function. For firms to compete within the global market and organizations to prosper and survive in the world of globalization, they are supposed to be faster learning, faster moving and more flexible. As a result organizations are implementing unique training programs so as to prevent business loss as a consequence of promoting job satisfaction, cultural insensitivity, and retention of abroad employees and enabling newly employed workers to communicate with workmates abroad. The provision of training to workers not only assists in development of knowledge and skills but is motivates employees and acts as the building block for the success of the organization. International training programs include executive decorum for international transactions, Cross cultural transfer of technology, language training and international etiquette and presentation. Executive decorum for international transactions is a program that prepares executives for carrying out business internationally by training them on business manners in different cultures. Cross cultural transfer of technology is a program that demonstrates the way cultural values influence perspectives of technology and technological training. International etiquette and presentation is a program that demonstrates the right way of handling people with diplomacy and tact in different countries around the globe. Language training is a program trains employees on language needs of several countries to enhance global communication. Competition within a global market involves several factors and centralization of human resource action is crucial to empower workers for global tasks and promote global competitiveness. In order to achieve success within international market place, the challenge of every business in spite of its size is to have knowledge on corporate cultural diversities and investment in human capital. There are particular human resource management matters that are specific for the international enterprise. The main issues include selection and retaining of talented employees, staffing policies, development and training while encouraging workers to be creative and innovative in dealing with culture barriers and lawful frame work. Other factors include understanding and accepting the challenging of working and living in foreign countries, offering performance appraisals to overseas employees, management, and training development, labor relations and compensation packages. As a result of powers of globalization and technological changes which have changed business environment businesses are needed to strategically respond to the transformations taking place so as to progress and survive. Strategic human resource management entails adaptation and integration. Its concerns are to make sure that human resource management is completely integrated with that plan and strategic requirements of the organization and that human resource policies fit together with the across hierarchies and across strategy areas. It also ensures that human resource practices are accepted, adjusted, and applied by line employees and managers as a portion of their daily work. Strategic human resource management practices are proactive, macro oriented and sights human resources as investments or assets and not as expenses and they are linked to the performance of the organization and focuses on alignment of human resources with the strategy of the organization as a way of attaining competitive advantage (Schuler, 2006). Human resource professional have acquired four crucial competencies in order to be partners in the process of strategic management which include technical and professional knowledge, business competence, capability to manage transformation and integration competence. Professional competence entails the skill, expertise and knowledge required for selection, recruitment, compensation and training of staff locally and globally. Business competence is the total business experience human resource personnel has outside the practical human resource specialty and these capabilities are aimed at facilitating the implementation and selection of human resource practices and policies that fit with the unique characters of an organization including its structure, strategy, culture and size. These competencies enable the human resource staff to recognize the organizations business and understand the financial and economic abilities essential for making rational decisions that sustain the strategic plan of the company. Employer’s response Employers have responded in several ways to employment relation challenges and practices which have been brought about by globalization. Employers in India have moved production abroad in order to cut down costs and enhance sensitivity to regional and local market requirements. Employers have used out sourcing which is a process of contracting to a third party. Out sourcing enables a business to concentrate more on its central competencies and also makes labor more productive. Employers have introduced new technology in order push for a much more flexible and deregulated labor market (Williams, 2006). Employers have engaged employees in execution and design of work so as to meet the global market needs. They have also shifted their focus of communal bargaining from industry or nation level to enterprise level. Employers of an opinion that issues that pertains to employment relations such as supple working hours, work reorganization along with contractual planning and disburse for skills and performance are being increasingly related to workplace and must therefore be tackled at enterprise level. At times employers reduce employment terms by concession bargaining when an organization experience financial difficulties. One of significant response of employers is downsizing of workforce. Employers have also introduced downsizing in order to enhance flexibility in employment relations to expend the capability of firms to rapidly adapt to changes in market place. This has entailed part time jobs, and supple working hours. Employers have also used diverse forms of employment contracts in addition to the standard ones common to collective employment relations flexibility in purposes so that workers who have multi skills are not restricted to performance of a single task only (Blanpain, R., 2007). Employers have established a flexible pay model when pay is dependent on the performance of a group of employees, an individual and the entire company. Through technology diffusion, globalization has substantially expanded introduction of innovative technology. This contributed to re-organization of the systems of production and schemes of work such as, decreasing of narrow work categorization and differentiation lines between workers and employers convoyed by expertise enhancement required to perform work with a greater range of jobs. Employers have increased areas of employee engagement in the control, conception, and execution of work. They have greatly focused on workplace relationships and practices and policies that are conducive to better performance and motivation such as sharing of information and two way communications with their employees. The responses have led to increase in the need of employers to greatly invest in offering of incentives to workers, skills training in order to improve the skills of employees and for staff to responsible for their personal development. The competition produced by rapid changes in technology and globalization has generated chances for easily trainable and multi-skilled workers. Skills and knowledge have turned as the most significant issues that determine employment opportunities, quality, and productivity of flexibility which has made employers to focus on employees who have multi-skills and able to perform different jobs. Trade unions response Globalization has diverse effects on employees. Trade unions play an important role in India implementing, enforcing, and influencing rules to promote development and attain a just globalization. Trade unions are increasingly enlarging their agendas to include matters like engaging with global organizations so as to control their policies. As a result of the increasing force of multinational enterprises, trade unions have engaged in global social dialogue by International framework agreements, through organizing global campaigns and deepening and extending their collaboration at transnational level (Pillay, 2008). Increased incorporation of state economies in a solitary international market and the emergence of novel global systems of production have led to a stronger demand for coordination of international and national agendas of trade unions. Trade unions have campaigned for implementation of an efficient international and national framework of standards and rules to make sure that there is a greater market integrity and excellent corporate governance together with regulatory schemes to ensure efficient enforcement and implementation. This has ensured that when shareholders fail to achieve their responsibilities as holders, they are not able to regulate the performance of firms they invest in. In order to deal with the challenge of instilling a corporate responsibility of high standard, organizational directors are supposed to involve shareholders and several other stakeholders in determination of the objectives of the organization and offer sufficient supervision of executives who manage the business. International framework agreements are the main tools used by trade unions in social dialogues to establish rules that govern the behavior of transnational companies. The negotiations are held jointly by international union federations, companies, and trade unions which deal with several challenges generated by globalization. This model of international governance has enabled unions to expand efforts to incorporate sustainable development practices within their policies by lobbying global organizations and through establishing coalitions with nongovernmental organizations (Shelley& Calveley, 2007). Building networks among trade unions along international production schemes is an illustration of international cooperation. Unions are dealing with complicated and usually anti union human resource management plans at local level within international systems of production and have responded to intricate representational positions as a consequence of making decisions. Nevertheless, the idea of value chains also represents labour opportunities. In order to benefit from the opportunities, trade unions have developed plans with a perspective of bargaining and organizing collectively along value chains. Conclusion The impact of globalization in India has required organizations to adapt in order to make sure that there is improved economic flexibility and competitiveness and the overall effectiveness to respond to the changing global market circumstances. Organizations have used strategic human resource management strategies and have trained and equipped their employees with the necessary skills and knowledge essential in the competitive global market. Bibliography Som, A., 2008, Innovative HRM and corporate performance in context of economic liberalization, International journal of Human Resource Management, Vol. 19, 7. Sims, S., 2001, Changes and Challenges for the Human Resource Professional, Personnel Psychology Journal, (63)1, 243-245. Schuler, R., 2006, Strategic human resource management: Linking people with the needs of the business. Organizational Dynamics, 21(1). 18-32. Smith, I., 2002, Globalization, employment and the workplace: diverse impacts, Routledge Press, New York. Shelley, S., & Calveley, M., 2007, Learning with trade unions: a contemporary agenda in employment relations, Ashgate Publisher, UK. Williams, S., 2006, Contemporary employment relations: a critical introduction, Oxford University Press, Oxford. Blanpain, R., 2007, The global workplace: international and comparative employment law : cases and materials, Cambridge University Press, Cambridge. Pillay, D., 2008, Labour and the challenges of globalization: what prospects for transnational solidarity, Pluto Press, London. Holbeche, L., 2009, Aligning human resources and business strategy, Butterworth-Heinemann Publisher, New York. Whalen, C., 2008, New directions in the study of work and employment: revitalizing industrial relations as an academic enterprise, Edward Elgar Publisher, Massachusetts. Read More