Impact of Globalisation upon HRM Policies - Essay Example

Impact of Globalisation upon HRM Policies Table of Contents Introduction 3 Globalisation Leading to Standardised HRM 3 Relationship between Standardisation and Globalisation 4 Relevance of Standardisation Activities 5 National Differences in HRM 5 Culture Effecting National Differences 6 Institutions Effecting National Differences 7 Conclusion 7 Reference List 9 Bibliography 10 Introduction In the emerging era of globalisation, practices and strategies of the human resource management has evolved in many innovative directions. Many new developments have become possible through globalisation, but in addition, it has left concerns for the human resource management. The technological changes and the changes in the business environment due to globalisation have increased the vitality of standardisation in the human resource management (Kossek, Lobel and Brown, 2006). The operation of the human resource management needs to be flexible as per the changing trends of the globalised market (Gomez-Mejia, Balkin and Cardy, 2004). The human resource management requires fighting for the values, ethics, culture, in their organizations, especially in case of diversified working environment which takes place due to globalisation. Fluctuations in the economy, global advancement, workforce diversity and rapidly transforming business as a result of globalisation tend to generate many new challenges for human resource management. Recruitment and management of diversified workforce and checking the availability of skilled labour is another challenge faced by the human resource management. The objective of the study is to analyse how globalisation is leading to adopt standardised human resource management (HRM). The aim is to study the extent of national differences in human resource management as explained by culture and institutions and then draw a conclusion to the study. Globalisation Leading to Standardised HRM There lies a significant relationship between globalisation and standardisation. Standardisation of the human resource practices are considered much important and are considered as one of the most critical elements at workplace in the area of globalisation. The concept of globalisation existed for the past several years, but in recent scenario introduction of various technologies has led to the acceleration of globalisation (Friedman, 2007). In order to survive in the global competitive market human resource management is considered to be necessary. The requirement of structuring human resource systems worldwide has mandated the adoption of standardised policies and practices in the global businesses. There exists a lack of awareness in the field of awareness. In discussing issues relating to standardisation in the global organizations, it becomes very obvious for the executives to exhibit lack of awareness in understanding the critical needs of standardisation. Standardisation is evaluated as the vital component in the foundation of globalisation (Edwards and Rees, 2006). Globalisation of organization demands a much enhanced quality of performance of the firm’s products and services throughout the world and hence leading to a standardised human resource management. International firms needs to create standards for their products and services in addressing complex issues that crop up due to performing business worldwide. Global human resource management has identified the needs of implementing standards for developing best practices to survive in the global competitive market. Relationship between Standardisation and Globalisation Increasing globalisation has put forward many challenges in application of management approaches by the multinational companies. In order to address issues arising from globalisation, it is necessary for the human resource management to design standardised human recourse management systems that in turn will help in balancing both local receptiveness and global amalgamation (Ahmad and Schroeder, 2003). The human resource managers need to standardise the remunerations and the conditions of employment of all mangers in managing every operations of an organization. Globalisation comes with the needs of standardisation, of the various operations of a multinational company. Various issues arising out of globalisation are explored such as existence of cultural differences among employees, the relevance of enhancing international human resource management and adaptation of various strategies in retaining employees in culturally diversified workforce. Hence, the importance of implementing standardisation goes in hand with the globalisation. Arising complexities in various aspects of a globalised business justify the relevance of developing standards for enhancing the global business worldwide (Farazmand, 2004). The human resource managers deal with the issues of employees belonging to more than one national group. A standardised policy that needs to be adopted in the global scenario requires being consistent in accordance with the overall strategies and structures of multinational companies. The standardised policies need to facilitate the transfer of global employees in a very cost effective way for the global firm. How effectively a global company uses its standardised policies will directly showcase the betterment in its worldwide operations and in retaining culturally diverse staff. The standards that are created needs to be reviewed at least once in every five years in order to check the efficient applicability and results of implementing those standards. The major aspects that are required to be standardised are pay and conditions of employment, as these factors could lead to arising of numerous problems which remain unnoticed. Standardisation should be considered the central part of the practices and strategies implemented in enhancing the human resource management practices (Frenkel and Kuruvilla, 2002). Relevance of Standardisation Activities The important issue is concerned with the human resource management in understanding if there is any need of creating new international standards that provides best practices in order to apply worldwide. Standards come into existence with respect to various needs of a multinational organization. If those specific needs are not addressed then it becomes much expensive to set standards. Creation and implementation of new international standards are vital in managing the diverse workforce and businesses of a multinational firm. Another perspective of international standardisation is to satisfy the needs of the employees and prioritizing their issues and requirements in order to survive the global market. Creating organizational standards offers effective methods in enhancing the management of the human resource, deriving an environment that motivates the employees to provide best results in accomplishing the organizational goals. Standardisation is thought to be a remedy to overbearing inefficiencies that comes into existence from the activities where self awareness risk aversion can devastate the flexibility of contemporary marketplace. Strategies adopted in relation with the standardisation contribute in balancing flexibility with global diversification (Warner, 2002). Standardisation is bound to impact on each organization that operates their business globally. In order to be efficient globally, the management needs to take up the responsibilities in maintaining and implementing new standards in the world driven by changes with respect to globalization. The human resource policies and practices needs to be standardised and the needs of standardisation in effective human resource management should be considered vital. The goal of the organization of the multinational companies should be to develop the most widespread standard for human resource management for effectively managing the human resource, maintaining peaceful environment among diversified workforce and in order to enhance their global operations (Black and Lynch, 2001). National Differences in HRM The nature of human resource management varies in diverse national and regional conditions. The human resource management and practices are highly influenced by the cultural variables which include national and organizational culture, dynamics related to the industrial sector (Budhwar and Sparrow, 2002). Also, the variables not relating to cultures such as age, nature, belief and the changes of the organizational life cycle are considered by the human resource management. Standardization policies take into consideration these factors for efficient operation of the business and to maintain productive working environment for the employees. These factors change in various regions and countries and hence create complexity in the cross national concept. The multinational companies need to balance the pressure in developing standardised policies which are used to handle the adverse affects of the national differences in the human resource management. The national differences have a wide impact in choosing the human resources management strategies and practices in the multinational companies. The multinational companies have drawn attention towards the influence of parent country on right selection of human resource management strategies (Burke and Ng, 2006). The international human resource management focuses on the disparity between various national models instead of explaining the practice through which the origin of country influences human resource management strategies (Burke and Ng, 2006). The culture of the nation affects human resource management. The issues arising from the national differences in human resource management affects the process of implementation of efficient standardisation policies. These factors needs to be monitored and the national differences should be brought on a serious note in developing the effective and profitable standards. Culture Effecting National Differences Culture is a term which is widely recognised. It deals with the mental programs commonly shared by various groups and that impact their responses towards the situation. Culture takes into consideration the values, beliefs and assumptions regarding the suitable behaviour that are shared by the people in a society (Schuler and Jackson, 2008). In a global organization, the employees belonging to various cultures have an effect on the practices of the human resource management. The varied national cultures have an influence on the organizational behaviour and also in the practices of the human resource management. The cultural perspective comprises of the cultural differences and the shared values of the community. The migration of people across the national borders and conservation of specified groups with specific customs along with the variation in social experiences highlights the existence of the subcultures in many countries. Another way of understanding the influence of cultural differences is through paying close attention to low context and high context societies. In the high context societies, the external surroundings and non verbal cues are considered vital in the communication route. Culture relating to low context appreciates much understandable, unambiguous and written forms of communication. The implications of these various contexts of culture are determined as evident for the administrative attitudes and organisational performance. Cultural differences are infused within the frames of reference of the managers and these differences are considered vital by the human resource management in setting of standards. Institutions Effecting National Differences In this era of globalization, the viability of the existing institutional arrangements is being questioned. The institutional factors have an impact on the practices of the international human resource management. Employees are often considered as liabilities or even as the disposable resources with the human resource practices (Bamberger, Biron and Meshoulam, 2014). These perception needs to be minimised by the human resource management in order to set up standards for the betterment of the organization and its employees. In the global enterprises, there has been found a frequent movement of labours within the organizations and hence the focus should be on the flexible deployment of staff. The management teams are considered to be in charge of taking responsibilities in controlling the ample aspects of the international human resource management. Standardisation should be with respect to the human resource principles that are in alignment with the liberal market economies (Quintanilla and Ferner, 2003). The international human resource management should highlight on the factors associated with the liberal market economies such as freedom of managing, stress on the short term competition, flexible operation of staff and payment in accordance to the employees’ performance. Institutional analysis facilitates the in depth understanding of the incorporate determinants of the human resource management’s policies and practices worldwide. The related approach in caliberating national diversity needs to be accompanied by the specific academic terms. The business system is considered to be an imperfect device in explaining national variations in the human resource practices. The concept of national business system obscures non public institutional variations like the ones existing between various corporate cultures within the states of a nation or the merging of institutions by regional union. The institutional perspectives hence casts light on the existence of national differences within the management which needs to be handled effectively by the human resource managers (Wright, Snell and Dyer, 2005). Conclusion By conducting an in depth study, an idea can be drawn regarding the contemporary issues incorporated in the human resource practices of the multinational companies. Analysis of the issues provides an idea regarding the importance of standardisation in addressing these issues. It can also be understood how the cultural norms impact on the global company’s managements strategies. It is clear from the study that the various determinants including the national cultural factors influence the model and implementation of various standardisation policies. Globalisation has a tremendous impact on standardisation. Standardisation is an essential concept to be understood by the international human resource managers in order to manage their culturally diversified workforce. Human resource management standardisation will lead the global firms to gain prosperity and sustain the highly competitive global market. It can also be concluded that the standardisation eases out the operations of the management, increases the mobility of the workforce, leads to reduction in various operating costs and the system becomes highly transparent. A high level of standardisation should be expected by the global organizations in effective managing of their operations worldwide. The major barriers to the standardisation beyond the external requirements need to be overcome by the multinational companies and in addition they require adapting the domestic processes. The barriers tend to rise when the employees from various cultural backgrounds follow the same values they used to follow in their respective countries unless they are made aware of the organizations values. 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