International Human Resource Management Practices and Performance

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Table of Contents

Introduction
HRM practices and performance
Building HRM
Realigning HRM
Steering via HRM
Consistency in organization
Human resource methods of improving performance
Conclusion
List of References

Introduction

Human resource management is the aspect of management that deals with the recruitment, training and providing direction for employees. It also deals with the communication, compensation, performance management, and organizational development among other functions.

For any organization to perform effectively, there must be an active human resource manager who gives out the company’s directions for the achievement of its organizational goals and objectives.

International human resource management is the organization of human resources of a firm internationally in order to achieve the goals of the organization and to be competitive internationally.

International human resource management includes the basic human resources functions, global skills, and expatriate management. Performance is a general word that means productivity, effectiveness, efficiency and competitive capacity of the firm. Designing and integrating human resources function ensures the creation of value to customers and helps in sustaining customers’ effectiveness (Khatri 2000, p. 340).

HRM practices and performance

Scholars studying the international human resource management focus only on the human resource management practices. They provide the concept that the strategic process helps to balance the international and local standardization and adoption of the human resource management systems.

Coordination of the international human resource management practices with the strategic management practices enables an organization to win a competitive edge. According to Evan et al, there must be communication, learning and social presence for the coordination of these two practices to yield the desired results.

An international organization’s ability to identify the opportunities and the challenges in the industry and in the market in which it operates enables it to apply innovative practices to maintain or improve its position in the market. Therefore, the human resource management practices contribute to the productivity of any international and local organization (Guest 1997, p. 276).

International organizations should be able to operate in the competitive environment and balance the diverse economic, social and political factors with the requirement of the market in which they operate. Human resource management practices are largely involved in the performance of the firm. Like in the Japanese firms they believed that their performance depends on the effort of the human resource managers.

A research that was done in the some Indians hotels also supported that the practices of the human resource management positively affect the performance of the firm. The culture and context of the organization clearly show the importance of HRM when it comes to the productivity of the firm.

According to the research done on most international firms, there are three stages that show the contribution of the HRM to the performance of the firm. These stages are, building HRM, realigning HRM, and steering via HRM (Fahy 2002, p.77).

Building HRM

This involves putting the human resource management functions into practice. This involves the responsibilities of each person in the department. The efforts of the human resources management may reward by improving the performance and the profitability of the firm if the practices are consistent.

The methods of compensation, selection, development and motivation must be linked to the elements of the firm such as the technology, the measurement and supervisory systems. The international organizations must link these factors with the differences in culture, the partners of the labor market and the legislative constraints (Ortiz & Fernandez 2005, p.79).

Before an organization ventures internationally, it must be able to build a good foundation of the human resource management to enable it to cope with the cultural and other factors that might affect the organization in an internal market. The human resource foundation puts the organization in a better place when it comes to entering into the alliances with other foreign companies.

The partners from foreign companies may wary of entering into alliances with the companies which do not show any concrete strategies of management of resources (Dowling, Festing & Engle 2008, p.102).

A clear foundation of each company can help them enter into an alliance easily since they will be able to merge their different approaches into a workable strategy. Getting the right personnel which is the work of the human resources management also increases the productivity of the individual (Ozcelik & Ferman 2006, p. 45).

If, for example, a person is given a duty in the accounting department and he/she has no basic skills of accounting, the person is prone to stress in the process of struggling to give the required results. On the contrary, if the person has the required skills to perform the job, he/she will be very excited since the duty is within the area of interest.

If a person is happy with the job he/she is doing, the results of the job will be excellent, but if the person is not happy with the duties given to them, the results of the work will just bring down the productivity of the organization. Poor human resources management costs the firm its productivity and competitiveness (Chelladurai 2006, p.54).

Realigning HRM

According to Wood & Payne (1998, p.234), the organizations need to frequently update their processes with the changes in the market. This enables them to meet the demands of the external environment. The market factors, like the technology needs the organizations are to change or expand their strategies.

Therefore, it calls for the restructuring of the human resource management to help the company to implement the new strategies to meet the external demand. The organization productivity may be affected negatively if the external factors change without the change in the human resources management (Ash ridge 2008, p.45).

Human resources management requires changing some of the firm practices for better achievement of the strategic goals and the objectives. Realignment is very important for the company to fit in the international context or in the market context. The processes of matching the organization with the internal and the external demands may affect the consistency of the practices of the firm.

Strategies of the organization need to be changed for it to fit in the environment, therefore some of the human resource management practices change to boost the performance. For better results of changing, the organization must form a coalition between the workers and the management team for everyone to accept the changes.

The visions should be well understood by the employees for them to accept the changes easily. Therefore the employees should be made aware of the gap that is existing between the current performance and the expected performance. This will promote hard work towards achieving the goals (Sumner & Manchester 2006, p.34).

Steering via HRM

Tension can be experienced within the firm if some changes are made. There are some employees who are always resistant to change even if the change is for their benefit or for the benefit of the firm.

The human resources management must come up with the strategies to reduce the tension and the dualities that might influence the performance of the whole organization negatively. For an international organization, this change must be focused on the cultural differences and the legislative rules to ensure that they do not affect the productivity of the firm (Ordiz & Fernandez 2005, p.1350).

According to Barney (1991, p.70), the growth of the companies internationally may be through leverage strategies or learning strategies. In leverage strategies, they are able to utilize their initial countries gained capabilities to be competitive in the international market. The learning strategies, they are able to learn about the new market through alliances or the joint ventures.

The firm can also manage the development and the leverage through the transnational strategies which involves technological development. Due to the frequent changes in technology, competition, professional services and other external factors, it is becoming easier for the organizations to predict and anticipate the future changes within the market (Aswathappa & Dash 2007, p.54).

Consistency in organization

The organizations must be consistent in their practices. For example, if the company invests in the training programs and seminars for the employees, they must be in a position to retain the trained personnel either through compensation, feedback or the career management practices. People should have enough skills to be worth retaining.

The people may feel that they are not treated fairly if the motivation and compensation in the organization are not consistent. Single-employee, consistency among-employee, and the temporal consistency are the three methods testing consistency in the organization. Single employee consistency checks whether the employee gets different elements of human resource.

Consistency among employees tests whether the employees who works in different departments, but perform the same roles are treated in a fair manner. The international firms mostly use it in their assessment. The last one which is the temporal consistency which shows that the changes made in the organization’s policies can lead to frustrations.

HRM strategies must be consistent to positively reflect on the productivity of the firm. That is how the human resource management practices assist in increasing the firms’ performance (Harzing & Ruysseveldt 2004, p. 119).

Human resource methods of improving performance

Selection is the process of choosing the right candidate to do a certain job in an organization. For a selection function to be done, it shows that there are many people who present themselves for the job. For a job seeker to apply for any job, they must meet the minimum requirements for that job. The selection team must choose the person with the ability to perform the job effectively.

Human resource managers in international companies should choose people who have the skills, ability education and experience identified in the descriptions of that particular job (Harel & Tzafir 1999, p. 190). Therefore, the selection function of human resource management deals with matching the job description with the qualification of a person.

The managers must have a plan to identify whether the person meets the requirement for the job. In multinational companies, recruitment teams must ensure that the person has the necessary skills to perform an international task and that the person is able to improve the company’s performance globally (Fahy 2002, p. 67).

Training increases the morale of employees in that they get job satisfaction and job security. When an employee is satisfied, he/she contributes to the success of the organization. The morale of a satisfied employee prevents him/her from leaving the firm thereby increasing the employee’s loyalty. When employees are trained, they do not need supervision and therefore they reduce time wastage during supervision.

When an employee is trained, he/she becomes an asset for the organization because he acquires skills that make him eligible for promotion. Training also increases the productivity and efficiency of the employee. Trained employees reduce waste of money and resources of the company.

An efficient human resources manager ensures that employees are well trained before giving them any responsibilities in order to add the productivity of the employee. The human resource manager organizes for the cost effective training of employees to reduce the cost.

Human resource managers can assign challenging responsibilities to employees to make them utilize their knowledge and skills for better performance of the job (Ash ridge 2008, p.45).

Incentives, which are additional benefits given to employees in recognition of their hard work also increases the productivity of these employees. Job security, satisfaction and promotion are some of the drives to better performance of the firm. Incentives enhance the commitment of employees to their work, which improves the performance of the whole organization.

They also help in shaping the behavior or outlook of a person and boost the zeal towards performance at their workplace. Human resource managers who use incentives to motivate their employees get good performance from motivated employees. The incentives can be monetary or non-monetary. Monetary incentives are those incentives that the human resource managers provide rewards in terms of money.

These incentives provide employees with security, and social needs satisfaction improves their performance and the performance of the whole organization. Non-monetary incentives satisfy the ego and self-actualization needs of employees.

They include the security of the services, praise and recognition for good performance, promotion opportunities and job enrichment. In their planning, the human resource managers should include incentives as a method of motivating employees towards achieving the objectives of the firm (Harzing & Ruysseveldt 2004, p. 123).

Human resource managers should be able to observe that the employees are de-motivated and discuss with them the ways they would like to be motivated. Training should be done frequently to ensure employees are updated on ways to make the firm productive. Employees who are highly competent tend to enjoy their work and demonstrate a high level of productivity (Brewster, Sparrow, Vernon & Houldsworth 2011, p.46).

According to Arthur (1994, p. 678), the human resource manager must be an effective leader to influence employees to perform well in order to improve the performance of the firm. The manager should be able to set an example to other employees in that he/she should give clear direction to employees to follow. The employees must be encouraged to cope with each other’s differences and embrace diversity in the organization.

Human resources managers should not be very dominant and obsessed with the achievement of the organizational goals. This is because if they become too strict on their employees, they may put them under pressure and interfere with the performance of the organization (Rusli 2007, p.123).

Motivation is a broad factor that the human resources managers use to increase the productivity of the firm. The human resources managers fist identify the needs of the employees then imposes benefits to meet them. They also set targets for every employee to act as the driving factor towards the performance of the firm. Motivation creates an environment that guarantees maximum productivity.

A human resources manager should be in a position to identify the motivating factor for their employees since each person have their own motivating factors. Some employees are motivated by recognition and others are motivated by incentives. Employee motivation should be increased as recognition or incentives increase the productivity (Paauwe & Boselie 2005, p.70).

Conclusion

Employee’s commitment, job satisfaction, and motivation are the most important human resource approaches that are used to improve the firm’s performance. The employees also feel that they should be valued as assets of the organizations since they use their knowledge and skills for the success of the firm.

The employees are also the source of competitive advantage for the firm in which they work and this contributes to the growth of the organization. Through employees’ collaboration, trust efforts yield good economic performance of the organization (Backer & Gerhart 1996, p.779).

Before an organization enters into international market, they have to build a good foundation of human resources management for it to cope with the changes that might occur in external markets. Building, realigning and steering of human resources management, are the stages which explains the responsibilities which the human resource managers have to improve the performance of the firm internationally.

Restructuring of the organization’s strategies is a requirement in entering international markets. Consistency in the performance of the employees in al department iis required for the success of the organization internationally (Wood & Payne 1998, p.233),.

The employees who go behold their call of duty must be recognized and motivated further since they increase the productivity of the firm. The human resource managers should employ different types of motivation as discussed with the employees.

The managers should also promote direct communication with their employees. Communication reduces the conflicts, fear and a mistake that may occur in the job place and promote the productivity of the organization (Dyer & Reeves 1995, p.660).

List of References

Arthur, J 1994, ‘Effects of human resource systems on manufacturing performance and turnover’, Academy of Management Journal, vol.37, no.2, pp.670-687.

Ashridge, S 2008, Developing the global leader of tomorrow, Hertfortshire, London.

Aswathappa, J & Dash, W 2007, International human resource management, Tata McGraw-Hill Noida,New Delhi.

Backer, B & Gerhart, B 1996, ‘The impact of human resource management on organizational performance: progress and prospects’, Academy of Management Journal, vol.39, no.3, pp.779-801.

Barney, J 1991, ‘Firm resources and sustained competitive advantage’, Journal of Management, vol.17, no.1, pp.99-120.

Brewster, C, Sparrow, P, Vernon, G & Houldsworth, L 2011, International HRM, CIPD, Wimbledon.

Chelladurai, P 2006, Human resource management in sport and recreation, Human Kinetics, Illinois.

Dowling, P, Festing, M & Engle, A 2008, International human resource management, Thomson, London.

Dyer, L & Reeves, T 1995, ‘Human resource strategies and firm Performance: what do we know and where do we need to go’, The International Journal of Human Resource Management, vol.6, no.3, pp.656-670.

Fahy, J 2002, ‘A resource based analysis of sustainable competitive advantage in a global environment’, International Business Review, vol.11, pp.57-78.

Guest, D1997, ‘Human resource management, and performance, a review and research agenda’, International Journal of Human Resource Management, vol.8, no.15, pp. 263-276.

Harel, G & Tzafir, S 1999, ‘The effect of HRM practices on the perceptions of organizational and market performance of the firm’, Human Resource Management, vol.38, no.9, pp.185-200.

Harzing, A & Ruysseveldt, J 2004, International human resource, Sage, London.

Khatri, N 2000, ‘Managing human resource for competitive advantage: a study of companies in Singapore’, International Journal of HRM, vol.11, pp.336-365.

Ortiz, M & Fernandez, E 2005, ‘Influence of the sector and the environment on human resource practice effectiveness’, International Journal of Human Resource Management, vol.16, pp.1349-1373.

Ozcelik, G & Ferman, M 2006, ‘Competency approach to HRM, outcomes and contributions in a Turkish cultural context’, Human Resource Development Review, vol.5, pp.72-91.

Paauwe, J & Boselie, P 2005, ‘HRM and performance: What’s next?’ Human Resource Management Journal, vol.15, pp.68-83.

Rusli, A 2007, Employees appraisal: everything you have always wanted, Lee Ming Press Sdn. Bhd, Sarawak.

Sumner, J & Manchester, A 2006, Engaging Employees in Corporate Responsibility: How the World’sLeading Companies Embed CR in Employee Decision-making, Melcrum Pub., London.

Wood, R & Payne, T 1998, Competency based Recruitment and Selection, John Wiley & Sons, Chichester.

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