The Kingdom of Saudi Arabia Human Resource Management

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Table of Contents

Introduction
HRM in the Kingdom of Saudi Arabia
Current Status of HRM
Structure of the Business
Macro-factors affecting the HRM Department
Conclusion
Works Cited

Introduction

In the wake of globalization, swift technological revolution, and the ever-shifting complexity of the human society, human resource management has become critical in the realization of organizational goals. This set of circumstances has forced many companies around the globe to revisit the role of strategic human resource management.

This paper discusses the strategic role of human resource management based on the different departments of the Kingdom of Saudi Arabia. It examines the current status of HRM in KSA by comparing the expectations of the investors with the existing macro-factors that influence the human resource departments.

It also provides insight into the economic, social, and cultural issues that affect the role of human resource management. It further elaborates the employment and labor laws, meso-organizational factors, the nature of businesses, organizational cultures, management styles, and micro-individual factors.

HRM in the Kingdom of Saudi Arabia

Most managers attest that human resource management is a set of procedures, practices, and policies that must be included in the entire organization. The success of the HRM department in any organization is seen in terms of the ability to promote investment, development, motivation, and performance improvement.

Managers must ensure that perfect recruitment, obligations on contract basis, training and motivation, proper planning, handling of employee welfare, and their grievances are handled in every department for the success of human resource management. Policies, procedures, and programs must be established and properly executed to boost performance. Work ethics must also be addressed at length without excluding any loopholes with a view of encouraging employee loyalty (Sims 3).

The strategic role of human resource management (HRM) departments in the Kingdom of Saudi Arabia (KSA) has been critical to the success of organizations within the region. This situation is underpinned by the fact that various multinational companies are increasing in Saudi Arabia. As a result, the current system of management has been shifting away from the traditional to Western ways of organization in the Kingdom (Sims 3).

Current Status of HRM

The current status of HRM in KSA is seen to be treading towards a shift whereby the inclusion of foreign workers in the management systems is on the rise. This situation has been noted due to the tremendous increase in the control of international oil companies and crude resources based in the Kingdom (Mababaya 34). Due to such funds for further investments, the country has undergone both social and economic development to encompass increased numbers of foreign employees.

A rise in the development in of the labor market has raised the need for skilled personnel. This situation has compelled the government of KSA to come up with plans to increase the number of foreign workers thereby calling for the implementation of a new human resource management system (Mababaya 33). The HRM practices in the country are shaped by the socio-economic factors in terms of economic landscape, political environment, labor structure, HR strategy, and culture at the national level.

The economy of the Saudi Kingdom is based on the oil production industry and its products that constitute about 95 percent of the country’s exports. It gives revenue of above 70 percent (Ramlall, Al-Amri, and Abdulghaffar 1155). At the face of the global trading, the government has invested significantly in the promotion of the free market economy.

Besides, it has strived to encourage the private sector to play its role in the control of the economy. However, this situation has been seen as the main factor hindering its tremendous improvement due to its tendency of holding and controlling the economic and social development procedures, policies, and activities (Ramlall, Al-Amri, and Abdulghaffar 1156).

The rules of trade and regulations of the economy are also controlled by the state. This state of affairs has only promoted monopoly as evidenced in the government-owned companies such as the Saudi ARAMCO Corp., Saudi Telephone Company (STC), and Saudi Basic Industries Corporation (SABIC) among others (Ramlall, Al-Amri, and Abdulghaffar 1156).

Regarding the political aspect, the country is an Islamic monarchy that heavily relies on a tribal system of rule. The king is the Chief of the State and Head of the KSA Government. The country lacks a well-documented constitution as it only considers the Quran as the Constitution in addition to the Shari’ah law. No democracy is present in such situations where a political challenge can be created.

In such circumstances, the management of organizations can be difficult because the Saudis and foreign employees have limited ways of forming trade unions and various associations that can address their business issues easily. This state of affairs is seen as a drawback towards the successfulness of human resource management in the country (Ramlall, Al-Amri, and Abdulghaffar 1160).

For this reason, the KSA should practice democracy by ensuring that there is proper integration of a multicultural environment. Besides, the government should lay more emphasis on education rather than just mere vocational training. In this regard, the government of Saudi is placing more resources on educating its citizens to ensure that it remains competent at the global level with respect to issues concerning HRM (Vernon 101).

Structure of the Business

Most businesses in the Kingdom of Saudi Arabia are developed around family members with employees from the extended family fraternity due to the idea of nepotism and trust amongst relatives. Consequently, the companies are formed based on the strong hierarchical system of management.

This state of events follows the Islam teachings on loyalty and respect as per the culture, religion, and history of the Saudi people. In the current system of foreign investors, changes are being seen where some of the foreign based companies are currently owned and managed by personnel who are only related by work characteristics. To a great extent, these sectors comprise manufacturing businesses with oil-based companies leading (Mababaya 37).

Macro-factors affecting the HRM Department

The private sector in the Kingdom of Saudi Arabia holds about 90 percent of the new jobs that are highly manual; hence, vocational training is required to ensure that relevant skills are obtained. The Saudi government has protected its citizens against unemployment.

The organizations operating in the private sector must consider its citizens up to about 5-percent every year irrespective of the increasing numbers of foreign workers (Al Ariss and Dessler 14). The firms value more foreign workers since they are offered fewer payments. For example, it is expensive to hire a Saudi employee who requires a salary that is six times more than that of a foreign worker.

This situation has been noted to bring about discrimination aspects towards the foreigners. According to Al Ariss and Dessler, the Kingdom of Saudi Arabia has insufficient skilled labor due to such activities. The management of organizations is greatly controlled by the execution of globalized methods, strategies, and processes that maintain a healthy competitive gap (14).

Multinational companies are emerging in the country. This state of affairs has greatly influenced the HRM strategies that ensure the attraction and motivation of employees who are skilled. Companies such as ARAMCO are currently viewing the value of the employees in their commitment towards goal achievement; hence, they are currently abandoning the traditional HRM approaches (Sims 3).

The training of employees is also being encouraged besides offering them comprehensive medical covers. However, gender sensitivity is not observed in the KSA since the number of women who hold employment positions is still low. The women of the country are underrepresented in the workforce as compared to other countries of the world.

This situation has been caused by the religious and moral beliefs and laws that put forth the role of women as marriage and child-bearing (Dessler and Al Ariss 2012). An aspect of labor laws and employment has also affected the HRM departments in the KSA. Investors are keen when making decisions concerning their trade or investments. Factors such as political stability and the climate for investment among others are considered.

Government stability in the country has not been a problem. The structures of the legal system can hinder investment when they are too restrictive and protective (Al Ariss and Dessler 12). The cultural aspects of HRM have brought about a negative perception of work in the private sector. The companies in this department only employ the Saudis due to the social interactions at work that maintains their social statuses; hence, they are socially recognized.

The Saudis must have skills since the manual jobs are perceived to be associated with low-esteemed workers. Such aspects have also been said to stagnate the role of strategic human resource management in the Kingdom of Saudi Arabia (Mellahi 2000). Moreover, the Islamic Shari’ah governs most of the values and procedures related to the workplace.

The HRM lays its emphasis on the hierarchical system of management and organizational structure whereby obedience to leaders must be considered. Emphasis is placed on harmony, cooperation, and brotherly relations. However, conflicts are normally avoided at all costs (Mellahi 331).

The Shari’ah law based on the Quran and the protectionist laws disallows the Kingdom of Saudi Arabia to be a member of the GATT and WTO. Furthermore, the financial infrastructure is not well-developed because the modernization of trade and commercial laws is difficult. The government is currently striving to ensure that strict laws that are more protective are regulated to promote more investments (Mellahi 331).

Conclusion

The essay has elaborated the strategic HRM in departments of organizations in the Kingdom of Saudi Arabia. A clear indication of transformation is seen in these organizations whereby the traditional aspects of HRM are abandoned due to the development of competition among various organizations.

These companies further scramble for qualified Saudis; hence, a mobile HRM with workforce that is dynamic is noted. An organization such as the ARAMCO Company is using strategic HRM for its success amidst the reluctance of most entities in the embracement of modern human resource management in the Kingdom of Saudi Arabia.

Works Cited

Al Ariss, Akram and Gary Dessler. Human Resource Management. London: Pearson, 2012. Print.

Mababaya, Mamarinta. The role of multinational companies in the Middle East: the case of Saudi Arabia. Boca Raton: Universal-Publishers, 2002. Print.

Mellahi, Kamel. “Human resource development through vocational education in Gulf Cooperation Countries: The case of Saudi Arabia.” Journal of Vocational Education and Training 52.2 (2000): 329-344. Print.

Ramlall, Sunil, Hani Al-Amri, and Nadia Abdulghaffar. “Human Resource Management in Saudi Arabia.” International Business & Economics Research Journal 11.10 (2012): 1155-1162. Print.

Sims, Ronald. Organizational success through effective human resources management. Portsmouth: Greenwood Publishing Group, 2002. Print.

Vernon, Mark. Business: The Key Concepts. London: Routledge, 2002. Print.

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