Human Resource Management Issues
Human Resource Management in the Global Market
International human resource management refers to the issues that come about in respect to Internationalization of a business. Global firms are associated with the promotion of organizational efficiency and standardization.
Domestic and local businesses are less complex compared to international businesses in their nature and characteristics.
Employers have to develop Human Resource policies and procedures so as to handle challenges that are associated with global assignments such as deployment, cultural diversity, cost projections, compensation, assignment letters, family support, relocation assistance, benefits and tax programs.
There are three main issues that are associated with human resource management in international businesses.
The first issue is Expatriation in which key positions in overseas operations are assigned to expatriate workers.
Compensation is the second issue whereby expatriate and local workers compensation must be addressed alongside that of workers in the home country.
Last but not least is Repatriation. When an employee retires or finds it necessary to return his home country to continue working for the company, the human resource management must put this into consideration (Houseman 38).
The above issues have significant consequences on the performance and perspectives of expatriate and local workers and the human resource management staffing effectiveness.
Organizations must choose the right staffing approach policy based on the requirements of the firm. This assures not only the success but also the growth of the business.
There are three main staffing policy approaches that are widely used and accommodated in regards to the needs and requirements of global businesses.
The ethnocentric approach is a method in which ethnocentric organizations are primarily home country based, and the Nationals are top ranking employees (Mathis 76). Own country nationals fill the Headquarters and subsidiaries positions while foreigners are considered to be 2nd class citizens.
Primary country nationals occupy the key positions and foreigners rarely get the chance of being promoted while the Nationals are the top ranking employees. This policy is appropriate for firms where the need for control is key. Ethnocentric Staffing policies are best for early setup of foreign subsidiaries. It’s also used when there are insufficiently qualified host country nationals.
This policy ensures that firms comply with corporate policy. (Dowling and Welch 24).It’s good for cultural diversification, and geographical environment means that working in a given country doesn’t necessitate living in it.
The second approach is Polycentric Orientation. It is host country oriented in the sense that foreign subsidiaries are made up of the nationals who more often than not act as a host country. The same staffs can also be in the acting capacity of a manager who operate in the subsidiary jurisdiction. It allows for minimum interference from headquarters, and this ensures the development of subsidiaries. They are mainly controlled through good financial monitoring and procedures. Employees enjoy ample promotion opportunities within the foreign subsidiaries despite the fact that there are limited advancement opportunities (Dessler 30). This policy is evident in firms that offer services to heterogeneous product markets. In addition to that, such policies exist where goods and services must be marketed in a manner that they can perfectly well and adapt to suit specific preferences that go hand in hand with the national standards. The policy is a cheaper option since host country nationals are employed and thus there is a reduced language barrier. It limits career paths for host country nationals and parent country nationals since less experience makes them have few opportunities abroad.
Last but not least is the geocentric approach. It’s considered to be the most flexible organizational strategy that can respond to arising developments in the business environment. This policy involves filling positions with the best individual for the job without considering their nationality, in the headquarters and subsidiaries level. Nationality and superiority are not related factors in geocentrism and thus having skills is more important. Geocentric firms are the most complex type of organizational structure since e expertise and resources are not centralized, and neither are they decentralized (Kopp 40).
It’s effective in firms whose production process is integrated to a huge extent across subsidiaries. Managers should thus adopt a global mindset.
Taking UAE (United Arabs Emirates) as our case study to evaluate the expatriate management policy in human resource management, we further get into how to manage expatriate workers to succeed in staffing operations in the country. In selecting staff, managers are more concerned on how to bring expatriates to the UAE and how to ensure these expatriates perform and excel as required in the context of UAE operations.
Organizations expatriate management policy would consider expatriate workers needs about other needs of the rest of the workers who could be locals in the UAE.
Expatriate workers in the UAE are limited to occupy key positions in organizations due to the expatriate management policy.
In light to all this, the UAE government extends it support to expatriate staff and allows expatriate management policies that will see to it that expatriates occupy top ranking positions.
In order to satisfy UAE countries regulations, firms expatriate policy and staffing policy requires that local workers must be supported. These regulations cover local recruitment in addition to expatriate employment in the organizations staffing policy. Local workers have a vast knowledge of the UAE markets, and thus it’s beneficial to involve them.
Polycentric and Ethnocentric policies are the most suitable for UAE.
In conclusion, the expatriate management policy in UAE can be compared to those of the US and Middle East countries.
Fairfax County. Strategic Work Force, (2003).
Houseman, S. Flexible Staffing Arrangements, United States department of labor; (1999).
Kopp, R. (1994). International practices and policies of the human resource policies in Japanese, The United States and as well the European multinationals; 33:81-99.
Dessler, Gary. Human Resource Management. 8th ed. Upper Saddle River, NJ: Prentice Hall, 2000. Print.
Mathis, Robert L., and John Harold Jackson. Human Resource Management. 10th ed. Mason, Ohio: Thomson/Southwestern, 2003. Print.