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HUMAN RESOURCES MANAGEMENT

Extracts from this document...

Introduction

HUMAN RESOURCES MANAGEMENT MODULE ONE ASSESSMENT The lack of attention to international human resources management has cost many millions of dollars to MNCs and yet this has been a neglected area in the profitability equation. Explain the assertion under the following headings: TABLE OF CONTENTS Introduction The International manager Management Recruitment and Selection Process Management training Foreign Posting Compensation Manpower Differentials in Foreign Markets Repatriation Summary Induction Few executives would argue with the fact that people are vital for the effective operation of a company. Managers often say that people are their most important asset. Yet the human assets are virtually never shown on the balance sheet as a distinct category, although a great deal of money is invested in the recruitment, selection, and training of people. Recent theoretical work in business strategy (Patrick, 1998) has given a boost to the prominence of human resource (HR) in generating sustained competitive advantage. The world is becoming far more competitive and volatile than ever before, causing firms to seek to gain competitive advantage whenever and wherever possible. As traditional sources and means such as capital, technology or location become less significant as a basis for competitive advantage, firms are turning to more innovative sources. One of these is the management of human resources. Whilst traditionally regarded as a personnel department function, it is now being widely shared among managers and non-managers, personnel directors and line managers. HRM means fillings positions in the organization structure. It involves identifying work-force requirements, inventorying the people available, and recruiting, selecting, placing, promoting, appraising, planning the careers of, compensation, and training people (Tung, 1988). In the system approach to staffing, enterprise and organization plans become important inputs for staffing tasks. The number and quality of managers required to carry out crucial tasks depend on many different factors. One major step in staffing is to determine the people available by making a management inventory. Staffing does not take place in a vacuum; one must consider many situation factors---both internal and external. ...read more.

Middle

Compensation is affected by forces as diverse as labor market factors, collective bargaining, government legislation, and top management's philosophy regarding pay and benefits. This is a dynamic area. Compensation policies can produce intense internal conflicts within a company at any stage of globalization. Indeed, few other areas in international HR management demand as much top-management attention as does compensation. The principal problem is straightforward: salary levels for the same job differ among countries in which a global corporation operates. Compounding this problem is the fact that fluctuating exchange rates require constant attention in order to maintain constant salary rates in US dollars. * An effective international compensation policy should meet the following objectives: * Attract and retain employees who are qualified for overseas service. * Facilitate transfers between foreign affiliates and between home-country and foreign locations * Establish and maintain a consistent relationship with regard to the compensation of employees of all affiliates, both at home and abroad. * Maintain compensation that is reasonable in relation to the practices of leading competitors. As companies expand into overseas markets, they are likely to create an international division that becomes the home of all employees involved with operations outside the headquarters country. Three types of expatriate compensation plans typically found during this stage of development are: localization; higher-of-home-or-host compensation and balance sheet. International dimensions of HM include home-country salary; host-country costs; host-country costs paid by organization and from salary and home-country equivalent purchasing power. In an analysis of the international compensation package, two major components are: benefits and pay adjustments and incentives. Benefits may vary drastically from one country to another. For example, in Mexico an acquired rights law requires that if a benefit, service, or bonus is paid 2 years in a row, it become an employee's right. Both India and Mexico mandate profits sharing -10% of pretax profits must be distributed to employees. Most developed and emerging economies have some form of national health care supplied by employer-and employers-paid premiums. ...read more.

Conclusion

Financially, repatriates face the loss of the foreign-service premium and the effect of inflation on home purchases. Having become accustomed to foreign ways, upon reentry they often find home-country customs strange and at the extreme, annoying. Such "reverse culture shock" may be more challenging than the culture shock experienced when going overseas. Summary Business leaders of the present-let alone the future-need to possess international business skills par excellence in order to survive the chaotic world of international business. It also goes without saying that human resource managers will face new, unforeseen obstacles. Understanding the links between people, productivity and quality is the key to understanding why some firms succeed and other don't-in exactly the same economic and social environment. It is far too easy and wrong to categorize human resource practices as being the soft science-part of the hard science of making organizations competitive. In fact, this is far from the truth. The best organizations are very focussed and hard-nosed about their human resource policies because they clearly understand HR policies and their link to productivity and quality. Human resource strategies are designed to motivate people to immerse themselves in the activity of the company, to ensure that people are valued, respected and rewarded so that they continually contribute to the success of the company and enhance their own well being. Understanding the difficulties of finding qualified executives for international companies (ICs) and the importance of foreign language knowledge. Knowledge of a people's language is essential to understanding his or her culture and to know what's going on as every effective manager must. Compare home country, host country, and third country nationals as international companies' executives. Source of IC executives may be home country, host countries, or third countries, and their differing culture, language, ability, and experience can strengthen IC management. Remember some of the complications of compensation packages for expatriate executives. Expatriate manager compensation packages can be extremely complicated. Among other sources of complication are fluctuating currency exchange rates and differing inflation rates. Basic elements of those packages are salaries, allowances, and bonuses. ...read more.

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