This IHRM report is based on a large food retail company in UK, Malone Superbuy Ltd. The present strategic plan of the company is to venture into the Middle Eastern and Asian markets.

University Degree Business and Administrative studies

Abstract

This report is structured in six main sections: an assessment of domestic and international HRM (outlining the major differences including cultural and industrial differences); the strategy that can be implemented; policies to address labour issues; training and development programme; approaches to employee representation issues; and re-evaluation of employee reward policies.

1.0 Domestic and International Human Resource Management

International Human Resource Management (IHRM) has many similarities with domestic Human Resource Management (HRM), but there are several important differences. Even though IHRM has the same functions as domestic HRM, there are numerous additional functions, and involves broader perspectives. With an increasing focus on globalisation, many companies have to compete on a worldwide basis.

As a result, HRM in the international context requires developing an understanding of the issues facing multinational enterprises (Briscoe and Schuler, 2004). Therefore, an IHRM manager needs to consider more functions and activities than the one that is domestic based.

While internationalisation has brought strategic opportunities to domestic and international organisations, concerns have been raised over the ecological and ideological sustainability of a continued pursuit of Western consumer capitalist business practises.

Akoorie and Scott-Kennel (2005) refer to these concerns that relate to the world’s natural resources such as oil, fresh water, forests and etc. Organisations are, according to them, being called to account to provide solutions to these problems. Proactive responses are required by management and HR is directly involved in this. Despite differing political views, cultural differences and value systems, there is a shift towards the adoption of Western business practises and consumer behaviour. The most common is the use of the English language in IHRM and international business. IHRM consists of the same main dimensions as domestic HRM, but there is more complexity in strategically coordinating the different organisational units across national barriers. It is important to take note that internationalisation is different from globalisation in that internationalisation is a spatially delimiting process.

The model in figure 1, below, can help organisations to determine what factors influence domestic HRM and IHRM policies and practices when they operate in a multinational organisation. This model could be applicable to organisations as is.

Figure 1: Factors influencing domestic HRM and IHRM policies and practices

Source: Hitt, D, W (1996)

1.1 Differences between domestic HRM and IHRM

Figure 2: Variables that moderate differences between domestic HRM and IHRM

Dowling (1999) defines some variables (see figure 2) that moderate differences between domestic HRM and IHRM, which include cultural environment, the industry with which the multi-national organisation is primarily involved, the extent of reliance of the multinational on its home country or domestic market, and the attitudes of senior management.

1.1.1 The Complexities Involved

The function of HRM is viewed as a basic component of the company’s overall corporate or business strategy. Therefore, HRM constitutes a major constraint when multinational companies (MNCs) try to implement global strategies. This is mainly because of the complexities of operating in different countries involved, as well as due to the employment of people with diverse national backgrounds. Therefore, the complexities of operating in different countries and employing diverse people are a key variable that can differentiate international and domestic HRM, rather than any other major differences between them.

1.1.2 The Cultural Environment

Culture shock can lead to negative feelings about the host country and its people and a longing to return home. There will be culture differences in language, food, or amenity. These differences may be enjoyed for a short period of time but it may become difficult and the person may experience culture shock. People from different backgrounds have different attitudes, behaviours, and beliefs which often cause international business failure. HR activities such as hiring, firing and rewarding will be determined by the policies and practices of the host country and also need to be based on their culture (Tung, 1993). Working in a new cultural environment can have problems for both expatriate and local employees.

1.1.3 Attitudes of Senior Management to International Operations

This is one of the important variables to moderate differences between domestic HRM and IHRM. It is likely that if senior management does not have a powerful international orientation, the importance of international operations may be underemphasised or even ignored in terms of corporate goals and objectives (Barlett and Ghoshal, 1992). In this situation, HR managers tend to focus on their domestic issues and minimise those differences between domestic and international environment. They may assume that HRM practices can be transferred from domestic to international basis. This failure to recognise differences in managing HR in a foreign environment can result in major complexities in international operations.

Failure may be because of ethnocentrism or lack of international perspectives. Therefore, the challenge for the HR manager is to think globally and to implement HR policies and practices that can facilitate the development of globally orientated staff. Dessler et al (2004) are of the opinion that IHR management involves very direct contact with the values, attitudes and beliefs of the organisation’s overseas workers and must therefore be ultra-sensitive. It is further important to share the employee’s cultural background and to be sensitive to the needs and expectations in the workplace, to manage such an organisation successfully.

1.1.4 Globalisation

Crafts (2004, p.45) argues that “globalisation can be thought of as a process of integration of goods and capital markets across the world in which barriers to international trade and foreign investment are reduced”. Globalisation is therefore a social development and stands in a complex relationship to internationalisation; one has an impact on the other. He is further of the opinion that “globalisation can be a result either of technological developments that reduce transport costs, improve information flows etc. or of policy changes that reduce protectionism, liberalise foreign investment rules and make migration easier”. According to Kamo’s (2000) report, Tokyo had grown to become one of the world's greatest urban economies, and had already become significantly internationalised by the beginning of the 1980’s. The important success factor for Tokyo was a globalised strategy and globalisation trend.

Many manufacturers in Japan were only cheap factories, but they realised the opportunities of globalisation, they joined the international trading agreements and assumed the whole world as one target market to develop their high valued products. The success of Japan’s case shows the power of globalisation. Bateman and Snell (2004) state that universal needs create strong pressure for a global strategy when the tastes and preferences of consumers in different countries with regard to a product are similar. According to the World Trade Organisation (2006) (WTO), their rules apply to over 90 per cent of international trades and they help businesses from 184 countries to reduce tariffs and eliminate non-tariff barriers when they do international trading.

Figure 3: Globalisation Model

Figure 3 above, has four main options of how to expand businesses into the global market. Global, transnational, international and multinational are different strategic options for different businesses: the differences between them are mainly about how they operate their business globally. Different cultures have a significant relationship with HRM policies and practices according to (Hofstede, 1993). However, Doz and Prahalad (1986) state that many firms do not believe in saying: "When in Rome, do as the Romans do," and think that local employees should forget about their culture and adjust to the culture of the parent company. The success of Japanese companies, by using a global strategy is also pointed out by them. Various authors (Hofstede, 1991) suggested that companies in different countries differ with respect to their HR practices and policies due to their culture.

1.1.5 The extent of reliance of MNCs on domestic markets

Rewards and employment conditions vary globally, generally depending on the local market. In a multinational company, it is essential to determine the internal and external environmental factors of the host country. IHRM has a crucial role in designing global compensation and remuneration systems for their company, as one of the most important functions. In developing an international system of compensation and benefits, an organisation has two primary concerns; firstly comparability, according to Francesco and Gold (1998). They argued that the compensation system assigns salaries to employees that are internally comparable and competitive within the marketplace. The second major concern is cost, and payroll is one of the largest.

Treven (2000) is of the opinion that compensation and benefits are closely connected with local labour market conditions. The availability of the use of expatriates and qualified local people to fill the position, prevailing wage rate, and local legislation influences the level of payments and remuneration. Ding et al (1997) argue that IHRM should use different approaches for different countries in reward and compensation systems. Malone Superbuy Ltd, therefore, will have to work out systems applicable for their local organisations, doing business internationally or globally, for the issues of standardising of pay and conditions.

2.0 STRATEGIES

Malone Superbuy Ltd have been facing competitions as the attention has been drawn to the differentials between the price of the food in UK and in other European countries. The other big firms are now actively increasing the quality and variety of goods and at the mean time focusing on the level of service offered within their stores. Thus, the organisation should develop a strategy in order to improve the quality of service offered to customers and facilitate the development of Malone Superbuy Ltd.

2.1 PESTLE Analysis

We will look into PESTLE analysis or known as (Political, Economic, Sociocultural, Technological, Legal, and Environment) which are the variables that affect the organisation strategy. Besides that, we will also examine the three levels of strategy which are Porter’s generic strategy that will help to smooth the development of Malone Superbuy Ltd. Pierce et al. (2002) described PESTLE as the external environment affects that are affecting on organisation’s strategy, such as political, economic, sociocultural, technological, environment and legal.

2.1.1 Political

Organisation of Economic Co-operation and Development (OECD) (2008) sees political as an important component to implement labour standards in order to defend local labours and not to enforce the standards for authoritarian regimes. As for example, in Western countries, UK and Australia, the local workers forms trade unions in order to bargain with the government on labour laws enforcement to defend the workers’ rights and the governments were pressured to impose labour laws to protect the local workers. China’s admission to the World Trade Organisation (WTO) has endorsed a free flow of foreign trades by eradicating all obstacles encouraging Western companies to make way into the world’s most profitable market covering over 1.3 billion people (Straits Times, 2010). China’s political were strong enough not to enforce labour standards due to their governments who are negotiated to draw foreign investment and for the concern of firming up their competency. Moreover, their local workers are not well – protected and there were no any powerful labour unions to voice out their problems.

2.1.2 Economic

A nation’s economic status will affect the level of profit of an organisation in terms of inflation, recession, interest rates and depression (Robbins and Coulter, 2002). Besides that, Lingham (2008) proposed that economic factor will play role on the impact of the organisation’s Human Resource during the economic growth and their downturn. For example, although the UK economy was affirmed officially under recession in 2008, the government’s significant reduction in interest rates aided to decrease further rises in unemployment during 2009 (Euromonitor, 2010). The spending power of consumers will then again be on a balanced rise as they are more convinced about their current financial situation. However, there will still be consumers that are likely to pay out less on premium products, which includes organics and ready prepared meals, which will badly affect both sales rate and margins (Keynote, 2010). However, the positive part of the recession is that the customers eat more at home and eat out less where it will provide opportunities for food retailers to increase their output (Guardian, 2010). We should also consider that the food is the last thing that customers will cut back on. The figure below shows the percentage of overall consumer spending on food which has risen significantly over the years (Euromonitor, 2010).

Figure 4: UK Spending on Food as % of Overall Consumer Spending 2004 to 2009 (H1)

2.1.3 Sociocultural

This factor consists of the mores, values, customs and demographics of the people in the society in a nation. It will affect the organisation’s strategy on the involvement of the workers giving opinions in decision making and management (Lang, 2008). As for example, China and France are one of the countries where their local employees will rather not be involved in giving opinions and just follow the instructions given to them by the upper management. Where else, the local workers in countries like Australia and UK will be more cooperative in the sense to voice out their opinions and contribute in decision making in the organisation (Peng, 2008).

Technological

According to Tihanyi et al. (2002), he argued that technology transfers are important to help the employees by transferring inputs which are the raw materials and unfinished good into outputs such as products and services in daily operation. Through the implementation of technology transfer in an organisation, it will help the HR personnel to complete their works faster and gather useful and accurate information. As for example, the finger print attendance system which are practised in advance organisations where these system helps to interpret employees’ attendance (Taylor, 2008). Moreover, with technology assistance employees can easily get their works done efficiently. When the organisation merge with other IT industries, the level of skills, knowledge and branded technology will be shared among the employees in the organisation to improve the level of technology. With that, the organisation will focus more on candidates who have special IT skills before they form any IT subsidiary (Akrani, 2010).

2.1.5 Legal

In order to protect the workers in an organisation, labour laws and employment laws was created to make sure that the local citizens were fairly treated and being provided with supportable benefits accordingly (Kuddo, 2009; Compa, 2006). In Western countries like Australia, labour laws were administered by trade unions. Trade unions protect the local workers’ rights by ensuring they have sufficient work time and supportable salary and compensation. Where else, in Asian countries like China, their local citizens were still being undefended by the laws under local government. This is because there was no or weak trade unions were formed and there is a strong political control over labour standards implementation (Tung, 1993).

Environment

Robbins and Coulter (2002) refers environmental factor as the demographic, size of the market, culture, competitors and competitions of a country. This was best practise of HRM on the demands of the labour market and the level of skills of employees. These in turn encourages healthy competitions among employees and increase their performance in term of productivity. In Western countries, Australia and UK have higher standards of labour markets, most of the graduates and workers had higher knowledge or experience on the field, therefore create strong competence between each other to applying a job. Compared to Eastern countries, China has a huge labour market which more and more fresh graduates and local citizens are looking out for a job (Schermerhorn, 2005).

I would like to recommend Malone Superbuy Ltd to implement Porter’s strategy. This strategy will assist Malone Superbuy Ltd to facilitate and improve the development of the company. This strategy will also enable Malone Superbuy Ltd to increase its standards in being one of the most renowned food retailers in UK, Middle Eastern and the Asian market.

2.2 Porter’s Strategy

Michael Porter has argued that an organisation’s strengths ultimately fall into two sections which are the cost advantage and differentiation. This results in three generic strategies that are cost-leadership, differentiation and focus. Porter’s strategies are encouraged to be applied and increase competitive advantage of the organisation with cost-leadership and significantly differentiate from competitors (Robbins and Coulter, 2002). Malone Superbuy Ltd can use these strategies as a way to develop the competitiveness and productivity of their organisation.

2.2.1 Cost Leadership Strategy

This strategy involves Malone Superbuy Ltd winning market share by appealing to cost-conscious or price-sensitive customers. This is achieved by having the lowest prices in the target market segment, or at least the lowest price to value ratio (Jackson, 2002). To succeed at offering the lowest price while still achieving profitability and a high return on investment, the organisation must be able to operate at a lower cost than its rivals. There are three main ways to achieve this.

The first approach is achieving a high asset turnover. For example, in service industries, this may mean for example a restaurant that turns tables around very quickly, or an airline that turns around flights very fast. Where else, in manufacturing, it will involve production of high volumes of output. These approaches mean fixed costs are spread over a larger number of units of the product or service, resulting in a lower unit cost, where the organisation hopes to take advantage of economies of scale and experience curve effects. For industrial firms, mass production becomes both a strategy and an end in itself. Higher levels of output both require and result in high market share, and create an entry barrier to potential competitors, who may be unable to achieve the scale necessary to match the organisation low costs and prices (Hofstede, 1991).

The second dimension is achieving low direct and indirect operating costs. This is achieved by offering high volumes of standardized products, offering basic no-frills products and limiting customisation and personalisation of service. Production costs are kept low by using fewer components, using standard components, and limiting the number of models produced to ensure larger production runs (Storey, 1992). Overheads are kept low by paying low wages, locating premises in low rent areas, establishing a cost-conscious culture, etc. Maintaining this strategy requires a continuous search for cost reductions in all aspects of the food retail business. This will include outsourcing, controlling production costs, increasing asset capacity utilisation, and minimising other costs including distribution, R&D and advertising. The associated distribution strategy is to obtain the most extensive distribution possible. Promotional strategy often involves trying to make a virtue out of low cost product features (Legge, 1995).

The third dimension is control over the supply or procurement chain to ensure low costs. This could be achieved by bulk buying to enjoy quantity discounts, squeezing suppliers on price, instituting competitive bidding for contracts, working with vendors to keep inventories low using methods such as Just-in-Time purchasing or Vendor-Managed Inventory (Purcell, 1995). For example, Wal-Mart is famous for squeezing its suppliers to ensure low prices for its goods. Dell Computer initially achieved market share by keeping inventories low and only building computers to order. Other procurement advantages could come from preferential access to raw materials, or backward integration (Jackson, 2002).

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Some writers posit that cost leadership strategies are only viable for large firms with the opportunity to enjoy economies of scale and large production volumes. However, this takes a limited industrial view of strategy and Malone Superbuy Ltd can definitely implement it. Small businesses can also be cost leaders if they enjoy any advantages conducive to low costs (Woods, 2001). For example, a local restaurant in a low rent location can attract price-sensitive customers if it offers a limited menu, rapid table turnover and employs staff on minimum wage. Innovation of products or processes may also enable a start-up or small company to offer a cheaper product or service where incumbents' costs and prices have become too high. An example is the success of low-cost budget airlines who despite having fewer planes than the major airlines, were able to achieve market share growth by offering cheap, no-frills services at prices much cheaper than those of the larger incumbents (Jackson, 2002).

A cost leadership strategy may have the disadvantage of lower customer loyalty, as price-sensitive customers will switch once a lower-priced substitute is available. A reputation as a cost leader may also result in a reputation for low quality, which may make it difficult for a firm to rebrand itself or its products if it chooses to shift to a differentiation strategy in future (Burton, 2003).

2.2.2 Differentiation Strategy

This strategy involves Malone Superbuy Ltd in differentiating their products in some way in order to compete successfully. Examples of the successful use of a differentiation strategy are Hero Honda, Asian Paints, HLL, Nike athletic shoes, PerstorpBioProducts, Apple Computer, and Mercedes-Benz automobiles (Jackson, 2002).

A differentiation strategy is appropriate where the target customer segment is not price-sensitive, the market is competitive or saturated, customers have very specific needs which are possibly under-served, and the firm has unique resources and capabilities which enable it to satisfy these needs in ways that are difficult to copy (Tompkins, 1996). These could include patents or other Intellectual Property (IP), unique technical expertise for example Apple's design skills or Pixar's animation prowess, talented personnel for example a sports team's star players or a brokerage firm's star traders, or innovative processes. Successful brand management also results in perceived uniqueness even when the physical product is the same as competitors. This way, Chiquita was able to brand bananas, Starbucks could brand coffee, and Nike could brand sneakers. Fashion brands rely heavily on this form of image differentiation (Purcell, 1995). Since Malone Superbuy Ltd has their own competitors, they can use this strategy as a way to come out with unique resources and capabilities.

When Malone Superbuy Ltd differentiates its products, it is often able to charge a premium price for its products or services in the market. Some general examples of differentiation include better service levels to customers, better product performance in comparison with the existing competitors. Porter (1980) has argued that for a company employing a differentiation strategy, there would be extra costs that the company would have to incur. Such extra costs may include high advertising spending to promote a differentiated brand image for the product, which in fact can be considered as a cost and an investment. McDonalds, for example, is differentiated by its very brand name and brand images of Big Mac and Ronald McDonald (Storey, 1992).

Differentiation has many advantages for the firm which makes use of the strategy. Some problematic areas include the difficulty on part of the firm to estimate if the extra costs entailed in differentiation can actually be recovered from the customer through premium pricing. Moreover, successful differentiation strategy of Malone Superbuy Ltd may attract competitors to enter the company's market segment and copy the differentiated product (Lynch, 2003).

2.2.3 Focus Strategy

Porter initially presented focus as one of the three generic strategies, but later identified focus as a moderator of the two strategies. Organisations employ this strategy by focusing on the areas in a market where there is the least amount of competition (Pearson, 1999). Organisations like Malone Superbuy Ltd can make use of the focus strategy by focusing on a specific niche in the market and offering specialised products for that niche. This is why the focus strategy is also sometimes referred to as the niche strategy (Lynch, 2003). Therefore, competitive advantage can be achieved only in the organisation's target segments by employing the focus strategy. The organisation can make use of the cost leadership or differentiation approach with regard to the focus strategy. In that, organisation using the cost focus approach would aim for a cost advantage in its target segment only. If the organisation is using the differentiation focus approach, it would aim for differentiation in its target segment only, and not the overall market (Legge, 1995).

This strategy provides Malone Superbuy Ltd the possibility to charge a premium price for superior quality or by offering a low price product to a small and specialised group of buyers. Ferrari and Rolls-Royce are classic examples of niche players in the automobile industry (Burton, 2003). Both these organisations have a niche of premium products available at a premium price. Moreover, they have a small percentage of the worldwide market, which is a trait characteristic of niche players. The downside of the focus strategy, however, is that the niche characteristically is small and may not be significant or large enough to justify an organisation's attention. The focus on costs can be difficult in industries where economies of scale play an important role. There is the evident danger that the niche may disappear over time, as the business environment and customer preferences change over time (Hofstede, 1991).

3.0 LABOUR TURNOVER PROBLEMS

As stated, labour turnover problems are currently affecting the firm in UK along with his recruitment and retention of staffs in the overseas operations. This section covers the factors that result in high labour turnover in the UK firm and suggests the policy initiatives to address and curb the problems faced by the overseas operation.

3.1 Factors that contribute to labour turnover

3.1.1 Organisational commitment

Many studies have reported a significant association between organisational commitment and turnover intentions (Lum et al, 1998). Tang et al (2000) study confirmed the link between commitment and actual turnover and Griffeth et al (2000) analysis showed that organisational commitment was a better predictor of turnover than overall job satisfaction. Researchers have established that there are different types of organisational commitment. Allen & Meyer (1990) investigated the nature of the link between turnover and the three components of attitudinal commitment: affective commitment refers to employees’ emotional attachment to, identification with and involvement in the organisation; continuance commitment refers to commitment base on costs that employees associate with leaving the organisation; and normative commitment refers to employees’ feelings of obligation to remain with the organisation.

Put simply, employees with strong affective commitment stay with Malone Superbuy Ltd because they want, those with strong continuance commitment stay because they need to, and those with strong normative commitment stay because they feel they ought to. Allen and Meyer’s study indicated that all three components of commitment were a negative indicator of turnover. In general, most research has found affective commitment to be the most decisive variable linked to turnover.

3.1.2 Age and Tenure

Despite a wealth of research, there appear to be few characteristics that meaningfully predict turnover, the exceptions being age and tenure. Age is found to be negatively related to turnover as in the older a person, the less likely they are to leave the organisation. However, age alone explains little of the variability in turnover and as age is linked to many other factors, alone it contributes little to the understanding of turnover behaviour.

Tenure is also negatively related to turnover where the longer a person is with an organisation, the more likely they are to stay. Mobley et al (1979) concluded that length of service is one of the best single predictors of turnover. Griffeth et al (2000) also found that age and tenure have a negative relationship to turnover.

There is little evidence of a person’s sex being linked to turnover. Griffeth et al (2000) meta-analysis re-examined various personal characteristics that may be linked to turnover. They concluded that there were no differences between the quit rates of men and women. They also cited evidence that gender moderates the age-turnover relationship where women are more likely to remain in their job the older they get, than do men. They also found no link between intelligence and turnover, and none between race and turnover.

3.1.3 Wages and conditions

The research conducted on the link between dissatisfaction with pay and voluntary turnover appears to be inconclusive. Mobley et al (1979) concluded that results from studies on the role of pay in turnover were mixed but that often there was no relationship between pay and turnover. Other studies found no significant relationship.

On the other hand Campion (1991) cited in Tang suggests that the most important reason for voluntary turnover is higher wages or career opportunity. Martin (2003) investigates the determinants of labour turnover using establishment-level survey data for the UK. Martin indicated that there is an inverse relationship between relative wages and turnover where establishments with higher relative pay had lower turnover.

3.2 Policy initiatives

3.2.1 Empowering employees to make key decisions

In many companies, important decisions regarding the business come from senior level management. While this is a prudent approach to ensure the organisation’s overall success, many times these decisions directly affect the lower level employees. If the final outcome of the decision is a less than positive one for the employees, often they feel mistreated and unappreciated (Tung, 1993).

Malone Superbuy Ltd can ensure high morale and empower employees by involving them in business decisions that directly relate to them. For example, if the organisation is considering a dress code change, we should allow employees to voice their opinions on the new dress code and offer suggestions for portraying a more professional image. This does not mean you have to follow every decision your employees make; it simply offers them an outlet to feel a part of the team and a contributor to the company’s overall success. For example, in UK industry “Standard Life Healthcare Private Medical Insurance” is currently practising this policy (Taylor, 1998).

3.2.2 Engaging employees through social events and community activities

A successful employee engagement strategy helps create a community at the workplace and not just a workforce. When employees are effectively and positively engaged with their organisation, they form an emotional connection with the company (Green et al, 2000). This affects their attitude towards both their colleagues and Malone Superbuy Ltd’s clients and improves customer satisfaction and service levels. For example through this activity, it can help for Malone Superbuy Ltd employees to find out what is going on within the company outside of their immediate team. They also help to create an environment of trust and openness within the organisation where they are able to talk openly. Employees who feel they are listened to are able to express dissatisfaction and work together to resolve their causes, without it affecting their performance. Besides that, one of the UK industry, Hillarys Blinds manufacturer are also practising this policies with 950 employees in order to solve dissatisfaction with working environment and communications (IDS HR Studies, 2004).

3.2.3 Training and career development

Martin (2003) detected a complex relationship between turnover and training. He suggested that establishments that enhance the skills of existing workers have lower turnover rates. However, turnover is higher when workers are trained to be multi-skilled, which may imply that this type of training enhances the prospects of Malone Superbuy Ltd’s workers to find work elsewhere. The literature on the link between lower turnover and training has found that off-the-job training is associated with higher turnover presumably because this type of training imparts more general skills (Martin, 2003). Shah and Burke (2003) reviewed some of the literature on the relationship between turnover and training. In a British study examining the impact of training on mobility, Green et al (2000) concluded that, in aggregate, training has on average no impact on mobility. However, the training is wholly sponsored by the individual is on balance likely to be a prelude to job search. In contrast, when employers pay for training the downward effect on mobility is more likely.

Lynch (1991) concluded that both on-the-job and off-the-job training have a significant effect on job mobility. While formal on-the-job training reduces the likelihood of mobility, particularly for young women, off-the-job training increases the likelihood of mobility. In a study of six local labour markets in Britain, Elias (1994) found that women who received employer-provided and job-related training had a lower probability of changing employer or making the transition to non-employment, but for men training made no significant difference to this type of turnover.

3.2.4 Understanding turnover

The academic literature Dalton et al cited in Abelson(1987) suggests that differentiating avoidable and unavoidable turnover from the organisation’s point of view can help organisations to understand voluntary turnover more fully. Avoidable reasons include employees leaving to find better pay or working conditions elsewhere, problems with management or leaving for better career opportunities. Unavoidable reasons which are beyond the organisation's control include, for example, an employee having to move because of relocation by a spouse or leaving to fulfil family or caring responsibilities (Martin, 2003). If Malone Superbuy Ltd can identify that much of its voluntary turnover is unavoidable it may profit better from initiatives that seek to manage turnover after the event rather than expend resources on implementing preventative measures. On the other hand, if the bulk of turnover is avoidable this offers the potential for targeted intervention. However, if managers assume the turnover problem to be largely unavoidable, they may fail to recognise turnover as a symptom of underlying problems within the organisation (Elias, 1994).

Another step towards understanding turnover within Malone Superbuy Ltd is to determine whether retention difficulties are caused by internal or external factors. While the role of labour market conditions in causing turnover may preclude the use of targeted human resource strategies, this information may be useful in analysing to what extent turnover is due to outside factors. However, although tight labour markets affect an employer’s ability to attract and retain staff, looking outwards at the local labour market cannot be a substitute for understanding what is going on within the organisation (IDS, 2000).

Research suggests that to gain an accurate perspective of internal causes of turnover, it is useful to look at both quantitative and qualitative information (IDS, 2004). To identify underlying reasons for turnover, qualitative information on the reasons why employees have left is necessary. The UK Chartered Institute of Personnel and Development (CIPD) suggest that it is important employers have an understanding of their rates of labour turnover and how they affect the organisation’s effectiveness (CIPD, 2004). Depending on the size of the business, understanding the levels of turnover across occupations, locations and particular groups of employees can help inform a comprehensive retention strategy. By understanding the nature of the turnover problem Malone Superbuy Ltd can decide whether to adopt targeted retention initiatives, for example at particular sites or groups of employees, or to manage overall levels so that there is sufficient labour (Taylor, 1998).

4.0 TRAINING AND DEVELOPMENT

This section focuses in developing an effective training and development programme which will enhance the customer service skills amongst shop floor staff both in domestic and overseas operations. This training and development programme comprises of various level and training criteria to sustain the capabilities of employee skills in Malone Superbuy Ltd.

Training is defined as programs which are designed to help workers learn some skills such as use new equipment, speak a foreign language, computer skills, implement new manufacturing procedures, and etc. (Fisher, et al., nd). Not only that, Dowling et al, 1998 has stated that training aims to improve current skills and behaviour of the employees. To evaluate the effectiveness of the training is to evaluate the improvement of performance of the employee concerned.

Development is aimed to increase the ability of employees in relation to the some future position or managerial level jobs (Dowling, et al., 1998). According to Fisher, et al., nd, development means helping the managers to improve their abilities to make decision or to motivate subordinates to work harder.

4.1 Objectives of Training and Development

Before a training and development program can be carried out, objectives of the training and development program must be set so that the program is designed properly to meet the objective of the programme. For example, in Japan, training is tailored to the firm types and for specific skills only (Dore and Sako, 1989). The objectives of training and development include increase productivity which is when some organisations do their regular evaluation to determine the organisation’s productivity, the organisation may find that they are not being very productive, thus the organisation may consider increasing productivity as one of its training objectives. Another objective of training and development is to improve the employees’ performances (Akrani, 2010). This may be the objective of the organisation in developing a training and development program when they find that their employees are not performing up to par when they evaluate the employees through performance appraisal. For example, Malone Superbuy Ltd has to set the objective to improve customer service among the shop floor staff of the company through training and development programme. Third, through training and development, we can develop team work of employees other than the above stated, team work of employees are also important to the organisaton as without their team work, some projects may not be able to be carried out as schedule. For example, if a construction firm is to finish building the houses on this date, then it may get delayed due to the incorporations of the employees for example the delay of materials processing, employee coordination, etc. (Campion, 1991).

Next, training and development can also decrease the need for supervision. The employees may be trained to be independent such as minimum supervision. This is helpful to the organisation as minimum supervision means the superiors will have more time on other works which are required to be completed. Last, we need to have a right attitude as training not only improve the skills and knowledge of employees but also may improve the attitude of the employees. For example, front desk employees may need to be sent for soft skills training so that they will have proper attitude when they are serving the walk-in customers (Taylor, 1998).

4.2 Expatriate training programmes

When an employee in Malone Superbuy Ltd is selected as an expatriate for its overseas branch, the candidate is required to go through training and development programmes which are specially designed for expatriates. Some of the trainings for expatriates include cultural awareness training, preliminary visit, language instruction and practical assistance. These programmes are essential to make sure that the sending of expatriates is successful (Lingham, 2008).

4.2.1 Cultural awareness training

Before Malone Superbuy Ltd invest in a foreign country, it is essential to understand its culture thoroughly so that the organisation may behave or act well in that country, without offending anyone in that country. Same goes to expatriates as the expatriate must understand the cultures in the host country so that he or she does not offend anyone in the country. For example, in the Middle East, the culture is mainly placed on trust, relationships of personal and business dealings with respects. Thus, when Malone Superbuy Ltd invests in the Middle Eastern market, it is necessary to respect and trust the partners so that the trade goes on well. The elements in cultural awareness programs include duration, country involved, the transfer’s purpose and the provider of such programs. Tung (1981) described those five types of pre-departure training with different learning processes, job’s type, country involved, and time availability.

This model was found to be useful. However, the model does not help in deciding the type of training methods to be carried out. Mendanhall, Dunbar and Oddou proposed another model to improve Tung’s model (Figure 5).

Figure 5: The Mendenhall, Dunbar and Oddou cross-cultural training model

Source: Nelson (2008)

The three elements proposed by them are the training methods, rigor level, and duration of training in relation to degree of interaction and cultural novelty (Dowling, et al, 1998). This model is useful to determine the type of training to be conducted for the expatriate concerned.

4.2.2 Preliminary visits

Preliminary visits are where the expatriates are sent to the host country for an overlook of the country before the expatriate is sent there officially. This is one of the useful technique that Malone Superbuy Ltd can use to train expatriate as the expatriate gets to experience the country before he or she is transferred there officially so that he or she gets used to the country’s culture, language etc. Some of the advantages of preliminary visit include the expatriates may assess their suitability and interests to the assignment as well as the host country (Porter, 1980). Not only that, it is also a good opportunity to introduce the business context in the host country to the expatriates so that he or she gets familiarised to the business culture in the host country. Next, preliminary visits also encourage a more informed pre-departure preparation to the candidate. This way, the candidate will behave naturally when he or she departs to the host country. Last but not least, preliminary visit also assist in initial adjustment process as the candidate may feel uncomfortable when they first step into the host country. With a preliminary visit, the candidate may feel better the next time they visit the host country (Storey, 1992). Before Malone Superbuy Ltd sends their expatriate to Middle Eastern or the Asian countries that they are investing in, it is best to send the candidates to the countries involved so that they are familiarised with the cultures and norm there.

4.2.3 Language training

Since some of the host countries may have a different language than the home country, it is essential for the candidate of Malone Superbuy Ltd to learn the language used in the host country so that it eases the communication of the candidate with the locals in the host country. There are three aspects to be considered while planning a language training program for the expatriates. These aspects include:

The role of English as the language of corporate world

According to Wright (1994), English is considered as a language of corporate world. As English is the language of corporate world, it may dilute the emphasis on language skills especially on foreign languages (Dowling et al, 1998). As such, Western English speaking countries like United Kingdom and Australia will not put language ability as main consideration in selection process as well as training programs, while other countries like China; English is not the main communication language, English language will be “highly looked upon” whereby fluent English speakers have higher chances of getting chosen for the expatriate assignment and English speakers are preferred in most host countries. As Malone Superbuy Ltd is a large food retailer in UK where its citizens speaks English, speaking fluent English will not guarantee an expatriate assignment to its employees (Tung, 1993).

Host country language skills and adjustment

Since every country has their own unique language, if not English, it is essential for the candidate to learn and understand the language of the host country as this will assist the candidate to be able to access any information of the host country including its market, government, as well as on negotiating with the locals in the host countries if the candidate learned up the local languages or its accent (Dowling et al, 1998). As for Malone Superbuy Ltd, it is essential for their candidates to understand the foreign language that Asian countries or Middle Eastern countries may use as this will impress the locals, therefore smoother trades can be done in the countries.

Knowledge of the corporate language

It is important to understand the corporate language as it eases the communication amongst the parent companies and subsidiaries. Not only that, to make communication smoother, English language training may be conducted in subsidiaries for those non-English speakers so that communication with the parent companies are made easier (Storey, 1992). Malone Superbuy Ltd may need to train its foreign employees such as those in Asian and Middle Eastern countries English language so that they will not have any problems in communicating with the customers and also the parent company.

4.2.4 Practical Assistance.

Practical assistance is whereby the Malone Superbuy Ltd helps the expatriate practically, such as taking care of the relocation of the candidate’s family. The organisation may also provide language training to the candidate’s family so that it is easier for them to communicate with the locals when they reach the host country.

4.3 General Training Programs

Other than training for expatriates in Malone Superbuy, it is also important to provide general training programs for the employees of Malone Superbuy to improve their performances. According to Storey (1991), training programs should be tailored according to Eastern and Western countries as these training should be distinct from each other this is so that it suits the unique differences of each country. Some of the training programs include:

4.3.1 On the job training

On-the-job training is the training where Malone Superbuy Ltd employees get hands-on work to experience the job. This training helps to strengthen the relationships between mentors and his or her employees as they are working together every day thus, understanding each other more each day. Since there are different jobs which uses on-the-job training program, there are different definitions for the program, in accordance to the employee’s skills and also the job descriptions (Essortment.com, 2002). In Western and Europe countries, training is still carried out in traditional ways while in Germany, “dual-apprenticeship” is carried out under the combination of on-the-job training and off-job training (Beardwell and Holden, 1997). This training will help Malone Superbuy Ltd to enhance their productivity and competitiveness of their organisation.

Off-job training

Off-job training is normally referring to lectures or training after working hours or during weekends. In this off-job training, Malone Superbuy Ltd employees are trained by understanding theories and to create critical and analytical thinking among the students. However, all these are just theories which are “textbook-like” which means they are lacking of practical training which are more reality and gives real working situations as working situations may not be as what the theories had described them to be (Beardwell and Holden, 1997). Besides practising in the organisation, Malone Superbuy Ltd can send their employees for training to different places to better understand the job and create a different environment.

Mentoring

Mentoring is whereby senior employee in Malone Superbuy Ltd guides the new employees as part of the training (Beardwell and Holden, 1997). Using mentoring as part of the training for employee means the mentor will help to solve any problems that the mentee is facing, by guiding and also in a way, improving their skills (Essortment.com, 2002). Under guidance, the mentee will have a better idea of the organisation’s culture and structure. There can be a mentee in Malone Superbuy Ltd that can guide each of the employees to improve the quality of service offered to customers.

Simulation

Simulation is where the employees in Malone Superbuy Ltd undergo reality-based activities which allow the employees to learn useful skills and appropriate actions which will be useful in their jobs. Simulation is more cost and time saving compared to other methods (Taylor, 2008). Simulation is useful as it directs the employee from what they learn in the training to apply in real life working environment. Malone Superbuy Ltd can have these activities in their organisations as they can acquire problem solving skills, time management and coordinate teams very well.

4.4 Management Development Programmes (MDP)

To enhance Malone Superbuy’s customer service, it is important to have a good management in the company too. Thus, there are several programs which are useful to improve the manager’s managerial skills. These programs include:

Business leaders’ programme

This is a program whereby it gives a new perspective of business to the leaders, probably by giving new ideas to the leaders on how to improve their company for more income and revenue to be generated. Business leader program may generate new ideas to lead business to greater success. These programs are useful to any company as every company needs to progress. The senior managers in Malone Superbuy Ltd may have a different perspective of the business which will improve the business’s profit and competitiveness (Dowling et al, 1999).

Cranfield general management

Cranfield general management is a program where general manager in Malone Superbuy Ltd will gain the general perspective of business. Senior Managers will also be able to expand their sphere of influence and will be able to make tangible difference to their business. This program will increase skills value through business (Nita, 2008).

Advanced development program

Advanced development program is a program which improves the leadership skills of senior manager to prepare them for business leadership roles. It combines knowledge and skills which will be useful to development strategies for the business. For Malone Superbuy Ltd, this is an important program as a good leader will generate a better customer service of the company (Jones, R, G and George, M, J, 2003).

Accelerated talent development programme

As far as its name sounds, the program is supposed to develop greater visibility, credibility and maturity to the managers. It works by translating managerial knowledge into action (Lingham, 2008). With this skills developing programme, it is beneficial to the organisation as these managers have developed useful skills which will help to improve the organisation’s performances.

5.0 TRADE UNIONS ISSUES

Malone Superbuy Ltd has never recognised trade unions but they had a fairly informal system of local employee representation committees where many of it has been misused recently. There are certain approaches that Malone Superbuy Ltd should consider implementing in order to engage the trade unions to protect the labour rights of the employees.

We need to understand the needs to have a trade union and for that we have to understand what is meant by trade unions. Trade unions are organisations that represent people at work. Their purpose is to protect and improve people's pay and conditions of employment. They also campaign for policies and laws which will give advantages to the working people (Human Resources, 1998). Trade unions exist because an individual worker has very little power to influence decisions that are made about his or her job. Many of which have fallen into disuse in few years ago, the organisation has never recognised trade unions, but has had a fairly informal system of local employee representation committees (Taylor, 1998).

In today's world all sorts of industries and job are encircled by this organisation. While some includes definite participants from a unique stream, some organisations may function as a combination of members from various sectors. But we can find unions for single stream also, like national union of journalists, integrating the journalists alone (Tang et al, 2000). Often the unions merge to increase its power and influence. For example there are international unions of public as well as allied employees, constituting members from different sectors.

Purpose of the union is to protect and benefit the working people in social, political and economic levels. The seed of trade union aroused from discrimination perhaps against the exploitation of man by man. A social system of exploitation dominated the period before industrial revolution (Gerald Vinten, 2005). Certainly these adverse conditions gave birth to unions; following the statement united we stand and divided we fall. This was observed by the entire world. Consequently the federation of progressive force called trade union opened fruitful paths to the workers.

Under UK law employers must recognise a trade union in pay and employment discussions when majorities of the workforce want to be represented and has voted for it. But there is little evidence that union members secure any significant wage “mark-up” or greater job protection than people in non-union jobs. In the UK there has been a long term decline in union membership. In 2008, only 28% of people in a job in the UK were members of a trade union (Sid Kessler, 1995). That percentage is much lower in the private sector where less than one in six employees is in a union. Unionisations are much higher in the public sector for at over 50%. The overall level of trade union membership in the UK is shown in the figure below produced by the Office of National Statistics.

Figure 6: Trade Union membership levels 1892 to 2008

From the chart, you can see that total trade union membership in the UK has almost halved from its peak of over 13 million in the late 1970’s. The extent of trade union representation also varies enormously by sector. For example, nearly 60% of people working in education are members of a trade union but only 6% of people in hotels and restaurants and only 11% of people working in wholesale, retail and motor trades.

In Malone Superbuy Ltd, which tend not to recognise or need trade unions, significant growth in flexible working part-time, temporary, seasonal where employees see less need for union protection and improved employee involvement in the workplace and so there will be less perceived need for collective bargaining. Partly as a result of their declining membership, unions now have significantly less power and influence to determine pay and conditions than twenty years ago although in some industries including postal workers, railway worker, fire fighters and prison officers unions are still prepared to exert their “industrial muscle” (Purcell, 1995).

5.1 Appropriate approaches to engage trade union

Through public relations and marketing, the trade union makes the public aware of its services and activities (Miguel Martinez Lucio, 2002). The use of the media can be important in bringing an awareness of the role of trade unions. Sometimes the negative side suggests that unions are harmful to businesses that they are supporters of violent action that they are only for a certain class of workers that they are no longer relevant to the needs of workers that all they care about is money that with good government and caring employers, there is no need to have unions (Treven, 2000). Trade unions have to be skilful in ensuring that a positive, rather than a negative side of the union is portrayed. Anti-trade union employers propagandise their workers against ‘third-party’ interventions in the workplace. Trade unions are portrayed as ‘the outsider’, an unnecessary intruder into the life of the business unit .These views of the trade union movement are propagandised both overtly and subtly by those who are against the trade union (Mark Stuart, 2002). The trade unions need to counter this type of propaganda at the national or macro level. It is important that trade unions establish their role as important institutions in the labour market, helping to regulate wages and salaries and trade unions need to develop their own information dissemination. They should be seen as part of the national interest representing the broad masses of the people. There is no doubt that trade union militancy is part of its main attraction to workers. While the trade union’s monopoly voice is important, it has to be treated very carefully (Dibben, 2011).

Well-organised and successful strike actions play a major role in getting new members into the movement. Strikes are highly publicised, so that they bring the public’s attention to trade unions. Gains from strike action also help to demonstrate what trade unions can do on behalf of workers. On the other hand, if strikes go wrong, they can leave a negative impact on the public’s mind. Trade unions should publicise the “beneficial” voice. This includes concern about the health and safety of the nation a position against discrimination of any kind whatsoever a concern for educating the masses about matters that affect their well-being resolving conflict of all kinds in the nation and supporting nationalism and unity in their various forms (Sarah Oxenbridge, 2002).

5.1.1 Locating prospective union members

Trade unions ought to keep a constant watch on the country’s economic development. A growing economy is one in which trade union organisation will be boosted. Organisers should be aware of where prospective members are to be found by occupation and by geographic location. The sectors showing growth are those which will provide greater organising opportunities (William Brown, 2002).

Trade unions should conduct thorough research on the targets they have set for themselves.
It is often more rewarding to target large and medium-sized economic units, rather than several small ones (Lei Wang, 2011). They must know as much as possible about ownership, linkages, history, former relations with trade unions, organisation structure, employment, financial status of the organisation and terms and conditions of workers.

They therefore have to develop gradual processes to achieve their target. Organisers sometimes have to ‘farm’ targets. They sometimes have to realise that initial approaches will not meet with immediate success. Meetings in the vicinity of targeted workplaces, passing out trade union pamphlets and brochures, are all part of the ‘farming’ type activity and meeting workers at lunch breaks and after work (Nita, 2008). The organiser who is allocated to the drive takes responsibility for the team which will complete the process. Once a number of potential members show an interest in the union, the organising drive begins to take shape. The organiser will be assisted by an accounts officer to handle dues collection and related matters and an educator to help with socialisation (IDS, 2000).

5.1.2 Determining the bargaining unit

A bargaining unit is a critical issue in the organising process. Many drives have failed because the trade unions failed to determine the appropriate bargaining unit. They have to determine the bargaining unit to be targeted (Susanne Kopsen, 2011).

Workplaces usually have ‘clusters’ of jobs which are similar in relation to:

wages/salaries
method of payment
terms and conditions
progression
location
organization and management and
job descriptions/position descriptions.

Such clusters may have ‘functional’ relationships. Other workplaces may be based on ‘hierarchical’ structures for instance, management, supervisory and clerical, and line staff. In requesting representation for a bargaining unit, trade unions must be extremely careful about a number of factors:

must have a clear majority in all of the areas which represent the cluster;
the bargaining unit must be set out clearly in the letter, naming the job functions
the accounting of dues collected and cards must be done professionally.

In some cases, surveys or polls may be used to determine the union claim. Malone Superbuy Ltd employers may use destabilising strategies to dampen the union’s claim:

delaying tactics of various types;
termination of employment of known trade union activists;
threatening to close down; and
increasing the wages/salaries and improving terms and conditions.

This is a time for resolute action by trade unions. In some instances, there is provision in the law for recognition procedures. In others, custom and practice guide (Dean Stroud, 2008).

5.1.3 Negotiating a new collective agreement

This is one of the important factors in engaging trade unions. Provided recognition is gained, the trade union’s task of submitting a body of proposals for negotiating a first contract and establishing the machinery for managing the group, a first negotiation is completely different from a regular salary review. It is about establishing a base agreement. Trade unions should use market surveys to help determine the standard to be set for the new group and try to get a new agreement that is beneficial to the Malone Superbuy Ltd workers (Peter Fairbrother, 2008).

Psychological and other issues involved in collective bargaining and grievance handling is serious challenges for the trade union. As for example, establishing a management committee for the new group and training them to understand the legal and economic factors in an organisation (Sarah Oxenbridge, 2002). The extent to which the Malone Superbuy Ltd employees are able to establish a working relationship with management depends to a large extent on the initial training they receive. With the process of negotiating a new collective agreement, as with organising, comes the need to conduct frequent meeting which could be formal and informal. The success of a meeting to a large extent depends on leadership and chairmanship (Personnel Today, Jul 2008).

The provision of proper facilities for meetings is important as well as properly prepared agendas. Formal meetings, whether of a small group or a large group, must be well prepared. These must not be underestimated. There are different styles of leadership and of chairmanship. However, there are some fundamental aspects of both that should be considered.

5.1.4 Organising issues

The trade union is an organisation in the labour market. Other organisations in the labour market are educational institutions, family planning associations, hospitals, ministries of labour, employment exchanges and agencies, business firms, human resource associations and courts (Bruno Veneziani, 2005).

The major processes in the labour market include training, recruitment, orientation, grievance handling, collective bargaining, education, advocacy, representation, promoting, transferring, unionising, separating, conciliating and arbitration. Some of the major outputs of the labour market are compensation packages, conditions of employment, rules and regulations, databases, activities, programmers and associations (William Brown, 2002).

The values that drive the trade union as an organisation include justice, equity, non-discrimination, freedom, self-reliance, comradeship and progress. Trade union culture has been associated with the folk or the common people, struggle and adversarial relations, militancy, suspicion, doubt and mistrust, bossism, socialism, group behaviour, bible thumping religiosity, resistance to change, anti-academic approaches, ‘closed’ rather than ‘open’ approaches to relationships except with narrowly defined area (John Gennard, 2009). People form the basis of organisations. This is especially true for a membership organisation. In the case of the trade union, workers are a special category of people forming the basis of the union. Workers can be seen as members or potential members. One can perceive of past, current and future workers as part of the planning process.

All those who sell their labour, mental or manual, or both, are the basis of trade union activity. The trade union recognises, however, its segmentation according to a variety of criteria including type of employment, age, type of business, sex, gender, local or export orientation, modern or traditional, location industrial vs. financial and also the tremendous diversity of the labour force domestic or transnational ownership. Trade unions do not discriminate among workers in sociological, political or social terms (Bruno Veneziani, 2005).

The functioning of the trade union in a given labour market is impacted by the structure, shape and size of the union. Trade unions are wary of the impact of macro-economic factors on the labour market. Inflation, employment levels, national debt, fiscal policy, levels of foreign reserves, trade arrangements and agreements can impact on the trade union. The size of the trade union, inclusive of its paid professional staff and its membership, will impact on its ability to provide quality goods and services. The membership should also provide human resources to complement the staff. The staff should be able to cover a span and range of roles and functions on behalf of the members (Melanie Simms, 2009). Organising and organisation are the areas which have responsibility for ‘growing’ the union, maintaining contact between the centre and the periphery, providing many of the outreach services to members, and generally, interfacing with the widest cross-section of the public.

6.0 RE-EVALUATING EMPLOYEE REWARD POLICIES

In the case of Malone Superbuy Ltd, it was claimed that the firm experiences costly and expensive from medium to high labour turnover which is mainly due to the unsocial hours in which all the employees are obligated to and the temporary nature of student labour. Apart from that, it was also claimed that the wage rates are average for the food sector. Due to these factors, it is undeniable that employees are de-motivated and are no longer loyal to their organisations. In order to address this problem, employee reward policies should be re-evaluated to encourage greater employee motivation and loyalty working in domestics and overseas location.

Before we could continue, what are employee reward policies? The main purpose of employee reward covers how employees are rewarded in accordance to their value and contribution to the organisations. These rewards can be both financial and non-financial rewards which clearly comprises of strategies, policies and structures used to maintain and develop the reward system. The ways an employee is motivated will determine the impact on the effectiveness of the organisation. The aim of employee reward policies is to attract, retain and motivate high-quality people. We are going to observe several reward policies that can be re-evaluated to encourage greater motivation and loyalty in employees.

Heneman (2002) remarked that the assessment of the effectives of a strategic reward system is often underestimated, but it is an indispensable final step in the process of implementing a compensation program. Indeed, assessing the effectiveness of any process is just as important as designing and executing them. Since it is often complicated to evaluate the effectiveness of a reward program in terms of financial performance, so-called “soft-factors” such as employee behaviours and attitude towards the reward program is an acceptable replacement at times.

Kanungo and Mendonca (1988) came up with a final stage review in introducing new reward systems. This comprises of reformulating the reward package objectives or redesigning the reward system or both, based upon the current reward system. At this level, a big deal of learning takes place as the management reflects on the perceptions and expectations of its employees and their impact on the organizational goal. It is also a time for drastic decisions and not merely to respond in a reactive mode but to take proactive measures which considers how best the reward policy can be creatively implemented to cope with the new challenges which constantly confronts a dynamic organisation.

In order to re-evaluate the existing reward policy, Scott et al (2006) suggested a six step approach. These six step approach comprises of setting goals and objectives, identify evaluation criteria, select an evaluation methodology, collect and analyse data, interpret findings and finally develop and implement programme improvement strategies.

6.1 Domestic or overseas operations

One of the first considerations to take into account is the degree of global-versus-local emphasis that is maintained within the organization. To what degree do the organisation's subsidiaries act as independent entities (a very local approach) or as interdependent operations (a more global one)? Combined with these approaches is the degree of centralisation and decentralisation with respect to policy and practice. So, for example, in an organization which is strongly decentralized, with independent subsidiaries, a local approach to reward and performance management is likely. At the other extreme, a highly centralised and interdependent organizational stance will result in a global approach.

Care needs to be taken at these extremes. For instance, a highly globalised approach is likely to use similar measures for performance measurement and associated reward implementation worldwide, taking little account of local practice and sensitivities. This is problematic when particular cultural issues are ignored. For instance, individual performance-related pay (linked closely to individual goals and targets) can work well in individualistic and personal-performance-driven cultures, but is less effective in cultures where group dynamics and norms are prioritized over individual work effort. Locally set reward schemes and performance measures can function effectively where international subsidiaries work in relative isolation from other operations. They are less effective (appearing less equitable) when there are strong interrelationships between subsidiaries all working towards an organizational group goal.

Managing this global/local tension is, therefore, critical to success. To address this issue, the starting point is always identifying the strategic context. At this stage of policy design, the business strategy must be identified and aligned with the talent management and reward strategies. If there is a business case for change to the current reward/performance policy, this must be fully developed and articulated. If the performance policy is to be more closely aligned to the global reward model, the key global requirements for performance must be identified, global programmes to address them clarified, any constraints identified and addressed, and worldwide reporting, monitoring and review processes devised.

Any cultural considerations should be built in such that the approach to be taken does not end up being so global as to be inappropriate at a local level. If, on the other hand, a more local approach to rewarding performance is to be taken, the framework needed for local adaptation of performance measures must be developed, with the specific way in which the policy will operate at local level identified and any potential consequences clearly articulated, taking into account local regulatory frameworks.

Consideration also has to be given to how performance will be rewarded when internationally mobile employees are working in local performance reward régimes. Should performance bonuses be aligned with similar performance scores in the home or the host country? If local host-country performance rewards are to be applied, it is critical to consider the potential impact of this practice on expatriates who are relocated abroad on home-based pay systems. (How, for example, will their base salaries be managed in line with home-based peers when they return home if any performance rewards received abroad have been consolidated?)

Whether the performance reward policy will be global, local or global (a mix of both), policies mean little unless they are put into practice. As with any policy design, implementation procedures need to be clarified, local blockages identified and solutions worked through, with global and local approaches aligned, to ensure there is no conflict.

It is helpful to consider elements of the policy that might typically be considered as being addressed at global or local level. For example, for top and senior levels of management, job descriptions, grading, reward strategy, base salaries and performance measures/management are likely to be set at the global level. By contrast, for administration and blue-collar workers, a local approach is more likely to be applied to job descriptions and grading, base salaries, salary reviews and performance management. For middle management and professional grades, there is likely to be a greater mix of global and local approaches, depending upon their roles and degree of global involvement.

6.2 Six step approach

6.2.1 Setting goals and objectives

Goals and objectives are the specific steps which allow an organization to accomplish and achieve a specific goal. Setting goals and objectives requires continuous process of research, decision making, evaluation, measurement and re-evaluation. To achieve this successfully, employees must first understand their personal contribution to the task given. This suggests that each employee must have his or her specific objectives and how these aims can assist the rest in achieving the objectives. In this context, it is clear that the goal and objective is to encourage employee motivation and loyalty. Once a particular goal or aim is set, necessary measures can be taken to achieve the goal and to obtain the preferred results (Bloom & Milkovich, 1998). With the setting of goals and objectives, appropriate rewards can be provided to employees who tend to display higher motivation level and loyalty towards the organizations. On the other hand, employees who get rewarded for their motivation and performance feel good about themselves when they receive rewards and recognition for their hard work.

6.2.2 Identify evaluation criteria

Objective Evaluation: Objective evaluation is convenient for both supervisors and employees. Objective evaluation is based on factors that can be quantified, scores that can be measured and results that can be clearly tabulated. The biggest advantage of objective evaluation is that the employee cannot accuse the supervisor of being partial. The work undertaken by the employee and his actions alone will influence the results of an objective evaluation. For instance, the sales generated by the employee in a particular month can be easily measured in both monetary and non-monetary terms. This figure can be compared to the given target. The employee's performance can be evaluated by comparing the sales generated with the expected target, and ratings can be assigned. Similarly, the number of units produced, the number of calls made and the leads generated are some of the categories that would constitute an objective evaluation criteria. In addition to measuring productivity, punctuality and time management can also be assessed in a similar manner.

Subjective Evaluation: Subjective evaluation, on the other hand, is based on a number of factors that cannot be measured. Anything that cannot be quantified is subject to bias. A subjective evaluation criterion includes assessing the quality of work and the attitude of the employee. Initiative, dependability, effective communication and proactive exchange of information are key performance indicators that would influence the outcome of a subjective evaluation. Although these qualities are very important in order to ensure good work ethics, the inability to justify a rating based on these qualities makes performance appraisal a daunting task. For instance, quality of the output is as important as the quantity. An employee, who meets his targets but finds it difficult to adhere to the strict standards of quality, would have accomplished only a part of the assigned job. Again, a salesperson that generates a huge volume of sales without focusing on building a loyal customer base is not really good at marketing. An impartial assessment of these factors is difficult, if not impossible.

Performance appraisal training can be useful in order to convey to the employees the need for evaluation. The trainees can be given a fair idea about the employee evaluation criteria. This is a must, since evaluation depends on both objective and subjective factors. In fact, automating performance appraisal, with the help of performance appraisal software, not only helps the organization save time and money but also ensures fair and just evaluation by removing any psychological elements that may have a negative bearing on unbiased employee evaluation. The software can also create customized employee evaluation forms to ensure competency in the appraisal process. Performance appraisal has to conform to federal and state laws. Noncompliance with the aforementioned laws may have dire consequences for the supervisor in charge of evaluation (Kerr, 1995). For a successful employee reward policy to be redesigned, identifying the evaluation criteria is essential so that the reward is in accordance to the criteria met.

6.2.3 Select evaluation methodology

Work performance appraisal systems assess the employee's effectiveness, work habits and also the quality of the work produced. The research methodology used to evaluate the accuracy and effectiveness of the appraisal instrument takes different forms and depends on the type of career professional under the microscope for evaluation, but the foundation for all evaluations rests on several basic research techniques. The evaluation methodology corroborates the original employee evaluations and performance appraisals through supporting multiple research reporting measures.

Other forms of evaluation for performance appraisal systems include input from employees using self-assessment tools and also supervisor appraisals of the system of evaluation. The employee self-reflection offers the vantage point of examining the evaluation from the worker level. The supervisors offer the viewpoint of a middle- to upper-level management evaluator. Both have a unique stake in the appraisal process and also experience in dealing with a variety of appraisal system users. Grouping both workers and supervisors into separate and anonymous feedback groups provides candid opinions on the perceived validity of the appraisal system. While some viewpoints offer only biased information, common threads and repeated comments do provide validity for some of the assessment areas (Watson, 1995). When redesigning an employee reward policy, it is necessary to first obtain the feedback of the employee regarding the existing employee reward policy. Based on the feedback, employers will have the perfect idea on redesigning appropriate reward policy.

6.2.4 Collect and analyse data

Essentially, collecting data means putting your design for collecting information into operation. You’ve decided how you’re going to get information – whether by direct observation, interviews, surveys, experiments and testing, or other methods – and now you and/or other observers have to implement your plan. There’s a bit more to collecting data, however. If you are conducting observations, for example, you’ll have to define what you’re observing and arrange to make observations at the right times, so you actually observe what you need to. You’ll have to record the observations in appropriate ways and organize them so they’re optimally useful.

Recording and organising data may take different forms, depending on the kind of information you’re collecting. The way you collect your data should relate to how you’re planning to analyse and use it. Regardless of what method you decide to use, recording should be done concurrent with data collection if possible, or soon afterwards, so that nothing gets lost and memory doesn’t fade (Marsden & Richardson, 1994). Based on the data collected from the employee, the organisation can know the percentage of employees who are dissatisfied with the current reward policy system and determine if they are in a critical situation.

6.2.5 Interpret findings

Another aspect of relevance and use of the findings of systematic reviews is the interpretation of the findings for local contexts and particular settings. Reviews often produce generalized findings and so the users of the research need to consider how the phenomena studied relate to their own country, organization, and/ or local community. The findings may also be interpreted in conjunction with other types of knowledge. In other words, merely collecting the data is insufficient. Interpretation allows the organization to determine the exact the response that is very much needed to re-evaluate the policies.

6.2.6 Develop and implement programme improvement strategies

The purpose of an improvement plan is to assist organizations in making planned enhancements and improvements to existing programs. An improvement plan is a summary document that minimally presents the planned changes/improvements, schedules, and parties responsible for carrying out the work. An improvement plan is considered to be an integral part of an organisation’s strategic plan. Therefore, any efforts for developing an improvement plan should take into consideration the company’s mission statement, vision statement and strategic goals such as encouraging motivation and loyalty. This integration into all aspects of the organization is essential. Agencies are encouraged to engage in strategic planning for employee reward policies. Based on the feedbacks and necessary information gathered, the organisation can redesign the employee reward policy to increase the motivation and loyalty level among the employees.

6.3 Reasons for re-evaluating employee reward policies

Though several techniques of measuring job performance have been developed, in general, the specific technique chosen differs with the type of work. All these issues call for research efforts so as to bring to attention on how appropriate reward systems can increase or influence the employee to develop a positive attitude towards their job thus increasing their productivity and loyalty, regardless of domestic or international corporations. The best means of understanding an employee’s motivation is to consider the social meaning of work. In respect to this, short-term goals and long-term goals of employees may affect the motivation level accordingly. Rewards that an employee receives are very much related to understanding employee motivation and loyalty. Studies show that rewards can cause an employee’s satisfaction to be affected which directly leads to poor job performance of the employee. Lawler (1985) concluded that several factors which are related to work tend to influence an employee’s performance.

6.3.1 Job satisfaction

Job satisfaction also involves establishing healthy relationships with colleagues where everyone is part of a group or team. Humans have the need to feel connected, successful work teams can help to fulfil this need (Kessler & Purcell, 1992). Furthermore, another review by Hansen (1997) addresses the issue of motivating Chinese employees. The authors state that China’s economic growth has increased 30 significantly since 1979; however, China still has some problems with productivity and failures of foreign joint ventures. Hansen argued that many of these issues have to do with unmotivated employees. The article, “Foreign companies and Chinese workers: employee motivation in the People’s Republic of China”, reviews that Western techniques and theories of motivation may not be applicable in China, and offers, therefore, practical implications for motivating Chinese workers. According to Hansen it is important to understand why Western theories do not work in China, by looking into Chinese culture and values. According to a research made on the job satisfaction and incentives among China’s urban workforce, it was claimed that women and fresh graduates have lower job satisfaction compared to men. This study shows that job satisfaction is a key factor that has an undeniable impact on the employee’s motivation. As such, policies to create more challenging works should be reinforced to stimulate critical and analytical thinking among the employees to encourage motivation (Nielsen & Smyth, 2006). Research shows that job satisfaction is best predicted by the reward cost value of the job. Assan (1982) studied the job factors which is related to job motivation and job satisfaction which in return leads to performance of the job.

7.0 CONCLUSION

Malone Superbuy Ltd has built a reputation for quality foods and this can be proven through the establishment of their outlets in south west and south east of Britain. As there are other competitors coming up, the company should have to get into a strategy that will enable them to compete in the market. They should play a managerial function to enhance the competitiveness of the organisation. This managerial function plays a vital factor in the organisation because the company with the addition of well managed employees will create competitive advantage. This is a rare gem as no one person is the same and the ability to correctly and precisely select and recruit the right person for the right job is not an easy feat. Different national culture will have an imperative and significant impact towards IHRM practices and policies. It will affect the way people work and hence, it will have a direct implication on the performance of Malone Superbuy Ltd. They should always look for methods and chance for strategic expansion, be it international or domestic. With HRM as a guide, it will further boost Malone Superbuy Ltd’s performance as a successful conglomerate. Internal and external factors should be taken into consideration when making any IHRM decisions. A holistic and integrative HRM framework is definitely an important aspect in Human Resource.

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9.0 APPENDIX