Convergence in HRM and employee management

Keywords: International Human Resource Management, Global Convergence and HRM, Theories of HRM, Convergence Theory, Contingency theory, Identity concept, Factors affect the employee management, HRM Assignment writing services

Introduction

Cooke (2016) stated that globalization has helped the free flow of technologies and manpower across borders. The global market place has raised the need to address HR in international dimensions. Traditional HRM practices have limited scope to address the complexity of international business environment. Global diversity has called to address the micro –dimensions linked to organization and employee.

Companies benchmark the same practices like quality and production to achieve cost and quality in cost effective manner. Nevertheless, this formula has not proved to be very suitable with HR practices. Convergence of the HRM practice has made it difficult to manage the labor force.  The individual with different characteristic, national and international cultural difference has made it difficult to apply the same practices (Brewster & Mayrhofer, 2017).

Globalization has changed the face of HRM through economies of scope and external environment forces. From an earlier study of Japanization has made it evident that the cultural differences among the nationals have made it difficult to ripe best effects through implementation the best practice as stated in convergence theory. The value and belief of the peoples vary tremendously and form the pattern of behaviors (Dowling, Festing, & Engle, 2015).

Stahl, Björkman, & Morris (2016) discussed that cultural differences involve all the elements like decision making and organizational structure and culture. HRM is set of strategies and polices to manage the workforce. It helps organization to fulfill it manpower needs in an effective way along with skills acquisition. There has a need to address the global variables and to achieve organization objectives in similar manner. There has been debate about applying the best practices across the organization without giving another consideration to cultural, social or economic factors (Stahl, Bjorkman, & Morris, 2016).

Human Resource Management (HRM)

Initially, HRM was though as function of people management and i.e. it was viewed as reaction to situation and bureaucratic function. However, later on it was revolutionized as strategic human resource management. However, with globalization, the practices of HRM have needed to change according to global cultural perspective. The changes in the business environment have prompt a change for policies and practices to adapt to local business environment. The HRM is process of planning and design the workforce system with policies and strategy so that people work in best interest of organization to achieve competitive advantage (Sparrow, Brewster, & Harris, 2014).

Rowley & Benson (2014) analyzed that HRM is fundamental and strategic approach to manage the people of an organization. It is a process of recruiting, management as well as setting the objectives of organization. The theoretical emphasis is that people have different mission and objectives. It’s about matching the best skills available to fulfill the objectives of an organization. HRM is function to bring required skills on boards, training the individual as well as retention of the work force. With the help of HRM companies achieve their objectives through using the individual with most skills and competence.

International Human Resource Management

Burke & Cooper (2015) stated that IHRM is process of hiring, training and rewarding people in the international environment. International HRM is process of managing people in the international context in the subsidiary of an organization. MNC usually bring own skills and expertise to manage the subsidiary in the host county. HRM focus on the long term vision and plans. Therefore, international HRM consider the gender and geographical importance.

The numbers of factors that vary between local and international HRM are cultural impact, expatriates and environments factors like social, technological and economic factors. Another important factor is skills availability as well as the employment risk associated in local context.

Global Convergence

Rowley & Benson (2014) evaluated that the key issue which causes the convergence is implementing the best practices from one environment to another region. The convergence states a hypothesis where it believes that ‘best organizational management practices can be applied to a situation and the cultural, social and economic factors does not affect the situation. The divergence arises as result of global and social differences. The reason based the convergence the globalization as well as the environmental factors like social and economic position of country.

The firm with better efficiency and lower costs of production will lead the market and standard. Moreover, other companies will follow them for their existence. There are always best possible solutions available for labor management (Stredwick, 2015). This view in line with the transaction view theory, to be cost effective organizations try to retain structure HR practices to maintain the structure. There are always like-minded people in the world and thus they have the same thinking style.

The employees of organization have globalized mind set. Organization follows standardized productions processes and quality to compliance with quality standardization. Keeping this in view, therefore, there is a tendency to uniform for standard cost structure to meet the specification at same cost and quality (Stahl, Bjorkman, & Morris, 2015).

Convergence and HRM

When companies go abroad the principle question on their mind is that how to setup HRM practices in the new region or country. Some companies prefer to adopt practices which they consider best from their home country.  This is known as convergence practices. Most company looks at the market as their first signpost. Therefore, the forces of the market lead to the convergences in the systems. This model holds best when business consider replicating the best practices from one country to another. Therefore, all the systems and process usually applied from one country to another as they view as the best practices (Burke & Cooper, 2015).

Convergence And Divergence Of Human Resources

McCourt (2015) suggested that the application of one level followed from earlier benchmark represents strong convergence in the systems. The most fundamental differences in the markets are political, social, economic differences. Therefore the application of same principles and techniques may not give same result which previously consider as best practices. This model ignores the behavior and attitude of individual’s because of the cultural differences, therefore, acting on the constraint itself.

When the HR practices are conducted in the need of markets demands and ignoring other cultural facts then this result in convergence. For example, as seen in the diagram above, convergence involves standardization of process and formation of the single identity (Burke & Cooper, 2016).

Theories of HRM

To discuss and analyze the relevant resources are

Convergence Theory

Brewster & Mayrhofer (2016) mentioned that the industrialization process started many HRM writer believe that the whole world will become a uniform place.  This theory based on the philosophy that there is only single best way to manage the company.  Consequently, the whole company is set up and governance under the common practices. The most important outcome of universalistic approach is that it provides response to the market because of homogeneity.

Stredwick (2017) added that this provides the best effect and performance of the organization provides positive effects. However, the convergences have faced the national cultures and causes issues for the organization. The main run behind the convergence theory is that applying the ‘best practices’ and try to achieve desire to achieve similar cost structures. The impact of technology and international markets has made the process uniform, thus eliminate the need for divergence. This view is too simplistic and believes all market forces and regulation act in similar way.

Contingency theory

This theory looks at internal and external factors to manage activities. This theory looks for both the management practices of the organization as well the factors in the market, like labor force and regulations are very important. The role of HR is underline to balance and communicates between labor representatives as well as deal the legislation like equal opportunities.

This paradigm recognizes all the factors like technology and other working practices. This involves adoption of HRM practices to external environment or to the market where the organization is in operation. This theory criticizes the concept of universalistic approach which states that it is too simplistic and in real world there are number of factors to consider (Stredwick, 2016).

Identity concept

The theory looks how groups affects the practices of the HR. the studies have shown that hoe the different levels variations affects the practices of HRM. In some countries, there is strong bonding and forming a collective identity, where has in region of the world had different social structures (Cooke, 2015).

HR as source of competitive advantage

Dowling, Festing, & Engle (2016) examine the relationship HR and economic benefits. This follow the porter’s argument of resource based view and underpins the value of HR practices and procedure in the success and performance of organization. Therefore, the competences, skills and knowledge are valued as fundamental element for the company performance. It has been evident from the recent research that flexible workforce and attracting new competent employees to maintain competitive advantage.

Factors affect the employee management

Cultural

Hofstede has explained the four cultural dimensions that exist in a society. When people from different parts of world come together for organizations enter is certain geographic, and then people usually have difference among them. As previous understood theses individual will have a difference between them, they will provide the desire outcome. However, culture difference has made it difficult, because what is acceptable to an individual may be weird for other person (Sparrow, Brewster, & Harris, 2015).

Individualism versus collectivism

In an individualism national culture, that people think of them self ahead of their family members whereas in collectivism the people tend to favor their families ahead of their own preference and choices.

Power distance

It measures the extent to which people in a society accept the distribution of power. High power distance accepts those with high power at the top whereas in low power societies people tend to see power distribution on equal basis (Brewster & Mayrhofer, 2017).

Uncertainty Avoidance

It represents the society tolerance level. I.e. it explains the extent to which people likes the liability and also the extent to people avoid the responsibility. In low avoidance, people tend to takes the responsibility whereas in high avoidance the feel unsafe and avoid the responsibility.

Masculinity or femininity

It represent the tendency to which society prefer the assertiveness in the society.  In some countries, male dominate the society and they play key role. Whereas, some countries have the female dominate the society (Burke & Cooper, 2015).

Some organizational factors and convergence

Fundamental ideology

In some countries organizations are put before the individuals and the focus is usually is on community. However, there is certain part of the world where individual put himself ahead of the organization and market principles are adopted with local environment policies and practices. Therefore, again the individualism and collectivism is another prominent factor to determine the success of polices. If people are more orientated towards the community then they might favor polices where the other individuals get ignored (Stredwick, 2016).

Human Resource practices

Hiring individuals through massive recruitment campaign or get some low cost labor might not be affected in some economies. For example, a country with low employment, then it might not easy to achieve the desire result and cost of labor wages might be too high. Whereas, in country where there is high employment this police might be successful. For example, getting adapting to local market scenario will help the organization to achieve the best result and maintain and effective cost structure (McCourt, 2014).

Working styles and system

Stredwick (2013) analyzed that organization structure variation have made it difficult for to convergence of HRM polices. For example, in a society where there is culture of uncertainty avoidance, the having a hierarchy structure might be very effective. However, with a system where people take responsibility the system might not deliver the desire result. One way or the other, the cost structure and economies will not be achieved and therefore result in failure of an objective.

Therefore, it depends on the style and structure in the market. In some societies with high masculinity the hierarch system make works well but in advance or develop economies a system with flat culture is more beneficial.

Assessment and reward

In western economies where individualism is very high compare to collectivism then the performance based promotions and rewards are very common, people tend to work hard and incentives and rewards are based on the appraisal and feedback. But if a society is based on the collectivism, then this system may not work. Because the culture based on the seniority and no feedback is required. Therefore, if a company try to apply standard so called best practices then it might not achieve the desire results and hence a conflict of interest in the system (Sparrow, Brewster, & Harris, 2016).

Employee Power

Stredwick (2013) studied that the involvement of employee makes a huge different in determine the policy development in an organization. For example, if there is less participation of an individual in the matter of an organization, therefore there will less information and then it may be easy for an organization to develop and implement polices with attract less attention. However, it has been witnessed that in developed economies people are closely involvement in the policies and procedures (Rowley & Benson, 2014).

Social Networks

Social network is a very important to determine the HRM polices. For example, in western markets, people prefer to hire on the merit through proper hiring channels as well screening and evaluation, where as in Asian markets individuals get hired more on the reference. People prefer to hire the people they rather hiring the individual because of the sense of security and ease of hiring. In less developed markets reference plays an important role. People do prefer to hire someone from their social network (McCourt, 2016).

Economic situation

The financial crises’ has made it difficult for many organizations stay afloat and manage the profitability. With massive redundancy, now organization are adopting different polices for different region of the world. If there is consistent practice in the one part of the world that the layoff have managed to help profitability, then coping the same technique might work in the other region of the world. Their best practice make been good under one economic condition, but applying the same model in another scenario may cause the shortage of labor or ineffective polices to achieve the desire outcome (Dowling, Festing, & Engle, 2014).

Diverse workforce

McCourt (2003) highligted that the diverse nature of workforce has made it difficult to apply same polices all over the region. For example in one part of the world, staff available is highly qualified and with advance skills, whereas the other region of the world may struggle with the required level of skills and expertise staff. In the UK, the quality of education and technical skills is very good and individual have very effective training. Whereas in the emerging markets individual may not have the proper skills and competencies and hence polices to hire professional with certain skills and attitude may not be possible to hire.

Psychological need as explains in the Maslow’s hierarchy of needs, the different individual tends to seek different level of satisfaction. According to their economic situation different individual seek what fits best to their interest. Having standardized polices may cause conflict of interest (Stredwick, 2014).

The transfer and diffusion of HRM practices within MNCs

Shortage of Skills

The problem in some societies is shortage of skilled staff. Therefore, it is difficult for some companies to find right people with right talent and making it difficult to execute the right policies. For example, a company from UK, entering in emerging market may not able to find suitable people for certain position. Therefore, UK policies may have to change to adapt to local policies. Furthermore, environment factors like social, political and economics are very different and therefore policies from UK may not produce effective results (Brewster & Mayrhofer, 2014).

Technological process

Technological variations have a huge impact on the operation of an organization. Technologies have very significant element attached to it.  The cost and availability of technology is caused a wide spread difference in different economic parts of the world. In emerging or developing markets technology comes late, due to cost attached. Therefore, it is difficult to find people with right skills how can operate the machine effective. Therefore, a standard practice may not work and the convergence theory lags behind (Rowley & Benson, 2014).

Cost of labor

Another factor is the amount of wages paid to an employee. If western and developed economies the cost of labor varied significant. In the developed countries the wages and salaries are very high and the working style different. Whereas in the less developed countries the people attitude and belief towards the working environment is very different. Therefore, polices relevant to wages and salaries need to revised to bring in line with market conditions. Therefore, convergence of HR polices will conflict with objectives set in desire market (Stredwick, 2013).

Conclusion

Human Resource provides an important framework to manage the people in the organization. Moreover, it helps organization of achieve its goals through individuals that fits with the organization. Furthermore, international human resource management has addressed the need of global business environment to achieve workforce requirement of an organization. The basic objective of an international HRM system is to attract talent, develop and retain it.

However, the social, economic and technological factors vary from country to country and there convergence of polices will result in conflicting objectives. Therefore, organization might not able to attract and retain the staff. Nonetheless, there is wider debate whether the application of HRM should be based on convergence or not. Some authors argue it is most cost effective way to structure the cost and in line with transaction cost theory.

Convergences believe by benchmarking the best practice, business can produce better result under the predetermine standards. However, the foundation of this theory has unable to support the facts, because different countries have different cultures. Therefore, it has been evident that one size does not fit all. Companies should balance it approach with local context in order to achieve success in certain market.

Technically, convergence of polices to manage culturally diverse force and geographic of the world made the HRM process complicated. Therefore, it is evident the organization should to local environment and polices to achieve the objectives of an organization.

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