Human Resources in the Global Environment
Snell & Bohlander (2012), say that human resource department plays a key role in developing human capital. Dowling, Festing & Engle (2008), noted that multinationals develop integrative human resource practices by sharing best practices from all parts of the firm to create a worldwide system that strives for consistency and gain efficiencies of scale and scope across several different countries.
Effective multinational management in Scandinavian countries requires sensitivity and adaptation to that various host country requirements and customs regarding employment such as hiring, reward and promotion practices and respect for local cultural and institutional traditions (Dowling, Festing & Engle, 2008). Mismatches between cultural, social and or political attributes of HRM practices in the parent country and in foreign locations may result in dysfunctional effects such as problems in attracting and retaining employees, labor relation conflicts or ineffective employee behavior.
Gitman & McDaniel (2007), noted that Scandinavian society and its workforce are becoming increasingly more diverse in terms of racial and ethnic status age, educational background, work experience and gender. The Scandinavian division company with a demographic employee profile that looks like its customers may be in a position to gain a competitive advantage which is a set of unique features of a company and its product or service that are perceived by the target market as superior to those of the competitors.
Many Scandinavian companies are successful owing to employee diversity which can produce more effective problem solving, a stronger reputation for hiring women and minorities, greater employee diversity, quicker adaptation to change and more robust product solutions because a diverse team can generate more options for improvement. For the Scandinavian division to use employee diversity for competitive advantage, its top management must be fully committed to hiring and developing the newly appointed manager.
While engaging in the hiring process, the Scandinavian countries laws such as Sweden and Norway prohibits discrimination based on age, race, gender, color, national origin, religion or disability. The countries have banned discrimination against disabled workers and require employers to change the work environment to accommodate the disabled (Gitman & McDaniel, 2007). The countries Family and Medical Leave Act require employers with certain expectations to provide employees up to 12 weeks of unpaid leave a year. The leave can be for the birth or adoption of a child or due to a serious illness.
The need to develop a global perspective as far as staffing is concerned is no longer just an option but it is a mandatory requirement for any organization planning for sustained growth in Scandinavian countries. Aswathappa & Dash (2007), say that human resource managers should help their Scandinavian division into the arena of more intense worldwide as well as domestic resourcing.
Recruitment and selection for a manager in the Scandinavian division is one of the most challenging human resource activities today. The success of TNS Inc in the Scandinavian country is dependent on the efforts that have gone into hiring the right person for the right job at the right time. The first step in staffing for the TNS Inc’s Scandinavian division will involve human resource planning. This will involve forecasting TNS Inc’s demand or supply of the right type of people in the right number (Aswathappa & Dash, 2007).
Human resource planning facilitates the realization of the organizations objectives by providing the right type and the right number of personnel. Aswathappa & Dash (2007), say that human resource planning takes greater relevance in Scandinavian countries where efficient utilization of human resources is obligatory to realize strategic objectives. The main issues in international human resource planning include identifying of top management potential and critical success factors for future international managers, providing opportunities for development, maintaining and tracking commitment to individuals in their international career paths and dealing with various units of business while at the same time trying to achieve regionally and globally focused strategies (Aswathappa & Dash, 2007).
After the human resource planning process, the international human resource manager should proceed with the job of hiring the right manager with the required competencies. Aswathappa & Dash (2007), say that he or she must not only select resources with the right skills, but also employees who can fit with the TNS’s culture. The human resource manager should hire a manager whose styles, beliefs and value systems are consistent with those of the Scandinavian country.
Scandinavian countries are characterized by high level of education, stable political environment and high cost of living. This implies that due to the high level of education, qualified managers are available. Aswathappa & Dash (2007), say that Scandinavian countries are characterized by low level of political risk, hence, the multinational is not likely to make a direct control over the operations of the company. The recent hike in salaries of chief executives in multinationals is a challenge because it may affect the high cost advantage status the countries have enjoyed (Aswathappa & Dash, 2007).
Local laws of the host Scandinavian countries play an important role because they come in the way of expert postings. Some countries have strict restrictions on foreigners taking employment. Temporary work visas may also be difficult or impossible for the employees to obtain and this exacerbates the problem (Aswathappa & Dash, 2007).
Since the majority of the Scandinavian countries such as Norway and Sweden have strong performing economies, the division is likely to attract the attention of others to its human resource methods. Needle (2010), says that there is some evidence to link the fortunes of human resource specialists with economic growth. During a period of growth the emphasis is put on recruitment, selection, training and reward policies. After the economic crisis of 2008-2009, there has been a stable growth in economy in Sweden which has led to a corresponding expansion of the roles of human resource specialists.
The state, operating through government policies and the legal system has had considerable influence on the human resource function through legislation, employment policies concerned with such issues as the supply of labor and education and training and third-party intervention (Needle, 2010). It has been observed that the differences between the operations of human resource management in various countries linked to differences in the cultural and in economic and political contexts of those countries.
More than most business functions and activities, human resource policies and practices are embedded in the social, political, economic, legal and cultural contexts in which they operate. The human resource policies in the TNS’s Scandinavian division can be linked with cultural differences drawn from well known theoretical perspectives (Needle, 2010). The recruitment and selection criteria vary according to cultural differences. In performance oriented and universalistic cultures, criteria of hiring a manger should be based on job knowledge, qualifications and competencies.
Ahlstrom & Bruton (2009), say that TNS’s Scandinavian division should examine a lot of characteristics in determining whether the manager is adaptable. The examples include experiences with the culture other than ones own previous travel, the foreign language knowledge and background or heritage of recent immigration. Ahlstrom & Bruton (2009), say that the manager being hired should have the ability to cooperate with people, different cultures and business organizations types. He or she must have the ability to feel developments in the host country and accurately assess them, as well as to be able to solve various framework issues from different perspectives. Ahlstrom & Bruton (2009), say that another important characteristic is sensitiveness to differences and nuances in politics, culture, religion, and ethics as well as flexibility in managing operations on a persistent basis despite the lack of help and information gaps.
The manager of the Scandinavian division must be independent and self reliant. Ahlstrom & Bruton (2009), say that the Scandinavian division assignment has more responsibilities than he or she had at the home office. Some of the indicators of independence and self reliance that the human resource manager should look for include prior experience working with customers in the field, special project or task force experience, a hobby that requires a high degree of self-reliance and a record of extracurricular activities or athletics in school. The human resources manager requires that their expatriate managers be in good physical and emotional health, because Scandinavian has all the medical resources available in more developed countries (Ahlstrom & Bruton, 2009).
Language training is very important in hiring a manager for the Scandinavian division company. In the hiring process, language ability is very important. English is the primary language of international business and most expatriates from all countries can converse in English. Ahlstrom & Bruton (2009), say that those people who can speak only English are at a disadvantage when doing business in non-English speaking Scandinavian countries. The prospective manager should show some commitment to foreign language learning if they are to be posted to the Scandinavian country for an extended period of time (Ahlstrom & Bruton, 2009).
The manager to hire for the Scandinavian division should show some motivation for foreign posting. Ahlstrom & Bruton (2009), say that when evaluating candidates for overseas assignments, a firm also should consider the employees reasons for wanting to work in the Scandinavian country. It is important to note that just wanting to work in the country is not sufficient motivation. Individuals must be engaged at work and believe in the significance of the job. Ahlstrom & Bruton (2009), noted that applicants who are unhappy with their current situation and want to get away are less likely to become effective expatriates; Successful experts often will also exhibit openness and a pioneering spirit.
Other motivators include the desire to increase one’s chances for promotion and the desire to establish the firm in a foreign location. Ahlstrom & Bruton (2009), say that the company should treat international experience and an understanding of the overseas environment as being critical for promotion to upper ranks. The human resources manager should notice that firms with limited international activity have realized that having middle and top managers with international experience on staff is important in case the firm wants to expand its international activities (Ahlstrom & Bruton, 2009).
Another important facet of human resources is the appraisal and compensation process. Ahlstrom & Bruton (2009), state that performance appraisal can be defined as a systematic and periodic review of employee performance, normally on an annual basis. The basic purpose of employee evaluation is to build better performing organization and to assist in the professional career development of the hired manager. Punnett & Shenkar (2004), indicated that the individual performance should be appraised while the manager is on the assignment. In Scandinavian countries, the appraisal mechanisms vary from quantitative to qualitative for example management by objective. For a foreign assignment as compared to domestic assignments, the human resource manager should evaluate performance dimensions not especially related to job such as sensitiveness to foreign laws, norms, and customs, adaptability to unpredictable and uncertain conditions, cross-cultural interpersonal qualities, and host locations consolidation with other units of MNE (Punnett & Shenkar, 2004).
Studies indicate that while the performance appraisals of managers in the Scandinavian division are inclined to be task focused and operational, the manager evaluations should be strategic, linked with the whole unit operation and its relation to other locations. Punnett & Shenkar (2004), say that “appraising the performance of this manager becomes an essential issue for the Scandinavian division human resource manager” (p. 373). Expatriate manager’s performance appraisal may become critical means by which the company links its units together such as by cooperative behaviors appraising and different environmental degrees incorporation into each manager’s format of appraisal. Punnett & Shenkar (2004), also note that “this process cal also facilitate the development of a common appraisal format that recognizes and makes situational differences legitimate, so that the relative contributions of managers around the world can be tracked, evaluated and compared” (p. 373).
The manager’s compensation is as important as fostering appraisal inter-unit connection and the international strategic aims attainment. According to Punnett & Shenkar (2004) the manager of the Scandinavian division should have a bigger security income due to evaluations of performance usually are the modest determiner of their whole compensation package.
Training and development is an important aspect of the human resource managers when hiring a new manager for the Scandinavian division. Preparation lack was associated with higher rates of failure. Punnett & Shenkar (2004), say that multinationals are inclined to engage into little training than their Scandinavian and European counterparts. Scandinavian place more emphasizes on interpersonal skills, language, as well as culture sensitiveness in the training programs. More importantly, professionals and scholars are casting the developing and training of the international assignees into the bigger frame, one consistent with a more theoretical, systematic and broader human resource management description.
Mathis & Jackson (2010), consider that human resource managers of the Scandinavian division should recognize the importance of training employees and managers. These companies recognize that training efforts can be integral to business success. For the Scandinavian division, training is similar to the continuous improvement practiced by some manufacturing firms. The nature of technological innovation and change is such that if employees are not trained all the time, they may fall behind and the company should become less competitive. According to Mathis & Jackson (2010), training also can affect organizational competitiveness by aiding in the retention of employees. One reason why many individuals stay or leave organizations is the career training and development opportunities. Firms located in Scandinavian countries invest in training and developing their employees in order to enhance retention efforts.
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The human resource manager of the Scandinavia division should put efforts towards retaining the hired manager. Buhler (2010), says that lack of commitment from organizations leaves in its wake soaring expenses that companies must incur to find a replacement and a negative impact on the morale, efficiency and productivity of the remaining workforce. To avoid this costly situation, the Scandinavian division should ensure that it creates more effective retention strategies in an effort to encourage higher levels of commitment to the firm and a more loyal workforce (Buhler, 2010).
Managers hired in this new position need job satisfaction. Buhler (2010), notes that job satisfaction depends on the positive feelings of the hired manager about his or her job. When the manager’s expectations of the job are not met, he will probably experience job dissatisfaction. Buhler (2010), further articulates that the manager’s level of job satisfaction impacts her level of commitment to the company and determines how likely he or she will remain with the organization.
In his studies, Buhler (2010), noted that effective hiring to improve retention requires that attention be paid to the organization’s job person fit. To improve retention, it is no longer enough to fit the person with the job. The person must also fit the organization which in turn increases the probability of staying with the firm for a longer period of time. The human resource department should be aware that the choice of recruitment sources impacts the retention of employees. Some sources have proved to be more effective in recruiting employees who stay with the organization for longer period. Buhler (2010), says that informal internal recruitment methods and word of mouth have traditionally yielded the best results.
The use of realistic job previews has also improved retention. Buhler (2010), further says that telling an applicant about the negative aspects of the job also helps improve retention. The applicant will become disillusioned with the firm and lose trust in the employer if he is only told about the positive aspects of the position. According to Hayes & Ninemeier (2008), for the manager to work effectively he must know what to do and he must perform job tasks properly. Human resource managers should address these concerns in training programs that begin after orientation concludes.
The management at the Scandinavian division must realize that there is a big difference between a subordinate’s current output and his suitability for promotion. According to Gitman & McDaniel (2007), promotion refers to the attainment of a higher position than the one just held and its consequent greater responsibility. In this company, it is important to note that the main criteria for promotion is merit and ability and the personnel manager must formulate a promotion policy that should indicate the procedures to be followed Gitman & McDaniel (2007).
The new manager wants to be accepted by his peers and to quickly become contributing members of his work team. Hayes & Ninemeier (2008), indicated that while the socialization process takes time, it begins as workers are initially put at ease and as they are involved in hospitable interactions with their peers. Managers know that employees want to fit in with their peers and become effective team members rather than advocates of them versus me culture that exist in some operations.
In Scandinavian countries, employers are required by law to obtain some information from new employees and this may be done during orientation. Hayes & Ninemeier (2008), say that these aspects include state tax or community withholding tax and immigration and naturalization documentation, and age verification if it was not provided during the selection process. Legal issues might be avoided if some information is provided to employees during orientation (Hayes & Ninemeier, 2008).
Monetary rewards are valued by most of the employees, but it is also important not to neglect non-monetary rewards such as added control over one’s job, added tasks that the employee finds interesting, as well as clear feedback and praise the employee can use to improve at the job and learn more skills (Hayes & Ninemeier, 2008).
It has also been noted that at hiring the right people for the right job and integrating them with the team members creates excellence. This culture has spurred growth in many companies in Scandinavian countries. Since the team members have unique skills they lead others to excellence, and carefully cultivate those, who will assume control in the future. In order to select successfully future managers, the human resource management must ensure that mentors pass both their strategy gift and their flair for building a reliable corporate culture. Human resource management must articulate that if the workers of the company engage in self-surveillance then the capitalists will not have to resort to a costly bureaucracy to control their behavior.