General HR practices and IHRM: The identical look in employee relations

General HR practices and IHRM: The identical look in employee relations

 

            Traditionally, most Western-based ways of management adhere on the idea that people are identical, replaceable, and disposable things (Elkin and Sharma, 2007, 414). Today, more and more companies – both local and global – recognize the indispensable role of people as fuels of production and resource-based assets. As a result, it is necessary that people within businesses are handled using the most effective ways of management. The supervision of people is rooted on the principles and practices of business management and specifically assigned to one of its dimension called Human Resource Management (HRM). Most literatures (e.g. Burke and Cooper, 2004; Price, 2004; Sims, 2002; Schermerhorn, 2001) report that the general HR practices essentially revolve around the practice of recruiting, selecting, hiring, evaluating, training of employees that will fill in a vacant job position in a particular company and other similar activities, including devising the most suitable remuneration package, performance management, and managing conflict are among its other functions. Entrekin (2005) recognizes HRM as a crucial element in an organization’s life cycle. With the materialization of convergence in businesses and managerial functions due to globalization as well as technological developments, traditional Western and Eastern HRM practices expanded its area of coverage beyond given geographical locations (Von Glinow et al., 2002). It is necessary for people behind the global businesses to complement with these current changes (Alvesson, 2002). As a result, the concept of International Human Resource Management (IHRM) was introduced and put into theory and practice. This paper argues that there is no difference between general HR practices and IHRM. Using relevant body of literatures, the argument is supported by the idea that general HR practices are similarly adopted by international HR managers and leaders because they are basically using the general HR practices in managing a global workforce. In this discussion, it is assumed that the general HR functions are synonymous with local or domestic HRM.

 

General HR practices: the building blocks of HRM

There is no difference between general HR practices and IHRM for the sole yet sufficient reasons that the latter (IHRM) uses the fundamentals of the former (general HR practices) in performing its planned tasks. Sims (2002) describes HRM as a business science that is predominantly concerned with all the activities of successfully attracting, developing, motivating, and maintaining a quality-performing workforce that is mutually geared towards organizational productivity and success. These HR processes are collective efforts in developing, enriching and maintaining of organizations’ capacity towards growth and development. The traditional characteristics of HRM include personnel managers who handle administrative tasks revolving around human resources planning; recruiting staff; job analysis; establishing performance review systems; wage, salary, and benefits administration; employee training; personnel record keeping; legislative compliance (affirmative action, EEO, etc.); and labor relations (Sims, 2002). Looking on the book authored by Schemerhorn (2001), there are three main HRM functions: attracting a quality workforce, developing a quality workforce, and maintaining a quality workforce. In a nutshell, attracting a quality workforce includes employee recruitment and selection process, developing a quality workforce includes employee training and development and evaluation, and maintaining a quality workforce include remuneration and pay systems, motivation and leadership, and labor relations. These are basically the general HR practices.

An organization’s human capital and management philosophy must focus on recognizing the value of the workforce as assets who define organizational character and performance capacity (Champion-Hughes, 2001). Abramson and associates (2002) identify human capital as a critical factor that would either lead the organization to the path of success or failure. That HR practices, in this case, are expected to be executed accordingly. The effective application of general HR practices is associated to organizational performance and tantamount to organizational success. Treating people as assets motivate them to perform very well. The mere recognition of employees’ valuable contribution in production, and not just plain salaried employees, is good enough that they reciprocate by giving their best shots in maximum service and achievement of goals both on individual and organizational levels. Richard Pinola, chair and CEO of Right Management Consultants, Inc., has identified what upper management officials require from front professionals in terms of HR (Hornsby and Kuratko, 2005). To enhance real value to a company, HR must work in agreement with the organization’s overall strategy. When this approach is accomplished, affirmative changes can occur in talent management, leadership development, and organizational performance (Hornsby and Kuratko, 2005). Sambrook (2000) asserts that HRM plays a key role in leveraging the knowledge of the organization specifically in terms of enhancing employees’ core competencies. It is supposedly safe to consider a generalization that the description for HRM can only be established through the fulfillment of roles based on the needs and demands of the organization particularly on its employees. The effective implementation from the start up to the end will yield to higher employees’ productivity and increase in organizational revenues. All HRM functions should be deliberate and directed to the success of the organization.

 

International HRM: on using the general HR practices

            Aside from the forces of globalization and technological innovations, the internationalization of businesses is among the underlying explanation in relation to the growing application of expatriates assigned to supervise increasing numbers of international operations (Bures and Vloeberghs, 2001). Meanwhile, Budhwar and Debrah (2001) notice a significant number of organizations that embark on significantly levering their HR policies and systematize them in new strategic directions. This is an apparent response to the global argument against traditional managerial beliefs, particularly of the West, concerning people’s treatment as mere ‘things’ by organizations for profitable and selfish interests. The change in HRM practices into IHRM is no exemption. Considering the growing demands of a global marketplace, the management of employees in a global working environment characterized by diversity and multiculturalism is crucial. This is the basic postulation of IHRM. International HRM is the management of people within a global setting. Peltonen (2006) provides a comprehensive definition of IHRM, which is “a branch of management studies that investigates the design and effects of organizational human resource practices in cross-cultural contexts” (523). Sims (2002) briefly explains that IHRM includes the “the process of procuring, allocating, and effectively utilising human resources in a multinational corporation” (360). The major distinction within HRM and IHRM is seen on the provision of organizational application with reference to geographic context. Most HR practices are relative and employed within domestic level. In contrast, several researchers (i.e. De Cieri et al., 2007, Evans et al., 2002; Schuler et al., 2002) argue that IHRM is intended for administering the added complexity in organizations as a result of diversity and multiculturalism among employees. Understanding employee diversity and multiculturalism in IHRM is important because such features affect overall business operations and human relationships. Although IHRM is uniquely identified with its provision to context and the added feature of diversity and multiculturalism among employees, it is still argued that there is no significant difference in terms of the general HR practices. International HR practices are still bounded within the standards of general (domestic) HRM.

            To illustrate such claim, it is good to provide specific examples. General HR practices adhere to equal employment opportunity (EEO) in employee recruitment and selection (Daniel and Metcalf, 2001). International HRM practices similarly recognize EEO based on policies from main company headquarters. The EEO policies of international businesses are ensured to be in compliance with the legal requirements of both home and host countries. Dealing with national government authorities and other political figures plus a greater variety of socio-economic interest groups is useful. Traditional and general HR advocates are aware of the importance of fairness and equality in employee recruitment and selection. Both domestic and international HRM acknowledge that unfair hiring practices and insufficient understanding of EEO policies possibly will lead to charges against the organization requiring financial penalty. Other example is seen on employee motivation and compensation. The general HR practices believe on the concept of fair and competitive remuneration and pay systems for employees. Also, fairly and appropriately compensated employees are motivated to work more towards the advantage of the organization. According to the expectancy theory, employees expect rewards on the tasks they accomplished (Sims, 2002). This reward (e.g. financial and non-financial) will help them develop their individual work capacity and facilitate working up towards a higher level of skills competency. Generally, the compensation system tells employees which behaviors will be rewarded and which will be punished (Salas et al., 2004). General HR practices influence levels of motivation through the use of performance appraisals, pay-for-performance incentives, and internal promotions systems based on merit (Brown et al., 2003). In IHRM, fair and competitive remuneration and pay systems is also recognized with special consideration on the attribute of differences in currency. Sims (2002) says that HR managers and personnel need to reflect on the fringe benefits offered to host-country employees as these benefits may vary in significant aspects. On the aspect of employee evaluation, general HR practices are mainly reflected on overall performance of the organization. Evaluating employees’ performance has fared to satisfy the organization (Kamoche et al., 2003). Employee evaluation seeks to monitor and improve effectiveness by giving feedbacks on job performance and competency. This is a process that is carried out at regular intervals and follows specific protocols that support the concern of objectivity or fairness. The international workplace complements with this general HR practice of employee evaluation. Leadership is also considered as important features of both general and international HRM. Leadership is a behavior based on the elements of the leader’s personality (Santos and Santora, 2001). Chesser and colleagues (2001) declare that leadership is a key issue in the development of groups, organizations and nations. The leadership of every HR manager, domestic or international in duty, is based on the standard managerial functions. It caters on employee behavior and interaction. While general HR practices address common culture on the case of domestic HRM, IHRM practices consist of a wider cultural consideration. According to Hofstede (2001), the concept of culture at work is organizational in level. Whether in local or international context, extensive emphasis on culture is necessary and relies on the veracity that effective HR practices play an effective role on achieving high performance among employees.

            Provided the above examples, there is indeed no difference between general HR practices and IHRM because general HR practices are adopted in international context. Although IHRM practices have special considerations, general HR practices govern its major functions such as the case of employee recruitment and selection, compensation and motivation, performance management and evaluation, leadership, and so on. The basic HR functions are generally used in both local and international working context. According to De Cieri and group, the general HR practices are integrated with in international working environment. There is integration in local and global aspects. Integration in general and international HR practices is important to every business organization (i.e. multinational companies) particularly in addressing issues on organizational conflict, contradictions, and business ethics.

            Further, HRM will face both challenges and opportunities (Gross and Connor, 2007). General HR practices are the common denominator of both domestic and international HRM. Both environments use general HR functions in attending to the needs of the employees and the organization as well. Local and global HR managers must be able to acquire advanced knowledge on managing human resources. The developments affecting all employees in an organization can be used towards the individual and organizational advantages. People and organizations are said to be effective when they manage to provide the needed requirements expected from each of them. Generally speaking, the common HR principles and practices are generally accepted in all business setting. However, it is argued that some general HR practices are relative in some places and are integrated on current national workplace situation. The HR strategy of the organization should always be based on the recognition of the valuable contribution of employees to organizational performance and productivity. In sum, general HR practices are similar to IHRM provided that both uses the basic HR function in addressing the needs of the employees and the organization in balance and strategically designed ways.

 

References

 

Abramson, MA, Demense, RB, and Gardner, NW (2002) ‘The chained gang: Human capital management’, The Journal of Public Inquiry, Spring/Summer, 43-48

 

Alvesson, M (2002) Understanding organizational culture, Sage, London

 

Brown, MP, Sturman, MC, and Simmering, MJ (2003) ‘Compensation policy  and organizational performance: The efficiency, operational and financial implications of pay levels and pay structure’, Academy of Management Journal, 46, 752-762

Budhwar, PS, and Debrah, YA (Eds.) (2001) Human Resource Management in Developing Countries, Routledge, London

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Burke, RJ, and Cooper, CL (2004) Reinventing Human Resources Management: Challenges and New Directions, Routledge, New York

 

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Chesser, J, Shah, A, Sterett, C, and Wilmore, J (2001), ‘Meeting the need for employee development in the 21st century’, SAM Advanced Management Journal, 26; 2, 22

 

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Evans, P, Pucik, V, and Barsoux, JL (2002) The Global Challenge. Frameworks for International Human Resource Management, McGraw-Hill/Irwin, New York

 

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Hornsby, J, and Kuratko, D (2005) Frontline PR: a Handbook for the Emerging Manager, Thompson, Crawfordsville, IN

 

Kamoche, K, Debra, YA, Horwitz, FM, and Muuka, GN (Eds.) (2004) Managing human resources in Africa, Routledge, London

 

Peltonen, T (2006) ‘Critical theoretical perspectives on international human resource management’ in Stahl, G. K. and Björkman, I. (eds), Handbook of Research in International Human Resource Management, Edward Elgar, Cheltenham, pp. 523–535

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Sambrook, SA (2000) ‘Talking of HRD’, Human Resource Development International, 3: 2, 159-178

 

Santos, JC, and Santora, JC (2001) ‘Leaders and values: a cross-cultural study’, Leadership & Organization Development Journal, 22: 5, 243-248

 

Schermerhorn, JR Jr. (2001) Management (6th edn), John Wiley & Sons, Inc., New York

 

Schuler, RS, Budhwar, PS, and Florkowski, GW (2002) ‘International human resource management: review and critique’, International Journal of Management Reviews, 4: 1, 41–70

 

Sims, RR (2002) Organizational Success through Effective Human Resources Management, Quorum Books, Westport, CT

 

Von Glinow, MA, Drost, EA, and Teagarden, MB (2002) ‘Converging on IHRM best ptactices: Lessons learned from a globally distributed consortium on theory and practice’, Asia Pacific Journal of Human Resources, 40: 1, 146-166

 

 

 

 

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