CRITICAL EVALUATION OF PALM, INC.’S INTERNATIONAL HUMAN RESOURCES MANAGEMENT (IHRM) STRATEGIES AND PRACTICES FOCUSING ON CONSISTENCY AND APPROPRIATENESS
EXECUTIVE SUMMARY
This business paper utilized Palm, Inc as the model organization to review their present human resource management policies. From the analysis, key trends in the policies were identified, how the policy works and the position of Palm, Inc. were ascertained. The paper then moves on to assess whether Palm, Inc.’s espoused consistent international human resource management policies can contribute to its suitability to international competitiveness. Palm, Inc.’s internal capabilities in relation to its human resources policies were analyzed to assess the company’s performance as in international competitive business organization. Gaps in the capabilities and environment, with respect to Palm, Inc.’s human resource management policies were also identified.
Finally, several levels of business management strategies to improve the current international human resource management policies of Palm, Inc. were presented and evaluated in terms of appropriateness. Several key implementation issues related to managing strategic change were also identified. Recommendations to address international human resources issues relevant to the company were likewise presented as well as the feasibility in carrying out the options and acceptability within the key stakeholders and decision makers.
I. INTRODUCTION
In order to achieve the new objectives of the work organizations, changes and reformulations must take place; thus, resulting to the transition of both human resource management and industrial relations. Primarily, these changes can be attributed to the emergence of globalization. Industrial relations practices for instance, had changed so as to increased collective bargaining at the enterprise point, flexibility in relation to areas of employment as well as with regards to working time and job functions. The change in industrial relations had been encouraged due to the increasing global competition, rapid development in products and systems as well as the emphasis on the importance of quality, productivity and skills of the employees (1994).
In the same way that these factors had caused an impact to industrial relations, human resource management policies and practices were also affected. Employees have to be involved so as to overcome the changes and increasing competition. Organizations should then ensure that their laborers are equipped with the necessary skills for the creation and development of goods and the provision of services that the global market will accept. Human resource management now manages the workforce in a way that will motivate the employees to be more productive. In order to induce productivity and quality among the employees, human resource management incorporates work motivation through training and rewarding their employees. The realization of the goals and needs of both management and employees and the significance of commitment and training had become the top priorities and important activities of the human resource management.
By delving into this business management paper, the author intends to have better insights into how human resources of organizations and companies are being managed. Utilizing strategic analytical tools as well as analyzing Palm, Inc.’s current human resource management policy, the author hopes to have an in-depth understanding as to how Palm, Inc. as an organization is able to function effectively and profitably in this era of internationalization through the maximization of the potentials of its international human resources.
Two key focal issues were focused upon i.e. innovation and diversity. Innovation is discussed with regard to strategic change where Palm, Inc. is renowned for its human resource policies that are constantly developing. Diversity comes under strategic thinking and formation as the company must consider the diverse culture, political climate, economic surroundings, social environment, technological settings, government policies and legal systems in developing its human resource policies to become a leading player in the mobile computing industry.
II. INTERNATIONAL HUMAN RESOURCES MANAGEMENT (IHRM)
As (1994) pointed out, human resource management had transformed itself as more emphasis is stressed on commitment and control. Quality, competence and flexibility among the employees had efficiently replaced quantity of task accomplished and dumb obedience. Furthermore, the objectives of the management become concentrated on the adoption of modernization, quality and cost reduction. As human resource management requires and demands more from their employees, work is then intensified resulting to less slacking of the management.
Aside from globalization, changes in the HRM management have occurred due to cross-national dissimilarities. The diversities among nations are likely to develop practices that are different from other countries (1999). In reality, human HRM practices are subject to distinctive sets of national rules as well as sensitive analysis of labor unions whose strength and thoughts towards management differ. Thus, this concept is contrary to the idea of HRM as a high managerial autonomy (1993; 1997).
Multinational companies like the Palm, Inc. need to manage human resources at an international setting. This “process of procuring, allocating, and effectively utilizing human resources in a multinational corporation” ( 2002, ) is referred to as international human resources management, or IHRM. The establishment of a new facility in another country entails that human resource managers achieve two strategic objectives. One is that the managers must integrate HRM policies and practices across a number of subsidiaries in different countries in order that common, or global, corporate objectives be achieved. This means that the manager has to reconcile and incorporate local HRM policies with the existing company policy. Also the management approach must be flexible enough to allow for differences in the HRM practices of various countries, and yet adequate to be effective in various business settings. This is done to allow the head office control of the whole operation.
IHRM basically involves the same duties as domestic HRM. However, while the domestic HRM handles local (from one country) employees, IHRM handles international employees. IHRM personnel are responsible for the relocation and orientation of foreign employees and help them adapt to the new culture. IHRM encompasses more functions, involves changing perspectives, requires more involvement in the employees’ personal lives, is influenced by more external forces, and generally involves greater risks than domestic HRM ( 2004). IHRM staff deals with international taxation, international relocation and orientation; provides administrative services for expatriates; are responsible for the selection, training, and appraisal of international and local employees; and manages the host government relations (2002).
International HRM personnel need to address a variety of national and international pay issues. HRM personnel in the headquarters must coordinate pay systems in different countries with different currencies. These currencies change in relative value to one another with time. They also need to consider the fringe benefits provided to host-country employees as these benefits vary. Headquarters-based managers also need to deal with employee groups that have different cultural backgrounds. The headquarters manager must coordinate policies and procedures to manage expatriates from the firm’s home country, or parent country nationals (PCNs); host country nationals (HCNs); and third country nationals (TCNs). The domestic HRM personnel must also develop HRM systems that are satisfactory in the host country and also attuned with the company systems. These policies and practices must effectively balance the needs of local employees, PCNs, and TCNs.
Domestic HRM personnel must also arrange housing, health care, transportation, education, and recreational activities for expatriate and local staff. The headquarters-based HRM personnel have to set EEO policies that meet the legal requirements of both the home country and that of the host country. Domestic HRM personnel may have to deal with government ministers, other political figures, and a greater variety of social and economic interest groups.
HRM personnel need to be aware and careful about unfair hiring practices, as they may result in the company’s being charged with violation of EEO laws and subjected to financial penalties. Failure to establish constructive relationships with domestic unions may lead to strikes and other forms of labor actions. High-cost problems like expatriate failure or the premature return of an expatriate from an international assignment need to be addressed by HRM personnel so it can be prevented. Expatriate failure is a high-cost problem for international companies. Direct costs like salary, training costs, and travel and relocation expenses per failure to the parent firm may be as high as three times the domestic salary plus relocation expenses, depending on currency exchange rates and location of assignments. Indirect costs such as loss of market share and damage to international customer relationships may be considerable. Clearly, if managers do not perform well and must be recalled to the home country, their failure represents a huge financial loss for the firm.
Another consideration is the expropriation or seizure of the MNC’s assets in a foreign country. If HRM policies antagonize host country unions or important political groups, the MNC may be asked to leave the country, have its assets seized, or find the local government taking majority control of its operation. This will be a great loss to the company and needs to be prevented. All these are in line with the contextual paradigm, which is widespread in the UK and other European countries. This paradigm explores the importance of such factors as culture, ownership structures, labor markets, the role of the state and trade union organization as aspects of the subject rather than external influences upon it (2000).
III. THE PALM, INC.
A. Overview of the Industry
Gone are the days when employees work on their desks for eight hours a day. Today’s employees want to utilize their productivity tools and interact with different individuals and groups in different settings. The technological advancement in wireless technologies has allowed workers and employees to access communication tools in new settings.
Research from Cahners In-Stat/MDR revealed that there are more than 78 million remote and mobile workers in the United States alone ( 2002). It also states that the provision of access to mobile business applications and wireless access to the Internet to the workers and employees will be key priorities for business. On the other hand, a study by Access Markets International (AMI) Partners Inc. predicts that more than half (67 million) of the US domestic workforce will be mobile by 2006 ( 2003). This should create an enormous demand for wireless data/Internet solutions.
B. Company Profile
Palm, Inc. is a business entity specializing in mobile computing. Its products enable its customers to put the power of computing in their hands, along the process accessing the information they need. Palm, Inc. was established in 1992 by , which later co-invented the Palm Pilot ( 2001).
The company’s products for consumers, mobile professionals and businesses include Palm® Treo™ smartphones, Palm LifeDrive™ mobile managers and Palm handheld computers, as well as software, services and accessories. Palm’s products are equipped with a comprehensive suite of Personal Information Management (PIM) software, infrared beaming capabilities, calculators, note-taking applications, and games. A range of additional features—including hi-res color screens, wireless capabilities (Bluetooth®, Wi-Fi, cellular), MP3 software and digital cameras—ensures that there’s a Palm product to meet almost any user’s needs.
In 1995, Palm, Inc. was acquired by U.S. Robotics Corporation. A year later, the company introduced the Pilot 1000 and Pilot 5000 which revolutionized hanheld computing technology. In June 1997, Palm, Inc. became a subsidiary of 3Com when the U.S. Robotics Corporation was acquired by 3Com. As its subsidiary, 3Com then made Palm, Inc. an independent company on March 2, 2000 through a public trade under the ticker symbol PALM. In August 2003, the company renamed its hardware division to palmOne, Inc. In April 2005 palmOne was bale to buy PalmSource’s share in the ‘Palm’ trademark for about US million. Then just last July 2005, palmOne launched its new name and brand going back to Palm, Inc. and trading under the ticker symbol PALM (2004).
C. Company Mission / Corporate Objectives
Palm, Inc. aims for sustainable growth as a broad market leader in mobile computing as well as for segment leadership. In both cases, the Palm, Inc. brands will play a crucial part. Palm, Inc. is able to establish its broad leadership usually by acquiring other strong mobile computing companies and their products, which are then combined into a new, larger company. Offering training to its employees, improving the company operations, and the introduction of new technologies then reinforces the positions of the various Palm products ( 2004). This practically results in economies of scale that is able to create a distribution network for both the local and international Palm products. If a market is already in the control of other mobile computing companies, Palm, Inc. devotes its attention towards the development of a premium segment with its various Palm products.
The mission of Palm, Inc. is to secure the growth of the business in a sustainable manner, while at the same time constantly improving the company’s profitability. The strategy to achieve this involves four elements:
IV. CONSISTENCY WITHIN IHRM STRATEGY COMPONENTS
A. Palm Inc.’s Human Resources
Palm, Inc. knows that its future depends on the company’s ability to attract new personnel and retain existing personnel in key areas including engineering and sales. None of the company’s employees is subject to a collective bargaining agreement. The company considers its relationship to its employees to be good. As of June 30, 2003, Palm, Inc. has a total of 982 employees operating within a company organization structure. The company’s management team includes:
A. – President and CEO
B. – Senior Vice President for Worldwide Sales and Customer Relations
C. – Senior Vice President for Worldwide Marketing
D. – Senior Vice President for Global Operations
E. – Founder and Chief Technology Officer
F. – Senior Vice President for Engineering
G. – Chief Financial Officer
H. – Senior Vice President for Business Development
I. – Senior Vice President and General Counsel
J. – Senior Vice President for Human Resources
The board consists of three standing committees: Audit Committee, Compensation Committee and the Nominating and Governance Committee. A majority of board members are independent of the company and its management. The Audit Committee of the board has established policies consistent with the newly enacted corporate reform laws for auditor independence. The independent members of the board meet regularly without the presence of management. The charters of our board committees clearly establish their respective roles and responsibilities.
The company has a clear code of ethics and all employees must affirm their acceptance of this code. The code of ethics includes a conflict of interest policy to ensure that key corporate decisions are made by individuals who do not have a financial interest in the outcome separate from their interest as company officials. The company actively monitors compliance with the law and the global financial policies and practices over critical areas. These areas include internal controls, financial accounting and reporting, fiduciary accountability and safeguarding of our corporate assets.
All these efforts to promote order within the firm through effective and efficient human resources management strategies and practices are implemented by Palm, Inc. in order to facilitate consistent observation of the company’s policies and regulations as well as to define standard and globally competitive administration of employees and staff for the overall benefit of the business organization. Since the company participates in the international business arena, there are HRM policies that Palm, Inc. adheres to across its various regional establishments around the world so as to address equally all the human resources concerns and issues regardless of cultural and economic differences as well as promote social welfare and development while gaining control in the entire operation of the company.
B. Palm, Inc.’s Human Resources Management Policies
Palm, Inc.’s Human Resource Management Policies are divided into four (4) main policies: (1) equal opportunity and employment practices, (2) compensation and benefits management, (3) development and training management, and (4) records disclosure management. All these company policies and regulations are observed by all employees and staff of Palm, Inc. in all its offices and firms worldwide. Such strategy enables the management to deal with human resources issues of the company based on legitimate and equal grounds.
Equal Opportunity and Employment Practices. Palm, Inc. does not allow employment discrimination on the basis of race, gender, religion, age, or against qualified disabled persons. Moreover, the company does not allow the lowering of bona fide job requirements or qualifications in order to give favor to any applicant for employment. Lastly, Palm, Inc. does not allow all its employees, including, managers from taking any grudge against any person making allegations of violations of the company policies.
Compensation and Benefits Management. Palm, Inc. determines how it will implement the Compensation and Benefits Management System which is the basis for ensuring the equitable implementation of pay decisions. The Palm, Inc. Salary Administration Plan administers the company’s internal compensation philosophy and policies, recruitment and selection process, performance management, administration of pay practices, and program evaluation plan. Palm, Inc. regularly evaluates this plan to make sure that its employees are continuously complying to the company policies as well as with the company’s mission and organizational needs.
Management Development and Training. Palm, Inc. provides various employee training sessions appropriate for them to be able to help the company in achieving its mission and accomplishing its objectives. The company appoints an employee that is capable in helping to implement its training and development programs and serving as coordinator for the duration of training services. It also develops a biennial training plan which includes a training needs assessment, an action plan illustrating the objectives and approaches through which the plan can possibly be done, and funding needed to implement the plan.
Records Disclosure Management. Certain personal information needs to be divulged to third parties upon request of Palm, Inc. and may be relayed to others without necessarily the knowledge and consent of the subject employee. This information includes the employee’s position title, job classification title, dates of employment, and annual, official or rate of pay. The personnel records of Palm, Inc. employees are maintained in a safe place. Employee records are confidential and, therefore, access is limited to authorized persons only.
C. Roles of Managers: Performance Development and Management
The system theory assumes a synchronized work environment. To synchronize the parts of the organization, it is necessary for the productivity of the company is ensuring the effectiveness of the organization. An organization needs constantly to take stock of its workforce and to assess its performance in existing jobs for three reasons:
- To improve organizational performance via improving the performance of individual contributors.
- To identify potential, i.e. to recognize existing talent and to use that to fill vacancies higher in the organization or to transfer individuals into jobs where better use can be made of their abilities or developing skills.
- To provide an equitable method of linking payment to performance where there are no numerical criteria (2002).
Gathering Information. Managers have the primary role to make specific identifications of all the possible sources of evaluation information which includes observable employee behaviors. This is because aside from the observations of the immediate supervisor, performance evaluation information can still come from a variety of other sources, including the employees, subordinates, and work products (2001). Whenever Palm, inc. utilizes performance information from individuals other than the employee’s immediate supervisor to build up the employee’s annual evaluation, the management informs the employees of the possible sources at the start of the performance cycle, where they receive their performance plans.
Development and Presentation of Performance Plans. Palm, Inc. managers are the ones who develop their employees’ performance plans according to instructions on the Palm, Inc. Employee Work Profile form. The plans are signed by the managers and then passed on to the management for approval. Managers make sure that performance plans are complete and adequate before signing the forms ( 2003). The manager also discusses the performance plans with the Palm, Inc. employees in a clear and organized manner. Generally, discussions are conducted within 30 days of the start of the performance cycle. With regards to Palm employees who are starting at a new position, discussions are normally held within 30 days of the employee’s starting date (2003).
Documentation and Identification of Substandard Performance. Palm managers document their employees’ performance and provide feedback to them from time to time throughout the performance cycle. Documentation normally occurs in the form of memos, and these are retained in the manager’s confidential files, instead of being in the employees’ personnel files ( 2002). Palm managers also have the authority to determine substandard or unacceptable performance (2002). Managers normally address minor or marginal performance issues through performance counseling and coaching.
V. APPROPRIATE LEVELS OF “FIT” OF IHRM STRATEGIES
There is definitely a need to reconcile both the inside-out and outside-in capabilities of the company. While Palm, Inc.’s human resource development policy involves focusing on its human resources as its core competencies with market position following its resource base, the company will be put into a disadvantageous position should it choose to neglect both the macro as well as industry environment. Therefore, Palm, Inc. has to be aware of the latest human resource development changes, as well as changes in political, economic, legal and even demographic trends in order to develop the outside-in capabilities, such as market sensing, customer linking, channel bonding and technology monitoring.
A. Business Level Strategy
The advantages enjoyed by the company may come in the form of increased revenues. Knowing what the market demands and the latest trends could help Palm, Inc. fully exploit its research and development capabilities to come out with innovative human resource development efforts which are cost-effective but high in quality and performance. The strategic option can even be used as marketing tool where the focus is on staying close to your employees and listening to their feedbacks. On the flip side of the coin, there will be huge mobilization of resources involved, and the associated risks bestowed on the company.
Nevertheless, the mentioned strategic option seems the most practical in the wake of globalization, since there is a sudden shift towards a more integrated and independent human resource development. The key stakeholders too should not have any objections so long the company’s core business is not threatened. By virtue of Palm, Inc.’s centralized control of its subsidiaries, it is being expected that major barriers should not exist in carrying out such an option except additional time may be required given the scope and span of Palm, Inc.’s operations.
B. Corporate Level Strategy
The Palm, Inc. Board of Directors and management believe that sound principles of corporate governance are critical to obtaining and retaining the trust and respect of stockholders, employees, other stakeholders and the public. The Palm, Inc. board serves at the discretion of Palm, Inc. stockholders and works to represent their interests by enhancing business strategies and practices for the creation of long term stockholder value.
As such, understanding the strategic importance of human resource development of its employees is something Palm, Inc. has to be familiar with. Palm, Inc. normally practices a centralized and globally scaled development of capabilities among its employees. This allows information dissemination to be retained at the corporate headquarters of Palm, Inc.
C. Network Level Strategy
There are various strategic options available for Palm, Inc. These are enumerated as follows:
· Tie up with various mobile computing companies
· Collaborate with major competitors
· Alliances with leading players in human resource development
A tie-up or merger with various mobile computing companies offers tremendous benefits in terms of access to the company’s human resource development strategies and even its resources. However, Palm, Inc. must not lose sight of its core competencies while pursuing these tie-ups. Otherwise, the image of Palm, Inc. might be put in jeopardy.
Meanwhile, the collaboration of Palm, Inc. with its major competitors can be seen as a ridiculous move at first. However, upon close examination, this move could pave the way for Palm, Inc. to improve even more its human resource development policies and strategies. The bottom line is both sides would be able significantly gain in such an alliance. Palm, Inc.’s strengths in product development combined with the human resource development capabilities of either Compaq or Microsoft can transform them suddenly into an unbeatable force to reckon with. Also, equal opportunities are created among the human resources of the companies involved. One possible setback, however, is the differences in the cultures of the companies involved. Another possible setback could be whether any of Palm, Inc.’s competitors has the need to form alliances.
The third option also focuses on alliances, but this time with organizations specializing in human resource development. The benefits of these alliances should outweigh the costs in the long run.
In terms of appropriateness, all three options are able to directly address the current human resource development issues mentioned. However, the question remains whether Palm, Inc. could be able to implement any of these options, and whether these options can be acceptable to the key stakeholders. Any merger or alliances may also involve the sharing of expertise. Palm, Inc. has traditionally relied on the inside-out approach. It is important to note that any merger transactions would have many implications on the company’s values and culture as well as the resources. The key stakeholders definitely would be concerned with such options and need to be convinced of the positive aspects. Somehow, Palm, Inc. will be able to overcome this barrier in managing strategic changes in the process of implementing any of the above mentioned strategic options.
VI. RECOMMENDATIONS FOR MAXIMUM COMPETITIVE ADVANTAGE
IHRM is about understanding, researching, applying and revising all human resource activities in their internal and external contexts as they impact the process of managing human resources in enterprises throughout the global environment to enhance the experience of multiple stakeholders, including investors, customers, employees, partners, suppliers, environment and society.
As with organisation, “people are the most valuable asset”, employee satisfaction – ensured through proper motivation and compensation – must be carefully considered by the Human Resource team. This must be done to retain good staff and to encourage them to give of their best while at work requires attention to the financial and psychological and even physiological rewards offered by the organization. This is made more complicated by the trends of internationalization necessitating a more extensive yet flexible human resources management approaches that will best apply to a particular organization.
The results of the analysis carried out on the human resource development policies of Palm, Inc. indicated very significant benefits for the human resources of the company, even amidst the threats of unrest. Therefore, we could conclude that the human resource development policies of Palm, Inc. could still be expected to expand and progress. The review of Palm, Inc.’s human resource development policies also revealed very little inconsistencies considering the company’s strategies. This is coherent with Palm, Inc.’s traditional inside-out approach. However, the need to reconcile both the inside-out and outside-in approaches becomes imperative now for Palm, Inc.
The analysis among the environment and human resource development capabilities of Palm, Inc. revealed certain gaps, most of which are biased towards the environment. However, these gaps paved the way towards determining a number of recommended strategic options to secure Palm, Inc.’s human resource competitiveness. Also, Palm, Inc. has to find a balance between adherence to internal forces within the company and to the changing forces of the environment in order to implement such strategic options.
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