Transfer of HRM Policies and Practices by MNCs
The transfer of HR policies and practices by the MNCs as a component of information and knowledge transfer within the departments and units of the firm involves a multi-stage process beginning from the identification of the knowledge itself to the actual transfer process. Considering MNCs’ context, the transfer occurs through the process of diffusion of knowledge either as direct or reversed diffusion. Consequently, the MNCs scrutinizes the stated policies and practices of HRM used at their headquarters if they can be applied across the boarders’ even if the policies are performing better. The transfer process can take place at different levels at the multinational firms.
The operations of the transnational firms oversees are guided by factors affecting human resource practice transfer namely the nature of the subsidiary, administrative mechanisms, and the global business methods. First and for most, the international business strategies constitute foundational sources of human resource practices and contingencies. The strategies applied in this level aids in the redefinition and shaping of the entire HR policies and practices in the multinational firms. According to Baldwin (2010), the relationship between the choice of human resource police or practice and business strategy implemented by a firm are predictable.
Although organizations may choose to include in the strategic management and decision making the personal affairs, there exists clear evidence that organizations under-utilize Human resources compared to other strategic levels within the organization such as technology, production, transport and logistics, and finance. In such cases, the human resource guidelines are often short-term leading to underutilization HRM in the firms. Secondly, other firms apply the concept of administrative heritage in the mirror image of factors such as the founder manager’s values and norms, social systems and culture of his or her home country, and the firm’s history in the international arena. For example, the cases where the beliefs and styles of the top management concerning the roles of HRM at the strategic management and its competencies have strong influences on the transfer process of the HRM policies to oversee subsidiaries.
Another concept of the transfer HRM policies by the multinational firms is the nature of the subsidiary at the oversee operating from policies of the parent firm. The nature of the subsidiary like ownership, size, and age would determine the variety of human resource policies implemented by the subsidiary. Notably, human resource practice is characterized by getting to be formalized and standardized with time. Therefore, if the subsidiary formulates its guidelines, there would be a likelihood that it will be less dependent on the parent organization or firm.
Facets of HRM Policies and Practices in MNCs
The HRM practices and policies in the transnational firms are determined by the opposing or parallel forces and interplaying facets such as organizational effects, host country, home country, industrial effects for isomorphism to the local authorities. The interactions of the forces of influence resulting in the HRM practices and policies in the long-run. There are also unique cases where the HRM policies become very responsive and sensitive to the local adaptation pressures as others change with micro consistency. However, the stated facets are flexible and can change immensely. In situations where the host country may decide to alter or foster the amendments on the legislation that fundamentally relates to the HRM or the entire external environment of the industry can be altered adversely affecting the HRM practices concerning the host country laws.
For example, Orange S.A’s strategies of human resource management introduced the strategic plans for the year 2020 to adapt to the current changes in human resource management. A major part of the strategic plan was the dedication to established new trends in the relationship between its employees and company management. Their major objective was to establish a turnaround in the environment of work that would lead to most of its employees recommending the company both at the home and oversea countries as a perfect employer. The plan anticipated creating new prospects in the employees through the following: developing employees to acquire skills required for the better performance tomorrow.
Since communication patterns are currently changing rapidly, Orange Company offered development and training programs to both of its new and old employees. To achieve this, they assign the same training programs to employees from different countries intending to strengthen their morale and to establish distinct culture and values to the company. Also, the aspect of collective agility development helps the multinational firms smoothly operate in the cross borders. For the overall productivity to be improved in the foreign branches, workers with equal advanced tools must be assigned to equitably enhance cooperation between subsidiaries and also improve the quality of work environment such as wages and pay, terms of work, contracts, working hours, and motivational benefits.
The need to foster individual commitments is also a principal component in the operation of transnational firms. Companies like Orange invented in offering career development and opportunities to the people across the world without any discrimination based on race, color, or language. For instance, Orange outsources its employee from a wider range of experts, cultures, customs, and languages. Best talented individuals are given a chance to hold top management positions ensuring good and sustainable human resource planning. The whole process is done with consideration of the hosting countries’ laws and regulations. The example of such companies is the likes of Orange Luxemburg that received the global certification in the year 2020 as the top human resource practices compliant.
In the United Kingdom, the industrial human resource priorities revolved around industrial peace leading to diversification of the HRM policies and practices to form inclusive management structures in organizations. Human resource function is highly valued in the UK thus leading to a high rate of career and professional development. Consequently, all the multinational firms operating their subsidiaries in the UK must consider valuing HRM practices in place to realize success. For best practices of HRM in the UK, the government established the Chartered Institute of Personnel and Professional Development (CIPD) whose members bear the commitment of upholding a professional code of conduct and ethics.
Currently, the major development in the economy has rendered meaningless the aspect of boundaries among nations. Foreign firms, business entities, and organizations also align to the same road map giving attention to the host country culture and integrating them into their HRM practices to shape the culture of such firms. Subsidiaries would be more prosperous if they integrate a wide range of communication strategies to their workforce. The UK transnational firms apply HRM policies that are designed with flexibility. The HR selection and recruitment may take different dimensions from those of the parent policies. For example, CVs, interviews, references, and application forms and procedures may be common but other techniques like the area of assessment and psychometric tests may not be common as such.
The selection process used may be objective criteria based on the applicants’ experience and education through the interview is done to all the applicants until the last stages of the employee recruitment process. Also, they consider development and training on HRM practices. This is because the fundamental foundation favorable competition to achieve the organization’s objectives underlie the efficient and effective maximization of human resources available. The UK firms use a lot of resources on personnel training and development every year through organizing travels, conferences, and seminars to inform the employees about the current market conditions and company policies and practices.
The training and development programs are closely monitored to point out the necessary changes to be created to enhance the productivity and competitiveness of the employees. On the same note, the success of the management also depends on employee remuneration management in the industry. The multinational firms have reward and motivational systems both at the parent and subsidiary levels to reflect on the individual’s contribution to the organization. Considerably, payments can give a reflection on the extent to which employee’s work is recognized and appreciated, how achievements and performances are appreciated, and how the behavior is highly valued in the organization. The payments are equitable with no discrimination either on sex, age, color, race, or language.
As stated in the human resource practices, some factors determined the number of salaries and wages employees should be given but most importantly is the organizational or company culture. The firms then need to establish the benefits and reward systems and policies that are attributed to the company culture.
On the matters of HRM recruitment and selection criteria, the multinational firms are expected to create a global database locating all their talents to simplify the process of recruitment and selection. This is very possible as the transnational firms have more strategic opportunities worldwide that can be used to closely monitored professional and career growth and development to mentors, numerous managers. Even though the firms for a long period compile global human resource databases, there has been more focus on the strategic levels of the organization abandoning unitary and middle managers who can grow into potential managers in the future.
For example, I.B.M compiled a database for the prospect managers both senior and junior managers 20 years in the future giving the details of the managers, doing track records of their performances with periodic reviews. Worldwide employee’s coverage is also done linking various databases in the organization. This is done to ensure flowing and sustained human resource planning. The problems of organizations coming into a standstill when some of their managers exist are thus solved and at the same time keeping the organizational culture. Some firms face challenges in segmenting their businesses to become innovative in terms of handling employees’ affairs. Therefore, business owners, entrepreneurs, and managers should be well acquainted with the human resource management approaches and models of the parent organizations before deciding to establish subsidiaries in foreign countries.
Cases where firms need to fill the vacant positions, they should go for internal advertisements to get the potential employees who are familiar with the company culture. This makes it very difficult for the companies to get suitable people to fill the positions forcing different firms such as I.B.M and Unilever to go for the worldwide internet advertisement of vacant posts. For example, Unilever normally takes the two lower pools in its advertisements though the strategy varies from one country to the other and business departments. The internal advertisements are attributed to the benefits such as career development within the company, competitive allowance for the markets for internal jobs across genders, nationalities, races, and sex, sustainable continuity of company functions and roles, and maturing of companies’ best talents.
Conclusion
The majority of the transnational firms currently are performing better due to the globalization of supply chains in the significant raw materials except for human resources. The talent competition has since intensified as most of the companies adopt human resource practices in the operation of their respective departments. Multicultural practices are also coming to boost skills and visions of personnel working in such companies. Therefore, the firms must consider planning for training, recruitment, and retention of managers in their subsidiaries. The major essence of worldwide human resource programs is the assurance of cultural mix, managerial mobility, and right talent that help in the effective operation of all departments and units.