There are many connections between domestic and international human resource practices. They regard to planning and staffing, recruitment and selection, rewarding, as well as development and appraisal. Human resource practices can interlink with each other to the extent that no one will be able to recognize any difference amongst the two.
On the other hand, there are two means to distinguish them. The first one is the intricacy of working in other country, where the company has to accustom its procedures and policy to the local laws and customs. The second one is the actuality of having to employ numerous local people. This will aid to ensure that there are employees that are already familiar to the customs and laws of that area.
Working internationally has enlarged the work level and the complexity and challenges of supervising networks of new employees in addition to new companies. When considering HRM from this viewpoint, the corporation has to take care that its workers are generating balance in the organization in general as well as in the local subsidiary they are working. Adjusting to the neighboring environment is the most important part of becoming successful in the region. Corporation has to completely be aware of how favorable circumstances similar to these can be and has to make every endeavor to succeed. The corporation may fail if does not adapt to the cultures of the county (Dowling & Engle, 2013).
International and domestic HRM processes are diverse in many ways. The group of international managers has to administer the employees’ level that they employ with care. They have to make certain that company is completely staffed. The managers also have to ensure that they are employing people from diverse cultural and national backgrounds. One rationale asserts that companies do not succeed when they endeavor to expand into diverse countries since they are short of knowledge and do not consider the supervision difficulty of staff members of multinational groups, while in a domestic atmosphere, the employees managing is much simpler.
Attempting to apply domestic approach of management worldwide, the company does not take into consideration precise changes that are required. HR managers that operate in global environment have to deal with issues of HR that they would not face when working with merely one nationality. Consequently, global HR managers have to generate an additional complex system for international locations. Managers in the neighboring surroundings simply contract with issues of HR that are relevant to their locality and their work is more simplified than the global HR systems. Global HRM deals with a wide series of activities whereas domestic HRM uses issues pertaining to employees belonging to a single nationality.
Two aspects that would have an effect on the human resources standardization are employee relations and compensation. Employee relation is an area that plays a huge role when looking at its effects on the HR department. The HR department has to ensure that it is offering the best possible employees training. The managers also have to create an outcome plan to make professional growth of the workers possible (Benjamin, 2014). Continuous watching of retirements and workers that have to abruptly leave the business owing to unmanageable situations will possibly influence the performance of the company and the work performed.
Political factors, external influences, and organizational culture are directed to sink the total of grievances and complaints HR has to deal with. When contracting with compensation managers will have to keep to the compensation policy that is being adopted in the industry the company is operating. Managers have to continue being aggressive with the competition if they desire to have the competent employees that are accessible for hiring. Consequently, to keep the staff the company already has, the corporation or HR department has to be proficient in adjusting wages rates in the moment they discover a market compensation increase when the employees are up for assessment (Benjamin, 2014).
HR also has to ensure that the structure of internal compensation is reasonable. For instance, experienced workers with expert qualifications must be paid more than their fresh just graduated colleagues executing similar tasks.
In the world of business it is beneficial for an MNE to introduce an international corporate culture for every subsidiary. The reason for this is reinforcing the inner knowledge of global relations and their procedures and policies that have to be followed. This makes simple job transfers possible owing to promotions and enhanced level of additional opportunities for new employees. For the domestic subsidiary such approach lets the corporation have additional diverse staff and make the company be culturally conscious of what is going on globally and not just in its own “backyard”. Making this an ordinary practice inside all of the entities would be a constructive development for all big corporations with subsidiaries.
Evaluating global innovators and implementers would be a tough task to do. There are many companies worldwide that have taken the stride to enter the international market. These business giants have many subsidiaries and are being in numerous diverse countries in service. The difference would be unfair based on the laws that they are complying in those nations.
Venturing into a new global market without conducting any research can make the corporation lose out a lot of money. Prior to making any kind of shift to a new location company must have a team carrying out field research. Its results should show demand for services or products that corporation is going to provide in that precise region. Managers will also require looking at import and export regulations and all kinds of laws that administer entering to the location. By making a good start with such research, the corporation will be in front of the game and will gain understanding whether this is a good qualitative idea or not for the corporation.
On the one hand, diversity of culture and environment is a vital matter in global human resource management. On the other hand, there are two extra factors that induce the HRM practices localization for an MNE. These two issues are employee safety and terrorism issues. They might go hand in hand, however these are two detached entities that have to be addressed and put into HRM policy. Anytime corporation has its employees operating in a foreign country, it requires to consider the risky issue of terrorism. Workers’ safety has to be the number one priority when creating a global operation. Regardless of what country company possibly will prefer there is always a threat to it or its employees as all of them would be foreigners in the chosen country.
Impact of Cultural Context
- Recruitment and selection. In societies with low level down of “in-group collectivism” achievements of individuals serve as relevant choice for growth. In cultures with high rate of “in-group collectivism” the stress of the process of recruiting will be put in the direction of grouping skills to a certain extent rather than on one expertise of person.
- Training and development. In societies which stress on gender social equality of women, females can receive equivalent growth opportunities with men. In societies which have low level of gender social equality a female manager would be hardly perceived in her place of work.
- Compensation. In societies with high level of uncertainty employees incline towards not looking for alternative jobs and would strive for the security of job. They will not resort to looking for something that is uncertain. While in societies with low rate of uncertainty employees would probably look for various alternatives outside their organization and are not much concerned about security of job.
- Task distribution. Societies which are oriented on collectivism appear to stress on team work, while societies with high individualism appear to deliver more through the individual progress in the organization.
Impact of Institutional Context
- Recruitment and selection. System of education: the educational institutions’ reputation and classification, such as private and public universities, vary in diverse countries. This is reflected in the criteria of the recruiting and selection process of the firms in those countries.
- Training and development. Education systems vary among diverse countries. This has an outcome on the training needs recognized and rewarded by MNE’s.
- Compensation: Industrial relations and legislation. Legislation, for instance, determines individual union agreements or minimum wages regulation in reverence to compensation. This issue has an effect on the firm’s compensation choices referring to pay level and pay mix.
- Task distribution: norms and legislation. Respective norms and legislations sustain division of labor based on gender to different extent in diverse countries. While in many countries number of female managers is moderately high, in other countries it is not ordinary that women work at all.
Before shifting a business to a foreign country, there is a group of things that have to be considered prior the process begins. Otherwise, business will be doomed for letdown, or it can be shifted to an area where company and its employees could be harmed by global incident.