Running head: CONCEPTS OF HUMAN RESOURCE MANAGEMENT IBU5HRM International Human Resource Management in a Global Economy Concepts of Human Resource Management Assessment 1 Kevin Raju La Trobe University1 CONCEPTS OF HUMAN RESOURCE MANAGEMENT Executive summary This assignment describes in brief the basic problems in the HRM strategy of the ‘Cosmos’ Aircraft Company, which is based in Australia. It shows the struggling of the Company and the probable reasons behind such outcomes. The CEO Mr. Adam is worried about its position and the future of the Company. The Company also helps in proving the importance of four key sectors for an organization such as Culture, Diversity Management, International Performance Management and Training & Development.2 CONCEPTS OF HUMAN RESOURCE MANAGEMENT Table of Contents Introduction................................................................................................................................3 Diversity Management and Culture...........................................................................................3 International Performance Management, Training and Development.......................................7 Recommendation .....................................................................................................................10 Conclusion ...............................................................................................................................11 References................................................................................................................................123 CONCEPTS OF HUMAN RESOURCE MANAGEMENT Introduction Human resource management is a valuable asset for any organization that constructs some principles for the operational working. They are responsible of proposing different actions in the organization to maintain a peaceful operation of works. A company can never prosper if it has internal conflicts. It can be because of several reasons such as cultural differences, diversity management and many more. For an organization that is looking on its international exposure, it has to have a proper management of cultural diversity. If that is not the case, cultural conflicts are probable there because of the fact that employees with different cultures and from different corners of world are expected (Bamberger, Biron & Meshoulam, 2014). ‘Cosmos’ Aircraft is an Australian Company, which also has its subsidiaries in China, Vietnam and Singapore. The CEO Mr. Adam is worried about the profit of the Company. The CEO is suspecting a take over from its rival companies. It requires a makeover in some of the most important areas of HRM such as culture, diversity management, training & development and international performance management. This assignment helps in analysing the literature on culture, diversity management, training & development and international management of performance with the help of the given case study on ‘Cosmos’ Aircraft. IT also recommends some solution to the Company based on researches on the concept of HRM. Diversity Management and Culture Culture The changing form of organizational structure is pitting extra pressure on the shoulders of the HRM as globalization has brought employees with different cultures under the same4 CONCEPTS OF HUMAN RESOURCE MANAGEMENT roof. For an example in the case study, the ‘Cosmos’ Aircraft operates in three other countries such as Vietnam, Singapore and China. It is bound to have employees of different cultures and orientations in these three regions. Nevertheless, an organizational performance is more or less dependent on its employees, which means that there is no place for any cultural imbalances (Bratton & Gold, 2012). The diverse nature of employees does carry diverse range of characteristics such as their value systems, customs, which is very important for them. They rather are never comfortable on compromising on that part. There might be some cases of the absenteeism of an improper studying of the cultural values, which indeed is not favorable to the diverse culture of employees. As per the institutional theory, the HRM is largely dependent on the varied ‘[- ;cultures of different nations, which is subjected to test the HRM rules and regulations that has a different driving force behind it. The management of an organization is very much responsible for throwing his or her understanding on the HRM planning of action (Budhwar & Debrah, 2013). The variation in cultures might bring communication gaps in between employees and the management. For an example, foreign employees working in the Middle East Countries are bound to find difficulties in understanding the communication. This is also a fact that it is not that easy to learn Arabic in few moments. It requires a significant time span for learning the Arabic language (Flamholtz, 2012). Apart from that, most of the employees who are working in such companies are Muslims. It is probable that some kinds of bias behavior would happen in such countries. This is one of such problems of cultural diversity, which put the HRM under severe pressure. The HRM might not be able to put forth the solution to the problem identified because of the fact that it entirely depends on the management. It is their understanding, which is decisive in making such a strategy that could absorb the varied nature of cultures for the betterment of organizational performance (Guest, Paauwe & Wright, 2012).5 CONCEPTS OF HUMAN RESOURCE MANAGEMENT Critical Evaluation ‘Cosmos’ Company is suffering of cultural differences, which is creating communication gaps in between the employees. It has gradually developed a negative culture, which says that ‘almost enough is sufficient enough’ (Hendry, 2012). The worse is the mentality of the employees, which is resisting any changes that could happen from the HRM. One of the main problems that have been produced is about the quality of the product. The CEO if the Company is receiving many complaints for the product’s quality. They are even holding a substantial amount of payment (Elnaga & Imran, 2013). Integration is one of the major problems of the Company, which does not allow its team members in looking for a project as a unit. This is in big deal hampering the product quality. The team are dedicated to their area of expertise only. They are not cared for the organizational goals and objectives. It is very hard to find out the possible reasons behind such behaviours. However, it has put a challenging task in front of the HRM to find out the possible solutions for this problem (Khan, Khan & Mahmood, 2012). Diversity Management Diversity can be managed in organizations in numerous of ways. Some of the organizations do encourage the promotion of diversity in the operation through several diversity initiatives. However, some of the companies are in a favour of colour-blind approach for the management of diversity. Diversity management is of utmost importance for an organization as this is responsible for bringing integrated team works, which is very important for a quality operation (Lamba & Choudhary, 2013). The multi-cultural approach is indeed a very effective process, which aims on utilising the cultural diversity. It believes in embracing and nurturing the cultural diversity in employees.6 CONCEPTS OF HUMAN RESOURCE MANAGEMENT It is very effective in managing the diversity in the organization, which provides ample of benefits to the organization such as utilization of diverse range of skills from different orientations & cultures. It also allows implementing a wide range of strategies to promote the culture of diversity such as mentoring programmes for the minority groups. However, this approach creates some challenges in front of the management and the HRM because of the reason that this approach would lack the favour of all the employees. Non-minority groups can find this as a threat to their identity (Stahl, Björkman & Morris, 2012). ‘All-inclusive multi-cultural’ is a more handy approach for managing the diversity in the organization. It takes a transparent approach to verify the selection process. Moreover, it trusts on the credibility and the potentiality of employees, which indeed is immensely important for any organization that is eyeing on going global. To manage such an approach an environment that has diverse leaders needed to be identified and projected. A diverse leadership would open up door to all kinds of employees as it has the understanding of the benefits of the inclusion of diverse skills. Moreover, this kind of leadership is also very helpful in promoting the integrated form of working in the organization (Stone, 2013). Critical Evaluation The diversity management in ‘Cosmos’ is driven by a principle that supports the assimilation of all kinds of employees in the organization. At the headquarters, diverse nature of working is not in practice. It is not tolerable at the centre, which is producing harm to the organizational performance, as employees are not fully committed to their works (Storey, 2014). The other problem is the selection of people with disability in its subsidiary in China, which the Company is not considering. Nevertheless, the Company in course of this is also ignoring the skills that those physically challenged people have. Sometimes they are even better than few of the physically fit aspirants are. The CEO of the Company is worried for some kind7 CONCEPTS OF HUMAN RESOURCE MANAGEMENT of legal proceedings, which the CEO can face for ignoring the aspirants just because of their physical disabilities. The Company needs serious consultation of the HRM facts that supports a transparent practice during the selection process. It is very important to have a diverse range of skilled people in the Company to diminish the rate of loss and uplift the business. Moreover, this is also helpful for relieving Mr. Adam from the fears, which has occupied a significant place in his life (Stredwick, 2013). International Performance Management, Training and Development International Performance Management International performance management is one of the most important aspects of a HRM strategy, which needs to be managed efficiently to bring the desired goal of the globalization. The physical distances of the parent Company from its subsidiaries in some other parts of world needs to be minimized with some effective strategies of the management. The nature of staffing at the different subsidiaries centers of a Company needs to consider different procedures to include those who have the potential to prove their worth for the Company. Moreover, it requires having some study on the employability skills of the concerned subsidiary center (Swart et al., 2012). The global environment surrounding the Company does create the necessity of including a solid HRM strategy, which could identify the potential employee for the project. The HRM needs to consider the diverse culture of employees from different geographic orientation to bring the skilled employees in the organization. To achieve this, the Company’s headquarter needs to have an open mind towards the inclusion of diverse culture people. It needs to have a transparent approach towards the aspirants, which is very important for grabbing on the chances created because of the participation of skilled employees of diverse cultures (Syed & Jamal, 2012).8 CONCEPTS OF HUMAN RESOURCE MANAGEMENT Performance appraisal is another very important part of the international performance management, which is expected have conflicts on the subject matter in between the managers at the headquarters and the subsidiaries. The subsidiary manager needs to be cooperative and precise with its planning. Moreover, the physical distances in between the parent Company and its subsidiaries have also made this tough to manage the differences in cultures, communication and many more. This is for the reasons that now smart companies are hiring more & more PCNs within their subsidiaries. PCNs have capabilities in them to help build up an informal form of communication in between headquarter and its subsidiaries. This also enables the parent Company in having a strong control on the subsidiary Company (Sani, 2012). Critical Evaluation Performance appraisal is one of the problems, which the ‘Cosmos’ Company is facing. Performance are reviewed at the headquarter centre but not at its subsidiaries. A formal process to facilitate the performance appraisal is missing in big deal in its subsidiaries. It is very harmful for the parent Company as this might leave a negative image of it on the local people of the subsidiary branches. Performance measure is another problem in the Company, which do not have established guidelines for its execution. Sometimes the decision taken for the headquarter branch is also imposed on the subsidiaries branches. It is a very harm move as this might bring conflicting outcomes in performances (Tiwari & Saxena, 2012). Training and Development Training brings learning opportunities to the employees whereas the learning that the employees have received, help them in developing their personality to become a professional. Training is a resource to develop the professional skills, behavioral attitudes and many more in employees. However, development is not only dependent on training; it also depends on the execution of the learning, its regular monitoring, coaching and many more. Training and9 CONCEPTS OF HUMAN RESOURCE MANAGEMENT development are interlinked but are slightly different in their nature of operation. Training provides learning materials to the employees, which is very important for the guidance towards the right path of movement. Training is a long lasting process that needs to be incepted at the regular intervals for fulfilling the different requirements of the organization (Eslami & Gharakhani, 2012). However, development helps in developing an employee into a professional based on the knowledge derived from training. Development is required to produce a long lasting performance in the organization. Training is not just about imparting learning options to employees but it is also for the survival of the business in long terms. Training is not needed only for those who are underperformer but it is for all those who are incepted in some new kinds of projects. Training is a long process, which probably can never find its end in an organization. On a same note, development is not a long lasting process as it is required only to those who are less professional. It is for the personality development that transforms an individual into a professional. Professional employees are what an organization prefers for its organizational goals (Emami et al., 2012). Critical Evaluation Training is the other most important problem of the ‘Cosmos’ Company, which is about only half day for those who are migrating from Australia to its subsidiaries centers. The HRM believes that the online resources are sufficient for understanding the jobs requirement. People moving to a completely different cultural country with different cultural employees do not find sufficient training on the assimilation with the changed environment. Training is a long lasting process that should never be compromised for anything but in the ‘Cosmos’ Company, this is not the scenario. Development program is also missing in this Company, which has no clear guidelines for its execution. There is no succession plan for the post of managers, which means10 CONCEPTS OF HUMAN RESOURCE MANAGEMENT that employees are not developed for a successor role to their predecessor managers. Employees do not have any clear idea about their career prospects (Bal, Bozkurt & Ertemsir, 2014). Recommendation 1. Integration is the first recommendation for the ‘Cosmos’ Aircraft Company, which they can achieve by encouraging its employees for their contribution works on other than their expertise. For this, the Company can modify its development program to bring the missing integrated work nature in its employees. 2. Diverse Nature of Working is the other recommendation for the Company, which is achievable by taking examples of some big companies such as Walmart in China. This is helpful in arousing the importance for including the people of diverse cultures to open up hands to skilled employees irrespective of their cultures and physical status. 3. Performance Measure is the other recommendation for the Company as it is lacking in measuring the performance and an appropriate performance appraisal method. Performance review should be started in all of its subsidiaries such as China, Vietnam and Singapore. This would help in measuring the performance of employees at the Parent Company and its subsidiaries centres more accurately. 4. Training & Development are one of the most important parts of organizational practices, which help in nurturing the skills in employees by developing an individual into a professional. The Company needs to invest a good amount of sum to hire some experts who could help in facilitating the conduction of training & development program. Moreover, it should be made mandatory for all the employees to take part in such programs. This program would eventually build up an environment of competitive learning, which is important for the ‘Cosmos’ Company.11 CONCEPTS OF HUMAN RESOURCE MANAGEMENT Conclusion Human resource management of an organization needs to be helped with proper tools and investments, so that, they could inhibit the different processes needed for the betterment of organization. An organization needs to have transparent views on its employees at the time of hiring them. Moreover, it is helpful in finding the most skilled employees for the organization, as this is not guaranteed that those who are physically good can only perform. Training and development are two of the most important weapons of an organization, which they can use to mould employees towards their organizational goals. 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