NGUYEN HOANG TIEN STRATEGIC INTERNATIONAL HUMAN RESOURCE MANAGEMENT NGUYEN HOANG TIEN STRATEGIC INTERNATIONAL HUMAN RESOURCE MANAGEMENT Warsaw 2017 Scientific review by: Professor Stanislaw Borkowski © Copyright 2017 by Wydawnictwo EMENTON Issue I, Warsaw 2017 All rights reserved. Any fragment of this book may not be reproduced, copied or saved in processing systems or any other form using mechanical and electronic devices or others with- out permission of the publisher. ISBN 978-83-65009-21-0 Publisher: Wydawnictwo EMENTON ul. 11 01-173 Warszawa e-mail: biuro@ementon.pl Printing and binding: Drukarnia cyfrowa ELPIL ul.
Artyleryjska 11, 08-110 Siedlce tel.: (25) 643-50-42, fax: (25) 643-43-46 e-mail: info@elpil.pl TABLE OF CONTENTS FOREWORD. 9 PART A HUMAN RESOURCE MANAGEMENT I. HRM and its business context. Definitions, principles, aims of HRM.
Business context of HRM. HRM’s STAFFING function. Labor market and employment systems. Human Resource planning.
Definitions and approaches. Advantages and disadvantages. Practice of Human Resource planning. Recruitment and selection.
External and internal staffing. HRM’s DEVELOPING function. Changing context of HRM. Learning and training .Human resource development.
Definitions and approaches. Management development program. HRM’s RETAINING function. Labor contract and employee rights.
Terms and conditions of employment. Employee involvement, communication and empowerment. 87 PART B STRATEGIC HUMAN RESOURCE MANAGEMENT I. Conceptual framework of Strategic HRM.
Definitions of strategy. Concepts of strategy. About Strategic HRM. Definitions, principles, aims of Strategic HRM.
Concepts of Strategic HRM. The best practice approach and best fit approach. The reality and practical implication of Strategic HRM. Strategic HRM in practice.
HR strategy definitions. Overall and specific HR strategies. Developing effective HR strategy. Strategic role of HR.
Strategic nature of HR. Strategic role of HR directors, business partners, advisors and assistants. Human Capital Management strategy. High Performance strategy.
Corporate Social Responsibility strategy. Organization Development strategy. Employee Engagement strategy. Knowledge Management strategy.
Employees Resourcing strategy. Talent Management strategy. Learning and Development strategy. Employee Rewarding strategy.
Employee Relations strategy. 151 PART C INTERNATIONAL HUMAN RESOURCE MANAGEMENT I. Global business context. Socio-cultural context.
National culture and management issues. National culture and HRM issues. Technology and organizational impact. Evolution of Multinational Enterprise.
Organizational structure design. Parent-subsidiary relationship. International HRM in Multinational Enterprises. International HR planning.
International HR staffing and assignment. International training and management development. International performance management. Purposes and roles of international performance management.
Effective international performance management system. Global issues of International HRM. Global cooperation and partnerships. International joint-ventures.
Mergers and acquisitions. Transfer of knowledge. Differentiation or integration. The relevance of the issue.
Mechanisms to achieve integration. Other global issues. 264 ILLUSTRATIONS AND TABLES. 281 7 FOREWORD Strategic Human Resource Management and International Hu- man Resource Management are new management academic courses delivered at many world universities.
They appeared as a result of the combination and integration approach toward the fields of Strategic Management, International Management and the field of Human Re- source Management as a background. Strategic Human Resource Management highlights the importance of all the Human Resource Management functional areas, including recruitment, training and re- muneration (compensation) through uplift all of them to the whole- company strategic level while International Human Resource Man- agement adds the international dimension to the tradition understanding of Human Resource Management. During these courses the students, the readers will study, beside Strategic Human Resource Management in theories, the main Human Resource strategies that cover one functional area of Human Resource Management or several areas at the same time in both the domestic and international dimension. So, the content and the possible applica- tion in practice of those main Human Resource strategies will be ex- amined in detail.
Due to the fact that the course of Strategic Human Resource Management as well as the course of International Human Resource Management are totally new and delivered mainly in English. Moreo- ver, all accessible textbooks are presented in English. This textbook, in a quite condensed form, is very useful and helpful for the readers to quickly and easily understand the main points of the given two im- portant issues. As an author, I hope that this textbook will make the study of Strategic Human Resource Management and International Human Resource Management courses easier and more fruitful.
Nguyen Hoang Tien 9 Part A HUMAN RESOURCE MANAGEMENT I. HRM and its business context I. Definitions, principles, aims of HRM Definitions of Human Resource Management Human Resource Management is usually defined and under- stood as an approach, with strategic accent, to managing people which is considered as core and the most valuable assets in enterprise, who individually and collectively contribute to the achievement of objec- tives of enterprise. As the followings, we have several important defi- nitions reflecting the general views of the authors in the mainstream literature of Human Resource Management.
Boxall describes Human Resource Management simply as the management of works and people towards desired ends (Boxall et al 2007). As John Storey believes, Human Resource Management can be regarded as a set of interrelated strategies, policies, procedures and practices with an ideological and philosophical underpinning. He sug- gests four following aspects that constitute to the meaningful version of Human Resource Management (Storey 1989): A particular constellation of beliefs and assumptions; A strategic thrust that informs all decisions about people management; The central involvement of line managers; Reliance upon a set of levers to shape the employment rela- tionship. Human Resource Management, and the general management process alike, could be defined by a certain cycle model.
In this cycle model, Fombrun, Tichy and Devanna held that Human Resource sys- tems and the organization structure should be managed in a way that is relevant to and congruent with organization strategy. They also further explained that there exists a Human Resource Management cycle which consists of four generic processes or functions that are per- formed throughout and in all organizations (Fombrun, Tichy, Devanna 1984): 10 Selection – matching available Human Resource to jobs; Appraisal – managing Human Resource performance; Rewards – driving and retaining organization’s performance and Human Resource performance as well in both short term and long term bearing in mind that business must per- form in the present to succeed in the future; Development – developing high-quality workforce to match future job’s requirement. Illustration 1: Human Resource Management cycle Performance HRM cycle: Appraisal Selection Performance Rewards Development Source: (Fombrun, Tichy, Devanna 1984) Principles of Human Resource Management Hereafter, several basic principles are presented that could be starting points to understand and characterize the Human Resource Management: Diversity – There are no universal characteristics of Human Resource as such. Many concurrent models exist, and Hu- man Resource practices, philosophies and management pro- cedures within different organizations are quite diverse as seen in the table below presenting cultural differences be- tween Japan and USA.
In practice, they correspond to the conceptual version of Human Resource in just only a few respects. Human Resource management covers a vast array of activities and shows a huge range of variations across a vast majority of occupations, organizational levels, business units, firms, industries and societies (Boxall et al, 2007). 11 Table 1: Impact of culture on Human Resource Management Impact of different culture on HRM Japan USA All life engagement Short-term contract Internal promotion Promotion from outside Non-specialized career Specialized career Group decision making Individual decision making High level of trust Multi-level of trust and loyalty Group responsibility Individual responsibility Long-term assessment Short-term assessment Common success criteria Individual success criteria Source: Own development Strategic and integrative nature – The most significant fea- ture of Human Resource Management is the importance at- tached to the strategic integration which flows downwards from top management’s vision and leadership which re- quires the full commitment of people to it. This is a key pol- icy goal for Human Resource Management which is con- cerned with the ability of the organization to integrate Hu- man Resource Management issues into its strategic business plans, as well as to ensure that the various aspects of Hu- man Resource Management cohere and are taken into ac- count, to encourage line managers to incorporate Human Resource Management perspective into their operative deci- sion making (Guest 1991); Commitment – The Human Resource Management model is composed of policies that promote mutuality, i.
mutual goals, mutual influence, mutual understanding, mutual re- spect, mutual rewards, mutual benefit and mutual responsi- bility. Policies of mutuality are to elicit commitment which in turn will yield both better economic performance and greater Human Resource development (Walton 1985). One of the Human Resource Management’s policy goals was the achievement of high level of staff’s commitment that means 12 pursuing common goals, strong identification and willing- ness to act in the interests of the organization (Guest 1987); Human Resource – Should be regarded as corporate assets rather than variable costs, in other words, it should be treat- ed as human capital, valuable source of competitive ad- vantage (Beer et al 1984). People and their collective skills, competencies and experiences, coupled with their ability to deploy these in the interests of the organization, are recog- nized as making a significant contribution to organizational success and as constituting an important source of competi- tive advantage (Armstrong, Baron 2002); Unitary philosophy – In the employment relations, it is be- lieved that employees share the same interests with employ- ers.
This contrasts with what could be regarded as the plu- ralist view which says that all organizations contain a num- ber of interest groups and that the interests of employers and employees do not necessarily coincide; Focus on business values: Hard version of Human Resource Management (prag- matism) – It underlines the importance of strategic inte- gration, strong culture and identity, far-reaching vision- ary leadership complied with the strategy, adaptable to change (Legge 1995); Soft version of Human Resource Management (social orientation) – It stresses the importance of moral values and social legitimacy of an organization (Boxall et al 2007; Paauwe 2004; Kochan 2007). Aims of Human Resource Management The overall purpose of Human Resource Management is to en- sure that the organization is able to achieve successfully its goals through people. As Ulrich and Lake remarked, Human Resource Management systems can be the source of capabilities that allow or- ganization to learn and to capitalize on new opportunities (Ulrich, Lake 1990). Dyer and Holder (1988) have analyzed the Human Re- source Management goals under the dimensions of: Contribution (what kind of employee behavior and attitude is expected?); 13 Composition (what headcount, staffing ratio and needed skills are mixed together?); Competence (what is general level of ability desired?), Commitment (what is the level of employees’ attachment, engagement and identification?).
But as Dyer and Holder (1988) also emphasized that Human Resource Management’s goals vary according to the competitive choices, technologies applied, services or goods to be offered, charac- teristics of employees, the state of the labor market and the social reg- ulations and national culture. Boxall, Purcell and Wright (Boxall et al 2007) noted that the general motives of Human Resource Management are multiple and more complex. Specifically, Human Resource Management is con- cerned with achieving objectives in the areas pointed out below: Organization Effectiveness – Distinctive Human Resource practices shape the core competencies that determine how firms compete. Such practices can make a significant im- pact on firm’s performance.
Human Resource strategies aim to support programs for improving organizational effective- ness by developing far-reaching policies in the areas such as employment relationships management, knowledge man- agement and talent management. This is the big idea, which consists of a clear vision and a set of integrated values.