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International human resource management is the method of acquiring, allocating, and effectively using human labor in multinational corporations. IHRM practices are largely identical to those of domestic human resource administration. The distinction between the two is that in domestic human resource management, operations are conducted within the borders of a single nation, while IHRM requires equivalent activities across at least three countries. It ensures that IHRM is carried out by businesses or organizations through national borders and in countries where they have commercial operations. It is commendable for multinational enterprises to put in place appropriate international human resource management strategies in order to accommodate the diversified workforce.
As Harzing and Pinnington (2014, p. 3) stipulate, IHRM ensures that policies, programs, and strategies for managing the employees are integrated among the subsidiaries of a multinational enterprise in the host countries. That is, it is meant to align the companies’ human strategies and policies with the policies and laws that are concerned with labor in the host countries. All multinational enterprises are recommended to put in place a reliable and appropriate IHRM policies and strategies. This is to ensure that they maximize the potential of their employees overseas as well as aid them in their career development as they work with the company. Labor being one of the major factors of productions, multinational companies is required to give priority to the management of human resource (Stahl, Björkman, and Morris 2012 p. 12). It is because such companies employ individuals from different parts of the world.
Therefore, the diversity may prove to be quite hectic as the employees may be accustomed to different labor relationships. In addition, Briscoe and Schuler (2014, p. 29) note that multinational companies operate in various countries that are different in terms of labor-related laws. As such, they are required to be keen on ensuring that the international human resource management strategies and policies that are put in place are conducive for the employees as well as aligned to the labor laws and policies of the countries they operate in. One of the multinational enterprises that are well known for its IHRM is McDonald’s.
McDonald’s is an American fast food restaurant chain that was founded way back in 1940 by two brothers. It started off from a hotdog stand and has ever since progressed into one of the largest fast food restaurants in the world. Currently, the enterprise has employed more than half a million people in the United States. Moreover, it has subsidiaries and franchises in over 120 countries and territories, making it one of the largest food restaurant chains in the world. Given the fact that the enterprise is vast in terms of its operations and number of establishments, it has established17 regional and area headquarters from which it runs the branches located in different countries around the world. The regional headquarters are held responsible for coming up with an all-inclusive International human resource management system that takes into account the interest of all its employees around the world. That is, with regards to the labor relation laws of their country of origin as well as those of the host countries.
One of the outstanding IHRM policies of the company is the fact that the managers in specific countries are at liberty to institute certain strategies and methods of managing the human resource in those particular countries or regions. This may entail customized management in as far as recruitment, firing procedures, verification of academic qualification, quasi-legal regulations as well as promotion. One may argue that this is defiantly the best way to go about IHRM as it seeks to maintain the indigenous strategies while ensuring competence in the international market. It actually makes sense in that; not all countries have similar laws regarding labor nor do they have equal standards in as far as human resources are concerned. As such, allowing the regional and host country human resource managers is a good idea that ensures that the best of local skills and knowledge are tapped into the company.
In line with this aspect, one requires to consider exploring methods and techniques used in managing human resource at the local level. That is when developing a substantial International human resource management system (Brewster et al. 2007, p. 89). It is because it enables the easy integration of the policies and strategies of the home country with the labor regulations of the host country. Moreover, it makes it easy and efficient to manage the employees in that they are required to abide by the regulations and policies that they are familiar with and are accustomed to. In addition, it enables the managers to apply the strategies and policies customized for specific countries that gives employees an opportunity to grow in as far as career development is concerned. Dowling, Festing, and Engle (2008, p. 6) mentioned that the fact that the standards of the multinational company are customized in a bid to accommodate their local contexts give employees an opportunity to compete with their colleagues at the international level and deliver at their comfort. Therefore, the best International human resource management strategies should integrate local ideas and strategies in one way or another.
Functions of the Human Resource Department at McDonald’s
Two of the key functions of the HR department for both home and host countries are as follows; first, job analysis and evaluation of the employees. This entails evaluating the performance of employees with respect to how much input they contribute to ensuring the success of the company. As Scullion, Collings, and Gunnigle (2007, p. 315) explain, job analysis is basically done to determine whether the employees are competent and whether they play their roles effectively in as far as their duties and responsibilities are concerned. Based on the results of the analysis, the employees who perform well are awarded either in form of promotion or salary increment. On the contrary, employees who do not meet the threshold required by the company are subjected to disciplinary actions. Additionally, the analysis and evaluation process is essential to the managers because they use the outcome as customize training and capacity building programs for the employees. That is, with respect to the indicators of the areas of weakness and strength on the outcome.
Secondly, the human resource department is mandated with the responsibility of company administration both at home and in host countries. The administrative roles, in this case, are such as recruitment and dismissal of employees, promotion, and appraisal, as well as capacity building of the employees. This particular function is meant to ensure that the employees play the roles and deliver efficiently and with competency (Cox 2014, p.159). Needless to say, the administrative function of the human resource department has contributed substantially to the growth and maintenance of the company’s standards over a long period of time.
The Current International Human Resource Management Policies and Practices
Presently, the company has put in place several strategies that ensure that the standards of the company are maintained while the welfare of the employees is observed. Such policies are as follows: To begin with, the company has put in place a policy that eliminates all forms of discrimination in as far as recruitment is concerned. The policy requires that employee who is recruited to the company in all countries are not subjected to any form of discrimination on grounds of their color, race, gender, sex, and nationality etcetera. In light of this, it has managed to tap potentials from different individuals thus establishing a diversified workforce. Valax (2012 p. 356) notes that the McDonalds policy on non-discriminatory recruitment has made it one of the companies with the most number of minorities in the United States.
This policy is arguably one the most important that the company has put in place to achieve diversity and maintain its reputation in the international market. This is in the sense that it provides the franchises in host countries with the opportunity to attract different individuals with diverse ideals and skills into the company. This certainly is advantageous because the diverse ideas derived from the multicultural workforce may be instrumental in the development of the company in terms of value addition. In addition, it creates room for everyone within the age limits to become a part of the company’s workforce. However, the policy is quite vague in the sense that it does not provide for specifics on how to go about the recruitment process. Pointing out that the process should be non-discriminative is not enough to ensure that certain categories of people are dominant.
Secondly, the company provides an intensive training for the human resource managers on how to manage the diversified workforce. Given the cultural differences and difference in backgrounds of the employees, the managers require being well equipped with knowledge and skills of how to manage the diverse workforce. The need for intensive training may also be attributed to the fact that different countries require special attention with regards to managing the human resource. It is because of the variety in cultural difference of the laws or policies regarding the labor relations in those particular countries (Ulrich et al. 2010, p. 1). Therefore, the company ensures that the welfare of the employees are taken care of while it maximizes on their productivity. In light of this, the practice is quite commendable.
Last but not least, McDonald’s strives to ensure that it’s employees in both home and host countries have a perfect work-life balance (Corporate.mcdonalds.com 2017). It means that that the company creates a conducive environment to ensure that the employees have enough time for their personal issues while they work for the company. To achieve this, it has established various strategies such as offering the employees with vacation time as well as holidays. In addition to that, the company offers the employees with other incentives such as sick and personal time, alternative work approach and flexible options for working and leave of absence among other policies.
Certainly, such incentives are most likely to motivate the employees and ultimately increase their productivity. As noted by Servais (2011, p. 37), the idea of ensuring that the employees are not overworked is critical in maximizing their output. It is on this basis that, the employees are able to concentrate on their duties with refreshed minds considering they are not psychologically disturbed or stressed up with issues in their personal lives.
Despite the fact that the IHRM strategies and practices have been reported to be effective, it is highly recommended that certain changes be made in order to ensure the employee’s productivity is improved. To begin with, the intensive training of the managers should be extended to the employees. This is highly recommended because, through the process, the employees in lower levels obtain relevant knowledge on how to operate within their workplaces which are diversified. In addition, offering other employees with the intensive training also contributes to their career growth. It is because they are able to obtain knowledge and skills which they may need to use in their career endeavors.
In light of this, it is highly commendable that a parallel intensive training on human resource management should be held for the other employees. Alternatively, the company can conduct an inclusive training that involves both managers and employees so that they all acquired the same knowledge. Arguably, the best way of conducting the training is by establishing it as a mandatory online training. In a bid to ensure that all employees take part in the training, disciplinary action should be taken to those who do not go through the training. Moreover, this should be done on a regular basis; preferably annually or biannually with updates of the recommendation from the previous sessions.
On non-discriminatory policy, the company needs to be a little more specific and assertive on the policy. A better way of implementing the policy is by putting in place a specific provision in order to accommodate diverse individuals in the franchises. Such provisions may include for instance; stating that the number of employees of a particular gender in the franchises overseas should not exceed a certain percentage. This way, the manager of the franchises overseas will be bound to recruit the employees strictly on the basis of the policy.
Lastly, with respect to the incentives for the employees; it is important that the employees are represented in the decision-making process of the policies and strategies. It is because, through their participation, they are able to provide the management with more customized ideas that they may relate to very closely compared to what the company offers. It is because 120 countries within which the McDonalds operate have different cultural backgrounds as well as societal norms. Kidger (1999, p. 1) claims that majority of the multinational enterprises do not perform well in terms of employee motivation because they rely on generic incentives for their employees which are applicable to all the host countries. This means that multinational companies overlook the fact that they have a diversified workforce with different norms and cultural background, as such they fail to motivate their employees using appropriate incentives.
Therefore, putting in place incentives that cut across different countries may just favor others at the expense of their colleagues in other countries. It is, therefore, commendable that the incentives should be customized in line with the norms and traditions of the specific host countries. As such, both the managers of the franchises in host countries and representatives of the employees in the same host countries should be consulted and included in the process of establishing these benefits or incentives.
International human resource management is an important aspect of the business that should not be overlooked by any multination enterprise. It is because such enterprises entail a diversified workforce which requires appropriate strategies and policies to ensure productivity and competence. Multinational companies are required to take good care of the welfare of their employees in both home and host countries. An example of such companies that have laid down international human resource management strategies is McDonalds. Some of the company’s HR functions include administration of the company as well as the analysis and evaluation of the employees based on their performance. These two functions among others are critical in ensuring that the company taps into the potential of their employees while ensuring that it takes good care of their welfare.
Multinational enterprises such as McDonald’s strive to provide their employees with the best working in order to maximize on their delivery. As such, they put in place IHRM policies and strategies. Examples of the policies and practices put in place by McDonald’s include intensive training for managers of franchises overseas, offering a perfect work-life balance, and non-discriminatory recruitment of the employees. However, in as much as such strategies may be effective in maintaining the productivity of the employees, much still need to be done to ensure the effectiveness of the strategies. Such recommendations may include; inclusion of the employees in the training program for the managers, consultation of the managers and employee representatives in host countries with respect to appropriate incentives and assertions on the non-discriminative recruitment policies.
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