Impact of Effective Human Resource Management in International Companies

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16th Dec 2019 Dissertation Reference this

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   Abstract
Human resource management affects every aspect of the workforce: management/ labor, employer/employee, student/professional. This thesis provides coverage of all the expected HRM critical topics such as analyzing jobs; planning; recruiting, selecting, training, developing, and compensating employees; managing performance; and handling labor relations. In addition, I tried to define ways to achieve extraordinary results in international organizations. The additional expectations of the proactive human resource professional and leader, such as managing human resources globally, adopting a total rewards approach to compensating and rewarding employees, and creating a high-performance work environment where employees hearts and minds are engaged.
Table of Contents...................................................5 Table of Figures.....................................................8
  1. Introduction........................................................10
  2. Strategies, Trends, and Challenges in Human Resource Management..........12
    1.     The Value of People...................................................12
    2.     Responsibilities of Human Resource Departments...........................15
Analysing and Designing Jobs........................................17 Recruiting and Hiring Employees......................................17 Training and Developing Employees...................................18 Managing Performance..............................................19 Compensation and Rewards..........................................19 Maintaining Positive Employee and Labour Relations......................20 Establishing and Administering Human Resource Policies..................20 Ensuring Compliance with Legislation..................................20
  1.     Focus on Strategy.....................................................21
Productivity Improvement............................................22 Expanding into Global Markets........................................22
  1.     The Global Workforce.................................................23
International Assignments............................................24 Outsourcing.......................................................24 Mergers and Acquisitions............................................25
  1.     Required Professional Capabilities (RPCs) and Certification of HR
Professionals......................................................26
  1.     Ethics in Human Resource Management...................................27
Code of Ethics.....................................................28
  1.     HR Responsibilities of Supervisors and Line Managers.......................29
  2.     Careers in Human Resource Management..................................30
  3.     Change in the Labour Force.............................................32
  4. Change in the Employment Relationship...................................35
A New Psychological Contract........................................35 Flexibility........................................................36 HUMAN   RESOURCE   MANAGEMENT   IN INTERNATIONAL        COMPANIES                37
  1. Preparing for and Acquiring Human Resources...........................39
Work Flow in Organizations..........................................39 Work Flow Analysis................................................39 Work Flow Design and Organization's Structure..........................41
  1.     Job Analysis.........................................................42
Job Descriptions...................................................43 Writing a Job Description............................................43 Job Specifications..................................................46 Fleishman Job Analysis System.......................................47 Written Comprehension..............................................48 Importance of Job Analysis...........................................49
  1.     Job Design..........................................................50
Designing Efficient Jobs.............................................50 Designing Jobs That Motivate.........................................51 Self-Managing Work Teams..........................................53 Flexible Work Schedules.............................................54
  1. Managing Talent.....................................................56
    1.     Training and Development Linked to Organizational Needs and Strategy.........58
    2.     Needs Assessment and Assessing Readiness for Training......................60
Organization Analysis...............................................61 Person Analysis....................................................62 Task Analysis.....................................................63 In-House or Contracted Out?..........................................63
  1.     Choice of Training Methods............................................64
Classroom Instruction...............................................66 Audio-visual Training...............................................66 Computer-Based Training............................................66 Electronic Performance Support Systems................................67 E-Learning........................................................67
  1.     Implementing and Evaluating the Training Program..........................68
Principles of Learning...............................................68
  1.     Measuring Results of Training...........................................71
Evaluation Methods.................................................72
  1.     Approaches to Employee Development...................................73
Development for Careers.............................................74 Formal Education..................................................75 Assessment.......................................................76
  1.     360-Degree Feedback................................................77
  1. Managing Human Resources Globally...................................79
International Workforce.............................................80 Employers in the Global Marketplace...................................81
  1.     Factors Affecting HRM in International Markets...........................84
Culture...........................................................85 Education and Skill Levels...........................................90 Economic System..................................................90 Political-Legal System...............................................91
  1.     Workforce Planning in a Global Economy................................92
  2.     Selecting Employees in a Global Labour Market...........................93
  3.     Training and Developing a Global Workforce..............................95
Training Programs for an International Workforce.........................96
  1.     Cross-Cultural Preparation.............................................98
  2.     Performance Management across National Boundaries........................99
  3.     Compensating and Rewarding an International Workforce....................100
Pay Structure.....................................................100 Employee Benefits.................................................102
  1.     Preparing Expatriates................................................103
  1. Conclusion.........................................................108
Bibliography........................................................111
Table of Figures FIGURE 1 : HUMAN  RESOURCE MANAGEMENT PRACTICES...................................11 FIGURE 2 : IMPACT OF HUMAN  RESOURCE MANAGEMENT...................................13 FIGURE 3 : AVERAGE LABEL PRODUCTIVITY GROWTH  (%)....................................23 FIGURE 4 : REQUIRED PROFESSIONAL CAPABILITIES BY FUNCTIONAL DIMENSIONS.......................26 FIGURE 5 : STANDARDS FOR IDENTIFYING  ETHICAL PRACTICES..................................27 FIGURE 6 : TYPICAL AREAS OF  INVOLVEMENTS..........................................30 FIGURE 7 : SALARIES FOR HRM POSITIONS............................................31 FIGURE 8 : AVERAGE HOURLY EARNINGS IN HR..........................................31 FIGURE 9 : DECLINE OF LABOUR FORCE..............................................33 FIGURE 10 : AGE DISTRIBUTION PROJECTION OF THE EUROPEAN  POPULATION........................33 FIGURE 11 : HRM PRACTICES  THAT SUPPORT DIVERSITY  MANAGEMENT...........................34 FIGURE 12 : DEPLOYING A WORK-UNIT ACTIVITY ANALYSIS...................................40 FIGURE 13 : EXAMPLE OF ABILITY FROM  THE FLEISHMAN JOB ANALYSIS SYSTEM.......................48 FIGURE 14 : APPROACHES TO JOB DESIGN.............................................51 FIGURE 15 : CHARACTERISTICS OF  A MOTIVATING JOB......................................53 FIGURE 16 : ALTERNATIVE TO 8-TO-5 JOB.............................................55 FIGURE 17 : STAGES OF  INSTRUCTIONAL  DESIGN.........................................59 FIGURE 18 : NEEDS ASSESSMENT..................................................60 FIGURE 19 : OVERVIEW OF USE OF INSTRUCTIONAL   METHODS.................................65 FIGURE 20 : MEASURES  OF  TRAINING EVALUATION.......................................72 FIGURE 21 : THE FOUR APPROACHES  TO EMPLOYEE  DEVELOPMENT..............................75 FIGURE 22 : STEPS IN THE TELUS DEVELOPMENT  SYSTEM...................................78 FIGURE 23 : LEVELS OF GLOBAL  PARTICIPATION.........................................83 FIGURE 24 : FACTORS  AFFECTING  HUMAN  RESOURCE MANAGEMENT IN INTERNATIONAL  MARKETS............85 FIGURE 25 : FIVE DIMENSIONS OF  CULTURE...........................................87 FIGURE 26 : EMOTIONAL CYCLE ASSOCIATED WITH A FOREIGN   ASSIGNMENT.........................95 FIGURE 27 :  EARNINGS IN  SELECTED OCCUPATIONS IN SEVEN CITIES.............................100 FIGURE 28 : NORMAL ANNUAL HOURS WORKED IN MANUFACTURING............................103 FIGURE 29 : THE BALANCE SHEET FOR DETERMINING  EXPATRIATE  COMPENSATION.....................105 FIGURE 30 : CUSTOMER-ORIENTED PERSPECTIVE OF  HRM..................................108

1.  Introduction

What do PricewaterhouseCoopers, Research in Motion and Google Inc. have in common? They have all been recently recognized as excellent employers with progressive human resource management practices. The list of employment awards is growing, raising the bar on what it takes to attract, retain, and engage top talent. As labor markets become increasingly competitive, human resource professionals are being called upon to provide people management practices that not only support the organization's priorities but also provide for competitive success in a global marketplace. Organizations also strive to create an employment brand that resonates with specific employees. Perhaps no organization has received more attention or has a stronger brand than Google. Google is known for its people practices and employee-first culture that directly contribute to its success. The work environment provides "Googlers" unlimited amounts of free, chef-prepared food at all times of the day, lap pools, onsite massages, car washes, oil changes, dry-cleaning, laundry service, and haircuts. Google's "20-percent time" gives employees 20 present of their day to "work on what they're really passionate about"—and tangible organizational outcomes often result. For example, Gmail came about from one Google employee's 20-percent time efforts. Perhaps it is no surprise that Google receives 1300 resumes every day and is able to attract and retain some of the world's top talent.1 Organizations of all sizes and in all industries are increasingly recognizing the importance of people. This is a time of rapid change in the market—a time when Canadian organizations are constantly trying to keep pace and remain competitive. In today's knowledge-based economy, I rely on people to generate, develop, and implement ideas and the human resource function has an important role in ensuring that organizations have the people capacity to execute strategic objectives."2 1 Cowan, Janice Cooney and Allison. 2009. Canadian Organizations Continue to Under-Invest. Conference Board of Canada. [Online] 2009. www.conferenceboard.ca/ documents.asp?rnext=548.. 2 Wright, Ruth. 2008. The Strategic Value of People: Human Resource Trends and Metrics. Ottawa : Conference Board of Canada, 2008.. p 33
Figure 1 : Human Resource ManagementPractices Human resource management (HRM) centres on the policies, practices, and systems that influence employees' behavior, attitudes, and performance. Many companies refer to HRM as "people practices." Figure 1 emphasizes that there are several important HRM practices that contribute to an organization's ability to realize the full benefit of its talent: analysing work and designing jobs, attracting potential employees, choosing employees, preparing employees to perform their jobs and for the future (training and development), supporting their performance (performance management), rewarding employees (compensation), creating a positive work environment (employee and labor relations), and supporting the organization’s strategy. In addition, HRM has responsibility for providing safe work environments and assuring compliance with legal requirements. An organization performs best when all of these practices are managed systematically. At companies with effective HRM, employees and customers tend to be more satisfied, and the companies tend to be more innovative, have greater productivity, and develop a more favourable reputation in the community.3 3 M. A. Hitt, B. W. Keats, and S. M. DeMariei. 2006. Evaluating Human Resource Effectiveness . Human Resource Management. Washington, DC : BNA Books, 2006., p 152

2.  Strategies, Trends, and Challenges in Human Resource Management

 

Managers and economists traditionally have seen human resource management as a necessary expense, rather than as a source of value to their organizations. Economic value is usually associated with capital, equipment, technology, and facilities. However, in the changing corporate environment, more and more organizations are awakening to the importance of human capital as the next competitive advantage.4

2.1.    The Value of People

    A barrier to business expansion is not only availability of financial capital but also access to talent that is, human capital. In summary, people are crucial to organizational success and the human and intellectual capital of an organization's workforce provides an opportunity for substantial competitive advantage. As the 'resident people experts,' HR leaders are ideally suited to advise their organization on the best means for realizing their objectives. Decisions such as whom to hire, what to pay, what training to offer, and how to evaluate employee performance directly affect employees' motivation, engagement, and ability to provide goods and services that customers value. Companies that attempt to increase their competitiveness by investing in new technology and promoting quality throughout the organization also invest in state-of-the-art staffing, training, and compensation practices. These types of practices indicate that employees are viewed as valuable investments.5 4 Parker, Owen. 2006. Strategic HR Transformation Study Tour Report 2006. Ottawa : Conference Board of Canada, 2006, 2006., p 10 5 Greer, Charles. 2001. , Strategic Hwnan Resource Management, 2nd ed. . New Jersey : Prentice- Hall, 2001., p 520
The concept of "human resource management" implies that employees are re- sources of the employer. As a type of resource, human capital means the organization's employees, described in terms of their training, experience, judgment, intelligence, relationships, and insight the employee characteristics that can add economic value to the organization. In other words, whether it manufactures bicycles or forecasts the weather, for an organization to succeed at what it does, it needs employees with certain qualities, such as particular kinds of skills and experience. This view means employees in today's organizations are not interchangeable, easily replaced parts of a system but the source of the company's success or failure. By influencing who works for the organization and how those people work, human resource management therefore contributes to such basic measures of an organization's success as quality, profitability, and customer satisfaction. Figure 2 shows this relationship. Figure 2 : Impact of Human ResourceManagement    

Human resource management is critical to the success of organizations, because human capital has certain dualities that make it valuable. In terms of business strategy, an organization can succeed if it has a sustainable competitive advantage (is better than competitors at something, and can hold that advantage over a sustained period  of  time). Therefore, I can conclude that organizations  need the

kind of resources that will give them such an advantage. Human Resources have these necessary qualities:
  • Human resources are valuable. High-quality employees provide a needed service as they perform many critical functions.
  • Human resources are rare in the sense that a person with high levels of the needed skills and knowledge is not common. An organization might spend months looking for a talented and experienced manager or technician.
  • Human resources cannot be imitated. To imitate human resources at a high- performing competitor, you would have to figure out which employees are providing the advantage and how. Then you would have to recruit people who can do precisely the same thing and set up the systems that enable those people to imitate your competitor.
  • Human resources have no good substitutes. When people are well trained and highly motivated, they learn, develop their abilities, and care about customers. It is difficult to imagine another resource that can match committed and talented employees.
These qualities imply that human resources have enormous potential. An organization realizes this potential through its approach to human capital management, that is, how it practises human resource management. Effective management of human resources can form the foundation of a high- performance work system and organization in which technology, organizational structure, people, and processes all work together to give an organization an advantage in the competitive environment. As technology changes how organizations manufacture, transport, communicate, and keep track of information, human resource management must ensure that the organization has the right kinds of people to meet the new challenges. Maintaining a high- performance work system might include development of training programs, recruitment of people with new skill sets, and establishment of rewards for such behaviors as teamwork, flexibility, and learning.

2.2.                                                                                                    Responsibilities of Human Resource   Departments

  In all but the smallest organizations, a human resource department is responsible for the functions of human resource management. On average, an organization has one HR staff person for every 100 employees served by the department; however, this ratio may vary widely across organizations. Another general guideline is that a specialized HR role is often created when an organization has reached the size of approximately 40 employees. Table 1 details the responsibilities of human resource departments. These responsibilities include the practices introduced in Figure 1 plus two areas of responsibility that support those practices: (1) establishing and administering human resource policies and (2) ensuring compliance with legal requirements. Although the human resource department has responsibility for these areas, many of the requirements are performed by supervisors or others inside or outside the organization. No two human resource departments have precisely the same roles, because of differences in organization sizes and characteristics of the workforce, the industry, and management's values. In some companies, the HR department handles all the activities listed in Table 1. In others, it may share the roles and duties with managers and supervisors of other departments such as finance, operations, or information technology. When managers and supervisors actively perform a variety of HR activities, the HR department usually retains responsibility for consistency and compliance with all legal requirements. In some companies, the HR department actively advises top management. In others, the department responds to top-level management decisions and implements staffing, training, and compensation activities in light of company strategy and policies.
Analysis and design of work Work analysis; job design; job descriptions
Recruitment and selection Identify needs; recruiting; interviewing and screening; deployment of staff; and outplacement
Training and development Orientation; learning strategies; design, deliver, and evaluate programs; career development
Performance management Integrate performance measures; performance appraisal systems; assist and coach supervisors
Compensation and rewards Develop and administer compensation and incentive programs; benefit program design and implementation; pension plans; payroll
Employee and labour relations Employee and labor relations; Terms and conditions of employment, communication; employee involvement; labor relations
Strategy Strategic partner in organizational effectiveness; change and development; workforce planning
Human resource policies Guide and implement policy; create and manage systems to collect and safeguard HR information
Compliance with legislation Implement policies to ensure compliance with all legal requirements; reporting requirements
Table 1 : Responsibilities of HRDepartment6                 6  Canadian Council of Human Resource. Canadian Council of Human Resources Associations National Standards for Human Resources Professionals. [Online] 2004. [Dátum: 22. February 2012.] www.cchra-caarh.ca/en/phaseireport. 2004.

Let's take a look at an overview of the HR functions and some of the options available for carrying them out. Human resource management involves both the selection of which options to use and the activities related to implementation.

Analyzing and Designing Jobs

To produce their given product or service (or set of products or services), companies require that a number of tasks be performed. The tasks are grouped in various combinations to form jobs. Ideally, the tasks should be grouped in ways that help the organization to operate efficiently and to obtain people with the right qualifications to do the jobs well. This function involves the activities of job analysis and job design. Job analysis is the process of getting detailed information about jobs. Job design is the process of defining the way work will be performed and the tasks that a given job requires.

Recruiting and Hiring Employees

On the basis of job analysis and job design, an organization can determine the kinds of employees it needs. With this knowledge, it carries out the function of recruiting and hiring employees. Recruitment is the process through which the organization seeks applicants for potential employment. Selection refers to the process by which the organization attempts to identify applicants with the necessary knowledge, skills, abilities, and other characteristics that will help the organization achieve its goals. An organization makes selection decisions in order to add employees to its workforce, as well as to transfer existing employees to new positions. At some organizations, the selection process may focus on specific skills, such as experience with a particular programming language or type of equipment. At others, selection may focus on general abilities, such as the ability to work as part of a team or find creative solutions. The focus an organization favors will affect many choices, from the way the organization measures ability, to the questions it asks in interviews, to the places it recruits. Table 2 lists employability skills, attitudes, and behaviors needed to participate and progress in today's dynamic

world of work. HR professionals also provide guidance related to redeploying employees, termination, and outplacement.

Communicate Demonstrate positive attitudes and behaviors Work with others
Manage information Be responsible Participate in projects and tasks
Use numbers Be adaptive
Think and solve problems Learn continuously Work safely
Table 2 : EmployabilitySkills7 

Training and Developing Employees

Although organizations base hiring decisions on candidates' existing qualifications, most organizations provide ways for their employees to broaden or deepen their knowledge, skills, and abilities. To do this, organizations provide for employee training and development. Training is a planned effort to enable employees to learn job-related knowledge, skills, and behavior. For example, many organizations offer safety training to teach employees safe work habits. Development involves acquiring knowledge, skills, and behavior that improve employees' ability to meet the challenges of a variety of new or existing jobs, including the client and customer demands of those jobs. Development programs often focus on preparing employees for management responsibility. 7 Employability Skills 2000+ . [aut. books] The Conference Board of USA. Brochure 2009 E/F. Los Angeles : s.n., 2009., p 244

Managing Performance

Managing human resources includes keeping track of how well employees are performing relative to objectives such as job descriptions and goals for a particular position. The process of ensuring that employees' activities and outputs match the organization's goals is called performance management. The activities of performance management include specifying the tasks and outcomes of a job that contribute to the organization's success. Then various measures are used to compare the employee's performance over some time period with the desired performance. Often, rewards the topic of the next section are developed to encourage good performance.

Compensation and Rewards

Planning pay and benefits involves many decisions often complex and based on knowledge of a multitude of legal requirements. An important decision is how much to offer in salary or wages, as opposed to bonuses, commissions, and other performance-related pay. Other decisions involve which benefits to offer, from retirement plans to various kinds of insurance to other more intangible rewards such as opportunities for learning and personal growth. All such decisions have implications for the organization's bottom line, as well as for employee motivation. Administering pay and benefits is another big responsibility. Organizations need systems for keeping track of each employee's earnings and benefits. Employees need information about their health plan, retirement plan, and other benefits. Keeping track of this involves extensive record keeping and reporting to management, employees, and others, while ensuring compliance with all applicable legislation.

Maintaining Positive Employee and Labor Relations

Organizations often depend on human resource professionals to help them identify and perform many of the tasks related to maintaining positive relations with employees. This function often includes providing for communications to employees. In organizations where employees belong to a union, labor relations entails additional responsibilities. The organization periodically conducts collective bargaining to negotiate an employment contract with union members. The HR department also maintains communication with union representatives to ensure that issues are resolved as they arise.

Establishing and Administering Human Resource Policies

All the human resource activities described so far require fair and consistent decisions, and most require substantial record keeping. Organizations depend on their HR department to help establish policies related to hiring, discipline, promotions, benefits, and the other activities of human resource management. All aspects of human resource management require HR professionals to collect and safeguard information. From the preparation of employee handbooks, to processing job applications, performance appraisals, benefits enrolment, and government-mandated reports, handling records about employees requires accuracy as well as sensitivity to employee privacy.

Ensuring Compliance with Legislation

The government has many laws and regulations concerning the treatment of employees. These laws govern such matters as human rights, employment equity, employee safety and health, employee compensation and benefits, and employee privacy. Most managers depend on human resource professionals to help them keep up to date and on track with these requirements. Ensuring compliance with laws requires that human resource professionals keep watch over a rapidly changing legal landscape.

2.3.                   Focus on Strategy

  Traditional management thinking treated human resource management primarily as an administrative function, but managers are increasingly seeing a more central role for HRM. They are looking at HRM as a means to support a company's strategy its plan for meeting broad goals such as profitability, quality, and market share. 8This strategic role for HRM has evolved gradually. At many organizations, managers still treat HR professionals primarily as experts in designing and delivering HR systems. But at a growing number of organizations, HR professionals are strategic partners with other managers.9 This means they use their knowledge of the business and of human resources to help the organization develop strategies and to align HRM policies and practices with those strategies. In a recent study of almost 200 European organizations surveyed by Deloitte Consulting, 41 percent of human resource leaders describe their departments as strategic partners while 31 percent still view themselves as administrative champions. Part of the problem for HR professionals is that employees are concerned about getting help with traditional human resource administrative responsibilities such as completing benefit forms while executives want senior HR leaders to be partners in strategic planning.10 The specific ways human resource professionals support the organization's strategy vary according to their level of involvement and the nature of the strategy. Strategic issues include emphasis on productivity improvement; attracting, engaging, and retaining talent; international expansion and outsourcing decisions. Another important element of this responsibility is workforce planning, identifying the numbers and types of employees the organization will require in order to meet its objectives. Using these estimates, the human resource department helps the organization forecast its needs for hiring, training, and reassigning employees. Planning also may show that the organization will need fewer employees to meet 8 Ulrich, D. Human Resource Champions. 2008 : Harvard Business School Press, Boston. 9 Halcrow, A. Priorities for Competitive Advantage: An IBM Study . s.l. : IBM, 2002., p 65 10  Brown, David. HR Pulled in Two Directions at Once. 2004 : HR Reporter., p 65

anticipated needs. In that situation, human resource planning includes how to handle or avoid layoffs.

Often, an organization's strategy requires some type of change for example, adding, moving or closing facilities, applying new technology, or entering markets in other regions or countries. Common reactions to change include fear, anger, and confusion. The organization may turn to its human resource department for help in managing the change process. Skilled human resource professionals can apply knowledge of human behavior, along with performance management tools, to help the organization manage change constructively.

Productivity Improvement

To compete in today's global economy, companies need to enhance productivity. The relationship between an organization's outputs (products, information, or services) and its inputs (e.g., people, facilities, equipment, data, and materials) is referred to as productivity. Europe's labor force productivity growth is forecast to average 1.5 percent per year between 2003 and 2015 in contrast with 1.7 percent per year in the United States. This productivity gap between Europe and the United States threatens Europe's ability to compete globally. As illustrated in Figure 3, Europe is also a productivity laggard from a global perspective, significantly underperforming not only the United States but many other nations as well.11

Expanding into Global Markets

Companies are finding that to survive and prosper they must compete in international markets as well as fend off foreign competitors' attempts to gain ground in Europe. To meet these challenges, European businesses must develop global markets, keep up with competition from overseas, hire from an international labor pool, and prepare employees for global   assignments. 11  Brown, David. HR Pulled in Two Directions at Once. 2004 : HR Reporter., p 72
Figure 3 : Average Label Productivity Growth(%)12 Study of companies that are successful and widely admired suggests that these companies not only operate on a multinational scale, but also have workforces and corporate cultures that reflect their global markets.13 These companies, which include Research in Motion, Scotia bank, General Electric, Microsoft, RBC, and Intel, focus on customer satisfaction and innovation. In addition, they operate on the belief that people are the company's most important asset. Placing this value on employees requires the companies to emphasize human resource practices, including rewards for superior performance, measures of employee satisfaction, careful selection of employees, promotion from within, and investment in employee development.

2.4.                   The Global Workforce

For today's and tomorrow's employers, talent comes from a global workforce. Organizations with international operations hire at least some of their employees in the foreign countries where they operate. And even small businesses that stick close to home hire qualified candidates who are immigrants. For an organization to operate in other countries, its HR practices must take into consideration   differences   in   culture   and   business   practices.   Consider     how 12  OECD. Report Card on Employment,  2007 13  Kahn, J. The World's Most Admired Companies. s.l. : Fortune, 2008., p. 232
Starbucks Coffee handled its expansion into Beijing, China.14 Demand for qualified managers in Beijing exceeds the local supply, so Starbucks researched the motivation and needs of potential managers. The company learned that in traditional Chinese-owned companies, rules and regulations allowed little creativity and self-direction. Starbucks distinguished itself as an employer by emphasizing its casual culture and opportunities for career development. The company also spends considerable time training employees. Even hiring at home may involve selection of employees from other countries. The 21st century, like the beginning of the last century, has been years of significant immigration. Foreign-born people account for virtually one in five of Europe's total population the highest level in 75 years. The impact of immigration is especially significant in some regions of Europe.

International Assignments

Besides hiring an international workforce, organizations must he prepared to send employees to other countries. This requires HR expertise in selecting employees for international assignments and preparing them for those assignments. Employees who take assignments in other countries are called expatriates. European companies must prepare employees to work in other countries. Companies must carefully select employees to work abroad on the basis of their ability to understand and respect the cultural and business norms of the host country. Qualified candidates also need language skills and technical ability.

Outsourcing

Many organizations are increasingly outsourcing and offshoring business activities. Outsourcing refers to the practice of having another company (a vendor, third-party provider, or consultant) provide services. For instance, a manufacturing company might outsource in accounting and transportation to business that specialize in these activities. Outsourcing gives the company    access 14Starbucks Expansion into China Is Slated. Young, J. L. October 5, s.l. : The Wall Street Journal, 2007.,p 13
to in-depth expertise and is often more economical as well. In addition to manufacturing, software development and call center operations are other functions typically considered for out-sourcing. Offshoring, on the other hand, refers to setting up a business enterprise in another country, for example, setting up a factory in China to manufacture products at less cost than in Canada. Increasingly, organizations are offshore outsourcing, that is, the company providing outsourced services is located in another country rather than the organization's home country. For example, The Portables, trade-show display and exhibits maker based in Richmond, B.C., have increased annual sales dramatically since starting its use of offshore outsourcing. Hanif Mulijinai, president of The Portables, says offshore outsourcing was never the plan for his company. "But I find with some of the newer products, it's a lot easier to get some of the products manufactured in China. It's a lot quicker and less expensive," he says. "Some of the quality of the work they do is very scary, it's so good."15 Overall there are two primary categories of outsourcing and offshoring implications to Europe:
  •                   European companies are likely to increase their use of outsourcing and offshoring. To cut costs and reduce capital investment. Most likely their use of outsourcing and offshoring to the ever-growing list of countries such as India, China and Mexico that are actively seeking economic diversification and investment.
  •                   Europe is losing its attractiveness as an outsourcing destination. It has slipped from second to eighth place as an attractive outsourcing destination behind India, China, Malaysia, Singapore, Philippines, and Brazil in a study conducted by A. T. Kearney.

Mergers and Acquisitions

Increasingly, organizations are joining forces through mergers (two companies becoming one) and acquisitions (one company buying another). These deals do not always   meet expectations, and  often  failures  may  be  due  to   "people    issues." 15 Ask What Another Country Can Do for You. Hale, Jeff. February 22, s.l. : The Globe and Mail, 2007., p 23
Recognizing this, some companies now heavily weigh the other organization's culture before they embark on a merger or acquisition. HRM should have a significant role in carrying out a merger or acquisition. Differences between the businesses involved in the deal make conflict inevitable. Training efforts should therefore include development of skills in conflict resolution. Also, HR professionals have to sort out differences in the two companies' practices with regard to rewards, performance appraisal, and other HR systems. Settling on a consistent structure to meet the combined organization's goals may help to bring employees together. HR's role is in engaging top talent and keeping them on board with challenging opportunities following a merger or acquisition.
  1. Required Professional Capabilities (RPCs) and Certification of HR Professionals
  The knowledge, skills, abilities, and other attributes required by an individual working in HR to demonstrate professional competence has been researched and defined by the European Council of Human Resources Associations. The resulting Required Professional Capabilities are grouped into seven functional dimensions as shown in Figure 4. Figure 4 : Required Professional Capabilities by Functional  Dimensions

2.6.                   Ethics in Human Resource Management

Whenever people's actions affect one another, ethical issues arise, and business decisions are no exception. Ethics refers to the fundamental principles of right and wrong; ethical behavior is behavior that is consistent with those principles. Business decisions, including HRM decisions, should be ethical, but the evidence suggests that is not always what happens. Recent surveys indicate that the general public and managers do not have positive perceptions of the ethical conduct of businesses. For example, in a survey conducted by the Wall Street Journal, 4 out of 10 executives reported they had been asked to behave unethically.16 The HR How-To box provides the Code of Ethics that identifies standards for professional and ethical conduct of HR practitioners. For human resource practices to be considered ethical they must satisfy the three basic standards summarized in Figure 5 First, HRM practices must result in the greatest good for the greatest number of people. Second, human resource practices must respect legal requirements including human rights and privacy. Third, managers must treat employees and customers equitably and fairly. To explore how ethical principles apply to a variety of decisions. Figure 5 : Standards for Identifying Ethical  Practices17 16  Ethics in America. Ricklees, R. November 3, s.l. : The Watt Street Journa, 2003., p33 17 Ffeffer, C. O'Reilly and J. , Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People . Cambridge, MA : Harvard Business School Press, 2000.

Closely related to the discussion of ethics and ethical practices is HR's role in organizational values and corporate social responsibility. For example, "there is increasing evidence that interest in environmental issues is motivating people's behavior as consumers, employees and jobseekers."18

Code of Ethics

Competence. Maintain competence in carrying out professional responsibilities and provide services in an honest and diligent manner. Ensure that activities engaged in are within the limits of one's knowledge, experience, and skill. When providing services outside one's level of competence, or the profession, the necessary assistance must be sought so as not to compromise professional responsibility. Legal requirements. Adhere to any statutory acts, regulation, or by-laws which relate to the field of human resources management, as well as all civil and criminal laws, regulations, and statutes that apply in one's jurisdiction. Not knowingly or otherwise engage in or condone any activity or attempt to circumvent the clear intention of the law. Dignityintheworkplace. Support, promote and apply the principles of human rights, equity, dignity and respect in the workplace, within the profession, and in society as a whole. Balancing interests. Strive to balance organizational and employee needs and interests in the practice of the profession. Confidentiality. Hold in strict confidence all confidential information acquired in the course of the performance of one's duties, and not divulge confidential information unless required by law and/or where serious harm is imminent. Conflict of interest. Either avoid or disclose a potential conflict of interest that might influence or might be perceived to influence personal actions or judgments. 18  Climate Change Sparks Attitude Shift. Vu, Uyen. March 26, s.l. : HR Reporter, 2007., p11
Professional growth and support of other professionals. Maintain personal and professional growth in human resources management by engaging  in activities that enhance the credibility and value of the profession. SOURCE: © Reproduced with permission by the Canadian Council ofHuman Resources Associations, www. cchra.ca/Web/ethics/content.aspx?f = 2956,retrievedMarch 12,2008.

2.7. HR Responsibilities  of Supervisors  and  Line Managers

  Although many organizations have human resource departments, HR activities are by no means limited to the specialists who staff those departments. In large organizations, HR departments advise and support the activities of the other departments. In small organizations, there may be an HR specialist, but many HR activities are carried out by supervisors and other line managers. Either way, non- HR managers need to be familiar with the basics of HRM and their role with regard to managing human resources. Supervisors and non-HR managers typically have responsibilities related to all the HR functions. Figure 6 shows some HR responsibilities that supervisors and line managers are likely to be involved in. Organizations depend on supervisors to help them determine what kinds of work need to be done (job analysis and design) and in what quantities (workforce planning). Supervisors and line managers typically interview job candidates and participate in the decisions about which candidates to hire. Many organizations expect supervisors to train employees in some or all aspects of the employees' jobs. Supervisors conduct performance appraisals and may recommend pay increases. And, of course, supervisors and line managers play a key role in employee relations, because they are most often the voice of management for their employees, representing the company on a day-to-day basis. Throughout these activities, supervisors and line managers can participate in HRM by taking into consideration how decisions and policies will affect their employees. Understanding the principles of communication, motivation, and other elements of human behavior can help supervisors and line managers engage and inspire the best from the organization's human resources.
Figure 6 : Typical Areas ofInvolvements  

2.8.                   Careers in Human Resource Management

There are many different types of jobs in the HRM profession. Figure 7 shows selected HRM positions and their salaries. The salaries vary according to education and experience, as well as the type of industry in which the person works. The Occupational Classification identifies one specific broad classification of human resources occupations: "Specialists in Human Resources." Figure 8 provides a summary of average hourly earnings, employment outlook, and average levels of unemployment. This resource also provides similar information for thousands of other occupations. Some positions in HRM involve work in specialized areas such as recruiting, training, or labor and industrial relations. Other positions call for generalists to perform a full range of HRM activities, including recruiting, training, compensation, and employee relations. Many recent entrants have a university degree or college diploma. In 2011, CHRP candidates will require a degree to qualify for the CHRP designation, a change likely to advance the status of the CHRP among employers.
Figure 7 : Salaries for HRM  Positions   Figure 8 : Average Hourly Earnings inHR SOURCE: Based on Society for Human Resource Management—Mercer Survey 2003,as reported in J. Vocino, "On the Rise," HR Magazine, November 2003, pp. 75-84; and F.Hansen, "2003 Data Bank Annual," Workforce Management 82, no. 13 (2003), p. 88. Based onSocietyfor Human Resource Management—2003 as reported in J. Vocino, "On the Rise,"  HR Magazine, pp. 75-84; and F. Hansen, "2003 Data Bank Annual," Vvorkioros Management82, no. 13 (2003), p.88.
A well-rounded educational background will likely serve a person well. As one HR professional noted, one of the biggest misconceptions is that  [HRM] is all warm and fuzzy communications with the workers. Or that it is creative and involved in making a more congenial atmosphere for people at work. Actually it is both of those some of the time, but most of the time it is a big mountain of paperwork, which calls on a myriad of skills besides the "people" type. It is law, accounting, philosophy, and logic as well as psychology, spirituality, tolerance, and humility.

2.9.                   Change in the Labor Force

    The labor force is a general way to refer to all the people willing and able to work. For an organization, the internal labor force consists of the organization's workers—its employees and the people who work at the organization. This internal labor force is drawn from the organization's external labor market, that is, individuals who are actively seeking employment. The number and kinds of people in the external labor market determine the kinds of human resources available to an organization (and their cost). Human resource professionals need to be aware of trends in the composition of the external labor market, because these trends affect the organization's options for creating a well-skilled, motivated internal labor force. One significant trend relates to the impending shortage of workers as the labor force actually shrinks in some developed countries. Generation X (born 1965-1980) grew up in the wake of the baby boomers. Dual- income families produced a generation of children with greater responsibility for taking care of themselves. Generation X employees are inclined to be cynical about the future because of their experience with recessions and downsizing and tend to be independent, technology-sawy, and results-driven. Generation Y (born 1981- 2000) have been born and raised in a multicultural society resulting in tolerance to differences in race, religion, and culture.19 19  The Generational Divide. Gait, Virginia. March 31, s.l. : The Globe and Mail, 2004., p 6
Figure 9 : Decline of LabourForce         Figure 10 : Age Distribution Projection of the EuropeanPopulation20 * Due to rounding, the totals do not always add up to the sum of thefigure Employees view work as a means to self-fulfillment that is, a means to more fully use their skills and abilities, meet their interests, and live a desirable lifestyle. One report indicates that if employees receive opportunities to fully use and develop their skills, has greater job responsibilities, believe the promotion system is fair, and have a trustworthy manager who represents die employee’s best interests; 20  Halcrow, A. Priorities for Competitive Advantage: An IBM Study . s.l. : IBM, 2002.
they are more committed to their companies.21 Fostering these values requires organizations to develop HRM practices that provide more opportunity for individual contribution and entrepreneurship (in this context, taking responsibility for starting up something new).22 Because many employees place more value on the quality of network activities and family life than on pay and production, employees will demand more flexible work policies that allow them  to choose work hours and the places where work is performed. Figure 11 : HRM Practices that Support DiversityManagement23

Employers will likely find that many talented older workers want to continue contributing through their work, though not necessarily in a traditional eight-to- five job. For organizations to attract and keep talented older workers, many will have to rethink how they design jobs. Phyllis Ostrowsky, in her mid-fifties, enjoyed her position as a store manager for 13 years, and she went out of her way to provide good customer service. But her job responsibilities and hours expanded to the point they became excessive. She eventually was working 12-hour days and was too busy to give customers the personal touch she liked to deliver. Ostrowsky therefore left her store job for a position as an office manager with another company.24

21 The Generational Divide. Gait, Virginia. March 31, s.l. : The Globe and Mail, 2004., p 7 22 Affairs, Bureau of National. Employee Dissatisfaction on Rise in Last 10 Years, New Report Says. Washington, DC : Employee Relations Weekly , 2006., p 122 23  Halcrow, A. Priorities for Competitive Advantage: An IBM Study . s.l. : IBM, 2002. 24 Shellenbarger, S. Companies Must Try Harder to Attract Older Employees . The Wall Street Journal. 2001, May 23., p 31

2.10.             Change in the Employment Relationship

 

Economic downturns resulting in layoffs and bankruptcies have played a major role in changing the basic relationship between employers and employees.

A New Psychological Contract

I can think of the relationship between employers and employees in terms of a psychological contract, a description of what an employee expects to contribute in an employment relationship and what the employer will provide the employee in exchange for those contributions.25 Unlike a sales contract, the psychological contract is not formally put into writing. Instead, it describes unspoken expectations that are widely held by employers and employees. In the traditional version of this psychological contract, organizations expected their employees to contribute time, effort, skills, abilities, and loyalty. In return, the organizations would provide job security and opportunities for promotion. However, this arrangement is being replaced with a new type of psychological contract. To stay competitive, modern organizations must frequently change the quality, innovation, creativeness, and timeliness of employee contributions and the skills needed to make those contributions. This need has led to organizational restructuring, mergers and acquisitions, layoffs, and longer hours for many employees. Companies demand excellent customer service and high productivity levels. They expect employees to take more responsibility for their own careers, from seeking training to balancing work and family. These expectations result in less job security for employees, who can count on working for several companies over the course of a career. Today, the average length of time a person holds a job is seven years.26 In exchange for top performance and working longer hours without job security, employees want  companies  to  provide  flexible  work  schedules,  effective work 25 Psychological and Implied Contracts in Organizations. Rousseau, D. M. 2, s.l. : Employee Rights and Responsibilities Journal, 1999., p 122 26 Tejada, C. For Many, Taking Work Home Is Often a Job Without Reward. The Watt Street Journal. Interactive Edition, 2002, March 5., p 48
environments, more control over how they accomplish work, training and development opportunities, and financial incentives based on how  the organization performs.

Flexibility

The new psychological contract largely results from the HRM challenge of building a committed, productive workforce in turbulent economic conditions that offer opportunity for financial success but can also quickly turn sour, making every employee expendable. From the organization's perspective the key to survival in a fast-changing environment is flexibility. Organizations want to be able to change as fast as customer needs and economic conditions change. Flexibility in human resource management includes flexible staffing levels and flexible work schedules. A flexible workforce is one the organization can quickly reshape and resize to meet its changing needs. To be able to do this without massive hiring and firing campaigns, organizations are using more flexible staffing arrangements. Flexible staffing arrangements are methods of staffing other than the traditional hiring of full-time employees. There are a variety of methods, the following being most common:
  • Independent contractors are self-employed individuals with multiple clients.
  • On ‘Call workers are persons who work for an organization only when they are needed.
  • Temporary workers are employed by a temporary agency; client organizations pay the agency for the services of these workers
  • Contract company workers are employed directly by a company for a specific time specified in a written contract.

HUMAN RESOURCE MANAGEMENT IN INTERNATIONAL COMPANIES

  Research in Motion (RIM) is a leading designer, manufacturer, and marketer of innovative wireless solutions for the worldwide mobile communications market. RIM's portfolio of award-winning products, including the BlackBerry, is used by organizations and individuals around the world. The company, founded in 1984 and based in Waterloo, Ontario, continues to grow rapidly and is a significant player in the global market. RIM's core Asia Pacific contact center is in Singapore, but is expanding with a presence in Hong Kong, China, Australia, and India. RIM's European headquarters are based in London and current expansion includes France, Germany, Poland, the Netherlands, Belgium, Hungary, Italy, Spain, and South Africa. Operations in the Americas include several offices in the United States, including ones in Chicago, Dallas, and Seattle, and in Mexico and the Caribbean. A search of the "Careers" area of RIM's website provides some insight about the extent of globalization of RIM's business structure and operations. For example, at the time of this writing, 1,043 job openings were listed for RIM's worldwide operations. This included openings for Manager of Compensation 6k Benefits in the UK, Business Development Manager in Hong Kong, Field Marketing and Training Specialist in Mexico, Facilities Manager in Fort Lauderdale, and a Public Relations Manager based in Sydney, Australia. According to a PwC survey of almost 3,000 line executives and HR executives from 12 countries, international competition is the number one factor affecting human resource management. The globalization of business structures and globalization of the economy ranked fourth and fifth, respectively. Business decisions such as whether to enter foreign markets or set up operations in other countries are complex, and in the course of moving and executing them many human resource issues surface.27 27  PwC. RIM HR Audit Report. London : PricewaterhouseCoopers UK Ltd., 2011.

This chapter discusses the HR issues that organizations must address in a world of global competition. I begin by describing how the global nature of business is affecting human resource management in modem organizations. Next, I identify how global differences among countries affect the organization's decisions about human resources. Based on personal interview and internal global HR audit provided by PwC I have identified four critical areas of HRM success in this company:

  • Preparing for and Acquiring Human Resources
  • Managing Talent
  • Managing Human Resources Globally
  • Creating and Maintaining High-Performance Organizations28
In the following sections I will explore those in international settings and will examine guidelines for managing employees on international assignments. 28  PwC. RIM HR Audit Report. London : PricewaterhouseCoopers UK Ltd., 2011.

3.  Preparing for and Acquiring Human Resources

  Speaking specifically about recruitment, number one, in order to properly assess candidates and recognize talent, you need to have a genuine interest in others. Talent is not always obvious, so be engaged, learn their story! The second thing you need is to develop good questioning techniques that put people at ease. People are more likely to respond in a straightforward manner when the interviewer is on their side. Give candidates the opportunity to think and express themselves. You will be much more likely to extract valid, accurate, and pertinent data about the interviewee. The third essential attribute is you have to be kind and empathetic. Searching for a job is often not a pleasurable experience. Job seekers deal with the inevitable rejection and worries associated with their future and financial security, and often question their self-worth. Whether or not they are successful in obtaining a position through you, they should remember speaking with you and dealing with your company as a positive experience. Finally, act with urgency.

Work Flow in Organizations

Informed decisions about jobs take place in the context of the organization's overall work flow. Through the process of work flow design, managers analyze the tasks needed to produce a product or service. With this information, they assign these tasks to specific jobs and positions. (A job is a set of related duties. A position is the set of duties performed by one person. A school has many teaching positions; the person filling each of those positions is performing the job of teacher.) Basing these decisions on workflow design can lead to better results than the more traditional practice of looking at jobs individually.

Work Flow Analysis

Before designing its workflow, the organization's planners need to analyze what work needs to be done. Figure 12 shows the elements of a workflow analysis. For each type of work, such as producing a product line or providing a support service (accounting, legal support, and  so  on),  the  analysis identifies  the  output  of the
process, the activities involved, and three categories of inputs: raw inputs (materials and intonation), equipment, and human resources. Outputs are the products of any work unit, whether a department, team, or individual. An output can be as readily identifiable as a completed purchase order, and considers not only the amount of output but also quality standards. This attention to outputs has only recently gained attention among HR professionals. However, it gives a clearer view of how to increase the effectiveness of each work unit. Figure 12 : Deploying a Work-Unit ActivityAnalysis29    

For the outputs identified, workflow analysis then examines the work processes used to generate those outputs. Work processes are the activities that members of a  work   unit  engage   in  to   produce  a  given  output.  Every process consists of

29  PwC. RIM HR Audit Report. London : PricewaterhouseCoopers UK Ltd., 2011

operating procedures that specify how things should be done at each stage of developing the output. These procedures include all the tasks that must be performed in producing the output usually; the analysis breaks down the tasks into those performed by each person in the work unit. This analysis helps with design of efficient work systems by clarifying which tasks are necessary. Typically, when a unit's workload increases, the unit adds people, and when the work load decreases, some members of the unit may busy themselves with unrelated tasks in an effort to appear busy. Without knowledge of work processes, it is more difficult to identify whether the work unit is properly staffed. Knowledge of work processes also can guide staffing changes when work is automated or outsourced at Unifi analysts at the company's headquarters. Unifi no longer requires supervisors to carry out the tasks of monitoring and reporting on production.30

The final stage in workflow analysis is to identify the inputs used in the development of the work unit's product. As shown in Figure 14, these inputs can be broken down into the raw inputs (materials and knowledge), equipment, and human skills needed to perform the tasks. Makers of athletic shoes need nylon and leather, shoemaking machinery, and workers to operate the machinery, among other inputs. Nike and Reebok minimize the cost of inputs by subcontracting manufacturing to factories in countries where wages are low. In contrast, New Balance Athletic Shoes operates a factory in the United States, where modern technology and worker training enable the company to afford North American workers. Teams of employees use automated equipment that operates over 20 sewing machines simultaneously. The employees are cross-trained in all tasks. The highly efficient factory produces shoes much faster than a typical shoe factory in China.31

Work Flow Design and Organization's Structure

Besides looking at the work flow of each process, it is important to see how the work fits within the context of the organization's structure. Within an organization, 30  Shook, D. Why Nike Is Dragging Its Feet. BusinessWeek Online. 2007, March 19. 31  Little, D. Even the Supervisor Is Expendable: The Internet .Allows Factories to Be Managed from .Anywhere. BusinessWeek. 2005, July  23.
units and individuals must cooperate to create outputs. Ideally, the organization's structure brings together the people who must collaborate in order to efficiently produce the desired outputs. The structure may do this in a way that is highly centralized (i.e., with authority concentrated in a few people at the top of the organization) or decentralized (with authority spread among many people). The organization may group jobs according to functions (e.g., welding, painting, packaging), or it may set up divisions to focus on products or customer groups. Although there are an infinite number of ways to combine the elements of an organization's structure, I can make some general observations about structure and work design. If the structure is strongly based on function, workers tend to have low authority and to work alone at highly specialized jobs. Jobs that involve teamwork or broad responsibility tend to require a structure based on divisions other than functions. When the goal is to engage employees, companies therefore need to set up structures and jobs that enable broad responsibility, such as jobs that involve employees in serving a particular group of customers or producing a particular product, rather than performing a narrowly defined function. Work design often emphasizes the analysis and design of jobs. Although all of these approaches can succeed, each focuses on one isolated job at a time. These approaches do not necessarily consider how that single job fits into the overall work flow or structure of the organization. To use these techniques effectively, human resource professionals should also understand their organization as a whole. Without this big-picture appreciation, they might redesign a job in a way that makes sense for the job but is out of line with the organization's workflow, structure, or strategy.

3.1.                   Job Analysis

To achieve high-quality performance, organizations have to understand and match job requirements and people. This understanding requires job analysis, the process of getting detailed information about jobs. Analyzing jobs and understanding what is required to carry out a job provide essential knowledge for staffing,  training,   performance   appraisal,   and   many   other   HR   activities. For
instance, a supervisor's evaluation of an employee's work should be based on performance relative to job requirements. In very small organizations, line managers may perform a job analysis, but usually the work is done by a human resource professional. A large company may have a compensation management or total rewards function that includes job analysts. Organizations may also contract with firms that provide this service.

Job Descriptions

A key outcome of job analysis is the creation of job descriptions. A job description is a list of the tasks, duties, and responsibilities (TDRs) that a job entails. TDRs are observable actions. For example, a news photographer's job requires the jobholder to use a camera to take photographs. If you were to observe someone in that position for a day, you would almost certainly see some pictures being taken. When a manager attempts to evaluate job performance; it is most important to have detailed information about the work performed in the job (i.e., the TDRs). This information makes it possible to determine how well an individual is meeting each job requirement.

Writing a Job Description

Preparing a job description begins with gathering information from sources who can identify the details of performing a task. These sources may include persons already performing the job and, the supervisor, team leader, or, if the job is new, managers who are creating the new position. Asking the purpose of the new position can provide insight into what the company expects this person to accomplish. Besides people, sources of information may include the company's human resource files, such as past job advertisements and job descriptions, as well as general sources of information about similar jobs, such as Human Resources and Social Development system.
There are several ways to gather information about the duties of a job:
  • Employees can fill out a questionnaire that asks about what they do or complete a diary that details their activities over several days.
  • A job analyst can visit the workplace and watch or videotape an employee performing the job. This method is most appropriate for jobs that are repetitive and involve physical activity.
  • A job analyst can visit the workplace and ask an employee to show what the job entails. This method is most appropriate for clerical and technical jobs.
  • A manager or supervisor can describe what a person holding a job must do to be successful. What would the jobholder's outputs be? Would customers have clear answers to their questions? Would decision makers in the organization have accurate and timely data from this person? The analyst can identify the activities necessary to create these outputs.
  • A supervisor or job analyst can review company records related to performing the job for example, work orders or summaries of customer calls. These records can show the kinds of problems a person solves in the course of doing a job.32
After gathering information, the next thing to do is list all the activities and evaluates which are essential duties. One way to do this is to rate all the duties on a scale of 1 to 5, where 1 is most important. A rating scale could also rank the tasks according to how much time the person spends on them. Perhaps the ratings will show that some tasks are desirable but not essential. Gathering information from many sources helps to verify which tasks are essential. Perhaps the jobholder is aware of some activities that others do not notice. In other cases, he or she might perform activities that are merely habits or holdovers from a time when they were essential. When different people analyzing a job come to different conclusions about which activities are essential, the person writing the job description should compare the listed activities with the company's goals and 32 Ffeffer, C. O'Reilly and J. , Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People . Cambridge, MA : Harvard Business School Press, 2000.
work flow to see which are essential. A group discussion also may help categorize tasks as essential, ideal, and unnecessary. From these sources, the writer of the job description obtains the important elements of the description:
  • Title of the job. The title should be descriptive and, if appropriate, indicate the job's level in the organization by using terms such as junior, senior, assistant, and executive.
  • Administrative information about the job. Depending on the company's size and requirements, the job description may identify a division, department, supervisor's title, date of the analysis, name of the analyst, and other information for administering the company's human resource activities.
  • Summary of the job, focusing on its purpose and duties. This summary should be brief and as specific as possible, including types of responsibilities, tools and equipment used, and level of authority (e.g., the degree of authority and responsibility of the jobholder—how closely the person is supervised and how closely the person supervises others or participates in teamwork).
  • Essential duties of the job. These should be listed in order of importance to successful performance of the job and should include details such as physical requirements (e.g., the amount of weight to be lifted), the persons with whom an employee in this job interacts, and the results to be accomplished. This section should include only duties that the job analysis identified as essential.
  • Additional responsibilities. The job description may have a section stating that the position requires additional responsibilities as requested by the supervisor.
  • Job specifications. The specifications cover the knowledge, skills, abilities, and other characteristics required for a person to be qualified
to perform the job successfully. These may appear at the end of the job description or as a separate document.33 Whenever the organization creates a new job, it needs to prepare a job description, using a process such as the one detailed in the HR How-To box. Job descriptions should then be reviewed periodically (say once a year) and updated if necessary. Performance appraisals can provide a good opportunity for updating job descriptions, as the employee and supervisor compare what the employee has been doing against the details of the job description. When organizations prepare many job descriptions, the process can become repetitive and time-consuming. To address this challenge, a number of companies have developed software that provides forms into which the job analyst can insert details about the specific job. Typically, the job analyst would use a library of basic descriptions, selecting one that is for a similar type of job and then modifying it to fit the organization's needs. Organizations should provide each newly hired employee a copy of his or her job description. This helps the employee to understand what is expected, but it shouldn't be presented as limiting the employee's commitment to quality and customer satisfaction. Ideally, employees will want to go above and beyond the listed duties when the situation and their abilities call for that. Many job descriptions include the phrase and other duties as required as a way to remind employees not to tell their supervisor, "But that's not part of my job."

Job Specifications

Whereas the job description focuses on the activities involved in carrying out a job, a job specification looks at the qualities of the person performing the job. It is a list of the competencies that are; knowledge, skills, abilities, and other characteristics associated with effective job performance. Knowledge refers to factual or procedural information necessary for successfully performing a task. For example, this course is providing you with knowledge in how to manage human resources. A 33 Ffeffer, C. O'Reilly and J. , Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People . Cambridge, MA : Harvard Business School Press, 2000.

skill is an individual's level of proficiency at performing a particular task the capability to perform it well. With knowledge and experience, you could acquire skill in the task of preparing job specifications. Ability, in contrast to skill, refers to a more general enduring capability that an individual possesses. A person might have the ability to cooperate with others or to write clearly and precisely. Finally, other characteristics might be personality traits such as someone's persistence or motivation to achieve. Some jobs also have legal requirements, such as licensing or certification.

In developing job specifications, it is important to consider all of the elements of the competencies. As with writing a job description, the information can come from a combination of people performing the job, people supervising or planning for the job, and trained job analysts. Accurate information about competencies is especially important for making decisions about who will fill a job. A manager attempting to fill a position needs information about the characteristics required, and about the characteristics of each applicant. Interviews and selection decisions should therefore focus on competencies. The identification of competencies is also being implemented widely in the public sector. These competencies include detailed descriptions, such as the behaviors as well as the knowledge, skills, and abilities associated with each competency. Competencies identified for middle managers in the federal public sector include intellectual competencies (e.g., cognitive capacity); management competencies (e.g., teamwork); relationship competencies (e.g., communication); and personal competencies (e.g., stamina or stress resistance).

Fleishman Job Analysis System

To gather information about worker requirements, the Fleishman Job Analysis System asks subject-matter experts (typically job incumbents) to evaluate a job in terms of the abilities required to perform the job.34 The survey is based on 52 categories    of    abilities, ranging   from    written    comprehension    to deductive 34

reasoning, manual dexterity, stamina, and originality. As in the example in Figure 13, the survey items are arranged into a scale for each ability. Each begins with a description of the ability and a comparison to related abilities. Below this is a seven-point scale with phrases describing extremely high and low levels of the ability. The person completing the survey indicates which point on the scale represents the level of the ability required for performing the job being analyzed.

                                     Written Comprehension

This is the ability to understand written sentences and paragraphs. How written comprehension is different from other abilities: Figure 13 : Example of Ability from the Fleishman Job AnalysisSystem35 When the survey has been completed in all 52 categories, the results provide a picture of the ability requirements of a job. Such information is especially useful for employee selection, training, and career development.       35  Brown, David. HR Pulled in Two Directions at Once. 2004 : HR Reporter

                                                    Importance of Job Analysis

  Job analysis is so important to HR managers that it has been called the building block of everything that HR does. The fact is that almost every human resource management program requires some type of information gleaned from job analysis:36
  • Work redesign. Often an organization seeks to redesign work to make it more efficient or to improve quality. The redesign requires detailed information about the existing job(s).
  • Workforce planning. As planners analyze human resource needs and how to meet those needs, they must have accurate information about the levels of skill required in various jobs, so that they can tell what kinds of human resources will be needed.
  • Selection. To identify the most qualified applicants for various positions, decision makers need to know what tasks the individuals must perform, as well as the necessary knowledge, skills, and abilities.
  • Training. Almost every employee hired by an organization will require training. Any training program requires knowledge of the tasks performed in a job, so that the training is related to the necessary knowledge and skills.
  • Performance appraisal. An accurate performance appraisal requires information about how well each employee is performing in order to reward employees who perform well and to improve their performance if it is below expectations. Job analysis helps in identifying the behaviors and the results associated with effective performance.
  • Career planning. Matching an individual's skills and aspirations with career opportunities requires that those responsible for developing career planning processes know the skill requirements of the various jobs. This facilitates matching of individuals to jobs in which they will succeed and be satisfied.
Job analysis supports several of these activities when it comes to automating major job duties, as described in the e-HRM box. The Royal Canadian Mounted Police (RCMP) has an 36 Wexley, P. Wright and K. How to Choose the Kind of Job .Analysis You Really Need. s.l. : Personnel, 2005, p 51
automated resource, a database that identifies the functions and  competency requirements of specific RCMP jobs; it integrates information about jobs to various HR functions. For example, the database links "Job Profiles," materials to help understand what the job is all about, with "Development Activities," which provide information about formal learning opportunities including workshops, online courses, and offline resources such as articles and videos. The link "Problem-Based Learning" leads to scenarios that test one's skills and "Performance Management" allows employees and their supervisors to get assistance in determining competencies for further development.

3.2.                   Job Design

  Although job analysis, as just described, is important for an understanding of existing jobs, organizations also must plan for new jobs. When an organization is expanding, supervisors and human resource professionals must help plan for new or growing work units. When an organization is trying to improve quality or efficiency, a review of work units and processes may require a fresh look at how jobs are designed. These situations call for job design, the process of defining the way work will be performed and the tasks that a given job requires, or job redesign, a similar process that involves changing an existing job design. To design jobs effectively, a person must thoroughly understand the job itself (through job analysis) and its place in the larger work unit's work flow process (through work flow analysis). Having a detailed knowledge of the tasks performed in the work unit and in the job, a manager then has many alternative ways to design a job. As shown in Figure 14, the available approaches emphasize different aspects of the job: the mechanics of doing a job efficiently, the job's impact on motivation, the use of safe work practices, and the mental demands of the job.

                                     Designing Efficient Jobs

  If workers perform tasks as efficiently as possible, not only does the organization benefit from lower costs and greater output per worker, but workers should be less fatigued.
Typically, applying industrial engineering to a job reduces the complexity of the work, making it so simple that almost anyone can be trained quickly and easily to perform the job. Such jobs tend to be highly specialized and repetitive. Figure 14 : Approaches to JobDesign37   In practice, the scientific method traditionally seeks the "one best way" to perform a job by performing time-and-motion studies to identify the most efficient movements for workers to make. Once the engineers have identified the most efficient sequence of motions, the organization should select workers based on their ability to do the job, and then  train them in the details of the "one best way" to perform that job. The company also should offer pay structured to motivate workers to do their best. Despite the logical benefits of industrial engineering, a focus on efficiency alone can create jobs that are so simple and repetitive that workers get bored. Workers performing these jobs may feel their work is meaningless. Hence, most organizations combine industrial engineering with other approaches to job design.

                                     Designing Jobs That Motivate

  Especially when organizations have to compete for employees, depend on skilled knowledge workers, or need a workforce that cares about customer satisfaction, a pure focus on efficiency will not achieve human resource objectives. These organizations need jobs that employees find interesting and satisfying and job 37  Brown, David. HR Pulled in Two Directions at Once. 2004 : HR Reporter
design should take  into account factors that make jobs motivating to employees. A model that shows how to make jobs more motivating is the Job Characteristics Model, developed by Richard Hackman and Greg Oldham. This model describes jobs ill terms of five characteristics:
  • Skill variety. The extent to which a job requires a variety of skills to carry out the tasks involved.
  • Task identity. The degree to which a job requires completing a "whole" piece of work from beginning to end (e.g., building an entire component or resolving a customer's complaint).
  • Task significance. The extent to which the job has an important impact on the lives of other people.
  • Autonomy. The degree to which the job allows an individual to make decisions about the way the work will be carried out.
  • Feedback. The extent to which a person receives clear information about performance effectiveness from the work itself.38
As shown in Figure 15, the more of each of these characteristics a job has, the more motivating the job will be, according to the Job Characteristics Model. The model predicts that a person with such a job will be more satisfied and will produce more and better work. This approach to designing jobs includes such techniques as job enlargement, job enrichment, self-managing work teams, flexible work schedules, and telework. 38 Wexley, P. Wright and K. How to Choose the Kind of Job .Analysis You Really Need. s.l. : Personnel, 2005.
Figure 15 : Characteristics of a MotivatingJob39  

                                            Self-Managing Work Teams

  Instead of merely enriching individual jobs, some organizations engage employees by designing work to be done by self-managing work teams. These teams have authority for an entire work process or segment. Team members typically have authority to schedule work, hire team members, resolve problems related to the team's performance, and perform other duties traditionally handled by management. Teamwork can give a job such motivating characteristics as autonomy, skill variety, and task identity. Because team members' responsibilities are great, their jobs usually are defined broadly and include sharing of work assignments. Team members may, at one time or another, perform every duty of the team. The challenge for the organization is to provide enough training so that the team members can learn the necessary skills. Another approach, when teams are responsible for particular work processes or customers, is to assign the team responsibility for the process or customer, then let the team decide which members will carry out which tasks. Teamwork can certainly make jobs more interesting, but teamwork's effectiveness is not guaranteed. Self-managing teams are most likely to accomplish their goals if they involve 6 to 18 employees who share the same technology (tools or ideas), location, and work hours. Such teams can be especially beneficial when a group's skills are relatively easy to learn (so that employees can readily learn one another's jobs) and demand for particular activities shifts from day to day (requiring flexibility). In addition, the job specifications 39 Wexley, P. Wright and K. How to Choose the Kind of Job .Analysis You Really Need. s.l. : Personnel, 2005.
should help the organization identify employees who will be willing and able to cooperate for the team's success. Such employees likely will have good problem-solving skills and be able to communicate well.

Flexible Work Schedules

  One way an organization can give employees some say in how their work is structured is to offer flexible work schedules. Depending on the requirements of the organization and the individual jobs, organizations may be able to be flexible in terms of when employees work. Types of flexibility include flextime and job sharing. Figure 16 illustrates alternatives to the traditional 40 hours’ workweek. Flextime is a scheduling policy in which full-time employees may choose starting and ending times within guidelines specified by the organization. The flextime policy may require that employees be at work between certain hours, say, 10:00 and 15:00 Employees work additional hours before or after this period in order to work the full day. One employee might arrive early in the morning in order to leave at 15:00 to pick up children after school. Another employee might be a night-owl who prefers to arrive at 10:00 and work until 18:00, 19:00 or even later in the evening. A flextime policy may also enable workers to adjust a specific day's hours in order to make time for doctor's appointments, children's activities, hobbies, or volunteer work. A work schedule that allows time for community and family interests can be extremely motivating for some employees. Job sharing is a work option in which two part-time employees carry out the tasks associated with a single job. Such arrangements can enable an organization to attract or retain valued employees who want more time to attend school or to care for family members. The job requirements in such an arrangement include the ability to work cooperatively and coordinate the details of one's job with another person.
40                                                                     40  PwC. RIM HR Audit Report. London : PricewaterhouseCoopers UK Ltd., 2011.

4.  Managing Talent

  The PCL family of companies, established in 1906, is the largest general contracting organization in Canada, and among the largest in the United States. The PCL College of Construction, unique to the construction industry, has a campus or private learning space in each operating center. The goal is to communicate today's technology to employees and help prepare them for tomorrow's challenges, whether through self-directed learning activities, instructor-directed learning, or some other teaching or mentoring activity. PCL describes its strategy to be the employer of choice in the North American Construction industry as "They invest in us; I invest in them." PCL expanded its commitment to the College of Construction by building the $13 million Centennial Learning Centre to commemorate PCL's 100th anniversary. The 29,000-square-foot addition to PCL's existing ten-acre business park in south Edmonton, serves as the training and development hub for the construction group. The College of Construction offers courses and learning materials that develop skills in five main areas:
  • Personal. To enrich our personal abilities to learn, to communicate, and to organize ourselves.
  • Interpersonal. To build on our skills to interact effectively with one another. Leadership and management: To demonstrate and practice new methods for the man-agreement of our key resources: our people, our time, our materials/equipment, and our finances.
  • Technical. To ensure that PCL employees have the appropriate opportunities to become and remain technically competent in key construction techniques, computer skills, and safety.
  • QUEST (skills for continuous improvement). to help develop innovative ways for working that will help
In today's demanding and rapidly changing business environment, more and more companies are viewing employees as the talent upon which the organization's success is dependent. Organizations and their employees must constantly   expand
their competencies to meet customer needs and operate globally. More companies organize work in terms of projects or customers, rather than specialized functions, so employees need to acquire a broad range of technical and interpersonal skills. Many companies expect employees at all levels to perform roles once reserved for management. Organizations are required to provide training and development opportunities to employees without regard to prohibited grounds of discrimination, including characteristics such as sex, race, ethnic origin, and age. In this climate, organizations are placing greater emphasis on training and development.
Focus Current Future
Use of workexperiences Low High
Goal Preparation for   current job Preparation for changes
Participation Required Voluntary
Table 3 : Training versus  Development41 Training consists of an organization's planned efforts to help employees acquire job- related competencies with the goal of applying these on the job. A training program may range from formal classes to one-on-one coaching, and it may take place on the job or at remote locations. No matter what its form, training can benefit the organization when it is linked to organizational needs and when it motivates employees. Employees' commitment to their organization depends on how their managers treat them. To "win the war for talent" managers must be able to identify high-potential employees, make sure the organization uses the talents of these people, and reassure them of their value, so that they do not become dissatisfied and leave the organization. Managers also must be able to listen. Although new employees need direction, they expect to be able to think independently and be treated with respect. In all these ways, managers provide for 41 Diagnosing Management Development Needs: An Instrument Based on How Managers Develop. Lombardo, C. D. McCauley and M. M. s.l. : Journal of Management ,  2003.
employee development the combination of formal education, job experiences, relationships, and assessment of personality and competencies to help employees prepare for the future of their careers. Human resource management establishes a process for employee development that prepares employees to help the organization meet its goals. Table 3 summarizes the traditional differences between training and development.

4.1.                                                         Training and Development Linked to Organizational Needs and Strategy

Workplace training and employee development are key ingredients in the competitiveness of firms and ultimately of national competitiveness.42 Rapid change, especially in the area of technology, requires that employees continually learn new skills and upgrade their current skills. The new psychological contract has created the expectation that employees invest in their own career development. Employees with this expectation will value employment at an organization that provides learning opportunities. Growing reliance on teamwork creates a demand for the ability to solve problems in teams, an ability that often requires formal training. Finally, the diversity of the Canadian population, coupled with the globalization of business, requires that employees be able to work well with people who are different from them. Successful organizations often take the lead in developing this ability. Some organizations are developing their employer brand and reputation as a talent developer. These organizations emphasize training, career, and developmental opportunities as a means of gaining competitive advantage in the war for talent.3 how are Canadian firms investing in and supporting learning? How does Canada compare with other countries? The Conference Board of Canada explores these and other questions in its Training and Development Outlook Report. The study reveals that  Canadian firms continue to under-invest in learning and that Canada lags the United States and other countries in employee training, this could have serious adverse effects on long-term productivity as well as have serious ramifications for competitiveness—for both workers and markets on the world stage. 42Bindhani, Pinoo. Internships a Win for Immigrants Firms. HR Reporter. 2007, 10., p. 22
This survey of employers found that training remained relatively flat compared with previous years. Average training dollars represented 1.8 percent of payroll (the average per capita direct expenditure on training and development across all industries in Canada was $852 in 2006) down by 17 percent since 1996 in real terms (factoring inflation into the calculation). The average Canadian employee received 25 hours—or more than three workdays—of training in 2006.43 This is down 10 percent from 2004. When the average employee received 28 hours. Organizations indicated that approximately one-third of employees did not receive any formal training at all. The International Institute for Management Development (IMD) suggests that Europe has slipped by various measures of employee training investment. The IMD ranked Canada as 9th place in 2002 and 13th place in 2006... With training so essential in modern organizations, it is important to provide training that is effective. An effective training program actually teaches what it is designed to teach, and it teaches skills and behaviors that will help the organization achieve its goals. Training programs may prepare employees for future positions in the organization, enable the organization to respond  to  change,   reduce turnover, enhance worker safety, improve customer service and product design, and meet many other goals. To achieve those goals, HR professionals approach training through instructional design a process of systematically developing training to meet specified needs. A complete instructional design process includes the steps shown in Figure 17. It begins with an assessment of the needs for training what the organization requires that its people know and be able to do. Next, the organization ensures that employees are ready for training in terms of their attitudes, motivation, skills, work environment. 43 Network Destruction: The Structural Implications of Downsizin. Shaw, P. P. 43, s.l. : 2000., p 101
The third step is to plan the training program, including program's objectives, instructors, and methods. The organization then implements the program. Finally, evaluating the results of the training provides feedback for planning future training programs.

4.2.    Needs Assessment and Assessing Readiness for Training

Instructional design logically should begin with a needs assessment, the process of evaluating the organization, individual employees, and employees' tasks to determine what kinds of training, if any, are necessary. As this definition indicates, the needs assessment answers questions in the three broad areas shown in Figure 18
  • Organization. What is the context in which training will occur?
  • Person. Who needs training?
  • Task. What topics should the training cover?
Figure 18 : NeedsAssessment44                         The answers to these questions provide the basis for planning an effective training program. 44  Little, D. Even the Supervisor Is Expendable: The Internet .Allows Factories to Be Managed from .Anywhere. BusinessWeek. 2005, July  23.
A variety of conditions may prompt an organization to conduct a needs assessment. Management may observe that some employees lack basic skills or are performing poorly. Decisions to produce new products, apply new technology, or design new jobs should prompt a needs assessment, because these changes tend to require new skills. The decision to conduct a needs assessment also may be prompted by outside forces, such as customer requests or legal requirements. The outcome of the needs assessment is a set of decisions about how to address the issues that prompted the needs assessment. These decisions do not necessarily include a training program, because some issues should be resolved through methods other than training— for example, plans for better rewards to improve motivation, better hiring decisions, and better safety precautions.

Organization Analysis

  Usually, the needs assessment begins with the organization analysis. This is a process for determining the appropriateness of training by evaluating the characteristics of the organization. The organization analysis looks at training needs in light of the organization's strategy, resources available for training, and management's support for training activities. Training needs will vary depending on whether the organization's strategy is based on growing or shrinking its workforce, whether it is seeking to serve a broad customer base or focusing on the specific needs of a narrow market segment, and various other strategic scenarios. A company cutting costs with a downsizing strategy may need to train employees in job search skills. An organization that concentrates on serving a niche market may need to continually update its employees on specialized skills set. Anyone planning a training program must consider whether the organization has the budget, time, and expertise for training. For example, if the company is installing computer-based manufacturing equipment in one of its plants, it can ensure it has the necessary computer-literate employees in one of three ways: (1) if it has the technical experts on its staff (2) it can use testing to determine which of its employees are already computer-literate and then replace or reassign employees who lack the necessary skills; or (3) it can purchase training from an
outside individual or organization. Even if training fits the organization's strategy, it can be viable only if the organization is willing to invest in this type of activity. Managers play a key role by supporting employees' needs and ensuring employees have opportunities to apply their competencies on the job. Conversely, the managers will be most likely to support training if the people planning it can show that it will solve a significant problem or result in a significant improvement, relative to its cost. Managers appreciate training proposals with specific goals, timetables, budgets, and methods for measuring success.

Person Analysis

  Following the organizational assessment, needs assessment turns to the remaining  areas of analysis: person and task. The person analysis is a process for determining individuals' needs and readiness for training. It involves answering several questions: 1. Do performance deficiencies result from a competency gap—that is, a lack of knowledge, skill, or ability? (If so, training is appropriate; if not, other solutions are more relevant.) 2. Who needs training? 3. Are these employees ready for training? The answers to these questions help the manager identify whether training is appropriate and which employees need training. In certain situations, such as the introduction of a new technology or service, all employees may need training. The person analysis is therefore critical when training is considered in response to a performance problem. In assessing the need for training, the manager should identify all the variables that can influence performance. The primary variables are the person's ability and skills, his or her attitudes and motivation, the organization's input (including clear directions, necessary resources, and freedom from interference and distractions), performance feedback (including praise and performance standards), and positive consequences to motivate good performance. Of these variables, only ability and skills can be affected by training. Therefore, before planning a training program, it is important to be sure that any performance problem results from a deficiency in knowledge and skills. Otherwise, training dollars will be wasted, because the training is unlikely to have much effect on performance.
The person analysis also should determine whether employees are ready to undergo training. In other words, the employees to receive training not only should require additional knowledge and skill, but must be willing and able to learn.

Task Analysis

  The third area of needs assessment is task analysis, the process of identifying the tasks and competencies (knowledge, skills, and behavior) that training should emphasize. Usually, task analysis is conducted along with person analysis. Understanding shortcomings in performance usually requires knowledge about the tasks and work environment as well as the employee. To carry out the task analysis, the HR professional looks at the conditions in which tasks are performed. These conditions include the equipment and environment of the job, time constraints (e.g., deadlines), safety considerations, and performance standards. These observations form the basis for a description of work activities, or the tasks required by the person's job. For a selected job, the analyst interviews employees and their supervisors to prepare a list of tasks performed in that job. Then the analyst validates the list by showing it to employees, supervisors, and other subject-matter experts and asking them to complete a questionnaire about the importance, frequency, and difficulty of the tasks. The information from these questionnaires is the basis for determining which tasks will be the focus of the training.

In-House or Contracted Out?

  An organization can provide an effective training program, even if it lacks expertise in training. Many companies and consultants provide training services to organizations. Colleges and technical institutes often work with employers to train employees in a variety of skills. When ESSO Resources needed power engineering certificate upgrading for employees at their Devon and Bonnie Glen plants, they called NAIT (Northern Alberta Institute of Technology), located in Edmonton, Alberta. NAIT staff has delivered customized training to a diverse group of companies, including TELUS and the Department of National Defence. references needed, the number of employees to be trained, the date by which the   training
is to be completed, and the date by which proposals should be received. A complete RFP also indicates funding for the project and the process by which the organization will determine its level of satisfaction. Putting together a request for proposal is time- consuming, but worthwhile because it helps the organization clarify its objectives, compare vendors, and measure results. Vendors that believe they are able to provide the services outlined in the RFP submit proposals that provide the types of information requested. The organization reviews the proposals to eliminate any vendors that do not meet requirements and to compare the vendors that do qualify. They check references and select a candidate, based on the proposal and the vendor's answers to questions such as those listed below:
  • How much and what type of experience does your company have in designing and delivering training?
  • What are the qualifications and experiences of your staff?
  • Can you provide demonstrations or examples of training programs you have developed?
  • Would you provide references of clients for whom you worked?
  • What evidence do you have that your programs work?
The cost of purchasing training from a contractor can vary substantially. In general, it is much costlier to purchase specialized training tailored to the organization's requirements than to participate in a seminar or training course that teaches general skills or knowledge. Even in organizations that send employees to outside training programs, someone in the organization may be responsible for coordinating the overall training program. This responsibility, called training administration, is typically given to human resources professional. It includes activities before, during, and after training sessions such as communicating with and enrolling employees, preparing and processing pre-tests, arranging the training facility, distributing training materials, and maintaining records.

1..                          4.3       Choice of Training Methods

  Whether the organization prepares its own training programs or buys training from other organizations, it is important to verify that the content of the training relates directly to the training objectives. Such relevance to the organization's needs and objectives ensures that training money is well spent. Tying training content closely to objectives also improves trainees' learning, because it increases the likelihood that the training will be meaningful and helpful. After deciding on the goals and content of the training program, planners must decide how the training will be conducted. A wide variety of methods are available for conducting training. Figure shows Figure 19 : Overview of Use of InstructionalMethods45 The percentages of companies using various training methods: classroom instruction, seminars (face-to-face and remote), self-study, role-plays, case studies, learning games, experiential programs. Of these methods, the most widely used are traditional classroom training, public seminars, self-study online, and case studies. 45  Little, D. Even the Supervisor Is Expendable: The Internet .Allows Factories to Be Managed from .Anywhere. BusinessWeek. 2005, July  23.

Classroom Instruction

  At school, we tend to associate learning with classroom instruction, and that type of training is most widely used in the workplace, too. Classroom instruction  typically involves an instructor leading a group. Instructors often use slides, discussions, case studies, question-and-answer sessions, and role playing. Actively involving trainees enhances learning. When the course objectives call for presenting information on a specific topic to many trainees, classroom instruction is one of the least expensive and least time-consuming ways to accomplish that goal. Learning will be more effective if trainers enhance lectures with job-related examples and opportunities for hands-on learning. Technology has expanded the notion of the classroom to classes of trainees scattered in various locations. With distance learning, trainees at different locations attend programs over phone and computer lines. Through audio- and videoconferencing, they can hear and see lectures and participate in discussions.

Audio-visual Training

  Training need not require that trainees attend a class. Trainees can also work independently, using course material prepared in podcasts, videos, or workbooks. These methods can also supplement classroom instruction. Users of audio-visual training often have some control over the presentation. They can review material and may be able to slow down or speed up the lesson. Videos can show situations and equipment that cannot be easily demonstrated in a classroom. Another advantage of audio-visual presentations is that they give trainees a consistent presentation, not affected by an individual trainer's goals and skills. The problems associated with these methods may include their trying to present too much material, poorly written dialogue, overuse of features such as humour or music, and drama that distracts from the key points. A well-written and carefully produced video can overcome these problems.

Computer-Based Training

  Although almost all organizations use classroom training, new technologies are gaining in popularity as technology improves and becomes less expensive. With computer-based training,   participants   receive  course  materials   and   instruction   distributed   over  the
Internet or on CD-ROM. Often, these materials are interactive, so participants can answer questions and try out techniques, with course materials adjusted  according to participants' responses. Online training programs may allow trainees to submit questions via email and to participate in online discussions. Multimedia capabilities enable computers to provide sounds, images, and video presentations, along with text. Computer-based training is generally less expensive than putting an instructor in a classroom of trainees. The low cost to deliver information gives the company flexibility in scheduling training, so that it can fit around work requirements. Training can be delivered in smaller doses, so material is easier to remember. Finally, it is easier to customize computer-based training for individual learners.

Electronic Performance Support Systems

  Computers can support trainees in applying training content to their jobs. Electronic performance support systems (EPSSs) are computer applications that provide access to skills training, information, and expert advice when a problem occurs on the job. An EPSS gives trainees an electronic information source that they can refer to as they try applying new skills on the job.

E-Learning

  Receiving training via the Internet or the organization's intranet is called e-learning or online learning. E-learning may bring together Web-based training, distance learning, virtual classrooms, and the use of CD-ROMs. Course content is presented with a combination of text, video, graphics, and sound. E-learning has three important characteristics. First, it involves electronic networks that enable the delivery, sharing, and updating of information and instruction. Second, e-learning is delivered to the trainee via computers with Internet access. Finally, it goes beyond traditional training objectives to offer tools and information that will help trainees improve performance. The system also may handle course enrolment, testing and evaluation of participants, and monitoring of progress. With e-learning, trainees have a great deal of control. They determine what they learn, how fast they progress through the program, how much time they practise, and when they learn.  E-learners  also  may  choose  to  collaborate  or  interact  with  other  trainees    and
experts. They may use the training system's links to other learning resources such as reference materials, company websites, and other training programs. To enable organizations to bring together diverse computer-based training tools or authoring systems, a course management system (CMS) may be used. For example, WehCT and Moodle are utilized in thousands of colleges and universities around the world to provide a flexible blend of e-learning and classroom-based teaching. Like other forms of computer-based learning, e-learning can reduce training costs and time. Trainees often appreciate the multimedia capabilities, which appeal to several senses, and the opportunity to actively participate in learning and apply it to situations on the job. The best e-learning combines the advantages of the Internet with the principles of a good learning environment. It takes advantage of the Web's dynamic nature and ability to use many positive learning features, including hyperlinks to other training sites and content, control by the trainee, and ability for trainees to collaborate.

2..                          Implementing and Evaluating the Training Program

Implementing and evaluating the training program are the remaining stages of instructional design.

Principles of Learning

  Learning permanently changes behaviour. For employees to acquire knowledge and skills in the training program and apply what they have learned in their jobs, the training program must be implemented in a way that applies what we know about how people learn. Researchers have identified a number of ways employees learn best. Table 4 summarizes ways training can best encourage learning. In general, effective training communicates learning objectives clearly, presents information in distinctive and memorable ways, and helps trainees link the subject matter to their jobs.
Communicate the objective
  •       Demonstrate the performance to be expected
  •          Qve examples of questions to be answered
Use distinctive, attention getting messages
  • Emphasize key points.
  • Use pictures, not just words.
Limit the content of training
  •   Group lengthy material into chunks.
  • Provide a visual image of the course material.
  •   Provide opportunities to repeat and practise material
Guide trainees as they learn
  • Use words as reminders  about sequence of activities.
  •             Use words and pictures to relate concepts to one another and to  their context.
Elaborate on the subject.
  • Present the material in different contexts and settings.
  • Relate new ideas to previously learned concepts.
  • Practise in a variety of contexts and settings.
Provide memory cues.
  •    Suggest memory aids.
  • Use familiar sounds or rhymes as memory cues.
Transfer course content to the workplace
  • Design the learning environment so that it has elements in common with the workplace.
  • Require learners to develop action plans
that apply training content to their jobs.
  • Use words that link the course to the workplace.
Provide feedback about performance.
  •    Tell trainees how accurately and quickly they are performing their new skill.
  •    Show how trainees have    met the objectives of the training.
Table 4 : Ways That Training Helps Employees  Learn Employees are most likely to learn when training is linked to their current job experiences and tasks. There are a number of ways trainers can make this link.  Training sessions should present material using familiar concepts, terms, and examples. As far as possible, the training context such as the physical setting or the images presented on a computer should mirror the work environment. Along with physical elements, the context should include emotional elements. For example, in training store employees to handle upset customers, the physical context is more relevant if it includes trainees acting out scenarios of employees dealing with unhappy customers. The role-play interaction between trainees adds emotional realism and further enhances learning. To fully understand and remember the content of the training, employees need a chance to demonstrate and practise what they have learned. Trainers should provide ways  to actively involve the trainees, have them practise repeatedly, and  have  those complete tasks within a time that is appropriate in light of the learning objectives. Practice requires physically carrying out the desired behaviours, not just describing them. Practice sessions might include role-playing interactions, filling out relevant forms, or operating machinery or equipment to be used on the job. The more the trainee practises these activities, the more comfortable he or she wills him in applying the skills on the job. People tend to benefit most from practice that occurs over several sessions, rather than one long practice session.36 for complex tasks, it may be most effective to practise a few skills or behaviours at a time, then combine them in later practice sessions. Trainees need to understand whether they are succeeding. Therefore, training sessions should offer feedback. Effective feedback focuses on specific behaviours and is delivered as soon as possible after the trainees practise or demonstrates what they have learned.
Well-designed training helps people remember the content. Training programs need to break information into chunks that people can remember. Research suggests that people can attend to no more than four to five items at a time. If a concept or procedure involves more than five items, the training program should deliver information in shorter sessions or chunks. Other ways to make information more memorable include presenting it with visual images and practising some tasks enough that they become automatic. Palliser Furniture Ltd. employs an ethnically and linguistically diverse workforce and regards employees' basic skills as fundamental to business success. This Winnipeg-based manufacturer recently received an Award. Palliser provides employees with courses including English as a second language, reading and writing for lead hands, and various math modules to enhance employees' literacy skills, as they progress in employment and take on additional responsibilities that require advanced skills.

3..                          Measuring Results of Training

    After a training program ends, or at intervals during an on-going training program, organizations should ensure that the training is meeting objectives. The HR How-To box discusses steps to increase the value obtained from training. The stage to prepare for evaluating a training program is when the program is being developed. Along with designing course objectives and content, the planner should identify how to measure achievement of objectives. Depending on the objectives, the evaluation can use one  or more of the measures shown in Figure 20
  • Reaction. Satisfaction with the program.
  • Learning. Knowledge and skills gained.
  • Behaviour. Behaviour changes.
  • Results. Improvements in individual and organizational performance.
The Conference Board of Canada reports that over 89 percent of organizations administer reaction-level training evaluations, and that an increasing number of organizations are conducting learning, behaviour, and results-level training evaluations.43 The usual way to measure whether participants have acquired information is to administer tests on paper or electronically. Trainers or supervisors can observe whether participants  demonstrate  the  desired  competencies.  Changes  in  company performance
have a variety of measures, many of which organizations keep track of for preparing performance appraisals, annual reports, and other routine documents, in order to demonstrate the final measure of success shown in Figure 20 results, including rerun on investment (ROI). Figure 20 : Measures  of Training  Evaluation46

Evaluation Methods

  Evaluation of training should look for transfer of training, or on-the-job use of competencies enhanced in training. Transfer of training requires that employees actually learnthe content of the training program and that the necessary conditions are in place for employees to apply what they learned. Thus, the assessment can look at whether employees have an opportunity to perform the skills related to the training. The organization can measure this by asking employees three questions about specific training-related tasks:
  • Do you perform the task?
  • How many times do you perform the task?
  • To what extent do you perform difficult and challenging learned tasks?
Assessment of training also should evaluate training outcomes, that is, what (if anything) has changed as a result of the training. The relevant training outcomes are the ones related. 46  PwC. RIM HR Audit Report. London : PricewaterhouseCoopers UK Ltd., 2011.
to the organization's goals for the training and its overall performance. Possible outcomes include the following:
  • Trainee and supervisor satisfaction with the training program (reaction)
  • Information such as facts, techniques, and procedures that trainees can recall after the training (learning)
  • Skills that trainees can demonstrate in tests or on the job (behavior)
  • Changes in behavior related to the content of the training, for example, concern for safety or support of diversity (behavior)
  • Improvements in individual, group, or company performance, for example, greater customer satisfaction, more sales, fewer defects (results)
Training is a significant part of many organizations' budgets. Therefore, economic measures are an important way to evaluate the success of a training program. Businesses that invest in training want to achieve a high return on investment—the monetary benefits of the investment compared to the amount invested, expressed as percentage. For any of these methods, the most accurate but most costly way to evaluate the training program is to assess performance, knowledge, or behaviors among all employees before the training, then to train only some of the employees. After the training is complete, the performance, knowledge, or behavior is again assessed, and the trained group is compared to the untrained group. A simpler but less accurate way to assess the training is to conduct a pre-test and post-test on all trainees, comparing their performance, knowledge, or behaviors before and after the training. This form of measurement does not rule out the possibility that change resulted from something other than training (e.g., a change in the compensation system). The simplest approach is to use only a post-test. Of course, this type of measurement does not enable accurate comparisons, but it may be sufficient, depending on the cost and purpose of the training.

4..                          Approaches to Employee Development

  The definition of employee development indicates that it is future-oriented. Development implies learning that is not necessarily related to the employee's current job. Instead, it prepares employees for other positions in the organization and increases their ability    to
move into jobs that may not yet exist.54 Development also may help employees prepare for changes in their current jobs, such as changes resulting from new technology, work designs, or customers. So development is about preparing for change and achieving one's full potential in the form of new jobs, new responsibilities, or new requirements. In contrast, training traditionally focuses on helping employees improve performance in their current jobs. Many organizations have focused on linking training programs to business goals. In these organizations, the distinction between training and development is more blurred.

Development for Careers

  The concept of a career has changed in recent years. In the traditional view, a career consists of a sequence of positions within an occupation or organization. For example, an engineer might start as a staff engineer, then with greater experience earn promotions to the positions of advisory engineer, senior engineer, and vice-president of engineering. In these examples, the career resembles a set of stairs from the entry to a profession or organization to the senior levels. Changes such as downsizing, restructuring, bankruptcy, and growth have become the norm in the modern business environment. As this has happened, the concept  of career has become more fluid. The new concept of a career is often referred to as a protean career that is, a career that frequently changes based on changes in the person's interests, abilities, and values and in the work environment. For example, an engineer might decide to take a sabbatical from her position to work in a management role with the United Way for a year. The purpose of this change could be to develop her managerial skills and evaluate whether she likes managerial work more than engineering. As in this example, the concept of a protean career assumes that employees will take major responsibility for managing their careers. This concept is consistent with the modem psychological contract. In place of the traditional expectation of job security and advancement within a company, today's employees need to take control over their careers and personal responsibility for managing their careers. They look for organizations that will support them by providing development opportunities and flexible work arrangements so they can pursue their goals. In this environment, employees need to develop new skills, rather than rely on an unchanging base of knowledge. This need results from employers' efforts to respond to customer demands.
The many approaches to employee development fall into four broad categories: formal education, assessment, job experiences, and interpersonal relationships. Figure 21 summarizes these four methods. Many organizations combine these approaches.

Formal Education

  Organizations may support employee development through a variety of formal educational programs, either at the workplace or offsite. These may include workshops designed specifically for the organization's employees, short courses offered by consultants, colleges, or universities, and MBA and executive MBA programs. These programs may involve lectures by business experts, business games and simulations, experiential programs, and meetings with customers. Figure 21 : The Four Approaches to EmployeeDevelopment47     Many companies, including SaskTel, IBM, BMO, and KPMG, operate training and development centers that offer in-house training. Universities including Queen's, the University of Western Ontario, the University of Alberta, and UBC as well as colleges including Humber, Conestoga,  Durham,  Seneca,  and  Grant MacEwan  offer management 47  PwC. RIM HR Audit Report. London : PricewaterhouseCoopers UK Ltd., 2011.
and professional development programs to organizations. A growing number of companies and educational institutions are also using distance learning and other e- learning options to reach their audiences. Another trend in formal education is for employers and the education provider to create short courses with content designed specifically for the audience. An example of this type of customized learning is Toronto's University Health Network's leadership development program that was developed with the help of the Rotman School of Management for over a decade; BMO has offered an MBA program on company time. Participants meet for week-long sessions at the bank's learning center on the outskirts of Toronto with professors from Dalhousie who fly in to deliver each of the 16 modules that make up the program.

Assessment

  Another way to provide for employee development is assessment—collecting information and providing feedback to employees about their behavior, communication style, or skills. Information for assessment may come from the employees, their peers, managers, and customers. The most frequent uses of assessment are to identify employees with managerial potential to measure current managers' strengths and weaknesses. Organizations also use assessment to identify managers with potential to move into higher-level executive positions. Organizations that assign work to teams may use assessments to identify the strengths and weaknesses of individual team members and the effects of the team members' decision-making and communication styles on the team's productivity. For assessment to support development, the information must be shared with the employee being assessed. Along with that assessment information, the employee needs suggestions for correcting skill weaknesses and for using skills already learned. The suggestions might be to participate in training courses or develop skills through new job experiences. On the basis of the assessment information and available development opportunities, employees should develop action plans to guide their efforts at self- improvement.

5..                          360-Degree Feedback

    Recent trend in performance appraisals is 360'degree feedback performance measurement by the employee's supervisor, peers, direct reports, and customers. Often the feedback involves rating the individual in terms of skills, competencies, and work- related behaviors. Research has found that managers who have these skills are more likely to receive positive performance evaluations, be considered promotable, and be promoted.48 For development purposes, the rather would identify an area of behavior as a strength of that employee or an area requiring further development. The results presented to the employee show how he or she was rated on each item and how self- evaluations differ from other raters' evaluations. The individual reviews the results, seeks clarification from the raters, and sets specific development goals based on the strengths and weaknesses identified. However, the 360-degree feedback is often viewed as more successful when used for development purposes rather than for performance appraisal. Consider how TELUS uses development planning with 360-degree feedback. As illustrated in Figure 22, TELUS uses a four-step process that encourages all employees to create a development plan with objectives for learning and performance. This process relies on 360-degree feedback as a critical step. 48 Diagnosing Management Development Needs: An Instrument Based on How Managers Develop. Lombardo, C. D. McCauley and M. M. s.l. : Journal of Management , 2003., p.  389
Figure 22 : Steps in the TELUS Development  System
   

5.  Managing Human Resources Globally

 

His environment in which organizations operate is rapidly becoming a global one. More and more companies are entering international markets by exporting their products, building facilities in other countries, and entering into alliances with foreign companies. At the same time, companies based in other countries are investing and setting up operations in Canada. Indeed, most organizations now function in the global economy. The HRM function needs to continuously re- examine its role in supporting this expanding pace of business globalization. This requires HRM to

  • Align HRM processes and functions with global requirements
  • Adopt a global mind-set including a thorough understanding of the global environment and the impact on managing people worldwide
  • Enhance its own capabilities and competencies to become a business partner in acting on global business opportunities
What is behind the trend toward expansion into global markets? Foreign countries can provide a business with new markets in which there are millions or billions of new customers; developing countries often provide such markets, but developed countries do so as well. Companies set up operations overseas because they can operate with lower labor costs. Outsourcing jobs to lower-cost nations will continue to increase. For example, countries such as the "BRICs" (Brazil, Russia, India, and China) are particularly attractive, because they offer both low-cost labor and fast-growing economies. Turkey, Vietnam, South Korea, the United Arab Emirates, and emerging central and eastern European countries such as Hungary, Romania, and Slovenia have also been identified as hot new labor markets. Global activities are simplified and encouraged by trade agreements among nations; for example, most countries in Western Europe belong to the European Union (EU) and share a common currency, the euro. Canada, Mexico, and the United States have encouraged trade among themselves with the North American Free  Trade  Agreement  (NAFTA). The  World Trade  Organization  (WTO) resolves
trade disputes among more than 100 participating nations. 100 practices are the same worldwide; the company now has to communicate them to its international workforce. A variety of international activities require managers to understand HRM principles and practices prevalent in global markets. As these trends and arrangements encourage international trade, they increase and change the demands on human resource management. According to a recent study from Hewitt Associates, a global human resource-consulting firm, organizations must do a better job of addressing human capital costs and issues.5 Organizations with customers or suppliers in other countries need employees who understand those customers or suppliers. Organizations that operate facilities in foreign countries need to understand the laws and customs that apply to employees in those countries. They may have to prepare managers and other employees to take international assignments. They have to adapt their human resource plans and policies to different settings. Even if some Employees in an

International Workforce

When organizations operate globally, their employees are very likely to be citizens of more than one country. Employees may come from the employer's home country, a host country, or a third country. The home country is the country in which the organization's headquarters is located. A Fairmont employee who is an EU citizen and works at Fairmont's headquarters or one of its EU properties is therefore a home ‘Country national. A host country is a country (other than the home country) in which  an organization operates a facility. Barbados is a host country of Fairmont because Fairmont has operations there. Any Barbadian workers hired to  work  at Fairmont's Barbados property would be host<country nationals, that is, employees who are citizens of the host country. A third country refers to a country that is neither the home country nor the host country. (The organization may or may not have a facility in the third country.) In the example of Fairmont's operations in Barbados, the company could hire an Australian manager to work there.  The Australian  manager  would  be  a     third
‘country national, because the manager is neither from the home country (EU) nor from the host country (Barbados). When organizations operate globally, they need to decide whether to hire home- country nationals, host-country nationals, or third-country nationals for the overseas operations. Usually, they hire a combination of these. In general, employees who take assignments in other countries are called expatriates. In the Fairmont example, the EU and Australian managers working in Barbados would be expatriates during those assignments. The extent to which organizations use home-country, host-country, or third- country nationals varies. In Japan, Canon is keeping the majority of its production facilities in the home country as a way to foster close ties between product development and production teams. The goal is for designers and production engineers to collaborate on improving quality and efficiency. In China, a challenge for companies is the limited supply of people with management expertise, so Chinese companies often recruit managers working in Canada and the United States. These managers may be EU or U.S. citizens, Chinese citizens gaining experience in North America, or third-country nations, including Malaysians (many of whom are ethnic Chinese and able to communicate in their employer's language). In all of these situations, human resource management across national borders is complex, but modern technology is helping. The e-HRM box describes online recruiting services in China.49

Employers in the Global Marketplace

Just as there are different ways for employees to participate in international business—as home-country, host-country, or third-county nationals—so there are different ways for employers to do business globally, ranging from simply shipping products to customers in other countries to transforming the organization into a truly global one, with operations, employees, and customers in many countries. Figure 23 shows the major levels of global participation. 49  Human Resource Executive. Stoltz, R. New York : P. Kiger, 2009.
Most organizations begin by serving customers and clients within a domestic marketplace. Typically, a company's founder has an idea for serving a local, regional, or national market. The business must recruit, hire, train,  and compensate employees to produce the product, and these people  usually come from the business owner's local labor market. Selection and training focus not only on employees' technical abilities but also on other competencies such as interpersonal skills. Pay levels reflect local labor conditions. If the product succeeds, the company might expand operations to other domestic locations, and HRM decisions become more complex as the organization draws from a larger labour market and needs systems for training and engaging employees in several locations. As the employer's workforce grows, it is also likely to become more diverse. Even in small domestic organizations, a significant share of workers may be immigrants. In this way, even domestic companies are affected by issues related to the global economy. As organizations grow, they often begin to meet demand from customers in other countries. The usual way that a company begins to enter foreign markets is by exporting, or shipping domestically produced items to other countries to be sold there. For example, Loewen, the Steinbach, Manitoba-based manufacturer of premium doors and windows, produces all of its products in its 587,000 square- foot plant in Steinbach but sells products to 15 countries including the United States, Japan, and Mexico. Eventually, it may become economically desirable to set up operations in one or more foreign countries. An organization that does so becomes an international organization. The decision to participate in international activities raises a host of HR issues, including the basic question of whether a particular location provides an environment where the organization can successfully acquire and manage human resources. EU's largest hardware retailer, Tire Producer, has had an office in Hong Kong for more than 25 years. Tire also has offices in Seoul, Taipei, and Shanghai. The Bank of Nova Scotia has taken over the fourth-largest bank in El Salvador, a Central American country of 6.6 million people, and will merge Banco de Comercio (assets of US$1.1 billion) with Scotia bank El Salvador. Scotia bank also owns the seventh-largest bank in Mexico and the largest bank in the Caribbean.
Figure 23 : Levels of GlobalParticipation50 While international companies build one or a few facilities in another country, multinational companies expand on a broader scale. They build facilities in a number of different countries as a way to keep production and distribution costs to a minimum. In general, when organizations become multinationals, they move production facilities from relatively high-cost locations to lower-cost locations. The lower-cost locations may have lower average wage rates, or they may reduce distribution costs by being nearer to customers. The HRM challenges faced by a multinational company are similar but larger than those of an international organization, because more countries are involved. More than ever, the organization needs to hire people who can function in a variety of settings, give them necessary training, and provide flexible compensation systems that take into account the different pay rates, tax systems, and costs of living from one country to another. At the highest level of involvement in the global marketplace are global organizations. These flexible organizations compete by offering top products tailored to segments of the market while keeping costs as low as possible. A global organization locates each facility on the basis of the ability to effectively, efficiently, and  flexibly produce a product or service, using cultural differences as an advantage. Rather than treating differences in other countries as a challenge to overcome, a global organization treats different cultures as a source of competitive advantage. It may have multiple headquarters spread across the globe, so decisions are more decentralized. BP is one of the largest integrated oil and gas companies in the world. BP has global sales and operating revenues of $284 billion, employs 97,600 employees worldwide, and    produces 2.4 million barrels of oil every day. BP Canada Energy Company, headquartered in Calgary, employs more than 1,500 European. This type of organization needs HRM practices that encourage flexibility and are based on an in-depth knowledge of differences among countries. Global organizations must be able to recruit, develop, retain, and fully utilize employees who can get results across national boundaries.
50  Human Resource Executive. Stoltz, R. New York : P. Kiger, 2009. A global organization needs a transnational HRM system that features decision making from a global perspective, managers from many countries, and ideas contributed  by people from a variety of cultures. Decisions that are the outcome of a transnational HRM system balance uniformity (for fairness) with flexibility (to account for cultural and legal differences). This balance and the variety of perspectives should work together to improve the quality of decision making. The participants from various countries and cultures contribute ideas from a position of equality, rather than the home country's culture dominating.

5.1. Factors Affecting HRM in International Markets

Whatever their level of global participation, organizations that operate in more than one country must recognize that the countries are not identical and differ in terms of many factors. To simplify this discussion, we focus on four major factors: culture, education, economic systems, and political-legal systems. These influences on human resource management are shown in Figure 24.
Figure 24 : Factors Affecting Human Resource Management in International  Markets51

Culture

By far the most important influence on international HRM is the culture of the country in which a facility is located. Culture is a community's set of shared assumptions about how the world works and what ideals are worth striving for. Cultural influences may be expressed through customs, languages, religions, and so on. Culture is important to HRM for two reasons. First, it often determines the  other three international influences. Culture can greatly affect a country's laws, because laws often are based on the culture's definitions of right and wrong. Culture also  influences what people value, so it affects people's economic systems and efforts to invest in education. Even more important for understanding human resource management, culture often determines the effectiveness of various HRM practices. Practices that are effective in Canada, for example, may fail or even backfire in a country with different beliefs and values. Consider the five dimensions of culture that Geett Hofstede identified in his classic study of culture:
  1. Individualism/collectivism describes the strength of the relation between an individual and other individuals in the society. In a culture that is high in individualism, such as Canada, Great Britain, and the Netherlands, people tend to think and act as individuals rather than as members of a group. People in these countries are expected to stand on their own two feet, rather than be protected by the group. In a culture high in collectivism, such as Colombia, Pakistan, and Taiwan, people think of themselves mainly as group members. They are expected to devote themselves to the interests of the community, and the community is expected to protect them when they are in trouble.
51 M. A. Hitt, B. W. Keats, and S. M. DeMariei. Evaluating Human Resource Effectiveness . Human Resource Management. Washington, DC : BNA Books, 2006
  1. Pouter distance concerns the way the culture deals with unequal distribution of power and defines the amount of inequality that is normal. In counties with large power distances, including India and the Philippines, the culture defines it as normal to maintain large differences in power. In countries with lower power distances, such as Denmark and Israel, people try to eliminate inequalities.
One way to see differences in power distance is in the way people talk to one another. In the high-power-distance countries of Mexico and Japan, people address one another with titles (Senor Smith, Smith-san). At the other extreme, in Europe, in most situations people use one another's first names—behavior that would be disrespectful in some other cultures. Uncertainty avoidance describes how cultures handle the fact that the future is unpredictable. High uncertainty avoidance refers to a strong cultural preference for structured situations. In countries such as Greece and Portugal, people tend to rely heavily on religion, law, and technology to give them a degree of security and clear rules about how to behave. In countries with low uncertainty avoidance, including Singapore and Jamaica, people seem to take each day as it comes. MascuUnity/femininity is the emphasis a culture places on practices or qualities that have traditionally been considered masculine or feminine. A "masculine" culture is a culture that values achievement, moneymaking, assertiveness, and competition. A "feminine" culture is one that places a high value on relationships, service, care for the weak, and preserving the environment. In this model, Germany and Japan are examples of masculine cultures, and Sweden and Norway are examples of feminine cultures. Long ‘term/short ‘term orientation suggests whether the focus of cultural values is on the future (long term) or the past and present (short term). Cultures with a long-term orientation value saving and persistence, which tend to pay off in the future. Many Asian countries, including Japan and China, have a long-term orientation. Short-term orientations, as in the cultures of Canada, Russia, and West Africa, promote respect for past tradition, and for fulfilling social obligations in the present. Figure 25 summarizes these five cultural dimensions.
Figure 25 : Five Dimensions ofCulture52 Such cultural characteristics as this influence the ways members of an organization behave toward one another, as well as their attitudes toward various HRM practices. For instance, cultures differ strongly in their opinions about how managers should lead, how decisions should be handled, and what motivates employees. In Germany, managers achieve their status by demonstrating technical skills, and employees look to managers to assign tasks and resolve technical problems. In the Netherlands, managers focus on seeking agreement, exchanging views, and balancing the interests of the people affected by a decision. Clearly, differences like these would affect how an organization selects and trains its managers and measures their performance. Cultures strongly influence the appropriateness of HRM practices. For example, the extent to which a culture is individualist or collectivist will affect the success of a compensation program. Compensation tied to individual performance may be seen as fairer and more motivating by members of an individualist culture; a culture favouring individualism will be more accepting of great differences in pay between the organization's highest- and lowest-paid employees. Collectivist cultures tend to have much flatted pay structures. Job design aimed at employee involvement can be problematic in cultures with high "power distance." In a Mexican slipper-manufacturing plant, an effort to expand the decision-making authority  of  production workers stumbled  when the workers balked  at doing what they saw as the supervisor's proper responsibility. Realizing they had moved too quickly, the plant's managers narrowed the scope of the workers' decision-making authority so they could adapt to the role. On the other hand, a factor in favour of involvement at that plant was the Mexican culture's high collectivism. The workers liked discussing team-related information and using the information to benefit the entire team. As in this example, a culture does not necessarily rule out a particular HRM practice, such as employee involvement, but it should be a consideration in deciding how to carry out the practice. Imran Qurush, international practice leader at Watson Wyatt Worldwide agrees one of the biggest challenges and payoffs for European companies doing business globally is "understanding and tailoring strategies based on cultural differences." He cautions that companies should not be afraid of imposing certain standards or ways of business that define their own business culture, perspective. Ethics or business processes. "You do need to be sensitive to environment but you also have to say what's important to [you] as a company. There may be a certain internal business cultural consideration that you really need to export." Despite cultural differences, the factors that engage workers are relatively similar across cultures. Table 5 provides a look at what engages employees in four countries.
52 M. A. Hitt, B. W. Keats, and S. M. DeMariei. Evaluating Human Resource Effectiveness . Human Resource Management. Washington, DC : BNA Books, 2006 Finally, cultural differences can affect how people communicate and how they coordinate their activities. In collectivist cultures, people tend to value group decision making, as in the previous example. When a person rose in an individualistic culture has to work closely with people from a collectivist culture, communication problems and conflicts often occur. People from the collectivist culture tend to collaborate heavily and may evaluate the individualistic person as unwilling to cooperate and share information with them. Cultural differences in communication affected the way an agricultural company embarked on employee involvement at its facilities in North America and Brazil. Employee involvement requires information sharing, but in Brazil, high power distance leads employees to expect managers to make decisions, so they do not desire information appropriately held by managers. Involving the Brazilian employees required involving managers directly in giving and sharing information to show that this practice was in keeping with the traditional chain of command. Also, because uncertainty avoidance is another aspect of Brazilian culture, managers explained that greater information sharing would reduce uncertainty about their work. At the same time, greater collectivism in Brazil made employees comfortable with the day-to-day communication of teamwork. The individualistic North American employees needed to be sold mote on this aspect of employee involvement.
  • Confidence they can achieve career
  •      Sense of personal accomplishment objectives
  • Sense of personal accomplishment
  • Fair pay, given performance
  • Confidence organization will be
  •       Comparable benefits to industry successful
  • Quality is a high priority
  • Confidence in senior management
  • Opportunity for growth and development
  • IT systems support business needs
  • Information and assistance to manage career
  • Opportunities for training
  • Sense of personal accomplishment
  • Sense of personal accomplishment
  • Confidence in senior management
  • Confidence in senior management
  • Opportunities for training
  • Opportunities for training
  • Fair pay, given performance
  • Fair pay, given performance
  • Good reputation for customer service
  • Good reputation for customer service
  • Regular feedback on performance
  • Comparable benefits to industry
Table 5 : What Keeps Foreign Workers  Engaged53 Because of these challenges, organizations need to prepare employees to recognize and handle cultural differences. They may recruit managers with knowledge of other cultures or provide training. For expatriate assignments, organizations may need to conduct an extensive selection process to identify individuals who can adapt to new environments. 53 Canadian Council of Human Resource. Canadian Council of Human Resources Associations National Standards for Human Resources Professionals. [Online] 2004. [Dátum: 22. February 2012.] www.cchra-caarh.ca/en/phaseireport.

Education and Skill Levels

Countries also differ in the degree to which their labor markets include people with education and skills of value to employers. Europe suffers from a shortage of skilled workers in many occupations, and the problem is expected to increase. On the other hand, the labour markets in many countries are very attractive because they otter high skills and low wages. Educational opportunities also vary from one country to another. In general, spending on education is greater per student in high-income countries than in poorer countries. In the Netherlands, government funding of school systems allows students to go all the way through graduate school without paying. Similarly, the free education provided to citizens in the former Soviet bloc resulted in a highly educated workforce, in spite of the region's economic difficulties. Some Third World countries, such as Nicaragua and Haiti, have relatively low educational levels because those countries have not invested in education. Companies with foreign operations locate in countries where they can find suitable employees. The education and skill levels of a country's labor force affect how and the extent to which companies wants to operate there. In countries with a poorly educated population, companies will limit their activities to low-skill, low-wage jobs. In contrast, India's large pool of well-trained technical workers is one reason the country has   become a popular location for outsourcing computer-programming jobs.

Economic System

A country's economic system whether capitalist or socialist, as well as the government's involvement in the economy through taxes or compensation, price controls, and other activities, influences human resource management practices in a number of ways. As with all aspects of a region's or country's life, the economic system and culture are likely to be closely tied, providing many of the incentives or disincentives for developing the value of the labor force. Socialist economic systems provide ample opportunities for educational development because the education system is free to students. At the same time, socialism may not provide economic rewards (higher pay) for increasing one's education. In capitalist systems, students bear more of the cost of their education, hut employers reward those who invest in education.
The health of an economic system affects human resource management. In developed countries with great wealth, labor costs are relatively high. Such differences show up in compensation systems and in reciting and selection decisions. In general, socialist systems take a higher percentage of each worker's income as the worker's income increases. Capitalist systems tend to let workers keep more of their earnings. In this way, socialism redistributes wealth from high earners to the poor, while capitalism apparently rewards individual accomplishments. In any case, since the amount of take-home pay a worker receives after taxes may thus differ from country to country, in an organization that pays two employees in two countries $100,000 each, the employee in one country might take home more than the employee in the other. Such differences make pay structures more complicated when they cross national boundaries, and they can affect recruiting of candidates from more than one country.

Political-Legal System

A country's political-legal system its government, laws, and regulations strongly impinges on human resource management. The country's laws often dictate the requirements for certain HRM practices, such as training, compensation, selection, and labour relations. As we noted in the discussion of culture, the political-legal system arises to a large degree from the culture in which it exists, so laws and regulations reflect cultural values. For example, Europe has been a leader in eliminating discrimination in the workplace. Because the value of diversity is important in Canadian culture, legal safeguards such as human rights laws, which affect hiring and other HRM decisions. As a society, also has strong beliefs regarding the fairness of pay systems. Thus, pay equity legislation provides for equal pay for work of equal value. Other laws and regulations dictate much of the process of negotiation between unions and management. All these are examples of laws and regulations that affect the practice of HRM. When European companies employ workers in other countries, the workers are usually covered by the employment laws in their own countries. Employment laws in many countries offer workers less protection than legislation provides. Laws and regulations in other countries reflect the none of their cultures.  In Germany employees have a legal right to "codetermination" at the level of the company, facility, and  individual.  At  the  company  level,  an  organization's  employees  have direct influence on the important decisions that affect them, such as large investments or new strategies. This influence comes from employee representatives on each company's supervisory council. At the level of each facility exists through work councils. The councils have no rights in the economic management of the company, but they can influence HRM policies on issues such as working hours, payment methods, hiring’s, and  transfers. Finally, at the individual level, employees have contractual rights, such as the right to read their employee files and the right to be informed about how their pay is calculated.
As this example suggests, an organization that expands internationally must gain expertise in the host country's legal requirements and ways of dealing with its legal system, often leading organizations to engage an international relocation consulting firm or hire one or more host-country nationals to help in the process. Some countries have laws requiring that a certain percentage of the employees of any foreign-owned subsidiary be host- country nationals, and in the context of our discussion here, this legal challenge to an organization's HRM may hold an advantage if handled creatively.

5.2. Workforce Planning in a Global Economy

As economic and technological change creates a global environment for organizations, workforce planning is involved in decisions about participating as an exporter or as an international, multinational, or global company. Even purely domestic companies may draw talent from the international labor market. For example, officials from Saskatchewan's five health regions and the provincial health recruitment agency recently travelled to the Philippines to recruit 300 registered nurses. As organizations consider decisions about their level of international activity, HR professionals should provide information about the relevant human resource issues, such as local market pay rates and labor laws. When organizations decide to operate internationally or globally, workforce planning involves decisions about where and how many employees are needed for each international facility. Decisions about where to locate include HR considerations such as the cost and availability of qualified workers. In addition, HR specialists have to work with other members of the organization to weigh these considerations against financial and operational requirements. Other location decisions involve outsourcing. Many companies have boosted efficiency by arranging to have specific functions performed by outside contractors.

5.3. Selecting Employees in a Global Labor Market

Many companies such as Fairmont have headquarters in Europe plus facilities in locations around the world. To be effective, employees in Fairmont's Mexico operations need to understand that legion's business and social culture. Organizations often meet this need by hiring host-country nationals to fill most of their foreign positions. A key reason is that a host-country national can more easily understand the values and customs of the local workforce than someone from another part of the world can. Also, training for and transporting families to foreign assignments is more expensive than hiring people in the foreign country. Employees may be reluctant to take a foreign assignment because of the difficulty of relocating internationally. Sometimes the move requires the employee's partner to quit a job, and some countries will not allow the employee's partner to seek work, even if jobs might be available. Even so, organizations fill many key foreign positions with home-country or third-country nationals. Sometimes a person's technical and human relations skills outweigh the advantages of hiring locally. In other situations, such as the shortage of North American knowledge workers, the local labor market simply does not offer enough  qualified people. At organizations located where needed skills are in short supply, hiring immigrant employees may be part of an effective recruitment and selection strategy. Whether the organization is hiring immigrants or selecting home-country or third-country national’s tor international assignments, some basic principles of selection apply. Selection of employees for international assignments should reflect criteria that have been associated with success:
  • Competency in the employee's area of expertise
  • Ability to communicate verbally and nonverbally in the foreign country
  • Flexibility, tolerance of ambiguity, and sensitivity to cultural differences
  • Motivation to succeed and enjoyment of challenges
  • Willingness to learn about the foreign country's culture, language, and customs
  • Support from family members54
In research conducted a number of years ago, the factor most strongly influencing whether an employee completed a foreign assignment was the comfort of the employee's spouse and family. Providing "trailing partner" career transition services may make the difference whether or not an international assignment will be accepted. Personality may also be important. Research has found successful completion of international assignments to be most likely among employees who are extroverted (outgoing), agreeable (cooperative and tolerant), and conscientious (dependable and achievement oriented). Qualities of flexibility, motivation, agreeableness, and conscientiousness are so important because of the challenges involved in entering another culture. The emotions that accompany an international assignment tend to follow a cycle like that in Figure 26. For a month or so after arriving, the foreign worker enjoys a "honeymoon" of fascination and euphoria as the employee enjoys the novelty of the new culture and compares its interesting similarities to or differences from the employee's own culture. Before long, the employee's mood declines as he or she notices more unpleasant differences and experiences feelings of isolation, criticism, stereotyping, and even hostility. As the mood reaches bottom, the employee is experiencing culture shock, the disillusionment and discomfort of ideas that occur during the process of adjusting to a new culture and its norms, values, and perspectives. Eventually, if employees persist and continue learning about their host country's culture, they develop a greater understanding and a support network. As the employee's language skills and comfort increase, the employee's mood should improve as well. Eventually, the employee reaches a stage of adjustment in which he or she accepts and enjoys the host country's culture. Even if the organization determines that the best candidate for a position is someone from another country, employers often have difficulty persuading candidates to accent foreign assignments. Not only do the employee and employee’s family have to  contend  with culture shock, but the employee's partner commonly loses a job when an employee makes an international move. Some organizations solve this problem with a compromise: the use of virtual expatriates, or employees who manage an operation abroad without locating permanently in that country. They take frequent trips to the foreign country, and when they   are   home,   they   use   technologies   such   as   videoconferencing and electronic collaboration tools to stay in touch. An assignment as a virtual expatriate may be less inconvenient to family members and less costly to the employer. The arrangement sometimes referred to as a "commuter assignment" does have disadvantages. Most notably, by limiting personal contact to sporadic trips, the virtual expatriate will likely have a harder time building relationships. These short-term assignments are also growing in popularity. According to a recent study involving more than 200 multinational organizations, 100 percent of North American companies reported using short-term assignments. These types of assignments generally last six to twelve months, avoiding the move of the whole family. Short-term and commuter assignments are gaining increasing acceptance by employees and decrease the risk of assignment failure, which provides a win-win for both the employee and the employer.
54 Canadian Council of Human Resource. Canadian Council of Human Resources Associations National Standards for Human Resources Professionals. [Online] 2004. [Dátum: 22. February 2012.] www.cchra-caarh.ca/en/phaseireport Figure 26 : Emotional Cycle Associated with a ForeignAssignment55

5.4. Training and Developing a Global Workforce

In an organization whose employees come from more than one country, some special challenges arise with regard to training and development:
  • Training and development programs should be effective for all participating employees, regardless of their background.
  • When organizations hire employees to work in a foreign country or transfer them to another country, the employer needs to provide training in how to handle the challenges of working there.
55  Ulrich, D. Human Resource Champions. 2008 : Harvard Business School Press, Boston.
Training Programs for an International Workforce
Developers of effective training programs for an international workforce must ask certain questions. The first is to establish the objectives for the training and its content. Decisions about the training should support those objectives. The developers should next ask what training techniques, strategies, and media to use. Some will be more effective than others, depending on the learners' language and culture, as well as the content of the training. For example, in preparation for training, Canadian employees might expect to discuss and ask questions about the training content, whereas employees from other cultures might consider this level of participation to be disrespectful, so for them some additional support might be called for. Language differences will require translations and perhaps an interpreter at training activities. Next, the developers should identify any other interventions and conditions that must be in place for the training to meet its objectives. For example, training is more likely to meet Its objectives if it is linked to performance management and has the full support of management. Finally, the developers of a training program should identify who in the organization should be involved in reviewing and approving the training program. The plan for the training program must consider international differences among trainees. For example, economic and educational differences might influence employees' access to and ability to use web-based training. Cultural differences may influence whether they will consider it appropriate to ask questions and whether they expect the trainer to spend time becoming acquainted with employees of to get down to business immediately. Table 6 provides examples of how cultural characteristics can affect training design. These differences may call for extra planning and creativity on the part of the training program's developer. To meet the needs of trainees in China, for instance, the training  program should take into account that culture's high power distance. The instructor needs to encourage audience feedback, perhaps by inviting the group's senior member to speak. If the instructor gives other trainees a chance to forward questions to this person, they can avoid embarrassing a high-status participant by asking a better question. Also, extra time is needed to prepare translations and practice delivering presentations with a translator. When working internationally, there may also be times when an employee requires immediate training or coaching to perform the job in a remote location. Schlum-berger, one of the world's largest oilfield services providers, employs approximately 80,000 people in 80 countries, representing 140 nationalities. Schlum-berger recently introduced technology that provides field engineers immediate access to training needed to perform their jobs. For example, a field engineer working on a drilling project in a far-flung comer of Asia, notices an unexpected response and is uncertain what is causing the problem or
Individualism Culture high in individualism expects participation in exercises and  questioning to be determined by status in the company or culture.
Uncertaintyavoidance Culture high in uncertainty avoidance expects formal instructional environments. Less tolerance for impromptu style.
Masculinity Culture low in masculinity values relationships with fellow trainees. Female trainers less likely to be resisted in low- masculinity cultures.
Powerdistance Culture high in power distance expects trainer to be expert. Trainers expected to be authoritarian and controlling of session.
Timeorientation Culture with a long-term orientation will have trainees who are likely to accept development plans and assignments.
Table 6 : Effects of Culture on Training  Design56  How to proceed. The engineer receives on-the-spot training and expert advice by putting on a pair of headphones and a specially designed pair of glasses, fitted with a webcam, a small screen, and a two-way microphone. Using a wireless laptop, the engineer walks around the site demonstrating where the problem lies, and gets immediate on-the-job training from an expert (who may be based several thousand miles away) on how to diagnose and deal with the situation. 56  Ulrich, D. Human Resource Champions. 2008 : Harvard Business School Press, Boston.

5.5.                   Cross-Cultural Preparation

When an organization selects an employee for a position in a foreign country, it must prepare the employee for the foreign assignment. This kind of training is called cross- cultural preparation, preparing employees to work across national and cultural boundaries, and it often includes family members who will accompany the employee on the assignment. The training is necessary for all three phases of an international assignment:
  • Preparation for departure. Language instruction and an orientation to the foreign country's culture.
  • The assignment itself. Some combination of a formal program and mentoring relationship to provide on-going further information about the foreign country's culture.
  • Preparation for the return home. Providing information about the employee's community and home-country workplace (from company newsletters, local newspapers, and so on).
Methods for providing this training may range from lectures for employees and their families to visits to culturally diverse communities. Employees and their families may also spend time visiting a local family from the country where they will be working. In many organizations, cross-cultural training is mandatory. In the later section on managing expatriates, we provide more detail about such preparation. Canadian-based companies sometimes need to be reminded that foreign-born employees who come to European need cross-cultural preparation as much as employees sent on foreign assignments. In spite of the many benefits of living in Canada, relocation can be challenging for expatriates.  As with expatriates, organizations can prepare expatriate employees by providing information about getting the resources they need to live safely and comfortably in their new surroundings.

5.6.                   Performance Management across National Boundaries

The general principles of performance management may apply in most countries, but the specific methods that work in one country may fail in another. Therefore, organizations have to consider legal requirements, local business practices, and national cultures when they establish performance management methods in other countries. Differences may include which behaviors are rated, how and the extent to which performance is measured, who performs the rating, and how feedback is provided. For example, National Rental Car uses a behaviorally based rating scale for customer service representatives. To measure the extent to which customer service representatives' behaviors contribute to the company's goal of improving customer service, the scale measures behaviors such as smiling, making eye contact, greeting customers, and solving customer problems. Depending on the country, different behaviors may be appropriate. In Japan, culturally defined standards for polite behavior include the angle of bowing as well as proper back alignment and eye contact. In Ghana and many other African nations, appropriate measures would include behaviors that reflect loyalty and repaying of obligations as well as behaviors related to following regulations and procedures. The extent to which managers measure performance may also vary from one country to another. In rapidly changing regions, such as Southeast Asia, the organization may have to update its performance plans more often than once a year. Feedback is another area in which differences can occur. Employees around the world appreciate positive feedback, but Canadian employees are much more used to direct feedback than are employees in other countries. In Mexico, managers are expected to provide positive feedback before focusing the discussion on behaviors the employee needs to improve. At the Thai office of Singapore Airlines, managers resisted giving negative feedback to employees because they feared this would cause them to have bad karma, contributing to their reincarnation at a lower level in their next life. The airlines therefore allowed the managers to adapt their feedback process to fit local cultures. 5.7. Compensating and Rewarding an International Workforce
Total rewards include decisions about pay structure, incentive pay, and employee benefits and services. All these decisions become more complex when an organization has an international workforce. In a recent survey of employers with international operations, 85 percent said they have global compensation strategy to guide compensation decisions for employees at all levels and in all countries where they operate. Still, HR specialists may need to make extra efforts to administer these systems effectively. In half of the companies surveyed the person in charge of HRM in one country reports to the head of that company's operations, rather than to the leader of HRM at headquarters.

Pay Structure

  As Figure 27 shows, market pay structures can differ substantially across countries in terms of both pay level and the relative worth of jobs. For example, compared with the labor markets in Frankfurt, Germany, the markets in Budapest, Hungary, and in Figure 27 :  Earnings in Selected Occupations in SevenCities57   57  PwC. RIM HR Audit Report. London : PricewaterhouseCoopers UK Ltd., 2011
Mumbai, India, provides much lower pay levels overall. The latter two labor markets also exhibit less of a pay difference for jobs requiring greater skill and education. Differences such as these create a dilemma for global companies: Should pay levels and differences reflect what workers are used to in their own countries? Or should they reflect the earnings of colleagues in the country of the facility, or earnings at the company headquarters? For example, should a German engineer posted to Mumbai be paid according to the standard in Germany or the standard in Mumbai? If the standard is Germany, the engineers in Mumbai will likely see the German engineer's pay as unfair. If the standard is Mumbai, the company will likely find it impossible to persuade a German engineer to take an assignment in Mumbai. Dilemmas such as these make a global compensation strategy important as a way to show employees that the pay structure is designed to be fair and related to the value that employees bring to the organization. These decisions affect a company's costs and ability to compete. The average hourly labor costs in industrialized countries such as Canada, the United States, Germany, and Japan are far higher than these costs in newly industrialized countries such as Mexico, Hong Kong, and Korea. As a result, we often hear that Canadian labor costs are too high to allow Canadian companies to compete effectively unless the companies shift operations to low-cost foreign subsidiaries. That conclusion oversimplifies the situation for many companies. Merely comparing wages ignores differences in education, skills, and productivity. If an organization gets more or higher-quality output from a higher-wage workforce, the higher wages may be worth the cost. Besides this, if the organization has many positions requiring highly skilled workers, it may need to operate in (or hire immigrants from) a country with a strong educational system, regardless of labour costs. Finally, labor costs may be outweighed by other factors, such as transportation costs or access to resources or customers. When a production process is highly automated, differences in labor costs may not be significant. At the same time, the challenge of competing with organizations in low-wage countries can be very difficult. China, for example, has invested in vocational schools, which provide training for skilled factory jobs. Chinese universities graduate a  much larger share of engineers than Canadian universities. These schools are flooding the Chinese labor market with talent, so that even as high-tech manufacturing spreads to Many Chinese cities, the need for workers is easy to fill. China had 5.6 million university graduates in 2008, up from less than 5 million in 2007. For Chinese workers, even with University degree and experience, the result is that pay is growing hut remains low compared to rates in other countries. An example is Li Guangxiang, a senior engineer and assistant manager  at a Flextronics International computer  parts factory,  who earns just $10,000 a year.

Employee Benefits

As in Europe, compensation packages in other countries include benefits. Decisions about benefits and services must take into account the laws of each country involved, as well as employees' expectations and values in those countries. Some countries require paid parental leave, and some countries, have nationalized health care systems, which would affect the value of private health insurance in a reward package. Availability of partner relocation assistance is a differentiator for many organizations in attracting employees to global assignments. For example, some organizations provide the "trailing partner" with educational and career assistance. Pension plans ate more widespread in parts of Western Europe than in Canada, the United States, or Japan. Over 90 percent of workers in Switzerland have pension plans, as do all workers in France. Among workers with pension plans, Canadian workers are significantly less likely to have defined benefit plans dean workers in Japan or Germany. Paid vacation tends to be more generous in Western Europe than in North America. Figure 28 compares the number of hours the average manufacturing employee works in various countries. Of these countries, only in the Czech Republic, South Korea, and the United States do manufacturing workers put in more hours than Canadian workers—up to 400 more hours per year. In Brazil, Great Britain, and Germany, the norm is to work 150 to 400 hours less than a Canadian worker over the course of a year.
Figure 28 : Normal Annual Hours Worked in Manufacturing 58

5.8.                   Preparing Expatriates

Once the organization has selected an employee for an overseas assignment,  it is necessary to prepare that person through training and development. Because expatriate success depends so much on the entire family's adjustment, the employee's partner should be included in the preparation activities. Employees selected for expatriate assignments already have job-related skills, so preparation for expatriate assignments often focuses on cross-cultural training that is, training in what to expect from the host country's culture. The general purpose of cross-cultural training is to create an appreciation of the host country's culture so expatriates can behave appropriately. Paradoxically, this requires developing a greater awareness of one's own culture, so that the expatriate can recognize differences and similarities between the cultures and, perhaps, home-culture biases. On a more specific level, cross-cultural training for foreign assignments includes the details of how to behave in business settings in another country the ways people behave in meetings, how  employees  expect  managers  to  treat  them,  and  so  on.  As an example, Germans value promptness for meetings to a much greater extent than do Latin Americans—and so on. How should one behave when first meeting one's business counterparts in another culture? The "outgoing" personality style so valued in North America may seem quite rude in other parts of the world.
58  PwC. RIM HR Audit Report. London : PricewaterhouseCoopers UK Ltd., 2011.
Employees preparing for a foreign assignment also need information about such practical matters as housing, schools, recreation, shopping, and health care facilities in the country where they will be living. This is a crucial part of the preparation. Communication in another country often requires a determined attempt to and tries to select tanagers that speck the language of the host country, and a few provide language training. Most companies assume that employees in the host country will be able to speak the host country's language. Even if this is true, host country nationals are not likely to be fluent in the home country's language, so language barriers often remain.
Figure 29 : The Balance Sheet for Determining ExpatriateCompensation59 Along with cross-cultural training, preparation of the expatriate should include career development activities. Before leaving for a foreign assignment, expatriates should discuss with their managers how the foreign assignment fits into their career plans and what types of positions they can expect upon their return. This prepares the expatriate to develop valuable skills during the overseas assignment and eases the return home when the assignment is complete. In every category except the reserve amount. For the expatriate in this situation, the employer would pay the additional costs, as shown by the third column. Finally, the expatriate receives additional purchasing power from premiums and incentives. Because of  these  added  incentives,  the  expatriate's  purchasing  power  is  more  than  what   the employee could buy at home with the salary for an equivalent job. (Compare the fourth column with the first.) In practice, the total cost of an international assignment is often three to five times the employee's salary in the host country.
59  PwC. RIM HR Audit Report. London : PricewaterhouseCoopers UK Ltd., 2011. After setting the total pay, the organization divides this amount into the four components of a total compensation package. First, there is a base salary. Determining the base salary is complex because different countries use different currencies (dollars, yen, euros, and so on). The exchange rate the rate at which one currency may be exchanged for another constantly shifts in response to a host of economic forces, so the real value of a salary in terms of dollars is constantly changing. Also, as discussed earlier, the base salary may be comparable to the pay of other managers at headquarters or comparable to other managers at the foreign subsidiary. Because many organizations pay a salary premium as an incentive to accept an overseas assignment, expatriates' salaries are often higher than pay for staying at headquarters. A second component of total pay is a tax equalization allowance. "Tax equalization holds that the worker neither gains nor loses with regards to tax liability as a result of an international assignment." Countries have different systems for taxing income,  and in some countries, tax rates are higher than in Europe. Usually, the employer of an expatriate withholds the amount of tax to be paid in the home country, and then pays all of the taxes due in the country where the expatriate is working. A third component, benefits, presents additional challenges. Most of these have to do with whether an employee can use the same benefits in the foreign country. Similarly, health benefits may involve receiving care at certain health facilities. While the person is abroad, does the same health plan cover services received in the foreign country? In one case, flying an employee back to Canada for certain procedures actually would have cost less than having the procedures done in the country where the person was working. But the company's health plans did not permit this alternative. Expatriates may also have access to resources that domestic employees do not have, including international employee and family assistance plans and personal crisis or risk services. An employer may offer expatriates additional benefits to address the problem of uprooting a partner when assigning an employee overseas. Pfizer, a pharmaceutical company, provides a $10,000 allowance that the partner can use in many different ways. A person in the foreign country helps the partner with professional development and locating educational or other resources. In countries where the partner is allowed to work, Pfizer  tries to find him or her job  within the company. Pfizer  also provides   cross-cultural counselling and language assistance and tries to connect the family with the area's expatriate community.
The final component of the total compensation packages is some set of allowances to make a foreign assignment more attractive. Cost-of-living allowances make up the differences in expenses for day-to-day needs. Housing allowances ensure that the expatriate can maintain the same standard of living as in Europe. Education allowances reimburse expatriates who pay tuition for their children to attend private schools. Relocation allowances cover the expenses of making the move to the foreign country, including transportation, shipping or storage of possessions, and expenses for temporary housing until the employee can rent or purchase a home.

6.  Conclusion

In recent years, human resource management at many organizations has been taking a customer-oriented approach. For an organization's human resource division, "customers" are the organization as a whole and its other divisions. They are customers of HRM because they depend on HRM to provide a  variety  of services that result in a supply of talented, motivated employees. Taking this customer-oriented approach, human resource management defines its customer groups, customer needs, and the activities required to meet those needs, as shown in Figure 30. These definitions give an organization a basis for defining goals and measures of success. Figure 30 : Customer-Oriented  Perspective ofHRM60 One company that uses this approach is Whirlpool Corporation. The company's HR managers identify their customer, define the need they can satisfy  or the value they can provide, and identify the methods they must use to satisfy the customer. When Whirlpool planned to start a centralized service center, its plan called for hiring of 100 to 150 employees to process service requests from  customers owning Whirlpool appliances and to schedule service calls. Whirlpool gave an HR manager the responsibility for developing a selection system for call takers. The manager determined the customer in this instance was the operations manager in charge of phone service and the need was the delivery of qualified call takers. To meet this  need,  the  HR  managed  decided  to  use  a  combination  of    structured 60 Shellenbarger, S. Companies Must Try Harder to Attract Older Employees . The Wall Street Journal. 2001, May 23.
interviews and paper-and-pencil tests. The company can evaluate the success of this program in terms of whether it efficiently produces enough qualified call takers. Depending on the situation, a number of techniques are available for measuring HRM's effectiveness in meeting its customers' needs. These techniques include reviewing a set of key indicators, measuring the outcomes of specific HRM activity, and measuring the economic value or ROI (return on investment) of HRM programs. In general, HR departments should be able to improve their performance through some combination of greater efficiency and greater effectiveness.  Greater efficiency means the HR department uses fewer and less-costly resources to perform its functions. According to Hewitt Associates, more than three-quarters of HR departments are experiencing pressure to reduce HR spending. Greater effectiveness means that what the HR department does for example, selecting employees or setting up a performance management system has a more beneficial effect on employees' and the organization's performance. For example, Home Depot tracks a variety of measures to see whether it is effective at meeting goals for attracting, motivating, and keeping skilled employees. The company uses a database that includes data on job applications, career, paths, performance ratings, employee satisfaction, and attrition (employees leaving the company). Managers can analyse the data by region, district, and store, as well as compare numbers over time. HRM's potential to affect employees' well being and the organization's performance makes human resource management an exciting field. As we have shown throughout the book, every HRM function calls for decisions that have the potential to help individuals and organizations achieve their goals. For HR managers to fulfil that potential, they must ensure that their decisions are well grounded. Option for work design that many organizations have embraced to promote greater productivity and job satisfaction. At the same time, a review of the research literature shows that these assumptions about teleworks benefits are largely untested. Telework is but one example of an issue that can dramatically affect  employees'  lives  and  organizations'  success  yet  remains  open  for future investigation. The field of human resource management provides tremendous opportunity to future researchers and managers who want to make a difference in many people's lives and contribute to the success of organizations.

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