Many scholars such as Rao (2012), find globalization to be a controversial concept. In the consideration of IMF; for instance, globalization is a consequence of technological development due to human innovation thereby making it a historical process. It relates to the increased global economic integration facilitated particularly by the increased movement of capital, goods and services across boundaries.
Controversy arises due to lack of regard to the significant role played by communications, especially mass media and the internet. This is because this is because the incessant flow of information influences the transformation of space and time, and acceleration of all social processes. Globalization, also, refers to the integration of the strategies, processes and operations of an organization into diverse ideas, services, products, and cultures.
Impact of Globalization on HR Management
- It is worth noting that globalization has significant effect to the manner in which employees are managed by their companies. However, as Mathis (2013) asserts, it is significant for managers to understand such effects in order to equip their organizations so that they can achieve appropriate capacities survive in the increasingly competitive global environment. Such influences include:
- Diversity recruitment: Increasing globalization provides a platform for companies to interact with stakeholders and customers from diverse social backgrounds, languages, and cultures (Mathis, 2013).
- Emphasis on the need for professional development: Globalization, also, affects HR management by creating the need for professional development.
- Great emphasis on training: Globalization in HR management has resulted into the need for further training.
- Management of laws in various jurisdiction: Globalization, also, affects HR management by creating the need to comprehend to apply the laws of various jurisdictions to the specific business (Rao, 2012).
The Impact of Cultures on the HR Management:
- It is significant to note that cultures are essential aspects of people. People can learn cultures through a process that Rao (2012)calls enculturation. Naturally, cultures entail utilization of language and symbols. Cultures impact on the HR management in the following ways:
- Employee base: The workplace culture is usually determined by the number of employees that the company employs. This implies that a huge organizations that employ many workers are culturally more bureaucratic than small businesses (Rao, 2012).
- Organization structure: Implementation of HR policies is dependent on whether the policies are favorable to the culture and the kind of support that can be received from organizational structure (Rao, 2012).
- Climate: The way employees perceive their employer’s appreciation for their skills, integrity and openness determines workplace climate (Rao, 2012).
- Location: Both industry and location have significant effect on the workplace culture, which, in turn affects HR management (Rao, 2012).
The Impact of Labor Markets on HR Management
- The labor markets provide a ground for employers to compete amongst themselves for the finest human resources (Rao, 2012).
- Labor markets impact HR management in terms of the demographic situation, legal restrictions and fluctuations in unemployment rates.
A compensation Strategy that Would Support International Operations
- As globalization continues increasing, the businesses environment also, continues becoming competitive. This has seen many organizations struggling with management of compensation programs and designs that can be applied in various jurisdictions (Szymendera, 2012).
- To ensure that expatriates remain productive while handling their international operations, there should be a balanced compensation approach that equalizes the living standard between home nations and the host country (Szymendera, 2012).
- There should, also, be additional compensation for qualitative loss or inconvenience
- For expatriates, currency translation should be appropriate. Besides, there should be incentives and bonuses for dislocation.
- Allowances should be sufficient to carter for adjustments to the cost of living, relocation expenses, trips home to visit family, allowance to maintain house in the home country and housing allowance for assignment, and private education for children (Szymendera, 2012).
- Benefits should include stock options and health insurance.
- Host country nationals should be compensated in regard to cost of living, unions, government involvement in benefits, local pay scales and market factors.
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