304 LON International HRM

304 LON International HRM

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304 LON _ INTERNATIONAL HRM

REGULAR ASSIGNMENT ONE

COVENTRY UNIVERSITY LONDON CAMPUS

17AUGUST 2012


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STUDENT NAME STUDENT ID ATTEMPTED PARTS

Esha Chopra 4095053 Recruitment and selection

Priscilla W Muchiri 3912300 Training and development

Gabriela Martins Madureira

4049702 Reward and performance

management

Muhammad Tanvir Hossain 4325352 Employee participation and

trade union

Group Introduction,

Recommendation and

Conclusion

TUTOR NAME: MISS YVONNE BROWNE


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Table of Contents

Introduction ........................................................................................................... 4

Recruitment and Selection .................................................................................4-5

Training and development .................................................................................5-6

Reward and performance management ..............................................................7-8

Employee participation and trade union ..........................................................9-11

Conclusion .......................................................................................................... 11

References………………………………………………………………… 12-14

Appendices……………………………………………………………………..15

1. Total Reward Model ………………………………………………………..16

2. Schuler and Rogovsky (1998) different types of reward systems………..…17

3. Marchington's (1992) four categories of EPI:.............………………………18

Reader’s Guide: Recommendation mentioned after each topic.


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Introduction

In this report we will look at the key HRM issues at Medical Precision System (“MPS”) -a

respected US company which has been producing medical precision tools used in surgery

since 1972-discussed in the case study and point out the number of reasons that may have

caused the company to face some difficulties in both their home country and in the United

kingdom, France and Sweden. Despite the company’s success in America, employees in

Europe did not respond well to the current management. Consequently, after understanding

the company’s international and local activities make recommendations to help in minimising

the problems, increasing performance level and employee job satisfaction matching their

perception of value.

Recruitment & Selection

“Recruitment is defined as searching for and obtaining potential job candidates in sufficient

numbers and quality so that organization can select most appropriate people to fill its job

needs” (Dowling et. al. 2008). The main role of the Human Resource manager is to recruit

and select the best suitable person for the organization. It is quite vital to note that based on

the industry and sector the Human Resource manager uses different models for recruitment

and selection.

The most appropriate in this instance would be the “attrition -attraction-selection” model

developed by Schneider (Bratton and Gold 2007).

“Attraction” is when the employees apply

for job as they are passionate about the job

role. “Attrition” is the opposite of

attraction, when the employees leave the

organization when the employees are no

longer interested in the company. Whereas,

in “Selection” the organization selects a

candidate when they feel that the candidate

is suitable to hold the position in the

organization.

In the case of Medical Precision Systems, the main contrasting decision at the human

resource management level was that they kept on recruiting employees that at the end of

every international expansion strategy they had an enormous number of work force. It should

be noted that even though having more employees is good for the company as it will help in

catering the difficult tasks at the technical as well as administrative level especially in a new

geographic region but the cost involved in training the staff will cause them a lot of financial

burden and minimizing it will in fact help the company to invest in other spheres of business.

The use of expatriates is one of the measures that the company could have used, as most of

the MNC’s have been successful as this helps in successful transmission of the Human


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Resource Strategies (Nohria and Ghoshal, 1997). In this case the amount spent on training the

staff is not very high as the expertise remains with them but cultural training has to be

provided to those employees. Expatriates also help in bringing forth the know-how and

organizational culture of the company (Dowling et. al. 2008), which will help in ease of two

way communication between both these countries as well.

Similarly, another Human Resource Management strategy that Medical Precision Systems

can use is the more effective utilization of the Information Technology. For instance,

facilities such as online applications, Curriculum Vitae uploading, job roles and career

prospects etc. being available online would have helped in making the recruitment procedures

much easier, reduce cost as well as more applicants for the company while its international

expansions (Beardwell, J. and Claydon, T. 2010).

Training and Development

Training aims to improve employees current work skills and behavior, whereas development

aims to increase abilities in relation to some future job position. (Dowling 2008:137) and at

MPS training is taken seriously and all employees attend sessions to train in team working

and people skills as well as courses of a more technical nature. This is very essential to the

company as it employees so many employees both skilled and semi skilled per year and

because the company ensures that laying them off is avoided as much as possible hence

greatly building its stock of human resources-its human capital.

In the struggle to ‘think global and act local’ organizations need people who have ‘a “matrix

of the mind “, sharing learning and creating new knowledge are among the key capabilities

that organizations must have( Ulrich and Stewart Black, 1999) hence by MPS expanding

overseas and hiring a rather educated workforce no much training is required initially but the

continuous learning and development of individuals are therefore of crucial and strategic

importance to the company (Beardwell and claydon 2010), Such as cross cultural awareness

and language training programs to help the expatriate employee adapt and not feel isolated

and to assist in managing diversity, employee training and Consequently by planning and

implementing are able to fill in the gap and evaluate the intervention. (See diagram below)


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Appropriate training for international subsidiaries is crucial in order to minimise problems

such as lack of understanding of the British mentality, France major problem in the

management style and the diversity of conditions in the subsidiaries’ and practices followed

in the USA.MPS has an existing HRM strategy which ensures that feedback mechanism is

implemented and backed up with training programmes for all employees, additionally it

should adapt the Mendenhall, Dunbar and Oddou cross-cultural training model for its

managers(expatriates) as leadership is a key factor in influencing the development of learning

organization. (Senge, 1990; Johnson, 1998; Prewitt, 2003; Sadler, 2003) which has three

dimensions of training and establishes a suitable program depending on the employees level

of interaction and the degree of similarity between the employees home culture and the host

culture, thus able to understand the situation, the people, minimize the problems and attain

effective performance to achieve the transition.

(see diagram below)


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Finally, by encouraging its employees to think out of the box in order to bring out the best in

them and having a leader who can help cope with the changes this in effective will help the

company to breathe and grow.

Performance and Rewards

Reward is an essential factor that motivates employees and influences their level of

performance. The Expectancy Theory of Motivation (Vroom, 1982)

Vroom’s Expectancy Theory


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proposes that employee motivation results from employees’ valuation of rewards and that

rewards must also support their culture and goals. MPS focuses on performance

management, setting targets for groups and individuals that determine remuneration and

promotion. Profit sharing has been introduced and a share scheme will be introduced in the

near future.

However, the Model of Total Rewards (See appendix1) (Armstrong and Murlis, 1998)

recommends combining rewards to maximise employee’s satisfaction; the ‘reward mix’ is

important, balancing ‘pay’, ‘benefits’, ‘learning and development’ and ‘work environment’.

In a cross-cultural organisation, employees must have a clear view of what is needed to

achieve rewards available.

Greene (1995) also stated that reward systems should be sensitive to cross-cultural

differences and performance-dependent rewards may not be attractive to employees who

value income continuity. Schuler and Rogovsky (1998) suggested that workers’ differing

values across countries of status, individual performance and risk avoidance should determine

the types of rewards offered (See Appendix 2).

Whilst MPS’s US workers responded well to target-setting, (suggesting they are individual

and not concerned about job security), unions and employees in the UK felt the targets were

too hard and divided employees (suggesting they are less individual and more focussed on

maintaining job security); rewards to increase status/seniority may motivate UK workers

more than pay/bonuses.

In France, employees also did not react well to hard performance targets or group feedback

on the performance management system but wanted a strong line manager with authority to

direct them (suggesting that the French workers were motivated by status); the reward mix

may need to focus on benefits and work environment (e.g. additional holiday allowance not

pay/bonuses). French workers would respond better to a strong French management team

rather than a US manager.

In Sweden, employees disliked performance targets but liked group feedback (suggesting

preference for employee ownership rewards based on group efforts); MPS should focus on

the work environment to encourage employees’ enjoyment of group innovation and

encourage innovation in teams. Rewards may be in the form of pay/bonuses but be focussed

on Swedish performance and teams rather than individual performance.

MPS’s reward schemes focus on individual performance (assuming that all employees are not

worried about job security) which appeals to US employees. However, employees in the UK,

France and Sweden are not responding well to the current reward mix. MPS should develop

country-specific rewards that match those employees’ perception of value which will ensure

all employees are motivated.


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Employee Participation & Trade Unions

Employee participation:

Employee participation and involvement (EPI) is the central activity of HRM ( Beardwell &

Claydon 2010: 531) and is an extremely important component of HRM. Marchington and

Wilkinson (2005: 392) describes 'employee participation and involvement are somewhat

elastic terms and are amenable to a range of definitions'. MPS expatriate managerial motive

was to motivate employees for a positive-sum outcome and implemented direct participation

in UK, France and Sweden in a form of team working systems, work place feedback etc. The

motivation for participation differs fundamentally from employee involvement, a 'desire'

(Beardwell & Claydon 2010: 533) to increase the influence of technical issues of corporate

efficiency (see Box 1.1).

Table 1.1 Employee involvement and participation compared:

Source: Beardwell and Claydon (2010)

Marchington et al. (1992) classify four categories of EPI initiatives (see appendiX 3)

Upward problem solving mechanism (see the diagram below) did not work so well in France

as workforce see very little potential of this feedback mechanism where they preferred to

have a line manager to direct them towards work tasks which is downward communication.


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Source: Upward communication, 2012

MPS failed to implementing indirect participation in European subsidiaries in the decision

making process. As a recommendation, MPS should implement employee participation in

form of following figure:

Source: Bratton, Gold (2007)

This above cycle will Help MPS to create a diverse atmosphere to lead the growth in

innovation and creative ideas within organization. The involvement schemes are: behaviour,

economic and moral.


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Trade union is the indirect participation (Representative participation) which bring the social

responsibilities within the organization (Mullins 2010).

Britain 'employee participation' (Employee Participation and Involvement, 2012) has

normally occurred within the structure of combined bargaining. For example, when MPS's

UK operation manager Joe Mendes suggested having one union for negotiation purpose there

was almost a huge walkout. MPS strategy of keeping out union did not work in Britain as the

representative participant (unions) and many employees stressed target was too high and

disruptive and they have little control over them.

MPS set up a works council for management and employees in Sweden under the Swedish

and EU law but MPS disliked these meetings and gave less importance. MPS were not quiet

co-operative in the eyes of one Swedish union.

Conclusion

It is crucial for MPS or any other organization to recognize that cross cultural training

increases the probability of success of international assignments, moreover, develop its

employees to enable them to perform their current and future roles in the organization and

also to accumulate stock of knowledge, skills, and abilities that employees possess which the

company builds over time into identifiable expertise. In doing so recognize that the

employees expect either intrinsic or extrinsic reward when they have put effort in and become

greater skilled. Furthermore, with the increasing flexibility of organizations individuals need

to engage in lifelong learning. And all these can be done through employee, staff, self-

development, management and organization development and continuing professional

development. In conclusion, however It is important to note that some employees may

become dissatisfied with their jobs or employers after training hence some employers may

become reluctant to develop their employee. Additionally, MPS should therefore develop

country-specific reward schemes that match the local employees’ perception of value.

Developing rewards to match local employee value perception will ensure that the motivation

of employees in those countries is maximised.


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References:

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Contemporary Approach. Harlow: Financial Times Prentice Hall

Bratton, J. and Gold, J. (2008) 4th Edition Human Resource Management: Theory and

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Blyton, P. and Turnbull, P. (2004) The Dymanics of Employee Relations, 3rd edn.

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Cameron, S., 2010. The Business Student’s Handbook: Skills for Study and Employment, 5th

Edition. London: Pearson Education Limited

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(13/08/2012)

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Dowling, P., Festing, M. and Engle, A.D. (2008) 5th Edition International Human Resource

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Jackson, T. 2009, International HRM A Cross Cultural Approach, Sage Publications Limited

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Figure References

Bratton, J. and Gold, J. (2008) 4th Edition Human Resource Management: Theory and

Practice, Basingstoke: Palgrave Macmillan


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Appendices


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APPENDIX 1

TOTAL REWARD MODEL

Source: Beardwell and Claydon (2010)


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APPENDIX 2

Schuler and Rogovsky (1998) different types of reward systems:

Reward systems based on status (seniority and skills) are more likely in countries with higher

levels of uncertainty avoidance (where employees desire job security);

Reward systems based on individual performance (performance pay, bonuses), which are

more likely in countries where employees are individual (i.e. employees are less motivated by

team rewards) and less likely in countries with higher levels of uncertainty avoidance (i.e.

less likely where employees want job security); and

Employee ownership plans (share option plans), which are more likely in countries with (i)

low ‘power distance’ (‘power distance’ is the extent to which reward is based on status rather

than performance so ‘low power distance’ means where performance leads to rewards and

not status) and in those countries (ii) where employees are individual and (iii) those countries

with lower levels of uncertainty avoidance (where employees are not worried about job

security).


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Appendix 3

Marchington's (1992) four categories of EPI:

Downward Communication: Downward communication is top-down communication from

management to employees. It is including company's other communications, such as, team

briefings, news papers and magazine, meetings and the use of the intranet (Bearwell and

Claydon (2010 :545)).Table 1.2 shows the findings from WERS in 2004.

Table 1.2: Direct communication by sector of ownership

Source: Bearwell and Claydon (2010)

Upward problem solving forms and team working: Upward problem solving mechanism are

commonly considered for the function of collecting ideas and solving production and service

problems. It also take account task-based participation, self-management and team working.

Organizations are strongly linked team working and task-based participation as inner part of

HRM (Mueller and Proctor, 2000). WERS 1998 and 2004 gave an nearby report on what

companies are reporting of team working practices. Table 1.3 shows the summery of the

report.


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Table 1.3: Work organization by sector of ownership.


Financial participation: This refers to schemes that allow employees a financial stake in the

company. Typical mechanisms include employee share ownership schemes and profit related

pay. Holden (2004: 554) explains that 'the general aim of financial participation schemes is to

enhance employee commitment to the organisation by linking the performance of the

organisation to that of the employee' (Bearwell and Claydon (2010: 547)).

Representative participation: Representative participation is indirect participation. It includes

work council and trade union. Representative participation introduce the concepts of social

partnership and an extension of rights for individual employees. Table 1.4 below shows the

employees involvement from 1980 to 1998 in Trade union, work councils and consultation.



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