Human Resource Management in Global Economy

This essay discusses the challenges faced by international companies in managing human resources in a global economy. It covers topics such as organizational HRM, diversity management, culture, international performance management, and training and development. The essay provides a case study of an aircraft company and offers recommendations for improving its HR practices.

Running Head: Human Resource Management in Global Economy
Human Resource Management in Global Economy

Human Resource Management in Global Economy 1
Contents
Introduction.................................................................................................................................................2
Organizational HRM, Diversity Management and Culture...........................................................................3
International Performance Management....................................................................................................4
Training and Development..........................................................................................................................5
Conclusion and Recommendations.............................................................................................................7
References...................................................................................................................................................9

Human Resource Management in Global Economy 2
Introduction
The aim of this essay is to provide a brief introduction about the human resource activities
initiated in the external environment. In the current environment, it is becoming difficult for the
companies to implement their activities in such a way that growth is achieved in the international
market. Specifically it is becoming difficult for the international companies to organize their
activities and attain competence. Also, these problems increase with the increase in the activities
of the organization in global environment. Cross cultural management is the biggest issue that is
being recognized by the companies in the current business scenario. The essay explains the case
study of ‘No Name’ aircrafts, the company is headquartered in Australia and it has its
subsidiaries in China, Singapore and Vietnam. The CEO of the company is concerned about their
decreasing profits. The company fails to manage the diversity challenges present in the
environment. Also, the organization in unable to manage the international performance. The
international performance of a company can only be managed when the top level managers
initiate activities according to the environment in which they are, but quite differently the aircraft
operates same rules and guidelines for all the subsidiaries of the company that distress the
employees. Further, talking about the aspect of training and development in the company it
should be noted that inefficiency of human resource management team makes it difficult for the
company to sustain the employees; also there is no systematic workforce planning system in the
organization that makes it difficult for the employees to survive (Bader, Schuster, & Dickmann,
2015).
Further, the below mentioned essay provides information about the international activities of the
aircrafts and issues faced by it. It explains the challenging issues faced by the company like,
diversity management, international performance management, training and development of
employees. Furthermore, the essay also provides some recommendations to the aircrafts in order
to improve their current business activities. The essay explains the issues faced by the aircrafts in
above mentioned cases. By gaining information about the case study, the below mentioned essay
explains various theories related to the case. The case also helps in analyzing that the aircrafts is
not working well in the industry, it is facing lack of organizational profits due to inefficiency of

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the management to perform various functions in international market. More details about the
essay are discussed below:
Organizational HRM, Diversity Management and Culture
Diversity at workplace refers to the activity initiated by the human resource management of the
company with an aim to employ people coming from different parts of the world in the
organization. With the increasing competition present worldwide, it has become important for
organizations to diversify the workplace environment and gain competence as well. Diversity
can act as tool for organization to attract employees as well customers in the business of
aircrafts. However, as diversity helps in integrating the business activities and succeeding in the
market, it also provides some negative impacts to the organization. One of the biggest negative
effects of diversity is management of workplace. People coming from different backgrounds feel
awkward and difficult in adjusting themselves in diverse environment (Deresky, 2017). The HR
management of the company is unable to maintain positive effect of diversity in the environment
due to which employees create disputes and leave the organization. This acts as a negative
impact on the position of the organization in the global environment.
The resource based theory of diversity management states that there are four resources of the
organization namely financial capital, physical capital, human capital, corporate capital. These
resources can either assist of adversely affect to the growth of organization (Al Ariss, & Sidani,
2016). According to this theory organizations that make use of more diverse resources under the
given four categories tend to earn more in the competitive market than other homogenous
organization. The diversified organizations practice innovation that helps them in sustaining their
growth in the international market. In addition to which, the organizational culture theory
explains that values and behavior of employees contributes to success of the organization. It
helps the company in managing the workplace environment and earning efficiency as well
(Farndale, et. al., 2017).
Relating it to the aircraft company, it should be noted that the company has although employed
diversifies workforce in the organization but they are unable to manage them efficiently. The
company faces many issues in the organization like, communication at workplace, negativity in
the environment, resistance of employees, believe in near is good enough policy etc. Firstly, it

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should be noted that if an organization uses the policy of diversity in the organization then they
should take adequate measure to apply it correct otherwise it can adversely affect in image of the
organization (Gannon, Roper, & Doherty, 2015). The company is unable to carry forward their
information due to ineffective communication, as the culture and background expatriates is
different due to which they are unable to understand the information conveyed by Australian
employees. Differences in background and thinking create disputes in the organization that leads
to negative environment (Beugré, 2017). The staff resists to initiate good changes in the
organization resulting to which the company is unable to improve the quality of products and
services that they serve. This aspect is affecting the overall organizational profits. Thus, it should
be noted that the company should understand the importance of culture and diversity and then
only initiate activities in such a way that the customers along with the organization are satisfied
with the activities of the company and do not think of leaving it (Kang, & Shen, 2017).
International Performance Management
Managing the performance of the employees and rewarding them accordingly is one of the most
important ways to keep them happy. The company needs to initiate adequate measures related to
the performance appraisal method of the employees so as to reduce the employee turnover rate of
the company. Manpower is the biggest asset of the organization, thus the management should be
liable to keep them satisfied so as to initiate organizational success. Further, the performance
management team of the organization effectively helps the top level management in identifying
the work done by every employee of the company and rewarding them accordingly. The reward
can be in the form of monetary as well non-monetary. It should also be noted that an
international organization faces many challenges in the environment while initiating the process
of performance appraisal in the organization (Reiche, Stahl, Mendenhall, & Oddou, 2016).
The company also incurs huge cost while initiating this method. According to the behavioral
management theory, the managers need to treat the employees as their asset and they should treat
them equally. In this way management can satisfy the employees by fulfill their needs. Further,
the rating scale method of employee performance management explain that the company consist
of several numerical scales that represents job related to the performance aspects such as output,
initiating, dependability, accountability, attendance etc. (Sung, & Choi, 2014). The total numeric

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sore of each employee is calculated on the basis of which conclusion is made in the organization.
Each person is given to scale between excellent to poor. On the basis of this score only the
employees are being incentivized in the organization. The advantage of this approach is that it
can be easily adopted by company and provides an accurate result related to the performance of
the employees of the organization. Lastly, it should be noted that this aspect removes the
biasness present in the environment (Vigneau, Humphreys, & Moon, 2015).
Relating this theory of performance management to the given case of Aircraft Company, it
should be noted that the company do not hold any system related to the performance
management and appraisal of the employees of the company (Carinci, et. al., 2015). As
international performance is closely connected to the international performance appraisal but
sadly the organization is lacking this type of facility in their system. The company is placed in
the international market but it does not have any formal performance appraisal system for
rewarding the expatriates (Vaiman, & Brewster, 2015). The Australian branch of the company
uses an ad hoc approach of reviewing the employee hat does not consider the economic
conditions of the environment in which subsidiaries are placed. The employee feels pressure
because the company aims to follow the same decision for subsidiaries irrespective of the
differences present in environmental conditions. Resulting to which, the company fails to satisfy
the employees by rewarding them optimally. The organization should use adequate measures that
easily identify the work done by the employees and provide them monetary as well as non-
monetary incentives accordingly. This will reduce the conflicting performance outcomes (Welch,
& Björkman, 2015).
Training and Development
Training and development is another most important aspect of the international organization.
With the help of this process the expatriates learn to work in the organization properly. The
companies present in the international market now days spend more than half of their income on
the process of training and development. As employees are the biggest asset of the company so if
organization will invest on improving their biggest asset then it will ultimately help them to
survive in international market. Training and development is the learning phase under which the
employees gain information about the image, history and future prospects of the company. This

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aspect helps the company in molding those expatriates according to their organizational
requirements. Also, it should be noted that the process of training and development helps the
employees in mixing with other employees of the organization. This process helps them in
getting close to each other (Aguinis, & Kraiger, 2009).
Further, it should be noted that it is not easy to train the employees according to their
requirements. As all the employees belongs to different backgrounds and cultures so conflicts
might arise in the organization with cultural activities of one employee overlap the cultural
activities of another employee. Also, it should be noted that in an international organization
different employees have different opinions about activities. One person might agree to one
activity while other employee’s opinion might differ (Barak, 2016). So, this issue can raise
difference among employees. Furthermore, it should be noted that cognitivism theory states that
the manager should focus improving the mental health of the employees than improving the
physical actions. Improvement in mental abilities will help the employees to think strategically
ad act according. Apart from that the connectivism theory states that there many ways of learning
in an organization. The employees can use free online courses, chats, conferences etc. to learn
and train themselves according to the activities prevailing in the environment of other subsidiary
company. But, the employees should be keen enough to learn not like in the given case of
aircrafts (Lopez-Valeiras, Gomez-Conde, & Naranjo-Gil, 2015).
The organization has inefficient training system under which they are unable to train expatriates
properly resulting to which they have started leaving the jobs. The HR manager is the one who is
responsible for initiating such activities. But there is no strict decorum for implementing training
programs in the organization. Resulting to which, the employees feel stressed while working in a
diverse environment. The expatriates struggle hard to sustain their activities in diverse
environment (Brouthers, Nakos, & Dimitratos, 2015). They face difficult in surviving their
growth in different environment. In order to training the employees properly, the company needs
to prepare a systematic workforce development program to train the employees and help them
adopt the policies and procedures of the organization. Further, it should be noted that unlike the
given organization, the international organizations should implement a formal plan that should
include all the important details that the employees should know in order to train themselves
with the activities of the company (Greene, & Kirton, 2015).

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Conclusion and Recommendations
Thus, in the limelight of above mentioned events, it should be noted that there are many issues
faced by the company in the international environment. Initially, the essay explained about
diversity and culture management and theories related to it. Further, it explains international
performance management and lastly training and development. All three aspects play huge
importance in helping international organizations in succeeding in tough market conditions.
Further, it should be noted that in the current environment, it has become tough for the company
to survive easily without performing excellent in the target market. The companies need to
initiate effective human resource management techniques otherwise they will start losing their
organizational profits like in the given case of the Airlines. The company needs to manage
diversification activities, initiate performance management programs and train and develop the
employees adequately in order to maintain the level of optimum profits in the environment. In
this way they can easily sustain their growth in the environment. Further, below mentioned are
some of the recommendations given to the company with the help of which they can sustain their
activities in the international environment.
The company should use the facility of diversity properly. There are two different types of
organizations present in the environment one in homogenous and the other one is innovative
organization. The homogenous organization does not earn well because they do not have
diversification in its activities. But if an organization initiates the activity of diversification then
they should adequately address the issues related to it and solve them. The company should not
lose its efficiency in order to initiate diversity. They should adequately manage different types of
cultures present in the environment. No employee should feel cultural while working with the
organization. Cultural shock will reduce the willingness of a person to work effectively in
diverse environment. Thus, they should address the diverse issues related to the employees and
aim to solve them (Rice, & White, 2015).
Further, with respect to the international performance management and appraisal procedure, the
company should adequately use the system that address the economical differences present in
different parts of the world and allow the company to work accordingly. The company should
procedures that understand the cost of living for people at different cities and other economic
issues and then appraise the employees accordingly. For instance, if cost of living in China is

Human Resource Management in Global Economy 8
costlier than Vietnam, then the company should not appraise the employees at same pay scale;
instead they should promote the employee living in China with higher pay scale so that they can
easily fulfill their basic requirements in China. The company should prepare a single format that
all the subsidiaries should follow according to differential conditions resent in the environment.
Training is the most important aspect that helps an expatriate to initially survive in the
organization and development helps them to sustain their activities in the organization. So, the
company should convince the existing employees to train the expatriates (Hornstein, 2015). This
process will initiate friendliness in the organization and help the employees to interact easily in
the organization. This process will also collaborate both types of employees in the organization
and help the expatriate to learn from the experienced people of the company.
Thus, by using these approaches the company can regain their position in the market.

Human Resource Management in Global Economy 9
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