Impact of HRM Practices in Volkswagen

This report examines the impact of HRM practices in Volkswagen in Asia and Africa, including the use of HR strategies, the influence of regional and national culture, organisational levers used, and differences in employment laws. It also discusses the importance of considering local culture in hiring and firing decisions and the changes in employment laws when implementing international HRM practices.

Human Resource
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAINBODY....................................................................................................................................1
Examine how value was created by the firm by using HR strategies. Use of concepts of
strategic HRM should be evident................................................................................................1
Analyse the impact of regional and national culture on the practice of HRM of Volkswagen
in Asia and Africa country..........................................................................................................2
Use appropriate organisation’s model of employment and state the organisational levers used
by Volkswagen to create value...................................................................................................3
Using Storey’s 27 points of difference between HRM and Personnel Management as a
benchmark, state what is being practised by Volkswagen in the Asian / African Country-
HRM policies or Personnel Management or both?.....................................................................4
When it comes to hiring and firing do you consider the importance and significance of local
culture and HRM practice needs to be undertaken in general and the practices need to carry
out HRM in transnational/international-subsidiary.....................................................................6
Examine the differences in terms of employment laws when international HRM changes local
business systems..........................................................................................................................6
Use corporate examples of firms using good HR practices and literature to justify your stand.8
Recommendation.........................................................................................................................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Human resource management is defined as the management functions that is concerned
with hiring, motivating, training and management of the workforce in a company, HRM
practices and HR strategies is focus on people in the organisation. As per the academic accepted
definition, HRM is a personnel function which is obsessed with the acquisition, development,
reward and pay-off system and management of the employees of a company for an aim of
contributing towards the attainment of the organisational goals and missions. Volkswagen is a
German automotive company which is third bigger name in the EU nations in respect to the sales
revenue. Volkswagen trade under its parent company i.e. Volkswagen Group which serve and
ships its cars in the Asia, Europe and African auto-mobile market, the biggest car market for
company is China in Asia from where company generate 35% of its sales and profits (Zaid,
Jaaron and Bon, 2018). Company has overseas operations with diversify workforce which
needed to be managed effectively to achieve sustainable goals of the business. Therefore,
following report present the HRM practices and HR strategy in Volkswagen by analysing
personnel and HRM model along with key difference difference among HRM management and
personnel management by using Story's 27 point of difference as a benchmark to throw light on
the HRM practice in the Asian and African market. Following report also analyse the effect on
company's HRM practices in contrast to the regional and cultural aspects along with basic
employment law that come into existence because of Globalisation and impact the lever on HRM
practices of the company.
MAINBODY
Examine how value was created by the firm by using HR strategies. Use of concepts of strategic
HRM should be evident.
In a company which adhere its workforce as the most valuable asset for the firm, HR
strategies has extreme valuable to deliver the same. In the 21 century era where many companies
are struggling to get and attract skilled and competent employees Volkswagen us using strategic
HR practices in its human resource management as it lead a critical role in creating value for the
company. HRM practices can add value into the bottom line of the firm by using appropriate HR
strategy that meet strategical and tactical goals of the employers (Järlström, Saru and Vanhala,
2018). So, in order to attain business goals and add value to the organisation there is need to
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align HR strategies with the business strategies. Nevertheless, strategical HRM practices are link
between the Volkswagen human resources and business strategical which were developed to
improve business performance, to create a fit for purpose organisational working culture and
maintain flexibility in the working. Strategical HRM practices are important for Volkswagen
for the following motives
 To enhance the job satisfaction
 To maintain healthy working environment Aids in boosting productivity and retention capacity of the company.
HR strategies Talent acquisition and retention strategy
Volkswagen is a company known for its skilled and competent taskforce which was
successful by effective hiring and retention of talent strategy. It is huge duty of HR to built
strategies for creating a well planned system of the recruitment, attraction, selection , training
and retention of the valued and best employee for the longer duration.
 Performance management strategy
Volkswagen is largest automobile producer in the EU nations because of its well run
human resource department function of performance and people management. In performance
management, HR form strategies to boost productivity in the manufacturing process and lever
motivation among the people by offering sort of promotional and reward program (Wang and et
al, 2018). Consequently, the supreme manner in which HR personnel creates value for
Volkswagen by promoting link between the performance and people management by sort of
reward and recognition strategy.
Analyse the impact of regional and national culture on the practice of HRM of Volkswagen in
Asia and Africa country.
The Volkswagen company employees around 75k people in the Asian and Africa auto-
mobile market. Volkswagen is company that stands for diversity and equal opportunity to all the
employees. Withal, there are some geological cultural aspects which affects the HRM of Analyse
the impact of regional and national culture on the practice of HRM of Volkswagen in Asia and
Africa country Volkswagen in Asian and African market. Culture is major aspect which not only
affect the HRM practices but whole organisational operations in the Asia or African countries.
Regional culture affect the communication, motivation and people expectation of the work
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design because company has to adjust its HRM practices as per the regional requirements. For
instance, Volkswagen observing communication barrier due to various regional language in India
(Hussain and Zeadally, 2018). Moreover, cultural difference leads a important role in the way
people conduct its lives and respond on the job, the people of Japan are hard-working in that
sense they do not to focus more on the reward planning. National culture is another one thing
that HR manager should consider in its HR strategies, in order to maintain harmony at the
workplace Volkswagen have to provide cross culture training to its German employees in order
to smoothly operates in the Asian auto-mobile market which is fast flourishing, as per the
financial audit of the company 35% of the sales revenue comes from the China therefore, HR of
Volkswagen should consider Chinese regional and national culture in order to avoid any threat of
hurting any culture and believes of the Chinese people and employees as it has direct impact on
the firm credibility in the Chinese market which is biggest auto-mobile hub in the Asia (Raut and
et. al., 2019). Conception of national culture as a basis for designing International HRM practices
of Volkswagen for instance, basic conception of national culture of Turkey are collectivism high
degree of uncertainty there lies a huge power distance between superior and subordinate that
means there is little control over the people activities in the Turkey market because there is still
high inequality in the decision making process.
Use appropriate organisation’s model of employment and state the organisational levers used by
Volkswagen to create value.
Organisational modelling is a method for demonstrating and illustrating the function and
reporting structure within Volkswagen and assure that the structure assist the goals of the
business. Organisational model of employment is a HR framework which illustrates the
organisational strategical scheme designed to assist the personnel and coordinate business
functions regarding human capital. Volkswagen used motivational theory in its organisation
model of employment with aim to boost productivity and create organisational value. Employee
motivation is a factor that causes an employee to go to extra miles for there services to achieve
goals of the company (Horwitz and Mellahi, 2018). Volkswagen is adopting Herzberg's two
factor theory of hygiene and motivation which is governing more importance in the automobile
manufacturing hubs. Hygiene and safety is first thing which firm need to consider in because this
is not factor of motivation but these can affect the employee performance if it in poor manner,
therefore absence of hygienes factor would cause employees to workless hard. Hygiene factors
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are not existed in the current job itself but surround the job. In context of Volkswagen hygiene
factors involves company policy which should be clear and fair to employee, work condition (the
equipments and the workplace condition should be safe and accidental free, and equal salary and
remuneration to the people. Motivation is the other instrument in this theory which Volkswagen
is giving in form of achievement, growth and recognisance that can be used as self-indulgence or
development of the employee.
Organisational lever used by Volkswagen in its HRM practices Compensation system- Compensation system is the first organisational lever in HRM
practices of the company as compensation system can influence job satisfaction and
moral and can lead to the high labour turnover, so Volkswagen is using reward and
recognition program as a sort of motivational tool in its compensation system for creating
a value to the company (Kushwaha, Yadav and Prasad, 2018).
 Performance management- Another crucial organisational lever of HRM is performance
management, in this aspect company observe an individual performance and provide
feedback to them and render suggestion regarding training for enhancing individual
performance and increasing productivity at the workplace.
Using Storey’s 27 points of difference between HRM and Personnel Management as a
benchmark, state what is being practised by Volkswagen in the Asian / African Country-
HRM policies or Personnel Management or both?
Human resource management is concerned with the acquisition, maintenance, learning,
development and coordination of human capital within an organisation so as deliver a quality of
work at workplace. It is a ongoing process which deals with analysing the demand of workforce,
hiring, selecting, training, compensation and continuous performance appraisal, so as to make a
efficient use of human resources in order to achieve organisation goal. With the effect of
globalisation and current market trends human resource management have evolved from the
traditional personnel management which were dealing with the administrative functions such as
record keeping and managing employees wages, benefits and maintenance of fair and equitable
relation with the company along HRM functions.
Benchmarks Human resource Personnel management
Key relations One of the basis stated by John storey Traditional mode of managing people
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was the scope of relationship
maintained and developed by each of
the management. Modern Human
resource management of Volkswagen
focus on the building key relation with
the workforce. Volkswagen consider
human as their important assets and
aims to build a competitive workforce
through regular training and
development programmes (Shahreki,
2019).
considers human as tool in-spite of
investment. Personnel management of
Volkswagen focus on building
relationships with the customer and
neglecting the workforce of a
company.
Communicati
on
Modern-day human resource
management communicates directly
with their workforce so as to avoid any
miscommunication and
misconception .Volkswagen by means
of effective communication methods
makes aware and inform the workforce
regarding policies, norms and code of
behavioural conduct.
Personnel management deals with
administrative aspect of operational
activities where the management
does not interact directly with the
employees which contribute in
mismanagement of workforce and
activities in Volkswagen.
Job design Human resource management of
Volkswagen design the job of an
employees on the basis of team work.
The main aim of HRM practices is to
foster positive and healthy relationship
among the employees so that the
employees are regarded as members of
family.
Personnel management of
Volkswagen design and develop the
job role of an employees on the basis
of core competencies of an
organisation where the behaviour of
an employees are manipulated. The
work were assigned on the basis of
division where specified role is
performed by specified person
(Knezović, Bušatlić and Riđić, 2020).
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When it comes to hiring and firing do you consider the importance and significance of local
culture and HRM practice needs to be undertaken in general and the practices need to carry
out HRM in transnational/international-subsidiary
Volkswagen is a multinational company and its employees are of diverse culture, so in its
HRM practices it need to consider in the local cultural both during hiring and firing of the
company. For instance, company cannot fire a employee in India due to discrimination based on
religion as India is secular country where in Germany Volkswagen used to fire female candidate
due to woman-empowerment program in the local culture and fast availability of female
candidate over male candidate (Huemann, Keegan and Turner, 2018). Volkswagen have adopted
local culture in its hiring process which support recruiter to understand which question are more
suitable and vital to ask without any harm to sentimentalism and value and believes of person.
Even so, during the recruitment process it is also significant for HR personnel to aware about the
corporate culture is how the new hire will into the diverse culture of the company.
When company are dealing in multinational process that need to consider in the cultural
diversity aspect in its business strategies and HRM practices, Volkswagen providing training and
development program about the knowledge of cultural diversity during its on-boarding process.
Many times, organisational culture is describe as the glue that grip both employer and employee
together this is because when local culture meet the organisational culture of the state and
nations it directly decreases the employee turnover of Volkswagen (Kaufman, 2019). Therefore,
it will be not wrong to say that local culture is extreme part of hiring process of Volkswagen in
order to raise as the valuable brand in the world for working.
Examine the differences in terms of employment laws when international HRM changes local
business systems.
Globalisation help many business to share its economy with other countries of business
diversification and expansion, same thing Volkswagen is doing in its business and scatter its
business within EU nations, Asia and Africa. Thus when company switch its business operations
from local to international, there is change in HRM practices due to difference in terms of
employment laws. Some type of international laws which can impact HRM practices and
decision-making process are as follows-
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Workplace discrimination laws- While doing business in multinational process with
divese workforce company should adhere to treat equally to maintain harmony at the workplace,
there are various laws in workplace discrimination laws which are as follows- Equal pay act- WTO and national authorities formed this law to safeguard an employee
from getting low wages in same level of authority and role and get discriminated on the
basis of gender and age and community (Haak-Saheem and Festing, 2020). Many
organisation are offering low wages to female, child and old age despite same efforts so
this law act as tool to safeguard from getting discrimination on the workplace.
 Civil rights law- Civil rights law were enacted by the parliament of UK in order to
safeguard worker from being discriminated based on colour, race, culture, religion and
sex. This law is being accepted by the both federal and state government.
Wage and hours law
World trade organisation and Fair labour standard act is established for protecting the
wages and hours of employees, under this law standard time and wage system is determine. As
per the WTO there are 40 working hours in a weak for international company and pay system
would be same as industry paying.
 Family and Medical leave act- As per this law an employee has 12 week of paid leaves
for family and medical issue which Volkswagen is obliged to pay, here HR role is to
direct and control compensation policy by adhering wages and hours law.
Data protection act- These act of employment established to protect employee data from
being unnecessary used by the third party.
 Data Protection Act- DPA come into existence to protect the privacy and integrity of
data of Volkswagen employee in which they have rights to view and change their data
and file a sue against the company if there privacy is being leaked to other party rather
than government authorities.
Immigration law- Immigration law established by the nationa and WTO to ensure that
eligible candidate from eligible country are working at the Volkswagen, so as per this law HR
personnel should make decision of hiring of international candidate based candidate eligibility to
work within the nation of hiring.
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Use corporate examples of firms using good HR practices and literature to justify your stand.
Human resource management is concerned with the all the aspects of the people working
in an organisation which includes planning of human resources, job design and analysis,
recruitment and selection, orientation, training and development programmes, making fair and
equitable remuneration, incentives, strategies for employee retention, appraisal programmes
career planning along with complying with norms and standards of company and maintaining
industrial relationship (Brewster, Mayrhofer and Farndale, 2018). Giant business firms use
different types of HRM practices so as to be unique and different from others in terms of success
and growth.
Training academies of Sainsbury : Sainsbury plc is one of the largest grocery store chain
in UK, founded in the year 1869 by John James Sainsbury. Since the beginning of its business
operations Sainsbury has been a consistent performer despite of the fact that there is low margin
in supermarket. Sainsbury ability for innovation is largely depends on its workforce and its best
HR practices. Sainsbury aims to grow and succeed along with the employees of the organisation.
Sainsbury's effective and well designed training and learning programme prepares the workforce
for meeting the best standards in daily operational activities.
Employee engagement in Marks & Spencer : Another example of best HRM practices is
employee engagement through which Marks & Spencer have gained a new height of success and
growth. Employee engagement is done by Marks & Spencer through effective communication,
as communication act as a backbone for the success and survival of any business (Banfield, Kay
and Royles, 2018). Marks & Spencer conduct, daily meeting, conference and events which
encourage participation of employees that is turn lead to the evaluation of their performance and
contribution in decision making.
Recommendation
From the above illustrated discussion it is being advised that Volkswagen should align its
HR strategies with its business strategies that is deliver effectiveness in business productivity,
company can ensure effectiveness at the workplace by creating flexible working environment
which deliver more job satisfaction and employee can create great balance between its personal
and professional life. This can be define as the HRM practices to create healthy bond with
employees and maintain employee relations. The finding of this assessment is based on
automobile sector which is purely a manufacture company where there is need of adequate
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workers, consequently to this HR personnel of the company should focus on the performance
and people management to ensure effective and efficient utilisation of the human resource to
enhance organisational productivity and profitability (Berman and et. al., 2019). Training of the
cross culture along with the necessary skills can be another future implication that Volkswagen
should consider in its HRM practices as company has multinational operations with diverse
workforce where to increase and enhance the productivity at the work, company need to
establish a feeling of self belongingness and harmony to reduces work at the workplace and
increase the performance of the company. There is seeing high attrition rate in China which is
known as the revenue hub of the company, this happen because other companies are offering
more high wages. Hence, in case company should focus on lucrative programmes such as talent
management, rewarding program and future benefits programmes to its more competent workers
which is termed as the retention strategy of the company.
CONCLUSION
Consequently, as per the carried out study it has been concluded that HRM strategies are
used by the company in order to plan, design and manage the performance and people at the
company. The following report make significant difference among HRM and Personnel
management by using 27 Storey’s 27 points of benchmarks along with the identification of the
regional and national cultural which can impact HRM practices and HR strategies. The
undergoing studies has demonstrated that when company switching its operations from the local
to international because of the globalisation there are certain employments laws which need to
consider while forming HR practices and strategies of the company. At the end, it has been
advised that a business should align HRM strategies with its business strategies to increase
performance and profitability of the company.
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REFERENCES
Books and Journals
Banfield, P., Kay, R. and Royles, D., 2018. Introduction to human resource management.
Oxford University Press.
Berman, and et. al., 2019. Human resource management in public service: Paradoxes, processes,
and problems. CQ Press.
Brewster, C., Mayrhofer, W. and Farndale, E. eds., 2018. Handbook of research on comparative
human resource management. Edward Elgar Publishing.
Haak-Saheem, W. and Festing, M., 2020. Human resource management–a national business
system perspective. The International Journal of Human Resource
Management. 31(14). pp.1863-1890.
Horwitz, F. M. and Mellahi, K., 2018. Human 17 resource management in emerging
markets. Human resource management: A critical approach, p.337.
Huemann, M., Keegan, A. and Turner, R., 2018, September. Human resource management in the
project-oriented organization. Project Management Institute.
Hussain, R. and Zeadally, S., 2018. Autonomous cars: Research results, issues, and future
challenges. IEEE Communications Surveys & Tutorials. 21(2). pp.1275-1313.
Järlström, M., Saru, E. and Vanhala, S., 2018. Sustainable human resource management with
salience of stakeholders: A top management perspective. Journal of Business
Ethics. 152(3). pp.703-724.
Kaufman, B. E., 2019. Managing the human factor. Cornell University Press.
Knezović, E., Bušatlić, S. and Riđić, O., 2020. Strategic human resource management in small
and medium enterprises. International Journal of Human Resources Development and
Management. 20(2). pp.114-139.
Kushwaha, P., Yadav, P. and Prasad, J., 2018. Impact of enterprise resource planning on human
resource management in automobile sector: Statistical analysis. Journal of Statistics and
Management Systems. 21(4). pp.601-615.
Raut, R. D.,and et. al., 2019. Examining the performance oriented indicators for implementing
green management practices in the Indian agro sector. Journal of Cleaner
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Shahreki, J., 2019. The Use and Effect of Human Resource Information Systems on Human
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Zaid, A. A., Jaaron, A. A. and Bon, A.T., 2018. The impact of green human resource
management and green supply chain management practices on sustainable performance:
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