Managing HRM Challenges in Multinational Organizations: Issues, Rewards, and Performance

HUMAN RESOURCE
MANAGEMENT

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Contents
INTRODUCTION.................................................................................................................................1
Issues that confronts HRM....................................................................................................................1
The message Tesco wants to convey through its reward approach........................................................3
Effect of reward strategy on Individual performance............................................................................5
Suggestions for improvement................................................................................................................6
Conclusion.............................................................................................................................................6
REFERENCES......................................................................................................................................7

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INTRODUCTION
Multinational organisations is facing many types of challenges in managing their human
resource. There are several reasons for companies facing these issues. MNC had to manage
people from different sections of the society and from different cultural backgrounds (Chung,
Bozkurt and Sparrow, 2012). Since the cultural background and economic diversification in
the societies differs from country to country hence MNC’s had to face different kind of
challenges from one country to another. This report highlights the issues faced by the MNC
while managing HRM in two distinct countries.
Issues that confronts HRM
The major issue that confronts the HRM operations of MNC is the fact that HR policies are
different in all the countries. The first thing that needs to be checked is the fact that
multinational firms have their own policies and recruitment procedures. Some companies hire
through technological mediums and some prefer it through traditional mediums. For instance
America is a technologically advanced country hence the recruitment and selection procedure
is done through technological mediums while in the countries like Bangladesh Company
prefers to do direct interviews (Hearn, Metcalfe and Piekkari, 2012).
Another major issue that company faces is the fact that there is a difference in the
employment laws along with industrial relations systems. Both have a strong impact on
managing the business operations. This is because a healthy work environment gets created
by the company’s following it. The MNC’s that are following these laws are less likely to
face any kind of strategic challenges. For a MNC following the difference in employment
laws can be difficult as they had to hire legal personnel from that country so as to comply
with all the legal laws in different sectors. Apart from this, the power of employee union
differs and hence it is difficult for IHRM to manage their relations with employees ( Caldas,
Tonelli and Lacombe, 2011). This is because the IHRM practices might not be socially or
legally accepted in both the nations and the employees in both the nations might have
different set of demands. For example in Japan there is provision of 16 hours working but the
same company when it will work in United Kingdom cannot force the employees to work
more than 8 hours.