International HRM Practices

This report examines the international HRM practices of HSBC, a global banking and financial services company. It analyzes the HR implications of organizational expansion strategies, particularly mergers and acquisitions and wholly owned subsidiaries. The report also delves into the complexities of designing reward packages for expatriate employees and explores HSBC's compensation and reward practices in France and Spain. The report concludes with recommendations for improving HSBC's international HRM practices.

International HRM practices

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
a) Analysis of HR implications of organizational expansion strategies.....................................1
TASK 2............................................................................................................................................3
a) Complexities involved in the designing of a reward package for an expatriate employee.....3
b) Reward and compensation practices offered by HSBC in two countries...............................4
CONCLUSION & RECOMMENDATION....................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
International HRM practices consider as set of activities which focus on managing entire
activities of human resource at global level with the aim of attaining set goals and objectives.
Mainly, it is based on the way through which company can easily set their business at
international level for achieving competitive advantage from its rivals. It also defined as an
appropriate collection of practices that used by the international enterprises to manage employees
whether they are local or non-local. As per current scenario, due to increased globalization
various companies operate their business at international level with the aim of attaining global
status. Present report is based on HSBC, is famous British multinational banking and financial
service company which offer their services in over the world. In addition of this, company has
approx 3900 offices in 67 countries. HSBC is world's largest company and serving their services
to more than 38 million customers worldwide. For expand their business at global level, HSBC
use various ways such as Mergers and Acquisitions, Wholly owned subsidiaries. Both are help
company to enhance their global status and competitive image at international market (Briscoe,
Tarique and Schuler, 2012). As it also affect the HR function of company. Along with this,
various complexities are also mentioned in this report which involved in the designing of a
rewards package for an expatriate workers.
TASK 1
a) Analysis of HR implications of organizational expansion strategies
Every organization want to expand their business at global level with the aim of
enhancing their brand image. For this, company used several stages of development for attaining
global status. In context of HSBC, it operate their business worldwide and serving number of
customers in various countries. In this, company can use various organizational expansion
strategies to expand their business in another countries. These can be understood by following
points:
Merger and Acquisition: It is a process which involves combination of two companies
into one. In merger the two companies gets mutually agreed and become equal partner in order to
form new venture. Whereas, Acquisition take place when one company buys other company
(Chung, Sparrow and Bozkurt, 2014). Here the purchase of company can be friendly or can be
forcefully depends on situations. Benefits of adopting this strategy by HSBC company is that it
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can lead to improving economics of scale and at the same time also enhance the market share.
Thus, it will aid in achieving global status of the company.
In this strategy implication of HR is different different and also play a pivotal role in
managing all the issues that are arise within the organization when the merger and acquisition
process is used (Budhwar and Debrah, 2013). As HR department act like a trusted adviser to the
workers and management of HSBC. One of the main implication of HR in merger and
acquisition is to analyses management trends of two organization to evaluate that how workers
are think in companies. In HSBC, HR department should understand the working culture with
the other organization. Along with this, in case to merger and acquisition structure of corporate
and roles is totally change. For example, different team may includes for the purpose of
enhancing productivity in which the management set rid of spare position. It is process of
determining the change in working culture of both companies. In this HR come up with new
policies and also communicate to workers so that they can easily understand their new duties in
organization.
Wholly owned subsidiaries: It is a company whose 100% shares are owned and
controlled by the Parent company. The major advantage of adopting this strategy by HSBC
company is that it can easily carry out its operational activities with the help of parent company
finance resources. Additional it can get expertise knowledge and guidance by the way of parent
company. Hence it will result in successful achievement of global status in the market. The main
implication of HR on this expansion strategy is to guide and train workers global level. In this all
the decisions are based on owner of the company. Along with this, HR will suggest ways to hire
the employees in business. All the policies of recruitment and selection is set by the top level
authority of HSBC. With the assistance of this they can easily expand their business at global
level for attaining competitive advantage from its rivals.
b) Evaluate international development strategies of HSBC in two countries
HSBC is British multinational banking service company which operate their business in
various countries and also serving number of customers in over the world. In context of this,
HSBC use various strategies to develop their business at international level. As, HSBC will
expand their business in two countries such as Spain and France with the aim of attaining global
status (Caligiuri, 2014). For developing their business in France, HSBC use strategy to develop
international network in which company focus on competing their competitors by serving better
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financial services to large number of customers. This will help HSBC to attain global status and
at the same time also contribute in making their image more competitive in-front of its
competitors. This type of strategy directly affect the HR function of HSBC because it influence
entire system of the company. Thus, HR department is responsible for effectively prepare
planning process. In this they needs to consider the whole environment of market (Reiche,
Harzing and Tenzer, 2018). This will help them in increasing mortgage market share and also
grow commercial customers base. In addition of this, the another strategy which will be used by
HSBE for developing their business at international level. In this they needs to communicate
with the customer, workers and shareholders to maintain client relation for longer period of time.
Furthermore, several elements are there which help achievement of development of objectives. It
also includes enhancement of revenue growth, development in brand, management of risk and
improvement in productivity. As development of the employees skills is also important for
HSBC to ensure that all the workers can effectively understood that how they can contribute in
attaining set goals and objectives of the company.
On the other side, to invest in wealth and retail business with local scale is also an
effective strategy for HSBC to develop their business internationally. As company want to
expand their business in Spain in which they needs to invest more wealth in retail business with
local scale (Our strategy, 2018). By this company can easily serve their financial services in
local areas of Spain to invite number of customers. This strategy become more beneficial for
HSBC to develop their global status at international market. Along with this, it directly affect the
HR function of company that is organizing. In this manager of human resource is responsible for
providing training and development programs to their staff members so that they can easily
handle the local areas customers. HR also set their policies and task as per employees capabilities
at global market. Apart from this, by investing in technology and their digital capabilities is also
help in improving their customers services which directly contribute in establishing their
competitive image at global level.
TASK 2
a) Complexities involved in the designing of a reward package for an expatriate employee
There are various complexities faced by the HSBC company while designing the reward
system for expatriate employees (Janssens and Steyaert, 2012). Liberty of international
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transaction is one of the reason for fluctuation in the level and variety of rewards programmes
rendered by different nations. For example, in Hong Kong labour unions are anemic and
accordingly reward system for expatriate workers are determined with the help of free market.
As in America motivation force for employees is money, but not necessary that the same can be
a motivation tool for others international workers working in HSBC company (Thite, Wilkinson
and Shah, 2012). Thus, this type of hurdle can also be one of the complexities in designing the
reward system for expatriate employees. Additionally, the prosperity of HSCB company depends
on the proper inheritance between international human resource management and multinational
corporation plan of action. Its the duty of HR manger of MNC's to take into consideration
cultural aspect of every expatriate employees and accordingly set up the policies and operation.
This it will help the HR of MNC's in formation of expatriate employees compensations and
rewards system.
One of the best approach adopted by the US in order to overcome the complexities in
designing reward system for expatriate workers is the balance sheet approach. Its purpose is to
assure that expatriates employees neither gain nor suffer from loss in relation to the welfare they
used to receive in home-country company. The reward system programs for PCN expatriates are
more costly and complex as compared to HCN. For example, PCN acquire more edge benefits
care than TCN. Similarly TCN obtain more base remuneration than PCNs. Altering a rewards
packages among PCNs, TCNs and HCNs is totally assorted just because of differences in the
level of economic process of global community. For Example, the economic inequality between
US and underdeveloped nation economic of standard is different. Hence, HR manager of MNC's
are facing exertion in deciding TCNs expatriate hardship allowances. So while designing the
reward system for expatriate employees the HR manager of MNC's must keep in view three
aspects; that they are meeting their corporate goal at home as well as in abroad; secondly, that
they should keep on motivating in order to get rewards in form of salary increment or promotions
and lastly, that their reward system mus be complying with company monetary fund (Tangthong,
Trimetsoontorn and Rojniruntikul, 2014). Thus it can be said that healthy expatriate reward
scheme is a key to success of worldwide enterprise.
b) Reward and compensation practices offered by HSBC in two countries
HSBC which is the 7th largest bank European centred bank sets the benchmark for all the
banks while deciding about the rewards and compensation for there employees. The best way for
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any big company to do this is streamlining its employees benefits with offering them with the
plans for retirement. Here is the benefit of the joining the bank as HSBC provides you with this
type of benefits as the bank wants that there employees does not want to make employees work
for them but to work with them (Gurkov, Zelenova and Saidov, 2012). The bank has come up
with the new way to reward there employees on the basis of there career band regardless of there
job roles. The bank provides different types of incentives to there employees on the basis of
work done which include minimum target accomplishment. In preparation to make there
employees look different from other institution the bank ran a consultation process with the
employees and staff representative bodies. The bank recognises the competitive schemes to
attract the top talented people across the globe so that the talented people doesn't lack behind and
are rewarded to there satisfaction. So for the countries like FRANCE the bank provides the best
in class reward and compensation making there lifestyle go ahead of other banking industries and
providing there employees and staff with home like environment where they can learn and make
their knowledge go to new heights.
HSBC functions in the country SPAIN by rewarding employees by offering benefits to
safeguard there career during there working time to there retirement plans. They provide benefits
to there employees according to there talent so that the growth of HSBC increases by creating the
race between the employees according to there work because of this competition policy of talent
the working capacity of the employees increase (Harris, 2012). After evaluating there work they
were rewarded on that bases such as by getting compensation at the time of maternity
benefit,education benefit to there children, sick leave at the time of emergency .
CONCLUSION & RECOMMENDATION
From the above mentioned report it has been concluded that international HRM practices
are important for every business organization to manage entire activities that operate at global
level. In context of this, HSBC want to expand their business in two countries such as Spain and
France with the aim of attaining global status. Mainly two type of expansion strategies are used
by HSBC to operate their business at global level. For this they requires evaluate the whole
market environment to determine the ways to enhance their market growth at international level.
In this HR also implicate various aspects like train workers as per requirements, measure the
organizational culture in merger and acquisition expansion strategy so that they can easily
manage their image. Furthermore, there are various complexities are involved in designing of a
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reward package for expatriate employees like Liberty of international transaction, ineffective
balance in among international HRM and multinational corporation. For overcoming from all
these issues, HSBC should be adopt balance sheet approach to ensure that expatriate employees
are not suffer from any kind of losses that relate with welfare received in home country
company. Apart from this, the main recommendation for improving HR practices is that
company should prepare healthy expatriate reward scheme to workers so that they can easily
attain success at global level.
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REFERENCES
Books and Journals
Briscoe, D., Tarique, I. and Schuler, R., 2012. International human resource management:
Policies and practices for multinational enterprises. Routledge.
Chung, C., Sparrow, P. and Bozkurt, Ö., 2014. South Korean MNEs’ international HRM
approach: Hybridization of global standards and local practices. Journal of World
Business. 49(4). pp.549-559.
Budhwar, P. S. and Debrah, Y. A. eds., 2013. Human resource management in developing
countries. Routledge.
Caligiuri, P., 2014. Many moving parts: Factors influencing the effectiveness of HRM practices
designed to improve knowledge transfer within MNCs. Journal of International
Business Studies. 45(1). pp.63-72.
Reiche, B. S., Harzing, A. W. and Tenzer, H. eds., 2018. International human resource
management. SAGE Publications Limited.
Janssens, M. and Steyaert, C., 2012. Towards an ethical research agenda for international HRM:
The possibilities of a plural cosmopolitan framework. Journal of Business Ethics.
111(1). pp.61-72.
Thite, M., Wilkinson, A. and Shah, D., 2012. Internationalization and HRM strategies across
subsidiaries in multinational corporations from emerging economies—A conceptual
framework. Journal of World Business. 47(2). pp.251-258.
Tangthong, S., Trimetsoontorn, J. and Rojniruntikul, N., 2014. HRM practices and employee
retention in Thailand—A literature review. International Journal of Trade, Economics
and Finance. 5(2). pp.162-166.
Gurkov, I., Zelenova, O. and Saidov, Z., 2012. Mutation of HRM practices in Russia: an
application of CRANET methodology. The International Journal of Human Resource
Management. 23(7). pp.1289-1302.
Harris, M. M. ed., 2012. Handbook of research in international human resource management.
Psychology Press.
Björkman, I., and et. al., 2014. From HRM practices to the practice of HRM: Setting a research
agenda. Journal of Organizational Effectiveness: People and Performance. 1(2).
pp.122-140.
Chowdhury, S. D. and Mahmood, M. H., 2012. Societal institutions and HRM practices: an
analysis of four European multinational subsidiaries in Bangladesh. The International
Journal of Human Resource Management. 23(9). pp.1808-1831.
Cascio, W. F., 2012. Methodological issues in international HR management research. The
International Journal of Human Resource Management. 23(12). pp.2532-2545.
Online
Our strategy. 2018. [Online]. Available through.<https://www.hsbc.com/about-hsbc/our-
strategy>.
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