INDU1130 International Human Resource Management And Organization’s Performance - Essay Help

Introduction

The businesses globally are highly concerned about their competitiveness and performance effectiveness which is substantially dependent on Human Resource Management (HRM) strategy of the organization. HRM plays key and vital role in attraction, retention and growth of valuable and rare human resources which serve as the core resource of organization and thus foster competitiveness in the organization. The complexity of HRM lies in the notion that businesses are operating beyond the national boundaries and thus International HRM (IHRM) has emerged which deal with people management beyond boundaries (Scullion, Collings and Gunnigle, 2007). It has been addressed by Sparrow (2018) that IHRM is not just management of expatriates, but it involves management of diverse people in international market. The researchers have highlighted the importance of IHRM by shedding light on the roles which are played by it the context of international as well as multinational businesses. IHRM enables the alignment of culture and HRM strategy with that of organizational strategy and assures that skills and expertise of human resources are well aligned with operational requirements of the organization (Shen, 2004). Likewise, IHRM assures that employees’ needs in an organization are well addressed and they are empowered to enhance their engagement and satisfaction. IHRM also encourages efforts of organization to support continuous improvements, and develops lifelong learning of employees, such that new knowledge of acquired and innovation capabilities of organization can be supported (Malek and Budhwar, 2013). Therefore, an effective IHRM has wider roles to play in an organization and it assures to adapt HRM policies with respect to changing environment, changing industry conditions and changing needs of human resources. 

Strategic Approach to IHRM: The strategic approach of IHRM focuses on the notion that HRM plays its roles to attain strategic fit, by assuring that key HRM strategies are linked with core organizational strategies and goals. Mainly, the strategic perspective of IHRM is viewed from the phenomenon of best practice, best fit and resources based view (RBV) (Morley et al., 2016). The best practice approach is based on Universality Theory (UT) which states that organizations are available with set of superior and best practices for management of human resources and adoption of these practices can drive excellence based on IHRM (Mone and London, 2018). However, this approach is subject to great criticism as it does not addresses the unique and differentiated requirements of diverse organizations and industries. Every organization has a unique strategy which is tailored to differentiated needs of that organization and adoption of best practices of IHRM might not provide integration with underlying strategy of that organization (Noe et al., 2017). Therefore, this approach is not suitable for strategic IHRM. 

On the other hand, the best fit approach is linked with Contingency Theory (CT) which states that success cannot by assures through implication of any universal prescription of IHRM and thus consideration of contingent factors is crucial to assure strategic fit and to define success of organization (Rees and Smith, 2017). These contingent factors could encompass type and size of the business, structure, culture and strategy, labor market conditions, environmental factors, skill requirement of organization and location in which organization operates (Purcell and Hutchinson, 2007). The IHRM practices which are context specific and have alignment with unique aspects of specific organization, are likely to drive high performance within that organization. Therefore, by looking at the changing context of industries and workplaces, it can be considered that by contrast to best practice approach of IHRM, best fit approach is more effective for driving performance of organization. 

The third strategic perspective of IHRM is RBV, which is concerned with the development as well as exploitation of human resources which are valuable, rare, inimitable and organize-able to drive competitiveness of the organization (Shiryan, Shee and Stewart, 2012). This perspective focuses on the notion that tacit knowledge among human resources is crucial to make them rare and valuable for the organization (Scullion and Collings, 2006). The knowledge and skills of human resources cannot be copied or imitated by the competitors and thus these resources are considered as key source of competitive advantage. 

Key Functions and their relation: IHRM is wide and diverse field which is comprised of multiple functions which are interconnected with each other. These function include, recruitment and selection, reward management, performance management, training and development, employee autonomy and empowerment, diversity management and relationship management, at large (Arnaboldi, Lapsley and Steccolini, 2015). All of these functions are highly integrated and effectiveness of one is linked with effectiveness of all functions. For instance, if recruitment and selection will not be appropriate, then talented and knowledgeable workforce will not be chosen and all other functions will be affected consequently (Ayeleke et al., 2016). Therefore, in order to assure an effective and competitive HRM system, it is crucial to assure effectiveness of each individual function of IHRM.