Human Resource Management in an Emerging Economy
Abstract
International human resource management involves moving the activities of recruitment, training, selection, and performance of an organization’s workforce at the international level. This study is aimed at analyzing international human resource management in an emerging economy. The nature of human resource management in emerging economies bases on the traditional practices associated with human resource management. Nigeria is one of the emerging economies that have been witnessing changes in human resource management in the recent past. The study further assesses the factors that lead to the need for international human resource management. The factors that lead to a need for international human resource management include globalization, economies of scale, standardized human resource rules, as well as brand maintenance. Additionally, the different theories and models of human resource management are analyzed. The fundamental theory associated with the start of social resource theory is the Harvard Analytic framework that was introduced at the Harvard school. However, several other models and theories have been developed owing to the changes in human resource management over the years. The study further compares the development of cultural business models and modern business problems.
Table of Contents
Human Resource Management in Nigeria. 5
Human Resource Strategies and Practices. 7
Standardized Human Resource Policies. 8
Human Resource Theories and Models. 9
Cultural Models and Modern Business Problems. 11
Introduction
International human resource management involves moving the activities of recruitment, training, selection, and performance of an organization’s workforce at the international level. The primary role of human resource management is to organize the operation of an organization’s human capital. However, an organization may decide to spread its business across borders, and international human resource comes in. Besides, an organization cannot use the employment policies of one country in a different country. Therefore, global human resource management has to come in to save organizations involved in international business. Multinational companies are the most operating avenues for international human resource management. The operation of international human resources is similar to that of domestic human resource. However, some differences exist between international human resource and human resource.
Human Resource Management in Nigeria
International human resource happens in three stages of personnel management. The home country employees include personnel from the country of origin for the hiring firm. Second, the host country employees include staff in the country of operation for the subsidiary company. Also, international human resource management covers personnel from other countries, referred to as third-country employees. With the development of technology, human resource management has gone through several changes. However, emerging economies have been lagging in terms of incorporating technology into human resource management. The nature of human resource management in emerging economies bases on the traditional practices associated with human resource management (Ogunyomi & Bruning, 2016). Nigeria is one of the emerging economies that have been witnessing changes in human resource management in the recent past.
Background
After attaining independence in 1960, Nigeria has been through a series of political and religious unrests that have led to slow economic growth. The rate of economic growth in Nigeria has not reflected the high expectations from different individuals due to the availability of several natural resources. However, the human resource sector has not failed to grow despite the challenges posed by the rate of economic growth (Noe, Hollenbeck, Gerhart & Wright, 2017). Organizations have grown their personnel over the years with globalization coming in to impact the way business is conducted in the country. The impacts of globalization have necessitated the introduction of international human resource management to deal with the problems associated facing human resource management.
Human resource practitioners have been forced to adapt to international standards of personnel management in a bid to incorporate the fast-growing globalization of business markets. Nigeria accepts the existence of both domestic and international human resource management. The difference between domestic human resource management and international human resource management in Nigeria occurs in terms of the duties associated with each. For example, internal human resource management deals with employees below the national level. On the other hand, international human resource deals with both domestic and international employees. The international employees covered under international human resource management include both employees from the host nation and other countries.
This study discusses the practices and development of human resources management, with Nigeria being the country of reference. The sections to be covered are the strategies used by organizations that operate across borders and human resource activities that meet international labor needs. Also, human resource theories and concepts employed at international levels, as well as a comparison between cultural models and the modern business problems in human resource management will be covered.
Human Resource Strategies and Practices
The development of international human resource does not differ significantly across countries. The activities involved in global human resource revolve around the three stages of international human resource: home country employees, host country employees, and third-country employees (Brewster, Vernon, Sparrow & Houldsworth, 2016). The similarity of international human resource management is caused by the factors that lead to the need for international human resource. The factors that lead to a need for international human resource management include globalization, economies of scale, standardized human resource rules, as well as brand maintenance.
Globalization
Globalization is based on the homogeneity that comes along with the movement of people and ideas across borders. The movement of people specifically impacts the behavioral patterns in different countries. Nigeria has not been left behind by the impacts of globalization. For example, a Nigerian company willing to expand its business to Europe may have challenges in adapting to the HR requirements in Europe. Therefore, Nigeria has decided to accept the international human resource policies that control the operation of personnel across boundaries. The use of international human resource practices saves organizations from the burden of adapting to the policies of the host countries. Also, Nigerian companies do not face difficulties as in the past while employing third-country employees. Generally, globalization has necessitated the movement from pure domestic human resource management to a combination of domestic and international human resource management.
Economies of Scale
Economies of scale come in to save countries from the costs of developing different operating systems in every country where business moves to. Nigeria has been at the forefront in adapting to international policies controlling human resource management (Oke, 2016). The move to standardize the international human resource management policies helps the organizations to benefit from economies of scale. The costs that would be spent in coming up with policies to suit every country are used for other productive activities. Besides, the use of international human resource management policies brings out flexibility for Nigerian companies. Companies can transfer employees across countries without worrying about the change in human resource policies.
Standardized Human Resource Policies
Labor costs have been the leading challenge hindering companies from spreading across borders. The development of international human resource management in Nigeria presents a solution to such a problem. Specific human resource policies have been standardized to cut on labor costs from adapting to new policies. Setting up new human resource departments is always costly, even for large companies. Therefore, several companies have decided to align themselves with the standardized policies in a bid to cut on such costs. Generally, the cost of establishing new human resource departments for every new business has forced companies into moving for international human resource.
Brand Maintenance
One of the driving forces towards the success of a company is the ability to maintain the brand. The international human resource helps in keeping the brand image of a company while spreading across borders. The adherence to international HR policies gives the country a better chance of having a uniform personnel performance across all the nations of operation. However, brand maintenance is sufficient if the company in question has maintained a sharp brand image.
Human Resource Theories and Models
The idea of human resource has been in existence for some time. The late years of the 20th century saw drastic changes in the organization leading to the introduction of human resource. Generally, human resource is associated with the introduction of machines (Morschett, Schramm-Klein & Zentes, 2015). The technological revolution led to a drastic improvement in the levels of production. Therefore, organizations and companies needed more labor at lower costs. Human resource management was the solution found to the problem of rising demand for affordable work. Several theories have been developed to control the operation of human resource management. The primary reason given for the development of human resource management is the need to usher in the industrial revolution. The fundamental theory associated with the start of social resource theory is the Harvard Analytic framework that was introduced at the Harvard school. However, several other models and theories have been developed owing to the changes in human resource management over the years.
Harvard Analytic Framework
The 20th century was a busy century for the economic sector. Several revolutions led to changes that impacted the behavior of companies in the production sector. The revolution in the field of machines led to a drastic increase in the level of production by companies (Budhwar, 2016). The improved production came along with an increased demand for affordable labor. Also, the industrial revolution led to changes in the way in which companies were managed. The human resource sector had to be changed to suit the different changes in the business sector. The Harvard Analytic Framework dates back to 1980 when a study program was introduced into Harvard School to deal with the study of human resource management. Human resource management had initially been introduced in the US, but the active introduction of the concept had not been defined. The Harvard Analytic Framework came in time to form a basis from which other theories and models on human resource management would be developed.
Harvard Analytic Framework used the assumption that human capital was a strategic resource. Also, the Harvard Analytic Framework was aimed at promoting teamwork as a strategy for building a reliable human resource. The Harvard framework appears to be heavily related to the functions of human resource, although the interrelationship of concepts forms a basis for objectives of human resource. Generally, the Harvard Analytic Framework is the foundation for the other theories that have been developed in the field of human resource.
The Matching Model
The effectiveness of a human resource department succeeds depending on the undertaking of its duties. The functions of human resource management are assumed to be interdependent. Therefore, the success of any function relies on the success of the other roles (Collings, Wood & Szamosi, 2018). The matching model outlines five crucial functions of human resource management that should be combined for a successful human resource department. According to the matching model, the functions of human resource management are selection, performance, appraisal, development, and rewards. Each of the tasks is equally important, and a company should give equal attention to all. Also, the functions are interrelated, and a company has no choice but to give attention to all the functions. The matching model attempts to define all the functions of human resource management and utilize them comprehensively. Eventually, the matching model has ended up being referred to as the descriptive theory of human resource management.
Universalistic Theory
The universalistic theory is concerned with the best practices for an organization. An organization is required to engage in practices that improve the general production. According to the universalistic theory, human resource practices are directly proportional to the performance of the company (Onnis, 2019). A company that effectively considers the functions of human resource is bound to become successful. Besides, the best practices are defined as the ones that are applicable and equally successful. Additionally, the theory defines an organization’s success in terms of financial aspects such as profit and share capital. Generally, the universalistic theory is associated with the practices that are universally applicable and end up benefiting the organization.
Cultural Models and Modern Business Problems
Traditionally, human resource management was based only on the five functions specified by the matching model. Companies did not have other functions related to human resource management except selection, performance, appraisal, development, and giving rewards (Analoui, 2017). However, the emergence of various problems in the economic sector has led to a change in the functionality of human resource management. Modern problems in the human resource practice have called for modern solutions, and thus, human resource managed has entirely changed.
Level of Production
Production forms the basis of the development or fall of an economy. Poor production is associated with a society full of low earners and dependants. Also, the masses are at risk of leading low living standards. On the other hand, high production leads to a flourishing economy with most of the masses leading high standards of living. However, high production may lead to inflation if capital is not managed correctly. Therefore, human resource management is always in action to ensure that production is maintained at manageable levels. The modern methods of production are associated with high productivity, and thus, modern human resource production has changed to incorporate the high level of production.
Health and Safety
The advancement in time has seen several improvements on humanitarian advocates. Human rights have formed the basis of operation for different sectors. Also, organizations have had to adapt to human rights requirements (Zhong, Wayne & Liden, 2016). The human resource management is at the center of the human rights question. Therefore, human resource management has changed significantly to incorporate the rights of employees as well as remain in line with international employment policies. Besides, different ailments have emerged, forcing individuals to be cautious of the lifestyles they lead. Human resource management has been changing to consider the health and safety measures for the employees in different organizations. Generally, the issue of health and safety poses a challenge in that human resource management has to incorporate both into practice without affecting the level of production negatively.
Labor Regulations
The modern regulations are different from traditional regulations. Regulators have entered the market and changed the way activities are conducted around personnel management. Human resource management has had to change in line with the changing regulations. The changes in regulations have brought several challenges with human resource management having to adapt to the different regulations. International human resource management, however, overcomes such challenges by developing standard regulations to be used across borders.
Conclusion
The operation of international human resources is similar to that of the domestic human resource, although some differences exist between international human resource and human resource. The nature of human resource management in emerging economies is based on the traditional practices associated with human resource management. Nigeria is one of the emerging economies that have been witnessing changes in human resource management in the recent past. Human resource practitioners have been forced to adapt to international standards of personnel management in a bid to incorporate the fast-growing globalization of business markets. The emergence of various problems in the economic sector has led to a change in the functionality of human resource management. Modern problems in the human resource practice have called for modern solutions, and thus, human resource managed has entirely changed.
References
Analoui, F. (2017). Politics of Strategic Human Resource Management: A’Choice’Model. In The Changing Patterns of Human Resource Management (pp. 13-31). Routledge.
Brewster, C., Vernon, G., Sparrow, P., & Houldsworth, E. (2016). International human resource management. Kogan Page Publishers.
Budhwar, P. S. (2016). International human resource management. In Encyclopedia of Human Resource Management. Edward Elgar Publishing Limited.
Collings, D. G., Wood, G. T., & Szamosi, L. T. (2018). Human resource management: A critical approach. In Human Resource Management (pp. 1-23). Routledge.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management (pp. 978-3658078836). Springer.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Ogunyomi, P., & Bruning, N. S. (2016). Human resource management and organizational performance of small and medium enterprises (SMEs) in Nigeria. The International Journal of Human Resource Management, 27(6), 612-634.
Oke, L. (2016). Human resources management. International Journal of Humanities and Cultural Studies (IJHCS) ISSN 2356-5926, 1(4), 376-387.
Onnis, L. A. (2019). An Integrated HRM Framework for Remote Managers. In HRM and Remote Health Workforce Sustainability (pp. 121-133). Springer, Singapore.
Zhong, L., Wayne, S. J., & Liden, R. C. (2016). Job engagement, perceived organizational support, high‐performance human resource practices, and cultural value orientations: A cross‐level investigation. Journal of Organizational Behavior, 37(6), 823-844.