Human Resource Management Designing Workforces

Question: Discuss about the Human Resource Management for Designing Workforces. Answer: Human resource management is an approach that helps business organisations in managing their workforce using different concepts, such as compensations and benefits, performance management, performance appraisal, training and development. In the past few decades, business organisations have come to realize that the well-being of their human resource is very important if they want to achieve market success and competencies (Inc.com, 2016). As a result, human resource management is now considered as an important part of every business organisation and companies are spending millions of dollars every year to effectively manage their human resources. Even though a lot of stress is now being laid upon the management of human resource, the human resource management issues or challenges that multinational organisations face are still on the rise. Multinational organisations are those companies that have their work operations in more than country. For multinational companies, management of hu man resources is a big issue because it has to manage parent country employees, host country employees as well as third country employees. As a result, the concept of strategic human resource management is all the more important for the multinational companies. At present, China is one of the leading countries in terms of business. Companies from all industries and countries are either setting up their manufacturing units in China or are outsourcing their manufacturing processes from the country. Due to availability of cheap products and labour, China is being considered as one of the most suitable countries for business operations. Let us discuss the issues that the country is facing and is likely to face in the future when it comes to the management of human resources: China is a land of diverse cultures. The cultures followed in the country are deeply rooted and the Chinese do not easily accept the culture of any other person. In fact, China is a country where English is still not considered to be important or a default language for business dealings. The differences in culture and the tendency of the Chinese to stick to their culture alone and not accept the cultural values of anybody poses a great challenge to the multinational companies that plan to enter the Chinese market in the near future. Difference in cultures has also been identified as a major source of attrition, especially after multinational companies have entered into business with Chinese companies through mergers and acquisitions (Wang Nishiguchi, 2007). The second and so far, the biggest issue to HRM that has been identified in China is the lack of skilled workers. China is the largest populated country in the world with a total population of 1.3 billion but multinational compan ies are still finding it difficult to recruit talented managers for their business ventures. According to a report prepared by the China Economic Review, the imbalance that exists between the business opportunities in the country and the presence of qualified executives will get worse in the future before it can get better. Further, a survey, which comprised of US multinational companies operating in China as the respondents, concluded that 37% of the companies felt that recruiting talent was one of the biggest issues while expanding their business operations in the country (Bacani Peavy-Sima, 2006). The reason behind the lack of talented workforce is that during the cultural revolution of 1966-1976 in the country, universities and educational institutes were shut down. As a result, a complete generation of managers and talented employees was lost due to lack of education in that particular period. Thus, the lack of talented employees will still prove to be a challenge for the mult inational companies that are planning to expand their operations in China in the near future. Another major issue that the multinational companies are facing while operating in China is the difficulty in firing employees. In case employees are not following a companys rules or are underperforming, it is not easy for the company to fire an employee. After the introduction of Chinas 2008 Contract Law, it has become very difficult for the companies to terminate a Chinese employees contract if the company does not has a string evidence of underperforming or wrongdoing. In the recent years, multinational companies that have fired employees on basis of underperformance or wrongdoings have been subjected to a number of lawsuits. Therefore, it will continue to be an issue for multinational companies operating in China. Australia is another country that has too many business opportunities for multinational companies. It has one of the largest mix markets economies in the world and has a GDP of AUD$ 1.62 trillion as of 2015. The economy of Australia is dominated by the service sector, which contributes 68% towards the GDP of the country. Let us now discuss some challenges that multinational companies operating in Australia are likely going to face in the coming years: Attrition is defined as the rate at which employees quit a business organisation. Attrition rates are always a matter of great concern for the management of business organisations as higher attrition rates mean a lot of trouble sooner or later. In Australia, attrition has been a matter of great concern for almost all companies, whether local or multinational. Companies have been trying their best to provide value to their employees so that they can be retained and company can save itself from loss of important resources. Therefore, for multinational companies, attrition rate still poses to be a great issue and will continue to do so in the next few years (HR Online, 2016). Companies operating in Australia have been trying their best to build a culture where the employees can show a greater feeling of engagement towards the organisation and their work. Companies have also been trying to establish such a culture to bring down the attrition rates and ensure higher employee retention. Therefore, somehow interrelated, building a culture where the employees show a greater degree of engagement towards the jobs and organisations will still remain to be a great issue for the multinational companies that want to expand their operations in Australia (HR Online, 2016). Human resource management is of two type i.e. domestic and human resource management international human resource management and it is obvious that the management of human resources at an international level is way more difficult than the management of human resources at a domestic level. During the management of human resources at an international level there are a number of additional factors that come into play, such as expatriate management programs, cultural integration, etc. As a result, there are a number of issues that the companies face while expanding their business operations in other countries. Australia and China have a lot of opportunities for business owners but the management of human resources in these countries will never be free from challenges for multinational companies. References: Wang, J. Wang, G.G. (2006), Exploring National Human Resource Development: A Case of China Management Development in a Transitioning Context,Human Resource Development Review,Vol. 5, No. 2, pp. 176-201. HR Online. (2016). HRs burning issues. [online] Available at: https://www.hcamag.com/hr-resources/hr-strategy/hrs-burning-issues-113449.aspx [Accessed 16 Aug. 2016]. Inc.com. (2016). Human Resource Management. [online] Available at: https://www.inc.com/encyclopedia/human-resource-management.html [Accessed 16 Aug. 2016]. Nelson, S. (2015). Designing Workforces for Human Resources. 4th ed. HRM online. (2014). Perspective: 7 major trends and challenges - HRM online. [online] Available at: https://www.hrmonline.com.au/section/featured/perspective-7-major-trends-challenges/ [Accessed 16 Aug. 2016]. Bacani, C. Peavy-Sima, K. (2006), The great buy-out: MA in China,The Economist Intelligence Unit.