Organizations that are expanding globally can find themselves facing two major obstacles: HR professionals without international competencies and an overall lack of the knowledge needed to conduct HRM effectively in new locations.
Global and cultural effectiveness has been identified as one of the core competencies in the SHRM Competency Model, yet, according to Harvard Business Review’s "What Separates Great HR Leaders from the Rest," there is a substantial gap between the ability of top HR leaders to connect their organization to the outside world and the ability of most other HR leaders.
Learning from mistakes
For a skilled HR professional, HRM in the local office can be relatively easy. You understand relevant regulations, legislation, and best practices, and you generally have a good idea how employees will react to HRM initiatives that you implement—but not always. You may, for example, notice that some of your employees aren’t reacting in the way that you had anticipated after you introduced a new incentive program. You thought that the new benefit of increased pay based on superior individual performance would be a great motivator; you did your research and learned that this type of compensation is considered to be a best practice by many reliable sources.
But now that the new practice has been in place for a few months, you’re noticing that while performance for some employees has increased, for others it has had no effect or even a negative effect on performance. You dig a little deeper and notice that the employees reacting best to the new incentive system are all “locals,” whereas your employees with international backgrounds (who, you note, are making up an increasingly large part of your workforce) do not seem to like the new way in which pay is allocated based on their individual performance. What’s happening?
National and cultural differences
Employees from different cultures have unique sets of values and beliefs that can influence how they respond to HR initiatives. For example, the United States is an individualistic society, and many Americans are very driven to achieve their personal goals (and in this example, highly motivated when told they can earn more money if they perform better as an individual). Other societies, including those from many Asian and Latin American countries, have a much stronger collectivist orientation. People from these cultures are more likely to believe it to be important not to stand out through individual achievements, but rather to ensure that you are working collectively with your colleagues to achieve shared goals. Individuals from these countries are, therefore, less likely to be motivated when told they are competing against each other to achieve higher pay.
Of course, cultural stereotypes are ultimately just that, stereotypes, and it does not mean that every person you meet from the United States will behave in an individualistic fashion, nor every person you meet from China will be more likely to succeed in a collectivistic working environment. But generally, these tendencies can be consistently noted across different cultures.
Why HR should care
If you transfer all your HRM practices from your U.S. headquarters and implement them in your internationally based operations, you are going to hit some very severe roadblocks. Employee reactions to your HR practices may vary substantially, and you could find your business failing.
Developing global HR competencies
If you want your organization to succeed on a global scale, it is critical to develop the global competencies of your entire team. The more you understand the different ways HRM is conducted in different countries and cultures, what laws are in place, and how employees can best be motivated and engaged, the better you will be at designing appropriate policies and practices for your expanding organization.
The Penn State School of Labor and Employment Relations (LER) offers a Master of Professional Studies in Human Resources and Employment Relations (HRER) online through Penn State World Campus. This program gives you the option to elect a concentration in International HRER. The school of LER also offers a Graduate Certificate in International Human Resources and Employment Relations (IHRER).
Both the HRER degree and the IHRER certificate can equip you with the tools and knowledge needed to compete in the growing global market by focusing on differences in culture, expectations, laws, policies, practices, and perspectives as they apply to human resources and employee relations within multinational organizations. Moreover, all Penn State World Campus degree programs are backed by rigorous academic research conducted at a top-tier university.
Learning about HRM in other countries
Once you have developed your global HR competencies and you understand generally how HRM practices can differ from country to country, you then need to explore these differences relative to your organization’s operations. Who can you ask if you want to open a new office in Germany? What regulations do you need to follow? What HRM practices motivate German employees? CRANET, a global network of HRM academics, can help.
Every three to five years, CRANET conducts an in-depth survey of HR professionals from more than 40 countries, tracking how HRM is evolving on a global scale. The latest CRANET survey results are available in a report that provides an overall picture of HRM in a wide range of organizations. The executive summary (PDF version) is available as a free download. Please contact [email protected] if you are interested in receiving a copy of the full report.
The survey includes items related to the strategic orientation of HR departments and covers all major areas of HRM activity, including recruitment, selection, performance management, training/development, compensation/benefits, and employee communication. The latest results, for example, indicate the increasing strategic influence of HR in U.S. organizations:
If you would like to benchmark your organization against other U.S. or international firms, learn how HRM is conducted in a new country, or learn more about participating in the current round of the CRANET survey, contact [email protected]. Please note that survey participation is limited to organizations within the United States with 200 or more employees.