Business Environment and Employees

Human resource management is one of the essential components to the competitiveness of global firms. Corporations that perform exceptionally regarding human resource management tend to integrate strong discipline in their people with attention to strong social capital (developing networks and relationships within the organization). The multiplier impacts of this combination generate inimitable conditions for people management, which in turn drives employee engagement in the global context.

The following study focuses on the historical and current trends in human resource practices with a great focus on global HRM, equal employment opportunity and compensation and motivation. The emphasis will be laid on their influence on the management of international employees. The study will highlight the major aspects emerging from the three areas of focus. It will provide an extensive detail from real case examples of companies in the global field by examining major HRM practices including global HRM, equal employment opportunity, and compensation and motivation.

GLOBAL ASPECTS OF HRM The rapid advancements in information technology along with globalization have transformed the way employee management is carried out in organizations. This transformation defined the significance of global HRM presently unlike what was being done in the past fifty years and earlier. HRM seeks to allow proper deployment of human capital so that an organization can satisfy and maintain customers both domestic market and globally (Sparrow, Brewster, Chung, 2016). Based on the current competitive business environment, proper management of the human capital has become crucial.

As a result, the primary task of MNC thus revolves around identifying, recruiting and managing competent human resources in their operations to enhance functional efficiency and improve productivity. The foundation of political and economic forums such as the World Trade Organization and the European Union together with the rise of trade blocks has considerably altered the business environment as far as open market and competition is concerned. In essence, the business field has transformed into a global business environment.

Today, experts have influenced not only the staffing requirements and the entire labor market but also the HRM practices. Today, aspects like strategic alliances and joint ventures have become common forms of doing business across the globe. Global market, changes in business structures and high-tech communication technologies today demand new forms of HRM approaches for MNCs. Probably, the globalization of business has touched the HRM area for severely than any other functional area.

Presently, HR managers must provide international orientation to all the HR functions including employee recruitment, training, motivation, compensation, and development. Orientation within the global context has the greatest relevance because business today is increasingly interlinked between countries. Moreover, because MNCs must recruit, motivate and retain people at both the home office and overseas plants, the concept of global HRM helps them to procure properly. They must also allocate and effectively utilize human capital in the global business environment (Perkins, Shortland & Perkins, 2006).

The Concept of Global HRM Global HRM is all about managing human capital worldwide. It involves hiring, allocating and properly using their knowledge, skills, and ideas in responding to the business needs. Global HRM has been recognized as the main determinant of failure or success in the highly competitive business economy. Therefore, this has become the only source of competitive advantage because the other factors of production such as raw materials, technology, information, and capital can be easily imitated (Festing, Budhwar, & Cascio, 2013).

However, the caliber of the individuals within a company cannot be duplicated and offer a unique competitive advantage to companies. MNCs must carefully focus on their most critical resources because it controls other factors of production. However, most MNCs tend to undermine the significance of the HRM function in selecting, training, motivating and compensating employees assigned overseas. The numbers evidence the importance of these resources. Research reveals that over 40,000 MNCs are currently engaged in international business (Sparrow, Brewster, Chung, 2016).

Interestingly, modern developments in information technology have allowed these corporations to manage their global HRM function efficiently and effectively. This has served to maximize their global management cadre of these companies. When implementing the function of global HRM, planning must involve decisions about staffing policy and the global strategy. The major problem includes the challenge of controlling the geographically dispersed functions, the suitability of employees from alternative sources and the need for decision making independent from the head office.

The independence of structure, strategy, and staffing is of particular importance to the company. In essence, the company's desired strategy must direct the company's staffing models, and the structure deemed most appropriate in the implementation of the strategy. However, these functions have considerable inter-dependence. Often, the inherent structural constraints affect strategic decisions. Equally, unique sets of competencies and staffing constraints in management affect both strategic and organizational decisions.

Therefore, MNCs strive to achieve a system of fits among these factors that facilitate the implementation of the strategy (Festing, Budhwar, & Cascio, 2013). Global Selection The appointment of employees to overseas positions is one of the most complex processes. The selection criteria used by MNCs are based on the success factors like those applied in the domestic office, but additional factors are considered. These factors relate to the circumstances of the assignment.

Sadly, most HR managers are inclined to selecting potential expatriates simply according to their known expertise and domestic track records. These managers often overlook the importance of ascertaining whether the chosen employee possesses the necessary interpersonal skills and cross-cultural awareness for the assignment. Besides, necessary to evaluate if the individual's family and personal situation enable all of them to adapt to the new culture. The enhanced adaptation to the new working environment helps them to discharge their assigned roles immediately. MNCs have five groups of success for potential expatriate applicants.

They include motivational state, family situation, relational dimensions like flexibility and empathy, language skills and job factors (Podnar, Kohont & Jancic, 2012). It is difficult to establish the relative importance of each of these factors. However, the most flexible approach to maximizing talent, despite the source, is certainly to consider if the assignment could be filled by a host-country national.

Such a model of expatriate selection and training relies on the factors of the specific position like interaction level with the local employees, similarity to the candidate's own culture and length of stay. It is believed that the greater the rigorous the process of selection and training the lower the chances of expatriate failure. MNCs set up the selection procedure as a decision tree in which the progression of the next stage in the process relies on the evaluation of the critical factors about the position or the applicant.

The most basic selection procedure entails choosing a local national since they require minimal training about the local ways of doing business and culture. Nevertheless, to achieve success, locally selected candidates normally receive additional training in the MNC's companywide processes, corporate culture, and technology. In case a local candidate cannot fill the post, yet the job demands a great degree of interaction with the local fraternity, MNCs conduct extremely careful screening of applicants from other geographic regions and implement vigorous training programs.

As seen from the example of MNCs based in Asia and Europe, HR policies at all the organizational levels are influenced by the home-nation policies and culture. For example, Japanese subsidiaries operating in India and Singapore, promotion is done from within, and expectations of loyalty to and by the company are culture-based practices transferred to the subsidiaries (Kang & Shen, 2017). However, at Matsushita Electric Industrial Co., Ltd., today called Panasonic Corporation, employee selection criteria for expatriate positions is similar to those in the Western world.

The company selects candidates based on characteristics known as SMILE. SMILE is a shortened word, meaning Specialty (knowledge and skills), Management ability, International flexibility, Language capability and Endeavor (ability to persevere). Training and Development Training and preparation for cross-cultural interactions are one of the crucial areas of international HRM. Often, many expatriates end their overseas assignments abruptly due to an inability to adjust to the local environment and poor performance. In fact, those who are left reportedly function at lower levels of effectiveness.

Based on the expatriate's position, the indirect costs to the organization may be greater than projected (Sparrow, Brewster, Chung, 2016). For instance, relations with customers and the host nation government could be damaged leading to loss of market share. Things such as practical differences and cross-cultural adjustment are sources of challenges for expatriates and their relatives. Various examples show expatriates to be facing the greatest challenges in international assignments because they might have little knowledge about the new cultures.

Although cross-cultural training seems to be useful in current times, very few expatriates receive this training. Sadly, MNCs do not provide expatriates with social support or adequate training during their international assignments. The rationale provided for this lack of training is an assumption that managerial processes and skills are universal. In fact, MNCs use an employee's local track record as the main selection criteria for overseas assignments (Festing, Budhwar, & Cascio, 2013). Unlike in previous years, today, MNCs do not leave the success of expatriates to chance.

They are offering significantly more preparation and training for their expatriates than in the previous years. Hence, it is easy to recognize why today's expatriates are experiencing considerably lower cases of failure unlike in the former years. However, this could be partly because expatriates prefer to leave their families back in their home countries. Typically, today's MNCs have lower recall rates, which signify that they are sending overseas employees who are better prepared and adaptable to working in the foreign environment (Sparrow, Brewster, Chung, 2016).

Although this success has been largely attributed to training programs, it is an outcome of the intelligent HRM planning in today's MNCs. The planning process starts with a proper selection of employees for foreign posts based on their families and the long-term knowledge of the employees. Of course, a useful selection criterion starts by eliminating many possible failures. Another contributor to the success of expatriates today is the longer duration of overseas assignments that gives employees more time to adjust and function at full capacity.

Moreover, today's MNCs give their expatriates significant support, and they even set up local divisions to serve this purpose. A good example here is the NEC Corporation, whose strategy is the permanent boot camp. The boot camp strategy offers an elaborate training to prepare NEC expatriates and their families for foreign battle (Kae, 2012). The demands on expatriates have always resulted from the multiple relationships, which must maintain because they are of differences in the host national context.

Some of these relations include internal relations with company members, family relations and external relations with for example the local community, customers and the suppliers. Any organization must identify some of the problems likely to be encountered by the expatriate for it to be addressed during the training. Problem identification marks the first step in a comprehensive expatriate training program. Other areas of the preparation program include language instruction, cultural training and familiarity with the local lifestyle.

EQUAL EMPLOYMENT OPPORTUNITY The concept of equality has been desired in various sectors of the society for many years. This extends to include employee management in various organizations globally with a great focus on employment opportunities. For years, world countries have endorsed laws promoting workplace diversity. Although the concept of diversity management is a typical imperative for MNCs, the evolution of regulatory and legal developments reflect a landscape occupied by multidimensional and varied approaches (Kang & Shen, 2017).

Previously, various world regions have recorded unique successes in the achievement of equal employment opportunity and diversity management. Whereas majority of the Fortune 500 firms in the US have implemented diversity programs, the European Union has led the initiative to attain gender parity in corporate management. In this view, Asian countries have even set progressive quotas aimed at increasing the representation of the personnel with some physical challenges. This evidences how countries have undertaken initiatives to foster equality in the global workplace.

Globalization has enabled many corporations to establish their operations in many countries as long as their resources can permit. This renders diversity management and equal employment opportunity not only issues of strategic significance but also drivers of competitive and economic success. Equality in the workplace implies the access to learning opportunities, resources, and interest in legitimate heterogeneous societies. Besides, it infers that companies enjoy added value in setting themselves apart from the competition (Kang & Shen, 2017).

Besides being influenced by business incentives, diversity initiatives are commonly imposed as equal employment opportunity, aimed at eliminating stereotypes and prejudices that historically have restrained the represent representation of minority groups. In recent years, we have witnessed the proliferation of public and private diversity initiatives courtesy of these complementary forces. Recent Diversity Initiatives Positive discrimination Although many nations have passed legislations that prohibit discrimination in employment, some jurisdictions have achieved further steps by passing laws that promote positive discrimination.

Positive discrimination occurs when certain groups are favored to rectify the existing imbalance that is against them. For example, in the United Kingdom, the Equality Act of 2010 requires that all employers implement positive action in their recruitment processes (Marston, 2007). The Act encourages companies to give an advantage to applicants if the company has reason to believe that the candidate suffers a disadvantage linked to the protected factor.

In essence, the idea is that positive discrimination will encourage or enable individuals who share the protected feature to minimize or overcome that disadvantage. In 2007, South Africa passed a similar law (Marston, 2007). Moreover, the EU has endorsed various regulations allowing the Member States to participate in taking positive action to promote equal employment opportunity. India embraced a reservation program and constitutional basis used in the allocation of a portion of the public service jobs for traditionally under-represented communities. Such groups include some religious minorities and castes.

Equally, Nigeria and Malaysia adopted affirmative action programs in the recruitment of public servants to achieve the desired ethnic balance. However, on the contrary, the US Supreme Court has rejected outright quota initiatives where the agenda is to for companies to conceal the determinations about their national origin, sex, race and other protected classes (Kang & Shen, 2017). While the properly represented groups like the white males are likely to argue a case of reverse discrimination as supported in Title VII, companies should strive to create diversity programs (Marston, 2007).

This will help them avoid legal accusations by employees who may perceive to have been excluded or disfavored by the company. To complicate the matter further, the Federal Contract Compliance Office has set some regulations requiring contractors to benchmark, take positive action and inquire to ensure equal employment opportunity and proper representation of individuals with disabilities. For companies interacting with the finance industry, the Dodd-Frank Act has established an office to ensure and monitor fair inclusion of women and minorities for each company operating in the US.

Pay Equity Regulation Equal compensation for men and women has become not only a common theme in most countries today but also a hotly contested topic globally. Concerning pay disparity, gender is the main cause of the widest gaps of any protected characteristic. In the US, issues of equal pay dominated political debate in recent years. In 2009, former President Barack Obama endorsed the Lilly Ledbetter Fair Pay Act whose aim was to supplement the current pay equity legislation (Marston, 2007).

This Act has successfully extended the time where an employee can present an equal pay discrimination charge. Besides, the country has introduced other laws aimed at minimizing discriminations regarding pay where women and people of color or disabled were largely affected. Sometimes, countries confront issues related to pay disparities. Although the EU's foundational, treaties guarantee equal compensation of equal value for all employees, the disparity between men's and women's earnings throughout the entire EU remains (Tahira, Shah, Fida, & Khalid, 2014). However, recently, some Member States introduced remedial measures.

France has passed a law, which requires companies to develop frameworks for eliminating pay disparity by 2010 (Williams, 2012). UK's Equality Act of 2010 obligates corporations to disclose their pay details. The intent of this move is to reveal gender discrepancies. Until today, the issue of equality in compensation has garnered attention even outside the EU Member States. For instance, in the Philippines, the parliament recently approved a bill that would ensure women are protected from discriminatory compensation practices in all facets such as employment, benefits, salaries and wages.

Sexual and Moral Harassment Policies There has been a current uptake in moral and sexual harassment legislation. This serves adequate evidence in the increased focus on sensitivity and diversity awareness in the global workplace. Taking India as an example, developments are focused on gender programs. The Indian Supreme Court acknowledged the legal statuses and rights of transgendered persons as the third gender by enacting far-reaching sexual harassment laws. This law mandates various penalties and workplace committees protecting women from forced sexual advances, conduct and comments in the office.

The uniqueness of this law rests in the fact that it covers third parties in the office, among them daily wage workers, customers, and even clients. Another interesting point is the current passage of various sexual harassment laws in most world nations, which have never historically concentrated on such issues. For example, recently, China passed progressive laws, which provide sexual harassment victims a case of action. The country had further amended its Women's Protection Act to ban harassment in the workplace.

However, this Act has not imposed responsibilities on employees to prohibit harassment. In fact, the Special Occupational Protection for Female Employees provision under the Chinese Tort Law has taken effect and gave workplace harassment victims a mechanism to redress their case. With these laws, unless the company creates an anti-harassment policy, it will be held responsible for intentionally and negligently failing to prevent harassment, which it should have known or knew occurred (Williams, 2012).

Some progress has also been seen in the area of antidiscrimination programs protecting the lesbian, gay, bisexual and transgender (LGBT) workers in the global workplace. Europe's Charter of Fundamental Rights was the pioneering global instrument to incorporate the phrase sexual orientation openly. This was followed by the European Commission Treaty's Article 13, which bans discrimination on the ground of sexual orientation. However, EU Member States differ regarding how they apply this law.

As for the UK, the Equality Act has ruled that unfavorably treating LGBT employees, based on sexual orientation is outright discrimination. The provision on antidiscrimination applies to all employment areas such as pay, recruitment, transfers, dismissal and training. Similarly, Germany's Equal Treatment Law defines sexual orientation to include discrimination against lesbian, gay, and bisexual employees. Sadly, these provisions starkly contract the laws of various nations that legally prohibit homosexuality. Such countries include Algeria, Singapore, and Libya, where companies are legally permitted to discriminate on the grounds of sexual orientation (Marston, 2007).

COMPENSATION AND MOTIVATION Global compensation usually involves two areas; managing highly turbulent and complex local details while at the same time upholding a strategic pattern of compensation practices. For MNCs to achieve success in their compensation and motivation, they must understand things such as customs, taxation law and employment practices of various other nations. It is also important to gain knowledge of the currency fluctuations in these countries and the impact of inflation on employee compensation (Tahira, Shah, Fida, & Khalid, 2014).

This will help them to appreciate the importance of special allowances depending on their jurisdictions. Components of International Compensation Base Salary From the local perspective, base salary means the amount of money paid as a benchmark for other compensation aspects like benefits and bonuses (Williams, 2012). In the case of international compensation, the base salary serves as the primary element of the package of allowances, most of which have a direct link to the base salary like the housing allowance and cost-of-living allowance.

MNCs may pay the base salary in the form of local or home-country currency (Festing, Budhwar, & Cascio, 2013). Therefore, the base salary is perceived as the cornerstone for international compensation. However, there may be great differences depending on if the base pay is connected to the assignee's country of origin or if the company pays an international rate. Benefits Global benefits contain some inherent complexities, which normally yield more difficulties unlike in compensation.

It is hard for companies to deal with pension plans on a country-to-country basis because of the varying national practices. Transportability of medical coverage, pension plans, and social security benefits are challenging to normalize (Tahira, Shah, Fida, & Khalid, 2014). MNCs are forced to overcome various challenges when dealing with benefits. Such issues include whether or not to keep expatriates in country-of-origin programs, especially when the company is not receiving tax deductions for doing this. Different countries have varying laws that govern the private benefit practice.

Therefore, this means that company practices equally differ. MNCs are doing a perfect job of planning the retirement needs of their parent country national (PCN) employees. When using third country national (TCN) employees, the care is usually different. Besides the already highlighted benefits, MNCs also give special leave and vacations (Marston, 2007). When presented as the employee's regular vacation, the annual leave normally offers transport for families to visit their home country.

Rest leave, according to the host country conditions offers the employee and immediate family members with free air transport to comfortable destinations near the host country. There are also emergency provisions in cases such as illness or death in the family (Kim, Pathak, & Werner, 2015). Often, assignees in hardship conditions receive extra rest periods and leave expense payments. Approaches to International Compensation MNCs use two major modes in their international compensation. They include the going rate approach and the balance sheet approach.

The Going Rate Approach The pay structure links the base salary for the expatriate to the salary structure in the host nation. Usually, MNCs obtain information from the local compensation surveys and uses expatriates of the same nationality as a reference point regarding benchmarking (Festing, Budhwar, & Cascio, 2013). For instance, Chinese Bank in the US must decide whether the reference point would be the Chinese competitors in the US or the local US salaries.

However, with this pay structure in a low-wage region, MNC normally supplement the basic salary with extra payments and benefits to motivate the assignee. The Balance Sheet Approach The primary goal is to ensure the expatriate maintains the home-country living standard by keeping the employee whole (Gibson et al.