INTERNATIONAL HUMAN RESOURCE STRATEGY

Evaluating an International Human Resource Strategy

Evaluating an International Human Resource Strategy

Introduction

The field of international human resource management (HRM) has been defined as 'the pattern of planned human resource deployments and activities intended to enable an organisation achieve its goals', or 'organisational systems designed to achieve competitive advantage through people'. Both definitions reinforce the notion that HRM practices create valuable resources within the firm that are capable of producing competitive advantage through people. Indeed, more than two decades of research has accumulated a vast body of knowledge which suggests that HRM practices that impact the motivation, knowledge, skills, and behaviours of employees lead to better employee, organisational, and financial outcomes.

In order to explain such linkages between international HRM practices and mixed dimensions of organisational effectiveness, strategic HRM researchers have drawn on theories that originated in fields as diverse as strategy, sociology, psychology, and economics, reflecting, in part, the multi-disciplinary nature of this field.

Universalistic Perspective

The universalistic perspective suggests that there is a set of practices which regarded as 'best practices in HRM' and work in all organisations regardless of context. Essentially, this perspective suggests that some HR practices are simply good practices and all firms should use them. Practices such as selectivity in recruiting and selection, employee involvement, teams, flexible work assignments, job security, training and development, and incentive programs argued to be beneficial for any organisation that uses them. Selective recruiting, for example, conveys the message that the company values outstanding employees and contributes to the attraction and retention of strategic talent in firms. According to the universalistic perspective, such intermediary outcomes benefit all organisations, despite differences in strategy, technology, industry, and the like.

In line with this thinking, empirical research that examines the global effects of HRM practices study their individual and direct linkages with organisational outcomes. Researchers have shown that certain staffing practices such as conducting validation studies, structured interviews and intelligence tests are positively related to company profit. Similarly, certain practices associated with training and compensation (Baron, 2005) associated with important organisational outcomes across different contexts.

International Human Resource Strategy

Within the field of international HRM, it proposed that a firm's strategy has important implications for its HRM practices. To find support for this proposition, strategic HRM scholars have typically drawn from generic strategy typologies such as that of Miles and Snow (1984) that differentiate between prospector, defender, and analyzer companies and that of Porter (1990) who differentiates between a cost leadership and a differentiation strategy. These different types of strategies are often matched with varying degrees of emphasis on HRM practices that foster either reliable or creative employee behaviour or competencies. For instance, Arthur (1992) reported the matching of a 'control' or 'cost reduction' HRM system with cost leadership strategy and the linkage of a 'commitment' HRM system with differentiation/flexibility strategy in steel mini mills. (Baron, 2005) examined the pursuing of a differentiation strategy through an HRM system that supports employee innovation. They found that in order to encourage innovation, companies tend to provide less incentive compensation ...