CU-MBA-SEM-III-Strategic HRM-Review Report Book-converted

PEO was a good idea. He tried hard to convince the management team that it was a risky maneuver, but he couldn’t get them away from the idea that it would save money on employment costs. Now that things have settled down, he wants to ensure that these employees are properly managed. He has scheduled a meeting with your team later this afternoon, and he asked you to respond to the following questions: 1. How does the use of leased employees change HR functions at Thompson? 2. What management practices should be changed to ensure that the engineering and design employees are not considered regular Thompson employees? SCENARIO D: QUESTIONS FOR GRADUATE STUDENT TEAMS Montgomery was never convinced that transferring the engineering and design employees to a PEO was a good idea. He tried hard to convince the management team that it was a risky maneuver, but he couldn’t get them away from the idea that it would save money on employment costs. He is concerned about Thompson’s liability for misclassification of employees, and he wants to minimize the risk as much as possible, starting with the agreement between Thompson and Mayfield. He has scheduled a meeting this afternoon with your team, and he has asked you to provide him with the following information: 1. What kind of agreement should Thompson have in place with the PEO for transferring regular employees to contract labor? 2. Although the engineering employees were told they were independents and they were calling themselves independents, are they truly independent contractors or co-employees of Mayfield and Thompson? What risks are associated with the change in employee classification, and how can Thompson minimize and protect itself from those risks? DEBRIEF SCENARIO D: QUESTIONS FOR UNDERGRADUATE STUDENT TEAMS 1. How does the use of leased employees change HR functions at Thompson? ■ Staffing. The PEO will now manage the recruitment and selection of leased employees. Thompson will give job descriptions and specifications to the PEO so it can provide employees who meet the job requirements. In addition, the PEO will handle the I-9 paperwork for all new hires. It should be made clear to all employees involved that they are employees of the PEO, not Thompson, even though they work on Thompson’s job site and to Thompson’s specifications. ■ HR development. This area will likely be shared by Thompson and the PEO. The PEO will manage general employee training, such as safety training and sexual harassment. Thompson 151 CU IDOL SELF LEARNING MATERIAL (SLM)

will handle training specific to working at the company. The PEO will be responsible for employee development and all career management efforts. Thompson and the PEO will probably both participate in the employees’ performance appraisal. ■ Compensation and benefits. The PEO will handle compensation for the leased employees; paychecks will be issued by the PEO. Thompson will pay a flat fee to the PEO for the leased employees. In the contract negotiated between Thompson and the PEO, Thompson may influence the amount of compensation paid to leased employees, but all benefits are at the discretion of the PEO, just like benefits are at the discretion of the employer for any regular employee. ■ Safety. The PEO will manage general safety training and Occupational Safety and Health Administration (OSHA) reporting for leased employees. Thompson will conduct any safety training that is necessary and specific to working at Thompson. ■ Labor relations. Thompson and the PEO will document information as needed regarding the employees’ work. Both agencies should participate, as appropriate, in disciplinary or termination issues involving a leased employee. Montgomery should expect to periodically review the PEO arrangement to ensure that Thompson continues to receive the anticipated benefits. As the process moves forward, agreements and responsibilities may need to be revised to ensure that objectives are met. 2. What management practices should be changed to ensure that the engineering and design employees are not considered regular Thompson employees? Montgomery must offer management training for the supervisors of the PEO employees. The supervisors must understand that these workers are no longer Thompson employees, and they cannot be managed in the same manner as regular Thompson employees. This may be a difficult transition for some supervisors, but it is extremely important that they make the necessary transition. If they continue to manage contract workers as regular employees, their actions will blur the independent classification of these workers, and Thompson may be at risk for benefit and tax requirements for these employees. Some typical employment practices that Thompson must not do for contract workers are as follows (SHRM, n.d.): ■ Do not complete an I-9. ■ Do not provide an employee handbook. ■ Do not enroll independent contractors in any company-sponsored benefits plans. ■ Do not pay independent contractors for company holidays. ■ Do not invite or permit attendance at company parties or special events. ■ Do not issue business cards, employee ID badges or facility keys. 152 CU IDOL SELF LEARNING MATERIAL (SLM)

■ Do not require full-time work or set work hours for independent contractors. ■ Do not conduct performance evaluations for independent contractors. ■ In addition, Thompson should restrict participation in projects and meetings for contract workers and limit their role in hiring and termination decisions. The conversation between Pete and Niles indicates that little has changed in Thompson’s management practices since the employees were transitioned to the PEO. Contract employees should not participate in staff birthday parties or serve on hiring committees. The conversation also indicates that these employees are required to work the same hours as before and that nothing has changed with employee phone numbers, e-mail addresses or general working conditions. These practices put Thompson at risk for losing the independent status of these workers. HR must implement training and update policies immediately. REFERENCES Danaher, M. (2008). Temps, in name alone. HR Magazine, 53(11). Retrieved from www.shrm.org/Publications/hrmagazine/EditorialContent/Pages/1108legal.aspx Meade, K., Pagano, J., Saxe, I., & Moskowitz, J. (2007, October/November). Revisit independent contractor classifications. Retrieved from www.shrm.org/ Publications/LegalReport/Pages/CMS_023267.aspx SHRM. (n.d.). Independent contractor: Audit checklist for maintaining independent contractor (IC) status. Retrieved from www.shrm.org/TemplatesTools/Samples/ HRForms/Articles/Pages/CMS_020334.aspx U.S. Department of Labor. (2009). Fact sheet #13: Employment relationship under the Fair Labor Standards Act (FLSA). Retrieved from www.dol.gov/whd/regs/ compliance/whdfs13.pdf DEBRIEF SCENARIO D: QUESTIONS FOR GRADUATE STUDENT TEAMS 1. What kind of agreement should Thompson have in place with the PEO for transferring regular employees to contract labor? When regular employees are transferred to a PEO and leased back to the employer, the employer must ensure that the agreement with the PEO clearly spells out the expectations and responsibilities of both agencies. The major change for Thompson is that the engineers will no longer be Thompson employees; they will be employees of Mayfield, the PEO. Montgomery should carefully research PEOs in his area to ensure that whatever provider he 153 CU IDOL SELF LEARNING MATERIAL (SLM)

chooses abides by state regulations. Many states require PEOs to be licensed and registered with the state, and many states also require bonding and insurance. After that is determined, Montgomery should be ready to negotiate the specific details of the agreement. The contract should outline how the PEO will be compensated for services. Some PEOs charge a flat fee per employee, and others charge a fee based on a percentage of payroll. Either is acceptable. The contract should also identify each agency’s responsibilities, because the leased employees are now shared employees, with each agency maintaining some responsibility for their employment and working conditions. Those responsibilities should be clearly outlined in the contract. The PEO should handle all HR functions for leased employees, including payroll and benefits, tax withholding, unemployment and workers’ compensation insurance, performance appraisals, and disciplinary actions. The PEO should pay the employees’ wages and employment taxes out of its own accounts, and it is responsible for reporting, collecting and depositing employment taxes with state and federal agencies. The PEO should maintain records for the functions it manages. The PEO is responsible for notifying employees that they are employees of the PEO. Thompson must ensure EEO compliance and safety standards at the Thompson facility. Thompson should also manage any training that is specific to Thompson or to the work assigned to the leased employees. The PEO should be responsible for employee manuals, but Thompson should provide information that is company specific, such as parking, building access, communication systems, dress code, safety policies, company culture and conduct, confidentiality, and nondisclosure agreements. There are also areas of shared responsibilities. Both the PEO and Thompson have the right to independently decide whether to hire or fire an employee. Other shared responsibilities include the right to direct and control employees. The PEO should handle matters involving HR management and compliance with employment laws, and Thompson should handle management of contract employees as it relates to the manufacture, production and delivery of its products and services (National Association of Professional Employer Organizations, 2011). 2. Although the engineering employees were told they were independents and they were calling themselves independents, are they truly independent contractors or co-employees of Mayfield and Thompson? What risks are associated with the change in employee classification, and how can Thompson minimize and protect itself from those risks? There may be financial advantages for Thompson by moving the engineering department employees to a PEO, but there are some issues that Montgomery should be concerned about. A major risk to employers who use contingent staffing is misclassifying staff as independent contractors when they are really employees. Employee status triggers employer obligations under federal and state laws that do not apply to independent contractors. The responsibility for classifying a worker correctly falls on the 154 CU IDOL SELF LEARNING MATERIAL (SLM)

employer (Bliss & Thornton, 2009). There is no clear test as to when a worker is an employee or an independent contractor, because employment conditions are variable. In a number of court cases, employees initially designated as independent contractors were later deemed employees because of the level of control the employer exercised over the workers. The more control the employer has over the work and the worker, the more likely the worker is an employee and not an independent contractor. When an employer has both independent contractors and employees working side by side doing similar work, a red flag goes up at the Internal Revenue Service (IRS) and the Department of Labor, and the classification of some workers as independents may be challenged. Misclassification can be expensive, as demonstrated in Vizcaino v. Microsoft (1999), when the 9th U.S. Circuit Court of Appeals decided that “temporary” employees of Microsoft were entitled to the same benefits as full- time employees. The case concluded with the distribution of $97 million to 10,000 temporary employees. Thompson has used the term “independent” quite liberally even though the engineers don’t fall under the criteria of independent contractors. This is an area of concern because it blurs responsibility for payroll taxes. Misclassification could make Thompson responsible for unpaid federal payroll taxes, retroactively for up to three years, for affected employees if Mayfield has not properly deducted employment taxes or deposited the employment taxes with the appropriate agency. Another concern is the loss of control over the engineering department that occurred when the engineers were shifted from Thompson employees to leased employee who are then managed under a joint employment relationship shared by Thompson and Mayfield. Besides control, Thompson loses the ability to determine the total compensation paid to the transferred employees. Thompson’s contract with the PEO should determine what the employees will be paid, but beyond salary levels, the total compensation is determined by the PEO. Thompson will no longer have the same control over the benefits the engineers receive; leased employees are usually not eligible for the same benefits offered to regular employees. If Thompson considers carrying over its benefits plan to the leased employees, it must clearly define employee classifications and identify who is and who is not eligible for benefits: “The eligibility conditions and exclusions should go beyond simply naming the types and groups of employees who are eligible (regular or permanent employees) and who are ineligible (e.g., temporary, part-time, seasonal employees). The language should give each person who reviews the language a clear and explicit understanding of who falls into each category” (Greetis, 2010). To minimize risk, Montgomery should ensure that the contract between Thompson and Mayfield spells out the responsibilities of each party. Thompson should also ensure that employees are correctly classified and that the management practices of Thompson supervisors are appropriate for leased employees who are managed under a joint employment relationship. 155 CU IDOL SELF LEARNING MATERIAL (SLM)

This is an area where Montgomery should seek legal counsel. REFERENCES Bliss, W., & Thornton, G. (2009, April). Employing independent contractors. Retrieved from www.shrm.org/TemplatesTools/Toolkits/Pages/ EmployingIndependentContractors.aspx Greetis, A. (2010, February). Increased use of alternative workers raises critical benefits issues. Retrieved from www.shrm.org/LegalIssues/FederalResources/ Pages/TempBenefits.aspx National Association of Professional Employer Organizations. (2011). What is a PEO? Retrieved from www.napeo.org/peoindustry/coemployers.cfm Vizcaino v. Microsoft, 173 F.3d 713 (9th Cir. 1999). 7.5 SUMMARY • Human resource environment is a part of social environment which includes the concept, viewpoints, work culture, attitudes, efficiency, skills, productivity, nature and behaviour of HR, employees’ demand and supply, motivational aspects, compensation methods and industrial relation concerning of HR practices. • With the growing and integrated role and perception of social and Human resource environmental factors, there is a transformation process was emerged for the last two decades. • The shift from manual process to machinery process, from unskilled employees to the skilled employees, from manufacturing economy to a service economy, from machine age to the autocratic age have been accompanied by many transformations. 7.6 KEYWORDS • HRM – Human Resource Management • IHRM – International Human Resource Management • L&D – Learning and Development • T&D – Training and Development • SHRM – Strategic Human Resource Management 7.7 LEARNING ACITIVITY 1. Visit the BPO service industry and collect the data on Selection Process ____________________________________________________________________________ 156 CU IDOL SELF LEARNING MATERIAL (SLM)

____________________________________________________________________________ 2. Visit the manufacturing industry and collect the data on Reward and Compensation Strategies ____________________________________________________________________________ ____________________________________________________________________________ 7.8 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define Reward and Compensation Strategies 2. Define Rewards in HRM 3. Define Compensation Strategies 4. Define Reward functions 5. Define retrenchment Strategies Long Questions 1. What is conflict explain in detail? 2. What is the purpose for conducting selection interview? 3. Briefly describe the importance of motivation 4. Explain the main characteristics of staffing? 5. What are the different objectives of HRM? B. Multiple Choice Questions 1. Focus on ______ is a barrier to SHRM a. Financial terms b. Long term profit c. Short term performance d. Short term investment 2. SHRM's goals do not include 157 a. Strategic capability b. Employee satisfaction CU IDOL SELF LEARNING MATERIAL (SLM)

c. Unifying framework d. Sense of direction 3. The HR manager's evolving position does not include a. Employee advocate b. Welfare leader c. Change Agent d. Change Champion 4. Proactiveness and concerned with organization effectiveness is the characteristic of a. Personnel Management b. SHRM c. HRM d. None of these 5. Environmental uncertainties is one of the factors that affects a. HRM b. SHRM c. HRP d. HRD Answer 1- c,2- b,3- b,4- b,5- c. 7.9 REFERENCES Text Books – • Armstrong, Michael & Baron Angela. (2005). Handbook of Strategic HRM (1st ed.). New Delhi: Jaico Publishing House. • Mello, Jeffrey A. (2007). Strategic Human Resource Management (2nd ed.). India: Thomson South Western. 158 CU IDOL SELF LEARNING MATERIAL (SLM)

Reference Books – • Regis, Richard. (2008). Strategic Human Resource Management & Development (1st ed.). New Delhi: Excel Books. • Agarwal., T. (2007). Strategic Human Resource Management. New Delhi: Oxford University Press. • Dhar, Rajib Lochan. (2008). Strategic Human Resource Management (1st ed.). New Delhi: Excel Books. 159 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 8: STRATEGIC APPROACH TO INDUSTRIAL RELATIONS Structure 8.0 Learning Objectives 8.1 Introduction 8.2 Outsourcing 8.3 Contract Labor and its HR Implications Human Side of Merger and Acquisitions 8.4 Three Stage model of M&A 8.5 Summary 8.6 Keywords 8.7 Learning Activity 8.8 Unit End Questions 8.9 References 8.0 LEARNING OBJECTIVES After studying this unit, you will be able to: • Describe Outsourcing • Identify scope of Contract Labor • Three stage model of M&A 8.1 INTRODUCTION Let us now turn our attention to strategy. Let me attempt an oversimplification of the idea of strategy. To get from point A to point B, strategy entails picking one of several choices. Let's look at an example. I'd like to fly from Mumbai to Mahabaleshwar. There are two choices available to me: Option 1: I can travel through Mahad, or Option 2: I can travel through Pune- Vai. I opt for the Pune-Vai path. So, theoretically, I've settled on a plan. This is a calculated move. People alert my driver that there will be heavy traffic and a potential traffic jam ahead as I ride on the express highway. So, at Lonavala, I move from the express highway to the old Bombay Pune Road, travel to Pune, and then return home. I've strayed from my chosen course, but not from my target. The opportunity to save time was crucial. This is referred to as the 'emergent approach.' 'Intentions clash with shifting facts' happens here. The argument is that a plan is built on a deliberate formulation as well as experience. It is against this backdrop that 160 CU IDOL SELF LEARNING MATERIAL (SLM)

we must comprehend the Harvard perspective on strategy. Strategy is described as \"an innovative act of combining various complex decisions,\" according to the book. Since in this area of management, it takes two to tango, the deliberate and emergent approach must be understood in the sense of industrial relations. The willingness of management and staff to influence each other determines whether the industrial relations plan succeeds or fails. The execution of a strategy is often viewed as a one-way process. Emotions run strong in industrial relations, causing major roadblocks. In no other field of life is it more necessary to achieve an agreement than in labour relations. Advantage in the Business Competitive advantage refers to an organization's ability to offer the same product at a lower price than its rivals, or to charge higher prices by offering greater value through differentiation. Matching core competencies to opportunities provides a strategic advantage. A company is said to have a competitive advantage if it maintains earnings that are higher than the market average. The distinction between Strategic Human Resource Management and Strategic Industrial Relations 'Strategic Industrial Relations to ensure competitive market advantage' is the topic of discussion. I respect the organizers’ decision to hold a conclave on \"Strategic Industrial Relations.\" 'Strategic Human Resource Management' is a term we hear a lot. The question then becomes how Strategic IR varies from Strategic HRM. I'm not going to give you my opinion on it. I looked up Blackwell Online and found the following: Strategic industrial relations are a method for analyzing the strategic choices taken by actors in industrial relations processes, such as employers, employees and their unions, and policymakers, as well as the consequences of those choices for industrial relations outcomes. Strategic industrial relations are based on the assumption that these actors select the policies and institutional frameworks that they believe will better allow them to achieve their goals. ............. Strategic industrial relations, on the other hand, varies in one important way from strategic management and strategic human resource management. Strategic industrial relations have a wider emphasis than strategic management and strategic human resource management, which focus on the selection and execution of choices that advance the employing organization's objectives. Strategic industrial relations, in particular, focuses on defining and executing choices that promote the individual or collective goals of employees, worker groups, and industrial relations policymakers, as well as the goals of employers. 161 CU IDOL SELF LEARNING MATERIAL (SLM)

Although it is not needed, I am tempted to do so. Strategic Industrial Relations, as described here, focuses on decisions that help workers and organizations achieve their individual and collective goals. The inevitable inference is that Strategic IR is built on industrial democracy's firm base. To put it another way, all sides must listen to each other: employees and unions must listen to management's voice, and vice versa. Both legitimate aspirations must be accommodated in the Strategic IR. Is Anybody Practicing Strategic Industrial Relations? Please, no theories. I can almost hear those in the audience say that this is just speculation and that such things don't happen in real life. So, I'm going to start by providing some examples of how it's done. Three examples of Strategic Industrial Relations are as follows: A. Tata Steel (India) Limited (Tata Steel) Limited Tata Steel reached an agreement with their workers' union in January 1956. This is a historic agreement since it specifically defines the parties' joint duties and obligations. It provides the tone for future labour relations. This agreement has had a major impact on Tata Steel's work culture. Mutual Security, Closer Employee-Management Relations, Productivity, Job Description, Job Evaluations and Wage Structure, Wage Revision, and Gratuity are the chapters of that agreement. [The government passed a gratuity law 16 years later!] and so on. Tata Steel has faced its fair share of business challenges. Although the plant has been modernized on many occasions, it has also had to be downsized. The number of workers has decreased significantly, from 75000 to 35000. In light of this, the past of labour relations should be studied. There hasn't been a single strike day in the last 75 years! Have the Tatas managed to gain a strategic advantage? Go to Tata Steel's website and look under the Awards section. And then decide whether or not they have a competitive advantage. It will leave no question in the minds of the readers that Tata Steel has benefited greatly from Strategic IR. B. Southwest Airlines When it comes to dealing with unions, Southwest has its own strategy. Southwest essentially does three things: a. Southwest recognizes labour unions as legitimate representatives of workers and valuable partners in the business. Through doing so, the conventional anti-union prejudice that is the first big roadblock to good ties is removed. The Southwest management team demonstrates their confidence in the employees' judgement by accepting what unions they want to join. b. Southwest wants the unions to have a strong sense of ownership and commitment to the organization. As a result, when bargaining with unions, it is expected that they would be fair. Since Southwest workers have elected to belong to six separate unions, it is expected that the other unions will work together to ensure that none of their members make unreasonable demands. 162 CU IDOL SELF LEARNING MATERIAL (SLM)

c. The unions are seen as full partners by Southwest, not as an albatross around their organization's neck. From that standpoint, Southwest offers reliable information to and union so that discussions can take place in the light of day rather than in a cloud of distrust and misunderstanding. Southwest has excellent labour relations as a result. Just one six-day strike has ever occurred in the company's history. d. Is Southwest Airlines gaining a competitive edge? Take a look at what they've accomplished: i. Except for the year it was established, Southwest has been profitable every year in a highly competitive industry. Southwest had been profitable for 31 years by the year 2003. ii. For the majority of 2002, Southwest's $9 billion market capitalization outpaced the total market capitalization of all other US airlines. iii. Southwest regularly ranks among Fortune Magazine's \"100 Best Companies to Work for in America,\" and captured the airline industry's \"Triple Crown\" from 1992 to 1996, which included the fewest delays, grievances, and mishandled luggage. C. British Petroleum The Singapore Shell Employees Union documented its future course in the \"Facing the Future - Plan of Action for the 1990s\" plan of action in 1988. Employees were first exposed to the company's mission and vision statements in 1991. This was in response to a perceived need for workers to recognize the company's fundamental values and strategic direction. At a conference on September 24, 1999, both the Company and the Union reaffirmed their full commitment to the Shared Industrial Relations Vision. The Vision Document can be found here: Singapore Shell Companies and Singapore Shell Companies the Shell Workers' Union is dedicated to the well-being of its members. We believe that in order to address obstacles, seize opportunities, solve issues, and improve the quality of work life in an ever-changing world, a successful organization and an effective union must form a strategic alliance. To that end, *We will conduct labour relations in a competent, pragmatic, consistent, consultative, and enlightened manner at all levels, with mutual respect, confidence, and transparency. will ensure that workers are fairly compensated and rewarded for their efforts. Employees will be handled equally, with trust, appreciation, and consideration. We can cultivate an atmosphere where workers are well-informed, inspired, and encouraged to reach their full potential. We will make certain that workers are well-trained and grown to their full potential. We will foster a secure and sustainable working atmosphere by enforcing the highest safety standards and increasing public understanding of health, safety, and environmental issues. We would ensure the Company's long-term survival and development by increasing efficiency, innovating, and improving the quality of our goods and services. Through supporting its activities and educating, advising, and involving it in matters concerning 163 CU IDOL SELF LEARNING MATERIAL (SLM)

workers, we will ensure that the Union remains successful. All workers must be committed, involved, and participate in order for this vision to be realized. So far, I've made two points: [a] industrial democracy is the heart and soul of strategic industrial relations, and it's been practiced all over the world. Strategic IR has given organizations a distinct personality as well as a competitive advantage. The Three Problems Let me now turn to the three questions raised by the conclave's organizers for discussion. These are the ones. a] A scenario of industrial relations in the past, present, and future. Global developments have an effect. I'm just going to talk about the 'effects of global changes.' Let me begin by quoting from an excellent research paper written by David Macdonald and published by the International Labour Organization. \"In many industries around the world, the new demands of international competition and dramatic technological changes - the forces of globalization - have changed the essence and activity of the \"market place,\" as well as how production is organized, dramatically during the 1990s. Industrial relations (IR) is playing an increasingly strategic role within the organization, as much of what needs to be done necessitates major changes to traditional practices in this and related areas of human resource management (HRM). As a result, the essence of IR in many organizations is evolving. A new approach is gaining momentum, one that is focused on a wider view of employment relations. This new approach is focused on a variety of IR and HRM practices aimed at enhancing the workforce's flexibility and skills in an environment that emphasizes collaboration, cooperation, and trust among managers, staff, and their representatives.\" Do these findings seem to be accompanied by evidence? Here are three facts to consider: Surya Nepal P Ltd scheduled an intervention to enhance organizational culture just before the launch of their new plant. The exercise was completed by all staff, including senior managers. Similarly, Tata Steel recently opened its Kalinganagar plant. They, too, initiated an effort to develop the ideal work atmosphere at the plant prior to commissioning. Hy-Tech Engineers, a Thane-based company with factories in Pune, has been generously sharing its resources with its employees. This is the outcome of a highly efficient Toyota Development System implementation. TPS helps organizations face the demands of versatility 164 CU IDOL SELF LEARNING MATERIAL (SLM)

and capability growth by establishing work processes and cultures. The video can be seen here. There are clearly optimistic trends in handling staff, particularly blue-collar jobs. Globalization has had a clear effect on IR activities. Is it possible to plan a relationship or does it have to come from the heart? Despite the fact that it is called Industrial Relations, there is no Valentine's Day in this department! Industrial relations, like any other relationship, may be designed but must be based on heartfelt feelings. The initiatives of Surya Nepal and Tata Steel have already been listed. These two organizations plan to lay the groundwork for a constructive partnership. Of course, there are a variety of other ways that businesses plan their labour relations. When it comes to relationship planning, the viewpoint we have on the relationship is important. According to Alan Fox, there are three possible viewpoints. Unitarianism, Pluralism, and Progressive are the three. Here are a few of them: The company is seen as an interconnected and harmonious whole in 'Unitarism,' with the ideal of \"one happy family,\" where management and other workers share a common aim and emphasise reciprocal cooperation. Marico and Excel industries, in my opinion, have taken a 'Unitarist' approach to labour relations. When Marico established a factory in Kanjikode, Kerala, they experimented with some very creative practices. No employee, including blue- collar workers, was forced to punch a card or use an access card to record attendance. They were expected to apply for leave if they needed it; otherwise, they were assumed to be present. It's a simple declaration of faith. This is a practice that many businesses have only for their management personnel. Marico used a 'jury' to determine if an employee was guilty of indiscipline, which was an interesting procedure. A mix of administrators, bosses, and blue- collar workers make up the jury. This is the most a company can go to ensure justice. In contrast, in certain organizations, if a worker is given a charge-sheet, he realizes he's on his way out. So acrimonious! The organization is viewed as being made up of strong and divergent sub-groups, each with its own valid loyalties, goals, and leaders in 'Pluralism.' Management and labour unions are the two most important sub-groups in the pluralist viewpoint. This perspective tends to be shared by ITC and Asian Paints. When the employees at Asian Paints' Patancheru plant [near Hyderabad] formed a union, the company's management formally invited the union's president to a meeting and explained the company's policies. The President's invitation, as an external representative, went a long way toward setting a constructive tone for labour relations. Alan Fox added a third philosophical possibility, the 'radical' frame of reference, in his book Beyond Contract (1974), in which the employment arrangement is an entirely unconstitutional relationship that exists solely to serve the dominant party's interests. There are several organizations that take a conservative approach. This 'extreme' stance is 165 CU IDOL SELF LEARNING MATERIAL (SLM)

exemplified by Maruti Suzuki and Bajaj Car. Their managing directors' comments demonstrate their mentality. There are a lot of them in the auto and MNC industries. Are unions working together to strategize IR in order to improve market competitiveness? Yeah, we've seen this pattern as well. It is true that this is a pattern rather than a popular practice. The vision statement for ITC Kamgar Sanghatana in Ranjangaon has been established. I previously blogged about it. It's as follows: \"Excellence in Relationships for Harmony, Peace, Productivity, and Creativity to Build World- Class Organizations and Enhance Economic, Social, and Family Life through Teamwork, Enlightenment, Study, Learning, Dedication, Integrity, Trust, Justice, and Accountability.\" And the ASAL Employees Union in Bhosari caused a stir when they wrote to Management on their own initiative, stating that they would improve efficiency first and then demand a pay raise. We invited Mr. Anil Khandekar, the CEO of Thane HR Group, and union leaders to share a common forum to tell their tale. Attitudes and relationships are undergoing a slight transformation. And it's at the Union's request. To summarize: First and foremost, the leadership's perspective on the partnership is crucial. It gives the relationship personality. In the long run, those who hold Unitarian or Pluralist views will succeed. Since leadership changes so much, the organization's strategy includes a safeguard. Unfortunately, it is uncommon for companies to state their ER strategy up front. Second, Strategic Industrial Relations has a long-term profit. There is no question that it also offers a strategic advantage. Third, leadership is essential in all human issues, including labour relations. A JRD Tata or Russi Moody will build a great company that can withstand the effects of globalization. Myopic business leaders may make money in the short term, but they are still vulnerable to Industrial Relations. 8.2 OUTSOURCING Over the last decade, outsourcing has grown in popularity as businesses expand and their needs become so specific that supply for specific positions is difficult to find in the national market. Furthermore, as the startup ecosystem has grown, outsourcing has created a way for founders and entrepreneurs to find foreign top tech talent at a significant discount to help them launch their businesses or expand their current teams. Outsourcing is a word that is sometimes misunderstood and has a negative connotation because it has been linked to a flight of jobs from the United States to foreign companies. “The main negative effect of outsourcing is that it increases US unemployment. The 14 million 166 CU IDOL SELF LEARNING MATERIAL (SLM)

outsourced jobs are almost double the 7.5 million unemployed Americans.” as mentioned by Kimberly Amadeo from the Balance. “It’s become synonymous with corporate irresponsibility, but outsourcing also offers jobs and community programmes [sic],” as argued by Paul Klein from the Guardian. Regardless, before we can start objecting to it, we need to understand what it is, how to use it, and why it exists. What is outsourcing? Outsourcing is characterized as the process of purchasing products and services from a foreign supplier in simple terms. This method is most widely used in industries where there is a labour shortage for specific positions or where labour costs are too high. Software developers or designers, for example, as revealed by the Tech Salaries Report. The method of purchasing products and services from a foreign supplier is known as outsourcing. Any job can be outsourced by a company. Also, now, we see businesses using it for non- fundamental tasks, such as providing support to the company's central infrastructure or assisting in day-to-day operations. Here are the predominant job sectors that companies outsource since 2015: • Manufacturing • IT Services • R&D • Distribution • Call Centers 167 CU IDOL SELF LEARNING MATERIAL (SLM)

Fig 8.1 companies outsource Since the availability of developers is insufficient to satisfy demand, outsourcing has become a window of opportunity for businesses to acquire and maintain development talent and teams as the technology sector and startup ecosystem have grown. Given the supply shortage, costs for excellent developers in the United States are significantly higher, making it prohibitive for certain businesses, according to Economics 101. Companies outsource for a variety of reasons. Simply put, businesses outsource because it lowers their overhead for producing a product, allowing them to increase their profit margins. It's purely a commercial decision. We live in a world where work performed in one country or city is not paid equally to work performed elsewhere. Some claim that wage inequalities are exacerbated by state and federal taxation, the country's economic condition (as calculated by GDP per capita), and wage-setting institutions. Regardless, the decision is based on economic considerations. According to Brandon Gaille, the top reason for outsourcing is to cut operational costs, with 12% preferring to access world-class capabilities. Here is a thorough breakdown of the reasons as to why people outsource: 1. Reduce or control costs — 44% 2. Gain access to IT resources unavailable internally — 34% 3. Free up internal resources — 31% 4. Improve business or customer focus — 28% 5. Accelerate company reorganization/transformation — 22% 6. Accelerate project — 15% 168 CU IDOL SELF LEARNING MATERIAL (SLM)

7. Gain access to management expertise unavailable internally — 15% 8. Reduce time to market — 9% How does outsourcing work? We will have to dig deep into each of the various business sectors where outsourcing is feasible to fully answer this question; however, since technology is our forte, we will answer this question from a technical perspective. Most software developers and IT professionals are recruited via a recruitment firm or an agency because it is easier and quicker for businesses to find the right person with the right skills and experience. Staffing firms do all of the recruiting, and businesses select and choose which candidates they want. Once the agency has found skilled professionals for the organization, new employees can be assigned to a specific office space — which normally necessitates more work for the company or HR executive — or they can be left to work remotely. Outsourcing technology soon discovers that remote developers and tech professionals are results-driven and rely heavily on milestones and deliverables. 8.3 CONTRACT LABOR & ITS HR IMPLICATIONS HUMAN SIDE OF MERGERS AND ACQUISITIONS Overview Mergers and acquisitions (M&As) are strategies that companies use to accomplish corporate goals—tools that have far-reaching implications for workers at all levels as two entities merge into one. A merger is known as the unification of two or more entities under a single ownership and management structure. An acquisition is the process of one company purchasing ownership of another company through a merger, stock swap, or other means. 70 percent to 90 percent of all mergers and acquisitions fail to meet their expected strategic and financial goals. 1 Various HR-related causes, such as conflicting cultures, management styles, low morale, loss of key talent, lack of communication, decreased confidence, and ambiguity of long-term objectives, are often blamed for this high failure rate. The value of handling \"people issues\" in the sense of M&As is addressed in this article, with a focus on HR professionals' ability to recognize potential challenges, find solutions, and convince management to implement them. The article addresses the business case for M&As and provides an outline of the five stages of a merger or acquisition deal. It discusses the following main concerns in order to assist HR practitioners in planning for the complexities and practical realities of M&A transactions: Creation of new policies to guide the new organization. 169 CU IDOL SELF LEARNING MATERIAL (SLM)

Retention of key employees. Employee selection and downsizing. Development of compensation strategies. Creation of a comprehensive employee benefits program. The article ends with a summary of the value of a well-thought-out communication plan, as well as brief mentions of cultural compatibility, outsourcing decisions, and global issues. HR's Role in M&A Transactions Excitement, anxiety, confusion, excitement, and resistance are all typical emotions encountered when contemplating a merger or acquisition. These emotional reactions can happen at any level of a company. The way a company handles its workers before, during, and after a transaction can have a direct effect on the transaction's success. Mergers & Acquisitions: An HR Guide for Success Company Leaders Tell HR: Know the Business and Be Relevant Be a Master of Mergers and Acquisitions Both mergers and acquisitions present significant challenges to HR professionals. The M&A process requires management of both organizations to consider all implications of a proposed merger or acquisition before agreeing to one—which necessarily involves consideration of the \"people issues\" created by a proposed merger or acquisition. HR professionals are often involved in the process by advising management on human resource matters, including using surveys and other metrics to gather relevant data, identifying potential conflicts or HR challenges between the two companies, integrating HR practices and company cultures after an M&A, and managing talent decisions such as layoffs, to name a few. HR professionals face a number of challenges during M&As, including: Attempting to maintain an internal status quo, or to effect change—either to facilitate or thwart (in the case of a hostile takeover) a possible merger or acquisition, as instructed by upper management. Attempting to provide guidance to upper management from a \"people\" perspective as to whether organizational goals will be better fulfilled in the form of a merger versus an acquisition, or by making internal changes. Assuming that a merger or acquisition has been approved, discerning all aspects of the two separate organizations and the one combined organization that will be affected. Communicating with employees at every step in the M&A process with both an appropriate level of disclosure and an appropriate level of confidentiality. Devising ways to meld the two organizations most effectively, efficiently and humanely for the 170 CU IDOL SELF LEARNING MATERIAL (SLM)

various stakeholders. Dealing with the reality that M&As usually result in layoffs of superfluous employees under the combined organization. This reality entails coordinating separation and severance pay issues between the combining organizations. Proactively avoiding legal issues for violation of federal and state anti-discrimination laws and the Worker Adjustment and Retraining Notification Act (WARN). Participating in the defense of lawsuits that may be brought as a result of a merger or acquisition. Aligning the HR function to achieve the organization's strategic objectives. Addressing the ethical dilemmas involved, in which an HR professional may be required to eliminate his or her own position, the position of a current co-worker, or the position of an HR counterpart in the combining organization. Anatomy of an M&A Transaction Mergers and acquisitions tend to go through similar phases. A brief summary of those distinct parts of most transactions follows to familiarize HR professionals with the M&A process. Phase 1: Identifying buyers Phase 1 involves identifying potential candidates that would be interested in merging with, buying or selling to the organization with the goal of bringing significant advantages to both parties. It is important to sign a nondisclosure agreement (NDA) before sharing much information between companies. NDAs are not fail-safe, but they offer some legal protection and highlight the need for secrecy. An organization's management must also carefully decide, even with a signed NDA, how much information to disclose and at what stage of the process. An interested buyer usually wants to know more than the organization wants to share, and its representatives have to use discretion at every stage to determine what level of disclosure will intensify the buyer's interest without harming the business should the deal fall through. An HR professional may be involved in the process of communicating the need for an NDA, collecting signatures and maintaining the records. Phase 2: Securing third-party services Phase 2 involves the legal, accounting, regulatory and technical aspects of completing the transaction. It is during this phase that third-party professional services are secured (e.g., lawyers, accountants, investment bankers and M&A advisors). These individuals or groups are critical to the success of the transaction and will be involved in the development of the structure and content of the legal agreement. An HR professional might be involved in interviewing the third-party professional and negotiating an independent contractor agreement. Phase 3: Preparing for the transaction 171 CU IDOL SELF LEARNING MATERIAL (SLM)

Parties make sure their teams are briefed, ready and on the same page, and sign a letter of intent before they begin the due diligence process. It is important for parties to ensure that their legal documents (e.g., option plans, board of director notes, NDAs, partnership agreements, benefits plans) are organized and in good shape. Also crucial is for parties to ensure that they have completed the proper government filings, that they have adequate product and marketing documentation, and that their financial records are sound and have been audited by a legitimate third party. HR professionals are likely to be heavily involved in the collection and organization of such records. The parties sign a letter of intent if they tentatively can agree on the priority issues involved in the transaction. A letter of intent is a document that seeks to provide some initial points of understanding and that binds the parties to keep the information discussed confidential. This document is signed prior to the start of the due diligence process and prior to formal board of directors' approval of the deal. During the due diligence process, it is critical to read documents carefully to eliminate any surprises that could jeopardize the deal. Parties should decide up front how much information they will share during due diligence; they should expect to have to share a significant amount of detail. Parties must have the required documentation organized and prepare multiple copies so they will not be slowed down by copy requests. In addition, parties should be aware that due diligence almost always takes longer than expected. Phase 4: Negotiations, valuation and final agreement Regarding negotiations themselves, many tactics are employed, and the right ones often depend on the types of organizations involved. Different industry sectors use different valuation metrics (e.g., multiples of revenue, discounted cash flow or EBITDA, which is \"earnings before interest, taxes, depreciation and amortization\"). The parties' financial advisors, both internal and external, generally control this aspect of the transaction. Assuming the due diligence process has not uncovered any material issues that cause a reconsideration of the transaction, and assuming the price seems right, both parties draft, negotiate and approve the legal agreement. Regulatory and filing issues must be considered at this time. Despite the prior approval of the parties and their respective boards of directors, organizations must often take additional steps (e.g., filings with the relevant secretary of state, taxing authorities and other government agencies with regulatory authority over either company, such as the federal Securities and Exchange Commission). Phase 5: Implementation In this phase, the two organizations are combined into one. New workgroups are established, and redundant employees are laid off. The corporate culture for the combined organization is established and communicated to all employees. HR professionals may be involved in formulating a new mission statement, vision statement and possibly a values statement. 172 CU IDOL SELF LEARNING MATERIAL (SLM)

Organizational policies and procedures will be revised and coordinated with significant input from HR professionals. Business Case As shown above, the business case for involvement of HR professionals at every step in the M&A process is overwhelming. Studies consistently show that most mergers and acquisitions fail, mainly because of people and culture issues. In the period leading up to and immediately following a significant transaction, a tendency exists for employees to begin considering their own personal situation. Questions usually contemplated include \"Where am I going?\"; \"What do I want out of both my personal and business life?\"; and \"Will I like the new company and its management group?\" The longer the period of uncertainty lasts, the more attractive alternative employment becomes. To make things more difficult, the best and brightest managers are the ones immediately targeted by recruiters attempting to lure them to other organizations. The loss of key employees can seriously erode the potential value of a transaction for the acquiring firm. Perhaps equally damaging, and just as costly, are those people who stay on the payroll but who emotionally \"check out\" and do not perform at their previous levels of productivity. If the process is not managed well, a company may end up with the employees who simply had the fewest alternatives. HR's Involvement Before the Transaction HR professionals typically play pivotal roles in an acquisition's core due diligence activity. During due diligence, information about talent and culture—along with typical assessments of employee benefits plans and liabilities, compensation programs, employment contracts and policies, legal exposure, and more—can provide insights into the value of a property and its workforce and can decrease the likelihood of unhappy and expensive surprises once the deal is complete. A thorough review of the acquired organization's legal position generally takes place during the due diligence phase of the transactions. This is a time when all people-related policies, plans, practices and programs should be scrutinized to ensure compliance with applicable employment laws and regulations Considering an Acquisition? Begin Total Rewards Planning Now What to Look for in the Data Room Acquisition Checklist Discovery Checklist In the HR arena, one area that has significant potential for creating issues is that of retirement benefits. The questions concerning defined benefit plans, defined contribution plans, vesting, 173 CU IDOL SELF LEARNING MATERIAL (SLM)

valuation of liabilities and overfunding or underfunding of plans are complex issues that can create real challenges for members of the HR team. In addition to a review of retirement- related issues, HR should also conduct a full analysis of the target company's health care benefits and costs, as well as its worker's compensation liabilities. Handling Benefits in an M&A or IPO Deal Assessing Employee Benefits Prior to Mergers, Acquisitions & Divestitures Benefits Transition During a Merger or Acquisition Companies can inadvertently assume significant liability if they do not conduct careful due diligence before finalizing the transaction. The target company can have pending charges or litigation from the Equal Employment Opportunity Commission or face unfair labor practice claims from the National Labor Relations Board. Each of these potential legal problems needs to be addressed specifically in the acquisition agreement, and the purchasing company or surviving company may want to secure an indemnification in the agreement as well. Such an indemnification provision keeps a company from assuming unreasonable risks, especially if litigation currently is pending. Because the two entities will be combining into one, to be meaningful, the indemnification provisions are likely to extend to key officers, directors and shareholders—which again raises \"people issues\" that may require the involvement of HR professionals. While one or two cases of discrimination or sexual harassment can normally be resolved fairly easily, the HR team needs to be most concerned with examples of systemic problems created by a lack of appropriate policies or a failure to enforce those policies. Legal issues that typically cause the most problems include those related to wage/hour issues, leave issues (including the Family and Medical Leave Act, the Uniformed Services Employment and Reemployment Rights Act, and workers' compensation), integrating immigration-compliance procedures and affirmative action plans. Key Areas of HR Involvement After the Transaction The outdated view of HR as a purely administrative function rather than as a strategic one often results in HR professionals being excluded from many aspects of the M&A process in which they could add significant value to the process. Having the necessary skill sets to effectively manage the integration (e.g., knowledge in employee relations, communications, change management and legal requirements) should gain the confidence of senior management in HR. Competency in these areas also should enable HR professionals to handle the complicated process of managing human resources during mergers and acquisitions. See Once the Deal is Done: Making Mergers Work. Creation of new policies to guide the new organization To shape the culture of the newly merged organization, the employer must develop and 174 CU IDOL SELF LEARNING MATERIAL (SLM)

communicate to employees a cogent people-related strategy. Such a strategy should include the development of key policies, rules and guidelines to govern employee behavior and related workplace expectations (e.g., attendance, time off, harassment, drug testing, privacy). Retention of key employees To retain the key talent that will help make the new organization successful, management should communicate its intentions to the \"star performers\" as early in the process as is legally possible. This means requesting access to conduct confidential interviews with key employees in advance of the actual closing date. Most importantly, management should be very careful not to under commit to these key people, or they will consider other employment options. Star performers know who they are and understand their personal and professional marketability. Noncompete Agreements: How to Protect Your Company During an M&A Begin Retention Strategy Early During Mergers, Acquisitions Retention Bonus Agreement Employee selection and downsizing Early placement of management is a critical factor in beginning to stabilize the new organization. Any delays in placing key managers complicate the transition by increasing uncertainty, diverting attention and fostering internal competition. A major challenge for the acquiring company is in deciding who to retain, who to redeploy and who to terminate, as well as effectively managing those processes. Relocating key personnel or even entire departments may be necessary. See Employment Downsizing and Its Alternatives. Ideally, the HR and management teams will have been able to assess the skills, capabilities, potential and motivations of key employees involved in the merger or acquisition. Typical methods include interviewing and testing techniques and the use of outside consultants. Once these tasks are completed, the HR team should take immediate steps to \"re-recruit\" and place these employees into key positions of the new entity. See Should employees complete new-hire paperwork after a merger or acquisition? and How do I handle forms I-9 during a merger or acquisition? Most M&A deals count on both the organizational and financial efficiencies that will result from a reduction in the number of employees needed to run the new organization. This outcome means that HR will spend a large amount of time assessing employee knowledge, skills and abilities (KSAs) to decide who will stay and who will go. The strategy may include terminations, early retirements and a longer-term plan to simply not fill certain positions as they are vacated. The ways in which these decisions are made will—in the long run—be as important as the actual decisions themselves. Moreover, the manner in which talent management decisions are made will communicate a great deal about what the organization 175 CU IDOL SELF LEARNING MATERIAL (SLM)

values. Development of compensation strategies Depending on the circumstances of the deal—and the compensation policies of the combining companies—HR will likely be called on to splice disparate payment plans into a program that fits the new organization. Alternatively, HR may have to discard the original plans and then create a program from scratch that meets the goals and direction of the newly merged entities. Either way, old and new employees will be concerned about what is happening with their pay and will want full and early disclosure about the changes being considered. In addition, members of the senior management team will be anxious to see what types of special arrangements (e.g., stock options, special retirement provisions, severance agreements) will be offered to them given the high-profile nature of the new positions. The development of an executive compensation strategy will require an additional set of complex decision-making, as well as board approvals Target Key Talent. Creation of a comprehensive employee benefits program Just as with compensation programs, HR will likely be required to link disparate employee benefits into a program that fits the newly formed organization, or simply discard the existing plans and start over. Either way, the creation of a comprehensive employee benefits program is a complex undertaking, and one that takes time. Throughout that process, however, employees are sure to be concerned about possible changes to their employee benefits coverage and will want to be informed about \"the new package\" as soon as that information is available. See How are the FMLA rights of employees handled when the employer undergoes a merger or an acquisition? Communications Having a well-planned communication strategy in place is critical in the M&A process. Effective communication involves providing information on a) the shared vision for the new company, b) the nature and progress of the integration and the anticipated benefits, and c) the outcomes and rough timelines for future decisions. Communicating clear, consistent and up-to- date information not only will give employees a sense of control by keeping them informed, but it also can increase the coping abilities of employees and minimize the impact of the integration on performance. The following steps highlight the components of a successful communication program: Establish multiple routes of communication (e.g., one-on-one meetings, group sessions, newsletters, intranet updates). Focus on the themes of change and progress by highlighting projects that are going well and action items that are being delivered on time. 176 CU IDOL SELF LEARNING MATERIAL (SLM)

Repeat the common themes of the M&A to increase employee understanding of the rationale behind the transaction. Provide opportunities for employee involvement and feedback. Ensure that employees understand there will be problems, but give a commitment that the problems will be identified and addressed as early as possible. Critical to successful integration is the manner in which the restructuring is implemented. The highest priority is that the acquiring company needs to be straightforward about what is happening and what is planned. Even when the news is bad, the one thing employees of newly acquired companies appreciate most is the truth. That includes being able to say \"we don't know\" about certain areas or \"we have not yet decided\" about others. Being honest also includes sharing information about when and by what process a decision is expected to be reached. See Seven Trust Busters in Mergers and Acquisitions. The truth also means acknowledging some of the stress and other emotions that are undeniably present. Organizations should never tell employees that everything will be \"business as usual.\" The reality is, change is occurring. Likewise, employers should resist the urge to tell employees that they have \"a wonderful future\" to look forward to, when they are still confused and grieving over the past. Employers should not attempt to sugar-coat matters with false platitudes such as calling the deal a \"merger of equals\" when one company is clearly the majority stakeholder and therefore has the ability to cast the deciding vote in a split decision. Once decisions are made about functions and people, the organization must treat those employees who will be negatively affected by the transaction with dignity, respect and support. Not only is this approach the humane thing to do, but it also is a powerful way of showing those who remain what kind of company they are now working for and of helping them begin to develop some positive feelings toward the new organization. The Importance of Cultural Fit Cultural compatibility issues often arise when bringing together two or more cultures in the M&A process. Because culture encompasses the beliefs and assumptions shared by members of an organization and influences all areas of group life, the M&A integration always has a degree of misalignment, regardless of the perceived similarity between the two firms. Since cultural clashes can affect important M&A outcomes, focusing on cultural alignment has been identified as the top challenge in M&A transactions. See Successful Mergers Integrate Cultures and Culture Clash. Technology and Outsourcing Decisions Managing HR technology and deciding which systems to keep or replace, as well as which functions to outsource, can be a highly complex undertaking. Making such decisions requires that employers thoroughly assess the HR systems and people capabilities of both organizations. Technology integration must occur thoroughly and quickly enough that normal operations 177 CU IDOL SELF LEARNING MATERIAL (SLM)

never appear disturbed to users. See Merging HR Systems—A Mergers and Acquisitions Checklist. Global Issues Much of the pressure to compete and perform has intensified from globalization and the emergence of China and India as two of the fastest-growing economies in the world. During the 1990s and through about 2005, M&A activity was controlled largely by U.S. and European- based corporations. The climate has changed as Asian-based businesses look to expand their markets and become truly global players. The Middle East, even with its volatile political and religious climate, also is becoming a hotbed for M&A activity. Countries such as the United Arab Emirates and Saudi Arabia have plenty of cash available from their vast oil wealth and are looking to diversify their business holdings. The cultural and communication issues involved in a global transaction can create even more complexity for HR practitioners. See Cross-Border Mergers Create Mountain of HR Compliance Details. 8.4 THREE STAGE MODEL OF M&A 1. Strategy M&A Advisors evaluate trends in the acquirer's industry and recognise growth opportunities and goals in line with the firm's corporate strategy during this process. This includes developing a portfolio plan and evaluating an operating model, as well as corporate finance and investment banking, as well as strategic options. Goal screening, deal structuring, readiness evaluation, synergy analysis, and modelling are all included in this point. 2. Execution M&A specialist advisors in commercial, business, HR, IT, operational, and tax aspects provide insight into the transition and funding options during the execution process. The execution phase brings the dynamic process to a close by integrating experience and expertise. Project structuring, financial advisory, negotiating support, due diligence, preliminary price allocation, tax structuring, and more are all covered in this point. 178 CU IDOL SELF LEARNING MATERIAL (SLM)

Fig 8.2 M and A Life Cycle 3. Integration Integration or separation will present the acquirer with a range of obstacles in the final process, including costs, deadlines, and market disturbances, to name a few. Help for integration or separation preparation, creation of the sales purchase agreement, financial agreement advisory, valuation and purchase price finalisation, and completion statement advisory are all included in this process. M&A advisors put together a Day 1 Readiness Transition Service Arrangement, synergy support, human resources integration, tax integration, and restructuring after the transaction is closed. Technology is an effective weapon. M&A Advisors guarantee a smooth integration process from start to finish, including end-state preparation. 8.5 SUMMARY • The target corporation could be subject to pending complaints or lawsuits from the Equal Employment Opportunity Commission, as well as unfair labour practice allegations from the National Labor Relations Board, if companies do not perform thorough due diligence prior to closing the deal. - of these possible legal issues should be discussed in the merger agreement, and the buying party or remaining company might also choose to include an indemnification clause. • An indemnification clause like this prevents a corporation from taking on unreasonably high risks, particularly if litigation is currently pending. Since the two companies will be merging into one, the indemnification clauses will almost certainly apply to key 179 CU IDOL SELF LEARNING MATERIAL (SLM)

executives, directors, and shareholders—raising even more \"people questions\" that could necessitate HR intervention. 8.6 KEYWORDS • NLRB – National Labour Relations Board • HRD – Human Resource Development • HRM – Human Resource Management • IHRM – International Human Resource Management • DHRM – Domestic Human Resource Management 8.7 LEARNING ACITIVITY 1. Visit the KPO service industry and collect the data on HRM Strategies ____________________________________________________________________________ ____________________________________________________________________________ 2. Visit the manufacturing industry and collect the data on Contract Labour working with the company ____________________________________________________________________________ ____________________________________________________________________________ 8.8 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. What should be the strategy of HRM? 2. What is Outsourcing 3. What is Contract Labour 4. Explain 3 stage model of M&A 5. Explain Mergers and Acquisitions Long Questions 1. Differentiate between training and development 2. Briefly describe the importance of HRM 3. What are the various objectives of HRD? 4. What is the importance of training? 5. Briefly, explain the nature of career planning? 180 CU IDOL SELF LEARNING MATERIAL (SLM)

B. Multiple Choice Questions 1. Quality goals require alignment with: a. Production b. Human Resources c. Finance d. Purchase 2. Demand for human resources and management is generated by: a. Expansion of industry b. Shortage of labour c. Abundance of capital d. Consumer preferences 3. Management function occurs as a result of: a. Consumer preferences b. Abundance of capital c. Expansion of industry d. Shortage of labour 4. The main focus of Human Resource Management is on: a. Sales b. Dimensions of people c. External environment d. Cost discipline 5. Human resource management seeks to improve both employee and organisational effectiveness. a. Effectiveness b. Economy c. Efficiency d. Performativity Answer 1.b 2. a 3. d 4.b 5.a 8.9 REFERENCES Text Books – • Armstrong, Michael & Baron Angela. (2005). Handbook of Strategic HRM (1st ed.). 181 CU IDOL SELF LEARNING MATERIAL (SLM)

New Delhi: Jaico Publishing House. • Mello, Jeffrey A. (2007). Strategic Human Resource Management (2nd ed.). India: Thomson South Western. Reference Books – • Regis, Richard. (2008). Strategic Human Resource Management & Development (1st ed.). New Delhi: Excel Books. • Agarwal., T. (2007). Strategic Human Resource Management. New Delhi: Oxford University Press. • Dhar, Rajib Lochan. (2008). Strategic Human Resource Management (1st ed.). New Delhi: Excel Books. 182 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 9: GLOBAL HUMAN RESOURCE MANAGEMENT Structure 9.0 Learning Objectives 9.1 Introduction 9.2 Difference between Global HRM and Domestic HRM 9.3 Summary 9.4 Keywords 9.5 Learning Activity 9.6 Unit End Questions 9.7 References 9.0 LEARNING OBJECTIVES After studying this unit, you will be able to: • Describe Global Human Resource Management • Identify scope HRM • Steps involved in Human Resource Management • Features for HR Development • Difference between Domestic and International HRM 9.1 INTRODUCTION Organizations, large and small, have ceased to be local and have become multinational as a result of globalization. As a result, the workforce has become more diverse, and cultural sensitivities have surfaced in ways never seen before. As a result of all of this, Global Human Resource Management was born. Also, organizations that consider themselves resistant to cross-border transactions are connected to the global network. They are reliant on organizations that they may or may not be aware of in any way. Organizations are interdependent in a variety of areas and roles. The first role of global Human Resource Management is to ensure that the company has a local appeal in the host country while retaining an international appearance. To offer an example, every multinational / foreign corporation does not want to be referred to as a local company, 183 CU IDOL SELF LEARNING MATERIAL (SLM)

but it does want a domestic touch in the host country, which is the challenge. As a result, we can list the goals of global HRM as follows: • Create a local appeal while maintaining the brand's global presence. • Increasing managers' knowledge of cross-cultural sensitivities and recruiting people from different parts of the world. • Training on the host country's traditions and sensitivities. • In such a situation, Human Resources Management's strategic position is to ensure that HRM policies are aligned with and supportive of the company's strategy, structure, and controls. In the sense of global HRM, the following become especially noteworthy when we address systems and controls. • Operating Decision-Making: There is some centralization of operating decision-making. In the international strategy, the main competencies are centralized, while the rest is dispersed. • Because of the cross-cultural sensitivities, a high level of coordination is needed. In addition, there is a strong demand for cultural regulation. • Integrating Mechanisms: Many integrating mechanisms are active at the same time. • The Staffing Policy and Global HRM • The job is similar in this case, namely, recruiting individuals with the appropriate skills to perform a specific task. The challenge here is to build resources to foster a corporate culture that is virtually similar everywhere except for local sensitivities. • Furthermore, deciding on top management or key roles can be difficult. It's debatable whether to hire a local from the host country for a key role or send one from the headquarters; and, ultimately, whether or not to have a global recruiting strategy is a major challenge. Nevertheless, an organization can choose to hire according to any of the staffing policies mentioned below: Ethnocentric: Individuals from the parent country occupy key management roles here. Polycentric: In a polycentric staffing policy, host country nationals oversee branches, while parent company nationals manage the headquarters. Geocentric: Regardless of ethnicity, the brightest and most qualified people occupy key roles in this staffing policy. When it comes to global HRM, it seems that geocentric staffing strategy is the strongest. Human resources are effectively used, and it also aids in the development of a broad cultural and informal management network. Human resources, on the other hand, become more costly when employed on a geocentric basis. National immigration policies, on 184 CU IDOL SELF LEARNING MATERIAL (SLM)

the other hand, can stymie implementation. As a result, global HRM is a very difficult front in HRM. The job is half finished if one can hit the right chord while constructing systems and controls. Different subsidiaries can only work coherently when they are supported by efficient systems and controls, which are kept together by global HRM. 9.2 DIFFERENCE BETWEEN GLOBAL HRM & DOMESTIC HRM When HRM in a business is primarily concerned with the needs of domestic workers, it is known as domestic HRM or simply HRM. International Human Resources Management, on the other hand, is described as HRM that considers the interests of both global and domestic employees (IHRM). It appears that foreign HRM practices must vary from domestic HRM practices. More and varied HR tasks, the need for a wider outlook, more participation in employees' personal lives, a strong focus on changing the employee mix, increased risk exposure, and more external factors are all characteristics of this stage. Let's go over these characteristics one by one to see how foreign HRM varies from domestic HRM. 1. More and Varied HR Activities: Foreign HRM encompasses a wider range of HR tasks than domestic HRM. Since these activities must be conducted in a different sense in international HRM, the amount of the same HR activities that are important for domestic HRM also increases. When an employee is selected for a foreign assignment, for example, he may need extra training to help him adapt to the new environment. This preparation will be in addition to skill development training for good job results. This type of situation can occur in a variety of HR activities. This will be addressed as part of the international HR activities discussion. Many tasks that are only performed in international HRM, such as handling visas and completing various formalities that are required for an employee to conduct work in an overseas venue, provide diversity in HR activities in international HRM. There are a variety of such activities available. 2. Need for Broader Perspective: Foreign HRM, in contrast to domestic HRM, necessitates a much broader outlook in almost all HR activities. It means that when making decisions about foreign HRM, HR managers must weigh a number of factors. In the case of domestic HRM, all of these variables are irrelevant. For example, when determining international pay packages, HR managers must consider the cost of living in various international locations in order to achieve some level of parity among employees employed in various locations. Similarly, fringe benefits must be tailored to the needs of various places. Many such behaviours necessitate a much wider viewpoint. 3. More Involvement in Employees’ Personal Lives: 185 CU IDOL SELF LEARNING MATERIAL (SLM)

When opposed to domestic HRM, foreign HRM needs HR managers to be more involved with employees' personal lives. This increased degree of involvement is important to ensure that workers are properly positioned in a foreign location in which they are unfamiliar. This lack of familiarity may be due to a variety of factors such as accommodation, health-care practices, and meeting the host country's legal requirements, among others. The number of such factors can be very high in many cases. Many organizations tend to have a separate unit in their HR department called the \"International Human Resource Service\" to deal with such issues. The basic rationale for establishing such a unit is to provide specialized services that are only applicable in the context of international HRM. 4. High Emphasis on Change in Employee Mix: Changes in employee mix, especially in terms of nationality of workers, are given a lot of attention in international HRM. When a corporation opens a branch in a foreign country, it frequently hires a greater number of workers from its home country. However, it hires and trains local (host country) staff in order to maintain a positive image in the country where it operates. As a result, the proportion of local workers becomes important over time. The majority of multinational companies follow this policy. This procedure is carried out in stages. 5. High Risk Exposure: When compared to domestic HRM, foreign HRM has a higher risk exposure. In an international company, the risk may be of various types (political, regulatory, etc.). HR-related risk, on the other hand, may take the form of a lack of acceptable HR practices that meet local requirements, or a social-cultural risk in the form of non-acceptance of parent country nationals as employees, among other things. In certain situations, such a danger can have significant effects, such as social boycotts by parent country nationals, employee abduction or other forms of harassment, and, in the worst- case scenario, local government control of the company on the basis of failing to meet local HR-related requirements. As a result, HR managers must exercise caution when making decisions about foreign HRM. 6. More External Influences: A business maxim is that the farther a company travels, the further influences it can encounter. This is also true in international HRM. International HRM practices are affected by a number of external influences, as opposed to domestic HRM. HR managers must contend with a modern socio-cultural climate, political and legal structure, and so on. They must not only adapt their attitude to work with this new set, but they must also prepare their staff to adjust to it. In fact, the degree to which such an improvement is made has a major impact on HR effectiveness. 186 CU IDOL SELF LEARNING MATERIAL (SLM)

Difference between Domestic and International HRM – Explained! When HRM in a business is primarily concerned with the needs of domestic workers, it is known as domestic HRM or simply HRM. International Human Resources Management, on the other hand, is described as HRM that considers the interests of both global and domestic employees (IHRM). IHRM encompasses all domestic HRM activities, including recruitment, selection, training, growth, assessment, and compensation. The main distinction between IHRM and domestic HRM is how HRM methods are implemented. Employees on foreign assignments/projects at different international locations are the subject of IHRM. The following is the distinction between IHRM and HRM: i. As opposed to domestic HRM, IHRM covers a wide variety of activities. IHRM, for example, deals with practices such as international taxes, foreign currencies, exchange rate coordination, and employee international orientation, whereas HRM is uninterested in such matters. ii. International HRM is concerned with employees who work for organizations that operate in several countries, while domestic HRM is concerned with employees who work for organizations that operate in a single country. iii. IHRM necessitates a greater presence of HR managers in the personal lives of international workers. A Multinational Corporation's (MNC) HR manager must ensure that an employee posted abroad is aware of all major aspects of the foreign country's working climate, pay plan, and other pertinent information about taxes and transportation. In addition, through cross-cultural preparation, the HR manager must assist their families in adapting to a new and diverse community. On the other hand, the HR manager's role in domestic HRM is very small. The managers' primary concern may be to provide insurance or transportation to the employees. iv. IHRM seeks to give workers more visibility because a foreign assignment presents a broader variety of learning opportunities than a local assignment, which is a problem for domestic HRM. IHRM, on the other hand, comes with a high level of risk and expense. v. As opposed to domestic HRM, IHRM has to deal with more external influences. In IHRM, for example, HR managers can have to negotiate with foreign ministers, political figures, and government regulations. HR administrators in domestic HRM, on the other hand, are rarely confronted with such issues and problems. The value of IHRM has grown as a result of the following factors: i. Availability of Quality Workforce – This applies to the fact that the quality of a global business's workforce, as well as how it is handled and exploited, is crucial to its success. 187 CU IDOL SELF LEARNING MATERIAL (SLM)

ii. Reducing Employee Incompetence – This refers to reducing employee incompetence. If an employee fails in a foreign assignment, it results in significant costs, such as relocation costs and the organization's image. iii. Globalization – The term \"globalization\" refers to the increase in the number of international organizations. As more businesses enter the global market, it is more important than ever to adopt successful IHRM strategies. iv. Effective Management – This refers to enhancing the efficiency of workers who are new to foreign assignments by strengthening the management style and procedures in the company. As a result, the success of workers on foreign assignments must be closely monitored. v. Obtaining a Competitive Advantage – This refers to gaining a competitive advantage over competitors by using a main capability, strategy, or plan. If an effective IHRM system is in place, a company achieves a competitive advantage in foreign countries. Comparison: 1. International human rights law exists outside national borders, while domestic human rights law operates within national borders. 2. Domestic HRM is concerned with managing employees from a single country, while IHRM is concerned with managing employees from multiple countries (home country, host country and third country employees). 3. In comparison to domestic HRM, IHRM is subject to more strict international laws and regulations. 4. Domestic HRM is concerned with a small number of HRM activities at the national level, whereas IHRM is concerned with additional activities like expatriate management. 5. Since the external world has less impact on domestic HRM, it is less difficult. External factors such as cultural distance and structural factors contribute to the difficulty of IHRM. 6. International human resource management is much more complicated, risky, and difficult than domestic human resource management. HRM Practices in the United States: 1. Domestic HRM is the method of obtaining, allocating, and efficiently using human capital in domestic countries in order to achieve a competitive advantage in the local or national market. 2. It is concerned with the preparation, recruiting, selection, training, encouragement, and performance assessment of human resources in the home country, as well as promotions/transfer and career growth. 188 CU IDOL SELF LEARNING MATERIAL (SLM)

3. To put it another way, it entails HRM activities for managing human resources in a domestic country. HRM Practices Around the World: 1. Corporate practices have changed dramatically over the past few decades. As a result of globalization, many businesses now have many locations around the world. These multinational corporations (MNCs) aim to follow the corporate practices of their host countries while maintaining their parent country's culture. 2. International HRM includes the management of human resources (i.e., employees) in three countries: the parent country, where the company was founded; the host country, where the parent country's branch is located; and other countries from which the company may source labour, finance, or R&D. 3. HR managers must coordinate HR strategies and practices through several subsidiaries in different countries. Simultaneously, they must make these policies and practices sufficiently flexible to accommodate differences among countries. 4. MNCs must also adjust to the host country's legal, fiscal, and administrative policies. Since MNCs mainly hire people from host countries, meeting the needs of these workers necessitates a specific HR strategy. 5. MNCs must also deal with the formalities of workers relocating from the parent country to the new country. The difficulty in international HRM is determining what type of international HR strategy to execute to meet the needs of a company's global business strategy. HR approach should be tailored to the needs of the company's corporate strategy in the case of domestic businesses. A global company is in the same boat. On the other hand, global business strategy differs from domestic business strategy, and therefore from HR strategy. To analyze the relationship between global business strategy and international HR strategy, let's look at the interaction between global business strategy and international HR strategy. IHRM necessitates a far broader perspective, encompasses a wider spectrum of activities, and faces much more challenges than domestic HRM. HRM in a foreign country is more complex than HRM in the United States. When opposed to IHRM, which encompasses a wide range of HRM activities such as international taxes, foreign currencies, and foreign locations, among other items, domestic HRM has a small scope. Again, while HR is concerned with employees of a single nationality, IHRM is concerned with employees of multiple nationalities, necessitating the development of separate HRM systems for various locations. Then there's the fact that domestic HRM just has to deal with a few external factors, while IHRM has to deal with several, such as foreign country government 189 CU IDOL SELF LEARNING MATERIAL (SLM)

regulations on staffing practices. Domestic HRM differs from IHRM in that the former requires less involvement of the HR manager in the personal lives of workers, while the latter requires more involvement, such as assisting with school admissions and helping the family in adapting to a foreign culture through cross-cultural training. Furthermore, while domestic HRM carries a low risk, foreign assignments carry a higher risk, such as the employee's and his or her family's health and safety, terrorism, and the human and financial costs of IHRM errors. As a consequence, unless properly changed, a management style that works well in a domestic setting cannot work well in a foreign setting. As a result of liberalization, we are getting closer to globalization. As a result of globalization, businesses face fierce competition in foreign markets. For economic reasons, multinational companies have invaded the markets of different countries. The reach of international business is far wider than that of local or national business. The foreign market of companies is impacted by the rapidly evolving business climate. MNCs face a number of difficulties. In order to run a successful company, HRM must develop strategies to achieve corporate business objectives. Strategic HRM is the term for this. There is no difference between SHRM and foreign HRM. To ensure smooth activity, International HRM prepares and implements policies aimed at international markets. The Society for Human Resource Management (SHRM) does the same thing. Experts have coined two new words, though they are conceptually identical. As a consequence, there should be no confusion about these two new modern management concepts among readers. International human resource management is difficult to describe precisely. In a global organization, the duties of an HR manager vary from one business to the next. It also depends on whether the manager is employed by the MNC's headquarters or a foreign subsidiary on the ground. In its broadest context, IHRM refers to the process of acquiring, allocating, and using organizational capital effectively. The primary strategic aim of human resource management in MNCs is to balance \"the needs of autonomy, coordination, and control for the purpose of global competitiveness, flexibility, and learning...\" Some claim that IHRM is identical to HRM in the house, while others argue that there are significant differences. IHRM, in particular, requires a far broader perspective, encompasses a broader spectrum of activities, and is subject to much greater risks than domestic HRM. In comparison to domestic HRM, IHRM necessitates a far more border view on even the most routine HR activities. This is particularly true for HR executives based at the MNC's headquarters. When dealing with pay issues, the HQ-based HR manager, for example, must organize pay systems in different countries using various currencies that can fluctuate in 190 CU IDOL SELF LEARNING MATERIAL (SLM)

relative value over time. A $1,00,000-per-year American expatriate in Tokyo could be liable for an increase in the future. In general, IHRM activities have a far broader scope than domestic HRM activities. The most notable distinction for HQ-based managers is that they must coordinate the recruitment, distribution, and utilization of staff across several countries. As a result of the extended reach, several issues arise for on-site administrators. Housing, health care, transportation, schooling, and recreational events for expatriates and local workers are all tasks that subsidiary HR managers are responsible for. IHRM activities are, on average, more influenced by external factors than domestic HRM activities. The HQ-based manager can request equal work opportunity policies that meet the legal requirements of both the home country and a number of host countries. Since MNCs have such a high level of exposure in foreign countries, subsidiary HR managers may have to deal with government officials, other political leaders, and a wider range of social and economic interest groups than they would if they were solely responsible for domestic HRM. HRM poses unquestionably significant risks in a domestic environment. Unfair hiring practices will result in a company being charged with breaching the law and being fined. Failure to establish constructive relationships with domestic unions can result in strikes and other forms of labour action. On the other hand, international HR managers face the same risks as domestic HR managers, as well as some fresh and more dangerous ones. Expropriation or seizure of the MNC's assets in another country is a last resort. If HR policies auto genies host country unions or significant political parties, the MNC could be forced to level the country, have its assets seized, or have the local government take majority control of its operations. This is not the type of threat that most domestic HR managers face. 8 Significant Differences Between Domestic and International HRM HRM experience in the foreign context differs from that in the domestic context in the following ways: 1. International HRM is in charge of a broader range of roles and operations, including international assignee collection, preparation, and management. Domestic HRM is only concerned with such functions in a domestic environment. 2. International HRM must deal with problems such as international taxes, foreign country employment rules, and employee international orientation, among others. Domestic HRM is not affected by these problems. 3. HR managers employed in an international setting must contend with a widely diverse workforce, as employees from different countries and cultures share the same workplace. HR administrators in the United States struggle with a population that is less diverse. 4. When posting workers to foreign locations, international HR managers must become deeply involved in their personal lives. Issues such as the employee's family's relocation, the employee's willingness to adapt to a new place, the expense of relocation, and so on must be 191 CU IDOL SELF LEARNING MATERIAL (SLM)

addressed. In the case of domestic HRM, problems with family relocation are less serious. 5. Global cultures and laws have an influence on international HRM functions. In the case of domestic HRM, only the parent nation's culture and laws must be taken into account. 6. When it comes to foreign HRM, there are more risks than when it comes to domestic HRM. Employee health and safety, intellectual property rights security, terrorist threats, and other risks are among them. 7. International HRM compensation planning is more complex than domestic HRM compensation planning since a number of allowances and changes must be taken into consideration when assessing remuneration for international workers. 8. International HRM preparation covers pre-departure and post-departure cultural training, as well as experience of international taxes, currency volatility, diversity management, and other topics not covered in domestic HR training. 9.3 SUMMARY • Strategic industrial relations are a method for analyzing the strategic choices made by actors in industrial relations processes, such as employers, employees and their unions, and policymakers, as well as the consequences of those choices for industrial relations outcomes. • Strategic industrial relations are founded on the assumption that these actors select the policies and institutional frameworks that they believe will better enable them to achieve their goals. • Strategic industrial relations, on the other hand, varies in one important way from strategic management and strategic human resource management. Strategic industrial relations have a wider emphasis than strategic management and strategic human resource management, which focus on the selection and execution of choices that advance the employing organization's objectives. Strategic industrial relations, in particular, focuses on defining and executing choices that promote the individual or collective goals of employees, worker groups, and industrial relations policymakers, as well as the goals of employers. 9.4 KEYWORDS • MNCs – Multinationals • IHRM – International Human Resource Management • DHRM – Domestic Human Resource Management • HRM – Human Resource Management 192 CU IDOL SELF LEARNING MATERIAL (SLM)

9.5 LEARNING ACITIVITY 1. Visit the BPO service industry and collect the data on performance Appraisal ____________________________________________________________________________ ____________________________________________________________________________ 2. Visit the manufacturing industry and collect the data on Strategic approach to HRM. ____________________________________________________________________________ ____________________________________________________________________________ 9.6 UNIT END QUESTIONS A. Descriptive type Questions Short Questions 1. What is the scope of strategic HRM? 2. What should be the strategy of HRM? 3. Which of the following is closely related with strategic HRM? 4. What is strategic approach to HRM? 5. How do you implement strategic HRM? Long Questions 1. What are the important elements of a good appraisal system? 2. Why is performance appraisal needed? 3. Briefly explain training versus education. 4. Who are career anchors? 5. Compare the functions of HRM and HRD. B. Multiple choice Question 1. Which is not a recruitment technique? a. Interviews b. performance appraisal c. psychometric testing d. ability tests 193 CU IDOL SELF LEARNING MATERIAL (SLM)

2. Which one describes the best about '360-degree feedback'? a. a method used to appraise employees b. a system where managers give feedback to all their staff c. a system where feedback on any individual is derived from peers, subordinates’ supervisors and occasionally, customers d. a development tool 3. Which of the following would not relate to flexible reward package? a. ability to 'buy and sell' leave days b. non-pay items such as child care vouchers c. cafeteria benefits d. performance-related pay 4. Which one of the below said factors relates to a creative factor in production? a. Land b. Capital c. Consumers d. Human Resources 5. People participate in the role of contributors to prod. are called __ a. Capitalist b. Land owners c. Human Resources d. Consumers Answer 194 1. (b) 2. (e) 3. (d) 4. (d) 5. (e) 9.7 REFERENCES Text Books – CU IDOL SELF LEARNING MATERIAL (SLM)

• Armstrong, Michael & Baron Angela. (2005). Handbook of Strategic HRM (1st ed.). New Delhi: Jaico Publishing House. • Mello, Jeffrey A. (2007). Strategic Human Resource Management (2nd ed.). India: Thomson South Western. Reference Books – • Regis, Richard. (2008). Strategic Human Resource Management & Development (1st ed.). New Delhi: Excel Books. • Agarwal., T. (2007). Strategic Human Resource Management. New Delhi: Oxford University Press. • Dhar, Rajib Lochan. (2008). Strategic Human Resource Management (1st ed.). New Delhi: Excel Books. 195 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT-10: GLOBAL HUMAN RESOURCE MANAGEMENT Structure 10.0 Learning Objectives 10.1 Introduction 10.2 Evaluating the effectiveness of SHRM 10.3 Measurement and strategic challenge of SHRM 10.4 Summary 10.5 Keywords 10.6 Learning Activity 10.7 Unit End Questions 10.8 References 10.0 LEARNING OBJECTIVES After studying this unit, you will be able to: • Describe Global HRM • Understand the scope of Global HRM • Describe the effectiveness of SHRM • Analyze Strategic challenge of SHRM • Outline Scope for SHRM 10.1 INTRODUCTION Human resource management in a public or private company that operates in more than one country or continent is known as global human resource management. It involves helping, overseeing, and engaging workers all over the world, while enforcing common policies while also considering local rules, customs, and culture. Although a company may use a common brand to offer similar goods and services all over the world, staff in different operating countries may have very different requirements. Typical working hours and salary benchmarks can vary. Workplace infrastructure, communication protocols, and management systems can be affected by cultural differences. 196 CU IDOL SELF LEARNING MATERIAL (SLM)

Furthermore, each country's laws may necessitate a unique approach to taxation, employment contracts, statutory benefits, and performance management. Under a single employer brand, this can be a difficult collection of variables to handle. The most up-to-date global HR cloud computing systems and solutions will assist organizations with policy planning and management, as well as ensuring compliance with local laws. 10.2 EVALUATING THE EFFECTIVENESS OF SHRM The method of evaluating how well HRM is applied in a company is known as HRM assessment. In the first chapter, HRM was described as the efficient and effective use of human resources to achieve an organization's objectives. The most important question to ask in terms of HRM evaluation, based on this concept, is: What is the degree of efficient and effective use of human resources in order to achieve the organization's goals? For a comprehensive evaluation, it is important to evaluate how efficiently and well the organization's personnel have been used in achieving the organization's objectives. An HRM model was implemented in the first chapter. In order to achieve organizational objectives, it is possible to hypothesize that targets, strategic goals, and the generic intent of HRM must all be met by successful implementation of specific HRM roles. In an ideal world, all HRM activities would be completed successfully, and all HRM objectives would be fulfilled. HRM priorities must be met in order for HRM strategic objectives to be met, which must be met in order for HRM's generic purpose to be met. The generic objective of HRM, which is to build and sustain an efficient and contented human force that contributes the most to the growth and progress of the organization, can be accomplished if the organization's goals are met. What are the benefits of conducting an HRM function assessment? One goal is to determine whether HRM functions are being performed efficiently. If HRM tasks are performed well, HR professionals can feel at ease when working. Another (and even more important) explanation is to see if the HRM programmes in place are assisting the organization in achieving its strategic objectives, mission, and vision. HRM is responsible for ensuring that the organization's strategic objectives are met. What role does human resources management play in achieving the organization's strategic objectives? Is there a clear difference between the two? How much would it cost if that's the case? Is the magnitude of the impact increasing in recent years? These questions can be answered by evaluating the HRM function. Another explanation for evaluation is to increase HRM's importance within the organization's awareness. If the appraisal outcomes are optimistic and substantive, the HRM department's and its professionals' reputations will increase. It will also help the CEO and other managers cultivate a positive attitude toward human resources management. The aim of HRM evaluation is to justify the costs of implementing HRM programmes. The findings of the evaluation can also be used to determine the strengths and weaknesses of the HRM system, and then take corrective action to improve the system's efficiency and effectiveness. Glueck (1979) proposes four criteria for 197 CU IDOL SELF LEARNING MATERIAL (SLM)

evaluating the HRM function. They are: 1. To justify HRM’s existence and budget. 2. To improve the HRM function by providing a means to decide when to drop activities and when to add them. 3. To provide feedback from employees and operating managers on HRM effectiveness. 4. To help HRM make a significant contribution to the organization’s objectives. Ivancevich (1992, p. 772) writes: “There is an old motto in HRM that, if you can’t measure it, forget it. The premise of this saying is that, if you can’t show what contribution you are making, there is little hope that anyone will pay attention to your requests. Therefore, measurement in terms of evaluation is a high priority need in any HRM unit. For that matter, showing a contribution in any unit in an enterprise should be a top priority.” Thus, evaluating the success of the HRM function is a work that requires a high priority by the HR Department of the organization. With the increasing emphasis placed on strategic contribution, competitiveness, and cost control, there has been a greater need to justify the existence of human resource practices, activities, and programmes (Greer, 2001). Dimensions of Evaluation HRM evaluation can be broken down into three different aspects or dimensions. The first dimension assesses the quantity and efficiency of each HRM function. Each HRM work should ideally be carried out in a systematic and formal manner. The key question in this dimension is whether each function has been implemented correctly. The achievement of HRM priorities and strategic goals is the second component. This dimension is concerned with determining the extent to which HRM priorities and strategic goals have been met. The assessment of the department for human resources in the organization is the third component. It reflects on the organization's HR Department's performance and how far it has progressed. There must be a time limit for assessment, which may be one year, six months, or four months. It is necessary to conduct an assessment at least once a year. What are the assessment criteria for each dimension? There are two types of assessment criteria: subjective criteria and quantitative criteria. The performance of the HR department, in the view of the managers, is a subjective criterion. An objective criterion is the average time it takes to fill work openings. Exhibit 21-11 lists some helpful guidelines for assessing HRM efficiency and effectiveness by function. For each HRM function, objective and subjective criteria may be used, as shown in the diagram. Exhibit 21-12 outlines several valuable metrics for assessing HRM performance and efficacy in terms of HRM priorities and strategic goals. It is possible to determine the degree of accomplishment of HRM's goals and strategic objectives using a combination of objective and subjective parameters. Exhibit 21-13 provides several valuable metrics for measuring the HR Department's performance and effectiveness. The three- 198 CU IDOL SELF LEARNING MATERIAL (SLM)

dimensional evaluation would be more thorough, but it will be more detailed and time- consuming. Since the benefits of evaluation outweigh the costs of evaluation, a reasonable amount of HRM evaluation is needed. Exhibit 21-11 Criteria for Evaluation of Efficiency and Effectiveness of HRM Functions Function Objective Criteria Subjective Criteria Job Design Number of complaints about job Employee satisfaction about Job Analysis design behavioural elements of job design Number of jobs covered by job Employees’ satisfaction about description and job specification the contents of the job descriptions Number of times of up- dating the job descriptions and job Managers’ satisfaction about specifications usefulness of job descriptions and job specifications Human Resource Planning Difference between forecast job Top and Departmental vacancies and actual job Managers’ satisfaction about vacancies having the right employees at the right time at the right place. Number of job vacancies not forecasted Number of current employees not considered for replacement but competent Recruitment Any surplus or shortage Top and Departmental happened Managers’ satisfaction about having suitably qualified job Cost per recruit (total recruits recruitment cost /number of recruits) 199 CU IDOL SELF LEARNING MATERIAL (SLM)

Ratio of qualified recruits to unqualified recruits Selection Percentage of employees Top and Departmental selected based on validated Managers’ satisfaction about selection methods quality of selection schemes Number of tests validated Rigor in selection Availability of more objective evaluation scheme for employee selection Hiring Complaints about lapses of the Top and Departmental Induction employment appointments Managers’ satisfaction about Performance Evaluation contents of the appointment letters and other related documents Percentage of new employees Managers’ satisfaction about inducted induction programmes of their new subordinates Number of hours of induction Rating of quality of induction received by inductees Availability of different PE Managers’ satisfaction about schemes for different categories quality of PE schemes of employees Rating of quality of PE by Percentage of employees whose employees performance is 200 CU IDOL SELF LEARNING MATERIAL (SLM)