Challanges of Managing a GLobal Workforce

TABLE OF CONTENTS

LIST OF FIGURES.....................................................................................................IVLIST OF TABLES........................................................................................................V1.0 INTRODUCTION...............................................................................................- 1 -

1.1 Research Background......................................................................................- 1 -1.2 Topic Justification...........................................................................................- 1 -1.3 Objectives of the study....................................................................................- 2 -1.4 Significance of the study.................................................................................- 3 -

2.0 LITERATURE REVIEW....................................................................................- 4 -2.1Workforce diversity:.........................................................................................- 5 -

2.1.2 Importance of Workforce Diversity..............................................................72.2 Cultural Dimensions......................................................................................- 13 -

2.2.1 Diversity Training:.................................................................................- 15 -2.3 Human Resource Planning:...........................................................................- 17 -

2.3.1 Recruitment:...........................................................................................- 18 -2.3.2 International Staffing/ Deployment:.......................................................- 21 -

2.4 Motivation.....................................................................................................- 24 -2.4.1 Maslow’s Theory....................................................................................- 25 -2.4.2 Herzberg’s Theory:.................................................................................- 27 -2.4.3 Motivation Applied:...............................................................................- 28 -

2.5 Organizational Practices:...............................................................................- 29 -2.5.1 IBM:.......................................................................................................- 30 -2.5.2 Nestle:.....................................................................................................- 33 -2.5.3 Colgate-Palmolive:.................................................................................- 34 -

2.6 Critical Review:.............................................................................................- 38 -3.0 RESEARCH METHDOLOGY.........................................................................- 38 -

3.1 Defining the problem and the research objectives:.......................................- 38 -3.2 Developing the Research Plan.......................................................................- 39 -

3.2.1Determining Specific information needs.................................................- 39 -3.3 Implementing the Research Plan Collecting and analyzing the data.............- 41 -3.4 Interpreting and Reporting the Findings........................................................- 41 -3.5 Limitations of the Study................................................................................- 41 -

4.0 DATA ANALYSIS AND FINDINGS..............................................................- 42 -5.0 CONCLUSION AND RECOMMENDATIONS..............................................- 55 -

5.1Conclusion:.....................................................................................................- 55 -5.2 Recommendations:........................................................................................- 56 -

REFERENCES........................................................................................................- 57 -BIBLIOGRAPHY...................................................................................................- 62 -APPENDICES.........................................................................................................- 65 -

APPENDICE A: Strategic Human Resources.....................................................- 65 -APPENDICE B: Differences between EEO/Affirmative Action and Diversity. - 66 -

III

LIST OF FIGURES

Page No

Figure 2.1: Global Employee Selection Factors ……………………………….21

Figure 2.2: Motivational Process……………………………………………….24

Figure 2.3: Maslow’s Hierarchy of Need……………………………………....25

Figure 3.1: Marketing Research Process………………………………………38

Figure 4.1: Diversity Management, Equal Employment Opportunity……...... 43

Figure 4.2: Most productive Sources of Hiring.................................................46

IV

LIST OF TABLES

Page No

Table 2-1 Population of Countries………………………………………..4

Table 2.2 Continuum of Diversity Approach…………………………….12

Table 2.3 Selected Countries on Hofstede’s Cultural Dimensions………13

Table 2.4 Types of Recruitment Methods………………………………..19

Table 2.5 Most effective means of hiring a diverse workforce…………..20

Table 2.6 Employee Development Approaches………………………….23

Table 2.7 Women in IBM Workforce…………………………………….31

Table 3.1 Sources of Secondary Data…………………………………….40

Table 4.1 Dimensions of culture………………………………………….44

Table 4.2 Application of Maslow’s Motivation Theory…………………..53

V

Chapter 1 Introduction

1.0 INTRODUCTION

1.1 Research Background

Globalization is the dominant driving force in the world economy. The downfall of

communism, the demise of trade barriers, and the advancement of technology have

altered the way organizations operate. In this age there is a free flow of capital, goods

and services across borders making geographical boundaries meaningless. The world

has become a global market where companies are in a cut throat competition with

domestic and international competitors. In the past a global company was defined as

one which sold its goods in the international market this definition has changed

drastically. Now global companies have a ‘manufacturing presence’ in numerous

countries. Organizations are becoming aware of the fact that in order to satisfy global

customers they have to get close to them and establish a strong local presence. This

can be achieved by hiring a workforce which is similar to their customers. This not

only creates an excellent interaction between customers and employees leading to

better business for the organization but also a diverse workforce. Where

globalization has opened new doors of opportunities for organizations it has brought

many challenges as well. Amid these challenges is managing the global workforce.

Recruitment, development, deployment, and motivation of the workforce have

become challenging processes.

1.2 Topic Justification

Driven by global competition and accelerated by technological achievements

organizations and their workforce are in an unparalleled transformation process.

Globalization has changed the way organizations operate. Now when organizations

are setup they not only consider their local environment but also the global

environment. Due to this there is a trend towards smaller, independent operating units

and smaller companies staffed by employees recruited from a world wide talent pool.

Organizations are now focusing and striving for an empowered workforce. Driven by

the demands of a global workforce and the central role these individuals play in the

viability of the business the human resource function has become a core business

activity. Achieving goals in the global marketplace hinges on people. Human resource

1


technology is all about finding, developing, utilizing, maintaining, retaining and

managing the right number and type of people for the organization.

1.3 Objectives of the study

The challenges of managing a global workforce were translated in to the following

objectives.

1. To study the area of workforce diversity and determine its importance for the

organization.

2. To illustrate the need for a strong corporate culture for cross- cultural

communication among the workforce and the management.

3. To evaluate the methods required for effective recruitment, deployment and

development of a global workforce.

4. To critically evaluate the practices considered necessary to motivate a global

workforce.

5. To critically asses the practices that are currently being used by global

organizations to manage their workforce.

2


1.4 Significance of the study

Human Resource Management has always been a fascinating field. Dealing with

employees, managing them and motivating them to work in the interest of the

organization are interesting and changing areas. Globalization has affected Human

Resource Management practices A decade ago there was a trend of foreign nationals

coming to Pakistan to work mostly in the Multinationals and global companies. But

this has temporarily halted, mainly due to the current unstable political conditions and

law & order situation in Pakistan. However owing to its strategic geographical

location and its strong position to act as a bridge between the East and the West,

Pakistan is on the road towards becoming an international hub of business activity. A

global and diverse workforce may not be an issue at the moment but it would be of

great importance in the coming years. I will soon be stepping into the corporate world

and the understanding of a global workforce and effective ways of managing it are

essential for my success as a future Hr manager. This research will assist in

understanding this phenomenon and how to deal with it effectively so that it

contributes in the overall success of an organization.

3

Chapter 2 Literature Review

2.0 LITERATURE REVIEW

Throughout the world in the developed and industrialized countries such as those in

the European Union, Japan and the United States, population growth has reduced

significantly leading to a slower growth in the number of workers and consumers. On

the other hand some countries especially Asian countries have witnessed an increase

in the population growth rate. These have been illustrated in the table below.

Table 2.1: Population of Countries,

Country Population in

Millions

Country Population in

Millions.

China 1318 India 1747

India 1132 China 1437

United States 302 United |States 420

Indonesia 232 Indonesia 297

Brazil 189 Pakistan 295

Pakistan 169 Nigeria 282

Bangladesh 149 Brazil 260

Nigeria 144 Bangladesh 231

Russia 142 Dem. Rep. Congo 187

Japan 128 Philippines 150

SOURCE: 2007 WORLD POPULATION DATA SHEET.

To take advantage of this growth Firms throughout the world have established

operations, formed joint ventures or mergers in these countries. This had led to them

employing a workforce coming from different backgrounds leading to a very diverse

workforce. There are many factors affecting International HR management (Robert &

John, 2004 pp.6-9)

Legal and Political Factors

Economic Factors

Cultural Factors.

4


In this research cultural factors have be discussed and analyzed in details as they are

the most important concern affecting international HR management.

2.1Workforce diversity:

Workforce Diversity is on the increase in many organizations. “According to the

Census Bureau, nonwhites will represent more than one-third of the U.S. population

by the year 2010 and close to half of the U.S. population by the year 2050. By the

year 2005, the ethnic minority share of the workforce will likely reach 28 percent, up

from 18 percent in 1980 and 22 percent in 1990. It is projected that the Hispanic-

American population will be the largest minority group in the U.S. by the year2010”

(1999, Workplace Diversity ) The number of women in the workforce is also on the

increase in organizations leading to a number of discrimination issues, as some

organizations do not select women for certain kind of jobs. Apart from women the

workforce has changed in the areas of age and religion as well. Organizations would

have to make certain policies that cater to the needs of the aging workforce, people

with disabilities and different religious beliefs.

The broadest concept of Diversity is recognizing differences among people. However

it is a term which has no specific definition as it is defined differently by different

organizations. There is no single right answer to the question of what is diversity.

According to Lee Gardenswartz and Anita Rowe, principals of Gardenswartz &

Rowe, a California-based diversity consulting and training team, the trend seems to

favor a broad definition, one that goes beyond the visible differences such as race,

ethnicity, age, and gender. “Diversity includes a number of important human

characteristics that affect an individual’s values and opportunities and perceptions of

self and others at work. These primary characteristics include, but are not limited to

age, ethnicity, gender, ability and race. They also include secondary characteristics

such as: geographic location, military experience, work experience, income, religion,

first language, organizational role and level, communication style, family status, work

style, and education” (The business case for Diversity). A narrow definition focusing

only on a few visible characteristics, is not only too exclusive, but is also too closely

linked to affirmative action and Equal Employment. Opportunity

5


“EEO became the law by the passing of the Civil Rights Act of 1964. It prohibits

employers from making employment decisions based on an individual’s race, color,

religion, gender or national origin. It also requires that the granting of benefits of any

federal financial assistance program may not be based on race, color and national

origin” (The business case for Diversity).

“Affirmative Action is government-initiated to comply with the law and is derived as

a means to redress past discriminatory practices, with a goal of eliminating under-

representation of women, minorities, and people with disabilities in the workplace”

(The business case for Diversity). On the other hand diversity is not about correcting a

past imbalance, being a good corporate citizen, or even about the law. Diversity is

about constructively using those things that make us different and unique that reaches

far beyond generalized group descriptors (The business case for Diversity).

Businesses and organizations have heavily relied on affirmative actions laws to ensure

equal employment opportunities. The failure of this dependence upon legislation is

that it doesn't address the full spectrum of diversity in the workplace.

Although managing diversity can be confused with affirmative action and valuing

differences, it really is in a class all by itself. Unlike affirmative action which assumes

that the individual employees alone must adjust themselves to the organization,

managing diversity takes responsibility and assumes that it is the manager's role to

ensure that the organization is compatible with the individual employee (Roosevelt,

1991). Managers must be careful however, to make decisions based on need and not

preference, convenience and/or actions of the past. Affirmative action is also external,

focusing on recruitment of employees, upper mobility, and retention whereas

managing diversity is more internal, narrowing in on the potential of the employee.

Managing diversity on the other hand, is about helping the manager learn how to

bring the potential of employees to the surface, thereby benefiting the manager and

the organization. Finally, affirmative action is motivated by the law and social

responsibility. Managing diversity, however, is a matter of business (Matti, 1998 pp.

161-173). As diversity grows in the workplace, organizations who are not up to speed

with the issue of diversity and how to manage it, will eventually lose their ability to

compete with the rest of the corporate world.

6


According to R. Roosevelt Thomas, the next evolution of diversity is best referred to

as valuing diversity. The main objectives of valuing diversity include awareness,

education, and positive recognition of the differences among people in the workforce.

Generally, valuing differences entail having a greater understanding and acceptance

of people, their ethnic backgrounds, their gender, and religion. Managing diversity

looks beyond these factors and instead focuses on how relationships among different

people can be improved and understood to better the organization as a whole.

While these three interventions build upon one another, when affirmative action is

tied together with valuing and/or managing diversity, diversity often becomes tainted

by negative perceptions of affirmative action and is therefore frequently

misunderstood.

This research paper focuses on this very aspect of not only valuing diversity but to

manage it effectively as well.

2.1.2 Importance of Workforce Diversity

Following are the few key factors that make workforce diversity important to

organizations.

As a Social Responsibility:

Workforce diversity represents an organizations role towards corporate and social

responsibility (McInnes, 2000).

As an Economic Payback:

Many groups of people who have been excluded from workplaces are consequently

reliant on tax-supported social service programs. Diversifying the workforce,

particularly through initiatives such as welfare-to-work, can effectively turn tax users

into tax payers (McInnes, 2000).

As a Resource Imperative:

Today’s labor pool is dramatically different than in the past. It is no longer

homogenous but consists of people from a vast array of backgrounds and life

7


experiences (McInnes, 2000). One of the biggest budget items in organizations is the

amount they spend on human resources in the form of salaries, benefits, training,

development and recruitment. In order to get a healthy return on investment (ROI) in

human capital and maximize competitive advantage, it is important to recognize that

the workforce will grow in the number of women, people of color and immigrants

each year. An environment where all employees feel included and valued yields

greater commitment and motivation. It also means fewer resources spent on training,

turnover and grievances.

As a Legal Requirement:

Non-compliance with Equal Employment Opportunity or Affirmative Action

legislation can result in fines and/or loss of contracts with government agencies. It is

mandatory for companies to discourage discriminatory practices (McInnes, 2000).

As a Marketing Strategy:

Customer bases are becoming even more diverse than the workforce. Buying power,

particularly in today’s global economy, is represented by people from all walks of life

ethnicities, races, ages, abilities, genders, sexual orientations, etc. (McInnes, 2000).

To ensure that the products and services being offered by the organization appeals to

diverse customer base, it needs to have a diverse workforce. Employees who

understand the needs and backgrounds of the diverse customer base are more likely to

satisfy them. As this diverse customer base is here to stay organizations can not do

without recruiting and retaining a staff that reflects the diversity of the marketplace.

As a Business Communications Strategy:

The workforce and the product and services markets are becoming more and more

diverse. Having a diverse workforce would help in the external and internal

communication process of the organization. As mentioned above a diverse workforce

would be able to communicate better with a diverse customer base (McInnes, 2000).

As a Capacity-building Strategy:

8


Organizations that prosper have the capacity to effectively solve problems, rapidly

adapt to new situations, readily identify new opportunities and quickly capitalize on

them. This capacity can be measured by the range of talent, experience, knowledge,

insight, and imagination available in their workforces (McInnes, 2000). Employees

from varied backgrounds can bring different perspectives, ideas and solutions, as well

as devise new products and services, challenge accepted views and generate a

dynamic synergy that may yield new niches for business opportunity. According to

Dr. Santiago Rodriguez, Director of Diversity for Microsoft, “true diversity is

exemplified by companies that hire people who are different knowing and valuing that

they will change the way you do business.”

Flexibility ensures survival:

Diversity is a training ground that requires hard work, commitment to business ideals,

and an ability to learn how to handle change by adapting to new situations and learn

from people who are different from us. Because change is the only certainty ahead,

making adaptations required by diversity keeps an organization flexible and well-

developed, strengthening the organizations ability to respond to changing

environment (McInnes, 2000).

Competitive Advantage:

It is clear that companies that diversify their workforces will have a distinct

competitive advantage over those that don’t. Further, it is clear that the greatest

benefits of workforce diversity will be experienced (McInnes, 2000).

Managing Diversity in the workplace is more than just an acquired skill, it is "a way

of thinking" (Roosevelt, 1991). It involves creating an environment that allows all

employees to contribute to organizational goals and experience personal growth. The

key is to help employees reach their full potential by creating an environment that will

allow them to be motivated and productive and ultimately, be beneficial for the

organization.

There are a few challenges that HRM departments face while developing strategies to

managing diversity. In the past one challenge was to convince top level management

that diversity was a global issue but now as the importance of workforce diversity has

9


been acknowledge it is no more a challenge., however , leaders of businesses and

organizations are concerned that diversity initiatives are too expensive, upsets

productivity, and causes disruption in the workplace (Mathewes, 1998). Another

challenge that HRM departments face is how to transform the workforce that exists

today, mainly comprising of females, immigrants, minorities, and older workers into a

more skilled, productive and adaptable resource. HRM departments have also been

concerned with their approach towards the changing workplace. They don't know

whether to continue treating employees as "money-makers" or to start treating them as

valuable assets to the organization.

HRM departments must work collaboratively with top executives and line managers

to develop a strategic plan that will meet diversity challenges. In working with top

executives, HRM can look at the organizations mission and goals look at strategic

plans for the future and incorporate a diversity plan that identifies the organizational

culture and workforce in relation to gender, race, age, skills and knowledge. This top-

down approach to workforce planning helps the organization to define goals and

objectives and translates them into HRM objectives to determine needs. This, results

in defining personnel and human resource roles and devises strategies for meeting

these goals, and assesses whether these goals have been met. “In addition, working

closely with line managers, HRM can integrate employee profiles, goals,

skills/competencies into the organizational culture, enabling HRM to hire workers

with the right qualifications, for the right jobs, and in the right locations” (Mathews,

1998,). This bottom-up approach to workforce planning identifies information

regarding employees by analyzing the skills, retirements, turnover and retention of

employees, while considering the balance of social representation and affirmative

action. Diversity factors of age culture religion gender etc will come into play in all

the HR processes and have been discussed in the coming text.

Organizations can approach diversity management from different perspectives. It can

be seen from the figure that the continuum can run from resistance to creation of an

inclusive diversity culture (Robert & John, 2004 pp.121-122).

10


Table 2.2: Continuum of Diversity Approaches

Resistance Fairness Access-

Legitimacy

Diversity

Culture

Viewpoint Diversity not

important and

does not effect

management.

Diversity creates

conflicts and

problems.

Diversity

provides

opportunities for

employers and

organizations

Diversity culture

permeates

organizations

Action Resistance to

Change

Denial of

problems

Diversity training

Affirmative

Action

Compliance

Focus on

Protective groups

Build “Diversity

Acceptance”

culture.

Reduces conflicts

in Multicultural

workforce.

Proactive efforts

on diversity.

Employees are

seen as resources.

Consequences Protect Status

Quo

Increased

possible legal

liabilities

Discrimination

addressed

through internal

responses.

Minimize legal

exposure

All employees are

valuable to recruit

and retain.

Acceptance leads

to internal

problem solving.

Effective

relations among

all employees.

Diversity access

through

organizations.

SOURCE: 2004 HUMAN RESOURCE MANAGEMENT

One of the things and stands out in a diverse workforce is the differences in cultures.

A global workforce consists of people belonging to different cultures who have

different values and beliefs. The corporate culture serves the important purpose of

uniting employees on a common platform. “Organizational culture is a pattern of

basic assumptions that are considered valid and that are taught to new members as the

way to think, perceive and feel in the organization.”(Nelson & James, 1994). Culture

pervades and radiates meaning into every aspect of our lives. Its impact on lives and

work is huge. Hence it is important for the organizations to understand different

cultural landscapes around the world and how they affect the way business is

11


conducted. According to Hodgetts “culture is acquired knowledge that people use to

interpret experiences and generate social behavior. This Knowledge forms values,

creates attitudes and influences behavior” (Hodgetts & Luthans, 2003 p.108).

In order to understand the behavior of people belonging to different cultures George

Hofstede conducted a research. Data was gathered from over 116,000 respondents

from over 70 countries around the world, making it the largest organizational study

ever conducted (Hodgetts & Luthans, 2003). All the respondents were employees of

IBM from all over the world. The results of the research have been illustrated in the

table below. Although this research was not recently conducted but it still has bearing

on cultural dimensions and the most authentic study conducted yet.

Table 2.3: Selected Countries on Hofstede’s Cultural Dimensions

Country Power

distance

IndividualismMasculinity/

Femininity

Uncertainty

Avoidance

Long \Term

Orientation

Brazil 14 26 27 21 6

Canada 39 4 34 41 20

France 15 10 35 10 N/A

UK 42 3 9 47 18

India 10 21 20 45 7

Israel 52 19 29 19 N/A

Japan 33 22 1 7 4

Mexico 5 32 6 18 N/A

Netherlands 40 4 51 35 10

South Africa 35 16 13 39 N/A

South Korea 27 43 41 16 5

US 38 1 15 43 17

12


SOURCE: 2004 HUMAN RESOURCE MANEGEMENT

2.2 Cultural Dimensions

The study focused on the dimensions of culture. These are as follows

Power Distance:

“Power distance is the extent to which less powerful members of organization accept

that power is distributed equally” (Hofstede & Michael, 1984). As power distance

score increases there is less status and authority difference between supervisors and

subordinates. Countries such as Canada, USA and France are countries with low

power distances and employees are involved in the decision making process. On the

other hand countries like South Korea, India and Mexico where high Power distances

exist, employees tend to follow orders as matter of procedure. It is cleat that reactions

to management authority differ among cultures hence organization would have to

apply a management style which would be accepted by every employee.

Individualism:

It is the extent to which people prefer working as a member of a group or individually

(Hodgetts & Luthans, 2003 p.117). There is a very clear difference between Asian and

the countries of the west. Asian countries are more group oriented where as Western

countries such as the United Sates are more individualistic.

Masculinity/Femininity:

This cultural dimension refers to the degree to which Masculine values prevail over

Feminine values (Hodgetts & Luthans, 2003 p.117). Masculine values identified by

Hofstede were assertiveness, performance orientation, money and success. Feminine

values were quality of life, personal relationships and caring. It clearly shows in the

study that different countries had different values.

Uncertainty Avoidance:

13


“It is the extent to which people feel threatened by ambiguous situations, and have

created beliefs and institutions that try to avoid these” (Hodgetts & Luthans, 2003

p.117). Countries focusing on uncertainty avoidance such as Japan and France tend to

be more resistant to change. Where as in United States and Britain employees prefer

unstructured situations and accept risks.

Long term Orientation:

This dimension was introduced by Hofstede a decade after identifying the above

dimensions. It focuses on the short term and long term values people have. Short term

values focus the past. These include respecting tradition and fulfilling social

obligations where as Long term values include Thrift and persistence. Short term

orientation was present in United States and France. Long term orientation was found

in Japan and India

It is clear from Hofstede study that cultural dimensions differ from country to country.

Therefore, HR activities appropriate for employees of one country would not be

appropriate for the employees of another country due to cultural differences.

Thus organization would need to have a strong corporate culture that promotes equity.

A strong corporate culture would unify organization’s workforce, enhance

communications and enable global teams to work together to achieve a single

common purpose. The first step towards having a strong corporate culture is the

acceptance of diversity by the employees. This can be achieved through diversity

training.

“The global HR manager plays a pivotal role in developing, protecting and

communicating the corporate culture. It occurs through every step of the process,

from developing policies that can be embraced by all members of the organization to

communicating corporate values at the recruiting and hiring stages, as well as to

training and performance management that maintains consistent corporate messages”

(|Michael, 1997).

2.2.1 Diversity Training:

Diversity training has three components

14


Legal awareness:

Legal awareness is done in order to minimize discrimination and harassments lawsuits

(Robert & John, 2004, p 125.). It is a very limited approach to diversity as discussed

earlier diversity goes far beyond legal limitations.

Cultural Awareness:

Cultural awareness focuses on building an understanding of different cultures among

employees. Cultural training assists the employees and the management to accept the

differences in people with widely varying cultural backgrounds (Robert & John, 2004,

p.125).

Sensitivity Training:

Sensitivity training is the most difficult as it aims to sensitize people to the differences

among them and how their words and behavior are seen by others (Robert & John,

2004, p.125).

It is a common belief that usually diversity training does not work and are an

unnecessary expenditure by the organizations. The two most common complaints

about diversity training are

Diversity training tends to draw attention to differences, building walls rather

then breaking them down.

Much of the content used in diversity training is viewed as “Politically

Correct’ which blames majority individuals white people in mot cases for past

wrongs.

These problems can be overcome by implementing the diversity training programs

effectively. Diversity training should focus on behaviors rather then just attitudes and

beliefs (Robert & John, 2004, p.125).

15


One of the most important aspects of managing a diverse global workforce is their

recruitment, retention deployment and development. As a company's most expensive

assets is its human capital, the human resources of the organization. The management

of human resources focuses on: (Global Human Resources Management

and Organizational Development)

Recruitment and selection of employees who can succeed at their jobs and

who will stay with the organization.

Making sure that employee's abilities are optimally nurtured and developed so

that the company can receive an optimal return on the investment made in

these employees.

Organizational structure influences all HR management functions from recruitment to

retirement. Thus these process have to be implemented keeping in mind the over all

strategy, mission and goals of the organization (Cascio, 2003, p.630).

2.3 Human Resource Planning:

HR mangers need to analyze the domestic and international labour market to identify

the people with the right set of skills as required by the organizations. They also have

to estimate the supply of people with the necessary skills that will be required by the

organizations in the future (Casio ,1993).

8


2.3.1 Recruitment:

Global companies can follow 3 strategies for recruiting employees.

Expatriates:

Expatriates are employees employed form the company’s parent country but

assigned to operations in other countries. Expatriates are a major source of

increasing organization’s global capabilities. “Experienced Expatriates can

provide a pool of talent that can be tapped as the organization expand its

operation broadly into even more countries” (Robert & John, 2004, p.11).

Host country Nationals

Host country employees are employees hired from the country where the

operations are located. This is a very important strategy as it conveys the

message to the people of the host country that the company cares for them by

providing them employment opportunities. As discussed in the importance of

a diverse workforce they are familiar with the customer base culture and

customs and would be able to build a better relationship with them. They

provide a cost advantage for the organization of the host country is under

developed or a developing country due to the differences in compensation

levels (Robert & John, 2004, p.12).

Third Country Nationals:

Third country nationals are employees who are citizens of one country,

working in a second country, employed by the organization headquarter in a

third country (Robert & John, 2004, p.12). This strategy seeks the best person

for the job regardless of nationality. This is the most suitable strategy as it is

aligned with what a global organization is but it has its setbacks. Secondly,

Managers will not think outside their units, let alone countries, when there is a

job opening or finding the expertise to solve a specific problem, such as poor

market response to a new consumer product or dysfunctional work

relationships that are due to cross-cultural ignorance.

9


Organizations can use either Internal or external recruiting sources. These sources

have been identified in the table below. For strategic recruitment stages Refer

Appendix B:

Table 2.4: Types of Recruitment Methods

Internal Recruitment External Recruitment

Organizational Databases College and University Recruiting

Job posting School Recruiting

Promotions and Transfers Labor Unions

Employee Referrals Employment Agencies and Search Firms

Competitive Sources

Media Sources

SOURCE: 2004 HUMAN RESOURCE MANAGEMENT

10


In order to find the Hiring Sources of multinationals, a research of over 200

multinational companies was conducted by Career X roads in 2006. The table below

depicts the sources most commonly used in order to hire a diverse workforce.

Table 2.5: Most effective means of hiring a diverse workforce.

Very

Productive

Productive Somewhat

Productive

Not

Productive

Not Applicable

Affinity

Groups

9 % 18% 21 21 32

Niche

(Diversity) Job

Boards

3% 18% 24 41 15

Major Job

Boards

6% 28% 43 20 3

Diversity

Career Fairs

11% 11% 34 40 3

Dedicated

Diversity

Recruiters

3% 6% 15 6 70

Dedicated

Diversity

Sources

6% 3% 9 3 79

Placement

Agencies

3% 15% 32 26 24

Employee

Referrals

11% 23% 46 14 6

SOURCE: SOURCES OF HIRE, 2006 CROSS X ROADS SRUVEY.

11


The internet has becomes one of the major sources of recruiting employees form all

over the world. Organizations now provide candidates the facility to submit CVs

online. Global organizations employ employees who understand the business and

who are able to see where the business is going globally and the cultures that need to

be bridged, people who are able to manage conflict and change.

2.3.2 International Staffing/ Deployment:

Once the employees have been recruited the next step for the organization is to deploy

them wherever there skills are needed. Staffing decisions are based on the type of

global assignments. The figure shows there are different type of global assignment

acquiring intercultural capabilities (Robert & John, 2004).

Figure 2.1 Global Employee Selection Factors ( Robert & John, 2004)

12


There are two assumptions that organizations should not make when deploying

employees.

Do not assume that a job requires the same skills form one location to another.

Do not underestimate the effect of the local culture and physical environment

on the candidates.

In the past organizations had relied on a headquarters-subsidiary structure and the

traditional expatriate model of human resource staffing where the parent company

nationals held most positions of authority. This arrangement was adequate in

yesterday's international organization because leadership, decision-making authority,

and organizational power flowed from the parent site to the foreign subsidiaries.

Today, however, new technologies, new markets, innovation, and new talent no

longer solely emanate from headquarters but are found cross-nationally, making the

expatriate model obsolete (Taylor & Beechler, 1996, pp. 959-985). The cost of

deploying an expatriate has become excessive. One Merck and Co., Inc., executive

estimated that it was three times more expensive to have an expatriate than a local

national in any given job.

Now organizations are working on alternate ways to get the right people to where the

work is on an as-needed basis. The key innovation is that organizations are making

distinctions between when it is necessary to physically move a person to a particular

location and when the person's skills can be delivered through other means.

Permanent transfers are no longer seen as the only method for delivering certain

services to parts of the organization,

One of the alternate ways of deploying employees is through virtual solutions.

Virtual solutions provide frequent, brief interactive interactions, with only a little

cultural component to the interaction, or a wide sweep of the organization to search

for or communicate technical details or information. These include use of all forms of

the Internet and intranets, videoconferencing, electronic expert systems, and

electronic databases coupled with user-friendly front-end systems. The chief

advantages to this strategy are the low cost of communication and the uncoupling of

real time from virtual time. This approach has most potential for managing and

13


developing the global workforce. Internet and intranets, including E-mail, are the

most democratic form of overseas deployment, allowing communication among

employees regardless of organizational level (Karen& Ernest, 1998)

Development of the employees is very essential as it contributes in their life long

learning. The table below illustrates some of the development approaches.

Table 2.6: Employee Development Approaches S

O

U

R

C

E :

2004 HUMAN RESOURCE MANAGEMENT

Job- site Methods:

Job site development methods are used to develop employee’s and

management skills on the job.

Off-Site Methods:

Off Site development gives individuals opportunities to get away form the job

and solely concentrate on what is to be learned.

14

Job- Site Methods Off-side Methods

Coaching Classroom courses and degrees

Committee Assignment /Meetings Human Relations Training

Job Rotation Simulations

Assistance-to Positions Sabbaticals and leave of absence

Online Development

Corporate University


2.4 Motivation

Once organizations have recruited the right set of employees, motivation will be the

key factor to retain them. “Motivation is the psychological processes through which

unsatisfied wants or needs lead to drivers that are aimed at goals or incentives.”

(Hodgetts & Luthans, 2003 p.379). The figure shows the motivational process.

Figure 2.2: Motivational Process (Hodgetts & Luthans, 2003)

As cultural differences influence every HR process, motivation is no exception.

Considerable research has been done on motivation of human resources in a large

number of countries based on two assumptions.

Universalist Assumption:

The Universalist assumption assumes that the motivational process is universal all

people are motivated by to pursue goal they value. However these specific goals will

be influenced by culture. For e.g. for Americans the motivational factor could be

money but for the Japanese it could be respect (Hodgetts & Luthans, 2003 p.379)

The Assumption on content and process:

Motivational theories are of two types (Hodgetts & Luthans, 2003 p.381).

Content theories:

Content theories explain work motivation in terms of what arouses., energizes

or initiates employee’s behavior.

15

Unsatisfied Need

Drive toward goal to satisfy

need

Attainment of goal (need

Satisfaction)


Process Theories:

Process theories explain wok motivation, by how employee behavior is

initiated redirected and halted.

This research paper focuses on Content theories as they are useful in explaining

motivation of international personnel.

Maslow Hierarchy of needs is the one of the most famous content theories created by

Abraham Maslow. This theory helps in the understanding of motivational practices

through out the world (Hodgetts & Luthans, 2003 p.381).

2.4.1 Maslow’s Theory :

Maslow’s theory states that everyone has five basic needs. Beginning from the very

basic Physiological needs and ascending to self actualization needs. The following

figure illustrates the needs hierarchy.

Figure 2.3: Maslow’s Hierarchy of Needs

16

Self actualization

Self actualization

Esteem Needs

Social Needs

Safety Needs

Physiological needs


Physiological Needs:

Physiological needs are the most basic needs of human consisting of food,

cloth shelter and other physical needs. These needs are satisfied through wages

and salaries paid by the organization (Hodgetts & Luthans, 2003 p.381).

Safety Needs:

Safety needs include physical as well as job security. These needs are satisfied

by organization through safety program, unemployment/ retirement plans and

medical insurances (Hodgetts & Luthans, 2003 p.381).

Social Needs:

Social needs are related with a person’s sense of belonging. It is the need to

interact with others and be part of a group. These needs are satisfies through

interaction during the course of the job as well as through informal groups in

the organization (Hodgetts & Luthans, 2003 p.381).

Esteem Needs:

Esteem needs are the person’s need for power and status. A person wants to be

appreciated and recognized for his work .These needs are satisfied through

promotions, feedback from top management and awards (Hodgetts & Luthans,

2003 p.381).

Self Actualization Needs:

Self Actualization needs are desires to reach one’s full potential by becoming

what one is capable of becoming. This is the highest level of need and is

fulfilled by mastering the environment and attaining achievable goals

(Hodgetts & Luthans, 2003 p.381).

17


Maslow’s theory assumed that needs have a certain hierarchy. Starting from

Physiological needs and ending at the Self actualization state. This theory can be

applied to international motivation with only a few minor changes. In the research

done by Harie and Ghiselli which examined the impact of cultural differences on

employee motivation it was found that employee needs didn’t necessarily follow the

specific hierarchy defined by Maslow (Harie & Edwin,1966). The research also

indicated that although these needs were important to employees and management

throughout the world but the level of satisfaction greatly varied. And for this very

reason organization would be wise to examine their motivational practices in terms of

country or geographical clusters. Where they can slightly adjust their policies

according to the cultural environment.

Another theory which greatly assists the understanding of international motivation is

Two Factor Theory of Motivation formulated by Herzberg and his colleagues.

2.4.2 Herzberg’s Theory:

Herzberg’s theory identified two set of factors that had an impact on job satisfaction.

These are

Motivators:

“Motivators are the job content factors; these include achievement,

recognition, responsibility, advancement and the work itself” (Hodgetts &

Luthans, 2003 p.385).

Hygiene Factors:

Hygiene factors are the Job content variables namely; salary, interpersonal

relations, technical supervision, working conditions, administration and

company policies (Hodgetts & Luthans, 2003 p.385).

These two factors relate to employee satisfaction. The theory states that motivators

are the only factors which provide satisfaction. If hygiene factors are not provided

their will be dissatisfaction However, if they are provided there may not be

dissatisfaction, but satisfaction my not also occur (Hodgetts & Luthans, 2003 p.385).

18


Hence the sole purpose of Hygiene factors is not preventing dissatisfaction. For the

purpose of motivating human resources factors such recognition, achievement and

advancement must be used.

According to the research done by Goerge Hines; which surveyed 218 middle

managers and 196 salaried employees using ratings of 12 job factors and over all

satisfaction. It was concluded in the research that Herzberg Model appears to have

validity across occupational levels. The results shown in the table below will support

this statement

2.4.3 Motivation Applied:

Motivation is applied in three areas. These are as follows.

Job design

Job content, the methods that are used on the job and the way the job relates to

the organization. Due to cultural differences the same type of work my have a

different impact on the motivation of human resources in various part of the

world.

Quality of work life differs from country to country as discussed earlier in the

dimension of culture that different countries have different work

environments. (Hodgetts & Luthans, 2003 pp.396-397). For example

Assembly line work would be welcomed by Japanese who have strong

uncertainty avoidance. Assembly line works requires no original thinking by

the employees and there are specific procedures for performing the job. But

the same Assembly line work would lead to high level of satisfaction or

motivation for the American employees has they have low uncertainty

avoidance and like jobs which have a certain risk involved. All job designs

tend to reflect the cultural values of the country, organization would have to

keep this factor in mind when defining job designs

19


Work Centrality:

“Work centrality is the importance of work in an individual’s life relative to

other areas of interest” (Hodgetts & Luthans, 2003 p.398). This provides

essential information on how to motivate the global workforce. But there can

be misconception regarding the value of work. It has been found that Japanese

like to work long hours but this is not necessarily due to their devotion to work

but of the fact that living cost in Japan are very high and people don’t miss a

chance to work extra hours to earn money.

Reward Systems:

Rewards are commonly used by Organization to motivate Personnel. They can

be Financial in nature like salary raises, bonuses and tock options. Or they can

be non financial in nature like recognition and feedback. However there are

significant differences between the reward systems that work in each country.

For example Research shows that Swedish workers with superior performance

often prefer a reward of time off rather then financial incentives. On the other

hand as discussed earlier as well Japanese Worker while high performing tend

to opt for financial incentives (Susan & Jean. 1997).

According to a 2005 survey of 90 multinationals by Mercer Human Resource

Consulting Eighty-five percent of multinationals have a global pay strategy in place,

and the remaining 15 percent plan to introduce one by 2007,. These global strategies

consistently include policies on positioning pay relative to the market, short-term and

long-term incentive design and methodologies for job grading. More than half

incorporate fixed guidelines (Hansen, 2006).

2.5 Organizational Practices:

Following are the policies of some of the major multinational in the world to manage

global workforce.

2.5.1 IBM: Workforce Diversity:

20


IBM has operations in 170 countries of the world. They have created an

innovative and strategic global framework for this new era of diversity. IBM

understands the importance of diversity in its many dimensions. It is much

more than good social policy for IBM. An international company with local

management, IBM addresses diversity issues that are representative of local

priorities and experience. Issues vary across regions, as well as from country

to country. For example, in Europe, Latin America, the Middle East, and

Africa, IBM's policies and practices are mindful of gender, people with

disabilities, and the growing awareness of ethnic minorities. In Asia Pacific

countries, IBM is putting increased focus on issues related to gender,

disability, and respecting and valuing differences among countries and

regions. Their focus on the advancement of women and the diversity of

leadership team helps ensure that all employees have an opportunity to

develop into successful leaders. Attention to cultural awareness and to the

inclusion of people with disabilities in the workplace helps provide an

environment free of discrimination and harassment (Global Diversity).

Corporate Culture:

IBM put’s a lot of energy into managing employee behavior through creating a

strong culture (2007, managing your corporate culture). No matter where

IBM employees are they are aware of what the organization stands for. This is

done through their new-employee program “Your IBM”. It sets the stage by

providing new hires with a learning continuum and action plan to help them

gain the knowledge needed to understand IBM its culture (Learning and

Opportunity).

Diversity Training:

IBM conducts training sessions in a variety of diversity-related subject areas.

For example, "Shades of Blue" is a learning experience for managers to

develop competencies for engaging in business across cultures. Consisting of

online learning followed by a two-day face-to-face workshop, the program

combines presentations, group discussions, role playing and videos to build

understanding and skills for multicultural engagement. IBM also offers "Quick

21


Views" and "Learning Clusters" — online programs — to educate managers

on the issues of diversity (Workforce Diversity).

Recruitment/Development:

IBM recruits employees from all over the world and does not take into account

the race, gender, religion, culture etc of people. It is the skills and potential of

the people they are interested in. IBM has structured programs to help

employees develop the skills that are most in demand in the marketplace,

giving them IBM a competitive advantage. But this isn't random, nice-to-have

self-improvement. These investments are supported by a methodology

designed to move people along a development continuum, so that as demand

declines for certain skills in yesterday's technologies, applications or

platforms, they focus and invest in the market-valued skills employees will

need now and in the future. IBM's internal redeployment processes are

designed to make the most of the industry's top talent by reducing potentially

wasteful loss of skilled employees whose talents are often needed elsewhere in

IBM. These processes also help manage the inevitable changes that take place

in a services business as clients renegotiate their requirements (Learning and

Opportunity).

Table 2.7: Women in IBM Workforce

Americas Asia Europe,

Middle

East

and Africa

Total

Worldwide

Total Women 31.0% 24.9% 25.4% 28.0%

Women Managers 28.2% 18.2% 18.5% 23.5%

Motivation:

IBM responds to the needs of its employees and tries to satisfy them it

observed a significant increase in the number of women in its workforce and

22


made program catering especially to their needs. IBM observed that women

like other employees; usually want to advance in their careers. At the same

time, they want to make sure that, while they're working, their children are

receiving good care. This was made possible by the introduction of Child care

and Dependent care programs. As childcare and eldercare became

increasingly important to IBMers, the company responded by creating the

Global Work/Life Fund with a five-year, $50 million commitment. It was the

first fund of its type to address employee issues on a global basis (Employee

well being).

IBM also has many rewards and recognition programs from manager-

determined recognition awards to technical recognition awards to peer

awards.IBM sloe has a global recognition program which includes cash

rewards as well as merchandise. Award values vary by country, depending on

currency exchange rates and local customs. IBM also places a lot of emphasis

on employee health an well being (Compensation and Benefits)

IBM being a technology company has many employees who work form home

without ever coming to the organization (Dittmann, 2005). For these

employees motivational and other HR management practices would be

different as they have completely different needs and requirements.

2.5.2 Nestle:

Nestlé with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestlé

and is today the world's biggest food and beverage company. Sales for 2006 were

CHF 98.5 bn, with a net profit of CHF 9 bn. Employ around 265,000 people and have

factories or operations in almost every country in the world. Switzerland is home to

23


Nestlé's Swiss subsidiary, its international headquarters and the registered office of

Nestlé's holding company (Nestle Insight: business Principles).

Diversity Management:

Nestle respect all cultures. Therefore, Nestlé embraces cultural and social

diversity and does not discriminate on the basis of origin, nationality, religion,

race, gender or age. Nestlé does not regard its Swiss headquarters as the center

of the universe. Decentralization is a basic principle of Nestlé. Their policy is

to adapt as much as possible to regional circumstances, mentalities and

situations.. Policies and decisions concerning personnel, marketing and

products are largely determined locally. “This policy creates stronger

motivation for Nestlé's executives and employees and a greater sense of

identification with Nestlé's business. It is not Nestlé's policy to generate most

of its sales in Switzerland, supplemented by a few satellite subsidiaries abroad.

Nestlé strives to be an "insider" in every country in which it operates, not an

"outsider."(Nestle Insight: business Principles).

Corporate Culture

“Nestlé’s Corporate culture is based on a set of fundamental principles which

are strongly influenced by the values of our home country. Switzerland;

respect for the individual; understanding different cultures and traditions

global thinking but local action; favoring decentralization and networking;

being pragmatic rather than dogmatic; being committed to work and quality.

Nestlé prefers the long-term perspective to short- term thinking” (Nestle

passion to win).


“Nestlé’s criteria for recruitment are based on professional skills exclusively

not on a person's passport, ethnic or national origin.” (Passion to win).

Interested candidate can submit their CV’s online. Nestle offers progressive

development through on-going training throughout an employee’s career.

Training possibilities are available to all staff. Nestlé recently introduced e-

24


learning as well, a web-based programme for self development. According to

Nestle “When joining Nestlé, your training is not over - it is only just the

beginning!” (Passion to win).

Diversity Training:

Information regarding Diversity training at Nestle could not be found.

Motivation:

To improve people skills ad attitudes Nestle also spends large sums of money

on motivational workshops where executives down the line relearn

management techniques and are taught to become better human beings. Often,

entertainment is combined with education as an added motivator (Sarkar

2000). Nestlé also cares for the health of their employees. Nestlé Singapore

launched an integrated and comprehensive Internal Wellness Nestlé program

in 2003 to promote awareness and impart necessary life-skills to strive for a

healthy work-life for all staff. Nestlé provides a comprehensive benefits

program, from traditional healthcare and pension plans to more contemporary

options that reflect the changing needs of today's employees, such as wellness

and alternative medicine, an allowance for corrective laser eye surgery and

workplace flexibility()

2.5.3 Colgate-Palmolive:

Colgate-Palmolive is a New York-based company operating in 170 countries. It

receives 70 percent of its 7 billion Dollar revenue from overseas markets.

Managing Diversity:

“Colgate Palmolive has grappled with the challenge of translating its US-

based agenda of valuing diversity to the international arena. The concept of

equal treatment and opportunity across race, gender and disability does not

readily translate into other cultures where the racial mix is rather homogenous

25


(for example, Japan), or the gender divisions are clear and rigid (for example,

in Saudi Arabia). Through the office of the director of global employee

relations, the company has redefined its diversity principles globally. Colgate-

Palmolive Company frames its perspective by talking about respect for all of

its workers. The company addresses this mission in a program called "Valuing

Colgate People," in which all managers participate. Although respecting other

cultures was a central element of this policy, the company made a conscious

decision not to override the essential policies of banning discrimination and

sexual harassment” (Ozbilgin, 2005).

Corporate Culture:

Colgate Palmolive has three values, Caring, Global Teamwork and

Continuous Improvement these are part of everything they do. These values

are the foundation for Colgate-Palmolive business strategy and are reflected in

every aspect of work life. Colgate cares for the Colgate people, customers,

shareholders and business partners. Colgate is committed to act with

compassion, integrity and honesty in all situations, to listen with respect to

others and to value differences. All Colgate people are part of a global team,

committed to working together across countries and throughout the world.

Colgate is committed to getting better every day in all it does, as individuals

and as teams. By better understanding consumers' and customers' expectations

and continuously working to innovate and improve products, services and

processes, Colgate will "become the best."(2007, Colgate Core Values).

Diversity Training:

Instead of exporting the US approach, the company examined what kind of

training was needed in each country. It attempted to blend cultures and teach

its managers how to collaborate across cultural boundaries. Through a

combination of individual and team exercises, role playing, videos and other

educational material, employees work through a variety of diversity issues that

lead to valuing differences because they contributed to organizational goals.

The first day of the program is the global section. It focuses on themes and

values of Colgate: caring, global teamwork and continuous improvement.

26


These values are corporate wide and give Colgate employees shared goals.

The second day focuses on issues within a particular country. In the United

States, the focus is on race, gender, age, sexual harassment and individuals

with disabilities. Other countries will concentrate on the key issues that

prevent their people from treating each other with respect, such as gender bias

and discrimination based on class or religion (Ozbilgin, 2005).


Regular reviews of professional training programs benefit programs and career

development processes assist the Board in guiding Colgate’s people

development initiatives and efforts to gain a competitive recruitment and

retention advantage. Emphasis is placed on practical learning and professional

growth as these are critical to Colgate’s continued success. We invest

generously in the training and education of Colgate people. Skill development

includes: Formal classroom study sharing best practices, globally developing

practical work applications based on real-world learning (Professional

Development, 2007).

Motivation

Colgate has linked the pay of its managers and employees at all levels to the

Company’s performance. Adheres to this pay-for-performance philosophy,

and stock-based incentives comprise a significant component of senior

management’s overall compensation. The "pay for performance" philosophy

ensures that employee’s accomplishments are recognized and rewarded

appropriately. Colgate has competitive compensation and benefits–including

bonus and stock ownership programs. Colgate rewards success, greater the

success, greater the reward. Rewards include holidays as well as financial

rewards. Colgate also provides health care, Life insurance and Retirement

benefits. These lead to a greater employee motivation and shared organization

vision (Benefits and Compensations, 2007).

27


2.6 Critical Review:

Workforce diversity has come of age and organizations understand that this diverse

workforce will be their competitive advantage in the future. Technology and services

can be duplicated by competitors but a skilled workforce that one organization has

cannot not be duplicated. A global workforce if managed, retained and motivated

effectively will only take the organization to greater heights and enable it to compete

in the global market. In order to achieve this; organizations should accept and

celebrate diversity in the true sense. Plan and implement recruitment, selection and

deployment policies which are a global in nature. Create an environment and

corporate culture where every employee feels respected and a vital part of the

organization regardless which nation, culture, race or religion he comes from.

Diversity training should be conducted in order to attain an environment of harmony

and mutual respect. It has bee proven that organization that have taken these

initiatives have experienced only success.

28

Chapter 3 Research Methodology

3.0 RESEARCH METHDOLOGY

The research methodology outlines the steps that are taken to conduct the research.

The following figure shows the steps that were carried out in the research process.

Figure 3.1: Marketing Research Process (Kotler & Armstrong, 2001)

3.1 Defining the problem and the research objectives:

The first step was to define the problem. The problem had been identified as the

challenges that HR Managers face in the management of a global workforce. Once the

problem was defined research objectives were set. Research objectives classify the

type of research to be conducted. A research project may have one of three types of

research.

Exploratory Research

Descriptive Research

Casual Research.

For this research study two objective were set

Exploratory Research:

Exploratory research is conducted in order to gather preliminary information that will

help define problems. Exploratory research was conducted in order to have better

38

Defining the

problem and the research

objectives

Developing the

research plan for

collecting informatio

n

Implementing the

research plan

collecting and

analyzing the data

Interpreting and

reporting the

findings


understanding of the challenges of managing a global workforce. This also helped to

determine the objectives of the research study.

39


Descriptive Research

Descriptive research is carried out to better describe problems. Once the objectives

were set after the exploratory research, a descriptive research for each objective was

conducted. This research was mainly conducted through books and organizations

official websites. More details have been provided in table 3.1.

3.2 Developing the Research Plan

In this phase of the research process information needed was determined, and plan

was made to gather the information. This plan outlined sources of secondary data

specifies research approaches, sampling plan and research instrument to conduct

primary research.

3.2.1Determining Specific information needs

To meet the information need two types of data can be collected secondary data and

primary data.

Secondary data:

Secondary data is the data that already exists having been collected for another

purpose. The sources of secondary data used in the research are

Books

Journals

Magazines

Internet sources

All of the above sources were consulted to gather accurate information regarding

management of a global workforce. The research is based mostly on Qualitative data

but in order to support qualitative data quantitative data was also obtained. The

following table explains the detail of some of the secondary sources of data. Books

were the main source of secondary data collection.

Books Internet Magazines/Journals

40


Human resource

management by Robert and

John; published in 2004.

Nestlé’s official website: Dear Workforce

Management’ twice-

monthly questions and

answers e-mail newsletter.

Focusing on HR,

recruiting, benefits,

compensation and training.

www.workforce.com/secti

on/16/index.html

Organizational Behavior by

Debra L Nelson & Campbell

Quick. Published in 1995

Colgate –Palmolive official website

http://www.colgate.com/app/Colgat

e/US/Corp/Governance/OurValues/

ColgatesCoreValues.cvsp

.Diversity World

http://www.diversityworld.

com/Diversity/workforce_

diversity.htm

International Management

by Hodgetts & Luthans;

published in 2003

IBM official website

http://www.ibm.com/ibm/responsibi

lity/people/diversity/diversity-

strategy.shtml

Asia Pacific Journal Of

Human Resources.

Managing Intercultural

Conflict Effectively’ by

Stella & John, Published in

2001

Public Personnel

Management

Managing Across cultures by

Susan & Jean: Published in

1997

Journal of Cross- Cultural

Physhcology.

Managing Human Resources

by Cascio; Published in 2003

The Best of the

Bureaucrat.

Table 3.1: Sources of Secondary data

Primary Data:

41

http://www.ibm.com/ibm/responsibility/people/diversity/diversity-strategy.shtml



http://www.diversityworld.com/Diversity/workforce_diversity.htm



http://www.colgate.com/app/Colgate/US/Corp/Governance/OurValues/ColgatesCoreValues.cvsp



http://www.workforce.com/section/16/index.html

http://www.workforce.com/section/16/index.html


The need for gathering Primary data did not arise as secondary data was sufficient and

authentic

3.3 Implementing the Research Plan Collecting and analyzing the data

Information was gathered from the secondary sources mentioned above, it was

analyzed as can be seen from the literature review and the research plan was

implemented.

3.4 Interpreting and Reporting the Findings.

Data analysis and findings have been done in the following chapter

3.5 Limitations of the Study

Due to time constraint and word limitations only three multinationals management

practices were studied and analyzed. Pakistan is not yet a home for an international

diverse workforce thus global workforce management practices relating to Pakistan

could not be studied.

42

Chapter 4 Data Analysis and Findings

4.0 DATA ANALYSIS AND FINDINGS

Objective 1: To study the area of workforce diversity and determine its

importance for the organization.

Workforce diversity is the acknowledgement of differences among the employees. It

does not only include cultural differences but goes beyond this factor and includes

characteristics such as age, gender, religion, disability, language, race, ethnicity,

experiences, and perspective, working styles, relationship status, family and personal

responsibilities.

It was found in the research that diversity management was often confused with Equal

Employment Opportunity (EEO), and Affirmative Action. EEO and Affirmative

Action are both laws which legally bound organization to not to discriminate on the

bases of religion, race gender and ethnicity. Only focusing on providing employment

and development opportunities for women the disabled and minorities to manage a

diverse workforce is not diversity management as these are related to EEO and

Affirmative Action. For differences between EEO/Affirmative Action and Diversity

refer to Appendix B.

Diversity management is not about fallowing a certain law as Organizations are

required to do. To effectively manage diversity, businesses and organizations must

stray away from affirmative action policies and focus on key elements such as

communication, education and training. Organizations cannot afford to ignore the

wave of diversity in the workforce; as it is no longer just a matter of legal or social

responsibility but a matter of corporate survival. A diverse Managing diversity is

required for global competition. Developed countries population is getting diverse

each year and apart from that organization are expanding their operation globally

leading to a diverse customer base. A diverse workforce will be able to relate to them

easily.

42


When dealing with a diverse workforce the role of the. The Human Resource

Management takes on an even more important role. The HRM must develop strategies

to address workforce diversity. The success of these strategies depends on whether the

HRM department has examined the organization's cultural environment, management

systems and evaluation systems. To fins out if existing system and personnel would

support or become a hindrance to diversity (Mathews, 1998, pp. 175-184).

Figure 4.1: Diversity Management, Equal Employment Opportunity and

Affirmative Action

43


Objective 2: To illustrate the need for a strong corporate culture for cross-

cultural communication among the workforce and the management.

It was clear from the research that one of the biggest factors in workforce diversity is

cultural differences. These cultural differences influenced every HR process form

recruiting to motivation. They are of the most importance as cultural factors have the

greatest influence on employee’s behavior and shape their values and beliefs. The

global workforce will consists of people belonging to different cultural backgrounds

and the organization would have to provide them an adequate work environment

where they can work in harmony. These differences have been studied through a

research conducted by George Hofstede of over 70 countries (Refer Table 2.3)

It is clear from the study that Asian and western employees have different working

styles, perception and preferences. The table below summarizes these differences

found through the research with regards to the five dimensions of Power Distance,

Individualism, Masculinity/Femininity, Uncertainty Avoidance and Long Term

Orientation.

Table 4.1: Dimensions of culture

Asian Western

Power Distance High Low

Individualism Low High

Masculinity/Femininity Masculine Feminine

Uncertainty Avoidance High Low

Long term Orientation Long Term Orientation Short Term Orientation

44


These differences in culture make it necessary for the organization to have a strong

corporate culture. The corporate culture serves the important purpose of uniting

employees on a common platform. In a global organization the employees must be

armed with the knowledge and methods of dealing with employees coming from

diverse cultural backgrounds thus would result in effective communication in the

organizations.

This is where diversity training comes in. Diversity training is of three types.

Legal awareness

Cultural Training

Sensitivity Training

Legal awareness is concerned with creating awareness among managers and

employees about laws such as the EEO and Affirmative Action. Cultural and

sensitivity training are the true essence of diversity training. During the course of the

research it was astonishing to know that many organizations thought that diversity

training was not useful. Apart from being costly it also created walls between

employees.

This is arguable as diversity training would not be effective if not implemented

correctly. There are several Diversity training firms who make specialized diversity

training programs for organizations. Organizations can enroll the services of these

firms it they don’t have adequate resources for diversity training programs. Colgate

Palmolive is an excellent example of a company which has made a successful

diversity training program and this has resulted in success for them.

45


Objective 3: To evaluate the methods required for effective recruitment,

deployment and development of a global workforce.

Human resource is the most expensive resource of an organization. Hence careful

consideration is required when recruiting and selecting employees. Global

organizations have a wider pool of talent to choose from. This task becomes difficult

as the organization will have to think on a global perspective no longer bounded by

geographical boundaries.

HR managers would need to make a plan where they will identify the number of

employees needed and the skills required. It is essential that employee’s skills and

objectives meet the requirements and objectives of global organizations. The set of

skills required by global organizations would be slightly different then other

organization. For e.g. Global employees would need to need to adapt to different

cultural environments as they are transferred to other countries, so they should be able

to easily adjust themselves to the new environment (Refer Figure 2.1). Recruitment

can either be external or internal. But in this competitive and ever changing

environment organizations should focus on external recruitment while developing

internal human resources. The research identified the most effective methods used by

organizations to hire a diverse workforce. (Refer Table 2.5). Then top three most

productive methods have been displayed in the table below.

Figure 4.2: Most productive Sources of Hiring.

46


Job boards are the most productive source of hiring employees. Job boards include

monster.com, Careerbuliding.com etc. These are all internet sources and as mentioned

above Internet having a worldwide reach and being cost effective is becoming a

favourite with the organizations.

Once organizations have recruited and selected the potential employees they would

need to staff/ deploy them where there skills are needed. Effective methods would be

required to bring the right people to where the work is globally on an as-needed basis.

This is a costly procedure and requires extensive research about the employees, as

in global deployment employee skills do count but the personal characteristics and

intercultural capabilities of the employee also come into the picture (Refer Figure 2.1)

Training and development programs for a global workforce have to be on an

international basis employees should not only be up to dated with the changing

environment of their own countries but of others as well. For global organizations

training takes two forms

Diversity training

Employee training and Development.

Diversity training has been discussed and analyzed in detail in objective 2. For

development of the employees mostly Job site methods are being used. No evidence

was found on the implementation of Off- side methods by organizations. This is

probably due to the fact that off- side methods require employees to go on leaves and

to totally focus on the development programs. In this competitive environment

organizations cannot afford their employees absenteeism.

|Internet is a blessing for global organizations. Organizations are using internet in the

recruitment process, diversity training and deployment of employees.

47


Objective 4: To critically evaluate the practices considered necessary to motivate

a global workforce.

From the research it became clear that motivation in a universal concept. Each and

every one of us is motivated by the goals we want to achieve. Motivation theories

formulated by Maslow and Herzberg have an international bearing. They can be

applied by global organizations to motivate a global workforce with just a minor

change. This has been proved in the practices of Nestle, IBM and Colgate Palmolive

discussed in objective 5.

Maslow created a hierarchy of needs, Maslow’s theory assumed that individuals

follow this hierarchy, but it is not necessary that this hierarchy is followed. For

example for some employees fulfilling their esteems needs would be more important

to them then to fulfill their social needs, this becomes apparent when motivation is

applied through the following

Job design

Work Centrality

Reward Systems.

Employees coming from different cultural backgrounds view different jobs

differently. What might be the motivational factor for one employee according to his

perception of the job may be a de motivator for another employee because of his

different perception of the same job. The Jobs should be also according to the skills,

education and experience of the employees. If this not the case employees their will

be no job satisfaction. Employees will also feel that they are not important for the

organization

The research conducted by George Hofstede clearly shows how coming from

different cultural backgrounds has an impact on motivation. The same is the case with

work centrality. It can create the biggest misconception about the importance to work

to an individual. If an employee is working late it does not necessarily means that his

work is important to him and his biggest motivator would be his work.

48


Rewards are of two types. One are financial in nature and the others are non financial

in nature. Some employees would prefer financial rewards and some would go for

non financial rewards. It is up to the organization to accurately identify the

motivational needs of the employees and work towards satisfying them. This is very

crucial as identifying employee’s needs and understanding is more complex. It is

important that organizations understand that each individual is unique and has

different motivators. If organizations do the same things for everyone, increasingly

they will alienate more and more employees and more often than not, the top

performers. One size doesn't fit all when it comes to employee motivation—rewards

that motivate best are those that are most valued by the person you are trying to thank.

Thus organizations would have to come up with a solution that works for everyone.

One step that organizations can take is form motivational practices according to

geographical locations.

Participative management and grievance handling can also be used to motivate the

workforce. Involving employees in the decision making process or hearing their ideas

would increase the employee’s self worth. Grievances handling would create a

positive image of the organization in the minds of employees, as they would know

that the organization doesn’t only care about their work but also cares about them as

well.

49


Objective 5: To critically asses the practices that are currently being used by

global organizations to manage their workforce.

IBM, Nestle and Colgate Palmolive were the organizations whose global workforce

management practices were studied and have been analyzed in context of workforce

diversity, Corporate Culture, Diversity Training, Recruitment/Development and

motivation below.

Workforce Diversity:

IBM is a global organization with local management policies. It recognizes the

importance of workforce diversity and need to manage it effectively. Hence of

discrimination on any bases is not done. It is aware of the fact that people belonging

to different regions have different issues. These issues are addressed by IBM

according to the region. IBM places a lot of emphasis on women development.

Nestle also follows the same strategy. Nestle embraces all cultures and sees its

strength in its diverse workforce. Their policy is to adapt as much as possible to

regional circumstances, mentalities and situations. Thus employees can relate to them

better.

Colgate Palmolive respects all cultures and has defined their diversity principles

globally. They also make sure that discrimination and harassment issues do not arise

as well.

It was Colgate Palmolive that truly understood the essence of workforce diversity and

didn’t confuse it with EEO and Affirmative Action. On the other hand IMB policies

did recognize workforce diversity but they were more towards EEO and Affirmative

Action as they placed a lot of emphasis on the recruitment and development of

Women, people with disabilities etc. Nestle placed a lot of emphasis on local

management through this they were able to create strength and flexibility and were

50


able to make decisions that are better attuned to specific situations in a given country,

by decentralizing operational responsibility.

Corporate Culture:

IBM, Nestle and Colgate Palmolive have strong corporate cultures. IBM makes sure

that all its new employees are well aware of the culture this is done through their

“Your IBM” Program.

Nestlé’s culture is strongly influenced by its parent company which is Switzerland.

However it continues to evolve according to the requirement of the location. This

emphasizes their decentralization policy. Another aspect of Nestle Culture is the

respect of individuals and their cultures.

Colgate corporate culture also includes respect for all cultures, valuing differences

and employees. One thing that was unique in their culture was the emphasis placed on

global team work. It believes that all employees all over the world are one team and

that is the Colgate Team.

Diversity Training:

IBM has a number of diversity training programs to for its employees. These include

Shades of Blue, Quick Views and Learning clusters. They are for employees at every

level of the organizations. These training programs combine presentations, group

discussions, role playing and videos to build understanding and skills for multicultural

engagement.

No information regarding Nestle diversity Training programs was found. This may be

due to the fact that Nestle believes in decentralization of policies so the need for

diversity training does not arise.

Colgate Palmolive has an excellent Diversity training program named “Valuing

Colgate People”. It eliminates the motion that Diversity training is a waste of

resources as it is not effective. Valuing Colgate People proves that diversity training

program if implemented correctly can be very beneficial for organizations.

51


Through a combination of individual and team exercises, role playing, videos and

other educational material, employees work through a variety of diversity issues that

lead to valuing differences because they contribute to organizational goals. It also

integrates the corporate in its diversity training. The program is divided into two

sections. The first section focus on issues pertaining to global diversity and corporate

culture and the second section focuses on diversity issues within a particular region.

Colgate Diversity training program was the most balanced and carefully structured

program as compared to the diversity training program of IBM.


IBM, Nestle and Colgate Palmolive followed the third global recruiting approach

which was Third country Nationals. As evident from their practices and culture all

three companies value and respect diversity and do not limit recruitment to only their

home country. Discrimination based on any grounds of race, gender, religion, culture

is not made. All three companies have facilities of internet recruitment as well as

internet based training and development programs.

IBM development program for its employees were found to be the preeminent. As

their development programs did not only include skills their employees would need in

the present but skills they would require in the future as well. This was the factor

missing in the development programs of Nestle and Colgate Palmolive. Their

redeployment process indicates where employee skills are needed the most; this also

helps them to identify their top talent.

For nestle employee development is a continuous process. They provide training for

all staff member at every level. They also incorporate E-learning as well. Colgate

Palmolive development program focuses on learning and growth. Skill development

includes: Formal classroom study, sharing best practices, globally developing

practical work applications based on real-world learning.

52


Motivation:

IBM, Nestle and Colgate Palmolive motivational practices can be linked to Maslow’s

motivational theory. All the companies use motivational factors which are related to

the hierarchy of needs. This has been shown in the table below.

Table 4.2: Application of Maslow’s Motivation Theory

IBM Nestle Colgate-Palmolive

Physiological Needs Adequate salary Adequate salary Adequate salary

related to employee

performance

Safety Needs Endure work place

safety. Retirement

Benefits

Work place safety.

Employee Health

programs. pension

plans

Workplace safety.

Retirement plans,

Life insurance

Social Needs Employees Get to

gathers.

Motivational

workshops.

Entertainment

facilities for

employees

Focus on team work,

Holidays

Esteem Needs Employee

Recognition awards

Employee

recognition awards.

Employee

accomplishments are

recognized and

rewarded.

Self Actualization

NOTE: Reaching the Self Actualization Stage is up to the employee. When

feeling of reaching one’s full potential sets in. One has reached the Self

Actualization State.

53


One of the positive things about the motivational practices of IBM, Nestle and

Colgate Palmolive was their understanding of changing employee’s needs and taking

steps to full fill those needs. For e.g. IBM’s child care and dependent care keeping in

mind the needs of women in the workforce. Nestlé’s alternative medicine, wellness

programs and corrective laser eye surgery. Lastly Colgate Palmolive “Pay to

Performance” program rewards employees on the bases of their performance, higher

the success higher the reward. All the motivational policies of the three companies

differed from region to region keeping in mind the culture and needs of a particular

region.

From the research of IBM practices it was found that a new type of workforce is

coming up due to the internet. This workforce consists of people who work from their

homes for the organization. This is another dimension of HR. It would be very

interesting to find out how to manage, retain and motivate employees who are never

physically present in the organization.

All three organizations have truly understood the value of diversity and how to

manage it effectively. It is for this very reason that they are the top multinational

organizations of the world, having a loyal, dedicated and a motivated diverse global

workforce.

54

Chapter 5 Conclusion and Recommendations

5.0 CONCLUSION AND RECOMMENDATIONS

5.1Conclusion:

For this research paper the area of managing a global workforce was researched and

analysed in detail. The research objectives covered the area of diversity, corporate

culture, recruitment, deployment, development, training and motivation of a global

workforce.

A Global diverse workforce has come of age an organization are realizing the fact that

they can use them to their advantage. The wave of multiculturalism is here to stay and

cannot be ignored. Even more so when it has been proved that it is beneficial for the

organization. Organizations have realized the seriousness and sensitivity of the issue.

They not only value diversity but celebrate it. From recruitment to diversity training

organizations face a number of challenges. A strong corporate culture will help to

unite the employees on a common platform setting aside their differences and align

them with the objectives of the organization. Communication plays a vital role in

managing a global workforce. It will assist the employees and the management to

accept diversity and celebrate it. Communication of employees and the top

management should take place on a regular basis. Organizations should make policies

that have a global perspective; provide an environment of equity with equal growth

opportunities to the employees regardless of different backgrounds to have a

dedicated and valuable workforce. Only then organizations will be able to reap the

benefits of a global workforce. A diverse workforce can become an organization’s

secret weapon to success.

55

Chapter 5 Conclusion and Recommendations

5.2 Recommendations:

If organizations do not have the resources to effectively manage a global

workforce, especially in the area of diversity. They should enroll services of

firms who specialize in workforce diversity management.

The internet is a vital tool in order to recruit and deploy global employees.

Organizations should make use of this and save time and cost.

Organizations can also use specialized computer software for human resource

management, a good example is web resource which s a simple, easy-to-use

project and resource scheduling application. Designed specifically for resource

and project managers, Web Resource optimizes employee management

through employee tracking, skills assignment, resource and project

forecasting.

Motivational policies should be customized according to the needs of

employees belonging to a particular region.

Corporate culture of the organization should be such that all employees can

relate to it.

56

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APPENDICES

APPENDICE A: Strategic Human Resources.

65

APPENDICE B: Differences between EEO/Affirmative Action and

Diversity

EEO/AFFIRMATIVE ACTION DIVERSITY

Government initiated Voluntary

Legally Driven Productivity Driven

Quantitative Qualitative

Problem Focused Opportunity Focused

Targeted Inclusive

Problem Focused Proactive

66

Challanges of Managing a GLobal Workforce

Documents

research objectives

research plan

research background

research methdology

diversity management

diversity training

list of figurespage

list of tables