International Human Resource Management
Human resource management is an approach that helps to manage the employees of an organization in an effective and efficient way to get a competitive advantage in its operating arena. HRM is also the practice of recruiting, hiring, and deploying the organization’s employees. The human resources department of an organization is responsible for creating and putting policies to govern the workers as well as the relationship of the employees with the organization. The term human resource was first discussed in the 1900s to describe and understand the people working in an organization. While discussing the Human Resource Management of Reliance Industries Ltd, it will discuss the way an MNC operates its human resource activities in the global business market. In this respect, it will also try to find out the challenges and issues faced by an organization to perform the business and HRM activities overseas.
2.0 History and Overview of the MNC
Reliance Industries Limited is an Indian MNC that is headquartered in Mumbai, India. Founded by Dhirubhai Ambani in 1973, currently managed by Mukesh Ambani. This business group has diversified businesses that include petrochemicals, energy, retail, natural gas, mass media, textiles, and telecommunications. Reliance is the largest publicly traded organization in India that recently surpassed the government-owned “Indian Oil Corporation.” It also has ranked 155th in the”Fortune Global 500″ list that represents the biggest corporations in the world. In 2021, the Reliance group owned ₹483,251 crore revenue that is $64 billion USD. It operates in more than 100 countries in the world, with 236,334 employees. Since its inception, the company has been managed by its chairman and founder, Dhirubhai Ambani. However, after the death of senior Ambani, the business was divided between two sons, Mukesh Ambani and Anil Ambani. In 2005-206, both the Ambani brothers faced differences in managing a business. After a bitter “public feud” among brothers, both finally decided to part. In October 2005, Reliance Industry Ltd finally parted ways between two brothers, and Mukesh Ambani got IPCL and Reliance industries. The division between the Ambani brothers de-merged the entire business into 4 parts. However, currently, Mukesh Ambani isone of the most potential business people not o0nly in India but in the global escort as well. Under Mukesh Ambani, Reliance Industries Ltd is intervening in all types of business sectors, from telecommunication to entertainment (ril.com, 2021).
3.0 Literature Review
Strategic human resource management is gradually getting intense concerns to understand the impact of organizational behavior and human resource system on employee performance. Boon et al. (2019) argued that the human resource practice within an organization depends on the practices of other departments within the system. HRM practice, therefore, has been defined as the pattern of a planned deployment of HR activities that are intended to enable the organization to achieve its final goals. Increasingly, this area of research has focused on the significance of understanding the way the system and its bundles jointly guide an organization to achieve the organizational goal rather than focusing on an individual HR practice. Researchers have identified multiple HR conceptualizations that include high employee performance, involvement, and commitment (Boon et al. (, 2019). The HRM system, therefore, can also be viewed as a consistent system that influences the result in an advantageous way if all practices send proper and continuous signals regarding the underlying intentions of the organization.
Like other organizations, Reliance Industries also implements different types of human resource theories and practices to accelerate the system in a potential way. In this regard, the company requires to implement some models and frameworks that make the HRM practice easier for Reliance industries.
However, human resource management has been observed as one of the most valuable assets of the organization along with its human capital. The main reason behind this is the collective as well as the individual contribution that helps the organization to achieve the objectives. Michael, (2019), in this respect, has identified four significance of HRM practice within an organization. The researcher further commented that HRM practice is a particular constellation of assumptions and beliefs. This practice thrusts the information and decisions regarding managing its employees and to get maximum performance for satisfying the people’s requirements. The central involvement in the whole process requires the line managers that set levers for shaping the relationship between the employees and management. While discussing the HRM system, Michael identified two major frameworks used by the organizations to ensure the effectiveness of the HRM policies.
The Matching Model of HRM
This model framework of HRM was established by the Michigan School in 1984. According to the developers of this model, an organizational structure needs to be managed in a way that is congruent with different organizational strategies. This model framework describes a complete human resource cycle that consists of four processes of HRM that are funded by most organizations.
Selection: This is one of the prime responsibilities of the HRM department in an organization. This process evaluates the ability and skills of a person to understand its applicability to the projected job role. If the recruiter or HR personnel fails to analyze the skill or ability properly, it will hamper the overall organizational performance.
Appraisal: This process helps the organization or HR department especially to evaluate the performance of the selected employees (Michael, 2019). It also identifies if the employees are facing any issues in their work environment and try to mitigate the issue to enhance the performance accordingly.
Rewards: The reward system, according to Michael, is one of the most mishandled and unutilized managerial tools that drive organizational performance. It needs to be rewarded for both long and short-term achievements by understanding the fact that the present appreciation structures the success of the future.
Development: This is the last stage of this cycle that simulates different policies and programs to develop the qualities of the employees to enhance the performance.
Figure 1: The Human Resource cycle
(Source: Michael 2019)
This framework was founded by the Harvard School of Beer in 1984 and named by Boxall as Harvard Framework in 1992. This is based on the assumption that managers generally develop the viewpoint as they want to see the employees. In this regard, the organization develops the hrm policies and independent activities to achieve the organizational goals. However, this framework has suggested two characteristic features depending on which this framework can work within the organization. Firstly, the line manager adopts more responsibilities to ensure the alignment of personal policies and competitive strategies, and secondly, HRM personnel need to set a clear mission and vision to govern the personal activities that can be developed and implemented through manual reinforcement.
Figure 2: Harvard Framework of HRM
(Source: Michael, 2019)
Reliance Industries Ltd follows the Harvard Framework of HRM practice to manage the business in the international sector. While pursuing this type of business activities it also faces several challenges that influence its international business performance.
With the changing business phenomenon, the use of human resource management is also facing charges in this contemporary time. Global integration of the economy has intensified the increased number of MNCs. Though it is not possible to get success for all of them, they require a proper HRM function to shape up their daily management. According to Cooke, 2018 the organizational phenomenon has become more challenging intellectually while undertaking the international HRM setting in consideration. This is because the global supply chain of service and production is leading to diffusion with the adoption of different western originated techniques and management concepts in the host countries. Many times it may differ with the cultural traditions and institutional environment of most countries. However, the overwhelming dominance of western originated policies is now changing to build up relationships between the work culture of the west and the east. While operating in a new country, the MNCs are embracing the work culture and environment of the host counties (Cooke, 2018). This is automatically changing the HRM practice of the MNCs to uniform the management standards. However, while operating in a new country, multinational corporations are raising the human resource management to a strategic position to correspond with the management measures.
4.0 Outline of the HRM Issue
In this contemporary world, business enterprises are rapidly changing their HRM functions. In this transforming landscape, the human resource management of Reliance is also developing certain challenges that can influence the business performance of this company. It is natural to face challenges while adopting new forms of strategic human resource management in this competitive market. However, the companies need to be more focused on identifying the issues and organizing them to resolve them according to their importance. Reliance Industries Ltd is one of the largest MNCs in India, is also facing some significant HR issues.
Reliance Industries Ltd has proposed a bunch of human resource facilities for its employees. This includes providing clean toilets, drinking water, crèches, education benefits, and maternity benefits, and so on. Still, it is lagging in reaching the proper HRM practice to some extent.
Nepotism: Reliance has been alleged to perform nepotism in different sectors of business. From giving chances to their lost ones in high business positions to rejecting the skilled person in any particular job position, it has faced many controversies against it. In many cases, it has raised several issues in managing employees due to a lack of leadership quality.
Issues of Communication: Despite several HR benefits given by the company, its management is facing issues in managing communication between the ground-level staff and hierarchy. Due to this, the employees are facing issues in conveying information among different levels that are affecting the employee as well as organizational performance as a whole.
Employee retention: Employee retention is one of the major issues faced by maximum organizations. This generally happens when employees do not feel engaged with the employees or the management fails to meet the employee requirement. Employee retention is also one of the main issues in the reliance group (Samuel 2018). It seems the employees face a lack of coordination in their workspace, due to which they fail to meet the work requirements. This increases the pressure on employees that has become one of the main reasons behind increasing employee turnover. Also, “nepotism” is highly linked with this issue.
Poor HR Policies: This is a serious issue that is faced by most organizations when they operate beyond their national boundaries. In the case of Reliance, within the country, even, they are facing issues to implement and evaluate the HR policies in an appropriate manner. Human resource management also maintains the consumer relationship with the organization. Especially while managing the telecommunication service of Jio, Reliance is facing issues to maintain its HR policies for their customers. According to their mission, customer service is one of the most significant issues that needs to be followed by the organization. In contrast, when a consumer is facing issues in handling Jio service or the mobile phone sets of Jio, the consumer service has been alleged to not provide service according to their promise. This is reducing the sales rate of Jio hon sets in some specific regions.
Cash and Compensation Issue: This is a serious issue that needs a strong focus of the officials to manage the employees of the reliance group. Reliance has been seen not to pay rewards or incentives to the lower HR professions while they are being pressured most to manage the entire organizational operation (Adam 2020). Due to this, the HR professionals are being demotivated, which is increasing the chance of employee retention and lowering employee performance. It will not only impact the Hr personnel but the overall employees as they will also face a lack of cooperation from the HR department.
5.0 Analysis of the International HRM issues
Reliance has become a part of the global village with developing technology. Every organization faces a vast shift of paradigm when it enters into a global phenomenon. Even while working in the international context, it requires a strong push to manage and expand the business horizon in a parallel way. Along with global recognition, the internationalization of business also brings some challenges in maintaining human resources in a foreign business atmosphere. It is not easy to fit within a changed business atmosphere; the organization tries its best to face the challenges and resolve them to acquire profound success. Reliance is also facing several challenges while operating in the international spectrum.
Managing Talent diversity: This is one of the main issues faced by organizations. As Reliance operates in almost 100 countries, it is so obvious to face differences in organizational culture, and due to globalization, the international workforce has become more diverse. In this regard, while managing a heterogeneous team, the human resource department of Reliance is facing challenges in different countries like the UK, USA, and Canada. These three countries share a completely different work culture in each country (Islam et al., 2020). Especially in the post-covid world, the HRs require to manage the human capital remotely, that is creating more complexity in managing the employees as well as productivity at the same time.
Abiding by Local laws: One of the main issues faced by the MNCs as well as Reliance Industries is following the rules and regulations of every country. Every country has different labor laws, wage laws, taxation rules, and other organization operation issues (Hjartardóttir and Lundeborg, 2017). Even laws seem to be changed with the inner state boundaries as well. Reliance sometimes faces issues to maintain all these laws, due to which the organization faces several legal complications. Especially while maintaining labor laws and wage laws, Reliance faces issues in these countries.
Adopting Changes: In this continuously transforming business practice, change adoption is one of the most significant practices that need to be adopted by organizations to achieve success in the international market (Holthaus et al., 2018). When the HR personnel is operating in different countries, they fail to adopt changes by maintaining consistency with the previous one. This is increasing the gap between two changes that can lead the company to face issues in maintaining sustainability in the work atmosphere.
Employee Management: This is the most significant issue faced by Reliance while operating abroad. Due to the changing nature of work culture, environment, and interest, the HR personnel faces several issues to implement policies that satisfy the interest of every employee.
Reliance is one of the most potential Indian MNC that needs to implement a strong focus on both domestic and international HRM issues so that it can be able to accelerate the business growth in both national and international business sectors.
Reliance needs to implement some changes with the help of which it can mitigate the HRM challenges and increase the employee as well as organizational growth.
Domestic HRM Issues
Nepotism: This is a serious issue that needs to be mitigated soon. In this respect, the company must ensure that real talents are getting a chance to be in a position. The recruitment process needs to be based on skills and knowledge and not based on reference (Shahvazian and Hashemi Gheinan 2020). It will increase the accountability of the company in front of employees as well as to the market.
Communication Issue: Mitigating communication issues is important to maintain flawless employee performance. In this respect, the company can arrange regular meetings to convey information from hierarchies to ground-level staff (Morley and Heraty 2019). The team leaders also need proper training and development sessions so that they are able to maintain collaboration among employees.
Employee Retention: Reliance HRM department can conduct surveys to understand the issues faced by the employees and the change they require to maintain positive employee performance. If the company can resolve the issues faced by the employees, the employee retention rate will automatically increase.
HR Policies: rather than following traditional HR policies, the company needs to make it modernized and convenient to be followed by the employees. HR policy plays a crucial role in winning competitive advantages in the market.
Cash and compensation: Reward management plays a vital role in motivating employees in an organization (Bonache and Festing 2020). If the HRM department of Reliance provides time to time initiatives and rewards after performance evaluation, then it will encourage employees to be engaged within the organizational goals and give the best performance.
International HRM issues
Mitigating international HRM issues requires a tactical way so that it does not negatively impact employee performance.
Strategic Talent Deployment: With the increasing competition in the international market, the necessity of strategic drivers’ talent deployment is also becoming significant. The HR department of Reliance needs to make sure that they allocate people according to their talent and capability.
Motivated Workforce: Employee motivation is necessary to maintain unity and collaboration within a workplace. As soon as the results come, people will automatically be engaged within the organization.
Legal Issues: It is important to maintain all legal rules and regulations to avoid legal and government intervention in business. Thus the organization must employ local legal advisors so that they can set legal norms for an organization based on the country’s rules. It will help the group to avoid every type of legal issue.
HRM practice is the key player to ensure organizational growth and maintain a good relationship with the consumers. Thus the organizations are responsible for implementing such policies that secure their human resource management so that it can provide positive results in employee management and customer satisfaction at the same time. It has been found that the Reliance group, despite being one of the largest MNC in India, is facing several HR challenges in both the national and international arena. However, maintaining good HRM practices in the international business area is not easy. Thus the company needs to analyze the market and business environment before entering into a new country. It will help the company to understand the way it can implement HR rules which will help it to avoid all kinds of legal and social issues. HRM also influences the company’s reputation in the international competitive market. With the growing competition in business internationalization, if Reliance focuses on strengthening its strategic human resource management policies, it will help the company not only to sustain in the international market but with competitive advantages that can lead it to become one of the best MNC in the global context.
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