IHRM Assignment: How The Cultural Aspects Of Host Countries Affect The IHRM Practices Of Woolworths?
Task: Prepare a well-structured IHRM assignment discussing the international human resource management practices of the Australian supermarket retail Woolworths. Group.
Human resource management is the process of managing employees in an organization. The human resource department is responsible for recruiting and hiring, training and development, maintaining the company culture, creating a safe working environment for the employees to work and maintain relationships between employees and the organisation (Opatha, 2019). International Human Resource Management (IHRM) is a concept relevant to multinational companies operating at a global level to manage their employees and talent pool along with human resource activities. IHRM is important for administrative services like selecting, training and appraising local and international employees. In this report, the IHRM practices of Woolworths are discussed to highlight the practices and different issues faced by the organisation in a global context.
Background of the organisation
Woolworths was founded in 1924 in Sydney by the founding CEO Percy Christmas. The organisation expanded to New Zealand in 1929 and has continued to grow over the years. By 1930, the company has 16 stores in Australia. Woolworths is one of the largest national retailers in Australia that has over 3000 stores and serve 29 million customers globally. The company has over 2000,000 team members and operate in several countries like the USA, India, China, New Zealand and the UK. Woolworths has been operating in host countries that have their own HRM practices (Woolworths Group, 2021). Woolworths believes in maintaining hospitality with the customers, teams and communities. The organisation has a vast network of stores that require centralized and streamlined HR practices to utilise the human capital and maintain employee engagement.
IHRM practices of Woolworths
Human resources play a vital role at Woolworths. Woolworths has subsidiaries and stores in multiple global locations which represent the human capital of the organisation. The employees and team members work at different locations and different stores where HR policies play an integral role in managing the employees.
Hiring and recruitment
The company recruits talented individuals in the organisation to ensure that the company has optimal operational activities undertaken with a diverse talent pool. Woolworths ensures that individuals are select based on talent and fairness is maintained in the recruitment process. The company believes in merit-based recruitment and hires employees on the basis of skills and competencies. The employees are hired based on their performance abilities and skills in the home and host countries. The company provides online job advertisements for job vacancies through job portals and their dedicated website to attract fresh talents. The company follows anti-discrimination laws and equal opportunities laws to recruit employees at Woolworths.
Record keeping and confidentiality
The company maintains records of the employees and ensures that the records are kept confidential.
Employee selection and job management
The company provides details of employee selection in the job management section. The company practices online communication channels to maintain the frequent flow of communication in the organisation. Woolworths keeps the organisational behaviour to include the performance of the employee to ensure there is no communication gap.
Training and development
The company provides training and development to their employees at frequent intervals to improve their skills and increase employee working efficiency. The new employees are provided induction to help them with information of the working process, increase their knowledge and get aquatinted with the organisational process. Woolworths has invested $50 million in the training and development of over 60000 employees to upgrade their skills and help them acquire technology-oriented skills (Crozier, 2021).
Managing employee performance
The company has implemented several initiatives to manage employee performance. The employees undergo performance analysis to help reduce gaps in the performance. The employees receive compensation based on their performance. Woolworths motivates its employees to enhance their performance and maintain employee engagement.
Woolworths provides several benefits to the employees. it includes everyday rewards plus, an initiative to provide team member savings from different partners and Woolworths group. The employees get discount cars and an additional 5% discount or 10% total discount on in-store or online shopping. They get upto 25% discount on other shopping as well. The employee benefits may differ from country to country. The employees from New Zealand receive banking benefits and discounts from certain banks and receive health insurance discounts.
Safety, health and wellbeing policies
Woolworths is committed to maintaining the physical and psychological safety of its employees. They ensure a safe working environment where employees can work free from injuries or illness. The company gives priority to its employees and strive to create a supportive environment where employees are values, respected and have equal opportunities to show their full potential. They have a Team Member Speak Up policy that offers an independent avenue to address internal issues.
The company is committed to providing an inclusive workplace that provides diversity. They have several activities to promote equal opportunities and focus on indigenous employment and nurturing woman in the organisation (Scarborough et al., 2019). The company hires individuals with diverse backgrounds, experiences and perspectives to promote an equally diverse community at Woolworths.
Impact of cultural aspects of host countries in IHRM practices of Woolworths
Human resource planning
The IHRM activities undertaken at Woolworths can have issues with human resource planning. The main challenge faced by the organisation is procurement, allocation and utilisation of the resources available at Woolworths. There are three categories involved in the IHRM practices that concern the host country, home country and third country. The Woolworths subsidiaries established in the host country can have differences in management compared to the home country (headquarters). This directly influences the HCNs ( host country nationals), PCNS (parent country nationals) and TCNs (third-country nationals) who are transferred to different branches.
The staffing can get affected at subsidiaries when employees from PCNs are sent to HCNs for supervision to manage the employees. This can create differences in management style, working ethics, planning resources and allocating functional members of the team (Wood et al., 2018). It will directly influence the rules and regulations of the subsidiaries or operations of the host country when outside contractors are hired to address performance issues and making personnel changes in the organisation. The IHR management will be responsible to manage the organisational policies, rules and regulations.
Training and development
Woolworths is providing training for the employees to help them acquire and upgrade the talents required to operate in the organisation. However, the training and development programs are given only to a certain number of employees which can be inferred that remaining employees or branches will not be receiving them. The lack of universal training and development programs can be challenging for the organisation (Rodriguez & Walters, 2017). The type of training provided can be different depending on location, culture and region. The HCs will be responsible to create local appeal without compromising the global identity of Woolworths.
The main issue among different host country branches and home countries at Woolworths are differences in culture, language and religious beliefs. Although Woolworths practices cultural diversity and inclusion, there are cultural differences experienced in different host locations. The employees sent from headquarters can have different organisational practices or policies to enforce at a host location that may create opinion differences. It is possible that lack of awareness, cultural tolerance, cross-cultural sensitivity among local and global employees, hiring staff or HR managers in either organisation (Shresha& Taylor, 2017). There can be language barriers as the employees of the host country are more inclined to local languages and dialects to communicate with each other.
Maintaining employee relations will challenge for Woolworths. There will be issues like fines and legal consequences for non-compliance which will have other risks like maintaining minimum wage regulations, contract terms of permanent or temporary employees, agreements, classification of employees, maintaining holidays and leaves of employees. It will include timekeeping and payroll regulations, workplace safety compliances and data privacy of employees. There can be challenges in performance evaluation and appraisal of employees from host countries, issues related to transfers concerning local or global locations and managing the employees.
Compensation and benefits
There can be significant differences in the operation of the host and home country concerning compensation and benefits. There are certain benefits or compensation that are provided only to the home locations like insurance plans, employee discounts and banking discounts.
There can be issues related to employee engagement, work satisfaction, employee motivation that can impact employee turnover of Woolworths. The different branch can supervise their employees in different manners which may be significantly different from how the home country manages their human resources. The HR policies may vary and appraisal standards may not be the same. There can be corporate reorganisation in the organisation that can change the corporate policies and corporate culture that influences the other departments and their interactions with the human resource management.
External environmental factors
Covid-19 and social aspects
The onset of the Covid-19 pandemic has caused disruption for every organisation including Woolworths. It has caused economic shock and health crisis and other adverse consequences. It has become difficult for Woolworths to include flexibility and strengthening internal efficiency, talent acquisition and innovative changes during the pandemic (Azizi et al., 2021). Changing social trends at a global scale have an influence on the attitude and behaviour of employees. Managing the job roles will become challenging for employees and selecting the right candidate for the organisation during the pandemic will become important for the HR managers.
The political scenario will impact the organisation and smooth functioning of HR managers due to ideas, opinions, beliefs and political interests. The political stability of the organisation will be necessary based on the organisational policies getting influenced because of political factors. Woolworths can face loss of production due to political interests creating unrest. The trade unions have a significant role to play and lack of a positive attitude or signed contracts can be detrimental to the organisation.
The economic conditions of home and host countries can vary significantly. It can have a strong influence on the IHRM like people, goods, information and capital in different geographical locations. There are factors like international and local competition that can intensify the pressure faced by the organisation.
Strategies for IHRM
To address the issues of Woolworths in the host country it is imperative that the organisation formulate a human resource strategy keeping the global needs in mind and implement the policies and practices that satisfy the workforce of Woolworths. The organisational rules must be created keeping the regional, local and national levels of Woolworths. Furthermore, the company must include diversity training and talent management training to ensure that employees get a chance to upgrade their skills and have employee engagement. Embracing cultural sensitivity and cumulative skills will be helpful for the organisation to retain an experienced and talented workforce in different locations. Structuring the talent management and regularly providing training, ensuring a safe working environment, checking the performance of the employees annually, maintaining feedback between the headquarters and host locations will help in the smooth flow of information (Lakshmi Pradha, 2015). Identifying the strength of the employees and providing training at frequent intervals will help to achieve a competitive advantage and reduce the attrition rate in the company.
International Human Resource Management is critical for the performance of an organisation. The IHRM practices and policies of Woolworths Australia has been addressed to develop an understanding of the global and host country practices in the organisation. Understanding the challenges helps to develop strategies that can mitigate the problems arising for Woolworth in other locations. Managing an MNC can be challenging and employers need to regulate and monitor HR policies to ensure that employee engagement and motivation is maintained to improve the performance of the employees and decrease employee turnover.
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Crozier, R. (2021). Woolworths to spend $50m equipping staff with 'tech' skills. Retrieved from: https://www.itnews.com.au/news/woolworths-to-spend-50m-equipping-staff-with-tech-skills-560745
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Woolworths Group. (2021) Retrieved from: https://www.woolworthsgroup.com.au/