The term human resource management refers to the strategic approach of coordinating employees within a country’s boundary while international (IHRM) can be defined as strategic approaches undertaken by an organization to manage employees in the host country from the parent country. Both approaches have a universal goal of improving the performance of employees to gain a competitive advantage over peers in the same market.
Human resource managers are tasked with the responsibility of sourcing, interviewing and recruiting employees as well as negotiating their salaries within the country. Besides, they motivate, appraise the employees, reward and make recommendation for retaining top-performers in the organization. International human resources managers on the other hand are in charge of the recruitment process for organizations that are located outside the country. They also ensure that the best cliques of employees are sought after and assigned duties depending on their prowess and capability to realize the best results for the organization by coordinating with foreign subsidiaries to inculcate local best practices in the firm (Raletic-Jotanovic, Ratkovic and Dasic, 2015).
The management model that was adopted by the hospitality firm had double-edged implications. On the one hand, the human resource management strategies inculcated a culture of proper planning of business objectives to restructure or improve business systems. On the other hand, the strategies were seen as focused on enhancing the value of employees’ contribution through competitive improvement of skills by establishing guidelines that support guarantee (Legge, 1995).
The hard Variant
According to this model, there is a positive correlation between human resource management and the business strategy adopted by an organization. However, there is evidence that the concept of human resource management is more complex than the nature of business strategy and fails to meet the expectations of the employer (Blyton & Turnbull, 1994).
The hard variant model inclines the human resources managers to emphasize on the critical significance of the association between the principles of human resources and the overall goals of the firm-including activities and action plans. This implies that human resources are factors of production and the organization should spend on converting its extinct features in to capital assets. In the opinion of Drucker et al. (1996), human resources management practices are observed as adaptable, purposeful recruitment patterns aimed at tapping the right amount of efforts for specified goals and objectives in an organization.
Based on the business language and economics report, hard variant human resource management model follows a specific pattern of argument compared to equivocal management approaches. This is in agreement with, as Storey (1987) puts it, human resource accounting provisions that emphasize on the use of quantifiable statistical parameters to assess business strategies and supervise employees. According to Vaughan (1994), there is a close link between the hard variant human resources management methodology and scientific or product management models. The common feature is the fact that employees in both situations are forced to operate in accordance with business principles with potential benefits to the firm even when they are not fully in agreement with the strategies.
Based on its ability to put employees on the lookout for better performance, Ainthinia Hotels will adopt the hard variant model in the recruitment process. The human resources manager intends to infuse policies that will have to be followed by all employees in the employment contract. Moreover, employees will be regularly appraised to ascertain that activities are done in accordance with the provisions of the organization’s objectives for maximum returns on profit margins and to achieve competition agenda.
According to Redman and Wilkinson (2009), this model provides packages that can be adopted by organizations to operate globally and edge competitors in the market irrespective of administrative settings or geographical location of the firm. This means that one can predict factors affecting human resource management in remote areas and design strategies for improvement to realize high performance. Paauwe and Boselie (2003) posit that best practice model is a pointer towards harmonization between human resources activities and organizational principles that requires maximum determination from managers.
In accordance with Armstrong (2006, p. 65), the best-Practice model is capitalizes on the merits of high performance and Pfeffer’s model. There are seven best practice model metrics for successful organization, that is; security of employment being selective while hiring fresher, form team that can self-manage, decentralization, high reward with relation to performance, extensive exercise, decrease in barriers and wide-range distribution of financial and performance evidence (Pfeffer, 998).
The recruitment procedure used in the Ainthinai Hotels follows a cultural fit but will involve the top management travelling from the UK to Peru and engage those who will be willing to work in an environment where Peruvian culture is practiced. The model that will be used for hiring employees in the organization will be psychometric testing approach. Employees from the different backgrounds will have to be trained in order for them to be flexible and meet all the provisions of employee appraisal requirements. Good performance will be recognized and employees with exemplary performance will be rewarded using Ainthinai Hospitality Private Limited criteria for motivation.
Employment will be biased in favor of English and Spanish speaking applicants since they will be part of the decision-making team. Besides, their feedback will be given proper consideration and recognition and those dedicated and determined employees will be promoted to supervisory and management roles. Such employees will be allowed to execise control measures particularly on food and beverage departments of the firm (evidence annexed as appendix 12.1. An Ergonomic Management Commitment and Policy Chart).
The research conducted by a consultant hired by Ainthinai Hospitality Private Limited using current academic materials and data stored in the cloud concerning prevailing circumstances between UK and Peru is outlined below; (it covers mechanisms to solve cultural institutional parameters and a PESTE analysis of environmental factors.
The common concern that all UK based firms deal with to survive in the economic block is the issue of Brexit. 40 years have passed since UK became a member of the integrated European Union but one need to handle cross-cultural border supply chains issues, employ people with cross-cultural views and train people on how to work in culturally diversified environments while maintaining the UK cultural facts. This has brought political challenge to UK investors due to geopolitical confusion that makes an environment non-conducive for investment (Raconteur, 2019).
According to Mendizabal (2019), political imbalance in Peru caused by periodic government changes that disrupt social and institutional arrangements that cannot be managed by the Peruvian industries and political frameworks have been a major blow to national growth and development hence scare away potential investors.
To help resolve political and legal issues, Ainthinai Hospitality Private Limited company will put political consideration into spotlight while designing the employment contract. This will be aimed at shielding the organization from changes in political arena, protect employees of UK origin and their counterparts of Peruvian origin in equal measures.
The high GDP of Peru pitches it amongst the five best performing economies in the global arena. According to Bush (2019), good performance of the Purivian economy is associated with diversity and increase in direct foreign investment, both in the public and private sectors generating profits even to small scale investors. The wage rate per hour in the UK labour market recorded a growth rate of 2.8%, followed by NNI of ?38593 per capita. The GDP of 2019 was 29.9% with balanced growth across sectors (theOECD, 2019) (Refer Appendix : 12.3. GDP of Peru).
During the fiscal year of 2017-2018, one of the economies that recorded stronger growth patterns was Peru wit 2.5% increase in GDP. As pointed out by IMF Blog (2019), modernization and developmental activities caused growth to be static in the nation though. The growth was occasioned by the transparent Peruvian legal framework that fosters a welcoming environment for foreign investment. As Hilgert (2019) notes, one of the upcoming industries in Peru is tourism to join manufacturing, mining and energy production industries that are well-established.
The UK labour market grew at approximately 76%, and unemployment rate dropped by 3.8% and economic inactivity also reported at 20.8% (Ons.gov.uk, 2019). In 2017, the Peru labour market was 72.4% and in the revised 2019 data, of the 31.8 million population, the rate of unemployed people increased by 4.2% in 2016 (Ceicdata.com, 2019).
National statistics data on labour shows that labour survey for UK indicate that 80.3% of the men are unemployed while 72.3% among women are unemployed (Ons.gov.uk, 2019). This indicates that men have a higher rate of unemployment than women since 2013 where 13.4 million women aged 16-64 are in the labour market, with 42% of women in part time jobs. The culture of Ainthinai Hotels permits recruitment of 80% of Part time employees and 20% of top management are salaried in UK.
In terms of gender equity, Ainthinai Hotels is one of the organizations where gender balance is practiced. Women are given similar preference as men, with similar privileges and equal rights as fellow counterparts of opposing gender. However, it obliges with patricentric tendencies where the male leads the family and implements the same pattern of thought where the male leads the rest in the workplace (Rex A. Hudson, 1992).
Diversity of Cultural Expressions (2019) report indicates that Peruvians regards gender equity in politics, education and employment with high esteem for the common goal of societal development. The labour population in Peru is Amerindian or mixed with few elements of people of Chinese or Japanese origin while in the UK, it is majorly a mix of British, Asian, African and Europeans (Barrientos, 2013).
In the Ainthinai Hotels, gender equity is maintained in the workplace, to ensure equal number of men and women in the organization during normal working hours and during shifts as well as overtime periods. However, since the Ainthinai Hotels have a corporate responsibility to empower women, promotional activities will solely be done by female characters.
The technological environment of the UK can be demonstrated using two valid parameters, that is, the gross domestic spending on R&D in the UK is approximately 1.7% of the total GDP and up to 94.9% of the industries in the UK have internet access.
In 2014, the total expenditure for research and development for both the private and public sectors in Peru was significantly low making the country to be one of the countries in Latin American regions that are behind in terms of innovation, science and technological development. The level of investment in discoveries is very low in industries is extremely low. Lack of political good will and the absence of development framework or the need for competition coupled with insufficient/quality human resources deter companies in the country to invest in modern technology (Oecd.org, 2019).
In the opinion of Hofstede (1984), human resource practices are rooted in cultural perceptions based on theories of specific nation’s myths making organizations to be established upon the foundations of predominant values.
Researchers such as Hofstede, 1980; Trompenaars, 1994; Ravlin and Meglino, 1987; Schwartz, 1999; Triandis, 1995) evaluated the concept of cultural values and established a balance between conflicting philosophies and agenda in human resources management. These findings have resulted into creation of more attention to ascertain the best approach to yield country-wise results that encompass divergent values (Lenartowicz & Johnson, 2002; Hofstede, 1980; Schwartz, 1999; Trompenaars, 1994). These concepts play a major role in conceptualization of differences in organizational experiences across borders.
The underlying culture in Peru is exhibited through distinctiveness emphasized by the significance of personal connectivity to the comprehensive modernization associated with them. Moreover a trait portrayed by collectivism outlines the significance of the company, while the strategies applied by an individual and his or her personal contribution affect the entire organization.
There is a positive correlation between power distance and acceptance of discrimination and individuals originating from higher power distance believe that managerial positions should be skewed towards their ends. Research by Esterby-Smith, Malina, Yuan (1995) showed that in a society with different social classes, individuals with advanced social status enjoy more rights than the less privileged and the society sees no evil in the perception. On the other hand, people from the lower power distance reserves object to the dissimilarity and furiously contest the honors pegged solely on status. This is in agreement with Mead’s (2003, p. 36) findings that all members of the society should enjoy the freedom of making decisions irrespective of the power distance.
In contrast to the UK, Peru’s have a high power distance. In the Power Distance Indicator scale, Peru has scored 67 and United Kingdom scored 35. The implication is that in UK, there is a significant variation in power distance between managers and the working class. On the other hand, Hofstede Insights (2019) noted, Peru exhibits a higher magnitude of managerial personnel and working class differentials.
In the opinion of Maheswaran and Shavitt (2000), information about individualistic and collectivist cultures is vital for critical appraisal of consumer performance. This idea borrows from the concepts brought forward by Hofstede in 1980. Scholars such as Triandis et al. (1990); Shkodriani and Gibbons (1995) acknowledged the complex nature this element and linked it to motivation, risk, perception, self?concept, and social performance for easy comprehension.
As indicated in Hofstede report, UK scored 89 while Peru only manged 16 points ((Refer Appendix 12.5. Cultural Model Comparison of UK and Peru). It shows that individualistic societies are only concerned about the wellbeing of their families. On the contrary, collectivistic people are one another’s keeper and coexist in groups cemented with top-level loyalty. It can be deduced that UK has individualistic culture and Peru have collectivistic culture. An attempt by Ainthinai Hotels UK employees to adopt individualistic culture contradicted with the Peruvians’ trait of teamwork, moral values and being hospitable by showing acts of humanity to others. The result was inculcation of Peruvian culture into the minds of all Ainthinai Hotels employees.
Masculinity and femininity with regards to human resources management is the allocation of responsibility among people of different gender-as portrayed in the physical morphology as the basic consideration in the social order (Hofstede, 1980). There is a clear distinction between male/masculine dominant nations-characterized by high-level confidence and determination and the feminine nations that exhibit a culture of humility and morality.
As indicated by Hofstede Insights UK scored 66 while Peru scored 42. (Presented in Appendix 11) meaning that UK is a Masculine civilization – highly successful and ambitious, whereas Peru is a feminine society, exhibited by the high number of contradictions in culture and misunderstandings between the generations. People of Peruvian origin exhibit elements of demotivation with limited choices for human interactions and family recognition based on wealth hence remain at the periphery when managerial roles are allocated instead of claiming leadership positions.
To reaffirm Ainthinai Hotels’s position, its culture is to encourage women employees to take active roles in shaping the society and most of the policies meant to improve women welfare as well as contribute towards Peruvian cultural change.
This concept links the society’s perception on uncertainty and opacity where human beings are seen as working for a better society that has morals and honesty as guiding principles. It also helps the society to master how to deal with opposing opinions even in uncomfortable scenarios. Julie Anne Lee, Ellen Garbarino and Dawn Lerman (2007), recommend that a society should endeavour to reduce uncertainty by formulating safety and security policies and rules that follow philosophical, diplomatic and but ambitious frameworks.
Report by Hofstede Insights indicated that UK scored 35 while Peru scored 87 (exhibited in Appendix 11). It shows that UK as a nation has the capacity to cope up with the prevailing situations in the country with regards to technology and infrastructure, instead of restructuring their economic settings that they could manipulate according to their need. Peruvians on the other hand are not able to follow the strategies used by UK due to high cases of corruption and weak laws that favor the rich.
Ainthinai Hotels are lucky because they have a detailed algorithm for its operational process for managing human resources across political orientations in the country. Besides, employees will undergo thorough training to instill flexibility and ability to handle guests from different backgrounds to eliminate instances of customer complaints.
Strategic Orientation – EPRG Theory
As discussed by Perlmutter (1969), the acronym EPG model stands for ethnocentric, polycentric and geocentric factors of human resource management. It was later expounded on by Wind and Douglas (1973) who added another concept of regiocentric factor for recognizing the organization’s orientation-to give insight into international business competition. (Refer Appendix: 12.4. International Orientation of EPRG).
This form of orientation emerges during the initial stages of hospitality brands globalization (Wind et al., 1973; Bell, 2008 and Muratbekova-Touron, 2008). Managers design strategies based on domestic industrial policies and integrating them with operative foreign trade objectives. Ethnocentric policies are often complicated in the parent country making the firms competitive in the host country where decisions will be made. The standards of operations are designed using the demands of the target segment composed of multicultural clients who visit UK instead of the native community.
Policies adopted by firms that rely on ethnocentric orientation make the international organizations to exhibit traits of the parent country (Ahlstrom and Bruton, 2010, p. 42). Moreover, employees in such firms exude a lot of confidence and believe that they are doing the right things all the time. However, ethnocentric societies often force their opinions on others without grasping the reasons why foreign countries have opposing viewpoints.
A critical appraisal of the human resources management practiced in the Ainthinai Hotels in the UK and the decisions made to formulate human resource management strategies, Ainthinai Hotels is indeed not an ethnocentric community.
Just like ethnocentrism, polycentric orientation comes into play during the preliminary phase of hospitality brand’s internationalization (Wind et al., 1973; Bell, 2008 and Muratbekova-Touron , 2008). Policies will be formulated to tap on the merits of social responsibility by the visiting firm. Management is simplified through adoption of centralized system of decision-making in the affiliate markets. The operating hotels also build combined ventures to eliminate unnecessary competition with partner organizations. In addition, the hotel management formulates policies in line with the political orientation in the country for easy development monitoring and evaluation to ascertain achievement of goals and organizational objectives. The market segment has a small geographical as well as demographic size hence will require less marketing effort though different levels of standardization in operating firms will be necessary due the absence of uniformity in the country.
Firms that adopt polycentrism approach of management allow managers in the host countries to make their own decisions without being compelled to operate by the terms of the head office managers in the same country. However, there is a lack of harmony between the regional branch properties of the hotel management. In other words, individual managers are reluctant to adopt the management practices as formulated by top management. For instance, the native staffs have a strong belief about the performance of the local market (Beamish, & Calof, 1994).
Polycentric strategy is partially adopted by Ainthinai Hotels since the local managers are allowed to make decisions for certain cases without any involvement of top management authorities. However, based on its demerits, polycentric strategy parse will not be the ideal approach for Ainthinai hotels when cascading to Peru from UK.
Regiocentric orientation deals with integration of international standardized groups of host nations and treating all of them as monopoly market. A case in point is an hotel that operates in Eurocentric orientation applies standards set for European people and its target market segment will be based on European country citizens guided by amendment of policies that are uniform across all European markets (Schröter, 2008), as well as transatlantic firms (Tubielewicz, 2004).
Multi-national corporations (MNCs) that adopt regiocentric leadership style cite increased profit margins and positive public relations (combination of ethnocentric and polycentric methodologies) for designing and implementing regional demands (Shong, 2008, p.49). Such countries focus on specific market segments and not the entire country.
In its vision, Ainthinai Hotels’ first destination point outside the United Kingdom is Peru. This was prompted by the business potential opportunities in the Latin American region coupled by similarity in cultural orientation between the countries that is useful for research and development to expand globally.
This orientation, as defined by Wind et al. (1973), Bell (2008) and Muratbekova-Touron (2008), postulates that human resource policies are standardized in all the properties throughout the world, with negligible differences in the operating countries cultural coordination. This approach can be used by an organization to keep down the cost of investment in new employees in different countries and commanding a competitive advantage in the market.
Companies that adopt geocentric approach of management focus on the global market due to their strong financial muscles and concentrate less on the regional platform. Standardization enables clients to obtain standardized products with uncompromised quality irrespective of their location (Radomska, 2010).
Organizations that participate in the highly competitive market are obliged to adopt geocentric orientation to stay relevant and strategic in service provision (Bartlett & Beamish, 2010). This is ideal for organizations focused on long-term business strategies such as maintaining successful presence in the market with long-term stability agenda instead of finding temporary solutions to problems.
Strategies adopted by Ainthinai Hotels to apply the geocentric orientation
Expansion normally comes with managerial diseconomies of scale and Ainthinai Hotels management will not evade the experience of the challenges of management complexity due to expansion. Though operational managers for Ainthinai Hotels will be able to make decisions, the final words will come from the top management. Moreover, the standards of operation for all employees will be similar for both UK and Peru regions. The top managers will be responsible for formulating policies affecting employees in collaboration with the Peruvian Ainthinai Hotel managers to remove any element of confusion in targets and short-term goals.
Ainthinai Hotels in Peru will adopt human resource management strategy as the people management approach. In this approach, the responsibilities of the mangers will encompass all sections of the premise-beginning with recruitment, training and development of employees and resource allocation. In addition, the model links employees’ physical efforts and power with human prowess. The approach relies on need quality of employees to achieve quality services and maximum productivity with a promise for employee benefits. Moreover, the principle ensures that employees are prioritized based on human values. The Ainthinai Hotels in Peru meets all the management requirements and job designation is based on the concept of teamwork. The organization has orientation programs for new employees to motivate them and inform them of new developments in the methods of production adopted in the organization. This has led to high productivity and high levels customer satisfaction for optimum performance resulting in to employee motivation. The rewards offered to employees are justified on performance basis reflected on satisfied employees and the employer at Ainthinai Hotels (Businesstopia, 2019).
This includes policies for motivating and rewarding Ainthinai Hotels’ employees in Peru with the right to promotion to head managerial positions. This is aligned to Maslow’s theory of hierarchy of employee’s physical needs, safety needs will be taken care of by Ainthinai Hotels to help individual employees to achieve the other three needs to know the potential they have got to prove to the world (Sirgy, 1986).
The hotels offer flexible timings for employees to give them a challenge to strengthen their skills. They are also engaged in preliminary decision-making processes and allowed to provide feedback that the management can use to improve systems in the firm.
Industrial knowledge is passed on from generation to generation in the organization by involving the senior members to train and mentor new comers in the organization.
Conclusion
The human resources management approach adopted by Ainthinai Hotels in Peru relies on modern management tools that are simple to comprehend and implement by a novice. The policies received general acceptance because they had been formulated with the Peruvian culture in mind, that is, their implementation is hinged upon the foundations of providing opportunities for locals to improve their skills and prowess. This paper provides an insight into some of the concerns that the Ainthinai Hotels management can use to improve service delivery in their premises and keep a jovial team of employees.
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