Management of human resources is considered to be one of the most critical functions that the business organisations are required to perform in the modern day business world. The management of human resources becomes even more difficult when there are cross cultural differences and labour relations involved. In international human resource management, companies are required to prepare their expatriates for adjusting in the foreign country and at the same time design an appropriate management plan for the expatriates so that they can be motivated to perform better in the foreign subsidiary. Similarly, a human resource manager and a manager, who is likely going to be relocated from Australia to London, will face a number of issues because of differences in human resource management and labour relation of the two countries.
Cultural issues
Culture is defined as a set of beliefs, values, ethics, religions, cuisines, ethnicity, languages, etc. that govern the behaviour of a particular set of people. The differences in the culture of the two nations will be a prime issue for a human resource manager who will be looking forward to send an Australian manager to London. According to Hofstede’s cultural dimension framework, the two nations are different than each other when it comes to long term orientation. Where Australia scored 21 on the long term orientation scale, London has a score of 51(Geert-hofstede.com, n.d.) Certain examples that can help in understanding the issues that can arise due to the cultural differences between the two places are discussed below:
These are some of the many cross cultural differences that indicate the cultural issues that a human resource manager from Australia might have to face while trying to relocate a manager from Australia to London. The human resource manager will have to ensure that the manager being relocated has enough cultural knowledge of the host country so that he or she does not have to go through a cultural shock once relocated (Hailey, 1996).
Another major issue that the human resource manager will face while trying to relocate a manager from Australia to London is to take a decision regarding the compensation that the manager will be offered while working on a foreign assignment. Deciding the compensation and benefits for an expatriate is never an easy task as there are multiple factors that come into play. When sending an expatriate on a foreign assignment, it becomes the duty of the management to ensure the same living standard of the employee in the host country that he was being offered in the home country. The management has to ensure that the expatriate is offered the right amount of compensation that is in accordance with the market rates and is nor overpaid or underpaid. In case the compensation decided for an expatriate is less, the expatriate might find it difficult to work in the foreign country and might leave the job in between. As the economic conditions in both the nations are different, it might be an issue for the human resource manager to find out the right compensation that the expatriate should be offered while working overseas.
Deciding the additional benefits that the expatriate will receive can also be an issue for the human resource manager. Expatriates, while away on a foreign assignment, are offered a number of additional benefits from the management so that they can be motivated and do not face a problem while working in a different country. Expatriates receive benefits like housing allowances, standard of living allowances, travel allowances, maintenance allowances, etc. Thus, deciding the benefits that a manager being relocated to London from Australia can be an issue for the human resource manager.
Another major concern that the human resource manager of the Australian company will face while relocating a manager from home country to London is to ensure that the manager has the required technical capabilities to successfully complete the foreign assignment. In case the manager is not technically capable to fulfil the work given to him, the chances of failure of the expatriate program failure will increase and the organisation might experience loss of all the resources invested in the expatriate program (Selmer, 1995).
Expatriate programs are quite complicated and the rate of success of expatriate programs is also not high. Due to the scale of management and competition reaching a global scale in expatriate programs, such programs become difficult for the management as well as for the expatriates. Sometimes, the expatriates are subjected to such conditions that challenge their competencies and adjustment ability. Expatriates who are competitive enough and have the zeal to complete the foreign assignment successfully are able to survive while most of the expatriates end up requesting for repatriation to their home countries. Some human resource management issues and labour relations that might affect the life of the manager being relocated to London are discussed below:
Staffing techniques à in international business, organisations have to choose a staffing approach to fulfil the human resource requirements of its foreign subsidiaries. The staffing approaches can either be ethnocentric, polycentric, regiocentric of geocentric. Depending upon these staffing approaches, the management of business organisations are able to decide whether the host country employees will be given higher positions in the company or the home country employees. Such human resource factors can have a direct impact on the life of the manager being relocated from Australia to London because he might be offered a post in the host country that is higher than his post in the home country and vice versa (Study.com, n.d.)
Compensations and benefits à the relocation process of the manager will create issues for the manager as well as for the human resource manager who is looking after the expatriate program. In London subsidiary of the company, the compensation and benefits that are offered to the local employees might differ from the compensation and benefits that are offered to a person working on the same job post in Australia. Due to economic variations in countries and also because of differences in standards of living, compensation and benefits can differ to a great extent. If the expatriate is offered a higher salary then the local employees might start demanding more whereas if the expatriate is offered a lesser salary, he or she might feel demotivated and ask for repatriation. As a result, the management will have to device a compensation and benefit plan that will be in accordance with the economic conditions of the host country and at the same time, it will have to be enough to ensure easy survival of the expatriate in the host country. therefore, such conditions can have an impact on the life of the expatriate while working in the foreign country (Guo, & Al Ariss, 2015).
Work life balance à as discussed above also, the degree to which the employees of the host country give importance to maintain a proper balance between their work life and personal life will have a direct impact on the life of the manager. In London, the work life balance is not given much importance and people are more indulged in their work rather than taking out equal time for their personal lives. In such a condition, an expatriate from Australia working in London will face an issue as he would be used to a work culture where work life balance is given a great importance as compared to the host country and might also have an impact on his or her life (Study.com, n.d.)
Working conditions à furthermore, the working conditions in the two countries can be quite different in terms of hygiene, working hours, minimum working hours, etc. For example, the minimum working hours in Australia can be 8 hours while it can be 10 hours in London. A manager being relocated from Australia to London can feel an impact on his life because of the difference in the work conditions.
employment laws à the labour or the employment laws in the two subsidiaries can differ to a great extent. For example, in London, the maximum working hours for an employee are 48 whereas the maximum weekly working hours for an employee working in Australia are 38. A person in London can work for more than 48 hours a week if the average working hours are less than 48 hours over a period of 17 weeks. Similarly, any employee working in London can ask for a flexible work arrangement even if not a parent or caretaker but the employee should have worked for the same employer for at least 26 weeks. On the other hand, an Australian employee can ask for a flexible work arrangement only if he or she is a parent or a care taker and should have been working for the same employee for at least 12 months. Such differences can have a great impact on the life of an Australian manager working in London.
All employees working in London are entitled for a 5.6 weeks holiday every year while all workers working for more than 5 days a week must receive 28 days paid leave in a year. On the other hand, employees working in Australia are entitles to four weeks paid annual leave.
Conclusion
The management of human resources is a difficult task and gets even more difficult when the management of human resources has to be done on an international level or involves the management of expatriates. The issues related to the human resource management and employment relations increase when operating on a global scale and the differences in cultures of different countries can make it difficult for the expatriates as well as for the management of both the subsidiaries.
References
Geert-hofstede.com. (n.d.). Australia – Geert Hofstede. [online] Available at: https://geert-hofstede.com/australia.html [Accessed 28 Mar. 2017].
Guo, C. and Al Ariss, A. (2015). Human resource management of international migrants: current theories and future research. The International Journal of Human Resource Management, 26(10), pp.1287-1297.
Hailey, J. (1996). The expatriate myth: Cross-cultural perceptions of expatriate managers. The International Executive, 38(2), pp.255-271.
Jhajharia, S. (n.d.). 5 Cultural Differences Between Melbourne and London and their Impact on Business Coaching. – London Coaching Group. [online] London Coaching Group. Available at: https://londoncoachinggroup.com/mindset/5-cultural-differences-melbourne-london-impact-business-coaching/ [Accessed 28 Mar. 2017].
Katie, (2016). Key Differences Between Australian, American and British Work Culture | Language Trainers UK Blog. [online] Languagetrainers.co.uk. Available at: https://www.languagetrainers.co.uk/blog/2016/09/19/key-differences-between-australian-american-and-british-work-culture/ [Accessed 28 Mar. 2017].
Selmer, J. (1995). Expatriate management. 1st ed. Westport, Conn.: Quorum Books.
Study.com. (n.d.). Global Staffing Approaches: Ethnocentric, Regiocentric, Polycentric, and Geocentric – Video & Lesson Transcript | Study.com. [online] Available at: https://study.com/academy/lesson/global-staffing-approaches-ethnocentric-regiocentric-polycentric-and-geocentric.html [Accessed 29 Mar. 2017].
Study.com. (n.d.). What Is Employee Relations? – Definition & Concept – Video & Lesson Transcript | Study.com. [online] Available at: https://study.com/academy/lesson/what-is-employee-relations-definition-lesson-quiz.html [Accessed 29 Mar. 2017].
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