International Human Resource Management Practices And Their Implementation In ALDI Australia

Description of the organization, the host country and International HRM practices

Discuss about the Human Resource Management knowledge.

The current report revolves around international human resources management practices and its influence on the organization. IHRM can be defined as the set of activities aimed at managing human resource at international level to achieve organizational objectives as well as the competitive advantages over the competitors at both national and international level. It is observed that IHRM could include typical HRM functions such as recruitment, selection, training and development, performance appraisal others functions done at international level. It is that implementation of HRM practices have impact on the organizational productivity. Thus, it is essential to implement the HRM practices appropriately to gain the positive outcome. The organizations that have been running the operation in the global environment have observed the importance of developing the HRM practices.  In order to understand the implementation of IHRM practices, the report considers the organization ALDI, which is based in Germany and it is having its subsidiaries in other countries. However, the report considers Australia as the host country where the subsidiary of ALDI is located. In order to design the international HRM functions, training and development as well as performance management practices have been considered to be implemented in the subsidiary.

Description of the company, ALDI, Australia (Host country)

ALDI is the common brand of two leading global discount supermarket chain with over 10,000 stores in more than 15 countries reached the turnover around £50 billion (Aldi.com.au. 2017). The ALDI group operates over 8000 stores worldwide. The firm has successfully been running the operation. ALDI is synonymous with high quality and exceptional value. The major goal of the firm is to provide people with a full range of grocery products that are of the highest possible quality at its incredible low price. ALDI provides a large range of products and services; some of them are Baby care, Wines, Coffee, Laundry, Skin care, liquor and others. On the other side, the firm has gained the popularity due to its high quality of products, customer service and organizational involvement in community development.

Description of the host country-Australia

Australia has an enviable, strong economy with the per capita GDP with four dominant West European economies. Australia’s proven economic resilience as well as sustainable growth provides an attractive, as well as less risk environment to operate business. Most importantly, it is identified that stable economy of Australia increases the facilitation of developing or running the business. As opined by Ratkovi? and Orli? (2015), Australia is a modern, developed, stable, democratic nation having a competitive as well as diverse market that widely encourages foreign investments and the trade imports as well as outputs. Hence, Song (2014) commented that the economy of Australia is further sustained by longstanding as well as stable political as well as economic ties with European and European Union.  Thus, it can be mentioned that political stability, transparency in the regulatory systems as well as sound governance framework could underpin its economic resilience. The country offers competitive rates for office space as well as remuneration of the professionals, which could be effective for the organizations.

Training and development

Descriptions of two international HRM practices-

Training and development- Among different HRM practices, the training and development are one of the major practices that have high impact on organizational performance. As put forward by Chung, Sparrow and Bozkurt (2014), the training can be introduced simply as the technique of an individual for developing the efficiency as well as the effectiveness to work areas by getting more knowledge as well as knowledge. In addition to this, training is also significant to build the specific skills, abilities and knowledge to an individual or employee. Hence, Minbaeva et al. (2014) also commented that training and development are significant along with the organizational growth. The benefits are also dependent on training, which means if employee performance enhances, the organizational profits increase. Alternatively, Peltokorpi, and Vaara (2014) mentioned that training is not considered as the core of organizational development. It might be considered as the function of the organizational development. So, in the context of human resource management, training and development remains as the field concerned with organizational activities that aim to profit employees and group performance in the organizational setting. Training and development as the HRM practice is effective for ALDI as, the firm is running the operation in international market, where customer service is always a major concern. Thereby, adequate training should provided to the employees. The employees treat the customers effectively providing them with high quality of service.

Performance management- Performance management is process by which the managers as well as the employees work together to plan, monitor as well as review employee’s work objective as well as overall contribution to the company. It is also identified that goal of performance management is to promote as well as enhance employee effectiveness. It is identified that the technique of performance management usually starts a couple of month before the appraisal cycle ends. As opined by Cooke (2014), the performance management can be considered as the technique of reviewing an employee’s performance annually. Performance management is one of the major techniques to motivate the employees. Based on the performance of the employee, if the organizations provide appropriate benefits or rewards, the employees become more concerned about his/her individual goals as well as organizational goals. This HRM practice could be effective for ALDI as the firm is running the operation in the global market such as Australia, where the labor market is competitive and employees have several options. If the organization takes care of the workers with performance management practice, the workers could be responsible towards their work and duties.

Performance management

Discussion and analysis on training and development

It is a known fact that training and development denotes the techniques to gain or transfer required to perform a particular activity or task. Thus, the benefits of training and development both for the company and the employees are strategic in nature even quite boarder. To meet the current as well as future challenge of business, the training and development carries a wide range of learning actions ranging from training of employees for the current work as well as more so. It also helps to improve the business horizon as well as customer’s service. As opined by Yahiaoui (2015), training and development helps to increase the performance of employees for career development programs help in deliberating on the knowledge, skills as well as attitude necessary to accomplish organizational objectives and to generate competitive advantages. The human resource managers have commented that the major challenge currently they are facing is the confrontation related to training and development (Aguzzoli and Geary 2014).

To ensure that the employees are equipped with proper skills, knowledge and abilities to conduct their tasks, training and development plays a significant role towards the growth and success of the business. By developing the appropriate type of training, the organizations must ensure that employees possess the right skills for the business as well as the same need to be continuously developed in the follow up of the best as well as new HR practices. Therefore, by providing the training and development session for the workers, ALDI will have control over the employee performance.  It is important for the organization to focus on its employees and their performance, especially when the firm is running the operation in the international market.

However, Afiouni, Ruël and Schuler (2014) commented that by selecting the appropriate kind of training, the firm helps employees to enhance the performance, which could be eventually effective for the organizations. Training could provide the workers with knowledge as well as skills to perform more effectively and making them able to meet the inevitable change that usually take place in their work. Hence, Lunnan and Zhao (2014) commented that training is only an opportunity for learning and development on several factors like design, and implementation of training, the motivation as well as learning style of trainees as well as the learning climate of the company. As put forward by Dixon, Day and Brewster (2014), evidence now demonstrate that organizations investing more in training could show larger net scale per employee, gross profit per employee as well as ratio of market to increase value. It is also identified that training is also a technique due to the employees need to learn new knowledge and skills.

Discussion and analysis of the design and implementation of the two international HRM practices in the subsidiary

Discussion and analysis on Performance management-

As put forward by Chowdhury and Mahmood (2012), the performance management has several different meanings; however, in essence, it is regarding the enhancement of the performance and usually referred to a range of management initiatives that contributes to  make performance more “manageable”. It can be considered as the diverse series of perspectives including the strategy, organizational behavior, operation management and HRM.  When the organization is in the need of developing organizational productivity, it has to focus on employee performance. As opined by Jimenéz-Jimenéz, Martínez-Costa and Sanz-Valle (2014), to enhance employee performance, the employees should be appreciated by encouraging their work and effort. In addition, the organizations also need to provide the employees with additional benefits such as rewards and appraisals. This highly influences the employees of the firm. Thus, when a firm is in the global environment employee benefits should be highly considered. In such context, Gurkov (2014) commented that performance management could kill organizational performance if they are not implemented. Observing the possible consequences, the organizations currently have implemented performance management based on planning, day-to-day leadership and regular one on-one.

Planning- The first thing, the organizations they need to is planning, but the firm makes sure that things they need to achieve would not be as big as moon landing. They will not be as intense as a supporting competition either but there should be a proper planning for the necessary tasks or goals that are essential to be achieved (Chang and Smale 2013). For example, the human resource manager of ALDI could sit down with each individual or employee to discuss as well as determine how the individuals in a team could contribute to the goals and objectives benefitting the organizations and individuals.

Day to day leadership- On a regular basis, human resource manager should be encouraging the achievement, which means , the manger should recognize the effort and success and giving feedback on the thing that are going well (Cogin and Williamson 2014).

Regular ones-on-ones- The human resource managers of the firm should personally communicate with the employee regarding the issues at the workplace. Throughout the year, the human managers should be having regular one-on-ones with each individual of the team. An effective practice of doing this would be on a fortnightly basis.

When the organizations are running the operation in the global environment, the firm should maintain the policies of both standardization as well as localization. For example, when the firm is running the operation in a foreign country, it should follow and implement the foreign culture or the culture of that particular nation to satisfy the employees. Thus, the HRM practices such as performance management should developed based on the country trends and industry standards of that country. On the contrary, if the organizations in the global environment are implementing the local culture or the culture of the parent country, the HRM practices could be affected (Chang and Smale 2013). The above-mentioned discussion indicates that performance management should be developed based on the type of workforce, which means the employees could be culturally different.

In addition, when it comes to providing employees with appropriate training as well as development, the firm should maintain the industry standards. The existing studies have also focused on IHRM to pursue implementation fit between the standardization of multinational parent organizations as well as practices and the localization of the host country’s practice. In addition to this all these, if the organizations tend to follow standardized HRM practices meeting the industry regulations of each nation, the company might not have to observe resistance in culture and HRM practices (Poór et al. 2014).

Likewise, parent-company should rather focus on the culture of that the host country. Therefore, the organizations should develop the workplace culture collaborating with the culture of the nation. Usually, the organizations have been seen to hiring the employees from the market where they run the operations.  More specifically, when the firm is in the host country, it has to hire the people from the host country. Therefore, while developing the organizational culture, the firm must have to focus on the local culture, as the people are hired from that environment or market.

Role of ALDI (Subsidiary) in the host country- The subsidiary (ALDI) should play the role of a global innovator. When the firm is in the global environment, it usually follows the global standards. The globalization of industry has seen an increasingly competitive MNC environment. Focusing on the human capital as well as assets throughout the knowledge economy, it is not surprising that MNCs feel pressured to enhance their human resource management practices. As ALDI is running the operations in the global environment, it should welcome innovation to remain active in the competitive environment. As stated by Novitskaya (2015), in the rapidly changing globalized market place innovation has largely become the essential factors for any organizations to accomplish the success.

Conclusion

On the completion of the report, it can be added that subsidiary could be highly dependent on its parent company and it could inherit the organizational culture from the parent company. The performance management and training and development resemble the practices of parent company. The above mentioned discussion also indicates that subsidiary, which is dependent on the parent company for critical resources, and then those which are largely controlled by its parent company tend to show the possibilities of implementing performance management and training and development practices. The HRM practices could be similar to its parent company irrespective of foreign country’s industry standards and culture. However, the concept could be more clear and evident if a primary analysis is further conducted on this topic considering an organization in host country.

The organizations like ALDI have the ability to run the operation in global environment accepting all possible marketing challenges could implement such HRM practices. It is often observed that subsidiary is usually dependent on the parent company for critical resource such as crucial determinations of the standardization of the performance management system in the host country. Hence, ALDI might have to establish its control over its subsidiaries with respect to capital, technology, management information, raw materials and other resources. The parent company ALDI must be aware of the fact that subsidiary in Australia could be dependent on its parent for the key resources. As the consequent, the parent company needs to exercise the control over its subsidiary implementing the formal mechanisms as well as HRM strategies that enable the standardization of human resources management practices and policies. It could also facilitate the control over the subsidiary.

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