Gmr Case Study: Managing Hr in a Global Environment Essay

I. TERMS OF REFERENCE This report is a case study of GMR International Company, which analyzes the different components and challenges of Human Resources Management faced by GMR in a global environment and through a theoretical review, establishes possible improvement strategies towards the creation of best practices. II. METHODOLOGY This report is part based on the interview held with the HR manager of the company complemented with primary research from books and electronic sources listed at the references and lecture and seminar’s contents. 1. INTRODUCTION In a global market, how companies manage and handle their employees determines a key strategic role that ultimately creates a competitive advantage. Companies operate on an international operational level locating outbreaks in different countries and facing different cultural challenges. â€Å"Managing resourceful humans requires a constant balancing between meeting the human aspirations of the people and meeting the strategic and financial needs of the business.† (Torrington, Hall and Taylor, 2008, p.3) A company through any domestic and internationalization process must identify the basic needs of its employees in relation to their business guidelines, creating a balance between strategic and operational resource management. Businesses are valued for their intellectual capital and are projected by the management of intangible assets The purpose of this report lies in the evaluation of the different variables that a global company such as GMR must study, understand and reflect on its corporate strategy for the optimal development of their global operations, based on a adequate personnel management and the creation of sustainable policies for the management and development of intangible capital. 2. GMR INTERNATIONAL: COUNTRY PROFILE GMR Group is a Bangalore headquartered global infrastructure major with interests in the Airports, Energy, Highways and Urban infrastructure, with its International Headquarters based in London. GMR holds interests, directly and through its part ownership of InterGen, in 15 operating power plants with over 8,800MW of generating capacity. In addition an impressive portfolio of approximately 12,000MW of gas, coal and hydro plants are in various stages of construction and development both in India and internationally. GMR has shareholding interests in 4 international airports (New Delhi International (P) Limited; GMR Hyderabad International Airport; Sabiha Gokcen Airport LTD; GMR Male International Airport Ltd)) handling 40 million passengers p.a and 9 road projects exceeding 700 kms of paved roads. GMR is fully committed to the development of infrastructure assets, and in the past two years has raised over US$ 3 billion for the development of airports and another US$ 2.2 billion for the development of power and infrastructure assets including US$1.1 billion for the acquisition of 50% of InterGen N.V, a global power generator. The Group through the dedicated GMR Varalakshmi Foundation, manned by committed professionals is actively engaged in Education, Health, Hygiene and Sanitation, Empowerment & Livelihoods and Community-Based Programs, reaffirming its grass root presence as change agents of society in the field of Corporate Social Responsibility. 3. RECRUITMENT â€Å"Recruitment is defined as searching for and obtaining potential job candidates in sufficient numbers and quality so that organization can select the most appropriate people to fill its job needs.† (Dowling, Engle and Festing, 2008) â€Å"Recruitment is the discovery of potential applicants for actual or anticipated organizational activities. Two conditions must exist for selection to occur, (1) the organization must have a candidate whom it is willing to employ; (2) the candidate must be willing to accept an employment offer. Recruitment is the process of finding applicants who meet both of these conditions.† (Andrews 1993) â€Å"Organizations do not operate in a vacuum, and recruitment drives are one of the times an organization has direct contact with the outside world. Amongst other factors affecting recruitment, are the framework imposed on legislation and that no organization will want to spend money on unnecessary activities.† (Foot and Hook, 2005) 3.1 Recruitment Strategies There are 4 recruitment strategies, which are defined as such. These are 1. Ethnocentric 2. Polycentric 3. Geocentric] 4. Regiocentric Ethnocentric| Polycentric| Geocentric| Regiocentric| Ethnocentric is a belief in the superiority of one’s own ethnic group. The firm basically believes that parent-country nationals are better qualified and trustworthy than host country nationals.| Polycentric is a belief that local people know the local environment better than outsiders.| Geocentric is the notion that the best people should be employed, regardless of their nationality.| Regiocentric is the variation of staffing policy to suit particular geographic areas.| 1.Based on Paul Coldwell’s seminar slides, 2011. GMR International uses all four of the above-mentioned strategies, depending upon factors mentioned below, * The requirements of the job position to be filled in. * The position of the job in the hierarchy of the firm. If the job were a high position one, they would use the geocentric approach; and if it were for a more junior position, they would probably use a polycentric approach. * They would not like to waste too much time or money on the hunt for the right candidate. * Even when they are looking for a candidate for a high position job, they have certain restrictions to be cautious about from the UK Border Authority and the Government. When using the geocentric approach. E.g. The Head of Airport is an Italian working in South Africa and would report to the UK. Because he was an expert on airports, he was hired for the job. E.g. recently, when trying to bring in a Malaysian to UK, the UK Border Authority refused his sponsorship, so it did not work out. When using the polycentric approach. E.g. When looking for administrative support, GMR looks for local people to do the local jobs, as they would not like to waste the time and money to do a whole UK or EU based search for something small such as skills. 3.2 Challenges for hiring people at GMR International * GMR, as a brand, is not that well known in the UK and tit is also not as strong as some of their competitors, therefore, there is a hurdle of recognition. * GMR International is a non EU and non US organization * People are varying of working for a company, which is Indian by origin, yet headquartered in London. * People are not prepared to leave their jobs to work for a company with less work experience; limited recognition as a brand; and with limited track record. 3.3 Outlining the Recruitment Process â€Å"In the process of recruitment, in the first instance, sources of prospective employees are located. In other words, from where the employees would be available. Thereafter, these sources are approached and efforts are made to attract the interested people to the organization.† (Foot and Hook, 2005) The recruitment process at GMR International is not too different from those of other companies in UK. They look at the activities set out for the year ahead and map it out according to the capacity that they have in their organization. When they do this, there are obviously, some gaps that need to be filled in, in order for them to work on some projects. In order to fill in these gaps, the organization makes certain decisions as to how to do this. This can be done by 4 methods, 1. They could recruit temporary people 2. They could get people on contract 3. They could get that particular piece of work done somewhere else (outsource) 4. They could hire someone to do that job When they go ahead and choose the fourth option, they look at as to how to approach the market, in the following ways, * E- enabled vehicles – for the more junior staff as a lot of such recruitment takes place on web based applications. * They do not give much importance to the employees referral program * They tend to use agencies; search firms for the bigger, more senior positions * For the more junior staff, they recruit within UK. * As the position increases with seniority, they tend to engage colleagues from other offices to help them out, in case it can be managed within the GMR family. 3.4 Post Recruitment & Selection At GMR, they are not very firm in their services to keep an employee with them. They do not have a support system or an evaluation program. â€Å"Normally, at a firm, there is an evaluation program and a support system for the first 6 months. In this program, they make a check on the new employee on day 1; week 1; month 1; month 6. While, they have tried to be stricter in this aspect and tried different techniques for keeping an employee happy and with them, it has not always worked well with them. 4. EXPATRIATES With globalization shaping our world, organisations are trying to expand their marketplace in order to increase their competitiveness. In the industrialized countries, international working has become a common feature and the contact between different cultures becomes a regular thing in people’s social and professional lives. â€Å"International HRM involves striking an appropriate balance between global integration and local adaptation in terms of resourcing, training and developing personnel, reward and performance management, employment relations including communications, and health and welfare† (Porter, Bingham and Simmonds, 2008, p.400). So in this process of internationalisation, companies need to move people around and they have to make sure that they do it in an effective way because of the high costs involved. Expatriates have to deal with the changing they are going to occur, in culture, workplace, country and many more, the company must be sure to prepare them appropriately in order to get the best from their experience both in the new location and back home when they finish their period. According to Tayeb (1996), some companies such as Natwest in the UK, Philips in the Netherlands and Groupe Total in France conduct extensive international in-house seminars. In these courses they cover national culture differences, family adaptation, local politics and laws and international finance, more over some firms send their future expatriates, together with their family, to special language courses. Paul Colwell, former lecturer and HRM manager at Regents College states that an expatriate cost on average $250.000, or even more, which shows the importance of a good HRM strategy. An expatriate should receive the right support before, in the mean while and after his experience abroad. Before he leaves, the company should prepare him to live in another country, through teaching the culture aspects (food, climate, politics and laws, standard behaviour etc.), suggesting him not to sell his house in his home town, because if something goes wrong with his experience it would be way better to have some place in which he can to return. The language is an important factor in order to make him effective in his new workplace and the company should provide him the possibility of language classes to attend. All of these pre-departure trainings should be joined by the whole family, in fact while for the local employees the company don’t care about their family affairs, when you take in examination an expatriate the whole family becomes the company’s business. Experience shows that the majority failures in expatriate’s program come from family problem and complaints. After the departure, a good way of managing expatriate, according to the theory, is to take care about their house in the origin country (rent it or doing the maintenance needed) and to find a house where they are going to live in the new country, taking in consideration the location and the comfort they might need. A good communication with the expatriate during the whole experience should be maintained in order to prevent possible problems and to show him that the company doesn’t leave him alone. The company should take care of the partner job in the new country (or/and hobbies) and register their children in schools in order to make sure that the employee’s family is comfortable in the new location. The return of the expatriate is an important moment, too often underestimated. The company priority is to make sure not to lose all the money it has invested on him by making him decide to change job. An interview at the return it is a necessary step, as offering him the right position deserved in the company and not the same job he had before he left in order to maintain him motivated and happy, so they are not losing all the know how he gained through his years abroad. The period of the experience abroad it is variable, but following Paul Coldwell experience 3 years is and ideal length, because after that the employee may lose some of the attraction and interest in the job and start to decrease his learning. 4.1 GMR Policy Following the interview with the GMR HRM Manager, we found out that they do very little for their expatriates, mostly because they just started their internationalisation and they are a medium entity in the business. They don’t offer any pre-departure preparation, leaving it to the employee’s arbitrariness, they only thing they offer is a period of time that they could spend in the new country with their family in order to decide or not to go. GMR take about their VISA and immigration laws, moreover they find and pay the house in the new country, making sure that it is nice and well located. Moreover they pay for the double taxation (when it occurs) and they offer help in moving their employee’s furniture when requested, paying for it. Their typical expatriate appointment last 2 years, according with GMR HRM manager. As seen so far their expatriate strategy is very poor and just offer little helps to their employees, leaving a high risk of failure and waste of money. 4.2 Proposed Plan GMR in order to increase their competitiveness should set a better strategy for its expatriates. First of all the pre-departure preparation should be compulsory for everyone who decides to apply for an expatriate experience and should comprehend the whole family (especially for language classes), because they shouldn’t take the risk that their employees arrive in the new country and they are not able to integrate in the new position. GMR services to their expatriates, such as find a house, take care of the VISA and pay for the possible double taxation, are a good starting point but it is not enough if they want to make sure their expatriate’s program will be more effective. The company should take care of their expatriates’ proprieties in their home country, they definitively have to be more connected with their employees’ partners, in order to find them a job in the new country that would fit their current position, or/and taking care about their hobbies and their children necessities (such as school and sports). Eventually they have to develop a better repatriation system with complete feedback interviews and placing them in the position they deserve in order to gain value from their experience. 5. CULTURE â€Å"The collective programming of the mind that distinguishes the member of one category of people from another† (Lewis, 2006, p. 17) 5.1 Organizational Culture â€Å"The culture of an organisation refers to the unique configuration of norms, values, beliefs, ways of behaving and so on that characterize the manner in which groups and individuals combine to get things done. The distinctiveness of a particular organisation is intimately bound up with. (Brown, 1998) It is always said that the knowledge sharing culture is part of good knowledge management initiative. It is said that effective collaboration and communication across a whole organisational structure spreads knowledge throughout. In order to change the current culture of the organisation the change needs to be initiated at individual level. Employees have a sphere of influence along with their own individual knowledge, and this is where he believes a knowledge sharing culture can begin. GMR as an Indian based company, headquartered in Bangalore with offices in different countries as well such as U.K, Turkey, Singapore and Dubai, have identified the need of bring the different cultures together. As this company has to hire multicultural staff as part of their induction programme, most of their staff goes to India, to learn GMR history, values and operations through education workshop and its annual performance reviews. Working for an Indian company, which has strong culture and values and beliefs, employees have to manage the transition from their experiences. GMR has employees from the multicultural regions. Whereas, it is an Indian family business organisation and they glue the bonds whether it is Singapore, Turkey or Dubai. They share their values to India and initially they engage with their employees for first 4-5 years of the company to give them awareness about the company whether they can live by them and able to promote them to other positions. That is how they bring multicultural nationalities under the GMR brand. Therefore, there is a lot of difference between the 2 cultures. There are a lot of differences and similarities between the companies in which people have seen few things before in their previous organisations or the things they haven’t seen before, in GMR. â€Å"Individuals will have to adjust for the organisation but organisations will not adjust for individuals.† As GMR is an entrepreneur company, it has a very high regard for social responsibility. It has a set of values and cultures that can be shared and they are not company confidential. 5.2 Shared knowledge Culture is a shared phenomenon that people develop over time in response to shared experiences, which engender agreed values and mode of behaviours and which foster a similar outlook on the world. Working patterns that encourage people to engage in closed co-ordination and communication, which encourage them to identify the same problem and share the certain solution, and goals will be conducive to the formation of sub culture. (Brown, 1998) In GMR has focused knowledge transference culture among their 500 employees on the multiple layers. Employees have ongoing dialogues with the CEO on the day-to-day basis and once in a month everyone comes over for a breakfast in order to promote feedback in two-way direction. The biggest challenge for GMR is that how they leverage the knowledge within the Indian organisation with international organisation and back and forth. As Indian organisation is very process orientated and has a lot of process put in place around knowledge sharing. It hasn’t gained that much attraction outside India as it could have. The company is still improving in the knowledge sharing aspect. The firm still need to put some enthusiasm in the knowledge sharing as knowledge sharing is not a common concept in UK, Turkey, Singapore and with the Bangalore colleagues and then back to the international locations. Whereas, people think it’s a burden instead of an opportunity. They need to change the mindset of the people that they can learn something by being a recipient of knowledge.