The Business Forum

"It is impossible for ideas to compete in the marketplace if no forum for
  their presentation is provided or available."           Thomas Mann, 1896


International Human Resource Management  

Sponsored By: Polak International Consultants Inc.  

 

The Business Forum organized a Luncheon
discussion with Polak International Consultants
Inc. providing experts on the above subject at  the
Los Angeles Marriott Hotel in Los Angeles.


Those accepting our invitation included:

BAE Systems Inc. - Vice President of Human Resources * Nestle USA Inc. – Manager International HR * Nestle USA Inc. – Manager International Tax HR Assistance * Nestle (USA) Corporation - Manager HR Services * Sony Pictures Entertainment Inc. - Director International Human Resources * Sony Pictures Entertainment Inc. – Data Analyst * Sony Pictures Entertainment Inc. – International HR Coordinator * Syncor International Corporation - Director of Human Resources * The Boeing Company - Member of Technical Staff  * Union Bank of California - Vice President of Human Resources * Union Bank of California - Assistant Vice President * University of Southern California - Human Resources Director * Wall Street Journal  (Dow Jones & Co.) - Western Region Recruitment Manager

For the benefit of those of our members and supporters who could not attend the meeting we present the following white paper, with contacts.


International Human Resource Management

By Richard Polak

Polak International Consultants Inc.

It is difficult to put a jigsaw puzzle together without the picture to work from.  In the same way, the traditional international human resources paradigm of "piece by piece" management without a clear picture of the objective is inefficient and costly and therefore, as many Human Resources professionals have come to realize, can be considered to be obsolete.  

International human resources is a complex paradigm -- like a puzzle where all the pieces are intertwined and all placement of the piece in hand decisions impact the total picture.  However, in many organizations international human resources managers are forced to spend most of their time "fighting fires” kindled by the magnitude of issues arising from international growth and expansion, rather than being given the time to concentrate on the greater, and far more important strategic management issues, which could well avert future fires from breaking out at all.  Furthermore, the "solution" that puts out one fire can easily become the fuel for the next fire to be ignited, leaving few resources and little energy to take the considered global view necessary for IHR to be a strategic partner to the business as a whole. 

After many years of assisting organizations large and small to deal with this paradox, and from that experience, we have developed a concept which to date has been able to provide the means for companies to establish an IHR strategy that clearly aligns IHR with the business values, philosophy and goals.  When the IHR strategy "twins" the business strategy, it steers IHR decisions and the fires go out.  If Corporate and local management alike are willing accept it as the benchmark for all IHR design and delivery systems, it can change the HR Directors life from "managing to manage" to "managing by design".  The IHR strategy will provide management with a consistent methodology to evaluate each situation and make decisions in keeping with the company’s values and demographics as well as guide all expenditure choices.   Most importantly, a distinctive strategy enables IHR to be a true strategic business partner contributing to organizational growth and profitability.  

The  "Four C's" of IHR

An IHR strategy addresses the "four C’s":  how the company will compete for employees, how employees will be compensated, how corporate culture will be defined and broadcast and of course, the cost side of the equation of managing expenses and liabilities and harnessing global synergies for cost savings.  An IHR strategy recognizes the interrelationships between the "four C's" and becomes the management tool which defines IHR processes and sets standards for productivity and success

The process that we have been able to develop supports growth and expansion by ensuring start-up activities at new international locations aligns with the IHR strategy for the implementation of company-wide policies and culture and the development of country-specific HR policies.  All new compensation and benefits programs are designed to align with the IHR strategy thus avoiding inconsistencies that fuel other fires. On-going IHR operations also become more effective because programs are redesigned to contain cost and maintain competitive pressure.  IHR operations are managed according to the IHR strategy and global view.

Achieving the Desired Results

All effective, efficient and economically founded management processes begin by ensuring there is a clear picture of the objectives before the individual pieces of the puzzle are addressed. Defining the picture is accomplished through the Assessment and Development phases. 

During Assessment the goal must be to sketch the current picture of business operations and IHR.  The assessment therefore looks at:

§         Company's objectives and goals,

§         Current policies, practices, processes and structures, 

§         Benefit plans and compensation programs, and

§         Cost elements.

This information is then summarized and reported to management to gain consensus on the issues and the current status.  After everyone has an appreciation of the environment the organization presently enjoys, the next phase, Development, can begin.  

During Development the desire picture is delineated through a distinctive IHR strategy perfected specifically for the company's needs, plans and objectives. 

From the IHR strategy that is established by the organizations management, a blueprint can be developed for building the desired picture by designing global programs and harmonizing and aligning current policies, plans, and programs in each country to the IHR strategy.  Prior to moving to the next phase, Implementation, the proposed IHR strategy and blueprint are presented to all levels of management for their approval and commitment to action.

The Implementation phase involves the revamping of IHR policies, programs and plans to fit into the desired picture.  The supporting blueprint is followed closely to ensure all the pieces fit into the puzzle and paint the desired picture.  Of course, the first step of the Implementation phase must be communicating the IHR strategy and supporting processes to employees and all levels of management on a global basis.  Next, the global synergy goals of the IHR strategy are promoted through establishment of the global policies and programs. These programs include but are not limited to multinational pooling, international retirement programs, global medical plans and universal pension funding.  

Finally, the important but arduous task of aligning policies, benefits and compensation programs within each country to the IHR strategy is undertaken.

Ensuring the Pieces Continue to Fit

To maintain a clear picture of the completed IHR puzzle, the strategy must be continuously adjusted and refocused.  Therefore, the final phase, Maintenance, never ends.  There are ongoing, periodic and annual IHR processes that must be continuously managed according to the IHR strategy.  As well, policies, plans and processes must be revised as necessary for legal compliance, competitiveness and changes in business plans or goals.  

Management must be kept informed through updates and status reports on any information key to the success of the IHR strategy.  In addition, a worldwide audit of IHR programs and plans should be conducted at least every three years as a matter of course.  While guidelines and an approval process help management navigate through obvious change, subtle changes within the company, local market practice, legislation, and employee demographics can erode programs’ effectiveness over time.  Multinational pools are particularly subject to degrading without continuous corporate sponsorship and should also be re-evaluated periodically.  

Companies using this system that we have developed will budget time and expense each year for auditing and re-aligning their IHR programs as an integral part of the plan itself.  This has proved to be the most cost effective approach to continuous acceptance of IHR as a true strategic business partner.

Summary

Each phase of the process is equally important and the basic elements are always included into the plan - to miss one is to threaten the complete program.  The uniqueness of each company is addressed by the inclusion of any auxiliary elements within a phase that are retracted or expanded as necessary to meet the needs of each specific company.

To be successful a Comprehensive IHR Management must have an IHR strategy that is clearly articulated, committed to paper and continuously refocuses to match the IHR goals and objectives with the business.  Unless, the entire organization views the same picture, conjecture and opinion will rekindle fires.  To remain competitive in the global marketplace and to optimize the international human resources to be most productive, multinational companies must maintain a "global view" and keeping the pieces of the IHR puzzle fitting snuggly together into the picture defined by their IHR strategy.


Polak International Consultants, Inc. specializes in international human resources consulting.  The entire staff has experience in HR issues that multinationals must address outside of the US – benefits, compensation, legal, actuarial, intercultural, etc.   This "process" as described above is the result of decades of experience, drawn from a multi-discipline team actually in the field gaining hands-on experience.


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