Introduction

Importance of HRM Practices to Business Strategies will be stated in this report, including the difference between Domestic and International HRM. Bröckermann (2016) has revealed that human resource management refers to the activities of attracting, selecting, developing and retaining employees within a company. MNCs are companies that execute businesses in other countries. MNCs face many problems while managing their human resource in the countries because they fail to identify the difference between managing human resources in local countries and internationally. In this report, the difference between managing human resource management locally and internationally has been stated. The effectiveness of HRM practices in the business strategy of companies has been evaluated, and the effectiveness of career management and career development practices has been evaluated.

You may also feel interested to read the below blogs:
Strategic Human Resource Management at Audley
Organizational Behaviour at MC Donald’s
Social Psychology at Organizations
How MNCs Enter New Markets

Difference between domestic HRM and international HRM:

Bratton and Gold (2017) revealed that domestic HRM refers to the way through which companies procure, allocate and utilize their human resource in the local country. Armstrong and Taylor (2020) have found in their research that IHRM is the process of applying a set of activities to target human resource management at the international level. Differences between domestic and IHRM are evaluated beneath:

Firstly, every country has a different type of political environment, and the political factors of host countries affect the HRM of MNCs in many ways. MNCs have to adjust to the political environment and make HR laws after considering the impact of the factors in IHRM (Chelladurai, and Kerwin, 2018). For instance, Canada keeps on updating their laws and regulations, and Vodafone has to change its HR policies and laws according to the new laws. Whilst, Sparrow Brewster and Chung (2016) showed that companies could adjust to the local country’s political environment easily because they are used to the environment that helps them to manage their HR easily in the process of domestic HRM. The stability of the UK political environment helps Vodafone to manage HR easily, and the company can manage HR with the HR policies without bringing any change in the policies.

Secondly, DeCenzo Robbins and Verhulst (2016) showed in their research that domestic HRM companies could set lower salaries of employees if the unemployment rate is high even companies set less salary without considering the tax rate and unemployment rate because breaking rule in the local country is easy. For instance, the unemployment rate in the UK is 3.8% and being a British company, Vodafone can give lower salaries to their workers because they get employees easily (National Statistics, 2019). Whilst, Sparrow Brewster and Chung (2016) revealed that breaking laws and regulations is tougher in the host country. MNCs have to set employees’ salaries on the basis of the tax rate and other factors of the host country in IHRM. For instance, the unemployment rate of the USA is 3.47%, but Vodafone cannot pay lower salaries to USA employees because the country will take steps against the company (Statista, 2020).

MNCs have to maintain the culture of the host country. In IHRM, MNCs have to make their policies on the basis of the culture of the host country. Otherwise, the employees of the host country will not be able to adjust to the culture (Marchington et al., 2016). For instance, Vodafone faces problems while directing employees in German because the employees speak in their own language. In that case, the company appoint an executive who understands the language of German and, gives direction to employees on the language and can inform the company about employees’ problems. Manda and Wood (2016) revealed that in domestic HRM, MNCs do not feel difficulties to adjust with the locals because the company’s culture is made on the basis of the culture of the local country, and employees talk in the local language. As a result, Vodafone can handle and communicate with the employees of the UK more efficiently than foreign employees. As a result, the company can ensure employee engagement and have better outcomes from UK business brings.

Defining HR Practices:

Brewster et al., (2016) argued that HR practices are a set of actions such as: attracting, developing, motivating and retaining employees, which ensures the efficient implementation of business strategy and makes sure the company will survive in the industry strongly. It seems that the actions taken by the HR department of organizations are HR practices. HR practices make sure that an organization will get employees who are compatible with the organization’s culture. It develops HR by identifying the needs of development that helps companies to implement their business strategy because employees’ skills and capabilities get enhanced through development and training programs. HR practices ensure that HRM motivates the employees as they need to get the best performance from employees of Vodafone and retain employees because retained employees become more experienced. By being more experienced, the employees can enhance the quality of Vodafone’s services, and it increases the demand and reputation of the company in the global telecommunication market.

Defining Business Strategy:

Scholes et al., (2014) have found in their research that business strategy refers to the set of competitive moves and actions that companies use to attract customers and compete strongly to attain their organizational goals or objectives. Companies make business strategies because they foster their business growth and ensure success. The business strategy gives a clear idea about the current position of a business, where it is going and how the business will go to its destination. It helps companies to reach the position where the business wants to reach. By developing a business strategy, Vodafone can understand its current situation and get a clear idea about internal factors such as customer satisfaction, financial performance, sales and marketing and others. By getting a clear idea about the internal factors, Vodafone can make efficient plans to move forward and achieve more customers globally. Vodafone has become capable of identifying its key steps and milestones to foster its business growth through developing its business strategy.

Effectiveness of HR practices on business strategy:

Brewster and Hegewisch (2017) have found in their strategy that HR has the tools, competencies and abilities to support an organization in implementing its business strategy. HR practices ensure the alignment of an organization’s values and vision by being a solid foundation for strategy. HR practices will help Vodafone to achieve its goals because it ensures that employees are working efficiently according to the business strategy of the company. The importance of HR practices to business strategy has been evaluated beneath:

Selection of the right employee helps companies to accomplish their vision: HRM ensures the selection of qualified employees who are compatible with the organizational structure, which helps companies to accomplish their vision easily (Stewart, and Brown, 2019). Vodafone’s HRM selects the right and qualified employees to meet their vision because qualified employees have the ability to learn things quickly. Qualified employees understand the work process of Vodafone after starting work, and they become able to fulfil the company’s vision of being leaders in the telecommunication industry by working actively (Notesmatic, 2019). Right, and qualified employees possess all the quality and character that helps Vodafone to be successful through utilizing the capabilities and talent of the employees. Vodafone’s HRM appoints the right employees who have different levels of expertise and working manner that encourages other employees to follow and bring great outcomes for the company. The great outcome helps to develop the services of Vodafone, and it makes them capable of being the best telecommunication service provider according to their vision.

Training and developing employees increase employees’ capability that helps to attract more customers: Wilton (2016) revealed that HRM arranges training and development for their employees after identifying their weaknesses to prevent them and increase their capability to attract new customers. Vodafone arranges training and development for their employees after considering the improvement area that helps them to attract new customers by ensuring the effective outcome of their work (Sovbetov, 2012). Employees become more skilled, and it helps them to focus on customers’ needs and work on fulfilling customers. The employees of Vodafone become able to provide more customer-focused service after enhancing their skills through training and development. They become capable of finding out the problems customer face by communicating with them effectively and taking steps to solve the problems. Therefore, customers get better telecommunication services from Vodafone, and it helps the company to retain their customers and create new ones because current customers will recommend others when they will get better services from the company. As a result, customers of Vodafone will increase enormously.

A safe, healthy and happy workplace enhances competitive advantage through increasing employee engagement: HR departments create a safe, healthy and happy environment for their employees that increases employee engagement and companies can enhance competitive advantage (Berman et al., 2019). Vodafone makes its employees happy by providing a happy and healthier work environment. Employees enjoy their work in the workplace which helps them to concentrate on their work. Employees of Vodafone take joy in their work and give their full effort on their work, and it increases employee engagement within their workplace (Khan, and Suhaib, 2019). Happy employees have a positive attitude that helps them to be successful in their work. In the healthier workplace of Vodafone, employees will feel less stressed, and they will become able to overcome their stress which also increases employee engagement. Increased employee engagement ensures that the services of Vodafone will have great quality, and the company will be able to compete strongly in the global telecommunication industry.

Open management style keeps employees highly motivated and makes vision accomplishment easier: Bailey et al., (2018) revealed that when companies share significant information with employees, such as company policies, contracts, sales, new clients, management objectives and others in open book management style. Vodafone’s HRM uses an open-book management style because it makes the employees more interested in their work (Kwenin, Muathe, and Nzulwa, 2013). It makes employees feel motivated because their company value them as their part and gives them importance. For instance, the mission of Vodafone is to enrich customers’ lives by delivering the unique power of mobile communication and sharing this mission with employees makes sure that employees become more responsible for fulfilling the mission (Mission Statement, 2020). Employees become more proactive and fulfil their duties efficiently and help Vodafone to fulfil the mission by being more responsible about their work. By aligning employees to accomplish the mission, Vodafone ensures that the employees are more dedicated to their work.

A fair evaluation system fosters’ the efficiency of employees’ performance, and companies can compete strongly: Jabbour and de Sousa Jabbour (2016) have researched that fair evaluation is the HR practice that fosters efficiency of employees’ performance because they get informed about their mistakes. Vodafone conducts a fair evaluation system to improve the quality of employees’ work and achieve their business goals easily (Kwenin, Muathe, and Nzulwa, 2013). HRM identifies the areas where the employees need to improve their work and gives them constructive feedback that helps employees to improve themselves. Vodafone may start self-rating in their evaluation process to empower their employees because they will feel powered when the company offers them the scope to rate themselves. Employees will be able to identify the mistakes they make and decide how they will improve their performance. HRM ensures that employees will improve their performance by giving constructive feedback, and it will make them capable of competing strongly in the telecommunication industry by providing the best services.

Highlight top performers will encourage all employees to give a better performance which will strengthen their competitive position: HRM finds out top performer of their company to appreciate and reward the top performer and encourage other employees to give their best and achieve the title in future that strengthens the competitive position of companies by improving services (Hecklau et al., 2016). Vodafone’s HRM finds out the top performer of the company and rewards them, which makes them happy and inspire them to maintain the quality of their work (Bat, and Yalcin, 2015). Other employees of the companies also become motivated after seeing the top performer receiving rewards from the company, and other employees also start to give their full effort to achieve the tile of a top performer. As a result, all employees of Vodafone work actively and efficiently, which increases the effectiveness of all operations and the competitive position of the company become stronger.

Cash bonus and other rewards inspire employees to give their best, and the revenue of the company increases: Banfield Kay and Royles (2018) have found in their research that giving rewards to employees inspire them to give their best that, and increases the revenue of the company by increasing quality of the business operations. Vodafone gives their employees a cash bonus, public appreciation, gift vouchers and other rewards to the employees who work hard for the company (Bat, and Yalcin, 2015). It inspires employees to give more concentration to work and invent new features in telecommunication services that fulfil customers’ core demands. As a result, customers purchase the services of Vodafone more, and it increases the revenue of the company.

Conclusion

Domestic HRM is the process of managing HR within the local country and IHRM is the process of managing HR in host countries. MNNs have to face different types of problems while managing employees internationally because the political environment, culture, laws and regulations of host countries are different from local countries. Therefore, MNCs have to be careful in maintaining their employees in host countries. HR practices help them to implement their business strategy by enhancing the capabilities of employees, enhancing the competitive advantage of the company and increasing revenue.

References

Armstrong, M. and Taylor, S., 2020. Armstrong’s handbook of human resource management practice. Kogan Page Publishers.

Brewster, C., Sparrow, P., Vernon, G. and Houldsworth, E., 2016. International human resource management. Kogan Page Publishers.

Kwenin, D.O., Muathe, S. and Nzulwa, R., 2013. The influence of employee rewards, human resource policies and job satisfaction on the retention of employees in Vodafone Ghana Limited. European Journal of Business and Management.

Manda, R. and Wood, B., 2016. Human resource management.