Diversity in the Workplace and the Future of HRM

How has the increased integration of the world economy through globalisation affected the practice of human resource management?

Globalisation refers to the interdependence and interconnectedness of people, countries, and organisations through exchanging resources, cultures, and skills (Brewster and Mayrhofer, 2019). Each element impacts the application of human resource management (HRM) in nuanced ways as they introduce more complexity to the working world (Rowley, Wei, and Warner, 2019). Integration of international markets can impact HRM practice:

1. Competition for talent increases. Organisations with a global reach collectively compete to retain and attract the best talent globally.
2. Cultural sensitivity and cultural differences worldwide require HRM professionals to consider cultural contexts.
3. Global mobility and effective staff management increase new challenges to relocation and expatriation.
4. Regulatory and legal compliance when operating in countries' labour laws may differ (Rowley, Wei, and Warner, 2019). Increased integration of global markets and coordinated workforces require HRM professionals to adopt a global policy, practice, and strategy perspective and consider multivariable approaches to people management worldwide (Brewster and Mayrhofer, 2019).

Explore and consider the differences between institutional and cultural approaches to understanding different national or regional ER/HR systems. Which do you find more persuasive?

An ‘institutional’ approach to employment relations (ER) and human resource (HR) systems at a multinational level is to consider the formal rules of a specific country or region. Formal rules are codified, written, and enforced through legislation or regulation by governments or organisations (Armstrong and Taylor, 2020). In ER/HR, such rules are intended to define the boundaries of appropriate behaviour and practices between employer and employee. For example: in the United Kingdom, the Equality Act 2010 identified characteristics protected from discrimination in the workplace and the recruitment process (The National Archives, 2023).

By contrast, a ‘cultural’ approach to ER/HR lends credence to informal rules of desirable behaviours and practices. Informal rules are a group or society's widely accepted norms, values, beliefs, and customs (Armstrong and Taylor, 2020). Employers and employees provide a common framework for understanding behaviour and practices. For example, in Japan, the ‘lifetime employment’ concept is prevalent within ER. It sets an expectation that employee loyalty to the employer is applauded, and employers should provide employees with long-term employment and development opportunities (OECD, 2019).

The ‘institutional’ and cultural approaches to ER/HR share similarities in that they are relatively persistent and slow to change. The former differs in that legal violation carries implications for an organisation. A breach of the latter carries consequences of social misunderstanding; however, this also can become a legal matter according to individual impact. Understanding the nuances of multinational ER/HR requires appreciation and synthesis of both approaches.