All companies and organizations are governed by their basic goals and objectives. These objectives are often regarded to as the “corporate vision” or “corporate philosophy” (Pynes, 2004). Thus, certain strategies are being implemented with the aim of achieving these goals and objectives, and this constitutes a key element in the characterization of a company or organization. Personnel are undoubtedly an important indicator in determining the characteristics of a company or organization.
It is a well known fact that human resources play a crucial role towards differentiation and a potent source of competitiveness for any organization or company. Therefore, any organization must constantly invest in human resource development even during periods of recession. However, the determination of the extent to which an organization can invest in terms of human resources development depends on the financial capabilities of the company or organization (Mathis, 2006).
Finances will also be carefully considered in determining the target for training and development, because it should jive with the basic policies of an organization’s human resource development strategy. Human resources development in most organizations and companies in the past decade has gradually transformed from low-level activities into high-profile contributors to organizational success. However, budgets are also elevating at a faster rate than the gross national product.
In the midst of this growth and increased influence, managers and executives of companies and organizations are left with confusing question: To what extent should be invested in human resources development? Definitely the answer won’t be easy, especially because the actual levels of expenditures needed is often an elusive figure, depending on the financial capabilities of the organization. However, there are basic strategies to could help organizations determine the extent of investment in human resources development.
The BMW of the past is just like any typical traditional automobile company– focusing on tangibles such as products and place, while ignoring the intangibles such as customer care and service. While this traditional business approach had once its days in the sun, BMW quickly realized that the whole automobile industry is changing as globalization of human resource management (HRM) peeks to everyone’s doorsteps. Truly, success breeds failure because companies such as BMW started to see that the older methods will not work anymore. Drops in profits are becoming obvious and markets have to do something about it.
There are basically many factors to consider as mentioned above. The goal of HRM for BMW is to restructure and improve their markets, include fresh and excellent products and prioritizing the industry. The industry’s fast emerging places and primary regions identified and highlighted the necessity to extend such economic growth in the internal areas. This is combined into the cultural aspect that conditions economic mechanics of territory having an impact on the activities of the company, the relational system and excellent ideas as well as the development procedure.
BMW’s International HRM Strategies
Let Others Do It This strategy of BMW involves letting other organizations provide the necessary training and waiting for the right time to recruit the high valued employees from those organizations (Fitz-enz, 2001). While it may be true that BMW offers large salaries for capable, high-value employees, they in turn prevent the possibility of having a significant internal investment in terms of human resource development. Smaller firms and organizations who struggle to operate efficiently pursue this strategy as a cost-effective approach towards human resource development.
The most appealing advantage of this strategy for BMW is that it provides an excellent alternative for their organization that cannot afford serious human resource development initiatives. Thus, costs are reduced as BMW is saved from spending too much in the development and implementation of a variety of human resource development programs. However, serious concerns in this type of strategy have also started to emerge, especially since the character of organizations snatching the high valued employees of other organizations often draws heavy criticism. Investing Properly
This strategy of BMW involves investing only in necessary job-related skills. With this strategy, minimal resources are spent by the organization towards the preparation of their employees for future jobs or in the development of their skills (Briscoe, 2004). The striking advantage of this strategy is that it utilizes minimal financial resources. The strategy also has a high level of efficiency, especially since the training is provided only when it is necessary, and only those people who need the training are determined. Another important advantage is that this process enables BMW to adapt to the changing needs of the personnel.
If efficiency and low costs are needed, this strategy is the most practical for organizations and companies to pursue. As a disadvantage, however, this strategy provides the employees of BMW with very minimal opportunities to become versatile on their jobs. This strategy might also be neglecting the preparations for future job opportunities. Also, this strategy may be a hindrance towards the growth and innovation of an organization and its human resources, since it does not concrete plans regarding the preparation of their employees towards seeking new approaches.
This strategy also involves the use of the appropriate investments in human resource development. As a world class organization, BMW pursues this strategy and avoids releasing astronomical amounts of resources on human resource activities in order to meet the needs of their personnel (Mendenhall, 2006). There are several factors which contribute to an organization’s overspending on human resource development. But the most prominent factor is the organization’s desire to develop a pool of high-valued employees in a variety of approaches solutions and activities.
Another factor is the continued expansion and growth of the human resources of rival organizations and companies. This situation all the more puts so much pressure on smaller organizations to strengthen their human resources to ensure efficient operations. The third factor is the sudden emergence of unconventional human resource development options. Due to the innovations in modern technology, organizations suddenly became capable of implementing unconventional options for making their pool of human resources more effective and efficient (Losey, 2005).
The emergence of this type of strategy brings in a critical question: Could an organization invest too much on efforts to develop the skills and knowledge of its employees? In the advent of changes in the working environments nowadays, the need new skills and knowledge becomes imperative for continued growth and development. Therefore, there is a possibility that an organization may invest more than what is necessary. However, when employees spend too much time in training, the costs increase while at the same time depriving them of other important activities they have to accomplish. Also read Strategic Role of Human Resource Management essay
The proponents of this strategy single out the relationship between the employees’ desire to learn and job satisfaction, which are determining factors for their decision to stay with the organization. These employees rely on the possibility that excellent job opportunities might reduce turnover. However, for organizations having difficulty searching for an innovative leader, additional training can lead to new ideas, techniques and methods which can lead into improved operations of the organization.
Also, since there are unpredictable changes that happen once in a while, it is impossible to foresee the skills needed in the future. However, what is evident is the fact that employees need to be exposed to opportunities for growth and development. As a disadvantage, this strategy will definitely generate excessive costs because it represents an inefficient approach to delivery. All types of activities and programs may be developed, but they are not necessarily based on business needs, but rather on employee preferences.
Investing too much on human resource development activities may eventually lead to higher turnover. This is because employees sometimes have the tendency to develop skills for future opportunities on their own ways, and this could create false expectations.
There Is an Acceptable Return on Investment This strategy of BMW is actually very simple in nature, but needs the firm commitment of an organization in order to be implemented. This involves investing on human resource development efforts for as long as there is a return on investment (ROI) in terms of organizational outputs.
This strategy requires determining the payoff of employee efforts for a few selected outputs, but evaluating every aspect at some level. In the programs chosen for ROI analysis, the outputs are translated into monetary values and are then compared to the actual costs (investment) to calculate the ROI. Therefore, the level of investment will be increased whenever the return is positive (Berman, 2005). While it may be true that determining the ROI value is challenging, the rewarding part is that it is already being implemented by a number of growing organizations.
These organizations perceive ROI as the best way to evaluate the extent of human resource development investments. According to them, matching the investment with the return is the economic approach towards an effective human resource development scheme. Most managers of organizations and companies agree to the impending need to review human resource development expenditures with a more economic-oriented scrutiny. When compared with other evaluation measures, ROI is able to give a sound perspective in determining the payoff of training.
The ROI process actually develops a tabulation of six types of data: reaction to the program, learning, application, impact, return on investment and intangible benefits. These types of data reflect the effectiveness and efficiency of the human resource development efforts of an organization, and the means for its improvement. This approach also provides a strong link between the organizational needs and employee performance of BMW. This is because the ROI process is based on the perspective of beginning with the end in mind.
This involves the utilization of predefined organizational measures to determine the success of human resource development programs (Pell, 2001). The data that will be obtained from this process will represent the critical information needed to secure the continued support for human resource development programs, particularly with managers of small scale organizations. When managers get convinced that human resource development programs are improving their organizational operations and helping them reach critical goals, they will readily support these efforts.
This strategy also involves BMW investing together with other organizations no matter what. With the continued patronization of benchmarking, this strategy would no doubt become very attractive through time. However, the challenging part in this approach is the fact that the company has to find the correctly benchmarked data. Only after finding these data can the company start taking the necessary steps to make sure that they are considered best practices. When in the process of utilizing this strategy, the relevant data and its interpretation becomes a crucial issue (Armstrong, 2006).
Fortunately, just like most benchmarking projects, a number of alternative measures are readily available. Probably the most common among the available measurements is the investment as a percentage of a company’s payroll. For instance, the United States companies have an average of about 1. 2 percent, while other excellent companies spend about 3 percent to 5 percent. These relevant data may have different ranges depending on the definition of actual investments. The disadvantage, however, is that there would possibly be no agreement in terms of what costs should be involved.
Some other alternative measures include direct and indirect costs, and direct, out-of-pocket expenses. The actual investment per employee can also be different. The most common measure is the direct cost of learning divided by the number of employees and averages from $1,000 to $1,200. Other measures involve focusing on expenditures as a percentage of revenue or expenses in operations. The primary advantage of this strategy for BMW is earning the benefits of the best practices in terms of benchmarking. Also, relevant data becomes readily available.
If the benchmarks are able to represent excellent practices, the data will undoubtedly reflect what most companies want to achieve. Also, benchmarking has started to become an approach that appeals to a majority of corporate managers who are very eager to make comparisons of their investments with others whom they admire and respect. However, there are several issues that may cause concerns with this strategy. What one company invests may not necessarily be what another company needs. Each company is different in terms of its employees, systems, philosophy and markets (Perkins, 2006).
Because of this, companies may need either a larger or smaller investment as against a best-practice firm. Also, benchmarking in terms of a medium-level investment may sometimes lead to unsatisfactory results. This would force the company to implement programs in order to meet the minimum requirements. This situation most commonly occurs when there is a specific number of hour or days allotted to formal learning programs. BMW and Training of Human Resources Training of employees at BMW is an initiative to enhance worker performance on a presently occupied job or one connected to it.
This normally will result to developments in particular learning, capabilities, perspectives, or behaviors. These developments can lead to long-term efficiency. Nevertheless, it most of the time is the situation that organizations only implement training for fresh recruits. Most people realize that training is just a manner of introducing to the fresh recruits the culture of the company. It is also a chance to share with them the valuable knowledge that senior management obtained that supported them in improving the development of the organization.
Based on the study of Mathis (2004), the quality of the workers is identified by their improvement through training and learning capabilities. As a result, quality workers are elements in establishing the long-term sustainability and progress of the organization. It is well known that the intense recruitment procedures of most organizations are manners of guaranteeing that they will only be recruiting the cream of the crop. Nevertheless, this is not sufficient to mention that the workers they recruit will be giving their best outputs.
It might be realistic that they can view promise in those workers and that is the reason why they recruited them. However, these promising capabilities cannot be put under test unless they are made to jive with the organization’s philosophies. This is the basic reason why training must be done. Training of workers would mean providing the workers the fundamental information that they will need to be able to become successful in their respective occupations. Aside from this, worker training will also improve the internal skills and capabilities of the workers.
Improvement needs to be managed with consistent improvement of the workers’ skills through training to be able to cope up with the development in the company’s goals. Based on the research of Noe (2004), training is being utilized to guide education. Aside from this, training is also viewed as a mechanism to retain workers, enhance company environment and establish incentive policies for workers. Trainings are also being implemented in order for BMW to be able to establish a group of workers that can easily and completely replace those employees who had left the organization.
Because of the immediate modernization, workers need to be consistently and/or regularly trained to be able to adjust to the changes that will have an impact to the organization. Training also becomes a driving force to a group by enabling them to become more effective. If an organization is able to train and enhance excellent workers then they will be able to supply the available job vacancies essential for growth and development. Since training can establish effective workers and provide areas for growth and development at BMW, this implies that training can also lead to lesser worker turnover levels.
Based on the survey done by Sims (1990), great turnover levels led to almost 40 percent decline in profits and stock prices in most economies. This implies that most organizations are losing significant money in making efforts to hire new workers to fill in their vacancies. So if training can lower down the turnover levels, it implies that organizations will also be able to lower down expenses of their daily functions. The outcomes of training and growth lead to a chain reaction. When BMW is able to establish efficient workers then their earnings will improve as well.
When this occurs, they will also be able to provide sufficient salaries for their workers based on their efforts and initiatives to the organization’s development. As a result, it will establish a feeling of gratification that will inspire them to become even better and then the reaction will happen on and on. This implies that training inspires workers (Phillips, 1997). Training inspires workers by giving them opportunities for growth and development. Through training, they possess capabilities and information that will support them in enhancing their outputs.
Based on the internal inspiration concept, the feeling of independence inspires workers to keep on working hard. Aside from this, independent workers at BMW mention that they have happiness in their jobs and they possess great desires in their jobs as well. Statt (2000) mentioned that individuals are inspired when they sense that they create an impact to their setting. This implies that workers will be inspired if they know and sense that they are excellent in their jobs. In other words, in order for workers to become competitive in their jobs, they must be immersed to consistent training to improve their talents and capabilities.
As a result, when workers are able to show impressive performances, employers must make sure that they are given their well-deserved praises and incentives. This is to inform workers that their perseverance and excellence in their jobs are being appreciated. Because of this, it can be mentioned that the application of an effective incentives mechanism is a consequence of efficient worker training. Salary is an essential worry of BMW. Aside from this, Wilson (2005) mentioned that salary is explicitly connected with company outputs.
This implies that salary or incentive mechanisms also serve as inspiration for workers. Individuals strive due to the fact that they desire career developments that would enable them to exploit their skills as person and members of a group. Individuals desire to improve and this inspires them to enhance themselves in the company. Nevertheless, it is also well-known that individuals strive due to the fact that they need financial earnings, which is one of the primary reasons why individuals strive for the best.
Therefore, if organizations have incentive mechanisms, including financial rewards, workers will have goals to aim to for as long they keep on working hard. This implies that financial advantages or incentives can influence workers to strive even more and be excellent in their jobs. Nevertheless, money does not provide the solutions to the demands of workers all the time. Employers must realize that their workers are people who possess ambitions and wishes that they desire to achieve. This implies that there needs to be a balance between the forms of incentives the organizations give their workers.
It is important that the entire need of an individual for development be emphasized upon the establishment and application of essential endeavors which include as training, inspiring and giving incentives. BMW and Diversity Management Cultural diversity in the workforce is a typical dilemma of BMW. Many research studies specifically put into the spotlight the correlation between ethnicity and customs to this issue. However, cultural diversity in the workforce may also be identified through misinterpretations in occupation, sexual orientation, or place of birth (Sonnenschein, 1999).
These diversity elements in the composition of the workforce transform the issue as a unique and famous among experts. In many situations, this work problem is already branded as a normal phenomenon which has to be managed; if not, this problem can cause differences among the members of the workforce and could result to failure for the firms concerned. The most typical bad consequence resulting from cultural workforce diversity in BMW is the emergence of quarreling and bickering among them. According to Thomas (1999), quarreling and bickering scenarios are the most typical forms of misunderstandings that can be seen in companies and firms.
Quarreling can be seen among workers in various job positions while bickering can be seen among workers of the same job positions. Aside from determining the nature of cultural workforce diversity, past studies had also investigated on ways where diversity can wreak havoc or become advantageous to companies and firms; manners on how diversity in the workforce can be handled is also rampant. Chemers (1995) stated that the special cultural alterations in the company can be a helpful mechanism in handling cultural workforce diversity.
Because of the varied races and ethnicity as well as the organized alterations in the company environment, the capabilities of every worker can be improved, diversity problems can be determined and managed, support can be given by leaders and workers will be persuaded to voice out their opinions and suggestions. According to Chemers (1995), the handling of cultural workforce diversity must include the investigation of the company environment, determination of company attitude aspects, identification of these attitudes’ impact on diversity handling and the changing of these attitudes in order to handle cultural workforce diversity.
There are various researches that had proven the implementation of cultural environment alterations in handling workforce diversity. In BMW, the cultural environment alterations normally involve four stages. These stages involve the establishment of the altering initiative, creation of the bases for alterations, application of the established alterations and the assessment of the impacts of the alterations (Cox, 1997). In the primary stage, the objective of applying alterations in the company environment is identified; this involves the determination of the influenced elements, advantages and potential problems involved in the alterations.
Teaching the company people regarding the significance for improving cultural diversity perspectives and goals is achieved on the second stage. The third stage is concerned on the establishment and application of the main strategies to be utilized for starting the alterations. Lastly, the alteration procedures and its impact to the company will be reviewed consistently (Cox, 1997). In accordance to what was proven by other studies, implementing this mechanism of handling cultural workforce diversity is a very hard and time-consuming process.
Aside from this, as the company’s environment elicits effects on the perspectives, attitudes and functions of the organization, altering it involves the changing of various elements of the company; this implies the need for intensive planning, application and adaptations as important elements in order for this plan to be applicable. According to Gentile (1998), the utilization of a mechanism that initiates change can also be an excellent way of handling cultural workforce diversity.
This mechanism is specifically helpful for leaders in the application of a hiring and evaluation process that can be suitable for a varied working environment. This mechanism is normally composed of 5 stages. In the first stage, the leader must possess a deep comprehension of the existing people as well as the present human resources that are under contract in the company. The second stage takes into consideration that the leader must have the capability to understand the functional goals of the company including its human resource needs.
In the third stage, the short and long term objectives of the organization have to be identified in order to enhance a more enthusiastic workforce. The fourth stage includes the delegation of roles, identification of time limits including evaluation timetable. The last stage is the assessment of the entire procedure being implemented by the HRD. The model means that with the exception of main executives, workforce leaders also have major responsibilities in the handling of diversity problems in the workforce. Another probable way that BMW uses in handling cultural workforce diversity is through the use of effective management.
In accordance to what has been proven a while ago, Crosby (2003) stated that the traditional managerial procedure seen in majority of companies is affected by male and female responsibilities and perceptions, where American men are normally perceived as candidates for managers. While such managerial process has been helpful in inspiring workers to do their best, a dissimilar managerial style must be implemented in order to handle workforce diversity. A sympathetic or people-oriented managerial style is believed to be the most appropriate style for managing extremely diverse workforces.
In the most common perspective, being sympathetic and people-oriented wound mean being well-liked by everybody, energetic, joyful and fun to be with. Diversity managers at BMW must then acquire these important traits in order to handle cultural workforce diversity. Specifically, Crosby (2003) mentioned that diversity managers are people who must be a positive thinker, approachable and kind. Aside from these, they must assume the roles of advisers, motivators and the bridge to interaction to their colleagues. Through this managerial style, a varied but happy workforce can be created.
In addition, company managers have more to say with their colleagues, which reduce the borders being seen regarding occupations. Gentile (1998) mentioned that free interaction is also an essential factor that will help in managing cultural workforce diversity. In order to introduce communication between the people of a varied workforce, interaction media such as teaching and management programs must be made available. Teaching activities are most often indicated as a long-term solution for achieving fairness in a varied working environment, while frequent exposure to goal-oriented data exhibits this similar element in a short time.
This, at least, guarantees that different organizations are able to acquire the same data in the work environment. This technique is molded towards the establishment of varied work environments, taking into consideration the benefits that various individuals can give to an activity. This also takes into consideration the essence of personal teaching for workers to adjust to various races and ethnicities. These seem to verify more efficient in closing the borders and widening interaction in a varied human resources, in contrast to the first two opinions.
Even though teaching and management is important as protection against the discrimination of some races from company interaction due to differences, these initiatives are locked to the leaders. Each worker must have the capability to understand cultural diversity, and to believe that it is a chance to widen fresh aspects for the company. Aside from open interaction and teaching, the changes in company programs and processes are also believed to be other manners of handling cultural diversity in the workforce.
According to Gentile (1998), fairness within the workforce should be the primary priority of program initiatives for handling cultural diversity. Conclusion The outputs of the investigation done on the HRM and organizational behavior of BMW revealed very essential impacts, even in the presence of uncertainty. Therefore, it is logical to generalize that the HRM and organizational behavior of the company could still be expected to improve faster than average. The investigation of the company’s HRM and organizational behavior unveiled very few inconsistencies concerning the company’s overall goals and philosophy.
This is connected with their usual internal-external method. Nevertheless, the necessity to mend both the internal-external and external-internal methods becomes necessary now for BMW. The investigation among the company environment as well as the HRM organizational behavior of BMW revealed various differences, most of which are connected towards the company setting. Nevertheless, these differences established the path towards identifying a number of suggested tactical choices to guarantee the competitiveness of BMW.
In addition, the company needs to search for equilibrium between commitment to inner forces within the management and to the developing elements of the setting in order to apply such tactical choices. REFERENCES Armstrong, M, 2006. A Handbook of Human Resource Management Practice. Kogan Page; 10th edition Berman, E, 2005. Human Resource Management in Public Service: Paradoxes, Processes, and Problems. Sage Publications, Inc; Second edition Briscoe, D, 2004. International Human Resource Management. Routledge; 2nd edition Chemers, M, 1995. Diversity in Organizations: New Perspectives for a Changing Workplace.
Sage Publications, Inc Cox, T, 1997. Developing Competency to Manage Diversity: Readings, Cases & Activities. Berrett-Koehler Publishers; 1st edition Crosby, F, 2003. The Psychology and Management of Workplace Diversity. Blackwell Publishing Limited Fitz-enz, J, 2001. How to Measure Human Resource Management. McGraw-Hill; 3rd edition Gentile, M, 1998. Managerial Excellence Through Diversity: Text & Cases. Waveland Press; Reprint edition Losey, M, 2005. The Future of Human Resource Management: 64 Thought Leaders Explore the Critical HR Issues of Today and Tomorrow. Wiley; 1st edition Mathis, R, 2006.
Advantage Books: Human Resource Management: Essential Perspectives. South-Western College Pub; 4th edition Mathis, R, 2004. Human Resource Management. South-Western College Pub; 10th edition Mendenhall, M, 2006. Reading and Cases in International Human Resource Management. Routledge; 4th edition Noe, R, 2004. Employee Training and Development with Powerweb Card 3/e. McGraw-Hill/Irwin; 3rd edition Pell, A, 2001. The Complete Idiot’s Guide(r) to Human Resource Management. Alpha; 1st edition Perkins, S, 2006. Strategic International Human Resource Management: Choices and Consequences in Multinational People Management.
Kogan Page; 2nd edition Phillips, J, 1997. Handbook of Training Evaluation and Measurement Methods. Gulf Professional Publishing; 3rd edition Pinnington, A, 2007. Human Resource Management: Ethics and Employment. Oxford University Press, USA Pynes, J, 2004. Human Resources Management for Public and Nonprofit Organizations. Jossey-Bass; 2nd edition Sims, R, 1990. An Experiential Learning Approach to Employee Training Systems. Quorum Books Sonnenschein, W, 1999. The Diversity Toolkit: How You Can Build and Benefit from a Diverse Workforce. McGraw-Hill; 1st edition
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