In the face of globalization, business companies no longer operate in isolation. There are many business organizations that presently operate globally. Consequently, the HRM (human resource managers) should ensure that their business strives to meet most, if not all, the standardized global human resource policies and procedures (Gitman, & McDaniel, 1993). This will ensure that these business organizations realize their goals and objectives to the highest level possible. This paper examines the compensation issues of workers in Canada and compares it with that of the USA. The paper also examines seek to examine the pressing issues that global human resource executives face in the face of globalization of business activities, as well as, the approaches, which can be used in addressing these challenges at different levels. These challenges include the extent or degree of standardization of human resources globally. There are also recommendations on how human resource management executives can strategically handle this issue so as to ensure the maximum realization of the set objectives of their business objectives.
There exist distinct differences, as well as, similarities in terms of existing compensation between various business organizations in Canada and other countries. One of such countries is the USA. The first difference is in terms of severance policies or plans. In Canada, severance policies are not general. The main reason for this situation is there is a set floor, but not a ceiling when it comes to severance. This is because, they cannot override rights to statutory, in any way, or even reasonable practice. Moreover, in a case where the collective bargain is absent, notice and severance entitlements are usually determined based on an individual’s basis and are not, in any way, affected by severance compensation made to other previous employees of an organization. Because of this, there is a small purpose, if not no reason at all, for a standardizing document such as a severance policy. On the contrary, severance policies are more general in the United States of America. In the United States of America, companies in most cases espouse written severance policies. Most of these policies demand that the employee who is severed executes a discharge of a claim as a precondition to receiving payment. Still for the USA, the employer may be at liberty to amend the policies from time to time as opposed to the case of Canada.
Another difference comes in the form of employment litigation. For example, in Canada, employment litigation tends to end up in some knowable or predictable damage awards, and at the same time, the compensation is settled fast and with a lot of ease (Card, & Freeman, 1993). However, in the USA, employment litigation taken against an employer seems to be taken as a claim against the very human rights of the workers, therefore, the employers feel much obliged to defend themselves against these claims through the legal process (Card, & Freeman, 1993). Often, this litigation generates big and unpredictable damages awards to the victims. This makes the litigation more expensive and difficult to handle in the United States as compared to Canada.
There is also a similarity between compensation in the United States and Canada. This is in terms of the decentralization of the setting up of general rules regarding the compensation of workers in the two countries. In Canada, the issue of compensation remains exclusively a provincial responsibility; therefore the rules of remuneration vary from one area to the next one. This variation can be further illustrated by the fact that, in provinces like Ontario, the workplace safety and compensation programs are such that they also have some security measures for workers while they are at work. Still in the USA, the worker’s compensation is administered on a distinct state-by-state basis (Card & Freeman, 1993). Here each state’s governing board is in charge of various forms of compensation that is given to various different beneficiaries.
The issue of how to cope with the effects of globalization is very vital for various business organizations across the world, especially in the USA where there are very big international business organizations. However, the many players in these organizations, that is the human resource managers still in most cases, yet to fully come into terms with this reality. These international human resource executives have been constantly facing the problem of international coordination, as well as, the issue of aligning the Human Resource policies, and procedures to given business goals and objectives(Gitman, &McDaniel, 1983). One major challenge came in the form of having relevant and good knowledge about the extent and limitations to which these human policies and procedures can be standardized as much as possible across the world (Gitman and McDaniel 1983). Although there may be some far-reaching global policies and procedures can be used to both coordinate and align HR and the business all over the world, the executions of these strategies at the local level are normally different due to different environmental factors(Dessler, 2000). Just mere knowledge of local market policies and other areas of its understanding is not enough. It leaves very wide gaps because most of the activities that take place in businesses organizations today have direct relationships with factors that influence business activities all over the world.
One of the main challenges that are brought about by the globalization of world business is the operational functions of human resource management. For instance, the main micro challenge includes the choice of suitable personnel, concern about staffing issues, provision of cross-cultural training and growth, attractive salaries, performance appraisal, and growth (Dessler, 2000). These choices are very vital given the whole complexity of international trade that influences nearly all businesses today. Besides, there is the realization that stable family members who accompany an expatriate in the host nation are instrumental concerning the expatriate’s success (Gitman &McDaniel, 1983). Hence, there is a strong need for global human resource personnel to focus very much on the general well-being of the expatriate in a bid to ensure the greatest success as they engage in their out-of-the-country assignments. In fact, many studies have very clearly shown that various programs that use cultural strategies including integrating different knowledge concerning different cultures, cross-cultural training and sensitivity development, as well behavior change programs tend to enhance the expatriate performance overseas to a very large extent. This will provide a very challenging scenario to the HR team as they strive for the best deal for maximum growth and development of their organization.
This issue extends further in the desire by businesses to manage the expatriate in a rather holistic manner, which comes at a high cost to the given organizations. Although there are no provided reliable, as well as strong data on the actual expenditures that involve expatriation and repatriation, estimates ranging between $1000 and 12000 are reported in various business articles for a pre-departure trip for the expatriate workforce (Dessler, 2000). Besides the provision of attractive compensation, there is still another important need to provide good relocation costs, as well as allowances. The financial plan for cross-cultural training of these individuals’ training and development, together with foreign business conducts and language training, may also include those for family members (Dessler, 2000). Therefore, the global human resource executives should be alert to the demands of the parent business, its subsidiaries, as well as individual skilled individuals. Conversely, there must be a very careful look at the objectives of the business while trying to meet the needs of this expatriate who are very important in the global business.
There are several ways that various business organizations, through the guidance of their human resource managers, can help tackle the problems that come with the globalization of world businesses. In the wake of globalization, the vital role of HR as a planned business partner has gained much recognition (Gitman, & MacDonald, 1983). Through this partnership, the human resource gives valuable and essential services to any given business organization. This is realized in various forms such as management of talent, development of skills and competencies, nurturing of leadership skills in the business, spearheading change management, as well as knowledge management (Dessler, 2000). Human resource managers also need to ensure that every single human resource policy or strategy contributes, as much as possible, to the corporate values of given business values. This is because the roles of human resources keep on developing daily hence the need to constantly harmonize them with the goals of the business for a successful realization of business goals. For these managers to accomplish the rather tall order responsibility of making their business strategic business associate there are supposed to understand the essence of mutually supporting roles that ate played by other areas of their businesses such as fiscal, marketing,, as well as operations.
Another way of tackling this issue is through skillful and careful development of competencies that are related to business within the individual human resource managers. While trying to make the business expand very fast and continuously shaped under the influence of global factors, HR managers are required to understand well the significant issues, and then contribute effectively to the changes within their businesses as well as those of the global by means of pro-active engagement in discussions within their individual organizations (Gitman and MacDonald 1983). For example, these individuals need to develop some recognizable superior client care services and techniques through the management of talent in the host states by being in collaboration with the existing local marketing organizations(Dessler, 2000).
Gitman and McDaniel (1983) have also argued that human resource personnel still needs to be more knowledgeable when it comes to the details of the business organization that they claim to serve. Simply put, the managers can ensure maximum competence within themselves via trained development practices including job redesign, job enrichment, as well as job rotation (Dessler, 2000). When world businesses are put into consideration, the nurturing of multicultural competence is very vital in that it enhances the individual expatriate’s success as well as the success of the business organization. Because of this, there is a very urgent need for the human resource managers to be well versed in their businesses’ skills and experience, and that of global business for them to perform their duties in this globalized business world.
Another important strategy that human resource managers should keenly employ is the harmonization of international and local human resource policies and procedures. Because of varied international socio-cultural, constitutional, as well as political situations, the extent to which these policies and procedures may be different from standardized. To ensure the realization of some form of standardization, the managers need to have the insight to put into practice the human resource policies and procedures together with their host countries so as to the realized maximum realization of the goals of their various businesses (Dessler, 2000).
Gitman and McDaniel (1983) provided example illustrations to the localization of the human resource procedures and policies. For instance, instead of applying seniority, based reward settings, as it is in Japan, Canon ended up adopting the performance-based strategy when operating in the United States of America. Still, German producers, which are vastly experienced in dealing with unions, have opted to congregate in the mostly non-unionized American Southern States. Dessler (2000) has shown that Japanese businesses often tend to adopt ethnocentric staffing practices more than their American and European counterparts, and as a result, face more problems when it comes to their global human resource management undertakings. Therefore, human resource managers should be at the forefront in striving to strike a balance between standardizing and localizing human resource procedures and policies.
Another important strategy that human resource managers should keenly employ is the harmonization of international and local human resource policies and procedures. Because of varied international socio-cultural, constitutional, as well as political situations, the extent to which these policies and procedures may be different from standardized. To ensure the realization o some form of standardization, therefore, the managers need to have the insight to put into practice the human resource policies and procedures together with their host countries so as to the realized maximum realization of the goals of their various businesses (Dessler 2000) . Gitman & McDaniel (1983) provided example illustrations to the localization of the human resource procedures and policies. For instance, instead of just applying seniority, based reward settings, as it is in Japan, Canon ended up adopting the performance-based strategy when operating in the United States of America. Still, German producers, which are vastly experienced in dealing with unions, have opted to congregate in the mostly non-unionized American Southern States. Dessler (2000) has shown that Japanese businesses often tend to adopt ethnocentric staffing practices more than their American and European counterparts, and as a result, face more problems when it comes to their global human resource management undertakings. Therefore, human resource managers should be at the forefront in striving to strike a balance between standardizing and localizing human resource procedures and policies.
In dealing with these global and local human resource issues and procedures, human resources cannot help but develop a sense of open-mindedness, which is extremely vital for business performance. Eventually, they need also to be thoroughly focused; they need to see to it that decisions are not just made while based on the local business environment, as opposed to the global business environment. This is because businesses are today more affected by international market conditions than the local ones.
In conclusion, there are different issues of compensation that Canada shares with other countries. At the same, the issue of globalization of business activities has resulted in many changes in global businesses. Because of these, human resource managers have constantly initiated new approaches ensuring that the operations of their businesses remain relevant to the existing global business realities new approaches of ensuring that the operations of their businesses remain relevant to the existing global business realities. This will eventually lead to better performance of their business so as to meet their set goals and objectives.
Card, D. E., & Freeman, R. B. (1993). Small differences that matter: Labor markets and income maintenance in Canada and the United States. Chicago: University of Chicago Press.
Daniels, R. J., & Morck, R. (1995). Corporate decision-making in Canada. Calgary, Alta.: University of Calgary Press.
Dessler, G. (2000). Human resource management. Upper Saddle River, NJ: Prentice Hall.
Gitman, L. J., & McDaniel, C. D. (1983). Business world. New York: Wiley