The Impact of Globalization on Human Resource Management
Globalization refers to the interconnection among countries, politically, economically and culturally. Globalization has come into existence due to the following factors: (i) betterment in transportation and communication, (ii) human and capital mobility, (iii) increasing formation and existence of NGOs and multinational corporations. Betterment and improved technology in transportation and communication across the globe has significantly reduced great distances and shrunk the world. In old times when people used to ride on camels or cover distances on foot, today, crossing the Pacific is just a matter of some hours and you’re on the other side of the world! Planes, trains, cars – all have come into existence due to improved technology. Similarly, if we go back in time, when the only means of communicating with another person was via letters or a messenger would be sent to convey something, today, we see the increased usage of mobile phones, video conferences, fax machines, email etc. which has helped cut down costs and distances between continents. This has thus made communication much easier, faster and reliable. Human mobility refers to the movement of people to developed places in search of shelter (moving out of dangerous places), a means of earning (jobs) or for settling (a new home). Migration commonly occurs between developing countries where people find a greater chance of earning a living. Capital mobility refers to the investment of people in developing countries where economic conditions are better off. Thus these developing countries have become a hub for investors as chances of growth and success are ever-increasing. Dissemination of knowledge has played a vital role in the formation of globalization. The more knowledge spreads, the more awareness is created among people, resulting in better technology, improved communication, migration, growth and ultimately globalization. NGOs are non-government organizations formed to bring together people who have no connection with the government, hence the name. The increased diffusion of knowledge has lead to better technology and thus improvement in transport and communication, as already discussed above. With this, people from different countries can easily coordinate and contact people worldwide, easily, efficiently and cost-effectively. This has further resulted in people joining hands from various nations and forming a market (in business terms). The formation of these markets is leading to people working together to form multinationals in order to become customers of these huge markets. Another reason why this has led to globalization is because some jobs are better performed by foreigners at lower rates as compared to local ones. This is known as outsourcing. We have understood why globalization itself has come into existence. Every formation has an effect on one thing or the other. Now, we will focus on how globalization has effected human resource management. Before that, we need to see what exactly human resource management is. Then we will see the effects and the solution. Human resource management refers to the management of a company’s most significant assets, i.e. their employees (the people working). It begins with the hiring of an individual, analyzing and developing his abilities, creating room for his development and growth, training him according to the needs of the company and the job requirements. The human resource department is the key player and the backbone of every organization. Its aim is to meet strategic goals by managing the workforce of the organization, efficiently, effectively and productively. Ensuring cost reduction of a company is also a key role of the HR department. Thus, they the hiring of employees is done very carefully and after thorough study of the market situation. They salaries are finalized accordingly. It is the job of the HR department to find people at...
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