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ACKNOWLEDGEMENT

We are heartily thankful to our teacher, Ms Toima Raza, whose encouragement,


guidance and support from the initial to the final level enabled us to develop an
understanding of the project.

Lastly, we offer our regards and blessings to all of those who supported us in any respect
during the completion of the project.
Executive summary

Every businessman has aspiration to take their business internationally. There is lot of
complications and risks involve taking the business internationally. In this project we are
specially analyzing the issues of human capital of an organization when taking business
internationals. Issues may be related to recruitment and selection, training and
development, performance management, compensation plans, career development and the
expat management. One more important part of our project is through light on how to
manage or handle the subsidiary what should be structure of it also we have discussed in
detail what would be the role of Human Resource department to brining the business
internationally.

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Table of Contents
Details Page No

Acknowledgement………………………………………………………… I
Executive Summary ……………………………………….……………… II

 Company Background………………………………………........ 04
 Mission and Vision ……………………………………………... 04
 Strategic Human Resource Management at Butterfly………….. 04
 Competitve Strategy of Butterfly……………………….………. 05
 HR poloicies in International context ………………….……….. 06
 Department of Butterfly …………………………….………….. 07
 Home Country organization Strurctur……………...…………… 08
 Butterfly Organic Organization…………………………………. 09
 HR Roles,Responsibilites before and after going international… 10
 Reasons of selecting Bangladesh……………………………….. 11
 Subsidiry Structure……………...…………………………........ 12
 Training & Development at Butterfly………….…..…………... 13
 Expats Relocation and Repatriation at Butterfly......…………… 19
 International Labor Organization………………..……………… 20
 Recruitment Strategy at Butterfly………………….…………… 21
 Butterfly Recruitment Process………………………………….. 23
 Performance Appraisal at Butterfly…………………….………. 24
 Compensation to Expat ………………………………………… 27

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Company profile:

Butterfly Textile Mills Limited stated its business in 2004.it is operating in Faisalabad
industrial sector 34-b. The company is one of the premier manufacturers of textile
products in Pakistan, fully equipped not only with the modern machinery and equipments
but also professional management and staff. The growth of the company has proved
combination of excellence. Butterfly Textile, activities started from the spinning of cotton
and extend to weaving, processing and finishing.
• Annual turnover 5 billion Rupees
• Most Modern unit of Pakistan
• Green Company
• 2000 Employees
• ISO 9001 Certified
Mission Statement

"To provide quality products to customers and explore new markets to


promote/expand sales for growth and prosperity of the company."

Vision Statement

"To transform the company into a modern and dynamic yarn, cloth and
finished product manufacturing company”

Butterfly Strategic Human Resource Management:

Strategic Human Resource Management of butterfly has played pivotal role in


taking business internationally. During the process of internationalization, we
have made through analysis of strengths and weakness of our human resource.
Human resource is always one of the most important resources in a company.
It is human resource that becomes the source of core competence of a company.
Butterfly is using all its resources strategically, especially by linking human
resource planning with its business vision to keep its competitive power in the
world market. Strategic human resource management insures HRM to support
the business-level strategy of butterfly.

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Butterfly Competitive Strategies of Business:
There are three competitive business strategies

• Cost leadership

• Innovation

• Quality

Butterfly have opted quality strategy for new setup. Already we are operating in Pakistan
with quality strategy.

Process of formulization of HR strategy in butterfly:

Butterfly has selected HRM strategy according to the business strategy. Different
strategies acquire different employees with different techniques and different role
behavior and same process we would be doing for new set up.

HR mainly involves in these activates to support the quality strategy of business;

• T&D of employees

• Promoting Team work culture

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Human Resource (HR) policies in context of internationalization:

Human resource (HR) policies refer to the recruitment, development and deployment of
human capital .In the internationalization context, this could be understood to include
choosing people with the right skills for international management, training them through
education and international assignments, deploying them effectively throughout the
organization, appraising them correctly, and finally establishing a satisfactory career path
for them. Success in today’s hypercompetitive markets has more to do with innovation,
speed and adaptability and less to do with economies of scale, technology and access to
capital.

Butterfly HR system:

Butterfly has called for greater firm investment in high-performance or high-involvement


human resource systems designed to enhance employees’ skills, commitment and
productivity. Such high-performance work systems have the following characteristics

• rigorous selection procedures

• Internal merit-based promotions

• Conflict avoid ness approach

• Cross-trained teams

• High levels of training

• Information sharing

• Participatory mechanisms

• Group-based rewards

• Pay for performance

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Departments of Butterfly

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Home Country Structure

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HR/Admin Finance QA Mkt/Sales Production Purchase Export MIS
VP 1 - 1 1 1 1 1 1 -
GM 1 1 1 1 1 1 1 1 -
Manager 1 1 2 1 5 2 2 1 1
Asst. Manager 2 2 4 1 10 4 4 1 3
Sr. Executive 4 4 8 1 20 8 8 1 6
Executive 8 8 16 1 40 16 16 1 12
Total 17 16 32 6 77 32 32 6 22

Total headcount 240 employees

Organic organization

Butterfly is a organic organization its design is highly adaptive and flexible it would be
changing their policies and procedures according to the changing environment. The
characteristic of our organization are stated below

• Cross- functional teams

• Free flow of information

• Decentralization

• Low formalization

Unity of command

Butterfly strictly following the basic management principles that each person would report
only one.

Chain of command

Subsidiaries organic gram clearly shows that which person would be reporting to home.

Span of Control

In butterfly subsidiary maximum span of control is six persons.

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HR roles before going international

Man power planning


Head count budgeting
Resources planning

HR roles after going international

Aligning of Hr polices with organizational strategic goals


HR department Integration with the others departments of organization
Making Hr policies that are coherent with labor laws and culture of host country
• foster Communication network
• Employing the skills and the activities of the workforce efficiently.
• Providing the organization with well trained and well motivated employee.
• Developing and maintaining quality of work life
• Making OCTAPACE culture climate in the organization.

O-Openness
C-Confrontation avoidance
T- Trust
A-Autonomy
P- Proactiveness
A- Authenticity
C- Collaboration
E- Experimentation

Basis of Internationalization

• To Expand Sale
• Acquire cheap Resources

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Reasons for Choosing the Bangladesh:

Bangladesh has a population of 133.40 million making it the most densely populated
country of the world. The state language and mother tongue is Bangle. English is widely
spoken and understood. Bangladesh is Located in the north-eastern part of South Asia..
1. Abundant labor forces.
2. Low cost energy and natural gas.
3. Labor and power are cheap in Bangladesh as compared to India, Pakistan and
China.
4. Labor cost is only 23 cents/hr. whereas, in India, Pakistan and China the labor
costs are 43, 41 and 89 cents/hr, respectively.
5. Gas burned energy cost in Bangladesh is less than two cents/KWH in compared to
9.33, 6.72 and 7.84 cents/KWH in India, Pakistan and China, respectively.

6. Dedicated and sincere work force, which are eager to work extended work hour.
7. Bangladesh had a tremendous opportunity to gain access to European and the U.S.
market through MFA agreements for its Ready Made Garments (RMG).
8. Bangladesh has now become a significant supplier to both North America and
Europe. More than 50% Bangladesh garment exports go to the countries of
European Union, and 44% to the united state.
9. The Government policy of liberalization of the economy encouraged private sector
investments.
10. The Government introduces a support system for the textile industry that
included Fiscal Benefits, Financial Benefits and Institutional Support.
11. The textile policy introduced a new tariff structure designed to stimulate
the growth in Backward Linkage Industry (BLI) to encourage local yarn
productions.

Availability of high quality and comparatively cheaper Uzbek cotton and also enjoying
Indian cotton

India Pakistan China Bangladesh


Labor Cost 43 cent/ hr 41 cent/ hr 89 cent/ hr 23 cent/ hr
Gas Energy Cost 9.33 KWH 6.72 KWH 7.84 KWH Less then 2 cent

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Subsidiary Structure

HR/Admin Finance QA Mkt/Sales Production Purchase MIS


Sr. Manager 1 1 1 1 1 1 -
Manager 1 - 1
Asst. Manager 1 1 2 1 5 5 4 1
officers 1 3 4 2 30 15 16 3
Total 4 4 7 4 36 21 21 5
Total head count of 102

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Training and Development

Human resource development is important function of HR, and can be an alternative to


hiring employees from outside the organization. Management development as “a process
through which the manager's value to the organization increases based on the acquisition
of new behaviors, skills, knowledge, attitudes, and motives”

We are developing of ours employees in a direction that is consistent with the


international strategy of the firm. We are doing it through workshops, sending employees
for training courses, and training as consisting of “a formal instructional process through
which the organization imparts to its employees the skills, knowledge, attitudes and social
behaviors needed to perform current and future jobs”. Training makes the human capital
firm specific and thus inimitable. In addition, sustained investments in training make
copying of the process by rival firms difficult because of time-compression diseconomies.
We are providing training in areas such as such as economic education; team-skills
training; skills assessments; peer input; training for problem-solving; regular horizontal
and vertical training; and total quality control skills and techniques

We are developing our human capital in the internationalization context is through


challenging jobs, which are supplemented through coaching and training.

Training at butterfly

The butterfly Mills adopts different training programs for enhancing the skills of its
employee. In Butterfly Mills following methods are used for employee training

On The Job Training


The development of a manager's abilities is taken place on the job. The three techniques
for on the job development are being used by butterfly

• Coaching
• Mentoring
• Job rotation

Butterfly management role to support training programs


Failure of training is not always because of lack of KSAs but sometimes it is because of

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the organizational forces also. These forces also hold back the transfer of training, and
learning. Therefore, it is important to keep in check those forces. For the successful
transfer of training, butterfly is providing supervisor support, trainer support, peer support,
reward system, climate and culture.

Peers Support
Peer support can also help in transfer of training, if the trainee is the only one who is
receiving training in the department then probably the experienced peers might put
pressure on trainee to forget the training and work. This situation also hampers in transfer
of training. However, this situation is avoided by involving the entire department in
training at butterfly, also by encouraging the learning culture in the organization

Supervisor Support
Can affect their employees learning in number of ways, if the trainee is motivated to learn
and receives full support from their supervisor, then this support in turn encourages the
employee to learn as much as possible. Also, supervisor can also reduce the negative
factors of training, such as, the work that piles up during training that makes the employee
uncomfortable and employees’ negative perception about the training program.

Trainer Support
Can also have a positive impact on the transfer of training. Gone are the days, when the
trainers’ role used to get over once the training program is done. Trainers’ role is now
extended to the work place also. Besides training, trainer’s role is to keep a check on how
trainees are performing and help them and discuss with them if they encounter any
problem in the workplace.

Climate
Apart from supervisor support, peers support, trainer support, Climate factor also
comprises of company polices, attitude of upper management towards employee, towards
training. If these factors are positive then the climate will also support the transfer of
training. It is the organizations foremost duty to make the employees realize through these
factors that adequate amount of time and resources are spent on them for their
professional and personal development.

Culture

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Also have the impact over the transfer of training. If the culture of the organization
provides enough opportunities to its employees to implement what they have learnt in the
workplace and provide them variety of others factors such as, social support, challenging
jobs, etc then the likelihood of the transfer of training increases.

Reward Systems
If the learning outcome that helps in achieving the objectives is linked to reward system
then the probability of the success of training would increase.

Butterfly training model:

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Butterfly training model consists of five phases and is repeated on a regular basis to make
further improvements. The training should achieve the purpose of helping employee to
perform their work to required standards. The steps involved in Model of training are as
follows

1. Analyze and identify the training needs i.e. to analyze the department, job, employees
requirement, who needs training, what do they need to learn, estimating training cost, etc
The next step is to develop a performance measure on the basis of which actual
performance would be evaluated.

2. Design and provide training to meet identified needs. This step requires developing
objectives of training, identifying the learning steps, sequencing and structuring the
contents

3. Develop- This phase requires listing the activities in the training program that will
assist the participants to learn, selecting delivery method, examining the training material,
validating information to be imparted to make sure it accomplishes all the goals &
objectives.

4. Implementing is the hardest part of the system because one wrong step can lead to the
failure of whole training program.

5. Evaluating each phase so as to make sure it has achieved its aim in terms of
subsequent work performance. Making necessary amendments to any of the previous
stage in order to remedy or improve failure practices.

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Butterfly Focus on Trainees
Training is successful not only with good training design and training objectives but also
with the readiness and willingness of the trainees. For the training to be successful, three
things are required by trainees.

1. Motivation
2. Knowledge, Skills, and Attitudes (KSAs)
3. Expectations towards Training

Expected Performance is directly proportional to the multiplication of motivation,


required KSAs, and expectations towards training i.e.

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Motivation – If the trainee is not motivated to learn, no learning is likely to occur no
matter how good the training methods are, or how talented the trainees are. Therefore, it is
important to intervene before training and provide them the information about the learning
outcome that they can expect and how the learning outcome will help in achieving the
objectives. This increases the motivation to learn and to be successful in training.

Expectations – Positive expectations matter a lot in a training program. If the trainee


perceives the training as waste of time, and waste of resources, no learning is likely to
occur. No learning is possible with negative perception. On the other hand, if the trainee
believes and expects that the training would help him to improve upon his professional
skills and would further help him in achieving his personal goals, the probability of
training to meet the objective increases.

Knowledge, Skills, and Attitudes (KSAs) – It is important that the selected trainees
should have the right KSAs for the training because even if the methods and contents of
the training is good but the candidates do not have the right KSAs, the training program
will fail. Also the training methods would not be effective if the candidates are lacking the
desired skills. Therefore, proper selection technique is must that would ensure that hired
have the requisite KSAs to be successful in training.

Expats relocation and repatriation

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One of the factors considered important in the effective deployment of employees in
international operations is career planning that does not penalize expatriates for being
away from headquarters, and which facilitates the effective reentry of expatriates into the
home organization. Globalization has created an increased demand for business leaders
with a high level of global awareness and international skills, and expatriate assignments
play an important role in the development of such global managers. Most companies do
not give their expatriates any post-assignment employment guarantees whatsoever but
butterfly system is totally different. Here we make a career planning for expatriate that
enhance their moral as well as commitment towards the organization. Among the most
problematic aspects of repatriation are the unfulfilled expectations regarding expatriates,
career advancement once they have returned to their home organization.
Our company has selected majority skilled people from local market, like
production staff, marketing staff, finance staff etc.
In our company expatriate selections has made by line manager.
All departments Vice President has selected one manager from their respective
department to send to Bangladesh as an expatriate.
We have made criterion to select a individual for foreign assignment stated below
Personality
Job knowledge and motivation
Relational skills
Flexibility
Adaptability to new culture
Overseas Experience
Family Situation
Management Skills
Professional expertise
Job suitability
Desire for foreign assignment
Communication skills
For the duration of 3 years we have deployed them in Bangladesh
On the successful completion of assignment they would be transferred back to Home
country. At the position of GM levels we would give them promotions.

Our company is providing training to expatriate at four levels.

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Level 1: Training focuses on the impact of cultural difference giving them awareness of
cultural difference and how it would impact on business.
Level 2: Teaching how they responds to and treats his or her new foreign subordinate.
Level 3: Provides factual knowledge of target country.
Level 4: Skill building in areas likes language and adjustment and adaption.
Level 5: Ethics

International labor Organization

The ILO is the global body, founded in 1919, responsible for drawing up and overseeing
international labor organization. Working with its Member States, the ILO seeks to ensure
that labor standards are respected in practice as well as principle. Total member countries
are 183.and Bangladesh is also member of it. When we would be operating in Bangladesh
our company would keep international labor stander in mind while making HR polices
and standard. Stated below are main themes on which our company must have complete
information of ILO. This would help us in following international labor standard.

• Child Labor
• Decent work environment
• Economic and social Development
• Employment Security
• Equality and Discrimination
• Forced Labor
• Freedom of association and the right to collective bargaining
• Safety and Health at work
• Social security
• Working Conditions

Recruitment strategy:

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In Butterfly the recruitment process starts when there is a vacancy and employee is
required. The job requirement is forwarded to the HR Department by the head of the
particular department. Hr department then use two approaches to hire the employee
internal recruitment and external recruitment.

Decentralized Recruitment
Butterfly Mills would be using polycentric recruitment approach for new subsidiary but
targets are given from parent country. At the start we would be following best
practices of home country and then we would be making them best fit according to
new market, culture environment. Lower level staffs as well as top level executives
are recruited in a decentralized manner. Executive level recruitment would be done
with the consultation of parent country.

Internal Recruitment:
Internal Sources of Recruitments are given below

Job Posting
Advertising of job openings to current employees via bulletin boards or intranet,
newsletters, or personal letters. Filling a job opening from within the firm has the
advantages of stimulating preparation for possible transfer, or promotion and increasing
the general level of morale.
The first and foremost preference of butterfly Mills is to hire the employees through
internal recruitment and giving existing employees more chances to develop their career.
For this purpose butterfly Mills firstly use Internal Job Posting to fulfill the vacant seat.

Transfers
The employees are transferred from one department to another according to their efficiency
and experience

Promotions
The employees are promoted from one department to another with more benefits and
greater responsibility based on efficiency and experience

Retired and Retrenched employees

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May also be recruited once again in case of shortage of qualified personnel or increase in
load of work. Recruitment such people save time and costs of the organizations as the
people are already aware of the organizational culture and the policies and procedures.

The dependents and relatives of deceased employees and disabled employees are also
done by butterfly so that the members of the family do not become dependent on the
mercy of others.

External Recruitment
To search the employee to fulfill the vacant seat outside the organization is called external
recruitment. HR Department can use various approaches to locate and attract external
candidates like Government agencies, private employment agencies, recruiting
consultants, executive search firms, and educational institutions.
Butterfly Mills run the external recruitment campaign itself and do not use the other
sources like agencies and search firms.

Sources used for external job recruitment


Following are the some sources of Job Recruitment in butterfly mills:

• By Newspapers

• By Website

• By Universities

• By referrals

• Walk-ins

• Labor Contractors

• Placement Agencies

• Poaching/Raiding

Butterfly Recruitment Process:

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1. Identify vacancy
2. Prepare job description and person specification
3. Advertising the vacancy
4. Managing the response
5. Short-listing
6. Arrange interviews
7. Conducting interview and decision making

The recruitment process is immediately followed by the selection process i.e. the final
interviews and the decision making, conveying the decision and the appointment
formalities.

Identify
vacancy

Conducting
Prepare JD
interview and
and person
decision
specification
making

Recruitment
process
Arrange Advertising
interviews the vacancy

Managing the
Short-listing response

Concept of performance appraisal at butterfly

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Performance appraisal is important for employees at all levels throughout the
organization. The parameters, the characteristics and the standards for evaluation may be
different, but the fundamentals of performance appraisal are the same.

Performance appraisal of Managers

Appraising the performance of managers is very important, but at the same time, it is one
of the most difficult tasks in the organization. It is difficult because most of the
managerial work cannot be quantified i.e. it is qualitative in nature like leading his/her
team, guiding, motivating, planning etc.

Therefore at butterfly, the two things to be noted and evaluated for the purpose of
appraisals are:

• Performance in accomplishing goals,


• Performance as managers

Performance in accomplishing goals


Managers are responsible for the performance of their teams as a whole. Performance in
accomplishing goals would mean to look at the completion or achievement of the
goals set for a team of employees which is being assigned to or working under a
particular manager. The best measuring criteria for a manager are his goals, his
plans of course of action to achieve them and the extent of achievement of the goals.

Performance as managers
the responsibilities of managers include a series of activities which are concerned with
planning, organizing, directing, leading, motivating and controlling. Managers can be
rated on the above parameters or characteristics

Criteria for measuring performance at different levels:


The criteria for measuring performance changes as the levels of the employees and their
roles and responsibilities change.

A few examples for each level are described below:

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For top level management
• Degree of organizational growth and expansion
• Extent of achievement of organizational goals
• Contribution towards the society
• Profitability and return on capital employed

For middle level managers


• Performance of the departments or teams
• Co-ordination with other departments
• Optimal use of resources
• Costs Vs. revenues for a given period of time
• The communication with superiors and subordinates

For front line supervisors


• Quantity of actual output against the targets
• Quality of output against the targets
• Number of accidents in a given period
• Rate of employee absenteeism

Performance appraisal techniques at butterfly

360 Degree Appraisal


360 degree feedback, also known as 'multi-rater feedback'

Rank and Yank Strategy

Also known as the "Up or out policy", the rank and yank strategy refers to the
performance appraisal model in which best-to-worst ranking methods are used to
identify and separate the poor performers from the good performers. Then the action
plans and the improvement opportunities of the poor performers are discussed and
they are given to improve their performance in a given time period, after which the
appropriate HR decisions are taken. Some of the organizations following this strategy
are Ford, Microsoft and Sun Microsystems.

Process of Performance Appraisal at butterfly

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Butterfly compensation plan
Butterfly is using latest strategies for retention and talent management is "linking
compensation to performance". Commonly known as "Performance pay" or "Performance
based pay", it links the compensation of the employees to their performance and their
contribution to the organizational goals. Therefore, periodic performance reviews play a
vital role and provide the basis of performance related pay. Commissions, incentives and
bonuses, piece rate pay help the employer to pay the employee according to their
productivity and hard work.

Types of Performance Pay used at butterfly


• Piece rate pay

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• Merit pay – The first step to performance pay, merit pay means setting some basic
salary according to the position and the rank of the employee and the variable part
of the salary is based on the periodic performance reviews
• Profit Sharing – Sharing the profits of the enterprise with the employees as bonus.
• Incentives and Performance Bonus – Rewards for special accomplishments or
fulfillment of the targets set such as sales commission.
• Gain sharing - Sharing of gains as a result of the increased performance of the
employees with them.

Compensating expat at butterfly

Butterfly Balance Sheet Approach:


Butterfly is using balance sheet approach to formulating expatriate pay is to equalize
purchasing power across countries, a technique known as the balance sheet approach.
More then 85% multinational organizations used this approach.
The basic idea is that each expatriate should enjoy the same standard of living he or she
would have had at home. With the balance sheet approach, four main home-country
groups of expenses Income taxes, housing, goods and services, and discretionary expenses
(child support, car payments, and the like) are the focus of attention. Butterfly estimates
what each of these four expenses is in the expatriate’s home country, and what each will
be in the host country. Butterfly then pays any differences such as additional income taxes
or housing expenses.

The Balance Sheet Approach (Assume Base Salary of Rs. 80,000)


Annual Expense Pakistan Bangladesh Allowance
Housing & utilities 35,000 67,600 32,600
Goods & services 6,000 9,500 3,500
Taxes 22,400 56,000 33,600
Discretionary income 10,000 10,000 0
Total 73,400 143,100 69,700

Employee Retention Strategies at butter fly


1 Hiring the right people in the first place.
2. Empowering the employees: Give the employees the authority to get things done.

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3. making employees realize that they are the most valuable asset of the organization.
4. Having faith in them, trust them and respect them.
5. Providing them information and knowledge.
6. Keeping providing them feedback on their performance.
7. Recognizing and appreciate their achievements.
8. Keeping their morale high.
9. Creating an environment where the employees want to work and have fun.

Conclusion
Human are the valuable asset of every company. It is human resource that becomes the
source of core competence of a company. Organization must recruit, select develop
manage and use their human resource strategically to get competitive advantage in global
market.

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