SWOT Analysis of HR Practices
As the modern businesses face the pressures of globalization and expand in their operations worldwide, the roles of and practices in the human resource departments keep transforming to match the corporate strategies and objectives. International Human Resource Management (IHRM) entails the management of people and business activities across international boundaries as depicted in international and multinational companies. To achieve organizational effectiveness, the HR has to monitor the dynamics and challenges of globalization and takes advantage of the opportunities it presents. Taking the example of Johnson & Johnson Company, the current paper discusses the impact of HR on the effectiveness of the organization by examining the trends in employment practices and demographic characteristics of their workforce. Moreover, the paper focuses on the influences of globalization on HR practices and the strengths and weaknesses of the organization’s HR practices.
Keywords: globalization, HR practices, selection and recruitment, employees, threats and opportunities
HR practices are important in any organization since they determine the organizational effectiveness and culture and facilitate achievement of the goals, especially in businesses that are affected by globalization. The current paper evaluates such HR practices and the possible threats and opportunities that Johnson & Johnson Company face as a result of globalization and general dynamics in their work force.
Trends in Employment Practices in the Industry
Johnson & Johnson family of companies comprise of several companies including a multinational pharmaceutical company which ranks eighth-largest in the world. Apart from the pharmaceutical company, the employees in Johnson & Johnson also work with partners in healthcare in various companies such as the consumer health company, medical devices and diagnostics company, and biologics company (Johnson & Johnson, 2012). The employees in this company are employed in more than sixty countries in the world. The company’s 2012 annual report states that the employment trend in this company has been on the increase. Statistics shows that from 2009 to 2012 the number of employees in the company was 115500, 114000, 117900 and 127600 (Johnson & Johnson, 2012).
Demographic and Workforce Characteristics
Johnson & Johnson operates under a diversity and inclusion program which endeavors to ensure diversity in the workforce in terms of race, nationality, gender, sexual orientation, gender, age, and physical ability. The company achieves diversity and inclusion through collaborations and partnerships (Johnson & Johnson, 2012).
In North America, Johnson & Johnson has 98% full-time employees and only 2% are part-time employees. The company reported a total turnover rate in of less than 11 percent with a voluntary turn-over rate of 7.5% in 2012 (Johnson & Johnson, 2012). The demographic statistics of the company indicates that 52.5 are males 47.5 percent are females; the whites and minority accounts for 70.7% and 29.3% respectively. Moreover, the employees with age ranging between 30 and 50 accounts for 59.8% forming the dominant age group while those above 50 years old and below 30 years are 32.8% and 7.4% respectively (Johnson & Johnson, 2012).
Influences of Globalization on the Organization's HR Practices
HR practices take the form of norms, activities, expected habits, and processes that enhance competencies and effectiveness of the organization. Some of the HR practices that are influenced by globalization include HR planning, performance appraisal, selection and recruitment, compensation and benefits, induction, training and development, and career management (Goyal & Shrivastava, 2012).
Due to globalization, the HR planning personnel are forced to scrutinize various factors across the borders in various labor markets. The labor market is often affected by various environmental and cultural factors which threaten the operation of the organization (Chen & Chuang, 2013). Therefore, globalization has led to the changes in the HR planning having scanned the potential threats and opportunities in the labor market. For instance, in some of the international countries, Johnson & Johnson Company has entered into joint ventures and partnerships in a bid to enhance global cooperation and mitigate the effects of competition (Johnson & Johnson, 2012).
According to studies, failure of organizations to carry-out HR planning may lead to the replication of HR practices. HR practices replications involve the imitation of the best HR practice in the international market so as to achieve a competitive advantage. Many firms, such as the Deutsche Bank AG, have used the strategy in expanding and growing across the borders (Chambers, 2013). Such practices integrate the local customs and practices and hence enhance the competitive edge by ensuring the employment of right policies, the optimal number of employees, the desirable skills, experiences, and competencies.
Selection and recruitment process may be easily affected by poor HR planning policies as has been discussed above. In a global perspective, the organization has to make a decision on the desirable candidate to position whether local or international (Soo Siew, Halim, & Keng-Howe, 2010). Johnson & Johnson companies are equally influenced by globalization in their selection and recruitment processes. In most cases, globalization leads to the modification of the selection and recruitment criteria. For instance, the selection process may be modified to include or examine the experience of employees in the country in question and their understanding of a range of cultural skills. Moreover, the recruitment process is at times done on an online platform to enhance international resourcing for effective local and global company operations (Chen & Chuang, 2013).
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Due to globalization, the multinational companies are sometimes forced to deploy expatriates and skilled or experienced personnel urgently to meet the demand. Such short time notices may not be achieved through local recruitment, thus the company has an international framework tasked to recruit an individual at such level and thereby reduce cost implications (Soo Siew et al., 2010). According to the 2012 report, the company implements diverse recruitment models in various countries and considers diversity in the recruitment strategy (Johnson & Johnson, 2012). Moreover, the company uses a global job posting program which further enhances the development of the employees.
Globalization influences the multinational HR practices such as performance appraisal, employees’ benefits, career training, and development. In training, for instance, the organization is at times forced to train the employees for various issues, especially in cross-cultural interventions after recruitments and selection (Hashim & Hameed, 2012). In Johnson & Johnson companies, the human resource leaders are responsible for encouraging the employees and creating the environments suitable for their training and career development. The Johnson & Johnson 2012 report indicates that it offers on-the-job training in various topics such as leadership and management education and other assessments that can be accessed by the web and workshops (Johnson & Johnson, 2012).
According to Chambers (2013), organizations consider the compensation and other benefits to their employees, especially the expatriates in their operations. Some of the benefits and compensations include the traveling costs, hazard costs, and the costs of living. Such compensations should be considered to motivate employees even in the global labor market. According to 2012 citizenship and sustainability report, Johnson & Johnson companies offer competitive and comprehensive benefit programs such as health, survivor retirement, and disability benefits to meet the needs of their workforce and families (Johnson & Johnson, 2012). Moreover, the company through the HR offers employee assistance programs in case of any re-organizations caused by globalization as outlined in the collective bargain agreement. Apart from the employee assistance benefits, the company offers country-based service benefits to the employees to fulfill the needs of their workforce in line with company’s credo (Johnson & Johnson, 2012).
Threats and Opportunities, Emerging Issues and Challenges Caused by Globalization
There is a variety of threats and opportunities that arise in HR management in any organization due to globalization. The threats and challenges in the organization include competition for qualified or experienced employees, retention of the workforce, and cultural diversity among others. The organizations struggle in terms of implementation of cross-cultural competence of their workforce to support the business strategies due to globalization. The challenge makes such organization to invest more into trainings in cross-cultural skills, languages, diverse leadership, and others (Chambers, 2013).
There are globalization challenges and opportunities resulting out of the deployment of the HR professional into the international market to undertake duties of an employee champion, strategic partner, change agent, and administrative expert. For example, the strategic partner adds value of the organization, but this role faces the challenges in the form of difficulty in assisting leaders to build the worldwide organizational capability and create a cross-border and cultural alignment (Chambers, 2013). As an administrative expert, the HR personnel contribute to the effectiveness of the organization in the international market. However, they face global challenges such as global recruitment and selection of employees, management of offshoring processes and provision of efficient training and compensation programs to the employees (Chambers, 2013).
Retention of the employees in the organization become a challenge, especially in cases of perceived poor work environment. Therefore, many organizations launch into employee benefit and reward programs that seek to enhance their employee retention rate. If it is successful in terms of talent attraction and retention, the impact of globalization becomes an opportunity, and as such the global recruitment and management team can source competent employees across the world (Hashim & Hameed, 2012). Johnson & Johnson Company is reportedly using this as an opportunity to retain and attract employees through an online recruitment platform to source employees and assign them to the various companies in different countries. Moreover, in 2012 employee turnover was less than 11%, which favored the company in terms of attracting talents and retaining their existent workforce (Johnson & Johnson, 2012).
Globalization provides an opportunity for the organization’s HR to utilize employees from diverse cultures in bid to enhance their competition. Moreover, globalization may be used by the HR personnel to enhance the growth of the organization. The growth strategy is met through the available low-cost labor and increased number of consumers, especially in the developing countries and other untapped potential markets (Chambers, 2013).
Strengths and Weaknesses of the Organization's HR Practices
The organization’s HR practices depict strengths that contribute to operation efficiency. They include the creation of global performance management, education and training, career development, and compensations to the employees. For instance, the company provides trainings for the employees which are tracked and documented. Moreover, the company offers transition assistance to employees who retire. The employee compensations, benefits, training, and career development opportunities are standardized in all companies in the various countries (Johnson & Johnson, 2012). Moreover, the company has developed long-term HR plan that ensures alignment of the HR strategies with the overall corporate objectives.
Despite the strengths in the HR practices, there are some weaknesses within its framework in the company which could be addressed to enhance the effectiveness of the HR management functions and strategies in the organization. Some of the weaknesses include the deficiency in a proper channel and framework to share best practices in various locations of the company with the other family companies across the globe. Probably the company is short of such frameworks due to lack of a stipulated HR credo that would act as a guideline to the same, and this results in the challenge of employee deployment across borders.
In spite of the fact that the company has done a lot in terms of launching programs that enhance employee satisfaction, much can still be done. The company can further enhance career development of the employees by clearly outlining their career progression by setting up a well-structured career planning system. Moreover, mentorship programs should be adopted among the employees to foster a spirit of progression and relationships between the superior and subordinate employees.
Despite the continuous growth in the workforce in Johnson & Johnson Company, it is not exempted from the threats and opportunities that influence the HR practices in organizations. Therefore, the company should monitor its HR practices such as selection, recruitment, and employees career development trainings to mitigate such challenges. Strengthening of the global HR practices is desirable for efficiency of international business organization.