Human Resource Management in the Middle East
Introduction
Middle East refers to an expansive region. The region covers a large are from North Africa to Iran which is located in the south. Many countries are located within this region with Islam being the major religion which is practiced in all the countries. Approximately 95 per cent of the population in the region practice Islam (Budhwar and Mellahi, pp. 3). Oil is the major resource in these countries. While oil is a very precious resource which is found in all the countries found in the region, there are high levels of underdevelopment. The region has rich countries like Qatar and United Arab Emirates and poor states like Yemen. Though endowed with the same resources – oil and natural gas, each of these countries have varying political and economic constraints. The challenges impacts on the countries differently. Most of these countries are also trying to shift from a focus on one resource which is oil. Mostly the rich states are introducing other economic activities. All these activities have an effect on the approaches of HRM which are used in these countries. Most countries in the region – oil dependent and non-oil dependent having working on modalities of enhancing human resource development just as is with the western countries which have developed human resources (Budhwar and Mellahi, pp. 296). This paper looks into HRM in the Middle East. It uses a comparative analysis of two countries – United Arab Emirates and Iran.
HRM in United Arab Emirates and Iran
United Arab Emirates is one of the wealthiest countries in the Middle East region. It has a stable government. It is one of the countries that have diversified its economy in a great way with more focus being paid to trading activities. However, this does not mean that the country is not dependent on oil and natural gas. UAE has large reserves of natural gas and oil. With the presence of the open port, the country has been able to adjust its policies as one way of attaining high growth levels in the economy. The country has come up with policies aimed as shifting the country from dependency on oil and natural gas for economic growth to trade and agriculture. Trade and agriculture has a number are used in supplementing the revenues that come from the oil and gas industry. With increased trading activities in the country, the revenues from trade and agriculture have been increasing at an accelerated rate. The volume of trade is in the country has been so outstanding. The country has attracted many foreigners who come in both as traders and employees. This has necessitated a proper human resource policy which best fits the diversified economy of the country and which can best manage the diversified workforce in the country (Alserhan and Forstenlechner, pp. 44).
Iran is one of the oldest countries in the Middle East. It has a large reserve of oil and other minerals like uranium. It has had a long history of civilization. The country has had a long history which has necessitated many changes to its political, social and economic orientation. Islam is the major practiced religion in the country. It has a big influence on the political and economic institutions in the country. Iran is still to a large extent dependent on the oil and natural gas sector for its economy. The country produces 5% of the general global oil output every year. The country has few foreigners as compared to United Arab Emirates. In the recent years, the Iranian government has been reinterpreting Islam and its influence so as to develop better structures which so as to adapt to the new demand of the economy. These changes have been aimed at changing the image of the country in relation to the influence of Islam in the economy and governance. These changes include the adjustment in the economy and politics and the general human resource practices so as to incorporate the country in the larger global economy. Human resource management activities have for a long time been localized with a lot of standardizations (Budhwar and Mellahi, pp. 20).
Similarities in challenges facing the HRM approaches in UAE and Iran
Both UAE and Iran are Islamic states endowed with similar resources of oil and gas and practicing a common religion which is Islam. Though UAE has been witnessing a high influx of expatriates, it initially had a localization policy which was guiding the economy and human resource management in the country. Islam was the major influencer of the localization policy. Iran is also having the localization policy which has been guiding its economy. Due to the increased globalized economies, both countries have been struggling to move away from this policy so that they can fully fit in the global economy (Ghotbi, pp. 15-20).
The other major challenge that is facing Human resource management in the two countries is stereotyping of the workforce. Research has reviled that cases of stereotypes are common in the multinationals which operate in these countries. Most MNCs operating in UAE have a negative attitude towards the local population. This influences the approaches taken by these firms in selecting and managing their workforce. In Iran, there are few international business firms. However, for a few firms operating in the country, cases of segregation are very common. Cultural differences emanating from religious and social practices have been figured out as major fuelling agents of the stereotypes (Al-Waqfi and Forstenlechner, pp. 367).
Iran has been working on standardizing the human resource management so that it can fit to the international standards of HRM. This is a requirement so that the country can be fully incorporated into the international economy. In doing this, many structures have to be adjusted and re-adjusted. This process is a complex process which hinders the efficiency of the human resource management in the country. The rate of HRM standardization in UAE is a bit advanced because of the open business environment being influenced by the free ports. As is with Iran, the UAE is also still facing impediments to full standardization of HRM to international HRM standards (Ghotbi, pp. 15-20).
Differences in HRM Challenges in UAE and Iran
UAE is one of the most diverse countries in the world as is with its population. Business in the country has led to an influx of populations from different regions of the world. The country draws populations from all the regions of the world. This high degree of heterogeneity is proving to be a constraint in implementing HR in the country. Heterogeneity in population has its lapses in management because each population group has its unique culture which impedes the application of standardized human resource policies. While UAE is faced with the challenge of heterogeneity, Iran has a homogenous workforce and is being faced with the challenge of absorbing the external workforce. This has come with the realization that it will be more beneficial for the country to move fully join the global economy and shun segregation. As the country is allowing foreign firms into their economy, many HRM setbacks are being witnessed (Brewster, pp. 515).
Iran has a more centralized economy which resulted from the repatriation policy during the Islamic revolution. Therefore the majority of the Iranian economy is controlled by the pubic sector – approximately 80 percent. The public sector is struggling to gain grounds in the economy. Therefore, most employees are found in the public sector. Most of the employees are middle level and are devoid of leadership and motivation due to the problems faced in the public sector. Most initiatives in changing or restructuring human resource are derived from the public sector. Since the private sector is constricted, laxity in enforcing new HRM policies is prevalent. United Arab Emirates has witnessed a sprout in the number of private organization due to globalizations and the opening of the business field in the country. There are many global business firms operating in the country. While this is a positive sign for the workforce in the country, there are a number of negative setbacks on Human Resource development that comes with this. The high number of business firms operating in the country leads to a fragmentation of HRM. The many organizations hinder the implementation of Human resource management. They are guided by different internal policies which more often conflict with the policies that guide the new HRM policies in the country. However, the open economy seems to be favoring the economy of the UAE in as far as the adoption of new and improved HRM is concerned. Challenges are there and nobody can repute it. Nonetheless, the benefits coming are proving to be worth in human resource development and improvement (Jones, pp. 53-59).
The UAE has been working on nationalizing its human resource management due to the impacts of the new open economy and the activities of the foreign business firms. Foreign firms have been stereotyping the Emiratis which is the original population of the country. Emiratization is aiming nationalizing the human resource policies so that they can favor the original populates of the country. Iran has been working on improving the internal environment so that it can attract more people and organizations to invest in the country. The aim of this is to effect changes that will favor globalization. In other words, Iran is striving to fit into and meet the standards of international human resource management. On the other hand, UAE which has already fit into the globalized economy due to a good political system is striving to avert the effects of a globalized economy. It is thus re-adjusting its human resource management in what has been referred to as Emiratization (Rees, Mamman and Braik, pp. 33).
Lessons derived from the experience of each country
Most countries are working to develop human resource activities and upgrade them to the international standards. This is because of globalization which is pulling different economies together. Globalization has resulted in a sprout of different firms in different parts of the world for purposes of enhancing business. When the two countries are compared, it becomes evident that both countries are working towards improving HRM. Also, both countries are in one way or another constrained. Of the two countries – United Arab Emirates has gained much progress in adopting better HRM practices. Iran has to borrow form the UAE on the part of economic liberalization. UAE has upgraded its policies and shifted from dependence on a single sector in the economy. With the diversification of the economy, more firms have come in thereby making the country to adopt better human resource management practices by harmonizing the policies. On the other side, Iran has been having a rigid policy and a closed economy with most of its institutions being manned by the public sector. If Iran chooses ton go the UAE way, the HRM practices in the country will be greatly enhanced because there will be competition from many firms the firms leading to improved HRM approaches. Private firms aim to make profits thence they often come up with favorable policies of HRM which guides them in meeting the objectives( Branine, pp. 453).
Iran is one of the countries that have been witnessing strict regulation from the government. With the increased need for economies to allow for privatization, the policies of the country are not favorable to the development of better HRM policies. The regulation by the government of Iran in business is the major impediment to private firms in the country. The human resource management officers are limited in making individual policies that are liable in reaching better HRM. The other factor which hinder managers from developing better human resource management. Most people in the country are Muslims. They deeply practice Islam. Cultural factors associated with Islam combine with Islamism policies by the government to bring stiffen the environment of adopting and improving HRM (Punnett, pp. 63).
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