INTERNATIONALHUMAN RESOURCE

MANAGEMENT

Submitted By- Manisha Gupta MBA-4A 02614803912

What is IHRM?• IHRM can be defined as set of activities aimed

managing organizational human resources at international level to achieve organizational objectives and achieve competitive advantage over competitors at national and international level.

• IHRM includes typical HRM functions such as recruitment, selection, training and development, performance appraisal and dismissal done at international level and additional activities such as global skills management, expatriate management and so on.

OBJECTIVES OF IHRM

• Create a local appeal without compromising upon the global identity.

• Generating awareness of cross cultural sensitivities among managers globally and hiring of staff across geographic boundaries.

• Training upon cultures and sensitivities of the host country.

NEED FOR IHRM

• Managing expatriates• Globalization has forced HRM to have

international orientation• Effectively utilise services of people at both

the corporate office and at the foreign plants

FUNCTIONS OF IHRMRECRUITMENT

SELECTION

EXPATRIATES

PERFORMANCE APPRAISAL

TRAINING AND DEVELOPMENT

COMPENSATION

WOMEN IN INTERNATIONAL BUSINESS

DUAL CAREER GROUPS

INTERNATIONAL INDUSTRIAL RELATIONS

TRADE UNIOUNS

PARTICIPATIVE MANAGEMENT

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More HR activities

Need for a broader perspective

More involvement in employee personal lives

Changes in emphasis as the workforce mix of expatriates and locals vary

Risk exposure

More external influences

Characteristics of IHRM

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More Human Resource Activities• Difficulty in implementing HR in host

countries• Developmental opportunities for

international managers.

Human Resource Planning

• Ability to mix with organisation’s culture• Ethnocentric, polycentric or geocentric

staffing approach• Selection of expatriates• Managing repatriation process

Employee Hiring

• Emphasis on cultural training• Language training• Training in manners & mannerisms

Training & Developme

nt

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• Devising an appropriate strategy to compensate expatriates

• Minimising difference in pay between parent, host & third country nationals

• Issues relating to the re-entry of expatriates into the home country

Compensation

• Constraints while operating in host countries need to be considered.

• Physical distance, time differences & cost of reporting system add to the complexity.

Performance Managemen

t

• Handling industrial relations problems in a subsidiary.

• Attitude of parent company towards unions in a subsidiary

Industrial Relations

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Pay issues

• Different countries, different currencies• Gender based pay in Korea, Japan, Indonesia

Health insurance for employees & their families

Overtime working – Korean & Japanese firms

Promotions based on seniority or merit

Need for Broader Perspective

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•More involvement for both parent-country & third-country nationals•Housing arrangements•Health care•Remuneration packages•Assist children left behind in boarding schools

More Involvement

in Employee’s Personal Lives

•Need for parent-country & third-country nationals decrease as more trained locals become available.•Resources reallocated to selection, training & management development

Changes in emphasis as the workforce mix of expatriates and locals vary

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•Physical safety of the employees.•Failure of expatriates to perform well financial losses to the firm

Risk Exposur

e

•Dealing with ministers, political figures, economic & social interest groups•Hiring procedures dictated by host country.•Catch up with local ways of doing business.

External Influenc

e

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Reasons for Growing Interest in IHRM

Globalisation of Business

Effective HRM determinant of

success in international business

Movement to network organisations

from traditional hierarchical structures

Significant role in implementation &

control of strategies

STAFFING POLICIES IN IHRM• Ethnocentric: Here the Key management positions are

filled by the parent country individuals. • Polycentric: In polycentric staffing policy the host

country nationals manage subsidiaries whereas the headquarter positions are held by the parent company nationals.

• Geocentric: In this staffing policy the best and the most competent individuals hold key positions irrespective of the nationalities.

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Recruitment & SelectionEthnocentric

Approach

• Key management positions held by parent-country nationals

• Appropriate during early phases.

Polycentric Approach

• Host-country nationals hired to manage subsidiaries

• Parent-country nationals occupy key positions at corporate HQ.

Geocentric Approach

• Seeks best people for key jobs, irrespective of nationality

• Underlying principle of a global corporation

Regiocentric Approach

• Variation of staffing policy to suit particular geographic areas

• Provides a 'stepping stone' for a firm wishing to move from an ethnocentric or polycentric approach to a geocentric approach

categories of employees can be hired – parent country nationals (PCNs), host country nationals (HCNs) & third country nationals (TCNs)

IHRM MODEL

How It Is Different from Domestic HRM

• Domestic HRM is done at national level and IHRM is done at international level.

• Domestic HRM is concerned with managing employees belonging to one nation and IHRM is concerned with managing employees belonging to many nations (Home country, host country and third country employees)

• Domestic HRM is concerned with managing limited number of HRM activities at national level and IHRM has concerned with managing additional activities such as expatriate management.

• Domestic HRM is less complicated due to less influence from the external environment. IHRM is very complicated as it is affected heavily by external factors such as cultural distance and institutional factors.

ACTIVITIES INVOLVED IN IHRM

ISSUES IN IHRM

• Managing International Assignments• Employee and Family Adjustments• Selecting the right person for foreign

assignments• Culture and Gauge• Language and Communication

EFFECTIVE IHRM IMPLEMENTATION

The following checklist identifies some of the critical decisions/actions required in the formulation and implementation of an effective IHR strategy.

1. As certain the current and intended nature of international operations in the organisation (multi-domestic, international, global or transnational?)

2. Determine the extent to which HR policies and practices should be standardised or localised in accordance with overall organisational strategy.

3. Assess the extent to which local cultural, social, political, economic and legal factors will impinge on any attempts to apply standard HR policies if integration is a key factor in organisational strategy.

4. Ensure a computerised database of global human resources is used if integration is desired.

5. Work with the senior management team to identify the competencies required to achieve global organisational objectives.

6. Work with national HR and line managers to formulate IHR policies and practices in the key areas of sourcing, development and reward which will embed a transnational mindset in the organisation.

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Expatriate Assignment Life CycleDetermining the

need for an expatriate

Selection Process

Pre-assignment training

DeparturePost-arrival

Orientation & Training

Crisis & Adjustment

Crisis & Failure

Repatriation & Adjustment

Reassignment Abroad

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Expatriate Failure

Premature return of expatriates to their home country

Reasons

• Inability to adjust to host country culture leads to culture shock• Personal & emotional problems• Difficulties with the environment• Inability to cope with larger international responsibilities• Other family reasons

THANK YOU