INTERNATIONAL HUMAN RESOURCE MANAGEMENT AND TRENDS

INTRODUCTION
International human resource management [IHRM] is about the worldwide mgmt of human resources. The purpose of IHRM is to enable the firm, the multinational corporation (MNCS), to be successful globally. IHRM is the most important critical success factor. IHRM requires a much broader perspective even for the most common HR activities. Internationalization of business now exerts influence not only on labour markets and staffing requirements but also on HR practices.

DEFINITION OF IHRM
International human resource mgmt is the process of sourcing, allocating and effectively utilizing human resource in a multinational organization. In global organizations human resource managers are required to achieve two conflicting strategic objectives.
Integrate human resource policies and practices across a number

of subsidiaries in different countries.

HRM practices sufficiently flexible to accommodate different

business and cultural setting.

Complications for IHRM compared to HRM

International HR managers face a more complex task

than their domestic counterparts because differing cultures, levels of economic development, and legal systems among countries may require companies to adapt their hiring, firing, training, and compensation programs to each country.

Contd
Firms must decide whether managers will be selected

from the home country, from the host country or from third countries.
Training and development in an international firm may be

more complex than in a domestic firm.

Compensation systems must be adapted to meet the needs

of each countrys labor market.

International Managerial Staffing Needs

There are two broad categories of staffing needs

facing international human resource managers: (1) recruiting, training, and retaining managerial and executive employees; and (2) recruiting, training, and retaining nonmanagerial employees such as blue-

collar production workers and white-collar office

staff.

Contd
For nonmanagerial employees, international firms

normally adapt their compensation and performance appraisal systems to local laws, customs, and cultures. The text notes for example, that while U.S. workers appreciate feedback from an appraisal system, German workers are resentful of feedback.

 As a firm further expands its operations in a global

Contd

organization, a team of managers with expertise in the firms

product lines, necessary functional skills, individual country markets, and the firms global strategy is usually assembled.

Firms that centralize decision making at headquarters

typically favor home-country managers while firms that

decentralize decision making to the subsidiary level often employ host country nationals

Classifying Employees
Managers can be hired from three groups:
Parent Country National (PCN)

Host Country National (HCN)

Third Country National (TCN)

Parent country nationals (PCNs)

PCNs also called expatriates, they are residents of the
international businesss home country who are transferred to one of its foreign operations.
Communications and coordination with corporate

headquarters is typically facilitated when PCNs are

employed because they normally share a common culture

and education background with headquarters staff.

Contd..
PCNs may however, lack knowledge of local laws,

culture, economic conditions, social structure, and political processes. Moreover, they may be expensive

to relocate and maintain the host country. In addition,

because a host country may impose restrictions on the number of employees that can be transferred, a company may not have the freedom to hire whom it wants.

Host country nationals (HCNs)

HCNs also called local nationals ,they are residents of

the host country, and are the most common choice for

mid-level and lower-level jobs. Employing HCNs is

popular because they are already familiar with local laws, culture, and economic conditions.

Third country nationals (TCNs)

TCNs are citizens of neither the firms home country

nor of the host country. TCNs are most likely to employed in upper-level or technical positions. TCNs and PCNs are collectively known as expatriates (people working and residing in countries other than their native country).

Approaches to ihrm
MNCs can approach the management of international
human resource in this four ways
Ethnocentric approaches Polycentric approaches Regiocentric approaches

Geocentric approaches

Four approaches to ihrm

Orientation Aspects of the enterprise HR Strategy Ethnocentric polycentric Regiocentirc Geocentric Uniform strategy across units Diverse strategies across units Regional integration of strategy, but differentiation across regions Coordination across countries in the region Little btw subsidiary & HQ medium to high among subsidiaries in region Global overarching strategy on key corporate issues but differentiated policies on more local issues Global as well as local standards and control

Performance By home evaluation and country HQ control Information and resource flows Mainly from HQ to local subsidiary

By local subsidiary mgmt Little among subsidiaries, little btw subsidiary and HQ

Inflows and outflows btw and among HQ and subsidiaries.

Staffing mix

Contd

Home country managers

Host country managers

Host country and third Best people country nationals where they can from within the region be best used Regional career paths and development Managers anywhere developed to work anywhere

Career Home country developme managers nt developed to work anywhere

Totally within subsidiary career paths and development

Purpose of the socializati on processes

Gain loyalty, commitment , and understanding of HQ

Gain loyalty and commitment to the subsidiary

Gain loyalty and commitment to the region

Gain loyalty, commitment , and understanding of total firm and its diverse units

Factors affecting the approaches to ihrm policies and legal regulations Political
Managerial, educational, and technological development in the

host country
Home and host country cultures International experience of the firm Method of subsidiary founding Technology and the nature of the product Organizational culture

International selection criteria

General and technical criteria
Language skills

Cross- cultural suitability

Motivation for a foreign assignment

Family situation

Belief in the mission Career path congruence Interest in host country Willing to adopt behavior &attitudes Willingness to go

Model for selecting expatriates

Technical skill & self confidence Managerial skill Host country operational knowledge Tolerance for ambiguity Behavior flexibility Cultural empathy Ability to reduce stress

Ability to do job

Ability to adapt

Positive family situation Interest/willingness of spouse & family to go overseas Adaptability of spouse & family

Ability to communicate Perceptual skill/flexibility Language ability Nonverbal communication ability

Ability to form relationship

The right person for foreign assgmnt

Interpersonal skills Relationship development

 Orientation programmes

International training & development

Pre-arrival orientation
Cultural briefing

i.

ii.
iii. i.

Assignment briefing
Shipping requirements Post-arrival orientation Cross cultural training Career development

International compensation
Depend on the expatriates
Additional incentives must be offered

It is better to avoid having expatriates fill the same

jobs held by local jobs.

International labour relations

The role of unions

Collective bargaining

Labour participation
Health and safety

Thank you