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    Ihrm Slim

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    Pragya Bhawsar
    The document discusses international human resource management (IHRM). It defines IHRM as procuring, allocating, and utilizing human resources in an international business. It discusses the need for IHRM due to factors like globalization and multinational corporations. It also discusses reasons for growing interest in IHRM and provides a model of IHRM involving different types of employees and countries. Key HR activities in IHRM are discussed along with comparing domestic HRM and IHRM.

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    Ihrm Slim

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    Pragya Bhawsar
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    The document discusses international human resource management (IHRM). It defines IHRM as procuring, allocating, and utilizing human resources in an international business. It discusses the need for IHRM due to factors like globalization and multinational corporations. It also discusses reasons for growing interest in IHRM and provides a model of IHRM involving different types of employees and countries. Key HR activities in IHRM are discussed along with comparing domestic HRM and IHRM.

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    The document discusses international human resource management (IHRM). It defines IHRM as procuring, allocating, and utilizing human resources in an international business. It discusses the need for IHRM due to factors like globalization and multinational corporations. It also discusses reasons for growing interest in IHRM and provides a model of IHRM involving different types of employees and countries. Key HR activities in IHRM are discussed along with comparing domestic HRM and IHRM.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    130 views32 pages

    Ihrm Slim

    Uploaded by

    Pragya Bhawsar
    The document discusses international human resource management (IHRM). It defines IHRM as procuring, allocating, and utilizing human resources in an international business. It discusses the need for IHRM due to factors like globalization and multinational corporations. It also discusses reasons for growing interest in IHRM and provides a model of IHRM involving different types of employees and countries. Key HR activities in IHRM are discussed along with comparing domestic HRM and IHRM.

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    INTERNATIONAL HUMAN RESOURCE MANAGEMENT

    Pragya Bhawsar Institute of Management Nirma University

    Definition
    The process of procuring, allocating and effectively utilising human resources in an international business is called international human resources management (IHRM).

    Need for IHRM


    Globalization Multinational Corporations Human Resource as Competitive edge

    Reasons for Growing Interest in IHRM

    Globalisation of Business

    Effective HRM determinant of success in international business

    Indirect costs of poor performance in international business very costly

    Movement to network organisations from traditional hierarchical structures

    Significant role in implementation & control of strategies

    Model of IHRM
    HR Activities
    Procure Utilise Allocate

    Types of employees

    Home country nationals Host country nationals Third country nationals

    Countries

    Home country Host country Third country


    4

    Domestic HRM and IHRM Compared


    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


    5

    More Human Resource Activities


    Human Resource Planning
    Employee Hiring
    Difficulty in implementing HR in host countries Aligning strategic business planning to HRP & vice-versa Developmental opportunities for international managers.

    Ability to mix with organisations culture Ethnocentric, polycentric or geocentric staffing approach Selection of expatriates Coping with expatriate failure Managing repatriation process

    Training & Development

    Emphasis on cultural training Language training Training in manners & mannerisms


    6

    Compensation

    Devising an appropriate strategy to compensate expatriates Minimising discrepancies in pay between parent, host & third country nationals Issues relating to the re-entry of expatriates into the home country

    Performance Management

    Constraints while operating in host countries need to be considered Physical distance, time differences & cost of reporting system add to the complexity

    Industrial Relations

    Handling industrial relations problems in a subsidiary Attitude of parent company towards unions in a subsidiary Union tactics in subsidiaries

    Need for Broader Perspective


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

    Health insurance for employees & their families Nepotism common in small businesses in Asia Pacific region Overtime working Korean & Japanese firms Promotions based on seniority or merit
    8

    More Involvement in Employees Personal Lives More involvement for both parent-country & thirdcountry nationals Housing arrangements Health care Remuneration packages Assist children left behind in boarding schools

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

    Risk Exposure

    Physical safety of the employees Terrorism poses a great threat Failure of expatriates to perform well financial losses to the firm Seizure of MNCs assets in a foreign country

    External Influence

    Dealing with ministers, political figures, economic & social interest groups Hiring procedures dictated by host country Catch up with local ways of doing business
    10

    Basic Steps in IHRM


    HRP
    Recruitment & Selection
    Training & Development Performance Management Remuneration Repatriation

    Employee Relations Multicultural Management

    11

    HR Planning
    Key Issues in International HRP Identifying top management potential early Identifying CSF for future international managers Providing developmental opportunities Tracking & maintaining commitment to individuals in international career paths Tying strategic business planning to HRP & vice-versa Dealing with multiple business units while focusing on global & regional strategies
    12

    Recruitment & Selection


    Ethnocentric Approach Key management positions held by parent-country nationals Appropriate during early phases P&G, Philips Polycentric Approach Host-country nationals hired to manage subsidiaries Parent-country nationals occupy key positions at corporate HQ HUL Geocentric Approach Seeks best people for key jobs, irrespective of nationality Underlying principle of a global corporation ColgatePalmolive 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

    3 categories of employees can be hired parent country nationals (PCNs), host country nationals (HCNs) & third country nationals (TCNs)
    13

    Advantages & Disadvantages of Using PCNs


    Advantages Familiarity with home office, goals, practices Easy organisational control & coordination International exposure to promising managers PCNs special skills & experiences Disadvantages
    Difficulty in adapting to foreign country Excessive cost of selecting, training & maintaining expatriates Promotional opportunities limited for HCNs May try to impose inappropriate HQ style Compensation differences for HCNs & PCNs Family adjustment problems

    14

    Advantages & Disadvantages of Using HCNs


    Advantages
    Familiarity with the situation in host-country Lower hiring costs Locals motivated due to promotional opportunities Responds well to localisation of subsidiarys operations No language barrier HCNs stay longer in positions

    Disadvantages
    Difficulty in exercising effective control over the subsidiarys operations Communication problems with home office personnel No opportunity for home countrys nationals to gain international experience Limited career opportunity outside the subsidiary
    15

    Advantages & Disadvantages of Using TCNs


    Advantages Salary & benefit requirements lower than that of PCNs May be better informed about host country environment Truly international managers Disadvantages Host country govt. may resent hiring TCNs May not return to their country after assignment Host countrys sensitivity w.r.t nationals of specific countries

    16

    Expatriate Assignment Life Cycle


    Determining the need for an expatriate Crisis & Adjustment Reassignment Abroad

    Departure

    Post-arrival Orientation & Training

    Repatriation & Adjustment

    Selection Process

    Pre-assignment training

    Crisis & Failure

    17

    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

    18

    Culture Shock Cycle

    19

    Family Reqments Technical Ability


    Individual Situation

    Crosscultural Suitability Expatriate Selection MNC Reqments

    Countrycultural Reqments Language

    20

    Training & Development


    Cross Cultural Training Language Training

    Practical Training

    Management Development & Strategy

    21

    HCN Training
    Gaining knowledge about parent organisation Technical knowhow specific to organisation General awareness of the parent country cultural norms
    22

    Role of the subsidiary in the MNC

    Expatriate Performance Management


    Linkage to organisational strategy

    Setting individual performance goals

    Identifying variables impacting performance

    Providing opportunities for improvement

    Providing regular feedback on progress towards goals

    Appraising the performance

    Linking results with rewards


    23

    Setting Individual Performance Goals Variables Impacting Performance

    Link unit goals to individual/team goals This will offer benchmarks for employees to strive towards excellence

    Compensation packages Type of task Moral & physical support Host environment Multicultural adjustability
    24

    Paying Expatriates
    Objectives to be achieved
    Attract qualified & interested employees Facilitate movement of expatriates between subsidiaries Consistent & reasonable relationship between pay levels Cost-effective

    Problems faced in deciding remuneration package


    Discrepancies in pay between parent, host & third country nationals Vary compensation based on family situation of expat Remuneration when re-entering parent-country organisation Must accommodate changes in international business environment
    25

    Components of Remuneration Package


    Base salary Benefits Allowances Incentives Taxes Tax equalisation Tax protection

    Factors Influencing Compensation


    Internal Environment
    Goal Orientation Capacity to pay Competitive strategy Organisational culture Internal workforce composition Labour relations Subsidiary role

    External Environment
    Parent nationality Labour market characteristics Local culture Home & host country govts role Industry type Competitors strategies

    26

    Repatriation
    The activity of bringing the expat back to the home country Can cause re-entry shock or reverse culture shock Reasons
    Posting period over Childrens education Not happy with overseas assignment Failure to do a good job
    Preparation

    Physical Relocation

    Transition

    Readjustment

    27

    Types of Assignments
    Business Visits Min. Duration 1-30 days Short-term 1-3 months Commuter Returns home at regular intervals Long-term 6-12 months

    Max. Duration

    183 days

    6-12 months

    2-4 years

    3-5 years

    Short term assignments

    Advantages

    Disadvantages

    Employee less restricted by family concerns Spouses career unaffected Generally less expensive

    Family split Identical benefits taxed differently in home & host


    28

    Commuter assignments

    Advantages Childrens education undisturbed Spouses career unaffected


    Long term assignments

    Disadvantages Big strain on family relations if more than 1 year

    Advantages Family remains together All emoluments subject to a single tax legislation

    Disadvantages Spouses career affected Childrens education disturbed Loss of support from relatives & friends

    29

    International Labour Relations


    Handling Labour Issues Delegated to foreign subsidiaries Labour relations centralised when inter-subsidiary production integration is present Depends on nationality of ownership of subsidiary More intervention when subsidiary is of strategic importance Union Tactics Strike most common tactic International Trade Secretariats (ITS) Lobbying for restrictive national legislations Intervention of ILO, UNCTAD, EU & OECD Principles of ILO Freedom of associations Right to organise & collectively bargain Abolition of forced labour Non-discrimination in employment
    30

    Power Distance

    Uncertainty avoidance

    Hofstedes Cultural Dimensions

    Individualism

    Masculinity

    31

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