INTERNATIONAL

HUMAN RESOURCE
MANAGEMENT
&
CHALLENGES TO HRM
Presented by:-

Nishant

Priyanka

Ankit

Hitesh

Kanishka

Sachin

HUMAN RESOURCE
MANAGEMENT
HRM is the process of acquiring, training,
appraising and compensating employees as well as

attending to their labour relations, health & safety

and fairness concerns.

WHAT IS IHRM?
IHRM can be referred as set of activities aimed managing
organizational human resources at international level to
achieve organizational aims and to accomplish competitive
advantage over competitors at national and international
level.
According to Dessler IHRM is The human resource
management concepts and techniques employers use to
manage the human resource challenges of their international
operations.

OBJECTIVES OF IHRM
1. Create a local appeal without
compromising upon the global identity.

2. Creating awareness of cross-cultural

sensitivities among managers globally and
hiring of staff across geographic boundaries.

3. Training upon cultures and sensitivities of

the host country.

WHY IHRM???
Increasing globalization firms and employees in them moving all
over the world.
Major problems in international operations because of human
resource management.
The role of HR in International Operations.
Managing a Multicultural Workforce,
Developing Managerial Talent in a Global Business Environment.

FUNCTIONS OF IHRM
Recruitment

Dual Career
Groups

International
Industrial
Relations

Selection

Women in
International
Business

Trade Unions

Expatriates

Compensation

Participative
Management

Performance
Appraisal

Training and
Development

MAIN CHALLENGES OF IHRM

Different labour laws.
Different political climate.
Different stage(s) of technological advancement.
Different values and attitudes. E.g. time, achievement, risk taking.
Roles of religion. E.g. prayer, taboos, holidays, etc.
Educational level attained.
Social organizations. E.g. social institutions.

INTERNATIONAL HUMAN RESOURCE

MANAGEMENT PROCESS

HOW TO IMPLEMENT A GLOBAL

HR SYSTEM
Best practices for making a global HR system more
acceptable to local managers:
1. Remembering that global systems are more accepted in
truly global organizations.
2. Investigating pressures to differentiate and determine
their legitimacy.
3. Working within the context of a strong corporate culture
is best.

 Best practices for developing a more effective global HR

system:
Form global HR networks that make local HR managers a
part of global teams.
Remember that its more important to standardize ends
and competencies than specific methods.
Best practices for implementing the global HR system:
Remember, You cant communicate enough.
Dedicate adequate resources for the global HR effort.

Global HRM treat the entire world as one large country

activities to use its human resources effectively.

These activities include:

i.
ii.
iii.
iv.
v.
vi.

HR Strategy
Staffing
Performance Evaluation
Management Development
Compensation
Labour Relations, etc.

and carries out

Staffing policy is concerned with the selection of employees

for particular jobs.
i.
ii.

Selecting individuals who have the skill to do a particular

job.
Tool for developing and promoting the desired corporate
culture of the firm.

1. Ethnocentric Approach

2. Polycentric Approach

3. Geocentric Approach

All key management positions are filled by parent country

nationals.
Ones own culture is superior.
Overlooks important cultural factors.
Host country lacks qualified professionals.
Maintain a unified corporate culture.
Create value by transferring core competencies.
Limits advancement opportunities for host country nationals.
Leads to resentment, lower productivity, and high turnover in
employees.

Decentralized control.
Business Units in different countries have autonomy from home office,
like a local Co.
No standard forms or procedures.
Recruits host country nationals to manage subsidiaries, while parent
country nationals occupy key positions at corporate HQ.
Firm is less likely to suffer from cultural myopia.
Less expensive to implement.
Host country nationals have limited opportunities to gain experience
outside their own countries.
Gap due to language barriers, cultural differences may isolate corporate
HQ from foreign subsidiaries.

It seeks the best people for key jobs, throughout the organization,
regardless of nationality.
Hybrid of Ethnocentric and Polycentric approach.
Based on informed knowledge of home and host countries.
Enables firms to make best use of its HR.
Helps the firm to build a cadre of international executives, who feel at
home working in no. of countries.
Helps building a strong unifying corporate culture and informal
management network.
Reduces cultural myopia.
Enhance local responsiveness.

Expatriates are citizens of one country, who are working in another

country.
Inpatriates are citizens of a foreign country, working in the home
country of the multinational employer. (e.g., Citizen of India, who
moves to U.S to work for Microsoft)

Four dimensions that predict success in a foreign

posting:

Self orientation self esteem, self confidence, mental well being,

adapt their interest in food, sports, music and hobbies.
Others orientation ability to interact with host countrys nationals,
relationship development and willingness to communicate by learning
local language.
Perceptual ability to understand the particular behaviour of people in
host countries, empathise.
Cultural toughness relationship between country of assignment and
how well an expatriate adjusts

Four dimensions that predict success in a foreign

posting:
o

o
o

Self orientation self esteem, self confidence, mental well being,

adapt their interest in food, sports, music and hobbies.
Others orientation ability to interact with host countrys nationals,
relationship development and willingness to communicate by learning
local language.
Perceptual ability to understand the particular behaviour of people in
host countries, empathize.
Cultural toughness relationship between country of assignment and
how well an expatriate adjusts.

Inability of Spouse
to Adjust

Personality

Personal
Intentions

Family
Pressures

Why Expatriate
Assignments Fail

Inability to Cope
with Overseas
Responsibilities

Lack of
Cultural Skills

Realistic Previews

Careful Screening

Helping Expatriate
Assignments Succeed

Improved Orientation

Cultural and Language Training

Improved Benefits Packages

According to P. Morgan, International HRM is an interplay between 3 dimensions:-

HR activities
Types of employees
Country of operation

1) Broad activities of IHRM procurement, allocation and utilization of human

resources cover all the activities of domestics HRM i.e, HR planning, Employees Hiring,
Training and Development, Remuneration, Performance Management and Industrial
Relations.

2) The three national or country categories involved in IHRM activities :

The host country where subsidiary may be located.
The home country where the company has its head quarters.
Other countries that may be sources of labour or finance.

3) The three types of employees of an international business

Parent Country Nationals (PCNs)
Host Country Nationals (HCNs)
Third Country Nationals (TCNs)

i.
ii.

iii.
a)
b)
c)
d)
iv.
v.

Base Salary in same range as base salary for similar position in home
country.
Foreign Services Premium extra pay to work outside country of
origin; offered as inducements to accept foreign postings;
compensates for living in an unfamiliar country.
Allowances
Hardship allowance difficult location, where basic amenities like
health care, schools, etc. are deficient.
Housing allowance to afford same quality of housing
Cost of living allowance to maintain std. of living
Education Allowance expatriates children receive same std. of
education as in home country
Taxation
Benefits medical, pension, etc.

Parent-country nationals (PCNs)

Employees who were born and live in a parent country.
A parent (or home) country: the country in which a companys
corporate headquarters is located.
Host-country nationals (HCNs)
Employees born and raised in a host country.
Host country: a country in which the MNE seeks to locate or has
already located a facility.
Third-country nationals (TCNs)
Employees born in a country other than a parent or host country.

Home-Based Pay
Pay based on an expatriates home countrys compensation practices
Balance-Sheet Approach
A compensation system designed to match the purchasing power in a
persons home country
Calculate base pay
Figure cost-of-living allowance (COLA)
Add incentive premiums
Add assistance programs

More HR activities.
The need for a broader perspective.
More involvement in employees' personal lives.
Changes in emphasis with variable mix of expatriates and
locals in workforce.
Risk exposure
More external influences.