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Global Human Resource

Management

12/21/2017 BBA 308 1

Human Resource Management

It refers to the activities an organization carries out to use its
human resources effectively.

These activities include:

• Determine firm’s HR strategy
• Staffing
• Performance Evaluation
• Management Development
• Compensation
• Labour relations

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Importance of HRM Related to the strategy of the firm. quality and productivity of firm’s HR Helps firms to achieve strategic goal of reducing cost of value Creation Helps firms add value by serving customer needs better. Influence on the character. development. 12/21/2017 BBA 308 3 .

cultural barriers • Different management styles • Varied compensation practices Labour laws. 12/21/2017 BBA 308 4 . economic. How different is Global HRM? • Several key factors make Global HRM different from domestic management: • Different labour markets • Mobility problems: legal.

who can do business in different countries? • How to compensate people in different nations? • How to evaluate the performance of managers in different countries? • Expatriate managers 12/21/2017 BBA 308 5 . Key Issues • How to staff key management posts in the Co.? • How to develop managers.

8 12/21/2017 BBA 308 6 . • Behaviour. firm wants to encourage. • Compensation must create incentives for actions inline with the strategy. • Right people at right postings. • Performance appraisal to measure the behavior. congruent with the desired organizational culture. • Effective training to acquire right skill set to help perform jobs effectively. Strategic Role of Global HRM • Strategy is implemented through organizational architecture.

• Tool for developing and promoting the desired corporate culture (norms & value system) of the firm. 12/21/2017 BBA 308 7 . • Selecting individuals who have the skill to do a particular job. Staffing Policy Staffing policy is concerned with the selection of employees for particular jobs.

Ethnocentric approach iii. Geocentric approach 12/21/2017 BBA 308 8 . Types of staffing policies There are three types of staffing policies in IB: ii. Polycentric approach iv.

• E. • One’s 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. Ethnocentric approach • All key management positions are filled by parent – country nationals. Toyota and Matushita 12/21/2017 BBA 308 9 . lower productivity.g. and high turnover in employees.: Procter & Gamble.

• No standard forms or procedures • Recruits host country nationals to manage subsidiaries. • 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. while parent country nationals occupy key positions at corporate HQ. 12/21/2017 BBA 308 10 . Polycentric approach • Decentralized control • Business Units in different countries have autonomy from home office. like a local Co. • Firm is less likely to suffer from cultural myopia.

• Enables firms to make best use of its HR • Helps the firm to build a cadre of international executives. • Reduces cultural myopia • Enhance local responsiveness 12/21/2017 BBA 308 11 . • Helps building a strong unifying corporate culture and informal management network. of countries. Geocentric approach • It seeks the best people for key jobs. throughout the organization. • Hybrid of Ethno and Poly • Based on informed knowledge of home and host countries. regardless of nationality. who feel at home working in No.

citizen of India..S to work for Microsoft) 12/21/2017 BBA 308 12 . who are working in another country. • Impetrates is a subset of expatriates who are citizens of a foreign country. Expatriate Managers • Expatriates are citizens of one country. (e.g. working in the home country of their multinational employer. who moves to U.

adapt their interest in food. empathize. relationship development and willingness to communicate by learning local language. self confidence. • Cultural toughness – relationship between country of assignment and how well an expatriate adjusts 12/21/2017 BBA 308 13 . music and hobbies. mental well being. sports. • Others orientation – ability to interact with host country’s nationals. • Perceptual ability – to understand the particular behavior of people in host countries. Expatriate selection Four dimensions that predict success in a foreign posting: • Self orientation – self esteem.

and helps reinforce desired culture of the firm by creating an informal network. e. • To enhance management and leadership skills of executives • MDP have a strategic purpose. the next step is training the manager to do the specific job.g. it is intended to develop a manager’s skills over her career in the firm. 12/21/2017 BBA 308 14 . sending managers on various foreign postings over years to build her cross cultural sensitivity and experience. Training and Management Development • After selection. • MDP is a broader concept..

• Language training – manager’s ability to interact. Types of Training • Cultural training – understanding the culture of host country. familiarization trip before formal transfer. • Practical training – adjust to day to day life in host country. enhance effectiveness. help build rapport and improve manager’s effectiveness. establish a routine. successful adaptation. support network of friends 12/21/2017 BBA 308 15 .

II. V.Host country managers and home country managers. Due to proximity. Performance Appraisal • These are the systems used to evaluate the performance of managers against some criteria. . that the firm judges to be important for the implementation of strategy and attainment of competitive advantage. Biasness by cultural frame of reference and expectations III. onsite manager should evaluate soft variables of expatriate’s performance. 2 groups evaluate the performance of Expatriates. 12/21/2017 BBA 308 16 . Consultation of home country manager to balance out. • Important elements of control system: I. Unfair evaluation IV.

How compensation should be adjusted to reflect national differences in economic circumstances and practices? 2. • Issues in compensation practices: 1. Compensation • National differences in compensation • Payments according to global standards or country specific standards. How should the expatriate managers be paid? 12/21/2017 BBA 308 17 .

it equalizes purchasing power across countries so employees can enjoy the same living standard in their foreign posting. as the enjoyed at home. • It also provides financial incentives to offset qualitative differences between assignment locations. Expatriate Pay • Acc. To “Balance Sheet Approach”. 12/21/2017 BBA 308 18 .

• Foreign Services Premium – extra pay to work outside country of origin. Cost of living allowance – maintain std. Components of a typical compensation package • Base Salary – in same range as base salary for similar position in home country. pension. Compensates for living in an unfamiliar country. of education as in home country • Taxation • Benefits – Medical. etc are deficient. Education Allowance – expatriate’s children receive same std. Offered as inducements to accept foreign postings. where basic amenities like health care schools. Hardship allowance – difficult location. 12/21/2017 BBA 308 19 . Housing allowance – to afford same quality of housing III. of living IV. II. etc. • Allowances – I.

Thank You… 12/21/2017 BBA 308 20 .