DEFINITION OF GLOBAL HUMAN RESOURCE MANAGEMENT / IHRM

- The process of employing, developing and rewarding people in international or global

organization. An organization in which operations takes place subsidiaries overseas. Or
manages its business internationally.
- It combines knowledge of business, culture, history and social practices to help companies
find their niches in the international community.

WHAT IS GHRM

- As a field of understanding, researching, applying and revising all human resource activities
in their internal and external contexts as they impact the process of managing human
resources in enterprises throughout the global environment to enhance the experience of
multiple stakeholders, including investors, customers, employees, partners, suppliers,
environment and society.

STRATEGIC OBJECTIVE OF GHRM/IHRM

- Problem of integration (HQ to subsidiary)

- Problem of differentiation.
- Involves constantly changing perspectives
- Requires more involvement in employee’s personal lives.
- Is influenced by more external sources
- Involves a greater level of risk than typical domestic HRM

Global Human resource management (GHRM) refers to the activities an organization carries out to
utilize effectively its human resources in internationally.

These activities include:

- determining the firm's human resource strategy

- staffing
- performance evaluation
- management development
- compensation
- labor relations
DIFFERENCES & SIMILARITIES HRM VS GHRM

DIFFERENCES BETWEEN DOMESTIC AND INTERNATIONAL HRM

- Responsibility for greater number of activities

- Need for greater level of expertise (e.g. employment laws)
- Necessity for closer involvement with employees (e.g. expatriate families
 - Greatly expanded and different mix of employees
- Having to deal with more external influences
- Having to face greater exposure to problems and difficulties

RECRUITMENT/SELECTION IN INTERNATIONAL STAFFING POLICY

1. Types of Global Staff Members

- Expatriate

An employee who is relocated from his/her mother country to work at one of the
subsidiaries of the company abroad or at Corporate Headquarters for a period exceeding
one year.

- Host-country national

Employee’s nationality same as location of subsidiary.

- Third-country national
Citizen of one country, working in second country, and employed by organization
headquartered in third country.

2. Approaches to GHRM/IHRM

- Ethnocentric.
The MNC simply exports HR practices and policies from home contrary to Subsidiaries in
foreign location.
- Polycentric
HR policies are adapted to meet the circumstances in each foreign country. The subsidiaries
are basically independent from headquarters.
- Regiocentric
HR policies are coordination within the region to as great extent as possible.
- Geocentric.
HR policies are developed to meet the goals of global network of home country locations
and foreign subsidiaries.

FACTORS AFFECTING GHRM/IHRM

- Cultural Factors
- Economic Risk
- Economic Systems
- Legal environment and Industrial Relation
- Multi-National Employer
- Multicultural workforces
- Expatriate work assignment
CRITERIA FOR SELECTION OF EMPLOYEES FOR FOREIGN ASSIGNMENTS

- Competency in the employee’s area of expertise.

- Ability to communicate verbally and nonverbally in the foreign country.
- Flexibility, tolerance of ambiguity, and sensitivity to cultural differences.
- Motivation to succeed and enjoyment of challenges.
- Willingness to learn about the foreign country’s culture, language, and customs.
- Support from family members.

STAGES IN EXPATRIATION SELECTION

EXPATRIATE PREPARATION AND DEVELOPMENT PROGRAM

COMPENSATING EXPATRIATES

• The “Balance Sheet Approach”

- Home-country groups of expenses—income taxes, housing, goods and services, and

discretionary expenses—are the focus of attention.
- The employer estimates what each of these four expenses is in the expatriate’s home
country, and what each will be in the host country.
- The employer then pays any differences such as additional income taxes or housing
expenses.

COMPENSATION FOR HOST-COUNTRY NATIONALS

Factors to consider:

a. Minimum wage requirements which differs from country to country.

b. Working time information and holidays

c. Overtime payments and restrictions

d. Benefits and severance practices

FIVE MAIN FUNCTIONS OF GLOBAL HUMAN RESOURCE MANAGEMENT?

- Staffing and Recruitment

The primary functions of human resource managers involve the recruitment, hiring and retention of
skilled and qualified employees. The tasks involved in executing these functions include preparing a
job description, interviewing potential candidates, extending employment offers and discussing
compensation packages. International human resource operations call for a complete understanding
of the occupational methods required in each region, an assessment of the skill levels and
availability required to carry out the job tasks, and the physical and educational abilities of the local
workforce.

- Salaries and Compensation Packages

Globalization has forced human resource managers to adapt to new methods of offering
compensation and benefits to a company's employees. The balance between compensation and
benefits for the firm's employees is a crucial human resources function that involves developing an
awareness of the desires and needs of a diverse workforce. Human resource management also
involves educating employees about nontraditional benefits packages, such as telecommuting, flex
time, parental leave for parents of newborns and tuition compensation for adult students.

- Training and Development

The training and development of employees is crucial to their professional success. Human resource
managers must ensure that employees have the time and materials to learn about the company's
processes and methods. For companies undergoing globalization, human resource managers must
also carry out the function of teaching employees about the legal and cultural differences in their
new environments. An effective training program can increase the efficiency of operations in
multiple locations and reduce the dangers that can arise from cultural miscommunications.

- Administrative Tasks

Human resource managers must understand how to accomplish the various administrative tasks that
come with overseeing a global workforce. Human resource staffers often act as a buffer between
management's decisions and the impact on employees. These staffers must communicate the
processes behind payroll enrollment, expense reports, vacation time and health insurance benefits
to employees when they come on board and when management decides to change these
procedures. They must also deal with reassigning or terminating employees whose job functions are
no longer required.

- Legal Compliance

A major function of human resource management in a global company involves an understanding of

local labor laws that regulate practices such as minimum wage, workweek hours, health benefits and
paid vacations. Human resource managers must also develop an understanding of employment tax
law in their jurisdiction. National, regional and local governments may choose to impose
employment taxes on the company, so the human resources manager must grasp these laws and
communicate their impact to senior management.