INTERNATIONAL Human

Resource Management
 Strategy Domestic International Multinational Global Transnational
(Exportive IHRM) (Adaptive IHRM) (Integrative IHRM)
Model Domestic International Multi-domestic Global Global
View of the Co-ordinated Decentralized Centralized Hub Integrated
world Federation Federation Network

View of the Home country Extension Markets National Markets Global Markets or Global
world Resources Markets
and
Resource
s
Orientation E E P Mixed G
Key Assets Located in home Core centralized, Decentralized and self All in home country Dispersed,
country others dispersed sufficient except interdepe
marketing/ ndent
sourcing and
specializ
ed
Role of Single country Adapting and Exploiting local Marketing or Contributions
country leveraging opportunities Sourcing to
Units competencies company
worldwid
e
Knowledge Home country Created at center and Retained within Marketing developed All functions
transferred operating units jointly and develope
shared d jointly
and
shared
 International

MNC

Global

Transnational
Recruitment

 E - PCN

 P - HCN

 R – HCN, PCN

 G – HCN, PCN,TCN
Issues

 Technical ability
 Country-cultural requirements-language
 Family requirements
 Cross-cultural suitability
Training& Development

 In-house training (Disney University)

 Preliminary visits
 Language training
 Cultural awareness
Cross-Cultural Training
 Frog Shock

 May have to train spouse table manner !

 A Japanese may often say yes when he means no

 Arab will treat perfumes for wife as insult; Japanese,

Chinese and Koreans consider red scarves as
auspicious
Cross-Cultural Training

 Once a deal is signed don’t forget to

compliment the American on the size of his
corporation, the Japanese on his product, the
German on his plant, the Italian on his
design, and the Frenchman on his wife’s
elegance just before you say goodbye,
sayonara, ciao, or au revoir like the trained
cross-cultural manager you are.
Issues in PA

 Who would appraise?- geographical

distance, local considerations
 Time interval of appraisal
 Criteria for appraisal- task
 Other issues – head-quarter’s support, host
environment, cultural adjustment phases
Key components of an international
compensation program
 Base Salary
 Foreign Service inducement/ hardship premium- 5% to 40%
of base pay
 Allowances-
 Housing allowance
 Home leave allowance
 Education allowance
 Relocation allowance – moving, shipping, storage
charges, temporary living expenses, subsidies regarding
appliances or car purchases, lease-related charges
 Spouse assistance
Approaches to international
compensation -
 Going rate approach –
 Based on local market rates
 Relies on survey comparisons
 Local nationals (HCNs)

 Expatriates of same nationality

 Expatriates pf all nationalities

 Compensation based on the selected survey comparison

 Base pay and benefits may be supplemented by additional
payments for low-pay country
Advantages and disadvantages of Going
rate..
 Advantages
 Equality with local nationals (Japanese bank operating in US need
to decide the reference point: US local banks, New York
competitive banks, all foreign banks operating in NEW York)
 Simplicity
 Identification with host country
 Equity amongst different nationalities

 Disadvantages
 Variation between assignments for same employee
 Variation between expatriates of same nationality between
different countries
 Potential re-entry problem
Balance Sheet Approach-

 Basic objective is maintenance of home-country living

standards, plus financial inducements

 Home-country pay and benefits are the foundations of this

approach

 Adjustments to home package to balance additional

expenditure in host country

 Financial incentives (expatriate/ hardship premium) added to

make the package attractive

 Most common system in usage by multinational firms

Advantages and disadvantages of
Balance Sheet..
 Advantages
 Equity
 Between assignments
 Between expatriates of the same nationality
 Facilitates expatriate re-entry
 Easy to communicate to employees

 Disadvantages
 Can result in disparities between expatriates of different
nationalities; between expatriates and local nationals
 Can be quite complex to administer