INTERNATIONAL

HUMAN
RESOURCE
MANAGEMENT
SURAJ MAURYA
 INTRODUCTION

 IHRM is a process of Procurement, allocation, utilization and motivation of Human

Resources in International business.

 IHRM includes typical HR functions such as recruitment, selection, performance

management, training and development and remuneration however these are
analyzed and or managed at an international level.

 E.g. companies may advertise positions globally or updating their policies following a
review of international best practices.
 MODELS OF IHRM

•PROCURE
HR •UTILIZE
ACTIVITIES •ALLOCATE

•PCNs

IHRM TYPES OF
EMPLOYEES
•HCNs
•TCNs

•HOME COUNTRY
COUNTRIES
•HOST COUNTRY
•THIRD COUNTRY
 International Human Resource Management Features

. It is pervasive in nature as it is present in all enterprises.

 Its focus is on results rather than on rules.

 It tries to help employees develop their potential fully.

 It encourages employees to give their best to the organization.

 It is all about people at work, both as individuals and groups.

 It tries to put people on assigned jobs in order to produce good results.

 It helps an organization meet its goals in the future by providing for competent and well-motivated
employees.

 It tries to build and maintain cordial relations between people working at various levels in the organization.

 It is a multi-disciplinary activity, utilizing knowledge and inputs drawn from psychology, economics, etc.
 Diff erences between domestic HRM and International HRM
(IHRM) are summarized below:

  D om es t ic H R M is don e at na t i ona l le vel and I H R M i s d one a t in te r na ti ona l l eve l.

  D om es t ic H R M is conc e r ned w it h m a na gi ng e mp loye e s b el ong ing t o one na t ion an d

I HRM is c onc e r ned w it h m a na gi ng em p loye e s b el ong ing t o ma ny na t i ons ( H om e
co unt r y, hos t c ount r y a nd t hir d c ount r y e m pl oye es )

  D om es t ic H R M is conc e r ned w it h m a na gi ng l im it e d numb e r of H RM ac ti vi t ie s a t

nat i ona l le ve l a nd I H R M ha s co nce r ned wi th ma na g ing a d di t iona l a c ti vi ti e s s uch a s
exp a tr i a te m a na ge me nt .

  D om es t ic H R M is le s s co mp li c a te d d ue to le s s i nfl ue nc e f ro m the e xt er na l
env ir onm ent . I H R M is ver y c om pl ic a t ed a s i t i s a ff e ct ed he avi ly b y e xt er na l f ac t or s
s uch as cul t ura l di s t anc e a nd i nst i tut i ona l f ac t or s.
 Functions of IHRM /ROLES

Functions of IHRM

Professional Benefits and Ensuring Legal

Recruitment Training
Development Compensation Compliance
 ACTIVITIES OF IHRM

 STAF FI NG

 R ECR U IT MENT A ND SE LECT ION S

 MA NAG I NG EXPARTR I AT ES

 TR A I NI NG AN D D EVE LEOP ME NT

 PER F ORMA NCE MAN AGE ME NT

 INTERNATIONAL HUMAN RESOURCE PLANNING

 Human Re s our ce Pl a nni ng- H RP a s a pr oc e ss by whi ch a n o rg a niz at i on s ho uld m ove

fr o m it s c urr e nt m a np o wer po si t ion s to i ts de s ir e d ma np owe r p os i ti on.

 HR P is t he pr oc e s s b y w hi ch a n o rg a ni z a ti on en sur e s t ha t i t ha s r i ght numb e r a nd ki nd

of p e opl e , at t he r i ght p l ac e, a t the r i ght t i me .

 HR P i s the p ro ce s s o f s ys t em a t ic a ll y r ev ie wi ng H R r e qui r em e nts t o ens ur e t ha t t he

r eq uir e d num b er of e mp loye e s wi th t he r e qui r ed s ki ll s i s ava il a bl e w hen t hey a r e
nee d ed . G et t ing t he r i g ht numb e r of q ual i fi e d p eo pl e i nto t he r i ght ji b i s t he cr ux of
the p r ob le m he re .
 Human Resource Planning at Diff erent Levels

H uma n r es ourc e pl an nin g is done a t va ri ous le vel s f or the ir own p ur poses by va riou s
ins ti tu ti on s. Th er e a r e va riou s l eve ls of hu m an re sou rc e p la nn in g i n a n in dus tr ia l ent er pri se :

 Na ti ona l L evel

 Se ctora l L e vel

 Indu st r y L eve l

 Uni t L eve l

 D epa r t m en ta l L evel

 J ob L e vel
 INTEGRATED STRATEGIC PLANNING AND HR

Development and knowledge of organization’s overall purpose or mission or goals and

objectives.

Providing inputs by HR manager regarding key HR areas, capabilities and constraints of HR

and environment to corporate strategists.

The corporate strategists in turn communicate their needs and constraints to the HR manager.

Integration of HR and other functional plans

 NEED FOR HUMAN RESOURCE PLANNING

 Rep l a ce me nt of Pe r s ons

 La bour Tur nover

 Exp a ns ion P l ans

 Technol og ic a l Cha nge s

 As s e ss i ng Ne ed s
OBJECTIVES OF HUMAN RESOURCE PLANNING

T h e fo l l o w i n g a r e t h e o b j e c t i ve s o f h u m a n r e s o u r c e p l a n n i n g :

 1 . A s s e s s i n g m a n p o w e r n e e d s fo r f u t u r e a n d m a k i n g p l a n s fo r r e c r u i t m e n t a n d s e l e c t i o n .

 2 . A s s e s s i n g sk i l l r e q u i r e m e n t i n f u t u r e fo r t h e o r g a n i z a t i o n .

 3 . D e te r m i n i n g t ra i n i n g a n d t h e d e ve l o p m e n t n e e d s o f t h e o r g a n i z a t i o n .

 4 . A n t i c i p a t i n g s u r p l u s o r s h o r t a g e o f s t a ff a n d a vo i d i n g u n n e c e s s a r y d e t e n t i o n s o r
d i s m i ss a l s .

 5. Controlling wage and salary costs.

 6. Ensuring optimum use of human resources in the organization.

 7 . H e l p i n g t h e o r g a n i z a t i o n t o c o p e w i t h t h e t e c h n o l o g i c a l d e ve l o p m e n t a n d m o d e r n i z a t i o n .

 8 . E n s u r i n g c a r e e r p l a n n i n g o f e ve r y e m p l o ye e o f t h e o r g a n i z a t i o n a n d m a k i n g s u c c e s s i o n

 p r o g ra m m e s .

 9 . E n s u r i n g h i g h e r l a b o u r p r o d u c t i v i ty.
 STAFFING PRACTICES IN IHRM

 Staffing refers to the process of finding the right employee with

appropriate qualifications or experience and recruiting them to
fill a position, role, or job.

 Staffing is the function of employee recruitment, screening and

selection performed within an organization or business to fill job
openings.
 Staffi ng Approaches
Depending on the recruitment of key managerial positions for multinational
companies, different approaches are explained.

These approaches are based on EPRG

Ethnocentri Polycentric framework Developed by Wind, Douglas
c Approach Approach and Perlmutter in 1969.

Geocentric Regiocentric
approach Approach
 Ethnocentric Approach

When a company follows the strategy of choosing only from the citizens of
the parent country to work in host nations, it is called an ethnocentric
approach. Normally, higher-level foreign positions are fi lled with
expatriate employees from the parent countr y
 Ethnocentric Approach

Advantages of ethnocentric Approach Disadvantages

1. Organization‘s culture can be easily  Need to pay more for the expatriates
adapted to all the subsidiaries with the from the home country.
help of key managerial decisions such  Cross-cultural variations may lead to
as vision, mission, and objectives. clashes between the various levels of
2. Possible to eliminate communication the employees.
barriers between the headquarters and  Host country national employees may
subsidiaries. get disappointed by losing the key
3. Proper control is possible with the managerial roles.
ethnocentric approach.  The subsidiary may lose skilled and
4. The parent company can monitor the experienced employees due to the
operations of the subsidiaries ethnocentric approach.
effectively.  Expatriates from the home country
5. Better coordination of activities may not aware of the local values and
between the parent company and beliefs, so cultural clashes may arise
subsidiary are possible. and may show an effect on the
business.
 Polycentric Approach

When a company adopts the strategy of limiting recruitment to the

nationals of the host countr y (local people), it is called a polycentric
approach. The purpose of adopting this approach is to reduce the cost of
foreign operations gradually.

The polycenlric approach uses natives of the host country to manage

operations in their countr y and natives of the parent countr y to manage in
the home offi ce. In this example, the Australian parent company uses
natives of India to manage operations at the Indian subsidiary. Natives of
Australia manage the home offi ce.
 Polycentric Approach

Advantages
Disadvantages
 Host country managers can analyze
 It may not always create a scope of
and understand the local markets and
better coordination between
local people
headquarters and subsidiaries.
 Better coordination with the business
 Quick control of operations is not
environment is possible, both internal
possible because of the key managerial
and external.
positions are occupied by the host
 No difficulty arises due to cultural
country nationals.
issues.
 Though the host country managers
 It creates job satisfaction and job
follow the vision and mission of the
enrichment to the host country
organization, then also errors may occur
nationals.
in the fulfillment of the standards of
 Hiring host country nationals is less
organization culture.
expensive than hiring expatriates.
 Local market knowledge of the host
country nationals enables them to take
strategic decisions.
 Geocentricapproach
 When a company adopts the strategy of recrui ting the most suitable persons for
the positions available in i t, irrespective of thei r nationaliti es, it is called a
geocentric approach. C ompanies that are truly global in nature adopt this
approach since it utili zes a global ly integrated business strategy. Since the HR
operations are constrained by several factors like politi cal and ethnical factors and
government laws, it i s diffi cult to adopt this approach.

 The geocentric approach uses Ihe best avai labl e managers for a business wi thout
regard for their countr y of origin. In this example, the UK parent company uses
natives of many countri es at company headquar ters and at the U.S.subsidi ar y.
 Geocentric approach
Advantages
 The geocentric approach creates a
scope to hire world‘s best talented
and skilled employees.
 It facilitates competitive advantage
and helps in reaching the market
empire position.
 Hiring most talented and eligible
people can fulfill the objectives of the
organization effectively.
 This approach helps in reducing
the unfair treatments and clashes in
the organization due to the favoritism
towards nationality.
Disadvantages
 Hiring according to geocentric
approach is expensive.
 Chance of cross-cultural clashes
become high
 It may not always facilitate better
coordination and control of the
operations of the organization.
 Difficult to monitor and control the
operations
 Organizations need to spend more
on expatriate relocation allowance.
 High cross-cultural variations arise.
 Regiocentric Approach

The Reg i oce nt r ic Ap p ro ac h is a n int e rn at io nal re c r uit me nt m et hod w her e in the ma na ge r s

ar e s e le c te d f r om di ff er e nt co unt r ie s l yi ng wi t hin the ge ogra p hi c r e gi on of bu si ne ss e s .

In ot her w or ds , t he ma na g er s a r e s el ec t ed f r om wi t hi n t he r eg io n of the wor l d t ha t

cl os e ly r es e mb l es the hos t co untr y. For e xa m p le , a US-ba s e d fi r m ca n c r e at e th re e
di ff e r ent r eg i ons , E uro pe , So uth Am e r ic a a nd A si a . Ma na g er s fr om Eur op e c a n b e
move d t hr oug h Eur op e ( fr o m Mad r id t o B ru ss e ls ) but w il l rar e ly b e m oved to the As i a n
r eg io n or t o t he he a d qua r t er s i n the U S A.
Advantages of Rigiocentric Approach

Cul tur e fi t, i .e . t he ma na g e rs f r om t he s a me re gi on a s th at of th e hos t co unt r y may not

encount er a ny p ro bl e m wi th r es p ec t to t he c ult ur e an d the l a ngua g e fol l owe d t her e .

Les s cos t i s i ncur r e d in hir i ng th e nat i ves of t he hos t co untr y.

The ma na ge r s wo r k we ll i n a l l t he ne i g hb or i ng co untr i es wi thi n the g eo grap hi c r eg io n of

the b us ine s s .

 The na t i ona ls of hos t c ount r y c a n b et t er i nfl uenc e th e de ci s io n o f ma na g er s a t

hea d qua r t e rs wi th re s p ec t t o t he e nti r e re g io n.
Disadvantages of Rigiocentric Approach

The ma na ge r s i n d iff er e nt r eg i ons m ay not und er s t a nd the vi e wp oi nt of t he ma na g er s

empl oye d a t th e he a dq ua r t er s .

The r e co uld b e a c om mu nic a ti on ba r r ie r b ec a us e of d iff er e nt la ng ua ge s .

The ma na ge r s e le ct e d f ro m a p a r ti cul a r r eg i on m ay l a ck t he i nte r na ti ona l e xpe r ie nc e.

 It may l e ad t o the c onf us io n b et w ee n t he r eg i ona l obj e ct i ve s a nd t he g lob a l ob je ct i ves .

The r e g iona l m a na ge r s may onl y foc us on ac c omp l is hi ng the re g ion al t a rg e ts a nd may
over s e e the im pa c t on the fi rm as a whol e .
 Recruitment and Selection for Overseas
Assignments

S o m e t i m e s a s m a n y a s a d o z e n c r i t e r i a a r e u s e d , a l t h o u g h m o s t   M u l ti n a t i o n a l C o r p o ra ti on s
g i v e s e r i o u s c o n s i d e ra ti o n t o o n l y fi v e o r s i x .

1 . A d a p t a b i l i t y t o C u l tu ra l C h a n g e

2 . P hy s i c a l a n d E m o t i o n a l H e a l t h

3 . A g e , E xp e r i e n c e , a n d E d u c a ti o n

4 . L a n g u a g e Tra i n i n g

5 . M o ti va t i o n fo r a Fo r e i g n A s s i g n m e n t

6 . S p o u s e s a n d D e p e n d e n t s o r Wo r k- Fa m i l y Is s u e s

7 . L e a d e rs h i p A b i l i t y

8 . O r g a n i z a t i o n -S p e c i fi c Re q u i re m e n t s
Selection Process for Overseas Assignments

KEEP A POOL AS ASSIGNMENT

DETERMINE RECREATE THE
APPLICANTS BECOME OPEN,
OVERSEAS JON ANALYSIS
INVESTED IN REVIEW POOL
COMPETENCIES AND JOB AND INTERVIEW
OVERSEASS
REQUIRED DISCRIPTION CANDIDATES
ASSIGNMENTS
 Global Staffi ng Practices

Global staffi ng, defi ned as – ‘the critical i ssues faced by multinational corporations
with regard to the employment of home, host and third countr y nati onal s to fi ll
key posi tions in their headquar ter and subsidi ar y operations.
Criteria for selecting expatriates Globally

Technical Ability.

Cross-culture
suitability.

Multinational Global staffing

Family
enterprise (MNE) criteria
Requirements.
requirements.

Organisation-Specific
Language skills.
Requirements.
 INTERNATIONAL TRANSFER AND REPATRIATION
STRATEGIES

Transfer is a process of placing employees in positi ons where they are likely to be more
eff ecti ve or where they are to get more job sati sfacti on. In transfers, there is no change in
the responsibility, designati on, status or salary. It is a process of employee’s adjustment
with the work, ti me and place. Transfer may also be made as a disciplinary acti on.

In Government service, employees are transferred due to administrati ve reasons. Transfer is

a movement of the employee from one job to another job or some other place without
change in status, responsibiliti es and salary.
 PURPOSE OF TRANSFER

 To Incr e a s e Pro duc t ivi t y o f Em p loye es

 To Ful fi ll E mp loye e ’s Re q ues t

 To Mee t Or g a ni z a t ion al Req ui re m ent s

 Ma i nte na nc e of a Te nur e Sys t e m

 For Ad j us t i ng the Wo rk Fo r ce

 For Pe na l i z ing E m pl oye es

 For Ad j us t i ng the E mp l oyee ’s T i mi ng

 To Ma ke E mp loye e ’s m or e Ve rs a t il e
Types of employee transfer and its process and procedures
in HRM
 Repatriation

 Rep a t ri a t ion g ene ra l ly r efer s t o the t e rm i nat i on o f t he over s e as a ss i gnm e nt a nd

co mi ng b ac k t o t he hom e c ountr y or to the c oun tr y whe re the H Q i s l oca t e d or t o t he
home s ubs i di a r y f r om w her e he /s he wa s e xp a tr i at e d.

 Rep a t ri a t ion D efi nit i on

Pl a nnin g, t ra i ning , a nd r ea s s i gnm ent o f gl ob a l e mp loye e s t o t hei r ho me c ount ri e s .

 INTERNATIONAL Repatriation STRATEGIES

 Educate and engage others

 Compensation

 Career Development

 Ongoing Suppor t

 Families

 Continuous Improvement
 International Training and Development

 Careful selection is the only the fi rst step in ensuring the foreign assignees
success. The expatriates may then require proper ori entation, cross cul tural
training, assistance in career pl anning and development, etc, i n order to handle
the assi gned in a competent way.

A. Orientation

Pre Arrival Orientation Post Arrival Orientation

 Cultural briefi ng •Cross cultural Training

 Assignment briefi ng

 Shipping Requi rement

 International Training and Development

B. Career Development

The expatriates motivation to do well on an international assignment is

primarily dependent on the following things.

 Whether the present assignments would help the expatriate to learn new
things, expand his knowledge, create a unique positions for himself in the
organization ladders and grow vertically within the fi rm- once the job is
successfully completed.

 Whether the expatriate is enjoying continued support from the

headquarters or not.
 Types of Training for Global Workers

 Documentar y Training- D oc um e nta r y t rai ni ng is te xtbook a nd cl a ssr oom le ar ni ng , wh ic h

focuse s on l ook i ng at di ff er en ces be twe en cu lt ur es a nd is a key pa r t of both low- ri g or an d
hig h-r ig or tra i nin g appr oac he s.

 Cul tura l Si m ula t io n Tra i nin g- A f te r l ea rn in g t he cu lt ura l “do’s a nd don’ ts ” of a h ost cou nt r y,
many c om pa nie s will a sk t he ir em p loyee s to pa r tic ip at e in c ult ura l si m ula ti ons in wh ic h t he y
wi ll r ole play va ri ou s sit ua ti ons an d prac t ic e res pondi ng in c ul tu ral ly sen si ti ve way s. Th is
proces s i s m ost eff e ct ive whe n the t rai ni ng t a ke s p la ce i n the ho st cou ntr y or wh en th e
tra in er c an in cl ud e p eople f rom the a ct ua l host c oun tr y t o he lp.

 Fi el d Si mul a ti on Tra ini ng - Whe n t he c om p any b eli eves tha t the e m pl oye es have suc c es sfu ll y
pa sse d t he “su r v i val train in g ” st ag e , i t i s ti m e f or fi e ld si m ul at ion tra ini ng . The em p loy ee
(an d f am i ly ) v i sit s a ne ig h borh ood of the s am e e th nic b ac k g roun d as t he des ti na ti on or, i f the
tra in ee s a re a lr ea dy in - coun tr y, the n th ey m ove out t o th e “re a l worl d.”
  
 International Performance Management

Inte r na ti ona l p er form a nce m a na ge m ent i s t he eva lua t io n of a n ind i vid ua l w ho w or ks i n a

for e i gn s ubs i di a r y on a t e mp ora r y b as i s t o tra n sfer know le d ge o r d eve l op gl ob a l
le a de r s hip sk i ll s . At i ts b es t , in te rn at i ona l p er for ma nc e ma na g em e nt s houl d fe ed i nto
the g l ob al g oa l s of t he b us ine s s.
 Challenges of international performance management

 To t a l C o mp any vers u s Pa r t s o f i t .

 S ta nd a rd fo rma t ve r s u s C u s t o m i ze d f o r m a t .

 Un i fo rmi t y o f D at a o f Pe r fo rm a n c e.

 Env i ro n me n t a l var i a t i o n s Va l i d i t y o f p e r fo r m a n c e c r i t e r i a .

 Ti me a n d d i s t a n c e va r i a t i o n s .

 Va ri ed l e ve l s o f ma t u r i t y.

 Ra t er ’s c o mp e t e n c e.

 Ra t er ’s b i a s .

 H o s t e nv i ro n men t .

 C u l t u ra l a d j u s t me n t s .
Areas To Be Appraised
 Global Compensation Practices

D e s i gn i n g a n d d e v e l o p i ng a b e t t e r c o m p e n s a t i o n p a c k ag e f o r H R p r o f e s s i o na l s f o r t h e  
i n t e rn a t i o n a l a s s i g n m e n t s  re q u i r e s k n o w l e d g e o f t a xa t i o n , e m p l oy m e nt l a w s , a n d f o r e i g n
c u r r e n c y fl u c t u a t i o n by t h e H R p r o f e s s i o n a l s .

  W h e n a fi r m d e ve l o p s i n t er n a t i o na l c o m p e n s a t i o n p o l i ci e s , i t t r i e s t o f u l fi l l s s o m e b r o a d
objectives:

 T h e c o m p en s a t i o n p o l i c y s h o u l d b e i n l i n e w i t h t h e s t r u ct u r e , b u s i ne s s n e e d s a n d ov e ral l
s t ra t e g y o f t h e o rg a n i z a t i o n.

 T h e p o l i c y s h o u l d a i m a t a t t ra c t i n g a n d r e t a i n i n g t h e b e s t t a l e n t .

 I t s h o u l d e n h a n c e e m p l oy e e s a t i s f a c t i o n .

 I t s h o u l d b e c l e a r i n t e r m s o f u n d e r s t a n d i n g o f t h e e m p l oy e e s a n d a l s o co nv e n i e n t t o
a d m i n i s t e r.
 Cont……

The e mployee a ls o ha s a nu m ber of obje cti ves t ha t he wis hes t o a chi e ve f rom the
compe ns at ion poli cy of the fi r m - -

 He e xp ec ts pr oper c om p en sat ion a g a ins t hi s c om pet en cy a nd per for m an ce l eve l.

 He e xp ec ts su bst an ti al fi na n ci al g a in f or h is own com for t an d f or h is f am i ly al so.

 He e xp ec ts h is pre se nt an d fut ur e nee ds to be ta ke n c a re of in cl udi ng ch il dre n’s ed uc at ion,

med ical pr ot ec ti on a nd h ou si ng fa ci li ti es.

 Th e poli cy sh ould be p rog re ss ive in na t ure .

 Approaches In Global Compensation

  Ba l a nce   Shee t Ap pr oa c h   - t he b al a nc e she e t   m e thod  i s m ost com m onl y us ed. M ore t ha n
85 % of US c om pa ni es  u se som e var ia ti on of th is m et hod to c om pe nsa te t he ir expa tr ia te s.
Th e objec t ive  of th e bal a nc e s he et m et hod is to ke ep th e expat r iat e ec onom ic a lly whol e or
to   en sur e th at th e expa tr ia te doe sn’ t fi na nc ia ll y s uff er or c om e ou t a he a d a s a res ul t  of th e  
int er na ti ona l a s sig n m en t. I t i s in ten ded to m ai nt ai n t he e m ployee s hom e  s ta nda rd of liv ing
dur in g t he in te rn at iona l as si g nm e nt .  Th e b as e s a lar y for pa re nt cou nt r y na ti ona ls an d thi rd
cou ntr y  na ti ona ls i s lin ke d t o t he sa la r y st r uct ur e of t he re leva nt h om e c oun tr y.

   G oing   Rat e Ap p ro ac h- Thi s is ba se d on loc al m a rket ra te s. It r el ies on c om p ar is on of

sur ve y of th e loca l na ti ona ls , expa tr ia te s of s am e na ti ona li ty an d expa tr iat es of al l
na tio na lit ie s p ay pa ck a g e.
Major Components in  an International Compensation
Package

Taxes

Incentives Salary

International
Compensation

Allowances Benefits

Long term
benefits
 UNIT - 3

INTERNATIONAL INDUSTRIAL
RELATIONS
 MEANING

 Industrial Relati ons

I ndus tr ia l re la ti on s or e m ploy m e nt re la ti ons en compa ss es th e in te rr e l at i ons b et we e n

empl oye r s a nd em p loye e s , la b or /tra de uni ons , e mp loyer o rg a niz at i ons a nd t he s ta t e /
gover nme nt .

 Inte r na ti ona l Indus t r ia l r e la t io ns -

I nte rn at iona l in dus tr ia l r el at ions d ea ls with t he c om ple x re la tio nsh ips a m ong em pl oye r s
empl oy ing for ei g n na ti ona l , em p loye e s of d i ff er e nt na ti ona l it i es , hom e a nd hos t
co unt r y g over nm ent s a nd t ra d e union s of t he or g a niz a t io ns op erat i ng i n var ious
cou ntr ie s an d t he ir na ti ona l & i nte rn at iona l fe dera ti ons.
OBJECTIVE OF IIR

 To pr otec t th e in ter es t of em p loyee s as wel l as em p loyer s by g ai ni ng m utu al u nde rs ta ndi ng

amon g a ll pa r tie s pa r t ic ipa ti ng in t he in dus tr y.

 Ton e nh an c e t he pr oduc ti v it y of th e in dus tr y s o a s to c ont rib ute t o ec onom ic deve lopm e nt of

th e coun tr y.

 To avoi d an d r es ol ve a l l k i nd s of in dus tr ia l confl i ct s an d d isp ut es an d e ns ur e i ndu st ria l pe ac e.

 To pr ov ide a nd en sur e be tte r w or ki ng c on dit ion s a nd l iv i ng st an dar ds t o th e e m ployee s.

 To e ns ure e m ployee s par t ic ipa ti on i n m an ag em en t an d p rofi ts to enh a nc e t he m ora le a nd

produ c tiv ity of em pl oy ees .

 To r edu ce l ab ou r tur nover an d a bs ent ee is m by pr ov i din g j ob s at isf a ct ion to t he worker s.

 To r edu ce th e c ha nce s of l ockout s, s tr ikes, et c.

 Cont…….

 To e nc ou ra g e an d de vel op t rad e uni on s.

 To e ns ure a nd dev elop tra de un ion .

 To e ns ure a m u tua l un der st an di ng a nd c oop era ti on a m ong em pl oy ers , em ployee s an d h os t

an d hom e c oun tr y g ov t. t owa rd s t he ir in div i du al r ol es a nd com m it m en t in th e in dus tr y.

 To gi ve re cog n it ion to a nd im p la nta ti on of h um a n ri g ht s i n th e i nd ust r y.

Factors Aff ecting IIR

 I I R a r e i n fl u e n c e d b y v a r i o u s f a c t o r s l i k e e c o n o m i c , i n s t i t u t i o n a l , s o c i a l , c u l t u r a l , p o l i t i c a l , t e c h n o l o g i c a l
e t c . o p e ra t i n g i n v a r i o u s c o u n t r i e s w h e r e M N C s o p e ra t e s : -

 Institutional factors:- these factors include host and home country employers federations, employees
organization, social institutions, govt and legal institutions etc.

 S o c i a l a n d c u l t u ra l f a c t o r s : t h e s e f a c t o r s i n c l u d e p o p u l a t i o n , c u s t o m s a n d t ra d i t i o n s , s o c i e t a l n o r m s ,
religion etc.

 Economic factors: these factors include economic conditions, policies and systems like capitalist, socialist,
m i x e d , d e m a n d a n d s u p p l y o f l a b o u r, s t r u c t u r e o f l a b o u r f o r c e e t c .

 Te c h n o l o g i c a l Fa c t o r s : - t h e s e f a c t o r s i n c l u d e t h e t e c h n o l o g i c a l d e v e l o p m e n t i n t h e c o u n t r y, t h e l e v e l o f
a u t o m a t i o n a n d i n f o r m a t i o n t e c h n o l o g y, m e c h a n i z a t i o n e t c .

 Po l i t i c a l a n d g o v t . f a c t o r : t h e s e f a c t o r i n c l u d e p o l i t i c a l s y s t e m i n t h e c o u n t r y, p o l i t i c a l p a r t i e s a n d t h e i r
p h i l o s o p h i e s , h o s t a n d h o m e c o u n t r y g o v t p o l i c i e s l i k e i n d u s t r i a l p o l i c y, g l o b a l i z a t i o n p o l i c y, l o b o r p o l i c y,
e x p o r t i m p o r t p o l i c y, e c o n o m i c p o l i c y e t c .
 Issues in International Industrial Relations

 Issue 1: Who should handl e Labour Relations – Headquar ter or the subsidi ar y in
the concerned countr y

 Issue 2: Trade Union Tactics

 Issue 3:  Pol itical

 Issue 4: Soci al and Identity

 Issue 5: Power and knowl edge

 Labour Relation

 Process through which management and workers identify and determine the job
relations that wi ll be in eff ect at the workplace.

 Specifi c approaches to l abor relati ons varies from one country to another Labor
Relations in Other Countries
Labour Relation In Other Countries

 U.S. Ap p roach to Labor Relations –

 Colle ctive b arg aining

 • P r o c e s s w h e r e b y f o r m a l la b o r a g r e e m e n t s a r e r e a c h e d b y u n i o n a n d m a n a g e m e n t r e p r e s e n t a t i v e s

 • I nv o l v e s n e g o t i a t i o n o f w a g e s , h o u r s , a n d c o n d i t i o n s o f e m p l o y m e n t a n d t h e a d m i n i s t ra t i o n o f
t h e la b o r c o n t ra c t

 – Ger many

 • U n io n s a n d m a n a g e m e n t h av e b e e n c o o p e ra t i v e in t h e p a s t

 • L a b o r h a r m o n y n o t a d v e r s e l y a ff e c t e d b y u n i fi c a t i o n o f E a s t a n d We s t • U n i o n p o w e r i s s t i ll q u i t e
strong

 • R i g h t s o f w o r ke r s a d d r e s s e d m o r e c a r e f u l l y b y m a n a g e m e n t
 Cont……….

 – Japan

 Un ion s a nd m a na g em e nt h ave coope rat ive re la t ions hip s

 Con tra ct s te nd to be g en eral a nd vag ue

 D isp ut es re g ar di ng t he l ab or c ontrac t us ua lly se tt led a m ic ab ly  

 Uni ons m ost a ct ive dur in g th e s pri ng an d end of the ye ar

 Factors Aff ecting Labor Relations

  A cou nt r y ’s laws, c ul tu re , soci a l s tr uc tu re, an d e con om ic c on di tion s m ay im pa c t l ab or

re lat ion s. f or exam p le th at t he rol e of u nion s va rie s g re at ly a m on g coun tr ie s.

 In t he U. S. m em b ers hi p i n u ni ons ha s bee n st ea dil y d ec rea s ing , bu t ove r h al f the worl d’s
wor k forc e outs ide t he U. S. bel on g t o u ni on s.  

 EU & J a pa n

 Uni ons in th e Eu rope an c ount ri es te nd to b e al ig n ed with pol it ic al pa r tie s, but in J a pa n ar e

cr ea te d a nd r un by t he fi rm s t he m se lves .
 Strategic International Human Resource
Management

 Strategic IHRM is defi ned as human resource management  issues,

functions and policies and practices that result from
the strategic activities of multinational enterprises and that impact
the international  concerns and goals of those enterprises.

 In Strategic International Human Resource Management  (SIHRM), the

human resource function is actively involved in the  strategic activities of
the fi rm. 
 INTERNATIONAL LAOBUR STANDARDS

In ter na ti on al la bour st a nda rd s  a re a c om p reh en sive set of  le g a l in st rum e nt s t ha t  es ta bli sh
ba sic pr in ci ple s a n d ri g h ts a t wor k , with a g oal to   im pr ove work i ng c ondi ti on s on a g loba l
scal e. The   Conve nti ons and Rec om me nd at i ons of t he ILO form th e i nt er na tion al l abor
sta nd ar ds .

 C onvent i ons  a re le g a ll y b ind ing in te rn at iona l tr ea tie s tha t m ay be ra ti fi ed b y m em be r sta te s.  

Re co mm e nda t io ns   ar e   non- bin din g g ui del in es . In m any ca se s, a conven ti on lay s d own t he

ba sic p ri nc ipl es to be im p lem e nt ed by rat ify in g c ount ri es , whi le a rel at ed r ec om m en da tion
sup ple m en ts t he c onve nti on by prov i din g m ore de ta il ed g u ide li nes on h ow it c ould be a ppl ie d.
Re com m e nda ti ons ca n a lso be a uton om ou s, i e:  n ot l in ke d t o a  c onven ti on .
 GLOBAL UNIONS

 Global Unions are international trade uni on organisations worki ng together with a
shared commitment to the ideal s and princi ples of the trade uni on movement.
They share a common determination to organize, to defend human rights and
labour standards ever ywhere, and to promote the growth of trade unions for the
benefi t of al l working men and women and their famili es.“
 Global Union Federations

 Gl ob al U nio n Fed e ra ti ons ( GU Fs ) s e e k t o b uil d i nt er na ti ona l co ope rat io n, j oi nt a c tion ,

an d g l ob al s oli dar it y am on g tra de u ni on s in diff e ren t c oun tri es t ha t sh ar e c om m on
emp loye rs . The re i s a g r owi ng g loba l tra de un ion re cog n it ion b y m u lt ina ti ona l e nt er pri ses of
GUFs at th e h ea dqu ar te r l evel s, a nd beyond , an d of t he work th at the y do, a s wel l as an
impor ta nt i nc re ase i n soci a l di al og ue . In s om e c as es , t hi s i nt era ct ion ha s re su lt ed i n t he
ne gotia ti on of Inte r nat i ona l Fra me wo rk Agr e em e nt s ( I FA s ) , al s o know n as Gl ob a l
Fra me wor k Ag r ee m ent s ( GFA s ) .
 International workers Federation Indian Unions

 Ind i an Na ti ona l Met a l wor ker s ’ Fed e ra ti on

 Indi a n Na t i ona l Mi ne wor ker s ’ Fed e ra t ion

 St ee l, Me ta l & Eng ine e ri ng wo rker s ’ Fe de ra t i on of Ind ia

 Si mp s on & Gr oup Co mp a nie s Wor ker s a nd St a ff U ni on

 Wor k i ng Pe op le Tra de U ni on Co unci l

 SK F B ea r i ng Ind ia Em p loye es ’ U nion

 Sa ndv ik A s i a Em pl oye es ’ U nio n

 Phi l ip s & B.C. C om pone nt s Em pl oye es ’ U nio n

 At l a s Cop co E mp loye e s ’ Fe d erat i on

Contents of a framework agreement with ThyssenKrupp

 According to the agreement, ThyssenKrupp i s obl iged to comply with the pri nci ples
of the International Labour Organzation (ILO), among other international
standards, at all its subsidiaries worldwi de. Under the newl y signed GFA
ThyssenKrupp undertakes to respect the following pri ncipl es:

 Equal opportunity and equal treatment

 Maximum working hours as regulated by a respective l egislation or a col lecti ve

bargai ning agreement or other agreement within the speci fi c countr y

 Right to a reasonable remuneration for al l employees

 Cont…

 Health and safety of empl oyees a key i ssue, obliging ThyssenKrupp to adhere to
local laws with regard to a safe, hygienic working environment

 All employees have the ri ght to establish trade unions and employees’
representative bodi es, and to engage in collective bargaining

 All forms of child and forced labour are prohibi ted

 The GFA has also strong provi si ons for implementati on and monitoring through an
Internati onal Committee with the par ticipation of various management and
workers’ representatives.
 Regional Economic Integration

 Refers to agreements among countries in a geographic region to

reduce, and ultimately remove, tariff and non tariff barriers to the
free fl ow of goods, services and factors of production between each
other.
 Levels of Economic Integration

 1. Pol iti ca l Un ion

 2. Econom i c Uni on

 3. Com m on M a rket

 4. Cus tom s Un ion

 5. Fr ee Trade A r ea

 F ree Tra de A r ea : a ll ba rr ier s to t he t rade of g oods an d ser v i ce s am ong m e m ber c ou nt ri es a re

re move d.
 Cont……..

 C us toms Uni on: e l imi na te s tra de bar ri e rs be t we en member countri es and a dopts a common
ex ternal trade pol i cy.

 • C ommon Mar ke t: Ha s n o ba rri e rs to t rad e be tween memb er c ountr ies, incl ude s a com mon
ex ternal trade pol i cy, a nd al l o ws fac tors of pro du ction to m ove freely betw een me mbers.

 • E c onomic Un ion : involve s f re e fl ow of pr odu cts an d fa ctors of produc tion between

me mber co untri es and ado pti on o f a co mmo n ex ternal trade pol icy. It als o requires comm on
cur re ncy, ha rm oni zat i on o f m embers ’ tax rat es , and a c om mon mone tar y and fi s cal polic y.

 Pol iti ca l Un ion : Movin g towar d e c on omic uni o n, raises qu es tions of how to coordinat e
bureauc ra cy ac co untabl e t o th e ci t i zens of m ember na tions . Poli tica l union in whic h a c entral
poli tic al a pparat us c oordi n ates t he eco nom i c, s o ci al, and foreign poli cy of the member s tat es is
the a ns we r.
 Regional Unions

 Eu ropea n Un ion

 • N A F TA: US A , Ca n ada , M e xi co

 • A n dea n Pa ct : B oli v ia , C hi le , Ec ua dor, C olom bi a an d Peru ( n ow opera te s as a c us tom s un ion

incl udi ng Vene zu el a bu t m i nu s C h il e)

 • M ER COSU R – ori g in at ed with B ra zi l an d A r g e nti na i nc lu des Pa ra g uay a nd Ur ug u ay.

 • ASEA N : B r une i, C a m bodi a, Indone si a, L aos, M al ay s ia , M ya nm ar, Phi li ppin es , Sin g ap ore,
Th ai la nd , Vie tn am

 • S A A RC Sout h A si a n A s s oci a ti on for Re gi ona l Coo pe ra t ion

 • BI MST EC ( Bay of Beng a l In it ia t i ve for Mul ti -Se ct ora l Te c hnic a l a nd Ec onom ic

Coop e ra t ion ) Ba ngl a de s h, In di a , Mya nm ar, Sri L a nk a , Tha il an d, B hu ta n an d Ne pa l
 UNIT -4

EQUAL OPPORTUNITY AND DIVERSITY

MANAGEMNET IN GLOBAL CONTEXT
 Equal Opportunities

 The t e r m ‘e qua l op p or tun it ie s ’ is a s s oc i at e d wi th em p loym e nt eq ui ty l eg is l a ti on re l at e d

to di s c ri m ina t io n a r is i ng f r om cha rac t e ri s ti c s s uch as g end er, ag e , et hni ci t y, r e li gi on,
phys i c al a b il i ty a nd s exua l or i en ta t ion .

 T he el i mi na t ion of i ne qua li t y n ec es s i ta t es s ta t e int er vent io n t hro ug h le g is l a ti on and

affi r ma ti ve a c ti on ( A A) p ol ic i es t o pr ovi d e at l e a st a ba s i c le vel o f p ro te c ti on i n
pr i ncip le .

 Ma ny gove r nme nt s have is s ue d EO le gi s la t io n d ur ing t he l as t 3 0 ye ar s , a lt houg h w ha t

the t e r m ‘e qua l op p or tun it ie s ’ me a ns , and w ho ar e i nc lud ed i n the c a te g or y for
pr ot e ct i on, d iff e r s a cr o ss co unt r ie s .
  
Labour and EO laws in China
Labour and equal opportunity Purpose Impact
laws
To ensure equal rights in Ineffective
 Constitution (1954, latest employment between men enforcement,
version 2004) and women little, if any,
To protect married women punishment to
 Labour Insurance
from being discriminated non-compliant
Regulations of the People’s
Republic of China (1953)
due to their maternity employers
status
 Announcement on Female
Workers’ Production Leave
by the State Council
(1955)

 Female Employees Labour

Protection Regulations
(198 8 )
Labour and EO laws in INDIA

Labour and equal Impact

Purpose
opportunity laws •Ineffective
To guarantee women’s
•Constitution (1950) enforcement due to lack
equal rights
•The Employees State
of uniform civil code
Insurance Act (1948)
•Complex and
•The Factories Act
(1948) restrictive laws deter
•The Maternity Benefits employers from
Act (1961) creating jobs in the
•Equal Remuneration formal sector
Act (1976)
Labour and EO laws in JAPAN

La bo ur a nd eq ua l Purpose Impact
opp o r tuni ty l aw s
To ensure equal rights •Controversial introduction
in employment •Over-reliance on voluntary compliance
 Con st it uti on
between men and with little government enforcement power
(19 46 ) women •Limited impact on increasing women’s
employment but has led to increased
 Equ al
awareness of gender inequality among
Empl oy m en t women
Oppor tun it y L aw
(19 86 , am e nde d
in 19 9 7 to ta ke
eff ect in 1 99 9 )
 Employer strategy and discrimination

Employers play an important role in influ ­e ncing the level of gender (in)equality. Where
firms are facing shortages of labour and talent, they may introduce a proactive HR policy
to attract and retain women workers. Where the labour market is slack and the pressure
of business competition is height ­e ned, employers often adopt a labour cost reduction
strategy and women tend to be more vulnerable than men. For example, in Korea, a large
proportion of Korean (mar ­r ied) women have inferior employment status mainly due to
discrimination based on their marital status (Kang and Rowley, 2005).
 Diversity Management

Diversity management refers to organizational actions that aim to promote

greater inclusion of employees from diff erent backgrounds into an
organization’s  structure through specifi c  policies and programs. Organizations
are adopting diversity  management strategies as a response to the growing
diversity of the workforce around the world.

The concept of diversity star ted in North America in the mid-1980 s, spreading
to other par ts of the world af terward. Then United States President, Ronald
Reagan, originally vowed to dismantle the equality and affi rmative action laws
that were viewed as legal constraints. Equality and  affi rmative action
 employees presented the argument that diversity management should be seen
as a competitive advantage to companies rather than as legal constraints.
Types of Diversity Management

1 . In tran a t io n al d iv er s ity m an age m en t- In tra na ti ona l d ive rsi ty m an a g em e nt re fe rs to

man ag ing a work for ce t ha t com pr ise s ci ti ze ns or im m i g ran ts i n a sin g le n at iona l con te xt .
D ive rsi ty prog ra m s f oc us on pr ov i din g e m ploy m e nt oppor tu nit ie s to m i nori ty g rou ps or rec en t
immi g ran ts .

 2 . Cr o s s-n a ti o n a l di v e rs i ty m an a ge me n t- C ross - na ti on a l, or i nte rn at iona l, dive rs ity

man ag em en t re fe rs to m a na g i ng a wor k for ce th at c om pri se s c i tiz e ns fr om diff e ren t c ou nt ri es.
It may al so involve i m m ig ra nt s from di ff e re nt cou nt rie s wh o a re s eek i ng em pl oy m ent .
 Cultural Diversity

Cul tu ra l d i ver s i ty   ( a l s o know n a s   m ult ic ul tura li s m ) is a g ro up o f d iver s e i nd ivi d ua ls f r om

di ff e r ent c ult ur e s or s oc ie t ie s . U s ual l y, c ul t ura l di ver s i ty t a ke s int o a cc ount l ang ua ge ,
r el ig i on, ra c e, s exua l or i ent a ti on, g end er, a ge a nd e thn ic i ty. C omp a nie s st a r t ed to
embra ce co rp ora te d iver s it y in the ea r ly 2 0 0 0 s . T his wa s d ue t o m a ny t r end s i n
de mo g ra phi cs a nd a c hang i ng wor k fo rc e .

 C ult ura l s e nsi t ivi t y   i s de fi ned a s unde r s t and in g ra ci a l, s oc i al , and c ul tura l d iff e r en ce s
wi tho ut a ny j ud g me nt. Cu lt ura l f a ct or s to co nsi d e r i nc lud e di ff e r ent s ta nd a r ds ,
co mm unic a t ion s tyl e s, a nd be hav io rs .
 GLOBAL ORGANIZATION STRUCTURES

 Any international business organization, depending on its requirements

and operations, would have an organization structure to streamline all its
processes.

 Organization is defi ned by the formal structure, coordination and control

systems, and the organization culture.

  It’s the formal arrangement of roles, responsibilities and relationships

within an organization.

  It’s a power ful tool with which to implement strategy .

 Types of Organizational Structures

 Initial Division Structures

 International Division Structure

 Global Product Division

 Global Area Division

 Global Functional Division

 Mixed Matrix
 Initial Division Structures

In iti al d iv is ion s tru ct ure s ar e com m on in s ubs idi ar ie s, e xpor t fi rm s , a nd on - s ite

man uf ac tu rer s.   Sub s i di a ri e s   th at f ollow t hi s ki nd of or g a niz a tion s tru c tur e in cl ude fi rm s
wh er e th e m a in e xp or t is e xp er ti se , for exa m ple , c onsu lt an ts a nd fi na nci a l fi r m s.
 International Division Structure

Thi s s tr uc tu re i s b uil t to h an dle a ll in te rn at iona l opera t ions by a di v isi on cr ea te d f or c ontr ol. I t

is of ten a dopt ed by fi r m s th at a re st il l in th e devel opm en t st ag e s of i nt er na tion al bu si nes s
op era ti on s.
 Global Product Division

Gl ob al pr oduc t di v isi ons in cl ude d om e st ic di v is ions tha t a re al lowed to t a ke g l ob al r esp on si bi lit y

for prod uc t g roups . The se di v is ions op erat e as p rofi t c e nte rs .
 Global Area Division

Gl ob al a re a div is ion s tr uc tu re is u se d for ope rat ion s t ha t ar e c ont roll ed on a g eog ra ph ic ra th er

th an a pr oduc t ba sis . Fi rm s in m a tu re bu sin es se s wi th se le ct pr od uc t li nes u se it .
 Global Functional Division

Thi s s tr uc tu re i s t o pr im a ri ly or g a niz e g l ob al ope ra t ions ba s ed on f un cti on; produc t ori ent at ion
is se con da r y for fi rm s us in g g loba l fun ct ion di v is ion st ru ctu re .
 Mixed Matrix

Thi s s tr uc tu re c om b ine s g loba l pr od uc t, a re a, an d f un ct iona l ar ran g e m ent s an d i t ha s a cr oss-

cu tt ing c om m itt ee s tru c tur e.
 EMERGING TRENDS IN EMPLOYEE INVOLMENT

 PE OP LE-F I RST CU LTU R E

 I NTE R EST I NG A ND CH A LLE NGI NG WOR K

 WOR K P LACE WE LLNESS

 PR IOR I TI SI NG MENTAL H E ALT H IN T H E WOR K P LACE

 EMPLOY EE S AS BR AN D A MB ASS AD OR S

 GE NDE R E QUA LI T Y, WOMEN EMP OWE R MEN T AN D WOMEN S AF ET Y I N T H E WOR K P LACE

 CLOU D-T ECH N OLOGY WI LL CONT IN UE TO R EIGN

 MOR E P R OMIN ENC E TO WOR K-L IF E H AR MONY

EMERGING TRENDS IN EMPLOYEE RELATIONS

 Cen tral i z a ti on of t he ER func t ion

 An i nc re a s in g foc us on me tr i c s a nd a na l yt i cs

 Wor kp l a ce s a fe t y wi l l be i n the s p ot li g ht

 Cl oud-b as e d a cc e ss

 Ea s y t rac ki ng of inc i de nt s, ac c omm od a ti ons , FMLA , a nd si m il a r m a tt er s

 Remot e p er for m anc e m onit or i ng a nd ma na g em e nt

 Col la b orat io n t ool s