International Human Resource

Management (IHRM)
Learning Objective : Illustrate with examples how inter country
differences affect HRM
1. Cultural Factors
• Cultural differences manifest themselves in differences in how
people from different countries think, act, and expect others to
act
• For. e.g. In China, heads of companies are inclined to see
employees as members of their family, but in turn demand much
of them
• Greart Hofstede illustrate international cultural differences in
five values, power distance, individualism, masculinity,
uncertainty avoidance, and long-term orientation.
• For example, Americans’ emphasis on individuality may help
explain why European managers have more constraints, such as
in dismissing workers
2. Legal Factors:
• Employers expanding abroad must also be familiar with the labour
laws in the countries they are entering
• In Brazil, firing someone without “just cause” could trigger a fine of
4% of the total amount the worker ever earned.

3. Economic Systems
• Differences in economic systems translate into differences in inter-
country HR practices.
• In market economies (such as the United States), governments play a
relatively restrained role in deciding what will be produced and sold
at what prices
• In planned economies (such as North Korea), the government decides
and plans what to produce and sell at what price
• In mixed economies (such as China), many industries are still state-
owned, while others make decisions based on market demand.
4. Labor Unions :

• Chinese facilities of IBM, PepsiCo, Wal-Mart, and others have

seen extensive strikes by Chinese workers.

• Several things may be contributing to the strikes. China’s new

labour law expands workers’ rights
Learning Objective : List and briefly describe various roles played by
Global HR Managers.
1. Staffing the Global Organization
• Deciding whether to fill local positions with local versus expatriate
(“imported”) employees remains a major concern (International
Staffing: Home or Local? )
we can classify an international company’s employees as Home-
Country Nationals, Locals (host-country nationals), or Third-Country
Nationals.
Home-country nationals: Citizens of the country in which the
multinational company has its headquarters
locals : Citizens of the countries in which employees are working; also
called host-country nationals
Third-country nationals : Citizens of a country other than the parent
or the host country.
• Other Solutions
 Off shoring: Moving business processes such as manufacturing or
call-center operations abroad, and thus having local employees
abroad do jobs that the firm’s domestic employees previously did in-
house— is another globalization option.
Human resource managers help top management
• To understand the local labour markets, for example, in terms of their
size, education levels, and unions.
• Employment-related reputation
• To deal with skill shortages. This often requires using signing
bonuses, higher wages, and improved promotion opportunities.
• To identify how to reduce attrition. This might include more training
and development, better compensation, and improved career
opportunities.
 Training and Maintaining employees Abroad

2. Orienting and Training Employees on International

Assignment
a) International assignees do best when they receive the
special training (in things like language and culture) that
they require.
b) Pre-departure training : on-and offline lectures, simulations,
videos, and readings
 The basics of the new country’s history, politics, business
norms, education system, and demographics
 Understanding of how cultural values affect perceptions,
values, and communications
 Examples of why moving to a new country can be difficult,
and how to manage these challenges
c) Ongoing Training : More firms provide continuing, in-country
cross-cultural training during the early stages of an overseas
assignment.
3. Performance Appraisal of International Managers
• Several things complicate appraising an expatriate’s
performance. Cultural differences are one.
Suggestions for improving the expatriate appraisal process
include
 Adapt the performance criteria to the local job and situation.
 Evaluation is more toward the on-site manager’s appraisal
than toward the home-site manager’s.
4. Compensating Managers Abroad
• In compensating those it transfers abroad three choices
 Continue paying based on the person’s current home-
country pay
 Pay based on what locals in the new country are paid
 Pay so the person’s home—country standard of living stays
the same
• The more popular approach is to use the third option,
namely by paying expats so that on their new jobs their pay
is sufficient to maintain their former home-country
standard of living
• Most employers use what is called the balance sheet
approach.
Managing HR Locally: How to Put into Practice a Global HR
System
1. Developing a More Effective Global HR System
 Treat the local human resource managers as equal partners
 Create “an infrastructure of partners around the world that
support local activities & help them to understand their own
systems and their own challenges
 IBM uses a basically standardized recruitment and selection
process worldwide. However, “details such as who conducts
the interview (hiring manager vs. recruiter), or whether the
pre-screen is by phone or in person, differ by country.
2.Making the Global HR System More Acceptable :
 Make managers work on global teams and the firms .
 Identify, recruit, and place employees globally .
 Carefully assess whether the local culture or other differences might
in fact undermine the new system.
 Be knowledgeable about local legal issues, and be willing to
differentiate where necessary.
 Obtain agreement among far-flung employees . For example,
because of how P&G recruits, selects, trains, and rewards them, its
managers have a strong sense of shared values. For instance, new
recruits quickly learn to think in terms of “we” instead of “I”.
3. Implementing the Global HR System:
- Constant contact with the decision makers in each country, as
well as the people who will be implementing and using the
system.

- Head office provides adequate resources to local HR to

implement new job analysis procedure for these additional
activities