International Human Resources Management LESSON 12 CBM 321(288)- WEEK 8-9 What is IHRM? What is IHRM? IHRM can be defined as set of activities aimed managing organizational human resources at international level to achieve organizational objectives and achieve competitive advantage over competitors at national and international level. WHAT IS IHRM? • IHRM is the process of employing and developing people in the international organizations. • It involves managing human resources working across national boundaries • IHRM includes typical HRM functions. • Another definition of IHRM is that “it is the systematic planning and co-ordination of the fundamental organizational processes of job and work design, staffing, training and development, appraising, rewarding, and protecting and -representing the human resources in the CHARACTERISTICS OF IHRM • More HR activities • The need for a broader perspective • More involvement in employees’ personal lives • Changes in emphasis as the workforce mix of expatriates and locals varies • Risk exposure • Broader external influences Concept of IHRM Deals with the typical HRM functions like recruitment, selection, training and development, performance appraisal, etc., at the international level. According to Hugh Scullion, International HRM (IHRM) involves the HRM issues and problems arising from the internationalisation of business, and the HRM strategies, policies and practices which firms pursue in response to the internationalisation of business. IHRM is concerned with the management of all the human resource activities in global organizations without regard to geographic boundaries. It is the process of procurement, allocation and effective utilization of human resources in international business. Objectives of IHRM 1. It enhances to develop managerial skills, organisational knowledge and technical abilities of HR managers and employees; 2. To develop more and better handle of global business operations; 3. To manage and secure the performance, compensation and career path of employees; 4. To manage and organise cross cultural counselling and language training programme; 5. To develop more feasible understanding of work practices at global levels; 6. To raise and develop better and new performance management of human resources; 7. To get more and more opportunities within global HR scenario; 8. To develop better and competitive HR strategies in global competitive scenario; 9. To reduce the cultural differences as amicable for cultural environment. International staffing International staffing refers to the process of selecting employees for staffing international operations of an MNC. MNCs can be staffed using three different sources' Parent Country National (PCN) Employees of an organization who are citizens of the country in which the headquarters of the company is located. Host Country Nationals (HCN) Employees of an organization who are the citizens of the country in which the foreign subsidiary is located. Third Country Nationals (TCN) Employees of an organization who are the citizens of the country other than the country where the organization is headquartered and the country that is hosting the subsidiary. Types of IHRM Staffing Policy Polycentric Ethnocentric Key management positions filled by parent-country nationals Host-country nationals manage subsidiaries, parent company nationals hold key Headquarter positions High Employee Engagement Geocentric Seek best people, regardless of nationality Recruitment and Selection MNCs Approach to International Human Resource Management Ethnocentric Approach • Strategic decisions are made at headquarters • Limited subsidiary autonomy • Key positions in domestic and foreign operations are held by headquarters’ personnel; PCNs manage subsidiaries Polycentric Approach • Each subsidiary is a distinct national entity with some decision-making autonomy • HCNs manage subsidiaries who are seldom promoted to HQ positions • PCNs rarely transferred to subsidiary positions Geocentric Approach • A global approach - worldwide integration • View that each part of the organization makes a unique contribution • Nationality ignored in favour of ability: ○ Best person for the job ○Colour of passport does not matter when it comes to rewards, Regiocentric Approach promotion and development • Reflects a regional strategy and structure • Regional autonomy in decision making • Staff move within the designated region, rather than globally ○ Staff transfers between International Human Resource Management – Recruitment Policy Companies operating outside their home countries, essentially, follow three ways of hiring executives: Ethnocentrism It is a cultural attitude marked by the tendency to regard one’s own culture as superior to others. Polycentrism In the polycentric corporation, there is a conscious belief that only host country managers can ever really understand the culture and behaviour of the host country market; therefore, the foreign subsidiary should be managed by local people. Geocentrism Geocentrism assumes that management candidates must be searched on a global basis, without favouring anyone. It helps to build a stronger and more consistent culture and set of values among the entire global management team. ISSUES IN IHRM Managing Employee Selecting the Culture and Language and International and Family right person Gauge Communication Assignments Adjustments for foreign assignments HR’s role 1 2 3 4 5 6 Drawing up and reviewing codes of conduct Conducting a cost-benefit analysis to justify an expatriate as a monitor Championing local operators as monitors Being a member of the team who conducts periodic ‘checking’ visits Overseeing external monitors and auditors where used Checking rewards and performance systems take compliance into consideration Differences between domestic and international HRM Domestic HRM is done at national level and IHRM is done at international level. Domestic HRM is concerned with managing employees belonging to one nation and IHRM is concerned with managing employees belonging to many nations (Home country, host country and third country employees) Differences between domestic and international HRM Domestic HRM is concerned with managing limited number of HRM activities at national level and IHRM additional has concerned activities such with managing as expatriate management. Domestic HRM is less complicated due to less influence from the external environment. IHRM is very complicated as it is affected heavily by external factors such as cultural distance and institutional factors. REFERENCES: HRM - International. (2021). Tutorialspoint.com. https://www.tutorialspoint.com/human_resource_management/human_resource_man agement_international.htm B, S. (2019, April 26). International Human Resource Management: Meaning, Need, Challenges and Issues. Essays, Research Papers and Articles on Business Management. https://www.businessmanagementideas.com/international-human-resourcemanagement/international-human-resource-management/19613 Thank You! CBM (288)- WEEK 8-9