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