Contemporary Issues in

HRM
-Heli Shah
Sources of Global recruitment
• Parent company
• Host country
• Third country national
Parent Country Nationals
Parent Country Nationals (PCNs) are employees (of a company or its
subsidiaries located in various countries) who are citizens of the country
where the company’s headquarter is located. PCNs in international
business normally are managers.

They visit subsidiary companies and operations –

to help them in carrying out their operations

to make sure that they run smoothly
to provide advice and control
Parent Country Nationals
Advantages:

o Familiarity with the home office, goals, objectives, policies and practices.
o Easy organisational control and coordination.
o Promising managers are given international exposure.
o PCNs are the best people for assignment because of special skills and
experiences.
Parent Country Nationals
Disadvantages:

o Difficulty in adapting to the foreign language and the socio-economic,

political, cultural and legal environment.
o Excessive cost of selecting, training and maintaining expatriate managers and
their families abroad.
o Promotional opportunities for HCNs are limited.
o PCNs may impose an inappropriate HQ style.
o Compensation for PCNs and HCNs may differ.
o Family adjustment problems, especially concerning the unemployed spouses.
Host Country Nationals
Host Country Nationals (HCNs) are the employees of the company’s subsidiary who
are the citizens of the country where the subsidiary located.

Advantages:

o Familiarity with the socio-economic, political and legal environment and with business practices in the
host country.
o Lower cost incurred in hiring as compared to PCNs and TCNs.
o Promotional opportunities to locals and consequently their motivation and commitment.
o Responds effectively to the host country’s demands for localisation of the subsidiary’s operations.
o Languages and other barriers are eliminated.
o Continuity of management improves, since HCNs stay longer in positions.
Host Country Nationals
Disadvantages:

o Difficulty in exercising effective control over the subsidiary’s operations.

o Communication difficulties in dealing with home office personnel.

o Lack of opportunity for the home country’s nationals to gain international and cross-cultural
experience.
o HCNs have limited career opportunity outside the subsidiary.

o Hiring HCNs may encourage a federation of nationals rather than global units.
Third Country Nationals
Third Country National (TCN) is an employee of a company’s
subsidiary located in a country, which is not his home country. The
software professionals of India who work in American subsidiaries
located in any European country.
 
Advantages:
o Salary and benefit requirements may be lower than for PCNs.

o TCNs may be better informed than PCNs about host country environment.

o TCNs are truly international managers.

Third Country Nationals
Disadvantages:
o Host country government may resent hiring TCNs.

o TCNs may not want to return to their own countries after assignment.

o Host country’s sensitivity with respect to nationals of specific countries.

o HCNs are impeded in their efforts to upgrade their own ranks and assure responsible positions
in the multinational subsidiaries.
Global staffing approaches and techniques

• Ethnocentric

• Geocentric

• Polycentric

• Re-giocentric
Ethnocentric Approach
• In this approach, all key management positions are held by parent-
country nationals. This strategy may be appropriate during the early
phases of international business, because firms at that stage are
concerned with transplanting a part of the business that has worked
well in their home country.
Ethnocentric Approach
Advantages:
o Better coordination between the host and the parent company.

o The culture of the parent company can be easily transferred to the subsidiary company, thereby
infusing beliefs and practices into the foreign country.
o Effective control over the subsidiary.

o The parent company can have a close watch on the operations of the subsidiary.

o Better transfer of technical know-how.

o Effective communication between the host and the parent company.

o No need to have a well-developed international local labour market.

Ethnocentric Approach
Disadvantages:
o The staff of the parent country may find it difficult to adjust in the host country due to the cultural differences.

o Difficulty in guiding employees living far away from the parent country.

o Missed out the opportunity to hire the best personnel from the host country.

o The cultural clashes between the executives of parent country and the staff members of the host country.

o The expatriates from the parent country are much expensive as compared to the employees in the host

country.
o The government restrictions in the host country may hamper the business of the parent company.

o The failure rate is very high.

Polycentric Approach
• The polycentric staffing requires host-country nationals to be hired to manage
subsidiaries, while parent-country nationals occupy key positions at corporate
headquarters. Although top management positions are filled by home-country
personnel, this is not always the case. For example, many US MNCs use home-
country managers to get the operations started, then hand them over to the host-
country managers. Hindustan Uniliver Ltd (HUL), the Indian subsidiary of
Uniliver, has locals as its chiefs.
Polycentric Approach
Advantages:
o The difficulty in the adjustment of expatriates from the parent country gets eliminated.

o The hiring of locals or the nationals of the host country is comparatively less expensive.

o The morale of the local staff increases.

o Better productivity due to better knowledge about the host market.

o The career opportunities for the nationals of the host country increases.

o Better government support.

o Chances of success are high.

Polycentric Approach
Disadvantages:
o Lack of coordination between the host and the parent company, due to the absence of a link that gets
created when expatriates from the parent country hold the managerial positions at the subsidiary.
o The lack of effective communication between the staff members of both the host and the parent
company, due to the language barrier.
o Difficult to exercise control over the subsidiary.

o Lack of knowledge about the market conditions of the host country.

o The conflict may arise between the managers of both the host and the parent company due to the
different thinking processes.
Geocentric Approach
• This staffing philosophy seeks the best people for key jobs throughout the
organisation, regardless of nationality. Selecting the best person for the job,
irrespective of nationality, is most consistent with the underlying philosophy of a
global corporation.

• The rationale behind the Geocentric Approach is that the world is a pool of
talented staff and the most eligible candidate, who is efficient in his field, should
be appointed for the job irrespective of his nationality.
Geocentric Approach
Advantages:
o MNC’s can develop a pool of senior executives with international experiences and contacts
across the borders.
o The expertise of each manager can be used for the accomplishment of MNC’s objective as a
whole.
o Reduction in resentment, i.e. the sense of unfair treatment reduces.

o Shared learning, the employees, will learn from each other’s experiences.
Geocentric Approach
Disadvantages:
o The cost of training, compensation, and relocation of an employee is too
high.
o Highly centralized control of staffing is required.

o Proper scrutiny is required by the HR to select the most suitable person for
the job, which could be time-consuming.
o This approach is very costly since the recruitment agencies or the consultants
are to be hired for the global search for eligible candidates.
Re-geocentric Approach
The Re-geocentric Approach is an international recruitment method
wherein the managers are selected from different countries lying within
the geographic region of business.
Re-geocentric Approach
Advantages:
o Culture fit, i.e. the managers from the same region as that of the host country
may not encounter any problem with respect to the culture and the language
followed there.
o Less cost is incurred in hiring the natives of the host country.
o The managers work well in all the neighbouring countries within the
geographic region of the business.
o The nationals of host country can better influence the decision of managers at
headquarters with respect to the entire region.
Re-geocentric Approach
Disadvantages:
o The managers in different regions may not understand the viewpoint of the
managers employed at the headquarters.
o There could be a communication barrier because of different languages.
o The manager selected from a particular region may lack the international
experience.
o It may lead to the confusion between the regional objectives and the global
objectives. The regional managers may only focus on accomplishing the
regional targets and may oversee the impact on the firm as a whole.
Work Life balance
• Quality of work-life
• Quality of work life (QWL) refers to the favourableness or unfavourableness
of a job environment for the people working in an organization. The period of
scientific management which focused solely on specialization and efficiency,
has undergone a revolutionary change.

• QWL is a process of work organizations which enable its members at all levels
to actively; participate in shaping the organizations environment, methods and
outcomes. This value-based process is aimed towards meeting the twin goals
of enhanced effectiveness of organizations and improved quality of life at
work for employees.
QWL and Productivity
Organizations which help employees balance their work and lives outside the work can improve
productivity. A company’s recognition and support — through its stated values and policies — of
employees’ commitments, interests and pressures, can relieve employees’ external stress.
 
This allows them to focus on their jobs during the workday and helps to minimize absenteeism. The result
can be both enhanced productivity and strengthened employee commitment and loyalty.
 
Job involvement leads to job commitment and job satisfaction. People whose interests are protected by
their employers experience high degree of job satisfaction. This improves job output.
 
Companies with QWL have employees with high degree of job involvement. People put their best to the
job and report good performance. They achieve a sense of competence and match their skills with
requirements of the job. They view their jobs as satisfying the needs of achievement and recognition. This
reduces absenteeism and turnover, thus, saving organisational costs of recruiting and training replacements.
Work place violence
(sexual, alcoholism, drug abuse)
• Workplace violence is any act or threat of physical violence, harassment,
intimidation, or other threatening disruptive behaviour that occurs at the work site.
It ranges from threats and verbal abuse to physical assaults and even homicide. It
can affect and involve employees, clients, customers and visitors.
HR records
• HR Records provide information on various aspects of HR. Records refer to informational documents utilised by an
organization to carryout its functions. These aspects include data about employment, wage and salary levels, absenteeism,
productivity, employee exit or turnover, social security, employee welfare, job satisfaction and morale surveys. 

 Purpose:
o Help managers to identify, prepare and implement training programmes for employees and executive development for
managers.
o Facilitates in decision making in respect of transfer, promotion, demotion, redeployment etc.
o Helps in preparing wage and salary sheets.
o Enables to provide information relating accidents, absenteeism, labour turnover, wages and salaries to governmental
agencies.
o Facilitates human resource audit.
o Enable research in human relations.
o Provide knowledge about validity of employment tests and interviews.
o Maintain data in respect of leaves, training, promotion, transfer, layoffs, dismissals, expenses incurred on employee
benefits etc.
HR Audit
• Personnel audit refers to an examination and evaluation of policies, procedures
and practices to determine the effectiveness of personnel management.

 Objectives:
o To review every aspect of management of HR to determine the effectiveness of
each programmes in an organisation.
o To seek explanation and information in respect of failure and success of HR.
o To evaluate implementation of policies.
o To evaluate the performance of personnel staff and employees.
o To seek priorities, values and goals of management philosophy.
HR Audit
 Need:
o The managements of organisations have realized the need for HR audit because of powerful
influence on motivation of employees at work due to participation of employees in decision
making.
o Growth of organisation needs HR audit. Large organisation requires continuous feedback for
improvement in performance of its employees.
o Mounting pressures from trade unions of employees and their participation in formulating
employment policy and questioning of managerial competence have raised the need for HR
audit.
o An effective two-way communication system has also facilitated the need for HR audit.
o Many plants are located at large distances. This also made the HR audit compulsory.
o The HR audit becomes essential because of delegation of authority and decentralization of
power.
HR Audit
 Types of Audits:

• An HR audit can be structured to be either comprehensive or specifically focused, within the constraints
of time, budgets and staff. There are several types of audits, and each is designed to accomplish different
objectives. Some of the more common types are:

o Compliance: Focuses on how well the organization is complying with current federal, state, and local
laws and regulations.
o Best practices: Helps the organization maintain or improve a competitive advantage by comparing its
practices with those of companies identified as having exceptional HR practices.
o Strategic: Focuses on strengths and weaknesses of systems and processes to determine whether they
align with the HR department's and the organization's strategic plan. See Engaging in Strategic Planning.
o Function-specific: Focuses on a specific area in the HR function (e.g., payroll, performance
management, records retention).
HR Audit
 Areas of HR Audit:

o Mission statement relating to HRM

o Objectives, Goals and strategies of HRM
o Accomplishments of HRM
o Programmes of HRM including detailed practices and procedures.
o HRM Policies
o HRM philosophy, policies and its values
o Responses of employees, trade unions and government to the practices and achievements.
o Role of HRM in total quality management
o Role of HRM in achieving organization’s mission, objectives, goals and strategies.
HR Research
• HR Research identifies and analyses the problems and develops solutions.

 Objectives:

o It seeks to evaluate the present position in the concerned area of research.

o It facilitates prediction of future events and behavioural patterns.
o Evaluation of current programmes, practices and policies is possible through HR research.
o It prepares objective base for revision of current organisational programmes, practices and
policies.
o It paves ways and means for building up of capabilities and attitudes of employees regularly.
o It facilitates evaluation of proposed HR policies and programmes.
o It facilitates change, enables management to replace old techniques with the new ones.
HR Research
 Characteristics:

o HR research is purposeful.
o It is objective. It gives recognition to the limitations, prejudice or bias in its process.
o It is systematic. It uses the scientific methodology of research.
o HR research is parsimonious. It identifies methods and techniques for the solution of the problems with
minimum cost.
o It is frugal. The research conducted to find out solutions to the problems of Human Resources at the
minimum cost.
o HR is conducted by different researchers at the same time.
o HR research is well planned and properly designed activity.
o HR research is conducted systematically.
o Through HR research addition to the knowledge is made.
HR Research
 Need for HR Research:

o To build upon existing knowledge

o Evaluation of proposed programmes, practices and activities
o Evaluation of current and new policies and practices.
o Anticipation of personnel problems
HR Research
 Approaches to HR Research:

o Historical Studies
o Case studies
o Survey Research
o Statistical Studies
o Mathematical models
o Simulation models
o Field/ Action research
o Exploratory studies and
o Experimental studies
HR Research
 Process of HR Research:

o Formulation of problem
o Selection of Hypothesis
o Formulation of Objectives
o Design of experiment/ enquiry
o Description of methodology including sampling procedures
o Collection of primary and secondary data
o Preparation of working guide
o Analysis and interpretation of data
o Report writing and submission to the top management for action