International Human Resource

Management

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 Human Resource Management (HRM)
• HRM is the set of activities directed at attracting,
developing, and maintaining the effective workforce
necessary to achieve a firm’s objectives.
• HRM includes recruiting and selecting non-managers and
managers, providing training and development, appraising
performance, and providing compensation and benefits.
• An international firm have to customize its hiring, firing,
training, and compensation programs on a country-by-
country basis because of differences in cultures, levels of
economic development, and legal systems among the
countries in which a firm operates.
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International HRM Process
HRM’s Strategic Context

Recruitment and Selection

Training and Development

Performance Appraisal

Compensation and Benefits

Labor Relations

Contribution to Organizational Effectiveness

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International Staffing Needs

Managerial/Executive
Employees

Nonmanagerial
Employees

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 International
Organizational Structure
Export Department

International Division

Global Organization

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…International Organizational Structure
(Export Department)

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…International Organizational Structure
(International Division)

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…International Organizational Structure
(Global Organization)

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Expertise Needs in Global Organizations

Product Line

Functional Skills

Individual Country Markets

Global Strategy

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Centralization vs. Decentralization of Control

• Centralized firms
– Favor home country managers
– Most common amongst international division form

• Decentralized firms
– Favor host country managers

– Most common amongst multidomestic firms

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 Staffing Philosophy

Parent
Country Nationals
(PCNs)

Host Country Third Country

Nationals Nationals
(HCNs) (TCNs)

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 Strategies for Staffing
1. Ethnocentric staffing model: Firms that adopt this
approach want to hire parent country nationals based
on the assumption that parent country nationals will
be most effective in representing the views of the
home office in the foreign operation.
2. Polycentric staffing model: Firms that adopt this
approach want to hire host country nationals in the
belief that host country nationals know the local
market best.
3. Geocentric staffing model: Firms that adopt this
approach want to hire the best person available,
regardless of where that individual comes from.
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 Necessary Skills and Abilities
for International Managers

Skills and Abilities Skills and Abilities

Necessary to Do Necessary to Work
the Job in a Foreign Location
• Technical • Adaptability
• Functional • Location-specific skills
• Managerial • Personal characteristics

Improved Chances of Succeeding in

an International Job Assignment

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Recruitment of Managers

Experienced Younger
Managers Managers

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 Selection of Managers
After the pool of prospective managers has been identified,
HR managers must decide which persons from that pool are
the best qualified for the assignment. The most promising
candidates share the following characteristics:
1. Managerial competence (technical and leadership skills,
knowledge of the corporate culture)
2. Appropriate training (formal education, knowledge of the
host market and its culture and language)
3. Adaptability to new situations (ability to deal
simultaneously with adjusting to a new work and job
environment, adjusting to working with host country
nationals, and adjusting to a new national culture)
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 Expatriation and Repatriation Issues
• Expatriation is sending a manager to work in a foreign
country where the person doesn’t have citizenship.
– Culture Shock (a psychological phenomenon that may
lead to feelings of fear, helplessness, irritability, and
disorientation)
• Repatriation is bringing a manager back home after a
foreign assignment has been completed.
– Reversed Culture Shock (a psychological phenomenon
that may lead to unexpected difficulty in readjusting
to the culture and values of the home country, now
that the previously familiar has become unfamiliar)

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 Training and Development
Training is instruction directed at
enhancing specific job-related skills and
abilities. Development is general education
concerned with preparing managers for
new assignments or higher-level positions.
– Assessing training needs
– Basic training methods and procedures
– Developing younger international
managers
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 Performance Appraisal
Performance Appraisal is the process of
assessing how effectively people are performing
their jobs. The following are the functions of
performance appraisals:
1. To provide feedback to individuals about how
well they are doing.
2. To provide a basis for rewarding top
performers.
3. To identify areas in which additional training
and development may be needed.
4. To identify problem areas that may call for a
change in assignment. 18
 Compensation
To remain competitive, firms must provide
prevailing compensation packages for their
managers in a given market. These packages include
salary and non-salary items and are determined by
labor market forces such as the supply and demand
of managerial talent, occupational status,
professional licensing requirements, standards of
living, government regulations, tax codes, and
similar factors.
– Cost-of-living allowance
– Hardship premium
– Tax equalization system 19
 Labor Relations

Comparative Labor Relations

Collective Bargaining

Union Influence and Codetermination

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