INTERNATIONAL HUMAN RESOURCE

Human Resource Management

Human Resource Management (HRM) involves all management decisions and practices that directly affect the people who work for the organization.
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A Definition of Human Resource Management

Human represents the dimension of HRM which relates to the soft aspects such as commitment of employees through participation and the most important assets being the employees. employees.  Resource represents the hard aspects such as the strategy link of HRM and the importance of efficient utilization of employees. employees.  Management represents the role of HRM as part of management that implies that it s not only an administrative function that carries out the formulated policies but also a managerial function that contributes to strategy formulation. formulation.

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Why International Human Resource Management?

 Increasing

globalization, firms and employees in them moving all over the world.  Major problems in international operations because of human resource management blunders  Hence need to understand human resource management in a global perspective
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Why International Human Resource Management? (cont d)

 Managing

a Multicultural Workforce  Developing Managerial Talent in a Global Business Environment

The General Field of HR



Major Functions and Activities

 Human  Staffing
 Recruitment  Selection  Placement

resource planning

 Performance

appraisal  Training and development  Industrial relations

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International Recruitment and Selection

Recruitment Defined as searching for and obtaining potential job candidates in sufficient numbers for and quality so that the organization can select the most appropriate persons for its job needs. Selection Defined as the process of gathering information for the purposes of evaluating and deciding whom should be employed in particular jobs.

Types Of International Staffing Policy Ethnocentric

All key managerial positions are filled by parentparentcountry nationals. Consistent with international strategy Disadvantage: cultural myopia The cultural differences & environmental differences will be huge and expatriates may not be able to cope up with. Thus resulting in costly management mistakes. e.g., Procter & Gamble Associate with higher incidence of IHRM problems
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Types Of International Staffing Policy

Polycentric
Key positions are filled with Host country nationals. Host country nationals manage subsidiaries Consistent with multi domestic strategy Disadvantage: create a gap between home and host operations

Geocentric or global
Best managers are recruited from within or outside the company regardless of nationality, TCN s used by European MNC s, some U.S. companies (Philips, Heinz, Unilever, IBM) Help build an informal management network Disadvantage: may be subject to the immigration policies

Types Of International Staffing Policy

Regiocentric
Recruiting on a regional basis. For example, a U.S. based firm could create three regions; Europe, the Americas, and Asia-pacific. AsiaEuropean staff would be transferred throughout the European region (say a Briton to Germany, a French national to Belgium, and a German to Spain). E.g.: Ford Motor Company. Disadvantage: produce federalism at a regional rather than a country basis and constrain the organization from taking a global stance.
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Selecting Staff for International Assignments

Selecting staff for international assignments is a complex undertaking for several reasons, including:
    

Identifying a suitable person for the assignment Predicting his or her performance in a new, culturally potentially very different environment Dealing with personal and family-related issues familyand problems Devising an appropriate compensation package Complying with host country regulations

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Criteria for Selecting Staff for International Assignments

Technical Ability Cross-Cultural Suitability Family Requirements

SELECTION DECISION

Country-Cultural Requirements Language

Organization-Specific Requirements

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The Staff Selection Criteria (Technical Ability)



Technical and managerial competencies of the person to perform the required tasks Research studies indicate that technical ability are the most important selection criteria for organizations Usually easy to evaluate on the basis of past performance

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The Staff Selection Criteria (Cross(Cross-Cultural Suitability)



Certain individual traits and characteristics can have an impact on the success or failure of an international assignment cultural empathy, adaptability, diplomacy, language ability, positive attitude, emotional stability, and maturity Ability to implement technical and managerial skills and feel reasonably comfortable in a foreign environment
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Sometimes difficult to determine

The Staff Selection Criteria (Family Requirements)

 

Spouse may not adjust to a foreign environment Adjustment level of spouse depends on several factors, such as the adjustment of the expatriate and the spouse s own opinion of the international assignment A higher level of organizational support in the early stages of expatriation usually correlates with a higher level of adjustment by the spouse
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The Staff Selection Criteria (Country(Country-Cultural Requirements)



Hardship Postings (Remoteness of job location, social upheavals, safety risks, very low standard of living and lack of recreational opportunities etc.) Pressure of living in repressive cultures and countries (e.g. China, Saudi Arabia and other totalitarian Islamic states in the Middle East) Denial of work permits to female expatriates
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The Staff Selection Criteria (Organization(Organization-Specific Requirements)

Situational Factors influence staff selection. Examples:


Organization s staffing approach may require sending more expatriates to work in certain regions and locations than otherwise Partner organizations may be involved in the selection of expatriate staff, for example, on international joint ventures Certain specific skills, for example, training, may be used as a selection criteria
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The Staff Selection Criteria (Language)



Important situational factor. Knowledge of the host country s language is considered critical for many senior-level positions along with the ability seniorto communicate effectively Knowledge of the host country s language helps expatriates and their families feel more comfortable in the new environment
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The Staff Selection Criteria (Other Considerations 1)

Time Unexpected international vacancies may arise for which positions have to be quickly filled by expatriates and which may preclude the use of screening tests Family - A potential expatriate may refuse the international assignment due to family considerations (children s welfare and education, parental care, single parents)
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The Staff Selection Criteria (Other Considerations 2)

DualDual-Career Couples Research studies undertaken reveal that many potential expatriates are reluctant or unwilling to take on international assignments because of the career implications for their spouses, e.g. loss of jobs and career opportunities, difficulty in finding new employment in the expatriate s host country Some companies are now offering assistance programs for the benefit of their expatriates spouses (employment hunting, networking, intraintracompany employment, commuter marriages and onon-assignment career support)

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The Staff Selection Criteria (Other Considerations 3)

Female Managers Studies reveal that female expatriates make up a very small proportion (< 10% percent) of the total expatriate population. Possible reasons are:
    

Females are less desirous than males of international assignments Females are less likely to be offered international assignments There are a comparatively smaller number of females with the requisite skills to be sent on international assignments Many repressive cultures discourage the sending of female expatriates, and In many repressive cultures males do not like reporting to females
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Types of employees

What does IHRM add into the Traditional Framework of HRM?

workforce diversity

 Within and cross-cultural cross Coordination  Communication

Human resource activities

 Procurement  Allocation  Utilization of human

resources

Nation/country categories where firms expand and operate

 Host country  Parent country  Third country
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Some Terms Defined

Host Country National (HCN): Belongs to (HCN): the Country where the subsidiary is located  Parent Country National (PCN): Belongs to (PCN): the Country where the firm has its headquarters  Third Country Nationals (TCN): Belongs to (TCN): any other country and is employed by the firm

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What is an expatriate?
An employee who is working and temporarily residing in a foreign country
Some firms prefer to use the term international assignees Expatriates are PCNs from the parent country PCNs operations, TCNs transferred to either HQ or TCNs another subsidiary, and HCNs transferred into HCNs the parent country
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The Expatriate Problem

High Expatriate Failure Rates  Average cost per failure to the parent firm can be as high as three times the expatriate s annual domestic salary plus the cost of relocation  Between 16% & 40% of all American employees sent abroad to developed nations, and almost 70% sent to less developed nations return home early

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The Reasons for Expatriate Failure

Lack of technical competence Personal or emotional problems Managers Personal or Emotional Maturity Spouses Inability to Adjust

Difficulties with the new environment Inability to Cope With Larger International Responsibility Managers Inability to Adjust

Other Family Reasons

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Expatriate Failure
The selection process in international firms is particularly important because of the high cost of expatriate failure. failure. Expatriate failure is the early return of an expatriate manager to his or her country because of an inability to perform in the overseas assignment. assignment. The cost of expatriate failure ranges between $40,00040,000$250,000. 250,000. Expatriate failure rates may be as high as 20-50 percent 20in many U.S. companies, higher than for either European or Japanese companies.

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Performance Appraisal

A communication tool to measure each individual's contribution



To evaluate talent and achievement with sensible consistency and accuracy To help distinguish barriers to top performance
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Why Appraise Performance



Periodic evaluation helps mangers to have a better understanding of each employee's skills with the goal to facilitate, train and develop abilities and power to their employees


A chase to assess job development, encourage interest and enhance job performance by pointing out the development and recognizing productive work

A feedback system that might otherwise be overlooked

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Performance Management
An iterative process of goal-setting, communication, goalobservation and evaluation to support, retain and develop exceptional employees for organizational success.

Set Goals

Communicate

Evaluate

Observe
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Rating Scale

4 - Excellent (Exceeds Standards) 3 - Good (Fully Meets Standards) 2 1 Acceptable (Usually Meets Standards) Unsatisfactory (Fails to Meet Standards)
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Training and Development

Training = Altering behavior  Development = Increasing knowledge  Learning = Permanent change in behavior


Types of Training
Lectures Programmed instructions Audio-Visual Computer assisted
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Reasons for Training

Turnover  Change in program  Needs of organization or personnel  Cost effectiveness  Employee promotion and advancement


Results or Outcomes
Increased quality and quantity of work performance  Decrease accidents  Increase knowledge, skills attitudes  Decrease costs of management  Decrease absenteeism and turnover rates  Increase job satisfaction - production


INDUSTRIAL RELATIONS
1. IR is a relationship between management and employees or among employees and their organizations, that characteristics and grow out of employment. employment. 2. IR may be defined as the complex of interinterrelations among workers, managers and government. government.

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Objective of IR
1. 2.

3.

4.

To promote and develop labor management relation. To regulate the production by minimizing industrial conflicts To provide opportunity to workers to involve in decision making process with management. To encourage and develop trade unions in order to improve the workers' strength.

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Differences between Domestic HRM and IHRM

    

More HR activities: taxation, culture activities: orientation, administrative services The need for a broader perspective: cater to perspective: multiple needs More involvement in employees personal lives: lives: adjustment, spouses, children Risk exposure: expatriate failure, terrorism exposure: Broader external influences: government influences: regulations, ways of conduct
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Choosing an Approach to IHRM

Political and Legal Concerns  Level of Development in Foreign Locations  Technology and the Nature of the Product  Organizational Life Cycle  Cultural Differences

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