Human resource management (HRM) is the set
of activities directed at attracting, developing, and
maintaining the effective workforce necessary to
achieve a firm’s objectives. Recruiting and
selecting employees, providing training and
development, appraising performance, and
providing compensation and benefits are all part of
What is IHRM
International HRM is the process of
procuring, allocating and utilizing human
resource in an a global firm.
Differences in culture, levels of
economic development, and legal
systems among countries may force
changes in HRM systems
Why International Human Resource
Increasing globalization, firms and employees in them
moving all over the world.
Major problems in international operations because of
human resource management
The role of HR in International Operations
Managing a Multicultural Workforce
Developing Managerial Talent in a Global Business
Main challenges in IHRM
Different labor laws
Different political climate
Different stage(s) of technological advancement
Different values and attitudes e.g. time,
achievement, risk taking
Roles of religion e.g. prayer, taboos, holidays, etc
Educational level attained
Social organizations e.g. social institutions,
Necessary Skills and Abilities for
Skills and Abilities
Necessary to Do
Skills and Abilities
Necessary to Work
In a Foreign Location
Improved Chances of Succeeding in
An International Job Assignment
Scope of Internationalization
Size of staffing tasks depends on scope of firm’s
Centralization versus Decentralization of Control
Favor home country managers
Favor host country managers
Most common amongst multi domestic firms
Major Areas of IHRM
The management of human resources in global
The management of expatriate employees
The comparison of HRM practices in a variety
of different countries
Questions for HR professionals
• Do we have a strategy for becoming an international firm?
• What type of managers will we need to be successful?
• How can I find out about the way that HRM is conducted
in other countries (laws, trade unions, labor market).
• What will be the impact of cultural norms on our HR
• How will we choose whether to send expatriates or use
• How do we move people to different locations
• How do we manage transfer of knowledge across borders
The international HRM process involves
understanding the strategic context of HRM within
the firm’s overall strategy, recruiting and selecting
appropriate managerial personnel, providing
necessary training and development, assessing
performance, providing compensation, and evaluating
managerial retention and turnover.
International Managerial Staffing Needs
Most firms begin their international expansion with small-
scale exporting. Thus, during a firm’s initial foray into
foreign markets a home-country citizen, who may or may
not have special training in working in foreign markets,
usually manages the firm’s international transactions.
Later when the firm establishes an international
department, subsidiary managers (usually host country
citizens) report to the authority of the international
division (usually a home country citizen).
As a firm further expands its operations in a global
organization, a team of managers with expertise in the
firm’s product lines, necessary functional skills, individual
country markets, and the firm’s global strategy is usually
Control and co-ordination by
HQ is maintained.
Promising managers get
PCNs may be the best people
for the job.
Assurance that the
subsidiary will comply with
company objectives policies
opportunities are limited.
Adaptation to host country
may take a long time.
PCNs may impose an
inappropriate HQ style.
between PCNs and HCNs may
No problems with language
Reduced hiring costs.
No work permits required.
Continuity of management
improves since HCNs stay
longer in positions.
Govt. policy may force
hiring of HCNs.
not limited - so higher
morale among HCNs.
HQ may have less control
HCNs may still have limited
outside the subsidiary.
Hiring HCNs limits
opportunities for PCNs to
gain overseas experience.
Hiring HCNs may
encourage a federation of
disintegrated national units
rather than one integrated
compensation may be
lower than for PCNs.
May be more familiar
with host country than
Host government may
resent TCNs as much
TCNs may not comply
with HQ style of
TCNs may not want to
Complications for IHRM
compared to HRM
Firms must decide whether managers will be
selected from the home country, from the host
country or from third countries.
Training and development in an international firm
may be more complex than in a domestic firm.
Compensation systems must be adapted to meet
the needs of each country’s labor market.
Complications for IHRM compared
International HR managers face a more complex task
than their domestic counterparts because differing
cultures, levels of economic development, and legal
systems among countries may require companies to
adapt their hiring, firing, training, and compensation
programs to each country.
Major differences between domestic HRM and IHRM
Business activities e.g. taxation, international relocation,
expatriate remuneration, performance appraisals, cross-
cultural training and repatriation
Increased complexities e.g. currency fluctuations, foreign
HR policies and practices, different labor laws
Increased involvement in employee’s personal life e.g.
personal taxation, voter registration, housing, children’s
education, health, recreation and spouse employment
Complex employee mix – cultural, political, religious,
ethical, educational and legal background
Increased risks e.g. emergency exits for serious illness,
personal security, kidnapping and terrorism