This document discusses international human resource management and recruitment. It begins by outlining core functions of IHRM including recruitment, selection, expatriates, performance appraisal, training, compensation, women in business, dual career groups, industrial relations, trade unions, and participative management. It then discusses recruitment in more detail, explaining sources at the macro level (country) and micro level (institutional). The main approaches to recruitment that multinational companies use are also summarized: ethnocentric (parent country nationals), polycentric (host country nationals), regiocentric (regionals), and geocentric (global/any nationality). Advantages and disadvantages of each approach are provided. Specific recruitment

1. International Human Resource
Management

2. Core Functions of International Human
Resource Management
1. Recruitment
2. Selection Process
3. Expatriates
4. Performance Appraisal
5. Training and Development
6. Compensation
7. Women in International Business
8. Dual Career Groups
9. International industrial Relations
10. Concerns of Trade Unions
11. Participative Management

3. Recruitment
• Recruitment sources from the international human
resource management { IHRM } point of view can be
studied under two levels
• Macro-level – the country from which the human resources
are procured and
• Micro-level- institutional sources within a country from
which human resources are sourced.
• Organizations involved in international human resource
management are essentially two types.
• 1] MNCs and 2] domestic companies.
• These organizations search for prospective employees both
from within the country of operation and outside the
country.

4. Global Recruitment
• Recruitment means the searching for a prospective
candidates and stimulating them to apply for jobs.
• IT depends on the Recruitment information given by
company is important
• Recruitment helps the global company in finding out
the candidates for actual or anticipated vacancies in
the company
• Sources of Global Recruitment:
1. Parent Country Nationals
2. Host Country Nationals
3. Third country Nationals

5. Parent country nationals (PCN)
• They are the Citizens of the country where the
company’s head quarters are located
• Managers, Heads of Subsidiary companies,
technicians, experts and trouble –shooters.
• They visits subsidiary companies and operations-
To help them in carrying out their operations
To make sure that they run smoothly
To provide advice and control them
• Sending parent country nationals involves cost
and causes ego and cultural problems

6. Host Country nationals (HCN)
• They are the employees of the company’s subsidiary who are the citizens of the
country where the subsidiary is located
• Advantages:
 They are familiar with native culture
 They are familiar with local business norms and practices
 They manage and motivate the local worker efficiently
 They are familiar with local bureaucrats, market intermediaries and suppliers of
inputs
 Familiar with the taste and preference of local customers
• Disadvantages:
 They are unaware of the needs of head quarters
 They are not familiar with objectives, goals and strategies of the parent company
 They view the company only from the local perspective rather than from the
global perspective
 It would be difficult to train the host county nationals due to variations in the
views about achievement, equity, the work ethic and productivity of the host
country nationals from those of the parent country national

7. Third Country Nationals(TCN)
• Mr.Rahul-an Indian citizen-is working for an American Subsidiary in France.
Mr. Rahul is called third country national
• Third country national is an employee of a company’s subsidiary located in
a country, which is not his home country
• E.g.: Software processionals of India who working American subsidiaries
located in various countries of Europe are called third county national
• Advantage:
 Less cost with required expertise, skill knowledge and foreign language
skills
 Less risk of employing an Indian third national who speaks English Fluently
 They have a cultural fit due to their work experience in multicultural
environment
• However the local government may impose conditions and regulate in
employing third country nationals.

8. Recruitment Sources at Macro Level
• Ethnocentric Approach / Parent Country Nationals
• Under ethnocentric approach MNCs at their headquarters
formulate mission, objectives, strategies, product design etc. and
also make important decisions for the subsidiaries and expect the
subsidiaries to implement them and report back to all functional /
line managers at headquarters level.
• They assume that policies , systems that work in parent country will
also work in host countries, in subsidiaries. Therefore ,these MNCs
source human resources from parent country nationals.
• PCN are preferred as they are trustworthy [unlike other nationals] ,
possess skills necessary to carry dynamic business, have a sense of
belonging and commitment that would improve the business,
enhance marketing and financial performance.

9. Why do MNCs Prefer Ethnocentric
Approach?
• Non-availability of qualified personnel in host [particularly
developing] countries.
• Availability of qualified personnel at relatively less cost in
the home country.
• High cost of host country nationals for certain class of
employees particularly in advanced countries like US, UK,
etc.
• Home country nationals when working in foreign country
are more committed to the implementation of the
company’s strategies than those of the host country.
• Home country nationals when employed in host country
exhibit highest sense of belonging to the company than
that of host country.

10. When Should MNCs Prefer Parent
Country Nationals { PCN }?
• During the early stage of the establishment of
subsidiary.
• Inadequacy of managerial and technical skills in the
host country.
• Greater need for maintaining close communication and
coordination with headquarters.
• Greater need for maintaining uniform corporate
culture.
• When the headquarters has core competencies in
terms of skills and knowledge
• When home country nationals are less costly than host
country nationals

11. Advantages of Parent Country
Nationals { PCN }
• Parent country nationals are familiar with company
goals, strategies, tactics, policies and procedures.
• Parent country nationals are more knowledgeable of
the company’s products, technology, customer needs
and problems and customer service issues.
• Parent country national maintain close communication
and coordination with head quarters
• Parent country nationals have close personal network
with headquarters' employees and therefore, they can
 Get things in headquarters easily
 Network with headquarters easily.

12. Disadvantages of Parent Country
Nationals { PCN }
• Absence of opportunities for host country
nationals to get better / managerial jobs.
• Reduction in opportunities for human resource
development of host country nationals .
• Under employment of host country’s employees.
• Decline in morale of and loyalty of host country
nationals towards MNCs
• Poor adaptation and lack of effectiveness of
home country nationals in host country . PCN are
insensitive to local culture and this practice
underutilizes non-PCN talent.

13. Polycentric Approach
• MNC under polycentric approach treats each subsidiary
as an independent company and decentralizes almost
all the operations and delegates decision making
authority to its executives.
• Executives of the subsidiary formulate strategies based
on mission and vision of the subsidiary, design the
products / services based on host country’s
environment and exclusive preferences of host country
consumers.
• MNC sources employees including senior managers for
the subsidiary, from the host country nationals.
• Later PCN provide training and develop HCN managers.

14. Why do MNCs Prefer Polycentric
Approach?
• MNCs follow the policy of developing and helping the
nationals of the country , where the subsidiary is
located.
• MNCs feel their responsibility and discharge the same
towards the society /community of the country where
subsidiary doing business.
• To reduce the cost of human resources by recruiting
the host country nationals due to the high cost of
expatriates relative to nationals of the host country.
• Host country nationals fit to the culture of customers.
• MNCs prefer to become ‘global’ companies – think
globally and act locally.

15. When Should MNCs Prefer Host
Country Nationals { HCN }?
• During the growth stage of the subsidiary.
• When human resources of the host country are
developed and fully qualified to take up the jobs
of the subsidiaries of the MNC.
• When the language, culture, customs, ways of
serving customers and modes of doing business
are distinctive in host country.
• When cost of expatriates is abnormally high
affecting profitability of the subsidiary adversely.
• When host country Government stipulates a
certain % for employment of HCN

16. Advantages of Host Country Nationals
{ HCN }
• HCN are less costly than expatriates in all developing
countries.
• HCN have better knowledge of the country’s culture,
customs, language, serving the customers and way of
doing the business compared to those of expatriates.
• HCN have fast and effective adaptability to the
business subsidiary as well as its organizational culture.
• When MNCs enter foreign market by acquiring existing
business in foreign country.
• Enhanced job satisfaction of employees of subsidiary
• Appreciation of MNC by host country & its
government.

17. Disadvantages of Host Country
Nationals { HCN }
• Complexity in coordination of activities, accounts, financial
statements etc.
• Managers of headquarters cannot have hands on
experience of the subsidiaries’ business practices and vice
versa.
• Limits the mobility of employees within the subsidiary as
well as headquarters.
• Organizational culture of parent company cannot be
adapted in subsidiaries .
• Work culture of parent company and subsidiary cannot be
exchanged.
• Employees in HQ & subsidiary do not feel they are of
working in a single company.

18. Regiocentric Approach
• After establishing operations in a host country, MNC often
commence exports from that country to its neighbouring countries.
MNC in India exports to Sri Lanka, Bangladesh or Nepal under this
regiocentric business approach.
• Similarly the subsidiary sources its employees from the region
where it is located.
• Why do MNCs prefer Regiocentric Approach?
• 1. Non-availability of qualified personnel in required number in the
host country.
• 2. Persons from the neighbouring countries possess similar culture.
• 3. Availability of qualified candidates in the region at lesser cost
compared to PCN.
• 4. More sense of belonging and commitment relative to PCN.

19. When should MNCs prefer Regiocentric
Approach?
• During transition between growth and maturity
stages.
• When subsidiaries expand their operations to the
neighbouring countries through direct and
indirect exports.
• Inadequacy of managerial and technical skills in
host country consequent on increase in demand
for such skills.
• When neighbouring country nationals with
required skills are available at less cost compared
to that of the host country nationals.

20. Advantages of Regiocentric Approach
• Cultural familiarity of the candidates with that of the
host country.
• Less cost of staff compared to parent country nationals.
• Subsidiary can perform efficiently in neighbouring
countries by recruiting nationals from those countries.
• Greater loyalty and commitment towards the
subsidiary.
• Stability in employment of neighbouring country
nationals relative to other foreigners.
• Can employ talented and skilled people from host &
other countries.

21. Disadvantages of Regiocentric
Approach
• Subsidiary cannot get highly qualified and
suitable candidates.
• Subsidiary cannot fully satisfy the host country
nationals in human resource development and
employment..
• Subsidiary cannot reduce the cost of human
resource to the lowest extent.
• Neighbouring country nationals may search
for jobs in other MNCs in other countries.

22. Geocentric Approach / Global
Recruitment Approach
• Under geocentric business approach, the entire world is
just like a single country for MNCs. They source all kinds of
inputs like materials, parts finance, human , technology and
equipment from all countries in the world based on
exclusive business principles of procuring the best quality
at the lowest price and market the products / services in
the entire world where ever the product can be sold at
more favourable terms and conditions.
• Under geocentric approach to recruitment , MNCs source
for the best prospective employees in terms of suitability
for the job from the entire world, regardless of nationality
or ethnic group or any other consideration. US
multinationals have geocentric approach to recruitment of
even CEO of their organization.

23. Advantages Geocentric Approach to
Recruitment
• Competent Pool :
• Helps attracting most qualified people willing to serve globally,
maintain a pool of applicants and select the best among them.
• Shared Learning:
• The competent employees who work in subsidiaries and
headquarters throughout the world share and transfer their skills to
other employees of the MNC, which in turn, leads to human resource
development , career and succession planning and development.
• Core Competencies:
• MNC can develop core competencies as well as distinctive
competency in skills, talent and knowledge and compete successfully.
• Flexibility and Adaptability:
• Helps develop global culture that brings flexibility and adaptability,
bilingual and multi lingual skills that suit various situations.

24. Advantages Geocentric Approach to
Recruitment
• Reduction in Resentment:
• It brings third country nationals who invariable bring
acceptance between parent country and host country
nationals in case of top level positions.
• Best talent at Less Cost:
• MNCs can place adequate emphasis on reduction in
the cost of staff at the same time recruiting talent in
case of geocentric approach.
• Transpatriates– MNCs with global approach recruit the
people from any country. Such employees are termed
‘transpatriates’ , replacing the term expatriates. They
offer varied benefits to the MNC

25. Disadvantages Geocentric Approach to
Recruitment
• Immigration controls by host country Government :
• Host country desires MNCs to employ nationals and therefore
imposes restrictions on employment of foreigners.
• Immigration Formalities:
• Many advanced and some developing companies lay down
unnecessary and time consuming formalities , documentation and
high fee for recruiting and employing foreign nationals.
• Opposition from Nationals:
• People from host country oppose geocentric approach as it robs
them of job opportunities.
• Nationals from advanced countries like USA & UK have also
organized protests against geocentric policies.
• Additional Costs:
• Extra costs of training in culture, language etc.

26. Recruitment Sources at Micro Level:
Centralised vs decentralised
• Merits of centralized recruitment
• Under centralized recruitment candidates for headquarters
and subsidiaries are recruited at headquarters.
• Merits of this system are –
• 1. Least cost of recruitment per candidate/unit due to
scale.
• 2. Recruitment by experts.
• 3. Uniform standards of education, skill, knowledge, talent
etc. in recruitment.
• 4. Malpractices, abuse of power, favouritism, nepotism
avoided.
• 5. Facilitates interchangeability of staff.

27. Recruitment Sources at Micro Level:
Centralised vs decentralised
• Merits of decentralized recruitment
• 1. Subsidiary sources candidates from its normal channels and thereby
reduces cost of recruitment.
• 2. Subsidiary gets most suitable candidates as it is fully aware of its
requirements of the jobs regarding cultural, traditional, family
background aspects, local factors, social factors etc.
• 3. The subsidiary can recruit candidates as and when they are required
without any delay.
• 4. The subsidiary would enjoy freedom in finding out , developing the
source, in selecting and employing techniques to stimulate the
candidates.
• The subsidiary would relatively enjoy advantage about the availability
of information, control and feedback and various functions / processes
of recruitment.
• 6. The subsidiary would enjoy better familiarity and control over the
employees it recruits rather than on employees selected by the parent
company.

28. Recruitment Sources at Micro Level
Techniques of Recruitment
• Offers for promotions and transfers.
• Employee referrals.
• Scouting.
• Advertising. Print & electronic media.
• Walk-in interviews.
• Consult –in
• Head-hunting.
• Body shopping.
• Business Alliances.
• Tele-recruitment

29. Selection Techniques for Global Jobs
Selection Criteria for Overseas Employment:
• Self-orientation
• Orientation towards others
• Ability to perceive accurately
• Cultural Variations
• Technical and Managerial Competence
• Adaptability
• Age, Experience and Education
• Spouse Educational Background, Interests and Adaptability
• Achievement Motivation and Leadership
• Family Status
• Language
• Strong Desire to Transfer Knowledge and Skills
• Positive Attitude

30. Expatriates
• Employees of global companies and their family members working and/or living in
foreign countries are called expatriates in the foreign country
• Expatriates are those living or working in a foreign country
• The parent country nationals working in foreign subsidiary and third country
nationals are expatriates
• Expatriates normally have adjustment problems.
• International Adjustment: The international adjustment is the degree to which the
expatriate feels comfortable living and working in the host culture; This
significantly influences job performance
• The expatriate is completely new to host country environment, social rules, norms,
etc.
• The expatriates has a strong desire to reduce psychological uncertainty in the new
environment also called as Cultural Shock.
• Cultural Shock: the frustration and confusion that result from being bombarded by
un-interpretable cues
• Students in USA drink beverages in the classroom, people in US wish you
immediately when there is eye-to-eye contact with you, Africans leave their
classrooms at end of the lecture before teacher leaves the class

31. The U-Curve of Cross
Cultural Adjustment
Honeymoon Stage:
The expatriate and his family members are fascinated
by the culture of the host country, the
accommodation, the transportation facilities,
educational faculties to the children, etc. during the
early stage of arrival.
This stage lasts up to 2-3 months period.
Culture Shock Stage:
The company takes care of the new arrivals and
completely neglects the previously arrived employee
and his family after three month
During this stage, the employee has to take care of
himself and his family members.
Expatriate gets frustrated, confused and unhappy with
living and working abroad
His social relations are disillusioned during this stage
He gets shock of the existing culture
Adjustment stage:
The expatriate slowly learns the values, norms,
behavior of the people and their culture, and adjust
himself to the culture of the foreign country.
Mastery Stage:
The expatriate after adjusting himself with the culture
of the foreign culture can concentrate on working
efficiently.
He behaves and functions as citizen at this stage.

32. The World's Friendliest Countries-
1/06/2012
• Living abroad doesn’t have to lead to homesickness. That’s especially true for
people who have relocated to New Zealand, Australia or South Africa.
• These are the three nations where it’s easiest to befriend locals, learn the local
language, integrate into the community and fit into the new culture, according to
the results of HSBC’s Expat Explorer Survey, released last month.
• The least friendly country for expats, according to the Forbes formula, was the
United Arab Emirates.
• And among the countries most challenging for expats overall were Saudi Arabia,
Qatar, Russia and India, according to this year’s HSBC survey results. India ranked
in last place for the second year in a row.
• Respondents rated their host countries on a slew of factors related to economics,
raising children and overall experience.
• To determine which were the friendliest, Forbes isolated the results in four
categories: ability to befriend locals, success in learning the local language,
capacity for integrating themselves into the community, and ease in which they fit
into the new culture.
• Source: http://www.forbes.com/sites/bethgreenfield/2012/01/06/the-worlds-
friendliest-countries-2/

33. PERFORMANCE APPRAISAL

34. Challenges of international
performance management
• Total Company versus Parts of it.
• Standard format versus Customized format.
• Uniformity of Data of Performance.
• Environmental variations
• Validity of performance criteria.
• Time and distance variations.
• Varied levels of maturity.
• Rater’s competence.
• Rater’s bias.
• Host environment.
• Cultural adjustments.

35. Compensation and Benefits

36. International Industrial Relations
• Complex relation between:
 Employees
 Employee’s Unions
 Employer
 Employer’s association
 Government
• It’s the outcome of the practices of human researches management and basis
for reformulation of HRM policies
• The important areas of Industrial Relations are:
 Trade Unions
 Grievance Procedure
 Disciplinary Procedure
 Collective Bargaining
 Industrial Conflicts including Strikes and Lockouts
 Worker’s Participation in Management
 Quality Circles
 Quality of Work life
 Profit-Sharing and Employee Ownerships/Employee Stock Option

37. Trade unions
• Trade unions generally present the worker’s problems
in Collective Bargaining-USA, UK, Japan-try to reach on
agreement collectively and see that the management
implements the agreements
• However trade unions fail to influence the
management for fair labor practices
• Germany-Work’s Council
 Working conditions
 Wage Rates
 Stand of employee Conduct
• Settled issues through arbitration

38. Participative Management
• Type of management in which employees at all
levels are encouraged to contribute ideas towards
identifying and setting organizational-goals,
problem solving, and other decisions that may
directly affect them. Also called consultative
management.
• Germany-Works Council
• UK-Collective Bargaining and Joint Consultative
Machinery

39. Why Global Employer Branding
• Scarcity of Talent
• Competitive edge
• Impression Management
• Organizational Loyalty
• TO increase the recruitment and Selection Ratio
• To enhance HR utilization
• Retain Talent
• Reduces Job Misfit
• Social Branding and business Brand
• HRM Standards-Values

40. What constitutes Employer Branding:
 Interesting work
 Appreciation and Recognition for the work done
 Feel-in-on-things-Freedom and involvement of
decision-making
 Sympathetic understanding of personal problem
 Climate of Feel of Ownership
 Attractive Benefits and salary
 Personal loyalty to works
 Empowerment
 Career planning and development including
promotional opportunities

41. The Best Global Employer Brands-2012
Website: : www.universumglobal.com (first powerful global index of employer
attractiveness)

42. Training

43. Why Cross-cultural Training for HCN
also?
• Cross cultural adjustment is crucial not only for expatriates and
their families, but also for the host country nationals.
• HCN interact with expatriates both at the work settings as well as at
social settings.
• Host country nationals should understand at least a part of the
expatriates’ culture as the expatriates of different countries either
exhibit or are immersed in their culture while interacting with the
host country subordinates or superiors or colleagues.
• The expatriates are primarily responsible to adjust to host country
culture but host country nationals should also understand and
adapt to core aspects of cultures of expatriates.

44. Why Job Training:
• In addition to cross-cultural training, TNCs also provide
training in technical and functional aspects of the job.,
though mostly expatriates possess them.
• Training is arranged mostly due to the changing technology
as well as shifting job priorities, job description,
specification, team specifications and varying systems and
procedures in subsidiaries and headquarters.
• Added to this, host country national need to be trained in
technical and job aspects from time to time .
• Therefore, MNCs provide training in technical and
functional aspects , though their magnitudes differ widely
from that of cross cultural training.

45. Training for expatriates
• Normally failures of expatriates are due to cultural & environmental factors
rather than due to lack of confidence.
• Pre-departure training is provided to take care of cultural & environmental
factors and thus it reduces expatriate failure rates.
• Training is provided , therefore, to expatriate as well as his /her family.
• Training is provided through a mix of pedagogical tools like Field Experience,
In house Training programs, Outside Agency Workshops and on the job
Training Assignments.
• On the job training involves i] coaching from the superiors : superior
provides critical skills , tactics and crucial knowledge through face to face
coaching. ii] working as an understudy : employee studies the superiors with
regard to interpersonal skills, adapting to culture, decision making etc. iii]
multiple management skills: are acquired by the employee from global
assignment in different subsidiaries and iv] development of global mind-set;
assignments in countries with varied and conflicting cultures allows
employee to slash the preconceived mind set and acquire new mind-set that
appreciates new work cultures.