Internationalhumanresourcemanagment 100312034418-phpapp01


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  • Dealing with inequityPremium on job securityIndividual or group
  • Internationalhumanresourcemanagment 100312034418-phpapp01

    1. 1. StudsPlanet Leading Education consultant in India
    2. 2. International Human Resource Managment Bino Joseph
    3. 3. Definition • The process of procuring, allocating and effectively utilising human resources in an international business is called international human resources management (IHRM). Need for IHRM • Managing expatriates • Globalization has forced HRM to have international orientation • Effectively utilise services of people at both the corporate office and at the foreign plants 3
    4. 4. Model of IHRM HR Activities • Procure • Utilise • Allocate Types of employees • Home country nationals • Host country nationals • Third country nationals Countries • Home country • Host country • Third country 4
    5. 5. More HR activities Need for a broader perspective More involvement in employee personal lives Changes in emphasis as the workforce mix of expatriates and locals vary Risk exposure More external influences Characteristics of IHRM 5
    6. 6. More Human Resource Activities •Difficulty in implementing HR in host countries •Aligning strategic business planning to HRP & vice-versa •Developmental opportunities for international managers. Human Resource Planning •Ability to mix with organisation’s culture •Ethnocentric, polycentric or geocentric staffing approach •Selection of expatriates •Coping with expatriate failure •Managing repatriation process Employee Hiring •Emphasis on cultural training •Language training •Training in manners & mannerisms Training & Development 6
    7. 7. • Devising an appropriate strategy to compensate expatriates • Minimising discrepancies in pay between parent, host & third country nationals • Issues relating to the re-entry of expatriates into the home country Compensation • Constraints while operating in host countries need to be considered • Physical distance, time differences & cost of reporting system add to the complexity • Identification of raters to evaluate subsidiary performance Performance Management • Handling industrial relations problems in a subsidiary • Attitude of parent company towards unions in a subsidiary • Union tactics in subsidiaries Industrial Relations 7
    8. 8. Need for Broader Perspective Pay issues • Different countries, different currencies • Gender based pay in Korea, Japan, Indonesia Health insurance for employees & their families Nepotism common in small businesses in Asia Pacific region Overtime working – Korean & Japanese firms Promotions based on seniority or merit 8
    9. 9. More Involvement in Employee’s Personal Lives • More involvement for both parent-country & third-country nationals • Housing arrangements • Health care • Remuneration packages • Assist children left behind in boarding schools Changes in Emphasis • Need for parent-country & third-country nationals decrease as more trained locals become available • Resources reallocated to selection, training & management development 9
    10. 10. • Physical safety of the employees • Terrorism poses a great threat • Failure of expatriates to perform well  financial losses to the firm • Seizure of MNC’s assets in a foreign country Risk Exposure • Dealing with ministers, political figures, economic & social interest groups • Hiring procedures dictated by host country • Catch up with local ways of doing business External Influence 10
    11. 11. Reasons for Growing Interest in IHRM Globalisation of Business Effective HRM  determinant of success in international business Indirect costs of poor performance in international business very costly Movement to network organisations from traditional hierarchical structures Significant role in implementation & control of strategies 11
    12. 12. Basic Steps in IHRM HRP Recruitment & Selection Training & Development Performance Management Remuneration Repatriation Employee Relations Multicultural Management 12
    13. 13. HR Planning Key Issues in International HRP • Identifying top management potential early • Identifying CSF for future international managers • Providing developmental opportunities • Tracking & maintaining commitment to individuals in international career paths • Tying strategic business planning to HRP & vice-versa • Dealing with multiple business units while focusing on global & regional strategies 13
    14. 14. Recruitment & Selection Ethnocentric Approach • Key management positions held by parent-country nationals • Appropriate during early phases • P&G, Philips Polycentric Approach • Host-country nationals hired to manage subsidiaries • Parent-country nationals occupy key positions at corporate HQ • HUL Geocentric Approach • Seeks best people for key jobs, irrespective of nationality • Underlying principle of a global corporation • Colgate- Palmolive Regiocentric Approach • Variation of staffing policy to suit particular geographic areas • Provides a 'stepping stone' for a firm wishing to move from an ethnocentric or polycentric approach to a geocentric approach 14 3 categories of employees can be hired – parent country nationals (PCNs), host country nationals (HCNs) & third country nationals (TCNs)
    15. 15. Advantages & Disadvantages of Using PCNs Advantages • Familiarity with home office, goals, practices • Easy organisational control & coordination • International exposure to promising managers • PCNs  special skills & experiences Disadvantages • Difficulty in adapting to foreign country • Excessive cost of selecting, training & maintaining expatriates • Promotional opportunities limited for HCNs • May try to impose inappropriate HQ style • Compensation differences for HCNs & PCNs • Family adjustment problems 15
    16. 16. Advantages & Disadvantages of Using HCNs Advantages • Familiarity with the situation in host-country • Lower hiring costs • Locals motivated due to promotional opportunities • Responds well to localisation of subsidiary’s operations • No language barrier • HCNs stay longer in positions Disadvantages • Difficulty in exercising effective control over the subsidiary’s operations • Communication problems with home office personnel • No opportunity for home country’s nationals to gain international experience • Limited career opportunity outside the subsidiary 16
    17. 17. Advantages & Disadvantages of Using TCNs Advantages • Salary & benefit requirements lower than that of PCNs • May be better informed about host country environment • Truly international managers Disadvantages • Host country govt. may resent hiring TCNs • May not return to their country after assignment • Host country’s sensitivity w.r.t nationals of specific countries 17
    18. 18. Expatriate Assignment Life Cycle 18 Determining the need for an expatriate Selection Process Pre-assignment training Departure Post-arrival Orientation & Training Crisis & Adjustment Crisis & Failure Repatriation & Adjustment Reassignment Abroad
    19. 19. Expatriate Failure Premature return of expatriates to their home country Reasons • Inability to adjust to host country culture  leads to culture shock • Personal & emotional problems • Difficulties with the environment • Inability to cope with larger international responsibilities • Other family reasons 19
    20. 20. Culture Shock Cycle 20
    21. 21. Expatriate Selection Family Req’ments Cross- cultural Suitability MNC Req’ments Language Country- cultural Req’ments Technical Ability 21 Individual Situation
    22. 22. Training & Development Cross Cultural Training Language Training Practical Training Management Development & Strategy 22
    23. 23. HCN Training Gaining knowledge about parent organisation Technical know- how specific to organisation Role of the subsidiary in the MNC General awareness of the parent country cultural norms 23
    24. 24. Expatriate Performance Management Linkage to organisational strategy Setting individual performance goals Identifying variables impacting performance Appraising the performance Providing regular feedback on progress towards goals Providing opportunities for improvement Linking results with rewards 24
    25. 25. • Link unit goals to individual/team goals • This will offer benchmarks for employees to strive towards excellence Setting Individual Performance Goals • Compensation packages • Type of task • Moral & physical support • Host environment • Multicultural adjustability Variables Impacting Performance 25
    26. 26. Paying Expatriates Objectives to be achieved • Attract qualified & interested employees • Facilitate movement of expatriates between subsidiaries • Consistent & reasonable relationship between pay levels • Cost-effective Problems faced in deciding remuneration package • Discrepancies in pay between parent, host & third country nationals • Vary compensation based on family situation of expat • Remuneration when re-entering parent-country organisation • Must accommodate changes in international business environment 26
    27. 27. Components of Remuneration Package • Base salary • Benefits • Allowances • Incentives • Taxes • Tax equalisation • Tax protection Factors Influencing Compensation • Internal Environment • Goal Orientation • Capacity to pay • Competitive strategy • Organisational culture • Internal workforce composition • Labour relations • Subsidiary role • External Environment • Parent nationality • Labour market characteristics • Local culture • Home & host country govts’ role • Industry type • Competitors’ strategies 27
    28. 28. Approaches to Designing the Pay Package • Balance-sheet approach • Going-rate approach • Lumpsum method • Cafeteria approach • Regional approach 28
    29. 29. Repatriation Preparation Physical Relocation Transition Readjustment • The activity of bringing the expat back to the home country • Can cause re-entry shock or reverse culture shock • Reasons • Posting period over • Children’s education • Not happy with overseas assignment • Failure to do a good job 29
    30. 30. Types of Assignments Business Visits Short-term Commuter Long-term Min. Duration 1-30 days 1-3 months Returns home at regular intervals 6-12 months Max. Duration 183 days 6-12 months 2-4 years 3-5 years 30 Short term assignments Advantages • Employee less restricted by family concerns • Spouse’s career unaffected • Generally less expensive Disadvantages • Family split • Identical benefits taxed differently in home & host
    31. 31. 31 Commuter assignments Advantages • Children’s education undisturbed • Spouse’s career unaffected Disadvantages • Big strain on family relations if more than 1 year Long term assignments Advantages • Family remains together • All emoluments subject to a single tax legislation Disadvantages • Spouse’s career affected • Children’s education disturbed • Loss of support from relatives & friends
    32. 32. International Labour Relations Handling Labour Issues • Delegated to foreign subsidiaries • Labour relations centralised when inter-subsidiary production integration is present • Depends on nationality of ownership of subsidiary • More intervention when subsidiary is of strategic importance Union Tactics • Strike  most common tactic • International Trade Secretariats (ITS) • Lobbying for restrictive national legislations • Intervention of ILO, UNCTAD, EU & OECD • Principles of ILO • Freedom of associations • Right to organise & collectively bargain • Abolition of forced labour • Non-discrimination in employment 32
    33. 33. Multiculturalism • Culture – customs, beliefs, norms & values that guide behaviour of people in a society or passed on from one generation to the next • Multiculturalism – people from many cultures (countries) interact regularly • Benefits • Greater creativity & innovation • Sensitivity in dealing with foreign customers • Possibilities of hiring best talent • ‘Superorganisational culture’ • Universally acceptable HR policies & practices • Functions of IHR manager • Possess strong personal identity • Have knowledge of beliefs & values of different cultures • Display sensitivity • Communicate clearly according to the cultural group • Cultivate cosmopolitan outlook & attitudes 33
    34. 34. Power Distance Uncertainty avoidance Individualism Masculinity Hofstede’s Cultural Dimensions 34
    35. 35. 35