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Managing global HR
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Meaning of International HRM
Globalisation of business has probably touched the HRmanager more severely than any other functional head.
HR executive needs to give international orientation tovarious HR sub systems viz. hiring, T & D, PMS,compensation, IR, etc
Just as success of a domestic business depends on itsHR, so is the case with an international business.
Resources cannot be effectively utilised/transferred to
foreign affiliates without using human power. An international business must procure, motivate, retain &
effectively utilise the services of its people both atcorporate head offices & at the foreign plants.
This process of procuring, motivating, retaining &
effectively utilising people is known as IHRM.
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Model of IHRM
HR Activities Procure
Allocate
Utilise
Types of employees Parent country nationals
Host country nationals
Third country nationals
Countries Home country/Parent country
Host country
Third country
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Domestic HRM V/S IHRM
More HR Activities
Need for a broader perspective
More involvement in employee personal lives Changes in emphasis as the workforce mix of
expats & local vary
Risk exposure More external influence
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Managing IHR Activities
HRP
Recruitment & Selection
Training & Development Performance Management
Remuneration
Repatriation Employee Relations
Multicultural Management
OrganisationalEffectiveness
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1. HRP
Key issues in international HRP
Identify top management potentials
Identify critical success factors
Provide developmental opportunities
Maintaining commitment to individuals ininternational career path
Strategic business planning Dealing with multiple business units while
attempting to achieve globally & regionallyfocused strategies
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2. Recruitment & Selection
Approaches to staffing
Selection decision from three categories of
employees Factors favouring PCNs & HCNs
Expatriate problem
Expat assignment life cycle
Reasons of expat failure
Factors in expat selection
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Approaches to staffing
Ethno centric Approach
All key management positions across all subsidiary
are held by parent country nationals
Poly centric Approach
Staffing requires host country nationals to be hired to
manage subsidiaries, while parent country nationals
occupy key positions at corporate HQ Geo centric Approach
Best people for the key jobs through out the
organisation, regardless of nationality
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Selection decision from three
categories of employees
PCN
HCN
TCN
Advantages & Disadvantagesof each is to be explained.
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Factors favouring PCNs & HCNs
Characteristics Description
Parent country
characteristics
cultural difference b/w
parent unit & subsidiary
Size of operationsResearch intensity
Industry characteristics Financial institutions
Need for controlNeed to customise
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Factors favouring
Characteristics Description
Subsidiary characteristics Age
ExperiencePerformance
Ownership pattern
Host country variables Education
Political risks
Cost of living
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Expatriate problem - Expat
assignment life cycle
Determining the need for an expat
Selection process
Pre assignment training
Departure Post arrival orientation & training
Crisis & adjustment
Re assignment abroad
Repatriation & adjustment
Crisis & failure
Repatriation & adjustment
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Expatriate problem - Reasons
of expat failure
Inability to adjust in host country
U shaped curve
Tourist stage
Disillusionment
Cultural shock
Adaptation & adjustment
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Expatriate problem - Factors in
expat selection
Technical ability
Cross cultural suitability
Family requirements
MNC requirements
Language
Country cultural requirements
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3. T & D
Cross cultural training
Language training
Practical training Management development strategy
HCN training
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4. PMS
Steps in expat Performance Management
Linkage to organisational strategy
Setting individual performance goals SMART Goals
Identifying variables impacting performance Compensation package
Task characteristics
HQs support
Host environment Appraise the performance
Provide regular feedback
Provide opportunities for improvement
Linking results with rewards
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5. Remuneration
Objectives
Problems
Factors influencing internationalcompensation
Components of international compensation
Tailoring the package
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Objectives
Problems
Attract employees
Facilitate movement of
expat
Reasonablerelationship
Cost effective
Discrepancies in pay
b/w parent, host & third
country
Life cycle stage ofexpat family
Re-entry into home
country
Frequent changes
F t i fl i i t ti l
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Factors influencing international
compensation
MNC Internal environment
Goal orientation
Capacity to pay Competitive strategy
Organisational culture
Internal workforce
composition
Labour relations
Subsidiary role
MNC External
environment
Parent nationality
Labour market
characteristics
Local culture
Home & host countrygovernments role
Industry type
Competitors strategies
C f i i l
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Components of international
compensation
Base salary
Benefits
Allowances Incentives
Taxes
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Tailoring the package
Balance sheet approach
Going rate approach
Lumpsum Cafeteria approach
Regional system
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6. Repatriation
Meaning
Reasons for repatriation
Advantages Process
Challenges
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Meaning
Activity of bringing expatriate back to home
country
Re-entry shock or reverse culture shock
Ability to attract future expat depends on how
well firm handles its repatriation process
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Reasons for repatriation
Advantages
Period of posting got
over
Wants their children in
home country school Not happy in the
overseas assignment
Failure to do the job
Developed global
culture + local culture
Operations of HQ +subsidiary firms
Expand international
prospects
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Process Challenges
Preparation
Physical relocation
Transition
Re-adjustment
Individual perspectives
Organisational perspectives
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7. Employee Relations
Key issues in international labour relations
Who should handle labour relations
HQ
Subsidiary
What should be the union tactics
Strikes
Lobbying
ITSs
ILO, UNCTAD, EU, OECD
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8. Multicultural Management
Hofstedes cultural dimension
Power distance
Uncertainty avoidance
Individualism
Masculinity
Future orientation
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