International HRM

What Is International HRM?

HRM involves a wide range of activities right from identifying the manpower requirements, identifying the most appropriate sources, attracting the best talent available from the most cost effective places, nurturing and enhancing their skills to suit the organizational needs, motivating them through an effective system of compensation to perform optimally, and continuously monitoring their performance with suitable reward-rebuke mechanism.

The application of these principles and practices to manage “People” in more than one country is termed as IHRM.

Domestic Vs International HRM

Increased Functional Activities Functional Heterogeneity Increased Involvement in Employees

personal lives Enhanced Risks Increased Influence of External

Environment

Managing International Human Resource Activities Staffing Recruitment and Selection Expatriate Management Training and Development Performance Management Compensation Regulatory Framework

Staffing

Staffing refers to the process of determining the organization’s current and future human Resource requirements to meet the organizational goals and taking appropriate steps so as to fulfill those requirements.

Human Resource planning refers to the process of forecasting supply and demand of the organization and the action plan to meet Human Resource requirements.

International Companies need to assess their human Resource requirements, assess availability of right type of manpower, decide upon the right type of international assignments.

Sources of Human Resource

Host Country Nationals Parent country Nationals Third Country Nationals Expatriates Inpatriates Off-Shoring

Recruitment and Selection

Recruitment refers to the process by which an organization attracts the most competent people to apply for its job opening.

Selection refers to the process by which organizations fill their vacant positions.

Selection Criteria for International Assignments Technical and Managerial Competence Ability to Perform under Cross Culture

Environments Family Attitude towards International

assignments Regulatory framework in host Country Language

Selection Approaches

Ethnocentric Approach Polycentric Approach Geocentric Approach

Managing Expatriates

People working out of their home countries, also known as Expatriates, form an integral part of a firm’s international staffing strategies, especially for higher management positions.

Besides identifying and recruiting right men for international assignments, it is also very important to provide them with a conducive environment to get their optimum output.

Expatriate adjustment Process

Initial Euphoria Cultural Shock Adjustment Re-entry

Training and Development

Training refers to process by which employees acquire skills, knowledge and abilities to perform both their current and future assignments in the organization.

Training aims at altering behavior, attitude, knowledge, and skills of personnel so as to increase the performance of employees.

Types of the Training

Cultural Sensitization Programme Preliminary Visit Language Training Practical Training

Performance Management

It refers to a process that enables the firm to evaluate the performance of its personnel against pre-determined parameters for their consistent improvements so as to achieve organizational goals.

It is important to facilitate administrative decisions related to compensation, promotion or transfer etc.

In international context performance evaluation of Expatriates is a great challenge.

Performance Appraisal become more complex due to possible conflict between objective of MNE’s headquarter and its subsidiary.

The volatility in international market also make it more complex.

Compensation

Compensation refers to the financial remuneration that employees receive in exchange of their services rendered to organization. In international context it includes:-

Basic Salary Foreign Service Premium Allowance Hardship Allowance Cost of living Allowance Housing Allowance Home Leave Allowance Education Allowance Relocation Allowance Assistance for Tax Equalization Other Benefits

Strategic Approaches to international Compensation Home Country Based Compensation

System Host Country Based Compensation

System Hybrid Compensation System

Regulatory Framework & Industrial Relation Regulatory Framework is to manage human

resource varies substantially across countries. MNE’s required to adhere various legislative

provisions under labour Law, Compensation and Benefit Law, Individual Rights related to Civil Rights, Immigration, Discrimination, and Sexual Harassment at work place.

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