-BY SARITA DEVI

UNIT-6

SYLLABUS Unit 6 – International HRM

Selection, Training and Development of

people in International firms.

Compensation and Reward systems among

International firms.

Motivation and Leadership in International

firms.

International Labor Relations

BASIC CONCEPTS Human Resource Management-

“ Activities an organization carries out of its human resources effectively. Activities include determining the firm’s human resource strategy, staffing, performance evaluation, management development, compensation and labor relations.”

Expatriate Manager

“ A citizen of one country who is working abroad in one of the firm’s subsidiaries”

Inpatriate Manager

“ Citizen of a foreign country working in the home country of their multinational employer”

CEO-Sam Palmisano, 2000

1.

• Globally integrated strategy

• World-class human capital

2.

• Created global product divisions

3.

• Found- HR systems were not aligned with new strategy

CASE STUDY : IBM HR STRATEGY

4. • Workforce Management Initiative (WMI)

5.

• Single, integrated approach to hiring, managing and deploying IBM’s global workforce.

6. • Invested $ 100 billion, 400,000

employees

CASE STUDY : IBM HR STRATEGY

7. • Supply and demand of Skills

8. • Saved $1.4 Billion in the first four

years of operation.

9. • Easy identification of skills,

planning of development programs.

CASE STUDY : IBM HR STRATEGY

STAFFING POLICY

Selection of employees for particular

jobs.

Tool for developing and promoting

the desired corporate culture.

Types of staffing policy

Staffing

Approach

Strategic

Appropriateness

Advantages Disadvantages

ETHNOCENTRIC INTERNATIONAL Overcomes lack

of qualified

managers in host

nation

Unified culture

Help transfer core

competencies

Resentment in

host country

Can lead to

cultural myopia

POLYCENTRIC LOCALIZATION Alleviates cultural

myopia

Inexpensive to

implement

Limits career

mobility

Isolates HQ from

foreign

subsidiaries

GEOCENTRIC GLOBAL

STANDARDISATION

AND

TRANSNATIONAL

Uses human

resources

efficiently, strong

culture and

networks

National

Immigration

policies may limit

implementation

Expensive

Expatriate Selection Dimensions

- by Medenhall and Oddou

Self-orientation

Strengthen self esteem, confidence and mental well-

being

Others-orientation

Ability to interact with host country nationals

Relationship devpt and willingness to communicate

Perceptual ability

Understand why people of other countries behave the

way they do

Ability to empathize

Cultural Toughness

Relationship between the country of assignment and

how well an expatriate adjusts to a particular

group.

TRAINING AND MANAGEMENT

DEVELOPMENT

Management development- Broader

concept.

Develop manager’s skills over his/her

career with the firm.

3 types of expatriates training

Cultural Training

Language Training

Practical Training

Management development and Strategy

Ongoing management education

Rotation of managers

Informal management network

COMPENSATION

How compensation should be adjusted

to reflect national differences in

economic circumstances and

compensation practices?

How expatriates should be paid?

COMPONENTS OF EXPATRIATE

COMPENSATION PACKAGE

BASE PAY FOREIGN SERVICE PREMIUM

ALLOWANCES

TAXATION BENEFITS

BALANCE SHEET APPROACH

Equalizes purchasing power across

countries so employees can enjoy the

same living standard in their foreign

posting that they enjoyed at home.

Provides financial incentives to offset

the qualitative differences between

assignment locations

Balance sheet approach

1. • In 2000, Global compensation strategy

• In 2004, executed

2.

• Targets set for each year.

• Country’s annual incentive pool is based on whether targets met or not.

3.

• Bonus also depends on achievement.

• Individual performance

• Rating system – 20% highest, 70% middle and 10% bottom

• Fair and as per local market conditions

CASE STUDY : Mc Donald’s

compensation practices

INTERNATIONAL LABOR RELATIONS

Organized labor limits the choices of an

international business

HR objective- Foster harmony and

minimize conflict between firm and

organized labor

Concerns of organized labor

Company will move production to some other country

Highly skilled tasks to home country and low-skilled to host country

Imports employees from the home country

Strategy of organized labor

Establish international labor organization

Lobbying for national legislation to restrict multinationals

Achieve international regulations on multinationals

Approaches to labor relations

Centralized vs Decentralized

Local managers deal with the labor unions in particular countries

• Decentralized control

Top management controls

• Centralized control