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IHRM ASSIGNMENT
Q1. What are the similarities and differences between domestic &
international HRM….?
Ans: IHRM is all about acquiring, allocating & effectively utilizing human
resources in multinational organizations.
DIFFERENCE BETWEEN DOMESTIC & INTERNATIONAL HRM
DOMESTIC HRM INTERNATIONAL HRM
Staffs are placed within the national boundaries. Staffs work outside their national boundaries.
Less number of Rule and Regulations to be
managed.- mostly employment and taxation rules
of the home country.
Very high number of rules and regulations which
are related to taxation, employment rules,
language translating services, work permit etc.
There is uniform policy in administration Broader Perspective- Management has to be done
according HCNS, PCNS and TCNS.
No special attention into the personal life.
Confined to crèche and cultural interactions.
Special attention to personal life of expatriate
employees- cultural training, schooling of
children, employment opportunity for spouse.
Challenges are confined to the situation of a
particular country.
IHRM management has to be ready to face
challenges like underperformance of expatriate
employees, diplomatic relationships between host
country and parent country, currency exchange
rates which are variable and may impact the
benefits of TCNS and PCNS.
Special Training is not required for Socio
Cultural adaptation.
Special Training for expatriates so that they
might not face unnecessary hassles in the alien
socio cultural environment.
SIMILARITIES BETWEEN DOMESTIC & INTERNATIONAL HRM
The basic functions of domestic HRM 7 IHRM are common but the way of
operating it is a bit different. Those functions include:
HUMAN RESOURCE PLANNING
STAFFING
(RECRUITMENT, SELECTION & PLACEMENT)
PERFORMANCE MANAGEMENT
TRAINING & DEVELOPMENT
COMPENSATION & BENEFITS
Q2. Which topics are covered by Re-patriation process?
Ans. Expatriation process also includes repatriation: the activity of bringing the
expatriate back to the home country.
“Expatriation includes repatriation”
The Repatriation Process
RECRUITMENT & SELECTION
PRE-DEPARTURE TRAINING
ON ASSIGNMENT
RE-ENTRY OR RE-
ASSIGNMENT
REPATRIATION
PROCESS
PREPARATION
PHYSICAL
RELOCATION
TRANSITION
READJUSTMENT
1) PREPARATION involves developing plans for the future and gathering
information about the new position. The firm may provide a checklist of items
to be considered before home or a thorough preparation of employee and
family for the transfer to home. There may be some inclusion of repatriation
issues in pre-departure training provided to the expatriate.
2) PHYSICAL RELOCATION refers to removing personal effects, breaking
ties with colleagues and friends and travelling to the next posting, usually the
home country. Most multinationals use removal firms or relocation consultants
to handle the relocation, for both the movement out and the return home of the
employee and family, and this may be formalized in their HR policies.
3) TRANSITION means settling into temporary accommodation where
necessary, making arrangements for housing and schooling and carrying out
other administrative tasks. Some companies hire relocation consultants to
assist in this phase also.
4) READJUSTMENT involves coping with such aspects as company changes,
reverse culture shock and career demands. It is the one that seems to be the
least understood and most poorly handled.
Q3. Explain multinational performance management?
Ans. The most challenging aspects for a firm operating internationally is how to
manage the performance of its various overseas facilities. Performance
management is a process that enables the multinational to evaluate and
continuously improve individual, subsidiary unit and corporate performance,
against clearly defined, set goals and targets.
COMPONENTS OF PERFORMANCE APPRAISAL
MULTINATIONAL PERFORMANCE MANAGEMENT
The multinational has specific expectation for each of its foreign
subsidiaries, in terms of market performance and contribution to total profit
and competitiveness. When evaluating multinational performance following
should be considered…………..
1. Whole Versus Part
A multinational is a single entity that faces a global environment, which means
that it simultaneously confronts differing national environments. Integration
and control imperatives often place the multinational in the position where it
decide that the good of the whole is more important than one subsidiary’s short
term profitability.
2. Non-Comparable Data
Frequently, the data obtained from subsidiaries may be neither interpretable
nor reliable. Physical measures of performance may be easier to interpret.
3. Volatility Of the Global Environment
The turbulence of the global environment requires that long term goals be
flexible in order to respond to potential market contingencies. An inflexible
approach may mean that subsidiaries could be pursuing strategies that no
longer fit the new environment.
4. Separation By Time & Distance
Judgments concerning the congruence between the multinational and local
subsidiary activities are further complicated by the physical distances involved,
time zone differences, the frequency of contact between the corporate head
office staff and subsidiary management and the cost of the reporting system. It
is often necessary to meet managers personally to understand the problem
fully.
5. Variable Levels Of Maturity
Without the supporting infrastructure of the parent, market development in the
foreign subsidiaries is generally slower and more difficult to achieve than at
home, where established brands can support new products and new business
areas can be cross-subsidized by other divisions.
6. Control & Performance Management
Performance management is the part of multinational’s control system.
Through formal control mechanism and communication the feedback and
appraisal aspect, performance management also contributes to shaping
corporate culture both formally and informally.
CONCLUSION
Thus by adopting a performance management approach, multinationals are
drawing on a number of human resource management functions to realize
performance goals set during the performance appraisal process.
3 APPROACHES TO STAFFING
ETHNOCENTRIC
Fills management positions by Home Country nationals
POLYCENTRIC
Uses Host Country Nationals to manage local subsidiaries
GEOCENTRIC
Seeks best people for key jobs
throughout the organization,
regardless of their nationality
REGEOCENTRIC
Reflects the geographic strategy & structure of MNE
Q4. How various staffing approaches help to sustain business operation?
Ans. The IHRM literature uses four terms to describe MNE approaches to managing
and staffing there subsidiaries. These terms are taken from seminal work of
Perlmutter, who claimed that it was possible to identify among international
executives 4 primary attitudes – Ethnocentric, Polycentric, Geocentric &
Regeocentric.
ETHNOCENTRIC
The ethnocentric staffing policy reflects the belief that principles & practices
used by home-office country are superior to those used by companies in other
nations. Thus, given its success in the home-country market, there is a little
need to adapt principles & practices when transferred to foreign markets.
POLYCENTRIC
The polycentric outlook holds that staffing policies ought to adapt differences
between operations in home country & host country. It sees the effectiveness of
the business practices of foreign markets as equivalent to those in home
country. This approach motivates the company to staff each operation from
headquarters in home-country to each foreign subsidiary with people from local
environment. Thus, this approach is a key feature of multi-domestic strategy.
GEOCENTRIC
Unlike the ethnocentric & polycentric approaches, geocentric staffing policy is
not tied to a particular home or host nation. Instead, it scans the whole world
looking for best people around to place them on key jobs in the organization.
This approach enables the MNE to build the requisite cadre of international
executives who can move between countries & cultures without forfeiting their
effectiveness.
REGEOCENTRIC
This approach reflects the geographic strategy & structure of the multinationals.
Like geocentric approach, it utilizes wider pool of managers but in a limited
way. Staff may move outside their countries but only within the particular
geographic region. They are not promoted to headquarters position.
Q.5. what should be the main objective for multinational firm with regard to
Compensation policy?
Ans. “Management of Compensation is all about development, implementation,
maintenance, communication & evaluation of reward processes.”
1. The topic focuses on incentive mechanisms & compensation systems & their
function in influencing the behavior of employees of multinational firms.
2. The policies so formulated should be consistent with the overall strategy.
Structure & business need of the multinationals.
3. The policy must work to attract & retain the staff in the areas where the
multinational has the greatest needs & opportunities.
4. The policy should facilitate the transfer of international employees in the cost-
effective manner for the firm.
5. The policy must give due consideration to equity & ease of administration.
6. The overall objectives of the expatriate must also be achieved with reference to
the compensation policy of the firm.
Q.6. What work practices can be standardized?
Ans. Standardization is an adoption choice that confronts the multinational in other
areas of its operations which applies to the management of global workforce.
Factors influencing the standardization
1. Host Country Culture & Workplace Environment:-
Culture acts as a moderating variable in international HRM. It includes group
of people sharing common goals, values, attitudes & beliefs. Work behavior is
culturally determined to the extent it is contained in the role definition &
Host-country Culture & Workplace
Environment
Mode Of Operation
Size & Maturity Of
The Firm
Relative Importance Of
Subsidiary
Global/Local Work Practices
& Hrm
expectation. Standardization of the work practices involves behavior
modification through corporate training programs, staff rotation, rewards &
promotions. Thus culture has a strong bearing on the behavior of the
employees.
2. Mode of Operation:-
A multinational’s ability to impose standardized work practices is not only
affected by cultural differences that may create resistence to change from
subsidiary staff. One managerial choice is the form of operation that the
multinational uses. Entering via an acquisition may provide the multinational
with market advantages, but its ability to transfer technical knowledge, systems
& HR practices may be restricted.
3. Firm size, maturity and international experience:-
Key factors influencing international operations are the size & maturity of the
multinational. A smaller multinational, a relative newcomer to international
business, may not have the same level of ability or resources, and an
alternative mode of operation such as a joint venture would be an attractive
proposition.
4. Subsidiary mandate:-
Linked to the issue of size & maturity of the multinational is the position of the
subsidiary in relation to the rest of the organization and its mandated role – what
is expected of it in terms of contribution to global activity. Recently, their has
been considerable interest in looking at the role of the subsidiary. Centers of
excellence at the subsidiary level can be viewed as an indication of how some
multinationals are recognizing that level of expertise differ from headquarters.
5. Global or local work practices & HR:-
The analysis of HR & workplace standardization v/s. adaptation reflects the
convergence – divergence debate. Forces for standardization are mainly internal to
the multinational driven by the need for control and to sustain competitive
advantage. Host governments though may encourage standardization through the
transfer of foreign work practices & processes. Forces for adaptation comes from
external constrains that the multinational confronts in its various markets.
The End