Description
Describing on differentiates between domestic HRM and IHRM, how HR planning (HRP) is done.
Definition
The process of procuring, allocation training, developing, and effectively utilizing human resources in an international business is called international human resource management.
Dimensions
IHRM
HR activities Types of Employees Countries of operation
Procurement Allocation Utilizing all domestic HRM functions.
Host country national
Parent country national
Host country Third country national Home country Third country or other
Differences Between Domestic HRM and IHRM
more HR activities the need for a broader perspective more involvement in employee’s personal lives changes in emphasis as the workforce mix of expatriates and locals varies risk exposure broader external influences
5 (c) 2009 by Nelson Education Limited.
More HR activities
• • • • •
taxation relocation and orientation expatriate administrative services host government relations language translation services.
the need for a broader perspective
• administering programs that are equitable for more than one group.
more involvement in employee’s personal lives
• housing arrangements • healthcare • compensation (cost-of-living allowances, premiums, taxes) • visa requirements • Schooling.
changes in emphasis as the workforce mix of expatriates and locals varies.
risk exposure
• • • • • • • • • • •
expatriate failure direct costs indirect costs militant activities emergency evacuation government economy labour standards and costs taxation health and safety laws, compliance regulations, codes of conduct.
broader external influences
MANAGING INTERNATIONAL HR ACTIVITIES
HR Planning(HRP)
HRP
Recruitment and Selection
Training and Development
Performance Management
Remuneration
Repatriation
Employee Relations
Multicultural Management
Recruitment and Selection
Ethnocentric Approach
Polycentric Approach Geocentric Approach
• All key management positions are held by parent country nationals • Host country nationals to be hired to manage the subsidiaries
• Selecting the best person for the job,irrespective of nationality
Parent Country Nationals(PCNs)
Advantage Disadvantage
?Familiarity with the home office, goals, objectives, policies, and practices.
?Easy organizational control and coordination ?Promising managers are given international exposure ?PCNs are the best people for assignment because of special skills and experiences.
?Difficulty in adapting to the foreign language and the socio-economic, political, cultural and legal environment.
?Excessive cost of selecting, training and maintaining expatriate managers and their families abroad. ?Promotional opportunities for HCNs are limited. ?Compensation for PCNs and HCNs may differ ?Family adjustment problems, especially concerning the unemployed spouses
Host Country Nationals(HCNs)
Advantage Disadvantage ?Communication difficulties in dealing with home office personnel ?Lack of opportunity for the home country's nationals to gain international and cross cultural experience ?HCNs have limited career opportunity outside the subsidiary
?Familiarity with the socioeconomic, political ,legal environment and with business practices in the host country
?Lower cost incurred in hiring as compared to PCNs and TCNs ?Promotional opportunities to locals and consequently their motivation and commitment ?Languages and other barriers are eliminated ?Continuity of management improves, since HCNs stay longer in positions
?Hiring HCNs may encourage a federation of nationals rather than global units
Third Country Nationals(TCNs)
Advantage Disadvantage ?Salary and benefits requirements may be lower than for PCNs ?TCNs may be better informed than for PCNs about host country environment ?TCNs are truly international managers ?Host country government may resent hiring TCNs ?TCNs may not want to return to their own countries after assignment ?Host country's sensitivity with respect to nationals of specific countries
HCNs or PCNs
Parent Country Characteristics
Industry Characteristics Subsidiary Characteristics
• Cultural distance between parent unit andsubsidiary,size of operations, research intensity
• Financial institutions, need for control, need to customize
• Age, acquired ,performance, ownership pattern
Host Country Variables
• Education levels, political risks, cost of living
THE EXPATRIATE PROBLEM
?A major problem connected with expatriates is their premature return to their home country. ?Popularly called as expatriate faliure
Reason for Expatriate failure
US Firms
? In ability of spouse to adjust ? Managers inability to adjust
Japanese Firms
? Inability to cope with larger international responsibilities ? Difficulties with the environment
? other family reason
? Manger personal or emotional maturity ? Inability to cope with larger international responsibilities
? Personal or emotional problem
? Lack of technical competence ? Inability of spouse to adjust
Factor In Expatriate Selection
Technical ability
Crosscultural suitabilty Family Requirem -ents
Selection decision
Countrycultural requirem ents
Language
MNC requirmen -ts
Training and development
Cross cultural training
? CCT seeks to foster an appreciation for the host country’s culture. ? An expatriate should receive training in the host country’s culture, history, politics, economy, religions, and social and business practice. ?CCT include counseling on return to home base to prevent reverse culture shock.
Benefits and drawbacks of CCTI
MERITS
? Increase chances of success in global assignment ? Provides a comprehensive global perspective for managers
DEMERITS
? Develops a false sense of confidence among expatriates ? may not remove cultural biases and prejudices
? Instills a sense of confidence into people ? May not be taken seriously by the recipients ? Foreign employees can be managed ? Reduces culture shock ? May not make a visible difference on business volumes ? Can never fully prepare an assignee to face real problem
Language Training
? Language training is seemingly obvious and desirable component of a predeparture program. ?English is the primary language of international businesses, and most expatriates from all the countries can converse English.
Practical Training
? practical training seeks to help the expatriate manager and family feel ‘at home’ in the host-country.
Management development and strategy
? MNCs use management development as a strategic tool. ? MNCs need to be able to detect pressure to conduct business in a locally- responsive manner. ? MNC help build corporate culture by encouraging new mangers to socialize and imbibe the value and norms of the firm. ? Bringing managers together in one location for extended periods and rotating them through different jobs in several countries help the firm build a informal management network.
HCN Training
? Gaining knowledge about parent organization ? Acquisition of technical prospects specific to organization ? Role of subsidiary from technological and culture prospective
? Awareness of parent country cultural norms
Performance management
• Post assignment performance related issue • As a process that enables an MNC to evaluate and facilitate continuous improvement of individual , subsidiary units and corporate performance against clearly defined pre set goals and targets.
Steps
Linkage to organizational strategy Setting individual performance goals Identifying variable impacting performance
Providing opportunities for improvement
Providing regular feedback on progress towards goals
Appraising the performance
Linking results with rewards
Step 1
Linkage to organizational strategy •Performance management becomes an integral part of corporate strategies •Helps in identifying employees with high potentials, facilitates establishing performancereward inking and delineates employee needs for development
•Vital for formulation and execution of strategies
Step 2
Setting individual performance goals
•It’s a future outcome that individual and organization desire to achieve •Serve 3 purposes : -guide and direct behavior in the direction of the goal -offer benchmark for employees to strive towards excellence -reflect what employee & manager consider important
•Goals must be SMART
Goals and performance
High
Low Low Goal intensity High
Task performance
Step 3
Identifying variable impacting performance
•Performance of non expatriate is influenced by Extrinsic factors ?Working condition ?Company policy Intrinsic factors ?Challenging job ?Career prospects
• Expatriate's performance depends on:
Task characteristics
Headquarter s' support and cultural adjustment
Compensation package
Step 4
Appraising the performance
•A routine job •3 key decision area ? specifying on performance criteria ?Identifying appraisers ?Frequency of appraisal
Step 5
Providing regular feedback on progress towards goals
•The information provided to the assesses about work behavior and outcomes •Controls the work behavior of employees by directing their behavior for corrective action •The task of assessment is compounded by ?Time ?Distance
Step 6
Providing opportunities for improvement
•Conducting appraisal , offering feedback and organizing training and developmental programs
•It provides expatriates to improve , socialize and adjust to local environment
Step 7
Linking results with rewards
•Must follow performance •Only then there is positive reinforcement to repeat performance
Repatriation
? It is the process of returning a person back to one’s place of origin or citizen ship. ? An MNC may think that repatriation is the final phase in the expatriation process, but its ability to attract future expatriates depend on how well the firm handles its repatriation programmes.
Reasons for repatriations
? The period of posting got over. ? Expatriates want their children in a home country school. ? The assignees are not happy in their overseas assignment.
Benefits from returnees
Repatrees offer several advantage to the company. ? Returnees have imbibed global culture & also have understood local culture.
? Important element in expanding the international business and can advance the company business around the world. ? Can also transfer important technology or information from foreign subsidiary back to the home country.
The Repatriation process
Preparation • Preparation involves developing plans for future and gathering information about the new position. Physical relocation refers to saying good bye to colleagues & friends and travelling to the next posting, usually the home country. Transition means setting into temporary accommodation, making arrangements for housing & schooling and carrying out other administrative tasks. Readjustments involves coping with reverse culture shock & career demands.
Physical Relocation
• Repatriation Process •
Transition
Readjustment
•
Challenges of Re-entry
? Individual Perspectives ? Personal- “reverse culture shock” ? Professional disappointments ? Organization perspectives High withdrawals by returnees may affect company’s ability to hire bright individuals in future..
Key issues in international labour relations
Who should handle labour relations?
What should be the union tactics?
Multiculturalism
Who should handle labour relations?
headquarters
Subsidiary in concerned country National differences Different labour relation systems across countries
Some co-ordination over labour relations strategy Involved in overseas labour agreements made by subsidiaries
Involvement is Influenced by several factors
Headquarter involvement is influenced by
High degree of inter subsidiary production integration
Nationality of ownership of the subsidiary
Subsidiary characters
Dependence of the subsidiary on the parent company
What should be the union tactics?
strike
• Most common powerful ploy • An MNC enjoys formidable financial strength • Bargaining power of an union may be threatened or weakened
International trade secretariats
• 15 ITS’s which function as a loose confederation • Primary goal is to achieve transactional bargaining with each of the MNC in its industry
Lobbying for restrictive national legislations
• Desire to prevent the export of jobs via multinational investment policies • Labour unions seek intervention from ILO, UNCTAD, EU and OECD.
MULTICULTURALISM
Multiculturalism
• Customs, beliefs, norms and values that guide behaviour of people in society. • Global firms are repositories of multiculturalism • People from many cultures interact regularly • Domestic firms have multiculturalism by choice but it is by design with MNC’s therefore they need to maintain a united culture that knits all subsidiaries together.
Benefits of multicultural management
Creativity and innovation
Evolving Universally acceptable HR policies
Sensitivity in dealing with foreign custmers
‘superorganisational culture’
Possibilities of hiring the best talent
Hofstede’s cultural dimensions
• • • • Power distance Uncertainty avoidance Individualism Masculinity
doc_556299773.pptx
Describing on differentiates between domestic HRM and IHRM, how HR planning (HRP) is done.
Definition
The process of procuring, allocation training, developing, and effectively utilizing human resources in an international business is called international human resource management.
Dimensions
IHRM
HR activities Types of Employees Countries of operation
Procurement Allocation Utilizing all domestic HRM functions.
Host country national
Parent country national
Host country Third country national Home country Third country or other
Differences Between Domestic HRM and IHRM
more HR activities the need for a broader perspective more involvement in employee’s personal lives changes in emphasis as the workforce mix of expatriates and locals varies risk exposure broader external influences
5 (c) 2009 by Nelson Education Limited.
More HR activities
• • • • •
taxation relocation and orientation expatriate administrative services host government relations language translation services.
the need for a broader perspective
• administering programs that are equitable for more than one group.
more involvement in employee’s personal lives
• housing arrangements • healthcare • compensation (cost-of-living allowances, premiums, taxes) • visa requirements • Schooling.
changes in emphasis as the workforce mix of expatriates and locals varies.
risk exposure
• • • • • • • • • • •
expatriate failure direct costs indirect costs militant activities emergency evacuation government economy labour standards and costs taxation health and safety laws, compliance regulations, codes of conduct.
broader external influences
MANAGING INTERNATIONAL HR ACTIVITIES
HR Planning(HRP)
HRP
Recruitment and Selection
Training and Development
Performance Management
Remuneration
Repatriation
Employee Relations
Multicultural Management
Recruitment and Selection
Ethnocentric Approach
Polycentric Approach Geocentric Approach
• All key management positions are held by parent country nationals • Host country nationals to be hired to manage the subsidiaries
• Selecting the best person for the job,irrespective of nationality
Parent Country Nationals(PCNs)
Advantage Disadvantage
?Familiarity with the home office, goals, objectives, policies, and practices.
?Easy organizational control and coordination ?Promising managers are given international exposure ?PCNs are the best people for assignment because of special skills and experiences.
?Difficulty in adapting to the foreign language and the socio-economic, political, cultural and legal environment.
?Excessive cost of selecting, training and maintaining expatriate managers and their families abroad. ?Promotional opportunities for HCNs are limited. ?Compensation for PCNs and HCNs may differ ?Family adjustment problems, especially concerning the unemployed spouses
Host Country Nationals(HCNs)
Advantage Disadvantage ?Communication difficulties in dealing with home office personnel ?Lack of opportunity for the home country's nationals to gain international and cross cultural experience ?HCNs have limited career opportunity outside the subsidiary
?Familiarity with the socioeconomic, political ,legal environment and with business practices in the host country
?Lower cost incurred in hiring as compared to PCNs and TCNs ?Promotional opportunities to locals and consequently their motivation and commitment ?Languages and other barriers are eliminated ?Continuity of management improves, since HCNs stay longer in positions
?Hiring HCNs may encourage a federation of nationals rather than global units
Third Country Nationals(TCNs)
Advantage Disadvantage ?Salary and benefits requirements may be lower than for PCNs ?TCNs may be better informed than for PCNs about host country environment ?TCNs are truly international managers ?Host country government may resent hiring TCNs ?TCNs may not want to return to their own countries after assignment ?Host country's sensitivity with respect to nationals of specific countries
HCNs or PCNs
Parent Country Characteristics
Industry Characteristics Subsidiary Characteristics
• Cultural distance between parent unit andsubsidiary,size of operations, research intensity
• Financial institutions, need for control, need to customize
• Age, acquired ,performance, ownership pattern
Host Country Variables
• Education levels, political risks, cost of living
THE EXPATRIATE PROBLEM
?A major problem connected with expatriates is their premature return to their home country. ?Popularly called as expatriate faliure
Reason for Expatriate failure
US Firms
? In ability of spouse to adjust ? Managers inability to adjust
Japanese Firms
? Inability to cope with larger international responsibilities ? Difficulties with the environment
? other family reason
? Manger personal or emotional maturity ? Inability to cope with larger international responsibilities
? Personal or emotional problem
? Lack of technical competence ? Inability of spouse to adjust
Factor In Expatriate Selection
Technical ability
Crosscultural suitabilty Family Requirem -ents
Selection decision
Countrycultural requirem ents
Language
MNC requirmen -ts
Training and development
Cross cultural training
? CCT seeks to foster an appreciation for the host country’s culture. ? An expatriate should receive training in the host country’s culture, history, politics, economy, religions, and social and business practice. ?CCT include counseling on return to home base to prevent reverse culture shock.
Benefits and drawbacks of CCTI
MERITS
? Increase chances of success in global assignment ? Provides a comprehensive global perspective for managers
DEMERITS
? Develops a false sense of confidence among expatriates ? may not remove cultural biases and prejudices
? Instills a sense of confidence into people ? May not be taken seriously by the recipients ? Foreign employees can be managed ? Reduces culture shock ? May not make a visible difference on business volumes ? Can never fully prepare an assignee to face real problem
Language Training
? Language training is seemingly obvious and desirable component of a predeparture program. ?English is the primary language of international businesses, and most expatriates from all the countries can converse English.
Practical Training
? practical training seeks to help the expatriate manager and family feel ‘at home’ in the host-country.
Management development and strategy
? MNCs use management development as a strategic tool. ? MNCs need to be able to detect pressure to conduct business in a locally- responsive manner. ? MNC help build corporate culture by encouraging new mangers to socialize and imbibe the value and norms of the firm. ? Bringing managers together in one location for extended periods and rotating them through different jobs in several countries help the firm build a informal management network.
HCN Training
? Gaining knowledge about parent organization ? Acquisition of technical prospects specific to organization ? Role of subsidiary from technological and culture prospective
? Awareness of parent country cultural norms
Performance management
• Post assignment performance related issue • As a process that enables an MNC to evaluate and facilitate continuous improvement of individual , subsidiary units and corporate performance against clearly defined pre set goals and targets.
Steps
Linkage to organizational strategy Setting individual performance goals Identifying variable impacting performance
Providing opportunities for improvement
Providing regular feedback on progress towards goals
Appraising the performance
Linking results with rewards
Step 1
Linkage to organizational strategy •Performance management becomes an integral part of corporate strategies •Helps in identifying employees with high potentials, facilitates establishing performancereward inking and delineates employee needs for development
•Vital for formulation and execution of strategies
Step 2
Setting individual performance goals
•It’s a future outcome that individual and organization desire to achieve •Serve 3 purposes : -guide and direct behavior in the direction of the goal -offer benchmark for employees to strive towards excellence -reflect what employee & manager consider important
•Goals must be SMART
Goals and performance
High
Low Low Goal intensity High
Task performance
Step 3
Identifying variable impacting performance
•Performance of non expatriate is influenced by Extrinsic factors ?Working condition ?Company policy Intrinsic factors ?Challenging job ?Career prospects
• Expatriate's performance depends on:
Task characteristics
Headquarter s' support and cultural adjustment
Compensation package
Step 4
Appraising the performance
•A routine job •3 key decision area ? specifying on performance criteria ?Identifying appraisers ?Frequency of appraisal
Step 5
Providing regular feedback on progress towards goals
•The information provided to the assesses about work behavior and outcomes •Controls the work behavior of employees by directing their behavior for corrective action •The task of assessment is compounded by ?Time ?Distance
Step 6
Providing opportunities for improvement
•Conducting appraisal , offering feedback and organizing training and developmental programs
•It provides expatriates to improve , socialize and adjust to local environment
Step 7
Linking results with rewards
•Must follow performance •Only then there is positive reinforcement to repeat performance
Repatriation
? It is the process of returning a person back to one’s place of origin or citizen ship. ? An MNC may think that repatriation is the final phase in the expatriation process, but its ability to attract future expatriates depend on how well the firm handles its repatriation programmes.
Reasons for repatriations
? The period of posting got over. ? Expatriates want their children in a home country school. ? The assignees are not happy in their overseas assignment.
Benefits from returnees
Repatrees offer several advantage to the company. ? Returnees have imbibed global culture & also have understood local culture.
? Important element in expanding the international business and can advance the company business around the world. ? Can also transfer important technology or information from foreign subsidiary back to the home country.
The Repatriation process
Preparation • Preparation involves developing plans for future and gathering information about the new position. Physical relocation refers to saying good bye to colleagues & friends and travelling to the next posting, usually the home country. Transition means setting into temporary accommodation, making arrangements for housing & schooling and carrying out other administrative tasks. Readjustments involves coping with reverse culture shock & career demands.
Physical Relocation
• Repatriation Process •
Transition
Readjustment
•
Challenges of Re-entry
? Individual Perspectives ? Personal- “reverse culture shock” ? Professional disappointments ? Organization perspectives High withdrawals by returnees may affect company’s ability to hire bright individuals in future..
Key issues in international labour relations
Who should handle labour relations?
What should be the union tactics?
Multiculturalism
Who should handle labour relations?
headquarters
Subsidiary in concerned country National differences Different labour relation systems across countries
Some co-ordination over labour relations strategy Involved in overseas labour agreements made by subsidiaries
Involvement is Influenced by several factors
Headquarter involvement is influenced by
High degree of inter subsidiary production integration
Nationality of ownership of the subsidiary
Subsidiary characters
Dependence of the subsidiary on the parent company
What should be the union tactics?
strike
• Most common powerful ploy • An MNC enjoys formidable financial strength • Bargaining power of an union may be threatened or weakened
International trade secretariats
• 15 ITS’s which function as a loose confederation • Primary goal is to achieve transactional bargaining with each of the MNC in its industry
Lobbying for restrictive national legislations
• Desire to prevent the export of jobs via multinational investment policies • Labour unions seek intervention from ILO, UNCTAD, EU and OECD.
MULTICULTURALISM
Multiculturalism
• Customs, beliefs, norms and values that guide behaviour of people in society. • Global firms are repositories of multiculturalism • People from many cultures interact regularly • Domestic firms have multiculturalism by choice but it is by design with MNC’s therefore they need to maintain a united culture that knits all subsidiaries together.
Benefits of multicultural management
Creativity and innovation
Evolving Universally acceptable HR policies
Sensitivity in dealing with foreign custmers
‘superorganisational culture’
Possibilities of hiring the best talent
Hofstede’s cultural dimensions
• • • • Power distance Uncertainty avoidance Individualism Masculinity
doc_556299773.pptx