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  1. 1. Submitted By- Manisha Gupta MBA-4A 02614803912
  2. 2. What is IHRM? • IHRM can be defined as set of activities aimed managing organizational human resources at international level to achieve organizational objectives and achieve competitive advantage over competitors at national and international level. • IHRM includes typical HRM functions such as recruitment, selection, training and development, performance appraisal and dismissal done at international level and additional activities such as global skills management, expatriate management and so on.
  3. 3. OBJECTIVES OF IHRM • Create a local appeal without compromising upon the global identity. • Generating awareness of cross cultural sensitivities among managers globally and hiring of staff across geographic boundaries. • Training upon cultures and sensitivities of the host country.
  4. 4. NEED FOR IHRM • Managing expatriates • Globalization has forced HRM to have international orientation • Effectively utilise services of people at both the corporate office and at the foreign plants
  6. 6. More HR activities Need for a broader perspective More involvement in employee personal lives Changes in emphasis as the workforce mix of expatriates and locals vary Risk exposure More external influences Characteristics of IHRM 6
  7. 7. More Human Resource Activities 7 • Difficulty in implementing HR in host countries • Developmental opportunities for international managers. Human Resource Planning • Ability to mix with organisation’s culture • Ethnocentric, polycentric or geocentric staffing approach • Selection of expatriates • Managing repatriation process Employee Hiring • Emphasis on cultural training • Language training • Training in manners & mannerisms Training & Development
  8. 8. 8 • Devising an appropriate strategy to compensate expatriates • Minimising difference in pay between parent, host & third country nationals • Issues relating to the re-entry of expatriates into the home country Compensation • Constraints while operating in host countries need to be considered. • Physical distance, time differences & cost of reporting system add to the complexity. Performance Management • Handling industrial relations problems in a subsidiary. • Attitude of parent company towards unions in a subsidiary Industrial Relations
  9. 9. Pay issues • Different countries, different currencies • Gender based pay in Korea, Japan, Indonesia Health insurance for employees & their families Overtime working – Korean & Japanese firms Promotions based on seniority or merit Need for Broader Perspective 9
  10. 10. 10 • More involvement for both parent-country & third-country nationals • Housing arrangements • Health care • Remuneration packages • Assist children left behind in boarding schools More Involvement in Employee’s Personal Lives • Need for parent-country & third-country nationals decrease as more trained locals become available. • Resources reallocated to selection, training & management development Changes in emphasis as the workforce mix of expatriates and locals vary
  11. 11. 11 • Physical safety of the employees. • Failure of expatriates to perform well  financial losses to the firm Risk Exposure • Dealing with ministers, political figures, economic & social interest groups • Hiring procedures dictated by host country. • Catch up with local ways of doing business. External Influence
  12. 12. Reasons for Growing Interest in IHRM 12 Globalisation of Business Effective HRM  determinant of success in international business Movement to network organisations from traditional hierarchical structures Significant role in implementation & control of strategies
  13. 13. STAFFING POLICIES IN IHRM • Ethnocentric: Here the Key management positions are filled by the parent country individuals. • Polycentric: In polycentric staffing policy the host country nationals manage subsidiaries whereas the headquarter positions are held by the parent company nationals. • Geocentric: In this staffing policy the best and the most competent individuals hold key positions irrespective of the nationalities.
  14. 14. Recruitment & Selection 14 Ethnocentric Approach • Key management positions held by parent- country nationals • Appropriate during early phases. Polycentric Approach • Host-country nationals hired to manage subsidiaries • Parent-country nationals occupy key positions at corporate HQ. Geocentric Approach • Seeks best people for key jobs, irrespective of nationality • Underlying principle of a global corporation Regiocentric Approach • Variation of staffing policy to suit particular geographic areas • Provides a 'stepping stone' for a firm wishing to move from an ethnocentric or polycentric approach to a geocentric approach categories of employees can be hired – parent country nationals (PCNs), host country nationals (HCNs) & third country nationals (TCNs)
  15. 15. IHRM MODEL
  16. 16. How It Is Different from Domestic HRM • Domestic HRM is done at national level and IHRM is done at international level. • Domestic HRM is concerned with managing employees belonging to one nation and IHRM is concerned with managing employees belonging to many nations (Home country, host country and third country employees) • Domestic HRM is concerned with managing limited number of HRM activities at national level and IHRM has concerned with managing additional activities such as expatriate management. • Domestic HRM is less complicated due to less influence from the external environment. IHRM is very complicated as it is affected heavily by external factors such as cultural distance and institutional factors.
  18. 18. ISSUES IN IHRM • Managing International Assignments • Employee and Family Adjustments • Selecting the right person for foreign assignments • Culture and Gauge • Language and Communication
  19. 19. EFFECTIVE IHRM IMPLEMENTATION The following checklist identifies some of the critical decisions/actions required in the formulation and implementation of an effective IHR strategy. 1. As certain the current and intended nature of international operations in the organisation (multi- domestic, international, global or transnational?) 2. Determine the extent to which HR policies and practices should be standardised or localised in accordance with overall organisational strategy. 3. Assess the extent to which local cultural, social, political, economic and legal factors will impinge on any attempts to apply standard HR policies if integration is a key factor in organisational strategy.
  20. 20. 4. Ensure a computerised database of global human resources is used if integration is desired. 5. Work with the senior management team to identify the competencies required to achieve global organisational objectives. 6. Work with national HR and line managers to formulate IHR policies and practices in the key areas of sourcing, development and reward which will embed a transnational mindset in the organisation.
  21. 21. Expatriate Assignment Life Cycle 22 Determining the need for an expatriate Selection Process Pre-assignment training Departure Post-arrival Orientation & Training Crisis & Adjustment Crisis & Failure Repatriation & Adjustment Reassignment Abroad
  22. 22. Expatriate Failure 23 Premature return of expatriates to their home country Reasons • Inability to adjust to host country culture  leads to culture shock • Personal & emotional problems • Difficulties with the environment • Inability to cope with larger international responsibilities • Other family reasons
  23. 23. THANK YOU