4_managing global hr

7/27/2019 4_Managing Global HR

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Managing global HR


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Meaning of International HRM

Globalisation of business has probably touched the HRmanager more severely than any other functional head.

HR executive needs to give international orientation tovarious HR sub systems viz. hiring, T & D, PMS,compensation, IR, etc

Just as success of a domestic business depends on itsHR, so is the case with an international business.

Resources cannot be effectively utilised/transferred to

foreign affiliates without using human power. An international business must procure, motivate, retain &

effectively utilise the services of its people both atcorporate head offices & at the foreign plants.

This process of procuring, motivating, retaining &

effectively utilising people is known as IHRM.


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Model of IHRM

HR Activities Procure

Allocate

Utilise

Types of employees Parent country nationals

Host country nationals

Third country nationals

Countries Home country/Parent country

Host country

Third country


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Domestic HRM V/S IHRM

More HR Activities

Need for a broader perspective

More involvement in employee personal lives Changes in emphasis as the workforce mix of

expats & local vary

Risk exposure More external influence


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Managing IHR Activities

HRP

Recruitment & Selection

Training & Development Performance Management

Remuneration

Repatriation Employee Relations

Multicultural Management

OrganisationalEffectiveness


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1. HRP

Key issues in international HRP

Identify top management potentials

Identify critical success factors

Provide developmental opportunities

Maintaining commitment to individuals ininternational career path

Strategic business planning Dealing with multiple business units while

attempting to achieve globally & regionallyfocused strategies


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2. Recruitment & Selection

Approaches to staffing

Selection decision from three categories of

employees Factors favouring PCNs & HCNs

Expatriate problem

Expat assignment life cycle

Reasons of expat failure

Factors in expat selection


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Approaches to staffing

Ethno centric Approach

All key management positions across all subsidiary

are held by parent country nationals

Poly centric Approach

Staffing requires host country nationals to be hired to

manage subsidiaries, while parent country nationals

occupy key positions at corporate HQ Geo centric Approach

Best people for the key jobs through out the

organisation, regardless of nationality


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Selection decision from three

categories of employees

PCN

HCN

TCN

Advantages & Disadvantagesof each is to be explained.


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Factors favouring PCNs & HCNs

Characteristics Description

Parent country

characteristics

cultural difference b/w

parent unit & subsidiary

Size of operationsResearch intensity

Industry characteristics Financial institutions

Need for controlNeed to customise


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Factors favouring

Characteristics Description

Subsidiary characteristics Age

ExperiencePerformance

Ownership pattern

Host country variables Education

Political risks

Cost of living


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Expatriate problem - Expat

assignment life cycle

Determining the need for an expat

Selection process

Pre assignment training

Departure Post arrival orientation & training

Crisis & adjustment

Re assignment abroad

Repatriation & adjustment

Crisis & failure

Repatriation & adjustment


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Expatriate problem - Reasons

of expat failure

Inability to adjust in host country

U shaped curve

Tourist stage

Disillusionment

Cultural shock

Adaptation & adjustment


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Expatriate problem - Factors in

expat selection

Technical ability

Cross cultural suitability

Family requirements

MNC requirements

Language

Country cultural requirements


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3. T & D

Cross cultural training

Language training

Practical training Management development strategy

HCN training


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4. PMS

Steps in expat Performance Management

Linkage to organisational strategy

Setting individual performance goals SMART Goals

Identifying variables impacting performance Compensation package

Task characteristics

HQs support

Host environment Appraise the performance

Provide regular feedback

Provide opportunities for improvement

Linking results with rewards


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5. Remuneration

Objectives

Problems

Factors influencing internationalcompensation

Components of international compensation

Tailoring the package


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Objectives

Problems

Attract employees

Facilitate movement of

expat

Reasonablerelationship

Cost effective

Discrepancies in pay

b/w parent, host & third

country

Life cycle stage ofexpat family

Re-entry into home

country

Frequent changes

F t i fl i i t ti l


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Factors influencing international

compensation

MNC Internal environment

Goal orientation

Capacity to pay Competitive strategy

Organisational culture

Internal workforce

composition

Labour relations

Subsidiary role

MNC External

environment

Parent nationality

Labour market

characteristics

Local culture

Home & host countrygovernments role

Industry type

Competitors strategies

C f i i l


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Components of international

compensation

Base salary

Benefits

Allowances Incentives

Taxes


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Tailoring the package

Balance sheet approach

Going rate approach

Lumpsum Cafeteria approach

Regional system


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6. Repatriation

Meaning

Reasons for repatriation

Advantages Process

Challenges


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Meaning

Activity of bringing expatriate back to home

country

Re-entry shock or reverse culture shock

Ability to attract future expat depends on how

well firm handles its repatriation process


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Reasons for repatriation

Advantages

Period of posting got

over

Wants their children in

home country school Not happy in the

overseas assignment

Failure to do the job

Developed global

culture + local culture

Operations of HQ +subsidiary firms

Expand international

prospects


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Process Challenges

Preparation

Physical relocation

Transition

Re-adjustment

Individual perspectives

Organisational perspectives


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7. Employee Relations

Key issues in international labour relations

Who should handle labour relations

HQ

Subsidiary

What should be the union tactics

Strikes

Lobbying

ITSs

ILO, UNCTAD, EU, OECD


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8. Multicultural Management

Hofstedes cultural dimension

Power distance

Uncertainty avoidance

Individualism

Masculinity

Future orientation

4_managing global hr

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