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    4 - Managing Global HR

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    Faisal Malek
    Managing global human resources (HR) involves procuring, motivating, retaining, and utilizing employees across a multinational company's corporate offices and foreign subsidiaries. This process, known as international HR management (IHRM), requires HR functions like recruitment, training, performance management, and compensation to take a broader international perspective. IHRM also involves managing three categories of employees - parent country nationals, host country nationals, and third country nationals - across multiple host countries while balancing standardized vs. localized HR practices. Key challenges include developing a globally integrated yet locally responsive approach to managing a diverse international workforce.

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    4 - Managing Global HR

    Uploaded by

    Faisal Malek
    82 views27 pages
    Managing global human resources (HR) involves procuring, motivating, retaining, and utilizing employees across a multinational company's corporate offices and foreign subsidiaries. This process, known as international HR management (IHRM), requires HR functions like recruitment, training, performance management, and compensation to take a broader international perspective. IHRM also involves managing three categories of employees - parent country nationals, host country nationals, and third country nationals - across multiple host countries while balancing standardized vs. localized HR practices. Key challenges include developing a globally integrated yet locally responsive approach to managing a diverse international workforce.

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    Managing global human resources (HR) involves procuring, motivating, retaining, and utilizing employees across a multinational company's corporate offices and foreign subsidiaries. This process, known as international HR management (IHRM), requires HR functions like recruitment, training, performance management, and compensation to take a broader international perspective. IHRM also involves managing three categories of employees - parent country nationals, host country nationals, and third country nationals - across multiple host countries while balancing standardized vs. localized HR practices. Key challenges include developing a globally integrated yet locally responsive approach to managing a diverse international workforce.

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    82 views27 pages

    4 - Managing Global HR

    Uploaded by

    Faisal Malek
    Managing global human resources (HR) involves procuring, motivating, retaining, and utilizing employees across a multinational company's corporate offices and foreign subsidiaries. This process, known as international HR management (IHRM), requires HR functions like recruitment, training, performance management, and compensation to take a broader international perspective. IHRM also involves managing three categories of employees - parent country nationals, host country nationals, and third country nationals - across multiple host countries while balancing standardized vs. localized HR practices. Key challenges include developing a globally integrated yet locally responsive approach to managing a diverse international workforce.

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    Managing global HR

    Meaning of International HRM


    Globalisation of business has probably touched the HR manager more severely than any other functional head. HR executive needs to give international orientation to various HR sub systems viz. hiring, T & D, PMS, compensation, IR, etc Just as success of a domestic business depends on its HR, 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 at corporate head offices & at the foreign plants. This process of procuring, motivating, retaining & effectively utilising people is known as IHRM.

    Model of IHRM

    HR Activities

    Procure Allocate Utilise

    Types of employees

    Parent country nationals Host country nationals Third country nationals Home country/Parent country Host country Third country

    Countries

    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

    Managing IHR Activities


    HRP Recruitment & Selection Training & Development Performance Management Remuneration Repatriation Employee Relations Multicultural Management

    Organisational Effectiveness

    1. HRP
    Key issues in international HRP Identify top management potentials Identify critical success factors Provide developmental opportunities Maintaining commitment to individuals in international career path Strategic business planning Dealing with multiple business units while attempting to achieve globally & regionally focused strategies

    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

    Approaches to staffing

    Ethno centric Approach

    All key management positions across all subsidiary are held by parent country nationals Staffing requires host country nationals to be hired to manage subsidiaries, while parent country nationals occupy key positions at corporate HQ

    Poly centric Approach

    Geo centric Approach

    Best people for the key jobs through out the organisation, regardless of nationality

    Selection decision from three categories of employees

    PCN HCN TCN

    Advantages & Disadvantages of each is to be explained.

    Factors favouring PCNs & HCNs


    Characteristics Parent country characteristics Description cultural difference b/w parent unit & subsidiary Size of operations Research intensity Financial institutions Need for control Need to customise

    Industry characteristics

    Factors favouring
    Characteristics Description Subsidiary characteristics Age Experience Performance Ownership pattern Host country variables Education Political risks Cost of living

    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

    Expatriate problem - Reasons of expat failure


    Inability to adjust in host country U shaped curve Tourist stage Disillusionment Cultural shock Adaptation & adjustment

    Expatriate problem - Factors in expat selection


    Technical ability Cross cultural suitability Family requirements MNC requirements Language Country cultural requirements

    3. T & D

    Cross cultural training Language training Practical training Management development strategy HCN training

    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

    5. Remuneration

    Objectives Problems Factors influencing international compensation Components of international compensation Tailoring the package

    Objectives
    Problems

    Attract employees Facilitate movement of expat Reasonable relationship Cost effective

    Discrepancies in pay b/w parent, host & third country Life cycle stage of expat family Re-entry into home country Frequent changes

    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 country governments role Industry type Competitors strategies

    Components of international compensation


    Base salary Benefits Allowances Incentives Taxes

    Tailoring the package


    Balance sheet approach Going rate approach Lumpsum Cafeteria approach Regional system

    6. Repatriation

    Meaning Reasons for repatriation Advantages Process Challenges

    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

    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

    Process

    Challenges

    Preparation Physical relocation Transition Re-adjustment

    Individual perspectives Organisational perspectives

    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

    8. Multicultural Management

    Hofstedes cultural dimension


    Power distance Uncertainty avoidance Individualism Masculinity Future orientation

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