This document discusses international human resource management (IHRM). It defines IHRM as procuring, allocating, and utilizing human resources across international businesses. Key aspects of IHRM include managing expatriates, adapting to globalization, and effectively using employees in corporate offices and foreign plants. The document outlines IHRM models, activities, types of employees, and considerations for countries involved. It also discusses challenges such as cultural differences, distances, and varying laws that make IHRM complex.

1. StudsPlanet
Leading Education consultant in India
www.StudsPlanet.com

2. INTERNATIONAL
HUMAN RESOURCE
MANAGEMENT

3. 3
Definition
• The process of procuring, allocating and
effectively utilising human resources in an
international business is called international
human resources management (IHRM).
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

4. Model of IHRM
4
HR
Activities
• Procure
• Utilise
• Allocate
Types of
employees
• Home country
nationals
• Host country
nationals
• Third country
nationals
Countries
• Home country
• Host country
• Third country

5. 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
5

6. More Human Resource
Activities6
• 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

7. 7
• 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

8. 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
8

9.  More involvement for both
parent-country & third-
country nationals
 Housing arrangements
 Health care
 Remuneration packages
 Assist children left behind in
boarding schools
 Need for parent-country
& third-country nationals
decrease as more
trained locals become
available.
 Resources reallocated to
selection, training &
management
9
More Involvement in
Employee’s Personal Lives
Changes in Emphasis

10. 10
• 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

11. Reasons for Growing Interest in
IHRM11
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

12. Basic Steps in IHRM
12
HRP
Recruitment &
Selection
Training & Development
Performance
Management
Remuneration
Repatriation
Employee
Relations

13. Recruitment & Selection
13
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
3 categories of employees can be hired – parent country nationals (PCNs),
host country nationals (HCNs) & third country nationals (TCNs)

14. Advantages & Disadvantages of
Using PCNs

Familiarity with home office,
goals, practices

Easy organisational control
& coordination

International exposure to
promising managers

PCNs  special skills &
experiences

Difficulty in adapting to foreign country

Excessive cost of selecting, training &
maintaining expatriates

Promotional opportunities limited for
HCNs

May try to impose inappropriate HQ
style

Compensation differences for HCNs &
PCNs
14
Advantages Disadvantages

15. Advantages & Disadvantages of
Using HCNs

Familiarity with the situation in
host-country

Lower hiring costs

Locals motivated due to
promotional opportunities

Responds well to localisation of
subsidiary’s operations

No language barrier

HCNs stay longer in positions

Difficulty in exercising effective control
over the subsidiary’s operations

Communication problems with home
office personnel

No opportunity for home country’s
nationals to gain international
experience

Limited career opportunity outside the
subsidiary
15
Advantages Disadvantages

16. Advantages & Disadvantages of
Using TCNs

Salary & benefit
requirements lower than
that of PCNs.

May be better informed
about host country
environment.

Truly international managers

Host country govt. may
resent hiring TCNs.

May not return to their
country after assignment.

Host country’s sensitivity
w.r.t nationals of specific
countries
16
Advantages Disadvantages

17. Expatriate Assignment Life
Cycle17
Determining the
need for an
expatriate
Selection
Process
Pre-assignment
training
Departure
Post-arrival
Orientation &
Training
Crisis &
Adjustment
Crisis &
Failure
Repatriation &
Adjustment
Reassignment
Abroad

18. Expatriate Failure
18
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

19. Training & Development
19
Cross
Cultural
Training
Language
Training
Practical
Training
Management
Development
& Strategy

20. HCN Training
20
Gaining
knowledge about
parent
organisation
Technical know-
how specific to
organisation
Role of the
subsidiary in the
MNC
General
awareness of the
parent country
cultural norms

21. Repatriation
Preparation
Physical
Relocation
Transition
Readjustment
 The activity of bringing
the expat back to the
home country
 Can cause re-entry
shock or reverse
culture shock
 Reasons
 Posting period over
 Children’s education
 Not happy with
overseas assignment
 Failure to do a good job
21

22. 22