MODULE 1. INTERNATIONAL H.R.

M Difference between Domestic HRM and IHRM, Managing International HR activities- HR planning, Recruitment & Selection, Training & Development, Performance management, Remuneration, Repatriation & employee relations. Socio-Political Economic System U.S, U.K, Japan and India a comparative analysis.

Why study of IHRM is essential? Impact of internationalisation of business - Boundary-less business operations - Increasing international competition on quality, price, delivery schedule, material availability etc

Typical HRM activities are: - HR planning - Staffing (recuitment, selection, placement) - Performance management - Training and development - Compensation and benefits - Industrial Relations

Morgan model of IHRM presents three Dimensions of IHRM: 1. Procurement, allocation and utilisation of HR (covers all typical HR activities) 2. National or country categories involved in IHRM activities. -Host country -Home country -Other countries

3. Category of employees of an international firm - Host Country Nationals (HCNs) - Parent Country Nationals (PCNs) - Third Country Nationals (TCNs) Example :-US multinational IBM employs Australian citizen in its Australian operations (HCNs), often sends US citizens to Asia-pacific countries on assignments (PCNs) and may send some of its Singaporean employee on an assignment to its Japanese operations (TCNs)

Model of IHRM

HR Activities
Utilize

Procure

Allocate

Other HCNs

Home
PCNs Host

TCNs
Types of employees

countries

Morgan defines IHRM as the interplay among the three dimensions HR activities, type of employees and countries of operation. Broadly functions remain the same but national boundaries changes. Domestic HRM is also now taking IHRM issues like multicultural workforce issues, workforce diversity etc. but the context changes when dealing in international context.

What is an Expatriate? If an employee who is working and temporarily residing in a foreign country. Also called international assignees. What is inpatriate? Transfer of subsidiary employee to parent country. Or when HCN is transferred to parent country operation What is transpatriate? Employees who are moved between subsidiaries

International Assignments creates Expatriates

Parent country HQ/operations HCNs HCNs National Border PCNs Subsidiary operations Counrty B

PCNs

Subsidiary operations Counrty A

TCNs

National Border

Difference between domestic and I-HRM

Key variable that differentiates domestic and IHRM complexity of operating in different countries employing different national categories of workers

Complexity of IHRM according to Dowling

1. More HR activities 2. The need for a broader prospective 3. More involvement in employees personal life 4. Changes in emphasis as the workforce mix of expatriates and locals varies 5. Risk exposure 6. Broader external influences

1.More HR activities (not needed in domestic)

-International taxation: tax equalization to be designed, accounting firm for international taxation advice -International relocation and orientation: predeparture training, immigration and travel, information regarding housing etc, compensation details like salary overseas, allowances, taxation treatment, returning of expatriates etc.

-Admn. Services for the expatriates: in host country, policy/practice may conflict with local condition. Host country requires AIDS test for work permit for employee whose parent firm headquarter is in USA where this remains controversial issue - Host govt. relations: - Policy/practices in host country: payment in kind also violates US foreign corrupt Practices Act. - language translation service:

2. The need for a broader perspective

- Face problem of designing and administering program for more than one national (PCN,HCN,TCN) who may have to work together in a particular location, have to take a broader view of issues. Complex equity issues arise when PCN, HCN and TCN work together and its a major challenge in IHRM to resolve such issues.

3. More involvement in employees personal life

- Involvement in employees personal life is necessary to a greater extent for selection training and effective mgmt of PCN and TCN employees - Multinationals provide IHR services for PCN and TCNs to ensure that expatriate employees banking investment, home rental while on assignment, home visit and final repatriations is properly coordinated - Requirement like marriage certificate etc to take care at the time of recruitment

4. Changes in emphasis as the workforce mix of expatriates and locals varies

- The need for PCNs and TCNs declines as more trained locals become available - Resources for expatriate taxation, relocation and orientation are transferred to local staff selection, training and management development - The responsibility of local HR activities broadens

5. Risk exposure
The potential high cost problems are: - Expatriate failure - Under performance while on international assignment - The direct cost per failure to the parent firm may be even three times the domestic salary plus relocation expenses. The indirect cost are: - loss of foreign market share - damage to key host country relationship - terrorism and political risk - devise emergency evacuation procedure

6. Broader external influences

Major external factors influencing IHRM: Type of government The state of the economy Accepted practices of doing business in host countries (host government dictating hiring procedures)

Variable that moderates differences between Domestic and Intl HRM

The cultural environment
The indust(s) within which the MNC is primarily invld

Domestic and Intl Activities of HRM func

Extent of reliance of MNC on its Home Country or domestic mkt Comlexity invld in oprtng in diff count and emploing diff categ of employees

Attitude of Senior mgmt

Cultural environment
Culture is acquired thru socialisation process which begins at birth Behavioral attitude are transmitted culturally During visit abroad, cultural differences in language, food, dress, hygiene and attitude to time is confronted. This ac prove difficult when required to live Cultural shock is a phenomena experienced by people who move across cultures. People experience shock reaction to new cultural experience that cause psychological disorientation Cultural shock can lead to negative feeling about host country and its people

 Another issue in x-culture is Emic-Etic distinction Emic- is culture specific aspects of concepts or behaviour Etic- is culture common aspects of concepts or behaviour