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IHRM Staffing Policy

IHRM

IHRM..?

International HRM

HR FunctionsHRPJob AnalysisRecruitment & SelectionPerformance AppraisalTraining & developmentJob EvaluationCompensation & BenefitsIndustrial Relations

IHRM is concerned about managing human resources atMultinational Companies and it involves managing 03 types of employees namely,

Parent Country Nationals (PCNs)Host Country Nationals (HCNs)Third Country Nationals (TCNs)

Staffing ApproachEthnocentric

Polycentric

Geocentric

Ethnocentric ApproachStrategic decisions are made at HeadquartersLimited Subsidiary autonomyKey positions in domestic and foreign operations are held by headquarters personnel; PCNs manage subsidiariesHome country policies and practices are likely to be used in the subsidiariesThe organization tries to replicate the corporate culture

Polycentric ApproachEach Subsidiary is a distinct national entity with some decision-making autonomyHost country nationals will usually fill management positions HCNs manages subsidiaries who are seldom promoted to HQ positionPCN are rarely transferred to subsidiary positionsFewer language and cultural barriers

Geocentric ApproachLooks for the best person for a specific job, regardless of nationality Managers usually have previous international management experienceHas a more collaborative approach between the parent company and its subsidiaries

Type of StaffParent Country Nationals (PCN)Are employees from the country in which the organization is based (Headquarters)Host country nationals (HCNs)Are employees from the country in which the subsidiary is based.Third country nationals (TCNs)Are employees who are working in a different country (i.e. Not a PCN or TCN)

PCNsAdvantageDisadvantageFamiliarity with the parent organisations goals, objectivities, policies and practicesDifficulties in adapting to the foreign language and the socioeconomic, political, cultural and legal environment

Effective communication with parent country staffExcessive costs involved in selecting and developing expatriate managers

Employees gain experiences worldwideFamily adjustment problems

HCNsAdvantageDisadvantageFamiliarity with the socioeconomic, political and legal environment and with business practices in the host countryDifficulties in exercising effective control over the subsidiary's operation

Lower costs incurred in hiring staff in comparison to PCNs and TCNsCommunication difficulties in dealing with the parent company

Provides opportunities for advancement and promotion to local nationals; increases their commitment and motivationLack of opportunities for the home countrys internationals to gain international and cross cultural experiences

Responds effectively to the host countrys demands

TCNsAdvantageDisadvantagePerhaps the best compromise between securing needed technical and managerial expertise and adapting to a foreign cultural environmentHost countrys sensitivity with respect to nationals of certain countries

TCNs are usually international business managers with a wealth of experienceLocal nationals are impeded in their efforts to upgrade their own ranks and assume responsible positions are taken by them

TCNs may be better informed about their host environment than PCNs

Difference b/w IHRM & DHRMDomestic HRMInternational HRMNational LevelInternational LevelConcerned with managing employeesbelongingto one nation concerned with managingemployeesbelonging to many nations Concerned managing limited number of HRM activities at national level concerned with managing additional activities such as expatriatemanagement.less complicated due to less influence from the externalenvironment.very complicated as it is affected heavily by external factors such as cultural distance and institutional factors.

Case Study

14

ExpatriatesExpatriate Managers are expensive (global expansion comes with huge cost and one of them is expatriate cost)

The selection, training, period of stay abroad, compensation and repatriation(Autonomy) of expatriates are delicate issues that have to be managed by the HR department

Which is better??

Coca Cola Global Service Program

-Hiring the local candidate because they think that the local people can understand the local customers and employees better. - HCNs are developed by various MDPs -they empower their local managers with global experience by sending 500 high-level managers under global service program. -This way they add value to the local business from their learning experience from the other parts of the world

Thank You..!!