IHRM ASSIGNMENT

Q1. What are the similarities and differences between domestic &

international HRM….?

Ans: IHRM is all about acquiring, allocating & effectively utilizing human

resources in multinational organizations.

DIFFERENCE BETWEEN DOMESTIC & INTERNATIONAL HRM

DOMESTIC HRM INTERNATIONAL HRM

Staffs are placed within the national boundaries. Staffs work outside their national boundaries.

Less number of Rule and Regulations to be

managed.- mostly employment and taxation rules

of the home country.

Very high number of rules and regulations which

are related to taxation, employment rules,

language translating services, work permit etc.

There is uniform policy in administration Broader Perspective- Management has to be done

according HCNS, PCNS and TCNS.

No special attention into the personal life.

Confined to crèche and cultural interactions.

Special attention to personal life of expatriate

employees- cultural training, schooling of

children, employment opportunity for spouse.

Challenges are confined to the situation of a

particular country.

IHRM management has to be ready to face

challenges like underperformance of expatriate

employees, diplomatic relationships between host

country and parent country, currency exchange

rates which are variable and may impact the

benefits of TCNS and PCNS.

Special Training is not required for Socio

Cultural adaptation.

Special Training for expatriates so that they

might not face unnecessary hassles in the alien

socio cultural environment.

SIMILARITIES BETWEEN DOMESTIC & INTERNATIONAL HRM

The basic functions of domestic HRM 7 IHRM are common but the way of

operating it is a bit different. Those functions include:

HUMAN RESOURCE PLANNING

STAFFING

(RECRUITMENT, SELECTION & PLACEMENT)

PERFORMANCE MANAGEMENT

TRAINING & DEVELOPMENT

COMPENSATION & BENEFITS

Q2. Which topics are covered by Re-patriation process?

Ans. Expatriation process also includes repatriation: the activity of bringing the

expatriate back to the home country.

“Expatriation includes repatriation”

The Repatriation Process

RECRUITMENT & SELECTION

PRE-DEPARTURE TRAINING

ON ASSIGNMENT

RE-ENTRY OR RE-

ASSIGNMENT

REPATRIATION

PROCESS

PREPARATION

PHYSICAL

RELOCATION

TRANSITION

READJUSTMENT

1) PREPARATION involves developing plans for the future and gathering

information about the new position. The firm may provide a checklist of items

to be considered before home or a thorough preparation of employee and

family for the transfer to home. There may be some inclusion of repatriation

issues in pre-departure training provided to the expatriate.

2) PHYSICAL RELOCATION refers to removing personal effects, breaking

ties with colleagues and friends and travelling to the next posting, usually the

home country. Most multinationals use removal firms or relocation consultants

to handle the relocation, for both the movement out and the return home of the

employee and family, and this may be formalized in their HR policies.

3) TRANSITION means settling into temporary accommodation where

necessary, making arrangements for housing and schooling and carrying out

other administrative tasks. Some companies hire relocation consultants to

assist in this phase also.

4) READJUSTMENT involves coping with such aspects as company changes,

reverse culture shock and career demands. It is the one that seems to be the

least understood and most poorly handled.

Q3. Explain multinational performance management?

Ans. The most challenging aspects for a firm operating internationally is how to

manage the performance of its various overseas facilities. Performance

management is a process that enables the multinational to evaluate and

continuously improve individual, subsidiary unit and corporate performance,

against clearly defined, set goals and targets.

COMPONENTS OF PERFORMANCE APPRAISAL

MULTINATIONAL PERFORMANCE MANAGEMENT

The multinational has specific expectation for each of its foreign

subsidiaries, in terms of market performance and contribution to total profit

and competitiveness. When evaluating multinational performance following

should be considered…………..

1. Whole Versus Part

A multinational is a single entity that faces a global environment, which means

that it simultaneously confronts differing national environments. Integration

and control imperatives often place the multinational in the position where it

decide that the good of the whole is more important than one subsidiary’s short

term profitability.

2. Non-Comparable Data

Frequently, the data obtained from subsidiaries may be neither interpretable

nor reliable. Physical measures of performance may be easier to interpret.

3. Volatility Of the Global Environment

The turbulence of the global environment requires that long term goals be

flexible in order to respond to potential market contingencies. An inflexible

approach may mean that subsidiaries could be pursuing strategies that no

longer fit the new environment.

4. Separation By Time & Distance

Judgments concerning the congruence between the multinational and local

subsidiary activities are further complicated by the physical distances involved,

time zone differences, the frequency of contact between the corporate head

office staff and subsidiary management and the cost of the reporting system. It

is often necessary to meet managers personally to understand the problem

fully.

5. Variable Levels Of Maturity

Without the supporting infrastructure of the parent, market development in the

foreign subsidiaries is generally slower and more difficult to achieve than at

home, where established brands can support new products and new business

areas can be cross-subsidized by other divisions.

6. Control & Performance Management

Performance management is the part of multinational’s control system.

Through formal control mechanism and communication the feedback and

appraisal aspect, performance management also contributes to shaping

corporate culture both formally and informally.

CONCLUSION

Thus by adopting a performance management approach, multinationals are

drawing on a number of human resource management functions to realize

performance goals set during the performance appraisal process.

3 APPROACHES TO STAFFING

ETHNOCENTRIC

Fills management positions by Home Country nationals

POLYCENTRIC

Uses Host Country Nationals to manage local subsidiaries

GEOCENTRIC

Seeks best people for key jobs

throughout the organization,

regardless of their nationality

REGEOCENTRIC

Reflects the geographic strategy & structure of MNE

Q4. How various staffing approaches help to sustain business operation?

Ans. The IHRM literature uses four terms to describe MNE approaches to managing

and staffing there subsidiaries. These terms are taken from seminal work of

Perlmutter, who claimed that it was possible to identify among international

executives 4 primary attitudes – Ethnocentric, Polycentric, Geocentric &

Regeocentric.

ETHNOCENTRIC

The ethnocentric staffing policy reflects the belief that principles & practices

used by home-office country are superior to those used by companies in other

nations. Thus, given its success in the home-country market, there is a little

need to adapt principles & practices when transferred to foreign markets.

POLYCENTRIC

The polycentric outlook holds that staffing policies ought to adapt differences

between operations in home country & host country. It sees the effectiveness of

the business practices of foreign markets as equivalent to those in home

country. This approach motivates the company to staff each operation from

headquarters in home-country to each foreign subsidiary with people from local

environment. Thus, this approach is a key feature of multi-domestic strategy.

GEOCENTRIC

Unlike the ethnocentric & polycentric approaches, geocentric staffing policy is

not tied to a particular home or host nation. Instead, it scans the whole world

looking for best people around to place them on key jobs in the organization.

This approach enables the MNE to build the requisite cadre of international

executives who can move between countries & cultures without forfeiting their

effectiveness.

REGEOCENTRIC

This approach reflects the geographic strategy & structure of the multinationals.

Like geocentric approach, it utilizes wider pool of managers but in a limited

way. Staff may move outside their countries but only within the particular

geographic region. They are not promoted to headquarters position.

Q.5. what should be the main objective for multinational firm with regard to

Compensation policy?

Ans. “Management of Compensation is all about development, implementation,

maintenance, communication & evaluation of reward processes.”

1. The topic focuses on incentive mechanisms & compensation systems & their

function in influencing the behavior of employees of multinational firms.

2. The policies so formulated should be consistent with the overall strategy.

Structure & business need of the multinationals.

3. The policy must work to attract & retain the staff in the areas where the

multinational has the greatest needs & opportunities.

4. The policy should facilitate the transfer of international employees in the cost-

effective manner for the firm.

5. The policy must give due consideration to equity & ease of administration.

6. The overall objectives of the expatriate must also be achieved with reference to

the compensation policy of the firm.

Q.6. What work practices can be standardized?

Ans. Standardization is an adoption choice that confronts the multinational in other

areas of its operations which applies to the management of global workforce.

Factors influencing the standardization

1. Host Country Culture & Workplace Environment:-

Culture acts as a moderating variable in international HRM. It includes group

of people sharing common goals, values, attitudes & beliefs. Work behavior is

culturally determined to the extent it is contained in the role definition &

Host-country Culture & Workplace

Environment

Mode Of Operation

Size & Maturity Of

The Firm

Relative Importance Of

Subsidiary

Global/Local Work Practices

& Hrm

expectation. Standardization of the work practices involves behavior

modification through corporate training programs, staff rotation, rewards &

promotions. Thus culture has a strong bearing on the behavior of the

employees.

2. Mode of Operation:-

A multinational’s ability to impose standardized work practices is not only

affected by cultural differences that may create resistence to change from

subsidiary staff. One managerial choice is the form of operation that the

multinational uses. Entering via an acquisition may provide the multinational

with market advantages, but its ability to transfer technical knowledge, systems

& HR practices may be restricted.

3. Firm size, maturity and international experience:-

Key factors influencing international operations are the size & maturity of the

multinational. A smaller multinational, a relative newcomer to international

business, may not have the same level of ability or resources, and an

alternative mode of operation such as a joint venture would be an attractive

proposition.

4. Subsidiary mandate:-

Linked to the issue of size & maturity of the multinational is the position of the

subsidiary in relation to the rest of the organization and its mandated role – what

is expected of it in terms of contribution to global activity. Recently, their has

been considerable interest in looking at the role of the subsidiary. Centers of

excellence at the subsidiary level can be viewed as an indication of how some

multinationals are recognizing that level of expertise differ from headquarters.

5. Global or local work practices & HR:-

The analysis of HR & workplace standardization v/s. adaptation reflects the

convergence – divergence debate. Forces for standardization are mainly internal to

the multinational driven by the need for control and to sustain competitive

advantage. Host governments though may encourage standardization through the

transfer of foreign work practices & processes. Forces for adaptation comes from

external constrains that the multinational confronts in its various markets.

The End