International Human Resource Management Model of IHRM 2

International Human Resource Management

Model of IHRM 2

Domestic HRM and IHRM Compared (Contd. ) • More Human Resource Activities 1. Human Resource Planning 2. Employee Hiring 3. Training and Development 4. Compensation 5. Performance Management 6. Industrial Relations 3

Need for Broader Perspective When compared to domestic HRM, IHRM requires a much broader perspective on even the most common HR activities Any activity of IHRM needs a broader perspective because HR managers working in the global environment face the problem of designing and administering programmes for more than one country 4

Domestic HRM and IHRM Compared (Contd. ) • More Involvement in Employee’s Personal Lives 1. A greater degree of involvement in the employee’s personal lives is necessary for the selection, training and effective management of both parent-country and third-country nationals 2. Involvement of the HR department in the personal lives of the employees is limited in domestic HRM 3. Apart from providing suitable housing and schooling in the assignment location, the HR department may also need to assist children left behind at boarding schools in the home country 5

Domestic HRM and IHRM Compared (Contd. ) • Changes in Emphasis 1. As an international business matures, the emphasis placed on various HR activities change Example: bring high-potential local staff to corporate headquarters for development assignments 2. The need to enhance emphasis in HR activities, as a foreign subsidiary matures, is clearly a factor that broadens the responsibilities of local HR activities 6

Domestic HRM and IHRM Compared (Contd. ) • Risk Exposure 1. Unfair hiring practices may result in a firm being charged with the violation of the Constitutional provisions and be liable for penalties 2. Terrorism poses a great risk to international operations 3. Companies maintain separate establishment to handle global workforce 4. The HR department may also be required to devise emergency evacuation procedures for highly volatile assignment locations 7

External Influence 1. The IHRM activities are influenced by a greater number of external factors than are domestic HRM functions In developed countries, 2. labour is more expensive and better organised than in less developed countries, and 3. governments require compliance with guidelines on issues such as labour relations, 4. taxation, health and safety 8

Expatriate • Denoting or relating to a person living outside their native country. 9

EMPLOYEES IN MULTINATIONAL ORGANIZATIONS • Host country nationals (HCN) • Home/Local country nationals (LCN) • Third country nationals (TCN) • Expatriates

Source: Cynthia D. Fisher, et al, Human Resource Management, p. 781 The Expatriate Problem The Expatriate Assignment Life Cycle 11

Different stages of Expatriate 12

Stages of Expatriate Adjustment 10 Satisfaction Scale 9 8 7 6 5 4 3 2 1 0 Honeymoon Culture shock Gradual Competence Mastery (5 to (2 to 6 weeks) (6 to 8 adjustment (1 (2 to 4 years) 7 years) months) to 2 years)

Stages • Honeymoon – lasting 2 to 6 weeks • Culture Shock – lasting 6 – 8 months • Gradual Adjustment – lasting 1 – 2 years • Basic Competence - 2 to 4 years • Mastery – 5 to 7 years

• 1. Tourist stage: enjoy a great deal of excitement as he discovered the new culture. • 2. Disillusionment stage These difficulties typically include an inability to converse well in the local language, problems in obtaining certain products and food supplies of personal preference, home sickness and so on. In this stage the curve hits bottom and is characterized by what is called culture shock (disruption of established routine in the behavior) • 3. Adjustment or Adopting stage: • If stage two successfully handled then the expatriate enter into the third stage. 15

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The Expatriate Problem (Contd. ) Reasons for Expatriate Failure (in Descending Order of Importance) 17

Reasons for Expatriate Failure • • Cultural adjustments Language differences Foreign Service hardship Length of assignment Schools Living Accommodations Health Care Access

Factors in Expatriate Selection 19