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

2. INTERNATIONAL
HUMAN RESOURCE
MANAGEMENT

3. Definition
3
• 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
• Procure
HR
Activities
• Utilise
• Allocate
• Home country
nationals
Types of • Host country
employees nationals
• Third country
nationals
• Home country
Countries • Host country
• Third country

5. Characteristics of IHRM
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

6. More Human Resource
6
Activities
Human • Difficulty in implementing HR in host
countries
Resource • Developmental opportunities for
Planning international managers.
• Ability to mix with organisation’s culture
Employee • Ethnocentric, polycentric or geocentric
staffing approach
Hiring • Selection of expatriates
• Managing repatriation process
• Emphasis on cultural training
Training & • Language training
Development • Training in manners &
mannerisms

7. • Devising an appropriate strategy to
compensate expatriates
• Minimising difference in pay between
7 Compensation parent, host & third country nationals
• Issues relating to the re-entry of expatriates
into the home country
• Constraints while operating in host
countries need to be considered.
Performance
Management • Physical distance, time differences &
cost of reporting system add to the
complexity.
• Handling industrial relations problems in
a subsidiary.
Industrial
Relations • Attitude of parent company towards
unions in a subsidiary

8. Need for Broader Perspective
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

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

10. 10
• Physical safety of the employees.
Risk
• Failure of expatriates to perform well
Exposure  financial losses to the firm
• Dealing with ministers, political
figures, economic & social interest
External groups
• Hiring procedures dictated by host
Influence country.
• Catch up with local ways of doing
business.

11. Reasons for Growing Interest in
11
IHRM
Effective HRM 
Globalisation of determinant of
Business success in
international business
Movement to network
Significant role in
organisations from
implementation &
traditional hierarchical
control of strategies
structures

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

13. Recruitment & Selection
13
Ethnocentric Approach Polycentric Approach Regiocentric Approach Geocentric Approach
• Key • Host-country • Variation of
management nationals hired staffing policy to • Seeks best
positions held to manage suit particular
geographic areas people for
by parent- subsidiaries key
country jobs, irrespe
nationals • Provides a
• Parent-country 'stepping stone' ctive of
nationals for a firm wishing nationality
• Appropriate occupy key to move from an
during early positions at ethnocentric or
phases. corporate HQ. polycentric • Underlying
approach to a principle of a
geocentric
approach global
corporation
3 categories of employees can be hired – parent country nationals
(PCNs), host country nationals (HCNs) & third country nationals (TCNs)

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

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

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

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

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
Language
Cultural
Training
Training
Management
Practical
Development
Training
& Strategy

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

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

22. 22