INTERNATIONAL HUMAN RESOURCE MANAGEMENT (IHRM)

International Human Resource Management (IHRM)

International Human Resource Management (IHRM)

Introduction

Human Resource Management is more complex in international businesses, where management development, staffing, compensation activities, and performance evaluation are complicated by differences between legal systems, cultures, and economic systems within various labor markets, such as:

Labor laws can prohibit union organization in one nation and mandate it in another.

Compensation types vary from nation to nation.

International human resource management (IHRM) deals with a host of issues. It deals with developing managers to do business in different nations, and how to compensate people in different countries. Additionally, IHRM deals with a host of problems related to expatriate managers. An expatriate manager is a citizen of one nation who works abroad. (Anthony, 2005, 647)

Discussion

The discussion of international HRM issues generally tends to be biased in the direction of expatriate management, essentially that of parent-country nationals, partly owing to their strategic importance. In this chapter, we try to redress the balance by examining IHRM issues in subsidiary operations.

Staffing

Staffing policy involves the recruitment of employees for each individual job, and considers the skills required to do particular jobs. Staffing policies are able to support corporate culture surrounding the organization's value systems and norms.

We will show three types of staffing policies in international businesses: the polycentric approach, the ethnocentric approach, and the geocentric approach. (Beaman, 2002, 234)

The Polycentric Policy

Language barriers and national loyalties can isolate corporate headquarter staff from the various foreign subsidiaries.

The Ethnocentric Policy

An ethnocentric staffing policy concerns all key management positions filled by parent country nationals. Companies such as Procter & Gamble, Matsushita, and Philips NV originally followed it. In various Japanese and South Korean enterprises such as Matsushita, Toyota, and Samsung, key positions in international operations are always held by home-country nationals.

Companies apply an ethnocentric staffing policy for various reasons. (Briscoe, 2004, 233)

The Geocentric Policy

A geocentric staffing policy finds the best workforce for key jobs throughout the organization, regardless of nationality which offers various advantages. It can set up the company for the best use of its human resources. Besides, it can build a cadre of international executives in a number of cultures. Applying geocentric policy can create value from the pursuit of experience and from the multi-directional transfer of core competencies as well as location economies. Other issues are that some countries want foreign subsidiaries to employ their citizens. Employers will apply for immigration to establish employment for the host-country national if that person has adequate and necessary skills. (Evans, 2002, 456)

Expatriate Procurement

Perceptual ability. This is the capacity to know why people of other nations behave the way they do; that is critical for managing host-country nationals.

Cultural aspect. Some countries' cultures are more unfamiliar and uncomfortable.

Self-orientation. Expatriates with high self-confidence, self-esteem, and mental wellbeing may be successful in foreign posting, and adapt their interests in sport, food, and music; usually they are also technically competent.

Others-orientation. The expatriate's ability to interact effectively with host-country nationals is a key to ...