GLOBAL HUMAN RESOURCE MANAGEMENT

Human Resource Management (HRM) is process of recruiting, managing, and providing

direction to the personnel who work in an organization Human Resource Management is an
important organizational activity that focuses on issues regarding personnel such as hiring,
compensation, organization development, performance management, wellness, safety,
benefits, employee motivation, training, administration, and communication. Human
Resource Management is called a comprehensive and strategic approach to managing
workforce and environment of the workplace. Efficient HRM enables workforce to perform
effectively and efficiently to increase the production and achieve the organizational goal.
One of the important parts of HRM is International HRM. IHRM is the methods of selecting,
allocating, and utilizing human resources effectively in an international context. IHRM refers
a set of activities that enables organizations to manage workforces at international level to
ensure goal achievement organizational objectives and IHRM includes performing HRM
activities such as such as hiring, compensation, organization development, performance
management, wellness, safety, benefits, employee motivation, training, administration, and
communication at an international context.
The process of IHRM would be very simple if the multinational corporations simply trade its
products, operating only a few offices in foreign countries. Bit in present world,
organizations spread their activities and operations in a large number of countries. Thus
IHRM is an important point for organizations. IHRM is very complex for many organizations.
They have to build integration among HR practices and policies of its subsidiary firms in
different territory in order to achieve overall organizational objectives. On the other hand,
these organizations also ensure a significant level of flexibility in their IHRM strategy
because employees from different countries are backed by different cultures and social
values. Flexibility has a significant influence on the performance of the employees.
Because of the forces of globalization and the demand of the organizations to develop and
implement a strong global strategy, International Human Resource Management (IHRM) is
becoming a prerequisite to success of the organizational. IHRM managers often face
difficulties to decide whether an organization should develop its human resource policies
and practices based on the local context. In developing an effective HRM system it is
important to focus on alignment with performance management system in the organization.
For example, criteria used for performance management is to be the same as those used
for staffing, recruitment and training. This conveys a strong message about what is
expected by the organization from the employees.

The activities of HRM

Human resource management is a contested field of study, with much controversy and
many competing models. Reassuringly, however, there is less controversy about the
content of human resource management. The activities include:

human resource planning

job analysis
recruitment and selection
performance management and appraisal
career development
pay management
employee relations
Training and development.

1. Human resource planning: Human resource planning refers to the group of

techniques that enable the manager to plan the staffing of an organization.
Organizations, especially large ones, need to forecast their staffing needs. Formerly
known as manpower planning, human resource planning encompasses quantitative
(such as calculating staff turnover) in addition to qualitative approaches (such as
assessing staff motivation). Human resource planning is aligned with the strategic
objectives of the organization for it to be successful.
2. Job analysis: Human resource planning is carried out at the level of the
organization as a whole. Job analysis is a complementary activity, which is carried
out at the level of the individual job or family of jobs. Job analysis refers to the group
of techniques that are used to determine the content of jobs, and the knowledge,
skills and abilities which jobholders require when carrying them out.
3. Recruitment and selection: Once job analysis has been undertaken, the
organization can proceed to recruit staff to fill the jobs it has identified. At the
recruitment stage the organization attracts candidates to apply for its jobs; at the
selection stage it chooses the best person for the job or jobs from among the
candidates it has attracted. Recruitment and selection, therefore, refers to the group
of techniques used to recruit and select staff to carry out the jobs identified within the
organization.
4. Performance management and appraisal: Once the best person has been
identified and has started work, organizations often wished to monitor their
performance and help them to develop. In the first instance, monitoring and
development occurs through the normal processes of day-to-day work, where staff

develops themselves with the help of their managers. However, some organizations
have recently started to take a systematic approach to the management of individual
performance, seeing it in the context of the overall strategy of the organization: this is
what has come to be called performance management. Many organizations have
also found it desirable to institute a formal annual review of performance, conducted
jointly by the employee and his or her manager: this is what is called performance
appraisal.
5. Career development: Career development refers to the development of the
individuals career in the organization. In a large organization, the majority of staff
are typically recruited at the beginning of their career and stay on until retirement. In
the course of their career they are likely to carry out a number of different jobs,
especially if they are in a professional, administrative or managerial position
6. Pay management: Deciding how much and in what way staff should be paid is a
major part of human resource management. Pay decisions are based not only on
employees performance, but include data from more general performance
management and appraisal procedures, such as an analysis of the movement of
payment rates in the external market.
7. Employee relations: To ensure productive employee relations, HRM practitioners
must deal with the management of the relationship between the organization and the
staff as a whole. In many countries and organizations a trade union or unions
represent staff. However, we shall argue that employment relations are a concern of
the HR manager even if his or her organization is not unionised: she or he must still
decide, among other things, how the organization is going to communicate with its
staff, and the extent to which staff should participate in the management of the
organization.
8. Training and development: Although staff develops their skills through day-to-day
work, as we have just noted, organizations often provide additional formal learning
opportunities. These may be off-the-job training courses, or they may include work
based development programmes. We can also include post-graduate qualifications
such as the one you are studying for now. Staff development a recognition that staff
may need to develop new skills or acquire new knowledge, both for their own
development and to meet the organizations needs.

International Human Resource Management

International Human Resource Management (IHRM) involves ascertaining the corporate
strategy of the company and assessing the corresponding human resource needs;
determining the recruitment, staffing and organizational strategy; recruiting, inducting,
training and developing and motivating the personnel; putting in place the performance
appraisal and compensation plans and industrial relations strategy and the effective
management of all these functions from an international perspective.
The strategic role of HRM is complex enough in a purely domestic firm, but it is more
complex in an international business, where staffing, management development,
performance evaluation, and compensation activities are complicated by profound
differences between countries in labor markets, culture, legal systems, economic
systems, and the like.

It is not enough that the people recruited fit the skill requirement, but it is equally important
that they fit in to the organizational culture and the demand of the diverse environments in
which the organization functions.
Todays economy has globalized in which geographical boundaries of a country have only
political relevance; the economic relevance has extended these. Today, the world is known
as global village, a term that reflects the state of business in the world. The rise
of multinational and transnational corporations has placed new requirements on HR
managers. For instance, HR managers must ensure that the appropriate mix of
employees in terms of knowledge, skills, and cultural adaptability is available to handle
global assignments. A few decades ago, the concept of globalization was mainly discussed
in theory. There was no pressing economic need to understand and appreciate the human
implications of globalization. However, rapid globalization has compelled management
researchers to explore the HRM implications of globalization. The result is the emergence of
International Human Resource Management (IHRM) which deals with how a global
company can manage its human resources spread throughout the world.

Understanding of international perspective of HRM is required because of cultural

diversity, workforce diversity, language diversity, and economic diversity.

Cultural Diversity
Culture is one of the most important factors affecting HRM practices. However, when we
consider international perspective of HRM, we find cultural diversity across the globe, that
is, culture of two countries is not alike. Cultural diversity exists on following dimensions:

Individualism and Collectivism. Individualism is the extent to which people place value
on themselves; they define themselves by referring themselves as singular persons
rather than as part of a group or organization. For them individual tasks are more
important than relationships. Collectivism is the extent to which people emphasis the
good of the group or society: They tend to base their identity on the group or
organization to which they belong. At work, this means that relationships are more
important than individuals or tasks; employer-employee links are more like family
relationships.

Power Orientation. Power orientation, also known as orientation to authority, is the

extent to which less powerful people accept the unequal distribution of power; people
prefer to be in a situation where the authority is clearly understood and lines of authority
are never bypassed. On the other hand, in culture with less orientation to power,
authority is not as highly respected and employees are quite comfortable circumventing
lines

of

authority

to

accomplish

jobs.

Uncertainty Avoidance. Uncertainty avoidance also known as preference for stability,

is the extent to which people feel threatened by unknown situations and prefer to be in
clear and unambiguous situations. In many countries, people prefer unambiguity while in
many

other

countries,

people

can

tolerate

ambiguity.

Masculinity. Masculinity, also known as assertiveness or materialism, is the extent to

which the dominant values in a society emphasize aggressiveness and the acquisition of

money and material goods, rather than concern for people and overall quality of life.

Time Orientation. Time orientation dimension divides people into two categories: longterm orientation and short-term orientation. People having longterm orientation focus on
future, prefer to work on projects having a distant payoff, and are persistent and thrift.
People having short-term orientation are more oriented towards past and present and
have respect for traditions and social obligations.

The basic implication of cultural diversity for HRM is that same set of HRM practices is not
suitable for all cultures; consideration has to be given to cultural diversity.

Workforce Diversity
Workforce is the building block of any organization but there is workforce diversity in global
companies. Based on their place of origin, employees of a typical global company can be
divided into the following groups:
1. Parent-country national permanent resident of the country where the company is
headquartered.
2. Host-country national permanent resident of the country where the operations of
the company are located.
3. Third-country national permanent resident of a country other than the parent
country and the host country.
Further, workforce diversity can be seen in the context of employee mobility from one
country to another country for performing jobs. On this basis, an employee can be put in
one of the following categories:
1. Expatriate a parent country national sent on a long-term assignment to the hostcountry operations.
2. Inpatriate a host-country national or third-country national assigned to the home
country of the company where it is headquartered.
3. Repatriate an expatriate coming back to the home country at the end of a foreign
assignment.
Workforce diversity implies that various categories of employees not only bring their-skills
and expertise but also their attitudes, motivation to work or not to work, feelings, and other

personal characteristics. Managing such employees with pre-determined HRM practices

may not be effective but contingency approach has to be adopted so that HRM practices
become tailor-made.

Language Diversity
Language is a medium of expression but employees coming from different countries have
different languages. Though English is a very common language, it does not serve the
purpose adequately as it does not cover the entire world. While employees coming from
different countries may be encouraged to learn the language of the host country for better
dissemination of the information, it does not become feasible in many cases. An alternative
to this is to send multilingual communications. It implies that anything transmitted to
employees should appear in more than one language to help the message get through.
While there are no hard-and-fast rules in sending such messages, it appears safe to say
that such a message should be transmitted in the languages the employees understand to
ensure adequate coverage.

Economic Diversity
Economic diversity is expressed in terms of per capita income of different countries where a
global company operates. Economic diversity is directly related to international
compensation management, that is, paying wages/salaries and other financial
compensation to employees located in different countries. One of the basic principles of
paying to employees is that there should be equity in paying to employees. However,
putting this principle in practice is difficult for a global company because its operations are
located in different countries having different economic status. In such a situation, some
kind of parity should be established based on the cost of living of host countries.