IHRM can be defined as set of activities aimed managing organizational human

resources at international level to achieve organizational objectives and achieve

competitive advantage over competitors at national and international level. IHRM
includes typical HRM functions such as recruitment, selection, training and
development, performance appraisal and dismissal done at international level and
additional activities such as global skills management, expatriate management and
so on.
In simple terms, IHRM is concerned about managing human resources
at Multinational Companies (MNC) and it involves managing 03 types of
employees namely,
1. Home country employees- Employees belonging to home country of the firm
where the corporate head quarter is situated.
2. Host country employees- Employees belonging to the nation in which the
subsidiary is situated.
3. Third country employees- These are the employees who are not from home
country/host country but are employed at subsidiary or corporate head quarters.
As an example a American MNC which has a subsidiary at India may employ a
French person as the CEO to the subsidiary. The Frenchman employed is a third
country employee.
Differences between domestic HRM and International HRM (IHRM)
are summarized below:
Domestic HRM is done at national level and IHRM is done at international
level.
Domestic HRM is concerned with managing employees belonging to one nation
and IHRM is concerned with managing employees belonging to many nations
(Home country, host country and third country employees)
Domestic HRM is concerned with managing limited number of HRM activities
at national level and IHRM has concerned with managing additional activities
such as expatriate management.
Domestic HRM is less complicated due to less influence from the
external environment. IHRM is very complicated as it is affected heavily by
external factors such as cultural distance and institutional factors.
Culture shock is the personal disorientation a person may feel when experiencing an
unfamiliar way of life due to immigration or a visit to a new country, a move between social
environments, or simply travel to another type of life.
[1]
One of the most common causes of
culture shock involves individuals in a foreign environment. Culture shock can be described
as consisting of at least one of four distinct phases: Honeymoon, Negotiation, Adjustment,
and Mastery.
The most common problems include: information overload, language barrier, generation
gap, technology gap, skill interdependence, formulation
dependency, homesickness(cultural), infinite regress (homesickness), boredom (job
dependency), response ability (cultural skill set).
[2]
There is no true way to entirely prevent
culture shock, as individuals in any society are personally affected by cultural contrasts
differently.
[3]




Definition of 'Culture Shock'

A feeling of uncertainty, confusion or anxiety that people experience when
visiting, doing business in or living in a society that is different from their own.
Culture shock can arise from a person's unfamiliarity with local customs,
language and acceptable behavior, since norms can vary significantly across
cultures.


INTERNATIONAL COMPENSATION-BALANCE-SHEET
APPROACH

Organizations with employees in many different countries face some special compensation
pressures. Variations in laws, living costs, tax policies, and other
factors all must be considered in establishing the compensation for expatriate
managers and professionals. Even fluctuations in the value of the U.S. dollar must be tracked
and adjustments made as the dollar rises or falls in relation to currency rates in other
countries. Add to all of these concerns the need to compensate employees for the costs of
housing, schooling of children, and yearly transportationhome for themselves and their family
members. When all these different issues are considered, it is evident that international
compensation is extremely complex.
Balance-Sheet Approach
Many multinational firms have compensation programs that use the balancesheet approach.
The balance-sheet approach provides international employees with a compensation package
that equalizes cost differences between the international assignment and the same
assignment in the home country of the individual or the corporation. The balance-sheet
approach is based on some key assumptions, which are discussed next.
HOME-COUNTRY REFERENCE POINT
The compensation package is developed to keep global employees at a level appropriate to
their jobs in relation to similar jobs in the home country. Special benefits or allowances are
provided to allow the global employees to maintain a standard of living at least equivalent to
what they would have in the home country.


Inpatriation is the process of moving employees who are host-country nationals to corporate head
office in the parent country for a fixed period of work, often as part of a programme of management
development. Inpatriation can have two broad functions within multinational corporations. It can allow
the enterprise to draw knowledge and innovation from its subsidiaries in other countries, and it can
help bind managers from different cultures and backgrounds into a global work culture or perspective.
[.]

Repatriation is the process of returning a person to their place of origin or citizenship. This includes
the process of returning refugees or military personnel to their place of origin following a war. The
term may also refer to the process of converting a foreign currency into the currency of one's own
country. The forced return of a person to a country where he faces persecution is more specifically
known as refoulement.