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HRM
HRM refers to those activities undertaken by an
organization to effectively utilize its human resources. These activities would include at least the following:
Performance management Training and development Compensation (remuneration) and benefits Industrial relations
International HRM
HRM as a set of activities aimed managing
organisational human resources at international level to achieve organisational objectives and achieve competitive advantage over competitors at national and international levels . - French
international context. In short, International HRM is concerned with maximising the human capital of the organisation to achieve organisational goals. - Dowling
utilization (These three broad activities can be easily expanded into the six HR activities listed above) The three national categories in international HRM activities: (1) the host-country where a subsidiary may be located, (2) the home-country where the firm is headquartered, and (3) "other" countries that may be the source of labor or finance. The three types of employees of an international firm: (1) host-country nationals (HCNs), (2) parent-country nationals (PCNs), and (3) third-country nationals (TCNs).
country other than their country of origin. Such a person is also referred to as an expatriate. Long periods of assignment (perhaps 4 5 years or more) may run the risk of de facto employee status in the host country, so that labor laws or the host country apply.
individuals of other nationalities hired by a government or government sanctioned contractor who represent neither the contracting government nor the host country or area of operations. This is most often those performing on government contracts in the role of a private military contractor. These are the citizens of a country other than the country where the organization is headquartered and the country that is hosting the subsidiary
(HCNs) in its Australian operations, often sends U.S. citizens (PCNs) to Asia-Pacific countries on assignment, and may send some of its Singaporean employees on an assignment to its Japanese operations (as TCNs).
1. Complexity
The
complexity of operating in foreign countries and employing workers from different countries is a key variable that makes domestic and international HRM different -Peter J Dowling The complexity of international HR can be attributed to six factors: More HR activities The need for a broader perspective More involvement in employees personal lives Changes in emphasis as the workforce mix of expatriates and locals varies Risk exposure Broader external influences
More HR Activities
International HRM addresses a broader range of activities than domestic HRM. These include international taxation, coordinating foreign currencies and exchange rates, international relocation, international orientation for the employee posted abroad, Expatriate administrative services Host government relations Language translation services
than one group. Human resource managers working in an international environment face the problem of addressing HR issues of employees belonging to more than one nationality. Hence, these HR managers need to set up different HRM systems for different locations. Human resource managers in a domestic environment administer HR programmes to employees belonging to a single nationality.
Risk Exposure
There is heightened exposure to risks in international assignments.
These risks include the health and safety of the employee and family. A major aspect of risk relevant to IHRM today is possible terrorism. Several MNCs must now consider this factor when deciding on international assignments for their employees. Moreover, human and financial consequences of mistakes in IHRM are much more severe than in domestic business. For example, if an executive posted abroad returns prematurely, it results in high direct costs as well as indirect costs. Expatriate failure Direct costs Indirect costs Militant activities Emergency evacuation
Emic etic aspects of concepts or behaviour Emic culture specific (specificity/divergence) Etic culture common (universality/convergence)
cultural awareness cultural differences differences in work-related values
3. Industry Type
build shared genuine belief that cross-cultural learning will result in more creative and effective ways of managing people
conducted at a national level, whereas international HRM is conducted globally. The impaction from this is that International HRM is often more strategic in nature because it considers how core employees from around the world will work together. Secondly, domestic HRM can be introverted and is only concerned with managing employees at a national level, whereas international HRM requires the management of up to three types of employees; local, national and host.
limited number of activities at a local or national level such as recruitment and selection and training and development. In contrast, international HRM is concerned with more complex matters such as expatriate management and relocation. Fourthly, 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
Domestic Human Resource Management Staffs are placed within the national boundaries. Less number of Rule and Regulations to be managed.- mostly employment and taxation rules of the home country. There is uniform policy in administration
International Human Resource Management Staffs work outside their national boundaries. Very high number of rules and regulations which are related to taxation, employment rules, language translating services, work permit etc. Broader Perspective- Management has to be done according Host Country Nationals (HCNS) , Parent Country Nationals (PCNS) and Third Country Nationals.(TCNS)
No special attention into the personal life. Confined to crche and cultural interactions.
Special attention to personal life of expatriate employeescultural training, schooling of children, employment opportunity for spouse. IHRM management has to be ready to face challenges like underperformance of expatriate employees, diplomatic relationships between host country and parent country, currency exchange rates which are variable and may impact the benefits of TCNS and PCNS. Special Training for expatriates so that they might not face unnecessary hassles in the alien socio cultural environment.
Conclusion
The complexity involved in operating in different
countries and employing different national categories of employees is a key variable that differentiates domestic and international HRM, rather than any major differences between the HRM activities performed. In addition to complexity, there are four other variables that moderate (that is, either diminish or accentuate) differences between domestic and international HRM. These variables are the cultural environment; the industry (or industries) with which the multinational is primarily involved; the extent of reliance of the multinational on its home-country domestic market; and the attitudes of senior management.
References
Human Resources Management; The Key
Concepts - By Chris Rowley, Keith Jackson International business - By Frank McDonald, Fred Burton, Peter Dowling International Human Resource Management: Managing People in a Multinational- By Peter Dowling, Marion Festing, Allen D. Engle Human Resource Management - By Durai