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International human resource management (IHRM) is the process of procuring, allocating, and effectively utilising human resources in a multinational

corporation.

Three dimensions of IHRM

UTILIZATION

Host Country National

PROCUREMENT

Parent Country Host Country National

IHRM

Host Country

Third Country

Parent Country National

ALLOCATION
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Parent-country national employee who was born and works in the country in which an organizations headquarters is located. Host-country national employee who is a citizen of the country (other than parent country) in which an organization operates a facility. Third-country national employee who is a citizen of a country that is neither the parent country nor the host country of the employer.

When organizations operate overseas, they hire a combination of parent-country nationals, host-country nationals, or thirdcountry nationals.

Expatriates employees assigned to work in another country.

International organization an organization that sets up one or a few facilities in one or a few foreign countries. Multinational company an organization that builds facilities in a number of different countries in an effort to minimize production and distribution costs. Global organization an organization that chooses to locate a facility based on the ability to effectively, efficiently, and flexibly produce a product or service using cultural differences as an advantage.

Levels of Global Participation

Three Approaches to staffing decision: Ethnocentric: All key positions are filled by parentcountry nationals.

Polycentric: HCNs are recruited to manage subsidiaries in their own country and PCNs occupy positions at corporate headquarters. Geocentric: utilizing the best people for the key jobs throughout the organization, regardless of nationality.

Staffing practices Training practices Performance Appraisal Compensation and benefits

Staffing Practices
Resumes seek strong educational background E-recruitment: Naukri.com was the first eportal established in 1998 Elaborate employment tests related to the job, especially at entry level. Newspaper advertisements are used to brand the company to potential applicants. Personal questions are asked in interviews

Training Practices
Education is extremely valued, and training is an extension of it. Entry point training programs (3 to12 months of orientation). Ongoing training programs. Development programs (promotions involve training). In-house training centers are a common feature in Indian organizations. Deductive learning style in training: Known as topdown approach where learning principles start with general concepts and move toward specific application.

Performance Appraisal
Cultural dimensions of collectivism and power distance make objective appraisals a challenge.
Supervisors and subordinates develop close relationships. Organizational loyalty is as important as work performance. Employee promotions are frequently based on seniority.

Annual performance appraisals. Supervisors provide performance ratings that are frequently inflated due to personal relationships. Employment at will does not exist in India. Employment termination carries a social stigma.

Compensation and Benefits


In addition to a base salary, compensation includes: House rent allowance (HRA*). Medical allowance. Dearness allowance (DA*). Leave travel allowance (LTA*). Commuter allowance. * These allowances are frequently referred by their acronyms Several categories of leave (vacation) exist: Sick leave: 7 days (medical certificate required). Casual leave: 7 days (for personal and family emergencies, requires prior permission of boss). Employees can take maximum 2 days at a time Annual leave: 3 weeks (after one year of employment). Federal holidays: About 20 days.

Retirement age:

55-60 years (private sector);.


60 years (public sector). Retirement Benefits: Employees receive two lump-sum payments when they retire: Provident Fund (similar to 401(k)) Typical contributions: 10-12 percent of base salary (employer and employee). Payable on retirement, voluntary separation, death.

Gratuity Only employer contributes (15 days salary per year of service). Tax-exempt for employees. Payable on retirement, voluntary separation, death.

Major MajorHR HRpractices practicesin inChina China


Recruitment techniques Selection techniques Training Work culture Expatriate management

Recruitment
Companies in china recruit candidates mainly on basis of: Skills

Employment history
Total work experience Language abilities Career goals

Recruitment techniques
Advertisement s

Advertisements are not permitted in the news media without the prior approval of the local labour and social security department. Advertisements are usually placed in local papers or specialised industry publications.

Job fairs

The common recruitment avenues are the labour market, personnel exchange seminars The job fairs are sponsored by the Labour Bureau.
To recruit potential applicants, many companies regularly go to college or university campuses to interview students They can negotiate the job terms directly with the students The development of technology parks and technology development zones in China, there has been a concomitant growth in the use of Western HR strategies among multinational companies. International Communications and PR companies are developing offices throughout China to assist local and overseas businesses work together effectively to meet the demands of Eastern and Western markets.

Campus Placements

Global Image

Corporate Co-ordination

Selection Techniques
The interview is a common selection tool for many companies and is the dominant method used. Punctuality is very important in China and in greeting the applicant the Interview employer will not look at them directly because lowering of eyes shows respect. Technology tests, technical tests, problem solving tests and English proficiency tests. Traditional companies rarely use psychological or aptitude testing, psychometric testing of abilities and attitudes, interests and motivations, needs and aspirations and/or personal management style has been adopted from Western HR practices, especially in the Healthcare industry.

Tests

Behavioural Event

Interactive role play, simulation exercises and leaderless group discussion (LGD).

TRAINING
Some of the major training methods are: Technical training(both expatriates & Local employees) Language training( expatriates) Pre departure training(expatriates) Training on work culture( expatriates)

WORK CULTURE
Respect for age & hierarchy Face & harmony

Features of Chinese work culture

Group orientation

Personal relations or guianxi

EXPATRIATE MANAGEMENT
the % of expatriate from western, expatriate from Hong Kong and expatriate from Taiwan is decreasing, but % of expatriate from Asia Pacific and locally hired foreigner is increasing.
Locally Hired Foreigner

Locally Hired Returnee Medical Benefit Insurance Housing Benefit Car Benefit Retirement Benefit

Medical Benefit Insurance Housing Benefit Car Benefit 5. Home Visit Assistance

Expat allowance

Expat from Western Countries Housing Benefit Insurance Medical Benefit Home Visit Assistance Car Benefit

Expat from Asia Pacific Medical Benefit Insurance Housing Benefit Home Visit Assistance Children Education Benefit

Expat from Hong Kong Medical Benefit Home Visit Assistance Moving/Relocation Assistance Insurance Housing Benefit

Expat from Taiwan Home Visit Assistance Moving/Relocation Assistance Medical Benefit Insurance Housing Benefit

A Comparison between

HR practices of different countries

Country USA Korea Sri Lanka Denmark Germany Greece Japan

Average Hours Worked Per Week 38 47 43 32 33 36 36


SOURCE : WWW.HRMWORLD.COM

Vacationing Around the World


Italy

France
Germany Brazil Britain Canada South Korea Japan U.S.
0 5 10 15 20 Days 25 30 35 40 45

Average annual vacation days

SOURCE : WWW.HRMWORLD.COM

CROSS-CULTURAL AND DIVERSITY MANAGEMENT

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Acknowledging Culture
Cultural diversity can exist on a national and crossnational level Often, managers assume that culture does not play an important role in shaping practices => Universalistic approach: if it works here, it will work there Such approach contributed to high failure rates in expatriate missions and international mergers In order to manage cross-cultural differences, managers need to acknowledge and understand them
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Diversity-Related Problems
Increased ambiguity Increased complexity and confusion Difficulty to converge meanings and Miscommunication Lower cohesiveness Harder to reach agreement Harder to make decisions and agree on specific actions
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Diversity-Related Advantages
Expanding meanings and Broader cognitive frame & resources Multiple perspectives Multiple interpretations Richer alternatives & more ideas Increased creativity and problem solving skills Increased flexibility
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Diversity and Types of Organizations


Organizational culture affects the acceptance and impact of diversity in organizations Parochial: Our is the only way Ethnocentric: Our way is best Pluralistic (synergetic): The best is combining our ways and their ways In large companies, different divisions may have different sub-cultures The more complex, unpredictable and global is the business environment of a company, the more competitive advantages cultural diversity has.
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Organizational Cultures
Equity

Fulfillment-oriented Project-oriented culture culture INCUBATOR GUIDED MISSILE


Person Emphasis Task Emphasis

FAMILY Power-oriented culture

EIFFEL TOWER Rule-oriented culture

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Hierarchy

NATIONS TRADITIONALLY SHAPE ORGANIZATIONS


HOW DOES CULTURE AFFECT FIRMS?
Traditionally: national culture shapes business
BUSINESS ACTIVITIES

INDIVIDUALS FAMILIES NATIONAL CULTURE

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Business culture

BUT INFLUENCES COME FROM MULTIPLE SOURCES


Professional training/groups Family Subgroups, e.g., R&D or accounting

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INCREASINGLY WE ALSO SEE


business influences come not only from domestic influences but also from international and global business activities, e.g.,
subsidiaries joint ventures and other strategic alliances

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OFTEN CREATING CULTURE CLASH


between parent and subsidiary among managers

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BUSINESS INFLUENCES CULTURE THROUGH


Global entertainment and electronic media Global travel Global language Global demographic groups Global elite Global teens Business behaviors

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GLOBAL INFLUENCES OF BUSINESS ON CULTURE


Make global businesses more central to
Cultural change Cultural concerns And cause them to interact more with social actors such as NGOs and governments

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Diversity Defined
Human diversity
Visible Less or invisible

Diverse structural configurations Diverse processes

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Global Organizations Emphasize Inclusive Networks When They


a) re-examine their norms or traditional ways of doing things b) seek and value similarities as well as differences as sources of competitive advantage, and c) train people for skills that enhance a sense of inclusion
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Approaches to Managing Human Diversity


Discrimination and fairness Access and legitimacy Learning

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Diverse Structures
Hierarchical
Export office to functional to divisional to hybrids

Internal horizontal
Networks, shamrocks, matrix, virtual

Interorganizational
Joint ventures Strategic alliances

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Diverse Processes
ITintegration depends on infrastructures that vary HRselection, development, and compensation in different nations and regions Labor practices and conditions Social responsibility and ethics initiatives

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Cross-Cultural Training Methods


Cultural Briefings

Explain the major aspects of the host country culture, including customs, traditions, every day behaviors.
Explain the history, geography, economy, politics, and other general information about the host country and region. Portray a real-life situation in business or personal life to illustrate some aspect of living or working in the host culture.

Area Briefings Cases

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Cross-Cultural Training Methods (cont.)


Role Playing
Culture Assimilator

Allows the trainee to act out a situation that he or she might face in living or working in the host country. Provides a written set of situations that the trainee might encounter in living or working in the host country. Trainee selects one from a set of responses to the situation and is given feedback as to whether it is appropriate and why. Provide an opportunity for the trainee to go to the host country or another unfamiliar culture to experience living and working for a short time.
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Field Experiences