Definition of International Human Resource Management (IHRM)

Definition of International Human Resource Management (IHRM)International Human Resource Management includes the firms work systems and its physical exercise practices. It embraces both individual and collective aspects of quite a little management. It is not restricted to any one style or ideology. It engages the energies of both line and specialist managers (where the latter exists) and typic ally entails a range of messages for a variety of workforce groups. (Boxhall, P. and Purcell, J. 2008).HRM responsibilities includeRecruitment and alternative instruct and developmentHuman resource planningAssessing performance of employees requital and reward systemsInitiatives to align employee developments to corporate strategies.International Human Resource Management (IHRM)Boxall, P. (1992) defined International Human Resource Management (IHRM) as concerned with the man resource problems of multinational firms in foreign subsidiaries (such as expatriate management) or more broadly, w ith the unfolding HRM issues that are associated with the various stages of the internationalisation process. (Boxhall, P. 1992).Mark Mendenhall (2000) sought to be more specific by outlining a number of criteria relevant to a definition of IHRMIHRM is concerned with HRM issues that cross national boundaries or are conducted in locations another(prenominal) than the home country headquarters.IHRM is concerned with the relationships between the HRM activities of organisations and the foreign environments in which the organisations operate.IHRM includes comparative HRM studies e.g. differences in how companies in Japan, Thailand, Austria and Switzerland plan for upgrading of employee skills and so on.What IHRM is notIHRM does not include studies that are focused on issues outside the traditional activities inherent in the HRM function.E.g. leadership style is not IHRM, unless specifically linked to an HRM function developing a selection programme to measure and select global leaders would arguably lie within the domain of organisational behaviour.IHRM does not include studies of HRM activities in single countries.E.g. a news report of personnel selection practices in Saudi Arabia, whether undertaken by an English, German or Canadian researcher, is still a study about domestic HRM in Saudi Arabia. Though such studies may have interest to those who work in international HRM issues, they are essentially examples of domestic HRM research.IHRM approachesEthnocentric key positions filled by nationals of parent companyPolycentric host country nationals recruited to manage subsidiary in their own countryGeocentric best people recruited, whatever their nationalityRegiocentric best people recruited within region in which the subsidiary operates (e.g. EU, USA).IHRM solutionsChoice of IHRM approach depends uponDegree and type of internationalisationType of industry and markets servedCharacteristics of staffCultural preferences.Advantages and disadvantages of a de centr alized approach to IHRMAdvantagesGroups within the subsidiary can gain in statusGroups within the subsidiary become more cohesive, fostering group identityIHRM takes place within a nuance appropriate to the local anesthetic workforce and customersDisadvantagesTendency to become exclusiveLoss of central control, higher administrative costs as HRM function is sent down the lineLoss of organisational control and organisational identityWork and Islamic cultureLatifi (1997) identified the following work-related values of Islamic cultureEquality before GodIndividual responsibility within a framework of cooperation with othersA view that people in positions of power should treat subordinates kindly, as if their subordinates are brothers or sistersFatalism, but also a recognition of personal choiceEncouragement of consultation at all aims of decision-making, from family to the wider community.IHRM and training and developmentTraining and development increases in complexity as MNEs move a broad.Types of training and development depends on a number of factorsThe degree to which management is centralised.The types of workers employed in subsidiaries or joint ventures.The importance of branding, and the extent to which employees are expected to reflect the brand.The cultural expectations of training.In a global company, the training may well be centralised so that suppliers, employees and distributors are aware of the brand image that needs to be communicated.E.g. in Ford training programmes are set up centrally, and then translated and delivered to all main suppliers, subsidiaries and distributors.If, however, a more polycentric approach is taken, then the training may well be far more local, and more in line with the local cultureCross-cultural awarenessSupport provided for employees moving to foreign subsidiariesEnvironmental briefingsCultural orientationCultural assimilationLanguage trainingSensitivity trainingField experience.IHRM and reward strategiesTo design an appropriate reward strategy for employees taking up an international position, may require a number of factors to be considered, includingA knowledge of the laws, customs, environment, and employment practices of the foreign countries.Familiarity with currency relationships and the effect of inflation on compensation.An understanding of the allowances appropriate to particular countries, etc.For example, awareness of employment related enactment in the country of operation is vital to an appropriate international reward structure. India has as many as 45 labour laws at national level and close to four times that at the level of state governments (Kaushik 2006).The main method of drawing up a compensation package is known as the ratio sheet approach.This approach is, according to Reynolds (1986) a system designed to equalise the purchasing power of employees at comparable position levels living overseas and in the home country, and to provide incentives to offset qualitative diffe rences between assignment locations.IHRM and Balance Sheet reward strategyIn order to achieve balance in reward structure, the organisation must take into accountIncome taxes incurred in both home and host countryHousing allowances (which might range from fiscal assistance to employees to providing company housing)Cost-of-living allowances (to adjust differences between home and abroad)Contributions to savings, pension schemes, etc. while abroadRelocation allowances (including the moving, shipping and storage of personal and household items and fly-by-night living expenses)Education allowances for expatriates children (e.g. language tuition and enrollment fees in the host country or boarding school fees in the home country)Medical, emergency and security cover.AppraisalIdentifies individuals strengths and weaknessesReveals organisational obstacles blocking progressProvides feedback to improve human resource planningImproves communication.Cultural variations performance appraisalsD imension generalUSA low contextSaudi Arabia high contextJapan high contextObjective of performance appraisalFairness, employee developmentPlacementDirection of company/employee developmentWho does appraisal? supervisorManager several levels up. Appraiser has to know employee wellMentor and supervisor. Appraiser has to know employee wellAuthority of appraiserPresumed in supervisory role or position. Supervisor takes slight leadReputation important (prestige is determined by nationality, sex, family, tribe, title, education). Authority of appraiser importantRespect accorded by employee to supervisor or appraiser. do co-equallyHow often?Once a yearOnce a yearDevelopmental or periodically once a month. Evaluation appraisal afterward first 12 years