International Human Resource Management

Effective international human resource management is quite a dynamic and complex process that is imperative to the success of an International organization, though set against the backdrop of ever evolving market and economic trends. Some of the dynamics it brings into play are international staffing, expatriation and pre-departure training for international assignments. Depending on the policy or approach each international company employs while dealing with each of these dynamics, it potentially stands to benefit in a number of ways.

Introduction

International human resource management, (IHRM), refers to the dynamic process of effectively managing the multi-cultural and multi-national people resource of an organization that has its footprint in multiple countries across the globe.

The major functions of international Human Resource management include:

- recruitment and selection;

- development and training;

- performance evaluation;

- remuneration and benefits.

Labor relations. What differentiates IHRM from domestic HR activities is that now a broader range of HRM activities is addressed, HR issues dealing with employees from different countries now arise, the HR manager gets to be even more involved in the personal lives of their employees, dealing with greater risk exposure arising from handling international assignments and having to manage multiple external factors such as varying government laws & regulations.

IHRM, amongst other things, seeks to apply cultural sensitivity while dealing with employees in a cross-cultural and multi-national domain. The International environment adds extra complexity to managing people, beyond what would be found in the local context. Whether a company is international, multinational, transnational or global, the dynamics of IHRM involve:

Knowing the types of managers to hire or develop so as to remain a successful international company

Knowledge management across geographical & cultural distance (Brewster, Sparrow, & Vernon, International human resource management: an introduction, 2003, 2007)International staffing The process of selecting employees from different countries

Conducting proper training beforehand for international assignments

Compensation issues with regard to international assignments

Repatriation The process of preparing an employee for return to his home country after completing an international assignment (Rajan, 2013)Attempting to come up with core HR policies that can aid inter-unit linkages, which is a difficult task, especially when the units exist in different local environments or are implementing diverse competitive strategies using dissimilar technologies.

Perhaps a question that one would seek to answer is: What has led to an increased interest in IHRM?

The main reason is that companies are now going global because the world is in essence, becoming boundary less, which has in turn introduced global competition. Going global brings about differences in organizational environments, which is an aspect that requires effective management. Companies have in multiple scenarios, found it cost effective to be established in countries with cheaper labor costs, more flexible government regulations and generally lower operational costs. More so, companies have increasingly realized the importance of having an employee portfolio that cuts across the globe, if at all they wish to continue enjoying increased sales revenues and growth. Because these companies realize that their human resource is one amongst its greatest assets and in essence its driving force, effectively managing it translates to an organizations success & the reverse holds true.

Thus, individuals and specifically, Human Resource managers working in an international domain find themselves needing to be equipped with the following skills:

- negotiating and influencing skills;

- conceptual and analytical skills;

- strategic thinking;

- interpersonal skills;

More so, Human Resource managers working in an international context require a broader knowledge base in the following areas:

- international finance;

- international business;

- acknowledging & managing cultural differences;

- international labor legislation;

- international compensation & benefits;

- international labor markets.

For such organizations, it is not enough to know what to do and what not to do in the different nations, but to also come up with cost-effective people management practices (Brewster, Sparrow, & Vernon, International human resource management: an introduction, 2003, 2007).

Despite the existence of such varied complexities, there are a number of practices and/or considerations that could help an international organization achieve effective IHRM:

1. Intercontinental scope

This refers to the physical environment in which critical company decisions are made. Wisely selecting this area stands to potentially benefit the organization.

2. Intercontinental representation

This entails selecting executives and managers from the different countries in which the international company has subsidiaries

3. Intercontinental process

This makes reference to the firms ability to incorporate ideas from multiple countries into its strategic plan and competition strategy (Dzanic, Lindholm, Wakolbinger, & Zerjav, 2004, 2005)Exploring some of the aforementioned dynamics:

4. International staffing

This refers to the process of selecting employees for the purpose of executing international operations. The employees could be:

(a) Home/ Parent Country Nationals (PNC) Refers to an employee who is a citizen in the country where the international company has its headquarter;

(b) Host Country National (HNC) Refers to an employee who is a citizen in the country where the international company has its subsidiary;

(c) Third Country National (TCN) Refers to an employee who has citizenship in another country other than where the international company is headquartered, or has its subsidiary (Rajan, 2013).

Depending on the present need of the international organization, the following approaches may be used for staffing:

1. Polycentric approach

Where a company employs HCNs in its subsidiaries and PCNs in its headquarters

The advantages of this approach are:

Possible improved relations shared between the international company and the host company government; some governments favor local employee development. This could help to ensure that the international company operates with minimal conflict with the host government, while at the same time enjoying greater buy-in and support from them.

Improved communication in the host company locals are more receptive and better able to communicate with their local managers, rather than having to deal with foreign managers who may be experiencing a language barrier challenge.

It is more reliable to employ host country employees as they do not suffer divided country loyalty.

The international company increases its ability to sell its products in the host country by investing capital and providing employment to its locals. (NORUZI & Westover, 2009)Incurring lower hiring costs.

Demonstration of trust in the local citizens.

Inclusion of local constraints and concerns in the decision-making process.

The chances of the company being better accepted by the locals are increased (Treven, 2001).

2. Geocentric approach

This simply means that the most qualified individual gets the job and nationality is disregarded.

Advantages of this approach:

Theres a pooling of multi-cultural & multi-national knowledge & skills

The tendency for a manger to nationally identify with a subsidiary is reduced, if not eliminated

Regional approach

This is where PCNs and HCN or TCN managers staff the region headquarters. This strategy lays emphasis on the different regional markets and their needs. Here, the focus is either the need for area or product expertise (Dzanic, Lindholm, Wakolbinger, & Zerjav, 2004, 2005)

3. Ethnocentric approach

Where PCNs staff important headquarter and subsidiary positions.

Possible advantages arising from this approach:

It could potentially help create a consortium of internationally qualified executives.

The fact that the expatriate manager shares cultural similarity with the parent company could guarantee a transfer of business practices.

It allows closer control of the global subsidiaries (Treven, 2001).

Managing expatriates

This brings into the picture the complexities of employing and moving people out of their country of origin. A major challenge with this process from the employers perspective is cost. From the employees perspective, adjusting to the new environment often proves to be the greatest challenge. The international organization needs to be thorough in its selection and training process, lest it suffers the return of expatriates to their home countries before completing their assignments. Some of the other reasons that further lead to expatriate failure are employees experiencing career blockage, culture shock, a tendency to use such a move to get rid of problematic employees, singularly focusing on technical expertise, a lack of proper pre-departure training and family problems C(Treven, 2001).

A few techniques that the international company could apply when selecting expatriate candidates are:

- screening the expatriates spouse and children and assess their willingness and readiness to relocate;

- hiring in advance, a foreign international, who could later be an expatriate candidate;

- having as a requirement for potential expatriates, former international working experience;

- another selection criteria that could be used is stressing the importance of an individual being culturally unbiased.

The evaluation criteria for an expatriate could also vary to include more than the criteria that would be used while in the home country, or could be purely financial.

Another important factor for international HR managers to take into consideration is the compensation of expatriates. Normally, it is expected that the expatriate receives extra compensation and benefits.

As goes expatriation, so is there repatriation for international HR managers to deal with as well. Some of the factors to take into consideration are reverse culture shock, as well as dealing with the possibility of the employee desiring to pursue a boundary less career. The returning expatriate brings with him valuable knowledge, insights and experience, which may all be lost to the company if their return is poorly handled. Based on certain research, it is estimated that nearly 25% of returning expatriates quit their jobs in the parent company within a year.

Pre-departure training

Some of the training methods that can be employed include:

- cultural briefings where the expatriate is taken through the major aspects of the new countrys cultures, traditions & routine practices;

- area briefings Explaining general information about the new country, such as politics, state of the economy, history and geography of the place;

- use cases taking the individual through a real-life scenario of working or living in the new country;

- role-playing where the individual acts out a scenario they are likely to encounter while in the new country;

- field experiences short-term working opportunities in the new or a different country all together, for the individual to experience what it is like working in a different culture;

- culture assimilator this is a write up of the scenarios one is likely to find themselves in whi...