UNIVERSIDADE DO MINHO
International Human Resource Management
(IHRM)
DEGREES
Bachelors in: Economics, International Business, International
Relations, Management, Political Science, Public Administration
Year 3 – 2nd semester
2018 / 2019
TOPICS FOR
DISCUSSION
“What is international human resource
management?"
Human Resource Management (HRM) is set of organizational activities aimed at effectively
managing and directing human resources/labor towards achieving organizational goals.
Typical functions performed by HRM staff would be recruitment, selection, training and
development, performance evaluation, dismissal, managing promotions, etc.
The main purpose of HRM is to create and retain a suitable and satisfied set of employees to
provide maximum contribution to the organizations success.
The main goals of HRM:
Improve employee productivity
Employee Development
Increase the Quality of Work Life (QWL)
To ensure legal compliance
Improve employee productivity - Employee productivity can be identified as the relationship
between employee inputs and out puts within a certain period of time.
Employee Development - This is concerned with the employee achieving his/her personal
goals in terms of knowledge, skills, promotions, increments, etc.
Increase the Quality of Work Life (QWL) - This is about basically building a good work
environment for employees. And getting the employees to participate in the decision making
that affects them which will increase the satisfaction of employees which in turn will increase
QWL.
To ensure legal compliance - This is to adhere to the rules and regulations implemented by the
Government.
Then what is International Human Resource Management (IHRM)?
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, etc.
In simple terms, IHRM is concerned about managing human resources at Multinational
Companies (MNC) and it involves managing three types of employees namely:
Home country employees
Employees belonging to home country of the firm where the corporate head quarter
is situated.
Host country employees
Employees belonging to the nation in which the subsidiary is situated.
Third country employees
These are the employees who are not from home country/host country but are employed
at subsidiary or corporate headquarters. 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.
"There are some challenges that arise when you think of international career.
The cultural contexts influence the career orientation. Also, it is difficult to
select, motivate and retain people with different career perspectives and for the
employee the cultural distance might be a problem.
There may be conflicts, misunderstanding and communication problems as
well as culture shocks that may result in repatriation.
There is also the problem of MCID (My country is different) and there can be
some difficulties in applying management practices in different cultures."
In order to avoid problems, you must adapt your behaviors to the standards of
another culture while retaining your identity and adapt the way you
communicate.
How?
“Managers working in an international environment are obviously more subject
to the impact of multi-country, regional and global change and dynamism than
managers in a single-country operation.”
HRM professionals who contemplate internationalization typically need to address the
following:
Do we have a strategy for becoming an international firm?
What type of managers will we need to be successful? And how do we find or develop
them?
How can I find out about the way that HRM is conducted in other countries: the laws, trade
unions, labor market, expectations, etc.?
What will be the impact of local cultural norms on our home-based ways of working? Can
we use all or any of them in other countries?
How will we choose whether to send expatriates or use local employees?
How do we manage international moves if we choose to send some people out from home?
How do we manage knowledge across geographical and cultural distance?
