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International Human
Resource Management Issues

Guide: - Dr Sanjay Bhayani

(Dean Faculty of Business Management)

By: - Ananthigaa Kasiththamby

Seat No - 020030
MBA Semester II/2016
Saurashtra University, Rajkot

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Contents

Introduction .....3

What is IHRM? ......................4

IHRM Issues ................................................................................................................................. 6

Solutions For IHRM issues ....................................................................................................... 10

References
12

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INTRODUCTION

This report presents the findings about the International human resource management issues. In
the topic I have analyzed the issues and recommended some solutions to solve the issues. This is
a study report about the topic.

International Human Resource management is a mixture of working diversity and

different skilled employees. As the result of the diversity, there will be more confusions and
problems. Also employees leaves their own country and work in a new place so it is a challenge
for every individual.

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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 and so on.

In simple terms, IHRM is concerned about managing human resources at Multinational Companies
(MNC) and it involves managing 03 types of employees namely,

1. Home country employees- Employees belonging to home country of the firm where the
corporate head quarter is situated.

2. Host country employees- Employees belonging to the nation in which the subsidiary is situated.

3. 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 an American company
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.

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Differences between domestic HRM and International HRM

(IHRM) are summarized below:

Domestic HRM IHRM

Domestic HRM is done at national level IHRM is done at international level

Domestic HRM is concerned with IHRM is concerned with

managing employees belonging to one managing employees belonging to many
nation nations (Home country, host country and
third country employees)

Domestic HRM is concerned with IHRM has concerned with managing

managing limited number of HRM additional activities such as
activities at national level expatriate management

Domestic HRM is less complicated due to IHRM is very complicated as it is affected

less influence from the heavily by external factors such as cultural
external environment distance and institutional factors.

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FACTORS AFFECTING THE IHRM

Legal and Political Factors

The nature and stability of political systems vary from country to country. U.S. firms are
accustomed to a relatively stable political system, and the same is true in many of the other
developed countries in Europe.

Although presidents, prime ministers, governors, senators, and representatives may change, the
legal systems are well-established, and global firms can depend on continuity and consistency.

However, in many other nations, the legal and political systems are not stable. Some governments
regularly are overthrown by military coups. Others are ruled by dictators, who use their power to
require international firms to buy goods and services from host-country firms owned or controlled
by the rulers or the rulers families.

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International firms may have to decide strategically when to comply with certain laws and
regulations and when to ignore them because of operational or political reasons.

In some countries, laws address issues such as employment discrimination and sexual harassment.
In others, because of religious or ethical differences, employment discrimination may be an
accepted practice.

All of these factors reveal that it is crucial for HR professionals to conduct a comprehensive review
of the political environment and employment-related laws before beginning operations in a
country. The role and nature of labor unions should be a part of that review.

Economic Factors

Different countries have different economic systems. Some even still operate with a modified
version of communism, which has essentially failed If the government attempts to move to a more
mixed model, it is using unemployment and layoffs to reduce government enterprises bloated with
too many workers.

Many lesser-developed nations are receptive to foreign investment in order to create jobs for their
growing populations. Global firms often obtain significantly cheaper labor rates in these countries
than they do in Western Europe, Japan, and the United States.

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Cultural Factors

Cultural forces represent another important concern affecting international HR management.

Culture is composed of the societal forces affecting the values, beliefs, and actions of a distinct
group of people.

Cultural differences certainly exist between nations, but significant cultural differences exist
within countries also.

Getting individuals from different ethnic or tribal backgrounds working together may be difficult
in some parts of the world. Culture can lead to ethical differences among countries.

Compliance with International Laws

As businesses begin to expand into the global marketplace or as they hire employees from diverse
geographic and cultural backgrounds, they may have to adapt to new labor laws and tax liabilities.

Doing business in Europe, for example, will require the business to pay value added tax. Hiring
employees who are non-naturalized US citizens might require HR to apply for work visas and
report economic data to the federal government.

Compliance with international law can be an issue for the under-educated business owner or HR
manager, because these laws tend to be complex and sometimes difficult to implement. Keeping
well-informed of the legal requirements for the business's operations can help alleviate some of
this complexity.

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Benefits and Compensation

Benefits and compensation are the backbone of any HR strategy, but in international HR, benefits
and compensation are even more important in focusing on the work-life balance of employees.

The idea behind work-life balance is to provide employees with programs and initiatives that
improve both their personal and professional lives.

This is considered part of international HR, because many multinational companies have already
implemented programs such as flexible working time, paternity leave, extended holidays and on-
site childcare.

In fact, many nations around the world, mandate these programs by law. Implementing them on
the local scale is one of the challenges and, ultimately, rewards of international HR.

Training and Development

In international HR are training and professional development programs. Training programs

typically encompass in-house seminars and meetings designed to give employees on-the-job
knowledge of skills that are important to doing business globally.

HR might offer language classes, extra training, such as allowing them to attend networking events
and conferences, global training seminars and other specific competency-based programs.

Professional development helps employees to hone their skills in global marketing, international
business development and finance trends. But from this procedure the cost will be increased.

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SOLUTIONS FOR INTERNATIONAL HUMAN

RESOURCE MANAGEMENT ISSUES

Employee Satisfaction
Low morale and poor engagement levels often are signs of job dissatisfaction. Morale and
engagement are intangible and, therefore, difficult to measure.

However, employee satisfaction surveys are helpful in identifying working conditions that
may be causing employees to be less than enthusiastic about their jobs.. Action plans provide a
road map for resolving employment issues and follow-up strategy for sustaining improvements.

Turnover

Exit interviews are a reactive solution to turnover. HR staff obtains information from departing
employees about their experiences with the company and the reason they decided to resign.

The data from exit interviews can then be analyzed by department, position and tenure to determine
which employment factors cause employees to leave.

Higher-than-average turnover in specific departments may signal ineffective leadership, stressful

workloads or complex departmental processes that affect the way employees feel about their jobs
and the company. Proactive measures to reducing turnover involve two areas that have a positive
impact on hiring decisions and employee retention.

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Strategic Partnership

Many executive leaders and employees still see the HR department as a mere administrative
function of business. HR should be involved in developing the company's strategic direction,
despite pushback from leaders who aren't ready to include HR at the executive table.

Overcoming resistance to HR becoming a strategic partner requires demonstrating the value of the
organization's most valuable resource -- its workforce -- and clarifying HR's role in developing the
workforce.

In addition, many executives need to see the impact that HR has on the bottom line to be convinced
that HR deserves to be a strategic partner.

Branding

Attractive compensation packages and flexible work schedules aren't the only factors that create a
desirable workplace. Job seekers want to know what it's really like to be an employee of the
company, says in a survey.

Social media, professional networking and social events, plus interactive features on the company's
website and careers pages underscore transparency, which improves branding as an employer of
choice.

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REFERENCES

https://www.researchgate.net/publication/27479370_The_Challenge_of_International_Human
_Resource_Management_Balancing_the_Duality_of_Strategy_and_Practice

https://www.linkedin.com/pulse/challenges-international-human-resources-management-farid-
yousef

http://www.whatishumanresource.com/factors-affecting-global-hr-management

http://tutebox.com/2850/business/hrm/what-is-international-human-resource-management/

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