Unit 1 ihrm model meaning of ihrm

UNIT 1 – IHRM MODEL
–Meaning of IHRM
–Difference between domestic and international HRM
–Model of IHRM
–Role of HR in International firms

Meaning of IHRM
• HRM refers to those activities undertaken by an organisation to utilize its human resources effectively.
• Those activities would include at least the following:
1. Human resource planning
2. Staffing (recruitment, selection, placement)
3. Performance management
4. Training and development
5. Compensation (remuneration) and benefits
6. Industrial relations

Meaning of IHRM
3 dimensions of IHRM:
1. The broad human resource activities: procurement, allocation and utilization
2. The national or country categories involved in IHRM activities:
– the host country where a subsidiary may be located
– the home country where the firm is headquartered and
– ‘other’ countries that may be the source of labour, finance and other inputs
3. The three categories of employees of an international firms:
– Host country nationals (HCNs)
– Parent country nationals (PCNs) and
– Third country nationals (TCNs)

Definition of IHRM
IHRM is defined as the interplay among these three dimensions – human resource activities, types of employees and countries of operation.

Model of IHRM
THIRD COUNTRY NATIONALS (TCN)
PARENT COUNTRY NATIONALS (PCN)
HOST COUNTRY NATIONALS (HCN)
TYPES OF EMPLOYEES
HUMAN RESOURCE ACTIVITIES
Host
Home
Other

EXPATRIATE
• An expatriate is an employee who is working and temporarily residing in a foreign country.
• Some firms prefer to call such employees
‘international assignees’.

Difference between domestic and international HRM
1. More HR activities
2. The need for a broader perspective
3. More involvement in employees’ personal lives
4. Changes in emphasis as the workforce mix of expatriates and locals varies
5. Risk exposure (Expatriate failure, Underperformance,
Terrorism)
6. Broader external influences (Type of government, state of economy in host countries)

Difference between domestic and international HRM
1. More HR activities
• International taxation
• International relocation and orientation
– Arranging for pre-departure training, providing immigration and travel details, providing housing, shopping, medical care, recreation and schooling information and finalizing compensation details.
• Administrative service for expatriates
– Time consuming and complex because policies and procedures are not always clear and may conflict with local conditions.
• Host-government relations
• Language translation services

Variables that moderate differences between domestic and international HRM
• The cultural environment
• The industry (or industries) within which the multinational is primarily involved
• The extent of reliance of the multinational on its home country domestic market
• The attitudes of senior management
• Complexity involved in operating in different countries and employing different national categories of employees

Role of HR in International firms
• International taxation
• International relocation and orientation
• Administrative service for expatriates
• Host-government relations
• Language translation services