Global Human Resources Management

What is global human resource management?

• It is a discipline of taking care of workforces in a public or private company for organizations that
operate in more than one country or continent.

• It means supporting, managing and engaging employees around the world, deploying
common policies and taking into account local legislation, customs and culture.

• While an organization may use a single brand and deliver similar products and services all over the
world, workforces in different operating countries may have different needs.

• Salary benchmarks and typical working hours may be different.

• Cultural differences may affect workplace facilities, communication protocols and management
frameworks
• In addition, laws in each country may mean a different approach in taxation, management contracts,
statutory benefits or performance management. This can be a complex set of variables to manage
under a single employer brand.

• With the advent of globalization, organizations - big or small have ceased to be local, they have
become global! This has increased the workforce diversity and cultural sensitivities have emerged
like never before. All this led to the development of Global Human Resource Management.
• Even those organizations who consider themselves immune to transactions across geographical
boundaries are connected to the wider network globally.

• There is interdependence between organizations in various areas and functions.

• The preliminary function of global Human Resource Management is that the organization carries a
local appeal in the host country despite maintaining an international feel.
• We may therefore, enumerate the objectives of global HRM as follows:

1. Create a local appeal without compromising upon the global identity.

2. Generating awareness of cross-cultural sensitivities among managers globally and hiring of

staff across geographic boundaries.

3. Training upon cultures and sensitivities of the host country.

• The strategic role of Human resources Management in such a scenario is to ensure that HRM
policies are in tandem with and in support of the firm’s strategy, structure and controls. Specifically,
when we talk of structures and controls the following become worth mentioning in the context of
Global HRM.
 Decision Making: There is a certain degree of centralization of operating decision making.
Compare this to the International strategy, the core competencies are centralized and the rest are
decentralized.

 Coordination: A high degree of coordination is required in wake of the cross cultural

sensitivities. There is in addition also a high need for cultural control.

 Integrating Mechanisms: Many integrating mechanisms operate simultaneously.

Global HRM and the Staffing Policy

• Here also the role is no different i.e., hiring individuals with requisite skills to do a particular job. The
challenge here is developing tools to promote a corporate culture that is almost the same
everywhere except that the local sensitivities are taken care of.

• Deciding upon the top management or key positions gets very tricky. Whether to choose a local from the
host country for a key position or deploy one from the headquarters assumes importance; and finally,
whether or not to have a uniform hiring policy globally remains a big challenge.

• Nevertheless, an organization can choose to hire according to any of the staffing policies mentioned
below:

 Ethnocentric: Here the key management positions are filled by the parent country individuals.

 Polycentric: In polycentric staffing policy the host country nationals manage subsidiaries whereas the
headquarter positions are held by the parent company nationals.

 Geocentric: In this staffing policy the best and the most competent individuals hold key positions
irrespective of the nationalities.
• Geocentric staffing policy is the best when it comes to Global HRM. The
human resources are deployed productively and it also helps build a
strong cultural and informal management network. The flip side is that
human resources become a bit expensive when hired on a geocentric
basis.
Responsibility of human resource manager

• HR managers are responsible for the hiring, training, termination, and legal compliance of
company employees.
• Global HR managers are responsible for the same important tasks, but on an international scale.
Anytime a company expands internationally, they are faced with a number of challenges. A strong
global human resources team is a vital component of international expansion.
• Some people have the misconception that HR is similar in every country. While there are similarities
from one country to the next, there are a number of cultural differences that need to be
considered. Deciphering cultural differences requires research and experience in international
business ventures.
• Global HR managers are well versed in cultural differences and play an important role in bridging
the cultural gaps discovered through international expansion.
• Let’s review some key components of HR and how they operate on a global scale.
Key components of HR and how they operate on a global scale .

• Recruitment and Staffing

• Whether a company is looking to hire domestically or internationally, the goal is always to find the most
qualified candidate to fill the position.

• Understanding the job description and the desired skill set is essential to finding the right candidate for
the job.

• It is important for HR to understand any unique or different job expectations for international
positions.

• In addition, it is important to keep in mind that job experience and education may look very different
from one culture to the next.

• It is beneficial for the human resources team to be well versed in cultural differences so they are able
to fully understand the backgrounds and experiences of their candidates.
• Training

• Training is required for all employees to fully understand their job functions and company policies and
procedures.

• While it is always important to maintain consistency with onboarding new employees, it is especially important
when operating on a global scale.

• To ensure the same message is delivered to all employees, global HR managers should use the same
onboarding process at every company location.

• Certain things may need to be considered, like whether or not a translator is needed. However, the more
consistent the onboarding process is throughout the company, the more likely the company will be able to
maintain and grow its brand.

• When inconsistent policies and procedures are presented throughout the company, their brand and reputation
may suffer.
• Legal Compliance

• Legal compliance is a huge responsibility for human resources, both domestically and
internationally.

• To avoid legal trouble, it is critical that HR understands, abides by, and helps the company to
enforce all legal requirements.

• Laws differ from one country to the next and therefore, an important role of global HR managers
is to ensure all laws and regulations are followed in every country in which the company is
operational.
• Employee Development

• Human resources aids in employee development by providing opportunities for employees to

further their knowledge and education.
• Companies that operate on an international scale are able to use their international locations as
great training and development opportunities for their employees from other countries.
• Training internationally can provide a unique experience for employees to learn about cultural
differences, diversity, and differing perspectives
• Global HR managers are also responsible for ensuring employees who are working internationally
have all the resources they need to successfully transition into a new country and culture.
• Since global HR managers understand cultural and legal differences, they are well equipped to help
relocated employees settle into their new role.
• Compensation

• As we discussed earlier in this section, following laws and regulations is extremely important in
order to avoid paying fines or facing legal trouble.

• Compensation, including salary, health benefits, vacation time, etc. may differ from one
country to the next. It is vital that HR be aware of—and abide by—all work and compensation
laws for each and every country (or state) their company operates in.