Maharana Pratap Group of Institutions, Mandhana, Kanpur

(Approved By AICTE, New Delhi And Affiliated To AKTU, Luck now)

Digital Notes
[Department of Management]

Course : MBA
Branch : HUMAN RESOURCES
Semester : Even
Subject Name : INTERNATIONAL HRM
Subject Code : KMBNHR05
Lecture No. : Introduction to IHM
/Topic

Prepared by : Shweta Parmar 1

 Introduction to International Human Resource Management

Meaning:

• International Human Resources Management (IHRM) is the process of managing human

resources in multinational organizations.

• It involves managing human resources in different countries with different cultural, legal,
economic and political systems.

• The goal of IHRM is to ensure that organizations are able to attract, retain, and develop the
best global talent to achieve their business objectives.
 The Key Functions of IHRM Include:
• Recruitment and Selection: This involves identifying, attracting and selecting the most
suitable candidates for international assignments.

• Training and Development: This involves providing training and development programs to
enhance the skills and knowledge of employees for international assignments.

• Compensation and Benefits: This involves developing and administering compensation and
benefits programs that are competitive and compliant with local laws and regulations.
 The Key Functions of IHRM Include:
• Performance Management: This involves developing and implementing performance
management systems that align with the organization’s objectives and ensure that
employees are meeting their goals and objectives.

• Employee Relations: This involves managing employee relations, including addressing

conflicts and grievances, promoting diversity and inclusion, and ensuring compliance
with local labor laws and regulations.

• Legal Compliance: This involves ensuring compliance with local labor laws and
regulations, including employment contracts, immigration laws, and tax laws.
 Developments leading to International HRM Perspective

International Human Resources Management (IHRM) has developed over the years due to various factors such
as globalization, advances in technology, changes in business practices, and the need for organizations to remain
competitive in the global marketplace. Here are some of the key developments that have led to the emergence of
the IHRM perspective:

• Globalization: The increasing interconnectedness of the world’s economies has led to the expansion of
multinational corporations, which in turn has led to a greater need for managing employees across borders.

• Advances in Technology: Advances in communication technology have made it easier for organizations to
manage employees across different geographical locations.

• Changes in Business Practices: The trend towards outsourcing and offshoring has led to the need for
managing employees across different cultures and legal systems.
 Developments leading to International HRM Perspective

• Increased competition: The need for organizations to remain competitive in the global marketplace
has led to the need for effective management of human resources across borders.

• Diversity and Inclusion: The recognition of the importance of diversity and inclusion in the
workplace has led to the need for managing employees from different backgrounds and cultures.

• Legal and Regulatory Frameworks: The development of international legal and regulatory
frameworks has made it necessary for organizations to comply with a range of laws and regulations
when managing employees in different countries.
 International HRM: Roles and Distinguishing Activities

International Human Resource Management (IHRM) refers to the process of managing employees across different
countries and cultures. It involves the coordination of human resource policies, procedures, and practices to
ensure that they align with the organization’s global business strategy. Some of the key roles and distinguishing
activities of IHRM are:

Staffing: One of the primary roles of IHRM is to ensure that the organization has the right people in the right
positions across different countries. This involves activities such as global recruitment, selection, and placement
of employees. IHRM also needs to manage expatriates and ensure that they are adequately prepared for
international assignments.

Training and development: IHRM is responsible for providing employees with the necessary skills and
knowledge to perform their jobs effectively in a global context. This includes activities such as cross-cultural
training, language training, and global leadership development.
 International HRM: Roles and Distinguishing Activities

Compensation and Benefits: IHRM needs to develop and implement compensation and benefits
policies that are consistent with the organization’s global business strategy. This involves
activities such as managing international payroll, designing expatriate compensation packages,
and ensuring compliance with local labor laws.

Performance Management: IHRM needs to ensure that the organization’s performance

management processes are consistent across different countries and cultures. This involves
activities such as setting global performance standards, developing global performance metrics,
and conducting global performance evaluations.

Employee Relations: IHRM is responsible for maintaining positive employee relations across
different countries and cultures. This involves activities such as managing cross-cultural conflicts,
promoting diversity and inclusion, and ensuring compliance with local labour laws.
 Performance Management Systems and Process
•Global HR planning: IHRM needs to develop and implement global HR plans that align with
the organization’s global business strategy. This involves activities such as analyzing global
labor markets, forecasting global HR needs, and developing global HR policies and procedures.

•Managing global HR systems: IHRM needs to manage global HR information systems, such
as global HR databases and HR analytics tools. This involves activities such as selecting and
implementing global HRIS systems, ensuring data privacy and security, and analyzing HR data
to inform business decisions.

•In summary, IHRM plays a critical role in managing employees across different countries and
cultures. Some of the key distinguishing activities of IHRM include global staffing, training and
development, compensation and benefits, performance management, employee relations, global
HR planning, and managing global HR systems.
 Organisational Structure and HRM

Organizational structure refers to the way in which an organization is arranged and structured to
achieve its objectives. The structure of an organization can have a significant impact on the
effectiveness of its Human Resource Management (HRM) function. Some of the ways in which
organizational structure can impact HRM are:

Reporting lines: The reporting lines within an organization can have a significant impact on the
HRM function. In a centralized structure, HRM decisions are made at the corporate level and then
implemented throughout the organization. In a decentralized structure, HRM decisions are made by
local managers, which can lead to inconsistency in HRM practices across the organization.

Job design: Organizational structure can also impact job design, which can in turn affect HRM. In a
hierarchical structure, job roles are clearly defined and there is limited scope for employees to take
on additional responsibilities or be creative in their roles. In a flatter organizational structure, there is
greater flexibility in job roles, which can lead to increased employee engagement and job
satisfaction.
 Organisational Structure and HRM
Resource allocation: The resources allocated to HRM can be impacted by organizational structure. In a
centralized structure, the HRM function may have greater access to resources, while in a decentralized structure,
local managers may have greater control over HRM resources.

Communication: Effective communication is essential for the success of the HRM function. The structure of an
organization can impact the communication channels used by HRM. In a hierarchical structure, communication
may be limited to top-down communication, while in a flatter organizational structure, there may be more
opportunities for open communication and collaboration.

Culture: Organizational structure can impact the culture of an organization, which can in turn impact HRM. In a
centralized structure, the culture may be more formal and bureaucratic, while in a decentralized structure, the
culture may be more flexible and entrepreneurial.

In summary, the organizational structure can have a significant impact on the effectiveness of the HRM function.
The reporting lines, job design, resource allocation, communication, and culture can all be impacted by the
structure of the organization. HRM needs to work closely with organizational leadership to ensure that the
structure of the organization supports the achievement of the organization’s HRM objectives.
 International Human Resources Planning
International Human Resources planning refers to the process of identifying and
addressing the human resource needs of an organization in a global context. It involves
the development and implementation of strategies to ensure that the organization has
the necessary talent to achieve its global business objectives. Some key steps in the
International Human Resources planning process are:

Environmental analysis: The first step in International Human Resources planning is

to analyse the external environment in which the organization operates. This includes
factors such as economic, political, legal, and cultural conditions in the countries where
the organization operates.

Talent forecasting: Once the external environment has been analysed, the next step is
to forecast the organization’s human resource needs. This involves projecting the
demand for talent based on the organization’s global business objectives, and assessing
the supply of talent available in the labour market.
 International Human Resources Planning
Gap analysis: The next step is to identify any gaps between the organization’s current talent and
the talent needed to achieve its global business objectives. This involves analyzing the skills,
knowledge, and experience of the organization’s current workforce, and identifying any areas
where additional talent is needed.

Talent development: Once any talent gaps have been identified, the organization needs to develop
strategies to fill these gaps. This may involve training and development programs to build the
skills of existing employees, as well as recruitment and selection programs to attract new talent.

Succession planning: Succession planning is an important component of International Human

Resources planning, particularly for key leadership positions. The organization needs to identify
individuals with the potential to fill key roles in the future, and develop plans to ensure that they
are ready to assume these roles when the time comes.
 International Human Resources Planning
Implementation and Evaluation: Once the International Human Resources plan has been
developed, it needs to be implemented and evaluated. This involves monitoring the effectiveness
of the plan, and making adjustments as needed to ensure that the organization has the necessary
talent to achieve its global business objectives.

In summary, International Human Resources planning is a critical process for organizations

operating in a global context. By analyzing the external environment, forecasting talent needs,
identifying talent gaps, developing talent, and implementing and evaluating the plan, organizations
can ensure that they have the necessary human resources to achieve their global business
objectives.