Drastic changes have been noted over the years due to globalization where there is far more integration of markets, countries and technology posing both benefits and challenges for Human Resource Management. The core responsibility of Global HRM include recruitment, training, motivation, nurturing and retention all while utilizing all levels of functionality. It is also linked with identifying and understanding how MNC's manage a geographically diverse workforce.
Understanding IHRM comes with understanding different approaches that can be used by organizations to help them run operations smoothly in companies that are set in countries. This can be done in 4 different approaches. Ethnocentric, Polycentric, Regino-centric and Geocentric.
With respect to ethnocentric approaches, focus is placed in the approach of the parent company in terms of adoption of practices, policies, systems etc. which can at times cause conflict. Most decisions are also centralized with the parent company. Its is important to have a mix of different approaches to achieve best results. Polycentric approaches focus on the importance of the host country and are aware of national culture and are in touch with in-depth local knowledge which is important to align management styles that suit local culture. Regino-centric approaches take into account the similarities between different countries in the same region and are usually very strong in terms of innovation and creativity due to a presence of a diverse workforce. Lastly, geocentric approaches focus on strengths within the organization irrespective of geographical location. This allows a more mature management structure and a culture with flexibility that define cultural boundaries. This approach also focuses on equal opportunities for everyone, constant motivation, quick decision making, high professionalism and mobility of talent.
There are three key dimensions of HRM which include the HR activities itself, the types of employees and the type of countries. Diversity affects functioning with regard to planning, recruitment, selection, training and development, expatriate remuneration, performance of expatriates and their repatriation within the home country.
In order for a good IHRM system it is important to follow strict guidelines of professional responsibility, ethical leadership, professional development, fairness and justice whilst taking into account conflicts of interest with stakeholders. It is important to pay special attention to differences within a culturally diverse work environment where needs may differ and take into account PESTEL factors which may affect policies, systems and other practices of the organizations.