Organizations or companies goes international to expand their business and to gain a competitive advantage over its competitors. Therefore, global human resource management is about managing the organizational human resource at the international level which are required to recruit, train, motivate and retain its employees.
International Human Resource Management differs from domestic human resource management in many ways. International Human Resource Management has to manage the complexities of operating in and employing people from different countries and cultures. Not only the company will recruit qualifies workers in foreign countries, they also send employees abroad to gain international experience. The Human Resource will also comply with the different guideline from different countries regarding their labor law, taxation, working hours, and other aspects.
The key features described about global HRM:
1. Recruitment- the goal of recruiting is about finding the qualified candidate that can fulfill the role and duty of the position. On the global level, the HR need to understand that the right skills, duty and task of the position could vary as it is in different country. There are 4 approaches to this.
- The Ethnocentric approach is about the parent company managing things as the best way and tested practices and should be followed in all units and organizations in different countries. This means all the system, procedures, policies are adopted from the parent company to every subsidiary company. This may give rise to conflicts as expectations and norms may be different from country to country. In this approach, the major decision making is centralized with the parent company. This is so the culture of the organization remain same and in line with the parent company.
- Poly-centric approach is when the multinational corporation realize the importance of the host country and its laws. Different culture plays a different role in the aspects. For best results, they need local knowledge and the working way of the country and align the management style to suit the local culture of the country. The decisions is made by local management.
- Region-centric approach is when multinational corporation knows that despite there are differences in various aspects there are also similarities from country to country. Here, the multinational corporation set up regional offices to manage the entire region.
- Geo centric approach is when the management believes that in using the best strength wherever it is available within the organization without the consideration of the geographical region or country. The right proportion of flexibility and culture makes them unique. Here the positions are by people of many countries and they have equal opportunity irrespective of race, nationality and gender.
2. Training- once the employees has been selected, they need training in order to learn the task and fulfill the goals. They could go through training which is by passive method using classroom and seminar or active method through stimulations. In a global company, it is important that the processes are similar and clear communications can take place. By using the same processes and policies, miscommunication could be avoided and resources could be passed along despite being in different countries. Company By offering opportunities for additional training to develop the skills of the employees. They can also visit another country for training.
3. Salary and benefits- there are 3 things- firstly the based salary which could be same range is as similar position in the home country paid by local currency. Secondly, foreign service premium which is paid as percentage of the based salary, it can help to live in unfamiliar country and to deal with new culture and languages and to adopt with the new working habits. And some organizations offer benefits package like insurance, vacation, rehabilitation leave. The third is allowances which are the hardship, the housing, the education, and the cost of living. The organization also need to be aware that the minimum range of salary could be different from country to country, as well as other benefits such as maternity leave or paternity leave. Knowing the standards, laws and rules of each country of operation would be important.
It is important international companies strive to achieve balance between global and local HR system and practices so they have the same goal. this can be achieved with a common system such as in accounting, marketing, management, communicating the common missions and goals and to provide education or training so all are aware of how parent company would want to achieve or the way to conduct business.A model developed by Morgan explains on activity changes when Human Resource goes International. The three dimensions which he looked at were:
1. Human resource activity of procurement, allocation and utilization
2. The national or country categories which are the host country where the subsidiary may be located, the parent company and other countries which may be the source of labor, finance or other things.
3. The three categories of employee in the international organization which are host country nationals, parent company nationals and third country nationals.