Global Human Resource Management or global HRM is also known as the International Human Resource Management or IHRM.
According
to Armstrong (2009), international or global human resource management refers
to the method used by multinational corporations to manage their employees
across national borders. This is a global process involving not only the
management of expatriates but also individuals in general.
"International
Human Resource Management" (IHRM) describes the processes for employment
and work procedures used by the company. It addresses the collective and
personal facets of managing employees. It is not constrained by any one
aesthetic or ideology. It typically involves a range of messages tailored to
different workforce segments and involves the involvement of both line and
specialized managers (Boxhall, P. and Purcell, J. 2008).
Mark
Mendenhall (2000) provides a definition for IHRM by outlining the following
three criteria.
1) IHRM is concerned with HRM
issues that cross national boundaries or are conducted in locations other than
the home country headquarters.
2) IHRM is concerned with the
relationships between the HRM activities of organizations and the foreign
environments in which the organizations operate.
3) IHRM includes comparative
HRM studies. As an example differences in how companies in Japan, Thailand,
Austria and Switzerland plan for upgrading of employee skills.
Globally
functioning companies consist of international, transnational, multinational,
and global firms and the main similarity between national and global HR
practice is the need how the actions can affect the overall success of the
company, rather than focusing on minor details. The need for sensitivity to
different cultures and different environments, and the higher complexity can be
considered as the difference between them. The knowledge-based society growth,
together with the pressure to open up emerging markets, makes intellectual
capital and human resources as important as financial assets in building a
sustainable competitive advantage for multi-national companies. The shortage of
qualified managers is a main problem to the speed at which multinational
companies can expand their sales in a foreign country. Chief Executive Officers
of multinational companies need to bridge the gap between HR oratory and reality.
Good HRM in a multinational company always get the right person in the right
time to the right job at the right place and with the right cost.
One
of the key functions of Global Human Resource Management is that the company
works on providing a local appeal in the host country in the face of
maintaining an international feel. According to literature, there are four
major objectives of the global HRM which are mentioned below.
1)
Generate awareness of cross
cultural sensitivities among managers globally and hiring of staff across
geographic boundaries
2)
Provide policy for
International Human Resource management of culture
3)
Create a local appeal
without compromising upon the global identity
4)
Train on cultures and
sensitivities of the host country
Global
HRM is generally a process concerned mostly with employee related major HR
activities. As the business of a company becomes global, the constraints of the
HR functions expand while they are driven by factors such as efficiency,
international law, business process convergence, internationalization
experience, information sharing, and adaptation of the company's HRM policy to
local circumstances.
Figure 1: Major Functions of Global HRM
Characteristics of Global HRM
Global
HRM involves employment of the right person in the right time to the right job
at the right place and with the right cost, irrespective of geographic
locations. Further, for the effective alignment of HR strategies with corporate
objectives, it requires to have the long-term HR plan and a diversified skills range
for employees who works overseas. In global HRM, based on country-specific
factors, compensation for parent, host & third country nationals are
determined. However, for faster information systems, global HRM creates the
centralized reporting methods around the global network. Accordingly, some
characteristics of global HRM are listed below.
Ø Flexibility
Ø Sensitivity
Ø Adaptability
Ø Cultural awareness
Ø Curiosity and thirst
Ø Sharing and listening
Ø Dealing with uncertainty
Challenges to Global HRM
Global
HRM is related to the HRM of multinational companies and therefore, hierarchical
employee management is not suitable. It requires flexibility in knowledge,
skills, capacities, and also the attitudes while it manages a multicultural,
multi lingual and multi skilled workforce in the global network. Hence, there
are challenges for global HRM and some are listed below.
Ø Avail of various approaches to select, deploy, develop and
reward expatriate who could be nationals of parent country or third country and
various international models
Ø Differences of political
situations and government policies in related countries
Ø Extent to which HR policies and practices should vary in
different countries
Ø Managing people in different countries and environments
Ø Repatriation and the relevant process
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