International Human Resource Management: Importance, Effective Practitioner, Stages, and Recommendations

This article discusses the importance of International Human Resource Management (IHRM) and how it differs from domestic HRM. It covers the characteristics of an effective IHR practitioner, stages of growth for firms, and recommendations for HR best practices. The involvement of HRM department in domestic setting is confined and limited whereas HR managers at international level must gather information from employee personal life to effectively synchronize all significant aspects in an effective way.

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Table of Contents
Introduction................................................................................................................................2
Importance of greater degree of involvement............................................................................2
Effective IHR practitioner..........................................................................................................3
Stages a firm typically goes through as it grows internationally...............................................4
Recommendation........................................................................................................................5
Conclusion..................................................................................................................................6
References..................................................................................................................................7

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Introduction
The art and science of Human Resource Management (HRM) is complex and
organisation needs to address its practices in depth to drive towards competitive advantage in
the industry. However, in order to cover the varying work scenario over the globe,
international perspectives of HRM has now been modified into IHRM (International Human
Resource Management).
International Human Resource Management is the practice of employing skilled and
significant staff through all the countries in which organisation extents and effectively
utilizing the talent of these HR in the enterprise to gain organisation mission statement (Shen
et al, 2009). IHRM is into the administration of employees in the three counties groups – The
parent country, the host nation and third country.
Importance of greater degree of involvement
When an international project is not accomplished, it is important to replace the
employee, the cost of the failure to the enterprise is both indirect and direct. The indirect cost
may be related to market share depreciation and ineffective interrelations with hosts.
Whereas, the direct cost may be related with cost of training, salary and relocation expenses.
Hence, for an organisation, it is important to carefully select employees in the completion of
the project, as these costs are quite expensive for an enterprise. The failure of employees at
international level is caused by an error in recruitment. In history, employee selection has
been depending on interpersonal factors. For example, Greguras & Diefendorff (2009) found
that interpersonal skills help in the adjustment of the culture of the employee and its
associated people (family and friends). The involvement of human resource department is
limited in domestic settings. The decision related to most of employee selection is developed
informally as their jobs need much more than the right skills. When an enterprise propels its
expatriate to some other nation, it also proceeds with over the responsibilities other than the
elementary functions of HRM. These enterprises not merely deal with the employee selection
of the best employee for work in foreign nations; however, they are also aware of family
needs that will accompany the expatriate to the new cultural environment. It was founded that
many international projects are unsuccessful as these employees family and spouses are not

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able to effectively adjust with new surroundings. Therefore, properly organized training in
the other language is required for the employee and it is significant to develop the residence
in the new environment while also assuring health services. In local setting, the involvement
of HR department in personal life of employee is very confined. However, in international
setting, there is a higher involvement to offer necessary level of support. In many IHRM
activities, the degree of involvement is higher as the HR division needs to ensure that the
international assignee comprehends the various diverse aspects of his/her relocation and must
make sure that he is working in a conducive surrounding and greater level of caring is being
provided to the associated family (Zheng, 2013).
For example in the domestic setting, the HR division has lesser participation in the
family decisions of the employee. However, if the employee is directed to another nation like
in Japan, the HR division must ensure that the children are sent to valuable institutes and also
provide high living standard to the employee and his family.
Effective IHR practitioner
Teece (2016) stated that effectively managing human resources in organisation doing
business internationally needs cultural awareness and the skill to react quickly in the
competitive environment. It also required IHR managers to inspire and motivate employees
to work in collaboration. To accomplish all these roles, there are some characteristics highly
required in international HR professionals. IHR manager needs to be flexible about the
international processes and standard as every nation is different and the standard approach
that HQ planned might not function effectively in each nation. In addition, the branch and
host country can also be differentiated based on culture, languages and border. IHR managers
need to study how to hold cultural differences and make them convert into competitive
business landscape. For example, in Kenya, it is very usual for the managers to have
organisation car. Though, many organizations shy away from cars and encompass that
shyness to Kenya. It is a cultural aspect i.e. a symbol and status. Other characteristics include
adaptability, being an agnostic, sharing and listening.

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Stages a firm typically goes through as it grows
internationally
If an organisation is merely exporting its product by having few small workplaces in
overseas, then the job of the international HR practitioner is comparatively easy. Though, at
international organizations, HR managers functions are somewhat bigger having conflicting
strategic objectives (Story et al, 2014). Firstly, they must assimilate HR practices and policies
along with number of subsidiaries in various countries to that to achieve all significant
business objectives. Other than this, there is also require greater flexibility to the approach of
HRM for the important dissimilarities in the form of HR practices and policies that are
operational in various corporate and cultural situations. Hence, the issue of harmonizing
differentiation (flexibility in practices and policies at the confined subsidiary level) and
integration (coordination and control from headquarter) has been recognized as general
problems confronting HR in international enterprises. However, several contend that IHRM
is not similar to HRM in relation with national situation and thus states various significant
differences (Almond, 2011). It is comprised of (1) includes more functions, (2) covers higher
heterogeneous functions, (3) includes continuously varying outlooks, (4) needs more
participation in the individual life of employee, (5) is impacted by higher external bases and
(6) includes a higher risk level in comparison with national HRM.
In comparison with domestic HRM, there is a need for much broader perspective with
IHRM in various activities related to HR. HR managers at international level are required to
deal with various significant issues. Some of it includes changes in global taxation, global
orientation and relocation, many other managerial services for employee, and coordinating
relationships with host governments in various nations everywhere the globe (Bonache et al,
2010).
In addition, the HR function at internal level is highly complex and dynamic as
considering even one area of HR function like compensation; there are varieties of
international and national pay issues faced by international HR managers. For example, HQ
based HR manager is required to organize pay system in various nations having un-similar
currencies that may modify in comparative value to one another over period. An American
employee in Japan who accepts a $100,000 pay may unexpectedly discover the purchasing
power of that pay radically reduced if the Japanese yen strengthen in value comparative to the
US dollars.

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There can also be some complications while providing fringe welfares to host
organisation employees. For example, it is very usual in US to offer health insurance benefits
to staffs and its family, which generally includes children’s and spouse. However, in some
nations, the word “family” contain uncles, nephews, grandparents and nieces. Hence, it
makes complications that how an organisation profit plan deals with these diverse
explanations of family.
Recommendation
Human Resource best practices have been around for decades. However, due to dynamic
business environment, some new contexts needs to be added in relation with HR functions at
international level. It includes –
 A successful IHR manager must undertake the comparison between advantages and
disadvantages of differing expatriate and local staffing strategies in combination with
other significant management strategic decision makers. It will help in best strategy
development in relation with the organisation mission statement.
 To ensure optimum efficiency, organisation in the host country must align HR
strategy and subsequent HR activities with the best practices available in the industry
through undertaking the course of necessary training and coaching.
 In addition, they also come along with selecting hiring strategy so that to involve with
employee personal life in a better way. It will provide supportive environment to the
employee and his family while proving the best working experience to the employee.

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Conclusion
In the limelight of above discussion, it can be said that there are various differences in
the HR practices working at domestic and international level. The involvement of HRM
department in domestic setting is confined and limited whereas HR managers at international
level must gather information from employee personal life to effectively synchronize all
significant aspects in an effective way.
From future perspectives, it can be said that HR functions will be more complex at
international level and it will be challenging for the organisation to deal with it if they did not
proactively develop necessary strategies.

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References
Almond, P. (2011). The sub-national embeddedness of international HRM. Human
relations, 64(4), 531-551.
Bonache, J., Brewster, C., Suutari, V., & De Saa, P. (2010). Expatriation: Traditional
criticisms and international careers: Introducing the special issue. Thunderbird
International Business Review, 52(4), 263-274.
Greguras, G. J., & Diefendorff, J. M. (2009). Different fits satisfy different needs: Linking
person-environment fit to employee commitment and performance using self-
determination theory. Journal of applied psychology, 94(2), 465.
Shen, J., Chanda, A., D'netto, B., & Monga, M. (2009). Managing diversity through human
resource management: An international perspective and conceptual framework. The
International Journal of Human Resource Management, 20(2), 235-251.
Story, J. S., Barbuto Jr, J. E., Luthans, F., & Bovaird, J. A. (2014). Meeting the challenges of
effective international HRM: Analysis of the antecedents of global mindset. Human
Resource Management, 53(1), 131-155.
Teece, D. J. (2016). Dynamic capabilities and entrepreneurial management in large
organizations: Toward a theory of the (entrepreneurial) firm. European Economic
Review, 86(1), 202-216.
Zheng, C. (2013). Critiques and extension of strategic international human resource
management framework for dragon multinationals. Asia Pacific business
review, 19(1), 1-15.