Analysis of Human Resource Management in Multinational Corporations

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Running Head: HRM
Analysis of Human Resources Managment
UNIVERSITY NAME:
STUDENT NAME:
DATE:

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Contents
Introduction:....................................................................................................................................2
HUMAN RESOURCE MANAGEMENT AND INTERNATIONAL HUMAN RESOURCE
MANAGEMENT............................................................................................................................2
DIFFERENCE BETWEEN HUMAN RESOURCE MANAGEMENT AND
INTERNATIONAL HUMAN RESOURCE MANAGEMENT:................................................2
Parent Country National:.............................................................................................................3
Host Country National:................................................................................................................3
Third Country National:...............................................................................................................3
SELECTION AND RECRUITMENT, PERFORMANCE MANAGEMENT AND EMPLOYEE
RELATION IN INTERNATIONAL CONTEXT...........................................................................4
Staffing Policies:..........................................................................................................................5
Recruitment and Selection:..........................................................................................................5
Cost of Ineffective Selection and recruitment:............................................................................5
Turnover:..................................................................................................................................5
Money:......................................................................................................................................5
Morale:.....................................................................................................................................6
Confidence:..............................................................................................................................6
Performance Management...........................................................................................................6
LEARNING AND DEVELOPMENT IN MNCs............................................................................6

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There are four categories of multinational corporations:.............................................................6
Training of Global Managers:......................................................................................................7
Characteristics of Global Mindset:..............................................................................................7
EXPATRIATION............................................................................................................................8
Factors affecting Expats' selection...............................................................................................9
Technical ability.......................................................................................................................9
Cross-cultural suitability..........................................................................................................9
Family requirements...............................................................................................................10
Conclusion:....................................................................................................................................10
References:....................................................................................................................................12

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Introduction:
The assignment will discuss about human resources management and international human
resources management concepts. Human resources management deals with recruiting, selecting,
appointing, training and development and rating the employees in terms of their performance.
Human resource management does all this thing in local level while international human
resources management works on a global level, Apart from this in this assignment we also
discussed performance management and Expatriation, below we have explained everything
about human resources management, staffing, and recruitment process and the difference
between HRM and IHRM, etc.
Human resource management and international human resource management
Human resource management works in the area of recruiting, selecting, appointing, orienting,
imparting training, appreciating and performance evaluation , deciding compensation, motivating
them to exert their complete potential and providing a safe and healthy working environment to
them. As opposed to domestic human resource management (HRM), International Human
resource management works on a global level. Although performing all the human resource
management task, they perform them on the global level. International Human resource
management is very much helpful in maintain the employees at a global level without nay
hassles (Nur Halifah, 2019).

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Difference between human resource management and international human resource
management
International Human Resource
Management
Human Resource Management
It deals with a broader perspective. It deals with the narrower perspective that
is it looks only at the domestic country's
HR.
Has High Factors of risks such as terrorism,
crisis, etc.
Doesn't have as many risks as compared to
the international market
Has a heterogeneous work environment in
which people of different cultural, ethnic
and racial background work together
Doesn't have as many risks as compared to
the international market
The attitude of seniors management differs
as it deals globally.
Attitude is generally the same with every
employee.
It considers global laws prevailing in the
world.
It usually follows the law of the country
the headquarters is situated in.
It has the complexity in handling people of
the different country.
It is relatively easy as everyone belongs to
a homogeneous background.

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Parent Country National:
Parent Country national also known as Expatriates are the people of the company's parent
nationality. When these employees work for long term (such as 4-5 years) in the parent country
they run the risk of being considered as "de facto" employees of the company in the host country
(Du Plessis, Venter & Prabhudev, 2016).
Host Country National:
These people are the one employed by the company are citizens of country in which the
subsidiaries of the company is present.
Third Country National:
These people belong to another country which is neither the parent nor the host country.
IHRM creates local appeal without reducing or compromising global identities, it generates
global awareness among managers globally about cross-cultural sensitivity and hiring staff
across geographic boundaries. IHRM deals with not only organizational issues but also
heterogeneity issues and cultural differences to meet organizational goals, they train about
sensitivity and culture of the host countries. Whereas, Domestic HRM only deals with normal
everyday homogeneous problems in a homogeneous environment. Many external factors affect
the position of the company in an international environment, more involvement in employees life
happen. Globalization has forced HRM to have an international outlook, they have to utilize both
corporate office and foreign plants. IHRM involves complex dynamics as it involves people of
different backgrounds and habitat, they also have to pay attention to the employee and their

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family's habitation. They have to gauge the culture and understand the backdrops and mind-sets
of the people so as to not hurt anyone's feelings (Nur Halifah, Uldini & Usman, 2019).
Selection and recruitment, performance management and employee relation in
international context
It is very important to hire our workforce from different backgrounds and countries because
when there is a diversity among the workforce, creative talent increases in the organisation.
When there is talented pool in the organisation, it is easy to face the rival companies.
The problems that arise while staffing at an international base is as follows:
 Appropriate compensation for the staff: The staff must be appropriately compensated to
be kept satisfied whether they are locals or expatriates.
 Taxation Laws: Taxation Laws are really complicated so if the parent company taxation
laws are difficult to understand then the international laws are almost impossible.
Professional help should be hired to keep up.
 Intellectual Property Protection.
 Labour laws, agreements, and contracts.
Staffing Policies:
 Ethnocentric: The Key management posts are filled with PCNs.
 Polycentric: The subsidiaries are managed by the HCNs while the important headquarter
positions are held by the PCNs.
 Geocentric: The main position holder is the best individual who is great at his work

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regardless of their nationality.
 Region centric: Staffing policies vary to suit geographical areas, it is a stepping stone for
companies to reach the Geocentric approach.
The orientation of the firm is the introduction of the firm to the new employees making them
understand the policies, the mottos, the needs and policies of the firm..
Recruitment and Selection:
Recruitment is the process of identifying the candidates and help them to apply for the job.
Selecting is choosing the candidates to a particular position by the help of various processes. It
includes a number of tests and it may vary depending upon the companies. In short, it is the way
to short list the applicants and find out the suitable personnel (Nur Halifah, 2019).
Cost of Ineffective Selection and recruitment:
Turnover:
If an unsuitable candidate for the position is hired, it typically results in loss of money and time.
additional recruiting and training costs are involved in the process.
Money:
If there is a requirement to replace that particular staff position the company may need to spend
more than hundred percent of the entire salary.
Confidence:
Good employees may lose confidence in their management team if there is wrong hiring policies
prevalent among the requirement team.

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Performance Management and Employee Relationship
Performance management is the only way to help the employees notice their possibilities. It is
also the only way to sustain the employees of the organisation for a long period. Because the
workforce will be in place only when their work is appreciated in a right way.
Employment relationship should be much better when there is concept of remuneration for the
work. The individual employment relationship is a legal relationship between the employer and
employee and what is to be expected from the employee on an individual level as opposed to the
collective employment relationship in which a group of people are in legal relationship with the
company and have to fulfil a specific goal. (Johan de Jong, 2011).
Learning and development in MNCs
All companies will be getting its revenue from global operations and it is usual because today the
globalisation has taken the control. Because of the power of the technology to connect the people
of the globe with the help of a web, the world has shrunken its size (Al-Kassem, 2017).
Usually a multinational company will have many branches in other countries and a headquarters
in the parent country. Some times, they will have many mina offices equivalent to the head
quarters for administrative convenience. But manufacturing unit is placed in any country
depending upon the availability of the workforce, raw material etc. sometimes the multinational
company will be having a specific research and development unit in a different country while
operating its headquarters from a different location. In other cases, a corporate company will be
buying its rival companies in larger markets and this process of accommodation and
centralisation will help them to maximize the profits. Anyway there is no way to escape the
effects of globalisation on the market present now, people really love to buy product from a

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global distributor and in order to face this competition there is a heavy need for the companies to
stay global.
Training of Global Managers:
Sharing is a great concept while dealing with the training aspects of the managers. Because if the
company is having a global presence then sharing and proper communication will help the talent
pool to understand each other, in addition this information sharing will open new doors among
the managers. Therefore, there is a greater need to encourage the sharing of information during
training sessions. Sometimes there may be prejudices among the managers and sharing the
known information will help the managers to come out of these kind of myths and beliefs.
Training sessions should be conducted to the employees when they are in their supervisor roles.
Because when they are in the top-level management it is hard to attend the tarring sessions
without fail because of their work pressures. In addition, there is no need to attend the training
session
It is good to starts the global training for the employee in their mid term of the service. Because
it is the right time to teach them about various aspects of the companies’ business operations.
After a certain period, they lose interest (Wang et al. 2016).
Encouraging the employee of the company to take up global responsibilities will help them to
exert their work potential in a different manner.They must also be able to deal with employees
who are in their 50's and 40's as well as really young employees.
Characteristics of Global Mind-set:
1. Realizing you're on cultural values: One must be able to understand their own cultural values
and biases, they must be able to let go of them in order to fully accumulate themselves with

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others.
2. Knowing your own personality traits: One must be able to know their own personality traits
and must be able to evaluate themselves on their basis to know their strengths and weaknesses.
3. It is good to mode of conduct in different countries because they are locally characterised by
different set of rules (Al-Kassem, 2017).
Expatriation
When a company is having many branches all over the world then it is impossible for it to
maintain its employees in a single place. They may need to travel to different destinations. Often
designers do not have the opportunity to visit various manufacturing units but administrative
employees will be in a need to swatch their work places at any time. In this situation, they may
need the help of expatriate training that helps the personnel in understanding about the new work
location.
Many multinational companies (MNCs) use expatriate assignments into order to develop their
top-level employees into leaders. The companies help their managers to travel different
subsidiaries in order to gain a diversified knowledge. (Dietiker, 2013). In order to face the new
situation while the work location is changing, the training sessions is very important. Because
without the help of the training from our previous location it is hard to figure out what is
happening in the new location. Sometimes it may seem like everyone is working in a different
manner. This creates lack of confidence in the employee that is not good for the organization.
The company needs to exert complete work potential from every employee for a success. When
they are afraid of the new customs of the work location, it will make them to stay in solitude.
Therefore, there will be no communication between other employee in the new location and this

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will affect the productivity of the employee. If the organization needs to ensure that, the worker
is safe in the new working location then spending a little bit of money on the employee is
compulsory. It is good to spend at least a week for the training sessions. At the last day of the
session, the trainer should ensure that the employee is completely aware of the new places and
the people working there. Even the trainee should be well versed in the rules and regulations of
the work place along with a better undertraining to the customs and traditions present there.
They send them to foreign subsidiaries for the following reasons:
1. To understand the nature of work and culture of a country: They send expatriates to get a
better understanding of the nature of a particular country and its citizens.
2. Lack of suitable HCNs: Sometimes they are unable to find HCNs who are suitable to lead
certain operations so they have to send expatriate who will be able to lead all those operations.
3. Ethnocentric Companies: The companies that are based on ethnocentric approach. They send
their expats to run or manage the foreign subsidiaries, as they are unwilling to hand over the
command to HCNs.
4. Development of Managers through Global Environment: They want to develop their managers
into global managers so they send them to different countries to learn and work with people of
that culture in order to understand the vagaries of the market.
5. Developing companies: The companies send them during the project development period. It
helps them to have greater control and monitoring the work.