International Human Resource Management: A Comparative Analysis

This report provides a comprehensive analysis of International Human Resource Management (IHRM) in comparison to domestic HRM practices. It begins by defining HRM and highlighting the shift towards globalization, emphasizing the importance of managing human resources effectively in international markets. The report then explores the significant differences between domestic and international HRM, focusing on the increased complexity, the influence of cultural environments, and the role of senior management attitudes. Key factors such as expatriate management, heterogeneous functioning, and the impact of cultural diversity on recruitment, training, and performance appraisals are discussed in detail. The report underscores the challenges of IHRM, including the need to adapt to different international regulations, manage diverse workforces, and address the complexities of expatriate management. The report stresses the importance of considering cultural differences and external influences to ensure successful IHRM practices and achieve organizational goals. It concludes by highlighting the crucial role of HRM in maintaining service quality and brand aspects in the global market.

INTERNATIONAL HUMAN
RESOURCE
MANAGEMENT

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................2
Domestic and international HRM....................................................................................................2
Factors diminishing or accentuating difference between HRM practices.......................................3
Complexity..................................................................................................................................3
Cultural environment...................................................................................................................6
Attitude of HR or senior management to international operations..............................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Human resource management (HRM) is defined as the approach to manage employees or
human resources of the organisation (Brewster and et.al., 2016). It includes various activities
such as recruitment, selection, induction, motivation, compensations and other strategies to
maintain good relations between employees and employers. With globalisation and improved
digital technologies majority of the organisations in hospitality industry are going international
with aim to maximise their market share. With increasing demand of such brands it has also
become vital for the companies to manage their human resources effectively so that service
quality and their brand aspects can be maintained.
However there exist various considerable differences between HRM practices as
domestic as well as at international level. For ensuring the success in international market
companies must evaluate the factors influencing their HRM practices. The report will discuss the
importance and key differences between domestic and international HR management. It will also
provide a critical evaluation of different factors which can influence the HRM practices in local
or international markets.
Domestic and international HRM
HRM emphasises upon strategic and effective use of human resources of the
organisation. As corporate strategy HRM helps organisation to gain competitive advantage so
that companies can enhance their performance and potential of employees can be explored fully.
In globalisation context there is huge difference between operations at local and global level
which causes difference between HRM practices at international level as compare to domestic
levels (Reiche and et.al., 2016). The key consideration which brings this difference is that for
organisations such as hotel Hilton, KFC, McDonald and other organisations or hospitality it is
required to manage their human resources and operational activities as per international policies.
The functions of HR department also seem to diversify with the internationalisation of
the organisational services. For example at domestic level organisations like Thomas Cook may
only provide training or health care services to their employees. However with the service
expansion at international level companies may require individuals who will travel from part of

the world to other. In such situations along with the compensatory benefits to employees,
organisation also gives facilities to take care of the families or children of such employees
(Reiche, Harzing and Tenzer, 2018). This kind of measures help organisation to assist employees
so that they can remain focused towards work while travelling from one place to other.
In addition to these operational and functional aspects it has been also observed that
international HRM is more risky than domestic one because in international context external
forces are either uncontrollable or not known to the organisation fully. In international HRM
heterogeneous functioning is an integral element of the HR practices. It not only explores or
utilises the skills or capabilities of employees but also involves personal life of employees,
greater emphasis on training as well as more controlling of external influences. IHRM also
consist of employees from various nations and thus is also influenced by huge differences and
possibilities of conflicts among different individuals (van Harten and et.al., 2017). In domestic
environment it may not be necessary for the organisations to take the consideration of relocation,
international taxes, and orientation of language translation needs. On the other hand these
elements are essential and integral part of the international HRM practices.
Factors diminishing or accentuating difference between HRM practices
Complexity
One of the key factors which accentuate the domestic and IHR is the nature of
complexity involved at both the levels. In the international market there are more severe
consequences and risks of failing in terms of financial as well as human resources. For
international corporations failure of HR functions may prove to be more risky and devastating.
For instance when companies such as hotel Hilton has management plan for domestic level only
then their training sessions, operational strategies, recruitment procedures as well as motivational
techniques depends upon domestic environments. In international environment the costing and
methods of these HR functions may vary drastically.
Since international regulations vary differently it is challenging and extremely complex
for an organisation to change its policies and functioning differently in different nations
(Dickmann, Brewster and Sparrow, 2016). For instance Hilton hotel pay different monetary

benefits to its employees in domestic environment as well as in international environment. Along
with the complexity it also increases cost burden on organisation. In international market the
employee management cost is usually three times higher than that in domestic country. In
domestic market organisations like Hilton hotel used to affect by only some particular types of
external forces like terror attacks or political risks. However with internationalisation the
economic stability of other countries, their integration of multinational organisations is also an
important factor which affects compensation packages, organisational regulations, work policies
and other considerations of human resource management (Budhwar, 2016).
Another important factor which increases the complexity of IHRM is expatriate
management. At domestic levels organisation may not require such kind of activities and HRM
functions are limited to only some of the functions like recruitment, talent and performance
management and training of the employees. However as organisation work internationally it
becomes necessary for their HR department to expatriate their employees. Expatriates are
refereed as the employee of an organisation who is transferred or located into foreign region,
apart from their home destination where international operations of firms are operated. For
example as Hilton hotel works in US, UK as well as in Asian regions like India. Thus for
effective operation of the activities organisation can locate some of its top management
employees from US or UK to India so that they makes operations of organization in Indian
market successfully implemented.
Thus by using expatriate management organisation management transit values of their
organisational culture to new market and prepare their employees with international skills. This
additional aspect makes IHRM too complex from the management and functional perspective
(Sekiguchi, Froese and Iguchi, 2016). Execution of functional activities is also challenging task
for the companies in international market because in such markets HRM activities increases
multi fold. In addition to the expatriation management it is also the responsibility of HR
department of the organisation to conduct functions such as cross country relocation,
international tax policies, transnational labour legislation and resource management in diverse
locations.
Another complexity aspect which increases the gap between IHRM and domestic HRM is
increased complexity in terms of functional heterogeneity and increased involvement of personal

lives of individual employees(Al Ariss and Sidani, 2016). All functions of HRM must be carried
out with heterogeneity so that all stakeholders are satisfied including government of host
country. In domestic environment hotels are well aware of the training needs and other resources
for the organisation. Strong positioning in the local market, support from the government and
customers, well known and controllable supply chain also makes it an easy task for the HR
department to meet the needs of resource management. Contrary to this in cross cultural setting,
companies like Hilton may not find suitable environment (Wood and et.al., 2018). They may
face less cooperation or increased cost of management and greater competition from the other
domestic organisations of host country. This makes resource management a critical challenge for
the HR department at international level.
With domestic level companies have limited or negligible liability towards the personal
life of employees. However in international management it acts as crucial part of the expatriate’s
management. It acts as another implication of complex nature of IHRM. For better expatriate
management organisations also relocate the families of employees across the countries so that
productive outcomes from employees can be assured. Thus along with the employee, their
families must also understand the cross cultural environment so that overseas assignments can be
completed without any distraction or barriers from the personal life of employee. This result in
great complexity involved in HRM practices at international level because employee motivation
and resource management becomes too important and huge.
It is also the responsibility of human resource department of the organisation to utilise
resources in effective and cost efficient way. It helps to increase productivity of employees and
to meet the financial aspect of the organisation (Sposato and Rumens, 2018). In international
HRM organisations are also responsible to relocate families of their employees and thus it
includes substantially high cost involve in training, travelling and other expenses for improving
performance in international assignments. It builds a wide gap between HRM practices at both
levels and companies are required to develop its HRM strategies differently at international level.
In foreign countries the health and security risk of the employees and their families is also
increased in multi folds due to factors like climate variations, wars, terrorism, epidemics and
social crime rates. It only enhances the difference between HRM practices differently in different
markets.

Cultural environment
Hilton hotel operates in different parts of the world and thus is required to manage
employees which meet its operational needs. Cultural environment is assumed to be one of the
crucial factors which make international HRM different. As broad perspective international
HRM focuses on three different types of employees which belong to host country, third country
nationals and parent country (Ayentimi, Burgess and Brown, 2018). Thus for Hilton it is difficult
task to manage workforce from such diversified cultures, tradition, religion and language. For
example in domestic HRM practices organisation recruit and select human resources from parent
company. Thus their management in domestic environment and well known regulations is quite
easy.
However with organisations such as Thomas Cook or other event management
companies which also require their employees to conduct foreign tours for work or operational
purpose there is need to deal with concepts of IHRM (international HRM) instead of domestic
HRM. To provide satisfactory services to customers in different countries or at international
level HR managers are required to train and develop their employees so that culture and
traditions of alien country can be understood and integrated with services. The employees of
Hilton hotel or Thomas Cook travel will not be able to provide services to customers if they will
not understand the cultural and religious aspect of the country.
Cultural differences encourage organisations to manage cultural differences which have
greater impact upon international HRM. With internationalisation Hilton hotel is not only
providing services to people from different culture but is also employing people from various
cultures. Thus members of organisational teams may possess different attitude and values
towards work and personal life (Tung, 2016). For instance in Japanese culture Hotel Hilton may
require its employees to be highly polite while in US organisation require employees who are
obsessed with the work and goal achievement. Similarly in Asian regions like China and India
employees of Hilton are expected to respect the traditional and religious values of the region.
These considerations are vital for organisation so that targeted customers can make themselves
connected with the organisation.
If employees will not understand the cultural diversity then it will not be possible for
them to provide services to the diversified customer segments. Different nationalities have

different stereotypes which affect the working of employees and thus ultimately affect the HR
practices and functioning such as recruitment or performance appraisals. However it also
depends upon the organisation to standardise their HR policies or to customise them as per the
requirements at different domestic levels. Though localisation may seems to be complex and
costly but in long term it gives sustainable and more productive results. In international market
there is greater control of the external influence on HR functions.
Apart from the political, financial, technological and competitive factor culture is
considered as an essential ingredient in HRM. While working in domestic nations Hilton hotel
and similar organisations does not have to make many efforts to understand the cultural aspect as
they are well aware of it and are grown in the same culture from years. However working in
international market is completely different as organisations are required to first understand the
culture of their international market (Fan and et.al., 2019). On the basis of this understanding
companies formulate or modify their HR strategies. HR managers at international level are
required to consider the cultural variations reflected in terms of expectations, behaviour, values,
communication styles and negotiations. It not only affects any single HR function but also
regulate all dimensions of HRM activities in terms of cost, complexity and managerial aspect.
The motivation techniques as well as training programs are also designed in accordance to the
cultural elements of the operating country. The culture of organisation may vary in international
boundaries depending upon the cultural values of their employees in different nation. This aspect
is vital as it directly affect the customer engagement and success of organisation in foreign
environment.
Attitude of HR or senior management to international operations
The attitude of HR managers or senior authorities makes it further complicated and
challenging task to manage human resources at international level. HR managers of Hilton hotel
when operates in domestic market holds a different perspective in terms of scope and extent of
activities. In domestic practices for most of the assignments organisation expect that employees
are well aware of the needs of customer requirements and external forces (Lee, Lin and Huang,
2017). Thus training needs are lower and managers have high expectations of efficiency. On the
other hand for international context event regular HR activities like recruitment and training may
prove to be highly complicated and resource and time involving.

Thus for international assignments senior management tend to design and implement
more effective training frameworks for their employees. These training programs not only
involve work or operational related aspect but also include methods so that employees can
prepare themselves in adjusting or understanding themselves in completely new or unknown
business environment. Thus managers in international practices are not only liable for the work
related operations but are also expected to manage other support activities like visa formalities,
training and resource management at greater level so that overseas job location can be made
productive and efficient (Trivikram, 2017). In international HRM practices it is also necessary
for managers to have broader perspective for successful HR management. This attitude of
managers can also affect the success of organisation and HRM within company. Internationally
managers have to undergo various analyses and critical factors which influence the decision
making. These factors have limited effect or interference at domestic level. For instance at
domestic level managers may have lot of choices for the recruitments and employee legislations
may also seem familiar and easy to them. However internationally, companies must have
suitable knowledge of international packages and their determinants like cost of living and fringe
benefits.
In domestic HRM practices managers used to have no involvement in personal life of
employee because they have concern with only productivity of the employee. At domestic level
managers have strong belief that to establish balance between personal and professional life is
responsibility or choice of an individual only. Thus HR department does not have any liability or
responsibility towards it. This attitude is also the result of the fact that since employees is living
in the domestic environment there are no such additional complexities in personal life which
needs to be managed by senior management. Contrary to this when working with international
work force employees also required emotional and psychological support to deliver efficient
outcomes. Thus managers also focus on the personal life of employee and other factors which
can influence the productivity of their talented workforce (Ayentimi, Burgess and Brown, 2018).
Due to this reason HR managers strictly show greater involvement in lives of employees so that
they can make themselves comfortable in unfamiliar international environment. Employee may
also not aware of the legal practices of the host country, culture aspects and health care facilities.

Thus HR managers at international level also focus on broader aspects including health
and well being of their employee, personal and emotional requirements along with the
availability of organisational resources. It has been also observed that at domestic level HR
practices and authorities seems to be more confident. Their familiarly to domestic market,
customer segment as well as competitors, makes organisation quite confident and less worried
about HR practice efficiency. However in IHRM, managers may not take HR issues with so light
or flexible mood. The failure to HR practices or regulations in the international market can cause
huge damage to brand value of organisation as well legal troubles. Thus with IHRM managers
always try to ensure that there are no such inefficiencies at international level which creates any
conflicts or controversies.
As a result international HR managers are more conscious and active towards their HR
policies because a slight loop hole can create adverse publicity at international level which is
harmful for the growth of organisation. This difference in the perspective of managers at both
domestic and international perspective is one of the crucial elements which distinguish both the
practices (Ayentimi, Burgess and Brown, 2018). However some organisations like KFC which
follow standardisation techniques used to give same importance to the HR practices but still
there exist a difference in perspective of HR managers. International operations involve greater
risk, significance and operations and thus related HR activities are also give more importance in
the organisation for long term success.
CONCLUSION
It can be concluded from the above discussion that HRM practices play crucial role in the
success of an organisation. Thus while exploring international markets it is mandatory for the
organisations to understand the need of variations in HRM so that they can deliver quality
services to the customers. The report has discussed the impact of culture, complexity and
perspective of HRM authorities towards the diverse international and local needs of their
customers and other stakeholders. It can also be concluded that for strong positioning in the
competitive market it is essential that companies must emphasis on improving productivity and
efficiency of their work force. This is not possible without appropriate HRM strategies which
may differ from market to other. It can also be concluded that integration of these differentiating

elements can enhance the HRM strategies of organisation and can also lead to long term success
in international market.

REFERENCES
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retrospective and prospective analysis of international human resource management
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Wood, G. and et.al., 2018. International Journal of Human Resource Management (IJHRM)
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