International HRM: Role and Distinguishing Activities
Global human resources managers are responsible for recruitment of new employees, training, professional development, benefits and legal compliance just like any other HR team, but they do so on a global scale.
Recruitment and Onboarding Process
Attracting, hiring and retaining a skilled workforce is perhaps the most basic of the human resources functions. There are several elements to this task including developing a job description, interviewing candidates, making offers and negotiating salaries and benefits. Although a complex task for any business, it is made more complex in the international arena due to differences in educational systems from one country to the next and, of course, difference in languages.
Companies that recognize the value of their people place a significant amount of stock in the recruitment function of HR, no matter where in the world hiring takes place. There is good reason for this – having a solid team of employees can raise the company’s profile, help it to achieve profitability and keep it running effectively and efficiently.
Even when an organization hires skilled employees, there is normally some level of on-the-job training that the human resources department is responsible for providing. This is because every organization performs tasks in a slightly different way. One company might use computer software differently from another, or it may have a different timekeeping method. Whatever the specific processes of the organization, human resources has a main function in providing this training to the staff.
The training function is amplified when the organization is running global operations in a number of different locations. Multiple sessions in numerous international locations may be called for, although online webinars and training tools can sometimes effectively reach anywhere on the globe. Having streamlined processes across all locations makes communication and the sharing of resources a much more manageable task.
Continuing Professional Development
Closely related to training is HR’s function in professional development. But whereas training needs are centered around the organization’s processes and procedures, professional development is about providing employees with opportunities for growth and education on an individual basis. Development often entails moving an employee between departments so that he or she gains skills in multiple areas. For an international operation, this may also mean moving employees across boundaries.
Many human resource departments also offer professional development opportunities to their employees by sponsoring them to visit conferences, external skills training days or trade shows. The result is a win-win: it helps the employee feel like she is a vital and cared-for part of the team and the organization benefits from the employee’s added skill set and motivation.
Benefits and Compensation
While the management of benefits and compensation is a given for human resources, the globalization of companies in the twenty-first century has meant that HR must now adapt to new ways of providing benefits to an organization’s employees. Non-traditional benefits such as flexible working hours, paternity leave, extended vacation time and telecommuting are ways to motivate existing employees and to attract and retain new skilled employees. Balancing compensation and benefits for the organization’s workforce is an important HR function because it requires a sensitivity to the wants and needs of a diverse group of people.
Ensuring Legal Compliance
The final function of human resource management is perhaps the least glamorous but arguably of utmost importance. Ensuring legal compliance with labor and tax law is a vital part of ensuring the organization’s continued existence. The federal government as well as the state and local government where the business operates impose mandates on companies regarding the working hours of employees, tax allowances, required break times and working hours, minimum wage amounts and policies on discrimination.
This task becomes very much more complex when different laws in different countries need to be taken into account as well. Being aware of these laws and policies and working to keep the organization completely legal at all times is an essential role of human resources.
Staffing refers to the process of determining the organization’s current and future human resource requirements to meet the organizational goals and taking appropriate steps so as to fulfil those requirements. The process involves identifying the human resource requirement of an organization, and recruitment, selection, and placement of human resources.
Human resource planning refers to the process of forecasting supply and demand for the organization and the action plan to meet its human resource requirements. It is the decision-making process as to what positions a firm has to fill and how to fill them and places optimally the human resource systems in the organization.
2. Recruitment and Selection:
‘Recruitment’ refers to the process by which an organization attracts the most competent people to apply for its job openings whereas ‘selection’ refers to the process by which organizations fill their vacant positions.
The process of recruitment and selection varies widely among countries. For instance, extensive formal testing and screening techniques are often employed in Asian countries where people are highly test-oriented and comfortable with formal tests.
Testing is often discouraged in the US due to its negative impact on equal employment opportunities and affirmative action efforts. Europeans test considerably more than Americans but not as much as Asians. Rigorous staffing practices such as formal testing are used even less in Canada where equal employment and human rights legislation is even more restrictive compared to the US.
3. Managing Expatriates:
People working out of their home countries, also known as expatriates, form an integral part of a firm’s international staffing strategy, especially for higher management positions. Beside identifying and recruiting the right personnel with desired skills for international assignments, it is also extremely important to provide them with a conducive environment to get their optimum output.
Expatriates also contribute significantly to international remittances. Worldwide remittances are estimated to have exceeded US$318 billion in 2007, of which developing countries received US$240 million.
4. Training and Development:
‘Training’ refers to the process by which employees acquire skills, knowledge, and abilities to perform both their current and future assignments in the organization. Training aims at altering behaviour, attitude, knowledge, and skills of personnel so as to increase the performance of employees.
The need for imparting pre-departure training to spouse and children, besides the employee, is increasingly recognized by MNEs. Pre-departure training is aimed at smooth transition of expatriates and their families to a foreign location.
5. Performance Management:
‘Performance management’ is a comprehensive term that refers to the process that enables a firm to evaluate the performance of its personnel against pre-defined parameters for their consistent improvements so as to achieve organizational goals. The system used to formally assess and measure employees’ work performance is termed as performance appraisal.
Evaluation of an employee’s performance is required for assessing employee’s contribution to achieve organizational goals, facilitate administrative decisions related to compensation, promotion or transfer, etc.
Determination of the evaluation criteria, the choice of the evaluators, and the delivery of timely and culturally sensitive feedback constitute the principal challenges related to the performance evaluation of expatriates.
In the international context, performance appraisal becomes more complex due to possible conflict between the objectives of an MNE’s headquarters and subsidiaries, non-comparability of information between the subsidiaries, the volatility of international markets, and differences in levels of market maturity.
Therefore, international HR managers need to reconcile the differences between the need for universal appraisal standards and the specific objectives of the local subsidiaries, and to recognize that more time may be needed to achieve results in markets, which enjoy little supporting infrastructure from the parent company.
MNEs need to evolve systematic processes for evaluation of employees from different countries who work in different environments. Developing consistent performance evaluation methods often conflicts with the diverse cultural factors of the host countries.
For instance, it may be appropriate in a country with low-context culture like the US to precisely point out an employee’s shortcomings directly whereas public criticism in high-context cultures, such as China, Japan, and to some extent, India may prove counterproductive; in such cultures the opportunity to save one’s face is extremely important.
Compensation refers to the financial remuneration that employees receive in exchange of their services rendered to the organization. It includes wages, salaries, pay rise, and other monetary issues.
A good compensation system should be designed within the regulatory framework of the country of operation of an MNE and should be able to attract and retain the best available talent. Besides, it should be equitable among employees and motivate them to achieve high levels of performance.