Submitted By:: Sakshi Saxena Mba-Ii Sem

“The Roles and Requirement of Global Human
Resource Management in a Multinational

Organization”
SUBMITTED BY:
SAKSHI SAXENA
MBA-II SEM.
What is Global HRM?
 Global Human Resource Management is a process concerned

broadly with recruiting of persons, training them and putting
them to the most productive usage.
 It is also concerned with maintaining of congenial global/

international relations.
 It is the essential prerequisite for the success of the

international firm owing to its complexities.
Major Roles:
 Global HRM plays a significant role in Planning, Selection,

Training, employment, and evaluation of employees for global
operations.
 Global HR managers serve in an advisory or support role to line

managers by providing guidelines, searching, training, supporting
and evaluating employees.
 How a firm recruits, trains and places skilled personnels in its

world-wide value chains sets it apart from the competition.
 The combined knowledge, skills and experiences of employees are

distinctive and provide myriad advantages to the firm’s operations
worldwide.
Four Crucial Tasks of Global HRM:
 Staffing Policy
 Management Training and development
 Performance Appraisal
 Compensation Policy
 HRM activities, Structure and Policies should be congruent with the

firms strategy and its formal and informal structure and controls.
 These mentioned tasks are complicated by profound differences between

countries in labor markets, cultures, legal frames and economic systems.
Staffing Policy:
 What's Staffing Policy?
 Selecting individuals with requisite skills to do a particular job.
 Tool for developing and promoting corporate culture.
 Types of Staffing Policy:
 Ethnocentric
 Polycentric
 Geocentric
Ethnocentric Policy:
 Key Management Positions Filled by Parent-country nationals.

 Best suited to international business.
 Advantages:
 Overcomes lack of qualified managers in host nation.

 Unified culture.
 Helps transfer core competencies.
 Disadvantages:
 Produces resentment in host country.

 Can lead to cultural myopia.
Polycentric Policy:
 Host-country nationals manages subsidiaries.

 Parent company nationals hold key headquarter Positions.
 Best suited to multi-domestic business.
 Advantages:
 Alleviates cultural myopia.

 Inexpensive to implement.
 Helps transfer core competencies
 Disadvantages:
 Limits opportunities to gain experience of host country nationals outside their

own country.
 Can create gap between home and host country operations.
Geocentric Policy:
 Seek best people, regardless of nationality.

 Best suited to global and trans-national business
 Advantages:
 Enables the firms to make best use of its human resources.

 Equips executives to work in a number of cultures.
 Helps build strong unifying culture and informal management network.
 Disadvantages:
 National immigration policies may limit implementation.

 Expensive to implement due to training and relocation.
 Compensation structure can be a problem.
The Expatriate Problem:
 Expatriate: the citizen of one country working in another.
 Expatriate Failure: Premature return of the Expatriate manager to

his or her home country-
 Cost of failure is high: estimate= 3X the Expatriate’s annual salary

plus the cost of relocation (impacted by currency exchange rates and
assignment location.)
 Inpatriates: Expatriates who are citizens of a foreign country

working in the home country of their multinational employer.
Reasons for Expatriate Failure:
 Inability of spouse to adjust.
 Manager’s inability to adjust.
 Other family issues.
 Manager’s personal or emotional immaturity.
 Inability to cope up with larger overseas responsibilities.
 Difficulties with new environment and climate.
 Personal or emotional attachment to native place.
 Lack of technical competence.

Four Attributes that Predict Success:
 Self-orientation:
Possessing high self-esteem, self-confidence and mental well-being.
 Others- orientation:
Ability to develop relationships with the host country nationals Willingness to
communicate.
 Perceptual ability:
The ability to understand why people of other countries behave the way they
do.
Being nonjudgmental and flexible towards the management style.
 Cultural toughness:
Relationship between country of assignment and the expatriate’s adjustment to
it.
Training and Management Development:
 Training: Obtaining skills for a particular foreign Posting.
 Cultural training: seeks to foster an appreciation of the host country’s

culture.
Language training: can improve expatriate’s effectiveness, aids in relating

more easily to foreign culture, and fosters a better firm image.
 Practical training: ease into day-to-day life of the host country.
 Development: Broader concept involving developing manager’s skills over

his or her career with the firm.
 Several foreign postings over a number of years.
 Attend management education programs at regular intervals.

Management Development and Strategy:
 Development programs designed to increase the overall skill levels

of managers through.
 ongoing management education.
 Rotation of managers through a number of jobs within the firm to

give broad range of experiences.
 Used as a strategic tool to build a strong unifying culture and

informal management network.
 Above techniques support transnational and global strategies.

Performance Appraisal:
 Problems:
Unintentional bias-
 Host nation biased by cultural frame of reference.
 Home country biased by distance and lack of experience working
abroad.
 Expatriates managers believe that headquarters unfairly evaluate

and under-appreciate them.
 In a survey of personnel managers in U.S. multinationals, 56%

stated foreign assignment either detrimental or immaterial to one’s
career.
Guidelines to Performance Appraisal:
 More weight should be given to on-site manager’s evaluation as

they are able to recognize the soft variables.
Expatriates who worked in same location should assist home-office

manager with evaluation.
 If foreign on-site manager prepares an evaluation home-office

manager should be consulted before completion of formal evaluation.
Differences between Domestic and Global HRM:
 New HR responsibilities. Several activities that are not necessarily encountered

in the domestic HR include international taxation, international relocation and
orientation, administrative services for Expatriates, host government relations.
 The need for a broader, international perspective in compensation policy. At

any one time, the HR manager is responsible for a mix of PCNs, HCNs and TCNs
who are nationals of numerous countries. Establishing a fair and comparable
compensation scale, regardless of nationality, is one of the challenges in a global
enterprise.
 Greater involvement in the employees’ personal lives. The HR professionals

are concerned about welfare of the Expatriates and their families for such matters
as: Housing Arrangements, Health care, Schooling of children, safety and security
as well as proper compensation in view of higher cost of living around the globe/
world.
Contd…
 Managing the mix of Expatriates versus locals. Organization must be staffed in each
national location with personnel from the home country, the host country, or third
countries.
 The mix of staff depends upon several factors, including the international experience of
the firm, cost-of-living and availability of qualified local staff.
 Greater risk exposure, when employee productivity falls below acceptable levels or
Expatriates returns prematurely from an international assignment, the consequences are
even more pronounced at global front or in international business.
 Exposure to political risk and terrorism may require an increased compensation

package and security arrangements for the employee and his/her family.
 External influences of the government and national culture. External to the firm is the
broader context of the host country environment. Especially notable is the influence of
the government and national culture.
Employee Characteristics which Facilitates Firm’s
Effectiveness Globally:
 Technical competence.
 Self-reliance.
 Adoptability.
 Interpersonal skills.
 Leadership ability.
 Physical and emotional health.
 Spouse and dependents prepared for staying in the host country.

Cultural Shock:
 A leading cause of expatriate failure is cultural shock. The confusion and

anxiety, often akin to mental depression that can result from living in a foreign
culture for an extended period.
 Culture shock may affect family members as well.
 As many 1/3 assignments end prematurely due to expatriate failure. It is

particularly high among employees assigned to culturally dissimilar countries.
 Regular exercise, relaxation techniques or keeping a detailed journal of

experiences, will help employees deal with culture shock.
 It can also be reduced through advance preparation, training and by

developing a deep interest in the new surroundings.
Challenges of Global Human Resource Management:
 Recruiting, managing and retaining human resources at a firm with global

operations are especially challenging.
 Take the example of global organization of Siemens, the German MNC. In

2005, Siemens had 460,800 employees in some 190 countries. It employed
290,500 throughout Europe, 100, 600 in the Americas, 58,000 in the Asia-Pacific
region and 11,900 in Africa, the middle east and Russia.
 Like Siemens, firms such as Volkswagen, Hutchison Whampoa, Nestle, IBM,

Anglo American, Unilever, Wal-Mart, Deutsche Post, McDonald’s and Mittal
Steels have more than 150,000 employees working outside of their home
countries.
 Management grapples with a wide range of challenges in hiring and managing

workers within the distinctive cultural and legal frameworks that govern
employees practices around the world.
Charting Global Career of Employees:
 Successful MNCs give high-potential employees adequate opportunity to
gain experience not just in their home country but at HQ and in other
countries as well.
 This broadens the pool of global talent for managerial positions and
visibly shows top management’s commitment to global strategy.
 At Unilever, employees cannot advance very far in the firm without

substantial international experience. Managers are rotated through various
jobs and locations around the world, especially early in their careers.
 Unilever maintains a global talent pool- a searchable database of

employees profiling, their international skill set and potential for supporting
the firm’s global aspirations. HR managers search the database for the right
recruit regardless of where he/ she may be located.

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“The Roles and Requirement of Global Human

Resource Management in a Multinational

 Global Human Resource Management is a process concerned

 It is also concerned with maintaining of congenial global/

 It is the essential prerequisite for the success of the

 Global HRM plays a significant role in Planning, Selection,

 Global HR managers serve in an advisory or support role to line

 How a firm recruits, trains and places skilled personnels in its

 The combined knowledge, skills and experiences of employees are

 Management Training and development

 HRM activities, Structure and Policies should be congruent with the

 These mentioned tasks are complicated by profound differences between

 Selecting individuals with requisite skills to do a particular job.

 Tool for developing and promoting corporate culture.

 Types of Staffing Policy:

 Key Management Positions Filled by Parent-country nationals.

 Overcomes lack of qualified managers in host nation.

 Produces resentment in host country.

 Host-country nationals manages subsidiaries.

 Alleviates cultural myopia.

 Limits opportunities to gain experience of host country nationals outside their

 Seek best people, regardless of nationality.

 Enables the firms to make best use of its human resources.

 National immigration policies may limit implementation.

 Expatriate: the citizen of one country working in another.

 Expatriate Failure: Premature return of the Expatriate manager to

 Cost of failure is high: estimate= 3X the Expatriate’s annual salary

 Inpatriates: Expatriates who are citizens of a foreign country

 Inability of spouse to adjust.

 Manager’s inability to adjust.

 Other family issues.

 Manager’s personal or emotional immaturity.

 Inability to cope up with larger overseas responsibilities.

 Difficulties with new environment and climate.

 Personal or emotional attachment to native place.

 Lack of technical competence.

 Cultural training: seeks to foster an appreciation of the host country’s

Language training: can improve expatriate’s effectiveness, aids in relating

 Practical training: ease into day-to-day life of the host country.

 Development: Broader concept involving developing manager’s skills over

 Several foreign postings over a number of years.

 Attend management education programs at regular intervals.

 Development programs designed to increase the overall skill levels

 ongoing management education.

 Rotation of managers through a number of jobs within the firm to

 Used as a strategic tool to build a strong unifying culture and

 Above techniques support transnational and global strategies.

 Expatriates managers believe that headquarters unfairly evaluate

 In a survey of personnel managers in U.S. multinationals, 56%

 More weight should be given to on-site manager’s evaluation as

Expatriates who worked in same location should assist home-office

 If foreign on-site manager prepares an evaluation home-office

 New HR responsibilities. Several activities that are not necessarily encountered

 The need for a broader, international perspective in compensation policy. At

 Greater involvement in the employees’ personal lives. The HR professionals

 Exposure to political risk and terrorism may require an increased compensation

 Physical and emotional health.

 Spouse and dependents prepared for staying in the host country.

 A leading cause of expatriate failure is cultural shock. The confusion and