Main Functions of Global Human Resource

Management
Globalization involves the process of integrating a
business's operations and strategies across a wide
array of cultures, products and ideas.

• It heavily impacts on the role of human resource

managers.

• Once concerned with local issues, HR must now

consider the effects of workforce diversity, legal
restrictions and the interdependence between training
and professional development on the organization.
 Global Human Resource Management

GHR Managers are responsible for:

1. Recruitment of new employees,

2. Training,
3. Professional development,
4. Benefits and
5. Legal compliance
1. Recruitment and Onboarding Process

• Attracting, hiring and retaining a skilled workforce - most basic of the human
resources functions.
• Elements to this task include: a) developing a job description, b) interviewing
candidates, c) making offers and d) negotiating salaries and benefits.

It is made more complex in the international arena due to differences in

educational systems from one country to the next and, 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. Having a solid team of employees can raise the company's profile,
help achieve profitability and keep it running effectively and efficiently.
2. On-the-Job Training

• 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.
3. 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.
4. 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.
5. Ensuring Legal Compliance

Least glamorous but arguably of utmost importance. Ensuring legal

compliance with labor and tax law is a vital part to ensure 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.
 Functions of the International Manager

• Global competition has forced businesses to change how they manage at

home and abroad.
• The increasing rate of change, technological advances, shorter product life
cycles, and high‐speed communications are all factors that contribute to
these changes.
• The new management approach focuses on establishing a new
communication system that features a high level of employee involvement.
• Organizational structures must also be flexible enough to change with
changing market conditions.
• Ongoing staff development programs and design‐control procedures,
which are understandable and acceptable, are outcomes from this new
approach.
• Management values are changing, and managers must now
have a vision and be able to communicate the vision to
everyone in the firm.

• Although the international manager performs the same basic

functions as the domestic manager, he must adjust to more
variables and environments.

• Therefore, each of the five basic management functions must

change when operating in a foreign market.
 Planning

• The first stage of international planning is to decide how to do

business globally: whether to export, to enter into licensing
agreements or joint ventures, or to operate as a multinational
corporation with facilities in a foreign country.

• To develop forecasts, goals, and plans for international activities, the

manager must monitor environments very closely.

• Key factors include political instability, currency instability, competition

from governments, pressures from governments, patent and
trademark protection, and intense competition.
 Organizing

• International firms should be sure that their plans fit the culture of
the host country.
• Typically, U.S. firms feel that long‐term plans should be three to
five years in length; but in some cultures, this time period is too
short.
• Many countries must plan with the assistance of governmental
agencies and working through bureaucratic structures, policies,
and procedures is often time‐consuming.
• International businesses must be organized so that they can adapt to
cultural and environmental differences.
• No longer can organizations just put “carbon copies” or clones of
themselves in foreign countries.
• An international firm must be organized so that it can be responsive to
foreign customers, employees, and suppliers.
• An entire firm may even be organized as one giant worldwide
company that has several divisions.
• Above all, the new organization must establish a very open
communication system where problems, ideas, and grievances can
quickly be heard and addressed at all levels of management.
• Without this, employees will not get involved, and their insights and
ideas are crucial to the success of the business.
• As an organization extends its operations internationally, it needs to
adapt its structure. When the organization increases its international
focus, it goes through the following three phases of structural change:

1. Pre‐international stage
 Companies with a product or service that incorporates the
latest technology, is unique, or is superior may consider
themselves ready for the international arena.
 The first strategy used to introduce a product to a foreign
market is to find a way to export the product.
 At this phase, the firm adds an export manager as part of the
marketing department and finds foreign partners.
2. International division stage
 Pressure may mount through the enforcement of host country
laws, trade restrictions, and competition, placing a company at
a cost disadvantage.
 When a company decides to defend and expand its foreign
market position by establishing marketing or production
operations in one or more host countries, it establishes a
separate international division.
 In turn, foreign operations begin, and a vice president,
reporting directly to the president or CEO, oversees the
operations.
3. Global structure stage
 A company is ready to move away from an international
division phase when it meets the following criteria:
 The international market is as important to the company as
the domestic market.
 Senior officials in the company possess both foreign and
domestic experience.
 International sales represent 25 to 35 percent of total sales.
 The technology used in the domestic division has far
outstripped that of the international division.
• As foreign operations become more important to the bottom line,
decision making becomes more centralized at corporate
headquarters.
• A functional product group, geographic approach, or a
combination of these approaches should be adopted.
• The firm unifies international activities with worldwide decisions
at world headquarters.
 Staffing

• Because obtaining a good staff is so critical to the success of any

business, the hiring and development of employees must be
done very carefully.
• Management must be familiar with the country's national labor
laws.
• Next, it must decide how many managers and personnel to hire
from the local labor force and whether to transfer home ‐based
personnel.
• For example, U.S. firms are better off hiring local talent and using only
a few key expatriates in most cases, because the costs of assigning
U.S.–based employees to positions overseas can be quite expensive.
• Simply, expatriates (people who live and work in another country) are
expensive propositions even when things go well.
• Adding up all the extras—higher pay, airfare for family members,
moving expenses, housing allowances, education benefits for the
kids, company car, taxes, and home leave—means that the first year
abroad often costs the multinational company many times the
expatriate's base salary.
• The total bill for an average overseas stay of four years can easily top
$1 million per expatriate.
• In any case, managers need to closely examine how to select and
prepare expatriates.
 Directing

• Cultural differences make the directing function more difficult for

the international manager.
• Employee attitudes toward work and problem solving differ by
country.
• Language barriers also create communication difficulties.
• To minimize problems arising from cultural differences,
organizations are training managers in cross‐cultural management.
• Cross‐cultural management trains managers to interact with
several cultures and to value diversity.
• In addition, the style of leadership that is acceptable to employees
varies from nation to nation.
• In countries like France and Germany, informal relations with
employees are discouraged.
• In Sweden and Japan, however, informal relations with employees
are strongly encouraged, and a very participative leadership style is
used.
• Incentive systems also vary tremendously.
• The type of incentives used in the U.S. may not work in Europe or
Japan, where stable employment and benefits are more important
than bonuses.
 Controlling

• Geographic dispersion and distance, language barriers, and legal

restrictions complicate the controlling function.
• Meetings, reporting, and inspections are typically part of the
international control system.

• Controlling poses special challenges if a company engages in

multinational business because of the far‐flung scope of operations
and the differing influences of diverse environments.
• Controlling operations is nonetheless a crucial function for
multinational managers.
• In many countries, bonuses, pensions, holidays, and vacation
days are legally mandated and considered by many employees as
rights.
• Particularly powerful unions exist in many parts of the world, and
their demands restrict managers' freedom to operate.