INTERNATIONAL HUMAN RESOURCE MANAGEMENT

1
INTERNATIONAL HUMAN RESOURCE MANAGEMENT

• Week 9

2
Impotant Issues in IHRM

• There are several important issues in IHRM which
  organizations which are operating at the
  international level must face. These include, for
  example
• Attitudes of Employees and Work Ethics
• Recruitment Selection Policy
• Compensation Policy
• Training and Development Policy
• Ethical Issues (e.g. bribery and corruption)
  Corporate Social Responsibility
• Dealing with the host countrys Bureaucracy and
  Government
• Host countrys Legal Framework (relating to
  Labour etc.)

3
Attitudes of Employees and Work Ethics

• Employee attitudes to work and the level of
  motivation displayed vary, depending on
  country, culture and industry
• In some places and industries, employee
  motivation and loyalty to the organization can be
  comparatively quite high (and job turnover low),
  in other places and industries, motivation to
  perform work tasks may be comparatively lower
  (and job turnover correspondingly higher)
• In developing countries, organizations which
  operate at the international level are often
  faced with the situation that local executives
  and managers lack decision-making skills or are
  hesistant to make independant decisions or take
  the initiative (cultural reasons)

4
Recruitment Selection PolicyCompensation Policy

• Organizations will try to recruit and select the
  best possible employees for their available staff
  positions
• Salary is a very important factor in attracting
  high quality employees other factors such as the
  work environment and job activities, training and
  development programmes and measures, and career
  prospects in the organization are other important
  considerations
• In situations where there is a shortage of
  highly-qualified skilled labour and a growing
  demand for it (e.g. China, India), the
  compensation policy will have to be modified
  accordingly and possibly frequently in order to
  attract and/or retain employees

5
Training Development Policy

• Training and Development of employees is a very
  important tool of human resource management and a
  means of realizing the organizations objectives,
  goals and mission
• Many organizations are reluctant to invest
  considerably in training and development
  programmes because they apprehend a poaching of
  personnel by other organizations which would reap
  the benefits for free (observed in developing
  countries where FDI is flowing to and
  copmpetition for skilled and qualified human
  resources is increasing)
• Training skills are especially important in
  relation to international joint ventures because
  here the potential for conflict is greater due to
  the larger number of organizations involved

6
Dealing with Bureaucracy in Host Countries

• Dealing with bureaucracy can be a very tricky
  issue for organizations which are operating
  internationally
• Interaction between organizations and local
  bureaucracies opens the way for unethical
  practices such as payment of bribes in order to
  get things moving in the right direction for
  the organization, e.g. granting of permits and
  licenses, and other requisite formalities
• The Berlin-based NGO Transparency International
  (www.transparency.org) publishes a yearly
  Corruption Perception Index for bureaucracies
  across the globe (Pakistan 2005 144 out of 158)
• To deal with the scourge of corruption in host
  countries, the services of local employees who
  know how to get things done are frequently
  availed. Often, organizations first enter into
  joint ventures before forming subsidiary units to
  reduce their risks in the face of rampant
  corruption

7
Ethical Issues Corporate Social Responsibility
(1)

• Ethics and corporate social responsibility are
  differently interpretated, complex and
  controversial subjects in the context of
  organizations which are operating internationally
  in diverse social, economic, political, cultural
  and legal environments
• Ethical issues and considerations arise in
  particular when the business practices in the
  host country differ markedly from those in the
  home country
• Three types of ethical responses have been
  identified ethical relativism (the ethical
  standards in the host country should be
  followed), ethical absolutism (the ethical
  standards of the home country should be
  followed), and ethical universalism (this
  presumes that there is a universal ethical
  standard of right and wrong which transcend
  cultural boundaries and that these must be
  followed by the organization (distinction between
  morally wrong and culturally different)

8
Ethical Issues Corporate Social Responsibilty
(2)

• Corporate Social Responsibility is basically
  about an organization promoting non-economic
  objectives, i.e., instead of just focussing on
  maximizing value for shareholders, organization
  (specifically business corporations) attempt to
  play the role of good citizens, balancing the
  interests of shareholders with those of society
  at large
• Corporate Social Responsibility can be a complex
  issue at the domestic level, but at the
  international level it takes on a much larger
  significance
• Areas where organizations operating
  internationally can demonstrate their social
  responsibility include, for example, observance
  of basic human rights, adoption of adequate
  workplace working conditions and health and
  hygiene standards, payment of adequate wages and
  salaries, equal employment opportunities,
  avoidance of child labour, adequate education and
  training, allowing unionization and protection of
  the environment

9
Ethical Issues Corporate Social Responsibility
(3)

• Ethical issues and corporate social
  responsibility are closely related to the human
  resource function in organizations which are
  operating internationally and in diverse
  contexts
• Minimize the exposure of employees to corrupt
  conduct by assisting in the development,
  publication, and implementation of appropriate
  codes of conduct
• Ensure training programmes cover areas which are
  of ethical concern (e.g. bribery, human rights,
  justice, and the common good)
• Align performance appraisal and compensation
  systems so that they support the ethical stance
  taken
• Be conversant with the type of requests that may
  be made of staff operating internationally, and
  provide them the necessary training so that they
  have the requisite negotiating skills to handle
  possible problem situations
• Ensure that employees understand the difference
  between corrupt bribery payments, gifts and
  permissable facilitation payments