Human Resource Management in the International Market

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There has been a fast and rapid pace of internationalization and globalization over the last decade. Expanding business operations beyond the national boundaries with continuing businesses in the local markets requires more complex business structures and effient employees. One of the most critical determinants of an organization's success in the international business is the effective management of its human resources. Every organizations operates in an international market have to face a plenty of human resource issues concerning with international staffing, training and development, and performance with the employees in the international organisation.

International managements have to encounter many problems than faced by a domestic organization. Geographic distance and a lack of close, day-to-day relationships with headquarters set a major challenge to multinational companies to manage its human resources. So it is essential, to give special attention to the staffing practices of overseas units" (Pigors 1973 ;)

There are three different sources of employees which an international company can be staffed. First, the companies can employee employees from their own countries, which are referred to as expatriates or PCNs. Secondly, it can recruit from the local country that actually we going to start our new business and thirdly, it can hire employees from a third country other than the first and second country. We can also use employees as mix of these three countries. When international expansion of the company is in its infancy, management is heavily relying on local staff, as it is extremely respondent to local customs and concerns.(Pigors 1973:)

The staffing decisions of a international companies can be divided into four categories as (Mayrhofer and Brewster):

1. Ethnocentric policy

2. Polycentric policy

3. Geocentric policy

4. Regiocentric policy(

International staffing involves the four basic stages of recruitment, selection, training, and motivation.


Recruitment is the process of identifying and hiring best-qualified candidate (from within or outside of an organization) for a job vacancy, in a most timely and cost effective manner. Recruitment is the process of attracting people to apply for the job vacancies, there are two main sources of recruitment, internal sources and external sources. Internal sources of recruitments consist of promotion from with in the company or through referrals. It is type of less cost method and it will also add the effiency and morale of employees. Employee Referrals involves the recommendation by the present employee of a family or friend. The main advantage of this method is the limited cost of Training because the referrals and present employee who got promotion to the international business will be femilier with various aspects of the firm. External sourses of recruitment means recruitment through news peaper, radio, and internet advertising, trade schools, employment agencies, job fairs, and labour unions in the new international market. There is a problem in selecting selection methods in different countries. There is a difference in recruitment how ever between in developed and undeveloped countries. In the undeveloped countries there will be an overall absence of skilled and educated employees because of unemployment and defincies in the education and training system. So the methods like internet and news paper recruitment are not practicable there because most of the people there will be illustrate there in these countries. The number of employment agencies and labour unions also limited there but we can only use that method to recruitment employees there. The condition of developed countries is entirely different the numbers of skilled and educated employees are high there and the all recruit methods are usable also in that particular market. The only problem in developed markets is the high wages of labour while compare with undeveloped countries. The difference in culture and languages in different countries usually makes a problem in the recruitment procedure. There are also some problems that may cause during the recruitment procedure due to the problems with, international migration and the impact on recruitment, changes in immigration policy and visa arrangements, international recruitment for employment in home markets, resourcing Specialist skills for use in home and overseas markets, shared services and global recruitment, recruitment in the context of an internationalization strategy, mechanisms for global consistency in recruitment, selection and assessment, global capability systems, employer branding and international recruitment, local selection and assessment issues. ( on the basis of the above problems the firms should take remedial actions to overcome the problems. The organisations going to recruit employees to international market can make a standard for employees for different countries according to their country situations on the recruitment process. The firm's especially internationalised firms can start an office in the international market only for recruitment of internationalised employees. With contains all instruments and technique of recruitment.


Employee's selection involves choosing from the available pool of applicants that the firm considers best able to meet the requirements of the position. In the industrialised countries the firm considers people through standardised procedures, such as application forms, interviews and physical exams. The selection procedures in LCD is less formal and involves less testing; consider only some qualities like language skills and social status, cast, country of origin etc only influence the selection procedure. In a selection process we should care about some problems that might occur in the selection process. There might also issues with selection process for example the selection criteria we should use different criteria for different employees from different countries. We can't give same question and methods to people from India and US; another problem is language differences from different countries. To overcome that we need to prepare different selection procedure and different selection committee for employees from different countries


For an MNC, the training of its overseas employees is extremely important issue. Employees in overseas is extremely an important issue. Employees in overseas in locations are came from different society culture, which means that they have varying attitudes towards work. The beheveal aspects that may be quite different from the MNC's expectations and standards. It is so critical to MNC to train its employees regarding its work ethics, discipline, operational procedures and operational skills needed in the international market. One major problem in many countries is that the scarcity of adequate training resources including instructions, experienced personal may not be available in many countries. Generally MNC's fly in large number of key technical persons, who lead training sections for both theoretical and the on- the-job training to tarin newly hired employees in the new international market. Some personal in charge of sensitive and complex industrial operations have to remain at the overseas locations until the local trainers are considered adequacy trained and have enough experience to run the operations themselves. For lower level employees tipically factory workers, language is another barrier to overcome companies take different approches to overcome this problem. Interpreters are used where language is an intractable problem. Often companies train bilingual local employees, who in turn pass on the training to those local employees who do not understand the language used by MNC. Because most workers in the plant-floor leval are not involved in significant amount of theoretical work. This problem is mitigated to a large extent as long as they are able to understand the operating instructions for their specific tasks.


Motivating overseas employees also present some complex problems, employees especially at lower levels, are relatively ethnocentric in their views, and their views and their priorities and goals are often differ from those of their counterparts in western countries. While mobility, compensation, challenges in the work environment, and independence in functioning are very important factors for the western industrialised countries, workers in LCDs tend to attach garter value to job security, number of holidays, working hours, social benefits etc. so an MNC must judge the local climate and expectations very carefully and come up with an appropriate mix of incentives to motive employees with out being unduly expensive. Compare, for example, the workers in developed countries is consumption oriented and wants compensation in terms of money. While vacation days are desirable, the employees tends to work more days of the year to increase the compensation package. The employees interested to in moving up the ladder to better jobs but not necessarily in the same company. A worker in a developing country in a contrast wants job security more than other factors. Because industrial jobs are scarce in a developing country if the worker looses his or her job there may not be any other means of livelihood, especially because there is ordinarily no social security and unemployment insurance in the developing country.



Once talented employees are selected into an organization after training and development, another step of HRM is to creating an environment that will motivate and reward on their exemplary performance. To do that we need the performance of employees one way to assess performance is through a formal review on a periodic basis, generally annually, known as a performance appraisal or performance evaluation. For that we need performance management the suitable persons forthat position is line managers because they have a daily contact with the employees and can measure their performance, they are usually the ones who conduct the appraisals. The team performance management can also include subordinates, peers, group, and self, or a combination of one or more. Their main duty is to evaluate each employees performance with the desired object to give compensation and motivations (Mondy and Noe, 1996).

They can use different performance evaluators, according to their job; several appraisal systems can be also used. Some of the popular appraisal methods are (1) ranking of all employees in one group; (2) using rating scales to define above-average, average, and below-average employees; (3) recording favourable and unfavourable performance of employees, known as critical incidents; and (4) managing by objectives, or MBO (Mondy and Noe, 1996).

Cherrington (1995) illustrates how performance appraisals serve several purposes, including:(1) guiding human resource actions such as hiring, firing, and promoting; (2) rewarding employees through bonuses, promotions, and so on;(3) providing feedback and noting areas of improvement; (4) identifying training and development needs in order to improve the individual's performance on the job; and (5) providing job related data useful in human resource planning.(

Employee and Labor Relations

Just as human resource developers make sure employees have proper training, there are groups of employees organized as unions to address and resolve employment-related issues. Unions have been around since the time of the American Revolution (Mondy and Noe, 1996). Those who join unions usually do so for one or both of two reasons- to increase wages and/or to eliminate unfair conditions. Some of the outcomes of union involvement include better medical plans, extended vacation time, and increased wages (Cherrington, 1995).

Today, unions remain a controversial topic. Under the provisions of the Taft-Hartley Act, the closed-shop arrangement states employees (outside the construction industry) are not required to join a union when they are hired. Union-shop arrangements permit employers to hire non-union workers contingent upon their joining the union once they are hired. The Taft-Hartley Act gives employers the right to file unfair labor practice complaints against the union and to express their views concerning unions (Cherrington, 1995).

Not only do HR managers deal with union organizations, but they are also responsible for resolving collective bargaining issues-namely, the contract. The contract defines employment related issues such as compensation and benefits, working conditions, job security, discipline procedures, individuals' rights, management's rights, and contract length. Collective bargaining involves management and the union trying to resolve any issues peacefully-before the union finds it necessary to strike or picket and/or management decides to institute a lockout (Cherrington, 1995).

Safety and Health

Not only must an organization see to it that employees' rights are not violated, but it must also provide a safe and healthy working environment. Mondy and Noe (1996) define safety as "protecting employees from injuries caused by work-related accidents" and health as keeping "employees free from physical or emotional illness" (p. 432). In order to prevent injury or illness, the Occupational Safety and Health Administration (OSHA) was created in 1970. Through workplace inspections, citations and penalties, and on-site consultations, OSHA seeks to enhance safety and health and to decrease accidents, which lead to decreased productivity and increased operating costs (Cherrington, 1995).

Health problems recognized in the workplace can include the effects of smoking, alcohol and drug/substance abuse, AIDS, stress, and burnout. Through employee assistance programs (EAPs), employees with emotional difficulties are given "the same consideration and assistance" as those employees with physical illnesses (Mondy and Noe, 1996, p. 455).

Human Resource Research

In addition to recognizing workplace hazards, organizations are responsible for tracking safety- and health-related issues and reporting those statistics to the appropriate sources. The human resources department seems to be the storehouse for maintaining the history of the organization- everything from studying a department's high turnover or knowing the number of people presently employed, to generating statistics on the percentages of women, minorities, and other demographic characteristics. Data for the research can be gathered from a number of sources, including surveys/questionnaires, observations, interviews, and case studies (Cherrington, 1995). This research better enables organizations to predict cyclical trends and to properly recruit and select employees.


Research is part of all the other six functions of human resource management. With the number of organizations participating in some form of international business, the need for HRM research will only continue to grow. Therefore, it is important for human resource professionals to be up to date on the latest trends in staffing, performance appraisals, compensation and benefits, training and development, employee and labor relations, and safety and health issues- both in the United States and in the global market.

One professional organization that provides statistics to human resource managers is the Society for Human Resource Management (SHRM), the largest professional organization for human resource management professionals. Much of the research conducted within organizations is sent to SHRM to be used for compiling international statistics.