Lecture # 6

Global Governance
in HRM
SZABIST Islamabad
Facilitator: Muhammad Ahmed Khan

Topics

HRM & legislations

Global enterprise system
Global human resource management (GHRM)
Comparison between GHRM & DHRM
Core HRM activities
GHRM & DHRM differences & similarities
Factors affecting global HRM
Main issues tackled in GHRM
G. Hofstedes Cultural Dimensions Theory

HRM & LEGISLATIONS

Most HR decisions are taken keeping in view one
law or another, e.g.
Hiring and firing of employees
Employee compensation
How and what benefits to offer
Accommodation of employees dependents

Newer sets of laws even cover people with

disabilities and those seeking medical leave;
absence from work; worker safety, sexual
harassment. etc.

GLOBAL ENTERPRISE SYSTEM

Due to globalization it is difficult to distinguish
between a foreign firm and a domestic outfit.
Migrant workers around the globe has posed new

GHRM challenges.
Organizations have to follow HRM policies with a
global perspective if they strive to capture global
markets.
Even upstart firms dealing in cross-border business
have to conform to staff related globally set
benchmarks.
Effective HR policies firms can enhance their
international competitiveness

HUMAN RESOURCE MANAGEMENT

A strategic and coherent approach to the
management of an organizations most valued
assets - the PEOPLE working there individually
and collectively.
HUMAN RESOURCE MANAGEMENT- Why?
Skilled workforce
Limited availability
Proper utilization

(George Elton Mayo Father of Human Resource

Management)

GLOBAL HUMAN RESOURCE MANAGEMENT

The process of employing, developing and rewarding
people in international or global organization. An
organization in which operations takes place
subsidiaries overseas. or manages its business
internationally.
Or simply The process of managing people in
International settings
GHRM combines knowledge of business, culture,
history and social practices to help companies find their
niches in the international community.

KEY FEATURES OF GLOBAL HRM

Different labour markets

Mobility problems:
Legal, economic, cultural barriers
Different management styles
Varied compensation practices
Labour laws.

COMPARISON
GHRM
Handles a wide range of HRM
activities.
Issues relate to employees
belonging to many nationalities
Greater involvement of HR
manager in personal life of
employees
Greater exposure to risks in
International assignments
Manages several external
factors, e.g. government
regulations of foreign countries

DHRM
Deals with a narrow range
of HRM activities.
Issues relate to employees
belonging to a single
nationality
Limited involvement of HR
manager in personal life of
employees
Limited risks in domestic
assignments
Limited external factors to
deal with.

CORE HRM ACTIVITIES

Employee
and
Labor Mgmt.
Relations
Performance
Appraisal

Training
and
Devpt

Recruitment,
Selection,
Orientation and HR Analysis,
Exit interview
Policy and
Planning

HUMAN
HUMAN
RESOURCE
RESOURCE
MANAGEMENT
MANAGEMENT

Compensation
and
Benefits

Employment
Contract
and Admin.
Employee
Records/
Database

DIFFERENCES & SIMILARITIES

Marketing/
Sales

Recruitment,
Selection,
Orientation

Compensation
and
Benefits

Finance

Operations

Training
and
Devpt.

Performance
Appraisal

Other
functional
Areas

GLOBAL
HUMAN RESOURCE MANAGEMENT

FACTORS AFFECTING GLOBAL HR

Economic
Economic

Political
Political

Laws
Lawsand
and
Regulations
Regulations

Culture
Culture

Technical
Technical
Advancement
Advancement

MAIN ISSUES TACKLED IN GHRM

How to staff key management posts in the Co.?
Develop managers, who can do business in different
countries?
Pre-departure training for international assignments
How to compensate people in different locations?
How to evaluate the performance of managers in
different countries?
Performance management in international assignments
Repatriation.

INTERNATIONAL STAFFING 1/2

It is a process of selecting employees for
staffing international operations of an MNC.
Three sources of staffing
a) Home country or Parent Country National (PCN)
Employees of an organization who are citizens of
the country in which the headquarters of the
company is located.
b) Host Country Nationals (HCN)
Employees of an organization who are the citizens
of the country in which the foreign subsidiary is
located

INTERNATIONAL STAFFING 2/2

Three sources of staffing
c) Third Country Nationals (TCN)
Employees of an organization who are the citizens
of the country other than the country where the
organization is headquartered and the country that
is hosting the subsidiary

Managing expatriate assignments

through HRM policies
Why choice of employee for international
assignment is critical to the organization?
Mostly expatriates work under minimal supervision at

distant locations, so mistakes in selection may go

unnoticed until it is too late

For selection of the best expatriate employee

the management should:
Accept cultural sensitivity as a selection criterion
Establish a selection board of expatriates.
Look for candidates with previous international

experience
Explore the possibility of hiring foreign-born
employees who can serve as expatriates in future

HRM policies, organizational character & National

culture
Geert Hofstedes Cultural Dimensions Theory
Power Distance: Extent to which

individuals expect a tiered structure that

emphasizes status difference between
subordinates and superiors.. (Inequality
among the people of a nation)
Individualism: Degree to which a society

values personal goals, autonomy and

privacy over group loyalty (Moral stance,
political philosophy, ideology or social
outlook that emphasizes the moral worth
of the individual)

G. Hofstedes Cultural Dimensions Theory

Masculinity/Femininity: The

degree to which masculine

values prevail over feminine
values.

Uncertainty avoidance :

reflects the extent to which

members attempt to cope with
anxiety by minimizing
uncertainty.

G. Hofstedes Cultural
Dimensions Theory
Long term/ short term

orientation: Extent to which values

are oriented towards the future
(preserving, persistence) as
opposed to the past or present
(respect to tradition, fulfilling social
obligations)

Thank You