Global-HRM-elective-munotes

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INTRODUCTION AND OVERVIEW OF
DOMESTIC HRM AND IHRM
Unit Structure
1.0 Objective
1.1 Introduction
1.2 Difference between IHRM vs HRM
1.3 The professionalism of HRM
1.3.1 An effective and Efficient HR professional
1.3.2 The Thinking Performer
1.3.3 CIPD Professional Map
1.3.4 Four concentric circles of HR professionalism
1.3.5 Providing Excellent service
1.4 International trends in the labour force
1.4.1 Types of the labor market
1.4.2 How does the labor market work?
1.4.3 Labour demand
1.4.4 Labor supply
1.4.5 Equilibrium in the labor market
1.4.6 What are the factors that affect the labor market?
1.4.7 W hat are the labor market indicators?
1.5 The impact of the environment, competition and the dynamics of the
labour force on HRM
1.5.1 The impact of the environment on human resources
management
1.5.2 How does a competitive environment affect businesses?
1.5.3 Types of Competitive Environment
1.5.4 Competitive Environment Analysis
1.5.5 Examples of Competitive Environment
1.6 Introduction to the Dynamic Environment and Roles of HR Managers
1.7 Self-Assessment Questions
1.8 Summary
1.9 Keywords munotes.in

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2 1.0 OBJECTIV E
• Introduction to the concept of International HRM and the differences
between domestic and international HRM
• Being an effective and efficient HR professional
• Four concentric circles of HR professionalism
• Introduction to the dynamic environment an d roles of HR managers
1.1 INTRODUCTION
International Human Resource Management (IHRM) is involved with the
management of employees in the three nation categories i.e. parent/home
country, host country and third country. Simply it can be said as IHRM is
done at international level. So, staffs ar e placed and work outside national
boundaries. It deals with several external factors such as government
regulations of foreign country. There is greater complexity involved in
handling different people from different countries as they work outside the
national boundaries.
Domestic Human Resource Management (DHRM) is involved with the
management of employees in only one or single country. Simply it can be
said as DHRM is done at national level. So, staffs are placed and work
within the national boundaries . It deals with few and limited external factors
so it is less complicated as compared to IHRM due to less influence from
external factors. It is relatively easy to handle the employees as they belong
to same country and all employees works inside the nati onal boundary.
1.2 DIFFERENCE BETWE EN IHRM VS HRM
It emerges that international HRM practices have to be different from those
of domestic HRM. It is characterized by more and varied HR activities, need
for broader perspective, more involvement in employe es’ personal lives,
high emphasis on change in employee mix, high risk exposure, and more
external influences. Let us go through the discussion of these characteristics
and identify how international HRM differs from domestic HRM.
• More and Varied HR Ac tivities: As compared to domestic HRM, in
international HRM, there are more and varied HR activities. In
international HRM, the volume of the same HR activities which are
relevant for domestic HRM too increases because these activities have
to be performed in a different context.
For example, when employee is chosen for an international
assignment, he needs additional training which would enable him to
adjust in the new environment. This training will be in addition to
training meant for skill development for performing the job
effectively. There are many HR activities in which this type of
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and IHRM This will be taken up while going through the discussion of
international HR activities. Variety in HR activities exists in
international HRM because many activities are undertaken which are
performed in international HRM only, for example, managing visa
and completing various formalities which are necessary for an
employee to perform job in an overseas location. There are several
such activities.
• Need for Broader Perspective: As compared to domestic HRM,
international HRM requires much wider perspective in respect of
almost all HR activities. It implies that HR managers have to consider
a variety of factors in making decisions on any issue of intern ational
HRM. Many of these factors are not relevant in the case of domestic
HRM.
For example, while fixing international compensation packages, HR
managers have to take into account the cost of living of different
international locations to bring some kin d of parity among employees
working at different locations. Similarly, fringe benefits have to be
provided to suit conditions of different locations. There are many such
activities which require much broader perspective.
• More Involvement in Employees’ P ersonal Lives: As compared to
domestic HRM, HR managers are required to have more involvement
in employees’ personal lives in the case international HRM. This
higher level of involvement is required to ensure that the employees
are suitably placed in an in ternational location with which they are
not well familiar. This lack of familiarity may be on a number of
factors like housing, health care practices, meeting of legal
requirements of host country, etc.
In many cases, the number of such factors may be qui te large. In order
to take care of such factors, many organizations prefer to have a
special unit in their HR department, known as ‘International Human
Resource Service’. The basic logic behind creation of such a unit is to
provide specialized service whic h is relevant only in the case of
international HRM.
• High Emphasis on Change in Employee Mix: In international HRM,
high emphasis is placed on change in employee mix particularly in
terms of nationality of employees. Very often, it happens that when
an organization establishes a business in a foreign country, it recruits
more number of employees from the country of its origin.
However, in order to have a favourable image in the country of its
operations, it recruits and develops local (host country) per sonnel. As
a result, over the period of time, the proportion of local employees
becomes sizeable. This strategy is adopted by most of the
multinationals. This process is taken on gradual basis.
• High Risk Exposure: There is high risk exposure in interna tional
HRM as compared to domestic HRM. The risk involved may be of munotes.in

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4 different types (political, regulatory, etc.) in an international business.
However, HR -related risk may be in the form of lack of suitable HR
practices meeting local requirements, social -cultural risk in the form
of non -acceptance of parent country nationals as employees, etc.
Such risk may have serious consequences in many cases like social
boycott of parent country nationals, kidnapping of employees or
harassing them in other forms, and in extreme case, takeover of the
business by the local government on the plea of not meeting local HR -
related conditions. Therefore, HR managers have to be careful in
making decisions on issues of international HRM.
• More External Influences: A maxim of managing a business is -
farther away a business goes, more influences it has to face. This is
true for international HRM too. As compared to domestic HRM,
international HRM activities are influenced by a variety of external
factors. HR managers are requir ed to deal with a new set of socio -
cultural milieu, political and legal system, etc.
Not only they have to change their mind set to work in this new set
but they have to train the employees to adjust with the new set. In fact,
effectiveness of HR depends to a very great extent on the degree of
such an adjustment.
1.3 THE PROFESSIONAL ISM OF HRM
In order to understand what HR professionalism is we first have to break
down what it means to be a professional. The term professional could be an
individual who is a qualified member of a professional body, someone who
continuously updates their knowledge, is competent, and uses their skills in
practice. Professionalism could be interpreted as the use of specialist
knowledge necessary to perform a particular type of work or role.
One way the CIPD measure professionalism is through their code of
conduct which can be broken down into 4 sections as shown below:
1. Professional Competence and Behaviour
2. Ethical Standards and Integrity
3. Representative of the Profession
4. Stewardship.
These codes of conduct apply to everyone who is registered with the CIPD
regardless of size, sector or specialism. These particular areas help in
maintaining and being an effective and efficient HR profes sional.
1.3.1 AN EFFECTIVE AND EFFICIENT HR PROFESSIONAL
To be effective and efficient as a HR professional there are many skills that
need to be learned and developed. The below list outlines some of the key
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and IHRM • Effective time keeping skill s
• Project management skills being
• Analytical and critical thinking
• Good communication skills
• Ability to build and manage relationships.
An effective technique for HR professionals is to use an “outside in”
approach where business trends are identif ied by looking at competitors or
other businesses and seeing how they can be utilised internally. Having the
company’s priorities in mind is key, as well as being able to give a good
service to your customers. HR should look at both individual abilities as
well as organisational capabilities in order to maximise their outputs. HR
should look at achieving sustainable and integrated solutions rather than
isolated activities like staffing and compensation programs. Past HR
practices should be developed and ada pted to become more efficient and
effective in current practices.
1.3.2 THE THINKING PERFORMER
The Thinking performer is one of four different types of people within an
organisation .These four types of people are:
1) The Lifetime Liability – the employee who neither performs nor
thinks.
2) The Wish -List Dreamer – the thinking non -performer who if he has
ideas, keeps them to themselves.
3) Automated Bureaucrat – the non -thinking performer who does what
he’s told and no more.
4) Thinking Performer – the ‘st rategic activist’ employee who adds
value through continuous challenge and self -imposed improvement
goals.” (CIPD, 2007).
A HR professional should always aim to be a Thinking Performer who is
proactive in driving their business forward whilst adhering to o rganisational
rules and regulations. The status quo should be challenged in order to
improve current practices and find the most effective solutions. As a HR
professional you should understand your customers in order to develop
services that meet their nee ds and therefore meets your organisational goals.
Feedback via word of mouth, mystery shoppers and surveys should also be
sought as this is a key component of understanding your customers (CIPD,
2007).
1.3.3 CIPD PROFESSIONAL MAP
To understand how profess ionalism can be conveyed in a HR role we can
refer to the CIPD professionalism map below:
“The 2013 Map defines the building blocks of effective people management
practice … that underpin good practice regardless of specialism. It’s also munotes.in

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6 flexible, so you c an choose what to focus on depending on your area of
work, the level of accountability you have in your role, and your career
development ambitions.” (CIPD (n.d), 2013)
The CIPD map above is broken down into the following sections (CIPD,
2013):
1. Insigh ts, strategy and solutions – This is to help establish an
understanding of the organisation and use these insights to tailor
strategy and solutions to meet organisational not only for short term
goals but also for long term.
2. Leading HR – Lead the way fo r a Hr professional by acting as a role
model, by helping further your contributions either in Hr or across
other areas of the business as well as developing and measuring others
across the organisation.
3. Organisation design – Ensure the organisation is designed to deliver
maximum impact both for the present goals and the future.
4. Organisation development – This can be done by Identifying
organisational and individual capability and use this to help al ign
strategy, people and processes to optimise effectiveness and achieve
organisation goals.
5. Resourcing and talent planning – Ensure that the organisation has
the right resource, capability and talent as well as an active effective
strategy to achieve a mbitions now and in the future.
6. Learning and development – By working on your own as well as
organisational capability and knowledge to meet current
requirements, and create a learning culture to embed capability
development.
7. Performance and reward – Help create and maintain a high -
achieving culture by delivering programmes that reward and
recognise key employee capabilities, skills, behaviours, experience
and performance, and ensure that reward systems are fair and cost -
effective.
8. Employee engagem ent – Work to strengthen the relationships
between employees colleagues and their work so that they make a
greater contribution towards organisational objectives.
9. Employee relations – Ensure that the relationship between the
organisation and its employe es are managed appropriately effectively
and efficiently underpinned by organisation standard, polices and
ultimately by relevant law.
10. Service delivery and information – Ensure that you have customer -
focused HR delivery across the entire service and a implementing
processes and project management to enable effective and cost -
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and IHRM 1.3.4 FOUR CONCENTRIC CIRCLES OF HR PROFESSIONALISM
The four concentric circles help show you where HR professio nalism can
be slotted into, these are:
1) Managing self
2) Managing in groups/teams
3) Managing upwards
4) Managing across the organisation
1) Managing self refers to the ability to manage your own skills
knowledges and behaviours by keeping them up to dat e. Without
these skills your relationships with colleagues or other individuals
may not be as effective.
2) Managing in groups or teams could involve working with other HR
professionals or other colleagues to help solve organisational
problems or working w ith other key stakeholders.
3) Managing upwards, as a HR professional we are required to work
closely with our managers and senior professionals within the
organisation. Without this any organisations strategies or plans will
struggle to be implemented acr oss the wider organisation.
4) The last circle of professionalism refers to ‘managing across the
organisation’. Once a plan has been created it is then up to the HR
professionals to set these plans into motion across their organisations
(Taylor, 2016, p75) .
1.3.5 PROVIDING EXCELLENT SERVICE
In order to be successful in HR one key element is to make sure your
customers are getting what they need. This could be by replying to queries
within a timely manner, being able to be flexible with customers and
expandi ng your knowledge to help give customers what they want.
Friendliness is also key in HR as you have to be someone who your
customers want to approach for any HR related queries. To provide a high -
quality service to customer a HR professional should give tr ansparent and
accurate information to their customers. While implementing any
communications or solutions it is necessary to comply with the policies and
procedures set out within the HR role.
1.4 INTERNATIONAL TR ENDS IN THE LABOUR
FORCE
The labor market is where the demand and supply of labor interact. That is
an example of a factor market, which is a market for production factors
transactions.
In this market, businesses demand labor services offered by households. As
compensation, they pay salaries or o ther forms of benefits such as insurance
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8 To pay for households, businesses sell products. And, households spend
some proportion of their income on businesses’ products and save the rest.
In economics, you can draw the flow of demand, su pply, and income into a
diagram, which we call a circular flow of income.
In the labor market, businesses compete to recruit quality workers.
Meanwhile, workers compete for the most satisfying compensation and
jobs.
• The International Labour Organization (ILO) released the World
Employment and Social Outlook Trends 2022 (WESO 2022),
providing a comprehensive assessment of how the labour market
recovery has deployed across the world.
• It reports a slow and uncertain recovery, as the pandemic continues to
have a significant impact on global labour markets, with different
national approaches to tackle the crisis.
The report examines the impacts of the crisis on global and regional trend s
in employment, unemployment, and labour force participation, as well as
on job quality, informal employment and working poverty.
It analyses global patterns, regional differences and outcomes across
economic sectors and groups of workers, and offers labo ur market
projections for 2022 and 2023.
The main outcomes are the following:
• Global labour markets struggle to recover: the Covid -19 pandemic
dominated the global economy also in 2021 and recovery is following
different patterns across geographies and sectors. ILO expects total
hours worked globally in 2022 below the pre -pandemic level when
adjusted for population growth, corresponding to a deficit of 52
million full -time equivalent jobs (assuming one week of work).
Global unemployment is expected to re ach 207 million in 2022,
exceeding the 2019 level by about 21 million. The outlook is most
negative for Latin America and the Caribbean and South -East Asia.
These previsions have deteriorated since the projections made in the
previous edition of World Empl oyment and Social Outlook.
• Pandemic disruptions, structural deficiencies and new risks
reduce the potential for decent work to be created: the impact of
the crisis also depends on structural deficiencies and inequalities
between countries. In many develo ping countries, informal
enterprises have been less able to access formal lines of credit or
Covid -19-related government support. There is the need for concerted
policies to accelerate labour market recovery, tackle inequalities and
return the global econo my to a path of sustainable growth.
• Labour market recovery is unequal and incomplete: Labour
market recovery is faster in high -income countries and unequal within
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and IHRM could become structural , with enduring implications for labour
markets, deepening various forms of inequality, from exacerbating
gender inequity to widening the digital divide.
• Temporary work as a buffer in times of economic uncertainty: as
in previous crises, temporary employ ment created a buffer against the
shock of the pandemic. While many temporary jobs were terminated
or not renewed, alternative ones were created, including for workers
who had lost permanent jobs. On average, the incidence of temporary
work did not change.
• Prevention of long -lasting damage requires a comprehensive
human -centred policy agenda: the WESO Trends also offers a
summary of key policy recommendations aimed at creating a fully
inclusive, human -centred recovery from the crisis at both national and
international levels. They are based on the Global Call to Action for
a Human -Centred Recovery from the COVID -19 Crisis that Is
Inclusive, Sustainable and Resilient, that was adopted by the ILO’s
International Labour Conference in June 2021. Recovery will require
the successful implementation of four key pillars: inclusive economic
growth and development, protection of all workers, universal social
protection, and social dialogue.
1.4.1 WHAT ARE THE TYPES OF THE LABOR MARKET
The labor market can be a prim ary market or a secondary market.
• The primary market is for permanent full -time workers.
• The secondary market is for temporary or part -time workers.
The supply of labor can come from internal or external to the organization.
• Internal market is commo n for large or multinational companies. In
this case, supply and demand take place within an organization.
Companies move employees from one business unit to another.
• External markets occur in open markets, where businesses compete
with each other (inclu ding competitors) for labor.
In the internal market, management has more in -depth knowledge about the
labor supply quality, including related to the skills, talents, strengths, and
weaknesses of their employees. Another advantage is that the company is
quite free from market pressures because it is determined internally. Lastly,
internal recruitment can reduce retention among existing staff.
However, external talent brings more ideas than internal staff. Also, open
markets provide more alternatives for s electing prospective employees. It
also offers more power in salary negotiations.
1.4.2 HOW DOES THE LABOR MARKET WORK?
The labor market works similar to the goods market. It’s just that the roles
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10 In the goods mar ket, economists use price as the primary determinant of the
quantity supplied and the quantity demanded of a good. In the labor market,
wages represent labor services’ price and determine the demand and supply
of labor.
In the labor market, businesses and households meet to transact labor
services. Firms represent the demand side, and households represent the
supply side.
Supply -demand interactions determine the level of wages and employment.
Higher salary encourages more labor supply. But, it reduces the demand for
labor. The equilibrium wage rate is reached when the quantity of labor
supplied equals the labor demanded.
1.4.3 LABOR DEMAND
Demand for labor increases as wages fall. And vice versa, demand falls as
wages ri se. As a result, the labor demand curve has a downward slope
(negative slope).
The law of diminishing marginal return explains the negative slope of the
labor demand curve. The law says, when a company employs more workers,
each additional worker contribu tes less to output. Because additional
workers contribute less to additional output, businesses are willing to
increase the workforce only when wages fall.
The change in the wage rate causes the labor demanded to move along the
curve. Meanwhile, changes i n factors other than wages shift the curve to the
right or left. Such factors include:
Changes in production level, in the aggregate, it is measured by economic
growth.
• Changes in production processes and technological advances
• Quality of human resourc es
• Number of companies in the market
• Government regulations such as local labor recruitment and wage
policies
1.4.4 LABOR SUPPLY
The law of supply also applies to the labor market. As wages rise, the labor
supplied increases. Conversely, a reduction in wages reduces the labor
provided. Hence, the labor supply curve is upward sloping (positive slope).
The concept of the marginal rate of substitution explains why the labor
supply curve slopes upward. Economists assume that workers spend their
time on t wo things: work and leisure. The two are interchangeable, meaning
that there is less time relaxing when more time is spent working. Free time
is relatively scarce, and therefore individuals are willing to work if they
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and IHRM Changes in wages affect the labor supplied to move along the curve.
Meanwhile, shifts in the labor curve are influenced by factors other than
wages, such as population, immigration, worker expectations, and income
levels.
1.4.5 EQUILIBRIUM IN THE LABOR MARKET
As in the product market, the labor market equilibrium occurs when the
quantity supplied matches the quantity demanded. At that point, the number
of employed workers and the equilibrium wage are determined.
A higher wage than the equilibrium wage indicates an exces s supply.
Workers will compete for available jobs and inevitably receive low salaries.
This, in turn, drives demand. The process continues until demand equals
supply.
Conversely, when wages are below equilibrium, there is a shortage of
supply. Cheaper wages keep production costs low, which encourages
businesses to increase output. They then recruited more workers. Because
wages are still low and there is a shortage of s upply, companies agree to
offer higher than current wages to attract more workers.
But, in the short term, wages may not change so quickly to equilibrate the
market because of the rigidity that results from the employment contract.
Also, government contro ls, such as minimum wages, can limit wage
reductions.
Furthermore, at high wage levels, workers may be reluctant to work more.
They prefer to replace work time with free time (unpaid time). Thus, instead
of increasing supply, higher wage increases lead to a decrease in labor
supply. Therefore, if you plotted it on a graph, it would form a backward -
bending supply curve of labor.
1.4.6 WHAT ARE THE FACTORS THAT AFFECT THE LABOR
MARKET?
Apart from wage levels, many factors influence the labor market. Among
the factors that influence the supply of labor are:
• Population growth, including factors such as birth and death rates.
Higher population growth means greater the potential labor supply.
• Age distribution. The supply increases if the population is mostl y
composed of people of productive age.
• Labor mobility, including geographic mobility and occupational
mobility. The first is related to the ease with which workers can move
locations, which is influenced by factors such as wages, transportation
networks , housing (housing), and career opportunities. The second
term is related to movement from one position to another, which is
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12 • Net immigration is the difference between people who come to a
country (immig rants) and people who leave the country (emigrants).
• Globalization increases labor mobility between countries.
• Availability of education and training centres affects the supply of
qualified workers.
Meanwhile, the demand for labor depends on factors s uch as:
• Business profits are usually related to the conditions of the business
cycle. The demand for labor decreases during an economic recession.
In this period, business profits fall because aggregate demand
decreases. Businesses stop hiring and choose to rationalize workers
as they cut production. Conversely, the demand for labor increases
during economic expansion.
• Minimum wages. Some companies offer low wages to support low
operating costs. But, because the government imposes a minimum
wage, they cannot do it. Hence, the minimum wage limits their
demand to recruit workers.
• Wage subsidies. For example, the government provides incentives or
wage subsidies for companies that employ or retain older workers.
The purpose of subsidies is to compensate f or the gap between wages
and productivity of older workers.
• Policy on the recruitment of local labor. It affects demand because it
reduces the flexibility of firms in choosing workers.
• Production processes and technological advances. Automation, for
example, reduces the need for labor to operate production machines.
• Quality of human resources. Some jobs require more professional
qualifications, so when the quality of local human resources does not
meet the criteria, domestic labor demand is also low.
• Number of companies. More companies mean more demand for labor.
1.4.7 WHAT ARE THE LABOR MARKET INDICATORS?
You can find statistics on the labor market at the central statistics agency,
the World Bank, the OECD, or other agencies. You will probably com e
across a myriad of variables about the labor market. In the following, I will
try to summarize key observed labor indicators.
• Unemployment rate is the ratio of the number of unemployed people
to the total labor force. The numbers go up during a recession and fall
during an economic expansion. Changes in the unemployment rate
affect aggregate demand because it impacts the income and
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and IHRM • Labor force is the number of people who have jobs or are actively
looking for work. Its growth can be used to measure a country’s
potential GDP.
• Labor force participation rate. You can cal culate this by dividing the
labor force by the total working -age population. Together with the
unemployment data, we can figure out how many people are actually
unemployed.
• Labor productivity measures how much output a worker can produce
in an hour. For aggregate figures, you can calculate this by dividing
GDP by the aggregate number of hours worked. Like the growth of
the labor force, increasing productivity can also increase a country’s
potential GDP.
• Average weekly hours in manufacturing. These stati stics often move
up and down before the economy changes direction. Early in a
recession, businesses are more likely to cut overtime than laying off
their labor. That’s because the recruitment cost is more expensive.
But, if the recession is still going on, and maybe getting worse, they
have more confidence to cut their workforce.
1.5 THE IMPACT OF TH E ENVIRONMENT,
COMPETITION AND THE DYNAMICS OF THE
LABOUR FORCE ON HRM
The environment has a significant impact on human resources since it has
driven business es to focus on hiring skilled individuals. It also influences
the amount of technical progress and the degree of salary disparity between
regions. It also has an indirect impact on human resources through
influencing the internal environment, such as the c ompany’s culture,
policies, procedures, and goals.
1.5.1 THE IMPACT OF THE ENVIRONMENT ON HUMAN
RESOURCES MANAGEMENT
In the workplace, human resources is a department responsible for
managing all aspects of the workforce. The human resources environment
is one of the elements of the social environment that includes everything
related to human resources and the benefits they provide. HRM refers to the
administrative responsibilities related to recruitment, development, and
protection of the employees to ca rry out an organization’s work and reach
its goals.
A human resource's external environment’ contains many factors. These
factors are beyond the boundaries of the organization and beyond the
control of human resources, and therefore any change of these el ements
constitutes a danger to the organization, we attribute this to the fact that the
organization is not separate from the outside world, but rather it’s an open munotes.in

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14 system that Impact and is affected by the outside world, and thus the
emergence of opportun ities and threats.
Consequently, it is critical for human resources strategic planning to
consider external factors to make human resources decisions more efficient
and effective in the face of challenges and opportunities, The following are
some of the e xternal factors:
• Technological factors: Innovations and developments in technology
alter the way businesses operate since they enable them to grow, better
their image with stakeholders, and so generate more revenues, as well
as the opportunity to raise employee compensation.
As a result, individuals with a technical talent that allows them to use
technology in their work are becoming more valuable, and this
includes employees in various departments, including human
resources officials.
As it has become p ossible to carry out various human resources
management processes electronically, technological development
helps human resources to develop their way of working and their
management of the human element, such as the development of
selection processes, rec ruitment, training, performance evaluation,
and determining salaries and wages.
Technological development contributes to reducing human resources
costs, for example, the organization may find, as a result of its use of
new technology, that it needs two wor kers instead of three, and remote
work reduces the costs of space and transportation.
Employees who are successful in utilizing old technology may be
dissatisfied with technological change and progress since it is
different from what they are accustomed to , and the need for
employees with high technical abilities may grow, as will the expense
of employee training.
• Economics factors: The organization is affected by various
economic factors, such as the general economic situation, economic
policies, GDP, and inflation, and the changes that occur in the
organization as a result of various economic factors are reflected in
the change in human resources management, for example, the
deterioration of the economy contributes to an increase in
unemployment rates, forcing human resources management to reduce
the number of employees.
This means that when it comes to human resources planning, it’s
critical to consider not only the current economic situation and how
it’s changing, but also to prepare for economic dow nturns and crises
at both the local and global levels.
Because of globalization, the world has become more interconnected,
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and IHRM the country’s economy and the more open it is to the world, the gre ater
its impact on the global economy, which means that the global
economy has an impact on human resources management.
• Labor market: Organizations demand people with certain talents to
carry out their tasks, resulting in fierce rivalry for qualified
manpower. To compete in this market, the company must improve
and plan its human resources management, and it may benefit from
training courses to improve its competitiveness.
Individuals demonstrate their ability to create the supply side of the
labor marke t despite demographic differences such as gender, the
salary they demand, marital status, and educational attainment.
New people enter the labor market regularly, but experienced workers
retire, necessitating the search for a qualified replacement. This
necessitates career succession planning, and it is possible to benefit
from Advanced Selection, Interviewing, and Recruitment training
course to learn how to deal with this challenge even better.
• Employer requests: Human resources differ from one industrial sector
to another, as each has its own set of characteristics, necessitating the
adaptation of human resources management to these characteristics,
as well as the training and recruitment of e mployees to suit them.
Similarly, the changes that organizations are facing necessitate
changing human resources management’s requirements for the
workforce required to meet these changes, as well as training current
employees on new skills to adapt to the se changes. Such as continuous
employee development and empowerment training course.
• Legal factors: The legal environment comprises numerous
government -enacted legislation that the human resources department
must follow. If the human resources departmen t fails to consider the
legal elements of its job, it may face issues with the legal authorities,
which might lead to the organization’s closure.
The business is in danger of new regulations requiring human
resources management to adapt to change to avoid difficulties with
the government, which might have an impact on all human resources
management operations.
1.5.2 HOW DOES A COMPETITIVE ENVIRONMENT AFFECT
BUSINESSES?
Your competitors can directly affect your business and the decisions you
make. Let’s im agine two online clothing stores that pose a threat to each
other in terms of business development and profit. One of them decides to
conduct a flash sale before Christmas and provide their customers with 40%
off sitewide. The other store will also need to come up with a great offer to
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16 Similarly, if one coffee company brings out a new product to the market,
their competitor will need to consider growth hacking . Thus, competition
can be beneficial as it motivates companies to get better and improve their
products.
A competitive environment also has a positive effect on customers.
Businesses often offer high -quality goods at an affordable price to win the
attent ion of consumers. Besides, companies have to bring out their products
through innovations. However, competition can sometimes complicate the
existence of a business. Let’s take two companies within one location, for
example. If one of them sets low prices and discounts, it will be difficult for
the second company to compete.
Now that you know how a competitive environment influences your
business and customers, it’s time to proceed to the types of competition that
define the relations between and among sel lers and customers.
1.5.3 TYPES OF COMPETITIVE ENVIRONMENT
It’s essential to understand what types of competitive environments there
are to assess the economic environment in business. You should know how
companies and markets function so that you can an alyse industry and
market news, policy changes, and legislation in the future. Let’s distinguish
the main types of competitive environments and review each of them in
detail.
• Pure competition. In a perfectly competitive environment, many small
companies produce similar products, and many consumers buy them.
These manufacturers are small, and thus they can’t influence the
price, defined by supply and product demand. For example, when a
farmer brings dairy products to the local market, this person can’t
change the market price and agrees with the going one.
• Monopolistic competition. In this environment, many manufacturers
produce different products, although they might serve the same
purpose. Customers can distinguish the products because of the
differenc es in quality, features, etc. Businesses actively use
advertising to promote their products and convince consumers that
they are not like other products and have better quality. Companies in
monopolistic competition are price makers, which means that they
can influence the product price. However, to justify the price increase
of their products, they should offer something exclusive to be unlike
other businesses, for example, improve the quality of their goods.
• Oligopoly. In this market model, there’s a sm all number of
businesses, usually two or more. It’s considered stable as companies
don’t compete but collude to obtain high market returns. Firms set and
keep prices high together or under the leadership of one particular
company. In an oligopoly, profit m argins are higher than in a more
competitive environment. However, the main problem of this market
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17 Introduction and Overview of Domestic HRM
and IHRM incentive to cheat and act in their interests at the expense of other
companies.
• Monopoly. There’s one company that produces a unique product. This
manufacturer doesn’t face any competition, and the product doesn’t
have any substitutes. Also, a monopolist decides on the product’s
price and sets barriers for new companies to enter the market.
Perfect competition, monopolistic competition, oligopoly, and
monopoly are the four main market structures you should be aware of
when entering the market. Now it’s time to move to the competitive
environment analysis.
1.5.4 COMPETITIVE ENVIRONMENT ANALYSI S
To develop a great marketing strategy, you need to understand your
competitors and their tactics. At this point, you need a competitive analysis
framework to reach your business opponents. Let’s discuss several most
popular frameworks.
• SWOT Analysis. You can assess the external and internal factors that
influence your company. This framework helps you identify
competitive advantages, compare your opponents’ strong and weak
sides on different marketing channels, and define your further
marketing steps.
• Strategic Group Analysis. This framework characterizes the strategies
of all strong competitors in various strategic dimensions. It allows you
to identify your competitors’ positions in the competitive
environment and the factors that br ing your business a profit. It also
enables you to identify the key aspects of success and assess your
position among competitors.
• Porter’s Five Forces. The basis of this framework lies in exploring the
competitive market forces in the industry and helpi ng define the
industry’s strengths and weaknesses. It involves five elements: new
entrants, buyers, suppliers, substitutes, and competitive rivalry. These
five influence the level of competition in your industry.
• Growth -Share Matrix. By using this framew ork, you can decide
which products are worth investing in according to their
competitiveness and attractiveness within the market. It’s particularly
useful for large companies since it helps them define their product
portfolios and decide which products ar e worth continuing to invest
in and which are no longer worth it.
• Perceptual Mapping. This framework allows you to see the position
of your product against the alternatives of your competitors. It enables
you to understand how your customers perceive you r product
compared to competitors’ and whether your positioning strategy
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18 To fully understand different market structures, let’s walk you
through some examples.
1.5.5 EXA MPLES OF COMPETITIVE ENVIRONMENT
Every business plan of even a small firm contains a section about
competitive environment analysis. As you already know from the
information above, it includes all the external factors that influence your
business and the product or service you offer.
Let’s take electronics, for example. Samsung is a company founded in South
Korea that specializes in electronic and smart appliance technology. Their
competitors include Apple, Sony, Huawei, Intel, and many more, which is
why Samsung’s team tries to create a product that is better than competitors’
alternatives using innovations that can attract prospects.
Changes in technology or the way customers buy products can influence the
types of competitive environments. For example, Amazon changed
products’ distribution and customer expectations. Introduced innovations
influenced the number of consumer goods companies and opened markets
for small firms that previously had no opportunity to compete with more
prominent companies.
Your business can find itself in different types of competitive environments.
That’s why it’s critical to understand the difference between them and be
ready to assess industry and market news, policy changes, and legislation.
1.6 INTRODUCTION TO THE DYNAMIC
ENVIRONMENT AND ROLES OF HR MANAGERS
Human resource management is responsible for the recruitment, selection,
training, and motivation of the organization’s employees. Human resource
management (or HRM) is therefore concerned with the fundamental task of
defining and analysing jobs in organizations. Other HR tasks include:
• Planning human resource needs within the organization
• Staffing the organization’s needs (once those needs have been
identified)
• Compensating and motivating employees
• Appraising em ployee behaviour and providing effective and
constructive feedback
• Enhancing the human potential within the firm
• Improving the workplace environment and using the human resource
capital within the organization to reach strategic goals
• Maintaining eff ective work relationships
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19 Introduction and Overview of Domestic HRM
and IHRM Although the HRM department in many organizations does not perform all
of these functions, the last three decades have seen a trend moving in this
direction. We will now discuss each of these functions in greater detail.
1. Planning HR Needs
The planning function of human resource management involves two
major activities: strategic planning and short - and medium -range
planning. These two activities include the process of planning and
synchronizing HR needs with the strategic mission of the firm. Such
strategic objectives may include increasing market share, revenue
growth, product or service diversity, profit margins, and planning for
financial obligations, etc. Planning activities are also essential for
effectively performing numerous other critical HR act ivities. For
example, HR planning will help the organization better understand
how many and what type of employees the organization will need in
the future. HR planning also addresses how the firm obtains and trains
future human capital.
2. Staffing the O rganization’s Needs
Once the organization’s human resource needs have been linked to
the organization’s strategy, positions must be filled. Staffing involves
recruiting job applicants (also known as candidates), and then
selecting the most appropriate app licants for the available jobs. It
should be noted that staffing applies both to external candidates (those
not currently employed by the firm) and internal candidates (those
currently employed by the firm). While engaging in the process of
recruitment, i t is important that the organization cast a wide net to
ensure a full and fair search for potential job candidates. Recruiting
is an extremely important HR function, because if organizations don’t
attract a wide range of candidates, they will be less like ly to
successfully fill organizational needs. Once candidates have been
identified, they must be selected for the job. Common selection
techniques include obtaining completed application forms,
interviewing candidates, reviewing education and formal train ing
verifications, and administering various formal and informal tests to
determine fit and potential with the organization. All selection
procedures must comply with various pieces of federal and state
human rights legislation. The goal of the selection process should be
to create a match between a candidate’s ability and the requirements
of the job.
3. Compensating and Motivating Employees
Once employees are on the job, it becomes necessary to determine
how well they are doing and to reward them accord ingly. There are
several important aspects of compensation. For example, employees
are generally rewarded on the basis of the value of the job, their
personal contributions, and their performance. Although rewards
based on performance can increase an emp loyee’s motivation to
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20 Global HRM
20 member of the organization. Those rewards that are directly linked to
performance on the job are often’ referred to as direct compensation.
On the other hand, compens ation that is given simply for being a
member of the organization is often referred to as indirect
compensation.
4. Appraising Employee Behaviour
A performance appraisal (also known as a performance review,
performance evaluation, or career/development dis cussion) is a
method by which an employee’s job performance is evaluated.
Although many managers and employees avoid performance
appraisals, they are critically important for both measuring and
monitoring an employee’s contribution. Performance appraisals are
frequently the basis for promotions, trainings and raises, as well as
terminating employees. As such, it is critically important that they
accurately reflect the performance of employees. For example, if an
employee is chronically absent, can’t get a long with co -workers, or is
consistently late to work, the employee’s performance appraisal
should reflect those things.
5. Enhancing Human Potential
Over the last several decades, the HRM field has seen a substantial
interest in both formal and informal training and development. A
number of studies even suggest that many millennials entering the
workforce today are more concerned with the ability to grow and
develop personally than they are with their direct compensation. In
today’s global and chaotic e nvironment, many firms use training and
development activities to remain competitive.
6. Improving the Workplace Environment
Many organizations today strive to improve the quality of work life,
implementing productivity improvement programs as well as
improving health and safety at work. While in the past the primary
health and safety focus was on the physical work environment, there
is now a growing concern about the psychological work environment.
Many firms realize that their strategic and competitiv e advantage is
directly impacted when the employees’ work environment is poor.
Similarly, many organizations, such as Google, are doing all they can
to build a creative and open workplace.
7. Maintaining Effective Work Relationships
After an organizatio n has hired the employees it needs, it must take
good care of them. In addition to compensation and a healthy and safe
environment, firms must provide conditions that will make it
attractive for employees to stay. As part of this function, organizations
must establish and maintain effective working relationships with
employees. Over the last several decades, employees have gained
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21 Introduction and Overview of Domestic HRM
and IHRM decisions such as discharges, layoffs, and demotions must be mad e
with care and good reasons. It is absolutely critical that management
be aware of employee rights and not violate them. The HR manager
is in an excellent position to inform managers about these rights.
8. Globalizing HRM
As the world becomes more inter dependent and the easy exchange of
information becomes commonplace, it is of paramount importance
that HR managers learn from the HR practices, policies, and activities
of other countries. Furthermore, as organizations become more
global, it is essential t hat organizations develop and implement HRM
policies with international applicability, also making them relevant to
employees from diverse cultures and backgrounds.
In analysing these eight separate HR functions and activities
(planning, staffing, compensa tion/motivation, performance appraisal,
training and development, improving the workplace, relationship
building, and globalization), it is important to view them
independently as well as together, as many HR functions directly
influence each other. In oth er words, performance in one activity
often depends on the performance of another. It should be noted that
in most work environments, all HR functions and activities operate
within the constraints of the internal and external environments
(discussed in Sec tion 1.4). As such, all eight functions should be
viewed as a unit, necessarily interrelated, and subject to a multitude
of forces and events that help shape an organization’s HR policies.
Finally, in order to help the firm achieve its organizational and
strategic goals, human resource (HR) policies and practices must be
congruent with the organization’s overall strategy.
1.7. SELF -ASSESSMENT QUESTION
FILL IN THE BLANK
1. IHRM is involved with the management of employees in the three
nation categories i.e. __________, ____________ and _________.
2. HR should look at both ______________ as well as organisational
capabilities in order to maximise their outputs.
3. _____ _________ can be done by Identifying organisational and
individual capability and use this to help align strategy, people and
processes to optimise effectiveness and achieve organisation goals.
4. ______________ Work to strengthen the relationships betwe en
employees colleagues and their work so that they make a greater
contribution towards organisational objectives.
5. ______________ refers to the ability to manage your own skills
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22 Global HRM
22 6. ______________ as a HR professional we are required to work
closely with our managers and senior professionals within the
organisation.
7. The ______________ is for permanent full -time workers.
8. The ______________ is for temporary or part -time workers.
9. ______________ is the difference between people who come to a
country and people who leave the country.
10. Many small companies produce similar products, and many
consumers buy them is known as ______________
11. Many manufacturers produce different prod ucts, although they might
serve the same purpose is known as ______________ environment.
12. The planning function of human resource management involves two
major activities ______________ and ______________
13. ______________ are frequently the basis for promotions, trainings
and raises, as well as terminating employees.
TRUE OR FALSE
1. DHRM is involved with the management of employees in only one or
more country.
2. The term professional could be an in dividual who is a qualified
member of a professional body, someone who continuously updates
their knowledge, is competent, and uses their skills in practice.
3. Past HR practices should be developed and adapted to become more
efficient and effective in c urrent practices.
4. The Lifetime Liability – the thinking non -performer who if he has
ideas, keeps them to themselves.
5. Automated Bureaucrat – the non -thinking performer who does what
he’s told and no more.
6. Managing in groups or teams could in volve working with other HR
professionals or other colleagues to help solve organisational
problems or working with other key stakeholders.
7. Internal market is common for smaller or national companies.
8. External markets occur in open markets, where businesses compete
with each other (including competitors) for labour.
9. Higher population growth means greater the potential labour supply.
10. Availability of education and training centres does not affects the
supply of qualified workers.
11. A competitive environment also has a positive effect on customers.
12. In an oligopoly, profit margins are lower than in a more competitive
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23 Introduction and Overview of Domestic HRM
and IHRM 13. A monopolist decides on the product’s price and sets barriers for new
companies to enter th e market.
14. The goal of the selection process should be to create a match between
a candidate’s ability and the requirements of the job.
15. Once employees are on the job, it becomes necessary to determine
how well they are doing and to reward them a ccordingly.
WRITE SHORT ANSWERS
Q1. What is international HRM?
Q2. How is domestic HRM different from international HRM?
Q3. What is the impact of HRM with regards to technology?
ANSWERS
FILL IN THE BLANK
1. parent/home country, host country and third country.
2. individual abilities
3. Organisation development
4. Employee engagement
5. Managing self
6. Managing upwards
7. primary market
8. secondary market
9. Net immigration
10. Pure Competition environment.
11. Monopolist Competition
12. strategic planning and short - and medium -range planning.
13. Performance appraisals
TRUE OR FALSE
False (1, 4, 7, 10, 12)
True (2, 3, 5, 6, 8, 9, 11, 13, 14, 15)
1.8 SUMMARY
International Human Resource Management (IHRM) is involved with the
managem ent of employees in the three nation categories i.e. parent/home
country, host country and third country. Domestic Human Resource
Management (DHRM) is involved with the management of employees in
only one or single country.
As compared to domestic HRM, i n international HRM, there are more and
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24 Global HRM
24 activities which are relevant for domestic HRM too increases because these
activities have to be performed in a different context.
As compared t o domestic HRM, international HRM requires much wider
perspective in respect of almost all HR activities. It implies that HR
managers have to consider a variety of factors in making decisions on any
issue of international HRM. There is high risk exposure i n international
HRM as compared to domestic HRM. HR managers are required to deal
with a new set of socio -cultural milieu, political and legal system, etc
The term professional could be an individual who is a qualified member of
a professional body, someon e who continuously updates their knowledge,
is competent, and uses their skills in practice. To be effective and efficient
as a HR professional there are many skills that need to be learned and
developed. A HR professional should always aim to be a Thinkin g
Performer who is proactive in driving their business forward whilst
adhering to organisational rules and regulations.
The labour market is where the demand and supply of labour interact. The
Covid -19 pandemic dominated the global economy also in 2021 and
recovery is following different patterns across geographies and sectors.
The environment has a significant impact on human resources since it has
driven businesses to focus on hiring skilled individuals.
The human resources environment is one of the e lements of the social
environment that includes everything related to human resources and the
benefits they provide.
The planning function of human resource management involves two major
activities: strategic planning and short - and medium -range planning . Once
the organization’s human resource needs have been linked to the
organization’s strategy, positions must be filled.
There are several important aspects of compensation. A performance
appraisal (also known as a performance review, performance evalu ation, or
career/development discussion) is a method by which an employee’s job
performance is evaluated.
1.9 KEY WORDS
International Human Resource Management (IHRM): is involved with the
management of employees in the three nation categories i.e. pa rent/home
country, host country and third country.
Domestic Human Resource Management (DHRM): is involved with the
management of employees in only one or single country.
The Lifetime Liability: the employee who neither performs nor thinks.
The Wish -List Dreamer: the thinking non -performer who if he has ideas,
keeps them to themselves.
Automated Bureaucrat: the non -thinking performer who does what he’s told
and no more.
Thinking Performer: the ‘strategic activist’ employee who adds value
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25 Introduction and Overview of Domestic HRM
and IHRM Managing self refers to the ability to manage your own skills knowledges
and behaviours by keeping them up to date.
Managing in groups or teams could involve working with other HR
professionals or other colleagues to help solve organisational problems or
working with other key stakeholders.
Managing upwards, as a HR professional we are required to work closely
with our managers and senior professionals within the organisation.
Primary market: i s for permanent full -time workers.
Secondary market: is for temporary or part -time workers.
Internal market is common for large or multinational companies. In this
case, supply and demand take place within an organization.
External markets occur in open markets, where businesses compete with
each other (including competitors) for labor.
Labour Demand: the amount of labour that employers seek to hire during a
given time period at a particular wage rate.
Labour Supply: the amount of labour, measured in person -hours, offered for
hire during a given time -period.
Equilibrium labor market: the labor market equilibrium occurs when the
quantity supplied matches the quantity demanded.
Population growth: including factors such as birth and death rates. Higher
population growth means greater the potential labor supply.
Age distribution: The supply increases if the population is mostly composed
of people of productive age.
Labor mobility: including geographic mobility and occupational mobility.
Net immigratio n: is the difference between people who come to a country
(immigrants) and people who leave the country (emigrants).
Globalization: increases labor mobility between countries.
Availability of education and training centres affects the supply of qualified
workers.
Business profits are usually related to the conditions of the business cycle.
Minimum wages: Some companies offer low wages to support low
operating costs.
Wage su bsidies: The purpose of subsidies is to compensate for the gap
between wages and productivity of older workers.
Production processes and technological advances: Automation, for
example, reduces the need for labour to operate production machines.
Quality of human resources: Some jobs require more professional
qualifications, so when the quality of local human resources does not meet
the criteria, domestic labor demand is also low.
Number of companies: More companies mean more demand for labour.
Unemploym ent rate: is the ratio of the number of unemployed people to the
total labor force.
Labor force: is the number of people who have jobs or are actively looking
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26 Global HRM
26 Labor force participation rate: You can calculate this by dividing the labor
force by the total working -age population.
Labor productivity: measures how much output a worker can produce in an
hour.
Average weekly hours in manufacturing: These statistics often move up and
down before the economy changes direction.
Pure competition: In a perfectly competitive environment, many small
companies produce similar products, and many consumers buy them.
Monopolistic competition: In this environment, many manufacturers
produce different products, although they might serve the same purpose.
Oligopoly: In this market model, there’s a small number of businesses,
usually two or more.
Monopoly: There’s one company that produces a unique product.
SWOT Analysis: You can assess the external and internal factors that
influence your company.
Strategic Group Analysis: This framework characterizes the strategies of all
strong competitors in various strategic dimensions.
Porter’s Five Forces: The basis of this framework lies in exploring the
competitive market forces in the industry and helping define the industry’s
strengths and weaknesses. Growth
Share Matrix: By using this framework, you can decide which products are
worth investing in according to their competitiveness and attractiveness
within the market
Perceptual Mapping: This framework allows you to see the position of your
product against the alternatives of your competitors.
REFERENCE:
https://www.geeksforgeeks.org/difference -between -ihrm-and-dhrm/
https://www.businessmanagementideas.com/differences/difference -
between -domestic -and-international -hrm/21089
https://www.ukessays.com/essays/human -resources/what -is-
professionalism -and-how-do-you-ensure -that-you-are-effective -and-
efficient -within -hr.php
https://ioewec.newsletter.ioe -emp.org/news/article/world -employment -
and-social -outlook-trends -2022 -ilo-report -1
https://penpoin.com/labor -market/
https://www.lpcentre.com/articles/the -impact -of-the-environment -on-
human -resources -management
https://sendpulse.com/support/glossary/competitive -environment
https://app.myeducator.com/reader/web/1114/topic1/gy4o4/
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27 2
SELECTING AND MANAGING
INTERNATIONAL WORKFORCE
Unit Structure
2.0 Objective
2.1 Introduction
2.2 The influences of cross cultural issues on organisations
2.2.1 What are the Cross -Cultural Teams?
2.2.2 The Challenges of Managing a Cross -Cultural Team
2.2.3 Tips to foster cross -cultural working relationships
2.3 Selection, evaluation and coaching of international employees
2.3.1 International Staffing Approaches
2.3.1.1 International Strategies.
2.3.1.2 Staffing Approaches
2.3.2 Criteria for selecting expatriates .
2.3.3 Performance Evaluation System
2.3.3.1 Financial and Non -Financial Measures of Evaluation
2.3.3.1 Types of Performance Evaluation Systems
2.3.4 What is Employee Coaching?
2.3.4 .1 What is the focus of employee coaching?
2.3.4 .2 Benefits of Employee Coaching
2.3.4 .3 How to effectively coach employees?
2.4 Developing Planning, Communications and Intercultural skills to
manage a cross cultural workforce
2.4.1 What is Cross -Cultural Communication?
2.4.2 Ways to Manage a Multicultural Team
2.4.3 Multicultural workforce cha llenges and managing strategies
2.4.4 Tips for Improving Cross -Cultural Communication
2.5 Global training and appraisal systems for a cross cultural workforce
2.5.1 What is cross -cultural training?
2.5.2 The 4 essentials of cross -cultural training
2.5.3 The benefits of cross -cultural training
2.5.4 4 tips to creating a successful cross -cultural training plan
2.6 Compensation and performance measure: an international perspective
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28 Global HRM
28 2.6.2 What Are the Fo ur Types of Compensation?
2.6.3 What Is Performance Compensation?
2.7 Self-Assessment question s
2.8 Summary
2.9 Key words
2.0 OBJECTIVE
To Learn:
• What are the cross -cultural teams?
• The challenges of managing a cross -cultural team
• Tips to foster cross -cultural working relationships
• The 4 essentials of cross -cultural training
• How to manage a multicultural team what is cross -cultural
communication?
• How to effectively coach employees?
• What is the focus of employee coaching?
• What is employee coaching?
• Performance evaluation system
• Criteria for selecting expatriates.
2.1 INTRODUCTION
Whenever an organization expands its operations to other countries, it tends
to become multicultural and will then face the challenge of blending va rious
cultures together. The managerial personnel entering another nation need to
adjust their leadership styles, communication patterns and other practices to
fit their host country. Their role is to provide fusion of cultures in which
employees from both countries adjust to the new situation seeking a greater
productivity for the benefit of both the organization and the people of the
country in which it operates.
When managing a global workforce, there are a variety of important factors
to consider that you may not otherwise think about when managing a fully
domestic team. With employees working from countries all across the
world, here are a few elements to keep in mind:
Cultural differences: Global workforces comprise employees from a
variety of geograp hic locales that subscribe to different cultural norms in
terms of workplace conduct, productivity expectations and management
styles. When managing a global workforce, it's essential to be mindful of
and respect these differences.
Language barriers: While some team members from countries around the
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29 Selecting and Managing International Workforce education, others may speak different languages. This can create a language
barrier that may impact communication efficacy, so managers ofte n need to
accommodate language variances.
Time zones: Employees in global locations often work according to
varying time zones, which can significantly affect an organization's ability
to communicate in a timely manner, make projections of productivity and
have a cohesive workflow. With this, it's important to design workflow with
consideration of employees' respective time zones.
Collaboration challenges: It can often be challenging for employees who
work in various time zones and have cultural differences or language
barriers to collaborate with one another. Therefore, managers of global
workforces often need to be purposeful in designing opportunities for
streamlined collaboration.
Community gaps: In a global workforce, it's common for employees to
work r emotely or in different offices. This can create gaps in an
organization's community, so it's important for managers to offer engaging
opportunities for social connection and team -building regularly.
Employment regulations: Countries around the globe have different
employment regulations regarding factors like hiring processes, benefits,
time off and holidays. With this, managers must be careful to adhere to each
of these regulations so that organizations fully comply.
2.2 THE INFLUENCES OF CR OSS CULTURAL ISSUES
ON ORGANISATIONS
Cross culture in the business world refers to a company's efforts to ensure
that its people interact effectively with professionals from other
backgrounds. Like the adjective cross -cultural, it implies a recognition of
national, re gional, and ethnic differences in manners and methods and a
desire to bridge them.
2.2.1 WHAT ARE THE CROSS -CULTURAL TEAMS?
Cross -cultural teams are global teams that include people who come from
different cultures and unique experiences. Companies fail t o consider these
fundamental differences within a team, leading to conflicts and frustration
that can be easily thwarted once you gain a quick understanding of the
individuals in a team.
These differences can stem from communication styles and individual
frame of references. For example, members in some countries are willing to
work more than the stipulated hours of work, even working remotely from
home. On the other hand, workers in different countries may not consider
working beyond the said hours except in emergency situations, and their
mobile devices are switched off when they leave the office.
Another major difference of style in a cross -cultural team is
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30 members vociferously voice their u nfiltered opinions and ideas, those from
hierarchical cultures tend to think a lot before raising their voice. So, how
can you make sure that in such a team all the ideas of the members are heard
equally and manage the team effectively?
2.2.2 THE CHALLENG ES OF MANAGING A CROSS -CULTURAL
TEAM
Though teams are now an accepted norm in planning, strategizing and
operating throughout several organisations, team management is still in an
evolving phase. On top of it, when you unleash an additional element of
diversity, it results in various challenges.
HERE ARE THE TOP BARRIERS IN MANAGING A CROSS -
CULTURAL TEAM:
1. COMMUNICATION AND EXPRESSION
The nuances of communicating in a way such that everybody is on
the same page is a key concern in cross -cultural team s. Everybody
might be speaking the same language and be well -versed in
English, but certain forms of slang or colloquialism can often be
misinterpreted.
Teamwork is a collective onus and all members have to understand
the direction of the discussions cle arly. Communication problems are
often found in virtual teams where there is no face to face interaction.
For instance, it could be an international virtual team or virtual teams
within the same country or city that have to collaborate and finish a
task. In either case, both teams have to make their email and
telephonic conversations as clear as possible to mitigate any
misunderstanding.
They also have to develop a working style of responding promptly to
queries, for if this is not happening, it can get r eally confusing. Care
has to be taken with a cross -cultural mix of people with regards to the
words used. Even mildly sarcastic comments or jokes can be taken
seriously by a team member and result in a conflict.
For instance, your German counterparts may not appreciate your
attempts at small talk, as they usually prefer to get down to business
immediately. Also, making a Hitler joke might land you in serious
trouble!
2. INFORMATION GAPS
Everybody should be on the same wavelength to stay on top of data
and process flows. There should be no manual effort to reconcile
information from different sources. Each and every team member
needs to have access to the right resources at the needed time to
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31 Selecting and Managing International Workforce This especially becomes a challenge with virtual cross -cultural teams.
Having a common software with access to a shared database and
enabling the sharing of files, online chats, scheduling and jointly
tracking projects becomes very important. Effective means to share
resources and access resources in a timely manner is a challenge.
i. WORK STYLE
Every team member has a unique work style that is
predominantly dictated by their culture. Some work cultures
value individual contribution and foster individual opinions.
All fingers are not the same. This also applies to employees who
are individuals with distinct personalities. With unique styles,
individualistic team members tend to come out as aggressive
while the not -so individualistic ones merge into the team and
may seem to contribu te less. Despite the differences in the work
style, it is vital to filter and get the best out of every team
member’s work style.
ii. INFLUENCES
There can be chances that a section or group of the team has
similar cultural identity or homogeneity. They ma y attempt to
dominate the process and try to influence the entire team to
swing their way. As a result, it can create unnecessary tensions
and a frustrating environment for other team members.
Team and group dynamics can be a major concern in a cross -
cultural team. This can lead to unnecessary group politics and
conflicts within a team.
iii. MOTIVATION FACTORS
Normally, companies have a single -threaded motivation and
rewards system that is largely determined by the norms and
values of the company. It doe s not account for the distinct
motivational factors of a cross -cultural team.

The motivators for employees can range from tangible benefits
of increments, bonus, incentives, career progression and
intangible benefits that include recognition, job satisfac tion,
encouragement, etc.
It is important to recognise what motivates each individual to
excel in their role so that you can drive them aptly towards
performance. In the absence of a proper catalyst, the team
members may lack enthusiasm and be less engage d at work.
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32 2.2.3 TIPS TO FOSTER CROSS -CULTURAL WORKING
RELATIONSHIPS
c. GET TO KNOW EACH TEAM MEMBER
It is essential for the team leader to take the time and get to know each
team member. Learn about their story and jo urney. This will help you
analyse individual skills and leverage the knowledge to help the
group. You might uncover specialised skills that can be beneficial to
everyone and also understand the personality of the member at the
same time.
d. ADOPT FLEXIBIL ITY
According to a book named the Cultural Map, scheduling and
decision making are two key workplace values that greatly vary
across cultures. Assessing these values can go a long way to
understand the priorities of your team members. For example,
differen t cultures prioritise either flexibility or a linear time construct
to finish a task.
e. PROMOTE OPEN COMMUNICATION
Give every team member a chance to voice their opinions. An open
communication line is essential for greater efficiency.
Otherwise, team me mbers feel under -appreciated and dominated by
either the management or the dominant players in the group.
When attempting to reach a consensus through virtual meetings, plan
ahead and ensure to send the agenda well in advance to actively solicit
each team member’s opinions.
f. ENCOURAGE TEAM BUILDING ACTIVITIES
When a mix of cultures is trying to come together in a team,
organisations should make every effort to create opportunities for
casual interactions. Happy hours, team outings, lunch and learn,
birthday parties, pantry banter, etc. help employees to bond with each
other despite their differences. Encourage team members to interact
during their downtime and through social events.
g. LISTEN ACTIVELY
Don’t let faulty assumptions and biases to govern yo ur decision
making. For instance, the Mumbai team is never responsive, the
Singapore members don’t take directions well or the Chennai team
wastes many hours in the morning waiting for the Dubai office to
wake up.
These types of biases can eradicate trust and prevent collaboration.
Instead, a leader should pause and attempt to understand why certain
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33 Selecting and Managing International Workforce the local cultures, considerations, needs that impact each team
member, it can lead to unne cessary friction.
Ask questions, listen to your team members and develop the
flexibility to manage across different cultures. Listen and enquire
more to learn different ways to motivate and mobilise groups with
different thought processes.
h. CREATE A ST RUCTURE FOR SUCCESS
When you have a multicultural team, you are bound to have different
work styles. This doesn’t mean everybody should go haywire and
work according to their own methodology. It is up to the leader to
establish clear norms and help the mem bers to adhere.
Rather than imposing a style, leaders should take the necessary steps
to explain the importance of certain norms and train the members to
partake in these efforts. When establishing the norms, try to
implement practices from multiple cultu res to create uniformity.
i. ADDRESS CONFLICT IMMEDIATELY
If a conflict ensues regardless of your efforts, make sure to address it
promptly before it is too late. Understand different cultural
perspectives at play and try to resolve the conflict by taking the middle
path. A leader should serve as a cultural bridge to connect different
members of the team and bring unison.
j. CREATE A CROSS -CULTURAL AWARENESS PROGRAM
You can teach your members how to interact with others in different
regions and countries effectively. Training and awareness can include
sessions on greetings, business etiquette and dining customs. This will
help to dissolve the tension and educate members on the prevalent
cultural styles of other team members.
This will also enable you to i dentify and embrace cultural differences
rather than ignoring them altogether. Organisations will be able to
create resilient global teams and better relationships with clients,
customers across the globe.
k. DEVELOP A TEAM IDENTITY AND CLEARLY DEFINE
ROLE S AND RESPONSIBILITY OF MEMBERS
In a team, it’s important that all members understand the common
goal. Having a shared goal and a common purpose will give your team
an identity that can bring them together. At the same time, clearly
outline the expectation s of each team member and let everyone know
that their contribution matters.
Break down the common goal into actionable steps that define each
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34 collaborate and work together without stepping on ea ch other’s
territory.
l. BUILD GREAT RAPPORT AND TRUST
Building work relations and trust cannot happen overnight. Take the
steps to slowly build an environment for collaboration. Respect
individual differences and understand them to build unity in a
cultu rally diverse team.
2.3 SELECTION, EVALU ATION AND COACHING O F
INTERNATIONAL EMPLOY EES
2.3.1 INTERNATIONAL STAFFING APPROACHES
Organisations involved in international business can be divided into four
types international strategies, Global, Multi -domestic , Transnational and
International strategy.
When a MNE has identified their strategy they look to international markets
for potential growth strategies. Management beliefs are a serious matter,
because it decides how an organisation views itself in rela tion to it wants
and needs to manage human resources in different countries. Employees
who mix with the organisation’s culture and have the ability to engage in
the working environment, is extremely useful, for an international human
resource manager in th e selection process.
Nestle, for example, is hiring employees who have the necessary skills
required to perform actual tasks and whose style, beliefs, and value system
needs to be the same as the organisation. Factors such as local values and
internation al trade theories need to be taken into consideration when
managers create a strategy for international markets. Ethnocentric,
polycentric, geocentric and region -centric is perspectives that managers
themselves present and characterise into question.
A. INTERNATIONAL STRATEGIES.

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35 Selecting and Managing International Workforce 1. GLOBAL STRATEGY.
A firm using a global strategy sacrifices responsiveness to local
requirements withi n each of its markets in favour of emphasizing
lower costs and better efficiency. This strategy is the complete
opposite of a multi -domestic strategy. Some minor modifications to
products and services may be made in various markets, but a global
strategy s tresses the need to gain low costs and economies of scale by
offering essentially the same products or services in each market.
Microsoft, for example, offers the same software programs around the
world but adjusts the programs to match local languages. Si milarly,
consumer goods maker Procter & Gamble attempts to gain efficiency
by creating global brands whenever possible. Global strategies also
can be very effective for firms whose product or service is largely
hidden from the customer’s view, such as sili con chip maker Intel.
Lenovo also uses this strategy. For such firms, variance in local
preferences is not very important, but pricing is.
2. Multi - Domestic Strategy.
A firm using a multi -domestic strategy does not focus on cost or
efficiency but emphasi zes responsiveness to local requirements
within each of its markets. Rather than trying to force all of its
American -made shows on viewers around the globe, Netflix
customizes the programming that is shown on its channels within
dozens of countries, includ ing New Zealand, Portugal, Pakistan, and
India. Similarly, food company H. J. Heinz adapts its products to
match local preferences. Because some Indians will not eat garlic and
onion, for example, Heinz offers them a version of its signature
ketchup that d oes not include these two ingredients. Outback
Steakhouse uses the multi -domestic strategy in the multiple countries
where it operates, adapting to local eating preferences but not
lowering prices significantly.
3. Transnational Strategy.
A firm using a t ransnational strategy seeks a middle ground between
a multi -domestic strategy and a global strategy. Such a firm tries to
balance the desire for lower costs and efficiency with the need to
adjust to local preferences within various countries. For example,
large fast -food chains such as McDonald’s and Kentucky Fried
Chicken (KFC) rely on the same brand names and the same core menu
items around the world. These firms make some concessions to local
tastes too. In France, for example, wine can be purchased at
McDonald’s. This approach makes sense for McDonald’s because
wine is a central element of French diets. In Saudi Arabia, McDonalds
serves a McArabia Chicken sandwich, and its breakfast menu features
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36 4. Internat ional Strategy.
Firms pursuing an international strategy are neither concerned about
costs nor adapting to the local cultural conditions. They attempt to sell
their products internationally with little to no change. When Harley
Davidson sells motorcycles a broad, they do not need to lower their
prices or adapt the bike to local motorcycle standards. People in other
countries buy a Harley particularly because it is different from the
local motorcycles. Buyers want the American look and the sound and
power of a Harley, and will pay for that differentiation. Belgium
chocolate exporters do not lower their price when exporting to the
American market to compete with Hershey’s, nor do they adapt their
product to American tastes. They use an international strategy.
Starbucks and Rolex watches are other examples of firms pursuing
the international strategy.
B. STAFFING APPROACHES.
Once the organisation has chosen their international strategy, they can
now choose and apply one of four staffing approaches in order
to manage their staff in an efficient manner in the organisation.
1. Ethnocentric approach. Countries with branches in foreign
countries have to decide how to select management level
employees. Ethnocentric staffing means to hire management
that is of same na tionality of parent company.
When a company follows the strategy of choosing only from the
citizens of the parent country to work in host nations, it is called
an ethnocentric approach. Normally, higher -level foreign
positions are filled with expatriate employees from the parent
country. The general rationale behind the ethnocentric approach
is that the staff from the parent country would represent the
interests of the headquarters effectively and link well with the
parent country. The recruitment process in this method involves
four stages: self -selection, creating a candidate pool, technical
skills assessment, and making a mutual decision. Self -selection
involves the decision by the employee about his future course
of action in the international arena. I n the next stage, the
employee database is prepared according to the manpower
requirement of the company for international operations. Then
the database is analysed for choosing the best and most suitable
persons for global assignments and this process is called
technical skills assessment. Finally, the best candidate is
identified for foreign assignment and sent abroad with his
consent.
2. Polycentric approach. When a company adopts the strategy of
limiting recruitment to the nationals of the host country (local
people), it is called a polycentric approach. The purpose of
adopting this approach is to reduce the cost of foreign
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37 Selecting and Managing International Workforce adopt the ethnocentric approach may eventually switch over lo
the po lycentric approach. The primary purpose of handing over
the management to the local people is to ensure that the
company understands the local market conditions, political
scenario, cultural and legal requirements better. The companies
that adopt this meth od normally have a localized HR
department, which manages the human resources of the
company in that country. Many international companies
operating their branches in advanced countries like Britain and
Japan predominantly adopt this approach for recruitin g
executives lo manage the branches."
3. Geocentric approach. When a company adopts the strategy of
recruiting the most suitable persons for the positions available
in it, irrespective of their nationalities, it is called a geocentric
approach. Companies t hat are truly global in nature adopt this
approach since it utilizes a globally integrated business strategy.
Since the HR operations are constrained by several factors like
political and ethnical factors and government laws, it is difficult
to adopt this approach. However, large international companies
generally adopt the geocentric strategy with considerable
success.
For international recruitment, especially on foreign soil,
organizations generally use manpower agencies or consultants
with international c onnections and repute to source candidates,
in addition to the conventional sources. For an effective
utilization of the internal source of recruitment, global
companies need to develop an internal database of employees
and an effective tracking system to identify the most suitable
persons for global postings.
4. Region -centric approach. The Geocentric Approach is one
of the methods of international recruitment where the Multi -
National Companies recruit the most suitable employee for the
job irrespective of their Nationality.
The Regio centric approach uses managers from various
countries within the geographic regions of business. Although
the managers operate relatively independently in the region,
they are not normally moved to the company headquarters.
The Regio centric approach is adaptable to the company and
product strategies. When regional expertise is needed, natives
of the region are hired. If product knowledge is crucial, then
parent -country nationals, who have ready access to corporate
sources of i nformation, can be brought in.
One shortcoming of the Regio centric approach is that managers
from the region may not understand the view of the managers
at headquarters. Also, corporate headquarters may not employ
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38 2.3.2 CRITERIA FOR SELECTING EXPATRIATES.
International human resource is a decisive factor of
an organisation’s position and is widely recognized as an influencing factor
for failure and success of international business environments. Internationa l
human resource involves developing human resource capabilities to meet
the diverse needs multinationals organisations. Human resources
and competitive international economy are cannot be easily too duplicated,
as factors of production and can, therefore, provide a competitive advantage
for the organisation.
For the human resource practitioner in charge, it can be challenging to
determine what selection criteria to use when selecting employees for
international assignments. The factors involved in the e xpatriation selection
is, Technical Ability, Cross -Cultural Suitability, Family Requirements,
Organisation -Specific Requirements, Language and MNE requirements.
These factors are all related so they should not be revised separately.
Technical Ability, Cros s-Cultural Suitability and Family Requirements, are
the factors related to the individual, and the Organisation -Specific
Requirements, Language and MNE requirements are mostly influenced by
the working situation they need to enter.
• Technical Ability.
For the selected candidate to perform a task, technical and the needed
managerial skills is necessary. The assessment of
the potential candidate is usually based on their previous working
experience, where statements and evaluation records from the
candidate s superiors is available. When the candidate needs to solve
a problem in a new international business environment, it must be
noted that experience is not that serious. Technical abilities are
fundamentally the knowledge required to carry out a task; techn ical
abilities is associated to the working of tools. An example of technical
abilities can be that financial managers need to make use of business
appraisal tools to assess and set up financial statements like the
income statement and balance sheet.
• Cross-culture suitability.
“According to Dowling and Welch, (2004) important Things to
consider when assessing the candidates cross -culture suitability, is
language skills, culture empathy, the attitude toward new cultures and
the level of personnel and emo tional stability.” In practice, it is not
easy to evaluate the cross -culture suitability of a candidate as it
is hard precisely know what factors should be included. The
multinational enterprise (MNE) emphasizes the importance of
expatriate’s abilities to create and maintain a natural relationship, but
means to measure such abilities is not always accurate enough.
Efficient relationships for example, an analysis of the hypothesis that
culture with evident male dominance is more belligerent and it can be
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39 Selecting and Managing International Workforce • Family Requirements.
The success, of the expatriate abroad can be influenced by
spouse/family, MNE’s sometimes focuses too little on the impact
that family may have on the expatriate. Families find it difficult
to adjust as they can suffer from segregati on due to the subjection
to integrate into new environments. A higher level of organisational
assistance in the primitive phases of expatriation usually links with a
higher level of adjustment by the spouse.
• Organisation -Specific Requirements.
The human resource practitioner needs to consider the organisations
requirements before selecting a candidate, host country governments
can stop the transfer of expatriates. The host government, is the ones
that issue the working permits and visas to the expatriate s, therefore,
the parent country need to prove that there is
no available host national country. Legislations and changes of the
employee must be addressed; assignments abroad means that the
expatriate must move to another country with family to remote or
war-torn environments, where living conditions can
be challenging. Some host countries do not issue work permits to
females, this can make it difficult, for the spouse to adapt. An
organisation -specific requirement is implemented during the
formation of an independent relationship flanked by computer
resources, which includes the evaluation of the comparative
precedence between default recommendation and alternative
recommendation; and using the highest precedence recommendations
to set up a link among the computer resources.
• Language skills.
Language skill is a significant factor, knowledge of the host
country’s language can be considered essential for many top level
management positions, along with the aptitude to communicate
successfully. Knowledge of the host country’s foreign language helps
the expatriates and their families/spouse feel more contented in the
new environment. When adopting a corporate language, which is
different from what the, expatriate local, language, is
a fundamental that language skills need to be viewed as selection
criteria.
• Multinational enterprise (MNE) requirements.
The MNE’s requirements have an enormous impact on the decisions
and which selection criteria to use. Training skills are very important,
so that expatriates can train locals and emphasize negotiating skills in
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40 Global HRM
40 assignment is another factor influencing family/spouse. “According
to Harris and Brewster, (1999) they suggested that international
managers has many similar characteristics as those managers work ing
in less complex environments, but are in need of additional skills
regarding to handle the problems that may arise internationally.”
Technical abilities is an important factor in the case of selecting
international staff, it provides the employee with the basic
understanding of what is included in their tasks and what they believe
they are capable of doing. The multinational enterprise (MNE) view
the experience of expatriate as very important, prolong experience is
needed to have the appropriate knowle dge to develop a successful
organisation.
2.3.3 PERFORMANCE EVALUATION SYSTEM
A performance evaluation system must contain periodic review of
operations so that the objectives of the firm are accomplished. It is important
to have the accounting informatio n to evaluate domestic and foreign
operations’ costs and profitability’s.
It is not all that simple to measure the performance of an individual, a
division, a subsidiary, or even a company as a whole. It is a lengthy and
hectic process. The objectives of performance eYaluation are to í
• Find the economic performance of the firm
• Analyse each unit’s management performance
• Monitor the progress of objectives, including the strategic goals
• Assist in appropriate allocation of resources
a. FINANCIAL AND N ON-FINANCIAL MEASURES OF
EVALUATION
ROI (Return on Investment) í ROI is the most common method to
evaluate the performance of an international firm. It shows the
relationship between profit to invested capital and encompasses
almost all important factors related to performance. An improved ROI
can act as a logical motivator of the managers.
Budget as Success Indicator í Budget is an accepted tool for
measuring and controlling the operations. It is also used to forecast
future operations. A budget is a cle arly expressed set of objectives
that guide the managers to set their individual performance standards.
A good local or regional budget helps the company to facilitate its
strategic planning process smoothly.
Non-Financial Measures í The major non -financi al measures that
can Ee used to eYaluate performance are í Market 6hare, ([change
Variations, Quality Control, Productivity Improvement, and
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41 Selecting and Managing International Workforce b. TYPES OF PERFORMANCE EVALUATION SYSTEMS
Performance evaluation systems can be of the foll oZing types í
• Budget Programming í Budget programming is prepared for
operational planning and financial control. It is an easy -to-
calculate system to evaluate the variance. It is used to measure
the current performance in relation to some comparable
performance metric from the past.
• Management Audit í It is an extended form of financial audit
system which monitors the quality of management decisions in
financial operations. It is used for appraisal and performing
audit for management.
• Programme Eva luation Review Technique (PERT) í Based
on CPM, PERT delineates a given project or program into
network of activities or sub -activities. The goal is to optimize
the time spent by the managers. In this process, performance is
measured by comparing the sched uled time and the cost
allocated with the actual time and the cost.
• Management Information System (MIS) í MIS is an ongoing
system designed to plan, monitor, control, appraise, and redirect
the management towards pre -defined targets and goals. It is a
universally acceptable practice which encompasses the
financial, budgeting, audit and control systems of the PERT.
2.3.4 WHAT IS EMPLOYEE COACHING?
The Society of Human Resources Management (SHRM) defines Employee
coaching as ‘a training method in which a more experienced or skilled
individual provides an employee with advice and guidance intended to help
develop the individual's skills, performance and career.’ Unlike mentoring
coaching is frequently used to assist individuals as they prepare for or move
into new assignments, improve work habits, adapt to a changing
environment or overcome specific obstacles. It is a process of guiding the
person being coached from one level of competency to another.
According to Insala (2020), coaching and mentoring are both career
development programs that are great for your employees, the differences
are very important to understand:
1. Length of Relationship: Coaching relationships are typically shorter
2. Focus of Goals: Coaching is used to achieve very specific goal s that
revolve around employee productivity and performance
3. Coach -Driven Relationship: It is the coach's responsibility to drive
the relationship by setting tasks for the coached to complete.
4. External Coaches: Coaches are usually hired from an outsid e source
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42 According to a 2015 survey from the International Coach Federation (ICF)
and the Human Capital Institute (HCI). The survey found that 51% of
respondents from organizations with strong coaching cultures repor ted
revenue above that of their industry peer group, and 62% of employees in
those organizations rated themselves as highly engaged. Respondents
reported business improvements in the following five areas:
• Improved team functioning.
• Increased engagement .
• Increased productivity.
• Improved employee relations.
• Faster leadership development.
A. WHAT IS THE FOCUS OF EMPLOYEE COACHING?
Employee coaching programs holistically help employees develop
their skills to become more productive and proficient i n performing
their tasks. It is a collaborative practice that happens between a
manager and employee solely focusing on goals, room for
improvements, and strategic steps to achieve success consistently.
The focus of performance coaching is not to make the employee feel
bad, nor is it provided to show how much the HR professional or
manager knows. The goal of coaching is to work with the employee
to solve performance problems and to improve the work of the
employee, the team, and the department. Furthermore coaching
focuses on the employees’ strengths and weaknesses, their natural
skillsets and personal goals, and then help provide them with a clear
pathway to achieving them, as well as the company’s goals, using
performance data and feedback.
Managers can use performance coaching to help employees who are
effective contributors improve and become even more effective
contributors. The time managers spend in performance coaching with
their key performing employees is time well spent. It is more likely to
produce increased results for the organization and the manager's
department and priorities.
Essentially, employee coaching is about helping employees
understand what they are doing well and what they need to improve
to advance their professional development, says Marty Smuin, chief
operating officer of Weave, a business software company. “Having
the ability to understand what you do well, and being able to really
build on that, is a cornerstone in a lot of people’s careers,” he adds.
B. BENEFITS OF EMPLOYEE COACHING
Employee coaching programs are so effective that some of the largest
companies in the world have implemented them. the following are
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43 Selecting and Managing International Workforce a. Developing Your High Potential Employees
Employee coaching allows a n organisation to develop its high
potential employees. These are the employees that you see as
the future leaders of your organization. Developing these
employees is crucial to maintaining your succession pipeline.
b. Creating a Stronger Leadership Team
Employee coaching is not exclusive to lower -level employees.
It's important that you get your leadership team involved in the
coaching program to see improved employee engagement and
retention. Relationships between employees and leaders can
often be stra ined. Bad managerial relationships are often cited
as the top reasons why employees leave an organization.
Because employee coaching focuses on individual skills, your
leaders can each develop the skills needed to effectively manage
their team.
c. Develo ping communication skills
Communication skills are vital to productivity and profitability
for your organization. It’s been revealed that an average of
$62.4 million per year has been lost in large companies due to
poor internal communication. Employee coa ching is a great
way to develop communication skills across your organization.
The skills needed to be a great communicator, including
listening, clarity, and confidence, are easily learned through a
coaching relationship.
Studies have found that organiz ations with strong coaching
cultures have higher engagement and performance. Other
benefits of coaching according to the Institute of Coaching,
McLean affiliate of Harvard Medical School are:
• Empowers individuals and encourages them to take
responsibilit y
• Improves individual performance
• Helps identify and develop high potential employees
• Helps identify both organizational and individual
strengths and development opportunities
• Helps to motivate and empower individuals to excel
• Demonstrates organi zational commitment to human
resource development
C. HOW TO EFFECTIVELY COACH EMPLOYEES?
"Coaching is not about fixing someone. It's about finding out who
they are and building them up," said Heather Christie, president of
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44 workplace coaching is critical to their businesses. The problem is that
while 80% of HR/talent leaders believe coaching is a key leadership
practice, only 15% believe managers in their organizations are good
at it (Fine, 2020) . The Society of Human Resources Management
(SHRM) recommends the following tools when coaching employees:
• Using data from anonymous 360 -degree surveys or climate
analysis surveys to identify objective behaviours that can be
linked with business outcom es. CEOs are very often shocked at
the disparity in their rating and their subordinates' ratings of
them. This might be the first awareness that they are out of
touch.
• Using personality and behavioural assessments to diagnose
which traits and behaviours are dominant or lacking, and which
might be easy or difficult to change.
• Listening actively; the coach does not solve the client's
problems —the client solves his or her problems.
• Helping clients distinguish what is important from what is not.
• Leading clients outside of their comfort zone.
• Acknowledging the client's accomplishments and empathizing
(not sympathizing) when the client is down.
• Providing perspective based on the coach's own experiences.
• Helping the client set goals, develop an action plan for moving
ahead, and anticipate and overcome potential obstacles.
• Recommending specific books or other sources of learning.
• Encouraging journaling to gain awareness of emotions and
behaviours and to track progress toward goals.
• Participating i n role -playing and simulations to promote skill
practice.
• Meeting regularly, with on -the-job "homework" assignments
between meetings.
• Managing the confidentiality of the coaching partnership. In
most cases, the official client is the organization payin g the
coaching invoice, yet the true client is the individual being
coached.
• Designing systems to track the return on investment of
coaching.
After administering the necessary assessments and gathering the relevant
information, it is important to develo p a plan that then addresses the gaps in
coaching. The best coaching plan is a plan that covers all aspects of
coaching in the workplace. Depending on the coaching role and skills you
are seeking, this coaching plan should meet all your needs. munotes.in

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45 Selecting and Managing International Workforce According to an article in the Entrepreneur magazine, a leader can make use
of the following steps when coaching employees:
• Build a Relationship of Mutual Trust : The foundation of any
coaching relationship is rooted in the manager's day -to-day
relationship with the employee. Without some degree of trust,
conducting an effective coaching meeting is impossible.
• Open the Mee ting: In opening a coaching meeting, the manager
needs to clarify, in a nonevaluative, no accusatory way, the specific
reason the meeting was arranged.
• Get Agreement : Probably the most critical step in the coaching
meeting process is getting the employ ee to agree verbally that a
performance issue exists. Overlooking or avoiding the performance
issue because you assume the employee understands its significance
is a typical mistake of managers. To persuade an employee a
performance issue exists, a manager must be able to define the nature
of the issue and get the employee to recognize the consequences of
not changing his or her behaviour.
• Explore Alternatives : Next, explore ways the issue can be improved
or corrected by encouraging the employee to identify alternative
solutions. Avoid jumping in with your alternatives, unless the
employee is unable to think of any. Push for specific alter natives and
not generalizations. You should acknowledge the employee's
suggestion, discuss the benefits and drawbacks of the suggestion, ask
for and offer additional suggestions, and ask the employee to explain
how to resolve the issue under discussion.
• Get a Commitment to Act : The next step is to help the employee
choose an alternative. Don't choose for the employee. To accomplish
this step, the manager must be sure to get a verbal commitment from
the employee regarding what action will be taken and wh en it will be
taken. Be sure to support the employee's choice and offer praise.
• Handle Excuses : Employee excuses may occur at any point during
the coaching meeting. To handle excuses, rephrase the point by taking
a comment or statement that was perceiv ed by the employee to be
blaming or accusatory and recast it as an encouragement for the
employee to examine his or her behaviour. Respond empathically to
show support for the employee's situation and communicate an
understanding of both the content and fe eling of the employee's
comment.
• Provide Feedback : Effective coaches understand the value and
importance of giving continual performance feedback to their people,
both positive and corrective. Positive feedback strengthens
performance. People will naturally go the extra mile when they f eel
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46 2.4 DEVELOPING PLANN ING, COMMUNICATIONS
AND INTERCULTURAL SK ILLS TO MANAGE A
CROSS CULTURAL WORKF ORCE
We often take for granted the way we communicate with one another. Similar
to everything else we learn, the way we m ake interpretations, create
assumptions and form decisions is based on our cultural upbringing. In a
multicultural organization, how employees communicate can set the tone and
foundation for a learning culture.
A productive workforce means creating an env ironment that supports diversity,
while balancing the pressures of management, time and cost. There are many
resources that provide communication tactics in a culturally diverse
organization. However, I believe getting down to the basics is the best way to
understand and implement techniques. I came across an article in AG
Professional, “Multicultural Communication Tips for Today’s World,” that
simplified the best way to promote effective communication. Below are four
simple tips to keep in mind when intera cting and communicating with others
in your organization.
• Keep an open mind
• Have at least some knowledge of people’s cultural backgrounds
• Practice active listening
• Watch your nonverbal communication
• Maintain a personal touch
It is important to un derstand the way people comprehend, communicate and
make decisions across different types of cross -cultural backgrounds. Although
it may be difficult to interpret certain statements and behaviours, there must be
a significant emphasis placed on the concept of acceptance and open
mindedness.
We tend to be unaware of our own biases, placing stereotype and cultural
assumptions on others. Creating an organizational awareness by providing
diversity training ensures employees learn to be culturally mindful and
gradually adaptable when communicating with people of different
backgrounds.
Employees need to feel not only accepted, but valued in an organization. By
attentively listening to the concerns and viewpoints of others, employees will
start to feel confident in the workplace. Active listening means paying attention
to both verbal and nonverbal cues.
2.4.1 WHAT IS CROSS -CULTURAL COMMUNICATION?
Cross -cultural communication involves understanding the similarities and
differences of people from different cultural b ackgrounds and groups to
better communicate information and engage with them. This type of verbal
and nonverbal communication is essential as businesses focus on munotes.in

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47 Selecting and Managing International Workforce increasing workplace diversity. Cross -cultural communication isn’t just for
people in manageme nt positions. Every individual within an organization
should learn the basic skills needed to improve their communication skills,
particularly when working with those who might not share the same points
of view or backgrounds.
• UNDERSTANDING CULTURE
To improve cross -cultural understanding in the workplace, leaders
must first know what “culture” is. Culture doesn’t only mean where
someone comes from. After all, two people from the same country
might identify with very different cultures. Instead, think of culture as
the values, beliefs, behaviours, and attitudes an individual learns from
those within their cultural group. Culture can affect a host of different
things, from decision –making processes to how best to resolve
conflict . A person’s culture may also be informed by things such as
geography, religion, race, or ethnicity.
2.4.2 WAYS TO MANAGE A MULTICULTURAL TEAM
Your native language and your cultural customs are among the main aspects
that make you part of a particular cult ure. Due to cultural differences, there
might be some obstacles to overcome when working in a multicultural team.
A multicultural team is a team whose members originate from various
countries and cultures. Naturally, these people speak different languages as
well.
To be a successful team leader in an environment like this one, do your best
to make all your colleagues feel comfortable. This article will help you
manage a multicultural team, regardless of whether you work in the same
office or remotely.
2.4.3 HOW TO MANAGE A MULTICULTURAL TEAM
1. OVERCOME LANGUAGE AND CULTURAL BARRIERS
When working in a multicultural team, one of the most common
challenges is handling language barriers between employees. If each
team member speaks a different language, you’ ll want to find a
common language you can all use so every member can communicate
with ease.
Once you’ve selected your preferred language of choice, break down
any remaining language obstacles. Here are four useful tips:
Encourage your employees to learn at least a few key phrases in other
languages to make your workplace more inclusive.
1. Encourage your team to learn a few key sentences (or phrases)
in each language.
2. Normalize that asking someone to repeat themselves is fine.
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48 especially when working remotely. If employees have heavy
accents, others might have to ask to hear the same sentence
twice, and both parties should feel comfortable with this.
3. Choose the language that the majority feels comfortable with.
This should be the language used in all meetings and formal
events.
4. If some of your co -workers aren’t fluent in a specific language,
avoid using that language in the workplace.
You might run into additional challenges due to cultural differences.
Here’s how to deal with them:
1. Organize informal gatherings for your team members. This is
an ideal way to learn more about other cultures. For example,
you can talk about what makes a certain culture unique: their
food, holidays, customs, and more.
2. Delegate work assignments according to the cultural customs of
your team members. Keep in mind that every culture has its own
work schedule, vacation rules, and list of holidays. This is truly
important if you’re managing your multicultural t eam
remotely.
2. CONSIDER DIFFERENT CULTURAL COMMUNICATION
STYLES
Every culture nurtures its own communication style, like speaking
patterns and nonverbal communication. Nonverbal communication
includes everything beyond words — gestures, facial expressi ons, and
body language. It’s crucial to understand diverse communication
styles between cultures and speak to your colleagues according to
these rules.
a. High -Context Cultures Use Nonverbal Cues Often.
Communication is usually indirect. While having a d ialogue,
people speak one -at-a-time. When conflicts occur, people tend
to solve issues immediately so they can continue working. Some
“high -context” countries that communicate nonverbally are
Japan, Greece, and numerous Arab nations.
b. Low -Context Cultu res Rely On Words Themselves.
Communication is direct, primarily verbal, and open. When
conflicts arise, people don’t necessarily have to work them out
straight away to continue working. Some “low -context”
countries are the united states, Germany, and Scan dinavian
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49 Selecting and Managing International Workforce c. Multi -Active Cultures Fall Between These Two Categories.
Communication tends to be a combination of nonverbal and
verbal cues, and conflicts can be resolved on the spot or after
the fact. Some “multi -active” countries are Spain, Ita ly, and
Latin America.
Each culture has a unique understanding of nonverbal
communication. Keep in mind that you might have to take a
different approach when talking to your German colleague as
opposed to your team member from Peru.
3. PLAN PROJECTS AROU ND DIFFERENT TIME ZONES
This tip applies to you only if you’re managing the virtual
multicultural team. Supervising a virtual team can be difficult
because you’re not at the same place or time zone as your colleagues.
Let’s say that you live and work in p hoenix, AZ, and your team
members are all located in London, UK. By the time your workday
starts at 9am, your colleagues would have only an hour left before
they head home around 5pm.
You need to organize your work properly and make plans according
to th ese different time zones. Also, keep this in mind when you’re
setting deadlines for your team members.
To avoid any time -related confusion, try using time management
apps. They will help you track project progress and examine
productivity levels by week s o you can see the current activity level
of your employees regardless of time zone.
4. ALLOW PREP TIME WHENEVER YOUR TEAM NEEDS IT
Most of us can smoothly and eloquently express our thoughts when
speaking our native language, but, this isn’t always the ca se when
speaking in foreign languages.
Some team members might feel uneasy in a meeting where the
established speaking is not native to them. They may feel restrained
in these situations, causing a communication barrier.
Remember to give your team — especially those speaking a different
language than what they were raised on — enough time to prepare
themselves when speaking a foreign language. If they need to gather
their thoughts or take time to make a point, don’t interrupt or talk over
them. Be patient and give them the time and space they need to
communicate effectively. This not only improves communication, but
it helps your team members become more confident speaking foreign
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50 5. BE OPEN TO ALL CULTURES AND THEIR DIFFERENCES
The bes t way to show your colleagues that you respect and appreciate
them is by being open to the traditions and values of all cultures. This
means avoiding promoting or embracing only one culture in the
workplace. For instance, during the holiday season, it’s im portant to
vary your decorations so all cultures are included. This way, your
multicultural team will know you respect and embrace whatever they
celebrate during the holidays.
Additionally, you can make an effort to learn more about a particular
culture a nd its characteristics. For example, start by exploring the
cuisine or by watching popular movies from other countries.
6. ORGANIZE A CROSS -CULTURAL TRAINING
To improve workplace happiness and morale , organize cross -cultural
training. The purpose of this training is to overcome cultural
challenges at the office. That way, people will get to know each other
and educate themselves about various cultural beliefs.
This training should highlight:
• How to minimize the culture barriers
• How to avoid stereotypes and prejudices
• How to appreciate your own and the skills of other cultures
• How to improve your social skills
• How to become a better listener
• How to aim your attention on common princ iples rather than
differences
7. AVOID STEREOTYPES
When working in a multicultural team, be extra careful with the
language you use. There’s a balance between being mindful of
cultural differences and relying on stereotypes to make assumptions
about your employees’ behaviours.. The fact that your colleague is
from Japan or France does not dictate every decision your employees
make, and leaning on this logic will likely offend them. Everyone,
regardless of their cultural upbringing, is an autonomous individ ual,
so treat your co -workers in such manner.
To avoid stereotypes, take time to become acquainted with every team
member. Feel free to encourage your colleagues to do so as well. You
need to remind yourself frequently that:
• Each team member has a uniqu e way of working and
communicating with others
• Everyone is an individual and has specific preferences
• Culture shapes behaviour but does not dictate it munotes.in

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51 Selecting and Managing International Workforce 8. PRACTICE EMPATHY
A good leader will always find time to check in with their team
members. This is an effective way to build trust with employees and
promote mutual respect.
While talking with your colleagues, practice empathy. Empathy is
defined as the ability to understand and share the feelings of someone
else. Empathy takes practice, and it’s imp ortant to continually grow
your listening skills when in a leadership role. Making an attempt to
understand what your co -worker is experiencing helps your
relationship with them thrive.
Practicing empathy has additional benefits, too:
• It provides support for multicultural employees so they’ll
continue providing quality work
• It helps them solve issues standing in their way to reach desired
goals
• It helps resolve conflicts quickly and effectively.
9. DELIVER HONEST FEEDBACK
Prov iding your team with honest and constructive feedback is a
significant part of your leadership and management duties. Your
colleagues deserve to know the truth about the quality of their work,
be it positive or negative.
Honest feedback for a multicultura l team is essential.
As a leader of a multicultural team, you have to be cautious about
evaluating someone’s work. Each culture, and even each country, has
a unique way of giving feedback, especially when it’s constructive
and can be easily viewed as nega tive.
2.4.3 MULTICULTURAL WORKFORCE CHALLENGES AND
MANAGING STRATEGIES
Diversity in the workplace is a major challenge for modern organizations.
The basic concept lies in recognizing and maximizing the talents and skills
of the workforce and as a valuabl e asset to any organization, whether for -
profit or not. Today, businesses have an urgent need to recognize and
effectively apply these hidden skills and talents to the diverse workforce.
The multicultural workforce can also be a source of conflict. Staff actions
(e.g. recruitment, dismissal and promotion) are for example attributed to the
state of diversity of a person and there is a possibility of misunderstanding,
misinterpretation or inappropriate behaviour between individuals. People or
groups. It can also cause anxiety, distrust or individual prejudice.
Employees who are respected in the workplace and who are part of the team
will stay with their employer. Staff retention reduces recruitment costs and
has a major impact on the results. A workforce whe re people are understood munotes.in

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52 and communicate effectively can work together productively in integrated
teams. Then conflicts and tensions can be solved more easily. The
management of the multicultural workforce thus becomes essential.
Managing the multicultur al workforce can best be achieved in two
ways:
1. General Strategies
a) Individual Strategies and
b) Organizational Strategies/Approaches
2. Specific Strategies
a) New Employee Orientation
b) Religion Aspects
c) Other Important Strategies
These c an be seen in turn here under:
1. General Strategies:
A) Individual Strategies: the multicultural workforce can be
manages with individual strategies as follows:
a) Proper understanding of the features and the nature of
organizational workforce diversi ty and cultures.
b) Evolving responsiveness in understanding the stand point
and situations of others.
c) Enduring tolerance of cultural diversities.
d) Readiness to discuss the problems of workforce diversity
with different cultures.
B) Organization al Approaches: the multicultural workforce can
be managed with Organizational Approaches as follows:
i. Policies of organization:
• Search for a diversified and multicultural
workforce.
• Encouraging responses to diverse cultural
problems.
• • In orga nization’s Mission statement, there should
be commitment to cultural diversity situations.
ii. Best Practices
• Provision of specially structured benefits packages
and flexible working hours based on diversity in
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53 Selecting and Managing International Workforce iii. Training for Multicultural Diversity
• People are trained enough that makes them capable
of functioning in a diversified & multicultural
workplace.
iv. Organizational Culture
• Including the values and ethics of diversity into
organisational culture.
2. Specific Strategies for Managing Multicultural Workforce :
A) New Employee Orientation:
Orientation and training practices for new employees are
designed to provide very important information on the job. In
orientations verbal expositions are added wi th written materials.
Many employees find this additional burden and could not
remember the concepts at the end. For example English -native
spoken employees have trouble feeling while moving with
employees who speak limited English. This absence of
communi cation skills creates gaps in workflow information.
The proper orientation to new diversified workforce will resolve
this issues to a greater extent.
A human resource managers primary responsibilities are as
follows:
a) Clearly elucidate contents of impo rtant information
highlighting key concepts.
b) Using different methods to send the messages through
video files, audio files, graphics and images which
demonstrates the things that are explained in words may
be helpful.
c) Change the way of communicatio n and designed it to the
literary level of the workforce.
d) Communicate and transfer information in the language of
our fresh employees.
e) Hire an interpreter or select someone suitable from our
current staff to translate.
f) (mployeesெ actiYities for e[ample role -playing of
different situations to enhance their understanding.
g) 8sing Äpeer educatorெ system Zith a Zell -established
employees to supervise and undertake new ones will be
very much helpful. It would be best if exa ct culture match
can be obtained.
h) Demonstrate their understanding using various feedback
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54 i) Contacting employees regularly and verify whether they
are apply what they have learned.
For the successful management of diversified multicultural
work force needs awareness and action. The actions of HR
managers will vary according to the cultural diversity of the
workforce.
B) Religion Aspects:
Many religions command practices regarding the methods of
prayer, personal behaviour, rituals, holidays , clothing and the
like. Honouring the religious beliefs of others is sincerely
followed in Indian culture. Religions may influence workplace
behaviour as well. This should be honoured and should be
accommodated in the work environment.
C) Other Importan t Strategies:
a) Educating the employees about workplace guidelines that relate
to respectful treatment in the workplace.
b) Upkeep and boost all employees to participate themselves fully
in all levels of their respective work environment.
c) Make all em ployees to follow the rules and regulations of work.
d) Engaging an employee who is voluntarily interested who may
be a co -worker who have an association for all new diversified
employees. He should be supportive in listening and following
up of employees „anxieties regarding work and work related
interactions.
e) Developing employee evaluation systems and make employees
understanding the purpose and procedures of such evaluations.
f) Discussion with the employees regarding their need at work and
the dr ivers of satisfaction.
g) Also having discussions with the employees regarding their
preferences in the workplace. And it should be noted that all
workers may not necessarily have the same preference.
h) Technological support – Today, technological aspec ts are
playing a great role in managing multicultural workforce.
THE FOLLOWING BENEFITS ARE REALIZED WITH
MULTICULTURAL WORKFORCE.
1. Diverse cultural perceptions can stimulate creativity and initiate
inventions and innovations.
2. Cultural diversity a nd local knowledge means higher quality which
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55 Selecting and Managing International Workforce 3. Culturally diversified workforce means pool of talents which makes
possible to keep the best talents in the organization
4. Diversified workforce and skills provides organizati ons a broader and
more adaptable range of products and services.
5. Culturally diversified workforce are more productive and also
perform better
6. It ensures Countless opportunities for personal and professional
growth of employees and organization.
CHALLENGES:
Multicultural workforce pose the following challenges:
1. Colleagues of some cultural background may hesitate to express their
views freely because of the barriers imposed by their culture.
2. Integration between multicultural teams may be di fficult in the light
of prejudices or negative cultural stereotypes
3. Different cultures and languages possess challenges for professional
communication.
4. Managing visa requirements, labour laws and the costs of adapting to
the needs of the workplace maybe difficult.
5. Diverse people can have different professional etiquette.
6. Individuals in a team can have different work routines.
2.4.4 TIPS FOR IMPROVING CROSS – CULTURAL
COMMUNICATION
Intercultural communication in the workplace can become an issu e for
many businesses due to some thinking it’s just too difficult to solve.
Understanding cultural differences can seem like a monumental challenge,
but it’s one in full reach of any organization willing to put in the time and
effort. The following tips w ill help anyone seeking to communicate
effectively.
1. Have an Open Mind
Many companies have learned that there’s more than one way to
accomplish a goal. Even so, they can become close -minded when
learning information about other cultures. Don’t fall into this line of
thinking. Keep an open mind and learn all you can about a variety of
different cultures. Feel free to ask questions at appropriate times. In
the process of learning, you might come across a new way of thinking
that can help out in business de cisions.
2. Learn to Adapt
Interacting with other cultures often requires some flexibility and
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56 changes and learn new things. This might come from a fear of failure
or worries that thes e changes won’t lead to better results. Try to drive
those thoughts away and accept that improvement is part of life. Be
more willing to try new things and learn about different ways of
thinking. Feel free to experiment with new ideas and see how they
impr ove yourself and your company.
3. Develop Self -Awareness
Every person makes assumptions about other people. The first step to
correcting those assumptions is recognizing you have them. This
involves becoming more self -aware. One of the most effective ways
to do this is to look at how you communicate with others. Go back in
your emails and note how you respond. Do you react differently
depending on the person you’re responding to? Do you factor in
another person’s culture? How inclusive are you in the proje cts you
assign and activities you hold? More introspection will lead to better
outward communication.
4. Open Communication Channels
Improving cross -cultural communication also requires improving
organizational communication in general. Companies that don ’t
foster open communication will find it more challenging to
understand people from different backgrounds better. Improving
communication means opening up those channels so that people feel
free and comfortable to voice their thoughts and share informatio n.
Invite team members with diverse perspectives to share their
opinions. Stronger relationships get built by opening lines of
communication and encouraging curiosity at all times.
5. Encourage Face -to-Face Interactions
Try encouraging people to have more in-person interactions or, if
that’s not possible, at the very least face -to-face dialogue over
services like Zoom or Microsoft Teams. These interactions help
people get to know others and can make communication easier. While
email and direct messages can be convenient, they take away from the
human element that’s so important for understanding people of other
cultures. Make time for these meetings, and you’ll see cross -culture
communication improve.
2.5 GLOBAL TRAINING AND APPRAISAL SYSTEM S
FOR A CROSS CULTURAL WORKFORCE
The global workforce is becoming increasingly multicultural, and not just
for companies with international reach. It’s not uncommon to hear of an
American manager in the US leading a team with Australian, Indian,
Chinese, and European m embers. More and more companies are in business
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57 Selecting and Managing International Workforce Furthermore, physical borders no longer separate today’s virtual
workplaces.
Naturally, all of this requires employers and employee s alike to have some
degree of awareness and understanding of the cultures they are interacting
with and the communication skills to go with it. Being culturally insensitive
means running the risk of offending colleagues and clients and alienating
employee s, which can hit productivity and the company bottom line. That’s
just how important culture is to how business is conducted.
2.5.1 WHAT IS CROSS -CULTURAL TRAINING?
Cross -cultural training (also called intercultural training or cultural
competence training ) equips employees with the awareness, knowledge,
and skills they need to overcome cultural challenges in the workplace. It
helps improve intercultural communication and close the cultural gaps that
are often behind workplace conflicts, missed opportunitie s, and project
failures.
Cross -cultural training could be as simple as employees learning how to
pronounce their colleagues’ names correctly or employers forbidding the
use of racial language and humour in the office, even in countries where it
is accepte d workplace behaviour. But a well -rounded cross -cultural training
program goes beyond such common courtesies. It addresses more complex
themes such as the best ways to deliver criticism and feedback (which vastly
differ from country to country) or how to b uild trust and lasting
relationships with people from diverse cultures.
• CULTURE IS DIVERSE
Most of us associate cross -cultural training with national cultures
(American, Chinese, Japanese, etc.). But culture can mean a lot of different
things:
• Ethnici ty, religion, gender, and sexual identity create diverse groups
of people who have their own unique ways of working.
• Different age groups – Baby Boomers, Millennials, Gen Z, etc. – have
their own distinctive cultures shaped by the experiences of their
generation.
• Company culture is defined by the vision of an organization’s
founders or current leadership.
• Cultural differences might even exist between employees who equate
career progress with academic credentials and those who put on -the-
job training o ver educational performance.
• An effective cross -cultural training plan takes all of these cultures into
consideration.
2.5.2 THE 4 ESSENTIALS OF CROSS -CULTURAL TRAINING
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58 1. Increase aw areness: By gaining awareness, employees recognize
that cultural differences exist. They learn to understand diverse
cultural behaviours and motivations and avoid stereotypes. Cultural
awareness also gives them greater control over their own behaviour
and actions, ensuring that these aren’t subconsciously controlled by
their own cultures.
2. Clear the lines of communication: Employees learn to communicate
in an open, honest, respectful, and transparent manner. Good
communication starts with being a good li stener. With the right
training, employees become active listeners who can pick up
important cues even in conversations in unfamiliar languages. They
interpret what they have heard within a broader framework of
understanding. They also learn to deal smooth ly with communication
problems and not just take the opposing stand, which people are
naturally inclined to do in such situations. Communication lies at the
root of most workplace cultural problems, so it can be said that
effective communication is the mos t important aspect of a cross -
cultural training program.
3. Impart skills: Interpersonal skills, empathy, tolerance, adaptability ,
and emotional intelligence are some of the ski lls critical to becoming
culturally competent. But a cross -cultural training program is more
balanced when it also helps participants pick up more generic skills
such as communication, negotiation, sales, management,
and leadership.
4. Create a culture of diversity: Employees, especially those in
managerial and leadership positions, learn the importance of building
an inclusive work environment where people from different cultures
feel accepted and empowered.
2.5.3 THE BENEFITS OF CROSS -CULTURAL TRAINING
Intercultural training is advantageous to both employees and employers in
various ways:
• It demystifies different cultures and makes us look at them more
objectively. This stops us from labelling people and giving in to
stereotypes, and helps us deal wit h people with a sensitivity and
empathy that we might have otherwise lacked.
• It helps us overcome personal biases and preconceptions, which are
detrimental to how we function in the workplace.
• Better understanding of another’s culture improves communic ation
and leads to more open dialogue. It also helps us build strong people
skills, which are beneficial in both work and life situations and can
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59 Selecting and Managing International Workforce • Cross -cultural training builds trust and creates lasting relati onships,
which is why teams with culturally competent members are likely to
be more cohesive and united.
• Through self -examination, cross -cultural training helps us recognize
our strengths and the areas where we need to improve. This gives us
a better und erstanding of our roles in the team or organization.
• Culturally intelligent employees provide better insights into foreign
markets, which vastly improves the company’s prospects in those
markets.
• Cross -cultural training offers the tools that employees need to adapt
quickly and confidently to their fast changing workplaces.
2.5.4 4 TIPS TO CREATING A SUCCESSFUL CROSS -CULTURAL
TRAINING PLAN
1. Encourage introspection: Learning about other cultures is a given in
cross -cultural training. But a successfu l learning program also
requires self -examination. It makes participants take a long hard look
at themselves and discover their own prejudices, preconceptions, and
cultural values that subconsciously colour their judgments and
actions. It encourages them t o be more accepting of foreign cultures,
improve the quality of their intercultural interactions, and develop a
global mindset. It can be said that the training has taken effect when
participants start viewing other cultures without judgment, strive for
understanding and inclusion, and are eager to try new things.
2. Achieve global dexterity: For a cross -cultural training program to be
effective, it’s not enough to teach employees about cultural
differences – that American managers couch their criticism in
compliments while their German counterparts are more direct, for
example. More importantly, the training must equip employees to
adapt and adjust their behaviour and actions to those cultural
differences in the most productive way. It must help them get
comfortable with acting out of their natural styles. This skill is called
global dexterity. Andy Molinsky, author of the book Global
Dexterity, defines global dexterity as “the ability to successfully adapt
your behaviour in a foreign culture without losing yourself in the
process. It’s about ‘fitting in’ without ‘giving in’ – learning to adapt
your behaviour to the new cultural rules, but doing so in a way that’s
within your own personal comfort zone.” Molinsky explains that
global dexterity is essential to successfully performing difficult tasks
that are culturally -sensitive – such as giving or receiving feedback,
conducting a performance review, or delivering bad news .
3. Don’t forget non -verbal communication: Effective communication
is central to being culturally competent. But remember, not all
communication is verbal. Many cultures communicate through
gestures and body language. The Japanese use fewer hand, arm, an d
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60 Global HRM
60 neutral in comparison to Americans. Similarly, looking your
American client in the eye while making a business proposal is not a
form of disrespect but, in fact, shows interest. Addit ionally, the same
gesture can hold completely different meanings across cultures.
Nodding your head, for example, symbolizes both agreement and
disagreement, depending on where you are. Non -verbal
communication is not only routine in business dealings but it holds
information that can be immensely important to your decisions and
lead to greater business success. Your customer’s gestures, facial
expressions, tone of voice, and even the clothes they wear can both
affirm and contradict their spoken words. A we ll-rounded cross -
cultural training program helps participants pay attention to these little
details and interpret them correctly while also watching their own
body language.
4. Deliver it right: Like any corporate learning and development
program, the ef fectiveness of cross -cultural training lies in its content
and delivery. A single page of instructions on the company website or
a one -size-fits-all approach is bound to fail. Using more than one
mode of training – classroom training, online workshops, rol e-play,
case studies, mentoring, lunch and learn, etc – increases chances of
engagement, learning, and retention. Corporations that can afford it
should sponsor employee rotation programs, diversity summits, and
cultural seminars so that employees can actu ally travel to different
destinations and get a real feel of the cultures they are studying.
Including informal learning opportunities – a discussion over lunch
after a formal training session, for example – adds value to the training
program. Trainers sho uld have in -depth knowledge of their subjects
and be prepared to answer any questions that might arise. At the same
time, they must be patient with their audience, which might hesitate
to communicate in a foreign language or be uncomfortable in an
unfamili ar culture. Companies must keep in mind that cultural
awareness is a continuous learning process. Therefore, a cross -
cultural training program should be a regular feature of their learning
and development initiatives.
2.6 COMPENSATION AND PERFORMANCE MEA SURE:
AN INTERNATIONAL PER SPECTIVE
2.6.1 WHAT IS PERFORMANCE AND COMPENSATION
MANAGEMENT?
Since one of the goals of an organization’s compensation strategy is to
encourage high employee performance (and thus meet key business goals),
compensation should be a natural piece of your overall performance
management strategy. Performance and compensation management unites
performance management and compensation management under one
umbrella so an employee’s job -related performance is more directly tied to
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61 Selecting and Managing International Workforce 2.6.2 WHAT ARE THE FOUR TYPES OF COMPENSATION?
Compensation can mean different things in different companies depending
on their industry and workforce. The four types of direct compensation for
employees you’ll see most often are:
1. Hourly Pay/Wage: The most common and direct form of
compensation. Typically used with unskilled, semi -skilled, and part -
time positions.
2. Salary: Customarily a yearly amount that is split evenly into pay
periods so that workers receive the same amount every pay check
throughout the year. Positions that require more education or specific
skills generally pay a salary.
3. Commission: Commission -based compensation is designed to
incentivize employees to produce at a high level and may be used in
certain industries where the employer cannot guarantee a consistent
workload.
4. Bonuses: Bonuses give businesses a flexible option to reward
employees additionally for great performance.
2.6.3 WHAT IS PERFORMANCE COMPENSATION?
Performance compensation encourages employees to do their best work and
rewards them for achieving goals or objectives. It is typically an additional
compensation component, alongside fixed pay. Pay -for-performance
compensation is variable and depends on the performance of the worker.
Let’s discuss two major ways to combine compensation and performance
management, based on insights shared in the webinar mentioned above, in
order to help employees and management get on the same page.
1. Build a Pay -for-Performance Compensation Strategy
By linking per formance and compensation management efforts,
employers not only provide clear compensation guidelines for
themselves, but they can help employees understand their value and
work to increase it.
HR professionals should lead these strategic planning effort s by first
working with senior leadership to create these strategies (and
subsequent tactics). Second, you’ll want to make sure these strategies
are tied to applicable data —because your people will want proofs.
Data from your performance management efforts can help in this
process.
As you go about discussing what your strategies might be, consider
the three things PayScale’s Mary Lasky says your pay -for-
performance compensation strategy should achieve:
1. Compensation should be fair and consistent with the value of an
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62 Global HRM
62 2. Compensation increases should come at an appropriate pace and
reflect the employee’s ongoing performance as well as changes
in the labor market.
3. Compensation should motivate higher levels of performance
from all employees.
Obviously, there are many ways to reward performance beyond a
mere money payment. And depending on your situation (e.g.,
industry, company size, growth stage, etc.), you will want to mix base
pay with a variety of other incentives. What’s impor tant is that you do
put the time into coming up with a thoughtful mix of monetary and
non-monetary incentives that fit your unique organization, tie them to
specific performance metrics, and then be prepared to pay up on a
consistent basis.
As Whitlock po ints out, since rewards don’t have to be monetary and
they don’t have to be scheduled, you can get creative with them. If
you know a particular high performer loves the orchestra, get him/her
tickets to an upcoming concert. Maybe you want to reward an enti re
team for putting on a successful event? Provide them with a catered
lunch. And of course, traditional bonuses go a long way when you tie
them to specific work accomplishments.
If you’re strapped for cash or have a smaller budget, you can provide
employ ees with other rewards that still show you value their
performance. A one -on-one lunch with the CEO or another senior
leader will go a long way with ambitious employees. You can offer
high performers a paid day off after a crucial deadline. Or maybe give
employees who have shown the ability to be self -starters the ability to
work remotely.
2. Improve Pay Communication
But don’t run too fast. There is some aligning that needs to take place
before you discuss your pay -for-performance strategies with your
people.
According to the CBPR survey mentioned above, two -thirds of the
employees who felt they were underpaid were at least paid at market
value, and 35 percent were actually paid above market value. So what
is the problem? Perception!
Compensation is an ex change of value, and as we’ve already
discussed, value is about perception. So, even if you come up with a
perfect strategy to compensate your people according to their real
value, it’ll be for nothing if they don’t understand it.
These misperceptions are why it is so important to be transparent with
employees about their compensation and to align their perceptions
with reality. Managers should be prepared to talk about compensation
on an individual basis and match the value they provide (e.g., pay, munotes.in

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63 Selecting and Managing International Workforce benefi ts, experience, flexibility, etc.) with the specific value an
employee provides (e.g., experience in industry, experience in
discipline, product and competitor knowledge, etc.).
After HR has worked with senior leadership to create a strategic
compensation plan, they need to educate managers and train them to
communicate the plan with individual employees. Whitlock
recommends HR provide managers with the following
“communication toolkit”:
• Compensation plan talking points
• Compensation plan information
• Details for each employee they supervise
• Tips for each type of conversation they may have
Managers should walk away from their training prepared to discuss
the compensation strategy wi th employees, use data to show the whys
of the strategy, and know how to implement SMART goals with
specific employees to both show their value and offer paths for
increased compensation.
2.7 SELF -ASSESSMENT QUESTIONS
FILL IN THE BLANK
1. Whenever an o rganization expands its operations to other countries,
it tends to become ______________ and will then face the challenge
of blending various cultures together.
2. _________________in the business world refers to a company's
efforts to ensure that its peo ple interact effectively with professionals
from other backgrounds.
3. A firm using a ______________ sacrifices responsiveness to local
requirements within each of its markets in favour of emphasizing
lower costs and better efficiency.
4. A firm using a _____________________ does not focus on cost or
efficiency but emphasizes responsiveness to local requirements
within each of its markets.
5. A firm using a ___________________ seeks a middle ground
between a multi -domestic strategy and a global strategy.
6. Firms pursuing an ___________________ are neither concerned
about costs nor adapting to the local cultural conditions.
7. ______________ staffing means to hire management that is of same
nationality of parent company.
8. The __________________ is one of the methods of international
recruitment where the Multi -National Companies recruit the most
suitable employee for the job irrespective of their Nationality. munotes.in

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64 Global HRM
64 9. The ____________________ emphasizes the importance of
expatriate’s abilities to create and maintain a natural relationship, but
means to measure such abilities is not always accurate enough.
10. ___________________ system must contain periodic review of
operations so that the objectives of the firm are accomplished.
11. _________________ i s the most common method to evaluate the
performance of an international firm.
12. __________________ involves understanding the similarities and
differences of people from different cultural backgrounds and groups
to better communicate information and en gage with them.
13. __________________is direct, primarily verbal, and open
14. _________________ means pool of talents which makes possible to
keep the best talents in the organization
15. The ______________ is becoming increasingly multicultural, and not
just for companies with international reach.
16. ________________ equips employees with the awareness,
knowledge, and skills they need to overcome cultural challenges in
the workplace.
17. ___________________ encourages employees to do their best wo rk
and rewards them for achieving goals or objectives
ANSWER
1. Multicultural
2. Cross culture
3. global strategy
4. Multi -domestic strategy
5. Transnational strategy
6. International strategy
7. Ethnocentric
8. Geocentric Approach
9. multination al enterprise
10. A performance evaluation
11. Return on Investment
12. Cross -cultural communication
13. Communication
14. Culturally diversified workforce
15. global workforce
16. Cross -cultural training
17. Performance compensation munotes.in

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65 Selecting and Managing International Workforce TRUE OR FALS E
1. Global workforces comprise employees from a variety of geographic
locales that subscribe to different cultural norms in terms of
workplace conduct, productivity expectations and management
styles.
2. Employees in global locations often work accordin g to varying time
zones, which can significantly affect an organization's ability to
communicate in a timely manner, make projections of productivity
and have a cohesive workflow.
3. Members in some countries are willing to work more than the
stipulated hours of work, even working remotely from home.
4. Information gaps is the top barriers in managing a cross -cultural team.
5. When you have a multicultural team, you are not bound to have
different work styles.
6. Understand different cultural perspe ctives at play and try to resolve
the conflict by taking the middle path.
7. When a company adopts the strategy of limiting recruitment to the
nationals of the host country (local people), it is called a Ethnocentric
Approach.
8. When a company adopts the strategy of recruiting the most suitable
persons for the positions available in it, irrespective of their
nationalities, it is called a geocentric approach.
9. International human resource is a decisive factor of
an organisation’s position and is wid ely recognized as an influencing
factor for failure and success of international business environments.
10. When the candidate needs to solve a problem in a new international
business environment, it must be noted that experience is serious.
11. Languag e skill is a significant factor, knowledge of the host
country’s language can be considered essential for many top level
management positions, along with the aptitude to communicate
successfully.
12. Budget is not an accepted tool for measuring and contr olling the
operations.
13. Managers can use performance coaching to help employees who are
effective contributors improve and become even more effective
contributors.
14. Employee coaching does not allow an organisation to develop its high
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66 Global HRM
66 15. A person’s culture may also be informed by things such as geography,
religion, race, or ethnicity.
16. A multicultural team is a team whose members originate from various
countries and cultures.
17. Verbal communication includes everyth ing beyond words —
gestures, facial expressions, and body language.
18. A good leader will always find time to check in with their team
members.
19. Today, technological aspects are playing a great role in managing
multicultural workforce.
ANSWER
TRU E (1, 2, 4, 6, 8, 9, 11, 13, 15, 16, 18, 19)
FALSE (3, 5, 7, 10, 12, 14, 17)
MATCH THE COLUMN a) Hourly Pay/Wage 1. Positions that require more education or specific skills generally pay a salary. b) Salary 2. designed to incentivize employees to produce at a high level c) Commission 3. give businesses a flexible option to reward employees additionally for great
performance. d) Bonuses 4. Typically used with unskilled, semi-skilled, and part -time positions.
ANSWER
a) 4
b) 1
c) 2
d) 3
WRITE SHORT ANSWE RS
Q1. Explain culture with the help of examples.
Q2. Discuss some issues on cultural differences.
Q3. What are some measures that can be taken to coach international
employees?
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67 Selecting and Managing International Workforce 2.8 SUMMARY
Whenever an organization expands its operations to other countries, it tends
to become multicultural and will then face the challenge of blending various
cultures together. With employees working from countries all across the
world, here are a few elements t o keep in mind Cultural differences,
Language barriers, Time zones, Collaboration challenges, Community
gaps.
Cross culture in the business world refers to a company's efforts to ensure
that its people interact effectively with professionals from other
backgrounds. Cross -cultural teams are global teams that include people who
come from different cultures and unique experiences.
The nuances of communicating in a way such that everybody is on the same
page is a key concern in cross -cultural teams. Teamwor k is a collective onus
and all members have to understand the direction of the discussions clearly.
When a MNE has identified their strategy they look to international markets
for potential growth strategies. A firm using a global strategy sacrifices
responsiveness to local requirements within each of its markets in favour of
emphasizing lower costs and better efficiency. A firm using a multi -
domestic strategy does not focus on cost or efficiency but emphasizes
responsiveness to local requirements within each of its markets. A firm
using a transnational strategy seeks a middle ground between a multi -
domestic strategy and a global strategy. Firms pursuing an international
strategy are neither concerned about costs nor adapting to the local cultural
conditio ns.
Once the organisation has chosen their international strategy, they can
now choose and apply one of four staffing approaches in order
to manage their staff in an efficient manner in the organisation.
Ethnocentric approach. Countries with branches in f oreign countries have
to decide how to select management level employees. Polycentric
approach. When a company adopts the strategy of limiting recruitment to
the nationals of the host country (local people), it is called a polycentric
approach. Geocentric approach. When a company adopts the strategy of
recruiting the most suitable persons for the positions available in it,
irrespective of their nationalities, it is called a geocentric approach. Region -
centric approach. The Geocentric Approach is one of the methods of
international recruitment where the Multi -National Companies recruit the
most suitable employee for the job irrespective of their Nationality.
International human resource is a decisive factor of
an organisation’s position and is widely recogni zed as an influencing factor
for failure and success of international business environments. For the munotes.in

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68 Global HRM
68 selected candidate to perform a task, technical and the needed managerial
skills is necessary.
The multinational enterprise (MNE) emphasizes the importan ce of
expatriate’s abilities to create and maintain a natural relationship, but
means to measure such abilities is not always accurate enough.
ROI (Return on Investment) í ROI is the most common method to
evaluate the performance of an international firm . Budget as Success
Indicator í Budget is an accepted tool for measuring and controlling the
operations. It is also used to forecast future operations. Non-Financial
Measures í The major non -financial measures that can be used to evaluate
performance are í Market Share, Exchange Variations, Quality Control,
Productivity Improvement, and Percentage of Sales.
Employee coaching programs holistically help employees develop their
skills to become more productive and proficient in performing their tasks.
Diver sity in the workplace is a major challenge for modern organizations.
Managing the multicultural workforce can best be achieved in two
ways General Strategies and Specific Strategies. General Strategies
categorized into two Individual Strategies and Organiz ational
Strategies/Approaches. Specific Strategies into three New Employee
Orientation, Religion Aspects and Other Important Strategies
Intercultural communication in the workplace can become an issue for
many businesses due to some thinking it’s just to o difficult to solve. Few
tips that will help anyone seeking to communicate effectively Have an
Open Mind, learn to adapt, Develop Self -Awareness, Open
Communication Channels, Encourage Face -to-Face Interactions
The global workforce is becoming increasing ly multicultural, and not just
for companies with international reach. Cross -cultural training (also called
intercultural training or cultural competence training) equips employees
with the awareness, knowledge, and skills they need to overcome cultural
challenges in the workplace.
Performance and compensation management unites performance
management and compensation management under one umbrella so an
employee’s job -related performance is more directly tied to their
compensation.
The four types of direc t compensation for employees you’ll see most often
are: Hourly Pay/Wage, Salary , Commission , Bonuses. Performance
compensation encourages employees to do their best work and rewards
them for achieving goals or objectives. In order to help employees and
management Build a Pay -for-Performance Compensation Strategy and
Improve Pay Communication. munotes.in

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69 Selecting and Managing International Workforce 2.9 KEYWORDS
• Cross -cultural - learning to value other cultures and respect their
views.
• Performance evaluation - the process of systematically assessing an
employee's performance.
• Cultural differences - the various beliefs, behaviours, languages,
practices and e xpressions considered unique to members of a specific
ethnicity, race or national origin.
• Language barriers - a barrier to communication between people who
are unable to speak a common language.
• A multinational enterprise MNE - an enterprise producing goods or
delivering services in more than one country.
• Global strategy - sacrifices responsiveness to local requirements
within each of its markets in favour of emphasizing lower costs and
better efficiency.
• Multi - domestic strategy - does not focus on cost or efficiency but
emphasizes responsiveness to local requirements within each of its
markets.
• Transnational strategy - seeks a middle ground between a multi -
domestic strategy and a global strategy.
• International strategy - neither concerned about costs nor adapting
to the local cultural conditions.
• Ethnocentric approach means to hire management that is of same
nationality of parent company.
• Polycentric approach - when a company adopts the strategy of
limiting recruitment to the nationals of t he host country (local people)
• Geocentric approach - when a company adopts the strategy of
recruiting the most suitable persons for the positions available in it,
irrespective of their nationalities
• Region -centric approach - uses managers from various countries
within the geographic regions of business.
• Technical ability – the selected candidate to perform a task, technical
and the needed managerial skills is necessary.
• Cross -culture suitability - it is not easy to evaluate the cross -culture
suitabi lity of a candidate as it is hard precisely know what factors
should be included.
• ROI (return on investment) - the most common method to evaluate
the performance of an international firm.
• Budget as success indicator - tool for measuring and controlling the
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70 Global HRM
70 • Non-financial measures í measures that can Ee used to eYaluate
performance are í market share, e[change Yariations, Tuality control,
productivity improvement, and percentage of sales.
• Budg et programming í prepared for operational planning and
financial control
• Management audit í it is an extended form of financial audit system
which monitors the quality of management decisions in financial
operations.
• Programme evaluation review techni que (pert) í performance is
measured by comparing the scheduled time and the cost allocated
with the actual time and the cost.
• Management information system (MIS) í MI6 is an ongoing
system designed to plan, monitor, control, appraise, and redirect the
management towards pre -defined targets and goals.
• Length of relationship - coaching relationships are typically shorter
• Focus of goals - coaching is used to achieve very specific goals that
revolve around employee productivity and performance
• Coach -driven relationship - it is the coach's responsibility to drive
the relationship by setting tasks for the coached to complete.
• External coaches - coaches are usually hired from an outside source
and are not part of the organization.
• Cross -cultural commun ication - understanding the similarities and
differences of people from different cultural backgrounds and groups
to better communicate information and engage with them.
• Individual strategies - the multicultural workforce can be manages
with individual s trategies.
• Organizational approaches - the multicultural workforce can be
managed with organizational approaches.
• New employee orientation - orientation and training practices for
new employees are designed to provide very important information
on the job
• Religion aspects - many religions command practices regarding the
methods of prayer, personal behaviour, rituals, holidays, clothing and
the like.
• Culture is diverse - appreciating that society is made up of many
different groups with different int erests, skills, talents and.
• Hourly pay/wage - the most common and direct form of
compensation.
• Salary - customarily a yearly amount that is split evenly into pay
periods so that workers receive the same amount every pay check
throughout the year.
• Commission - commission -based compensation is designed to
incentivize employees to produce at a high level and may be used in munotes.in

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71 Selecting and Managing International Workforce certain industries where the employer cannot guarantee a consistent
workload.
• Bonuses - bonuses give businesses a flexible opti on to reward
employees additionally for great performance.
REFERENCE:
https://allthingstalent.org/managing -cross -cultural -team/2019/10/30/
https://www.investopedia.com/terms/c/cross -culture.asp
https://theintactone.com/201 9/02/09/shrm -u4-topic -3-recruiting -and-
selecting -staff-for-international -assignments/
https://www.whatishumanresource.com/international -recruitment
https://pressbooks.lib.vt.edu/strategicmanagement/chapter/9 -4-types -of-
international -strategies/
https://www.tutorialspoint.com/international_business_management/perfo
rmance_issues.htm
https://www.thehumancapital hub.com/articles/employee -coaching -what -
you-need-to-know -and-why
https://trainingindustry.com/blog /diversity -equity -and-inclusion/strategies -
for-effective -cross -cultural -communication -within -the-workplace/
https://leaders.com/articles/company -culture/cross -cultu ral-
communication/
https://www.fond.co/blog/9 -ways -multicultural -team/
https://www.ijltemas.in/DigitalLibrary/Vol.7Issue3/174 -181.pdf
https://www.learnit.com/blog/cross -cultural -training -and-its-importance -
in-the-global -workforce
https://www.bamboohr.com/blog/compensation -performance -management
https://www.mbaknol.com/international -business/managing -an-
international -workforce/
https://www.indeed.com/career -advice/career -development/managin g-
global -workforce
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72 3
INTERNATIONAL ORGANISATIONS AND
INDUSTRIAL RELATIONS
Unit Structure
3.0 Objective
3.1 Introduction
3.2 Corporate Culture and Change
3.2.1 What Is Culture Change in the Workplace?
3.2.2 Why Is Organizational Culture so Difficult to Change?
3.2.3 Reasons for Changing Organizational Culture
3.2.4 Internal and External Change
3.2.5 Quality of a great organizational culture
3.3 Policies and Practices of Multinational companies
3.3.1 What are HR policies?
3.3.2 The Right Way To Write HR Policies
3.3.3 One HR Policy, Many Benefits
3.3.4 How Do You Build A Willing Workforce?
3.3.5 Global HRM Practices
3.4 Employment and Labour Laws: an international perspective
3.4.1 Definition of International Labour Law
3.4.2 Purpose of international labour law
3.4.3 Global Instruments of international labour law
3.5 The Influence of Trade Union
3.6 Equal Opportunity
3.7 Employee Relations
3.7.1 What is Employee Relations
3.7.2 Employee Relat ions Skills Set
3.8 Self-Assessment Question
3.9 Summary
3.10 Keywords munotes.in

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73 International Organisations and Industrial Relations 3.0 OBJECTIVES
To Learn:
• What Is Culture Change in the Workplace?
• Why Is Organizational Culture so Difficult to Change?
• Reasons for Changing Organizational Culture. Internal and External
Change
• Quality of a great organizational culture
• What are HR policies? The Right Way To Write HR Policies.
• Global HRM Practices. How Do You Build A Willing Workforce?
• Definition of International Labour Law
• Purpose of international labour law
• Global Instruments of international labour law
• What is Employee Relations
• Employee Relations Skills Set
3.1 INTRODUCTION
Industrial relations refers to a set of phenomena, both inside and outside the
workplace, worried about identifying and managing the em ployment
relationship. International Industrial Relations (IIR) handles the
complicated associations between employers employing foreign nationals,
employees of various nationalities, home and host country governing bodies
and trade unions of the organizat ions functioning in different nations around
the world in addition to their national & international federations.
Globalization and international trade has put stress on organizations to
standardize practices and policies. Globalization’s influences on Hum an
Resource Management come through the opening and penetration of
economic systems to outside forces. This is certainly a two -way procedure,
with both local organizations and multinational corporations embrace one
another’s HRM practice.
• WHAT ARE THE KEY ISSUES IN INTERNATIONAL
INDUSTRIAL RELATIONS (IIR)?
Issue 1: Who should handle Labour Relations – Headquarter or
the subsidiary in the concerned country?
The national dissimilarities in economics, political, and legal systems
create diverse labour -relations system across countries, MNCs HQs
typically delegate the control over labour relations to their foreign
subsidiaries. Having said that, the participation of the MNC
headquarters in host -country labour relations is impacted by 4 key
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74 Global HRM
74
1. In case there is a high level of inter -subsidiary production
integration, the labour relations function is centralised and is
coordinated by the head quarter.
2. The nationality of ownership of the subsidiary has an influence
on who should take care of employee relations.
3. Furthermore, subsidiary character has a bearing on who should
deal with employee relations.
4. Finally, where a subsidiary is dependent more on its parent
company for resources, you will see a greater corporate
involvement in l abour relations.
Issue 2: Trade Union Tactics
1. Trade Unions make use of a number of tactics to deal with
international business:
1. The most common one is ‘strike’. A strike is a concerted and
temporary suspension of work, intended to put pressure. Union s
should be cautions prior to resorting to a strike in international
scenario because the bargaining power of a union could
possibly be threatened or weakened by the financial resources
of an MNC. This is especially evident where a multinational
firm uses transnational sourcing and cross subsidization of its
products or parts across different international locations.
2. Form International Trade Secretariats (ITSs): There are Fifteen
ITSs who help the exchange of information. Main objective of
ITSs is to ac complish transactional bargaining with the MNCs.
3. Lobbing for limited national legislations – Trade unions have
for several years lobbied for restrictive national legislation in
the U.S. and Europe. Trade unions pursue restrictive national
legislation to avoid the export of jobs via multinational
investment policies.
4. Intervention from the global body like ILO, UNCTAD, EU,
OECD: ILO has issued guidelines which cover disclosure of
information, competition, financing, employment, industrial
relations, tax ation, science and technology.
Issue 3: Political
There is little doubt that national industrial relations (IR) systems
continue to be greatly different. There are 3 faces of industrial
relations which the international union movement encounters in the
international environment, specifically social democracy, neo -liberal
and authoritarian. The dissimilarities in national industrial relations
systems are also mirrored in the structure, power and status of
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75 International Organisations and Industrial Relations comparatively strong position within the Scandinavian IR model
while their role is a lot more limited in the US context. The
international labour movement is usually prohibited direct access to
robust intergovernmental establishments like the WTO. So they have
to depend on national government to represent their interests to these
institutions. Significantly, the interests of government might not
always be directly in -line with the union movement.
Issue 4: Social and Identity
A key problem with the international labour movement and
specifically international collective bargaining is the absence of
identity that individual workers have with their international
associates. Additionally they see these peak associations to be a lot
more conserva tive than activists at the local level. Associated with
this point, there is a common lack of solidarity between actors at a
national level. Additionally, there are endemic cultural, social and
language differences among individuals in different countries
resulting in lowering the degree of a shared identity between workers
on an international level.
3.2 CORPORATE CULTUR E AND CHANGE
Cultural change is the process in which an organization encourages
employees to adopt behaviour’s and mind -sets that are cons istent with the
organization's values and goals. Cultural change may be necessary to better
align the behaviours of employees with current and future business
objectives (such as, for example, after a merger of two organizations with
distinct cultures).
Successful cultural change initiatives are often gradual and must be done at
a sustainable pace so that employees can acclimate and adjust to the change
without becoming disengaged.
3.2.1 WHAT IS CULTURE CHANGE IN THE WORKPLACE?
Organizational culture change occurs when a company alters its processes,
values, beliefs and strategic goals. In most cases, a culture change results in
changes in the work environment. The change can either be internal or
external. Internal culture change focuses on internal process es and systems
that the company has complete control over. In this context, the most
important element is the employees. On the other hand, external culture
change is subject to outside factors that the company has no control over,
such as politics, indust ry, economics, society and technology.
3.2.2 WHAT IS ORGANIZATIONAL CULTURE SO DIFFICULT
TO CHANGE?
Implementing and managing organizational culture change is one of the
leading leadership challenges. Interlocking cultural aspects such as values,
processes , practices and expectations creates a deep -rooted system that
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76 knowledge, or leadership styles in a reinforced system is complicated. The
biggest impediment to cultural change is resist ance to change. Key
stakeholders, such as employees who are unwilling to accept and adapt to
new circumstances, disrupt cultural change processes.
Resistance to change can be individual or organized. Sometimes, the
resistance is covert, and other times, i t blossoms into open confrontation,
which is disruptive to the organization. The reasons for resistance to change
include
1. Poor communication — Lack of communication regarding the
intended cultural changes can cause uncertainty. When employees
feel they do not understand the reason or need for change, they are
more likely to resist.
2. Lack of motivation — Reasons that may demotivate employees
against cultural change include fear of the unknown, loss of
privileges, lack of inclusion during decision -maki ng, and additional
responsibilities.
3. Complacency among employees or leadership — Complacency
hinders organizational change efforts. Cultural change is a team
effort, and all stakeholders, including employees, management and
shareholders, must cooperate and support the process. Complacency
among stakeholders destroys teamwork and com promises the overall
team contribution, derailing the process.
4. Loss of ownership, control or status — A change means
adjustments to established routines. Key stakeholders may resist
change if they feel that their control, status quo, authority, privile ges,
and job security are at risk.
5. Fear of failure — People may oppose culture changes when they lack
belief in their capabilities, doubt the leadership's ability to lead the
process, or question the timing and implementation approach.
6. Organization al politics — Some stakeholders resist change because
of personal interests. They may oppose the leadership, detest the loss
of influence under a new system or prefer a system that favours them.
3.2.3 REASONS FOR CHANGING ORGANIZATIONAL CULTURE
Industry a nd market conditions are subject to fluctuations. Organizations
must change to keep up with trends, take advantage of new opportunities or
address emerging challenges. Some of the reasons a business may
consider changing organizational culture include:
1. New business strategy — A new business strategy such as mergers,
acquisitions or leadership changes warrants a culture change. The
transformation accommodates a new strategic direction.
2. Support/improve business performance or market growth —
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77 International Organisations and Industrial Relations change is instituted to enhance performance, productivity or
innovation. Likewise, leveraging new growth opportunities may
require process, management, or strategic adjustments.
3. External sh ocks and crises — Industry and market shocks provide
powerful motives for cultural change. For example, financial crises or
market failures push companies to change their organizational culture
to ensure survival and promote business continuity. Other time s, a
culture change is required for government bailouts in case of a
collapse.
4. Compliance requirements — Legal and political reasons may also
account for culture change. Changes in business policies and trade
requirements may push organizations to adju st their organizational
culture to comply with new standards.
3.2.4 INTERNAL AND EXTERNAL CHANGE
Buford performed an analysis of the areas of the college that need change.
He came up with changes in response to both internal and external factors.
There a re two types of organizational changes that businesses endure:
• Internal change
• External change
Internal change involves changes within the organization's control, like
processes and systems, human resources, decision -making, and policies and
procedures. The organization has full control over these changes. These
changes are generally initiated to increase productivity and profitability.
Internally, he knew the culture needed to be changed from a relaxed resort -
type environment to a purely professional a cademic environment in order
to attract new students. This also meant changes to curricula - and processes
and systems for delivering curricula.
External changes involve political, technological, social, and market
changes that are out of the organization 's control.
Buford also needed to think about meeting the needs of the new student
population. In order to attract a global student body, he will need to bring
in new technology for online courses. Online courses require adhering to a
much stricter financ ial aid policy for tracking student attendance. This
meant training staff on both.
3.2.5 QUALITY OF A GREAT ORGANIZATIONAL CULTURE
Every organization’s culture is different, and it’s important to retain what
makes your company unique. However, the culture s of high -performing
organizations consistently reflect certain qualities that you should seek to
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78 • Alignment comes when the company’s objectives and its employees’
motivations are all pulling in the same direction. Exceptional
organizations work to build continuous alignment to their vision,
purpose, and goals.
• Appreciation can take many forms: a public kudos, a note of thanks,
or a promotion. A culture of appreciation is one in which all team
members frequently provide recognition and thanks for the
contributions of others.
• Trust is vital to an organization. With a culture of trust , team
members can express themselves and rely on others to have their back
when they try something new.
• Performance is key, as great companies create a culture that mea ns
business . In these companies, talented employees motivate each other
to excel, and, as shown above, greater profitability and productivity
are the results.
• Resilience is a key quality in highly dynamic environments where
change is continuous. A resilien t culture will teach leaders to watch
for and respond to change with ease.
• Teamwork encompasses collaboration, communication, and respect
between team members. When everyone on the team supports each
other, employees will get more done and feel happier whi le doing it.
• Integrity , like trust, is vital to all teams when they rely on each other
to make decisions, interpret results, and form partnerships. Honesty
and transparency are critical components of this aspect of culture.
• Innovation leads organizations t o get the most out of available
technologies, resources, and markets. A culture of innovation means
that you apply creative thinking to all aspects of your business, even
your own cultural initiatives .
• Psychological safety provides the support employees ne ed to take
risks and provide honest feedback. Remember that psychological
safety starts at the team level, not the individual level, so managers
need to take the lead in creating a safe environment where everyone
feels comfortable contributing. Now that yo u know what a great
culture looks like, let’s tackle how to build one in your organization.
3.3 HR POLICIES IN M ULTINATIONAL COMPANY
HRM is a strategic function concerned with recruitment, training and
development, performance appraisal, communication and labour relations.
HR policies guide the various functions of HRM. The need for a particular
type of HRM is determined by the need for standardization or adaptation.
Managing human resources in an international context is more complex
than in a domestic set up because of the many differences between
headquarters and the subsidiaries. The HR policies of certain companies
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79 International Organisations and Industrial Relations Companies like Ford and Volvo, however, strive to maintain e quality in
work and pay.
Staffing is an important aspect of HRM. The staffing policies of MNCs are
determined by their approach to globalization. MNCs with an ethnocentric
approach fill all top management positions with home country nationals to
ensure th at home country practices are replicated in subsidiaries.
Companies that adopt a polycentric approach to globalization, fill all senior
management positions with local nationals to ensure maximum adaptation
to local conditions. Companies that adopt a geoce ntric approach to
globalization, identify managers irrespective of their nationality for various
international assignments to ensure that best practices are identified and
replicated in all the units of the organization. Managers belonging to a
particular country and working in another country are called expatriates.
The selection, training, period of stay abroad, compensation and repatriation
of expatriates are delicate issues that have to be managed by the HR
department. On their repatriation, they must b e provided suitable
challenging assignments that give them the autonomy they have become
accustomed to. Since maintaining expatriate managers is expensive, a
company must develop local talent.
Companies can identify and develop local talent through in -hous e
Management Development Programs (MDP). These programs will help
improve the coordination between employees with diverse cultural,
religious and educational backgrounds. Performance appraisal is another
activity where there can be differences of opinion b etween headquarters and
subsidiaries.
Subsidiary managers must be involved in setting of unambiguous targets
and the establishment of criteria for measuring performance. Performance
Management attempts to link performance appraisal to employee training
and development, and possibly to compensation. There are three theories
concerning the autonomy of subsidiaries in decision -making.
They are: limited autonomy, variable autonomy and negotiated autonomy.
According to the theory of limited autonomy, the degree of autonomy will
depend on the MNC's approach to globalization. The theory of variable
autonomy states that the degree of autonomy varies with the degree of
internationalization of the company.
Companies that adopt an export strategy can afford to have c entralized
decision -making, whereas strategic business units (SBUs) will require
decentralized decision -making. According to the theory of negotiated
autonomy, the degree of autonomy of a subsidiary will depend on its ability
to negotiate with headquarters .
HRM plays an important role in maintaining harmonious industrial
relations. Companies are often intimidated by the strength of the union and
the political support it enjoys. Certain companies like Volvo ensure cordial
relations with the labour union by actively participating in their
development. But certain other companies, like Bata have had frequent
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80 3.3.1 WHAT ARE HR POLICIES?
HR strategies are also described as the set of concepts and norms of
behaviour that regula te an organisation’s interaction with its workers . A
policy proposal of this type sets instructions for a broad range of
employment connections inside the business. The aim and relevance of HR
rules are self -evident. Every firm needs policies in order to p romote
regularity in behaviour and equality in employee relations.
• WHY IS IT IMPORTANT TO HAVE DEFINED HR POLICIES
IN PLACE?
HR Department Policies and Practices are critical in SMEs because
they give an outline, management, uniformity, justice, and rationality.
They also guarantee that employment laws are followed and that
workers are aware of their obligations and the Business’s goals.
The 10 top HR policies in India that every company should consider.
1. Employment contract
In India, it is crucial to file proper documentation of the
employees that work in the company. The employee contract
acts as the umbrella covering a list of HR policies and
agreements.
As per India’s employment laws, it is essential to file proper
documentation of the employees to ensure appropriate
navigation through the complex and diverse employment
framework.
Therefore, having accurate and updated documents that prove
the employee’s compliance to the company will help in the long
term and save them from any legal hassles late r. Therefore, you
need to follow the labour and wage laws while processing
documentation.
2. Employee wages
Employee payroll is one of the significant aspects of employee
management. The job of the HR department of the company is
to manage the employee pay roll effectively. This includes
offering competitive salaries to employees and staying in
compliance with the government policies.
Various acts passed by the government cover the employee
wages. The most prominent among being The Minimum Wage
Act, 1948. Th is act sets a particular wage as the minimum wage
for skilled as well as unskilled workers. The act mandates that
the employees earn the ‘Basic’ salary to meet their living
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81 International Organisations and Industrial Relations Further, The Payment of Wages Act, 1936 states that an
employee should re ceive their rightful monthly salary payment
on the agreed -upon date without any unwanted deductions.
Therefore, companies need to follow the laws to remain
compliant while being competitive. This is one of the most
critical points in the list of HR policie s in India.
3. Code of Conduct
The Code of Conduct is the company’s policies, consisting of
its vision, mission, and ethics. This is created to inform
employees about the policies of the behaviour and maintain
discipline while at the workplace.
The code of conduct is among the types of HR policies
containing the company’s rules that employees need to adhere
to. The policy includes dress code, equal rights to all, electronic
usage policy, conflict of interest, media policy, proper work
environment etc. It al so contains the rules and penalties if an
employee breaches or violates the code of conduct.
4. Leave policy
As per requirement, every company should have a good leave
policy to provide a clear picture of the leaves they would be
entitled to take in a year. The policy should include a proper
bifurcation of the leaves into paid leaves, sick leaves or casual
leaves etc. It must also mention public holidays.
HR policies in India 2022 should also provide provision for
unpaid leaves along with detailed rules on the salary cut on late
arrivals and half days. According to The Factories Act, 1948,
employees are entitled to get paid holidays every week as well
as get paid for any extra work they did beyond their work hours.
5. Employee provident fund
Every employ er is liable to set up an employee’s provident fund
account for each of its employees. The Employees Provident
Fund Act, 1947 provides income security to the employees after
their retirement. This is more like a security fund offering
various benefits for employees, such as housing care, medical
insurance and retirement pension.
It is important to note that companies exceeding 10 employees
must provide provident fund benefits to their employees.
Therefore, if you have more than 10 employees, then you are
liable to have a provident fund scheme for your employees.
6. Gratuity Policy
The gratuity policy is a way for companies to appreciate the
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82 gratuity policy applies to all employees who have provide d
more than 5 years of continuous service to the organisation.
The company is liable to pay a one -time payment
as gratuity pay-out to employees who are either being laid off
or resigning, but have provided 5 years or more of continuous
service. This is vit al to keeping employees happy and engaged.
Moreover, companies are legally bound, as per The Payment of
Gratuity Act, 1972, to pay gratuity to their employees.
7. Paternity and maternity leave policy
Every company with more than 10 employees is required by law
to provide maternity leave benefits to women employees as per
The Maternity Benefits (Amendment) Act, 2017. Any woman
who has worked with the company for 80 days is entitled to
receive the benefits.
According to the act, a pregnant working woman is eligible to
get a minimum of 26 weeks of paid leave for the first 2 children
and a subsequent 12 weeks of unpaid leave.
As of now, there is no law on paternity bills for private company
employees. The central government employees are entitled to
get patern ity leave of 15 days to take care of their wife and
surviving child. There is a proposed paternity benefits bill,
2017, which is still pending government authorisation.
8. Sexual harassment workplace policy
A company is required to take or implement decisi ve rules,
human resource policies and regulations to create a safe work
ecosystem for women at the workplace. This is not just required
by law, but it should be a moral necessity for the company.
According to The Sexual Harassment Act, 2013, the company
must implement proper steps to protect women employees and
interns as well as any woman who visits the company.
Moreover, every company should have a sound sexual
harassment policy to address harassment complaints by women
employees actively.
This includes s etting up an Internal Complaints Committee in
every company crossing the 10 -employee mark to look into the
sexual harassment complaints by women at the workplace.
9. Adaptive work culture policy
The past year has seen a paradigm shift in various companies’
work culture. The pandemic has forced many of them to ask
their employees to work from home. This has given rise to the
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83 International Organisations and Industrial Relations flexibility to employees to choose their work location or
workplace.
The ad aptive work culture policy should contain proper rules
and structures to manage employees working remotely or
working from home. This will create a framework or guidelines
for employees to follow when working from different locations.
10. Employment Termin ation policy
Every employer has to face it. Some of your employees may
plan to move ahead at some point in their careers. You may also
feel that an employee no more fits into your larger scheme of
things. These moments are emotional for the employee as wel l
as the employer.
Therefore, the employer needs to ensure that they implement a
proper leave policy that lays down the steps for an employee
who wishes to leave the company.
This will help the HR team follow the correct procedures as per
the labour laws t o terminate an employee or process the
employee’s resignation request.
HR policies are an essential framework that every company
needs to ensure smooth functioning. These policies are the
guiding factor that tells the company and the employees how to
work and conduct themselves to ensure a safe and secure
working environment for all.
11. Developing relations
Google renamed the normal ‘Human Resources’ division to
‘People Operations,’ wherein management holds that in
developing strong relationships between e mployers and
employees. The organization enables its staff to use their
creativity and keep coming up with great out -of-the-box ideas
and value -added activities.
12. Looking after the employees
Flipkart is one of the largest electronic retail giants and provides
its employees with unpaid time off to attend to personal
commitments. The organization also offers exceptional
discounts for special occasions such as an emergency involving
friends or relatives. These benefits are in addition to the
standard leav es that are awarded.
3.3.2 THE RIGHT WAY TO WRITE HR POLICIES
If your HR team has to draft an HR policy, certain precautions have to be
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84 of your organisation that lays down important rules, regulations and
procedures for everyone.
Needless to say, an unclear document riddled with errors will eventually
make your HR team look bad in front of all the employees, especially the
leadership team.
So, how do you get it right? Here’s how you should go about it.
• Get the HR policy title spot on
Every HR policy document has a title that summarises the contents of
the document in the simplest manner.
Before your HR team even begins drafting the contents of the policy,
they should find a suitable t itle because it will set the tone and the
context for the rest of the HR processes and procedures. Since your
HR policy ties several processes together, an apt policy title will assist
employees in identifying and referring to particular processes.
General ly speaking, your policy title must be able to answer some
basic questions. For instance, the user -friendliness of the policy,
whether the title describes the entire policy, how much it can assist
the reader, and if employees, old or new, can comprehend th e title.
• Know why you need HR policies
Understanding the real motive behind creating HR policies is
important. In other words, what is it that you want to achieve when
writing HR policies?
The simple answer — addressing the questions and doubts of
employee s without any hassles. They should be able to look up the
policy document and specific points mentioned within. In this regard,
it’s crucial to outline the intentions of the company and the HR.
• Keep it crisp and clear
When creating the HR policy document, you should be absolutely
clear about the language. Do you think whatever you’ve mentioned in
the document can be understood clearly by the reader? Can they
comprehend the message you want to convey?
IF not, then your team has to go back to the drawing boar d and
simplify the language. It should be clear, concise, and simple. Every
procedure or process must be explained in elementary fashion. As a
rule of thumb, you should stay away from using industry jargon.
While there may be times where you cannot avoid j argon, you should
try your best to spell every word, process, or procedure in the simplest
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85 International Organisations and Industrial Relations • Sound the alarm in your HR policy wordings
Your HR policies should apply to all employees, even for the
leadership team. And that is why your policy statemen t must
underline all the rules and regulations. Not just that, you should follow
them up with repercussions, in case rules aren’t obeyed or employees
try to circumvent the same.
While you may not need to define the exact actions that will be taken
in the e vent of HR policy terms and conditions not being followed,
you can definitely throw in reminders at intervals about the idea of
reward and punishment.
• Chalk out the outline
HR policies for your company must be clearly outlined. And what this
means is that the specific guidelines and procedures should be broken
down into steps so that call employees can follow and understand
them.
Your HR team must also look into explaining the effect an HR policy
has on the brand’s reputation, and how it aligns with the wor k culture
and the organisational goals and objectives.
• Uncomplicate the complicated
Understand one thing, HR policies can be downright confusing and
difficult to follow. Which is why your team should be absolutely sure
that the policy is written well. And every little policy and rule
contained within the policy must be clearly defined.
For instance, you must provide references for policies that aren’t
clear. Your readers will try to understand the true meaning behind
every small detail in the HR policy.
Save them the trouble. Make your intentions loud and clear from the
get-go. While you’re doing that, ensure that the tone and voice you
adopt for the HR policy suits the organisation’s environment and
work culture.
• The final few steps
Now that your HR policy has finally taken shape, you shouldn’t pull
the trigger and finalise it no matter how desperately you need it.
Since this is the final draft, you should read your policy, then re -read
it to oust and rectify any errors. You need to provide clarity on every
little detail and take care of any omissions before the final draft is
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86 • Get additional help
The HR policy written by you or by the HR team under your
supervision might still have many errors that may go unnoticed. While
it may look good to you, d on’t jump the gun and have it finalised.
Get help. Someone within the organisation, preferably from the
leadership team, who has vast amounts of experience may still have
something to say. Share your HR policy with such professionals for
additional feedbac k and comments.
This step will help you fine -tune your HR policy. They can help you
illustrate the HR policy better. What’s more, if there’s anything
important you’ve missed out, they’ll be quick to let you know.
• Testing it on others
You need to build conf idence before submitting the final HR policy
for your organisations. That is why it’s a great idea to share it with
other members of the HR team and senior executives from other
departments.
They’ll be able to tell you if they have any reservations about t he HR
policy. Send in an official request, perhaps via mail, asking them for
their inputs.
• The policy must adapt
The underlying fact about an official document such as the HR policy
is that they’re bound to change. Business decisions, crises such as the
ongoing pandemic, market and work trends will all influence the
policies and procedures to some degree.
What this essentially means is that your HR policy must not be set in
stone. Keep some room for the policy to change and adapt. In fact,
you should slip i n a disclaimer, clearly announcing that the HR policy
is subject to change as per organisational needs.
3.3.3 ONE HR POLICY, MANY BENEFITS
An HR policy acts as a guidebook, not just for your HR team, but also for
the entire organisation. But that isn’t the only advantage of having one.
Let’s take a look at some of the other benefits of having a sound HR policy
in place for your organisation.
1. Quick actions
There’s no way to predict crises. But decisions have to be made,
quickly. When that happens, an HR policy will serve as the guide and
help concerned teams and departments to act quickly. Such actions
will be governed by the principles and rules contained in the HR
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87 International Organisations and Industrial Relations 2. A stable future
Yours’s is an organisation like any other. What that means is that
employees will come and go. That is why you need HR policies that
govern decision making, now and in the future. An HR policy will
ensure that correct decisions are always taken even when loyal and
core members leave the organisation.
3. Better decisi ons
While your organisation encourages help and support amongst
employees, there’s no saying whether they’ll be able to help each
other out even if they want to. Why? Because those willing to help
might actually be away or be engrossed in other tasks.
In such cases, an HR policy can help by empowering employees, managers,
supervisors and leaders to make decisions with confidence without
consulting others. Policy helps managers at various levels to act with
confidence without the need of consulting the s eve ry time.
4. No special treatment
As mentioned earlier, a single HR policy document must govern each
and every employee of the company, regardless of their designation,
experience, or seniority.
What this means is that all employees must be treated equally and
fairly. When you have a sound HR policy, it’ll act as the official guide
for consistent and unbiased treatment.
5. Clean conscience
An HR policy can aid decision -making. For instance, when you spell
out all the rules and regulations in a single documen t and share it with
all employees, they don’t have to consult someone or look elsewhere
when making decisions.
Any feelings of self -interest and bias, conscious or not, will be
eradicated.
6. Employee confidence
An HR policy can help the employees understa nd their position within
the organisation. Once this happens, you instil confidence in them.
They feel noticed. Which only means better decisions and enhanced
employee loyalty.
7. Result -oriented and rational
This is your company after all, and you want to ensure that the best
decisions are being made all the time. While every problem -solver
within your company has a unique way of overcoming odds, the HR
policy will, in a way, underline how the entire system has to be ethical
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88 Once you have a s ystem for achieving results, you end up having more
control over your organisation and employees.
8. Employee -focused
Employees, at the end of the day, are the most essential resources for
any company. You need to keep them happy, satisfied, and looked
after.
Without HR policies, you may end up hurting the sentiments of your
people which will only end up hurting your organisation’s reputation.
But when you do have an HR policy, you avoid errors and bad
decision -making.
3.3.4 GLOBAL HRM PRACTICES
1. HIRE THE RIGHT PEOPLE
Employees are a company’s asset. The first best practice as an HR is
to hire people whose beliefs align with your company. The right
employees maximize productivity and frame a fitting work culture
and morale. Thus, hiring the right people is one of the crucial global
HR practices.
(A) STRATEGIZED HIRING
Your hiring methods determine the future of your company.
Thus, strategizing the hiring procedure is crucial. You can set a
fitting personal for each role and screen candidates matching
that persona.
Some of the best hiring procedures include:
• Panel -based interviews: An interview panel consists of
experienced leaders in various roles. They bring in
different perspectives to determine if the candidate is
suitable. Thus, interview panels with t he utmost of four
members make a good hiring team.
• Internships: This gives time for the employer to
determine the attitude, nature, and quality of work.
Similarly, there is ample time for the candidate to
understand the work nature and expectations. Thus, it
benefits the employer in choosing the right person and the
employee, in becoming the right person.
With good hiring practice, you would make no mistake of
letting the right candidate walk out.
(B) GLOBAL HIRING
The right candidate is often not present n ext door but, why
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89 International Organisations and Industrial Relations A global hiring strategy helps you identify and filter suitable
people across the world. The wider you search, the more likely
you are to find the right candidates.
Additionally, global hiring brings in diversity. Diversity brings
along a host of benefits including,
• Increased productivity
• Enhanced employee engagement, and
• Cultural literacy.
(C) HIRING TOOLS
Yes, global hiring is remarkable. However, setting up local
entities everywhere you hire would cost you time a nd money.
Thus, you need proper planning and employ effective strategies
to utilize its full potential. Else, it gets chaotic.
Using hiring and virtual onboarding EOR (Employee on
Record) tools help you hire without having to set up such local
entities. Y ou can set up a hassle -free onboarding process.
Thus, using hiring tools for assistance is one of the best hiring
practices.
2. EMPLOYEE MANAGEMENT
After hiring, comes employee management. It is a holistic approach
that helps employees perform their best to achieve the set goals.
(A) MANAGE EMPLOYEE PERFORMANCE
Employees like to get evaluated, get feedback for their work. It
makes them understand what is expected of them and shifts their
focus towards that.
They boost high performers further to continue working in the
same direction at a faster pace. Also, performance evaluation
gives a chance for underperformers to rectify their mistakes and
perform better.
Thus, it is a good global Human Resource practice to include
performance evaluation through one -on-one meetings and
regular performance reviews.
(B) TRANSPARENCY
A crucial international HRM practice is to be open with the
employees, regardless of the success or failure of the business.
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90 Transparency also promotes participation and engagement.
Feeling well -informed, employees volunteer to share ideas and
contribute to decision -making. This leads to better and well -
informed decisions that help in y our company’s growth.
(C) EMPLOYEE ENGAGEMENT AND EMPOWERMENT
Employee engagement involves open discussions, clear
communication and most importantly empowering them.
Employees are no longer interested in mundane work without
growth. They are actively on the search for up skilling and
updating to face unknown challenges. Organizing programs,
professional courses, and seminars helps them cover the skill
gap created due to growing technology.
Thus, engagement through empowerment adds value to the
organizati on and is one of the age -old global HR practices that
holds good through time.
3. COMPENSATION AND BENEFITS
Compensation, incentives, and benefits make your employees feel
acknowledged and appreciated. Thus, it is one of the crucial global
HR practices to follow.
(A) FAIR COMPENSATION
Excellent workers deserve excellent compensation. Fair
compensation motivates your employees to continue their good
work and to even outdo their performance.
Your compensation plan should keep in mind the performance
of the i ndividual, the value they add to the business, and
competition in the market. Strategizing compensation packages
better than the rest in the market helps you retain talent and thus,
supports continued organization growth.
(B) ADDITIONAL BENEFITS
Benefits make the employee value their employment with you.
Thus, another good global HR practice is to design benefit plans
that provide value to the employees. Some of them include:
• Providing health insurance plans
• Travel concessions
• Maternity and paternity leav es
• Enforcing family time
• Profit -sharing plans
These are some of the best ways to show the employees that you
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91 International Organisations and Industrial Relations Further, your benefits can also focus on setting up a comfortable
work culture and space. This can include mentors to guide
young talents, open discussions, flexible working hours, etc.
The pandemic gave us an additional array of benefits that could
be offered to boost your employees' trust and help them cope up
with the stress. Some of these benefits can include:
• The option to choo se between remote and office working
• Strategies ensuring work -life balance
• Health insurance plans covering dependent’s medical
expenses due to Covid -19, etc.
4. CREATE A SAFE WORKPLACE
An office is where employees spend most of their day. In fact, on
average, an employee spends almost 1/3rd of their life in the office
premises. Thus, prioritizing workplace safety is crucial and vouches
for a sound global Human Resource practice.
(A) AVOID WORKPLACE ACCIDENTS
Workplace safety is not just a best practice but also a
fundamental right of every employee. Thus, as an HR
professional, ensuring infrastructure and physical safety is more
than a practice. It becomes your duty.
Safety procedures must be strictly followed and in place to
ensure a secure workplace. Security checks at vulnerable points
must also be deployed. Conducting fire drills, creating
awareness of the various safety aspects such as fire, electrical,
hardware components, and women safety can be beneficial.
Additionally, due to the pandemic, prope r sanitization and
screening procedures must be followed to avoid the further
spread of the virus.
(B) AVOIDING VIOLENCE AND ABUSE
Sadly, workplace violence and abuse, especially against women
are becoming common. Thus, there is a compelling need to
address them to avoid disasters, and discomfort to all especially,
the female workforce.
Dedicated policies and rules must be in place to prevent such
workplace abuses and violence. As an HR, you must ensure that
these policies are strictly followed and a dhered to by all. Anti -
ragging policy and policies against misconduct must be
included while drafting company laws and policies.
These are some of the ways to evade violence and abuse, and
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92 5. CREATE AN ETHICAL WORKPLACE
Though an open, casual work culture is widely adapted, it should not
be at the expense of ethics. Your workplace must still hold strong
ethical codes to maintain office decorum. Good global HR practice is
to strike a balance between both.
The ethical aspects enc ompass a moral code of conduct, professional
dress code, effective communication, etc. These aspects define who
you are, as an entity.
Thus, to sustain the changing market, make sure your ethics sustains
the modern work culture.
6. RISK MANAGEMENT
Risk M anagement involves assessing potential risks to your business
and figuring out the best solutions to handle them. Risk management
is crucial irrespective of the business size or industry.
Below are some of the potential risks and how to evade them.
(A) COMPLIANCE AND REGULATIONS
As an HR, you’re well aware of the complicated laws and
regulations surrounding employment. As a global recruiter, it
just gets more complicated. Thus, it is crucial to follow local
labour laws and stay compliant.
All of your HR pr ocesses must be regulated and audited to
ensure you are as compliant as possible. The laws keep
changing and get updated regularly. Thus, an international best
HRM practice is to track the revisions in the laws in each
country and reflect them in your poli cies and documents.
(B) GET ASSISTANCE
Tracking every law posed in all the countries you’re present in
is a tedious job. It is easier said than done. To avoid such
laborious work you can make use of PEOs (Professional
Employer Organizations).
PEOs partner with you to assist in tracking and maintaining
compliance with local labour laws and regulations. We, at
Multiplier, take care of local compliance in each country and
help you save time and effort.
(C) NETWORK AND DATA SECURITY
Data thefts and security breaches are, sadly, increasing rapidly.
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93 International Organisations and Industrial Relations Network security risk management is about anticipating
possible security breaches and avoiding them. You can set up a
sound internal hack an d security team to identify such weak
ends and strengthen your network.
(D) EMPLOYEE INCOMPETENCY
Training and competency failures occur when your employees
aren’t equipped to face future challenges.
As seen above, the best practice is to provide them w ith
sufficient knowledge and training to up skill themselves to face
unanticipated challenges in the future.
The above are some of the possible risks you might face as an
HR professional and ways to evade them.
7. ADOPT FAIR TERMINATION POLICIES
A good firing policy is as crucial as the hiring policy. However, they
require tremendous effort and planning to get right. Wrong strategies
will induce a fear of unsettlement among the others and result in
overall dissatisfaction.
As an HR professional, a good g lobal HR practice is to give the
underperforming employee a chance to change. Except for critical
issues such as violating company policies and regulations, discussing
your concerns and helping them understand their mistakes is fair play.
Also, our mental stress has shot up due to constant agitation and
unsettlement due to the pandemic. Such situational productivity loss
should be accepted, and as an employer, you must help them sort it
out.
If the employee volunteers to terminate the employment, the best
practice is to conduct an exit interview. This gives insight into the
reasons behind the termination and helps you plan new strategies to
retain other talents.
3.4 EMPLOYMENT AND L ABOUR LAWS: AN
INTERNATIONAL PERSPE CTIVE
International labour law is the b ody of rules spanning public and private
international law which concern the rights and duties of employees,
employers, trade unions and governments in regulating work (human
activity) and the workplace.
3.4.1 DEFINITION OF INTERNATIONAL LABOUR LAW
International labour law is one category of international law.
International law is the body of legal rules that apply between sovereign
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94 by sovereign states. Concerning labour l aw, the most important entity is
International Labour Organization.
The rules of international law are of a normative character; that is, they
prescribe standards of conduct. They distinguish themselves, however, from
moral rules by being, at least potent ially, designed for authoritative
interpretation by an independent judicial authority and by being capable
of enforcement by the application of external sanctions. These
characteristics make them legal rules.
The law -creating processes of international law are the forms in which rules
of international law come into existence; i.e., treaties, rules of international
customary law, and general principles of law recognized by civilized
nations. It is the merit of article 38 of the Statute of the International C ourt
of Justice that this exclusive list of primary law -creating processes has
received almost universal consent.
International law means public international law as distinct from private
international law or the conflict of laws, which deals with the diff erences
between the municipal laws of different countries.
International law forms a contrast to national law. While international law
applies only between entities that can claim international personality,
national law is the internal law of states that regulates the conduct of
individuals and other legal entities within their jurisdiction.
International law can be universal, regional or bilateral. Although there is
some duplication between universal and regional labour law, the practical
value of region al law lies mainly in the possibility it offers to establish
standards which are more progressive than worldwide standards for dealing
with the special problems of the region concerned; to secure greater
uniformity of law within a region; or to provide mor e extensive reciprocal
advantages. Bilateral law has a different purpose. Mainly, it determines the
conditions of entry and of employment in each contracting country for the
nationals of the other. This chapter deals only with universal and regional
labour law.
The sources - instruments by which states and other subjects of international
law, such as certain international organizations - of international law
are international agreements. The agreements assume a variety of form and
style, but they are all go verned by the law of treaties, which is part of
customary international law.
A treaty, the typical instrument of international relations, is defined by the
1969 Vienna Convention on the Law of Treaties as an "agreement
concluded between States in written form and governed by international
law, whether embodied in a single instrument or in two or more related
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95 International Organisations and Industrial Relations 3.4.2 PURPOSE OF INTERNATIONAL LABOUR LAW
1. Competition
Various arguments have been advanced ov er the years in support of
international labour law. The argument concerning international
competition was used in its most extensive form throughout the 19th
and at the beginning of the 20th century. The argument was that
international agreements in the f ield of labour would help prevent
international competition from taking place to the disadvantage of
workers, and would constitute a kind of code of fair competition
between employers and between countries.
This argument is generally given less prominence today, since it has
been realized:
• that competition did not prevent the main industrialized
countries of Europe from adopting the first labour laws
• that the cost and the competitive value of products depend on
many factors other than labour costs (in fac t, factors that
increase labour costs, such as investments in training, safety and
health, etc., can increase competitive value)
• that countries that are the most successful in world markets are
not those where the conditions of work are the less favourabl e.
However, globalization (and especially trade liberalization) have
again brought up discussions on the relationship of competition to
very poor working conditions in developing countries and loss of jobs
in developed countries. The discussion is focused mainly on
developments in industries where manual labour and low skills
dominate production.
2. World peace
At the end of World War I a new argument appeared, namely that
injustice in the social field endangers peace in the world, and that
action against such injustice therefore serves the cause of peace.
It has been pointed out that measures of social justice – which provide,
among other things, for trade union rights – are bound to strengthen
democratic regimes, which are more likely than authoritarian
governments to be peace loving. Social peace within countries may
also sometimes be related to international peace, inasmuch as internal
tensions may have repercussions abroad. Stress has equally been laid
on the positive and dynamic concept of peace, invol ving the
establishment of stable, just and harmonious conditions both within
individual countries and between different countries. This would be
accomplished by eliminating, inter alia, rivalry on world markets
arising out of too great a disparity in labou r conditions. It has also
been claimed that the establishment of international labour standards
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96 sense of solidarity internationally, and fosters a climate of mutual
collaboration and understandi ng that transcends racial and national
differences.
Yet progress toward these goals is threatened by many forces.
Extremism – religious, ethnic, and political – is on the rise, often
fuelled by growing disparities in levels of development. Despite the
grow th of democratic forms of government, violations of human
rights continue in too many countries. The number of armed conflicts
currently under way is only slightly less than at the end of the Cold
War. Although the threat of nuclear war between the superpo wers
seems less likely, there is the frightening prospect of nuclear weapons
loosely controlled by weak governments.
3. Social justice
The driving force behind the idea of international labour law was the
notion of social justice. In the field of labour, the humanitarian
concern originally appeared in the face of conditions of great hardship
imposed on the workers by industrialization. It was the mainspring of
the movement, the first achievement of which was the adoption on
both the national and internati onal levels of measures to protect
children from conditions of work that had shocked the public
conscience.
The expression "social justice" itself was introduced in 1919 in the
course of the discussions which took place at the peace conference,
when the o riginal Constitution of the ILO was being drafted as part of
the Treaty of Versailles. This notion has certainly been the most
powerful driving force in the development of international labour law.
It has often been stressed that economic growth does not
automatically ensure social progress. Nevertheless, there remains a
widespread tendency to give economic development precedence over
social considerations. It is, therefore, the function of international
labour standards to promote balanced economic and soc ial progress.
4. Consolidation of national labour legislation
Even when the labour legislation or practice of a country has reached
a certain level, it may be desirable for the country to ratify a
Convention that provides for a standard corresponding to th e existing
national situation. This is because, even if no substantial change is
called for, ratification of the respective Convention could contribute
to the consolidation of national labour legislation by acting as a
guarantee against backsliding. There have been cases in which the
existence of international commitments based on ratified Conventions
has prevented governments from adopting retrograde measures they
had contemplated, particularly in times of crisis.
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97 International Organisations and Industrial Relations decades, governments have been amending their labour legislation to
meet new needs and accommodate new circumstances.
5. Source of inspiration for national action
In addition to the international commitments to which they may give
rise, international labour standards can serve as a general guide and
as a source of inspiration to governments by virtue of their authority
as texts adopted by an assembly composed of representatives of
governments, employers and workers of nearly all countries of the
world. They may also for that reason provide a basis for the claims of
workers and guide the policy of employers. International labour
standards have thus developed into a kind of "international common
law". Their influence is in many ways similar to that found elsewhere
in various periods in the history of civil law – for example, the
influence of Roman law, or of certain later Eu ropean legal
codifications. Those in charge of social policies in various countries
have often highlighted this role of international labour law.
3.4.3 GLOBAL INSTRUMENTS OF INTERNATIONAL LABOUR
LAW
ILO Instruments
ILO sources of international labour law c an be found in the Constitution of
the Organization, and in its numerous Conventions and Recommendations.
While the Constitution of the ILO mainly contains provisions relating to the
functioning of the Organization, it also lays down a number of general
principles which have come to be regarded in certain respects as a direct
source of law. Such principles are contained in the Preamble of the
Constitution and in the Declaration concerning the Aims and Purposes of
the Organization, adopted by the Conference in Philadelphia in 1944 and
incorporated in the ILO Constitution in 1946.
ILO Conventions
Specific features of Conventions
Conventions are instruments designed to create international obligations for
the states which ratify them. In addition to its Convent ions, the ILO has
adopted a number of Recommendations, which are different from the point
of view of their legal character. Recommendations do not create obligations,
but rather provide guidelines for action.
Conventions have a number of specific features, which can be grouped
under four main ideas:
1. Conventions are adopted within an institutional framework. Thus, the
adoption of Conventions does not follow the type of diplomatic
negotiation which is usual in the case of treaties. They are rather
prepare d in discussions in an assembly that has many points in
common with parliamentary assemblies. This also partly explains the
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98 For the same reason, only the International Court of Justice c an
interpret the Conventions. The revision of Conventions is made only
by the General Conference, which is the legislative body of the
Organization.
2. The International Labour Conference, which adopts Conventions, is
constituted by representatives of gov ernments, employers and
workers, each delegate being entitled to vote individually.
3. A two-thirds majority is sufficient for the adoption of a Convention,
and governments should submit the Convention to their competent
authorities for ratification, i.e. as a rule to their parliaments. Also, the
governments have the obligation, when requested, to supply reports
on various issues related to Conventions. (See overview of
supervisory system)
4. Some Conventions include flexibility clauses, because they are
generally directed towards countries with very different economic,
social and political conditions, as well as different constitutional and
legal systems. The flexibility clauses comprise options regarding the
following:
A. obligations: possibility of choos ing, at the time of ratification,
by means of formal declaration, the extent of the obligations
undertaken. (f.ex. Social Security Convention, No. 102)
B. scope: Governments may decide for themselves, subject to
certain consultations, what the scope of the Convention shall be
(f.ex. Conventions of minimum wage fixing machinery, Nos. 26
and 29), or they may be permitted to exclude certain categories
of persons or undertakings (f.ex. Conventions on night work,
Nos.41 and 89), or the definitions of persons cov ered may be
based on a specified percentage of the wage earners or
population of the country concerned (f.ex. many social security
Conventions), or exceptions are allowed for a certain part of the
country (Various types of Conventions, f.ex. Nos. 24, 25, 6 2,
63, 77, 78, 81, 88, 94, 95, 96 etc.), or governments may
themselves define a certain branch, industry or sector (f.ex.
Weekly rest Convention, No. 106)
C. methods: State which ratifies a Convention shall take such
action as may be necessary to make effective the provisions of
such Convention, custom, administrative measures or, in certain
circumstances, collective agreements.
CORE CONVENTIONS
While ILO Conventions are not ranked in terms of their order of importance,
there is an underlying hierarchy, which can be discerned. In the first
category are Conventions dealing with freedom of association and
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99 International Organisations and Industrial Relations (Conventions Nos. 29 and 105), non -discrimination in employment
(Conventions Nos. 100 a nd 111) and child labour (Convention 138).
These core Conventions were identified and given prominence in the
Conclusion of the World Summit for Social Development in 1995 (See
Copenhagen Declaration on Social Development). In the second category
are techn ical standards, which establish norms to improve working
conditions.
Freedom of Association and Protection of the Right to Organize
Convention, 1948 (No. 87)
Establishes the right of all workers and employers to form and join
organizations of their own cho osing without prior authorization, and lays
down a series of guarantees for the free functioning of organizations without
interference by the public authorities. In December 1997, 121 countries had
ratified this convention.
Right to Organize and Collective Bargaining Convention, 1949 (No. 98)
Provides for protection against anti -union discrimination, for protection of
workers' and employers' organizations against acts of interference by each
other, and for measures to promote collective bargaining. In Decem ber
1997, 137 countries had ratified this convention.
Forced Labour Convention, 1930 (No. 29) Requires the suppression of
forced or compulsory labour in all its forms. Certain exceptions are
permitted, such as military service, convict labour properly supe rvised,
emergencies such as wars, fires, earthquakes, etc. In December 1997, 145
countries had ratified this convention.
Abolition of Forced Labour Convention, 1957 (No. 105) Prohibits the use
of any form of forced or compulsory labour as a means of politi cal coercion
or education, punishment for the expression of political or ideological
views, workforce mobilization, labour discipline, punishment for
participation in strikes, or discrimination. In December 1997, 130 countries
had ratified this convention.
Discrimination (Employment and Occupation) Convention, 1958 (No.
111) Calls for a national policy to eliminate discrimination in access to
employment, training and working conditions, on grounds of race, colour,
sex, religion, political opinion, national extraction or social origin and to
promote equality of opportunity and treatment. In December 1997, 129
countries had ratified this convention.
Equal Remuneration Convention, 1951 (No. 100) Calls for equal pay for
men and women for work of equal value. In December 1997, 135 countries
had ratified this convention.
Minimum Age Convention, 1973 (No. 138) Aims at the abolition of child
labour, stipulating that the minimum age for admission to employment shall
not be less than the age of completion of compulsory schooling, and in any
case not less than 15 years (14 for developing countries). In December
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100 3.5 THE INFLUENCE OF TRADE UNION
The Labour Relations Act of 1997 provides for the right
1. to fair labour practice
2. to establish a trade union and to become a member of it
3. to organise for joint bargaining, and to strike and to be locked out.
Trade unions are the mouthpiece of the workers that they represent, seeing
that they represent the workers in a cer tain sector in order to establish good
relations between the employees and the employers. The relevant trade
union should therefore strive towards promoting the social, economic and
political interests of the employees. It is important to note that an empl oyee
is free to join a trade union and he / she may neither be prevented from doing
so, nor be dismissed by the employer when he / she joins a trade union.
According to the Labour Relations Act trade unions have the following
rights:
• ACCESS TO THE WORKPLACE: The trade union has the right
to canvass members within the workplace and to hold meetings during
off hours.
• MEMBERSHIP FEES: Contributions towards membership fees
may be deducted from employees’ wages / salaries.
• ELECTIONS: Representatives of t he trade unions may be elected
within the workplace.
• SERVICE TO THE TRADE UNION : Trade union members are
entitled to taking paid leave in order to perform their duties as trade
union representatives and also for the purpose of undergoing training.
• DISCLOSI NG INFORMATION: The trade union is entitled to any
information that has a bearing on issues that concern the employees
within the workplace.
According to the Labour Relations Act (1997) employees have the right
to STRIKE (i.e. refusal to work, to work at a slower pace, and an embargo
on working overtime), while employers have the right to LOCK OUT
employees (i.e. physically preventing employees from entering the
workplace). The two actions could, amongst other things, result from
1. an insistence on a wage or salary increase,
2. an insistence on recognising a trade union or
3. an insistence on changing conditions in the workplace.
In general it is fair to expect that the activities of trade unions should be of
such a nature that not only are the employees’ social, economic and political
interests served, but that the interests of the South African economy as a
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101 International Organisations and Industrial Relations 3.6 EQUAL OPPORTUNIT Y
Equal opportunity, also called equality of opportunity, in political theory,
the idea that people ought to be able to compete on equal terms, or on a
“level playing field,” for advantaged offices and positions. Proponents of
equal opportunity believe that the principle is compatible with, and indeed
may justify, inequalities of out come of some sort, but there is considerable
disagreement over precisely to what degree and what kind of inequalities it
justifies and how it does so.
1. FAIRNESS AND EQUALITY
Many believe that equal opportunity requires that advantaged
positions be subjec t to open competition. (This view is sometimes
captured by the slogan, “Careers open to talents.”) The idea there is
that jobs and limited educational places should be open to all and that
the selection procedures for them should be designed to identify th e
best-qualified candidates. In practice, that appears to be an efficient
way of allocating jobs so as to maximize productivity and of
distributing prized educational places to those who are likely to gain
the most from them. But, even if it is a necessary condition of equal
opportunity, it cannot be a sufficient condition. If it were, equal
opportunity would permit differences in people’s social
circumstances —such as the economic class, family, or culture into
which they were born —to have too deep an impac t on their prospects.
The ideal would be compatible with, for example, a society in which
those born into a lower economic class have radically different
prospects from those born into a higher economic class as a result of
the way that the different resou rces at their disposal influence their
access to the qualifications required for success. The solution, it might
be thought, is to suppose that equal opportunity requires not only open
competition for advantaged positions but also fair access to
qualificat ions. The resulting position is often called fair, or
substantive, equal opportunity, in contrast to the formal equal
opportunity provided by open competition on its own.
The American political philosopher John Rawls defended a version of
fair equal opport unity. He argued that advantaged positions should be
open to all, not only formally but also in such a way that each person
has a fair chance of attaining them. He treated that idea as equivalent
to the claim that those with the same level of talent and ab ility, and
the same willingness to use them, should have the same prospects of
success, regardless of factors such as class, race, and
sex. Implementing fair equal opportunity would require counteracting
the effects of differences in class, race, sex, and the like, and it would
have substantial implications for the design of a system of
public education, including the tax regime required to fund it. Some
have worried that even the provision of high -quality public education
would be insufficient to guarantee fair equal opportunity, on the
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102 they attach to education and the different resources they have
available to them, could continue to prevent those with the same level
of talent and abil ity, and the same willingness to use them, from
having the same prospects of success. Some went so far as to argue
that implementing fair equal opportunity in an uncompromising way
and without regard to other values would require abolishing the
traditional family.
2. LUCK EGALITARIANISM
The ideal of equal opportunity does not necessarily lead to equality of
outcome, since its aim is consistent with allowing people’s life
prospects to be influenced by their values and choices. From that
standpoint, the under lying motivation of the ideal of equal
opportunity, properly understood, is to counteract the effects of
people’s different natural and social circumstances while permitting
inequalities of condition that emerge as a result of their choices. On
that basis, some scholars have argued that inequalities arising from
differences in choice are not only just but necessary, to give personal
responsibility it’s due. That view is sometimes described as
luck egalitarianism.
Luck egalitarianism maintains that, while in equalities are unjust if
they derive from differences in people’s circumstances —because
circumstances are a matter of brute luck —they are just if they are the
product of people’s voluntary choices. Luck egalitarianism is thus a
combination of two different claims: first, that justice requires the
neutralization of the effects of differences in people’s circumstances,
and, second, that it is just to require people to bear the costs, or allow
them to enjoy the benefits, of their voluntary choices. In making t hose
claims, luck egalitarianism invokes a distinction between choice and
circumstance, or between brute luck and “option luck.”
Luck egalitarianism has its critics, however. Given the social forces
to which each person is subject, the distinction between choice and
circumstance, or between brute luck and option luck, is not always
easy to draw in a plausible way. But even if a satisfactory way of
drawing those distinctions could be found, there is still the worry that
luck egalitarianism is too harsh in th e way that it holds people
responsible for their foolish or reckless behaviour. It seems to imply
that those who end up needy as a result of their own imprudence can
justly be forced to bear the costs of their choices. So people who
choose to smoke in full knowledge of the risks involved and
develop lung cancer may have no entitlement to the health care that
they need but cannot afford. Uncompromising luck egalitarians may
insist that they have no objection to voluntary schemes to help those
with self -inflicted needs but that they regard the forcible extraction of
taxes to help those who are responsible for their plight as sanctioning
the exploitation of the prudent. Others, however, may concede that
luck egalitarianism should be supplemented with a further principle
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103 International Organisations and Industrial Relations that is, those whose condition falls below some threshold —are
entitled to support regardless of how their needs arose.
3. CRITICS OF EQUAL OPPORTUNITY
Although there is widespre ad agreement that equal opportunity is a
requirement of justice, there are also critics of the principle.
Dissenters on the left argue that equal opportunity is simply a way
to legitimate inequalities of wealth and income that are inherently
unjust. Anothe r challenge comes from libertarians, who argue that
employers are entitled to fill vacant positions within their workforce
with whomever they want, for whatever reason they want. According
to that view, the entitlement of employers to decide who should wor k
for them on whatever basis they choose is grounded in their property
rights.
3.7 EMPLOYEE RELATIO NSHIP
Employee relations is seen as focusing on both individual and collective
relationships in the workplace. A positive climate of employee relations -
with high levels of employee involvement, commitment and engagement -
can improve business outcomes and contribute to employees' wellbeing.
This factsheet explores the current state of the employment relationship. It
considers the continuing value of posit ive employee relations for trade
unions, employers, HR practitioners and line managers.
3.7.1 WHAT IS EMPLOYEE RELATIONS?
'Employee relations' describes the relationship between employers and
employees. Today’s interpretation of employee relations refers t o individual
as well as collective workplace relationships. It reflects the increasing
individualisation of the employment relationship following the rise of
individual workplace rights.
Individual voice channels are very important. But collective channels , that
use union and/or non -union representatives, give employees a collective
voice that can complement and reinforce individual channels.
Informing and consulting the workforce is a core people management
principle and should be a priority for every org anisation. If done well, it
provides an effective mechanism for dialogue between management and
workers, typically via their elected representatives. This provides senior
management with the opportunity to impart important information or plans
to the workf orce and gain buy -in. For their part, employees can exercise
their collective voice, an indirect channel via their representatives, to make
suggestions, ask questions or raise concerns.
Employee relations is an area of specialist knowledge in our Profession
Map. It emphasises the importance of making sure the relationship between
an organisation and its people is managed through transparent practices and
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104 Global HRM
104 A positive employee relations climate and high levels of employee
engagement have the potential to bring better business outcomes as well as
better health and wellbeing for employees.
• TRADE UNION INFLUENCE
There has been a transformation in many aspects of UK employment
relations over the past 40 years, none more profound than the changed
role and influence of trade unions. The declining levels of union
membership and density , combined with a huge fall in collective
industrial action, are well charted.
According to 2021 UK official statistics, trade union membership
declined to 6.4 million in 2021 and the proportion of UK employees
who were trade union members fell to 23.1%, down from 23.7% in
2020.
Prior to these 2021 figures, UK trade union membership levels among
employees had risen for four consecutive years, mainly driven by an
increase in female membership, and by a rise in trade union numbers
among public sector workers .
Despite the longer -term downward trend in membership levels, trade
union influence is still an everyday reality for many organisations,
particularly in the public sector. CIPD research in 2022 shows that,
among those employers with representative arrange ments for
informing and consulting with staff, 40% reported both union and
non-union representation, 39% just non -union representation and
18% cited union representation only.
3.7.2 EMPLOYEE RELATIONS SKILLS SET
Over the past two decades, less value is oft en attached to the role of
employee relations as an HR discipline, with employee relations and
conflict management typically viewed as operational and transactional in
nature.
This view needs to change. Against a backdrop of tumultuous political and
econom ic change and highly pressurised work environments, there has
never been a greater need for the expertise offered by employee relations
specialists. The status of the employee relations specialist need reasserting,
and its reach needs broadening so that ma naging the employment
relationship, and conflict, is seen as an integral part of every people
professional’s role.
The more traditional, formal employee relations and negotiating skills need
to be complemented with a much wider set of competencies, such as
consultation, surveying and interpreting employee attitudes, spotting
potential signs of conflict and early resolution of differences between
employees and management. These skills need to be extended to line
managers who have day -to-day responsibility fo r managing the
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105 International Organisations and Industrial Relations

• DEVELOP A POSITIVE EMPLOYEE RELATIONS
FRAMEWORK
It’s important that organisations develop an effective, holistic
employee relations framework, for example:
• Set up multiple and complementary mechanisms for employee
voice, including direct methods with individuals and indirect
methods for collective voice, via employee representation.
• Establish structures and processes for communicating with
union and non -union representatives and employees at all levels
of the organ isation.
• Have a system to evaluate the feedback, to ensure that people’s
feedback is captured and listened to from across the different
voice channels.
• Train and guide managers so they understand the organisation’s
aims and practices for information and c onsultation, and have
the skills and knowledge to promote effective employee voice.
• Ensure a positive joint working ethos is cascaded throughout the
organisation, so that managers at all levels approach working
relationships with representatives in a constructive way and
build trust.
3.8 SELF -ASSESSMENT QUESTIONS
FILL IN THE BLANK
1. ___________________ is the process in which an organization
encourages employees to adopt behaviour’s and mind -sets that are
consistent with the organization's values and goals.
2. __________________ is a concerted and temporary suspension of
work, intended to put pressure.
3. __________________ change occurs when a company alters its
processes, values, beliefs and strategic goals.
4. Implementing and managing ____________ ______ is one of the
leading leadership challenges.
5. The transformation accommodates a __________________
6. Industry and market shocks provide powerful motives for
__________________
7. There are two types of organizational changes __________________
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106 Global HRM
106 8. __________________ is a strategic function concerned with
recruitment, training and development, performance appraisal,
communication and labour relations.
9. Companies that adopt a __________________ to globalization, fill all
senior management positions with local nationals to ensure maximum
adaptation to local conditions.
10. Managers belonging to a particular country and working in another
country are called __________________
11. __________________ in organization help impr ove the coordination
between employees with diverse cultural, religious and educational
backgrounds.
12. __________________ plays an important role in maintaining
harmonious industrial relations.
13. __________________ must be involved in setting of ambigu ous
targets and the establishment of criteria for measuring performance.
14. __________________ gives a chance for underperformers to rectify
their mistakes and perform better.
15. __________________ involves assessing potential risks to your
business and figuring out the best solutions to handle them.
16. __________________ forms a contrast to national law.
17. __________________ are the mouthpiece of the workers that they
represent, seeing that they represent the workers in a certain sector in
order to es tablish good relations between the employees and the
employers.
18. According to __________________ employees have the right to
STRIKE (i.e. refusal to work, to work at a slower pace, and an
embargo on working overtime), while employers have the right to
LOCK OUT employees (i.e. physically preventing employees from
entering the workplace).
19. the idea that people ought to be able to compete on equal terms, or on
a “level playing field,” for advantaged offices and positions is called
__________________
20. __________________describes the relationship between employers
and employees.
ANSWER
1. Cultural change
2. A strike
3. Organizational culture
4. organizational culture change
5. new strategic direction.
6. cultural change. munotes.in

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107 International Organisations and Industrial Relations 7. Internal change and Exte rnal change
8. Human Resources Management
9. polycentric approach
10. expatriates.
11. Management Development Programs (MDP)
12. Human Resources Management
13. Subsidiary managers
14. performance evaluation
15. Risk Management
16. International law
17. Trade unions
18. the Labour Relations Act (1997)
19. Equal Opportunity.
20. 'Employee relations'
TRUE OR FALSE
1. Main objective of International Trade Secretariats ITSs is to
accomplish transactional bargaining with the MNCs.
2. Trade unions maint ain a comparatively weak position within the
Scandinavian IR model while their role is a lot more limited in the US
context.
3. Endemic cultural, social and language differences among individuals
in different countries resulting in lowering the degree of a shared
identity between workers on an international level.
4. Lack of communication regarding the intended cultural changes
cannot cause uncertainty.
5. Reasons that may demotivate employees against cultural change
include fear of the unknown, loss of privileges, lack of inclusion
during decision -making, and additional responsibilities.
6. Cultural change is a team effort, and all stakeholders, including
employees, management and shareholders, must cooperate and
support the process.
7. Transparency n ot promotes participation and engagement.
8. Legal and political reasons may also account for culture change.
9. With a culture of trust , team members cannot express themselves and
rely on others to have their back when they try something new.
10. The HR policies of certain companies not seem to discriminate on the
basis of religion, race, caste, sex or nationality.
11. According to the theory of limited autonomy, the degree of autonomy
will depend on the MNC's approach to globalization.
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108 Global HRM
108 13. The relevant trade union should not strive towards promoting the
social, economic and political interests of the employees.
14. HR strategies are also described as the set of concepts and norms of
behaviour that regulate an organisation’s interaction with its workers .
15. Employee relations is seen as focusing on both individual and
collective relationships in the workplace.
ANSWER
TRUE (1, 3, 5, 6, 8, 11,12, 14, 15)
FALSE (2,4, 7, 9, 10, 13)
WRITE SHORT ANSWERS
Q1. What do you mean by corporate culture?
Q2. Corporate culture is important to develop because
Q3. What are some policies and practices of multinational companies?
Q4. What does equal opportunity mean?
Q5. Why is employee relations important?
3.9 SUMMARY
Cultural change is the process in which an organization encourages
employees to adopt behaviour’s and mind -sets that are consistent with the
organization's values and goals.
The national dissimilarities in economics, politi cal, and legal systems create
diverse labour -relations system across countries, MNCs HQs typically
delegate the control over labour relations to their foreign subsidiaries.
There are 3 faces of industrial relations which the international union
movement en counters in the international environment, specifically social
democracy, neo -liberal and authoritarian.
A key problem with the international labour movement and specifically
international collective bargaining is the absence of identity that individual
workers have with their international associates.
Cultural change is the process in which an organization encourages
employees to adopt behaviour’s and mind -sets that are consistent with the
organization's values and goals. Cultural change may be necessary to better
align the behaviours of employees with current and future business
objectives (such as, for example, after a merger of two organizations with
distinct cultures).
There are 2 types of cultural change i.e. internal cultural change and external
cultural change. Internal culture change focuses on internal processes and
systems that the company has complete control over. In this context, the
most important element is the employees. On the other hand, external munotes.in

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109 International Organisations and Industrial Relations culture change is subject to outside fa ctors that the company has no control
over, such as politics, industry, economics, society and technology.
HRM is a strategic function concerned with recruitment, training and
development, performance appraisal, communication and labour relations.
Staffing is an important aspect of HRM. The staffing policies of MNCs are
determined by their approach to globalization.
MNCs with an ethnocentric approach fill all top management positions with
home country nationals to ensure that home country practices are repl icated
in subsidiaries. Companies that adopt a polycentric approach to
globalization, fill all senior management positions with local nationals to
ensure maximum adaptation to local conditions.
HR Department Policies and Practices are critical in SMEs bec ause they
give an outline, management, uniformity, justice, and rationality. top HR
policies in India that every company should consider Employment
contract, Employee wages, Code of Conduct, Leave policy, Employee
provident fund, Gratuity Policy, Paternity and maternity leave policy,
Sexual harassment workplace policy, Adaptive work culture policy,
Employment Termination policy, Developing relations, Looking after
the employees.
The right employees maximize productivity and frame a fitting work culture
and morale. Thus, strategizing the hiring procedure is crucial. You can set
a fitting persona for each role and screen candidates matching that
persona. Strategizing the hiring procedure is crucial and some of the best
hiring procedures include Panel -based in terviews and Internships. A
global hiring strategy helps you identify and filter suitable people across the
world.
Employee management is a holistic approach that helps employees perform
their best to achieve the set goals and it is categorized into Manage
Employee Performance, Transparency , Employee Engagement And
Empowerment. Compensation, incentives, and benefits make your
employees feel acknowledged and appreciated.
Risk Management involves assessing potential risks to your business and
figuring out the best solutions to handle them. As a global recruiter, it just
gets more complicated.
International labour law is the body of rules spanning public and private
interna tional law which concern the rights and duties of employees,
employers, trade unions and governments in regulating work (human
activity) and the workplace.
ILO sources of international labour law can be found in the Constitution of
the Organization, and i n its numerous Conventions and Recommendations.
Core Conventions were identified and given prominence in the Conclusion
of the World Summit for Social Development in 1995 (See Copenhagen
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110 Global HRM
110 standards, which establish norms to improve working conditions. Freedom
of Association and Protection of the Right to Organize Convention,
1948 (No. 87), Right to Organize and Collective Bargaining
Convention, 1949 (No. 98), Forced Labour Convention, 1930 (No. 29) ,
Abolition of Forced Labour Convention, 1957 (No. 105),
Discrimination (Employment and Occupation) Convention, 1958 (No.
111), Equal Remuneration Convention, 1951 (No. 100), Minimum Age
Convention, 1973 (No. 138)
The Labour Relations Act of 1997 provides for the right, to fair labour
practice, to establish a trade union and to become a member of it, to organise
for joint bargaining, and to strike and to be locked out.
According to the Labour Relations Act trade unions have the following
right s, Access To The Workplace, Membership Fees , Elections, Service
To The Trade Union , Disclosing Information. According to the Labour
Relations Act (1997) employees have the right to STRIKE (i.e. refusal to
work, to work at a slower pace, and an embargo on w orking overtime),
while employers have the right to LOCK OUT employees (i.e. physically
preventing employees from entering the workplace).
Employee relations is seen as focusing on both individual and collective
relationships in the workplace. 'Employee re lations' describes the
relationship between employers and employees.
'Employee relations' describes the relationship between employers and
employees.
3.10 KEYWORDS
• Labour Relations The Process Between Employers And Employees,
Management And Unions In Ord er To Make Decisions In
Organizations.
• Trade Union Organizations Formed By Workers From Related
Fields That Work For The Common Interest Of Its Members.
• Industrial Relations - the relationships between employees and
employers within the organizational settings .
• Poor Communication - Lack Of Communication Regarding The
Intended Cultural Changes Can Cause Uncertainty.
• Strategy - a plan of action designed to achieve a long -term or overall
aim.
• Internal Change - methods used to satisfy needs within the
organization
• External Change - method used to satisfy needs using sources
outside the organization (i.e., in markets).
• Alignment Comes When The Company’s Objectives And Its
Employees’ Motivations Are All Pulling In The Same Direction. munotes.in

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111 International Organisations and Industrial Relations • Appreciation Can Take Many Forms: A Public Kudos, A Note Of
Thanks, Or A Promotion.
• Performance Is Key, As Great Companies Create A Culture That
Means Business.
• Resilience Is A Key Quality In Highly Dynamic Environments
Where Change Is Continuous.
• Teamwork Encompasses Collaboration, Communication, And
Respect Between Team Members.
• Integrity , Like Trust, Is Vital To All Teams When They Rely On
Each Other To Make Decisions, Interpret Results, And Form
Partnerships.
• Innovation Leads Organizations To Get The Most Out Of Available
Technologies, Resources, And Markets.
• Psychological Safety Provides The Support Employees Need To
Take Risks And Provide Honest Feedback.
• Employee Wages - a form of monetary compe nsation for employees.
They are paid according to the amount of time worked by the
employee.
• Code Of Conduct - a policy that outlines principles and standards
that all employees and third parties acting on behalf of the company
must follow .
• Leave Policy - a document that lays down the rules and regulations
related to various types of leaves that an employee can avail of .
• Employee Provident Fund - a scheme for providing a monetary
benefit to all salaried individuals after their retirement.
• Gratuity Policy - The Act provides for payment of gratuity at the rate
of 15 days wage s for each completed year of service subject to a
maximum of Rs. ten lakh .
• Paternity Leave Policy - The leave may lapse if it is not availed
within 6 months of the birth of the child .
• Maternity Leave Policy - a paid leave/absence from work provided
by an employer to a woman employee for the period before and after
childbirth .
• Strategized Hiring - A strategic recruitment plan is a detailed
roadmap on how to attract high -calibre talent for your organization.
• Global Hiring - managing an international payroll
• Employee Management - the effort to help employees do their best
work each day in order to achieve the larger goals of the organization .
• Employee Engagement - the degree to which employees invest their
cognitive, emotional, and behavioural energies toward positive
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112 Global HRM
112 • Compensation And Benefits - a sub -discipline of human resources,
focused on employee compensation and benefits policy -making .
• Risk Management - he process of identifying, assessing and
controlling threats to an organization's capital and earnings.
• Labour Laws - those that mediate the relationship between workers,
employing entities, trade unions, and the government .
• ILO Conv entions - cover a wide area of social and labour issues
including basic human rights, minimum wages, industrial relations,
employment policy, social dialogue, social security and other issues .
• Equal Remuneration - Act provides for payment of equal wages fo r
work of same and similar nature to male and female workers and for
not making discrimination against female employees in the matters of
transfers, training and promotion etc.
• Equal Opportunity - the policy of giving everyone the same
opportunities for em ployment, pay, and promotion, without
discriminating against particular groups .
• Employee Relations - an organization's efforts to create and maintain
a positive relationship with its employees.
REFERENCE:
https://universalteacher.com/1/key -issues -in-international -industrial -
relations/
https://www.gartner.com/en/human -resources/glossary/cultural -change
https://www.achievers.co m/blog/organizational -culture -definition/
https://www.betterplace.co.in/blog/hr -policies/
https://www.us emultiplier.com/blog/global -human -resource -best-practices
https://universalteacher.com/1/key -issues -in-international -industrial -
relations/
https://training.itcilo.org/actrav_cdrom1/english/global/law/lablaw.htm
https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=
&cad=rja&uact=8&ved=2ahUKEwjCn6Wrhp77AhWY6jgGHVdVCDIQ
FnoECA0QA w&url=https%3A%2F%2Fen.wikipedia.org%2Fwiki%2FInt
ernational_labour_law&usg=AOvVaw340LHqyNOW2XHfXVT_zWVt
https://cnx.org/contents/AF797NVo@1.1:VQQ5_oNB@1/The -influence -
of-trade -unions
https://bizfluent.com/about -7588167 -role-trade -unions -industrial -
relations.html
https://www.britannica.com/topic/equal -opportunity
https://www.cipd.co.uk/knowledge/fundamentals/relations/employees/fact
sheet#
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113 4
INTERNATIONAL COMPENSATION AND
BENEFITS
Unit Structure
4.0 Objectives
4.1 Introduction
4.2 Theory of Employee Development
4.2.1 Four major theories of training and development is given below
4.3 Objectives of International Compensation
4.3.1 Why should HR leaders care about the objectives of
compensation management?
4.3.2 What can HR leade rs do to ensure that the objectives of
compensation management are achieved?
4.3.3 How can achieving the objectives of compensation
management improve company culture?
4.4 Benchmarking global practices
4.4.1 5 benchmarking best practices
4.5 Motivation an d Reward systems
4.5.1 Process and type of motivation
4.5.2 Model of Maslow’s hierarchy of needs
4.5.3 Expectancy model for reward
4.5.4 Comprehensive model of rewards and incentives
4.5.5 Model for comprehensive reward system
4.6 Problems with global comp ensation
4.7 Self-Assessment Questions
4.8 Summary
4.9 Key-Words
4.0 OBJECTIVES
To Learn:
• Four major theories of training and development is given below
• Why should HR leaders care about the objectives of compensation
management
• What can HR leaders do to ensure that the objectives of
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114 Global HRM
114 • How can achieving the objectives of compensation
management improve company culture
• Process and type of motivation
• Model of Maslow’s hierarchy of needs
• Expectancy mode l for reward
• Comprehensive model of rewards and incentives
• Model for comprehensive reward system
4.1 INTRODUCTION
Competitive advantage is referred to that ability of an organization which is
not possessed by the other organizations and it is a competitive
advantage which leads the organization to the top positions. Four major
theories of training and development are given Theory of Reinforcement,
Theory of Learning Type, Theory of Experiential Learning and Theory
of Social Learning . . Successfu l organization of today has built their human
resource work force over the passage of time.
HR leaders can support effective compensation packages by collaborating
with managers to build an inclusive compensation program that addresses
employee needs and the fluid job - market. HR leaders play a pivotal role in
building compensation plans which fit the needs and desires of employees
and align with the company vision. HR leaders and compensation
management can implement changes based on employee feedback
When you benchmark and analyse like a pro, you’ll be able to detect new
market trends, pinpoint your biggest competitive threats, and gauge and
grow your market share. The easiest way to benchmark would be to focus
on performance metrics and publicly avai lable information, like social
media followers, the number of employees, or quarterly revenue (for public
companies). Benchmarking is about identifying opportunities.
Different types of benchmarking enable you to drill down into your data for
different pur poses.
Organizational strategy associated with motivation and rewards towards job
satisfaction of the employees has resilient effect on the success of the
organization. Motivation is initiated by the conscious or unconscious
recognition of unsatisfied nee ds. These needs create wants, which in turn
become desire to achieve or obtain something. Motivation theories try to
explain why people at work behave the way they do in terms of their efforts
and strive for achievement. Maslow’s hierarchy of needs is a th eory of
personality which identifies five basic need categories. It has been seen that
if rewards and recognition offered to the employees then there is a
substantial modification in their motivation and satisfaction. The
comprehensive reward system states that rewards embrace everything
employees’ value in the employment relationship.
The understanding of the economic, political and social conditions of the
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115 International Compensation
and Benefits competing markets. The understanding of employee compensation
management requires understanding of the social contract in that country.
People with different cultural backgrounds will view compensation system
differently under the influence of culture. Ownership and financing o f
companies are dramatically different around the world and these differences
are vital to the understanding and managing of international payment.
Compensation decisions made in the domestic corporate offices and
exported to subsidies all over the world m ay relate to the corporate strategy
but discount local economics and social conditions.
4.2 THEORY OF EMPLOY EE DEVELOPMENT
Competitive advantage is referred to that ability of an organization which is
not possessed by the other organizations and it is a competitive
advantage which leads the organization to the top positions. There are many
organizations in the world who are leading the markets by gaining
competitive advantage in different fields of their business activities. One of
the way in which a firm can attain a competitive advantage over the
competitors is by building a force of superior human resource. Now the
question arises that how this force of superior human resource can be build.
The answer lies in a very important function of human resou rce
management i.e. training and development . It has been observed that the
employees or labour working in a competitive environment of market
always welcome the training and development programs which can enhance
their skills and knowledge. Now days every job holder understands that
to sustain and grow in the career it is very important to polish their skills. It
is not that time where one degree or diploma is sufficient for the whole life.
Employees actively participate in several programs which are organ ized by
their organization and it has been observed that in some organization
employee’s demand from their human resource department to arrange such
training and development programs. Successful organization of today has
built their human resource work for ce over the passage of time. There is no
doubt that this work force is a highly valuable asset for any organization
and the only possible way to build this workforce is training and
development. There are several theories which emphasize on the
importance of training and development in the organization and provides
different alternative methods for training and development.
4.2.1 FOUR MAJOR THEORIES OF TRAINING AND
DEVELOPMENT IS GIVEN BELOW
1. Theory of Reinforcement
This theory emphasizes on the learning behavior of a person and
suggests that the learner will repeat that behavior which is attached
with a positive outcome or result. Skinner an economist of
behaviourist school of thought proposed the theory of reinforcement
and suggested that the tr aining and development programs should be
aligned with the organizational objectives and a positive outcome
should be expected with such training and development programs.
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116 Global HRM
116 can be argued that there are several techniques available in human
resource practices which can be associated with the training and
development programs and the required suggestion by this theory can
be fulfilled. Different types of rewards in the form of bonuses, sala ry
raises, promotion and awarding of certificate after the training
program can be associated with the training and development
activities and these rewards will definitely generate a positive
outcome. If this is done by an organization then according to
the Skinner’s theory of reinforcement the trainer i.e. the employee
will show more interest in the training and development programs
held by the organization.
2. Theory of Learning Types
The theory presented by Gagne emphasized on learning of intellectual
skills. These are such skills which are found rare among the persons.
He suggested by different learning types in his theory and each
learning type contains some external and internal conditions. The five
categories of learning which Gagne defined in his t heory include
intellectual skills, verbal information, attitudes, cognitive strategies
and motor skills.
3. Theory of Experiential Learning
Experiential and cognitive types of learning are differentiated by
experiential theory of learning presented by C. Rogers . According to
Rogers, the wants and needs of the learner are addressed by this type
of learning. Experience gives the person a maturity and increases the
learning power along with the knowledge. Due to the personal
involvement, the learner is able t o conduct a self -evaluation test,
which allows him to understand the effect of learning on his/her
attitude.
4. Theory of Social Learning
Social theory presents a new view of learning i.e. social. According
to the presenter of this theory, Albert Bandura , direct reinforcement
cannot address all types of learning. Here by direct enforcement
means the training and development programs that is organized to
enhance the skills. According to this theory such programs are not
address all learning types as there are some social elements which
cannot be taught. Those elements are learned by the leaner from
his/her surroundings. Such type of learning is called observational
learning and this learning is associated with the understanding of
different human behaviours . The first type of learning defined in this
theory is through observation. In an organization the environment and
the surroundings plays a very important role. The environment should
be very professional and the surroundings should be in such a way
that t he people (employees) learn from them. This theory also
suggests that it is not necessary that the behavior is changed after
learning something. It is expected that a person’s behavior changes
after learning something, but it is not in all cases. Furthermo re the
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117 International Compensation
and Benefits learning process. If the mental status of the person is negative
regarding any learning activity then he will not take part in that
learning process and even if he is forced to do so, he will not gain any
positivity from that process. In organizational training programs the
mental state can be made positive regarding the training and
development programs by associating the rewards and benefits with
such programs which will motiva te the employees and help to build a
positive mental state. The case company also follow this theory as it
allows the employees to learn from the surrounding and provides an
environment where they can learn from their supervisors/managers
and co -workers.
4.3 OBJECTIVES OF IN TERNATIONAL
COMPENSATION
The objectives of compensation management are to attract, engage, and
retain employees through competitive compensation plans that align with
the company budget, corresponding job -market, and government
regulations.
Good compensation management should:
• Attract and recruit talent
• Motivate employees
• Maintain morale
• Adhere to government regulations and company compensation
philosophy
• Reflect the current job -market
Compensation management can achie ve its objectives by offering:
• Attractive salaries
• Useful benefits
• Bonuses, incentives, and programs to improve employee wellbeing
• Retirement savings
• Insurance
4.3.1 WHY SHOULD HR LEADERS CARE ABOUT
THE OBJECTIVES OF COMPENSATION MANAGEMENT?
HR leaders play a pivotal role in building compensation plans which fit the
needs and desires of employees and align with the company vision.
Maintaining excellent employee compensation can lead to an increase in:
• Engagement
• Retention
• Productivity munotes.in

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118 Global HRM
118 Companies that offer competitive and life -enhancing compensation can
raise motivation in the workplace and improve work performance, which
ultimately leads to greater company success.
4.3.2 WHAT CAN HR LEADERS DO TO ENSURE THAT
THE OBJECTIVES OF COMPENSAT ION MANAGEMENT ARE
ACHIEVED?
HR leaders can support effective compensation packages by collaborating
with managers to build an inclusive compensation program that addresses
employee needs and the fluid job - market.
• Develop and apply a compensation ph ilosophy. A compensation
philosophy formally documents the company reasoning behind
employee salaries, bonuses, and benefits. Consistently adhering to the
compensation philosophy demonstrates company integrity and
transparency to employees and job candidat es.
• Gather employee feedback . Employees can provide the most
accurate feedback regarding compensation plans. HR leaders can
conduct anonymous surveys, allowing employees to relay their honest
opinions and suggestions. Before conducting the survey HR lead ers
can explain why they will be running a survey – because employee
opinions and experience are invaluable and their job -satisfaction
matters.
• Follow through with employee feedback . HR leaders and
compensation management can implement changes based
on employee feedback. While there are numerous aspects to consider
when building compensation plans, adjusting compensation plans to
address employees’ financial and lifestyle needs can lead to greater
retention and engagement.
• Explain the compensation plan t o employees. Perhaps employees
receive competitive compensation packages, yet they aren’t aware of
how to access their benefits. HR leaders can review compensation
plans with managers, who in turn can clarify the plans to their team
members. This helps emp loyees appreciate and benefit from every
aspect of the compensation package.
• Offer compensation to improve quality of life. In addition to base
pay, compensation can include life -enhancing benefits, such as a
pleasant work setting, a workplace wellness p rogram, extra vacation
days, or daily fresh catering.
4.3.3 HOW CAN ACHIEVING THE OBJECTIVES OF
COMPENSATION MANAGEMENT IMPROVE COMPANY
CULTURE?
Attracting, retaining, and engaging employees through a comprehensive
compensation program is integral to building a thriving company culture.
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and Benefits employee well -being demonstrates a company’s value for its employees.
Employees who receive such all -inclusive compensation are bound to
contribute po sitive energy and a good attitude to the company culture.
4.4 BENCHMARKING GLO BAL PRACTICES
With the digital world as fiercely competitive as ever, benchmarking is your
key to staying ahead.
In its most basic form, benchmarking compares your business t o others in
your industry, giving you context to understand performance relative to the
market. It’s the only way to get an accurate picture of your performance.
When you benchmark and analyse like a pro, you’ll be able to detect new
market trends, pinpoint your biggest competitive threats, and gauge and
grow your market share.
Keep reading for five benchmarking best practices that we swear by
for continuous improvement and growth. Let’s get started.
4.4.1 5 BENCHMARKING BEST PRACTICES
1) Measu re what’s relevant, not what’s easy
The easiest way to benchmark would be to focus on performance
metrics and publicly available information, like social media
followers, the number of employees, or quarterly revenue (for public
companies). While this info rmation can be important, it doesn’t cut it
if you want to reap the benefits of benchmarking.
Start with your key business questions and the metrics you need to
answer them. Let’s say you’re an analyst for a top eCommerce
platform and you notice that you’ re losing many prospects along
the conversion funnel journey , but you don’t know where or why.
The first map out the entire buying journey, benchmarking each
customer touch -point against industry norms and your past
performance. Instead of benchmarking conversion
rates , benchmark the steps with the highest value, this will allow you
to determine where you have the best opportunity to optimize. Other
powerful metrics to benchmark for better context to answer this
question:
• Engagement rate
• Website traf fic
2) Always ask “why” after answering the “what”
Defining what to benchmark is straightforward. Figuring out why the
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120 Take the gaming sector as an example. What should we measure?
Traffic. Over the holiday season, you may find that certain sites
experience increased traffic at night, while others receive
higher engagement during the day. Whereas you may see little to no
change in time spent on your website, your competitors could see
dramatic increases or decreases in session duration .
Why the erratic and unsynchronised shifts in behaviour? We’re
looking at an industry that is exceptionally diverse in terms of website
demographics . And that’s one place to start digging
and benchmarking.
If you skip this best pract ice, you may try to solve an issue that isn’t
an issue at all. Only when you find explanations for discrepancies can
you benchmark successfully and create an action plan.
3) Benchmark often
Benchmarking data has little meaning as a one -time project and
should be an ongoing process. So what’s the right frequency? That
depends, but the bottom line is that different metrics need to be
handled differently. Some require continuous monitoring, others
periodically.
For example, your market share most likely wo n’t jump over the
course of a week. Checking quarterly would be sufficient under stable
market conditions. Conversely, referral traffic from your various
affiliates is something you want to keep a close eye on. You’ll have
to create different benchmarking strategies and timelines depending
on what you’re tracking.
Having said that, the speed of business is accelerating together with
the agility of the markets. You may consider benchmarking more
frequently, in general, to stay agile and ahead of your compe tition.
4) Don’t try to be the best at everything
Define the areas in which you strive to be the best because you can’t
be the best at everything. Find out the areas that you excel in and focus
on highlighting your unique offering and capabilities.
Acknowledge your position, analyse, understand it, and be open to
changes. A lot of times, “that’s how we’ve always done it” or “that’s
what characterizes us” stands in the way of improving your strategies.
Focus on your research and let the data be your gui de.
5) Apply different types of benchmarking
Benchmarking is about identifying opportunities. Different types of
benchmarking enable you to drill down into your data for different
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and Benefits • Competitor benchmarking – Compare your data to the
industry average, the best -in-class, or a few selected
competitors.
• Internal benchmarking – Evaluate sections or pages of your
site compared to the whole or specific competitors’ pages.
• Performance benchmarking – Focus on perfo rmance metrics
over time
• Process benchmarking – Compare the results of different
processes to reach the same outcome.
4.5 MOTIVATION AND R EWARS SYSTEM
In the ever increasing competitive business environment, organization
managements are now recognizing that there is a significant opportunity
available today for improving the return on the human resources
investment. This opportunity consists of aligning of the reward and
incentive plans with organizational strategies since the success of the
organization significantly depends on highly motivated employees who are
productive and creative. The motivated employees enhance the value they
deliver to the organization. This process of motivating the employees is
crucial for the organizational success , and its ability to attract and retain top
performers for achieving the organizational objectives. It is important for
the organizational management to understand that there is a link between
rewards and motivation and there is a necessity to uncover what motivates
their employees. The big challenge is to create an environment which allows
all the employees to feel valued, perform at their best, and achieve the
organizational goals and the objectives.
Organizational strategy associated with motivation and rewards towards job
satisfaction of the employees has resilient effect on the success of the
organization. The connections between motivation, rewards, and job
satisfaction of the employees are of strategically importance for the
organization for its succe ss. Organization managements need motivated
employees for maintaining an effective workforce which is willing to
achieve strategic organizational goals and objectives.
In the present day environment, the organization is highly dependent on the
work motivat ion level of its employees. Motivated employees are crucial
for the success of the organization. The organization can reach some level
of success without highly motivated employees but in that case it rarely
achieves its full potential. Employees, being hu man, need encouragement
for their efforts. Motivation and rewards have a strong link. Hence, it is
necessary for the organizational management to find out the ways which
motivates the employees so that a suitable reward and incentive system can
be planned for the motivation of the employees for the effective
performance of the organization. The well planned reward and incentive
system can boost up the employees’ motivation at work and enhance their
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122 The word ‘motivate’ is der ived from the Latin verb ‘movere’ which means
‘to cause movement. Motivation refers to the activation, direction, intensity
and persistence of human behaviour and the manner in which this behaviour
is sustained towards reaching a desired goal. It can be de fined as ‘a set of
energetic forces which originate both within as well as beyond an
individual’s being to initiate work -related behaviour, and determine its
form, direction, intensity, and duration’. It is also defined ‘the set of
processes that arouse, d irect, and maintain human behaviour towards
attaining some goal’.
Rewards can be used to influence motivation. By no means are financial
rewards the only way to motivate, as there are many HRM (human resource
management) practices which aim to motivate. Th e scope of the reward
systems is broadened enough to include non -financial rewards, as these are
also important to direct and shape the desired employees’ behaviours.
Motivation is the desire to achieve beyond expectations, being driven by
internal rather than external factors. It means to be involved in a continuous
striving for improvement. Motivation, in the context of work, is a
psychological process which results from the interaction between the
employee and the work environment and is characterized by a certain level
of willingness. The employees are willing to increase their work effort in
order to fulfil a specific need or desire which they hold. Motivation is
frequently understood as ‘the process that accounts for an individual’s
intensity, directio n, and persistence of effort toward attaining a goal’. This
definition can be divided into three main parts, where the intensity is related
to the drive or energy behind individual action and effort, the direction
refers to how efforts are correctly channe lled into the direction which
benefits the organization, and the persistence deals with how long an
individual can maintain efforts to achieve goals.
4.5.1 PROCESS AND TYPE OF MOTIVATION
Motivation is initiated by the conscious or unconscious recognition o f
unsatisfied needs. These needs create wants, which in turn become desire to
achieve or obtain something. In order to satisfy needs and wants, goals are
created and behaviour is selected to achieve the goals. If the goal is
achieved, the behaviour is like ly to be repeated when a similar need
emerges. If the goal is not achieved, the action is less likely to be repeated.
The process of motivation can be shown of their efforts and strive for
achievement. The process of motivation (Fig 1) consider that
1. there is a need
2. there is establishing of a goal
3. taking of the required action, and
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Fig 1 Process and type of motivation
The process of motivation is initiated b y the conscious or unconscious
recognition of unsatisfied needs. These needs create wants, which in turn
become desire to achieve or obtain something. In order to satisfy the needs
and wants, goals are created and behaviour are selected in order to achieve
these goals. If the goal is achieved, the behaviour is likely to be repeated
when a similar need emerges. If the goal is not achieved, the same action is
less likely to be repeated.
Motivation involves the emotional, social, biological, and cognitive
influences that initiate behaviour. It is a factor which exercises a powerful
force on the employees’ activities and exertion. It is an accretion of diverse
practices which effects and directs the behaviour of the employees to
accomplish certain particular goa l. It is like a vigorous in the current
environment which clearly produces and incorporates an optimistic
influence on the job satisfaction. Motivation relay on a certain intrinsic and
extrinsic features which are collaborated with positive results in abun dantly
devoted employees. Tangible incentives are functioning in growing
performance for assignment and to inspire the smarter thinking. They
support both quality and quantity to accomplish organizational goals.
Moreover, factors related to the rewards and incentives are the most
favoured factors for the employee motivation.
Management can motivate employees through methods such as salary,
promotion, and praise. Employees can also motivate themselves by seeking
work where individual goals, needs and wants a re achieved. These two
types of motivation are called intrinsic and extrinsic motivations (Fig 1) and
are more closely described as follows.
Intrinsic motivation refers to the motivation which comes from inside of an
individual. This motivation is generate d through satisfaction or pleasure
which one gets in completing or even working on a task. Factors which
influence on intrinsic motivation include responsibility, freedom to act,
scope to use and develop skills and abilities, interesting work and
opportuni ties for advancement. These motivators, which are concerned with
the quality of work life, tend to have a long -term effect since they are
inherent in individuals and not imposed from outside.
Extrinsic motivation is something which is done to or for employ ees to
motivate them. It arises from factors outside an individual, such as money,
grades, criticism or punishments. These rewards provide satisfaction and
pleasure that the task itself might not provide. Extrinsically motivated
employees can work on a tas k even when they have little interest in it. This
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124 type of motivation normally has an immediate and powerful effect, however
it does not tend to last for long.
4.5.2 MODEL OF MASLOW’S HIERARCHY OF NEEDS
Motivation theories try to explain why people at work behave the way they
do in terms of their efforts and strive for achievement. The theories of
motivation can be divided into the following two categories.
• Content theories – These theories of motivation are based on the
needs of individuals. These theories try to explain why the needs of
individuals keep changing with time and therefore focus on the
specific factors which motivate them. These theories, in general,
explain mo tivation as the product of internal drives that encourage the
individual to move towards the satisfaction of his needs. Major
content theories of motivation are
1. Maslow’s hierarchy of needs (Fig 2)
2. McClelland’s learned need theory and
3. Alderfer’s ERG theory, and
4. Herzberg’s motivation -hygiene theory.
• Process theories of motivation – These theories tries to explain how
behaviour change occurs and why individuals act in different ways.
These theories focus on how an individual needs i nfluence his own
behaviour. These theories originate from early cognitive theories,
which state that behaviour is the result of conscious decision making
processes. Major process theories of motivation are
1. reinforcement theory
2. expectancy theory
3. equity theory and
4. goal setting theory.

Fig 2 Model of Maslow’s hiera rchy of needs
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and Benefits Maslow’s hierarchy of needs is a theory of personality which identifies five
basic need categories. First category is the physiological needs which are
basic human needs that are vital for survival. Examples of these needs are
food, water, ai r and comfort. The organization provides a financial package
by paying a salary and this way helps to satisfy employees’ physiological
needs.
Second category is the safety need which is the need which protects the
employees from harm, fear or any form of p hysical threat. These comprise
needs relating to job security, occupational health, and healthy working
environment, etc.
Third category is the social need which is the need of getting associated
with social activities such as friendship, societies, groups or any form of
socialized group.
Fourth category is the esteem needs. In everyone’s life, it gets to a point in
where one needs belongingness. Employees need to feel that they are part
of the organization or that ‘their voices can be heard’. This kind of need can
come in two forms namely satisfying internally and externally. These
include internal motivations such as self -esteem, accomplishment, and self -
respect, as well as external motivations such as recognition, reputation, and
social status.
Fifth cate gory is the self -actualization. It is the highest need which can fully
satisfy the employee. However, it is to be noted that because of the open
nature of this need, it can never be fully satisfied. Normally it is seen that,
just a meagre percentage of emp loyee population actually get to this level
of self -actualization. This kind of motivation offers employees, the
opportunity to get involved in activities such as innovations, creativity, etc.
Such need includes truth, justice, wisdom, and meaning.
It can be concluded that motivation is important both for the employees and
the organization. Employees benefit from being motivated because it helps
them in self -development in order to ultimately achieve personal goals.
Organization on the other hand benefits b ecause motivated employees
ensure a team which is empowered, optimistic, adaptable, creative and
successful, all of which potentially improve the effectiveness and success
of the organization.
Possibly the best means of understanding the employees’ motivat ion is to
consider the social meaning of the work. In this respect, short -term goals
and long -term goals of employees and the management can affect
production in several different ways. Hence, giving attention to the manner
in which rewards given to the em ployees are perceived is preferable to
assuming that reward means the same thing to all. Rewards which the
employees receive are very much a part of the understanding of motivation.
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126 Employee motivation is one of the most essential parts of the success,
performance, development and survival of the organization. Motivated
employees are of great value for the organization, since
1. they are efficient, effective, focused and committed to the
organizational mission and goals
2. they frequently experience higher job satisfaction
3. they are less frequently absent from work
4. they deliver higher levels of performance and productivity
5. they tend to work harder when workplace demands are high
6. they are loyal to the organization, resulting in low employee turnover
7. they deliver high levels of customer service which leads to greater
customer satisfaction and customer retention.
The in trinsically motivated employees bare committed to their work to the
extent to which the job inherently contains tasks which are rewarding to
them. And the extrinsically motivated employees are committed to the
extent that they can gain or receive external rewards for their jobs. For
employees to be motivated in a work situation there is to be a need, which
the employees have to perceive a possibility of satisfying through some
reward. If the reward is intrinsic to the job, such desire or motivation is
intrinsic. But, if the reward is described as external to the job, the motivation
is described as extrinsic.
It is being frequently accepted that motivating employees is the ultimate
responsibility of organizational management. While rewards can serve as
incent ives and those who bestow rewards can seek to use them as
motivators, the real motivation to act comes from within the individual. A
well designed and functional reward system is an efficient way to increase
employees’ work motivation. Motivation can origi nate from internal
sources, described as biological and psychological variables, and from
external sources, such as rewards, incentives and goals. As a result,
motivation can be described as being either intrinsic or extrinsic. Intrinsic
sources of motivat ion encompass those which arise from within the
individual. Biological attributes and psychological depositions are
examples. Extrinsic sources of motivation are a result of the environment
outside the individual and it includes rewards such as money, soci al
recognition or praise.
The rewards distinguish into three main types which the employees seek
from their organization i.e. extrinsic, intrinsic and social rewards (Fig 1).
Extrinsic rewards are the physical benefits provided by the organization
such as pay, bonus, fringe benefits and career development opportunities.
Intrinsic rewards refer to the rewards that come from the content of the job
itself, and encompass motivational characteristics of the job such as
autonomy, role clarity and training. Social rewards arise from the
interaction with other people on the job and can include having supportive
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and Benefits 4.5.3 EXPECTANCY MODEL FOR REWARD
There also exist a substantial affiliation between reward and recogni tion,
and similarly in employee motivation and job satisfaction. It has been seen
that if rewards and recognition offered to the employees then there is a
substantial modification in their motivation and satisfaction. Fig 3 shows
the expectancy model for r eward.

Fig 3 Expectancy model for reward
Employees change their behaviour by work ing harder or prioritizing their
actions if they know that by doing so they are going to be rewarded with
something of value to them. Hence incentives are a great way to reward
effort and behaviours which the performing organizational managements
always en courage. Incentives paid to employees in return for efforts and
behaviour of employees which contribute to the organization goals, enhance
organizational effectiveness and productivity and hence generate a positive
outcome both for the organization and the employees.
There are several factors which can affect employees’ performance like
training and development opportunities, working conditions, employee -
employer relationship, job security and organizational over all policies and
procedures for rewarding e mployees. Among the factors which affect
employee performance, motivation which comes with rewards is of utmost
importance. The word rewards state the benefits which the employees
receive from their jobs, and the significant elements of employee job
attitu des are organizational commitment, motivation and job satisfaction. In
the organization, rewards play an important role in building and sustaining
the commitment among employees which ensures a high standard of
performance and the employees constancy
Reward refers to all categories of financial benefits, tangible services and
benefits which an employee receives as part of employment relationship
with the organization. There are two aspects which decide how much a
reward is attractive. These aspects are the quantity of reward which is
provided and the weightage an employee gives to a specific reward.
Employees are certainly closer to their organizations and perform better job,
while they receive healthier reward and recognition in their organizations.
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128 Rewards increase the level of efficiency and performance of the employees
on their jobs and it then result in increasing the success of the organization.
Rewards are the benefits that arise from performing a task, rendering a
service or discharging a respons ibility. Salary is the most significant and
motivating benefit which is received by the employee in return for
performing a task or service. Salary can also be a powerful demotivation if
the employee is not satisfied with the pay packet. There are two type s of
rewards as given below.
Tangible rewards – Tangible rewards are also called transactional rewards.
These arise from transactions between the employer organization and
employee and include rewards such as pay, bonuses and other benefits.
Intangible rew ards – These rewards are known as relational rewards.
These rewards are to do with learning, development and work experience.
The examples of these rewards are opportunity to develop, recognition from
the management of the organization, colleagues, persona l achievements and
social life.
Both tangible and intangible rewards are necessary to maximize the positive
impacts on the employees with respect to motivation, job engagement and
organizational commitments. Both the rewards together are known as
comprehen sive reward system.
Comprehensive reward system is an important tool which the management
can use to channel employee motivation in desired ways. In other words,
reward systems seek to attract people to join the organization, to keep them
coming to work, a nd motivate them to perform to high levels. The reward
system consists of all organization components which include HRM
processes, rules, and decision making activities involved in the allocation
of compensation and benefits to employees in exchange for th eir
contribution to the organization.
Good remuneration has been found over the years to be one of the policies
the organization can adopt to increase the employees’ performance and
hence increase the organizational productivity. Also, with the present glo bal
economic trend, managements of many organizations have realized the fact
that for the organization to compete favourably in the present day
competitive market, the performance of the employees goes a long way in
determining the organizational performan ce. These managements have seen
that how an appropriate reward package can prop up or influence employees
to develop positive attitude towards their job and thereby increase their
productivity.
Job satisfaction is a sensation which the employees have about their work
environment and their expectations towards work. Thus, job satisfaction can
be recognized as what one wants or values from the job. Different kinds of
satisfaction lead to diverse objectives and behaviours which ascend from
different types of m otivation in getting different types of rewards. Rewards
with their aftermath relationship are expected to establish on satisfaction of
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and Benefits who reveal high job satisfaction is motivated by rewards, and rewards
supported work engagement. The employee satisfaction achieved through
rewards is established to be associated with job satisfaction. In addition, job
satisfaction is associated with the monetary compensation (pay, promotion,
and in centives) and non -monetary compensation is one of the most
important explanatory variables in an organization.
4.5.4 COMPREHENSIVE MODEL OF REWARDS AND
INCENTIVES
Organizations are to have determined a balance between the performance
of the employees and t heir commitment to the work which result into job
satisfaction. Reward and motivation are the two main factors which have an
effect on the job satisfaction and motivation of employees. There is a
significant relationship between reward and recognition, and between
motivation and job satisfaction. Providing the financial benefit to
employees without any prominent expression also loses its importance.
Rewards have a direct link with the motivation and job satisfaction of the
employees. Variations in rewards a nd recognition can bring a positive
change in work motivation and job satisfaction of the employees. Fig 4
shows a comprehensive model of rewards and incentives.

Fig 4 Comprehensive model of rewards and incentives
It has been shown that strategic rewards which are vertically integrated with
the support of organizational strategies can also be horizontally integrated
with other human resource (HR) strategies, in order to achieve the
employees as well as the organizational needs. The comprehensive rewards
system is to be developed in a way that people strategy is aligned with the
organizational strategy. Hence, when looking at the concept of the
comprehensive rewards system, it is necessary to identify that it aligns with
strategi c rewards. When developing comprehensive rewards system,
management is to consider all aspects of work experience which employees’
value.
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130 The comprehensive reward system states that rewards embrace everything
employees’ value in the employment relationship . It lays emphasis on why
it is imperative to get the financial rewards element right and also providing
employees with rewarding experiences which arises from the work they do,
their work experience, how they are managed and developing their skills
career s. This essentially means that while getting financial rewards right it
is important for the organization to continue to practice the things which
enhances the elements that contribute to non -financial rewards. The
comprehensive reward system model consist s of five elements of rewards
including compensation, benefits, work -life balance, performance and
recognition and development and career opportunities. These elements
signify the tool kit which the organization selects to offer for the
comprehensive rewar d system which is aligned with the value proposition
that creates value for both the employees and the organization.
4.5.5 MODEL FOR COMPREHENSIVE REWARD SYSTEM
It is also important to understand the elements which the comprehensive
reward system is comprised of. It is necessary to understand why the
comprehensive reward system elements are vital in the organization. The
five elements of the comprehensive reward system can be managed both
formally and informally. The elements also take into considerat ion the
external influence it has on the organization, for example, regulatory issues,
cultural influences and practices, and competition. However, they are not
mutually exclusive and are not intended to represent the ways which the
organization organizes or deploy programs and elements within them. But
they are known to be the most important factors of attracting, retaining and
motivating employees. The universal rewards approach is required and
needs to be to be in accordance to the industry practice and culture in order
to ensure the successful implementation of the comprehensive reward
system in the entire organization. Fig 5 shows a model for comprehensive
reward system.

Fig 5 Model for comprehensive reward system
There are essential attributes that contributes to the success of a reward
system for the employees. These attr ibutes are
5. recognition of individual differences between the employees,
6. clear identification of behaviour deemed worthy of recognition,
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and Benefits 7. allowing employees to participate in the reward system,
8. the system is to link rewards to performance, and
9. the recognition process is to have clear visibility.
Employee rewards system is not only about tangible and intangible awards.
It is also about changing the corporate culture in order to meet goals and
initiatives and most importantly to connect employ ees to the core values
and beliefs of the organization. Strategic employee recognition is seen as
the most important program for the organization not only to improve
employee retention and motivation but also to positively influence the
financial situation .
4.6 PROBLEMS WITH GL OBAL COMPENSATION
The understanding of the economic, political and social conditions of the
business where they are is vital to make sound compensation strategy in the
competing markets. Though compensation and reward system is used
to motivate employees, but it isn’t just used to attract and hold talents. It
serves as a comparative advantage for companies if used properly. Thus, the
establishment of international compensation and reward system has been at
the top agenda of multinational giants. It becomes a new boom that ma ny
multinational giants try to establish compensation and reward system in a
perspective of global mind -sets rather than local. Global knowledge and
information are collected to overcome the limits of local experience and the
result is that the integration of global mind -sets in the system contributes to
the competitive advantage of those brilliant companies.
The main factors affecting international compensation strategy are;
1. social contract
2. culture
3. trade union
4. ownership and capital market s, and
5. managers’ autonomy.
1. SOCIAL CONTRACT
Considered as part of the social contract, the employment relationship
is not just an interaction between an employee and an employer, and
it also includes the government, all managers and all employees. T he
relationships and expectations of these groups form the social
contract. When thinking about how people get salaries around the
world, it is apparent that different people have different ideas, so they
think variously of government, employers and employ ees. The
understanding of employee compensation management requires
understanding of the social contract in that country. How to change
employee compensation systems –for example, to make them serve
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132 control costs –requires changing the expectations of groups to the
social contract.
2. CULTURE
Culture is an abstract but collective concept, which is not defined as
a certain object but covers more than one object. It is a collection of
Material w ealth and Spiritual wealth including religious, customs,
education, regulations, laws, economy and even science. Culture also
plays its part in the international compensation system.
People with different cultural backgrounds will view compensation
system differently under the influence of culture. So does the
management of the system. Culture is a thing deeply rooted in the
blood of people. People in the same nation tends hold the same or
similar mental programming way to process ideas and information. In
other countries, the way may differ. So is the case of compensation
system, the certain culture will inclines to match one culture of a
nation if global mind -sets are not brought in and lead people to
manage systems in a certain way. A simple and direct w ay to confirm
it is to see the different meanings compensation in different countries.
Culture which forms a system of knowledge, information and beliefs
will affect attitudes and behaviours associated with the work. Culture
affects the variables of the established compensation system. Though
equity customs are shared among the employees from many countries,
America and Japan for example, the force of the customs really works
differently in different countries. In all, having the awareness of
focusing the influence of culture values on employees is extremely
important for corporate leaders. When dealing with compensation
system, the controlling for context of culture should be paid attention.
3. TRADE UNIONS
Europe keeps highly solidary and Asia is less h eavily unionized. In
some countries, team agreement sets how much the workers can earn
even though the workers may not be union members. In France for
example a majority of workers are paid by collective agreements, but
only a few are union members. Social legislation differs among
European countries; UK has the fewest requirements, because it has
no minimum salaries, no maximum working hours, and no common
methods for employee participation. Social insurance in Germany and
France are the most generous.
4. OWNERSHIP AND CAPITAL MARKETS
Ownership and financing of companies are dramatically different
around the world. These differences are vital to the understanding and
managing of international payment. These patterns of ownership
make certain kinds of pay s ystems have no significance. Employees
in these corporations have various values and expectations. One
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133 International Compensation
and Benefits corporations like salaries according to one’s performance more;
however, those who work in fe deral -owned corporations are on the
opposite side. So it is obvious that ownership differences have great
effects on types of payment. It is very misleading to consider that
every place is just like home.
5. MANAGERS AUTONOMY
Managerial autonomy reflects managers set his employees to make
decisions by themselves. There is a relationship between it and the
degree of centralization. Government, trade unions and corporate
police are responsible to restrict managerial autonomy. Compensation
decisions made in t he domestic corporate offices and exported to
subsidies all over the world may relate to the corporate strategy but
discount local economics and social conditions.
To sum up, international compensation is affected by economic,
institutional, organizational , and individual conditions, globalization
really represents that these conditions are varying – thus international
pay system are altering too.
4.7 SELF – ASSESSMEN T QUESTIONS
FILL IN THE BLANK
1) Skinner an economist of behaviourist school of thought proposed the
_______________.
2) According to ___________ theory such programs are not address all
learning types as there are some social elements which cannot be
taught.
3) According to C. Rogers, _______________ types of learning are
differentiated by experiential theory of learning
4) _______________ ______ employees through a comprehensive
compensation program is integral to building a thriving company
culture.
5) _____________ data has little meanin g as a one -time project and
should be an ongoing process.
6) Organizational strategy associated with _____________ towards job
satisfaction of the employees has resilient effect on the success of the
organization.
7) Two types of motivation are called ________________.
8) _____________ refers to the motivation which comes from inside of
an individual.
9) _____________ is something which is done to or for employees to
motivate them.
10) Maslow’s hierarchy of needs ___________ is the social need which
is the need of getting associated with social activities such as
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134 Global HRM
134 11) Maslow’s hierarchy of needs __________ is the physiological needs
which are basic human needs that are vital for survival.
12) Two types of rewards are _________________ .
13) The understanding of employee compensation management requires
understanding of the __________________ in that country
14) __________________ of companies are dramatically different
around the world.
ANSWER
1) Theory Of Reinforcement
2) Social Learning
3) Experiential And Cognitive
4) Attracting, Retaining, And Engaging
5) Benchmarking
6) Motivation And Rewards
7) Intrinsic And Extrinsic Motivations
8) Intrinsic Motivation
9) Extrinsic Motivation
10) Third Category
11) First Category
12) Tangible Rewards And In tangible Rewards
13) Social Contract
14) Ownership And Financing
TRUE OR FALSE
1) There are many organizations in the world who are leading the
markets by gaining competitive disadvantage in different fields of
their business activities.
2) The five categories of learning which Gagne defined in his theory
include intellectual skills, verbal information, attitudes, cognitive
strategies and motor skills.
3) Employees can provide the most accurate feedback regarding
compensation plans.
4) Government play a pivotal role in building compensation plans which
fit the needs and desires of employees and align with the company
vision.
5) HR leaders can review compensation plans with managers, who in
turn can clarify the plans to their team members.
6) When you benchmark and analyse like a pro, you’ll not able to detect
new market trends, pinpoint your biggest competitive threats, and
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135 International Compensation
and Benefits 7) The process of motivating the employees is crucial for the
organizational success, and its ability to attract an d retain top
performers for achieving the organizational objectives.
8) Motivation is the desire to achieve beyond expectations, being driven
by external rather than internal factors.
9) Management can motivate employees through methods such as
salary, promotion, and praise.
10) Maslow’s hierarchy of needs First category is the safety need which
is the need which protects the employees from harm, fear or any form
of physical threat.
11) Maslow’s hierarchy of needs Fourth category is the esteem needs and
Fifth category is the self -actualization.
12) The comprehensive reward system states that rewards embrace
everything employees’ value in the employment relationship.
13) Managerial autonomy does not reflects managers set his employees
to make decisions by themselves.
ANSWER
True. (2, 3, 5, 7, 9, 11, 12)
False. (1, 4, 6, 8, 10, 13)
MATCH THE COLUMN 1. Good compensation management should
a) Attractive salaries, Useful benefits, Bonuses, incentives, and programs to
improve employee wellbeing,
Retirement savings, Insurance 2. Compensation management can achieve
its objectives by offering: b) Engagement, Retention, Productivity 3. Maintaining excellent employee compensation
can lead to an increase in: c) Competitor, Internal, Performance, Process.
4. Types of benchmarking enable you
to drill down into your
data for different
purposes. d) Attract and recruit talent, Motivate employees, Maintain morale, Adhere
to government regulations and
company compensation philosophy,
Reflect the current job -market
ANSWER
1. d)
2. a)
3. b)
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136 4.8 SUMMARY
Competitive advantage is referred to that ability of an organization which is
not possessed by the other organizations and it is a competitive
advantage which leads the organization to the top positions. Four major
theories of training and development are Theory of Reinforcement, Theory
of Learning Types, Theory of Experiential Learning and Theory of Social
Learning
The objectives of compensation management are to attract, engage, and
retain employees through competitive compensation plans that align with
the company budget, corresponding job -market, and government
regulations. Develop and apply a compensation philosophy. Gather
employee feedback. Follow through with employee feedback. Explain the
compensation plan to employees. Offer compensation to impro ve quality of
life.
The easiest way to benchmark would be to focus on performance metrics
and publicly available information, like social media followers, the number
of employees, or quarterly revenue (for public companies). Benchmarking
data has little meaning as a one -time project and should be an ongoing
process.
Four types of benchmarking enable you to drill down into your data for
different purposes such as Competitor Benchmarking, Internal
Benchmarking, Performance Benchmarking, Process Benchmarkin g.
In the ever increasing competitive business environment, organization
managements are now recognizing that there is a significant opportunity
available today for improving the return on the human resources
investment. The motivated employees enhance th e value they deliver to the
organization. The word ‘motivate’ is derived from the Latin verb ‘movere’
which means ‘to cause movement. Motivation refers to the activation,
direction, intensity and persistence of human behaviour and the manner in
which this behaviour is sustained towards reaching a desired goal.
The process of motivation can be shown of their efforts and strive for
achievement. The process of motivation consider that, there is a need, there
is establishing of a goal, taking of the required action, and attaining of the
goal. The process of motivation is initiated by the conscious or unconscious
recognition of unsatisfied needs.
There are two types of motivation are called Intrinsic motivation and
Extrinsic motivation. Intrinsic motivation r efers to the motivation which
comes from inside of an individual. This motivation is generated through
satisfaction or pleasure which one gets in completing or even working on a
task. Extrinsic motivation is something which is done to or for employees
to m otivate them. It arises from factors outside an individual, such as
money, grades, criticism or punishments.
Maslow’s hierarchy of needs is a theory of personality which identifies five
basic need categories. First category is the physiological needs which are
basic human needs that are vital for survival. Second category is the safety
need which is the need whic h protects the employees from harm, fear or any
form of physical threat. Third category is the social need which is the need
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137 International Compensation
and Benefits groups or any form of socialized group. Fourth category is the esteem needs.
Fifth category is the self -actualization.
Employees change their behaviour by working harder or prioritizing their
actions if they know that by doing so they are going to be rewarded with
something of value to them. The word rewards state the benefits which the
employees receive from their jobs, and the significant elements of employee
job attitudes are organizational commitment, motivation and job
satisfaction. There are two types of rewards such as Tangible Rewards and
Intangible R ewards.
The understanding of the economic, political and social conditions of the
business where they are is vital to make sound compensation strategy in the
competing markets. . Global knowledge and information are collected to
overcome the limits of loc al experience and the result is that the integration
of global mind -sets in the system contributes to the competitive advantage
of those brilliant companies. The main factors affecting international
compensation strategy are; social contract, culture, trad e union, ownership
and capital markets, and managers’ autonomy.
4.9 KEYWORDS
• Competitive advantage - factors that allow a company to produce
goods or services better or more cheaply than its rivals.
• Theory of Reinforcement - a psychological principle suggesting that
behaviors are shaped by their consequences, and that individual
behaviors can be changed through reinforcement, punishment and
extinction.
• Theory of Learning Type - attempted to define people by how they
learn – based on individ ual strengths, personal preferences, and other
factors such as motivation and favoured learning environment.
• Theory of Experiential Learning - Experiential learning focuses on
the idea that the best ways to learn things is by actually having
experiences.
• Theory of Social Learning - social behaviour is learned by observing
and imitating the behaviour of others.
• Motivate employees - the enthusiasm, energy level, commitment, and
amount of creativity that an employee brings to the organization on a
daily basis .
• Maintain morale – The culmination of job satisfaction, life outlook,
and attitude.
• Employee Engagement - the degree to which employees invest their
cognitive, emotional, and behavioural energies toward positive
organizational outcomes.
• Employe e Retention - a phenomenon where employees choose to
stay on with their current company and don't actively seek other job
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138 • Productivity - a measure of economic performance that compares the
amount of goods and services produced (output) with the amount of
inputs used to produce those goods and services.
• Benchmarking - a process where you measure your company's
success against other similar companies to discover if there is a gap
in performance
• Motivation And Rewards - 'the set of processes that arouse, direct,
and maintain human behaviour towards attaining some goal'.
• reinforcement theory - a psychological principle suggesting t hat
behaviors are shaped by their consequences, and that individual
behaviors can be changed through reinforcement, punishment and
extinction.
• expectancy theory - individuals are motivated to perform if they
know that their extra performance is recognize d and rewarded
• equity theory - a theory of motivation that suggests that employee
motivation at work is driven largely by their sense of fairness.
• Tangible rewards - non-cash rewards that have monetary value, like
gift cards, travel vouchers, and mer chandise.
• Intangible rewards - non-material awards provided to an employee
that do not have inherent financial value.
• Global Compensation - the sum of your direct and indirect
compensation.
• social contract - an agreement, either implicit or explici t, governing
the behaviour of individuals and organizations within a certain
context such as a workplace, a culture, a nation or a social media site.
• Organizational culture - the underlying beliefs, assumptions, values
and ways of interacting that contri bute to the unique social and
psychological environment of an organization.
• Trade Union - an organisation made up of members (a membership -
based organisation) and its membership must be made up mainly of
workers.
REFERENCE:
https://www.mbaknol.com/human -resource -management/four -major -
theories -of-training -and-development/
https://www.hibob.com/hr -glossary/compensation -management -
objectives/
https://www.similarweb.com/co rp/blog/research/business -
benchmarking/benchmarking -best-practices/
https://www.ispatguru.com/motivation -and-rewards/
https://www.mbaknol.com/human -resource -management/factors -
influencing -international -employee -compensation/
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139 5
EXPATRIATION AND REPATRIATION
Unit Structure
5.0 Objectives
5.1 Introduction
5.2 Characteristics of effective expatriate managers
5.3 The Role Of Family
5.3.1 Global Mobility in the Age of Diversity
5.3.2 Expatriate Success Factors: The role of Global Mobility
5.3.3 5 tips to ease the relocation process
5.4 Dealing With Cultural Shock
5.4.1 What is Cultural Shock
5.4.2 Tips for De Dealing With Cultural Shock
5.4.3 How Will Culture Shock Affect Me?
5.5 Successful Repatriation Practices
5.5.1 Begin with the End in Mind
5.5.2 Don’t Wait Till the End
5.5.3 At the Time of Repatriation
5.6 Self-Assessment Questions
5.7 Summary
5.8 Key-Words
5.0 OBJECTIVES
To Learn:
• Global Mobi lity in the Age of Diversity
• Expatriate Success Factors: The role of Global Mobility
• tips to ease the relocation process
• What is Cultural Shock
• Tips for De Dealing With Cultural Shock
• How Will Culture Shock Affect Me
• Begin with the End in Mind
• Don’t Wait T ill the End
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140 5.1 INTRODUCTION
Expatriates and repatriates are key talent segments in today’s global mobile
workforce. Expatriates are employees leaving a country to go and work in
another country, usually with the expectation of returning to their home
country, although some of them may opt for citizenship in their host
country, if that is allowed. For example, South African expatriates in
countries such as the UK and USA can obtain citizenship, while expatriates
in the Middle Ea st cannot acquire citizenship and therefore are likely to
eventually return to South Africa.
Expatriates returning to their home countries are called repatriates. In other
words, you are an expatriate when you enter a new country for a work
assignment, and you are a repatriate when you return to your home country
after the international assignment. Be that as it may, expatriates and
repatriates are key talent segments and they therefore need to be treasured
for their specialised skills and international kno wledge and experience, as
well as the sacrifice they were willing to undertake for these international
assignments.
Success factors for managing expatriate assignments, and secondly offer
some lessons for repatriate management. Let’s start with expatriate
planning, here are some guidelines:
• Create a dedicated expatriate and repatriate management programme
as part of your global talent management strategy, with a particular
focus on employee wellness.
• Conduct thorough research about the host country so that the
expatriates will have sufficient background knowledge about the
country.
• Ensure adequate orientation and training about the host country, e.g.
national context, culture, laws and environment.
• Prepare expatriates to have a clear understanding of their p osition and
role in the host country.
• Identify any possible risks in the host country and develop appropriate
mitigation plans.
• Orientate the expatriate about any cultural dynamics in the host
country, e.g. language(s), laws, habits, customs, norms and rul es
(spoken and unspoken).
• Test potential expatriates on their global cultural adaptability, people
who are very adaptable to different cultures in one country may not
be able to adapt to a total different cultural environment on a totally
different contine nt.
• Integrate the family of the expatriate in your planning, in fact research
has indicated that expatriates adapt much quicker than their family
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141 Expatriation and Repatriation • In addition to a home country contact person, create a host country
support system for the expatriate s so that they are actively and
proactively supported at the local sites.
• A key aspect is to ensure that all HR and logistical arrangements are
in place, such as expatriate allowances, accommodation, language
training, schools etc.
• Ensure good communicatio n with their home country so that they
never feel isolated or neglected, keep them informed of all
developments affecting them at the home and host countries.
While most of the global HR research has focused on preparing expatriates
for international assig nments, the whole issue of repatriation requires more
attention, i.e. when expatriates return to their home country. We often put
90% of our effort into expatriation and only 10% of our effort into
repatriation, while the latter part is of utmost importan ce. Recently, a South
African expatriate returned home after five years. The repatriate struggled
so much to adapt back to her home country, that she returned back to the
UK and eventually acquired UK citizenship. Sadly, we lost a highly skilled
and capa ble professional given the fact that the repatriation phase of the
assignment failed.
• Keep a special folder of major changes in the country before the
repatriate returns.
• Prepare the repatriate to return, inform them of changes in laws, rules
and other cha nges.
• Organise a welcoming party and pack as part of the repatriation
programme.
• Formalise the repatriate programme so that the repatriate looks
forward to his or her return and can visibly be part of a caring
repatriate experience.
• Support the repatriate with logistical arrangements, e.g. schools,
home, office etc.
• Activate the necessary HR and other processes, e.g. salary
arrangements, relocation.
• Arrange an official debriefing with the repatriate and capture this
knowledge as part of your global market i ntelligence.
• Provide the necessary employee wellness support by focusing on the
unique wellness issues of repatriates.
• Develop a repatriate retention strategy to retain this special global
talent in your company.
• Ensure that the expatriate’s knowledge is u sed to tap into the host
country market.
• Use the experience of the expatriate to mentor, coach and prepare a
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142 • Put specific emphasis on developing a global mindset and culture in
your company, this will ease future international assignments and
repatriation in the process.
• Monitor the re -integration of repatriates into the company and the
country and address any problems or challenges as they arise.
The importance of the profession al talent management of expatriates and
repatriates cannot be over -emphasised. It requires a special programme and
dedicated focus to deal with the complex and unique needs of expatriates
and repatriates. Despite their special skills, as talented mobile e mployees,
expatriates and repatriates should also be treated as a high -risk talent
segment, as it may be more difficult to retain them, given their preference
for mobility. Ultimately, expatriate and repatriate management requires an
international talent management programme ensuring that all phases of the
talent life cycle are professionally planned, implemented and evaluated for
improvement and alignment.
5.2 CHARACTERISTICS OF EFFECTIVE EXPATRI ATE
MANAGERS
An expatriate is somebody who has left their country of origin in order to
reside in another country. Expats may leave home for work reasons and seek
more lucrative employment in a different country. Expatriates may live for
a while overseas or completely renounce their citizenship of one country in
favour of another.
Working abroad may sound like a dream job, but it’s not for everyone.
Living and working in another country comes with a unique set of
challenges. You’ll need more than technical skills to cut it as an expat. The
following characteristic s given below.
1. Global Curiosity
Being interested in and excited about new cultures is essential. If you
have a passion for meeting new people and an urge to learn about the
world, you’re more likely to be happy living abroad.
2. Emotional Intelligence
Being emotionally intelligent means that you can discern how others
are feeling and use that information to guide your own behaviour. If
you want to be an expat, you should be able to read different social
cues and non -verbal communication and asses how you r own
personality comes across to others.
3. Extreme Organization
If tax season sends you in a tizzy, expat life may not be for you. As
an American expat, you need to be able to balance multiple tax
systems, work within two bureaucracies, and stay on top of your visa
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143 Expatriation and Repatriation 4. Cultural Adaptability
A cross -cultural experience may sound like a breeze, but your family
trip to Europe 10 years ago won’t prepare you to settle into a
completely new environment. To move to another country, you’ll
have to be t olerant and respectful of new people and adapt to new
cultural norms to fit in.
5. Language Skills
Being able to communicate in the language of your new home is
important, even if you’re mostly communicating in your native
tongue.
Don’t worry about being fluent right away — picking up some key
phrases can help with everything from landing an overseas
opportunity to developing relationships with locals.
6. Flexibility
Every c ountry has a unique way of doing things, and expats should be
willing to cope with the traditions of those around them. If the country
you’re working in doesn’t value punctuality, be flexible if people are
late to a meeting. Stay calm and let matters follo w their course.
7. Leadership
The most successful expats know how to command a room, no matter
where that room is. If you aren’t a natural leader, try some strategies
to help you catch up. Mimic the strong leaders in your life, practice
effective communica tion, and become an expert in both your industry
and your adopted home.
8. Patience
Last but certainly not least, patience is a virtue when it comes to
expatriating. Things aren’t always as fast moving in other cultures or
when working across borders. Don’ t rush yourself when it comes to
adjusting and don’t rush others if they operate differently than you’re
used to.
5.3 THE ROLE OF FAMI LY
Organizations have a duty of care to their assignees, but does this extend to
the families of assignees too? After all, relocation affects not only the
assignee but their entire family. When looking at expatriate success factors
we cannot underestimate the importance of family support and involvement
in the assignment project.
Research shows a clear correlation between fam ily support and a successful
international assignment. Despite this, many organizations still overlook the
importance of providing the assignee and their family with a support
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144 This is where Global Mobility professionals can play a fundamental role in
helping both the assignee and their family to adapt as quickly as possible.
A bad start can set the tone for the rest of the assignment.
What happens when a family relocates?
When a family reloc ates, there is a typical set of issues they must deal with.
If adequate support is not provided from the outset this can hinder the
family’s capacity to adapt.
5.3.1 GLOBAL MOBILITY IN THE AGE OF DIVERSITY
The Role Global Mobility Can Play in Delivering a Diverse Workforce
1. THE FAMILY MUST ESTABLISH A NEW “NORM”
The family identity relies on recreating a “home” dynamic almost as
soon as they arrive in the new country. While each family member
mourns what they have left behind in the previous country (frie nds, a
home, a routine, etc.), there is also an overall loss of family identity.
This lack of “past” can weigh heavily and affect family members in
different ways. Disagreements and cracks in a relationship can be
exaggerated, and children may feel sacrifi ced to the assignee’s career.
Re-building a new family dynamic must be a priority.
Global Mobility professionals must be on the lookout for the tell -tale
signs that the family is not completely happy, or that they are drifting
apart. A timely intervention through counselling or just a friendly
phone call can save a marriage as well as the assignment.
2. DIFFERENCES IN ROLES CAN CREATE FRUSTRATIONS
AND MISUNDERSTANDINGS
Each family member is focused on their own adaptation and may
overlook the efforts other members put in making things work, thus
making the first days and weeks even more difficult.
Global Mobility can deploy numerous expatriate success factors such
as putting the assignee in contact with other assignees and families in
the country, or by spea king to other family members, not just their
employee.
Why Mental Health Should Form Part of Your Duty of Care
Policy
Family members want to take ownership of the relocation and to be
involved, and it is sometimes down to the Global Mobility
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145 Expatriation and Repatriation 3. SOME FAMILY MEMBERS MAY FIND IT EASIER TO
ADAPT TO LIFE IN THE NEW COUNTRY
Moving abroad is a stressful ordeal. Some family members may adapt
more quickly as they have a specific role lined up e.g. a student at a
new school. Other family members must strive to find their own
meaningful position in the new set up, and this requires a lot of
energy.
5.3.2 EXPATRIATE SUCCESS FACTORS: THE ROLE OF
GLOBAL MOBILITY
The sending company has an important role to play in all this. Regardless
of how high the value of family ranks in the home or host culture, the
importance of family support amongst vital expatriate success factors
should never be underestimated.
And for the family to be able to adapt to their new environment, it is
important tha t the difficulties highlighted above are seriously addressed by
those who interact with the assignee and contribute to the success of their
assignment. Make sure that the local team also recognize their role in
helping the whole family adapt.
• GLOBAL MOBILI TY IN THE AGE OF DIVERSITY
The Role Global Mobility Can Play in Delivering a Diverse
Workforce
A relocation package should include enough orientation support to
give the family a clear idea of what to expect from their trip. In some
cases, a look -see visit can be a good idea as well.
There is much anecdotal evidence to suggest that a short break to a
new country for a long weekend goes a long way in reducing the
impact of culture shock.
The family must be able to make an informed decision with realistic
expectations. A look -see that is a promotional campaign to “sell” the
post to the family may, in fact, do more damage than a realistic
portrayal of the pros and cons.
However, the crucial moment Global Mobility professionals must be
ready for is when the fami ly physically relocates and the adaptation
process begins.
5.3.3 5 TIPS TO EASE THE RELOCATION PROCESS
Some good practices to create a warm and welcoming atmosphere for the
assignee and their family could include:
1. FOCUS ON THE ARRIVAL OF THE WHOLE FAM ILY AND
NOT JUST THE ASSIGNEE
This might mean regularly enquiring about the family’s well -being
and whether there is anything that can be done to make the transition
smoother. For example, it is often the assignee’s partner who has more
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146 2. HAVE A SPECIFICALLY APPOINTED PERSON WHO THE
FAMILY CAN TURN TO
Someone who they can call upon to help them understand how to pay
a bill, when to drive on specific roads, and possibly most importantly,
someone who can help decode the cultural behaviours that can be so
disconcerting at the start of an assignment.
Often a family member of an assignee already based in the country
will be very happy to take on that role.
3. ORGANIZE EVENTS THAT INVOLVE THE WHOLE
FAMILY
Encourage the family to spend more quality time together.
Particularly where the time differences are big, work commitments
are more likely to overlap into family time. Encourage the family to
travel within the region, take up new past times or hobbies.
4. OFFER SUPPORT BUT DON’T OVERSTEP THE MARK
Check in regularly with the assignee and their family without pushing
them too much.
Offer your assistance and make the family feel they are not alone,
without imposing practices that might not be appreciated.
Frequ ently Global Mobility just needs to be the empathetic listener on
the end of a phone – you may not be able to or even need to fix
anything, but just be available.
5. ENCOURAGE THE ASSIGNEE TO TAKE SOME TIME OFF
AT THE START OF THE ASSIGNMENT
One of the man y expatriate success factors that many firms believe in
is to minimize work assignee and family overload and associated
stress
Relocation is a stressful process and family support is key amongst
expatriate success factors. The company’s duty of care is to support
everyone involved in the move. Not only will the family settle in more
quickly and be happier, but the assignee’s professional performance
will be safeguarded, and the risk of assignment failure significantly
reduced.
Saving money on reducing famil y support is a false economy. The
risk of early return or reduced performance surely outweighs the
benefits of a relaxed, high performing assignee and a happy, balanced
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147 Expatriation and Repatriation 5.4 DEALING WITH CUL TURAL SHOCK
• Culture shock is a feeling of disorientation, a nnoyance, and/or
hostility experienced when you visit a country with norms and
traditions different from your own.
• Culture shock has different stages but usually results in an
understanding of your new host country's norms and traditions.
• Everyone experien ces culture shock differently -- your past
experiences often colour how you see your new country.
• Try to manage expectations before going abroad. Do research
beforehand and engage with the local community once you're there.
This will help you integrate.
5.4.1 WHAT IS CULTURE SHOCK?
When you go abroad, your daily routine, culture, food, and the attitudes of
people around you are no longer familiar. The process of recognizing,
understanding, and adapting to these changes is called culture shock.
In our normal environment much of our behaviour, like gestures, tone of
voice, how we wait in lines (or don't wait), and interact, rely on collectively
understood cultural cues. However, we don't actively pay attention to these
-- they're our unspoken norm. In a new country, we become more aware of
these cultural subtleties because they are different from our norm .
Even drastically different culinary traditions can cause culture shock. Food
is deeply ingrained in culture and we have many associations, both good
and bad, with the things we eat. Being away from home and realizing
common ingredients or comfort foods you often reach for aren't available
can bring up strong emotions.
You may not literally be shocked, but this act of feeling disoriented and
processing ne w ways of life, attitudes, and cultural norms is by
definition culture shock . There are four stages of culture shock:
• Initial euphoria / The honeymoon stage - After first arriving to a
new place, you'll likely be caught up in all the wonderful things your
new chosen home has to offer. During this stage, you are more likely
to recognize cultural similarities and be charmed by the differences.
• Irritation and hostility / The negotiation stage - Gradually, the
euphoria will diminish. You'll get lost. You'll get mad at the apparent
"disorganization" of things. You'll become overwhelmed with all the
things you have to adjust to and either feel irritated or compelled to
make things go "your way".
• Gradual understanding / The adjustment stage - You're finally
able to relax. You’ve come to terms with your new home and have
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148 understanding of differences. You'll start to have a more positive
outlook, interest in learning more about your host country, and make
more effort to fit in.
• Adaptation or biculturalism / The mastery stage - Reaching a high
level of comfort in your new home is the final stage of culture shock.
The order of things makes sense, you can talk to strangers with ease,
and you understand c ultural nuances. Your routine is more natural.
Sure, you still miss your friends and family, but your new friends and
activities have become part of your daily life.
5.4.2 TIPS FOR DEALING WITH CULTURE SHOCK
Now that you understand what culture shock is an d how to recognize it, let’s
get down to real strategies and tips for dealing with culture shock .
1. Learn as much about your host country as possible
Read through travel forums, guidebooks, news reports, or novels.
Talk to people who have been there or -- better yet -- are from there.
Get to know as much as you can about what's considered polite or
rude (for example, did you know it's rude to step over someone's bag
in Madagascar?) and prepare yourself for some of the differences
before you go.
2. Ask your program's organizer for advice
Whether you're studying , volunteering , or working abroad , you'll
likely have a point of contact. Don't hesitate to ask them what others
have had a hard time adapting to and what they've done to cope. Each
country has its own nuances, so you're going to face a different
situation in France as you would in Thailand. Ask those who know
best!
3. Set learning goals for your trip abroad
This may be obvious, but make sure you have goals for your trip
abroad, and make sure they inclu de learning about your host
culture . Do you love food? Make it a goal to learn how to cook a local
dish.
4. Write down what you love when you first arrive, and look back
later
During the honeymoon phase, write down all the things you love
about your new ho st country. Later, when you're feeling frustrated or
irritated, use this list to remind yourself of all the good things about
your host country, instead of the things that annoy you .
5. Find a healthy distraction
Especially in stage two, when you may have negative feelings towards
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149 Expatriation and Repatriation yourself, watch an episode of your favourite TV show, cook a meal
from home, or have a solo dance party in your house.
Going overseas is a challenge, an introduction to a new culture, and
an emotional roller coaster all at once at times.
It's OK to feel overwhelmed and need a break from your host country
-- just make sure it's a healthy distraction and you don't spend your
whole time locked up in your house!
6. Talk to others about how you feel
If you aren't abroad with a group, like a study abroad, connect with
other expats around you. Talk to them about how they feel about your
host culture. Ask them about how they feel, str ategies they've used to
cope with cultural differences.
Also, learn from them. They may have figured out something you're
still confused about -- like why everyone keeps saying a particular
phrase or how to politely say "no" when your host mom insists you
finish everything on your plate.
7. Try to let go of expectations
A common mistake to make in your host country is to assume the
same norms from home apply. This is the easiest way to feel annoyed,
disappointed, and bitter. Try to enter the new situation a s a blank slate.
This will help you minimize expectations that will inevitably creep in.
When it comes to food, you may realize that the food in a particular
country isn’t what you expected, it can incur some culture shock.
Your favourite dish at the Chine se takeaway may not even exist in
China; likewise, for your curry of choice that is nowhere to be found
in India. Just don’t let this stop you from finding a new favourite! This
is where things get interesting anyway, and you have the opportunity
to test o ut the real, local cuisine.
8. Try to see things through your host culture's eyes
Throughout every stage of culture shock, try to put your own
worldview in your pocket and try to understand the world the way
your host culture does.
Maybe you don't agree wi th some philosophies, and maybe it doesn't
make sense within your own cultural context, and it doesn't have to.
Just try to understand where they're coming from . Ask questions,
be non -judgemental, be an anthropologist!
9. Get involved with the local commun ity
Part of your feelings of culture shock may be because you feel like
too much of an outsider, so get involved in your local community as
much as possible. This includes making friends! If you went to church
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150 volunteer project in your host city. Join a sports team, go to major
festivals, and make this new home a home!
10. Make an effort to learn the local language
Make an effort to learn a few basic phrases (or more!) in the local
language. It 's not just a way to understand more of the culture
(language and culture are linked), but also to make friends. And hey -
- it's just fun!
5.4.3 HOW WILL CULTURE SHOCK AFFECT ME?
Culture shock affects everyone differently and can manifest itself in a
varie ty of ways. Largely, this depends on:
• The countries you’ve previously travelled to ... if any. Have you
experienced new cultures before?
• The country you’re now traveling in . How different is it from your
own culture?
• The purpose and structure of your curre nt trip . Do you have
someone to help you understand the new culture? Are you willing to
learn and adapt?
• How well you adjust to new situations . How do you generally react
to being outside your comfort zone?
For example, when I first travelled to Tanzania, I had the hardest time
adjusting to shopping in chaotic markets and bargaining for goods. I'm used
to being left alone to browse when shopping at home, but most shop owners
there are anxious to make a sale. They follow shoppers around and
continuously pres ent them with suggestions of things to buy. Then, instead
of paying a set price, shopper and shopkeeper begin the lengthy process of
bargaining for an agreed -upon price. I had limited patience with this system,
and would often end up feeling irritated.
The process of recognizing, understanding, and adapting to these changes
is called culture shock.
In contrast, when I later visited other countries, like India, with similar
markets and culture of bargaining, I felt more confident and able to navigate
shoppin g in markets. I still didn't love it, but my past experiences helped me
adapt to these new cultures since I'd travelled in similar places before.
5.5 SUCCESSFUL REPAT RIATION PRACTICES
Designing a repatriation program that aligns to wider business and tale nt
management objectives can improve a company’s overall return on mobility
investment. Despite repatriation’s place at the end of the assignment
lifecycle, a significant portion of ensuring its success focuses on work
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151 Expatriation and Repatriation 5.5.1 BEGIN WITH THE END IN MIND
• Design a Repatriation Policy
A repatriation policy should detail the types of support provided and
align with the benefits offered in the existing international assignment
policies. Additionally, it is important to ensure it outlines high level
processes and roles and responsibilities for all stakeholders involved.
Well -documented guidelines embedded in the existing assignment
policies allows global mobility leaders to engage with potential
assignees abo ut the level of support they can expect to receive as their
assignment draws to a close.
• Set Assignments Up for Success
A successful repatriation starts with a successful assignment. Careful
selection of potential candidates, along with an assessment of th e
assignee and any accompanying family members’ adaptability will
ensure the best chance for success. In order for a company and its
employees to gain the most value, integrating assignments and
repatriation planning into employees’ overall career planning is also
key. To track progress and clearly measure success along the way, it
is advisable to set clear assignment objectives.
Establishing a home country and a host country mentor for each
employee is also a good practice. With host country mentors,
emplo yees will have a formal partner to help them adapt to the new
location and navigate local cultural and organizational nuances. Home
country mentors can help employees maintain a connection to the
home country. This will keep assignees abreast of important
organizational changes, pave the way for post assignment networking
and help smooth reintegration.
Policy benefits should also be adequate to ensure a smooth move to
the new location. Including important benefits such as intercultural
training, language tr aining, education assistance and spouse/partner
transition assistance will help assignees and their families do well in
the new location.
5.5.2 DON’T WAIT TILL THE END
• On Assignment
Setting up opportunities for assignees to network during home
country visi ts is another integral part of preparing for successful
repatriations. Preserving relationships with colleagues, former
managers and senior leadership allows assignees to stay visible and
top of mind for hiring managers and job opportunities as their
assig nments come to an end.
Companies can also consider providing formal job identification
assistance at the end of assignments. While often companies rely on
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152 Mobility Trends Survey found that 26% provide more formal
assistance by mandating each department be responsible for locating
new positions for the employees they send on assignment. The survey
also found a correlation between pr oviding this formal assistance and
lower attrition outcomes.
Proactively tracking assignment end dates and starting repatriation
discussions early is another key best practice. Starting repatriation
discussions more than six months out offers an important advantage
for companies and their employees. As assignments enter into their
final year employees may start to be anxious about finding a new
position post -assignment and will start looking early. Beginning
career planning and general repatriation discussi ons early may help
prevent employees from searching outside the company for
employment prospects.
5.5.3 AT THE TIME OF REPATRIATION
• Offer Support
Adequate support during repatriation is an important step in the
overall assignment lifecycle. Companies should consider offering
repatriation support beyond miscellaneous allowances and moving
household goods back to the home country. Offering services such as
outplacement assistance to help spouse/partners locate work and
educational consultancy for familie s changing school systems will
help families make the transition home smoother. Furthermore, home
finding support and temporary accommodations will assure the
logistical aspects of the move home are easier.
Reintegration training is also an element of effe ctive repatriation
programs. This training can mitigate the challenges of repatriation by
proactively planning a successful reintegration both personally and
professionally, as the assignee and their family transition home. They
will learn how to leverage their newly acquired skills, international
experience, networks and insights.
• Create Integration Opportunities
Companies should also consider creating specific opportunities for
assignees to integrate the skills and experiences garnered on assignment
with their colleagues. Some examples of programs that will achieve these
goals include:
• Leading informational sessions for colleagues
• Joining global cross functional initiatives that will leverage their
global leadership experience
• Speaking to high potential e mployees about the advantages of gaining
global leadership skills and leveraging developmental assignments
• Engaging returning assignees to participate in a formal mentor
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153 Expatriation and Repatriation Returning assignees are an important source of feedback f or the global
mobility function. Once back from assignment, they can provide
perspective on global mobility policies, benefits and support. They can also
provide information on supplier performance, as well as input on the
processes throughout the assignme nt lifecycle. Formally incorporating both
quantitative and qualitative feedback allows global mobility leaders to track
trends and identify issues for continuous program improvement. It can also
offer important insight into the perceived value of internati onal assignments
from an employee’s point of view.
Having a strong repatriation program helps protect a company’s mobility
investment; however, building a strong program requires a strategy that
begins not at the end of assignment, but at the beginning. Ta king the time
to assess and implement a repatriation program that encompasses planning
even before employees go on assignment will create a better experience for
the employees and add value to the business overall. The company not only
retains their mobili ty investment but also benefits from growing the global
talent pipeline, and the mobility program continues to benefit and grow
from the feedback. In short, an effectively designed repatriation program
ultimately supports the company’s wider talent and mob ility objectives.
5.6 SELF – ASSESSMEN T QUESTIONS
FILL IN THE BLANK
1) _________________ are key talent segments in today’s global mobile
workforce.
2) Expatriates returning to their home countries are called
_________________ .
3) _________________ is somebody who has left their country of origin
in order to reside in another country.
4) Being _________________ means that you can discern how others
are feeling and use that information to guide your own behaviour.
5) _________________ is a feeling of dis orientation, annoyance, and/or
hostility experienced when you visit a country with norms and
traditions different from your own.
6) The process of recognizing, understanding, and adapting to these
changes is called _________________
7) During _________________ you are more likely to recognize cultural
similarities and be charmed by the differences.
ANSWER
1) Expatriates And Repatriates
2) Repatriates.
3) An Expatriate
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154 Global HRM
154 5) Culture Shock
6) Culture Shock.
7) Initial Euphoria / The Honeymoon Stage
TRUE OR FALSE
1) Expatriates returning to their home countries are called Expatriates.
2) The importance of the professional talent management of expatriates
and repatriates cannot be over -emphasised.
3) An expatriate is somebody who has left their country of origin in
order to reside in another country.
4) Being able to communicate in the language of your new home is
important, even if you’re not communicating in your native tongue.
5) Make sure that the local team also recognize their role in helping the
whole family adapt.
6) It is often the assignee’s partner who has more of a need for language
training than the assignee. True
7) Often a family member of an assignee already based in the country
will be sad to take on that role.
8) The process of recognizing, understanding, and adapting to these
changes is called Culture Shock.
ANSWER
TRUE. (2, 3, 6, 8)
FALSE. (1, 4, 5, 7)
MATCH THE COLUMN a) Initial euphoria 1. The negotiation stage b) Irritation and hostility 2. The mastery stage c) Gradual understanding 3. The honeymoon stage d) Adaptation or biculturalism 4. The adjustment stage ANSWER
a) 3
b) 1
c) 4
d) 2
WRITE SHORT ANSWERS
1) Explain expatriate success factors: the role of global mobility
2) Explore the role of family. munotes.in

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155 Expatriation and Repatriation 3) Tips to ease the relocation process.
4) What is cultural shock? How to deal with cultural shock
5) Explain stages of cultural shock.
6) Explain successful repatriation practices.
5.7 SUMMARY
Expatriates and repatriates are key talent segments in today’s global mobile
workforce. Create a dedicated expatriate and repatriate management
programme as part of your global talent management strategy, with a
particular focus on employee wellness. Expatriates retu rning to their home
countries are called repatriates.
Create a dedicated expatriate and repatriate management programme as part
of your global talent management strategy, with a particular focus on
employee wellness. Ensure good communication with their h ome country
so that they never feel isolated or neglected, keep them informed of all
developments affecting them at the home and host countries.
An expatriate is somebody who has left their country of origin in order to
reside in another country. Living an d working in another country comes
with a unique set of challenges. You’ll need more than technical skills to
cut it as an expat. The following characteristics such as Global Curiosity,
Emotional Intelligence, Extreme Organization, Patience
When looking at expatriate success factors we cannot underestimate the
importance of family support and involvement in the assignment project.
When a family relocates, there is a typical set of issues they must deal with.
If adequate support is not provided from the outs et this can hinder the
family’s capacity to adapt. The Role Global Mobility Can Play in
Delivering a Diverse Workforce such as the family must establish a new
“norm”, differences in roles can create frustrations and misunderstandings,
some family members m ay find it easier to adapt to life in the new country.
The sending company has an important role to play in all this. Regardless
of how high the value of family ranks in the home or host culture, the
importance of family support amongst vital expatriate su ccess factors
should never be underestimated. The Role Global Mobility Can Play in
Delivering a Diverse Workforce. Few tips to ease the relocation process
focus on the arrival of the whole family and not just the assignee, have a
specifically appointed per son who the family can turn to, organize events
that involve the whole family, offer support but don’t overstep the mark,
encourage the assignee to take some time off at the start of the assignment.
Culture shock is a feeling of disorientation, annoyance, and/or hostility
experienced when you visit a country with norms and traditions different
from your own. When you go abroad, your daily routine, culture, food, and
the attitudes of people around you are no longer familiar. There are four
stages of culture shock such as Initial euphoria / The honeymoon stage , munotes.in

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156 Global HRM
156 Irritation and hostility / The negotiation stage , Gradual understanding
/ The adjustment stage .
Tips for dealing with culture shock Learn as much about your host country
as possible, Ask your program's organizer for advice, Set learning goals for
your trip abroad, Write down what you love when you first arrive, and look
back later, Find a healthy distraction, Talk to others about how you feel, Try
to let go of expectations, Try to see things through your host culture's eyes,
Get involved with the local community, Make an effort to learn the local
language.
Designing a repatriation program that aligns to wider business and talent
management objectives can improve a company’s overall return on mobility
investment. A repatriation policy should detail the types of support provided
and align with the benefits offered in the existing international assignment
policies. A successful repatriation starts with a successful assignment.
Setting up opportunities for ass ignees to network during home country visits
is another integral part of preparing for successful repatriations. Adequate
support during repatriation is an important step in the overall assignment
lifecycle. Companies should also consider creating specific opportunities
for assignees to integrate the skills and experiences garnered on assignment
with their colleagues.
5.8 KEY - WORDS
• Expatriates somebody who has left their country of origin in order to
reside in another country.
• Repatriates a person who has returned to the country of origin or
whose citizenship has been restored .
• Emotional Intelligence you can discern how others are feeling and
use that information to guide your own behaviour.
• Global Curiosity Being interested in and excited about new cultures
is essential.
• Talent Management how employers recruit and develop a workforce
that is as productive as possible and likely to stay with their
organization long term .
• Culture shock a normal process of adap ting to a new culture .
• Initial euphoria a feeling of great happiness and excitement .
• Irritation and hostility You start to feel that what is different is
actually inferior .
• Gradual understanding You’ve come to terms with your new home
and have achieved a balance of emotions.
• Adaptation or biculturalism Reaching a high level of comfort in
your new home is the final stage of culture shock.
• Offer Support Adequate support during repatriation is an important
step in the overall assignment lifecycle. munotes.in

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157 Expatriation and Repatriation • On Assign ment Setting up opportunities for assignees to network
during home country visits is another integral part of preparing for
successful repatriations.
• Create Integration Opportunities Companies should also assignees
to integrate the skills and experiences g arnered on assignment with
their colleagues.
REFERENCE:
https://talenttalks.net/expatriates -repatriates/
https://www.westernunion.com/blog/en/best -skills -to-become -expat/
https://www.learnlight.com/en/articles/expatriate -success -factors -
family -support/
https://www.gooverseas.com/blog/how -to-deal-with -culture -shock -
while -studying -abroad
https://www.bgrs.com/insights -articles/practices -for-a-successful -
repatriation -program/
7777777
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158 6
LEGISLATION AND THE
INTERNATIONAL WORKFORCE
Unit Structure
6.0 Objectives
6.1 Introduction
6.2 Legislation and the international workforce
6.2.1 International Labor Standards
6.2.2 Regional Labor Standards
6.2.3 Principles of Labor Law In All Countri es
6.2.4 Everything You Need To Know About An International
Workforce
(A) Advantages Of International Workforce
(B) Complications In Global Workforce
(C) Global Workforce Management
6.3 Employment Law
6.3.1 Terms and Conditions of Employment
6.3.2 Employee Representation and Industrial Relations
6.3.3 Discrimination
6.3.4 Maternity and Family Leave Rights
6.3.5 Termination of Employment
6.4 Trade Unions and negotiations
6.4.1 What a trade union is
6.4.2 Joining a trade union
6.4.3 Trade unio n-related rights
6.5 Self-Assessment Questions
6.6 Summary
6.7 Key-Words
6.0 OBJECTIVES
To Learn:
• International Labor Standards
• Regional Labor Standards
• Principles of Labor Law In All Countries munotes.in

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159 Legislation and The International Workforce • Everything You Need To Know About An International Workforce
• Terms and Conditions of Employment
• Employee Representation and Industrial Relations
• Discrimination
• Maternity and Family Leave Rights
• Termination of Employment
• What a trade union is
• Joining a trade union
• Trade union -related rights
6.1 INTRODUCTION
Internatio nal labour law is the body of rules spanning public and private
international law which concern the rights and duties of employees,
employers, trade unions and governments in regulating work (human
activity) and the workplace . The International Labour Orga nization and
the World Trade Organization have been the main international bodies
involved in reforming labour markets. The International Monetary Fund
and the World Bank have indirectly driven changes in labour policy by
demanding structural adjustment conditions for receiving loans or grants.
Issues regarding Conflict of laws arise, determined by national courts, when
people work in more than one country, and supra -national bodies,
particularly in the law of the European Union , has a growing body of rules
regarding labour rights.
International labour standards refer to conventions agreed upon by
international actors, resulting from a series of value judgments, set forth to
protect basic worker rights, enhance workers’ job security, and improve
their terms of employment on a global scale. The intent of such standards,
then, is to establish a worldwide minimum level of protection from
inhumane labour practices through the adoption and implementation of said
measures. From a theoretical standpoint, it has been maintained, on ethical
grounds, that there are certain basic human rights that are universal to
humankind. Thus, it is the aim of international labour standards to ensure
the provision of such rights in the workplace , such as against workplace
aggression , bullying , discrimination and gender inequality on the other
hands for working diversity , workplace democracy and empowerment .
While the existence of international labour standards does not necessarily
imply implementation or enforcement mechanisms, most r eal world cases
have utilised formal treaties and agreements stemming from international
institutions. The primary international agency charged with developing
working standards is the International Labour Organization (ILO).
Established in 1919, the ILO a dvocates international standards as essential
for the eradication of labour conditions involving "injustice, hardship and
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160 to the possibility of lasting peace , help to mitigate pote ntially adverse
effects of international market competition and help the progress
of international development .
Implementation, however, is not limited to the ILO nor is it constrained to
the legislative model that the ILO represents. Other alternatives in clude
direct trade sanctions, multilateral enforcement, and voluntary standards. In
addition to controversies that arise over each of these models, greater issues
have also been raised concerning the debate over the need for international
labour standards themselves. However, while critics have arisen,
the international community has largely come to a consensus in favour of
basic protection of the world’s labour force from inhumane practices.
Associated with the development of successful international labou r
standards is proper monitoring and enforcement of labour standards. Most
monitoring occurs through the ILO, but domestic agencies and other NGOs
also play a role in the successful monitoring of international labour
standards.
6.2 LEGISLATION AND THE INT ERNATIONAL
WORKFORCE
Increasing competition, desire to enter new markets, and diversifying the
customer base drives companies to go global. To find your footing, think
global. International expansion isn't happening without employing a
International workf orce.
6.2.1 INTERNATIONAL LABOR STANDARDS
The International Labour Organization (ILO) is a United Nations Agency
that sets universal labor standards. These standards are contained in 189
conventions or treaties which individual countries need to ‘ratify’ or sign
up to. Once a country has signed up to those standards, it must adopt and
enforce them as part of its domestic law. The most fundamental labor
standards are contained in the ‘Declaration on Fundamental Principles and
Rights at Work’. This declarati on sets out four fundamental policies for
labor:
• A right of workers to free association and collective bargaining;
• A prohibition on forced or compulsory labor;
• A prohibition on child labor;
• A prohibition on unfair discrimination among workers.
Even where c ountries have signed up to international labor standards, there
are huge variations in compliance and enforcement between countries. Any
international enterprise needs to consider carefully the significant
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161 Legislation and The International Workforce 6.2.2 REGIONAL LABOR STANDARDS
Another form of international labor law is the set of rules that applies across
a select group of countries. The most prominent example is European labor
law whi ch sets standards applying across the European Union. Rights for
employees under European labor law include:
• The right to a written employment contract (whether a fixed -term
contract or an indefinite one);
• The right of employees to free movement across Eur opean Union
states;
• A right to a minimum of 4 weeks annual leave;
• Health and safety minimum standards (e.g., rules on how to return to
work safely );
• Prohibited discrimination;
• Restrictions on redundancies.
The European Union does not make rules related to minimum wages or
collective bargaining: These are determined solely by individual European
Union countries.
The North American Agreement on Labor Cooperation (NAALC) is a ‘side
agreement’ to the North American Free Trade Agreement (NAFTA). Under
NAALC, all countries (Canada, United States and Mexico) agreed to
enforce certain minimum labor standards covering:
• Freedom of association, and the right to organize;
• The right to collective bargaining;
• The right to strike;
• No child labor;
• A set of minimum labor sta ndards relating to matters such as wages,
hours and conditions of employment;
• Equal pay for equal work;
• Health and safety protections;
• Workers’ compensation;
• Protections for migrant workers.
Compliance with these requirements is monitored by an administrat ion
office in the labor department of each country.
6.2.3 PRINCIPLES OF LABOR LAW IN ALL COUNTRIES
In addition to laws which have international ‘reach’ such, as ILO standards
and EU laws, there are various general principles that need to be considered
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162 Global HRM
162 • Employee Contracts . Many countries require that a written
employment contract be in place setting out the obligations that
employers and employees have towards each other;
• Minimum wage . Many (not all) countries have a mini mum wage in
place. In an international expansion, enterprises should be particularly
careful not to attempt to circumvent minimum wage protections with
independent contracting arrangements;
• Employee termination . The grounds for ‘firing’ or terminating
empl oyees differ radically in different countries, and even between
different states within the one country. While some countries (such as
the United States) may permit employers to terminate ‘at will’, many
do not: Certain reasons must be present and the term ination must flow
from a fair process;
• Payroll obligations . In nearly every country, it is the employer that
is under the obligation to withhold employee payroll tax and submit
it to the tax authorities: Employer submission of payroll taxes is
usually take n to define a relationship as one of employment, rather
than contracting;
• Employee benefits . Benefits administration is a key obligation of
employers. In many locations, employers have to withhold
compulsory contributions to healthcare costs, workers’ comp ensation,
pensions and unemployment insurance.
6.2.4 EVERYTHING YOU NEED TO KNOW ABOUT A GLOBAL
WORKFORCE
International workforce refers to the total number of an international pool
of workers working for a particular company, connected through a global
system of network and production. These are people willing to be engaged
in or available for work internationally.
(A) ADVANTAGES OF INTERNATIONAL WORKFORCE
A global workforce engages your business in multi -dimensional
aspects and thus, serves as the baselin e to establish a well -connected,
powerful universal front.
• Access to global talent
As an employer, you always look for the best talents that fit right
with your company. Going global, you have more options to
choose the best people from. The wider your se arch is, the more
probability of you finding the ideal employees who align with
your goals.
According to a report from Josh Bersin, organizations hiring
internationally are 1.7 times more likely to transform into
innovative leaders. It gives you an edge o ver the others in
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163 Legislation and The International Workforce • Cost -effective hiring
The labor cost and pay structure of developing countries are
lesser than the developed countries. You can harness the same
levels of an able and competent wor kforce at a relatively lower
budget.
Besides, establishing new businesses in developing countries
improves their economy and money influx that favours their
progress.
• Cultural diversity
McKinsey’s report on delivering through diversity identifies
that et hnically diverse companies are 29% more profitable than
companies that do not go beyond borders. This reaffirms the
link between diversity and financial outperformance, a link that
you do not want to miss.
Including a diverse global workforce also brings onboard better
employee engagement. Deloitte’s report suggests that
engagement is the outcome of diversity and inclusion. The
employee engagement levels are reportedly 101% high.
Thus, establishing a global workforce diversity encompasses
several benefits on the productive and financial fronts.
• A power team with different perspectives
People from different backgrounds and regions have had
different experiences and have faced distinct challenges. Thus,
establishing a global workforce demographics equips yo u to
encounter a diverse array of challenges.
Further, when such unique minds work together, they bring
about a great potential to innovate. They include different
perspectives and innovations that grow your business to greater
heights.
• Expanding to new ma rkets
When thinking of global expansions, you need to consider the
nature and potential of the market in that specific country or
region. Who better to guide you than a local who has resided
and most likely worked from there?
A locality who understands the cultural intricacies and nuances
can effectively communicate your business and its utility. They
can also overcome language and cultural barriers and empathize
with your local customer base.
A global workforce thus gives an in -depth understanding of new
markets and helps you curate region -specific business
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164 (B) COMPLICATIONS IN GLOBAL WORKFORCE
Even elixirs come with terms and conditions. Similarly, establishing
and managing an international workforce overseas comes with its own
complications.
1. Employee -centric Complications
Here, we highlight the complications faced by the employees
employed in a global workforce.
• Difficulty in collaboration
Going international with your hiring includes your
employees working at different time zones. These
differences might lead to disruptions in the coordination
and within the teams.
Also, liberties such as official holidays and vacation time
vary from region to region. They would affect the
availability of team members during meetings and
decision -making.
Thus, managing time differences is one of the crucial
factors you must address while planning for a global
workforce.
• Communication differences
With only virtual communication at play, there are huge
chances of miscommunications and communication gaps
popping up between employees.
This Cultural wizard’s report states that 51% of
employees have a hard time understanding the full context
of what their colleagues try to communicate. Lack of face -
to-face conversations makes it harder to convey
messages.
A lot hangs on assumptions. Thus, communication
breakdowns may lead to a chaotic environment with
employees not knowing their responsibilities and tasks.
Setting up proper communication channels and mediums
must become your priority.
• Social disconnect and lack of team engagement
A global workforce calls for the remote working of most
of your employees. While remote working enables
working from the comfort of our homes, at our own pace,
it also means that employees stay isolated from their team
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165 Legislation and The International Workforce The feeling of isolation is bound to turn into
disconnection and alienation. Subsequently, managers
might feel such employees are less likely to be focused on
their work and remain loyal to the company.
• Lack of motivation and productivity
Due to the l ack of an orchestrated office environment,
remote working also risks poor time management. This
results in burnout and stress leading to a lack of
motivation.
Social disconnection is also a major reason for lack of
motivation. Further, it takes a toll on t heir mental health.
This takes a toll on their mental health.
Forbes study states that 80% of workers are willing to quit
due to employers’ poor care of mental health issues. Thus,
you must ensure you address mental health issue
concerns, motivate and enga ge your teams to establish a
fully functional global workforce.
2. Employer -centric Complications
Here, we address the complexities faced by employers in
managing an international workforce.
• Setting up local entities
As a global employer, to hire from different countries, you
will have to set up local entities and have a functioning
team take care of the hiring processes.
It is easier said than done. This involves unnecessary
expenses, loss of time and energy. Thus, you should look
for ways to follow hiring and other operations without
having to lose much.
• Managing law and compliance
The labor laws and regulations followed in each country
are unique. Also, with time, they get updated and revised
to stay at par with the growing technology and practi ces.
Thus, you have to ensure you stay compliant with all these
laws and adhere to them without fail. You might not want
to mess up or go against those laws.
It isn't just frowned upon. It comes with pricey penalties.
• Managing payroll
Similar to th e compliance of labor laws, the payroll
system, practices, and tax norms differ from country to
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166 They also differ for different types of employment. For
example, you will have to abide by the tax norms of your
full-time employees while your conti ngent workforce
takes care of their own taxes. Such things have to be
considered while establishing a successful global
company with a global workforce.
• Managing rights and benefits
The global workforce includes employees from different
countries servin g different job roles and positions in your
company. Employee rights such as fair compensation,
hikes, and other benefits such as health insurance policies
are drafted based on these.
However, maintaining and updating records on all
employees on a global scale is cumbersome. It is complex
as these are the crucial aspects to an employee.
Thus, global workforce management, if not done right,
might become chaotic.
(C) GLOBAL WORKFORCE MANAGEMENT
Despite these complexities, transcending companies do requi re a fully
functional international workforce. When handled well, your global
workforce facilitates a successful global reach.
• Address time -zone differences and barriers
Addressing the time -zone differences is crucial for effective
collaboration and com munication. Respect their time -zone
boundaries and encourage other employees to follow the same.
You can provide tips and guidelines to overcome these barriers.
Regulate check -ins, check -outs, and other time trackers to
instantly let everyone the availabi lity of others for
collaboration.
• Foster a culture of communication
As a global employer, it is your responsibility to foster good
communication across your teams, beyond borders.
Remove the ambiguity that so often persists in virtual teams by
traini ng your international employees. Provide guidelines as to
what mediums they can use and how their interactions can be
optimized.
Disseminate clear goals to the teams and regularly update them
with all necessary details. Keep them in the loop.
Foster bet ter tools for clear -cut communication. Tools such as
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167 Legislation and The International Workforce since the onset of the pandemic. They are predominantly used
for their clean and user -friendly UI.
• Employee engagement
As mentioned, the feeling of a disconnected dysfunctional team
is a common issue among remote employees.
To avoid alienation, you can engage the remote workforce and
teams to connect and strengthen their bonds.
• Regular team meetings and discussion
• Informal coffee chats beyond work discussions
• Fun virtual team building activities
These are some of the ways you can direct your managers to
engage their teams.
• Ensure mental health and low stress
Employee burnouts and stress though common must be
addressed to improve employee satisfaction and productivity.
Set up support structures and in -house counselling teams to help
them cope up with the seclusion and burnouts. You can also
provide tips and guidelines to plan their working hours to
distribute work evenly and decrease stre ss levels.
• Address motivational and productivity issues
The challenges of keeping the remote workforce motivated have
been bridged by innovative communication tools, employee
portals, education sites, and other infotainment applications.
To cope up wit h productivity loss, ensure accountability. Set
realistic expectations and goals. Communicate them clearly to
your global employees. Deploy progress trackers, timesheets to
keep track of their progress.
There's only a fine line between effective manageme nt and
micromanagement. You might not want to step across. Have
occasional one -on-one meetings to discuss their progress and
provide support with any issues they face.
Outsource some responsibilities
The former costs you more money and time, while the lat ter is both time
and cost -effective.
• Take help from EORs
Employer on Record (EOR) organizations assist you in global hiring
without you having to set up local entities. Instead, they have the
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168 • Partner with PEOs
Professional Employer Organizations (PEOs), often addressed as co -
employers, help you stay compliant with prevailing labor laws and
regulations across countries.
They monitor and revise your company policies regularly to ensure
they adhere to the region -specific laws and regulations. Thus, you can
steer clear of penalties to ensure a smooth business setup.
• Payroll regulation
We discussed how managing international payroll can be
cumbersome, especially with different kinds of glob al employees on -
board. You can simplify the process by outsourcing your payroll
process to HR service providers.
By automation, they de -clutter your global payroll processes. They
provide professional help in providing distinct wage policies for
different employees.
• Automate global benefits and compensation
Similar to payroll regulation, the global benefits and
compensation you provide for employees of different cadre can also
be outsourced and automated. The service providers aid in providing
well-deserved compensation and fitting benefits to your employees
on your behalf.
6.3 EMPLOYMENT LAW
6.3.1 TERMS AND CONDITIONS OF EMPLOYMENT
As per the Indian Constitution, the Central as well as State Governments
are empowered to enact suitable legislations to regulate and protect the
interests of employees, as well to create and increase employment
opportunities. Depending on the type of industry, nature of work
undertaken, number of employees, location, remuneration of the employees,
etc., different legis lations such as the Industrial Disputes Act 1947 (ID Act),
Factories Act 1948 (Factories Act), and shops and establishment acts of the
relevant states (S&E Act) have been enacted.
With the objective to consolidate and reform labour laws and to facilitate
the ease of doing business in India, the Government of India has enacted
four labour codes which subsume approximately 29 labour laws. The four
new labour codes are the Code on Wages 2019, the Code on Social Security
2020, the Occupational Safety, Health and Working Conditions Code 2020
and the Industrial Relations Code 2020. Whilst all the codes have been
passed by both houses of Parliament and received the assent of the
President, the codes are yet to be completely enforced by way of a specific
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169 Legislation and The International Workforce writing this chapter, the extant labour laws referred to and explained herein
shall continue to apply.
Worker: The term ‘worker’ is used in the context of the Factories Act to
mean a person employed directly or by or through any agency in any
manufacturing process or in any kind of work incidental to, or connected
with the manufacturing process, or subject of the manufacturing process.
Workmen: Industrial relations laws in India typically c ategorise employees
as ‘workmen’ and ‘non -workmen’ (or ‘managerial’ employees). A
‘workman’ is a person employed in an industry to do any manual, unskilled,
skilled, technical, operational, clerical or supervisory work, for hire or
reward. It excludes th ose employed in a managerial, administrative
capacity or supervisory capacity drawing wages exceeding INR 10,000
from its purview.
Special laws are also enacted for recognition and protection of certain kind
of employees such as contract labour and fixed -term employees.
In India, an employer -employee relationship can either be express or
implied, written or oral. However, to avoid any dispute regarding the terms
of employment, it is common practice to execute an employment
contract. Only a few Indian st ates such as Karnataka and Delhi require an
employer to issue a written employment contract to employees employed in
shops and commercial establishments.
Terms and conditions of service which are regulated and mandated by
statutes constitute implied terms of an employment contract. Therefore,
provisions relating to payment of wages, statutory bonus, gratuity payments
and mandatory social security contributions are considered to be implied
terms of employment.
S&E Acts prescribe certain employment terms a nd conditions such as
working hours, holidays, leave entitlements, procedure for termination of
employment, and so on. Further, employers shall also be required to adhere
to applicable social security legislations. For instance, as per the
Employees’ Pro vident Funds and Miscellaneous Provisions Act 1952, every
employer engaging 20 or more employees, shall be required to make
prescribed contributions to the employees’ provident fund in respect of all
its employees earning less than INR 15,000 per month.
Collective bargaining agreements are a predominant feature of the
manufacturing sector and is the product of a charter of demands and several
rounds of negotiations between an employer and members of a trade
union. Collective bargaining agreements can only establish better
employment conditions (such as remuneration (including bonus and yearly
increments), leave entitlement and so on) than those prescribed under
various labour law statutes. In India, collective bargaining may take place
at company, industr y, state and/or central level, depending on the number
of employees forming part of the trade union and the demands of such trade
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170 6.3.2 EMPLOYEE REPRESENTATION AND INDUSTRIAL
RELATIONS
Trade unions are governed by the Trade Unions Act 1926 (TU Ac t). The
TU Act sets out the mechanism for registration of trade unions but does not
make registration mandatory. Certain state -specific statutes such as the
Maharashtra Recognition of Trade Union and Prevention of Unfair Labour
Practices Act 1971 (Mahara shtra TU Act) provides that a union with a
membership of at least 30% of the total number of employees employed in
any undertaking may apply to an industrial court for recognition. Once the
trade union is recognised, refusal by an employer to bargain coll ectively in
good faith is regarded as an unfair labour practice.
The TU Act guarantees certain rights to trade unions which, inter
alia, includes the right to negotiate and secure terms of employment
acceptable to its members by adopting various forms of collective
bargaining and the right to hold demonstrations in furtherance of its
objectives. The TU Act also provides registered trade unions certain
immunity from prosecution for criminal conspiracy and from any suits or
legal proceedings in any civil co urt in respect of any act carried out in
furtherance of a trade disputes.
The ID Act prescribes the means for resolution of industrial disputes
between individual workmen, trade unions and employers. It, inter
alia, provides for non -discrimination of wor kmen based on their
membership with trade unions and prescribes for prior notice conditions in
relation to strikes that are typically organised by trade unions.
The ID Act provides for constitution of a works committee in an
establishment with 100 or more workmen, in the event that the relevant
government issues any specific or general directions to that effect,
comprising of equal representation of workmen’ and employers’
representatives, to settle workmen -related disputes and any other issues
related to conditions of service. The workmen representatives must be
chosen in the prescribed manner and in consultation with the trade unions
(if any ).
A works committee does not have co -determination rights and is not
intended to supplement the trade unions for the purpose of collective
bargaining. They are not authorised to consider real or substantial changes
in the conditions of service. Their task is only to smooth over any friction
that may arise between the workforce and management on a day -to-day
basis.
Since workmen representatives in a works committee are chosen in
consultation with the trade union, both are to work in tandem with a
common objective of procuring better employment for the workmen.
There is no statutory requirement to have a representat ive of workmen on
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171 Legislation and The International Workforce 6.3.3 DISCRIMINATION
The Indian Constitution prohibits discrimination of citizens on certain
grounds such as religion and sex. In furtherance of these objectives, several
legislations prohibit discrimina tion against protected classes of persons,
such as persons with disabilities, or a person who is transgender or is HIV
positive, in matters of employment. Similarly, special laws have been
framed to promote employment of specific classes of persons. For example,
the provision of paid maternity leave and other benefits under the Maternity
Benefit Act 1961 (Maternity Benefit Act) seek to create a conducive
working environment for female employees.
Discrimination in relation to remuneration on the grounds o f gender
(whether at the time of recruitment or during employment) is prohibited
under the Equal Remuneration Act 1976. Further, the Rights of Persons
with Disability Act 2016 (Disabilities Act) prohibits discrimination on the
grounds of disability and the Maternity Benefit Act prohibits discrimination
on the basis of maternity status. The Human Immunodeficiency Virus and
Acquired Immune Deficiency Syndrome (Prevention and Control) Act 2017
prohibits discrimination against persons with HIV and/or AIDS and also
prohibits the requirement for HIV testing as a pre -requisite for obtaining
employment. The Transgender Persons (Protection of Rights) Act 2019
prohibits discrimination against a transgender person resulting in an unfair
treatment in employment, or a denial of, or termination from,
employment. The Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act 2013 (PoSH Act) prohibits
sexual harassment against women at the workplace.
As per the PoSH Act, employers must formulate an anti -sexual harassment
policy for women and widely disseminate the same at its offices. An
Internal Committee should be constituted at each office engaging 10 or
more employees to redress complaints of sexual harassment by
women. Further, the employer is required to organise awareness
programmes for employees at regular intervals to sensitise them with the
provisions of the PoSH Act.
There are no statutory defences to a discrimination claim. However,
employers may defend a discrimination claim if it can be shown that the
impugned discrimination is a proportionate means of achieving a legitimate
aim.
Employees may approach the authorities appointed under the relevant anti -
discrimination statutes, such as the Internal Committee under the PoSH Act,
or liaison officer under the Disabilities Act. Further, employees who
qualify as workmen may also approach the authorities appointed under the
ID Act.
If an aggrieved employee successfully proves discrimination before the
competent authority, he/she may be r e-instated (if he/she was terminated or
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172 with adequate compensation/damages. The anti -discrimination statutes
prescribe certain additional reliefs to employees depending on the na ture of
discrimination (such as dismissal of person against whom a complaint of
sexual harassment is filed, if the claim is proved).
Atypical workers are also afforded the same protection by the anti -
discrimination statutes, as afforded to other permanent employees. There
are no additional protections prescribed for atypical workers.
While there are Indian laws to protect whistle -blowers in matters pertaining
to public sector establishments (including government companies and
departments), no special pro tection is afforded to whistle -blowers in matters
pertaining to the private sector.
6.3.4 MATERNITY AND FAMILY LEAVE RIGHTS
As per the Maternity Benefit Act, every woman who has completed 80 days
service with the employer is entitled to paid maternity le ave of 26 weeks of
which not more than eight weeks shall precede the expected date of
delivery. However, in case of a woman with two or more surviving
children, she will be entitled to 12 weeks of paid maternity
leave. Commissioning mothers or adoptive m others are also entitled to paid
maternity leave. Additional paid leave is prescribed for miscarriage,
medical termination of pregnancy and a tubectomy operation.
What rights, including rights to pay and benefits, does a woman have during
maternity leave ?
In addition to paid maternity leave, a woman is protected from dismissal or
discharge from employment on account of pregnancy or while on maternity
leave. Further, the terms and conditions of her service may not be varied to
her disadvantage during such period. A woman is also entitled to receive
from her employer a medical bonus if no pre -natal or post -natal care is
provided to the employer free of charge.
Upon return to work from maternity leave, a woman is entitled to additional
nursing breaks durin g the course of her daily work to attend to the needs of
her child. Further, employers with 50 or more employees are required to
provide creche facilities within a reasonable distance from the
establishment and allow mothers to visit the creche at least f our times a
day. An employer may permit a woman to work from home, if the nature
of work assigned to her is such that she may work from home.
While there is no statutory entitlement to paternity leave, an employer may
at its discretion provide paternity leave to male employees.
There are no other parental leave rights that are required to be mandatorily
observed by employers, besides the benefits prescribed under the Maternity
Benefit Act.
Whilst not statutorily mandated, employees may be permitted flex ibility in
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173 Legislation and The International Workforce 6.3.5 TERMINATION OF EMPLOYMENT
Except in case of termination of employment for misconduct, an employer
is mandated to provide notice of termination (or salary in lieu of notice) to
the c oncerned employee. As per the ID Act, for termination of services of
a workman who has been in continuous service for at least 240 days, an
employer shall provide at least one months’ notice (or salary in lieu of
notice) ( Notice of Retrenchment ) along wit h statutory severance
compensation. The notice period for dismissal of non -workmen will be
determined as per the terms of their employment contract. The S&E Acts
also prescribe for a notice period of one month for the termination of
employment by the emp loyer.
An employer may require employees to serve a period of garden leave
during the notice period, in accordance with the employment contract of the
employee.
All dismissals on grounds of misconduct must be superseded by a domestic
enquiry conducted in accordance with the principles of natural justice. The
employee must be given a reasonable opportunity to be heard as part of the
enquiry process. If the services of a workman (who has completed
continuous service of at least 240 days) is terminated on grounds other than
misconduct, in addition to Notice of Retrenchment, (as mentioned in
question 6.1 above), the employer is also required to serve notice to the
appropriate government. Further, retrenchment compensation (i.e.
statutory retrenchment compen sation) equal to 15 days average pay for each
completed year of continuous service or any part thereof in excess of six
months ( Retrenchment Compensation ) shall be payable to the workmen.
In addition to the protection afforded by the ID Act to workmen, th e
Maternity Benefit Act also prohibits dismissal or discharge of women
during their maternity leave.
An employer may also dismiss an employee for business -related reasons
such as role redundancy, restructuring or closure, by following the
procedure prescr ibed under the ID Act and/or the respective employment
contract.
An employee may bring forth a claim of wrongful termination if the
appropriate procedure is not followed for termination of his services. The
competent authorities may grant relief such as r einstatement with back
wages and/or compensation.
Employers may settle employee claims at any time after they are
initiated. For claims raised by workmen, employers may record the terms
of settlement by way of a settlement agreement.
In addition to the f ollowing procedures set out in questions 6.3 and 6.5
above, while dismissing a number of workmen, an employer shall ordinarily
be required to retrench the workman who was the last person to be employed
in a particular category. Further, additional require ments are prescribed in
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174 headcount of more than 100 is required to obtain prior permission of the
appropriate government for dismissing workmen, and the workmen shall be
entitled t o three months’ notice (or salary in lieu of notice) along with
Retrenchment Compensation.
If an employer does not comply with the procedure prescribed under the ID
Act for employee dismissals, the concerned workmen may raise an
industrial dispute with th e appropriate authorities. Apart from holding such
retrenchment to be illegal, the appropriate authorities may also prescribe
penalties and/or imprisonment for the employer, as per the ID Act.
6.4 TRADE UNION AND COLLECTIVE BARGAININ G
6.4.1 WHAT A TRAD E UNION IS?
A trade union is an organisation made up of members (a membership -based
organisation) and its membership must be made up mainly of workers.
One of a trade union's main aims is to protect and advance the interests of
its members in the workpl ace.
Most trade unions are independent of any employer. However, trade unions
try to develop close working relationships with employers. This can
sometimes take the form of a partnership agreement between the employer
and the trade union which identifies their common interests and objectives.
TRADE UNIONS:
• negotiate agreements with employers on pay and conditions
• discuss major changes to the workplace such as large scale
redundancy
• discuss members' concerns with employers
• accompany members in disc iplinary and grievance meetings
• provide members with legal and financial advice
• provide education facilities and certain consumer benefits such as
discounted insurance
1. Trade union recognition
Employers which recognise a union will negotiate with it over
members' pay and conditions.
Many recognition agreements are reached voluntarily, sometimes
with the help of the Labour Relations Agency.
If agreement can't be reached and the organisation employs more than
20 people, a union may apply for statutory recognition. To do so, it
must first request recognition from the employer in writing. If this is
unsuccessful, the union can apply to the Industrial Court for a
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175 Legislation and The International Workforce In considering the union's application, the Court must assess many
factors includi ng the level of union membership and the presence of
any other unions. Often, the Court will organise a ballot among the
affected workforce to decide whether recognition should be awarded.
Throughout the process, the emphasis is on reaching voluntary
agree ment. The Industrial Court (the Court) is a Tribunal Non -
Departmental Public Body with statutory powers. It was originally set
up in 1919 to provide arbitration in industrial disputes and it still
carries out this voluntary arbitration role.
2. Collectiv e bargaining
If a union is formally recognised by an employer, it can negotiate with
the employer over terms and conditions. This is known as 'collective
bargaining'.
For collective bargaining to work, unions and employers need to agree
on how the arrang ement is to operate. They might, for example, make
agreements providing for the deduction of union subscriptions from
members' wages; who is to represent workers in negotiations and how
often meetings will take place.
Both these agreements on procedure an d agreements between
employers and unions changing the terms applying to workers (like a
pay increase for example) are called 'collective agreements'.
Your contract of employment will probably set out which collective
agreements cover you. It's possible t hat a union may negotiate on your
behalf even if you're not a member.
Employment contracts - A contract of employment is an agreement
between an employer and an employee which sets out their
employment rights, responsibilities and duties. These are called the
'terms' of the contract.
6.4.2 JOINING A TRADE UNION
Some workers join a trade union because they believe that a union can:
• negotiate better pay
• negotiate better working conditions, like more holidays or improved
health and safety
• provide trai ning for new skills
• give general advice and support
Union members have the right to be accompanied to a discipline or
grievance hearing by a trade union representative (although trade unions are
not compelled to provide this). All employees, regardless of whether they
are union members or not, are entitled to be accompanied by a work
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176 • Grievance procedures - Grievances are concerns, problems or
complaints that employees raise with their employer. There is no
legally binding process that you or your employer must follow when
raising or handling a grievance at work. However, there are some
principles you and your employer should observe.
• Disciplinary procedures - Employers use disciplinary procedures to
tell employees that their performance or conduct isn't up to the
expected standard and to encourage improvement.
• Recognised unions also have rights to consultation where
redundancies or a transfer of business are proposed. There is a regular
subscription cost for union membership and different rates may apply
to trainees and part -timers. Unions will not normally help with
problems which pre -date membership.
• Employment protection during business transfers and takeovers
- How much redundancy pay you get depends on your wage, how long
you have wo rked at the company and your age. When your employer
gives you your redundancy payment they must also give you a
statement showing how it was calculated.
• Redundancy pay - How much redundancy pay you get depends on
your wage, how long you have worked at t he company and your age.
When your employer gives you your redundancy payment they must
also give you a statement showing how it was calculated.
1. How to join a union
If you want to join a recognised union in your workplace, you could
approach a represen tative for information like the shop steward. Or,
contact the Northern Ireland Committee of the Irish Congress of
Trade Unions (ICTU) to find out which union is relevant to you.
6.4.3 TRADE UNION -RELATED RIGHTS
The law gives you the right to join a trade union wherever you work. This
right applies whether a union has been recognised or not. You're protected
from being disadvantaged for being a union member. Specifically trade
union membership is an unlawful reason for:
• refusing you employment
• dismissi ng you
• selecting you for redundancy
• Trade union membership: your employment rights - Employers and
employment agencies must not treat you unfairly because you decide
to join, decide to leave, refuse to leave or refuse to join a trade union.
If they do, you may be able to make a complaint to an industrial
tribunal.
The law gives you the right not to join a trade union. The same protection
applies to you as it does to union members. In particular, employers are not
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177 Legislation and The International Workforce employer's preferred union). An employer can't deduct payments from you,
to a union or charity in lieu of union membership without your permission.
1. Blacklisting
You can’t be discriminated against because you are in a u nion or
because of your union activity.
With rare exceptions, it’s also illegal to compile, use, sell or supply a
‘blacklist’ of union members that will be used to discriminate against
you.
Blacklisting Regulations NI guidance - The Employment Relations
(Northern Ireland) Order 1999 (Blacklists) Regulations (Northern
Ireland) 2014 (the Regulations) came into operation on 6 April 2014.
They were introduced to prohibit the use of ‘blacklists’ in respect of
employees or potential employees. The Regulations can not be
avoided by employers instructing employment agencies to vet
employees, as the Regulations provide that employment agencies
cannot refuse to provide their services because an individual appears
on a blacklist
2. Trade union activities
When a union i s recognised by an employer, members have the right
to time off at an appropriate time to take part in trade union activities.
These may include:
• voting in ballots on industrial action
• voting in union elections
• meeting to discuss urgent matters
• attending the annual conference
• Time off for trade union duties and activities - Employees who
are members of a trade union that is recognised by their
employer have a statutory right to take a reasonable amount of
paid and unpaid time off for certain union duties and activities.
You don’t have the right to be paid for any time spent taking industrial
action.
Industrial action - If workplace disputes are not resolved, it can lead
to industrial action. Find out what protection there is for workers and
when i t applies and what you can do if you are punished for taking
industrial action.
6.5 SELF - ASSESSMEN T QUESTIONS
FILL IN THE BLANK
1) _____________________ is the body of rules
spanning public and private international law which concern the munotes.in

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178 Global HRM
178 rights and d uties of employees, employers, trade unions and
governments in regulating work (human activity) and the workplace .
2) _____________________ refer to conventions agreed upon by
international actors, resulting from a series of value judgments, set
forth to protect basic worker rights, enhance workers’ job security,
and improve their terms of employment on a global scale.
3) The _____________________ is a united nations agency that sets
universal labour standards.
4) The complexities faced by employers in managing an international
workforce is called _____________________
5) The complications faced by the employees employed in a global
workforce is called _____________________
6) The term ____________________ is used in the context of the
factories connec ted with the manufacturing process, or subject of the
manufacturing process.
7) A _____________________ is a person employed in an industry to
do any manual, unskilled, skilled, technical, operational, clerical or
supervisory work, for hire or reward.
8) Every woman who has completed 80 days service with the employer
is entitled to paid maternity leave of _____________________ of
which not more than eight weeks shall precede the expected date of
delivery.
9) In case of a woman with two or more survivin g children, she will be
entitled to _________________ of paid maternity leave.
10) _____________________ is an organisation made up of members (a
membership -based organisation) and its membership must be made
up mainly of workers.
11) If a union is for mally recognised by an employer, it can negotiate with
the employer over terms and conditions is called
_____________________.
12) If workplace disputes are not resolved, it can lead to
_____________________.
ANSWER
1) International labour law
2) Inter national labour standards
3) international labour organization (ILO)
4) employer -centric complications
5) employee -centric complications
6) ‘worker’
7) ‘workman’
8) 26 weeks
9) 12 weeks munotes.in

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179 Legislation and The International Workforce 10) A trade union
11) 'collective bargaining'.
12) industrial action.
TRUE OF FALSE
1) Increasing competition, desire to enter new markets, and diversifying
the customer base drives companies to go global.
2) A prohibition on forced or compulsory labour, child labour and unfair
discrimination among workers is decl aration on fundamental
principles and rights at work.
3) International workforce refers to the total number of a national pool
of workers working for a particular company, connected through a
global system of network and production.
4) The complication s faced by the employees employed in a global
workforce is called employer -centric complications.
5) An employer -employee relationship can either be express or implied,
written or oral.
ANSWER
True. (1, 2, 5)
False. (3, 4)
WRITE SHORT ANSWERS
1) Expl ain Principles Of Labour Law In All Countries.
2) What Is International Labor Standards?
3) Advantage Of International Labor Standards
4) Explain Global Workforce Management.
5) Explain Terms And Conditions Of Employment Law.
6) What Is Trade Union?
7) What Is Industrial Relations?
8) Why Should Workers Join A Trade Union?
6.6 SUMMARY
• International labor law covers all laws that apply across different
countries, as well as comparisons of laws between different
countries.
• In an international expansio n you need to ensure that international
labor standards are complied with in each jurisdiction that you expand
into.
• In your international expansion, pay attention to any labor standards
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180 Global HRM
180 • Ensure you are familiar with all the key employer obligations set out
in domestic law in your international location.
• A global workforce engages your business in multi -dimensional
aspects and thus, serves as the baseline to establish a well -connected,
powerful universal front.
• As per the Indian Constitution, the Central as well as State
Governments are empowered to enact suitable legislations to regulate
and protect the interests of employees, as well to create and increase
employment opportunities.
• If a union is formally recognised by an employer, it can negotiate with
the employer over terms and conditions. This is known as 'collective
bargaining'.
• A trade union is an organisation made up of members (a membership -
based organisation) and its mem bership must be made up mainly of
workers.
• Except in case of termination of employment for misconduct, an
employer is mandated to provide notice of termination (or salary in
lieu of notice) to the concerned employee.
• As per the Maternity Benefit Act , every woman who has completed
80 days service with the employer is entitled to paid maternity leave
of 26 weeks of which not more than eight weeks shall precede the
expected date of delivery.
• The Indian Constitution prohibits discrimination of citizen s on certain
grounds such as religion and sex. Trade unions are governed by the
Trade Unions Act 1926 (TU Act).
6.7 KEYWORDS
• International labour standards legal instruments, drawn up by the
ILO constituents (governments, employers and workers), t hat set out
basic principles and rights at work.
• international labour organization (ILO) promoting social justice
and internationally recognized human and labour rights
• employer -centric complications the complications faced by the
employees employed in a global workforce
• employee -centric complications the complexities faced by
employers in managing an international workforce.
• ‘worker’ one that works especially at manual or industrial labor or
with a particular material.
• ‘workman’ a man who works with his hands, for example building
or repairing houses or roads.
• A trade union an organisation made up of members (a membership -
based organisation) and its membership must be made up mainly of
workers. munotes.in

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181 Legislation and The International Workforce • 'collective bargaining' the process in which wo rking people, through
their unions, negotiate contracts with their employers to determine
their terms of employment,
• Industrial Relation to a relationship between the employers and
employees
• Grievance procedures means of internal dispute resolution by which
an employee may have his or her grievances addressed.
• Disciplinary procedures ell employees that their performance or
conduct isn't up to the expected standard and to encourage
improvement.
• discrimination he unfair or prejudicial treatment of pe ople and
groups based on characteristics such as race, gender, age, or sexual
orientation.
• global workforce to the total number of an international pool of
workers working for a particular company
• Cultural diversity the existence of a variety of cultu ral or ethnic
groups within a society.
• Employee Contracts an agreement or term of hire that is extended
from an employer to an employee to set the terms
• Minimum wage the lowest wage permitted by law or by a special
agreement.
• Employee termination the end of an employee's work with a
company .
• Payroll obligations after salary distribution, it is the obligation of the
payroll manager to transfer all the withdrawn money to the respective
government agencies.
• Employee benefits provided to employees over and above salaries
and wages .
REFERENCE:
https://en.wikipedia.org/wiki/International_labour_law
https://iclg.com/practice -areas/employment -and-labour -laws-and-
regulations/india
https://www.usemultiplier.com/global -workforce
https://nhglobalpartners.com/international -labor -law-explained -for-
employers/
https://www.nidirect.gov.uk/articles/introduction -trade-unions
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182 Global HRM
182 7
INTERNATIONAL TRAINING AND
DEVELOPMENT
Unit Structure
7.0 Objectives
7.1 Introduction
7.2 Define and contrast between training and development
7.3 Developmental aspect of international assignments and its relation to
international career paths
7.4 Training and developing international management teams
7.4.1 Reasons behind the management development training
programs
7.4.2 Objectives of management development
7.4.3 Two types of management development
7.5 Trends in international training and development
7.6 Self-Assessment Questions
7.7 Summary
7.8 Key-Words
7.0 OBJECTIVES
To Learn:
• IHRM is concerned with handling the human resources at
Multinational Companies (MNCs) and it includes managing three
types of employees.
• Define and contrast between training and development
• Understand Trends in international training and development
• What are the Two types of management development?
• Objectives of management development
• What are the Reasons behind the management development
training programs?
• Explain Training and developing international management teams
• Explore Developmental aspect of international assignments and its
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183 International Training and Development 7.1 INTRODUCTION
Training and Development is a structured program with different methods
designed by professionals in particular job. It has become most common
and continuous task in any organisation for updating skills and knowledge
of empl oyees in accordance with changing environment. Optimisation of
cost with available resources has become pressing need for every
organisation which will be possible only by way of improving efficiency
and productivity of employees, possible only by way of p roviding proper
employee training and development conditioned to that it should be
provided by professionals.
International Human Resource Management (IHRM) can be defined as a
set of activities targeting human resource management at the international
level. It strives to meet organizational objectives and achieve competitive
advantage over competitors at national and international level.
IHRM comprises of typical HRM functions such as recruitment, selection,
training and development, performance appraisal and dismissal done at the
international level and additional exercises such as global skills
management, expatriate management and so on.
In short, IHRM is concerned with handling the human resources at
Multinational Companies (MNCs) and it includes managi ng three types of
employees í
• Home country employees í Employees residing in the home country
of the company where the corporate head quarter is situated, for
example, an Indian working in India for some company whose
headquarters are in India itself.
• Host country employees í Employees residing in the nation in which
the subsidiary is located, for example, an Indian working as an NRI
in some foreign country.
• Third country employees í These are the employees who are not
from home country or host country but are employed at the additional
or corporate headquarters.
7.2 DEFINE AND CONTR AST BETWEEN TRAINING
AND DEVELOPMENT
Training and development is one of the most important aspects of staffing.
The process of increasing the knowledge, skills and abilities of employees
for doing a work is known as Training . It is a process by which attitudes,
skills, and capabilities to do a particular job are increased. It is a process of
learning new skills and applying knowledge. Its main aim is to improve the
performance of the current job and prepare them for any future job. Training
enhances productivity and reduces accidents and wastage of resources. It
also helps to increase the morale and satisfaction of the employees. munotes.in