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 managing three types of employees −
- Home country employees − 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 − 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 − These are the employees who are not from home country or host country but are employed at the additional or corporate headquarters.
For example, an Indian MNC, which has its corporate office in America, may employ a French person as the CEO to the subsidiary. The Frenchman employed is a third country employee.
IHRM vs. HRM
There are many similarities between HRM at the national as well as international level. However, let us have a look at the differences between them with the help of points given below −
- Domestic HRM takes place at the national level, that is, within a country and IHRM takes place at the international level, that is, in between two or more than two countries.
- Domestic HRM is bothered about managing employees belonging to one nation and IHRM is bothered about managing employees belonging the home country and host country as well as third country employees.
- Domestic HRM is concerned with managing limited number of HRM activities at the national level and IHRM is concerned with managing additional activities such as expatriate management.
- Domestic HRM is less complicated due to less imprint from the external environment. IHRM is comparatively more complicated, as it is deeply affected by the external factors such as cultural distance and institutional factors.
We can conclude that both IHRM and HRM share some grounds of similarities as well as dissimilarities, but both have their own importance. Further, they contribute to the development of a country in a combined manner.
