International Organization It refers to all those business activities which involve cross border transactions of goods, services, resources

between two or more nations. Transaction of economic resources include capital, skills, people etc. for international production of physical goods and services such as finance, banking, insurance, construction etc. The conduct of international operations depends on companies' objectives and the means with which they carry them out. The operations affect and are affected by the physical and societal factors and the competitive environment Approaches To The Study Of Comparative Employment Policy Unitary theory: The unitary perspective views the organisation as pointing towards a single or unified authority and loyalty structure. Emphasis under the unitary perspective is placed on common values, interest and objectives. Those subscribing to this view see all organisational participants as a team or family thereby implicitly emphasing shared values, shared goals and common destiny. Unitary in essence implies the absence of factionalism within the enterprise. The Social Action Approach: The social action approach considers the organisation from the position of the individual members or actors who will each have their own goals. This perspective regards conflicts of interests as normal behaviour and part of organisational life. Social action theory represents a contribution from sociologists to the study of organisations. It attempts to view the organisation from the standpoint of individual members or actors of industrial relations. The theory seeks to analyse why the actors take certain lines of action. Marxist theory Marxism is, more or less, a general theory of society and of social change with implications for the analysis of industrial relations within capitalist societies and does not strictly explain the theory of industrial relations. Conflict theory Conflict theory is synonymous with the pluralist or the pluralistic frame of reference which is also credited to Alan Fox (1966). Conflict theory views the organisation as coalescence of sectional groups with different values, interests and objectives. Thus, employees have different values and aspirations from those of management, and these values and aspirations are always in conflict with those of management. Individualism/Collectivism: The extent to which the society is organized around individuals or the group. Individualism/collectivism is the consequences of the culture and affects the formation of groups, productivity and marketing practices. Power Distance: Power distance denotes the relationship between superiors and subordinates. Cultures with stronger power distance will be more likely to have decision-making concentrated at the top of the culture. Acceptance of authority differences among people High power distance cultures are status conscious and respectful of age and seniority Lower power-distance orientations greater tendency to make decisions in a consultative style Masculinity/Femininity: The extent cultures hold values that are traditionally perceived as masculine or feminine

Masculinity is the degree to which the dominant value of the society are success, money and material things Femininity is the degree to which the dominant values of the society are caring for others and quality of life. Uncertainty Avoidance: Employees in countries with highest score of uncertainty avoidance prefer a system and a methodological work based on rules that are not to be deviated. Employees in countries with low scores of uncertainty avoidance prefer flexible organizations and flexible work. Functions: Staffing and Recruitment Finding, retaining and developing a superior workforce is one of the biggest challenges in a global organization. Understanding cultural differences in the recruitment process, in the selection of candidates and in what motivates employees is crucial in the staffing and recruitment processes for any international operations and ultimately to the success of global organizations. The skills required to operate these businesses need to be matched with the available local talent. Salaries and Other Rewards While fixing salaries and compensation packages, it is imperative that adequate care is taken to see that local standards are met. Overall organizational requirements should be met concurrently as well. Insurance, pension and other benefits need to be considered in conjunction with the present policies of the company. Local laws regarding minimum wages, bonuses, tax compliance services and other employee benefit services also have to be structured into the packages. Training and Development To reduce costs, the possibility of developing in-house training should be considered. If local facilities for training and development of staff are not adequate, sending staff to other countries may need to be considered. This also helps employees recognize that they work in a multicultural environment. The additional costs and benefits of such training should also be carefully studied. Administration of Personnel The administration of HR and related matters need to take into consideration the varying working conditions of each area of international operations. A company's strategy will impact its employees, and it is necessary to have HR support staff that not only understand the global landscape but also have a thorough knowledge of global business and what it takes to establish companies in new geographies. Human Relations When contemplating global human resource management, every sphere of international operations needs to follow specified religious and national festivals that may require certain actions to be taken by the HR department. Functions of global human resource management take on these additional aspects when a company is globalized. Globalization and HRM: The term Globalization has invaded the mind of every successful businessman and the concept of Global Village is a common issue in the modern business world. When going global, an organization has to reconsider the following factors: Employment Laws

 Culture Terminology Corporate Social Responsibility Globalization is a process that is drawing people together from all nations of the world into a single community linked by the vast network of communication technologies. This aspect of globalization has also affected the HRM in the business world of today. HR managers today not need to rely in a small limited market to find the right employees needed to meet the global challenge, but today they can recruit the employees from around the world. Global HRM refers to Human Resource Management practices that deal with managing a diversity of workforce from all around the world. The following challenges are being faced by HR managers in terms of globalization: Managing diversity of workforce. Managing pressures for more labor rights in third world countries. Managing Outsourcing of employees. More part-time and temporary work Managing productivity and Quality Downsizing the workforce Coping with flexible working hours Internationalisation of Business: Internationalization has been viewed as a process of increasing involvement of enterprises in international markets, although there is no agreed definition of internationalization or international entrepreneurship. Types of International Business Activities: Importing is the purchasing abroad, either directly from target suppliers or indirectly through sales agents and distributors. Exporting is the selling abroad, either directly to target customers or indirectly by retaining foreign sales agents and distributors. Licensing does not have to be an international arrangement. Licensing may take place completely within one country. But, it is also a convenient way for a company to spread its products abroad with minimal risk. Franchising also does not have to be an international arrangement. Franchising may take place completely within one country. There are many examples of nationally-based franchises with which we are sure you are familiar. It is also another convenient way for a company to introduce its products abroad with minimal risk. Foreign Direct Investment occurs when a company invests resources and personnel to build or purchase an operation in another country. This turns the firm into a multinational company (MNC). Joint Ventures and Strategic Alliances are somewhat different from foreign direct investment in that we are not talking about creating wholly owned subsidiaries. Strategic ways to penetrate different global markets around the world while limiting exposure at the entry phase.

Impact of Inter Country Differences on HRM: Cultural Factors: Wide-ranging cultural differences from country to country require corresponding differences in HR practices among a company's foreign subsidiaries Economic Factors: Differences in economic systems among countries also translate into inter country differences in HR practices. In free enterprise systems, for instance, the need for efficiency tends to favor HR policies that value productivity, efficient workers, and staff cutting where market forces dictate Labor Cost Factors: Inter country differences in labor costs are substantial. Industrial Relations Factors: Industrial relations, and specifically the relationship between the worker, the union, and the employer, vary dramatically from country to country. Personnel Selection Procedures: Employers around the world tend to use similar criteria and methods for selecting employees. The Purpose of the performance appraisal: There tends to be more variation in how employers in different countries use performance appraisals. Training and Development Practices: The amount of training that a firm provides varies substantially from country to country. The compensation of CEO: The compensation of CEOs is generally viewed within an agency framework. The separation that exists between the owners and managers in corporations gives rise to an agency problem in which managers have an incentive to pursue their personal interests over the interests of shareholders. A total executive compensation program must (1) Support the company's strategic and operating objectives. (2) Effectively attract, retain, and motivate the executive talent needed to accomplish these objectives. (3) Appropriately reflect the needs and interests of key stakeholders (i.e., shareholders, employees, customers, regulators, and vendors), and (4) Reinforce organizational values with respect to the importance of individual and team performance and risk and reward sharing and with respect to the relative importance of various positions and job functions. The various plans that make up the total executive compensation program are structured differently from company to company, reflecting differences in strategies. Each company chooses a mix of compensation elements that will most appropriately meet its objectives and reinforce its values relative to (1) the importance of individual and team performance, and (2) risk and reward sharing.

Table 1. Purposes of Executive Compensation: Multiple the perspectives of both the company and the executive. Type of Element Base Salary Company Perspective Executive Perspective

Facilitates attraction and Supports basic lifestyle retention of required executive talent Provides basic financial Provides basic level of security, enabling incentives to financial security, allowing carry appropriate degree of incentives to carry appropriate risk degree of risk Provides yardstick for measuring magnitude of other pay elements Rewards attainment of business plan Encourages incremental progress or improvement Focuses organizational priorities Reinforces performancedriven culture Rewards performance relative to others Rewards progressive improvement in year-to-year results Provides regular measure of success or progress

Short-Term Incentives

Long-Term Incentives

Rewards growth in real value Balances rewards with risk of company Rewards attainment of Provides capital accumulation strategic goals opportunity Encourages appropriate degree of risk-taking Enhances executive retention Provides tax-effective Protects against financial compensation catastrophe Enhances executive retention Provides appropriate secure retirement income Conserves executive time Recognizes status

Benefits and Perquisites

Fringe benefits for CEO:

Awards/Bonuses Club memberships or club dues Company credit cards Executive dining room Loans to executives Discounts Spouse/dependent life insurance Transportation/car for use of employee Employer-paid parking Employee use of listed property Relocation Vacations Spouse/dependent/other individual travel with an executive

AN EXPATRIATE (sometimes shortened to expat) is a person temporarily or permanently residing in a country and culture other than that of the person's upbringing. During the later half of the 20th century, expatriation was dominated by professionals sent by their employers to foreign subsidiaries or headquarters. HQ needs clearly communicate its subsidiary what tasks and responsibilities an expatriate has and how important he/she is. HQ should select for foreign assignments expatriates with high motivation to work in a given host country, otherwise they will not be effective and successful. HQ should increase the financial transfer in the subsidiary budget to help it cover some costs of an expatriate assignment. As some interviewees pointed out there could be resistance among the local employees concerning the costs of an expatriates pay package. Additionally, their motivation may decrease if there are significant disproportions between the expatriates and the host employees compensation level. HQs managers must be aware that cross-cultural differences between the parent and the host country will probably affect expatriates abilities to realize the goals according to HQs demands and expectations. Effective utilization of expatriates should reflect empirical studies concerning all the aspects of expatriate management from the selection of a candidate to the premature return of managers from foreign assignments the large body of literature and research on expatriate management suggests extensive cross-cultural trainings for managers and their families on foreign assignments, including speaking local language. Effective utilization of expatriates means meeting such a requirement. The roles of expatriates that have been identified in literature include, among other issues: A controller: An expatriate must ensure that his/her subsidiary operates in accordance with the HQs direction A coordinator - an expatriate needs to collaborate with local employees to ensure goals achievement of both the parent company and the subsidiary, A developer/transferor- an expatriate must develop the local employees skills through knowledge transfer.

Chapter 2
International staffing policies and practices:
1. Ethnocentric: All management positions are filled with employees from the parent company 2. Polycentric: Host country nationals are recruited to manage subsidiaries while management at headquarters is staff by parent-company nationals 3. Geocentric: Seeks the best people for the job regardless of where they come from. 4. Regiocentric: PCNs and managers from the region either HCNs or TCNs staff regional

headquarters positions

Techniques and sources of global recruitment SOURCES OF GLOBAL RECRUITMENT: 1. PARENT COUNTRY NATIONALS Parent country nationals in international business normally are managers, heads of subsidiary companies, technicians, troubleshooters and experts.

2. HOST COUNTRY NATIONALS Host country nationals are the employees of the companys subsidiary who are the citizens of the country where the subsidiary is located. 3. THIRD COUNTRY NATIONALS: A one country citizen work for host Country Company in any other country where subsidiary is located. Internal Recruitment - is a recruitment which takes place within the concern or organization. Internal sources of recruitment are readily available to an organization. Internal sources are primarily three - Transfers, promotions and Reemployment of ex-employees.

a. Transfers b. Promotions (through Internal Job Postings) and c. Re-employment of ex-employees 2. External Recruitment - External sources of recruitment have to be solicited from outside the organization. External sources are external to a concern. But it involves lot of time and money. The external sources of recruitment include - Employment at factory gate, advertisements, employment exchanges, employment agencies, educational institutes, labour contractors, recommendations etc. a. Employment at Factory Level b. Advertisement c. Employment Agencies d. Educational Institutions e. Recommendations f. Labour Contractors Screening the applicants background on the basis of work experience with cultures other than ones own, previous overseas travel, knowledge of foreign language and overall Performance. Testing the candidate's ability to adapt to the new culture and environment. Testing the ability of the spouse and family members of the candidates to the foreign culture and environment. Predicting the adjustment of the candidate. Testing the skill of adjustment with the host nationals. Job duties and responsibilities

Therefore expatriate must meet 6 basic criteria: They must be willing and motivated to go overseas

They They They They They

must must must must must

be technically able to do the job be adaptable have good inter personal skills and able to form relationship have good communication ability and have supportive families

Self-Orientedness adaptive concern for self-preservation, self-enjoyment and mental hygiene Perceptual expertise in accurately understanding the behavior of host country nationals Others-Orientedness Degree of concern about the host country nationals and the expatriates desire to affiliate with them Cultural Toughness Difference between the expatriates country and the host countrys cultural, social, political, economic etc. environment and its implication for the expatriate

Types of International staffing: Short term up to 3 month Extended - up to 1 year Long term 2-5 years Commuter Assignment Person lives in London but works in Moscow come and go by weekly or biweekly basis. Rotational Assignment - Used on oil rigs Contractual Assignment Depends on the project. Global Compensation: Compensation centers on rewards and remuneration, and our role is focused on developing, implementing and administering reward and benefit policies. These include salaries, bonuses and employee benefits such as pensions, healthcare (medical insurance), life assurance schemes, company cars, relocation and expatriate packages.

Define global rewards programs with locally appropriate targets to ensure fair and consistent compensation practices Set compensation pools based on bottom up targets or performance goals Motivate and reward based on individual, team, and business performance Make better decisions based on contextual and real-time comparative information during the compensation review