IHRM and HRM Difference

In a highly competitive global economy, where the other factors of production—capital, technology, raw materials, and information—are increasingly able to be duplicated, “the caliber of the people in an organization will be the only source of sustainable competitive advantage available to companies. Domestic HRM and international HRM are both concentrate on human resource management, but there are many differences also. No mater domestic HRM or international HRM an organization’s HRM activities are also include these 6 parts.

The first part is human resource planning, before the company employs the employees the company should know what kind of employees their need. Then the second part is staffing (recruitment, selection, placement), the company select the employees what they need from the HR market. The third part is compensation (remuneration) and benefits. The company should set the employees’ wages. Then, the forth part is deal with the industrial relations.

It is common in every company that there are many troubles in employees or in employees and the company, so the company should set a department which is especial deal with the problem. The fifth part is performance management. The company’s main project is to make profits, so at the end of the year the company will reward or punish according to the employee’s performance. The last part is training and development. And these parts are completed one by one. There are also many differences between domestic HRM and IHRM. IHRM complexity can be attributed to six factors.

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The first is more HR activities such as international taxation; international relocation and orientation; host-government relations; language translation services. For example, to a domestic company it is only concerned with the tax rates in his country, but for a international company it is not only focus on his PCN’s tax rates but also focus on his TCN’s tax rates. The second is need for a broader perspective such as program design and administration for several employee groups; long term consequences on key decisions made.

For example, to a domestic company it pays all attention to his program design and administration in his country, but for a international company it is not only focus on his PCN’s program design and administration but also pays attention to his TCN’s program design and administration. The third one is more involvement in employees’ personal lives. One obvious difference between domestic and international HRM is that staff are moved across ational boundaries into various roles within the international firms foreign operations—these employees have traditionally been called expatriates. An expatriate is an employee who is transferred out of their home base into some other area of the firm’s international operations.

There are many factors will determine the assignment succeed or failed such as level of support to handle for PCNs and TCNs, banking, investments, home rental while on assignment, coordinating home visits , final repatriation, level of explanations particularly on the comp. ackage components , marital status during selection process. The forth one is variations in the mix of expatriates and locals, for example if the company want maturity evolves, the company need to support expat and virtual team. All these such as foreign subsidiary increased autonomy, high potential selection and development, long term succession planning necessitates flexibility and focus fluctuation within the HR department, not needed for domestic HR to the same degree.

The fifth one is risk exposure, the IHRM will face heavier financial and human consequences in case of assignment failure. The last one is broader external influences such as the type of government; the state of the economy ; generally accepted practices of doing business in host countries. We can conclude that HRM is important to every company no matter it is domestic company or international company, so the manager should pay more attention to the HRM or the company will fail.

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