8. Review of IHRM Approaches

• Ethnocentric Approach:
  • Parent country practices are applied in all subsidiaries.
  • Example: A US-based company may insist on using its own performance appraisal system in all its foreign subsidiaries, regardless of local cultural norms.
• Polycentric Approach:
  • Each subsidiary develops its own HR practices based on local needs and conditions.
  • Example: A company may allow its subsidiaries in different countries to develop their own compensation and benefits packages based on local market conditions.
• Regiocentric Approach:
  • HR practices are standardized within specific regions, but may vary across regions.
  • Example: A company may have different HR policies for its European subsidiaries than for its subsidiaries in Asia.
• Geocentric Approach:
  • Focuses on developing and implementing HR practices that are globally consistent while also being responsive to local needs.
  • Example: A company may develop a global compensation framework that provides a consistent base salary across all countries, but allows for local adjustments to reflect cost of living differences.