Skip to main content
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.
