<link rel="alternate" href="http://example.com" hreflang="en-us" />
hreflang attribute informs search engines as to which language you are using on the page. The code introduced by Google is placed in the head sections of website along with other attributes, title, keywords and description.
Different language pages are created whence local audience is targeted. The page could be in any language and the attribute informs the search engine about it. This is essential in order not to confuse the search engine.
Hence designers can create pages in different languages as per the audience targeted and literally make it more conversant as well as decrease the bounce rate. The visitors land on the right language page whence the algorithms detect their IP address as pertaining to a particular country where that language is in popularity.
Even variants of a single language can be targeted using the attribute by adding annotation hreflang="es-es"/> to hreflang="es- mx"/> the latter being Spanish in Mexico. But this targeting is limited to countries only and not continents, unions of subcontinent.
Google and Yahoo support this attribute while Bing supports language meta tag. Coding should from ISO 639-1 and for regional targeting ISO3166 -1 Alpha 2.
This tag generator tool is also available online making your work easier. On one page depending upon the relevancy multiple attributes can be placed.
This attribute is preffered for International targeting in place of cannonclization.