CHAPTER 11 INTERNATIONAL HUMAN RESOURCE

CHAPTER 11
INTERNATIONAL
HUMAN
RESOURCE
MANAGEMENT
COMPONENTS OF
HRM
•
•
•
•
•
•
Recruitment
Selection
Training & Development
Performance Appraisal
Compensation
Labor Relations
INTERNATIONAL
HRM (IHRM)
• Basic HRM issues remain
• Must choose a mixture of
international employees
• How much to adapt to local
conditions?
EMPLOYEES IN
MULTINATIONAL
ORGANIZATIONS
•
•
•
•
•
Host country nationals
Expatriates
Home country nationals
Third country nationals
Inpatriates
MULTINATIONAL
MANAGERS
• Host country or expatriate?
USING HOST COUNTRY
MANAGERS
• Do they have the expertise for
the position?
• Can we recruit them from outside
the company?
USING EXPATRIATE
MANAGERS
• Do parent country managers have
the appropriate skills?
• Are they willing to take expatriate
assignments?
• Do any laws affect the assignment
of expatriate managers?
•IS THE EXPATRIATE
WORTH IT?
• High cost
• High failure rate
Singapore
Taipei
London
Hong
Kong
Tokyo
400000
350000
300000
250000
$ 200000
150000
100000
50000
0
Home
Salary
•EXHIBIT 11.1 PAYING FOR
THE EXPATRIATE MANAGER
•REASONS FOR U.S.
EXPATRIATE FAILURE
•
•
•
•
•
Spouse fails to adapt
Manager fails to adapt
Other problems within the family
Personality of the manager
Level of responsibilities
•Reasons for expatriate
failure, continued
• Lack of technical proficiency
• No motivation for assignment
•MOTIVATIONS TO USE
EXPATS
• Managers acquire international
skills
• Coordinate and control operations
dispersed activities
• Communication of local
needs/strategic information to
headquarters
•KEY EXPATRIATE SUCCESS
FACTORS
•
•
•
•
•
Professional/technical competence
Relational abilities
Motivation
Family situation
Language skills
• Willingness to accept position
•PRIORITY OF
SUCCESS FACTORS
• Depends on :
• assignment length
• cultural distance
• amount of required interaction
with local people
• job complexity/responsibility
•EXHIBIT 11.3 SHOWS A
DECISION MATRIX USED
TO SET PRIORITIES OR
DIFFERENT SUCCESS
FACTORS DURING
SELECTION
Expatriate
Success
Factors
Longer
Duration
Professional/
Technical
Skills
Relational
Abilities
International
Motivation
Family
Situation
Language
Skills
High
Assignment Characteristics
Greater
More
Interaction
More
Cultural
and
Complex or
DisCommunica- Responsimilarity tion
sible Job
Requirements
with Locals
Neutral
Moderate
High
Moderate
High
High
Moderate
High
High
High
High
High
High
Neutral
Moderate
Moderate
High
High
Neutral
•EXPATRIATE TRAINING
•TRAINING RIGOR
• The extent of effort by trainees
and trainers required to prepare
the trainees for expatriate
positions
•LOW RIGOR
TRAINING
•
•
•
•
Short time period
Lectures
Videos on local culture
Briefings on company operations
company operations
•HIGH RIGOR
TRAINING
•
•
•
•
Lasts over a month
Experiential learning
Extensive language training
Often includes interactions with
host country nationals
•EXHIBIT 11.4 SHOWS
VARIOUS TRAINING
TECHNIQUES AND THEIR
OBJECTIVES AS THE RIGOR
OF THE CROSS- CULTURAL
TRAINING GROWS
Techniques: Field trips to
host country, meetings
High with managers experienced
Training in host country, meetings
Rigor with host country
nationals, intensive
language training.
Objectives: Develop
comfort with host country
national culture, business
culture, and social
institutions.
Techniques:
Experiential learning
exercises, role playing,
simulations, case
Midlevel studies, survival
language
training.
Training
Rigor
Objectives: General and
specific knowledge of
host country culture,
reduce ethnocentrism.
Techniques: Lectures,
videotapes, reading
background material.
Objectives: Provide
Low background information on
Training host country business and
Rigor national cultures, basic
information on company
operations.
•CHALLENGES OF EXPATRIATE
PERFORMANCE APPRAISAL
• Unreliable data
• Complex and volatile
environments
• Time differences and distance
separation
• Local cultural situations
•STEPS TO IMPROVE
THE PROCESS
• 1. Fit the evaluation criteria to
strategy.
• 2. Fine tune the evaluation
criteria
• 3. Use multiple evaluators with
varying periods of evaluation
•EXHIBIT 11.6 Shows several
sources of information a
superior or the HRM
professionals may use to
evaluate an expatriate
managers
Evaluation Sources
Criteria
Periods
Self evaluation
Meeting objectives
Management skills
Project successes
Leadership skills
Communication skills
Subordinate development
Team building
Interpersonal skills
Cross-cultural interaction
skills
Six months and at the
completion of a major
project
After completion of
major project
On-site supervisor
Management skills
Leadership skills
Meeting objectives
At the completion of
significant projects
Customers and clients
Service quality and
timeliness
Negotiation skills
Cross-cultural interaction
skills
Yearly
Subordinates
Peer expatriate and
host country manages
Six months
•EXPATRIATE
COMPENSATION
•THE BALANCE
SHEET APPROACH
• Provides a compensation package
that equates purchasing power
•BALANCE SHEET
COSTS
• Allowances for cost of living,
housing, utilities, furnishing,
educational expenses, medical
expenses, club memberships, and
car and/or driver expenses
Domestic
Assignment
Expenses and
Spendable
Income
Base Salary
Expatriate Assignment Expenses and
Balanced Spendable Income + Allowances
=
=
+
Base Salary
Allowances as an incentive to take position,
foreign service premium, hardship pay, R&R
Taxes
Allowances to balance extra tax payments
=
Goods and Services
+
Taxes
Goods and
Services
+
Housing
=
+
Spendable
Income
=
Allowances to cover cost of living differences,
housing, children’s education, medical costs,
automobile, recreation, home leave travel
Housing
Allowances for moving expenses, settling in
expenses, initial housing costs, and furnishing
allowances
Spendable Income
•OTHER
APPROACHES
• Parent country wages everywhere
• Wean expatriates from allowances
• Pay based on local or regional
markets
• Cafeteria selection of allowances
• Global pay systems
•THE REPATRIATION
PROBLEM
• Difficult for many organizations
• "Reverse culture shock"
• Expatriates must relearn own
national and organizational
culture
• Includes whole family
•STRATEGIES FOR SUCCESSFUL
REPATRIATION PROVIDE:
•
•
•
•
A strategic purpose for repatriation
A team to aid the expatriate
Home country information sources
Training and preparation for the
return
• Support for expatriate and family
•WOMEN EXPATRIATES:
TWO IMPORTANT "MYTHS"
• Myth 1: women do not wish to
take international assignments
• Myth 2: women will fail in
international assignments
because of the foreign culture's
prejudices against local women
•SUCCESSFUL WOMEN
EXPATRIATES
• Foreign not female
• emphasize nationality not gender
• The woman's advantage
• strong in relational skills
• wider range of interaction
options
•MULTINATIONAL
STRATEGY AND IHRM
•IHRM ORIENTATIONS
• Ethnocentric
• Polycentric
• Regiocentric
• Global
•IHRM ORIENTATION AND
MULTINATIONAL STRATEGY
• Early stages of
internationalization =
ethnocentric IHRM
• Multilocal strategies =
ethnocentric or regiocentric
• Regional strategy = closer to the
global
• International strategy =
ethnocentric or polycentric
IHRM
• Transnational strategies = a
global IHRM
•CONCLUSIONS
•
•
•
•
HRM functions
IHRM challenges
Expatriate managers
The role of women in
multinational organizations
• Multinational strategies and
IHRM orientations