Presentation on theme: "Managing Global Human Resources"— Presentation transcript:
1 Managing Global Human Resources Chapter 16Managing Global Human Resources
2 Chapter 16 Outline HR and the Internationalization of business The HR Challenges of international businessHow intercountry differences influence HRMCultural factorsEconomic systemsLegal and industrial relations factorsThe European Union
3 Chapter 16 OutlineImproving international assignments through selectionWhy international assignments failInternational staffing: Home or local?Values and international staffing policySelecting international managersThe new workplace: Sending women managers abroad
4 Chapter 16 Outline Training and maintaining international employees Orienting and training employees of international assignmentsInternational compensationThe balance sheet approachIncentivesBeyond compensation
5 Chapter 16 OutlineTraining and maintaining international employees (continued)Performance appraisal of international managersInternational labor relationsSafety and fair treatment abroadHR.netRepatriation: Problems and solutionsStrategic HR
6 Chapter 16 Outline A final word: Strategic HR Summary Strategy and strategic HRManagement values and philosophyAuditing the HR functionSummary
7 After Studying This Chapter You Should Be Able To: More effectively manage international HR-related tasksIllustrate how intercountry differences effect HRMExplain five ways to improve international assignments through selectionDiscuss how to train and maintain international employeesPage 464
8 Strategic Overview Basic concepts Managing international aspects of HR How businesses are internationalizingPage 464In previous chapters we’ve discussed the basic concepts and techniques of HR management, including job analysis, recruitment, selection, appraisal, compensation, and labor relations and safetyIn this final chapter we discuss how to make you more effective at managing the international aspects of your HR dutiesWe look at internationalization of business, intercountry differences affecting HR, improving international assignments through selection, and training and maintaining international employees
9 HR and The Internationalization of Business Increasingly, US based companies are doing business abroadKeys to success for firms like P&G, IBM, and CiticorpNew challengesPage 465U.S.-based companies are increasingly doing business abroad. Huge firms like Procter & Gamble, IBM, and Citicorp have long had extensive overseas operations, of course. But with the European market unification, the introduction of the euro currency, the opening of Eastern Europe, and the rapid development of demand in Asia and other parts of the world, even small firms are finding that success depends on their ability to market and manage overseas.
10 What US Firms Should Do Coordinate plans on a worldwide basis Create organization structures providing balanceExtend HR challenges, systems abroadAnswer these questions:Page 465This confronts firms with some interesting management challenges. Market, product, and production plans must be coordinated on a worldwide basis, for instance, and organization structures capable of balancing centralized home office control with adequate local autonomy must be created. And, of course, the firm must extend its HR policies and systems abroad.Should we staff offices with local or US managers?How should we appraise and pay the local employees?How should we deal with the unions in our offices abroad?
11 HR Challenges of International Business Researchers asked “What are the key global pressures affecting human resource management practices in your firm currently and for the projected future?” Responses were:DeploymentKnowledge and innovation disseminationIdentifying and developing talent globallyPage 465Deployment: Easily getting right skills where needed regardless of geographic location.Knowledge and innovation dissemination: Spreading state-of-the-art knowledge and practices throughout the organization regardless of where they originate.Identifying and developing talent on a global basis: Identifying who can function effectively in a global organization and developing his or her abilities.
12 Global Staffing Pressures Candidate selectionsAssignment termsRelocationImmigrationCulture and languageCompensationTax administrationHandling spouse and dependent mattersPage 466Dealing with global staffing pressures like these is quite complex. For example, it involves addressing, on a global basis, activities including candidate selections, assignment terms and documentation; relocation processing and vendor management; immigration processing; cultural and language orientation and training; compensation administration and payroll processing; tax administration; career planning and development; and handling of spouse and dependent matters.
13 How Intercountry Differences Influence HRM How do cultural, political, legal, and economic differences of other countries influence HR policies?Cultural factors address the ethos of a countryManagement styles varyChinaPage 466Instructor’s notes:US managers hurry to get the job done.Managers in China have a primary goal to create harmony among the workers. Managers in Hong Kong may lie between these extremes Companies operating only within the borders of the United States generally have the luxury of dealing with a relatively limited set of economic, cultural, and legal variables. The United States is a capitalist, competitive society. A company operating multiple units abroad isn’t blessed with such homogeneity.For example, minimum legally mandated holidays range from none in the United Kingdom to 5 weeks per year in Luxembourg. And while Italy has no formal requirements for employee representatives on boards of directors, they’re required in Denmark for companies with more than 30 employees. The point is that the need to adapt personnel policies and procedures to the differences among countries complicates HR management in multinational companies.Hong KongUS
14 A Classic Study Definition Power distance is the extent to which the less powerful members of institutions accept and expect an unequal distribution of powerDifferent expectationsPage 466A study by Professor Geert Hofstede identified other international cultural differences affecting US management policies, including power distance. Hofstede says societies differ in power distance— in other words, the extent to which the less powerful members of institutions accept and expect an unequal distribution of power. He concluded that acceptance of such inequality was higher in some countries (such as Mexico) than in others (such as Sweden).Managers and workers in other countries have different expectations than their US counterparts
15 Power Distance Effect In Mexico, German workers never arrive late Managers keep their distanceFormal rulesIndividualism and self-sufficiencyGerman workers never arrive latePage 466In Mexico, managers keep their distance and remain formal. Mexican workers adhere to formal rules and regulations but only when boss is present. They don’t place much importance on individualism and self-sufficiency. German workers never arrive late and they address management formally.
16 Economic Differences US $19.86 Mexico $2.46 Taiwan $5.98 UK $15.88 Translate into differences in HR practices:Espousing ideals of free enterpriseWage costs varyOther labor costs varyUS $19.86Page 467Shown are hourly wages for production workers (converted into US dollars).There are other labor costs to consider. For example, there are wide gaps in hours worked. Portuguese workers average about 1,980 hours of work annually, while German workers average 1,648 hours. Several European countries, including the United Kingdom and Germany, require substantial severance pay to departing employees, usually equal to at least two years’ service in the United Kingdom and one year’s in Germany.19 Compared to the usual two or three weeks of U.S. vacation, workers in France can expect two days of paid holiday per full month of service per year, Italians usually get between four and six weeks off per year, and Germans get 18 working days per year after six months of service.Mexico $2.46Taiwan $5.98UK $15.88Germany $29.01
17 Legal and Industrial Relations Factors DefinitionIndustrial relations means the relationships among the worker, the union, and the employerThe US practice of employment at will does not exist in EuropeWork councilsCodeterminationPage 467Work councils are formal , employee-elected groups of worker representatives that meet monthly with managers to discuss a range of topics and are used widely in Europe.Codetermination means that employees have the legal right to a voice in setting company policies, even HR policies. Used widely in Germany and elsewhere.
18 European Union EU formation caused: Tariffs disappeared Free movement between jobsUse of the Euro as single currencyUnion consultingPage 468The European Union In the 1990s, the separate countries of the former European Community (EC) were unified into a common market for goods, services, capital, and even labor called the European Unions (EU). Tariffs for goods moving across borders from one EU country to another generally disappeared, and employees (with some exceptions) now find it easy to move freely between jobs in the EU countries. The introduction of a single currency—the euro—has further blurred many of these differences. The euro replaced the local currencies of most member countries in early 2002.By 2008, Union law will expand its current consultation practice to create create an ongoing consultation environment.
19 Intra-EU Differences Some countries have no minimum wages Workweeks varyMinimum number of annual holidaysTermination advance notice lengthPage 468Shown are some workweek limits in Greece and United KingdomMany countries have minimum wages while others don’t, and workweek hours permitted vary from no maximum in the United Kingdom to 48 per week in Greece and Italy. Other differences exist in minimum number of annual holidays, and minimum advance notice of termination. Employment contracts are another big difference. For most U.S. positions, written correspondence is normally limited to a short letter listing the date, job title, and initial compensation for the new hire.25 In most European countries, employers are usually required to provide a detailed statement of the job. The European Union, for instance, has a directive requiring employers to provide such a statement (including details of terms and conditions of work) within two months of the employee’s starting work.48 hoursEmployment contracts varyNo limit
20 Failure Rates of International Assignments International assignment failure can cost hundreds of thousands of dollarsPage 468Shown are the maximum failures of a country or region for international assignmentsInternational assignments are the heart of international HR, and it’s therefore disconcerting to see how often such assignments fail. U.S. expatriates’ assignments that end early (the failure rate) range from 16% to 50%, and the direct costs of each such failure can reach hundreds of thousands of dollars or more. European and Japanese multinationals reported lower failure rates, with only about one-sixth of Japanese multinationals and 3% of European multinationals reporting more than a 10% expatriate recall rate.
21 Why International Assignments Fail PersonalityPerson’s intentionsFamily pressuresLack of cultural skillsOther non-work conditions like living and housing conditions, and health carePage 469Discovering why such assignments fail is therefore an important research task, and experts have made considerable progress. Personality is one factor. For example, in a study of 143 expatriate employees, extroverted, agreeable, and emotionally stable individuals were less likely to want to leave early. And the person’s intentions are important: For example, people who want expatriate careers try harder to adjust to such a life. Non-work factors like family pressures usually loom large in expatriate failures: In one study, U.S. managers listed, in descending order of importance for leaving early: inability of spouse to adjust, managers’ inability to adjust, other family problems, managers’ personal or emotional immaturity, and inability to cope with larger overseas responsibility. Managers of European firms emphasized only the inability of the manager’s spouse to adjust as an explanation for the expatriate’s failed assignment. Other studies similarly emphasize dissatisfied spouses’ effects on the international assignment.One expert said:The selection process is fundamentally flawed Expatriate assignments rarely fail because the person cannot accommodate to the technical demands of the job. The expatriate selections are made by line managers based on technical competence. They fail because of family and personal issues and lack of cultural skills that haven’t been part of the process.
22 Improving Failure Rates/ Solutions Provide realistic previewsHave a careful screening processImprove orientationProvide good benefitsTest employees fairlyShorten assignment length32%23%Page 469Failure rates have dropped 9% over the last 10 years by stressing the items listed.
23 International Staffing Multinational corporations (MNC’s) use several types of international managers:LocalsExpatriatesHome-country nationalsThird-country nationalsPage 469Locals are citizens of the countries in which they work.Expatriates are non-citizens of the countries in which they’re working.Home-country nationals are citizens of the country in which the multinational corporation has its headquarters.Third-country nationals are citizens of a country other than the parent or host country; e.g., a British executive in the Tokyo branch of a US multinational bank.
24 Reasons to Hire Locals Working in a foreign country Cost Being a “better citizen”Short-term projectsSecurityPage 469There are several reasons to rely on local managers to fill your foreign subsidiary’s management ranks. Many people don’t want to work in a foreign country, and the cost of using expatriates is usually far greater than the cost of using local workers. Locals may view the multinational as a “better citizen” if it uses local management talent, and some governments even press for the “nativization” of local management. There may also be a fear that expatriates, knowing they’re posted to the foreign subsidiary for only a few years, may overemphasize short-term projects rather than more necessary long-term tasks.
25 Reasons to Use Expatriates Technical competenceKnow company cultureClimbing the corporate ladderPage 469The major reason is usually technical competence: In other words, employers often can’t find local candidates with the required technical qualifications. Multinationals also view a successful stint abroad as a required step in developing top managers. (For instance, after a term abroad, the head of General Electric’s Asia-Pacific region was transferred back to a top executive position as vice chairman at GE.) Control is another important reason to use expatriates. The assumption is that home-office managers are readily steeped in the firm’s policies and culture, and thus more likely to implement headquarters’ instructions and ways of doing things.
26 Avoiding Pitfalls in Hiring Multinationals Don’t rushAlways obtain originalsConfirm existence of institutionWrite or faxHave applicant sign and notarize documentsVerify foreign credentialsTelltale signs of fraudulent credentialsPage 470Don’t rush into accepting a credential if you have reservations. If you have any questions about a document, try to get the original.Confirm the existence of the institution through references such as the International Handbook of Universities, or the Commonwealth Universities Handbook. You can also call the appropriate foreign consulate or embassy in New York or Washington.Write or fax the institution named and enclose a copy of the document submitted for verification.If you must accept documents from countries not diplomatically related to the U.S. (such as Iran), have the applicant sign a form declaring that the document’s information is true and have his or her signature notarized.Verify the applicant’s foreign credentials even if the person is now transferring from a school in your country.Beware of telltale signs that may indicate fraudulent credentials: poor copies, stains over key information, type erasures, evidence of substituted names, credentials received too late to make proper verification possible, or typed material that’s added on at an angle, for instance.
27 Value Systems and Staffing Policies GeocentricPolycentricEthnocentricPage 471An ethnocentric run corporation believes that home-country attitudes, management style, knowledge, evaluation criteria, and managers are superior to anything the host country has to offer.The polycentric run firm believes that only host-country managers can ever really understand the culture of the host country.A geocentric run firm believes that the best manager of a specified position may be from any country in which the firm operates.Answer to Question:You staff with managers from your home country. Reasons given for ethnocentric staffing policies include lack of qualified host-country senior-management talent, a desire to maintain a unified corporate culture and tighter control, and the desire to transfer the parent firm’s core competencies (for instance, a specialized manufacturing skill) to a foreign subsidiary more expeditiously.If you were an executive manager in an ethnocentric run firm, who might you hire? Why?
28 Selecting International Managers Test for traits that predict success in adapting to new environmentsJob knowledge and motivationRelational skillsFlexibility and adaptabilityExtracurricular opennessFamily situationPredictive trait breakdownPage 472Selecting managers for these assignments therefore sometimes means testing them for traits that predict success in adapting to new environments. One study asked 338 international assignees from various countries and organizations to specify which traits were important for the success of managers on foreign assignment. The researchers identified five factors that contribute to success in such assignments: job knowledge and motivation, relational skills, flexibility/adaptability, extra-cultural openness, and family situation (spouse’s positive opinion, willingness of spouse to live a broad, and so on; the figure shows some of the specific items that make up each of the five factors).
29 Important Predictors of Success Family situation tops the listFlexibility/adaptability screening was high on resultsUse paper and pencil tests like the Overseas Assignment InventoryPreviewing what changes an international assignee can expectPage 472Many firms also use paper-and-pencil tests such as the Overseas Assignment Inventory. Based on 12 years of research with more than 7,000 candidates, the test reportedly identifies the characteristics and attitudes international assignment candidates should have. Realistic previews about the problems to expect in the new job (such as mandatory private schooling for the children) as well as about the cultural benefits, problems, and idiosyncrasies of the country are another important part of the screening process. The rule, say some experts, should always be to “spell it all out” ahead of time, as many multinationals do for their international transferees.
30 General Selection Procedures Use of structured interviews varies widely by country22.9 %10.3%54.8 %37.5%33 %17.1%12.1%10.3% in Italy12.1% in Sweden17.1% in Germany22.9% in France29.2% in Spain33% in the United Kingdom34.6% in the US37.5% in Hong Kong54.8% in Canada59.1% in Australia59.1%29.2 %34.6%Can you name each country?
31 The New Workplace: Sending Women Abroad Only 6% filled overseas positions compared to 49% domesticOne survey found inaccurate stereotypesNot as internationally mobileMight have a tougher time building teamsPage 473While the number and proportion of women managers working domestically has climbed in the past few years, the same isn’t true of those assigned abroad. Women filled only about 6% of the overseas international management positions at major companies, according to one estimate, compared with about 49% of domestic U.S. management positions. Women comprise only about 13% of the total expatriate population, according to another survey. Inaccurate stereotypes may account for much of this discrepancy. For example, a new survey (“Passport to Opportunity: U.S. Women in Global Business”) found that respondents believed women aren’t as internationally mobile as men; yet 80% of female expatriates say they’ve never turned down a relocation assignment, compared with 71% of men. Another myth is that women might have a tougher time building relationships with businesspeople overseas; yet 77% of U.S. women in this survey said they were effective at building businessrelationships with men abroad.Sending WomenManagers Abroad77% Effective at building teams80% Would take foreign assignment
32 Orienting and Training More form than substanceLittle or no systematic selection and trainingOnly 42% have formal briefingsPage 473When it comes to providing the orientation and training required for success overseas, the practices of most U.S. firms reflect more form than substance. One consultant says that despite many companies’ claims, there is generally little or no systematic selection and training for assignments overseas. In one survey, a sample of company executives agreed that international business required that employees be firmly grounded in the economics and practices of foreign countries. However, few of their companies actually provide such training to their employees. A survey of U.S. companies that assign employees abroad found that only 42% have a “formal program for briefing employees regarding conditions in the host country.”
33 What Special Training Do Overseas Candidates Need? Level 1Impact of cultural differencesUnderstanding attitude formationFactual knowledge about target countryLanguage and adjustment/adaptability skillsLevel 2Level 3Page 474Level 1 training focuses on the impact of cultural differences, and on raising trainees’ awareness of such differences and their impact on business outcomes. Level 2 aims at getting participants to understand how attitudes (both negative and positive) are formed and how they influence behavior. (For example, unfavorable stereotypes may subconsciously influence how a new manager responds to and treats his or her new foreign subordinates.) Level 3 training provides factual knowledge about the target country, while Level 4 provides skill building in areas like language and adjustment and adaptation skills.Level 4
34 Continued Training and Development IBM offers rotating assignmentsHave worldwide management development centersINSEAD in France provides educational opportunitiesPage 474Beyond these special training needs, managers abroad continue to need traditional training and development. At IBM, for instance, such development includes rotating assignments that permit overseas managers to grow professionally. IBM and other firms also have management development centers around the world where executives can hone their skills. And classroom programs (such as those at the London Business School, or at INSEAD in France) provide overseas executives the sorts of educational opportunities (to acquire MBAs, for instance) that similar stateside programs do for their U.S.-based colleagues.
35 Training Trends Trends in expatriate training and development: Use of cross-cultural trainingUse returning managers as resources for new assigneesSoftware and internet programs like Bridging Cultures for cross-cultural trainingPage 474There are several tends in expatriate training and development. First, rather than providing only predeparturecross-cultural training, more firms are providing continuing, in-country cross-cultural training during the early stages of an overseas assignment. Second, employers are using returning managers as resources to cultivate the “global mind-sets” of their home-office staff. For example, automotive equipment producer Bosch holds regular seminars in which newly arrived returnees pass on their knowledge and experience to relocating managers and their families. There’s also increased use of the software and the Internet for cross-cultural training. For example, Bridging Cultures is a self-training multimedia package for people who will be traveling and/or living overseas. It uses short video clips to introduce case study intercultural problems, and the guides users to selecting the strategy to best handle the situation.
36 International Compensation Determining international pay scales is no easy taskExpensive locales require additional pay else no one will take positionWhat to do when relocating to less costly localePage 475The whole area of international compensation presents some tricky problems. On the one hand, there is logic in maintaining company-wide pay scales and policies so that, for instance, divisional marketing directors throughout the world are paid within the same narrow range. This reduces the risk of perceived inequities, and dramatically simplifies the job of keeping track of disparate country-by-country wage rates. Yet not adapting pay scales to local markets can produce more problems than it solves. The fact is, it can be enormously more expensive to live in some countries (like Japan) than others (like Greece); if these cost-of-living differences aren’t considered, it may be almost impossible to get mangers to take “high-cost” assignments. However, the answer is usually not just to pay, say, marketing directors more in one country than in another. For one thing, you could get resistance when you tell a marketing director in Tokyo who’s earning $3,000 per week to move to your division in Spain, where his or her pay for the same job will drop by half (cost of living notwithstanding). One way to handle the problem is to pay a similar base salary company-wide, and then add on various allowances according to individual market conditions.Tokyo $3000/weekMadrid $1500/week
37 Determining Equitable Wages Lots of compensation data available in US but not overseasconducts an international study ofKRAFTcompensationPage 475Kraft conducts an annual study of total compensation in Belgium, Germany, Italy, Spain, and the United Kingdom. It focuses on the total compensation paid to each of 10 senior-management positions held by local nationals in these firms. The survey covers all forms of compensation including cash, short- and long-term incentives, retirement plans, medical benefits, and perquisites. This information becomes the basis for annual salary increases and proposed changes in the benefits package.Used to determine next year’s compensation
38 Balance Sheet Approach 85% of US firms use itHas 4 main home-country expense groups:Income taxesHousingGoods and servicesDiscretionary expensesExpatriate receives base pay + additional for each groupSample balance sheet approachPage 476The most common approach to formulating expatriate pay is to equalize purchasing power across countries, a technique known as the balance sheet approach. In practice, this usually boils down to building the expatriate’s total compensation around five or six separate components. For example, base salary will normally be in the same range as the manager’s home-country salary. In addition, however, there might be an overseas or foreign service premium. The basic idea is that each expatriate should enjoy the same standard of living he or she would have had at home. With the balance sheet approach, four main home-country groups of expenses—income taxes, housing, goods and services, and discretionary expenses (child support, car payments, and the like)—are the focus of attention. The employer estimates what each of these four expenses is in the expatriate’s home country, and what each will be in the host country. The employer then pays any differences—such as additional income taxes or housing expenses.In practice, this usually boils down to building the expatriate’s total compensation around five or six separate components. For example, base salary will normally be in the same range as the manager’s home-country salary. In addition, however, there might be an overseas or foreign service premium.
39 IncentivesTo have expatriates accept and stay on international assignments:Foreign service premiumsHardship allowancesMobility premiumsNon-monetary rewardsPage 476Foreign service premiums Financial payments over and above regular base pay, typically ranging between 10% and 30% of base pay.Hardship allowances Compensate expatriates for exceptionally hard living and working conditions at certain locations.Mobility premiums Typically, lump-sum payments to reward employees for moving from one assignment to another.Non-monetary rewards Perhaps state-of-the-art training and development programs
40 Performance Appraisals Who appraises the expatriate is keyStipulate the assignment’s difficulty levelFavor the on-site manager’s appraisalHome-office manager writing the appraisal consults a former expatriateModify the normal performance criteriaPage 477Stipulate the assignment’s difficulty level. Most would view being an expatriate manager in China more difficult than working in England; the appraisal should take into account such difficulty-level differences. Weigh the evaluation more toward the on-site manager’s appraisal than toward the home-site manager’s distant perceptions of the employee’s performance. If (as is usually the case) the home-office manager does the actual written appraisal, have him or her use a former expatriate from the same overseas location for advice. This helps ensure consideration of unique local issues during the appraisal.Modify the normal performance criteria used for that particular position to fit the overseas position. For example, “maintaining positive labor relations” might be more important in Chile, where labor instability is more common, than in the United States.
41 International Labor Relations Union membership varies widely worldwide24%29%80%39%44%Page 477Firms opening subsidiaries abroad will find substantial differences in labor relations practices among the world’s countries and regions. This is important; remember that while union membership as a percentage of wage and salary earners is dropping in the U.S., it is still relatively high in most countries compared with the United States’ 14%: for example, Brazil, 44%; Argentina, 39%; Germany, 29%; Denmark, 80%; Japan, 24%; Egypt, 39%; and Israel, 23%.39%23%14%
42 International Labor Relations Continued Areas of differences in labor relations practices include:CentralizationUnion structureEmployer organizationUnion SecurityContent and scope of bargainingGrievance handlingStrikesWorker participationPage 478Centralization. In general, collective bargaining in Western Europe is likely to be industry-wide or regionally oriented, whereas in the U.S. it generally occurs at the enterprise or plant level.Union structure. European collective bargaining is more centralized, and local unions tend to have less autonomy and decision-making power than in the United States.Employer organization. Due to the prevalence of industry-wide bargaining in Europe, employer associations (rather than individual employers) tend to perform the employer’s collective bargaining role.Union recognition. Union recognition for collective bargaining in Western Europe is much less formal than in the United States. For example, in Europe there is no legal mechanism requiring an employer to recognize a particular union; even if a union claims to represent 80% of an employer’s workers, another union can try to organize and bargain for the other 20%.Union security. Union security in the form of formal closed-shop agreements is largely absent in continental Western Europe.Content and scope of bargaining. U.S. labor/management agreements tend to focus on wages, hours, and working conditions. European agreements tend to be brief and to specify minimum wages and employment conditions, with individual employers free to institute more generous terms. This is because industry-wide bargaining makes it difficult to write detailed contracts applicable to individual enterprises. And in Europe, the government is heavily involved in setting terms of employment (such as vacations and working conditions).Grievance handling. In Western Europe, grievances occur much less often than in the U.S.; when raised, legislated machinery outside the union’s formal control usually handles them.Strikes. With some exceptions, strikes generally occur less frequently in Europe. This is probably due to industry-wide bargaining, which generally elicits less management resistance than in the United States, where union demands “cut deeper into the individual enterprise’s revenues.”Worker participation. Worker participation has a long history in Western Europe, where it tends to go far beyond matters such as pay and working conditions. The aim is to create a system by which workers can participate directly in the management of the enterprise. Works councils and codetermination are two examples.
43 Safety and Fair Treatment Abroad Raises some unique safety issuesProvide general trainingBlend inArrive at airports at departure timeSecurity systemsVary departure/arrival times and routes to workPage 479 Provide expatriates with general training about traveling, living abroad, and the place they’re going to, so they’re more oriented when they get there. Tell them not to draw attention to the fact they’re Americans—by wearing flag emblems or T-shirts with American names, or by using American cars, for instance. Have travelers arrive at airports as close to departure time as possible and wait in areas away from the main flow of traffic where they’re not as easily observed. Equip the expatriate’s car and home with adequate security systems. Tell employees to vary their departure and arrival times and take different routes to and from work.
44 Safety and Fair Treatment Abroad Keep current on crime and other problemsRemain confident at all timesCompanies working to combat AIDSPage 479 Keep employees current on crime and other problems by regularly checking, for example, the State Department’s travel advisory service and consular information sheets. These provide up-to-date information on possible threats in almost every country of the world. Advise employees to remain confident at all times: Body language can attract perpetrators, and those who look like victims often become victimized.As another matter, firms like Coca-Cola and Exxon increasingly acknowledge that the AIDS epidemic can have devastating effects on the citizens of many of the countries in which they do business—and on their local employees. Thus, Exxon is providing HIV prevention education for employees, and Chevron donated $250,000 in medical supplies for state-of-the-art blood testing.
45 HR.net – HR Information Systems DefinitionHRIS is an automated system by which interrelated components work together to collect, process, store, and disseminate information to support decision- making, coordination control, analysis, and visualization of an organization’s human management activitiesPage 479
46 HRIS Benefits Get an accurate head count of employees worldwide Select for overseas assignmentKeep track of pay plans and benefitsIntegrate and update HR systems and reportsMonitor global HR activities in real timePage 479Integrating and updating a firm’s HR systems, particularly in a global firm, makes an Internet-based HRIS specifically beneficial. For example, when Buildnet, Inc., decided to integrate its separate HR systems, it chose a Web-based software package called MyHRIS, from NuView, Inc. (www.nuviewinc.com). This is an Internet-based system that includes human resource and benefits administration, applicant tracking and résumé scanning, training administration, and succession planning and development. With MyHRIS, managers at any of the firm’s locations around the world can access and update more than 200 built-in reports such as “termination summary” or “open positions.”
47 Repatriation Problems 50% leave within 2 yearsLeaving the firm prematurelyMediocre or makeshift jobsFinding former colleagues promotedReverse culture shockPage 480Effectively repatriating returning employees is important. Particularly after companies spend hundreds of thousands of dollars helping the person develop international expertise, it’s disconcerting to know that perhaps 50% of returnees leave their companies within two years of coming home. expatriates often fear they’re “out of sight, out of mind” during an extended foreign stay, and such fears are often well founded. Many firms hurriedlyassign returning expatriates to mediocre or makeshift jobs. Perhaps more exasperating is discovering that the firm has promoted the expatriate’s former colleagues while he or she was overseas. Even the expatriate’s family may undergo a sort of reverse culture shock, as they face the task of picking up old friendships and starting new schools, and giving up the perks of the over overseas job, like a company car and driver.Consider one employee’s plight. After a 5-year work assignment overseas that entailed much responsibility and a dynamic environment, Scott Fedje returned home to a cubicle, an intellectually non stimulating project, and a whole month to make a single decision. He resigned a few months later.
48 Repatriation Solutions Shorten time abroad – have written agreementAssign a sponsorProvide career counselingKeep communications openDevelop reorientation programsHave returnees advise future expatriatesPage 480Have written repatriation agreements. These guarantee in writing that the international assignee will not be kept abroad longer than some period (such as three years), and that on return he or she will be given a mutually acceptable job. Many firms, including Dow Chemical and Union Carbide, use such repatriation agreements.Assign a sponsor. The employee should get a sponsor (such as a senior manager at the parent firm’s home office) whose role is to look after the expatriate while he or she is away. This includes keeping the person apprised of significant company events and changes back home, monitoring his or her career progress and interests, and nominating the person for key openings when he or she is due to come home.Provide career counseling. Formal career counseling sessions can ensure that the returnee’s new job assignments meet his or her needs.Keep communications open. Keep the expatriate “plugged in” to home-office business affairs by providing management meetings around the world, frequent home leave combined with stays at headquarters for specific projects, and regularly scheduled meetings at headquarters.Develop reorientation programs. Provide the repatriate and his or her family with a reorientation program to facilitate their adjustment back into the home culture.Have returnees advise future expatriates and manage projects involving their former host country
49 Strategic HR – Seimens Basic HR Strategy A living company is a learning companyGlobal teamwork is the key to realizing potentialRedefine management to meet globalization challengesA climate of mutual respectPage 481When Siemens celebrated its 150th anniversary recently, it was, according to its president, “a perfect occasion to analyze the enduring qualities that helped us survive so long—and identify what we must have to succeed in the future.” As part this review, one of the central questions was: Which human resource strategies will ensure that Siemens’s people—and the company—can succeed in tomorrow’s challenging global environment?1. A living company is a learning company. The technological and competitive markets in which Siemens does business are evolving, and the firm’s HR processes therefore have to enable employees to learn on a continuing basis. Siemens therefore uses its system of combined classroom and hands-on apprenticeship training around the world.2. Global teamwork is the key to developing and using all the potential of the firm’s human resources. At Siemens, teamwork “means breaking down all the traditional barriers within the corporate world”—employees must be able to work across divisions, across disciplines, and across regions. This means employees have to understand the whole process, not just bits and pieces. This in turn means Siemens employees have to assume more responsibility, which in turn means the firm must provide extensive training and development so its employees can handle added responsibilities.3. Redefined management to meet the challenges of globalization. To help it do this, Siemens instituted regular strategic performance assessments that encourage each employee to develop his or her potential.4. Long-term growth and profitability depend on achieving a balance of interests. Building shareholder value is important, but “we can be profitable only with creative, satisfied, and highly motivated people.”5. A climate of mutual respect is the basis of all relationships—within the company and with society. At Siemens (and at other firms), it’s not realistic to believe you can build a skilled, motivated, creative, and contented workforce without a culture of mutual respect.GrowthProfit
50 Strategy and Strategic HR DefinitionStrategic human resource management is the linking of HRM with strategic goals and objectivesHR strategies are the courses of action the company usesPages 481-2Strategic human resource management is “the linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility.” HR strategies are the courses of action the company uses to achieve its strategic aims.
51 Management Values and Philosophy Do your assumptions and values influence your decisions?How do organizations demonstrate their philosophy?Page 482Instructor’s note:The questions on the slide are good discussion-starters. Ask students to define a value or describe values they hold and why they hold them. Note: a value is a belief system that is chosen freely from among alternatives, is cherished and acted upon by the holder of the value.It would be nice to believe that all strategies are products of an entirely objective thought process, but that’s not usually the case. People always base their actions in part on the assumptions they make and the values they hold, and that certainly applies to management strategizing. For example, an ethnocentric manager may view an opportunity to expand abroad with some skepticism, while a geocentric manager seizes the same opportunity. The same applies to how managers approach their HR-related responsibilities. Decisions about the people you hire, the training you provide, the procedures you institutionalize, and your leadership style won’t just reflect the objective demands of the situation. Instead, they’ll be influenced by the basic assumptions you make about people—Can they be trusted? Do they dislike work? Can they be creative? Why do they act as they do? Your decisions will reflect your basic people philosophy.
52 Employee Commitment Definition Employee commitment - An employee’s identification with and agreement to pursue the company’s or the unit’s missions—to act like an owner rather than as an employeeGood managers use employee commitment as their guidePage 482Today’s focus on teamwork, empowerment, and flatter organizations puts a premium on self-control, or on what some experts call organizational citizenship behavior—“discretionary contributions that are organizationally related, but are neither explicitly required nor contractually rewarded by the organization, yet nevertheless contribute to its effective functioning.” You need committed, self-directed employees to excel at today’s jobs.
53 Commitment Building Establish people-first values Guarantee fair treatmentUse value-based hiringEncourage employees to actualizePage 483Establish people-first values. As one Saturn manager said, “you start the process of boosting employee commitment by making sure you know how you and your top managers really feel about people.” Managers in firms like these commit to the idea that their employees are their most important assets and must be trusted, treated with respect, and encouraged to grow and reach their full potential. The FedEx’s managers’ guide states: “I have an inherent right to be treated with respect and dignity and that right should never be violated.”Guarantee fair treatment. As we saw earlier in this book, firms like FedEx have comprehensive grievance procedures that help to ensure fair treatment of all employees. Toyota’s in-plant “Hotline” gives team members a 24-hour channel for bringing questions or problems to management attention.Use value-based hiring. Ben & Jerry’s uses tests, interviews, and background checks to screen out managers who don’t share the firm’s social goals. Toyota screens out non-team players, and Goldman Sachs emphasizes integrity. At FedEx, prospective supervisors who don’t fit with the firm’s people-first values get screened out by their subordinates before moving into management.Encourage employees to actualize. Many of these firms engage in practices that aim to ensure all employees have an opportunity to use all their skills and gifts at work and become all they can be.
54 SaturnI’m committed to Saturn for what they did for me; 300 plus hours of training and problem solving that expanded my personal horizon; the “Excel” program that pushes me to the limit; and because I know that at Saturn I can go as far as I can go. This company wants its people to be all that they can be.Page 483
55 Auditing the HR Function Process involves 5 questioning steps:RateHow important is each function?DefineWhat should our HR functions be?GradeHow well are functions performed?ImproveWhat needs improvement?Page 483You can use several approaches to do this. One expert suggests conducting an HR review aimed at tapping the opinions of HR and line managers regarding the HR function’s effectiveness. The review basically involves series of surveys, followed by analyses, discussions, and (where necessary) decisions about new ways to proceed. The process involves five steps: (1) HR and line managers answer the question “What should HR’s functions be?” (2) Participants then rate each of these functions on a 10-point scale to answer the question “How important are each of these functions?” (3) Next, they answer the question “How well are each of the functions performed?” (4) Here, discussions focus on “What needs improvement?” (5) Then, top management needs to answer the question, “How effectively does the HR function use its resources? In other words, are there steps that we can take—such as creating a centralized HR call center, or putting more HR activities on the Web—that can improve how our firm uses its HR resources?”FeedbackHow effectively does each use resources?
56 Chapter 16 Summary Firms must be managed globally Challenges include: coordinating production, sales, and financial operations on a worldwide basisIntercountry differencesPage 484International business is important to almost every business today so firms must be managed globally.Challenges include coordinating production, sales, and financial operations on a worldwide basis.Inter-country differences affect a company’s HR management processes.
57 Chapter 16 Summary A large percentage of expatriate assignments fail Screening for expatriate managers look for traits like:Adaptability and flexibilityCultural toughnessSelf-orientationEtc.Page 484A large percentage of expatriate assignments fail, but the batting average can be improved through careful selectionScreening for expatriate managers look for traits like adaptability and flexibility, cultural toughness, self-orientation, job knowledge and motivation, relational skills, extra-cultural openness, and family situation
58 Chapter 16 SummaryTraining for overseas managers typically focuses on cultural differences and other factors.Can you name some?The need to have both local and home-office supervisors provide input into the performance appraisalPage 484Instructor’s notes:Training for overseas managers typically focuses on cultural differences, on how attitudes influence behavior, and on factual knowledge about the target country.The expatriate appraisal process can be complicated by the need to have both local and home-office supervisors provide input into the performance review.
59 Chapter 16 SummaryCan you name some common repatriation problems and how to avoid them?Strategic human resource management“…the linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility”The End!Page 485Instructor’s notes:Repatriation problems include: the often well-founded fear that the expatriate is “out of sight, out of mind” and difficulties in re-assimilating the expatriate’s family back into the home-country culture.Suggestions for avoiding these problems include using repatriation agreements, assigning a sponsor, offering career counseling, keeping the expatriate plugged in to home-office business, providing financial support to maintain the expatriate’s home country residence, and offering reorientation programs to the expatriate and his orher family.