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Staffing and Training for Global Operations Chapter 9.

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Presentation on theme: "Staffing and Training for Global Operations Chapter 9."— Presentation transcript:

1 Staffing and Training for Global Operations Chapter 9

2 Human Resource Management Appraising Training Compensating Hiring

3 International HRM The management of human resources in global corporations The management of expatriate employee The comparison of human resource management practices in different countries

4 Factors Influencing Staffing: Company Ownership of Foreign Subsidiaries Technology Market Influences Organizational Structure Commitment to International Business Style of Management

5 Factors Influencing Staffing: Individuals Qualifications and Experience Record of Previous Performance Commitment to International Business Suitability for International Business Family Commitment

6 Factors Influencing Staffing: Host-Country Level of Economic and Technological Development Political Stability Control of Foreign Investment Availability of Qualified Personnel Sociocultural Setting Geographical Location

7 Factors Differing IHRM from HRM Different Labor Markets International Mobility Problems National Management Styles and Practices National Orientations Strategy and Control

8 Types of Staffing Policy: The Ethnocentric Approach All key management positions are filled by parent-country nationals (PCNs). Overcomes lack of qualified managers in host country. Maintain a unified corporate culture. Helps transfer core competencies. Produces resentment in host country. Can lead to cultural myopia.

9 Types of Staffing Policy: The Polycentric Approach Host-country nationals (HCNs) manage subsidiaries, while parent-country nationals occupy key positions at headquarters. Alleviates cultural myopia. Inexpensive to implement. Limits career mobility. Isolates headquarters from foreign subsidiaries.

10 Types of Staffing Policy: The Global Approach Seeks the best people for key jobs throughout the organization, regardless of nationality. Greater pool of qualified candidates. Uses human resources efficiently. Helps build strong culture and informal management network. Immigration policies may limit implementation. Expensive.

11 Maintaining a Globalization Momentum Through a Global Staffing Policy (Exhibit 9-1) Top management commitment Search for global operators Staff transfers Int’l team Globalization Momentum Global staffing policy Momentum Maintained Staff availability Time and cost constraints Host government requirements HRM policies BarriersBarriers

12 Recruitment and Selection: Classifying Employees Parent Country National (PCN): The employee’s nationality is the same as the organization’s Host Country National (HCN):The employee’s nationality is the same as the location of the subsidiary Third Country National (TCN): The employee’s nationality is neither that of the organization nor that of the location of the subsidiary

13 Recruitment and Selection College Recruitment Management Inventories Adaptability Assessment

14 SELECTION CRITERIA FOR INTERNATIONAL ASSIGNMENTS Independence and Self-Reliance Age, Experience, and Education Communication Skills Spouses and Dependents Leadership Ability Physical and Emotional Health Adaptability to Cultural Change Motivation for a Foreign Assignment Technical Competence

15 The Compensation Issue The major reason for the decline in the number of expatriates in recent years is because of the large expenses involved

16 Compensation: Expatriate MNEs must pay enough to attract people to move but must not overpay Cost of living Job-status payment Foreign-service premiums and hardship allowances Complications of nationality differences

17 Components of an Expatriate Compensation Package Salary Home rate/home currency Local rate/local currency Salary adjustments or promotions – home or local standard Bonus – home or local currency, home or local standard Stock options Inducement payment/hardship premium – percentage of salary or lump sum payment, home/local currency Currency protection – discretion or split basis Global salary and performance structures

18 Components of an Expatriate Compensation Package (contd.) Taxation Tax protection Tax equalization Other services Benefits Home-country program Local program Social Security program

19 Components of an Expatriate Compensation Package (contd.) Allowances Cost-of-living allowances Housing standard Education Relocation Perquisites Home leave Shipping and storage

20 Cost of Living In Select Cities Tokyo Hong Kong London Moscow New York Sao Paulo Athens Mexico City Prague Delhi

21 Common Elements in an Expatriate Compensation Package 1. In the US this was around $175,000 for upper- middle managers in the late-1990’s 2. Extra vacation time, paid airfare for annual visit home, emergency leave…. 3. Cost-of-living, relocation, housing, education, and hardship 4. Two tax bills, from the host country and the U.S. 5. One-time, lump sum premium.

22 Compensation: Labor Importance of Differences –MNEs may need to pay more than local companies to entice workers from existing jobs Fringe Benefits –Fringe benefits vary substantially among countries –Job-Security Benefits –Liability for Injuries –How to Compare –Labor-Cost Dynamics

23 Cross-Cultural Training: Purposes Encourage sensitivity Increase the cross-cultural skills Promote awareness of underlying values of a culture Reduce culture shock Build rapport, trust, and confidence Improve managerial effectiveness Improve customer and employee relationships

24 Training Cultural Training seeks to foster an appreciation of the host country’s culture. Language Training helps build rapport with local employees and improve manager’s effectiveness. Practical Training is aimed at helping the expatriate manager and the family ease themselves into day-to-day life in the host country.

25 Training Techniques (as classified by Tung) Area studies, that is, documentary programs about the country’s geography, economics, sociopolitical history, and so forth Culture assimilators, which expose trainees to the kinds of situations they are likely to encounter that are critical to successful interactions Language training Sensitivity training Field experiences – exposure to people from other cultures within the trainee’s own country.

26 Cross-Cultural Training Rigor: Low Technique: Lectures, videotapes, reading background material. Objectives: Provide background information on host country business and national culture, basic information on company operation.

27 Cross-Cultural Training Rigor Technique: Intercultural experiential learning exercises, role playing, simulations, case studies, survival language training. Objectives: Build general and specific knowledge of host country culture, reduce enthocentrism.

28 Cross-Cultural Training Rigor: High Technique: Field trips to host country, meeting with managers experienced in host country, meeting with host country national, intensive language training. Objectives: Develop comfort with host country national culture, business culture, and social institutions.

29 Training Program Design Process Strategic Goals Goals of Training Needs Analysis Resource Analysis Past Evaluation Evaluation Delivery System Syllabus Methodologies Materials Design Program Implementation

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