3International HRMThe management of human resources in global corporationsThe management of expatriate employeeThe comparison of human resource management practices in different countries
4Factors Influencing Staffing: Company Ownership of Foreign SubsidiariesTechnologyMarket InfluencesOrganizational StructureCommitment to International BusinessStyle of Management
5Factors Influencing Staffing: Individuals Qualifications and ExperienceRecord of Previous PerformanceCommitment to International BusinessSuitability for International BusinessFamily Commitment
6Factors Influencing Staffing: Host-Country Level of Economic and Technological DevelopmentPolitical StabilityControl of Foreign InvestmentAvailability of Qualified PersonnelSociocultural SettingGeographical Location
7Factors Differing IHRM from HRM Different Labor MarketsInternational Mobility ProblemsNational Management Styles and PracticesNational OrientationsStrategy and Control
8Types 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.
9Types 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.
10Types 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.
11Maintaining a Globalization Momentum Through a Global Staffing Policy (Exhibit 9-1) Top managementcommitmentBariersSearch for globaloperatorsStaff transfersInt’l teamGlobalstaffingpolicyGlobalizationMomentumMomentumMaintainedStaff availabilityTime and cost constraintsHost government requirementsHRM policies
12Recruitment and Selection: Classifying Employees Parent Country National (PCN): The employee’s nationality is the same as the organization’sHost Country National (HCN):The employee’s nationality is the same as the location of the subsidiaryThird Country National (TCN): The employee’s nationality is neither that of the organization nor that of the location of the subsidiary
13Recruitment and Selection College RecruitmentManagement InventoriesAdaptability Assessment
14SELECTION CRITERIA FOR INTERNATIONAL ASSIGNMENTS Spouses and DependentsIndependence and Self-RelianceAdaptability to Cultural ChangeLeadership AbilityCommunicationSkillsTechnicalCompetenceSELECTION CRITERIA FOR INTERNATIONAL ASSIGNMENTSAge, Experience, and EducationMotivation for a Foreign AssignmentPhysical and Emotional Health
15The Compensation Issue The major reason for the decline in the number of expatriates in recent years is because of the large expenses involved
16Compensation: Expatriate MNEs must pay enough to attract people to move but must not overpayCost of livingJob-status paymentForeign-service premiums and hardship allowancesComplications of nationality differences
17Components of an Expatriate Compensation Package SalaryHome rate/home currencyLocal rate/local currencySalary adjustments or promotions – home or local standardBonus – home or local currency, home or local standardStock optionsInducement payment/hardship premium – percentage of salary or lump sum payment, home/local currencyCurrency protection – discretion or split basisGlobal salary and performance structures
18Components of an Expatriate Compensation Package (contd.) TaxationTax protectionTax equalizationOther servicesBenefitsHome-country programLocal programSocial Security program
19Components of an Expatriate Compensation Package (contd.) AllowancesCost-of-living allowancesHousing standardEducationRelocationPerquisitesHome leaveShipping and storage
20Cost of Living In Select Cities TokyoHong KongLondonMoscowNew YorkSao PauloAthensMexico CityPragueDelhi
21Common Elements in an Expatriate Compensation Package 1. In the US this was around $175,000 for upper-middle managers in the late-1990’s2. Extra vacation time, paid airfare for annual visit home, emergency leave….3. Cost-of-living, relocation, housing, education, and hardship4. Two tax bills, from the host country and the U.S.5. One-time, lump sum premium.
22Compensation: Labor Importance of Differences Fringe Benefits MNEs may need to pay more than local companies to entice workers from existing jobsFringe BenefitsFringe benefits vary substantially among countriesJob-Security BenefitsLiability for InjuriesHow to CompareLabor-Cost Dynamics
23Cross-Cultural Training: Purposes Encourage sensitivityIncrease the cross-cultural skillsPromote awareness of underlying values of a cultureReduce culture shockBuild rapport, trust, and confidenceImprove managerial effectivenessImprove customer and employee relationships
24TrainingCultural 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.
25Training Techniques (as classified by Tung) Area studies, that is, documentary programs about the country’s geography, economics, sociopolitical history, and so forthCulture assimilators, which expose trainees to the kinds of situations they are likely to encounter that are critical to successful interactionsLanguage trainingSensitivity trainingField experiences – exposure to people from other cultures within the trainee’s own country.
26Cross-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.
27Cross-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.
28Cross-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.
29Training Program Design Process Strategic GoalsGoals of TrainingDelivery SystemMethodologiesNeeds AnalysisSyllabusMaterials DesignResource AnalysisPast EvaluationProgram ImplementationEvaluation