Human Resource Management Management is the art of getting things done through people, and things get done better with the right people.

Human Resource Management  Set of activities directed at attracting, developing, and maintaining the effective workforce necessary to achieve a firm’s objective

Planning – what people will we need? Job Analysis Forecasting Recruiting Selecting Recruiting – how do we get them? Retaining –how do we keep them? Wages, Salary, Benefits Job Enrichment Training –keep‘em up to speed? Training & Development Performance Appraisals Human Resource Management Goals

International Human Resource Management  Differences in culture, levels of economic development, and legal systems among countries make the task more complex for international HR managers. –Selecting –Training –Compensation and benefits

International Human Resource Management  Select staff from home country, host country, or third country?

International Managerial Staffing Needs  Staffing Categories –Managerial and Executive Employees –Non-managerial Employees

Scope of Internationalization  Size of staffing tasks depends on scope of firm’s international involvement –Export department –International division –Global organization

Centralization versus Decentralization of Control  Centralized firms –Favor home country managers –Most common among international division form  Decentralized firms –Favor host country managers –Most common among multidomestic firms

Staffing Philosophy  Parent Country Nationals (PCNs)  Host Country Nationals (HCNs)  Third Country Nationals (TCNs)

Strategies for Staffing  Ethnocentric staffing model – PCNs in upper-level positions  Polycentric staffing model – HCNs because they know the market best  Geocentric staffing model – choose the most qualified people regardless of nationality

Necessary Skills and Abilities for International Managers Skills and Abilities Necessary to Do The Job Technical Functional Managerial Skills and Abilities Necessary to Work In a Foreign Location Adaptability Location-specific skills Personal characteristics Improved Chances of Succeeding in An International Job Assignment

Recruitment  Experienced Managers – hired from within or via specialized headhunters.  Younger Managers – perhaps with specialized technical training or language skills. Can be “groomed” for foreign assignments.

Managerial Selection  Good candidates have: –Managerial competence –Appropriate training –Ability to adapt to new situations  Expatriate failure has a high cost!

Questions from AT&T’s Questionnaire for Screening Overseas Transferees_1  Would your spouse be interrupting a career to accompany you on an international assignment? If so, how do you think this will affect your spouse and your relationship with each other?  Do you enjoy the challenge of making your own way in new situations?  Securing a job upon reentry will be primarily your responsibility. How do you feel about networking and being your own advocate?  How able are you in initiating new social contacts  Can you imagine living without a television?

Questions from AT&T’s Questionnaire for Screening Overseas Transferees_2  How important is it for you to spend significant amounts of time with people of your own ethnic, racial, religious, and national background?  As you look at your personal history, can you isolate any episodes that indicate a real interest in learning about other peoples and cultures?  Has it been your habit to vacation in foreign countries?  Do you enjoy sampling foreign cuisine?  What is your tolerance for waiting for repairs?

Culture Shock Psychological phenomenon that may lead to feelings of fear, helplessness, irritability, and disorientation

Phases in Acculturation Honeymoon Disillusionment Adaptation Biculturalism

Honeymoon Phase  New culture seems exotic and stimulating  Excitement of working in new environment makes employee overestimate ease of adjusting  Lasts for first few days or months

Disillusionment Phase  Differences between new and old environments are blown out of proportion  Challenges of everyday living  Many stay stuck in this phase

Adaptation Phase  Employee begins to understand patterns of new culture  Gains language competence  Adjusts to everyday living

Biculturalism  Anxiety has ended  Employee gains confidence in ability to function productively in new culture  Repatriation may be difficult

Overseas Success  Likelihood of managers being successful at overseas assignment increases if the managers –Can freely choose whether to accept or reject the assignment –Have been given a realistic preview of the job and assignment –Have been given a realistic expectation of what their repatriation assignment will be –Have a mentor back home who will guard their interests and provide support –See a clear link between the expatriate assignment and their long-term career path

Training and Development  Assessing training needs  Basic training methods –Standardized –Customized  Developing younger managers

Performance Appraisal  Process of assessing how effectively people are performing their jobs  Purpose –To provide feedback to individuals about how well they are doing –To provide a basis for rewarding top performers –To identify areas in which additional training and development may be needed –To identify problem areas that may call for a change in assignment

Compensation Packages  Include salary and nonsalary items  Determined by –Labor market forces –Occupational status –Professional licensing requirements –Standards of living –Government regulations –Tax codes

Annual Cost of Living in Selected Locations Worldwide, 2003 RankCityIndexRankCityIndex 1Tokyo, Japan Shanghai, China98.4 2Moscow, Russia St. Petersburg, Russia97.3 3Osaka, Japan Oslo, Norway92.7 4Hong Kong Hanoi, Vietnam89.5 5Beijing, China Copenhagen, Denmark89.4 6Geneva, Switzerland Ho Chi Minh City, Vietnam London, UK Milan, Italy87.2 8Seoul, South Korea Shenzhen, China86.7 9Zurich, Switzerland Guangzhou, China New York City, USA White Plains, NY, USA86.2

Differential Compensation  Cost-of-living allowance  Hardship premium or foreign-service premium  Tax equalization system

Labor Relations  Labor relations in a host country often reflects laws, culture, social structure, and economic conditions  Union membership may be high