1. Human Resource Management in Global Markets

2. Why is expatriate management important?
1 out of 3 expatriates return early
$55,000-$250,000 per failure
$2 billion annually
diminished self-esteem
interrupted careers
lost market share
reductions in productivity

3. Issues of Human Resource Management
Selection
Training
Compensation
Adjustment
Repatriation Process

4. 1. Selection Parent Country Nationals Host Country Nationals
Third Country Nationals

5. 1. Selection (Cont.) Advantages of PCN Have technical expertise
Familiar with corporate culture
Access to performance information
Loyalty
Communication with headquarters
Managerial development

6. 1. Selection (Cont.) Disadvantages of PCN Expensive
Face cultural learning curve
Unfamiliar with foreign environment
Government restrictions

7. 1. Selection (Cont.) Advantages of HCN Familiar with local culture
More adept at motivating workers
Less expensive
Good for public relations

8. 1. Selection (Cont.) Disadvantages of HCN
Difficult to assess abilities before hiring
Not familiar with corporate culture
May be difficult to fire or lay-off
Communication with home office
May lack certain technical skills
Loyalty may be to country not to company

9. 1. Selection (Cont.) Advantages of TCN Broad international experience
Greater cultural empathy
May adapt to new environment faster
Cultural distance may be less
Often less expensive than parent country nationals

10. 1. Selection (Cont.) Disadvantages of TCN Host government perception
Expensive
May not have previous performance information
May not be familiar with corporate culture
Communication difficulties

11. 1. Selection (Cont.) Selection Criteria
Cultural empathy / relational skills
Ability to adapt to new environments
Independence and self-reliance
Language training
Adaptability of spouse and dependents
Technical expertise
Motivation for a foreign assignment

12. 2. Training Cultural orientation Language training Business practices
Social etiquette
Political environment

13. 3. Compensation Cultural Issues Differentials/COLA Taxation
Foreign service premium/Incentives
Assistance programs

14. 3. Compensation Ranking list of motivators Motivator USA Germany Japan
3. Compensation
Ranking list of motivators
Motivator
USA
Germany
Japan
Money 2 1 5
Interesting and challenging job 3
Job security 4
Good match between job requirements and qualification
Clearly defined tasks 8
Good personal atmosphere 7 6
Chance to acquire new skills 9
Chance to advance 10 11
(Mead, R. 2013:International Management. Oxford: Malden)

15. Phases of Culture Shock
4. Adjustment
Phases of Culture Shock
The honeymoon
Culture shock
Adjustment
Mastery

16. 4. Adjustment Phases of Culture Shock Healthy Well-being Pathological
Honeymoon
Culture Shock
Adjustment
Mastery

17. 4. Adjustment (Cont.)
Factors influencing ease and speed of adjustment:
Training
Family
Social Support
Cultural Distance / Novelty
Job Novelty

18. 5. Repatriation Process
Often overlooked by HR department and employees
Reentry adjustment
Financial adjustment
Social changes

19. 5. Repatriation Process (Cont.)
Some numbers on returning expatriates:
10% are promoted upon return
80% feel experience is not valued
50% don’t like new job
18% leave within 18 months
40% leave within 3 years
experience valued in labor market