2 Causes of Expatriate Assignment Failure Family adjustmentLifestyle issuesWork adjustmentBad selectionPoor performanceOther opportunities ariseBusiness reasonsRepatriation issues
3 Training and Development Essential training program content to prepare employees for working internationally:Language trainingCultural trainingAssessing and tracking career developmentManaging personal and family lifeRepatriationCulture shockPerpetual stress experienced by people who settle overseas.
4 Preparing for an International Assignment To prepare for an international assignment, one should become acquainted with the following aspects of the host country:Social and business etiquetteHistory and folkloreCurrent affairs, including relations between the host country and the United StatesCultural values and prioritiesGeography, especially its major citiesSources of pride and great achievements of the cultureReligion and the role of religion in daily lifePolitical structure and current playersPractical matters such as currency, transportation, time zones, and hours of businessThe language
5 Training MethodsReviewing available information about the host company: books, magazines, video tapes.Conversations with host country natives.Sensitivity training to become familiar with the customs and overcome prejudices.Temporary assignments to encourage shared learning.
6 Assessing and Tracking Career Development Developmental and Career Advantages of an International Assignment:Increases the expatriate’s responsibilities and influence within the corporationProvides a set of unique experiences beneficial to both the individual and the firmEnhances understanding of the global marketplaceOffers the opportunity to work on a project important to the organization
7 Repatriation Checklist Before they go:Make sure there is a clear need for the international assignment. Don’t send someone abroad unnecessarily. Develop a clear set of objectives and expectations and time frames in which they should be met.Make sure that your selection procedures are valid. Select the employee and also look at and involve the employee’s family.Provide (or fund) language and cultural training for the employee and the employee’s family.Offer counseling and career assistance for the spouse.Establish career planning systems that reward international assignments and lead to promotion and knowledge sharing.
8 Repatriation Checklist (cont’d) While they are away:Jointly establish a developmental plan that focuses on the goal to be achieved.Tie performance objectives to the achievement of the goal.Identify mentors who can be a liaison and support person from home.Keep communications open so that the expatriate is aware of job openings and opportunities.Arrange for frequent visits back home (for the employee and the family). Make certain they do not lose touch with friends and relatives.
9 Repatriation Checklist (cont’d) When they come back home:Throw a “welcome home” party and arrange for a meeting with other former expatriates.Offer counseling to ease the transition.Arrange conferences and presentations to make certain that knowledge and skills acquired away from home are identified and disseminated.Set up an expatriate database to help other employees who go abroad later.Get feedback from the employee and the family about how well the organization handled the repatriation process..
10 Global Compensation Challenges Different countries have different norms for employee compensation:Financial (money) incentives versus nonfinancial incentives (prestige, independence, and influence)Individual rewards versus collectivist concerns for internal equity and personal needsGeneral rule:Match the rewards to the values of the local culture—create a pay plan that supports the overall strategic intent of the organization but provides enough flexibility to customize particular policies and programs to meet the needs of employees in specific locations.
11 Hourly Wages in Different Countries* COUNTRY$/HOURNorway41.05Denmark35.45Germany34.21Netherlands32.34Belgium31.85Sweden31.80Switzerland30.67Austria30.46Finland29.90Luxembourg27.74United Kingdom27.10Australia26.14Ireland25.96Canada25.74Italy25.07France24.90United States23.82COUNTRY$/HOURJapan20.20Spain18.83Greece16.10Korea, Republic of14.72New Zealand14.47Israel12.98Singapore8.55Portugal7.65Czech Republic6.77Taiwan6.43Hungary6.29Hong Kong SAR (1)5.78Poland4.99Brazil4.91Mexico2.75Philippines1.07Sri Lanka0.54*Hourly compensation costs in U.S. dollars for production workers in manufacturing.
12 Compensation of Host-Country Employees Hourly wages can vary dramatically from country to country.Pay periods are different.Seniority may be an important factor.High pay rates can upset local compensation practices.Bonuses, profit-sharing, benefits and paid leave may be more extensive and legally required.
13 Compensation of Host-Country Managers Global Compensation SystemA centralized pay system whereby host-country employees are offered a full range of training programs, benefits, and pay comparable with a firm’s domestic employees but adjusted for local differences
14 Expatriate Compensation Provide the expatriate with a disposable income that is equivalent to what he or she would receive at home.Provide and explicit “add-on” incentive for accepting an international assignment.Compensation country-based or company-based?Employment lawsDouble taxation / FICA / Value Added TaxesCurrency stabilityBenefits and Health CareFirms can use compensation packages to enhance the effectiveness of expatriate assignments. However, compensation policies can create conflict if locals compare their pay packages to the expatriate’s and conclude that they are being treated unfairly. Listed here are some considerations when designing a compensation package for expatriates.
15 Expatriate Compensation Systems (cont’d) LocalizationAdapting pay and other compensation benefits to match that of a particular countryReduces resentment among local staff members if they are earning significantly less.Other IssuesAdequacy of medical carePersonal securityCompensation policies of competitors
16 Performance Appraisal of International Managers Who Should Appraise Performance?Home-country evaluationsHost-country evaluationsAdjusting Performance CriteriaAugmenting job dutiesIndividual learningOrganizational learningProviding FeedbackDebriefing interview
17 The Labor Environment Worldwide International Differences in Unions:The level at which bargaining takes place (national, industry, or workplace)The degree of centralization of union-management relationsThe scope of bargaining (parties and issues)The degree to which government intervenesThe degree of unionization and union strengthThe political affiliations of unions