Submitted To:Prof.Harsimran Walia

Submitted By:Anuj GuptaAshish SharmaShashi Abhishek

The management of human resources in global corporations. The management of expatriate employees. The comparison of human resource

management practices in a variety of different Countries.

• Recruitment is defined as searching for and obtaining potential job candidates in sufficient numbers and in sufficient quality so that the organization can select the most appropriate people to fill its job needs.

Selection is the process of gathering information for the purposes of evaluating and deciding who should be employed in particular jobs.

Staffing Needs

• Firms that centralize decision making at headquarters typically favor home-country managers

• Firms that decentralize decision making to the subsidiary level often employ host country nationals.

• Since most companies do not fall at one extreme or the other, most companies have a combination of both home and host country managers.

TYPES OF GLOBAL EMPLOYEESTYPES OF GLOBAL EMPLOYEES

Advantages of HCNs,PCNs &TCNs

PCNsPCNs TCNsTCNsHCNs

•Less cost•Preference of host country govt.•Knowledge of environment•Language facility

•Talent available within company•Greater control•Company experience•Experience provided to corporate executive

•Broader experience•International outlook•Multilingualism

Types of International Staffing Policy

Types Of International Staffing Policy

Ethnocentric All key managerial positions are filled by parent-country nationals.Consistent with international strategyDisadvantage: cultural myopiaThe cultural differences & environmental differences will be huge and expatriates may not be able to cope up with. Thus resulting in costly management mistakes.e.g., Procter & Gamble – Associate with higher incidence of IHRM problems

Types Of International Staffing Policy

Polycentric Key positions are filled with HCN’s Host country nationals manage subsidairiesConsistent with multidomestic strategyDisadvantage: create a gap between home and host operations

Geocentric or global Best managers are recruited from within or outside the company regardless of nationality, TCN’s – used by European MNC’s, transpatriates, some U.S. companies (Philips, Heinz, Unilever, IBM) Help build an informal management network Disadvantage: may be subject to the immigration policies

•

Types Of International Staffing Policy

Regiocentric Recruiting on a regional basis. For example, a U.S. based firm could create three regions;

Europe, the Americas, and Asia-pacific. European staff would be transferred throughout the European region (say a Briton to Germany, a French national to Belgium, and a German to Spain). Eg:Ford Motor Company.

Disadvantage: produce federalism at a regional rather than a country basis and constrain the organization from taking a global stance.

EXAMPLES

Korean MNC's Hyundai, Samsung , Indian MNC's TCS, Infosys, Wipro. US MNC's GE, Citi corp, Exxon appoint a home country nationals to lead the foreign subsidiary. (Ethnocentric approach)

US MNC's P&G, Pepsi, Coca cola. Indian MNCs Ranbaxy appoint a host country executive along with a home country executive to support or vice-versa (polycentric approach)

EXAMPLES

Nestle, Unilever, HP, Nortel. Appoint the best person for the job irrespective of the nationality (Meritocracy approach) This again suffers from problems similar to that of ethnocentric approach.

Intel, Microsoft, Oracle, Sun Microsystems. Appoint the best host country national who has worked in the home country or at the headquarters.

Electrolux (the vacuum cleaner company) has for many years attempted to recruit and develop a group of international managers from diverse countries. These people constitute a mobile base of managers who are used in a variety of facilities as the need arises.

Necessary Skills and Abilities for International Managers:

Skills and abilities necessary to do the job:•Technical•Managerial•Functional

Skills and abilities necessary to work in foreign location:•Adaptability•Location-specific skills(language etc)•Personal characteristics

IMPROVED CHANCES OF SUCCEEDING IN AN INTERNATIONAL JOB ASSIGNMENT

Staffing For International Assignment

• Today, as businesses globalize, the market for executive talent is also globalizing.

• Top management teams are increasingly diverse in their members.

• While most MNCs do not hire new college graduates to take foreign positions immediately, many hire graduates with the intention of sending them abroad in the future.

Expatriate Failure

The selection process in international firms is particularly important because of the high cost of expatriate failure. Expatriate failure is the early return of an expatriate manager to his or her country because of an inability to perform in the overseas assignment. The cost of expatriate failure ranges between $40,000-$250,000.Expatriate failure rates may be as high as 20-50 percent in many U.S. companies, higher than for either European or Japanese companies.

Current Expatriate Profile

Category PCN (42%) HCN (16%) TCN (42%)

GenderAge (Yrs)Marital status

Male (82%)30-49 (60%)Married (65%)

Female (18%)20-29 (17%)Single (26%)Partner (9%)

Accompanied byDurationLocationPrimary reasonPrior international experience

Spouse (86%)1-3 years (52%)Europe (35%)Fill a position30%

Children (59%)Short-term (9%)Asia-Pacific (24%)

Source: based on data from global Relocation Trends: 2002 Survey Report, GMAC Global Relocation Services, National Foreign Trade Council and SHRM Global Forum, GMAC-GRS 2003.

Reason for Expatriate Failure

•Inability of spouse to adjust•Manager’s inability to adjust•Other family problems•Manager's personal or emotional immaturity.•Inability to cope with larger overseas responsibilities

•Inability to cope with larger overseas responsibilities•Difficulties with the new environment•Personal or emotional problems•Lack of technical competence•Inability of spouse to adjust

•Inability of spouse to adjust

US FIRMS JAPANESE FIRMS

European Multinationals

International Assignments: Factors Moderating Performance

Causes of Expatriate Assignment Failure

Reasons For Expatriates Failure

Spouses in 90% of cases come back early .They faces isolation,loneliness,boredom.

Financial package,cost in foreign country may be higher. Example:USA family overseas in Japan may face such a situation.

Lack of inability to adapt.In host country they have to face uncertainities ,relate with people with different values and beliefs.this happens when no training is given on cultural nuances.

Reasons for expatriates failure

• Poor programmes for career support and repatriation.

• Lack of support from HQ.• Inadequate preperation,training and

orientation prior to assignment.• Managers sent on foreign assignments may

experience culture shock, a psychological phenomenon that may lead to feelings of fear, helplessness, irritability, and disorientation.

Process of AdjustmentProcess of Adjustment

• Acculturation typically proceeds through four phases

Honeymoon

Crisis

Learning

Ad

Adjustment

Acculturation Curve

Costs of Expatriate Failure

• Averaged $250,000 per early return

• Direct costs:– Airfares– Associated relocation

expenses– Salary and benefits– Training and

development

Costs vary according to:

•Level of position •Country of destination•Exchange rates•Whether ‘failed’ manager is replaced by another expatriate

Indirect Cost of Expatriate Failure

• Damaged relationships with key stakeholders in the foreign location

• Negative effects on local staff • Poor labor relations • Negative effects on expatriate concerned• Family relationships may be affected• Loss of market share

The Employment Relationship

• The nature of the employment relationship– Relational: broad, open-ended and long-term

obligations– Transactional: specific short-term monetized

obligations

• The condition of the relationship– Intact: when employee considers there has been fair

treatment, reciprocal trust– Violated: provoked by belief organization has not

fulfilled its obligations

The Dynamics of the Employment Relationship

Likelihood of Exit

Steps For Reducing Expatriates Failure

• Firms are now beginning to pay more attention to repatriation--bringing a manager back home after a foreign assignment has been completed.

• Individuals that successfully adapted to the foreign environment may experience culture shock upon returning to their own country.

Steps For Reducing Expatriates Failure

• Regarding “non-cultural” issues leading to success or failure overseas, managers tend to be more successful in foreign assignments when 5 conditions are met: They can freely decide whether or not to accept

a foreign assignment They have a realistic understanding of the new

job and assignment

Steps For Reducing Expatriates Failure

They have a realistic expectation of a repatriation assignment

They have a mentor in the parent firm who will look out for their careers

There is a clear link between the foreign assignment and the manager’s long-term career path.

Steps For Reducing Expatriates Failure

• Compensating expatriate managers can be a complex process because factors such as differences in currency valuation, standards of living, lifestyle norms, and so forth must be taken into consideration.

Steps For Reducing Expatriates Failure

• A cost-of-living allowance may be given to managers to offset differences in the cost-of-living in the home and host countries.

• A hardship premium (also known as a foreign service premium) may be paid to mangers who accept assignments in relatively unattractive locations.

• Special benefits packages that may be provided to expatriate managers include housing, education, medical treatment, travel to the home country, and club memberships

Recruitment Methods

Using head-HuntersCross-national advertisingE-recruitmentInternational Graduate Program

Selection Criteria

• Technical ability• Cross-cultural suitability• Family requirements• Country-cultural requirements• MNE requirements• Language

Factors in Expatriate Selection

Using Traits and Personality Tests to Predict Expatriate Success

• Although some tests may be useful in suggesting potential problems, there may be little correlation between test scores and performance

• Most of the tests have been devised in the United States, thus culture-bound

• In some countries, there is controversy about the use of psychological tests ( different pattern of usage across countries)

• Use of personality traits to predict intercultural competence is complicated by the fact that personality traits are not defined and evaluated in similar way in different cultures

Mendenhall and Oddou’s Model

• Self-oriented dimension• Perceptual dimension• Others-oriented dimension• Cultural-toughness dimension

Harris and Brewster’s Selection Typology

Formal InformalOpen• Clearly defined criteria• Clearly defined measures• Training for selectors• Open advertising of vacancy (internal/external)• Panel discussions

• Less defined criteria• Less defined measures• Limited training for selectors• Open advertising of vacancy • Recommendations• No panel discussions

Closed• Clearly defined criteria• Clearly defined measures• Training for selectors• Panel discussions• Nominations only (networking/reputation)

• Selector’s individual preferences determine selection criteria and measures• No panel discussions• Nominations only (networking/reputation)

Solutions to the Dual-career Challenge

• Alternative assignment arrangements– Short-term– Commuter– Other (e.g. unaccompanied, business travel,

virtual assignments)• Family-friendly policies

– Inter-company networking– Job-hunting assistance– Intra-company employment– On-assignment career support

Barriers to Females Taking International Assignments

External Barrier Self-established Barriers

• HR managers reluctant to select female candidates• Culturally tough locations or regions preclude female expatriates• Those selecting expatriates have stereotypes in their minds that influence decisions

• Some women have limited willingness to relocate• The dual-career couple• Women are often a barrier to their own careers by behaving according to gender based role models.

Equal Employment Opportunity Issues

• Cultural Variations– Law and enforcement– Social values– Corporate practices

• The United States– EEOA within the country– International approach

Johnson & Johnson IHRM Strategy

• J&J is a global company and global issues cannot be solved by regional managers, it takes not only regional executives but executives from all aspects of the business because any decision will effect the organization as a whole and no just the specific SBU.

• The three most important factors in implementing strategy are structure, culture and leadership.

• Key factor within a good culture is the careful screening and selection of new employees. This is done by teaching the human relations department to compare the values of the prospective employee to those of the company and only choosing those candidates that fit the structure of the organization and will uphold the values in every aspect of business for J&J.

Selection Techniques

• Screening the applicant’s background• Testing ability to adapt to new culture and

environment• Investigate family situation• Assess the capacity of the manager to adjust in

the said culture• Use psychological tests to investigate the overall

personality of the candidate• Use of database to track international managers• Use of international graduate program• Using assessment centre