international hrm & labor

8/6/2019 International HRM & Labor

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The Strategic Role of International

HRM

Insure that HRM policies arecongruent with the firms strategy,structure and controls.

Types of Staffing Policy

Ethnocentric

Key managementpositions filled by

parent-countrynationals

Polycentric

Host-countrynationals manage

subsidiaries,parent company

nationals hold keyHeadquarter

positions

Geocentric

Seek bestpeople, regardless

of nationality

Parent Country Nationals

(PCNs) - Advantages

knowledge of firms culture & products

loyalty influence at HQ

easier to assess

foreign image

facilitate control and control in the firm

groom executives for top management


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Third Country Nationals (TCNs)

Advantages

knowledge of specific cultures andlanguages

usually less costly more adaptable than the PCNs

reflects geocentric attitude

when parent country does not havegood relationship with host government

best person for the job

Third Country Nationals (TCNs)

Disadvantages

locals may prefer their own citizens inmanagerial positions

if employees country does not have agood relationship with host country

may have an ulterior motive

Criteria for Selecting Managers

for Foreign Assignment

technical ability

managerial skills

cultural empathy

adaptability and flexibility

diplomatic skills

language aptitude

personal motives

emotional stability and maturity

adaptability of family


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Four attributes that predict success

Self-Orientation Possessing high self-esteem, self-confidence and mental well-

being

Others-Orientation Ability to develop relationships with host-country nationals

Willingness to communicate

Perceptual Ability The ability to understand why people of other countries behave

the way they do

Being nonjudgmental and being flexible in management style

Cultural Toughness Relationship between country of assignment and the expatriates

adjustment to it

Expatriate Failure Rates

Recall Rate Percent Percent of Companies

US Multinationals20 - 40% 7%10 - 20% 69< 10 24

European Multinationals

11 - 15% 3%6 - 10 38


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Repatriation of expatriates

Didnt know what position they

hold upon return.

Firm vague about return, role

and career progression.

Took lower level job.

Leave firm within

one year.

Leave firm within

three years

10 20 30 40 50 60 70percent

Why companies do not offer

training programs?

belief that they are ineffective

past dissatisfaction with such trainingprograms

lack of time between selection anddeparture

expense of training

Approaches to Cross-cultural

Training

Information or Fact-oriented Training

Attribution Training Cultural Awareness Training

Cognitive-behavior Modification

Experiential Training


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Common Training Techniques area briefings

lectures

books and other reading material

films and videos language training

case studies

culture assimilators

sensitivity training

field trips

simulation

Compensation

Two issues:

Pay executives in different countries according tothe standards in each country?

or

Equalize pay on a global basis?

Method of payment

Expatriate Compensation Base Salary

Foreign service allowance

Hardship or site allowance

Cost of living allowance

Housing allowance

Taxation

Childrens education allowance

Reimbursement of host countrys welfareallowance

Incidental allowances (entertainment,medical, furniture, vacation, etc.)


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Compensation for four positions in

26 countries

National differences in compensation

28,874107,839268,302719,665UnitedKingdom

44,68066,377306,1811,403,899UnitedStates

11,92430,652102,491179,486Taiwan

36,93461,375189,785421,622Germany

36,28944,866188, 070742,228Canada

$17, 884$63, 948$326,874$860,704Argentina

Mfg.Employee

AccountantHR DirectorCEO

Table 18.4 b

National differences in CEO pay for

midsize companies

Fig 18.1


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Compensation issues

PaymentType of Company

May have to pay itsinternational cadre ofmanagers the same.

Geocentric/Transnational

Pay can and should becountry-specific.Polycentric

How much home-countryexpatriates should be

paid.Ethnocentric

Global Compensation Systems

Headquarters pay scale + differential

Citizenship salary system

Global compensation system

The balance sheet

Fig 18.2


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Performance appraisal

Problems:

Unintentional bias

Host-nation biased by cultural frame of reference

Home-country biased by distance and lack ofexperience working abroad

Expatriate managers believe that headquartersunfairly evaluates and under appreciates them

In a survey of personnel managers in U.S.multinationals, 56% stated foreign assignmenteither detrimental or immaterial to ones career.

Guidelines for performance appraisal

More weight should be given to onsitemanagers evaluation as they are able torecognize the soft variables

Expatriate who worked in same locationshould assist home-office manager withevaluation

If foreign on-site managers prepare anevaluation, home-office manager should beconsulted before completion of formal the

terminal evaluation

The Expatriate Comes Home

loss of expat social and cultural lifestyle

job shock less autonomy, less authority, less responsibility,

boring, lateral move

majority feel intl. assignment was not usefulto their careers

underutilization of skills

cash flow problems

educational discontinuity

housing

no career planning


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Managing Reentry

Communications

extent of information received & given fromHQ

frequency of exchange

involvement in home projects

Validation

amount of recognition received uponreturning home

have appropriate position available

Management development &

strategy

Development programs designed to increasethe overall skill levels of managers through:

On going management education

Rotation of managers through a number of jobswithin the firm to give broad range of experiences

Used as a strategic tool to build a strongunifying culture and informal managementnetwork

Above techniques support transnational andglobal strategies

What do managers learn abroad?

managerial skills

open minded, cultural understanding

tolerance for ambiguity

multiple perspectives

ability to work and mange others fromdiverse backgrounds


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Optimizing the International Employee

Selection

Predeparture Training

Career Planning

narrow focus of most intl assignments

Communications with HQ

periodic visits

involved in changes in plans, policies, etc.

Reentry job responsibility

Use skills learned overseas

Involve in training for future expats

Avoid the similar country trap

international hrm & labor

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