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COMPONENTS OF HRM . Recruitment Selection Training & Development Performance Appraisal Compensation Labor Relations. INTERNATIONAL HRM. Basic HRM issues remain Must choose a mixture of international employees How much to adapt to local conditions?. - PowerPoint PPT Presentation
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COMPONENTS OF HRM COMPONENTS OF HRM
RecruitmentRecruitment SelectionSelection Training & DevelopmentTraining & Development Performance AppraisalPerformance Appraisal CompensationCompensation Labor RelationsLabor Relations
INTERNATIONAL HRMINTERNATIONAL HRM
Basic HRM issues remainBasic HRM issues remain Must choose a mixture of Must choose a mixture of
international employeesinternational employees How much to adapt to local How much to adapt to local
conditions?conditions?
EMPLOYEES IN MULTINATIONAL EMPLOYEES IN MULTINATIONAL ORGANIZATIONSORGANIZATIONS
Local country nationals (LCNs) Local country nationals (LCNs) Expatriate workers or home Expatriate workers or home
country nationals (HCNs)country nationals (HCNs) Third country nationals (TCNs)Third country nationals (TCNs)
IHRM ORIENTATIONSIHRM ORIENTATIONS Ethnocentric Ethnocentric PolycentricPolycentric RegiocentricRegiocentric GlobalGlobal
IHRM ORIENTATION AND IHRM ORIENTATION AND MULTINATIONAL STRATEGYMULTINATIONAL STRATEGY
Early stages of internationalization Early stages of internationalization = ethnocentric IHRM= ethnocentric IHRM
Multilocal strategies = ethnocentric Multilocal strategies = ethnocentric or regiocentric or regiocentric
Regional strategy = closer to the Regional strategy = closer to the globalglobal
International strategy = International strategy = ethnocentric or polycentric ethnocentric or polycentric IHRM IHRM
Transnational strategies = a Transnational strategies = a global IHRMglobal IHRM
MULTINATIONAL MANAGERSMULTINATIONAL MANAGERS
Host country or expatriate?Host country or expatriate?
USING HOST COUNTRY USING HOST COUNTRY MANAGERSMANAGERS
Do they have the expertise for Do they have the expertise for the position?the position?
Can we recruit them from Can we recruit them from outside the company?outside the company?
USING EXPATRIATE MANAGERSUSING EXPATRIATE MANAGERS Do parent country managers have Do parent country managers have
the appropriate skills?the appropriate skills? Are they willing to take expatriate Are they willing to take expatriate
assignments?assignments? Do any laws affect the assignment Do any laws affect the assignment
of expatriate managers? of expatriate managers?
IS THE EXPATRIATE WORTH IS THE EXPATRIATE WORTH IT?IT?
High costHigh cost High failure rateHigh failure rate
EXHIBIT 11-3 PAYING FOR EXHIBIT 11-3 PAYING FOR THE EXPATRIATE MANAGERTHE EXPATRIATE MANAGER
050000
100000150000200000250000300000350000
$
REASONS FOR U.S. REASONS FOR U.S. EXPATRIATE FAILUREEXPATRIATE FAILURE
Spouse fails to adapt Spouse fails to adapt Manager fails to adapt Manager fails to adapt Other problems within the familyOther problems within the family Personality of the managerPersonality of the manager Level of responsibilitiesLevel of responsibilities
Lack of technical proficiencyLack of technical proficiency No motivation for assignmentNo motivation for assignment
MOTIVATIONS TO USE EXPATSMOTIVATIONS TO USE EXPATS Managers acquire international skillsManagers acquire international skills Coordinate and control operations Coordinate and control operations
dispersed activities dispersed activities Communication of local Communication of local
needs/strategic information to needs/strategic information to headquarters headquarters
KEY EXPATRIATE SUCCESS KEY EXPATRIATE SUCCESS FACTORSFACTORS
Professional/technical competenceProfessional/technical competence Relational abilities Relational abilities Motivation Motivation Family situation Family situation Language skills Language skills Willingness to accept position Willingness to accept position
PRIORITY OF SUCCESS PRIORITY OF SUCCESS FACTORSFACTORS
Depends on : Depends on : Assignment lengthAssignment lengthCultural distanceCultural distanceAmount of required interaction Amount of required interaction
with local peoplewith local peopleJob complexity/responsibilityJob complexity/responsibility
EXHIBIT 11.5 SHOWS A EXHIBIT 11.5 SHOWS A DECISION MATRIX USED TO DECISION MATRIX USED TO SET PRIORITIES OR SET PRIORITIES OR DIFFERENT SUCCESS DIFFERENT SUCCESS FACTORS DURING FACTORS DURING SELECTIONSELECTION
Assignment Characteristics
ExpatriateSuccessFactors
LongerDuration
MoreCulturalDis-similarity
GreaterInteractionandCommunica-tionRequirementswith Locals
MoreComplex orRespon-sible Job
Professional/TechnicalSkills
High Neutral Moderate High
Relational Abilities
Moderate High High Moderate
InternationalMotivation
High High High High
FamilySituation
High High Neutral Moderate
LanguageSkills
Moderate High High Neutral
EXPATRIATE TRAININGEXPATRIATE TRAINING
TRAINING RIGORTRAINING RIGOR
The extent of effort by trainees The extent of effort by trainees and trainers required to prepare and trainers required to prepare the trainees for expatriate the trainees for expatriate positions positions
LOW RIGOR TRAININGLOW RIGOR TRAINING Short time periodShort time period LecturesLectures Videos on local cultureVideos on local culture Briefings on company operations Briefings on company operations
company operations company operations
HIGH RIGOR TRAININGHIGH RIGOR TRAINING Lasts over a month Lasts over a month Experiential learningExperiential learning Extensive language trainingExtensive language training Often includes interactions with Often includes interactions with
host country nationals host country nationals
EXHIBIT 11.6 SHOWS EXHIBIT 11.6 SHOWS VARIOUS TRAINING VARIOUS TRAINING TECHNIQUES AND THEIR TECHNIQUES AND THEIR OBJECTIVES AS THE RIGOR OBJECTIVES AS THE RIGOR OF THE CROSS- CULTURAL OF THE CROSS- CULTURAL TRAINING GROWS TRAINING GROWS
Techniques: Field trips tohost country, meetingswith managers experiencedin host country, meetingswith host countrynationals, intensivelanguage training.
Objectives: Developcomfort with host countrynational culture, businessculture, and socialinstitutions.
HighTraining
Rigor
Techniques:Experiential learningexercises, role playing,simulations, casestudies, survivallanguage training.
Objectives: General andspecific knowledge ofhost country culture,reduce ethnocentrism.
Mid-level
TrainingRigor
Techniques: Lectures,videotapes, readingbackground material.
Objectives: Providebackground information onhost country business andnational cultures, basicinformation on companyoperations.
LowTraining
Rigor
EXHIBIT 11.8 SHOWS SOME EXHIBIT 11.8 SHOWS SOME OF THE TRAINING CONTENT OF THE TRAINING CONTENT THAT HELPS SUPPORT A THAT HELPS SUPPORT A COMPANY'S MULTINATIONAL COMPANY'S MULTINATIONAL STRATEGYSTRATEGY
Multinational Strategy Example Additional Training Needs
Multilocal Parent country nationals: Local business culture,political environment, laws, technology transfer.
Host country nationals: Production or servicepractices.
Regional Parent country nationals: How to facilitate two-waytechnology transfer and corporate culture transfer.
Host country nationals: Corporate culture,manufacturing or service systems.
International Parent country nationals: How to facilitatetechnology transfer; knowledge of local businessculture, political environment.
Host country nationals: Sales and service systems.Transnational All nationals: Corporate culture, strategies.
CHALLENGES OF EXPATRIATE CHALLENGES OF EXPATRIATE PERFORMANCE APPRAISALPERFORMANCE APPRAISAL
Unreliable dataUnreliable data Complex and volatile Complex and volatile
environmentsenvironments Time differences and distance Time differences and distance
separationseparation Local cultural situationsLocal cultural situations
STEPS TO IMPROVE THE STEPS TO IMPROVE THE PROCESSPROCESS
1. Fit the evaluation criteria to 1. Fit the evaluation criteria to strategy.strategy.
2. Fine tune the evaluation criteria 2. Fine tune the evaluation criteria
3. Use multiple evaluators with 3. Use multiple evaluators with varying periods of evaluation varying periods of evaluation
EXHIBIT 11.9EXHIBIT 11.9 Shows several sources of Shows several sources of
information a superior or the information a superior or the HRM professionals may use to HRM professionals may use to evaluate an expatriate managers evaluate an expatriate managers
EvaluationSources
Criteria Periods
Self evaluation Meeting objectivesManagement skillsProject successes
Six months and atthe completion ofa major project
Subordinates Leadership skillsCommunication skillsSubordinatedevelopment
After completionof major project
Peer expatriate andhost countrymanages
Team buildingInterpersonal skillsCross-culturalinteraction skills
Six months
On-site supervisor Management skillsLeadership skillsMeeting objectives
At the completionof significantprojects
Customers andclients
Service quality andtimelinessNegotiation skillsCross-culturalinteraction skills
Yearly
EXPATRIATE COMPENSATIONEXPATRIATE COMPENSATION
THE BALANCE SHEET THE BALANCE SHEET APPROACHAPPROACH
Provides a compensation Provides a compensation package that equates purchasing package that equates purchasing power power
BALANCE SHEET COSTSBALANCE SHEET COSTS Allowances for cost of living, Allowances for cost of living,
housing, utilities, furnishing, housing, utilities, furnishing, educational expenses, medical educational expenses, medical expenses, club memberships, and expenses, club memberships, and car and/or driver expenses car and/or driver expenses
DomesticAssignmentExpenses andSpendableIncome
Expatriate Assignment Expenses and BalancedSpendable Income + Allowances
Base Salary = Base Salary
+ Allowances as an incentive to take position,foreign service premium, hardship pay, R&R
Taxes = Taxes+ Allowances to balance extra tax payments
Goods andServices = Goods and Services
+Allowances to cover cost of living differences,housing, children’s education, medical costs,automobile, recreation, home leave travel
Housing = Housing
+Allowances for moving expenses, settling inexpenses, initial housing costs, and furnishingallowances
SpendableIncome = Spendable Income
OTHER APPROACHESOTHER APPROACHES Parent country wages everywhere Parent country wages everywhere Wean expatriates from allowancesWean expatriates from allowances Pay based on local or regional Pay based on local or regional
marketsmarkets Cafeteria selection of allowancesCafeteria selection of allowances Global pay systems Global pay systems
THE REPATRIATION THE REPATRIATION PROBLEMPROBLEM
Difficult for many organizations Difficult for many organizations "Reverse culture shock" "Reverse culture shock" Expatriates must relearn own Expatriates must relearn own
national and organizational national and organizational cultureculture
Includes whole family Includes whole family
STRATEGIES FOR SUCCESSFUL STRATEGIES FOR SUCCESSFUL REPATRIATION PROVIDE:REPATRIATION PROVIDE:
A strategic purpose for repatriationA strategic purpose for repatriation A team to aid the expatriateA team to aid the expatriate Home country information sourcesHome country information sources Training and preparation for the Training and preparation for the
returnreturn Support for expatriate and familySupport for expatriate and family
INTERNATIONAL INTERNATIONAL ASSIGNMENTS FOR WOMEN ASSIGNMENTS FOR WOMEN TWO IMPORTANT "MYTHS"TWO IMPORTANT "MYTHS"
Myth 1: women do not wish to Myth 1: women do not wish to take international assignments take international assignments
Myth 2: women will fail in Myth 2: women will fail in international assignments international assignments because of the foreign culture's because of the foreign culture's prejudices against local women prejudices against local women
SUCCESSFUL WOMEN SUCCESSFUL WOMEN EXPATRIATESEXPATRIATES
Foreign not female Foreign not female Emphasize nationality not genderEmphasize nationality not gender The woman's advantageThe woman's advantage Strong in relational skillsStrong in relational skills A wider range of interaction options A wider range of interaction options
CONCLUSIONSCONCLUSIONS
HRM functionsHRM functions IHRM challengesIHRM challenges IHRM orientationsIHRM orientations Expatriate managersExpatriate managers The role of women in The role of women in
multinational organizationsmultinational organizations
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