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Human Resource Management 13th Edition
Chapter 14Global Human Resource
Management
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Learning Objectives
• Describe the impact of global bribery in the international arena.
• Describe the evolution of global business and global strategic human resource management.
• Explain some global issues confronting women.• Explain global staffing.• Describe global human resource development.
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Learning Objectives (Cont.)
• Explain global compensation.• Describe global safety and health.• Explain global employee and labor relations.• Describe legal and political factors affecting
global human resource management. • Describe possible advantages and
disadvantages related to globalization for small and medium sized businesses.
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HRM in Action: Global Bribery, The Conviction List Grows
• Foreign Corrupt Practices Act prohibits U.S. firms from bribing foreign officials
• Not using bribery has been costly for American companies
• Attacks of 9/11/2001 caused authorities to take closer look at financial data while searching for terrorists' funds– Found bribery corruption in the process
• List of convictions under FCPA continues to grow
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Evolution of Global Business
• Not long ago, Mercedes-Benz was still a German company, General Electric was American, and Sony was Japanese
• Many United States firms do most of their business and employ most of their workers outside U.S.
• Many non-U.S. companies make products here
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Evolution of Global Business
• Exporting: Selling abroad retaining foreign agents and distributors
• Licensing: Organization grants foreign firm right to use intellectual property
• Franchising: Parent company grants another firm right to do business in prescribed manner
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Evolution of Global Business (Cont.)
• Multinational corporation: Firm based in one country that produces goods or provides services in one or more foreign countries
• Global corporation: Corporate units in countries are integrated to operate as one organization worldwide
• Transnational corporation: Moves work to places with talent to handle the job and time to do it at right cost
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Global Professional in Human Resources
• New certification for HRCI• Focuses on:
– Strategic HR management– Global talent acquisition and mobility– Global compensation and benefits– Organizational effectiveness– Talent development– Workforce relations– Risk management
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Global Human Resource Management
• Functional areas similar to domestic HR
• Manner in which they are implemented may differ
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Environment of Global Human Resource Management
1
Human Resource
Management Other
Functional Areas
OperationsMarketing
Finance
Lega
l Con
side
ratio
ns E
cono
my
Technolo gy
Society
Shareho lders
Unions
Customers Competition Labor Market
Human Resource
Development
Com
pens
atio
n
Staffing
Em
ployee and
Labor Relations
Safety and Health
INTERNAL ENVIRONMENT
EXTERNAL ENVIRONMENT UNITED STATES
GLOBAL ENVIRONMENTU
nantici pated E
ventsP
oliti
cal P
artie
s
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Trends & Innovations: Global Issues Confronting Women
• Some countries do not provide women equal access to jobs
• Female talent is underutilized in emerging countries
• Positive trends that have emerged regarding women working the global environment
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Global Staffing
• Types of global staff members
• Approaches to global staffing
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Types of Global Staff Members
• Expatriate: Employee working in firm who is not a citizen of country in which firm is located, but a citizen of country where organization is headquartered
• Host-country national: Employee’s nationality same as location of subsidiary
• Third-country national: Citizen of one country, working in second country, and employed by organization headquartered in third country
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Approaches to Global Staffing
• Ethnocentric staffing: Primarily hiring expatriates for higher-level foreign positions
• Polycentric staffing: More host-country nationals are used throughout the organization, from top to bottom
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Approaches to Global Staffing (Cont.)
• Regiocentric staffing: Regional groups of subsidiaries reflect organization’s strategy and structure work as a unit
• Geocentric staffing: Using worldwide integrated business strategy to hire the best person for the job
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Recruiting Host-country Nationals
• Should not assume that recruiting approaches that worked in parent company will be effective in recruiting host-country nationals
• Example: Error that many recruiters make is believing that all countries in Europe are similar or the same
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Selecting Expatriates
Four distinct stages: 1. Self-selection2. Creating a candidate pool3. Technical skills assessment4. Making a mutual decision
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Background Investigation
• Conducting background investigations in other countries is equally, or more, important than in U.S.
• Differences across cultures and countries often create barriers
• Each country has own laws, customs, and procedures for background screenings
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Global Human Resource Development
• Pre-move orientation and training • Continual development: Online
assistance and training • Repatriation orientation and training
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Expatriate Preparation and Development Program
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Expatriate Preparation and Development
Prior to Departure: Orientation and Training
During Assignment: Continual Development
Near Completion: Repatriation Orientation Training
Language Culture History Local Customs Living Conditions
Expanding Skills Career Planning Home-Country Development
U.S. Lifestyle U.S. Workplace U.S. Employees
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Pre-move Orientation and Training
• Essential before global assignment begins
• Expatriate need to understand cultural do’s and don’ts and be immersed in language
• Employee’s global skills are fitted into career planning and corporate development programs
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Continual Development: Online Assistance and Training
• Companies now offer online assistance and training in areas such as career services, cross-cultural training, and employee assistance programs
• Technology can be used to provide ongoing contact and support
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Repatriation Orientation and Training
• Repatriation: Process of bringing expatriates home
• Too many returning managers report dissatisfaction with process
• Some expatriates are not even guaranteed a job upon their return
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Global E-Learning
• Globalization has created special need for e-learning
• Challenges for global e-learning implementation include language and localization issues
• Companies that want to offer courses in several languages usually turn to translators
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Virtual Teams in Global Environment
• Necessity of everyday working life
• Enable companies to accomplish things more quickly and efficiently
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Difficulties that Virtual Teams Confront
• Do not feel as connected or committed to team
• Communication problems directly proportional to number of time zones separating them
• Language and culture problems
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Compensation for Host-Country Nationals
• Organizations should think globally but act locally
• Normally slightly above prevailing wage rates in area
• Variations in laws, living costs, tax policies, and other factors must be considered
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Compensation for Host-Country Nationals (Cont.)
Factors to consider: – Minimum wage requirements
– Working time information such as annual holidays and vacation time and pay
– Hiring and termination rules
– Regulations covering severance practices
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Compensation for Host-Country Nationals (Cont.)
• Culture often plays a part
• North American practices encourage individualism and high performance
• Continental European programs typically emphasize social responsibility
• Traditional Japanese approach considers age and company service as primary determinants of compensation
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Expatriate Compensation
• Largest expatriate costs include overall remuneration, housing, cost-of-living allowances, and physical relocation
• U.S. citizens living overseas can exclude up to $92,900 of income earned abroad
• Additional challenges: Devaluation of U.S. dollar
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Global Safety and Health
• Employees who work in safe environment and enjoy good health more likely to be productive
• U.S.-based global operations are often safer and healthier than host-country operations
• Not as safe as similar operations in U.S.
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Global Safety Programs
• Global companies continue to face global safety risks
• Bhopal Disaster of 1984 was worst industrial disaster in history
• Companies have discovered way they treat their workers anywhere on planet can pose risk to their corporate reputation
• Employers should also be concerned with health issues for host-country nationals
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Global Employees and Labor Relations
Strength and nature of unions differ from country to country
Ranges from nonexistent to relatively strong
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Global Employees and Labor Relations in European Countries
• Codetermination: Requires firms to have union or worker representatives on their boards of directors
• Laws make it hard to fire workers, so companies are reluctant to hire
• Generous and lengthy unemployment benefits can discourage jobless from seeking new work
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Global Employees and Labor Relations in South American Countries
• In countries such as Chile, collective bargaining for textile workers, miners, and carpenters is prohibited
• Unions are generally allowed only in companies of 25 workers or more
• Practice has encouraged businesses to split into small companies to avoid collective bargaining
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Global Legal and Political Factors
• Nature and stability of legal and political systems vary throughout the world
• Legal and political forces are unique to each country, and sometimes laws of one country contradict those of another
• HR regulations and laws vary greatly among countries
• Does operating under local laws and customs free a company of all ethical considerations?
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Tariffs and Quotas
• Tariffs: Taxes collected on goods shipped across national boundaries
• Quotas: Limits on the number or value of goods imported across national boundaries
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North American Free Trade Agreement (NAFTA)
• Between Canada, Mexico, and United States
• Facilitated movement of goods across boundaries within North America
• Free-trade zone of over 400 million people
• Combined gross domestic profit of about $12 trillion
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Central American Free Trade Agreement
• Ratified after long political battle, and signed into law in 2005
• Could provide huge economic boost for region
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Globalization for Small to Medium-Sized Businesses
• International sales have become vital and growing part of market for small to medium businesses
• United States has goal of doubling exports in 5 years, from $1.57 trillion in 2009 to $3.14 trillion in 2014
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