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International Human ResourceManagementChapter 7

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Learning Objectives

Define international human resource management (IHRM)Understand how corporate strategy influences IHRM

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Learning Objectives (cont.)

Explain major IHRM functions: recruitment and selection, training and development, performance evaluation, compensation and benefits, and labor relationsDiscuss additional concerns of managing expatriate employees

Major HRM FunctionsStaffing

Recruiting and selection

Training and developmentCompensation and benefits

Employee motivationPerformance evaluation

Labor relations

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Major Areas of International Human Resource Management

Management of human resources in global corporationsManagement of expatriate employeesComparison of human resource management (HRM) practices in a variety of different countries

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Approaches to Managing and Staffing Subsidiaries

EthnocentricPolycentricRegiocentricGeocentric/Global

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Choosing an Approach to IHRMCorporate international strategyPolitical and legal concernsLevel of development in foreign locationsTechnology and the nature of the productOrganizational life cycleCultural differences

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Recruitment and SelectionEmployee classification

Parent country national (PCN)Host country national (HCN)Third country national (TCN)

Managing and staffing approachesSelecting the right candidate

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Training and Development

Planned individual learning, organization development, and career developmentDelivery of programs worldwideDeveloping globally minded managers

Cultural Impacts on Training and Development Practices

Human resource development rolesAnalysis and designDevelopment and deliveryAdministration and environment

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Cross-Cultural Training Methods

Explain the major aspects of the host country culture, including customs, traditions, every daybehaviors.

Explain the history, geography, economy, politics, and other general information about thehost country and region.

Portray a real-life situation in business or personal life to illustrate some aspect of livingor working in the host culture.

Cultural Briefings

Area Briefings

Cases

Cross-Cultural Training Methods (cont.) Role Playing

Culture Assimilator

Field Experiences

Allows the trainee to act out a situation that heor she might face in living or working in thehost country.

Provides a written set of situations that the trainee might encounter in living or working inthe host country. Trainee selects one from a set of responses to the situation and is givenfeedback as to whether it is appropriate and why.

Provide an opportunity for the trainee to go tothe host country or another unfamiliar culture to experience living and working for a short time.

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How Situational Factors Influence the Selection of a CCT Method

Degree ofTrainingRigor

High

Low

High

LowLow High

Classroom Language TrainingFilms

FACTUALBooks

LecturesArea Briefings

Case StudiesCulture Assimilators

Sensitivity TrainingANALYTICAL

Interactive Language TrainingRole Plays

Field TripsSimulations

EXPERIENTIAL

Degree of Job Novelty

Degree ofCulture Novelty

Train

ing M

ethods

Degree of Interaction with Host Country Nationals

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Selection of ExpatriatesTechnical competenceAdaptabilityCommunication skillsFamily stabilityGender AgeEthnicity

Expatriate Failure Rates

U.S.: 10-40%Western Europe: 5-15%Japan: Less than 5%

Managing ExpatriatesExpatriate trainingCross-cultural adjustmentExpatriate evaluationExpatriate compensationReentry adjustment

Retaining the Expatriates

80% believe they would be promotedAbout 23% get the promotion20% want to leave the company upon returnAverage turnover cost is $250,000

Expatriate Reentry

Minimize “reverse cultural shock”Integrate the manager backinto the home officeAdjustments to a newor lower standard of livingAllow for reentry time

Performance EvaluationPurposeTimeframeStandardsFeedbackMarket conditionsEconomic factors

Compensation and Benefits

Salary-related and non-salary related factorsOrganizational philosophy and strategyCost to the organizationEmployee motivationCompany image

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Typical Expatriate BenefitsOverseas premiumHousing allowanceCost of living allowance (COLA)Moving expensesTuition for dependent educationHome leaveTax reimbursement plans

Labor RelationsLabor relations function

Identify and define roles of management and workers in the workplaceCollective bargaining

Union organizationsUnion membershipLabor law

Union Density Figures for a Selected Group of Countries

CountryPercentage of Union

MembershipCountry

Percentage of Union Membership

Argentina 28% Greece 30%

Brazil 13-30% Italy 15%

Canada 29.5% Japan 24.2%

Chile 12.3% Malaysia 9.1%

China 92% Mexico 25-30%

Costa Rica 15% New Zealand 34.4%

Egypt 50% Span 11%

France 8-10%United States

15.8%

Germany 39.5% Zimbabwe 17%

Source: U.S. Department of Labor, Bureau of International Labor Affairs, Foreign Labor Trends and Bureau of Labor Statistics, dates as indicated in the table.

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Convergence or Divergence?

Large corporations’ preference for consistent worldwide systemsSmaller companies’ desire for more professional systems

Need to follow local HRM lawsDevelopment of unique techniques and practices to suit local cultural and legal requirements

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Implications for ManagersEvery international manager has responsibility for effectively managing human resources, and therefore, must understand IHRM functionsIt is helpful to understand IHRM because of potential impact on your career