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CHAPTER 11

INTERNATIONALHUMAN

RESOURCE

MANAGEMENT

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COMPONENTS OFHRM

Recruitment

Selection Training & Development

Performance Appraisal

Compensation

Labor Relations

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INTERNATIONALHRM (IHRM)

Basic HRM issues remain

Must choose a mixture ofinternational employees

How much to adapt to local

conditions?

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EMPLOYEES INMULTINATIONALORGANIZATIONS

Host country nationals

Expatriates

Home country nationals

Third country nationals Inpatriates

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MULTINATIONALMANAGERS

Host country or expatriate?

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USING HOST COUNTRYMANAGERS

Do they have the expertise for

the position? Can we recruit them from outside

the company?

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USING EXPATRIATEMANAGERS

Do parent country managers havethe appropriate skills?

Are they willing to take expatriateassignments?

Do any laws affect the assignmentof expatriate managers?

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IS THE EXPATRIATEWORTH IT?

High cost

High failure rate

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EXHIBIT 11.1 PAYING FORTHE EXPATRIATE MANAGER

0

50000

100000

150000

200000

250000

300000

350000

400000

$

Home

Salary

Tokyo

Hong

Kong

London

Taipei

Singapore

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REASONS FOR U.S.EXPATRIATE FAILURE

Spouse fails to adapt

Manager fails to adapt Other problems within the family

Personality of the manager Level of responsibilities

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Lack of technical proficiency

No motivation for assignment

Reasons for expatriatefailure, continued

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MOTIVATIONS TO USEEXPATS

Managers acquire international

skills Coordinate and control operations

dispersed activities

Communication of localneeds/strategic information toheadquarters

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KEY EXPATRIATE SUCCESS

FACTORS Professional/technical competence

Relational abilities Motivation

Family situation

Language skills

Willingness to accept position

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PRIORITY OFSUCCESS FACTORS

Depends on :

assignment length cultural distance

amount of required interaction

with local peoplejob complexity/responsibility

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EXHIBIT 11.3 SHOWS ADECISION MATRIX USEDTO SET PRIORITIES ORDIFFERENT SUCCESS

FACTORS DURINGSELECTION

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Ass ignm ent Character is t ics

Expatriate

SuccessFactors

Longer

Durat ion

More

CulturalDis-

simi lar i ty

Greater

Interact ion

andCommunica-

t ion

Requi rements

wi th Loc als

More

Complex orRespon-

s ib le Job

Professional /Technical

Ski l ls

High Neutral Moderate High

Relational

Abi l i t ies

Moderate High High Moderate

International

Mot ivat ion

High High High High

Family

Si tuat ion

High High Neutral Moderate

Language

Ski l ls

Moderate High High Neutral

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EXPATRIATE TRAINING

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TRAINING RIGOR

The extent of effort by trainees

and trainers required to preparethe trainees for expatriatepositions

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LOW RIGORTRAINING

Short time period

Lectures Videos on local culture

Briefings on company operations

company operations

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HIGH RIGORTRAINING

Lasts over a month

Experiential learning Extensive language training

Often includes interactions with

host country nationals

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EXHIBIT 11.4 SHOWSVARIOUS TRAINING

TECHNIQUES AND THEIROBJECTIVES AS THE RIGOROF THE CROSS- CULTURAL

TRAINING GROWS

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Techniques: Field trips to

host country, meetings

with managers experienced

in host country, meetings

with host country

nationals, intensive

language training.

Objectives: Develop

comfort with host countrynational culture, business

culture, and social

institutions.

High

Training

Rigor

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Techniques:

Experiential learningexercises, role playing,

simulations, case

studies, survival

language training.

Objectives: General and

specific knowledge ofhost country culture,

reduce ethnocentrism.

Mid-

levelTraining

Rigor

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Techniques: Lectures,

videotapes, reading

background material.

Objectives: Provide

background information onhost country business and

national cultures, basic

information on companyoperations.

Low

Training

Rigor

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CHALLENGES OF EXPATRIATE

PERFORMANCE APPRAISAL Unreliable data

Complex and volatileenvironments

Time differences and distance

separation Local cultural situations

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EXHIBIT 11.6 Shows severalsources of information a

superior or the HRMprofessionals may use to

evaluate an expatriatemanagers

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Evaluation Sources Criteria Periods

Self evaluation Meeting objectives

Management skills

Project successes

Six months and at the

completion of a major

project

Subordinates Leadership skillsCommunication skills

Subordinate development

After completion ofmajor project

Peer expatriate and

host country manages

Team building

Interpersonal skills

Cross-cultural interactionskills

Six months

On-site supervisor Management skills

Leadership skills

Meeting objectives

At the completion of

significant projects

Customers and clients Service quality andtimeliness

Negotiation skills

Cross-cultural interaction

skills

Yearly

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EXPATRIATECOMPENSATION

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THE BALANCESHEET APPROACH

Provides a compensation packagethat equates purchasing power

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BALANCE SHEETCOSTS

Allowances for cost of living,housing, utilities, furnishing,educational expenses, medicalexpenses, club memberships, andcar and/or driver expenses

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Domest ic

Ass ignment

Expenses and

Spendable

Income

Expatr iate Assignment Expenses and

Balanced Spendable Income + Al lowances

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, childrens education, medical costs,

automobile, recreation, home leave travel

Housing = Housing

+

Allowances for moving expenses, settling in

expenses, initial housing costs, and furnishing

allowances

Spendable

Income= Spendable Income

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OTHERAPPROACHES

Parent country wages everywhere

Wean expatriates from allowances

Pay based on local or regionalmarkets

Cafeteria selection of allowances

Global pay systems

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THE REPATRIATIONPROBLEM

Difficult for many organizations

"Reverse culture shock" Expatriates must relearn own

national and organizational

culture Includes whole family

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STRATEGIES FOR SUCCESSFULREPATRIATION PROVIDE:

A strategic purpose for repatriation

A team to aid the expatriate

Home country information sources

Training and preparation for the

return Support for expatriate and family

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WOMEN EXPATRIATES:TWO IMPORTANT "MYTHS"

Myth 1: women do not wish totake international assignments

Myth 2: women will fail ininternational assignments

because of the foreign culture'sprejudices against local women

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SUCCESSFUL WOMENEXPATRIATES

Foreign not female

emphasize nationality not gender

The woman's advantage

strong in relational skills

wider range of interactionoptions

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MULTINATIONAL

STRATEGY AND IHRM

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IHRM ORIENTATION ANDMULTINATIONAL STRATEGY

Early stages ofinternationalization =

ethnocentric IHRM Multilocal strategies =

ethnocentric or regiocentric Regional strategy = closer to the

global

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International strategy =ethnocentric or polycentricIHRM

Transnational strategies = a

global IHRM

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CONCLUSIONS

HRM functions IHRM challenges Expatriate managers The role of women in

multinational organizations Multinational strategies and

IHRM orientations