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INTERNATIONAL HUMAN RESOURCE MANAGEMENT
COMPONENTS OF HRM
• • • • • • Recruitment Selection Training & Development Performance Appraisal Compensation Labor Relations
INTERNATIONAL HRM (IHRM)
• Basic HRM issues remain • Must choose a mixture of international employees • How much to adapt to local conditions?
EMPLOYEES IN MULTINATIONAL ORGANIZATIONS
• • • • • Host country nationals Expatriates Home country nationals Third country nationals Inpatriates
MULTINATIONAL MANAGERS • Host country or expatriate? .
USING HOST COUNTRY MANAGERS • Do they have the expertise for the position? • Can we recruit them from outside the company? .
USING EXPATRIATE MANAGERS • Do parent country managers have the appropriate skills? • Are they willing to take expatriate assignments? • Do any laws affect the assignment of expatriate managers? .
•IS THE EXPATRIATE • High cost • High failure rate WORTH IT? .
•EXHIBIT 11.1 PAYING FOR THE EXPATRIATE MANAGER 400000 350000 300000 250000 $ 200000 150000 100000 50000 0 Home Salary Tokyo London Taipei Hong Kong Singapore .
EXPATRIATE FAILURE • • • • • Spouse fails to adapt Manager fails to adapt Other problems within the family Personality of the manager Level of responsibilities •REASONS FOR U.S. .
continued .•Reasons for expatriate • Lack of technical proficiency • No motivation for assignment failure.
•MOTIVATIONS TO USE • Managers acquire international skills • Coordinate and control operations dispersed activities • Communication of local needs/strategic information to headquarters EXPATS .
•KEY EXPATRIATE SUCCESS • • • • • Professional/technical competence Relational abilities Motivation Family situation Language skills FACTORS • Willingness to accept position .
SUCCESS FACTORS • Depends on : • assignment length • cultural distance • amount of required interaction with local people • job complexity/responsibility •PRIORITY OF .
•EXHIBIT 11.3 SHOWS A DECISION MATRIX USED TO SET PRIORITIES OR DIFFERENT SUCCESS FACTORS DURING SELECTION .
Expatriate Success Factors Longer Duration Professional/ Technical Skills Relational Abilities International Motivation Family Situation Language Skills High Assignment Characteristics Greater More Interaction More Cultural and Complex or DisCommunica.Responsimilarity tion sible Job Requirements with Locals Neutral Moderate High Moderate High High Moderate High High High High High High Neutral High Moderate High Moderate Neutral .
•EXPATRIATE TRAINING .
•TRAINING RIGOR • The extent of effort by trainees and trainers required to prepare the trainees for expatriate positions .
•LOW RIGOR TRAINING • • • • Short time period Lectures Videos on local culture Briefings on company operations company operations .
•HIGH RIGOR TRAINING • • • • Lasts over a month Experiential learning Extensive language training Often includes interactions with host country nationals .
•EXHIBIT 11.4 SHOWS VARIOUS TRAINING TECHNIQUES AND THEIR OBJECTIVES AS THE RIGOR OF THE CROSS.CULTURAL TRAINING GROWS .
. Objectives: Develop comfort with host country national culture. intensive language training.Techniques: Field trips to host country. meetings High with managers experienced Training in host country. meetings Rigor with host country nationals. and social institutions. business culture.
case Midstudies. simulations.Techniques: Experiential learning exercises. survival level language training. role playing. . reduce ethnocentrism. Training Rigor Objectives: General and specific knowledge of host country culture.
basic information on company operations. reading background material. Objectives: Provide Low background information on Training host country business and Rigor national cultures.Techniques: Lectures. videotapes. .
•CHALLENGES OF EXPATRIATE • Unreliable data • Complex and volatile environments • Time differences and distance separation • Local cultural situations PERFORMANCE APPRAISAL .
•STEPS TO IMPROVE THE PROCESS • 1. Use multiple evaluators with varying periods of evaluation . • 2. Fine tune the evaluation criteria • 3. Fit the evaluation criteria to strategy.
6 Shows several sources of information a superior or the HRM professionals may use to evaluate an expatriate managers .•EXHIBIT 11.
Evaluation Sources Self evaluation Criteria Meeting objectives Management skills Project successes Leadership skills Communication skills Subordinate development Team building Interpersonal skills Cross-cultural interaction skills Management skills Leadership skills Meeting objectives Service quality and timeliness Negotiation skills Cross-cultural interaction skills Periods Six months and at the completion of a major project After completion of major project Six months Subordinates Peer expatriate and host country manages On-site supervisor At the completion of significant projects Yearly Customers and clients .
COMPENSATION •EXPATRIATE .
SHEET APPROACH • Provides a compensation package •THE BALANCE that equates purchasing power .
•BALANCE SHEET COSTS • Allowances for cost of living. housing. educational expenses. furnishing. medical expenses. club memberships. utilities. and car and/or driver expenses .
settling in expenses. hardship pay. recreation. automobile. children’s education. foreign service premium. R&R Taxes Allowances to balance extra tax payments Goods and Services Allowances to cover cost of living differences. medical costs. home leave travel Housing Allowances for moving expenses. housing. and furnishing allowances Spendable Income Taxes Goods and Services = + = + Housing = + Spendable Income = . initial housing costs.Domestic Assignment Expenses and Spendable Income Base Salary Expatriate Assignment Expenses and Balanced Spendable Income + Allowances = + Base Salary Allowances as an incentive to take position.
APPROACHES •OTHER • Parent country wages everywhere • Wean expatriates from allowances • Pay based on local or regional markets • Cafeteria selection of allowances • Global pay systems .
•THE REPATRIATION • Difficult for many organizations • "Reverse culture shock" • Expatriates must relearn own national and organizational culture • Includes whole family PROBLEM .
•STRATEGIES FOR SUCCESSFUL REPATRIATION 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 .
TWO IMPORTANT "MYTHS" • Myth 1: women do not wish to take international assignments • Myth 2: women will fail in international assignments because of the foreign culture's prejudices against local women •WOMEN EXPATRIATES: .
•SUCCESSFUL WOMEN EXPATRIATES • Foreign not female • emphasize nationality not gender • The woman's advantage • strong in relational skills • wider range of interaction options .
STRATEGY AND IHRM •MULTINATIONAL .
•IHRM ORIENTATIONS • Ethnocentric • Polycentric • Regiocentric • Global .
MULTINATIONAL STRATEGY • Early stages of internationalization = ethnocentric IHRM • Multilocal strategies = ethnocentric or regiocentric • Regional strategy = closer to the global •IHRM ORIENTATION AND .
• International strategy = ethnocentric or polycentric IHRM • Transnational strategies = a global IHRM .
•CONCLUSIONS • • • • HRM functions IHRM challenges Expatriate managers The role of women in multinational organizations • Multinational strategies and IHRM orientations .