CHAPTER 11 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 WORTH IT? ‡ High cost ‡ High failure rate .

1 PAYING FOR THE EXPATRIATE MANAGER 400000 350000 300000 250000 $ 200000 150000 100000 50000 0 Hong Kong Home Salary Tokyo London Taipei Singapore .‡EXHIBIT 11.

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.

‡Reasons for expatriate failure. continued ‡ Lack of technical proficiency ‡ No motivation for assignment .

‡MOTIVATIONS TO USE EXPATS ‡ Managers acquire international skills ‡ Coordinate and control operations dispersed activities ‡ Communication of local needs/strategic information to headquarters .

‡KEY EXPATRIATE SUCCESS FACTORS ‡ ‡ ‡ ‡ ‡ Professional/technical competence Relational abilities Motivation Family situation Language skills ‡ Willingness to accept position .

‡PRIORITY OF SUCCESS FACTORS ‡ Depends on : ‡ assignment length ‡ cultural distance ‡ amount of required interaction with local people ‡ job complexity/responsibility .

3 SHOWS A DECISION MATRIX USED TO SET PRIORITIES OR DIFFERENT SUCCESS FACTORS DURING SELECTION .‡EXHIBIT 11.

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 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.

‡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 CROSSTRAINING GROWS .

b sin ss c lt r . n s ci l instit ti ns. m tin s wit m n rs xp ri nc in st c ntry. . m tin s wit st c ntry n ti n ls.i Tr inin Ri r Techni es: Fi l trips t st c ntry. Objecti es: D v l p c mf rt wit st c ntry n ti n l c lt r . int nsiv l n tr inin .

. a e Midtudie . i ulatio . rai i g igor bjectives: Ge eral a d pe ifi k o ledge of ho t ou tr ulture.Techniques: Experie tial lear i g exer i e . ur i al le el la guage trai i g. redu e eth o e tri . role pla i g.

readi g a kgrou d aterial. ideotape . bjectives: Pro ide a kgrou d i for atio o Lo rai i g ho t ou tr u i e a d atio al ulture . a i igor i for atio o o pa operatio .Techniques: Le ture . .

‡CHALLENGES OF EXPATRIATE PERFORMANCE APPRAISAL ‡ Unreliable data ‡ Complex and volatile environments ‡ Time differences and distance separation ‡ Local cultural situations .

Fine tune the evaluation criteria ‡ 3.‡STEPS TO IMPROVE THE PROCESS ‡ 1. Use multiple evaluators with varying periods of evaluation . Fit the evaluation criteria to strategy. ‡ 2.

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 .

‡EXPATRIATE COMPENSATION .

‡THE BALANCE SHEET APPROACH ‡ Provides a compensation package that equates purchasing power .

furnishing. educational expenses. club memberships. and car and/or driver expenses .‡BALANCE SHEET COSTS ‡ Allowances for cost of living. medical expenses. housing. utilities.

re reatio . ho e lea e tra el Hou i g Allo a e for o i g expe e . i itial hou i g o t . hou i g. a d fur i hi g allo a e Spe da le I o e axe Good a d Ser i e = + = + Hou i g = + Spe da le I o e = . edi al o t . auto o ile. foreig er i e pre iu . ettli g i expe e . & axe Allo a e to ala e extra tax pa e t Good a d Ser i e Allo a e to o er o t of li i g differe e . hildre ¶ edu atio .Domestic Assignment Expenses and Spendable Income Ba e Salar Expatriate Assignment Expenses and Balanced Spendable Income + Allowances = + Ba e Salar Allo a e a a i e ti e to take po itio . hard hip pa .

‡OTHER APPROACHES ‡ Parent country wages everywhere ‡ Wean expatriates from allowances ‡ Pay based on local or regional markets ‡ Cafeteria selection of allowances ‡ Global pay systems .

‡THE REPATRIATION PROBLEM ‡ Difficult for many organizations ‡ "Reverse culture shock" ‡ Expatriates must relearn own national and organizational culture ‡ Includes whole family .

‡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 .

‡WOMEN EXPATRIATES: 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 .

‡SUCCESSFUL WOMEN EXPATRIATES ‡ Foreign not female ‡ emphasize nationality not gender ‡ The woman's advantage ‡ strong in relational skills ‡ wider range of interaction options .

‡MULTINATIONAL STRATEGY AND IHRM .

‡IHRM ORIENTATIONS ‡ Ethnocentric ‡ Polycentric ‡ Regiocentric ‡ Global .

‡IHRM ORIENTATION AND MULTINATIONAL STRATEGY ‡ Early stages of internationalization = ethnocentric IHRM ‡ Multilocal strategies = ethnocentric or regiocentric ‡ Regional strategy = closer to the global .

‡ 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 .

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