Policies and Practices

serve internationally to strengthen inter-unit linkages in numerous

ways, including:
• comprehensive human resource planning, ensuring that the MNE has
the appropriate people in place around the world at the right time;
• staffing policies that capitalize on the world-wide expertise of
expatriates, third country nationals (TCNs), and host-country
nationals (HCNs);
• performance appraisals that are anchored in the competitive
strategies of MNE headquarters and host units;
• compensation policies that are strategically and culturally relevant;
and
• training and development initiatives that prepare individuals to
operate effectively in their overseas locations and to co-operate with
other MNE units.
Challenges to managing the global workforce

(a) deployment;
(b) knowledge and innovation dissemination;
and
(c) talent identification and development.
 IHRM planning.
• Means of engineering effective inter-unit linkage, by
• Synchronizing the staffing, appraisal, and
compensation subsystems of IHRM.
• Such planning must be comprehensive and
responsive to the MNE’s industry characteristics,
product stage, organizational phase of international
development, global structure, and competitive
strategies .
 Critical human resource planning issues facing MNEs:

A. management potential at the earliest possible career stage

B. identifying critical success factors for the future international manager
C. providing developmental opportunities
D. tracking and maintaining commitments to individuals in international
career paths
E. tying strategic business planning to human resource planning, and vice
versa
F. dealing with the organizational dynamics of multiple (decentralized)
business units while attempting to achieve global and regional focused
strategies
G. providing meaningful assignments at the right time to ensure adequate
international and domestic human resources.
10 major planning and processing activities that international HR executives need to address:

• assignment and cost planning;

• candidate selection;
• assignment terms and condition documentation;
• relocation processing and vendor management;
• cultural and language orientation/training;
• compensation administration and payroll processing;
• tax administration;
• career planning and development;
• handling spouse and dependent matters; and
• immigration processing.
• how best to do them in an integrative manner through HR planning
initiatives is a major challenge for most MNEs
 IHR staffing.

• major IHRM practice that MNEs use to help co-

ordinate and control their far-flung global operations
• Traditionally, MNEs sent parent-country nationals
abroad to ensure that the policies and procedures of
the home office were being carried out to the letter
in foreign operations
• Costs constraints and career issues
• Reasons for using PCNs or expatriates
A. Protecting company interests;
B. broadening global perspectives;
C. providing functional perspectives;
D. broadening global knowledge;
E. Providing developmental assignments;
F. building local talent via PCN training;
G. orchestrating better career planning;
H. managing mature businesses;
I. and managing new and joint ventures.
J. MNEs remain concerned about the best way to identify
and select expatriates for foreign assignments
 Contd.
• the foreign assignment selection process should be
done more systematically without gender bias and
more strategically,
• The trend here appears to be in the direction of
developing a selection process based on the
identification of critical job dimensions (such as:
accept foreign assignments; spouse and family
support; knowledge of foreign language; adjustment
to living abroad; to foreign business practices;
establishing/maintaining business contacts; technical
competence; working with others; communicating;
initiative/effort; company support) and predictors that
can be used to increase the probability of success
 Contd.
• While the use of more TCNs and HCNs may solve
staffing needs, it raises concerns about the ability
to satisfy the needs of co-ordination and control
and the transfer of learning across regional units
• firms can redress such needs by
(a) establishing rules and procedures for HCNs or
TCNs to carry out or
(b) socializing the HCNs or TCNs to think and
behave like expatriates
 Repatriation
The quality of the repatriation process is viewed as critical to the
overall career success of expatriates.
It has also been linked to the adjustment process and turnover
of expatriates following their return home
• process of repatriation as having four phases:
• preparation, physical relocation, transition, and readjustment.
• it represents all the variables that potentially impact the
longevity and performance of the individual once repatriated.
• corporate values related to the importance of overseas
assignment to the organization, whether the organization has
a career development plan for repatriates, and the perceived
impact of corporate turbulence on being able to place
repatriates adequately upon their return as the main
predictors of repatriates turnover
 Socialization/MNE synergy
• Ethnocentric forces can compromise the MNE’s ability to
identify and benefit from cultural synergies in their operating
units.
• One means of combating management ethnocentrism would be
to engage more TCNs in preference to PCNs, individuals who
would be expected to have been previously socialized
• As MNEs become more global, their socialization process needs
to be less ethnocentric
• The personality characteristic of sociability and cross-cultural
adjustment.
• On the way to developing a global workforce and cadre of
global managers, MNEs need to open their recruitment process
and enhance the attractiveness of global assignments
 Appraising performance.
• dimensions of performance not specifically job-related, such
as cross cultural interpersonal qualities; sensitivity to foreign
norms, laws, and customs; adaptability to uncertain and
unpredictable conditions; and the host location’s integration
with other MNE units.
• performance appraisals of expatriates assigned for special
technical projects and short-term stays and of expatriate
manager
• performance appraisal of expatriate managers can be a critical
means whereby MNEs link their units together
• development of a common appraisal format
 Compensating the expatriate
• expatriates tend to have greater income security
• substantial disparity between the salary of PCNs and that of
HCNs or TCNs
• Some of the key issues to be investigated include the
following:
• A)develop pay structures that are cost-effective, fair, and
adaptable to different employee groups
• b)develop more culturally sensitive compensation schemes
that recognize country differences, yet equally motivating
and still equitable
• C)compensation better linked to the strategy and industry
characteristics of a given MNE
 Training and developing
• Seen key instrument of expatriate career
development, incorporating expatriate assignment
decisions and the repatriation process
• global firms can enhance their inter-unit linkages by
creating a pool of global managers with citizenship
from anywhere in the world
• Management development activities could be
housed in corporate or global headquarters with
local, regional, and other HR units assisting in
program design and delivery
 Developing global HR policies
• Centre’s responsibility and strategic interest
• Policies to facilitate inter-unit linkage and transfer of
learning, recognizing the needs of the local units.
• Host units to systematically analyze their own
environmental needs, and ensure that those factors are
folded into the process whereby global HR policies are
created
• As local units become more geographically and culturally
dispersed, it becomes more difficult for headquarters to
identify and track factors bearing on competitiveness.
 Auditing IHRM initiatives

• HR-related challenges
• HR audits conducted by assessing:
• (1) HR practices
• (2) HR professionals
• (3) HR function or department