Ch13-Managing HR Globally

Fundamentals of
Human Resource
Management
2e
Gary Dessler
Managing HR Globally
Chapter 13
13-2
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
When you finish studying this chapter,
you should be able to:
1. List the HR challenges of international business.
2. Illustrate how intercountry differences affect HRM.
3. Explain why foreign assignments fail and what to do
to minimize the problems.
4. List and describe the basic steps in training
employees whom the employer is about to transfer
abroad.
5. Explain the main things to keep in mind when
designing and implementing a global HR system.
13-3
HR and the Internationalization of
Business
Managers now must formulate and execute
their market, product, and production plans
on a worldwide basis.
Even employees who never leave the home
office may need to be “internationalized.”
13-4
The Human Resource Challenges of
International Business
Deployment
∟ Getting the right people skills to where the
company needs them, regardless of geographic
location
Knowledge and innovation dissemination
∟ Spreading state-of-the-art knowledge and
practices throughout the company, regardless of
where they originate.
13-5
The Human Resource Challenges of
International Business
Identifying and
developing talent on a
global basis
∟ Identifying the firm’s
top talent, and
developing employees’
abilities
13-6
What Is International Human Resource
Management?
International human resource management
∟ The human resource management concepts and
techniques employers use to manage the human
resource challenges of their international
operations
13-7
Focus of International Human
Resource Management
1. Managing human resources in global
companies
2. Managing expatriate employees
3. Comparing human resource management
practices in a variety of different countries
13-8
How Intercountry Differences Affect
Human Resource Management
The need to adapt personnel policies and
procedures to the differences among
countries complicates human resource
management in multinational companies.
For example, minimum mandated holidays
range from none in the United Kingdom to
five weeks per year in Luxembourg.
13-9
Cultural Factors
• Assertiveness • Future orientation

 How much people in a  The level of
society are expected to importance a society
be tough, attaches to future-
confrontational, and oriented behaviors,
competitive such as planning and
investing in the future
13-10
Cultural Factors
• Performance • Humane orientation

orientation  The extent to which a
 The importance of society encourages
performance and rewards people
improvement and for being fair, altruistic,
excellence in a society and kind
13-11
Legal and Political Factors
Works councils
∟ Formal, employee-elected groups of worker
representatives that meet monthly with
managers to discuss topics ranging, for instance,
from no-smoking policies to layoffs.
13-12
Legal and Political Factors
Co-determination
∟ The right to a voice in setting company policies;
workers generally elect representatives to the
supervisory board
13-13
Legal and Political Factors Example
After spending billions expanding into

Germany, Walmart discovered that
Germany’s commercial laws discourage ads
based on price comparisons.
It soon left Germany.
13-14
Economic Systems: Europe
 Most EU countries have minimum wage systems

in place.
 The EU sets the workweek at 48 hours, but most
countries set it at 40 hours a week, and France
has implemented a 35-hour workweek.
 The U.S. practice of employment at will does not
exist in Europe, where firing and laying off
workers is usually time-consuming and
expensive.
13-15
Economic Systems: China
China’s new labor contract law adds

numerous new employment protections for
employees, and makes it correspondingly
more expensive for employers in China to
implement personnel actions, such as layoffs.
13-16
International Staffing: Home or Local?
• Expatriates • Host country

 Employees a company nationals
posts abroad who are  Citizens of the country
not citizens of the in which the
country in which they multinational company
are working has its headquarters
13-17
International Staffing: Home or Local?
• Locals • Third-country
 Employees that work nationals
for the company  Citizens of a country
abroad and are citizens other than the parent
of the countries in or host country
which they are
working; also known
as host country
nationals
13-18
Why Local?
Necessity
Politics Cost
13-19
Why Expats?
Employers often can’t find local candidates

with the required technical qualifications.
Companies also view a successful stint abroad
as a required step in developing top
managers.
13-20
Offshoring
13-21
Values and International Staffing Policy
Ethnocentric
∟ A management philosophy that leads to the
creation of home market-oriented staffing
decisions
Polycentric
∟ A management philosophy oriented toward
staffing positions with local talent
13-22
Values and International Staffing Policy
Geocentric
∟ A staffing policy that
seeks the best people
for key jobs
throughout the
organization,
regardless of
nationality
13-23
Selecting International Managers
Testing
∟ Overseas Assignment Inventory
Realistic previews
∟ Allows for more informed decision
Adaptability screening
∟ Aims to assess the assignee’s probable success in
handling the foreign transfer, and to alert the
assignee to issues the move may involve
13-24
Selection Trends
An increase in the number of selection

criteria companies in Germany, Japan, the
United States, and the United Kingdom use to
select expatriates
Big decline in U.S. companies’ premature
return rates
13-25
How International Assignments
Succeed
Firms focus their assignments on knowledge
creation and global leadership development.
Firms assign people overseas whose technical
skills are matched or exceeded by their cross-
cultural abilities.
Expatriate assignments include a deliberate
repatriation process.
13-26
Some Practical Solutions to the
Expatriate Challenge
13-27
Cross-Cultural Training
Level 1
∟ Focuses on the impact of cultural differences and
on raising trainees’ awareness of such differences
and their impact on business outcomes
Level 2
∟ Aims to get participants to understand how
attitudes form and influence behavior
13-28
Cross-Cultural Training
Level 3
∟ Provides factual knowledge about the target
country
Level 4
∟ Provides skill building in areas like language and
adjustment and adaptation skills
13-29
Typical Cross-Cultural
Training Methods: Figure 13.2
13-30
Trends in Expatriate Training and
Development
More firms are providing continuing, in-
country cross-cultural training during the
early stages of the overseas assignment.
Employers are using returning managers as
resources.
Employers increasingly use the Internet for
cross-cultural training.
13-31
Corporate Programs to Develop
Global Managers: Figure 13.3
13-32
International Compensation
Balance sheet approach

∟ Focuses on four main home country groups of
expenses—income taxes, housing, goods and
services, and discretionary expenses
∟ Estimates what each of these four expenses
would be in the expatriate’s home country, and
what each will be in the host country
∟ Pays any differences—such as additional income
taxes or housing expenses
13-33
The Balance Sheet Approach
13-34
Typical Expatriate Pay
Premiums and Benefits: Figure 13.4
13-35
Establishing a Global Pay System
The aim of the employer’s global rewards program is to

ensure three things:
1. The pay policies in each geographic location
contribute to motivating the employee behaviors
the company needs in order to achieve its strategic
plan
2. The separate geographic area compensation plans
are consistent with each other
3. The compensation plans are responsive to local
conditions
13-36
Steps in Designing a
Global Pay Plan: Figure 13.5
13-37
Performance Appraisal of International
Managers
1. Adapt the performance criteria to the local job
and situation.
2. Weigh the evaluation more toward the on-site
manager’s appraisal than toward the home-site
manager’s.
3. If the home-office manager does the actual
written appraisal, have him or her use a former
expatriate from the same overseas location for
advice.
13-38
Safety and Fair Treatment Abroad
Provide expatriates with training about

traveling, living abroad, and the place they’re
going, so they’re more oriented
Tell them not to draw attention to the fact
that they’re Americans
Have travelers arrive at airports as close to
departure time as possible and wait in areas
away from the main flow of traffic
13-39
Safety and Fair Treatment Abroad
Equip the expatriate’s car

and home with adequate
security systems
Tell employees to vary
their departure and arrival
times and take different
routes
Advise employees to act
confidently at all times
13-40
Steps in Repatriation
1. The firm matches the expat and his family with a

psychologist trained in repatriation issues.
2. The program makes sure that the employee
always feels that he or she is still “in the loop”
with what’s happening back at the home office.
3. Once it’s time for the expat employee and his or
her family to return home, there’s a formal
repatriation service.
13-41
Developing a More Effective
Global HR System
Form global HR networks
Remember that it’s more important to
standardize ends and competencies than
specific methods
13-42
Making the Global HR System More
Acceptable
Remember that truly global organizations find
it easier to install global systems
Investigate pressures to differentiate and
determine their legitimacy
Try to work within the context of a strong
corporate culture
13-43
Implementing the Global HR System
“You can’t communicate enough”

Dedicate adequate resources
13-44
Improving Productivity through HRIS:
Taking the HRIS Global
 When Buildnet, Inc., decided to automate and
integrate its separate systems for things like
applicant tracking, training, and compensation, it
chose a web-based software package called
MyHRIS, from NuView, Inc.
(www.nuviewinc.com).
 With MyHRIS, managers at any of the firm’s
locations around the world can access and
update more than 200
built-in reports.
13-45
Copyright
All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
13-46

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Fundamentals of

• Assertiveness • Future orientation

• Performance • Humane orientation

After spending billions expanding into

 Most EU countries have minimum wage systems

China’s new labor contract law adds

• Expatriates • Host country

Employers often can’t find local candidates

An increase in the number of selection

Balance sheet approach

The aim of the employer’s global rewards program is to

Provide expatriates with training about

Equip the expatriate’s car

1. The firm matches the expat and his family with a

“You can’t communicate enough”

All rights reserved. No part of this publication may be reproduced, stored in a

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