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.

Reasons for expatriate

Lack of technical proficiency No motivation for assignment

failure, continued

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

Techniques: Field trips to host country, meetings High with managers experienced Training in host country, meetings Rigor with host country nationals, intensive language training. Objectives: Develop comfort with host country national culture, business culture, and social institutions.

Techniques: Experiential learning exercises, role playing, simulations, case Midstudies, survival level language training. Training Rigor Objectives: General and specific knowledge of host country culture, reduce ethnocentrism.

Techniques: Lectures, videotapes, reading background material. Objectives: Provide Low background information on Training host country business and Rigor national cultures, basic information on company operations.

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. Fit the evaluation criteria to strategy. 2. Fine tune the evaluation criteria 3. Use multiple evaluators with varying periods of evaluation

EXHIBIT 11.6 Shows several

sources of information a superior or the HRM professionals may use to evaluate an expatriate managers

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, utilities, furnishing, educational expenses, medical expenses, club memberships, and car and/or driver expenses

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, foreign service premium, hardship pay, R&R Taxes Allowances to balance extra tax payments Goods and Services Allowances to cover cost of living differences, housing, childrens education, medical costs, automobile, recreation, home leave travel Housing Allowances for moving expenses, settling in expenses, initial housing costs, and furnishing allowances Spendable Income

Taxes Goods and Services

= + = +

Housing

= +

Spendable Income

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