Managing Human Resources 4 th Canadian Edition Belcourt et al. PowerPoint Presentation by Charlie Cook and adapted by Monica Belcourt. © 2005 by Nelson, a division of Thomson Canada Limited.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–2 Objectives After studying this chapter, you should be able to: 1.Identify the types of organizational forms used for competing internationally. 2.Explain how domestic and international HRM differ. 3.Discuss the staffing process for individuals working internationally. 4.Identify the unique training needs for international assignees. 5.Reconcile the difficulties of home-country and host- country performance appraisals.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–3 Objectives (cont’d) After studying this chapter, you should be able to: 6.Identify the characteristics of a good international compensation plan. 7.Explain the major differences between Canadian and European labour relations.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–4 Increasing Importance of Global Human Resource Understanding International Mergers and Acquisitions Importance of Global Human Resources Management Importance of Global Human Resources Management Foreign Human Resources Global Competition Market Access Opportunities Presentation Slide 15–1

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–5

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–6 Managing Across Borders International corporation  Domestic firm that uses its existing capabilities to move into overseas markets. Multinational corporation (MNC)  Firm with independent business units operating in multiple countries. Global corporation  Firm that has integrated worldwide operations through a centralized home office. Transnational corporation  Firm that attempts to balance local responsiveness and global scale via a network of specialized operating units.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–7 Types of Organizations Figure 15.1 GLOBAL Views the world as a single market; operations are controlled centrally from the corporate office. GLOBAL TRANSNATIONAL Specialized facilities permit local responsiveness; complex coordination mechanisms provide global integration. TRANSNATIONAL MULTINATIONAL Several subsidiaries operating as stand-alone business units in multiple countries. MULTINATIONAL INTERNATIONAL Uses existing capabilities to expand into foreign markets. INTERNATIONAL LOCAL RESPONSIVENESS LowHigh GLOBAL EFFICIENCY Low High Presentation Slide 15–2

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–8 How International Companies Affect the World Economy Production and distribution extend beyond national boundaries, making it easier to transfer technology. They have direct investments in many countries, affecting the balance of payments. They have a political impact that leads to cooperation among countries and to the breaking down of barriers of nationalism.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–9 How Does the Global Environment Influence Management? Unified Economies  Closely partnered nations such as the European Union have developed into strong competitors.  Promotes job growth in trading nations. Cultural environment  The communication patterns, religion, values and ideologies, education, and social structure of a host country influence how HR is conducted in that country.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–10 The Nations of the European Union Figure 15.3

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–11 Cultural Environment of International Business Figure 15.4 Presentation Slide 15–3 Values/Ideologies Work ethic Time orientation Individualism/ collectivism Risk propensity Achievement Social Structure Kinship/family Mobility Nationalism Urbanization Social stratification Paternalism/ materialism Communication Language(s) Dialects Nonverbal Media Technology Education/ Human Capital Primary/ secondary Vocational Professional Literacy Religious Beliefs Denominations Totems/taboos Rituals Holy days

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–12 Domestic versus International HRM Issues in international HRM in helping employees adapt to a new and different environment outside their own country:  Relocation  Orientation  Objective  Translation services

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–13 International Staffing Expatriates, or Home-country Nationals  Employees from the home country who are on international assignment. Host-country Nationals  Employees who are natives of the host country. Third-country Nationals  Employees who are natives of a country other than the home country or the host country.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–14 Advantages in Sources of Overseas Managers Host-country Nationals  Less cost  Preference of host-country governments  Intimate knowledge of environment and culture  Language facility Home-country Nationals (Expatriates)  Talent available within company  Greater control  Company experience  Mobility  Experience provided to corporate executives Figure 15.5 Third-country Nationals  Broad experience  International outlook  Multilingualism Presentation Slide 15–4

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–15 Changes in International Staffing over Time Figure 15.6

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–16 Overseas Recruitment Issues Work Permit, or Work Certificate  Government document granting a foreign individual the right to seek employment. Guest Workers  Foreign workers invited to perform needed labour. Transnational teams  Teams composed of members of multiple nationalities working on projects that span multiple countries.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–17 Selecting Expatriates Begin with self-selection. Create a candidate pool. Assess core skills. Assess augmented skills and attributes.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–18 Measured Expatriate Characteristics Core Skills  Skills that are considered critical to an employee’s success abroad. Augmented Skills  Skills that are helpful in facilitating the efforts of expatriate managers. Failure rate  Percentage of expatriates who do not perform satisfactorily.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–19 Expatriate Selection Criteria Figure 15.7

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–20 Causes of Expatriate Assignment Failure Figure 15.8 Why Do Expats Fail? Family adjustmentPoor performance Lifestyle issuesOther opportunities arise Work adjustmentBusiness reasons Bad selectionRepatriation issues

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–21 Skills Of Expatriate Managers Core Skills  Experience  Decision making  Resourcefulness  Adaptability  Cultural sensitivity  Team building  Maturity Augmented Skills  Computer skills  Negotiation skills  Strategic thinking  Delegation skills  Change management HRM 3

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–22 Boosting ROI of Expatriates Better candidate selection32% Career planning skills26 Communicating objectives24 Assignment preparation20 Monitoring program17 Cross-cultural training10 Developing or expanding intranet7 Communication/recognition6 Web-based cultural training5 Mandating destination support4 Other17 Figure 15.9 Major initiatives planned to improve assignment return on investment (ROI): Source: Andrea Poe, “Selection Savvy,” HRMagazine 47, no. 4 (April 2002): 77–83.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–23 Training and Development Global Manager  A manager equipped to run an international business Skills of a Global Manager  Ability to seize strategic opportunities  Ability to manage highly decentralized organizations  Awareness of global issues  Sensitivity to issues of diversity  Competence in interpersonal relations  Skill in building community

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–24 Training Programs for International Managers Essential training program content to prepare employees for working internationally:  Language training  Cultural training  Assessing and tracking career development  Managing personal and family life Culture shock  Perpetual stress experienced by people who settle overseas

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–25 Preparing for an International Assignment 1.Social and business etiquette 2.History and folklore 3.Current affairs, including relations between the host country and Canada 4.Cultural values and priorities 5.Geography, especially its major cities 7.Sources of pride and great achievements of the culture 8.Religion and the role of religion in daily life 9.Political structure and current players 10.Practical matters such as currency, transportation, time zones, hours of business 11.The language Figure To prepare for an international assignment, one should become acquainted with the following aspects of the host country:

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–26 Training Methods Reviewing available information about the host company: books, magazines, video tapes. Conversations with host country natives. Sensitivity training to become familiar with the customs and overcome prejudices. Temporary assignments to encourage shared learning.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–27 A Synthesis of Country Clusters Figure Source: Simcha Ronen and Oded Shenkar, “Clustering Countries on Attitudinal Dimensions: A Review and Synthesis,” Academy of Management Review 10, no. 3 (July 1985): 435–54. Copyright Academy of Management Review. Reprinted with permission of the Academy of Management Review and the authors; permission conveyed through the Copyright Clearance Center, Inc.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–28 Returning from an Overseas Assignment Repatriation  The process of an employee transitioning home from an international assignment.  Throw a “welcome home” party.  Offer counseling to ease the transition.  Arrange conferences and presentations to make certain that knowledge and skills acquired away from home are identified and disseminated.  Get feedback from the employee and the family about how well the organization handled the repatriation process.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–29 Performance Appraisal of International Managers Who Should Appraise Performance?  Home-country evaluations  Host-country evaluations Adjusting Performance Criteria  Augmenting job duties  Individual learning  Organizational learning Providing Feedback  Debriefing interview Presentation Slide 15–5

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–30 Forces Driving Global Pay Cultural Preferences  Importance of status  Role of individual vs. organization vs. government  Equality vs. disparity  Achievement vs. relationships Economic Conditions  Size of economy  Types of industries, natural resources  Inflation, unemployment  Protectionism vs. open market Personal Preferences  Attitudes toward risk  Quality of life vs. work  Short- vs. long-term  Competitiveness vs. solidarity Social Constraints  Income tax rates, social costs  Laws and regulations  Collective bargaining, worker participation  Skills, education of work force Figure Source: Steven Gross and Per Wingerup, “Global Pay? Maybe Not Yet!” Compensation and Benefits Review 31, no. 4 (July/August 1999): 25–34.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–31 Hourly Wages * in Different Countries Figure *Hourly compensation costs in U.S. dollars for production workers in manufacturing Source: Department of Labor. Presentation Slide 15–6 COUNTRY$/HOUR Germany23.84 Norway23.13 Switzerland21.84 Belgium21.04 United States20.32 Japan19.59 Sweden18.35 Britain16.14 France15.88 Canada15.64 Italy13.76 Hong Kong13.53 Israel13.53 Australia13.15 Spain10.88 Korea8.09 Taiwan5.70 Brazil3.02 Mexico2.30 Sri Lanka0.48 COUNTRY$/HOUR Germany23.84 Norway23.13 Switzerland21.84 Belgium21.04 United States20.32 Japan19.59 Sweden18.35 Britain16.14 France15.88 Canada15.64 Italy13.76 Hong Kong13.53 Israel13.53 Australia13.15 Spain10.88 Korea8.09 Taiwan5.70 Brazil3.02 Mexico2.30 Sri Lanka0.48

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–32 Compensation of Expatriate Managers To be effective, an international compensation program must:  Provide an incentive to leave Canada.  Allow for maintaining a Canadian standard of living.  Facilitate reentry into Canada.  Provide for the education of children.  Allow for maintaining relationships with family, friends, and business associates. Presentation Slide 15–7

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–33 Expatriate Compensation Programs Balance-Sheet Approach A compensation system designed to match the purchasing power in a person’s home country 1.Calculate base pay. 2.Figure cost-of-living allowance (COLA). 3.Add incentive premiums. 4.Add relocation assistance programs.

Belcourt et al. 4 th Edition © 2005 by Nelson, a division of Thomson Canada Limited.15–34 International Organizations and Labour Relations International Differences in Unions  The level at which bargaining takes place (national, industry, or workplace).  The degree of centralization of union-management relations.  The scope of bargaining.  The degree to which government intervenes.  The degree of unionization.