MGT CLASS 20 - GLOBAL HRM Training and Developing a Global Work Force

Foreign Assignments - Practical Exercise Before you take on a foreign assignment, what would you want to know? What do you think are the positive career aspects of a foreign assignment? What do you think are the negative aspects of a foreign assignment Before you take on a foreign assignment, what would you want to know? What do you think are the positive career aspects of a foreign assignment? What do you think are the negative aspects of a foreign assignment

FOREIGN ASSIGNMENTS PRACTICAL EXERCISE RESPONSES 1.Cost of living differences 2. Affect on my career

International Assignment Thought Starters Positive aspects on an international assignment 1 – Impact on my career 2 – Living and working with other cultures 3 - Challenges

International Assignment Thought Starters Negative aspects on an international assignment 1 – Impact on my career 2 – Family concerns 3 – Lack of face time with peers & superiors 4 – Poor foreign language skills

Training and Developing a Global Workforce Training and development programs should be effective for all participating employees, regardless of their country of origin. The employer needs to provide employees with training in how to handle challenges associated with working in a foreign country. Training and development programs should be effective for all participating employees, regardless of their country of origin. The employer needs to provide employees with training in how to handle challenges associated with working in a foreign country.

Practical Hints For Delivering Training In Other Countries 1.Know your business and professional goals. 2.Consider international differences among trainees when developing the training plan. 3.Keep an eye on quality. 4.Be clear about standards for confidentiality and intellectual property. 5.Know local laws that affect training programs. 1.Know your business and professional goals. 2.Consider international differences among trainees when developing the training plan. 3.Keep an eye on quality. 4.Be clear about standards for confidentiality and intellectual property. 5.Know local laws that affect training programs.

Cross-Cultural Preparation Training to prepare employees and their family members for an assignment in a foreign country. Covers all three phases of an international assignment: 1.Preparation for departure 2.The assignment itself 3.Preparation for the return home Training to prepare employees and their family members for an assignment in a foreign country. Covers all three phases of an international assignment: 1.Preparation for departure 2.The assignment itself 3.Preparation for the return home

Performance Management Across National Boundaries When establishing performance management methods in other countries, consider: Legal requirements Local business practices National cultures When establishing performance management methods in other countries, consider: Legal requirements Local business practices National cultures Differences may include: Which behaviors are rated How and the extent to which performance is measured Who performs the rating How feedback is required Differences may include: Which behaviors are rated How and the extent to which performance is measured Who performs the rating How feedback is required

Compensating an International Workforce Market pay structures can differ substantially across countries in terms of both pay level and relative worth of jobs. Dilemma for global companies: Should pay levels and differences reflect what workers are used to in their own countries? Should pay levels and differences reflect the earnings of colleagues in the country of the facility, or earnings at the company headquarters? Market pay structures can differ substantially across countries in terms of both pay level and relative worth of jobs. Dilemma for global companies: Should pay levels and differences reflect what workers are used to in their own countries? Should pay levels and differences reflect the earnings of colleagues in the country of the facility, or earnings at the company headquarters?

Compensating an International Workforce Compensation decisions affect a company’s costs and ability to compete. Challenge of competing with organizations in low- wage countries can be very difficult. Decisions about benefits must take into account the laws of each country involved, as well as employees’ expectations and values in those countries. Compensation decisions affect a company’s costs and ability to compete. Challenge of competing with organizations in low- wage countries can be very difficult. Decisions about benefits must take into account the laws of each country involved, as well as employees’ expectations and values in those countries.

Figure 15.4: Average Hours Worked in Selected Countries

International Labor Relations Labor relations on an international scale involves differences in laws, attitudes, economic systems, and negotiation styles. Organizations establish overall policies and goals for labor relations, overseeing labor agreements, and monitoring labor performance. Day-to-day decisions about labor relations are usually handled by each foreign subsidiary. Labor relations on an international scale involves differences in laws, attitudes, economic systems, and negotiation styles. Organizations establish overall policies and goals for labor relations, overseeing labor agreements, and monitoring labor performance. Day-to-day decisions about labor relations are usually handled by each foreign subsidiary.

Managing Expatriates: Selecting Expatriate Managers They need to be technically competent in their area of operations; Ability to adapt to : 1.maintain a positive self-image and feeling of well- being 2.foster relationships with host-country nationals 3.perceive and evaluate the host country’s environment accurately They need to be technically competent in their area of operations; Ability to adapt to : 1.maintain a positive self-image and feeling of well- being 2.foster relationships with host-country nationals 3.perceive and evaluate the host country’s environment accurately

Assessing Candidates for Overseas Assignments MotivationHealthLanguage ability Family Considerations ResourcefulnessAdaptabilityCareer PlanningFinancial

Managing Expatriates - Preparing Expatriates Pre-assignment site visit Job orientation Country orientation Culture orientation Language training Compensation / benefits / taxes counseling Pre-assignment site visit Job orientation Country orientation Culture orientation Language training Compensation / benefits / taxes counseling Housing counseling Health care / schools / shopping / recreation counseling Counseling by returning expatriates Local sponsorship from host country Housing counseling Health care / schools / shopping / recreation counseling Counseling by returning expatriates Local sponsorship from host country

Compensating Expatriates Balance sheet approach – adjusts manager’s compensation so that it gives the manager same standard of living as in the home country plus extra pay for inconvenience of locating overseas. involves an effort by the global organization to ensure that its expatriates are “made whole.” Balance sheet approach – adjusts manager’s compensation so that it gives the manager same standard of living as in the home country plus extra pay for inconvenience of locating overseas. involves an effort by the global organization to ensure that its expatriates are “made whole.”

Figure 15.6: Balance Sheet for Determining Expatriate Compensation

Most / Least Expensive Foreign Locations Most ExpensiveLeast Expensive 1.TokyoKarachi 2.OsakaMumbai 3.SydneyNew Delhi 4.OsloKathmandu (Nepal) 5.MelbourneAlgiers 6.SingaporeBucharest 7.ZurichColombo (Sri Lanka) 8.ParisPanama City 9.CaracasJeddah 10.GenevaTehran

Most / Least Expensive Locations in the US MOST EXPENSIVELEAST EXPENSIVE 1.New York, NYIdaho Falls, ID 2.San Francisco, CAConway, AR 3.Stamford, CTSpringfield, IL 4.San Jose, CAPueblo, CO 5.San Diego, CAWichita Falls, TX 6.Santa Barbara, CAFayetteville, AR 7.Bakersfield, CAMemphis, TN 8.Los Angeles, CANorman, OK 9.Fresno, CAMcAllen, TX 10.Boston, MAHarlingen, TX

Salary Comparison Albany Salary = $60,000 Brooklyn$95,689 Boston$77,260 Chicago$63,850 Los Angeles$71,666 Dallas$52,657 Philadelphia$66,768 St. Louis$51,118

International Cost of Living Index Prague, Budapest & Ankara= 100 London= 280 Zurich= 256 New York City= 237 Paris= 219 Lima= 97 Warsaw= 91 Cape Town= 88 Delhi= 57 Caracas= 30

Compensating Expatriates After setting total pay, organization divides this amount into four components of total pay package: 1.Base salary 2.Tax equalization allowance 3.Benefits 4.Allowances After setting total pay, organization divides this amount into four components of total pay package: 1.Base salary 2.Tax equalization allowance 3.Benefits 4.Allowances

Expatriate Compensation - Rule of Thumb Equal to or better than US Compensation Base salary Incentive pay Taxes Benefits Housing allowances Education

Helping Expatriates Return Home Repatriation – process of preparing expatriates to return home from foreign assignment. 1.Communication: expatriate receives information and recognizes changes at home while abroad 2.Validation: giving expatriate recognition for overseas service when this person returns home. Repatriation – process of preparing expatriates to return home from foreign assignment. 1.Communication: expatriate receives information and recognizes changes at home while abroad 2.Validation: giving expatriate recognition for overseas service when this person returns home.

Repatriate Issues Reverse Culture Shock Re-establishing network (out of sight – out of mind) Old work customs may become boring Can’t use new skills in old environment

Repatriate Solutions 1. Planning Before foreign assignment During foreign assignment After foreign assignment 2.Career management What will this assignment do for my career What are my next steps in career progression 3.Compensation Removal of overseas pay and perks Financial counseling

Summary More companies are entering international markets by exporting and operating foreign facilities. Organizations need employees who understand customers, suppliers, local laws and customs in other countries and able to adapt their plans to local situations. Organizations may hire a combination of parent-country, host-country, and third- country nationals. More companies are entering international markets by exporting and operating foreign facilities. Organizations need employees who understand customers, suppliers, local laws and customs in other countries and able to adapt their plans to local situations. Organizations may hire a combination of parent-country, host-country, and third- country nationals.

Summary Another influence on international HRM is the foreign country’s political-legal system. A country’s economic system, as well as the government’s involvement in the economy, is a strong factor determining HRM practices. HR planning involves decisions about where and how many employees are needed for each international facility. Most foreign operations positions are filled with host-country nationals. Another influence on international HRM is the foreign country’s political-legal system. A country’s economic system, as well as the government’s involvement in the economy, is a strong factor determining HRM practices. HR planning involves decisions about where and how many employees are needed for each international facility. Most foreign operations positions are filled with host-country nationals.

Summary Organization must prepare the manager selected for an overseas assignment. Cross-cultural training for the assignment as well as preparation for repatriation after the assignment are critical success factors. Communication of changes at home and validation of a job well done abroad help expatriate through repatriation process. Organization must prepare the manager selected for an overseas assignment. Cross-cultural training for the assignment as well as preparation for repatriation after the assignment are critical success factors. Communication of changes at home and validation of a job well done abroad help expatriate through repatriation process.