1. Chapter 14 Global Human Resource Management
University of Bahrain
College of Business Administration
MGT 430 Human Resource Management Global Edition
Chapter 14 Global Human Resource Management
Copyright © 2014 Pearson Education
14-1
Dr. Mahnmood Asad
MGT430

2. Learning Objectives
Describe the impact of global bribery in the international arena.
Describe the evolution of global business and global strategic human resource management.
Explain some global issues confronting women.
Explain global staffing.
Describe global human resource development.
Dr. Mahnmood Asad
MGT430

3. Learning Objectives (Cont.)
Explain global compensation.
Describe global safety and health.
Explain global employee and labor relations.
Describe legal and political factors affecting global human resource management.
Describe possible advantages and disadvantages related to globalization for small and medium sized businesses.
Dr. Mahnmood Asad
MGT430

4. HRM in Action: Global Bribery, The Conviction List Grows
Foreign Corrupt Practices Act prohibits U.S. firms from bribing foreign officials
Not using bribery has been costly for American companies
Attacks of 9/11/2001 caused authorities to take closer look at financial data while searching for terrorists' funds
Found bribery corruption in the process
List of convictions under FCPA continues to grow
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Dr. Mahnmood Asad
MGT430

5. Evolution of Global Business
Not long ago, Mercedes-Benz was still a German company, General Electric was American, and Sony was Japanese
Many United States firms do most of their business and employ most of their workers outside U.S.
Many non-U.S. companies make products here
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Dr. Mahnmood Asad
MGT430

6. Evolution of Global Business
Exporting: Selling abroad retaining foreign agents and distributors
Licensing: Organization grants foreign firm right to use intellectual property
Franchising: Parent company grants another firm right to do business in prescribed manner
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Dr. Mahnmood Asad
MGT430

7. Evolution of Global Business (Cont.)
Multinational corporation: Firm based in one country that produces goods or provides services in one or more foreign countries
Global corporation: Corporate units in countries are integrated to operate as one organization worldwide
Transnational corporation: Moves work to places with talent to handle the job and time to do it at right cost
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Dr. Mahnmood Asad
MGT430

8. Global Professional in Human Resources
New certification for HRCI
Focuses on:
Strategic HR management
Global talent acquisition and mobility
Global compensation and benefits
Organizational effectiveness
Talent development
Workforce relations
Risk management
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Dr. Mahnmood Asad
MGT430

9. Global Human Resource Management
Functional areas similar to domestic HR
Manner in which they are implemented may differ
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Dr. Mahnmood Asad
MGT430

10. Environment of Global Human Resource Management
GLOBAL ENVIRONMENT
EXTERNAL ENVIRONMENT UNITED STATES
Unions
Society
INTERNAL ENVIRONMENT 1
Technology
Marketing
Operations
Legal Considerations
Staffing
Human Resource Management
Human Resource Development
Unanticipated Events
Political Parties
Employee and Labor Relations
Finance
Other Functional Areas
Compensation
Shareholders
Safety and Health
Economy
Customers
Competition
Labor Market
14-10
Dr. Mahnmood Asad
MGT430

11. Trends & Innovations: Global Issues Confronting Women
Some countries do not provide women equal access to jobs
Female talent is underutilized in emerging countries
Positive trends that have emerged regarding women working the global environment
Dr. Mahnmood Asad
MGT430

12. Global Staffing Types of global staff members
Approaches to global staffing
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13. Types of Global Staff Members
Expatriate: Employee working in firm who is not a citizen of country in which firm is located, but a citizen of country where organization is headquartered
Host-country national: Employee’s nationality same as location of subsidiary
Third-country national: Citizen of one country, working in second country, and employed by organization headquartered in third country
14-13
Dr. Mahnmood Asad
MGT430

14. Approaches to Global Staffing
Ethnocentric staffing: Primarily hiring expatriates for higher-level foreign positions
Polycentric staffing: More host-country nationals are used throughout the organization, from top to bottom
14-14
Dr. Mahnmood Asad
MGT430

15. Approaches to Global Staffing (Cont.)
Regiocentric staffing: Regional groups of subsidiaries reflect organization’s strategy and structure work as a unit
Geocentric staffing: Using worldwide integrated business strategy to hire the best person for the job
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Dr. Mahnmood Asad
MGT430

16. Recruiting Host-country Nationals
Should not assume that recruiting approaches that worked in parent company will be effective in recruiting host-country nationals
Example: Error that many recruiters make is believing that all countries in Europe are similar or the same
Dr. Mahnmood Asad
MGT430

17. Selecting Expatriates
Four distinct stages:
Self-selection
Creating a candidate pool
Technical skills assessment
Making a mutual decision
14-17
Dr. Mahnmood Asad
MGT430

18. Background Investigation
Conducting background investigations in other countries is equally, or more, important than in U.S.
Differences across cultures and countries often create barriers
Each country has own laws, customs, and procedures for background screenings
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Dr. Mahnmood Asad
MGT430

19. Global Human Resource Development
Pre-move orientation and training
Continual development: Online assistance and training
Repatriation orientation and training
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20. Expatriate Preparation and Development Program
Prior to Departure: Orientation and Training
During Assignment: Continual Development
Near Completion: Repatriation Orientation Training
Expanding Skills Career Planning Home-Country Development
U.S. Lifestyle U.S. Workplace U.S. Employees
Language Culture History Local Customs Living Conditions
14-20
Dr. Mahnmood Asad
MGT430

21. Pre-move Orientation and Training
Essential before global assignment begins
Expatriate need to understand cultural do’s and don’ts and be immersed in language
Employee’s global skills are fitted into career planning and corporate development programs
Dr. Mahnmood Asad
MGT430

22. Continual Development: Online Assistance and Training
Companies now offer online assistance and training in areas such as career services, cross-cultural training, and employee assistance programs
Technology can be used to provide ongoing contact and support
Dr. Mahnmood Asad
MGT430

23. Repatriation Orientation and Training
Repatriation: Process of bringing expatriates home
Too many returning managers report dissatisfaction with process
Some expatriates are not even guaranteed a job upon their return
Dr. Mahnmood Asad
MGT430

24. Global E-Learning
Globalization has created special need for e-learning
Challenges for global e-learning implementation include language and localization issues
Companies that want to offer courses in several languages usually turn to translators
14-24
Dr. Mahnmood Asad
MGT430

25. Virtual Teams in Global Environment
Necessity of everyday working life
Enable companies to accomplish things more quickly and efficiently
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26. Difficulties that Virtual Teams Confront
Do not feel as connected or committed to team
Communication problems directly proportional to number of time zones separating them
Language and culture problems
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27. Compensation for Host-Country Nationals
Organizations should think globally but act locally
Normally slightly above prevailing wage rates in area
Variations in laws, living costs, tax policies, and other factors must be considered
14-27
Dr. Mahnmood Asad
MGT430

28. Compensation for Host-Country Nationals (Cont.)
Factors to consider:
Minimum wage requirements
Working time information such as annual holidays and vacation time and pay
Hiring and termination rules
Regulations covering severance practices
14-28
Dr. Mahnmood Asad
MGT430

29. Compensation for Host-Country Nationals (Cont.)
Culture often plays a part
North American practices encourage individualism and high performance
Continental European programs typically emphasize social responsibility
Traditional Japanese approach considers age and company service as primary determinants of compensation
14-29
Dr. Mahnmood Asad
MGT430

30. Expatriate Compensation
Largest expatriate costs include overall remuneration, housing, cost-of-living allowances, and physical relocation
U.S. citizens living overseas can exclude up to $92,900 of income earned abroad
Additional challenges: Devaluation of U.S. dollar
14-30
Dr. Mahnmood Asad
MGT430

31. Global Safety and Health
Employees who work in safe environment and enjoy good health more likely to be productive
U.S.-based global operations are often safer and healthier than host-country operations
Not as safe as similar operations in U.S.
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32. Global Safety Programs
Global companies continue to face global safety risks
Bhopal Disaster of 1984 was worst industrial disaster in history
Companies have discovered way they treat their workers anywhere on planet can pose risk to their corporate reputation
Employers should also be concerned with health issues for host-country nationals
14-32
Dr. Mahnmood Asad
MGT430

33. Global Employees and Labor Relations
Strength and nature of unions differ from country to country
Ranges from nonexistent to relatively strong
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34. Global Employees and Labor Relations in European Countries
Codetermination: Requires firms to have union or worker representatives on their boards of directors
Laws make it hard to fire workers, so companies are reluctant to hire
Generous and lengthy unemployment benefits can discourage jobless from seeking new work
14-34
Dr. Mahnmood Asad
MGT430

35. Global Employees and Labor Relations in South American Countries
In countries such as Chile, collective bargaining for textile workers, miners, and carpenters is prohibited
Unions are generally allowed only in companies of 25 workers or more
Practice has encouraged businesses to split into small companies to avoid collective bargaining
14-35
Dr. Mahnmood Asad
MGT430

36. Global Legal and Political Factors
Nature and stability of legal and political systems vary throughout the world
Legal and political forces are unique to each country, and sometimes laws of one country contradict those of another
HR regulations and laws vary greatly among countries
Does operating under local laws and customs free a company of all ethical considerations?
14-36
Dr. Mahnmood Asad
MGT430

37. Tariffs and Quotas
Tariffs: Taxes collected on goods shipped across national boundaries
Quotas: Limits on the number or value of goods imported across national boundaries
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Dr. Mahnmood Asad
MGT430

38. North American Free Trade Agreement (NAFTA)
Between Canada, Mexico, and United States
Facilitated movement of goods across boundaries within North America
Free-trade zone of over 400 million people
Combined gross domestic profit of about $12 trillion
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Dr. Mahnmood Asad
MGT430

39. Central American Free Trade Agreement
Ratified after long political battle, and signed into law in 2005
Could provide huge economic boost for region
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40. Globalization for Small to Medium-Sized Businesses
International sales have become vital and growing part of market for small to medium businesses
United States has goal of doubling exports in 5 years, from $1.57 trillion in 2009 to $3.14 trillion in 2014
Dr. Mahnmood Asad
MGT430