1. GLOBAL HUMAN RESOURCE MANAGEMENT
WEEK 12
GLOBAL
HUMAN RESOURCE MANAGEMENT

2. Human resource Management
Refers to the activities an organization carries out to use its human resources effectively
Strategic role: HRM policies should be congruent with the firm’s strategy and its formal and informal structure and controls
Four major tasks of HRM
Staffing policy
Management training and development
Performance appraisal
Compensation policy

3. HRM Phases Hiring Developing Appraising Rewarding Policy Policy
Ethnocentric
Polycentric
Developing
Geocentric
Appraising
Rewarding
Policy

4. International HRM
More difficult for international companies than domestic companies due to;
E nvironment differences
Organizational challenges
Task complicated by profound differences between countries in labor markets, culture, legal, and economic systems

5. Staffing Policy Staffing policy 3 types of Staffing Policy
Selecting individuals with requisite skills to do a particular job
Tool for developing and promoting corporate culture
3 types of Staffing Policy
Ethnocentric
Polycentric
Geocentric

6. Ethnocentric Policy
Key management positions filled by home-country nationals (headquarters)
Reason – believed that home country are superior than host countries
Advantages:
Overcomes lack of qualified managers in host nation
Unified culture
Helps transfer core competencies
Disadvantages:
Local managers unmotivated and demoralized
Impractical

7. Polycentric Policy Host-country nationals manage subsidiaries
Parent company nationals hold key headquarter positions
Best suited to multi-domestic businesses
Advantages:
Alleviates cultural myopia
Helps transfer core competencies
Increase employees moral
Disadvantages:
Limits opportunity to gain experience of host country nationals outside their own country
Can create gap between home and host country operations – accountability problems

8. Geocentric Policy
Seek best people for key jobs throughout the organization, regardless of nationality
Advantages:
Enables the firm to make best use of its human resources
Equips executives to work in a number of cultures
Helps build strong unifying culture and informal management network

9. Geocentric Policy Disadvantages: Costly to implement
National immigration policies may limit implementation
Expensive to implement due to training and relocation
Compensation structure can be a problem

10. STAFFING
expatriates (expats) - Nonnative employees who work in a foreign country
parent (home) country nationals (PCNs) - employees who come from the parent country of the multinational enterprise (MNE) and work at its local subsidiary
third country nationals (TCNs) - employees who come from neither the parent country nor the host country 10

11. The Expatriate
Expatriate: citizens of one country working in another country

12. 12

13. ROLES OF EXPATRIATES
strategists - representing interests of the MNE’s headquarters
daily managers - run operations, to build local capabilities and gain international management experience
ambassadors - representing headquarter’s interests in the subsidiaries and representing the interests of the subsidiaries when interacting with headquarters
trainers - for their replacements 13

14. Reasons for Expatriate Failure
US multinationals
Inability of spouse to adjust
Manager’s inability to adjust
Other family problems
Manager’s personal or emotional immaturity
Inability to cope with larger overseas responsibilities
European multinationals
Almost similar to the US
Japanese Firms
Inability to cope with larger overseas responsibilities
Difficulties with the new environment
Personal or emotional problems
Lack of technical competence
Inability of spouse to adjust

15. Expatriate Selection
Reduce expatriate failure rates by improving selection procedures
An executive’s domestic performance does not (necessarily) equate to his/her overseas performance potential
Employees need to be selected not solely on technical expertise, but also on cross-cultural fluency

16. PREPARATION EXPATRIATES
Pre-departure training
General country understanding – information about the host country
Culture sensitivity -
Practical skills – to be familiar with the routine life in the host country

17. Compensation expatriates
Two issues:
Pay executives in different countries according to the standards in each country or equalize pay on a global basis
Method of payment
Two issues are raised in every discussion of compensation practices in an international business. One is how compensation should be adjusted to reflect national differences in economic circumstances and compensation practices. The other issue is how expatriate managers should be paid. From a strategic perspective, the important point is that whatever compensation system is used, it should reward managers for taking actions that are consistent with the strategy of the enterprise.

18. Compensation in Various Countries
Table 18.3, p. 633

19. Components of Expatriate Pay
Base Salary
Same range as a similar position in the home country
Foreign service premium
Extra pay for work outside country of origin
Allowances
Hardship, housing, cost-of-living, and education allowances
Taxation
Firm pays expatriate’s income tax in the host country
Benefits
Level of medical and pension benefits identical overseas

20. 20

21. International Labor Relations
Key Issue
Degree to which organized labor can limit the choices of an international business
Aims to foster harmony and minimize conflicts between firms and organized labor

22. How labor actions respond to international companies?
union engage several tactics to encounter international companies bargaining power through cross-national cooperation in term of
exchanging information
coordination activities
calling upon transactional organization – through ILO