1. Welcome to class of International Human Resource Management Dr
Welcome to class of International Human Resource Management Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg Canada

2. Learning Objectives Objectives: Creating a company “global mindset”
International HRM approaches
Recruitment selection and training
Expatriates
Compensation
Allowances
Bonus
Challenges

3. The Global Mindset Expatriate Global Mind-set
A person living outside citizenship country
Global Mind-set
A mind-set that combines an openness to and an awareness of diversity across markets and cultures with a propensity and ability to synthesize across this diversity

4. International HRM Approaches…
Ethnocentric
Hiring and promoting employees on the basis of parent company’s home country frame of reference
Bias of the home country
Top executives get foreign experience
Polycentric
Hiring and promoting employees on the basis of specific local context of the subsidiary
Movement between home and host country uncommon
Must give locals to elevated position revoke permit
Local supplier preferred
Managers unwilling to take promotion
Local managers may have their own agenda

5. International HRM Approaches
Regiocentric
Hiring and promoting employees on the basis of the specific regional context of the subsidiary
Hiring can be from both countries– home or host
Problem with third country employees
Geocentric
Hiring and promoting employees on the basis of ability and experience without considering race or citizenship
Best Practices

6. Recruitment, Selection and Training…
Parent Country National (PCNs) or Home Country National
Study of language and culture
Host Country National (HCN)
Hired in the host country
Third Country National

7. Recruitment, Selection and Training
Third Country National (TCN)
May accept lower wages and benefits than will employees from the home country
May also come from a culture similar to that of the host country
May have worked for another unit of the IC and be familiar with policies, procedures and people
Common approach in developing countries
May not be welcome by host country
May come from an international agency
Greater use as companies take geocentric view

8. Expatriates Family Nine of ten expatriate failures family-related
Unhappy spouses major reason for early return
Company losing a “million-dollar corporate-training investment” in executive

9. Language Training Language Trap
International business person speaks only home language
English language has become lingua franca
Chinese new “hot” language to know

10. Expatriate Services…
Health care programs to assist companies and expatriates with
Claims administration
Language
Translations
Currency conversions
Service standardization

11. Expatriate Services Banking services Training Culture and language
Online, 24-hour assistance
Training
Culture and language
House hunting, utilities hook up, grocery and hardware shopping, long-distance care for relatives, schools, organizations, and cultural items

12. Compensation example

13. Compensation Salaries
Paying home country nationals the same salaries as their domestic counterparts
permits worldwide consistency
bonuses
Increasing use of third country nationals- often treated like PCNs
Trend to pay HCNs same base

14. Allowances… Housing Allowance Cost-of-Living Allowance
Permits executive to live at same standard as at home
Cost-of-Living Allowance
Based on differences in price of food, utilities, transportation, entertainment, clothing, personal services, and medical expenses as compared to home
Allowances for Tax Differentials
Ensures expatriates will not have less after-tax pay at home

15. Allowances Education Allowances Moving and Orientation Allowances
Insures children receive education equal to that at home
Moving and Orientation Allowances
Household effects and language instruction

16. Bonuses
Bonuses
Expatriate employee compensation payments in addition to base salary and allowances because of hardship, inconvenience, or danger
Bonuses include
Overseas premiums
Contract termination payments
Home leave reimbursement

17. Compensation Packages
For expatriate employees, packages incorporate many types of payments or reimbursements and must take into consideration exchange rates and inflation

18. Compensation Packages Can Be Complicated
Allowances and percentage of base salary are usually paid in host country currency
Percentage usually 65 to 75 percent, with remainder banked where employee directs
What Exchange Rate?
Must be chosen
More difficult in countries with exchange controls and nonconvertible currencies

19. Compensation of Third Country Nationals
Trend toward applying the same compensation plan to third country nationals as home country expatriates
Problems can arise in
The calculation of income tax differential when American expatriate compared with expatriate from another country
Home leave bonus

20. International Status
Entitles expatriate employee to allowances and bonuses applicable to the place of residence and employment
Perks
Compensate executives while minimizing taxes
Private pension plan
Retirement payment
Life Insurance
Hidden slush funds (can be illegal)
Club membership
Company house
Foreign affiliate directorship