1. Hiring and Managing Employees 16 Copyright © 2014 Pearson Education, Inc.

2. 16 - 2 Copyright © 2014 Pearson Education, Inc. Explain the three different types of staffing policies used by international companies Describe the recruitment and selection issues facing international companies Discuss the importance of training and development programs, especially cultural training Explain how companies compensate managers and workers in international markets Describe the importance of labor-management relations and how they differ around the world Chapter Objectives

3. 16 - 3 Copyright © 2014 Pearson Education, Inc. Intel 83,000 employees in 45 facilities worldwide Issues of recruitment, selection, salary, etc. All employees take part in cultural training

4. 16 - 4 Copyright © 2014 Pearson Education, Inc. International HRM Culture affects Expatriate managers Recruitment and selection Training and development Compensation Labor relations Staffing policy

5. 16 - 5 Copyright © 2014 Pearson Education, Inc. Ethnocentric Staffing Advantages + Locally qualified people not always available + Tight control over subsidiaries + Ease the transfer of special know-how + Guard a company from industrial espionage – Relocations are expensive – Can give the business a “foreign” image Disadvantages Individuals from home country manage operations abroad

6. 16 - 6 Copyright © 2014 Pearson Education, Inc. Polycentric Staffing Advantages + Responsibility on those knowing local business + Avoid expensive relocations from other nations – May resemble a collection of national entities – Can potentially harm performance Disadvantages Individuals from host country manage operations abroad

7. 16 - 7 Copyright © 2014 Pearson Education, Inc. eBay in India Source: Reuters/Vivek Prakash Local cultural knowledge + Business acumen = Success

8. 16 - 8 Copyright © 2014 Pearson Education, Inc. Geocentric Staffing Advantages + Managers who can adjust anywhere + Break down nationalistic barriers – These individuals command high salaries Disadvantage Best-qualified individuals, regardless of nationality, manage operations abroad

9. 16 - 9 Copyright © 2014 Pearson Education, Inc. Discussion Question What are the three different types of international staffing policies that companies can implement?

10. 16 - 10 Copyright © 2014 Pearson Education, Inc. Answer to Discussion Question In ethnocentric staffing, operations abroad are managed by individuals from the home country. In polycentric staffing, operations abroad are managed by individuals from the host country. In geocentric staffing, operations abroad are managed by the best-qualified individuals regardless of nationality.

11. 16 - 11 Copyright © 2014 Pearson Education, Inc. Human Resource Planning Phase 1Phase 2Phase 3 Take inventory of current human resources Estimate firm’s future human resource needs Develop plan to recruit and select people for vacant and anticipated new positions Forecasting human resource needs and supply

12. 16 - 12 Copyright © 2014 Pearson Education, Inc. Tips for Going Global Going global can severely strain the resources of firms Do not rely solely on home-country expatriates Local contacts do not guarantee contracts Treat employees abroad with respect Employ the Web in your talent search

13. 16 - 13 Copyright © 2014 Pearson Education, Inc. Recruiting Human Resources  Recent college graduates  Local managerial talent  Nonmanagerial workers  Current employees Process of identifying and attracting a qualified pool of applicants for vacant positions

14. 16 - 14 Copyright © 2014 Pearson Education, Inc. Selecting Human Resources  Ability to bridge cultural differences is key  Expatriates must adapt to new ways of life  Assess cultural sensitivity of job candidates Process of screening and hiring the best-qualified applicants with the greatest performance potential

15. 16 - 15 Copyright © 2014 Pearson Education, Inc. Stage I: Thrilling experience Stage II: Downward slide Stage III: Recovery begins Stage IV: Embrace local culture Culture Shock Psychological process affecting people living abroad that is characterized by homesickness, irritability, confusion, aggravation, and depression

16. 16 - 16 Copyright © 2014 Pearson Education, Inc. Reverse Culture Shock Readapting to home culture Reducing its effects  Once-natural thoughts and feelings now strange  Can be more unsettling than culture shock  Some companies reabsorb expatriates poorly  Home-culture reorientation programs  Career-counseling sessions  Career-development program before posting abroad

17. 16 - 17 Copyright © 2014 Pearson Education, Inc. Discussion Question The psychological process of re-adapting to one’s home culture is called __________. a. Ethnocentric shock b. Culture shock c. Reverse culture shock

18. 16 - 18 Copyright © 2014 Pearson Education, Inc. Answer to Discussion Question The psychological process of re-adapting to one’s home culture is called __________. a. Ethnocentric shock b. Culture shock c. Reverse culture shock

19. 16 - 19 Copyright © 2014 Pearson Education, Inc. Cultural Training Methods

20. 16 - 20 Copyright © 2014 Pearson Education, Inc. Compiling a Cultural Profile CultureGrams Background Notes Country Studies Area Handbooks

21. 16 - 21 Copyright © 2014 Pearson Education, Inc. Worker Training Emerging markets Basic skills training Apprenticeship training

22. 16 - 22 Copyright © 2014 Pearson Education, Inc. Compensation of Managers Bonus and tax incentives Bonus and tax incentives Cultural and social factors Cultural and social factors Cost-of-living effects Cost-of-living effects

23. 16 - 23 Copyright © 2014 Pearson Education, Inc. Compensation of Workers Labor mobility in some markets Labor mobility in some markets Greater cross- border investment Greater cross- border investment

24. 16 - 24 Copyright © 2014 Pearson Education, Inc. Discussion Question What types of cultural training methods can help prepare managers for international assignments?

25. 16 - 25 Copyright © 2014 Pearson Education, Inc. Answer to Discussion Question The main methods of cultural training used to prepare managers for international assignments include environmental briefings, cultural orientations, cultural assimilation, sensitivity training, language training, and field experience.

26. 16 - 26 Copyright © 2014 Pearson Education, Inc. Labor-Management Relations  Intertwined nature  Rooted in local culture  Often affected by political movements Positive or negative relations between a company’s management and its workers Source: Z1015/_Bernd Settnik/Newscom

27. 16 - 27 Copyright © 2014 Pearson Education, Inc. Selection of a location Selection of a location Performance in a market Performance in a market Emerging markets Emerging markets Codetermination in Germany Codetermination in Germany Labor Unions

28. 16 - 28 Copyright © 2014 Pearson Education, Inc. But can be difficult Workers in different nations often compete Some say this lowers wages and union power International Labor Movements International activities of unions are improving treatment of workers and reducing child labor

29. 16 - 29 Copyright © 2014 Pearson Education, Inc. Discussion Question The positive or negative condition of relations between company management and its workers is called __________ relations. a. Labor union b. Codetermination c. Labor-management

30. 16 - 30 Copyright © 2014 Pearson Education, Inc. Answer to Discussion Question The positive or negative condition of relations between company management and its workers is called __________ relations. a. Labor union b. Codetermination c. Labor-management

31. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2014 Pearson Education, Inc. 16 - 31