1. INTERNATIONAL HUMAN RESOURCE MANAGEMENT
CHAPTER 11
INTERNATIONAL HUMAN RESOURCE MANAGEMENT

2. HRM
HRM Defined:
The design of formal systems in an organization to ensure effective and efficient use of human talent to accomplish organizational goals
Deals with the entire relationship of the employee with the organization
SHRM Defined:
It involves designing and implementing a set of internally consistent policies and practices that ensure a firm’s human capital contribute to the achievement of its business objectives
This includes both vertical (linking HRM practices with strategic management process) and horizontal (the integration of the various HRM practices) integration as well
Additionally, linking the people of the firm (in terms of their skills and actions) to the strategic needs of the firm
IHRM: Applied to international setting

3. COMPONENTS OF HRM HR Planning Recruitment Selection
Orientation/Socialization
Training & Development
Performance Appraisal
Compensation
Labor Relations
Repatriation

4. Research and Development Human Resource Management Finance Strategic
The Strategic View
Strategic
Goals
Human
Resource
Management
Finance
Research
and
Development
Marketing
Production

5. INTERNATIONAL HRM (IHRM)
Basic HRM issues remain
Must choose a mixture of international employees
How much to adapt to local conditions?

6. IHRM Multinational Strategy HRM Activity IHRM Orientation HR Planning
Recruiting
Selection
Training and Developing
Orientation / Socialization
Performance Appraisal
Compensation
Labor Relations
Repatriation
Multilocal
Polycentric
Regional
Regiocentric
International
Ethnocentric
Transnational
Global

7. EMPLOYEES IN MULTINATIONAL ORGANIZATIONS
Host country nationals
Expatriates
Home country nationals
Third country nationals
Inpatriates

8. MULTINATIONAL MANAGERS
Host country or expatriate?

9. USING HOST COUNTRY MANAGERS
Do they have the expertise for the position?
Can we recruit them from outside the company?

10. USING EXPATRIATE MANAGERS
Do parent country managers have the appropriate skills?
Are they willing to take expatriate assignments?
Do any laws affect the assignment of expatriate managers?

11. IS THE EXPATRIATE WORTH IT?
High cost
High failure rate

12. EXHIBIT 11.1 PAYING FOR THE EXPATRIATE MANAGER

13. REASONS FOR U.S. EXPATRIATE FAILURE
Spouse fails to adapt
Manager fails to adapt
Other problems within the family
Personality of the manager
Level of responsibilities

14. Reasons for expatriate failure, continued
Lack of technical proficiency
No motivation for assignment

15. MOTIVATIONS TO USE EXPATS
Managers acquire international skills
Coordinate and control operations dispersed activities
Communication of local needs/strategic information to headquarters

16. HR Planning
Process by which organizations anticipate future staffing needs and plan programs to ensure that the correct number and type of employees are available when they are needed.
Concerned with the flow of people into, through, and out of an organization.

17. RECRUITMENT Attract qualified applicants
The ability to locate, attract, and have available when needed, an adequate but appropriate number (supply) of qualified individuals who are a good match for the job and the overall organization and to accomplish this at the least possible expense.

18. US RECRUITMENT STRATEGIES
Open and public
See Exhibit 12.3

20. KOREAN RECRUITMENT: A COLLECTIVIST APPROACH
Backdoor
School contacts

21. SELECTION
To identify from a pool of applicants those individuals who will be hired.

22. THE US APPROACH TO SELECTION
Match skills and job requirements
Universalistic criteria
See Exhibit 12.4

24. SELECTION IN COLLECTIVIST CULTURES
The in-group
Preference for family
Value personal characteristics
High school and university ties substitute for family membership

25. IMPLICATIONS FOR THE MULTINATIONAL
Managers must follow local norms to get best workers
Often a tradeoff with benefits of home country practices

26. A Model for Selecting Expatriates
The
right person
for foreign
assignment

27. KEY EXPATRIATE SUCCESS FACTORS
Professional/technical competence
Relational abilities
Motivation
Family situation
Language skills
Willingness to accept position

28. PRIORITY OF SUCCESS FACTORS
Depends on :
assignment length
cultural distance
amount of required interaction with local people
job complexity/responsibility

29. EXHIBIT 11.3 SHOWS A DECISION MATRIX USED TO SET PRIORITIES OR DIFFERENT SUCCESS FACTORS DURING SELECTION

31. EXPATRIATE TRAINING

32. TRAINING RIGOR
The extent of effort by trainees and trainers required to prepare the trainees for expatriate positions

33. LOW RIGOR TRAINING Short time period Lectures Videos on local culture
Briefings on company operations company operations

34. HIGH RIGOR TRAINING Lasts over a month Experiential learning
Extensive language training
Often includes interactions with host country nationals

35. EXHIBIT 11.4 SHOWS VARIOUS TRAINING TECHNIQUES AND THEIR OBJECTIVES AS THE RIGOR OF THE CROSS- CULTURAL TRAINING GROWS

39. PERFORMANCE APPRAISAL
Identifying people to reward, promote, demote, develop and improve, retain, or fire
The process by which an employee’s contribution to the organization during a specified period of time is assessed.

40. CHALLENGES OF EXPATRIATE PERFORMANCE APPRAISAL
Unreliable data
Complex and volatile environments
Time differences and distance separation
Local cultural situations

41. STEPS TO IMPROVE THE PROCESS
1. Fit the evaluation criteria to strategy.
2. Fine tune the evaluation criteria
3. Use multiple evaluators with varying periods of evaluation

42. EXHIBIT 11.6 Shows several sources of information a superior or the HRM professionals may use to evaluate an expatriate managers

44. EXPATRIATE COMPENSATION
Wages and salaries, incentives such as bonuses, and benefits such as retirement contributions

45. COMPENSATION IN THE U.S.
Wages and salaries differ based on two major factors
external
internal

46. COMPENSATION IN JAPAN: TRADITIONAL APPROACH
Base salaries for positions
Skill and educational requirements
Age
Marital status and family size may count
Bonuses

47. THE BALANCE SHEET APPROACH
Provides a compensation package that equates purchasing power

48. BALANCE SHEET COSTS
Allowances for cost of living, housing, utilities, furnishing, educational expenses, medical expenses, club memberships, and car and/or driver expenses

50. OTHER APPROACHES Parent country wages everywhere
Wean expatriates from allowances
Pay based on local or regional markets
Cafeteria selection of allowances
Global pay systems

51. THE REPATRIATION PROBLEM
Difficult for many organizations
"Reverse culture shock"
Expatriates must relearn own national and organizational culture
Includes whole family

52. STRATEGIES FOR SUCCESSFUL REPATRIATION PROVIDE:
A strategic purpose for repatriation
A team to aid the expatriate
Home country information sources
Training and preparation for the return
Support for expatriate and family

53. WOMEN EXPATRIATES: TWO IMPORTANT "MYTHS"
Myth 1: women do not wish to take international assignments
Myth 2: women will fail in international assignments because of the foreign culture's prejudices against local women

54. SUCCESSFUL WOMEN EXPATRIATES
Foreign not female
emphasize nationality not gender
The woman's advantage
strong in relational skills
wider range of interaction options

55. MULTINATIONAL STRATEGY AND IHRM

56. IHRM ORIENTATIONS
Ethnocentric
Polycentric
Regiocentric
Global

57. IHRM ORIENTATION AND MULTINATIONAL STRATEGY
Early stages of internationalization = ethnocentric IHRM
Multilocal strategies = ethnocentric or regiocentric
Regional strategy = closer to the global

58. IHRM Multi-national Strategy HRM Activity IHRM Orientation HR Planning
Recruiting
Selection
Training and Developing
Orientation / Socialization
Performance Appraisal
Compensation
Labor Relations
Repatriation
Multilocal
Polycentric
Regional
Regiocentric
International
Ethnocentric
Transnational
Global

59. International strategy = ethnocentric or polycentric IHRM
Transnational strategies = a global IHRM