11InternationalHumanResourceManagementLearningObjectives(1of3)Knowthebasicfunctionsofhumanresourcemanagement.Defineinternationalhumanresourcemanagement.Understandhowinternationalhumanresourcemanagementdiffersfromdomestichumanresourcemanagement.Knowthetypesofworkersthatmultinationalcompaniesuse.LearningObjectives(2of3)Explainhowandwhenmultinationalcompaniesdecidetouseexpatriatemanagers.Knowtheskillsnecessaryforasuccessfulexpatriateassignment.Understandhowexpatriatemanagersarecompensatedandevaluated.Appreciatetheissuesregardingexpatriateassignmentsforfemalemanagers.LearningObjectives(3of3)Knowwhatcompaniescandotomaketheexpatriateassignmenteasierfortheirfemaleexpatriates.Understandtherelationshipbetweenchoiceofamultinationalstrategyandinternationalhumanresourcemanagement.HumanResourceManagement(HRM)HumanResourceManagement(HRM):dealswiththeoverallrelationshipoftheemployeewiththeorganizationMajorgoalsofHRMaremanaginganddevelopinghumanassets.BasicHRMFunctions(1of2)BasicHRMfunctionsare:Recruitment:identificationofqualifiedindividualsforavacantpositionSelection:processoffillingvacantpositionsintheorganizationTraining:providingopportunitiestohelptheindividualtoperformPerformanceAppraisal:assessingtheindividual’sperformanceBasicHRMFunctions(2of2)BasicHRMfunctionsare:(cont’d)Compensation:providingtheadequaterewardpackageLaborRelations:therelationshipbetweentheindividualandthecompanyInternationalHuman

ResourceManagement(IHRM)Whenappliedtotheinternationalsetting,theHRMfunctionsmakeupInternationalHumanResourceManagement.Intheinternationalarena,thebasicHRMactivitiestakeonanaddedcomplexity,fortworeasons:EmployeesofMNCsincludeamixtureofworkersofdifferentnationalities.HRManagersmustdecidethenecessaryextentofadaptationtolocalbusiness&nationalcultures.TypesofEmployeesinMultinationalOrganizations(1of2)Expatriate:EmployeeswhocomefromacountrythatisdifferentfromtheoneinwhichtheyareworkingHomeCountryNationals:Expatriateemployeeswhocomefromtheparentfirm’shomecountryThirdCountryNationals:Expatriateworkerswhocomefromneitherthehostnorthehomecountry.HostCountryNationals:LocalworkerswhocomefromthehostcountrywheretheMNCunitislocated.TypesofEmployeesinMultinationalOrganizations(2of2)Inpatriate:Employeesfromforeigncountrieswhoworkinthecountrywheretheparentcompanyislocated.Flexpatriates:Employeeswhoaresentonfrequentbutshort-terminternationalassignments.InternationalCadre(Globals):Managerswhospecializeininternationalassignments.CommuterAssignmentsEmployees:Employeeswholiveinonecountry,butspendpartoftheworkweekinanothercountry.MultinationalManagers:

ExpatriateorHostCountry(1of2)Decidingwhethertouseexpatriateorlocalmangersdependsmostlyonafirm’smultinationalstrategy.Transnationalstrategistsseetheirmanagerialrecruitsasemployableanywhereintheworld.Multidomesticstrategiststendtofavorlocalmanagers.Foraparticularposition,thefirmshouldask:Givenourstrategy,whatisourpreferenceforthisposition(host,home,orthirdcountrynational)?MultinationalManagers:

ExpatriateorHostCountry(2of2)Forexpatriatemanagers(parentorthirdcountry):Isthereanavailablepoolofmanagerswithappropriateskillsfortheposition?Aretheywillingtotakeexpatriateassignments?Doanylawsaffecttheassignmentofexpatriatemanagers?Forhostcountrymanagers:Dotheyhavetheexpertisefortheposition?Canwerecruitthemfromoutsideourfirm?IstheExpatriateWorthIt?IHRMdecisionsregardinguseofexpatriatemanagersmusttakeintoaccountthecostsofsuchassignments.Thetotalcompensationofexpatriatemanagersisoften3-4timeshigherthanhome-basedsalaries.Inadditiontohighcostsofrelocatingexpatriates,moremultinationalsarenowconcernedwithexpatriatesafetyworldwide.Also,thefailurerateofU.S.expatriatesishigherthanthosefromEuropeandJapan.Reasonsfor

U.S.ExpatriateFailure(1of3)Individual:PersonalityofthemanagerLackoftechnicalproficiencyNomotivationforinternationalassignmentFamily:Spouseorfamilymembersfailtoadapttolocalculture.Spouseorfamilymembersdonotwanttobethere.Reasonsfor

U.S.ExpatriateFailure(2of3)Cultural:TheManagerfailstoadapttolocalcultureorenvironment.TheManagerfailstodeveloprelationshipswithkeypeopleinthenewcountrybecauseofthecomplexityofcultivatingnetworkswithdiversepeople.Reasonsfor

U.S.ExpatriateFailure(3of3)Organizational:ExcessofdifficultresponsibilitiesintheassignmentFailuretoprovideculturalandotherimportantpre-assignmenttraining,likelanguageandcultureFailureofcompanytopicktherightpersonCompany’sfailuretoprovidetheleveloftechnicalsupportthatdomesticmanagersareusedtoFailureofthecompanytoconsidergenderequityTheStrategicRoleof

ExpatriateAssignmentsHelpmanagersacquireskillsnecessarytodevelopsuccessfulstrategiesinaglobalcontextHelpthecompanycoordinateandcontroloperationsthataredispersedgeographicallyandculturallyProvideimportantstrategicinformation.ProvidecrucialinformationaboutlocalmarketsProvideopportunitiesformanagementdevelopmentProvideimportantnetworkknowledgeSelectingExpatriateManagersSelectingthewrongpersonforthejobleadstofailure.Selectingthewrongpersoncanbeamajorexpense,costingmorethan$1millionperexpatriatefailure.Improperlyselectedemployeeswhocannotperformbutwhoremainonassignmentcanbemoredamagingtothefirmthanthosewholeaveprematurely.Domesticperformancedoesnotpredictexpatriateperformance.Selectioncriteriamaydiffer.KeySuccessFactorsforExpatriateAssignmentsTechnicalandmanagerialskillsPersonalitytraits(flexible,willingtolearn)Relationalabilities(abilitytoadapttoothercultures)Familysituation(spouse&familywillingnesstogo)Stresstolerance(abilitytomaintaincomposure)Languageability(speak,read&writethelanguage)Emotionalintelligence(empathize,relatetoothers)ThePriorityofSuccessFactorsforExpatriateAssignmentsTheimportanceofsuccessfactorsforaparticularassignmentdependsonfourassignmentconditions:AssignmentlengthShortassignmentsfocusontechnicalandprofessionalsskillsCulturalsimilarityRequiredinteractionandcommunicationwithlocalsJobcomplexityandresponsibilityTrainingandDevelopment(1of2)Predeparturecross-culturaltrainingreducesexpatriatefailureratesandincreasesjobperformance.ThemainobjectiveofCross-CulturalTrainingistoincreasetherelationalabilitiesofthefutureexpatriateandthespouseandfamily.Thetrainingrigordependsontheassignment.TrainingRigor:TheextentofeffortbybothtraineesandtrainerstopreparetheexpatriateforworkabroadTrainingandDevelopment(2of2)LowrigortrainingShorttimeperiodConsistsoflecturesandvideosonlocalculturesBriefingsoncompanyoperationsHighrigortrainingLastsoveramonthMoreexperientiallearningExtensivelanguagetrainingIncludesinteractionswithhostcountrynationals

PerformanceAppraisal

fortheExpatriate

Conductingreliableperformanceappraisalfortheexpatriateisverychallenging.Seldomcanthefirmusesameperformancecriteria.Challenges:FitofinternationaloperationinmultinationalstrategyUnreliabledataComplexandvolatileenvironmentsTimedifferencesanddistanceseparation

StepstoImprovetheExpatriatePerformanceAppraisal

Withoutintensiveanddirectcontact,performanceappraisalscanfailtodemonstrateacomprehensiveunderstandingoftheexpatriatemanager’ssituation.Toovercomethesedifficulties:Fittheevaluationcriteriatothestrategy.Fine-tunetheevaluationcriteria.Usemultiplesourcesofevaluationwithvaryingperiodsofevaluation.ExpatriateCompensationCompensationpackagesmustbeattractivetoskilledmanagers,butalsoconsidertheincreasingcosts.Compensationpackageshavemanycommonfactors:LocalmarketcostoflivingHousingTaxesBenefitsTheBalance-SheetApproach

(1of2)Providesacompensationpackagethatattemptstobalancepurchasingpowerinthehostcountrywiththatinthehomecountry.Theexpatriateshouldnotbeinabetterorworsepositionfinanciallybecauseoftheassignment.Thefirmprovidesallowancesforadjustmentsfordifferencesintaxes,costofliving,housing,food,recreation,personalcare,clothing,education,homefurnishing,transportation,andmedicalcare.TheBalance-SheetApproach

(2of2)Inadditiontomatchingpurchasingpower,firmsmayprovideadditionalallowances:Foreignservicepremiums(often10-20%ofbasepay)Hardshipallowance(extramoneyfordifficultpostings)Relocationallowances(miscellaneouscostsofmove)Home-leaveallowances(transportationcoststoreturnhomeonceortwiceperyear)OtherApproaches

toExpatriateCompensationThehighcostofexpatriatecompensationandthetrendtowardworldwideworkershasresultedinmodificationsofthebalancesheetapproach.Somevariations:Headquarters-basedCompensation:payinghomecountrywagesregardlessoflocationHost-basedCompensation:adjustingwagestolocallifestylesandcostsoflivingGlobalpaysystems:worldwidejobevaluations,performanceappraisalmethods,andsalaryscalesTheRepatriationProblemRepatriationProblem:thedifficultiesthatmangersfacecomingbacktotheirhomecountriesandreconnectingwiththeiroldjobs.Threebasicculturalproblems“reversecultureshocks:”AdaptingtonewworkenvironmentandcultureofhomeofficeRelearningtocommunicatewithothersinhomeandorganizationalculturesAdaptingtotheirbasiclivingenvironmentStrategiesfor

SuccessfulRepatriationThesestrategiesmayhelpfirmstosuccessfullyrepatriatetheirmanagers:Provideastrategicpurposefortherepatriation.Establishateamtoaidtheexpatriate.Provideparentcountryinformationsources.Providetrainingandpreparationforthereturn.InternationalAssignments

forWomen(1of2)Womenininternationalassignmentsarestrikinglyrare.Estimatesarethatwomenrepresentonly12%ofexpatriatemanagers,but45%ofmanagement.Womenfaceaglassceilingathome,andanexpatriateglassceilingworldwide,becauseof2myths:Myth1:Womendonotwishtotakeinternationalassignments.Myth2:Womenwillfailbecauseoftheforeignculture’sprejudicesagainstlocalwomen.InternationalAssignments

forWomen(2of2)Don’tassumethatpeoplefromforeignculturesapplythesamegenderroleexpectationstoforeignworkersthattheydotolocalwomen.Successfulwomenexpatriatesemphasizenationality,notgender.Theissuesthatariseincross-culturalinteractionsdependmoreonhowforeignersreacttothoseofadifferentnationality.InternationalAssignments

forWomen:AdvantagesWomenmayhaveadvantagesinexpatriatepositions:Beinguniquemeansshebecomesmorevisible.Localbusinesspeoplefromtraditionalculturesassumethatsheisthebestpersonforthejob.Womenaremorelikelytoexcelinrelationalskills,amajorfactorinexpatriatesuccess.Localmenspeakateasewithawomanaboutmoretopicsthanmen,leadingtomoreinteraction.InternationalAssignments

forWomen:DisadvantagesWomenalsosufferdisadvantagesworsethanmales:Facetheglassceiling,isolationandloneliness;needtoworkhardertoprovethemselves.Seldomgivenaninternationalassignmentuntillaterintheircareers.NeedtobalanceworkandfamilyresponsibilitiesNeedtoworryaboutaccompanyingspouseWhatCanCompaniesDo

toEnsure

FemaleExpatriateSuccess?Despitethedisadvantagestheyface,opportunitiesforwomenasexpatriatemanagersareexpectedtogrow:Shortageofhigh-qualitymultinationalmanagers.Fewermenarewillingtotaketheassignments.Whatfirmscandotoensurethesuccessofwomen:Providementors,networkingwithotherwomenIdentifyandremovesourcesofbarrierstointernationalassignment.MultinationalStrategy

andIHRM(1of2)MultinationalcompanieshaveseveraloptionsfordevelopingtheappropriateIHRMpoliciesfortheimplementationoftheirmultinationalstrategies.OnewayistoexamineitsIHRMorientation,orphilosophy.IHRMOrientation:Acompany’sbasictacticsandphilosophyforcoordinatingIHRMactivitiesformanagerialandtechnicalworkers.MultinationalStrategy

andIHRM(2of2)TherearefourbasicIHRMorientations:Ethnocentric:AllaspectsofHRMtendtofollowtheparentorganization’shomecountryHRMpractices.Regiocentric&Polycentric:HRMismoreresponsivetothehostcountrydifferencesinHRMpractices.Global:Thefirmassignsitsbestmanagerstointernationalassignments,recruitingworldwide.EthnocentricIHRMBenefitsBenefits:Littleneedtorecr