Group HR

International Human Resource Management

Good Evening – March 17th, 2011

Group HRHuman Resource Management (HRM)

• Refers to the activities an organization carries out to use its human resources effectively

• Four major tasks of HRM – A) Staffing policy– B) Management training and development– C) Performance appraisal – D) Compensation policy

Group HR

International Human Resource Management(IHRM)

• Strategic role: HRM policies should be congruent with the firm’s strategy and it’s formal and informal structure and controls

• Right People, Right Place, Right Time• Task complicated by profound differences between

countries in labor markets, culture, legal and economic systems

Group HR

What are the factors that would effect the

choice and nature of H.R. policies in an

international organization?

Implications for Managers

Group HRMain challenges in IHRM

• High failure rates of expatriation and repatriation• Deployment – getting the right mix of skills in the organization

regardless of geographical location• Knowledge and innovation dissemination – managing critical

knowledge and speed of information flow• Talent identification and development – identify capable people who

are able to function effectively• Barriers to women in IHRM• International ethics• Language (e.g. spoken, written, body)

Group HRMain challenges in IHRM

• Different labor laws

• Different political climate

• Different stage(s) of technological advancement

• Different values and attitudes e.g. time, achievement, risk taking

• Roles of religion e.g. sacred objects, prayer, taboos, holidays, etc

• Educational level attained

• Social organizations e.g. social institutions, authority structures,

interest groups, status systems

Group HR Types of “International" Organizations

– International organization:Any organization that exports to/ imports from organizations in other countries with primarily domestic production –Multidomestic.

– Multinational organization: An organization with operations in different countries but each is viewed as a relatively separate enterprise.

– Global organization: An enterprise structured so that national boundaries become blurred. The best people are hired irrespective of national origin, Transnational.

Group HR

Global Staffing Issues• Selecting candidates for overseas assignment

• Assignment terms and documentation

• Relocation processing and vendor management

• Immigration processing

• Cultural and language orientation and training

• Compensation administration and payroll processing

• Tax administration

• Career planning and development

• Handling of spouse and dependent matters

Group HR

Expatriates

An employee sent by his/her company in one country to work in a different country.

Group HR

Reliance on expatriates increase when:

♦ Sufficient local talent is not available.

♦ An important part of the firm’s overall business is the creation of a

corporate global vision.

♦ International units and domestic operations are highly

interdependent.

♦ The political situation is unstable.

♦ There are significant cultural differences between the host country

and the home country.

The Use of Expatriates

Group HRUse of Expatriates

Why do International Assignments Fail?

• Career blockage (“the home office has forgotten about me”)

• Culture Shock, resulting in frustration and poor cooperation abroad.

• Family problems, due to poor adjustment and/or lack of contact if family is left behind.

• Over-emphasis on technical qualifications.

• Getting rid of a problem employee.

Group HRUse of Expatriates

Why do International Assignments Fail? (con’t)

• Over-emphasis on technical qualifications.

• Getting rid of a problem employee.

Group HRThe Roles of an Expatriate

Roles

• Agent of direct control

• Agent of socialization

• Network builder• Boundary spanner• Language node

Expatriate’s home

locationForeign Location

Group HRSatisfaction

Time of Arrival Level of Satisfaction

First arrive High Few months Lower After 2 years Higher than previous

-Similar Language and religion are important factors for satisfaction

-People over 35 yrs - higher level of satisfaction after 1st year

-Men adjust faster to overseas assignments than women

Group HRCross-Cultural Adjustment

• Expatriates must adjust to new work situation, interactions with locals, and new general environment

• Company can facilitate adjustment by providing training for expatriates and their families before and during the assignment

• Expatriates often experience cultural shock (psychological disorientation)

Group HRFactors Important in International Assignee Success

I. Job Knowledgeand Motivation•Managerial & organizational ability

•Imagination, creativity

•Administrative skills

•Alertness

•Responsibility

•Industriousness

•Initiative and energy

•High motivation

•Frankness

•Belief in mission and job

•Perseverance

II. Relational Skills• Courtesy

• Display of respect

• Kindness

• Empathy

• Non-judgmentalness

• Integrity

• Confidence

Source: Adapted from Arthur Winfred Jr., and Winston Bennett Jr., “The International Assignee: The Relative Importance of Factors Perceived to Contribute to Success,” Personnel Psychology 18 (1995), pp. 106–107.

Group HRIV. Extracultural Openness

• Variety of outside interests

• Interest in foreign cultures

• Openness

• Local language [s] known

• Outgoingness & extroversion

• Overseas experience

V. Family Situation

• Adaptability of spouseand family

• Spouse’s positive opinion

• Willingness of spouse to live abroad

• Stable marriage

III. Flexibility/

Adaptability

• Resourcefulness

• Ability to deal with stress

• Flexibility

• Emotional stability

• Willingness to change

• Tolerance for ambiguity

• Adaptability

• Independence

• Dependability

• Political sensitivity

• Positive self-image

Factors Important in International Assignee Success

Group HR

Cross Cultural Training Programs

Environmental BriefingsEnvironmental Briefings

Cultural OrientationCultural Orientation

Language TrainingLanguage Training

Sensitivity TrainingSensitivity Training

Field ExperienceField Experience

Group HR

Compensation

• Two issues:–Pay executives in different countries according to the standards in

each country?or

Equalize pay on a global basis?

–Method of payment

Group HRComponents 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

Group HR

Typical Expatriate Benefits & Incentives

• Overseas premium• Housing allowance• Cost of living allowance (COLA)• Moving expenses• Tuition for dependent education• Home leave• Tax reimbursement plans• Hardship allowances• Mobility premiums

Group HRAppraising Expatriate Managers

• Challenges in appraising overseas managers

– Determining who should appraise the manager.

– Deciding on which factors to base the appraisal.

• Job abroad may include more than what it does at home

Group HRGuidelines for Performance Appraisal

More weight given to onsitemanager’s evaluation.

Expat who worked in same location should assist home-office

manager with evaluation.

If foreign on-site manager preparing evaluation, home-office manager should

be consulted before finalization.

Group HRA BIG THANK YOU TO ALL….