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MANAGING PEOPLE ACROSS CULTURE HBM- 411
SUPER MARKETS EXPANSION IN TO INDIA
SUBMITTED BY: MOHAMMAD PARVEZ NAIM
SUBMITTED TO: PETER CARTON
STUDENT ID : 6565700
DATE : 5TH MAY 09Executive summary:
The purpose of this report is to identify and evaluate key IHRM issues face by Coles
during the set up phase of their expansion in to Indian market by opening 5 supermarkets
by the end of 2011. The key issues identified requiring action to be taken includes
Recruitment and selection, training and development, performance management and
compensation.
The key Recommendations of this report are as follows:
Recruitment and Selection
1. It is recommended by Awasthappa K (2006) that ethnocentric approach may be
appropriate during the early phase of international business because firms at this
stage are concerned with transplanting a part of business that has worked in home
country.
2. It is recommended by Dowling P (2008) that Coles selection criteria should be
based on expatriate’s Technical ability, cross culture suitability, family
requirement, country/culture requirement, language criteria and MNC
requirements.
3. It is recommended by Dowling P (2008) Recruiting internal candidate for Indian
headquarters is likely to results in better control and coordination of their
subsidiaries as PCN is more familiar with home office goals, objectives, policies
and practice.
Training and development
1. It is recommended by Mond A Noe (2002) that pre-departure training for Coles
Expatriates should be designed to fill the cultural gap between the home country
and host country and it should include content like cross culture training,
language training, practical training and miniculture training
2. It is recommended by Munir H.Tayeb (2005) that Coles should give pre
departure training to its Key personnel in host nation headquarters. Munir H.
Tayeb (2005) further argues that pre departure training conducted in host country
with the interaction of host country employees will help the expatriates to
understand the local customs, cultural insights and social aspects leads to
intercultural communication skills and business performance.
3. It is recommended by E. Dunbar & A. Katcher (1989) that it is critical that the
family should be included in the orientation programs.
Performance management
1. It is recommended by Cadwell M (2000) that Coles should use performance
management model for their Indian subsidiaries which is (1) planning
performance, (2) monitoring performance, (3) Analysing performance, (4)
Improving performance and (5) maintaining performance.
2. It is recommended by Bascal Robert (1999) that Coles should choose one of the
following three approaches for evaluating employee performance. They are (1)
Rating system (2) Ranking system and (3) appraisal by objective and standards.
3. Lutahns & Doh (2009) argues that, according to the hofstede`s cultural dimension,
India is a high collectivism country where promotion is given on the basis of
seniority. So, it is recommended for Coles to give promotion on experience basis.
Compensation
1. It is recommended by Briscoe & Schuler (2004) that Coles should meet certain
objective while developing their international compensation package in order to be
effective. These are (1) providing the incentive to leave the home country for
foreign assignment; (2) maintaining a given standard of living; (3) should take
career and family needs into consideration and (4) Facilitating re-entry into home
country at the end of foreign assignment.
2. It is recommended by Dowling et al. as cited in Shen J (2003) that Coles key
component for International rewards and compensation should include;
80% Base salary as a primary component of package of allowances.
10% Foreign service inducement or hardship premium
5% Allowances (ie.cost of living allowance, housing allowances)
5% Benefits (ie. Pension plans, medical services, social security, vacation,
special leave)
3. It is recommended by Briscoe & Schuler (2004) that during the set up phase Coles
should choose Negotiation/ad hoc approach for compensating its expatriates.
Table of Content
Executive Summary……………………………………………………………….
1.0 Introduction……………………………………………………………………
1.1 Aims and scope………………………………………………………..
1.2 Research methodology…………………………………………………
1.3 Limitations………………………………………………………………
1.4 Assumptions……………………………………………………………..
1.5 Company background……………………………………………………
1.6 Why India?.................................................................................................
1.7 Culture comparison……………………………………………………….
2.0 Body of the Report………………………………………………………………..
2.1 Recruitment and selection…………………………………………………
2.2 Pre-departure, on-going, induction training and development…………….
2.3 Performance management………………………………………………….
2.4 Compensation……………………………………………………………….
3.0 Conclusion
4.0 Key recommendations……………………………………………………………….
5.0 References……………………………………………………………………………
1.0 Introduction
It is the intention of this report to identify and explore the key IHRM issues for the Coles,
intending to expand their business in India by opening their retails stores in major cities.
The purpose of this report is to analyze the Implementation of key IHRM practice during
the set up phase in India.
1.1 Aim and Scope
The purpose of this report is to identify the key IHRM issues for the Coles group indents
to expand in India. The scope of this report will identify key Issues faced by a
multinational company while expanding overseas during the set up phase and will
recommend proper actions to be taken. This report will also seek to;
Propose Recruitment and selection criteria, whether to recruit Indian CEO
internally or externally
Propose Training and development, whether pre-departure training should be
held in Australia or India
Propose Performance and management, whether promotions should be on
merit basis, experience basis…..(need to write more)
Propose compensation, what compensation packages Coles should give to
their expats in order to achieve set up targets
1.2 Research Methodology
For the purpose of this report secondary data will be used. Secondary data is defined as
information already collected or published for purposes unrelated to the research at hand
(MaCarthy, etal, 1997, pg 149). The Information will be collected from class textbook,
journals, websites, swinburne`s online data bases, academic textbooks, company website,
business reports.
1.3 Limitations
1.4 Assumptions
The Cost benefit analysis estimated that this project would cost $35 million
In 2009, it is assumed that Coles will establish it’s headquarter and one super
market store in Delhi.
In 2010, it is assumed that Coles will establish 2 other supermarket stores in
Mumbai
In 2011, it is assumed that Coles will establish 5 new supermarket stores, two in
Chennai and three stores in Bangalore.
It is assumed, during the set up phase Coles projected revenue growth would be
$7 million and in second year it would be $15 million.
Within first 3 year of operation it is assumed that Coles will achieve break even.
1.5 Company Background
Coles group limited is an Australian company which is engaged in super markets, liquor
and convenience stores from the last 89 years. In 1960, the company opened its first
supermarket in North Balwyn, Victoria. By 1973, Coles achieved its aim of establishing a
supermarket in every Australian capital city. Coles is owned by Wesfarmers ltd. Coles is
full service supermarket operating over 760 stores throughout Australia and employing
more than 92,000 people. Today Coles is a leader in Australian food retailing with over
11 million customer doing transaction in a week. Coles offers customers convenient
shopping that aims to fulfill all of their expectations and requirements under one roof and
it is renowned for their daily cheaper prices quality goods.
Business proposals: During the set up phase following personnel will be recruited:
It is proposed that the Chief Executive officer (CEO) will be selected internally
(from Australia), successful candidate must possess 8 to 10 year experience in
sales and retails management with a strong understanding of host nation business
culture.
It is proposed that the Chief Financial officer (CFO) will also be selected
internally (within Australia), successful candidate must possess 5 to 8 year
experience in international Accounting practices and standards. The candidate
should have prior experience of practicing during the set up phase in overseas
country.
It is proposed that the marketing manager should be recruited externally (from
India) must possess 10 to 15 years marketing experience in host nation. The
candidate should have strong understanding of Indian shopping culture and prior
experience of marketing with MNC during the set up phase.
It is proposed that the Human resource manager should possess 7 to 10 year
experience in recruiting staff and providing on going training and development
programme for the retail staff, to be recruited from the host nation. This manager
needs to be fluent in English and in Hindi. Also, HR manager must possess
excellent skills in writing employment contracts and negotiating compensation
and benefits in order to achieve business goals.
It is proposed that the Logistic and distribution manager must posses 5 to 8 years
experience in transportation, stock control, warehousing, and ensuring structures
in place to monitor the flow of goods and materials. This manager should be
recruited internally.
It is proposed to recruit three business managers for food. Each one for Fresh
foods, consumable (package foods) and for Meat. These managers should be
selected externally (from India) must possess 10 year work experience in their
field.
It is proposed that, in each store there will be one store manager, one assistant
manager to run stores on weekends, fresh food manager, two back office people
for banking and pay roll, 20 personnel in stores for replenishment of the stock on
the shelfs, for costumer service desk and general cleaners.
1.6 WHY INDIA?
Indian market has a huge potential for retail sector. Indian retail sector is one of the
fastest growing retail sector in the world. Indian shopping culture is changing, now
people do more shopping in supermarkets. In India, Coles potential customer are middle
class society. In the past few years’ Indian middle class society has grown reasonably and
also the income level rises. India is changing and it is a best time for Coles to enter in to
Indian market and take advantage of early starters. With the help of effective IHRM
strategy Coles can easily penetrate in to the Indian market.
1.7 Cultural comparison (Parent company and Host Company Nation)
In the era of Globalization, understanding cultural influence is very important.
With the help of Hofstede cultural dimensions, we can sum up the differences
between Australia and India below:
Dimensions Australia India
Power Distance
Individualism/ Collectivism
Low Power Distance
(low level of inequality in
society)
Individualism
(individual rights are paramount)
High Power Distance
(accept that power is distributed
unequally)
Collectivism
(dependence on group and
human relations oriented)
Masculinity
Uncertainty Avoidance
Time
High Masculinity
(assertive, competitive business
culture, stress on equity and
competition)
Low UA
(tolerant of different opinions,
society try to have as few rules as
possible)
Short term orientation
Very High Masculinity
(big gap between men’s and
women’s values, stress on
equity and performance)
Very High UA
(strict laws and rules, low
tolerance of deviant ideas,
resistant to change)
Long term orientation
Source: Hofstede (1980) & (Chhokar, 2000; Sinha, 1997)
PCN (Australia) HCN (India)
Individual work ethic
Low regard for rules
Face-enhancing behavior
Top down management
Strong self-assertion
Exceptional negotiating skills
Concern of self-interest
Dependence on the group
Respect for rules
Face-saving behavior
Bottom up management and teamwork
Weak self-assertion
Poor negotiating skills (respect and save
others face)
Concern of harmony
Source: Adapted from Shimizu, N (1995), pp. 50-51 and Hsu (1971)
2.0 Body of the Report
2.1 Recruitment and selection
It is the intention of this paragraph to analyze the recruitment and selection criteria to be
used to recruit CEO for the Indian venture. Also, this paragraph intends to identify
whether to recruit CEO for Coles Indian Headquarter internally or externally.
Dowling P (2008) argues it is essential to note that recruitment and selection are isolated
processes and both processes will operate efficiently only if they are able to do the
staffing process effectively. Perlmutter(1969) as cited in P. Dowling (2008) identifies 4
approaches MNC`s adopts for managing and staffing their subsidiaries. These are
Ethnocentric, polycentric, geocentric and regiocentric. In Ethnocentric approach all key
management positions are held by parent company national. In this approach subsidiaries
are managed by staff from home country (PCN). The polycentric staffing approach
requires host country national to be hired to manage subsidiaries (HCN) who are seldom
promoted to positions at headquarter. Polycentric approach removes the worry of
language barriers, expensive training periods, and cross culture adjustment problem of
managers and their families. Geocentric approach is about staffing best people for the key
jobs throughout the organization, regardless of nationality. Seeking the best person for
the job, irrespective of nationality is most consistent with the underlying philosophy of
global corporation. The last approach is regiocentric, regiocentric approach reflects the
geographic strategy and structure of the MNC. Like the geocentric approach, it utilizes
the pool of managers but in a limited way. In regiocentric approach the staff can move
outside their country but only with in the particular geographic region. The regional
managers in this approach do not promoted to HQ positions but enjoy degree of regional
autonomy in decision making.
Awasthappa K (2006) argues that ethnocentric approach may be appropriate during the
early phase of international business because firms at this stage are concerned with
transplanting a part of business that has worked in home country. For example, during the
early phase of internationalization companies are more concerned about penetrating in to
host country market along with their values, beliefs, policies and procedures which
require a candidate who has strong knowledge of companies’ core value system.
Compton (2002) argues that, while establishing selection criteria it is useful to specify the
essential and desirable qualities for the job. Future decisions will be easier to justify if
these are measurable in some way. For example, it is better to specify the levels of
responsibility and accountability and specific competencies required rather than simply
ask for relevant experience. Dowling P (2008) identifies selection criteria which Coles
should use for expatriate selection. The selection criteria should be based on expatriate’s
Technical ability: which refers to person ability to perform the required task, cross
culture suitability: refers to adaptability of the person in to the new environment or
previous experience of working in a different culture. P. caliguiri (2000) as stated in
Dowling P (2008) argues that cross culture attributes should include cultural empathy,
adaptability, diplomacy, language ability, positive attitude, emotional stability and
maturity, Family requirements: refers to support of family (spouse) for taking foreign
assignment and willingness to go abroad, Country/cultural requirement: refers to the
host country immigration rules. In some countries it is essential to give reason for using
PCN rather than HCN also some immigration rules give visa only to expatriates not to
their family and children which may result in rejection of offer by expatriate, language
criteria: this refers to capability of expatriate to speak host country language fluently and
MNC requirements: which refers to situational factors which often have an influence on
selection decisions. For example, MNE may consider the proportion of expatriate to local
staff when making selection decisions, mainly as an outcome of its staffing philosophy.
However, operations in particular countries may require use of more PCNs and TCNs.
Dowling P (2008) argues an advantage for Coles to use internal candidate for Indian
headquarters because it likely to results in better control and coordination of their
subsidiaries as PCN is more familiar with home office goals, objectives, policies and
practice. Whereas, there are certain disadvantage also of using internal candidate.
Aswathappa K (2006) argues that key disadvantage of using internal candidate is the
excessive cost of selecting, training, and maintaining expatriate manager and their
families abroad. In conclusion, it is recommended for Coles to use internal candidate for
their Indian headquarter which is likely to result in better control and coordination of
their foreign subsidiaries. Moreover selection criteria should be based on expatriate’s
technical ability, cross culture suitability, family requirements, country and cultural
requirements, language criteria and MNC requirement.
2.2 Pre-Departure, on site and Induction Training and development
The Intention of this paragraph is to explore and identify the type of pre departure
training should be given to key personnel (PCN) of Coles and where to give, in home
nation or in host nation, as a part of their strategic entry plan in Indian market. Mond A
Noe (2002) identifies three phase training programme for foreign assignments which are
pre departure phase, on-site phase and repatriation phase. In pre departure training phase
employees needs to receive language training and an orientation on the new country’s
culture and custom. E. Dunbar & A. Katcher (1989) argues, it is critical that the family be
included in the orientation programs. Mond A Noe (2002) further argues that pre-
departure training for Coles Expatriates should be designed to fill the cultural gap
between the home country and host country and it should include content like cross
culture training methods range from presentational technique, such as lectures and
stimulation that expatriate and their families attends on custom and culture of host nation,
Language training and practical training. Practical training seeks to help the expatriate
manager and family feel “at home” in host country. In addition, Pre departure training
should also include experimental exercise such as miniculture training which allows
expatriate and their family to spend some time with the family in the home country from
the ethnic group of the host country. For example, the pre departure training should
design and given in such a way that Coles key personnel should have a proper
understanding of India’s Political, social, legal and business culture, As well as health
issues; emergency procedures; day-to-day living; strategies for adapting to an
international environment; and ongoing communication with the program and also how
to deal with the Indian costumers. For example; Fred Luthans (2005) argues bargaining
for goods and services in India is common, in contrast to the western culture, where
bargaining might be considered rude or abrasive. Therefore, expatriate should know how
to deal with the Indian customers.
Munir H.Tayeb (2005) argues that Coles should give pre departure training to its Key
personnel in host nation headquarters. Munir H. Tayeb (2005) further argues that pre
departure training conducted in host country with the interaction of host country
employees will help the expatriates to understand the local customs, cultural insights and
social aspects leads to intercultural communication skills and business performance. Peter
T Burgi (1999) argues a mentor who has himself been an expatriate will be more likely to
understand the challenges of international mobility, and be able to explain to top level
management any problems regarding the expatriate’s performance and what may be
expected from him. So, mentorship can be offered to a person with pervious expat
experience like CEO of the company. Peter T Burgi (1999) further argues that mentor
should be in touch with the expatriate by visiting the expat`s work and living place. The
mentor should make the maximum use of technology like emails, newsletters, phone
calls, fax etc. for being in touch with expatriate. P.R Harris (1991) as cited in Mond A.
Noe (2002) argues, on site training involves continued orientation to the host country.
Expatriate and their family may be paired with a mentor who helps them understand the
new, unfamiliar work environment and community. Warnich et al. (2005) argues that the
Induction program reduces the adjustment problem of new employee by creating a sense
of security, confidence and belonging to them. Michael Meighan (2000) argues that it is
the responsibility of the HR department to design and provide induction training to the
new employee. Warnich et al (2005) argues the number of people like supervisor,
manager, mentor, head of department etc are involved in implementation of induction
training program.
P. Caligiuri et al (2001) defines key advantage of pre-departure training as `intervention
which is designed to increase the knowledge and skills of expatriates to help them operate
effectively in the unfamiliar host culture. Whereas, Scullian H (2006) argues key
disadvantage as pre-departure training sometimes seen as a being too short duration to
have a long time effect; also pre-departure stressors may be very different from the reality
if the situation. In conclusion it is recommended for Coles to provide pre departure
training to their expatriate on India`s Political, social, legal and business culture. In
addition, Coles pre departure training should include content like cross culture training,
language training and Practical training.
2.3 Performance Management
The intention of this paragraph is to analyze the Coles`s performance management
system for its international Assignees.
Briscoe & Schuler (2004) argues the performance management system used in
international arena relates to many IHRM responsibilities, such as evaluating
international assignee and foreign manager for pay increase. Briscoe and Schuler (2004)
further argues The IPM system also plays an important role in performance feedback,
individual job assignments, development planning, and identification of training needs.
Brisco & Schuler further argues that the performance evaluation system needs to take
account of both international and local-culture of host company standards into account
because the performance criteria in the parent country may not be the same as in the
foreign environment. Cadwell M (2000) argues Coles should use performance
management model for their Indian subsidiaries which is (1) planning performance, (2)
monitoring performance, (3) Analysing performance, (4) Improving performance and (5)
maintaining performance. For example Coles should first establish expectations, what is
expected? Then Coles need to monitor the performance, Are we on right track? Then
analyse the performance of the company, if there is any problem take measures to
improve it and lastly maintaining the pace of performance. Bascal Robert (1999) argues
that Coles can choose one of the three approaches for evaluating employee performance.
They are (1) Rating system: this system is very common. Rating systems can be best
described as “workplace report cards,” much like the ones teachers in elementary schools
use for their students. They consist of two parts: a list of characteristics, areas, or
behaviors to be assessed and some scale or other way to indicate the level of performance
on each item. (2) Ranking System: Ranking systems involve comparing people against
each other and determining whether an employee is better than, the same as, or worse
than his or her colleagues on the basis of some set of criteria (e.g., sales totals or
management ability and lastly, (3) Appraisal by Objective and standards: This system
involve setting targets for each employee. Basal Robert (1999) suggests that using
individual targets is the better way to access performance. Shipper, F., Hoffman (2007)
suggests that the mentor can play an important role in improving performance of
expatriate in host nation. Shipper, F., Hoffman (2007) argues that, if the mentor will be
ex-expatriate than he is more likely to improve the performance of the expat because of
his previous experience. Coles should consider culture diversity while giving rewards and
promotion to their employee for outstanding work. Hodgetts & luthans (2006) argue that
rewards system varies from one culture to another. For example, in some countries,
personnel who do outstanding work are given individual rewards in the form of bonus
and commission while in other cultural norms require group rewards and individual
rewards are frowned on. Luthans & Doh (2009) argues, according to the hofstede`s
cultural dimension, India is a high collectivism country where promotion is given on the
basis of seniority. So, it is recommended for Coles to give promotion on experience basis.
It will help Coles in maintaining harmonious relation between the employees. For
example, if Coles gives promotion on the basis of merit than it is likely to results in
inharmonious relations and there will be more chances of ego clash between the
employees. Aswathappa K (2006) argues that the key advantage of giving promotion on
seniority basis is the company can utilize the decade long experience for its benefit and
Also, Cooperation between workers is generally not hindered by competition for
subjectively determined promotions.Whereas, Harrison A (2000) argues that the key
disadvantage of giving promotion on seniority basis is less motivation in employees as
compared to merit basis promotion because everyone is motivated by self interest.
In conclusion, it is recommended for Coles to use performance model evaluating
company’s performance and should use one of the three approaches for evaluating
employee’s performance. In addition, it is also recommended for Coles to give promotion
on the basis seniority.
2.4 Compensation
The intention of this paragraph is to analyze and explore the type of compensation
packages and benefits should be given to Coles key personnel in order to achieve set-up
targets during the first two years of operation in India. Cynthia D. Fisher, et al as cited in
Aswathappa K (2006) argues Financial benefits , along with the career prospects’,
motivates an individual to accept a foreign assignments. If these expectations are not met
during the assignments than it is likely to results in decline motivation and expatriate
performance can suffers. Puccino S (2007) argues that expatriates compensation
packages poses unique challenges compared to home country employment, such as
preparing expatriates packages that are reasonably cost effective while still attracting and
motivating. Briscoe & Schuler (2004) argues that Coles needs to meet certain objective
while developing their international compensation package in order to be effective. These
are (1) providing the incentive to leave the home country for foreign assignment; (2)
maintaining a given standard of living; (3) should take career and family needs into
consideration and (4) Facilitating re-entry into home country at the end of foreign
assignment. Dowling et al. as cited in Shen J (2003) argues that Coles key component of
international rewards and compensation should include;
80% Base salary as a primary component of package of allowances.
10% Foreign service inducement or hardship premium
5% Allowances (i.e. cost of living allowance, housing allowances)
5% Benefits (i.e. Pension plans, medical services, social security, vacation,
special leave)
Briscoe & Schuler (2004) argues that during the set up phase Coles can choose
Negotiation/ad hoc approach for compensating its expatriates. Briscoe & Schuler (2004)
further argues, when the firm first start sending employee on international assignments
and while their number of assignees is relatively low, the common approach for
determining pay and benefits of expats is ad hoc or negotiation approach. This approach
is quite simple in which compensation packages for each individual considered for an
overseas assignment. Harzing (2004) argues Coles should choose balance sheet approach
during the second or third year of their expansion in India when they will have more
expatriates for managing their Indian subsidiaries. Briscoe & Schuler (2004) argues
balance sheet approach is followed by most Multinational when their international
business expands to the point where the firms have a large number of expatriates. In
addition, balance sheet approach has number of bases to choose from depending on the
period of foreign assignment. For Instance, if the international assignment is long (three
to five year) and assignee often go from one foreign country assignments to other than
International standard will be most appropriate base. For example, during the set up
phase of the company Coles can choose ad hoc approach for compensation which allows
company to negotiate individually to the expatriates on the basis of their post,
responsibility and tenure of the assignment. And later, Coles can choose balance sheet
approach, when they have more expatriates. Briscoe & Schuler (2004) argues that key
advantage of adopting Ad hoc compensation approach is that it is simple in nature and
goes well during the early days of internationalization whereas, Harzing (2004) argues
key disadvantage of using balance sheet approach is that it can create disparities and
inequities between parent company nation (PCN) and third country nation (TCN) and
also it can be expensive. In conclusion, it is recommended for Coles to compensate their
employee well so that they should always motivate towards achieving organizational
goals. For achieving set up target goals Coles needs to design effective compensation
packages for their expats which should include allowance, benefits as well along with the
base salary.
3.0 Recommendations
Recruitment and Selection
1. It is recommended by Awasthappa K (2006) that ethnocentric approach may be
appropriate during the early phase of international business because firms at this
stage are concerned with transplanting a part of business that has worked in home
country.
2. It is recommended by Dowling P (2008) that Coles selection criteria should be
based on expatriate’s Technical ability, cross culture suitability, family
requirement, country/culture requirement, language criteria and MNC
requirements.
3. It is recommended by Dowling P (2008) Recruiting internal candidate for Indian
headquarters is likely to results in better control and coordination of their
subsidiaries as PCN is more familiar with home office goals, objectives, policies
and practice.
Training and development
4. It is recommended by Mond A Noe (2002) that pre-departure training for Coles
Expatriates should be designed to fill the cultural gap between the home country
and host country and it should include content like cross culture training,
language training, practical training and miniculture training
5. It is recommended by Munir H.Tayeb (2005) that Coles should give pre
departure training to its Key personnel in host nation headquarters. Munir H.
Tayeb (2005) further argues that pre departure training conducted in host country
with the interaction of host country employees will help the expatriates to
understand the local customs, cultural insights and social aspects leads to
intercultural communication skills and business performance.
6. It is recommended by E. Dunbar & A. Katcher (1989) that it is critical that the
family should be included in the orientation programs.
Performance management
7. It is recommended by Cadwell M (2000) that Coles should use performance
management model for their Indian subsidiaries which is (1) planning
performance, (2) monitoring performance, (3) Analysing performance, (4)
Improving performance and (5) maintaining performance.
8. It is recommended by Bascal Robert (1999) that Coles should choose one of the
following three approaches for evaluating employee performance. They are (1)
Rating system (2) Ranking system and (3) appraisal by objective and standards.
9. Lutahns & Doh (2009) argues that, according to the hofstede`s cultural
dimension, India is a high collectivism country where promotion is given on the
basis of seniority. So, it is recommended for Coles to give promotion on
experience basis.
Compensation
10. It is recommended by Briscoe & Schuler (2004) that Coles should meet certain
objective while developing their international compensation package in order to
be effective. These are (1) providing the incentive to leave the home country for
foreign assignment; (2) maintaining a given standard of living; (3) should take
career and family needs into consideration and (4) Facilitating re-entry into home
country at the end of foreign assignment.
11. It is recommended by Dowling et al. as cited in Shen J (2003) that Coles key
component for International rewards and compensation should include;
80% Base salary as a primary component of package of allowances.
10% Foreign service inducement or hardship premium
5% Allowances (ie.cost of living allowance, housing allowances)
5% Benefits (ie. Pension plans, medical services, social security, vacation,
special leave)
12. It is recommended by Briscoe & Schuler (2004) that during the set up phase
Coles should choose Negotiation/ad hoc approach for compensating it expatriates
4.0 Conclusion
The Key IHRM issues during the expansion of Coles into India are associated with
Recruitment and selection, training and development, pre-departure, on going, induction
training and development, and Compensation. Firstly, In Recruitment and selection it is
recommended for Coles to adopt ethnocentric approach for managing their Indian
subsidiary. It is also recommended for Coles to consider Technical ability, cross culture
suitability, family requirement, country/culture requirement, language criteria and MNC
requirement for selecting expatriates. The above recommendations are likely to result in
best person on the job who can be well adjusted into the host nation environment along
with his family which finally increases the success rate of foreign assignment. The
second problem of Coles is related with pre-departure training and development of
expatriates. For the successful foreign assignments it is recommended to provide
effective pre-departure, on going and induction training to the expatriates. It is
recommended that content of the pre-departure training should include cross culture
training (i.e. Lectures, orientations program, stimulation etc), language training, practical
training and miniculture training. Also, after arrival into host country expatriate should
get proper on going training and induction training. The adaptation of all above
recommendation is likely to results in well trained expatriate who will be aware of
India1s social, legal, political and business culture. Also, the above recommendation will
help the expatriate in adjusting in to the new culture. Coles third problem is associated
with Performance management. It is recommended for Coles to adopt proper
performance management system in order to evaluate company’s and employees
performances. In addition, it is highly recommended for Coles to give promotion to their
employees on the basis of seniority because India is highly collective society, if Coles
will give promotion on the basis of merit than it will create inharmonious relation
between the employees. The last problem is related with compensation. It is
recommended for Coles to design effective compensation packages for their expatriates.
It is argued that expatriate is motivated to career prospects along with the financial
benefits, if its expectation is not met, it will result in lack of motivation in expats.
Furthermore, compensation package should include allowance and benefits along with
base salary. These recommendations are likely to results in well motivated expatriate
which finally increase the success rate of the foreign assignment. Therefore, above are
the four IHRM problems and recommendations to solve those problems.
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