Managing Human Resource Globally

7/28/2019 Managing Human Resource Globally

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Managing Human

Resources Globally

Presented By Apra Chordia


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Trend toward Expansion into Global Markets

Tap New Markets with largenumbers of global customers

Capitalize on lower labor cost

Build a 24 X 7 follow the Sun Modelfor development and support


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HRM in a Global Environment

Global activities are simplified and encouraged bytrade agreements among nation like GATT , NAFTA

Increasing international competition accentuates theneed of manage HR effectively Organizations need employees who understand

the customers and suppliers in foreign countries. Organizations need to understand the laws and

customs that apply to employees in othercountries.


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Employees in an International Workforce

Parent-country national employee who was born

and works in the country in which an organizationsheadquarters is located

Host-country national employee who is a citizenof the country (other than parent country) in which an

organization operates a facility Third-country national employee who is a citizen

of a country that is neither the parent country nor the

host country of the employer

Expatriates

An employee sent by his or her

company in one country to manage operations in

different country


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Employersin the Global Marketplace

International organization

An organization that sets up one or a few facilities in one or a fewforeign countries

Need to have HRM practices conforming to host countrys laws

Multinational company

An organization that builds facilities in a number of different countriesin an effort to minimize production and distribution costs

Need to select managers capable of functioning in a variety of setting,give them necessary training and flexible compensation

Global organization

An organization that chooses to locate a facility based on the ability toeffectively, efficiently, and flexibly produce a product or service using

cultural differences as an advantage


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Transnational HRM System

Transnational HRM system: makes decisions from a global perspective

includes managers from many countries

based on ideas contributed by people representing a

variety of cultures

Decisions that are the outcome of a transnational

HRM system balance uniformity with flexibility.

Transnational Scope+ Transnational Process +Transnational Process ---> Cultural Synergy


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Factors Affecting HRM in International Markets

GlobalHRM

Culture

EducationEconomicSystems

Political-Legal

Systems


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Culture

Set of important assumptions that members of a community share

Culture can greatly affect a countrys laws.

Often determines the effectiveness of various HRM practices.

Influences what people value, so it affects peoples economic systems and

efforts to invest in education.

Affect a countrys economy through their promotion of individual workethics and incentives for individuals to increase their human capital

Organizations must prepare managers to recognize and handle cultural

differences.

Recruit managers with knowledge of other cultures

Provide training


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HofstedesFive Dimensions of Culture

1. Individualism/Collectivism Describes the strength of the relation between anindividual and other individuals in the society.

2. Power Distance Concerns the way the culture deals with unequal

distribution of power and defines the amount of

inequality that is normal.3. Uncertainty Avoidance Describes how cultures handle the fact that the

future is unpredictable.

4. Masculinity/Femininity The emphasis a culture places on practices or

qualities that have traditionally been considered

masculine or feminine.5. Long-term/Short-term

Orientation

Suggests whether the focus of cultural values is

on the future (long term) or the past and present

(short term).


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Education and Skill Levels

Companies with foreign operations locate incountries where they can find suitable employees.

The educations and skill levels of a countrys laborforce affect how and the extent to which companies

want to operate there. In countries with a poorly educated population,

companies will limit their activities to low-skill, low-wage jobs.


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Economic System

The economic system provides many of theincentives or disincentives for developing the valueof the labor force.

In developed countries with great wealth, labor costs

are relatively high. This impacts compensation andstaffing practices.

Income tax differences between countries make paystructures more complicated when they cross

national boundaries.


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Political-Legal System

The countrys laws often dictate the requirements forHRM practices: training, compensation, hiring, firing,

and layoffs.

An organization that expands internationally must

gain expertise in the host countrys legal

requirements and ways of dealing with its legal

system.

Organizations will hire one or more host- country

nationals to help in the process.


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Managing Expatriates: Selecting Expatriate

Managers

Expatriate managers need technicalcompetence in the area of operations.

In addition, many other skills are necessary tobe successful in an overseas assignment:Ability to maintain a positive self-image and feeling

of well-being

Ability to foster relationships with host-countrynationals

Ability to perceive and evaluate the host countrysenvironment accurately


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Topics for Assessing Candidates for

Overseas AssignmentsMotivation

Health

Language ability

FamilyConsiderations

Resourcefulness

Adaptability

Career Planning

Financial


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Managing Expatriates:

Preparing Expatriates

Pre-assignment sitevisit

Job orientation

Country orientation

Culture orientation

Language training

Compensation / benefits

/ taxes counseling

Housing counseling

Health care / schools /

shopping / recreation

counseling

Counseling by returning

expatriates

Local sponsorship from

host country

C ti E t i t


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Compensating Expatriates

Balance sheet approach this approach adjusts

the managers compensation so that it gives themanager the same standard of living as in the

home country plus extra pay for the inconvenience

of locating overseas.

This approach involves an effort by the globalorganization to ensure that its expatriates are

made whole.


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THANK YOU!

Documents

Managing Human Resource Globally