Unit IV Socil Env.&Staffing

8/9/2019 Unit IV Socil Env.&Staffing

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UNIT IV

- Concept, Social environment and HR practices, Staffing: Internationalrecruitment, selection, training and hiring policies, Staff retaining and motivating

techniques, case study.

Social Environment and Staffing


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Introduction

Human resource management (HRM) refers to theactivities an organization carries out to utilize its humanresources effectively

These activities include:

determining the firm's human resource strategy

staffing

performance evaluation

management developmentcompensation

labor relations


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Staffing Policy

A firms staffing policy is concerned with the selection of

employees who have the skills required to perform a

particular job

A staffing policy can be a tool for developing andpromoting the firms corporate culture (the organizations

norms and value system)

A strong corporate culture can help the firm implement its

strategy


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Types Of Staffing Policy

There are three main approaches to staffing policy within

international businesses:

1. the ethnocentric approach

2. the polycentric approach3. the geocentric approach


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Classroom Performance System

The three types of staffing approaches for international

firms include all of the following

a) Transnational

b) Ethnocentric

c) Geocentric

d) Polycentric


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1. The ethnocentric approach

Under this approach MNCs at their headquarters

formulate mission, objectives, strategies, etc. also make

important decisions for the subsidiaries and expect thesubsidiaries to implement them and report back to all line

managers level.

The policies, systems, etc. that work at parent companies

will also works at subsidiaries.

The human resource for the subsidiaries are sourced

from the parent companies nationals. Eg. Philips, P & G,

Toyota.


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WHY DO MNCs PREFER THIS

APPROACH

Non availability of qualified personnel in host countries.

Availability of qualified personnel at low cost in home

country.

More commitment toward the implementation of policiesby HCNs

High sense of belongingness by the HCNs.


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WHEN SHOULD MNCS PREFER PCNs

During the early stage of the establishment of subsidiary

Inadequacy of managerial and technical skills in the host

country.

Greater need for maintaining uniform corporate cultureWhen PCNs are less costly than HCNs

When the headquarters has core competencies in terms

of skills and knowledge.


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ADVANTAGES

PCNs are familiar with companys goals,strategies,tactics

and policies.

PCNs are more knowledgeable of the companys

products, technology, customer needs and problems.PCNs maintain close communication with the

headquarters.

PCNs have close personal network with the headquaters

employees and so they can get things done easily.


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DISADVANTAGES

Absence of opportunities for HCNs to get better jobs.

Decline in morale and loyalty of HCNs towards MNCs

High cost of salaries and benefits of expatriates create a

sense of wage discrimination among HCNs.Results in complexities of cross-cultural diversity

management of employees in the host country.

MNCs fails to get the best decisions ans strategies.


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2.The polycentric staffing policy

Under this approach MNC treats each subsidiary as an

independent company and decentralizes all the decision

making authorities.It mainly focuses on the conditions of the host countries

in formulation and implementation of strategies. Eg. Coca

Cola.


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APPROACH

To help the nationals of the country where the subsidiary

is located.

MNCs feels its responsibility and discharge the same

toward the society, where the subsidiary is located.HCNs closely fit to the culture of the customer.

To reduce the cost of HR by recruiting the HCNs.

MNCs prefer to become Global Companies i.e. think

globally and act locally.


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During the growth stage of subsidiary.

When the language, culture, customs of doing business

are distinct in host country.

When people of the host country are developed and fullyqualified to take up the jobs in subsidaries.

When the host country government impose a condition

that certain percentage of employees should be from the

nationals of the country.

WHEN SHOULD MNCS PREFER HCNs


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ADVANTAGES

HCNs are less costly than expatriates in almost all

developing countries.

HCNs have better knowledge of the countrys culture,

language and customers.Level of job satisfaction of employees of subsidaries can

be enhanced.

HCNs will have relatively stability and employment.

HCNs have fast and effective adaptability to the business

practices.


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DISADVANTAGES

Organizational culture of the parent country cannot be

adapted in the subsidiaries.

It is difficult to co ordinate the activities of the subsidiaries

with those of the headquarters.Employees of both headquarters and subsidiaries will not

have a feel pf working in a single company.

Managers of headquarters cannot have the hand on

experience of the subsidiary business practices.


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3.Geocentric staffing

Under this approach the entire world is just like a single

country for the MNCs.

The MNC source the best prospective employees interms of the suitability for the job from the entire world,

regardless of nationality or other considerations.

Ex- MS.Indra Nooyi THE Indian national is appointed as

the CEO of Pepsi Cola LTD,IBM


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APPROACH

Global business policy

Intensifying competition

Technological revolution

Innovation practices in various functional areas ofbusiness

Increasing migration


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WHEN SHOULD MNCs PREFER THIS

APPROACH

Maturity stage

Customer awareness

Non-availability of talent in host and home country

Absence of restrictions of host government

Other factors.


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ADVANTAGES

Competent pool

Shared learning

Flexibility and adaptability

Best talent at less cost

Coe competencies.


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DISADVANTAGES

Immigration control by host country Government

Immigration formalities

Additional costs

Opposition from nationals.


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Comparison of Staffing Approaches


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Expatriate Managers

Research shows the main reasons for expatriate failure for

U.S. multinationals are:

the inability of an expatriate's spouse to adapt the

inability of the employee to adjustthe managers inability to adjust

other family-related reasons

the managers personal or emotional maturity

the managers inability to cope with larger overseasresponsibilities


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Expatriate Managers

For European firms, only one reason was found toconsistently explain expatriate failure:

the inability of the managers spouse to adjust to a newenvironment

For Japanese firms, the reasons for failure are:

the inability to cope with larger overseas responsibility

difficulties with the new environment

personal or emotional problemsa lack of technical competence

the inability of spouse to adjust


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Expatriate Managers

Firms can reduce expatriate failure through improved

selection procedures

Four dimensions that predict expatriate success are:1. self-orientation - the expatriate's self-esteem, self-

confidence, and mental well-being

2. others-orientation - the ability to interact effectively with

host-country nationals

3. perceptual ability - the ability to understand why people

of other countries behave the way they do

4. cultural toughness the ability to adjust to the posting


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The process of adjustment

TIME

ADJUSTMENT

Phase1

Honeymoon

Phase 2

Crisis

Cultural shock

Phase 3Adjustment

Phase 4

Mastery


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Selection criteria

Technical ability

Cross-cultural suitability

Family requirements

Country/cultural requirementsMNE requirements

Language

Age,experience and education

AdaptabilitySelf-orientation


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International assignments-factors moderating

performance

MODERATORS

Inability to adjust to foreign culture

Length of assignment

Willingness to move

Work-related factors

Psychological contract

performance

Intention to stay or leave


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Training And Management Development

Training focuses upon preparing the manager for a

specific job

Management development is concerned with developing

the skills of the manager over his or her career with the firmHistorically, most firms focus more on training than on

management development


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Training For Expatriate Managers

Technical training

Functional training

Soft-skills training

Cross-cultural trainingExpatriate training

Global mind-set training

Team training

On-the-job training assignments


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International Training & Development

Recruitment

&

Selection

TRAININGDEVELOP-

MENTInternational

Team

Pre-departure

Training

International

AssignmentsExternal

Hiring


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Types of training program for

Expatriate

Pre-departureTraining

Basic culturalknowledge,climate,banking,marketing

educational,transportation,hotels,

recreational etc.

Post-arrival Training Values,beliefs,perception,attitudes,specific

behavior at eating places,educational

institutions and introduction with

superiors,subordinates and stakeholders

Integrative Training Deeper involvement in personal and family

lives of superiors,subordinates.colleaguesthat affects the work culture.

Habits,preferences and priorities.


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Repatriation Of Expatriates

Preparing and developing expatriate managers for

reentry into their home country organization is an important

part of training and development

HRM needs to develop good programs for re-integratingexpatriates back into work life within their home country

organization once their foreign assignment is over, and for

utilizing the knowledge they acquired while abroad


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Management Development And Strategy

Management development programs increase the overall

skill levels of managers by:

ongoing management education

rotations of managers through jobs within the firm to givethem varied experiences

Management development is often used as a strategic

tool to build a strong unifying culture and informal

management network, both of which are supportive of a

transnational and global strategy


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Performance Appraisal

Performance appraisal systems are part of the firms

control system

Evaluating expatriates can be especially complex


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Performance Appraisal Problems

Total company versus part of it

Standard format versus customized format

Uniformity of data of performance

Environmental variablesTime and distance variations.

Varied levels of maturity

Raters competence

Rater biasCultural adjustment


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Guidelines For Performance Appraisal

To reduce bias in performance appraisal:

most expatriates believe more weight should be given to

an on-site manager's appraisal than to an off-site

manager's appraisala former expatriate who has served in the same location

could be involved in the appraisal process to help reduce

bias

Customization of appraisal forms

Open and continuous communication.


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Compensation

Firms face two key issues on compensation:

1. how to adjust compensation to reflect differences in

economic circumstances and compensation practices

2. how to pay expatriate managers


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Expatriate Pay

An expatriates compensation package is made up of:

1. base salary

2. a foreign service premium

3. various allowances4. tax differentials

5. benefits


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Expatriate Pay

1. Base Salary

An expatriates base salary is normally in the same rangeas the base salary for a similar position in the home country

Base salary can be paid either in the home currency or inthe local currency

2. Foreign Service Premium

A foreign service premium is extra pay the expatriate

receives for working outside his or her country of originIt is generally offered as an incentive to accept foreignassignments


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Expatriate Pay

3. Allowances

Expatriate compensation package often include :

hardship allowances

housing allowancescost-of-living allowances

education allowances


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Expatriate Pay

4. Taxation

The expatriate may have to pay income tax to both the

home country and the host-country governments if the host

country does not have a reciprocal tax treaty with theexpatriates home country

5. Benefits

Many firms provide the same level of medical and

pension benefits abroad that they received at home


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Factors affecting International

Compensation

INTERNAL ENV.

Competitive strategy

Level of technologySubsidiary role

Human resource

structure

Employee-Employer

relationship

Organizational cultureGoal orientation

EXTERNAL ENV.

Parent country

Labour marketCharacteristics

Local conditions

Industry type

Home&Host

country

Government rulesCompetitor's

strategy


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Complexities of compensation management

COMPLEXITIES

VARYING

LOCAL

CONDIITONS

VARYING

TAX

RATES

COUNTRY

PERSPECTIVE

CONSISTENCY

&

EQUITY

EXCHANGE

RATE

FLUCTUATIONS

VARYING

INFLATION

RATES

VARYING

COST OF

LIVING

EMPLOYEE

EXPECTATION


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International Labor Relations

The key issue in international labor relations is the

degree to which organized labor is able to limit the choices

available to an international business

A firm's ability to pursue a transnational or global strategycan be significantly constrained by the actions of labor

unions

HRM needs to foster harmony and minimize conflict

between the firm and organized labor


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The Concerns Of Organized Labor

The bargaining power of unions comes from their ability

to threaten to disrupt production by striking or protesting

However, organized labor is concerned that:multinationals can counter union bargaining power by

threatening to move production to another country

multinationals will farm out only low-skilled jobs to foreign

plants making it easier to switch production locations

multinationals will import employment practices and

contractual agreements from their home countries and

reduce the influence of unions


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The Strategy Of Organized Labor

Organized labor has responded to the increased bargaining

power of multinational corporations by:

trying to set-up their own international organizations

lobbying for national legislation to restrict multinationalstrying to achieve regulations of multinationals through

international organization such as the United Nations

However, these efforts have had only limited success


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Thank you!!!!!

Documents

Unit IV Socil Env.&Staffing