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CHAPTER 11 INTERNATIONAL HUMAN RESOURCE MANAGEMENT

CHAPTER 11 INTERNATIONAL HUMAN RESOURCE MANAGEMENT. HRM . HRM Defined: The design of formal systems in an organization to ensure effective and efficient use of human talent to accomplish organizational goals Deals with the entire relationship of the employee with the organization

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CHAPTER 11 INTERNATIONAL HUMAN RESOURCE MANAGEMENT

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  1. CHAPTER 11 INTERNATIONAL HUMAN RESOURCE MANAGEMENT

  2. HRM HRM Defined: • The design of formal systems in an organization to ensure effective and efficient use of human talent to accomplish organizational goals • Deals with the entire relationship of the employee with the organization SHRM Defined: • It involves designing and implementing a set of internally consistent policies and practices that ensure a firm’s human capital contribute to the achievement of its business objectives • This includes both vertical (linking HRM practices with strategic management process) and horizontal (the integration of the various HRM practices) integration as well • Additionally, linking the people of the firm (in terms of their skills and actions) to the strategic needs of the firm IHRM: Applied to international setting

  3. COMPONENTS OF HRM • HR Planning • Recruitment • Selection • Orientation/Socialization • Training & Development • Performance Appraisal • Compensation • Labor Relations • Repatriation

  4. Research and Development Human Resource Management Finance Strategic Goals Marketing Production The Strategic View

  5. INTERNATIONAL HRM (IHRM) • Basic HRM issues remain • Must choose a mixture of international employees • How much to adapt to local conditions?

  6. IHRM

  7. EMPLOYEES IN MULTINATIONAL ORGANIZATIONS • Host country nationals • Expatriates • Home country nationals • Third country nationals • Inpatriates

  8. MULTINATIONAL MANAGERS • Host country or expatriate?

  9. USING HOST COUNTRY MANAGERS • Do they have the expertise for the position? • Can we recruit them from outside the company?

  10. USING EXPATRIATE MANAGERS • Do parent country managers have the appropriate skills? • Are they willing to take expatriate assignments? • Do any laws affect the assignment of expatriate managers?

  11. IS THE EXPATRIATE WORTH IT? • High cost • High failure rate

  12. EXHIBIT 11.1 PAYING FOR THE EXPATRIATE MANAGER

  13. REASONS FOR U.S. EXPATRIATE FAILURE • Spouse fails to adapt • Manager fails to adapt • Other problems within the family • Personality of the manager • Level of responsibilities

  14. Reasons for expatriate failure, continued • Lack of technical proficiency • No motivation for assignment

  15. MOTIVATIONS TO USE EXPATS • Managers acquire international skills • Coordinate and control operations dispersed activities • Communication of local needs/strategic information to headquarters

  16. HR Planning • Process by which organizations anticipate future staffing needs and plan programs to ensure that the correct number and type of employees are available when they are needed. • Concerned with the flow of people into, through, and out of an organization.

  17. RECRUITMENT Attract qualified applicants The ability to locate, attract, and have available when needed, an adequate but appropriate number (supply) of qualified individuals who are a good match for the job and the overall organization and to accomplish this at the least possible expense.

  18. US RECRUITMENT STRATEGIES • Open and public • See Exhibit 12.3

  19. Backdoor School contacts KOREAN RECRUITMENT: A COLLECTIVIST APPROACH

  20. SELECTION To identify from a pool of applicants those individuals who will be hired.

  21. Match skills and job requirements Universalistic criteria See Exhibit 12.4 THE US APPROACH TO SELECTION

  22. SELECTION IN COLLECTIVIST CULTURES • The in-group • Preference for family • Value personal characteristics • High school and university ties substitute for family membership

  23. IMPLICATIONS FOR THE MULTINATIONAL • Managers must follow local norms to get best workers • Often a tradeoff with benefits of home country practices

  24. A Model for Selecting Expatriates The right person for foreign assignment

  25. KEY EXPATRIATE SUCCESS FACTORS • Professional/technical competence • Relational abilities • Motivation • Family situation • Language skills • Willingness to accept position

  26. PRIORITY OF SUCCESS FACTORS • Depends on : • assignment length • cultural distance • amount of required interaction with local people • job complexity/responsibility

  27. EXHIBIT 11.3 SHOWS A DECISION MATRIX USED TO SET PRIORITIES OR DIFFERENT SUCCESS FACTORS DURING SELECTION

  28. EXPATRIATE TRAINING

  29. TRAINING RIGOR The extent of effort by trainees and trainers required to prepare the trainees for expatriate positions

  30. LOW RIGOR TRAINING • Short time period • Lectures • Videos on local culture • Briefings on company operations company operations

  31. HIGH RIGOR TRAINING • Lasts over a month • Experiential learning • Extensive language training • Often includes interactions with host country nationals

  32. EXHIBIT 11.4 SHOWS VARIOUS TRAINING TECHNIQUES AND THEIR OBJECTIVES AS THE RIGOR OF THE CROSS- CULTURAL TRAINING GROWS

  33. PERFORMANCE APPRAISAL • Identifying people to reward, promote, demote, develop and improve, retain, or fire • The process by which an employee’s contribution to the organization during a specified period of time is assessed.

  34. CHALLENGES OF EXPATRIATE PERFORMANCE APPRAISAL • Unreliable data • Complex and volatile environments • Time differences and distance separation • Local cultural situations

  35. STEPS TO IMPROVE THE PROCESS 1. Fit the evaluation criteria to strategy. 2. Fine tune the evaluation criteria 3. Use multiple evaluators with varying periods of evaluation

  36. EXHIBIT 11.6 Shows several sources of information a superior or the HRM professionals may use to evaluate an expatriate managers

  37. EXPATRIATE COMPENSATION Wages and salaries, incentives such as bonuses, and benefits such as retirement contributions

  38. COMPENSATION IN THE U.S. • Wages and salaries differ based on two major factors • external • internal

  39. COMPENSATION IN JAPAN: TRADITIONAL APPROACH • Base salaries for positions • Skill and educational requirements • Age • Marital status and family size may count • Bonuses

  40. THE BALANCE SHEET APPROACH • Provides a compensation package that equates purchasing power

  41. BALANCE SHEET COSTS • Allowances for cost of living, housing, utilities, furnishing, educational expenses, medical expenses, club memberships, and car and/or driver expenses

  42. OTHER APPROACHES • Parent country wages everywhere • Wean expatriates from allowances • Pay based on local or regional markets • Cafeteria selection of allowances • Global pay systems

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