Hiring and Managing Employees

1. Hiring and Managing Employees

2. Refers to the activities an organization carries out to use its human resources effectively Four major tasks of HRM Staffing policy Management training and development Performance appraisal Compensation policy Human Resource Management (HRM)

3. Strategic role: HRM policies should be congruent with the firm’s strategy and its formal and informal structure and controls Task complicated by profound differences between countries in labor markets, culture, legal, and economic systems International Human Resource Management

4. Recruitment and selection Compensation Training and development Labor relations International H.R.M. Expatriates Citizens of one country who are living and working in another country Often modified

5. Different labor markets Mix of available workers Mix of labor costs International worker mobility problems National management styles and practices National orientations Strategy and control Factors Making International HR Difficult 21-1

6. Locals – citizens of the countries in which they are working Expatriates – non-citizen Home-country national Third-country national International Managerial Terms 21-1

7. Ethnocentric Staffing Individuals from home country manage operations abroad Advantages • Tight control over subsidiaries • Locally qualified people not always available • Re-create local operations in home-office image • Interests of home office may be better protected Disadvantages • Relocations are expensive • Create “foreign” image for the business

8. Polycentric Staffing Individuals from host country manage operations abroad Advantages • Responsibility on those knowing local business • Avoid expensive relocations from home nation Disadvantages • Potentially lose control of subsidiary

9. Geocentric Staffing Best-qualified individuals, regardless of nationality, manage operations abroad Advantages • Develop global managers who can adjust • easily to any business environment Disadvantages • These individuals command high salaries

10. Typically more difficult to fill than domestic positions because: People don’t like to move There are legal impediments to using expatriates Many are apprehensive about language issues Many assignments are open-ended Perception that assignment abroad will negatively affect family lifestyle Living is more expensive abroad Filling Foreign Managerial Positions 21-1

11. Lack of locally qualified candidates Broaden the companies understanding of the overall corporate system Gain professional/foreign experience Can control operations according to headquarters’ preferences Need to transfer technology abroad Gain valuable educational experience Reasons to Use Expatriates 21-1

12. Take inventory of current human resources Estimate firm’s future human resource needs Develop plan to recruit and select people for vacant and anticipated new positions Human Resource Planning Forecasting human resource needs and supply Phase 1 Phase 2 Phase 3

13. Current employees • Recent college graduates • Local managerial talent • Nonmanagerial workers Recruiting Human Resources Process of identifying and attracting a qualified pool of applicants for vacant positions

14. Ability to bridge cultural • differences is key • Expatriates must adapt • to new ways of life • Cultural sensitivity raises • odds for success Selecting Human Resources Process of screening and hiring the best-qualified applicants with the greatest performance potential

15. Technical competence Adaptiveness Those needed for self-maintenance Those related to development of satisfactory relationships Flexibility Tolerance Cognitive skills Local acceptance Most common reason for failure is inability of the expatriate’s family to adjust Selecting the Proper Expatriate 21-1

16. Allegiance of Expatriate Managers 21-1

17. Expatriate failure: premature return of the expatriate manager to his/her home country Cost of failure is high: estimate = 3X the expatriate’s annual salary plus the cost of relocation (impacted by currency exchange rates and assignment location) The Expatriate Problem

18. US multinationals Inability of spouse to adjust Manager’s inability to adjust Other family problems Manager’s personal or emotional immaturity Inability to cope with larger overseas responsibilities European multinationals Inability of spouse to adjust Japanese Firms Inability to cope with larger overseas responsibilities Difficulties with the new environment Personal or emotional problems Lack of technical competence Inability of spouse to adjust Reasons for Expatriate Failure

19. Culture Shock Psychological process affecting people living abroad that is characterized by homesickness, irritability, confusion, aggravation and depression Stage I: Thrilling experience Stage II: Downward slide Stage III: Recovery begins Stage IV: Embrace local culture

20. Training: Obtaining skills for a particular foreign posting Cultural training: Seeks to foster an appreciation of the host country’s culture Language training: Can improve expatriate’s effectiveness, aids in relating more easily to foreign culture, and fosters a better firm image Practical training: Ease into day-to-day life of the host country Training and Management Development

21. Cultural Training Methods

22. Compiling a Cultural Profile CultureGrams Background Notes Country Studies Area Handbooks

23. Employee Compensation Managerial employees Nonmanagerial workers Cost-of-living effects Greater cross-border investment Bonus and tax incentives Greater labor mobility in some markets Cultural and social factors

24. 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 Components of Expatriate Pay

25. A critical issue in the training and development of expatriate managers is preparing them for reentry into their home country Repatriation should be seen as the final link in an integrated, circular process that selects, trains, sends, and brings home expatriate managers Research shows that there is a problem with the repatriation process Repatriation of Expatriates

26. Once-natural thoughts and • feelings now strange • Can be more unsettling than • culture shock • Many companies reabsorb • expatriates poorly • Home-culture reorientation • programs • Career-counseling sessions • Career-development program • before posting abroad Reverse Culture Shock Psychological process of readapting to one’s home culture  Methods of reducing its effects 

27. Didn’t know what position they hold upon return. Firm vague about return, role and career progression. Took lower level job. Leave firm within one year. Leave firm within three years 10 20 30 40 50 60 70 percent Repatriation of Expatriates

28. Rooted in local culture • Often affected by • political movements • Directly influences • workers’ lives Labor-Management Relations Positive or negative condition of relations between a company’s management and its workers

29. Can affect selection of a location Can affect company performance in a market Popularity of emerging markets in Asia Union power declining across much of Europe Importance of Labor Unions

30. International Labor Movements International activities of unions are making progress in improving treatment of workers and reducing child labor But generating support can be difficult because: • Events in distant lands difficult to comprehend • Workers in different nations often compete