Staffing and Training for Global Operations

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Staffing and Training for Global Operations

• Chapter 9

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(No Transcript)
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International HRM

• The management of human resources in global
  corporations
• The management of expatriate employee
• The comparison of human resource management
  practices in different countries

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Factors Influencing Staffing Company

• Ownership of Foreign Subsidiaries
• Technology
• Market Influences
• Organizational Structure
• Commitment to International Business
• Style of Management

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Factors Influencing Staffing Individuals

• Qualifications and Experience
• Record of Previous Performance
• Commitment to International Business
• Suitability for International Business
• Family Commitment

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Factors Influencing Staffing Host-Country

• Level of Economic and Technological Development
• Political Stability
• Control of Foreign Investment
• Availability of Qualified Personnel
• Sociocultural Setting
• Geographical Location

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Factors Differing IHRM from HRM

• Different Labor Markets
• International Mobility Problems
• National Management Styles and Practices
• National Orientations
• Strategy and Control

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Types of Staffing Policy The Ethnocentric
Approach

• All key management positions are filled by
  parent-country nationals (PCNs).
• Overcomes lack of qualified managers in host
  country.
• Maintain a unified corporate culture.
• Helps transfer core competencies.
• Produces resentment in host country.
• Can lead to cultural myopia.

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Types of Staffing Policy The Polycentric
Approach

• Host-country nationals (HCNs) manage
  subsidiaries, while parent-country nationals
  occupy key positions at headquarters.
• Alleviates cultural myopia.
• Inexpensive to implement.
• Limits career mobility.
• Isolates headquarters from foreign subsidiaries.

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Types of Staffing Policy The Global Approach

• Seeks the best people for key jobs throughout the
  organization, regardless of nationality.
• Greater pool of qualified candidates.
• Uses human resources efficiently.
• Helps build strong culture and informal
  management network.
• Immigration policies may limit implementation.
• Expensive.

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Maintaining a Globalization Momentum Through a
Global Staffing Policy(Exhibit 9-1)
Top management commitment
B a r r ier s
Search for global operators Staff
transfers Intl team
Global staffing policy
Momentum Maintained
Globalization Momentum
Staff availability Time and cost constraints Host
government requirements HRM policies
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Recruitment and SelectionClassifying Employees

• Parent Country National (PCN) The employees
  nationality is the same as the organizations
• Host Country National (HCN)The employees
  nationality is the same as the location of the
  subsidiary
• Third Country National (TCN) The employees
  nationality is neither that of the organization
  nor that of the location of the subsidiary

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Recruitment and Selection

• College Recruitment
• Management Inventories
• Adaptability Assessment

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SELECTION CRITERIA FOR INTERNATIONAL ASSIGNMENTS
Spouses and Dependents
Independence and Self-Reliance
Adaptability to Cultural Change
Leadership Ability
Communication Skills
Technical Competence
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The Compensation Issue
The major reason for the decline in the number of
expatriates in recent years is because of the
large expenses involved
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Compensation Expatriate

• MNEs must pay enough to attract people to move
  but must not overpay
• Cost of living
• Job-status payment
• Foreign-service premiums and hardship allowances
• Complications of nationality differences

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Components of an Expatriate Compensation Package

• Salary
• Home rate/home currency
• Local rate/local currency
• Salary adjustments or promotions home or local
  standard
• Bonus home or local currency, home or local
  standard
• Stock options
• Inducement payment/hardship premium percentage
  of salary or lump sum payment, home/local
  currency
• Currency protection discretion or split basis
• Global salary and performance structures

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Components of an Expatriate Compensation Package
(contd.)

• Taxation
• Tax protection
• Tax equalization
• Other services
• Benefits
• Home-country program
• Local program
• Social Security program

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Components of an Expatriate Compensation Package
(contd.)

• Allowances
• Cost-of-living allowances
• Housing standard
• Education
• Relocation
• Perquisites
• Home leave
• Shipping and storage

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Cost of Living In Select Cities
0 25 50 75 100 125 150
Tokyo Hong Kong London Moscow New York Sao
Paulo Athens Mexico City Prague Delhi
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Common Elements in an Expatriate Compensation
Package

• 1. In the US this was around 175,000 for
  upper-middle managers in the late-1990s
• 2. Extra vacation time, paid airfare for annual
  visit home, emergency leave.
• 3. Cost-of-living, relocation, housing,
  education, and hardship
• 4. Two tax bills, from the host country and the
  U.S.
• 5. One-time, lump sum premium.

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Compensation Labor

• Importance of Differences
• MNEs may need to pay more than local companies to
  entice workers from existing jobs
• Fringe Benefits
• Fringe benefits vary substantially among
  countries
• Job-Security Benefits
• Liability for Injuries
• How to Compare
• Labor-Cost Dynamics

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Cross-Cultural Training Purposes

• Encourage sensitivity
• Increase the cross-cultural skills
• Promote awareness of underlying values of a
  culture
• Reduce culture shock
• Build rapport, trust, and confidence
• Improve managerial effectiveness
• Improve customer and employee relationships

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Training

• Cultural Training seeks to foster an appreciation
  of the host countrys culture.
• Language Training helps build rapport with local
  employees and improve managers effectiveness.
• Practical Training is aimed at helping the
  expatriate manager and the family ease themselves
  into day-to-day life in the host country.

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Training Techniques (as classified by Tung)

• Area studies, that is, documentary programs about
  the countrys geography, economics,
  sociopolitical history, and so forth
• Culture assimilators, which expose trainees to
  the kinds of situations they are likely to
  encounter that are critical to successful
  interactions
• Language training
• Sensitivity training
• Field experiences exposure to people from other
  cultures within the trainees own country.

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Cross-Cultural Training Rigor Low
Technique Lectures, videotapes, reading
background material. Objectives Provide
background information on host country business
and national culture, basic information on
company operation.
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Cross-Cultural Training Rigor
Technique Intercultural experiential learning
exercises, role playing, simulations, case
studies, survival language training. Objectives
Build general and specific knowledge of host
country culture, reduce enthocentrism.
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Cross-Cultural Training Rigor High
Technique Field trips to host country, meeting
with managers experienced in host country,
meeting with host country national, intensive
language training. Objectives Develop comfort
with host country national culture, business
culture, and social institutions.
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Training Program Design Process
Strategic Goals
Goals of Training
Delivery System
Methodologies
Needs Analysis
Syllabus
Materials Design
Resource Analysis
Past Evaluation
Program Implementation
Evaluation