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2017_ihrm_lecture_4.pptxAgenda
Introduction
Strategic International Human Resource Management
Culture and International HRM/ Cross-cultural management
Global Staffing and International Assignments
Institutions, Actors and Micropolitics
Global Talent Management
International Compensation and Reward
Global Labour Regulation and Corporate Social Responsibility
Global Diversity Management
Gender and IHRM
Summary and review
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2017
Review
Quantitative approaches to culture are tempting but have limited reliability when it comes to individuals
To understand culture we need to understand the history of societies that individuals are embedded in
It is normal for people to categorize people into ingroups and outgroups
Stereotypes of outgroups typically affect perceptions of warmth and competence
Potential remedies to conflicts include striving for a common identity, interpersonal trust and curiosity to get to know the other
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2017
Discuss key features in international workforce planning
Explore the link between international assignments and organisational strategy
Discuss different forms of international assignment
Discuss challenges with expatriation
Outline
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International Workforce Planning
Workforce
The enterprise’s present employees
Labor Pool
Potential employees (the labor market) from which a firm attracts and hires its work force
Labor market
Internal labor market
External labor market
Extended internal labor market
Staffing Decision
Successful organizations of the future will be those that can attract the best global talent and nurture, develop, and retain it
Each employment decision can add to, or subtract from, the overall quality of the workforce.
It is more difficult to correct mistakes. The process can be prolonged and costly.
Employees can have a detrimental impact on the performance of others.
Why is it important to make the right staffing decisions?
Global Staffing
IHRM captures two distinct aspects of staffing: understanding of how selection decisions are made in different countries; and the selection of people for international assignments.
The cost of lost opportunities; the cost of recruiting people if people leave soon after they are appointed.
The costs of managing poor performers.
Global staffing is more complex, shortage of international management talent.
Workforce/ human resource planning
How many people do you need?
When do you need them?
What skills and competences should they have?
Where do you find them?
How can you ensure you have not too many or too few in relation to job requirements?
What future demands might be?
How can you reduce your labour force in ways that reflect social and legal norms, and maintain the reputation as an employer, ensure that labour costs stay within the budget , but also maintain the organisations commitment to the welfare of its employees?
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Features of effective HR planning
Based on organization’s objectives
Flexible
Built-in contingencies (the availability of skills, analysis of local education system )
Regularly reviewed
Overall strategic direction
Timelines identified
Priorities identified
Resource identified
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International Workforce Planning
International Workforce Planning
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Availability of data
Population characteristics: shortages and surpluses
Increasing diversity of labor forces and workforces
Labor mobility: emigration and immigration
Brain drain and job exporting
Figure 3.1
Choices of International Organizational Structure
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Rosemary Morlin (RM) - Second line of source text: closing parentheses after 1998 should be roman, not italic
Tendency to hire from the HQ country and send employees on international assignment to the subsidiaries: Home-Country Oriented
Source talent from anywhere in the world: World-Oriented
Favor using people from the region
International Staffing
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Ethnocentric staffing
Regiocentric staffing
Geocentric staffing
Polycentric staffing
Headquarters Orientation Towards Subsidiaries in the MNE
| Organizational Design | Ethnocentric | Polycentric | Geocentric |
| Complexity of Organization | Complex in home country, simple in subsidiaries | Varied and independent | Increasingly complex and interdependent |
| Authority;Decision Making | High in HQ | Relatively low in HQ | Aim for a collaborative approach between HQ and subsidiaries |
| Evaluation and Control | Home standards applied for peopleand performance | Determined locally | Find standards which are universal and local |
| Rewards and Punishments; Incentives | High in HQ low in subsidiaries | Wide variation; can be high or low rewards for subsidiary performance | International and local executives rewarded for teaching local and worldwide objectives |
| Communication; Information Flow | High volume to subsidiaries orders, commands, advice | Little to and from HQ, little between subsidiaries | Both ways and between subsidiaries. Heads of subsidiaries part of management team |
| Identification | Nationality of the owner | Nationality of the host country | Truly international company but identifying with national interests |
| Recruitment | Recruit and develop people of home country for key positions everywhere in the world | Develop people of local nationality for key positions in their own country | Develop best people everywhere in the world for key positions everywhere in the world |
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Ethnocentric approach to staffing
Rationale:
A perceived lack of qualified host-country nationals.
The need to reduce the perceived high risks inherent in the novel environments.
Disadvantages:
It limits the promotion opportunities for local labour force, which may lead to reduced productivity and increased turnover among the group.
The adaption of expatriates take a long time, during which the mistakes could be made
Compensation packages are very different, it might lead to feelings of injustice and unfairness.
For many expatriates there are the expectations of higher status, higher standard of living attached to a key overseas position. This can make them less sensitive to the needs of local workforce.
Polycentric approach
Rationale:
It eliminates language barriers.
It helps with approaching sensitive political situation.
It is less expensive, even if a premium is paid to attract high-quality local applicants.
It provides continuity of management
Polycentric approach
Disadvantages:
MNE can become a ‘federation’ of independent national units with nominal links to corporate headquarters.
Host-country managers have limited opportunities to gain experience outside their country and cannot progress beyond the senior positions in their own subsidiary.
Geocentric approach
Main Advantages:
It enables MNEs to develop an international executive team.
To attract an international pool of labour.
It overcomes the ‘federation’ drawback.
This approach supports cooperation and resource sharing across units.
Geocentric approach
Disadvantages:
Countries might have immigration controls.
Local bureaucracy might make it labour intensive and expensive.
Training and relocation costs.
Lost of autonomy may be resisted by subsidiaries.
International Staffing
Types of International Employees
Parent country nationals (PCNs)
Host country nationals (HCNs)
Third country nationals (TCNs)
Expatriates
PCNs who have worked for more that one year in a foreign subsidiary of their MNE
Repatriates
Expatriates PCNs who have returned to their home country
Inpatriates
Employees (HCNs or TCNs) who have relocated to a company location in the parent company’s headquarters home country
Expatriation as a Critical IHRM Tool
Traditionally, groups of managers “deployed” to “disseminate corporate strategy and culture to local units and to transfer competence across borders” (Brewster et al 2007:233)
Alignment of international assignments with organizational strategy best understood in relation to the dominant orientation of the organization (ethnocentric, polycentric and geocentric)
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Figure 41 The global assignment cycle
belongs to Brewster, Sparrow, Vernon & Houldsworth, 2011
The global assignment cycle
The global assignment cycle
Cultural similarity between a parent company and a subsidiary is a moderator.
Type of industry (multi-domestic industries are retailing, distribution, insurance), global industries (commercial aircraft, semiconductors).
Firm specific variables (structure, international experience, organizational culture).
The establishment method of the subsidiary (a merger, an acquisition or a shared partnership)
Existing IHRM practices.
Local factors
Legal frameworks and legislative cultures.
The level of concern and commitment to equality and fair and equal treatment.
Attitudes towards applicant privacy.
Perceived relevance of different methods in relation to different jobs.
The labour market including the availability of skills to employers, local education systems, wage levels and contemporary trends in wage rises, population age profiles.
How important are cultural factors as opposed to past knowledge and experience for international assignments?
Introduction: Why is this question important?
The success of expatriate selection has been considered low, with a high percentage of assignments ending prematurely; lack of employee preparation for international assignments receives a fair share of blame (Grainger and Nankervis, 2001). What to consider when the selection is made…
Main body can include what types of expatriates, what types of assignments, what the general concerns are, what obstacles might expatriates face. The emphasis needs to be on cross-cultural obstacles
Position filling (often short-term due to the lack of available skills)
Management development (both short-term and long-term to assist the development of common values)
Organizational development (need to control, transfer knowledge, procedures and practices).
Importance of international Assignments (in 2010 only 27% of companies experienced an increase in the number of international assignments versus 68 % prediction in 2005) (Brookfield Global Relocation Trends Survey, 2010)
Purpose(s) of Assignments
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Traditional assignments
Typically 12 – 36 months
Family joins the assignee.
Selection: formal procedure
Disadvantages: dual-career considerations, expensive, less flexibility.
Short –term assignments
Skill transfer/ problem solving, managerial control.
Typically up to 6 or 12 months.
Flexibility, simplicity, cost-effectiveness.
Taxation, effects on families, poor relationships with local colleagues.
Work permit issues.
International management skills
Relational abilities – strong social skills, managing first impressions, maintaining regard for others, and active listening.
Cultural sensitivity involves understanding, empathy, adaptability.
Linguistic ability.
Managing stress
International management skills
In addition, Hurn (2006) identifies the following competences of the international manager:
Ability to work with people who hold different ethical and cultural views.
Ability to work in and lead multinational and often dispersed (virtual) teams;
Ability to manage personal situations such as schooling for children and the work-life choices.
International Staffing Choices: Implications for MNEs
Questions that IHR need to address:
What is the extent of the use of each of these types of IE?
How does the preparation and support for each of these types of IE vary? What form does the preparation and support take for each?
Does the international strategy or structure of the firm influence the type of IE employed?
Which international-business or cross-cultural competency is required by which type of international employee?
Which performance management problems arise for which type of international employee? And which solutions are most appropriate?
International Staffing Choices: Implications for MNEs (cont.)
Are there specific management, organizational, and IHR outcomes that differ according to the type of international employee?
For which type of work and business purposes are the various types of international employees used?
Which types of international employee are most cost-effective?
What are the best practices among various types of international firms in terms of the utilization of various types of international employees?
Do varying types of IE experience differential amounts of stress or other forms of personal problems?
Refers to the process of moving any employee from one country to another for a period of more than one year
As organizations become more global, they develop a need for international managers with greater international experience
Recruitment
Internal
External
Expatriates or International Assignees:
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The International Recruitment Function
Internal and external Recruiting Sources
Global Talent Management Inventories
In-house Global Leadership Programs
Former/Current Expatriates
Nominations
Internal Job Posting/Intranet
International Succession Planning Programs
Employee Referrals
Job Fairs
Company Internet Sites
Executive Search Firms
Professional Associations or Networks
Competing Firms
Global Leadership Programs in Universities and Colleges
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Finding a candidate with high receptivity to IA
Rosemary Morlin (RM) - Change 'Children education allowance' to 'Children's educatoin allowance'
Receptivity to International Careers
Personality
Cross-cultural competencies
Prior international experience
Age
Family status
Marital status
Education
Destination country
Opportunities for career support
Company culture
Career and repatriation planning
Gender
Length of the foreign assignment
Overseas health care plan
Income tax equalization policy
Host country housing assistance
Spouse job assistance
Spouse’s willingness to travel overseas
Children education allowance
The International Selection Function
Critical Selection Criteria for International Assignments
Cultural Adaptability
Job Suitability
Desire for Foreign Assignment
Candidate for International Assignment
“Strategic” Problems with Expatriation
High costs
Difficulty in measuring ROI (“returns on investment”)
Selection difficulties
Training difficulties
High rates of appointment failures
Complications of relationships with subsidiaries
Variable desirability of mobility by employees
Work-life balance and family life
Repatriation adjustment and costs
Retention problems
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Changes in International Assignments - Demographics of the Expat Workforce
Increasing numbers of expatriates from outside the HQ country; including “third country nationals” and “inpatriates”
Increasing numbers of women;
Increase in dual-career couples
Proliferation of “new forms of cross-border assignments”; international commuting; short term assignments; business travel etc.
Challenges from new technological capabilities and uncertain relationship between use of new ICT and expatriation (self-initiated expatriation)
Increasing expectation of career returns on expatriation; hence a rise of self-arranged expatriation by individuals
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Expatriate failure
The term means the premature return of an expatriate. In such a case, an expatriate failure represents a selection error.
Harzing also suggests that the definition should also include poor performance.
Reasons: inability to adapt on the part of the spouse, the maturity of the manager, stress from higher responsibility, MNEs’ support, poor candidate selection.
Global Health and Safety: Well-Being of the International Workforce
Increasing attention to employee well-being around the world
Increasing numbers of employees at potential risk because of increased global trade:
More workers in more locales in “at risk” jobs
More offices and plants in more locations and forms
Increasing number of business travelers
More people on short- and longer-term international assignments to more countries, often with their families
Growing problems with civil unrest and global terrorism
Examples
January 2013. BP and Statoil attacks in Algeria
-Hostage situation, 40 killed
August 2013, 21 year old German intern working for Bank of America Merrill Lynch is found dead
-Intern forced to work through the night eight times in two weeks
Stress/burnout
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Repatriation
Keeping in touch with your home office.
Getting the “word out” to home-country colleagues should start three to four months before returning.
It is also important not to rely on any one manager to “look out” for your career. Instead, have a roster of people you can count on.
Develop a plan for repatriation even before departure.
Plan for return on their investment.
They also recognise that employees with a global profile and experience can be rare and valuable assets
Treat your homecoming like any other overseas assignment.
Do your research into changes at the company, the current discussions around the water cooler and even pop culture references. Also, give yourself time and employ strategies for combating culture shock, such as maintaining links — both physical and emotional — with the place you just left.
Seminar 4: In your workshop group:
With your team, you will create a proposal for an expatriate contract. The manager is currently employed in Brighton and will be offered to go on an oversee assignment. She is married and has 2 children, aged 10 and 14. Her current salary is 80.000GBP.
You will be given a city that the manager should repatriate to
Look up the cost of living situation on the website Numbeo: https://www.numbeo.com/cost-of-living/.
Do research on costs and offers for Healthcare, Housing, Schooling, Cultural integration classes, visits to Brighton
Create a budget and make an offer for her expatriate assignment
Present your work to the other teams. Which offer would you accept? How feasible is the offer from the company’s perspective?
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Questions? What are the 3 things that you learned in this lecture?
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Agenda
Introduction
Strategic International Human Resource Management
Culture and International HRM/ Cross-cultural management
Global Staffing and International Assignments
Institutions, Actors and Micropolitics
Global Talent Management
International Compensation and Reward
Global Labour Regulation and Corporate Social Responsibility
Global Diversity Management
Gender and IHRM
Summary and review
Page 45
Questions?
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