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International Human Resource Manageme nt Practices Asst. Prof. Dr. Serdar AY AN

International Human Resource Manageme nt Practices Asst. Prof. Dr. Serdar AY AN. Human Resource Management and Functions. Human resource management (HRM): deals with the entire relationship of the employee with the organization

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International Human Resource Manageme nt Practices Asst. Prof. Dr. Serdar AY AN

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  1. International Human Resource Management Practices Asst. Prof. Dr. Serdar AYAN

  2. Human Resource Management and Functions • Human resource management (HRM): deals with the entire relationship of the employee with the organization • Recruitment: process of identifying and attracting qualified people to apply for vacant positions • Selection: process of filling vacant positions in the organization

  3. Basic HRM Functions • Training and development: giving employees the knowledge, skills, and abilities to perform successfully • Performance appraisal: system to measure and assess employees’ work performance

  4. Basic HRM Functions • Compensation: organization’s entire reward package, including financial rewards, benefits, and job security • Labor relations: ongoing relationship between an employer and those employees represented by labor organizations

  5. International Human Resource Management (IHRM) • All HRM functions, adapted to the international setting • Two added complexities compared to domestic HRM - Must choose a mixture of international employees - Must decide the extent of adaptation to local conditions

  6. Types of Employees in Multinational Organizations • Expatriate: employee from a different country • Home country nationals: expatriate employees from the parent firm’s home country • Third country nationals: expatriate workers who come from neither the host nor home country

  7. Types of Employees in Multinational Organizations • Host country nationals: local workers who come from the host country where the unit is located • Inpatriate: employees from foreign countries who work in the country where the parent company is located • Flexpatriates: employees who are sent on frequent but short-term international assignments

  8. The Expatriate or the Host Country Manager • Multinationals must decide whether to use expatriates or home country nationals • Need to look at some questions - Given the firm’s strategy, what is the preference for the position?

  9. The Expatriate or the Host Country Manager • 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? • Using host country managers - Do they have the expertise for the position? - Can we recruit them from outside the company?

  10. Is the Expatriate Worth It? • Decisions must take into account costs of such assignments - High cost - High failure rate

  11. Exhibit 11.1: Paying for the Expatriate Manager: Indices of Cost of Living Abroad

  12. Reasons for U.S. Expatriate Failure • Individual - Personality of the manager - Lack of technical proficiency - No motivation for assignment • Family - Spouse or family members fail to adapt - Family members or spouse do not want to be there

  13. Reasons for U.S. Expatriate Failure (cont.) • Cultural - Manager fails to adapt - Manager fails to develop relationship with key people

  14. Reasons for U.S. Expatriates Failure (cont.) • Organizational • Excessively difficult responsibilities • Failure to provide cultural training - Company fails to pick the right person • Company fails to provide the technical support • Excess of difficult responsibilities of international assignment • Failure of company to consider gender equity

  15. Strategic Role of Expatriate Assignments • Helps managers acquire international skills • Helps coordinate and control operations dispersed activities • Communication of local needs/strategic information to headquarters • In-depth knowledge of local markets • Provide important network knowledge

  16. International Cadre • International cadre (or Globals): Separate group of expatriate managers who specialize in a career of international assignments - Have permanent international assignments - Move from international assignments to international assignments - Recruited from any country - Sent to worldwide locations to develop cross-cultural skills

  17. Flexpatriates • The frequent flyers who travel on short notice for shorter time durations while maintaining their family and personal lives at the home-country location • Key functions - Sent to explore markets - Consider problem areas in the foreign subsidiary - Manage projects - Help with transfer of technology

  18. Flexpatriates • Advantages - Do not experience many of the family and personal difficulties and stress associated with expatriate assignments - Much less expensive than expatriate – no relocation or repatriation costs

  19. Flexpatriate • Disadvantages - Taxation issues can become complicated if the assignment exceeds six months – he company may end up paying the tax - Does not fully integrate into the local work environment and does not learn low to adapt locally - May be resented for neglecting the host-country culture

  20. Key Success Factors for Expatriate Assignments • Technical and managerial skills • Personality traits • Relational abilities • Family situation • International motivation • Stress tolerance • Language ability • Emotional intelligence

  21. Exhibit 11.2: Expatriate Success Factors and Selection Methods

  22. Priority of Success Factors • Assignment length - Technical and professionals skills are key for short assignments • Cultural similarity • Required interaction with local people • Job complexity and responsibility

  23. Exhibit 11.3: Selecting Expatriates: Priorities for Success Factors by Assignment Characteristics

  24. Training and Development • Cross-cultural training: increases the relational abilities of future expatriates and their spouses and families • Training rigor: extent of effort by both trainees and trainers required to prepare the trainees for expatriate positions

  25. Training and Development (cont.) • Low rigor training - Short time period - Lectures and videos on local cultures - Briefings on company operations • High rigor training - Last over a month - Experiential learning - Extensive language training - Includes interactions with host country nationals

  26. Exhibit 11.4: Training Rigor: Techniques and Objectives

  27. Exhibit 11.5: How the Rigor of Training Relates to the Basic Expatriate Assignment Conditions

  28. Expatriate Performance Appraisal • Conducting reliable performance appraisal for the expatriate is very challenging • Challenges • Fit of international operation in multinational strategy • Unreliable date • Complex and volatile environments • Time difference and distance separation • Local cultural situation

  29. Steps to Improve the Expatriate Performance Appraisal • Fit the evaluation criteria to strategy • Fine-tune the evaluation criteria • Use multiple sources of evaluation with varying periods of evaluation

  30. Exhibit 11.6: Evaluation Sources, Criteria, and Time Periods for Expatriate Performance Appraisals

  31. Expatriate Compensation • Compensation packages tend to include many common factors includes: - Local market cost of living - Housing - Taxes - Benefits

  32. Exhibit 11.7: Average Rent of Two-Bedroom, Unfurnished Apartments in Selected European Cities

  33. The Balance-Sheet Approach • Provides a compensation package that equates purchasing power • Allowances for cost of living, housing, food, recreation, personal care, clothing, education, home furnishing, transportation, and medical care

  34. Exhibit 11.8: Balance Sheet Approach To Expatriate Compensation

  35. Additional Allowances and Perquisites • Foreign service premiums • Hardship allowance • Relocation allowances • Home-leave allowances

  36. Expatriate Manager Compensation: Other Approaches • Headquarters-based compensation: paying home country wages regardless of location • Host-based compensation system: adjusting wages to local lifestyles and costs of living • Global pay systems: worldwide job evaluations, performance appraisal methods, and salary scales are used

  37. Repatriation Problem • Difficulties faced coming back home • Three basic cultural problems—“reverse culture shocks” - Adapt to new work environment and culture of home - Expatriates must relearn own national and organization culture - Need to adapt to basic living environment

  38. Strategies for Successful Repatriation • Provide a strategic purpose for the repatriation • Establish a team to aid the expatriate • Provide parent country information sources • Provide training and preparation for the return • Provide a home-leave policy to encourage expatriates to make regular visits to the home office • Provide support for the expatriate and family on return

  39. International Assignments for Women: Two Myths • Myth 1: Women do not wish to take international assignments. • Myth 2: Women will fail in international assignments because of the foreign culture’s prejudices against local women. • Successful women expatriates - Foreign not female—emphasize nationality not gender

  40. International Assignments for Women: Advantages • More visible • Strong in relational skills • Wider range of interaction options

  41. International Assignments for Women: Disadvantages • Face the glass ceiling - Isolation and loneliness - Constant proving of themselves, working harder than male • Need to balance work and family responsibilities • Need to worry about accompanying spouse

  42. More Women in the Future? • Women expatriate managers are expected to grow • Acute shortage of high-quality managers • Increasing number of women provide role models

  43. What Can Companies Do To Ensure Female Expatriate Success? • Provide mentors • Provide opportunities for interpersonal networks as a form of organizational support • Remove sources of barriers • Provide support to cope with dual-career issues

  44. Multinationals and Electronic Human Resource Management • Electronic human resources (e.HR): automation of various aspects of the human resources system of a company

  45. Strategic Benefits of e.HR Systems • Reduce HR and administrative system cost • Improve HR services to employees • Employees take control of their own data • Repository of the wealth of knowledge and skills of expatriates • Employee tracking for career management and other HR purposes

  46. Proper Steps to e.HR Implementation • Develop business case to justify using e.HR or upgrade to e.HR • Make the system customer-focused • Be proactive • Organize collected data in ways that is useful to the organization

  47. Multinational Strategy and IHRM • IHRM orientation: company’s basic tactics and philosophy for coordinating IHRM activities for managerial and technical workers

  48. Exhibit 11.9: IHRM Orientation and IHRM Practices for Managers and Technical Workers

  49. Exhibit 11.9: IHRM Orientation and IHRM Practices for Managers and Technical Workers

  50. Exhibit 11.9: IHRM Orientation and IHRM Practices for Managers and Technical Workers

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