Chapter 9 Steering Global Mobility

1. Chapter 9 Steering Global Mobility

2. Global Mobility at Schlumberger • People and technology are their two strategic drivers • Equal treatment of people regardless of passport or position • Employees expected to be “international mobile” • No guarantee of return home, but good incentive packages • Many high performers spend time in HR • They develop talent from anywhere in the world

3. Why Mobility Matters Moving employees across national boundaries: • Reinforces global integration • Advances localization • Enhances the quality of horizontal coordination • Builds global social architecture • Gets the right people in the right place • Develops the competencies of global leaders • Provides challenging growth jobs

4. Changing Composition of International Staff • Old stereotypes of “expatriate” staff are increasingly invalid • PCN– Parent country nationals • HCN– Host country nationals • TCN – Third-country nationals • Women make up 20-25% of expatriates • Hesitancy of company to choose women comes from: • Accommodating dual careers • Gender prejudice in the country in question • Misunderstanding of what contributes to success in an international assignment • Factors influencing TCN employment: • Scarcity of candidates in home country • Global talent management • Expatriate cost reduction (e.g. tax)

5. Female Expatriates • Three common assumptions about female expatriates • Women do not want to become international managers • Companies refuse to send women overseas • The prejudice of locals against women may render them ineffective What the research says? • No gender differences in willingness to work overseas • No difference in effectiveness • Still some resistance to selecting female expatriates • Factors helping women to be effective expatriates • Communication and relational skills • Relative visibility enhances local access • Experience with being an “outsider” helps to manage stress

6. Mobility Management Cycle

7. Selecting Expatriates • Characteristics of successful expatriates: • Relationship and communication abilities • Professional and technical competence • Cultural sensitivity and flexibility • Self-efficacy and tolerance for ambiguity • Family support • The relevance of each characteristic depends on the role • Enhancing the selection quality: • Should be more than an informal, “coffee machine” process • Enlarge the candidate pool past the home country • Later steps in the mobility cycle must be considered early

8. Assessment and Family • Many assessment tools are available, few are widely used • Interviews: • Most commonly used selection method • Should be used to help candidate get feedback and consider all factors • Orientation visits can eliminate costly issues and surprises • Family attitudes, children, and dual careers affect willingness to accept international assignments • Consider family situation, and involve spouse in decisions • Help dual-career families with career transitions and job finding

9. Preparing for the Assignment What kind of training? • Cross-cultural training that does not reinforce stereotypes • Visits, shadowing, books, videos, open dialogue, etc. • Training should be tailored to location origin, destination and family When should training take place? • Real-time coaching is best but expensive • Expatriates with host-country mentors adjust better to work and culture Is language competence essential? • Not always, but it helps develop connections • The effort to learn the language shows respect for the culture What about the family? • Attention and preparation for the spouse is crucial • Spouse often has more exposure to local culture and language

10. Adjusting to the Expatriate Role • Adjustment to work - Unclear job, conflict, little discretion • Lessened by global integration • Eased by overlap with outgoing jobholder • General adjustment - Housing, food, safety, education, health, etc. • Difficulty increases with cultural distance • Education and housing allowance and good preparation are helpful • Interaction adjustment - Behavior and communication differences • Good support network in host country can lessen frustration • Family adjustment is important to keep in mind • The individual’s attitude and willingness to adjust is most important

11. Stages in the Adjustment Process Honeymoon Culture shock: depression, anger, frustration – first step to learning Adjustment Mastery 0 3 6 9 12 15 18 Months Adjusting to the Expatriate Role Satisfaction & work performance

12. Expatriates whosee themselves asFREE AGENTS Expatriates wholeave theirHEARTS AT HOME Expatriates who“GO NATIVE” Expatriates whosee themselves asDUAL CITIZENS The Dual Allegiance of Expatriates Low Allegiance to local firm High Low High Allegiance to parent firm Source: Adapted from S. Black, H. Gregersen, and M. Mendenhall, Global Assignments: Successfully Expatriating and Repatriating International Managers, San Francisco: Jossey-Bass, 1992.

13. Appraising Performance and International Staff • What criteria and standards should be used? • Defining performance in relation to subsidiary’s environmental factors • Subjective and contextual performance criteria must be used • Is their focus short-term or long-term success of the subsidiary? • Who should conduct the performance evaluation? • Home country HR and executives can’t see expatriates at work • Evaluation is best done partly by headquarters, partly by local subsidiary • Does one system fit all? • Evaluation criteria should reflect the purpose of the assignment • Performance objectives should be differentiated to reflect the job

14. International Compensation • Cost of expatriation is of concern for many businesses • Compensation strategies have evolved from negotiation • Things to consider: • Cost efficiency • Delivering the intended benefits in the most cost-effective way • • Equity issues • Ensuring an equitable plan regardless of the location or nationality of the expat • • Ease of system maintenance • Ensuring the plan is relatively transparent and easy to administer

15. International Compensation Systems

16. Figure 92: Balance Sheet Approach to International Compensation Home- and assignment- locationincome taxes Income taxes Premiums and incentives Housing Income Income Housing taxes taxes Housing Housing Goods and services Goods and Goods and Goods and services services services Reserve Reserve Reserve Reserve Assignment- location cost Assignment- location costs paid by company and from salary Home-country equivalent purchasing power Home-country salary Additional costs paid by the organization Source: Adapted from C. Reynolds, Guide to Global Compensation and Benefits (San Diego: Harcourt, 2001). 9-16

17. Balance Sheet Approach

18. Alternatives to Balance Sheet Approach • Balance sheet relies on norms tailored to “average” expat • Expatriates are becoming increasingly less homogenous • Cafeteria approach • expats pick which benefits are most important to them • Lump-sum payments best for short-term assignments • Region-specific compensation creates “regional” and “global” differences

19. Trends and Challenges in International Compensation • Compensation should mirror needs of each expat category • What categories of international staff should the company have? • Should all categories of expatriates be paid using the same method? • Nonfinancial rewards can help motivate international moves • TCN payment has no single best formula • TCNs often do not return to their home country • Avoid compensation that treats TCNs as “cheap labor” • Keep in mind pay differences between expats and locals • Job content compensation eliminates most payment equity issues

20. Repatriation and Reentry • Advance planning to provide real opportunities upon reentry • Transition support and continuous mentoring • It is not realistic to expect that mobility guarantees promotion • Expats with good performance record AND visibility find better jobs upon return • Expats must build and keep good social capital with headquarters Caution: There is often no comparable job waiting for TCNs back home

21. HR Practices that Support Mobility

22. Tensions in the Mobility Cycle • Cost/Investment tension • Cost-driven strategy may lead to “boom-bust” cycles • Home/Host tensions • Some expatriates show lack of sensitivity to local context • Global/Local tensions • Expatriation may limit career opportunities for local managers • Short-term/Long-term tensions • Too much emphasis on short-term solutions • Demand/Supply tension • Increasing constraints on international mobility • Reflects family and career considerations

23. Evolution and Alternatives to Traditional International Mobility • Learning-driven assignments are increasing… but best learning comes from accountability for outcomes • Alternatives: • Increase in inpatriation • Increase in short-term assignments • Reduces cost and increases opportunities for learning • Replace expatriation with new approaches to international staffing

24. Inpatriation • Inpatriation to the head office socializes local managers • Most inpatriates assigned for learning purposes • Large variety of reasons behind inpatriate assignments • Important to provide “real” jobs • Standard compensation does not work; inpatriates are diverse • Cross-cultural training might be required for local employees • Local subsidiaries are not excited to send off their best • Candidate selection monitoring is important

25. Short-Term Assignments • Offer flexibility – simpler to plan and execute • Cost less • Eliminate repatriation challenge • Beneficial if there is reciprocity – talent swap • Two comparable employees swap jobs for less than a year • Language barriers • Danger of “corporate tourism”

26. Global Coordination Without Expatriates

27. Global Mobility – Mainstream and Less Secure Expatriates are no longer guaranteed a job upon return Two conflicting signals are being sent: • International experience is an asset and often a necessity • International mobility can carry risks for future career • Perception of insecurity can lead to skepticism Not everyone is ready for a boundaryless career • Diverse group of senior executives with international experience sets the best example