77 43515 EA311 2012 1 2 1 Dessler HRM12e PPT 17

Chapter 17

Managing Global Human Resources

PowerPoint Presentation by Charlie Cook

The University of West Alabama

Part Five | Employee RelationsCopyright © 2011 Pearson

Education, Inc. publishing as Prentice Hall

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 17–2

WHERE WE ARE NOW…


1.1. List the HR challenges of international List the HR challenges of international business.business.

2.2. Illustrate with examples how intercountry Illustrate with examples how intercountry differences affect HRM.differences affect HRM.

3.3. List and briefly describe the main List and briefly describe the main methods for staffing global methods for staffing global organizations.organizations.

4.4. Discuss some important issues to keep in Discuss some important issues to keep in mind in training, appraising, and mind in training, appraising, and compensating international employees.compensating international employees.

5.5. Explain with examples how to implement a Explain with examples how to implement a global human resource management program.global human resource management program.

LEARNING OUTCOMESLEARNING OUTCOMES


HR and the Internationalization HR and the Internationalization of Businessof Business•The Global ChallengesThe Global Challenges

Coordinating market, product, Coordinating market, product, and production plans on a and production plans on a worldwide basisworldwide basis

Creating organization Creating organization structures capable of balancing structures capable of balancing centralized home-office control centralized home-office control with adequate local autonomywith adequate local autonomy

Extending HR policies and Extending HR policies and systems systems to service staffing needs to service staffing needs abroadabroad


Challenges of International HRMChallenges of International HRM•DeploymentDeployment

Getting the right skills to where they are Getting the right skills to where they are needed, regardless of geographic locationneeded, regardless of geographic location

•Knowledge and Innovation DisseminationKnowledge and Innovation Dissemination Spreading state-of-the-art knowledge and Spreading state-of-the-art knowledge and practices throughout the organization practices throughout the organization regardless regardless of their originof their origin

•Identifying and Developing Talent Identifying and Developing Talent on a Global Basis on a Global Basis Identifying those who can function Identifying those who can function effectively in a global organization and effectively in a global organization and developing their abilitiesdeveloping their abilities


Intercountry Differences Intercountry Differences Affecting HRMAffecting HRM

International Human Resource Management

Labor relations

Political/Legal systems

Economicsystems

Cultural factors and ethics issues


Global Differences and Global Differences and SimilaritiesSimilarities

in HR Practicesin HR Practices

International

HRM

Training and development practices

Use of pay and other

incentives

Purpose of performance appraisal

Personnel selection procedures


Staffing the Global OrganizationStaffing the Global Organization•International staffing: Home or local?International staffing: Home or local?

Expatriates (expats)Expatriates (expats) Home-country nationalsHome-country nationals Third-country nationalsThird-country nationals

•OffshoringOffshoring Having local employees abroad do jobs that the Having local employees abroad do jobs that the firm’s domestic employees previously did in-firm’s domestic employees previously did in-househouse

•Offshoring IssuesOffshoring Issues Effective local supervisory/management Effective local supervisory/management structurestructure

Screening and required training for localsScreening and required training for locals Local compensation policies and working Local compensation policies and working conditionsconditions


Management Values and Management Values and International Staffing PolicyInternational Staffing Policy

Ethnocentric Geocentric

Top Management Values

Polycentric


Selecting Expatriate ManagersSelecting Expatriate Managers•Adaptability ScreeningAdaptability Screening

Assessing the assignee’s (and spouse’s) Assessing the assignee’s (and spouse’s) probable success in handling the foreign probable success in handling the foreign transfer.transfer.

Overseas Assignment InventoryOverseas Assignment Inventory A test that identifies the characteristics A test that identifies the characteristics and attitudes international assignment and attitudes international assignment candidates should have.candidates should have.

•Realistic Previews Realistic Previews Cover problems to expect in the new job, as Cover problems to expect in the new job, as well as the cultural benefits, problems, and well as the cultural benefits, problems, and idiosyncrasies idiosyncrasies of the country.of the country.


FIGURE 17–2 Five Factors Important in International Assignee Success and Their Components

I. Job Knowledge and MotivationManagerial abilityOrganizational abilityImaginationCreativityAdministrative skillsAlertnessResponsibilityIndustriousnessInitiative and energyHigh motivationFranknessBelief in mission and jobPerseverance

II. Relational SkillsRespectCourtesyDisplay of respectKindnessEmpathyNonjudgmentalIntegrityConfidence

III. Flexibility/AdaptabilityResourcefulnessAbility to deal with stressFlexibilityEmotional stabilityWillingness to changeTolerance for ambiguityAdaptabilityIndependenceDependabilityPolitical sensitivityPositive self-image

IV. Extracultural OpennessVariety of outside interestsInterest in foreign culturesOpennessKnowledge of local language(s)Outgoingness and extraversionOverseas experience

V. Family SituationAdaptability of spouse and familySpouse’s positive opinionWillingness of spouse to live abroadStable marriage


FIGURE 17–3Overseas AssignmentInventory


Inability of spouse

to adjustInability to

cope with overseas responsibiliti

esLack of cultural skills

Why Expatriate Assignments

Fail

Personality of expatriate

Personalintentions

Family pressures


Making Expatriate Assignments Making Expatriate Assignments SuccessfulSuccessful

Realistic previews

Careful screening

Cultural and language training

Improved benefits package

Improved orientation

Helping Expatriate Assignments Succeed


Orienting and Training Employees Orienting and Training Employees on International Assignmenton International Assignment•Predeparture training is needed on:Predeparture training is needed on:

The impact of cultural differences on The impact of cultural differences on business outcomesbusiness outcomes

How attitudes (both negative and How attitudes (both negative and positive) positive) are formed and how they influence are formed and how they influence behaviorbehavior

Factual knowledge about the target Factual knowledge about the target countrycountry

Language and adjustment and adaptation Language and adjustment and adaptation skillsskills


Trends in Expatriate TrainingTrends in Expatriate Training• Use of returning managers as resources to Use of returning managers as resources to cultivate cultivate the “global mind-sets” of their home-office the “global mind-sets” of their home-office staff.staff.

• Use of software and the Internet for cross-Use of software and the Internet for cross-cultural training.cultural training.

• Rotating assignments that permit professional Rotating assignments that permit professional growth.growth.

• Management development centers where executives Management development centers where executives hone their overseas skills.hone their overseas skills.

• Classroom programs provide overseas executives Classroom programs provide overseas executives with educational opportunities similar to with educational opportunities similar to stateside programs.stateside programs.

• Continuing, in-country cross-cultural training.Continuing, in-country cross-cultural training.


Compensating ExpatriatesCompensating Expatriates•The “Balance Sheet Approach”The “Balance Sheet Approach”

Home-country groups of expenses—income Home-country groups of expenses—income taxes, housing, goods and services, and taxes, housing, goods and services, and discretionary expenses—are the focus of discretionary expenses—are the focus of attention.attention.

The employer estimates what each of these The employer estimates what each of these four expenses is in the expatriate’s home four expenses is in the expatriate’s home country, country, and what each will be in the host country.and what each will be in the host country.

The employer then pays any differences The employer then pays any differences such such as additional income taxes or housing as additional income taxes or housing expenses.expenses.


TABLE 17–1 The Balance Sheet Approach (Assumes U.S. Base Salary of $80,000)

Annual Expense Chicago, U.S.

Brussels, Belgium

(US$ Equivalent) Allowance

Housing & utilities $35,000 $67,600 $32,600

Goods & services

6,000 9,500

3,500

Taxes 22,400

56,000

33,600

Discretionary income

10,000

10,000 0

Total $73,400 $143,100 $69,700


Incentives for International Incentives for International AssignmentsAssignments•Foreign Service PremiumsForeign Service Premiums

Financial payments over and above Financial payments over and above regular base pay, and typically range regular base pay, and typically range between 10% and 30% of base paybetween 10% and 30% of base pay

•Hardship AllowancesHardship Allowances Payments to compensate expatriates Payments to compensate expatriates for exceptionally hard living and for exceptionally hard living and working conditions at certain foreign working conditions at certain foreign locationslocations

•Mobility PremiumsMobility Premiums Lump-sum payments to reward employees Lump-sum payments to reward employees for moving from one assignment to for moving from one assignment to anotheranother


1

2

3

4

5

Steps in Establishing a Global Pay System

Identify any gaps in existing rewards systems.

Develop a global compensation philosophy framework.

Systematize pay systems worldwide.Adapt global pay policies to local conditions.Conduct an ongoing pay policies program assessment.


Appraising Expatriate ManagersAppraising Expatriate Managers•ChallengesChallenges

Determining who should appraise the manager.Determining who should appraise the manager. Deciding on which factors to base the appraisal.Deciding on which factors to base the appraisal.

•Improving the Expatriate Appraisal ProcessImproving the Expatriate Appraisal Process1.1.Stipulate the assignment’s difficulty level, and Stipulate the assignment’s difficulty level, and adapt the performance criteria to the situation.adapt the performance criteria to the situation.

2.2.Weigh evaluation more toward on-site manager’s Weigh evaluation more toward on-site manager’s appraisal than toward that of the home-site appraisal than toward that of the home-site manager.manager.

3.3.If home-office manager does appraisal, use a If home-office manager does appraisal, use a former expatriate from same overseas location for former expatriate from same overseas location for advice.advice.


International Labor RelationsInternational Labor Relations

Industry-wide

centralization

Content and scope of

bargaining

Employer organizatio

n

Multiple union

recognition

Characteristics of European Labor

Relations


Terrorism, Safety, and Global HRTerrorism, Safety, and Global HR•Taking Protective MeasuresTaking Protective Measures

Crisis management teamsCrisis management teams Intelligence servicesIntelligence services

•Kidnapping and Ransom (K&R) Insurance Kidnapping and Ransom (K&R) Insurance Crisis situationsCrisis situations

Kidnapping: employee is a hostage Kidnapping: employee is a hostage until employer pays a ransomuntil employer pays a ransom

Extortion: threatening bodily harmExtortion: threatening bodily harm Detention: holding employee without Detention: holding employee without any ransom demandany ransom demand

Threats to property or products unless Threats to property or products unless employer makes a paymentemployer makes a payment


Repatriation: Problems and Repatriation: Problems and SolutionsSolutions•ProblemProblem

Making sure that the expatriate and his or her Making sure that the expatriate and his or her family don’t feel that the company has left family don’t feel that the company has left them adrift.them adrift.

•SolutionsSolutions Match the expat and his or her family with Match the expat and his or her family with a psychologist trained in repatriation issues.a psychologist trained in repatriation issues.

Make sure the expat always feels “in the loop” Make sure the expat always feels “in the loop”

with what’s happening back at the home office.with what’s happening back at the home office. Provide formal repatriation services when Provide formal repatriation services when the expat returns home.the expat returns home.


How to Implement a Global HR How to Implement a Global HR SystemSystem• Best practices in developing Best practices in developing

worldwide human resource worldwide human resource policies and practices:policies and practices: Form global HR networks that make Form global HR networks that make local HR managers a part of global local HR managers a part of global teams.teams.

Remember that it’s more important to Remember that it’s more important to standardize ends and competencies standardize ends and competencies than specific methods.than specific methods.


Making the Global HR System Making the Global HR System More AcceptableMore Acceptable• Best practices for making a global HR system Best practices for making a global HR system more acceptable to local managers:more acceptable to local managers: Remember that global systems are more accepted in Remember that global systems are more accepted in truly global organizations.truly global organizations.

Investigate pressures to differentiate and determine Investigate pressures to differentiate and determine

their legitimacy.their legitimacy. Try to work within the context of a strong corporate Try to work within the context of a strong corporate culture.culture.

• Implementing the global HR system:Implementing the global HR system: Constant contact: “You can’t communicate enough.”Constant contact: “You can’t communicate enough.” Dedicate adequate resources for a global HR effort.Dedicate adequate resources for a global HR effort.


TABLE 17–2 Summary of Best Global HR Practices

• Work within existing local systems—integrate global tools into local systems

• Create a strong corporate culture• Create a global network for

system development— global input is critical

• Treat local people as equal partners in system development

• Assess common elements across geographies

• Focus on what to measure and allow flexibility in how to measure

• Allow for local additions beyond core elements

• Differentiate when necessary• Train local people to make good

decisions about which tools to use and how to do so

• Communicate, communicate, communicate!

• Dedicate resources for global HR efforts

• Know, or have access to someone who knows, the legal requirements in each country

Do . . .

• Try to do everything the same way everywhere

• Yield to every claim that “we’re different”—make them prove it

• Force a global system on local people

• Use local people just for implementation

• Use the same tools globally, unless you can show that they really work and are culturally appropriate

• Ignore cultural differences• Let technology drive your

system design—you can’t assume every location has the same level of technology investment and access

• Assume that “if we build it they will come”—you need to market your tools or system and put change management strategies in place

Don’t . . .


K E Y T E R M Scodeterminationexpatriates (expats)home-country nationalsthird-country nationalsethnocentricpolycentricgeocentricadaptability screeningforeign servicepremiumshardship allowancesmobility premiums


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77 43515 EA311 2012 1 2 1 Dessler HRM12e PPT 17

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