PART FIVE
EMPLOYEE RELATIONS
C H A P T E R
S e v e n t e e n
17
Managing Global
Human Resources
Lecture Outline
Strategic Overview
HR and the Internationalization of Business
The HR Challenges of International Business
How Inter-country Differences Affect HRM
Global Differences and Similarities in HR Practice
Personnel Selection Procedures
The Purpose of the Performance Appraisal
Training and Development Practices
The Use of Pay Incentives
How to Implement a Global HR System
Making the Global HR System More Acceptable
Developing a More Effective Global HR System
Implementing the Global HR System
Staffing the Global Organization
International Staffing: Home or Local?
Offshoring
Values and International Staffing Policy
Why Expatriate Assignments Fail
Selecting Expatriate Managers
Training and Maintaining Expatriate Employees
Orienting and Training Employees on
International Assignments
Compensating Expatriates
Appraising Expatriate Managers
International Labor Relations
Terrorism, Safety and Global HR
Repatriation: Problems and Solutions
A Final Word: Auditing the HR Function
In Brief: This chapter outlines some
of the HR problems and issues
involved
with
international
businesses. The subjects covered
include inter-country differences,
using
selection
to
improve
international
assignments,
and
training and maintaining international
employees.
Interesting Issues: Many companies
desire to rotate managers through
international assignments, but find
that work visa requirements of the
host countries (including the U.S.)
can sometimes greatly hinder these
efforts.
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ANNOTATED OUTLINE
I.
HR and The Internationalization of Business
International Business and Its Impact on Managing – Due to the European Market
unification, the introduction of the euro currency, the opening of Eastern Europe, and
the rapid development of demand in Asia and other areas of the world, large and
small firms are finding their success depends on their ability to market and manage
overseas.
A. The HR Challenges of International Business – deployment, knowledge and
innovation dissemination, and identifying and developing talent on a global basis.
Complicating these decisions are the cultural, political, legal, and economic
differences among countries and their peoples.
B. How Inter-country Differences Affect HRM – A company operating multiple units
abroad does not have the luxury of dealing with a relatively limited set of
economic, cultural, and legal variables.
1. Cultural Factors – Countries differ widely in their cultures, which are the basic
values to which their citizens adhere. Cultural differences from country to
country necessitate corresponding differences in management practices
among a company’s subsidiaries.
2. Economic Systems – Differences in economic systems translate into
differences in HR practices. Differences in labor costs are substantial.
3. Legal and Industrial Relations Factors – vary dramatically from country to
country. In many European countries, work councils replace the informal or
union based worker-management mediations typical in U.S. firms. In
Germany and several other countries, codetermination is the rule where
employees have the legal right to a voice in setting company policies.
4. The European Community – refers to the unification of separate European
countries in the 1990s into a common market for goods, services, capital,
and labor.
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II.
NOTES
Educational Materials to Use
Global Differences and Similarities in HR Practices
A. Personnel Selection Procedures – Employers around the world tend to use
similar criteria and methods for selecting employees. As in the United States,
employers around the world usually rank “personal interviews,” “the person’s
ability to perform the technical requirements of the job,” and “proven work
experiences in a similar job” at or near the top of the criteria or methods they use.
B. The Purpose of the Performance Appraisal – There tends to be more variation in
how employers in different countries use the results of performance appraisals.
To recognize subordinate” was a main purpose for appraisals in Japan and
Mexico.
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C. Training and Development Practices – there are usually more similarities than
differences across countries. In particular, employers just about everywhere rank
“to improve technical abilities” as the main purpose for providing employees with
training. The amount of training firms provide does vary substantially from
country to country.
When You’re on Your Own, HR for Line Managers and
Entrepreneurs:
Comparing Small Businesses, HR
Practices in the United States and China – Researchers
have identified many differences between HR for small
businesses in China from those in the United States.
Differences are significant in the areas of: job analysis,
performance appraisal practices, and actual pay practices.
D. The Use of Pay Incentives – there are great variations in the use of incentive
pay. Some communist countries actually use more incentive pay than the U.S.
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III.
NOTES
Educational Materials to Use
How To Implement a Global HR System
A. Making the Global HR System More Acceptable
1. Remember global systems are more accepted in truly global organizations.
2. Investigate pressures to differentiate and determine their legitimacy.
3. Try to work within the context of a strong corporate culture.
B. Developing a More Effective Global HR System
1. Form global HR networks.
2. Remember that it’s more important to standardize ends and competencies
than specific methods.
C. Implementing the Global HR System
1. Remember, “You can’t communicate enough.”
2. Dedicate adequate resources for the global HR effort.
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NOTES
Educational Materials to Use
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IV.
Staffing the Global Organization
A. International Staffing: Home or Local? – Multinational companies (MNCs)
employ several types of international managers. Locals are citizens of the
countries where they are working. Expatriates (“expats”) are non-citizens of the
countries in which they are working. Home-country nationals are citizens of the
country in which the multinational company has its headquarters. Third-country
nationals are citizens of a country other than the parent or the host country.
B. Offshoring – having local employees abroad do jobs that the firm’s domestic
employees previously did in-house—is growing by leaps and bounds. Offshoring
jobs is very controversial. In the 1980s and 1990s, it was mostly manufacturing
jobs that employers shipped overseas.
C. Values and International Staffing Policy – Ethnocentric run firms would staff
foreign subsidiaries with parent-country nationals because they believe that
home country attitudes, management styles, and knowledge are superior to the
host country. Polycentric run firms would staff foreign subsidiaries with hostcountry nationals because they are the only ones that can really understand the
culture and the behavior of the host country market. Geocentric run firms would
staff foreign subsidiaries with the best people for key jobs regardless of
nationality because they believe that the best manager for any specific position
anywhere on the globe may be in any of the countries in which the firm operates.
D. Why Expatriate Assignments Fail – International assignments fail for various
reasons including: personality, the person’s intentions, and non-work factors.
E. Selecting Expatriate Managers – is similar to selecting domestic managers, but
you need to determine if managers for international assignments can cope
internationally.
1. Adaptability screening, often conducted by a psychologist or psychiatrist, is
aimed at assessing the assignee’s and family’s probable success in handling
the foreign transfer.
The New Workplace: Sending Women Managers Abroad – Many
managers assume that women don’t want to work abroad. In fact,
this survey found, women do want international assignments.
Employers tend to assume that women posted abroad are more
likely to become crime victims. However, most of the surveyed
women expats said that safety was no more an issue with women
than it was with men. Fear of cultural prejudices against women is
another common issue. Here, there’s no doubt that in some cultures
women have to follow different rules than do their male counterparts.
But even here, as one expat said, “even in the more harsh cultures,
once they recognize that the women can do the job, once your
competence has been demonstrated, it becomes less of a problem.”
NOTES
Educational Materials to Use
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V.
Training and Maintaining Expatriate Employees
A. Orienting and Training Employees for International Assignments – Some claim
there is generally little or no systematic selection and training for assignments
overseas. A four-step approach is recommended: 1) focus on the impact of
cultural differences, and on raising trainees’ awareness of such differences and
their impact on business outcomes; 2) get participants to understand how
attitudes (positive and negative) are formed and how they influence behavior; 3)
provide factual knowledge about the target country; and 4) provide skill building
in areas like language, adjustment and adaptation skills.
1. Trends in Expatriate Training – more firms are providing continuing, incountry cross-cultural training during the early stages of a person’s overseas
assignment; employers are returning managers as resources to cultivate the
“global mindsets” of the rest of their home office staff; there is increased use
of software and the Internet for cross-cultural training.
B. Compensating Expatriates – presents some tricky problems due to the question of
whether or not to maintain companywide pay scales and policies
1. The Balance Sheet Approach, the common approach to expatriate pay,
refers to equalizing purchasing power across countries.
2. Incentives – Many firms offer overseas managers long-term incentives that
are tied more closely to performance at the foreign subsidiary level.
C. Appraising Expatriate Managers – can be improved by:
1. Stipulating the assignment’s level;
2. Weighing the evaluation more toward the on-site manager’s appraisal than
toward the home-site manager’s distant perceptions of the employee’s
performance.
3. Modifying the normal performance criteria used for that particular position to
fit the overseas position. These differences can be in many different areas.
Know Your Employment Law: The Equal Employment Opportunity
Responsibilities of Multinational Employers – U.S. employers doing
business abroad, or foreign firms doing business in the United States
or its territories, have wide-ranging responsibilities to their
employees under American equal employment opportunity laws,
including Title VII, the ADEA, and the ADA.
D. Terrorism, Safety, and Global HR
1. Taking Protective Measures
2. Kidnapping and Ransom (K&R) Insurance – The insurance itself typically
covers several costs associated with kidnappings, abductions, or extortion
attempts. These costs might include, for instance, hiring a crisis team, the
actual cost of the ransom payment to the kidnappers or extortionists,
ensuring the ransom money in case it’s lost in transit, legal expenses, and
employee death or dismemberment.
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E. Repatriation: Problems and Solutions – Some common repatriation problems
are: they often fear that out of sight is out of mind; returning expatriates are
assigned to mediocre or makeshift jobs; returnees are taken aback when the
trappings of the overseas job are lost upon return; the expatriate’s former
colleagues have been promoted while he/she was gone; and the expatriate’s
family may go through culture shock. Some possible solutions are: written
repatriation agreements; assign a sponsor; provide career counseling; keep
communications open; and develop reorientation programs.
Improving Productivity Through HRIS: Taking the HRIS Global –
As a company grows relying on manual HR systems to manage
activities like worldwide safety, benefits administration, payroll, and
succession planning becomes unwieldy. For global firms, it makes
particular sense to expand the firm’s human resource information
systems abroad.
F.
A Final Word: Auditing the HR Function requires using accounting and
statistical techniques to calculate the cost of human resources. The HR
Review should be aimed at tapping top managers’ opinions regarding the HR
function’s effectiveness by assessing what should be, and what is. “What
should be” refers to HR’s broad aim, which involves a broad philosophy and
vision statement, and a focused mission statement. “What is” should
address the following questions. What are the HR functions? How important
are these functions? How well is each of the functions performed? What
needs improvement? How effectively does the corporate HR function use
resources? How can HR become most effective?
The HR Scorecard, Strategy and Results: Managing Global
Human Resources – Lisa takes steps to make the Hotel Paris’ HR
functions global in nature. This includes expatriate manager training,
integrated HRIS that allows top management to monitor HR
performance on an ongoing basis, and a new incentive system for
local managers.
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