Chapter 14
Human Resource Selection and Development
across Cultures
19-1
Objectives
• Describe the nature of human resource management in international
business
• Detail how firms recruit and select managers for international
assignments
• Explain how international businesses train and develop expatriate
managers
• Describe labor relations in international business
19-2
Objectives (continued)
• Discuss how international firms conduct performance appraisals and
determine compensation for their expatriate managers
• Analyze retention and turnover issues in international business
• Explain basic human resource issues involving nonmanagerial
employees
19-3
Human Resource Management
Human Resource Management is
the set of activities directed at attracting,
developing, and maintaining the effective
workforce necessary to achieve a
firm’s objectives.
19-4
Figure 19.1 The International Human Resource Management Process
HRM’s Strategic Content
Recruitment and Selection
Training and Development
Performance Appraisal
Compensation and Benefits
Labor Relations
Contribution to Organizational Effectiveness
19-5
International Staffing Needs
Managerial/Executive
Employees
Nonmanagerial
Employees
19-6
Scope of Internationalization
Export Department
International Division
Global Organization
19-7
Expertise Needs in Global Organizations
Product line
Functional skills
Individual country markets
Global strategy
19-8
Centralization versus
Decentralization of Control
• Centralized firms
• Favor home country managers
• Most common amongst international division
form
• Decentralized firms
• Favor host country managers
• Most common amongst multidomestic firms
19-9
Staffing Philosophy
Parent
Country Nationals
(PCNs)
Third Country
Nationals
(TCNs)
Host Country
Nationals
(HCNs)
19-10
Strategies for Staffing
• Ethnocentric staffing model
• Polycentric staffing model
• Geocentric staffing model
19-11
Figure 19.2 Necessary Skills and Abilities for
International Managers
Skills and Abilities
Necessary to Do
the Job
Skills and Abilities
Necessary to Work
in a Foreign Location
•Technical
•Functional
•Managerial
•Adaptability
•Location-specific skills
•Personal characteristics
Improved Chances of Succeeding in
an International Job Assignment
19-12
Recruitment of Managers
Younger
Managers
Experienced
Managers
19-13
Selecting expatriates is an important element in
international HRM.
19-14
Selection of Managers
Managerial competence
Appropriate training
Adaptability to new situations
19-15
Table 19.1 Questions from AT&T’s Questionnaire for
Screening Overseas Transferees 1
• Would your spouse be interrupting a career
to accompany you on an international
assignment? If so, how do you think this will
affect your spouse and your relationship
with each other?
• Do you enjoy the challenge of making your
own way in new situations?
• Securing a job upon reentry will be primarily
your responsibility. How do you feel about
networking and being your own advocate?
19-16
Table 19.1 Questions from AT&T’s Questionnaire for
Screening Overseas Transferees 2
• How important is it for you to spend
significant amounts of time with people of
your own ethnic, racial, religious, and national
background?
• As you look at your personal history, can you
isolate any episodes that indicate a real
interest in learning about other peoples and
cultures?
19-17
Table 19.1 Questions from AT&T’s Questionnaire for
Screening Overseas Transferees 3
• How able are you in initiating new social contacts?
• Can you imagine living without a television?
• Has it been your habit to vacation in foreign countries?
• Do you enjoy sampling foreign cuisine?
• What is your tolerance for waiting for repairs?
19-18
Culture Shock
Culture shock is a psychological phenomenon
that may lead to feelings of fear, helplessness,
irritability, and disorientation, which is
commonly experienced by new expatriates
who may experience a sense of loss regarding
their old cultural environment as well as
confusion, rejection, self-doubt, and
decreased self-esteem from working in a new
and unfamiliar cultural setting.
19-19
Figure 19.3 Phases in Acculturation
Honeymoon
Disillusionment
Adaptation
Biculturalism
19-20
Honeymoon Phase
• New culture seems exotic and stimulating
• Excitement of working in new environment makes employee
overestimate ease of adjusting
• Lasts for first few days or months
19-21
Disillusionment Phase
• Differences between new and old environments are blown out of
proportion
• Challenges of everyday living
• Many stay stuck in this phase
19-22
Adaptation Phase
• Employee begins to understand patterns of new culture
• Gains language competence
• Adjusts to everyday living
19-23
Biculturalism
• Anxiety has ended
• Employee gains confidence in ability to function productively in new
culture
• Repatriation may be difficult
19-24
Overseas Success
• Likelihood of managers being successful at
overseas assignment increases if the
managers:
• Can freely choose whether to accept or reject the
assignment
• Have been given a realistic preview of the job and
assignment
• Have been given a realistic expectation of what their
repatriation assignment will be
• Have a mentor back home who will guard their interests
and provide support
• See a clear link between the expatriate assignment and
their long-term career path
19-25
Overseas Success
The U.S. military makes sure that its
members have “reminders” from home on
foreign deployments
19-26
Training and Development
• Assessing training needs
• Basic training methods
• Standardized
• Customized
• Developing younger managers
19-27
Figure 19.4 Barriers to Entering
Foreign Markets
19-28
Performance Appraisal
Performance Appraisal
is the process of assessing
how effectively people are performing their
jobs.
19-29
Functions of Performance Appraisals
To provide feedback to individuals
about how well they are doing
To provide a basis for rewarding top performers
To identify areas in which additional
training and development may be needed
To identify problem areas
that may call for a change in assignment
19-30
Compensation Packages
Cost-of-living allowance
Hardship premium
Tax equalization system
19-31
Figure 19.5 Global
Cost of Living Survey 2008
19-32
Components of Compensation Packages
Tax Codes
Labor
Market Forces
Occupational
Status
Government
Regulations
Standards of
Living
Professional
Licensing
Requirements
19-33
Figure 19.6 An Expatriate Balance Sheet
Foreign and
Excess U.S. Taxes
Paid by Company
Foreign Service
Premium/ Hardship
Added by Company
Excess Foreign Costs
Paid by Company
U.S. Domestic Base Salary
Taxes
U.S. Hypothetical
Tax and
Social Security
Consumption
Savings
U.S. Spendable
Income
U.S. Hypothetical
Housing and Utilities
U.S. Auto Purchase
19-34
U.S. Levels
Labor Relations
Comparative Labor Relations
Collective Bargaining
Union Influence and Codetermination
19-35