Global Human
Resource Management
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• Sit in groups after the break
• If there are less than 3 people from your group present, let’s
merge groups
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Reminder: Optional assignment
• A small but not trivial part of the grade for this
class is class participation
• As discussed on the first day of class, students
have the option of writing a self-evaluation of
their class participation.
- I may underestimate students who participate
well, but rarely
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• I am partly evaluating how engaged you are in class
• In the self-evaluation,
- summarize when you participated or communicated
with the professor outside class (if you have)
• You may also discuss
- how you prepare for class
- what you did in group work
- discuss the quality of your participation/ preparation
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• Self-evaluations should not exceed one page
• If you did not participate, simply writing that you
“prepared for class” will not give you credit.
- But attaching materials (e.g., samples of notes you
prepared before class) may
• Self-evaluations are due by the last day of class
- Do not bring a self-evaluation on final exam day –
• I may do class participation grades before the final
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Should you write a self-evaluation?
• It’s probably not necessary if I’ve been calling on you
at least once a week
• Do write a self-evaluation if
- I’ve only called on you 2 or 3 times
- You’ve prepared and raised your hand and
I have not called on you
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Human Resource Management
(HRM)
• Refers to the activities an organization carries out to
use its human resources effectively
• Four major tasks of HRM
- Staffing policy – who will we hire?
- Management training and development
- Performance appraisal – How well is each individual
doing?
- Compensation policy – How much do we pay each
person?
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International Human Resource
Management
• Strategic role: HRM policies should be congruent
with the firm’s strategy
- Global standardization – global experts on efficiency
- Localization – need to understand radically different
cultures
• But even a company committed to global
standardization will have to find culturally sensitive
people
• Task complicated by profound differences among
labor markets, legal, and economic systems
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Local employees usually can’t
do everything a global firm needs
• They may have great technical skills
• They have great human relations skills within their
own cultures
• But they don’t initially understand the systems of a
foreign firm
• Corporate culture and institutions of the foreign firm
maybe based on the culture of the home country.
- And the problem may be hard for foreign managers to see
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International business requires people
to work outside their cultures
• Expatriate: citizens of one country working in
another
• Inpatriates: expatriates who are citizens of a foreign country
working in the home country of their multinational employer
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Expatriates and
Cost-of-Living Indexes
• Higher pay for assignments abroad
• Most global companies increase compensation when
foreign cost is higher
• They do NOT decrease compensation when foreign
cost is lower
• They remove the differential when the manager is
repatriated
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The Expatriate Problem
• Not all good managers make good expatriates
- And some who are good contributors hate expatriate life
(or have spouses who hate it)
• Expatriate failure: premature return of the expatriate
manager to his/her home country
• Cost of failure is high: estimate = 3X the expatriate’s
annual salary plus the cost of relocation
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Reasons for Expatriate
Failure
• US multinationals
-
Inability of spouse to adjust
Manager’s inability to adjust
Other family problems
Manager’s personal or
emotional immaturity
- Inability to cope with larger
overseas responsibilities
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• Japanese Firms
- Inability to cope with larger
overseas responsibilities
- Difficulties with the new
environment
- Personal or emotional
problems
- Lack of technical
competence
- Inability of spouse to adjust
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Expatriate Selection
• Reduce expatriate failure rates by improving selection
procedures
- An executive’s domestic performance does not
(necessarily) equate to overseas performance potential
• Employees need to be selected not solely on technical
expertise, but also on cross-cultural fluency
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Headquarters Managers
• Deal at top levels in many countries
- Some have broad duties
- Some are technical specialists
• Experience the rigors of foreign travel
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Repatriation of Expatriates
• A critical issue in the development of expatriate
managers is preparing for reentry to home countries
- Research shows that there are serious problems with
the repatriation process
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Staffing With Locals
• Locals usually cost less than do expatriates
• They understand local:
-
Language
Management styles
Labor policies and practices
Localized operations
May be legally required in some cases
• But they don’t understand the foreign company’s systems
- Often they have more trouble with the foreign company’s
systems than natives of the home country
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An option: Locally hired
expatriates
• Much cheaper than expatriates
• Understand the local culture and your
home country culture
• But they don’t understand your business system
- They may think your system is crazy
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• Material below here is optional
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Guidelines for Performance
Appraisal
• More weight should be given to on-site manager’s
evaluation as they are able to recognize the soft
variables
• Expatriate who worked in same location should assist
home-office manager with evaluation
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Expatriate Pay
• Typically use balance sheet approach
- Equalizes purchasing power to maintain same standard of
living across countries
- Provides financial incentives to offset qualitative
differences between assignment locations
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International Labor
Relations
• Key Issue
- Degree to which organized labor can limit the choices of an
international business
• Aims to foster harmony and minimize conflicts
between firms and organized labor
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Concerns of Organized
Labor
• Multinational can counter union bargaining power
with threats to move production to another country
• Multinational will keep highly skilled tasks in its
home country and farm out only low-skilled tasks to
foreign plants
- Easy to switch locations if economic conditions warrant
- Bargaining power of organized labor is reduced
• Attempts to import employment practices and
contractual agreements from multinational’s home
country
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