GLOBAL RECRUITMENT AND SELECTION
Chapter 3
GLOBAL RECRUITMENT AND SELECTION
Objectives
At the end of the chapter, you should be able to understand:
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The context of recruiting internationally
The approaches organizations follow to recruit internationally
The advantages and disadvantages of different approaches to recruit
internationally
Traditional and current recruitment methods
Current selection methods and trends
Technology as a major support for recruitment and selection
Challenges of recruiting internationally
Best practices in international recruitment
Structure:
3.1
3.2
3.3
3.4
3.5
3.6
3.4
3.5
The Context of Sourcing Internationally
Approaches to Recruitment
Recruitment Methods
Selection Methods
Challenges and Trends in International Recruitment and Selection
Best Practices in International Recruitment and Selection
Summary
Self Assessment Questions
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While HR professionals strongly agree that finding the right talent is the
stepping stone for organizations to succeed, many line managers may not
give recruitment its due credit. And when an organization is spread beyond
one’s home country, finding the right person becomes even more
important. This is because every employee at all times is representing his
organization’s brand. His behaviour, skills, manners, communication style –
everything represents the organization. When someone has an experience
with an “employee”, he may or may not remember the employee’s name
but will definitely remember his organization’s name. In this context then
recruitment becomes a process of high importance. And how important is
this process when we run an international organization? Here’s a glimpse at
why international recruitment practices are central to any international
organization and its senior people.
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U.S. Overseas Hiring Probe Has Wide Net
Scrutiny Goes Beyond Probe Disclosed by J.P. Morgan
By
ROBIN SIDEL and CYNTHIA KOONS
Aug, 2013
Source: online.wsj.com
U.S. authorities are questioning numerous banks and hedge funds on
their international hiring practices for interns and other employees,
according to people with knowledge of the situation.
The Justice Department and Securities and Exchange Commission are
seeking information to determine if there have been any violations of
the U.S. Foreign Corrupt Practices Act, which forbids companies from
giving money or other items of value to foreign officials to land
business.
The probes are focusing on the hiring of relatives of well-connected
foreign officials with the intent of winning business, the people said.
The scrutiny goes beyond a probe disclosed by J.P. Morgan Chase & Co.
earlier this month. The bank hasn't been accused of wrongdoing. A
spokeswoman said it is cooperating with investigators.
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The Justice Department and SEC are examining whether J.P. Morgan
hired the children of Chinese officials in order to win deals for initial
public offerings in China, according to people familiar with the probe.
The U.S. attorney's office for the Eastern District of New York in
Brooklyn is involved in the Justice Department investigation, according
to a person familiar with the J.P. Morgan situation. Representatives of
the SEC and Justice Department declined to comment.
Beyond J.P. Morgan, the specific companies coming under scrutiny
couldn't be determined, but people familiar with the probes believe the
inquiries extend geographically to hiring practices in countries other
than China. As with J.P. Morgan, receiving inquiries from the agencies
doesn't mean the companies have done anything wrong.
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U.S. regulators long have kept a close eye on the international hiring
practices of energy companies and pharmaceutical firms, but the focus
on the financial-services industry is relatively recent. The SEC
established a special unit to focus on the law in 2010.
"The government is looking for a test case on this" in financial services,
said one corporate lawyer, who said that many of his clients have
received questions on the subject from both agencies.
"We are certainly seeing similar inquiries where there is a focus on hiring
practices under the FCPA," said another lawyer who specializes in the
anticorruption area.
The Foreign Corrupt Practices Act applies to all U.S. companies operating
on foreign soil. The SEC has taken enforcement actions against four
companies this year for paying bribes or making other improper
payments, according to its website. None of the firms operate in the
financial-services sector.
Although U.S. regulators have been ramping up their focus on hiring
practices, such cases can be difficult to prove, say lawyers who
specialize in the area. That is partly because prosecutors must show that
a company made a job offer with "corrupt intent," meaning the bank
had the expectation of asking a government official to do something that
is out of the bounds of normal behaviour.
A company can still be accused of violating the law even if the
anticipated action, such as a promise of new business, doesn't occur,
lawyers said.
"The government has to show that a company hired this person with the
express intent that the purpose of the hiring was to improperly influence
a government official," said Asheesh Goel, a lawyer at Ropes & Gray LLP
in Chicago who advises banks and hedge funds on the issue.
He said prosecutors typically focus on questions such as a job
candidate's qualifications or whether he or she got paid more than
normal.
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The SEC also assesses whether a company has the proper internal
controls in place. J.P. Morgan recently had been bulking up in that area,
said one person familiar with the bank's procedures. It has assembled a
task force to investigate its employment practices in Asia, said another
person familiar with the matter.
Still, financial institutions and other companies typically don't pay much
attention to the hiring of interns when they focus on complying with the
antibribery law, according to lawyers who advise the firms. Those hiring
decisions are usually made at a local level and don't flow back to
corporate headquarters.
"Ethics and compliance programs don't talk about hiring practices of
internships as part of something to look for," said Scott Moritz, who
specializes in anticorruption issues at Protiviti Inc., a consulting firm.
The hiring of the children of Chinese officials, known as "princelings," was
widespread during the IPO boom years in Hong Kong.
Bankers involved in some of the big deals said that the new employees
could help the bank negotiate the Chinese bureaucracy and regulatory
agencies.
"You hire these princelings into your bank, you get the access to some
political capital," said Tianyu Zhang, a professor at Chinese University of
Hong Kong's Business School. "If you have a political connection, it's
easier to push your clients through this IPO application process.”
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Mr. Zhang co-wrote a paper on the influence of political ties on decisions
around IPOs that is currently under review for publication at an academic
journal.
The article above was big news in 2013 and as does all news, this too died
down and was forgotten in no time. Until recently, in 2014, this news
flashed across.
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Goldman Sachs probed on International Hiring Practices
May 2014
Source: www.businessspectator.com.au
Goldman Sachs says regulators have initiated probes into its international
hiring practices and its high-speed trading operations.
Goldman said the hiring probe was tied to the bank's compliance with the
US Foreign Corrupt Practices Act, which bars firms from bribing foreign
officials.
The disclosure, contained in a quarterly securities filing, is the latest
indication regulators have expanded their investigation of whether J.P.
Morgan Chase and other big banks employed the sons and daughters of
prominent foreign officials to win business in China and elsewhere.
The query on Goldman's high-speed trading operation comes as the
Department of Justice and others step up scrutiny of whether the techfuelled practice enables illegal insider trading.
The bank said it is cooperating with "all such regulatory investigations
and reviews.”
Goldman also said it is a defendant in a class-action suit filed in April
2014 that alleges that it and other defendants engaged in market
manipulation and insider trading with their high-frequency trading.
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Surely, the hiring practices at Goldman Sachs would have grabbed all the
attention for some time. But why should an organization put hiring and its
practices on the backburner? Why shouldn’t due attention be allotted to
recruitment practices? It’s, therefore, important for anyone practicing
international HRM to understand what is different about international
recruitments and what makes them successful.
3.1 The context of sourcing internationally
The world is changing constantly and organizations change in sync if they
want to succeed. This means that the HR function in an international
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organization has to be dynamic as well and face some challenges in
resourcing for such an organization.
1. Being local while being global: While resourcing for international
organizations, the HR function has to work in globally coordinated
systems while being insightful towards the local needs. For example,
different countries have different variations on the size of the space
used for interviewing a candidate. If an organization does not consider
these elements, success may not be easily attained. Another example is
that in different countries there are varying practices on sharing
personal data of an employee. Like European Union’s Data Protection
Directive sets restrictions on how personal information is collected,
stored and shared. Personal information in this case cannot be shared
between countries if proper procedures have not been followed. The HR
team, therefore, needs to develop local expertise in order to attain
success in recruiting internationally.
2. Integrating the diverse workforce: In an international context,
organizations look to source the best talent from around the world. In
doing so, there is obviously an increasingly varied and diverse team that
gets together. In order to maximize organization and individual
performance, its essential that the diverse workforce is integrated
actively. For example, the Electricity Supply Board (ESB), Ireland
headquartered in Dublin employs more than 7500 people. They have
always focussed on equality, however, in the recent years they are
focusing on diversity and integrating diverse workforce. Their specific
program on integrating people with disability lasts for 3 years wherein
they train and induct people who have a disability but have an
educational background conducive to working at ESB. Post the
induction, they get an opportunity to intern with ESB and following the
internship they have a graduation ceremony. Post this, ESB absorbs
some of them for a permanent employment with them. So far, 25% of
trainees have been absorbed by ESB.
3. Focussing on development and reward: While resourcing
international talent, resourcing specialists also have to focus on talent
development and rewards. In a tough market like today, a talented,
engaged and motivated workforce is critical to success. It’s no longer a
‘loyalty for security’ scenario. Talent and organization relations have
evolved to ‘connect’ between organization and employee being most
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important. In this scenario, talent development initiatives and reward
systems have become supremely important. In challenging roles like
working internationally, if recruiters and organizations want to select,
recruit and retain talent, they need to actively focus on talent
development and reward strategies. Some quotes on international
development and rewards scenario go as follows (Source: Haygroup
report ‘The Changing Face of Reward’)
“A ‘one size fits all’ reward approach will not be applicable. The trend will
go ‘one size fits me’” – Essent, Netherlands.
“Return on investment has become an important metric and one that needs
to be better used and tracked. There has been a marked shift from ‘pay
and treat people well’ to really getting a return on HR investment” – S&P
500 manufacturing company, US.
“We are looking for stars. We want people who are flexible and don’t want
to be pigeonholed into one area or function”. – Multinational IT
organization.
“We focus internally and only go to the market when we need to. We are
looking for people who are creative and innovative in their approach and
also have an innate sense of world-class fashion.” – Benetton, India.
“We are placing a special focus on career development, leadership
development, learning and growth initiatives to build future required
capabilities and contribute meaningfully to the skills shortage and
unemployment concerns in South Africa. We have an additional focus on
gender and the appointment and retention of previously disadvantaged
groups.”
4. Selection in changing environment: Sometimes international
recruiting comes by way of mergers or acquisitions. This means that
recruiters are engaged in selecting talent during changing times and
need to harmonise HR practices of the entities and employees involved.
When a merger or acquisition takes place, an organization can be sure
that some of its best people are job hunting. Most people wake up at
this time and wonder how their careers will be affected due to this
change and many begin circulating resumes. This is because some
people can’t stand ambiguity and uncertainty and others may know
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exactly what is going to come but don’t like the look of it. Research
shows that the turnover rate of a company under merger is three times
the rate found in companies that aren’t involved in a merger.
Recruitment during these times is a highly sensitive activity and
everyone in the top management and the line function needs to be
sensitized to this along with recruitment specialists.
3.2 Approaches to recruitment
The main aim of any recruitment team is to find the right people for the
right task at the right time. However, HR departments of international
organizations may adopt one of the following three approaches for
recruiting employees for global operations.
Ethnocentric Approach
When a company follows the strategy of choosing only from the citizens of
the parent country to work in host nations, it is called an ethnocentric
approach. Normally, higher-level foreign positions are filled with expatriate
employees from the parent country. The general rationale behind the
ethnocentric approach is that the staff from the parent country would
represent the interests of the headquarters effectively and link well with
the parent country. The recruitment process in this method involves four
stages: self-selection, creating a candidate pool, technical skills
assessment, and making a mutual decision. Self-selection involves the
decision by the employee about his future course of action in the
international arena. In the next stage, the employee database is prepared
according to the manpower requirement of the company for international
operations. Then the database is analysed for choosing the best and most
suitable persons for global assignments and this process is called technical
skills assessment. Finally, the best candidate is identified for foreign
assignment and sent abroad with his consent.
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Figure 1: Ethnocentric Approach
The ethnocentric approach places natives of the home country of a
business in key positions at home and abroad. In this example, the U.S.
parent company places natives from the United States in key positions in
both the United States and Mexico.
Ethnocentric staffing presents advantages and disadvantages.
Advantages of Ethnocentric Approach
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The obvious advantage to ethnocentric staffing is the alignment of
interests and perspective of the home office with all foreign subsidiaries
abroad.
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Communication is also easier because there should be no language and
cultural barriers.
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The company may also be able to transfer employees with a clear
performance record that will provide some level of predictability.
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Disadvantages of Ethnocentric Approach
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You can lose local perspective and insights that local employees can
provide that may help overcome unique hurdles in each foreign office.
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Hiring expatriates tends to be expensive compared to hiring locally.
Additionally, a high ratio of expatriates may create local resentment at
foreign subsidiaries, which may hurt morale.
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An ethnocentric company assumes that the host country will be unable to
supply skilled labor. Although it will recruit local people for low-level
positions, an ethnocentric company will reserve skilled positions and
managerial roles for employees from its home country.
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During the recruitment and selection process, an ethnocentric company
risks imposing cultural norms from its home country.
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It may struggle to find suitable employees because it seeks qualifications
that are not undertaken in the host country or insists that low-level
employees speak a second language to enable them to communicate
with expatriate managers.
Did you know?
Firms such as P&G, Philips and Matsushita originally followed the
Ethnocentric Approach. In the Dutch firm Philips, for example, all important
positions in most foreign subsidiaries were at one time held by Dutch
nationals who were referred to by their non-Dutch colleagues as the Dutch
Mafia. In many Japanese and South Korean firms today, such as Toyota,
Matsushita, and Samsung, key positions in international operations are still
often held by home-country nationals. According to the Japanese Overseas
Enterprise Association, in 1996 only 29 per cent of foreign subsidiaries of
Japanese companies had presidents that were not Japanese.
Polycentric Approach
When a company adopts the strategy of limiting recruitment to the
nationals of the host country (local people), it is called a polycentric
approach. The purpose of adopting this approach is to reduce the cost of
foreign operations gradually. Even those organizations which initially adopt
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the ethnocentric approach may eventually switch over to the polycentric
approach. The primary purpose of handing over the management to the
local people is to ensure that the company understands the local market
conditions, political scenario, cultural and legal requirements better. The
companies that adopt this method normally have a localized HR
department, which manages the human resource of the company in that
country. Many international companies operating their branches in
advanced countries like Britain and Japan predominantly adopt this
approach for recruiting executives to manage the branches.”
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Figure 2: Polycentric Approach
The polycentric approach uses natives of the host country to manage
operations in their country and natives of the parent country to manage in
the home office. In this example, the Australian parent company uses
natives of India to manage operations at the Indian subsidiary. Natives of
Australia manage the home office.
Polycentric staffing has advantages and disadvantages.
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Advantages of Polycentric Approach
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Host-country nationals (HCN) will be able to better guide the company on
local market conditions, politics, laws and culture at each foreign
location.
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Use of local employees also sends a message to the country and its
consumers that the company is willing to make a commitment to the
country and its people.
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Local employees are also cheaper, as there are no relocation expenses
and premium compensation for working abroad.
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Employment of HCNs eliminates language barriers, avoids adaptation of
Parent Company Nationals (PCN), reduces the need for cultural
awareness training programs.
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Employment of HCNs allows a multinational company to take a lower
profile in sensitive political situations.
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Employment of HCNs gives continuity to the management of foreign
subsidiaries (lower turnover of key managers).
Disadvantages of Polycentric Approach
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Relying on locals means there may be some disconnect in perspective
and interests with the home country. Locals may put local interests
above the company's broader interests.
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Difficult to bridge the gap between HCN subsidiary managers and PCN
managers at headquarters (language barriers, conflicting national
loyalties, cultural differences).
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HCN managers have limited opportunities to gain experience outside
their own country.
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PCN managers have limited opportunities to gain international
experience.
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•
Resource allocation and strategic decision making will be constrained
when headquarter is filled only by PCNs who have limited exposure to
international assignment.
Did you know?
Some US MNCs use home-country managers to get the operations started,
then shift to a Polycentric Approach and hand it to the host country
managers. Hindustan Lever Ltd. (HLL), the Indian subsidiary of Unilever,
has locals as its top management.
Geocentric Approach
When a company adopts the strategy of recruiting the most suitable
persons for the positions available in it, irrespective of their nationalities, it
is called a geocentric approach. Companies that are truly global in nature
adopt this approach since it utilizes a globally integrated business strategy.
Since the HR operations are constrained by several factors like political and
ethnical factors and government laws, it is difficult to adopt this approach.
However, large international companies generally adopt the geocentric
strategy with considerable success.
For international recruitment, especially on foreign soil, organizations
generally use manpower agencies or consultants with international
connections and repute to source candidates, in addition to the
conventional sources. For an effective utilization of the internal source of
recruitment, global companies need to develop an internal database of
employees and an effective tracking system to identify the most suitable
persons for global postings.
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Figure 3: Geocentric Approach
The geocentric approach uses the best available managers for a business
without regard for their country of origin. In this example, the UK parent
company uses natives of many countries at company headquarters and at
the U.S. subsidiary.
There are advantages and disadvantages to this approach:
Advantages of a Geocentric Approach
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Enhances ability of the firm to develop an international executive team.
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Overcomes the federation drawback of the polycentric approach.
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Support cooperation and resource sharing across units.
Disadvantages of a Geocentric Approach
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Host government may use immigration controls in order to increase
HCNs employment.
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•
Expensive to implement due to increased training and relocation costs.
•
Large numbers of PCNs, HCNs, and TCNs need to be sent across borders.
•
Reduced independence of subsidiary management.
Did you know?
The Swedish multinational Electrolux is a global company where there is
not a tradition to hire managing directors from Sweden, or locally, but to
find the person best suited for the job. They claim that the 'color of one's
passport' does not matter when it comes to rewards, promotion and
development. PCNs, HCNs and TCNs can be found in key positions
anywhere, including those at senior management level at headquarters and
on the board of directors. It enables a multinational firm to develop an
international executive team which assists in developing a global
perspective and an internal pool of labor for deployment throughout the
global organization. It overcomes the 'federation' drawback of the
polycentric approach. It supports cooperation and resource sharing across
units.
Regiocentric Approach
A regiocentric approach to hiring selects management personnel from
within a region of the world which most closely resembles that of the host
country. The company has expanded its search beyond the borders of the
host country, but has stopped short of seeking management personnel
from its operations throughout the world. The theory behind this selection
process is that nationals of the region in which operations actually take
place are better able to deal with language and cultural problems than are
managers from outside the region. The logic behind this hiring approach is
probably sound, but it ignores the potential growth a manager goes
through when forced to deal with different situations than those in which
he or she is comfortable.
The regiocentric approach is adaptable to the company and product
strategies. When regional expertise is needed, natives of the region are
hired. If product knowledge is crucial, then parent-country nationals, who
have ready access to corporate sources of information, can be brought in.
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Figure 4: Regiocentric Approach
The regiocentric approach places managers from various countries within
geographic regions of a business. In this example, the U.S. parent
company uses natives of the United States at company headquarters.
Natives of European countries are used to manage the Italian subsidiary.
There are advantages and disadvantages to this approach:
Advantages of a Regiocentric Approach
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Culture familiarity of the candidates with that of the host country.
•
Less cost of staff compared to parent country nationals.
•
Subsidiary can perform its business operations efficiently in neighbouring
countries by recruiting neighbouring country nationals.
•
Loyalty and commitment of neighbouring country nationals towards
subsidiary
•
Stability in employment of neighbouring country nationals compared to
that of other foreigners.
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Disadvantages of a Regiocentric Approach
•
One shortcoming of the regiocentric approach is that managers from the
region may not understand the view of the managers at headquarters.
•
Corporate headquarters may not employ enough managers with
international experience.
Caselet - Mini-PC goes to Sweden
Mini-PC is a Houston-based maker of handheld computers. In response to
high European demand, Mini-PC purchased Marstrand Electronics, a
handheld manufacturer in Stockholm, Sweden. Mini-PC allowed the
management of Marstrand to continue in their jobs rather than sending
U.S. managers to oversee Swedish operations. Mini-PC decided to purchase
Marstrand because virtually all Swedes speak English, value women's
rights, and are predominantly Christian in religious beliefs. Sweden has an
extremely stable political system, a sound economy, a highly educated
workforce, and it is a member of the European Union. However, Swedes do
take a different view of work time, in that they expect at least two months
of vacation per year. Also, the Swedish workforce is about 80% unionized,
in comparison to Mini-PC's nonunionized workforce. Sweden has a socialist
approach to health benefits, which means higher personal taxes for
workers but lower health benefits costs for employers. When comparing
average national scores on Hofstede's dimensions of culture, the United
States and Sweden are about the same in power distance and long-term
orientation, but the United States is higher than Sweden in individualism
and uncertainty avoidance and much higher in masculinity.
Refer to the scenario above. Which staffing model is Mini-PC using for its
Swedish unit?
•
•
•
Geocentric
Ethnocentric
Polycentric
Ans: Geocentric. Because they are using the best available managers for
business without regard for their country of origin.
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Quizlet
1. Which international staffing model is typified by an organization using
many host-country nationals to staff a variety of positions at many
levels?
(a)Ethnocentric
(b)Polycentric
(c)Geocentric
(d)Regiocentric
2. Under a geocentric staffing model,
(a)Host country nationals are used heavily because they know the local
markets
(b)The organization will have a skeleton HR department at the host
country location, while the home country HR department retains all
the control
(c)The organization seeks to hire the best person available for the
position regardless of where the individual comes from.
(d)Expatriate home country nationals are higher to fill all the higher
level foreign positions
3. Which international staffing model involves staffing high level foreign
jobs with parent country nationals?
(a)Ethnocentric
(b)Polycentric
(c)Geocentric
(d)None of these
4. Mark True/False
(a)One disadvantage of Regiocentric approach to staffing is the high cost of
staff compared to parent country nationals.
(b)When a company adopts the strategy of recruiting the most suitable
persons for the positions available in it, irrespective of their
nationalities, it is called a Geocentric approach.
(c)Using the Polycentric approach results in lower turnover of key
managers.
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(d)If a the U.S. parent company places natives from the United States in
key positions in both the United States and its subsidiary at Mexico, it is
known as the Geocentric Approach.
Answers:
1. (b) Polycentric
2. (c) The organization seeks to hire the best person available for the
position regardless of where the individual comes from.
3. (d) None of these
4. (a) False (low cost staff in regiocentric approach)
(b) True
(c) True
(d) False (It is Ethnocentric approach because only in key positions there
are parent company nationals.)
3.3 Recruitment Methods
When an international organization is looking to recruit, they may follow
either External sources for hiring or Internal.
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Figure 5: Sources for Hiring
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Internal Sources
Recruiting from existing employees is beneficial because those employees
already know the products and services provided by the organisation, and
are committed to the organisation. Having the opportunity for international
placements can also be motivating for employees, and can be a key part of
their development. However, there are considerable costs associated with
overseas placements that might make internal promotion less attractive.
The benefits of internal promotion have to be balanced against the
recruitment of new employees, which can result in fresh ideas and
knowledge being added to the organisation.
External Sources
There are a number of specialist organisations which operate international
search and selection. However, the approach is very expensive making it
an approach to recruitment that is only appropriate for the most senior or
specialist roles.
As with all resourcing, advertising remains a common way of attracting
people to relevant jobs. There are considerable differences in the use of
advertising. Newspaper, journal and internet advertising is used commonly
in developed countries, but less so in the developing or undeveloped
countries. Thought needs to be given to the potential pool of applicants. Is
the intention to recruit a home national for a role to which s/he would be
relocated overseas, or is it preferable to recruit someone already living and
working in the target country?
An increasingly common source of recruitment is the internet. It is a
relatively cheap and quick way of reaching a huge (and international)
target audience. However, it is important to think again about the likely
readership. In developing and undeveloped countries individuals are less
likely to have access to the internet, and hence are less likely to see an
advertisement.
Graduates are often keen
them as a key part of their
not have the same family
mobile. However, there are
overseas placements:
to move to international placements, seeing
career development. Many recent graduates do
ties as older employees, and hence are more
difficulties associated with placing graduates in
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•
The retention rate for graduates is not high in all organisations, and this
can seem as a waste of investment if a lot of time and money has been
invested in them being equipped with the skills necessary for the
international placement.
•
Recent graduates are likely to have less work experience, and hence
might be limited in the roles that they can take overseas.
•
In many cultures age is equated with status, and this could be difficult
for young graduates fresh from university.
Recruitment in today’s times is quite different from what existed a decade
ago. Today, technology is playing a big role in how and what kind of talent
an organization is able to attract and recruit. Here are a couple of snippets
to give us a view of what international organizations’ recruitment teams
are facing realistically.
Recruitment at the Speed of Tomorrow!
What do recruiters want technology to do for them? And how do the
experts see recruitment technology in the future? RCSA members and
technology experts envision a better, faster future.
Source: RSCA Journal, March 2012
RSCA (Recruitment and Consulting Services Association Limited) is the
leading industry body for talent management and workforce solutions in
Australia and New Zealand.
Once upon a time, a recruitment consultant only needed a desk, a
telephone and a few cards recording candidates’ details. When you took
an order, maybe even writing it on an order form, you flicked through the
cards, found a match and booked the candidate on the job. Then you
wrote the client details on the back and typed up a time sheet. Basic?
Absolutely. Effective? Amazingly so: back in the last century, that simple
system built many businesses from one consultant to multi-national
offices. Today, technology makes the process increasingly fast and
efficient – and tomorrow it will be even more so. What do recruiters need
to help them “recruit at the speed of tomorrow”?
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The RCSA Journal asked some RCSA members what technology they
currently use and what they’d like to see in the future. We also asked
some technology experts for their ideas.
What technology do recruiters use currently?
Jane Fanselow FRCSA (Life), Director of Career Dynamix Group in New
Zealand says, “We use ResMan as a relational database and also as a
means of managing client (candidate and employer) relationships. We
use an IP technology for our phones and through this feature record all
our references which we provide to employers as sound bytes.
We utilise Skype for interviewing remote applicants. We make short video
presentations of clients (candidates) and provide these to employersas
part of the CV and brief. We use LinkedIn and Facebook to a limited
extent”. “FastTrack Enterprise is our main database, we also use Outlook
for managing communication and consultation,” says Courtney Rowe
FRCSA, Managing Director of Fusion in Victoria. International Medical
Recruitment took a different approach. “We have an individually designed
database and we also utilise the web, Skype and social media tools,” says
Corrine Taylor FRCSA, IMR’s Managing Director. Stephen Porter, Director
of Searson Buck, based in Tasmania, says: “We use a Dialog Axiom client
management database with Navision accounting linked. We use Microsoft
Office tools. Our website is linked to Axiom to import candidates, and
Axiom is linked to Outlook to allow email traffic, CV and information
storage, Axiom is linked to external job boards to post jobs. The website
lists jobs and enables candidate registration and job application. We also
use Facebook and LinkedIn.” In a different field, Kevin Blogg of
Catapult, a supported employment provider says, “We have a new server
based computer/telephone system with purpose built software with
remote desktop facility. We also have a modern website, however that is
really all of our technology.
What will recruitment technology look like?
The recruiters had some strong suggestions. Stephen Porter would like:
“Continued automation of recruitment functions to improve efficiencies,
better use of social media to assist with candidate contact and job news,
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better video capacity and psychometric tools online to help with
candidate assessment, fast communications to allow group videos (panel
interviews without participants having to be together), better internet
search tools to identify potential candidates, global compatibility of
software and mobile enabled.” Courtney Rowe would like industry-specific
products.
“An ideal scenario is to have better service from technology solution
providers with more suitable products available. Our industry is so
specific that technology needs to keep up! When we are trying to find
competitive advantages through our processes, sometimes it feels like
the marketplace offers limited options. Fusion are in the process of
obtaining Quality, Safety, RCSA SDS and Environmental accreditation, so
in the future, our goal is for a paperless office (as much as is possible).”
Kevin Blogg wants a web-based system. “This would provide not only
help in recording and reporting, but also evidence of the value of services
we use, and the ability to match appropriate jobseeker customers to
advertised jobs, as well as facilities to assist with other aspects of our
service including funding streams.”
The technology experts’ vision
The technology experts have some other suggestions. Nicholas Beames,
CEO of astutepayroll.com, says, “Recruitment organisations who embrace
integrated applications into the processes of their organisation will,
without doubt, be the winners of tomorrow. These integrated applications
allow them to have the very best application designed exclusively for one
process.
The ‘integrated’ part of this means the two applications talk to each other
and so remove most or all manual processes from the organisation. This
leaves their personnel to focus more on what is important – making sales
and managing clients”.
Work DESK Director Geoff Hall says, “The recruitment industry is
becoming increasingly globalised and sophisticated. We see the way
forward as a continuous process of evolution of our single solution
software product.
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We have major development work currently in progress including a
rewrite of the software to encompass new and future technologies and
functionality”.
“Technology will be vital to the recruitment industry and the improvement
of results,” says Justin Sway, CEO of Fast Track. “Patterns of employment
will continue to move away from permanent recruitment towards more
contract and contingent recruitment. As this happens, agencies will
differentiate not only on service provision and costs but increasingly on
the ‘quality’ of the Information known about a candidate. “For example,
the information held on any one candidate will be a combination of profile
(currency and relevance) and supplementary data owned and gathered
by the agency. Handled correctly and marketed properly, this
supplementary data will differentiate recruiters. “Recruitment companies
will continue to need to reduce costs and improve efficiency, and this will
require more, not less, from technology and technology providers. New
technologies, social media and communication techniques will be
harnessed to deliver improved candidate care programs that improve the
connections engagement candidates have with their preferred recruiter,”
Justin adds. Neil Bolton, CEO of Recruitment Systems, believes
technology is creating many more opportunities for good recruiters, but is
threatening the future of low-quality “tick and flick” recruiters. “Any client
can put an ad on the Internet and get a hundred responses, choose the
top two or three and interview them. A recruiter has to add value to
survive. After a few frustrating hiring exercises, clients want something
better – they don’t want a recruiter to only do what they do – they want
and need more quality.”
Paul Thompson, Sales Director of Voyager Software, says; “While the
recruitment industry has been hit hard with its own challenges, many
recruitment sectors and individuals are doing extremely well. The
recruiters flourishing are the ones who are flexible in their approach to
recruitment and the tools they use.New legislation, head-count freezes
and an increasingly challenging market have all ensured that for some,
success as a recruiter is not as easy as it once was. With recruiters
becoming ever increasingly mobile, candidates harder to source, and
clients looking for a more involved service, there are many reasons to
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question if the recruitment software you use is fit for purpose.”
“Recruiters now demand a greater range of services from their software
suppliers. Recruiter technology needs to be flexible in its deployment,
payment options, how it’s supported and the sectors it caters for,” Paul
adds.
Will the face to face interview ever disappear?
With the advances in technology what will happen to the traditional
methods of selecting staff? When the Journal asked recruiters this
question, reactions were mixed. “I’m sure as senior management
changes there will be more willingness to trust technology interviews,”
says Jane Fanselow. “We’re finding that even though initial interviews are
done via Skype on most occasions, there is a face to face interview
before appointment – although we have made placements without this
occurring.
In the future, if the candidate is local, I don’t see employers completely
giving up the face to face meeting phase – even if it’s for coffee before
contracts are signed. But if the candidate is offshore, I think there will be
a growing comfort with Skype or other technology.” Corrine Taylor says,
“Yes, they will disappear: we often recruit candidates internationally
without having face to face interviews, particularly in a candidate-short
market where a clear skill assessment can be made and there are
registration authorities involved in the recruitment process to assist with
the credentialing and verification of qualifications“.
Others disagree. Stephen Porter says it’s unlikely, although he
acknowledges the interview might be done over a video screen rather
than in the same room. “The face to face aspect of our service is most
important, and I can see no way that it will become obsolete in our
service,“ says Kevin Blogg of Catapult. “I would certainly hope not – it
will always be a part of how we do things at Fusion irrespective of what
other organisations do,” says Courtney Rowe.“I think sometimes our
industry forgets that we are all about people and there are significant
benefits for all parties when conducting face to face meetings versus
moving to a complete online impersonal process.” Interestingly, the
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experts had very definite views on the importance of the face to face
interview. “Never!” says Nicholas Beames. “It will just change in format.
However, I see the ‘next’ user adoption on a mass scale to be using
webcams. Using a webcam and Skype-type service from a work computer
will be more and more considered a normal replacement of a telephone
call. So combining this with web applications like LinkedIn to garnering
data may mean a ‘physical’ face to face is not needed.” “Armed with the
experience of having seen professional recruiters in action and the
combination of skills they bring to the process, I cannot see face to face
interviews disappearing in the foreseeable future,” says Geoff Hall. “That
said, individual conversation products like Skype and multiple participant
products like Team Viewer already enable remote interviewing of
candidates,” he adds. “Absolutely not!” says Neil Bolton. “It will be as
necessary as ever – but there will be more preliminary steps to weed out
the obviously wrong people, such as video interviews, better
psychometric testing (and a greater uptake of psychometric primarily for
veto purposes). “Recruiters can sell their services by claiming – quite
honestly – that they are better qualified to do the interviewing – they are
more experienced, more efficient and less emotionally involved in the
hiring process,” he adds.
“Face to face interviews will remain,” says Justin Sway. “They may morph
in format and methodology as new technology becomes available but
they will remain an important source of information gathering during the
recruitment process. With the proliferation of mobile devices there is a
possibility that face-to-face interviews will increase: think of iPhone’s
‘face time’.”
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Paul Thompson believes there is a much bigger question to address:
“Recruitment is a one-to-one business; it always will be. The internet has
made recruitment a global market. You can be engaging with a specialist
recruiter working from his/her home-based office in another country.
Unless it’s a top role, the face to face interview with the recruiter is
unlikely to happen. But that’s where the recruiter’s skill and experience
can get almost as much from a phone call as they could from actually
meeting the candidate.“For the hirer, it’s another story. Primarily they’re
looking and thinking about whether the other staff will like this person,
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will they fit into the team swiftly and is this someone you are willing to
put in front of your clients? It’s as much about gut feel as their skills and
track record. The real question is – why isn’t there a videoconferencing
boom among recruiters? It amazes me that video-conferencing has been
slow to catch on among recruitment teams and hiring managers – at a
minimum for the initial round of interviews. Shouldn’t Skype’s
videoconferencing be used more freely in the office and don’t many
business professionals already use it for chat and voice?” he asks.
How will improved technology help the recruitment industry
improve results?
“Technology should be used as a tool that provides a quick
correspondence in a time-poor world. It should enable recruitment
consultants to respond promptly but still personally to both candidates
and clients,” Corrine Taylor believes.
“It will allow us to be more efficient so more time can be spent on the
important bits like talking to applicants and clients rather than the
surrounding processes. Technology will allow clients to do more
themselves and have direct links to candidates so we need to be able to
show value in what we can do and to be able to deliver the right person
quickly and cost effectively when they can’t. Our ability to source
‘passive’ candidates will be key.Job boards and newspaper adverts will
become redundant,” says Stephen Porter. Jane Fanselow adds another
viewpoint: “I’m not sure technology is ever going to take away the ‘feel’ a
good recruiter has for a candidate. New Zealand needs a faster
broadband speed to make video technology easier to use because this
can be a problem. I think our results improve when we truly understand
the needs of the employer and partner with them in a way that helps
them achieve their goals rather than our own. Perhaps that may mean
adapting our technology to interact more effectively with theirs. “I
personally like the face to face interaction with employers, being inside
their business and understanding what their issues are,” Jane continues.
”When success and results for us means solving the employer’s problems
longer term, the satisfaction is far greater than just throwing a person
into a job and hoping they stay for a guarantee period.
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I think that’s how our industry becomes an irreplaceable and integral part
of an employer’s business. Technology has helped employers find all the
applicants they need via Seek or LinkedIn or Twitter, so we need to be
doing something extra.“For Catapult, Kevin Blogg sees exactly how
technology could help improve his organisations results; “For our type of
service, getting the message of successful positions held by people with
disability, illness or other significant barriers out to other employers.”
Courtney Rowe sums it up: “Efficiencies, competitive advantage,
document control, etc,. will help. Improved technology reduces the
potential for human error and oversight”.
The technology experts agree that technology can improve results
significantly – if recruiters take advantage of what’s available. “Improved
technology will enable the recruitment industry to provide a better
service, and solidify its position within industry and government – if, and
only if, recruiters use technology to provide a service that their clients
can’t or are unwilling to provide,” says Neil Bolton. “Comprehensive
business software is crucial to the management of daily operations,
providing for default monitoring of key performance indicators.While this
in itself is nothing new, the information available from current refined
software products is far more extensive than it has ever been,” Geoff Hall
adds.
Justin Sway comments: “Our vision of the future sees technology playing
a more important part in the industry and the recruitment process. The
key to this will be the data held in the recruitment system. Simple profile
and contact information needs to be up to date and accurate to be of
value. Additionally, associated information such as recent work history,
referrals and recommendations, will all add to the relevance of the data.
“The quantity of candidate data will increase, as more information is
gathered, so improved filtering and searching tools will be required,“
Justin continues. “While a lot of this data will become more and more
publicly available, recruiters must capture and systematise their
‘knowledge’ of the candidate to add real value for their clients above what
is publicly available.” Paul Thompson says: “Most employers now have the
same tools at their fingertips. Recruiters need to offer a better, more
involved service if they’re going to justify the fees. These services could
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include talent mapping, tracking compliance with legislation, and better
tools to filter and search. And recruiters need to be increasingly mobile.
The best recruiter isn’t likely to be on your High Street, so being ‘social
media savvy’ will be key to get your recruitment brand in front of your
clients. “Technology is an enabler of better practice but only for those
who want to practise better!’ warns Nicholas Beames. “And this includes
using webcams and Skype-type interviews or using LinkedIn as your
resume format – maybe even embracing web-based CRMs like Bullhorn,
TRIS, or JobAdder. Then having those applications ‘talk’to other webbased applications. All this helps those who want to be better, get better
– to do more in less time.”
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Also, beyond technology, recruitment has shifted gears as a whole.
Recruitment teams are now much more than ‘interviewers’ and the current
trend of recruitment is aptly captured in this article by Forbes published in
2013.
The 9 Hottest Trends in Corporate Recruiting
Source: www.forbes.com
The corporate recruitingmarket just gets hotter and hotter. We just
returned from a two week tour through Europe and attended
theiRecruit conference in Amsterdam, where we had the opportunity to talk
with dozens of top recruiting managers.
Here are the 9 hottest trends we see from our research, highlighting some
of the newest start-ups in the space.
1. Corporate Talent Networks
With the growth of LinkedIn, Twitter, Facebook, Glass door, Indeed, and
a variety of other tools available to promote your employment brand,
companies have now evolved from a model of “candidate relationship
management” to a model of building a “talent network” from which to
recruit. The “talent network” is not just a place to post jobs, it’s a place
to attract people: and it includes fans, candidates, employees, alumni,
and even customers.
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These “talent networks” (AT&T, Microsoft, IBM, many companies now
have them) are viral product and service communities and they create
magnetic attraction among prospective employees, customers, and
partners. Vendors like Avature, Brave New Talent, Jobs2Web, Oracle
Taleo Social Sourcing Cloud Service (formerly Select Minds),
and Smashfly help you build them.
2. Social Sourcing
Sourcing candidates over the web is critical to success today. The
granddaddy of these solutions is LinkedIn, which sells the LinkedIn
Recruiter tool to HR organizations. Most recruiters will tell you that
having a LinkedIn recruiter license is the “cost of entry.” Many of the
recruiters I talk with rely heavily on LinkedIn but no longer see it as a
competitive advantage – because everyone else has it too. A whole
barrage of exciting tools have been created to help companies better
find and source key candidates. In the technology space interesting
tools include Entelo, Gild, TalentBin, and Remarkable Hire which are out
there looking at all your social footprint to evaluate your technical
prowess. These companies mine your personal code postings and other
social information to create a profile and actual “competency ratings”
based on your social data.
3. Recruiters as Sourcers not Recruiters
As companies globalize and look for more specialized skills, the role of
the recruiter becomes more and more important. And where do we want
recruiters spending their time? Interviewing people? Or sourcing great
candidates? The highest-performing companies are now pushing more
and more responsibility onto the shoulders of hiring managers (training
them how to interview) and letting recruiters focus on high-powered
sourcing and initial screening. The more “assessment” we push to hiring
managers the better. At Oracle, where recruiting is an art, the company
specializes its recruiters on narrow job areas and gives them
administrative support for social networking, ad management and
scheduling. The recruiters are very senior and they are measured on
their ability to strategically source and attract passive candidates, often
from competitors. Hiring managers play a major role in the process and
partner with recruiters on sourcing and assessment.
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4. A Barrage of New Assessment Science
The science of human assessment will never stand still. Tools like MyersBriggs and hundreds of other personality or skills assessments have
been around for decades. Today, driven largely by the power of the
cloud, there seem to be an explosion of new assessment tools.
Some of the hotter companies include Evolv, Logi-serve, People
Answers, Skill Survey and Checkster (background checking), Smarterer
(customized skills testing) as well as the large legacy providers like SHL,
DDI, Hogan, Kenexa (IBM), Korn
Ferry, Profiles International,
Wonderlic, and hundreds more. I can’t possibly do this market justice in
a few paragraphs, but it’s growing with new providers who not only
provide great validated tests, but also collect employee performance
data so they are starting to provide real-time feedback on the tests
themselves.
If you want to learn more about this fast-growing, high value space,
check out our four-stage model for pre-hire assessment.
5. Building an End to End Talent Brand
The days of an “employment brand” are over. Now it’s your “brand.” As
we see it, your real employment brand is of Taleo Oracle), walking out
the door every evening, talking with their friends, posting information
on Facebook, and possibly complaining about your company on
Glassdoor or somewhere else. Today’s high-powered recruiters work
directly with the SVP of Marketing to create a research-based, authentic
employment brand and promote it on the front page of the company
website (not only in the “careers section”). A large percentage of the
people who visit your company online are looking for jobs – so you want
to grab them quickly. A modern talent brand is highly specific,
authentic, and narrow – so you attract just the right people. (We call
this creating a “tunnel” of candidates, not a “funnel” of candidates.)
There’s no reason to attract job candidates who don’t love what you do
and how you do it – so be honest and real – you’ll get better candidates
and save money on screening. Companies like TMP, Future
step, Pinstripe, Seven Step RPO and Kenexa (IBM) are experts and
many others are experts at helping you build and communicate a
compelling talent brand.
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6. Modernized Applicant Tracking Software
Yes, we all hate applicant tracking systems. When you have to fill in 20
fields in a form to apply for a job it makes your head spin. But these
systems are badly needed and companies spend millions of dollars
trying to make them easier to use and more valuable to candidates.
(And it isn’t always the software’s fault they are hard to use.) Slowly but
surely a new breed of these tools is emerging and they focus on
managing the entire recruitment process, monitoring ad campaigns, and
creating an excellent candidate experience. This includes new versions
Success Factors, Lumesse, Tribepad, Jobvite, iCims, Silk Road, Kenexa
(IBM), People fluent, Technomedia (Hodes IQ), Bullhorn, and dozens of
others.
Yes, ATS’s are not the awesome application they used to be – but now
they’re the platform for all the other recruiting tools you need – and
they become the data platform for analysis as well. While we’re talking
about the candidate experience, it still needs work. which leads me to:
7. A great candidate experience
The days of employers putting up hugely difficult websites to attract
candidates are slowly going away. New research by the Talent
Board shows that you as an employer can damage your own brand by
making it impossible to apply for a job, not getting back to candidates,
or treating them poorly during the interview process. Now, more than
ever, it’s time for the recruiting team in your company to do their own
net-promoter score and use tools like “manage the candidate
experience” to measure and continuously improve the recruiting
process. If you make it unpleasant to apply for a job at your company,
word gets around.
8. High value outsourcers and staffing firms
The recruiting process is complicated and varies greatly by role,
geography and industry. The $140 billion talent acquisition industry is
filled with experts who want to help you. A whole new breed of high
value recruitment outsourcers have sprung up to help you find the right
people in critical roles. We used to think that outside recruiters and
staffing firms would go away as LinkedIn and other online job boards
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grew. Not the case. The flurry of new tools available has made it more
important than ever to look for seasoned professionals (and often
specialists) to help you find just the right people. And last but certainly
not the least…
9. BigData and BigData Firms
Recruiting is the number one application for BigData in HR. Our research
shows that the most advanced thinkers in HR analytics start by
measuring recruiting. Do you know where your most effective
candidates come from? What backgrounds and experiences make the
best salespeople? Which sourcing or advertising channels are most
effective and efficient? This is the most data-rich part of HR. New
companies like Broadbean (recruitment dashboard), Burning Glass(US
talent acquisition data), LinkedIn, eQuest, and dozens of others are now
selling data, tools, and analytics services to help you assess, analyze,
and improve your recruiting function. If you aren’t already analyzing
your recruiting process in detail, you should be. Companies that
measure recruiting well are dramatically outperforming their peers.
Watch the BigData in recruiting market – this is going to be one of the
best spaces for hot start-ups in HR. There is tremendous innovation
taking place in the recruiting market. Remember that among all the HR,
talent, and leadership programs you work on, the number one most
important is “hiring the right people in the first place.” Focus on
recruiting: you’ll be a better business for it.
3.4 Selection Methods
Once we have attracted talent, as an international organization, we need to
gel on to the methods that best suit us to select suitable talent. Selecting
candidates involves two main processes shortlisting, and assessing
applicants to decide who should be made a job offer. It is a crucial stage in
the overall recruitment process. A range of different methods can be used
to assess candidates. These vary in their reliability as a predictor of
performance in the job and in their ease and expense to administer.
Whatever method is used it is important to ensure that candidates know in
advance what to expect from the selection process, for example, the type
of assessment they are going to undergo and the length of time it will take.
Organisations should also check whether the applicant has any need for
adjustments due to a disability.
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Interviews
Interviews are commonly used, but the approach to them differs. In the
UK, it is increasingly common to have a structured interview and panel
interviews are not uncommon. In the USA, almost all interviews follow a
very structured process where all applicants are asked exactly the same
questions. In Northern Europe, it is common for the HR Manager to be one
of the interviewers, but this is less likely in other countries in the world.
There are also cultural differences in the ways in which applicants will react
in an interview situation. For example, in Korea it is a cultural norm, when
asked a ‘good question’ to keep silent as a mark of respect. However, in
cultures such as the USA and the UK to remain silent when asked a
question would be seen to be rude or ignorant. In the UK direct eye contact
is seen as confident and to indicate honesty. However, in many South Asian
countries direct eye contact is seen as being aggressive and rude.
It is important that cultural differences are understood and interpreted
appropriately.
Interviews remain popular because as well as providing information to
predict performance, interviews also give an opportunity for the interviewer
and interviewee to meet face to face (or increasingly meeting virtually via
video link or Skype) and exchange information.
For the candidate, the interview is an opportunity to:
•
Ask questions about the job and the organisation
•
Decide if they’d like to take the job.
For the organisation, the interview is an opportunity to:
•
Describe the job and the responsibilities the job holder would need to
take on in more detail
•
Assess candidates’ ability to perform in the role
•
Discuss with the candidate details such as start dates, training provisions
and terms and conditions such as employee benefits
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•
Give a positive impression to the candidate of the company as a ‘good
employer’ (who they'd like to work for should they be offered the
position).
A poorly conducted interview may leave the candidate with an
unfavourable impression of the organisation that they are likely to share
with other potential applicants and customers. It is good practice to give
feedback to candidates following an interview.
Research evidence highlights the limitations of the traditional interview as
a poor predictor of a candidate’s performance in the job. Information is
gathered from the interview in a relatively unsystematic manner, and
judgements may be made on candidates for a variety of reasons.
Anderson and Shackleton draw on a wide variety of studies to summarise
the reasons why interviews have been criticised in this way. These include:
•
The self-fulfilling prophecy effect: Interviewers may ask questions
designed to confirm initial impressions of candidates gained either before
the interview or in its early stages.
•
The stereotyping effect: Interviewers sometimes assume that
particular characteristics are typical of members of a particular group. In
the case of sex, race, disability, marital status or ex-offenders, decisions
made on this basis are often illegal. However, the effect occurs in the
case of all kinds of social groups.
•
The halo and horns effect: Interviewers sometimes rate candidates as
‘good’ or ‘bad’ across the board and thus, reach very unbalanced
decisions.
•
The contrast effect: Interviewers can allow the experience of
interviewing one candidate to affect the way they interview others who
are seen later in the selection process.
•
The similar-to-me effect: Interviewers sometimes give preference to
candidates they perceive as having a similar background, career history,
personality or attitudes to themselves.
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•
The personal liking effect: Interviewers may make decisions on the
basis of whether they personally like or dislike the candidate.
Structuring the interview can help improve its ability to predict
performance in the job and a growing number of employers take this
approach. A ‘structured interview’ means that:
➡
Questions are planned carefully before the interview
➡
All candidates are asked the same questions
➡
Answers are scored using a rating system
➡
Questions focus on the attributes and behaviours needed in the job.
➡
There is a risk, however, that this means an overly rigid approach in
which there is little opportunity to ask the candidate supplementary
questions and the candidate does not feel at their ease. So a balance
needs to be made.
Assessment Centres
Assessment centres are increasingly common but still relatively unknown in
many other countries. In designing activities in an assessment centre it is
important to ensure that they are free of cultural bias, and that the results
are interpreted appropriately. It is also important that assumptions are not
made about the exposure that applicants have had to technology. Asking a
UK based applicant to carry out a computer based assessment is unlikely
to have a significant reaction. However, an employee from a developing or
undeveloped country might be penalised in the task simply due to a lack of
familiarity with the computer technology.
Assessment centres involve candidates completing a number of different
tasks as part of the selection process. An assessment centre should reflect
the reality of the job and the organisation. The tasks set should link with
the job description and person specification. It must be fair as a selection
process regarding the time taken, the number of tasks set and the
opportunities for candidates to show different aspects of their abilities.
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Depending on the nature of the job, the tasks might include individual or
group work, written and/or oral input (tasks set in advance such as
preparing a report or presentation), and written and/or oral outputs on the
day such as in-tray exercises, analytical work, individual problem solving,
group discussions, group problem solving, tasks which match business
activities, personal role-play and functional role-play.
Group exercises should be as real as possible, should set goals and have a
limited time, should require candidates to share information and reach
decisions and should require the candidates to read the brief very
carefully.
The tasks might need to encourage competitiveness or cooperation, to test
for creativity or for building on the ideas of others in a productive manner.
The opportunity to compete with others will assist some candidates to
perform better. In organisations wishing to improve their diversity,elements
of competition should be decreased in favour of increased opportunities to
co-operate, as these skills are likely to encourage wider participation.
There should be a number of senior observers/selectors to ensure greater
objectivity through a range of views. Selectors must be trained to observe,
record, classify and rate behaviour, and seek evidence accurately and
objectively against the job description and person specification. Selectors
preferably should also have had some training on interviewing skills and in
managing diversity, and have good listening skills. Assessors might also be
used to observe and comment on behaviour although they do not
necessarily take part in final selection decisions.
A feedback session with either an occupational psychologist or someone
trained to deliver professional feedback is of benefit to candidates and
indicates the organisation takes selection seriously. The whole process
should be perceived as fair by the candidates.
Psychological Testing
The use of psychological testing does attract some controversy. This is
particularly true in international settings. With the increase in the use of
technology in the workplace, online testing is also growing in popularity particularly in the recruitment of graduates and where employers are faced
with high volumes of applicants.
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Most tests are designed and developed by occupational psychologists and
are accompanied by detailed manuals providing the data to establish the
reliability of the test and the normative information against which test
results may be compared. This is the information that allows employers to
compare their test candidates against the scores of a normal population of
similar people. Administering tests and analysing the results is a skilled
task. Scoring of tests is often complex and how it is done will depend on
what a test is trying to measure. With personality tests there are no right
or wrong answers as they are designed to present a profile of an
individual.
Before using a test, users should consider:
•
Whether it is appropriate to use a test at all and whether it will provide
any additional relevant information
•
Whether there are sufficient resources in place to carry out testing
effectively
•
When used for selection purposes, that tests are relevant to the job/
person specification
•
Who will choose, recommend and demonstrate the value of tests
•
At what stage tests should be incorporated into the decision making
process
•
Equal opportunities issues
•
How the results will be used and what weight will be given to them for
decision making purposes
•
What their policy will be on confidentiality
•
Who will have access to the results
•
How test results will be stored
•
The law regarding the copyright of tests
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•
The policy and provisions for giving feedback.
•
Test administrators should ensure that individuals receive:
➡
Advance notice that they will be required to take tests
➡
Notice of the duration of tests and whether this is significant in
interpreting results
➡
Adequate time to allow them to make any practical arrangements to
enable them to take the tests
➡
Access to an appropriate environment free from interference in which
to take the tests
➡
Adequate information about the requirements of each test they will
be asked to complete, and the opportunity to raise any queries they
have before taking the tests
➡
Information on the arrangements for feedback.
3.5 Challenges and Trends in International Recruitment
AND Selection
Due to the constantly changing global and corporate environment,
recruitment teams often face several challenges for international
placements. They have to be global while understanding local needs, the
global workforce needs to be integrated for high performance of the
organization and the individual.
At the same time, the challenge is to source the right mix of skills, and the
ability to adapt to a different culture, geography, laws, values and attitude.
In the current times, certain recruitment issues are most significantly
challenging for organizations:
1. Retention: Turnover rates continue to rise, even upto a high of 25%.
Talent shifts jobs for more exciting opportunities. They now look for
more than security and comfort. Recruitment teams are already working
overtime to fill in vacant positions and added turnover rates will only
add to that complexity.
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2. Speed: As the pace of business is accelerating and the fight to hire the
right talent gets tougher, the recruitment function is now becoming
more like the survival of the fittest. The recruitment team that’s fast in
all the aspects of hiring, will succeed in recruiting top talent.
3. Position prioritization: As is the reality for most organizations, there
will always be limited budgets and there will always be lag due to
pending approvals or management decisions. This will lead businesses
to prioritize positions and recruitment teams to fill in positions with high
business impact and return on investment.
4. Workforce planning: As the business environment becomes more
unpredictable and volatile, workforce forecasting and planning will not
be as easy as it has been. Data driven forecasting, planning and
recruitment strategy will take precedence. However, currently such
talent and orientation towards workforce planning is scarce and will
remain a challenge.
5. Competition with start-ups: With a high entrepreneurial wave in the
corporate world, numerous start-ups have cropped up. Top talent would
prefer to do ‘something new and exciting’. Therefore existing
organizations may face stiff competition in the already miniscule talent
pool for international assignments. Sometimes the best of compensation
packages, living conditions and roles may not excite talent as much as
setting up a new business.
6. Recruitment technology: Currently all the recruitment technology
that exists is aimed at reducing cost, turnaround time or administrative
burden. But there isn’t any technology that gives one a competitive
edge on finding suitable new hires. This continues to remain a
recruitment challenge.
There will be a marked increase in recruiting competition in high-growth
industries like technology, the mobile platform, social media, construction,
and health care. In addition, the next few years will see an increased
demand for high performers, technologists, and innovators in key jobs in
every industry. In fact, a recent survey of CEOs revealed that 77 per cent
of firms are currently changing their talent strategy, which means that
most CEOs agree that the need for change in the talent area is already
present.
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As a recruiting team, realize that, just like in the product area, if you want
to dominate your recruiting marketplace, you will have to move fast in
order to stay ahead of the trends and the adopted practices of your
competitors. If you delay taking action, it is almost impossible to “catch
up” if you fall too far behind, because your talent competitors will be
continually moving ahead of where they were when you originally
benchmarked against them. In order to stay ahead and also to build a
competitive talent advantage, don’t wait for your new year’s budget to kick
in before you start developing your plan for addressing the upcoming
problems and for taking advantage of imminent talent opportunities.
Some impactful trends that will continue to be important for the next few
years:
1. The mobile platform: The ability of the candidate to currently make
instant applications to jobs from mobile phones will become
mainstream. Recruitment focussed mobile phone apps will gain
importance. This will enable talent scouting to become faster.
2. Video interviewing: With diminishing geographical boundaries and
organizations pressed for time, the live video interviewing will continue
to gain importance. In the past few years, this technique has gained
acceptance and will continue to do so in the next few years for atleast
the initial interviews.
3. Online candidate assessment: As the online candidate assessment
tools prove to be cheaper and equally effective, they continue to
become mainstream tools for recruitment. They prove to be effective
because they reduce unnecessary interviews and can improve the
quality of hire as well.
4. Remote working: The growth in technology and also the willingness of
managers to accept talent working remotely has increased the available
talent pool and also opened out opportunities to find talent irrespective
of their location.
5. Accelerated internal movements: It has become increasingly
important to move existing employees to areas of higher impact.
Internal movements also give higher comfort to both the organization
and the employee in terms of culture fit and performance predictability.
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Fun Exercise – Recruitment Trends
Are there any other international recruitment trends that you have heard
of?
Make teams of 4-5 members and talk to a few of your contacts in the
corporate industry – what recruitment trends exist in their organizations?
List out companies that you know are going by the current recruitment
trends and using technology platforms like video interviewing, remote
working, internal movements, online candidate assessments or mobile
job applications.
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3.6 Best Practices in International Recruitment and
Selection
As the world becomes smaller and businesses go global, organizations are
looking out for reliable recruiters who can fill positions quickly and
effectively. A few years back, companies would take such decisions very
slowly – whether or not to move to international markets. However, now
considering moving to a new market and acting upon it has become very
quick. As a result, a new sect of HR experts has sprung up – one that gives
expert information on standard work week, local salary expectations,
government hiring regulations and trade union influence. This enables
organizations to quickly grasp the pulse of the particular location where
they aim to launch their new operations.
Certain best practices for international recruitment have been identified in
this context:
1. Need for specialized HR agency: Businesses that plan to spread
locations outside of their own, need to tie up with specialized HR
agencies or have specialist HR executives on board to carry out their
international recruitment exercise. Such experts have a deeper
understanding of the local labour pool and they also have higher access
to local contacts. This would result in quicker and more authentic hiring
of candidates with the right fit.
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2. Recruiting locally: Higher number of organizations are taking a call to
recruit locally when they start operations at a new location, rather than
importing people from their home country. This ensures lower cost and
higher cultural fit. DHL, for example, moved its global data centre from
UK to Czech Republic. Connect2Development (C2D), a Prague based IT
recruiting and outsourcing firm recruited 3000 odd employees from the
local market for this new centre of DHL.
3. Good Systems make a good practice: Its absolutely essential for
international recruiting that you have a good local database system. For
a recruitment team to work quickly and efficiently, a strong system will
ensure quicker, timely and more appropriate actions. It has now become
a necessity and not a choice to invest in such systems.
4. Personal touch: In addition to having a strong database system, what
gives you an edge in international recruitment is the personal touch
from the recruiter. Sending a personal mail or message to candidates
who you may have shortlisted, lets them know that the organization is
interested in them and that they are on their radar. Though staying in
touch with such a large base of candidates has its challenges, but giving
a bit of the personal touch definitely brings an edge towards drawing
the talent, you want, towards your organization.
5. Recruitment metrics: Let’s face it, recruiting globally is a tough task!
No matter where you recruit, it is important to understand which
recruitment channels are working for you and which aren’t. When using
international job sources, you need to make sure that they are providing
you value in terms of bringing applicants to your system. You need to
have access to multiple recruiting channels and regularly test and
evaluate – which ones are giving you the result you want.
Here’s an interesting read for us for recruitment across cultures. It gives us
a peek into the fact that as a best practice we also need to understand the
local culture of the geography where we are recruiting, thereby
understanding candidate behaviour and resulting in more effective hiring.
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Recruitment Across Cultures
by Michael Gates
January 2008
Source: www.crossculture.com
The world is globalizing at breathtaking pace, and recruitment
agencies need to deal with people who have different worlds in
their heads and express themselves in diverse ways.
When IKEA were recruiting in France they ran into a cross-cultural
problem. The company likes to recruit people who share IKEA values –
typically Swedish and embodied in the down to earth persona of Ingvar
Kamprad the founder. But HR were stumped when trying to find a French
translation of the word ‘humbleness’, which is one of their key values.
Wittgenstein said “if a lion could speak, we would not understand what it
had to say to us’’, and it is a little like that with cultural differences. For
example, Americans are brought up to sell themselves, so in CVs and
interviews they may appear boastful and even dishonest to an extremely
modest culture like the Finns. This may lead a recruiter to misjudge a
perfectly sound American candidate. The same thing can happen in
reverse. There can be a whole world of different values hidden under the
surface of the words which makes us misinterpret what is said.
The challenge is that our cultural values are instilled firmly by the age of
seven and all we do and say, and how we evaluate others, is imbued with
them, usually without our realising it.
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Guidelines for Successful Recruitment Across Cultures
•
Be aware of your own cultural make-up and understand that what seems
normal may not be at all normal for the candidate or your overseas
colleagues. There are various online personal cultural profiling tools on
the market to help you. Two of the best known are the British Culture
Active and American Globe Smart.
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•
Understand the culture of others – ideally through self-assessment of
culturally-determined behavioural styles and values and beliefs relative to
other cultures, as this goes beyond national stereotyping.
•
Appreciate the overriding importance of sensitivity to national
communication patterns (including listening habits) as an aid to real
understanding, and that the impact of what is said, or not said, can be
totally different from the intent.
•
Use your in-house diversity effectively. If you don’t do that, how can you
help your clients achieve results from a diverse staff?
•
Educate your orgnization on: (a) the value of recruiting a culturallydiverse workforce (b) the competitive advantage of cultural flexibility (c)
the importance of continuing cultural education in order to retain people.
•
Put in place ongoing training and cultural awareness programmes to
increase mutual understanding so that recruiters, clients, employees and
migrants can learn from, and better interact with each other.
Recruitment is Increasingly a Global Activity
In recruitment we are coming more and more into contact with cultures
who think and behave differently from us; for instance in off-shoring,
recruitment for global corporations, or immigrant recruitment. Having a
culturally-diverse staff can help organisations reflect and understand better
the largest growing markets of the future such as Brazil, Russia, India and
China.
In Northern Europe and the USA, we tend to be good at things which are
linear and task-oriented, like production, IT and logistics. But the
pendulum is swinging towards relationships and people issues as an even
greater source of competitive edge than the purely rational.
This has been accompanied by the economic rise of countries like India and
China. These are countries where relationship and people skills are high. As
recruiters, we need to look increasingly for employees who are strong in
these areas.
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Working with Migrants
There are great benefits to ensuring that the 190,000 or so people
predicted to arrive in the UK every year for the next 25 years, as well as
those who are already here, are effectively integrated into the workforce.
The benefits for business should not be underestimated, such as the
retention of skilled employees through better understanding of different
ways of thinking and behaving.
The recruitment industry, as the natural first port of call for migrants
looking for work, is key to this process.
Dealing with an influx of people with a different language or culture is a
challenge, but if managed well, it’s one that can pay great dividends.
3.7 Summary
1. International recruitment plays a big role when an organization is
looking to operate in other geographies. This is because every
employee, wherever on the globe, is representing that organization’s
brand.
2. The context in current international recruitment includes being global
along with understanding the local norms, focussing on development
and rewards, integrating the diverse workforce and also sometimes
dealing with big changes like mergers and acquisitions.
3. There are types of approaches organizations follow for staffing
internationally – Ethnocentric, Polycentric, Geocentric and Regiocentric.
4. Each staffing approach has its advantages and disadvantages.
Organizations choose their approach to staffing based on their company
culture and belief and also their strategy.
5. There are internal (promotions and transfers) and external sources
(headhunting, advertising, etc.) of recruitment that have existed
traditionally. However, recruiters are moving to new platforms of
attracting and sourcing talent.
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6. New platforms for attracting and sourcing talent are technology based
like Linkedin, Facebook and company websites.
7. Selection methods internationally range from interviews to assessment
centres and also psychometric tests. However, their usage is highly
culture dependant.
8. International recruitment carries its challenges and trends. The trends
are moving towards being speedy and highly effective, hence, using
technology platforms, knowing the talent source geography and giving a
personal touch are the recent trends that may give an edge to the
recruiter.
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3.7 Self Assessment Questions
1. In different countries there are varying practices on sharing personal
data of an employee.
(a)The organization can ignore this information
(b)Be simply aware of this information
(c)Incorporate this information in their recruitment practices
2. Which of the following diverse set of employees need to be actively
incorporated with all the others?
(a)The Disabled
(b)Women expatriates
(c)Local talent
(d)All of the above
3. The rationale behind Ethnocentric Approach is
(a)Staff from the parent country would represent the interests of the
headquarters effectively and link well with the parent country
(b)Staff from parent country is superior on skills compared to the other
locations
(c)Staff from parent country is cheaper
4. The disadvantage of the Geocentric Approach is
(a)It doesn’t give importance to parent country nationals
(b)Increased training and relocation costs
(c)Risk of imposing cultural norms from the parent country
5. Recently, _______________ has been proved to be the most quick and
effective way of recruiting
(a)Internet
(b)Newspaper advertising
(c)Internal movements
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6. Interviewers sometimes rate candidates as ‘good’ or ‘bad’ across the
board and thus reach very unbalanced decisions. This is called
(a)Similar to me effect
(b)Self Fulfilling Prophecy effect
(c)Halo and Horns effect
7. Video interviewing has
(a)Emerged as one of the cheapest ways to interview people across
boundaries
(b)Been ineffective since the candidate hasn’t met the recruiter in
person
(c)Not really become popular since it is dependent on technology
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture - Part 1
Video Lecture - Part 2
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Chapter 4
MANAGING PERFORMANCE INTERNATIONALLY
Objectives
At the end of the chapter, you should be able to understand:
•
•
The relationship between culture and performance management
Challenges in managing performance internationally
Structure:
4.1
4.2
4.3
4.4
4.5
4.6
Impact of Culture on Performance
Expatriate Performance Appraisals: Problems
Factors Affecting Expatriate Job Performance
Solutions to Better Expatriate Performance
Summary
Self Assessment Questions
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Motivating your International Workforce
Source: www.communicaid.com
Particularly, in times of economic downturn when employees are often
expected to work harder and longer for less remuneration, managers need
to consider carefully how to motivate their talented employees and how to
incentivise them to remain loyal to the organisation. And talent
management is much more complex in an international environment.
There are of course some universal principles of motivation. We all have a
basic need to earn a good salary, feel safe at work, have enough time off
and maintain relationships with our colleagues. According to Herzberg,
these are ‘hygiene factors’ which prevent us from being dis-satisfied rather
than positively motivating us. However in addition, we are also motivated
to a greater or less degree by ‘higher level’ factors such as development,
stimulation, variety, recognition and responsibility.
How these motivational factors translate across cultures can vary
enormously. If we take recognition as an example, the way in which
workers prefer to be recognised will differ according to their cultural
background. In more individualistic cultures such as the USA or Australia,
employee of the month schemes work well and employees are praised as
individuals through companywide emails or intranet postings. However, this
could cause a loss of face rather than increase motivation in Asian cultures
where employees prefer to be recognised for their hard work as part of a
team or collective. Being singled out as an individual can be embarrassing
and affect the team dynamic. Obvious signs of status motivate more in
some countries than others depending on the underlying attitudes to
hierarchy. Sometimes a more prestigious job title or a larger office will
incentivise as much as an increase in salary. In relationship focused
cultures motivators are likely to be more based on personal as well as
professional factors. How supported and well looked after do employees
feel, how good is their relationship with the boss and what level of family
support is provided are all important in maintaining employee loyalty.
Elsewhere personal achievement and development are the overriding
drivers. Expectations of feedback, training initiatives, career planning and
work life balance are just some of the other factors which can affect how
employees across the globes are motivated.
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In some parts of the world it is more acceptable to use the stick approach
as well as the carrot to motivate employees. In some Asian cultures, for
example, it is acceptable to use demotions when performance is considered
to be below par. This is a strategy that would be more likely to cause an
employee in a western culture to start looking for another job rather than
to feel motivated to work harder.
It is important that organisational policies as well as global leaders and
managers of international teams reflect the need to motivate employees
from different cultures through different incentives, processes and reward
and recognition schemes. Making the assumption that everyone will
motivated by the same incentives can be dangerous and have a real impact
on talent retention. Most employees need to feel fulfilled and valued and an
effective international people manager takes the time to understand how
best to do to achieve this – whether through setting up focus groups,
having individual conversations or through taking part in intercultural
training.
4.1 Impact of Culture on Performance
While the need to earn a salary ensures people will show up for work,
organizational behavior suggests that employees need to be motivated to
perform to the best of their ability. Employees are most likely to be
motivated when they see a clear link between the effort they put in and the
reward that they receive. Rewards must be seen as fair and equitable in
order to inspire employees to work hard. Managers can motivate
employees by setting realistic, achievable goals and measuring attainment.
Achievement of these goals should be rewarded, either through recognition
from the manager or financially.
Studies have shown that both Personal and Situational factors predict work
motivation across cultures.
Culture and Personal Motives
There is some evidence that motives such as self-efficacy, need for
achievement, and intrinsic needs for competence are universal. Yet the
specific factors that drive such motives vary across cultures. Earley et al.
(1999) showed that personal feedback influences self-efficacy beliefs in
individualistic cultures, whereas group feedback also influences selfefficacy beliefs in collectivistic cultures. Likewise, while the need for control
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seems to be universal, personal control is critical in individualistic cultures,
and collective control is more critical in collectivistic cultures. Although
some researchers have argued that achievement motivation is stronger in
individualistic than in collectivistic cultures, the meaning of it varies across
cultures. Collectivists believe that positive outcomes result from collective
efforts, and not only from individual efforts (Niles, 1998).
Culture also affects performance and learning motivational orientations. In
Confucian philosophy, there is an emphasis on the need to perfect oneself,
and as a result, in the Chinese culture, learning appears more fundamental
than achievement per se (Li, 2002). Learning and performance orientation
were highly correlated and both were associated with performance among
Hong Kong students, whereas they were more distinct among American
students (Lee et al., 2003).
Culture and Goals
Several studies suggest that elements of goal setting theory do not
necessarily generalize across cultures. Kurman (2001) found that in
collectivistic and high-power-distance cultures, choosing achievable
moderate goals was more highly motivating than choosing difficult goals.
Sue-Chan & Ong (2002) found that power distance moderated the effect of
assigned versus participative goal setting on goal commitment and
performance, with higher commitment and performance for assigned goals
in high – rather than low power-distance cultures. Self-efficacy mediated
the goal-assignment commitment, and performance relationships only in
low-power distance cultures.
Culture and Feedback
Feedback giving and feedback seeking are theorized to vary across
cultures. For example, Morrison et al. (2004) showed that individuals from
the United States reported more newcomer feedback seeking than did
individuals from Hong Kong, which was related to cultural differences in
assertiveness and power distance. Culture also influences the effect of
feedback sign on behavior. Positive feedback is universally perceived to be
of higher quality than negative feedback, and even more so in collectivistic
cultures (e.g., Van de Vliert et al., 2004). Japanese had stronger emotional
reactions to negative feedback (Kurman et al., 2003), yet were more
responsive to it than are Americans, who tended to engage in
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compensatory self-enhancement (Brockner & Chen 1996, Heine et al.,
2001, Kitayama et al., 1997).
Van de Vliert et al., (2004) also showed that the target of the feedback
matters: Individual versus group performance induced more positive
evaluations from individualists and collectivists, respectively. Little
research, however, has been done on feedback in intercultural settings.
Matsumoto (2004) found that Japanese managers provide implicit and
informal feedback, which caused frustration among Americans.
Culture and Rewards
Cultural values shape the preferences for organizational rewards and their
implementation across cultures (Erez & Earley 1993). Good pay and
bonuses were the most preferred rewards for students in Chile and China,
whereas promotion and interesting work were the most preferred rewards
for American students, which may be attributable to cultural and economic
conditions (Corney & Richards, 2005, King & Bu, 2005). Regardless of the
strength of money as a motivator, work appears to be valued beyond just
monetary rewards in developing as well as developed countries (Adigun,
1997).
At a more macro level, cultures differ in their dominant reward systems.
Brown & Reich (1997) showed that U.S. firms implemented payment-byresult systems, congruent with individualistic values, whereas Japanese
firms endorsed seniority-based pay systems, congruent with respect for
seniority. Tosi & Greckhamer (2004) found that CEO pay was related to
power distance. Group-based profit sharing and saving plans are effective
motivators for reducing turnover rates in maquiladoras—American-owned
plants in Mexico—as they fit with the strong collectivistic Mexican culture
(Miller et al., 2001). Culture affects incentives in multinationals, with
higher incentives in subsidiaries that are culturally close to the
headquarters (Roth & O’Donnell, 1996).
4.2 Expatriate Performance Appraisal : Problems
Several problems are inherent to appraising an expatriate's performance.
First, an examination of those who evaluate an expatriate's job
performance is relevant. Those evaluators include the host national
management and often the home office management.
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1. Host national management's perceptions of actual job
performance
That local management evaluates the expatriate is probably necessary;
however, such a process sometimes is problematic. Local management
typically evaluates the expatriate's performance from its own cultural
frame of reference and set of expectations. For example, one American
expatriate manager used participative decision making in India but was
thought of by local workers as rather incompetent because of the Indian
notion that managers, partly owing to their social class level, are seen as
the experts. Therefore, a manager should not have to ask subordinates for
ideas. Being seen as incompetent negatively affected local management's
review of this expatriate's performance, and he was denied a promotion on
return to the United States. Local management's appraisal is not the only
potential problem, however. In fact, based on research with expatriates,
local management's evaluation is usually perceived as being more accurate
than that of the home office.
2. H o m e o f f i c e m a n a g e m e n t ' s p e r c e p t i o n s o f a c t u a l j o b
performance
Because the home office management is geographically distanced from the
expatriate, it is often not fully aware of what is happening overseas. As a
result, for middle and upper management, home office management will
often use a different set of variables than those used by local management.
Typically, more visible performance criteria are used to measure the
expatriate's success (for example, profits, market share, productivity
levels). Such measures ignore other, less visible variables that in reality
drastically affect the company's performance. Local events such as strikes,
devaluation of the currency, political instability, and runaway inflation are
examples of phenomena that are beyond the control of the expatriate and
are sometimes "invisible" to the home office.
One expatriate executive mentioned in a study by Mendenhall & Odou that
in Chile he had almost single-handedly stopped a strike that would have
shut down their factory completely for months and worsened relations
between the Chileans and the parent company in the United States. In a
land where strikes are commonplace, such an accomplishment was quite a
coup, especially for an American. The numerous meetings and talks with
labor representatives, government officials, and local management
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required an acute understanding of their culture and sensitivity beyond the
ability of most people. However, because of exchange rate fluctuations with
its primary trading partners in South America, the demand for their ore
temporarily decreased by 30 per cent during the expatriate's tenure.
Rather than applauding the efforts this expatriate executive made to avert
a strike and recognizing the superb negotiation skills he demonstrated, the
home office saw the expatriate as being only somewhat better than a
mediocre performer. In other words, because for home office management
the most visible criterion of the expatriate's performance was somewhat
negative (sales figures), it was assumed that he had not performed
adequately. And though the expatriate's boss knew a strike had been
averted, the bottom-line concern for sales (dollars) overshadowed any
other significant accomplishments.
3. Management ethnocentricity
In a 1981 Korn/Ferry survey, 69 per cent of the managers reported they
felt isolated from domestic operations and their U.S. managers. Mendenhall
& Oddou state that it is clear from their research that most U.S. senior
management does not understand the value of an international assignment
or try to utilize the expatriate's skills gained abroad when they return to
the home office. The underlying problem seems to be top management's
ethnocentricity.
Two of the most significant aspects of management's inability to
understand the expatriate's experience, value it, and thereby, more
accurately measure his or her performance are:
(a)The communication gap between the expatriate and the home office:
Being physically separated by thousands of miles and in different time
zones poses distinct problems of communication. Not only does the
expatriate have difficulty talking directly with his manager, but usually
both the home country manager and the expatriate executive have
plenty of other responsibilities to attend to. Most of the expatriates in
the research indicated they had very irregular contact with their home
office and that often it was not with their immediate superior. Rarely did
the boss initiate direct contact with the expatriate more than once or
twice a year.
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(b)The lack of domestic management's international experience: The old
Indian expression "To walk a mile in another man's moccassins" has
direct meaning here. How can one understand what another person's
overseas managerial experience is like – its difficulties, challenges,
stresses, and the like–without having lived and worked overseas
oneself? According to one study, more than two-thirds of upper
management in corporations had never had an international
assignment. If they have not lived or worked overseas, and if the
expatriate and home country manager are not communicating regularly
about the assignment, the home country manager cannot evaluate the
expatriate's performance appropriately.
4.3 Factors affecting Expatriate Job Performance
As repeatedly mentioned by the expatriates in research, the primary
factors relating to the expatriate's actual job performance include his or
her technical job know-how, personal adjustment to the culture and
various environmental factors.
1. Technical job know-how
As with all jobs, one's success overseas partly depends on one's expertise
in the technical area of the job. Research by Mendenhall & Oddou indicates
that approximately 95 per cent of the expatriates believe that technical
competency is crucial to successful job performance. Although common
sense supports this notion, research shows that technical competence is
not sufficient in itself for successful job performance. For example, an
engineer who is an expert in his or her field and who tends to ignore
cultural variables that are important to job performance will likely be
ineffective. He or she might be less flexible with local personnel, policies,
and practices because of his or her reliance on technical know-how or
because of differences in cultural views. As a result, the host nationals
might become alienated by the expatriate's style and become quite
resistant to his or her objectives and strategies. A less experienced
engineer, with less technical competence, might be more willing to defer to
the host country's employees and their procedures and customs. A shade
of humility is always more likely to breed flexibility, and in the long run, the
less experienced engineer might develop the trust of the foreign employees
and might well be more effective than the experienced engineer. One
expatriate who represented a large construction firm was sent to a work-
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site in India. The expatriate was an expert in his field and operated in the
same fashion as he did in the United States. He unintentionally ignored
local work customs and became an object of hatred and distrust. The
project was delayed for more than six months because of his behavior.
2. Adjustment to new culture
Just as important as the expatriate's technical expertise is his or her ability
to adapt to the foreign environment, enabling him or her to deal with the
indigenous people. Nearly every expatriate in the survey by Mendenhall &
Oddou felt understanding the foreign culture, having an ability to
communicate with the foreign nationals, and being able to reduce stress
were as – if not more – important to successful job performance than was
technical competence. Regardless of how much an expatriate knows, if he
or she is unable to communicate with and understand the host nationals,
the work will not get done.
An expatriate's adjustment overseas is also related to at least two personal
variables:
(1)one's marital and family status (that is, whether accompanied by a
spouse and children) and
(2)the executive's own personal and the family's predisposition to
acculturation. Research clearly indicates that expatriates who have their
family abroad are often less successful because of the stress on the
family of being in a foreign environment. The stress on the spouse
negatively affects the employee's concentration and job performance.
With an increasing number of dual-career couples being affected by
expatriation, the problems are even keener. A number of expatriates
reported that their formerly career-positioned spouse suffered from
depression most of the time they were overseas. Moving from
experiencing the dynamics of a challenging career to having no
business-world activity and being unable to communicate the most basic
needs is a gruelling transition for many career-oriented spouses.
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3. Company variables
The thoroughness of the company's expatriate selection method and the
type and degree of cross-cultural training will affect expatriate adjustment
and performance. In other words, if the firm is not selective about the
personality of the expatriate or does not appropriately prepare the
employee and dependents, the firm may be building in failure before the
manager ever leaves the home country.
All these factors influence the expatriate's learning curve in a foreign
business environment. More time is thus required to learn the ins and outs
of the job than for the expatriate's domestic counterpart who might have
just taken a comparable position stateside. In fact, most expatriates say it
takes three to six months to even begin to perform at the same level as in
the domestic operation. Hence, performance evaluations at the company's
normal time interval may be too early to accurately and fairly reflect the
expatriate's performance.
In summary, an expatriate's performance is based on overseas adjustment,
his or her technical know-how, and various relevant environmental factors.
Actual performance, however, is evaluated in terms of perceived
performance, which is based on a set of fairly complex variables usually
below the evaluator's level of awareness. Much of the perceived
performance concerns perceptions of the expatriate and his or her
situation. Depending on whether the manager assessing the expatriate's
performance has had personal overseas experience or is otherwise
sensitive to problems associated with overseas work, the performance
appraisal will be more or less valid. The bottom line for the expatriate is
that the performance appraisal will influence the promotion potential and
type of position the expatriate receives on returning to the home country.
Because expatriates generally return from their experience with valuable
managerial skills, especially for firms pursuing an international or global
market path, it is the organization’s prerogative to carefully review their
process of appraising expatriates and the evaluation criteria themselves.
4.4 Solutions to better Expat Performance Management
Human resources departments can do a couple of things to help guide the
evaluator's perspective on the evaluation.
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A basic breakdown of the difficulty level of the assignment should be done
to properly evaluate the expatriate's performance. For example, working in
Japan is generally considered more difficult than working in England or
English-speaking Canada. The learning curve in Japan will take longer
because of the very different ways business is conducted, the language
barrier that exists, and the isolation that most Americans feel within the
Japanese culture. Major variables such as the following should be
considered when determining the difficulty level of the assignment:
•
Operational language used in the firm
•
Cultural "distance," based often on the region of the world (for example,
Western Europe, Middle East, Asia)
•
Stability of the factors affecting the expatriate's performance (for
example, labor force, exchange rate)
Many foreigners speak English, but their proficiency does not always allow
them to speak effectively or comfortably, so they rely on their native
language when possible. In addition, they usually do not speak English
among themselves because it is not natural. In Germany, for example, one
expatriate said that while relying on English allowed a minimum level of
work to be performed, the fact that he did not speak German limited his
effectiveness. Secretaries, for example, had very limited English-speaking
skills. German workers rarely spoke English together and therefore,
unknowingly excluded the expatriate from casual and often work-related
conversations. And outside work, he had to spend three to four times the
amount of time to accomplish the same things that he did easily in the
United States. Most of the problem was because he could not speak good
enough German, and many of the Germans could not speak good enough
English.
Although sharing the same language facilitates effective communication, it
is only the surface level of communication. More deep-rooted, culturalbased phenomena can more seriously affect an expatriate's performance.
Rather than having the manager try to subjectively build the difficulty level
of the assignment into his or her performance appraisal, human resources
could have a built-in, numerical difficulty factor that is multiplied times the
quantity obtained by the normal evaluation process (for example,
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somewhat more difficult = x 1.2; more difficult = x 1.4; much more
difficult = x 1.6).
Evaluator: Trying to Objectify the Evaluation
Several things can be done to try to make the evaluator's estimation more
objective:
1. Most expatriates agree that it makes more sense to weight the
evaluation based more on the on-site manager's appraisal than the
home-site manager's notions of the employee's performance. This is the
individual who has been actually working with the expatriate and who
has more information to use in the evaluation. Having the on-site
manager evaluate the expatriate is especially valid when the on-site
manager is of the same nationality as the expatriate. This helps avoid
culturally biased interpretations of the expatriate's performance.
2. In reality, however, currently the home-site manager usually performs
the actual written performance evaluation after the on-site manager has
given some input. When this is the case, a former expatriate from the
same location should be involved in the appraisal process. This should
occur particularly with evaluation dimensions where the manager is
trying to evaluate the individual against criteria with which he or she is
unfamiliar relative to the overseas site. For example, in South America
the dynamics of the workplace can be considerably different from those
of the United States. Where stability characterizes the United States,
instability often characterizes much of Latin America. Labor unrest,
political upheavals, different labor laws, and other elements all serve to
modify the actual effects a supervisor can have on the productivity of
the labor force in a company in Latin America. A manager who has not
personally experienced these frustrations will not be able to evaluate an
expatriate's productivity accurately. In short, if production is down while
the expatriate is the supervisor, the American boss tends to believe it is
because the supervisor was not effective.
3. On the other hand, when it is a foreign, on-site manager who is making
the written, formal evaluation, expatriates agree that the home-site
manager should be consulted before the on-site manager completes a
formal terminal evaluation. This makes sense because consulting the
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home-site manager can balance an otherwise hostile evaluation caused
by an intercultural misunderstanding.
Performance Criteria
Here again, special consideration needs to be given to the expatriate's
experience. Expatriates are not only performing a specific function, as they
would in their domestic operation, they are also broadening their
understanding of their firm's total operations and the inherent
interdependencies thereof. As a result, two recommendations are
suggested.
1. Modify the normal performance criteria of the evaluation sheet for that
particular position to fit the overseas position and site characteristics.
Using the Latin American example referred to before might serve to
illustrate this point. In most U.S. firms, maintaining positive
management-labor relations is not a primary performance evaluation
criterion. Stabilizing the workforce is not highly valued because the
workforce is already usually a stable entity. Instead, productivity in
terms of number of units produced is a highly valued outcome. As such,
motivating the workforce to work faster and harder is important. In
Chile, however, the workforce is not so stable as it is in the United
States. Stability is related to constant production – not necessarily to
increasing production – and a stable production amount can be crucial
to maintaining market share. In this case, if an expatriate is able to
maintain positive management-labor relations such that the workforce
goes on strike only two times instead of twenty-five times, the
expatriate should be rewarded commensurately. In other words, while
the expatriate's U.S. counterpart might be rated primarily on increases
in production, the expatriate in Chile should be rated on stability of
production.
How can such modifications in the normal performance criteria be
determined? Ideally, returned expatriates who worked at the same site
or in the same country should be involved in developing the appropriate
criteria or ranking of the performance criteria or both. Only they have
first-hand experience of what the possibilities and constraints are like at
that site. This developmental cycle should occur approximately every
five years, depending on the stability of the site – its culture, personnel,
and business cycles. Reevaluating the criteria and their prioritization
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periodically will make sure the performance evaluation criteria remain
current with the reality of the overseas situation. If expatriate
availability is a problem, outside consultants who specialize in
international human resource management issues can be hired to help
create country-specific performance evaluation forms and criteria.
2. Include an expatriate's insights as part of the evaluation. "Soft" criteria
are difficult to measure and therefore, legally difficult to support.
Nevertheless, every attempt should be made to give the expatriate
credit for relevant insights into the interdependencies of the domestic
and foreign operations. For example, if an expatriate learns that the
reason the firm's plant in India needs supplies by certain dates is to
accommodate cultural norms – or even local laws – such information
can be invaluable. Previously, no one at the domestic site understood
why the plant in India always seemed to have such odd or erratic
demands about delivery dates. And no one in India bothered to think
that their U.S. supplier didn't operate the same way. If delivering
supplies by specific dates asked for by their India colleagues ensures
smoother production or increased sales and profits for the Indian
operation, and if the expatriate is a critical link in the communication
gap between the United States and India, the expatriate should be
given credit for such insights. This should be reflected in his or her
performance review.
To obtain this kind of information, either human resource or operational
personnel should formally have a debriefing session with the expatriate on
his or her return. It should be in an informal interview format so that
specific and open-ended questions can be asked. Questions specific to the
technical nature of the expatriate's work that relate to the firm's
interdependencies should be asked. General questions concerning
observations about the relationship between the two operations should also
be included.
There is another, even more effective way this aspect of performance
review can be handled. At regular intervals, say, every three to six months,
the expatriate could be questioned by human resource or operational
personnel in the domestic site about how the two operations might better
work together. Doing it this way helps maximize the possibility of noting all
relevant insights.
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Fun Exercise: Caselet
Source: www.shrm.org
Brunt Hotels, PLC, owns more than 60 hotels throughout the United
Kingdom. They recently acquired a small hotel chain headquartered in
France. Brunt’s chief executive decided that half of the new hotels in
France would be retained and rebranded as part of the Brunt Hotels
Group; the other half will be sold. This will support Brunt’s strategic
objective of growing the organization slowly to make sure that new
ventures are well supported and opened on time and on budget Brunt’s
hotels are considered budget accommodations; they are functional, clean
and reasonably priced.
Most guests stay for one to three nights and are a combination of
business and leisure travellers. The hotels are typically situated in
downtown locations that are easily accessible by mass transit. Tourists
are attracted to these hotels in popular visitor destinations where the
many local attractions mean that they will not be spending much time in
their hotel rooms.
The organization has decided to use an ethnocentric approach and send
some of their existing UK-based managers to France to lead the
changeover of the new hotels and then manage them after they re-open.
If this new overseas venture is successful, Brunt may decide to acquire
other small hotel groups in other European countries. The organization
would like to own 150 hotels in the next five years. Their 10-year plan is
to own 300 hotels across Europe. This is an ambitious target, so it is
important that the organization finds an effective formula to operate
successfully in other countries.
The organization has never owned any hotels outside the UK before, and
has hired a team of independent management consultants to advise them
on how to proceed. They provided the consultants the following
information during their initial meeting:
•
A majority of their existing managers said they would like a chance to
work abroad.
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•
None of their existing managers speak French fluently.
•
They will allow four weeks to rebrand the hotels. The new hotels must
be ready to open after that time.
•
They expect to recruit a large number of staff for the new French
hotels, because more than 70 per cent of the employees from the
acquired organization left.
•
They will require their managers to be flexible and move between
countries if any problems arise.
Divide the class in groups of 4-5 consultants and decide the best method
of performance management for expatriate staff. Provide as many details
as possible.
Students should address the following issues:
•
Whether the performance management process will be carried out by
managers in the
host country or home country (and why)?
•
Who will provide the performance management criteria?
•
Whether the criteria will be different from domestic managers (and
why)?
•
How the issue of cultural intelligence and cultural adaptability will be
incorporated?
•
How often it should take place?
•
What sort of evidence will be used?
•
Whether there should be incentives for successful performance
reviews?
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4.5 Summary
1. There is some evidence that motives such as self-efficacy, need for
achievement, and intrinsic needs for competence are universal. Yet the
specific factors that drive such motives vary across cultures.
2. Several studies suggest that elements of goal setting theory do not
necessarily generalize across cultures.
3. Feedback giving and feedback seeking are theorized to vary across
cultures.
4. Cultural values shape the preferences for organizational rewards and
their implementation across cultures.
5. Several problems are inherent to appraising an expatriate's performance
like - Local management typically evaluates the expatriate's
performance from its own cultural frame of reference and set of
expectations and because the home office management is
geographically distanced from the expatriate, it is often not fully aware
of what is happening overseas.
6. Two of the most significant aspects of management's inability to
understand the expatriate's experience, value it, and thereby more
accurately measure his or her performance are – The communication
gap between the expatriate and the home office and the lack of
domestic management's international experience.
7. Primary factors relating to the expatriate's actual job performance
include his or her technical job know-how, personal adjustment to the
culture, and various environmental factors like thoroughness of the
company’s expat selection process and type of cross cultural training
8. Human resources departments can do a couple of things to help guide
the evaluator's perspective on the evaluation – a basic breakdown of the
difficulty level of the assignment should be done to properly evaluate
the expatriate's performance, make the evaluator's estimation more
objective, Modify the normal performance criteria of the evaluation
sheet for that particular position to fit the overseas position and site
characteristics and Include an expatriate's insights as part of the
evaluation.
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4.6 Self Assessment Questions
1. Culture impacts the following aspects of performance:
(a)Personal motives, Goals, Feedback and Rewards
(b)Personality traits, Goals, Feedback and Rewards
(c)Personal motives, Appraisal Methodology, Feedback and Rewards
(d)Personal motives, Goals, Feedback and Recognition strategy
2. The problem in appraising expat performance is:
(a)Local/host management does not have the tools to appraise the
expat
(b)Local/host management evaluates the expat from their own frame of
reference
(c)Local/host management may not be trained to appraise an expat
(d)Local/host management appraisal format may be different
3. Expat job performance is affected by Company Variables such as:
(a)Size and location
(b)Expat selection and training methodology
(c)Industry and business environment
(d)Profits
4. To determine the difficulty level of an assignment, HR must keep in
mind:
(a)Operational language of the firm
(b)Expat language
(c)Host Country language
(d)Home Country language
5. HR must also keep in mind that the Performance Criteria must:
(a)Be standard for all expats across geographies
(b)Be standard for all employees across the MNC
(c)Be modified to fit the particular position and site characteristics
(d)None of the above
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6. Expat adjustment to new culture depends on:
(a)How well one learns the host culture’s language
(b)The effectiveness of the cross cultural training
(c)One’s experience as an expat
(d)One’s marital and family status and one’s predisposition to
acculturation
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