International Human Resource Management Chapter 7 IBUS 681

International Human Resource Management Chapter 7 IBUS 681, Dr. Yang 10 -1

Learning Objectives Define international human resource management (IHRM) Understand how corporate strategy influences IHRM IBUS 681, Dr. Yang 10 -2

Learning Objectives (cont. ) Explain major IHRM functions: recruitment and selection, training and development, performance evaluation, compensation and benefits, and labor relations Discuss additional concerns of managing expatriate employees IBUS 681, Dr. Yang 10 -3

Major HRM Functions Staffing Recruiting and selection Training and development Compensation and benefits Employee motivation Performance evaluation Labor relations

Major Areas of International Human Resource Management of human resources in global corporations Management of expatriate employees Comparison of human resource management (HRM) practices in a variety of different countries IBUS 681, Dr. Yang 10 -4

Approaches to Managing and Staffing Subsidiaries Ethnocentric Polycentric Regiocentric Geocentric/Global IBUS 681, Dr. Yang 10 -5

Choosing an Approach to IHRM Corporate international strategy Political and legal concerns Level of development in foreign locations Technology and the nature of the product Organizational life cycle Cultural differences IBUS 681, Dr. Yang 10 -6

Recruitment and Selection Employee classification Parent country national (PCN) Host country national (HCN) Third country national (TCN) Managing and staffing approaches Selecting the right candidate IBUS 681, Dr. Yang 10 -7

Training and Development Planned individual learning, organization development, and career development Delivery of programs worldwide Developing globally minded managers IBUS 681, Dr. Yang 10 -9

Cultural Impacts on Training and Development Practices Human resource development roles Analysis and design Development and delivery Administration and environment

Cross-Cultural Training Methods § Cultural Briefings Explain the major aspects of the host country culture, including customs, traditions, every day behaviors. § Area Briefings § Cases Explain the history, geography, economy, politics, and other general information about the host country and region. Portray a real-life situation in business or personal life to illustrate some aspect of living or working in the host culture. IBUS 681, Dr. Yang 10 -12

Cross-Cultural Training Methods (cont. ) § Role Playing Allows the trainee to act out a situation that he or she might face in living or working in the host country. § Culture Assimilator Provides a written set of situations that the trainee might encounter in living or working in the host country. Trainee selects one from a set of responses to the situation and is given feedback as to whether it is appropriate and why. § Field Experiences Provide an opportunity for the trainee to go to the host country or another unfamiliar culture to experience living and working for a short time. IBUS 681, Dr. Yang 10 -13

How Situational Factors Influence the Selection of a CCT Method Degree of Culture Novelty High EXPERIENTIAL Low Simulations Field Trips High Degree of s Role Plays od Interactive Language Training h et Rigor M ANALYTICAL g Sensitivity Training n ni Culture Assimilators i ra T Case Studies Degree Classroom Language Training of Job Films Novelty FACTUAL Books Lectures Area Briefings Low High Low Degree of Interaction with Host Country Nationals IBUS 681, Dr. Yang 10 -14

Selection of Expatriates Technical competence Adaptability Communication skills Family stability Gender Age Ethnicity IBUS 681, Dr. Yang 10 -11

Expatriate Failure Rates U. S. : 10 -40% Western Europe: 5 -15% Japan: Less than 5%

Managing Expatriates Expatriate training Cross-cultural adjustment Expatriate evaluation Expatriate compensation Reentry adjustment

Retaining the Expatriates 80% believe they would be promoted About 23% get the promotion 20% want to leave the company upon return Average turnover cost is $250, 000

Expatriate Reentry Minimize “reverse cultural shock” Integrate the manager back into the home office Adjustments to a new or lower standard of living Allow for reentry time

Performance Evaluation Purpose Timeframe Standards Feedback Market conditions Economic factors

Compensation and Benefits Salary-related and non-salary related factors Organizational philosophy and strategy Cost to the organization Employee motivation Company image

Typical Expatriate Benefits Overseas premium Housing allowance Cost of living allowance (COLA) Moving expenses Tuition for dependent education Home leave Tax reimbursement plans IBUS 681, Dr. Yang 10 -16

Labor Relations Labor relations function Identify and define roles of management and workers in the workplace Collective bargaining Union organizations Union membership Labor law

Union Density Figures for a Selected Group of Countries Country Argentina Brazil Percentage of Union Membership 28% 13 -30% Country Percentage of Union Membership Greece 30% Italy 15% Canada 29. 5% Japan Chile 12. 3% Malaysia China 92% Mexico Costa Rica 15% New Zealand Egypt 50% Span France 8 -10% United States Germany 39. 5% Zimbabwe 24. 2% 9. 1% 25 -30% 34. 4% 11% 15. 8% 17% Source: U. S. Department of Labor, Bureau of International Labor Affairs, Foreign Labor Trends and Bureau of Labor Statistics, dates as indicated in the table.

Convergence or Divergence? Large corporations’ preference for consistent worldwide systems Smaller companies’ desire for more professional systems Need to follow local HRM laws Development of unique techniques and practices to suit local cultural and legal requirements IBUS 681, Dr. Yang 10 -17

Implications for Managers Every international manager has responsibility for effectively managing human resources, and therefore, must understand IHRM functions It is helpful to understand IHRM because of potential impact on your career IBUS 681, Dr. Yang 10 -18