ihrm i module
TRANSCRIPT
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INTERNATIONAL HUMAN RESOURCE
MANAGEMENT
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COMPONENTS OF HRMCOMPONENTS OF HRM
Recruitment
Selection
Training & Development Performance Appraisal
Compensation
Labor Relations
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INTERNATIONAL HRM (IHRMINTERNATIONAL HRM (IHRM))
Basic HRM issues remain
Must choose a mixture of international
employees How much to adapt to local conditions?
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EMPLOYEES IN MULTINATIONALEMPLOYEES IN MULTINATIONALORGANIZATIONSORGANIZATIONS
Host country nationals(HCN)
Expatriates
Parent country nationals(PCN)
Third country nationals(TCN)
Inpatriates
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Dimensions of IHRM
1. Human resource activities
2. countries
3. type of employeeHR activities: procure, allocate, utilize
Eg., nokia, skoda, dabur
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Definition
It is the interlink between 3 dimensions like HR
activities, types of employees and countries of
operation
IHRM addresses the complexity that results
from recruiting, selecting, developing and
maintaining a diverse workforce on a global
scale
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Approaches to IHRM
Cross cultural management
IHRM in multinational context
Comparative HR & IR systemsExpatriate: are PCN, go to work in HCN/TCN
An expatriate is an employee, who is working
and temporarily residing in a foreign country.Some firms call them as international
assignees.
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Inpatriate: the transfer of subsidiary staff into
parent country(head quarter operations)
Also an expatriate
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Difference between domestic &
international HRM
More HR activities
The need for a broader prospective
More involvement in employee personal life
Changes in emphasis as the workforce mix of
expatriates and local varies
Risk exposure
Broader external influence
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1. More HR activities
Ensure no tax incentives Arranging for pre-departure training
2. Need for a broader prospective
Foreign service or expatriate premiums
3. More involvement in employee personal life
Housing, health care, cost of living allowances,
bank transactions handling, investmentshandling
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4. change in emphasis as the workforce mix of
expatriates and local varies
5. Risk exposure
Terrorism, 9/11 incident, premature return from
the work, troublesome political climate,
broader external influences
Type of government, economy state, practices of
doing business in the host countries, hiringprocedure conformity to quotas, labour laws,
tax, health & safety
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Models of HRM
1. Matching model:
2. Highlights the resource aspect of HRM
3. Emphasises the efficient utilization of humanresources to meet organizational objectives
4. Right fit between organizational strategy,
organization structure & HRM systemsAlso called as hard model of IHRM
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Harward model: stresses the human soft
aspect of HRM
Concerned with employee and employer
relationship
Highlights the interests of differentstakeholders in the organization and how their
interests are related to management
objectivesAlso called as soft model of IHRM
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3. Contextual model
Based on the premise that organizations may followa number of different pathways inorder toachieve the same results
Because of linkage between external and internallinkages of an organizations HRM
4. 5 p model
Pholosophies
Policies
ProgrammesPractices
Processes with strategic needs
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5. European model:
Based on the argument that european
organizations are constrained at both
international and national level by national
culture and legislationAt organization level by culture , pattern of
ownership
At trade union level by trade union involvement& consultative arrangements
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Internationalizational of HRM
Socio-cultural context
Nations culture:
Sweedan : people here pocesses the strongcollectivist culture which prohibits
development of more individualistic
orientation to employment relationships
Dutch: culture is more faminine and encourages
the antipathy of Dutch employees
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Germany: the culture is dominated by strongrole of unions and the formal consultative
structure between employers and employees
France; the culture hinders the decentralizationUk: changed the name of personnel
management to the HR
Iran: people are from military, retired from theirwork
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Broad employee management issues
1. Management style
Participative
Consultative
Paternalistic
Autocratic
2. Authoritative structure
Decentralised
centralised
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Organization structure
Leadership style
Employee relationship with the company
Specific HRM issues
Staffing, policies, recruitment & selection, T&D
performance appraisal, promotion,
retirement, layoff, industrial relations, foreign
assignments
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Major cultural attitudes & values
which influence the soft aspects of
organization Attitude to power & authority
Tolerance for ambiguity & resistance
Risk taking
Individualism, self-orientation
Collectivism, group orientation
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Acceptance of responsibility
Interpersonal trust
Attitude to other people opinion
Attitude to sharing information by knowledge
with others
Preference for some leadership behavior
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Preference for independence & autonomy
Self-confidence, self-reliance
Achievement orientation
Attitude to conflict & harmony
Work ethic & honesty
Attitude to nature of human beings
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Role of culture in IHRM Selection & recruitment
UK: high professionalism, formal procedure to
selection
Middle east/ African: informal networks orrelatives, friends
Japan: recruit someone with broad educational
qualification & years of cross functionaltraining
US: based on specialization, with or without
training
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Britain: recruitment broadly fit the job basics
& are then trained to perform that job
properly
Developing nations: apprenticeship is the
major channel of new recruitment
France: medium & large size cos are required
by law to spend a certain % of their annual
turnover on employment training
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Performance appraisal, reward &
promotion policies Middle east loyalty to superiors
Western quality & quantity output
Collectivist team based performance
Individualistic individual performance
White collar setting targets, goals reports
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Blue collar objectives criteria, measurable
French promotion on seniority or group
loyalty criteria English staff reduction decision on the
performance to salary ratio
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Challenges of IHRM
High failure rates of expatriation &
repatriation
Deployment: getting the right means of skills
in the organization regardless of geographicallocation
Knowledge & innovation dissemination
Talent identification & development Barriers to women in IHRM
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International ethics
Language
Different labour laws
Different political climate
Different stages of technological advancement
Different values & attitudes
Roles of religion
Educational level attained
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MULTINATIONAL MANAGERSMULTINATIONAL MANAGERS
Host country or expatriate?
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USING HOST COUNTRYUSING HOST COUNTRY
MANAGERSMANAGERS
Do they have the expertise for the position?
Can we recruit them from outside the
company?
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USING EXPATRIATE MANAGERSUSING EXPATRIATE MANAGERS
Do parent country managers have the
appropriate skills?
Are they willing to take expatriate
assignments?
Do any laws affect the assignment of
expatriate managers?
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IS THE EXPATRIATE WORTH IT?IS THE EXPATRIATE WORTH IT?
High cost
High failure rate
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EXHIBIT 11.1 PAYING FOR THE
EXPATRIATE MANAGER
0
50000
100000
150000
200000
250000
300000
350000
400000
$
Home
Salary
Hong
Kong
Taipei
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REASONS FOR U.S. EXPATRIATEREASONS FOR U.S. EXPATRIATE
FAILUREFAILURE
Spouse fails to adapt
Manager fails to adapt
Other problems within the family
Personality of the manager
Level of responsibilities
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Reasons for expatriate failure,Reasons for expatriate failure,
continuedcontinued Lack of technical proficiency
No motivation for assignment
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MOTIVATIONS TO USE EXPATSMOTIVATIONS TO USE EXPATS
Managers acquire international skills
Coordinate and control operations dispersedactivities
Communication of local needs/strategicinformation to headquarters
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KEY EXPATRIATE SUCCESS FACTORSKEY EXPATRIATE SUCCESS FACTORS
Professional/technical competence
Relational abilities Motivation
Family situation
Language skills Willingness to accept position
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PRIORITY OF SUCCESS FACTORSPRIORITY OF SUCCESS FACTORS
Depends on :
assignment length
cultural distance
amount of required interaction with local people
job complexity/responsibility
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RIGOR OF THE CROSSRIGOR OF THE CROSS-- CULTURALCULTURAL
TRAINING GROWSTRAINING GROWS
exhibit 11.4 shows various trainingexhibit 11.4 shows various trainingtechniques and their objectives as thetechniques and their objectives as the
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Techniques: Field trips to
host country,meetings
withmanagersexperiencedinhost country,meetings
withhost country
nationals,intensive
language training.
Objectives: Develop
comfort withhost countrynational culture, business
culture,andsocial
institutions.
HighTraining
Rigor
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Techniques:
Experientiallearningexercises,roleplaying,
simulations, case
studies,survival
language training.
Objectives: Generaland
specific knowledgeofhost country culture,
reduceethnocentrism.
Mid-
levelTraining
Rigor
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Techniques: Lectures,
videotapes,readingbackgroundmaterial.
Objectives: Provide
backgroundinformationon
host country businessand
national cultures, basic
informationon companyoperations.
Low
Training
Rigor
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CHALLENGES OF EXPATRIATECHALLENGES OF EXPATRIATE
PERFORMANCE APPRAISALPERFORMANCE APPRAISAL Unreliable data
Complex and volatile environments
Time differences and distance separation Local cultural situations
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STEPS TO IMPROVE THESTEPS TO IMPROVE THE
PROCESSPROCESS
1. Fit the evaluation criteria to strategy.
2. Fine tune the evaluation criteria
3.Use multiple evaluators with varying periodsof evaluation
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EXHIBIT 11.6 Shows several sources ofEXHIBIT 11.6 Shows several sources of
information a superior or the HRMinformation a superior or the HRM
professionals may use to evaluate anprofessionals may use to evaluate an
expatriate managersexpatriate managers
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Evaluation Sources Criteria Periods
Self evaluation Meeting objectivesManagement skills
Project successes
Six months and at thecompletion of a major
projectSubordinates Leadership skills
Communication skills
Subordinate development
After completion ofmajor project
Peer expatriate andhost country manages
Team buildingInterpersonal skills
Cross-cultural interactionskills
Six months
On-site supervisor Management skills
Leadership skillsMeeting objectives
At the completion of
significant projects
Customers and clients Service quality andtimelinessNegotiation skills
Cross-cultural interaction
skills
Yearly
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EXPATRIATE COMPENSATIONEXPATRIATE COMPENSATION
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THE BALANCE SHEET APPROACHTHE BALANCE SHEET APPROACH
Provides a compensation package that equates
purchasing power
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BALANCE SHEET COSTSBALANCE SHEET COSTS
Allowances for cost of living, housing,
utilities, furnishing, educational expenses,
medical expenses, club memberships, and car
and/or driver expenses
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Domestic
AssignmentExpenses and
Spendable
Income
Expatriate Assignment Expenses and Balanced
Spendable Income +Allowances
BaseSalary = BaseSalary
+Allowancesasanincentive to takeposition,
foreignservicepremium,hardshippay,R&R
Taxes = Taxes
+ Allowances to balanceextra taxpayments
GoodsandServices
= GoodsandServices
+
Allowances to covercost oflivingdifferences,
housing, childrenseducation,medical costs,
automobile,recreation,homeleave travel
Housing = Housing
+
Allowancesformovingexpenses,settlinginexpenses,initialhousing costs,andfurnishingallowances
Spendable
Income= Spendable Income
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OTHER APPROACHESOTHER APPROACHES
Parent country wages everywhere
Wean expatriates from allowances
Pay based on local or regional markets
Cafeteria selection of allowances
Global pay systems
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THE REPATRIATION PROBLEMTHE REPATRIATION PROBLEM
Difficult for many organizations
"Reverse culture shock"
Expatriates must relearn own national andorganizational culture
Includes whole family
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STRATEGIES FOR SUCCESSFULSTRATEGIES FOR SUCCESSFUL
REPATRIATION PROVIDE:REPATRIATION PROVIDE:
A strategic purpose for repatriation
A team to aid the expatriate
Home country information sources
Training and preparation for the return
Support for expatriate and family
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WOMEN EXPATRIATES: TWOWOMEN EXPATRIATES: TWO
IMPORTANT "MYTHS"IMPORTANT "MYTHS"
Myth 1: women do not wish to take international
assignments
Myth 2: women will fail in international
assignments because of the foreign culture's
prejudices against local women
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SUCCESSFUL WOMENSUCCESSFUL WOMEN
EXPATRIATESEXPATRIATES
Foreign not female
emphasize nationality not gender
The woman's advantage
strong in relational skills
wider range of interaction options
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MULTINATIONAL STRATEGY ANDMULTINATIONAL STRATEGY AND
IHRMIHRM
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IHRM ORIENTATIONSIHRM ORIENTATIONS
Ethnocentric
Polycentric
Regiocentric Global
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IHRM ORIENTATION ANDIHRM ORIENTATION AND
MULTINATIONAL STRATEGYMULTINATIONAL STRATEGY
Early stages of internationalization =ethnocentric IHRM
Multilocal strategies = ethnocentric or
regiocentric Regional strategy = closer to the global
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International strategy = ethnocentric or
polycentric IHRM
Transnational strategies = a global IHRM
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CONCLUSIONSCONCLUSIONS
HRM functions
IHRM challenges
Expatriate managers
The role of women in multinationalorganizations
Multinational strategies and IHRM
orientations