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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter International Dimensions of 13 
Human Resource 
Management 
Copyright © 2003 by The McGraw-Hill Companies, Inc. Al...
UUnnddeerrssttaannddiinngg tthhee TTeerrmmss 
Global corporation – a corporation that has become an “insider” in 
any mar...
UUnnddeerrssttaannddiinngg tthhee TTeerrmmss 
Home country – the expatriate’s country of residence 
Host country – the c...
The Framework ooff CCuullttuurraall UUnnddeerrssttaannddiinngg 
 Ten broad classifications help managers assess any cultu...
The Expatriate: RReeccrruuiittmmeenntt SSttrraatteeggiieess 
Copyright © 2003 by The McGraw-Hill Companies, Inc. All right...
The Expatriate: SSeelleeccttiioonn SSttrraatteeggiieess 
 Selection criteria: Seeing beyond technical qualifications 
Cop...
The Expatriate: SSeelleeccttiioonn SSttrraatteeggiieess 
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights re...
The Expatriate: OOrriieennttaattiioonn SSttrraatteeggiieess 
Copyright © 2003 by The McGraw-Hill Companies, Inc. All right...
The Expatriate: OOrriieennttaattiioonn SSttrraatteeggiieess 
 Three phases to orientation (continued) 
Copyright © 2003 b...
The Expatriate: TTrraaiinniinngg SSttrraatteeggiieess 
 Three areas of training provide skills to survive, cope, and succ...
OObbjjeeccttiivveess ffoorr aann EEffffeeccttiivvee 
IInntteerrnnaattiioonnaall CCoommppeennssaattiioonn PPoolliiccyy 
 A...
Types of Expatriate CCoommppeennssaattiioonn PPllaannss 
 Localization – practice of paying expatriates on the same scale...
Types of Expatriate CCoommppeennssaattiioonn PPllaannss 
 “Higher-of-home-or-host” – localizes expatriates in the host-co...
Types of Expatriate CCoommppeennssaattiioonn PPllaannss 
 Balance-sheet approach – the most common method used in North 
...
Components of IInntteerrnnaattiioonnaall 
CCoommppeennssaattiioonn PPaacckkaaggeess 
Copyright © 2003 by The McGraw-Hill C...
Components of IInntteerrnnaattiioonnaall 
CCoommppeennssaattiioonn PPaacckkaaggeess 
Copyright © 2003 by The McGraw-Hill C...
Special Issues iinn tthhee RReeppaattrriiaattiioonn 
ooff OOvveerrsseeaass EEmmppllooyyeeeess 
 Three elements contribute...
Special IIssssuueess iinn RReeppaattrriiaattiioonn 
ooff OOvveerrsseeaass EEmmppllooyyeeeess 
Copyright © 2003 by The McGr...
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International Dimension of Human Resource Management

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International Dimension of Human Resource Management

  1. 1. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
  2. 2. Chapter International Dimensions of 13 Human Resource Management Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
  3. 3. UUnnddeerrssttaannddiinngg tthhee TTeerrmmss Global corporation – a corporation that has become an “insider” in any market or nation where it operates and is thus competitive with domestic firms operating in local markets. Unlike domestic firms, however, the global corporation has a global strategic perspective and claims its legitimacy from its effective use of assets to serve its far-flung customers  Expatriate – also known as a foreign-service employee, is a generic term applied to anyone working outside her or his home country with a planned return to that or a third country Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
  4. 4. UUnnddeerrssttaannddiinngg tthhee TTeerrmmss Home country – the expatriate’s country of residence Host country – the country in which the expatriate is working  Third-country national – an expatriate who has transferred to an additional country while working abroad Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
  5. 5. The Framework ooff CCuullttuurraall UUnnddeerrssttaannddiinngg  Ten broad classifications help managers assess any culture and examine its people systematically  Sense of self and space  Dress and appearance  Food and eating habits  Communication, verbal and nonverbal  Time and time sense  Relationships  Values and norms  Beliefs and attitudes  Work motivation and practices  Mental processes and learning Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
  6. 6. The Expatriate: RReeccrruuiittmmeenntt SSttrraatteeggiieess Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  Recruitment: Three basic models  Ethnocentrism – selection from the national group of the parent company only  Recruitment from within the parent company’s country and the country where the branch is located  Geocentrism – adoption of an international perspective with emphasis on the unrestricted use of all nationalities
  7. 7. The Expatriate: SSeelleeccttiioonn SSttrraatteeggiieess  Selection criteria: Seeing beyond technical qualifications Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  Personality  Extroversion  Agreeableness  Emotional stability  Skills  Technical  Communication  Home- and host-country languages  Verbal and Nonverbal  Interpersonal relations  Stress management
  8. 8. The Expatriate: SSeelleeccttiioonn SSttrraatteeggiieess Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  Attitudes  Tolerant attitudes toward people who may differ significantly in race, creed, color, values, personal habits, and customs  Motivation  Eliminate those only looking to get out of their own country for a change of scenery  Behavior  Concern for other members of a group  Tolerance of ambiguity  Respect for people and customs different from one’s own  Nonjudgmental behavior
  9. 9. The Expatriate: OOrriieennttaattiioonn SSttrraatteeggiieess Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  Three phases to orientation  Initial Orientation  Cultural briefing – traditions, history, government, economy, living conditions, clothing, housing requirements, health requirements, visa applications  Assignment briefing – length of assignment, vacations, salary and allowances, tax consequences, repatriation policy  Relocation requirements – shipping, packing, or storage; home sale or rental; information about housing at the new location
  10. 10. The Expatriate: OOrriieennttaattiioonn SSttrraatteeggiieess  Three phases to orientation (continued) Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  Predeparture orientation  Introduction to the language  Further reinforcement of important values, especially open-mindedness  En route, emergency, and arrival information  Post-arrival orientation  Orientation toward the environment  Orientation toward the work unit and fellow employees  Orientation to the actual job
  11. 11. The Expatriate: TTrraaiinniinngg SSttrraatteeggiieess  Three areas of training provide skills to survive, cope, and succeed: Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  Culture  Language  Day-to-day matters  Culture shock – usually occurs 4-6 months after arrival  Symptoms – homesickness, boredom, withdrawal, a need for excessive amounts of sleep, compulsive eating or drinking, irritability, exaggerated cleanliness, marital stress, family tension, conflict (involving children), hostility toward host-country nationals, loss of ability to work effectively, physical ailments of a psychosomatic nature
  12. 12. OObbjjeeccttiivveess ffoorr aann EEffffeeccttiivvee IInntteerrnnaattiioonnaall CCoommppeennssaattiioonn PPoolliiccyy  Attract and retain employees who are qualified for overseas service  Facilitate transfers between foreign affiliates and between home-country Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. and foreign locations  Establish and maintain a consistent relationship between the compensation of employees of all affiliates, both at home and abroad Maintain compensation that is reasonable in relation to the practices of leading competitors
  13. 13. Types of Expatriate CCoommppeennssaattiioonn PPllaannss  Localization – practice of paying expatriates on the same scale as local nationals; salary and benefits may be supplemented with one-time or temporary transition payments  Works well under specific conditions  When the transferring employee has very limited home-country experience  In the case of permanent, indefinite, or extremely long (e.g., 10-year) transfers Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
  14. 14. Types of Expatriate CCoommppeennssaattiioonn PPllaannss  “Higher-of-home-or-host” – localizes expatriates in the host-country salary program, but establishes a compensation floor based on home-country compensation so that expatriates never receive less than they would be paid at home for a comparable position  Works well under specific conditions  Transfers within regions – notably in Latin America and in the European Union  Assignments of unlimited duration Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
  15. 15. Types of Expatriate CCoommppeennssaattiioonn PPllaannss  Balance-sheet approach – the most common method used in North American, European, and, increasingly, Japanese global organizations; its primary objective is to ensure that expatriates neither gain nor lose financially compared with their home-country peers Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  Advantages  Preserves the purchasing power of expatriates in a cost-effective manner  Facilitates mobility among expatriates
  16. 16. Components of IInntteerrnnaattiioonnaall CCoommppeennssaattiioonn PPaacckkaaggeess Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  Benefits  Best-of-both-worlds benefits – the expatriate is given home-country benefits coverage, for example pensions and medical coverage, and, where there may be no home-country plan, in areas such as disability insurance, the employee may join the host-country plan  Premiums  Housing allowance  Education allowance  Income tax equalization allowance  Hardship pay for living in areas with climactic extremes, political instability, or poor living conditions  Home leave  School allowance
  17. 17. Components of IInntteerrnnaattiioonnaall CCoommppeennssaattiioonn PPaacckkaaggeess Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  Pay Adjustments and Incentives  Incentives that work in the home country may be impractical and detrimental in the host country  Equity norm – the most universal reward allocation practice; rewards are distributed to group members based on their contributions
  18. 18. Special Issues iinn tthhee RReeppaattrriiaattiioonn ooff OOvveerrsseeaass EEmmppllooyyeeeess  Three elements contribute to repatriation anxiety – personal finances, reacclimation to the U.S. lifestyle, readjustment to the corporate structure Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  Possible solutions  Planning  Prior to the assignment, the firm should define one or more of the three primary purposes for sending a particular expatriate abroad:  executive development  coordination and control between headquarters and foreign operations, and  transfer of information and technology  Careful inclusion of expatriation and repatriation moves in comprehensive planning will help reduce uncertainty and the fear that accompanies it
  19. 19. Special IIssssuueess iinn RReeppaattrriiaattiioonn ooff OOvveerrsseeaass EEmmppllooyyeeeess Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  Possible solutions (continued)  Career management  Appoint a “Career Sponsor”  Looks out for the expatriate’s career interests while she or he is abroad and keeps the expatriate abreast of company developments  Is sensitive to the “job shock” the expatriate may suffer when she or he returns  Is trained to counsel the returning employee (and her or his family as well) until resettlement is deemed complete  Compensation  Use mobility premiums (e.g., 3 months’ pay) – one-time compensation for each move—overseas, back home, or to another overseas assignment  Low-cost loans and other financial assistance for housing  Financial counseling

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