INTERNATIONAL HUMAN RESOURCE MANAGEMENT

CONTENTS………

• Introduction to IHRM
• Challenges to IHRM
• Equal employee opportunity
• Network organizations

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Human Resource Management

• Human Resource Management (HRM) involves all management decisions and practices that directly affect the people who work for the organization.
• Human Resources the people who work for the organization.

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What is IHRM?

• International HRM (IHRM) is the process of:
• procuring,
• allocating, and
• effectively utilizing human resources
• in a multinational corporation, while
• balancing the integration and differentiation of HR activities in foreign locations.

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OBJECTIVES of IHRM

• To reduce the risk of international human resource
• To aviod cultural risks
• To aviod regional disparities
• To manage diversifies human capital

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P.Morgans Model of IHRM

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Human resource activities

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• Procurement
• Allocation
• Utilization of human resources

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�Nation/country� categories where firms expand and operate�

• Host country
• Parent country
• Third country

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Categories of employees in an MNE

• Parent-country nationals (PCNs) 
• Employees who were born and live in a parent country.
• A parent (or home) country: the country in which a company’s corporate headquarters is located.

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Categories of employees in an MNE

• Host-country nationals (HCNs) 
• Employees born and raised in a host country.
• Host country: a country in which the MNE seeks to locate or has already located a facility.
• Third-country nationals (TCNs) 
• Employees born in a country other than a parent or host country.

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What is an expatriate?

• An employee who is working and temporarily residing in a foreign country
• Some firms prefer to use the term “international assignees”
• Expatriates are PCNs from the parent country operations, TCNs transferred to either HQ or another subsidiary, and HCNs transferred into the parent country
• Global flow of HR: more complexity in activities and more involvement in employees' lives

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International Assignments Create Expatriates

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Reasons for Expatriate Failure

1. Inability of spouse to adjust
2. Manager’s inability to adjust
3. Other family problems
4. Manager’s personal or emotional maturity
5. Inability to cope with larger overseas responsibility
6. Lack of technical competence
7. Difficulties with new environment

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Why IHRM

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Factors that Influence the Global Work Environment

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Forces for Change

• Global competition:
• Growth in mergers, acquisitions and alliances:
• Organization restructuring:
• Advances in technology and telecommunication

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Impacts on Multinational Management

• Need for flexibility:
• Local responsiveness:
• Knowledge sharing:
• Transfer of competence:

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Managerial Responses

• Developing a global “mindset”
• More weighting on informal control mechanisms
• Fostering horizontal communication
• Using cross-border and virtual teams
• Using international assignments

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Differences between Domestic HRM and IHRM

• More HR activities: taxation, culture orientation, administrative services
• The need for a broader perspective: cater to multiple needs
• More involvement in employees’ personal lives: adjustment, spouses, children
• Changes in emphasis as the workforce mix of expatriates and locals varies: fairness
• Risk exposure: expatriate failure, terrorism
• Broader external influences: government regulations, ways of conduct

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Differences between Domestic HRM and IHRM: variables

• Complexity involved in operating in different countries, varied nationalities of employees
• The different Cultural Environment
• The industry or industries with which the MNC is involved
• Attitudes of Senior Management
• Extent of reliance of MNC on home country domestic market

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Variables that Moderate Differences between Domestic HR and IHRM

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Qualities of Global Managers

• Understand the worldwide business
• Learn about many cultures
• Work with many types of people
• Create cultural synergy
• Adapt to living in many cultures
• Use cross-cultural skills daily
• Treat foreign colleagues as equals
• Use foreign assignments as career development

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Main challenges in IHRM

• High failure rates of expatriation and repatriation
• Deployment – getting the right mix of skills in the organization regardless of geographical location
• Knowledge and innovation dissemination – managing critical knowledge and speed of information flow
• Talent identification and development – identify capable people who are able to function effectively
• Barriers to women in IHRM
• International ethics
• Language (e.g. spoken, written, body)

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Main challenges in IHRM

• Different labor laws
• Different political climate
• Different stage(s) of technological advancement
• Different values and attitudes e.g. time, achievement, risk taking
• Roles of religion e.g. sacred objects, prayer, taboos, holidays, etc
• Educational level attained
• Social organizations e.g. social institutions, authority structures, interest groups, status systems

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EQUAL EMPLOYEE OPPORTUNITY

• Equal Employment Opportunities (EEO) means eliminating barriers to ensure that all employees are considered for the employment of their choice and have the chance to perform to their maximum potential.

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EQUAL EMPLOYEE OPPORTUNITY

• EEO practices include:
• fairness at work,
• hiring based on merit and
• promotion based on talent.

It concerns all aspects of employment including recruitment, pay and other rewards, career development and work conditions

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OBJECTIVES

• To promote recognition and acceptance of everyone's right to equality of opportunity
• TO eliminate, as far as possible, discrimination against people by prohibiting discrimination on the basis of various attributes
• TO eliminate, as far as possible, sexual harassment
• TO provide redress for people who have been discriminated against or sexually harassed.

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EQUAL EMPLOYEE OPPORTUNITY

Discrimination on the basis of:-

• Disability
• Race
• Age
• Minority
• Marital status

Equal employment opportunity act is implemented by many countries to stop these discriminations.

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Diversity in workforce

Differences among people in age, gender, race, ethnicity, religion, sexual orientation, socioeconomic background, capabilities/disabilities and in the thought process.

management system which incorporates the differences found in a multicultural workforce in a manner which results in the highest level of productivity for both the organization and the individual.

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Diversity Wheel�

Diversity is the mixture of people in business, with their variety of backgrounds, experiences, styles, cultures, skills and competencies.

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Learning’s from the Wheel

• As individuals, we are all diverse
• As organizations and work groups, some are more diverse than others
• Important to understand your mix (customer’s, employees & stakeholders) now both current state and desired state
• People are both similar and different among a variety of dimensions
• Need to understand the impact of culture

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NETWORK ORGANISATIONS

• International Division Structure
• Global Product Division
• Global Area Division
• Global Functional Division Structure
• Multinational Matrix Structure

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International Division Structure

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International Division Structure

Structural arrangement that handles all international operations out of a division created for this purpose

• Assures international focus receives top management attention
• Unified approach to international operations
• Often adopted by firms still in developmental states of international business operations
• Separates domestic from international managers (not good)
• May find it difficult to think and act strategically, or to allocate resources on a global basis

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Global Product Division�

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Global Product Division�

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Structural arrangement in which domestic divisions are given worldwide responsibility for product groups

• Global product divisions operate as profit centers
• Helps manage product, technology, customer diversity
• Ability to cater to local needs
• Marketing, production and finance coordinated on product-by-product global basis
• Duplication of facilities and staff personnel within divisions
• Division manager may pursue currently attractive geographic prospects and neglect others with long-term potential
• Division managers may spend too much time tapping local rather than international markets

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Global Area Division

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Global Area Division

• Structure under which global operations organized on geographic basis
• International operations put on same level as domestic
• Global division mangers responsible for all business operations in designated geographic area
• Often used by firms in mature businesses with narrow product lines
• Firm is able to reduce cost per unit and price competitively by manufacturing in a region
• Difficult to reconcile a product emphasis with geographic orientation
• New R&D efforts often ignored because divisions are selling in mature market

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Global Functional Division Structure

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Global Functional Division Structure

Structure that organizes worldwide operations primarily based on function and secondarily on product

• Approach not used except by extractive companies such as oil and mining
• Favored only by firms needing tight, centralized coordination and control of integrated production processes and firms involved in transporting products and raw materials between geographic areas
• Emphasizes functional expertise, centralized control, relatively lean managerial staff
• Coordination of manufacturing and marketing often difficult
• Managing multiple product lines can be very challenging because of separation of production and marketing into different deparments.

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Multinational Matrix Structure

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Multinational Matrix Structure

Structure is a combination of global product, area, or functional arrangements

• Allows organization to create specific type of design that best meets its needs
• As matrix design’s complexity increases, coordinating personnel and getting everyone to work toward common goals often become difficult
• Too many groups to their own way

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Transnational Network Structures

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Transnational Network Structures

Multinational structural arrangement combining elements of function, product, geographic design, while relying on network arrangement to link worldwide subsidiaries

• At center of transnational network structures are nodes, units charged with coordinating product, functional, and geographic information
• Different product line units and geographic area units have different structures depending on what is best for their particular operation

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Control Mechanisms

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Approaches to IHRM

• Ethnocentric approach (Exportive)
• Polycentric approach (Adaptive)
• Regiocentric approach (Standardised )
• Geocentric approach(Integrative)

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Models of IHRM

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Models of IHRM

European Model

Matching Model

Contextual Model

Harvard Model

5-P Model

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Matching Model OR � Behavioral Perspective

Organization

Mission

And

Strategy

Organizational

Structure

Human Resource

Management

Economic Forces

Cultural Forces

Political Forces

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Matching model

• Developed by Boxall
• Commitment HR Strategy.
• Collaborating Human Resource Strategy.
• Paternalistic HR Strategy.
• Traditional Human Resource Strategy.

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Harvard Model

Stakeholders Interests

1.Shareholders

2.Management

3.Employe Groups

4.Government

5. Community

6.Unions

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Situational Factors

• 1.Workforce Characteristics
• 2.Business strategy and conditions
• 3.Management Philosophy
• 4.Labour Market
• 5.Unions
• 6.Task Technology
• 6.Laws and Societal Values

Human Resource Management Policy Choices

1.Employee Influence

2.Human Resource flow

3.Reward Systems

4. Work Systems

Human Resource Outcomes

1.Commitment

2.Competence

3.Congruence

4. Cost Effectiveness

Long Term Consequences

1. Individual Well-being
2. Organizational Effectiveness
3. Societal Well-being

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Harvard Model

• Proposed by Harvard University Professor Michael Beer
• The analytical framework consists
• Situational factors
• Stakeholder interests
• HRM Policy choices
• HR Outcomes
• Long-term Consequences
• A feedback loop

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Contextual Model

• Martin-Alcazar et al.
• Two components – external and internal environment contexts
• Strength depends on the interconnection and interdependency b/n them
• Orgnl. Culture and climate are the influential factors govt. and legislative, technology are external factors
• Model emphasizes on international dimensions of HRM that considers the particularities of ech geocentric context in which HRM decisions are made.

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FIVE P-Model

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Strategic Business Needs

HR Philosophy

HR Policies

HR programs

HR Practices

HR Processes

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European Model

• Based on the premise that European orgns operate with restricted autonomy.
• Internal and External constraints
• Interaction b/n HR strategies, business strategy, HR Practice depends on nation culture, power system, legislation, education and employee representation.

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Barriers to Effective IHRM.

Barriers to Effective IHRM

Variations

Attitude and Actions of Headquarters Towards HR

Perception Of HRM

Resistance to Change

Cultural Differences in Learning and Teaching Styles

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Internationalization of HRM:SOCIO –CULTURAL CONTEXT

Meaning and Definition of Culture

• Meaning of Culture.

The word culture comes from the Latin which is related to cult or worship or to mean civilization. In the context of Internationalization HRM, Culture is acquired knowledge that people use to interpret experience and generate social behavior.

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• Definition of Culture.

According to Mead ‘’Culture represents the ‘Social glue’ and generates ‘we –feeling’, thus counteracting process of differentiation which are an unavoidable part of organizational life”.

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Characteristics of Culture

• Culture is Invented.
• Culture is learned.
• Culture is Socially Shared.
• Cultures are similar but Different.
• Culture Is gratifying and persistent.
• Culture is adaptive.
• Culture Is organized and integrated.
• Culture Is prescriptive.

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Components / Variables of culture

• Language.
• Religion.
• Attitudes and Values.
• Social Organization.
• Education.
• Technology.
• Political Systems.
• Legal Systems.

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Dimensions of Culture

We propose to discuss three cultural models:

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1. Globe Project Team
2. Hofstede’s model and
3. Trompenaar’s 7d cultural model

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An understanding of these models equips international managers with the basic tools necessary to analyse the cultures in which they do business. The three approaches also provide useful theoretical concepts to help understand the nuances of different cultures better.

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Globe Project

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The GLOBE (Global Leadership and Organizational Behaviour Effectiveness) project team comprises 170 researchers who have collected data over seven years on cultural values and practices and leadership attributes from 17,000 managers in 62 countries, covering as many as 825 organizations spread across the globe.

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The research team identified nine cultural dimensions that distinguish one society from another and have important managerial implications: assertiveness, future orientation, performance orientation, human orientation, gender differentiation, uncertainty avoidance, power distance, collectivism/societal, and in-group collectivism.

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Assertiveness

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This aspect is defined as the degree to which individuals in organisations or societies are expected to be tough, confrontational and competitive versus modest and tender.

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Future Orientation

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This dimension refers to the level of importance a society attaches to future-oriented behaviours such as planning and investing in the future and delaying immediate gratification.

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Performance Orientation

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Performance orientation measures the importance of performance and excellence in society and refers to whether people are encouraged to strive for continued improvement and excellence.

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Human Orientation

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Human orientation is understood as the degree to which individuals in organisations or societies encourage and reward people for being altruistic, generous, caring and kind to others.

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Gender Differentiation

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This is understood as the extent to which an organization or society resorts to role differentiation and gender discrimination.

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In-group Collectivism

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This refers to the degree to which individuals express pride, loyalty and cohesiveness in their organisations or families.

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Collectivism/Societal

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This refers to the degree to which organisational and societal practices encourage and reward collective distribution of resources and collective action.

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Power Distance

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This refers to the degree to which organisational members or citizens of a society expect and agree that power should be unequally distributed.

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Uncertainty Avoidance

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This refers to the extent to which members of an organisation or society strive to avoid uncertainty by relying on social norms, rituals and bureaucratic practices to minimize the unpredictability of future happenings.

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GLOBE’s ranking is highly helpful to international managers who are seeking to be successful in cross-cultural settings. Anticipating cultural similarities and differences allows multi-cultural managers to develop the behaviours and skills necessary to act and decide in a manner appropriate to the host country norms and expectations.

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Hofstede’s Cultural Dimensions

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In a discussion on multicultures, reference should be made to the pioneering work done by the Dutch scientist, Geert Hofstede.

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He identified four cultural dimensions around which countries have been clustered, with people in each group exhibiting identical behaviours.

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The four dimensions are:

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• power distance,
• uncertainty avoidance,
• individualism and collectivism
• masculinity.

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Power Distance

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Power distance is the extent to which less powerful members of institutions and organisations accepts that power is distributed unequally. Countries in which people blindly obey the orders of superiors have high power distance.

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High power distance countries have norms, values and beliefs such as:-

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• Inequality is fundamentally good,
• Every one has a place; some are high, some are low,
• Most people should be dependent on a leader,
• The powerful are entitled to privileges and
• The powerful should not hide their power.

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High Power v/s Low Power countries

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The US, Austria, Ireland, Norway and New Zealand represent cultures with low power distance. These societies exhibit characteristics almost the opposite of the features listed above.

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France, India, Singapore, Brazil, Mexico and Indonesia are examples of societies with a high power distance.

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Uncertainty Avoidance

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Uncertainty avoidance is the extent to which people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these.

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Countries with citizens who do not like uncertainty tend to have a high need for security and a strong belief in experts and their knowledge. Countries with low uncertainty avoidance have people who are more willing to accept that risks are associated with the unknown and the life must go on in spite of this.

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Specifically, high uncertainty avoidance countries are characterised by norms, values and beliefs which accept that:

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• Conflict should be avoided,
• Deviant people and ideas should not be tolerated,
• Laws are very important and should be followed,
• Experts and authorities are usually correct and
• Consensus is important

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Low uncertainty avoidance societies tend to represent the antonym of the above characteristics.

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Country Classification

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Individualism

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Individualism is the tendency of people to look after themselves and their family only. Individualism is common in the US, Canada, Australia, Denmark and Sweden.

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Specifically, countries high on individualism have norms, values and beliefs which accept that:

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• People are responsible for themselves,
• Individual achievement is ideal and
• People need not be emotionally dependent on organisations or groups.

In the individualist societies, favoritism shown to friends and relatives is considered to be unfair and even illegal.

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Masculinity

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Masculinity refers to a situation in which the dominant values in a society are success, money and other material things. Hofstede measured this dimension on a continuum ranging from masculinity to femininity.

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High masculine cultures have norms, values and beliefs that:

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• Gender roles should be clearly distinguished,
• Men are assertive and dominant,
• Machismo or exaggerated maleness is good,
• People – especially men - should be decisive,
• Work takes priority over other duties, such as family and
• Advancement, success and money are important.

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Country Classification

In highly masculine societies, jobs are clearly defined by gender. There are men’s job and women’s jobs. Men usually choose jobs that are associated with long-term careers. Women usually choose jobs that are associated with short-term employment, before marriage.

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Trompenaar’s Framework

Trompenaars, an European researcher, conducted an extensive research with 15,000 managers from 28 countries, representing 47 national cultures. He describes cultural differences using seven dimensions (the theory is therefore called 7d cultural dimensions model):

1. universalism versus particularism,
2. individualism versus collectivism,
3. specific versus diffuse,
4. neutral versus affective,
5. achievement versus ascription,
6. past versus present (time dimension), and
7. internal versus external control

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THE 7D MODEL OF CULTURE

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(i) Universalism versus Particularism

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In cultures with universalistic orientation, people believe in abstract principles such as the rules of law, religion or cultural principles.

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In universalistic cultures, the focus is more on formal rules than on relationships; business contracts are adhered to very closely and people believe that a ‘deal is a deal’. In a particularistic culture, legal contracts are adhered to very closely and the way, deals are executed also changes depending on the situations.

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Universalism versus Particularism

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(ii) Individualism versus Collectivism

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This dimension is almost identical to Hofstede’s value dimension. In individualistic societies, the focus is on “I” or “me” and the orientation is one’s own growth. In collectivist societies, the focus is on groups, including family, organisation and community. Responsibility, achievements and rewards are group-based. In individualistic societies, people are trained from childhood to be independent, and each person assumes individual responsibility for his/her success or failure.

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�Individualism versus Collectivism�

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3. Specific versus Diffuse

This cultural dimension focusses on how a culture emphasizes on notions of privacy and access to privacy. In specific cultures, individuals have large public spaces and relatively small private spaces. While the public space is open, the private one is guarded carefully and shared with only close friends and associates.

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A diffuse culture does not allow any distinction between public and private spaces.

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Specific versus Diffuse

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(iv) Neutral versus Affective

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In this dimension, Trompenaars focusses on the appropriateness of expressing emotions in different cultures. In neutral cultures, the tendency of the people is to control their emotions so that it will not interfere with their judgement. In contrast, effective cultures encourage the expression of emotions.

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Expressions of anger, laughter, gesturing and a range of emotional outbursts are considered normal and acceptable. But in neutral societies, emotions are considered to be messy interference in achieving objectives.

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Neutral versus Affective

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(v) Achievement versus Ascription

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This dimension describes the methods used to acquire status. In an achievement culture, an individual is accorded status based on how well he/she performs his/her functions. Status depends on achievement.

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An ascription culture is one in which status is attributed based on who or what a person is, his age, gender or social connections. Achievement is not the criterion to accord status.

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Achievement versus Ascription

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(vi) Time Dimension

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Time orientation has two dimensions. The first dimension of Trompenaars is similar to Hofstede’s – there are different emphasis on the past, present and future. The second refers to sequential versus spectronic cultures. This dimension is unique to Trompenaars. In sequential cultures, time is viewed as linear and divided into segments that can then be divided and scheduled.

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The followers of sequential cultures tend to do only one activity at a time, keep appointments strictly and show a strong preference for following plans as they are laid out and not deviating from them. US, Mexico and France tend to follow sequential cultures. In synchronic cultures such as Portugal and Egypt, time is viewed as circular and indivisible, and relationships are more important than schedules.

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Time Dimension

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6. Internal versus External Control

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The final cultural dimension of Trompenaars relates to one’s locus of control – his belief about whether he or she is the master of his or her own destiny. Where individuals (read managers) believe that they have control over outcomes, they are said to be followers of internal locus of control. Instead, if they believe that they have control over the outcomes, such people (managers) deem to follow the tenets of external locus of control.

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Poland and Greece are the two countries whose citizens possess strong internal locus of control, whereas, Ethiopians and Chinese are said to be externals.

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Internal Control versus External Control

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Role of HR in Knowledge Management

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Agenda

What is Knowledge?

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Types of Knowledge

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What is Knowledge Management?

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The Essence of Knowledge Management

Why Knowledge Management?

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What does leveraging "collective knowledge" involve?

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An overview of Knowledge Processes

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Benefits of Knowledge to Enterprise

HUL's Packaging Network

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What are the barriers for implementing Knowledge Management

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The role of HR in institutionalizing KM in an organization

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HR processes and practices impact the knowledge sharing in a firm

How do we create a knowledge sharing culture?

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HR should be the catalyst for culture change

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���What Is Knowledge?

Data

A Record of a

Change of State

Information

Data organized with

a purpose. A message

Knowledge

Literally…

what people know

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Types of Knowledge

Explicit knowledge

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Tacit knowledge

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Formal knowledge

(Visible)

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Available in the form of books, reports, audio tapes, video tapes etc.

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Can be articulated

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Informal knowledge

(Highly Invisible)

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Confined in the mind of a person

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Difficult to articulate

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Knowledge Management

Knowledge Driven Organization

Fully leverage the "collective knowledge" in an organization

Creation and sharing of knowledge

KM processes provide a framework for connecting people to people and people to information

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KM helps the Organization to:

Improve organizational effectiveness and Returns

Build competitive advantage

Create greater value

See the opportunities and exploit them

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The Essence of Knowledge Management �

The central theme of Knowledge Management is to leverage and reuse knowledge resources that already exist in the organization so that people will seek out best practices rather than reinvent the wheel.

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Why Knowledge Management?

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What does leveraging "collective knowledge" involve?

• Working in collaborative teams, capturing and sharing knowledge and delivering business excellence.

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• Developing and sharing "best practices."

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• Faster replication of innovations through faster movement of knowledge through the organization.

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• Acquisition and sharing of "new knowledge."

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• Creating an environment that is comfortable to the idea of openness, knowledge sharing, risk of failure as well as rewards for success.

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• Managing organizational learning.

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Knowledge Management Process

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Benefits of Knowledge to Enterprise

• Unleash new Ideas and Creativity.

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• Improve and accelerate Learning.

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• Enhance Team Collaboration & Coordination.

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• Improve the Flow of knowledge.

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• Attract, and retain motivated, loyal, and committed talent.

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� ���Stimulating knowledge sharing �

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• Disseminating information about superior performance and knowledge
• Employing HRM practices that influence the ability and motivation of employees to absorb knowledge
• Selecting expatriates with knowledge sharing in mind
• Designing appropriate structural mechanisms (committees)
• Building a conductive social architecture: social capital, social norms and global mindsets
• Gaining access to external knowledge
• Scanning global learning opportunities
• Playing the virtual market
• Partnering or merging

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Knowledge Retention

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• Stimulate knowledge sharing among individuals and units

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• Reduce employee turnover

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• Invest in making tacit knowledge explicit

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From knowledge management to innovation

• HUL’s KM

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• Xerox Hall of Fame

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Knowledge Management Initiatives

HUL's Packaging Network

Opportunities / Challenges: Packaging in our company is very important, both for providing protection to the product in transit and storage as well as its contribution to pack presentation / brand image.

How do we make sure that the collective knowledge of the packaging professionals in the company is fully leveraged by the packaging professionals in each business, to add value to his business, through problem solving as well as innovations to reduce cost and or improve functionality?

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HUL’s response:

Formed a knowledge community.

The team meets once in two months for structured knowledge sharing and monitoring progress of implementation of the charter.

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The basic approach and methodology adopted by the team:

• Develop clarity on business expectations
• Appointed sub-teams to specialize / lead in each of the knowledge blocks.
• “Knowledge workshops" with the core team and the extended team to generate new ideas and opportunities.
• Intranet application with collaborative working tools, to facilitate knowledge sharing on a continuous basis, in between the face to face meetings.

​

Results achieved:

• The Packaging community has been consistently delivering as per their charter.
• To strengthening knowledge sharing behaviour through facilitation, training and leadership.

​

​

IHRM 20MBAHR403

RIT MBA DEPT

The barriers for implementing Knowledge Management?�

• Conceptual / mindset related issues: We should move from “hoarding of knowledge to gain power" to "sharing of knowledge to gain power."

​

• Operational issues: KM should not be seen as a separate initiative, but should be integrated into current workflow as a more effective way to achieve business results.

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

The role of HR in institutionalizing KM in an organization

• Focus on strengthening collaborative team effort to leverage collective knowledge of the enterprise.
• Corporate Education.
• Performance Management and nurturing (sharing, doing and caring) culture.
• Talent management.
• Recruitment, training, skill and competency development.
• New HRM roles are those of human capital steward, knowledge facilitator, relationship builder, and rapid deployment specialist.

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

• Human capital steward
• Creates an environment and culture in which employees voluntarily contribute skills, ideas, and energy
• Human capital is not “owned” by organization
• Knowledge facilitator
• Procures necessary employee knowledge and skill sets that allow information to be acquired, developed, and disseminated
• Provides a competitive advantage
• Must be part of strategically designed employee development plan

​

New HRM Roles

IHRM 20MBAHR403

RIT MBA DEPT

• Relationship builder
• Develops structure, work practices, and culture that allow individuals to work together
• Develops networks that focus on strategic objectives

​

• Rapid deployment specialist
• Creates fluid and adaptable structure and systems
• Global, knowledge-based economy mandates flexibility and culture that embraces change

IHRM 20MBAHR403

RIT MBA DEPT

How then do HR processes and practices impact the knowledge sharing in a firm?

• Job rotations

​

• Networked organization

​

• Training

​

• Knowledge communities (Teams)

​

• E- Learning

​

• Culture change

IHRM 20MBAHR403

RIT MBA DEPT

How do we create a knowledge sharing culture?

Realign incentive and reward program:

• “The best KM practitioners reward employees for learning, sharing and collaborating.

​

Step HR could implement are:

• Institute Team awards

Xerox: “Eureka Hall of Fame"

Hewlett Packard Consulting: in their "vision" statement:

"Our consultants feel and act as if they have the knowledge of the entire organization at their fingertips when they consult with customers. We will recognize those consultants that share and those that leverage other's knowledge and experience as most valuable members of the HP team."

​

​

IHRM 20MBAHR403

RIT MBA DEPT

HR should be the catalyst for culture change

• HR will also be a key facilitator in implementing a companywide communication of value behaviours.

​

• Team excellence workshops and process improvement (speed, simplicity and excellence) workouts are among the key initiatives that will soon be launched by HR to support the culture change.

• These culture change initiatives will strongly support our efforts to become a stronger knowledge driven company, committed to business excellence.

​

• Develop "Knowledge Pull“.

​

IHRM 20MBAHR403

RIT MBA DEPT

Some of the steps that HR could take for cultural change :�

• Performance Development Planning (PDP);

1.Learning from experience

2.Team commitment

3.Developing others

​

• Develop a mechanism to communicate effectively.

​

• Collaborative effort and knowledge.

​

• Make KM part of the Company training modules.

​

• Hold visible knowledge sharing events.

IHRM 20MBAHR403

RIT MBA DEPT

Conclusion:�

• Transformation into knowledge driven organization
• HR has a key role to play in nurturing and strengthening knowledge management through "learning initiatives" and "culture change initiatives.“
• HR is best placed to play the role of an effective facilitator, and give positive reinforcements for Knowledge Management .
• Knowledge management has already been embraced as a source of solutions to the problems of today’s business.

IHRM 20MBAHR403

RIT MBA DEPT

Role of HR in Knowledge Management

​

​

MODULE 2

20MBA403

Agenda

What is Knowledge?

​

Types of Knowledge

​

What is Knowledge Management?

​

The Essence of Knowledge Management

Why Knowledge Management?

​

What does leveraging "collective knowledge" involve?

​

An overview of Knowledge Processes

​

IHRM 20MBAHR403

RIT MBA DEPT

Benefits of Knowledge to Enterprise

HUL's Packaging Network

​

What are the barriers for implementing Knowledge Management

​

The role of HR in institutionalizing KM in an organization

​

HR processes and practices impact the knowledge sharing in a firm

How do we create a knowledge sharing culture?

​

HR should be the catalyst for culture change

​

IHRM 20MBAHR403

RIT MBA DEPT

���What Is Knowledge?

Data

A Record of a

Change of State

Information

Data organized with

a purpose. A message

Knowledge

Literally…

what people know

​

IHRM 20MBAHR403

RIT MBA DEPT

Types of Knowledge

Explicit knowledge

​

​

​

​

​

​

​

​

​

​

Tacit knowledge

​

​

​

​

​

​

​

​

​

Formal knowledge

(Visible)

​

Available in the form of books, reports, audio tapes, video tapes etc.

​

Can be articulated

​

​

​

​

​

​

​

​

​

​

​

Informal knowledge

(Highly Invisible)

​

Confined in the mind of a person

​

Difficult to articulate

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

Knowledge Management

Knowledge Driven Organization

Fully leverage the "collective knowledge" in an organization

Creation and sharing of knowledge

KM processes provide a framework for connecting people to people and people to information

IHRM 20MBAHR403

RIT MBA DEPT

KM helps the Organization to:

Improve organizational effectiveness and Returns

Build competitive advantage

Create greater value

See the opportunities and exploit them

IHRM 20MBAHR403

RIT MBA DEPT

The Essence of Knowledge Management �

The central theme of Knowledge Management is to leverage and reuse knowledge resources that already exist in the organization so that people will seek out best practices rather than reinvent the wheel.

IHRM 20MBAHR403

RIT MBA DEPT

Why Knowledge Management?

IHRM 20MBAHR403

RIT MBA DEPT

What does leveraging "collective knowledge" involve?

• Working in collaborative teams, capturing and sharing knowledge and delivering business excellence.

​

• Developing and sharing "best practices."

​

• Faster replication of innovations through faster movement of knowledge through the organization.

​

• Acquisition and sharing of "new knowledge."

​

• Creating an environment that is comfortable to the idea of openness, knowledge sharing, risk of failure as well as rewards for success.

​

• Managing organizational learning.

​

IHRM 20MBAHR403

RIT MBA DEPT

Knowledge Management Process

IHRM 20MBAHR403

RIT MBA DEPT

Benefits of Knowledge to Enterprise

• Unleash new Ideas and Creativity.

​

• Improve and accelerate Learning.

​

• Enhance Team Collaboration & Coordination.

​

• Improve the Flow of knowledge.

​

• Attract, and retain motivated, loyal, and committed talent.

​

IHRM 20MBAHR403

RIT MBA DEPT

� Stimulating knowledge sharing �

​

• Disseminating information about superior performance and knowledge
• Employing HRM practices that influence the ability and motivation of employees to absorb knowledge
• Selecting expatriates with knowledge sharing in mind
• Designing appropriate structural mechanisms (committees)
• Building a conductive social architecture: social capital, social norms and global mindsets
• Gaining access to external knowledge
• Scanning global learning opportunities
• Playing the virtual market
• Partnering or merging

​

​

IHRM 20MBAHR403

RIT MBA DEPT

Knowledge Retention

​

• Stimulate knowledge sharing among individuals and units

​

• Reduce employee turnover

​

• Invest in making tacit knowledge explicit

​

IHRM 20MBAHR403

RIT MBA DEPT

From knowledge management to innovation

• HUL’s KM

​

• Xerox Hall of Fame

IHRM 20MBAHR403

RIT MBA DEPT

Knowledge Management Initiatives

HUL's Packaging Network

Opportunities / Challenges: Packaging in our company is very important, both for providing protection to the product in transit and storage as well as its contribution to pack presentation / brand image.

How do we make sure that the collective knowledge of the packaging professionals in the company is fully leveraged by the packaging professionals in each business, to add value to his business, through problem solving as well as innovations to reduce cost and or improve functionality?

​

HUL’s response:

Formed a knowledge community.

The team meets once in two months for structured knowledge sharing and monitoring progress of implementation of the charter.

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

The basic approach and methodology adopted by the team:

• Develop clarity on business expectations
• Appointed sub-teams to specialize / lead in each of the knowledge blocks.
• “Knowledge workshops" with the core team and the extended team to generate new ideas and opportunities.
• Intranet application with collaborative working tools, to facilitate knowledge sharing on a continuous basis, in between the face to face meetings.

​

Results achieved:

• The Packaging community has been consistently delivering as per their charter.
• To strengthening knowledge sharing behaviour through facilitation, training and leadership.

​

​

IHRM 20MBAHR403

RIT MBA DEPT

The barriers for implementing Knowledge Management�

• Conceptual / mindset related issues: We should move from “hoarding of knowledge to gain power" to "sharing of knowledge to gain power."

​

• Operational issues: KM should not be seen as a separate initiative, but should be integrated into current workflow as a more effective way to achieve business results.

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

The role of HR in institutionalizing KM in an organization

• Focus on strengthening collaborative team effort to leverage collective knowledge of the enterprise.
• Corporate Education.
• Performance Management and nurturing (sharing, doing and caring) culture.
• Talent management.
• Recruitment, training, skill and competency development.
• New HRM roles are those of human capital steward, knowledge facilitator, relationship builder, and rapid deployment specialist.

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

• Human capital steward
• Creates an environment and culture in which employees voluntarily contribute skills, ideas, and energy
• Human capital is not “owned” by organization
• Knowledge facilitator
• Procures necessary employee knowledge and skill sets that allow information to be acquired, developed, and disseminated
• Provides a competitive advantage
• Must be part of strategically designed employee development plan
• Relationship builder
• Develops structure, work practices, and culture that allow individuals to work together
• Develops networks that focus on strategic objectives
• Rapid deployment specialist
• Creates fluid and adaptable structure and systems
• Global, knowledge-based economy mandates flexibility and culture that embraces change

​

​

New HRM Roles in KM

IHRM 20MBAHR403

RIT MBA DEPT

How then do HR processes and practices impact the knowledge sharing in a firm?

• Job rotations

​

• Networked organization

​

• Training

​

• Knowledge communities (Teams)

​

• E- Learning

​

• Culture change

IHRM 20MBAHR403

RIT MBA DEPT

How do we create a knowledge sharing culture?

​

Realign incentive and reward program:

• “The best KM practitioners reward employees for learning, sharing and collaborating.

​

Step HR could implement are:

• Institute Team awards

Xerox: “Eureka Hall of Fame"

Hewlett Packard Consulting: in their "vision" statement:

"Our consultants feel and act as if they have the knowledge of the entire organization at their fingertips when they consult with customers. We will recognize those consultants that share and those that leverage other's knowledge and experience as most valuable members of the HP team."

​

​

IHRM 20MBAHR403

RIT MBA DEPT

HR should be the catalyst for culture change

• HR will also be a key facilitator in implementing a companywide communication of value behaviours.

​

• Team excellence workshops and process improvement (speed, simplicity and excellence) workouts are among the key initiatives that will soon be launched by HR to support the culture change.

• These culture change initiatives will strongly support our efforts to become a stronger knowledge driven company, committed to business excellence.

​

• Develop "Knowledge Pull“.

​

IHRM 20MBAHR403

RIT MBA DEPT

Some of the steps that HR could take for cultural change :�

• Performance Development Planning (PDP);

1.Learning from experience

2.Team commitment

3.Developing others

​

• Develop a mechanism to communicate effectively.

​

• Collaborative effort and knowledge.

​

• Make KM part of the Company training modules.

​

• Hold visible knowledge sharing events.

IHRM 20MBAHR403

RIT MBA DEPT

Conclusion:�

• Transformation into knowledge driven organization
• HR has a key role to play in nurturing and strengthening knowledge management through "learning initiatives" and "culture change initiatives.“
• HR is best placed to play the role of an effective facilitator, and give positive reinforcements for Knowledge Management .
• Knowledge management has already been embraced as a source of solutions to the problems of today’s business.

IHRM 20MBAHR403

RIT MBA DEPT

INTERNATIONAL TRAINING STRATEGIES

International Training Strategies

• Training strategies bridge the gap
• The four strategies of training are:
• MNCs may make use of expatriates for short-term or long-term international job assignments.
• The staffing orientation that is adopted in the subsidiary unit influences the training impetus
• The control and coordination linkages that the parent unit wishes to establish with the subsidiary unit drive the training budget and the strategy
• The role and responsibilities of the position determine the extent and content training

IHRM 20MBAHR403

RIT MBA DEPT

EXPATRIATE TRAINING

• The focus is on ascertaining the cultural awareness and the fit for the host country's culture
• MNCs offer Cross-Cultural Training (CCT)
• A planned intervention
• To increase the knowledge and skills of expatriates to live and work effectively
• To achieve general life satisfaction in an unfamiliar host culture
• The effectiveness of a CCT is reflected by the cognitive, affective and behavioural changes that occur during and after the training.

IHRM 20MBAHR403

RIT MBA DEPT

Benefits and Drawbacks of CCT

IHRM 20MBAHR403

RIT MBA DEPT

INTERNATIONAL TRAINING PROCESS

• The stages are:
• Identify training objectives
• Identify the types of global assignment for which CCT is required.
• Determine the specific cross-cultural training needs.
• Establish the goals and measures for determining training effectiveness.
• Develop and deliver the CCT programme.
• Evaluate whether the CCT was effective

IHRM 20MBAHR403

RIT MBA DEPT

INTERNATIONAL TRAINING PROCESS

IHRM 20MBAHR403

RIT MBA DEPT

OBJECTIVE

• A few commonly understood objectives of training in the multinational corporation are:
• Bridging the cultural gaps between the host and the parent organisation*
• Recognising that orientation / induction challenges are different for the parent and the host unit
• Ensuring that organisational success is critical in achievement of the global objectives.
• Establishing and retaining advantages over international competitors

IHRM 20MBAHR403

RIT MBA DEPT

GLOBAL ASSIGNMENTS

• Global assignments are of the following types:
• Chief executive officer - overseas and directs the entire subsidiary operations, undergo an intensive CCT
• Structure reproducer - shoulders the responsibility of building or reproducing in a foreign subsidiary, not be exposed to a rigorous CCT
• Trouble shooter - to analyse and solve a specific operational problem, do not need to undergo a very intense CCT
• Operative - to perform functional tasks in an existing operational structure, do not need to undergo a very intense CCT

IHRM 20MBAHR403

RIT MBA DEPT

NEEDS ANALYSIS

• Needs assessment diagnoses present problems and identities future challenges to be met through training and development.
• Needs assessment occurs at three levels:
• The individual
• The organisational culture, politics, structure and strategy
• The assignment

IHRM 20MBAHR403

RIT MBA DEPT

CCT GOALS AND MEASURES

• Short-term - what the expatriate should be able lo accomplish on completion of the CCT
• Long-term - reflect the expected outcome of the expatriate assignment

IHRM 20MBAHR403

RIT MBA DEPT

DEVELOP AND DELIVER THE CCT PROGRAMME

• Involves two activities
• Deciding on the content of training
• Sequencing

IHRM 20MBAHR403

RIT MBA DEPT

COURSE CONTENT

• Language Training
• Communicate effectively with the host country citizens
• To learn about host country-value systems and the customs of its people
• (exceptions - France. Germany, Japan or China)

IHRM 20MBAHR403

RIT MBA DEPT

COURSE CONTENT

• B. Cultural Training
• General cultural orientation - receptiveness to effective cross-cultural interactions, clear understanding of the purpose, value and benefits of the global assignment, the ability to manage stress.
• Specific host country cultural orientation - understanding of the host country's culture, adaptation of spouse in the host country

IHRM 20MBAHR403

RIT MBA DEPT

COURSE CONTENT

• B. Cultural Training
• The intensity of cultural training depends on two factors:
• The degree of interaction required between the expatriate and the host country citizens
• The similarity between the assignee's native culture and the new culture

IHRM 20MBAHR403

RIT MBA DEPT

COURSE CONTENT

• B. Cultural Training
• These two factors give rise to two dimensions:
• If the expected interaction between the assignee and the host country citizens is low, and the degree of similarity between the assignee's home culture and of the host country's culture is high, then training could focus more on task and job-related issues rather than culture-related issues. The level of rigour necessary for effective training could be relatively low.
• If expected interactions are high and dissimilarities between cultures are also high, then training could focus more on cross-cultural sensitivity, in addition to the new task. The level of rigour for such training could be moderate to high.

IHRM 20MBAHR403

RIT MBA DEPT

COURSE CONTENT

• C. Practical Assistance:
• This seeks to help the expatriate and his family “feel at home” in the host country

IHRM 20MBAHR403

RIT MBA DEPT

METHODS OF TRAINING:

• Didactic general culture training
• Educative training
• Didactic specific culture training
• Training on host country culture
• Experiential general culture training
• Experiential specific culture training

IHRM 20MBAHR403

RIT MBA DEPT

METHODS OF TRAINING:

• Didactic general culture training:
• Called as educative training.
• Seeks to incur a cognitive understanding of a culture so that its norms and behaviour can be easily be appreciated by the assignees.
• Methods of imparting training are –
• lectures,
• seminars,
• study materials,
• discussions,
• videotapes,
• culture-general assimilators.

IHRM 20MBAHR403

RIT MBA DEPT

METHODS OF TRAINING:

• Didactic specific culture training:
• Seeks to instruct about the cultural nuances of the expatriates host country.
• Methods of imparting training are –
• area studies,
• videotapes,
• orientation,
• primary visits,
• case studies

IHRM 20MBAHR403

RIT MBA DEPT

METHODS OF TRAINING:

• Experiential general cultural Training:
• Experiential general culture training methods help assignees experience the impact of cultural differences on their behaviours.
• Methods in this category include –
• immersion programmes
• intensive workshops.

IHRM 20MBAHR403

RIT MBA DEPT

METHODS OF TRAINING:

• Experiential specific cultural Training:
• These methods seek to help expatriates experience and learn from interactions with individuals from the host culture.
• Training includes
• role-playing,
• look-see trips,
• cultural coaching
• language training.

IHRM 20MBAHR403

RIT MBA DEPT

SEQUENCING OF SESSIONS

• Pre-Departure CCT:
• This is the most widely used method of imparting training and is at best learning something without actually experiencing it.
• Training on basic information - currency, exchange rate, hotels, transportation systems and hospitals
• Post-Arrival or In-Country Training:
• Facilitates learning by experiencing the host country culture, beliefs and values.
• Training on deeper cultural learning about a new country and its culture and the awareness of the skills and behaviours needed to be successful in another culture.

IHRM 20MBAHR403

RIT MBA DEPT

• Issue: Without some initial support and a framework for learning, many managers find it difficult to reach out to new colleagues themselves.
• Solution – Process of Socialisation

IHRM 20MBAHR403

RIT MBA DEPT

EVALUATING THE EFFECTIVENESS OF CCT

• Evaluation necessitates an identification of training goals and methods so as to judge whether or not the goals have been met.
• Short-term goals
• Cognitive goals
• Affective goals
• Behavioural goals
• Long-term goals

IHRM 20MBAHR403

RIT MBA DEPT

EVALUATING THE EFFECTIVENESS OF CCT

• Short-term goals
• Cognitive goals focus on helping the expatriates understand the role of cultural values on behaviour in the host country.
• Knowledge about managing stress
• Awareness of the norms required to effectively interact with host country nationals
• Affective goals seek to manage his or her attitude towards the new culture and effectively handle negative emotions.
• Changing the expatriate's perception about the host culture
• Enhancing his or her self-confidence to communicate with people from other cultures
• Behavioural goals help the adaptive behaviour by the cross-cultural skills, interpersonal skills.
• Developing intercultural skills
• Negotiating skills, Relationship building skills

IHRM 20MBAHR403

RIT MBA DEPT

EVALUATING THE EFFECTIVENESS OF CCT

• Short-term goals
• Methods to evaluate the effectiveness of the CCT
• Paper and pencil tests
• Online tests
• Personal interviews
• Group discussions
• Observation of performance in a cultural stimulator
• Role-play.

IHRM 20MBAHR403

RIT MBA DEPT

EVALUATING THE EFFECTIVENESS OF CCT

• Long-term goals of the CCT programme include the expected outcome of the expatriate assignment
• Cross-cultural adjustment
• Success on the assignment
• Measurement
• Paper and pencil questionnaires
• Phone interviews
• In person interviews
• Electronic surveys

IHRM 20MBAHR403

RIT MBA DEPT

Training and Development

• Planned individual learning, organization development, and career development
• Delivery of programs worldwide
• Developing globally minded managers

IHRM 20MBAHR403

RIT MBA DEPT

Delivery of Programs Worldwide

• Centralized approach
• Ethnocentric – training originates at headquarters and corporate trainers travel to subsidiaries
• Geocentric – training develops through input from both headquarters and subsidiary staff and trainers could be from any location

IHRM 20MBAHR403

RIT MBA DEPT

Delivery of Programs Worldwide

• Decentralized approach
• Training on a local or regional basis
• Local people develop training materials and techniques for use in their own area
• Effective training considers cultural background of trainees
• With a centralized approach, trainers need to adapt to local cultures

IHRM 20MBAHR403

RIT MBA DEPT

Cross-Cultural Training Methods

Explain the major aspects of the host country

culture, including customs, traditions, every day behaviors.

​

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.

• Cultural Briefings

​

​

• Area Briefings

​

​

• Cases

IHRM 20MBAHR403

RIT MBA DEPT

Cross-Cultural Training Methods (cont.)

• Role Playing

​

​

• Culture Assimilator

​

​

​

​

• Field Experiences

Allows the trainee to act out a situation that he or she might face in living or working in the host country.

​

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.

​

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.

IHRM 20MBAHR403

RIT MBA DEPT

How Situational Factors Influence the Selection of a CCT Method

Degree of

Training

Rigor

High

Low

High

Low

Low

High

Classroom Language Training

Films

FACTUAL

Books

Lectures

Area Briefings

Case Studies

Culture Assimilators

Sensitivity Training

ANALYTICAL

Interactive Language Training

Role Plays

Field Trips

Simulations

EXPERIENTIAL

Degree of Job Novelty

Degree of

Culture Novelty

Training Methods

Degree of Interaction with Host Country Nationals

IHRM 20MBAHR403

RIT MBA DEPT

Lesson learnt and reaped benefits

• Companies whose CEO's have international assignment experience are better performers
• Even stronger if the top management team also has international experience and the company has an extensive global strategy
• Companies must identify managers with global potential and provide them various training and development opportunities.

IHRM 20MBAHR403

RIT MBA DEPT

IHRM Module 3

INTERNATIONAL COMPENSATION

Learning Objectives

• In the study, we will:

​

• Learn what is compensation and what are the components of compensation
• Examine the complexities that arise when firms move from compensation at the domestic level to compensation in an international context
• Outline the two main approaches to international compensation and the advantages and disadvantages of each approach
• Examine the special problem areas of taxation, valid international living cost data and the problem of managing TCN compensation
• Examine the matching of compensation policies with staffing policies
• Examine the recent developments and global compensation issues

​

IHRM 20MBAHR403

RIT MBA DEPT

INTRODUCTION TO COMPENSATION

• Compensation – substitute word for wages and salaries.
• Represents an exchange between the employee and the organisation.
• In the past, compensation issue was often confidential and governed by the employer’s preference and choices.
• In today’s competitive world, compensation issues are more transparent and every employee can make informed choice based on compensation packages.
• Measure of Justice, protection against potential job loss.
• It is viewed as a system of rewards to motivate employees, so the organisations can achieve intended goals and objectives.
• Compensation tends to vary widely around the business world.

IHRM 20MBAHR403

RIT MBA DEPT

INTRODUCTION TO COMPENSATION

• Compensation is the total amount of the monetary and non-monetary pay provided to an employee by an employer in return for work performed as required. (http://humanresources.about.com).

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

OBJECTIVES OF COMPENSATION

• Policy should be consistent with the overall strategy, structure and business needs of the international organization.
• Be Adequate - must work to attract and retain staff in those areas where the international organization has the greatest needs and opportunities.
• Be Cost Effective - should facilitate transfer of international employees in the most cost-effective manner for the firm and be easy to administer.
• Be Legal – Compensation decisions should be consistent with federal, state and local laws and regulations.
• Be Motivating - should be sufficient to motivate employees to high performance levels and reinforce desired behaviours.
• Be Equitable - employees should be made to feel that compensation system is equitable, External & Internal Equity.
• Provide Security – employees should be made to feel that their income is secure and predictable.

​

IHRM 20MBAHR403

RIT MBA DEPT

��INTERNATIONAL EMPLOYEE EXPECTATIONS & ORGANIZATION’S COMPENSATION POLICY�

• Employee will expect the policy to offer financial protection in terms of benefits, social security and cost of living in the foreign location.
• Employee will expect foreign assignment offers opportunities for advancement through income and/or savings.
• Employee will expect issues such as housing, education of the children and recreation to be addressed in the policy.
• Employee will have expectations in terms of career advancement and repatriation.

​

IHRM 20MBAHR403

RIT MBA DEPT

�KEY COMPONENTS OF INTERNATIONAL COMPENSATION�

• Base Salary 
• In a domestic context, base salary denotes the amount of cash compensation serving as a benchmark for other compensation elements.
• It is the basis for in-service benefits and pension contributions – may be paid in home or local-country currency.
• For expatriates, many allowances are directly related to base salary (e.g. foreign service premium, cost-of-living allowance, housing allowance)
• The base salary is the foundation block for international compensation whether the employee is a PCN or TCN.
• Major differences can occur in the employee’s package depending on whether the base salary is linked to the home country of the PCN or TCN, or whether an international compensation rate is paid.

​

​

IHRM 20MBAHR403

RIT MBA DEPT

�KEY COMPONENTS OF INTERNATIONAL COMPENSATION�

• Foreign Service Inducement
• Parent-country nationals often receive a salary premium as an inducement to accept a foreign assignment or as compensation for any hardship caused by the transfer. This is a sum of money that is simply a reward for being willing to move away from one's family to a new country.�
• Foreign service inducements are usually made in the form of a percentage of salary, 5-40% of base pay.
• Such payments vary, depending upon the assignment, actual hardship, tax consequences and length of assignment.

​

• More commonly paid to PCNs than to TCNs.

​

​

IHRM 20MBAHR403

RIT MBA DEPT

�KEY COMPONENTS OF INTERNATIONAL COMPENSATION�

• Allowances 
• Multinationals generally pay allowances in order to encourage employees to take international assignments and to keep employees ‘whole’ relative to home standards.
• Establishing an overall compensation policy can be very challenging, partly because of the various forms of allowances, such as:
• Cost-of-living allowance
• Housing allowance
• Relocation allowance
• Education allowance
• Home leave allowance
• Hardship allowance

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

�KEY COMPONENTS OF INTERNATIONAL COMPENSATION�

• Cost-of-living Allowances (COLA) 
• COLA receives the most attention, to compensate for differences in expenditures between the home country and the foreign country (e.g., to account for inflation differentials, currency fluctuations, etc.).
• To compensate for loss in purchasing power of money due to inflation. Rate of COLA is commonly pegged to a general index such as consumer price index (CPI).
• International comparison of cost of living is difficult and can be problematic.

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

�KEY COMPONENTS OF INTERNATIONAL COMPENSATION�

• Relocation Allowances 
• Usually cover moving, shipping and storage charges, temporary living expenses, subsidies regarding appliance or car purchases (or sales) and down payments or lease-related charges.
• Allowances regarding perquisites (cars, club memberships, servants and so on) may also need to be considered (usually for more senior positions, but this varies according to location).
• These allowances are often contingent upon tax-equalization policies and practices in both the home and the host countries.

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

�KEY COMPONENTS OF INTERNATIONAL COMPENSATION�

• Education Allowances 
• Expatriates’ children are an integral part of any international compensation policy.
• Allowances for education can cover items such as tuition, language class tuition, enrolment fees, books and supplies, transportation and uniforms.
• PCNs and TCNs usually receive the same treatment concerning educational expenses.  
• Allowances for Spouse Assistance 
• To help guard against or offset income lost by an expatriate’s spouse as a result of relocating abroad.
• Some firms may pay an allowance to make up for a spouse’s lost income.
• U.S. firms are beginning to focus on providing spouses with employment opportunities abroad, either by offering job-search assistance or employment in the firm’s foreign office (subject to a work visa being available).

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

�KEY COMPONENTS OF INTERNATIONAL COMPENSATION�

• Alternative Allowances 
• Housing alternatives may include:
• Company-provided housing, either mandatory or optional
• A fixed housing allowance
• Or assessment of a portion of income, out of which actual housing costs are paid.
• Home leave alternatives:
• Allow foreign travel rather than returning home
• Expatriates may become more homesick than others who return home for a ‘reality check’ with fellow employees and friends.
• Hardship Allowance

The hardship allowance is actually another foreign service premium added to the original one. It is based on not just having to go overseas, but where you go overseas. Hardship allowances are greatest when the expatriate is sent to places having poor living conditions, a vastly different culture, less access to good health care, etc.

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

�KEY COMPONENTS OF INTERNATIONAL COMPENSATION�

• Benefits 
• Support rendered to an expatriate in addition to the allowances provided. There are several types of benefits, more prominent examples being:

​

• Social Security Benefits (insurance, pension plans)
• Paid Vacations for expatriate and family
• Rest and Rehabilitation leave (especially for expatriates based in “hardship” assignment locations)
• Emergency Cases (severe illness, death)

​

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

�KEY COMPONENTS OF INTERNATIONAL COMPENSATION�

​

Issues Concerning Benefits 

​

• Laws governing private benefit practices differ from country to country, and firm practices also vary.
• In some countries, expatriates cannot opt out of local social security programs. In such circumstances, the firm normally pays for these additional costs.
• European PCNs and TCNs enjoy portable social security benefits within the European Union.

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

��APPROACHES TO �INTERNATIONAL COMPENSATION�

IHRM 20MBAHR403

RIT MBA DEPT

GOING RATE APPROACH

IHRM 20MBAHR403

RIT MBA DEPT

��APPROACHES TO �INTERNATIONAL COMPENSATION�

IHRM 20MBAHR403

RIT MBA DEPT

BALANCE SHEET APPROACH

IHRM 20MBAHR403

RIT MBA DEPT

��INTERNATIONAL LIVING COSTS DATA�

• Obtaining up-to date information on international living costs is a constant issue for multinationals.
• Multinationals using the Balance Sheet Approach must constantly update compensation packages with new data on living costs.
• Possible to take a wider view and focus on business costs rather than living costs for expatriates, because the multinational firm is interested in the overall cost of doing business in a particular country.
• Economic Intelligence Unit calculates such indices, which measure the relative costs of doing business in different economies by compiling statistics relating to wages, costs for expatriate staff, air travel and subsistence, corporation taxes, perceived corruption levels, office and industrial rents and road transport.

IHRM 20MBAHR403

RIT MBA DEPT

��DIFFERENTIATING BETWEEN PCNs & TCNs�

• Paying TCNs according to their home-country can be less expensive than paying all expatriates on a PCN scale (particularly if the multinational is headquartered in a country such as USA or Germany, which have both managerial salaries and a strong currency) .

​

• Common practice for multinationals to use a home-country Balance Sheet approach for TCNs. As the firms expand internationally, it is likely that TCN employees become more valuable and the firms need to rethink to compensate.

​

• Justifying these differences can be very difficult.

IHRM 20MBAHR403

RIT MBA DEPT

��MATCHING COMPENSATION POLICIES WITH STAFFING POLICIES�

• HRM activities can be aligned properly with the overall strategy for international growth.
• With regard to IHRM staffing strategies, a multinational can choose from four operations -
• Ethnocentric: where all key positions in the multinational company are filled by PCNs.
• Polycentric: where HCNs are recruited to manage subsidiaries in their own country and PCNs occupy positions in corporate headquarters.
• Geocentric: where the best people are sought for key jobs throughout the organization, regardless of nationality.
• Regiocentric: where staff may move outside their country for managerial positions but only within the particular geographic region.

IHRM 20MBAHR403

RIT MBA DEPT

��MATCHING COMPENSATION POLICIES WITH STAFFING POLICIES�

• If a multinational opts for an ethnocentric staffing policy for its foreign operations, the logical compensation policy would be to keep the PCN expatriate ‘whole’, the dysfunctional side of this policy (perceived lack of equity by HCN/TCN employees) would be less important or significant than the functional outcome of satisfied PCN employees.
• A multinational which adopts a polycentric staffing policy would opt to keep PCN expatriates ‘whole’. This would be less controversial with HCN employees, since a polycentric staffing strategy implies that most PCN assignments would be short-term consulting or training assignments.
• If a multinational aims to adopt a geocentric staffing policy, it is not logically consistent to keep PCN employees whole and ignore HCN and TCN dissatisfaction. To develop a worldwide selection pool of managers, it is necessary to have a compensation structure with standardized international base pay and allowances and premiums based on the country of assignments.

IHRM 20MBAHR403

RIT MBA DEPT

TAXATION

• Probably the one that causes the most concern to HR practitioners and expatriates, as taxation generally evokes emotional responses.

​

• Expatriates are subject to international taxation, and often have both domestic (home country) and host country tax liabilities.

​

• Administration of tax equalization policies is complicated.

IHRM 20MBAHR403

RIT MBA DEPT

Taxes

MNCs generally select one of the following approaches to tackle international taxation.

TAX EQUALISATION�TAX PROTECTION

IHRM 20MBAHR403

RIT MBA DEPT

TAX EQUALISATION

• Organisations withhold an amount equal to the home country tax obligation of the PCN and pay all taxes in the host country.

IHRM 20MBAHR403

RIT MBA DEPT

TAX PROTECTION

• The employee pays up to the amount of taxes he or she would pay on remuneration in the home country.
• In such a situation, the employee is entitled to any windfall received if the total taxes are less in the foreign country than in the home country.

IHRM 20MBAHR403

RIT MBA DEPT

���APPROACHES TO�HANDLING INTERNATIONAL TAXATION� �

Hypothetical Tax- Home country tax liability based on hypothetical income* as if the employee had not taken the assignment

Actual Home Country Tax Liability- The tax liability owing to the home country tax authority based on all income and benefits provided by the employer to the employee and taxable under the home country tax law

Assignment Country Tax Liability- The tax liability owing to the assignment country tax authority based on all income and benefits provided by the employer to the employee and taxable under the assignment country tax law

Under tax equalization,

• the employee is always responsible for (1), and
• the employer is always responsible for (2)+(3).

Under tax protection,

• the employee is responsible for the lower of (1) and (2)+(3)

��

​

​

IHRM 20MBAHR403

RIT MBA DEPT

��PATTERNS FOR INTERNATIONAL PAY�

Hierarchical pay vs

Egalitarian pay

Basis of pay

Universal Pay Level Local

Strategy

Context

C

O

M

P

O

S

I

T

E

Increasing standardization & portability of pensions

Increasing standardization & portability of benefits

Level 3:

Pay Forms & Administration

​

​

​

​

Level 2:

Pay Strategy, Practices & Systems

​

​

​

​

Level 1:

Pay Norms and Assumptions

• Firm

|

• Nation

|

• Group

|

• Job

|

• Person

​

​

​

IHRM 20MBAHR403

RIT MBA DEPT

CONCLUSION

• MNCs’ HR managers can choose the best candidate to assign to overseas operations regardless of whether the people are PCNs, HCNs or TCNs.
• Choice must be cost-effective in a way that maximizes overseas employees’ performance within organisation’s objectives.
• HR managers must also ensure that remuneration is fair among its labor pools of all managers regardless of nationality.
• Pay systems must conform to local laws and customs while fitting into global policies.
• Administrating expatriates compensation is difficult and time consuming.
• Providing a strategic yet sensitive balance can only be achieved by creating and maintaining professional networks, comprised of home office and local affiliate HR practitioners, outsourcing selected activities through specialist consultants, and a close cooperation with local and regional governments and other key local institutions.

IHRM 20MBAHR403

RIT MBA DEPT

REFERENCES

• International Human Resource management 4^th Edition – Peter J. Dowling & Denice E. Welch
• International Human Resource management – P.L. Rao

​

• http://catala.hautetfort.com/media/00/02/bc91e6ad1d48046c95adfb11e27fe1ea.pdf
• http://en.wikipedia.org
• http://www.expatexchange.com/lib.cfm?articleID=718

​

IHRM 20MBAHR403

RIT MBA DEPT

IHRM Module-4

​

​

Recruitment, Selection and Staffing in International Operations

RIT MBA DEPT

Staffing

The process by which organisations meet their human resource needs, including forecasting future requirements, recruiting and selecting candidates and orienting new employees.

RIT MBA DEPT

Staffing Involves

• Manpower Planning
• Recruitment
• Selection
• Training
• Development
• Performance Appraisal
• Transfers
• Promotions.

RIT MBA DEPT

Reasons for International Assignments

​

• position filling

​

• management development

​

• organization development

​

• Individual Motives (employee perspective)

RIT MBA DEPT

Staffing Needs

• Firms that centralize decision making at headquarters typically favor home-country managers
• Firms that decentralize decision making to the subsidiary level often employ host country nationals.
• Since most companies do not fall at one extreme or the other, most companies have a combination of both home and host country managers.

​

RIT MBA DEPT

TYPES OF GLOBAL EMPLOYEES

RIT MBA DEPT

Approaches to Staffing

​

• ethnocentric
• polycentric
• geocentric
• regiocentric

RIT MBA DEPT

• 1. Ethnocentric. The home country practice prevails with this approach. Headquarters from the home country makes key decisions, employees from the home country hold important jobs, and the subsidiaries follow the home country resource management practice. 
• �2. Polycentric. Each subsidiary manages on a local basis. A local employee heads a subsidiary because headquarters’ managers are not considered to have adequate local knowledge. Subsidiaries usually develop human resource management practices locally. 

​

RIT MBA DEPT

• �3. Geocentric or global. The company that applies the global integrated business strategy manages and staffs employees on a global basis. For example, Electrolux (the vacuum cleaner company) has for many years attempted to recruit and develop a group of international managers from diverse countries. These people constitute a mobile base of managers who are used in a variety of facilities as the need arises. 
• 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.����

​

RIT MBA DEPT

Ethnocentric

​

• few foreign subsidiaries have any autonomy and strategic decisions are made at headquarters

​

• key positions in domestic and foreign operations are held by headquarters’ personnel

​

• subsidiaries are managed by staff from the home country (PCNs).

RIT MBA DEPT

�Advantages & Disadvantages of Using PCNs �

RIT MBA DEPT

�Advantages & Disadvantages �of Using TCNs �

RIT MBA DEPT

Polycentrism

• subsidiary is treated as a distinct national entity with decision‑making autonomy

​

• subsidiaries are managed by local nationals (HCNs)

• HCNs are seldom promoted to positions at headquarters

​

• PCNs are rarely transferred to foreign subsidiary operations

RIT MBA DEPT

�Advantages & Disadvantages of Using HCNs �

RIT MBA DEPT

Geocentrism

​

• a global approach to its operations, recognizing that each part (subsidiaries and headquarters) makes a unique contribution

​

• world wide integrated business; nationality is ignored in favour of ability.

RIT MBA DEPT

Advantages of Geocentrism

​

• develops international executive teams and internal pools of labour

​

• overcomes federation drawback

​

• supports cooperation and resource sharing across units

RIT MBA DEPT

Disadvantages of Geocentrism

​

• host governments may utilize immigration controls in order to force HCN employment

​

• companies required to provide extensive documentation

​

• increased training and relocation costs

RIT MBA DEPT

Disadvantages of Geocentrism

​

• compensation structure with standardized international base pay

​

• large numbers of PCNs, TCNs, and HCNs need to be sent abroad

​

• requires longer lead time and centralized control of the staffing process

RIT MBA DEPT

Regiocentrism

• reflects the geographic strategy and structure of the MNE

​

• it utilizes a wider pool of managers but in a limited way

​

• staff may move outside their countries but only within the particular geographic region

​

• regional managers may not be promoted to headquarters positions but enjoy a degree of regional autonomy

RIT MBA DEPT

Advantages of Regiocentrism

​

• interaction between executives

​

• sensitivity to local conditions (staffed by HCNs)

​

• way to gradually move from a purely ethnocentric or polycentric approach to a geocentric approach

​

RIT MBA DEPT

Disadvantages of Regiocentrism

​

• can produce federalism at a regional rather than a country basis

​

• improves career prospects at the national levels

RIT MBA DEPT

A Philosophy Towards Staffing

The internal and external contingencies facing an internationalizing MNE influence its staffing practices

• managerial attitude
• degree of culture differences
• local government requirements
• foreign market
• maturity of operation
• organizational needs

RIT MBA DEPT

Examples

​

• Recruiting on a regional basis.
• For example, a U.S. based firm could create three regions;

Europe, the Americas, and Asia-pacific.

European staff would be transferred throughout the European region (say a Briton to Germany, a French national to Belgium, and a German to Spain).

Eg:Ford Motor Company.

• Disadvantage: produce federalism at a regional rather than a country basis and constrain the organization from taking a global stance.

​

RIT MBA DEPT

EXAMPLES

• Korean MNC's Hyundai, Samsung , Indian MNC's TCS, Infosys, Wipro. US MNC's GE, Citi corp, Exxon appoint a home country nationals to lead the foreign subsidiary. (Ethnocentric approach)
• US MNC's P&G, Pepsi, Coca cola. Indian MNCs Ranbaxy appoint a host country executive along with a home country executive to support or vice-versa (polycentric approach).

RIT MBA DEPT

�EXAMPLES

• Nestle, Unilever, HP, Nortel. Appoint the best person for the job irrespective of the nationality (Geocentric approach).

​

• Intel, Microsoft, Oracle, Sun Microsystems. Appoint the best host country national who has worked in the home country or at the headquarters.
• Electrolux (the vacuum cleaner company) has for many years attempted to recruit and develop a group of international managers from diverse countries. These people constitute a mobile base of managers who are used in a variety of facilities as the need arises.

​

RIT MBA DEPT

�Determinants of Staffing Choices

RIT MBA DEPT

Skills for an international Assignee

Skills and abilities necessary to do the job:

• Technical
• Managerial
• Functional

Skills and abilities necessary to work in foreign location:

• Adaptability
• Location-specific skills(language etc)
• Personal characteristics

IMPROVED CHANCES OF SUCCEEDING IN AN INTERNATIONAL JOB ASSIGNMENT

RIT MBA DEPT

Transferring Staff for International Business Activities

​

HRM implications

• reasons for using international assignments
• types of international assignments
• role of expatriates and non-expatriates
• role of inpatriates

RIT MBA DEPT

�Types of International Assignments�

​

Short term up to 3months

​

Extended up to 1year

​

Long term (traditional expatriate assignment) 1 to 5 years

​

RIT MBA DEPT

Short-Term Assignments

​

• take up to three months

​

• usually for troubleshooting, project supervision, or a stopgap measure

RIT MBA DEPT

Extended Assignments

​

• up to one year

​

• may involve similar activities as that for short term assignments

RIT MBA DEPT

Long-term Assignments

​

• traditional expatriate assignment varying from one to five years

​

• involving a clearly defined role in the receiving operation

RIT MBA DEPT

Differences Between Traditional & Short-term Assignments

RIT MBA DEPT

Recruiting methods in IHRM

• Apart from traditional methods, we come across
• Head hunters
• Cross national advertising
• E-recruitment

RIT MBA DEPT

“E-Recruitment

• The buzzword and the latest trends in recruitment is the “E-Recruitment”. Also known as “Online recruitment”, it is the use of technology or the web based tools to assist the recruitment process. The tool can be either a job website like naukri.com, the organisation’s corporate web site or its own intranet.
• The internet penetration in India is increasing and has tremendous potential. According to a study by NASSCOM – “Jobs is among the top reasons why new users will come on to the internet, besides e-mail.” There are more than 18 million resume’s floating online across the world.��

RIT MBA DEPT

E-Recruitment

• Use of technology or the web based tools to assist the recruitment process.
• The tool can be either a job website like naukri.com, the organization’s corporate web site or its own intranet.
• Companies advertise job vacancies through worldwide web.
• Job seekers place their CV’s in worldwide web, which can be drawn by prospective employees depending upon their requirements.

​

​

RIT MBA DEPT

The two kinds of e- recruitment that an organisation can use

�Job portals –posting the position with the job description and the job specification on the job portal and also searching for the suitable resumes posted on the site corresponding to the opening in the organisation. �Creating a complete online recruitment/application section in the companies own website. - Companies have added an application system to its website, where the ‘passive’ job seekers can submit their resumes into the database of the organisation for consideration in future, as and when the roles become available.

​

RIT MBA DEPT

Case Study

The Company

​

Orange is the key brand of France Telecom, one of the world's leading telecommunications operators. � France Telecom serves more than 177 million customers in five continents as of September 30, 2008, of which two thirds are Orange customers. The group had consolidated sales of 52.9 billion Euros in 2007 (39.9 billion Euros as of September 30, 2008). As of September 30, 2008 the group had 117.6 million mobile customers and more than 12 million broadband internet (ADSL) customers.

​

RIT MBA DEPT

Case overview

• Four years ago, Orange began to use online job boards and it also launched its first careers website, which has evolved to today’s comprehensive portal: www.orange.co.uk/jobs, as well as a number of recruitment micro sites such as www.orange.co.uk/retail.
• One of the biggest issues for the HR team at that time was the need to be able to share information more easily.
• The front-end of the jobs portal had to be easy-to-use and navigate. But it also required a system capable of the volume recruitment campaigns that was executed.
• Orange chose Step Stone’s i-Grasp to underpin the next generation of its recruitment portal, which was launched in 2005.

​

RIT MBA DEPT

• In adopting the new software, Orange was able to re-define its e-recruitment processes, a move that delivered a number of positive benefits.
• E-recruitment has helped Orange to dramatically cut it’s spend on recruitment by £1.1 million last year.

​

RIT MBA DEPT

Analysis and findings

• E-recruitment is experiencing phenomenal growth, according to the Recruitment Confidence Index (RCI) e-recruitment special. Almost 50% of employers now go on-line to fill their vacancies – nearly three times the number who used the internet three years ago.
• Newspaper advertisements may have worked to find top talent in the past but Internet recruitment sites are where the skilled individuals of the present and future are looking for jobs.
• Gaining occasional candidates for free by ensuring the e-recruitment website is easily found from the front page of the corporate website

​

​

RIT MBA DEPT

• E-recruitment can produce cashable savings.
• Retaining speculative and star candidates for the future, and then contacting them when an appropriate vacancy is advertised effectively generating applicants for free.
• Reduced Administration
• Allows line managers to view applications online and seamless transfer of candidate information to employee records.
• Time becomes an issue and you need to minimize time-to-hire or else face the risk of losing good candidates to competitors.
• Meet candidate expectations and be more professional �

RIT MBA DEPT

Conclusion

• Reach a wide pool of applicants
• Reach a niche pool of applicants
• Make internal vacancies widely known across multiple sites and separate divisions
• Provide the image of an up-to-date organization, reinforcing employer branding and giving an indication of organization culture
• Offer access to vacancies 24 hours a day, 7 days a week reaching a global audience
• Help handle high volume job applications in a consistent way
• Provide more tailored information to the post and organization. �

RIT MBA DEPT

Recommendation

• Integrate with other recruitment methods so that all recruitment ‘tools’ work in harmony.
• Evaluate and monitor use – get feedback from applicants about how they found the process and take appropriate actions.
• Keep content fresh – don’t display vacancies out of date vacancies. If you don’t have any, say you don’t have any.
• Avoid jargon and ‘company speak’ in advertisements.
• Have a policy on how to deal with unsolicited applications.
• Provide contact telephone numbers in obvious places for those having technical problems.
• Conduct research into the most appropriate job board to host vacancies.

​

​

RIT MBA DEPT

�Non-standard International Assignments�

​

Commuter go home every one to two weeks

​

Rotational commute for set period followed by in home country

​

Contractual specific skills employees hired for� 6 to 12 months on specific projects

​

RIT MBA DEPT

�Non-standard International Assignments�

Virtual

​

• employee manages international responsibilities from home country base

​

• relies on communications technologies such as telephone, email or video conferences

​

• frequent visits to the host country

​

RIT MBA DEPT

� Virtual Assignments �

Advantages

• overcoming high costs of international assignments
• fills shortage of mobile staff prepared to accept longer term postings

​

Disadvantages

• stress resulting from intensive travel commitments
• role conflict, dual allegiance, and identification issues
• interpersonal and work relationships

RIT MBA DEPT

Selection Criteria

• Technical Ability
• Cross cultural suitability
• Family Requirements
• Cultural/country requirements
• MNE Requirements
• Mode of operation involved
• Duration & type of Assignment
• Amount of knowledge transfer
• Launguages

RIT MBA DEPT

Selection Criteria for International Assignments

• Many criteria are used in selecting managers for overseas assignments including:

General Criteria

• Education
• Knowledge of local language
• Motivation
• Support of spouse & children
• Leadership

• Adaptability
• Independence
• Self-reliance
• Physical & emotional health
• Age
• Experience

RIT MBA DEPT

Selection Criteria for International Assignments

Applicants better prepare themselves for international assignments by carrying out the following three phases:

Other Considerations

• Focus on self-evaluation and general awareness include the following questions:

Is an international assignment really for me?

Does my spouse and family support the decision to go international?

• Collect general information on available job opportunities

Phase I

RIT MBA DEPT

Selection Criteria for International Assignments

Applicants better prepare themselves for international assignments by carrying out the following three phases:

Other Considerations

• Conduct a technical skills assessment – Do I have the technical skills required for the job?
• Start learning the language, customs, and etiquette of the region you will be posted
• Develop an awareness of the culture and value systems of the geographic area
• Inform your superior of your interest in the international assignment

Phase I

Phase II

RIT MBA DEPT

Selection Criteria for International Assignments

Applicants better prepare themselves for international assignments by carrying out the following three phases:

Other Considerations

Phase I

Phase II

Phase III

• Attend training sessions provided by the company
• Confer with colleagues who have had experience in the assigned region
• Speak with expatriates and foreign nationals about the assigned country
• Visit the host country with your spouse before the formally scheduled departure (if possible)

RIT MBA DEPT

International Human Resource�Selection Procedures

• Anticipatory Adjustment
• Training
• Previous experience
• In-country Adjustment
• Individual’s ability to adjust effectively
• Ability to maintain a positive outlook, interact well with host nationals, and to perceive and evaluate the host country’s cultural values and norms correctly
• Clarity of expatriate’s role in the host management team
• Expatriate’s adjustment to the organizational culture
• Non work matters

RIT MBA DEPT

The Relocation Transition Curve

1. Unreality

The feeling that the relocation

is a dream

2. Fantasia

The feeling of enchantment and excitement in the new environment

3. Interest

A deeper exploration of the environment and a realization that it is fundamentally different from home

5. Experimentation and

Testing of New Approaches

Practice phase – trying to do things differently Feedback of results – success and failure

4. Acceptance of Reality

“Letting go” of past comfortable attitudes and realizing you are a stranger in a strange land

6. Search for Meaning

Understanding reasons for success and failure. New models/personal theories created

7. Integration of New Skills and Behavior Acceptance of the new environment

1

2

3

4

5

6

7

RIT MBA DEPT

Selection Methods/Techniques

• Interviews
• Assessment Centers
• Situational interviews
• Work simulations
• Case studies
• In-basket exercises
• Monitoring and Targeting of Disadvantaged Groups
• Psychological Testing
• Other methods
• Observation
• Written tests (Intelligence tests and integrity tests
• Cultural intelligence tests

​

RIT MBA DEPT

Staffing Issues in IHRM

• INDIA
• USA
• JAPAN
• CHINA

RIT MBA DEPT

Discussion Questions

263

IHRM Chapter 4

​

1. Outline the main characteristics of the four approaches to international staffing.

​

2. Which factors determine the choice of a staffing approach? Would a MNE choose the same staffing approach worldwide? Place your arguments in the context of the model outlining determinants of staffing choices.

​

RIT MBA DEPT

Discussion Questions

264

IHRM Chapter 4

​

3. What are the reasons for using international assignments?

​

4. What is the role of inpatriates? Do inpatriates guarantee a geocentric staffing policy?

​

5. Why is it important to measure return on investment of international assignments? Which indicators can be used?

​

RIT MBA DEPT

Discussion Questions

265

IHRM Chapter 4

6. As a newly appointed Project Manager of a research team, you consider that you will be able to manage the project virtually from your office in London, even though the other six members are located in Munich. This will solve your personal dilemma as your family does not want to be relocated. The project has a six-month deadline. What factors should you need to consider in order to make this virtual assignment effective?

RIT MBA DEPT

Case: RBC Dexia Investor Services

Questions PART A

1. When two international companies like Renault and Nissan partner up in a joint venture many positions are double occupied. From a HR perspective how would you approach this problem? What are your options to solve this problem?

2. What are some of the other key HR challenges in an international partnership such as Renault from France and Nissan from Japan?

RIT MBA DEPT

Case: RBC Dexia Investor Services

Questions PART A

3. What are your options to fill the 300 additionally required jobs in the present Merger?

4. What kind of impression could the sudden and justification lacking announcement of changes at the top management level have on employees?

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RIT MBA DEPT

Case: RBC Dexia Investor Services

Questions PART B

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1. Based on the message from this note what are the consequences for employees wanting to move between RBC to RBC Dexia?

2. With regard to service history, pensions and benefits, what are the options for HRM to help employees wanting to move from RBC to RBC Dexia?

RIT MBA DEPT