HRMM and Performance Management and strategic Planning.ppt

Notes

1. Prof. Hiteshwari Jadeja
1
International Human
Resource Management/Global
HRM

2. What is International Human
Resource Management(IHRM)?
The Human resource Management concepts and
techniques employers use to manage the human
resource challenges of their international
operations
17–2

3. Intercountry Differences Affecting
HRM
Cultural Factors
Economic Systems
Legal and Industrial Relations Factors
The European Union
Human Resource Management, 5E3

4. IntercountryDifferences Affecting
HRM
Cultural Factors
Perceptions of “US” managers vs. other countries
Examples:
U.S. Managers are more concerned with getting the
jobs done.
Chinese Managers are more concerned with
maintaining a harmonious environment.
Hong Kong Managers fell between these extremes.
Compared to U.S. employees, Mexican workers
expect managers to keep distance and be formal
When the workload increases, Australian and
Singaporean firms add more staff while Korean and
Japanese firms insist existing staff to work for longer
hours.

5. Cont….
Economic Systems
Difference in labor costs are substantial
Examples:
Some countries in Euro zone put more restrictions
on the number on hours an employee can work.
Portuguese workers average about 1980 hours of
work annually while German workers average 1648
hours.
Differences in labour cost are also substantial:
Compensation costs for production workers in
Mexico is $2.75, in Taiwan is $6.43, in US is $23.82,
in UK is $27.10, in Germany is $34.21
Workers in France can expect two and half days of
paid holiday per full month of service. Germans get
about 18 vacation days per year.
5

6. Cont…..
Legal and Industrial Relations Factors
Examples:
U.S. Employment at will does not exist in Europe,
where firing or laying off workers is usually expensive.
After expanding in Germany, Walmart discovered that
Germany’s commercial laws discourage ads based on
price comparisons. They soon left Germany.
The European Union
Must consult workers about certain corporate actions
such as mass layoffs
Examples:
In England, written statement is required about the
details of the employment i.e. rate of pay, hours of
work, etc.
Germany doesn’t require a written contract.
6

7. 7
A Model of IHRM

8. 8
What does IHRM add into the
Traditional Framework of HRM?
Types of employees
HCNs
PCNs
TCNs
Human resource activities
Procurement
Allocation
Utilization of human resources
Nation/country categories where firms expand and
operate
Host country
Parent country
Third country

9. Sources of Global Recruitment
Parent Country Nationals:
Citizens of the country in which the multinational
company has its headquarters.
Host Country Nationals:
Employees of the company’s subsidiary who are the
citizens of the country where the subsidiary is
located.
Third Country National:
For eg: Mr. Akhil-an Indian citizen-is working for an
American subsidiary in France. Mr. Akhil for the
American subsidiary in France is called third
country national.

10. The Advantages and Disadvantages of
Using PCNs, TCNs and HCNs
Human Resource Management, 5E10

11. 11
Differences between Domestic HRM
and IHRM
More HR activities
The need for a broader perspective
More involvement in employees’ personal lives
Changes in emphasis as the workforce mix of
expatriates and locals varies
Risk exposure
Broader external influences

12. More HR Activities
Human Resource Management, 5E12
Human Resource Planning
Difficulty in implementing HR procedure in host countries.
Difficulty in aligning strategic business planning to HRP and vice-versa.
Providing developmental opportunities for international managers.
Employee Hiring
Ability to mix with organisation’s culture.
Ethnocentric, polycentric or geocentric approach to staffing.
Selection of expatriates.
Coping with expatriate failures.
Managing repatriation process.
Training and Development
Emphasis on cultural training
Language training
Training in manners and mannerisms.

13. More HR Activities
Human Resource Management, 5E13
Compensation
Devising an appropriate strategy to compensate expatriates.
Minimising discrepancies in pay between parent, host and third country
nationals.
Issues relating to the re-entry of expatriates into the home country.
Performance Management
Constraints while operating in host countries need to be considered.
Physical distance, time difference and cost of reporting system add to the
complexity.
Identification of raters to evaluate subsidiary performances.
Industrial Relations
Who should handle industrial relations problem in a subsidiary?
What should be the attitude of parent company towards unions in a
subsidiary?
What should be union tactics in subsidiaries?

14. Cont’d
More HR activities
Tax equalization
Relocation & orientation
Administrative services
Host government relation
Language translation
The need for a broader perspective
More than one national group of employees
working.
14

15. Cont’d
More involvement in employees’ personal lives
Schooling, housing
Banking, investment
Recreational program
Changes in emphasis as the workforce mix of expatriates
and locals varies
As operations matures
Local staff availability
Taxation, relocation, orientation
Staffing, training & development
15

16. Cont’d
Risk exposure
Expatriate failure
Under performance
Higher cost of failure –direct & indirect
Terrorism
Broader external influences
Type of government
Developed / developing country
16

17. Basic Functions in International HRM
Human Resource Management, 5E17
HRP
Recruitment and Selection
Training and Development
Performance Management
Remuneration
Repatriation
Employee Relations
ORGANISATIONAL EFFECTIVENESS

18. Six Key Issues in IHRM
Human Resource Management, 5E18
Identifying top-management potential early.
Identifying critical success factors for future
international managers.
Providing developmental opportunities.
Tracking and maintaining commitment to individuals
in international career paths.
Tying strategic business planning to HRP and vice-
versa.
Dealing with multiple business units while
attempting to achieve globally and regionally
focused (e.g. European or Asian) strategies.

19. The Expatriate Assignment Life Cycle
Human Resource Management, 5E19
Determining
the Need for
Expatriate
The
Selection
Process
Crisis and
failure
Crisis and
Adjustment
Repatriation
and
Adjustment
Departure
Pre-assignment
Training
Post-arrival
Orientation and
Training
Reassignment
Abroad
or
or

20. IBUS 618 Dr. Yang20
Approaches to Staffing
Factors affecting approaches to staffing
General staffing policy on key positions at
headquarters and subsidiaries
Constraints placed by host government
Staff availability
Ethnocentric
Polycentric
Geocentric
Regiocentric

21. Ethnocentric
Strategic decisions are made at
headquarters;
Limited subsidiary autonomy;
Key positions in domestic and foreign
operations are held by headquarters’
personnel;
PCNs manage subsidiaries.

22. 22
Polycentric
Each subsidiary is a distinct national
entity with some decision-making
autonomy;
HCNs manage subsidiaries who are
seldom promoted to HQ positions;
PCNs rarely transferred to subsidiary
positions.

23. 23
Geocentric
A global approach -worldwide integration;
View that each part of the organization
makes a unique contribution;
Nationality is ignored in favor of ability:
Best person for the job;
Color of passport does not matter when it comes to
rewards, promotion and development.

24. IBUS 618 Dr. Yang24
Regiocentric
Reflects a regional strategy and structure;
Regional autonomy in decision making;
Staff move within the designated region,
rather than globally;
Staff transfers between regions are rare.

25. Factors in Expatriate Selection
Human Resource Management, 5E25
Technical
Ability
Cross-Cultural
Suitability
Family
Requirements
Country-
Cultural
Requirements
Language
MNC
Requirements
Selection
Decision
Individual
Situation
Specific
Situation

26. © 2005 Prentice Hall Inc. All
rights reserved.
17–26
Why Expatriate Assignments Fail
Personality
Personal intentions
Family pressures
Inability of the spouse to adjust
Inability to cope with larger overseas
responsibility.
Lack of cultural skills

27. Reasons for Expatriate Failure
Human Resource Management, 5E27
US Firms Japanese Firms
•Inability of spouse
•Inability to cope with larger
international responsibilities
•Manager’s inability to adjust •Difficulties with the environment
•Other family reasons •Personal or emotional problems
•Manager’s personal or emotional
maturity
•Lack of technical competence
•Inability to cope with larger
international responsibilities
•Inability to spouse to adjust

28. IBUS 618 Dr. Yang
Culture Shock Cycle

29. © 2005 Prentice Hall Inc. All
rights reserved.
17–29
Helping Expatriate Assignment
Succeed
Providing realistic previews of what to expect
Careful screening
Improved orientation
Cultural and language training
Improved benefits packages

30. Components of Expat Compensation
Human Resource Management, 5E30

31. © 2005 Prentice Hall Inc. All
rights reserved.
17–31
Compensating Expatriates
The “Balance Sheet Approach”
Equalize purchasing power across countries
Home-country groups of expenses—income taxes,
housing, goods and services, and discretionary
expenses—are the focus of attention.
The employer estimates what each of these four
expenses is in the expatriate’s home country, and
what each will be in the host country.
The employer then pays any differences such as
additional income taxes or housing expenses.

32. © 2005 Prentice Hall Inc. All
rights reserved.
17–32
Incentives
Foreign service premiums
Financial payments over and above regular base
pay, and typically range between 10% and 30% of
base pay.
Hardship allowances
Payments to compensate expatriates for
exceptionally hard living and working conditions at
certain foreign locations.
Mobility premiums
Lump-sum payments to reward employees for
moving from one assignment to another.

33. IBUS 618, Dr. Yang33
Components of Effective Training
Cultural awareness programs
Preliminary visits
Language training
Practical assistance
Training for the training role
TCN and HCN expatriate training
Non-traditional assignments and training

34. The Repatriation Process
Human Resource Management, 5E34
Preparation
Physical
Relocation
Transition
Re-adjustment
Repatriation
Process

35. Thank You
Human Resource Management, 5E35