Chapter 11 Human Resources Management

Global Human Resource Management

Differences in Global Environment

1. Differences in worldwide labor markets

Mix of workers

Labor Costs

Companies

2. Differences in worker mobility Obstacles include:

Physical

Economic

Legal

Cultural

3. Differences in managerial practices - conflicts

4. Difference between national and global orientations

5. Managing diverse people in faraway places is difficult

Host Country Nationals

Locals - natives of the country in which they work

Example: Chang Li-born and raised in China, works in China

Expatriates

People who live and work outside their native countries

Example: Jay Gomez was born and raised in Mexico, but he worked in the US

Parent Country Nationals

Home country nationals. Expatriates from the country in which their company is headquartered

Example: An Italian working in Germany for an Italian company

Third Country Nationals

Expatriates from countries other than the home or host country

Example: A Russian working in France for a German company

Ethnocentric

Hire natives of the parent country for key positions

Best when:

New technology is being introduced

Prior Experience is important

Undeveloped countries need someone to train and       develop the employees

Disadvantages: - Deprives local workers of positions

Lowers morale and productivity of local workers

Natives may not understand culture

May benefit the less-developed country

Polycentric

Hires natives of the host country for key positions

Host country managers rarely advance to corporate headquarters as natives are preferred

Advantages: Local manage where they are prepared

More economic-readily available and less expensive

Helpful in politically sensitive situations

Allows for continuity of management

Disadvantages: Cultural gap between subsidiary manager and headquarter managers

Limited Opportunities for advancement

Company decision makers have little international experience

Regiocentric

Hires managers from various countries within the geographic regions

Advantage:

Adaptable to fit company and product strategies

Disadvantages:

Managers from the region may not understand the view of managers at headquarters

Corporate headquarters may not employ enough managers with international experience

Geocentric

Uses best available managers without regard for their countries of origin

Advantages:

Worldwide strategy of business integration

Allows development of international managers

Reduces national bias

Disadvantages

Most governments want hires from the host country

Approval for non-natives to work is difficult in some countries

Expensive to implement:

Training and employee development

Relocation expenses

Centralization of Human Resources Management

Longer lead times before employees can be transferred

Selecting and Hiring Staff

Employment forecasting-estimating in advance the types and numbers of employees needed

Supply Analysis-Determining if there are sufficient types and numbers of employees available

Job Description-Document including

Job identification

Job Statement

Job Duties

Responsibilities

Job Specification

Requirements

Recruiting

Announce the job

Post the job

Circulate within the company first - internal hire

Circulate the job outside the company

State government employment service is often used for unskilled or semiskilled positions

Public or private companies are used for skilled, technical, or managerial openings

Headhunter-specialized recruitment firm used for high ranking managerial positions

Charge a large fee

Selecting Qualified Employees

Best Applicant-person with the highest potential to meet the job expectation.

3 Major Factors of Selection:

Competence

Adaptability

Personal Characteristics

Competence

Ability to perform

Dimensions:

Technical Knowledge

Experience

Leadership/Management Skills

Collaboration

Understanding of Culture

Adaptibility

Ability to adjust to different conditions

Interest in international business

Relational-to feelings, thoughts, attitudes of others.

Understanding of others

Ability of family to adjust

Personal Characteristics

Maturity

Education

Gender (Example: Saudi Arabia-women aren’t business associates)

Social Acceptability

Diplomacy

Health

Family

Maximization of Human Resources

Training and Development are Critical

Major expense so balance need with benefits

Some countries require training and development of their employees

Helps a company be more successful

Types of Training and Development

Job-Related Training

Economic

Legal

Political

Company

Language and Relationship Issue

Cross-Cultural Training

Currency

Foods/Costs

Housing

Spousal Employment Counseling

Why Global Employees Fail

Unable to adjust

Spouse or family unable to adjust

Emotional maturity

Unable to work productively

Unable to accept new responsibilities

Lack of motivation

Lack sufficient technical competence

Reducing the Chance of Employee Failure

Select successful, satisfied workers

Provide training and development before/after

Make it a long-term employee development

Provide adequate communication

Provide a job using international experience when returning home

Train managers to value international experience

Retaining Human Resources

Employee Motivation is NOT universal

It varies from culture to culture

US value individualism, possessions, risks, $

Recognition

Japan - collectivism - harmony - does not like recognition personally

Compensation

North American & European reward based on type of work performed and skills required

Singapore and Hong Kong-reward individual performance and skill

Japan - Age, seniority, group or company performance determine wages

Cultural Sensitivity - Motivate their way

Each country/culture is motivated differently

Cash and noncash items.

Some give discounted services, products

Europe-often lunches and transportation are part of their package.

Developing countries -rice and flour can be part of their package

Base Salary

Maintains customary standard of living of employee and his/her family while living abroad

Expatriate Bonus

Pay premium to persuade an employee to work abroad

Cost of Living Adjustment

Basic living costs vary greatly around the world-this adjusts to their costs

Employee Benefits

Fringe benefits. For Taxes, Government Insurance, education and medical

Employee Performace Evaluations

3 influencing factors

The Environment

The Task

The Individual’s Personality

Ethnocentric Approach

Parent Country Nationals set and administer evaluations

Polycentric Approach

Host Country Nationals set and administer evaluations

Problems with Employee Performance Evaluations

Misunderstandings

May be viewed as

Threatening

Insulting

Evidence of lack of trust

Repatriation

Process a person goes through when returning home after working abroad.

Reverse Culture Shock-Difficult reacquainting with native culture.

Work

Finances

Social Relationships

Plan ahead - (before they go) good communication, suitable jobs using international skills