SHRM Workplace

Managing a Global Workforce

Focuses on the role of the HR professional in managing global and mobile workforces to achieve organizational objectives.

Globalization

The status of growing interconnectedness and interdependency among countries, people, markets, and organizations worldwide.

Push Factors

Organizations may have been pushed toward globalization in reaction to changes in the business environment .

• New Markets - When domestic market opportunities are exhausted, organizations look overseas for new customers and opportunities. 

• Cost Pressures and Competition - Globalization has become a way to cut costs and maintain profitability—for example, through offshoring for labor or to move production closer to markets. 

• Natural Resources and talent supply - Sometimes it is more economical to relocate operations closer to new sources of necessary resources. 

• Government Policies - Relocation may be due to burdensome laws or regulations, or may exploit opportunities only available in other markets/regions. (This strategy can be risky and can lead to a backlash in public relations.) 

• Trade agreements - When foreign competitors gain access to domestic markets, local firms are compelled to expand their markets elsewhere. 

• Globalized supply chain - Organizations might discover that following a client or customer overseas makes more business sense than maintaining domestic or existing production/facilities.

Pull Factors

Organizations may have been pulled toward change through the promise of achieving greater organizational value through globalization

• Strategic control - A multinational presence can give an organization greater control over its business (production, branding, sector consolidation, etc.). 

• Government policies - National policies that promote economic expansion (for example, China’s “Going Out” policy)—could include tax incentives, special financing terms, or investor risk insulation. 

• Trade agreements - These agreements can open markets and promote workforce mobility; they can also lower risks by enforcing laws, regulations, and treaties (for example, intellectual property protections).

Perlmutter’s Four Multinational Corporation Orientations

• Ethnocentric - There is “one best way” – Headquarters maintains tight control over subsidiaries, who are expected to follow the strategic pattern, values, policies, and practices expressed by headquarters.

• Polycentric - There are “many best ways” – Subsidiaries are allowed a large measure of independence as long as they are profitable.

• Regiocentric - Subsidiaries are grouped into regions (such as Europe, North America, or Asia-Pacific).

• Geocentric - Subsidiaries are neither satellites taking orders nor independent bodies setting their own course. Headquarters and subsidiaries are participants in a network, each contributing its unique expertise.

Global Integration (GI)

A globalization strategy that emphasizes consistency of approach, standardization of processes, and a common corporate culture across global operations.

Assignees

Employees who work outside their home countries

Local responsiveness (LR)

emphasizes adapting to the needs of local markets and allows subsidiaries to develop unique products, structures, and systems.

Four Drivers of Globalization Strategy

• Market

• Cost 

• Governmental 

• Competitive

Multinational Enterprises (MNEs)

Organizations that own or control production or service facilities in one or more countries other than the home country

International (Types of Globalization Strategies)

A firm exports a product or service to foreign countries. The company may open production facilities or service centers, but the product/service, processes, and strategy are developed in the home country.

Multidomestic (Types of Globalization Strategies)

The organization is a decentralized portfolio of subsidiaries. Goals and strategies are developed locally in response to competitive demands. Knowledge is shared on a local rather than a global level.

Global (Types of Globalization Strategies)

The firm views the world as a single global market and offers global products that have little or no national variation or that have been designed with customizable elements. Strategy, ideas, and processes emanate from headquarters.

Transnational (Types of Globalization Strategies)

The firm locates its value chain activities in the most advantageous geographic locations. Subsidiaries are allowed to adapt global products and services to local markets. Best practices and knowledge are shared throughout the organization.

Identity alignment

Extent to which diversity is embraced in the management of people, products/services, and branding.

Process alignment

Extent to which underlying operations such as IT, finance, or HR integrate across locations

Outsourcing (Contracting out)

A practice where a company transfers portions of work to outside suppliers rather than completing it internally.

Offshoring

The practice of relocating processes or production to another country.

Onshoring (home-shoring)

Refers to the relocation of business processes or production to a lower-cost location inside the same country as the business, allowing employees to work from home

Near-shoring

 a company contracting a part of its business processes or production to an external company located in a country that is relatively close.

What is a Center of Excellence Team?

A team made up of individuals with specialized skills, expertise, and knowledge.

Strategic-Systematic:

• Approach global assignments as long-term investments

• Develop future executives with essential global perspectives and experiences to formulate and implement competitive strategies 

• Increase the effectiveness of critical coordination and control functions between and among the home office and foreign operations

• Effectively disseminate information, technology, and values throughout the worldwide organization

Tactical-reactive

• Approach global assignments as short-term expenses

• Focus on a quick-fix approach to a short-term problem in a foreign operation

• Randomly and haphazardly perform some functions of assignments and focus attention as problems arise. 

• Fail to systematically integrate the worldwide organization in terms of values, technology products, and brand

Types of Global Assignments

• Globalists - Spend their entire careers in international assignments, moving from one locale to another

• Local hires - Hired locally in subsidiary countries (and are also known as HCs, host-country nationals)

• Short-term assignees - On assignments for less than a year but more than a few weeks, often without moving the family.

• International assignees - traditional expatriates on full relocation assignments lasting from one to three years

• Commuters - Travel across a country border for work regularly 

• Just-in-time expatriates - As HOC or contract workers hired for a single assignment

Global Assignment Process

• Assessment and Selections

• Management and Assignee Decision

• Pre-departure preparations

• On assignment

• Completing the assignment (Repatriation & Redeployment)

Assessment and Selections

• To ensure that the organization has the right people in the right place at the right times.

  • Develop the selection criteria

  • Involve the right people 

  • Choose the best selection methods and tools

  • Complete the assessment/make a recommendation

Management and Assignee Decision

• Once the candidate has been selected, the organization has the information it needs to engage in due diligence regarding the cost, benefits, logistics, and other aspects of a global assignment.

  • Analysis of the costs and benefits of the assignment 

  • Preparation of the assignment plan

  • Candidate acceptance or rejection of the assignment offer

Pre-departure preparations

• Organizations that don’t use the services of third-party vendors should create a pre-departure checklist to anticipate and address all the key issues to be resolved before the assignee leaves the home country

  • Visas and work permits 

  • Security Briefings 

  • Cross-Cultural Counseling 

On assignment

• Assignees can have several distinct phases when adapting to a new location

  • Honeymoon

  • Culture shock

  • Adjustment

  • Mastery

Repatriation (Completing the assignment)

Process by which employees returning from international assignments reintegrate into their home country’s culture, conditions, and employment

Redeployment (Completing the assignment)

Process by which an organization moves an employee out of an international assignment; can involve moving back to the home country, moving to a different global location, or moving to a new location or position in the current host country.

Risk Management

Is the identification, assessment, and prioritization of risks, and the application of resources to minimize, monitor, and control the probability and impact of those accordingly.

Risk

uncertainty that has an effect on an objective, where outcomes may include opportunities, losses, and threats.

Known knowns

Events that are to be expected and so involve little uncertainty

Known Unknowns

Uncertainties that we know exist but we don’t know much about their probability or impact

Unknown Unknowns

Risk that we don’t know exists. They are the events that “blindside” an organization (or individuals or entire cultures)

Kaplan and Mikes’s Categories of Risk

• Internal and Preventable - Come from within the organization and could include violations of ethics and failures in routine processes

• Strategy - When an organization is willing to take on a certain amount of risk when it commits to a strategy. This willingness to accept risk is based on an assessment of potential benefits that can be reaped from a successfully executed strategy.

• External - Come from outside the organization and beyond its control.

Risk quadrants

• Strategic - Risks that affect the organization’s ability to achieve its objectives 

• Operational - Risks that affect the myriad ways in which the organization creates value 

• Financial - Risks that affect the accuracy and timeliness of information about the organization’s financial performance and condition

• Hazard - Risks that have the potential to cause physical harm to property or people in the immediate and long term

Barriers to risk management

• Structural 

• Cognitive 

• Cultural

Risk Management Process

• Establish the context of risk

• Identify and analyze risks

• Manage Risks

• Evaluate

PESTLE Analysis

Searches for environmental forces organized under specific categories - political, economic, social, technological, legal, and environmental - to better understand organizational threats and opportunities.

Risk Position

The organization’s desired gain or acceptable loss in value.

Risk appetite or risk tolerance

The amount of uncertainty the organization is willing to pursue or to accept to attain its risk management goals.

Single loss expectancy

The expected monetary loss every time a risk occurs. (= asset valve (AV) * Exposure Factor (EF))

Annualized loss expectancy (ALE)

The expected monetary loss for an asset due to a risk over a one-year period. (= Annualized rate of occurrence (ARO) * Single loss expectancy (SLE)).

Moral hazard

Exists when one party engages in risky behavior knowing that it is protected against the risk because another party will incur any resulting loss

Principal-agent problem (or agency dilemma)

An economic concept often associated with moral hazard in employment. The problem arises when an agent (such as an employee) makes decisions or takes actions on behalf of a principal (an employer/owner) but has personal incentives that may not align with those of the principal.

Conflict of Interest

A person or organization has the potential to be influenced by two opposing sets of incentives, exemplified in both moral hazard and the principal agent dilemma.

Risk Control

An action taken to manage a risk 

Mutually exclusive and comprehensively exhaustive (MECE)

The organization wants to be confident that is has identified all plausible risks for all strategic and operational aspects of its business but it wants to avoid duplication or overlapping in the identification

Duty of care

 Organizations should take all steps that are reasonably possible to ensure the health, safety, and well-being of employees and protect them from foreseeable injury.

Hazard

The potential for harm, often associated with a condition or activity that, if left uncontrolled, can result in injury or illness.

Risk Scorecard

A tool used to gather individual assessments of various characteristics of risk (examples: loss or gain for the organization, degree of impact, etc)

Risk Matrix

A simple grid in which the horizontal axis represents the probability that an event will occur and the vertical axis relates to the severity of the impact on the organization or function if the event occurs.

PAPA Model

A grid where the vertical axis considers the speed of change and the horizontal access the degree of likelihood.

• Prepare (Top left) - Events are not likely to happen but will materialize quickly if they do occur

• Act (Top right) - Events are both highly probable and fast-moving meaning these threats and opportunities require immediate responses in terms of enhancing the chances for opportunities and decreasing the chances of a threat occurring or creating significant damage. 

• Park (Bottom left) - Events are slow-moving and unlikely.

• Adapt (Bottom right) - Events are actually slowly materializing trends that may affect the organization significantly

Key Risk Indicators (KRIs)

Important metrics or predictors that provide an early warning signal of an organization’s increased or increasing risk exposure. 

Risk Management Tactics

• Avoidance - The decision not to become involved in or action to withdraw from a risk situation

• Reduction - The actions taken to lessen the probability, negative consequence, or both associated with a risk. 

• Sharing - Sharing with another party the burden of loss or benefit of gain for a risk

• Retention - The acceptance of the burden of loss or benefit of gain for a risk

Upside Risk Management Tactics

Optimize, share, enhance, or ignore

Downside Risk Management Tactics

Avoid, transfer, mitigate, or accept

Taking no Action

An organization decides to ignore or pass up possible opportunities or to accept the occurrence of a threat.

Residual Risk

The amount of uncertainty that remains after all risk management efforts have been exhausted.

Contingency plan

A protocol that an organization implements when an identified risk event occurs

After-action debrief

Comes from the discipline of emergency management, and it is usually applied to meetings to examine the effectiveness of a risk response strategy, such as workplace evacuations, in-place lockdowns for security reasons, a workplace injury or act of violence, or temporary relocation of operations.

Whistleblowing

The reporting of an organization’s violations of policies and processes by employees, applied directly to risk management.

Quality assurance (QA)

The actions an organization takes to be sure that it is performing work according to the standards it has set and that it is using specified processes correctly and completely.

Continuous improvement

equates to organizational approaches to improve and maintain the quality of risk management processes

Corporate Social Responsibility (CSR)

Represents the organization’s commitment to operating ethically and contributing to economic development while improving the quality of life of the workplace and its families as well as of the local and global community

Maturity curve (or maturity model)

A framework that assesses an organization’s or system’s progression, moving from a basic, unstructured, or reactive state to an advanced, optimized, and strategic one.

Phases of the CSR maturity curve

• Compliance - This is a defensive posture. Social responsibility is seen as a cost of doing business - a tactical response to regulatory requirements or negative publicity. Efforts may be a means of demonstrating good corporate citizenship, but they rarely align with core corporate strategy 

• Integration - CSR Is integrated into the regular functioning of the business. These organizations have redesigned their products or services and their processes and procedures to be more responsible and sustainable.

• Transformation - These organizations have redefined themselves and their brand to reflect a commitment to CSR. This becomes part of a strategy to differentiate the organization from its competitors.

Four Key HR opportunity areas

• Culture Change

• Corporate strategy 

• Organization effectiveness

• Human Capital Development

Compliance

Being in accordance with all national, federal, regional, or local laws, regulations, and the government authority requirements for all the locations in which the organization operates

Ethics

A set of behavioral guidelines that an organization expects all of its directors, managers, and employees to follow to ensure appropriate moral and ethical business standards

Governance

The system of rules and processes an organization puts in place to ensure its compliance with local and international laws, accounting rules, ethical norms, and environmental and social codes of conduct

Sustainability

Practice of purchasing and using resources wisely by balancing economic, social, and environmental concerns, with the goal of securing the interests of present and future generations

Three Spheres of Sustainability

Planet (Environmental), People (Social), & Profits (Economic)

A traditional corporate profit and loss (P&L) statement, or income statement

measures the costs of all of an organization’s projects and activities (for example, the costs of producing, distributing, and selling a product or service) and balances them against the income derived from those activities in order to determine the organization’s “bottom line” profit or loss—the organization’s value 

Triple bottom line

 applies the 3 Ps principle of sustainability (people, planet, profits), arguing that the environmental and social costs and benefits generated by an organization should be considered as well. can be viewed as the performance measurement of an organization pursuing a strategy of CSR or sustainability (the terms are sometimes used interchangeably); its goal, then, is to achieve a positive ROI (return on investment) in each of the three areas (Social, environmental, & economic). It can also serve as an organizing principle for a scorecard or checklist of measures for evaluating whether and/or how to pursue a given project so as to meet sustainability goals.

Social Audit

A formal review of an organization’s social and environmental policies and procedures, or a technique to understand, measure, verify, report on, and to improve the social performance of the organization

CSR Strategic Process

1. Executive Commitment - buy-in at the highest level - demonstrating that it has business value

2. Assessment - aims to provide a detailed picture of where the organization is at present and - by “Framing” that picture within the context of existing CSR guidance, templates, and initiatives already reviewed– also visualize the direction in which the organization can go.

3. Infrastructure Creation - Involves creating the infrastructure that will be responsible for guiding, overseeing, administering, reviewing, and championing the CSR strategy.

4. Plan Implementation - Key tasks in this step are: set the strategy, set priorities and objectives, and implement the action plan created.

5. Measurement, Reporting, and Evaluation - Should be keyed to the specific objectives set in the fourth step

6. Reassessment and Revision - Based on the evaluation of results, tactics, and strategic goals should then be revised

Philanthropy

the private investment of resources—including time, money, and expertise—for the public good. (Making charitable donations, sponsorships, or forming strategic partnerships)

Employee Volunteerism

Direct involvement by employees in volunteer efforts can have considerable strategic benefits

U.S. Employment Law & Regulations

Refers to the knowledge and application of all relevant laws and regulations in the United States relating to employment - provisions that set the parameters and limitations for each HR functional area and for organizations overall.

Sources of Law - Federal Level

• The Constitution - the highest law in the country and the foundation on which all U.S. law has been built 

• Statutes - Actions passed by legislative bodies such as Congress and state legislatures, and by local government units such as cities and counties.

• Regulations - Proposed, adopted, and enforced by administrative agencies to which government units have delegated specific rule-making authority.

• Agency Guidelines - Interpret how laws and regulations will be enforced (policy statements, letters, advisory materials, etc)

• Executive orders - A directive by the chief executive of a governmental unit telling that governmental unit how it will act or interact with members of its community.

• Common Law - Based on court decisions, rather than statutory law, and is recognized on the federal level and in whole or in part in nearly all states.

Employment practices liability insurance (EPLI)

A type of liability insurance covering an organization against claims by employees, former employees, and employment candidates alleging that their legal rights in the employment relationship have been violated. (Typically structured as gap insurance

What is the purpose of EPLI?

To protect a business against the risk of heavy financial losses resulting from employment claims and lawsuits.

Attorney-Client Privilege

A discussion between a client and an attorney related to securing legal advice is considered “privileged and confidential” and is not subject to the discovery process (in which each party learns the facts about the other side’s case)—within certain limits

Immigration Reform and Control ACT (IRCA)

(1986) was designed to accomplish two somewhat divergent purposes. IRCA prohibits discrimination against job applicants on the basis of national origin or citizenship and, at the same time, establishes penalties for hiring undocumented workers, with certain exceptions

Immigrant Visas

Referred to as “green cards” and are permanent

• First preference—Priority Workers: EB-1. Employers do not need to test the U.S. labor market (or file a labor certification application) to determine that there are no minimally qualified U.S. workers for these jobs.

• Second preference: EB-2. In most cases for this category, employers must test the U.S. labor market through a labor certification application to determine whether there are minimally qualified U.S. workers for the position. Foreign nationals in this category are required to have a job offer. The job must require at least a master’s degree or equivalent.

• Third preference: EB-3. This category is for jobs that require at least a bachelor’s degree or skilled worker positions that require at least two years of training or experience. (A small number of EB-3 immigrant visas are available to unskilled workers.) Employers are required to complete the labor certification process for people in the EB-3 category.

• Fourth preference: EB-4. The EB-4 category is unique and caters to a diverse range of individuals. To qualify, individuals must meet specific criteria related to their unique circumstances and qualifications.

• Fifth preference: EB-5. The EB-5 category is aimed at immigrant investors seeking to invest a significant amount of capital in a new commercial enterprise that creates jobs for U.S. workers. Specifically, this category is for immigrant investors who are investing $1,050,000 (or $800,000 in a targeted employment area or infrastructure project) in a new business that will boost the U.S. economy and create at least 10 full-time jobs for qualified workers.

Nonimmigrant visas

Are temporary

• Business Visitor: B-1 - May be permitted to enter the United States for the purpose of engaging in business activities (including but not limited to attending meetings, seminars, or conferences or negotiating contracts) but may not be gainfully employed by a U.S. organization. 

• Specialty Occupation Workers: H-1B - This visa is reserved for professionals (including but not limited to engineers, computer scientists, biotechnologists, university professors, marketers, and health-care professionals) who come to the U.S. for a limited amount of time. 

  • The alien must have a baccalaureate degree (a foreign equivalent or equivalent experience may also be acceptable), and the degree must be a usual requirement for the position.

  • The alien will get paid the same amount a U.S. work gets for the job

  • The U.S. employer must petition for entry of the employee and the employer needs to tell them their need for a non-U.S. resident employee in a professional-level position that requires at least a bachelor’s degree or equivalent 

  • Can not go longer than 6 years unless an employee is sponsored for a green card

Intracompany Transferee: L-1

Aliens who work for a foreign employer and are transferred to the U.S. to work for a parent, subsidiary, or affiliate organization qualify for L-1 visas if they have held a specialized knowledge, management, or executive position during one of the last three years before entering the U.S. 

Treaty Investors and Traders: E-1 and E-2

These visas are reserved for aliens in countries with which the U.S. has commerce, navigation, and investment treaties. These aliens come into the U.S. to work for companies based in their home country that are investing or trading in the U.S

Australian Free Trade/Specialty Occupation Workers: E-3

This category is specific to Australian citizens and applies generally to positions very similar to those covered by the H-1B visa category

Students: F-1

These visas are reserved for full-time university, college, high school, or elementary students who study at a school approved by the USCIS. Generally, prior to graduation, students must not accept employment, except for on-campus employment and employment directly related to their curriculum

Exchange Visitors: J-1

Apply to aliens in government-approved exchange visitor programs. These visas are managed by the Department of State

North American Free Trade Agreement (NAFTA): TN

Are available only to citizens of Canada and Mexico whose occupations appear on a NAFTA schedule and who have the necessary education or experience

O Visas

Are temporary visas available for persons of extraordinary ability in the arts, sciences, education, business, or athletics that has been demonstrated by sustained national or international acclaim

Q Visas

Are used by cultural exchange visitors who come to the U.S. to work temporarily

Deferred Action of Childhood Arrivals (DACA)

(2012) A program allowing certain people who came to the United States as children to request deferred action with regard to deportation for a period of two years, subject to renewal

Employment at-will (EAW)

Employers have the right at any time, with or without prior notice, to hire, fire, demote, or promote whomever they choose for no reason or any reason. Similarly, employees have the right to quit a job at any time for any reason, with or without prior notice

Fair Credit Reporting Act (FCRA)

(1970) Regulates the collection and use of consumer credit information. The purpose is to protect the privacy of background information and to ensure that the information supplied is accurate