Global HR

What is Ethnocentric staffing?

Key leadership positions in foreign subsidiaries are primarily filled parent-country nationals, often employees from headquarters.

What is Polycentric staffing?

Foreign subsidiaries are managed primarily by host-country nationals. Local leadership has country specific expertise.

What is Regiocentric staffing?

Employees are selected and moved within a geographic region, such as across European subsidiaries, rather than strictly within one country.

What is Geocentric staffing?

The organization selects the best-qualified talent worldwide, regardless of nationality or country of origin.

A U.S. Company sends American executives to lead its Japanese subsidiary. Which staffing orientation?

Ethnocentric- parent-country nationals hold leadership roles in foreign operations.

A U.S. company hires Japanese executives to manage its Japanese subsidiary. Which orientation?

Polycentric- host-country nationals manage the local subsidiary.

A company transfers a manager from France to lead its Spanish subsidiary under a Europe-wide talent strategy. Which orientation?

Regiocentric- leadership talent moves within a defined geographic region.

A multinational selects a Brazilian executive to lead its Canadian business because she is the strongest candidate globally. Which orientation?

Geocentric- talent is selected from a worldwide pool without nationality-based preference.

What is the balance sheet approach to expatriate compensation?

A compensation method designed to preserve an expatriate’s home-country purchasing power and standard of living, using adjustments for taxes, housing, goods/services, and other assignment costs.

What is the localization approach to expatriate compensation?

Compensation is aligned with the host country’s salary structures, benefits, and employment practices rather than preserving the home-country package.

How does a host-based compensation approach differ from a home-based balance sheet approach?

Host-based compensation uses the destination country’s market practices. Home-based balance sheet compensation starts with the employee’s home-country package and adjusts for assignment differences.

What is the difference between home-country national (HCN), parent-country national (PCN), and third-country national (TCN) in international staffing?

HCN: Employees from the country where the subsidiary operates.

PCN: Employee from the country where the organization’s headquarters is located
TCN: Employee from a country other than the headquarters or host country

An expatriate transfers permanently to Germany and receives pay aligned with German salary bands and benefits. What approach?

Localization- the employee transitions to the host country’s compensation and benefits structure

What is Purchasing Power Parity (PPP)?

An economic comparison for differences in the prices of comparable goods and services across countries, helping assess relative purchasing power.

Why can exchange rates alone mislead international compensation comparisons?

Market exchange rates don’t necessarily reflect differences in local living costs. PPP adjusts for price-level differences.

What is a cost-of-living allowance (COLA) in an international assignment?

An adjustment intended to offset differences in the cost of goods and services between the home and host locations.

What is a hardship allowance?

Additional compensation for difficult assignment conditions, such as security concerns, limited infrastructure, or challenging living conditions.

What is tax equalization?

An expatriate tax policy designed so the employee generally bears approximately the income tax burden they would have incurred at home, with the employer covering qualifying assignment-related differences.

What is repatriation in global mobility?

The process of returning an international assignee to their home country and reintegrating them into the organization after an oversees assignment.

What is a major strategic risk of an ethnocentric staffing approach?

Overreliance on headquarters perspectives can limit local responsiveness, reduce opportunities for hose-country talent, and increase assignment costs