INTERNATIONAL HUMAN RESOURCE MANAGEMENT

Transcription

1 Graduate Diploma In Management Managing People Jeeshan Mirza INTERNATIONAL HUMAN RESOURCE MANAGEMENT

2 Overview The Global Environment Managing Across Borders The Labor Environment Worldwide

3 Overview The Global Environment Managing Across Borders The Labor Environment Worldwide

4 The Global Environment Global Trends Affecting HRM

5 The Global Environment Globalization- Trend toward opening up foreign markets to international trade and investment Businesses increasingly looking abroad for opportunities Expand business, explore new opportunity Tap into HR capabilities Access resources scarce in home country

6 The Global Environment Tap Into HR Explore New Opportunities Access Scarce Resource

7 The Global Environment What Is Propelling The Growth? Free trade, opening up of borders, economies Growth of service based industry Emergence of information technology

8 The Global Environment

9 The Global Environment Going abroad-employers must address international HRM issues Dealing with global HRM challenges isn t easy Employer faces political, social, legal, and cultural differences among countries abroad What works in one country may not work in another

10 The Global Environment Company operating has to adapt to varying business environments Adapt personnel policies and procedures to the differences among countries Complicates human resource management in multinational companies

11 The Global Environment Global Differences Legal Differences Country s labor laws, property rights, and patents Employers have to be familiar with labor law systems of new countries Eg. Lincoln Electronics, EU Work Councils, India, Brazil, France 35 Hour Work Week, 2.5 Days Leave Per Month, Co-Determination Germany

12 The Global Environment Global Differences Economic System Differences Market Government will play restrained role in policy Mixed Government will look to influence policy while balancing needs of the market

13 The Global Environment Global Differences Economic System Differences Capitalist Vs Socialist System Labor costs vary depending on economic progress, costs in a country Hourly compensation costs for production workers $2.92 in Mexico, $6.58 in Taiwan, $24.59 in United States, $29.73 in United Kingdom, and $37.66 in Germany

14 The Global Environment Global Differences Economic System Differences 2006, Apollo Hospital Enterprise Ltd, (AHEL) sold off their per cent stake in the company, accepting Jayawardene's offer of SLRs 28 per share according the Colombo Stock Exchange's Take Over and Mergers Code of 1995.

15 The Global Environment Global Differences Economic System Differences

16 The Global Environment Global Differences Cultural Differences Communications, religion, values and ideologies, education, and social structure of a country Cultural differences-people abroad react differently to the same or similar situations Eg, U.S. managers were most concerned with getting job done, Chinese managers with maintaining harmonious environment, Hong Kong managers in between

17 The Global Environment Global Differences Cultural Environment Of International Business Source: Snell, Bohlander

18 The Global Environment Global Differences Cultural Differences Hofstede s Cultural Framework Power Distance Individualism Vs Collectivism Masculinity Vs Femininity Uncertainty Avoidance Long Term Orientation

19 The Global Environment Global Differences Cultural Differences

20 The Global Environment Global Differences Cultural Differences-Implications Influences ways members of an organization behave toward one another Their attitudes toward various HRM practices Cultures differ in their opinions on how managers should lead, decisions should be handled, what motivates employees

21 The Global Environment Global Differences Cultural Differences-Implications Compensation tied to individual performance fairer, more motivating in individualist culture Culture favoring individualism accepting of pay differences; highest- and lowest-paid employees Collectivist cultures tend to have much flatter pay structures; entitlement based approach

22 The Global Environment Global Differences Cultural Differences-Implications In collectivist cultures, people tend to value group decision making, collaborate heavily High power distance cultures can impede empowerment Communication problems, conflict common between individualist and collectivist culture

23 The Global Environment Global Differences Cultural Differences-Implications Hiring-selection techniques, interview process Training and performance appraisal; western managers more direct Promotion decisions; Japan often based on entitlement, seniority over merit Disciplining of employees

24 Overview The Global Environment Managing Across Borders The Labor Environment Worldwide

25 Competing Internationally

26 Types Of International Organizations Source: Snell, Bohlander

27 International Staffing Expatriates-noncitizens of the countries in which they are working An Indian or Sri Lankan national working in MAS Holdings factory in Bangladesh Expatriates also home-country nationals, citizens of country where company headquartered A Sri Lankan national working in MAS Holdings factory in Bangladesh

28 International Staffing Locals also known as host-country nationals; citizens of the countries where company has launched its operation A Bangladeshi national working in MAS Holdings factory in Bangladesh Third-country nationals citizens of a country other than the parent or host country French executive working in the Shanghai branch of a U.S. multinational bank

29 International Staffing Most corporations use all three for staffing their multinational operations Decision could be influenced by Corporate strategy Host country laws and regulations Costs, macro factors, local market factors

30 International Staffing Strategic Approaches To International Staffing Source: Mathis

31 International Staffing Why Hire Expats? Employers often can t find local candidates with the required technical qualifications Ensure control over subsidiary Implement head quarters policies, culture, way of doing things Successful stint abroad-required step in developing top managers

32 International Staffing Why Hire Locals? Legal restrictions in bringing expatriates Local government may encourage hiring of its citizens; transfer of knowledge, skill, technology to economy Expatriates are expensive- generous salary, vehicle, accommodation, relocation cost, family expenses, visa, airfare, perks

33 International Staffing Why Hire Locals? Local citizens know the cultural and political landscape of the country More likely to be able to gain the support of local staff members Most customers want to do business with companies (and people) they perceive to be local versus foreign

34 International Staffing Changes In International Staffing Over Time Source: Snell, Bohlander

35 Selecting Global Managers Screening managers for jobs abroad is similar to domestic jobs However for foreign assignments, family and cultural adaptability important Candidate should be able to adapt to culture of host country Technical competence, experience in home country not enough

36 Selecting Global Managers Six skill categories for the global manager The ability to seize strategic opportunities The ability to manage highly decentralized organizations An awareness of global issues Sensitivity to diversity issues Competence in interpersonal relations Community-building skills

37 Selecting Global Managers Successful expatriate employees tend to be extroverted, agreeable, and emotionally stable individuals Inversely related to the expatriate s desire to terminate the assignment Cultural difference is not the problem, the persons ability to adjust is

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39 Selecting Global Managers Comparisons In Sources Of Overseas Managers Source: Snell, Bohlander

40 Selecting Global Managers Expatriate Adjustment Factors Source: Snell, Bohlander

41 Selecting Global Managers Why Expatriate Assignments Fail Usually not technical or cultural factors but family and personal ones

42 Training International Employees Orienting & training employees on international assignment Social and business etiquette History and folklore Current affairs, relations with host/home country, political structure and current players Cultural values and priorities Geography, major cities Religion and the role of religion in daily life Currency, transportation, time zones, and hours of business The language

43 Training International Employees Ongoing Training Language, non verbal communication training Cultural and adaptation training Pepsico- Latin Dancing in Mexico, Ping Pong/Table Tennis in China Training employees abroad-extending parent company s training

44 Training International Employees

45 Training International Employees

46 Training International Employees

47 Training International Employees

48 Training International Employees

49 Training International Employees

50 Training International Employees Culture Clusters Source: Snell, Bohlander

51 International Compensation Compensation Of Host Country Employees Influenced largely by market rates, economy Payment mechanism differs country to countryhourly, day, piece Determining pay rate influenced by culture Eg. Japan Semi annual or annual lump sum payment

52 International Compensation Compensation Of Host Country Employees Employee benefits ranges from country to country France, benefits higher proportion of compensation US, UK-10 Days Paid Leave, France, Netherlands-25, Sweden, Austria-30

53 International Compensation Compensation Of Host Country Managers Traditionally based on host country salary levels Global compensation system- centralized pay system Host-country employees offered full range of training programs, benefits, and pay Comparable with a firm s domestic employees but adjusted for local differences

54 International Compensation Compensation Of Host Country Managers Global compensation system becoming more common People becoming more mobile across borders Transnational teams, projects MNC s in US hiring Indians, Chinese from American Universities, relocating them

55 International Compensation Compensation Of Expatriate Managers Must be an incentive for the manager to leave the home country Provisions need to be provided for miscellaneous expense-health, relocation, family, tax, travel For short term project based assignments, managers given per diem in addition to normal compensation

56 International Compensation Compensation Of Expatriate Managers For longer duration stints: Home based pay- pay based on expatriate s home country s compensation practices Balance sheet approach- match the purchasing power in a person s home country Split pay, host based pay

57 International Compensation Compensation Of Expatriate Managers Cement giant Cemex pays 10% extra salary for foreign service On top of this: Hardship Premium (Depends on Country; Easy Posting To Challenging) Housing, Children's Schooling, Air Tickets For Family, Spouse Language Lessons, Take Out Consequences Of Local Tax An executive normally 150,000 USD would cost 300,000 as an expat

58 Performance Appraisal Who Does The Appraisal? Local management must have some input Cultural differences may distort the appraisals Eg. Peruvian boss and US expatriate manager Home office manager may not be able to provide valid appraisal

59 Performance Appraisal Who Does The Appraisal? Multi-rater or 360 degree appraisal popular amongst global firms Also challenging where an expat manager has to appraise local employees, provide feedback May have to adapt performance criteria to suit expatriate and domestic employee

60 Performance Appraisal Other Aspects Performance measures may also vary from one country to another In countries with rapidly changing circumstances, organizational, team, individual plans may have to be updated Employees respond to performance feedback different ways; Eg USA Vs Mexico

61 Repatriation Process of transition for an employee home from an international assignment 40% to 60% of expats will probably quit within 3 years of returning home 3-year assignment with $100,000 base salary may cost employer $1 million-living costs, family, transport Given investment, sensible to do everything to keep them with the firm

62 Repatriation Re-acclimate the repatriated employee Proper career development program Responsibilities of employee must not be diminished, career must advance Companies should fully utilize the knowledge, understanding, and skills developed on their assignments

63 Implementing Global HR System Companies increasingly relying on local rather than expatriate employees Transferring selection, training, appraisal, pay, and other human resource practices abroad is a top priority Institute a standardized human resource management system in its facilities around the world, with some country specific issues

64 Overview The Global Environment Managing Across Borders The Labor Environment Worldwide

65 The Labor Environment Worldwide How Labor Relations Differ Across The World

66 The Labor Environment Worldwide Labor environment plays key role in international business and HR decisions Wages and benefits vary dramatically across the world as do safety, other legal regulations In many countries, regulation of labor contracts is profound and extensive Labor unions around the world differ significantly

67 The Labor Environment Worldwide EU prohibits discrimination against workers in unions In many countries in Central America and Asia, labor unions are illegal In Japan, Germany, New Zealand, UK, unions losing some of their power Union power to gain high wages, enforce rigid labor rules blamed for hurting competitiveness

68 The Labor Environment Worldwide EU countries have legal provisions for employee representation Safety and hygiene committees, worker councils, or even boards of directors In France, employers with 50 plus employees must consult with employees representatives Matters including working conditions, training, and profit-sharing plans, and layoffs

69 Lets Test Your Knowledge List 5 Large Or Reputed French Companies?

70 Thanks! Any questions? You can find me