CHAPTER 11

INTERNATIONAL
HUMAN
RESOURCE
MANAGEMENT

COMPONENTS OF
HRM

Recruitment
Selection
Training & Development
Performance Appraisal
Compensation
Labor Relations

INTERNATIONAL
HRM (IHRM)
Basic HRM issues remain
Must choose a mixture of
international employees
How much to adapt to local
conditions?

EMPLOYEES IN
MULTINATIONAL
ORGANIZATIONS

Host country nationals

Expatriates
Home country nationals
Third country nationals
Inpatriates

MULTINATIONAL
MANAGERS

Host country or expatriate?

USING HOST COUNTRY

MANAGERS
Do they have the expertise for
the position?
Can we recruit them from outside
the company?

USING EXPATRIATE
MANAGERS
Do parent country managers have
the appropriate skills?
Are they willing to take expatriate
assignments?
Do any laws affect the assignment
of expatriate managers?

IS THE EXPATRIATE

WORTH IT?

High cost
High failure rate

EXHIBIT 11.1 PAYING FOR

Singapore

Taipei

London

Hong
Kong

Tokyo

400000
350000
300000
250000
$ 200000
150000
100000
50000
0

Home
Salary

THE EXPATRIATE MANAGER

REASONS FOR U.S.

EXPATRIATE FAILURE

Spouse fails to adapt

Manager fails to adapt
Other problems within the family
Personality of the manager
Level of responsibilities

Reasons for expatriate

failure, continued

Lack of technical proficiency

No motivation for assignment

MOTIVATIONS TO USE

EXPATS

Managers acquire international

skills
Coordinate and control operations
dispersed activities
Communication of local
needs/strategic information to
headquarters

KEY EXPATRIATE SUCCESS

FACTORS

Professional/technical competence
Relational abilities
Motivation
Family situation
Language skills

Willingness to accept position

PRIORITY OF

SUCCESS FACTORS
Depends on :
assignment length
cultural distance
amount of required interaction
with local people
job complexity/responsibility

EXHIBIT 11.3 SHOWS A

DECISION MATRIX USED

TO SET PRIORITIES OR
DIFFERENT SUCCESS
FACTORS DURING
SELECTION

Expatriate
Success
Factors

Longer
Duration

Professional/
Technical
Skills
Relational
Abilities
International
Motivation
Family
Situation
Language
Skills

High

Assignment Characteristics
Greater
More
Interaction
More
Cultural
and
Complex or
DisCommunica- Responsimilarity tion
sible Job
Requirements
with Locals
Neutral
Moderate
High

Moderate

High

High

Moderate

High

High

High

High

High

High

Neutral

Moderate

Moderate

High

High

Neutral

EXPATRIATE TRAINING

TRAINING RIGOR

The extent of effort by trainees

and trainers required to prepare
the trainees for expatriate
positions

LOW RIGOR

TRAINING

Short time period

Lectures
Videos on local culture
Briefings on company operations
company operations

HIGH RIGOR

TRAINING

Lasts over a month

Experiential learning
Extensive language training
Often includes interactions with
host country nationals

EXHIBIT 11.4 SHOWS

VARIOUS TRAINING
TECHNIQUES AND THEIR
OBJECTIVES AS THE RIGOR
OF THE CROSS- CULTURAL
TRAINING GROWS

Techniques: Field trips to

host country, meetings
High with managers experienced
Training in host country, meetings
Rigor with host country
nationals, intensive
language training.
Objectives: Develop
comfort with host country
national culture, business
culture, and social
institutions.

Techniques:
Experiential learning
exercises, role playing,
simulations, case
Midstudies, survival
level
language
training.
Training
Rigor
Objectives: General and
specific knowledge of
host country culture,
reduce ethnocentrism.

Techniques: Lectures,
videotapes, reading
background material.
Objectives: Provide
Low background information on
Training host country business and
Rigor national cultures, basic
information on company
operations.

CHALLENGES OF EXPATRIATE

PERFORMANCE APPRAISAL

Unreliable data
Complex and volatile
environments
Time differences and distance
separation
Local cultural situations

STEPS TO IMPROVE

THE PROCESS

1. Fit the evaluation criteria to

strategy.
2. Fine tune the evaluation
criteria
3. Use multiple evaluators with
varying periods of evaluation

EXHIBIT 11.6 Shows several

sources of information a
superior or the HRM
professionals may use to
evaluate an expatriate
managers

Evaluation Sources

Criteria

Periods

Self evaluation

Meeting objectives
Management skills
Project successes
Leadership skills
Communication skills
Subordinate development
Team building
Interpersonal skills
Cross-cultural interaction
skills

Six months and at the

completion of a major
project
After completion of
major project

On-site supervisor

Management skills
Leadership skills
Meeting objectives

At the completion of
significant projects

Customers and clients

Service quality and

timeliness
Negotiation skills
Cross-cultural interaction
skills

Yearly

Subordinates

Peer expatriate and

host country manages

Six months

EXPATRIATE

COMPENSATION

THE BALANCE

SHEET APPROACH
Provides a compensation package

that equates purchasing power

BALANCE SHEET

COSTS

Allowances for cost of living,

housing, utilities, furnishing,
educational expenses, medical
expenses, club memberships, and
car and/or driver expenses

Domestic
Assignment
Expenses and
Spendable
Income
Base Salary

Expatriate Assignment Expenses and

Balanced Spendable Income + Allowances
=

=
+

Base Salary
Allowances as an incentive to take position,
foreign service premium, hardship pay, R&R
Taxes
Allowances to balance extra tax payments

Goods and Services

+
Taxes
Goods and
Services

+
Housing

=
+

Spendable
Income

Allowances to cover cost of living differences,

housing, childrens education, medical costs,
automobile, recreation, home leave travel
Housing
Allowances for moving expenses, settling in
expenses, initial housing costs, and furnishing
allowances
Spendable Income

OTHER

APPROACHES

Parent country wages everywhere

Wean expatriates from allowances
Pay based on local or regional
markets
Cafeteria selection of allowances
Global pay systems

THE REPATRIATION

PROBLEM

Difficult for many organizations

"Reverse culture shock"
Expatriates must relearn own
national and organizational
culture
Includes whole family

STRATEGIES FOR SUCCESSFUL

REPATRIATION PROVIDE:

A strategic purpose for repatriation

A team to aid the expatriate
Home country information sources
Training and preparation for the
return
Support for expatriate and family

WOMEN EXPATRIATES:

TWO IMPORTANT "MYTHS"

Myth 1: women do not wish to
take international assignments
Myth 2: women will fail in
international assignments
because of the foreign culture's
prejudices against local women

SUCCESSFUL WOMEN

EXPATRIATES

Foreign not female

emphasize nationality not gender
The woman's advantage
strong in relational skills
wider range of interaction
options

MULTINATIONAL

STRATEGY AND IHRM

IHRM ORIENTATIONS
Ethnocentric
Polycentric
Regiocentric
Global

IHRM ORIENTATION AND

MULTINATIONAL STRATEGY
Early stages of
internationalization =
ethnocentric IHRM
Multilocal strategies =
ethnocentric or regiocentric
Regional strategy = closer to the
global

 International strategy =
ethnocentric or polycentric
IHRM
Transnational strategies = a
global IHRM

CONCLUSIONS

HRM functions
IHRM challenges
Expatriate managers
The role of women in
multinational organizations
Multinational strategies and
IHRM orientations