Welcome to class of

International Human Resource

Management
Dr. Satyendra Singh
Professor, Marketing and International Business
University of Winnipeg
Canada
s.singh@uwinnipeg.ca
http://abem.uwinnipeg.ca
www.abem.ca/conference
 Learning Objectives
Objectives:
 Creating a company “global mindset”
 International HRM approaches
 Recruitment selection and training
 Expatriates
 Compensation
 Allowances
 Bonus
 Challenges
 The Global Mindset
 Expatriate
 A person living outside citizenship country

 Global Mind-set
 A mind-set that combines an openness to and an
awareness of diversity across markets and cultures with a
propensity and ability to synthesize across this diversity
International HRM Approaches…
 Ethnocentric
 Hiring and promoting employees on the basis of parent company’s home country frame of
reference
 Bias of the home country
 Top executives get foreign experience
 Polycentric
 Hiring and promoting employees on the basis of specific local context of the subsidiary
 Movement between home and host country uncommon
 Must give locals to elevated position revoke permit
 Local supplier preferred
 Managers unwilling to take promotion
 Local managers may have their own agenda
 International HRM Approaches
 Regiocentric
 Hiring and promoting employees on the basis of the specific regional context
of the subsidiary
 Hiring can be from both countries– home or host
 Problem with third country employees

 Geocentric
 Hiring and promoting employees on the basis of ability and experience without
considering race or citizenship
 Best Practices
Recruitment, Selection and Training…
 Parent Country National (PCNs) or Home Country National
 Study of language and culture

 Host Country National (HCN)

 Hired in the host country

 Third Country National

Recruitment, Selection and Training
 Third Country National (TCN)
 May accept lower wages and benefits than will employees from the home
country
 May also come from a culture similar to that of the host country
 May have worked for another unit of the IC and be familiar with policies,
procedures and people
 Common approach in developing countries
 May not be welcome by host country
 May come from an international agency
 Greater use as companies take geocentric view
 Expatriates
 Family
 Nine of ten expatriate failures family-related

 Unhappy spouses major reason for early return

 Company losing a “million-dollar corporate-training

investment” in executive
 Language Training

 Language Trap
 International business person speaks only
home language
 English language has become lingua franca
 Chinese new “hot” language to know
 Expatriate Services…
• Health care programs to assist companies and
expatriates with
– Claims administration
– Language
– Translations
– Currency conversions
– Service standardization
– www.ExpatExpert.com
 Expatriate Services

 Banking services
 Online, 24-hour assistance
 Training
 Culture and language
 House hunting, utilities hook up, grocery and hardware
shopping, long-distance care for relatives, schools,
organizations, and cultural items
Compensation example
 Compensation
 Salaries
 Paying home country nationals the same salaries as
their domestic counterparts
 permits worldwide consistency
 bonuses
 Increasing use of third country nationals- often treated
like PCNs
 Trend to pay HCNs same base
 Allowances…
 Housing Allowance
 Permits executive to live at same standard as at home
 Cost-of-Living Allowance
 Based on differences in price of food, utilities,
transportation, entertainment, clothing, personal
services, and medical expenses as compared to home
 Allowances for Tax Differentials
 Ensures expatriates will not have less after-tax pay at
home
 Allowances

 Education Allowances
 Insures children receive education equal to that at home

 Moving and Orientation Allowances

 Household effects and language instruction
 Bonuses
• Bonuses
 Expatriate employee compensation payments in
addition to base salary and allowances because of
hardship, inconvenience, or danger
 Bonuses include
 Overseas premiums
 Contract termination payments
 Home leave reimbursement
 Compensation Packages

 For expatriate employees, packages

incorporate many types of payments or
reimbursements and must take into
consideration exchange rates and inflation
 Compensation Packages
Can Be Complicated

 Allowances and percentage of base salary are

usually paid in host country currency
 Percentage usually 65 to 75 percent, with remainder
banked where employee directs
 What Exchange Rate?
 Must be chosen
 More difficult in countries with exchange controls and
nonconvertible currencies
 Compensation of Third
Country Nationals

 Trend toward applying the same compensation plan

to third country nationals as home country
expatriates
 Problems can arise in
 The calculation of income tax differential when American
expatriate compared with expatriate from another country
 Home leave bonus
 International Status
 Entitles expatriate employee to allowances and bonuses applicable to
the place of residence and employment
 Perks
 Compensate executives while minimizing taxes
 Private pension plan
 Retirement payment
 Life Insurance
 Hidden slush funds (can be illegal)
 Club membership
 Company house
 Foreign affiliate directorship