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
THE EXPATRIATE MANAGER

400000
350000
300000
250000
$ 200000
150000
100000
50000
0
Hong
Kong
Salary

Taipei
Tokyo
Home

London

Singapore
 •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
 Assignment Characteristics
Greater
Expatriate Longer More Interaction More
Success Duration Cultural and Complex or
Factors Dis- Communica- Respon-
similarity tion sible Job
Requirements
with Locals
Professional/ High Neutral Moderate High
Technical
Skills
Relational Moderate High High Moderate
Abilities
International High High High High
Motivation
Family High High Neutral Moderate
Situation
Language Moderate High High Neutral
Skills
•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,
Mid- simulations, case
level studies, survival
Training language 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 Six months and at the
Management skills completion of a major
Project successes project
Subordinates Leadership skills After completion of
Communication skills major project
Subordinate development
Peer expatriate and Team building Six months
host country manages Interpersonal skills
Cross-cultural interaction
skills
On-site supervisor Management skills At the completion of
Leadership skills significant projects
Meeting objectives
Customers and clients Service quality and Yearly
timeliness
Negotiation skills
Cross-cultural interaction
skills
 •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
Expatriate Assignment Expenses and
Expenses and
Balanced Spendable Income + Allowances
Spendable
Income
Base Salary = Base Salary
Allowances as an incentive to take position,
+
foreign service premium, hardship pay, R&R
Taxes = Taxes
+ Allowances to balance extra tax payments
Goods and
= Goods and Services
Services
Allowances to cover cost of living differences,
+ housing, children’s education, medical costs,
automobile, recreation, home leave travel
Housing = Housing
Allowances for moving expenses, settling in
+ expenses, initial housing costs, and furnishing
allowances
Spendable
= Spendable Income
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