Global human resource management ppt @ bec dosm

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Global human resource management ppt @ bec dosm

Global human resource management ppt @ bec dosm

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  • 1. Global Human Resource Management
  • 2. Case: Molex
    • World’s second largest manufacturer of electronic components
      • 50 manufacturing plants, 21 countries
    • HRM viewed as most localized of all the functions
    • Hires experienced , educated foreign nationals in the US for foreign postings
    • Moves people around the world
    • In house management development programs
  • 3. Human resource management (HRM)
    • Refers to the activities an organization carries out to use its human resources effectively
    • Four major tasks of HRM
      • Staffing policy
      • Management training and development
      • Performance appraisal
      • Compensation policy
  • 4. International human resource management
    • Strategic role: HRM policies should be congruent with the firm’s strategy and it’s formal and informal structure and controls
    • Right People, Right Place, Right Time
    • Task complicated by profound differences between countries in labor markets, culture, legal and economic systems
  • 5. Strategy, structure and control systems
  • 6. Staffing policy
    • Staffing policy
      • Selecting individuals with requisite skills to do a particular job
      • Tool for developing and promoting corporate culture
      • View People as Resource ($in profit out)
    • Types of Staffing Policy
      • Ethnocentric
      • Polycentric
      • Geocentric
  • 7. Ethnocentric policy
    • Key management positions filled by parent-country nationals
    • Advantages:
      • Overcomes lack of qualified managers in host nation
      • Unified culture
      • Helps transfer core competencies (and skills back)
    • Disadvantages:
      • Produces resentment in host country
      • Can lead to cultural myopia
  • 8. Polycentric policy
    • Host-country nationals manage subsidiaries
    • Parent company nationals hold key headquarter positions
    • Best suited to multi-domestic businesses
    • Advantages:
      • Alleviates cultural myopia.
      • Inexpensive to implement
      • Helps transfer core competencies
    • Disadvantages:
      • Limits opportunity to gain experience of host-country nationals outside their own country.
      • Can create gap between home-and host-country operations
  • 9. Geocentric policy
    • Seek best people, regardless of nationality
      • not always possible
    • Best suited to Global and trans-national businesses
    • Advantages:
      • Enables the firm to make best use of its human resources
      • Equips executives to work in a number of cultures
      • Helps build strong unifying culture and informal management network
    • Disadvantages:
      • National immigration policies may limit implementation
      • Expensive to implement due to training and relocation
      • Compensation structure can be a problem.
  • 10. Comparison of staffing approaches
  • 11. The expatriate problem
    • Expatriate: citizens of one country working in another
      • Expatriate failure: premature return of the expatriate manager to his/her home country
        • Cost of failure is high: estimate = 3X the expatriate’s annual salary plus the cost of relocation (impacted by currency exchange rates and assignment location)
    • Inpatriates: expatriates who are citizens of a foreign country working in the home country of their multinational employer
  • 12. Expatriate failure rates
  • 13. Reasons for expatriate failure
    • US multinationals
      • Inability of spouse to adjust
      • Manager’s inability to adjust
      • Other family problems
      • Manager’s personal or emotional immaturity
      • Inability to cope with larger overseas responsibilities
    • European multinationals
    • Inability of spouse to adjust
    • Japanese Firms
      • Inability to cope with larger overseas responsibilities
      • Difficulties with the new environment
      • Personal or emotional problems
      • Lack of technical competence
      • Inability of spouse to adjust.
  • 14. Expatriate selection
    • Reduce expatriate failure rates by improving selection procedures
    • An executive’s domestic performance does not (necessarily) equate his/her overseas performance potential
    • Employees need to be selected not solely on technical expertise but also on cross-cultural fluency
  • 15. Four attributes that predict success
    • Self-Orientation
      • Possessing high self-esteem, self-confidence and mental well-being
    • Others-Orientation
      • Ability to develop relationships with host-country nationals
      • Willingness to communicate
    • Perceptual Ability
      • The ability to understand why people of other countries behave the way they do
      • Being nonjudgmental and being flexible in management style
    • Cultural Toughness
      • Relationship between country of assignment and the expatriate’s adjustment to it
  • 16. Training and management development
    • Training: Obtaining skills for a particular foreign posting
      • Cultural training : Seeks to foster an appreciation of the host-country’s culture
      • Language training : Can improve expatriate’s effectiveness, aids in relating more easily to foreign culture and fosters a better firm image
      • Practical training: Ease into day-to-day life of the host country
  • 17. Training & management development continued
    • Development: Broader concept involving developing manager’s skills over his or her career with the firm
      • Several foreign postings over a number of years
      • Attend management education programs at regular intervals
  • 18. Repatriation of expatriates Didn’t know what position they hold upon return. Firm vague about return, role and career progression . Took lower level job. Leave firm within one year. Leave firm within three years 10 20 30 40 50 60 70 percent
  • 19. Management development & strategy
    • Development programs designed to increase the overall skill levels of managers through:
      • On going management education
      • Rotation of managers through a number of jobs within the firm to give broad range of experiences
    • Used as a strategic tool to build a strong unifying culture and informal management network
    • Above techniques support transnational and global strategies
  • 20. Performance appraisal
    • Problems:
      • Unintentional bias
        • Host-nation biased by cultural frame of reference
        • Home-country biased by distance and lack of experience working abroad
    • Expatriate managers believe that headquarters unfairly evaluates and under appreciates them
    • In a survey of personnel managers in U.S. multinationals, 56% stated foreign assignment either detrimental or immaterial to one’s career.
  • 21. Guidelines for performance appraisal
    • More weight should be given to onsite manager’s evaluation as they are able to recognize the soft variables
    • Expatriate who worked in same location should assist home-office manager with evaluation
    • If foreign on-site managers prepare an evaluation, home-office manager should be consulted before completion of formal the terminal evaluation
  • 22. Compensation
    • Two issues:
      • Pay executives in different countries according to the standards in each country?
            • or
        • Equalize pay on a global basis?
      • Method of payment
  • 23. Compensation for four positions in 26 countries
  • 24. National differences in compensation Table 18.4 b CEO HR Director Accountant Mfg. Employee Argentina $860,704 $326,874 $63, 948 $17, 884 Canada 742,228 188, 070 44,866 36,289 Germany 421,622 189,785 61,375 36,934 Taiwan 179,486 102,491 30,652 11,924 United Kingdom 719,665 268,302 107,839 28,874 United States 1,403,899 306,181 66,377 44,680
  • 25. National differences in CEO pay for midsize companies Fig 18.1
  • 26. Compensation issues Type of Company Payment Ethnocentric How much home-country expatriates should be paid. Polycentric Pay can and should be country-specific. Geocentric/Transnational May have to pay its international cadre of managers the same.
  • 27. Expatriate pay
    • Typically use balance sheet approach
      • Equalizes purchasing power to maintain same standard of living across countries
      • Provides financial incentives to offset qualitative differences between assignment locations.
      • Pay for Schools, health care, etc.
  • 28. Components of expatriate pay
    • Base Salary
      • Same range as a similar position in the home country
    • Foreign service premium
      • Extra pay for work outside country of origin
    • Allowances
      • Hardship, housing, cost-of-living and education allowances
    • Taxation
      • Firm pays expatriate’s income tax in the host country
    • Benefits
      • Level of medical and pension benefits identical overseas
  • 29. The balance sheet Fig 18.2
  • 30. International labor relations
    • Key Issue
      • Degree to which organized labor can limit the choices of an international business
    • Aims to foster harmony and minimize conflicts between firms and organized labor
  • 31. Concerns of organized labor
    • Multinational can counter union bargaining power with threats to move production to another country
    • Multinational will keep highly skilled tasks in its home country and farm out only low-skilled tasks to foreign plants
      • Easy to switch locations if economic conditions warrant
      • Bargaining power of organized labor is reduced
    • Attempts to import employment practices and contractual agreements from multinationals home country
  • 32. Strategy of organized labor
    • Attempts to establish international labor organizations
    • Lobby for national legislation to restrict multinationals
    • Attempts to achieve international regulations on multinationals through such organizations as the United Nations