GROUP 4 Felicia Purnomo 1711011041 Atika Putri Dianti 1711011108

1. MANAGING
HUMAN
RESOURCES
GLOBALLY
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2. Felicia Purnomo
1711011041
GROUP 4

3. Atika Putri Dianti
1711011108
GROUP 4

4. Dr. Nova Mardiana, S.E., M.M.

5. Learning Objectives
01
02
03
04
05
Identify recent changes companies expand into international markets.
Factor that influence HRM in international market.
List different categories of international employees.
Identify 4 level of global participation & HRM issues faced.
Companies attempt to select, train & reintegrate expatriate managers

6. HRM in a Global Environment
Foreign countries
can provide a
business with new
markets
The environment in
which organizations
operate is rapidly
becoming a global
one.
Companies set up
operations
overseas because
of lower labor
costs
Technology makes
it easier for
companies to
spread work around
the globe

7. Global activities
are simplified
and
encouraged by
trade
agreements
among nations
As these trends and arrangements
encourage international trade, they
increase and change demands on
human resource management.
– Organizations need
employees who understand
the customers and suppliers
in foreign countries.
– Organizations need to
understand the laws and
customs that apply to
employees in other countries.

8. Employee in an International Workforce
Employee who was born
and works in the country
in which an
organization’s
headquarters is located.
Parent-country national When organizations operate
overseas, they hire a
combination of parent-country
nationals, host-country
nationals, or third-country
nationals
Employee who is a citizen
of the country (other
than parent country) in
which an organization
operates a facility.
Host-country national
Employees
assigned to work
in another
country.
Expatriates
Employee who is a citizen
of a country that is neither
the parent country nor the
host country of the
employer
Third-country national

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10. Employers in The Global Marketplace
1 2 3International
organization
Multinational
company
Global
organization
An organization that
sets up one or a few
facilities in one or a
few foreign
countries.
An organization that builds
facilities in a number of
different countries in an
effort to minimize
production and distribution
costs.
An organization that chooses to
locate a facility based on the
ability to effectively, efficiently,
and flexibly produce a product or
service using cultural differences
as an advantage.

11. Transnational HRM system:
– makes decisions from a global
perspective
– includes managers from many
countries
– based on ideas contributed by people
representing a variety of cultures
• Decisions that are the outcome of a
transnational HRM system balance
uniformity with flexibility.

12. Factors
Affecting
HRM in
International
Markets

13. CULTURE
• Community’s set of shared assumptions about how the world works and what
ideals are worth striving for.
• Culture can greatly affect a country’s laws.
• Culture influences what people value, so it affects people’s economic systems
and efforts to invest in education.
• Culture often determines the effectiveness of various HRM practices.
• Cultural characteristics influence the ways members of an organization behave
toward one another as well as their attitudes toward various HRM practices.
• Cultures strongly influence the appropriateness of HRM practices.
• Cultural differences can affect how people communicate and how they
coordinate their activities.

14. 1. Individualism/Collectivism Describes the strength of the relation
between an individual and other individuals
in the society.
2. Power Distance Concerns the way the culture deals with
unequal distribution of power and defines the
amount of inequality that is normal.
3. Uncertainty Avoidance Describes how cultures handle the fact that
the future is unpredictable.
4. Masculinity/Femininity The emphasis a culture places on practices or
qualities that have traditionally been
considered masculine or feminine.
5. Long-term/Short-term
Orientation
Suggests whether the focus of cultural values
is on the future (long term) or the past and
present (short term).
Hofstede’s Five Dimensions of
Culture

15. CULTURE
• Organizations must prepare managers to
recognize and handle cultural differences.
– Recruit managers with knowledge of other
cultures
– Provide training
• For expatriate assignments, organizations may
need to conduct an extensive selection process to
identify individuals who can adapt to new
environments.

16. Education and Skill Levels
• Companies with foreign operations locate in countries
where they can find suitable employees.
• The educations and skill levels of a country’s labor force
affect how and the extent to which companies want to
operate there.
• In countries with a poorly educated population, companies
will limit their activities to low-skill, low-wage jobs.

17. Economic System
• The economic system provides many of the incentives or
disincentives for developing the value of the labor force.
• In developed countries with great wealth, labor costs are
relatively high. This impacts compensation and staffing
practices.
• Income tax differences between countries make pay
structures more complicated when they cross national
boundaries.

18. Political-Legal System
• The country’s laws often dictate the requirements for
HRM practices: training, compensation, hiring, firing, and
layoffs.
• An organization that expands internationally must gain
expertise in the host country’s legal requirements and
ways of dealing with its legal system.
• Organizations will hire one or more host- country nationals
to help in the process.

19. Human Resource Planning in a
Global Economy
• Human resource planning involves decisions about where
and how many employees are needed for each
international facility.
• Decisions about where to locate include considerations
such as the cost and availability of qualified workers.
• These considerations must be weighed against financial
and operational requirements.
• Other location decisions involve outsourcing.

20. Human Resource Planning in a
Global Economy
• Human resource planning involves decisions about where
and how many employees are needed for each
international facility.
• Decisions about where to locate include considerations
such as the cost and availability of qualified workers.
• These considerations must be weighed against financial
and operational requirements.
• Other location decisions involve outsourcing.

21. Criteria for Selection of Employees
for Foreign Assignments
• Human resource planning involves decisions about where
and how many employees are needed for each
international facility.
• Decisions about where to locate include considerations
such as the cost and availability of qualified workers.
• These considerations must be weighed against financial
and operational requirements.
• Other location decisions involve outsourcing.

22. Cross-Cultural Preparation
3. Preparation for the return home
2. The assignment itself
1. Preparation for departure
This is training to prepare
employees and their
family members for an
assignment in a foreign
country.

23. International Labor Relations
01
02
03
Labor relations on an international scale involves
differences in laws, attitudes, economic systems,
and differences in negotiation styles.
Organizations establish overall policies and goals
for labor relations, overseeing labor agreements,
and monitoring labor performance.
The day-to-day decisions about labor relations are
usually handled by each foreign subsidiary.

24. Managing Expatriates:
Selecting Expatriate Managers
• Expatriate managers need technical competence in the area of
operations.
• In addition, many other skills are necessary to be successful in an
overseas assignment:
– Ability to maintain a positive self-image and feeling of well-being
– Ability to foster relationships with host-country nationals
– Ability to perceive and evaluate the host country’s environment
accurately

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01 02 03 04

26. Topics for Assessing Candidates for
Overseas Assignments

27. Preparing Expatriates
Country
orientation
Culture
orientation
Language
training
Compensation /
benefits / taxes
counseling
Local
sponsorship
from host
country
Pre-assignment
site visit
Job orientation
Housing counseling
Health care / schools
/ shopping /
recreation
counseling
Counseling by
returning
expatriates

28. Compensating Expatriates
Balance sheet approach – this approach adjusts the
manager’s compensation so that it gives the manager
the same standard of living as in the home country
plus extra pay for the inconvenience of locating
overseas.
This approach involves an effort by the global
organization to ensure that its expatriates are “made
whole.”
After setting the total pay, the organization divides
this amount into the four components of the total pay
package: Base salary, Tax equalization allowance,
Benefits, Allowances

29. Helping Expatriates Return Home
Communication: the
expatriate receives
information and recognizes
changes at home while
abroad Repatriation – the
process of preparing
expatriates to return
home from foreign
assignment. Validation: giving the
expatriate recognition
for the overseas
service when this
person returns home.

30. THANK YOU