06933_ch15.ppt

Kavanagh, Human Resource Information Systems, Third Edition© 2015 SAGE Publications, Inc.
CHAPTER 15
HRIS and International Human
Resource Management

REGIONAL TRADE ZONES
• Asia-Pacific Economic Cooperation
– Members Account For Nearly 25% Of World Trade
• North American Free Trade Agreement
– Created A Free Trade Zone Among Canada, Mexico
and the U.S.
• European Union
– Single Largest Market
• ASEAN And SAARC

INCREASING IMPORTANCE OF HR
TECHNOLOGY
• Imported products increase competition.
• Deregulation changes the business environment.
• U.S. companies must expand their markets
globally.
• Globalization means managing human resources
around the world.
• The aggregate world exports as a percentage of
world gross domestic products (GDP) increased
from 11.6 percent in 1970 to 30.7% in 2006.

INCREASING IMPORTANCE OF HR
TECHNOLOGY 2
• Deregulation has been increased market
accessibility.
• There has been an increase in international
mergers and acquisitions.
• Increased awareness of the existence of talented
human capital throughout the world.
• Availability and cost effectiveness of computer
technology.

TYPES OF INTERNATIONAL
BUSINESS OPERATIONS
• International Corporation - Uses Its Existing Core
Competencies To Expand Operations Into Foreign Markets.
These Organizations Compete In The Global Marketplace By
Exporting Existing Products And Eventually Opening Facilities In
Other Countries.
• Multinational Corporation - More Complex International
Business Operation That Operates As Fully Autonomous Units In
Multiple Countries In An Attempt To Capitalize On Lower
Production And Distribution Costs.
• Global Corporations - Similar To Multinational Corporations;
However, Global Corporations Integrate Their Operations
Worldwide Through A Centralized Home Office. Global
Corporations Emphasize Flexibility And Mass Customization To
Meet The Needs Of Differing Customer Needs Worldwide.

GOING GLOBAL
• The Top IHRM Related Challenges Facing Global
Organizations:
1. Cultural Differences (47%)
2. Lack Of Resources (40%)
3. Technology/Systems Issues (39%)
4. Time Zone Differences (35%)
• Top HR Global Data Being Maintained In HR Systems:
1. Core HR (86%)
2. Compensation (71%)
3. Performance (45%)
4. Payroll (42%)

DIFFERENCES IN HR MANAGEMENT IN
MULTI NATIONAL ENTITIES
• More Functions And Activities
• Broader Perspective
• More Involvement In Personal Lives
• Changes Due To Workforce Mix
• Risk Exposure
• More External Influences

MANAGING DIFFERENT TYPES OF
EMPLOYEES IN MNEs
• Global Diversity And Inclusion
• Education
• Political/Legal System
• Economic System

MANAGING EMPLOYEES IN A GLOBAL
CONTEXT
Types Of Employees
• Expatriates
• Parent Country Nationals (PCN)
• Host Country Nationals (HCN)
• Third Country Nationals (TCN)

HR PROGRAMS IN GLOBAL
ORGANIZATIONS
Major Issues Include:
• International Staffing
• Selecting Global Managers: Managing Expatriates
• Training For Expatriates And Other Employees
• Performance Appraisals In MMEs
• Managing International Compensation

INTERNATIONAL STAFFING
• Home-Country Nationals
– Staffing The Organization With Expatriates (PCNs) Is
Advantageous Because The Organization Can Rely On
The Talent Currently Available.
• Host-Country Nationals
– Staffing Positions With HCNs Provides A Number Of
Advantages For The MNE. HCNs Are Less Costly, In
Terms Of Both Time And Money.
• Third-Country Nationals
– TCNs Bring A Different And Often Broad Experience To
The Organization. TCNs Add An International Outlook To
The Workforce

SELECTING GLOBAL MANAGERS:
MANAGING EXPATRIATES
Success in selecting expatriates is difficult due the
following factors:
– the cultural environment of countries
– expatriate failure and its causes
– selection criteria and procedures for expatriates

CULTURAL ENVIRONMENT
OF COUNTRIES
• Country Culture Will Have An Effect On All The
Activities And Programs Administered by HR
• Hofstede’s Five Dimensions On Which The Cultures Of
Countries Differ
(1) education/human capital
(2) values/ideologies,
(3) social structure,
(4) religious beliefs,
(5) communication.

EXPATRIATE FAILURE AND ITS CAUSES
• Defined As The Return Of An Expatriate To The
Home Country Before The Period Of The
Assignment Has Been Completed.
• Two Categories Of Costs—direct And Indirect
• Major Factor Affecting Expatriate Failure Is The
Inability To Adjust To The New Situation And
Culture By The Expatriate And Her Or His Family.

WHY DO EXPATRIATES FAIL?
• Family adjustment
• Lifestyle issues
• Work adjustment
• Bad selection
• Poor performance
• Other opportunities arise
• Business reasons
• Repatriation issues

SELECTION CRITERIA AND
PROCEDURES FOR EXPATRIATES
Two General Categories—individual And Situational
• Individual
– Technical Ability
– Cross-cultural Suitability - Language Ability, Cultural Empathy,
Adaptability, And A Positive Attitude Toward The Assignment In
The Specific Country
– Family Requirements - Adjustment Of The Accompanying
Spouse/Partner And Children

SELECTION CRITERIA AND PROCEDURES
FOR EXPATRIATES (CONT.)
• Situational Factors
– Country/Cultural Requirements Could Include Work Permits And
Visas
– Opportunity For The Expatriate, Spouse/Partner And The
Children To Learn Another Language
– MNE Requirements Could Involve Getting Permission From The
Host Country For The Selection Of Any Expatriate

TRAINING AND DEVELOPMENT OF
EXPATRIATES
Purposes Of Expatriate Training
• To Supplement The Selection Process And Assist The
Expatriate And Family Adjust To The New Situation.
• Economic: The Potential Direct And Indirect Costs Of
Expatriate Failure Relative To The Amount Of The
Investment Is Obvious.
• Predeparture Training
• Repatriation Training

EMPHASIS IN CROSS-CULTURAL
TRAINING PROGRAMS
• Expatriates must be clear about their own
cultural background.
• Expatriates must understand the particular
aspects of culture in the new work environment.
• Expatriates must learn to communicate
accurately in the new culture.

TOPICS FOR PREDEPARTURE
TRAINING FOR EXPATRIATES:
Table 15.1
1. Cultural values and religions
2. Web sites for country information
3. Country history, recommended readings, videos,* and achievements in the country
4. Classical literature describing the country’s history, its folkways, and heroes and heroines
5. Information about other HCN expatriates in the country
6. Information on job opportunities for spouses and partners
7. Descriptions of the educational facilities and opportunities for families
8. Current news about the country, particularly its relationship to the parent country
9. Traditional family roles of father, mother, and children
10. Locations for shopping and shopping hours
11. Dominant language of country; extent of bilingualism in country
12. Nonverbal gestures and their meanings
13. Political structure, particularly as it affects the operation of the MNE
14. Descriptions of currency, temperature variations, transportation, hours of business
15. Sightseeing, including historic, artistic, and important cultural locations that would appeal to all the family

TOPICS FOR PREDEPARTURE TRAINING FOR
EXPATRIATES
Table 15.1 (con’t)
8. Traditional Family Roles Of Father, Mother, And Children
9. Locations For Shopping And Shopping Hours
10. Dominant Language Of Country; Extent Of Bilingualism In Country
11. Nonverbal Gestures And Their Meanings
12. Political Structure, Particularly As It Affects The Operation Of The
MNE
13. Descriptions Of Currency, Temperature Variations, Transportation,
Hours Of Business
14. Sightseeing, Including Historic, Artistic, And Important Cultural
Locations That Would Appeal To All The Family
21
Michael J. Kavanagh and Richard D. Johnson - Human Resource Information Systems: Basics,
Applications, and Future Directions, 3e © 2014 SAGE Publications, Inc.

TRANSFER OF TRAINING
• The training methods would attempt to immerse the
expatriate in the host country’s culture through
assessment centers, simulations, sensitivity training,
and extensive language training.
• The use of the HRIS to analyze the success or failure
of these training programs will enable the MNE to
make more effective decisions about expatriates and
their training in the future.

APPRAISING EXPATRIATE
PERFORMANCE IN MNEs
• What Performance Criteria Should Be Appraised?
– The Specific Job-related Competencies Of The
Expatriate Manager
– Three Non-Job Related Qualities They Need To Possess
To Perform Their Role Effectively
• Possess Cross-cultural Interpersonal Skills
• To Understand And Have Sensitivity To Differences In Norms,
Laws, And Cultures
• Capable Of Adapting To Uncertain And Unpredictable
Circumstances

APPRAISING HCNs AND TCNs
PERFORMANCE IN MNEs
• PCNs managers need to be sensitive to cultural
differences in appraising performance, e.g., in
Japan discussing the negative aspects of an employee’s
performance may be taken as an insult.
• Appraisals are used to determine pay increases
and promotional decisions, training
opportunities, and dismissal decisions for HCNs
and TCNs.

MANAGING INTERNATIONAL
COMPENSATION
• Most Complex But Critically Important Function Of
The IHRM Department
• IHRM Compensation Manager Must Be Aware Of
Differences In Taxation, Labor Laws Affecting
Compensation And Benefits, Currency Fluctuations,
And Cost-of-living Differences Within And Between
Countries Where The MNE Has A Presence.
• Critical Importance Of Compensation Management
In Subsidiaries Is Its Link To The Strategy Of The MNE

COMPENSATION POLICY
OBJECTIVES IN MNEs
• First Objective For An MNE Is To Align Its
Compensation Administration With The Strategy
Of The Firm.
• Second Objective Is To Motivate Employees’
Behaviors, Which Complicated Since Multiple
Countries And Cultures Are Involved.
• Third Objective Of Compensation Policy For An
MNE Is That It Must Be Perceived As Fair By The
Employees.

THE COMPONENTS OF
INTERNATIONAL COMPENSATION
• Base Salary And A Set Of Benefits
• Foreign Service Or Hardship Premium For
Expatriates
• Other Premiums For “Risk Level” Of The
Assignment In The Country
• Between- And Within-Country Cost Of Living
Adjustments (COLAs)

APPROACHES TO INTERNATIONAL
COMPENSATION
• Going Rate Approach Or “Host-Country” Approach: the
base salary for international employees is tied to the salary
levels in the host country. expatriate would earn pay that is
comparable with the salaries of employees in the host
country.
• “Balance Sheet” Approach: has as its goal the
maintenance of a home-country living standard plus a
financial inducement for accepting an international
assignment.

HRIS APPLICATIONS IN MNEs
HRM In An MNE Is Exceedingly More Complex
Than In A Domestic Firm
– Organizational Structure For Effectiveness
– IHRM-HRIS Administrative Issues
– HRIS Applications In MNEs

HRIS APPLICATIONS: STRUCTURE
FOR EFFECTIVENESS
• The Issue Of The Most Effective Structure For The
Operation Of An HRIS In An MNE Has Been A
“Moving Target.”
• “Structure Does Not Drive Success – People Do.” In
Building An Organizational Structure For An HRIS In
An MNE, It Would Seem Very Reasonable To Consider
“Thinking Locally And Acting Globally” To Create An
HRIS Structure For The Entire MNEs That Is Sensitive
To Local Concerns First

HRIS APPLICATIONS IN IHRM:
ADMINISTRATIVE ISSUES
• Service-Oriented Architecture (SOA) - The SOA Is
Focused On Providing A Service For A Function That Is
Well-defined, Self-contained, And Context And Platform
Independent That Adds Value To The Organization’s
Business Purpose.
• Outsourcing, Offshoring And Insourcing - MNEs Were
The First Organizations To Outsource Many Of Their Jobs
That Required Low Levels Of Skills (E.G., Call Centers).
• Data Privacy And Security - The MNE Has To Create
Additional Safeguards To Be In Compliance With Security
And Privacy Laws And Regulations In Different Countries.

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