The document outlines key aspects of expatriate management, focusing on selection, training, compensation, and repatriate retention. It emphasizes the importance of cultural intelligence, flexibility, and effective cross-cultural training to enhance expatriate success and address retention issues. The case study of Procter & Gamble illustrates best practices in managing expatriates and their compensation strategies.

1. Expatriate
Management
HRM6040: Performance
Human Resource Systems
and Development
Instructor: Elaine M. Walker

2. Overview
• Expatriate Selection
• Expatriate Training &Development
• Expatriate Compensation
•Repatriates retention
• Case study: P&G Expatriate Program

3. Selection
With the expanding global
competition and the growing number
of international assignees, managing
expatriates has been a major problem
that relates to the success or failure of
an organization’s implementation of
international strategies.

4. Three dimensions of expatriate managers:
• The self dimension: The skills that enable a manager to
maintain a positive self-image and psychological well-being
• The relationship dimensions: The skills required to
foster relationships with the host-country nationals
• The perception dimension: Those skills that enable a
manager to accurately perceive and evaluate the host
environment

5. Six important factors of expatriated managers:
• Cultural intelligence (CQ) : ability to adapt across
cultures through sensing the different cues regarding
appropriate behavior across cultural settings or in
multicultural settings
• Family situation: ability to keep in touch with families
collaboratively and continuously
• Flexibility and adaptability: ability to fit changed
circumstance
• Job knowledge and motivation: ability to transfer
knowledge smoothly and transfer international assignment
into career advancement
• Relational skills: ability to build up relationships more
actively
• Extra cultural openness: ability to communicate
with others more openly

6. “Big Five” – the predictors of expatriate selection
a. Reliability: the consistency of a performance measure; the
degree to which a performance measure is free from random
error
b. Validity: the extent to which a performance measure assesses
all relevant-and only the relevant-aspects if job performance
c. Generalizability: the degree to which the validity of a
selection method established in one context extends to other
contexts
d. Utility: the degree to which the information provided by
selection methods enhances the effectiveness of selecting
personnel in real organizations
e. Legality: describe the government’s role in personnel
selection decisions, particularly in the areas of constitutional law,
federal laws, executive orders, and judicial precedent

7. The significance of implementing a successful
selection of Expatriate Management strategy
• Expatriate are used to transfer technologies, in joint
ventures, to transmit organizational culture, to enter new
markets, and to develop the international skills of
employees. (Bennett, Aston & Colquhoun, 2000)
• Effective expatriate selection has been identified as a major
mechanism to enhance expatriate success. (Bolino
&Feldman,2000; Kealey, 1996; Solomon, 1996).
• As We move into 21st century, the pressure of managing
expatriate managers well will not diminish-it will
accelerate.

8. Cross-Cultural Training (CCT)
figures
• 2 in 5 managers fail when sent abroad due
to insufficient preparation
• 18% of American companies vs. 33% of
European, African & Middle
Eastern companies provide some training
• 22% of American companies do virtually
nothing in terms of training

9. The importance of CCT
• Cross-cultural adjustment is found to be the most
significant factor determining the success of
international assignments
• Training facilitates effective cross-cultural
interactions
• Training was found to be effective for reducing
uncertainty and increasing self-efficacy -> cross-cultural
adjustment

10. Types of CCT
• Most common: language training & overview of
cultural differences
• Two main categories: didactic & experiential
learning
• Additional categories: attribution, cultural
awareness, cognitive-behavior modification and
interaction training

11. CCT – Emerging Issues
• Need for in-country, real-time training - CCT
is likely to be more effective when delivered
upon arrival in the host country than prior to
the foreign assignment
• Developing a global mindset – companies
operate in global context; all employees need to
think globally even if they act locally
• Self-training (Internet; specific software) –
free resources, flexible timing, alternative to
professional consulting and academic
community

12. CCT– Best Practices

13. Expatriate compensation
Global Compensation Packages

14. Compensation Challenges
• Further Corporate interests abroad
• Minimize workers’ financial risks
• Encourage employee expatriation
• Repatriation issues
• Enhance overseas experiences
• Promoting lowest - cost strategies
• Promoting differentiation strategies

15. Common approaches to developing expatriate compensation packages
Approaches Advantages Disadvantages
Balance Sheet
• Goods and
services
• Housing
• Income taxes
• Reserve
• Can keep the expatriate
whole from a
compensation
perspective with respect
to incumbents in the
same or similar positions
in their home country.
• It allows for ease of
movement between
foreign assignments and
back to the home country.
• It complexes to
administer and intrudes
into the expatriate’s
finances.
Localization
It involves basing
the expatriate’s
salary on the local
(host country’s)
salaries.
• The ease of
administration and
equity with local
nationals.
It usual needs for negotiated
supplements and pay based
on host country economics
versus performance and job
responsibilities.

16. Common approaches to developing expatriate compensation packages
Approaches Advantages Disadvantages
Lumpsum
It uses the home
country’s system for
determining base salary.
• It does not intrude into
the expatriate’s finances
• Employer does not pay
for things the expatriate
does not want
• the calculation of the
lumpsum, it involves a
complex and time-consuming
analysis.
Negotiation
To determine the
package through mutual
negotiation between
the employee and
employer.
• it is conceptually simple;
employer and each
individual expatriate
simply find a mutually
agreeable package.
• Tends to be costly
• It will creates
comparability problems
when an increasing
number of expatriates
are compensated
Cafeteria
The total salary level is
determined by the
organization and the
employee
• It is a more cost-effective
method, expatriate is
offered a selection of
options to choose from
• It has a limit to choices
and amounts

17. Compensation Strategies For Expatriates
To develop clear and defined
business goals similar to those
of home-based executives. The
executive has to look at the
assignment as a step in career
progression, allowing the
company to reduce the
excessive assignment-related
allowances and present the
executive with a clearly defined
path.
To validate the performance of
the expatriate against clearly
defined goals: Did the executive
meet these goals, and if the
answer is no, the company has to
think about 3 things: whether the
goals are achievable, is this the
right person for the role, a local
hire could better understand the
market, is there enough local
talent available to meet the
expectations.

18. Repatriate Retention
Up to 25 percent of repatriates wish to leave the
company after their return to a “normal post”

19. When it occurs and why it is a problem
• An expatriate of a multinational corporation returns
to the country of his/her origin from an overseas
assignment.
• Reasons:
a. culture shock (changes happen in expatriation
period).
b. work-dissatisfaction: high-status position with
high autonomy –a less highly profiled role; career
opportunities diminished; ‘let-down’, no longer
“special” or different.
c. problems for all family members (lower income,
housing, schooling).

20. Influences of bad repatriate
retention management
• Cost ($1.5 million/loss of a repatriate )
a. Extensive direct costs are incurred when firms must
replace departing executives who posses valuable
international and corporate experience.
b. Indirect costs also occur when repatriates withdraw
crucial market knowledge, host-country client
relationships, and international skills upon their
departure to other employers.
• Loss of high-potential employees to accept overseas
positions.

21. Possible Solutions
• Evidence-based executive coaching
a. Definition: ‘the intelligent and conscientious use of best
current knowledge integrated with practitioner expertise in
making decisions about how to deliver coaching to individual
coaching clients and in designing and teaching coach training
programs’.
b. Methods: Provide invaluable support for expatriate
executives through what is usually a time of high pressure of
rapid change; Engage in creative dialogue relevant to the
emotional, cognitive and behavioral aspects of issues that are
of great importance in complex overseas assignments.
c. Benefits: operate interactively in-the-moment across the
individual’s affective, behavioral and cognitive domains,
facilitating contextually appropriate and creative change
processes through all points of the expatriate experience.

22. Possible solutions
• A model of Repatriation practice
a. Benefits: provide a sense of career continuity; demonstrate the value
the company places on expatriate assignments; reduce repatriation
turnover.
b. Four stages of the strategy
* Planning for Repatriation: developing principles and philosophy;
providing stability and fairness to repatriate.
* The Repatriate agreement: including the assignment period, details
of return, incentive payment, a guarantee of a job equal to or better than
the one before leaving, provision for re-entry training, and a repatriation
program to support the person and help the family readjust upon return.
* Repatriation program: ensure positions, give repatriates challenging
assignments, and take use of their experience; a repatriation manager is
responsible for tracking, supporting, and assessing.
* Evaluation of the Repatriation Strategy: outcome measures (the
impact of the programs on repatriate retention, satisfaction and job
commitment), process evaluation (assessment of the effectiveness of
different strategies), deficit audit (the identification of gaps in support),
and quality assessment (continuous benchmarking of the overall strategy
against other similar businesses) .

23. Case Study: Procter & Gamble
• American multinational consumer goods
company
• 300 brands, 80 countries of operations and
138,000 employees in total
• Expatriate Employee Assistant Program

24. P&GExpatriate Employee Assistant Program
• For expatriate employees and their immediate
family members
• Aims to help employee adjust to the new culture
• Provides helpful solutions for typical concerns
faced by expatriates on assignment
• Addresses the personal and family impact of the
relocation
• Provides useful tips on parenting or address
concerns with family left behind in home
country
• Insight about intercultural differences found in
host location

25. P&G Expatriate compensation & Policy
• Provide Home Country Based Package +
benefit
• Minimizes shortfalls
• Eases transition back to home country
• Uninterrupted long term benefit plans
• Keeps decisions based career development vs.
financial attractiveness

26. P&G Expatriate compensation & Policy
• Expatriates
Receive home country salary and long term
benefits
Contribution to tax, goods and services,
housing and utilities at same levels as home
country peers
Receive incremental allowances to maintain
home country goods & service purchasing power
and live in appropriate housing at host location

27. References
• Abueva, J. E. (2000, May 17). Many Repatriation Fail at Huge Cost to Companies. New York Times.
• Chew, J. & Debowski, S. (2008). Developing an Effective Repatriation Strategy for MNC: A Model and Tools for
International Human Resources Management. Journal of Comparative International Management, 11 (2).
Management Futures
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ansnationalis m_030910/Session4-Forgas.pdf
• Graf, A. (October 25, 2004). Expatriate Selection: An Empirical Study Identifying Significant Skill Profiles.
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Retrieved from http://www.shrm.org/hrdisciplines/global/articles/pages/fail-train-managers-overseas-assignments.
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• McCallum, B. & Olson,D. (2004). Advising potential expatriate clients: a case study. Journal of Financial
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• Mendenhall, M.E. & Stahl, G.K. (2000). Expatriate training and development: Where do we go from here?.
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28. References
• Moral, M. & Abbott, G. (2009). The Routledge Companion to International Business Coaching. Oxon, OX:
Routledge.
• Osman-Gani, A. M. & Rockstuhl, T. (2009). Cross-cultural training, expatriate self-efficacy, and adjustments to
overseas assignments: An empirical investigation of managers in Asia. International Journal of Intercultural
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• Porter, G. & Tansky, J. W. (March 8, 1999). Expatriate Success May Depend on “Learning Orientation”:
Considerations for Selection and Training. Human Resource Management Volume 38, Issue 1, pages 47–60,
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• SHRM.org.(December, 11 2012). Global: Expatriate: How should we compensate an employee on a foreign
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• Robert H. Sims and Mike Schraeder 2004 Expatriate compensation: An exploratory review of salient
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