ihr staffing 2
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IHR Planning and Staffing
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G lobal Staffing
There are staffing issues that international firms confrontthat are either not present in a domestic environmentor are complicated by the international context in whichthese activities take place. How an organizationresponds to them is partly determined by factors suchas
1. G eneral staffing policy on key positions in headquartersand subsidiaries
2. The constraints placed by the host government onhiring policies
3. Staff availability
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The Expatriate or the Host Country
ManagerMultinationals must decide whether to useexpatriates or home country nationals
Need to look at some questions G iven the firm s strategy, what is the preference
for the position?
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The Expatriate or the Host CountryManager
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?
Using host country managers Do they have the expertise for the position? Can we recruit them from outside the company?
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Is the Expatriate Worth It?
Decisions must take into account costs of suchassignments
High cost High failure rate
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Approaches to Staffing
1. Ethnocentric- Few foreign subsidiaries haveany autonomy and strategic decisions aremade at headquarters. Key positions indomestic and foreign operations are held byHQ personnel. There are often soundbusiness reasons for pursuing ethnocentrism
a. Perceived lack of qualified host nationalsb. Need to maintain good communication,
coordination and control
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Contd.
An ethnocentric policy has its own disadvantagesa. It limits promotion opportunities of HCNs which
leads to reduced productivity and increased turnover
b. The adaptation of expatriate managers to hostcountriesc. When PCN and HCN compensation packages are
compared, considerable income gaps are viewed
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2. Polycentric- The MNE treats each subsidiary as adistinct national entity with some decision makingautonomy. Subsidiaries are usually managed bylocal nationals who are seldom promoted to HQ.The main advantage of a polycentric policy are
a. It eliminates language barriers, avoids adjustmentproblems of expatriatesb. Employment of HCNs allows a MNC to take a low
profile in sensitive political situationsc. It is less expensived. G ives continuity to the management of foreign
subsidiaries
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contd
The disadvantages areCultural differences may isolate corporatehead quarters
HCNs have limited career paths with hQ
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3. G eocentric- Here MNEs take a globalapproach to its operations, recognizingthat each part makes unique contributionwith its unique competence. It has threeadvantages
a. It enables multi national firms to developan international executive team
b. It overcomes the federation drawbackc. It supports cooperation and resource
sharing across units
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contd
The disadvantages area. Host govts. Want a high number of their
citizens employed and may utilize
immigration controls for this purposeb. It can be expensive to implement because
of increased training cost
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4 . Regiocentric- This approach reflects thegeographic strategy and structure of themulti national. It uses a wider pool of
managers but in a limited way. Staff maymove outside their countries but onlywithin a particular geographic region.
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Advantages and disadvantages of using PCNs, TCNs and HCNs
PCNsAdvantages1. Organizational control and coordination2. Promising managers are given international experience3. PCNs may be most suited because of special skillsDisadvantages1. The promotional opportunities of HCNs are limited2. Adaptation to host country may take a long time3. PCNs may impose an inappropriate HQ style4 . Compensation for PCNs and HCNs may differ
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contd
TCNsAdvantages1. Salary and benefit requirements may be lower than
for PCNs2. TCNs may be better informed than PCNs about the
host country environmentDisadvantages1. Transfers must consider possible national
animosities
2. The host govt. may resist hiring of TCNs3. TCNs may not want to return to their own countries
after the assignment
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contd
HCNsAdvantages1. Language and other barriers are limited2. Hiring costs are reduced and no work permit is
required3. Continuity of management improves4 . G ovt policy may dictate hiring of HCNsDisadvantages
1. Control of HQ may be impeded2. HCNs have limited career opportunity outside the
subsidiary
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(Country A)ContextualVariables-legal system-cultural distance
Approach to staffing
Firm specific variables
-stage-type of industry-Strategy-organisation
Situation Variables-staff availability-location of assignment-Need for control-locus of decision
GHRM activities-selection-training-compensation-repatriation
Country B
Country C
Determinants of GHRM
Approaches
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Types of international assignments
Companies tend to classify types according to lengthand duration of assignment
1. Short term: upto 3 months; they are usually for
trouble shooting or project supervision2. Extended: upto 1year; these may involve activities
similar to short term3. Long term: varies from 1 to 5 years, involving clearly
defined role in the receiving operation. It is alsoreferred to as the traditional expatriate assignment
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contd
Within these broad categories, it is possible to find what are termednon standard assignments
1. Commuter assignments- special assignments where the personconcerned commutes from the home country on weekly orbiweekly basis to the place of work
2. Rotational assignments- employees commute from home
country to the other country for a short, set period followed bya break in the home country
3. Contractual assignments- used in situations where employeeswith specific skills vital to an international project are assignedfor a limited duration of 6-12 months
4 . Virtual assignments- where the employee does not relocate to ahost location but manages from home base.
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The roles of an expatriate
1. An agent of direct control2. An agent of socialization3. As network builders4 . As boundary spanners5. As language nodes6. Transfer of knowledge and competence
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Comparison of global staffingJapanese
- Young peoplehired, hardly anymobility fromcompanies
-Slow promotionthrough ranks-Loyalty to co.-PA once or twicea year- Appraisal of longterm perf.
American
-Rapidadvancement desired-Loyalty to job
-ComprehensivePA once a year-People hired out of school & co;
job hoppingcommon- Appraisal of short term result
Chinese
-Most peoplehired fromschool, fewerfrom companies
-Slow promotionbut salaryincreases-Lack of loyalty-PA usually oncea year-Five year plan orshort term
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Japanese-Promotion based
on long term perf.& other criteria
-T&D considered
long terminvestment
-Life time
employment
American-Promotions based
on individual,short term perf.
-T&D undertaken
with hesitation
-Job insecurity
Chinese-Promotions based
on perf., ability,family ties, goodrelation withsuperior
-T&D programavailable, stateadministered examfor mgrs-Job security, nowchanging
Contd.
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International recruitment and
selection
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The myth of the global manager
The concept of the global manager appears to be based on thefollowing myths or assumptions
1. There is universal approach to management
2. People can acquire multicultural adaptability and behaviors3. There are common characteristics shared by successful
international managers4 . There are no impediments to mobility
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Factors moderating expats performance
M oderators
1. Inability to adjust to foreign culture2. Length of assignment3. Willingness to move4. Work related factors5. Psychological contract
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Figure 4 -2: The phases of cultural adjustment
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Factors in Expatriate Selection
Selection decision
Cross culturalsuitability Family
requirementsTechnical
ability
Language
Country/cult.
requirements
M NErequirement
IndividualSituation
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Expatriate s selection criteria
Technical and managerial skillsMotive and desire of a manager
Has social skills
Diplomatic skillsMaturity and stabilityFamily factorsAttitude to perform
Ability to cope up with environmental variables
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The use of selection tests
Mendenhall and Oddou propose a four dimensional approach thatattempts to link specific behavioral tendencies to probableoverseas performance
1. The self oriented dimension- the degree to which the expatexpresses an adaptive concern for self preservation, self enjoyment
and mental hygiene2. The perceptual dimension-the expertise that the expat possesses inaccurately understanding why host-nationals behave the way theydo
3. The others oriented dimension-the degree to which the expat isconcerned about host national co workers and desire to affiliatewith them
4 . The cultural-toughness dimension-a mediating variable thatrecognizes that acculturation is affected by the degree to which theculture of the host country is incongruent with that of homecountry
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Expatriate selection in practice
Harris and Brewster argue that expatriate selection, in reality,is an ad hoc process and they propose the coffeemachine system
They suggest that executives chatting around the coffee
machine can start the selection process through a casualconversation about an assignment need confronting oneof them.
Another executive can volunteer the name of a potentialexpatriate, thus starting the informal short listing of
candidatesThe MNCs processes are then activated to legitimize the
decision that has already been taken around the coffeemachine
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Table 4 -2: Harris and Brewster s selection typology
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Family friendly policies
Inter-company networkingJob-hunting assistance
Intra-company employmentOn-assignment career support
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Are female expatriate s different?
External Barriers Self-established
barriersHR manager reluctant
to select femalecandidate
Culturally toughlocations precludefemale expatsStereotypes in selectors
influence decisions
Some women havelimited willingness torelocate
The dual career couple
B arriers to females taking international assignments
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Reasons for expatriates failure
1. Their families2. Financial package3. Lack of ability to cope up with differing societal, legal,
economic and technical demands4 . Shock on new job5. Poor programs for career support6. Lack of support from HQ
7. Inadequate preparation and training8. Selection based on HQ criteria rather than assignment
needs
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INTE RN ATION AL PERFO RMANCE MAN AGEM ENT
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What is performance management?
A process that enables the multinational to
evaluate and continuously improveindividual, subsidiary unit and corporateperformance, against clearly defined, pre-set goals and targets
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Basic components of performance management
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Evaluating subsidiary performance
Factors to consider:
Whole versus part Non-comparable data Volatility of the global environment Separation by time and distance Variable levels of maturity
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Control and performancemanagement
Performance management is part of themultinational s control system
Performance targets, for example, are part of formal controlPerformance management contributes toshaping corporate culture
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Variables affecting expatriate performance
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Individual performance management
The task: Chief executive officer Structure reproducer Troubleshooter Operative
Task variables more under the control of themultinational than environmental factors
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Roles
A role is the organized set of behaviours assigned toa particular positionEffective role behaviour is an interaction betweenthe concept of the role, the interpretation of expectations, the person s ambitions, and the normsinherent in the role
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PCN role conception TCN role conception
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Headquarter s Support
The support of headquarters is important both tothe individual expatriate and accompanyingfamily members as a performance variable
The Employment Contract1. Transactional- specific, short term, monetizable
obligations, limited involvement of parties2. Relational- broad, open-ended, long term
obligations based on both exchanges aroundmonetisable elements and socio-emotionalelements
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The host environment
The external context can be a major determinant of expatriate performanceDiffering demands in terms of context:
Societal Legal Economic Technical
Physical Type of operation involved (eg. IJV versus wholly-ownedsubsidiary)
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Cultural Adjustment
The phases of cultural adjustment
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Non-expatriate performancemanagement
A seemingly neglected groupPerformance effects of factors associated withconstant air travel
Depression, nervous anxiety, sleep disturbance, weightgain, poor diet)
Stress associated with frequent absences and effecton family relationships
Non-standard assignments such as commuterarrangements and virtual assignments share theseaspects
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Performance appraisal
Performance criteria Hard goals: objective, quantifiable and can be
directly measured Soft goals: relationship or trait-based Contextual goals: factors that result from the
situation in which performance occurs
An appraisal system that uses hard, soft andcontextual criteria is advocated
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Contextual model of expatriate performance management
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Other factors affecting appraisalWho conducts the performance appraisalUse of standardized or customized appraisalformFrequency of appraisalPerformance feedback
Timely G eographical distance affects
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Appraisal of HCNs
The practice itself confronts the issue of cultural applicabilityMay be necessary to use local staff and acustomized formLevel of position involved is an importantconsideration