MGT 430 - 2015CLASS 20 - GLOBAL HRM

Training and Developing a Global Work Force

Foreign Assignments - Practical Exercise

• Before you take on a foreign assignment, what would you want to know?

• What do you think are the positive career aspects of a foreign assignment?

• What do you think are the negative aspects of a foreign assignment

FOREIGN ASSIGNMENTSPRACTICAL EXERCISE RESPONSES

1. Cost of living differences2. Affect on my career3.4.5.6.7.8.

International AssignmentThought Starters

Positive aspects on an international assignment1 – Impact on my career2 – Living and working with other cultures3 - Challenges45678

International AssignmentThought Starters

Negative aspects on an international assignment1 – Impact on my career2 – Family concerns3 – Lack of face time with peers & superiors4 – Poor foreign language skills5678

Training and Developing aGlobal Workforce

• Training and development programs should be effective for all participating employees, regardless of their country of origin.

• The employer needs to provide employees with training in how to handle challenges associated with working in a foreign country.

Practical Hints For Delivering Training In Other Countries

1. Know your business and professional goals.2. Consider international differences among trainees

when developing the training plan.3. Keep an eye on quality.4. Be clear about standards for confidentiality and

intellectual property.5. Know local laws that affect training programs.

Cross-Cultural Preparation

• Training to prepare employees and their family members for an assignment in a foreign country.

• Covers all three phases of an international assignment:1. Preparation for departure2. The assignment itself3. Preparation for the return home

Performance Management AcrossNational Boundaries

When establishing performance management methods in other countries, consider:

Legal requirementsLocal business practicesNational cultures

Differences may include:Which behaviors are ratedHow and the extent to which

performance is measuredWho performs the ratingHow feedback is required

Compensating an International Workforce

Market pay structures can differ substantially across countries in terms of both pay level and relative worth of jobs.

• Dilemma for global companies:

Should pay levels and differences reflect what workers are used to in their own countries?

Should pay levels and differences reflect the earnings of colleagues in the country of the facility, or earnings at the company headquarters?

Compensating an International Workforce

• Compensation decisions affect a company’s costs and ability to compete.

• Challenge of competing with organizations in low-wage countries can be very difficult.

• Decisions about benefits must take into account the laws of each country involved, as well as employees’ expectations and values in those countries.

Figure 15.4: Average Hours Worked in Selected Countries

International Labor Relations

• Labor relations on an international scale involves differences in laws, attitudes, economic systems, and negotiation styles.

• Organizations establish overall policies and goals for labor relations, overseeing labor agreements, and monitoring labor performance.

• Day-to-day decisions about labor relations are usually handled by each foreign subsidiary.

Managing Expatriates:Selecting Expatriate Managers

• They need to be technically competent in their area of operations;

• Ability to adapt to :1. maintain a positive self-image and feeling of well-

being2. foster relationships with host-country nationals3. perceive and evaluate the host country’s environment

accurately

Assessing Candidates for Overseas Assignments

Motivation

Health

Language ability

Family Considerations

Resourcefulness

Adaptability

Career Planning

Financial

Managing Expatriates - Preparing Expatriates

•Pre-assignment site visit•Job orientation•Country orientation•Culture orientation•Language training•Compensation / benefits / taxes counseling

•Housing counseling•Health care / schools / shopping / recreation counseling•Counseling by returning expatriates•Local sponsorship from host country

Compensating Expatriates

• Balance sheet approach – adjusts manager’s compensation so that it gives the manager same standard of living as in the home country plus extra pay for inconvenience of locating overseas.

• involves an effort by the global organization to ensure that its expatriates are “made whole.”

Figure 15.6: Balance Sheet for Determining Expatriate Compensation

Most / Least Expensive Foreign Locations

Most Expensive Least Expensive1. Tokyo Karachi2. Osaka Mumbai3. Sydney New Delhi4. Oslo Kathmandu (Nepal)5. Melbourne Algiers6. Singapore Bucharest7. Zurich Colombo (Sri Lanka)8. Paris Panama City9. Caracas Jeddah10. Geneva Tehran

Most / Least Expensive Locations in the US

MOST EXPENSIVE LEAST EXPENSIVE1. New York, NY Idaho Falls, ID2. San Francisco, CA Conway, AR3. Stamford, CT Springfield, IL4. San Jose, CA Pueblo, CO5. San Diego, CA Wichita Falls, TX6. Santa Barbara, CA Fayetteville, AR7. Bakersfield, CA Memphis, TN8. Los Angeles, CA Norman, OK9. Fresno, CA McAllen, TX10. Boston, MA Harlingen, TX

Salary Comparison

Albany Salary = $60,000

Brooklyn $95,689Boston $77,260Chicago $63,850Los Angeles $71,666Dallas $52,657Philadelphia $66,768St. Louis $51,118

International Cost of Living Index

http://www.expatistan.com/cost-of-living/indexPrague, Budapest & Ankara = 100London = 280Zurich = 256New York City = 237Paris = 219Lima = 97Warsaw = 91Cape Town = 88Delhi = 57Caracas = 30

Compensating Expatriates

After setting total pay, organization divides this amount into four components of total pay package:

1. Base salary2. Tax equalization allowance3. Benefits4. Allowances

Expatriate Compensation - Rule of Thumb

Equal to or better than US Compensation

Base salaryIncentive pay

TaxesBenefits

Housing allowancesEducation

Helping Expatriates Return Home

Repatriation – process of preparing expatriates to return home from foreign assignment.

1. Communication: expatriate receives information and recognizes changes at home while abroad

2. Validation: giving expatriate recognition for overseas service when this person returns home.

Repatriate Issues

• Reverse Culture Shock

• Re-establishing network (out of sight – out of mind)

• Old work customs may become boring

• Can’t use new skills in old environment

Repatriate Solutions

1. PlanningBefore foreign assignmentDuring foreign assignmentAfter foreign assignment

2. Career management What will this assignment do for my careerWhat are my next steps in career progression

3. CompensationRemoval of overseas pay and perksFinancial counseling

Summary

• More companies are entering international markets by exporting and operating foreign facilities.

• Organizations need employees who understand customers, suppliers, local laws and customs in other countries and able to adapt their plans to local situations.

• Organizations may hire a combination of parent-country, host-country, and third-country nationals.

Summary

• Another influence on international HRM is the foreign country’s political-legal system.

• A country’s economic system, as well as the government’s involvement in the economy, is a strong factor determining HRM practices.

• HR planning involves decisions about where and how many employees are needed for each international facility.

• Most foreign operations positions are filled with host-country nationals.

Summary

• Organization must prepare the manager selected for an overseas assignment.

• Cross-cultural training for the assignment as well as preparation for repatriation after the assignment are critical success factors.

• Communication of changes at home and validation of a job well done abroad help expatriate through repatriation process.