International Human Resource Management and Labor Relations Griffin & Pustay 19-1 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall International Business, 6th Edition chapter 19 Chapter Objectives • Describe the nature of human resource management in international business • Detail how firms recruit and select managers for international assignments • Explain how international businesses train and develop expatriate managers • Describe labor relations in international business 19-2 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Chapter Objectives (continued) • Discuss how international firms conduct performance appraisals and determine compensation for their expatriate managers • Analyze retention and turnover issues in international business • Explain basic human resource issues involving nonmanagerial employees 19-3 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Human Resource Management Human Resource Management is the set of activities directed at attracting, developing, and maintaining the effective workforce necessary to achieve a firm’s objectives 19-4 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 19.1 The International Human Resource Management Process HRM’s Strategic Content Recruitment and Selection Training and Development Performance Appraisal Compensation and Benefits Labor Relations Contribution to Organizational Effectiveness 19-5 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall International Staffing Needs Managerial/Executive Employees Nonmanagerial Employees 19-6 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Scope of Internationalization Export Department International Division Global Organization 19-7 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Expertise Needs in Global Organizations Product line Functional skills Individual country markets Global strategy 19-8 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Centralization versus Decentralization of Control • Centralized firms – Favor home country managers – Most common amongst international division form • Decentralized firms – Favor host country managers – Most common amongst multidomestic firms 19-9 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Staffing Philosophy Parent Country Nationals (PCNs) Host Country Nationals (HCNs) 19-10 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Third Country Nationals (TCNs) Disillusionment Phase • Differences between new and old environments are blown out of proportion • Challenges of everyday living • Many stay stuck in this phase 19-22 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Adaptation Phase • Employee begins to understand patterns of new culture • Gains language competence • Adjusts to everyday living 19-23 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Biculturalism • Anxiety has ended • Employee gains confidence in ability to function productively in new culture • Repatriation may be difficult 19-24 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Overseas Success • Likelihood of managers being successful at overseas assignment increases if the managers: – Can freely choose whether to accept or reject the assignment – Have been given a realistic preview of the job and assignment – Have been given a realistic expectation of what their repatriation assignment will be – Have a mentor back home who will guard their interests and provide support – See a clear link between the expatriate assignment and their long-term career path 19-25 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Overseas Success The U.S military makes sure that its members have “reminders” from home on foreign deployments 19-26 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Training and Development • Assessing training needs • Basic training methods – Standardized – Customized • Developing younger managers 19-27 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 19.4 Barriers to Entering Foreign Markets 19-28 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Performance Appraisal Performance Appraisal is the process of assessing how effectively people are performing their jobs 19-29 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Functions of Performance Appraisals To provide feedback to individuals about how well they are doing To provide a basis for rewarding top performers To identify areas in which additional training and development may be needed To identify problem areas that may call for a change in assignment 19-30 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Compensation Packages Cost-of-living allowance Hardship premium Tax equalization system 19-31 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 19.5 Global Cost of Living Survey 2008 19-32 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Components of Compensation Packages Tax Codes Government Regulations Standards of Living 19-33 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Labor Market Forces Occupational Status Professional Licensing Requirements Figure 19.6 An Expatriate Balance Sheet Foreign and Excess U.S Taxes Paid by Company Excess Foreign Costs Paid by Company Foreign Service Premium/ Hardship Added by Company U.S Domestic Base Salary Taxes Consumption Savings U.S Hypothetical Tax and Social Security U.S Spendable Income U.S Hypothetical Housing and Utilities U.S Auto Purchase 19-34 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall U.S Levels Labor Relations Comparative Labor Relations Collective Bargaining Union Influence and Codetermination 19-35 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher Printed in the United States of America Copyright © 2010 Pearson Education, Inc publishing as Prentice Hall .. .Chapter Objectives • Describe the nature of human resource management in international business • Detail how firms recruit and select managers for international assignments • Explain how international. .. Describe labor relations in international business 19- 2 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Chapter Objectives (continued) • Discuss how international firms conduct... cultural setting 19- 19 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 19. 3 Phases in Acculturation Honeymoon Disillusionment Adaptation Biculturalism 19- 20 Copyright