Chapter 10 International Human Resource Management Copyright© 2004 Thomson Learning All rights reserved Learning Objectives •• Know Know the the basic basic functions functions ofof human human resource resource management management •• Define Define international international human human resource resource management management •• Understand Understand the the difference difference between between international international and and domestic domestic human human resource resource management management •• Know Know the the types types ofof workers workers used used by by multinationals multinationals Copyright© 2005 South-Western/Thomson Learning All rights reserved Learning Objectives •• •• •• •• Know Know how how and and when when toto use use expatriate expatriate managers managers Know Know the the skills skills necessary necessary for for aa successful successful expatriate expatriate assignment assignment Understand Understand how how expatriate expatriate managers managers are are compensated compensated and and evaluated evaluated Appreciate Appreciate the the issues issues regarding regarding expatriate expatriate assignments assignments ofof women women managers managers Copyright© 2005 South-Western/Thomson Learning All rights reserved Learning Objectives •• Know Know what what toto do toto make make the the expatriate expatriate assignment assignment easier easier for for their their female female expatriates expatriates •• Understand Understand e.HR e.HR systems systems and and how how they they can can be be useful useful inin IHRM IHRM •• Understand Understand the the relationship relationship between between choice choice ofof aa multinational multinational strategy strategy and and international international human human resource resource management management Copyright© 2005 South-Western/Thomson Learning All rights reserved Human Resource Management and Functions •• HRM: HRM: deals deals with with the the entire entire relationship relationship ofof the the employee employee with with the the organization organization •• Recruitment: Recruitment: process process ofof identifying identifying and and attracting attracting qualified qualified people people toto apply apply for for vacant vacant positions positions •• Selection: Selection: process process ofof filling filling vacant vacant positions positions inin the the organization organization Copyright© 2005 South-Western/Thomson Learning All rights reserved Basic HRM Functions •• Training Training and and development: development: giving giving employees employees the the knowledge, knowledge, skills, skills, and and abilities abilities toto perform perform successfully successfully •• Performance Performance appraisal: appraisal: system system toto measure measure and and assess assess employees’ employees’work work performance performance Copyright© 2005 South-Western/Thomson Learning All rights reserved Basic HRM Functions •• Compensation: Compensation: organization’s organization’s entire entire reward reward package, package, including including financial financial rewards, rewards, benefits, benefits, and and job job security security •• Labor Labor relations: relations: ongoing ongoing relationship relationship between between an an employer employer and and those those employees employees represented represented by by labor labor organizations organizations Copyright© 2005 South-Western/Thomson Learning All rights reserved International Human Resource Management •• •• All All HRM HRM functions, functions, adapted adapted toto the the international international setting setting Two Two added added complexities complexities compared compared toto domestic domestic HRM HRM •• Must Must choose choose aa mixture mixture ofof international international employees employees •• Must Must decide decide the the extent extent ofof adaptation adaptation toto local local conditions conditions Copyright© 2005 South-Western/Thomson Learning All rights reserved Types of Employees in Multinational Organizations •• •• Expatriate: Expatriate: employee employee from from aa different different country country Home Home country country nationals: nationals: expatriate expatriate employees employees from from the the parent parent firm’s firm’s home home country country •• Third Third country country nationals: nationals: expatriate expatriate workers workers who who come come from from neither neither the the host host nor nor home home country country Copyright© 2005 South-Western/Thomson Learning All rights reserved Types of Employees in Multinational Organizations •• Host Host country country nationals: nationals: local local workers workers who who come come from from the the host host country country where where the the unit unit isis located located •• Inpatriate: Inpatriate: employees employees from from foreign foreign countries countries who who work work inin the the country country where where the the parent parent company company isis located located Copyright© 2005 South-Western/Thomson Learning All rights reserved Proper Steps to e.HR Implementation •• Develop Develop business business case case toto justify justify using using e.HR e.HR or or upgrade upgrade toto e.HR e.HR •• Make Make the the system system customer-focused customer-focused •• Be Be proactive proactive •• Organize Organize collected collected data data inin ways ways that that isis useful useful toto the the organization organization Copyright© 2005 South-Western/Thomson Learning All rights reserved Multinational Strategy and IHRM •• IHRM IHRM orientation: orientation: company’s company’s basic basic tactics tactics and and philosophy philosophy for for coordinating coordinating IHRM IHRM activities activities for for managerial managerial and and technical technical workers workers Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 10.8: IHRM Orientation and IHRM Practices for Managers and Technical Workers Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 10.8: IHRM Orientation and IHRM Practices for Managers and Technical Workers Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 10.8: IHRM Orientation and IHRM Practices for Managers and Technical Workers Copyright© 2005 South-Western/Thomson Learning All rights reserved Multinational Strategy and IHRM •• Ethnocentric Ethnocentric IHRM: IHRM: all all aspects aspects ofof HRM HRM for for managers managers and and technical technical workers workers tend tend toto follow follow the the parent parent organization’s organization’s home-country home-country HRM HRM practices practices Copyright© 2005 South-Western/Thomson Learning All rights reserved Benefits of Ethnocentric IHRM •• Little Little need need toto recruit recruit qualified qualified host host country country nationals nationals for for higher higher management management •• Greater Greater control control and and loyalty loyalty ofof home home country country nationals nationals •• Key Key decisions decisions centralized centralized Copyright© 2005 South-Western/Thomson Learning All rights reserved Costs of Ethnocentric IHRM •• May May limit limit career career development development for for host host country country nationals nationals •• Host Host country country nationals nationals may may never never identify identify with with the the home home company company •• Expatriate Expatriate managers managers are are often often poorly poorly trained trained for for international international assignments assignments and and make make mistakes mistakes •• Expatriates Expatriates may may have have limited limited career career development development Copyright© 2005 South-Western/Thomson Learning All rights reserved Regiocentric and Polycentric IHRM •• Regiocentric Regiocentric IHRM: IHRM: region-wide region-wide HRM HRM policies policies are are adopted adopted •• Polycentric Polycentric IHRM: IHRM: firm firm treats treats each each country-level country-level organization organization separately separately for for HRM HRM purposes purposes •• Greater Greater responsiveness responsiveness toto host host country country differences differences Copyright© 2005 South-Western/Thomson Learning All rights reserved Benefits of Polycentric and Regiocentric HRM Policies •• Reduces Reduces costs costs for for training training ofof expatriate expatriate managers managers from from headquarters headquarters •• No No investment investment inin language language training training •• Fewer Fewer problems problems with with adjustments adjustments toto local local cultures cultures Less Less expensive expensive Copyrightâ 2005 South-Western/Thomson Learning All rights reserved Costs of Polycentric and Regiocentric IHRM Policies •• Coordination Coordination problems problems with with headquarters headquarters •• based based on on cultural, cultural, language, language, and and loyalty loyalty differences differences •• Limited Limited career-path career-path opportunities opportunities for for host host country country and and regional regional managers managers •• Limited Limited international international experience experience for for home home country country managers managers Copyright© 2005 South-Western/Thomson Learning All rights reserved Global IHRM Orientations •• •• Recruiting Recruiting and and selecting selecting worldwide worldwide Assigning Assigning the the best best managers managers toto international international assignments assignments regardless regardless ofof nationality nationality Copyright© 2005 South-Western/Thomson Learning All rights reserved Global IHRM Orientations •• Benefits Benefits •• Bigger Bigger talent talent pool pool •• Develops Develops international international expertise expertise •• Helps Helps build build transnational transnational organizational organizational cultures cultures •• Costs Costs •• Importing Importing managerial managerial and and technical technical employees employees not not always always possible possible Added Added expense expense Copyrightâ 2005 South-Western/Thomson Learning All rights reserved IHRM Orientation and Multinational Strategy •• Early Early stages stages ofof internationalization—ethnocentric internationalization—ethnocentric IHRM IHRM •• Multilocal Multilocal strategies—ethnocentric strategies—ethnocentric or or regiocentric regiocentric •• Regional Regional strategy—regiocentric, strategy—regiocentric, polycentric polycentric or or global global Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 10.9: IHRM Orientations and Multinational Strategies Copyright© 2005 South-Western/Thomson Learning All rights reserved ... Priorities for Success Factors by Assignment Characteristics Copyright© 2005 South-Western/Thomson Learning All rights reserved Training and Development •• Cross- cultural Cross- cultural training: training:... and domestic domestic human human resource resource management management •• Know Know the the types types ofof workers workers used used by by multinationals multinationals Copyright© 2005 South-Western/Thomson... country •• Sent Sent toto worldwide worldwide locations locations toto develop develop cross- cultural cross- cultural skills skills Copyright© 2005 South-Western/Thomson Learning All rights reserved