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International Human Resources Cheat Sheet by

International Human Resources

Importance of HRM

Great people are a major resource in sucessful MNEs
Need to get right person in right job at right time for right $$$

Types of expatr­iates

Home country nationals
Third-­country nationals

Geocentric benefits

Managers may move between countries and cultures without losing their personal effect­iveness
Difficult to develop and maintain


Expatriate selection
Screening execs re: desire and potential for foreign assign­ment. Screen for tech exp, ability to adapt (self-­mon­ito­ring, social skills, sensit­ivity) leader­ship.
Expatriate failure
Manager goes home due to bad results, rate of failure is droping, higher in emergin econs (India / China). Cost can be high
Expat failure reasons
Often failure of spouse / family to adapt
Preventing failure
Prep programs for general country unders­tan­ding, cultural sensit­ivity, practical skills
Comp packages should
Motivate, maintain standard of living, reflect respon­sib­ili­ties, ensure after tax $$$ won't fall, maintain $$ equity among peers, compete with industry packages, be easy to admin
reinte­grating the expatriate into the home country. Can pose work, $$, social problems. Find right job for returning manager.

Types of compen­sation plans

Balance sheet approach
Equals $$$ so expats have same purchasing power / living standard
Typical package includes
Base salary, foreign service allowance, fringe benefits, tax differ­entials

Define HRM

Activities to staff a company
Difficult in intern­ational companies because of enviro­nme­ntal, strategic and org challenges

Trends in expatriate assign­ments

< 1 year
Trend to younger and older workers
Mostly male but female is rising

Polyce­ntric: Key Benefits

Local hire usually requires less $$$ than an expat
Host countries prefer local managers
Management develo­pment
Giving top jobs to locals attracts and motivates local workers
Employee Morale
Local workers like to work for local managers for many social and cultural reasons
Expat failure
Expat failure can be $$$ and negative exp. Ceteris paribus locals less likely to fail
Local innovation
Locals understand local markets so a sense of innovation ops


adapts to differ­ences between home & host, HQ strategy DM, local adapts to local market
Acknow­ledges unique merits of country, least $$ staffing, makes host govt and staff happy
Compli­cates contro­lling and coordi­nating, isolates ops, reduces incentive for global perspe­ctive
Approp­riate if

HRM strategy

Great HR = high produc­tivity, comp advantage, value creation
Company strategy and HRM should be integrated

3 types of staff policy

Fill key positions with home country nationals
Host country nationals
Best people for key jobs regardless of nation­ality

Ethnoc­entric: Key Benefits

Command & control
Expatr­iates are familiar with home country so can be counted upon to transfer processes
Local talent gaps
If shortage locally
Social integr­ation
Symbol­ically and operat­ionally integrates policies, fortifies culture
Local implem­ent­ation
Expats offset breakdown of policies in transfer
High turnover locals
Expats have lower liklihood of defecting to a local company, Reduces IP loss.
Management develo­pment
Expat hard earned exp boosts knowledge and promotes exec leadership


Presumes ideals, values and proactices superior, HQ are DM locals follow orders
Leverages core compet­ance, developes MGMT team
Superi­ority complex, arrogance, cultural illite­racy, may overlook local innovation ops
Approp­riate if


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