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 $$$ |
Types of expatriates
Home country nationals |
Third-country nationals |
Geocentric benefits
Managers may move between countries and cultures without losing their personal effectiveness |
Difficult to develop and maintain |
How MNE HRM
Expatriate selection |
Screening execs re: desire and potential for foreign assignment. Screen for tech exp, ability to adapt (self-monitoring, social skills, sensitivity) leadership. |
Expatriate failure |
Manager goes home due to bad results, rate of failure is droping, higher in emergin econs (India / China). Cost can be high |
Expat failure reasons |
Often failure of spouse / family to adapt |
Preventing failure |
Prep programs for general country understanding, cultural sensitivity, practical skills |
Comp packages should |
Motivate, maintain standard of living, reflect responsibilities, ensure after tax $$$ won't fall, maintain $$ equity among peers, compete with industry packages, be easy to admin |
Repatriation |
reintegrating the expatriate into the home country. Can pose work, $$, social problems. Find right job for returning manager. |
Types of compensation plans
Balance sheet approach |
Equals $$$ so expats have same purchasing power / living standard |
Typical package includes |
Base salary, foreign service allowance, fringe benefits, tax differentials |
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Define HRM
Activities to staff a company |
Difficult in international companies because of environmental, strategic and org challenges |
Trends in expatriate assignments
Time |
< 1 year |
Age |
Trend to younger and older workers |
Gender |
Mostly male but female is rising |
Polycentric: Key Benefits
Economical |
Local hire usually requires less $$$ than an expat |
Nationalism |
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 $$$ and negative exp. Ceteris paribus locals less likely to fail |
Local innovation |
Locals understand local markets so a sense of innovation ops |
Polycentric
Assumptions |
adapts to differences between home & host, HQ strategy DM, local adapts to local market |
Advantages |
Acknowledges unique merits of country, least $$ staffing, makes host govt and staff happy |
Drawbacks |
Complicates controlling and coordinating, isolates ops, reduces incentive for global perspective |
Appropriate if |
Multidomestic |
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HRM strategy
Great HR = high productivity, comp advantage, value creation |
Company strategy and HRM should be integrated |
3 types of staff policy
Ethnocentric |
Fill key positions with home country nationals |
Polycentric |
Host country nationals |
Geocentric |
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 |
Ethnocentric
Assumptions |
Presumes ideals, values and proactices superior, HQ are DM locals follow orders |
Advantages |
Leverages core competance, developes MGMT team |
Drawbacks |
Superiority complex, arrogance, cultural illiteracy, may overlook local innovation ops |
Appropriate if |
International |
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Created By
https://www.speedwell.com.au
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