IHR Staffing 2

8/3/2019 IHR Staffing 2

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IHR Planning and Staffing


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G lobal Staffing

There are staffing issues that international firms confrontthat are either not present in a domestic environmentor are complicated by the international context in whichthese activities take place. How an organizationresponds to them is partly determined by factors suchas

1. G eneral staffing policy on key positions in headquartersand subsidiaries

2. The constraints placed by the host government onhiring policies

3. Staff availability


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The Expatriate or the Host Country

ManagerMultinationals must decide whether to useexpatriates or home country nationals

Need to look at some questions G iven the firm s strategy, what is the preference

for the position?


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The Expatriate or the Host CountryManager

Using expatriate managers Do parent country managers have the appropriate

skills? Are they willing to take expatriate assignments? Do any laws affect the assignment of expatriate

managers?

Using host country managers Do they have the expertise for the position? Can we recruit them from outside the company?


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Is the Expatriate Worth It?

Decisions must take into account costs of suchassignments

High cost High failure rate


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Approaches to Staffing

1. Ethnocentric- Few foreign subsidiaries haveany autonomy and strategic decisions aremade at headquarters. Key positions indomestic and foreign operations are held byHQ personnel. There are often soundbusiness reasons for pursuing ethnocentrism

a. Perceived lack of qualified host nationalsb. Need to maintain good communication,

coordination and control


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Contd.

An ethnocentric policy has its own disadvantagesa. It limits promotion opportunities of HCNs which

leads to reduced productivity and increased turnover

b. The adaptation of expatriate managers to hostcountriesc. When PCN and HCN compensation packages are

compared, considerable income gaps are viewed


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2. Polycentric- The MNE treats each subsidiary as adistinct national entity with some decision makingautonomy. Subsidiaries are usually managed bylocal nationals who are seldom promoted to HQ.The main advantage of a polycentric policy are

a. It eliminates language barriers, avoids adjustmentproblems of expatriatesb. Employment of HCNs allows a MNC to take a low

profile in sensitive political situationsc. It is less expensived. G ives continuity to the management of foreign

subsidiaries


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contd

The disadvantages areCultural differences may isolate corporatehead quarters

HCNs have limited career paths with hQ


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3. G eocentric- Here MNEs take a globalapproach to its operations, recognizingthat each part makes unique contributionwith its unique competence. It has threeadvantages

a. It enables multi national firms to developan international executive team

b. It overcomes the federation drawbackc. It supports cooperation and resource

sharing across units


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contd

The disadvantages area. Host govts. Want a high number of their

citizens employed and may utilize

immigration controls for this purposeb. It can be expensive to implement because

of increased training cost


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4 . Regiocentric- This approach reflects thegeographic strategy and structure of themulti national. It uses a wider pool of

managers but in a limited way. Staff maymove outside their countries but onlywithin a particular geographic region.


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Advantages and disadvantages of using PCNs, TCNs and HCNs

PCNsAdvantages1. Organizational control and coordination2. Promising managers are given international experience3. PCNs may be most suited because of special skillsDisadvantages1. The promotional opportunities of HCNs are limited2. Adaptation to host country may take a long time3. PCNs may impose an inappropriate HQ style4 . Compensation for PCNs and HCNs may differ


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contd

TCNsAdvantages1. Salary and benefit requirements may be lower than

for PCNs2. TCNs may be better informed than PCNs about the

host country environmentDisadvantages1. Transfers must consider possible national

animosities

2. The host govt. may resist hiring of TCNs3. TCNs may not want to return to their own countries

after the assignment


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contd

HCNsAdvantages1. Language and other barriers are limited2. Hiring costs are reduced and no work permit is

required3. Continuity of management improves4 . G ovt policy may dictate hiring of HCNsDisadvantages

1. Control of HQ may be impeded2. HCNs have limited career opportunity outside the

subsidiary


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(Country A)ContextualVariables-legal system-cultural distance

Approach to staffing

Firm specific variables

-stage-type of industry-Strategy-organisation

Situation Variables-staff availability-location of assignment-Need for control-locus of decision

GHRM activities-selection-training-compensation-repatriation

Country B

Country C

Determinants of GHRM

Approaches


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Types of international assignments

Companies tend to classify types according to lengthand duration of assignment

1. Short term: upto 3 months; they are usually for

trouble shooting or project supervision2. Extended: upto 1year; these may involve activities

similar to short term3. Long term: varies from 1 to 5 years, involving clearly

defined role in the receiving operation. It is alsoreferred to as the traditional expatriate assignment


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contd

Within these broad categories, it is possible to find what are termednon standard assignments

1. Commuter assignments- special assignments where the personconcerned commutes from the home country on weekly orbiweekly basis to the place of work

2. Rotational assignments- employees commute from home

country to the other country for a short, set period followed bya break in the home country

3. Contractual assignments- used in situations where employeeswith specific skills vital to an international project are assignedfor a limited duration of 6-12 months

4 . Virtual assignments- where the employee does not relocate to ahost location but manages from home base.


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The roles of an expatriate

1. An agent of direct control2. An agent of socialization3. As network builders4 . As boundary spanners5. As language nodes6. Transfer of knowledge and competence


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Comparison of global staffingJapanese

- Young peoplehired, hardly anymobility fromcompanies

-Slow promotionthrough ranks-Loyalty to co.-PA once or twicea year- Appraisal of longterm perf.

American

-Rapidadvancement desired-Loyalty to job

-ComprehensivePA once a year-People hired out of school & co;

job hoppingcommon- Appraisal of short term result

Chinese

-Most peoplehired fromschool, fewerfrom companies

-Slow promotionbut salaryincreases-Lack of loyalty-PA usually oncea year-Five year plan orshort term


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Japanese-Promotion based

on long term perf.& other criteria

-T&D considered

long terminvestment

-Life time

employment

American-Promotions based

on individual,short term perf.

-T&D undertaken

with hesitation

-Job insecurity

Chinese-Promotions based

on perf., ability,family ties, goodrelation withsuperior

-T&D programavailable, stateadministered examfor mgrs-Job security, nowchanging

Contd.


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International recruitment and

selection


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The myth of the global manager

The concept of the global manager appears to be based on thefollowing myths or assumptions

1. There is universal approach to management

2. People can acquire multicultural adaptability and behaviors3. There are common characteristics shared by successful

international managers4 . There are no impediments to mobility


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Factors moderating expats performance

M oderators

1. Inability to adjust to foreign culture2. Length of assignment3. Willingness to move4. Work related factors5. Psychological contract


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Figure 4 -2: The phases of cultural adjustment


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Factors in Expatriate Selection

Selection decision

Cross culturalsuitability Family

requirementsTechnical

ability

Language

Country/cult.

requirements

M NErequirement

IndividualSituation


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Expatriate s selection criteria

Technical and managerial skillsMotive and desire of a manager

Has social skills

Diplomatic skillsMaturity and stabilityFamily factorsAttitude to perform

Ability to cope up with environmental variables


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The use of selection tests

Mendenhall and Oddou propose a four dimensional approach thatattempts to link specific behavioral tendencies to probableoverseas performance

1. The self oriented dimension- the degree to which the expatexpresses an adaptive concern for self preservation, self enjoyment

and mental hygiene2. The perceptual dimension-the expertise that the expat possesses inaccurately understanding why host-nationals behave the way theydo

3. The others oriented dimension-the degree to which the expat isconcerned about host national co workers and desire to affiliatewith them

4 . The cultural-toughness dimension-a mediating variable thatrecognizes that acculturation is affected by the degree to which theculture of the host country is incongruent with that of homecountry


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Expatriate selection in practice

Harris and Brewster argue that expatriate selection, in reality,is an ad hoc process and they propose the coffeemachine system

They suggest that executives chatting around the coffee

machine can start the selection process through a casualconversation about an assignment need confronting oneof them.

Another executive can volunteer the name of a potentialexpatriate, thus starting the informal short listing of

candidatesThe MNCs processes are then activated to legitimize the

decision that has already been taken around the coffeemachine


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Table 4 -2: Harris and Brewster s selection typology


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Family friendly policies

Inter-company networkingJob-hunting assistance

Intra-company employmentOn-assignment career support


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Are female expatriate s different?

External Barriers Self-established

barriersHR manager reluctant

to select femalecandidate

Culturally toughlocations precludefemale expatsStereotypes in selectors

influence decisions

Some women havelimited willingness torelocate

The dual career couple

B arriers to females taking international assignments


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Reasons for expatriates failure

1. Their families2. Financial package3. Lack of ability to cope up with differing societal, legal,

economic and technical demands4 . Shock on new job5. Poor programs for career support6. Lack of support from HQ

7. Inadequate preparation and training8. Selection based on HQ criteria rather than assignment

needs


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INTE RN ATION AL PERFO RMANCE MAN AGEM ENT


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What is performance management?

A process that enables the multinational to

evaluate and continuously improveindividual, subsidiary unit and corporateperformance, against clearly defined, pre-set goals and targets


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Basic components of performance management


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Evaluating subsidiary performance

Factors to consider:

Whole versus part Non-comparable data Volatility of the global environment Separation by time and distance Variable levels of maturity


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Control and performancemanagement

Performance management is part of themultinational s control system

Performance targets, for example, are part of formal controlPerformance management contributes toshaping corporate culture


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Variables affecting expatriate performance


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Individual performance management

The task: Chief executive officer Structure reproducer Troubleshooter Operative

Task variables more under the control of themultinational than environmental factors


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Roles

A role is the organized set of behaviours assigned toa particular positionEffective role behaviour is an interaction betweenthe concept of the role, the interpretation of expectations, the person s ambitions, and the normsinherent in the role


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PCN role conception TCN role conception


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Headquarter s Support

The support of headquarters is important both tothe individual expatriate and accompanyingfamily members as a performance variable

The Employment Contract1. Transactional- specific, short term, monetizable

obligations, limited involvement of parties2. Relational- broad, open-ended, long term

obligations based on both exchanges aroundmonetisable elements and socio-emotionalelements


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The host environment

The external context can be a major determinant of expatriate performanceDiffering demands in terms of context:

Societal Legal Economic Technical

Physical Type of operation involved (eg. IJV versus wholly-ownedsubsidiary)


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Cultural Adjustment

The phases of cultural adjustment


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Non-expatriate performancemanagement

A seemingly neglected groupPerformance effects of factors associated withconstant air travel

Depression, nervous anxiety, sleep disturbance, weightgain, poor diet)

Stress associated with frequent absences and effecton family relationships

Non-standard assignments such as commuterarrangements and virtual assignments share theseaspects


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Performance appraisal

Performance criteria Hard goals: objective, quantifiable and can be

directly measured Soft goals: relationship or trait-based Contextual goals: factors that result from the

situation in which performance occurs

An appraisal system that uses hard, soft andcontextual criteria is advocated


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Contextual model of expatriate performance management


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Other factors affecting appraisalWho conducts the performance appraisalUse of standardized or customized appraisalformFrequency of appraisalPerformance feedback

Timely G eographical distance affects


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Appraisal of HCNs

The practice itself confronts the issue of cultural applicabilityMay be necessary to use local staff and acustomized formLevel of position involved is an importantconsideration

IHR Staffing 2

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