LESSONLESSON11-111-1GOALSGOALS

Differentiate between host-Differentiate between host-country nationals, parent- country nationals, parent- country nationals, and country nationals, and third-country nationalsthird-country nationals

Define the four dominant Define the four dominant human resourceshuman resources

management approaches.management approaches.

FOUNDATIONS OF HUMAN RESOURCESMANAGEMENT

Factors contribute to HR different in global environ.

1. Worldwide labor markets1. Mix of workers, labor costs, companies

2. Worker mobility1. Physical, economic, legal and cultural barriers.

3. Managerial practices1. Using resources (people) in diff. ways

4. National and Global Orientations1. Aspire to become global.2. Yet setting aside national approaches is challenging.

Who Makes Up the Labor Market?

Review from Chapter 19…Host-country nationalsExpatriatesParent-country nationalsThird-country nationals

Personal Selling in International MarketsHost-country nationals (locals) are employees based in

their home country. Product knowledge must be taught.Expatriates are employees living and working in a

country other than their home nation. Have knowledge but not culture.

Parent-country or home-country – expatriates from the nation the home company is located.

Third-country nationals are citizens of one country employed by a company from another country who worked in a third county. Speak several languages and are culturally sensitive.

Balance advantages and disadvantages of each.Locals

Adv. - usually culturally sensitive and easy to find. Dis. – may not have knowledge and skills

Parent-country Adv. – have needed knowledge and skills. Dis. – lack appropriate local language and cultural skills. And

more costly. Gov’t may also restrict hiring.

Third-country Adv. – more adaptable to local conditions. Speak languages and

are more culturally sensitive. May be unqualified and may lack desired company orientation.

Four Human Resources Management Approaches

Ethnocentric approachPolycentric approachRegiocentric approachGeocentric approach

Decision depends on: Gov’t regulations and the size, structure, strategy, attitudes, and staffing of the company.

Ethnocentric Approach

Uses natives of the parent country of a business to fill key positions at home and abroad.

UsefulnessNew Technology in another countryPrior experience is important.Goal is to prepare the host country employees to

manage the business.Drawbacks

Deprives the locals of jobs, lowers morale of workers, may not be culturally sensitive to locals.

Polycentric Approach

Uses natives of the host country to manage operations within their country and parent-country natives to manage at headquarters.

UsefulnessLocals manage the companies in their own country and

are better prepared.CheaperBetter for political reasons.

DisadvantagesCultural gap between subsidiary managers and

headquarter managers.Limited opportunities for advancement.

Regioncentric Approach

Uses managers from various countries within the geographic regions of a business.

UsefulnessWhen regional expertise is needed.

DisadvantagesCommunication – diversity of employees may

not understand corporate headquarter’s views.International experience of managers may not

be considered

Geocentric Approach

Uses the best available managers without regard for their countries of origin.

UsefulnessShould have a worldwide strategy of business

integration in place.Develops international managers and reduces

national bias.Disadvantages

Government regulationsExpensiveSlow to get all employees trained and located

LESSONLESSON11-211-2GOALSGOALS

Explain how staffing needs Explain how staffing needs are determined.are determined.

Describe how potential Describe how potential employees are recruited.employees are recruited.

Describe three factors to Describe three factors to consider when hiring job consider when hiring job applicants.applicants.

SELECTING AND TRAINING STAFF

Determining Staffing Needs

Employment forecasting – estimating in advance the types and numbers of employees needed.

Supply analysis – determining if there are sufficient types and #’s of employees available.

Companies must balance the demand for and supply of employees.

Filling individual jobs

Factors: What will the new employee be assigned to do?

Factors: Qualifications needed?Factors: combining technical skill,

personality traits, environmental factors for success?

All are answered by a JOB DESCRIPTION

Job description

A document that includes the job identification, job statement, duties and responsibilities, and job specifications and requirements.

Recruiting Potential Employees

Job announcement – Different channelsInside the company

Someone already working for the company

Outside the companyParent-company national? Host-country national? Third-country

national?

Type of employee neededUnskilled or semiskilled – local public outlet (Job Service)Skilled, technical, managerial – pub or private outlet usedHigh ranking man pos (recruitment firm – headhunters)

Selecting Qualified Employees

Finding the best applicantBest applicant is the person with the

highest potential to meet the job expectations.

3 main factors:

Competence-

Factor that relates to the ability to perform.Ex: Technical Knowledge, Specialty Areas, Experience, leadership skills, Cultural awareness and language skills, Communication Skills

Adaptability-

Relates to the ability to adjust to different conditions.

Seriousness about working in international business, working abroad.

Work with a wide variety of people.Work well with divers groups.Adapt to other cultures with ease.Alternate managerial styles.

Personal characteristics-

Maturity of the employee.EducationGenderSocial AcceptabilityDiplomacyGeneral HealthStability of Family*

LESSONLESSON11-311-3GOALSGOALS Understand the importance Understand the importance

of training and of training and development for global development for global employees.employees.

Identify the common types Identify the common types of training and develop-of training and develop-ment for international ment for international employees.employees.

Explain how training and Explain how training and development programs development programs reduce the chance of reduce the chance of employee failure.employee failure.

MAXIMIZATION OF HUMAN RESOURCES

Training and Development are Critical

Major Expense

Types of Training and Development

Job-related issues

Language and relationship issues

Cross-cultural training

Spousal employment counseling

Table on Page 298Make one relevant to

Your Business Plan

Training and Development Help Prevent Failure

Why global employees fail

Training and Development Help Prevent Failure

Reducing the chance of employee failure

LESSONLESSON11-411-4GOALSGOALS Understand that employee Understand that employee

motivation is culturally based.motivation is culturally based.

Explain the common Explain the common components of compensation components of compensation packages for parent-country packages for parent-country nationals.nationals.

Appreciate the complexities of Appreciate the complexities of evaluating employee perform-evaluating employee perform-ance in an international setting.ance in an international setting.

List strategies that help to List strategies that help to minimize repatriation minimize repatriation problems.problems.

RETAINING HUMAN RESOURCES

Retaining Human Resources

Cultural employee motivationWhat motivates employees in US?Different values in other countries.International managers use motivation

strategies that are culturally acceptable to the employee.

Compensating employees

Cultural sensitivityCash and noncash items

Base salarySalary is in line with living expenses in this country

Expatriate bonusCompensation for moving and adjustment problems.

Cost-of-living adjustmentAdjusted pay for different cost of living

Employee benefitsRelocation, insurance, and extras

Solve

Location Index Income Cost of Living

1 London 1.65 $35,000

2 Mexico City 1.11 $35,000

3 Ottawa .98 $20,000

4 Paris 1.53 $30,000

5 Tokyo 1.73 $50,000

Evaluating employee performance

Employee performance is influenced by 3 factors:EnvironmentThe TaskThe Individual’s Personality

Why is evaluating the performance of international employees so challenging?

Anticipating repatriation

REPATRIATION – the process a person goes through when returning home and settling after having worked abroad.

Adjustments:Reverse Culture Shock

Work, finances, and social relationships

Sense of Isolation Others have not experience the same things you have.

Smooth the transition by…