Chapter 17 International HRM (IHRM)

For use with Human Resource Management in South Africa 4eby Grobler, Wärnich et al

ISBN: 1408019515 © 2010 Cengage Learning

Chapter 17

International HRM (IHRM)



• Identify key forces driving the globalisation of organisations

• Identify the types of organisational forms used for competing internationally

• Understand the different types of cultures found• Explain how domestic and international HRM differ• Discuss the staffing process for individuals working

internationally• List and define four types of international employees• List the different types of international assignments

found• Discuss issues relating to the orientation of international

employees

Chapter outcomes



Chapter outcomes (continued)• Identify the unique training needs for international

assignees• Reconcile the difficulties of home country and host-country

performance appraisals• Identify the characteristics of a good international

compensation plan• Explain the activities needed to increase expatriate

completion rates• Discuss the key issues in industrial relations of

multinationals• Describe several international health, safety and security

concerns• Discuss the importance of a global human resource

management information system



Definition

• IHRM -



Main dimensions of IHRM

• Selection and recruitment of qualified individuals capable of furthering organisational goals

• Training and development of personnel at all levels to maximise organisational performance

• Assessment of employee performance to ensure that organisational goals are met

• Retention of competent corporate personnel, who can continue to facilitate the attainment of organisational goals

• Management of the interface between labour and management to ensure smooth organisational functioning



Why do companies decide to do business abroad?



• Exporting• Licensing• Management contracts• Sole ownership• Types:

Organisational firms used internationally



What types of cultures are found around the world?

• What is culture?

• Identifying international cultures



• More functions• • More involvement in employees’ personal lives• Change in emphasis as the ________________ varies• More ____________ influences

What impact does going abroad have on the activities of HR professionals?



Environmental forces

Legal forces

___________

__________

Economic forces

National forces

HR systems Policies/procedures

Recruitment ___________

Training Motivation/reward

systems __________________

Career paths

Corporate culture

Corporate culture



Recruitment• Expatriates• Ethnocentric approach –• Polycentric approach –• Regiocentric approach –• Geocentric approach –• Inpatriate



Reasons for expatriate failure• Inability of the manager's spouse to adjust to a different

physical or cultural environment• The manager's inability to adapt to a different physical or

cultural environment • Other family-related problems• The manager's personality of emotional immaturity• The manager's inability to cope with the responsibilities

posed by overseas work• The manager's lack of technical competence and• The manager's lack of motivation to work overseas



International assignments• Length and duration:

– Short-term – – Extended –– Long-term –

• Types:



Selection• 4 different types of employees are normally appointed

to overseas positions:



SELECTION (CONTINUED)

• Adaptability• Diplomacy• Language ability• Communication skills• Managerial talent• Maturity & emotional

stability• Leadership skills• Cultural sensitivity• Technical knowledge

• Experience within the company

• Interest in overseas work

• Initiative and creativity• Previous overseas

experience• Age• Stability of marital

relationship• Spouse’s and family’s

adaptability

Factors to be considered when selecting candidates for overseas appointments:



Orientation• Traditional people involved still remains valid• Need for additional background information (e.g.

cultural practices, language etc.)• For longer projects local orientation is also

important



Training & Development

• Preparation of expatriates:– _____________ of expatriates before, during and

after foreign assignments– _____________ and training of expatriate families

before, during and after foreign assignments– _____________ of the headquarters staff

responsible for the planning, organisation and control of overseas operations



Training & Development (continued)

• Techniques are categorised into 5 groups:– – – – – Field experiences



Training & Development (continued)• Many companies neglect T&D of expatriates for the

following reasons:– Training is not thought to be effective– The period of time between selection &

expatriate's departure is short, leaving little time to expose him or her to in-depth training prior to departure

– The temporary nature of most assignments does not warrant budget expenditures for training

– The individual dimensions needed for successful acculturation are not well enough known to devise sound training programmes

– There is a belief that technical skills are the main success factors for assignments abroad



Performance appraisal• Performance appraisal (PA) is a fundamental

management tool that can be useful as a basis for functions such as:– Making administrative decisions regarding

personnel actions (eg. promotions and transfers and support for taking disciplinary actions or terminations);

–

– Coaching employees in improving areas of weakness and building upon their areas of strength



Performance appraisal (continued)• Value of PA can be increased by planning, ongoing

performance monitoring and employee development

• • Choice of evaluator• Evaluator’s amount of contact with the expatriate• • • Inadequate establishment of performance

objectives



Retention of personnel

• Compensation• Repatriation



Typical expatriate compensation components



• Negotiation• Balance sheet approach –

• Localisation• Lump sum• •

Six approaches followed to compensate expatriates



Repatriation• Have to facilitate adaption to foreign adjustment and on return to

headquarters• Some expatriates are frustrated as they can often not use their

new skills obtained abroad immediately• Companies should provide a better support system to ally the

employee’s concerns about career issues and they should have a proper expatriate staffing policy in place



Expatriate adjustment stages



• Approaches to follow:– Hands-off– – – Strategic planning– – Managed totally from headquarters– Interface of headquarters, international human – resource and line management in the field

Labour relations



Discipline & dismissals• Are they the same in all countries?• Compensation• Companies should be well acquainted with the legal

implications of international staff



Transfers, lay-offs and retirement

• Movement of people as part of development• Cultural differences and language• Legal implications



Health, safety & security issues

•

•

•

•



Summary• Globalisation of business continues to grow after

1994 when South Africa became a full member of the international community again.

• Organisations doing business internationally may evolve from organisations engaged in exporting activities to multinational enterprises, global and transnational organisations.

• Legal, political, economic and cultural factors influence global HR management.

• One scheme for classifying national cultures considers power distance, individualism masculinity/feminity, uncertainty avoidance and long-term orientation.



Summary

• Staffing global jobs can be done using expatriates, host-country nationals and third country nationals.

• Global assignments can be used for a number of reasons and for varying durations.

• The selection of employees should consider cultural adjustment, organisational requirements, personal characteristics, communication skills and personal/family factors.

• Once selected, the assignments of global employees must be managed through both effective expatriation and repatriation.



Summary• Training and development for employees focus on pre-departure

orientation and training, continued employee development and readjustment training for repatriates.

• Compensation practices for employees are much more complex than those for domestic employees because of the numerous factors to be considered.

• To balance the pros and cons of home-country and host-country evaluations, performance evaluations should combine the two sources of appraisal information.

• Labour-management relations vary from country to country.• Global organisations must be concerned about the health, safety

and security of their employees.

Chapter 17 International HRM (IHRM)

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