Welcome to class of International Human Resource Management by

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Welcome to class of International Human Resource Management by Powered By Docstoc
					      Welcome to class of
International Human Resource

    Dr. Satyendra Singh
   University of Winnipeg
      Learning Objectives
 Creating a company “global mindset”
 International HRM approaches
 Recruitment selection and training
 Expatriates
 Compensation
 Allowances
 Bonus
 Challenges
        The Global Mindset
 Expatriate
   A person living outside citizenship country

 Global Mind-set
   A mind-set that combines an openness to and an
    awareness of diversity across markets and
    cultures with a propensity and ability to synthesize
    across this diversity
International HRM Approaches…
 Ethnocentric
    Hiring and promoting employees on the basis of parent
     company’s home country frame of reference
    Bias of the home country
    Top executives get foreign experience
 Polycentric
    Hiring and promoting employees on the basis of specific local
     context of the subsidiary
    Movement between home and host country uncommon
    Must give locals to elevated position revoke permit
    Local supplier preferred
    Managers unwilling to take promotion
    Local managers may have their own agenda
International HRM Approaches
 Regiocentric
   Hiring and promoting employees on the basis of
    the specific regional context of the subsidiary
   Hiring can be from both countries– home or host
   Problem with third country employees

 Geocentric
   Hiring and promoting employees on the basis of
    ability and experience without considering race or
   Best Practices
Recruitment, Selection and Training…
  Parent Country National (PCNs) or Home
   Country National
    Study of language and culture

  Host Country National (HCN)
    Hired in the host country

  Third Country National
Recruitment, Selection and Training
  Third Country National (TCN)
    May accept lower wages and benefits than will
     employees from the home country
    May also come from a culture similar to that of the
     host country
    May have worked for another unit of the IC and be
     familiar with policies, procedures and people
    Common approach in developing countries
    May not be welcome by host country
    May come from an international agency
    Greater use as companies take geocentric view
 Family
   Nine of ten expatriate failures family-related

   Unhappy spouses major reason for early return

   Company losing a “million-dollar corporate-training
    investment” in executive
       Language Training

 Language Trap
   International business person speaks only
    home language
   English language has become lingua franca
   Chinese new “hot” language to know
        Expatriate Services…
• Health care programs to assist companies
  and expatriates with
  –   Claims administration
  –   Language
  –   Translations
  –   Currency conversions
  –   Service standardization
  –   www.ExpatExpert.com
  –   www.branchor.com
      Expatriate Services

 Banking services
    Online, 24-hour assistance
 Training
 Culture and language
 House hunting, utilities hook up, grocery and
  hardware shopping, long-distance care for
  relatives, schools, organizations, and cultural
 Salaries
   Paying home country nationals the same salaries
    as their domestic counterparts
      permits worldwide consistency
      bonuses
   Increasing   use of third country nationals- often
    treated like PCNs
   Trend to pay HCNs same base
 Housing Allowance
   Permits executive to live at same standard as at home
 Cost-of-Living Allowance
   Based on differences in price of food, utilities,
    transportation, entertainment, clothing, personal
    services, and medical expenses as compared to home
 Allowances for Tax Differentials
   Ensures expatriates will not have less after-tax pay at

 Education Allowances
   Insures children receive education equal to that at home

 Moving and Orientation Allowances
   Household effects and language instruction
• Bonuses
   Expatriate employee compensation payments in
    addition to base salary and allowances because of
    hardship, inconvenience, or danger
   Bonuses include
      Overseas premiums
      Contract termination payments
      Home leave reimbursement
   Compensation Packages

 For    expatriate   employees,     packages
  incorporate many types of payments or
  reimbursements and must take into
  consideration exchange rates and inflation
       Compensation Packages
        Can Be Complicated

 Allowances and percentage of base salary are
  usually paid in host country currency
   Percentage usually 65 to 75 percent, with remainder
    banked where employee directs
 What Exchange Rate?
   Must be chosen
   More difficult in countries with exchange controls and
    nonconvertible currencies
     Compensation of Third
       Country Nationals

 Trend    toward    applying    the     same
  compensation plan to third country nationals
  as home country expatriates
 Problems can arise in
   The calculation of income tax differential when
    American expatriate compared with expatriate
    from another country
   Home leave bonus
          International Status
 Entitles expatriate employee to allowances
  and bonuses applicable to the place of
  residence and employment
 Perks
   Compensate executives while minimizing taxes
        Private pension plan
        Retirement payment
        Life Insurance
        Hidden slush funds (can be illegal)
        Club membership
        Company house
        Foreign affiliate directorship