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
         Management

             by
    Dr. Satyendra Singh
   University of Winnipeg
          Canada
      Learning Objectives
  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
    citizenship
   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
               Expatriates
 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
  items
             Compensation
 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
              Allowances…
 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
    home
                   Allowances

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

 Moving and Orientation Allowances
   Household effects and language instruction
                  Bonuses
• 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