CHAPTER 9

Global Human Resource Management

Chapter Overview

This is the first chapter in Part 3 of the book. It provides an overview of some of the issues affecting global human resource management, including: recruiting and selecting candidates for global assignments, compensation, cross-cultural and language training, adjustment to host country (culture shock), and repatriation.

Learning Objectives

By the end of the chapter, students should be able to:

1. Describe how strategy and global human resource management practices are related

2. Define the different types of emerging assignments for global managers

3. Identify the reasons many organizations are increasingly turning to short-term and traveling global assignments

4. Discuss the challenges associated with recruiting, selecting, training, compensating, and appraising expatriate managers and employees

5. Understand how increases in global competition and cross-border inter-firm agreements are shaping the nature of global human resource deployment in the early part of the 21st century

Barriers to Student Understanding

Students should have no difficulty understanding the information or concepts in this chapter.

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Lecture Outline

Paragon-Mart’s Deployment of Global Assignees

Introduction to Global Human Resource Management

Strategy and Global HRM FitHuman CapitalResource-Based View of the Firm

Global AssignmentsTypes of Global Assignees

Identification of Knowledge, Skills, Abilities, and Other Characteristics

Recruiting Potential Global AssigneesGovernment RestrictionsRegional Trade AgreementsE-RecruitingRealistic Job Previews

Selecting the Best Candidate

Compensating Global AssigneesTypes of Compensation ApproachesAllowances in Expatriate Pay PackagesDoes One Size Fit All?

Cross-Cultural and Language TrainingTypes of TrainingWhich Approach to Use?

Adjustment in the Host CountryCulture ShockTypes of AdjustmentPoor Adjustment and Its ConsequencesWhat Influences the Adjustment Process?

RepatriationRepatriate TurnoverWays to Improve the Repatriation Process

Labor Relations and the Global Corporation

Conclusion

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Key Terms

Students will be introduced to the following key terms:

balance-sheet approach

Type of compensation plan for expatriates in which pay is adjusted so that the financial responsibilities the expatriate had before the assignment are kept at the same level while on assignment.

culture shock The stressful, accumulated effect of being exposed to unfamiliar cues and behaviors in another culture. The three stages of culture shock include: honeymoon, hostile attitude, and acceptance.

e-recruiting Refers to any activity related to recruiting individuals via the Internet.

global assignments A position requiring a manager or employee to travel to or live in one or more countries outside of the country in which headquarters is located.

going (or local) market rate

Type of compensation plan for expatriates in which the expatriate’s pay is based on the compensation received by host country local nationals.

host-country nationals Employees from the host location in which a global or transnational organization is operating.

parent-country nationals

Employees from the country in which the headquarters is located. Also known as expatriates.

realistic job preview Provides accurate information about the attractive and unattractive aspects of a global assignment, working conditions, and location to ensure that potential employees develop appropriate expectations.

resource-based view of the firm

Theory of strategic management that argues that sustainable competitive advantage can be achieved when the organization’s resources–physical, organizational, or human–are valuable, rare, hard to imitate, and without substitutes.

third-country nationals

Employees from a country other than where the parent organization’s headquarters or overseas operations are located.

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Suggested Answers to Review, Critical Thinking, and Discussion Questions

1. What is the difference between a parent-, host-, and third-country national? Explain.

Host country nationals are from the host country in which the organization is operating. Parent country nationals (also known as expatriates) are employees from the country in which the headquarters is located. Third country nationals are from a country other than where the parent organization’s headquarters or overseas operations are located.

2. Compare and contrast an ethnocentric staffing policy with a polycentric staffing policy.

An ethnocentric staffing approach tends to be utilized when overseas ventures have little autonomy, strategic decisions are made at headquarters in the parent country, and most of the key positions at the foreign venture are occupied by parent country nationals. Firms use this approach in early stages of internationalization and when a firm is establishing a new business or product overseas and prior experience is critical.

Organizations that rely mostly on HCNs to staff their overseas business operations are following a polycentric staffing approach. This tends to occur when a multinational company considers each of its overseas ventures as a unique national entity that possesses autonomy in decision-making. These overseas ventures tend to be managed by host country nationals who rarely receive promotions to headquarters in the parent country. That is, a firm believing in this approach will decentralize on a country-by-country basis; coordination between overseas ventures will be minimal, and the individual locations will be responsible for developing their own personnel policies and guidelines.

3. What is a realistic job preview? Why is it important to help a candidate for a global assignment develop realistic expectations of the job?

A realistic job preview is one in which both the good and bad aspects of a job or an overseas assignment are presented to a candidate, rather than just the good points. Candidates who have a realistic expectation of the job are much more likely to be happy and succeed in the position.

4. Structured interviews tend to be more valid and reliable than unstructured interviews. Describe the unique characteristics of a structured interview.

During a structured interview, (a) questions are based on a job analysis (a systematic analysis of the job’s tasks, duties, and responsibilities); (b) the same questions are asked of each candidate; (c) consistent scoring is applied to each of the candidate’s responses; and, (d) detailed notes are taken.

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5. Identify and describe three typical allowances found in many expatriate compensation packages.

Financial allowances: Examples include company paid children’s education allowance, home leave allowance, mobility premium, and assignment completion bonuses.

Social adjustment allowances: Examples include rest and relaxation leave, language and cross-cultural training, club memberships, and assistance with locating a new home.

Family support allowances: Examples include childcare providers, assistance locating spousal employment, and assistance locating schools for children.

6. Assume you are being sent on a three-year global assignment in which you will be expected to interact with host-country nationals and speak the host-country language. Which cross-cultural training methods/techniques would you need to prepare you for this assignment?

Answers will vary by student, based on their preferred methods of training (lectures, reading material, videotapes, seminars) and prior international experience. Generally, students should mention language training and knowledge of the local customs, laws, economy, and religion, plus a general understanding of the country’s history and geography.

7. Identify and describe the three stages of culture shock.

The three stages of culture shock are honeymoon, hostile attitude, and acceptance.

The honeymoon stage can last from a few days to six months and is characterized by a great deal of excitement about being in a new place, eating new types of food, meeting new and interesting host country nationals, and so on.

The hostile attitude stage begins as soon as the honeymoon stage starts to slip away, usually when problems start to occur with school, healthcare, shopping, transportation, telephone systems, and so on. In essence, the host country is blamed for everything. This is a crisis stage that must be overcome for a successful assignment.

The acceptance stage begins when the assignee starts to accept and enjoy the host country and its people for what they are; not better or worse than the home country culture, just different and interesting in its own right.

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8. What problems can undermine the effectiveness of performance appraisals?

Note: This question should be changed to “What problems can undermine the successful adjustment to a host culture?

After arriving in the host culture, several factors can hamper the adjustment process, such as inadequate help with one’s family adjustment. In addition, research indicates that global assignees that perceive that their companies are supporting them in the adjustment process (e.g., giving assignees some time off at the start of the assignment for themselves and their families to get settled), tend to adjust more successfully. Global assignees’ personalities can also aid or hinder the adjustment process. For example, one research study found that expatriates who had contact with host country nationals and possessed the personality trait of openness (i.e., enjoy trying new things, working with new concepts and ideas, etc.) were better able to adjust to the new culture. Based on this and similar research findings, selection programs should identify candidates who possess the personality trait of openness to help ensure a successful adjustment to the host culture.

9. Why do some repatriates leave the organization after returning from their global assignment?

A significant percentage of repatriates leave the organization after returning from their global assignment due to one or more of the following: (a) they have difficulty rebuilding their professional networks and/or getting their careers back on track, (b) they miss the autonomy, freedom, and social status they had in the global assignment (they go from being “big fish/little pond” to “little fish/big pond”, (c) they are often placed into meaningless “holding pattern” jobs when they first arrive to the home office until a suitable position opens up, (d) they lose the financial extras they received while on the global assignment and experience financial shock, (e) family problems like spouse reemployment and children social integration often lead to family problems.

10. Would you consider taking a two-year global assignment? Under what conditions would this opportunity be more enticing? Less enticing?

This is a critical thinking and personal choice question; answers will vary by student. There are no right or wrong answers.

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Additional Activities and Projects

1. Employment website evaluation. The purpose of this exercise is to get students to go through the steps of searching for a job, discover the things that make a job search easier, and critique the wording of job ads from the viewpoint of a potential applicant.

(a) Have students select a job and a location in which they would be interested, and then search for the job/location combination through any three of the following employment websites.

www.Monster.com www.StepStone.com (European listings only)www.HotJobs.com www.Careerbuilding.comwww.Dice.com www.FlipDog.comwww.jobs.com www.jobsonline.comwww.nationjob.com www.hotjobs.com

(b) Ask students to answer one or more of the following questions.

(1) Which site was the easiest to use? Why?

(2) On which site did you find the largest number of matching jobs?

(3) Give an example of one of the best- worded job postings you encountered.

(4) Give an example of one of the best worded job postings.

(5) If you were writing a description of the job that you are most interested in, what would it say?

(6) What types of features would you add to the employment site search engines to make it easier to locate the perfect job? Example: A zip code search.

(7) How likely are you to use an employment website to look for a job in the future?

(8) Which job was the most appealing? Why?

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