International HumanResources Management

Chapter 10, Part 2

Training and Development

Cross-cultural training: increases the relational abilities of future expatriates and their spouses and families

Training rigor: extent of effort by both trainees and trainers required to prepare the trainees for expatriate positions

Training and Development (cont.)

Low rigor training – used for short-term assignments Short time period Lectures and videos on local cultures Briefings on company operations

High rigor training – for long-term assignments Longer time period Experiential learning Extensive language training Includes interactions with host country

nationals

Exhibit 10.4: Training Rigor: Techniques and Objectives

Expatriate Performance Appraisal: Challenges

Fit of international operation in multinational strategy

Different business environment Unreliable data Complex and volatile environments Time difference and distance separation Local cultural situation Home country managers may not

understand the local situation

Steps to Improve the Expatriate Performance

Appraisal

1. Fit the evaluation criteria to strategy2. Fine-tune the evaluation criteria to the

situation3. Get evaluations from different people

The Expatriate Manager: Compensation

The balance-sheet approach Provides a compensation package that

gives the expatriate the same standard of living he/she would have at home

Allowances for cost of living, housing, food, recreation, personal care, clothing, education, home furnishing, transportation, and medical care

Exhibit 10.7: Balance Sheet Approach

To Expatriate Compensation

Compensation Details

Base salary: the amount of money that an expatriate would receive for doing the same job in the home country

Used as a basis to establish salary in the host country

Salary may be paid in home country currency, host country currency, or a combination of the two

Compensation Details (2)

Benefits: a substantial portion of expatriate compensation

Is the home country or the host country responsible for the expatriate's social security benefits?

Should home-country benefits programs be available to host-country nationals?

Compensation Details (3)

Allowances Relocation allowance Cost-of-living allowances are paid when the

employee must incur extra costs that he would not pay in the home country

Examples: housing allowance, and the costs of private schools for the employee's children

Hardship allowance: Often paid to employees who work in a country with difficult living conditions

Home-leave allowances: pays the cost of periodic trips home for the employee and family

Compensation Details (4)

Allowances (continued) Foreign service premium

In the past, a foreign-service premium was often a monthly payment that continued as long as the employee worked overseas

Many firms have eliminated the ongoing foreign-service premium.

Today, a one-time, lump sum foreign service premium is often paid at the start of the overseas assignment to provide cash for immediate expenses.

Compensation Details (5)

Taxes An expatriate may be required to pay

income taxes to both the host country and his/her native country

The company compensates the employee for the extra amount of tax

Compensation Details Summary

The cost of an expatriate employee =salary costs

+ benefit costs+ allowance costs (goods and services

+ housing)+ tax costs

Compensation Approaches

The compensation package must be cost-effective and should be seen as fair

Balance-sheet approach: ensure that the expatriate does not lose money from the foreign assignment

Negotiation approach: Negotiate compensation with each employee – may be used with top-level managers

Host-based compensation: Pay the expatriate a salary comparable to local nationals

Compensation Approaches (2)

Lump sum method: give expatriate a pre-determined amount of money. Employee decides how to spend it.

Cafeteria approach: Offer the employee a choice among various compensation options, with a limit on total costs

Compensation Approaches (2)

Regional system: Set up a compensation system for all expatriates who are assigned to a particular region

Global pay systems: worldwide job evaluations, performance appraisal methods, and salary scales are used

Repatriation Problem

Difficulties faced coming back home Three basic cultural problems

—“reverse culture shocks” Adapt to new work environment and

culture of home Expatriates must relearn own national

and organization culture Need to adapt to basic living environment

Strategies for Successful Repatriation

Provide a mentor at the home office to help the expatriate stay in touch during the overseas assignment.

Provide a home-leave policy to encourage expatriates to make regular visits to the home office

Provide a strategic purpose for the repatriation – the foreign experience should help the expatriate's career

Help the expatriate make good use of the foreign assignment.

Provide information and assistance for relocation. Provide training and preparation for the return Provide support for the expatriate and family on return

International Assignments for Women: Two Myths

Myth 1: Women do not wish to take international assignments.

Myth 2: Women will fail in international assignments because of the foreign culture’s prejudices against local women.

Successful women expatriates Foreign not female—emphasize nationality

not gender

International Assignments for Women: Advantages

More visible Strong in relational skills

International Assignments for Women: Disadvantages

Face the glass ceiling Isolation and loneliness Constant proving of themselves, working

harder than male Need to balance work and family

responsibilities Need to worry about accompanying

spouse

More Women in the Future?

Women expatriate managers are expected to grow

Acute shortage of high-quality managers

Increasing number of women provide role models

What Can Companies Do To Ensure Female Expatriate

Success?

Provide mentors and networking opportunities

Remove sources of barriers – educate other employees about the role of women managers

Provide support to cope with dual-career issues