Chapter 17 International HRM IHRM For use with

Chapter 17 International HRM (IHRM) For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Chapter outcomes • 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 For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Chapter outcomes (continued) • Identify the unique training needs for international assignees • Reconcile the difficulties of home country and hostcountry 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 For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Definition • IHRM - For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

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 For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Why do companies decide to do business abroad? For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Organisational firms used internationally • • • Exporting Licensing Management contracts Sole ownership Types: For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

What types of cultures are found around the world? • What is culture? • Identifying international cultures For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

What impact does going abroad have on the activities of HR professionals? • • • More functions More involvement in employees’ personal lives Change in emphasis as the ________ varies More ______ influences For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Environmental forces National forces Economic forces ______ HR systems Corporate culture Policies/procedures Recruitment ______ Training Motivation/reward systems _________ Career paths Corporate culture Legal forces For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning _____

Recruitment • • • Expatriates Ethnocentric approach – Polycentric approach – Regiocentric approach – Geocentric approach – Inpatriate For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

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 For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

International assignments • Length and duration: – Short-term – – Extended – – Long-term – • Types: For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Selection • 4 different types of employees are normally appointed to overseas positions: For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

SELECTION (CONTINUED) Factors to be considered when selecting candidates for overseas appointments: • • • 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 For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

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 For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

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 For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Training & Development (continued) • Techniques are categorised into 5 groups: – – – Field experiences For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

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 For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

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 For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

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 For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Retention of personnel • Compensation • Repatriation For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Typical expatriate compensation components For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Six approaches followed to compensate expatriates • Negotiation • Balance sheet approach – • Localisation • Lump sum • • For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

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 For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Expatriate adjustment stages For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Labour relations • Approaches to follow: – Hands-off – – – Strategic planning – – Managed totally from headquarters – Interface of headquarters, international human – resource and line management in the field For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Discipline & dismissals • Are they the same in all countries? • Compensation • Companies should be well acquainted with the legal implications of international staff For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Transfers, lay-offs and retirement • Movement of people as part of development • Cultural differences and language • Legal implications For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

Health, safety & security issues • • For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

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 longterm orientation. For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

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. For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning

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. For use with Human Resource Management in South Africa 4 e by Grobler, Wärnich et al ISBN: 1408019515 © 2010 Cengage Learning