Chapter 5 Recruiting and Selecting Staff for International

Chapter 5 Recruiting and Selecting Staff for International Assignments IBUS 618 Dr. Yang 1

Chapter Objectives n In Part I, we demonstrated how people play a central role in sustaining international operations. As international assignments are an important vehicle for staffing, it is critical that they are managed effectively, and the expatriates are supported so that performance outcomes are achieved. IBUS 618 Dr. Yang 2

Chapter Objectives (cont. ) n The focus of this chapter is on recruitment and selection activities in an international context. We will address the following issues: n n n The myth of the global manager The debate surrounding expatriate failure Factors moderating intent to stay or leave the international assignment Selection criteria for international assignments Dual-career couples Gender issues for international assignments IBUS 618 Dr. Yang 3

The global manager Myth 1: There is a universal approach to management. Myth 2: People can acquire multicultural adaptability and behaviors. Myth 3: There are common characteristics shared by successful international managers. Myth 4: There are no impediments to mobility. IBUS 618 Dr. Yang 4

Table 5 -1 Current expatriate profile Source: based on data from Global Relocation Trends: 2005 Survey Report, GMAC Global Relocation Services, National Foreign Trade Council and SHRM Global Forum, GMAC-GRS 2006, GMAC GRS. IBUS 618 Dr. Yang 5 5

Marital Status n 53% Married male n 8% Married female n 7% Male with significant other n 4% Female with significant other n 18% Single male n 10% Single female IBUS 618 Dr. Yang 6

Expatriate Failure n Definition: Premature return of an expatriate n Under-performance during an international assignment n Retention problem upon completion IBUS 618 Dr. Yang 7

Expatriate Failure Rates Recall Rate Percent of Companies US Multinationals 20 - 40% 10 - 20% < 10% 7% 69% 24% European Multinationals 11 - 15% 3% 6 - 10% < 5% 38% 59% Japanese Multinationals 11 - 19% 6 – 10% <5 IBUS 618 Dr. Yang 14% 10% 76% 8

Reason for Expatriate Failure n US Firms n n n Japanese Firms Inability to cope with larger overseas responsibilities Difficulties with the new environment Personal or emotional problems Lack of technical competence Inability of spouse to adjust Manager’s inability to adjust Other family problems Manager’s personal or emotional immaturity Inability to cope with larger overseas responsibilities European Multinationals: Inability of spouse to adjust. IBUS 618 Dr. Yang 9

Reasons for Early Return IBUS 618 Dr. Yang 10

Direct Costs of Expatriate Failure n Direct costs: n n Airfares Associated relocation expenses Salary and benefits Training and development n Costs vary according to: n n Level of position Country of destination Exchange rates Whether a ‘failed’ manager is replaced by another expatriate n Averaged $250, 000 per early return IBUS 618 Dr. Yang 11

Indirect Cost of Expatriate Failure n Damaged relationships with key stakeholders in the foreign location n Negative effects on local staff n Poor labor relations n Loss of market share n Negative effects on expatriate concerned n Family relationships may be affected IBUS 618 Dr. Yang 12

Figure 5 -1 International assignments: factors moderating performance IHRM Chapter 5 IBUS 618 Dr. Yang 13 13

Why consider the psychological contract? n Nature, location and duration of an international assignment may provoke intense, individual reactions to perceived violations n Expatriates tend to have broad, elaborate, employment relationships with greater emphasis on relational nature n Expectations and promises underpin this relationship IBUS 618 Dr. Yang 14

The Employment Relationship n The nature of the employment relationship n Relational: broad, open-ended and long-term obligations n Transactional: specific short-term monetized obligations n The condition of the relationship n Intact: when employee considers there has been fair treatment, reciprocal trust n Violated: provoked by belief that the organization has not fulfilled its obligations IBUS 618 Dr. Yang 15

Likelihood of Exit IBUS 618 Dr. Yang 16

Figure 5 -2 The phases of cultural adjustment IHRM Chapter 5 IBUS 618 Dr. Yang 17 17

The Phases of Adjustment n The U-Curve is not normative n The time period involved varies between individuals n The U-Curve does not explain how and why people move through the various phases n It may be more cyclical than a U-Curve n Needs to consider repatriation IBUS 618 Dr. Yang 18

Figure 5 -3 Factors in expatriate selection IHRM Chapter 5 IBUS 618 Dr. Yang 19 19

Using Traits and Personality Tests to Predict Expatriate Success n Although some tests may be useful in suggesting potential problems, there may be little correlation between test scores and performance n Most of the tests have been devised in the United States, thus culture-bound n In some countries, there is controversy about the use of psychological tests ( different pattern of usage across countries) n Use of personality traits to predict intercultural competence is complicated by the fact that personality traits are not defined and evaluated in similar ways in different cultures IBUS 618 Dr. Yang 20

Mendenhall and Oddou’s Model n Self-oriented dimension n Perceptual dimension n Others-oriented dimension n Cultural-toughness dimension IBUS 618 Dr. Yang 21

Table 5 -2 Harris and Brewster’s selection typology IBUS 618 Dr. Yang 22 22

Solutions to the Dual-career Challenge n Alternative assignment arrangements n Short-term n Commuter n Other (e. g. unaccompanied, business travel, virtual assignments) n Family-friendly policies n Inter-company networking n Job-hunting assistance n Intra-company employment n On-assignment career support IBUS 618 Dr. Yang 23

Table 5 -3 Barriers to females taking international assignments IBUS 618 Dr. Yang 24 24

Equal Employment Opportunity Issues n Cultural Variations n Law and enforcement n Social values n Corporate practices n The United States n EEOA within the country n International approach IBUS 618 Dr. Yang 25

Chapter Summary This chapter has addressed key issues affecting recruitment and selection for international assignments. We have covered: n Four myths related to the concept of a global manager n The debate surrounding the definition and magnitude of expatriate failure. (cont. ) IBUS 618 Dr. Yang 26

Chapter Summary (cont. ) n Cultural adjustment and other moderating factors affecting expatriate intent to stay and performance. n Individual and situational factors to be considered in the selection decision. n Evaluation of the common criteria used revealed the difficulty of selecting the right candidate for an international assignment and the importance of including family considerations in the selection process. (cont. ) IBUS 618 Dr. Yang 27

Chapter Summary (cont. ) n Dual-career couples as a barrier to staff mobility, and the techniques that multinationals are utilizing to overcome this constraint. n Female expatriates and whether they face different issues to their male counterparts. While our appreciation of the issues surrounding expatriate recruitment and selection has deepened in the past 20 years, much remains to be explored. The field is dominated by US research into predominantly US samples of expatriates, although there has been an upsurge in interest from European academics and practitioners. IBUS 618 Dr. Yang 28

Chapter Summary Staff selection remains critical. Finding the right people to fill positions, particularly key managers – whether PCN, TCN or HCN – can determine international expansion. However, effective recruitment and selection are only the first step. We will explore in the next chapters that maintaining and retaining productive staff are equally important. IBUS 618 Dr. Yang 29

Chapter Summary n Corporate philosophy on recruiting and selection n Selection criteria and issues of concern n Local and home countries’ policies on foreign labor n Variations in national labor law and labor markets n Inter-company networking n Intra-company arrangement n Career assistance programs n Training and continuous adaptation IBUS 618 Dr. Yang 30

Discussion Questions 1. What is the difference between a global manager and a global mindset? 2. Should multinationals be concerned about expatriate failure? If so, why? 3. What are the most important factors involved in the selection decision? 4. Are female expatriates different? 5. Discuss the proposition that most expatriate selection decisions are made informally, as suggested by the ‘coffee-machine’ solution. IHRM Chapter 5 IBUS 618 Dr. Yang 31 31