Chapter 9 Steering Global Mobility Global Mobility at

Chapter 9 Steering Global Mobility

Global Mobility at Schlumberger • People and technology are their two strategic drivers Ø Equal treatment of people regardless of passport or position • Employees expected to be “international mobile” Ø No guarantee of return home, but good incentive packages • Many high performers spend time in HR They develop talent from anywhere in the world 9 -2

Why Mobility Matters Moving employees across national boundaries: • Reinforces global integration • Advances localization • Enhances the quality of horizontal coordination • Builds global social architecture • Gets the right people in the right place • Develops the competencies of global leaders • Provides challenging growth jobs 9 -3

Changing Composition of International Staff Old stereotypes of “expatriate” staff are increasingly invalid PCN – Parent country nationals Factors influencing TCN employment: HCN – Host country nationals TCN – Third-country nationals • Scarcity of candidates in home country • Global talent management • Expatriate cost reduction (e. g. tax) Women make up 20 -25% of expatriates Hesitancy of company to choose women comes from: • Accommodating dual careers • Gender prejudice in the country in question • Misunderstanding of what contributes to success in an international assignment 9 -4

Female Expatriates Three common assumptions about female expatriates • Women do not want to become international managers • Companies refuse to send women overseas • The prejudice of locals against women may render them ineffective What the research says? • No gender differences in willingness to work overseas • No difference in effectiveness • Still some resistance to selecting female expatriates Factors helping women to be effective expatriates • Communication and relational skills • Relative visibility enhances local access • Experience with being an “outsider” helps to manage stress 9 -5

Mobility Management Cycle 9 -6

Selecting Expatriates Characteristics of successful expatriates: Ø Ø Ø • Relationship and communication abilities Professional and technical competence Cultural sensitivity and flexibility Self-efficacy and tolerance for ambiguity Family support The relevance of each characteristic depends on the role Enhancing the selection quality: • Should be more than an informal, “coffee machine” process • Enlarge the candidate pool past the home country • Later steps in the mobility cycle must be considered early 9 -7

Assessment and Family Many assessment tools are available, few are widely used Ø Interviews: • Most commonly used selection method • Should be used to help candidate get feedback and consider all factors Ø Orientation visits can eliminate costly issues and surprises Family attitudes, children, and dual careers affect willingness to accept international assignments • Consider family situation, and involve spouse in decisions • Help dual-career families with career transitions and job finding 9 -8

Preparing for the Assignment What kind of training? • • • Cross-cultural training that does not reinforce stereotypes Visits, shadowing, books, videos, open dialogue, etc. Training should be tailored to location origin, destination and family When should training take place? • • Real-time coaching is best but expensive Expatriates with host-country mentors adjust better to work and culture Is language competence essential? • • Not always, but it helps develop connections The effort to learn the language shows respect for the culture What about the family? • • Attention and preparation for the spouse is crucial Spouse often has more exposure to local culture and language 9 -9

Adjusting to the Expatriate Role Adjustment to work - Unclear job, conflict, little discretion • Lessened by global integration • Eased by overlap with outgoing jobholder General adjustment - Housing, food, safety, education, health, etc. • Difficulty increases with cultural distance • Education and housing allowance and good preparation are helpful Interaction adjustment - Behavior and communication differences • Good support network in host country can lessen frustration Family adjustment is important to keep in mind The individual’s attitude and willingness to adjust is most important 9 -10

Adjusting to the Expatriate Role Satisfaction & work performance 0 3 6 9 12 15 18 Months Stages in the Adjustment Process • • Honeymoon Culture shock: depression, anger, frustration – first step to learning Adjustment Mastery 9 -11

The Dual Allegiance of Expatriates Low Expatriates who see themselves as FREE AGENTS Expatriates who leave their HEARTS AT HOME Expatriates who “GO NATIVE” Expatriates who see themselves as DUAL CITIZENS Allegiance to local firm High Low Allegiance to parent firm High Source: Adapted from S. Black, H. Gregersen, and M. Mendenhall, Global Assignments: Successfully Expatriating and Repatriating International Managers, San Francisco: Jossey-Bass, 1992. 9 -12

Appraising Performance and International Staff What criteria and standards should be used? • Defining performance in relation to subsidiary’s environmental factors • Subjective and contextual performance criteria must be used • Is their focus short-term or long-term success of the subsidiary? Who should conduct the performance evaluation? • Home country HR and executives can’t see expatriates at work • Evaluation is best done partly by headquarters, partly by local subsidiary Does one system fit all? • Evaluation criteria should reflect the purpose of the assignment • Performance objectives should be differentiated to reflect the job 9 -13

International Compensation Cost of expatriation is of concern for many businesses Compensation strategies have evolved from negotiation Things to consider: • Cost efficiency Delivering the intended benefits in the most cost-effective way • Equity issues Ensuring an equitable plan regardless of the location or nationality of the expat • Ease of system maintenance Ensuring the plan is relatively transparent and easy to administer 9 -14

International Compensation Systems 9 -15

Figure 9 2: Balance Sheet Approach to International Compensation Home- and assignmentlocation income taxes Income taxes Housing Goods and services Income taxes Premiums and incentives Housing Goods and services Income taxes Housing Goods and services Reserve Home-country salary Assignmentlocation costs paid by company and from salary Home-country equivalent purchasing power Additional costs paid by the organization Source: Adapted from C. Reynolds, Guide to Global Compensation and Benefits (San Diego: Harcourt, 2001). 9 -16

Balance Sheet Approach Used widely in North American and European firms Goal to maintain standard of living while abroad Employees are compensated the difference in living cost Complex to implement when home countries differ Encourages importation of lifestyle Creates differences between expatriates and locals Difficult to establish connections between results and rewards 9 -17

Alternatives to Balance Sheet Approach • Balance sheet relies on norms tailored to “average” expat • Expatriates are becoming increasingly less homogenous • Cafeteria approach Ø • expats pick which benefits are most important to them Lump-sum payments best for short-term assignments Region-specific compensation creates “regional” and “global” differences 9 -18

Trends and Challenges in International Compensation should mirror needs of each expat category • What categories of international staff should the company have? • Should all categories of expatriates be paid using the same method? Nonfinancial rewards can help motivate international moves TCN payment has no single best formula • TCNs often do not return to their home country • Avoid compensation that treats TCNs as “cheap labor” Keep in mind pay differences between expats and locals Job content compensation eliminates most payment equity issues 9 -19

Repatriation and Reentry • Advance planning to provide real opportunities upon reentry • Transition support and continuous mentoring • It is not realistic to expect that mobility guarantees promotion • Expats with good performance record AND visibility find better jobs upon return • Expats must build and keep good social capital with headquarters Caution: There is often no comparable job waiting for TCNs back home 9 -20

HR Practices that Support Mobility 9 -21

Tensions in the Mobility Cycle Cost/Investment tension • Cost-driven strategy may lead to “boom-bust” cycles Home/Host tensions • Some expatriates show lack of sensitivity to local context Global/Local tensions • Expatriation may limit career opportunities for local managers Short-term/Long-term tensions • Too much emphasis on short-term solutions Demand/Supply tension • Increasing constraints on international mobility • Reflects family and career considerations 9 -22

Evolution and Alternatives to Traditional International Mobility Learning-driven assignments are increasing… but best learning comes from accountability for outcomes Alternatives: • Increase in inpatriation • Increase in short-term assignments Ø Reduces cost and increases opportunities for learning • Replace expatriation with new approaches to international staffing 9 -23

Inpatriation • Inpatriation to the head office socializes local managers • Most inpatriates assigned for learning purposes Large variety of reasons behind inpatriate assignments Ø Important to provide “real” jobs Ø • • • Standard compensation does not work; inpatriates are diverse Cross-cultural training might be required for local employees Local subsidiaries are not excited to send off their best Ø Candidate selection monitoring is important 9 -24

Short-Term Assignments • Offer flexibility – simpler to plan and execute • Cost less • Eliminate repatriation challenge • Beneficial if there is reciprocity – talent swap Two comparable employees swap jobs for less than a year Ø Language barriers Ø Danger of “corporate tourism” Ø 9 -25

Global Coordination Without Expatriates • Long employment contracts; no guarantee of a job at home Self-Initiated Expatriates • Higher compensation, desirable location, better opportunities Permanent Transfers • Localization of expatriates who don’t want to come home • Localization might cost less, but could cause local “glass ceiling” International Commuter • Rotational assignments – employees rotate internally for short periods of time Virtual Expatriation • Responsibility for some overseas operations • Cannot replace face-to-face visits • Constant travel poses health threats 9 -26

Global Mobility – Mainstream and Less Secure Expatriates are no longer guaranteed a job upon return Two conflicting signals are being sent: • International experience is an asset and often a necessity • International mobility can carry risks for future career Perception of insecurity can lead to skepticism Not everyone is ready for a boundaryless career Diverse group of senior executives with international experience sets the best example 9 -27