INTERNATIONAL HUMAN RESOURCE MANAGEMENT Week 3 9182020 IHRM

INTERNATIONAL HUMAN RESOURCE MANAGEMENT Week 3 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 1

International Recruitment and Selection Recruitment – Defined as searching for and obtaining potential job candidates in sufficient numbers for and quality so that the organization can select the most appropriate persons for its job needs Selection – Defined as the process of gathering information for the purposes of evaluating and deciding whom should be employed in particular jobs 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 2

Pros and Cons of the Four International Staffing Approaches (1) Advantages of the Ethnocentric Approach Ø Perceived lack of qualified host country nationals (HCNs) Ø The necessity to maintain and consolidate good communication, coordination and control links with the organization’s headquarters Ø The assurance that the foreign subsidiary or unit will comply with corporate objectives, policies, standards etc. Ø PCNs may be most suitable because they have the requisite skills and experience Ø Promising managers are given the opportunity of international experience 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 3

Pros and Cons of the Four International Staffing Approaches (2) Disadvantages of the Ethnocentric Approach • It limits the promotional opportunities of HCNs • PCN expatriate managers may experience adjustment problems • PCN expatriate managers may attempt to impose styles which are appropriate at the organization’s headquarters but which may be deemed inappropriate in the host country • The compensation packages of PCN expatriate managers may be at a level considered unjustified by the HCNs • PCN expatriate managers are expensive 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 4

Pros and Cons of the Four International Staffing Approaches (3) Advantages of the Polycentric Approach • It eliminates language barriers, avoids adjustment problems of expatriate managers and their families, and removes the need for expensive cultural awareness training programmes • Hiring costs are reduced • No work permit required • Motivation effect because HCNs see a career potential • Lower organizational profile in sensitive political situations • Continuity of management improves because the HCNs stay longer in the organization • Local responsiveness and sensitivity, host government policy 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 5

Pros and Cons of the Four International Staffing Approaches (4) Disadvantages of the Polycentric Approach • More difficulty in bridging the gap (objectives, policies, standards, communication, coordination, control, culture and attitudes etc. ) between the HCN unit and the organization’s parent headquarters • Tends to encourage too much decentralization • HCN managers have limited career opportunities outside the subsidiary or unit • Limits opportunities for PCN expatriate managers to gain foreign experience, adversely effecting their insight and hence strategic decision-making and resource allocation 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 6

Pros and Cons of the Four International Staffing Approaches (5 a) Advantages of the Geocentric Approach Ø Facilitates the development of an international team Ø Overcomes the decentralization effect of the polycentric approach 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 7

Pros and Cons of the Four International Staffing Approaches (5 b) For the geocentric approach to be successful, 5 assumptions must be met: (1) Highly competent employees are available at headquarters and subsidiaries (2) International experience is a condition for success in top positions (3) Managers with high potential and ambition for promotion are constantly ready to be transferred from one country to another (4) Open disposition and high adaptability on the part of competent and mobile managers to different assignment conditions (5) Open disposition and high adaptability can be learned with more foreign experience 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 8

Pros and Cons of the Four International Staffing Approaches (5 c) Disadvantages of the Geocentric Approach • Immigration controls and work permits for the foreign manager and his family • Provision of extensive, time-consuming (and sometimes) expensive information and documentation foreign nationals • Large numbers of PCNs, HCNs and TCNs must be sent to foreign locations in order to create a successful geocentric staffing policy • High Training and relocation cost • Devising an appropriate compensation structure • More centralized control over staffing and loss of autonomy by the subsidiary in HRM issues 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 9

Pros and Cons of the Four International Staffing Approaches (6) Advantages of the Regiocentric Approach • It allows interaction between managers of an organization’s subsidiaries transferred to their organization’s regional headquarters, and managers from the organization’s headquarters posted to the regional headquarters • More sensitivity to local conditions as subsidiaries are staffed mostly by HCNs • TCNs from the region may be better informed about the host country environment than PCNs • Lower salary and benefit requirements for TCNs • Paves the way for adoption of a geocentric approach 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 10

Pros and Cons of the Four International Staffing Approaches (6) Disadvantages of the Regiocentric Approach • It can prevent the organization from taking a global stance • Improves career opportunities at the regional, but not international level • Factors such as political animosity between regional countries and work permit requirements must be taken into consideration 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 11

Selecting Staff for International Assignments Selecting staff for international assignments is a complex undertaking for several reasons, including: • Identifying a suitable person for the assignment • Predicting his or her performance in a new, culturally potentially very different environment • Dealing with personal and family-related issues and problems • Devising an appropriate compensation package • Complying with host country regulations 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 12

The Problem of “Expatriate Failure” Expatriate failure means the premature return of an expatriate manager before the completion of his or her international assignment due to the person’s failure to attain the expected performance levels and due to the persons continuing inability to adjust to the new work and cultural environment in the host country 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 13

The Cost of “Expatriate Failure” Expatriate failure has two cost components: q Direct Costs – Can be easily measured in monetary terms (e. g. : air fare, relocation expenses, salary and training) and varies according to the level of the position in question, the country of destination, the exchange rates and whether a new PCN takes over the assignment of the “failed” colleague q Indirect Costs – Cannot be measured easily in monetary terms but may be significantly higher than the direct costs. Examples include loss of the organization’s reputation and market share, loss of morale and productivity in the local work force, complications with the host government, discreditation of the expatriate at the organization’s headquarters and a future performance impact 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 14

The Reasons for “Expatriate Failure” Lack of technical competence Personal or emotional problems Difficulties with the new environment Manager’s Personal or Emotional Maturity Inability to Cope With Larger International Responsibility Spouse’s Inability to Adjust Manager’s Inability to Adjust Other Family Reasons 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 15

Criteria for Selecting Staff for International Assignments Cross-Cultural Suitability Technical Ability Family Requirements SELECTION DECISION Country-Cultural Requirements Organization-Specific Requirements Language 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 16

The Staff Selection Criteria (Technical Ability) • Technical and managerial competencies of the person to perform the required tasks • Research studies indicate that technical ability are the most important selection criteria for organizations • Usually easy to evaluate on the basis of past performance 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 17

The Staff Selection Criteria (Cross-Cultural Suitability) • Certain individual traits and characteristics can have an impact on the success or failure of an international assignment – cultural empathy, adaptability, diplomacy, language ability, positive attitude, emotional stability, and maturity • Ability to implement technical and managerial skills and feel reasonably comfortable in a foreign environment • Sometimes difficult to determine 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 18

The Staff Selection Criteria (Family Requirements) • Spouse may not adjust to a foreign environment • Adjustment level of spouse depends on several factors, such as the adjustment of the expatriate and the spouse’s own opinion of the international assignment • A higher level of organizational support in the early stages of expatriation usually correlates with a higher level of adjustment by the spouse 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 19

The Staff Selection Criteria (Country-Cultural Requirements) • “Hardship Postings” (Remoteness of job location, social upheavals, safety risks, very low standard of living and lack of recreational opportunities etc. ) • Pressure of living in repressive cultures and countries (e. g. China, Saudi Arabia and other totalitarian Islamic states in the Middle East) • Denial of work permits to female expatriates 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 20

The Staff Selection Criteria (Organization-Specific Requirements) Situational Factors influence staff selection. Examples: • Organization’s staffing approach may require sending more expatriates to work in certain regions and locations than otherwise • Partner organizations may be involved in the selection of expatriate staff, for example, on international joint ventures • Certain specific skills, for example, training, may be used as a selection criteria 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 21

The Staff Selection Criteria (Language) • Important situational factor. Knowledge of the host country’s language is considered critical for many seniorlevel positions along with the ability to communicate effectively • Knowledge of the host country’s language helps expatriates and their families feel more comfortable in the new environment 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 22

The Staff Selection Criteria (Other Considerations 1) Time – Unexpected international vacancies may arise for which positions have to be quickly filled by expatriates and which may preclude the use of screening tests Family - A potential expatriate may refuse the international assignment due to family considerations (children’s welfare and education, parental care, single parents) 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 23

The Staff Selection Criteria (Other Considerations 2) Dual-Career Couples – Research studies undertaken reveal that many potential expatriates are reluctant or unwilling to take on international assignments because of the career implications for their spouses, e. g. loss of jobs and career opportunities, difficulty in finding new employment in the expatriate’s host country Some companies are now offering assistance programmes for the benefit of their expatriates’ spouses (employment hunting, networking, intra-company employment, commuter marriages and on-assignment career support) 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 24

The Staff Selection Criteria (Other Considerations 3) Female Managers – Studies reveal that female expatriates make up a very small proportion (< 10% percent) of the total expatriate population. Possible reasons are: Ø Females are less desirous than males of international assignments Ø Females are less likely to be offered international assignments Ø There a comparatively smaller number of females with the requisite skills to be sent on international assignments Ø Many repressive cultures discourage the sending of female expatriates, and Ø In many repressive cultures males do not like reporting to females 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 25

Selection Tests entails the use of certain personal and other related criteria with a view to determining whether a person is suitable or not for an international expatriate assignment Problems with such tests relate to their: • Reliability • Culture-boundedness 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 26

Alternative Model of Expatriate Selection Mendenhall and Oddou propose a four-dimensional approach linking specific behavoioural tendencies to probable international performance: Ø Self-Orientedness – adaptive concern for selfpreservation, self-enjoyment and mental hygiene Ø Perceptual – expertise in accurately understanding the behavour of host country nationals Ø Others-Orientedness – Degree of concern about the host country nationals and the expoatriate‘s desire to affiliate with them Ø Cultural Toughness – Difference between the expatriate‘s country and the host country‘s cultural, social, political, economic etc. environment and ist implication for the expatriate 9/18/2020 IHRM (MBA III) Course Instructor: Dr. Aurangzeb Z. Khan 27