Recruiting and Selecting Staff for International Assignments Chapter

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Recruiting and Selecting Staff for International Assignments

Recruiting and Selecting Staff for International Assignments

Chapter Objectives n As international assignments are an important vehicle for staffing, it is

Chapter Objectives n 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.

n n n The myth of the global manager The debate surrounding expatriate failure

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

The global manager Myth 1: There is a universal approach to management. Myth 2:

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.

Current Expatriate Profile Category PCN (42%) Gender Age (Yrs) Marital status Male (82%) 30

Current Expatriate Profile Category PCN (42%) Gender Age (Yrs) Marital status Male (82%) 30 -49 (60%) Married (65%) Female (18%) 20 -29 (17%) Single (26%) Partner (9%) Accompanied by Duration Location Primary reason Prior international experience Spouse (86%) 1 -3 years (52%) Europe (35%) Fill a position 30% Children (59%) Short-term (9%) Asia-Pacific (24%) HCN (16%) TCN (42%) Source: based on data from global Relocation Trends: 2002 Survey Report, GMAC Global Relocation Services, National Foreign Trade Council and SHRM Global Forum, GMAC-GRS 2003.

Expatriate Failure n Definition: Premature return of an expatriate n Under-performance during an international

Expatriate Failure n Definition: Premature return of an expatriate n Under-performance during an international assignment n Retention upon completion

Expatriate Failure Rates Recall Rate Percent US Multinationals 20 - 40% 10 - 20%

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

Reason for Expatriate Failure n US Firms Inability of spouse to adjust Manager’s inability

Reason for Expatriate Failure n US Firms 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 n Japanese Firms Ø Ø Ø 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 European Multinationals: Inability of spouse to adjust.

Costs of Expatriate Failure n Direct costs: Airfares n Associated relocation expenses n Salary

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

Indirect Cost of Expatriate Failure n Damaged relationships with key stakeholders in the foreign

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 Negative effects on expatriate concerned n Family relationships may be affected n Loss of market share

Factors Moderating Expatriate Performance n Inability to adjust to the foreign culture n Length

Factors Moderating Expatriate Performance n Inability to adjust to the foreign culture n Length of assignment n Willingness to move n Work-related factors n Psychological contract/employment relationship

The Employment Relationship n The nature of the employment relationship n Relational: broad, open-ended

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 organization has not fulfilled its obligations

The Dynamics of the Employment Relationship

The Dynamics of the Employment Relationship

Likelihood of Exit

Likelihood of Exit

International Assignments: Factors Moderating Performance

International Assignments: Factors Moderating Performance

The Phases of Cultural Adjustment

The Phases of Cultural Adjustment

The Phases of Adjustment n The U-Curve is not normative n The time period

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

Organizational Commitment n Affective component n Employee’s attachment to, identification with and involvement in,

Organizational Commitment n Affective component n Employee’s attachment to, identification with and involvement in, the organization n Continuance component n Based on assessed costs associated with exiting the organization n Normative component n Employee’s feelings of obligation to remain

Why consider the psychological contract? n Nature, location and duration of an international assignment

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

Selection Criteria n Technical ability n Cross-cultural suitability n Family requirements n Country-cultural requirements

Selection Criteria n Technical ability n Cross-cultural suitability n Family requirements n Country-cultural requirements n MNE requirements n Language

Using Traits and Personality Tests to Predict Expatriate Success n Although some tests may

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 way in different cultures

Factors in Expatriate Selection

Factors in Expatriate Selection

Mendenhall and Oddou’s Model n Self-oriented dimension n Perceptual dimension n Others-oriented dimension n

Mendenhall and Oddou’s Model n Self-oriented dimension n Perceptual dimension n Others-oriented dimension n Cultural-toughness dimension

Harris and Brewster’s Selection Typology Formal Informal Open n Clearly defined criteria n Less

Harris and Brewster’s Selection Typology Formal Informal Open n Clearly defined criteria n Less defined criteria n Clearly defined measures n Less defined measures n Training for selectors n Limited training for selectors n Open advertising of vacancy (internal/external) n Panel discussions n Recommendations n No panel discussions Closed n Clearly defined criteria n Selector’s individual preferences n Clearly defined measures determine selection criteria and measures n No panel discussions n Nominations only (networking/reputation) n Training for selectors n Panel discussions n Nominations only (networking/reputation)

Solutions to the Dual-career Challenge n Alternative assignment arrangements n Short-term n Commuter n

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

Barriers to Females Taking International Assignments External Barrier n HR managers reluctant to Self-established

Barriers to Females Taking International Assignments External Barrier n HR managers reluctant to Self-established Barriers n Some women have limited select female candidates willingness to relocate n Culturally tough locations or n The dual-career couple regions preclude female n Women are often a barrier to expatriates their own careers by behaving n Those selecting expatriates according to gender based have stereotypes in their role models. minds that influence decisions

Equal Employment Opportunity Issues n Cultural Variations n Law and enforcement n Social values

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

Chapter Summary This chapter has addressed key issues affecting recruitment and selection for international

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. )

Chapter Summary (cont. ) n Cultural adjustment and other moderating factors affecting expatriate intent

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. )

Chapter Summary (cont. ) n Dual-career couples as a barrier to staff mobility, and

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. It is clear that, 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.

Chapter Summary It is also apparent that staff selection remains critical. Finding the right

Chapter Summary It is also apparent that 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 chapter that maintaining and retaining productive staff are equally important.

Chapter Summary n Corporate philosophy on recruiting and selection n Selection criteria and issues

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

Chapter Summary (cont. ) ØWill the factors affecting the selection decision be similar for

Chapter Summary (cont. ) ØWill the factors affecting the selection decision be similar for multinationals emerging from countries such as China and India? ØIf more multinationals are to encourage subsidiary staff to consider international assignments as part of an intra-organizational network approach to management, we will need further understanding of how valid the issues discussed in this chapter are for all categories of staff from different country locations. ØAnother area that remains ignored is the selection of nonexpatriates, that is, the international business travelers we discussed in Chapter 3. In our survey of current literature, there is a paucity of recognition of this group. Ø(cont. )

Chapter Summary (cont. ) The various consulting firm surveys conducted into relocation trends in

Chapter Summary (cont. ) The various consulting firm surveys conducted into relocation trends in 2002 that we draw on in this chapter indicate that more multinationals are resorting to replacing traditional assignments with business travel as a way of overcoming staff immobility. Likewise, there is a need for further work into the performance–selection link surrounding non-standard assignments, including commuter and virtual assignments.