Transcript IHRM PowerPoint Slides for Week 03

INTERNATIONAL HUMAN
RESOURCE MANAGEMENT
Week 3
20 July 2015
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
20 July 2015
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
 Perceived lack of qualified host country nationals (HCNs)
 The necessity to maintain and consolidate good
communication, coordination and control links with the
organization’s headquarters
 The assurance that the foreign subsidiary or unit will
comply with corporate objectives, policies, standards etc.
 PCNs may be most suitable because they have the
requisite skills and experience
 Promising managers are given the opportunity of
international experience
20 July 2015
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
20 July 2015
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
20 July 2015
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
20 July 2015
IHRM (MBA III)
Course Instructor: Dr. Aurangzeb Z. Khan
6
Pros and Cons of the Four International
Staffing Approaches (5a)
Advantages of the Geocentric Approach
 Facilitates the development of an international team
 Overcomes the decentralization effect of the polycentric
approach
20 July 2015
IHRM (MBA III)
Course Instructor: Dr. Aurangzeb Z. Khan
7
Pros and Cons of the Four International
Staffing Approaches (5b)
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
20 July 2015
IHRM (MBA III)
Course Instructor: Dr. Aurangzeb Z. Khan
8
Pros and Cons of the Four International
Staffing Approaches (5c)
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 for 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
20 July 2015
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
20 July 2015
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
20 July 2015
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
20 July 2015
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
20 July 2015
IHRM (MBA III)
Course Instructor: Dr. Aurangzeb Z. Khan
13
The Cost of “Expatriate Failure”
Expatriate failure has two cost components:
 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
 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
20 July 2015
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
20 July 2015
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
20 July 2015
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
20 July 2015
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 in a foreign environment
• Sometimes difficult to determine
20 July 2015
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
20 July 2015
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
20 July 2015
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
20 July 2015
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
20 July 2015
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)
20 July 2015
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)
20 July 2015
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:
 Females are less desirous than males of international
assignments
 Females are less likely to be offered international
assignments
 There are a comparatively smaller number of females with
the requisite skills to be sent on international assignments
 Many repressive cultures discourage the sending of female
expatriates, and
 In many repressive cultures males do not like reporting to
females
20 July 2015
IHRM (MBA III)
Course Instructor: Dr. Aurangzeb Z. Khan
25
Selection Tests
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
20 July 2015
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:
 Self-Orientedness – adaptive concern for selfpreservation, self-enjoyment and mental hygiene
 Perceptual – expertise in accurately understanding the
behavour of host country nationals
 Others-Orientedness – Degree of concern about the host
country nationals and the expoatriate‘s desire to affiliate
with them
 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
20 July 2015
IHRM (MBA III)
Course Instructor: Dr. Aurangzeb Z. Khan
27