4. IHRM Flashcards
What Is A Staffing Policy?
Staffing policy is concerned with the selection of employees who have the skills required to perform a particular job
Why can staffing policy be a tool?
- For developing an promoting the firm’s
corporate culture - The organisation’s norms and value system
- A strong corporate culture can help the firm implement its strategy
What are the three main approaches to staffing policy?
Ethnocentric
Polycentric
Geocentric
What is the ethnocentric approach?
Fill key management positions with parent-country nationals
What is the polycentric approach?
Recruit host country nationals to manage subsidiaries in their own country, and parent country nationals for positions at headquarters
What is the geocentric approach?
Seek the best people, regardless of nationality for key jobs
Why do firms choose and ethnocentric staffing policy? Believe that
- Lack of qualified individuals in the host country to fill senior management positions
- Unified corporate culture
- Value can be created by transferring core competencies to a foreign operation via parent country nationals
• It makes sense with an international strategy
Cons of ethnocentric staffing policy?
- Limits advancement opportunities for host country nationals- resentment
- Can lead to “cultural myopia“ – the firm’s failure to understand host country cultural differences that require different approaches to marketing and management.
Why do firms choose and polycentric staffing policy?
- Makes sense for firms pursuing a localisation strategy
- Can minimise cultural myopia
- May be less expensive to implement than an ethnocentric policy
Cons of polycentric staffing policy?
- Host country nationals have limited opportunities to gain experience outside their own country and so cannot progress beyond senior positions in their own subsidiaries
- Gap can form between host country managers and parent country managers
Why do firms choose and geocentric staffing policy?
- Consistent with building a strong unifying culture and informal management network
- Makes sense for firms pursuing a global or transnational strategy
- Enables the firm to make the best use of its human resources
- Builds a cadre of international executives who feel at home working in a number of different cultures
Cons of geocentric staffing policy?
- Can be limited by immigration laws
- Costly to implement
Staffing approach and strategy appropriateness?
Ethnocentric- International
Polycentric- Localisation
Geocentric- Global standardisation and transnational
What is an expatriate manager?
A citizen of one country who is working abroad in one of the firm’s subsidiary.
3 types of challenges of living and working abroad globally?
Personal considerations
Family considerations
Career considerations
What are personal considerations for working abroad?
- Motivation for a foreign assignment
- Physical and emotional health
- Maturity and relational abilities
- Language capabilities
What are family considerations for working abroad?
- Spouse expectations and employment
- Family adaptation to local environment
- Local educational opportunities
- Quality of family life in new location
What are career considerations for working abroad?
- Basis of performance evaluation in new assignment, often must hit the ground running
- Maintaining links to home company
- Capitalising on foreign experiences
- Opportunities to return to home company or other employment opportunities
What is culture shock?
- When in a foreign environment, people frequently cannot use their past experiences to interpret and respond to cues, and their behavior may not produce the expected results, causing heightened anxiety and frustration.
Symptoms of culture shock?
- Seemingly minor things can cause confusion and a feeling of loss of control.
- State of internal disequilibrium created by the realities imposed by the new culture and the expectations based on the old.
- This disequilibrium often forces them to question their behavioral habits and can lead to emotional feelings of anxiety, stress, and confusion.
Oberg’s stages of adjustment?
Honeymoon Crisis Recovery Full immersion Extended: - Crisis at home - Recovery - Immersion back home
Culture shock is not a disease;
It signifies that an individual is trying to come to terms with his or her new environment – a good starting point for psychological adjustment.
How to manage it (not avoid)
Challenges of culture shock?
- Mind and body trying to come to terms with new environment
- Symptoms can include; frustration, anxiety, disappointment, depression and insomnia
Buffering effects on culture shock?
Strategies for coping
- Learn about local environment
- Learn local language
- Know yourself
- Explore local surroundings
- Use local translators
- Remember why you are there
Improved work and well-being
Improved psychological and at times physiological adjustment to new environment
5 Influences on acculturation success?
Cultural knowledge Cultural distance Intergroup attitudes Multicultural competence Individual roles
What is cultural knowledge?
Understand norms, rules, and expectations
What is cultural distance?
Similarity between home and local culture
What is intergroup attitudes?
Positive attitudes of local culture
What is multicultural competence?
Capacity to work successfully across cultures
What is individual roles?
Job duties and responsibilities, including access to local people
5 Challenges facing employers (Black and Gregersen 1999)
- Cost
- Employee performance
- Assignment failure
- Repatriation
- Employee retention
What staffing strategies will have expatriate managers?
Ethnocentric
Geocentric
How many firms did Black and Gregersen study? (1999)
Expat management practices of 750 European, American and Japanese firms.
What are the cost challenges facing employers?
- Expats cost 2-3 x more than non-expat
- Costs from $300,000-$1m per annum
- 2nd most expensive employees after CEO
What are the employee performance challenges facing employers?
- Decline in employee performance
- 1/3 expats fail to meet performance targets
- Period seen as extended holiday
What are the assignment failure challenges facing employers?
- 20% expect workers return home early
- Jobb dissatisfaction or difficulties adjusting
- Inability of spouse to adapt/family
- Inability to cope with larger overseas responsibilities
What are the repatriation challenges facing employers?
- 2/3 companies do not have repatriation programmes
- 60% former expats lack chance to utilise experiences
What is repatriation?
Return to home country
What are the employee retention challenges facing employers?
- 25% repatriate workers leave company within 1 year
- Double the turnover rate of non-expat managers
Best practices for managing expatriates? (Black and Gregersen, 1999)
- Right people
- Right reasons
- Prepare them
- Provide support for transition and adjustment
- Provide support for family
- Devise repatriation programmes
Features of successful expats?
- Cultural curiosity /cultural intelligence
- Knowledge of cultures
- Patience
- Interpersonal skills
- Sense of humour
- Linguistic ability
Features of unsuccessful expats?
- Only excellent technical skills
- No/low cultural awarenes
Wrong reasons to send people?
- To reward favoured employees
- To get mediocre employees out of the way
- To solve short-term business problems
Right reasons to send people?
- To generate knowledge for an organisation
Example of right reason to send people?
Nokia R&D
• No central R&D organisation
• Instead: operates 30 R&D centres in 10 countries
• Engineers selected to work in teams abroad
• Assignments typically last 2 – 3 years
How to prepare staff fro expat assignments?
- Training focus upon preparing the manager for a specific job
- Management development is concerned with
developing the skills of the manager over time - Gives the manager a skill set and reinforces organisational culture
Why is training important for Expatriate
Managers?
Can reduce expatriate failure
3 types of training for expat managers?
Cultural
Language
Practical
Why cultural training?
Fosters an appreciation for the host country’s culture
Why language training?
An exclusive reliance on English diminishes an expatriate’s ability to interact with host country nationals
Why practical training?
Helps the expatriate and family ease themselves into day-to-day life in the host country
Training stats prior to expat departure?
Only about 30% of managers sent on one- to five-year expatriate assignments received training before their departure
Management development programs increase the
overall skill levels of managers through what?
- Ongoing management education
- Rotations of managers through jobs within the firm to give them varied experiences
Management development can be a strategic tool to
- Build a strong unifying culture and informal management network
- Support both transnational and global strategy
How to provide support for transition/adjustment?
- Provide overlap with returning manager
- Develop support network for expatriates at HQ
- Dedicated contact person in HR department
- Regular contact with repatriated employees
How to provide support for family members?
- Include family in pre-departure training
- Help spouses find employment
- Help family members learn new language
Frustrations of returning employees?
- Temporary assignments
- Demotion
- No opportunities to apply foreign experience
- Lack of recognition for overseas assignment
Features of successful repatriation programmes?
- Planning next assignments for returning expats
* Preparation for changes in personal/professional landscapes
How Should Expatriates Be Evaluated?
- Both host nation managers and home office managers evaluate the performance of expatriate managers
• Home country managers tend to rely on hard data when evaluating expatriates
• Host country managers can be biased towards their own frame of reference
How Can Performance Appraisal Bias Be Reduced?
- More weight should be given to an on-site manager’s appraisal than to an off-site manager’s appraisal
- A former expatriate who has served in the same location should be involved in the process
- Home office managers should be consulted before an on-site manager completes a formal termination evaluation
The Key Issues In Compensating Expatriates
- How to adjust compensation to reflect differences in economic circumstances and compensation practices
- How to pay expatriate managers
How Should National Differences In Compensation Be Treated?
- Currently, there are substantial differences in executive compensation across countries
- Research shows
- a top U.S. executive made an average of $525,923 in the 2005-2006 period, compared to $278,697 in Japan, and $158,146 in Taiwan
Should pay be equalized across countries?
• Many firms have recently moved toward a compensation structure that is based on global standards
- Especially important in firms with a geocentric staffing policy
• But, most firms still set pay according to the prevailing standards in each country
What approach do most firms take to pay expats?
Balance sheet approach
What does the balance sheet approach do?
- Equalizes purchasing power across countries so employees have the same living standard in their foreign posting as at home
- Adds a financial incentive to take the position
5 components of a expat compensation package?
- Base salary
- Foreign service premium
- Various allowances
- Tax differentials
- Benefits
- Base salary
Normally in the same range as the base salary for a similar position in the home country
• can be paid either in the home currency or in the local currency
- Foreign service premium
Extra pay the expatriate receives for working outside his country of origin
• generally offered as an incentive to accept foreign assignments
- Various allowances
Hardship, housing, cost-of-living, education
- Tax differentials
May have to pay income tax to both the home country and the host-country governments no reciprocal tax treaty exists
• company usually covers extra tax assessments
- Benefits
Many firms provide the same level of medical and pension benefits abroad that employees receive at home
