CHAPTER 15u.camdemy.com/sysdata/doc/9/97605a63295d8235/pdf.pdf · CHAPTER 15 HRIS and ... (PCN) • Host Country Nationals (HCN) • Third Country Nationals (TCN) ... Information

Kavanagh, Human Resource Information Systems, Third Edition© 2015 SAGE Publications, Inc.

CHAPTER 15

HRIS and International Human Resource Management


REGIONAL TRADE ZONES

• Asia-Pacific Economic Cooperation

– Members Account For Nearly 25% Of World Trade

• North American Free Trade Agreement

– Created A Free Trade Zone Among Canada, Mexico and the U.S.

• European Union

– Single Largest Market

• ASEAN And SAARC


INCREASING IMPORTANCE OF HR TECHNOLOGY

• Imported products increase competition.

• Deregulation changes the business environment.

• U.S. companies must expand their markets globally.

• Globalization means managing human resources around the world.

• The aggregate world exports as a percentage of world gross domestic products (GDP) increased from 11.6 percent in 1970 to 30.7% in 2006.


INCREASING IMPORTANCE OF HR TECHNOLOGY 2

• Deregulation has been increased market accessibility.

• There has been an increase in international mergers and acquisitions.

• Increased awareness of the existence of talented human capital throughout the world.

• Availability and cost effectiveness of computer technology.


TYPES OF INTERNATIONAL BUSINESS OPERATIONS

• International Corporation - Uses Its Existing Core Competencies To Expand Operations Into Foreign Markets. These Organizations Compete In The Global Marketplace By Exporting Existing Products And Eventually Opening Facilities In Other Countries.

• Multinational Corporation - More Complex International Business Operation That Operates As Fully Autonomous Units In Multiple Countries In An Attempt To Capitalize On Lower Production And Distribution Costs.

• Global Corporations - Similar To Multinational Corporations; However, Global Corporations Integrate Their Operations Worldwide Through A Centralized Home Office. Global Corporations Emphasize Flexibility And Mass Customization To Meet The Needs Of Differing Customer Needs Worldwide.


GOING GLOBAL

• The Top IHRM Related Challenges Facing Global Organizations:

1. Cultural Differences (47%)

2. Lack Of Resources (40%)

3. Technology/Systems Issues (39%)

4. Time Zone Differences (35%)

• Top HR Global Data Being Maintained In HR Systems:

1. Core HR (86%)

2. Compensation (71%)

3. Performance (45%)

4. Payroll (42%)


DIFFERENCES IN HR MANAGEMENT IN MULTI NATIONAL ENTITIES

• More Functions And Activities

• Broader Perspective

• More Involvement In Personal Lives

• Changes Due To Workforce Mix

• Risk Exposure

• More External Influences


MANAGING DIFFERENT TYPES OF EMPLOYEES IN MNEs

• Global Diversity And Inclusion

• Education

• Political/Legal System

• Economic System


MANAGING EMPLOYEES IN A GLOBAL CONTEXT

Types Of Employees • Expatriates • Parent Country Nationals (PCN) • Host Country Nationals (HCN) • Third Country Nationals (TCN)


HR PROGRAMS IN GLOBAL ORGANIZATIONS

Major Issues Include:

• International Staffing

• Selecting Global Managers: Managing Expatriates

• Training For Expatriates And Other Employees

• Performance Appraisals In MMEs

• Managing International Compensation


INTERNATIONAL STAFFING

• Home-Country Nationals

– Staffing The Organization With Expatriates (PCNs) Is Advantageous Because The Organization Can Rely On The Talent Currently Available.

• Host-Country Nationals

– Staffing Positions With HCNs Provides A Number Of Advantages For The MNE. HCNs Are Less Costly, In Terms Of Both Time And Money.

• Third-Country Nationals

– TCNs Bring A Different And Often Broad Experience To The Organization. TCNs Add An International Outlook To The Workforce


SELECTING GLOBAL MANAGERS: MANAGING EXPATRIATES

Success in selecting expatriates is difficult due the following factors:

– the cultural environment of countries

– expatriate failure and its causes

– selection criteria and procedures for expatriates


CULTURAL ENVIRONMENT OF COUNTRIES

• Country Culture Will Have An Effect On All The Activities And Programs Administered by HR

• Hofstede’s Five Dimensions On Which The Cultures Of Countries Differ

(1) education/human capital

(2) values/ideologies,

(3) social structure,

(4) religious beliefs,

(5) communication.


EXPATRIATE FAILURE AND ITS CAUSES

• Defined As The Return Of An Expatriate To The Home Country Before The Period Of The Assignment Has Been Completed.

• Two Categories Of Costs—direct And Indirect

• Major Factor Affecting Expatriate Failure Is The Inability To Adjust To The New Situation And Culture By The Expatriate And Her Or His Family.


WHY DO EXPATRIATES FAIL?

• Family adjustment

• Lifestyle issues

• Work adjustment

• Bad selection

• Poor performance

• Other opportunities arise

• Business reasons

• Repatriation issues


SELECTION CRITERIA AND PROCEDURES FOR EXPATRIATES

Two General Categories—individual And Situational

• Individual

– Technical Ability

– Cross-cultural Suitability - Language Ability, Cultural Empathy, Adaptability, And A Positive Attitude Toward The Assignment In The Specific Country

– Family Requirements - Adjustment Of The Accompanying Spouse/Partner And Children


SELECTION CRITERIA AND PROCEDURES FOR EXPATRIATES (CONT.)

• Situational Factors

– Country/Cultural Requirements Could Include Work Permits And Visas

– Opportunity For The Expatriate, Spouse/Partner And The Children To Learn Another Language

– MNE Requirements Could Involve Getting Permission From The Host Country For The Selection Of Any Expatriate


TRAINING AND DEVELOPMENT OF EXPATRIATES

Purposes Of Expatriate Training

• To Supplement The Selection Process And Assist The Expatriate And Family Adjust To The New Situation.

• Economic: The Potential Direct And Indirect Costs Of Expatriate Failure Relative To The Amount Of The Investment Is Obvious.

• Predeparture Training

• Repatriation Training


EMPHASIS IN CROSS-CULTURAL TRAINING PROGRAMS

• Expatriates must be clear about their own cultural background.

• Expatriates must understand the particular aspects of culture in the new work environment.

• Expatriates must learn to communicate accurately in the new culture.


TOPICS FOR PREDEPARTURE TRAINING FOR EXPATRIATES:

Table 15.1 1. Cultural values and religions

2. Web sites for country information

3. Country history, recommended readings, videos,* and achievements in the country

4. Classical literature describing the country’s history, its folkways, and heroes and heroines

5. Information about other HCN expatriates in the country

6. Information on job opportunities for spouses and partners

7. Descriptions of the educational facilities and opportunities for families

8. Current news about the country, particularly its relationship to the parent country

9. Traditional family roles of father, mother, and children

10. Locations for shopping and shopping hours

11. Dominant language of country; extent of bilingualism in country

12. Nonverbal gestures and their meanings

13. Political structure, particularly as it affects the operation of the MNE

14. Descriptions of currency, temperature variations, transportation, hours of business

15. Sightseeing, including historic, artistic, and important cultural locations that would appeal to all the family


TOPICS FOR PREDEPARTURE TRAINING FOR

EXPATRIATES Table 15.1 (con’t)

8. Traditional Family Roles Of Father, Mother, And Children

9. Locations For Shopping And Shopping Hours

10. Dominant Language Of Country; Extent Of Bilingualism In Country

11. Nonverbal Gestures And Their Meanings

12. Political Structure, Particularly As It Affects The Operation Of The MNE

13. Descriptions Of Currency, Temperature Variations, Transportation, Hours Of Business

14. Sightseeing, Including Historic, Artistic, And Important Cultural Locations That Would Appeal To All The Family

21 Michael J. Kavanagh and Richard D. Johnson - Human Resource Information Systems: Basics, Applications, and Future Directions, 3e © 2014 SAGE Publications, Inc.


TRANSFER OF TRAINING

• The training methods would attempt to immerse the expatriate in the host country’s culture through assessment centers, simulations, sensitivity training, and extensive language training.

• The use of the HRIS to analyze the success or failure of these training programs will enable the MNE to make more effective decisions about expatriates and their training in the future.


APPRAISING EXPATRIATE PERFORMANCE IN MNEs

• What Performance Criteria Should Be Appraised?

– The Specific Job-related Competencies Of The Expatriate Manager

– Three Non-Job Related Qualities They Need To Possess To Perform Their Role Effectively

• Possess Cross-cultural Interpersonal Skills

• To Understand And Have Sensitivity To Differences In Norms, Laws, And Cultures

• Capable Of Adapting To Uncertain And Unpredictable Circumstances


APPRAISING HCNs AND TCNs PERFORMANCE IN MNEs

• PCNs managers need to be sensitive to cultural differences in appraising performance, e.g., in Japan discussing the negative aspects of an employee’s performance may be taken as an insult.

• Appraisals are used to determine pay increases and promotional decisions, training opportunities, and dismissal decisions for HCNs and TCNs.


MANAGING INTERNATIONAL COMPENSATION

• Most Complex But Critically Important Function Of The IHRM Department

• IHRM Compensation Manager Must Be Aware Of Differences In Taxation, Labor Laws Affecting Compensation And Benefits, Currency Fluctuations, And Cost-of-living Differences Within And Between Countries Where The MNE Has A Presence.

• Critical Importance Of Compensation Management In Subsidiaries Is Its Link To The Strategy Of The MNE


COMPENSATION POLICY OBJECTIVES IN MNEs

• First Objective For An MNE Is To Align Its Compensation Administration With The Strategy Of The Firm.

• Second Objective Is To Motivate Employees’ Behaviors, Which Complicated Since Multiple Countries And Cultures Are Involved.

• Third Objective Of Compensation Policy For An MNE Is That It Must Be Perceived As Fair By The Employees.


THE COMPONENTS OF INTERNATIONAL COMPENSATION

• Base Salary And A Set Of Benefits

• Foreign Service Or Hardship Premium For Expatriates

• Other Premiums For “Risk Level” Of The Assignment In The Country

• Between- And Within-Country Cost Of Living Adjustments (COLAs)


APPROACHES TO INTERNATIONAL COMPENSATION

• Going Rate Approach Or “Host-Country” Approach: the base salary for international employees is tied to the salary levels in the host country. expatriate would earn pay that is comparable with the salaries of employees in the host country.

• “Balance Sheet” Approach: has as its goal the maintenance of a home-country living standard plus a financial inducement for accepting an international assignment.


HRIS APPLICATIONS IN MNEs

HRM In An MNE Is Exceedingly More Complex Than In A Domestic Firm

– Organizational Structure For Effectiveness

– IHRM-HRIS Administrative Issues

– HRIS Applications In MNEs


HRIS APPLICATIONS: STRUCTURE FOR EFFECTIVENESS

• The Issue Of The Most Effective Structure For The Operation Of An HRIS In An MNE Has Been A “Moving Target.”

• “Structure Does Not Drive Success – People Do.” In Building An Organizational Structure For An HRIS In An MNE, It Would Seem Very Reasonable To Consider “Thinking Locally And Acting Globally” To Create An HRIS Structure For The Entire MNEs That Is Sensitive To Local Concerns First


HRIS APPLICATIONS IN IHRM: ADMINISTRATIVE ISSUES

• Service-Oriented Architecture (SOA) - The SOA Is Focused On Providing A Service For A Function That Is Well-defined, Self-contained, And Context And Platform Independent That Adds Value To The Organization’s Business Purpose.

• Outsourcing, Offshoring And Insourcing - MNEs Were The First Organizations To Outsource Many Of Their Jobs That Required Low Levels Of Skills (E.G., Call Centers).

• Data Privacy And Security - The MNE Has To Create Additional Safeguards To Be In Compliance With Security And Privacy Laws And Regulations In Different Countries.

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CHAPTER 15u.camdemy.com/sysdata/doc/9/97605a63295d8235/pdf.pdf · CHAPTER 15 HRIS and ... (PCN) • Host Country Nationals (HCN) • Third Country Nationals (TCN) ... Information