Post on 05-Apr-2018
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Human Resource Selection and
Development Across Cultures
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HUMAN RESOURCE IMPORTANCE Human Resource Management is an essential part of an organization
Productive for an Efficient workplace
Positive Organizational structure leads to companys success Motivation Techniques and for reduction of turnovers
Monetary Benefits
Competitive Salary
Good benefits Promotion etc.
Non Monetary Benefits
Training
Education opportunities
Daily Meals at reduced cost / Free Meals etc
Company should always be on a lookout to find out how employees feel.
Due to Globalization, individual talent is being encouraged / recognized.
For MNC, selection and development of HR is very important.
Tacit Knowledge Knowledge that cannot be formalized in manuals.
HR Issues with International Assignments are critical for MNCs.
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SOURCES OF HUMAN RESOURCEMNCs can use four basic sources for filling overseas positions:
(1) Home-Country Nationals (Expatriates):
Expatriate managers are citizens of the country where the MNC is headquartered
Sometimes called Headquarters Nationalsor Expatsare deployed at Keypositions in foreign country for e.g. US and European companies send Expats toIndia etc.
Most common reason for using home-country nationals (expatriates) are: To get the overseas operation under way
Provision of Technical Expertise
Maintain Financial Control over the foreign operation
However in some instances, host country nationals may be better suited like: In developing countries
Reliance on Customer base is high Previously Expatriates were mostly males, however Female expatriates are
increasingly growing.
Trend in Home-Country Nationals is decreasing, even in Japanese companies,because:
As MNCs are increasing, it is becoming difficult to have more talented personals. Local Managers are becoming more qualified
High cost is associated in keeping Expats overseas
Change in Policy
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SOURCES OF HUMAN RESOURCE(2) Host-Country Nationals:
Local managers (usually at middle and low level) are hired by the MNC
They are familiar with the culture
They know the language
They are less expensive than home-country personnel
Hiring them is good public relations
Exception in staffing pattern occurs when government intervenes ,For e.g.:
In Brazil, 2/3 of employees in a foreign subsidiary have to be Brazilians. In European countries, home country managers remain in top positions for the rest
of careers. They are not transferred back to Headquarter.
However in U.S, Managers are transferred back or shifted to other subsidiaries.
(3) Third-Country Nationals (TCNs): Managers who are citizens of countries other than the country in which the MNC is
headquartered or the one in which the managers are assigned to work by theMNC.
Advantages of having TCNs can be:
These people have the necessary expertise for the job Salary Package may be less than a home country national
May speak multiple languages and may be a multi-cultural individual
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SOURCES OF HUMAN RESOURCE(4) Inpatriates:
Individuals from a host country or a third-country national who are assigned towork in the home country
Advantages of having Inpats in top management or Board of Directors can be: To recognizes the need for diversity at the home office
Help MNCs better develop their global core competencies
MNCs can subcontract or outsource to take advantage of lower human resource
costs and increase flexibility
Sub Contracting and Outsourcing:
Sub Contracting
Employee hired through a third partyorganization for the MNC
Offshore Outsourcing
Hiring of temporary workers from
abroad on special visas.
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REASONS FOR OUTSOURCING WORK
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SELECTION CRITERIA FOR
INTERNATIONAL ASSIGNMENTS Organizations examine a number of characteristics to determine
whether an individual is sufficiently adaptable. Work experiences with cultures other than ones own
Previous overseas travel Knowledge of foreign languages
Recent immigration background or heritage
Ability to integrate with different people, cultures, and types of businessorganizations
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SELECTION CRITERIA FOR
INTERNATIONAL ASSIGNMENTSAdaptability to Cultural Change
Those who were best able to deal with their new situation haddeveloped coping strategies characterized by socio-cultural and
psychological adjustments including: Feeling comfortable that their work challenges can be met
Being able to adjust to their new living conditions
Learning how to interact well with host-country nationals outside of work
Feeling reasonably happy and being able to enjoy day-to-day activities
Physical and Emotional Health
Overseas Managers must have good physical and emotional Health.
Should have ability to withstand cultural shock Marital Status
In Middle East, Europe etc. middle age men are best suited for jobs
In Saudia, Africa etc. young people are preferred.
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SELECTION CRITERIA FOR
INTERNATIONAL ASSIGNMENTSAge, Experience and Education
Young managers are eager for International assignments.
They are more worldly and can handle pressure.
However, they are least developed in management experience.
U.S, European and Russians managers are young and can be easily be consideredfor International assignments.
Many companies prefer minimum level of degree / qualification.
In Arab countries, International assignments are based on experience. InJapan and China, trend for experienced and senior age managers stillprevails.
Language Training
Not much attention Is given by MNC on language training.
U.S. managers are worst in the language area.
Executives from Japan, Eurpoe and Brazil placed high priority on speakingmore than one language.
Asian countries are following the same trend and consider multi language asa competitive edge.
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SELECTION CRITERIA FOR
INTERNATIONAL ASSIGNMENTSMotivation for a Foreign Assignment
Employee must have a sense of mission.
Desire for adventure or pioneering spirit, risk taking are acceptable reasons forwanting to go abroad.
Other factor can also include opportunity to improve self economic status.
U.S. Managers lead; as they are self motivated society with individualist approachtowards management
Family work issues / Dependants
If Family is not happy, it can effect the expatriates performance.
Most MNCs, especially in Singapore, MNCs also interview the spouse.
Adaptability Screening:Process to evaluate how well the family is likely to stand
up to the rigors and stress of overseas life. Unmarried employees are more willing to accept foreign assignments as
compared to married employees with children.
Leadership Ability
Leadership:Ability to influence people to act in a particular way. Process determines if the manager was an effective leader in the home country.
Variables Include Maturity, Emotional Stability, Communication, Creativity, Health etc.
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MANAGER PREPARATION FOR INTERNATIONAL
ASSIGNMENTS GLOBALLY APPLIEDApplicants better prepare themselves for international assignments by carrying outthe following three phases:
Phase 1: Focus on self-evaluation and general awareness include the followingquestions:
Is an international assignment really for me?
Does my spouse and family support the decision to go international?
Collect general information on available jobs.
Phase 2: Conduct a technical skills assessment Do I have the technical skills required for the job?
Start learning the language, customs, and etiquette of the region you will be posted
Develop an awareness of the culture and value systems of the geographic area
Inform your superior of your interest in the international assignment.
Phase 3:
Attend training sessions provided by the company
Confer with colleagues who have had experience in the assigned region
Speak with expatriates and foreign nationals about the assigned country
Visit the host country with your spouse before the formally scheduled departure (ifpossible)
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INTERNATIONAL HUMAN RESOURCE
SELECTION PROCEDURES Two common selection procedures are:
Tests and Interviews
Adjustment Model
Tests and Interviews Testing is not a popular method for selection as compared to Interview.
Interviewing spouse along with the candidate for Management positionforinternational assignments is a common norm both is U.S. and Germany.
However for Technical position, this percentage is low. Adjustment Process
Anticipatory Adjustment Training: Include cross cultural seminars or workshops.
Previous experience: Expats with working experience in same cultures before.
In-country Adjustment Individuals ability to adjust effectively
Ability to maintain a positive outlook, interact well with host nationals, and toperceive and evaluate the host countrys cultural values and norms correctly
Clarity of expatriates role in the host management team
Expatriates adjustment to the organizational culture Non-work matters
Socialization Tactics: Whos who and Whats what
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THE RELOCATION TRANSITION CURVETHE RELOCATION TRANSITION CURVE
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COMMON ELEMENTS OF COMPENSATION
PACKAGES
Compensating expatriates can be difficult because there are manyvariables to consider
Most compensation packages are designed around four commonelements:
Allowances Taxes
Base Salary Benefits
Other than the above, special Incentives programs are also
designed to keep Expats motivated
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RELATIVE COST OF LIVING IN SELECTEDRELATIVE COST OF LIVING IN SELECTED
CITIESCITIES
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COMMON ELEMENTS OF COMPENSATION
PACKAGESBASE SALARY
Amount of money that an expatriate normally receives in the home country
Base salary for U.S., Japan and European upper-middle manager is around $
175,000 annually. Exchange rate effects real wages
Expatriate salary is set according to base pay and currency of home country
German Manager working in a U.S based company in India will have salary equivalentto German Market.
BENEFITS
Approximately 1/3 of compensation for employees is Benefits. For e.g. extravacation time for U.S. employees, Discount Coupons, etc.
Issues regarding compensation of expatriates include: Should host-country legislation regarding termination of employment affects employee
benefits entitlements?
Is the home or host country responsible for the expatriates social security benefits?
Should benefits be subject to the requirements of the home or host country?
Which country should pay for the benefits? Should other benefits be used to offset any shortfall in coverage?
Should home-country benefits programs be available to local nationals?
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COMMON ELEMENTS OF COMPENSATION
PACKAGESALLOWANCES
Cost-of-Living Allowance Payment for differences between the home country and the overseas
assignment. Designed to provide the expatriate the same standard of living enjoyed in
the home country
Relocation Allowance:
House shifting House Allowance
Predetermined cost for house
Residence provided by MNC
Education Allowance Tuition fee, enrollment fee, books, transportation of Expats children
Hardship Allowance To induce expats to work in hazardous areas / disputed areas
Hardship Premium is allocated to Expats of China, Afghanistan etc.
Related Allowances may also include club memberships etc.
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COMMON ELEMENTS OF COMPENSATION
PACKAGESINCENTIVES
A growing number of firms have replaced the ongoing premium for
overseas assignments with a one-time, lump-sum premiumTAXES
Tax equalization
An expatriate may have two tax bills for the same pay
Host country
U.S. Internal Revenue Service
MNCs usually pay the extra tax burden
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TAILORING THE COMPENSATION
PACKAGES Senior Level Managers in China are paid around 4 times as much as junior staff U.S. senior level managers salary is much higher as compared to Europe and
Asian counterparts
Balance-sheet approach Ensure the expatriate does not lose money from the assignment.
Complementary approach Negotiate to work out an acceptable ad hoc arrangement.
Localization
Pay the expatriate a salary comparable to local nationals Common with young professionals who are given a long term overseas
assignment e.g. Asian managers going to Iraq.
Lump sum method Give expatriate a pre determined lump sum amount of money
Expat will chose himself how and when to spend itCafeteria approach Compensation package that gives the individual a series of options Married Expats may chose Education allowance, whereas Unmarried Expats can
chose a Chauffer driver car
Regional system Set a compensation system for all expatriates who are assigned to a particular
region Expats for Europe will have same salary slab.
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HUMAN RESOURCE MANAGEMENTHUMAN RESOURCE MANAGEMENT
PRACTICES IN DIFFERENT COUNTRIESPRACTICES IN DIFFERENT COUNTRIESTraining is the process of altering employee behavior and attitudesin a way that increase the probability of goal attainment.
Common topics covered in cultural training are social etiquette,
customs, economics and business etc.
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IMPACT OF OVERALL MANAGEMENT
PHILOSOPHY ON TRAININGFour basic philosophic positions:
(1) Ethnocentric MNC:
Stresses nationalism and often puts home-office people in charge of keyinternational management positions
In China, Japan etc.
(2) Polycentric MNC:
Places local nationals in key positions and allows these managers toappoint and develop their own people
In Singapore, Australia
(3) Regiocentric MNC:
Relies on local managers from a particular geographic region to handleoperations in and around that area
Advertising managers from subsidiary in Italy, Germany and France will cometogether to formulate advertising campaign for overall EU countries. E.g. Gillette
(4) Geocentric MNC:
Seeks to integrate diverse regions of the world through a global approach todecision making
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CROSS-CULTURAL TRAINING PROGRAMS
Steps in cross-cultural training programs: Local instructors and a translator observe the pilot training
program or examine written training materials Educational designer debriefs the observation with the
translator, curriculum writer, and local instructors
The group examines the structure and sequence, ice breaker,
and other materials to be used in the training The group collectively identifies stories, metaphors,
experiences, and examples in the culture that fit into the newtraining program
The educational designer and curriculum writer makenecessary changes in training materials
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GLOBAL LEADERSHIP DEVELOPMENT
The Global LeadershipProgram (GLP)
A consortium of leading U.S.,European, and Japanesefirms, global faculty, andparticipating host countries Provide an intensive
international experience
Develop a global mindset Instill cross-cultural
competency
Provide an opportunity for
global networking