© 2008 by Prentice Hall14-1 Human Resource Management 10 th Edition Chapter 14 GLOBAL HUMAN...

© 2008 by Prentice Hall 14-1

Human Resource Management 10th EditionChapter 14

GLOBAL HUMAN RESOURCE MANAGEMENT


Cultural Differences Affecting Global Human Resource Management

Cultural differences vary from country to country with corresponding differences in HR practices


Country’s Culture

• Set of values, symbols, beliefs, languages, and norms that guide human behavior within country

• Learned behavior that develops as individuals grow from childhood to adult

• Countries are recognizing that they need to understand culture of countries in which they do business


Evolution of Global Business

• Not long ago, Mercedes-Benz was still a German company, General Electric was American, and Sony was Japanese

• Many United States firms such as Coca-Cola, Procter & Gamble, and Texas Instruments do most of their business and employ most of their workers outside the U.S.

• Many non-U.S. companies make products here such as with Toyota American making their cars in Kentucky


Evolution of Global Business

• Exporting - Selling abroad retaining foreign agents and distributors

• Licensing - Organization grants foreign firm right to use intellectual properties

• Franchising - Parent company grants another firm right to do business in prescribed manner


Evolution of Global Business (Cont.)

• Multinational corporation - Firm based in one country and produces goods or provides services in one or more foreign countries

• Global corporation - Corporate units in countries are integrated to operate as one organization worldwide - Operates as if the entire world were one entity


Global Professional in Human Resources (HRCI)

• Strategic international HR management

• Organizational effectiveness and employee development

• Global staffing

• International assignment management

• Global compensation

• International employee relations and regulations


Global Human Resource Management

Global HR managers develop and work through integrated global human resource management system similar to one they experience domestically


Environment of Global Human Resource Management

1

Human Resource

Management

Other Functional

Areas

OperationsMarketing

Finance

Lega

l Con

side

ratio

ns E

cono

my

Technology

Society

Shareholders

Unions

Customers Competition Labor Market

Human Resource

Development

Com

pens

atio

n

Staffing

Em

ployee and

Labor Relations

Safety and Health

INTERNAL ENVIRONMENT

EXTERNAL ENVIRONMENT UNITED STATES

GLOBAL ENVIRONMENTU

nanticipated Events


Global Staffing

• Types of Global Staff Members

• Approaches to Global Staffing


Types of Global Staff Members

• Expatriate - Employee working in firm who not citizen of country in which firm is located but citizen of country where organization is headquartered

• Host-country national - Employee’s nationality same as location of subsidiary

• Third-country national - Citizen of one country, working in second country, and employed by organization headquartered in third country


Approaches to Global Staffing

• Ethnocentric staffing - Companies primarily hire expatriates to staff higher-level foreign positions

• Polycentric staffing - When more host-country nationals are used throughout the organization, from top to bottom


Approaches to Global Staffing (Cont.)

• Regiocentric staffing - Regional groups of subsidiaries reflecting organization’s strategy and structure work as a unit

• Geocentric staffing - Uses worldwide integrated business strategy


Expatriate Selection Stages

• Self-selection - Employees determine if they are right for a global assignment (family also)

• Creating a candidate pool

• Technical skills assessment

• Making a mutual decision


Background Investigation

• Conducting background investigations is equally, or more, important

• Differences across cultures and countries often put up barriers to overcome

• Each country has own laws, customs and procedures for background screenings


Global Human Resource Development

• Expatriate Training & Development

• Continual Development: Online Assistance and Training

• Repatriation Orientation and Training


Expatriate Preparation and Development Program

Expatriate Preparation and Development

Prior to Departure: Orientation and Training

During Assignment: Continual Development

Near Completion: Repatriation Orientation Training

Language Culture History Local Customs Living Conditions

Expanding Skills Career Planning Home-Country Development

U.S. Lifestyle U.S. Workplace U.S. Employees


Trends & Innovations: Global E-learning

• Globalization has created special need for e-learning

• Challenges for global e-learning implementation are language and localization issues

• Companies that want to offer courses in several languages usually turn to translators


Compensation for Host-Country Nationals

• Organizations should think globally but act locally

• Compensation - Normally, it is slightly above prevailing wage rates in the area

• Variations in laws, living costs, tax policies, and other factors all must be considered


Compensation for Host-Country Nationals (Cont.)

• Factors to consider: minimum wage requirements, which often differ from country to country and even from city to city within a country; working time information such as annual holidays, vacation time and pay, paid personal days, standard weekly working hours, probation periods, and overtime restrictions and payments; and hiring and termination rules and regulations covering severance practices


Compensation for Host-Country Nationals (Cont.)

• Culture often plays a part in determining compensation

• North American compensation practices encourage individualism and high performance

• Continental European programs typically emphasize social responsibility

• Traditional Japanese approach considers age and company service as primary determinants of compensation


Expatriate Compensation

• Cost 3 - 5 times an assignee’s host-country salary per year and more if currency exchange rates become unfavorable

• Largest expatriate costs include overall remuneration, housing, cost-of-living allowances and physical relocation

• U.S. citizens living overseas can exclude up to $80,000 of income earned abroad


Expatriate Compensation (Cont.)

• Country’s culture can affect compensation

• People in U.S. derive great status from high pay

• Nations in large parts of Europe and Asia shun conspicuous wealth

• In Italy, teamwork is more valued than individual initiative


Global Safety and Health

• Important because employees who work in safe environment and enjoy good health more likely to be productive and yield long-term benefits to organization

• U.S.-based global operations are often safer and healthier than host-country operations, but not as safe as similar operations in U.S.


Global Employees and Labor Relations

• Unionism maintains much of its strength abroad

• Foreign unions less adversarial with management


Global Employees and Labor Relations in European Countries

• Codetermination, which requires firms to have union or worker representatives on their boards of directors, is very common

• Laws make it hard to fire workers, so companies are reluctant to hire

• Generous and lengthy unemployment benefits discourage the jobless from seeking new work


Global Employees and Labor Relations in South American Countries

• In countries such as Chile, collective bargaining for textile workers, miners, and carpenters is prohibited

• Unions are generally allowed only in companies of 25 workers or more. Practice has encouraged businesses to split into small companies to avoid collective bargaining


North American Free Trade Agreement (NAFTA)

• Between Canada, Mexico, and United States

• Facilitated movement of goods across boundaries within North America

• Free-trade zone of over 400 million people

• Combined gross domestic profit of about $12 trillion


Central American Free Trade Agreement

• Ratified by America’s Congress after long political battle, and signed into law in 2005

• Could provide huge economic boost for region


Political and Legal Factors

Nature and

stability of

political and

legal systems

vary throughout

globe


Tariffs and Quotas

• Tariffs - Taxes collected on goods shipped across national boundaries

• Quotas - Limit number or value of goods imported across national boundaries


Global Bribery

• Foreign Corrupt Practices Act

• Law has teeth • Not having ability to use

bribery as tool of doing business has been costly for American companies


Global Equal Employment Opportunity

• Women constitute more than 20% of total expatriate workforce percent of U.S. expatriate managerial workforce

• Some cultures today will not accept woman as a boss

• Sexual harassment is global problem

• Sexual harassment laws differ from country to country


Virtual Teams in Global Environment

• Necessity of everyday working life

• Enable companies to accomplish things more quickly and efficiently


Difficulties that Virtual Teams Confront

• Do not feel as connected or committed to team

• Communication problems directly proportional to number of time zones separating them

• Language problems

© 2008 by Prentice Hall14-1 Human Resource Management 10 th Edition Chapter 14 GLOBAL HUMAN...

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