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Transcript of HRM301 Dessler 17

Farzana Chowdhury HRM301 (Sec01) Spring 2013


Human Resource ManagementELEVENTH EDITION

GARY DESSLERPart 5 | Employee Relations

Chapter 17

Managing Global Human Resources

After studying this chapter, you should be able to:1. List the HR challenges of international business. 2. Illustrate how intercountry differences affect HRM.

3. Discuss the global differences and similarities in HR practices.4. Explain five ways to improve international assignments through selection. 5. Discuss how to train and maintain international employees.


HR and the Internationalization of Business The Global Challenges Most companies do business abroad. And doing so

presents them with various management challenges. Firms need to Coordinate

market, product, and production plans on a worldwide basis. organization structures capable of balancing centralized home-office control with adequate local autonomy. extend HR policies and systems to service staffing needs abroad.173



The Internationalization of Business Global Staffing Issues: Companies operating only withing the borders of one

country generally have the luxury of dealing with relatively limited set of economic, cultural, and legal variables. A company operating in multiple units abroad have to take into consideration the laws of each unit when staffing for those unit

Special candidate selection Overseas assignment Immigration processing Cultural and language orientation and training Compensation administration and payroll processing Tax administration Career planning and development Handling of spouse and dependent matters174

Inter-country Differences Affecting HRM Cultural factors Countries widely differ in their cultures, which reflects in

their HR practices. A study of 330 managers from China and US revealed that US managers tend to be most concerned about getting the job done whereas the Chinese mamagers were more concerned with with maintaining a harmonious environment. Furtheormore, compared to US employees, Mexican workers expect managers to keep their distance rather than to be close, and to be formal than informal. In any case, cultural factors do influence human resource policies and practices.175

Inter-country Differences Affecting HRM Economic systems Difference in economic systems also translates into

differences in human resource management policies. For example, France though a capitalist society imposes restrictions on employers right to diacharge workers and limits the number of hours an employee can work legallu work each week. Differences in labor costa are also substantial.


Inter-country Differences Affecting HRM Legal and industrial relations factors Legal as well as industrial relations factors vary from

country to country. US practice of employment at will does not exist in Europe, where laying-poff workers are usually expensive. (Work councils) Codetermination is the rule in Germany and several other countries.

Codetermination means employees have the legal right to a voice in setting company policies. Workers elect their own representatives to the supervisory board of the employer, and teher is vise-presdent for labor at the top management level

HR policies on most matters in the US is set by the

employer, or by the employer in negotiations with the labor unions.177

Intercountry Differences Affecting HRMCultural Factors Economic Systems

International Human Resource Management

Legal and Industrial Relations Factors


Global Differences and Similarities in HR Practices As we have seen in the previous examples, human resourec practices tend to differ from country to country. One lone term study helps to illustrate this. Beginning from 1990s, human resource management

scholars from 13 countries and regions used the Best International Human Resource Management Practice Survey to assess human resource management practices around the world The result provide us with a snapshot of the differences and similarities in a wide range of countries. Well look at some of them:179

Global Differences and Similarities in HR Practices HR selection procedure Employers around the world use similar criteria and

methods for selecting employees. (personal interview, ability to perform the technical requirements of the job, work experience etc.) Cultural differences however have some impact across countries. Eg in Mexico havingteh right connections.

Purpose of performance appraisal There are more variations in how employers in different

countries use performance appraisal. Eg- Employers in Taiwan, US and Canada rank to determine pay as one of the top 3 reasons of PA1710

Global Differences and Similarities in HR Practices Purpose of performance appraisal (contd) Eg- The main purpose of PA in Mexico and Japan is to

recognize subordinates

Training and development practices The amount of training firms provide varies from country

to country. Training expenditure per employee range from as low as $241 in Asia (outside Japan), $359 in Japan and $ 724 in US. Training hours can range from 26 total training hours per employee in Asia upto 49 hours in Europe. There are usually more similarities than differences across countries.1711

Global Differences and Similarities in HR Practices Use / Importance of pay incentives Given the communist roots of China and USs

emphasis on pay for performance we would expect that US managers would place more importance on incentives. However surveys indicate that incentives pay only moderate role in US pay packages, where in China, Japan and Taiwan incentives play a relatively important role.


How to Implement a Global HR System Is it realistic for a company to try to institute a standardized HR management system given the difference in crosscultural HR practices? The answer is yes because studys result shows that employers may differ on some issues however in general it is not necessary for one firm to to have separate policies for each country.

They can be successful if they foucs on best practices. Best practices for making a global HR system more acceptable to local managers. Doing so enable them to develop and implement more or less global HR system around the world.1713

How to Implement a Global HR System Making the global HR system more acceptable First employees engage in three best practices so that the global human resource system they eventually develop will be acceptable to their local managers around the world. These best practices include:1. Remember that global systems are more accepted in

truly global organizations.

These managers think of themselves as global in scope, therefore they can easily accept the global imperative for having a more standardized HRMS


How to Implement a Global HR System Making the global HR system more acceptable (contd)2. Investigate pressures to differentiate and determine

their legitimacy.

Do not try to force a change without finding out whether there may in fact be any reason for using a more locally appropriate system. Be knowledgeable about local issues and be willing to differentiate where necessary. Then market test the new method.

3. Try to work within the context of a strong corporate


Companies which can create strong corporate culture find it easier to obtain agreement among far-flung employees when it comes to implement standardized practices. These managers tend to have a strong sense of shared value.1715

How to Implement a Global HR System Develop a more effective global HR system These companies engage in several best practices in developing effective worldwide HRMS1. Form global HR networks.

Firms HR managers around the should feel that they are not merely local HR managers but a part of a greater whole. Form global teams to develop new HR systems. Treat local HR managers as equal partners, not just implementers.

2. Remember that its more important to standardize ends

and competencies than specific methods.

While companies may strive to standardize tools globally, the critical points is to standardize what is assessed but to be flexible in how it is assessed. IBM uses a more or less standardized recruitmenta nd selection process worlwide, but the details such as who conducts the interview or prescreening by phone or in person differs from country 1716 to country.

How to Implement a Global HR System Implement the global HR system Finally, in actually implementing the global HR system, several best practices can help ensure a more effective implementation1. Remember, You cant communicate enough.

There is need for constant contact with the decision makers in each country, as well as the people who will be implementing and using the system, Head offices must provide adequate resources to help local HR managers to implement new / additional activities / procedures.

2. Dedicate adequate resources for the global HR effort.

We will now summarize these best practices for instituting global HR systems1717

Summary of Best PracticesDo Work within existing local systems integrate global tools into local systems. Create a strong corporate culture. Create a global network for system development global input is critical. Treat local people as equal partners in system development Assess common elements across geographies. Focus on what to measure and allow flexibility in how to measure.

Source: Ann Marie Ryan et al., Designing and Implementing Global Staffing Systems: Part 2Best Practices, Human Resource M