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International Human Resources Management

International Human Resources Management. Chapter 10, Part 2. Training and Development. Cross-cultural training: increases the relational abilities of future expatriates and their spouses and families

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International Human Resources Management

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  1. International HumanResources Management Chapter 10, Part 2

  2. Training and Development • Cross-cultural training: increases the relational abilities of future expatriates and their spouses and families • Training rigor: extent of effort by both trainees and trainers required to prepare the trainees for expatriate positions

  3. Training and Development (cont.) • Low rigor training – used for short-term assignments • Short time period • Lectures and videos on local cultures • Briefings on company operations • High rigor training – for long-term assignments • Longer time period • Experiential learning • Extensive language training • Includes interactions with host country nationals

  4. Exhibit 10.4: Training Rigor: Techniques and Objectives

  5. Expatriate Performance Appraisal: Challenges • Fit of international operation in multinational strategy • Different business environment • Unreliable data • Complex and volatile environments • Time difference and distance separation • Local cultural situation • Home country managers may not understand the local situation

  6. Steps to Improve the Expatriate Performance Appraisal • Fit the evaluation criteria to strategy • Fine-tune the evaluation criteria to the situation • Get evaluations from different people

  7. The Expatriate Manager: Compensation • The balance-sheet approach • Provides a compensation package that gives the expatriate the same standard of living he/she would have at home • Allowances for cost of living, housing, food, recreation, personal care, clothing, education, home furnishing, transportation, and medical care

  8. Exhibit 10.7: Balance Sheet Approach To Expatriate Compensation

  9. Compensation Details • Base salary: the amount of money that an expatriate would receive for doing the same job in the home country • Used as a basis to establish salary in the host country • Salary may be paid in home country currency, host country currency, or a combination of the two

  10. Compensation Details (2) • Benefits: a substantial portion of expatriate compensation • Is the home country or the host country responsible for the expatriate's social security benefits? • Should home-country benefits programs be available to host-country nationals?

  11. Compensation Details (3) • Allowances • Relocation allowance • Cost-of-living allowances are paid when the employee must incur extra costs that he would not pay in the home country • Examples: housing allowance, and the costs of private schools for the employee's children • Hardship allowance: Often paid to employees who work in a country with difficult living conditions • Home-leave allowances: pays the cost of periodic trips home for the employee and family

  12. Compensation Details (4) • Allowances (continued) • Foreign service premium • In the past, a foreign-service premium was often a monthly payment that continued as long as the employee worked overseas • Many firms have eliminated the ongoing foreign-service premium. • Today, a one-time, lump sum foreign service premium is often paid at the start of the overseas assignment to provide cash for immediate expenses.

  13. Compensation Details (5) • Taxes • An expatriate may be required to pay income taxes to both the host country and his/her native country • The company compensates the employee for the extra amount of tax

  14. Compensation Details Summary The cost of an expatriate employee = salary costs + benefit costs + allowance costs (goods and services + housing) + tax costs

  15. Compensation Approaches • The compensation package must be cost-effective and should be seen as fair • Balance-sheet approach: ensure that the expatriate does not lose money from the foreign assignment • Negotiation approach: Negotiate compensation with each employee – may be used with top-level managers • Host-based compensation: Pay the expatriate a salary comparable to local nationals

  16. Compensation Approaches (2) • Lump sum method: give expatriate a pre-determined amount of money. Employee decides how to spend it. • Cafeteria approach: Offer the employee a choice among various compensation options, with a limit on total costs

  17. Compensation Approaches (2) • Regional system: Set up a compensation system for all expatriates who are assigned to a particular region • Global pay systems: worldwide job evaluations, performance appraisal methods, and salary scales are used

  18. Repatriation Problem • Difficulties faced coming back home • Three basic cultural problems—“reverse culture shocks” • Adapt to new work environment and culture of home • Expatriates must relearn own national and organization culture • Need to adapt to basic living environment

  19. Strategies for Successful Repatriation • Provide a mentor at the home office to help the expatriate stay in touch during the overseas assignment. • Provide a home-leave policy to encourage expatriates to make regular visits to the home office • Provide a strategic purpose for the repatriation – the foreign experience should help the expatriate's career • Help the expatriate make good use of the foreign assignment. • Provide information and assistance for relocation. • Provide training and preparation for the return • Provide support for the expatriate and family on return

  20. International Assignments for Women: Two Myths • Myth 1: Women do not wish to take international assignments. • Myth 2: Women will fail in international assignments because of the foreign culture’s prejudices against local women. • Successful women expatriates • Foreign not female—emphasize nationality not gender

  21. International Assignments for Women: Advantages • More visible • Strong in relational skills

  22. International Assignments for Women: Disadvantages • Face the glass ceiling • Isolation and loneliness • Constant proving of themselves, working harder than male • Need to balance work and family responsibilities • Need to worry about accompanying spouse

  23. More Women in the Future? • Women expatriate managers are expected to grow • Acute shortage of high-quality managers • Increasing number of women provide role models

  24. What Can Companies Do To Ensure Female Expatriate Success? • Provide mentors and networking opportunities • Remove sources of barriers – educate other employees about the role of women managers • Provide support to cope with dual-career issues

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