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Chapter 19 - Global Human Resource Management
Global Human Resource Management
Learning objectives
Summarize the strategic role of human resource management in the international
business.
Identify the pros and cons of different approaches to staffing policy in the
international business.
Explain why managers may fail to thrive in foreign postings.
Recognize how management development and training programs can increase the
value of human capital in the international business firm.
Explain how and why performance appraisal systems might vary across nations.
Understand how and why compensation systems might vary across nations.
Understand how organized labor can influence strategic choices in the international
business firm.
Human resource management is key to the competitiveness of international firms. HRM
refers to those activities undertaken by an organization to effectively apply its human
resources. These activities include human resource strategy, staffing, performance
evaluation, management development, compensation, and labor relations.
Firm success requires that HRM policies are congruent with strategy and with formal and
informal structure and controls. Strategies like “think globally and act locally” sound
good, but their implementation requires effective HRM policies.
The opening case explores how Mary Kay Inc. developed a global workforce model to
help solidify the company’s worldwide reach and motivate employees. The closing case
describes the development of a global employee database at IBM that helped the
company identify workforce requirements and effectively match employee skills to client
needs.
OUTLINE OF CHAPTER 19: GLOBAL HUMAN RESOURCE
MANAGEMENT
Opening Case: A Global Team at Mary Kay Inc.
Introduction
The Strategic Role of Global HRM
19-1
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
19
Chapter 19 - Global Human Resource Management
Staffing Policy
Types of Staffing Policies
Expatriate Managers
Management Focus: Managing Expatriates at Royal Dutch Shell
Global Mindset
Training and Management Development
Training for Expatriate Managers
Repatriation of Expatriates
Management Focus: Monsanto’s Repatriation Program
Management Development and Strategy
Performance Appraisal
Performance Appraisal Problems
Guidelines for Performance Appraisal
Compensation
National Differences in Compensation
Management Focus: Global Compensation Practices at McDonald’s
Expatriate Pay
International Labor Relations
The Concerns of Organized Labor
The Strategy of Organized Labor
Approaches to Labor Relations
Chapter Summary
Critical Discussion Questions
Closing Case: IBM and Its Human Resources
CLASSROOM DISCUSSION POINT
Try to invite a couple of managers who have had experience working in foreign markets
to be guest speakers. Ask them to discuss why they were selected for the assignment and
about the training they may have received prior to their foreign assignments. Then, ask
them about their experiences in the foreign country—what they found especially
challenging, what surprised them most, what differences they encountered between their
domestic way of doing business and the way of business in the foreign market, and so on.
Then, ask them what else their companies could have done, if anything, to make their
transition to the foreign market easier.
19-2
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
Chapter 19 - Global Human Resource Management
LECTURE OUTLINE FOR CHAPTER
This lecture outline follows the Power Point Presentation (PPT) provided along with this
instructor’s manual. The PPT slides include additional notes that can be viewed by
clicking on “view,” then on “notes.” The following provides a brief overview of each
Power Point slide along with teaching tips, and additional perspectives.
Slide 19-3 What Is HRM?
Human resource management (HRM) refers to the activities an organization carries out
to utilize its human resources effectively.
The four major tasks of HRM are
1. staffing
2. management training and development
3. performance evaluation
4. compensation policy
Slides 19-4 through 19-6 The Strategic Role of International HRM
Firms need to ensure there is a fit between their human resources practices and strategy.
Slides 19-7 and 19-8 Staffing Policy
A firm’s staffing policy is concerned with the selection of employees who have the skills
required to perform a particular job.
Slides 19-9 through 19-12 Types of Staffing Policy
Three staffing policy choices at the international level are: ethnocentric, polycentric, and
geocentric.
1. The ethnocentric approach to staffing fills key management positions with
parent-country nationals
2. The polycentric staffing policy recruits host country nationals to manage subsidiaries
in their own country, and parent country nationals for positions at headquarters
3. The geocentric staffing policy seeks the best people, regardless of nationality, for key
jobs
Slides 19-13 through 19-17 Expatriate Managers
Expatriate failure is the premature return of an expatriate manager to his or her home
country. Expatriate failures impact the company, as do near-failures.
Another Perspective: Until the advent of the Internet, expatriates often felt isolated.
Today numerous sites exist where expatriates can communicate with each other and share
their experiences. One example of this type of site is {http://www.expatexchange.com/}.
Students can explore the site, or it can be an in-class activity to see some of the issues
facing expatriates.
Four dimensions that predict expatriate success are:
Self-orientation: Expatriate’s self-esteem, self-confidence, and mental well-being
Others-orientation: The ability to interact effectively with host-country nationals
19-3
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
Chapter 19 - Global Human Resource Management
Perceptual ability: The ability to understand why people of other countries
behave the way they do
Cultural toughness: The ability to adjust to the posting
Slide 19-18 Think Like a Manager: Expatriate Selection
Slide 19-19 The Global Mindset
A global mindset may be the fundamental attribute of a global manager.
Slide 19-20 Training and Management Development
Training focuses upon preparing the manager for a specific job.
Management development is concerned with developing the skills of the manager over
his or her career with the firm.
Slide 19-21 Training for Expatriate Managers
Cultural training (seeks to foster an appreciation for the host country's culture),
language training (an exclusive reliance on English diminishes an expatriate manager's
ability to interact with host country nationals), and practical training (helps the
expatriate manager and her family ease themselves into day-to-day life in the host
country), all help reduce expatriate failure.
Another Perspective: Numerous companies offer expatriate training services. One great
example is Kwintessential
{http://www.kwintessential.co.uk/cultural-services/articles/expat-cultural-training.html}.
The company’s web site includes a wealth of information on the expatriate process,
country profiles, and even an online quiz on cultural awareness. Consider using the site
in-class, or asking students to explore it on their own.
Slide 19-22 Repatriation of Expatriates
HRM needs to develop good programs for re-integrating expatriates back into work life
within their home country organization once their foreign assignments are over and for
utilizing the knowledge they acquired while abroad.
The benefits from foreign assignments can be lost by firms if they are not careful in the
repatriation of the expatriates.
Slide 19-23 Management Development and Strategy
Management development is often used as a strategic tool to build a strong unifying
culture and informal management network, both of which are supportive of a
transnational and global strategy.
Slide 19-24 Performance Appraisal
Evaluating expatriates can be especially complex.
Typically, both host nation managers and home office managers evaluate the performance
of expatriate managers. Both types of managers are subject to unintentional bias.
Slide 19-25 Guidelines for Performance Appraisal
Firms need to seek ways to reduce bias in performance appraisals.
Slide 19-26 Compensation
19-4
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
Chapter 19 - Global Human Resource Management
Should executive pay in different countries reflect the standards in each country or be
equalized on a global basis? How should expatriates be paid?
Slides 19-27 and 19-28 National Differences in Compensation
Slides 19-29 through 19-31 Expatriate Pay
An expatriate’s compensation package is made up of:
1. base salary
2. a foreign service premium
3. various allowances
4. tax differentials
5. benefits
Slide 19-32 International Labor Relations
The key issue in international labor relations is the degree to which organized labor is
able to limit the choices available to an international business.
Another Perspective: The International Labor Organization (ILO) supports worker issues
throughout the world. To see some of the issues the ILO is currently involved in, go to
{http://www.ilo.org/}.
Slide 19-33 The Concerns of Organized Labor
The bargaining power of unions comes from their ability to threaten to disrupt production
by striking or protesting.
Slide 19-34 Strategy of Organized Labor
Organized labor has responded to the increased bargaining power of multinational
corporations by:
setting-up their own international organizations
lobbying for national legislation to restrict multinationals
trying to achieve regulation of multinationals through international organization
such as the United Nations.
However, none of those efforts has been very successful.
Another Perspective: India’s issues strict policies regarding labor have implications for
multinational companies. To learn more, go to
{http://www.businessweek.com/news/2011-01-11/lingerie-beats-boxers-in-india-as-laws-
discourage-manufacturers.html}.
Slide 19-35 Approaches to Labor Relations
Many firms are recognizing that the way in which work is organized within a plant can be
a major source of competitive advantage.
19-5
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
