Chapter 19 ‒ Global Human Resource Management
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Global Human Resource Management
Learning objectives
• Summarize the strategic role of
• Identify the pros and cons of
different approaches to staffing
policy in international business.
• Explain why managers may fail to
thrive in foreign postings.
• Recognize how management
development and training
• 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
international business firms.
Human resource management is a key element
to the competitiveness of international firms.
HRM refers to those activities undertaken by an
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.
diversity across five areas: generations, sexual
orientations, disabilities, culture and origins, and
gender. The closing case explores the HRM
policy at AstraZeneca, a British pharmaceutical
firm.
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Chapter 19 ‒ Global Human Resource Management
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OUTLINE OF CHAPTER 19: GLOBAL HUMAN RESOURCE
MANAGEMENT
Opening Case: Building a Diverse Workforce at Sodexo
Introduction
Strategic Role of Global HRM: Managing a Global Workforce
Staffing Policy
Types of Staffing Policies
Expatriate Managers
Management Focus: 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: McDonald’s Global Compensation Practices
Expatriate Pay
Building a Diverse Global Workforce
International Labor Relations
The Concerns of Organized Labor
The Strategy of Organized Labor
Approaches to Labor Relations
Chapter Summary
Critical Thinking and Discussion Questions
Closing Case: AstraZeneca
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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.
OPENING CASE: Building a Global Diverse Workforce at Sodexo
Summary
The opening case explores Sodexo’s commitment to building a global diverse workforce.
With 425,000 employees spread across 80 countries, Sodexo, the “quality of life” service
provider, holds the number six spot on DiversityInc’s 2017 list of the Top 50 companies
for workforce diversity. Sodexo believes that there is a strong relationship between
workforce diversity and company performance. Discussion of the case can begin with the
following questions:
QUESTION 1: How does Sodexo define a globally diverse workforce? Explain how
Sodexo demonstrates its commitment to building a global diverse workforce.
ANSWER 1: Sodexo has identified five areas as being important to developing a global
diverse workforce: generations, sexual orientation, disabilities, culture and origins, and
gender. The commitment to a global diverse workforce at Sodexo starts at the top, with
QUESTION 2: What are the benefits of Sodexo’s commitment to a global diverse
workforce?
ANSWER 2: Sodexo believes there is a strong relationship between a global diverse
workforce and superior company performance, a belief that is backed up by recent
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QUESTION 3: Do you see any disadvantages to having company-wide diversity
priorities?
ANSWER 3: Sodexo’s Diversity Leadership Council sets company wide diversity
priorities and then allows managers in each country to establish their own diversity
initiatives. Each country is required to report to a regional Diversity Leadership Council.
Another Perspective: For more information on Sodexo’s global workforce, go to:
{http://www.sodexo.com/home.html} and {http://www.diversityinc.com/news/sodexo-
report-2017-global-workplace-trends/}.
LECTURE OUTLINE FOR CHAPTER
This lecture outline follows the Power Point Presentation (PPT) provided along with this
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 major tasks of HRM are:
• Human resource strategy
• Staffing
o Expatriate managers
• Management development
• Performance evaluation
• Compensation policy
• Labor relations
Slides 19-5 – 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 – 19-16 Staffing Policy
A firm’s staffing policy is concerned with the selection of employees who have the skills
required to perform a particular job. The organization’s norms and value systems is its
corporate culture.
Types of Staffing Policy
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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.
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
• Perceptual ability: the ability to understand why people of other countries
behave the way they do
Management development is concerned with developing the skills of the manager over
his or her career with the firm.
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
includes a wealth of information on the expatriate process, country profiles, and even an
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online quiz on cultural awareness. Consider using the site in-class, or asking students to
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.
Management Development and Strategy
Management development is often used as a strategic tool to build a strong unifying
performance of expatriate managers. Both types of managers are subject to unintentional
bias.
Guidelines for Performance Appraisal
Firms need to seek ways to reduce bias in performance appraisals.
Slides 19-24 – 19-28 Compensation
Should executive pay in different countries reflect the standards in each country or be
equalized on a global basis? How should expatriates be paid?
National Differences in Compensation
U.S. CEOs earn about twice the pay of non-U.S. CEOs.
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