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Chapter 19 - Global Human Resource Management
19-1
Global Human Resource Management
Learning objectives
• Identify the pros and cons of
different approaches to
staffing policy in international
business.
• Recognize how management
development and training
programs can increase the
value of global human capital.
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.
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
19
Chapter 19 - Global Human Resource Management
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OUTLINE OF CHAPTER 19: GLOBAL HUMAN RESOURCE
MANAGEMENT
Opening Case: A Global Team at Mary Kay Inc.
Introduction
The Strategic Role of Global HRM
Performance Appraisal
Performance Appraisal Problems
Guidelines for Performance Appraisal
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
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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
OPENING CASE: A Global Team at Mary Kay Inc.
Summary
QUESTION 1: How are Mary Kay’s marketing and human resources strategies related?
ANSWER 1: Mary Kay uses a direct-sales approach to marketing, relying upon the
QUESTION 2: In what ways does the Mary Kay workforce model motivate employees?
ANSWER 2: Mary Kay believes that recognizing employee achievements heightens
QUESTION 3: What type of staffing approach does Mary Kay use? What are its
advantages and disadvantages?
ANSWER 3: Because Mary Kay uses a direct sales approach based on the connection of
its salesforce to the local community, Mary Kay has a polycentric staffing approach in
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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
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.
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
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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
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 19-21 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.
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.
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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.
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
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
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CRITICAL THINKING AND DISCUSSION QUESTIONS
QUESTION 1: What are the main advantages and disadvantages of the ethnocentric,
polycentric, and geocentric approaches to staffing policy? When is each approach
appropriate?
ANSWER 1: An ethnocentric staffing policy is one in which key management positions
are filled by parent country nationals. The advantages of the ethnocentric approach are:
QUESTION 2: Research suggests that many expatriate employees encounter problems
that limit both their effectiveness in a foreign posting and their contribution to the
company when they return home. What are the main causes and consequences of these
problems, and how might a firm reduce the occurrence of such problems?
ANSWER 2: The primary causes of expatriate problems are the inability of the spouse to
adjust, inability of the employee to adjust, other family problems, personal/emotional
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QUESTION 3: What is the link between an international business’s strategy and its
human resource management policies, particularly with regard to the use of expatriate
employees and their pay scale?
ANSWER 3: In firms pursuing a localization strategy, a polycentric staffing approach is
most common and there are relatively few expatriates or the associated pay issues.
QUESTION 4: In what ways can organized labor constrain the strategic choices of an
international business? How can an international business limit these constraints?
ANSWER 4: Organized labor can significantly constrain the choices firms make with
respect to location. International firms (or domestic ones for that matter) often choose to
locate new facilities in places where there is relative labor peace and harmonious working
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QUESTION 5: Reread the Management Focus on McDonald’s global compensation
practices. How does McDonald’s approach help the company to take local differences
into account when reviewing the performance of different country managers and
awarding bonus pay?
ANSWER 5: When McDonald’s revamped its global compensation practices it asked for
input from local managers on how the new system should work. By doing so,
CLOSING CASE: IBM and Its Human Resources
Summary
The closing case explores how IBM built its Human Resources function into a global
strategy that helped the company expand quickly and consistently around the world.
Discussion of the case can revolve around the following questions:
QUESTION 1: In Palmisano’s view, the quality and strategic deployment of human
capital is what separates winners from also-rans, with the idea that companies that rely on
technological or manufacturing innovations alone cannot be expected to dominate their
markets indefinitely. Would you say that technological or manufacturing innovations are
more dependent on human resources? Why?
ANSWER 1: Technological and manufacturing innovations provide only a temporary
QUESTION 2: IBM realized that national units were not effective in developing human
resources, were not aligned with IBM’s strategic focus on human resources, and lacked a
global approach to HR management. How global versus national should HR management
be?
ANSWER 2: Student responses will vary. Much of this decision depends on the type of
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QUESTION 3: The ultimate goal of IBM’s Workforce Management Initiative was to
enable the company to find and deploy the best people within the company to help solve
client problems or respond to their requests. But, what about cultural differences and
international business knowledge? Can client problems be solved solely on the merits of
the technological knowledge of IBM employees?
ANSWER 3: Cultural differences can be a significant obstacle to implementing a global,
geocentric HRM strategy. In order for such an approach to be successful, the company
QUESTION 4: IBM has transformed itself over the years from a manufacturing company
to a services company and this story is well told in the news media. However, is IBM’s
Smarter Workforce Initiative taking this services positioning too far?
ANSWER 4: Student answers will vary. Some will argue that IBM must return to
developing and manufacturing new products in order to maintain a competitive global
MHE INTERNATIONAL BUSINESS VIDEO LIBRARY
updated on a monthly basis. While there, be sure to "like" the clips that work well for
you, and add notes that might be helpful to your colleagues.
INCORPORATING globalEDGE™ EXERCISES
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The impact of strikes and lockouts on business activities can be substantial. Since your
manufacturing company is planning to expand its operations in the Asian markets, you
have to identify the countries where strikes and lockouts could introduce interruptions to
your operations. Using labor statistics from the International Labour Organization (ILO)
to develop your report, identify the three Asian countries with the highest number of
strikes and lockouts, as well as the total number of lost worker days. What types of
precautions can your company take to prevent interruptions from occurring in these
markets?
Exercise 1 Answer
Search phrase: labor statistics
Resource Name: International Labour Organization (ILO): Labor Statistics Database
Exercise 2
You work in the human resources department at the headquarters of a multinational
Exercise 2 Answer
Search phrase: Expat Explorer
Resource Name: HSBC Expat Zone
