Managing Human Resouces Globally

Managing Human Resources Globally: 

Managing Human Resources Globally Presented By Jyoti Strategic Role In Global Environment

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HR and the Internationalization of Business We are living in a vastly altered world where societal expectations of businesses have changed dramatically. At the cornerstone of the discourses dealing with human resources (HR), corporate social responsibility, corporate governance, and sustainability, are humans—their rights, their aspirations, and advancement. Humans are pivotal to both global corporations‟ survival and the wealth of nations. Never before has the pressure on organizations, to ensure that the basic rights of humans are protected and respected both within them and the communities they operate in, been greater. The purpose of this paper will be to review current worldwide trends and practices of leading corporations (profit and non-profit) in their management of human resources and social responsibility. An examination of the responsibilities of these global corporations will be made, and recommendations for reconciling these dual responsibilities and reshaping global HR practices will be presented. Introduction

INDICATORS OF GLOBALIZATION: 

INDICATORS OF GLOBALIZATION International trade is growing at a more rapid rate than world output Foreign direct investment (FDI) flows have set record levels in recent years Cross-border inter-firm agreements have risen dramatically during the last 20 years Social, economic, and political developments throughout the world have changed the way global business is conducted.

Role of IHRM in global network: 

Role of IHRM in global network Global strategic HRM augments the Importance of resource flexibility, Strategic leadership, Human capital, Technological and manufacturing advances Cooperative synergies between organizational culture and structure

Leadership in Global Network: 

Leadership in Global Network

GLOBALIZATION OF HUMAN RESOURCE PRACTICES: 

GLOBALIZATION OF HUMAN RESOURCE PRACTICES The report examines the changing roles the human resource (HR) function plays in a globally competitive marketplace and identifies the challenges of: Investigate how domestic and international companies conduct HR practices around the world. Determine the top HR priorities for each organization type.

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Determine the challenges that organizations face when trying to globalize their HR function, practices and policies to service staffing need abroad. Determine what organizations are doing to institute a consistent corporate culture across all locations/offices. Creating organization structures capable of balancing centralized home office control wit adequate autonomy.

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International Human Resource Management Cultural Factors Legal and Industrial Relations Factors Economic Systems Major Factors Affect IHRM

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Global Differences and Similarities in HR Practices International Human Resource Management Training and Development Practices Use of Pay Incentives Purpose of Performance Appraisal Personnel Selection Procedure

Global Challenges: 

Global Challenges International companies face many challenges when try to make HR Practices consistent across all the locations/offices.

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Top Three challenges included: Variations in social, political and economic circumstances. Different locations/offices have their own way of doing things are resistant to change. The perceived value of the HR function varies across locations/offices.

Competencies: 

Competencies Relational competence to navigate the global network knowledge base through consensus building, accountability charting, conflict management, performance contracting and innovation management. Managerial competence to design creative human resource allocations, negotiate concerted strategies, and structure multiparty relationships.

Cont…..: 

Cont….. Motivational leadership in incentivizing units to demonstrate and share skills at joint human resource management problem solving. Cross-functional competence in auditing managerial loss of control and difficulties in assessing network accountability in terms of human resource management adaptations.

Best practices : 

Best practices Developed a long – term HR plan to ensure alignment of HR strategies/objectives with corporate objectives. Created centralized reporting relationships around the globe.

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Created centralized reporting relationships around the globe. Standardized assessment, development, and compensation practices.

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Standardized assessment, development, and compensation practices. Introduced practices to regions around the globe and allowed the HR function in each region the autonomy to do job.

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Introduced practices to regions around the globe and allowed the HR function in each region the autonomy to do job. Created global policies/processes for data management, performance management, compensation, education, and development.

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Tied regional accountability to performance management. Shared HR best practices used in certain locations with all other locations. Developed an HR mission statement.

International assignment: 

International assignment Finding, developing, and retaining global leaders tops the priority list of international companies. International, or expatriate, assignments are often used as a way to develop the talent of global leaders.

Sources of employees for international assignment: 

Sources of employees for international assignment Host Country Nationals (HCNs) employees from the local population. referred to as local nationals.

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employees sent from the country in which the organization is headquartered referred to as expatriates. Host Country Nationals (HCNs) Third Country Nationals (TCNs) employees from a country other than where the parent organization’s headquarters or operations are located

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Staffing in global HR

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Individual Self efficacy Relation skill Logistical Help Inability to Cope with Overseas Responsibilities Lack of Cultural Skills Why Expatriate Assignments Fail Personality Personal Intentions Family Pressures (cont’d)

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(cont’d) Realistic Previews Careful Screening Cultural and Language Training Improved Benefits Packages Improved Orientation Helping Expatriate Assignments Succeed

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Selecting Expatriate Managers Interviews For face-to-face interviews found that interviewers had to be trained in cross-cultural differences. Adaptability Screening Assessing the assignee’s (and spouse’s) probable success in handling the foreign transfer. Overseas Assignment Inventory A test that identifies the characteristics and attitudes international assignment candidates should have.

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Cont’d Realistic Previews The problems to expect in the new job, as well as the cultural benefits, problems, and idiosyncrasies of the country. Psychological Testing Psychological tests may be seen as a way of avoiding the subjective bias of other options. I The greater international mobility of candidates has increased the demand for tests to be used on job applicants from different countries.

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Expatriates manager High Probability for Success Strong analytical skills Good language skills Strong desire to work overseas Specific knowledge of overseas culture Well-adjusted family situation Complete support of spouse Behavioral flexibility Adaptability and open-mindedness Good relational ability Good stress management skills

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Low Probability for Success Uncertain technical competency Weak language skills Unsure about going overseas Family problems Low spouse support Behavioral rigidity Inadaptability – closed to new ideas Poor relational ability Weak stress management skills Cont’d

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Culture shock and the expatriate manager Culture Shock – the frustration and confusion that result from being constantly subjected to strange and unfamiliar cues about what to do and how to get it done Does not typically occur during the earliest days of an overseas assignment Communicated to all locations about a common corporate culture.

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Managerial issues like the leadership of the organization is dispersed throughout the global system top management must recognize the impact on the organizational hierarchy. The top management of the organization must recognize that strategic initiatives may be generated by subsidiaries and shared with other subsidiaries rather than having to come from headquarters. Issues

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The governance and control mechanism of the global network organization will need to be modified to allow localized decision-making. The selection process for subsidiary management must be modified to align it with the role of the key subsidiary managers and the modified independence of the subsidiaries Cont’d

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Host country nationals and the global corporations Managers who are host country nationals have distinct advantages over expatriates cultural sensitivity understanding of local employees’ motivations and needs Careful recruitment, selection, and training of HCNs can reduce or eliminate the potential problems with using HCNs

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Expatriates training and development

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Compensating expatriates While developing international compensation policies, a firms seeks to satisfy several objectives: Policy should be consistent with the overall strategy, structure and business need of the multinational

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Policy must work to attract and retain staff in areas of greatest need and opportunities Cont’d Policy should facilitate the transfer of international employees in cost effective manner

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Cont’d The policy must give due consideration to equity and ease of administrations.

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Different approaches in global compensation The “Balance Sheet Approach” Home-country groups of expenses—income taxes, housing, goods and services, and discretionary expenses—are the focus of attention. The employer estimates what each of these four expenses is in the expatriate’s home country, and what each will be in the host country. The employer then pays any differences such as additional income taxes or housing expenses.

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Local Going Rate Approach This can be desirable in high-paying countries such as the US of Switzerland The market rate is also preferred when the assignment is likely to be long term or permanent. The main advantage of this method that it is administratively simpler than the balance sheet. Cont’d

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Hybrid Approach This approach refer variation of the greater of home or host system where a balance sheet is compared to local market rate equivalent. Cont’d

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International Labor Relations Industry-Wide Centralization Content and Scope of Bargaining Employer Organization Multiple Union Recognition Characteristics of European Labor Relations

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Performance evaluation MNCs faced with the demands of integration and control, have to always decide which is most important –the company as a whole or each subsidiary’s short term profitability. Unpredictable Global Environment.

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Time and distance separation. Variability in level of maturity. Communication Gap. Lack of technical knowledge. Lack of domestic management's international experience. Cont’d

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Guidelines to appraise an expatriates Operational language used in the firm Cultural ‘distance’ based often on the region of the world. Stability of the factors affecting the expatriate's performance.

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Be objective in evaluation. Criteria for evaluation of performance. Flexibility in structure strategy to implement change. Some vital criteria for successful performance for manager abroad are: Cont…..

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Inter-personal understanding and respect. Empowerment to share information and delegate resposibility . Team support to help employees cooperate. Cont…..

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Versatility to adjust in new environment. Strategic thinking to grasp changing environment and market possibilities. Relationship management to influence and seek the cooperation of customer, trade union, government institutions and lobby activities. Cont…..

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The Legal and ethical climate of global hrm Business practices that are considered unethical or illegal in the U.S. might be considered part of the national conduct of business in other countries Foreign Corrupt Practices Act of 1977 (FCPA) Employment discrimination

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summary Global human resource management is an important component of an organization’s success in a global marketplace Organizations must be sure that their HRM policies can accommodate a culturally diverse workforce

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Thank you