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MHR523 Chapter #17 Notes.doc

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Human Resources
MHR 523
Pat Sniderman

Chapter 17 Global HR Issues • Expatriates Employees who are citizens of the country where the parent company is based, and are sent to work in another country • Locals, Host or On-site Citizens of countries where they are working • Third Country Nationals Citizens of a country other than the host or parent country • Home-country home office, or home-site employees are those who work where the parent company is based Explain how inter country differences have an impact on HRM • Cultural Factors o Individualism- Collectivism- The implications they will face will be whether they chose to emphasize individual accomplishments or collective accomplishments. o Power Distance- illustrates that the distribution of power may be exercised very differently according to different backgrounds. • Economic Systems & Legal Systems o Free enterprise versus socialist systems o Vast differences in labor laws and enforcement worldwide, especially: o Employee termination and severance requirements o Health and safety laws • Labour Cost Factors & Industrial Relations Factors o Different Perceptions re. Investment in human capital i.e. training o High labor costs lead to increased focus on efficiencies and increasing employee performance Global Relocation HR Challenges & Why Expat Assignments Fail • Candidate identification, assessment, and selection o Required technical and business skills, key traits to consider for global assignments include cultural sensitivity, interpersonal skills, and flexibility • Cost projections o Average cost of sending an employee and family on an overseas is 3 or 5 times more than employee’s pre-departure salary o Quantifying total costs for a global assignment and deciding whether to use an expatriate or a local employee are essential in the budgeting process • Assignment letters o Assignee’s specific job requirements and remuneration, vacation, home leave, and repatriation arrangements will have to be documented and communicated in an assignment letter • Compensation, benefits, and tax programs • Relocation assistance o Assign maintenance of a home and automobiles, shipment and storage of household goods • Family support o Cultural orientation, educational assistance, and emergency provision are just some of the matter to be addressed before the family is moved abroad Why do expat assignments fail? - Expatriate Assignment Failure o early return of an expatriate from a global assignment - given the fact that family issues are the number one cause of expatriate assignment failure, it is important that the employer understand just how unhappy and cut off the expatriate manager’s spouse can feel in a foreign environment - the employer can provide realistic previews of what to expect, careful screening, improved orientation, and improved benefits packages, as well as other solutions Improving Global Assignments through Effective Selection Explain how to improve global assignments through employee selection • Selecting global managers for expatriate assignments means screening them for traits that predict success in adapting to what may be dramatically new environments. Screening includes RJP, pre- assignment visit, paper-and-pencil tests • Canadian companies have reported lower failure rates for expatriates relative to other countries (country’s diversity), particularly the U.S, which has a failure rate of 40 to 50%) • Global Staffing Policy Assumptions o Ethnocentric: Home-country managers are superior to host country. All key management positions are filled by parent-country nationals o Polycentric: Only host-country managers can understand the culture of the host-country market. Foreign subsidiaries are staffed with host-country nationals, home-office headquarters staffed with parent-country nationals o Geocentric: Management candidates must be searched for globally, and the best manager for any specific position may be found in any country Maintaining Global Employees through Effective Orientation, Training, & Compensation • Orienting and Training employees for global assignments o cross-cultural training  creating realistic expectations
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