8. More Involvement in Employee’s Personal Lives Changes in Emphasis More involvement for both parent-country & third-country nationals Housing arrangements Health care Remuneration packages Assist children left behind in boarding schools Need for parent-country & third-country nationals decrease as more trained locals become available Resources reallocated to selection, training & management development 8
13. Recruitment & Selection 13 3 categories of employees can be hired – parent country nationals (PCNs), host country nationals (HCNs) & third country nationals (TCNs)
14. Advantages & Disadvantages of Using PCNs Advantages Disadvantages Familiarity with home office, goals, practices Easy organisational control & coordination International exposure to promising managers PCNs special skills & experiences Difficulty in adapting to foreign country Excessive cost of selecting, training & maintaining expatriates Promotional opportunities limited for HCNs May try to impose inappropriate HQ style Compensation differences for HCNs & PCNs Family adjustment problems 14
15. Advantages & Disadvantages of Using HCNs Advantages Disadvantages Familiarity with the situation in host-country Lower hiring costs Locals motivated due to promotional opportunities Responds well to localisation of subsidiary’s operations No language barrier HCNs stay longer in positions Difficulty in exercising effective control over the subsidiary’s operations Communication problems with home office personnel No opportunity for home country’s nationals to gain international experience Limited career opportunity outside the subsidiary 15
16. Advantages & Disadvantages of Using TCNs Advantages Disadvantages Salary & benefit requirements lower than that of PCNs May be better informed about host country environment Truly international managers Host country govt. may resent hiring TCNs May not return to their country after assignment Host country’s sensitivity w.r.t nationals of specific countries 16
17. Expatriate Assignment Life Cycle Determining the need for an expatriate Crisis & Adjustment Reassignment Abroad Repatriation & Adjustment Departure Post-arrival Orientation & Training Selection Process Crisis & Failure Pre-assignment training 17
26. Components of Remuneration Package Factors Influencing Compensation Base salary Benefits Allowances Incentives Taxes Tax equalisation Tax protection Internal Environment Goal Orientation Capacity to pay Competitive strategy Organisational culture Internal workforce composition Labour relations Subsidiary role External Environment Parent nationality Labour market characteristics Local culture Home & host country govts’ role Industry type Competitors’ strategies 26
27. Balance-sheet approach Going-rate approach Lumpsum method Cafeteria approach Regional approach Approaches to Designing the Pay Package 27
28. Repatriation The activity of bringing the expat back to the home country Can cause re-entry shock or reverse culture shock Reasons Posting period over Children’s education Not happy with overseas assignment Failure to do a good job 28 Repatriation Process
29. 29 Types of Assignments Short term assignments
32. Culture – customs, beliefs, norms & values that guide behaviour of people in a society or passed on from one generation to the next Multiculturalism – people from many cultures (countries) interact regularly Benefits Greater creativity & innovation Sensitivity in dealing with foreign customers Possibilities of hiring best talent ‘Superorganisational culture’ Universally acceptable HR policies & practices Functions of IHR manager Possess strong personal identity Have knowledge of beliefs & values of different cultures Display sensitivity Communicate clearly according to the cultural group Cultivate cosmopolitan outlook & attitudes Multiculturalism 32
