human resource and employee motivation comparative analysis

7/31/2019 Human Resource and Employee Motivation Comparative Analysis

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Human Resource Selection and

Development Across Cultures


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HUMAN RESOURCE IMPORTANCE Human Resource Management is an essential part of an organization

Productive for an Efficient workplace

Positive Organizational structure leads to companys success Motivation Techniques and for reduction of turnovers

Monetary Benefits

Competitive Salary

Good benefits Promotion etc.

Non Monetary Benefits

Training

Education opportunities

Daily Meals at reduced cost / Free Meals etc

Company should always be on a lookout to find out how employees feel.

Due to Globalization, individual talent is being encouraged / recognized.

For MNC, selection and development of HR is very important.

Tacit Knowledge Knowledge that cannot be formalized in manuals.

HR Issues with International Assignments are critical for MNCs.


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SOURCES OF HUMAN RESOURCEMNCs can use four basic sources for filling overseas positions:

(1) Home-Country Nationals (Expatriates):

Expatriate managers are citizens of the country where the MNC is headquartered

Sometimes called Headquarters Nationalsor Expatsare deployed at Keypositions in foreign country for e.g. US and European companies send Expats toIndia etc.

Most common reason for using home-country nationals (expatriates) are: To get the overseas operation under way

Provision of Technical Expertise

Maintain Financial Control over the foreign operation

However in some instances, host country nationals may be better suited like: In developing countries

Reliance on Customer base is high Previously Expatriates were mostly males, however Female expatriates are

increasingly growing.

Trend in Home-Country Nationals is decreasing, even in Japanese companies,because:

As MNCs are increasing, it is becoming difficult to have more talented personals. Local Managers are becoming more qualified

High cost is associated in keeping Expats overseas

Change in Policy


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SOURCES OF HUMAN RESOURCE(2) Host-Country Nationals:

Local managers (usually at middle and low level) are hired by the MNC

They are familiar with the culture

They know the language

They are less expensive than home-country personnel

Hiring them is good public relations

Exception in staffing pattern occurs when government intervenes ,For e.g.:

In Brazil, 2/3 of employees in a foreign subsidiary have to be Brazilians. In European countries, home country managers remain in top positions for the rest

of careers. They are not transferred back to Headquarter.

However in U.S, Managers are transferred back or shifted to other subsidiaries.

(3) Third-Country Nationals (TCNs): Managers who are citizens of countries other than the country in which the MNC is

headquartered or the one in which the managers are assigned to work by theMNC.

Advantages of having TCNs can be:

These people have the necessary expertise for the job Salary Package may be less than a home country national

May speak multiple languages and may be a multi-cultural individual


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SOURCES OF HUMAN RESOURCE(4) Inpatriates:

Individuals from a host country or a third-country national who are assigned towork in the home country

Advantages of having Inpats in top management or Board of Directors can be: To recognizes the need for diversity at the home office

Help MNCs better develop their global core competencies

MNCs can subcontract or outsource to take advantage of lower human resource

costs and increase flexibility

Sub Contracting and Outsourcing:

Sub Contracting

Employee hired through a third partyorganization for the MNC

Offshore Outsourcing

Hiring of temporary workers from

abroad on special visas.


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REASONS FOR OUTSOURCING WORK


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SELECTION CRITERIA FOR

INTERNATIONAL ASSIGNMENTS Organizations examine a number of characteristics to determine

whether an individual is sufficiently adaptable. Work experiences with cultures other than ones own

Previous overseas travel Knowledge of foreign languages

Recent immigration background or heritage

Ability to integrate with different people, cultures, and types of businessorganizations


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INTERNATIONAL ASSIGNMENTSAdaptability to Cultural Change

Those who were best able to deal with their new situation haddeveloped coping strategies characterized by socio-cultural and

psychological adjustments including: Feeling comfortable that their work challenges can be met

Being able to adjust to their new living conditions

Learning how to interact well with host-country nationals outside of work

Feeling reasonably happy and being able to enjoy day-to-day activities

Physical and Emotional Health

Overseas Managers must have good physical and emotional Health.

Should have ability to withstand cultural shock Marital Status

In Middle East, Europe etc. middle age men are best suited for jobs

In Saudia, Africa etc. young people are preferred.


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INTERNATIONAL ASSIGNMENTSAge, Experience and Education

Young managers are eager for International assignments.

They are more worldly and can handle pressure.

However, they are least developed in management experience.

U.S, European and Russians managers are young and can be easily be consideredfor International assignments.

Many companies prefer minimum level of degree / qualification.

In Arab countries, International assignments are based on experience. InJapan and China, trend for experienced and senior age managers stillprevails.

Language Training

Not much attention Is given by MNC on language training.

U.S. managers are worst in the language area.

Executives from Japan, Eurpoe and Brazil placed high priority on speakingmore than one language.

Asian countries are following the same trend and consider multi language asa competitive edge.


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INTERNATIONAL ASSIGNMENTSMotivation for a Foreign Assignment

Employee must have a sense of mission.

Desire for adventure or pioneering spirit, risk taking are acceptable reasons forwanting to go abroad.

Other factor can also include opportunity to improve self economic status.

U.S. Managers lead; as they are self motivated society with individualist approachtowards management

Family work issues / Dependants

If Family is not happy, it can effect the expatriates performance.

Most MNCs, especially in Singapore, MNCs also interview the spouse.

Adaptability Screening:Process to evaluate how well the family is likely to stand

up to the rigors and stress of overseas life. Unmarried employees are more willing to accept foreign assignments as

compared to married employees with children.

Leadership Ability

Leadership:Ability to influence people to act in a particular way. Process determines if the manager was an effective leader in the home country.

Variables Include Maturity, Emotional Stability, Communication, Creativity, Health etc.


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MANAGER PREPARATION FOR INTERNATIONAL

ASSIGNMENTS GLOBALLY APPLIEDApplicants better prepare themselves for international assignments by carrying outthe following three phases:

Phase 1: Focus on self-evaluation and general awareness include the followingquestions:

Is an international assignment really for me?

Does my spouse and family support the decision to go international?

Collect general information on available jobs.

Phase 2: Conduct a technical skills assessment Do I have the technical skills required for the job?

Start learning the language, customs, and etiquette of the region you will be posted

Develop an awareness of the culture and value systems of the geographic area

Inform your superior of your interest in the international assignment.

Phase 3:

Attend training sessions provided by the company

Confer with colleagues who have had experience in the assigned region

Speak with expatriates and foreign nationals about the assigned country

Visit the host country with your spouse before the formally scheduled departure (ifpossible)


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INTERNATIONAL HUMAN RESOURCE

SELECTION PROCEDURES Two common selection procedures are:

Tests and Interviews

Adjustment Model

Tests and Interviews Testing is not a popular method for selection as compared to Interview.

Interviewing spouse along with the candidate for Management positionforinternational assignments is a common norm both is U.S. and Germany.

However for Technical position, this percentage is low. Adjustment Process

Anticipatory Adjustment Training: Include cross cultural seminars or workshops.

Previous experience: Expats with working experience in same cultures before.

In-country Adjustment Individuals ability to adjust effectively

Ability to maintain a positive outlook, interact well with host nationals, and toperceive and evaluate the host countrys cultural values and norms correctly

Clarity of expatriates role in the host management team

Expatriates adjustment to the organizational culture Non-work matters

Socialization Tactics: Whos who and Whats what


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THE RELOCATION TRANSITION CURVETHE RELOCATION TRANSITION CURVE


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COMMON ELEMENTS OF COMPENSATION

PACKAGES

Compensating expatriates can be difficult because there are manyvariables to consider

Most compensation packages are designed around four commonelements:

Allowances Taxes

Base Salary Benefits

Other than the above, special Incentives programs are also

designed to keep Expats motivated


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RELATIVE COST OF LIVING IN SELECTEDRELATIVE COST OF LIVING IN SELECTED

CITIESCITIES


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PACKAGESBASE SALARY

Amount of money that an expatriate normally receives in the home country

Base salary for U.S., Japan and European upper-middle manager is around $

175,000 annually. Exchange rate effects real wages

Expatriate salary is set according to base pay and currency of home country

German Manager working in a U.S based company in India will have salary equivalentto German Market.

BENEFITS

Approximately 1/3 of compensation for employees is Benefits. For e.g. extravacation time for U.S. employees, Discount Coupons, etc.

Issues regarding compensation of expatriates include: Should host-country legislation regarding termination of employment affects employee

benefits entitlements?

Is the home or host country responsible for the expatriates social security benefits?

Should benefits be subject to the requirements of the home or host country?

Which country should pay for the benefits? Should other benefits be used to offset any shortfall in coverage?

Should home-country benefits programs be available to local nationals?


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PACKAGESALLOWANCES

Cost-of-Living Allowance Payment for differences between the home country and the overseas

assignment. Designed to provide the expatriate the same standard of living enjoyed in

the home country

Relocation Allowance:

House shifting House Allowance

Predetermined cost for house

Residence provided by MNC

Education Allowance Tuition fee, enrollment fee, books, transportation of Expats children

Hardship Allowance To induce expats to work in hazardous areas / disputed areas

Hardship Premium is allocated to Expats of China, Afghanistan etc.

Related Allowances may also include club memberships etc.


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PACKAGESINCENTIVES

A growing number of firms have replaced the ongoing premium for

overseas assignments with a one-time, lump-sum premiumTAXES

Tax equalization

An expatriate may have two tax bills for the same pay

Host country

U.S. Internal Revenue Service

MNCs usually pay the extra tax burden


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TAILORING THE COMPENSATION

PACKAGES Senior Level Managers in China are paid around 4 times as much as junior staff U.S. senior level managers salary is much higher as compared to Europe and

Asian counterparts

Balance-sheet approach Ensure the expatriate does not lose money from the assignment.

Complementary approach Negotiate to work out an acceptable ad hoc arrangement.

Localization

Pay the expatriate a salary comparable to local nationals Common with young professionals who are given a long term overseas

assignment e.g. Asian managers going to Iraq.

Lump sum method Give expatriate a pre determined lump sum amount of money

Expat will chose himself how and when to spend itCafeteria approach Compensation package that gives the individual a series of options Married Expats may chose Education allowance, whereas Unmarried Expats can

chose a Chauffer driver car

Regional system Set a compensation system for all expatriates who are assigned to a particular

region Expats for Europe will have same salary slab.


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HUMAN RESOURCE MANAGEMENTHUMAN RESOURCE MANAGEMENT

PRACTICES IN DIFFERENT COUNTRIESPRACTICES IN DIFFERENT COUNTRIESTraining is the process of altering employee behavior and attitudesin a way that increase the probability of goal attainment.

Common topics covered in cultural training are social etiquette,

customs, economics and business etc.


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IMPACT OF OVERALL MANAGEMENT

PHILOSOPHY ON TRAININGFour basic philosophic positions:

(1) Ethnocentric MNC:

Stresses nationalism and often puts home-office people in charge of keyinternational management positions

In China, Japan etc.

(2) Polycentric MNC:

Places local nationals in key positions and allows these managers toappoint and develop their own people

In Singapore, Australia

(3) Regiocentric MNC:

Relies on local managers from a particular geographic region to handleoperations in and around that area

Advertising managers from subsidiary in Italy, Germany and France will cometogether to formulate advertising campaign for overall EU countries. E.g. Gillette

(4) Geocentric MNC:

Seeks to integrate diverse regions of the world through a global approach todecision making


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CROSS-CULTURAL TRAINING PROGRAMS

Steps in cross-cultural training programs: Local instructors and a translator observe the pilot training

program or examine written training materials Educational designer debriefs the observation with the

translator, curriculum writer, and local instructors

The group examines the structure and sequence, ice breaker,

and other materials to be used in the training The group collectively identifies stories, metaphors,

experiences, and examples in the culture that fit into the newtraining program

The educational designer and curriculum writer makenecessary changes in training materials


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GLOBAL LEADERSHIP DEVELOPMENT

The Global LeadershipProgram (GLP)

A consortium of leading U.S.,European, and Japanesefirms, global faculty, andparticipating host countries Provide an intensive

international experience

Develop a global mindset Instill cross-cultural

competency

Provide an opportunity for

global networking

human resource and employee motivation comparative analysis

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