mpm722-2014-topics 10 and 11

8/10/2019 MPM722-2014-Topics 10 and 11

1/30

CRICOS Provider Code: 00113B

TOPICS 10 and 11:

GLOBALISATION AND

INTERNATIONAL HRM;

IMPROVING HRM

MPM722 - Human Resource

Management

Unit Chair: Dr John Molineux

8/10/2019 MPM722-2014-Topics 10 and 11

2/30


SESSION OVERVIEW

GlobalisationInternational

HRM

Internationalemployeeand work

types

Culturalissues

EvaluatingHRM -Context

Methods ofevaluating

HRM

Employeeengagement

ImprovingHRM

8/10/2019 MPM722-2014-Topics 10 and 11

3/30


SESSION OBJECTIVES

Discuss the impact of globalisation on HRM in MNEs

Define international HRM and outline the differenttypes of employees found in MNEs

Discuss cultural aspects of international HRM

Understand the issues related to measuring andevaluating the HR function

Analyse strategic approaches to improve HReffectiveness

8/10/2019 MPM722-2014-Topics 10 and 11

4/30


PHENOMENON OF GLOBALISATION

Increased volume and complexity of world trade and markets: thegrowth of world trade is faster than the growth of global goods andservices

Global FDI inflows reached a historic high of nearly $2 trillion in

2007, dropped to $1.3 trillion in 2008, as a result of the financialcrisis, now up to over $1.5 trillion.

Today, there are some 82000 TNCs worldwide, with 810,000foreign affiliates. These companies play a major and growing rolein the world economy

Exports by foreign affiliates of TNCs are estimated to account forabout a third of total world exports of goods and services, and thenumber of people employed by them worldwide totalled about 77million in 2008more than double the total labour force ofGermany

(World Investment Report, 2009, 2014)

8/10/2019 MPM722-2014-Topics 10 and 11

5/30


PHENOMENON OF GLOBALISATIONCONT.

Half the employees of the Fordcompany outside the USA

Three quarters of the Phillips workforce outside the Netherlands

Half of Matsushita Electricsemployees outside Japan

Over half of Ericssons staff outside Sweden 5 million Americans are employed by the affiliates of foreign firms

The US firms employ more than 6.5 million people in other countries:3.5 million in Europe and 1.5 in Asia, 1.5 in Latin America

One out of six workers in the UK work for a Japanese company

On average in Australia, the largest business earn nearly a third oftheir income overseas and have almost one third of their assetsoutside Australia, for major mining and industrial companies, thesefigures rise to in excess of 50% in the 2000s.

8/10/2019 MPM722-2014-Topics 10 and 11

6/30


IMPACTS OF GLOBALISATION ONORGANISATION - KEY TRENDS

The problem of hiring quality staff is one of the mainfactors inhibiting the MNC expansion in APEC economies

Conflict between expatriates and their local workforceswas rated as the number one concern in relation to MNCinternationalisation

Many international organisations experience managerialturnover rates between 30-40% p.a.

Job hopping is a major problem for companies operatingin Asia

The issues of higher expense of training v. cheap labour

8/10/2019 MPM722-2014-Topics 10 and 11

7/30CRICOS Provider Code: 00113B

INTERNATIONAL HRM

International HRM: the management of people in aninternational context. This definition of IHRM covers a widerange of human resource issues facing MNEs in different parts

of their organisations. This definition also includes comparativeanalyses of HRM in different countries.

Multi-National Enterprise:An enterprise that conductstransactions in or between two countries, with a system of

decision-making that permits influence over resources andcapabilities, where the transactions are subject to influence byfactors external to the parent country of the enterprise. MNEsmay include for-profit and not-for-profit organisations, of anysize.

8/10/2019 MPM722-2014-Topics 10 and 11


FRAMEWORK FOR IHRM

8/10/2019 MPM722-2014-Topics 10 and 11


Corporate Isomorphism

Influence of mother companyon international HRMpractices

Also called company oforigin effect

Basically, companiesdevelop and build theirdistinctive HRM practicesand then transfer these toforeign environments

IMPACTS OF GLOBALISATION ONHRM PRACTICES OF MNCS

Cross-nat ional Isomorphism

Influence of the mothercountry

Also called country-of-origineffect

Companies develop HR and

other management practicesthat reflect their nationalconditions and then transferthese practices to foreignenvironment

8/10/2019 MPM722-2014-Topics 10 and 11


Global Interco rpo rate

Isomorph ism

Influence of othermultinational companies(MNCs)

Also called MNC or globaleffect

Companies learn and adoptthe best HRM practicesworldwide as a result ofdiffusion of technology, freetransfer of capital

IMPACTS OF GLOBALISATION ON

HRM PRACTICES OF MNCSCONT.

Local Isomorphism

Influence of the host country

Also called national businesssystem effect

Companies' HRM practicesreflect institutional and

cultural conditions in theplace of local operation

8/10/2019 MPM722-2014-Topics 10 and 11


FACTORS INVOLVED IN GLOBAL HR

Model of global HR (Brewster et al, 2005)

Efficiencyorientation

Globalprovision

Evaluation /contracting of

HR

Talent

management

Employeebranding (EVP)

Internationalassignmentsand expats

Managinginternational

workforce

Organizationalcapability

Informationexchange

Corebusinessprocess

Localizationof decision-

making

E-enabledHR

knowledgetransfer

Central HRphilosophy

HRaffordability

Organizational

drivers

HR enablers HR processes Organizational

outcomes

8/10/2019 MPM722-2014-Topics 10 and 11


IHRM STRATEGY

Ethnocentric -cross national/corporate isomorphism The assumption that ones own cultural approach is superior to any

other.

Polycentric - local isomorphism

A staffing approach decentralises human resource management toeach national location, resulting in HCNs or locals occupyingmanagement positions in the local units, while PCNs occupypositions in corporate headquarters.

Regiocentric - local/corporate isomorphism

Developing regional staff for key positions anywhere in the region.

Geocentric - global incorporate isomorphism

Best people sought for key positions throughout organisation

regardless of country location.

8/10/2019 MPM722-2014-Topics 10 and 11


HRM ROLES IN INTERNATIONAL FIRMS

Building HRM - the builder

get basics right - vitally important HR tasks - such as attracting,

motivating and retaining people via HR planning, performance

management, coaching and training and competitive rewards

and social security system, etc.

Realigning HRM - the change partner

a change agent to facilitate change in order to achieve new

strategic goals and the implementation of strategy - including

necessary change of HRM foundations.

Steering via HRM - the navigator

enable the organisation to build future into the present.

8/10/2019 MPM722-2014-Topics 10 and 11


TYPES OF EMPLOYEES IN AN MNE

Parent-country nationals (PCNs)Employees who were bornand live in a parent country (home) countrythe country in which acompanys corporate headquarters is located.

Host-country nationals (HCNs) Employees born and raised in ahost countrya country in which the MNE seeks to locate or has

already located a facility.

Third-country nationals (TCNs) Employees born in a countryother than a parent or host country.

Local-hire foreign managers (LHFMs) Self-initiated

expatriates who seek international careers by moving between countriesas part of their job search.

ExpatriateAn employee sent by his/her company in one country towork in a different country.

8/10/2019 MPM722-2014-Topics 10 and 11


TYPES OF INTERNATIONAL WORK

Global team projectBringing together employees from different locations

to complete a specific team project.

Short-term assignmentsSending employees on assignments, such as athree-month assignment, to a foreign location.

Virtual assignment

Assignments requiring employees in differentlocationsto use information technology to communicate on jobprojects and tasks.

8/10/2019 MPM722-2014-Topics 10 and 11

16/30

8/10/2019 MPM722-2014-Topics 10 and 11


ISSUES ON STRUCTUREHRMIMPLICATIONS

Centralisation vs.decentralisation the extent to which key decisions

are made by parent headquartersor by their subsidiaries

Bureaucratic vs. normativecontrol

the form of control exerted by theparent over the subsidiary

Personalised vs.performancecontrol

Output vs. expatriate control -think global, act local paradox

Mode of operation: Contractual mode

licensing

franchising managing contracts

projects

Cooperative mode

joint ventures

strategic alliance

8/10/2019 MPM722-2014-Topics 10 and 11


THE CULTURAL ENVIRONMENT

CultureA distinct way of life, shared by members of a group orsociety, with common values, attitudes and behavioursthat are transmitted over time in a gradual, yet dynamic,

process.Culture shock

A phenomenon experienced by people who moveacross cultures. They experience a shock reaction (or

psychological disorientation) when exposed to newcultural experiences, because they misunderstand ordo not recognise important cues.

Harvard discussion on managing values across cultures:http://www.youtube.com/watch?v=4DSV1NUGS3o&list=UUWo4IA01TXzBeGJJKWHOG9g&index=43&feature=plpp_video
http://www.youtube.com/watch?v=4DSV1NUGS3o&list=UUWo4IA01TXzBeGJJKWHOG9g&index=43&feature=plpp_videohttp://www.youtube.com/watch?v=4DSV1NUGS3o&list=UUWo4IA01TXzBeGJJKWHOG9g&index=43&feature=plpp_video

8/10/2019 MPM722-2014-Topics 10 and 11



Hofstedesorganisational

cultural dimensions:

Process-oriented vsResults-oriented

Employee-oriented vs Job-oriented

Parochial vs Professional

Open-system vs Closed-system

Loose-control vs Tight-control

Pragmatic vs Normative

Hofstedesnational cultural

dimensions:

Individualism-collectivism

Uncertainty avoidance

Power distance (socialhierarchy)

Masculinity-femininity (task-person)

Long-term orientation Indulgence vs self-restraint

Source: http://www.geerthofstede.nl/

8/10/2019 MPM722-2014-Topics 10 and 11



Assignment/expatriate

failure

The premature return of an

expatriate from an internationalassignment or failure to meet the

key performance objectives of an

international assignment

Acculturation

An individuals adaptation to the

host environment
http://localhost/var/www/apps/conversion/tmp/scratch_4//upload.wikimedia.org/wikipedia/commons/5/52/Emblem_of_the_United_Nations.svg

8/10/2019 MPM722-2014-Topics 10 and 11


EVALUATING HRM - CONTEXT

While HR managers have a need to demonstrate the

costs and benefits of the HR function, too few analysethe return on the organisations HR expenditure.

The HR function must be measured in economic termsand prove its worth by quantifying the value of its

activities.

HR professionals need to articulate how HR activitiesalign with the strategic priorities of the organisation.

Building HR metrics measurement for human performance that enable effective

decisions to be made regarding the HR function and value creationin organisations.

HR metrics at Google:

http://www.shrm.org/multimedia/video/vid_archive/Pages/110324_deegan3.aspx
http://www.shrm.org/multimedia/video/vid_archive/Pages/110324_deegan3.aspxhttp://www.shrm.org/multimedia/video/vid_archive/Pages/110324_deegan3.aspx

8/10/2019 MPM722-2014-Topics 10 and 11


METHODS OF EVALUATING HR

Evaluating the HRclimate:

The quality of the HR climate canbe measured by examining:

employee turnover

absenteeism

health and safety records

employee attitude surveys.

The HR Scorecard:

A competitive edge is gainedby:

building and maintaining

talented people developing supportive

strategies

enacting policies that retainpeople

The HR Scorecard highlights:

cost control

value creation

8/10/2019 MPM722-2014-Topics 10 and 11

23/30


Audit approach Type of assessment of HR effectiveness that involves a review of

customer satisfaction or key indicators (e.g. turnover rate, averagedays to fill a position) related to an HR activity (e.g. staffing).

Analytic approach Type of assessment of HR effectiveness that involves determining

the impact of, or the financial costs and benefits of, a program orpractice.

Types of costbenefit analyses:

Human resource accounting Utility analysis

Analytic tools include:

HR Activity Index Balanced scorecard

Causal chain analysis (employee-customer-profit chain)

METHODS OF EVALUATING HR

8/10/2019 MPM722-2014-Topics 10 and 11

24/30


METHODS OF EVALUATION - THE HRAUDIT

8/10/2019 MPM722-2014-Topics 10 and 11

25/30


EVALUATING EMPLOYEE ENGAGEMENT

The connection that employeeshave with a company and theircommitment to its success

Employees are engaged when theythink, feel and act positively towards

the company they work for:

Rational (Cognitive - Heads)

Emotional (Affective - Hearts)

Motivational (Behavioural -Hands)

(Source: Towers Watson)

HR managers discuss engagement strategies:http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/
http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/http://www.hcamag.com/tv/road-to-retention-employee-engagement-strategies-that-work/1040/128277/

8/10/2019 MPM722-2014-Topics 10 and 11

26/30


IMPACT OF EMPLOYEEENGAGEMENT

Top factors in sustainable

engagement:Involvement (77%) Involving employees in decision

making Encouraging innovative solutions Trusting employees judgment

Efforts to get employee feedbackLeadership (69%) Clear company values Making decisions consistent with

company values Operating with integrity in dealing

with employees

Fair decision makingDevelopment (46%) Adequate job training Have opportunity for personal

development and growth Company retains top talent

Company develops people to fullpotential

8/10/2019 MPM722-2014-Topics 10 and 11

27/30


IMPROVING HRM

Categories of HR activities to review: Transactional activities

The day-to-day transactions such as payadministration, maintaining human resource

information systems and employee services. Traditional activities

Include performance management, learning,recruiting, selection, compensation and industrial

relations. Transformational activities

Include knowledge management, managementdevelopment, cultural change, and strategicredirection and renewal.

8/10/2019 MPM722-2014-Topics 10 and 11

28/30


IMPROVING HR EFFECTIVENESS Through restructuring

The diagram on the next slide depicts how the structure for the

organisation of HR has changed to provide for transformational,

traditional and transactional activities.

Via outsourcing

An organisations use of an outside organisation for a broad set

of services to achieve efficiency and effectiveness.

Reengineering

Review and redesign of work processes to make them more

efficient and improve the quality of the end product or service.

8/10/2019 MPM722-2014-Topics 10 and 11

29/30


IMPROVING HREFFECTIVENESS

8/10/2019 MPM722-2014-Topics 10 and 11

30/30

Source: Adapted from P. Wright, G. McMahan, S. Snell & B. Gerhart, Strategic HRM: Building Human Capital and

Organizational Capability, Technical report, Cornell University, Ithaca, NY, 1998.

OLD AND NEW STRUCTURESFOR THE HR ORGANISATION

mpm722-2014-topics 10 and 11

Documents