Human Resource

Management
TWELFTH EDITION

GARY DESSLER
BIJU VARKKEY

Part 5 | Employee Relations

Chapter
17
Managing Global Human Resources
Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e
 After studying this chapter, you should be able to:

1. List the HR challenges of international business.

2. Illustrate how intercountry differences affect HRM.
3. Discuss the global differences and similarities in HR
practices.
4. Explain five ways to improve international assignments
through selection.
5. Discuss how to train and maintain international
employees.

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–2
 HR and the Internationalization of Business
• The Global Challenges
 Coordinating market, product, and production plans
on a worldwide basis.
 Creating organization structures capable of
balancing centralized home-office control with
adequate local autonomy.
 Extending HR policies and systems to service
staffing needs abroad.

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–3
 Challenges of International HRM
• Deployment
 Easily getting the right skills to where they are
needed, regardless of geographic location.
• Knowledge and Innovation Dissemination
 Spreading state-of-the-art knowledge and practices
throughout the organization regardless of their origin.
• Identifying and Developing Talent on a Global
Basis
 Identifying those who can function effectively in a
global organization and developing their abilities.

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–4
 Intercountry Differences Affecting HRM

Cultural Economic
Factors Systems

International
Human Resource
Management

Legal and Industrial

Relations Factors

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–5
 Global Differences and Similarities
in HR Practices

Personnel
Selection
Procedure

International Purpose of
Use of Pay
Incentives
Human Resource Performance
Management Appraisal

Training and
Development
Practices
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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–6
 How to Implement a Global HR System
• Best practices for making a global HR system
more acceptable to local managers:
1. Remembering that global systems are more
accepted in truly global organizations.
2. Investigating pressures to differentiate and
determine their legitimacy.
3. Working within the context of a strong corporate
culture is best.

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–7
 A Global HR System (continued)
• Best practices for developing a more effective
global HR system:
 Form global HR networks that make local HR
managers a part of global teams.
 Remember that it’s more important to standardize
ends and competencies than specific methods.
• Best practices for implementing the global HR
system:
 Remember, “You can’t communicate enough.”
 Dedicate adequate resources for the global HR effort.

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–8
 Staffing the Global Organization
• International staffing: Home or local?
 Expatriates (expats)
 Home-country nationals
 Third-country nationals
• Offshoring
 Having local employees abroad do jobs that the
firm’s domestic employees previously did in-house
• Offshoring Issues
 Effective local supervisory/management structure
 Screening and required training for locals
 Local compensation policies and working conditions
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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–9
 Global Demand for Indian Talent
 Indian professionals sought by global firms.
 IITs, IISc, IIMs, lead the group.
 Not all graduates are employable.
 There are also cases of exploitation due to unfair
contracts. The Government of India has
mechanisms to address such issues.

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–10
 Staffing the Global Organization (continued)

Top Management Values

Ethnocentric

International
Staffing Polycentric
Policy
Geocentric

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Authorized adaptation from the United States edition of Human
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 Staffing the Global Organization (continued)

Inability of Spouse
Personality
to Adjust

Personal
Why Expatriate Inability to Cope
Assignments with Overseas
Intentions
Responsibilities
Fail

Family Lack of
Pressures Cultural Skills

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–12
 Staffing the Global Organization
(continued)
Realistic Previews

Careful Screening

Helping Expatriate
Improved Orientation
Assignments Succeed

Cultural and Language Training

Improved Benefits Packages

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–13
 Selecting Expatriate Managers
• 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.
• Realistic Previews
 The problems to expect in the new job, as well as the
cultural benefits, problems, and idiosyncrasies of the
country.

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–14
 Orienting and Training Employees on
International Assignment
• There is little or no systematic selection and
training for assignments overseas.
• Training is needed on:
 The impact of cultural differences on business
outcomes.
 How attitudes (both negative and positive) are
formed and how they influence behavior.
 Factual knowledge about the target country.
 Language and adjustment and adaptation skills.
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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–15
 Trends in Expatriate Training
• Rotating assignments that permit overseas managers to
grow professionally.
• Management development centers around the world
where executives hone their skills.
• Classroom programs provide overseas executives with
educational opportunities similar to stateside programs.
• Continuing, in-country cross-cultural training.
• Use of returning managers as resources to cultivate the
“global mind-sets” of their home-office staff.
• Use of software and the Internet for cross-cultural
training.
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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–16
 Compensating Expatriates
• 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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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–17
 TABLE 17–1 The Balance Sheet Approach (Assumes Base Salary of $80,000)

Brussels, Belgium
Annual Expense Chicago, U.S. (U.S.$ Equivalent) Allowance

Housing & utilities $35,000 $67,600 $32,600

Goods & services 6,000 9,500 3,500
Taxes 22,400 56,000 33,600
Discretionary income 10,000 10,000 0
Total $73,400 $143,100 $69,700

Source: Joseph Martocchio, Strategic Compensation: A

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Human Resource Management Approach, 2nd edition (Upper
Authorized adaptation from the United States edition of Human Saddle River, NJ: Prentice Hall, 2001), Table 12-15, p. 294.
Resource Management, 12/e
17–18
 Incentives for International Assignments
• Foreign Service Premiums
 Financial payments over and above regular base
pay, and typically range between 10% and 30% of
base pay.
• Hardship Allowances
 Payments to compensate expatriates for
exceptionally hard living and working conditions at
certain foreign locations.
• Mobility Premiums
 Lump-sum payments to reward employees for
moving from one assignment to another.
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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–19
 Appraising Expatriate Managers
• Challenges
 Determining who should appraise the manager.
 Deciding on which factors to base the appraisal.

• Improving the Expatriate Appraisal Process

 Stipulate the assignment’s difficulty level, and adapt
the performance criteria to the situation.
 Weigh evaluation more toward the on-site manager’s
appraisal than toward the home-site manager’s.
 If the home-office manager does the actual written
appraisal, use a former expatriate from the same
overseas location for advice.
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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–20
 International Labor Relations

Characteristics of
European Labor
Relations

Content and
Industry-Wide Employer Multiple Union
Scope of
Centralization Organization Recognition
Bargaining

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–21
 Terrorism, Safety, and Global HR
• Taking Protective Measures
 Crisis management teams

• Kidnapping and Ransom (K&R) Insurance

 Crisis situations
 Kidnapping: the employee is a hostage until the employer
pays a ransom.
 Extortion: threatening bodily harm.
 Detention: holding an employee without any ransom
demand.
 Threats to property or products unless the employer makes
a payment.

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–22
 Repatriation: Problems and Solutions
• Problem
 Making sure that the expatriate and his or her family
don’t feel that the company has left them adrift.
• Solutions
 Match the expat and his or her family with a
psychologist trained in repatriation issues.
 Make sure that the employee always feels “in the
loop” with what’s happening back at the home office.
 Provide formal repatriation services when the expat
returns home.

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–23
 KEY TERMS

codetermination
expatriates (expats)
home-country nationals
third-country nationals
offshoring
ethnocentric
polycentric
geocentric
adaptability screening
foreign service premiums
hardship allowances
mobility premiums
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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
17–24