1. CHAPTER 9
Global Human Resource Management
Chapter Overview
This is the first chapter in Part 3 of the book. It provides an overview of some of the
issues affecting global human resource management, including: recruiting and selecting
candidates for global assignments, compensation, cross-cultural and language training,
adjustment to host country (culture shock), and repatriation.
Learning Objectives
By the end of the chapter, students should be able to:
1. Describe how strategy and global human resource management practices are related
2. Define the different types of emerging assignments for global managers
3. Identify the reasons many organizations are increasingly turning to short-term and
traveling global assignments
4. Discuss the challenges associated with recruiting, selecting, training, compensating,
and appraising expatriate managers and employees
5. Understand how increases in global competition and cross-border inter-firm
agreements are shaping the nature of global human resource deployment in the early
part of the 21st
century
Barriers to Student Understanding
Students should have no difficulty understanding the information or concepts in this
chapter.
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2. Lecture Outline
Paragon-Mart’s Deployment of Global Assignees
Introduction to Global Human Resource Management
Strategy and Global HRM Fit
Human Capital
Resource-Based View of the Firm
Global Assignments
Types of Global Assignees
Identification of Knowledge, Skills, Abilities, and Other Characteristics
Recruiting Potential Global Assignees
Government Restrictions
Regional Trade Agreements
E-Recruiting
Realistic Job Previews
Selecting the Best Candidate
Compensating Global Assignees
Types of Compensation Approaches
Allowances in Expatriate Pay Packages
Does One Size Fit All?
Cross-Cultural and Language Training
Types of Training
Which Approach to Use?
Adjustment in the Host Country
Culture Shock
Types of Adjustment
Poor Adjustment and Its Consequences
What Influences the Adjustment Process?
Repatriation
Repatriate Turnover
Ways to Improve the Repatriation Process
Labor Relations and the Global Corporation
Conclusion
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3. Key Terms
Students will be introduced to the following key terms:
balance-sheet
approach
Type of compensation plan for expatriates in which pay is
adjusted so that the financial responsibilities the expatriate had
before the assignment are kept at the same level while on
assignment.
culture shock The stressful, accumulated effect of being exposed to unfamiliar
cues and behaviors in another culture. The three stages of
culture shock include: honeymoon, hostile attitude, and
acceptance.
e-recruiting Refers to any activity related to recruiting individuals via the
Internet.
global assignments A position requiring a manager or employee to travel to or live
in one or more countries outside of the country in which
headquarters is located.
going (or local)
market rate
Type of compensation plan for expatriates in which the
expatriate’s pay is based on the compensation received by host
country local nationals.
host-country nationals Employees from the host location in which a global or
transnational organization is operating.
parent-country
nationals
Employees from the country in which the headquarters is
located. Also known as expatriates.
realistic job preview Provides accurate information about the attractive and
unattractive aspects of a global assignment, working conditions,
and location to ensure that potential employees develop
appropriate expectations.
resource-based view of
the firm
Theory of strategic management that argues that sustainable
competitive advantage can be achieved when the organization’s
resources–physical, organizational, or human–are valuable,
rare, hard to imitate, and without substitutes.
third-country
nationals
Employees from a country other than where the parent
organization’s headquarters or overseas operations are located.
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4. Suggested Answers to Review,
Critical Thinking, and Discussion Questions
1. What is the difference between a parent-, host-, and third-country national?
Explain.
Host country nationals are from the host country in which the organization is
operating. Parent country nationals (also known as expatriates) are employees from
the country in which the headquarters is located. Third country nationals are from a
country other than where the parent organization’s headquarters or overseas
operations are located.
2. Compare and contrast an ethnocentric staffing policy with a polycentric staffing
policy.
An ethnocentric staffing approach tends to be utilized when overseas ventures have little
autonomy, strategic decisions are made at headquarters in the parent country, and most of
the key positions at the foreign venture are occupied by parent country nationals. Firms
use this approach in early stages of internationalization and when a firm is establishing a
new business or product overseas and prior experience is critical.
Organizations that rely mostly on HCNs to staff their overseas business operations are
following a polycentric staffing approach. This tends to occur when a multinational
company considers each of its overseas ventures as a unique national entity that possesses
autonomy in decision-making. These overseas ventures tend to be managed by host
country nationals who rarely receive promotions to headquarters in the parent country.
That is, a firm believing in this approach will decentralize on a country-by-country basis;
coordination between overseas ventures will be minimal, and the individual locations will
be responsible for developing their own personnel policies and guidelines.
3. What is a realistic job preview? Why is it important to help a candidate for a
global assignment develop realistic expectations of the job?
A realistic job preview is one in which both the good and bad aspects of a job or an
overseas assignment are presented to a candidate, rather than just the good points.
Candidates who have a realistic expectation of the job are much more likely to be
happy and succeed in the position.
4. Structured interviews tend to be more valid and reliable than unstructured
interviews. Describe the unique characteristics of a structured interview.
During a structured interview, (a) questions are based on a job analysis (a systematic
analysis of the job’s tasks, duties, and responsibilities); (b) the same questions are
asked of each candidate; (c) consistent scoring is applied to each of the candidate’s
responses; and, (d) detailed notes are taken.
5. Identify and describe three typical allowances found in many expatriate
compensation packages.
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5. Financial allowances: Examples include company paid children’s education
allowance, home leave allowance, mobility premium, and assignment completion
bonuses.
Social adjustment allowances: Examples include rest and relaxation leave, language
and cross-cultural training, club memberships, and assistance with locating a new
home.
Family support allowances: Examples include childcare providers, assistance
locating spousal employment, and assistance locating schools for children.
6. Assume you are being sent on a three-year global assignment in which you will
be expected to interact with host-country nationals and speak the host-country
language. Which cross-cultural training methods/techniques would you need to
prepare you for this assignment?
Answers will vary by student, based on their preferred methods of training (lectures,
reading material, videotapes, seminars) and prior international experience. Generally,
students should mention language training and knowledge of the local customs, laws,
economy, and religion, plus a general understanding of the country’s history and
geography.
7. Identify and describe the three stages of culture shock.
The three stages of culture shock are honeymoon, hostile attitude, and acceptance.
The honeymoon stage can last from a few days to six months and is characterized by a
great deal of excitement about being in a new place, eating new types of food, meeting
new and interesting host country nationals, and so on.
The hostile attitude stage begins as soon as the honeymoon stage starts to slip away,
usually when problems start to occur with school, healthcare, shopping,
transportation, telephone systems, and so on. In essence, the host country is blamed
for everything. This is a crisis stage that must be overcome for a successful
assignment.
The acceptance stage begins when the assignee starts to accept and enjoy the host
country and its people for what they are; not better or worse than the home country
culture, just different and interesting in its own right.
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6. 8. What problems can undermine the effectiveness of performance appraisals?
Note: This question should be changed to “What problems can undermine the
successful adjustment to a host culture?
After arriving in the host culture, several factors can hamper the adjustment process,
such as inadequate help with one’s family adjustment. In addition, research indicates
that global assignees that perceive that their companies are supporting them in the
adjustment process (e.g., giving assignees some time off at the start of the assignment
for themselves and their families to get settled), tend to adjust more successfully.
Global assignees’ personalities can also aid or hinder the adjustment process. For
example, one research study found that expatriates who had contact with host country
nationals and possessed the personality trait of openness (i.e., enjoy trying new things,
working with new concepts and ideas, etc.) were better able to adjust to the new
culture. Based on this and similar research findings, selection programs should identify
candidates who possess the personality trait of openness to help ensure a successful
adjustment to the host culture.
9. Why do some repatriates leave the organization after returning from their global
assignment?
A significant percentage of repatriates leave the organization after returning from their
global assignment due to one or more of the following: (a) they have difficulty
rebuilding their professional networks and/or getting their careers back on track, (b)
they miss the autonomy, freedom, and social status they had in the global assignment
(they go from being “big fish/little pond” to “little fish/big pond”, (c) they are often
placed into meaningless “holding pattern” jobs when they first arrive to the home
office until a suitable position opens up, (d) they lose the financial extras they received
while on the global assignment and experience financial shock, (e) family problems like
spouse reemployment and children social integration often lead to family problems.
10. Would you consider taking a two-year global assignment? Under what
conditions would this opportunity be more enticing? Less enticing?
This is a critical thinking and personal choice question; answers will vary by student.
There are no right or wrong answers.
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7. Additional Activities and Projects
1. Employment website evaluation. The purpose of this exercise is to get students to go
through the steps of searching for a job, discover the things that make a job search easier, and
critique the wording of job ads from the viewpoint of a potential applicant.
(a) Have students select a job and a location in which they would be interested, and then search
for the job/location combination through any three of the following employment websites.
www.Monster.com www.StepStone.com (European listings only)
www.HotJobs.com www.Careerbuilding.com
www.Dice.com www.FlipDog.com
www.jobs.com www.jobsonline.com
www.nationjob.com www.hotjobs.com
(b) Ask students to answer one or more of the following questions.
(1) Which site was the easiest to use? Why?
(2) On which site did you find the largest number of matching jobs?
(3) Give an example of one of the best- worded job postings you encountered.
(4) Give an example of one of the best worded job postings.
(5) If you were writing a description of the job that you are most interested in,
what would it say?
(6) What types of features would you add to the employment site search engines
to make it easier to locate the perfect job? Example: A zip code search.
(7) How likely are you to use an employment website to look for a job in the
future?
(8) Which job was the most appealing? Why?
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