Welcome to class of International Human Resource Management by Dr. Satyendra Singh University of Winnipeg Canada

1. Welcome to class ofInternational Human Resource ManagementbyDr. Satyendra SinghUniversity of WinnipegCanada

2. Learning Objectives Objectives: • Creating a company “global mindset” • International HRM approaches • Recruitment selection and training • Expatriates • Compensation • Allowances • Bonus • Challenges

3. The Global Mindset • Expatriate • A person living outside citizenship country • Global Mind-set • A mind-set that combines an openness to and an awareness of diversity across markets and cultures with a propensity and ability to synthesize across this diversity

4. Ethnocentric Hiring and promoting employees on the basis of parent company’s home country frame of reference Bias of the home country Top executives get foreign experience Polycentric Hiring and promoting employees on the basis of specific local context of the subsidiary Movement between home and host country uncommon Must give locals to elevated position revoke permit Local supplier preferred Managers unwilling to take promotion Local managers may have their own agenda International HRM Approaches…

5. Regiocentric Hiring and promoting employees on the basis of the specific regional context of the subsidiary Hiring can be from both countries– home or host Problem with third country employees Geocentric Hiring and promoting employees on the basis of ability and experience without considering race or citizenship Best Practices International HRM Approaches

6. Recruitment, Selection and Training… • Parent Country National (PCNs) or Home Country National • Study of language and culture • Host Country National (HCN) • Hired in the host country • Third Country National

7. Recruitment, Selection and Training • Third Country National (TCN) • May accept lower wages and benefits than will employees from the home country • May also come from a culture similar to that of the host country • May have worked for another unit of the IC and be familiar with policies, procedures and people • Common approach in developing countries • May not be welcome by host country • May come from an international agency • Greater use as companies take geocentric view

8. Family Nine of ten expatriate failures family-related Unhappy spouses major reason for early return Company losing a “million-dollar corporate-training investment” in executive Expatriates

9. Language Training • Language Trap • International business person speaks only home language • English language has become lingua franca • Chinese new “hot” language to know

10. Expatriate Services… • Health care programs to assist companies and expatriates with • Claims administration • Language • Translations • Currency conversions • Service standardization • www.ExpatExpert.com • www.branchor.com

11. Expatriate Services • Banking services • Online, 24-hour assistance • Training • Culture and language • House hunting, utilities hook up, grocery and hardware shopping, long-distance care for relatives, schools, organizations, and cultural items

12. Compensation • Salaries • Paying home country nationals the same salaries as their domestic counterparts • permits worldwide consistency • bonuses • Increasing use of third country nationals- often treated like PCNs • Trend to pay HCNs same base

13. Housing Allowance Permits executive to live at same standard as at home Cost-of-Living Allowance Based on differences in price of food, utilities, transportation, entertainment, clothing, personal services, and medical expenses as compared to home Allowances for Tax Differentials Ensures expatriates will not have less after-tax pay at home Allowances…

14. Education Allowances Insures children receive education equal to that at home Moving and Orientation Allowances Household effects and language instruction Allowances

15. Bonuses • Bonuses • Expatriate employee compensation payments in addition to base salary and allowances because of hardship, inconvenience, or danger • Bonuses include • Overseas premiums • Contract termination payments • Home leave reimbursement

16. Compensation Packages • For expatriate employees, packages incorporate many types of payments or reimbursements and must take into consideration exchange rates and inflation

17. Compensation Packages Can Be Complicated • Allowances and percentage of base salary are usually paid in host country currency • Percentage usually 65 to 75 percent, with remainder banked where employee directs • What Exchange Rate? • Must be chosen • More difficult in countries with exchange controls and nonconvertible currencies

18. Compensation of Third Country Nationals • Trend toward applying the same compensation plan to third country nationals as home country expatriates • Problems can arise in • The calculation of income tax differential when American expatriate compared with expatriate from another country • Home leave bonus

19. International Status • Entitles expatriate employee to allowances and bonuses applicable to the place of residence and employment • Perks • Compensate executives while minimizing taxes • Private pension plan • Retirement payment • Life Insurance • Hidden slush funds (can be illegal) • Club membership • Company house • Foreign affiliate directorship