Mod 1(3) Training & Development, Performance management, Remuneration, Repatriation & employee relations.

Socio-Political Economic System U.S, U.K, Japan and India a comparative analysis.

Expatriate Selection and Training There can be little doubt that a great contributor to the problems and failure rates of expatriates is the selection and training of expatriates by MNCs. Hixon (1986) reports that U.S. expatriates fail because of three critical factors: (1) they are selected solely on their domestic track record; (2) they lack adequate cross-cultural training; and (3) their family situation is misjudged or is not even considered in the selection process. Other studies [Mendenhall et al., 1987) find that most U.S.-based firms make their expatriate selections based on technical competence, not on the factors noted above, that lead to expatriate failure.
contd.

Unfortunately, the training programmes used by U.S-based MNCs surveyed offer no formalised training at all for overseas postings. A 1986 study by Dunbar and Ehrlich (1986) found that 56% of the responding corporations offered no cross-cultural training to expatriates. That study also found that those cross-cultural programmes that are offered are not comprehensive training programmes, and 57% of them last only one week or less.

Reasons for Training

Management Philosophy and Training: The management philosophy of a company, whether ethnocentric, polycentric or regiocentric influences the type of training. For example, ethnocentric companies will provide all training at the headquarters and these will be designed and delivered by home nationals polycentric. Today, more and more companies are spending substantial amounts of money on training and development of their employees to attain long-term organisational goals. Training programmes are designed and delivered after extensive research and preparation so as to deliver acceptable returns on investment, and to secure sustainable competitive advantage.

Schematic Representation of Training and Development Effective training can prevent many errors and minimise the impact of others. Some of the biggest complaints against expatriates revolved around personal shortcomings in areas such as politeness, punctuality, tactfulness, orderliness, sensitivity, reliability, tolerance,

and empathy.
Recruitment and selection

Training

Development

International team

Pre-departure training

International assignment

Post-departure training

Areas of global training and development: 1. Technical training 2. Functional training 3. Strategic management skills training 4. Soft skills / Human relations training 5. Cross cultural training 6. Language training 7. Pre-departure training 8. Expatriate training 9. Training for short term assignments 10. On the job training assignments 11. Global mind set training 12. Team training 13. Management development

Expatriate Training Components of Effective Predeparture Training Programmes Cultural Awareness Programmes The components of cultural awareness programmes vary according to country of assignment, duration, purpose of the transfer, and the provider of such programmes. Tung, (1981) identified five categories of predeparture training, based on different learning processes, type of job, country of assignment, and the time available: Area studies programmes that include environmental briefing and cultural orientation; Cultural assimilators; Language training; Sensitivity training; and Field experiences.

Preliminary Visits Language Training Language training is a seemingly obvious, desirable component of a predeparture programme. However, there are three interrelated aspects related to language ability that need to be recognized: The Role of English as the Language of World Business Host-Country Language Skills and Adjustment Knowledge of the Corporate Language Practical Assistance Another component of a predeparture training programme is that of providing information that assists in relocation. Practical assistance makes an important contribution toward the adaptation of the expatriate and his family to their new environment. Job-Related Factors We do know from the cross-cultural management literature that there are differences in the way people approach tasks and problems and that this can have an impact on the learning process (Park at al., 1996).

Types of Cross-Cultural Training Tung (1982) Surveyed managers in Europe, Japan and the U.S. and found six major types of cross-cultural training programmes: 1. Environmental briefing is used to provide information about such things as geography, climate, housing and schools. 2. Cultural orientation is designed to familiarise the individual with cultural institutions and value systems of the host country. 3. Cultural assimilators using programmed learning approaches are designed to provide the participants with inter-cultural encounters. 4. Language training is aimed at increasing communication effectiveness. 5. Sensitivity training is designed to develop attitudinal flexibility. 6. Field experience is arranged to make the expatriate familiarise with the challenge of assignment.

Developing International Staff Foreign assignments have long been recognized as an important mechanism for developing international expertisefor both management and organizational development (Ondark, 1985). Many multinationals are conscious that they need to provide international experience to many levels of managers (regardless of nationality) and not just to a small cadre of PCNs. One technique used to develop larger pools of employees with international experience is through short-term development assignment ranging from a few months to several years. Individual Career Development There is an implicit assumption that an international assignment has per se management development potential; perceived career advancement is often a primary motive for accepting such postings (Dowling, 2001). Attempts to illustrate a sequence that may be common to all expatriatesPCNs as well as HCNs who accept assignments to either the parent operations, or to other subsidiaries (thus becoming TCNs).

PERFORMANCE: MNCs expect foreigners to perform distinctly and create, contribute and add significant value to the organisational activities. The expectations are diversified and varied widely. Employees also aim to making multi faceted and varied contribution to the stake holders and organisational goals and objectives. Crucial aspects of Performance Management are a. Organisational need b. Strategic requirements c. Customer preferences

CHALLENGES in Performance Management: 1.Total company v/s part of it 2. Uniformity of data of performance 3. Environmental variations 4. Validity of performance creteria 5. Time and distance variations 6. Varied levels of maturity 7. raters competence 8. Rater bias - including halo effect, error of central tendency, leniency &strict ness bias, personal prejudices, and recency effect 9. Host environment 10 cultural adjustment 11. Uniformity of data of performance

AREAS REQUIRED TO BE APPRAISED: 1. The CEO 2. Structure producer 3. Trouble shooter 4. Operative 5. The strategist 6. The consultant 7. The innovator 8. Skill transferor

Main areas to be appraised:

1. a. b. c. d. e. f. g. Parent country nationals Role perceptions from PCNs Subsidiary expectations from PCNs Organisational roles of the subsidiary Host countrys culture Culture of parent companys country Organisational culture of parent company Parent companys expectations from the PCNs

2. Third country nationals a. Role perception of TCN b. Subsidiarys expectations from TCNs c. Organisational norms of subsidiary d. Host countrys culture e. Culture of org where TCN worked earlier f. Culture of TCNs country g. Organisational culture of the parent company h. Parent companys expectations from TCNs

3. Host country nationals

a. b. c. d. e.

Role perceptions of HCN Subsidiary expectations from HCN Organisational culture of the subsidiary Organisational culture of Parent country Parent companys expectations from HCN

SYSTEM / PROCESS OF PERFORMANCE APPRAISAL: 1. Establish performance standards seperately for each category of employees like PCNs, TCNs, HCNs, short term assignees, long term assignees, immigarents and returnees. 2. Communicate standards / expectations to employees as well as evaluators 3. Deciding upon performance appraisal formats 4. Measuring actual performance 5. Frequency of appraisal 6. Adjust actual performance due to environmental influence 7. Compare the adjusted performance with that of others and previous contd..

8. Compare the actual performance with standards and find out deviations, if any 9. Feed back to the appraisee 10. Suggest changes in job analysis and standards, if any 11. Consider the appraisal results for contract renewal and promotion 12. Plan for employee training and development

Problems of Performance Appraisal: 1. Content bias 2. Ineffective rators 3. Recency effect 4. Distance work places 5. Appraisal forms 6. Failure of superiors in conducting appraisal interviews 7. Use of performance data

How to make Performance Appraisal effective? 1. Reliability and validity 2. Appraisal should be relevant 3. Customisation of Appraisal forms 4. Consensus of the appraiser and appraisee 5. Open and continuous communication 6. Sensitive to ground realities 7. Appraisees access to results 8. Easy to operate 9. Raiters knowledge of the appraisee

Managing Expatriates An expatriate is a home country or third country national who is assigned to a country operational location. Most expatriates are managers or highly-trained technical experts. Studies by Gross and Kujawa (1992) were conducted to identify the major advantages and disadvantages of using expatriates. Among the advantages of using expatriates are: Expatriates usually have the necessary technical and managerial skills. Expatriates enhance communication between the parent company and the foreign subsidiary. Expatriates are more familiar with corporate culture, enhancing parent- subsidiary relations. Assigning expatriates to foreign posts is an essential ingredient of their management-development programme and their progress toward becoming an international manager.

The disadvantages of using expatriates include: The total compensation paid to the expatriate is usually much greater than that paid to a host country national. Host country nationals do not require special training in adaptation to the local culture. The use of host country nationals is consistent with promote-from-within policies espoused by many MNCs. Host country nationals do not require work permits. Using host country nationals enhances the firms local image. Using expatriates with special employment contracts may block promotional opportunities for locals and be in violation of local equal employment opportunity regulations.

Tung R.L. (1987) studied the factors that contribute to expatriate success or failure, and identified eighteen variables that affect success. She groups them into five general categories: job competence, personality traits, relational abilities, environment variables and family variables. She also highlights the importance of family considerations in cultural acculturation. Taken together the expatriate selected must meet six criteria: They must be willing and motivated to go overseas; They must be technically able to do the job; They must be adaptable; They must have good interpersonal skills and be able to form relationships; They must have good communication ability; and They must have supportive families.

Expatriate failure What do we mean by expatriate failure? The term expatriate failure has been defined as the premature return of an expatriate (that is, a return home before the period of assignment is completed). What is the magnitude of the phenomenon we call expatriate failure? Harzing (1995) questioned the reported failure rates in the US literature, claiming that there is almost no empirical foundation for the existence of high failure rates when measured as premature re-entry. What are the costs of failure? These can be both direct and indirect. Direct costs include airfares and associated relocation expenses and salary and training. The invisible or indirect costs are harder to quantify in money terms but can prove to be more expensive for the company.

 The Roles of the Expatriate The reasons for using expatriates are not mutually exclusive. They do, however, underpin expectations about the roles staff play as a consequence of being transferred from one location to another country. We shall now take a look at these roles. The Expatriate as an Agent of Direct Control The Expatriate as an Agent of Socialization Expatriates as Network Builders Expatriates as Boundary Spanners Expatriate as Language Nodes