Chapter 16

Hiring and Managing

Employees
 Chapter Preview

• List the pros and cons of each staffing policy

• Identify the key international recruitment and
selection issues
• Explain international training and development
programs
• Discuss the international compensation of
managers and workers
• Describe labor-management relations globally

© Prentice Hall, 2008 International Business 4e Chapter 16 - 2

 International H.R.M.

Expatriates
Citizens of one country who are living
and working in another country

Recruitment and selection

Training and development
Often modified Compensation
Labor relations
© Prentice Hall, 2008 International Business 4e Chapter 16 - 3
 Ethnocentric Staffing

Individuals from home country manage operations abroad

+ Tight control over subsidiaries

+ Locally qualified people not always available
Advantages
+ Re-create local operations in home-office image
+ Interests of home office may be better protected

– Relocations are expensive

Disadvantages
– Create “foreign” image for the business

© Prentice Hall, 2008 International Business 4e Chapter 16 - 4

 Polycentric Staffing

Individuals from host country manage operations abroad

+ Responsibility on those knowing local business

Advantages + Avoid expensive relocations from home nation

Disadvantages – Potentially lose control of subsidiary

© Prentice Hall, 2008 International Business 4e Chapter 16 - 5

 Geocentric Staffing
Best-qualified individuals, regardless of nationality,
manage operations abroad

+ Develop global managers who can adjust

Advantages easily to any business environment

Disadvantages – These individuals command high salaries

© Prentice Hall, 2008 International Business 4e Chapter 16 - 6

 Tips for Small Businesses

Expanding internationally can severely

strain the resources of small firms:

Don’t entrust local operations solely to U.S. expatriates

Local contacts don’t guarantee contracts

Treat employees abroad as you want to be treated

Employ the Web in your talent search

© Prentice Hall, 2008 International Business 4e Chapter 16 - 7

 Human Resource Planning

Forecasting human resource needs and supply

Phase 1 Phase 2 Phase 3

Develop plan to
Take inventory of Estimate firm’s recruit and select
current human future human people for vacant
resources resource needs and anticipated
new positions

© Prentice Hall, 2008 International Business 4e Chapter 16 - 8

 Recruiting Human Resources

Process of identifying and attracting a qualified

pool of applicants for vacant positions

• Current employees

• Recent college graduates

• Local managerial talent

• Nonmanagerial workers
© Prentice Hall, 2008 International Business 4e Chapter 16 - 9
 Selecting Human Resources
Process of screening and hiring the best-qualified applicants
with the greatest performance potential

 Ability to bridge cultural

differences is key

 Expatriates must adapt

to new ways of life

 Cultural sensitivity raises

odds for success
© Prentice Hall, 2008 International Business 4e Chapter 16 - 10
 Culture Shock

Psychological process affecting people living abroad

that is characterized by homesickness, irritability,
confusion, aggravation, and depression

Stage I:
Thrilling experience
Stage II:
Downward slide
Stage III:
Recovery begins
Stage IV:
Embrace local culture
© Prentice Hall, 2008 International Business 4e Chapter 16 - 11
 Reverse Culture Shock

Psychological process
Methods of
of readapting to one’s
reducing its effects 
home culture 

• Once-natural thoughts and

• Home-culture reorientation
feelings now strange
programs
• Can be more unsettling than
• Career-counseling sessions
culture shock
• Career-development program
• Many companies reabsorb
before posting abroad
expatriates poorly

© Prentice Hall, 2008 International Business 4e Chapter 16 - 12

 Cultural Training Methods

© Prentice Hall, 2008 International Business 4e Chapter 16 - 13

 Compiling a Cultural Profile

Background
CultureGrams
Notes
Country
Studies Area
Handbooks

© Prentice Hall, 2008 International Business 4e Chapter 16 - 14

 Employee Compensation

Managerial employees Nonmanagerial workers

Cost-of-living
effects Greater cross-border
investment
Bonus and
tax incentives
Greater labor mobility
Cultural and in some markets
social factors

© Prentice Hall, 2008 International Business 4e Chapter 16 - 15

 Labor-Management Relations

Positive or negative condition of relations between

a company’s management and its workers

• Rooted in local culture

• Often affected by
political movements

• Directly influences
workers’ lives
© Prentice Hall, 2008 International Business 4e Chapter 16 - 16
 Importance of Labor Unions

Can affect Can affect company

selection performance
of a location in a market

Popularity of Union power

emerging markets declining across
in Asia much of Europe

© Prentice Hall, 2008 International Business 4e Chapter 16 - 17

 International Labor Movements

International activities of unions are making progress in

improving treatment of workers and reducing child labor

But generating support

can be difficult because:

• Events in distant lands

difficult to comprehend

• Workers in different
nations often compete
© Prentice Hall, 2008 International Business 4e Chapter 16 - 18
 Chapter Review

• List the pros and cons of each staffing policy

• Identify the key international recruitment and
selection issues
• Explain international training and development
programs
• Discuss the international compensation of
managers and workers
• Describe labor-management relations globally

© Prentice Hall, 2008 International Business 4e Chapter 16 - 19