Module 2

IHRM

Employee Hiring

Human Resource Planning

Human Resource Planning consists of developing and implementing plans and programs to ensure that the right number and type of individuals are available at the right time and right place to fulfil organisational needs. (Schuler et al 1992) Involves forecasting human resource needs for the organisation and planning the steps necessary to meet these needs.

THE SYSTEMATIC REVIEW OF HUMAN RESOURCE REQUIREMENTS TO ENSURE THAT:

The Required Number of Employees

With The Required Skills

Are Available When Needed

EFFECTIVE U T I L I Z A T I O N OF HUMAN CAPABILITY

PRODUCTIVITY

GROWTH

ECONOMIC DEVELOPMENT

Two dimensions of HRP

HRP plays a strategic role in deciding organizational objectives and plans. It insight into the provides an organizational capabilities that could be leveraged for developing business plan.

IHRP
HRP is the process of forecasting a MNC s future demand and supply of the right type of people in the right number The HRP process is linked to the business plan of the MNC HRP facilitates the realization organization s objective. of the

IHRP
Is the first component of HRM strategy. All other functional HR activities are derived from and flow out of the HRP process. Has its basis in considerations of future HR requirements in light of present HR capabilities and capacities. Is proactive in anticipating and preparing flexible responses to changing HR requirements. Has both an internal and external focus.

Steps in Recruitment and Selection Process

The recruitment and selection process is a series of hurdles aimed at selecting the best candidate for the job.

The Recruitment and Selection Process

1. Decide what positions to fill through personnel planning and forecasting. 2. Build a candidate pool by recruiting internal or external candidates. 3. Have candidates complete application forms and undergo initial screening interviews. 4. Use selection tools to identify viable candidates. 5. Decide who to make an offer to, by having the supervisor and others interview the candidates.

Environmental Scanning
impact of strategy/goals on diff. units

Involving Line Managers

determining HR needs of departments

H R P P R O C E S S

Forecasting
quantity & quality of personnel needed

Analysis of Supply
matching current HR supply & reqmnt

Plan of Action
recruitment, selection, training, etc.

THE HUMAN RESOURCE PLANNING PROCESS

Strategic Planning HR Planning Comparison of Requirements & Availability Surplus of Workers Restricted Hiring, Reduced Hours, Early Retirement, Layoffs

Forecasting HR Requirements

Forecasting HR Availability Shortage of Workers Recruitment Selection

Demand = Supply

No Action

STAFFING APPROACHES

Staffing
The process by which organisations meet their human resource needs, including forecasting future requirements, recruiting and selecting candidates and orienting new employees.

Staffing Involves
Manpower Planning Recruitment Selection Training Development Performance Appraisal Transfers Promotions.

Staffing Needs
Firms that centralize decision making at headquarters typically favor home-country managers Firms that decentralize decision making to the subsidiary level often employ host country nationals. Since most companies do not fall at one extreme or the other, most companies have a combination of both home and host country managers.

TYPES OF GLOBAL EMPLOYEES

Parent-Country National (PCN) Host-Country National (HCN) Third-Country National (TCN)

Approaches to Staffing
Ethnocentric

Regiocentric

Types Of Internation al Staffing Policy

Polycentric

Geocentric

Ethnocentric
key managerial positions are filled by parentcountry nationals. Consistent with international strategy Disadvantage: cultural myopia cultural differences & environmental differences will be huge and expatriates may not be able to cope up with. Thus resulting in costly management mistakes. e.g., Procter & Gamble Associate with higher incidence of IHRM problems.

Types Of International Staffing Policy Polycentric

 Key positions are filled with HCN s  Host country nationals manage

subsidiaries Consistent with multidomestic strategy Disadvantage: create a gap between home and host operations.

Geocentric or global
 Best managers are recruited from

within or outside the company regardless of nationality.  Help build an informal management network. Disadvantage: may be subject to the immigration policies.

Types Of International Staffing Policy Regiocentric

 Recruiting on a regional basis.  For example, a U.S. based firm could create three regions; Europe, the Americas, and Asia-pacific. European staff would be transferred throughout the European region (say a Briton to Germany, a French national to Belgium, and a German to Spain). Eg:Ford Motor Company.  Disadvantage: produce federalism at a regional rather than a country basis and constrain the organization from taking a global stance.

EXAMPLES
Korean MNC's Hyundai, Samsung , Indian MNC's TCS, Infosys, Wipro. US MNC's GE, Citi corp, Exxon appoint a home country nationals to lead the foreign subsidiary. (Ethnocentric approach) US MNC's P&G, Pepsi, Coca cola. Indian MNCs Ranbaxy appoint a host country executive along with a home country executive to support or vice-versa (polycentric approach).

EXAMPLES
 Nestle, Unilever, HP, Nortel. Appoint the best person for the job irrespective of the nationality (Geocentric approach).  Intel, Microsoft, Oracle, Sun Microsystems. Appoint the best host country national who has worked in the home country or at the headquarters.  Electrolux (the vacuum cleaner company) has for many years attempted to recruit and develop a group of international managers from diverse countries. These people constitute a mobile base of managers who are used in a variety of facilities as the need arises.

Necessary Skills and Abilities for International Managers:

Skills and abilities necessary to work in foreign location: Adaptability Location-specific skills(language etc) Personal characteristics

Skills and abilities necessary to do the job: Technical Managerial Functional

IMPROVED CHANCES OF SUCCEEDING IN AN INTERNATIONAL JOB ASSIGNMENT

Staffing For International Assignment

Today, as businesses globalize, the market for executive talent is also globalizing. Top management teams are increasingly diverse in their members. While most MNCs do not hire new college graduates to take foreign positions immediately, many hire graduates with the intention of sending them abroad in the future.

EXPAT SELECTION

TYPES OF GLOBAL EMPLOYEES

Host-Country National (HCN) Parent-Country National (PCN) Third-Country National (TCN)

Recruitment Methods Using head-Hunters Cross-national advertising E-recruitment International Graduate Program.

Issues in Employee Selection

Linkage between staffing and growth of MNC Staffing orientation

Staffing MNC s

Managing expatriates

Female expatriates

Linkage between staffing and growth of MNCS

Stage in Host Units life cycle
Setting up the host unit (0 to 912months).

Staffing impetus
Usually a geocentric approach, top and Senior management positions is the foocus, slow, micromanaged closely by the parent company, usually work with a retainer-ship arrangement with a international staffing company, key positions could be outright assigned to parent company personnel Recruitment activities step up, processes emulated from local market to get access to local talent, selection criteria focus on very high quality technical competency levels ,

Staffing challenges
Extremely critical phase in the subsidiarys evolution, time consuming, multiple interviewing rounds, expensive as it might involve travel to parent country for final interview and discussions Apply stringent hiring techniques, building a preferred employer brand, offering high-end compensation to attract the desired talent, careful screening to ensure top quality hires Using multiple sourcing vendors and methods, moderated compensation, creating a branding on vocational campuses High process focus on recruitment and selection, stringent entry criteria for lateral hires

Establish the technology team to begin core operations activities (6 18 months). Full blown operations (1.5 3yrs).

Polycentric approach, hiring targets get aggressive, numbers become a critical success determinant for recruitment, quality focus moves to competent people, using global selection tests, fresher hiring Extremely geocentric approach to staffing, focus is on efficiency and this influences somewhat conservative staffing, inward looking processes, headhunting approach is practiced rampantly

Subsidiary consolidation with global goals.

Staffing orientation
Orientation
Ethnocentricism

Approach
Parent company/ country national are employed at all senior and key positions. Local employees fill only lower level and supporting jobs

Advantages
Transfer of parent company goals, objectives and know how /technology Ensures control and coordination with HQ

Disadvantages
Lack of localization of response to host country demands and needs Lack of knowledge of local culture and work methods

Polycentricism

Host country nationals are employed to staff all positions

Familiarity with business practices, socio-economic, political and legal environment Lower cost of staffing Effective localization of the subsidiary's operations

Communication challenges in dealing with parent country personnel Challenges in effective control and coordination over subs operations Lack of parent company nationals to gain international and cross cultural exposure 32

Staffing orientation
Orientation
Geocentricism

Approach
The multinational runs the subsidiary as a independent entity. Focus building a center of excellence at a global level. Hiring the best person for the job .. could be a third country national

Advantages
Globally competent personnel Exposure to global best practices

Disadvantages
Lack of sensitivity to all cultures Tendency to run the subsidiary as a independent unit

Female expatriates
Several reasons account for minimal presence of females in foreign assignments : ~Lack of Motivation: there is a perceived
lack of motivation for female employees to relocate internationally ~Sterotyping : common impression that women are best fit to work in their own coutrnies ~Host Country limitations : certain countries do not encourage women expats.

Female expatriates
Advantages of Female expatriates:
~ Good

Relational Skills ~ Rarity of women expats make them unique ~ Female Role Models will facilitate more female managers entering the pool .

Managing expatriates
~

An expatriate is an individual who works anywhere but not in his or her own country of origin.

increasing globalization more and more employees work overseas and have expats on their payroll. Recruiting expat potential expats:
~
Willingness and

~ With

success

depends

on

identifying

passion for working on overseas assignment

Explore multiculturist, multilinguist, mulitfucntionalist, citizens

of the world and not of one country

Possess

appropriate

(technical/technological)skills

for

the

position overseas

Family background Local laws of host country that determine expat posting.

Managing expatriates: Four Dimensional Framework for expat selection :

Self Orientation
Self confidence Self esteem Mental hygiene

Others Orientations
Expats ability to interact with host citizens Build close relationships Acculturate more easily in over Cultural Toughness Dimension How culturally different is the host country from the expats own country determines the degree of cultural toughness The lesser the difference the lower is the cultural toughness

Perceptual Dimension Ability to understand and appreciate why foreign nationals behave the way they do Ability to make correct attributions about the reasons or causes of host nationals behavior

Managing expatriates: Romen s Model on five predictors for a successful international assignment :
Job Knowledge & Motivation

Family
situation

Relational
Skills

Extra-cultural Openness

Flexibility /Adaptability

Selection Criteria
Technical ability Cross-cultural suitability Family requirements Country-cultural requirements MNC requirements Language.

Factors in Expatriate Selection

Selection Techniques
Screening the applicant s background Testing ability to adapt to new culture and environment Investigate family situation Assess the capacity of the manager to adjust in the said culture Use psychological tests to investigate the overall personality of the candidate Use of database to track international managers Use of international graduate program Using assessment centre.

Expatriate Failure
 The selection process in international firms is particularly important because of the high cost of expatriate failure.  Expatriate failure is the early return of an expatriate manager to his or her country because of an inability to perform in the overseas assignment.  The cost of expatriate failure ranges between $40,000-$250,000.  Expatriate failure rates may be as high as 20-50 percent in many U.S. companies, higher than for either European or Japanese companies.

Reason for Expatriate Failure

US FIRMS JAPANESE FIRMS
Inability to cope with larger overseas responsibilities Difficulties with the new environment Personal or emotional problems Lack of technical competence Inability of spouse to adjust

European Multinationals
Inability of spouse to adjust

Inability of spouse to adjust Managers inability to adjust Other family problems Manager's personal or emotional immaturity. Inability to cope with larger overseas responsibilities

International Assignments: Factors Moderating Performance

Causes of Expatriate Assignment Failure

Reasons For Expatriates Failure

 Spouses in 90% of cases come back early They faces isolation,loneliness,boredom.  Financial package, cost in foreign country may be higher. Example's family overseas in Japan may face such a situation.  Lack of inability to adapt. In host country they have to face uncertainties ,relate with people with different values and beliefs.

Reasons for expatriates failure

Lack of support from HQ. Inadequate preperation,training and orientation prior to assignment. Managers sent on foreign assignments may experience culture shock, a psychological phenomenon that may lead to feelings of fear, helplessness, irritability, and disorientation.

Process of Adjustment
Acculturation typically proceeds through four phases
Honeymoon

Crisis Learning
Adjustment A

Costs of Expatriate Failure

Averaged $250,000 early return per

Costs vary according to: Level of position Country of destination Exchange rates Whether failed manager is replaced by another expatriate.

Direct costs:
Airfares Associated relocation expenses Salary and benefits Training and development.

Indirect Cost of Expatriate Failure

Damaged relationships with key stakeholders in the foreign location. Negative effects on local staff . Family relationships may be affected.

How to minimize failures

Steps For Reducing Expatriates Failure:

Firms are now beginning to pay more attention to repatriation--bringing a manager back home after a foreign assignment has been completed. Individuals that successfully adapted to the foreign environment may experience culture shock upon returning to their own country.

Steps For Reducing Expatriates Failure

Regarding non-cultural issues leading to success or failure overseas, managers tend to be more successful in foreign assignments when 5 conditions are met:  They can freely decide whether or not to accept a foreign assignment.  They have a realistic understanding of the new job and assignment.

Steps For Reducing Expatriates Failure

They have a realistic expectation of a repatriation assignment. They have a mentor in the parent firm who will look out for their careers. There is a clear link between the foreign assignment and the manager s long-term career path.

Steps For Reducing Expatriates Failure Compensating expatriate managers can be a complex process because factors such as differences in currency valuation, standards of living, lifestyle norms, and so forth must be taken into consideration.

Steps For Reducing Expatriates Failure

A cost-of-living allowance may be given to managers to offset differences in the cost-of-living in the home and host countries. A hardship premium (also known as a foreign service premium) may be paid to mangers who accept assignments in relatively unattractive locations. Special benefits packages that may be provided to expatriate managers include housing, education, medical treatment, travel to the home country, and club memberships.

Recent trends in International staffing

Work Force Diversity Dual Career Couples Offshoring

International Staffing

Recruiting sources

Backgroun d Checks

Work force diversity

Diversity is a key metric on which organizations measure themselves .  Diversity implies a workforce mix with fair representation of gender and races .  Organizations have diversity policies that drive focused hiring to ensure the desired workforce blend.  Diversity costs money and a heightened exposure to business risk, however organizations remain committed to it year after year .


Offshoring
It is the act of moving some of the organisations internal activities and decision responsibilities to external service providers.  The spurt in hiring to staff these new-order companies in the emerging and the developing countries has hugely contributed to the revenue and growth of these countries.  On the other hand the outsourcing country, usually in the developed economies, stands to loose jobs to low cost and high skills countries making it outplacement and retrenchment a core activity.


Background checks
Background checks are carried out to verify personal, professional and other mandated information related to safe employment of candidates  Priced by quantum/scope of the personal and professional level of check that is being carried out, it is a core responsibility of the staffing team to ensure that the employee being onboarded is cleared from all sides.


Recruiting sources
 Increasing

driven sourcing.  Job portals and employee referrals are among the newer and more common sources .  Focus on hiring at entry level and then grooming employees for growth is a also gaining popularity as another high retention sourcing strategy.

demand for resources has widespread innovation in

Dual career couples

Dual career couples refer to situation where both husband and wife are in jobs. Managing dual career couples:  Find a job for the trailing spouse  Commute/remote assignments  Sabbaticals  Intra-company employment  On assignment career support.

The secret of your future is hidden in your daily routine.