Q4: HOW ARE STAFFING,

PERFORMANCE MANAGEMENT,
TRAINING AND COMPENSATION OF
EXPATRIATE MANAGERS
INTERRELATED?

Presented by:
Miss. Qunyao
Miss. Jann
Miss. Jac
Zhang Ruixian
WHATS THE IHRM ABOUT?
 Aims to promote: productivity, commitment,
flexibility and quality of product/services.
 HRM is strategic, like all other managerial
functions.
 The component of HRM:
 Staffing
 Training and development
 Performance management
 Compensation management
 Employee relations
 IRHM refers to HRM in global context
 HRM is meant to promote efficiency, it seeks
to lower costs and increase output
PCNS STRENGTH AND WEAKNESSES
 Ethnocentric MNCs tend to use PCNs
 Strength: familiarity with home office goals,
cmpetence and control
 Weaknesses: difficulties adapting to new
culture, cost, resistance from subsidiary and
family adjustment
 Example: 76.5% Japanese MNCs have a PCN
director.
WHY USE EXPATS (PCNS)?
 Knowledge transfer
 Management development (gain broader
experience)
 Organization development

 Strengthen HQ abilities of control and co-

ordination
 Indoctrinate company value to the local
workforce
 Ensure common practices

 Monitor potential corruption

 As communication link
EXPATRIATE MANAGEMENT IN MNC
 High cost of placing expatriate
managers
 Failure is all too common and has
considerable financial cost
 MNCs staffing is influenced by a series
of factors, e.g culture shoking, family
adjustment and repatriation etc.
SELECTION OF
EXPATRIATES:
TECHNICAL COMPETENCE
 Technical competence is universal for all
selection in any work context.
 The manager/worker must be well trained in
the technical aspects of the job.
 The technical competence is important since
Expatriates often must act independently.
 There may not be a large pool of superiors to
consult on problems.
SELECTION OF
EXPATRIATES:
TECHNICAL COMPETENCE
 When making international assignments,
they focus on knowledge creation and global
leadership development.
 Example: A Canadian company that wants to open a telephone-
making plant in Vietnam. It will send a manager who knows how to
manufacture phones and how to get a green field facility up and
running quickly. Once the plant was established, he would be
expected to transfer his knowledge to local professionals and to
learn from them too, Together , they would be expected to
generated innovative ideas.
 Nokia is a good example of a company that effectively uses
international assignments to generate knowledge. Senior Executives
scan their global workforce for engineers and designers who are
likely to generate new ideas when combined into a team. They bring
these people together in an R & D center for assignments with the
explicit objective of inventing new products. Such as the Nokia 6100
series mobile telephones that have quickly captured a leading
position in markets around the world.
SELECTION OF
EXPATRIATES:
PERSONAL TRAITS
 Expatriate managers should possess
outstanding interpersonal skills
 They should be able to deal effectively with
people from another culture.
 An open Personality facilitates success

 Expatriate managers should be flexible and

able to cope with new environments
SELECTION OF
EXPATRIATES:
PERSONAL TRAITS
 They must be able to deal effectively
with the unique constraints of
operating abroad. (i.e., foreign
governments, trade unions,
competitors, customers)
 They must be able to handle new and
unexpected challenges.
 They assign international posts to
Individuals who not only have the
necessary technical skills but also
have indicated that they would be
likely to live comfortably in different
cultures.
TRAINING AND DEVELOPEMENT
 The 4 are interrelated bcos:
 Managing international staff involves the 4 of them
 There are internal and external variables that influence them

INTERNAL
 Goal orientation
 Capacity to pay
 Competitive strategy
 Organizational culture
 Internal workforce composition
 Labor relations
 Subsidiary role

 EXTERNAL
 Parent nationality
 Labor market
 Local culture
 Home and host country governments’ roles
 Industry type
 Competitor’s strategies
TRAINING AND DEVELOPEMENT
International compensation: It is an organization’s usual means by
which employee rewards are planned and administered. It includes
base salary, benefits, perquisites, long and short term incentives,
valued by employers in accordance with their relative contributions
to MNC performance.
Increasingly, the importance of international compensation strategy in
the implementation of org strategy is beng acknowledged.

The purpose is to attract, retain, and motivate those personnel

required throughout the MNC.

Compensation is one of the most visible aspects of strategic IHRM.

In practice, international compensation strategy must facilitate equity

and the movement of staff throughout the MNC.
TRAINING AND DEVELOPEMENT
 Performance management is a term used to describe an
integrate set of techniques which have had an independent
existence under their own names. It could be considered to
comprise any HRM activity, or bundle of HRM activities, designed to
improve employee performance.
 Performance management emphasizes employee development and
rewards as outcomes of performance evaluation.
 At the optimum level, that of its strategic integration with other
management systems, performance management involves: links to
org strategy, setting individual performance goals, providing regular
feedback on progress towards those goals, providing opportunities
for improving and linking rewards and results.
 TRAINING AND DEVELOPEMENT
 MNCS recognize that human resources play impt role in developing and sustaining a
competitive advantage in biz environment. As a result, uses expatriates on short-
term and long term international job assignments for a variety of purposes.
 An expatriate’s success in the host country is largely determined by his r her cross-
cultural adjustment to the host country.
 Cross cultural training is defined as any planned intervention designed to increase
the knowledge and skills of expatriates to live and work effectively and achieve
general life satisfaction in an unfamiliar host culture.
 A CCT program that is linked with an organization’s HR practices has a greater
chance of success than CCT programs that are not linked by an overall HR strategy.
For e.g when expatriates acquire new cross-cultural knowledge and skills and apply
them on the assignment, the way in which their assignment performance is accessed
must reflect these changes. The more critical global assignments should be
emphasized within the organization’s total performance management system., in a
similar fashion, expatriate compensation should reflect the outcomes of CCT. If
expatriates have acquired new cross cultural knowledge and skills an are able to
enhance their performance, then they should be compensated accordingly. Cross
cultural training should also link with selection and assessment. Some personality
traits, such as openess, may influence CCT success and could be incorporated into
the assessment phase of the expatriate process. Therefore, selection of ppl to join in
CCT and ultimately go on an a global assignment willl play a key role in the outcome
of the effectiveness of a well designed CCT program.
 TRAINING AND DEVELOPEMENT
How to effectively integrate?

CCT Design process

5. Identification of employee type/ identify the type of global environment

6. Conduct a cross cultural training needs analysis
7. Establish CCT goals and measures
8. Develop and deliver the CCT program
9. Evaluate CCT
10. Link CCT with other HR practices

It is believed that the key to improving the process for developing, delivering, and
evaluating CCT
Programs from expatriates lies in new training technologies. BAsed on the current
instructional technology research, new training technologies such as the internet and
web based technologies are developing at an enormous pace and are providing cost
effective alternatives to traditional training design processes.
Using new technology to its best advantage is a major challenge facing CCT trainers and HR
specialists. In our opinion, it seems that making the most of this tech is critical to
designing effective CCT interventions now and in the future.

e.g A 2-wk program is provided by firms like British Petroleum in UK and Olivetti in Italy..
These programs focus on issues like preparing global managers to examine
environmental constraints and meet worldwide challenges, as well as to manage
corporate cultures and human interfaces.
PERFORMANCE MANAGEMENT
 A process that involves: goal setting,
appraisal(performance evaluation), Training
and development, Performance Related
Pay(Compensation/rewards)
 The objective is to achieve continuous
improvement in employ performance.
 Improved employee performance benefits
organizational performance in turn.
THE COMPONENTS OF
PERFORMANCE MANAGEMENT
 Communication of Company vision
 Role/job clarification

 Goal setting/planning/alignment

 Development/coaching/support

 Monitoring performance

 Feedback

 Compensation/rewards
GOAL SETTING IN FIVE TYPES OF
EXPATRIATE GROUPS AT NTC

 Top Manager: To a great extent self

developed goals that are agreed with
managers located in another country,
Emphasis on clear, financial goals.
 Middle Manager: The manager in a host
locations sets the goals, yet many
expatriates also have a manager at HQ,
Goals vary from fairly specific to very
specific.
 Business Establisher:Goals are agreed upon
with the primary manager, located in the
host or home country, Relatively few, broad
goals.
GOAL SETTING IN FIVE TYPES OF
EXPATRIATE GROUPS AT NTC

 Customer Project: No formal, work-related

goal setting.
 R & D Project: The manager in the host
location sets the goals, goals vary from
vague to specific.
 IN FIVE TYPES OF EXPATRIATE GROUPS
AT NTC

 Top Manager: By the manager located in

another country
 Middle Manager:When actually done,
performed by a manager in the host location,
Satisfactory amount of ongoing performance
feedback for most
 Business Establisher: by the primary
manager(s), satisfactory amount of ongoing
performance feedback for some.
 COMPENSATION OF EXPATRIATE
MANAGERS
Types of Expatriates
1. Temporaries Expatriates
Short term assignments typically less than 6 months
2. Young and Inexperienced Expatriates
Local hires
3. Older and Experienced Expatriates
Larger compensation packages
4. International Cadre Expatriates
Move from firm to firm and require global salary and benefits
5. Permanent Expatriates
Becomes locals

Approaches
1. Negotiation/Ad Hoc
Expatriates negotiates a unique compensation package
tailored to the environment
2. Balance Sheet
Uses a standardized formula to ensure the expatriates are not
worse off by accepting an international assignment
3. Localization
 INTERNATIONAL COMPENSATION
STRATEGY
The provision of monetary and non-monetary rewards, including base
salary, benefits, perquisites, long and short term incentives, valued
by employees in accordance with their relative contributions to MNC
performance.

HRM purpose
To attract, retain and motivate those personnel required throughout
the MNC currently and in the future.

Risk
1. Increased by the complexities of operating within multiple diverse
economic, employment and taxation regimes.

2. Increased through direct and indirect cost inefficiencies associated

with international staff transfers and also with the implementation of
the strategy for global consistency in an urgent manner.

Eg. Failure of international compensation to meet its objectives and

cost inefficiencies through in appropriately over-rewarding some
employees will be faced if MNC do not adapt to local conditions and
result in employee dissatisfaction.
 INTERNATIONAL COMPENSATION
STRATEGY
Allowances comprise
1. Foreign Service Premiums
Most common for employees on long-term assignments (over
one year) as an incentive to take the assignment.

2. Hardship
In consideration of isolation, crime, natural hazards, political
violence, based on government data upon which rates can be
provided by consulting organizations.

3. Relocation
Compensation for costs such as transport, storage, temporary
accommodation, purchases of appliances and vehicles,
associated with moving to host country.

4. Education
For assignees’ children.

5. Home Leave
Provision for the assignee and family to return home
 PERFORMANCE MANAGEMENT
An integrated set of techniques which have had an independent
existence under their own names. E.g. Performance appraisal

Purpose
To improve employee performance

Characteristics of integrated performance management to specific

HRM functions
1. Links to the MNC strategy = HR Planning, Job Design and Analysis
2. Setting individual performance goals = Job Analysis
3. Providing regular feedback on progress towards those goals =
Performance Appraisal
4. Providing opportunities for improving = Performance Appraisal,
Training and Development
5. Linking results and rewards = Performance Appraisal,
Compensation
PROCESS OF USING EXPATRIATES
 Selection

 Preparation

 Monitoring/Supporting

 Repatriation
PROCESS OF USING
EXPATRIATES
 Selection refers to the staffing function, as
discussed in the earlier parts
 Following selection, the expatriates should be
prepared, often involves, training such as
language skills, cultural skills etc
 Monitor refers to the Performance
management.
 Also monitor upon arrival, identify culture
shock etc problem, morale of the expat and
family etc.
 Support in the form of training should be
offered.
 Repatriation: career development, new skills
CONCLUSION

Selection Staffing

Traning/
Preparation Development

Monitor/ Performance
Support Management

Repatriation Compensation