The International Human Resource Management Issues


“The complex and ever-changing world of international management requires not only cultural awareness and sensitivity, but also the ability to change, develop, and improve on-the-job performance… multinational corporations (MNCs) have pursued cross-cultural training programs for their expatriate managers in order to make them more culturally aware and effective in their international assignments” (Luthans & Farner, 2002, p. 780).

“Reasons…creating international communication networks, unwillingness to employ HCNs in key positions, management development, the requirement of corporate strategy, training HCNs, culture diffusion and lack of qualified HCNs” (Warner, 2005, p. 210-211).

“The most frequently reported reasons for using expatriates were administration, financial control and specific technical requirements. The use of expatriates to enable control, co-ordination of global activities and trouble-shooting was the top issue for the case study companies” (Warner, 2005, p. 210).

“In a significant number of cases, the successes of international operations of companies are determined by the performance of the expatriates and other employees working in a foreign country. This has made the organizations attach a greater significance to IHRM activities” (Durai, 2010, p. 641).

HR Activities

“(iii) Selection of expatriates;

(iv) Coping with expatriate failure;

(v) Managing repatriation processes;

(vi) Managing female expatriates” (Aswathappa & Dash, 2008, p. 68).

“international companies usually grant additional pay and benefits to expatriates if they happen to work in nations where their pay is low” (Durai, 2010, p. 648).

“The Global Relocation Trends 2001 Survey (2002) found that to save expatriation costs (particularly for US expatriates) companies increasingly rely on short-term expatriate assignments and use those assignments for development purposes. Measured in terms of cost savings and the amount of time of expatriate experience created, this appears sound” (Edwards, Scott, & Raju, 2003, p. 507).

“it is frequently the long-term expatriates who exhibit the aligned action of sharing their acquired knowledge and experience throughout the MNE, because long-term expatriates not only have greater experience but also more status within the organization” (Edwards, Scott, & Naju, 2003, p. 507).

“To utilize expatriation management as an example, many MNEs focus their HR efforts on the technical management of expatriates rather than encompassing strategic implications of expatriation” (Edwards, Scott, & Raju, 2003, p. 510).

“A number of circumstances make potential expatriate candidates increasingly wary of foreign assignments. Such deterrents include deteriorating corporate expatriate policies, increasing occurrence of dual career families, widespread mismanagement of expatriates’ repatriation, deteriorating expatriate compensation packages, and growing concerns about children’s education abroad” (Selmer, n.d., p. 4).

“To reduce costs, it is common to decrease the number of expatriates through localization. Other alternatives to trim expenses are to cut special expatriate compensation packages and/or outsource the administration of expatriate benefits” (Selmer, n.d., p. 4).

“The current use of performance appraisal with Australian expatriate managers in Singapore and Singaporean expatriate managers in Australia appears characterized by satisfaction with the fairness and accuracy of performance criteria, and with a greater desire for the input of subordinates, colleagues and clients in the appraisal process” (Woods, 2003, p. 530).

“Although expatriate cultural training is now widely accepted and used, there has been to date very little attention devoted to evaluating this training’s effectiveness and better fitting expatriate managers to the local culture to make them more effective once on the job” (Luthans & Farner, 2002, p. 780).

“One of the main reasons for effective cultural training is to help control the failure rate of expatriate managers. Defined as the premature return by an expatriate from an overseas assignment, failure rates are between 25 and 40 percent when the expatriate is assigned to a developed country and a whopping 70 percent when the expatriate is assigned to a still-developing country” (Luthans & Farner, 2002, p. 781).

“The use of home country evaluation and promotion standards, the lack of training and the short period assignments limit and discourage cultural adjustments for expatriates” (Aswathappa & Dash, 2008, p. 27).

Dimensions to reduce expatriate failure

“Negotiation styles. Expatriates should be made aware that negotiation styles vary widely from country to country” (Luthans & Farner, 2002, p. 781).

“Communication. In the USA, business associates have a tendency to address each other by first names right after being introduced. However, in France it may take three to six months before business associates feel comfortable addressing each other without a formal title. Non-verbal cues can also be barriers to effective communication” (Luthans & Farner, 2002, p. 781).

“Social relations. Americans tend to place a high value on informality as a way of creating a comfortable environment. Conversely, Europeans tend to be more formal, both in dress and demeanor, while conducting business or entertaining guests (Luthans & Farner, 2002, p. 781).

“Family lifestyle adjustment. Concerns associated with everyday lifestyle adjustment in another country, such as where to shop, how to get the kids to school, and how to decode the public transportation system can be quite stressful for expatriates and their families” (Luthans & Farner, 2002, p. 781).

“In the case of expatriate relocation, the HR department may have to attend to the traveling, shopping, medical, training and other needs of the expatriate employees posted in the host country…Besides, the HR department must consider the tax liabilities of the expatriates as they may face taxes in both the host and parent countries” (Durai, 2010, p. 640).

“Failure to recognize the importance of foreign language skills may reflect a degree of ethnocentrism on the part of MNCs. It also reflects a certain degree of unconscious arrogance on the part of expatriates from the English-speaking countries” (Aswathappa & Dash, 2008, p. 173).

“Since expatriation is a highly stressful and uncertain event, it is reasonable to assume that social support from different sources, such as local nationals, and peer expatriates, is extremely important in helping expatriates adjust to this stressful environment” (Warner, 2005, p. 162).

“Localization is defined as to the extent to which expatriates have local nationals as their supporters in their personal network. This construct is unique to the expatriate population” (Warner, 2005, p. 162).

“Once the expatriates complete the foreign assignment and are ready to return to their home country, a brief training is provided to refresh the employees’ memory about the home-country workers, workplaces, and work practices” (Durai, 2010, p. 646).

Conclusion

As it comes from the present information, the international human resource management field now allocates much importance to the allocation of relevant expatriates in a host country where the business of a multi-national company is expanded. This is done to ensure the coherent workflow arrangement, and bringing the activities of a subsidiary into compliance with the activities, mission statement, and objectives of the head office. Therefore, the practice of assigning expatriates to short-term and long-term assignments to host countries has become a traditional tool in the hands of IHRM departments.

However, one should be highly aware of the complex of difficulties in managing and evaluating the expatriates in a host country. First of all, such notions as localization, diversity, and cross-cultural communication should be taken into account as mitigating success and performance, at least at the initial phases of accommodation and acculturation. It is often the mistake of the HR department unable to provide the expatriate with adequate resources for socialization that causes great discomfort for the expatriate and prevents him/her from fulfilling the assignment effectively.

The family issues are also an influential factor in managing and evaluating expatriates, as the willingness of the family to move with the spouse to the host country, arrangement of communication, and accommodation of the whole family are sometimes the sources of troubles, dissatisfaction etc. The length of stay for the expatriate in the host country is the matter of strategic choice as the shorter terms prove more cost-efficient for the company, but less effective from the evaluative point of view. There also are some gender issues in allocating expatriates with assignments in different countries; they are mostly predetermined by the mentality of both the expatriates and the host country requirements.

One should also take into account the repatriation effort that needs to be undertaken by the HRM department. The expatriates may face problems not only with accommodation at a host country, but with returning to their native country as well. Therefore, all activities connected with the selection of expatriates, their introduction to the host country, and successful return to the conventional workplace should be taken as the responsibility of HR. the process of choosing expatriates conceals a set of implications as well, since they are sent to manage local managers and create a sound organizational structure. Therefore, there are many criteria for choosing expatriates due to the individual leadership, communicative, and cross-cultural qualities.

References

Aswathappa, K., & Dash, S. (2008). International Human Resource Management. New Delhi, India: The McGraw-Hill Companies.

Durai, P. (2010). Human Resource Management. New Delhi, India: Pearson Education in South Asia.

Edwards, J.E., Scott, J.C., & Raju, N.S. (2003). The human resources program-evaluation handbook. Thousand Oaks, CA: SAGE.

Luthans, K.W., & Farner, S. (2002). Expatriate development: the use of 360-degree feedback. Journal of Management Development, Vol. 21 No. 10, pp. 780-793.

Selmer, J. (n.d.). International Adjustment of Business Expatriates: The Impact of Age, Gender and Marital Status. Hong Kong Baptist University: School of Business. Web.

Warner, M. (2005). Human resource management in China revisited. New York, NY: Routledge.

Woods, P. (2003). Performance management of Australian and Singaporean expatriates. International Journal of Manpower, Vol. 24 No. 5, pp. 517-534.