The advent of the multinational organization offers unique challenges for the human resources professional within the area of compensation and benefits. To effectively administer human resources programs brings challenges from which there is no clear historical path, and must address not only training and development for the multinational corporation employee, but in many cases for the family, which can be a costly endeavor because of the high rate of failure hinging on the expatriate’s worldview.
Compensation programs exist under the purview of the human resources professional within the multinational organization (MNOs), and the difficulty in creating and maintaining an effective, creative, and competitive compensation program, in the recruitment of high value human capital while keeping the company profitable is a daunting task, and at times may be overwhelming.
Finding the appropriate candidate, with the right attitude can be half the battle in recruiting, and placing expatriates versus host-country nationals. By focusing on the three primary attitudes of global management; polycentric, ethnocentric, and geocentric, the success of failure of any global endeavor could swing the pendulum toward either success or failure, as “expatriate failure can be costly if he or she leaves the company” (Schaffer, Harrison, Gregersen, Black & Ferzandi, 2006, p. 110).
The discussion reviewed in this paper will highlight some issues that arise from maintaining a global employee presence on the world stage, and best practices with regard to expatriate and host-country national compensation globally recognized.
Polycentric Attitude
The polycentric attitude is a belief that employees in the host-country, which is the country in which a corpo...
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While there are many various global issues that affect the International Human Resource Management to run efficiently, there are two key concepts that play a major role in understanding how to approach them with cohesive and a well coherent strategy; they are the International Human Recourse Management Strategy and Understanding the Cultural Environment. In the International Resource Management strategy, many companies will do their research in finding companies that offer the following:
This paper is about leading people through a management system called Human Resource (HR), that does more than payroll, design training, and avoiding lawsuits. It provides essential components that will ensure that human talent is used effectively and efficiently to accomplish organizational goals. It is a case study of the Rio Tinto company 's Human Resources global approach after a significant downsizing in 2008.
Rafter, M. (2009, March). Return trip for expats. Workforce Management, 88(3), 1,3. Retrieved July 21, 2010, from ABI/INFORM Global. (Document ID: 1669809321).
International businesses are also finding new ways of increasing diversity abroad. Instead of using expatriate employees as management, they are starting to hire locals. Companies that operate abroad are realizing that using expatriate employees is not a permanent solution. They are often expensive, and are not capable of translating their skills into the new environment. In a company that operates globally, it is important that the company knows how to relate to the local markets, and a great way to do this is by hiring local talent. Hiring locally is cheaper, there is not a language barrier, and they are accustomed to the business environment in the area(5). They can also help the business by providing a new perspective into international markets, and offer ways that the company can improve their diversity abroa...
Sample Policies on Common HR Topics Compensation 2013，Community Foundations of Canada，Canada, viewed 1 may 2014,
The case study of the Expatriate Management of the AstraZeneca organization appears to have many topics the organization has done well to include how to treat these types of employees when their work requirements take them to another country for an uncertain amount of time. There is always possible lessons learned that may not be so much for the organization but rather the employee and their quality of life when they become an expatriate. The requirements for this task may be difficult, but the organization can help with what is required along the way from the very beginning to the end of the assignment. The article does not talk about family relations which could be something done better.
A major challenge of doing business internationally is to adapt effectively to different culture. Such adaptation requires an understanding of cultural diversity, perceptions, stereotypes, and values (Hodgett &Luthans, 2005). Doing business overseas has its challenges as well as it rewards.
This case from Apple, a multinational corporation, shows that there are threats that are facing companies like her as they strive to set foot in global markets. The company’s fallout in terms of salaries and fair compensation is one of such threats that are expressly found in Apples case. Companies seeking global markets will need to strategize and foresee such developments to avoid such developments. Due to the diversity of global markets, the threat of failing to comply with laws in these locations is always
High turnover rate of expatriate: expatriate managers are frustrated with the performance and practices of local employees. And they do not have enough international experience and cross-cultural communication and sensitivity training.
One way to explain the high levels of turnover of managers on repatriation is provided by Lazarova and Cerdin (2007). According to the authors, it possible to divide into two groups the repatriates: the frustrated and the proactive, which is in accordance with the main reasons of leaving the company upon returning from the international assignment (Figure 8, GMAC GRS, 2016).
However, repatriation is one aspect of international assignments that has been somehow overlooked. Most literature on international human resource management (IHRM) for the most part focuses on expatriate settlement in the host country of assignment. Not as much of the required concentration has been focused on preparing expatriates for homecoming, notwithstanding the facts regarding the complexity of settling back at home and reports that nearly all expatriates are unhappy with the repatriation process. In view of the fact that the world is becoming more integrated leading to more global deployment of employees, the repatriation process calls for added attention (Furuya et al 2007).
“The internationalization of business has proceeded at a rapid pace as the world has become a global economy.”(Mathis, Jackson 2000) This is the very reason why companies now have the need for international executives. As all aspects of a business spread worldwide, so must the employees. An expatriate by definition is a home-county national, usually an employee of the firm, who is sent abroad to manage a foreign subsidiary. (Rodrigues, 2001) A successful expatriate generally requires an extensive amount of time and money, however, a failed expatriate can be even more costly for an organization. A study of multinational corporations showed that 69% (of the firms surveyed) had recall rates of expatriates between 10 to 20 percent. Compared to Japan and their figures, (86% of firms had less than 5% recall rate) the United States has room for improvement. (Tung, 1981) There are many reason for expatriates to fail and many differences between Japan and United States’ human resource management planning.
Formalized compensation goals serve as guidelines for managers to ensure that wage and benefit policies achieve their intended pur¬pose. The more common goals of compensation policy include to reward employees’ past performance, to remain competitive in the labor market, to maintain salary equity among employees, to motivate employees’ future performance, to maintain the budget, to attract new employees, and to reduce unnecessary turnover. It is important for the organ...
Organizations are working hard in today’s world of business, not only to remain competitive, but also to focus on stability and structure. Employees are the backbone of an organization. It is becoming more important to offer quality HRM programs to staff, in order to support the retention of trained and experienced staff. Employees have always been concerned with salary however, there is a new focus emerging that looks at compensation as a whole entity. Monetary wages are now just as important as other benefits such as paid time off, medical and dental offerings and retirement. This paper will discuss the importance of the total compensation program which includes many aspects, not just salary. Attention must be paid to equal pay, pay