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International HRM Day 4: Global Staffing Monday 20 th February 2017 Paul Hunter  Culture has a number of impacts on IHRM policy. Differences globally evident with people’s values, behaviours, interpretation of events etc.  Important to identify national and regional culture. Consideration required of cultural dimensions that exists, i.e. power distance and individualism.  Body Language and gestures big factor on global communication.  Understanding national culture is key for IHRM – reason expatriates deployed overseas. However psychological adjustment must be monitored. Day 3 Recap Locating Global Staffing in IHRM • Collings et al (2009) defined global staffing as filling key positions in head quarters and subsidiaries. • Issues include – Understanding how selection occurs in different countries – Selection for international assignments – Getting the right person in the right job at a local and global level – Succession planning Integrative Framework for IHRM (Schuler et al, 1993 cited in Crawley et al, 2013) Why is global staffing critical?

• R ecognition that employees create strategic value and underpin organisational success e.g. as MNCs move into new markets • Global staffing is more complex than at the domestic level • Expatriate performance is often problematic • Shortage of international management talent (dual career families inhibit international mobility) • The need to develop talent e.g. inpatriation where foreign employees go to HQ for education and training) (Collings and Scullion, 2006) MNC Staffing Policies  There are 3 different staffing policies normally deployed by MNC’s:

• ethnocentric staffing policy: appoint mostly parent country nationals to top positions at their subsidiaries; • polycentric staffing policy: appoint mostly host country nationals; • geocentric staffing policy: appoint the best person, regardless of his/her nationality.  These are not mutually exclusive and may be used together but there is often one dominant mode International Assignments: The Corporate Rationale • To fill positions - concerns the transfer of technical and managerial knowledge. • Management development – international experience • Coordination and control. a) socialisation of both expatriate and local managers into the corporate culture; b) creation of a verbal information network that links subsidiaries and HQ. Expatriates and their Role as Knowledge Agents  Research has increasingly highlighted the role of expatriates as knowledge agents between their home and host units.  Expatriates acquire:

• an understanding of the company’s global organisation and the corporate culture at the HQ ; • factual knowledge about the assignment culture, and culture - specific behaviours .  Expatriates also share relevant knowledge that helps to streamline cross -unit processes, creates common corporate practices and routines, or increases the chances of subsidiary survival. Forms of Global Work (Shaffer et al, 2012; Baruch et al, 2013) • An increasing range of forms of international work has emerged including:

– Traditional expatriate: employee transfers to one foreign location for one year or more and the family frequently relocate – Short term assignments: an overseas assignment between 3 -12 months to one location and the family tend not to relocate – Flexpatriates : international assignments up to 3 months to multiple international locations without the family – Commuting: international trips from a few days to a week duration on a regular basis Trends in Expatriate Assignments • January 2016 Trends (3 mins ) • https://www.youtube.com/watch?v=h9QR -FI2Upg The Expatriate Employment Relationship • Consider traditional expatriate and flexpatriates • Psychological contract – “An individual’s belief regarding terms and conditions of a reciprocal exchange agreement between the focal person and another party. The key issue here is the belief that a promise has been made and a consideration offered in exchange of it, binding the parties to some set of reciprocal obligation (Rousseau, 1989:123). – “The perceptions of both parties to the employment relationship – the organisation and individual – of the reciprocal promises and obligations implied in that relationship” (Heriot and Pemberton, 1997:22) The Psychological Contract Issues • Subjective: how I interpret the deal • Fluid and can change over time • Implicit where actors may ‘fill in the blank’s of the employment relationship based on observation and inference where an apparent agreement may be assumed without the knowledge of the other party • Can be ambiguity of who represents the ‘employer’ – Is it senior managers? Is it line managers? What about HR managers? Are there mixed messages among all these agents? Traditional Expatriates • The management of traditional expatriates… at least in principle – Sophisticated recruitment and selection – Cross -cultural training often including the family (cultural adjustment is a key issue) – Enhance remuneration package including higher salary, housing, healthcare travel allowances for all the family to travel home a few times a year and possible private schooling for children – On -going organisational support Richard Debenham in Vienna Case Study Review Traditional Expatriate Psychological Contract  The employee view: realities… (extracts from Pate &Scullion, 2009)  Pre -departure  “The company was highlighting that international experience would be very good for your promotion chances and for your career development”  “They had no idea at all, clueless! They had no idea or information on locations to live, cost of living or visas!”  Terms and conditions  “There has been a lot of looking at what we are offered in terms of the expat deal, cutting back on certain benefits. They have but it back from the days when I was first an expat”. Traditional Expatriate Psychological Contract  Repatriation  “You have come back having set up factories, given the company a record increase in production, an appraisal that is second to none and they still say there’s no job for you!”  “You don’t get exposure to the right people and I still feel that I haven’t go the contacts that I would have had if I had stayed in [HQ] which potentially has a bearing on future career opportunities within the organisation ” Traditional Expatriate Psychological Contract  The employer view: Some of the realities… (extracts from Pate and Scullion, 2009) Managers comments  “Despite enjoying the expat benefits while abroad, some expats feel that the company still owes them because they worked abroad and their expectations of a new job in terms of status and salary are unrealistic”  “In the past an international assignment was closely linked to career development, the focus was the long term. Currently, the focus is more short term. The expatriates push to maximise what they can get out of the situation before they accept the assignment” Traditional Expatriate Psychological Contract • Experience of one expatriate…not good (11 mins ) • https://www.youtube.com/watch?v= COQgJyCpU4A • What do you think? What did you learn for HRM practices from this? Corporate Expatriates and Self -initiated Assignees  A growing number of assignees make their own arrangements to find work abroad.  Self -initiated assignments are facilitated by the introduction of free movement of labour – evident in the European Union and other economic regions.  In contrast to corporate expatriates, self -initiated assignees are employed on local work contracts and differ in a number of characteristics from corporate expatriates. Flexpatriate Psychological Contract • Share some thoughts from Pate and Scullion (2016) from the International Journal of HRM • Corporate rationale for the increase of flexpatriates – Easier to fill these posts than traditional expatriates – Flexibility – Maintain global networks on a face to face basis – Transfer knowledge – Reduced costs: can fulfil corporate goals without the costly commitment of long term expatriate employees Flexpatriate Psychological Contract What is expected of flexpatriates ? • International assignments for up to 3 months • Travel to multiple locations – some are career enhancing while others seem ‘dead end’ • Different mix of assignments e.g. regular repetitive journeys to the same locations or lots of new and novel destinations ( Wickman and Vecchi (2009) • Travel at short notice • Family stay at home • In short Shaffer et al (2012) argues flexpatriates are the only form of global work that scores high on physical mobility, cognitive flexibility (flexible and adapt to multiple locations) and non -work disruption Flexpatriate Psychological Contract Group exercise:

You are considering becoming a flexpatriate employee and there are a lot of demands on you (see previous slide).

In the ‘give and take’ of the psychological contract. Write down what you expect in return and what do you think the employers obligations are in terms of: • The process of selection • Training and development • Remuneration • Career prospects Flexpatriate Psychological Contract • The reality is surprising in terms of formal HR policies such as recruitment, training and pay plus the level of HR managers intervention vis -à -vis the line manager (Mayerhofer et al, 2004; McKenna and Richardson, 2007; Welch et al, 2007) Group discussion • How does this compare to the traditional expatriates’ deal? • What do you think are the repercussions? How would you feel? Summary • Locating global staffing within IHRM • Forms of global staffing • Psychological contract of traditional expatriates • Psychological contract of flexpatriates