Prepared by.
Annisa CitraElsa MayasariFreda Sitorus
Muhammad SafliantoRichard
Managing Human Resources GloballyChapter 15
Managing Human Resources GloballyChapter 15Introduction
Competitive advantages:1. New markets - Large number of potential customers2. Building facilities in other countries – Lower labor costs (for unskilled jobs)3. Rapid Increase in telecommunication & IT –
Work done more rapidly, efficiently, effectively
Strategically manage human resourcesin an international context
RANK COMPANY REVENUES PROFITS ($ MILLIONS) ($MILLIONS)
1 ExxonMobil 339,938.0 36,130.02 Wal-Mart Stores 315,654.0 11,231.03 Royal Dutch Shell 306,731.0 25,311.04 BP 267,600.0 22,341.05 General Motors 192,164.0 -10,567.0
Managing Human Resources GloballyChapter 15Current Global Change
European Economic Community (EEC)
Close geographic proximity
Most of European countries agreed to participate in EEC - 1992
“ A Confederation of most of the European nations that agree to engage in free tradewith one another, with commerce regulated by an overseeing bodycalled the European Commission (EC) ”
North American Free Trade Agreement (NAFTA)
“ An agreement among Canada, The United States, and Mexico that has createda free market even larger than the European Economic Community “
A free trade agreement since 1989
Has increased U.S. investment in Mexico
Managing Human Resources GloballyChapter 15Current Global Change
The Growth of Asia
“ An additional global market that is of economic consequence to many firms lies in Asia “
Asian flu
General Agreement on Tariffs and Trade (GATT)
“ An international framework of rules and principles for reducing trade barriers acrosscountries around the world “
Managing Human Resources GloballyChapter 15Factors Affecting HRM in Global Markets
Culture
Education –Human Capital
EconomicSystem
Political –Legal System
Human ResourceManagement
Factors Affecting Human Resource Management in International Markets
Managing Human Resources GloballyChapter 15Factors Affecting HRM in Global Markets
Culture
Education –Human Capital
EconomicSystem
Political –Legal System
Human ResourceManagement
Factors Affecting Human Resource Management in International Markets
CULTURE
The most important factor influencing international HRMReasons:1. Determines the others 3 factors affecting HRM in global markets2. Determines effectiveness
The set of important assumptions
Hofstede’s Cultural Dimensions Individual-collectivism Power distance Uncertainty avoidance Masculinity-feminity Long term–Short term Orientation
Implications of Culture for HRMImportant impact on approaches to managing people
Managing Human Resources GloballyChapter 15Factors Affecting HRM in Global Markets
Culture
Education –Human Capital
EconomicSystem
Political –Legal System
Human ResourceManagement
EDUCATION – HUMAN CAPITAL
Productive capabilities of individuals – that is the Knowledge, Skills, experienceThat have economic value
Managing Human Resources GloballyChapter 15Factors Affecting HRM in Global Markets
Culture
Education –Human Capital
EconomicSystem
Political –Legal System
Human ResourceManagementPOLITICAL – LEGAL SYSTEM
• Regulation• Requirements for certain HRM practices• Legal system is an outgrowth of the culture in which it exist
Managing Human Resources GloballyChapter 15Factors Affecting HRM in Global Markets
CultureEducation –Human Capital
EconomicSystem Political –
Legal System
Human ResourceManagement
ECONOMIC SYSTEM
• A country’s culture is integrally tied to its economic system• The health of the system can have an important impact• Affects by taxes on compensation packages
Managing Human Resources GloballyChapter 15Managing Employees in a Global Context
Types of International Employees
• Parent country• Host country• Third country• Expatriate• Parent-country nationals (PCNs)• Host-country nationals (HCNs)• Third-country nationals (TCNs)
CorporateHeadquarters
CorporateHeadquarters
ForeignSubsidiary
ForeignSubsidiary
ForeignSubsidiary
ForeignSubsidiary
ForeignSubsidiary
CorporateHeadquarters
CorporateHeadquarters
Increasing participation in global markets
Domestic International Multinational Global
ParentCountry
HostCountry
Managing Human Resources GloballyChapter 15Managing Expatriates in Global Markets
Human Resource in Managing Expatriates
Staffing and Selection•Communicate the value of international assignment for the company global Mission•Ensure those with highest potential move internationally• Provide short term assignment to increase the pool of employee with international experience•Recruit employees who have lived or who were educated abroad
Training & Career•Make international assignment planning a part of career development•Encourage early international experience•Create learning opportunities during the assignment•Use international assignment as a leadership development tools
PA & Compensation•Differentiate PM based on their roles•Align Incentives with expatriation objectives•Tailor benefits to the expatriate needs•Emphasizes rewarding careers rather than short term outcomes
Repratioation•Involve the family in the orientation program at the beginning and at the end•Establish mentor relationship•Support for dual careers•Secure opportunities for the returning manager to use knowledge and skills learned while being assisgned
Managing Human Resources GloballyChapter 15Managing Employees in a Global Context
Managing Expatriates in Global Markets
Selection of Expatriate Managers
Training and Development of Expatriates
Compensation of Expatriates
Reacculturation of Expatriates
Chapter 16
Strategically Managing the HRM Function
““explore the changes in HRM function and manage the explore the changes in HRM function and manage the
changes”changes”
Index :Index :
- HRM Roles and its Strategies
- Assessment for HRM
- Improving HRM efficiency and effectiveness
- Applied Technology (Software) for HRM
- The future for HR professionals
Index :Index :
- HRM Roles and its Strategies
- Assessment for HRM
- Improving HRM efficiency and effectiveness
- Applied Technology (Software) for HRM
- The future for HR professionals
Transactional (65 – 75%)Benefits administration
Record keepingEmployee services
Traditional (15 – 30%)Recruitment and selection
TrainingPerformance management
CompensationEmployee relations
Transformational (5 – 15%)Knowledge managementStrategic redirection and
renewalCultural change
Management development
HRM Activities in Terms of Strategic ValueHRM Activities in Terms of Strategic Value
Stra
tegic
Strategic
HRM Basic Perspective : HRM Basic Perspective : Customer-Oriented PerspectiveCustomer-Oriented Perspective
CustomersLine managersStrategic plannersEmployees
HRM functionHRM function
TechnologyStaffingPerformance managementRewardsTraining and development
Customers’ needsCommitted employeesCompetent employees
HR’s Stra
tegy HRM function : Customer-oriented
HRM activities :
Strategic value
HR Strategy : the basic processHR Strategy : the basic process
Scan the external environment
Identify strategic business issues
Identify people issues
Develop HR strategy
Communicate HR strategy
Line executives involvement :-Input provider- members of the dev. Team- communication receiver- approver
Ways to Generated an HR Strategy Ways to Generated an HR Strategy
Business issues/outcomes
3 different Inside-Out Stages
People issues/outcomes HR Strategy
People issues/outcomes
HR Strategy
People issues/outcomes
HR Strategy
Business-Linked(5 cases)
People-Linked(7 cases)
HR Focused(3 cases)
An Outside-in Perspective
Business issues/outcomes
People issues/outcomes HR Strategy
Business-Driven(5 cases)
Index :Index :
- HRM Roles and its Strategies
- Assessment for HRM
- Improving HRM efficiency and effectiveness
- Applied Technology (Software) for HRM
- The future for HR professionals
Assessment of an HRM FunctionAssessment of an HRM Function
Objectives
-Marketing the function :
- Providing accountability :
Approaches for Evaluating Effectiveness
-Audit approach
Focuses on reviewing various outcomes of HR function using list of
key indicators and measuring it through its customers.
Example :
Demerit : its solely voicing out the employees
Key Indicators CS Measures
Labor Relations Ratio of grievances by plan to number of employees
Assistance provided to line managers in handling grievances
Assessment of an HRM FunctionAssessment of an HRM Function
Approaches for Evaluating Effectiveness
-Analytical approach
Focuses on reviewing various outcomes of HR function by
determining the impact of, or the financial cost and benefits of a
program or practice.
Example :
Cost-benefits-analysis
Human resources accounting-Capitalization of salary-Net present value of expected wage payments- Returns on human assets and human investments
Utility Analysis-Turnover cost- Absenteeism and sick leave costs- Gains from selection program- Impact of positive employee attitudes- Financial gains of training program
Index :Index :
- HRM Roles and its Strategies
- Assessment for HRM
- Improving HRM efficiency and effectiveness
- Applied Technology (Software) for HRM
- The future for HR professionals
Transactional (65 – 75%)Benefits administration
Record keepingEmployee services
Traditional (15 – 30%)Recruitment and selection
TrainingPerformance management
CompensationEmployee relations
Transformational (5 – 15%)Knowledge managementStrategic redirection and
renewalCultural change
Management development
Improving HRM Activities in Terms of Strategic ValueImproving HRM Activities in Terms of Strategic Value
Stra
tegic
Strategic
Outsourcing
Process redesign, information technology
Restructuring HRM Organization StructureRestructuring HRM Organization Structure
VP, HRM
Director StaffingDirector
CompensationDirector Training &
Development Director Planning
Historical HRM Organizational Structure
New HRM Organizational Structure
VP, HRM
Centers for Expertise-Rewards- Staffing
- Training & Dev.- Communications
Traditional/transformational
Field Staff-HR Generalist
Transformational/traditional
Service Center-Information technology
- Claim processing
Transactional
Transactional (65 – 75%)Benefits administration
Record keepingEmployee services
Traditional (15 – 30%)Recruitment and selection
TrainingPerformance management
CompensationEmployee relations
Transformational (5 – 15%)Knowledge managementStrategic redirection and
renewalCultural change
Management development
Improving HRM Activities in Terms of Strategic ValueImproving HRM Activities in Terms of Strategic Value
Stra
tegic
Strategic
Outsourcing
Process redesign, information technology
Improving HRM Activities in Terms of Strategic ValueImproving HRM Activities in Terms of Strategic Value
1. Outsourcing
A use of an outside organization for a broad of services
2. Process Redesign
Review and redesign of work processes to make them more efficient and
improve the quality of the end product or services
Indentify the process to be reengineered
Understand the process
Redesign the process
Implement the new process
feedback
Improving HRM Activities in Terms of Strategic ValueImproving HRM Activities in Terms of Strategic Value3. New Technology - HRM Information Systems
Applying advanced application of knowledge, procedures and equipment that
have not been used before.
a. Transaction process
b. Decision support systems
c. Expert systems
Current:
a. Interactive voice technology
b. Networks and client-server
architecture
c. Relational database
d. Imaging
e. Expert systems
f. Groupware
New/Add :
Improve effectiveness through increasing access to information, improving communications, improving the speed which HRM transaction and information can be gathered and reducing the cost and facilitating the administration of HRM function such as recruiting, training and performance management
Index :Index :
- HRM Roles and its Strategies
- Assessment for HRM
- Improving HRM efficiency and effectiveness
- Applied Technology (Software) for HRM
- The future for HR professionals
Applied Technology (Software) to Ease HRM Function Applied Technology (Software) to Ease HRM Function to be More Strategicto be More Strategic
Transactional (15 – 25%)Benefits administration
Record keepingEmployee services
Traditional (25 – 35%)Recruitment and selection
TrainingPerformance management
CompensationEmployee relations
Transformational (25 – 35%)Knowledge managementStrategic redirection and
renewalCultural change
Management development
Traditional Face to face
delivery
Outsourcing
Electronic Delivery
Process redesign,
information technology
Index :Index :
- HRM Roles and its Strategies
- Assessment for HRM
- Improving HRM efficiency and effectiveness
- Applied Technology (Software) for HRM
- The future for HR professionals
The Future for HR ProfessionalsThe Future for HR Professionals
Nowadays HR functions become more strategic by becoming the “SOURCE OF PEOPLE EXPERTISE – People Issues
HR must posses and use knowledge of how people can do and play role as well as the policies, programs, and practices that can leverage the firm’s
people as a source of competitive advantage
HR Basic Competencies
Business Competences
Proffessional – Technical
Knowledge
Management of Change Process
Integration competence
Thank You
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