3 Discussions and 2 weekly summary

Discussion 7.1

What do you think would constitute an effective alternative dispute resolution system? What benefits would you expect from such a system? If you were asked to rule on a discharge case, what facts would you analyze in deciding whether to uphold or reverse the employers action?

Discussion 7.2

Considering both federal and state labor laws are labor unions still needed in the USA, why or why not? Describe what it means for HR managers when employees win an election to unionize? What can HR do at this point to make sure the employee’s and company’s interests align?

Discussion 8.1

Describe how a high-performance work system is designed, and explain how the components of it must align horizontally and vertically to support one another and a firm’s strategy.

Weekly Summary 7.1 (Chapter 13 and 14 )

This week you will write and submit a minimum of two (2) full page (not including cover page and reference section) summary of the important concepts learned during the week. The paper will include a summary of the topics covered in the readings/chapters for this week.

Weekly Summary 8.1 ( Chapter 15 and 15)

No Plagiarismon time

Chapter

6
Implementing HR Strategy: High-Performance Work Systems

Learning Outcomes

Discuss how a firm’s strategy can be achieved with a high-performance work system and what its fundamental principles are

Describe how a high-performance work system is designed, and explain how the components of it must align horizontally and vertically to support one another and a firm’s strategy

Recommend processes for implementing and evaluating a high-performance work system

Discuss a high-performance work system’s potential outcomes for both employees and the organization

Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
High-Performance Work Systems (HPWS)
Specific combination of HR practices, work structures, and processes that maximizes employee’s:
Knowledge
Skill
Commitment
Flexibility
3

Figure 16.1 – Implementing HR Strategy: High Performance Work Systems
4

Figure 16.2 – Underlying Principles of High-Performance Work Systems
5

Egalitarianism and Engagement
Egalitarian work environments
Reduce status and power differences
Increase collaboration and teamwork, which increases productivity
Employee engagement can be increased by:
Involving them in decision making
Giving them power to act
6

Shared Information and Trust
Critical to the success of employee empowerment and involvement initiatives in organizations
Employees are better acquainted with work and can devise solutions to problems
Employees can make good suggestions for improving business and cooperate in major organizational changes
7

Knowledge Development
HPWS depends on the shift from touch labor to knowledge work
Employees need to learn in real time, on the job, using innovative new approaches to solve novel problems
Better informed employees, work better
8

Performance-Reward Linkage
Aligned interests of an organization and its employees make things go smoothly
Performance-based rewards ensure:
Employees share in the gains that result from performance improvement
Fairness and tends to focus employees on the organization
9

Figure 16.3 – Design Aspects of High-Performance Work Systems
10

Strategic Alignment
Horizontal fit: Situation in which all the internal elements of the work system complement and reinforce one another
Changes in one component affect all the other components
Vertical fit: Situation in which the work system supports the organization’s goals and strategies
High-performance work systems are designed to link employee initiatives to firm’s strategies
11

Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 16.4 – Achieving Strategic Alignment
12

HR Scorecard
Diagnoses horizontal fit and vertical fit in a straightforward way
Managers diagnose horizontal fit by assessing whether particular HR practices reinforce one another or work at cross purposes
Managers assess whether the HR practices significantly enable key workforce deliverables
Degree of vertical fit is evaluated by assessing the degree to which the workforce deliverables are connected with key strategic performance drivers
13

Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Implementing the System
Necessary actions for a successful HPWS
Make a compelling case for change linked to the company’s business strategy
Ensure that change is owned by senior and line managers
Allocate sufficient resources and support for the change effort
14

Implementing the System
Ensure early and broad communication
Ensure that teams are implemented in a systemic way
Establish methods for measuring the results of change
Ensure continuity of leadership and appoint champions of the initiative
15

Figure 16.5 – Implementing High-Performance Work Systems
16

Figure 16.6 – Building Cooperation With Stakeholders
17

Establishing a Communications Plan
Senior management need to establish the context for change and communicate the vision more broadly to the organization
Commitment from the top is essential to establish mutual trust between employees and managers
18

Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Establishing a Communications Plan
Two-way communication:
Results in better decisions
Helps to diminish the fears and concerns of employees when facing changes
19

Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Navigating the Transition to High-Performance Work Systems
Factors that determine the success of established implementation plan
Timetable and process for mapping key business processes
Redesigning the work flow
Training employees
HR managers help employees in transition to handle change
20

Evaluating and Sustaining the Success of the System
Process audit: Determining whether the high-performance work system has been implemented as designed
Evaluation process needs to focus on the goals of high-performance work systems
Building and fostering high-performance work systems is an ongoing activity
21

Evaluating and Sustaining the Success of the System
Develop strategies to retain and motivate employees to deal with the problem of employee poaching
Periodically re-evaluate high-performance work systems in terms of new organizational priorities and initiatives
22

Outcomes of High-Performance Work Systems
Employee outcomes and quality of work life
Benefits of proper implementation of high-performance work systems
New products, services, and markets
Employee satisfaction and increased job security
Outcome of improper implementation
Performance of an organization suffers
Employees develop poor work attitudes and habits
23

Organizational Outcomes and Competitive Advantages
Innovation
Greater flexibility
Higher productivity
Lower costs
Better responsiveness to customers
Higher profitability
24

Criteria for Success of High-Performance Work Systems
25

Valuable

HPWS increases value by establishing ways to increase innovation and efficiency, decrease costs, improve processes, and provide something unique to customers

Rare

HPWS help organizations develop and harness skills, knowledge, and abilities that are not equally available to all organizations

Difficult to imitate

HPWS are designed around team processes and capabilities that cannot be transported, duplicated, or copied by rival firms

Organized

HPWS combine the talents of employees and rapidly deploy them in new assignments with maximum flexibility

Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Outcomes
Explain the concepts of employee rights and
employer responsibilities
Identify and explain what the privacy rights of employees are
Establish disciplinary policies and differentiate between the two approaches to disciplinary action
Identify the different types of alternative dispute
resolution methods
*

Employee Rights
Guarantees of fair treatment that become rights when they are granted to employees by the courts, legislatures, or employers
Include rights of employees to:
Protest unfair disciplinary actions
Question genetic testing
Have access to their personal files
Challenge employer searches and monitoring
Be free from employer discipline for off-duty conduct
Federal and state courts view the privacy rights of employees as minimal
*

Employee Rights vs. Employer Responsibilities
Employer is responsible to provide a safe workplace for employees while guaranteeing safe, quality goods and services to consumers
Employers have to exercise reasonable care while
Hiring
Training
Assignment of employees to jobs
*

Employee Rights vs. Employer Responsibilities
Employers failure to honor the rights of employees, can result in
Costly lawsuits
Damaging the organization’s reputation
Hurting employee morale
Failure to protect the safety and welfare of employees or consumer interests can invite litigation from both groups
*

Negligent Hiring
Negligence: Failure to provide reasonable care when such failure results in injury to consumers or other employees
Negligent-hiring lawsuits have forced managers to take extra care in the employment and management
*

Job Protection Rights
Psychological contract: Expectations of a fair exchange of employment obligations between an employee and employer
Led to the development of legal principles about the security of one’s job
Employment-at-will relationship: Right of an employer to fire an employee without giving a reason and the right of an employee to quit when he or she chooses
Basic rule dominating the private-sector employment relationship

Job Protection Rights
Wrongful discharge: Discharge, or termination, of an employee that is illegal
Suits challenge an employer’s right under the employment-at-will to unilaterally terminate employees
Exceptions to the employment-at-will doctrine
Violation of public policy
Implied contract
Implied covenant
Whistle-blowing: Complaints to governmental agencies by employees about their employers’ illegal or immoral acts or practices
*

Job Protection Rights
Implied contract – Occurs when an implied promise by the employer suggests some form of job security to employee
Explicit contract – Formal written (signed) agreements grant to employees and employers agreed-upon employment benefits and privileges

Job Protection Rights
Constructive discharge: Employee’s voluntary termination of his or her employment because of harsh, unreasonable employment conditions placed on the individual by the employer
Discharge as a result of retaliation
Discharges and WARN Act
*

Privacy Rights
Freedom from unwarranted government or business intrusion into one’s personal affairs
Involves the individual’s right to be given personal autonomy and left alone
Drug testing in private sector is regulated by individual states
Pro–drug testing states permit testing, provided strict testing procedures are followed
*

Figure 13.3 – Recommendations for a Drug-Free Workplace Policy
*

Impairment Testing
Measures whether an employee is alert enough to work
Also called fitness-for-duty or performance-based testing
Advantage
Focuses on workplace conduct rather than off-duty behavior
Identifies employees impaired because of fatigue, stress, and alcohol use
*

Electronic Surveillance
Camera surveillance
Phone conversations and text communications
E-mail, internet, and computer use
Searches
Access to personnel files
Off-duty employee conduct
Off-duty employee speech
Workplace romances
Body art, grooming, and attire

Disciplinary Policies and Procedures
Discipline: Tool, used to correct and mould the practices of employees to help them perform better so they conform to acceptable standards
Disciplinary actions should be taken only for justifiable reasons
Employees should be treated fairly and consistently
*

Figure 13.6 – Common Disciplinary Problems
*

Result of Inaction
Failure to discipline employees aggravates a problem
HR department is responsible for:
Developing and having top management approve an organization’s disciplinary policies
Ensuring that disciplinary action taken against employees are consistent
Employee’s immediate supervisor
Logical person to apply the company’s disciplinary procedures and monitor the employee’s improvement
*

Figure 13.7 – A Disciplinary Model
*

Suggestions to Set Organizational Rules
Have to be reasonable and relate to safe and efficient operation of the organization
Consequences for breaking them should be written down and widely disseminated to all employees
Have to be clearly explained
Employees should sign a document stating that they have read and understand the organizational rules
Have to be reviewed, especially those rules critical to work success

Documenting Misconduct
Failure to record the misconduct of employees, can undermine a firm’s efforts to deal with the behavior
Records of employee misconduct are considered business documents
Admissible evidence in arbitration hearings, administrative proceedings, and courts of law
Significant cause of inadequate documentation
Managers do not know what constitutes good documentation
*

Inclusions in the Documentation
Date, time, and location of the incident(s)
Behavior exhibited by the employee (the problem)
Consequences of that action or behavior on the employee’s overall work performance and/or the operation of the employee’s work unit
Prior discussion(s) with the employee about the problem
Disciplinary action to be taken and the improvements expected should be documented
*

Inclusions in the Documentation
Consequences of failing to make the improvements by a certain follow-up date
Employee’s reaction to the supervisor’s attempt to change his or her behavior
Names of witnesses to the incident (if applicable)
*

Investigative Interview
Should be conducted to make sure the employee is fully aware of the organization’s rules and he or she has not followed them
Should concentrate on how the offense violated the performance and behavior standards expected
Employee must be given a full opportunity to explain his or her side of the issue
Employees do not have the right to have an attorney present during an investigative interview
*

Progressive Discipline
Application of corrective measures by increasing degrees
When applied properly, employees:
Always know where they stand regarding offenses
Know what improvement is expected of them
Understand what will happen next if improvement is not made
*

Positive or Nonpunitive Discipline
System that focuses on early correction of employee misconduct, with the employee taking total responsibility for correcting the problem
Implementation
Conference between the employee and the supervisor to find a solution to the problem
Second conference to determine why the solution agreed to in the first conference did not work
One-day decision-making leave given to the employee to decide whether he or she wishes to continue working
*

Discharging Employees
Have to be undertaken only after a deliberate and thoughtful review of the situation
In cases of lack of fair treatment by management, an employee has a right to file wrongful discharge suit
Discharge guidelines are applied to determine if a firm had a just cause for termination
*

Figure 13.9 – Just Cause Discharge Guidelines
*

Informing the Employee
Employee must be informed honestly and tactfully of the exact reasons for the action
Helps the employee face the problem and adjust to the termination in a constructive way
Termination meetings should be held in a neutral location to prevent the employee from feeling unfairly treated
Termination details of the employee should be kept confidential
*

Due Process
Procedures that constitute fair treatment, such as allowing an employee to tell his or her story about an alleged infraction and defend against it
Ensures that a full and fair investigation of employee misconduct occurs
Provided through the employer’s appeals procedure
*

Alternative Dispute Resolution (ADR)
Term applied to different employee complaint or dispute resolution methods that do not involve going to court
Used in nonunion organizations
ADR agreements are signed by employees when they receive their offer letters or handbooks
Must be fair and equitable to employees and employers
*

Step-Review System
System of reviewing employee complaints and disputes by successively higher levels of management
Managers are required to provide a full response to the complaint within a specified time period
Employee is allowed to bypass meeting if he or she fears reprisal
Decision is not appealable
*

Peer-Review System
System of reviewing employee complaints that utilizes a group composed of equal numbers of employee representatives and management appointees
Group weighs evidence, considers arguments and, after deliberation, votes to render a final decision
Sole method for resolving employee complaints, or in conjunction with step-review system
Benefit – Creates a sense of justice among employees
*

Open-Door Policy
Settles grievances that identifies various levels of management above the immediate supervisor for employee contact
Problems
Managers do not like to listen honestly to employee complaints
Fails to guarantee consistent decision making
Lacks credibility with employees
Working out grievances with immediate supervisors can make open-door policy work better
*

Ombudsman System
Ombudsman: Designated individual from whom employees may seek counsel for resolution of their complaints
Listens to an employee’s complaint and attempts to resolve it by seeking an equitable solution
Works cooperatively with both sides to reach a settlement
Must be able to operate in an atmosphere of confidentiality
*

Mediation and Mediator
Mediation: Use of an impartial neutral to reach a compromise decision in employment disputes
Flexible process that can be shaped to meet the demands of the parties
Mediator: Third party in an employment dispute who meets with one party and then the other in order to suggest compromise solutions
Fact finder and an open channel of communication between the parties
Have no authority to force either side toward an agreement
*

Arbitration
System in which employee and employer present their cases to an arbiter and then he or she makes a decision that the parties have agreed to be bound by
Arbiter – Retired judge
Resolves discrimination suits related to
Age
Gender
Sexual harassment
Race
*

Managerial Ethics in Employee Relations
Ethics: Set of standards of conduct and moral judgments that help to determine right and wrong behavior
Focus attention on an organization’s ethical values
Provide basis for managers to evaluate plans and actions
Goals of ethics training
Avoid unethical behavior and adverse publicity
Gain strategic advantage
Treat employees in a fair and equitable manner
*

Learning Outcomes
Reflect upon reasons that employees join unions
Describe the process by which unions organize employees and gain recognition as their bargaining agent
Outline the challenges faced by HR managers when union representation is voted into a company
Discuss the bargaining process and the bargaining goals and strategies of a union and an employer
Describe a typical union grievance procedure and explain the basis for arbitration awards
*

Labor Relations Process
Workers desire collective representation
Union begins its organizing campaign
National Labor Relations Board (NLRB) representation process begins
NLRB: Agency responsible for administering and enforcing the Wagner Act
Collective negotiations lead to a contract
Contract is administered
*

Figure 14.1 – The Labor Relations Process
*

Why Employees Unionize
Union shop: Provision of the labor agreement that requires employees to join the union as a requirement for their employment
Primary reasons
Economic needs – Dissatisfaction with wages, benefits, and working conditions
Dissatisfaction with management – Managerial practices regarding promotion, transfer, shift assignment, or other job-related policies are administered in an unfair or biased manner

Why Employees Unionize
Social and leadership concerns – Employees whose needs for recognition and social affiliation are being frustrated
Union steward: Employee who as a non paid union official represents the interests of members in their relations with management
*

Union Avoidance Practices
Pay
Promote more employees from within
Conduct cultural audits
Offer job rotations and training programs
Share information with employees
Have desirable working conditions
*

Organizing Steps
Employee/union contact
Employees and union officials meet up to explore the possibility of unionization
Initial organizational meeting
To identify employees who can help the organizer direct the campaign
To establish communication chains that reach all employees
*

Organizing Steps
Formation of in-house organizing committee
Authorization card: Statement signed by an employee authorizing a union to act as a representative of the employee for purposes of collective bargaining
Election petition and voting preparation
Organizer seeks a government-sponsored election filing representation petition with the NLRB
Contract negotiations
Represent struggle between the union and employer
*

Aggressive Organizing Tactics
Political involvement
Neutrality agreements
Organizer training
Corporate campaigns
Information technology
*

Employer Tactics Opposing Unionization
Stressing favorable employer-employee relationship experienced without a union
Emphasize current advantages in wages, benefits, or working conditions the employees enjoy
Emphasize unfavorable aspects of unionism
Strikes, payment of union dues, and special assessments
Initiate legal action when union members and leaders engage in unfair labor practices
*

How Employees Become Unionized
Bargaining unit: Group of two or more employees who share common employment interests and conditions and may reasonably be grouped together for purposes of collective bargaining
In disputes, the NLRB determines appropriate bargaining unit on the basis of a similarity of interests among employees within the unit
*

NLRB Representation Election
Pre-election hearing
Held prior to the election with the employer and union seeking to represent the employees
Important issues
Verification of the authorization cards
NLRB’s jurisdiction to hold the election
Determination of the bargaining unit
Date of the election and the voting choice(s) to appear on the ballot
*

NLRB Representation Election
If union wins the majority of votes in the election
NLRB certifies the union as the exclusive bargaining unit representative with which the employer must bargain
Exclusive representation: Legal right and responsibility of the union to represent all bargaining unit members equally, regardless of whether employees join the union or not
*

Types of Unions
Craft unions: Represent skilled craft workers
Industrial unions: Represent all workers employed along industry lines
Employee associations: Represent various groups of professional and white-collar employees in labor-management relations
*

Public Unions
Differences between public and private sector collective bargaining
No national boards governing public sector labor relations
Public sector collective bargaining falls within the separate jurisdiction of each state
Diversity exists among the various state laws
*

Impact of Unionization on Managers
Wages and benefits are higher in union organizations compared to similar nonunion organizations
Unions have a significant effect on the prerogatives exercised by management in making decisions about employees
Unionization restricts the freedom of management to formulate HR policy unilaterally and challenges the authority of supervisors
*

Bargaining Process
Collective bargaining process: Negotiating a labor agreement, including the use of economic pressures by both parties
Preparing for negotiations
Includes assembling data to support bargaining proposals and forming the bargaining team
Gathering bargaining data
Economic data are gathered in the areas of wages and benefits
*

Bargaining Process
Internal data relating to grievances, disciplinary actions, transfers, promotions, overtime, and former arbitration awards are useful in formulating and supporting the employer’s bargaining position
Employer’s bargaining strategies and tactics
Union proposals and management responses to them
Listing of management demands, limits of concessions, and anticipated union responses
Development of a database to support management bargaining proposals and to counteract union demands
Contingency operating plan should employees strike
*

Bargaining Process
Negotiating the labor agreement
Bargaining zone: Area in which the union and the employer are willing to concede when bargaining
Good faith bargaining
Requires meetings to be held at reasonable times and places to discuss employment conditions
Requires that the proposals submitted by each party be realistic
Both parties must sign the written document containing the agreement reached through negotiations
*

Bargaining Process
Categories
Mandatory subject
Permissive subjects
Illegal subjects
Interest-based bargaining
Problem-solving bargaining based on a win-win philosophy and the development of a positive long-term relationship
*

Figure 14.2 – Bargaining Zone and Negotiation Influences
*

Management and Union Power in Collective Bargaining
Bargaining power: Power of labor and management to achieve their goals through economic, social, or political influence
Union bargaining power
Exercised by striking, picketing, or boycotting the employer’s products or services
*

Management and Union Power in Collective Bargaining
Management bargaining power
Hiring permanent replacement workers
Continuing operations staffed by management
Locking out employees
Resolving bargaining deadlocks
Unions and employers uses mediation and arbitration to resolve their bargaining deadlocks
Mediation – Voluntary process that relies on the communication and persuasive skills of a mediator
Arbitrator: Third-party neutral who resolves a labor dispute by issuing a final decision in disagreement
*

Labor Agreement
Formal binding document listing the terms, conditions, and rules under which employees and managers agree to operate
Issue of management rights
Management rights clause – Management’s authority is supreme in all matters except
Ones expressly conceded in the collective agreement
Areas where its authority is restricted by law
*

Labor Agreement
Union security agreements: Where an employer and the union agree on the extent to which the union may compel employees to join the union and how the dues will be collected
Union shop – Provides that any employee who is not a union member upon employment must join the union within thirty days or be terminated
Agency shop – Provides for voluntary membership
*

Figure 14.3 – Collective Bargaining Process
*

Administration of the Labor Agreement
Bulk of labor relations activity comes from daily administration of the agreement
No agreement could possibly anticipate all the forms that dispute takes
On signing the agreement, each side interprets ambiguous clauses to its own advantage
Differences are traditionally resolved through the grievance procedure
*

Negotiated Grievance Procedures
Grievance procedure: Formal procedure that provides for the union to represent members and nonmembers in processing a grievance
Grievance mediation
Way to resolve employee grievances
Listed as a formal step in the grievance procedure preceding arbitration
*

Figure 14.4 – Five-Step Grievance Procedure
*

Grievance Arbitration
Rights arbitration
Arbitration over interpretation of the meaning of contract terms or employee work grievances
Fair representation doctrine
Unions have a legal obligation to provide assistance to both members and nonmembers in labor relations matters
Submission agreement
Statement of the problem to be resolved
*

Arbitration Award
Formal written document given to both sides
Parts
Submission agreement
Facts of the case
Positions of the parties
Opinion of the arbitrator
Decision rendered
*

Factors Used in Deciding Cases
Wording of the labor agreement
Submission agreement as presented to the arbitrator
Testimony and evidence offered during the hearing
Arbitration criteria against which cases are judged
*

Contemporary Challenges to
Labor Organizations
Reasons for decrease in union membership
Shift from traditional unionized industries to high technology industries
Growth in the employment of part-time and temporary workers
Growth in small businesses, in which unionization is more costly and difficult to perform
Globalization of the workforce particularly among low wage employers
*

Contemporary Challenges to
Labor Organizations
Globalization and technological change
Offshoring: Work that was previously carried out in one country is moved to another country
Employers need to pay more attention to the relevant stakeholders such as unions, employees and communities in which they operate
Job loss in America is not due to offshoring, but rather due to technological changes

Learning Outcomes
Explain the political, economic, socio-cultural, and technological factors in different countries that HR managers need to consider
Identify the types of organizational forms used for
competing internationally
Explain how domestic and international HRM differ. Discuss the recruitment, selection, training, compensation, and performance appraisal needs for different types of employees working across borders
Explain how labor relations differ around the world
*

Introduction
Managing human resources across these international settings:
Leverage specialized skills
Provide cheaper labor
New ideas into the company
Issues in international HRM in helping employees adapt to a new and different environment outside their own country
Relocation
Orientation
Translation services
*

Analyzing Your International Environment
PEST (political, economic, socio-cultural, and technological) analysis
Audit of a company’s environmental influences to help them determine their strategy and HR response
PEST analysis can help you to:
Spot business or personnel opportunities
Spot trends in the business environment
*

Analyzing Your International Environment
Avoid implementing HR practices in a particular country where they can fail
Break free of old habits and assumptions about how people should be managed to help bring about innovative ideas for the entire company
Host country: Country in which an international corporation operates
*

Figure 15.1 – PEST Analysis
*

Analyzing Your International Operations
*

Figure 15.2 – Types of Organizations
*

Managing Your International Operations
*

Figure 15.3 – Changes in International Staffing over Time
*

Recruiting Internationally
Core criteria that are viewed as essential in worldwide recruiting efforts
Personal integrity
Drive for results
Respect for others
Capability
Virtually all countries have work permit or visa restrictions that apply to foreigners
*

Recruiting Internationally
*

Selecting Employees Internationally
Selecting employees in a foreign country environment can be difficult
Get to know the local market and customs in hiring
To understand local markets, HR managers can
Get to know the universities, technical schools, and primary schools in the area
Develop network in the business and government communities
Understand the employees of the firm’s competitors

Selecting Global Managers
Global manager: Manager equipped to run an international business
Skills required for global managers
Ability to seize strategic opportunities
Ability to manage highly decentralized organizations
Awareness of global issues
Sensitivity to issues of diversity
Competence in interpersonal relations
Community-building skills
*

Selecting Global Managers
Cultural environment: Communications, religion, values and ideologies, education, and social structure of a country
Core skills: Skills considered critical to an employee’s
success abroad
Augmented skills: Skills helpful in facilitating the efforts of expatriate managers
*

Selecting Global Managers
Steps involved in selecting individuals for an international assignment
Begin with self-selection
Create a candidate pool
Assess candidates’ core skills
Assess candidates’ augmented skills and attributes
Companies that have selected the best candidates experience high expatriate failure rates
Failure rate: Percentage of expatriates who do not perform satisfactorily
*

Figure 15.5 – Causes of Expatriate Assignment Failure
*

Figure 15.6 – Expatriate Adjustment Factors
*

Training and Development
When employees are sent aboard for an assignment, it is critical to provide them with training
Companies have found that good training programs help them attract the employees they need from host countries
*

Content of Training Programs
Employees working internationally need to know the:
Country where they are going
Country’s culture
History, values, and dynamics of their own organizations
Sensitivity training can help expatriates overcome ethnic prejudices
*

Figure 15.7 – Preparing for an International Assignment
*

Content of Training Programs
Essential training program content
Language training
Cultural training
Assessing and tracking career development
Managing personal and family life
Repatriation
*

Language Training
English is universally accepted as the primary language for international business
Designated language for meetings and formal discourse
Learning the language is only part of communicating in another culture
*

Cultural Training
Each culture has its expectations for the roles of managers and employees
Studying cultural differences can help managers identify and understand work attitudes and motivation in other cultures
*

Advantages of an International Assignment
Increase a person’s responsibilities and influence within the corporation
Provides a set of unique experiences beneficial to
both the individual and the firm
Enhances understanding of the global marketplace
Offers the opportunity to work on a project important
to the organization
*

Figure 15.9 – Selected Foreign-Born Executives
*

Managing Personal and Family Life
Culture shock: Perpetual stress experienced by people who settle overseas
Employers offer to accommodate dual-career partnerships such as
Spouses career and life planning counseling
Continuing education
Intercompany networks to identify job openings in other companies
Job-hunting/fact-finding trips
Help securing work permits abroad
*

Repatriation
Process of transition for an employee home from an international assignment
Designed to prepare employees for adjusting to life at home
Employees are given guidance about how much the expatriate experience have changed them and their families
*

Compensation
Different countries have different norms for
employee compensation
Financial incentives versus nonfinancial incentives
Individual rewards versus collectivist concerns for internal equity and personal needs
General rule
Create a pay plan that supports the overall strategic intent of the organization
*

Compensation of Host-Country Employees
Hourly wages can vary from country
to country
Paid on the basis of:
Productivity
Time spent on the job
Combination of these factors
Employee benefits can range from country to country
*

Compensation of Host-Country Managers
Global compensation system
Centralized pay system whereby host-country employees are offered a full range of:
Training programs
Benefits
Pay comparable with a firm’s domestic employees
Companies with centralized systems are having higher effectiveness and satisfaction levels with their compensation systems
*

Compensation of Expatriate Managers
Effective international compensation program must:
Provide an incentive to leave the United States
Allow for maintaining an American standard of living
Provide for security in countries that are politically unstable or present personal dangers
Include provisions for good health care
Reimburse the foreign taxes the employee is likely to have to pay and help him or her with tax forms and filing
*

Compensation of Expatriate Managers
Provide for the education of the employee’s children abroad, if necessary
Allow for maintaining relationships with family, friends, and business associates via trips home and other communication technologies
Facilitate the expatriate’s reentry home
Be in writing
*

Compensation of Expatriate Managers
Home-based pay: Based on an expatriate’s home country’s compensation practices
Balance-sheet approach: Compensation system designed to match the purchasing power in a person’s home country
Calculate base pay
Figure cost-of-living allowance (COLA)
Add incentive premiums
Add assistance programs
*

Compensation of Expatriate Managers
Split pay: System whereby expatriates are given a portion of the pay in the local currency to cover the day-to-day expenses
Portion of the pay in the home currency to safeguard the earnings from changes in inflation or foreign exchange rates
Host-based pay: Expatriate pay is comparable to that earned by employees in a host country to which the expatriate is assigned
*

Compensation of Expatriate Managers
Localization: Adapting pay and other compensation benefits to match that of a particular country
Reduces resentment among local staff members
if they are earning significantly less
Other issues
Adequacy of medical care
Personal security
Compensation policies of competitors
*

Performance Appraisal
Appraisal of employee’s performance
Home-country evaluations
Host-country evaluations
Home versus host-country evaluations
Local managers with daily contact with the person are to have an accurate picture of his or her performance
*

Performance Appraisal
Performance criteria
Steps related to calculating the ROI of an assignment
Defining the assignment’s objectives
Agreeing on the quantifiable measurements for the assignment
Developing an equation that converts qualitative behavior into quantifiable measurements
Evaluating the expatriate’s performance against these measurements
Calculating the ROI
*

Performance Appraisal
Providing feedback
Purpose of repatriation interviews
Help expatriates reestablish old ties with the home organization
Address technical issues related to the job assignment itself
Address general issues regarding the company’s overseas commitments
Very useful for documenting insights an individual has about the region
*

Analyzing the International Labor Environment
Factors of union strength
Level of employee participation
Per capita labor income
Mobility between management and labor
Homogeneity of labor (racial, religious, social class)
Unemployment levels
Companies are increasingly giving offshore jobs to countries where labor costs are lower, unionized workers have been forced to make concessions
*

Collective Bargaining in Other Countries
When we look at other countries, process can vary widely, with regard to the role of government
Collective bargaining can take place at the firm, local, or national levels
Government involvement is only natural where parts of industry are nationalized
*

International Labor Organizations
International Trade Union Confederation (ITUC) – Active of the international union organizations
Headquarters in Brussels
International Labour Organization (ILO) – Specialized agency of the United Nations created in 1919
*

Labor Participation in Management
In European countries, provisions for employee representation are established by law
Codetermination: Representation of labor on the board of directors of a company
Power is with the shareholders who are assured the chairmanship
*

Turn in your highest-quality paper
Get a qualified writer to help you with

“ 3 Discussions and 2 weekly summary ”

Get high-quality paper

NEW! AI matching with writer

Order an Essay Now & Get These Features For Free:

Turnitin Report

Formatting

Title Page

Citation

Outline

Place an Order