The Effective Management of International Human Resources - Research Paper Example

 As more business is increasingly becoming more globalized, understanding ways for effective operation abroad has turned out to be a matter of necessity (Sundaram & Black, 1992, cited in De Ciere, Cox & Fenwick, 2004, p. 2). Of which, companies find “expatriation, the practice of sending home country managers to other country locations” (O'Boyle, 1989, p. B1), strategically essential although an expensive investment (Krell, 2005, p. 1). Thus, the effective management of international human resources becomes very important. However, despite this acknowledgment, management practice reveals that “many organizations are still coming to terms with the human resources issues associated with international operations” (Dowling, 1986, cited in Scullion, 1994, p. 86), especially so that international human resource management (IHRM) is only on its infantile stage as a field of academic study (Laurent, 1986, p. 91). One area in IHRM taking much attention for study today is the training and appraisal of expatriate employees, who have been more and more perceived and utilized “as strategic coordination and control mechanisms for multinational organization in their ever-expanding global operations” (Adler 1991; Bartlett & Ghoshal, 1987; Boyacigiller, 1990; Edstrom & Galbraith, 1977; Hedlund, 1986; Kobrin, 1988; Morrison & Roth, 1992; Yip, 1989, cited in Gregersen, Hite, & Black, 1996, p. 711). An expatriate is an employee sent abroad by his/her mother-company, yet remains in its payroll (Varner & palmer, 2002, p. 8). Principally companies employ expatriates for a number of reasons, but the bottom line of which is the achievement of the company’s goal. Expatriates are charged with facilitating the bidirectional flow of knowledge and resources between company headquarters and overseas subsidiaries. Typically, the company expects its expatriate managers to infuse company philosophy into the local subsidiary, as well as to impose policies and procedures consistent with headquarter operations. They are often responsible for the movement of financial resources, whether this be physical capital or the ability to tap local debt and equity markets. They bring with them managerial as well as technical expertise, functional capabilities, or the training necessary to develop these among the local personnel, and structural and control systems. (Downes, Varner, & Musinski, 2007, p. 1) With such pivotal strategic roles expected of expatriate managers, it is paramount that the company not only selects the right person, but also has him/her sufficiently trained for the job, especially so that “international literature indicates that expatriate failure is a persistent and recurring problem, particularly for U.S. multinationals (Desatnick and Bennett, 1978; Mendenhall and Oddou, 1985; Tung, 1981, cited in Scullion, 1994, p. 86). Research denotes a high turn-over rate both for short and long-term expatriate assignments with 25-40% among American expatriates (Black, Gregersen, Mendenhall and Stroh, 1999, cited in Varner & Palmer, 2002, p.9.), citing lack of training as one of the main reasons (Varner & Palmer, 2002, p.9.). Since training expatriates is viewed essential to the success of MNCs, added by the fact that training involves a considerable investment of the organization’s resources: time, effort and financial resources, the end goal of any training should always be clear. As Helen Keller said: “The only thing worse than having no sight, is having sight but no vision” (cited in “Something to think about,” 2004, p. 1). Thus, giving any kind of training without clearly addressing anything is not training at all, as training is meant to improve expatriate’s performance. According to Palmer and Varner (2002), “training and development of expatriates should be tied to overall organizational goals… never focus primarily on benefiting the individual expatriate” (p. 8). Thus, measuring its success would mean more of organizational rather than individual expatriate’s benefits, because if not, training would be the organization’s lost, as it would have not acquired the international knowledge gained by the expatriate. Remember, “Intellectual capital matters more than any other asset” (Drucker, 1999, cited in Palmer and Varner, 2002, p. 13). It would be much better, of course, that both personal growth and organizational objectives be achieved, because the more the expatriate is personally enhanced in the framework of the organization’s objectives the better. Furthermore, as organizations clearly define their specific goals with their international operations, the more specific and customized, resultantly more successful the expatriates training would be (Palmer and Varner, 2002, p. 9), because analogously the specific sickness is clearly identified and treated. With expatriates placed in a doubly difficult situation, where they are expected to efficiently and effectively bring about company’s goal in an environment totally different from theirs, technical ability is not enough. There should be cultural sensitivity. It is imperative for them to learn a great deal about the language (Varner & Palmer, 2002, p. 9), business practices and work ethics specific to where they will be assigned (Downes, Varner, & Luke 2007, p. 2). Thus, the need for expatriate’s cross cultural training to facilitate their quicker and easier adjustment to their new environment (Brislin, 1981; Landis and Brislin, 1983; Mendenhall and Oddou, 1986; Tung, 1987, cited in Brewster and Pickard, 1994, p. 18), as studies “found a positive relationship between cross-cultural training and the development of appropriate perceptions relative to members of another culture; that training was positively correlated with adjustment; and that there was a positive relationship to performance” (Black & Mendenhall, 1990, cited in Brewster and Pickard, 1994, p. 19). Although, studies, though too little, implies that what is more important in training is not the type but the process (Brewster and Pickard, 1994, p. 19), with both documentary and interpersonal approaches found equally effective (Earley, 1987, cited in Brewster and Pickard, 1994, p. 19). Aside from extensive language and cross-cultural training, in a study of Cornell Hotel Administration alumni working abroad, next to cultural sensitivity, interpersonal skills and managerial flexibility scored highest among a number of managerial skills found most important (Kriegl, 2000, cited in Downes, Varner & Luke, 2007, p. 3), with the purpose of sending an expatriate abroad as determinant of which among the three skills have to be emphasized (Stanek, cited in Downes, Varner & Luke, 2007, p. 3). “As international activities of firms increase and employees are sent on foreign assignments to implement either global or regional strategies, accurate [expatriate performance appraisals] EPAs will likely become more critical to developing a locally responsive and globally integrated organization” (Gregersen, Hite, & Black, 1996, p. 721). And to maximize results, Gregersen, Hite and Black (1996) recommended that HRMs should give considerations to the following in evaluating expatriates effectively. First, the unique context in which the expatriate performs a similarly unique work demand compared to a domestic assignment, can be of greatest importance in evaluating expatriate’s performance (Cardy and Dobbins 1994; Ilgen, Barnes-Farrell and McKellin 1993; Mendenhall and Oddou 1991, cited in Gregersen, Hite, & Black, 1996, p. 711), as assignments abroad widely differ in context, specifically “in their societal, legal, economic, technical, and physical demands” (Murphy & Cleveland, 1991, cited in Gregersen, Hite, & Black, 1996, p. 711). Critical to this contextual understanding is the effective utilization of previous expatriates’ knowledge and experiences (Black et al. 1992, 1992b; Mendenhall and Oddou 1991, cited in Gregersen, Hite, & Black, 1996, p. 712). Second, since expatriates work under varied considerations, the usual domestic performance appraisal is short to accurately evaluate the expatriate. Instead, a multiple performance criteria that would give consideration to important aspects such as performance criteria – “those aspects of employee performance that are measured or evaluated… the foundation for other aspects of the appraisal system (Carroll & Schneir, 1982, cited in Gregersen, Hite, & Black, 1996, p. 712); hard criteria – those are “performance-based or outcome-based (i.e., profits, market share, etc.)” (Carroll & Schneir, 1982, cited in Gregersen, Hite, & Black, 1996, p. 713)… easier to defend legally (Bernardin &Cascio 1984, cited in Gregersen, Hite, & Black, 1996, p. 713) and… reduce the chances for either subtle or intentional discrimination (Cox & Nkomo 1986, cited in Gregersen, Hite, & Black, 1996, p. 713); soft criteria – such … are often relationship- or trait-based (Bernardin and Villanova 1986; Carroll and Schneir 1982; Schuler and Huber 1993, cited in Gregersen, Hite, & Black, 1996, p. 714); and contextual criteria – “deal with factors that result from the situation in which the employee is performing” (Gregersen, Hite, & Black, 1996, p. 714). With these in consideration, given the inability of standard forms to “capture the complexity of expatriate assignments” (Peters et al. 1985, cited in Gregersen, Hite, & Black, 1996, p. 714), accuracy of EPA may be increased by customizing EPA forms giving attention to the distinct character of specific country assignments (Ilgen et al. 1993; Mendenhall and Oddou 1991, cited in Gregersen, Hite, & Black, 1996, p. 714). Third, since expatriates deal with different levels of management and employees, it is but logical that multiple raters should be utilized by increasing the number of total raters, seeking a more balanced proportion of raters from both the within and outside the host country, and increasing the use of host-country nationals (Gregersen, Hite, & Black, 1996, p. 715 & 717). Lastly, since “in the expatriate setting… performance context… changes dramatically” (Gregersen, Hite, & Black, 1996, p. 715) appraisal should be done more frequently not only to improved perfomence but also to troubleshoot possible problems intime. References Baliga, G.M., and Baker, J.C. (1985). "Multinational Corporate Policies for Expatriate Managers: Selection, Evaluation." Advanced Management Journal, 50 (4): 31-38. Brewster, Chris, and Pickard, Juana. (1994). “Evaluating Expatriate Training.” International Studies of Management & Organization, 24 (3): 18-27. De Cieri, Helen, Cox, Julie Wolfram, and Fenwick, Marilyn. (2004). “Representing Strategic International Human Resource Management: Is the Map the Territory?” A Working Paper for the Department of Management, Monash University, Australia. Retrieved 8 December 2009 http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1116&context=cahrswp Downes, Meredith,Varner, Iris I., and Musinski, Luke. (2007). “Personality traits as predictors of expatriate effectiveness: a synthesis and...” Review of Business, 1-18. Retrieved 8 December 2009 http://www.allbusiness.com/management/4508135-1.html Drucker, P.F. (1999). "Knowledge--Worker Productivity: The Biggest Challenge." California Management Review, 41(2): 79--94. Gregersen, Hal B., Hite, Julie M., and Black, J. Stewart. (1996). “Expatriate Performance Appraisal in U.S. Multinational Firms.” Journal of International Business Studies, 27 (4): 711-731. Krell, Eric. (2005). “Evaluating returns on expatriates: though difficult to ascertain, measuring the return on the cost of expatriate assignments is necessary to justify the expensive investment.” HR Magazine. 1 March. Retrieved 8 December 2009 http://www.allbusiness.com/personal-finance/investing/358151-1.html Laurent, A. "The Cross-Cultural Puzzle of International Human Resource Management." Human Resource Management, 25 (1986): 91-102. O'Boyle, T. (1989). "Grappling With the Expatriate Issue." The Wall Street Journal. December 11. Scullion, Hugh. (1994). “Staffing Policies and Strategic Control in British Multinationals.” International Studies of Management & Organization, 24 (3): 86-96. “Something to think about.” (2004). Training with Purpose. Retrieved 10 December 2009 http://www.trainingwithpurpose.org/somethingtothinkabout.html. Varner, Iris I., and Palmer, Teresa M. (2002). “Successful Expatriation and Organizational Strategies.” Review of Business, 23 (2): 8-12. Read More