Professional Documents
Culture Documents
Contents
1. Definition
Recruitment
1. 2. 3. 4. 5. 6. 7. 8. Definition Alternatives to Recruitment Environment of Recruitment The Recruitment Proces Recruitment Sources Recruitment Methods Internet Recruiting Selection 8.1 Definition 8.2 The Selection Process
Downsizing
1. Definition 2. Reasons for Downsizing
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Definition Components of a Total Compensation Program Direct Financial Compensation 3.1 Equity in Direct Financial Compensation 3.2 Factors of Individual Direct Financial Compensation 3.3 Job Pricing 3.4 Executive Compensation Indirect Financial Compensation 4.1 Measures of Indirect Financial Compensation 4.2 Profit Sharing Nonfinancial Compensation 5.1 The Job as a Total Compensation Factor 5.2 The Job Environment as a Total Compensation Factor Cafeteria Compensation
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Introduction Definition of Human Resource Development The Purpose of HRD The Importance of Change Concerning HRD Training and Development 5.1 Definition 5.2 The Training and Development Process 5.3 Special Subjects of Training and Development 5.3.1 Management Development 5.3.2 Orientation 5.3.3 Vocational Training Career Planning and Career Development 6.1 Definition 6.2 Career Security / Employability
Factors Influencing Career Planning Career-Impacted Life Stages Individual Career Planning Organizational Career Planning Career Paths Career Development Career Planning and Development Methods
Performance Appraisal 7.1 Definition 7.2 Uses of Performance Appraisal 7.3 The Performance Appraisal Process 7.4 Appraisal Criteria 7.5 Responsibility for Appraisal 7.6 Requirements 7.7 Performance Appraisal Methods 7.8 Problems in Performance Appraisal
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1. Definition
Human resource management deals with the availability of human resources and the efficiency of the personnel placement. There are several functional areas being associated with effective human resource management: - Job analysis - Human resource planning - Recruitment and selection - Human resource development - Compensation and benefits - Downsizing The main purpose of human resource management is to create and to keep the balance between the firms goals and the interests of the employees.
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Human resource management is part of every managers responsibility. The Human Resource manager und the human resource department assist all managers in many ways. During the last years the importance of HRM has changes: For many years it has been said that capital is the bottleneck for developing industry. I dont think this any longer holds true. I think it is the work force and the companys inability to recruit and to maintain a good work force that does constitute the bottleneck for production. I dont know of any mayor project backed by good ideas, vigor, and enthusiasm that has been stopped by a shortage of cash. I do know of industries whose growth has been partly stopped or hampered because they cant maintain an efficient and enthusiastic labor force, and I think this will hold true even more in the future. (G. Dressler (2003), S. 3)
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Human resource development is a major HRM function that consists not only training and development but also individual career planning, career development and performance appraisal. Training is designed to provide learners with knowledge and skills needed for their present job. Development involves learning that goes beyond todays job, it has a more long-term focus. Career planning is an ongoing process whereby an individual sets career goals and identifies the means to achieve them. Career development is a formal approach used by the organization to ensure that people with proper qualifications and experiences are available when needed. Through performance appraisal, employees are evaluated to determine how well they are performing their assigned tasks.
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3. Protagonists of HRM
There are several protagonists performing human resource management tasks: The human resource manager The line manager The top management The workers council (especially in Germany)
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Sales
Operations
Finance
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President
Sales Manager
Operations Manager
Finance Manager
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Manager Recruitment
Manager HRD
4.4 Outsourcing
Outsourcing is the process of transfering the responsibility for an area of services and its objectives to an external provider. By outsourcing certain projects, companies can save time and resources and redirect their energy to more strategic issues.
Manager Human Resource
HR Recruitment
HR Development
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Corporate Culture
Management Style
Employees and their Capabilities and Attitudes Other Units of the Organization
Informal Organization
Formal Organization
Labor Market
Unions
Competition
Customers
Shareholder
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Job Analysis
1. Definition
Job analysis is the systematic process of determining a jobs duties and responsibilities, its relation to other jobs, skills and knowledge required and working conditions under which it is performed. A job consists of a group of tasks which make sure that the organization achieves its goals. A position is the collection of tasks and responsibilities performed by one person. There is a position for every person in an organization. Job analysis is used to prepare job descriptions and job specifications. The job description is a document that provides information regarding the task, duties and responsibilities of the job. The minimum acceptable qualifications that a person should possess in order to perform are listed in the job specification.
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Tasks
Responsibilities
Duties
Job Analysis
Job Description
Job Specification
Knowledge
Skills
Abilities
...
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2. Job Analysis
The purpose of job analysis is to obtain answers to six important questions: 1. 2. 3. 4. 5. 6. What physical and mental tasks does the worker accomplish? When is the job to be completed? Where is the job to be accomplished? How does the worker do the job? Why is the job done? What qualifications are needed to perform the job?
Job analysis is perfomed on three occasions: First, it is done when the organization is founded. Second, it is performed when a new job is created. Third, it is used when jobs are changed significantly as a result of new technologies, methods, procedures, or systems.
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3. Job Description
The job description is a document that provides information regarding the task, duties and responsibilities of the job. It has to be relevant and accurate. Components of the job description are - major duties performed, - percentage of time devoted to each duty, - performance standards to be achieved, - Working conditions and possible hazards, - supervision and subordination, - the machines and equipment used on the job.
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4. Job Specification
The job specification is a document containing the minimum acceptable qualifications that a person should possess in order to perform a particular job. Items are requirements concerning skills, knowledge, abilities, experience ... Criteria are for example - knowledge of business - customer orientation - interpersonal skills / team player - ability to influence others - confidentiality - planing, organizing and time management - written and oral communication ...
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1. Definition
Human resource planning is the process of systematically reviewing human resoure requirements to ensure that the required numbers of employees with the required skills are available when and where they are needed. Human resource planning includes four factors: Quantity: How many employees do we need? Quality: Which skills, knowledge and abilities do we need? Space: Time: Where do we need the employees? When do we need the employees? How long do we need them?
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A requirement forecast is an estimate of the numbers and kinds of employees the organization will need at future dates in order to realize its goals. Before human resource requirements can be projected, the demand for the companys goods and services must be forecasted first. Forecasting requirements provide managers with the means of estimating how many and what types of employees will be required. Availability forecast is an estimate of the numbers and kinds of employees the organization will have got at future dates. The availability forecast is a process of considering incomings and outgoings during the planning period.
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Requirements > Qualifications: Human resource development, job rotation, job reduction Requirements > Qualifications: Promotion, transfer, job enlargement, job enrichment, organization development
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6. Qualification Profil
The qualification profil is a document containing qualifications which a person possesses. In order to check the aptitude the job specification and the qualification profil are compared.
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Recruitment
1. Definition
Recruitment is the process of attracting individuals - just in time, - in sufficent numbers and - with appropriate qualifications and encouraging them to apply for jobs. Identifying productive sources of applicants and using suitable recruitments methods are essentials to maximize recruiting effectiveness and efficiency.
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2. Alternatives to Recruitment
Even when human resource planning indicates a need for additional employees, a company may decide against increasing the size of its workforce. Alternatives to recruitment include outsourcing, contingent workers, employee leasing and overtime.
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3. Environment of Recruitment
External environment
Labor Market Conditions - Quality - Quantity Legal Considerations Corporate Image
Internal environment
Human Resource Planning Promotion Policies: - Promotion from within - or a policy of filling positions from outside the organization The Firms Knowledge of Employees
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Alternatives to Recruitment
Recruitment
External Recruitment sources High Schools Vocational Schools Colleges and Universities Competitors and Other Firms The Unemployed Older Individuals Self-employed Workers
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Preliminary Interview
Review of Applications
Selection Tests
Employment Interviews
New Employee
Physical Examination
Selection Decision
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There are several preliminary interviews: - Telephone interview - Computer interview - Videotaped interview
Preliminary Interview
Review of Applications
Selection Tests
Employment Interviews
New Employee
Physical Examination
Selection Decision
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An application should include - name, - address, - education, - work history, - certificates and - references.
Preliminary Interview
Review of Applications
Selection Tests
Employment Interviews
New Employee
Physical Examination
Selection Decision
Employment tests include cognitive aptitude tests, psychomotor abilities tests, job-knowledge tests, worksample tests, vocational interest tests, personality tests and drug and alcohol tests.
Preliminary Interview
Review of Applications
Selection Tests
Employment Interviews
New Employee
Physical Examination
Selection Decision
The employment interview is a goaloriented conversation in which interviewer and applicant exchange information.
There are several methods of interviewing: one-on-one interview group interview board interview stress interview assessment center
Preliminary Interview
Review of Applications
Selection Tests
Employment Interviews
New Employee
Physical Examination
Selection Decision
Preliminary Interview
Review of Applications
Selection Tests
Employment Interviews
New Employee
Physical Examination
Selection Decision
Personal reference checks may provide additional information about the applicant and allow verification. An effective and comprehensive background investigation relates to the provious employment, education, personal references, criminal history, credit history ... 55
Preliminary Interview
Review of Applications
Selection Tests
Employment Interviews
New Employee
Physical Examination
Selection Decision
The selection decision is when the final choice is made from among those who are still in the race after the Interview information, reference checks, background investigations are evaluated. The individual with the best overall qualification may not be hired. The person whose qualifications most closely conform to the requirements should be selected.
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Preliminary Interview
Review of Applications
Selection Tests
Employment Interviews
New Employee
Physical Examination
Selection Decision
The physical examination must be directly relevant to the job requirements. The purpose of the physical examination is to determine whether the applicant is physically capable of performing the tasks.
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Preliminary Interview
Review of Applications
Selection Tests
Employment Interviews
New Employee
Physical Examination
Selection Decision
The selection results should be made known to both the successful and the unsuccessful candidates as soon as possible.
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Downsizing
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1. Definition
Downsizing is the process of reducing the surplus of employees. If a surplus of employees is projected by the human resource planning, ways must be found to reduce the numbers of workers. There are several ways of downsizing: Restriced hiring Reduced hours Early retirement Non-prolongation of limited employment contracts Non-prolongation of leasing contracts Outplacement Layoffs
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Restriced hiring: When a firm implements a restricted hiring policy, it reduces the workforce by not replacing employees who leave. New workers are hired only when the overall performance may be affected. Reduced hours: Instead of working 40 hours a week, the management decides to cut each employees time to 30 or 20 hours. This cutback does not normally apply to the management level. Early retirement: Older employees (older than 58) have the possibility to retire at the age of 58 without substantial financial disadvantages. Outplacement: The employer helps the employee to find a new job. Layoffs: The employee is dismissed. He / she is no longer employed. Normally layoffs base on a combination of seniority, productivity and ability.
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1. Definition
Compensation is the total of all rewards which employees get in return for their services. Direct financial compensation consists of the pay that a person receives in the form of wages, salary, bonuses and commissions. Indirect financial compensation (benefits) are all financial rewards that are not included in direct compensation. These are for example insurance and other programs for health, safety, security and general welfare. Nonfinancial compensation consists of the satisfaction that a person receives from the job itself or from the psychological and/or physical environment in which the person works.
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The Employee
The Job
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Organizational factors that should be considered include compensation policies, organizational politics and the ability to pay. This contains the decision to be a pay leader, pay follower or to strive for an average position in the labor market.
The Organization
The Employee
The Job
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Factors thatProf. Dr. Jutta Rump should be considered include - unemployment rate - wage and salary survey, - cost of living, - labor unions, - the economy and - labor law / employment legislation.
The Labor Market
The Organization
The Employee
The Job
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The Organization
The Employee
The Job
The organization pays for the value it attaches to certain duties, responsibilities and other job-related factors. Management techniques utilized for determining a jobs relative worth include job analysis, job description and job evaluation.
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The factors related to the employee include performance-based pay (merit pay, variable pay, skill-based pay, competency-based pay), seniority, experience, membership in the organization, potential, political influence...
The Organization
The Employee
The Job
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Disability insurance: The disability insurance protects employees against loss of earnings resulting from total disability. Workers compensation: This benefit provides a degree of financial protection for employees who incur expenses resulting from jobrelated accidents or illnesses. Payment for time not worked: This includes rest periods, coffee breaks, lunch periods, cleanup time, travel time, paid vacations, sick pay, military duty, civic duties, bereavement time... Employee services: Employee services are relocation benefits, child care, educational assistance, food servies and financial services ( for example loans)
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5. Nonfinancial Compensation
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Working conditions achieve satisfaction and motivation especially when workplace flexibility exists. Workplace flexibility is a key factor in attracting and retaining talented and qualified employees. Programs of workplace flexibility include flextime, a compressed workweek, job sharing, telecommuting, part-time work, modified retirement.
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6. Cafeteria Compensation
Cafeteria compensation plans permit flexibility in allowing each employee to determine the compensation package which best satisfies his or her particular needs. The rationale behind the cafeteria plans is that employees have individual needs and preferences.
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1. Introduction
In every market customers are demanding higher quality, lower costs, and faster cycle times. To meet these requirements, firms must continuously improve their overall performance. Rapide advances in technology and improved processes have been important factors in helping businesses. However, the most important competitive advantage is the workforce and especially the competency, knowledge and skills. The function / functional area dealing with competency, knowledge and skills is Human Resource Development.
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Improved performance is the buttom-line purpose of HRD. HRD is a major HRM function that consists not only training and development but also individual career planning, career development and performance appraisal. Training is designed to provide learners with knowledge and skills needed for their present job. Development involves learning that goes beyond todays job, it has a more long-term focus. Career planning is an ongoing process whereby the individual sets career goals and identifies the means to achieve them. Career development is a formal approach used by the organization to ensure that people with proper qualifications and experiences are available when needed. Through performance appraisal, employees are evaluated to determine how well they are performing their assigned tasks.
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5.1 Definition
Training is designed to provide learners with knowledge and skills needed for their present job. Development involves learning that goes beyond todays job, it has a more long-term focus. It prepares employees to keep pace with the organization as it changes. Training and development acitivities have the potential to align employees of a company with its corporate strategies.
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Training-off-the-Job
-Business Games - Case Study - Videotapes - In-Basket Training - Role Playing - Distance Learning and Videoconferencing - Classroom Programs - Simulators - Quality Circle - Work Groups
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Purposes of Orientation
Orientation acquaints employees with - the employment situation (the job, department ...), - company policies and rules, - compensation and benefits, - corporate culture. Orientation influences - the socialization, - team membership, - dealing with change.
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6.1 Definition
A career is a general course that a person chooses to pursue throughtout his or her working life. Career planning is an ongoing process whereby an individual sets career goals and identifies the means to achieve them. The major focus of career planning should be on matching personal goals with opportunities that are realistically available. In organizational career planning, the organization identifies paths and activities for indvidual employees as they develop. Organizational career planning is necessary to help ensure that a firm improves its abilitiy to perform by identifiying needed capabilities and the type of people needed to perform in an ever-evolving business environment. Career development is a formal approach used by the organization to help people acquire the skills and experiences needed to perform current and future jobs. Career development is important to maintain a motivated and committed workforce.
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Stage 1
Stage 2
Growth Growth
Exploration Exploration
Establishment Establishment
MaintenMaintenance ance
Decline Decline
From 15 to 24
From 25 to 44 Finding a suitable occupation; engaging in those activities that help establish a career
Between the age of 45 and 64 Making an effort to maintain and to push the career
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7. Performance Appraisal
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7.1 Definition
Performance appraisal is a system which reviews and evaluates an individuals or teamss job performance. Besides an effective system should evaluate accomplishments, should develop plans for the individual and the team and should assess employee potential. The primary goal of performance appraisal is to improve performance.
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Stage 1 Stage 1
Stage 2 Stage 2
Stage 3 Stage 3
Stage 4 Stage 4
Stage 5 Stage 5
Appraising performance
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In practice the most common appraisal critiera are qualifications, traits (attitude, appearance, initiative...), behaviors (leadership style, teamwork, cooperation, customer service orientation...), task outcomes, improvement potential.
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7.6 Requirements
An effective performance appraisal requires the following factors: Job-related criteria Performance expectations Standardization Documentation Trained appraisers Continuous open communication Due process
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1. Definition
A strategy is the conpanys long-term plan for how it will balance its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage. (Based on the SWAT analysis) Strategy was traditionally a job mostly for the firms top operating (line) managers. Thus, the president and his or her staff might decide to enter new markets, drop product lines, or embark on a five-year cost cutting plan. Then he or she would more or less leave personnel implications of that plan for the human resource management to carry out. Today, HR usually plays a more central role. More and more it is the firms workforce its knowledge, commitment, skills, and training that provides the competitive advantage for world-class companies. That means an upgrading of the HRM.
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Today, HRs role is shifting from protector and screener to strategic partner and change agent. The focus is on the strategic contribution of HRM. Strategic human resource management links the human resource management with the strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility. Ideally HR and top management together craft the companys business strategy. That strategy then provides the framework that guides the design of specific HR activities. This should produce the employee competencies and behaviors that in turn should help the business implement its business strategy and realize its goals.
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HR strategies are the cources of action HR uses to help the company achieve its strategic aims. Example: A HR strategy could be building a committed workforce by creating a two-way communication, by offering competitive salaries and incentives, by making career planning HRs role as a strategic partner: HRM becomes an equal partner in both the formulation and the implementation of the companys strategies.
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Globalization
Many companies market all over the world. Firms are globalizing their production, too, by putting facilities where they are most advantageous. The bottom line is that the growing integration of the world economy into a single, huge marketplace is increasing the intensity of competition in a wide range of manufacturing and service industries. Deregulation has reinforced this trend, as nations eliminate the legal barriers that protect industries. More globalization means competition, and more competition means more pressure to improve to find new ways to do things better and less expensive.
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Technological Advances
It has been estimated that there will be more technological change in the next 50 years than in the last 1000 years. The world has never before seen technological changes occur as rapidly as they are presently happening in the computer and telecommunications industries. One estimate is that technological changes are coming so fast that a person may have to change his or her entire skill repertoire five or six times in a career. Increasing importance of IT and communication technologies in companies has the following effects: IT and CT accelerate the speed of change. IT and CT are resonsible for a lot of rationalization and efficiency measures, especially in the low-qualified job sector. IT an CT are responsible for the increasing complexity in process and workplace. The requirements are changing: High qualified people should be available. This includes not only technical knowledge but also skills (like flexibility, mobility, capability to adapt and to reflect ) 132
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3. Consequences
Trends influence the way firms are managed. They are responsible for new strategic concepts or modified concepts in HRM: Knowledge management Diversity management Employability management Complexity management Organizational learning Creating commitment New leadership models International HRM
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Personal Credibility
- Interpersonal skills - Getting results - Communication
Strategic Contribution
- Culture management - Fast change - Strategic decision making - Market driven connectivity
HR Delivery
- Staffing - Learning - Organizational design - Performance management - HR measurement
H R T e c h
Business Knowledge
- Understanding of the business and industry of the company - Understanding of the integrated value chain and the firms value proposition
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5. HR Measurement
Qualitativ-oriented Approach
- Portfolio Analysis - Competence Check
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1. Definition
International in this context means that relations between company units in (two or several) different countries exist. An international company is defined as an institution that is active at least in two national economies, and/or follows business activities beyond national boundaries.
The most important aspect in international human resource management is the cross-borderd orientation. This relates to the functional areas and to the processes.
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s ntrie ou
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3. Targets
availability of human resources and the efficiency of the personnel placement in the national und international context Identification of critical HR factors influencing success Improving the relationship within the company and over the boundaries Considering different thinking and action patterns Creating a learning culture which is characterized by openness and tolerance Support of the transnational know-how transfer Increasing the mobility and the motivation to change Developing cross-cultural empathy Considering different economic, political, social and cultural conditions ... 144
4. The Difference between International Human Resource Management and Local Human Resource Management
An international company deals with an increased complexity and an increased uncertainty. There are several reasons:
The numbers and the heterogeneity of the elements influencing the process of decision making increase. At the same time the transparency decreases. If the degree of strangeness increases, the identification of interdependences will become more and more difficult. Environmental elements and conditions are different from country to country. This makes a specific, case-referred procedure necessary. Economic, political and social differences hinder a standardized procedure. The linguistic variety affects the communication and influences the cooperation. Cross-cultural differences determine the thinking and behavior pattern. Prejudices influence the relationship.
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The international human resource management differs from the human resource management on the local level by the following factors: Increased numbers of activities (e.g. international taxation, foreign delegations, services for expatriates, language translation services...) Global perspective Considering the privacy of the (potential) expatriates Larger risks Considering different economic, political, sozial and cultural conditions Equal treatment of the different nationalities
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culture (manmade)
social relations social relations culturally based values culturally based values status of the reality recognition and technology status of the reality recognition and technology
nature
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A study by Geert Hofstede identifies international cultural differences. Hofstede says that societies differ in several dimensions: Power distance: The dimension power distance describes whether and how people accept the unequal distribution of power. Avoiding incertainty: The dimension avoiding uncertainty describes whether and how people accept uncertain situations. Feminism versus masculism: The dimension feminism describes the importance of soft facts in the working context, like leadership, cooperation, colleagues The dimension masculism describes the importance of hart facts in the working context, like salary, promotion, challenges Individualism versus collectivism: The dimension individualism describes the importance of self-responsibility and inititative. The dimension collecitivsm describes the importance of a strict, well-definied network.
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Collecitivsm
Individualism
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Low Power Distance
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70
High Power Distance
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34
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Accepting Uncertainty
Avoiding Uncertainty
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Feminism
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Masculism
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28
50
72
95
150
Country Germany USA Great Britain France Italy Japan South Africa Brasil Australia
Power Distance 35 40 35 68 50 54 49 69 36
Individualism 67 91 89 71 76 46 65 38 90
Masculism 66 62 66 43 70 95 63 49 61
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Individual targets
Improving the chances on the labor market Desire to get new tasks and new challenges Getting more money Desire to know another country and another culture Beginning a new life / international assignment as a way to solve personal problems
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Lack of work-life balance Stress, burnout and travel fatigue feature in relation to international commuting and frequent flyer assignments Fear to be out of sight, out of mind: The firm has promoted the expatriates colleagues while he / she was abroad Problems with the language The socio-cultural and economical conditions in the host country Political instability Climate One way to reduce assignment problems is simply to shorten the length of the assignment. A second way to reduce assignment problem is to provide realistic previews of what to expect, careful screening, improved orientation, and improved benefits packages.
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Orienting / Training
Staying Abroad
Repatriation
Repatriation
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Managing Mobility
There are several possibilities to motivate employees in order to go abroad: A clear commitment and an agreement for the time after the international assignments Reentry-garanty The necessity of international assignments for the career development Financial incentives and nonfinancial benefits Considering the family Information about the conditions in the host country, about schools etc.
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Selecting
There are five factors that contribute to success in international assignments: Job knowledge Job motivation Relational skills Flexibility / adaptability (ability to deal with stress, emotional stability, willingness to change, tolerance for ambiguity, sensitivity) Extracultural openness (variety of outside interests, interst in foreign cultures, openness, knowledge of local language(s), outgoingness and extroversion) Familiy situation (adaptability of the spouse and family, spouses positive opinion, willingness of the spouse to live abroad, stable marriage) Instruments: Interviews, tests, AC, references, interview with the spouse / partner
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Orienting / Training
Orienting and training include formal programs for briefing expatriates regarding the conditions in the host country, language training, look and see trips, sensitivity trainings, culture assimilator, contrast-culture program. The expatriate development program should be a predeparture cross-cultural training and a continuous training during the stay abroad.
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Staying abroad
Many expatriates and their families are confronted with the so called cycle of international assignments:
1. The stage of expectation 2. The stage of culture shock - Enthusiasm for the host country - Friendly but perfunctory relationship to the people - Uncertainty and fear because of the differences in culture, language, society and tasks - Reducing the uncertainty by the retreat to the family, by the retreat to the group of expatriates, by criticizing the conditions of the host country - Integration - Accepting the local habits without losing the own identity - But risk of misdevelopment - Overemphasizing the own culture - Devaluing the own culture (going native)
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Repatriation
Particularly after companies spend hundreds of thousands of Euros helping the person develop international expertise, it is disconcerting to know that perhaps 50% of returnees leave their companies within two years of coming home. For one thing, expatriates often fear that they are out of sight, out of mind during an extended foreign stay, and such fears are often well founded. Many firms hurriedly assign returning expatriates to mediocre or makeshift jobs. Additionally the returnee realizes that the firm has promoted the expatriates former colleagues while he or she was abroad. Even the expatriates family may undergo a sort of reverse culture shock, as they face the task of picking up old friendships and starting new schools, and giving up the perks of the overseas job, like a company car and driver.
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Internationalization Model Human Resource Planning Promotion Policies: - Promotion from within - or a policy of filling positions from outside the organization The Firms Knowledge of Employees
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TCN
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In international companies internal recruitment takes priority over external recruitment. This is based on the increased risk of international assignments. Exceptions are: - to fill entry-level jobs - to acquire skills not possessed by current employees - to obtain employees with different backgrounds - to provide a diversity of ideas.
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International human resource development deals with the improvement of cross-cultural competencies and with the enhancement of international knowledge. The purpose of international human resouce development is: Availability of qualified employees Development of cross-cultural competencies and international knowledge Promotion of prospective managers and talented young employees Preparation for an international assignment Enhancement of motivation Increase of flexibility and job mobility Decrease of the resistance to work abroad Improvement of the collaboration in international teams Decrease of fluctuation rate ...
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Integration
Cooperation
Empathy, Sensitizing
The functional areas of international HRD are the cross-cultural training and development, international job rotation, working in international task forces.
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InformaInformation tion - Language Training - Information about the Economical, Political, ... Conditions
III IV
I II
- Sensitivity-Training - Cas Studies - Field Experiences - Look and See Trips - Cross-(ex)change / Job Rotation
Experience Experience
Cultural-Specific Cultural-Specific
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There are several factors influencing the compensation program in international companies. External dimension: - Cross-cultural differences - Legal considerations in the parent country and host country - The labor market conditions in the parent country and host country - The level of prosperity in the parent country and the host country - The wage level in the parent country and the host country - The currency situation in the parent country and the host country Internal dimension: - The corporate policies: The corporate policy of internationalization - The compensation programs applied in the parent company and in the subsidiaries - Working conditions - Period of the international assignments - The purpose of international assignments
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There are several models of job pricing in the international context. They correspond with the corporate policy of internationalization. Parent country-oriented compensation (PCC) (related to the ethnocentric policy) Host country-oriented compensation (HCC) (related to the polycentric policy) International compensation model (TCC) (related to the geocentric policy)
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The parent country-oriented compensation refers to the income which a PCN would get in a comparable position with comparable performance. The parent country-oriented compensation does not depend on the place of assignment. gross salary (parent country) + Expatriation allowance + hardshop allowance = gross salary - Hypothetical taxes (parent country) = Net income (parent country) + Net difference cost of living + Net difference cost of housing + Net difference training expenses = disposale income (host country)
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Gross salary: The job requirements determine the gross salary. Expatriation allowance: The expatriation allowance is the equivalent and compensation of the risk of foreign assignment. Hardship allowance: The main purpose of the hardship allowance is to compensate difficult working and living conditions. (for example climate, family problems, health hazard, cross-cultural difficulties). Hypothetical taxes: In order to avoid fiscal disadvantages, hypothetical taxes must be deducted from the salary. The company pays the taxes which the expatriate has to pay in the host country. Net difference cost of living: This compensation correct the differences in purchasing power between the parent country and the host country. In addition currency conditions and the inflation rate are considered. Net difference cost of housing: This financial compensation guarantees appropriate housing standards. The real housing costs in the parent country are compared with the housing costs in the host country. Net difference training expenses: The allowance for training / education guarantees that the children of the expatriate get an education which correspond to the standards in the parent country.
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Adaptation grant: The purpose of the adaptation grant is to compensate the difficult working and living conditions. It includes an allowance for job mobility. Adaptation grants are paid only for a certain period of time. Net difference training expenses: The allowance for training / education guarantees that the children of the expatriate get an education which correspond to the standards in the parent country.
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Gross salary: The gross salary orientates by comparable positions and by their compensation standards in different countries. Hypothetical taxes: The hypothetical taxes are determined by the country average. Net difference cost of housing: This financial compensation guarantees appropriate housing standards. There is a special percentage which is comparable with the cost of housing in the particular host country. Net difference training expenses: The allowance for training / education guarantees that the children of the expatriate get an education which correspond to the standards in the parent country.
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Procedure of Payout
The procedure of payout includes the place of payout and the currency of payment. The currency of payment can be - the currency of the parent country, - the currency of the host country, - the currency of a third country or - a split of diffent currencies (split salary). Many companies prefer the split salary. One part is paid in the currency of the host country. It covers the cost of consumption. The rest is paid in the currency of the parent country or of a third country.
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The effects of nonfinancial compensation depends on the motives, values, and attitudes. In international companies with PCN, HCN and TCN a variety of motives, values, and attitudes exists. In order to consider the cultural differences, a special procedure is necessary. Identifying the different motives, values, and attitudes Considering cross-cultural equity Creating the comparability Checking the external fit with the external circumstances Checking the internal fit the internal conditions In international companies the nonfinancial compensation programs are characterized by a dilemma: On the one hand the specific features of the particular country have to be considered. On the other hand the principles of equity and equality have to be considered in order to avoid conflicts. 194
E. Annex
Briscoe, D.: International Human Resource Management, Prentice Hall 1995. Dessler, G.: Human Resource Management, New Jersey 2003. Harvard Business Review: Managing People, Bosten 1999. Hilb, M: Transnationales Management der Human Ressourcen, Neuwied 2000. Mondy, W. Et al: Human Resource Management, New Jersey 2002. Scherm, E. (1999): Internationales Personalmanagement, Mnchen 1999. Scholz, C.: Personalmanagement, Mnchen 2001. Sparrow, P et al.: Globalization of Human Resources: Tracking the Business Role of International HR Specialists (Routledge Global Human Resource Management Series), New York 2004. Weber, W. / Festing, M. / Dowling, P. / Schuler, R. (1998): Internationales Personalmanagement, Wiesbaden 1998. Wunderer, R., Dick, P: Personalmanagement Quo vadis?, Neuwied 2002.
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