Project Report for the case 9 An American (Expatriate) in Paris (IHRM)

A BRIEF SNAPSHOT THE CASE: In the case let given, there is a hypothesis considering which we have to draw an expatriate assignment plan that covers administrative requirements of the expatriate assignment as well as family issues. In the case let given, Jim Verioti, director of sales and marketing, currently working with the American office of Sarip International, has been asked to take over the responsibility of office in Paris, France as an expatriate. Jim has an prior experience of working in Europe on previous assignments, however, he is concerned about various factors like his relocation issues, standard of living, spousal employment concerns and education for his three children. As per as requirements in the case, the following administrative and family issues of an expatriate are been addressed:-

1. Visas and Permits: There are various employee contracts that have to be fulfilled while an expatriate is moving from one country to another for work assignments:As per as requirements in the case let, Policy (as specified by French Govt.) of CDD (Contrat dure dtermine) which is a Full-time fixed term contact, seemed more applicable than others. Contrat dure (CDD) is a full-time contract with a specified length of employment term. There is no minimum period, but 9 months is normal. It can only be renewed for the same period as the initial contract. The maximum permitted length that someone can work under a CDD is 18 months, after which employment must cease or be transferred to a CDI*. Approximately 70% of new contracts in France today are CDD, due mainly to the difficulties and costs associated with firing people on CDI's. *Contrat dure indtermine (CDI) does not have a fixed term of employment. There is usually a 3-month trial period at the start of the employment. This kind of contract provides very stable employment as it quite complicated and expensive to fire people under this. Framework of Amendments if required of employment contracts: As per as Framework design for Expatriates in France, Every employer may propose changing a condition in employment contract, such as location, working hours or pay etc. If the employer is considering the change for economic reasons (arising from economic factors or technological changes in the company's business), it must inform the employee regarding this by a registered letter (lettre recommande avec accus de rception). This letter states that the employee have one month, from receipt of the letter, to inform the employer about his/her refusal. Otherwise he/she will be deemed to have accepted the amendment. If the employee refuses, the employer can choose to terminate or compromise. Types of work permits Work permits (Authorization de travail) have various forms. They may be issued as residency permits, giving the right to work in France or issued as a specific work permit (in this case accompanied by your passport and/or visa). If you hold a permanent resident permit (carte de resident, CR) in France, you have the right to work in France.

If you hold a provisional stay permit (autorisation provisoire de sjour, APS) or shortstay visa(visa court sjour), you have to apply for permission to work (autorisation de travail). As per the situations in the case, Jim has to apply for Temporary work permit (ATP, Autorisation provisoire de travail). This applies to certain cases, e.g. where the employee remains on the payroll of an overseas company. In the case let above, Jim should be provided with maximum assistance possible regarding his Visa and work permits. He should be informed in advance about his permit renewals and provided with assistance in case he requires, for same.

2. Relocation allowance and housing: According to the case, the company is opening a new office in Paris (France) and Jim Verioti, director of sales and marketing, has been asked to assume responsibilities for the expansion. The company is new in that region and Jim Verioti has great responsibilities upon him, his success determines the future of the company in Paris. Relocation packages vary widely from company to company; they may even vary greatly among employees of the same company. The package mostly depends on your new responsibilities and the living conditions in the target country. Here Jim Verioti is a top ranking officer and he also has knowledge about European culture so he will definitely demand a high perk and other relocating allowances. The Categories of Relocating Allowance That Jim Verioti should be provided through the company are:1. Salary: - While deciding the salary the comparison of the net compensation will take into consideration the following: cost-of-living expenses, taxes, social security, pension, insurance, etc. his net compensation should not be lower with an international assignment. Allowances should be made to adjust for inflation and currency fluctuations. 2. Relocation Allowance: - Moving a family anywhere, especially overseas, will involve costs i.e. airport tax, tips, excess baggage, shipping, etc. The exception to this is costs related to processing an ROC residence visa and work permit, these costs should be covered by company by offering Jim an additional Bonus. 3. Mobility Allowance: - Due to inevitable inconveniences it takes some cost at the start of the foreign assignments which should be provided by the company. 4. Personal Property Allowance: - Jim will probably be required to purchase a personal property insurance Policy in the host country. This can usually be arranged by the company, although the costs incurred may not be reimbursed.

5. Mortgage Allowance: - Jim and his family has just moved to their new house and their mortgage is $1500 per month, this house will remain vacant due to his foreign assignment so the company should pay this mortgage premiums or make any arrangement such as renting the house at their own cost, The company is also responsible for the proper maintenance of Jims property in his absence. 6. Temporary Accommodation Allowance: - The Company should absorb the cost of packing and moving household items Jim should be reimbursed for appropriate living expenses associated with accommodations, meals, and necessary living expenses incurred while you arrange permanent housing or await the arrival of household furniture and also for transiting the family to the new places. 7. Training Allowance: - The Company should provide Jim with all pertinent information regarding the host country prior to leaving the US, Jim and his family should receive some cross-cultural training. Upon arrival in the host country, the foreign subsidiary may or may not provide an introduction program for the family. 8. Fringe Allowance: - Jim should be provided with leave allowance and fairs by the company to visit the home country in any critical situation the above can also be provided to him as a refreshment leave after certain durations. 9. Club-membership Charge: - Since Jim is new to that location he will have to join different clubs there, the club-membership charge should be absorbed by the company. 10. Housing Allowances: - Company should make sure that Jim and his family are housed in appropriate living quarters in the host country. Personnel from the foreign subsidiary assist them in locating in an appropriate apartment or house in the host country, the representatives from the foreign subsidiary also provide them with guidance regarding rental agreements and so forth. The host country housing cost can be determined by the company on the basis of their knowledge and through the information by relocating agencies. This will be negotiated with Jim, keeping in mind the mortgage on Jim in home country America and after that the decided allowance should be provided.

3. Language and culture training: The importance of cross cultural training is clear. If global companies are to truly maximize their potential abroad, cross cultural training must become a mandatory element of expatriate relocation assignments. To ignore this would mean a continuation of failures, loss of potential growth abroad and a staff base that lacks international cultural competencies. Now as the language and cultural training is important in case of Jim Veteori and his family, as neither of them speak French, (as per as case let), we could identify following benefits of an efficient Language and Cultural Training Program. . Prepares the individual/family mentally for the move, . Removes some of the 'unknown', . Increases awareness and cross cultural understanding, . Provides the opportunity for questions / anxieties to be addressed in a supportive environment, . Motivates and excites, . Reduces stress and provides coping strategies, . Eases the settling-in process, . It reduces the chances of relocation failure. These Language and cultural training programs should also include core work related issues that come forth while working in an alien culture. Some of the components of it are: Cultural interactions and their challenges in the target country Cultural values and attitudes in the target country and their impact on expatriations (time, space, group dynamics, authority, tasks, relationships) Communication styles and strategies for correctly deciphering and responding to them Social and business etiquette: key dos and donts Working practices in the new culture: impact of hierarchy, attitudes to time, and degrees of formality Developing cultural awareness: a look at your cultural values compared to the cultural values of your host culture Practical tips and strategies for living and working as an expatriate. An effective Cultural and Language Training program is being conducted in Netherlands in which the expatriate is assigned with a local family with whom the expatriate has to spend time on weekends over dinners and thereby get accommodated to the countrys culture in a conducive environment. Similar model

could be followed by the company as that would be much cost efficient, and would bring effective results too. 4. Spousal Employment Concern: Often, a foreign assignment fails because new environment the expatriate has moved is alien and hostile to his family. The expatriate might thus be led to demand an early repatriation and- if this request is turned down- he could decide to quit his/her job. On the other hand, if the expatriate decided to hold on to his assignment despite the difficulties, this could cause serious tensions in his family and these might, in turn, lead to separation or divorce: lower productivity, sick leaves and finally early repartition could then follow. Quite evidently, such an outcome can be costly for both employee and employer. Figures on this are quite clear, 80% of the expatriates are married; 61% of the spouses have a professional activity before leaving, but only 18% of them continue to work abroad. Reason being, in almost every country, an expatriate's spouse does not have a permit of work. Gone are the days when wives meekly followed their husbands! Married women now are often not prepared to sacrifice their own careers for the sake of their husbands. In fact, 15 % of the American expatriates are women, yet few husbands are willing to give up their own jobs to follow their wives! As per the situations in the case let, there are only a few alternatives to avoid such failure that concerns spousal employment and well being concerns: Depending upon whether the spouse would like to work or not, there are following approaches to deal with the issue. 1. Preventing rather than healing: - In fact, the problem of the spouse's work must not only be discussed well in advance: it should also be taken into account in the selection of candidates for expatriate posting. The HRD would thus be well advised to raise the issue at the very onset, making it clear that the candidate spouse will not be able to work in the foreign country and thereby, they should process accordingly. 2. 'Out Placements' Firms:- The HRD may consult or steer the spouse to one so called 'outplacements' firms which could serve as a coach to explore the potential job opportunities. However, the uncertainty of this process should be communicated well in advance. 3. An adequate salary: - This is a strategy to avoid employments concerns of low paid spouses if fear of losing a second income is a cause behind spouse's refusal to leave his/her job. In this case, the expatriate's contract would include a compensatory payment that would allow them to maintain their present level and style of life.

5. Health/medical/insurance issues: Health policy of French Govt.:- By all standards the French health system compares very favorably to the US system (even after Obama's 2010 reform). It is based on a

moral and political consensus that protecting the health of citizens, and keeping them from what can be avoided in the trauma of illness and death. Health in France is supposed to be one of the major responsibilities of the Society as a whole. Therefore, the State ensures that everybody is protected and people consider it to be in charge of controlling the quality of the health system and of regulating all its private and public players, including corporations which must contribute equally to it. The results: 100% people covered (see CMU), for a cost 30 or 40% inferior to America's (11, 1% of GNP vs. more than 14% in the US) and with better results. Medical care in France is one of the best in the world. Hospitals, clinics, and doctors offices offer modern, well equipped, and comfortable medical experiences. France has always been one of the leaders in health care, and getting coverage and finding medical care in almost any region is usually easy to do. Most U.S health insurers reimburse expats who are traveling abroad. French companies that employ expats will provide health insurance for them. Healthcare in France is much more affordable for expats than it is in the US After all above, The Company should also provide Jim and his dependents with a medical/dental program and a supplemental medical/dental program that covers them abroad.

6. Education for the children: Relocating with the whole family is a huge task, considering how each member would feel about the move. School-age children, especially teenagers, have their own issues of adaption. Children will have to be registered for school, of course. An on a expatriate assignment, Jim Veteori should consider an American school as suggested by one of their friends. This would allow ease in relocation and accommodation of culture for their children. Teachers must be suggested to help their children become acclimated to a different language, culture, and educational system. Enrolling their children in sports is a good way to help them make friends, but it's important to know that sports are separate from education in France. Athletics are organized through the community, rather than the schools. In France, Soccer, volleyball, judo, tennis, and basketball are all popular for both girls and boys. Rugby, the closest the French come to American football, is popular in the south and usually an exciting game to watch, as well as to play. 7. Compensation & incentives: Salary increases should take into consideration two factors at the same time -- changes in the cost of living and increases due to changes in experience and/or responsibilities and equitable compensation plans take both aspects into consideration. In the case of expatriate assignments, both changes can be drastic. Foreign assignments often include a significant increase in responsibility. For example, managing a plant of outside the home country is a significantly greater responsibility than managing one in the home country, because of the more restricted access to corporate support and of the cultural challenges. Insightful Human Resources professionals plan to give expatriates two separate figures, one for the change in cost of living and one for the change in responsibilities. This simplifies expatriate package negotiations in several respects. One, it improves consistency when a corporation sends people to different countries with widely different costs of living and helps prevent comments like: "Maria went to Buenos Aires two years ago and her salary was doubled. Why is mine increasing only by 20%?" Again, it also helps prepare expatriates for their return to the home country. Companies find it easier to remove the adjustment made for the change in cost of living if it is explicitly separated from the salary than if it is part of one's salary. This helps prevent expatriates from feeling demoted upon their return to the home country because their salary was decreased significantly. Note that cost of living adjustments should be based on the expatriate life style rather than the life style of locals. For example, expatriates living in some developing countries find that food and lodging is relatively inexpensive, while international telephone charges are very high. Given the amount of money that most expatriates spend on telephone, this may make the new place less affordable after all.

Benefits

Because of their very different situations and needs, the benefits offered to expatriates generally go beyond the benefits offered to other employees. Many companies offer benefits in the areas of taxation, moving, accommodations, visa, immigration, and language training. Other benefits that are less commonly offered can significantly ease expatriate package negotiations 1. Cross-cultural training helps manage expatriates' expectations. By learning more about their future lives, they can understand better what will be important to them in their assigned destination. They can also calibrate their expectations versus the experience of other expatriates in that destination. For example, some expatriates are asking to live in very large houses in cities where such accommodations simply do not exist. On the professional side, they may expect to achieve objectives that may be essentially unrealistic in their new context; in this case, they may expect rewards that may never come. 2. Family benefits: - It is critical to keep in mind the fact that the whole family is affected, and particularly the spouse. Family adjustment and lifestyle issues are the leading causes of early return. Support and financial help in finding adequate schooling for the expatriate's children is often a prerequisite for the family to accept the assignment. Incentive-based compensation is becoming much more common because of the increased emphasis on performance and competition for talent. This type of compensation structure significantly helps motivate employees to perform well. Incentive-based compensation is becoming much more common because of the increased emphasis on performance and competition for talent. This type of compensation structure significantly helps motivate employees to perform well.

Thanks and Regards, Group no. 3 PGD-FS.