Importance of Expatriates in Multinational Companies
According to Adams, et al., (2013), expatriates can be defined as the employees in an organization who is assigned to work in some other countries for a short term or long term duration projects of the business. The expatriates of the organization help the company to establish and develop its functioning and operation in the international level. The experience gained helps the organization to establish proper skills, knowledge and ability to achieve success in the international market. The importance of expatriate is that it improves the local market knowledge, the market conditions, cultural and the business practices. It helps to instill the local cultural differences. International human resource helps to handle the needs and requirements of the employees. They perform the functions to recruit and hire employees who are qualified and competent enough to perform the duties and functions of the particular post.
According to Adams, et al., (2013), due to increased globalization there is an increasing need for international assignments therefore many multinational companies consider the experience of international management in the companies. The international organizations have hence become a part of success for the organizations. The main objectives of the multinational companies are to gain success and increase the market share of the company internationally. In order to ensure that the market share value is increased internationally, the organization requires effective expatriate which ensures smooth functioning of the operations in the organization (Albrecht, et al., 2014). In the age of globalization international human resource management and expatriate has increased to great extent. The importance of which has increased as it ensures that the organization has a proper international exposure and undertake initiatives which brings success in the organization. The purpose of this report is to evaluate expatriate and international staff selection of the chosen company Woolworths. It analyzes the competence, soft skills needed the process of selection, the criteria for performance management and the role of training development and compensation of Woolworths (Albrecht, et al., 2014).
Global Human Resource competencies
According to ?or?evi?, (2016), in order to manage the international human resource competency the global personnel responsibilities needs to be increased. The expatriate has technical and managerial competence of the expatriates, requires cross cultural abilities and knowledge which will ensure that the expatriate will be able to survive and operate in the new environment. The expatriate needs to have intercultural competency, which implies that, the expatriate has the competency to perform efficiently and effectively in the other countries of different cultural. According to ?or?evi?, (2016), the expatriate needs to be selected considering the desirable attributes which are inclusive of the dimensions such as cultural empathy, ability to adapt to different situation, diplomatic attitude and behavior, the language proficiency of the expatriate, with positive attitude, they must have emotional stability and maturity. The effective dimension of the expatriate helps the organization to ensure the effectiveness of its operations in the foreign country. The presence of the above dimensions in the expatriate is important for the actual behavior of the expatriate intercultural. The concept of intercultural dimension forms a part of global leadership. To increase the global competency of the human resource management, the company focuses on the concepts of cross cultural relationship skills, values, traits and behavior of the expatriate.
Competencies and Selection Process for Expatriates
According to Arman & Aycan, (2013), the expatriate must have the ability to adjust with the foreign culture; the expatriate might experience various emotional in the foreign country. The core competencies of international human resource are almost the same as domestic human resource management. There are professional skills with good communication skills including the ability to listen effectively. It ensures specialization of the international human resource consulting service. According to Arman & Aycan, (2013), the communication skills are highly valuable in Woolworths Company. Ability to communicate well is one of the top importances of the management in Woolworths. The other important competency skills are people and reinforcement development. It was agreed that the ability to express the opinions of the people in the foreign country helps to overcome and eliminate many barriers. With good communication skill of the expatriate, they can express themselves to many different culture audiences (Bártolo-Ribeiro, & Andrade, 2015).
Soft skills requirement
In order to be the right expatriate, the soft skills required for implementing success for the assigned projects is adaptability, which is most important for any expatriate. Dealing with change is one of the most important requirements of any expatriate, it is necessary to be able to deal with any kind of change (Bártolo-Ribeiro, & Andrade, 2015). The expat must have the ability to understand the cultural dimensions of the foreign country the expat is exposed to. They must have the ability to understand the culture of living and working and have the ability to integrate. According to Arman & Aycan, (2013), the expats must have the skills and knowledge to determine the contributors towards the success of the assign projects. There must be an interest of the new culture; there must be an adventurous spirit in the expats. There must be curiosity and passion to do the particular work, there must be an ability to fit into the new foreign location, the expat must have the sense of understanding and to deal with things in a humors manner, so that the locals of the foreign country might have a better way of understanding and better approach with the expats (Kim, & McLean, 2014). There must be an existing language skills and ability or willingness to have the knowledge of the language spoken in the foreign country where the project has been assigned. They must have the ability to exhibit the cultural sensitivity. There is evidence that the expats who lacks the language skills and lacked the ability to interpret the ideas, concepts and culture of the foreign country has acted as a barrier or hurdle to success (Kim, & McLean, 2014).
Performance Management Criteria for Expatriates
According to Bratton, & Gold, (2017), the expats must possess the skill of flexibility; there must be willingness to experience new things and culture. Adaptability and flexibility is considered to be the most important criteria to be a successful expatriate. They are usually listed to be the most important aspect for achieving success. The presence of these abilities influences the achievement of the targeted result. Since, different countries have different ways of completing the job, hence adaptability and flexibility is considered to be the key to success. According to Bratton, & Gold, (2017), the expats must have the skill to deal with different things open mindedly. This implies that the expat must have the ability to look at the new environment, to examine and understand the differences in the culture. The expat must be ready to face the challenges in the new environment.
Selection procedure
The most important aspect of expatriate selection is selecting the type of selection process of the expatriate (Kim, & McLean, 2014). I considered the most important aspect of selecting the expatriate. The selection procedure is highly oriented with crisis and is unsophisticated. As per the research, there are various ways of selecting the expatriate. The most important part of the selection procedure is evaluating the expatriate which was recommended by the line manager and the chief executive officer or specialist persons (Bártolo-Ribeiro, & Andrade, 2015). The expatriates of the multinational organization Woolworths fill in the new or the vacancies oversees by informing the intercultural trainees or the human resource professional for the selection of expatriates. The management of Woolworths selects the most competent employees of the organization with potential skills that can fill the vacancy for expatriate successfully.
The types of selection procedure are:
- Psychometric tests:As stated by Budhwar, & Debrah, (2013), psychometric tests are considered to be the best method for selecting the employees of the organization. This testing method is highly used for the selection of employees and the personal development of the employee. The psychometric tests have strong influence on the training and selection procedure of the employees. Due to the increase in globalization and the international human resource management the importance of psychometric tests have increased which helps to evaluate the process of selection. As mentioned by Cascio, (2015), the psychometric test helps to measure the level of stress of the selected candidate. It helps to assess the reliability of the selected candidate. This tests stands as a standard for different jobs and selecting the most suitable candidate.
- Assessment Centre:As stated by Budhwar, & Debrah, (2013), this is the selection procedure applied in Woolworths, it is considered to be one of the best tools for selecting the suitable candidate. Assessment centre is considered to be the best idea for assessing the competency of the international managers and the expatriates as the selection technique. The assessment center is designed in such as way that the assessment process is highly adaptable to the local environment where the expatriates are exposed upon. The cross cultural assessment centre helps to assess the international manager’s adaptability with the changing environment (Kim, & McLean, 2014). Therefore the assessment centre is considered to be the most important selection procedure of the expatriate.
- Coffee machine system:Coffee machine system is also one of the most common forms of selecting the expatriate (Okpara, 2016). The senior line manager takes some decisions with the informal decisions; the best candidate is selected for the position. This process is implemented when there is an urgent need to fill the position of the expatriate.
Performance management criteria
Managing the performance of the firm’s various international faculties is one of the most important tasks of the international human resource management of Woolworths. The recruitment, selection and training procedure of the multinational company tends to focus on the pre-assignment issues, post assignment issues (Okpara, 2016). Performance management criteria is considered to be the process which enables the multinational company Woolworths, to evaluate the performance of the expatriates and provide facilities to continuously improve the performance of the employees. The performance of the employees is evaluated against the pre set goals, objectives and targets set by Woolworths (Kim, & McLean, 2014). The performance management criteria includes assessing the performance of the expatriates not only the individuals but also the operations of the management in Woolworths. However, According to Bratton, & Gold, (2017), the performance of the expatriates is mainly focused on. The international concept of performance management includes several steps such as appraising the performance of the expatriates, setting the goals for performances, determining the functions which impact the expatriate performance, providing feedback to the expatriate and offering various opportunities to the expatriates for improvement and measures the performance with the standards goals and targets of the organization.
Soft Skills Required for the Success of Expatriates
According to Arman & Aycan, (2013), the goals of the organization are set to measure the future outcome of the expatriate. The set goals help to guide and direct the employees towards achieving the set goal. It offers the benchmarks for the expatriates to strive towards achieving excellence. The set goals are specific in nature and are measurable. There are certain variables which impacts the performance of the expatriates. Appraising the performance of the expatriates involves certain steps that are specifying the performance criteria of the expatriates, indentifying the appraisers of the expatriates and deciding on the frequency of the appraisal. The appraiser of Woolworths includes the top line managers and supervisors. In regard with the frequency of the performance appraisal, it is done once a month. Providing feedback to the employees helps to highlight the development of the expatriates (Okpara, 2016). These activities help the multinational company Woolworths, to ease the difficulty faced by the employee. Along with the performance evaluation, the managers provide feedback which also facilities the employees in organizing training programs and development programs as a part of performance management criteria.
Development and training in International human resource management
According to Arman & Aycan, (2013), the overall aim of Woolworths in providing training and development opportunity to the international employees and expatriates is to fulfill their goals and service and to contribute better performance to the company. I consider that the training and development facilitates are the most important aspect of human resource department. The training and development includes the learning and education of the employees, the development of the organization and career planning and development of the employees and the expatriates of the company. The professional of international human resource development are responsible for providing training and development of the employees, providing specialized training for the expatriates for assigning projects in the foreign countries and providing facility for the development of special group of international managers.
The execution of the training and development programs in Woolworths is originated at the headquarters of the company (Budhwar, & Debrah, 2013).The company follows the ethnocentric model. The training and development develops from both the headquarters and the subsidiary staff. In order to maximize the effectiveness of the training and development program, the organization considers the learning aspects of the trainees in the most efficient manner possible. In the training and development programs the selected expatriates are provided with training and suggest ways to handle the difference in culture, in other words cross- cultural communication is focused upon. The training and development program enables the trainees to gain knowledge about the practices and culture of different parts of the worlds. For example the power distance of different countries varies from one another.
Case Study: Woolworths
With the increase in globalization, Woolworths in order to increase their competiveness have been increasingly focusing on the group of managers having global perspective. By providing the programs of training and development, the company identifies the potential of the managers and the expatriates and enhances their level of performance. They are provided with opportunity to develop their potential and brush up the potential talents of the employees. They are prepared for their work abroad and train them to prepare for their life there. The most important aspect for facilitating training in the organization is cross cultural training. It prepares the expatriates the live and work in culture which is different from their own cultures. As mentioned above, cross cultural communication eliminates most of the barriers in achieving success in the assigned project. Cross cultural communication helps to associate with the locals of that community. Training and development helps to cope up with the new environment which is challenging for dealing with work.
There are various methodology implemented by Woolworths for providing training and development facility, some of them are cultural briefings, Area briefings, case study analysis, role playing, cultural assimilator and field experience (Brewster, et al., 2016).
Compensation and remuneration of expatriates
In Woolworths, compensation and remuneration is considered to be the most important factor. The expatriate is allowed a remuneration that is three times the cost equivalent to the domestic based counterpart. The expatriate may increase the potential remuneration as the company or subsidiary branch could earn (Bratton, & Gold, (2017). The company offers the expatriate the economic costs it takes from them to travel to the foreign country for the assigned project. Expatriation is the most expensive for the multinational company. In addition to the salary provided the expatriates, they are compensated with extra added benefits such as relocation assistance, housing assistance is provided. The major focus of Woolworths is to focus on the international employee by keeping them at a sufficient financial level while they are assigned with international projects, by doing this the company ensures that the expatriates do not lose their ground economically (Brewster, et al., 2016). They are provided with allowances such as Foreign Service premium, cost of living allowances, housing and utility allowance and provides basis for in-service benefits and offer pension to them.
According to Gonzalez, & Chakraborty, (2014), the expatriates is offered of salary premium as an inducement for accepting foreign assignment and also provided with compensation for facing hardships caused due to the transfer. The payments of compensation depend upon the assignment, the actual hardships and the tax to be paid to the government. The cost of living allowance includes payment of differences in the home country and the foreign country. The expatriates are entitled to maintain the standards of the home country. The employees are provided compensation to cover up the home travel expenses of the trips and back to work. They are provided with the compensation usually once a year. This compensation allows the expatriates to eliminate hardships and it assists them to reunite with their family when they are repatriated. Moreover, the education allowance are given to the expatriates, it includes language class tuition fees transformation and uniforms (Cullen, & Parboteeah, 2013). The relocation allowances cover the temporary living expenses, shipping, other transportation expenses, down payments and lease related charges. The compensation plans to protect the expatriate from experiencing negative consequences by utilizing the tax equalization plan. Under the planning, the company adjusts the income base of the employee so that the expatriate will not pay more tax than if they had stayed in the home country (Cullen, & Parboteeah, 2013).
Conclusion
Therefore from the above analysis I conclude that efficient international human resource development is crucial for the success of any multinational company. In the report I have analyzed and evaluated the expatriate and the international staff selection procedure implemented by the multinational company Woolworths. I have analyzed the competency required by the expatriate for operating in other foreign country for successfully completing the assigned project. The company utilizes various selecting procedure for selecting the most suitable employee in the organization for successful execution of the assigned project. I have identified the various soft skills and talent required for the expatriate for proper execution of the given project by the company. I have found through the report that good communication skills are one of the most important factor for determining success for the organization. It helps to communicate with the foreign locals efficiently this helps to remove the barriers and different hurdles for proper execution of the given project. According to me the company manages the measurement of performance implying various techniques. Evaluation of performance and proper measurement of performance of the employee is executed to determine the performance and thereby anticipated the results. The expatriates of the organization are given more training and development facilities which ensures that the performance of the expatriate improves. It helps in proper execution of performance in the foreign country. They are given proper training for the intercultural communication. This helps to ensure smooth flow of communication of the expatriate with the locals in foreign country. The company ensures that the expatriate are given sufficient base salary along with compensation for undertaking the project. I have analyzed in the report that they are given various allowances such as travel allowances and home allowances and compensation for given tax. Therefore I conclude that Woolworths has successfully implemented the international human resource
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