Lecture on International Human Resource Management

Chapter 3
International Recruitment and Selection

Chapter Outline
1.Introduction
2.Meaning of international recruitment and selection
3.Staffing policy of multinational enterprises or managerial philosophy towards international
operations held by top management at headquarters (key positions in headquarters and subsidiary)
: Various approaches of staffing multinationals with their benefits and costs
4.Selection of PCN for subsidiary (expatriates)
a)Meaning of expatriates and the reasons for its use
b) Causes and costs of expatriate’s failure
c)Selection criteria
d) Interrelatedness of criteria
e)Other factors
f) The selection process and the use of various tests in it
5.Selection of TCN for subsidiary (expatriates) and for headquarters (inpatriates)
a)Staffing the subsidiary (expatriates)
b) Selecting TCN for headquarters (inpatriates)
6.Selection of HCN for local subsidiary and for headquarters (inpatriates)
a)Staffing the local subsidiary
b) Selecting HCN for transfer to headquarters (inpatriates)
7.Equal employment opportunity issue

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 Lecture on International Human Resource Management

Exhibit 1 A
Introduction
Hiring and placing people in positions they can perform effectively is a goal of most organizations,
whether domestic or international. One must appreciate that there are staffing issues that international
firms confront that are either not present in a domestic environment or are complicated by the
international context in which these activities take place. Thus, an American multinational enterprise
looking for a suitable candidate for a higher position for its subsidiary in India is caught by the dilemma
to choose either a PCN (American) or HCN (Indian) or TCN (from any other country). However, now
how the multinational will respond will be partly dominated by factors such as;
a)Its general staffing policy on key positions in headquarters and subsidiaries (i.e., ethnocentrism,
polycentrism, geocentrism and regiocentrism)
b) ability to attack the right candidate; and
c)The constraints placed by the host government on hiring policies

Exhibit 2
Meaning of International Recruitment and Selection

Recruitment is defined as searching for and obtaining of potential job candidates in sufficient
numbers and quality so that organization can select the most appropriate to fill its needs, while, selection
is the process of choosing from amongst potentially good candidates the right person for the right kind of
job (through the process of elimination) both for long and short-term positions.

In international management / international business, by recruitment and selection we mean the above
activities for multinational enterprise. It should however, be noted that in international management /
international business, the process of recruitment and selection basically means recruitment and selection
of employees for the subsidiary and very marginally relate to recruitment and selection for the
headquarter.

Exhibit 3
Staffing Policy of Multinational Enterprise
(Various approaches to staffing multinationals with their benefits and costs)
1. Ethnocentric: An ethnocentric IHRM orientation means that all aspects of HRM for managers and
technical workers tend to follow the parent organization’s home country HRM practices.
Benefits: a) Little need to recruit qualified host country national for higher management.
b) Greater control and loyalty of PCNs.
c) Little need to train parent country nationals.
d) Key decisions centralized.

Costs: a) May limit career development for host country nationals.

b) HCN may never identity with the parent company.
c) Expatriate managers are usually poorly trained for international assignments
and often make mistakes.
d) Expatriates are limited career development.

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 Lecture on International Human Resource Management

2. Polycentric: In polycentric IHRM orientation, firms treat each country level organization
separately for HRM purposes.
3. Regiocentric: In regiocentric IHRM orientation region wide HRM policies are adopted.
These two orientations are similar in that they emphasize adaptation to cultural and institutional
differences among countries. They differ only in that the polycentric company adapts IHRM
practices to countries and the regiocentric to regions. Regiocentric IHRM companies act similarly
to the polycentric companies but develop regional standards for evaluation and promotion.
However, given their similarity in IHRM philosophy, they are discussed together.

Benefits: a) Using mostly HCNs or TCNs from the region reduces costs for training of expatriate
managers from headquarters.
b) The use of more HCNs and TNCs limits the number of home country expatriate
employees who face language barriers and adjustments problems.
c) Host country employees and TNCs from the region are often less expensive than
parent expatriates.

Costs: a) Coordination problems with headquarters based on cultural, Language and loyalty
differences.
b) Limited career-path opportunities for host country and regional managers.
c) Limited international experience for parent country managers.

4. Global: Recruiting and selecting worldwide, and assigning the best managers to international
assignments regardless of nationality.
Benefits: a) Bigger talent pool.
b) Develops build international expertise.
c) Helps build transitional organizational cultures.

Costs: a) Importing managerial and technical employees not always possible.

b) Added expense.

Exhibit 4
The Advantages and Disadvantages of Using PCNs, TCNs and HCNs
Parent-Country Nationals
Advantages
1.Organizational control and coordination is maintained and facilitated.
2.Promising managers and given international experience.
3.There is assurance that subsidiary will comply with company objectives, policies, and so on.

Disadvantages
1.The promotional opportunities of HCNs are limited.
2.Adaptation to host country may take a long time.
3.PCNs may impose an inappropriate HQ style.
4.Compensation for PCNs and HCNs may differ.

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 Lecture on International Human Resource Management

Third-Country Nationals
Advantages
1.Salary and benefit requirements may be lower than for PCNs.
2.TCNs may be better informed than PCNs about host-country environment.

Disadvantages
1.Transfer must consider possible national animosities (e.g. India and Pakistan).
2.The host government may resent hiring TCNs.
3.TCNs may not want to return to their own countries after assignment.

Host-Country Nationals
Advantages
1.Languages and other barriers are eliminated.
2.Hiring costs are reduced, and no work permit is required.
3.Continuity of management improves, since HCNs stay longer in positions.
4.Government policy may dictate hiring of HCNs.
5.Morale among HCNs may improve as they see career potential.

Disadvantages
1.Control and coordination of HQ may be impeded.
2.HCNs have limited career opportunities for PCNs to gain foreign experience.
3.Hiring HCNs limits opportunities for PCNs to gain foreign experience.
4.Hiring HCNs could encourage a federation of national rather than global units.

Exhibit 5
Meaning of Expatriates
Expatriates are citizens who are working in another country. In the context of multinational
management, expatriates are the citizens of PCN and TCN working in foreign subsidiary (host country).
Further, multinationals following ethnocentric and geocentric staffing policies, rely mostly on expatriate
managers.

Reasons for Using Expatriates

According to Black et al expatriates play three main strategic roles in corporate internationalization;
1.Control and coordination of operations (management function)
2.Transfer of skills and knowledge; and
3.Management development

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 Lecture on International Human Resource Management

Exhibit 6
Expatriate Failure? Causes of Expatriate Failure.
1. Inability to adjust with the foreign culture
2. Length of assignment
3. Less opportunity to travel
4. Poor work environment

Exhibit 7
Costs of Expatriate Failure.
A) Direct Costs
1. Airfare
2. Relocation expenses
3. Training
4. Salary

B) Indirect costs
1. Loss of market share
2. Difficulties with host government
3. Negative effect on local staff
4. Loss of self-esteem, self-confidence, and prestige among peers
5. Family relations may be threatened

Exhibit 8
Basic Factors in Expatriate Selection

Fam
Cross-Cultural ily R
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Tec y
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Ab

INDIVIDUAL CRITERIA SELECTION DECISION

SITUATIONAL CRITERIA
Co
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 Lecture on International Human Resource Management

Exhibit 9
Other Factors of Expatriate Selection

1.Dual Career Couples

1.Finding employment in the same company
2.Intercompany networking
3.Job hunting assistance
4.Support for commuter career assistance

2.Family Consideration
1.Children education
2.Children marriage
3.The problem of single parent

3.Work permits refusals (particularly for other members of the family)

Exhibit 10
The Recruitment and Selection Process

Candidate
Employment Candidates
planning and
forecasting Becomes
Recruiting Build a
employee
pool of candidates

Applicants’ Use selection tools Supervisors and others

complete like tests to screen interview final
application forms out most application candidates to make final
choice

The recruitment and selection process is a series of hurdles aimed of selecting the best candidate for the job.

1. Do employment planning and forecasting to determine the duties of the position to be filled.
2. Build a pool of candidates for these jobs by recruiting internal or external candidates.
3. Have the application forms and perhaps undergo an initial screening interview.
4. Utilize various selection techniques such as tests, background investigations, and physical exams to
identify viable job candidates.
5. Send one or more viable job candidates to the supervisor responsible for the job.
6. Have the candidates(s) go through one or more selection interviews with the supervisor and other
relevant parties for the purpose of finally determining to which candidates(s) an offer should be made.

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 Lecture on International Human Resource Management

Exhibit 10A
The Recruitment and Selection Process

Finding out vacancy

Stage 1 either replacement or new creation

Recruitment
Job analysis
Stage 2 leads to the writing of a job description and a person
specification

Attracting a field
Stage 3 applicant’s choice of appropriate field

Stage 4 Short listing

sorting out candidates by comparing applications
with requirements

Selection
Selection
Stage 5 by interview and / or by tests

Stage 6 Offer and acceptance

a contract of employment given to the successful
candidate

Induction
Stage 7 of the new recruit into the organization

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 Lecture on International Human Resource Management

Exhibit 10B
A Typical Procedure of Personnel Selection in the USA and in Bangladesh

Typical Personnel Selection Typical Personnel Selection

(in Bangladesh) (in the USA)

Application
Collection of CV

Initial interview
Screening

Employment tests
Employment Test (personality and psychology)

Interview Reference checks

Medical Examination Preliminary select or reject

Final interviews (usually

Hiring Decision with supervising managers)

Hiring decision

Exhibit 11
The Use of Selection Tests
Although there is a consensus among scholars and practitioners that personal characteristics are
important there is a considerable debate about how such personal characteristics can be reliably and
accurately measured. Personality and psychological tests have been used in the selection process, but the
effectiveness of such tests as predictors of cultural adjustment is questioned. Thus, a special type of tests
(4 dimensional) has been recommended by Mendenhall and Oddou which may be seen in the following
exhibit (Exhibit 11A)

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 Lecture on International Human Resource Management

Exhibit 11A
Various Dimensions of Tests that Attempts to Link Specific Behavioral Tendencies to
Probable International Performance
1.The self – oriented dimension
2.The perceptual dimension
3.The others – oriented dimension
4.The cultural toughness dimension
The self ***** dimension ***** the degree which the expatriate expresses our adap

Exhibit 12
Selection of TCN
TCN is selected basically for the subsidiary. But TCN may also work in the home country of the
multinational. TCN becomes expatriates when works in the subsidiary but known as inpatriates when he /
she works in the home country.
Surprisingly there is little literature regarding the selection process for this group of international
employees. It is safe to assume however, that much of what we have covered in our treatment of PCNs
working in the subsidiary i.e., expatriate selection, applies to TCNs as well. Similarly in the event TCN
working in the PCN i.e., the inpatriates selection, applies equally as it applies to HCN working in PCN.

Exhibit 13
Considerations in Hiring HCN for Local Subsidiary
1.Host country’s legal requirements and social customs
2.Standardization vs. localization (of HR practices) issue
3.Mode of Entry (green field vs. acquisition or merger)

Exhibit 14
Arguments for HCN Transfer to Headquarter (Inpatriates)
1.Breaking down the uni-culture of the multinational
2.Facilitating subsidiary learning and integration
3.Developing staff by exposing HCN to the way of doing business in the home country.
Inpatriates is a subset of expatriates. Inpatriates are citizens of HCN or TCN but working in the PCN
(multinational’s home country)

Exhibit 15
Equal Employment Issues
In the recruitment and selection process, multinationals must address the issue of equal employment
opportunity (EEO) for employees in all employment locations.
Equal employment opportunity laws are expressions of social values with regard to employment and
reflect the values of a society or country. In parts of the Middle East, Africa and Latin America, women
have tended to have lower social status and are not universally employed. On the other hand, with the
increasing rate of female entry into the work force, many Western countries have introduced legislation to
cover sex discrimination. Multinational must be aware of legislation and ensure subsidiary compliance
where appropriate. The selection procedures must be defended against illegality.

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