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Globalization And Compensation Essay

1838 words - 8 pages

The advent of the multinational organization offers unique challenges for the human resources professional within the area of compensation and benefits. To effectively administer human resources programs brings challenges from which there is no clear historical path, and must address not only training and development for the multinational corporation employee, but in many cases for the family, which can be a costly endeavor because of the high rate of failure hinging on the expatriate’s worldview.
Compensation programs exist under the purview of the human resources professional within the multinational organization (MNOs), and the difficulty in creating and maintaining an effective, ...view middle of the document...

Ethnocentric Attitude
The ethnocentric attitude holds a basis in parochialism, where one holds the view of the world solely through one’s own eyes and perspectives. The cultural concept of personal training, ideas, concepts, and cultural constructs are superior to other cultures. Managers who believe in ethnocentric attitudes feel superior to people in foreign countries. The ethnocentrisms believe that foreigners or host-country nationals do not have the requisite skillset or expertise, knowledge, or experience to be placed in a position of decision-making for the corporation, as do those from the home country.
Geocentric Attitude
The geocentric attitude holds a world-oriented view that focuses on the global picture. A manager who holds a geocentric view looks for the best practices, approaches, and people regardless of nationality, or other defining criteria. “A geocentric attitude requires eliminating parochial attitudes and developing an understanding of cross-cultural differences” (Coisne, 2014, p. 1).
Human resources professionals can offer a training and development packages that assists the new appointee with regard to cultural diversity and sensitivity specific to the region for expatriates, or training on corporate strategic plans for the host county national. The training should also include, “policies and practices that support job satisfaction of expatriates while abroad” (Lee, 2005, p. 278).
Expatriate Recruitment
The human resources professional can increase the success rates of expatriates by screening out inappropriate candidates. “Local performance and foreign performance potential are not the same thing” (Chitakornkijsil, 2010, p. 383). According to Chitakornkijsil, (2010), four elements may predict success in a foreign posting: 1) perceptual ability; capacity to know why people of different origins behave the way they do; critical for managing host-country nationals, 2) cultural aspect; some countries’ cultures are more unfamiliar and uncomfortable, 3) self-orientation; expatriates, especially need high self-confidence, high self-esteem, and mental well-being, and 4) others-orientation; the ability to interact effectively with host-country nationals in developing long-lasting friendships and a willingness, in learning the language, to communicate.
The Expatriate Compensation
Once appropriate candidates are identified, recruited, and employed, it is the responsibility of the human resources professional to navigate the employee around the landmines that may await the managing assignment. By developing a “global compensation structure that understands the “political, social, legal, and cultural differences among countries, which could trigger events that would adversely affect the long run profitability or value of the company” (Haile & Williams, 2011, p. 25).
Beside the base compensation package that should mirror the base compensation package of similar positions within the corporate headquarters, there should be...

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