|Type of paper:||Case study|
|Categories:||Management Human resources|
Question 1: Traditional Expatriate Package
A traditional expatriate package is paid for the pre-posting trips which take place before an individual is posted to a new city. This helps in searching for schools to take their children and also the place they will be living in. Secondly, the individuals posted on these international duties are given a financial allowance to help in settling at the new locations of work. The package provides that individuals should be paid as they were paid before they were posted in their new locality to ensure that they can attain to live the same life they were used to before the transfer. This allows people to be paid in international currencies as a means of achieving standard payment (Wood, 2015). Lastly, the expatriate package provides for several flights back home, and individuals were allowed to travel back home several times in a matter of two years after their relocation.
However, due to the company's' emerging issues, this package has limitation. The pre-posting flights are an extra expense to the company, and in the long run, they may be too expensive to uphold. The idea of ensuring that individuals earn as much as they were making in their country of origin may be unsustainable in case they are posted by a low-income company that is incurring high expenses (Wood, 2015). In low-income countries, the return may be small to cater for this expenses and the company may end up operating at a loss. The rise in globalization requires companies to maintain their cost low to attain profitability.
Question 2: SWOT Analysis
Strengths - the local international transfers are employee initiated, and the company provides a slow landing in the foreign country with the aid of the host country. In this case, this offers an alternative to the expatriate packages in the relocation of an international manager.
Weaknesses - for the local international policies, the salary is based on the salary of the host country. This means that if an employee moves from a high-income country to a low-income country, then their salaries are adjusted to the salaries of the host countries. This policy would make it very difficult to attract foreigners based on purely local wage.
Opportunities - when an employee is relocating to a foreign country, then they are provided with extra benefits which would include relocation allowances, settling-in support and one home trip in the first year of their contract.
Threats - unlike the expatriate contract, in local international policies the pre-assigned visits are not paid for by the company. As such individuals have to conduct a house hunt, school search and negotiate on their expenses. After two years in the host country, the employees cannot receive any financial support as they are regarded as locals.
Question 3: International Mobility on a Local International Contract
The greatest need as to the employers perceptive is to be in a position to lower the operating costs. Since these multinational companies operate in different countries, it is critical to ensure that the operating cost in each country s minimized to attain profitability. This would include wages of employees, allowances given to these employees and traveling expenses which are the responsibility of the employer. If these costs are maintained at their minimum, then the company will attain profitability. Secondly, the employer should ensure that the talents in the international workstations are the best since the employees are the most valuable assets a company has as they drive the company's productivity (Wood, 2015).
The needs of the employees are robust as they also include their families well being. It is essential for an employee to have their families with them when they are moved to a different country to create peace of mind in them (Wood, 2015). The employees will also want to feel more valued, and that their well being is well catered for and as such, they don't expect a reduction in their salaries and even the salaries should be increased. The employees will always want a financial reward for their effort in the contract.
Thus, it is essential to include some elements in the package. These include considerable financial rewards, help in settling in the foreign country with the family and the employees' obligation to work to their best abilities.
Question 4: Distinction between Assignment Packages
Expatriate Contract involves the transfer of the talented employees by a company to a foreign country whereby they are entitled to handle the company's overseas projects and transfer knowledge to employees in those countries. The expatriate contract for expatriates is fairer to the employee as the contract is home-based and the lifestyle of the employee is maintained in the host nation. However, this contract can be costly on the side of the company as the base salary is maintained, caters to the family when relocating and the cost on flights back home. According to t the equity theory, the employee ought to show the effort to be given this package (User, n.d.).
In a Local international contract, the employees are willing to stay for a very long duration, and their salary is based on the host country standards. For the local international contract for local foreign hires, the employee may not be favored especially is they are moving to low-income countries, and as a result, this may favor the company. However, if the host country is a high-income country, then this contract will favor the employee at the expense of the employer. Also, the local international contract is not favorable as there are no benefits to house hunting. Based on the equity theory about this contract, the company gives the package
Local contracts are based on a particular country's company standards. Fairness is used in the organization to reduce disputes and at the same time optimize the allocation of resources procedural justices are used to enhance positive behaviors like increasing a specific percentage of basic salary that involves local international contract and at the same time reduce benefits.
Question 5: Policy Framework
The company should take into considerations the requirements and costs that are involved when settling employees in a new place. The experience can be stressing for the employees as they are relocated to new places that they are not familiar with and leaving behind their friend. It is thus essential that they are accorded the best support possible to help them settle in quickly and in the best manner possible. Secondly, the company must consider the various lifestyles of its workforce concerning the places they are moving to. This helps an employee to maintain the same living standard they had with their family before moving. As such, the company has the responsibility to pay the employees the same salary as they earned before relocating and this would help them settle seamlessly (Benson, 2011).
The following policies should be implemented in the policy framework. First, a thorough selection of staffs to be relocated to another country should be, and if possible, the company should have a policy where young families are not relocated often to ensure the families stability. Employees without families' should first be considered as this also reduces the settling costs incurred by the company. Secondly, the policy should ensure that a compensation package is given to the relocating employees as a sign of gratitude and that their earning should be maintained as they were before relocation. As such, exemptions should be granted to employees with personal problems as thus the workforce should be flexible to cater for the global workforce.
Benson, P. G. (2011). Emerging themes in international management of human resources. Charlotte, NC: Information Age Pub.
User, S. (n.d.). Home - Master Programme in European Human Resource Management. Retrieved from http://www.ehrm.de
Wood, J. F. (2015). Dowling, P. J., Festing, M., Engle Sr., A. D., International Human Resource Management (6th Edition), Cengage Learning EMEA, 2013. Management International Review, 55(4), 589-592. doi:10.1007/s11575-014-0236-1
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