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International HR Policies and Procedures

international hr policies

If your business operates across multiple countries, it is imperative that it stays informed about local employment laws. As part of best practices for international compliance, filing international codes or policies with local governments would help.

Create incentive compensation packages tailored to the requirements of your foreign offices, taking into account factors like cost of living expenses, hardship posting allowances and currency differential payments.

Expatriate Compensation

Establishing an international compensation policy is one of the most significant decisions any company must make. A policy must be cost-effective, understandable and easy to administer while drawing upon an understanding of local customs to support expatriate attraction and retention as well as career succession planning. Furthermore, guidance must be provided regarding repatriation and overseas assignments between home locations. Finally, local customs must also be considered in any changes that need to be implemented for foreign locations where employees will work.

Prior research indicates that employees typically do not seek and accept international assignments solely for financial considerations (Borstorff, Harris, Feild & Giles 1997; Hippler 2009). Other motivations may include professional advancement or family goals fulfilled; expatriates want to feel that any rewards received as a result of accepting an international assignment are commensurate with their contribution to MNC performance.

There have been various international compensation approaches developed, such as the balance sheet approach and going rate method. Both approaches have their own set of advantages and disadvantages: while the former tends to be costly and foster an “when in Rome, do as the Romans do” mentality among employees; on the other hand, rewarding employees according to local market rates in destination countries provides greater rewards than does rewarding with cash payments alone.

Expatriation Benefits

Expatriate benefits are additional compensation packages designed to aid international assignees during their work abroad. They may include everything from housing and education expenses, to travel allowances. Each expat typically needs different considerations when making this choice; for instance, single young graduates might differ significantly from senior managers with family responsibilities and children.

Benefits are key to retaining and motivating expat employees, while helping your business adhere to local employment laws. But it is essential not to overemphasise rewards to such an extent that it creates financial hardships for its staff.

As one example, many North American companies provide expat employees with gold-standard medical benefits plans. If these benefits suddenly decrease for financial reasons, employees may become confused as their perception of them becomes altered.

Global business strategies that prioritize hiring international talent are an effective way for a company to stay ahead in a globalized economy. But creating such policies requires an in-depth knowledge of all of the complexities involved with managing global assignments – from making sure they cost-effective, understandable and compliant with employment laws; to determining how employees will relocate between home and host locations efficiently.

Expatriate Training

Expatriate training is a vital element of international HR policy development, as it prepares employees for the language, cultural and professional changes they will encounter on overseas assignments. Coca-Cola provides its employees with comprehensive cross-cultural training prior to moving abroad for projects; the purpose is to make participants aware of different cultural dimensions in their host nations so as to avoid culture shock – with larger differences on these dimensions likely leading to greater cultural shock.

Trainees should become acquainted with the legal requirements and company conventions applicable in their host nation during this phase. For instance, they might learn how to negotiate contracts or business deals with local partners; similarly they will be informed on business etiquette so as to avoid embarrassing social faux pas or offending local executives and clients.

HR could offer additional support by including expatriates in company communications and virtual all hands meetings so they feel integrated into the team while working abroad, alleviating feelings of isolation and increasing chances for success in their new location. HR departments must also establish rating criteria specifically tailored towards expatriates that differs from domestic evaluation systems used at their companies.

Cultural Diversity

Successful companies in a global economy recognize and embrace cultural differences between workers from different nations. By welcoming cultural diversity, successful companies can reap numerous advantages such as improved teamwork, greater creative problem-solving skills, better communication and employee satisfaction – but working across cultures may present its own set of difficulties – this is where HR plays an integral role.

International Human Resource Management (IHRM) encompasses many important facets, such as compensation packages and benefits, global mobility management, cultural issues related to cross-cultural communication and cross-cultural expectations and assumptions that differ between cultures. HR professionals should possess skills for recognizing and responding appropriately.

Ethnocentrism, which refers to an individual’s tendency of believing their culture to be superior to all others, can often be the source of cross-cultural conflict and miscommunication. When operating across borders, this tendency can manifest in prejudiced thinking which hinders effective workplace relationships.

Education of employees on various cultural traditions around the world is an integral component of effective cross-cultural communication. By taking time to learn about other cultures, employees can dispel any preconceptions about other people and their customs that could otherwise lead to miscommunication and hostility within the workplace. Furthermore, providing all employees with opportunities to express their cultural identity via their preferred language for meetings and communications is paramount.

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