Factors Affecting the Adoption of High Performance Work Systems in Foreign Subsidiaries: an Empirical Investigation in Hong Kong

Performance criteria and goals are best established by combining the values and norms of each local environment with the home-office’s performance standards. An individual country profile should be developed and should take into account the foreign subsidiary’s environment. This profile should be used to review any factors that may have an effect on the expatriate employee’s performance. Such factors include language, culture, politics, labor relations, economy, government, control, and communication.

Selection and performance management programs that are designed for organizations that have expanded their U.S. workplace to other countries must be designed to take in many other considerations that normally wouldn’t make a difference if all the employees were from the same origin. Expatriate employees and their families should be assisted to help with adjusting to their new culture. Performance management and selection programs should be designed to incorporate the differences in ethical and cultural backgrounds that match the employees and or applicants who are overseas. This paper further examines what is necessary for selection and performance management programs for a U.S. based organization that is expanding overseas to China.

They need to build integration among HR practices and strategies of its auxiliary firms in distinctive region with a specific end goal to accomplish general organizational targets. Then again, these associations additionally guarantee a critical level of adaptability in their IHRM procedure on the grounds that representatives from distinctive nations are sponsored by diverse cultures and social qualities. Adaptability impacts the workers' execution. Due to the strengths of globalization and the associations' interest to create and implement a worldwide methodology, International Human Resource Management (IHRM) is turning into an essential to accomplishment of the organizational. The essential distinction between domestic and global human resource administration is the knowledge and obligations

Different compensation packages for Parent Country Nationals , Host Country Nationals, and Third Country Nationals

To succeed in the world today corporations must develop global strategies. An evolving evolution in the understanding of international organizational behavior and management of global human resource systems has developed and evolved rapidly in the twenty-first century. Focusing on global strategies, theories, and management approaches allow us to understand the influence of national and ethnic cultures on organizational functioning. Successful global firms competing under transitional dynamics need to understand their potential clients’ needs, no matter where in the world the clients

Managing HR in MNC is different from the way the HR is being managed in the country, According to Morgan (1986) there are three factors that differentiate between IHRM and domestic HR: First, the countries of operations such as the -country where a subsidiary may be located, the host-country where the subsidiaries are located, and other countries. Second, the different types of employee, in international environment the HR management have to deal with the host-country nationals (HCNs), expatriates or home-country nationals (PCNs) and third country nationals (TCNs), for example if L’Oreal hired an Indonesian employee in their Indonesian subsidiary the employee is a HCNs, and when manager from L’Oreal Headquarter in France came to work in Indonesian subsidiary the manager is a PCNs, and if L’Oreal employs manager neither from Indonesia nor France to work in their Indonesian subsidiary the manager is TCNs. Third, is the way HR practices (eg. staffing, compensation, training, and etc) are conducted. Although IHR practices seems to have the same activities as domestic HR, in IHR the manager will be dealing with different environment and diversity of employees from different cultural background. Moreover, as mentioned earlier dissimilarities between domestic and international HR management mostly due to profound differences between host and home countries in term of culture,

Globalization is changing the nature and pace of International Human Resource Management (IHRM). Now virtually anytime, anywhere a globally-based project can be initiated and within less than an hour a project team assembled, with goals defined. This is the 21rst century new normal; business models will shift and change rapidly in respond to the changing nature of globally-based opportunities and threats. One of the main catalysts of much global change is occurring as a result of the Chinese economy growing so rapidly. In order to manage a Chinese workflows however, incouding the core functions of recruitment, training, performance evaluation, and compensation from a purely monetary and cultural standpoint, cultural frameworks are needed. In defining strategies for each of these areas, the Hofstede Cultural Dimensions Model (Hofstede, McCrae, 2004).

The work of Walsworth and Verma (2007) entitled "Globalization, Human Resource Practices and Innovation: Recent Evidence from the Canadian Workplace and Employee Survey" reports that firms create competitive advantage in several ways including international expansion and entrance in to markets that are newer and bigger. Also stated as a way that firms can gain a competitive advantage is to be more efficient as well as being more innovative. A combination of these approaches is generally followed by many firms. The role of the practices in the workplace has been the focus of many human resource management and industrial relations studies. HR practices in the workplace contribute to a firms' competitive advantage through bringing about an increase in productivity and through facilitation of innovation in the workplace. (Walsworth and Verma, 2007, paraphrased) A study conducted by Baptista and Swann (1998) is a comprehensive review that "examines the link between internationalization and innovation by investigating the HR practices that are used by workplaces with higher degrees of internationalization in their quest to innovate." (Walsworth and Verma, 2007) Barlett and Ghoshal (1999) reported that the connection between innovation and internalization is rationalized in the following ways: (1) )

Executives believe that their emphasis on HR activities has contributed significantly to the Bank of Montreal’s achieving period profits for seven years in a row. In summary, it is evident that the transition of HR management at GE Fanuc and at Bank of Montreal has enhanced organizational competitiveness and success.1

* In an ethnocentric approach, the MNE exports the home HRM system abroad. Strategic decisions are made at the headquarters and subsidiaries are managed by expatriates. Like Porter said: “In a global industry, a firm must integrate its activities like HRM on a worldwide basis to capture the linkages among countries”.

Approaching the second decade of the 21st century provides a fresh opportunity to think about kinds of possible management. In this regard, the area of human resource management (HRM) has become even more important to business, policymaking, and nations, including in the economically dynamic Asia-Pacific region. Most of the Asian economies had rapid growth rates for the past two to three decades, although uneven from year to year, and were then hit by the 1997 Asian Financial Crisis. Interestingly, now the very same HRM practices formerly seen as paragons (and taken as “best practices” by some),

International Human Resources Management (IHRM) definitions are wide-ranging and for some, IHRM issues explore aspects of Human Resources Management (HRM) in Multinational Enterprises (MNE)’s (Briscoe 1995) while others ‘strategic international human resource management (SHRM) is no more than the application of SHRM to the international or global business context’ (Nankervis, Compton & Baird 2002, p.617). Much IHRM work has focused on the areas of international staffing and management development, however, IHRM should not neglect many related areas (Rowley & Benson 2002). Another approach focuses on comparative industrial relations (IR) and HRM, where attempts are made to describe, compare, and analyse HRM systems and

This research paper is based on the cultural barriers which hinders employee performance to a great extent. Staffing is one of the biggest issue one faces in the global market. Companies today strive to diversify their workforce as much as possible by hiring employees from various backgrounds. There are three main staffing strategies a company can implement when entering an overseas market, with each having its advantages and disadvantages. The first strategy is a home-country national strategy. This staffing strategy uses employees from the home country to live and work in the country. These individuals are called expatriates. The second staffing strategy is a host-country national strategy, which means to employ people who were born in the country in which the business is operating. Finally, a third-country national strategy means to employee people from an entirely different country from the home country and host country.

In today’s business environment, the complexity of international business has increased and international competition has been highlighted as an essential element for multinational firms (MNCs). Thus, in order to gain competitive advantage, various resources are utilized, such as financial capital, technology location or human resource (HR). Moreover, HR could be seemed as one of the most important resource which has also become a focus of attention of senior managers in MNCs. As suggested by MacMillan(1984), MNCs can gain competitive advantage through use of HR practice, such as training, compensation, socialization, selection, performance appraisal and career development, as long as other firms are unable to duplicate their

and development activities, adequate job satisfaction and employment security all impact positively on the overall business and performance of a corporation. It has also been found that if HRM is linked to the overall business of a company, it may further enhance the performance of the company (Pfeffer, 1998). Moreover, due to the complexity of managing people from different socio-economic and cultural background, it is argued that the way global employees are managed will also have a significant impact on a firm‟s economic outcome (Bjorkman & Xiucheng, 2002). However, it has been noted that few organizations know how to manage HR effectively in a dynamic international environment because best practices in one context do not always translate to other contexts with differing socio-economic conditions and cultures (Chilton, 1993).