Selection Process for Expatriates

Selection Process for Expatriates Chapter 2 Literature Review: In this chapter researcher tried to discuss all the related studies which are done in past and are available in literature. A lot of work has been done in the literature on the topic of selection. Before proceeding to the actual topic it is necessary to look at the different methods of selection which an organization uses and see that what are the different techniques and criteria which are used for the selection of staff. 2.1 Selection: Moore (2006) discussed this as the selection is the whole process which includes choosing the right candidate for the position from those persons who have been recruited. This involves testing and evaluating the skills of an individual is required for the particular job. According to Dessler (2000) the selection is the process in which the recruited individual is whittled down by using screening tools like assessment centers, interviews, and different tests. 2.2 Expatriate selection: According to (Dowling, Welch, Schuler, 1999, pg: 154) Multinationals take great care in their selection process, however predicting future performance potential of the concerned staff is challenging at the best of times especially operating in foreign environments adds another level of uncertainty. The expatriate selection process results in higher cost to the multinationals including relocation process, allowance and accommodation apart from the training costs. (Hailey 2000, pg; 90) During the expatriate selection process, 02 conflicting forces operate within the expatriates mind. One that pulls the employee into moving to the new place, the other tends to stop him from going (Baruch 2005, pg 129). 2.3 Importance of an Expatriates and International Assignments: The world is globalizing very rapidly and change has become necessary for the organization to survive and to gain competitive advantage internationally. According to Harris and Brewster, (1999) the rapidly globalizing world has increased the need for the international assignments and many of the organizations started considering international management experience for the top management. So the international assignments are becoming an important part for the success of an organization to gain competitive advantage. As discussed by Chen, Tzeng Tang, 2005 that organizations internationalize their operation to gain success and to increase its market value internationally and for this purpose an organization needs effective expatriate who can perform its task properly. In this new era the importance of expatriate has increased because expatriates are the ones who can give an organization proper international exposure and make the organization successful. 2.4 Selection Process: One of the most studied areas for the expatriate selection is the selection process of the expatriate. The selection of expatriate has always been difficult procedure for the multinational organizations. Swaak quotes one HR executive who said. â€Å"My job is to find people in a hurry.† So this system is highly crisis-oriented and unsophisticated. Swaak, (1995) further confirms the problems for the nature of the selection process. Still and Smith (1997) report the results of Australian research, which shows that there were a number of different ways through which expatriates were selected. They studied that the most impressive and important form of selection or evaluation of the expatriate was recommendation of the person by the line manager including chief executive officer or specialist persons. Mostly expatriates in the multinational organizations in a knee-jerk reaction to the need to fill a new or unexpected vacancies overseas. Actually there are well informed intercultural trainers or a good HR professional who selects the expatriates but basically it is HR department within multinational organization who selects the expatriate finally. Managements choose the most technical and competent candidates which makes the expatriates successful internationally. Shilling, (1993 pg 58) 2.5 Types of selection Process: * Psychometric Tests * Assessment Centers * Coffee machine system 2.5.1 Psychometric Tests: According to Passmore, 2008 Psychometrics are the widely used testing method for the selection of the employee and personal development. The psychological test is always important for the selection of the employee especially for the selection of an international manager. According to the validity of psychological tests is disputed. According to Sparow and Brewster (2007) the psychologists the variation between the different natured job test is very small (Schmidt and Hunter, 1998). According to a survey done by The Graduate Recruitment in 2007 two third or about 67 percent of 219 respondents surveyed said that the results of psychometric test had some influence on recruiting and selection decisions, and 24 percent said that it has strong influence, and only 2 percent said that these test does not have any influence. So the above shows the importance of psychometric tests. According to Sparow and Brewster (2007) psychological assessment increasingly involves the application of tests i n different cultural contexts, either in a single country or different countries. Now a day the demand of cross cultural assessment test is increasing due to the increasing factor of globalization to gain competitive advantage in international market. According to Mendenhall and Oddou, 1985 one of the important option for evaluating the selection process is the use of psychological tests and evaluation devices. There are number of instruments available to measure the stress level of an individual. In 2.1 the real importance of psychometric test is shown. Psychometric tests are reliable that the selected person will be the one on whom one can rely. And obviously these kinds of tests are valid for any kind of job. The most important point in this test is that it does not include any biasness and the selectors cannot show the biasness while selecting on the basis of psychometric tests. These tests are also standard for different jobs. All the above mentioned qualities and factors involve in the psychometric tests. In other words one can say that almost all the abilities present in an individuals mind can be noticed, and the end result will always ends up in the right selection of expatriate. 2.5.2 Assessment Centre: As the assessment centers are considered to be one of the best selection techniques so according to Sparow and Brewster assessment centers will be the best idea as a selection technique to assess the competency of international managers. This is rarely the case, however. According to sparrow (1999) Even where assessment centers are used to select the managers in international settings, the key cross cultural assessment centers seems to be to design the assessment process so that it is very adaptable to local environment in which it will be operated. So there is need of cross culture assessment centers in which international managers can be assessed accordingly with the changing environment. Krause and Gebert (2003) have done study on international literature on the conception, operation and evaluation of assessment centers. He examined 281 German firms whose language was German and he compares them with the previously studied firms of United States of America. Study showed that both the American and German firms use the assessment centers but the purpose of some of them was different from the basics. For example the competencies assessed for job analysis might be identified through the use of interviews with job incumbents in 79% of US firms and only 39% of German firms. Most of the German firms rely on interviews for the selection of international managers or expatriates. So the assessment centers are considered to be an important process for expatriate selection. 2.5.3 Coffee Machine System This system was the idea of Harris and Brewster (1999) the key findings of the study show the reality of the selection process for expatriate selection in the organizations. In many organizations the selection process falls under what we call ‘coffee machine system and this system is the most common form of expatriate selection. What happens is that the senior line manager is standing by the coffee machine when he/she is joined by the colleague: ‘Hows it going? ‘Oh, you know, overworked and underpaid. Actually Jimmy in Mumbai has just fallen ill and is being flown home. I dont know who I can choose to work over there at very short notice of time. It is driving me crazy. ‘Have you met Simon on the fifth floor? he is working in the same line of work. He is very good and bright and looks like going a long way. He was telling me that he and his wife had great holiday in Goa a couple of years ago. He seems to like India. Could be worthy to speak to him. Hey, thanks I will check and speak to him. ‘No problem. They dont seem to be able to improve this coffee though, do they? What happen in the organization next is that the manger will take some decision and will have informal discussion with his seniors about Simon and then that man will be called and interviewed and selected for the required position. Accordingly HR department and financial department will be involved in the process and the formal and systematic process will be started. This method is rarely used in the organizations in particular cases when there is an urgent need to fill the position of expatriate. 2.6 Niche Assessments According to Bolt (2008) many assessment venders specialize in certain niches and offer off-the-shelf products to meet clients testing needs. However, vendors can find such persons or individuals for the company who can fit in the organizations new environment and can coop with the new organizations culture. Testing is the most important part of the application process of the candidate because testing gives the good idea of the individuals abilities and competencies. 2.7 Factors involved in selection Process: There are number of factors which affect the performance of expatriate. Dowling, Welch, Schuler, (1999) recognised some of the important and most affective factors and these are the factors which involved to determine an appropriate expatriate selection process. All the factors are shown in a model below. 2.7.1 Technical Ability: According to Hays, 1971 All expatriates are assigned abroad to complete some task weather its building a dam, running some business, or teaching it all depends on the personal technical ability to perform that task. Obviously it is important to consider the individuals personal ability to perform the required task assigned to the expatriate. So in selection it is another important area which needs to look at. Different research findings show that the multinational organization give a lot of importance to the technical abilities of the individuals going abroad for international assignments at the time of their selection. According to Harvey and Novicevic, (2001) technical and functional expertise has been the primary criterion for selecting expatriate managers for assignments. Hixon found that the selection was based on technical ability and willingness to reside abroad. If the individual is selected without keeping in view its technical ability. It can create the big problems for the multinational organizations to complete its related task or assignment. Reinforcing the emphasis on technical skills is the relative ease with which the multinational may assess the potential candidates potential, since technical and managerial competence can be determined on the basis of past performance of the individual who is going to be selected as expatriate. In fact domestic selection cannot be equal to the international selection but person can be selected on the basis of past domestic records which he has performed domestically as the basic criteria is always the same in all the multinational organizations so on the basis of past abilities there should not be any problem for the organizations to select the expatriates. This approach is also found by Foster and Johnsen, (1996) who report the results of the research into the expatriate selection practices for the newly internationalized UK organizations which shows that organizations keep in view the technical skills, and pr evious domestic records while selecting expatriate for international assignments. 2.7.2Cross Cultural Suitability: The environment and the culture where an expatriate is going is an important factor for an expatriate. So the selectors of the expatriates should always consider the factor of culture for the expatriate. Although these factors does not guarantee for an expatriate for his successes but if these factors are not considered it can lead it towards the failure of expatriate. If the culture is considered then it is always important to study the Hofsteds dimensions for cross culture and Trompenaars dimensions so these researches are explained in detail as follows. 2.7.3 Culture: Culture is always important for any expatriate selection, so it is very necessary for HR managers and selectors to keep the factor of culture in view while selecting expatriate for international assignments. There have been a lot of studies on culture and there are a lot of different definitions of culture some of them are given below. (Kluckholn Strodtbeck 1952) define culture as, â€Å"a set of basic assumptions-shared solutions to universal problems of external adaptation (and internal integration- which have evolved over time and are handed down from one generation to the next. The life style of people living in the society is called culture it includes the social, economical, political, religious, life style of the individuals in the country. According to Drennan, 1992 â€Å"whatever is going around is called culture.† Culture is the way of life of a group of people. There are obvious differences between the different cultures such as language, dress, religion, beliefs, and behaviours of the people, and there are also implicit differences between the two cultures such as in values, assumptions about how things should be. So these different degrees of explicitness are often called the culture. ScullionLinehan, (2005) So the culture is very important factor for the selection of expatriate because the individuals move from one culture to another culture for the completion of their assignment. 2.7.4 Hofstedes Cultural Dimensions Greet Hofstedes cultures consequences (1980, 2001) explores the differences in thinking and social action at the country level between members of 50 nations and three regions. Hofstede originally used IBM employees answers to company attitude survey conducted twice, around 1968 and 1972. The survey generated more than 116,000 questionnaires with the number of respondents used in the analysis being approximately 30,000 in 1969 and 41000 in 1973. Hofstede identified and validated four cultural dimensions from respondents patterned answers. For each dimension, he presented possible origins as well as predictors and consequences for management behavior. Hofsteds four dimensions are as follows 1. Power Distance 2. Uncertainty Avoidance 3. Individualism versus Collectivism 4. Masculinity versus Femininity Another dimension which is fifth dimension presented by Michael Bond is Long term versus Short term Orientation was subsequently developed from a research to accommodate non-western orientations and has been adopted from the Chinese Culture Connection study. Power distance: The dimension indicates the extent up to which extend a society expects and a high degree of inequality in institutions and organizations. It refers to the relationship between supervisors and subordinates. It reflects the extent to which the less powerful members of organisations expect and accept that power is distributed unequally. In organisations illustration of a high power distance score is generally represented as a highly vertical hierarchical pyramid. Subordinates are often told or ordered about a particular task but they are not normally entitled to discuss the decision made by the top management so basically the meaning of power distance is that higher the person in hierarchy the more difficult will be this person to approach. So there are some barriers for that person to see their top management. The barriers can be of different ways like the person barriers or the employee is not allowed to see the top manager or they are not allowed to attend the high m anagerial level meetings in which decisions are made. So basically power distance shows the distance between a supervisor and his employee. Uncertainty avoidance: This refers to the degree to which a society prefers predictability, security and stability. According to Hofsted the extent to which the members of a culture feel threatened by uncertain or unknown situations. He argued that high uncertainty avoidance is expressed for example by a companys need for regulations which tends to minimize in the behaviour of its employees. Company rules are such thing which cannot be broken by the employees even if he think that breaking the rule is in companys best interest in such sort of environment the work stress is more and uncertainty avoidance is high. On the other hands if the employees are less affected by uncertainty is called low uncertainty avoidance. Individualism-Collectivism: this dimension relates to the extent to which people prefer to take care of themselves and their immediate families rather than being bound to some wider collectively such as extended family. Hofsted ask the IBM individuals that how important is to keep in view his work goals rather than the organisation. If there is preferred work goals stress dependence on organisation. For example good physical working condition, good ventilation enough space individualism in the work place can be seen. Collectivism can be seen in preference of collective organisation. Masculinity-Femininity: Masculine societies value assertiveness, competitiveness and materialism as opposed to the feminine values of relationships and the quality of life. Males tend to express preferences for assertiveness recognition when doing good job. On the other hand females prefer the aspect of interpersonal work. Michele Bonds Research about cultural dimensions: Another dimension which is mentioned above is Long-term versus Short -term Orientation. In 1987 a questionnaire was developed by Michele bond with the project Chinese Culture Connection (CCC). He developed a questionnaire representing fundamental and basic values of Chinese people. This questionnaire was then given to the students of 23 Asian and non Asian countries. The statistical analysis developed four different dimensions. Three out of four were same as it was of Hofsteds the fifth was different from Hofsted. 2.7.5 Trompenaars and Hampden-Turner Like Hofsted Trompenaar also studied different dimensions of cultures. According to him different culture deals with different universal problems. He proposed three problems which are as follows 1. Social Interaction 2. Passage of time 3. Relationship to the Environment These cultural dimensions describe the characteristics that each culture provides an answer to three fundamental problems. In multinational and international organizations cultural dimensions will be based on the the responses of the managers. The dimensions found by the Tropenaar and Hampden is discussed in detail as below. 2.7.6 Trompennars Cultural Dimensions The Trompenaars cultural dimensions are discussed as follows. Neutral versus Affective: This dimension is particularly based on the certain situation. Trompenaar measured this dimension with the particular question which was how would you behave if you face any problem at work and you feel upset about it? Would you express your feelings openly before other peoples? The answers and responses were different from different countries. The resulting cultural dimension tells us that in particular countries emotion is being displayed together with rationale arguments. This may be confusing for the people coming from the culture where rational argument is provided instead of emotions so that dimension was recognized by Tropmpanaar Individualism versus Communitarianism: this dimension of trompanaar resembles to the dimension of Hofsted which is on employees. This dimension mainly focuses on employees goals within an organization the way they work within an organization and their responsibilities. Universalism versus Practiclarism: This dimension is about the personal behavior and its implement on universal rules for example not telling lie and following the rules and regulations. People can either consider that principles apply whatever the situation, or specificity of each situation determines whether one should apply them or not. Achievement versus Ascription: This dimension is tells us about the personal achievement of the employees within an organization. In the work environment which is achievement versus ascription the employees judge themselves at their own and make decisions. They are also motivated to work more good and to work more hard within the organization. Specify versus Diffuseness: this type of dimension tells us that in most of the cultures the people compartmentalize themselves and divide their work in different phases. Being good friend at work does never means that they should know each other family and of course for good relatives its not necessary to know their work environment. For example a manager will never meet its subordinate while playing golf, he will instead meet some golf coach or golf specialist to improve his game. So that is kind of culture which describe such kind of dimension. Sequential versus Synchronic the time is divided in to two main themes to perform in certain time frame and orientation. Hall, 1959 introduced monochromic and polychromic. Monochrony is a perception that time is linear sequential and definite whereas Polychrony is a perception that time is multilinear. So these two types of times differ for two different cultures. Trompenaars, 1993 develops these themes regarding their implication for action made sequentially or synchronically in an organization. Inner versus Outer Directedness: This dimension reflects the belief either that individuals can control and influence their environment or that they limited ability to do so. Consequences for management are reflected for example in strategic plan either they will tend to plan and provoke changes or try to take best advantage of the available situation. 2.7.7 Family Requirements: Family factors composed of five criteria: marital status, children, spouses attitude, spouses employment and spouse adjustment (Chen, TzengTang, 2005). It is always important for the HR department of MNE to consider the personal life of an expatriate. So the contribution of the family particularly spouse plays an important role for the success of an expatriate for the completion of international assignment. Black and Stephens examined the influence of the spouse on American expatriate adjustment. They surveyed 220 U.S expatriates and their spouses working in Japan, Taiwan, and Hong Kong, they found that the adjustment of the expatriate working abroad for international assignment is positively related to the spouses adjustment. The adjustment of the spouse is highly correlated with the adjustment of the expatriate. Likewise there was an Australian research into the psychological impact of relocation on the partners of 58 expatriate managers. They found that the decisions which were ma de by most of the expatriates to relocate highly depend on the decision of his partner. The above two mentioned researches show that the family of the expatriate highly depends upon the settlement of expatriate abroad. 2.7.8 Country/Cultural Requirements: The host country may be an important determinant. Some regions and countries are hard to adjust like the remote areas away from the cities, or the war zone countries and now days there are some countries which are not safe as far as terrorism is concerned. Accompanying the family members will again be a big responsibility for the multinational organizations. In most of the countries where it is very hard for the Europeans to go for example the country like Saudi Arabia has got the culture according to which women have to cover their heads and cover them properly so it will be a bit hard for the family of western expatriate to adjust in that culture. Or this can be vice versa as well. Weather is another important factor for the countries and it is a bit hard for the expatriates to adjust themselves in the different weather from their host country. Black and Mandenhall (1990) argued about the cross cultural adjustment cross cultural adjustment that it can be facilitated if the expatria tes have awareness of the norms and behaviors of the host country. 2.7.9 MNE Requirements: Multinational may consider the proportion of expatriates to local staff when making selection decisions mainly as an outcome of its staffing philosophy. However the requirements of the different MNEs is different or they may be require to use PCNs and TCNs, obviously this will react to the selection decision for the multinational organisations. Other situational factors are as follows The mode of operation involved: Selecting staff to work in an international joint venture may involve major input from the local partner, and be constrained by the negotiated agreement on selection processes. Duration of assignment: Family members tend to accompany an expatriate when the assignment is only for three to six months duration, so family requirements may not be a strong factor in the selection decision. International training development In above 2.3 the whole process of expatriation is shown it starts from the recruitment and selection, once the right person is chosen for the right job then the most important step of training starts which is directly related to the pre departure step for expatriation then the process of development of the process starts which ends up in making of an international team when an expatriate is fully trained then they are told about the nature of assignment. 2.7.10 Language: Language is another important aspect when adjusting away from home country. This ability is often linked with the cross cultural ability. For an expatriate it is necessary to learn a bit of language of the country where he is going to accomplish its assignment. According to Tung knowledge of host countrys language is important for functional head and operative jobs. According to victor (1992) difference in languages is the major barrier for the international assignments. But according o some studies and researches in the past the language sometimes is not very much important for expatriates completing their international assignments. In terms of other selection criteria the factor of language is placed lower down when looking into the factors for the expatriate selection process. As done by the price water house research 1998 they placed language at third place while determining the factors for the expatriate selection. Basically language is not any problem for the selection of expat riate where the host country speaks the same language so the problem occurs when the expatriate has to be select for the non English speaking language. But now a day the English has now become an international language and it is necessary for an international manger to learn the English language to communicate even in the non English speaking countries. 2.8 Strategic choices in expatriate selection: As we have seen above the factors which need to be kept under consideration while selecting expatriates for international assignment. The process of selection is basically used to fill the international positions of the organisation. The organisation faces several strategic choices during selection process. The strategic choices are mentioned as follows. * Internal recruitment versus external recruitment. * Individuals versus teams. * Technical qualifications versus other selection criteria. * Extrinsic rewards versus intrinsic rewards. The above mentioned strategic represent two opposite extremes on a continuum. The majority of the decisions fall in between the two extreme strategies. 2.8.1 Internal versus external recruitment Interesting findings by the recent study on expatriate selection is that there is shortage of international managers, due to growing concern of international mobility (Scullion, 1994). The shortage of international managers creates problems in expatriate selection. From an organisations point of view the selection decision is made under circumstances where the organisation has a lot of applications looking for the job of international managers. Brewster and Scullion 1997 suggested that availability of the international managers seems to be the critical variable in acceptance of international assignment The above discussion tells us that it is not always necessary that the required managers or expatriates are always available within the organisation to overcome this shortage of the managers the organisation then find some external sources to fill up the position. According to the study by Torbion 1982 and Scullion 1994 most of the organisations mostly rely on the internal sources of the organisation to fill up this position. On the other hand Boyacigiller 1990 suggested that the external market is always full of required talented managers who can work as an international manager. Here comes a very interesting question that why the most of the researcher emphasis mostly on internal selection of the international managers? The answer which click in mind is that internal selection makes the task easy for the selectors and HR managers while selecting the expatriates because as a member of organisation most of the selectors know their performance and abilities of the individuals working within an organisation. So this can give them benefit to select the expatriate with the required abilities. The internal selection of international managers becomes reliable when strategic purpose of the assignment is co-ordination and control of operations. This point was discussed by Black, et al 1992 by saying that for the good co-ordination for an expatriate in global market requires assignments of the people with broad experience in the firm including a lot of contacts within the firm. 2.8.2 Case study Barclaycard International (centralized control and recruitment primarily for overseas labour markets.) â€Å"Barclays introduced its first credit card in the United Kingdom named as Barclaycard and now Barclays has one of the major global credit card businesses which have speedy growth approach. Outside the UK, it operates in the United States, Germany, Greece, Italy, Sweden, Norway Portugal, Ireland, France, Asia Pacific, and across Africa. Barclays is currently looking to have alliances with Standard Bank of South Africa, acquisition of Juniper Financial Corporation and a series of in-country launches. Barclays employed 3000 staff, and it had 15 per cent based in the UK. To enable development, Barclaycard International recruited a group of people management process to bring firmness, management and good organization of people. Challenges were different in the different cultures depending upon the country, culture and business market of the country. The basic and first age