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Case 5: Local and International? Managing Complex Employment Expectations University Canada West HRM621 and Human Resource Management in the Global Environment Instructor Name: Professor Hamid Kazemi

2 Case Summary

The case is about the expatriate named Akiko Nishimura, she is born and brought up in Japan. She started working in the controlling department of a German Multinational manufacturing company. To develop her talent and provide her international experience, the company send her on an expat assignment in New Delhi India. She is in dilemma whether she should move to Singapore with her husband ignoring the benefits and remuneration or she should stay in New Delhi without her husband and kids. In both cases, she is not satisfied. Her manager (Puja malik) explained to her regarding the new policies according to which Akiko is not eligible for a full expatriate contract. However, she offered her a new contract, which seems to be a demotion for her as new package contains fewer benefits and salary in contrast to the present package. According to the new contract if Akiko decided to go to Singapore than her salary will be decreased and she had to hunt for her housing, kid's schools and had to manage her cost of living. Local International expatriate policy has various pros and cons. It is beneficial for company at one extent as it is cost effective while on other side it results in employee demotivation. Additionally, by using information from the case study, various aspects of Local International Expat policy such as traditional expatriate package, SWOT analysis, etc. Furthermore, the comparison between employer and employee needs regarding contracts is discussed in a further paper.

3 Question 1 Expatriate is defined as the assignee of the home country who is sent to another country (host country) to perform the key position in functional departments [ CITATION McN16 \l 4105 ]. Akiko is an ex-pat sent to New Delhi with a bunch of benefits to learn new things and grab more experience. She signed Local Expatriate Contract with lots of benefits as moving from one country to another country is quite expensive. Analyzing the living cost and expenses, the traditional contract consists of enormous benefits that are applied to talented employees[ CITATION Bla99 \l 4105 ]. Few of the benefits are as follow: 

Home Based Salary and allowances: All the allowances and benefits given to Akiko were based on the home country. Being the ex-pat in a foreign country she was getting special treatment and allowances in contrast to host country employees.

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Relocation support: Traditional contract provides resettlement benefits for expatriates. Thus, according to its company helps the expat to find house and school for their kids[ CITATION Dow131 \l 4105 ].

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Visa and ticket support: Company provided travel costs and visa permits to expat. Additionally, to prevent culture shock one home trip ticket was provided to expat according to a traditional contract.

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Medical support for both foreign assignees and his/her family is covered by the company according to contract.

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Other benefits such as health insurance, pension plan, bonus, social security was included in traditional Expatriate contract.

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Salary paid to assignees was more in contrast to local employees. Benefits and remuneration provided to expats were three times more than local employees.

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It was a home-based package. This indicates that expat had to return to her home after the completion of the assignment. Thus, the assignee had to return to his/her home country before the contract expires[ CITATION And \l 4105 ].

It is costly for organizations to send expats to a foreign land because the cost to the company is three times more than what they paid to local employees. They bear this cost and provide the above-mentioned benefits to their foreign assignee's because of the following reasons: 

Employees who are sent as an expat to another country are with a special talent. Thus, to retain them, the company offers them such benefits and transfer knowledge across borders.

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To provide them with international experience, which in the future will be beneficial for the company itself.

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By providing global exposure to employees, they develop the skills and talent of their employees, which further helps them to increase global competitiveness.

Organizations increased cost will not be considered as an expense, it will be appraised as a benefit for the company if the expatriates meet the company's expectations. However, on the contrary side, there are various limitations of traditional expatriate contract few of them are highlighted below: 

Costly: As mentioned in the case study that this contract cost three times of base salary [CITATION And \l 4105 ]. It is more expensive to send an expatriate to another

5 country in comparison to hiring an employee from a host country. The company had to bear all the expenses such as health care expenses, travel expenses and many more.

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Inequality in pay scale: As expatriates get higher salaries than local employees, thus in view of local employees it is considered as inequality of pay. They got more benefits in contrast to local employees. This might result in effecting the morale of local employees[ CITATION And \l 4105 ].

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Misusing the services: Employees started misusing the services and keep on extending their contract by expanding the time of their assignments to enjoy special expat benefits. This increase in company costs[ CITATION And \l 4105 ].

Question 2 SWOT analysis is a tool used to analyze the internal and external environment of the organization. Internal organization analyze the strength and weakness of the organization while external organization interprets the treats and opportunities [ CITATION She20 \l 4105 ]. Local international policy is a new contract that fits between both local package and an expatriate. In local international policy, the cost covered by the company is as follow[ CITATION And \l 4105 ]: 

Visa permit and travel cost that includes one free trip to home during the first year only)

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Salary based on host country as well as incentives according to the local contract

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Medical benefits that consist of free medical checkup

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Allowances are provided for school and housing facilities. These allowances are temporary and optional thus allowances are provided only during the first year of the contract.

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After 2 years the contract automatically gets converted into the normal contract.

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It was based on a compensation approach in which the assignee receives a salary according to the host country's salary rate in addition to some temporary relocation allowances.

However, based on these factors the visual representation of SWOT analysis of Local International Policy is as follow (Figure 1):

WEAKNESS

STRENGTH

-Minimum support to expats from company -local salary package -More challenging for expatriates

-Cost Effective i.e Less cost burden on company -Equality in pay scale

OPPORTUNITY

SWOT

-Saved cost can be used for further business expansions -Encouragement to local talent

THREAT

-Employee Demotivation -Loss of Talent for company

Figure 1 Local international contract is cheaper in contrast to the traditional expatriate contract it is more beneficial for the company and they can use it as a strength. They can further use the saved

7 amount for the expansion of the business. It is considered an opportunity as according to the traditional contract the company has to pay 3 times more. Thus, local international contract is more affordable and beneficial for company. Furthermore, as remuneration is according to the local employee[ CITATION McN16 \l 4105 ]. There is no special treatment for expatriates, they are treated similarly to local employees and no special benefits are provided to them. Their salary package is same as local employees thus because of this local employee doesn’t feel demotivated. The main reason for adopting new rules and policies is to attract more talent. No doubt it seems to be more cost-effective, but the package offered to expatriates is less beneficial for them as the benefits offered in it are for a temporary basis. This can result in employee demotivation and the company can lose their talent as this will increase employee turnover. Question 3 The package which is provided by employers to personnel while a person shifts to a new workplace for convenience of employees along with family members is a Local international package. While international mobility is a great opportunity for an employee but starting work from an unknown place is not easy[ CITATION And \l 4105 ]. Some difficulties can be faced by people because the family of that person also face hardships such as education of children, language barriers for old persons or parents, Culture shock is also included in this and managing work along with these difficulties is not easy for that person[ CITATION She20 \l 4105 ]. On the other hand, while providing these all facilities to the workers, employers face extra cost burden, recruitment for new employees in that person's place[ CITATION McN16 \l

8 4105 ]. There are some needs of employees and employers regarding international mobility on a local international contract: Employers needs ● Expat a talented employee which uses lesser cost on training and other procedures. ● During the starting of expat process needs initial support and pathways for selecting a suitable candidate. ● Protecting the interests of the association and its workers. ● Holding their key ability and workers. Employee needs ● Better opportunity for future whether the job is the same but at least for challenges regarding mobility faced by employees and whole family members. ● Support from the boss while settling in the new workplace like new rules and regulations, accommodation facility and so on. ● Getting high salaries and benefits because of leaving the country, change the culture, and home. After considering both parties needs the package which is given to expatriate should include the following benefits: ● Higher amount of salary than the current amount ● Accommodation place or compensation for living. ● Job security should be given to workers in case if the person returns home country after any reason. Question 4

9 In the case study, three kinds of assignment package are discussed such as an expatriate contract for expatriates, local international contracts for local internationals and local contracts for external internationals[ CITATION And \l 4105 ]. Local international package was developed as an alternative to expatriate contracts. The local contract includes the salary, which is based on the host country's salary system. Expatriate contracts include some extra benefits for the employee, high salaries and some special treatments. Local contracts include almost the same benefits at the beginning stages of the contracts and after that other local benefit with local salary[ CITATION And \l 4105 ]. Even if the benefits and treatments are different in all the packages but the roles and responsibilities are the same for all the employees in any of the contracts. Equity theory Equity theory, which is also called Adam’s equity theory mainly focuses on having a balance between a worker’s inputs and outputs at the workplace. It can benefit the organization a lot when the employees succeed to find that balance. By having this balance, employees can have a more productive relationship with the organizations. Equity theory can be found in any workplace, which tells clearly that what efforts an employee is putting at the workplace and what is he/she getting out of it (Margaret, 2016). A positive relation between it brings satisfaction to the employees and thus increase productivity. Equity theory states that there should be a fair distribution of benefits between all the employees whether he/she is local or international. All the parties should be rewarded equally. It can be considered as a balanced approach towards fairness because when all the employees are giving the same level of employees, they should get the same level of output. Employees can get distressed if they are under-rewarded or if others get over rewarded even if they have worked on

10 the same level. Both of these situations can create a risk to the management because they can lose skillful workers because of that (Margaret, 2016). In the case, Akiko was in a similar situation when she asked for a higher salary and more benefits so that she can easily adjust her transfer to Singapore. By connecting the theory to the case, we can conclude that there should be fair treatment in terms of benefits, compensation, job roles, etc. Hence, the main goal of the theory is to make it clear that employees will get motivated if they will be rewarded the same as all others. In this case, the expatriate contract is good but the difference between the local international contracts, the local contract is very unfair, and both of these should include the same benefits and roles. Procedural Justice Procedural justice is concerned with fairness in the process, which helps to solve disputes and allocate all the resources and benefits fairly. This phenomenon could be used in the workplace to ensure fair work practices for all the employees, which brings positivity to the workers. The organizations can use the following practices to bring fairness at the workplace: 

The company has to set the same rules for all the employees without any partiality. The situations of over and under rewarding to employees should be eliminated.

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The rules and decisions of the company and the managers should be consistent so that employees can have a feeling of security in them.

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The decision-maker should consider all the employees equal. They should not be partial or biased towards any of the members and all the managers should take fair decisions.

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There should be some policies and practices in favour of the employees, which can encourage the employees to speak up against unfair decisions.

12 Question 5 When a company starts globalization then there are some policies and procedures needed for easy task In this way, the arrangement ought to be executed from the Top managerial staff that will stream to the leaders of the considerable number of nations, from where the approach records and rules are travelled to every office and divisions of the nations, where they get actualized to make the standards similarly reasonable for all. Recall the accompanying focuses: 

The approach must be made while dealing with the necessities and reasons for every single asset of an association around the world.

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It should fit the desires for everyone in an association and ought to turn into the wellspring of inspiration for all.

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It ought to be actualized at all degrees of chain of command with no segregation.

Arrangement rules and reports with usage 

It ought to be imparted to all the offices and divisions using messages and open fliers.

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A reality trial of the arrangement is to be made at a ground level to survey its results, representative responses and recognitions, before its execution.

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It ought to be reasonable, legitimate, and open to banter for all

13 References Andresen, M. (2013). local and international? Managing complex Employment and Expectations. International Human Resource Management. Black & Gregersen. (1999). The Right Way to manage expats.Harvard Business Review. https://hbr.org/1999/03/the-right-way-to-manage-expats Dowling, P., Festing, M., & Engle, A. (2013). International Human Resource Management. Cengage Learning. Margaret, N. (2016). Equity theory. Work Attitudes and Job Motivation. https://wikispaces.psu.edu/display/PSYCH484/5.+Equity+Theory. McNulty, Y., & Brewster, C. (2016). Theorizing the meaning(s) of ‘expatriate’: establishing boundary conditions for business expatriates. The International Journal of Human Resource Management, 27-61. doi: https://doi.org/10.1080/09585192.2016.1243567 Shewan, D. (2020). How to Do a SWOT Analysis for Your Business. World Stream. Retrieved from https://www.wordstream.com/blog/ws/2017/12/20/swot-analysis...