CH-13-15 Employee Rights and Discipline – Managing Human Resources : Chapter Notes

This Document Contains Chapters 13 to 15 Chapter 13: Employee Rights and Discipline If nothing else, my students should learn that… • Both employees and employers enter into a contract with rights, whether the rights are expressed or implied. • Although many students may think about the word “discipline” as equivalent to “punishment,” many organizations are using discipline as a forum for coaching and improved performance. Learning objectives 1. Explain the different regimes that govern the employment relationship. 2. Identify and explain the privacy rights of employees. 3. Establish disciplinary policies and differentiate between the two approaches to disciplinary action. 4. Identify the different types of alternative dispute resolution methods and procedures. Why is this chapter important? Although the rights of employees are those described in the employment contract, this is incomplete for the following reasons: • Many employment contracts are not written down, but are oral contracts. • Many important aspects of the employment relationship appear in the form of customs or practices, rather than as noted in the contract. • Common law judges have long shaped the scope of the employment contract by “implying” contract terms. • Employment contracts may be limited, altered, or voided by a range of employment legislation through which the government intervenes in the employment relationship. Furthermore, managers are discovering that the right to discipline and discharge employees is more difficult to exercise in light of the growing attention to employee rights. Disciplining employees is a difficult and unpleasant task for most managers. Balancing employee rights and employee discipline is a universal requirement and a critical aspect of good management. Because the growth of employee rights issues has led to an increase in the number of lawsuits filed by employees, this chapter includes a discussion of alternative dispute resolution. Because ethics is an important element of organizational justice, the chapter concludes with a discussion of organizational ethics in employee relations. What can I do in this class? This section includes ideas for how to start and finish the class. It also contains information from the textbook that can be used as a basis for a lecture. Moreover, it contains numerous suggestions for student engagement. Depending on your class size, the nature of the students, and your desire for classroom participation, choose from these activities to enliven the classroom. Getting started • Use MCQ from the Question Bank to create a short quiz called “What’s Your Employee Rights and Discipline IQ?” Use clickers if available. • Begin the class with a group activity. Use HRM Experience: Learning about Employee Rights on page 480 to get students thinking about the employee and employer sides to issues relating to wrongful dismissal, employee monitoring, employee conduct outside the workplace, and email and Internet use at work and at home. In order to save on time, assign each group to a different topic. Ask students to record their responses on a flip chart or create a PowerPoint presentation to show the class. • Begin the class by presenting the case, “The Layoff,” published in the Harvard Business Review. See this additional reference in the Recommended Reading section. It is a good case to use at this point in the semester if you have already covered compensation, performance management, and HR strategy. This is because it brings to light dismissal aspects of a layoff, which can be used to show how this class—on rights and discipline—fits into the “bigger picture” of HRM. • Use Discussion Question 1 on page 479 to generate ideas about what rights employees have in Canada: Do you have a right to your job? What rights do you have with respect to employment? Jot the ideas on the board, and in reviewing the law (see below) refer to the ideas that students generated. See sample solutions in the Answers to End-of-Chapter Discussion Questions. The Three Regimes of Employment Law 1. The common law of employment—The common law of employment is the body of case law in which courts interpret employment contracts, and the legal principles taken from those cases that guide the interpretation of employment contracts. Implied contract terms are terms that judges read into employment contracts when the written contract does not expressly deal with the matter. • In-Class Activity: Write seven fictitious mini-vignettes to illustrate seven important terms that courts have implied in employment contracts (Obligation of the employer and the employee to provide reasonable notice that they are terminating the contract; Obligation on the employer to maintain a safe workplace; Obligation on the employer to treat employees with decency, civility, respect, and dignity; Obligation on the employee to serve the employer with loyalty and fidelity; Obligation on the employee to perform competently; Obligation on the employee to advance the employer’s economic interests; Obligation on the employee to avoid insubordination and insolence). For example, a vignette for the first important term might be: “Sally was thrilled to find out that she had been hired by ABC Company. Once ABC Company gave her an official offer of employment, she ran to her current boss at XYZ Company and told him that it was her last day on the job.” Provide each student with either a vignette or one of the important terms. Ask students to walk around the class and try to find someone who matches their vignette/important term. 2. Statutory employment regulation—When the outcomes of common law were not satisfactory, governments intervened by passing a large variety of legislation aimed at influencing the employment relationship. • Making Explicit Real-World Links: See Highlights in HRM 13.1: Take Notice! on page 455 for an example when the employment contract includes a notice of termination clause that provides for less notice than required by employment standards legislation? 3. Collective bargaining legislation and labour arbitration—Provide a preview of Chapter 14 to students by sharing that collective bargaining legislation, such as the Ontario Labour Relations Act, seeks to improve conditions of work by empowering workers to join together and bargain a better contract for themselves than is usually possible when an individual employee bargains with his or her employer. A collective agreement is an employment contract between an employer and a union that sets out the terms of a group of employer’s employees represented by the union. A labour arbitrator is a person assigned to interpret and decide disputes (“grievances”) about the meaning, interpretation, and application of collective agreements governing employees in a unionized workplace. • Call-Out Question: Does common law apply to a collective agreement? The common law of employment does not apply to a collective agreement. The implied term permitting an employer to terminate an employee by giving reasonable notice does not apply when the employees are unionized. Another important difference between a collective agreement and an individual employment contract is the method of enforcement. A nonunion employee must sue the employer in a court for breach of contract. A unionized employee must file a grievance alleging that the collective agreement has been violated. See also Highlights in HRM 13.2: Caution with Contracts on page 457 for some of the legal details that HR managers need to know about changing the terms of an employee’s contract. Understanding the Individual Employment Contract • Explain to students that a valid employment contract requires “mutual consideration,” which means that both parties to the contract must receive some benefit in exchange. • Why should employers provide employees with a contract before they start working? If they don’t, then they have entered into a “verbal contract,” so that if an employer changes the term of the employment contract, it might be interpreted as breach of contract, leading to accusations of constructive dismissal. • Constructive dismissal is when an employer commits a fundamental breach of contract, such as by unilaterally changing a key term of the contract. • Making Explicit Real-World Links: See The Business Case: The Danger of Changing a Contract Term Without the Employee’s Agreement on page 458 and ask students what employers need to do to change the employment contract legitimately. They should mention the importance of obtaining the employee’s agreement to the change, and providing the employee with some new consideration (benefit); or terminating the employment contract in its entirety by giving the required notice of termination, and then offering a new contract on the revised terms. The Rules Governing Dismissal 1. Dismissal of a Nonunion Employee • Under the common law of employment, either the employer or the employee can terminate the employment contract by providing the other side with the amount of notice specified in the contract. Review summary dismissal (When a nonunion employer terminates an employee without notice because the employee has committed a serious breach of the contract) and wrongful dismissal (A lawsuit filed in a court by an employee alleging that he or she was dismissed without proper contractual or reasonable notice). • Statutory Regulation of Dismissal—The common law entitlement of employers to dismiss a nonunion employee for any reason by giving proper notice has been restricted in a number of ways by government intervention. Statutes prohibit employers from dismissing employees for discriminatory reasons according to human rights legislation and labour relations legislation. • Making Explicit Real-World Links: See Figure 13.2—Firing Back on page 461 to read about a nonunion employee’s response to potentially being fired. 2. Dismissal of a Unionized Employee: Just Cause • Most collective agreements confer a right on employers to lay off workers, although they regulate the selection of the employees to be laid off, and the order of recalls. • Unlike a nonunion employer, a unionized employer needs a reason to dismiss an employee given that there is “just cause” to do so. • Labour arbitrators expect employers to apply progressive discipline before dismissing a unionized employee, except when the employee’s misconduct is particularly serious. • Think-Pair-Share: Use Discussion Question 2 on page 479 as a basis for a think-pair-share: In what ways, if any, does a unionized employee have greater protection from dismissal than a nonunion employee in the Canadian model? Do you think that is fair or not? Why? See recommended responses in the Answers to End-of-Chapter Discussion Questions. • Making Explicit Real-World Links: See Figure 13.1: Tips to Consider When Dismissing a Nonunionized Employee with Cause or a Unionized Employee with Just Cause on page 461. • Case Study: Use Case Study 2: Dismissing an Employee for Absenteeism on page 481 to generate student thinking about justice issues in relation to dismissal. See recommended responses in the Notes for End-of-Chapter Case Studies. • Clickers or MCQ on slides: Create multiple-choice style questions using Highlights in HRM 13.3 Overview of Regimes Governing Dismissals on page 462 to test the students’ knowledge. Employee Privacy Rights • Connectivity Discussion: What are the privacy settings on your Facebook page? Do you think your employer, or prospective employer, should be allowed to look at it? • Call-Out Question: Show Figure 13.3: Employee Monitoring Practices on page 464 to determine the types of monitoring going on in the workplace, and ask students the extent to which they believe employees should be entitled to privacy in their relationship with their employer. What are the limits? • Making Explicit Real-World Links: Share with students two recent court cases: (1) an employee with 18 years of service was terminated for using the company Internet for personal purposes, including accessing pornography; (2) an employee with 15 years of service was found to have been using the company Internet to manage his own unrelated travel business, for up to two hours a day on company time, using company computers. These appear to be pretty straightforward cases, but what if the employee in case (1) was not looking at pornography, but merely reading the newspaper instead? What if the employee in case (2) was looking at childcare options? • Making Explicit Real-World Links: Use Case Study 1: Managing Confidential Information on pages 480‒481. Then show students an example of BMW Canada’s privacy policy at http://www.bmw.ca/ca/en/general/privacy_policy/content.html. • The Personal Information Protection and Electronic Documents Act (PIPEDA) regulates an employer’s collection and dissemination of information about employees, as well as the right of employees to access their personnel files. • Making Explicit Real-World Links: See Figure 13.4: Email, Computer, and Voice Mail: Policy Guidelines on page 465. • Call-Out Question: Use Discussion Question 4 on page 479: Under what conditions can an employer monitor employees? Ask a group of working students the following questions: • Are you monitored at work? • What types of monitoring are used? • For what purposes does your employer monitor the workplace? • Do you object to the monitoring? If so, why? If not, why not? See a sample solution in the Answers to End-of-Chapter Discussion Questions. • Case Study: Use Marx and colleagues’ (1990) case study from the Harvard Business Review as a basis for class discussion on employee surveillance. See the full citation in the Recommended Reading section. Employee Conduct Outside the Workplace • Debate: Ask students to debate the pros and cons of employee surveillance. Then ask students to read Ethics in HRM: Supervising or Super-Spying on page 466, and Highlights in HRM 13.4: The Long Arm of the Employer on page 467 to see whether their perceptions or standpoints have changed. • Case Study: Use Case Study 3: Discharged for Off-Duty Behaviour on page 482 to illustrate the complexities involved with discharging employees for off-duty behaviour that is morally questionable. Disciplinary Policies and Procedures • Connectivity Discussion Question: What are the disciplinary policies and procedures at your school/college/university? In what ways do you think they might be similar to those implemented in the workplace? In what ways do you think they might be different? • Making Explicit Real-World Links: Use Figure 13.6: Common Disciplinary Problems on page 469 to outline some of the more common disciplinary problems in the workplace. Failure to take action in any of these areas serves only to aggravate a problem that still must be resolved eventually. Key themes in this section are: The Results of Inaction • Use Figure 13.5: A Disciplinary Model on page 468 as a guide to disciplinary action. Setting Organizational Rules • Small Group Discussion: The setting of organizational rules is the foundation for an effective disciplinary system. But how are rules determined? Ask students to form groups and generate a “Rules for Rules” list. Ask students to choose one or two, and write them on the chalkboard. Ensure that all points from the textbook are included in the debrief of this exercise. (Rules should: (a) be widely disseminated to all employees; (b) not assume that everyone knows them; (c) be reviewed periodically; (d) always be explained; (e) be explained in terms of the rationale for the rule; (f) be written; (g) be reasonable and relate to safety or efficiency; (h) and must be reinforced; (i) be read, and employees should sign a document stating that they have read the rules.) • Call-Out Question: Ask students what the word “discipline” means to them. Discipline is (1) treatment that punishes; (2) orderly behaviour in an organizational setting; or (3) training that moulds, and strengthens—or corrects undesirable conduct—and develops self-control. The third definition is the one to be used in the disciplinary process. Discipline should have as its goal improved employee performance or behaviour. Applying discipline should be a logical extension of the training process. Punishment is that action (written reprimand, suspension, etc.) taken against employees when they fail to improve their performance voluntarily. Punishment, however, is not the intent of disciplinary action. Investigating the Disciplinary Problem • Use Figure 13.7: Considerations in Disciplinary Investigations on page 471 to review the seven considerations in disciplinary investigations. Documenting Misconduct The Investigative Interview • Think-Pair-Share: Use Discussion Question 6 on page 479 as the basis of a think-pair-share: You have discovered that an employee has not been keeping client files updated, as is required by your company policy. Outline the steps that you would use to deal with this performance problem. See a sample solution in the Answers to End-of-Chapter Discussion Questions. • Share Research: Professor Nina Cole at Ryerson University published a paper on consistency in employee discipline in Personnel Review (see the full citation in the Recommended Reading section). Share with students how Cole carried out the study, and the findings. Alternatively, provide students with Cole’s hypotheses, and see whether they can guess which were supported by the data. • Making Explicit Real World Links: For an example of a policy on discipline, see CBC/Radio-Canada’s policy: http://www.cbc.radio-canada.ca/en/reporting-to-canadians/acts-and-policies/management/human-resources/2-2-10/. Approaches to Disciplinary Action 1. Progressive Discipline—Progressive discipline is the application of corrective measures by increasing degrees; it is used most by organizations. • Call-Out Question: Ask students to list the steps of progressive discipline and write them on the board. Review the definition of progressive discipline given in the textbook and discuss its intended purpose. Explain that each step in progressive discipline does not always have to be followed. The sequence and severity of the disciplinary action will depend on the type of offence. For example, employees can be immediately fired for theft without being given an oral warning. • Positive Discipline—Positive discipline is a system of discipline that focuses on early correction of employee misconduct, with the employee taking total responsibility for correcting the problem. Informing the Employee • Role-Play: Pair students and ask them to provide a scenario in which a manager must dismiss an employee for reasons of poor performance. Provide students with the guidelines in advance (e.g., come to the point in the first 2 to 3 minutes; list all the reasons for the termination logically; be straightforward and firm, yet tactful; make the discussion private, businesslike, and brief; do not mix the good with the bad; avoid making accusations against the employee; avoid bringing up any personality differences; provide information concerning severance pay; explain how you will handle employment inquiries in the future). • YouTube Video Clip: This is a good informational video on discipline using a positive approach: https://www.youtube.com/watch?v=49CFNt4g_vE. Ask the students to take notes on the “to-do’s” in discipline from the video, and then compare them with those found in the textbook. Is anything missing? Alternative Dispute Resolution Procedures • Call-Out Question: Ask students if they work for a nonunion organization that has developed an alternative dispute resolution (ADR) procedure. Have them describe the procedure to the class. • YouTube video: Here’s a fun video to show in class which defines ADR: https://www.youtube.com/watch?v=5kKAOIiS5GA. Step-Review Systems Step-Review System—a system for reviewing employee complaints and disputes by successively higher levels of management. • Use Figure 13.8: Conventional Step-Review Appeal Procedure on page 474 to illustrate a typical step-review appeals procedure. • Peer-Review System—a system for reviewing employee complaints that utilizes a group composed of equal numbers of employee representatives and management appointees, which functions as a jury because its members weigh evidence, consider arguments, and, after deliberation, vote independently to render a final decision. • Open-Door Policy—a policy of settling grievances that identifies various levels of management above the immediate supervisor for employee contact. • Ombudsperson System—An ombudsperson is a designated individual from whom employees may seek counsel for resolution of their complaints. • Mediation—the use of a mediator (an impartial neutral) to reach a compromise decision in employment disputes. • Arbitration—Arbitration is discussed in depth in Chapter 14. • Small Group Discussion: In each small group, ask students to determine what failures in dispute resolution have to occur in order to proceed to the next step. Ask them to consider how important it is to resolve issues early to prevent escalation. • Role-Play: Use Cousins’s (1999) article to inspire a role-play in class. See the full citation in the Recommended Reading section. • Think-Pair-Share: Use Discussion Question 8 on page 479 as a basis for this think-pair-share: What do you think would constitute an effective ADR system? What benefits would you expect from such a system? If you were asked to rule on a discharge case, what facts would you analyze in deciding whether to uphold or reverse the employer’s action? See a sample solution in the Answers to End-of-Chapter Discussion Questions. Managerial Ethics in Employee Relations • Small Group Discussion: Ask students for examples of ethical differences in managing of human resources across diverse cultures. For example, in some countries, nepotism (the hiring of relatives) is highly regarded and expected. Discuss how this situation works in Canadian organizations. How should ethical differences across cultures handled by managers? • Think-Pair-Share: Use Discussion Question 9 on page 479 as a basis for a think-pair-share: In groups, discuss whether the following situations are fair or not fair: (a) Zabeen was using the company Internet to locate a nursing home for her increasingly handicapped father. Her supervisor observed this and verified it with the Information Technology unit. Zabeen was given a written reprimand. Meanwhile, Sonia used the company telephone to do her personal banking and bill paying and was not reprimanded. (b) Anthony spent his lunch hour at the gym, consisting of a strenuous workout program with a personal trainer. Meanwhile, Nicholas met his friends for lunch, sharing several beers at the local pub. Both employees felt fatigued in the afternoon, and their diminished productivity was noticed by their supervisor. Nicholas was asked to meet with his supervisor to review performance standards and received a verbal warning. Anthony was not. See sample responses in the Answers to End-of-Chapter Discussion Questions. FINISHING CLASS • Ask students to visit the following website to review the PIPEDA Privacy Principles: https://www.priv.gc.ca/leg_c/p_principle_e.asp. What are five new ideas you learned about privacy? Use this as a basis for online discussion, or as a short homework assignment. • Create a multiple-choice style quiz based on the lecture material to check learning. Use clickers if they are available. • Provide students with a “one-minute” paper and ask them to respond to the following questions: (1) What is the most important thing I learned today? (2) What question do I have that is left unanswered? Collect the one-minute papers and take up any unresolved issues in the following class. • Ask students questions such as these: “What is your personal dispute strategy? Do you acquiesce and let the other person win? Or do you hold your ground and dig in for a good fight? Or something in-between?” Use this as a basis for discussion on the online discussion board for your class. • Thank students for volunteering their ideas and experiences. Reinforce that class discussions advance their thinking about all topics. Remind students that they will not be able to work without making contributions to discussions. Additional Teaching Resources Recommended Reading • Cole, N. (2008). Consistency in employee discipline: An empirical exploration. Personnel Review, 37(1), 109–117. • Cousins, R. (1999). Demonstrating Mediation (OB’s Forgotten Topic) Through the Use of Role Playing. Journal of Management Education, 27(1), 49–59. • Fryer, B., Stybel, L.J., Peabody, M., Dormann, J., & Sutton, R.I. (2009). The Layoff. Harvard Business Review, 87(3), 33–40. • Marx, G.T., Moderow, J., Zuboff, S., Howard, B., & Nussbaum, K. (1990). The Case of the Omniscient Organization. Harvard Business Review, 68(2), 12–30. • Stanton, J.M. (2000). Reactions to employee performance monitoring: Framework, review, and research directions. Human Performance, 13(1), 85–113. Chapter 14: The Dynamics of Labour Relations If nothing else, my students should learn that… • Unions are a central feature in Canadian society, especially in the public sector, and understanding the factors that lead to unionization, and the facilitators of an effective labour–management relationship, are crucial to many managers and HRM professionals today. • Although the most dramatic aspects of labour relations include certification, lockouts, and strikes, HR professionals and managers who work in a unionized environment spend most of their time focusing on the day-to-day operations of managing the collective agreement. Learning objectives 1. Identify and explain the federal and provincial legislation that provides the framework for labour relations. 2. Explain why employees join unions and describe the process by which unions organize employees and gain recognition as their bargaining agent. 3. Discuss the bargaining process and the bargaining goals and strategies of a union and an employer. 4. Differentiate the forms of bargaining power that a union and an employer may utilize to enforce their bargaining demands. 5. Describe a typical union grievance procedure and explain the basis for arbitration awards. Why is this chapter important? About 30 percent of all employees in Canada are unionized, with rates higher in the public sector (71 percent) than the private sector (16 percent). Unions and other labour organizations can affect the ability of managers to direct and control the various functions of HRM. For example, pay rates may be determined through union negotiations, or unions may impose restrictions on management’s employee appraisal methods. Therefore, it is essential that managers in both the union and nonunion environment understand how unions operate and be thoroughly familiar with the important body of law governing labour relations. Remember, ignorance of labour legislation is no defence when managers and supervisors violate labour law. The discussion of labour relations, probably more than any subject in HRM, tends to be heavily influenced by the attitudes and emotions of students. As long as emotionalism does not get out of hand, however, it can serve to generate active class participation by students. Since business students may tend to have a pro-management viewpoint, this phase of the course provides a good opportunity for students to hear the views of labour leaders. While union leaders may be forced to take a defensive position before the class and perhaps will experience some hostility from certain students, most leaders welcome an opportunity to appear as guest speakers and are quite articulate in defending union practices. When major public or private sector labour agreements are under negotiations or when major strikes are occurring, students are provided with some interesting topics for research and discussion. What can I do in this class? This section includes ideas for how to start and finish the class. It also contains information from the textbook that can be used as a basis for a lecture. Moreover, it contains numerous suggestions for student engagement. Depending on your class size, the nature of the students, and your desire for classroom participation, choose from these activities to enliven the classroom. Getting started • As a supplement to the material covered in the textbook and class lectures, it may be profitable to invite a representative from a provincial labour relations board to speak to the class regarding situations in which a labour relations board would be called upon. • YouTube video: Show students this video about the state of unions in Canada and projections about the future: http://www.labour-reporter.com/videodisplay/348-the-future-of-unions-in-canadas-private-sector • In advance of class, or during it, watch the video called “Walmart: The High Cost of Low Price” (https://www.youtube.com/watch?v=RXmnBbUjsPs). It can be watched for free on YouTube. In summary, the video demonstrates Walmart’s anti-union practices, detrimental impacts on small businesses, insufficient environmental protection policies, and poor record on workers’ rights in the United States and internationally. The film ends with interviews of community leaders that have prevented Walmart stores from being built in their communities, and an exhortation for others to do the same. Alternatively, use this video as the basis for a short assignment or reflective paper. • Use Taylor and Provitera’s (2011) article entitled “Teaching Labour Relations with Norma Rae.” Either ask students to watch the video Norma Rae in advance of class, or play it in class. Ask students to write a paper to document the union organizing process, union avoidance strategies, and unfair labour practices that were used by the actors in the film. See the full citation in the Recommended Reading section. Government Regulation of Labour Relations • Clickers: Use clickers to test students’ knowledge of labour relations law by answering the questions in Highlights in HRM 14.1: Test Your Labour Relations Know-How on page 486. Answers are on page 513. • Review the Industrial Relations Disputes and Investigation Act. This Act allowed workers to join unions, and for unions to become certified as bargaining agents, with the requirement that management recognize the certified union as a bargaining unit for member employees. • Case Study: Use Case Study 1: Unionization of Farm Workers on page 511 to show how the Ontario government has thwarted farm workers’ ability to unionize. Alternatively, use this case as a small group project. See the recommended responses in the Notes for End-of-Chapter Case Studies. • Share the history of labour relations with the students. The article entitled “The Cradle of Collective Bargaining: History of Labour” at http://www.humanities.mcmaster.ca/~cradle may be useful. The Labour Relations Process • Use Figure 14.1: The Labour Relations Process on page 487 to illustrate the four components that make up the labour relations process: (1) workers desire collective representation; (2) union begins its organizing campaign, which may lead to certification and recognition; (3) collective negotiations lead to a contract; and (4) the contract is administered. Why Employees Unionize • Class Exercise: Divide the class into teams of four or five, and ask them to develop a list of all the reasons why workers may unionize. Place the list on the board, one suggestion for each group in round-robin fashion, until all ideas are given (e.g., economic needs [this is the most important], out of general dissatisfaction with managerial policies and practices, as a way to seek a voice in setting working conditions, and as a way to fulfill social and status needs). • Making Explicit Real-World Links: Students should take note that it is not easy for all workers to unionize as per Highlights in HRM 14.2: Homeworkers: Canada’s Invisible Labour Force on page 489. • Call-Out Question: Ask students whether it is possible to require people to join a union. Many students may be surprised that in some cases, there is a “closed shop,” which means that the collective agreement requires employees to join the union as a condition of employment. Organizing Campaigns A formal campaign to unionize can be initiated by a union organizer or by employees (most are initiated by employees). Organizing Steps While not all organizing drives are alike, most organizing campaigns follow a set series of steps that, when carried out successfully, can lead to unionization. 1. Employee/union contract 2. Initial organizational meeting 3. Formation of an in-house organizing committee 4. Application to a labour relations board 5. Issuance of a certificate by a labour relations board 6. Election of a bargaining committee and contract negotiations • Case Study: Assign Case Study 2: Walmart Stores in Canada on page 511‒512. See sample solutions in the Notes for End-of-Chapter Case Studies. Employer Tactics Define unfair labour practices (ULPs) as specific employer and union illegal practices that deny employees their rights and benefits under federal and provincial labour law. • Think-Pair-Share: Use Discussion Question 4 on page 510 as a basis for this think-pair-share: What are unfair labour practices? What are the consequences of unfair labour practices? Use examples to explain your answer. See the sample solutions in the Answers to End-of-Chapter Discussion Questions. • Figure 14.2: Employer “Don’ts” during Union Organizing Campaigns on page 491 lists activities managers should avoid during an organizing drive. • Making Explicit Real-World Links: See Reality Check: Walmart Avoiding Unionization at All Costs on page 492. How Employees Become Unionized Explain that the common practice is for unions to present documentation to the appropriate labour board for certification. The union must demonstrate that it has obtained the minimum level of membership support required by the labour relations board. Contract Negotiation Following certification, the employer and union are legally required to bargain in good faith consistent with the terms set forth in the collection agreement. The term of an agreement is usually between one to three years and requires notification of intent to bargain for renewal prior to expiry of the current contract. Decertification If a majority of employees indicate that they wish to be represented by another union or to no longer be represented by the current union, an application for decertification may be made to the labour relations board. Impact of Unionization on Managers • Call-Out Question: Ask students to identify ways the new union will affect the organization, specifically managers and supervisors. List these reasons on the board for discussion purposes. Ensure that responses include: (a) challenges to management decisions, and (b) loss of supervisory authority. • Debate: Ask students to debate whether an organization has an ethical responsibility to come to an agreement with a union. After the debate, provide students with a copy of Ethics in HRM: Caterpillar Closes Electro-Motive Plant on page 493 to further contextualize this issue. Refer also to Highlights in HRM 14.3 Unfair Labour Practices on page 493 outlines a number of practices that employers and unions may not engage in. Structures, Functions, and Leadership of Labour Unions Explain that labour unions are classified basically into three groups: 1. Craft unions represent skilled craft workers. 2. Industrial unions represent all workers—skilled, semiskilled, unskilled—employed along industry lines. 3. Employee associations are labour organizations that represent various groups of professional and white-collar employees in labour–management relations. • Case Study: Use Healey and colleagues (2009) Harvard Business Review case entitled “The Knowledge Workers’ Strike” to show the relevance of unions in a service economy, and to put students in the shoes of an organization whose employees are threatening to strike. See the full citation in the Recommended Reading section. When describing labour organizations, most researchers divide them into three levels: 1. Central labour congresses, e.g., The Canadian Labour Congress 2. International and national unions (often affiliates of American unions with headquarters in the United States) 3. Local unions belonging to a parent national or international union • Call-Out Question—Role of the Union (Shop) Steward: Ask if any students in the class have ever been a union steward or been closely associated with a steward. Ask them to explain their duties as a steward. Answers should include that the steward works closely with supervisors to resolve formal employee grievances of daily concerns regarding the labour agreement. • Role of the Business Agent—The business agent is normally a paid labour official responsible for negotiating and administering the collective agreement and working to resolve union members’ problems Labour Relations in the Public Sector • Think-Pair-Share: Use Discussion Question 7 on page 510 to summarize or check learning on this section of the textbook: What are the main differences between labour relations in the private versus the public sector? How are disputes involving essential service workers in the public sector usually resolved? See the recommended solutions in the Answers to End-of-Chapter Discussion Questions. • The three largest unions in Canada represent public-sector employees, and 70 percent are now unionized. While public-sector labour relations has some characteristics similar to private-sector collective bargaining, it also has distinct differences, including: • Political Nature of the Labour–Management Relationship • Strikes in the Public Sector • Various procedures may be used to avoid strike action or to quickly resolve critical situations. Two of the more common are: • Compulsory binding arbitration • Final-offer arbitration The Bargaining Process • Emphasize to students that the techniques of negotiating discussed in this chapter are appropriate in a wide variety of situations. • Use Figure 14.3: The Collective Bargaining Process on page 499 to illustrate that the bargaining process consists of four separate, but interrelated, processes: 1. Prepare for negotiations • Gathering bargaining data • Bargaining Teams • Call-Out Question: Ask students what sources they would consult or what data they would like to have if they were negotiators in a labour–management dispute. • Connectivity Exercise: Divide the class into labour and management five- or six-person teams. Have each team develop a list of items they would like to bargain over. Ask students where they would obtain data to support their demands. Have the teams write their demands on a flip chart and report their findings to the class. 2. Develop strategies and tactics • Review the bargaining zone model of Stagner and Rosen found in Figure 14.4: The Bargaining Zone and Negotiation Influences on page 501. This figure also points out the various influences affecting bargaining outcomes. 3. Conduct negotiations • Describe what it means to “bargain in good-faith”: meet at reasonable times and places; submit realistic proposals; offer reasonable counterproposals; both parties must sign the written document. 4. Formalize the agreement • Role-Play: Ask students to take on the role of either buyer or seller for a used car. The car is priced in a newspaper advertisement for $1000. Provide “secret” information to the buyer that he or she would like to purchase the car for $900 or less, but is willing to pay up to $1100. Provide “secret” information to the seller that they would like to get $1000 for the car, and should try to attain this amount or more, but they would be willing to take $850 for it. Ask students to try to get the best deal they can in 5 minutes. Stress to students that when bargaining, they need to provide room for concession making. Then, ask students what other strategies they used to get the price up or down. Define a bargaining zone as the area within which the union and the employer are willing to concede when bargaining. In the case of this role-play, the bargaining zone is from $850 to $1100—both parties would be satisfied if the agreed amount is between these amounts. Ask students if each is bargaining in good faith, using the characteristics of “good faith” bargaining above. • Role-Play: Use Discussion Question 5 on page 510: A group of students wants a Burger King fast-food franchise on their university campus. University administrators want a health-food restaurant. Resources allow for only one food outlet. Divide the class into bargaining teams, with one team representing the students, and the other team representing the university administrators. (If there is another issue on your campus, use the real and current issue instead.) After the groups have started bargaining, consult the Career Counsel website to assess the negotiating styles employed by each team. See the recommended solutions in the Answers to End-of-Chapter Discussion Questions. Interest-Based Bargaining Interest-based bargaining (IBB) is problem-solving bargaining based on a win-win philosophy and the development of a positive long-term relationship. • Making Explicit Real-World Links: Use The Business Case: Building Trust and Saving Money at the Same Time: Canada Safeway and United Food and Commercial Workers Local 1518 on page 502. Management and Union Power in Collective Bargaining • Think-Pair-Share: Use Discussion Question 6 on page 510: The union representing garbage collectors and other outside workers and the municipality are in the middle of tense negotiations. The collective bargaining agreement has expired. What form of bargaining power does each side possess to enhance its bargaining demands? What are the advantages and disadvantages of each form of bargaining power for both the employer and the union? See the sample solutions in the Answers to End-of-Chapter Discussion Questions. Union Bargaining Power: The bargaining power of the union may be exercised by striking, picketing, or boycotting the employer’s products and services. The ultimate weapon for the union is its power to strike the employer. Canada has the second highest rates of days lost to strikes in the world. • Debate: Hold a class discussion of strikes currently taking place in your local area, or use the recent 2012 NHL lockout as an example. See this site for an overview of what happened: http://www.theguardian.com/sport/blog/2012/sep/17/nhl-lockout-2012-season-delayed) and/or this YouTube video: https://www.youtube.com/watch?v=p2OO8VSbKhg. Try to identify the deadlocked issues and discuss the outcomes of these disputes. • Call-Out Question: Ask students to identify the factors they believe contribute to management’s ability to “take a strike.” Possible choices are high unemployment levels, substitution of technology for labour, ability to run the organization with managers and supervisors, available competitors of the organization’s product or service, perishability of the product (e.g., oranges, lettuce), and profit level of the organization. That is, some companies are simply in a better financial position to “take a strike.” Management Bargaining Power: If employees strike, their employer has the option of locking out the employees, closing the organization, hiring replacements, continuing operations with management personnel, or transferring work to another facility. When deciding whether to operate during a strike, employers must balance the costs of lost production and sales against the cost of agreeing to union demands. • A focus on replacement workers: Of critical importance to the union is the extent, if any, to which the employer will be able to continue operating through the use of supervisory and nonstriking personnel and employees hired to replace the strikers. In some jurisdictions, employers face restrictions to their right to hire replacement workers. • In the 1990s, the use of “scabs” at the Royal Oak Mines in Yellowknife so infuriated a striking miner that he blew up the mine, killing nine workers. Share with students the story in Highlights in HRM 14.4: A Tragic Labour Dispute page 503. The violence and strife associated with the use of replacement workers has caused Quebec and British Columbia to forbid their use. • Video clip: Show this video clip from the 2000 Billy Elliot movie to illustrate the emotions that can arise with this issue (“scabs” versus “strikers”): http://www.dailymotion.com/video/xned84_strikers-vs-scabs-from-billy-elliot-2000_shortfilms Resolving Bargaining Deadlocks • Mediation—This is a voluntary activity that both parties must agree to, in which a third party is actively involved in making suggestions to, or in facilitating communication between, the parties, in order to have them reach an agreement. Mediators have no authority to force agreement and resolve any bargaining deadlocks. • Conciliation—In conciliation, the Minister of Labour will appoint the conciliator to help the parties reach an agreement. Again, the conciliator has no authority to force an agreement, but does have a responsibility to report to the Minister the results of the conciliation (success or failure). There is usually a waiting or “cooling off” period after the conciliator’s report before a strike or lockout will proceed. It is hoped that during this period, the parties will go back to the bargaining table and resolve their disagreements. • Arbitrators are used to resolve collective bargaining disputes when the parties want someone to finalize the agreement for them. That is, arbitrators have the power to determine what the settlement will be. Arbitration is not often used to settle bargaining disputes in the private sector, but may be used in the public sector, where employees are prohibited from striking. The Collective Agreement • Connectivity Activity: Many students have never seen a collective agreement. Collect several agreements and bring them to class. Pass them around and have a discussion on the major provisions included in each. Compare the articles in these contracts to those shown in Highlights in HRM 14.5: Items in a Collective Agreement on page 506. The Issue of Management Rights • Connectivity Activity: Ask students to read the management rights clause from different contracts. Have the class determine exactly what ultimate rights management has under the agreement and what rights it must share with the union. Union Security Agreements • Once a union is certified by a labour relations board as the bargaining representative of employees, the union must then represent everyone in the bargaining unit equally, regardless of whether those individuals join the union or not. • A union shop is an agreement that may provide that any employee who is not a union member upon employment must join the union within 30 days or be terminated. • An agency shop is an agreement that provides for voluntary membership. Administration of the Collective Agreement Negotiated Grievance Procedures • Connectivity Call Out Question: How would you resolve a complaint about the behaviour of a university professor? See whether the students are aware of how to grieve at your university. • Connectivity Activity: Source a number of grievance procedures in different organizations, both unionized and nonunionized. Have students compare the grievance procedures of different contracts. • Call-Out Question: What are some of the barriers to resolving a grievance when it is filed immediately? Explain that because grievances are often the result of an oversight or a misunderstanding, they can be resolved early on. But personality conflicts, prejudices, emotionalism, stubbornness, or other factors may be barriers to a satisfactory solution at this step. Rights Arbitration The decision to arbitrate can revolve around the following points: • Importance of the case • Costs involved • Prospects of gaining a favourable award • Political pressures to press a particular grievance to arbitration The Arbitration Process • Witnesses are sworn in, evidence is ruled on as to its admissibility, and opening and closing statements are made by both sides. • Arbitrators have wide latitude on how they conduct the hearing. • The arbitrators must see to it that both sides receive a fair hearing. • In the majority of cases, the costs of arbitration are shared. The Arbitration Award The arbitration award normally consists of five sections: 1. the submission to arbitrate 2. the facts of the case 3. the positions of the parties 4. the opinion of the arbitrator 5. the decision rendered While arbitrators have freedom to decide the case, their final decision must be based on four factors: 1. the wording of the collective agreement 2. the submission agreement as presented to the arbitrator 3. testimony and evidence offered during the hearing 4. arbitration criteria or standards against which cases are judged FINISHING CLASS • Finish the class with a fun negotiations role-play developed by Miesing and Pavur (2008). See the full citation in the Recommended Reading section. • Ask students to read this article in The Globe and Mail about youth getting involved in labour in Canada. Start a discussion regarding whether young people should get involved: http://www.theglobeandmail.com/report-on-business/rob-magazine/do-unions-have-a-future/article10310754/?page=all • Create a multiple-choice style quiz based on the lecture material to check learning. Use clickers if they are available. • Provide students with a “one-minute” paper and ask them to respond to the following questions: (1) What is the most important thing I learned today? (2) What question do I have that is left unanswered? Collect the one-minute papers and take up any unresolved issues in the following class. • Ask the students to read the Small Business Application on pages 508-509 and discuss which elements of the lecture is relevant to small businesses, and which may be less relevant. • Ask students to watch one of the videos mentioned in the Getting Started section. Use the video as a basis for an online discussion group. Additional Teaching Resources Recommended Reading • Healey, J., Trumka, R.L., Freeman, R.B., & Anderson, J. (2009). The Knowledge Workers’ Strike. Harvard Business Review, 87(7–8), 27–34. • Heery, E., Williams, S., & Abbott, B. (2012). Civil society organizations and trade unions: Cooperation, conflict, indifference. Work, Employment and Society, 26(1), 145–160. • Marion, C. (1994). Gender and union organizing. Industrial and Labor Relations Review, 47(2), 227–240. • Miesing, P., & Pavur Jr., E.J. (2009). Exercise: Stakeholder Negotiations. Journal of Strategic Management Education, 4, 187–210. • Taylor, V., & Provitera, M. (2011). Teaching Labor Relations with Norma Rae. Journal of Management Education, 35(5), 749–766. Chapter 15: International Human Resources Management If nothing else, my students should learn that… • Nearly every HRM function that has been reviewed in class thus far (e.g., selection, training, performance management, compensation) needs to be altered to take into account internationalization. • We are fortunate to live in a country such as Canada—this chapter reviews information about poor working conditions in other countries, the security concerns that are involved in taking a job in some overseas countries, and the prevalence in some countries of business practices that are unethical (e.g., bribery). Learning objectives 1. Explain the political, economic, sociocultural, and technological factors in different countries that HR managers need to consider. 2. Identify the types of organizational forms used for competing internationally. 3. Explain how domestic and international HRM differ. Discuss the recruitment, selection, training, compensation, and performance appraisal needs for different types of employees working across borders. 4. Explain how labour relations differ around the world. Why is this chapter important? The rapid movement toward a global economy makes this chapter vital for all students interested in management today. The chapter begins with a brief overview of the different organizational forms companies adopt (international, multinational, global, and transnational). Next, it emphasizes the importance of understanding cultural and environmental issues in international business. The remainder of the chapter covers issues related to staffing, training, appraisal, compensation, and labour relations in an international environment. What can I do in this class? This section includes ideas for how to start and finish the class. It also contains information from the textbook that can be used as a basis for a lecture. Moreover, it contains numerous suggestions for student engagement. Depending on your class size, the nature of the students, and your desire for classroom participation, choose from these activities to enliven the classroom. Getting started • Ask the students, if they are comfortable, to get into pairs and look at the tags on the backs of their coats or shirts. Where is their clothing made? Explain to the students that much of what we buy is not made in the Canada. The shirts that students wear are probably made in Bangladesh, Vietnam, Indonesia, or China. The brand, of course, could be American (e.g., Abercrombie and Fitch, Hollister, American Eagle) or Canadian (Joe Fresh, Roots), but that just means that the company is headquartered in North America. In fact, most companies today are involved in international business in one way or another. Managing HR across these international settings may help to leverage specialized skills, provide cheaper labour, or even bring new ideas into the company. However, managing HR internationally makes everything all the more complicated. • In advance of class, ask students to watch “Black Money,” a documentary hosted by Lowell Bergman into the shadowy side of international business, shedding light on multinational companies that have routinely made secret payments—often referred to as “black money”—to win billions of dollars in business. They can watch it in six 10-minute segments for free on YouTube. Use it as a basis for class discussion to open the class. • Start this class using a Harvard Business Review case written by Groysberg and colleagues (2011). It focuses on how the discontent of an employee’s spouse over repeating medical school affected the company’s international mobility program. The author raises questions on the logical aspects of company expatriate policies. See the full citation in the Recommended Reading section. • A really fun exercise to demonstrate problems that can arise due to cross-cultural differences was published by Jameson (1993). However, there needs to be at least one facilitator for every 30 students, and requires substantial preparation. See the full citation in the Recommended Reading section. Analyzing Your International Environment • PEST Analysis: Involves an analysis of the political, economic, sociocultural, and technological aspects of a company’s environment to help it determine its strategy and HR response. • See Figure 15.1: PEST Analysis on page 519 for a list of environmental factors that organizations may wish to consider and assess o Political factors: Provide the example from the textbook: when the Ohio-based welding company Lincoln Electric started operations in Brazil, they were not able offer their yearly bonus program based on performance because any bonuses paid for two consecutive years become a legal entitlement. o Economic factors: Provide the example of China. China’s 1.3 billion people represent a massive, largely untapped consumer market for global companies. Today more cars are sold in China than in Europe, for example. o Sociocultural factors: By recognizing and accommodating different ideologies, religious beliefs, communication styles, education systems, and social structures, managers stand a better chance of understanding the culture of a host country—a country in which an international business operates. o Technological factors: Share with the students the example of a textile factory in Vietnam. It is more cost effective for the factory to purchase high-tech threading equipment to spin the cotton into thread than to hire hundreds of people to thread the cotton by hand, even when the average wage for such employees is less than $100 a month. • Small Group Discussion: Ask the students to read Ethics in HRM: Bribery Abroad on page 520 and ask the students how the Corruption of Foreign Public Officials Act may make it easier for Canadians to bribe others or take a bribe. • Debate: Inform students that Ikea has refused to open stores in Russia because of concerns about bribery and corruption. Ask students to debate the pros and cons of operating in a nation like Russia, where these concerns are warranted. After the debate, share with them Ethics in HRM: Bribery Abroad on page 520 to provide more information on this topic. • Think-Pair-Share: Ask students to pair up and think of at least three benefits that a PEST analysis may bring to and HR professional: Answers may include: As an HR manager, PEST analyses can help you to (1) spot business or personnel opportunities, and it gives you advanced warning of threats, (2) spot trends in the business environment so you can proactively adapt to these changes, (3) avoid implementing HR practices in a particular country where they may fail, and (4) break free of old habits and assumptions about how people should be managed to help bring about innovative ideas for the entire company. • Making Explicit Real-World Links: Instruct the students to read Reality Check: Global Versus Local HRM Practices on page 521. Ask the students whether they would like to have Gene Lai’s job, and what sorts of skills or competencies are necessary to be successful like Gene? • Small Group Assignment: Use Discussion Question 1 on page 551: In recent years, we have observed an increase in foreign production throughout the world. What PEST factors would you consider to be most relevant to H&M’s HR managers when trying to figure out if they should open up a plant in Vietnam to make clothes? See a sample solution in the Answers to End-of-Chapter Discussion Questions. Analyzing Your International Operations • Call-Out Question: As you move through the lecture on the different types of organizational structures, ask the students to think about their answer to this question, and then take it up at the end of this portion of the lecture: If you decided to open a unit of your business in another country, what organizational structure would you use to manage it? • Use Figure 15.2: Types of Organizations on page 523 to show the four basic types of organizations and how they differ in the degree to which international activities are separated to respond to the local conditions and integrated to achieve global efficiencies. o An international corporation is a domestic firm that uses its existing capabilities to penetrate overseas markets. o A multidomestic corporation (MDC) is a firm with independent business units operating in multiple countries. o A global corporation is a firm that has integrated worldwide operations through a centralized home office. o A transnational corporation is a firm that attempts to balance local responsiveness and global scale via a network of specialized operating units. • Making Explicit Real-World Links: Bring this section to life by asking students to generate examples of each type of corporation (international = Honda, GE, Procter & Gamble; multidomestic = Shell, Phillips; global companies = Japanese companies such as Matsushita and NEC; transnational = Ford, Unilever, Shell). • Think-Pair-Share: Use Discussion Question 2 on page 551 for the basis of this think-pair-share: What major HR issues must be addressed as an organization moves from an international form to a multinational, global, and transnational form? See a sample solution in the Answers to End-of-Chapter Discussion Questions. Managing Your International Operations • Connectivity Call-Out Question: More students than ever are interested in international careers. What are the reasons that you would choose to work in another country? • Think-Pair-Share: Ask students to write a list of all of the topics covered in class thus far (e.g., selection, recruitment, compensation, etc.), and ask them to generate ideas for how it would be different to manage each function in a domestic versus an international arena. Ask students to present their ideas to one another. Recruitment and Selection Staffing Internationally—Share with students the different types of employees who work for international organizations: • Expatriates, or home-country nationals, are employees from the home country who are on international assignment. • Host-country nationals are employees who are natives of the host country. • Third-country nationals are employees who are natives of a country other than the home country or the host country. • Guest workers are foreign workers invited to perform needed labor • Think-Pair-Share: Provide students with a copy of Figure 15.3: Changes in International Staffing over Time on page 524. Ask them to generate reasons for this trend. Answers might include the following: hiring local citizens is less costly than relocating expatriates; foreign employers may be required to hire locally; most customers want to do business with companies and people they perceive to be local versus foreign. This is an excellent exercise for students as it encourages them to make sense of data. • Making Explicit Real-World Links: Share with students the examples provided in Highlights in HRM 15.1: Reference Checking on page 525 to illustrate that this selection practice differs in different national contexts. • Call-Out Question: Ask students if they have ever been an expatriate, a host-country national working for a multinational organization, or a third-country national (or a child or spouse of one). Ask students to share their experiences with others. • Call-Out Question: First share with students that nearly 70,000 Canadians are working abroad, mainly in the United States, Europe, Asia/Pacific, and South America. Most employees now consider foreign credentials essential. Then, ask students whether they would want to be sent on a global assignment one day, and why they would like to do so. Recruiting Employees Internationally • Call-Out Question: The textbook emphasizes the importance of ethical codes of conduct on page 526 as a way to attract talent. Companies such as Starbucks, Lockheed Martin, and Honeywell have made a special effort to create codes of conduct for employees throughout the world to ensure that standards of ethical and legal behaviour are known and understood. Ask students whether an ethical code of conduct would attract them to apply for a job at a particular organization. • Apprenticeships—A major source of trained labour in Europe is through apprenticeship programs (see Chapter 7) that are tied into a dual-track system of education, which streams students into vocational training early on in their education. Canada does not do very well with this type of training. o Staffing Transnational Teams—Transnational teams are composed of members of multiple nationalities working on projects that span multiple countries. These teams can perform tasks for a firm given that the firm is not yet structured to accomplish this work. Examples include cardiologists around the world, and GE and Fuji engineers. o Case Study: Use Case Study 2: Recruiting and Retaining International Employees on page 553 as the basis for an in-class discussion. See sample solutions to the discussion questions in the Notes for End-of-Chapter Case Studies. Selecting Employees Internationally Share with students that a major difference in selection is that, in Canada, employers focus their hiring on the basis of talent and merit, whereas in many countries firms hire on the basis of family ties, social status, language, and common origin. However, much of this is changing since there is greater attention to hiring those most qualified. o Call-Out Question: Ask students to imagine that they owned their own business, and they needed to hire someone from Canada to open a new product line in Mexico. What would they be looking for in a good applicant? Ensure that students generate all of the criteria shown in Figure 15.4: Expatriate Selection Criteria on page 532. o A global manager is a manager equipped to run an international business. o Core skills are skills considered critical to an employee’s success abroad. o Augmented skills are skills helpful in facilitating the efforts of expatriates. See Highlights in HRM 15.2: Skills of Expatriate Managers on page 531 to compare core skills with augmented skills. o Think-Pair-Share: Share with students that even when companies have selected the best candidates, they will experience high expatriate failure rates. Define a failure rate as the percentage of expatriates who do not perform satisfactorily. Ask students to pair up to generate reasons for failure. Then show them Figure 15.5: Causes of Expatriate Assignment Failure on page 532 to discuss the most prevalent reasons for failure among expatriates, and Figure 15.6: Expatriate Adjustment Factors on page 533 to examine how three factors—family adjustment, country alignment, and company alignment—need to be present to ensure expatriate adjustment. o Small Group Discussion: Use Discussion Question 3 on page 551 as the basis of this small group discussion: Starbucks is opening new stores abroad every day, it seems. If you were in charge, would you use expatriate managers or host-country nationals to staff the new facilities? Explain your thinking. See a sample solution in the Answers to End-of-Chapter Discussion Questions. Training and Development Content of Training Programs Use Figure 15.7: Preparing for an International Assignment on page 534 to read how individuals can be more prepared for their international assignments. Language Training Emphasize to students who plan careers in international business that they should learn one or more foreign languages. Cultural Training Use Figure 15.8: A Synthesis of Country Clusters on page 536 to show the results of Ronen and Shenkar’s research that groups together countries with similar cultures. Ronen and Shenkar point out that whereas evidence for the grouping of countries into Anglo, Germanic, Nordic, Latin European, and Latin American clusters appears to be quite strong, clusters encompassing the Far Eastern and Arab countries are ill-defined and require further research, as do clusters of countries classified as independent. Many areas, such as Africa, have not been studied much at all. It should also be noted that the clusters presented in Figure 15.8 do not include Russia and the former satellites of the Soviet Union. Those countries, if added to the figure, would likely fall between the Near Eastern and Nordic categories. • Simulation: Use Oddou’s (2005) simulation to meet two objectives. First, it provides a platform to discuss cultural differences. Second, it can be used as an illustration of how simulations are used by companies to train managers in cross-cultural communication. Refer to the classes on Training and Development and remind students about how simulations are effective in teaching “soft” skills. See the full citation for the Oddou article in the Recommended Reading section. • Take home Assignment: Ask the students to respond to the following question: If you were going to send a new manager to Beijing, what specific types of training would you provide to her before she left? Find information on the Internet on Chinese etiquette and business practices to inform your answer. Language and cultural training would be necessary. Training may also be necessary for family members of the expatriate, and it would be important to keep their career development on track. When the manager returns home to Canada, repatriation programs, along with training, are necessary too. Other cultural nuances may be brought up, such as the importance of “face,” which roughly translates as “honour” or “respect,” as well as Confucianism, which is a system of behaviours and ethics that stress the obligations of people toward one another based on their relationship. It stresses duty, sincerity, loyalty, respect for age, and seniority. More information on topics such as Chinese etiquette and customs can be found at http://www.kwintessential.co.uk/resources/global-etiquette/china-country-profile.html Assessing and Tracking Career Development • Call-Out Question: Ask students: Are corporate career development activities less available to female than to male expatriates? Then, share with them the results of a study by Selmer and Leung (2003). In short, they found that women expatriates had less access to fast-track programs, individual career counselling, and career planning workshops. See the full citation in the Recommended Reading section. Managing Personal and Family Life Culture shock is the perpetual stress experienced by people who settle overseas. • Case Study: Use Case Study 1: Cultural Conundrum on page 552 as an in-class exercise. See the sample solutions in the Notes for End-of-Chapter Case Studies. Repatriation Repatriation is the process of helping an employee transition back home from an international assignment. • Think-Pair-Share: Inform students that about 50 percent of expatriates will leave their company within one to two years of returning home. Ask students to think about why this is so. Then, show students Highlights in HRM 15.3: Repatriation Checklist on pages 538‒539. Compensation Guiding Philosophy • When designing pay systems, a guiding philosophy is often “think globally and act locally.” • Create a pay plan that supports the overall strategic intent of the organization but provides enough flexibility to customize particular policies and programs to meet the needs of employees in specific locations. Compensation of Host-Country Employees • Use Figure 15.9: Hourly Wages in Different Countries on page 540 to discuss how hourly wages vary dramatically from country to country. • Connectivity Example: Show the students this funny website—or copy the pictures from it onto your slide deck. It shows how many hours of minimum wage work a person must work in order to purchase a pint of beer: http://qz.com/174700/how-many-hours-of-minimum-wage-work-it-takes-to-earn-a-beer/ • Employee benefits can vary dramatically from country to country, from 70 percent in France to 30 percent in Canada (for full-time rather than contingent employees). • Global compensation system: A centralized pay system whereby host-country employees are offered a full range of training programs, benefits, and pay comparable with a firm’s domestic employees but adjusted for local differences. Compensation of Host-Country Managers • In the past, remuneration of host-country managers has been ruled by local salary levels. Now, international firms are moving toward a narrowing of the salary gap between the host-country manager and the expatriate. Compensation of Expatriate Managers • Think-Pair-Share: Ask students to get into pairs and discuss the compensation incentives that they would need to become an expatriate. Take it up and include the following points: (1) Provide an incentive to leave Canada; (2) Allow for maintaining a North American standard of living; (3) Provide for security in countries that are politically unstable or present personal dangers; (4) Include provisions for good health care; (5) Take into account the foreign taxes the employee is likely to have to pay (in addition to domestic taxes) and help him or her with tax forms and filing; (6) Provide for the education of the employee’s children abroad, if necessary; (7) Allow for maintaining relationships with family, friends, and business associates via trips home and other communication technologies; (8) Facilitate re-entry home; (9) Be in writing. • Expatriate compensation plans used by North American companies are composed of four elements that constitute the balance-sheet approach: (1) base pay, (2) differentials, (3) incentives, and (4) assistance programs. Key Terms: • Home-based pay is pay based on an expatriate’s home country’s compensation practices. • The balance-sheet approach is a compensation system designed to match the purchasing power in a person’s home country. • Host-based pay is expatriate pay comparable to that earned by employees in a host country. • Localization is adapting pay and other compensation benefits to match that of a particular country. • Split pay—Expatriates are given a portion of their pay in the local currency to cover their day-to-day expenses, and a portion of their pay in their home currency to safeguard their home currency from changes in inflation or foreign exchange rates. • Debate: Ask the students to get into pairs and debate whether compensation packages be equal across the world or should they be adapted to the local cultures and economies. Should compensation packages be equal across the world or should they be adapted to the local cultures and economies? In teams, debate each position. If the cost of living is lower in a foreign assignment, organizations must make accommodations for these differences. It could potentially be damaging if expatriates went on an international assignment and “lived like kings.” In many cases, organizations equalize an expatriate’s pay to make the purchasing power roughly equal to local managers of the same standing. The surplus amounts of pay (as well as contributions to pensions, and so on) are often put in an account until the expatriate returns home. • Team Take-Home Assignment: Use HRM Experience: A Canadian (Expatriate) in Paris on page 551 as an out-of-class team assignment. Performance Appraisal One of the biggest problems with managing employees abroad is that it is difficult to evaluate their performance. Problems in this area can lead to higher failure rates and even derail a person’s career rather than enhance it. The following are key issues that must be addressed: Who Should Appraise Performance? People working abroad have at least two allegiances: to the home country, and to the host country. Superiors in each location may have very different views and expectations for performance. Home-Country versus Host-Country Evaluations Domestic managers may be unable to understand the expatriate’s experiences, and geographic distance poses communication problems, although email, instant messaging, and HR information systems have helped close the gap. Local managers are likely to be in the best position to observe performance. However, cultural biases may affect their performance evaluations, and they may not have a broad perspective of how the individual is contributing to the organization as a whole. As discussed in Chapter 8, multiple sources of appraisal information can be extremely valuable. Performance Criteria Because expatriate assignments are extremely costly, many HR managers are increasingly under pressure to calculate the return-on-investment (ROI) of these assignments. What did the firm get for the millions of dollars it spent to send an expatriate abroad? • Making Explicit Real-World Links: See The Business Case: The Costs of Employing Expatriates on page 545. • Call-Out Question: Assume that you are working for GE in Afghanistan. The power often goes out in your building, business deals take longer than in Canada, and you experience a great deal of stress due to the unstable political environment. Would you want your performance to be assessed in relation to the difficulty of doing business in Afghanistan? Most students will respond—of course yes! Relate this back to your lecture on performance management and the concept called “criterion contamination.” Providing Feedback • In addition to receiving feedback from home-country and host-country managers, the expatriate should also provide feedback about the support she or he is receiving. • The expatriate should receive immediate debriefing upon her or his return home. Repatriation interviews serve many goals, from establishing old ties, to addressing technical issues about the job, to providing documentation and insights from the expatriate. Analyzing the International Labour Environment • Making Explicit Real-World Links: Share with students Highlights in HRM 15.4: Dirty List on page 547 to provide examples of how in some countries, working conditions resemble slave labour camps. Collective Bargaining in Other Countries: In Chapter 14, collective bargaining was noted as a process that can vary widely in many countries. In some countries, the government plays a major role in collective bargaining. In Australia and New Zealand, for example, for most of the twentieth century, labour courts had the authority to impose wages and other employment conditions on a broad range of firms. By contrast, in developing countries, labour unions may do little more than attempt to increase wages, and there is very little government involvement with regard to wages, or to working conditions. In more developed countries, goals related to other aspects of the employment relationship, like the length of workweek, safety, and grievances, are pursued. • International Labour Organizations: The most active international union has been the International Confederation of Free Trade Unions (ICFTU), which represents 175 million trade unionists in 155 countries and territories. The European Trade Union Confederation (ETUC) represents trade workers in 83 trade unions in 36 western, central and eastern European countries. The International Labour Organization (ILO) of the United Nations is also active and influential. The ILO involves employers, employees, and nation-states in the labour process. In recent years, the ILO has redefined its mission based on the “Decent Work Agenda,” which promotes the idea that there is an ethical dimension of work. This notion means that all people, including sole-proprietors such as farmers, deserve decent homes, food, education, and social programs to protect people when they are elderly, disabled, or unemployed. • Labour Participation in Management: In many European countries, provisions for employee representation are established by law. Employee representation is present in worker councils, safety and hygiene committees, and boards of directors. Worker councils basically provide a communication channel between employers and workers. • Codetermination is the representation of labour on the board of directors of a company. This means that company shareholders and employees are required to be represented in equal numbers on the supervisory boards of large corporations. FINISHING CLASS • Use Discussion Question 7 on page 551: Do you believe that codetermination will ever become popular in Canada? as the basis for a class discussion. There are no “right” or “wrong” answers, opening up the possibility for students to learn from one another, and to be empathetic toward different viewpoints. • Review the learning objectives. • Create a multiple-choice style quiz based on the lecture material to check learning. Use clickers if they are available. • Provide students with a “one-minute” paper and ask them to respond to the following questions: (1) What is the most important thing I learned today? (2) What question do I have that is left unanswered? Collect the one-minute papers and take up any unresolved issues in the following class. • Ask students a provocative question, such Do you think that there should be some international standard for labour rights? If so, what should that standard be, and how should it be enforced? Use this as a basis for discussion on the online discussion board for your class. • Thank students for volunteering their ideas and experiences. Reinforce that class discussions advance their thinking about all topics. Remind students that they will not be able to work without making contributions to discussions. Additional Teaching Resources Recommended Reading • Groysberg, B., Nohria, N., & Herman, K. (2011). The Expat Dilemma. Harvard Business Review, 89(11), 150–153. • Jameson, D.A. (1993). Using a simulation to teach intercultural communication to business communication courses. The Bulletin, March, 3–11. • Hinds, P., Liu, L., & Lyon, J. (2011). Putting the global in global work: An intercultural lens on the practice of cross-national collaboration. The Academy of Management Annals, 5(1), 135–188. • Nohria, N., & Ghoshal, S. (1994). Differentiated fit and shared values: Alternatives for managing headquarters–subsidiary relations. Strategic Management Journal, 15, 491–502. • Oddou, G. (2005). A cross-cultural exercise: Expat in the marketplace. Journal of Management Education, 29(5), 758–768. • Selmer, J., & Leung, A.S.M. (2003). Are corporate career development activities less available to female than to male expatriates? Journal of Business Ethics, 43(1–2), 125–136. Instructor Manual for Managing Human Resources Shad Morris, Monica Belcourt, George W. Bohlander, Scott A. Snell, Parbudyal Singh 9780176570262, 9781337387231, 9781285866390, 9780357033814, 9781337387231, 9781111532826, 9780176798055, 9780176407292, 9781285866390, 9781111532826