In the case study, the Chicago and Foods and Beverage Company has applied the long term staffing framework. This is a staffing framework that covers over a year and it is implemented to address the long term needs of an organization (Heneman & Judge, 2015). According to Bodolica and Waxi (2007), the company employed Paul under a three-year contract to replace the previous CFB Managing Director in Vietnam who was facing health challenges. A major advantage of this strategy is that it enables organizations to hire workers who will work for long periods with the same employer, thereby reducing staff turnover and enabling the company to attain its long term goals. For instance, the Chicago and Foods and Beverage Company implemented the long term staffing strategy to enable Paul to address the challenge of poor financial performance facing its Vietnamese operations to ensure that the company is back to profitability (Bodolica & Waxi, 2007).
The long term staffing framework would affect Paul’s ability to perform his job. The main reason is that Paul does not have international experience in managing the Chicago and Foods and Beverage Company (Bodolica & Waxi, 2007). Due to his inexperience, it is not prudent to assign him a long term contract since the management needs to evaluate him over time to assess whether he is the best fit for the Vietnam Managing Director’s position. Moreover, Paul has a young family and it is imprudent to assign him a long term contract without assessing his family’s fit into the new Vietnamese culture. These are the main challenges that Paul faces in his new position and it is unlikely that he will perform effectively in the long term.
The short term staffing framework would have worked better for Paul in his new position in Vietnam. The first reason is that short term staffing would have enabled headquarters to analyze whether Paul is an effective replacement to the former MD who left the position. This is an important consideration since he does not have experience in international management (Bodolica & Waxi, 2007). The second reason is that short staffing would also have enabled Paul to assess whether his family is comfortable in Vietnam, and if he would want to work in the new environment for a long time. The company headquarters should recall Paul from Vietnam and offer him a short term contract so that the management can evaluate whether he will be productive and will attain the performance goals.
Paul wants this job since it will help him achieve his career goal of working in management positions within the Chicago and Foods and Beverage Company (Bodolica & Waxi, 2007). He specifically completed his MBA so that he could work in a management position and the opportunity in Vietnam will help him accomplish his dream. However, Paul is not a good candidate for this job due to his lack of experience in international business. He is used to working in the US and the business culture in Vietnam is different. This may affect his ability to provide leadership and enable the Vietnamese employees accomplish their goals. Moreover, he has a young family that is used to living in the US and relocating them to Vietnam has caused family challenges that may affect his objectivity at work.
Expatriate management requires a delicate balance between the competing needs of expatriates and the organization. The management should remunerate expatriates adequately so that it enhances their motivation levels, while ensuring that compensation is realistic to prevent financial detriment to the company. Moreover, it should develop a uniform remuneration scheme for all expatriates to prevent the perception of favouritism that Paul experiences based on his lower pay on account of fewer years of service to the company. When the company pays employees using different payment schemes and yet they perform the same roles, then the lowly-paid employees, such as Paul, may experience low motivation levels and this will adversely affect their performance (Heneman & Judge, 2015). The Chicago and Foods and Beverage Company should strive to develop a general remuneration policy for expatriates which will address all their needs.
The first compensation method is the negotiation method where expatriate compensation schemes are tailored to the needs of individual expatriates (Bodolica & Waxi, 2007). Its benefit is that it is simple and reduces administration bureaucracies within the organization. However, this method is ineffective when a company has a large number of expatriates, as it becomes time-consuming (Johnason, 2009). The second method is the mixed method approach that remunerates expatriates differently based on their service to the company. Senior executives are paid using the international scale when abroad while junior executives are paid using the domestic system even when abroad, with adjustments for living standards. This method is beneficial since it rewards long service to the company, thereby encouraging employees to be loyal; to the organization. However, its weakness is that it may lower the morale of junior executives who are paid less yet perform similar roles as senior executives. This is the situation that Paul is currently facing (Bodolica & Waxi, 2007).
The US headquarters human resource manager should develop a uniform remuneration structure for all executives within the same rank, regardless of the number of years they have served in the company. This move will ensure that expatriates are rewarded for performance and it will enhance the morale of executives such as Paul who have served fewer years in the company. Moreover, the HR manager should introduce performance-based rewards where expatriates receive additional bonuses for meeting their performance targets, as this will motivate employees such as Paul to work harder in Vietnam.
Bodolica, V., & Waxi, M. (2007). Chicago food and beverage company: The challenges of
managing international assignments. Journal of the International Academy for Case Studies, 13(3), 31-42. Retrieved from http://link.galegroup.com.libraryresources.columbiasouthern.edu/apps/doc/A166823446/ITOF?u=oran95108&sid=ITOF&xid=598691f1
Heneman, H. & Judge, T. A (2015). Staffing Organizations. New York: McGraw-Hill.
Johnason, P. (2009). HRM in changing organizational contexts. London: Routledge.
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