Prior to beginning the localization process for an employee, HR should first:

Before initiating the localization process, the first and most critical step for HR is to conduct a thorough suitability assessment. This involves two key components: 1) evaluating the employee's long-term performance, potential, and desire to remain in the host country, and 2) confirming the long-term business need for that specific role in that location. This strategic assessment ensures that the significant commitment of localization is a sound investment for both the organization and the employee. All subsequent steps, such as designing compensation and drafting contracts, depend on this initial determination.

B. Establishing a remuneration package is a crucial step, but it logically follows the decision that the employee and role are suitable for localization.
C. Changing the employee's contract is the final administrative step in the process, occurring after suitability is confirmed and terms are agreed upon.
D. This statement is generally incorrect; localization is typically a long-term or permanent arrangement, transitioning an employee off a temporary expatriate status.

1. Dowling, P. J., Festing, M., & Engle, A. D., Sr. (2017). International Human Resource Management (7th ed.). Cengage Learning. Chapter 5, "International Compensation," discusses the transition from expatriate to local status, implying a preceding assessment of the long-term viability of the placement.

2. McNulty, Y., & Inkson, K. (2013). Managing Expatriates: A Return on Investment Approach. Business Expert Press. The book's ROI framework necessitates an upfront analysis (p. 45-50) of the value and suitability of an assignment's continuation before committing to further steps like localization.

3. Caligiuri, P. M. (2000). The big five personality characteristics as predictors of expatriate's desire to terminate the assignment and supervisor-rated performance. Personnel Psychology, 53(1), 67-88. https://doi.org/10.1111/j.1744-6570.2000.tb00194.x. This research underscores the importance of assessing individual suitability for long-term international roles.