Since organizations exist to achieve goals, the degree of success that individual

employees have in
reaching their individual goals is important in determining organizational
effectiveness. The
assessment of how successful employees have been at meeting their individual
goals, therefore,
becomes a critical part of human resource management. In case of
multinationals, several new dimensions, mostly cross culture related, influence
the process. The evaluation of performance of expatriate is very much linked with
the performance of subsidiaries, which they are sent to
manage.
What is Performance?
The degree or extent with which an employee applies his / her skill knowledge
and efforts to a job,
assigned to him/ her and the result of that application. Appropriate outcomes and
behavior
against expectation of specific goal and terms & conditions, is performance.
What is PM?
The holistic process of identifying, evaluating and developing the work
performance of employees
in the organization so that the organizational Goals and objectives are more
effectively achieved,
while at the same time benefiting employees in terms of recognition, receiving
feed back, catering
for work needs and offering career guidance to face stiff domestic and
international competition.
In the HR cycle presented by Tichy, Fombrun and Devenna, selection process is
the main variable
influencing directly the performance as also the employee development
process.The four
generic processes ; Selection, PA, Reward management and HRD reflects
sequential managerial
tasks. Performance is act here a function of all the human.
Purpose of performance management is to contribute to achievement of
high performance by organisation and its people
High performance means reaching and exceeding stretching targets
(sometimes MNC/MNE seeking superior performance)
Involves agreement of objectives, knowledge, skill and competence
requirements, plus work and personal development plans
Performance management of international employees involves all types of
staff (i.e. expatriate and non-expatriates)
Session focuses on expatriates [i.e. employees temporarily residing in
foreign country on expatriate (long-term) assignments]
When determining expatriate performance, consider impact of five
variables and their inter-relationship (portrayed like Russian doll, with

compensation as inner ring and cultural adjustment as outer ring) [see

graphic on next slide]

. Variable that influence Performance of Expatriate:

Performance can be viewed as a combination of several variables such as
motivation, ability,
working conditions, clarity of goals and roles, and expectations, the following
factors and
their interrelationships affect performance assessment of expatriates:
1.
2.
3.
4.
5.

Compensation package
Nature of assignment (assignment task variables and role of expatriate)
Support from head quarters
Environment in which performance occurs; and
Cultural adjustment of the individual and the accompanying family members.

(Dowling et al. (2013))

Compensation Package:
-

Compensation is one of the key factor closely associated with expats

performance.
- Well compensated expatriates definitely happier and more productive.
Pay, according to Herzberg's two factor theory of motivation, is a hygiene
factor which
when adequately provided for removes dissatisfaction but fails to activate
motivation and
performance.
But money continues to remain as one of the most significant motivators
for expats.

Tasks :

An expatriate is sent on an overseas assignment either as chief executive,

system
replicator, trouble shooter or as a simple operator.
Whatever, the nature of assignment, task has considerable impact on an
individuals
performance.
A tougher task tends to evolve better performance than a job which is
relatively easy to
handle.
People tend to show their best when the job is tough and challenging.

Head quarters support:

-

Home office support is a crucial in expatriate performance.

An assignee has accepted an overseas job for three objectives: making
extra money,
career prospectus and loyalty to the organization and commitment to make the
firm
successful.
It is necessary that the home office extends support and offer moral
courage by
psychological counseling, particularly in times when the expatriate is passing
through a
culture shock.

Host Environment:
-

Environment wields considerable influence on performance, particularly of

the
expatriate. If the host environment is hostile, expatriate are under constant
pressure and
often, there is a threat to their life itself.
The form of ownership of the subsidiary is also important. For instance, it
may be
relatively easier to perform in a wholly owned subsidiary than in a joint venture
with a
state owned enterprise in China.
Conflicting goals between parent companies are a common problem
within international
joint ventures and can make the expatriates job more difficult.

Cultural Adjastment:
-

The ability to live comfortably in an alien culture is essential for the

success of an
expatriate. Multicultural adjustability refers to being sensitive to the host culture,
the
expats multicultural sensitivity, language ability, diplomacy, adaptability,
positive
attitude, emotional stability and maturity.
It is not enough if the expat. Alone acquires cross cultural adjustability.
The trailing
spouse to adjust is often a major reason behind expatriate failure

Expatriates performance appraisal

The criteria for assessing performance should be clear, relevant, practical and
reliable if
assessments were to be meaningful.
Basically there are three categories of performance indicators:
1. Trait based (soft goal) leadership style, interpersonal skill etc.
2. Behavior based (contextual goals) attempts to take into consideration factors
that results
from the situation in which performance occurs.
3. Result based (Hard goals) objectives, quantifiable, and can be directly
measured such as
Return On Investment (ROI), market share and so on.

Appraisers
-

Subsidiarys CEO
The immediate host country supervisor
The individuals home country manager
Depending on the nature and the level of position concerned.
( Tahvanainen 1998)

Imagine, a situation where the subsidiary Head is a French and the expatriate is
an Indian. Or the head of a subsidiary is a Japanese and the team member is a
Chinese. The performance Evaluation tends to be biased either for or Against
the assignee, because of the cultural Predilections of the manager / leader.
However, some common practices adopted by the industry are:
-

Matrix reporting it is the dual reporting to the functional as well as the

unit operational
head, whereby appraisal is carried out (usually independently) by the two
reporting
managers and then weighted out, depending on what percentage each manager
deserves.
It is usually a 50% weight age for scores by each of the reporting managers.
Use of Multiple appraisers (popularly called the 360 degree appraisal
technique) are
increasingly being used to assess performance of expatriates .
How often the employees should be assessed is a relevant question?
Once in a three months?
Once in a six months?
- Once in a year?
According to a survey conducted in 1997 by Arthur Anderson, 70% of the
organizations
conduct performance appraisals once a year and many of the organizations are
multinationals.
An important, aspects of an effective performance management system is
the provision of
timely feed back of the evaluation process.
Regularly feedback is an important aspects in terms of meeting targets
and revising goals,
as well as assisting in motivation of work effort.
The difficulty for the expatriate who is being evaluated by a
geographically distant
manager is that timely, appropriate feedback is only viable against hard criteria.

Balancing HQ and Host Unit Performance Due to the decline in sales of

the
headquarters, there is a conscious reduction in the investment at the subsidiary
level
which could significantly impact the sub units performance evaluation.
Attention to external forces new tax laws, Government regulations,
Import / export
tariffs, political instability etc.
In flexible approach this could result in the subsidiary pursuing
strategies which are no
longer fit for the new environment. Volatility and fluctuations in the market due to
warlike situations/ terrorism, could make goals and deadlines set by the distant
HQs
strategy team unrealistic and impractical.
Significance of Time and Distance Lack of face to face interactions and
high degree of
physical distance compounds the challenges of assessing performance across
geographies.
Variable level of Maturity Growth in a foreign country is generally slower
and more
difficult to achieve than in the home country. There is more time needed to show
any
results and the effort required is often a lot more and cannot be compared
against any
other benchmark, internally and externally.
Conclusion:
Performance management comprises such HR activities as assessing
performance, providing
feedback and using appraisal data for several purposes
Performance management of non-expatriates (i.e. staff whose work
involves international travel, but not considered international assignees
because do not relocate to another country)
Perennial challenge of effectively communicating strategic links between
assignees performance and organisational strategy is magnified
Work conducted through non-standard assignments and international
travel still conducted across cultural and national boundaries, thus subject
to cultural differences in norms about acceptable or preferred levels of
participation
Isolating international dimensions of job performance might prove difficult
Performance feedback for assignees will only be relevant if it reflects
international contexts in which they are performing
Cross-cultural awareness and competence training will still be relevant for
non-expatriates
Challenges for IHRM to determine what to reward when dealing with nonexpatriate assignments and ways in which compensation for each type of

international assignment fits with global compensation strategy (last

session)

Performance management of international employee i.e. expatriate and nonexpatriate, as per usual HRM protocols:
Undertaking job analysis and devising job description and
personnel/person specification (influenced by strategy of organisation and
subsidiary) [link to HRM in MNCs I]
Setting job goals and standards (hard, soft and contextual performance
criteria)
Conducting performance appraisals (usually formal meeting held annually;
issue of who conducts; use of standardised or customised form)
Providing constructive feedback (cultural considerations relevant):
Can determine pay and promotion plus training and development
requirements
If expatriate/non-expatriate performance does not meet required standards
following appropriate support, disciplinary procedures may be activated
Atteya (2012) Egyptian Study on Performance Management (on
Webcourses)
Differences between performance management of PCNs, TCNs and HCNs,
highlighting difficulties of role being defined in one country, but performed
in another (next three slides)

Employee development pre-departure training and the 10

components

(Brewster et al., 2011)

Training aims to improve employees current work skills and behaviour,
whereas development intends to augment abilities in relation to some
future position or job
Training and development activities are part of way in which multinational
builds it stock of human resources
Evidenced by increasing number of multinationals that have established
their own universities or schools, such as Deloitte, Disney and
McDonalds

In addition to performing a role, international assignments important employee

development tool:
Integral part of management development, career development and
succession planning

 Expatriates are de facto trainers, transferring knowledge and

competence between various units
Expatriates expected to ensure that systems and processes are
adopted, and will be engaged in showing how these systems and
processes work (particularly if from head office)
Job rotation useful way for employees to gain broader perspective,
which is beneficial for management development
Once employee selected for expatriate position, pre-departure training
considered next step in attempting to ensure expatriates effectiveness and
success abroad, particularly where destination country considered culturally
challenging
Link to cultural theorists - degree of cross-cultural training required contingent
upon differences between cultures going from and to
Brookfield Global Relocation Services (2011) highlights availability of crosscultural training in MNC/MNEs:
Cross-cultural training provided by 74 per cent of responding firms (81 per
cent in 2009)
75 per cent of this group indicated that attendance optional (78 per cent in
2009)
Extending their pre-departure training programmes to include whole family
(49 per cent), or with partner (46 per cent) [56 and 32 percent,
retrospectively in 2009]

Integrative Framework Brewster

Ten components of effective pre-departure training programme (Dowling et al.,

2013):
1. Cultural awareness programmes
2. Preliminary visits
3. Language training
4. Practical assistance
5. Security briefings
6. Training for the training role
7. TCN and HCN expatriate training
8. Provision of training for non-traditional expatriate assignments
9. Short-term and non-standard assignments
10.International business travellers

1. Pre-departure programmes - cultural awareness

programmes
Three models:
Tung (1981, 1997): identified five categories of pre-departure training - area
studies programmes that include environmental briefing and cultural orientation,
culture assimilators, language training, sensitivity training, and field experiences
Mendenhall, Dunbar & Oddou (1987): building on aforementioned, proposed
three dimensions - training methods, levels of training rigor and duration of
training relative to degree of interaction, and culture novelty (graphic on next
slide)
Black & Mendenhall (1989): recognises that effective training is only first step
and that expatriates willingness and ability to act upon that training in new
environment are crucial to effective performance (link to IHRM Theory and
Practice)

(Mendenhall and Dunbar)

2. Pre-departure programmes - preliminary visits (2 of 7)

Well-planned trip overseas for candidate and partner/family provides preview that
allows them assess their suitability for, and interest in, assignment
Osman-Gani (2000): only US expatriates, out of group including German,
Americans, Koreans, Japanese and Singaporeans, rated preliminary visits as
important, ranking preliminary visits second behind cross-cultural training
Combined with cultural awareness training, preliminary visit is useful component
of pre-departure programme (but have to have former to capitalise on latter)
Brewster & Pickard (1994): expatriate community has influence on expatriate
adjustment (positive and negative).
3. Pre-departure programmes - language training (3 of 7)
Remember, role of English as language of world business:
Given its place in international business, often English becomes common
language within multinationals
Particularly in ICT and telecommunications sectors
McKee (2013) Challenges of Training in Other Peoples Languages
Host-country language skills and adjustment:
Tung & Andersen (1997): respondents indicated that ability to speak native
language was as important as cultural awareness in their ability to adapt and
perform on assignment (link to IHRM Theory and Practice)
Knowledge of corporate language:
Expatriates can become language nodes, performing as communication conduits
between subsidiary and headquarters, owing to their ability to speak corporate
language (link to HRM in MNCs I)
Crucial role for PCNs.
4. Pre-departure programmes - practical assistance (4 of 7):
Many multinationals use relocation specialists to provide practical assistance, for
example, in finding suitable accommodation and schools (potential to generate
positive return-on-investment)
Support may be part of negotiated employee reward package (link to HRM in
MNCs I)

Supplemented by ongoing assistance from host country HR and sending line

manager
5. Pre-departure programmes - training for the training role (5 of 7):
Expatriates, particularly PCNs, often used because of lack of suitably trained staff
in host location
Consequently, expatriates often find themselves training host country nationals
(HCNs) as their replacements
Need to be prepared and upskilled for this role
6. Pre-departure programmes - TCN and HCN expatriate training (6
of 7):
a. Pre-departure programmes tend to be targeted at staff from parent
company Head Office (PCNs)
b. Third-country national (TCN) and host-country national (HCN)
expatriate training not always provided
c. Could create perceptions of inequitable treatment
d. Harvey (1997): may reflect ethnocentric attitude
7. Pre-departure programmes - provision of training for nontraditional expatriate assignments (i.e. non-expatriates) [7 of 7]:
a. Pre-departure training should also be provided for employees on
short-term assignments and on non-standard assignments, such as
commuting and for international business travellers
b. Can use computer-based training (significant cost attached to
comprehensive pre-departure training if short-term assignment)
8.
9.

Provision of training for non-traditional expatriate assignments

Short-term and non-standard assignments

10.

International business travellers

International training and development is one of IHRMs most crucial activities

and the
potential benefits of effective training and development are widely
acknowledged.