INTERNATIONAL HUMAN

RESOURCE MANAGEMENT

Managing Performance

June 11, 2008 1

 Managing Performance

 Organizations seek to continuously improve

upon their corporate performance (headquarters
and subsidiary units) against clearly defined,
preset objectives, goals and targets

 The performance of individuals working in an

organization is determined by numerous
considerations, including pay, training and
development measures, working environment,
ability, expectations and motivation

June 11, 2008 2

 Determining Expatriate Performance

Compensation
Task
Package

Expatriate
Performance

Headquarters Cultural
Support Adjustment

Work
Environment

June 11, 2008 3

 Determining Expatriate Performance:
(The Compensation Package)

 The compensation or remuneration package

(salary, benefits, allowances etc.) offered to an
expatriate is considered an important
determinant of his or her performance on the
international assignment

 Another important consideration and motivator

for expatriates is the career progression
potential stemming from their acceptance of the
international assignment
June 11, 2008 4
 Determining Expatriate Performance:
(The Task (1))

 Expatriates perform different tasks on their

respective international assignments, for e.g.,
top managers, middle managers, business
establishers, project employees and R&D project
personnel, or, as CEOs / Subsidiary Managers,
Structure Reproducers, Troubleshooters and
Operatives

 Tasks are accompanied by roles, i.e., what

behavioral patterns does the organization and
the host environment expect from the
expatriate’s position on his or her assignment?
June 11, 2008 5
 Determining Expatriate Performance:
(The Task (2))

 A serious “role conflict” situation may arise for

expatriates on their international assignments because
of the different expectations prevailing at headquarters
and amongst the stakeholders in the host environment

 The inability to reconcile to role conflicts can result in a

performance loss for expatriates

 Research indicates that expatriates accord higher priority

to satisfying the role expectations of the headquarters as
their performance and career prospects are often
determined there
June 11, 2008 6
 Determining Expatriate Performance:
(The Task (3))

 Job Autonomy is another determining factor which has to

be considered in an expatriate’s performance

 For TCNs, the issue of role conflict is more complex than

for HCNs because TCN expatriates may not only have to
contend with the expectations of the culturally quite
different host environment, but they may also have to
contend with the culturally quite different headquarters of
the organization

Example – A U.S manager who works for a large Dutch

multination operating a subsidiary unit in Indonesia
June 11, 2008 7
 Determining Expatriate Performance:
(Headquarter Support)

 Headquarter support is important for the expatriate and

his or her accompanying family members because of
their requirement for adjustment in the new host
environment which may be culturally quite different from
their home environment

 A perception on the part of the expatriate of insufficient

support being rendered by headquarters (including
support to the expatriate’s family) could result in
disillusionment with the organization and a drop in the
expatriate’s performance levels

June 11, 2008 8

 Determining Expatriate Performance:
(Headquarter Support)

Transactional Relational

Specific, short- Broad, open-ended

term, monetizable long-term
obligations obligations
limited involvement monetizable and
of parties socioeconomic
elements

June 11, 2008 9

 Determining Expatriate Performance:
(Host Environment)
 The host environment may have a major impact
on the expatriate’s performance due to the
different economic, political, cultural, social, legal,
technical, physical etc. framework conditions
prevailing there and the policy of the
organization’s headquarters towards its subsidiary
units

 The stage of maturity of the organization’s

subsidiary unit also may considerably determine
the expatriate’s performance
June 11, 2008 10
 Determining Expatriate Performance:
(Cultural Adjustment)
 Cultural adjustment is a critical factor in an
expatriate’s performance (see “expatriate failure”)

 All individuals react differently, some can adjust

more quickly than others (personality traits:
authoritarian and dogmatic versus open-minded,
culturally sensitive and emphatic)

 The adjustment of the expatriate’s accompanying

family members must be taken intro consideration
as well

June 11, 2008 11

 Determining Expatriate Performance:
(Cultural Adjustment – Time Curve)

4
1
Adjustment

2 (Culture Shock
& Crisis Period)

Time
June 11, 2008 12
 Expatriate Performance Appraisal
Goals can be used as the basis for performance criteria:

 Hard Goals – objective, quantifiable and measurable (e.g.:

ROI, market share)
 Soft Goals – relationship or trait-based (e.g.: leadership style,
interpersonal skills)
 Contextual Goals – Factors that result from the situation or
environment in which an expatriate performs (e.g.: host
country regulations and restrictions)

Often, organizations use only hard goals to assess their

expatriates. Things like behaviour of the expatriates and ways of
obtaining results (bribery?) must also be considered

June 11, 2008 13

 Who Conducts Performance Appraisal?
 Often high-level expatriates (subsidiary managers) are
assessed by their immediate superiors at headquarters.
This creates problems because the superiors are based
at a distant location and may not be fully aware of the
conditions and particular situations prevailing at the
subsidiary unit

 Relying on “hard criteria” as a means of assessing the

performance of expatriates could result in these pursuing
short-term quick results oriented strategies with adverse
consequences for the longer-term (and which become
evident after the expatriate has completed his or her
assignment and departed from the host country)
June 11, 2008 14
 Who Conducts Performance Appraisal?
 Lower-level and other expatriates may be conducted by
a host-country manager or supervisor who can take the
contextual situation into account, but who may have their
own cultural biases and hence cannot fully appreciate
the expatriate’s performance in the broader
organizational context

 Where possible, several organizations use more than

one assessor to evaluate an expatriate’s performance on
his or her international assignment

June 11, 2008 15

How is Performance Appraisal Conducted?

Traditionally, most organizations use

standardized performance appraisal forms to
evaluate their employees’ performance. Such
forms allow cross-employee comparisons, but
they are inappropriate for assessing expatriates
on international assignments because the
performance context changes. Many
organizations continue to use performance
appraisal forms meant for domestic employees
in an international context

June 11, 2008 16

 Appraising the Performance of HCNs
 Appraising the performance of HCNs may be a
“culturally-sensitive” issue in some countries (save face
syndrome)

 Local responsiveness to performance appraisal

counteracts a standardized approach by the organization

 HCN managers also may experience “role conflicts”

because they are expected to perform roles imposed by
the parent organization and, at the same time, live up to
the expectations of the home environment

 HCN managers who work in the parent organization and

are then transferred back to their home countries may
experience particular difficulties with “role conflicts”
June 11, 2008 17