Expatriate Performance Management in Multinational Firms

Overview

One of the most crucial elements of strategic global HR management is expatriate performance management. It therefore follows that the relevance of developing an effective expatriate performance management system cannot be overstated for multinationals that intend to remain competitive in an increasingly challenging global business arena. This paper largely concerns itself with performance management systems in corporations with operations in multiple locations across the world.

Key Variables in Expatriate Performance Management

One of the most crucial variables in this area is performance expectation. This has been defined by Adler (2018) as "how the assigned duties and responsibilities should be performed" (p. 74). The focus here ought to be on what is required of the employee — that is, in terms of expected results.

The second key variable is performance evaluation. This relates to the measurement of the extent to which the job responsibilities assigned to an employee are being fulfilled.

Third, contextual considerations represent another key variable that must be addressed. This is especially important because, as Smither and London (2009) point out, "context is the key to understanding appraisal in organizations" (p. 115). The context in which various roles and duties are performed differs from one location to another, making this variable particularly significant for multinational settings.

Next, fairness is another important variable in expatriate performance management. According to Cokins (2020), some performance management systems fail to function as intended because of their failure to ensure equity among employees.

Finally, career development must be addressed. Measures need to be put in place to ensure that expatriate employees have opportunities to continue advancing along their preferred career paths.

Elements to Consider in Performance Management Systems

With regard to performance expectation, one of the key elements is planning and goal setting. What constitutes effective or acceptable performance must be clearly stated at the onset of the performance cycle (Cokins, 2020). Given that the specifics of each role are unique, this element ought to be tailored for each position. However, the overall orientation of planning and goal setting remains similar across roles, since the ultimate objective — effective performance — is consistent throughout the organization.

Another element under performance expectation is employee involvement. Without the active participation of this key stakeholder group, the performance of assigned duties is likely to suffer. Ensuring that employees are engaged is therefore essential for an effective performance management system. A third element is monitoring and feedback, which is instrumental both in correcting deviations from expected performance and in providing opportunities for continuous improvement.

Turning to performance evaluation, a critical element is appraisal — defined by Adler (2018) as the "evaluation of an employee's job performance against a set of expectations and goals" (p. 179). As Adler further notes, transparency is essential on this front, since a lack of transparency can result in the overrepresentation or underrepresentation of actual performance. A second element under performance evaluation is periodic evaluation. Without regular evaluation intervals, it is difficult to produce an objective and reliable performance record.

Under contextual considerations, crucial elements include cross-cultural adjustment and legislation. Cross-cultural adjustment concerns the host country's culture and the degree to which the expatriate adapts psychologically to the new environment. Legislation, on the other hand, can dictate a wide range of aspects relevant to performance management, particularly with respect to fair work regulations that vary across jurisdictions.

With regard to fairness, key elements include dialogue, consistency, and documentation. Dialogue involves engaging employees with the intention of better understanding factors that impede performance. Consistency relates to ensuring that there are no unjustified material variations in the systematic approaches used to measure performance across the performance cycle (Smither and London, 2009). Documentation of the entire process eases goal-tracking efforts and helps guard against any perception of partiality.

Finally, under career development, the relevant elements include training and continuing education. Training ensures that employees are empowered to perform effectively in their assigned roles and, over time, promotes self-reliance and accelerated career growth. Continuing education relates to the pursuit of further learning — typically through an institution of higher learning — and organizations can seek to incentivize relevant certifications as part of this effort.

Conclusion

Effective expatriate performance management is indispensable for multinationals seeking to remain competitive in the global business arena. By carefully attending to the five key variables — performance expectation, performance evaluation, contextual considerations, fairness, and career development — and by proactively addressing the challenges posed by cultural distance and geographic separation, organizations can build performance management systems that are equitable, transparent, and well-suited to the complex realities of international operations.

References

Adler, R. W. (2018). Strategic Performance Management. Taylor & Francis.

Cokins, G. (2020). Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics. John Wiley & Sons.

Cardy, R., & Leonard, B. (2014). Performance Management: Concepts, Skills and Exercises. Routledge.

Smither, J. W., & London, M. (2009). Performance Management: Putting Research into Action. John Wiley & Sons.