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By Allianz Care | November 22, 2018
Next to expatriate failure, one of the greatest difficulties multinational companies encounter is that of underperformance. Research by Harvard Business Review over a 10 year period showed that almost one third of US managers who stayed for the duration of an expat assignment failed to meet performance expectations. As a global human resource manager, developing an international performance management system that highlights potential issues early, and provides a framework for remediation, is essential for your company to achieve a return on investment.
What is international performance management?
International performance management is the evaluation of an individual who works in a foreign subsidiary on a temporary basis to transfer knowledge or develop global leadership skills. At its best, international performance management should feed into the global goals of the business.
Challenges of international performance management
There are many challenges associated with expatriate performance management. Although we have listed some below, they are likely to vary by business. Ideally work to identify the challenges your company is likely to encounter and attempt to mitigate them in the expatriate performance management plan.
Performance management systems rarely work in the same way domestically and internationally. Environmental variations including; different growth rates, the immediate environment and differences in performance, usually mean international performance appraisals need to be unique to each expatriate manager.
Time and distance
Improvements in technology make this less of an issue than it once was, but time differences and local infrastructure will impact on performance and appraisals. This is particularly true of expats working in underdeveloped countries.
The employee’s ability to adjust to the organisational culture within the subsidiary, as well as the wider culture within their new country, is likely to impact performance. An understanding of the local organisational culture by the HR team, the management team and the employee will facilitate the creation of a measurable international performance management system.
Inconsistency of implementation
Like all performance development, it will only be successful if implemented consistently in company subsidiaries. Oversight of this may be a challenge if most Human Resource functions are centralised to headquarters, meaning some employees thrive while others are left directionless.
Tips for international performance management
Developing a system that will work successfully across markets is a significant challenge for a global human resources manager. To further compound the situation, there is very little best practice research as existing studies do not focus on the same variables or countries.
Define, facilitate and encourage performance
Ultimately the goal of an expatriate performance management system is to define, facilitate and encourage performance in the individual and the teams they work with.
Your company’s international performance management system should enable managers of expat employees to set specific, realistic, measurable goals that feed into the overall objectives of the business. However, setting goals is not sufficient for success, the programme should also contain a method of assessing performance on several occasions over a year.
To achieve the goals that have been set, employees need to be able to facilitate performance through removal of barriers like outdated equipment or software, poor procedures and micro-management. However, international employees may encounter further difficulty with government requirements or personal safety depending on where they are based. Flexibility needs to be included in this regard when developing an expat performance management system.
Finally, encouraging performance has been shown to be another marker of a successful international assignment. The methods for encouraging performance may vary from country to country. While additional remuneration may work successfully at headquarters, time off or other special privileges may be more valued in other countries. The easiest way to find out what may work best is to survey international employees. Once agreed it is essential that the appraisal process is transparent and fair.
Essential to successful international performance management is a clear and effective training plan for all stakeholders. Once complete, managers need to be held accountable for implementing the process across their own employees, ideally in the form of their own performance appraisal by senior management and/or human resources.
When creating a performance development plan that is going to work cross-culturally the differences in how performance feedback should be provided needs to be accounted for. For example, in some European cultures feedback should be direct and actionable where as in some Asian cultures the same feedback could cause unacceptable loss of face for the employee. Therefore, it is important to understand the culture on the ground when creating guidelines on how feedback should be provided.
In addition to skill sets, another element of effective expat performance is personal health and wellbeing. Ensure your employees have the international health insurance protection they need to excel.