Question:
Discuss about the Cohesiveness and Organizational Support.
Human Resource Management, often abbreviated as, HRM, refers to the management of the human resources. It is designed by the department of HR, in order to maximize the performance of the employees in accordance with the organization’s strategic objectives. Its primary objectives are managing the people of the organizations, by focusing on its policies and systems. It is responsible for designing the employee benefits, recruitment, development, training, rewarding and performance appraisals (Al Ariss, Cascio & Paauwe, 2014).
The report highlights the Expatriate performance of the multinational organizations and how international organizations manage this effectively. Expatriate performance management is practiced in multinational enterprises. There is no such prevalent form, existing for the expatriate performance management. It is strongly influenced by the parent organization’s culture. The expatriate performance management consists of seven major activities; linkage to the strategy of the organization, setting of the behavior of individual performance, identifying the variables which is impactful for the performances, appraising the employees’ performance, providing the employees with regular feedback regarding their performances and the progress towards the organizational goals, providing them with opportunities for growth and improvement and lastly linking of the results with that of rewards (Andresen, Al Ariss & Walther, 2012).
The report throws light on how the international organizations manage their expatriate performances effectively and efficiently. In addition to this, it includes literature review of the performance management of international employees along with the cross cultural context. Moreover, it discusses about the cultural adjustment, performance criteria and performance feedback.
The human resource department of any organization must work with their managers, who are responsible for the welfare of the expatriate employees. Together, they must work on the development of critical and professional profile of each and every employee, who all are assigned for an assignment of international domain. The expatriate performance management consists of seven major activities; linkage to the strategy of the organization, setting of the behavior of individual performance, identifying the variables which is impactful for the performances, appraising the employees’ performance, providing the employees with regular feedback regarding their performances and the progress towards the organizational goals, providing them with opportunities for growth and improvement and lastly linking of the results with that of rewards (Andresen, Bergdolt& Dickmann, 2014).
The management of the expatriate profile must clearly outline the facts of the company’s expectations as well as their productivity standards, which will enhance their profitability and the operation’s efficiency. Managing expatriate performance is an important part of any corporate strategy. Moreover, it helps in serving several goals of the organization. It also helps in identifying the international employees who have high potential and proves to be beneficial for the company. It facilitates the equitability of reward performance and also segregates the employee needs and demands for the development (Andresen, Bergdolt & Margenfeld, 2012).
An organization greatly suffers when international projects fail to live up the organization’s expectations. It is extremely costly for the image of the organization and its reputation. Companies must emphasize on their importance of appropriate selection of the staff members or the associates for international projects or assignments. A detailed and consistent assessment of the expatriate employees’ performance and their appraisal for the operations, is very critical for an international project’s success (Armstrong & Taylor, 2014). The failure or success of the company totally depends on how the employees are working together for the achievement of international assignments. Several issues like the timing and criteria of the performance reviews, the employees’ raises as well as bonuses are to be discussed accordingly and agreed before the selection and placing of the employees for the assignments takes place. However, appraising the expatriate employees’ performance is as important as that of the domestic employees’ assignments (Awais Bhatti, Mohamed Battour & Rageh Ismail, 2013).
Each and every international assignment is unique and different in its own self. A common rule for appraising the expatriate workers is that each and every international office must use a unique and different system of appraisals. Employers must keep a check on the system of the appraisals and must not agree on taking a performance appraisal system which was designed for the appraisal of domestic employees. It is the duty of the company to set up different and unique appraisal systems for the international or expatriate employees (Beardwell & Thompson, 2014). It should be modified in accordance with the expatriate employees’ performances based on several criteria, like the environment, task factor as well as personality factors. The company must understand the policies and take under consideration while the assessment of expatriate employees’ performances takes place. The human resource department of the organization should discuss with the performance managers and outline their appraisals accordingly (Awais Bhatti, Mohamed Battour & Rageh Ismail, 2013).
The compensation package: The main focus of the international programs of compensation is to provide the international employees with sufficient amount of wages in order to keep them at a good financial level, at the point of their international projects. They must not lose their ground economically. The compensation package must include the normal salary, in addition to the benefits being offered in the employees’ home countries. For expatriate employees, the base salary is the primary allowance packages, which includes foreign premium services, living cost allowances, utility and housing allowances, in service benefits as well as pension contributions. It may be paid in local or home currency or in dollar, pound and others (Bratton & Gold, 2012).
Effectiveness of team work completely depends on the way the team members are working in order to achieve a common organizational goal. Efficient team members maintain peace and harmony, while working. Generally, it doesn’t happen by accident. Excessive amount of hard work, cooperation, struggle and commitment results into a better team, which is the key to success. A team is only productive when it is committed to a specific goal and the members are able to complete the goal by using their own resources (Collings, 2014). When a team is introduced to the goal, all the team members should come forward and work as an individual unit in order to finish the task. Each and every membershould equally participate in the given task and share their efforts in order to get good results as it is essential for the team’s success. Moreover, diverse workforce can be regarded as a reflection of changing marketplace and the world. Cultural diversity helps in introducing high values to the work. Respecting the differences of every individual proves to be beneficial, which helps in creating competitiveness and increasing the work productivity as well (Deresky, 2017).
Quests for the global presence and globalization have led to the expansion of the multinational corporations, into more new market segments with higher returns. The expansion of the markets has led to the increased competition of the talented workers. It has driven employment of increased number of expatriate employees or workers to manage the overseas operations of the businesses. Literature reviews show that the poor performances of job can be a result of poor cross cultural adjustments in the foreign locations. It is therefore, important to ensure that all the corporations are appointing capable candidates or workers for the overseas projects, so that it helps in bringing in a good investment for the multinational organizations (Ghauri & Park, 2012). However, due to economic and political situations’ improvements in Africa and other countries, international corporations view these places as a total new and emerging markets for managing the business operations. Research on these, as such adjustments of expatriate performances, has been taking place for the last two or three decades. Managing cross cultural factors is important as it assists the human resource professionals to plan and implement appropriate programs for the expatriate employees. It also helps to bridge the gaps between the countries and emerging nations. It also contributes to the better understanding of human beings (Harris, 2012).
A company with diverse collection of experiences and skills for example; cultural understanding, languages, ethnicity and more, is able to provide services to the customers globally. It helps in enhancing the company’s service range, which is beneficial for them. A diverse group of workforce, which feels free to communicate, can provide a wide range of experiences, points of view and skills. It helps the organization to meet the needs of customers and business strategies more adequately. Multinational companies, which encourage diverse workforce, can be an inspiration to all of its associates and encourage them to perform to their best (Hendry, 2012). More effective execution and implementation of business strategies is possible, which in turn results in profitability, return of investment and profit. However, implementing diversity in the policies of the workplace can prove to be a challenge to all the diversity advocates. Based on the results of employees’ research data and assessments, they must implement and build a strategy to maximize the diversity effects in the organization’s workplace. Only diversity training is not enough for the diversity management plan of the organization. Several strategies must be there and it should be implemented to create diversity culture that permeates each and every function and department of the organization (Jehanzeb, Rasheed & Rasheed, 2013).
Performance appraisal for the international employees is some strategic process which is taken care by the human resource managers of the company. It enables the MNCs or multinational corporations to improve or evaluate the employees continuously. It also takes care of the subsidiary units for its improvement as well as the corporate performances and preset objectives. Effective management helps in creating a system of incentives which ensures the international workers as well as the overseas subsidiaries to work in accordance with the interests of the home company. International performance appraisals are complex because of the asymmetrical information and incongruence of the goals, between parent or home company with its subsidiaries (Jiang et al., 2012). There are various approaches to the international performance appraisals for the multinational companies to choose, and the approaches are mainly affected by the firm specific and host contextual factors. However, the importance of the international performance appraisals has worldwide recognition and most of the multinational corporations have effectively managed it. It helps in determining the achievement and ability of the workers along with reasonable consistency and accuracy. Moreover, it helps in the identification of the so called obstacles in the path of the top performances (Kersiene & Savaneviciene, 2015).
The criteria in order to assess the performances of the expatriate workers must be clear, practical, reliable and relevant as well as meaningful. The performance criteria must be based on the workers’ traits and work profile. The company should focus on his/her quality of work and performances. Moreover, his/her behavior, that is, how he/she behaves in the company, must be taken into account. The performance criteria also depend on the way the worker is treating his/her colleagues or work friends. A company’s success depends on its capability in embracing diversity and realizing its benefits (Kraimer, Bolino&Mead, 2016). The organizations which are able to handle actively multiple issues related to diversity can progress on a long run. It increases adaptability as employees with various backgrounds bring in individual experiences and talents, giving new ideas and sharing different views which help in adapting to customer demands and fluctuating markets. The multinational companies must be able to establish the performance standards of the employees by encouraging them on a daily basis. They must communicate their working standards to the employees to increase their level of performance. Moreover, daily report of the expatriate workers’ performance must be kept in record and observed by the human resource managers (McEvoy & Buller, 2013).
However, establishing the performance criteria can be a difficult task altogether. This is due to the major differences in the equitable standards of productivity and international environments, which are applicable for the servicing and manufacturing of subsidiaries of foreign companies. Performance feedbacks and criteria are being best established by combining norms and values of each and every local environment with home office’s standards of performances (McNulty, 2013). Individual profile of the countries must be developed and they should take the foreign environment of subsidiaries into account. This particular profile must be used in order to review certain factors which may have an impactful effect on the performances of expatriate employees. Such factors are language, politics, culture, labor relations, government, control, economy and communication. Once these factors affecting the performances of expatriate employees are determined, the message must be circulated among the subsidiaries of the multinational organizations and feedback must be generated on the basis of that (McNulty, De Cieri & Hutchings, 2013). Critical and professional profiles of each and every expatriate worker must be compared against the other employees within the country cluster in order to ensure that the performance is properly measured and reviewed. In fact, these criteria are useful for providing the workers with the feedback regarding their performances. It is also used when the individual employees are being appraised in the international assignments (McPhail et al., 2012).
Organizations exist in order to achieve their goals and objectives. The success degree of the individual employees depends on the effectiveness of the organization. The assessment of the individual successful employees attaining or meeting their individual goals or objectives become a very crucial part of the human resource management. Taking the case of multinational organizations, several new and different dimensions come into play. The cross cultural diversity influences the whole process to a huge extent (Min, Magnini & Singal, 2013). Moreover, the performance evaluation procedure of the expatriate employees or workers is very much attached with the subsidiaries’ performances. Multinational organizations are the group of various subsidiaries which collaboratively try to achieve the sustainable and competitive advantages through mutual and supportive goals. The performance evaluation of the individual subsidiaries become a crucial part and this particular subject has to be taken into consideration while evaluating the expatriate workers’ performances (Nery-Kjerfve& McLean, 2012).
The compensation package: The expatriate workers must be provided with several benefits which include the housing allowance as well as relocation assistance. The main focus of the international programs of compensation is to provide the international employees with sufficient amount of wages in order to keep them at a good financial level, at the point of their international projects. They must not lose their ground economically (Peng&Beamish, 2014). The compensation package must include the normal salary, in addition to the benefits being offered in the employees’ home countries. For expatriate employees, the base salary is the primary allowance packages, which includes foreign premium services, living cost allowances, utility and housing allowances, in service benefits as well as pension contributions. It may be paid in local or home currency or in dollar, pound and others (Reiche, Mendenhall & Stahl, 2016).
At times, the parent country nationals receive a premium salary which acts as an inducement to the foreign assignment acceptance or as a compensation to the hardship which is caused due to the transfer. Those payments vary from assignment to assignment, depending on the actual hardship or the tax paid to the governments of the foreign countries and even on the assignment’s length. Various allowances are offered to the expatriate workers taking the assignments into consideration.It includes living cost allowance which involves the payment of compensation of various expenditures of home country as well as foreign country (Richardson & McKenna, 2014). Housing allowance indicates that the expatriate workers must be able to maintain the living standards of their home country. Travel allowances and home leaves are given to them in order to cover all the trip expenses of their travel to the home country, and that is usually once in the year. These trips help the expatriate workers to renew their family as well as the business ties. It also avoids adjustment issues and problems. Moreover, education allowances are also given to the expatriate workers’ children for their education requirement. Education allowances basically includes the items like tuition, books, language classes tuition, uniforms and transportation (Rosenbusch & Cseh, 2012).
Relocation allowances mainly cover the shipping, moving, temporary living costs and expenses, down payments and other lease related expenses or charges. Various international plans of compensation attempt in protecting the expatriate workers from any kind of consequences related to the taxation. They are allotted with equalization tax plans. In accordance with this plan, the multinational companies help in adjusting the base of the employees’ income. It is done in order to secure the expatriate workers so that they do not have to pay more tax. The expatriate workers are also allotted with spouse assistance, in order to safeguard the income loss of the expatriate’s spouse, for relocating abroad (Santosh & Muthiah, 2012). Multinational organizations pay spouse allowances to encourage the expatriate employees to undertake the international projects or assignments. The compensation packages of the employees may vary from company to company as well as location to location enormously. It is important to take several factors into consideration, while negotiating a contract of expat. The multinational organizations must keep a check on the employment’s nature, governing laws as well as jurisdiction and the duration of the contract and termination notice period as well. Therefore, these factors must be taken into consideration while deciding the compensation packages for the expatriate workers or employees. The nature of the employment can be determined on the basis of the local and expatriate employees (Richardson & McKenna, 2014).
Headquarter Support: As the compensation package, the headquarters’ support is also plays a very important factor for the betterment of the expatriate employees. It is a necessityfor the home company to extend their support to the expatriate workers. They should also be provided with moral support and courage, mainly at situations, when they are having a tough time in getting accustomed to the working culture of the foreign company. It should extend from the individual expatriate employee to his/her family members. The external context acts as an important determinant for the expatriate employees’ performances (Santosh & Muthiah, 2012). The contexts differ on the basis of societal, economical, legal, technical, operational and physical factors. Headquarters’ support plays a bigger role in the expatriates’ performances. If the expatriate performance is not managed carefully then it may hamper the progress. Employees may suffer from sleep disturbances, anxiety, stress, health disorders and others. Therefore, it is to be taken care and headquarters must fully support in order to enhance their performance levels. Moreover, the families of the expatriate employees must also be provided with medical and moral assistance (Shaffer et al., 2012).
Headquarters’ support helps the expatriate workers in making extra money, improving the prospects of their career, establishing their loyaltyfor the organization and also committing to make the international assignment successful. There are various support facilities which the headquarters should provide. Some of them are explained in this part of the report. The headquarters must provide the workers with support for the proper management of practical problems. This can be done by setting up of various policies which would encourage the expatriate workers to work in the culture which is totally new to him (Song, 2014). They must be provided with several opportunities which will enable them to settle and calm down. The organization’s culture and working environment must not scare or demotivate the expatriate workers. They should extend their helping hand in order to give the workers their home company’s environment. If any expatriate worker is deeply discouraged by the working environment, he/she must be provided with timely counselling and psychological therapies. It is to be taken care that the expatriate worker’s mental as well as physical health is not hampered by the working culture (Toh&Srinivas, 2012).
Expatriate employees or workers works under extreme pressure and at times, there is a possibility of threat regarding their lives. These things need to be taken care by the organizations. An employee is serving for the organization, therefore, the organization is responsible for his/her wellbeing. One of the major challenges in a workplace is the management’s discrimination and prejudice. It affects the team effectiveness and work productivity which leads to the company’s downfall. Negative behaviors and attitudes that include stereotyping, discrimination and prejudice can be a barrier to the organizational diversity as they harm working relationships and morale (Vaiman,Haslberger & Vance, 2015). Such attitudes should never be applied by the managers of any organization for hiring and terminating its employees. Expatriate employees can even take legal actions for this and complain against the manager and the organization as well. Moreover, the manager of any company has loads of responsibilities in this as it depends on his ability to figure out what is good for his/her organization based on the team work. While creating a successful and diversified workforce, the manager must be able to focus on his/her personal awareness. It is for both, the managers as well as the associates (Vaiman, Scullion&Collings, 2012).
Cultural Adjustment: A cross cultural or diverse workforce can be regarded as a reflection of changing marketplace and the world. It is responsible for bringing in high values to any organization. Respecting differences of each and every expatriate worker proves to be beneficial at the workplace. It creates competitiveness and increases the work productivity as well (Yeh & Hong, 2012). Managing cultural diversity benefits the associates by creating safe and fair environment where each and every employee has the access to opportunities as well as challenges. Proper management tools must be applied or implemented in a culturally diversified workplace to educate the employees about diversity and the issues related to it, including rules and regulations. Most of the workplaces comprise diverse cultures and thus the organizations must learn how and what to adapt in order to have a successful future (Richardson & McKenna, 2014).
To be very specific, people are no longer confined to a particular place and work in a known environment. They love experiencing different cultures and diversities. They are now becoming a part of a vast and worldwide economy which is competing within a framework. This is the reason why profit as well as non-profit organizations is becoming more and more diversified in order to stay in the competition. Expatriates’ performances are mediated by the adoption of cross cultural factors (Rosenbusch & Cseh, 2012). Managers of any organization must be aware of certain skills which are necessary for creating and maintaining a successful and diverse workforce. Firstly, they must take care that none of its employees are facing discrimination and stereotyping. Managers must be aware of all the consequences. They must be able to recognize their own cultural prejudices and biasness so that they can work on it. They must change the organization’s working procedure when it is necessary. Organizations must be aware of all the tactics to manage workplace diversity in order to have a successful and bright future. They must provide their employees with diversity trainings (Reiche, Mendenhall & Stahl, 2016).
A multinational company with a diverse collection of experiences and skills for example; cultural understanding, languages, ethnicity and more, is able to provide services to the customers globally. It helps in enhancing the company’s service range, which is beneficial for them. Moreover, a culturally diverse group of workforce, which feels free to communicate, can provide a wide range of experiences, points of view and skills (Nery-Kjerfve& McLean, 2012). It helps the organization to meet the needs of customers and business strategies more adequately. Multinational companies, which encourage diverse workforce, can be an inspiration to all of its associates and encourage them to perform to their best. More effective execution and implementation of business strategies is possible, which in turn results in profitability, return of investment and profit (McNulty, De Cieri & Hutchings, 2013).
Multinational organizations must have policies and strategies of adjusting or managing the culture. It refers to the multicultural adjustability, multicultural sensitivity, diplomacy, language ability, adaptability, positive attitude, maturity and emotional stability. The international human resource manager must take decisions on the following three major areas; specifying the criteria of the employee performance, identifying properly the appraisers and lastly, deciding the appraisals’ frequency (Min, Magnini & Singal, 2013). Therefore, cultural adjustability must be taken into consideration, in order to provide the expatriate employees with a home company environment, in order to encourage them on a long run. They must be provided with proper assistance to manage the virtual teams, which will in turn enhance their performances (Jehanzeb, Rasheed & Rasheed, 2013).
Conclusion
To conclude, the expatriate employees’ performance management is considered as a very crucial factor for any multinational organization. It is as major part of the multinational enterprise’s control system. The factors which outlines the expatriate performances include the compensation package, role and task, support of the headquarters, host’s environmental factors and lastly, the cultural adjustment. Performance management of the expatriate individuals lead to their appraisals in the international organizations. Majority of the multinational enterprises send their employees to the foreign countries in order to work in their branch offices or may be subsidiaries. The expatriate workers allow the parent or home company to control the foreign subsidiaries more closely. This also helps in improving the global coordination.
However, the expatriate workers are more paid than the local employees. Their salaries are higher along with various allowances and compensations. Other expenses, including house allowance, education for their children, spouse allowance and others are also taken care of. Hence, all these supports help the workers to cope up with the change in the working environment and motivates them to work better.
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