Literature ReviewofExpatriates Human Resources
Expatriates play critical roles in ensuring that MNCs are successful in their international operations. The concept of expatriate management has attracted a lot of attention to the International Human Resource Management (IHRM) and expatriate management literature. However, the management of expatriates remains under-researched compared to the management of other employees. According to Claus et al. (2011), most researchers of expatriate performance management have majorly focused on predictors of expatriate job performance and the link between employee adjustment and performance. However, there is still shortage of literature in the actual designing and formulation of performance appraisals, training and development of skills for expatriates to adjust to their new environment. Knowledge gaps are evident in many multinational corporations that have less support of their expatriates as compared to those in the domestic chains. Scholars have completed several empirical studies on exploring the existing expatriate performance management systems since the emergence of MNCs. The literature review discusses the major research findings, analyzes the research gaps and link theoretical explanations of expatriates job performance.
Contexts of Expatriates PM
In a study by Shih, Chiang and Kim (2005), the exploratory study on expatriate PM has been focused using three contextual factors. The analysis of the systems used in measuring and analyzing expatriates management are categorized into organization context, domestic context and international context. With variations in organizational approaches to expatriates performance management, there are still no recommended approaches on how the differences in the contextualization of expatriates PM can be bridged. In an attempt to address the issue of the detrimental contextualization strategies, Razafiarivony (2005) recommends on integration of strategy with expatriates performance management. The author utilizes Armstrong’s aspects of an integrated performance management for MNCs to first draft the need of sending out expatriates.
Degree of Internationalization of Firms and the Nature of Expatriate PM
In a research paper by Fee, McGrath-Champ and Yang (2011), multinational firms that seem to have a higher degree of internationalization tend to have a better approach to expatriate PM. The research focuses on 16 Australian multinational firms operating in China. From the findings, a unique trait is observed that can be used to understand expatriate performance management strategies to be used. The highly internationalized firms are illustrated in the study to apply the ‘hard’ elements of performance management towards their expatriates. The hard elements in this case include goal-setting and performance appraisals in response to expatriates PM. These highly internationalized firms, are poor at managing ‘soft’ control mechanisms such as training and mentoring for effective adjustment of expatriates. This illustrates that most of MNCs have less knowledge on balancing soft and hard components of EPM.
Design of Expatriate PM
The design used in expatriates PM has been reviewed to have an impact on work adjustment and the expatriate interaction (Bhatti, Battour& Ismail, 2013; Tahir & Egleston, 2019). One stream of theoretical frameworks to support need for a proper designing of performance appraisals and management is the institutional theory. Xu at al. (2004) has emphasized on isomorphism and advocates for a look at dual pressures from both host and home countries. Differences in governance environments have caused persisting issue of control and monitoring of expatriates performance between the host and home countries.
In the work of Tahir and Egleston (2019), the validation of Ozdemir and Cizel’s (2007) model, expatriate managers from 5 Anglo-Saxon countries, a few expatriates retained that they were ineffective since there was merely no management of the repatriation process. Under the circumstances of a less prepared repatriation process, families of received less considerations contributing to the expats failure to the new culture. The study, is however limited to the Anglo-Saxon countries making it difficult to establish whether the same results would be observed in other parts of the world. Looking at a different direction of the issue of design, a review by Maija (2016), investigating on how expatriate performance management activities are linked to work adjustment, the role of a cultural framework is investigated. The three main performance management for expatriate used are goal setting, performance appraisal and training as these are the most prevalent in understanding an expatriate’s adjustment to the new environment. From the interviews responses, most expatriates still view their performance management as still narrow due to limited organizational support. The research advocates for tailored and modified expatriate performance management elements to meet thecultural needs of expatriates.
Conflicts between Sending Company and Receiving Unit on Expatriate PM role
From literature, it is not clear on whether expatriates performance goals should be set by the sending company or the receiving company. As a result, the confusion by expatriates has affected the training and development of the expatriates in different circumstances. Questions on what is the resulting outcome if the receiving unit uses a different performance management system than the sending unit. In the study by Klapalová et al. (2014), centralization of decision making within various areas of business in MNCs affect expatriates due to division of roles between subsidiaries and headquarters. Expatriates’ representation on centralized decision making is controlled through either financial performance. In a study of some MNCs in Ghana by Sorko and Moeti-Lysson (2018), the authors acknowledge that expatriates literature has some gaps in analyzing the role of HNCs in giving support for expatriates. As a result, the performance management strategies have become unclear especially due to the cultural differences existing between the host country and the home countries. A more recent study by Kang and Shen (2015) has shown how South Korea has solved the context differences through an ethnocentric approach. The use of ethnocentric approach to manage performance appraisals for expatriates as an integrative approach has been acknowledged as more beneficial to the expatriates. In such a case, the host country is thus recommended to transfer their home appraisal practices to the subsidiaries to solve the issue of contextual differences (Kang & Shen, 2017: p.291). There is still a scarcity of research on this issue creating opportunities for future research on expatriates PM.
Cultural factors in expatriate PM
This area of expatriate research has been widely used. In a study by Singh and Mahmood (2017), the relationship and impact of emotional intelligence on job performance and the role of cultural adjustment between the two is investigated. Cultural adjustment has been centered at the drive performance management by host and home countries. Mujtaba et al. (2009) argues that even though expatriate cultural training has been present and widely used in expatriates performance management, researchers and specialists in this section have devoted less on evaluating the training’s effectiveness and better fitting expatriate managers to the local culture for work effectiveness.
Baum and Isidor (2017), argues that the role of cultural distance remains mixed in the cultural context creating a curvilinear relationship between cultural distance and expatriate adjustment. The research findings from their study portrays that cultural tightness negatively moderates the relationship between cultural distance and expatriate adjustment. As a result, there is need for integration of the study’s conceptual model with existing models of expatriate adjustment such as Takeuchi’s (2010) stakeholder model of expatriate adjustment to absorb the cultural shock in the course of training and performing appraisals to the expats. Knowledge transfer should further be enriched in skills and knowledge of firm’s employees between subsidiaries and headquarters to have a proper assessment of performance of expatriates.
Expatriate Performance Appraisal Management
Performance management in the repatriation process has been examined through objective setting, performance appraisal and feedback, continuous training, and career development. In the case study of Nokia Telecommunications Companyanalyzed by Mujtaba et al. (2009), performance evaluations and appraisal of their expatriates is linked to the provision of timely feedback to the persons performing the tasks. The ability to change, develop, and improve expats on-the-job performance on a regular basis is directed to IHRM professionals. Continuous preparation, development, and enabling employees to work abroad has been emphasized to rest on cultural training (Mujtaba et al., 2009; Luthans, 2007). The authors acknowledge that there is need for continuous addressing changes and developing on expatriates’ job performance on a regular basis. As a way of promotion expatriate appraisal management, Luthans recommends use of 360-degree feedback process to allow management officials from local and foreign companies to examine expatriates. The six dimensions that are needed include technical competence, management skills, interpersonal skills, efficacy, leadership effectiveness, and cultural fit. The method of feedback has further been supported in performance appraisal literature since it has been attributed to offer more than that of the traditional performance review. Linking expatriates performance in both home and host countries is therefore, recommended to have closure in the provided feedback (Kossek et al., 2017; Lee et al., 2017). With emotional intelligence as part of evaluating performance of expatriates, there is still no practical ways of mediating this factor into cultural adjustment. With most MNCs only applying pre-departure and post-departure trainings, the expatriate’s stay in their country of assignment has been neglected. Studies including one by Singh and Mahmood (2017), have limited their studies to only the expatriates who succeeded.
In conclusion, despite many scholars seeking on the relationship between culture adjustments in expatriates’ performance management, there are still knowledge gaps on how and why expatriate performance management practices impact culture distance in the premature return relationships. Also, the issue of harmonizing host country and home country expatriate PM approaches is still in need of more research for a better understanding of when the host country performance appraisal carries more weight than that of the home country and vice versa. By considering the uniqueness of expatriates’ assignments is important in reaching a fair expatriate performance management through appropriate trainings, coaching, and implementation of performance appraisals. Management of strategic intellectual capital and less on strategic financial and physical resources is the ultimate solution in enhancing performance of expatriates hence gaining a competitive advantage.Lastly, there is need for sensitizing HR managers on organization support through pre-departure and post-arrival training to reduce failure rates of expatriates as well as achieving the assignment goals at a less cost than frequent enrollment of new expatriates.
Baum, M & Isidor, R 2017,‘The influence of the cultural context on expatriate adjustment. In Expatriate Management (pp. 165-190). Palgrave Macmillan, London.
Bhatti, MA, Battour, MM, & Ismail, AR 2013,‘Expatriates adjustment and job performance’, International Journal of Productivity and Performance Management.
Claus, L Lungu, AP & Bhattacharjee, S 2011,‘The effects of individual, organizational and societal variables on the job performance of expatriate managers’, International Journal of Management, vol. 28, no. 1, pp.249.
Fee, A McGrath‐Champ, S & Yang, X 2011,‘Expatriate performance management and firm internationalization: Australian multinationals in China’, Asia Pacific Journal of Human Resources, vol. 49, no.3, pp.365-384.
Kang, H & Shen, J 2016,‘International performance appraisal practices and approaches of South Korean MNEs in China’, The International Journal of Human Resource Management, vol. 27, no. 3, pp.291-310.
Klapalová, A Králová, M &Pirozek, P 2014, Expatriates in MNCs Corporate Governance and Management - Centralization, Formalization and Financial Performance: The Case of the Czech Republic, Academic Conferences International Limited, Kidmore End.
Kossek, EE Huang, JL Piszczek, MM Fleenor, JW & Ruderman, M 2017, ‘Rating expatriate leader effectiveness in multisource feedback systems: Cultural distance and hierarchical effects’, Human Resource Management, vol. 56, no.1, pp.151-172.
Lee, CH Hung, CC Chien, CS Zhuang, WL & Hsu, CYY 2017,‘Regulatory foci and expatriate adjustment. Personnel Review, vol.46, no. 3, pp. 512-525.
Mujtaba, BG Fisher, H Friis, AS Johnson, N Kirkwood, L & Flores, G 2009,‘Expatriate Performance Appraisal Management: The Use Of A 360-Degree Feedback At Nokia Telecommunications’, Journal of Business Case Studies (JBCS), vol. 5, no.1, pp.45-56.
Ramalu, SS Rose, RC Uli, J & Kumar, N 2012, ‘Cultural Intelligence and Expatriate Performance in Global Assignment: The Mediating Role of Adjustment’, International Journal of Business and Society, vol. 13, no. 1, pp. 19-32.
Tahir, R & Egleston, D 2019,‘Expatriation management process’, Journal of Workplace Learning,vol. 31, no.8, pp.520. doi: 10.1108/JWL-03-2019-0036
Shih, HA Chiang, YH & Kim, IS 2005,‘Expatriate performance management from MNEs of different national origins’, International Journal of Manpower, vol.26, no.2, pp. 157-176.
Singh, JSK & Mahmood, NHN2017, ‘Emotional Intelligence and Expatriate Job Performance in the ICT Sector: The Mediating Role of Cultural Adjustment, Global Business and Management Research, vol. 9, no. 1, pp. 230-243.
Sokro, E &Moeti-Lysson, J 2018,‘The role of host country nationals' support in expatriate adjustment and assignment success: A case of ghana’, African Journal of Business and Economic Research, vol. 13, no.3, pp. 95-113. doi:http://dx.doi.org/10.31920/1750-4562/2018/v13n3a5
Xu, D Pan Y & Beamish, P 2004, ‘The effect of regulatory and normative distances on MNE ownership and expatriate strategies’, Management International Review, vol.44, no.3, pp. 285-307.