XYZ Inc. is an East Africa company that develops utility-scale solar projects. The company builds, owns, and develops cost-effective, green energy projects. XYZ has been pushing the frontiers of solar and storage solutions since 2008. The company seeks to create a positive impact across energy, the environment, and the African community. Expatriation is a key dimension of XYZ Inc. and its performance. This paper explores the variables that XYZ Inc. must address in an expatriate performance management system and the elements within each variable.
Expatriate Performance Management
An expatriate performance management system is a critical element of strategic global human resource management. The system provides a system for maintaining and enhancing performance, facilitates employees’ professional development, and ensures a coherent management philosophy (DeNisi, 2021). There are five variables that XYZ Inc. should address in its expatriate performance management system. The five variables include the compensation package, the task, headquarters’ support, the environment in which performance occurs, and cultural adjustment (Dowling, 2017). The discussion below explores the elements within each of the five variables.
Variables That Should Be Addressed In An Expatriate Performance Management System.
The Compensation Package
Remuneration and reward are crucial to the performance equation. According to Dowling (2017), the perceived financial benefits coupled with the progression potential related to an overseas assignment are crucial motivational factors for expatriates accepting a posting. If the expatriate does not realize the expectations during the assignment, the level of motivation will likely decrease, consequently affecting performance negatively (Dowling, 2017). Thus, the compensation package is a crucial variable in the expatriate performance management system of XYZ Inc.
Multinational corporations assign expatriates to foreign operations to fulfill specific tasks. There are four basic types of international assignments: (1) technical assignments, (2) developmental assignments, (3) strategic assignments, and (4) functional assignments (Dowling, 2017). Dowling elucidates that task variables are more under a multinational’s control than environmental factors. As a result of the relative control, multinational corporations can better assess and more easily change task variables depending on the level of position and nature of the task assignment. It is imperative that along with the specifications of the task, multinational organizations determine the role accompanying each task position. A challenge affecting task variables is that it is defined in one country but performed in another one (Dowling, 2017). Notably, the cultural norms in the United States may not be the same as those of an emerging economy such as South Africa. Thus, XYZ Inc. must consider the role accompanying each task position.
Expatriate assignments are different from domestic relocations as they involve the transfer of an individual into a foreign environment. The expatriates, therefore, have to work outside their normal cultural comfort zones. Whereas an individual’s primary motivation for accepting the assignment may be finance or career-oriented, this is often mixed with a genuine feeling of commitment and loyalty to the sending organization (Dowling, 2017). According to Dowling, the process of adjustment to a foreign environment usually produces a range of emotional and psychological reactions encountered over the expatriate’s stay in the host country. Hence, the level of headquarters’ support provided to the expatriate and the family is a crucial performance variable.
The Environment in Which Performance Occurs
Whereas the environment impacts any job, it becomes primarily important when it comes to expatriate management. Dowling (2017) elucidates that due to the differing societal, legal, economic, technical, and physical demands associated with the international context, the host environment can prove to be a major determinant of expatriate performance. Thus, multinational organizations should place expatriate performance within its international and organizational context. The above-identified five constraints (societal, legal, economic, technical, and physical demands) are important considerations for expatriate performance management. Another important aspect associated with the environment in which performance occurs is the type of operation that the expatriate is assigned. For instance, an expatriate overseeing the establishment of a new plant in an emerging market will face different constraints and challenges from an expatriate posted into an established operation (Dowling, 2017). Thus, XYZ Inc. must emphasize streamlining the environment in which performance occurs to provide a conducive working environment that will boost performance.
The Cultural Adjustment
Lastly, the process entailing cultural adjustment may be a crucial determinant of expatriate job performance. Expatriates and their families must face some difficulties adjusting to the new environment. Consequently, this affects their performance. Notably, adjustment to a foreign culture is usually multifaceted and people vary in terms of their coping behaviors and reactions (Dowling, 2017). As a result, determining the relevance of adjustment to a new environment when evaluating expatriate job performance may prove problematic for XYZ Inc.
In conclusion, it is imperative that XYZ Inc. address above discussed five variables (societal, legal, economic, technical, and physical demands) in its expatriate performance management system. Notably, the five variables are not mutually exclusive. However, they interact in a fashion that has crucial implications for the appraisal of XYZ employees’ performance.