Issues such as who conducts performance appraisals, how and based on
what data, remain high on the research agenda. This has been reflected in
recent developments such as 360-degree feedback and competency-based
appraisal techniques (Albright and Levy, 1995). Within the MNC, such endur-
ing issues may be intensified. For example, the extent to which performance
appraisal and feedback is interpreted with distrust or as an insult differs across
cultures (Rubienska and Bovaird, 1999). Bernthal (1996) compared traditional
and progressive USA and Pacific Rim appraisal practices. The study did not
include popular USA and Australian approaches such as Management by
Objectives and multiple-rater, for example 360-degree, appraisals. However, it
does conclude that managers from different cultures vary as to what perfor-
mance appraisal practices they find most effective.
It seems that regardless of the impact of national culture on the process,
performance appraisal remains problematic. In particular, recent research has
highlighted that common to the ten countries studied was the failure of per-
formance appraisal to fulfil its development purpose (Milliman et al., 2002).
The findings are further evidence of the need for performance appraisal to be
embedded in a performance management system, such as the integrated
approach outlined in this chapter, rather than as a stand-alone international
HRM function.
The preceding discussion has considered international compensation and
performance management in the context of the MNC and international staff
transfers. However, not all international work occurring in MNCs involves phys-
ical relocation to another country. By way of recognizing the evolving nature of
international HRM, and the increasingly complex work environment in MNCs,
the final part of this chapter explores implications for international compensa-
tion and performance management in virtual international assignments.
4 VIRTUAL INTERNATIONAL ASSIGNMENTS
International work in MNCs is changing. Recent research has identified trends
to a range of non-standard international assignments (Fenwick, forthcoming,
2003; PricewaterhouseCoopers, 2000). For example, MNCs surveyed in
Australia and in Europe revealed at least four types of international assignment
in use. These are: ‘long-term’ or ‘expatriate assignment’, ‘short-term assign-
ment’, ‘international-commuter’, and ‘frequent-flyer’ assignments. For the sur-
vey, long-term assignments were defined as those when the employee and
family move to the host country for a specified period of time, usually over one
year, also known as an expatriate assignment. Short-term assignments were
defined as those with a specified duration, usually less than one year, and on
which the family may accompany the employee. International-commuter
assignments were defined as ones where the employee commutes from home
International Compensation and Performance Management 325