support and supervision of those on international assignment (Harvey, 1997;
Janssens, 1994). Opportunities for thorough headquarters performance reviews
may also be limited by distance and time-zone differentials (Fenwick, 2000).
Failure to provide such feedback might violate the psychological contract
between employees and the MNC, in addition to preventing corrective action
in the event of ineffective performance (Stiles et al., 1997). These problems
highlight the challenges for international performance management in terms
of being able to deliver timely, relevant, and therefore effective, feedback.
Providing opportunities for improvement through
appraisal feedback and training and developmentAs previously mentioned, performance appraisal feedback has a developmental
purpose. Much expatriate training and development appears to have been
focused on developing expatriates’ ability to adjust to the new culture.
Certainly, cross-cultural adjustment has been shown to influence performance
(see for example, Black et al., 1992; Tung, 1982). However, providing opportu-
nities for improvement through appraisal feedback and training and develop-
ment is an ongoing performance management activity aimed at continuous
improvement and socialization to desired organizational practices. This is par-
ticularly relevant when MNC policies and practices change and re-socialization
is required (Fenwick et al., 1999).
A significant performance management issue in international assignments
is that of conflicting expatriate loyalty to the subsidiary and headquarters
(Black et al., 1992). While this may also be identified as an issue between divi-
sions and headquarters of a large domestic organization, again the broader per-
spective, scope and activities required, and greater risk exposure in the
international environment, differentiate domestic training and development
from that in MNCs. Training and development may also facilitate the develop-
ment of dual allegiance in expatriates, thus ensuring balanced bonds with both
headquarters and subsidiary (Black et al., 1992).
Links between results and rewardsStrategic HRM has emphasized the need to link performance to compensation,
through monetary and non-monetary rewards (Kessler and Purcell, 1995). The
underlying assumption has been that individuals can be motivated to perform
more effectively and efficiently if there is a direct link between their effort and
reward. In MNCs, management of links between performance and rewards is
complex, due to the specialized knowledge required of multiple employment
and legal environments in order to meet the objectives of international com-
pensation outlined earlier in this chapter.
International Compensation and Performance Management 321