Assignments and work duties in the global environment have grown enormously since different countries and organizations are encouraging and promoting development all over the world. Employment world over has been very integrated and this implies that many organizations operate in such a way that expatriates are called in to undertake various duties that probably native or the locals cannot be able to undertake. Over some years now, international assignments have been increasingly used for a number of reasons such as staff shortage, expert management and development of management talent.
In any international job posting there are critical issues that need to be managed well in advance and throughout the expatriation. For instance in the Australian business expatriation is a reality and can possibly stay for a long period world over. International HR journal states that changes that are being seen in the past include greater amount of overseas business travels as many organizations are seeking new markets for their solutions and products (2004). The true nature of globalization of many organizations ensure the establishment of offices in other countries, including technological advances to enhance communication as well as develop the main infrastructure in a number of low rated countries and this has brought about major impact in terms if transformation to cosmopolitanism in many cities in the world (Adler, 1997).
An expatriate is an employee who has been assigned responsibility in a business or government organization and is normally sent to another country away from his or her native country in order to accomplish a job for a specific timeframe (Harris, 2007). It has been noted that in order to effectively compete, organizations have realized the necessity to employ the expatriate in a variety of international assignments. This has been due to the effectiveness of technology transfer and knowledge contribution to local staff that can enhance the organization’s performance.
Organization and Management Evolution
It has been investigated that fewer and fewer hardships currently exist to warrant the job posting and expatriate packages differences. Within any organization and during the expatriation period, an organization undergoes three distinct phases as Allard states (1996). These three include:
- Launch: This is the initialization stage where the company just begins to move into a new market. This is a very important point of any establishment since it requires an expat who has a strong knowledge of the site location, knows how things are to be done, has the ability to coordinate and control development or improvement as well as effectively communicating the organizational vision even within an uncertain business environment. It is at this point that the management must set their strategies right on the human asset needs as well as the compensation policies for the pioneering expatriates. At this stage it is recommended that you do not set all plans fitting since the site off and it is not really clear what the long term plan is.
- Growth Stage: According to Allard, this stage involves the transfer of knowledge to the host country or national or other staff as required. This is very important since at the growth stage all efforts of the employees whether expatriates or local is required. In the event that any error occurs or emergency that would mean the absence of the expatriate then due to well enhanced tech-transfer, then the organizations does not fall or loss but another employee can take up the duties of the expatriate. Allard states that “many organizations are willing to bear the extra cost in the launch stage and during the growth stage then a company would prefer a national staff to run the jobs. The management must at this stage ensure that the relation with the expatriate is well nurtured as not to hinder the performance of the technology transfer (2004).
- Established Presence: This is the stage after growth and that the organization has established well and is on the road to maturity. When the employees are on assignment at this stage, usually, these people have specific skills needed at the time. At this point the marketing plans of the organization have been set and the company has reached a point where the local offices can operate autonomously. At this stage the expatriate can only come in to fill certain specific advanced or very technical short term duties.
These three phases simply imply that the management of the expatriates is a very important affair that must be well handled by the management in order to bring about productivity and improvement in all the above stages.
In the current ever increasing market, not very many organizations are capable of solely operating within the restricted confines of their countries or a particular geographic location. According to Harris, the “workplace is becoming increasingly global and such globalization presents a number of challenges for the ways in which organizations select, develop, and manage their human resources.” (2007)
Tian gives a case of local Chinese firm placing very great importance on the expatriate they have working in foreign countries. Despite the trend towards local staffing, many of the organizations and corporations in China continue to keep a number of expatriate managers as they play a role that local Chinese manager cannot do (Tian, 2007). An expatriate manager is considered as a representative of their corporate culture and management know-how. this implies that expatriate managers carry with them the Transnational Corporation’s corporate culture and management tactics this has helped to avoid the formation of small colonies within an organization in the staffing localization process and hence play a vital role in the integration of both or more that one site of the same TNC in different countries (Kreitner, 2003).
Issues in Expatriate Management
It is very important to note that certain expatriates are deployed to learn while others to teach but normally most if not all end up doing both duties. According to the International HR journal, there is no single model that suits all organizations. There is therefore a number of issue that are pertinent to expatriate employee management that cuts across cultures and political spheres and these include administrative issues, personal issues and work related operations. A few of these responsibilities that need critical address include:
Management of costs of the entire assignment;
Expatriates are normally called in to handle certain training duties or technical jobs in other home countries. According to the International HR Journal, some of these assignments require travelling, technical researches, studies on relevant aspects of the assignment and so on. For instance Heather Duncan who has worked for HP for about 12 years says that HP does produce a cost projection for each international assignment as well and this cost is allocated to the home or host country. There is flexibility in the needs of each expatriate and their particular circumstances and hence things like pay of school fees could be probably included in order that another item in the package budget reduced. It is suggested that most companies in the past which employed an expatriate work force automatically paid fees. This is in contrast with Toyota Motor Corporation in Australia has currently standardized all its international relocation packages. This means that there is “no disparity between employees on the same level and that the policy is available, ‘we use data from Mercer to determine the expatriate incentives and the quality of living incentive to produce standardized packages and ensure a transparent process’” (2004).
Risk minimization in terms of security and healthcare in some countries;
Many multinational companies currently offer evacuation facilities for most of expatiate in times of epidemics. This implies that there are possibilities of risks in the respective countries of assignment and so an organization must review its risk minimization policies. In the SARS epidemic, the international HR journal records that many countries having MNCs had to review their risks in such situations and consider the possibility of getting medical check-ups to the employees every week. Heather Scott of KPMG says that some expatriate sent their families away shortly and many worked from home due to any possible risks. In times of risk it is important that the organization set up an emergency number or call center where the expatriates can call in and protection or evacuation plans activated immediately or with the urgency that is required (2004). The effect of any risks or health or security can be very detrimental to any Multinational Corporation. This is the more a reason why the expatriate working in politically unstable areas must be accorded due mitigation options in order that they are at the peak performance levels and that they can always remain product. This could be very expensive but in the long run helpful to the organization.
Linking career development with international assignments;
There are moments when poor performance is linked to career development inadequacy but also certain cultural and environmental variable are a contributory to poor performance. Currently instead of shipping poor performers out of the company, they are moved to other countries. International HR journal states that a career development planning is often a solution where after evaluation of an expatriate’s performance, a training and improvement session can be organized and when they are capable of working in a given host country, then it is important to have them localized after some time.
Career disruption for the expatriate’s partner;
Moving expatriate employees to other host countries can be very involving since they are most likely to have a family or in some relationship. Moving them requires that a manger considers the disruptions this would cause to their partners and the families. Since a number of families are dual income and this means that one of the incomes has to probably be sacrificed so as to move with the expatriate to another country. For instance a solution HP has come up with is to consider this fact when negotiating the expatriate’s remuneration.
The car manufacturing giant, Toyota sends a lot of expatriate to Japan and says that getting a working visa for the partner in many countries is generally difficult. It is noted that productivity is usually realized when the expatriate is in a position to access their partners or family or generally know their welfare (Littlewood, 1985). In the case of Toyota, it will fund the application for a visa as well as provide resume and job hunting services for a working partner.
Continuing to operate legally within changing laws across the world; How much of the expatriate administration management should be done in-house.
Expatiate Performance Management
In the work context, an expatriate has been brought on board to perform not only in the technical aspects but also to operate within an entirely new context with unfamiliar individuals and new cultural requirements (Harris, 2007). The success of these expatriates requires the ability to perform their job while simultaneously adapting to the new requirements both in and outside of the work context. Failed international assignments can be very costly to any organization and therefore every company that is venturing in international businesses must place a lot of emphasis on the importance of selecting appropriate staff for these particular assignments (Shrmindia, n.d). The solution to expatriate job failures is the continued detailed assessment of his or her performance as well as appraisal of the entire operation as a whole. The management must ensure that timing of performance and criteria of doing so, raises and bonuses should be discussed and an agreement reached before employees are selected and placed on these assignments.
Besides this an expatriate’s performance can be determined by considering the impact of the following variables and their interrelationships (Dowling, Festing & Engle, 2008):
- Compensation package
- Task or assignment variables and the role of the expatriate
- Headquarters’ support
- The environment in which performance occurs such as subsidiary or the host infrastructure as well as facilities available
- Cultural adjustment of the particular expat and the accompanying family
The above variable as suggested by Dowling, Festing and Engle, and the basis upon which the manager explores the nature of the international assignment, how performance is managed, the criteria for the assessment and other elements that comprise an effective performance management system (2008).
In order to reduce expatriate failure rates, Tian states that there is need for the management to select the right candidates for the particular position and screen out inappropriate candidates (2007). The reason for the failures in most settings are always said to be the inability to adjust to the working and living environments overseas and hence the selection should focus on the ability of the candidate to live and manage operations in a different cultural setting (Berry, 1980). This could be very difficult since at times getting an expatriate to be comfortable with a given location is hard but that is the best person for the job.
The management must appreciate the fact that though appraising the performance of an expatriate is just as needful as local employee each assignment of international crediting is different and unique. According to Shrmindia, a general rule in appraising expatriate employees is that each site should use a different appraisal system and therefore managers or employers should not use the appraisal system for domestic employees and try modifying it for use on the expatriate since a number of variables such as task criteria, environment and personality traits need to be understood and taken into consideration (2009).
Armstrong and Stephens record that businesses are expanding globally and they tend to send an increasing number of staff overseas as expatriates. The duties for the expatriates may be short or long terms in order to teach, train, provide guidance as well as learn. Their management presents a number of problems such as persuading staff to work in unpleasant or volatile environments, and convincing them that an overseas assignment is a good career if not the best idea (2005). Remuneration for expatriates involves pay, benefits and allowances. Every employee may not be aware of the remuneration policies of rates for various countries or in particular the country they have been deployed to take up an assignment. The expatriate remuneration policies according to Armstrong and Stephens may be based on a number of propositions including (2005):
- Expatriates should be neither better nor worse off due to working in another country
- Native country living standards should be maintained as much as possible
- Higher responsibility should be reflected in the salary paid as such home salary
- The remuneration package should be competitive
- In developing the remuneration package, special attention must be paid to ensure that proper consideration to conditions under which the expatriate employee will be working abroad
- Equity must be maintained with regard to remuneration as much as possible among different countries as it is possible to have a number of expatriates from various countries for various reasons.
- Consideration has to bear in mind the impact of expatriate being paid more than the national staff who are working on the same job with the expatriate
- Management must ensure the cost effectiveness of the pay package by indication of the justification of pay to expatriates
There are four ways that a management can calculate the expatriate’s pay and these include: home country, host country, selected country and hybrid (Armstrong & Stephens, 2005). It is suggested that since an expatriate is supposed to bring improvement and value to the particular assignment he or she has been called to work on, then using the home country approach is most appropriate. This according to Armstrong and Stephens is said to demonstrate that the expatriate does not loss by going for a job abroad. This approach entails determining the salary that would be paid in the home country as well as net of income and national insurance contributions (Dowling, Welch & Schuler, 1999). After this calculate the home country spendable income on day-to-day expenses and apply the cost of living index to the host country spendable income in order to get the equivalent purchasing power in the host country. This will help determine the measure of expenditure levels in the host country. Lastly, add the extra allowance for the fact that they are working abroad. It is important that the management to balance the above pay with that of the host country and select another country pay method in order to get a hybrid payment approach that will both motivate and allow for a conducive working environment for all the expatriates as well as the host employees working on the same job. Armstrong and Stephens suggest that benefits such as cars, cost of educating children, special health home leave and rest as well as recuperation leave should be provided if the expatriate is working in a well known hardship area (2005).
Griffin and Moorhead state that expatriate employee management is a very important aspect of any multinational corporation. This is so because a large number of companies develop their sales and marketing strategies and meet targets when diversification of markets is undertaken that is well developed and enhanced through expatriation (2009). Harris records that there are five very important components to effective people management and these are clearly applicable to the management f expatriates; first, select the right people who can take up the right responsibilities and be productive. Secondly, train the people to be successful, and then appraise their performance so that additional guidance and appropriate training can be offered. Fourth, there is need to reward the performance and the fifth thing is developing the people so that they may progress along their desired assignment in order to help the expatriates advance through their career by providing then with the necessary training as well as support important to success through the assignment and after (Yan, Zhu & Hall, 2002). It is important to have the expatriate competently repatriated returning to their home countries and organizational culture and putting them in a state where they are in a capable state to make productivity out of the experience they have acquired.