11.4 Performance appraisal
Training and development also involve performance appraisal. Managers at all levels use appraisal to communicate expectations and to help subordinates improve personal deficiencies. However, in international business performance appraisal has problems not usually encountered in the domestic company. These problems fall generally into the category of bias. Let's see how bias arises because of the expatriate manager's location.
Expatriate managers are assessed by their superiors in both the host country and the home country. From these different perspectives:
- Host country assessors may be biased by their cultural frame of reference and set of expectations.
- Home country assessors may be biased by their distance from the host country and by their own lack of experience in the host country. Their cultural frame of reference may be the same as that of the person being assessed, but their expectations of that person may or may not be realistic. Home country assessors rely on facts and figures in making their assessment: facts and figures do not take account of the 'soft' variables associated with working in another culture.
It is usually very difficult for an expatriate manager to counter an adverse performance appraisal arising from these biases. For this reason, expatriates often see little benefit for their careers in overseas postings. Companies which are aware of this focus their performance evaluation on factors which are within the scope of control of the person being evaluated. This in itself presents difficulties because there are many types of decisions over which expatriate managers have little control.
Activity 11.2
Make a list of three types of decisions over which managers of overseas subsidiaries may have little or no control. Explain why the subsidiary manager may not have control.
Note: This is not as difficult a task as you may think. Sit back, close your eyes, imagine you are the CEO of an Australian MNE in Thailand . The MNE has subsidiaries also in Malaysia , Indonesia and the Philippines . Think about the activities of the whole corporation of which you are only one element. What activities are controlled from headquarters in Sydney which affect you, but over which you have no control?
Now read from Hill (2005) on performance appraisal before proceeding to the issue of compensation which is usually tied to performance appraisal.
In your text
Hill 2005, Chapter 18, pp. 631-632.
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