Chapter 12

Question 1

Employee Performance Appraisal

Answer 1

Core Questions: Should multinational firms
Rely on a standardized set of policies, procedures, and practices when managing and appraising employee feedback worldwide?
Rely on a dispersed set of systems aligned with local business and management practices in the places where it does business?
Take a blended performance appraisal and management approach to keep local practices intact?

Question 2

Performance Evaluation Issues

Answer 2

Variation among firms in their approach to evaluation.
Cultural values (frames of reference) affecting the focus of individual expatriate performance evaluation.
Tailoring performance appraisal practices to the local context.
Preserving corporate values deemed important for all employees.
Observing expatriates over a long period of time.

Question 3

Benefits of overseas assignments: Expatriate Managers

Answer 3

Gained additional operational business skills and a global perspective their industry and markets.
Increased their ability to manage cultural differences.
Improved their understanding of international operations.
Became more open minded about different problem-solving methods.
Improved their ability to more flexibly approach human resource issues.

Question 4

Evaluation of expatriates

Answer 4

Task variables, personal characteristics, environmental variables

Question 5

Guidelines for expatriates evaluation

Answer 5

Rate the assignment’s difficulty
Language adjustment difficulty.
Local economic and political stability.
Evaluation by host-country managers
Evaluation by expatriates with similar experience
Other considerations:
Communicate performance criteria
Explain the performance appraisal process
Train evaluators and expatriates about frames of reference and cultural differences
Emphasize reasons for more frequent evaluations

Question 6

Evaluating foreign-born employees

Answer 6

Evaluation Issues
The impact and influence of local cultural values and context on effective delivery of feedback.
Conflicts that occur when an implicit and informal culture meets an explicit and formal performance evaluation system.
Culture can shape how foreign employees react to performance feedback and the various types of evaluation review delivery mechanisms.

Question 7

Crafting performance feedback

Answer 7

Give feedback through a third party.
Communicate to the whole group.
Change the form of feedback.
Simplify the feedback.
Avoid slang.

Question 8

Compensation of international employees:Goals of MNE compensation systems -

Answer 8

To attract and retain the best people to staff positions worldwide.
To make it as easy as possible to transfer people to the various locations.
To be consistent and fair toward all employees wherever they are.
To maintain compensation levels that match well with competitors while also holding down costs.

Question 9

Exchange model of compensation

Answer 9

Employees provide effort and output while receiving wages and benefits in return.

Question 10

Equity norm

Answer 10

The notion that those who contribute more on the job are deserving of greater compensation.

Question 11

alternative compensation views

Answer 11

Entitlement and obligation are important factors affecting how employees view the compensation they receive from employers.

Question 12

Challenges of expatriate compensations

Answer 12

Cross-national legal/regulatory differences in compensation.
Costs for maintaining expatriates on location.
Expatriate employee comparisons with other similarly situated expatriates of other firms.

Question 13

Effective expatriate compensation plans

Answer 13

Some form of incentive for an employee to accept an expatriate assignment.
Maintenance of a reasonable standard of living.
Provisions to support the needs of any trailing family members.
Provisions to successfully repatriate the employee back into the home country after the foreign assignment concludes.

Question 14

Questions affecrting expatriates compensation

Answer 14

How long will the assignment last?
Who is the expatriate?
Why is the expatriate being sent?
What country is the expatriate departing from and going to?
Who will the expatriate be comparing himself or herself against?
Will the benefits of this assignment justify the cost?

Question 15

The ad hoc compensation method

Answer 15

The expatriate negotiates with his or her firm for covering the costs inherent in a foreign assignment.

Question 16

Ad Hoc Method Drawbacks

Answer 16

The potential for unequal treatment of expatriates if some expats negotiate better deals than others.
An inability to systematically track expatriate compensation packages.
Inadequate development of country-specific knowledge on the part of both the firm and the employee.

Question 17

The Localization Method

Answer 17

Involves paying the expatriate essentially the same as local nationals in similar positions.
Is useful when expatriates want to extend their stay in particular locations or are interested in being permanent expatriates.
Is rarely used in its entirety—adjustments are often made to base pay, allowances, and retirement packages.

Question 18

The Balance Sheet (Build-Up) Method

Answer 18

Is based on the belief that expatriates should not suffer a financial loss in an international assignment.
Attempts to provide expatriates with purchasing-power parity in the foreign location as they would in their home country.
Maintains base and merit pays, and considers foreign-service premiums, hardship differentials, housing costs, and danger pay

Question 19

The Balance Sheet Approach

Answer 19

Tax Equalization
Attempts to tie expatriates’ tax burdens to their home countries regardless of where they are posted and simplify their reporting requirements.
Entails the firm paying the difference (if any) between their expatriates’ host-country tax obligation and their home-country tax obligation.
Cost-of-Living Allowance (Goods and Services Differential)
Helps offset higher living costs abroad by giving expatriates the same purchasing power enjoyed at home.