An Empirical Study of Expatriate Expectations in IT ... - Semantic Scholar

© The Journal Contemporary Management Research 2011, Vol.5, No. 2, 68-99.

An Empirical Study of Expatriate Expectations in IT/ITES Sector from Human Resource Management Perspective Vrinda Sood Ranbaxy Laboratories Limited, Gurgaon

Sameer S Pingle Nirma University, Ahmedabad

ABSTRACT Human Resource professionals at multinational organizations need to integrate HR policies across all its centres in diverse countries so that overall organizational goals can be accomplished. The employees of IT/ ITES sector in India are constantly interacting and traveling abroad for work related purposes. In this scenario, the role of HR becomes all the more challenging. The current study aims to understand the challenges and expectations of theses expatriates from the HR system in terms of policies, procedures and framework. Based on a questionnaire that was developed from the literature review, responses from 55 expatriate were taken from the IT/ITES sector. It was found that in order to be selected for the international assignment, a good job performance is a prerequisite. In most cases the home country manager did the appraisal review, in few cases, in consultation with the foreign one. Keywords: Expatriate, IT/ITES, HR Policies, Culture, Performance Management

INTRODUCTION International human resource management (IHRM) is the process of procuring, allocating, and effectively utilising human resources in a multinational corporation. HR professionals at multinational organizations need to integrate HR policies across all its centres in diverse countries so that overall organizational goals can be accomplished. On the other hand, HRs are required to be flexible to permit substantial variances in the type of HR policies and practices that are effective in different business and cultural surroundings. The problem of balancing integration (control and coordination from HQ) and differentiation (flexibility in policies and practices at the local subsidiary level) have been acknowledged as major dilemmas facing HR and other functional

managers in global corporations. When compared, domestic HRM and IHRM, IHRM encompasses more functions, has more varied functions, involves persistently changing perspectives, requires more involvement in employees’ personal lives, is influenced by more external sources, and involves a greater level of risk than typical domestic HRM. The number and variety of IHRM activities are unnerving. International HR managers must deal with issues as varied as international taxation; international relocation and orientation; various other administrative services for expatriates; selecting, training and appraising local and international employees; and managing relations with host governments in a number of countries around the world. The HRs deal with employee groups that have different cultural backgrounds and must coordinate procedures to manage expatriates from

Sameer and Vrinda Sood

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the firm’s home country (parent country nationals, PNCs), host-country nationals (HCNs), as well as third country nationals (TCNs) in subsidiaries around the world. About the IT/ ITES Sector The Indian information technology (IT) industry has played a key role in putting India on the global map. Thanks to the success of the IT industry, India is now a power to reckon with. According to the annual report 2009-10, prepared by the Department of Information Technology (DIT), the IT-BPO industry is expected to garner a revenue aggregate of US$ 73.1 billion in 2009-10 as compared to US$ 69.4 billion in 2008-09, growing at a rate of over 5 per cent. The report predicts that the Indian IT-BPO revenues may reach US$ 225 billion in 2020. The origin of IT industry in India can be traced to 1974, when the mainframe manufacturer, Burroughs, asked its India sales agent, TATA Consultancy Services (TCS), to export programmers for installing system software for a U.S. client. India's growing stature in the information age enabled it to form close ties with both the United States of America and the European Union. However, the recent global financial crises have deeply impacted the Indian IT companies as well as global companies. As a result hiring had dropped sharply and employees were looking at different sectors like the financial service, telecommunications, and manufacturing industries, which have also been growing phenomenally over the last few years. OBJECTIVES OF THE RESEARCH Ÿ To analyse the HR related policies/ frameworks that differentiate domestic and International HRM

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Ÿ To study important factors influencing human resource practices in multinational firms. Ÿ To find out important factors associated with Expatriate failures/ success Ÿ To understand and analyse important factors influencing repatriation process Ÿ To analyse and suggest improvements towards having successful expatriation in IT/ITES sector in India LITERATURE REVIEW Dowling (1999), in his book on IHRM states that there are two major factors due to which international assignments are different from domestic ones. The most important reason is the complexity associated with international assignments. It involves more HR initiatives, need for a broader perspective, more involvement in employees’ personal lives risk exposure (threat from terrorism), external influences like political, economic, etc. The other factors that affect moderately are cultural environment, industry in which the organization is in, complexity involved in operating in different countries, attitudes of senior management and extent of reliance of multinational on its home country. Dowling (1999), there after talks about international dimensions of major HR activities like recruitment at selection, training and development, performance management, repatriation, compensation and other major HR policies concerned with International HRM. He talks about these issues with respect to the impact on various types of employees like HCNs, TCNs & PCNs. With respect to recruitment and selection, Dowling (1999) talks about how the orientation of being ethnocentric, geocentric, polycentric and region-centric affects the

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The Journal - Contemporary Management Research

staffing strategies of the companies and how each may lead to expatriate failures. Dowling (1999) also talks about the costs associated with expatriate failures which include both direct (airfare etc.) and indirect (loss of goodwill) cost. Further on Dowling (1999) discusses the factors that affect expatriate selection that is, cross cultural suitability, family requirements, MNE requirements, language, country cultural requirements and technical stability. Desatnick and Bennett (1978) conducted a detailed case study of US MNCs and concluded: ‘The primary causes of failure in multinational ventures stems from lack of understanding of the essential differences in managing human resources, at all levels, in foreign environments. Certain management philosophies have proved to be successful in domestic environment: their application in the foreign environment often leads to frustration, failure and underachievement. These human considerations are important as the financial and marketing criteria upon which so many decisions to undertake multinational ventures depend.’ Cross-cultural encounters in the expatriate experience are essentially social encounters, where culture shapes an individual’s emotional expressions, experiences, and management in a social setting, and differences in culture lead to differences in accept able forms of emotional behaviour (White, 1993). This means that emotions are a crucial factor in cross-cultural interactions and the need to develop both cross-cultural and emotional skills in expatriates is greatest when there is a large cultural gap between the home and host nations. The selection of expatriates has long been a focus of MNC human resource management. Early studies attempted to identify personal

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characteristics of expatriates as the selection criteria for their overseas assignment (Caligiuri, 2000; Cunningham et al., 1996; Fish, 1999; Gregersen et al., 1998; Harvey and Novicevic, 2001; Tung, 1981). According to Stone (1991), ten selection criteria were key for expatriates: (1) Ability to adapt; (2) Technical competence; (3) Spouse and family adaptability; (4) Human relations skill; (5) Desire to serve overseas; (6) Previous overseas experience; (7) Understanding of host country culture; (8) Academic qualifications; (9) Knowledge of language of the host country; and (10) Understanding of home country culture. In Further studies (Caligiuri, 2000) has identified the following personality characteristics as key criteria for the selection of expatriates: Ÿ Ÿ Ÿ Ÿ Ÿ

Extroversion; Agreeableness; Conscientiousness; Emotional Stability; And Openness and Intellect.

Luthans and Farner (2002) have reviewed the status of expatriate training and the need to evaluate the transfer of this training to expatriate managers on-the-job in a foreign culture in their work. A multisource or 360-degree feedback system is proposed as both a way to evaluate expatriate cultural training at the behavioural and performance levels, as well as a way to develop expatriates to make them more effective once in the local culture. A proposed expatriate management effectiveness questionnaire (EMEQ) is described in

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terms of its theoretical foundation and specific scales, and how it could be used in a multisource feedback program for the effective development of expatriate managers. Multinational enterprises (MNEs) have been troubled with the problem of expatriate premature return. Wang and Hinrichs (2005) addressed this problem by conducting realistic expatriate assignment previews (REAPs) for expatriate candidates. A model was proposed to explain the mechanism between REAPs and expatriates' intention to prematurely return from an assignment. Specifically, providing REAPs to expatriate candidates may reduce expatriates' early return intention and ultimately reduce the chance of expatriate premature return through the self-selection effect, the role clarity effect, the adjustment of expectations effect, the worry effect, the freedom of choice effect, and the organizational honesty effect. This model also proposed that expatriate candidates' prior expatriate experience moderates the effect of selfselection, role clarity, adjustment of expectations, and worry. The majority of expatriate literature emphasizes the crucial role of family in making or breaking the expatriate experience, both in the case of assigned as well as self-initiated expatriates. To a large extent, the prevailing argument states that for both assigned expatriates and selfinitiated expatriates, family is a main reason for expatriate difficulties. The role of family is stressed as having a major – mostly negative – influence, particularly with regards to performance and premature return. Family adaptation is seen to be fostered by greater awareness by both the family and – in the case of assigned expatriates – the organization (Haslberger, 2005). Richardson (2006), in her article “Selfdirected expatriation: family matters” for the first

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time focused on family with regard to selfinitiated expatriation and found that the decision to stay or go abroad is heavily influenced by spouses and children. Their relative importance goes beyond the initial involvement in the decision-making process whether to expatriate or not, and it extends to daily life as an expatriate as they are by default also recipients of positive and negative experiences while accompanying the expatriate. In a more recent study that broadened the scope of expatriate failure beyond simply premature return, Lee (2007, p. 403) again identified “the inability on the part of the expatriate family to adjust to the foreign environment” as the main determinant of failure. Richardson (2006) further argued that the centrality of the family and spouse were so important to the expatriate experience that they should be considered active participants, rather than merely trailers; moreover, she noted that extended family in the home country should also be considered significant “because they are people with whom individuals continue to identify with and relate to”. In much of the literature, the proposition put forth by Black et al. (1991) in which they stated that family and especially spousal adjustment is positively related to international adjustment remains supported, and the significance of an expatriate’s family and spouse to their ultimate success or failure seems firmly established. Harvey and Novicevic (2001) suggested that effective expatriates should be able to capture the dynamic environment of the host country and to integrate the tacit knowledge of the host company. Suutari and Burch (2001) contended that as expatriates dispatched to subsidiary firms any kind of under-performance on international assignments could be extremely costly. They estimated that the

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costs of a failed expatriate might be between US$50,000 and US$150, 000. Thus, the training of expatriates before their departure was essential. According to Harvey (1998), many companies failed to pay sufficient attention to the training of potential expatriates. In addition, it was often assumed that high-performing employees at the parent firm would also be high performing expatriates in the subsidiaries. However, this assumption could only be verified if these expatriates adjusted their working style to meet the culture of the host nationals. If the expatriates were not able to adapt to the host country culture, the results could be reversed (Suutari and Brewster, 1998; Fish, 1999). Thus, although many recruitment specialists emphasized overseas experience and competence as the key expatriate selection criteria, more and more specialists used cross-cultural capability as the necessary and important criteria for expatriate recruitment Vance and Paik (2002) suggested that expatriates assigned to a host country with a different host culture might need more cross-cultural training. Individuals tended to perceive culture factors differently, and expatriate perceiving higher cultural differences between the parent country and host country might need higher levels of expatriate training. Dowling et al. (1999) state that international performance management is a strategic HRM process that enables the MNC to evaluate and continuously improve individual, subsidiary unit and corporate performance against clearly defined, pre-set objectives that are directly linked to international strategy. Performance appraisal is considered as one of several key elements of performance management. Cardy and Dobbins (1994) define performance appraisal as the process of identifying, observing, measuring and developing human resources in organisations. International perfor-

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mance appraisal has been a subject that attracts considerable attention from both academics and practitioners, as it is closely linked to MNCs’ international performance. While the expatriate is on assignment, the individual performance must be appraised. Given the cost of an expatriate and the important role they perform it would be anticipated that MNCs monitor and record their performance rather rigorously (Brewster, 1988; Brewster and Scullion, 1997; Dowling et al., 1999). Moreover, an MNC appraises not only parentcountry nationals (PCNs), but also host-country nationals (HCNs) and third-country nationals (TCNs). Provided the design of the international performance appraisal is appropriate, it tends to have a positive effect on company performance (Sparrow et al., 1994). Janssens (1994) argues that international performance appraisal is a way of controlling international managers’ behaviour and international operations in general. International performance appraisal is an important process for influencing both the extrinsic and intrinsic motivations of employees and their attitudes towards companies, that is, increasing employees’ perceptions and understanding of job tasks and subsequently their job satisfaction. A performance appraisal is also important to employees in material terms (Logger and Vinke, 1995, p. 261) and it guides managerial career development, future promotion decisions and compensation adjustments. While past research has examined issues from selection to effective cross-cultural adjustment, relatively little emphasis has been placed on international performance appraisal. As a result, the primary theoretical basis for expatriate performance appraisal comes from the literature on domestic US performance

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appraisals (Gregersen et al., 1996, p. 712). Also, there appears to be almost universal agreement on the importance of international performance appraisal, there is, however, a lack of consensus on what is the best practice of international performance appraisal due to the complexity of international practices relating particularly to diversified operating host environment and firm-specific factors. Brewster (1988) argues that the appraisal at an international level is extremely complex because there is no obviously correct way to assess the performance of someone operating far away in circumstances not fully understood by the appraiser. Evaluation of expatriate performance is complex due to the interaction of the variables involved. Factors in the environment, such as differences in societal, legal, economic, technical and physical demands and variables associated with task and the personality of the individual, make it difficult to isolate job-related factors, set performance standards and devise procedures (Dowling et al., 1994; Gregersen et al., 1996). Peterson et al. (1996) emphasise that for the expatriate assignment, MNCs need to evaluate dimensions of performance, which are not specifically jobrelated, such as cross-cultural interpersonal qualities, sensitivity to foreign norms, laws and customs, adaptability to uncertain and unpredictable conditions and the host location’s integration with other MNC units. International performance evaluation involves a complex range of issues, such as the following. si The financial results are not always a good yardstick for measuring the actual contribution. Complications arise when a “long distance” assessment takes place. Even with access to management information systems, the staff involved at headquarters may have difficulty forming a precise image of the circumstance which the various subsidiaries have had to

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operate to achieve their results. Consequently, the context of performance may be lost. India's emergence in the international business arena presents challenges to Westerntrained expatriate managers assigned there (Gopalan et. al.1997). These expatriates are familiar with management theories and practices based on value orientations very different from those in India. RESEARCH METHODOLOGY Instrument A questionnaire is prepared to carry out the data collection on all the policies and procedures being followed in IT/ITES sector related to IHRM. The questionnaire is a mix of open ended and multiple choice questions and 5 point Likert scale will be used. The questionnaire was based on the literature review done to identify important parameters associated with International Human Resource Management especially from Dowling (1999). Based on the responses from the pilot test, the questionnaire will be tested for reliability with a minimum targeted Cronbach’s alpha score of 0.70 as significantly high values (above .70) indicate a high value of internal reliability. The questionnaire shoed a reliability of .75 which means it has high internal reliability. Sampling Plan Population: Employees of various companies who are visiting/ visited client side/ onsite. Sampling Frame: Expatriate Employees of IT/ITES Sector of India Sample Type: “Non Probabilistic” judgemental sampling will be followed to pursue people who have undergone expatriation.

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Sample size: 55 IT/ITES Employees Based on the data collected from respondents, the following inferences were drawn. The purpose of undertaking the assignments is seen as shown in the pie chart given below. The main reason for travelling abroad has been knowledge transfer, which is over 50% of the time. The next most important reason is problem solving and assistance in working at the foreign subsidiary. It can be said that the purpose of travelling abroad has been to train resources on job related nuances. ANALYSIS AND DISCUSSION International recruitment & Selection Selection Criteria and Techniques were identified by Tung (1981) that contributed to the success or failure of an expatriate. The major ones identified by him were technical competency which can be assessed by potential candidates’ skills based on his past performance. The next criteria was personal attributes that refer to individual’s ability to deal and communicate effectively with superiors, peers, and subordinates, cultural sensitivity, emotional maturity respect to others and so on. Ability to cope up with environmental variables, flexibility and adaptability is another important criterion. Family situation of the expat in terms of formal and informal support from family, apprehensions regarding spouse and children’s future if the family moves along with the expat are all to be taken care of by the company itself. Some regions are considered as hardship postings in terms of distance from the country, the culture etc. The ability to speak foreign language acts as another added advantage in an international assignment. Various assessment techniques have been used by Indian MNCs for selecting expats for foreign assignments such as screening on applicants’ background, testing on candi-

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dates’ ability to adapt to new culture, investigating the family situations of potential candidates with respect to foreign culture, using cultural sensitivity tests, psychological tests and using assessment centres. From the data collected, it was found that very few selection tests were taken to select expatriates. More than 78% of the expatriates had not undertaken any selection test. Though, around 12% of the respondents said that they were made to give a culture knowledge test about the host country. Very few expatriates underwent other selection tests like psychometric and aptitude tests. The above pie chart shows that more than 85% of the expatriates felt that they had been given sufficient time to prepare for the international assignment. Sufficient time needs to be provided so that the expatriates can gather relevant material, do packing and such related activities needed for international travel. The bar chart indicates that around 78% of the respondents were given a fixed end date of their assignment. Thus, a clear plan was laid out well in advance to the expatriate’s departure in most of the situations. In order to study how the respondents were selected based on their marital status, duration of visit and accompanying of spouse, cross tabs have been calculated as shown. The cross tab between duration of the international assignment and being accompanied with family shows that despite the fact a lot of married people undertook international assignment they were not accompanied by their family (spouse and/ or children). This was because the duration of international assignments were short i.e. less than a year. A

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majority of the respondents were single and undertook short duration international assignments. Of all the respondents around 5% of them were allowed to be accompanied with family.

The timing of training given mostly was before leaving for the foreign assignment, around 56% of the times. Around 33% of the time, there was absence of formal trainings as shown alongside in the pie cart.

The cross tabulation shows that majority of singles – 29% and married expats 25.5% undertook the assignment alone.

Another important aspect during international assignment is using a relocation agent/ consultant for helping in the settling process. In the pie chart alongside it shows that around 90% of the time expats did not use a relocation consultant.

The analysis of the responses showed that around 89% (bar graph) of the respondents were given trainings to the expatriates to prepare for the assignment. The pie chart shows the break-up of the types of training provided. It is seen that both formal and informal training techniques were used for training. Around 34% of the respondents were trained by informal techniques like by providing information through informal gathering; meeting ex-expatriates, talking to team mates already at the host office etc. The next most important type of training imparted was related to imparting host country specific information followed by orientation visits. As mentioned earlier, due to short duration of the assignments, most of the married expatriates were not accompanied by their families. In order to see how many of the ones who took their family along with them, were along with the family given training, cross tabs were calculated. It is clear that (although a small number 4%) all the families that accompanied the expat were given relevant trainings prior to leaving for the assignment. Similarly, all the accompanied family members were given adequate assistance to settle, find job for spouse and get children enrolled in schools and so on.

But on the other hand, these respondents, 86% of them felt that it would have been better if the company had assigned them some mentor/ buddy to assist them in their adjustment phase, as shown on the pie chart on the left. The respondents found that the most challenging factor for adjustment was adapting to the local culture, values ethics, festivals etc. of the host country. They attributed a weightage of 56% to this factor. This was followed by challenges associated with the host country environment and lastly challenges associated with work. Regarding developmental opportunities being provided, most of the respondents, 70% of them felt that they were extremely satisfied with the work assignment post international assignment as there was a significant increase in his responsibilities, thus, increasing his span of control. Around 18% of the respondents felt that their responsibilities remained the same as before while 6% felt that they were unhappy about the fact that no developmental opportunities were provided in terms of increasing span of control/ influence post the assignment abroad was over.

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The respondents ranked the various trainings imparted based on their level of importance and relevance. The findings show that compensation associated with the international assignment was the most important factor considered for success of international assignment. Improper and inadequate communication from the home country office can also lead to expatriation failures and was this the second most highly rated success factor, followed by assigning a buddy and providing cultural and language trainings. International compensation In order to understand the expatriate expectations in IT/ITES sector, following analysis has been undertaken. Close to 42% of the respondents mentioned that they would have undertaken the international assignment even if it was not very financially beneficial for them. 31% of them said that they would not have undertaken this assignment had it not been financially beneficial. Also, 70% of the employees felt that compensation is a significantly important factor that impacts expatiation process. The approach used for compensation was primarily per diem basis as the duration of the international visit was short. For longer duration assignments primarily the expatriate were paid according to home country standard plus allowances to take care of the international expenses.

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compensated for their international assignments, both for long term stay as well as short term stay. The most popular components of international compensation in the IT/ITES sector have been providing airfares, COLA and housing allowances. In a few cases where the family has accompanied the expatriate, education related expenses of the children have been borne by the company. In order to find any significant relationship and dependency of satisfaction with compensation with the employee type, ANOVA was run. It is seen since the alpha value is more than .05, thus, the null hypothesis is accepted. Thus, there is no dependency of level of satisfaction of the pay with employee type. Similar results were found when testing hypothesis of satisfaction with compensation and age of the expatriate. There is no significant relationship between the two as the significant value is more than .05. Similar results were found when testing hypothesis of satisfaction with compensation and duration of the international assignment and marital status of the expatriate. There is no significant relationship between the two independent variables and level of satisfaction in both cases the significant value is more than .05. International Performance Management

From the cross tabulation it can be inferred that 65% of the expatriates were satisfied with the compensation provided. Out of these HCNs and PCNs were most satisfied. Here as well it is clear that the expatriates feel that they have been well remunerated and

The following analysis relates the performance management process for expatriate in IT/ITES sector. The cross tabulation shows that the HCNs and PCNs were satisfied with the performance appraisal process. But the TCNs did not show

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a very high degree of satisfaction with the appraisal process.

change in the level of expectation while taking the international assignment.

Most expatriates were satisfied more with the performance appraisal process because during the international assignment they were given more challenging work to do and thus, had their goals and targets re assessed.

Also, 53% of the expatriates felt that their ratings were impacted due to onsite visit, out of which 43% expatriates got higher rating while the others got a lower one. 47% of the expatriates felt that there was no impact of the international assignment on their performance ratings.

Mostly, during the performance review process the appraisal was done by the supervisor from the home country itself. In a few cases foreign supervisor also played an important role in the appraisal process. This was found especially in the longer duration assignments where the foreign supervisor’s role was as crucial as the home supervisors’ role. The process followed for performance appraisal at the international office was similar to the ones at the home country. Thus, there is a consistency of processes followed at both home and host country. Majority of the expatriates were satisfied with the appraisal process. They found the performance appraisals to be fair and clear. Transparency was maintained and the expatriates were kept involved in the discussions regarding performance review. Their performance was monitored on a regular basis. Also, 63% of the expatriates responded that the goal setting was done on a mutual basis i.e. the supervisors and he had a discussion on the goals and targets for the expatriates. Sometimes, the same were restated by the supervisor at the foreign office too for clarity purpose. Most of the repondents frlt that having taken the international assignment, their goals were re assessed. Around 60% of them felt that their goals and target expectations had been increased. While 31% felt that their was no

71% of the expatriates responded that there was a clear discussion of their performance ratings with the reviewing manager. The reasons for the rating were clearly stated. Figure 19 about here The managers clearly communicated the deliverables to the expats and 78% of the respondents substantiated this fact. In 22% cases clarity of dilevarables was absent. In order to test hypothesis related to expatriate satisfaction with performance management system and the factors like employee type affect it, ANOVA was calculated as the independent variables are nominal and dependent variable is a scale variable. In the above table, ANOVA was calculated for the same. Since the significant value is more than 0.05, there is no relation of satisfaction with PMS with employee type. Similar result was found with duration of the stay also i.e. there is no significant relationship between the duration of assignment and the level of satisfaction with the PMS process. In order to test hypothesis related to expatriate satisfaction with performance management system and the factors like rating given affect it, ANOVA was used as the independent variables are nominal and dependent variable is a

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scale variable. In the above table, ANOVA was calculated for the same. It is seen that the alpha value is less than 0.05 which mean that there is a significant relationship between satisfaction with the PM process and the performance rating given to the employees. Since in the above table the level of significance is less than 0.05, it substantiates that there is a significant relationship of the goals and targets be reassessed/recalibrated due to international assignments and the ratings imparted to the expatriates. In order to identify the most common measure of evaluation of performance of expatriates, around 30% said that BARS was commonly used. Apart from BARS, other popular methods were 360 degree feedback, peer evaluation and other qualitative. ANOVA In order to test hypothesis related to expatriate selection criteria and the factors that affect it, ANOVA was calculated as the independent variables are nominal and dependent variable is a scale variable. In the above table, ANOVA was calculated for selection criteria considered important from the purview of the company and how the type of employee – HCN/PCN/TCN impacts it. It was found that the selection criteria of familiarity with the culture of the host country has a significant relationship with the type of employee i.e. the choice of sending HCN/PCN/TCN will depend significantly on the knowledge of the country to which the expatriate is being sent. Similarly a significant relationship between job performance and employee type was also found.

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Table 18 shows ANOVA values for selection criteria and the employee type from the employees’ perspective. The conclusions found indicate that there is a significant relationship and dependence of job performance, skills and knowledge, adaptability and familiarity with the culture of the host country during selection on the types of employees i.e. HCN/PCN/TCN. In order to check the next hypothesis whether there is a significant impact of age on any of the selection criteria, ANOVA was used. It was found that from the company’s perspective, there is a significant relationship between age and family situation and flexibility and adaptability of the potential expatriate. It is obvious that, an older employee is bound to be married in most cases and thus, the company might have obligations towards sending his along with his family to international assignments. This fact might impact his chances for getting selected. Though, when similar test was run from the employees’ perspective, no significant impact of age on selection criteria was found. Thus, employees’ do not feel that their age can make or break their chances for getting selected for an international assignment. In order to test hypothesis related to expatriate selection criteria and the factors that affect it, ANOVA was calculated as the independent variables are nominal and dependent variable is a scale variable. In the above table, ANOVA was calculated for selection criteria considered important from the purview of the company and how marital status of the potential expatriate impacts it. It was found that the selection criteria of his family situation is significantly impacted by his being single or married as the


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company has additional obligations toward the family of a married expatriate. Similar findings were also concluded from the employees perspective i.e. there is a significant impact of the marital status of employee and his selection criteria of family situation while getting selected from the international assignments. As mentioned earlier, this finding is in sync with the earlier studied conducted.

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accompanied by their family (spouse and/ or children). This was because the duration of international assignments were short i.e. less than a year. According to the respondents, employees find that job related knowledge; past performance and adaptability to the host country’s culture are the most important factors to be considered during selection of the expatriate for nay international assignment.

CONCLUSION Based on the analysis the following conclusions can be drawn Most of the respondents eh undertook international assignments were PCNs. The advantages of sending PCNs are better maintenance and facilitation of organizational control and coordination, talented managers are offered international exposure and are the best fit for the job since they possess special skills and experiences. It also leads to cultural affinity by building common culture The main reason for travelling abroad for international assignments has been knowledge transfer, which is over 50% of the time. The next most important reason is problem solving and assistance in working at the foreign subsidiary. From the data collected, it was found that very few selection tests were taken to select expatriates. More than 78% of the expatriates had not undertaken any selection test. Though, around 12% of the respondents said that they were made to give a culture knowledge test about the host country. Despite the fact a lot of married people undertook international assignment they were not

Most of the respondents were trained by informal techniques like by providing information through informal gathering; meeting ex-expatriates, talking to team mates already at the host office etc. The next most important type of training imparted was related to imparting host country specific information followed by orientation visits. The timing of training given mostly was before leaving for the foreign assignment, around 56% of the times. The respondents found that the most challenging factor for adjustment was adapting to the local culture, values ethics, festivals etc. of the host country. The findings show that compensation associated with the international assignment was the most important factor considered for success of international assignment. Improper and inadequate communication from the home country office can also lead to expatriation failures The approach used for compensation was primarily per diem basis as the duration of the international visit was short. For longer duration assignments primarily the expatriates were

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paid according to home country standard plus allowances to take care of the international expenses. The most popular components of international compensation in the IT/ITES sector have been providing airfares, COLA and housing allowances. In a few cases where the family has accompanied the expatriate, education related expenses of the children have been borne by the company. Most expatriates were satisfied more with the performance appraisal process because during the international assignment they were given more challenging work to do mostly, during the performance review process the appraisal was done by the supervisor from the home country itself. In order to identify the most common measure of evaluation of performance of expatriates, around 30% said that BARS was commonly used. Apart from BARS, other popular methods were 360 degree feedback, peer evaluation and other qualitative RECOMMENDATIONS Selection tests are not being conducted by many companies for expatriate selection. IT/ITES sector need to have selection tests especially for cultural sensitivity, psychometric tests to ensure better expatriation Ÿ Formal trainings need to be given prior to leaving for the foreign country regarding the business etiquette, culture etc. to the expatriate and his family. SO far informal methods of training are being used. Ÿ Also this training needs to be given prior to departure of the expatriate and can be

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reinstated on arrival if the country visited is a hardship one. Ÿ Assigning a buddy/ mentor to expatriate makes the rate of expatriate failure lesser. Any problem faced by expatriate can be addressed to the buddy who can advise him accordingly Ÿ Adequate corporate commutation from home country should be done. Ÿ There should be self-assessment from the expatriates as a first step in performance review process. Ÿ Performance review needs to be joint effort by both home and host manager. Ÿ Also feedback needs to be given quarterly by both home and host manager in form of interim written status/progress reports. Ÿ Involvement with a manager from the Home country as well to help avoid cultural bias Ÿ Not to judge performance/output at onsite location in same way as you would judge it back home - Soft and subjective criteria to be used. Ÿ To be more flexible with the employees and provide incentives for overtime done during product release. Ÿ Technical and communication skills at any time should be given utmost importance while carrying out the assessment of a particular individual. Ÿ There should not be a bias decision because of factors such as: Regional


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priority, Team level politics, Transfer of resource from one engagement to another engagement leading to a dip in his/her rating. Ÿ To consider various parameters when at onsite and rate the person. Some clients are tough, some locations are difficult. Ÿ Pressure at onsite just cannot be graded in performance management. Ÿ Feedback from foreign team should be sought to get an accurate picture of the person's performance. Ÿ And equal Consent of foreign Manager / Mentor involved with their recommendations and independent of local boundaries internally. Ÿ Performance appraisal format should be changed to 360 degree format REFERENCES Dowling, Peter J., Welch, Denice E., & Schuler, Randall, S. (1999). International Human resource Management Managing People in a Multinational Context, South Western College Publication. Desatnick, R L., & Bennett , M.L. 1978. Human Resource Management in the Multinational Company, New York, Nichols. White, G.M. 1993. Emotions In side out: The Anthropology of Affect. In M.H. Lewis (Ed.), Hand book of emotions. Page 29-40. Guilford Press: New York.

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Wang, Lei & Hinrichs, Kim T. Realistic Expatriate Assignment Preview: A Potential Solution To Expatriate Premature Return in. The International Journal of Organizational Analysis 2005, 13(3): 269-282. Luthans, Kyle W., & Farner, Steve, Expatriate Development: The Use of 360-Degree Feedback in Journal of Manage ment Development, 21(10): 780-793. Caligiuri, P.M. 2000. The Big Five Person ality Characteristics as Predictors of Expatriate’s Desire To Terminate The Assignment And Supervisor-Rated Performance, Personnel Psychology,53(1): 67-89. Cunningham, J.B., Debrah, Y.A., & Petzall, S. 1996. Manufacturing Management Practices of Japanese Subsidiaries in Singapore, Industrial Management & Data systems, 96(7): 3-16. Fish, A. 1999. Selecting Managers for Cross- Border Assignments: Building Value into the Process, International Journal of Management Review,1(4): 461-83. Gregersen, H.B., Morrison, A.J., & Black, J.S. 1998. Developing Leaders For T h e Global Frontier, Sloan Management Review, 40(1): 21-32. Harvey, M., & Novicevic, M.M. 2001. Selecting Expatriates For Increasingly Complex Global Assignments, Career Development International, 6(2): 69-86. Tung, R.L. 1981. Selection And Training Of Personnel Overseas Assignments,

82


Columbia Journal of World Business, 16(1): 68-78. Stone, R.J. 1991. Expatriate Selection And Failure, Human Resource Planning, 14(1): 9-18. Haslberger, A. 2005. Facets and Dimen sions Of Cross-Cultural Adaptation: Refining The Tools, Personnel Review, 34 (1): 85-109. Richardson, J. 2006. Self-Directed Expatria tion: Family Matters, Personnel Review, 35(4): 469-86. Black, J.S., Mendenhall, M., & Oddou, G. 1991. Toward A Comprehensive Model of International Adjustment, Academy of Management Review, 16(2): 291-317. Suutari, V., & Burch, D. 2001. The Role of On-Site Training and Support In Expatria tion: Existing And Necessary Host-Com pany Practices, Career Development International, 6: 298-311. Suutari, V., & Brewster, C. 1998. The Adaptation of Expatriates In Europe Evi dence From Finnish Companies, Person nel Review, Vol. 27 No. 2, pp. 89-103. Harvey, M. 1998. Dual-Career Couples During International Relocation: The Trailing Spouse, International Journal of Human Resource Management, 9(2): 309-20. Vance, C.M., & Paik, Y. 2002. One Size F i t s All In Expatriate Pre-Departure Traini n g ? Comparingthe Host Country Voices of Mexican, Indonesian And US Workers, The Journal of Management Development, 21: 557-71.

September

Cardy, R.L., & Dobbins, G.H. 1994. Performance Appraisal: Alternat Perspectives, Cincinnati, OH: South-Western Publishing. Brewster C. 1988. Managing Expatriates, International Journal of Manpower,9(2): 17-20, 1988. Brewster, C., & Scullion, H. 1997. A Review and Agenda for Expatriate HRM, Human Resource Management Journal, 7(3): 32-41. Sparrow, P.R., Schuler, R.S., & Jackson, S.E. 1994. Convergence or Diver gence: Human Resource Practices and Policies For Competitive Advantage World- Wide, The International J ourna l of Human Resource Management, 5(2): 267-300. Janssens, M. 1994. Evaluating International Managers’Performance:Parent Company Standards as Control Mechanism, The International Journal of Human Resource Management, 5 (4): 853-74. Logger, E., Vinke, R., & Kluytmans, F. 1995. Compensation & Appraisal in an International Perspective, in Harzing, A. & Ruysseveldt, J. (Eds), International Human Resource Management, Sage, London, pp. 144-55. Dowling, P.P., R.S. Schuler., & D.E. Welch 1994. International Dimensions of Human Resource Management. 2nd ed. Wardsworth, Inc. Gopalan, Suresh & Rivera, Joan B. 1997. Gaining a Perspective on Indian Value Orientations: Implications for Expatriate Managers. The International Journal of Organizational Analysis,5(2) : 156-179.


2011

83

Figure 1: Purpose of taking International assignments

Figure 2: Selection Tests 1 1 . . 3 8 22 12.73% %%

Selection test NO Yes, Aptitude Test Yes, Cultural Knowledge Test Yes, Language test

5.45%

Yes, Psychometric Test

78.18%

84


September

Present

Figure 3: Provision of Training

89.1%

10.9%

Figure 4: Type of Training Imparted Lang training

Country-specific info

Informal briefings

Orientation visits

Cross-Cult Training

None

Tech

21% 34% 6% 7% 1% 6% 25%

2011


85

Figure 5: Provision of Relocation Consultant

Relocation Consultant

10.91%

Yes No

89.09%

Figure 6: Availability of Buddy

Buddy to help better Yes No

14.55%

85.45%

86


September

Figure 7: Availability of Buddy

60.0%

Percentage

50.0% 40.0% 56.4% 30.0% 20.0% 10.0%

20.0%

21.8% 1.8%

0.0% Adjustment to the Adjustment to env work

Adjustment to Interaction local nationals

Others

Most challenging factor

Figure 8: Timing of Training When training's imparted Before Leaving On Arrival No Training

32.73% 56.36%

10.91%


2011

87

Figure 9: Change in Responsibility

Other

no, as my responsibilities where the same as before

7.3%

5.5%

Yes, as my responsibilities where the same as before Yes, because There was an Increase in my responsibilities

0.0%

18.2%

69.1%

20.0%

40.0%

60.0%

Percent

Figure 9: Approach to Compensation Approach intl comp Local STD Home Country

14.55%

49.09%

36.36%

Per Diem

88


September

Figure 11: Most Important Factors

Inadequate pre of family

% importance

7.6

Inadequate corp comm

13.7

Family problems

9.6

Tech Training

12.8 16.7

Comp Assigning a buddy

13.3 13.1

Lang training

13.1

Cross Cultural training 0.0

5.0

10.0

15.0

20.0

Figure 12: Most Important Factors Components of Inlt Compensation %

Others

0.6 5.6

Rest and rehabilitation leave Provides airfares

24.6

Home leave allowance (Allow foreign travel… Education allowance (for children)

4.9 3.1 8.0

Relocation allowance Cost-of-living allowance

24.1

Housing allowance

22.8 5.6

Foreign service Inducement / Hardship…

0.0

5.0

10.0

15.0

20.0

25.0

30.0


2011

89

Figure 13: Responsibility of Appraisal

Appraisals Done by (%)

Not Applicable 25% Supervisor from Home country 49% Foreign Supervisor 26%

Figure 14: Similarity in Performance Appraisal between Home and Parent Country PA Similar YES NO

34.55% 65.45%

90


September

Figure 15: Performance Appraisal Fairness PA fair YES NO Sometimes

14.55%

10.91%

74.55%

Figure 16: Reassessment of Goals after Taking up International Assignment 60.0%

50.0%

40.0%

30.0% 60.0% 20.0% 30.9% 10.0% 9.1% 0.0% Yes Relaxed

Yes enhanced Goal re-assessed

No


2011

91

Figure 17: Impact on Ratings after Taking up International Assignment

50.0%

30.0% 47.3% 20.0%

43.6%

10.0% 9.1% 0.0% Higher Rating

Lower Rating

No

Rating impacted

Figure 18 :

80.0%

60.0% Percent

Percent

40.0%

40.0%

70.9%

20.0% 29.1% 0.0% YES Discuss the rating

NO

92


September

Comm deliverables

Figure 19:

NO

71.8%

YES

78.2%

0.0%

20.0%

40.0%

60.0%

80.0%

Percent Figure 20: Performance appraisal Technique Used% Subjective Evaluation/ Qualitative Techniques 8%

8%

Behaviorally Anchored rating Scales

Other Performance rating method

6% 19%

29% 11% 10%

17%

Poor review MBO

360 Degree


2011

93

Table 1: Duration versus Accompanied By Cross tabulation Yes, Both Wife and Kids

Duration LESS THAN 1 YEAR

% within Duration % of Total

1 - 2 YRS


2 - 3 YRS


3 - 5 YRS

Not Not Accompanied Applicable By Either (for singles)

2.60%

43.60%

53.80%

100.00%

1.8%

30.90%

38.20%

70.90%

11.10%

44.40%

44.40%

100.00%

1.80%

7.30%

7.30%

16.40%

20.00%

60.00%

20.00%

100.00%

1.8%

5.50%

1.80%

9.10%

100.00%

100.00%

1.80%

1.80%


MORE THAN 5 YRS

% within Duration % of Total % within Duration

Total

% of Total

Total

100.00%

100.00%

1.80%

1.80%

5.50%

45.50%

49.10%

100.0%

5.5%

45.50%

49.10%

100.00%

Table 2 : Accompanied By Family and Marital Status Cross tabulation Marital Status

Accompanied By

Total

SINGLE

MARRIED

Total

Yes, Both Wife and Kids

1.8%

3.6%

5.5%

Not Accompanied By Either

20.0%

25.5%

45.5%

Not Applicable (for singles)

29.1%

20.0%

49.1%

50.9%

49.1%

100.0%

94


September

Table 3 : Accompanied By Family and Spouse Training Cross tabulation Family /spouse training NO

NA

Total

1.8%

1.8%

7.2%

Not Accompanied By Either

34.5%

9.1%

43.6%


16.4%

32.7%

49.1%

52.7%

43.6%

100.0%

YES Accompanied By

Yes, Both Wife and Kids

3.6%

Total

3.6%

Table 4 : Accompanied By Family and Spouse Training Cross tabulation family/spouse training YES NO NA Total Yes, Both Wife and Kids

1.80%

1.80%

7.20%

Accompanied By Not Accompanied By Either

34.50%

9.10%

43.60%


16.40%

32.70%

49.10%

52.70%

43.60%

100.00%

Low Importance

Total

Total

3.60%

3.60%

Table 5 : Compensation Most Imp Factors Very High High Moderate Importance Importance Importance Accepted Beneficial Financially Total

YES

18.2%

3.6%

20.0%

NO

20.0%

7.3%

1.8%

3.6%

18.2%

5.5%

27.3%

41.8%

29.1%

27.3%

1.8% 100.0%

MAYBE

41.8% 1.8%

30.9%


2011

95

Table 6 : Satisfied with Comp Moderately Satisfied

Highly Satisfied Satisfied Emp Type

Less Least Total Satisfied Satisfied

HCN

16.40%

10.90%

5.50%

1.80%

3.60%

38.20%

PCN

12.70%

9.10%

10.90%

3.60%

1.80%

38.20%

TCN

1.80%

16.40%

3.60%

1.80%

23.60%

30.90%

36.40%

20.00%

Total

5.50%

7.30% 100.00%

Table 7 : Satisfied with Comp Highly Moderately Less Least Satisfied Satisfied Satisfied Satisfied Satisfied Approach intl comp

Total

LOCAL 9.10% STD HOME 9.10% COUNTRY PER 12.70% DIEM 30.90%

Total

3.60%

1.8%

14.50%

12.70%

9.10%

1.80%

3.60%

36.40%

20.00%

9.10%

3.60%

3.60%

49.10%

36.40%

20.00%

5.50%

7.30%

100.00%

Table 8 : Satisfied with Compensation and Employee type Sum of Squares

df

Mean Square

F

Between Groups

0.517

2

0.259

Between Groups

72.864

52

1.401

Between Groups

73.382

54

Sig.

0.19

0.83

Table 9 : Satisfied with Compensation and Age Sum of Squares Between Groups

2.487

df

Mean Square

3

0.829

Between Groups

70.895 51

1.39

Between Groups

73.382 54

F

Sig.

0.596

0.62

96


September

Table 10 : Satisfied with Compensation and Duration Sum of Squares Between Groups

df

6.985

Mean Square

F

4

1.746

Within Groups

66.397 50

1.328

Total

73.382 54

Sig.

1.315

0.277

Table 11 : Satisfied With Compensation And Marital Status Sum of Squares

df

Mean Square

F

Sig.

0.26

1

0.26

0.189

0.666

Within Groups

73.122

53

1.38

Total

73.382

54

Between Groups

Table 12 : Satisfied with PMS and Employee Type Cross tabulation Emp Type HCN satisfied PMS

High Satisfied

Total PCN

TCN

HCN

3.60%

10.90%

20.00%

7.30%

Moderately Satisfied

5.50%

16.40%

Less Satisfied

5.50%

1.8%

Least Satisfied

3.60%

1.80%

1.80%

7.30%

38.20%

38.20%

23.60%

100.00%

Satisfied

Total

1.80%

16.40% 27.30%

20.00%

41.80% 7.30%

Table 13 : Satisfied with PMS and Goals Re-assessed Cross tabulation goals re-assessed Yes Relaxed High Satisfied

Yes enhanced

No

Total

3.60%

5.50%

7.30%

16.40%

1.8%

20.00%

5.50%

27.30%

3.60%

29.10%

9.10%

41.80%

Less Satisfied

1.80%

5.50%

7.30%

Least Satisfied

3.60%

3.60%

7.30%

Satisfied satisfied PMS Moderately Satisfied

Total

9.10%

60.00% 30.90% 100.00%


2011

97

Table 14 : Satisfied PMS and Employee Type Sum of Squares

df

Mean Square

F

Between Groups

3.077

2

1.539

Within Groups

59.905

52

1.152

Total

62.982

54

Sig.

1.336

0.272

Table 15 : Satisfied PMS and duration Sum of Squares Between Groups

5.084

df

Mean Square

4

1.271

Within Groups

57.897 50

1.158

Total

62.982 54

F

Sig.

1.098

0.368

Table 16 : Satisfied with PMS and Ratings

Sum of Squares df Mean Square Between Groups

11.064

2

5.532

Within Groups

51.918 52

0.998

Total

62.982 54

F

Sig.

5.541

0.007

Table 17 : Ratings Impacted with Goals Reassessed Sum of Squares Between Groups Within Groups Total

df

6.977 42.95

2 52

49.927

54

Ratings Impacted with Goals Reassessed

F

Sig.

3.488 4.223 0.02 0.826

98


September

Table 18 : Key ANOVA Results for Selection Criteria of Employer and Employee Perspective with Employee Type ANOVA (Selection Criteria Employer’s Perspective and Emp Type) Sum of Mean df Squares Square Job performance co

Familiarity with the culture co

Between Groups

2.518

2

Within Groups

34.828 52

Total

37.345 54

Between Groups

14.251

Within Groups

63.458 52

Total

77.709 54

2

F

Sig.

1.259 1.879 0.043 0.67

7.126 5.839 0.005 1.22

ANOVA (Selection Criteria Employee’s Perspective and Emp Type) Job performance

Between Groups Within Groups Total

Skills and competencies

Flexibility

Familiarity with the culture

Between Groups

3.159

2

33.641 52

0.647

36.8 54 4.654

2

Within Groups

34.073 52

Total

38.727 54

Between Groups

1.579 2.441 0.097

5.29

2

Within Groups

35.619 52

Total

40.909 54

Between Groups

12.036

Within Groups

58.073 52

Total

70.109 54

2

2.327 3.551 0.036 0.655

2.645 3.861 0.027 0.685

6.018 5.389 0.007 1.117


2011

99

Table 19 - Key ANOVA Results for Selection Criteria of Employer and Employee Perspective with Age ANOVA (Selection Criteria Employer Perspective and Age) Sum of Squares Flexibility co

Family situation co

Between Groups

df

Mean Square

9.516

3

3.172

Within Groups

55.393

51

1.086

Total

64.909

54

Between Groups

13.222

3

4.407

49.76

51

0.976

62.982

54

Within Groups Total

F

Sig.

2.921

0.043

4.517

0.007

ANOVA (Selection Criteria employees Perspective and Age (No Significant Relations)

Table 20 - Key ANOVA Results for Selection Criteria of Employer and Employee Perspective with Marital Status ANOVA (Selection Criteria Employer Perspective and Marital Status) Sum of Squares df Mean Square F Sig. Between Groups 3.887 1 3.887 3.486 0.007 Family situation co Within Groups 59.095 53 1.115 Total 62.982 54 ANOVA (Selection Criteria Employer Perspective and Marital Status) Sum of Squares df Mean Square F Sig. Between Groups 6.133 1 6.133 5.744 0.02 Family situation Within Groups 56.594 53 1.068 Total 62.727 54

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