Professional Practice Series and Recommendations Hardcover_11 potx

Maximizing Success and Retention of International Assignees 355 Expatriate compensation is clearly a very sensitive issue for HCNs (Bonache et al., 2009). Therefore, particular attention needs to be paid to how the potentially harmful effects of pay differentials can be avoided or mitigated. The issue of pay differ- entials can be addressed in two ways: avoiding or reducing them or, where that is not feasible, to make them as acceptable as possi- ble (Bonache et al., 2009). In order to avoid or minimize large pay differentials, companies might give preference to candidates who are intrinsically motivated to accept an international assignment (Bonache et al., 2009). This approach, however, risks dissatisfac- tion on the part of the expatriate due to perceived inequity if he or she meets other expatriates when on assignment who had to be ‘‘bribed’’ to go. Meeting and interacting with other expatriates (and comparing company compensation practices) is inevitable unless the assignee is the only expatriate in a particular location. Another option might be to make international assignments a valued career development intervention (Bonache et al., 2009). This, however, can only work as an incentive if the company has a proven track record of recognizing international experience in their promotion policy (Hippler, 2009). If a company can make a credible claim that foreign experi- ence is career enhancing, rewards in terms of pay increases might be reduced. This would be all the more desirable as it would reduce one of the most galling forms of pay discrepancy for the HCNs. An expatriate on a developmental assignment is there to learn from local staff. Not only do the expatriates have no superior expertise or skills, they are abroad to benefit from the skills and experience of the local employees. If this imbalance in knowledge and skills coincides with an inverse imbalance in pay, it will be perceived as particularly indefensible by local employees (Toh & DeNisi, 2005). Where large pay differentials are unavoidable, recent research suggests a particular emphasis on selection, training, and trans- parency. Bonache et al. (2009) show that if HCNs perceive the expatriates as making unique contributions (such as providing expert knowledge that is not available locally), they perceive any pay differential as less unfair. Consequently, unless the assignment is primarily developmental, only expatriates with genuinely supe- rior ability should be chosen so that local employees will perceive 356 Going Global them as deserving of any more generous compensation (Toh & DeNisi, 2005). The sensitive treatment of locals has also been shown to diminish the perception of pay unfairness (Bonache et al., 2009; Chen et al., 2002). Honesty and integrity promote trustworthiness, which was found to buffer the negative effect of perceived pay injustice on the overall evaluation of the expatri- ates (Leung et al., 2009). Therefore, personality characteristics and interpersonal skills should play a prominent role in selection decisions and subsequent training. Transparency will facilitate a careful management of HCNs’ perceptions of justice (Toh & DeNisi, 2005). Expatriates’ unique contributions as well as their special financial needs (such as those related to the loss of the spousal income, fees for international schools, or travel expenses to look after elderly relatives left behind) were demonstrated to make pay differentials more acceptable to HCNs (Bonache et al., 2009). As a result, companies need to raise the HCNs’ aware- ness of these contributions and needs by communicating them very clearly and making the mechanisms by which pay packages are arrived at transparent. Finally, firms should communicate and emphasize the pay advantages that the HCNs might have over other local employees in similar organizations and positions, that is, over another group of relevant referents or ‘‘comparison- others’’ (Adams, 1963, 1965), thus once more mitigating against any negative perception of pay differentials (Bonache et al., 2009; Leung et al., 2009; Toh & DeNisi, 2003, 2005). The design of expatriate compensation packages must take into account their larger effect on all groups of employees, including HCNs (Toh & DeNisi, 2005) to the benefit of both the organization and the individual expatriate. Career Progression upon Repatriation Considering the large investment to develop, maintain, and trans- fer international assignees, losing an employee with valuable international experience is costly and can affect the firm’s bottom line. Moreover, the loss of an internationally proficient employee often indirectly translates into providing an advantage to direct competitors, as repatriates are likely to find jobs with competitors, thus providing them with valuable human assets. In addition, high Maximizing Success and Retention of International Assignees 357 turnover among repatriates compromises the company’s ability to recruit future expatriates because it signals to other employees in the company that, despite the stated message to the contrary, international assignments may have a negative impact on one’s career (Downes & Thomas, 1999). Given this strategic human capital issue, ways to predict repatriate retention and lower their turnover is an important challenge facing organizations today (Black, Gregersen, & Mendenhall, 1992a, 1992b; Gregersen & Black, 1995; Stroh, 1995). Various factors affect whether international assignees remain with theircompany upon repatriation, which include being placed in unchallenging jobs, lack of promotion opportunities, loss of sta- tus and autonomy, lack of career planning and counseling, lack of support on behalf of managers and colleagues, and sluggish career advancement (Adler, 1981; Abueva, 2000; Black et al., 1992b). Of these many factors, it is not surprising that the most important one is the repatriates’ perception of how well the firms managed their repatriation process (Feldman & Thompson, 1993). This suggests that if the potential repatriation problems are considered, and appropriately addressedbythefirm inadvance,repatriate turnover will occur less often (Harvey, 1989). Thus, the repatriates who per- ceive that they have more support from their organization will be more committed to that organization—and will be more likely to stay with it after repatriation. Repatriates want their companies to value their international experience. As such, repatriates will mentally calculate an equity equation: comparing their perceptionsofthe rewards and recogni- tion that the company has given them for taking the assignment, relative to the sacrifices and contributions they have made for their company during the assignment; and the greater the per- ceived equity, the greater the likelihood that they will remain with the company upon repatriation. This suggests a type of mental exchange, or psychological contract, between expatriates and their employers. The psychological contract is based on the employee’s overall perceptions of the long-term exchange of fairness with the company, rather than on any specific (and quantifiable) obligation (Rousseau, 1990). Given the perceived sacrifice involved in relocating one’s family to another country for the sake of the company, it makes 358 Going Global intuitive sense that the psychological contract would apply to international assignees upon repatriation (Guzzo, Noonan, & Elron, 1994; Haslberger & Brewster, 2009). Caligiuri and Lazarova (2001b) offer some proactive recommendations for firms wishing to manage the career progression of their international assignees and increase retention upon repatriation: 1. Organizations should make an effort to manage expecta- tions upon repatriation. This will be helpful in reducing the expatriate’s ambiguity while on assignment (Black, 1992; Conference Board, 1996; Hammer, Hart, & Rogan, 1998). Organizations should give detailed briefings before the inter- national assignee leaves for his or her global assignment, detailing for the expatriate what to expect while on the assign- ment and what to expect upon return (Conference Board, 1996). 2. Careerplanningisanothercriticalfunction for retaining expa- triates upon repatriation. Between 6 and 12 months before the end of the global assignment, firms should offer multi- ple reentry sessions or career-planning sessions to discuss the expatriate’s concerns regarding repatriations; for example, career objectives and performance (Adler, 1981, 1997; Black, 1992; Black et al., 1992b; Conference Board, 1996). The inten- tion of these career-planning reentry sessions is to give the expatriate a sense of security regarding his or her future with the company (Black et al., 1992b). 3. To reduce ambiguity about the expatriates’ future, offer a written guarantee or repatriation agreement. This repatria- tion agreement outlines the type of position the international assignee will be placed in upon return from global assignment (Gomez-Mejia & Balkin, 1987). 4. One popular practice used in proactive repatriation systems is mentoring. Mentors keep the expatriate abreast of important occurrences while he or she is on global assignment and help the expatriate stay connected with the organization (Black et al., 1992b; Conference Board, 1996; Gomez-Mejia & Balkin, 1987; Napier & Peterson, 1991). A mentor also guides the expatriate’s future career with the organization by being his or her internal champion. Maximizing Success and Retention of International Assignees 359 5. Organizations should offer a reorientation program to brief returning expatriates on the changes in the company, such as in policies, personnel, and strategy (Gomez-Mejia & Balkin, 1987; Harvey, 1982). This should be provided immediately upon return from the assignment, when the repatriate returns to work. 6. Repatriation training seminars should be offered to employ- ees and their families. These repatriation training seminars will address expatriates’ emotional concerns upon returning home (Black, 1992, 1994; Black et al., 1992a, 1992b; Confer- ence Board, 1996; Hammer et al., 1998). This repatriation training should improve reentry adjustment. 7. Another recommendation is financial counseling and finan- cial or tax assistance. This counseling helps repatriates adjust back to their lifestyles without the additional allowances of the international position (Gomez-Mejia & Balkin, 1987; Harvey, 1982; Kendall, 1981). 8. Lifestyle counseling is also beneficial to employees and their families, as their lifestyles are likely to change dramatically when they return to their home countries (Black, 1994; Har- vey, 1989; Kendall, 1981). 9. Firms can also offer a repatriation adjustment period for the employees to reintegrate without added pressure from the organization (Harvey, 1989; Kendall, 1981). Given the stresses of repatriation both at home and at work, some organizations will reduce the repatriates’ travel time, give more vacation time, and so forth. 10. While the individuals are still on assignment, firms should offer opportunities for communication with their home office. For example, the assignee could be offered extended home visits during which he or she is expected to be visible at the office (Black, 1994; Gomez-Mejia & Balkin, 1987; Gregersen & Stroh, 1997). Another possibility is to encourage commu- nication between an assignee and colleagues back home to maintain his or her network, and so on (Adler, 1997). 11. Organizations should show visible signs that they value the international experience (for example, promoting the repa- triate upon return, maintaining position prestige and status, or providing additional compensation for completing the 360 Going Global assignment). This will create the perception within the orga- nization that global experience is beneficial for one’s career (Adler, 1981, 1997; Black et al., 1992b; Black, 1994; Gomez- Mejia & Balkin, 1987; Gregersen & Black, 1995). This will also help produce a culture in which global experience should not be disregarded as ‘‘different, and not relevant here’’ (Adler 1981, 1997; Hammer et al., 1998). Work-Life Balance and International Assignee Support Practices Thelastpracticeareaofinteresttoindustrialpsychologists involved in the management of international assignees is the assistance that firms offer regarding work-life balance practices for their international assignees, or more often, for their families. Work-life balance initiatives in the international assignment con- text can be especially challenging because they often involve far more than the employees of the organization; a spouse or partner and a child or children, who often accompany an international assignee to the host country, have their lives disrupted for the sake of the assignees’ job. Their experiences can often have a profound influence on the assignees’ sense of work-life balance and, subsequently, on the outcome of international assignments (Caligiuri & Lazarova, 2005). For example, many accompanying partners’ careers are put on hold due to visa regulations. In today’s dynamic environment of professional careers, such loss of career continuity may be quite damaging (Caligiuri & Lazarova, 2005). Moreover, for many of those employed prior to the assignment, inability to get engaged in productive activities outside the home can contribute to increased stress (Punnett, 1997). Spouses who have been out of work for the duration of the assignment may find resuming their careers upon return equally challenging. A period of unemployment after returning home does not only prolong and exacerbate the spouse’s stress with possible additional effects for the relationship and subsequent spill-over effects into the repatriate’s work domain.Losing not only an often very generous compensation package but all the expa- triate perks frequently available (such as a company car, a maid, excellent accommodations, memberships in exclusive clubs) in itself requires some readjustment. Losing the spouse’s income as Maximizing Success and Retention of International Assignees 361 well when compared to the preassignment situation presents a burden on the family finances that can exert an additional strain on the relationship. As Riusala and Suutari (2000) found, there are many discrep- ancies between the career needs of the accompanying partner and the extent to which they are met in organizations. The 2008 Global Relocation Trends Survey found that 33% of the companies offered education or training assistance for accompa- nying partners, 19% offered career enhancement reimbursement, 20% offered career planning assistance, and 21% offered assis- tance in finding employment (GMAC, 2008). There are other tangible services that companies offer accompanying partners on global assignments. These include monetary policies such as paying fees required by employment agencies in the host countries, offering seed money to start a new business, pay- ing fees to join professional associations, compensation of the accompanying partner’s lost wages and benefits, or offering finan- cial support to engage in volunteer service (Pellico & Stroh, 1997; Punnett, 1997). Other tangible services companies offer are nonmonetary but are also considered extremely useful for accom- panying partners. These include organization-sponsored support groups for partners (Punnett, 1997), employment networks coor- dinated with other global firms (Punnett, 1997), and office space in the host location for the purpose of job hunting (Elron & Kark, 2000). Between 2002 and 2008, the percentage of spouses not employed prior to relocation in the Global Relocation Trend Surveys has averaged 45% (GMAC, 2008). The support needs of accompanying spouses who do not work abroad are somewhat different from that of the expatriates and their employed counter- parts. The stay-at-home spouses’ environment differs considerably from that of the expatriate or working spouses. The work envi- ronment (and, for the children, the school environment) offers sources of an emerging social support network, whereas the stay-at- home spouse may have little natural social contact. Social support for these spouses thus has to aim at combating the spouse’s potential isolation and establishing his or her own social sup- port network. Beyond addressing the immediate social needs, the company should assist the spouse in creating a meaningful life abroad (Adler, 1997). 362 Going Global In addition to accompanying partners, children of interna- tional assignees will also influence an assignee’s sense of work-life balance. Uprooting a child from a place that is an important identity source can be a stressful experience (Harvey, 1985). In addition to concerns over availability of high-quality education, one also needs to consider the emotional stress that children undergo during periods of transition. Children can face obstacles such as saying good-bye to friends, making new friends, starting a new school, communicating through language barriers, having inadequate peer relations, lacking in peer acceptance (especially problematic for teenagers), and overall disruption to personal life. If not adequately supported by the parents, children may feel lonely and isolated, uncertain about their identity, and experi- ence diminished self-esteem. The transition poses extraordinary demands on children of all ages, and it is critical that parents acknowledge this and that organizations provide the resources for parents to do their best to help children through this adjustment phase (Borstorff et al., 1997; Brett, 1980; DeLeon & McPartlin, 1995; Harvey, 1985). In general, for organizations to help their international assignees achieve a greater sense of work-life balance, increas- ing opportunities for social support and social interaction (such as club memberships, housing in an expatriate community, trips home) are helpful.Thesepracticescancreatea sense of belonging, enhance psychological security and self-esteem, and reduce anxi- ety (Caligiuri & Lazarova, 2002). Given the profound impact that social networks and social support can have on an international assignee’s success, organizations should encourage opportunities to support such interactions. The Future: Strategic Alignment and Expatriate Management Practices An area where I/O psychologists could greatly influence the pro- fessional practice of international assignee management in the future is in the strategic alignment of the practices with the way in which firms compete globally. According to Adler and Ghadar (1990), international assignee management practices, namely who the firm considers as possible international assignees, how the firm selects and trains them, what criteria the firm uses to assess their Maximizing Success and Retention of International Assignees 363 performance, and what impact the international experience has on the careers of international assignees, should all fit the external environment in which the firm operates, as well as its strategic intent. Adler and Ghadar have stated that ‘‘the central issue for MNCs is not to identify the best international policy per se, but rather to find the best fit between the MNC’s external environ- ment, its overall strategy, andits HRM policy and implementation’’ (p.190). Currently, however, there is little strategic differentiation among the firms in their international assignee management prac- tices, such as selection and performance management (Caligiuri & Colakoglu, 2007). This is not surprising given that international assignees historically have been managed mostly administratively (from the compensation and relocation functions)—and without involvement of the more strategic HR and I/O psychology areas. Today, more I/O psychologists are being called in to work with international assignee management programs as these assignments are being integrated and managed as a part of broader leadership development and talent management programs. These next-generation international assignee man- agement practices include the activities related to managing the performance and development of employees on international assignee assignments to ensure, at an organizational level, that the right people are in the right place at the right time—doing what they were sent to do and developing the competencies needed at a firm level. This approach is newer and has a more strategic orientation given that the activities are aimed at firm-level development and improved outcomes through human talent. The field of international assignee management is changing rapidly and more industrial/organizational psychologists are becoming involved with the selection, training, development, and succession of international assignees. Practical Reality for Industrial/Organizational Psychologists and the Management of International Assignees Although often located down the same corridor in the Human Resources wing of most corporate headquarters, the directors of global or international mobility and talent development (where I/O psychologists often work) lead their respective 364 Going Global complementary, but not often strategically integrated, functions. As complementary HR functions, talent development professionals identify the firm’s talent deemed ready for international assign- ments, when (and sometimes where) they should be assigned, and what they will be expected to do. Once talent has been identified, global mobility professionals manage the many complexities (and vendors)—everything from their tax and visas to the movement of their household goods and international schools. In these complementary roles, the collaboration is generally minimal once a prospective international assignee is handed off from the talent management professionals to the global mobility professionals. As a matter of practicality, there is some efficiency-based value in global mobility and talent management operating as complementary HR functions (especially in firms with international assignee populations predominantly placed in less developmental—and more technical and functional—assignments). Though efficient, global mobility and talent management operating in complementary HR functions, however, is rarely effective from the perspective of global HR strategy. In brief, there is a growing strategic need in most firms to produce more culturally agile leaders through systematic global leadership development programs. This strategic HR need has led to a paradigm shift, as the global mobility and talent management functions are being reconfigured to be more strategically integrated HR partners. As strategically integrated HR partners, both talent management and global mobility professionals work together under one set of strategic business goals guiding where international assignees should be placed and why. For example, as strategically integrated HR partners, the talent management professionals have a deeper knowledge of the specific global competencies needing to be developed for any given high potential; they are able to readily identify who is predisposed to achieve the desired developmen- tal gains from a given international assignment. Global mobility professionals, also operating as strategically integrated HR partners, possess the same knowledge of the desired developmental global competencies, and, in turn, are able to design international assign- ments with associated support practices to increase the probability that the desired developmental competencies will be gained. [...]... flexible and compressed work schedules on a variety of work outcomes and found that they related positively to productivity, job satisfaction, and work schedule satisfaction, and related negatively to absenteeism Based on a 380 Going Global qualitative review of the research on FWA and work-family conflict (WFC), Allen and Shockley (2009) found mixed support for a relationship between work-family conflict and. .. employees to manage their work and nonwork responsibilities Of the various family-friendly benefits available, flexibility has received the most attention from both the research and the practice communities (Galinsky & Backon, 2008) Flexible work arrangements facilitate the management of competing demands from work and nonwork through increases in temporal flexibility (when work is done) and in spatial flexibility... of time flexibility, and 31% offered flextime on a daily basis (Galinsky, Bond, Sakai, Kim, & Giuntoli, 2008) Moreover, in 2006, an estimated 45 million American employees practiced some degree of telecommuting (WorldatWork, 2006) Flextime was first introduced within a West German aerospace firm in 1967 (Avery & Zabel, 2001) and was rapidly adopted by firms in Switzerland, France, and Scandinavia The first... antecedents and consequences of pay level satisfaction Journal of Applied Psychology, 91, 392–413 Yan, A., Zhu, G., & Hall, D T (2002) International assignment for career building: A model of agency relationships and psychological contracts Academy of Management Review, 27 , 373–391 CHAPTER 13 Work and Family in a Global Context Tammy D Allen, Kristen M Shockley, and Andrew Biga Introduction Work and family... express pride, loyalty, and interdependence in their families As mentioned previously, Raghuram et al (2001) found no relationship between collectivism and telework use However, their sample was limited to European countries and was based on Hofstede’s value indices (1991) The Philippines, Georgia, and India are highly in-group collectivistic cultures, whereas Scandinavian and Western European countries... (Series Ed.) & Z Aycan (Volume Ed.), New approaches 374 Going Global to employee management (Vol 4) Expatriate management: Theory and practice Greenwich, CT: JAI Press Ployhart, R., Wiechmann, D., Schmitt, N., Sacco, J., & Rogg, K (2002) The cross-cultural equivalence of job performance ratings Human Performance, 16, 49–79 PricewaterhouseCoopers (2005) International assignments: Global policy and practice: ... schedule flexibility (that is, flextime) and location flexibility (that is, telecommuting) in relation to individual work-life effectiveness We close the chapter with a discussion of the results of our data analyses, the challenges that multinational organizations face in developing strategies for helping individuals manage work and family, and recommendations for best practices Although a complete discussion... Yang, Hawkins, and Ferris (2004) demonstrated that Work and Family in a Global Context 381 a model that linked work demands to WIF held universally across four country clusters What is notable about this study is that although the participants came from different countries, they were all employees of IBM Thus, it is possible that organizational culture or organizational policies and practices played... connections that include extended family and groups In less collectivistic societies (that is, individualistic societies), people focus on personal achievement and independence (Markus & Kitayama, 1991) Project GLOBE includes two forms of collectivism Institutional collectivism pertains to the degree to which organizational and societal institutional practices encourage and reward the collective distribution... (1996) Strangers in a strange land: Expatriate paranoia and the dynamics of exclusion International Journal of Human Resource Management, 7 , 553–571 Riusala, K., & Suutari, V (2000) Expatriation and careers: Perspectives of expatriates and spouses Career Development International, 5(2), 81–90 Roberts, K., Kossek, E E., & Ozeki, C (1998) Managing the global workforce: Challenges and strategies Academy of . promotion opportunities, loss of sta- tus and autonomy, lack of career planning and counseling, lack of support on behalf of managers and colleagues, and sluggish career advancement (Adler, 1981;. disregarded as ‘‘different, and not relevant here’’ (Adler 1981, 1997; Hammer et al., 1998). Work-Life Balance and International Assignee Support Practices Thelastpracticeareaofinteresttoindustrialpsychologists involved. been identified, global mobility professionals manage the many complexities (and vendors)—everything from their tax and visas to the movement of their household goods and international schools. In