Impact of Performance Management on HR Climate at Headquarter Locations: A Global Assignee Perspecti

Impact of Performance Management on HR Climate at Headquarter Locations: A Global Assignee Perspective

Global talent management as a function of human resource (HR) management seemingly is an unparalleled task at which few if any multinational corporations (MNCs) have succeeded (Farndale et al., 2001; Schuler et al., 2011). If we assume that MNC success may in part be determined by how HR practices and policies are implemented, it would be appropriate to suggest that the HR climate is extremely likely to play a significant role in MNC performance. ‘Climate’, according to attribution theory (Kelley, 1969; 1973), does not refer to the physical or actual situation per se, but rather the situation individuals comprehend based on their perceptions (Drazin et al., 1999). HR climate is defined as the way in which individuals perceive what behaviours are expected (Bowen and Ostroff, 2004). In HR terms, a strong and positive HR climate exists only when the (performance management) messages that HR deliver are seen by employees consistently (Kelley, 1973) and as the HR decision-makers intended (Bowen and Ostroff, 2004).

Specifically, we argue that having effective HR practices and policies in place drives the creation of the HR climate, which in turn could potentially manifest itself equally in individual and MNC performance (Decramer et al., 2013). Commitment-based HR practices, and in particular performance management (PM) practices have been found to be positively related to social climates of trust, cooperation, and shared codes and language (Collins and Clark, 2003; Collins and Smith, 2006). These measures of social climate have been related to the firm's ability to exchange and combine knowledge, that in turn, are related to firm performance. Chow and Liu (2007) concluded that PM systems that shaped the skills and attitudes of employees were significant predictors of performance.

This sequence necessitates that we couch the implementation of appropriate HR practices and policies in the PM literature, suggesting that the way in which performance is managed across staff influences overall HR effectiveness. HR effectiveness directly influences the HR climate and thus individual and MNC performance.

While the link between these concepts is not novel, we persist that there is a gap in the current literature, namely that of contextualizing these relationships to fit a specific group of assignees: inpatriates. Inpatriates are subsidiary employees that are transferred to an MNC’s headquarters (HQ) (Harvey et al, 1999), and research shows that the number of inpatriates in MNCs continues to grow (Collings et al, 2010). Inpatriate managers represent “host or third-country nationals sent to the MNC Headquarters (HQ) on a semi-permanent to permanent assignment with the intent to provide knowledge and expertise by serving as a ‘linking-pin’ to the global marketplace” (Harvey et al, 2000, 2004). It is precisely this knowledge and expertise that allows organizations to more successfully tap into new markets, generate new ideas, and gain first-hand insights into customers’ demands. The luxury of having this type information readily available makes inpatriation a valuable asset for MNCs.

The addition of inpatriation as a staffing option, however, poses significant challenges to the HR climate and, has been suggested, to impact MNC performance greatly (Nishii et al., 2008; Parnell et al., 2012). Herein, we consequently extend the current theoretical contribution of HR climate creation to consider HR climate dynamics in relation to the management of inpatriate manager’s performance at HQ. The circumstances consequently beg the question: Why and how do the inpatriate managers’ perceptions of PM principles utilized at HQ impact the HR climate creation process in MNCs?

The gap identified in extant literature indicates that proper inpatriate PM has been disregarded. Studying or uncovering inpatriate PM perceptions may help organizations identify the means by which PM measures should be modified to fit inpatriate needs. We make use of attributional theory to articulate differences between the psychological processes (i.e., perceptions) of inpatriate managers compared to non-inpatriate managers. We note that the term non-inpatriate manager refers to all employees, at all hierarchical levels, who do not match the definition of inpatriation as defined above. The purpose is to explore the psychological mechanisms at play within inpatriates and how these might differ from those of non-inpatriate employees. We attempt to identify PM effective PM experiences in two ways: the contribution of the PM to the inpatriate manager’s own development and subsequent motivation and the inpatriate manager’s perceptions of the PM’s all-encompassing benefit to the MNC. The term "exemplary" is used when the participants consider their PM to be effective. In other words, we seek to understand the attributions inpatriate managers would make and how these differ from the non-inpatriate. Enhancing our understanding of how inpatriate managers might perceive existing PM processes would help to build a bridge such that modified inpatriate PM can contribute to a stronger HR climate and thus MNC performance.

Overall, we suggest that the utilization of an inpatriate staffing method creates a new, unique “situation” or “climate” which requires attention from the HR management, namely from the PM perspective. Using attributional theories as a cornerstone in explaining this phenomenon we herein propose an examination of how the psychological processes adopted by inpatriates vis-à-vis PM practices highlight deficiencies and to subsequently allow for modification such that HR climate may be strengthened. To gauge PM in the light of inpatriate managers, we utilize Bowen and Ostroff’s (2004) HR effectiveness framework to analyse the attribution process, noting that one may make internal (i.e., dispositional) and external (i.e., situational) attributions. We specifically link inpatriate assignment characteristics to Bowen and Ostroff’s (2004) proposed HR effectiveness dimensions of distinctiveness, consensus, and consistency. Bowen and Ostroff (2004) argue that in order for the MNCs’ HR strategy to be effective, employees should perceive HR as distinctive (i.e., both the event and outcome are highly observable), consistent (i.e., both the event and outcome are the same across modalities and time), and consensual (i.e., the idea that there is agreement between entities as to the relationship between the event and its outcome).

The objectives of this paper are to examine why and how inpatriate managers’ perceptions of HR principles are related to HR climate creation which in turn is related to MNC performance. We apply the framework for HR effectiveness (Bowen and Ostroff, 2004) and take into account what climate strength may look like when inpatriate managers are incorporated in the staffing mix, and, how existing PM practices may be amended to fit the dimensionality of the inpatriate staffing method. According to Bowen and Ostroff’s (2004) framework of HR effectiveness, the answer to the questions above will be grounded in making HR practices/policies distinctive, consistent, and to have a consensus amongst personnel and between the personnel and the MNC.

The paper will proceed as follows: Firstly, we describe the PM process from an inpatriate manager’s perspective and the impact it has on HR climate creation. Secondly, we introduce elements of attribution theory. Following that, we adopt Bowen and Ostroff’s (2004) HR effectiveness framework to help explore external and internal attributions made by inpatriate managers and how these may facilitate HR climate creation. Hypotheses are offered. Fourthly, we describe the methodology used to investigate the nature of 24 inpatriate managers’ PM at three UK MNCs. Finally, we present the results of our findings by focusing on the discussion of the inpatriate manager’s perception of the factors that impact the successful creation of an HR climate at HQ.

Inpatriate Performance Management and HR Climate Creation

Management scholars examining the mediating mechanism through which HR management can make a difference in MNC’s outcomes have defined HR as either content or process specific (Combs et al., 2006). The content based approach focuses on the intrinsic qualities attached to the content of HR practices (Wood and Wall, 2005). The processes based approach emphasizes the importance of the psychological processes through which employees attach meanings to HR practices (Bowen and Ostroff, 2004). The content of PM focuses on the virtues and vices attached to the PM, which involves planning, execution, assessment, review, and performance renewal (Aguinis, 2009). While there is no shortage of evidence illustrating the issues associated with the PM content or “best practices approach” (Bradley and Ashkanashy, 2001; Avery and Murphy, 1998; Clauss and Briscoe, 2009; Ostroff, 1993), it is nevertheless the process of PM that remains largely unexplored by scholars and has not been particularly applicable to the inpatriate. The premise on which this manuscript sits is that inpatriation requires a unique set of PM principles.

An effective PM is widely recognized as a management tool to specifically help evaluate and improve individual performance and corporate performance (e.g., Björkman et al., 2009; Chiang and Birtch, 2010; Claus and Briscoe, 2009; Decramer et al., 2013; Festing and Barzantny, 2008 Schmid and Kretschmer, 2010). MNCs with PM systems are 51% more likely to outperform others regarding financial outcomes and 41% more likely to outperform others regarding additional outcomes including customer satisfaction, employee retention, and other important metrics (Cascio, 2006). With this in mind, we base our arguments on Boxall (1996) who suggests that how to refine and implement HR practices within a particular context may not be that well understood. The PM processes can be viewed as a symbolic or signalling function by sending messages that employees use to make sense of and to define the psychological meaning of their work situation (e.g., Rousseau, 1995). All HR practices communicate messages constantly and in unintended ways, and messages can be understood idiosyncratically, whereby two employees interpret the same practices differently (Guzzo and Noonan, 1994).

Given their integral and highly sought after role as boundary spanners in MNCs, it is surprising to note the inattention paid to the internal practice and policies relative to making the inpatriate feel at home. The undertone of this statement refers to the fact PM processes have seen little to no changes to fit the elements with which inpatriate managers arrived and are challenged with at HQ. Table 1 recognizes that the challenges for inpatriate managers on overseas assignments differ substantially from other foreign staffing methods (see Reiche et al., 2009). It is precisely those differences that lead us to argue for PM modifications to consequently influence HR climate creation.

*****Insert Table 1 about Here*****

Perceived advantages of inpatriate managers are (1) providing: cultural/social knowledge and understanding; (2) supplying a critical strategic communication point for host country managers to help ensure clarification of mission; (3) providing a diversity of perspectives to corporate management when developing policies, strategies, and plans for competing in developing countries effectively; (4) initiating and maintaining continual contact with government officials and channel-of-distribution members; (5) developing a contextual understanding of how to globalize yet act locally; (6) creating an alternative to high-cost/high failure global staff who do not provide a cultural “window” into doing business in the host country; and (7) creating the diversity necessary to move from a multidomestic to a MNC (Harvey et al., 1999).

In the case of the inpatriate manager, the PM system may not elicit appropriate collective behaviours and attitudes needed for effectiveness, because the inpatriate may interpret the PM process uniquely, leading to variability in perceptions compared to the non-inpatriate. We consider an enhanced understanding of the mechanisms at play in the process of the inpatriate manager’s PM would enable the construction of a strong HR climate. We want to create a strong organizational climate which is accepting of inpatriation. Based on Owen and Ostroff (2004), a strong organizational climate exists only when perceptions are shared across people. We further note that the HR climate is simultaneously dependent upon ‘HR context’, as well as the ‘HR process’ (see Figure 1).

*****Insert Figure 1 about Here****

Bowen and Ostroff (2004) suggest a link between ‘practices’ and ‘processes’ and that HR practices (herein, inpatriate practices) must be delivered such that employees may empathize with these. We therefore argue that the use of inpatriation requires a unique set of PM principles, which must be conveyed to the inpatriate manager. A strong HR climate, according to Bowen and Ostroff (2004), requires HR decision-makers to send messages that are distinctive, consistent, and have consensus. The features of distinctiveness, consistency and consensus (first identified in Kelley’s 1969 covariation principle, while serving as a communications mechanism that signals to employees to engage in certain behaviours, may also impede or facilitate the communication process. According to Bowen and Ostroff (2004, p. 207), “the more HR practices send strong signals about which MNCs’ objectives are most important, and supported and rewarded relative to those objectives, the more likely it is those objectives will be achieved.” From that we take that it is crucial for organizations to set up inpatriate-specific principles that allow inpatriates to identify with organization’s objectives. As stated above, the more likely inpatriates identify with firm objectives, the more likely these objectives are achieved. In attribution terms, a strong HR climate is implied as a situation in which employees share a common psychological interpretation of what is important (Schneider et al., 2002). Therefore, it is our intent to recognize the perceptions at hand for entities for inpatriate and non-inpatriate managers, and to be able to identify the mechanisms necessary to influence both parties.

Attributions in the Context of Inpatriate Performance Management

Applying Inpatriation to Bowen and Ostroff’s HR Effectiveness Framework

According to ‘attribution theory’ research (Kelley, 1969; 1973; Kelley and Michela, 1980), attributions will affect a perceiver’s feelings about past events and their expectations about future ones. Kelley (1969; 1973) first identified three major antecedents that will affect the perceiver. The first is the perceiver’s information. In combination, information that complies with distinctiveness, consistency and consensus provides the basis on which the inpatriate and non-inpatriate manager make internal, external or relational attributions.

The second major antecedent is beliefs. What inpatriate managers expect from their HQ environment, and what they do to influence it, will undoubtedly be swayed by their pre-existing beliefs, attitudes, and schematic constructs (Kelley and Michela, 1980; McArthur, 1972), which are in turn influenced strongly by their cultural background (Crittenden and Lammug, 1988; Hofstede, 1980; Tung and Verbeke, 2010).The third antecedent is motivation. Motivational factors will determine when inpatriate managers make attributions and, whether they seek causal understanding in an open-ended way or are preoccupied with a particular causal question.

In sum, the principal causal effects on the attributions inpatriates and non-inpatriates make regarding behaviours that are central, expected and rewarded in the MNC’s HQ environment, will come from the information they collect, and their beliefs and motives.

Performance Management Process

The Distinctive Process of the PM

Bowen and Ostroff (2004) posit that HR management must be distinctive such that inpatriate HR practices and policies must be different to and/or adapted from existing HR practices and policies. Put differently, distinctiveness refers to elements of visibility, understandability, and legitimacy of authority. According to the theory of HR process, the PM will be distinctive when the MNC’s purpose for their PM system is understood by both inpatriate and non-inpatriate managers.

Management scholars acknowledge the purpose for conducting PM serves as a base for practices that are fundamental to the success of the MNC. Such practices are employee motivation (Hempel, 2001), administration (Murphy et al., 2004), feedback (Atwater, Ostroff et al., 2005; Sully De Luque and Sommer, 2000), subordinate expression (Milliman et al., 2000), promotion and development (Chiang and Birtch, 2010), and variable pay (Chiang and Birtch, 2012). Nonetheless, the extant literature indicates that the MNC’s purpose for conducting the PM is not easily understood (Chiang and Birtch, 2010; Claus and Briscoe, 2009; Milliman et al., 2002; Shen, 2004). The concern here is that employees may not discern the PM as the MNC intended (Cropanzano et al., 2007). Evidence is clear; the purpose of the PM for both the inpatriate and the non-inpatriate manager needs to be distinctive. We therefore propose the following:

Proposition 1: The purpose of the inpatriate manager’s PM must be clearly

communicated; failure to do so will negate the PM’s distinctiveness.

The Consistency Process of the PM

Bowen and Ostroff (2004) posit that HR management must be consistent such that inpatriates perceive a sense of instrumentality, validity, and consistency across HR management messages. PM consistency is particularly challenging to achieve when large cultural distance and language differences exist, as they frequently do between the inpatriate and non-inpatriate managers. The cultural gap and language differences that may exist between the inpatriate and the non-inpatriate will have an influence on the inpatriate’s reaction to PM process (Chiang and Birtch, 2010; Claus and Briscoe, 2009).

Differences in the way PM may be carried out at HQ, rather than at the MNC’s subsidiary, leads us to propose that the inpatriate may perceive the appraisal to lack consistency as it may take on a vastly different form compared to what she/he has experienced during past performance appraisals. In addition to the perception of appraisal process inconsistency, there exists three additional dimensions of PM process where cultural and language inconsistencies will have an immense effect on the inpatriate’s attribution of the PM process.

The first dimension concerns the impact of culture on the inpatriate’s attribution to learning styles (Harvey et al., 2005; Hofstede and Bond, 1988; Pelissier, 1991; Riding and Cheema, 1991). The inpatriate's home culture and thus pre-existing beliefs will influence his/her perception and choice of a preferred learning strategy and moderate the effect of a training pedagogy (Harvey and Miceli, 1999). The preferred learning strategy of inpatriate managers should be considered when designing training programs and in particular on-boarding platforms (Harvey et al., 2005; Hofstede and Bond, 1988; Pick, 1980; Ratner, 1991). While the inpatriates' previous limited exposure to HQ style educational methods may influence their ability to learn, they still have a preferred learning style in which they are more effective learners (Booth and Winzar, 1993). Consequently, MNCs need to consider learner diversity and the differing attributes of the inpatriate compared to the non-inpatriate during training; as far as possible it should accord with and complement the inpatriate's preferred style of learning.

The second dimension refers to the influence of cultural and language differences on the inpatriate’s attribution of her/his ability to form beneficial interpersonal relationships at work (Lee et al., 2009). According to Harvey et al. (2005), when attributes which the inpatriate uses to make inferences about observed behaviours are no longer consistent with reality, the inpatriate's interpersonal skills and culturally-driven behaviours may not fit the new context or environment and therefore lead to misperception of her/his behaviour. Language contrasts are likely to aggravate the situation (Brannen, 2004; Harzing and Freely, 2008). In effect, until the inpatriate can acclimatize her/his attributes, tolerate ambiguity, learn the appropriate social cues and appropriate behaviour, she/he may be perceived as asocial or handicapped regarding the ability to perform effectively in the new HQ environment (Harvey and Miceli, 1999).

The third dimension refers to the liability of foreignness (LOF) that may occur as a result of sustained and intensified cultural inequality between the inpatriate and the non-inpatriate (Harvey et al., 2005). LOF refers to “the cost of doing business abroad that may result in a competitive disadvantage for the MNC subunit ... defined as all additional costs a firm operating in a market overseas incurs that a local firm would not incur” (Zaheer, 1995, pp. 342-343). In the inpatriate context, LOF manifests itself in terms of the costs MNCs take on when employing an inpatriate manager without making adjustments to the PM template. It is evident that culture has an important role in the inpatriate’s PM. If a large cultural gap exists, it will almost certainly adversely influence consistency in the PM process for both the inpatriate and non-inpatriate. We therefore propose the following:

Proposition 2: Reducing cultural and language differences will increase the

PM’s consistency.

The Consensus Process of the PM

Bowen and Ostroff (2004) speak of HR management to be consensual in the sense that agreement among principal HR decision-makers must exist for the implementation of HR practices and policies to work. Fairness is noted as the inpatriate’s perception of whether HR practices and policies pursue extents of distributive, procedural, and interactional justice. According to the foundation of attribution theory, the inpatriate’s past experiences and future expectations will influence their perception of PM consensus.

As the majority of inpatriate managers were formerly host country managers of subsidiaries (Harvey and Buckley, 1997) in their former positions, they were likely to have had a high degree of autonomy (Birkinshaw and Hood, 1998), enjoying higher status with privileges such as a large office, a personal secretary and financial controller (Maley and Kramar, 2010), and relevant well-honed skills and competencies enabling them to fulfil their role in the subsidiary (Harzing and Noordhaven, 2005). As a host country manager, they were the local expert, the leader of the subsidiary. Thus, it is reasonable to assume that the inpatriate’s unique set of past business experiences will help shape their expectations of their new job at HQ (Harvey et al., 2005). For instance, drawing from such past experiences, the inpatriate will have certain expectations of the new office environment, new status, financial rewards, promotion opportunities, future career expectations, challenges of their new job role and level of support from non-inpatriates such as the supervisor and colleagues at the MNC’s HQ (Harvey et al., 2005).

Ultimately, the outcome of the disparity in cultural background and past experience of the inpatriate and non-inpatriate manager is that there is unlikely to be consensus of their attribution on the PM process. We therefore propose the following:

Proposition 3: The inpatriate’s dissimilar professional experiences will

negate the PM’s consensus.

Methodology

The unit of analysis is three UK MNCs which inpatriate foreign nationals to their UK headquarters. We selected UK companies for this study since we are interested in a non-US sample, and in building on non-U.S. sample; building on the findings by Oddou et al (2001) that non-US multinational corporations in particular expect to increase their share of inpatriates in the future. The focus of the study is the perception of HR through the inpatriate manager’s experience of their PM. Three healthcare MNCs with their HQ’s based in or near London agreed to participate in the study. Thirty inpatriate managers were approached to be interviewed across the three MNCs, and 24 accepted, giving a response rate of 80%. The majority of inpatriate managers procure executive roles at HQ in marketing (9), sales (7) and business development (4). The remainder fulfil roles in IT (1), regulatory affairs (1), health economics (1) and logistics (1). The informants come from company A (9), company B (9) and company C (6). All informants are male, with an age range from 30 years to 54 years, with a mean age of 40 years. Inpatriate managers represented in the study are from subsidiaries of US (4), Canada (2), Brazil (1), Belgium (1), Germany (3), Sweden (1), Norway (1), France (2), Italy (2), Spain (2), Singapore (1), India (2), China (1) and Australia (1). Nine informants have English as their first language and five have had previous international experience. International experience is defined as holding a full-time position abroad for more than three months duration. The participants were selected for the study on the basis of (a) holding a position as an inpatriate manager at the time or within five years of the study; (b) working at the headquarters of the UK multinational corporation; (c) being in their inpatriate manager role for more than two years; and (d) having experienced at least two performance appraisals as inpatriate manager. Table two and three illustrate the characteristics of the informant inpatriate managers.

Data collection

The interview questions were semi-structured. Direct questions about the HR environment were not asked; rather, details of the informant’s MNC HR environment and HR climate emerged from the inpatriate managers themselves as being important.

Examples of the type of semi-structured interview questions are given in appendix 1.

The initial interview with each informant lasted an average of one hour. Five key informants were interviewed twice and two were interviewed three times. Re-interviewing enabled the verification, clarification, and elaboration of information obtained in the first interview or to crosscheck information acquired from other sources. Interviews ceased when saturation occurred; that is, when no additional data were found or could be developed. All interviews were conducted in English.

As the study progressed, theoretical sampling (Glaser, 1978) was used, with the researcher seeking informants and other data sources as directed by the initial findings of data analysis. Further informants included a supervisor of inpatriate managers based in the UK, one international HR manager, and four industrial professional recruiters. In addition, the senior HR manager from each MNC was interviewed. During this meeting, in addition to gaining permission to interview the inpatriate managers, intelligence was pursued regarding the legitimacy of the PM system in each organisation. These informants helped to corroborate the information given by the inpatriate managers.

Data analysis

The recorded interviews were transcribed verbatim. The constant comparative method of qualitative analysis using QSR Nvivo2 software was used as a means of coding the data. Data analysis, including coding and memoing, was conducted utilizing the method described by Strauss and Corbin (1990). Open coding, axial coding and selective coding were used and involved the selection of the central phenomenon from the key concepts and its designation as the core code, which was then related to the other key concepts directly and indirectly. This provided the derived theoretical framework. Once this task was complete, the analysis was directed towards identifying the core category or main theme.

The data obtained in the interviews was used to assess the inpatriate manager’s perception of their PM effectiveness. The PM experiences that emerged from the data as being effective for the inpatriate managers were initially labelled “exemplary”. Effectiveness of the PM process became apparent in two ways: firstly, the contribution of the PM to the inpatriate manager’s own development and subsequent motivation and secondly, the inpatriate manager’s perceptions of the PM all-encompassing benefit to the MNC. The term "exemplary" will now be used for the participants who consider their PM to be effective. Eight inpatriate managers across the three MNCs emerge as having exemplary PMs. The remaining 16 considered that their PM process was not exemplary.

Results

Inpatriate manager’s satisfaction with performance management

We identified two significant core processes which we term ‘Purpose’ and ‘Discourse’. The core processes are the most prominent characteristics and key issues to emerge in analysis of the data; all other matters are in some way related to these. The central finding in the study addresses proposition one and reveals that the eight informants who have exemplary PMs suppose their PM has a clear ‘purpose’ and sufficient opportunity for ‘discourse’ with their supervisor.

Their PM is distinctive (i.e., both the purpose of the PM and outcome are apparent); consistent (i.e., both PM and outcome are stable and consistent across modalities and time); and consensual (i.e., there is sufficient opportunity for face-to-face dialogue between the exemplary informants and their supervisor. As a consequence, and in accordance with the tenets of attribution theory, the informants with exemplary PMs identify PM effectiveness, HR practices—and thus HR climate—in a positive light. In other words, the representative PM of the exemplary informants will help to deliver a strong HR climate that is distinctive, consistent and consensual.

In contrast, the 16 inpatriates who do not have exemplary PMs do not have a clearly defined PM purpose and they do not understand the MNC’s desired PM outcomes (not distinctive). The PM and, in particular the appraisal process, are unpredictable and do not meet their expectations (not consistent), and they are given little opportunity for self-expression (no consensus). Not surprisingly, these informants do not see the HR climate in their respective MNCs as strong. We will now define the purpose and the discourse in more detail.

Purpose

The findings establish that the exemplary informants perceive that their PM has value because it has a clear purpose targeted to their role as inpatriates, which the informants perceive as affective commitment by the MNC. Affective commitment has been found to have many constructive benefits including employee retention. For example, an employee who perceives that their MNC demonstrates affective commitment will often identify strongly with the company and its objectives, and might turn down offers to move to a new company, even if they seem more attractive financially (Sanders et al., 2008). On the other hand, the remaining non-exemplary informants invariably report a lack of purposefulness to their PM process (i.e. it is not properly targeted towards their inpatriate role) and perceive a lack of affective commitment by their MNC which results in disillusionment with the PM process. The evidence in the study indicates that the PM process fails to address the PM expectations of the non-exemplary inpatriate manager. For example:

German Manager aged 54 years (Company B)

“I have always felt let down with the system here (PM). It is a most curious ritual that no one seems to like; I have no idea of its purposefulness.”

The PM is perceived by the non-exemplary inpatriate managers as a sign of abject affective commitment from the MNC. In turn, they do not identify the PM as distinctive and as a result HR is not regarded positively and thus HR climate strength is unfavourable. Thus, the data confirms proposition one; when the the purpose of the inpatriate manager’s PM is poorly communicated throughout the MNC, it will negate the PM’s distinctiveness.

Discourse

The ‘discourse’ addresses propositions two and three and incorporates two key problem areas of PM that emerge to be important to the inpatriate managers. The first problem speaks to proposition two and confirms that cultural and language variances must be minimalized. Large discrepancies in culture and language will negate the PM’s consistency. We identify variant problems relating to inconsistency during the appraisal interview, which were most likely caused—and certainly intensified—by culture and language. English language is not the first language of 15 of the informants. It emerges that the inpatriate and supervisor’s culturally diverse backgrounds may create a gap in their expectations of the PM process. The inpatriate seems to expect a detailed constructive bilateral dialogue with his supervisor that includes time for self-expression. The supervisor is perceived by the inpatriates to direct a succinct interview with a focus on hard or quantitative objectives. For example:

French Manager aged 47 years (Company C)

“I feel it (the PM) is not about anyone’s future or career or improvement, it’s just about the sales plan.”

Evidence in the study suggested that some of the inpatriates had a poor understanding of British culture and in particular the nuances of British communication, despite some of the inpatriates having spent several years at HQ.

Spanish Inpatriate aged 54 years (Company C)

“My boss has never really given me a compliment; he occasionally says ‘not bad’, but that is not an approval. I am not sure what that is supposed to mean

According to Harzing (2001), humour is often combined with understatement. Depending on the tone, ‘not bad’ can actually mean ‘very good’ and ‘not bad at all’ might be the highest praise you ever get from a British person. For some inpatriates their British supervisor’s sense of humour is perceived as cold and unfeeling. The failure of the inpatriate manager to understand the humour-laden communication of some of their largely British supervisors will almost certainly contribute to communication misapprehensions. This cultural difference highlights that the PMs’ perceived consistency is at risk.

Some non-exemplary informants suggest the PM is used as a means of intimidation. The perception by the inpatriate managers of their supervisors using the PM as a legitimate form of coercion surfaced in three non-exemplary informants. English was not the first language of these informants.

The three non-exemplary informants, who talk about bullying, perceive that the PM is a sanctioned instrument for coercion. Moreover, the ‘bullying’ is only directed at inpatriates with English as a second language. It is uncertain if the perception of bullying is attributed to ethnic and/or language variations or a direct result of intimidating behavior by the supervisor. Nonetheless, it is apparent that language differences place an additional strain on the interaction between the inpatriate and his/her supervisor (Harzing and Noordhaven, 2005) and may diminish the quality and consistency of the PM. The upshot is that the inpatriate cannot depend on the PM system in the context that he feels he ought. The PM at HQ is not the same as the PM process in the subsidiary; this is unexpected and unsettling for the inpatriates. This situation creates a negative image of not only the PM process but also the entire HR facility. The key point is that the inpatriate perceives a lack of consistency of the PM process. The effect is that the HR climate strength as perceived by the inpatriate is diminished. Thus, evidence from the study confirms proposition two by signifying that cultural and language differences negate the PM’s consistency.

The second discourse issue addresses proposition three: the inpatriate’s dissimilar professional experiences will negate the PM’s consensus. The data reveals that the inpatriate managers have a deficit of regular and timely bilateral exchange with their. The dearth of dialogue about their job tenure and career aspirations is a significant and recurrent theme reported by many of the non-exemplary informants. Five of the non-exemplary inpatriates alleged that they had been transferred to jobs at HQ that were too junior and they felt that their skills and competencies are not put to good use. As a result, their current jobs are unsatisfying for them and they feel unsettled. These informants reported that they are not given the opportunity to discuss future career matters. Some consider that they are likely to have to continue in their current roles indefinitely. One informant said that he understood the PM appraisal was the right platform to discuss this matter but he was not given the opportunity for any dialog except to his discuss his annual objectives. It is noteworthy that the lack of opportunity for discourse with the supervisor is not unique to informants who have English as their second language. Twelve participants (including four informants with English as their native language) were extremely disappointed with their lack of opportunity for self-expression, for example:

Italian Manager aged 47 years (Company B)

“I get little time to talk with my boss about my career much because it’s just not possible with the kind of PM that I get. There is no time to discuss my future.”

The informants in general anticipate that their appraisal interview should allow opportunity for self-expression and that it should be followed up as part of the PM process. The lack of follow-up was a recurring theme and indicates that the PM amounts to little more than an annual appraisal interview for many informants. This in turn emerges to be a source of discontentment for the inpatriate managers. In addition to regular and timely feedback the inpatriates desire time to talk about themselves and many assumed that a credible PM should allow for that. The absence of inpatriate self-expression appears to build a perceived environment where there is no room for assertiveness and individualism. The non-exemplary inpatriate managers consider that they have little accord within the bounds of their PM. As a result they attribute the PM consensus as tenuous. Thus that data verifies proposition three, the inpatriate and supervisor’s divergent background will negate the PM’s consensus.

In sum, because of the lack of clarity in the purpose of the PM (i.e. the PM is not distinct), the process does not meet the inpatriate’s expectations (i.e. the PM is not consistent) and the inadequate opportunity for self-expression provided different professional experiences (i.e. the PM lacks consensus). Because these are the most noteworthy areas of dissatisfaction articulated by the participants, we identify them as the key factors that influence inpatriate manager’s perception of the HR climate,

Discussion

At the start of the manuscript we ask how and why does the inpatriate manager’s perception of the PM principles at HQ impact on the HR climate creation. Evidence in the study indicates that if their PM is not managed effectively, the inpatriate managers will perceive the HR climate as weak. Furthermore, the inpatriates’ poor perception of the HR climate may have additional destructive influences on not only their perception of the MNC’s affective commitment but also the many boundary-spanning advantages that the MNC may hope to achieve when it commences an inpatriate programme. For example, the inpatriate manager with a dismal perspective of the organisation’s HR climate may turn out to be a lacklustre communication link for the subsidiary; may provide a misleading notion of diversity to corporate management; and might inaccurately articulate how the MNC may develop a contextual understanding of how to globalise its operations. An inpatriate manager with a poor perception of HR climate will not generate an effective alternative to expatriates or create the diversity necessary to help create MNC success (Harvey et al., 1999). The precise knowledge and expertise that should allow the MNC to successfully tap into new markets and gain first-hand insights into customers’ demands could be lost if the inpatriate manager has a destructive perception of HR climate. In this case, the inpatriate manager will not be a valuable asset for MNCs, but could turn out to be a costly and potentially toxic global assignee.

We suggest the new situation of inpatriation highlights specific and additional limitations of the PM process in the global setting. Additionally, we propose the attributions that inpatriates make are likely to be dissimilar to non-inpatriates in a number of ways. These will now be clarified.

Undistinctive PM Purpose

Firstly, we uncovered that the purpose of their PM was unclear and frequently misinterpreted because it is not adequately communicated from the echelons of senior management and HR decision-makers to the inpatriate and non-inpatriate managers. Senior management within the MNC are habitually caught up with quantitative objectives and financial goal setting while, neglecting individual employee performance and motivation. Whilst the importance of a clear PM purpose is significant for the inpatriate and non-inpatriate managers, our findings suggest that the purpose takes on even more importance for inpatriate managers. If the purpose of the PM is unclear, the reason for the assignment may also be vague to the inpatriate manager. Accordingly, we reason that an indistinct PM purpose may manifest as a significant setback for the inpatriate manager.

Inconsistent PM process

Secondly, we propose that the non-exemplary inpatriate’s PM perception contributes to an inconsistent HR climate. This claim is founded on the knowledge that the non-exemplary inpatriate manager’s expectation of the PM is typically unfulfilled. We feel that this problem may at least in part be due to the inpatriate manager’s misaligned perceptions. We highlight the fact that the inpatriate manager needs a comprehensive on boarding and specifically tailored training and development that accommodates his/her different style of learning, triggered by cultural differences. In other words, any inpatriate training needs to reflect the culture and language of the inpatriate. A poor on boarding and subsequent ineffective training could damage the inpatriate manager’s ability to make friends, socialise and understand the nuances of the innate humour at HQ.

No PM Consensus

Thirdly, we contend non-exemplary inpatriates’ perception of HR consensus is predominantly poor. In particular these inpatriates perceive that there is little opportunity for self-expression. There is a need to improve some inpatriates’ capacity to be able to speak up for themselves. This may be achieved as part of a comprehensive diversity management training initiative.

It is necessary to comment on the gender imbalance of the sample. It is surprising that all the informants are male. This finding is in contrast to a recent commentator’s view that female global assignees are on the increase (Collings et al., 2007). Our sample represents three established large Healthcare MNCs with their HQ in the UK. Healthcare is not typically a dominant male industry: the gender imbalance of the inpatriate managers may perhaps reflect historical British tendencies to use males as global assignees. The gender imbalance in the older inpatriate group may be rationalized by the past tendency of MNCs to prefer to send males on global assignments; however, the imbalance in the younger group is both perplexing and intriguing. This is, however, outside the scope of the present study.

Limitations and Future Research

The study’s contributions have to be considered in light of its limitations. The study only considered inpatriates in UK MNCs. While this helped to reduce extraneous variation due to country differences, some of the findings may be unique to MNCs in the UK. The study could be extended in further ways. For example, it could be constructive to survey inpatriates’ supervisors and work colleagues at HQ to assess the extent to which inpatriates benefit the MNCs. inpatriates’ benefits the MNCs.

Conclusion

We conclude that HR management processes are of immense importance. However, it is not enough to simply create HR process that are aligned with strategy. Processes must be developed to fit the novel needs of today’s MNCs. As stated in the beginning, global talent management is a necessity and reality for organizations. Managing performance and therefore HR effectiveness may aid in the proper development of an HR climate needed to achieve global firm performance. We propose that the unique situation of the inpatriate combined with the perilous and challenging activity of PM will result in a weak HR climate and ultimately a defective PM process. For that reason, HR departments of the MNC’s headquarters are asked to address the special support needs of inpatriates. In addition to that, these HR practices must be delivered in a way such that employees (inpatriate and non-inpatriates) can perceive the HR practices aligned to their roles at HQ. In sum, evidence suggests that the PM process for the inpatriate manager may lack consistency, distinctiveness and consensus, and the probable outcome will be an ineffective PM. Enhancing our understanding of how inpatriate managers might perceive existing PM processes would help to build a bridge such that modified inpatriate PM can contribute to a stronger HR climate and thus MNC performance. Ultimately, MNCs create and execute their strategy through the individual and collective behaviors of their employees (Buller and McEnvoy, 2012). Therefore, each individual employee must have the ability, motivation and opportunity to engage in actions leading toward the accomplishment of those strategic goals.

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