Components of Performance Management System

1. Performance Planning: Performance planning is the first crucial component of any

performance management process which forms the basis of performance appraisals.
Performance planning is jointly done by the appraisee and also the reviewee in the beginning
of a performance session. During this period, the employees decide upon the targets and the
key performance areas which can be performed over a year within the performance budget.,
which is finalized after a mutual agreement between the reporting officer and the employee.

2. Performance Appraisal and Reviewing: The appraisals are normally performed twice in a
year in an organization in the form of mid reviews and annual reviews which is held in the
end of the financial year. In this process, the appraisee first offers the self filled up ratings in
the self appraisal form and also describes his/her achievements over a period of time in
quantifiable terms. After the self appraisal, the final ratings are provided by the appraiser for
the quantifiable and measurable achievements of the employee being appraised. The entire
process of review seeks an active participation of both the employee and the appraiser for
analyzing the causes of loopholes in the performance and how it can be overcome. This has
been discussed in the performance feedback section.

3. Feedback on the Performance followed by personal counseling and performance

facilitation: Feedback and counseling is given a lot of importance in the performance
management process. This is the stage in which the employee acquires awareness from the
appraiser about the areas of improvements and also information on whether the employee is
contributing the expected levels of performance or not. The employee receives an open and a
very transparent feedback and along with this the training and development needs of the
employee is also identified. The appraiser adopts all the possible steps to ensure that the
employee meets the expected outcomes for an organization through effective personal
counseling and guidance, mentoring and representing the employee in training programmes
which develop the competencies and improve the overall productivity.

4. Rewarding good performance: This is a very vital component as it will determine the work
motivation of an employee. During this stage, an employee is publicly recognized for good
performance and is rewarded. This stage is very sensitive for an employee as this may have a
direct influence on the self esteem and achievement orientation. Any contributions duly
recognized by an organization helps an employee in coping up with the failures successfully
and satisfies the need for affection.

5. Performance Improvement Plans: In this stage, fresh set of goals are established for an
employee and new deadline is provided for accomplishing those objectives. The employee is
clearly communicated about the areas in which the employee is expected to improve and a
stipulated deadline is also assigned within which the employee must show this improvement.
This plan is jointly developed by the appraisee and the appraiser and is mutually approved.

6. Potential Appraisal: Potential appraisal forms a basis for both lateral and vertical
movement of employees. By implementing competency mapping and various assessment
techniques, potential appraisal is performed. Potential appraisal provides crucial inputs for
succession planning and job rotation.

FACTORS AFFECTING PERFORMANCE MANAGEMENT SYSTEMS:

For a performance management system to be implemented, there are a number of conditions

that must exist prior to its execution.

These factors include:

1. Ability of manager to mobilize the organization.

2. Effectively communicating the roles, duties and responsibilities of all such individuals who
are the participants in the process of bringing about change.

● Transparency and Simplicity

● Practicality and Participation

● Equality and Objectivity

Most managers know that the basics of effective performance management should include
goal setting, coaching, development planning, and recognition. While these are the actual
pillars of performance management, there are also certain factors that can dictate its success.

As a thought leader in performance management, Josh Bersin of the Deloitte Bersin research
firm has identified the top 10 factors in a performance management process, which are
outlined below. Take a look at the list to determine if you’ve gotten the following factors
right in your performance management approach:

● Philosophy, purpose, and culture

● Identify your company’s philosophy and purpose, and build them into your corporate
culture.

● Make goal-setting agile, local, and meaningful

Make sure that goals are aligned, clear, and have a specific purpose employees can
understand. Have managers collaborate with their peers to help them set goals that support
company objectives at the individual level.

● Use check-ins instead of the annual review

Annual reviews are antiquated, ineffective, time-consuming, and costly. Use weekly check-
ins instead.

● Reduce (or eliminate) impact of ratings

If you still want to use a rating scale to gauge performance, make sure that you’re having
discussions with employees about their performance regularly (via check-ins). Consider
getting rid of numeric scales to assess performance altogether.

● Coach and develop your employees

The best managers are coaches who give ample feedback to help their employees perform at
the highest possible level. You must also present them with the resources they need to pursue
the development opportunities they seek.

● Redesign compensation processes

Not all companies link pay to goal achievement, but it is possible to do. Find out which
compensation processes will work best for motivating high performance in your organization,
and make any changes as needed.

● Recognize employee contributions

Even top performers who regularly excel want to be noticed for their efforts. Praise both
small accomplishments and major wins using the specific methods for recognition that each
individual prefers (e.g., a private email vs. recognizing their achievements publicly).

● Simplify your processes

Eliminate redundancies by ensuring that all goals and efforts are aligned and everyone is
making unique contributions towards achieving team, department, and company-level goals.

● Use metrics to measure success

Identify the performance metrics that will determine success both in terms of goal
achievement and ongoing performance. Make sure that employees have a thorough
understanding of how their performance will be measured in advance, well before
performance-related discussions take place.

● Train managers on these practices

Train management to ensure that they’re managing their teams according to companywide
performance management strategies. These Performance Management Tactics are simple, but
by incorporating them into your overall strategy, you can lead your teams in the right
direction and increase goal achievement across your entire organization.

Performance Management Culture

Every organization has a company culture. No matter the business size, industry or location,
every business has an identity that reflects the goals and expectations of the organization.
However, not all company cultures are created equal or reflect what its top leadership
believes is their culture.
Amidst the myriad tools that organizations have at their fingertips, including data mining,
social media engagement, instant analytics and vast databases, it is the culture of a company
that often makes the difference between a highly successful organization and an average
organization. The reason that a performance management culture is so important amidst the
technological advantages that organizations have today is because it prioritizes people over
results. A performance management culture is a direct result of the strategies implemented by
the organization’s leadership, however without employee inspiration, strategic leadership
means nothing. For this reason building a performance management culture is dependent on
the development of employee talent and motivating an organization through a shared goal.
Studies have shown that employees that feel valued within their organization are more likely
to report better physical and mental health, higher levels of engagement, motivation and
career satisfaction. Even when organizations express high-level expectations on their
employees, if an employee feels valued, they are more likely to not only meet high-level
expectations, but also surpass them. This is why organizations like Google, Apple and
Facebook have flourished as organizations that demand the most out of their employees, yet
provide a creative, collaborative culture that stimulates innovation. Many performance
management systems struggle to keep up with the culture of Google, Apple and Facebook
due to an emphasis placed on systematic performance reviews conducted during particular
times throughout the year. To properly implement a culture of performance, an ongoing
strategy must take place all year long. To enact a performance management culture,
organizations must:

● Motivate Change – Assess the current culture of the organization and the roadblocks to
cultural performance. Organizational leaders must be consistent when seeking to clearly act
out the organization’s mission and brand strategy. Often time’s organizations discover that
employee evaluations based on regularly scheduled performance reviews not only do not
work to motivate a staff, but also create wasted time. To motivate change, leaders must do
without outdated perceptions of reviewing employee talent.

● Create the Groundwork – Introduce new concepts and expectations for both employees and
managers. A performance management culture is established through open, honest and clear
communication. By communicating the big picture, employees will not only feel included
and valued, but also internalize and take ownership of the goals of the organization.

● Sustain Behavior – Provide resources for employee motivation that drive individual
performance and sustainability. Employees must be given ongoing feedback in both
expectations and accomplishments. This feedback is critical for both the employee and
manager to commit to share both positive and disappointing results. Through the
development of sustainable expectations, managers are able to delegate quicker and more
efficiently to employees who grow with increased expectations and organizational goals.
Studies show that routine check-ins in employee performance gives employees a constant
feed of information that stimulates professional growth and performance.

● Provide New Resources – Enable employee motivation through an evaluation of current

skills and provide resources to improve upon and gain new expertise. Employees that grow in
various expertise and skills are able to adapt more quickly to organizational demands as well
as contribute to wiser and more engaging solutions to industry problems. By building a
performance management culture, organizations better adapt to changing technologies, create
environments of creativity and collaboration, as well as develop sustainable results. As
technologies continue to change and organizations utilize the vast resources for industry
advancement, the constant of human capital must remain the same. Creating a performance
management culture impacts a large amount of business success, which is why it is important
to utilize the best individuals to enact organizational change. At MK Strategic Resources,
analyzing employee talent and understanding the core organizational needs allows us to
seamlessly improve upon existing strategies.

EXPATRIATE PERFORMANCE MANAGEMENT International performance

management is the evaluation of an individual who works in a foreign subsidiary on a
temporary basis to transfer knowledge or develop global leadership skills. At its best,
international performance management should feed into the global goals of the business.
Environmental variations Performance management systems rarely work in the same way
domestically and internationally. Environmental variations including; different growth rates,
the immediate environment and differences in performance, usually mean international
performance appraisals need to be unique to each expatriate manager.

 Time and distance Improvements in technology make this less of an issue than it once was,
but time differences and local infrastructure will impact on performance and appraisals. This
is particularly true of expats working in underdeveloped countries.

● Cultural adjustment The employee’s ability to adjust to the organizational culture within
the subsidiary, as well as the wider culture within their new country, is likely to impact
performance. An understanding of the local organizational culture by the HR team, the
management team and the employee will facilitate the creation of a measurable international
performance management system.

● Inconsistency of implementation Like all performance development, it will only be

successful if implemented consistently in company subsidiaries. Oversight of this may be a
challenge if most Human Resource functions are centralized to headquarters, meaning some
employees thrive while others are left directionless.

● performance management system for expatriate Developing a system that will work
successfully across markets is a significant challenge for a global human resources manager.
To further compound the situation, there is very little best practice research as existing
studies do not focus on the same variables or countries.

● Define, facilitate and encourage performance Ultimately the goal of an expatriate

performance management system is to define, facilitate and encourage performance in the
individual and the teams they work with. Your company’s international performance
management system should enable managers of expat employees to set specific, realistic,
measurable goals that feed into the overall objectives of the business. However, setting goals
is not sufficient for success, the programme should also contain a method of assessing
performance on several occasions over a year.

To achieve the goals that have been set, employees need to be able to facilitate performance
through removal of barriers like outdated equipment or software, poor procedures and micro-
management. However, international employees may encounter further difficulty with
government requirements or personal safety depending on where they are based. Flexibility
needs to be included in this regard when developing an expat performance management
system.

Finally, encouraging performance has been shown to be another marker of a successful

international assignment. The methods for encouraging performance may vary from country
to country. While additional remuneration may work successfully at headquarters, time off or
other special privileges may be more valued in other countries. The easiest way to find out
what may work best is to survey international employees. Once agreed it is essential that the
appraisal process is transparent and fair.

● Training

Essential to successful international performance management is a clear and effective training

plan for all stakeholders. Once complete, managers need to be held accountable for
implementing the process across their own employees, ideally in the form of their own
performance appraisal by senior management and/or human resources. As a Global HR
Manager, you should also provide new expatriates with the tools they need to succeed and
help to prevent costly expat failure. See our tips on how to prepare expats for foreign
assignment.

● Cross-cultural differences

When creating a performance development plan that is going to work cross-culturally the
differences in how performance feedback should be provided needs to be accounted for. For
example, in some European cultures feedback should be direct and actionable where as in
some Asian cultures the same feedback could cause unacceptable loss of face for the
employee. Therefore, it is important to understand the culture on the ground when creating
guidelines on how feedback should be provided.

Total Rewards in the International Context

● By offering unique products and/or services that create opportunities in countries by

making certain that the MNCs’ IHRM policies, programs, and practices are consistent with
product attributes and brand names as well as the needs of local consumers. For example, an
MNC that values new and innovative product development might create novel total reward
systems that effectively motivate employees by recognising and rewarding those who share
ideas for how to develop new products.
● By making sure that the right people are assigned to international operations. For example,
when assigning employees to work in foreign nations, MNCs want employees who are
sensitive to numerous cultural norms and open to non-traditional ways of approaching work-
related problems.

● When compensation and benefits policies lead to fair processes and outcomes, employees
are likely to have higher levels of job satisfaction, higher levels of job performance, and are
more likely to remain with their MNC.

● First, pension plans and saving and investment plans are more difficult to manage between
countries due to variations in national rules and regulations. Second, there is also very little
portability of retirement plans and health insurance programs. Third, required benefits arising
from national labor or employment legislation such as workers’ compensation plans have no
applicability in foreign environments.

● In a domestic setting, the term base salary refers to the amount of pay (e.g., hourly pay or
salary) that employees earn on a regular basis for performing their jobs. By comparison, in an
international setting, the term base salary refers to either the comparable pay that an
employee receives for performing the same job in his/her home country or the amount of pay
that an employee would receive for performing the job in the host country.

Recap: PCN,TCN,& HCNs

i)Parent Country National(PCN): When a company of a country recruits employees from its
own country it is known as PCN. Here the country is called the parent country. Example:
when a Bangladeshi international company recruits employees from Bangladesh.

(ii)Host Country National(HCN): When a company of a country runs their business in

another country and recruits employees from that country then it is known as HCN. Here the
second country is the host country. Example: when a Bangladeshi company runs their
business in India and recruits Indian citizens for their organization.

(iii)Third Country National(TCN): They are the citizens of one country employed by a
company from another country who work in a third country. Example: when a Bangladeshi
firm recruits employees from India for their Canada branch.
COMPLEXITIES FACED BY IHR MANAGERS Some of the major challenges faced by
human resource managers are as follows:

1. Recruitment and Selection

2. Emotional and Physical Stability of Employees

3. Balance Between Management and Employees

4. Training, Development and Compensation

5. Performance Appraisal

6. Dealing with Trade Union.

1. Recruitment and Selection

Finding a suitable candidate for the job from a large number of applicants is a basic problem
for the human resource manager. They have to make suitable changes from time to time in
the selection pro-cedure and see to it that the candidate is up to the mark fulfilling the job
requirements. If required, the candidate should be provided with training to get quality
results.

2. Emotional and Physical Stability of Employees:

Providing with wages and salaries to employees is not sufficient in today’s world. The human
resource manager should maintain proper emotional balance of employees. They should try
to understand the attitude, requirements and feelings of employees, and motivate them
whenever and wherever required.

3. Balance Between Management and Employees: The human resource manager has a
responsibility to balance the interest of management and employ-ees. Profits, commitment,
cooperation, loyalty, and sincerely are the factors expected by management, whereas better
salaries and wages, safety and security, healthy working conditions, career development, and
participative working are the factors expected by employees from management.

4. Training, Development and Compensation: A planned execution of training

programmes and managerial development programmes is required to be undertaken to
sharpen and enhance the skills, and to develop knowledge of employees. Compensation in the
form of salary, bonus, allowances, incentives and perquisites is to be paid according to the
performance of people. A word or letter of appreciation is also to be given, if some of them
have done their jobs beyond expectations to keep their morale up.

5. Performance Appraisal: This activity should not be considered a routine process by the
human resource manager. If employees are not getting proper feedback from them, it may
affect their future work. A scientific appraisal tech-nique according to changing needs should
be applied and the quality of it should be checked from time to time.
6. Dealing with Trade Union: Union members are to be handled skillfully as they are
usually the people who oppose the company policies and procedures. Demands of the union
and interests of the management should be matched properly.

International total reward Objectives

To design an efficient reward system, the organization needs to fully understand the
definition and meaning of the reward system. It also needs to set up clear objectives for its
reward system. These are five key objectives that can be achieved by applying a reward
system.

1. Attraction and Retention:

Research shows that a reward system can directly affect the job choice, career choice and
turnover rate of the organization. Organizations that give the highest rewards tend to
attract and retain more people. This indicates that the better reward system can give a
higher satisfaction level to employees. The higher satisfaction level will lead to a longer
length of service and reduce organizational turnover rate. In the retail industry, employees
are the most important resources. The organization needs to retain high performance
employees and remove inefficient employees. To maintain the top performers, the current
reward system needs to be compared with other organization’s. The firm needs to ensure
that its reward system is superior than its competitors. However, it is very costly to
maintain a higher reward system. This will increase the labor cost of the organization. In
certain organizations, the labor cost covers 50% of overall operational cost. In addition, if
all employees are awarded at the same level, it can cause feelings of inequity because the
 better performers are likely to feel inequitably treated when they are rewarded at the same
level as poor performers in the same organization.

2. Motivation of Performance:

When certain conditions exist, reward systems have been demonstrated to motivate
performance. The reward system must be directly linked to effective performance. Staff
should be rewarded according to their needs. Once the staff is rewarded for their
outstanding performance, they will further improve their work process. The effect of this
reward system depends on the situation and the needs of people. There are three factors
that can affect the motivation effect by using a reward system.

1. Performance-Outcome Expectancy: Individuals expect that if they behave in a certain

way, they will get certain outcomes due to their behaviors. For example, if a person sells ten
units of product within one month, they will receive their base salary without any additional
bonus. On the other hand, they can receive 15% of commission if they can sell 15 units per
month. In this case, the staff will be motivated to achieve a higher sells level in order to
receive 15% of commission.

2. Attractiveness: Based on the perception of the staff, the outcome of the reward system
will lead to different attractiveness to employees. For example, some staff want to be
promoted as they have a higher desire to gain more control power. Other staff might prefer an
increment of their salary rather than promotion. The firm needs to understand the employee’s
needs and select the most attractive way to retain and attract motivated staff. In the retail
industry, the firm should select the most appropriate approach to reward its employees. For
staff who want to lead a team and manage people, the firm can promote them to be a leader of
a sales team. For staff who enjoy the interaction with customers, the organization can
increase their commission and keep them at ground level.

3. Effort-Performance Expectancy: The expectancy represents the individual’s perception

of how hard it will be to achieve certain behavior. For example, if the employee has very
negative thoughts, they feel that they can never achieve the sales target. The employees will
be further discouraged if they really fail to achieve the target. However, if the firm creates a
positive working environment, the staff will feel that the quota is achievable and they will be
motivated to hit the target and receive the reward. Therefore, most of the retail firms want to
encourage their staff to think positively and believe that the sales target is achievable. This
could help the staff to perform better.

3. Create Positive Organizational Culture: Reward systems can help the firm to create a
positive culture. Depending on the way that reward systems are developed, administered, and
managed, the organizational culture will be affected according to these factors. For example,
the reward system can influence the human resources oriented culture, entrepreneurial
culture, innovative culture, competence based culture, fair culture and participative culture. It
can also affect the communication, motivation and satisfaction of the employees. For
example, the employees will work hard to achieve their personal value if their efforts are
recognized by the organization. However if the organization rewards all staff equally without
appreciation of the individual’s effort, most of the staff will tend to slack. The established
culture should be able to meet following standards:

1. The individual believes that better behavior will lead to better outcomes.

2. The individual feels that the reward is attractive enough for them to improve their
work. Organization needs to understand the needs of the staff

3. The individual believes that it is possible to achieve a certain level of target. The firm
should encourage the staff to think positively and set an achievable target for them. For
example, the monthly sales quota needs to be reasonable.

4. Improve on Skills and Knowledge: The reward system can encourage employees to
continuously improve their skill sets. The firm can pay employees based on their skill levels.
Staff will be motivated to attend extra courses and improve their skill sets in order to receive
more benefit. For example, the firm can reward staff with outstanding explanation and
presentation skills. Staff will take more initiatives to improve their presentation skill and
attend related courses. Both organizations and staff can benefit from this. The firm can adjust
the setup of the reward system based on the requirement of the organization. For example,
effective communication skills and customer service skills are more important in the retail
industry. The firm can provide benefits to staff who attend relevant courses and have
outstanding customer service skills.

5. Reinforce and Define Organizational Structure: The reward system can reinforce and
define the organizational structure. The firm might not foresee the impact of the reward
system on the firm's structure changes. However, the reward systems can have a strong
impact on how integrated the organization is and how differentiated it is. For example, if the
company wants to create a united structure, it can reward all staff in the same manner. In this
case, more teamwork will be encouraged and there is less competition within the
organization. If the firm wants to differentiate the top performers from average performers,
they can apply a reward system that can create a more competitive environment. In this
system, employees focus on their individual work instead of the benefit of the whole team.
Insurance companies encourage the agent’s individual efforts. The reward system provides
intensive benefits for top sellers and insurance agents are not sharing their information even
within their own team.

Newer forms of International Assignments

The eleven assignment types to be reviewed are:

1. Long-term Temporary Assignments

2. Short-term Temporary Assignments
3. Employee-requested Long- and Short-term Assignments
4. Extended Business Travel
5. Rotational Assignments
6. International Transfers
7. Commuter Assignments
8. Consecutive Assignments
9. Developmental Assignments
10. Project Assignments
11. Assignments in Difficult Locations

Long-term Temporary Assignments Long-term temporary assignments typically span

one to three years, though it is not uncommon for there to be a mechanism to extend them
to up to five years or more. Most companies are focusing on keeping long-term
assignments to a five-year maximum as a cost management effort to align with the
maximum period of many tax-related totalization agreements. Another reason is the
recognition that if a business need exists that requires more than a five-year term to
address, it may be more effective to consider a permanent solution.

Key characteristics that differentiate long-term assignments include:

● Family accompaniment, requiring education support for children, travel support for
nonaccompanying children and spouse employment assistance

● Assumption of home country owned-home retention, with support for property

management ● Home country balance sheet approach to compensation

● Tax equalization Today, long-term assignments are used to meet a variety of business
needs, including

● Global leader development

● Expansion into new markets

● New facility start-up

Short-term Temporary Assignments Short-term temporary assignments are typically 3 -

12 months in duration, though the limits may vary by industry, with the most common
variation being a six-month minimum and an 18-month maximum. In addition to
duration, a defining characteristic of short-term assignments is the assignment objective
or purpose. These assignments are typically designed to accomplish a specific task or
goal, such as to train local staff in a specific skill or to gain technical proficiency from
local staff, to fill a vacancy until a more permanent solution is put into place or to
participate in a designated project. It is common that short-term assignments are
singlestatus engagements, meaning that family accompaniment is not a part of the
assignment parameters. That said, within some industries and for short-term assignments
that are typically longer in duration, this may not be the case. Some consider short-term
assignment to be a cost-savings instrument and, while it is true that an assignment that is
shorter in duration and single status is less costly than one that is longer and includes
family members, the savings may be considered a byproduct rather than an objective.

Employee-requested Long- and Short-term Assignments There is another category of

assignment types that applies to both long- and short-term assignments, and that is
employee-requested assignments. The key element for the company is the fact that the
employee has not been asked to take an assignment but has requested to do so for his/her
own personal and/or professional reasons. The company may wish to provide support for
the employee during the assignment – most companies do – but at a reduced benefit level.
Examples of policy differences include: • For long-term assignments, the employee may
be transitioned to local status rather than utilizing the home country balance sheet. • For
short-term assignments, only relocation benefits may be provided (travel to/from the host
location, personal goods shipment) if the assignment is requested in order to accompany a
spouse.

Extended Business Travel and Rotational Assignments Policies addressing extended

business travel are growing in popularity. The primary reason is compliance-related:
employees undertaking normal business trips are typically not on the Mobility
Department’s radar and if these trips get extended and/or there are many of them within a
specific timeframe, there may be tax, immigration and other regulatory compliance
implications that can cost the company money, time and even their presence in the host
country.

International Transfers Permanent international relocation, or international transfers,

has been part of international employee mobility for a long time. Sometimes called
oneway moves or indefinite transfers, international transfers are akin to domestic
relocation, with international-related elements added in. Traditionally, international
transfers have been used when an employee fills a permanent position in the destination
country. Interestingly, it does not guarantee that the employee will not move again or
even repatriate eventually. International transfers may be used when the duration of the
stay is unknown or for employee-requested transfers.

Commuter Assignments Instead of taking a short- or long-term assignment or even an

international transfer, an employee may commute regularly between their home location
and the work site in another country. Because of the need to commute regularly, these
assignments are most frequently used intra-regionally. Commutation may be weekly or
bi-weekly, though there are cases where it is tri-weekly or monthly. In most cases,
commuter assignments are requested by an employee who may have been asked to take
an assignment or relocation but may not want to do so for personal reasons.
Spouse/partner employment, children’s education and extended family commitments are
some of the most common reasons. Typically, employees commute to the work location
on Monday morning and return to the home location on Friday evenings.

Consecutive Assignments Most long- and short-term temporary assignments assume that
the assignee will repatriate to the home location or another permanent location in the
home country following the assignment. For employees undertaking more than one
assignment in a row, typically referred to as consecutive assignments, some aspects of
temporary assignment support are not effective. Consecutive assignments are particularly
appropriate for strategic initiatives, such as global leadership development, but they are
also effective for technical professionals who support facility start-ups for the company.
Developmental Assignments Developmental assignments – and the two other
assignment types that follow – have a distinguishing characteristic that differentiates them
from those described above. Those above are all defined by their duration. Longterm,
short-term, transfer, extended business travel, rotational, commuter and consecutive
assignments are all based on how the long the assignment is rather than on the reason for
the assignment. The three assignment types that follow represent the latter: they are
assignment types that are designed around specific business scenarios. Developmental
assignments address strategic needs within a company: to help an employee gain critical
skills. They are often utilized for employees identified as high-potential at any point in
their career, or they may be specific to early-career employees

Project Assignments Project assignments are typically used to transfer highly or

specifically skilled employees to a work location for a temporary time period to
accomplish a specific goal. These assignments are commonly used for client work,
facility build-out, technology rollout and similar initiatives. Project assignments are most
commonly short-term, although they can be long-term depending on the project needs.
They are also often single status, given the short and intense nature of the work to be done

Assignments in Difficult Locations Difficult locations are typically defined by living

conditions that are far more challenging than those the employee experiences in his/her
home location. Housing, living standards, remoteness, transportation options, limited
education or medical facilities, and significant cultural differences are all elements that
make this assignment type different from others.

Components of a Total Rewards Programs The right rewards system is a blend of

monetary and non-monetary rewards offered to employees. It can generate valuable
business results in terms of increasing productivity and loyalty, and has hiring advantages
too since a good rewards program should make your organization stand out from other
employers, reports the Society for Human Resource Management. Generally, there are
five pillars of a comprehensive rewards system: compensations, benefits, flexibility,
performance recognition and career development.

Wages and Salaries In the total rewards model, compensation is viewed holistically and
comprises not only base salary, but the other types of compensation that motivate
employees to perform well. For example, a variable-pay system rewards employees based
on performance. Once the employee achieves this level of pay, it must be earned again for
each subsequent pay period.

Short-term incentive pay offers extra compensation for short-term (less than a year)
performance improvements. Long-term incentive pay offers rewards such as stock
options and cash bonuses for sustained productivity and performance for longer than one
year. Top employees find these options attractive because they know they can
consistently outperform expectations.

Benefits That Go Beyond Within the total rewards framework, employers may seek to
offer benefits that go beyond the legally mandated minimum of Social Security insurance,
Medicare, unemployment insurance, worker’s compensation insurance and state disability
insurance. Your vacation package, along with leave of absence, sick leave and
bereavement leave, can attract topnotch employees. Consider offering a variety of
retirement plans from simple Individual Retirement Accounts to retirement benefits plans.

The aim is to give employees a positive perception of the benefits on offer, so you may
wish to consider a flexible benefits or cafeteria program. These programs give employees
'benefits credits' equal to a fixed dollar amount which they can 'spend' on whatever
combination of benefits they prefer. In March 2019, 37 percent of government workers
and 14 percent of private industry workers had access to flexible benefits, reports the
Bureau of Labor Statistics.

Work-Life Balance Your work environment should promote a healthy balance between
work and personal time. If you create an atmosphere that recognizes your employees’
needs to have a work schedule that allows them to get enough rest, you foster better
morale. Offer flexible scheduling for those who must take care of elderly dependents.
Promote wellness through fitness facilities, nutritional counseling, health screenings and
stress-reduction workshops. Offer a child-care facility. Consider offering financial
counseling that includes planning for retirement and an overview of investment
alternatives.

Recognizing Good Performance

Institute a system of recognition awards including peer recognition and team recognition.
These awards are voted by the recipient's co-workers and can boost morale by singling
out exceptional performances. You can add employee-of-the-month awards and
appreciation luncheons to let employees know you are aware of excellence in the
workplace. You can also offer recognition for employees who reach specific goals.

Career Development

If you offer professional development, you not only foster employee loyalty, you improve
the skills of your workforce. Provide tuition assistance, technology training, time off for
outside seminars or mentoring programs that help employees grow in their careers.

Approaches to International Compensation- There are two basic approaches to

determine the international compensation package:

1. Going Rate Approach This is based on local market rates. It relies on comparisons
of surveys of the local nationals, expatriates of the same nationality and expatriates of
all nationalities’ pay packages. In this approach, the compensation is based on the
selected survey comparison. The base pay and benefits may be supplemented by
additional payments for low pay countries.
 The advantages of the Going Rate Approach are,
● Equality with local nationals
● Simplicity
● Identification with the host country
● Equity amongst different nationalities

The disadvantages of Going Rate Approach are,

● Variation between assignments for the same employees
● The rivalry between expatriates of the same nationality in getting assignments to
some countries
● Potential re-entry problems in the home country

2. Balance Sheet Approach: The Balance Sheet Approach to international

compensation is a system designed to equalize the purchasing power of employees at
comparable position levels living abroad and in the home country and to provide
incentives to offset qualitative differences between assignment locations. The balance
sheet approach is widely used by international organizations to determine the
compensation package of the expatriates. The basic objective is the maintenance of
living standards of the home country plus financial inducement

1. Goods and Services: Outlays incurred in the home country for food, personal care,
clothing, household furnishing, recreation, transportation, and medical care.

2. Housing: All major costs associated with housing in the host country.
3. Income Taxes: Parent country and host country income tax expenditures.

4. Reserve: Contribution to savings, payments for benefits, pension contributions,

investments, education expenses, social security taxes, etc.

The advantages of the Balance Sheet Approach are:

● Equality between assignments and between expatriates of the same nationality.
● Facilitates expatriate re-entry
● Easy to communicate to the employees

The disadvantages of the Balance Sheet Approach are:

● It can result in considerable disparities between the expatriates of different
nationalities and between expatriates and local nationals.
● It can be quite complex to administer due to changing economic conditions,
taxation etc.

Repatriation issues

Everyone expects expats to have an adjustment period when moving to a new host
country, but what about when they return home? Most expatriates underestimate the
potential challenges to readjusting to life in their home country after an international
assignment. However, studies have shown that repatriation is often the most
challenging phase of an expatriate experience. Many people face both work-related
and personal repatriation challenges:

Work-related
● loss of visibility and isolation
● changes in the home workplace
● adjusting to the re-entry position
● others devaluing the international experience

Personal
● making assumptions of how quickly you will fit back in
● unrealistic expectations of life at home and how it has changed
● social readjustment as friend and family relationships have changed
● difficulty supporting family members experiencing reverse culture shock

Even more distressing is the fact that most companies do not sponsor repatriation
programs to help assignees and their families adjust to their move back home.

To make repatriation a more positive experience, follow these tips:

● Keep up with current events and trends back home so that you will be up-to-date
with what is going on when you move back.
● Be sure to keep in touch with your family and friends while away to maintain
healthy relationships. Email or write to them often so that they will be familiar with
what you have experienced in your time away from home.
● Have a mentor or an associate in the old office who keeps you informed and keeps
your name in circulation while you are on your assignment.
● Make sure your new position at re-entry is clearly defined: review expectations and
clarify misconceptions.
● Make a list of what to take care of before departing your host country and also what
you need to do once you arrive back home.
● Relax! Anticipate an impact and be prepared for the unexpected.

International trends in global total reward

1. Hybrid working
Although the Covid-19 pandemic has shown signs of easing, businesses have had to
keep some safeguards in place. Working from home has become the norm and some
experts say that some sectors will never return to the office. Research backs this claim
up. Benefic the Future of Work report found that 59% of people in Denmark wanted
to work from home in the future while PWC’s August 2021 survey found 41% of a
group of remote workers wanted to stay fully remote. It’ll mean some companies will
have to adapt their rewards and benefits for their employees. This might include office
equipment for the home (eg rising desk, ergonomic chair) or critical communication
tools such as a reward and benefits platform or mobile app. The need to communicate
with employees whenever and wherever they are has never been more acute.

2. Employees matching companies to them

Following on from hybrid work is the fact that employees have started to match their
needs to what an employer can offer or provide. This is intrinsically linked to what’s
been hailed as ‘The Great Resignation’ when people quit their jobs en masse,
especially in the USA at the beginning of 2021.

The reasons for the exodus of employees in 2021 may differ from what is now
happening at the start of 2022. Employees who have got used to working from home
are looking for companies who offer better rewards and benefits and hybrid working
has meant that some have moved location if remote work is going to become the
norm.

Therefore, employees are looking for employers who offer freedom to work from
home and this also means employees can also consider moving to more remote
locations to work. Companies who offer this kind of flexibility also find it easier to
retain their employees.

3. Employee engagement through digital tools

It’s critical for companies to have the best communication tools to reach their
employees, especially when they are working remotely. With a reward and benefits
platform or mobile app, you can communicate online events to everyone at your
organization, specific teams or specific individuals.
Employees can also see their total value through the platform – for example, how
much health and wellbeing contribution they have, or how much their pensions are
worth or how much holiday they are entitled to. When HR is streamlined through
digital tools, employees are engaged and motivated for the work ahead of them.

4. Health & wellness

A 2018 report by the OECD said that mental illness was costing the UK £94 billion a
year when costs for treatment and social support were factored in, and figures released
by First Care for World Mental Health Day suggest that 60% of workers leave their
job due to the same reason. With the pandemic also leaving some people feeling
isolated, employers need to offer employees not only health and wellness benefits, but
also other benefits, such as relaxation and spa treatments.
This is where digital tools are engaging with employees. More and more companies
are offering their employees generous health and wellness contributions through their
total rewards platform to tackle mental health issues head-on. Companies that offer
health and wellness contributions can reduce employee absence caused by mental
illness.

5. Work-life balance

With our homes having also become our offices, work-life balance today means going
for a run in the middle of the day, reminding ourselves to take breaks, and switching
off at the end of the day to spend time with our families. Combined with hybrid work
and offering employees flexibility in their working day, work-life balance is a trend
that is easily managed with a total rewards platform, where employers can gauge each
employee’s health and wellbeing, as well as targeting tailor-made benefits at them