Performance Management Processes in Multinational Corporations


With the development of agile management methods and the rising value of the individual characteristics of each employee, performance management is becoming more and more relevant. The performance management system is a specific technique, which is implemented in order to evaluate the performance of employees (Thorpe, 2015). Performance management systems rely on two-way techniques as they are designed to both collect data related to worker efficiency and provide the person with information regarding the organization’s mission and goals. There are several objectives performance management is designed to achieve. First, it is utilized to maintain strategic planning by ensuring that the individual goals of employees correspond with the general objective of the company. Second, it serves specific administrative purposes. As performance management evaluates the productivity of employees, it also provides sufficient data to arrange promotions, salary changes, and human resource management in general. Third, it plays a significant role in the development of communication in the organization. It may be necessary to obtain data regarding workers’ values and goals to optimize workflow.

Performance management is also an essential part of employee development and organizational maintenance. It provides valuable knowledge related to the strengths and weaknesses of individual workers and divisions of the corporation. Therefore, it may serve as a background for critical management decisions such as staff training, mentoring, or coaching. Finally, performance management requires documentation in order to be fully operational. Performance management is particularly suitable for companies that have diverse labor with distinct needs, skills, and abilities. Hence performance management is entirely in line with the requirements of multinational corporations in terms of labor management. It has a wide application in transnational corporations globally and provides sufficient techniques and frameworks.

Expatriate Development in Performance Management

As already mentioned, employee development is an essential part of performance management. It is particularly vital in terms of transnational corporations and expatriates. A wide variety of unique aspects such as studying language, improving communication skills, and obtaining culture-related knowledge should be considered. It may be necessary to provide the expatriate with sufficient information about the distinctive features of the host community and targeted market (Varma et al., 2020). It is also critical to obtain data regarding the expatriate’s strengths and weaknesses before the assignment. The employee should be provided with the required training in order to successfully recoup expatriation costs. Hence employee development is of particular importance in the context of performance management processes in transnational corporations.

Providing Job Opportunities for Returning Expatriates

Another relatively unique and essential aspect of international performance management is to offer returning expatriates opportunities to implement the lessons from the expatriation experience. In many cases, transnational corporations do not provide good job opportunities for employees returning from international assignments (Varma et al., 2020). Such an attitude may lead to a list of harmful and costly consequences for the company. First, returning expatriates may become unsatisfied with their job as there are no opportunities to implement their new knowledge. As a result, they leave the company, and it loses valuable employees. Second, corporations miss the chance to learn from the experience of foreign specialists. It may be vital to provide returning expatriates with unique assignments to efficiently utilize their knowledge.

Monitoring Communication between Expatriates and the Host Organization

It may be necessary to monitor and maintain healthy communication between the expatriates and both the host and home organization. However, particularly significant challenges may occur in communication with the host company. According to various studies, expatriates need help to effectively adjust and perfectly perform in unfamiliar circumstances (Razafiarivony, 2006). Expatriates who received support tend to adapt and perform at higher rates. Such support includes guidance in adjusting to the local community and learning about cultural aspects. Supportive information related to the infrastructure of the targeted country may also contribute to a performance increase. By providing such support, the host country may decrease the difficulties faced by the expatriate and help the employee focus on the work process.

Development of Clear Performance Goals

It may be important to maintain healthy relationships between international employees and host supervisors. Communication is one of the most significant aspects of global business. However, there is an essential aspect that is relevant for both domestic and international performance management. An employee should be able to fully understand and follow performance goals. Providing accurate and up-to-date objectives is critical to improving employee performance. It is especially vital in terms of international business. First, expatriate programs are expansive and limited in time. Therefore, introducing precise and relevant objectives may not only decrease the needed time but also lower the costs. Second, expatriate programs are frequently competitive, and completion delays may lead to losing the market share to competitors.

Adapting Performance Goals for Diverse Expatriates

As expatriate assignments are extraordinarily diverse and have unique features, it may be necessary to provide an individual approach to every program. Personal aspects should include designing distinct objectives and performance goals to comply with the targeted organization and project. Transnational corporations are influenced by numerous factors, and it may not be possible to develop a unified framework to approach emerging issues. Adapting to changing environments and new circumstances may be a continuous task for multinational businesses. There are numerous examples of giant transnational corporations failing in market entry because of insufficient consideration of their distinctive characteristics. Being flexible and providing expatriates with relevant objectives may be the key to success on an international level.

Possible Challenges

Some of the challenges closely linked with performance management in multinational corporations were already mentioned. However, international performance management is complicated and is influenced by a large number of factors. Hence there are more significant challenges that should be considered. Lack of prior international experience may represent a fundamental challenge related to the subject. It may not be possible to obtain such knowledge and experience from external sources. Therefore, in some cases, expatriating an employee with no international experience is the only option. In order to minimize associated risks, it is particularly critical to provide as much relevant information and training as possible. Another challenge is related to the influence of cultural distance. Cultural aspects may often become communication barriers and prevent effective performance management. Taking cultural factors into consideration may contribute to the achievement of multinational goals.


Performance management provides a wide variety of effective techniques, which may be implemented in modern businesses. Hence, it is becoming more and more popular, and employers pay careful attention to employee performance. It is especially relevant in the context of transnational relationships and management. Performance management methodology is directly applicable in multinational corporations as it addresses a large number of specific issues. Conclusively, the implementation of flexible performance management strategies may significantly improve labor productivity on both domestic and international levels.


Razafiarivony, M. A. (2006). Expatriates and the Performance Management System. Journal of Adventist Mission Studies, 2(2), 89-96.

Thorpe, R. (2015). Performance Management. Palgrave Macmillan.

Varma, A., Wang, C.-H., & Budhwar, P. S. (2020). Performance Management for Expatriates. Global Mobility and the Management of Expatriates, 80–99. Web.

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