A local perspective to expatriate success

Executive Overview Many expatriate human resource (HR) policies, particularly in the area of compensation, remain rooted in the past because they continue to favor the expatriate over local staff and do not take into account the increasing qualifications and aspirations of these local employees. Inequitable treatment leads to low commitment and poor work performance among local staff. More importantly, inequitable treatment creates tension between local and expatriate employees and causes the local staff to be less willing to be cooperative or supportive of the expatriates with whom they have to work. Without local support, expatriates may experience greater difficulty adjusting to their new jobs and the new environment, which is a contributing factor in the failure of expatriates. To minimize these problems, HR practices of expatriating organizations should focus on providing more equitable compensation for local and expatriate employees, selecting expatriates who are truly worthy of the higher pay, and increasing the transparency of pay practices so that local employees can see the linkage between work inputs and compensation more clearly. Managers at the local organization should emphasize favorable referents for local staff, breed organizational identification among the employees, prepare the local staff for incoming expatriates, and encourage them to assist and mentor incoming expatriates. It is critical that multinational companies (MNCs) are aware that some existing HR practices have potentially unintended negative consequences and that neglecting the impact of these practices on local employees hurts the effectiveness of the organization as well as the ability of expatriates to succeed in their assignment.