Performance management: insights for talent mobility professionals By Olivier Meier, Mercer We tend to look at mobile employees’ performance through the prism of compensation issues – i.e. setting annual bonuses, a task usually managed by local compensation teams rather than mobility professionals. Yet, it is difficult to imagine successful talent mobility approaches without making informed decision about employees’ performance before, during, and after international assignments. The question of performance goes beyond compensation and links the purpose of assignments, companies’ business goals, and the career progression of employees. Performance management: a work in progress Mercer’s recently published 2019 Global Performance Study provides useful lessons for talent mobility managers. Some 70% of respondents to the Mercer study indicated that there is a need to improve the link between performance management and talent management decisions. However, performance measurement is traditionally associated with compensation objectives and owned by the compensation function. The risk is to have a siloed vision of performance that separate pay issues from career elements such as promotion, personal development, and succession planning. The aspects related to personal development, succession planning, and feedback/coaching processes are precisely the ones that require the most work, according to the respondents. Source: Mercer 2019 Global Performance Study In the context of international mobility, the risk of a missing link between performance evaluation and talent management can prove even more detrimental for both the assignees and the companies. Career development and succession planning are at the heart of global mobility objectives, yet companies often struggle to find suitable jobs for their assignees upon repatriation and frequently fail to use or even recognize the newly acquired skills of international assignees. Assignees risk falling through the global talent management cracks Who is managing the performance of international assignees? The receiving business unit is commonly involved but might have only a limited understanding of the assignees’ previous experiences and long-term career path. The home country of the relocated employees might be involved in the process but might not be able to judge the performance on assignment without detailed input from the receiving business unit. This complex coordination exercise (or worse, the absence of it) reinforces the tendency to narrow down performance management to a short-term compensation exercise disconnected from the global business objectives and the long-term personal goals of mobile employees. Linking individual goals and business objectives The absence of systematic linkage between individual goals and the company’s priorities is viewed as problematic for all employees and not just mobile ones: Mercer’s Performance Management study finds that, globally, 83% of companies set individual goals but only 56% require business unit goals. This means that many managers are setting individual goals in a vacuum without connecting the employee goals to the broader business unit’s goals or company’s priorities. Furthermore, the study reveals that employees increasingly want their managers to know them personally and understand their professional development journey. This finding is in line with the recent 2019 Mercer Global Trends study that shows that “thriving employees are three times more likely to work for a company that understands their unique skills and interests, compared to their non-thriving peers.” Defining success and failure: the missing part of the assignee performance equation The lack of clear definition of failed assignments is another problem when trying to evaluate performance: in Mercer’s Worldwide Survey of International Assignment Policies and Practices, 52% of respondents indicated they didn’t have a definition of failed assignments. The organizations who do have a definition commonly use criteria such as assignment completion and “meeting business objectives”. However, these criteria remain vague and don’t capture all possible scenarios. Failed assignments are not just about employees terminating assignments prematurely. They are also about low productivity while on assignment, assignees who leave the company shortly after the end of the assignment, or even the lack of succession planning in the host location. Defining assignment-specific goals Assignment-related goals might include: Training the local workforce by transferring knowledge and skills as well as the company culture Preparing a local peer to replace the expatriate Developing the assignee’s own skills or following a personalized development program Ensuring that the improvements and changes brought by the assignees are sustainable over the long-term Mentoring new assignees A timeline can be established for these goals: the beginning of the assignment might be about integrating successfully in the host business unit and becoming operational quickly. During the assignment, the goals might shift to achieving specific business outcome or changes and training the local workforce. During the last year of the assignment, the priority could be to select and prepare a successor as well as securing the sustainability of the new measures and changes implemented by the assignee. The assignment-related goals can be refined further by the type of assignments. We tend to think of segmentation as a way to differentiate policies and packages, but performance also has to reflect assignment segmentation. A developmental move would emphasize personal development objectives with clearly a defined learning point and milestone while a strategic move might be more focused on creating sustainable changes and business improvements. Looking ahead: the future of performance management The Mercer performance study concludes that to deliver on its promises performance management will require greater goal clarity (especially in the context of fast business changes), more empathetic and action-oriented managers who can deliver effective coaching, and more generally fostering an integrated people strategy. It also predicts that traditional annual merit increases might gradually be replaced by nimbler approaches and that high performers may be more often rewarded through incentives, promotions, and mobility. Just like local employees must understand the implication of their performance on their career progression, international mobile assignees need to be clear about the impact of their assignment performance on their opportunities within the company. AI applications will have a role to play by facilitating and aggregating performance feedback providing by a range of people based in different geographies rather one single manager. The role of manager itself might need to shift in the direction of coaching employees for future success rather than passively evaluating past performances.