Question 1

Why do organizations use performance management systems?
A) Identify organizational talent
B) Leadership development
C) Succession planning
D) All of the above

Accepted Answer

Performance management systems are used by organizations to achieve multiple goals, including identifying organizational talent, developing leadership skills, and planning for succession. Therefore, all of the choices (A, B, and C) are valid reasons for using performance management systems.

Question 2

What is an example of a soft factor that influences expatriate performance?
A) Ability to establish relationships
B) Generating profit
C) Increasing market share
D) All of the above.

Accepted Answer

Soft factors refer to personal characteristics that affect an expatriate's experience and performance in an international assignment, such as cultural adaptability, communication skills, and the ability to establish relationships. Generating profit and increasing market share are hard factors that focus on the business outcomes of the assignment. Therefore, choice A is the best answer as it aligns with the definition of a soft factor.

Question 3

In the strategic flexibility approach, what does a compensation packages consist of?
A) Core
B) Crafted
C) Choice
D) All of the above

Accepted Answer

A compensation package in the strategic flexibility approach consists of all three elements: core, crafted, and choice. The core is the base salary, benefits, and other compensation that applies to all employees. The crafted element is designed for certain employees based on their skills, experience, and performance. The choice element offers employees a menu of benefits and compensation options that they can choose from based on their personal needs and preferences. All three of these elements work together to create a flexible compensation package that can adapt to the changing needs of the organization and its employees.

Question 4

Which is a common allowance given to expatriates?
A) Cost of living allowance
B) Hardship premium
C) Base salary
D) Benefits

Accepted Answer

Cost of living allowance is a common allowance given to expatriates to cover the difference in the cost of living between their home country and the host country. This allowance helps employees maintain a similar standard of living as they did in their home country.

Answer: B) Hardship premium
 Hardship premium is also a common allowance given to expatriates who are being sent to a difficult or challenging location. This allowance is designed to compensate employees for the additional inconvenience, danger, or hardship associated with living and working in the host country.

Question 5

What is considered good performance in individual cultures?
A) Employee's productivity
B) Group harmony
C) Trustworthiness
D) Respectful attitude

Accepted Answer

Good performance in individual cultures is often measured by an employee's productivity, as these cultures typically emphasize personal achievement and results.

Question 6

What would limit the effectiveness of performance based pay?
A) Link it to the strategy of the organization
B) Ensure its consistency
C) Failure to tailor rewards to the situation
D) Use it to motivate employees

Accepted Answer

Failure to tailor rewards to the situation can limit the effectiveness of performance-based pay. This means that if the rewards are not aligned with the specific goals and objectives of the organization, it may not motivate employees to perform better. Tailoring rewards to the situation ensures that they are meaningful and relevant, making them more effective in motivating employees to improve their performance. Linking it to the organization's strategy and ensuring consistency are also important factors that can enhance the effectiveness of performance-based pay, but they are not relevant to the question. Using it to motivate employees is the purpose of performance-based pay, and not a limitation.

Question 7

Which compensation approach is the most cost effective?
A) Host country approach
B) Home country approach
C) Global approach
D) None of the above

Accepted Answer

The Host Country Approach, also known as the Localisation approach, is generally the most cost-effective compensation strategy for multinational companies. This approach bases an expatriate's pay and benefits on the local standards of the host country where they are working. It can lead to significant savings, especially when the host country's cost of living and salary levels are lower than those of the home country.

Question 8

What is the most type of common compensation on short-term assignments?
A) Reimbursement for travel and accommodation
B) Mobility premium
C) Housing allowance
D) Spousal assistance.

Accepted Answer

Reimbursement for travel and accommodation is the most common compensation on short-term assignments as it covers the expenses of the employee for the duration of the assignment. This includes costs for transportation, lodging, food, and other related expenses. It is essential to ensure that employees are reimbursed for these expenses to avoid demotivation, dissatisfaction, and underperformance due to financial issues.

Question 9

What effect can giving individual feedback have in collectivist cultures?
A) Develops the employee
B) Enhances productivity
C) Disturbs group harmony
D) No effect

Accepted Answer

Individual feedback in collectivist cultures may create a sense of separation between an individual and the group, which could disturb group harmony. Collectivist cultures value group cohesion and harmony over individual success or recognition, thus individual feedback may not be valued in the same way as it is in individualistic cultures.

Question 10

What type of performance pay is more likely in collectivist cultures?
A) Merit pay
B) Competency based pay
C) Ownership
D) Promotion

Accepted Answer

In collectivist cultures, ownership-based performance pay is more likely. This is because collectivist cultures emphasize the importance of group success rather than individual success. Ownership-based performance pay allows employees to feel a sense of ownership and contribution towards the overall success of the organization, which is highly valued in collectivist cultures. Merit pay and competency-based pay are more common in individualistic cultures. Promotion may be a factor in both collectivist and individualistic cultures, but it is not considered a type of performance pay.

Question 11

Which of the following is a feature of developmental performance management?
A) Develop the bases for promotions
B) Communicate unsatisfactory performance
C) Enhance commitment through discussion about careers
D) Develop bases for decisions about compensation.

Accepted Answer

Developmental performance management focuses on enhancing employee growth, commitment, and satisfaction by discussing future career paths and opportunities, rather than solely focusing on compensation, promotions, or performance issues.

Question 12

Which is a reason why expatriate appraisals should be more frequent?
A) Stable business conditions
B) Determining problems earlier makes them easier to solve
C) It is easy for raters to recall information
D) Annual performance appraisals are effective

Accepted Answer

Determining problems earlier makes them easier to solve. Expatriate appraisals should be more frequent as it allows for the identification of any issues or areas for improvement earlier on, making it easier to address them before they become bigger problems.

Question 13

Which of the following is a feature of evaluative performance management?
A) Provide feedback
B) Develop professional skills
C) Motivate employees through recognition
D) Enhance commitment

Accepted Answer

Evaluative performance management primarily focuses on assessing and providing feedback on an employee's performance.

Question 14

What is the aim of tax equalization as a part of compensation?
A) Provide extra money in case of tax discrepancies
B) Lower the tax obligation of the organization
C) Provide that expatriates neither gain nor lose as a result of taxation
D) A bonus to incentivize expatriates.

Accepted Answer

Tax equalization aims to ensure that expatriates neither gain nor lose as a result of taxation. It achieves this by equalizing the tax burden of the expatriate's home country and host country, such that their overall tax liability remains the same as if they had not been sent on an international assignment. This provides a fair and equitable compensation package, which helps to attract and retain top talent for global mobility roles. A and B are incorrect because tax equalization does not provide extra money or lower the tax obligation of the organization. D is incorrect because tax equalization is not a bonus but rather a standard component of a comprehensive expatriate compensation package.

Question 15

In which case are 360 degree performance appraisals most appropriate?
A) Countries with high power distance
B) Countries with lower power distance
C) Countries with collectivist culture
D) They are never appropriate

Accepted Answer

360 degree performance appraisals are most appropriate in countries with lower power distance, where there is more emphasis on teamwork and collaboration. In collectivist cultures, such appraisals may also be effective as they focus on input from multiple individuals rather than just the supervisor. However, in countries with high power distance, such appraisals may not be as effective as employees may be hesitant to provide feedback to their superiors or may take feedback from peers and subordinates with less weight. Therefore, option B is the best choice. Option D is incorrect as 360 degree appraisals have been found to be effective in many contexts.

Quiz 8: Global Performance Management and Compensation

Why do organizations use performance management systems?

What is an example of a soft factor that influences expatriate performance?

In the strategic flexibility approach, what does a compensation packages consist of?

Which is a common allowance given to expatriates?

What is considered good performance in individual cultures?

What would limit the effectiveness of performance based pay?

Which compensation approach is the most cost effective?

What is the most type of common compensation on short-term assignments?

What effect can giving individual feedback have in collectivist cultures?

What type of performance pay is more likely in collectivist cultures?

Which of the following is a feature of developmental performance management?

Which is a reason why expatriate appraisals should be more frequent?

Which of the following is a feature of evaluative performance management?

What is the aim of tax equalization as a part of compensation?

In which case are 360 degree performance appraisals most appropriate?