Human Resource Management in an international organization involves a combination of activities that maintain, develop and attract an effective workforce required to achieve the company’s objectives (Mathis amp. Jackson, 2007). International human resource management (IHRM) deals with managing the expatriates and deals with how the expatriates adjust to the foreign culture and the management of a diverse workforce (Cieri amp. Et. Al., 2005). Organizations need to put in place an effective performance appraisal system to develop global and expatriate managers. Global performance appraisal is a strategic process that helps the multinational corporations to continuously improve their global operations through their employees by matching up to certain pre-set objectives. International Performance Appraisal (IPA) sets the basis for compensation, rewards, and promotions (Shen, 2010). The subsidiaries of the MNCs have different employees of different nationalities which makes performance appraisal a critical task. Employees in the subsidiaries are the Parent Country National (PCN), Third Country nationals (TCN) and the Host Country National (HCN). TCN and PCN together are known as expatriates. Parent Country Nationals are the citizens of the country to which the organization belongs and they have the same cultural background as the employees in their corporate headquarters. They do not have any knowledge about the host country’s culture, social and political conditions (Denisi amp. Griffin, 2005). Host Country Nationals are the residents of the host country in which the company operates and they are aware of the local culture, social and economic conditions (Denisi amp. Griffin, 2005). Third Country Nationals are people who neither belong to the parent country nor to the host country. They bring diversity in the organization and the organization benefits from their experience (Denisi amp. Griffin, 2005).
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