Conflicting Expectations Analysis

Conflicting expectations: Where pay and performance collide

UpTech Support is a medium-sized US company, based in Silicon Valley, California, operating in the intensely competitive computer industry: Its main area is the development of software support systems. It had survived the so-called 'Internet bubble burst', its management believed, because the company had resisted the temptation to move from its area of core competence. Instead, UpTech Support concentrated on building up relationships with its key clients. Consequently, it was now a successful company in its market niche, with sales offices in the major cities across the USA. Its international operations, however, were small, with a sales subsidiary in Canada, one in France and, recently, a sales subsidiary in Australia. The Canadian office had been established early in the 1990s and was treated by staffwithin the US headquarters as merely an extension of the US operation. The choice of the other international markets was somewhat fortuitous. UpTech Support's major US client had formed a strategic alliance with a French counterpart, and UpTech Support had been successful in extending its service to the French-based entity. The Australian initiative was likewise due to following US clients. In both ofthese markets, international activities were confined to sales and client service with the US headquarters responsible for product development. This morning, two top executives of UpTech Support are trying to understand how what had seemed a simple salary decision developed into a major issue. Jessica Kellaway, the Vice-President of International Operations, was particularly perplexed. She read carefully the report Steve Hegworth, the Human Resource Director, had compiled. Pierre Lecruet had seemed the logical choice to send to Australia to head the local operation. Why was he now focused on his salary package rather than concentrating on improving UpTech Support's market position? Jessica voiced this concern aloud. 'I am at a loss here, Steve. We hired Pierre 5 years ago when we established the French operation. He did an excellent job in terms of the French market, but now he seems to be only interested in how much money he can extract in terms of pay and benefits.' Steve agreed, 'It is strange. Pierre had discussed his career aspirations with us during a routine performance appraisal session before the Australian position arose. The company was performing well in France, and Pierre had considered that the job was losing its challenge. As Managing Director, there was nowhere else for him to go within the French operation.' Indeed, it was with some relief to all concerned that Pierre accepted the challenge of repeating his French success in the new Australian initiative. At the time, Jessica and Steve were in agreement that using a trusted manager with a proven track record seemed to be less risky than employing an unknown local Australian. Steve continued, 'Pierre knew that if he performed as expected in Australia, there were plans to move him into a position within the top management team here at headquarters in Silicon Valley. What that position may be is, at this stage, somewhat vague, Jessica. As I said, it is strange we are now having problems.

Pierre is so ambitious. He must know that his current behavior will have a negative impression here and affect his future with us.' 'Yes,' agreed his colleague, 'and perhaps with hindsight we should have employed an Australian. After all, that is what we did in Canada, and France, for that matter, when we hired Pierre. Or perhaps we should have sent someone from here.' His American colleagues were right. Pierre was ambitious and had taken on the Australian position with great eagerness. Here was an opportunity to prove that he was deserving of a top management position within the US operations. The decision to relocate to Sydney had not been so straightforward on the personal Side, though. The expatriate contract stipulated a minimum period of 2 years, with the possibilities ofan extension should the situation warrant it. Pierre's wife, Sabine, had her own career and it was. difficult to ask if she would be prepared to resign her current position - to put his needs before hers. Sabine had just recommenced her teaching position after spending several years at home. Their youngest child was now ofschool age, and Sabine was happy to be back in a part-time position at a local high school. In the end, they agreed that Pierre would spend the fIrst 6 months in Sydney alone. That would give him time to settle into the new work environment, find suitable accommodation for the family and explore suitable schools for their two children. It would give Sabine an extra 6 months working as a teacher, and minimize the disruption to their children's education. Work consumed Pierre's time - apart from two quick visits home to Paris. It had been agreed that Pierre would be paid according to his home base salary; with the usual variable bonus linked to performance. When Pierre received his first payment in Sydney, he was surprised to find that Australian base salaries were higher on average. 'However, he has too busy establishing the new operation to spend much time worrying about it. BeSides, he was being paid in Euros, which were enjoying a favourable exchange rate with the Australian dollar. It was when the family joined him in Sydney that the problems started. First, he moved from a small flat into a family-sized house. Sydney is the most expenSive city in Australia, and rental charges reflected this. As they owned their own spacious apartment in Paris, paying rent in Sydney was a noticeable outlay. Although they were renting out the Paris apartment, they had financial responsibilities at home that needed to be covered by that relatively small income. Second, the children were shocked to fInd that they were expected to operate in English at school. Sabine had investigated the possibility of the children receiving additional French lessons proVided by the organization Alliance Fran