Professional Documents
Culture Documents
Chapter 07
Chapter 07
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Chapter Seven Performance Management
Structure
1) Introduction
2) Challenges of international performance management .
3) Areas to be appraised.
4) Organizational role expectations.
5) Who should appraise the performance?
6) System of performance appraisal.
7) Problems of performance appraisal.
8) How to make appraisal effective?
9) Conclusion
10) Summary.
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Chapter Seven Performance Management
7.1 Introduction
Managing employee performance based on the organizational
needs, strategic requirements and customer preferences
is crucial aspect of international human resource
management. MNCs incur high cost on human resources
due to employment of different kinds of foreigners.
Therefore, they expect the foreigners to perform
distinctly and create , contribute and add significant
value to the organizational activities.
Foreign employees are also aware of their cost to MNC and
are concerned to contribute phenomenally to the
organization goals and strategies.
MNCs encounter critical challenges in the process of
international performance management.
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Chapter Seven Performance Management
7.2 Challenges of international performance management
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Chapter Seven Performance Management
7.2 Challenges of international performance management
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Chapter Seven Performance Management
7.2 Challenges of international performance management
Standard format versus Customized format.
Normally parameters like profits, return on investment, cash
flows, productivity, sales per employee, punctuality, rate
of customer complaints etc are applied to employees in a
group for measuring their performance. Some MNCs
additionally apply qualitative parameters like innovation,
leadership , motivation, judgement , adaptability etc for
performance appraisal.
Should the HQ and subsidiaries adapt the same and standard
criteria / performance factors or different criteria.
Different criteria are appropriate for their individual
environments but vitiate uniformity of performance
rating. For a PCN working in a subsidiary should we
apply HQ or host country criteria is another question that
has no clear answer.
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Chapter Seven Performance Management
7.2 Challenges of international performance management
Standard format versus Customized format.
Organizational performance in terms of sales, profits,
repatriation of profits is influenced by the regulations of
the host country’s Government like issuing license or
canceling the issued license, exchange rate controls,
immigration and migration controls, tariffs, subsidies and
employment of nationals.
Therefore, increase [or decrease] in profits can’t be always
attributed to the performance of the employee alone.
In fact MNCs cannot follow a standard format of performance
rating as the influences of environmental factors vary
from country to country and hence from subsidiary to
subsidiary.
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Chapter Seven Performance Management
7.2 Challenges of international performance management
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Chapter Seven Performance Management
7.2 Challenges of international performance management
Uniformity of Data of Performance.
Accounting standards differ due to cultural factors that decide
the degree of conservatism with which accounts are
prepared. Germans are very conservative while
Americans optimistic. Accounting system is also oriented
towards the information requirements of capital
providers – individual investors or bankers. Political ties
also determine systems that MNCs follow for accounting.
Historic cost versus inflation accounting provide profits
numbers that are not comparable. Advanced countries
procure financial resources from various sources in a
developed markets through a variety of financial
instruments and , therefore, follow a sophisticated
system of accounting. Thus level of economic
development also impacts data uniformity.
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Chapter Seven Performance Management
7.2 Challenges of international performance management
Environmental variations
In view of variations in environmental influences among
subsidiaries as well as different growth rates of
environments, employees’ performance across the
subsidiaries cannot be measured using uniform appraisal
criteria and scale.
Environmental factors became more vibrant after recent
phase of globalization which initiated trends towards
erosion of national cultures and formation of global
culture, establishment of WTO, EU and its currency
“Euro” , increased mobility of human resource, IT
revolution, large scale out sourcing, ‘glocal’ strategy etc.
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Chapter Seven Performance Management
7.2 Challenges of international performance management
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Chapter Seven Performance Management
7.2 Challenges of international performance management
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Chapter Seven Performance Management
7.2 Challenges of international performance management
► Rater’s competence.
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Chapter Seven Performance Management
7.2 Challenges of international performance management
► Rater’s bias.
The problems with subjective measure have opportunity for
bias. The rater bias include
: Halo effect – the raters have a tendency to
excessively depend upon rating of one trait or one
behavioural consideration rather than carry a balanced
appraisal of all traits or behavioural aspects.
: The Error of Central Tendency – Some raters follow
the safe policy of rating all employees at the mid point of
the rating scale and avoid rating at the extreme in spite
of the employee’s actual performance. Central Tendency
– Some raters follow the safe policy of rating all
employees at the mid point of the rating scale and avoid
rating at the extreme in spite of the employee’s actual
performance.
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Chapter Seven Performance Management
7.2 Challenges of international performance management
► Rater’s bias.
► Host environment.
► Cultural adjustments.
Adjustment of the employee to the organizational culture and
country’s culture and adjustment of employee’s family
members to the country’s culture significantly influence
the employee’s performance. This fact should be
considered in evaluation of the performance.
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Chapter Seven Performance Management
7.3 Areas to be Appraised
Strategist Operative
Consultant
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Chapter Seven Performance Management
7.3 Areas to be Appraised
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Chapter Seven Performance Management
7.3 Areas to be Appraised
The Strategist is the one who studies the environment under
which the subsidiary operates , identifies the
opportunities for new products / services / markets,
identifies the possible threats, strengths, weaknesses
and formulates appropriate strategy.
The Consultant is the one who is assigned with the task of
providing advice on operational or business issue.
The Innovator has a task of innovating a new product /
service based on the resources or the markets of the
host country or creating opportunities for new markets.
The Skills Transferor is the one who is assigned with the task
of developing the host country national employees of the
subsidiary . He /she stays in the host country for a short
duration and trains the locals to take up & perform the
jobs on their own.
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Chapter Seven Performance Management
7.4 Organizational Role Expectations
Parent companies predetermine the roles and expectations of
these roles from the parent country nationals before
their departure for the host country. The MNC has to
provide cross culture training along with information
about of the role expectations to expatriates.
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Chapter Seven Performance Management
7.4 Organizational Role Expectations
Organizational
Organizational
Culture of the Role content of
Norms of the
Parent company the PCN
Subsidiary
Culture of the
Culture of the
Host country
Parent company’s
country
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Chapter Seven Performance Management
7.4 Organizational Role Expectations
Organizational
Organizational
Culture of the Role content of
Norms of the
Parent company the TCN
Subsidiary
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Chapter Seven Performance Management
7.4 Organizational Role Expectations
The critical aspect of the role is the task performance. However, the
task performance does not take place on its own. The host
country environment and parent company expectations
influence the task performance.
Meeting
Conflicting
Leadership needs
Interpersonal
Relationships
skills
Teambuilding Job tasks
Parent company &
Cultural issues of
Subsidiary
Various countries
Understanding & expectations
adapting
Towards organizational integrity
culture Skills of
Managing
Motivational Environmental
skills influences
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Chapter Seven Performance Management
7.4 Organizational Role Expectations
Task: Job tasks are core of employee’s assignment. They include
duties and responsibilities of the job incumbent.
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7.4 Organizational Role Expectations
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Chapter Seven Performance Management
7.4 Organizational Role Expectations
Managing Environmental Influences : Both internal & external
environmental factors influence the job performance of foreign
employees. The skills of foreign employee in converting the
environmental factors in favour of the job enhance the
employee performance.
Motivational Skills: Cultures of certain countries make the
employees inhibitive of their skills, talents, and potentialities.
The motivational and inspirational skills of foreign employees
help them in motivating the national employees that enhances
the job performance.
Organizational Culture: Organizational culture sometimes
determines the mode of carrying the activities. The foreign
employee can use the skills only if he/she adapts to this
culture.
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Chapter Seven Performance Management
7.4 Organizational Role Expectations
Team Building : Team building skills of foreign employee
invariably enhance their job performance . These skills include
work along with others, carrying with others, understanding
the culture and the way others do the work, adjust one’s own
traits and the way of doing work towards others, skills of
collaborating with others’ ideas and talents.
These role factors should be taken into account in deciding the areas
to be appraised of a foreign employee. In addition, to the
organizational role , the foreign employees’ family roles like
spouse and parent influences on job performance should also
be considered. Employee skills and initiative in helping the
spouse and children in adjustment process forms a part of of
appraisal of the foreign employee.
.
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Chapter Seven Performance Management
7.4 Organizational Role Expectations
Parent company’s
Expectations from
Role perception The role conception of
of the HCN
the HCN Host Country National
Subsidiary’s
Role content of
Expectations from
the HCN
the TCN
Organizational
Organizational Culture of
Culture of the The subsidiary
Parent country
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Chapter Seven Performance Management
7.5 Who Should Appraise Performance?
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Chapter Seven Performance Management
7.5 Who Should Appraise Performance?
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7.6 System of Performance Appraisal.
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7.6 System of Performance Appraisal.
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7.6 System of Performance Appraisal.
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7.7 Problems in Performance Appraisal.
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Chapter Seven Performance Management
7.7 Problems in Performance Appraisal.
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Chapter Seven Performance Management
7.8 How to Make Performance Appraisal Effective?
The problems discussed could be overcome by adapting
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7.8 How to Make Performance Appraisal Effective?
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Chapter Seven Performance Management
7.9 Conclusion
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Chapter Seven Performance Management
7.10 Summary
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7.10 Summary
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7.10 Summary
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Chapter Seven Performance Management
Well students
this brings us to the end of our
session 07!
Next we move to session 08
On “Training & Development”
Development
Chapter eight.
Good Luck!
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Chapter Seven Performance Management