PERFORMANCE

MANAGEMENT
 PERFORMANCE
MANAGEMENT
 Performance management is a process that
enables the multinational to evaluate and
continuously improve individual,
subsidiary unit and corporate performance,
against clearly defined pre-set goals and
targets.
 BASIC COMPONENTS OF
PERFORMANCE MANAGEMENT

Multinational’s
Global strategies
And goals

Subsidiary
goals

Individual employee
(PCN, TCN, HCN) Performance
Job Analysis
Job goals and standards Appraisal

Training
MULTINATIONAL
PERFORMANCE MANAGEMENT
 CONSTRAINTS THAT MAY
AFFECT GOAL ATTAINMENT
 Whole versus part: Good of the whole is
more important than one subsidiary’s short
term profitability.
 A multinational establishes an operation in
a particular market where its main global
competitor has a dominant position. The
objective of entering the market is to
challenge the competitor’ cash flow with
aggressive pricing policies.
 A multinational establishes a joint venture
in a particular market in order to have a
presence there, even though it has low
expectations in the short term and may
provide minimum resources to the venture.
 Non comparable data: Frequently, the data
obtained form subsidiaries may be neither
interpretable nor reliable.
 Volatility of Global Market
 The turbulence of global environment requires
the long-term goals become flexible in order to
respond to potential market contingencies.
 Impact on international business of some major
events like- Collapse of the communist rule in the
late 1980s in Eastern Europe and the former
Soviet Union; the adoption of Euro as the single
currency; Chinese market reforms, Brexit etc.
 Separated by time and distance

 Judgments concerning the congruence between

multinational and local subsidiary activities are
further complicated by physical distance
involved, time zone differences, the frequency of
contact between the corporate head office staff
and subsidiary management and the cost of
reporting system.
 Variable levels of maturity

 Without supporting infrastructure of the

parent, market development in foreign
subsidiary is generally slower and more
difficult to achieve than at home, where
established brands can support new
products and new business areas can be
cross-subsidized by other divisions.
 IMPORTANT CONSIDERATIONS FOR
GLOBAL PERFORMANCE MANAGEMENT

 UPSTREAM CONSIDERATIONS
 Strategic Integration and Coordination
 Workforce Alignment
 Organization Learning and Knowledge
Management
 Strategic Integration and
Coordination
 Performance Management process should
by in sync with the strategic objectives of
the business unit and company as a whole.
 WORKFORCE ALIGNMENT
 The strategic alignment or common direction of
performance effected in the minds and hearts (i.e.,
knowledge, skills, and values) of the global workforce at
various levels throughout the MNC.
 It provides competitive advantages of the MNC in such
areas as worldwide customer responsiveness and service
consistency, agility, flexibility, change management,
growth management, effective knowledge management,
and internal sharing of best practices.
 Important step in achieving this:
Development of global leaders through
human resource processes throughout
MNCs who share common core values,
priorities, capabilities, and performance
based expectations.
 It will contribute to development of a
common global business culture.
 Coca-Cola, Citibank has common world
 ORGANIZATIONAL LEARNING AND
KNOWLEDGE MANAGEMENT

 Company-wide knowledge management

 learning organization: MNC facilitates the
learning of its members and continuously
transforms itself. 
 DOWNSTREAM
 Responsiveness to local conditions
 Sensitivity to cross-cultural differences
 Establishment of performance
management relationship
 Comprehensive training
PERFORMANCE MANAGEMENT OF
INTERNATIONAL EMPLOYEES
 PERFORMANCE
MANAGEMENT PROCESS
 Five Major phases:
 Job Design
 Agree on clear Job Performance Goals
 Provide direction, immediate performance
feedback and coaching
 Monitor job progress
 Conduct Performance Appraisal
 VARIABLES AFFECTING
EXPATRIATE PERFORMANCE

 The compensation package

 The task-the assignment task variables and
the role of the expatriate
 Headquarters' support
 The environment in which performance
occurs- the subsidiary or foreign facility
 Cultural adjustment – of the individual and
the accompanying family members
COMPENSATION PACKAGE
 One of the key factors closely associated
with expatriate performance.
 Perceived financial benefits, along with the
career progression potential are often
important motives for accepting the posting.
 Balancing factor for the emotional
relocation.
 TASK
 Hays (1974) identifies four expatriate task
roles:
 The Chief Executive Officer
 The Structure Reproducer
 The Trouble Shooter
 The Operatives
 Task has considerable impact on employee
performance.
 A tougher task tends to evoke better
performance than a job which is relatively
easy to handle.
 Performance depends more on the attitude
than the task itself.
 PCN ROLE CONCEPTION

Communicates
Role Perception
Multinational PCN Manager
(Role Sender) (Role Recipient)

Cultural
Boundary

Host Country
Stakeholders PCN Manager’s
(Role senders) Role Behaviour
 TCN ROLE CONCEPTION
Cultural Boundary

Communicates
Role Perception P
Multinational
TCN Manager
(Role Sender)
(Role Recipient)

Cultural
Boundary

Host Country
Stakeholders TCN Manager’s
(Role senders) Role Behaviour
HEADQUARTERS’ SUPPORT
 Specific support facilities required from the
headquarters-
 In managing the practical problems of setting up
home in a new culture is essential for enabling
the expatriate to settle down.
 The provision of timely psychological
counselling for expatriates encountering
problems of adjustment can contribute to their
mental health and performance.
HEADQUARTERS’ SUPPORT
 The families of the expatriates should also
be assisted in their efforts to adjust in a
new culture.
 HOST ENVIRONMENT
 The international context – with its
differing societal, legal, economic,
technical and physical demands – major
determinants of expatriate performance.
 CULTURAL ADJUSTMENT
 Multicultural adjustability refers to being
sensitive to the host culture.
 It requires expatriate’s multicultural
sensitivity, language ability, diplomacy,
positive attitude, emotional stability and
maturity.
 The spouse too needs to acquire the ability
to live in the host culture.
 PERFORMANCE CRITERIA
 Hard goals: Objective, quantifiable, and
that can be directly measured
 Soft goals: Relationship or trait based such
as leadership style or interpersonal skill.
 Contextual goals: Attempt to take into
consideration factors that results from the
situation
 WHO ARE THE
APPRAISERS?
 Appraisers are immediate manager/leaders
at the host and parent locations, team
members and clients.
 Self appraisal is a common practice.
 In most MNCs, appraisal system have a
combination of these appraisers, which
provides for a fair and balanced approach
to appraisals.
 FREQUENCY OF
ASSESSMENT
 Once in three months, six months or once
in a year.
 PROVIDING FEEDBACK
 Feedback refers to the information
provided about work behaviour and
outcomes.
 Feedback controls the work behaviour of
employees by directing actions through the
provision of necessary feedback for
corrective action.
 PROBLEMS OF PROVIDING
FEEDBACK IN MULTINATIONALS
 Distance
 Different time zones
 ISSUES IN MANAGING PERFORMANCE
IN THE GLOBAL CONTEXT

Performance
Management
Subsidiary
Culture and Performance
Performance
Management

Rewarding Virtual Teams

Performance Underperformance
CULTURAL IMPLICATIONS
ON PMS
 Collectivist Society: It is a common work
practice to assign group goals and involve
groups in deciding goals. The work style is
collaborative and supportive.
 Individualistic Society: It is common to
assign goals to individuals, assess
individual performance and reward
achievemnet of goals.
 REWARDING
PERFORMANCE GLOBALLY
 Fairness and Consistency
 Inclusion of the organizational result
 Linkage between performance appraisal
and salary increase
 Merit awards
 MANAGING
UNDERPERFORMANCE
 Stage 1: Setting expectations and
monitoring performance
 Stage 2: Discussing and documenting
problem performance
 Stage 3: Establishing and implementing
consequences to poor performance
 VIRTUAL ASSIGNMENTS
 In order to manage performance
effectively in virtual teams-
managers/supervisors need to build a team
identity and process, balance technical and
social systems within the team and
facilitate the development of long-distance
relationship and trust among team
memebers.
 DIFFICULTIES IN
ASSESSMENT
 Balancing HQ and host unit performance
 Attention to external forces
 Vagaries of International Environment
 Significance of time and distance
 Variable level of maturity