Performance management in international context

1. Performance Management in
international Context
Ligo Koshy, Faculty, MACFAST, Tiruvalla

2. Performance Management
• Its is a process that enable the MNE to
evaluate and continuously improve individual,
subsidiary unit and corporate performance
against, clearly defined , pre-set goals and
targets.
Ligo Koshy, Faculty, MACFAST, Tiruvalla

3. Challenges of International
Performance Management
• Total Company versus Part of it
• MNC’s consists of headquarters, subsidiaries and its
various alliance companies. HR manager needs to use
different type of appraisal techniques for each part as
decision affects various organs of MNC differently
• Standard format versus customised format
• Should the HQ and subsidiaries adopt the same and
standard criteria/ performance factors or different criteria
• Uniformity of data performance
• Since the subsidiaries are performing different functions
,uniformity of data for the appraisal is not feasible
Ligo Koshy, Faculty, MACFAST, Tiruvalla

4. Challenges of International
Performance Management
• Validity of performance criteria
• Performance criteria valid in one country may not be valid in another country
• Time and distance variations
• Complications create by the geographical distance between HQ and
subsidiaries and the time zone differences
• Varied levels of maturity
• The maturity level of people in different countries are different
• Rater’s competence
• Rates ignorance about factors which influence working in foreign countries
• Rater’s bias
• The problems with the subjective measure have opportunity for bias
• Host Environment
• Social , Political, Economic issues affects the performance of employees
• Cultural Adjustments
• Adjust of the employee to the organisational culture significantly influences
the performance
Ligo Koshy, Faculty, MACFAST, Tiruvalla

5. Variables Affecting
Performance of an expatriate
• Compensation Package
• Perceived financial benefits, potential career prospects affects the level of
commitment and motivation
• Task and the Role
• Depending up on the nature of assignment , degree of task responsibility
varies
• Headquarters Support
• Relocating and adapting to a culturally and environmentally different
country.
• Host Environment
• Varying social, legal, economic, technical demands in different countries,
type of operation( wholly owned subsidiary or International joint venture)
• Cultural Adjustment
• The more the differences between the culture of the parent country and
host country the more difficult to adjust work behaviour
Ligo Koshy, Faculty, MACFAST, Tiruvalla

6. Role Aspects of Performance of Foreign Employees
• The Performance Appraisal of the foreign employee should
consider the Role rather than just the task
• Role includes tasks and various other factors
Ligo Koshy, Faculty, MACFAST, Tiruvalla

7. PCN’s Role Conception
Parent company’s
expectation from PCN
Role Perception of
PCN
Organisational culture
of the Parent company
Culture of the parent
company’s country
Role content of Parent
Country Nationals
Subsidiary’s
Expectations from the
PCN
Organisational Norms
of the subsidiary
Host country’s culture
Ligo Koshy, Faculty, MACFAST, Tiruvalla

8. TCN’s Role Conception
Parent company’s
expectation from TCN
Role Perception of
TCN
Organisational culture
of the Parent company
Culture of the TCN’s
country
Role content of TCN
Subsidiary’s
Expectations from the
TCN
Organisational Norms of
the subsidiary
Host country’s cultureCulture of organisations
where TCN worked
Previously
Ligo Koshy, Faculty, MACFAST, Tiruvalla

9. Role Conception of HCN
Parent Company’s
Expectation from
HCN
Role Perception of
HCN
Role content of HCN
Organisational
Culture of subsidiary
Organisational
Culture of parent
country
Subsidiary
expectations
Ligo Koshy, Faculty, MACFAST, Tiruvalla

10. Appraising The Performance
• The international HR manager should decide on three key
areas
• Specifying performance criteria
• Identifying the appraisers
• Deciding on the frequency of appraisal.
Ligo Koshy, Faculty, MACFAST, Tiruvalla

11. Appraising The Performance
• Specifying performance criteria
• Hard criteria
• Performance based or tangible outcome based
• Eg: profits, market share etc.
• Soft criteria
• Relationship or trait based/ interpersonal criteria
• Focus here is on what a person is and not on what he or
she does
• Contextual criteria
• Situation specific criteria
• Represents a variety of external conditions that may
affect both hard and soft criteria
• Usually includes cultural, language and environmental
differences Ligo Koshy, Faculty, MACFAST, Tiruvalla

12. Common Appraisal/ Rating Errors
• Halo Effect
• Leniency and Strictness
• Central Tendency
• Recency
Ligo Koshy, Faculty, MACFAST, Tiruvalla

13. Appraising The Performance
Who are the Appraisers?
• Appraisers are immediate managers at the
host and parent locations, team members and
clients
• Self-appraisal is a common practice
• In most MNC's, appraisal systems have a
combination of these appraisers
Ligo Koshy, Faculty, MACFAST, Tiruvalla

14. Appraising The Performance
• Frequency of Assessment
• The general trend is to evaluate
• Once in three months
• Six months
• Once in a year
Ligo Koshy, Faculty, MACFAST, Tiruvalla

15. Performance Management of International
employees
1. Establish Performance standard
2. Communicate standards to employees as well as
evaluators
3. Decide upon the performance appraisal format/
technique
4. Measuring actual Performance by evaluators through
observation, interview, records and reports.
5. Frequency of Appraisal- Normally once in a year
6. Adjust actual performance due to environmental
influence
Ligo Koshy, Faculty, MACFAST, Tiruvalla

16. Performance Management of
International employees
7. Compare the actual/adjusted performance
with standards and find out deviations if any
8. Feedback to the appraise
9. Consider the Appraisal results for contract
renewal and promotion
10.Plan for employee training and development
11.Suggest changes in job analysis and
standards ,if any
Ligo Koshy, Faculty, MACFAST, Tiruvalla

17. How to make Performance Appraisal
Effective
• Reliability and validity
• Customisation of Appraisal Forms
• Consensus of the Appraiser and Appraise
• Open and continuous communication
• Sensitive to ground realities
• Easy to operate
• Feedback
• Raters knowledge of the Appraise.
Ligo Koshy, Faculty, MACFAST, Tiruvalla