Chapter 7

Modern developments in HRM practices: Performance

Management

Dr.vimala,SCT 1
Performance Management
 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

Dr.vimala,SCT 2
Basic Components of Performance
Management

Dr.vimala,SCT 3
Evaluating Subsidiary Performance

 Factors to consider:
 Whole versus part
 Non-comparable data
 Volatility of the global environment
 Separation by time and distance
 Variable levels of maturity

Dr.vimala,SCT 4
Control and Performance
Management
 Performance management is part of the
multinational’s control system.
 Performance targets are part of formal control.
 Performance management contributes to
shaping corporate culture, e.g.
 Who conducts performance appraisal
 Tangible versus intangible criteria
 Individual versus team based appraisal
 How results linked to HR decisions, e.g.,
compensation and promotion

Dr.vimala,SCT 5
Variables Affecting Expatriate
Performance
Cultural adjustment – self and family

Host environment

Headquarters’ support

Task

Compensation
package

Expatriate
Performance
Dr.vimala,SCT 6
Individual Performance Management

 The task:
 Chief executive officer
 Structure reproducer
 Troubleshooter
 Operative

 Task variables are generally considered

more under the control of the multinational
than environmental factors.

Dr.vimala,SCT 7
Roles
 A role is the organized set of behaviors assigned
to a particular position.
 Effective role behavior is an interaction between
the concept of the role, the interpretation of
expectations, the person’s ambitions, and the
norms inherent in the role.
 The difficulty for the expatriate manager is that the
role may be defined in one country, but performed
in another.

Dr.vimala,SCT 8
PCN Role Conception

Dr.vimala,SCT 9
TCN Role Conception

Dr.vimala,SCT 10
Headquarters’ Support
 The support of headquarters is important
– both to the individual expatriate and
accompanying family members – as a
performance variable

Dr.vimala,SCT 11
The Host Environment
 The external context can be a major determinant
of expatriate performance
 Differing demands in terms of the context:
 Societal
 Legal
 Economic
 Technical
 Physical
 Type of operation involved (e.g. IJV versus wholly-
owned subsidiary)

Dr.vimala,SCT 12
Contextual Model of Expatriate Performance
Management

Dr.vimala,SCT 13
Non-expatriate Performance
Management
 Effects of factors associated with constant air
travel, e.g.
 Depression, anxiety, sleep disturbance, health
 Stress associated with frequent absences and
effect on family relationships
 Non-standard assignments share these aspects,
e.g.
 Commuter arrangements
 Virtual assignments

Dr.vimala,SCT 14
Performance Appraisal
 Performance criteria
 Hard goals: objective, quantifiable and can be
directly measured
 Soft goals: relationship or trait-based
 Contextual goals: factors that result from the
situation in which performance occurs
 An appraisal system that uses hard, soft
and contextual criteria is advocated

Dr.vimala,SCT 15
Other Factors Affecting Appraisal
 Who conducts the performance appraisal
 Use of standardized or customized
appraisal form
 Frequency of appraisal
 Performance feedback
 Timely
 Geographical distance affects

Dr.vimala,SCT 16
Appraisal of HCNs
 The practice itself confronts the issue of
cultural applicability.
 May be necessary to use local staff and a
customized form.
 Level of position involved is an important
consideration.

Dr.vimala,SCT 17
HCN Role Conception

Dr.vimala,SCT 18