INTERNATIONAL PERFORMACE MANAGEMENT SYSTEM

By Dr Anne MHRM-2 IHRM

Performance Management

Performance management is a means of getting better results from the organizations teams and individuals within an agreed framework of planned goals, objectives and standards. (Armstrong and Murlis ) The essence of performance management is the development of individuals with competence and commitment , working towards the achievement of shared meaningful objectives within an organization which supports and encourages their achievement . (Lockett)

A communication tool to measure each individuals contribution

To evaluate talent and achievement with sensible consistency and accuracy. To Help distinguish barriers to top performance.

Why Appraise Performance ?

Periodic evaluations help managers to have a better understanding of each employees skills, with the goal to facilitate, train and develop abilities and power of their employees. A chase to assess job development , encourage interest and enhance job performance by pointing out the development and recognizing productive work. A feedback system that might otherwise be overlooked.

Aims of performance Management.

When we know what is expected of us , and have played a role in forming these expectations, we will do our best to meet the goals. We can meet expectations only through our capabilities and if we get support from the management through processes systems and resources .

Plan

Monitor

Act

Review

Design Process for Expatriate

Goal settings for expatriates. Performance Appraisal

THE

EXPATRIATE

Individual Performance And Appraisal

Factors to be considered in the individual Performance and Appraisal process: Expatriate performance management system Compensation Package Task Headquarter Support Host Environment Cultural Adjustment

International Compensation

Key components of an International Compensation Programe : Base Salary Foreign Service Inducement/Hardship premium Allowances Benefits Tax Differentials

Components :

Base Salary An expatriates base salary is normally in the same range as the base salary of the similar position in the home country.

Foreign Service Premium A foreign service premium is an extra pay the expatriate receives for working outside his or her country of origin. It is offered as an inducement to accept foreign postings.

Allowances Hardships Allowances:Payments to compensate expatriates for exceptionally hard living and working conditions at certain foreign locations. Housing Allowances Cost-of-living Allowances Educational Allowances Relocation Allowances

Parent country wages everywhere Wean expatriates from allowances Pay based on local or regional markets Cafeteria selection of allowances Global pay systems

TAXATION

Unless a host country has a reciprocal tax treaty with the expatriates home country , the expatriate may have to pay income tax to both the home country and the host country governments. When a reciprocal tax treaty is not in force , the firm typically pay the expatriates income tax in the host country.

BENEFITS

Many firms also ensure that their expatriates receives the same level of medical and pension benefits abroad that they received at home.

Compensation Other Approaches:

Headquarter based compensation Paying home country wages regardless of location. Host based compensation system Adjusting wages to local lifestyles and costs of living. Global pay systems Worldwide job evaluations, performance appraisal methods, and salary scales are used.

Expatriates Performance Appraisal: Challenges

Fit for international operations according to multinational strategy. Unreliable date Complex and volatile environments. Time difference and distance separation Local cultural situations

In most cases two groups evaluate the performance of expatriate managers Host nation managers and Home office managers and both are subject to unintentional bias Home country managers tend to rely on hard data when evaluating expatriates Host country managers can be biased towards their own frame employees.

Expatriates Performance Appraisal

Fit the evaluation criteria to strategy Fine-tune the evaluation criteria Use multiple sources of evaluations with varying periods of evaluation

To reduce bias in Performance Appraisal

Most expatriates believe more weight should be given to an on site Managers Appraisal than to an off-site Managers appraisal. A former expatriate who has served in the same location could be involved in the appraisal process to help reduce bias. When the policy is for the foreign on-site managers to write performance evaluations , home office managers should probably be consulted before an on-site manager completes a formal termination evaluation.

The Expatriate Manager: Compensation

The Balance sheet Approach Provides a compensation package that equates purchasing power Allowances for the cost of living , housing, food , recreation , personal care , clothing , education , home furnishing , transportation and medical care. This approach equalizes purchasing power across countries so employees can enjoy the same standard in their foreign position as the enjoyed at home .

Balance Sheet Approach to expatriate compensation

One of the Greatest Challenges

Balance Sheet Approach adjusts managers compensation so that manager receives same standards of living as in home country + extra pay for locating overseas. Packages are complex because of determining adequate base salary because of difference in currencies , variance in tax rates and determining what benefits can be utilized and are of value in foreign countries.

Appraising Expatriate Managers

Challenges in appraising overseas managers Determining who should appraise the manager. Deciding on which factors to base the appraisal. Improving the expatriate appraisal process Stipulate the assignment difficulty level , and adopt the performance criteria to the situation. Weigh the evaluation more towards the on-site Managers appraisal than off-site managers appraisal. If the home office manager does the the actual written appraisal use the former expatriate from the same overseas location for advice.

Performance Appraisal at PEPSI COLA International.

Common performance appraisal system: Focuses on motivating managers to achieve and maintain high standards of motivation. Factors associated with high performance in diverse markets were identified : Handling business complexity Results orientation Organizational Savvy Leadership Executive Excellence Composure under pressure Maturity Technical knowledge Positive people skills Effective communication and impact

Five Feedback based Mechanism

Instant feedback Coaching Accountability based performance appraisal Development feedback Human Resource Plan

For example, the first step of instant feedback is based on the principle that any idea about any aspect of the business or about an individuals performance is raised appropriately and discussed in a sensitive manner. The instant feedback message can be delivered in any culture; the important thing is not how it is done but that it is done. The purpose of instant feedback is always to improve business performance, not to criticize cultural styles. Guidelines for appraisal, modification to suit cultural differences . Pepsi Cola Int. tries to balance the cultural and administrative imperatives of successfully managing the performance of a diverse workforce.

THANKS