Chapter 6 performance management
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The document discusses performance appraisal of expatriates. It defines performance appraisal and outlines its objectives for both employees and organizations. It identifies factors that influence expatriate performance like compensation, task, cultural adjustment, and support from headquarters. It also discusses challenges of international performance management like cultural differences, unreliable data, and complex environments. Finally, it provides examples of performance appraisal systems used by companies like Pepsi and guidelines for effective expatriate performance evaluation.
Chapter 6 performance management
- 2. • Expatriate’s performance appraisal • Variable influencing Performance of Expatriate • Issues and challenges in international performance management
- 4. Definitions According to Newstrom, “It is the process of evaluating the performance of employees, sharing that information with them and searching for ways to improve their performance’’. Performance appraisal is the step where the management finds out how effective it has been at hiring and placing employees A “Performance appraisal” is a process of evaluating an employee’s performance of a job in terms of its requirements.
- 5. Objectives of Performance Appraisal Employee Organization measuring the efficiency maintaining organizational control. concrete and tangible particulars about their work assessment of performance mutual goals of the employees & the organization. growth & development increase harmony & enhance effectiveness Personal development work satisfaction involvement in the organization. According to: Aims at:
- 6. 1. Paired comparison 2. Graphic Rating scales 3. Forced choice Description method 4. Forced Distribution Method 5. Checks lists 6. Free essay method 7. Critical Incidents 8. Group Appraisal 9. Field Review Method 10.Confidential Report 11.Ranking 1. Assessment Center 2. Appraisal by Results or Management by Objectives 3. Human Asset Accounting 4. Behaviorally Anchored Rating scales 5. 360 Degree Feedback Traditional Methods Modern Methods Methods of Performance Appraisal
- 7. SDKSDHKS
- 8. Objective -: • Introduction • Challenges of International performance management • Areas to be appraised • Who should appraise the performance? • System of Performance appraisal • Problems of performance appraisal • How to make appraisal effective? •
- 9. International Performance Management – It is the process of assessing an individual's performance in a systematic way. – The performance being measured against various job related factors as well as individual traits. – In addition one's potential for performance is measured. IHRM 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”.
- 10. Why Appraise Performance? Periodic evaluation helps mangers to have a better understanding of each employee's skills with the goal to facilitate, train and develop abilities and power to 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 will help to improve the performance.
- 11. Purpose Performance Appraisal To provide feedback to individuals about how well they are doing To provide a basis for rewarding top performers To identify areas in which additional training and development may be needed To identify problem areas that may call for a change in assignment
- 12. Problem: Performance appraisal Unintentional bias • Host-nation biased by cultural frame of reference • Home-country biased by distance and lack of experience working abroad • Expatriate managers believe that headquarters unfairly evaluates and under appreciates them
- 13. Guidelines for performance appraisal More weight should be given to onsite manager’s evaluation as they are able to recognize the soft variables Expatriate who worked in same location should assist home-office manager with evaluation If foreign on-site managers prepare an evaluation, home-office manager should be consulted before completion of formal the terminal evaluation
- 14. Challenges of International Performance Management • Total company vs. part of it. • Standardized or customized appraisal form • Time differences and distance separation • Unreliable data across boundaries • Complex and volatile environments • Who conducts the performance appraisal • Frequency of appraisal • Variable levels of maturity • Volatility of the global environment • Non-comparable data • Cultural adjustment • Host environment • Raters Bias
- 15. Performance Criteria Contextual goals Soft goals Hard goals An appraisal system that uses hard, soft and contextual criteria is advocated Hard Goals: are objective, quantifiable, and can be directly measured such as Return-on-Investment ( ROI ), market share, so on Soft Goals: tend to be relationship- based or trait-based such as leadership style, interpersonal skills, etc. Contextual Goals: attempt to take into consideration factors that result from the situation in which performance occurs.
- 16. Factors to be considered in individual performance & appraisal process Headquarters’ support Compensation Package Task Host Environment Expatriate Performance Management System Cultural Adjustment
- 17. Compensation: such assignments taken for perceived financial benefits and career progression Compensation is one of the key factor closely associated with expat’s performance. Well compensated expatriates definitely happier and more productive. Pay, according to Herzberg's two factor theory of motivation, is a hygiene factor which when adequately provided for removes dissatisfaction but fails to activate motivation and performance. But money continues to remain as one of the most significant motivators for expats.
- 18. 2. Task: An expatriate is sent on an overseas assignment either as chief executive, system replicator, trouble shooter or as a simple operator. Whatever, the nature of assignment, task has considerable impact on an individual’s performance. A tougher task tends to evolve better performance than a job which is relatively easy to handle. People tend to show their best when the job is tough and challenging.
- 19. Head quarter’s support Home office support is a crucial in expatriate performance. An assignee has accepted an overseas job for three objectives: making extra money, career prospectus and loyalty to the organization and commitment to make the firm successful. It is necessary that the home office extends support and offer moral courage by psychological counseling, particularly in times when the expatriate is passing through a culture shock.
- 20. Host Environment: Environment wields considerable influence on performance, particularly of the expatriate. If the host environment is hostile, expatriate are under constant pressure and often, there is a threat to their life itself. The form of ownership of the subsidiary is also important. For instance, it may be relatively easier to perform in a wholly owned subsidiary than in a joint venture with a state owned enterprise in China. Conflicting goals between parent companies are a common problem within international joint ventures and can make the expatriate’s job more difficult.
- 21. The ability to live comfortably in an alien culture – is essential for the success of an expatriate. Multicultural adjustability refers to being sensitive to the host culture, the expat’s multicultural sensitivity, language ability, diplomacy, adaptability, positive attitude, emotional stability and maturity. It is not enough if the expat. Alone acquires cross cultural adjustability. The trailing spouse to adjust is often a major reason behind expatriate failure Cultural Adjustment
- 22. The international HR Manager should decide on 3 key areas while assessing an expatriate’s performance: - Specific performance criteria - Identifying the appraisers - deciding on the frequency of appraisal Expatriate’s performance appraisal Basically there are three categories of performance indicators: 1. Trait based (soft goal) – leadership style, interpersonal skill etc. 2. Behavior based (contextual goals) – attempts to take into consideration factors that results from the situation in which performance occurs. 3. Result based (Hard goals) – objectives, quantifiable, and can be directly measured such as Return On Investment (ROI), market share and so on.
- 23. Non-expatriate Performance management • A seemingly neglected group • Performance effects of factors associated with constant air travel – Depression, nervous anxiety, sleep disturbance, health issues • Stress associated with frequent absences and effect on family relationships • Non-standard assignments such as commuter arrangements and virtual assignments share these aspects
- 24. 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 Technical knowledge Positive people skills Effective communication and impact Maturity
- 25. Cont.… Five feed-back based mechanism: • Instant feedback • Coaching • Accountability-based performance appraisal • Development feedback • Human resource plan for future
- 26. US Performance Appraisal System To build up employee performance plan • Discuss performance plan • Evaluating • Rewarding • Provide assistant • Repositioning or removing • Identifying
- 27. American Views of Performance Objective: To help achieve organizational objectives • Productivity and Quality • Achievement – Individual, group or organizational objectives • “rate the performance, not the person” – Concentrate upon performance items
- 28. Chinese views of Performance • Objectives: Maintain family control of business – Performance appraisals favor workers that are loyal to the family • Emphasis upon “moral” characteristics
- 29. Appraisal of HCN Employees - Japan It is important to avoid direct confrontation to ‘save face’ and this customs affects the way in which the performance appraisal is conducted. A Japanese manager can not directly point out a work related problem or error committed by a subordinate. Developmental appraisal is usually conducted every month and evaluation appraisal is performed after 12 years. Feed back is subtle and given orally, Japanese employees never rebut. Appraisal process praise is given to the group.
- 30. Appraisal of HCN Employees- USA Workers performance appraisals featured the us cultural concept of meritocracy, which emphasis fairness and a short term orientation. Employee expect to be appraised individually and heavily on individual feedback regarding performance. P.A in the US are usually conducted once a year. Feedback in the US process is direct and probably in writing. US employees tend to present their own rebutted to the feed back Appraisal process praise is given individually
- 31. USA vs. People's Republic of China (PRC): • Performance appraisal – USA: Two-way communication and counseling are widely used in the performance appraisal process. – People's Republic of China (PRC): Superiors have absolute authority to evaluate subordinates; standards of performance are vague and generic.
- 32. CONT. • Reward system – USA: A wide variety of rewards are used in the incentive system. – People's Republic of China (PRC) Range of wage and salary is narrow; bonus is not based on individual performance; pay is more motivating than in the USA.
- 33. CONT. • Participative management – USA: Participative management is welcome and encouraged, even if it is not prevalent yet. – People's Republic of China (PRC): Collective leadership is widely used but the participation of workers in major decisions is superficial and symbolic.
- 34. Thank You