International Performance Management
Chapter Learning Objectives
After reading this chapter, you should be able to: discuss multinational performance management at the global and local level, including aspects such as noncomparable data, the volatility of the global environment, the effect of distance, and level of subsidiary maturity describe performance management as part of a MNEs control system
Chapter Learning Objectives
identify the factors associated with expatriate performance, including compensation package, task and role, headquarters support, host environment factors and cultural adjustment discuss performance management of expatriates and non-expatriates, and of those on non-standard tasks and assignments ( i.e. commuter and virtual) list issues related to the performance appraisal of international employees
Challenge for IHRM
Performance measurement and the creation of performance management processes that are simultaneously locally relevant and globally comparable diversity in productions and operations geographical dispersal varieties in modes of operations
Challenge for IHRM
monitoring performance and ensuring conformity to agreed-upon standards are significant elements in the managerial control system of a multinational firm
Performance Management
the process that enables the multinational to evaluate and continuously improve individual, subsidiary unit, and corporate performance, against clearly defined, preset goals and targets
MNE Performance Management: Perspectives, Issues, Actions and Consequences (Figure 11.1)
Multinational Performance Management
evaluating MNE performance against specific expectations for each of its foreign operations (i.e. market performance, profits and competitiveness) important to recognize various constraints
MNE Subsidiary Performance Constraints
1. 2. 3. 4. 5.
whole versus part non-comparable data volatility of the global environment separation by time and distance variable levels of subsidiary maturity
Whole vs. Part
decisions; the good of the whole is more important than one subsidiarys short-term profitability
IHRM; consider the consequences for global decisions for subsidiary management performance
Non-Comparable Data
Adequate quality control checks vary between countries neither interpretable nor reliable import tariffs can distort pricing schedules strike can delay supply local labour laws IHRM; complicates the appraisal of individual subsidiary mangers
Volatility of the Global Environment
take into account local changing conditions long-term goals must be flexible and realistic IHRM; involve regional and subsidiary managers in strategic planning to clarify local performance perceptions
Separation by Time and Distance
physical distances time-zone differences frequency of contact between the corporate head-office staff and subsidiary management
cost of the reporting system
Separation by Time and Distance
IHRM; consider country-specific factors worldwide communications systems face-to-face contacts HRIS articulated roles, processes, practices, criteria and purposes
Variable Levels of Subsidiary Maturity
more time to achieve results than is customary in a domestic market
IHRM; recognize slower developments in the performance management process
Control and Performance Management
performance management is a part of a MNEs control system formal and informal control mechanisms; corporate culture, performance targets, feedback MNE achieves consistency, coordination and compliance of desired behavior and outcomes to implement its global strategy
Beneficial to Individual and Organization
strong individual goal setting and appraisal training and development and performance-related pay
Variables affecting Expatriate Performance
compensation package task and role headquarters support environment cultural adjustment of individual and accompanying family
Variables Affecting Expatriate Performance
(Figure 11.3)
PCN Role Conception
(Figure 11.4)
TCN Role Conception
(Figure 11.5)
Performance CriteriaHard Goals
objective, quantifiable directly measured (i.e. return-oninvestment, market share, financial results, profits)
Performance CriteriaSoft Goals
are subjective, qualitative relationship or trait-based ( i.e. leadership style, interpersonal skills) complicated by culture
Performance Criteria- Contextual Goals
result from the situation in which performance occurs
Performance Appraisal of International Employees
Hard Data does not consider the way results are obtained and the behaviours used to obtain the results
Performance Appraisal of International Employees
Soft Data takes into account behaviours difficult to quantify
Performance Appraisal of International Employees
use multiple hard, soft and contextual criteria
builds upon the strengths while minimizing their disadvantages a job analysis must generate criteria that adequately captures the nature of international work
HCN Role Conception (Figure 11.6)
Discussion Questions
1. Discuss the major factors associated with appraisal of expatriate managerial performance. 2. Why is it important to include hard, soft and contextual goals when assessing managerial performance? 3. In what ways would the role of a manager working in a non-standard international assignment differ from that of a typical expatriate manager?
