Chapter- 6 Performance Management

Performance Appraisal

Prof Preeti Bhaskar

Symbiosis Center For Management Studies NOIDA

bull Expatriatersquos performance appraisal

bull Variable influencing Performance of Expatriate

bull Issues and challenges in international performance management

Constant check induces employee to perform better

Definitions

According to Newstrom ldquoIt is the process of evaluating the

performance of employees sharing that information with them

and searching for ways to improve their performancersquorsquo

Performance appraisal is the step where the management finds

out how effective it has been at hiring and placing employees

A ldquoPerformance appraisalrdquo is a process of evaluating an

employeersquos performance of a job in terms of its requirements

Objectives of Performance Appraisal

Employee Organization

measuring the efficiencymaintaining

organizational control

concrete and tangible

particulars about their

workassessment of

performance

mutual goals of the

employees amp the

organizationgrowth amp developmentincrease harmony amp

enhance effectiveness

Personal development work satisfaction involvement in the

organization

According to

Aims at

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

10Confidential Report

11Ranking

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

SDKSDHKS

MANAGEMENT An International

Perspective

Objective -

bull Introduction bull Challenges of International performance

managementbull Areas to be appraisedbull Who should appraise the performancebull System of Performance appraisalbull Problems of performance appraisalbull How to make appraisal effective

bull

International Performance Management

ndash It is the process of assessing an individuals performance in a systematic way

ndash The performance being measured against various job related factors as well as individual traits

ndash In addition ones potential for performance is measured

IHRM is a process ldquothat enables the multinational to evaluate and continuously improve individual subsidiary unit and corporate performance against clearly defined pre-set goals and targetsrdquo

Why Appraise PerformancePeriodic evaluation helps mangers to have a better understanding of each employees skills with the goal to facilitate train and develop abilities and power to their employees

ndash A chase to assess job development encourage interest and enhance job performance by pointing out the development and recognizing productive work

ndash A feedback system will help to improve the performance

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 neededTo identify problem areas that may call for a change in assignment

Problem Performance appraisal

Unintentional biasbull Host-nation biased by cultural frame of referencebull Home-country biased by distance and lack of experience

working abroad

bull Expatriate managers believe that headquarters unfairly evaluates and under appreciates them

In a survey of personnel managers in US multinationals 56 stated foreign assignment either damaging or irrelevant to onersquos career

Guidelines for performance appraisal

More weight should be given to onsite managerrsquos 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

Challenges of International Performance Management

bull Total company vs part of it

bull Standardized or customized

appraisal form

bull Time differences and

distance separation

bull Unreliable data across

boundaries

bull Complex and volatile

environments

bull Who conducts the

performance appraisal

bull Frequency of appraisal

bull Variable levels of

maturity

bull Volatility of the global

environment

bull Non-comparable data

bull Cultural adjustment

bull Host environment

bull Raters Bias

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

Factors to be considered in individual performance amp appraisal process

Headquartersrsquo supportCompensation PackageTas

kHost EnvironmentExpatriate Performance Management

SystemCultural Adjustment

Compensation such assignments taken for perceived financial benefits and career progression

1048766 Compensation is one of the key factor closely associated with expatrsquos performance1048766 Well compensated expatriates definitely happier and more productive1048766 Pay according to Herzbergs two factor theory of motivation is a hygiene factor whichwhen adequately provided for removes dissatisfaction but fails to activate motivation andperformance1048766 But money continues to remain as one of the most significant motivators for expats

2 Task

1048766 An expatriate is sent on an overseas assignment either as chief executive system

replicator trouble shooter or as a simple operator1048766 Whatever the nature of assignment task has considerable impact

on an individualrsquosperformance1048766 A tougher task tends to evolve better performance than a job which

is relatively easy tohandle1048766 People tend to show their best when the job is tough and

challenging

Head quarterrsquos support

1048766 Home office support is a crucial in expatriate performance1048766 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 successful1048766 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

Host Environment

1048766 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

1048766 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

1048766 Conflicting goals between parent companies are a common problem within international joint ventures and can make the expatriatersquos job more difficult

The ability to live comfortably in an alien culture ndash is essential for the success of anexpatriate Multicultural adjustability refers to being sensitive to the host culture theexpatrsquos multicultural sensitivity language ability diplomacy adaptability positiveattitude emotional stability and maturity

1048766 It is not enough if the expat Alone acquires cross cultural adjustability The trailingspouse to adjust is often a major reason behind expatriate failure

Cultural Adjustment

The international HR Manager should decide on 3 key areas while assessing an expatriatersquos performance

- Specific performance criteria- Identifying the appraisers- deciding on the frequency of appraisal

Expatriatersquos performance appraisal

Basically there are three categories of performance indicators

1 Trait based (soft goal) ndash leadership style interpersonal skill etc2 Behavior based (contextual goals) ndash attempts to take into consideration factors that resultsfrom the situation in which performance occurs3 Result based (Hard goals) ndash objectives quantifiable and can be directly measured such as Return On Investment (ROI) market share and so on

Non-expatriate Performance management

bull A seemingly neglected groupbull Performance effects of factors associated

with constant air travelndash Depression nervous anxiety sleep disturbance

health issuesbull Stress associated with frequent absences

and effect on family relationshipsbull Non-standard assignments such as

commuter arrangements and virtual assignments share these aspects

Performance Appraisal at Pepsi-Cola International

bull 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

Conthellip

Five feed-back based mechanism

bull Instant feedbackbull Coachingbull Accountability-based performance appraisalbull Development feedbackbull Human resource plan for future

US Performance Appraisal SystemTo build up employee performance plan

bull Discuss performance plan bull Evaluatingbull Rewardingbull Provide assistant bull Repositioning or removingbull Identifying

American Views of Performance

Objective To help achieve organizational objectives

bull Productivity and Quality

bull Achievementndash Individual group or organizational objectives

bull ldquorate the performance not the personrdquondash Concentrate upon performance items

Chinese views of Performance

bull Objectives Maintain family control of businessndash Performance appraisals favor workers that are

loyal to the family

bull Emphasis upon ldquomoralrdquo characteristics

Appraisal of HCN Employees - Japan1048766 It is important to avoid direct confrontation to lsquosave facersquo and this

customs affects the way in which the performance appraisal is conducted

1048766 A Japanese manager can not directly point out a work related problem

or error committed by a subordinate

1048766 Developmental appraisal is usually conducted every month and

evaluation appraisal is performed after 12 years

1048766 Feed back is subtle and given orally Japanese employees never rebut

1048766 Appraisal process praise is given to the group

Appraisal of HCN Employees-USA 1048766 Workers performance appraisals featured the us cultural concept of meritocracy which emphasis fairness and a short term orientation

1048766 Employee expect to be appraised individually and heavily on individual feedback regarding performance

1048766 PA in the US are usually conducted once a year

1048766 Feedback in the US process is direct and probably in writing

1048766 US employees tend to present their own rebutted to the feed back

1048766 Appraisal process praise is given individually

USA vs Peoples Republic of China (PRC)

bull Performance appraisal

ndash USA Two-way communication and counseling are widely used in the performance appraisal process

ndash Peoples Republic of China (PRC) Superiors have absolute authority to evaluate subordinates standards of performance are vague and generic

CONT

bull Reward system

ndash USA A wide variety of rewards are used in the incentive system

ndash Peoples 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

CONT

bull Participative management

ndash USA Participative management is welcome and encouraged even if it is not prevalent yet

ndash Peoples Republic of China (PRC) Collective leadership is widely used but the participation of workers in major decisions is superficial and symbolic

Thank You