INTERNATIONAL PERFORMANCE

MANAGEMENT
Amaresh C Nayak
International Performance Management

• Performance appraisal
– 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.
– The performance appraisal outcome is linked
to a number of personnel decisions.

Asst. Prof. Amaresh C Nayak

International Performance Manaement

• Performance management
– This stretches beyond appraisal.
– The emphasis in performance management
is enhanced employee performance.

Asst. Prof. Amaresh C Nayak

Performance Appraisal Vs
Performance Management
Appraisal and Management

Performance Appraisal Performance Management

Primary Assessing performance Improving employee

focus and potential for performance and
performance development.
Activities Designing appraisal Set of HR activities
involved programme designed and executed to
Build database employee- assess performance and
wise. improve it also.
Leadership Directional, evaluative. Facilitate; coaching

Frequency Usually yearly once. Often, can be ongoing.

Degree of High Low

formality
Asst. Prof. Amaresh C Nayak
Performance Management Process
Objectives and Strategy of the
Organisation

Competitive position of the Cause Analysis HR Interventions

Desired Performance State
organisation • Reward and • Feedback and counseling
Analyse:
compensation systems • Change management
• Industrial environment Employee Perceptions and
•Resources • Data and information • Team building
attitudes • Resources, tools and • Talent management
Competitive Advantage environment • Training and
Gap Analysis
•Individual • Individual competency development
•Team • Motives and • Reward management
•Organization expectations • Competency mapping
Measuring Organisational • Skills and knowledge and learning
Effectiveness Employee Behaviour and • Ethics in behaviour management
• Growth, Productivity, performance and action • Ethical performance
Profitability, Market Share, training
Turnover, Stability and Actual Performance State
Human Relations
• Efficient processes for
higher organisational Feedback
adaptability

Organisational Performance Outcome

Improvement • Organisation wide alignment of employee behaviours with financial, operational, customer and learning and growth processes
• Clear focus on ethical performance
• Driven by organisational strategy
• Orchestrated by HR
• HR outcomes: Quality of work, tangible rewards, future growth, enabling environment and inspiration
Asst. Prof. Amaresh C Nayak
Performance Management for Expats

• Expatriate performance management

comprises seven activities -
– Linkage to organisational strategy
– Setting individual performance behaviour
– Identifying variables impacting performance
– Appraising the performance
– Providing regular feedback on progress
towards these goals
– Providing opportunities for improvement
– Linking results with rewards

Asst. Prof. Amaresh C Nayak

ORGANISATIONAL STRATEGY AND
PERFORMANCE MANAGEMENT
• Performance management becomes an
integral part of corporate strategy
• It serves many organisational goals
• Performance management helps
– Identify employees with high potentials
– Facilitates reward performance equitably
– Delieanates an employee's needs for
development

Asst. Prof. Amaresh C Nayak

ORGANISATIONAL STRATEGY AND
PERFORMANCE MANAGEMENT
• From the strategic management
perspective organisations can be
grouped into any of the four categories:
– Defenders
– Prospectors
– Analyzers
– Reactors

Asst. Prof. Amaresh C Nayak

ORGANISATIONAL STRATEGY AND
PERFORMANCE MANAGEMENT
• Defenders (low-cost producer)
– Have cost control as the primary focus
– Predictability and a short-term focus are valued
• Seek to provide goods and services at a low cost
• Maintain quality
• Provide customer service
– HR activities are relevant in this context
• Development and training
– Employees are expected to stay with the
organisation for a long time
– The PMS in such organisations is based on outcome
result as well as on behavioural traits.

Asst. Prof. Amaresh C Nayak

ORGANISATIONAL STRATEGY AND
PERFORMANCE MANAGEMENT
• Prospector's (innovators)
– Design and produce new products
– Redeploys resources from discontinued products to
the development of new ones
– Organisational conditions that foster
• Risk taking, Cooperation, Creativity and A long-term
perspective
– Talented individuals are hired
– Training is mainly on-the-job
– Employee turnover is high
– Performance appraisal is result-based
• Emphasis on skills identification
• Acquisition of human resources from external sources
Asst. Prof. Amaresh C Nayak
ORGANISATIONAL STRATEGY AND
PERFORMANCE MANAGEMENT
• Analyzer operate in two types of product-
market domains
• Stable domain
• Changing domain
– These firms are of some hybrid type
– They are both product innovators and competitors in
long-run production lines
– The personnel policies fall between the extremes of
defenders and prospector's
• Firms spend heavily on training
• Talents are also 'bought' to fill higher-level positions
– PMS focuses on result as well as on behavioural
traits.
Asst. Prof. Amaresh C Nayak
ORGANISATIONAL STRATEGY AND
PERFORMANCE MANAGEMENT
• Reactor's
– Operates in a highly competitive market
– Slaves of their environments
– There are few systematic strategic
implications
– PMS focus
• Result based
• behavioural trait based

Asst. Prof. Amaresh C Nayak

SETTING INDIVIDUAL PERFORMANCE
GOALS
• It is critical to closely link unit goals to
individual/team goals
• Popularly, goals seek to serve several
purposes:
– Guide and direct behaviour in the direction of the
goal
– Offer benchmarks for employees to strive towards
excellence
– Reflect what the employees and managers consider
as important
• While setting the goals the organisations should
follow the SMART PRINCIPLE
Asst. Prof. Amaresh C Nayak
SETTING INDIVIDUAL PERFORMANCE
GOALS
• Goals need to be carefully identified, depending
on the following factors:
– Resources need to be provided for the individuals,
teams
• Finance is fundamental to a lot of initiatives
• To make decisions at the unit level needs to be clearly
identified
• The power of authority and control on local spending would
need to be ensured for smooth operational decisions.
– Participation of the individual/teams in goal setting
• The rationale for such involvement is the employee's
acceptance and commitment to the established goals
– There is also the need for prioritizing goals

Asst. Prof. Amaresh C Nayak

IDENTIFYING VARIABLES AFFECTING
PERFORMANCE
• Performance of the non-expatriate is generally
influenced by
– Job extrinsic factors (e.g. working conditions and
company policy)
– Job intrinsic factors (e.g. challenging job, career
prospects).
• An expatriate's performance depends on
several other influencing factors
– The impact of job extrinsic and job intrinsic factors
on performance cannot be undermined.

Asst. Prof. Amaresh C Nayak

IDENTIFYING VARIABLES AFFECTING
PERFORMANCE
• The performance of an expatriate
depends on several variables
– Compensation Package
– Task
– Headquarters Support
– Host Environment
– Cultural Adjustment

Asst. Prof. Amaresh C Nayak

IDENTIFYING VARIABLES AFFECTING
PERFORMANCE
• Compensation Package
– Perceived as a balancing factor for the
'emotional relocation” that the assignment
demands
– Pay, according to Herzberg's two-factor
theory of motivation, is a hygiene factor
– Pay acts as remover of dissatisfaction as
well as a booster for enhanced performance
– Money continues to remain as one of the
most significant motivators for expats.

Asst. Prof. Amaresh C Nayak

IDENTIFYING VARIABLES AFFECTING
PERFORMANCE
• Task
– Nature of the job tends to influence
performance.
– A tougher task tends to evoke better
performance than a job which is relatively
easy to handle.
– How work is viewed by the expatriate also
matters.

Asst. Prof. Amaresh C Nayak

IDENTIFYING VARIABLES AFFECTING
PERFORMANCE
• Headquarters Support
– An assignee accepts
• Making extra money
• Improving his career prospects
• Loyalty to the organisation
• Commitment to make the Arm successful
• It is necessary that the home office extends
support and offers moral courage, particularly in
times when the expatriate is passing through a
culture shock.

Asst. Prof. Amaresh C Nayak

IDENTIFYING VARIABLES AFFECTING
PERFORMANCE
• Headquarters Support
– The following are some specific support facilities
required from the headquarters:
– Organisational support in managing the practical
problems
• Setting up home in a new culture
• Enabling an expatriate to settle down.
– The provision of timely psychological counselling for
expatriates
• Contributing to their mental health and performance
– The families of employees should also be assisted

Asst. Prof. Amaresh C Nayak

IDENTIFYING VARIABLES AFFECTING
PERFORMANCE
• Host Environment
– Hostile host country environment, expatriates
are under constant pressure and often there
is a threat to their life itself.
– The form of ownership of the subsidiary is
important too.

Asst. Prof. Amaresh C Nayak

IDENTIFYING VARIABLES AFFECTING
PERFORMANCE
• Cultural Adjustment
– Multicultural adjustability refers to being
sensitive to the host culture
• Multicultural sensitivity
• Language ability
• Diplomacy
• Adaptability
• Positive attitude
• Emotional stability
• Maturity

Asst. Prof. Amaresh C Nayak

APPRAISING THE PERFORMANCE

• The international HR manager should

decide on three key areas
– specifying performance criteria
– identifying the appraisers
– deciding on the frequency of appraisal.

Asst. Prof. Amaresh C Nayak

APPRAISING THE PERFORMANCE

• Performance Criteria
– The criteria for assessing performance should be
clear, relevant, practical and reliable if assessments
were to be meaningful
• Trait Based
– Traits are abstract properties of individuals
• openness to other cultures
• ability to live in other cultures
• loyalty to the company
• articulation and level of initiative
– Focus here is on what a person is and not on what
he or she does.

Asst. Prof. Amaresh C Nayak

APPRAISING THE PERFORMANCE

• Behaviour Based
– Focus on what the person actually does
• Accomplish the job is very important
• emphasize how a job is done.
• Result Based
– How much profit the assignee brought into
the organisation during the assignment
– Adherence lo target dates for commissioning
plants/offices
– Establishing strategic alliances

Asst. Prof. Amaresh C Nayak

APPRAISING THE PERFORMANCE

• Others
– A new approach “the balanced score card”
• Propounded by Kaplan and Norton
– the financial perspective
• organization’s short-term and long-term financial
performance
– the internal business perspective
• focus on production and operating statistics
• order fulfillment or cost per order
– the innovation and learning perspective
• human resource—its potential to learn and grow
– the customer perspective.
• Customer’s view, customer retention and satisfaction

Asst. Prof. Amaresh C Nayak

APPRAISING THE PERFORMANCE

• Who are the Appraisers?

– Appraisers are immediate managers/leaders at the
host and parent locations, team members and
clients
– Self-appraisal is a common practice
• In most MNC's, appraisal systems have a
combination of these appraisers
• Some common practices adopted by the
industry are:
– Matrix reporting
– Use of multiple appraisers (360-degree appraisal)
– The appraisal/review cycle
Asst. Prof. Amaresh C Nayak
APPRAISING THE PERFORMANCE

• Frequency of Assessment
– The general trend is to evaluate
• once in three months
• six months
• once in a year
• Survey conducted in 1997 by Arthur
Anderson
– 70 percent of the organisations conduct
performance appraisals once in a year

Asst. Prof. Amaresh C Nayak

PERFORMANCE MANAGEMENT

• PROVIDING FEEDBACK
– Feedback controls the work behaviour of employees
by directing actions
• OPPORTUNITIES FOR IMPROVEMENT
– Feedback has a developmental aspect as it
highlights the need for training and development.
– Opportunities to expatriates to improve, socialize
and adjust to local environment ably.
• LINKING REWARDS AND RESULTS
– establishing linkages between performance and
compensation

Asst. Prof. Amaresh C Nayak

ISSUES IN MANAGING
PERFORMANCE IN GLOBAL CONTEXT
• Cultural consequences on performance
management
– rewarding performance
– managing under performers
– managing virtual teams
• Assessing subsidiary performance is also a
critical dimension
• There are three ways in which cultural
differences impact performance management:
– Goal commitment and participation in organisations
– Feedback performance relationship
– Feedback seeking behaviour
Asst. Prof. Amaresh C Nayak
ASSESSING SUBSIDIARY
PERFORMANCE
• Difficulties in Assessment
– Balancing HQ and Host Unit Performance
– Attention to External Forces
– Vagaries of the International Environment
– Significance of Time and Distance

Asst. Prof. Amaresh C Nayak

THANK YOU

Asst. Prof. Amaresh C Nayak