Project Report

International Performance Appraisal & Management

Performance appraisal is an analysis of an employee's recent successes and failures,

personal strengths and weaknesses, and suitability for promotion or further training.

Prepared by: MOAZZAM QUDDUSI

 PROJECT REPORT

ON

International performance Appraisal & Management

A topic of IHRM

Submitted to: Submitted by:

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Prof. Neha Gupta Mam Moazzam
IIPM DEHRADUN SS/Batch/09/1

INDEX

S.NO TOPIC PAGE NO.

1 ACKNOWLEDGEMENT 4
2 ABSTRACT 5
3 LITERATURE 6 TO 18
 IHRM
 PERFORMANCE APPRAISAL
 PROCESS
 PERFORMANCE MANAGEMENT
 PERFORMANCE APPRAISALS IN AN INTERNATIONAL
CONTEXT
o MULTINATIONAL PERFORMANCE
MANAGEMENT
o EXPETRIATE PERFORMANCE MANAGEMENT
o PERFORMANCE APPRAISAL FOR HCN
o INDIVIDUAL PERFORMANCE & APPRAISAL
o INTERNATIONAL COMPESATION
o CHALLENGES
o PCN ROLE CONCEPTION
o TCN ROL CONCEPTION

4 BIBILOGRAPHY 18

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ACKNOWLEDGEMENT

I am highly grateful to Prof. Neha Gupta Mam who has provided me a splendid opportunity
to be a part of this Project Report & shared her precious time and knowledge with me.

It has been a marvellous learning experience; also it has prepared me for the corporate
world.

I must also thank IIPM Dehradun, to give me a platform where I enhanced my knowledge.

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Abstract

Difficulties in executing performance appraisals are widely reported. However, little is

known about the conduct of performance appraisals for host country managers. These
managers are usually isolated from their supervisors, and it could, therefore, be expected
that they would also experience difficulties in the conduct of their performance appraisal.
This paper examines the extent, nature and limitations of performance appraisals for host
country managers in a sector of the healthcare industry in Australia. The study found
performance appraisals are widely used, but in most cases are done poorly. In over 80 per
cent of cases the appraisals were perceived as ineffective, which is higher than world wide
reactions to appraisal. The performance appraisal process was found to be influenced by the
emphasis given to the bottom line, the relationship with the supervisor and the effect of the
multinational's parent strategy, structure and nationality. The findings suggest that the host
country manager's experience of the appraisal often results in the manager perceiving
limited opportunities for career development and advancement in the company. This may
impact on the overall long term performance of the subsidiary. It is recommended that
some straightforward modifications to the appraisal could make a significant contribution to
both the retention and development of these managers, and, therefore, to company
performance.

Performance management and particularly PA is a strategic human resource management

(HRM) process. These mechanisms enable the MNC to continuously evaluate and improve
individual, subsidiary unit and corporate performance against clearly defined, preset
objectives that are directly linked to company strategy (Dowling, Welch & Schuler 1999).
Thus, an effective PA creates a mechanism that can ensure the HCM and their overseas
subsidiaries are acting in accordance with the parent MNC's interests. While there is wide
recognition of the importance of PAs, most MNCs have not effectively managed their
international appraisals. It has been argued that mismanagement of international PAs is
primarily due to information asymmetry and goal incongruence between the parent
company and its subsidiaries.

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IHRM

IHRM is a rapidly expanding sub-field within the academic study of human resource
management. Its focus is the management of employees in multinational corporations and
traditionally was concerned primarily with the issue of expatriation; that is, the
management of parent-country nationals who were sent to work in overseas subsidiaries.
However, in recent years, the scope of IHRM has expanded considerably and researchers
consider all aspects of HRM within large, international companies, including international
recruitment and selection, international reward, training and development programmes,
and systems of performance management.

Performance appraisal

A performance appraisal, employee appraisal, performance review, or (career)

development discussion is a method by which the job performance of an employee is
evaluated (generally in terms of quality, quantity, cost, and time) typically by the
corresponding manager or supervisor[2]. A performance appraisal is a part of guiding and
managing career development. It is the process of obtaining, analyzing, and recording
information about the relative worth of an employee to the organization. Performance
appraisal is an analysis of an employee's recent successes and failures, personal strengths
and weaknesses, and suitability for promotion or further training. It is also the judgement of
an employee's performance in a job based on considerations other than productivity alone.

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
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.
o A chase to assess job development, encourage interest and enhance job
performance by pointing out the development and recognizing productive work
o A feedback system that might otherwise be overlooked

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Process

Performance Management

Performance management includes activities to ensure that goals are consistently being
met in an effective and efficient manner. Performance management can focus on the
performance of an organization, a department, employee, or even the processes to build a
product or service, as well as many other areas.

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Basic Components of Performance Management

Multinational’s
global strategies
and goals

Subsidiary goals

Job analysis Individual employee Performance

(PCN, TCN, HCN) job appraisal
goals and standards

Training

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PERFORMANCE APPRAISALS IN AN INTERNATIONAL CONTEXT

Multinational Performance Management

While its general strategic position may be international, multinational, global or

transnational, a multinational makes strategic choices based on economic and political
imperatives. Within this context, as indicated in figure, the multinational has specific
expectations for each of its foreign subsidiaries, in terms of market performance and
contribution to total profits and competitiveness. When evaluating subsidiary performance
against these expectations, however, it is important to recognize various constraints that
may affect goal attainment. These include the following.

Various Constraints

Whole versus part: The balance sheet of this particular subsidiary might be continually in
the red, but this strategy, by tying up the competitors resources, may allow higher returns in
another market.

Non-comparable data: Frequently, the data obtained from subsidiaries may be neither
interpretable not reliable, as the following examples illustrate:

Example1: Sales in Brazil may be skyrocketing, but there are reports that the Brazilian
government may impose tough new exchange controls within a year, thus making it
impossible for the multinational to repatriate profits.Does this mean that the MNE is
performing effectively? Is the subsidiary performing effectively?

Example2: Sales in Perumay be booming, but headquarters management was unaware that
under Peruvian accounting rules, sales on consignment are counted as firm sales. How
should the headquarters accounting system handle these sales relative to sales from other
subsidiaries, with do not consider sales on consignments as firm sales?

Physical measures of performance may be easier to interpretthan in these examples, but

difficulties may still arise.

Volatility of global environment:The turbulence of the global environment requires that

long-term goals be flexible in order to respond to potential market contingencies. According
to Pucik, an inflexible approach may mean that subsidiaries could be pursuing strategies
that no longer fit the new environment.

Separation by time and distance:Judgments concerning the congruence between the

multinational and local subsidiary activities are further complicated by the physical distance
involved, time-zone difference, and the frequency of contract between the corporate head-
office staff and subsidiary management and the cost of the reporting system.

Variable levels of maturity: According to Pucik, without the supporting infrastructure of the
parent, market development in foreign subsidiaries is generally slower and more difficult to

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achieve than at home, where established brands can support new products and new
business areas can be cross-subsidized by other division.

In summary, there are a number of significant constraints that must be considered when
appraising the performance of a foreign subsidiary. Because this appraisal is primarily based
on strategic factors, it affects the appraisal and success of the subsidiary’s chief executive
most directly.

Control and Performance Management:Although it is not often described as such,

performance management is a part of a multinational’s control system. It will be recalled
from the discussion of control mechanisms that performance targets were listed as part of
formal control. Through formal control mechanisms and communication through the
feedback and appraisal aspects, performance management also contributes to shaping
corporate culture, both formally and informally, thereby acting as an informal control
mechanism as well as part of the bureaucratic control system.

Design process for expatriate performance

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PERFORMANCE APPRAISAL OF HCN EMPLOYEES

Parent Company Communicates Role Conception

Cultural Boundary:

HCN Managers Role

recipient

HC Stakeholders
Role Senders

HCN Managers Role

Behavior

THEORIES

G regerson and Black

Feldman and Tompson

Factors Affecting Commitment:

‡
Role conflict and autonomy
Lack of discretion
Role expectations
Rationale behind using TCNs
Expatriates appraisal
Similarity of jobs

HEADQUARTER’S SUPPORT

Removal from the comfort zone

Primary motivation
Support important

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HOST ENVIRONMENT

Environmental impact.
Performance depends on various demands.

CULTURAL ADJUSTMENTS

Critical determinant
Difficulty in adjusting(expatriate and family)
Individuals vary in terms of reaction and coping.
Conscious and responsive

A contextual model of expatriate performance Management.

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Who are Non-Expatriates?

Non expatriates are employees whose work involved international travel butare not
considered internationalassignees.

Non-Expatriate PerformanceManagement

Effects of factors associated with constant air travel, e.g.

Depression, anxiety, sleep disturbance, health

Stress associated with frequent absences and effect on family relationships ‡

Non-standard assignments share these aspects, e.g.

Commuter arrangements
Virtual assignments

Individual Performance and Appraisal

Factors to be considered in the Individual Performance and Appraisal process:

 Expatriate Performance Management System

 Compensation Package
 Task
 Headquarters’ Support
 Host Environment
 Cultural Adjustment

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International Compensation

Key components of an International Compensation Program –

 Base Salary
An expatriate’s base salary is normally in the same range as the base salary for a
similar position in the home country.

 Foreign Service Inducement/Hardship Premium

A Foreign Service premium is 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
o Hardship allowances
o Payments to compensate expatriates for exceptionally hard living and
working conditions at certain foreign locations.

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 o Housing allowances
o Cost-of-living allowances
o Education allowances
o Relocation allowances
o Parent country wages everywhere
o Wean expatriates from allowances
o Pay based on local or regional markets
o Cafeteria selection of allowances
o Global pay systems
 Benefits
Many firms also ensure that their expatriates receive the same level of medical and
pension benefits abroad that they received at home
 Tax differentials

COMPENSATION PACKAGE

It is essential that we recognize the important of remuneration and reward in the

performance equation. Perceived financial benefits, along with the career progression
potential associated with an overseas assignment, are often important motives for
accepting the posting, It these expectations are not realized during the assignment, the level
of motivation and commitment is likely to decrease, thus affecting performance.

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Expatriate Performance Appraisal: Challenges

 Fit of international operation in multinational strategy

 Unreliable date
 Complex and volatile environments
 Time difference and distance separation
 Local cultural situation
 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 of

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PCN role conception

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TCN role conception

Bibliography

IHRM by:
www.wikipedia.com
www.hrnotes.com
www.scribd.com

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