Page 161 - DMGT517_PERFORMANCE_MANAGEMENT_SYSTEM

Performance Management System

Notes 5. Confl ict Management: Human resource professionals must safeguard the interest of all
stakeholders to eliminate the conflict arising between manager-employees, employer-

employee and employees-organization on certain issues related to rewards and recognition
etc.
6. Transferring Information: Human resource professionals should ensure truthfulness of
communication in respect of performance feedback and counselling and help top leadership
in taking informed personnel decision.

13.5 Performance Management in MNC

MNC is a company that has business activities beyond its domestic borders. MNCs operate in
a number of countries for various business and competitive reasons. Corporate strategy varies
based on the extent to which an MNC wants or needs to adapt practices to local conditions.
Performance management (PM) is a strategic HRM process that enables 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. A number of studies
have suggested that, provided the design and implementation of PM are appropriate, it has the

potential to affect employee attitudes in a way that makes a significant and positive contribution
to company performance.

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Caution Performance management as a strategic human resource management process
enables the MNC to continuously evaluate and improve individual subsidiary unit.
(Lindholm 2000)
Effective performance management is important as a competitive advantage. Therefore,
performance management system assumes critical importance in the competitive priority of
MNCs. However, even if performance management represent a tool for control in implementing
organizational strategy, it should also consider local business conditions and be arranged in a

way that fit and is responsive to those.
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Did u know? What are the external factors affecting local performance?
External factors affecting local performance include economic circumstances, competition,
demographic, supporting infrastructure, unions and national culture.
There are major differences in implementation on the international operations, even if the goals
and purpose is quite the same as in the domestic. One thing that affects this is the degree of
support and interaction with the parent. The goals comprise two domains: evaluation and
development.

Evaluation Goals

The evaluation goals in the international environment include:

1. providing feedback to employees at all levels so they will know where they stand
2. developing valid bases for employment decisions involving pay, promotion, job assignment,
retention and termination

3. provide a mean to warn employees about unsatisfactory performance

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