Page 205 - DMGT548_GLOBAL_HRM

Global HRM

Notes 11.1 Performance Management

Performance management refers to the ongoing process of setting goals, self-assessment, manager
assessment, peer-assessment, coaching, development planning, and evaluation. It is widely
used in the business and has two forms:
1. Competitive assessment: where employees are rigorously compared against each other.
2. Coaching and development: where employees are evaluated against their own goals and
capabilities.
The basic components of international performance management are shown in Figure 11.1. It
provides a convenient starting point of the link between the multinational’s internationalisation
strategies, its goals for individuals international operations in terms of contribution to global
profitability, and individual performance management, whether PCN, TCN or HCN. This is
important since an individual’s performance is evaluated according to expectations of appropriate
outcomes and behaviour that contribute to organisational goal attainment.

Figure 11.1: Basic Components of International Performance Management

Multinational’s Internationalization
Strategies and Goals

Subsidiary Goals

Individual (PCN, TCN, HCN)

Job Job Goals Performance
Analysis and Standards Appraisal

Source: PJ Dowling et al. International HRM (2001) p. 119

11.1.1 Performance Management and other HR Processes

Performance management is the central process of the human resource cycle because it influences
the following essential processes:
1. Rewards management
2. Human resource planning

3. Training and development process
4. Relationship with strategy
An effective performance system at the strategic level depends upon the commitment of quality
management time of senior executives, including the CEO. Performance management is the
most important responsibility of HR executives in global transnational organisations.
For managing the performance of the employees, they are assigned with certain responsibilities
at the starting of the financial year based on the corporate budget and then the planning is done
to measure the effectiveness of the employees in MNCs. It includes selection of the key areas for
performance, target setting and action plan determination for achievement of the performance
and then assigning the weightage to the concerned responsibilities.

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