24-27th June, 2014

Uncertainty in a Flattening World: CHALLENGES FOR IHRM

24-27th June, 2014

Uncertainty in a Flattening World: CHALLENGES FOR IHRM

Allen D. Engle, Sr.

Marion Festing

Peter J. Dowling

Gaining Altitude on Global Performance Management:

A Multilevel Analysis

■ Context – a 4 stage process model

■ Little research on stage four: Systems Evaluation

■ Going from Micro to Macro – Individual appraisal to MNE evaluation and use

■ Aggregation via 4 processes:

■ Implications, Conclusions

Overview

FUNNELING SUMMATION CONVERSION SHARPENING, HONING

GPM: Demand Meets Supply

Demand due to:■ Advanced Competitive Markets – Drive for Performance■ Global Human Capital Mobility & Accountability

Supply due to:■ Oracle Based HR Decision Support System Platforms■ Advanced HR Metrics

Engle, Festing and Dowling, 2014

Four-Stage Model of GPM Systems Context

Systems Design

Systems Operations

Systems Evaluation

Macro strategy• Strategic interest:

- multidomestic - global - transnational

• Heritage – OriginScope of the system• Actors• Roles• Information sourcesPurpose of the systemDevelopment, rewards

• Clarify major responsibilities

• Develop performance standards

• Select performance constructs

• Createconceptual equivalence

• Determine method of measurement

• Decide how to assess• Define measures• Define performance

• Giveperiodic feedback

• Dialogue & coach

• Facilitate performance:−Eliminate roadblocks−Provide resources,

ongoing basis

• Evaluate individual formal performance:- Review overall

performance- Encourage

performance

• Aggregate unit performance profiles

• Evaluate- Validity- Acceptanceof the GPM system in process (Reaction)

LACK OF EMPIRICAL EVIDENCE

Design parameters >>• Frequency• Formalization• Feedback capability• Explicit Implicit• Focus:

- traits- behaviors- outcomes

Trainsystems users >>

A Paucity of ResearchOn how MNEs

■ Aggregate individual GPM results

■ Use these results for strategic purposes

We want✓ To gain altitude

✓ A higher perspective

GPM as individual level feedback and employee consequences, the micro cycle ...

But how do MNEs use GPM to assess macro strategy activities?

We have studied:

Gaining Altitude on GPM

4 Transformation Alternatives

1st Transformation Alternative

1st Transformation Alternative

■ Transformation via Funneling–Identifying high performers to higher levels of the MNE

■ Elitist vs. Inclusive Funnels–see Festing, Schaefer and Scullion, 2013

■ Talent Management Applications

1st Transformation Alternative

2nd Transformation Alternative

2nd Transformation Alternative

Transformation via SummationApplying a set of uniformed, common performance metricsat all levels

■ Balanced Scorecard

■ MNE Performance Dashboard

2nd Transformation Alternative

Summation of:

■ Past Performance–Financial Targets

■ Present Performance–Work Flow Processes and Performance Cycles

■ Future Performance–Human Capital Investments

2nd Transformation Alternative

3rd Transformation Alternative

3rd Transformation Alternative

3rd Transformation Alternative

Conversion – The form of performance information .Is altered with the level in the MNE.

Dimensions, Scales, Levels, Vocabulary

performance information

An Example of Conversion:

Distinction BetweenStrategic Performance Measurement Systems (SPMS)

and

Performance Measurement Systems(PMS)

in a sample of Spanish firmsby Gimbert, Bisbe and Mendoza (2010)

3rd Transformation Alternative

A Second Example From SAP America:

■Tier One –Business Results (4 indicators)

■Tier Two –Key Performance Drivers (4 indicators)

■Tier Three –Human Capital Capabilities (7 indicators)

■Tier Four –Human Capital Processes (13 indicators)

Cantrell, et al., 2006

3rd Transformation Alternative

4th Transformation Alternative

4th Transformation Alternative

■ Sharpening –Strategy whets and sharpens (modifies) GPM

■ GPM systems● Act as feedback

● Sharpen (modify) strategic configuration

4th Transformation Alternative

Macro to Micro

1. Corporate level strategic indicators“down to” operational level units

2. Operational units modify to capturelocal conditions and priorities –approved by corporate officers

3. GPM system activated and captures performance dimension information, “sent up”

4. Results are used to modify both:

● Strategic directions, pace, and goals; and

● Local performance metrics, weights, etc.,in the light of systems results evaluation

4th Transformation Alternative

■ Sharpening as “organizational change capacity”

–Shipton, Budhwar and Crawshaw, 2012

■ Elements of sharpening as acomplex, spanning, flexible approach in DynCorp’s “strategic performance measurement system”

–Kolehmainen, 2010

4th Transformation Alternative

How many vertical levels?

Corporate

Strategic Business Unit

Regional, Divisional

Local

Multiple Intersections to Gain Altitude

Corporate

Strategic Business Unit

Regional, Divisional

Local

As if this wasn’t enough ...

A Combination of Approaches

Using transformation activities

at MNE levelsdiffe

ring

A Combination Approach Example6-Step Ladder of Analytical HR Applications

Conversion or Sharpening

Conversion or Sharpening

Funneling

Funneling

Funneling

Summation

Talent Supply Chain

Workforce Planning

Customize EVP

Focus HR Investments

Critical Talent Management

Employee Database

Harris, Craig, and Light (2011)

Conclusions

■ Build Multilevel Vocabularies –Bridge the divide

■ Macro –International strategy literature, models, vocabularies

■ Micro –IHRM Literature, models, vocabularies

■ More …Multilevel reading, research designs, theorizing

Conclusions: A Proposed Agenda

■ Repeat Lawler’s call for a balanced, but

● essentially centralized,

● strategically customized bundled systemof IHRM culture and technology

■ A GPM With four qualities:

1. Parsimonious use ofperformance dimensions, weights, and levels

2. Thoroughly understood by participants

3. Widely shared

4. Locally interpreted

Lawler, Benson and McDermott, 2012 .

Conclusion

Thank you.for your kind attention.

Any questions?