PERFORMANCE MANAGEMENTDony Eko Prasetyo, S.IP.

What is performance management?

• A process that enables the multinational to evaluate and continuously improve individual, subsidiary unit and corporate performance, against clearly defined, pre-set goals and targets

Basic components of performance management

Evaluating subsidiary performance

• Factors to consider:– Whole versus part– Non-comparable data– Volatility of the global environment– Separation by time and distance– Variable levels of maturity

Control and performance management

• Performance management is part of the multinational’s control system

• Performance targets, for example, are part of formal control

• Performance management contributes to shaping corporate culture

Variables affecting expatriate performance

Individual performance management

• The task:– Chief executive officer– Structure reproducer– Troubleshooter– Operative

• Task variables more under the control of the multinational than environmental factors

Roles

• A role is the organized set of behaviours assigned to a particular position

• Effective role behaviour is an interaction between the concept of the role, the interpretation of expectations, the person’s ambitions, and the norms inherent in the role

(refer back to Chapter 7 – the role of the repatriate)

PCN role conception TCN role conception

Expatriate performance

• The support of headquarters is important – both to the individual expatriate and accompanying family members – as a performance variable

The host environment

• The external context can be a major determinant of expatriate performance

• Differing demands in terms of context:– Societal– Legal– Economic– Technical– Physical– Type of operation involved (eg. IJV versus wholly-owned

subsidiary)

Contextual model of expatriate performance management

Non-expatriate performance management

• A seemingly neglected group• Performance effects of factors associated with

constant air travel– Depression, nervous anxiety, sleep disturbance, health

(DVT, weight gain, poor diet)• Stress associated with frequent absences and effect

on family relationships• Non-standard assignments such as commuter

arrangements and virtual assignments share these aspects

Performance appraisal

• Performance criteria– Hard goals: objective, quantifiable and can be

directly measured– Soft goals: relationship or trait-based– Contextual goals: factors that result from the

situation in which performance occurs• An appraisal system that uses hard, soft and

contextual criteria is advocated

Other factors affecting appraisal• Who conducts the performance appraisal• Use of standardized or customized appraisal

form• Frequency of appraisal• Performance feedback

– Timely– Geographical distance affects

Appraisal of HCNs

• The practice itself confronts the issue of cultural applicability

• May be necessary to use local staff and a customized form

• Level of position involved is an important consideration

HCN role conception