Performance Management For A Global Workforce: Aspects and ...


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Performance Management For A Global Workforce: Aspects and ...

  1. 1. Performance Management For A Global Workforce: Aspects and Business Implications ©∗ Part 2 Previously in Part 1*, we looked at performance management (PM) in terms of programmes, cycles, methods and techniques. This included discussion of performance appraisals (PA). We did this in a somewhat ethnocentric and context- neutral manner. Here, in Part 2, we ground this earlier discussion and analysis in a more nuanced and ‘real life’ manner by putting PM in its operational content. We do this by looking at PM in the global economy and for an international workforce. *“Knowledge Management Development: Organisational Structure and Human Resource Management Implications”, CCAB's Newsletter, December 2008. PM for a Global Workforce According to some studies, the global workforce and human resources (HR) has virtually doubled in size (i.e. the number of persons in the global economy) over the last 15 years. Having such workers increases pressure on HR management (HRM) and HR development (HRD) initiatives in general and PM programmes in particular. When companies expand globally, their workforce becomes increasingly diverse. Employees may speak multiple languages, come from distinct cultures and have different business priorities and ways of working. These differences can place strains on HRD professionals, who then need to consider different strategies for developing, localizing and deploying HRD activities (Farrell, 2007), including PM. Global companies face many challenges when conducting PM. One concern is that supervisors are often not able to directly observe employees’ performance, making it difficult for them to credibly manage performance in the more traditional sense. Another issue is that supervisors do not have enough time to monitor the performance of all the employees in remote work sites. Furthermore, those decentralized employees may report to more than one supervisor around the world, such as to business unit managers in headquarters, country managers in local offices and to project leaders, making it even harder to undertake meaningful performance assessments. Without the expertise, knowledge, and understanding of the global context, the credibility of PM feedback is suspect and the PM system put under strain. Given this, many global companies and organisations face the dilemma that exists between some corporate desire to standardize their PM programmes in overseas subsidiaries and the equally important requirement to embed sufficient flexibility to allow local cultural adaptation. Two different views prevail. One view suggests that the ‘best practice’ of PM will be universally effective across cultures (a universalistic perspective); and hence global companies should adopt ethnocentric approach. However, another view argues that the effectiveness of PM will likely to vary due to cultural differences and institutional isomorphic changes; and hence global companies should adopt polycentric or geocentric strategies to balance global integration and local adaptation. ∗ Published in 112º CCAB Newsletter, “Trade / Exportación”, July 2009.
  2. 2. Of importance here is the role of national cultures and how it plays out in organisations and the workplace. A path-breaking and continuingly influential work in this field is that of Hofstede (1981; 1991 and, with Bond, 1984). This developed a set of 4 factors, later with an Asian (Confucian) element added (see table) on a continuum from one end to another of a cultural aspect. Table 1: Culture At Work Factors – Hofstede Small Power Distance vs. Is it able to approach Underlying Questions Large Power Distance bosses easily? Individualism vs. Does it concern self or Collectivism others? Masculinity vs. Femininity Is it competitive or Work Factors (or Quantity of Life vs. cooperative? Quality of Life) Uncertainty Avoidance Does it concern stability? Long Term (Confucian) vs. What is the timescale Short Term Orientation to achieve objectives? Source: adapted from Rowley and Harry (2008) Others who have written about culture at work include Trompenaars (1993) and Hampden-Turner (1994). Their 7 factors of culture (see table) have a similar continuum. Table 2: Culture At Work Factors - Trompenaars and Hampden Turner Universalism vs. What is more important, Particularism rule or relationship? Individualism vs. Do we function in a group Collectivism or as individuals? Neutral or Affective Do we display our emotions? Specific vs. Diffuse Is responsibility specifically assigned or Underlying Questions diffusely accepted? Achievement vs. Ascription Do we have to prove ourselves to receive status or is it given to us? Work Factors Sequential vs. synchronic Do we do things one at a time or several things at once? Internal Control vs. External Do we control our Control environment or are we controlled by it? Source: adapted from Rowley and Harry (2008) Another set of factors is from the Globe (Global Leadership and Organizational Behaviour Effectiveness) Project (see table). Table 3: Culture At Work Factors – GLOBE Assertiveness Are people expected to Underlying Questions be tough, confrontational & competitive? Future Orientation Is planning & investment in the future important? Work Factors Performance Orientation Is performance improvement & excellence encouraged? Human Orientation Are people encouraged to being fair, altruistic, generous, caring & kind? Source: adapted from Rowley and Harry (2008)
  3. 3. Some scholars (e.g. Fletcher and Perry, 2001) have questioned the universality of PM programmes across cultures. For example, giving and receiving feedback in performance review sessions will be very hesitant in Hostede’s (1980; 1991; and Bond, 1984, see table) ‘high power distance’ cultures. The extent of participation by employees in setting goals and objectives is low in most ‘high power distance’ situations. Another example is that PM may be less effective in ‘collectivist’ societies relative to ‘individualist’ societies because the employee’s focus shifts away from job accomplishments towards the maintenance of in-group relationships. Thus, the in-group collectivism dimension may moderate the relationship between a performance enhancing strategy and key workplace behaviours (Farh et al (1991; Costigan et al., 2005). Besides considering the particular contexts in which the PM programme is conducted, a further challenge is the ever-increasing need for speed-to-competency on critical strategic issues. The pressure on global companies to keep their employees on the cutting edge of knowledge, skills and resources is unrelenting (Van Dam, 2003). Thus, several key questions remain for PM, including the following. How do we manage the performance of a global workforce quickly, efficiently and effectively? If a global performance standard is set, how can local flexibility be embedded so as to take account of diverse peoples’ values, beliefs, perceptions, and background? Globalisation not only requires the adoption of a cross-cultural perspective in order to successfully accomplish goals in the context of global economy; but also needs higher standards of training, motivation and evaluation of people (Zakaria, 2000). Since people are separated by barriers such as time, language, geography and climate, peoples’ values, beliefs, perceptions, and background can also be quite different. The perennial problem remains in performance evaluation as to the values on which employees are appraised, as these vary between organisations and countries (Rowley, 2003). Organisations should be sensitive to this, so as not to underestimate the contribution of various groups of employees. Conclusion Over these twin parts on PM we have outlined and examined PM systems and looked at their applicability for a global workforce. In sum, the work on PM for a global workforce indicates both the limits to views on universalism and the ‘one best way’ to manage and the importance of contingency and context for management. The value of PM varies greatly across regions and countries. Therefore, global companies need to tailor their PM programmes to recognize these differences. © Professor Chris Rowley & Ms Irene Poon Faculty of Management, Cass Business School, City University, London, UK References Costigan, R.D., Iter, S.S., Insinga, R.C., Kranas, G., Berman, J.J. and Kureshov, V.A. (2005), ‘An Examination of the Relationship of a Western Performance-Management Process to Key Workplace Behaviours in Transition Economies’, Canadian Journal of Administrative Science, 22(3): 255-267. Farh, J., Dobbins, G.H., and Chang, B.S. (1991) ‘Cultural Relativity in Action: A Comparison of Self-Ratings Made by Chinese and US Workers’, Personnel Psychology, 44: 129-67. Farrell, W. (2007), ‘A World of Differences: Train and Maintain Your Global Workforce’, Chief Learning Officer, 6(7): 22-25.
  4. 4. Fletcher, C. and Perry, E.L. (2001), ‘Performance Appraisal and Feedback: A Consideration of National Culture and a Review of Contemporary Research and Future Trends’, in Anderson, N., Ones, D.S., Sinangil, H.K. and Wiswesvaran, C. (eds.), Handbook of Industrial, Work and Organizational Psychology (vol. 1), (pp. 127-144), Thousand Oaks, CA: Sage Publications. Globe Project information available on Hofstede, G.. (1980), Culture’s Consequences. London: Sage. Hofstede, G.. (1991) Culture and Organizations: Software of the Mind, London: McGraw Hill. Hofstede, G.. & Bond, M. (1984) ‘Hofstede’s culture dimensions: an independent validation using Rokeach’s Value Survey.’ Journal of Cross-Cultural Psychology, 15(4): 417-33. Hampden- Turner, C. and Trompenaars, F. (1994) Seven Cultures of Capitalism. London: Piatkus. Rowley, C. (2003), The Management of People: HRM in Context, London: Spiro Press. Rowley, C. and Harry, W.(2008) ‘Different Culture – Different Expectations’, Effective Executive Magazine, XI(8): 67-83. Trompenaars, F. (1993) Riding the Waves of Culture. London: Economist Books. Van Dam, N. (2003), ‘Educating a Global Workforce’, Chief Learning Officer, 2(6): 17. Zakaria, N. (2000), ‘The Effects of Cross-cultural Training on the Acculturation Process of the Global Workforce’, International Journal of Manpower, 21(6): 492-511.