Gaining altitude on gpm a multilevel approach office 2010 version

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 – Origin
Scope of the system
• Actors
• Roles
• Information sources
Purpose of the system
Development, rewards
• Clarify major
responsibilities
• Develop performance
standards
• Select performance
constructs
• Create
conceptual
equivalence
• Determine method of
measurement
• Decide how to assess
• Define measures
• Define performance
• Give
periodic 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
- Acceptance
of the GPM system in
process (Reaction)
LACK OF EMPIRICAL
EVIDENCE
Design parameters >>
• Frequency
• Formalization
• Feedback capability
• Explicit Implicit
• Focus:
- traits
- behaviors
- outcomes
Train
systems users >>

A Paucity of Research
On 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:

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

 Transformation via Summation
Applying a set of uniformed, common performance metrics
at all levels
■ Balanced Scorecard
■ MNE Performance Dashboard

Summation of:
■ Past Performance
–Financial Targets
■ Present Performance
–Work Flow Processes and Performance Cycles
■ Future Performance
–Human Capital Investments

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 Between
Strategic Performance Measurement
Systems (SPMS)
and
Performance Measurement Systems
(PMS)
in a sample of Spanish firms
by Gimbert, Bisbe and Mendoza (2010)

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

4th Transformation Alternative

■ Sharpening –
Strategy whets and sharpens (modifies) GPM
■ GPM systems
● Act as feedback
● Sharpen (modify) strategic configuration

Macro to Micro
1. Corporate level strategic indicators
“down to” operational level units
2. Operational units modify to capture
local 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

■ Sharpening as “organizational change capacity”
–Shipton, Budhwar and Crawshaw, 2012
■ Elements of sharpening as a
complex, spanning, flexible approach in DynCorp’s
“strategic performance measurement system”
–Kolehmainen, 2010

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 levels

A Combination Approach Example
6-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)

■ 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 system
of IHRM culture and technology
■ A GPM With four qualities:
1. Parsimonious use of
performance 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?

Gaining altitude on gpm a multilevel approach office 2010 version

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