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Effective human resources management (HRM) is essential for optimally utilizing creativity and attaining individual as well as organizational goals. Performance appraisal should be aim to goals of the employees and the organization. This is essential because employees can develop only when the organization's interests are fulfilled. The organization's main resources are its employees, and their interest cannot neglect. Mutual goals provide for growth and development of the organization as well as of the human resources. They increase enhance effectiveness human resources in the business.
Before expatriate employee departs from the home-base country, the HR Department should work with managers responsible for expatriate employees to develop a critical professional profile for each employee who is placed on an international assignment. This profile should clearly outline what the company's expectations and productivity standards are in areas such as profitability and operation efficiency.
Performance criteria and goals are best established by combining the values of each local environment with the home-office's performance standards. An individual country profile should be developed and should take into account the foreign subsidiary's environment. This profile should used review any factors that may have an effect on the expatriate employee's performance. Such factors include language, culture, politics, labour relations, economy, government, control, and communication.
2.0 A BRIEF REVIEW OF LITERATURE
High motivation is essential for ensuring commitment of human resources to the given objectives. The key to motivation lies in integrating organizational and individual goals. Therefore, a manager has to concentrate on basic HRM tasks such as planning, development, compensation and evaluation. Evaluation includes performance planning, appraisal. These are critical in effective HRM. (Rao, T. V. 1985.Â Performance Appraisal Theory and Practice.Â New Delhi: Vikas Publishing House.)
Performance appraisal is a management tool which is helpful in motivating and effectively makes use of human resources. Assessment of human potential is difficult, no matter how well designed and appropriates the performance planning and appraisal system is. The performance appraisal system should be mutual relation with the organizational mission, value system; cover assessment of performance as well as potential for development; take care of organizational as well as individual needs and help in creating a clean environment by linking rewards with achievements, generating information for the growth of the employee as well as of the organization, and suggesting appropriate person-task matching and career plans. (Pucik, 1984; 404)
Feedback is an important component of performance appraisal. While positive feedback is easily accepted, negative feedback often meets with opposition unless it is objective, based on a credible source and given in a skilful manner. Employees would like to know from a performance appraisal system to concrete and tangible particulars about their work; and assess their performance. This would include how they did, could do better in future, could obtain a larger share of rewards and could achieve their life goals through their position. (Einstein, W. O., & LeMere-Labonte, J. 1989. Performance appraisal: dilemma or desire?Â Sam Advanced Management Journal,Â 54Â (2): 26-30.)
Therefore an employee would desire that the appraisal system should aim at their personal development their work satisfaction and their involvement in the organization. From the point of view of the organization, performance appraisal serves the purpose of providing information about human resources and their development, measuring the efficiency with which human resources are being used and improved, providing compensation packages to employees and maintaining organizational control. (Einstein, W. O., & LeMere-Labonte, J. 1989. Performance appraisal: dilemma or desire?Â Sam Advanced Management Journal,Â 54Â (2): 26-30.)
Source: [Â Craig, E., Schneiier, R., Beatty, W., and Baird, L. S. 1986.Â Training and Development Journal.Â May]
2.1 Approaches and Techniques in Performance Appraisal
Performance appraisal is a multistage process involving several activities, which can be using a variety of approaches. Some of these approaches are considered below, based on (Einstein and LeMere-Labonte, 1989; and Monga, 1983ïŠ
Intuitive approachÂ in this approach, a supervisor or manager judges the employee based on their perception of the employee's behaviour.
Self-appraisal approachÂ Employees evaluates their own performance using a common format.
Group approachÂ the employee is evaluated by a group of persons.
Trait approachÂ this is the conventional approach. The manager or supervisor evaluates the employee on the basis of observable dimensions of personality, such as integrity, honesty, dependability, punctuality, etc.
Appraisal based on achieved resultsÂ in this type of approach, appraisal is based on concrete, measurable, work achievements judged against fixed targets or goals set mutually by the subject and the assessor.
Behavioural methodÂ this method focuses on observed behaviour and observable critical incidents.
There are several other techniques of performance appraisal as well, each with some strong points as well as limitations. Oberg (1972) has summarized some of the commonly used performance appraisal techniques.
(i)Â Essay appraisal method
The assessor writes a brief essay providing an assessment of the strengths, weaknesses and potential of the subject. In order to do so objectively, it is necessary that the estimate property or income knows the subject well and should have interacted with them. Since the length and contents of the essay vary between assessors, essay ratings are difficult to compare.
[European Journal of Social Sciences - Volume 7, Number 3 (2009)]
(ii)Â Graphic rating scale
A graphic scale 'assesses a person on the quality of his or her work (average; above average; outstanding; or unsatisfactory).' Assessment could also be trait centred and cover observable traits, such as reliability, adaptability, communication skills, etc. Although graphic scales seem construction, they have application in a wide variety of job responsibilities and are more consistent and reliable in comparison with essay appraisal. The utility of this technique can be enhanced by using it in conjunction with the essay appraisal technique. . (Decenzo, 2002).
Staff Retention and Performance Management at Qatar Museum Authority
(iii)Â Field review method
Since individual assessors differ in their standards, they introduce bias in their ratings. To overcome this assessor-related bias, essay and graphic rating techniques can be combined in a systematic review process. In the field review method, 'a member of the HRM staff meets a small group of assessors from the supervisory units to discuss each rating, identifying areas of inter-assessor disagreement.' It can then be a mechanism to help each assessor to perceive the standards uniformly and thus match the other assessors. Although field review assessment is considered valid and reliable, it is very time consuming.
(iv)Â Forced-choice rating method
Unlike the field review method, the forced-choice rating method does not involve discussion with supervisors. Although this technique has several variations, the most common method is to force the assessor to choose the best and worst fit statements from a group of statements. These statements are weighted or scored in advance to assess the employee. The scores or weights assigned to the individual statements are not revealed to the assessor so that she or he cannot favour any individual. In this way, the assessor bias is largely eliminated and comparable standards of performance evolved for an objective. However, this technique is of little value wherever performance appraisal interviews are conducted. (Dessler, 2000).
PerformanceÂ reviews and career discussions. TheÂ TescoÂ LeadershipÂ ...Â identify if there are gaps in their skills or knowledge byÂ usingÂ ...Â OneÂ methodÂ to assess the benefits is by setting. SMART objectives. This makes it easier to measure improvement after training.Â Tesco also uses. Forced-choice rating method
(v)Â Critical incident appraisal method
In this method, a supervisor describes critical incidents, giving details of both positive and negative behaviour of the employee. These are then discussed with the employee. The discussion focuses on actual behaviour rather than on traits. While this technique is well suited for performance review interviews, it has the drawback that the supervisor has to note down the critical incidents as and when they occur. That may be impractical, and may delay feedback to employees. It makes little sense to wait six months or a year to discuss a misdeed, a mistake or good display of initiative.
(vi)Â Management by objectives
The employees are asked to set or help set their own performance goals. This avoids the feeling among employees that they are being judged by unfairly high standards. This method is currently widely used, but not always in its true spirit. Even though the employees are consulted, in many cases management ends up by imposing its standards and objectives. In some cases employees may not like 'self-direction or authority.' To avoid such problems, the work standard approach is used.
(vii)Â Work standard approach
In this technique, management establishes the goals openly and sets targets against realistic output standards. These standards are incorporated into the organizational performance appraisal system. Thus each employee has a clear understanding of their duties and knows well what is expected of them. Performance appraisal and interview comments are related to these duties. This makes the appraisal process objective and more accurate. However, it is difficult to compare individual ratings because standards for work may differ from job to job and from employee to employee. This limitation can be overcome by some form of ranking using pooled judgment.
(viii)Â Ranking methods
Some of the important forms of ranking for performance appraisal are given below, based on (Oberg, 1972; and Monga, 1983)
(a)Â Alteration ranking methodÂ the individual with the best performance is chosen as the ideal employee. Other employees are then ranked against this employee in descending order of comparative performance on a scale of best to worst performance. The alteration ranking method usually involves rating by more than one assessor. The ranks assigned by each assessor are then averaged and a relative ranking of each member in the group is determined. While this is a simple method, it is impractical for large groups. In addition, there may be wide variations in ability between ranks for different positions.
(b)Â Paired comparisonÂ the paired comparison method systematizes ranking and enables better comparison among individuals to be rated. Every individual in the group is compared with all others in the group. The evaluations received by each person in the group are counted and turned into percentage scores. The scores provide a fair idea as to how each individual in the group is judged by the assessor. (Decenzo, 2002).
(c)Â Person-to-person ratingÂ in the person-to-person rating scales, the names of the actual individuals known to all the assessors are used as a series of standards. These standards may be defined as lowest, low, middle, high and highest performers. Individual employees in the group are then compared with the individuals used as the standards, and rated for a standard where they match the best. The advantage of this rating scale is that the standards are concrete and are in terms of real individuals. The disadvantage is that the standards set by different assessors may not be consistent. Each assessor constructs their own person-to-person scale which makes comparison of different ratings difficult.
(d)Â Checklist methodÂ the assessor is furnished with a checklist of pre-scaled descriptions of behaviour, which are then used to evaluate the personnel being rated (Monga, 1983). The scale values of the behaviour items are unknown to the assessor, who has to check as many items as she or he believes describe the worker being assessed. A final rating is obtained by averaging the scale values of the items that have been marked.
(e)Â Behaviourally anchored rating scales (BARS)Â this is a relatively new technique. It consists of sets of behavioural statements describing good or bad performance with respect to important qualities. These qualities may refer to inter-personal relationships, planning and organizing abilities, adaptability and reliability. These statements are developed from critical incidents collected both from the assessor and the subject.
(f)Â Assessment centresÂ this technique is used to predict future performance of employees were they to be promoted. The individual whose potential is to be assessed has to work on individual as well as group assignments similar to those they would be required to handle were they promoted. The judgment of observers is pooled and paired comparison or alteration ranking is sometimes used to arrive at a final assessment. The final assessment helps in making an order-of-merit ranking for each employee. It also involves subjective judgment by observers.
For example, management by objectives, goal-setting and work standard methods are effective for objective coaching, counselling and motivational purposes. Critical incident appraisal is best suited when supervisor's personal assessment and criticism are essential. A carefully developed and validated forced-choice rating can provide valuable analysis of the individual when considering possible promotion to supervisory positions. Combined graphic and essay form is simple, effective in identifying training and development needs, and facilitates other management decisions. (Latham, G. P., & Locke, E. A. (1983). Goal Setting-A Motivational Technique That Works)
Nokia is an innovative firm with a global matrix structure and a typical line management configuration at
The country level. Therefore the performance appraisal system called 'Investing in People' has been designed as Ranking methods and electronic briefing sessions (Pollitt, 2004), which are perfectly aligned with the structure and overall aim of the company.
Does performance appraisal lead to dysfunctional behaviour amongst employees?
Yes, a general rule in appraising employees is that each international office should use different appraisal system. Employers should not take a performance appraisal system that was designed for appraising domestic employees and try to modify it for use with expatriate employees because many variables (e.g., environment, task criteria, and personality factors) need to be understood and taken into consideration when assessing an expatriate employee's performance.
General electric company in the USA and involved looking in detail at the appraisal experience of 92 male employees. At that time, the company had an established appraisal system in operation that was used to identify developmental opportunities, and also as the basis for setting salary levels.(source; Meyer et al 1965)
Not surprisingly, some managers and employees dislike performance appraisal! The major reasons for dislike include lack of ongoing review, lack of employee involvement, lack of recognizing for good performance etc. Some have argued all performance appraisal system are so flawed that they are handle with skill, abusive, autocratic and counterproductive. Though the purpose of performance management is to ensure and improve of employees activities and outputs are congruent with the organizational goals, but various dysfunctional behaviours occurs in the organization due to some unethical reason or sometimes situational impression. Performance appraisals lead to dysfunctional or optimistic behaviours which affect organizational performance. (Gary Deshler, 2006), Hence, dysfunctional behaviours lead an organization performance downstairs which arises for a lot of causes. (Otley and Pierce 1995; Rhode 1978; Alderman and Deitrick 1978))
Dysfunctional behaviour in any form is usually the result of the behaviour of the person trying to control on the situation. The teenager who lives in filth will never clean their room because "they have been told to do it." Human beings always...
Irish expatriate in Moscow; exploratory evidence on aspects of adjustment Frameworks of international adjustment, development primarily in the North American context, are applicable to the European context by examining the adjustment of Irish expatriates in Moscow. (OECD1994) In general, a positive relationship existed between role clarity, host country national interaction, quality of the working environment, the level of company support was also seen to be linked to work satisfaction. However, the study found that aspects of cultural novelty, previous international experience, role novelty and role discretion did not seem relevant to Irish expatriate in Moscow. (O'Malley1992:45)
Tesco's needs to mange the performance of its employees effectively if it is to remain as the UK's leading retailer and maintain a competitive edge.
How does appraising an expatriate's performance differ from appraising that of a home-office manager?
The first step toward increasing the accuracy of expatriate performance appraisal is to clearly identify the strategic goals for sending employees on overseas back to corporate headquarters, co-ordinating subsidiaries and headquarters, transferring critical technologies and innovation or developing future global leaders clearly the need to achieve strategic business goals largely dictates is expected of a global manager in each given assignment and country.
BT designed its expatriate remuneration policy: Employment conditions abroad ,and its accompanying taxations tables to calculate a net salary at home. this is later split between spend able income and a housing and savings element, the latter intended to reflect UK financial commitments and therefore not adjusted for cost-of-living differences.(Dowling and schuler,1992;122-129)
Next firm must design accurate performance appraisal system to determine if expatriates are actually meeting these goals linking business appraisals is to clearly understand the foreign situation and the context in which the expatriate performs. Understand expatriate is also often clouded because of the distance form the home office rate's inexperience with foreign assignment, and the increased complexity of the foreign situation, culture and relationships, behaviour that seem to suggest poor performance
EXPATRATE PERFORMANCE MANAGEMENT AT NOKIA, FNLAND Tahvanainen (2000) presents a case study of Nokia Telecommunications (NTC), a MNC. NTC operates a global, PMS, meaning that all employees' performance should be managed on a similar basis. Her study in fact suggests that five expatriate groups emerged: top manager's middle managers business establishers. (LTT Research Ltd., Helsinki, Finland)
There is also a unique view from the top. There are those who themselves have been expatriates, and now provide corporate leadership. There are those who remember their resolve that "if I ever get to the top levels of management I'll do all I can to insure that expatriate families are cared for appropriately." No one outside the boardroom knows how many times those resolves have been pursued with vigor. And the advances that have been made to improve the lot of company expatriate families are due in part to the persistence of those with this unique view. (Kubo, H. (1990, February 14-16). Improving Employee Communications. Presented at Pacific North West Orchard Business Shortcourse. Washington State University and Oregon State University.)Â
But there are the harsh realities with which those in management must deal. The market does impact all we do. Mergers have been made that impacted everything we do. And the changes in products and services now provided to our clients are significantly different from that which was provided when some of the returning expatriate employees left here three years ago. This could e one of the advantages to the home office manager and expatriate manager.
Virtually all the companies have some formal or informal means of appraising their expatriate employee's performance. Performance appraisal means evaluating an employee's current and/or past performance relative to his or her performance standards. While "appraising performance" usually brings to mind specific appraisal tools (Blech, 2007). Performance appraisal also always assumes that the employee understood what his or her performance standards were, and that the supervisor also provides the employee with the feedback, development, and incentives required to help the person removed performance deficiencies or to continue to perform above par. The aim should be improve performance.
Bosch company also reflects the tendency for German companies it give managers international experience much their career than they did in previous decades (Hirschbrunn & Schlossberg 1996; mayrthofer;1996 scullion 1993)
How to avoid some of the unique problems of appraising the expatriate performance?
A person refusing to learn how to live and work in another culture is certain that the rest of the world should "do things the way that we did back home." When this expression is heard, it is a sure sign that the one speaking does not understand the nature of culture. But of one thing this person is sure, "folks ought not to do things the way these crazy people do, but deal with reality in the 'correct way,' like back where I grew up." The person who "goes native" in a host culture occasionally is seen in a host country. Such a person is so taken with the ways of that culture he or she might say: "I'm so impressed with the beauty of this country, its language, its music, and its people. Their approach to life is the way all cultures should deal with life."
Today's world-class companies such as Nokia employ effective employee performance management (PM) practices. They have realized that seeking sustaining competitive advantage from the effective management of human resources is of utmost importance. The expatriate employees. A key finding of the case study of Nokia Telecommunications is that the performance of different types of expatriates in varying situations is, and should be, managed dissimilarly. . (Â© 2000 John Wiley & Sons, Inc.)
The literature identifies a number of significant constraints on strategic performance measurement and management in MNEs. These include the possible conflict between global and subsidiaries, the unsteady of the international market and the variable levels of market maturity. These factors make objective appraisal of subsidiary and expatriate performance highly complex. further it is important to reconcile the tension between the need for universal appraisal standard with specific objectives in local units, and to recognize that more time may be needed to achieve result in markets which enjoy little supporting infrastructure from the parent company. The western MNEs have implemented standardized performance appraisal practice for their local professionals and managers (Financial Times 28 July 2009)
Performance appraisal of host country employees; western MNEs in china. The literature identifies a number of significant constraints on strategic performance measurement and management in MNEs.(e.g Von Glinow and Teagarden 1988; Child and Markoczy1993) These include possible conflict between global and subsidiaries, the volatility of the international market and the variable levels of market maturity. These factors make objective appraisal of subsidiary and expatriate performance highly complex. .(schuler et al.1991), the issue of the extent to which performance appraisal should be adapted to suit local conditions. (-international HRM contemporary issues in Europe edited by Chris Brewster and Hilary Harris page 16and 17)
Over long periods of time, decisions are made about how to solve problems in a group, from the family, to larger groups in specific contexts, where there are basic assumptions made and where cultural norms are formulated. As those principles are put to use repeatedly, they come to be shared by a larger number of persons. Thereby there is an invisible map stored in each person's mind in that culture by which behaviour is guided. It occurs in every group, whether your family, your company, or your country.
The recalls by Sony and Toyota have received intense attention in the Japanese news media. Defects have become a top topic on radio talk shows, and the biggest business daily, The Nihon Keizai Shimbun, started a front- page investigative series last week called "Can Japan Protect Quality?" Hiroshi Okuda, the retired chairman of Toyota and elder statesman of Japan's business world, called on his countrymen to do more about the declining competitiveness of Japanese manufacturing(Morishima, 1995)
Japanese companies in generally possess a culture that emphasises collectivism and a desire to maintain harmony (Shih et al., 2005). Much of the literature on performance management of international staff and particularly expatriate staff is derived from Western MNCs (Suutari and Tahvanainen, 2002; Fenwick, 2004; Dowling et al, 1999) although studies of international performance in MNCs from developing countries are beginning to emerge (Shen, 2004). (Entrekin and Chung, 2001; Shen, 2004; Mendonca and Kanungo, 1996).
The value of European acquisitions in the technology sector in the US increased 293% to $72.8 billion. Working effectively in an international joint venture or alliance requires high levels of interpersonal and cross-cultural skills on the part of expatriate manager
By Dr Hilary Harris, Director of the Centre for Research into the Management of Expatriation (CReME
The results of the appraisal system should be followed up through a set of well designed and enforced policies, and translated into rewards and punishments. Performance of researchers is sometimes difficult to assess. A research manager has to balance between researchers' creativity and organizational goals. Researchers do not like others passing judgment on qualitative or quantitative aspects of their work, yet the need for an effective performance planning and appraisal system in a research organization is well accepted.
An effective negotiated performance appraisal helps the employee take additional ownership for both continuing effective performance and improving weak areas. Employee goals set through performance appraisals should be difficult but achievable, as goals that are overly ambitious are doomed for failure. Some employees tend to boycott their own progress by setting impossible goals to achieve. Finally, employeesÂ want to knowÂ what you think of their work. Letting workers know that you have noticed their efforts goes a long way towards having a more motivated workforce.
Failed international assignments can be extremely costly to an organization. Companies should place great emphasis on the importance of selecting appropriate staff members for international assignments. A consistent and detailed assessment of an expatriate employee's performance, as well as appraisal of the operation as a whole, is critical to the success of an international assignment. Issues such as the criteria and timing of performance reviews, raises, and bonuses should be discussed and agreed on before the employees are selected and placed on international assignments.
Thus, when a person departs his or her culture of origin-whether the family, the place of employment, or the country in which one was nurtured-there is a challenge to adjust to the new culture. It is the wise person who avoids the extremes stated above and learns to adjust to the host culture into which that person has relocated. Such a person is an expatriate, one who resides outside his or her home country.