MNC Implementing a Common Set of Performance Management Practices Throughout Its Global Subsidiaries

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MNC Implementing a Common Set of Performance Management Practices Throughout Its Global Subsidiaries

MNCs in today’s time are dealing with many types of complex situations. In this environment, it is critical for the management to ensure that they have a plan for the skills management. In the international markets there is higher competition hence efficiency needs to be brought in the work process which cannot be possible without making the skills within the MNCs efficient. International HRM has to make sure that they have a performance management plan in each country (Cogin and Williamson, 2014). However, there is always a question that whether there should be common performance management plan or there should be different performance management systems that differ country-wise. Since the nature and behaviour of the people differs with the culture hence performances also varies accordingly. This essay will illustrate the things that need to be considered while implementing a common set of performance management practices throughout its global subsidiaries with the examples of two nations.

Performance management system is necessary in the modern day business as it is helpful in monitoring the performance of the employees and at the same time it is helpful in improving the skills on the basis of the pre-defined measures (Briscoe, Tarique and Schuler, 2012). It is critical that at the global levels MNCs implement performance management practices that improve the overall performance of each of the subsidiaries of the organization. There must be use of best practice approach at the global levels in performance management.

At the global levels when the MNC is planning to implement a common set of performance management practices throughout its global subsidiaries then they need to make sure that they are taking care of different cultures in different nations. This is necessary for ensuring that no cultural aspect of any people gets hurt while the performance management system is implemented at the global levels (Ahlvik and Björkman, 2015). For example in the countries like United Kingdom and Vietnam, there is difference in culture and if the company implements the common performance management system then they need to ensure that all the aspects of the cultures in both nations has been taken care effectively. For instance the working culture in both the nation is different i.e. in United Kingdom people like to have more leaves when compared with Vietnam and hence if the performance practice includes the numbers of days they are present then it will not motivate the people that are in United Kingdom. On the other hand if the performance management practices include reviewing number of extra hours a worker is working then United Kingdom’s employees will be more disappointed (Mahlendorf, Rehring, Schäffer and Wyszomirski, 2012). However this evaluation totally depends on the compensation that is given in two nations.

If the performance management practices include higher use of technology then a company always need to make sure that what is the condition of the market in terms of technology i.e. technologically advanced nations such as United Kingdom will have more employees that will be highly sound in the use of technology and hence utilising technology in the performance management practices will be easier (Mellahi, Frynas and Collings, 2016). This is true in terms of the fact that how the employees are using technology in the workplace and at the same time how the HR managers can use technology for monitoring the performance of the employees. This can also be understood in terms of the fact that if the employees were able to use technology in a better manner then it is also easier for the HR managers to monitor the performance of the employees as well. For instance in the sales department if the employees were able to do sales through the help of technology mediums then there is a better chance that companies are able to have account of the performance. In Vietnam where the employees at lower levels are not so good in technology, it is always difficult to measure their performance (Ansari, Reinecke and Spaan, 2014). In this kind of difference it is essential that when the company is implementing common performance management practices then a bit leverage needs to be given to the workers in Vietnam so that they also fill in the criteria for effective performance. It is critical that employees of Vietnam are trained in a better manner so that they equal the technological skills of people in United Kingdom. This will make it easier for the managers to implement the common set of practices related to technology at the global levels.

On the other hand practices such as regular audits can be implemented in both nations at the global levels. However the people that will be included in the performance audit and the way in which performance also needs to change according to the country. For instance in United Kingdom people are more concerned about their rights hence they ask for getting indulged in the performance management systems (Holtbrügge and Mohr, 2011). Increasing employee’s engagement in the deciding the criteria for performance management will have impact on the motivation of people. It is necessary that in the performance management practices the concerns of people in both nations needs to be addressed. Company needs to ensure that they engage people from different organisational levels in deciding the criteria for performance management so that there is no chance of conflict in any country.

It is also to be understood that performance management practices such as productivity evaluation can be done in any country but a fact needs to be taken into account that people in both these nations have different levels of knowledge as they have graduated from different standards of college and hence expecting exactly same performance from people of these nations will be appropriate (Ferner and Almond, 2013). It is critical that while decision about the common performance management practices are made, it is taken care that knowledge levels of the people in these two nations are different and hence the comparison between the performance of people in these two nations must be done from the people of the same nation rather than from each other. Productivity standards need to be set at the minimal levels so that employees from both the nations qualify in the performance evaluation criteria.

In the performance management practices deciding of the rewards is very much critical aspect as it is directly connected to the motivation of the people which again has a direct relation with the performance (Lin, 2014). It is to be understood that pay scale of the employees in both the nations are different where it is seen that United Kingdom has higher pay scale when compared with Vietnam and in this condition when the rewards will be paid it will be higher for the people in UK then in Vietnam. Due to this there is always a chance that companies will have to spend more on the people of UK and hence MNC will have to spend more amount of money and it is also a chance that Vietnam’s subsidiary will not feel good. In this regards it is critical that a standard reward plan is made so that it satisfies the need of the people in both the nation and also do not have significant effect on the overall expenses of the company (Kostova, Marano and Tallman, 2016). In this also there must be higher employee engagement as people will be more satisfied when the reward plan is decided as per their demand. It is also the fact that better the reward always motivates people and hence reward management needs to be done appropriately.

Performance management practices such as coaching and training also needs to be given effectively. It is critical for the management to understand the complexities and the difficulties faced by the employees in their work. It is critical that company provides training at regular interval so that skills of the employees remain on the better side. In the MNCs there must be implementation of training model that is same however the cultural aspects needs to be given as a priority within the firm (Ambos and Birkinshaw, 2010). For instance people in these nations have different understanding and different level of training requirement hence performance management practices must include the training model that can bring them at equal platform on the basis of which they can do their work. Once the employee’s standards come at the equal levels they can implement common performance management practices. There must be regular training of the reviewer so that they can also do the review of the performance in an effective manner (Schaaper, et al. 2013). This training should also be uniform as they are the major people who will have the responsibility to make performance review.

International HRM needs to ensure that there must be transparency in the common performance management practices. This is essential for improving the efficiency of the performance review and at the same time it will also ensure that every subsidiary knows about the other which will automatically reduce the chances of conflict between the subsidiaries and also reduce the chance that people at any subsidiary gets dissatisfied. Each subsidiary knows about the other and at the same time each employee knows about what is common standard in the company throughout the globe (Maley and Moeller, 2014). Such transparency also allows MNCs to avoid the chances of internal dissatisfaction. International HRM will have to make sure that they implement advanced technologies in performance assessment. Since in the age of internet technologies, all the subsidiaries are connected and at the same time each subsidiary has access to the information that is stored by any subsidiary. On the other hand with the help of technology an organisation will be able to store every data in front of the people that are actually the part of the performance review or say whose performance will be reviewed. This will help in implementing common performance management practices irrespective of the country they are in. Nobody will raise their concern as they can see what performance is and they can themselves audit their performance and calculate the reward (Chung, 2015). Transparency also allows company to do appraisal in a better manner. This is because when they are transparent no one feels that they are being cheated or they have not been rewarded as per their performance.

Appraisal another important practice of the performance management can be made common for all the subsidiaries. For this they need to have a common appraisal policy where the according to the work done by the people they should be given appraisals (Heikkilä, 2013). When a common policy is made by the company by discussing it with the employees at the global levels then companies might not face implementing it. In appraisals there must be only one criterion that is performance of the employees. Since people are from different parts of the world working at each unit hence there must not be any kind of discrimination among the people. Performance management practices like promotions should also have the same criteria where promoting a person should be dependent on the skills and the performance that they have delivered (Chung, Sparrow and Bozkurt, 2014). Implementing at the global levels can only be done if proper organisational structure within the firm is followed. Hence at the global levels proper structure needs to be followed.

Performance management practices like finding the future skill requirements for the company as per the industry standards and the changing dynamics of the market. Hence performance at the global level needs to be managed smartly where each people’s weaknesses are to be found out and accordingly they need to be trained so that performance standards are met and accordingly they can make and redefine their performance management practices for their future (Fee, McGrath‐Champ and Yang, 2011). For this a committee needs to made within the firm to ensure that they are moving as per the standards in the industry and design the organisational practices and processes also in the best interest of the firm. This is necessary for continuous improvement in the organisation.

In conclusion it can be said that it is good to implement universal performance management practices in different parts of the world but they need to take care that they take care of the local demands of the people and the business culture in that nation.

References

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