Problems Faced in International Performance Management

The primary aim of this process is to measure and improve the performance of employees. But it has its own challenges that render its effectiveness futile:

Biased Perception

Employees think that performance management process is full of biases. The ratings are subject to the reviewer’s whims & favouritism, and fail to take into account the true estimate of an employee’s performance or potential. It is a challenge for organizations to convince employees about implementation of fair and equal performance system.

Review Period

Even today, a majority of organizations do performance management exercise once a year. This means that employees get late feedback on how they are performing and may not get enough opportunities to improve. On the other hand, ongoing feedback mechanism is trending wherein companies prefer weekly, monthly or quarterly performance discussions with employees. Many organizations have revamped their performance processes. But, establishing the right metrics and frequent changing of goals may be disadvantageous. So, whether performance system should be ongoing or yearly practice is another challenge.

Rating Method

The traditional bell curve is still the most acceptable rating method across the organizations. Here, the employees are categorised as top (reward), middle (training) and bottom (fire) performers. But, it has drawn criticism for its archaic methodology. HR experts have been recommending new practices and tools, but their effectiveness is not proven yet. Hence, the choice of rating method also remains a concern.

Lack of Standardisation

While there are goals/appraisal sheets and documented processes to implement performance management system, there is hardly any consistency. The employees don’t receive inputs on how to fill up their sheets, while managers don’t get trained on how to carry out the process or use the rating scale. There are also no clear standards on what level of performance, trait or behaviour will differentiate between successful, average and non-successful performers. This leads to lack of clarity among both parties and across the organization, resulting in ineffective and inaccurate system.

Challenges of International performance management

There are many challenges associated with expatriate performance management. Although we have listed some below, they are likely to vary by business. Ideally work to identify the challenges your company is likely to encounter and attempt to mitigate them in the expatriate performance management plan.

Environmental Variations

Performance management systems rarely work in the same way domestically and internationally. Environmental variations including; different growth rates, the immediate environment and differences in performance, usually mean international performance appraisals need to be unique to each expatriate manager.

Time and Distance

Improvements in technology make this less of an issue than it once was, but time differences and local infrastructure will impact on performance and appraisals. This is particularly true of expats working in underdeveloped countries.

Cultural Adjustment

The employee’s ability to adjust to the organisational culture within the subsidiary, as well as the wider culture within their new country, is likely to impact performance. An understanding of the local organisational culture by the HR team, the management team and the employee will facilitate the creation of a measurable international performance management system.

Inconsistency of implementation

Like all performance development, it will only be successful if implemented consistently in company subsidiaries. Oversight of this may be a challenge if most Human Resource functions are centralised to headquarters, meaning some employees thrive while others are left directionless.

Tips for International performance management

Developing a system that will work successfully across markets is a significant challenge for a global human resources manager. To further compound the situation, there is very little best practice research as existing studies do not focus on the same variables or countries.

Lack of Credibility

A strong performance management system relies on a trusting relationship between employees and supervisors. When the employees doubt the credibility of the supervisors, they also will distrust the results of any performance management metrics those supervisors produce. The lack of credibility may come from inexperienced management, poor communication skills or general incompetence, according to ERMA. The lack of credibility from supervisors can lead to employees “checking out” of the job, either by leaving or by marking time without putting forth any effort.

Lack of Consistency

Performance management issues can also stem from supervisors delivering inconsistent feedback. Mixed messages and shifting types of employee evaluation methods can cause confusion and resentment among employees, leading them to distrust the performance management reports. Small businesses are highly prone to the damage that mixed messages can cause, as the small number of employees are more likely to communicate those mixed messages to each other. Business owners must maintain consistent tone and content in their feedback to workers if they want to ensure implementation of any performance management recommendations.

Lack of Established Goals

Business owners must have clear goals they wish to meet to keep the business alive. If they have not established specific goals, the employees will have no idea whether or not they’ve accomplished their tasks. Entrepreneurs must also clearly communicate those goals to the workers for the performance management processes to be effective, according to Jazz HR. A goal of “more sales” is not specific enough, but a goal of “20 percent increase in sales in the next 90 days” gives employees a goal they can reach.

Lack of Clear Strategy

Just as a lack of clear goals can cause performance management problems, so can a lack of a clear strategy on how to achieve those goals. Small business owners function as leaders for their employees. Leaders must provide guidance and plans for their subordinates to follow. A clear strategy also gives the business owner “milestones” to measure the company’s progress toward its goals and alternative tactics if the current actions are ineffective.