Performance Management Systems in Multinational Enterprises: Developments and Future Directions

Background and Objectives of the Special Issue:

Every few months, the popular press or business publications publish a news item about some well-known organization that is getting rid of its’ performance management system (PMS).  More specifically, many of these organizations talk about getting rid of the numerical scales, and replacing those with one-on-one feedback and conversations, something they should have been doing in the first place. Although these reports have received a great deal of attention (e.g., Cappelli & Tavis, 2016), there has also been statement of concern over the wholesale abandonment of formal performance management systems (e.g., Goler, Gale, & Grant, 2016).

The fact remains that as long as there are individuals performing some kind of work in organizations, there will be a need for some manner of performance management in order to evaluate, compensate, and reward those individuals (see, e.g., Varma, Budhwar, & DeNisi, 2008).  These are even more critical in multi-national enterprises (MNEs), as these organizations face unique pressures, such as the competing demands between the need for congruence with home country practices and the need to adapt to host country environment and context (see, e.g., Mellahi, Frynas, & Collings, 2016). Since human resource processes such as PMSs are impacted by local culture and norms much more than other organizational processes, it is important that we study these closely in order to be able to help MNEs develop systems that can appropriate meet the needs of the various stakeholders.

Indeed, scholars have been studying these processes with the specific intent of helping organizations improve performance, as it was often assumed that improving individual performance would lead to improvements in organizational performance (DeNisi & Smith, 2014).  To examine the processes involved in performance management and appraisal, scholars have drawn upon several theories of psychology and social psychology.  However, as DeNisi and Smith (2014) note “the link (between individual and organizational level performance) has (had) never really been established in a direct way.”  Furthermore, as noted by DeNisi and Murphy (2017), although we have learned a great deal about how to improve individual performance, there has been surprisingly little progress made on how to influence firm-level performance. DeNisi and Smith (2014) went on to argue that certain bundles of HR practices could lead to the transformation of individual performance to organizational level performance.  Given the importance of individual performance to organizational performance, especially for MNEs, we believe it is time to re-visit the processes and systems that govern performance management, so we can better understand how organizations might implement systems that can lead to improvements in individual, and, more critically to improvements in organizational performance. 

Over the decades, scholars have presented a fairly comprehensive body of literature looking at performance appraisal and performance management issues (e.g. Bernardin & Wiatrowski, 2013; Varma, Budhwar, & DeNisi, 2008), but as noted above, there is still a great deal we don’t understand about performance management, especially in MNEs.  More specifically, we need to better understand how to translate improvements in individual-level performance into improvements in organizational performance, and this point is emphasized by DeNisi and Murphy (2017) in their discussion of future research needs. But, in addition to the need to better understand the performance management process in general, there are also a number of specific areas where even less is understood about underlying processes.

For example, while there are scattered attempts to understand the context and the processes involved in managing and evaluating the performance of expatriates (e.g., Kang & Shen, 2016), there is then a need to develop a comprehensive model that identifies the key determinants of expatriate performance success, as well as identifies the key dimensions on which performance in an international assignment differs from one in an employee’s home country.  Similarly, while there is some attempt to understand the human resource practices and processes in emerging nations (e.g. Budhwar, Tung, Varma, & Do, 2017), there is a need to conduct performance management related empirical studies in emerging markets that can help develop indigenous theoretical models that can better serve MNEs operating in these markets.

Accordingly, the aim of this special issue is to create an opportunity to fill the gaps in the existing body of literature by assembling conceptual, theoretical and empirical developments related to the topic of managing individual (and where relevant, team) performance in organizations.  It is also the aim to begin a discussion on specific areas of research that has been largely overlooked by the research on PMS. That is, while PMS is generally acknowledged to be context-specific, there has been little attention paid to managing performance in cases such as MNEs that operate in multiple countries with different, unique, and often contradictory, cultural, social, and political contexts.  Thus, it is important that the processes and systems in organizations are clearly understood.

Themes for the Special Issue:

The following are illustrative questions/themes that are consistent with the spirit of this special issue. Authors are encouraged to contribute papers with wider perspectives, as long as the papers are in line with the broad theme of the proposed special issue. 

• What is the nature of PMSs in global corporations? How does the context of the nation(s) where the MNEs operate affect the structure, design, and implementation of PMSs?
• What theoretical frameworks can be or have been used to examine and explain the context-specific nature of PMSs in MNEs?
• How do MNEs measure the impact of individual performance on organizational performance?
• How are individual performance goals established? How much input is the individual allowed versus his/her supervisor?  Through what process are these drawn from organizational goals?
• How do supervisors in MNEs collect performance related information?  What measures do they use to ensure that the information is unbiased and truly represents the individual’s performance?
• How do MNEs define performance?  How are competency dimensions established?  What role does job analysis play in defining individual roles and performance expectations?
• How is performance measured in MNEs?  What changes and advances have been made to the instruments used to measure performance?
• How is performance evaluated in MNEs? What training do raters receive to ensure that they are familiar with performance evaluation procedures and related organizational guidelines?
• How is feedback provided to individuals?  What process is used to offer required coaching and counseling? How do organizations evaluate the success/failure of feedback mechanisms?
• How is motivation measured and what do organizations do to ensure that employees stay motivated?  What mechanisms are used to connect motivation levels to individual performance levels?
• What impact does the supervisor-subordinate relationship have on subordinate motivation and performance in MNEs?  What interventions do MNEs use to ensure that all employees are treated fairly?
• How do MNEs establish performance management and evaluation procedures for expatriates?  How are these different from, and/or adapted from, systems and processes set up for home-country employees?

Submission Deadline: 31 December 2019 [please note the submission deadline is 31 Dec 2019, not 31 Dec 2018]

Submission Process:

Authors can submit their paper starting on December 1st 2019 to HRM for review, but no later than the submission deadline of December 31st 2019. Details on the manuscript submission process will be made available nearer to the submission window. Papers should be prepared and submitted according to the journal’s guidelines: https://onlinelibrary.wiley.com/page/journal/1099050x/homepage/forauthors.html.  All papers will be subject to the same double-blind peer review process as regular issues of HRM.

If you have questions about a potential submission, please contact Prof. Arup Varma at avarma@luc.edu

References:

Bernardin, H. J., & Wiatrowski, M. (2013). Performance appraisal. Psychology and Policing, 257. 
Briscoe, D. R., & Claus, L. M. (2008). Employee performance management: policies and practices in multinational enterprises. Performance management systems: A global perspective, 15-39.

Buckingham, M., & Goodall, A. (2015). Reinventing performance management. Harvard Business Review, 93(4), 40-50.

Budhwar, P.S., Tung, R., Varma, A., & Do, H. (2017).  Developments in Human Resource Management in MNCs from BRICS Nations: A Review and Future Research Agenda.  Journal of International Management, 23, 111-123.

Cappelli, P., & Tavis, A. (2016). The performance management revolution. Harvard Business Review, October, pp. 58-67.

DeNisi, A. S. (2000). Performance appraisal and performance management. Multilevel Theory, Research, and Methods in Organizations: Foundations, Extensions and New Directions. San Francisco, CA: Jossey-Bass, 121-156.

DeNisi, A.S., & Murphy, K.R. (2017). Performance Appraisal and Performance Management: 100 Years of Progress? Journal of Applied Psychology, 102(3), 421-433.

DeNisi, A., & Smith, C. E. (2014). Performance appraisal, performance management, and firm-level performance: A review, a proposed model, and new directions for future research. Academy of Management Annals, 8(1), 127-179.

Goler, L., Gale, J., & Grant, A. (2016). Let’s not kill performance evaluations yet. Harvard Business Review, November, pp. 90-94.

Gregersen, H. B., Hite, J. M., & Black, J. S. (1996). Expatriate performance appraisal in US multinational firms. Journal of International Business Studies, 27(4), 711-738.

Harvey, M. (1997). Focusing the international personnel performance appraisal process. Human Resource Development Quarterly, 8(1), 41-62.

Kang, H., & Shen, J. (2016). International performance appraisal practices and approaches of South Korean MNEs in China. The International Journal of Human Resource Management, 27(3), 291-310.

Mellahi, K., Frynas, J. G., & Collings, D. G. (2016). Performance management practices within emerging market multinational enterprises: the case of Brazilian multinationals. The International Journal of Human Resource Management, 27(8), 876-905.

Varma, A., Budhwar, P., & DeNisi, A (Eds.), 2008, Performance Management Systems: A Global Perspective. Global HRM Series, London: Routledge