Impact of Cultural Differences in Performance Management Order Instructions: The advent of technology has increased appetite for globalization. There are increasing economic, political & social interactions between countries.
Organizations are also tapping into these opportunities by expanding their business reach and consumer base especially in developing continents such as Africa & Asia. Such organizations are referred to as multinational companies (MNCs); they are single entities with multiple nationalities (Dowling et al., 2008 cited in Armstrong, 2014).
It is imperative to manage performance both at the individual and organizational level. However, this has implication for organizations that operate across borders due to cultural and environmental differences.
The impact of cultural, political or national differences on performance management (PM)
As discussed in previous weeks, despite the benefits of implementing a PM system, it is associated with certain challenges such as line manager bias, inadequate skills (Aguinis, 2012), etc. These challenges are magnified in MNCs (Cascio, 2011) because of the complexity that cultural and environmental differences introduce to the process.
An aspect of PM that is likely to be impacted by cultural, political or national differences is Feedback. For example, the feedback norm in my country is to focus on the message being passed and not necessarily on how the individual takes it. However, from my work experience in a UK-based MNC, it is evident that the Western approach to feedback is different. There seems to be more focus on the landing of the feedback. The implication is that while an average Nigerian goes straight to the point, a Westerner is focused on soft landing. The difference in feedback approach will pose a challenge for an MNC.
Another aspect of performance that may be impacted is the management of poor performance. The labor laws in most countries in Asia & Africa are perhaps not as strict as what obtains in the West. So while a local company in some of those countries may not have a formal process for managing poor performance, companies in the West can’t afford same slack, especially where it involves termination of an employment contract. To further protect itself, an MNC will demand its subsidiaries to adopt a similar approach for managing poor performance.
Preventive measures by HR leaders
To proactively manage potential PM issues in MNCs, (Mellahi, Frynas & Collings, 2015) have identified some measures that HR leaders should put in place:
1. Encourage and facilitate periodic interactions between the parent and host companies. It may be in the form of country visits, e-conferencing, etc. It will help both parties especially the parent company appreciate the cultural realities
2. Organize common training programs such as rater training (Aguinis, 2012), etc., so that all line managers across the different business units have common knowledge, understanding, and interpretation of the global standards or process. In my organization, we usually have training sessions and access to materials developed by the team in the center.
Impact of Cultural Differences in Performance Management Conclusion
Despite cultural and environmental differences, it is imperative to adopt a suitable PM approach. My recommendation is the partial convergence (Armstrong, 2014). While standardization of process across MNCs is valid, it is also helpful to recognize local practices and customs. For instance, in the Asian example (Shen, 2005 cited in Armstrong 2014) adopting a partial convergence approach could mean that feedback is given in line with the home company system but done in groups to mirror the host country practice.
Regards,
Toyin
Impact of Cultural Differences in Performance Management References
Aguinis, H. (2012) Performance management, 3rd ed. Upper Saddle River, NJ: Pearson Prentice Hall.
Armstrong, A. (2014) Armstrong’s handbook of performance management: an evidence-based guide to delivering high performance, 5th ed. London: Kogan Page.
Cascio, W. F. (2011) ‘The puzzle of performance management in the multinational enterprise’, Industrial and Organizational Psychology, 4 (2),pp.190-193.
Mellahi, K., Frynas, J.G. & Collings, D.G. (2015) ‘Performance management practices within emerging market multinational enterprises: the case of Brazilian multinationals’ International Journal of Human Resource Management [Online] DOI: 10.1080/09585192.2015.1042900 (Accessed: 11 December 2015)
Impact of Cultural Differences in Performance Management Sample Answer
Response
As determined in this case, the inclusion of technology has increased globalization, a factor that has seen the increase in economic, political and social interactions between different nations. Additionally, it is of the essence to determine the fact that different organizations also tap into these opportunities by expanding their business scope and consumer base (Aguinis, 2012). The multinational companies, therefore, manage performance both within the individual and at the organizational level even while operating in different regions with different cultures and environmental conditions. Performance management, therefore, remains an essential element within the functions of an organization especially when this impacted by cultural, political and national differences (Armstrong, 2014). From the knowledge and experiences have acquired within different work environments, there are certain challenges that may hamper and inhibit the implementation of a performance management system that includes biases and inadequate skills among the line managers.
The poor performances of management systems are also another challenge that has been considered as detrimental in the implementation of the performance management systems. In managing these challenges, it is of an essence to determine the fact that organizing training programs for the line managers within different organizations develops and facilitates the increase in their knowledge in the manner in which these systems may be implemented (Cascio, 2011). It is also crucial to determine that the development of interactions between different organizations may also be helpful in enhancing the learning capacities of managers. In conclusion, it is essential to determine the fact that despite the environmental and cultural differences that organizations encounter, it is essential to develop and contextualize a significant performance management approach that suits the needs of an organization. It is therefore essential to standardize processes within organizations that include the identification of different elements within a region.
Impact of Cultural Differences in Performance Management References
Aguinis, H. (2012) Performance management, 3rd ed. Upper Saddle River, NJ: Pearson Prentice Hall.
Armstrong, A. (2014) Armstrong’s handbook of performance management: an evidence-based guide to delivering high performance, 5th ed. London: Kogan Page.
Cascio, W. F. (2011) ‘The puzzle of performance management in the multinational enterprise’, Industrial and Organizational Psychology, 4 (2), pp.190-193.
