Globalization National Systems And Multinational Companies – Cross-Cultural Performance Management

Cross-cultural performance management

Discuss about the Globalization National Systems and Multinational Companies.

Culture refers to norms, knowledge, beliefs morals customs and habits acquired by individual members of society. Cross-culture, on the other hand, is a phenomenon that arises due to market globalization, (Tung, 2008). International businesses operate in a vast range of countries possessing variable cultures. This creates a cross culture environment, making it necessary to devise more appropriate ways of executing performance management, (Harzing & Pinnington, 2010). Cross-cultural management occurs in a cross-cultural environment whereby the employees arise from different and unique backgrounds and cultures.

As explained by Deresky (2014), performance management is the whole process of developing a shared understanding of what the entity needs to accomplish and how it would achieve it. It involves efficiently managing employees, through constant evaluation and appraisal with the aim of increasing the probability of success of the business. Global companies operate between different cultures. The human resource managers of these enterprises should, therefore, be well versed with this type of performance management to function appropriately.

The cultural framework brought out by Hofstede has been broadly accepted as a unit for measuring the variations between nations. It has grouped the cultural dimensions into two categories including motivational orientations and relations between people, (Taras, Kirkman & Steel, 2010). Some of the aspects of this framework include uncertainty avoidance, Collectivism, and individualism, power distance, masculinity, and feminine.

Individualism mainly refers to the tendency by which individuals take care of themselves or tend to maintain some groups within their families. This aspect is measured using the individualism index, (Minkov & Hofstede, 2011). Everyone has a tendency to take care of themselves and their adjacent families. Masculinity comes into consideration due to differences in emotions between genders. Uncertainty avoidance explains why individuals remain comfortable or uncomfortable in unstructured conditions. The human resource managers must evaluate the risk avoidance indexes between cultures to come up with a clear performance management strategy.

The members of the company working in different locations expect that power should be distributed equally. This concept is viewed using power distance, (Taras, Kirkman & Steel, 2010). Managers must evaluate the power distance between employees in different ranks when conducting performance management.

According to Tung (2008), human resource managers may find it difficult to manage employees in situations where there is high uncertainty avoidance. This is because employees with this type of culture will be unable to exploit their full performance due to their tendency to avoid risk.

Geert Hofstede’s views of organizational culture

The meaning of return varies between different cultures. The human resource managers may, therefore, use wrong or irrelevant performance indicators in their evaluation, (Bratton & Gold, 2008)). Some cultures tie performance to profits while others tie performance to customer satisfaction. The managers should, therefore, come up with a clear guideline for measuring performance and make this known to the employees.

Rewarding employees in cross-cultural businesses is not easy. This is caused by different working cultures experienced by employees working in various locations, (Boxall, 2011). The managers may, therefore, be unable to formulate a standard method of rewarding employees as a way of boosting performance.

There may be difficulties in distinguishing cultural norms from the business arrangements. This may make managers mistake individual values to the methods of the company, (Deresky, 2014). The managers should always be aware of the cultural values and beliefs and separate them from the values of the organization.

Various models can be used to explain employee performance. These arguments are based on the assumptions that employee performance is influenced by several factors. In case of personnel management, some of the principles that can be used to evaluate employee performance are as follows.

This argument was brought forward by Edwin Locke in 1968. It suggests that the personal goals set by the workers in a firm play a major duty in motivating the employees to achieve superior performance, (Drowling, Festing & Allen, 2013). This is mainly because the employees set their individual goals and keep following them. Whenever the goals are not attained, they would either revise them or totally come up with new goals. The employees are also able to adjust these targets to suit their capabilities.

Multinational companies have a range of employees in their branches or subsidiaries in different countries. These employees have different abilities, influenced by their culture and norms, (Shen, Chanda, D’netto & Monga, 2009). The human resource managers should, therefore, consider the cultural differences and capabilities of individual employees in executing performance management. They should also take into account the individual goals set by these employees as these targets act as vital motivating factors to the employees.

This theory was postulated by Victor Vroom in 1964. It is enshrined on the assumption that the workers modify their behavior in the firm by the expected goals they set. The workers always adjust their actions in a way that would most likely enable them to accomplish the set goals, (Guest, 2011). This theory is an appropriate measurement of performance management as it gives clear guidelines to improved performance based on the expectations of individuals.

Challenges faced in cross-cultural performance management process

The human resource managers of multinational companies should always bear in mind; the expectations brought forward by the employees when executing performance managed. They should view this as the primary determinant of the success of the company, (Deresky, 2014). Since the company holds branches in different global locations, the managers should consider the variations in culture and norms of work that may affect the employees, making them unable to adequately satisfy their expected achievements, (Guest, 2011). Employees from different locations should be treated differently to determine their potentials and overall performance.

International human resource managers may apply either soft or hard model in managing employees, and general performance of employees in a business. The hard model is based on setting stringent rules and goals to be met by the employee (Kopelman, Prottas & Falk, 2010). It builds on theory X. on the other hand, the flexible model adopts communication and individual motivation of the employees to improve performance. It is based on theory Y, and views employees as self-motivated and ready to work to achieve the organization goals, (Pant & Baroudi, 2008). The theory X views employees as lazy and unable to meet the required level of performance unless stringent rules and policies are put in place, (Kopelman, Prottas & Falk, 2010). It advocates for setting of goals to be achieved by the employees.

Firms do not specialize on one theory when determining employee performance. They employ a combination of these approaches so as to evaluate the workers properly.

According to Signh, Arunachalam & Rajagopal, (2011) this is an American Multinational corporation that deals in Beverages and non-alcoholic drinks. Its headquarters is in Atlanta, Georgia, with more than 129200 associates worldwide, and therefore considered a mega-provider of multicultural business opportunities. Some of the subsidiaries of this company include; Energy Brands, Coca-Cola Enterprises and Minute Maid, (Singh, Arunachalam, & Rajagopal, 2011). This company conducts its business globally, distributing soft drinks, syrups, and concentrates. It, therefore, holds an international human resource management system that performs, recruitments and training, the motivation of employees and performance management and appraisal, making it the best example for use in this essay.

According to Singh, Arunachalam, & Rajagopal (2011), this company uses personal goal setting to align their reward systems and practices with performance in the market. It has an objective to make its employees feel motivated, comfortable and satisfied to perform towards fulfilling the objects of the company. This strategy enables employees to work towards attaining these aims. This ensures that they become more competent to perform the tasks laid in the organization to satisfy the vision and mission of the entity and compete effectively with other companies.

Theories of performance management

The company uses different rewarding systems to compensate its employees, ranging from a commission, monthly wages, and salaries. This makes the workers more dedicated to work and beat the competitors, (Singh, Arunachalam, & Rajagopal, 2011). It has systems like grade jump, which enables it to rank its employees effectively, annual incentive plan used for business performance; personal progress report used to outline the progress of employees, monthly turn hall for recording extraordinary performance and change designation systems.

The company follows the GROW and WHALE DONE approach to measuring the performance of the employees. The GROW method enables the workers to know the level they want to be at, and which actions to undertake to reach such levels, (Singh, Arunachalam, & Rajagopal, 2011). The performance management is a continuous system since it is done yearly or quarterly. There are also daily, and monthly reviews carried out by the managers to ensure they keep track of the performance of the enterprise.

Conclusion

In conclusion, proper performance management in the cross-cultural business environment is the key to success of global companies. The study of global human resource administration provides students essential skills and knowledge managing international businesses. Students who accomplish this course can, therefore, become better personnel managers of multinational companies like Coca-Cola.

References

Boxall, P., & Purcell, J. (2011). Strategy and Human Resource Management. Palgrave Macmillan.

Bratton, J., & Gold, J. (2012). Human Resource Management: Theory and Practice. Palgrave

Brewster, C., Wood, G., & Brookes, M. (2008). Similarity, Isomorphism or Duality? Recent Survey British Journal of Management, 19(4), 320-342.

Deresky, H. (2014) International Management: Managing Across Borders & Cultures, Text andCases, 8th Edition. Pearson Education Australia. ISBN: 978-0-273-78705-1.

Dowling, P.J., Festing, M. & Allen, D.E. (2013). International Human Resource Management. 6^th Edition. Melbourne: Cengage Learning.

Edwards, T., Rees, C. (2011). International Human Resource Management: Globalization National Systems and Multinational Companies, 2nd Edition, Pearson

Guest, D. E. (2011). Human Resource Management and Performance: Still searching for some. Human Resource Management Journal, 21(1), 3-13.

Harzing, A., & Pinnington, A. (2010). International Human Resource Management, 3rd Edition, SAGE Publications Ltd. ISBN: 9781847872937

Kopelman, R. E., Prottas, D. J., & Falk, D. W. (2010). Construct Validation of a Theory X/Y Behavior Scale. Leadership & Organization Development Journal, 31(2), 120-135.

Minkov, M., & Hofstede, G. (2011). The evolution of Hofstede’s Doctrine. Cross-Cultural Management: An International Journal, 18(1), 10-20.

Pant, I., & Baroudi, B. (2008). Project Management Education: The Human Skills Imperative. International Journal of Project Management, 26(2), 124-128.

Shen, J., Chanda, A., D’netto, B., & Monga, M. (2009). Managing Diversity through Human Resource Management: An International Perspective and Conceptual Framework. The International Journal of Human Resource Management, 20(2), 235-251.

Taras, V., Kirkman, B. L., & Steel, P. (2010). Examining the Impact of Culture’s Consequences: A Three-decade, Multilevel, Meta-analytic Review of Hofstede’s Cultural Value Dimensions.Journal of Applied Psychology, 95(3), 405.

Singh, K. P., Arunachalam, H., & Rajagopal, S. (2011, January 4). PerformanceManagement at Coca-Cola. Retrieved January 6, 2017, from Scribd.com Website: https://www.scribd.com/doc/32509104/Performance-Management-at-Coca-Cola

Tung, R. L. (2008). The Cross-cultural Research Imperative: The Need to Balance Cross-national And Intra-national Diversity. Journal of International Business Studies, 39(1), 41-46.