Australian National University · FACULTY OF MANAGEMENT

MGMT3025 Chap.6 International Performance Management

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Chapter 6 of 11 · MGMT3025

International Performance Management

Performance management in a multinational has to be relevant to each location and still comparable across the group, and this chapter shows why that is hard. It separates performance management, the continuing process of improving individual, subsidiary and corporate results against preset goals, from appraisal of one employee, and it sets out the developmental and evaluative purposes of both.

It compares the exportative, adaptive and integrative strategies for designing a system and the four tests of an effective one. The middle section covers the six constraints on judging subsidiary performance and the five determinants of expatriate performance, with the assignment types and what should be evaluated.

The chapter closes with the appraisal process: hard, soft and contextual criteria, the choice of rater and frequency, appraising host-country staff, and the common rating errors from halo to contrast effects. The Week 6 seminar examined how a forced ranking system designed in the United States collided with European labour law and works councils, which makes the standardisation question concrete.

In this chapter

What this chapter covers

  • 01

    Performance management compared with performance appraisal

  • 02

    Developmental and evaluative purposes of global performance management

  • 03

    Exportative, adaptive and integrative system strategies

  • 04

    Six constraints on multinational performance management

  • 05

    Five determinants of expatriate performance and the assignment types

  • 06

    Hard, soft and contextual appraisal criteria

  • 07

    Rater choice, appraisal frequency and appraising host-country staff

  • 08

    Common rating errors and how to prevent them

Worked example · free

Exportative, adaptive or integrative: a performance system for an airline's cabin crew

Q [6 marks]. A Qatar-based airline employs cabin crew at bases in five countries. Head office wants ratings it can compare across bases, while base managers say one standardised form ignores how feedback is given locally. Recommend an exportative, adaptive or integrative strategy. The six marks shown are a self-marking guide for revision and are not an official University mark allocation.
Three options for an international performance systemExportative, integrative and adaptive strategies placed along an axis from standardised to localised performance management.StandardisedLocalisedExportativeHome system exportedIntegrativeLocal and global blendAdaptiveEach unit designs
The axis runs from one standardised performance system on the left to fully localised systems on the right; the exportative, integrative and adaptive options sit at its two ends and its midpoint, which is where the trade-off between comparability and local fit is decided.
  • +1Name the tension: measures must be locally relevant yet globally comparable, the core challenge of international performance management.
  • +1Exportative: one standardised form designed at head office gives comparability, but it risks low acceptance at bases where its feedback style jars.
  • +1Adaptive: localised systems at each base fit local practice, but crew ratings could no longer be compared across the group.
  • +2Integrative: keep a common core of service and safety criteria everywhere and let each base shape the remaining criteria and how feedback is delivered.
  • +1Check the design against content validity, face validity, contextual sensitivity and practicality before rolling it out.
An integrative strategy, because a shared core keeps ratings comparable across bases while local criteria and feedback styles keep the system acceptable at each one.
Sia tip — Place the firm on the standardised to localised axis first, then justify the position with the two halves of the core challenge: comparability and local relevance.
Glossary

Key terms

Performance appraisal
The evaluation of one employee's performance against expected behaviour and outcomes over a review period.
Integrative strategy
A design for performance management that blends local practices with those used in the region and across the group.
Contextual criteria
Appraisal measures that allow for the particular situation in which the work was performed.
Halo effect
A rating error in which one strong trait inflates an employee's whole appraisal.
Central tendency
A rating error of scoring everyone as average when their performance actually differs.
FAQ

International Performance Management FAQ

What is the difference between performance management and performance appraisal?

Performance management is the continuing process through which a multinational evaluates and improves results at the individual, subsidiary and corporate level against goals set in advance. Appraisal is one part of it: judging a single employee's behaviour and outcomes over a review period, then discussing them in a formal review.

What constraints make it hard to judge a subsidiary manager's performance?

The lecture names six: the whole versus the part, since group interests can override a unit's profit; non-comparable data; a volatile global environment; separation by time and distance; uneven maturity across markets; and balancing cultural against bureaucratic control. Each can make a local result look better or worse than the manager's actual contribution.

Which factors determine how well an expatriate performs?

Five determinants are listed: the compensation package, the task and role, the level of support from headquarters, the host environment, including its legal, economic and physical constraints, and the individual's cultural adjustment. The lecture notes that task variables are more under the firm's control than environmental ones, which is why role definition matters.

Why should appraisals mix hard, soft and contextual criteria?

Each type alone misleads. Hard criteria such as profit or market share are objective but miss how results were achieved, soft criteria such as leadership style are open to rater bias, and contextual criteria capture the situation the work was done in. Combining the three gives a fairer picture of an international role.

What rating errors should international appraisers watch for?

The lecture lists halo or horn effects, leniency, strictness, central tendency, primacy, recency and contrast effects. International settings add pressure: distance between rater and ratee, and cultural bias when expatriates rate local staff, are named problems in the lecture, so a second rater who sees the work closely helps.

Study strategy

Exam move

Build this chapter around two lists and one axis. Learn the six constraints and the five determinants of expatriate performance until you can write each with a one-line example you invented yourself. Draw the standardised to localised axis and place the exportative, integrative and adaptive strategies on it, adding one gain and one risk beside each.

For appraisal, make a table of the rating errors with a short description of the rater behaviour that signals each one, and practise spotting them in appraisal comments you write yourself. In case questions, the strongest answers explain why a single hard measure misjudges a subsidiary manager and then propose a mix of hard, soft and contextual criteria.

Finish by checking each proposal against the four tests of an effective system.

Working through International Performance Management in MGMT3025? Sia is AskSia’s AI Management tutor — ask any MGMT3025 International Performance Management question and get a clear, step-by-step explanation grounded in how MGMT3025 is taught and assessed. Read this chapter free, then take your hardest questions to Sia.

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