HITESH VERMA

(50614901717)
BBA(G) SEC- B
INTERNATIONAL BUSINESS MANAGEMENT

Q.1 Performance appraisal of Global HR.

Q.2 Strategies for recruitment and selection of global HRM.
ANSWERS
Ans.1 Performance appraisal is a key element of
performance management and can be defined as “the
process of identifying, observing, measuring and developing
human resources in organizations”. International
performance appraisal refers to the HRM process that
enables an MNC to evaluate and continuously improve the
performance of employees, in order to reach clearly
predefined goals that serve to improve the overall progress
of the company. Use of standardized performance appraisal
can lead to a reduction in inconsistencies in information
between the parent company and the subsidiary in the
foreign country. However, it is an extremely complex
process, as there is no written-in-stone method of assessing
the performance of employees in distant countries.
Environmental factors and differences in subsidiary
companies and their countries, such as the difference in
societal, legal, economic, or physical demands, can affect the
performance appraisal process greatly. There are many other
variables to consider when evaluating in a different country,
such as language barriers, differences in values, and
differences in cultures that make the process even more
difficult.
Hence, any person evaluating the performance of an
employee in a subsidiary company should take into account
the cross-cultural interpersonal qualities, the employee’s
sensitivity to foreign norms, laws and customs, and the
adaptability of employees to uncertain and unpredictable
conditions that may arise. International performance
appraisal is a topic that attracts the attention of practitioners
and academics; however, most research has concentrated on
expatriate performance appraisals. Standardization of
performance appraisal practices in foreign subsidiaries versus
the localization of those practices to fit the subsidiary country
is an important debate that has been discussed in the
literature. Despite the fact that MNCs strive for consistency
in their HR practices across subsidiaries, those practices are
shaped by local customs, and subsidiaries usually hire
employees from the host country’s labour market, making it
difficult for them to diverge from local norms. Moreover,
when transferring “foreign best practices” to MNC
subsidiaries, national values may present some initial
barriers. As a result, many advocates of localization consider
that locally customized activities are more effective. Many
consider that performance appraisal is the practice that is
mostly affected by culture, and it has been classified as the
most difficult to transfer across cultures. In other words, it is
identified as the most “culture-bound” HR practice. Recent
research on performance appraisals in China revealed that
western appraisals couldn’t be applied in a standardized way
and didn’t have a positive effect in the Chinese setting, due to
the inability of employees to set their own objectives and
development plans, the negative perception employees had
about the fairness of the performance appraisal system and
the inability of managers to take ownership of the
performance reviews. Other studies used Hofstede’s cultural
dimensions to explain that in high power distance countries,
performance appraisal only concerns employees but not
managers. In such countries, only managers are the source of
evaluating employees. In low power distance countries,
performance appraisal concerns employees from all ranks,
and multiple source evaluation techniques are widely used.
One example is the 360-degree system, which uses a variety
of rates. This method requires low power distance and high
levels of participation. This appraisal method is also not
appreciated in highly collectivist countries because it is
believed to harm group harmony. In individualistic cultures,
performance criteria are usually objective and quantitative,
focusing on the individual’s productivity. In collectivist
cultures, loyalty takes precedence over productivity, so poor
performers are protected if they maintain harmonious
relations with the group. Performance appraisal methods
also vary across cultures. When it comes to collectivist
cultures and high-power distance cultures, the method used
is usually informal and unsystematic and involves subjective
factors. The 360-degree performance appraisal method, for
example, cannot be applied equally in all cultures. In the
Chinese culture, it is considered inappropriate for people in
inferior positions (subordinates in the workplace) to express
opinions counter to those of people in superior positions.
Such a method is therefore more suitable for cultures with
low power distance and individualistic values rather than in
collectivist and high-power distance cultures. Moreover,
different cultures may have different understandings of
ratings. Arab culture, for example, is classified as high context
and uses implicit messages. High context cultures and firms
value flexibility, social harmony and cooperativeness.
Performance appraisals are an annual process that involves
evaluating employee’s performance and productivity against
the pre-determined set of objectives for that year. It also
helps to evaluate employee’s skills, strength and
shortcomings. The results of this performance appraisal
process determine the employees wage raise and promotion.
The objectives of performance appraisal vary from company
to company and depending on the industry/company size,
the appraisal method varies.
MODERN APPROACHES
1. Management by Objectives (MBO)
Management by objectives (MBO) is the appraisal method
where managers and employees together identify, plan,
organize, and communicate goals. After setting clear goals,
managers and subordinates periodically discuss the progress
made to control and debate on the feasibility. This process
usually lays more stress on tangible work or career-oriented
goals. So, intangible aspects like interpersonal skills, job
commitment, etc. are often brushed under the rug. This
method is slightly expensive and time-intensive.
2. 360-Degree Feedback
Once-in-a-year performance appraisals are lackadaisical and
don’t work. Workers need ongoing communication with
team leaders and managers. A continuous process, like 360-
degree feedback, can help employees stay motivated. This is
one of the most widely used appraisal methods. In 360-
degree feedback, every employee in an organization
appraises his/her managers, peers, customers, suppliers, and
also does a self-evaluation. This method ensures effective
performance analysis and Total Employee Involved (TEI). If
not handled properly, this method can also suffer from the
subjectivity of the appraiser.
3. Assessment Centre Method
The assessment centre method tests employees in a social-
related situation. This concept was introduced way back in
1930 by the German Army but it has been polished and
tailored to fit today’s environment. Employees are asked to
take part in situation exercises like in-basket exercises, work
groups, simulations, and role-playing exercises that ensure
success in a role. While it gives an insight of the employee’s
personality (ethics, tolerance, problem-solving skill,
introversion/extroversion, adaptability, etc.), it can also
breed unhealthy competition among the workers and bears
adverse effects on low performers.
4. Behaviourally Anchored Rating Scale (BARS)
Behaviourally anchored rating scales (BARS) bring out both
the qualitative and quantitative benefits in a performance
appraisal process. BARS compare employee performance
with specific behavioural examples that are anchored to
numerical ratings.
5. Psychological Appraisals
Psychological appraisals come in handy to determine the
hidden potential of employees. This method focuses on
analysing an employee’s future performance rather than
their past work. Qualified psychologists conduct a variety of
tests (in-depth interviews, psychological tests, discussions,
and more) to identify an employee’s emotional, intellectual,
and other related traits. However, it is a rather slow and
complex process and the quality of results is highly
dependent on the psychologist who administers the
procedure.
6. Human-Resource (Cost) Accounting Method
Human resource (cost) accounting method analyses an
employee’s performance through the monetary benefits
he/she yields to the company. It is obtained by comparing
the cost of retaining an employee (cost to company) and the
monetary benefits (contributions) an organization has
ascertained from that specific employee. When an
employee’s performance is evaluated based on cost
accounting methods, factors like unit-wise average service
value, quality, overhead cost, interpersonal relationships, and
more are taken into account. Its high-dependency on the cost
and benefit analysis and the memory power of the reviewer
is the drawback of human resources accounting method

Ans.2 Global human resource management, sometimes

referred to as global HRM, is an umbrella term that includes
all aspects of an organization's HR, payroll, and talent
management processes operating on a global scale.
The scarcity of qualified managers has become a major
constraint on the speed with which multinational companies
can expand their international sales. The growth of the
knowledge-based society, along with the pressures of
opening up emerging markets, has led cutting-edge global
companies to recognize now more than ever that human
resources and intellectual capital are as significant as
financial assets in building sustainable competitive
advantage. To follow their lead, chief executives in other
multinational companies will have to bridge the yawning
chasm between their companies' human resources rhetoric
and reality. H.R. must now be given a prominent seat in the
boardroom.
The solution for multinationals is to find a way to emulate
companies that have decades of experience in recruiting,
training and retaining good employees across the globe.
Many of these multinational companies are European, but
not all. Both Unilever and the International Business
Machines Corporation, for example, leverage their worldwide
H.R. function as a source of competitive advantage.
Implementing these ideas can be broken down into 10 steps.
By taking these steps, a company should be able to put into
place an effective global human resources program within
three to four years.
1.Break all the "local national" glass ceilings - The first, and
perhaps most fundamental, step toward building a global
H.R. program is to end all favouritism toward managers who
are nationals of the country in which the company is based.
Companies tend to consider nationals of their headquarters
country as potential expatriates and to regard everyone else
as "local nationals." But in today's global markets, such "us-
versus-them" distinctions can put companies at a clear
disadvantage, and there are strong reasons to discard them
2.Trace your lifeline- Based on your company's business
strategy, identify the activities that are essential to achieving
success around the world and specify the positions that hold
responsibility for performing them. These positions represent
the "lifeline" of your company. Typically, they account for
about 10 percent of management.

3. Build a global database to know who and where your

talent is - The main tool of a global H.R. policy has to be a
global database simply because multinational companies
now have many more strategic posts scattered around the
globe and must monitor the career development of many
more managers. Although some multinational companies
have been compiling worldwide H.R. databases over the past
decade, these still tend to concentrate on posts at the top of
the organization, neglecting the middle managers in the
country markets and potential stars coming through the
ranks.
4.Construct a mobility pyramid - Evaluate your managers in
terms of their willingness to move to new locations as well as
their ability and experience. Most H.R. departments look at
mobility in black-or-white terms: "movable" or "not
movable." But in today's global markets this concept should
be viewed as a graduated scale and constantly reassessed
because of changing circumstances in managers' lives and
company opportunities. This will encourage many more
managers to opt for overseas assignments and open the
thinking of line and H.R. managers to different ways to use
available in-house talent.
5.Identify your leadership capital - Build a database of your
company's mix of managerial skills by persuading people to
describe the information in their c.v.'s, their management
talents and their potential on standard personal-profile
templates. Jump-start the process by having your senior
managers and those in the lifeline posts complete the forms
first. Add others worldwide with the potential to move up.
Include functional specialists who show general management
potential.
6.Assess your bench strength and skills gap- Ask each
executive to compare his or her skills and characteristics with
the ideal requirements defined for the executive's current
post and preferred next post. Invite each to propose ways to
close any personal skills gaps -- for example, through in-
house training, mentoring, outside courses or participation in
cross-border task forces.
7.Recruit regularly- Search for new recruits in every
important local market as regularly as you do in the
headquarters country. Develop a reputation as "the company
to join" among graduates of the best universities, as Citibank
has in India, for example.
8.Advertise your posts internally - Run your own global
labour market. In a large company, it is hard to keep track of
the best candidates. For this reason, I.B.M. now advertises
many of its posts on its worldwide Intranet. Unilever usually
advertises only posts in the lower two pools, but this policy
varies by country and by business unit.
9.Institute succession planning - Every manager in a lifeline
job should be required to nominate up to three candidates
who could take over that post in the next week, in three
months or within a year, and their bosses should sign off on
the nominations. This should go a long way toward solving
succession questions, but it will not resolve them completely.
10.Challenge and retain your talent - Global networks that
transfer knowledge and good practices run on people-to-
people contact and continuity. Executive continuity also cuts
down on turnover, recruitment and opportunity costs. As
international competition for talent intensifies, therefore, it
becomes increasingly important for companies to retain their