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PM is the HRM sub-system that links corporate goals with rewards, improvement of
performance and employee development and, is therefore,
one of the key areas of HRM policy and practice necessary to implement successful global
HRM (Brewster et al., 2011, p. 187 citing Sparrow and Hiltrop, in 1994).
Although often conceptually confused and often used interchangeably with Performance
appraisal (PA), PM refers a broader and more strategic concept of which PA is just one
aspect (Brewster et al. 2011; Bach, 2005; Redman, 2009)
However, PM represents a development on the much more historical practice of PA, which
has its origins in the monitoring systems developed by Taylor and, to a lesser extent, Robert
Owens Silent monitors.
The various HRM activities that organisations use to identify and develop
their aggregate competence, improve overall organisational performance and
determine rewards
So, it may be about senior management concerns, but it is much more that
the formal, periodic (yearly, quarterly, half-annual) conversations between
line manager and employee about priorities and their achievement (PA)
Sources: Brewster et al., 2011; also: Armstrong and Baron, 2004; Budhwar and
DeNessi, 2008; DeNessi, 2000; Fletcher, 2001)
So, according Armstrong and Barron, PM is:
Reviewing - most performance management still rely on a rating, but not all,
some use forced distribution. Ratings typically a scale e.g:
exceeds expectations
meets expectations
Example of Competency feedback for current job band S2ii (Brewster et al., 2011
Comparative use PA for Manual and clerical workers
in selected countries
Denmark 42 41 39 23 56 48 47 32
France 85 77 61 53 86 84 5 67
Japan - - - - 83 82 79 77
Spain 63 77 64 56 59 66 46 40
Sweden 87 83 83 63 89 84 95 80
Switzerland 89 94 89 87 93 95 92 91
Netherlands 79 82 79 78 84 82 82 82
UK 90 87 76 51 92 90 85 68
training promotion career Pay training promotion career Pay training promotion career Pay
Denmark 41 25 25 16 82 49 52 36 87 - 71 66
France 74 54 59 53 95 74 74 61 - - - -
Japan - - - - 29 85 37 91 - - - -
Spain 63 55 41 52 77 63 50 63 - - - -
Sweden 93 49 52 35 98 48 54 41 79 - 66 86
Switzerland 91 70 59 53 98 74 55 60 96 - 91 76
Netherlands 71 59 66 52 83 69 80 63 88 - 92 75
UK 89 61 72 40 98 62 77 34 98 - 87 54
Sparrow, Schuler & Jackson, (1994) IJHRM, vol. 5(2): pp. 267-299)
Challenges for PM in international context
Level of achievement:
Collectivism: individuals role in the group and group harmony and relationship.
Individualist: direct feedback to improve individual performance and self identity
Feedback approach:
Horizontal view provide opportunity for individuals to participate
Vertical focus mainly on top-down communication and control and avoid
perceptions of managerial weakness by encouraging significant levels of
participation
Communication style:
High culture context: consider the surrounding context of the feedback, Pay close
attention to the body language of the individual and be indirect in conveying
feedback (read between the lines)
Low culture context: direct and explicit communication and follow up verbal
feedback with written summary
Comparative Crosscountry PM characteristics
Factor UK USA India China
Macro strategy Increasingly seen as component of Seeks strategic alignment in pursuit Not really, because HR systems Majority of organisations do not
strategic HRM of business objectives, history of tens to focus more on maintenance have strategic goals or a cascade
MBO approaches than performance
Development, culture change Meet legal requirements and as Decision making around Decision making, narrow focus
Purpose of pm
programmes as well as PRP admin process for decision making promotions around reward
reward and promotion
Accepted, but largely ill-regarded Accepted as necessary evil Low level of acceptance seen as Low level of acceptance, not taken
Acceptance of approach
time wasting seriously
In context of increased Manager as judge predominantly. Subjectivity of managers in rating, Highly subjective manager
Manager/appraisee
devolvement of HR to line. Line Both sides report dissatisfaction particularly inflation of ratings for evaluations. Saving face and thus
relationships managers as judge and/or coach with processes those they care about tolerance of poor performance
PM process and Use of competencies, 360, links Multi-source feedback, Some team-based appraisal and Effort more important than
to reward and high talent calibration of ratings, results
practices focused on a combination of use of 360 feedback. Paternalistic outcomes Self and
what and how top-down approach & systems peer/subordinate evaluations used
Outcomes Reward and corrective Justification of rewards Promotion and pay, but less Reward
mechanism clarity in link between these and
performance improvements
Some claim the emergence of best practice has emerged around the typical
process, which includes planning, managing and reviewing (Brewster, 1995)
.
However, PM has Western (US) origins and there are challenges to the
implementation of the typical process in non-Western contexts.