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Human Resource (HR) Practices and Cultural Dimensions
• Employee Resourcing – People planning, recruitment & selection, induction
• Employee Performance Management – Motivation, feedback, rewards, development
Performance Management System (PMS) Business Performance Measurement (BPM)
Scope of Human Resource Management
Performance Management Systems (PMS)
• Involve setting goals, measuring outcomes and providing feedback to improve performance or;
• ‘a framework in which performance by individuals can be directed, (agreed?), motivated and refined’
(Mabey and Salamon 1995)
A Performance Management Cycle (Torrington & Hall 1998)
Define the role• Job descriptions• Business Objectives
Set or agree a Personal Development Plan (PDP) supporting target achievement
Set or agree individual objectives, targets or goals
Assessment• Ongoing or annual• Link to pay
Features of a Business Performance Management System• Performance measures
– e.g. Balanced Scorecard (Kaplan & Norton)• Supporting infrastructure
– data acquisition, analysis, interpretation
Francos-Santos et al (2007)
Roles of Business Performance Management Systems
• Measure performance (monitor progress, evaluate performance)
• Strategy management (implementation, focus, alignment)
• Communication (internal/external, benchmarking, compliance)
• Influence behaviour (rewards, relationships)• Learning & improvement (feedback, double-loop
learning, performance improvement)Francos-Santos et al (2007)
• Selection & Design of Measures• Collection and manipulation of data• Information management• Performance evaluation & rewards• System review
Francos-Santos et al (2007)
Processes in Business Performance Management
Systems
Issues with Implementation• What are the intended outcomes – control,
assessment or development?• Often a strategic decision, but is it accepted
organisation wide?• Does the method of measuring performance
‘fit’ the current culture or strategy?• Is it resourced?• Does the method of rewarding performance
‘fit’ the current culture or strategy?
PMS- Issues of outcome
Outcomes-• Pay - linked to performance?• Promotion?• Development?• Additional Resourcing?• Sanctions for underperformance ?
The cultural background for performance management
• Essentially a western development, originating in the US, much of the research into use and operation conducted in a domestic context (Armstrong and Baron, 1998).
• (Pucik, 1985; Vance et al, 1992) suggest that it is the cultural differences that make it difficult to standardise aspects of performance management.
• Cultural dimensions (e.g. Hofstede, GLOBE) are often used as a common starting point.
GLOBE project (2004) – cultural dimensions
• Power Distance• Uncertainty
Avoidance• Humane Orientation• Collectivism –
Institutional• Collectivism – In
Group
• Performance Orientation
• Assertiveness• Gender
Egalitarianism• Future Orientation
Cultural Dimensions allow comparisons between cultural characteristics…..
Power Distance• authority, hierarchy, power differences, status privileges
LOW HIGH
Denmark Hungary
GLOBE – society cultural dimensions
Uncertainty Avoidance• orderliness, consistency, procedures, laws
LOW HIGH
Russia Germany
GLOBE – society cultural dimensions
Performance Orientation– Innovation, high standards, task oriented, achievements, results
LOW HIGH
Italy Singapore
GLOBE – society cultural dimensions
Future Orientation• planning, strategies, flexibility, delayed rewards
LOW HIGH
Brazil Netherlands
GLOBE – society cultural dimensions
Collectivism – In Group• family and team members’
pride, loyalty & cohesion
Collectivism – Institutional• team based rewards,
resource allocation
LOW HIGH
Sweden ChinaSwedenUSA
GLOBE – society cultural dimensions
Humane Orientation• fairness, generosity, kindness, compassion
LOW HIGH
Poland Malaysia
GLOBE – society cultural dimensions
Assertiveness• tough, dominant, aggressive, competitive
LOW HIGH
Norway USA
GLOBE – society cultural dimensions
Gender Egalitarianism• professional development, management
LOW HIGH
South Korea
Denmark
Other Cultural Dimensions• Monochronic vs Polychronic time orientation
• Low vs High Context Communicators
• 12/09/201220 •
MONO POLY
UK France
LOW HIGH
USA Italy
PMS in an International Context
Complexities occur in this environment• Comparisons of data• Giving and receiving feedback• Context• Time and Space• PMS procedures can become out of date -
even more rapidly in international settings
Weird or just different?
• http://www.ted.com/talks/derek_sivers_weird_or_just_different.html
PMS in an International Context
• Environmental factors- societal, legal, technical and physical demands and variables associated with work tasks and the personality of the individual make it difficult to isolate job related factors, set performance standards and devise procedures
• There are (i) significant differences between HQ and their Strategic Business Units (SBU) and (ii) between international managers and local employees
(Shen, J 2005)
PMS and Cultural Dimensions
Overall:• MNCs need to consider if their Performance
Management System is exportable?• Performance measurement and feedback are
viewed differently by different cultures (e.g. employee assertiveness, initiative, focus on achieving results etc.)
Some questions to consider• Is their a marked difference between the evaluation
of performance abroad from home country policy?• Is their a danger of alienating or de-motivating the
local team by imposing home rules?• Does the local operation have novel ways of
delivering or depersonalising positive/negative feedback without de-motivating?
• Who appraises the global manager?…’ out of site, out of mind…they do not understand what we encounter…’
Contextual model of expatriate performance managementDowling and Welch, 2004
Basic components of performance management
Dowling and Welch (2004)
Dowling and Welch, 2004
Variables affecting expatriate performance
“Motivation” is about what we can give to a person now so that he or she will work better in the future.
(Trompenaars, 1998)
What are PMS intended to achieve?
Maslow – hierarchy of needs:
• Physiological needs• Safety• Social• Esteem• Self-actualisation
Concepts of motivation
McClelland (managers in organisations) – basic and non-conscious needs:
• Achievement• Affiliation
• Power
Germanic Europe
Latin Europe
Latin America
Eastern Europe
Middle East
Southern Asia
Confusian Asia
Nordic Europe
Cultural Clustering by values and practices
Sub-Saharan Africa
GreeceHungaryAlbaniaSloveniaPolandRussia
GeorgiaKazakhstan
TurkeyKuwaitEgypt
MoroccoQatar
ZimbabweNamibiaZambiaNigeria
South Africa (black sample)
PhilippinesIndonesiaMalaysia
IndiaThailand
Iran
SingaporeHong Kong
TaiwanChina
South KoreaJapan
DenmarkFinlandSweden(Baltics)
AustriaNetherlandsSwitzerland
Germany
IsraelItaly
Switzerland(French speaking)
SpainPortugalFrance
EcuadorEl SalvadorColumbia
BoliviaBrazil
GuatemalaArgentinaCosta RicaVenezuela
Mexico
CanadaUSA
AustraliaIreland
UKSouth Africa
(White sample)New Zealand
Anglo
Motivation
• Self-actualisation/self-concept – one’s sense of one’s own competence, power achievement and abilities.
• Performance –oriented leaders elevate their subordinate’s self-concept by acting as role models, convincing them that the standards are very high but achievable, showing confidence in them, supporting and rewarding their accomplishments, giving them autonomy, and intellectually challenging them
(Javidan, 2004)
According to GLOBE cultures differ in their emphasis on performance
High performance orientation• Results over people• Expect demanding targets• ‘can-do’ attitude• Value what you do not who you
are• Value bonuses and rewards• Have a sense of urgency
Low performance orientation• Values societal and family friendships• High respect for quality of life• Have performance appraisal systems
that emphasise loyalty, integrity and cooperation
• Value who you are not what you do• View merit pay as potentially
destructive to harmony• Associate competition with defeat
and punishment.
Germanic Europe
Latin Europe
Latin America
Eastern Europe
Middle East
Southern Asia
Confusian Asia
Nordic Europe
Cultural Dimension – Performance Orientation
Sub-Saha-ran Africa
Anglo
High
Med
Low
Motivation• Nature of motivation varies in individualistic
and collectivist cultures• Individualist – individuals’ interests and need
for understanding goal-directed behaviour, emphasis on personal task choice and control
• Collectivist – need to fulfil duties and contribute to the group, emphasis on task chosen by in-group members
Germanic Europe
Latin Europe
Latin America
Eastern Europe
Middle East
Southern Asia
Confusian AsiaNordic
Europe
Cultural Dimension – In-group Col-lectivism
Sub-Saha-ran Africa
Anglo
High Med Low
Germanic Europe
Latin Europe
Latin America
Eastern Europe
Middle East
Southern Asia
Confusian AsiaNordic
Europe
Sub-Saha-ran
Africa
Anglo
Cultural Dimension – Institutional Collectivism
Cultural Diversity & Performance
• Managers may foster pro-diversity beliefs by communicating their belief in the value of diversity and explaining how task performance can benefit from diversity of information and perspectives.
Homan et al (2006)
Building a culture where diversity is valued
• Schein (1992) defines the culture of an organisation as shared assumptions and beliefs
• Organisational cultures reflect the societies in which they are embedded (Javidan, House & Dorfman, 2004)
• Performance management in organisations is shaped by their culture
Corporate Values and PMS
• Contemporary PMS evaluate employees’ behaviour against Corporate (or Organisational) Values
• Organisational Culture shapes Values • Organisational Culture is shaped by the
national cultural roots of the Organisation• So Corporate Values are shaped by the
national cultural roots of the Organisation
Egalitarian
People Task
Hierarchical
Fulfilment-oriented culture
Project-oriented culture
Role-oriented culture
Cultural characteristics of organisations
(Adapted from Trompenaars)
People-oriented culture
Leaders can influence organisational culture
• Attention- leaders communicate their priorities, values and concerns by their choice of things to ask about, measure, comment on, praise and criticise.
• Reactions to crises –because of the emotionality surrounding crises, a leader’s response to them sends a strong message about values and assumptions.
• Role Modelling – leaders communicate values and expectations by their own actions.
• Allocation of rewards – the criteria used as the basis for allocating rewards signal what is valued by the organisation.
• Criteria for Selection and Dismissal – choices for recruiting, selecting, promoting and dismissing people.
(Yukl, 2010)
• Western MNCs- interested in- personal ability, skill, cultural empathy, adaptability and flexibility , diplomatic skill and creativity
• Chinese MNCs- industriousness, diligence, positive attitude and compliance to company rules and policies are main concern
• (Shen, J 2005)
Cultural differences in Corporate emphasis
Local freedom to prioritise corporate values in PMS
Netherlands France Germany Britain
Reality Imagination Leadership Overview
Analysis Analysis Analysis Imagination
Overview Leadership Reality Reality
Leadership Overview Imagination Analysis
Imagination Reality Overview Leadership
Global Corporate Values:
Leadership; Reality; Analysis; Imagination; Overview
Performance criteria or goals –‘Hard’ goals: objective, quantifiable
and can be directly measured (e.g. ROCE)• Soft goals: relationship or trait-based (e.g.
adherence to Corporate Values)–Contextual goals: factors that result
from the situation in which performance occurs
Performance Criteria
• Objective, ‘hard’ measures can be affected by ‘delayed outcome’ or ‘negative correlations’
• Delayed outcome – interference from external events which distorts an employee’s influence on the goal
• Negative correlations – where success in one goal may have a negative effect on another (maybe someone else’s goal!)
Performance Criteria
• ‘Soft’ goals are measured subjectively based on perceptions
• Often difficult to justify• Often difficult to measure without direct
observation e.g. Manager in London, employee in Hong Kong
• Often measured through ‘others’ perceptions e.g. Employee’s peers
PMS and Cultural DimensionsObjective -setting
Setting objectives within time frames (Future Orientation) and operating on (spurious ?) criteria:
• Is acceptable to German organisations (accepted MBO) as it reduces uncertainty, clarifies targets roles and responsibilities
• Isn’t acceptable to French managers- mutually agreed annual objectives may not prove comfortable especially in writing! MBO not successful here as many saw it as entrapment not empowerment
(Schneider, 2003)
Germanic Europe
Latin Europe
Latin America
Eastern Europe
Middle East
Southern Asia
Confusian Asia
Nordic Europe
Cultural Dimension – Future Orientation
Sub-Saha-ran Africa
Anglo
High
Med
Low
Measuring Performance
• Formal systems – ‘Appraisal’ vs ‘Development Discussion’
• Once or twice per year • Discussion formally recorded and linked to
rewards and personal development plans
Problems with Appraisal (1)• Employee suspicion - criticism, control and use of
results• Managers unable to do the job - need for
effective training (assessment and interviewing)• Systems are bureaucratic - paperwork based,
collation of data• Any supposed outcomes not acted upon –
reduced effectiveness, loss of motivation and commitment to participation
Problems with Appraisal (2)• Accuracy of evidence and assessment• Subjectivity and fairness• Heavy reliance on managers
– Are they skilled?– Are they committed to the approach?– Are they agreed about the purpose?– Do they take the “easy approach” and follow a
“central tendency”?• Organisational interpretation of results
Appraisal systems and culture
• Individualism – favour formal appraisal systems
• Collectivist – favour informal appraisal systems• Career development, financial objectives
might be of little/no importance in cultures in which the future is viewed as unpredictable – future orientation
(Groeschl, 2003)
Feedback• Individualist cultures employ positive feedback
to motivate employees• Collectivist cultures positive feedback could
embarrass employees – criticisms and compliments are usually not conveyed openly – directed at a group rather than an individual
• Indirect feedback – written notes or asking a peer of the subordinate to deliver the feedback.
Germanic Europe
Latin Europe
Latin America
Eastern Europe
Middle East
Southern Asia
Confusian AsiaNordic
Europe
Cultural Dimension – In-group Col-lectivism
Sub-Saha-ran Africa
Anglo
High Med Low
Germanic Europe
Latin Europe
Latin America
Eastern Europe
Middle East
Southern Asia
Confusian AsiaNordic
Europe
Sub-Saha-ran
Africa
Anglo
Cultural Dimension – Institutional Collectivism
Feedback• Employees should receive continuous
feedback about their performance from their managers
• The formal appraisal system should be a formal record reflecting feedback already given
• Managers should receive feedback from their employees about their management style – low power distance
Germanic Europe
Latin Europe
Latin America
Eastern Europe
Middle East
Southern Asia
Confusian Asia
Nordic Europe
Cultural Dimension – Power Distance
Sub-Saha-ran Africa
Anglo
High
Med
Low
Feedback and Uncertainty Avoidance
‘Feedback seeking’- in order to manage uncertainty, individuals will engage in strategies for seeking feedback from a variety of sources (superiors, peers, subordinates), either through asking questions (inquiry) or observing (monitoring).
Germanic Europe
Latin Europe
Latin America
Eastern Europe
Middle East
Southern Asia
Confusian Asia
Nordic Europe
Cultural Dimension – Uncertainty Avoidance
Sub-Saha-ran Africa
Anglo
High
Med
Low
360 degree feedback process• The utility of the 360 degree process depends largely
on the cultural values held by the participants• In collective cultures critical information may cause
loss of face.• Feedback on performance assumes that one has
considerable control over one’s own behaviours or outcomes (i.e. Low power distance)
• Organisations that strongly internalise the values of low power distance and individualism could benefit greatly from applying the 360 degree process
(Shipper, Hoffman & Rotondo, 2007)
Germanic Europe
Latin Europe
Latin America
Eastern Europe
Middle East
Southern Asia
Confusian Asia
Nordic Europe
Cultural Dimension – Power Distance
Sub-Saha-ran Africa
Anglo
High
Med
Low
Germanic Europe
Latin Europe
Latin America
Eastern Europe
Middle East
Southern Asia
Confusian AsiaNordic
Europe
Cultural Dimension – In-group Col-lectivism
Sub-Saha-ran Africa
Anglo
High Med Low
Germanic Europe
Latin Europe
Latin America
Eastern Europe
Middle East
Southern Asia
Confusian AsiaNordic
Europe
Sub-Saha-ran
Africa
Anglo
Cultural Dimension – Institutional Collectivism
Feedback and Cultural Dimensions
• A 2-way conversation with the boss seemed untenable with the French (high Power Distance according to Hofstede)
• Russians also found to be uncomfortable- goal setting suffers from ‘ been there, done that’ -imbibed strongly under communism
(Schneider ‘03)
• China- .. All feedback was positive to avoid upsetting personal relationships in one Chinese-Western Joint venture
• China- misuse through cultural interpretation-One Chinese company publicly displayed
performance rankings and required poor performers to publicly confess and state how to improve
Feedback and Cultural Dimensions
• Japan- PMS often emphasise individuality- often difficult in organisations where society traditionally reflects collective responsibility
Feedback and Cultural Dimensions
The effect of individual/collectivism and power distance on the performance appraisal process.Cultural Dimensions
WHO HOW CONTENT PURPOSE
Low Power Distance
Multi-source (e.g. peer, subordinate)
Participatory two-way communication. Employee initiated. Appeals process.
Unspecified Unspecified
High Power Distance
Supervisor (someone with relatively more power)
Directive.Supervisor initiated.No appeals process
Unspecified Unspecified
Collectivist SupervisorThird Party
Subtle/indirect Group level.More positive tone.Relationship focussed. Criteria include loyalty, seniority.
DevelopmentIncrease loyalty
Individualist Unspecified Direct/open Individual level.Job focussed.
Administrative.Make personal decisions.
Feedback, Communication Competence and Performance
A study of Russian and US managers with experience of multicultural teams demonstrated that cross cultural communication competence accounts for 20% of the performance variation in multicultural teams
(Matveev & Nelson, 2004).
Cross-Cultural Communication and cultural dimensions
• Understanding attitudes to time• Language
– Dominance of a particular language – Use of jargon, idioms, humour etc.
• Media– High context communicators/low context
Attitudes to Time/1Monochronic cultures
• One thing at a time• Tight schedules• Detailed planning strictly
adhered to
• E.g. Anglo, Germanic, Nordic
Synchronic or polychronic • A number of activities run in
parallel• Relationships come before
schedules• Substance before process• e.g. Latin cultures
Attitudes to Time/2
Turn Taking in Verbal Communication
Anglo-Saxon: A __ __ __ __ __ B __ __ __ __ __
Latin: A ___ ___ ___ ___ ___ B ___ ___ ___ ___ ___
High or Low ContextLow Context Communicators
(e.g. UK)
• Focus on the content of the message; the words
• Focus on the task to be done• Are clear and direct (except UK!)• Provide only as much background
information as they need
High Context Communicators
(e.g. French, Italian)• Integrate non-verbal signals into the
message (facial expressions, gestures etc.)
• Focus on building relationships• How things are done (process) is
just as important as getting them done
• Saving face and maintaining harmony important
Pay for performance
Pay and performance may mean different things to different cultures:
• Pay – cash or other rewards (shares, holiday etc.)
• Pay – total cash or a % of base salary• Pay – individual or group?
Pay for performance
• Paying for performance over and above ‘normal’ salary may be subject to local laws
• The % payable may be restricted• The method of payment may be controlled
e.g. Payment in shares rather than cash
Bonuses
• Egalitarian cultures may focus on total reward being an equal amount per person rather than a % of salary (e.g. Denmark)
• The overall proportion of fixed vs performance –related reward my depend on the amount of perceived control over performance (power distance, performance orientation)
Germanic Europe
Latin Europe
Latin America
Eastern Europe
Middle East
Southern Asia
Confusian Asia
Nordic Europe
Cultural Dimension – Gender Egalitarianism
Sub-Saha-ran Africa
Anglo
High
Med
Low