Question

how would you design a performance appraisal system for a multinational company that has branch offices in different countries? What factors would you consider?

Answer 1

Performance appraisal plays a key role in the development of an employee in the company. It provides a way for managers and individual contributors to work together to increase employee performance through training, mentorship and collaborative goal setting.

Performance reviews introduce new challenges when rolled out in a multinational company with employees from diverse cultural backgrounds. Fairness is the key to an effective multinational performance evaluation program, but using a one-size-fits-all approach across cultures does not always result in true fairness. Setting global standards that transcend cultural nuances, utilizing local leaders to perform reviews and localizing the actual procedures of evaluations are a few tactics that can increase the fairness and effectiveness of multinational evaluation procedures.

We need to keep in mind the following factors before designing a performance appraisal system for a MNC:

• The performance metrics need to be mapped as per the local hierarchy. The Goal plan need to be made as per the hierarchy that prevails in that country’s office.
• The appraisal should also consider the currency factor. The % hike in the currency needs to be as per the currency of the local office. If the currency is strong the % hike would be less else if the currency is week the % hike should be more.
• The evaluation perimeters should be as per the common performance indicators and feedbacks.
• The rating scale also needs to be there with weightage for each factor.
• Proper mapping of personal goals vs organisational goals.