Performance evaluations allow managers and other contributors to gauge and improve employee performance through mentorship, training, and goal-setting. According to Cappelli and Conyon (2017), performance assessments are standard practices of all organizations, even though they can be time-consuming. Purwohedi (2017) claims that performance appraisals form part of organizational culture, which means that they are part of their routines. The idea is to assess the productivity and performance of employees, identify their strengths and weaknesses, and encourage them to improve for the overall success and profitability of the companies. The routines are conducted to increase the workers’ expertise and competence in their assigned duties, which helps in career growth and development. Both domestic and multinational organizations perform performance evaluations. Yet, the structural differences of both entities mean that the performance evaluation processes vary. For example, all employees should be assessed, which means that companies should design uniform evaluation techniques to save time and ensure fairness. However, the approach does not fit all employees, and multinational structures complicate the process further as opposed to domestic ones based on cultural and legal differences. Therefore, different cultural values and legal requirements affect the performance evaluations for local and multinational companies.
Although fairness and equality is significant factor for performance evaluation techniques, domestic and multinational companies have different systems since the one-size-fits-all method rarely functions adequately. While local companies can employ a standard procedure for assessing the performance of their employees, multinational companies operate in different areas, which means that a single method would be inappropriate. For instance, in multinational firms, departments may be found in different countries and fail to align with the positions of domestic companies. The variations mean that employees may have different outputs. For instance, since Microsoft Corporation operates in different countries, it employs flexible rather than rigid performance evaluation methods since business structures differ between states, such as China and the United States. When performing evaluations, the issue can lead to confusion, unfairness, and inconsistency, which is not the same case for domestic companies that have similar departments in one locality. Therefore, single performance assessment techniques work best for local companies, while multinational ones should employ approaches that fit their jurisdictions.
Companies have different cultures, which means that adopting performance evaluation methods differs between domestic and multinational corporations. According to Martin (2014), globalization has increased cultural diversity in the workplace and allowed companies to operate worldwide. For instance, some organizations value independent performance, while others prioritize collaboration. Similarly, some firms encourage innovation, while others support adherence to status quos. These elements adversely affect the performance evaluation of multinational companies since they complicate the process and result in unfair results. However, domestic companies do not face cultural value confusion since they handle single approaches that quicken and make the assessment of workers manageable. Thus, local firms can adopt performance appraisal methods with ease. Still, the multinational organization should design flexible plans to avoid unfairness, confusion, inconsistency, and unreliable results due to the different cultural values and objectives of the companies.
References
Cappelli, P., & Conyon, M. J. (2018). What do performance appraisals do?ILR Review, 71(1), 88–116. Web.
Kengatharan, L. (2016). Capital budgeting theory and practice: A review and agenda for future research. Applied Economics and Finance, 3(2), 15-38.
Martin, G. C. (2014). The effects of cultural diversity in the workplace. Journal of Diversity Management, 9(2), 89-92.
Michelon, P. S., Lunkes, R. J., & Bornia, A. C. (2020). Capital budgeting: A systematic review of the literature. Production, 30. Web.
Murtagh, J. P. (2010). The Water’s Edge Apartments: Capital budgeting in real estate development. Journal of Business Case Studies, 6(6), 1-6.
Purwohedi, U. (2017). National and organizational culture, performance evaluation and trust: Evidence from multinational company subsidiary in Indonesia. Signifikan: Jurnal Ilmu Ekonomi, 6(2), 319-344.