Performance management systems and multinational enterprises: Where we are and where we should go

Abstract In this comprehensive summary, we take a critical look at the state of performance management systems in multinational enterprises, summarizing what we have learned to this point, and speculating on where the field should go. We specifically address four challenges (i) can performance really be managed? (ii) if so, how do we go about doing this? (iii) the need to balance consistency across locations with the need to accommodate unique realities of individual locations, and (iv) addressing the different employee profiles ‐ i.e., expatriates vs. host country nationals. In terms of what we have learned to this point, we believe that global organizations need to pay more attention to (i) performance context, (ii) ratee reactions, and (iii) rater motivation, as these are integral to successful performance management. On the other hand, they might re‐consider and re‐visit the amount of time and energy spent on factors such as (i) appraisal forms and (ii) rater training, as these may not be serving any useful purpose. We next discuss the unique challenges faced by multinational enterprises, including (i) the type of strategy a corporation might employ (Bartlett & Ghoshal, 1998), (ii) the different cultures of the nations where the organization operates (Hofstede et al., 2010), and (iii) managing the performance of expatriates (Toh & DeNisi, 2007). Looking ahead, we would like to remind multinational corporations (and all other corporations) that culture and context matter, but these must be addressed in concert with the need to treat all employees fairly and consistently. We conclude by proposing several research ideas, including the need to explore the potential role of host country nationals in the performance management process for multinational enterprises.