Performance and reward management challenges in mne

This is 10 Assignment 1: The performance management approach has become an indispensable tool in the hands of the corporates as it ensures that the people uphold the corporate values and tread in the path of accomplishment of the ultimate corporate vision and mission. How to operate job evaluation schemes as a means of allocating and controlling gradings in a formal hierarchy and cater for the role flexibility which is increasingly required in the organization.

How to achieve internal equity and external competitiveness. How to concentrate on rewarding for output and maintain, indeed enhance quality standards. The national or country categories involved in IHRM activities 3.

How to achieve consistency in managing reward processes and provide for the flexibility needed in ever-changing circumstances. More attention given to achievement or success-oriented individual bonuses rather than payment increases in base pay. Such categories include the High Context Culture and the low context culture.

A growing linkage between pay practice and training and development initiatives through the design and implementation of skills and competency based pay processes which reward the acquisition and use of new skills and behaviors.

This constitutes the financial reward aspect of the process which incorporates processes and procedures for tracking market rates, measuring job values, designing and maintaining pay structures, paying for performance, competence and skill, and providing employee benefits. Concerned with defining business plans in advance for shaping a successful future.

If the IHRM is export-oriented, that is, global HRM decisions are mainly made in the parent company, then the local subsidiaries are responsible for the implementation process at the local level.

The major objectives of performance management are discussed below: How to concentrate on rewarding for output and maintain, indeed enhance quality standards. Most companies already have cultural hubs in place, but they go unrecognized and underutilized. HRM in an MNE femininity, individual collectivism, long-term versus short-term orientation and uncertainty avoidance.

Absence of Integration The performance management system has to be integrated with the strategic planning and human resource management systems as well as with the organizational culture, structure and all other major organizational systems and processes.

Indeed, several recent surveys of global executives have identified the ability to maintain a common corporate culture as one of their greatest challenges.

Compensation remuneration and benefits 6.

Performance Management and Reward Practices

The effect of the institutional environment on MNEs, as illustrated on figure 1. User trust is an absolute necessity for the success of the system. Promoting a two way system of communication between the supervisors and the employees for clarifying expectations about the roles and accountabilities, communicating the functional and organizational goals, providing a regular and a transparent feedback for improving employee performance and continuous coaching.


The studies attribute the highest importance to knowledge flows. According to Geert Hofstede theory, culture can be classified through different dimensions at a national level Hofstede, The host-country effect refers to the extent to which HRM practices in subsidiaries are impacted by the host-country context.

They provide significant knowledge for other units and have gained importance as MNEs move towards the transnational model.

Reward management is about the design, implementation, maintenance, communication and evolution of reward processes which help organizations to improve performance and achieve their objectives.

6 Assignment 1: HRM in an MNE The Role of the Subsidiary The subsidiary role specifies the position of a particular unit in relation to the rest of the organization and defines what is expected of it in terms of contribution to the efficiency of the whole MNE.

Performance management is a systematic process which a manager can use to get the team members to achieve the team’s objectives and targets, improve overall team effectiveness, develop performance capabilities, review and assess team and individual performance, and reward and motivate.

For Reward Management Systems, KPMG assists companies to: Evaluate the importance of each job position with clear criteria. Decide how to remunerate employees according to their performance and the relative value of their position.

Global HRM Final Exam study guide by Dom-P includes questions covering vocabulary, terms and more. A common set of principles on which the organization bases its reward system (i.e.: standardization vs. localization, lead, lag or be at the market equivalency compared with rivals in the industry) Performance Management and the MNE.

An efficient management of reward system may have a beneficial effect upon the performance in several ways - instilling a sense of ownership amongst the employees, may facilitate long term focus with continuous improvement, reduces service operating costs, promotes team work, minimizes employee dissatisfaction and enhanced .

Performance and reward management challenges in mne
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Issues and Trends in Reward Management | Human Resource Accelerator