Managing performance

Haier is a good example of a company with distinctive and well-defined performance management. Building on the Haier case, we clarify what global performance management is and why it is important. We will then examine the “upstream” side of this process, which focuses on determining the strategic and operational goals that should drive business performance. We also discuss its “downstream” side from a global perspective, which includes individual and team performance appraisal, feedback, performance evaluation linked to talent management processes, and compensation and rewards. With the growing importance of virtual work, well-aligned performance management can also play a vital role in supporting global coordination and collaboration, enhancing the impact of lateral steering tools. Considering the growing variety of performance management practices among global firms, we observe that commitment to a rigorous performance management process is more important than the sophistication of the methodology. We conclude this chapter by discussing two questions critical to performance management implementation: why the “ownership” of the process execution needs to be with line management, not with the HR department; and how performance management can contribute to competitive advantage by building differentiating capabilities.