Corporate Evolution And Subsidiary Development

Decision point adoption of a double rating system

Discuss about the Corporate Evolution and Subsidiary Development.

Globalization of business enterprise operations has called for the development of strategic management of human resources to increase organizational performance on the international market. This was the case of Telespazio, a space services company which after operating for some years in the space industry and making great achievement including collaboration with NASA to launch a modern space device (Baird et al. 2017). Due to the expansion and penetration into global markets, the company introduced a new Intl’ HRM Model or framework in the year 2010. The new model or framework was brought to reorganize the functions of the HR department to provide a new direction for the company in a bid to make the operations and activities of the company more market was driven.

However, the company has faced a paradox or some paradoxes as it was faced with a great need for a more articulated structure which would manage its global dimension and growth of the company’s activities and operations in foreign markets. The model, therefore, was designed to focus on the company business strategy of venturing into the global market. The company faced a major challenge of the dual line authority brought to the HR Management since the new system brought about a dual line authority different from the existing one which was done by an individual vested with such authority. The company also faced a major challenge in deciding on how to manage any potential conflict resulting from the model. Lastly, the company was not able to establish whether the responsibility for company employee evaluations was to be shared between two managers as the model provided or was it to be allocated to a single supervisor.

The development and adoption of the new HRM model would bring or add more value to the company in that the model would offer double reporting with a strong controlling for local, regional and global business.  The model or framework also provides a platform where company responsibilities can be allocated to different central and local businesses (Deepa et al. 2014). The model will also offer a simultaneous control of the company market and business strategies and therefore provides an opportunity for the company to take advantage of the synergies. Such features of the model, therefore, provide the company with effective organization of the human resource in a bid to improve the company performance on the global and international market due to its penetration of the foreign markets.

Challenges of transferring appraisal system to foreign subsidiaries

To for the company to decide on whether it should adopt a double rater system or should give the responsibility for performance appraisal to either the business manager or the county manager then it is important we examine the effectiveness of both options. This is because the effectiveness of performance appraisal measures is only achieved when there are reliability and validity as well as sensitivity and fairness (Dusterhoff et al. 2014). Performance appraisal is very important in any company or organization as it the company with a platform to access its employee performance by comparing their already existing or present performance with some established standards which the organization requires that should be communicated to the employees in advance. It is normally guided by the objective of providing feedback to employees to improve their performance as required by the company (Deepa et al. 2014). Performance appraisal is, therefore, a systematic and objective way of judging the relative worth of the ability of an employee performing his or her given task.

To the immense business operations resulting from globalization of the company operations and activities, the human resource management of Telespazio Space Services Company should adopt a double rating system as a measure of conducting its performance appraisal. With the growth of the business operations the human resource functions and requirements also increase calling for the need of a more reliable system of performance appraisal as these functions cannot rely on only one supervisor. However, the supervisors would also provide an important role in offering guidance to the employees as the double rating system may not meet certain criteria which come in the accessing the usefulness of the performance appraisal feedback.

The double rating system will, therefore, provide the company with information and support needed to make positive behavior by obtaining reports and comparing them (Maingin, 2017). It gives the managers an opportunity to evaluate and tap important competencies from the employees which a single supervisor due to the economies of scale of the company may not establish (Baird et al., 2017). It will be obtained from the features of the new model which offers a double reporting offer with a strong controlling model for both the local and global businesses of the company. The system also provides the company a feedback process which summarizes the inputs from the rates and therefore helps the managers in interpreting and also acting upon the feedback appropriately. It is because, under the double rating system, responsibilities are allocated differently for the local and central business. Therefore it makes it easy to measure the performance of the employees in local or central business given the rating scale and the manager’s inputs in a reliable, sensible and fair manner.

Recommendation on effective strategies

An essential aspect of performance appraisal is usually in providing or obtaining feedback from different peers, direct reports or even from the company supervisors which in most cases is very difficult and sensitive due to the lack of clarity of whom owns the feedback (Hood et al., 2016). The system, therefore, gives more clarity as the ratings are not shared only to specific individuals or channels but advocates that the results must be shared with the organization including the employees to achieve its purpose of appraisal without creating conflicts of uncertainties. However, no matter how the HRM Model may be helpful, the double rate system does not meet some standards required to make an appraisal decision based on the performance score and therefore calls for the assistance of experienced coaches or managers for the feedback from the rating system to make meaningful developments in employee performance appraisal.

The decision on the transfer of the company appraisal system to foreign subsidiaries depends on the other factors which may need to be examined before embarking on the process. Such factors may include the culture, the existing systems as well as the managerial and leadership styles employed by the foreign subsidiaries (García-Chas et al. 2014). For instance, the French subsidiaries have been characterized to have a strong national culture which may influence and affect the effectiveness of the system due to the difference n policies guiding working relations.

The existence of other well established local evaluation systems in the foreign subsidiaries may also be a big challenge to effective transfer and implementation of the new appraisal system in the subsidiaries countries. It is based on the belief of majority that it is always easier for organizations to continue using an old system as is tested compared to assimilating a new system into place which comes new requirements and costs (Kaufman, 2015). Lastly, the foreign subsidiaries may be using different managerial systems and different leadership styles which are familiar to their employees. A change in the leadership and managerial styles may drastically and negatively affect the performance of the company and create conflict between the management and the employees.

For effective implementation of a transfer plan of the company appraisal system to the foreign subsidiaries, it is important for the company to understand the culture of the foreign subsidiaries (Deepa et al. 2014). It should be done by first appreciating the cultural differences and get to understand how their subsidiaries operate and the environments with which they operate by engaging in some of the operational activities of the companies. Secondly, the company should also get to understand the already existing and established local evaluation system. It will provide them with an opportunity to understand the gaps in the systems or the weaknesses in accessing employee performance and use the strengths and benefits of the new appraisal system to show the need for a new system to the foreign subsidiaries.   

Thirdly the company also needs to understand the managerial systems as well as the leadership styles used by the subsidiaries to understand how the new appraisal system would fit into those systems and styles and how the new system may be of added value to the companies. This is because organizations or companies do not easily, or they rarely change their managerial systems or leadership styles as such from the culture of the organizations or companies. Without such measures and understanding, it would be very difficult for the company to transfer and implement the new appraisal system to the foreign subsidiaries. There is a great need therefore for the company to invest in understanding these factors as well as the operational, managerial and leadership difference existing between the company and the foreign subsidiaries.

References

Baird, J. A., Meadows, M., Leckie, G., & Caro, D. (2017). Rater accuracy and training group effects in Expert-and Supervisor-based monitoring systems. Assessment in Education: Principles, Policy & Practice, 24(1), 44-59.

Deepa, E., R. Palaniswamy, and S. Kuppusamy."Effect of performance appraisal system in organizational commitment, job satisfaction and productivity." Journal of Contemporary Management Research 8.1 (2014): 72

Dusterhoff, C., Cunningham, J. B., &MacGregor, J. N. (2014). The effects of performance rating, leader–member exchange, perceived utility, and organizational justice on performance appraisal satisfaction: Applying a moral judgment perspective. Journal of Business Ethics, 119(2), 265-273.

García-Chas, R., Neira-Fontela, E., & Castro-Casal, C. (2014). High-performance work system and intention to leave: a mediation model. The International Journal of Human Resource Management, 25(3), 367-389.

Hood, N., &Bikinshaw, J. (Eds.).(2016). Multinational corporate evolution and subsidiary development.Springer.

Kaufman, B. E. (2015). Market competition, HRM, and firm performance: The conventional paradigm critiqued and reformulated. Human Resource Management Review, 25(1), 107-125.