Performance Management Policies in Multinational Companies. An International Comparison

Performance incentives in multinational companies can be a conflict issue. Employees and management can have different views of fair and just pay and rewards on performance. Furthermore there are cultural influences on the employees’ and the management’s understanding of good performance. These cultural influences can differ from country to country and complicate the standardization of performance management policies in multinational companies. Right here, the WZB-research project comes in. Based on case studies of multinational companies, the project explores cultural understandings of performance and their relationship with performance management policies.

The project deals with two main questions. First, it analyses how cultural factors influence the understanding of good performance and of fair rewards for performance. Cultural factors refer among others also to traditions of industrial relations and to trade unions’ views on performance and incentives. Second, the project examines the fit between the employees’ understanding of performance and fair rewards and the actual performance management policies in multinational companies. The main interest lies on affinities between cultures and the usage of individual, team based, monetary or career based incentives. The study includes in addition factors which can influence the acceptance of performance management policies such as the inclusion of employee representatives in the design of performance management policies.