International performance appraisal: policies, practices and processes in Australian subsidiaries of healthcare MNCs

Difficulties in executing performance appraisals are widely reported. However, little is known about the conduct of performance appraisals for host country managers. These managers are usually isolated from their supervisors, and it could, therefore, be expected that they would also experience difficulties in the conduct of their performance appraisal. This paper examines the extent, nature and limitations of performance appraisals for host country managers in a sector of the healthcare industry in Australia. The study found performance appraisals are widely used, but in most cases are done poorly. In over 80 per cent of cases the appraisals were perceived as ineffective, which is higher than world wide reactions to appraisal. The performance appraisal process was found to be influenced by the emphasis given to the bottom line, the relationship with the supervisor and the effect of the multinational’s parent strategy, structure and nationality. The findings suggest that the host country manager’s experience of the appraisal often results in the manager perceiving limited opportunities for career development and advancement in the company. This may impact on the overall long term performance of the subsidiary. It is recommended that some straightforward modifications to the appraisal could make a significant contribution to both the retention and development of these managers, and, therefore, to company performance.