Question

Explain how environmental circumstances affect the design and implementation of a firm’s performance management system.

Answer 1

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Influences in the external environment play a role in performance management. As the workforce becomes more diverse, the performance management system used within a company may need to be reevaluated in terms of both the accuracy of the performance evaluations being administered and what is being evaluated. Advances in technology affect performance management in several ways. Managers must rethink how they evaluate employees who telecommute, how employee performance data are collected, and how employees receive feedback. When designing an international performance management system, a key issue is whether individuals on an international assignment should be evaluated based on dimensions and standards used in their home country or those adjusted to reflect the host country’s culture. The performance management system a firm has in place affects the perceptions the company’s employees have about whether they are being treated ethically, whether the evaluation process is ethical, and how ethically employees act on the job