In order to understand performance management systems (PMS) in the unique context of Asia, this chapter describes how performance management operates in a global context. It discusses the reasons why multinational organizations need to tailor performance management practices to each country and its cultural context, rather than simply adopt global “best practices”. In the broadest perspective, performance management involves: assigning work; setting individual goals; monitoring outputs; providing feedback, as necessary; and evaluating individual performance. A number of reasons exist to explain why creating a culture of goal setting, performance monitoring, and feedback is easier said than done. In this connection, Murphy and DeNisi developed a comprehensive model that identified the following categories of factors as key components of performance management systems: distal factors; proximal factors; judgment factors; intervening factors; and distortion factors. The chapter describes three aspects of institutional variation: the political economy, the legal environment, and the industrial organization.
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