Issues and Problems.
Bill Lancaster, president of Black and Decker’s Eastern Hemisphere, was facing a difficult problem regarding the implementation of a new performance appraisal system. He had three choices to accept the modified ADP system developed by Anita Lim, manager of Human Resources to implement the ADP system adopted in the U.S. or to continue allowing the different sites to use variations of (MBO) Management by Objective plan.
(ADP) Appraisal Development Plan, also called the 360 degree feedback approach to performance appraisal relies on feedback from peers, subordinates and supervisors as well as a self-appraisal. Interviews with a number of Asian employees indicated that the ADP would not be accepted in the Eastern Hemisphere as it had been in the Western Hemisphere i.e.., United States. Asia’s Human Resource Manager Anita Lim, therefore, presented Bill Lancaster with a modified version which lacked the components that made it a 360 degree feedback.
Bill Lancaster needs to make a decision in the near future. His decision needs to incorporate consideration for possible cultural differences as well as consideration for what he believes will bring the changes needed to this part of the Black and Decker Company to work cohesively and have a positive outcome.
Black & Decker Corporation.
Black & Decker has been in operation for almost 90 years. It began with the famous drill with a pistol grip and trigger. Within a few years the company had expanded to Canada, England, Australia, Japan and Russia. By the 1990s, the company had offices in 109 countries and they had sales of $4.9 billion with a net income in excess of $229.6 million. The company has a number of brands that include DeWalt, Price Pfister, Kwikset, Dustbuster and other products. They manufacture small appliances, faucets, portable tools, large set industrial tools and a number of other products.
Their success is in North America and Europe. In Asia and Latin America, they are not as popular and sales are lower than expected. In an effort to attack the problem the company reorganized and split their International Group in Latin America and the Eastern Hemisphere. The Eastern Asia headquarters was opened in Singapore and covered a wide territory that includes Africa, India, Pakistan, the Middle East and all of Asia-Pacific.
The Eastern Hemisphere.
Bill Lancaster was appointed as President in October 1995. He had held a number of senior positions before this assignment. By the time Mr. Lancaster arrived, the company had made commitments to spend almost $89 million to set up the headquarters in Singapore and build factories in India, China and Singapore. The total number of employees in this area was 1,000 with plans for this number to increase significantly by 2001of which a large percentage would be new managers.
Bill Lancaster follows a participative management style and as a result, he spent a great deal of time talking with a number of employee’s at different levels in the organization. He was not pleased with the management styles he saw; some believed in empowerment, some were authoritarian and some were just terrible managers. Furthermore, he found that nearly 70 percent of all managers had been hired from the outside instead of developing employees for management positions. He believed one way to approach and correct this problem was to institute an ADP performance appraisal.
The ADP Appraisal System.
ADP had been implemented in the U.S. several years before and it was extremely successful. It had not been placed into action in Europe or in the Eastern Hemisphere. Most of these managers were still using the aged MBO process, only many were not using it as it was intended. Lancaster wanted to change this and he was very excited about ADP and believed it could turn the Eastern Hemisphere around. His enthusiasm was met with numerous negative responses.
ADP Performance Appraisal includes six steps:
1. The appraising manger requests input from three to six of the employee’s peers;
2. The manager requests input from three to six of the employee’s subordinates;
3. The employee completes a self-appraisal, which includes his background job function, his objectives and accomplishments;
4. The manager reviews all submitted forms and prepares a formal assessment of the employee, considering 14 different performance dimensions;
5. The manager and employee meet to discuss the manager’s written report and career plans;
6. A final report is compiled and written. The entire ADP process runs from November to the end of February.
The Human Resources managing Director, a national Anita Lim, believed that it would just not work in that culture. One of the major concerns was that Asians employees would not believe the reports would be confidential. They Asian employee’s believed that others would find out what they wrote and would hold it against them. Another concern was that Asians would not be open and honest in their comments and evaluations. A third concern was that bosses would hold negative comments against their subordinates. Fourth, they did not see how it could affect the amount of raise one received. This was a notable concern in Singapore where the labor market is such that talented people can get a job anywhere. Finally, there was a concern about language. Even if the ADP were translated for those who did not read English, the meaning might not come through to the respondent.
Even with all the negativity, Bill Lancaster still believes the ADP could work to change performance of employees, managers and of the company, in general.
Analysis and Recommendations.
It is accurate to state that Asia is a remarkably diverse culture than the U.S. and other parts of the western world. There are very different values and behaviors in many areas of life. One of the cultural factors in Asia and India particularly is that an employee does not evaluate a superior. The Director would lead to distrust and this is a commonly known characteristic of the Asian and Indian cultural behaviors and beliefs. It is also accurate to say that multinational corporations should try to merge together, to integrate with the traditions of the host country which they are operating businesses.
However, that is simply the fact that management is going on and that must change if the company is going to succeed in Eastern region. That means two things need to take place. Managers need to be evaluated on a different level; one that will reflect their actual management skills and training that is needed to help those who lack the skills and abilities. If performance does not change following these steps, they should be re-evaluated or released from there duties.
The recommendations then are to first, provide training seminars for mangers emphasizing participative management processes. The second is to adopt the U.S. version of the ADP performance appraisal as Bill Lancaster wants. Mr. Lancaster needs to follow his own insights on this decision. The opposition centers on issues that reflect apprehension and anxiety about change and power-mongering. The next step is to train all employees in the ADP process beginning with the Senior Staff Managers.
Confidentiality must be guaranteed with the consequence for violation being immediate termination from the company. Next, the ADP will need to be translated in each language, as needed. The translation must use phrases and words in the native language that will definitely reflect the intention of the forms. Finally, a career development training program needs to be initiated so that employees and lower level managers can gain the skills needed to move up the levels in the company.
Mr. Lancaster with no hesitation will have significant resistance but he will also have support from many. In fact, he may have more support than he presently expects. Once employees see that it works and that their comments are really held confidential, changes will occur. If there are not significant changes in the very near future, Black & Decker may have to consider closing the whole division. That is something neither the corporation nor the various nations want to occur. Change is always difficult and it is especially challenging in other nations but it must be done in order to stay a leader amongst the competition.
Morrison, Dr. Allen and Black, Dr. Steward. (1998, December). Black & Decker-Eastern Hemisphere and the ADP Initiative (A). London, Ontario, Canada: Ivey Publishing, the University of Western Ontario.