In view of these circumstances, professional systems for assessing performance and potential as a basis for the planning of successor and personnel development in international companies are essential. Without such an instrument, the goal of assigning managers to the right position – i.e., with the closest possible correspondence to their potential – at the right time, developing them specifically and adequately, thereby obtaining maximum benefits for the company, cannot be achieved. 

Unless cultural differences are overcome, standard processes for performance and potential review are not achievable

The overriding objective of a standard process throughout the corporation for review of performance and potential – which is explicitly not to be confused with the determination of the achievement of targets as the basis for bonus payments and salary adjustments and should, in the interest of the greatest possible objectivity, be decoupled from this aspect – is to appraise realistically the performance and potential of the employees. This lays the foundation for assessing the development prospects in the company so that the necessary development measures can be defined and structured tactical/strategic planning for external recruiting can be implemented for the purpose of closing at an early stage middle-term gaps which have been identified in the personnel. It goes without saying that the decisive factor for the successful application of this instrument in international enterprises is that processes are actually uniformly established as a living element in the culture and that the appraisal criteria are interpreted in the same way all around the globe. But even ignoring the various forms of co-determination and data protection rights that exist, international companies are usually confronted with profound cultural differences which can significantly diminish the comparability of assessments.  

A number of studies – the best-known of them is undoubtedly the so-called “IBM Study” by the Dutchman Geert Hofstede – document major cultural differences among various countries and describe the need for interpretation of international employee appraisals. Hofstede defines five dimensions (power distance, individualism vs. collectivism, masculinity vs. femininity, uncertainty avoidance, and short-term vs. long-term orientation) which he uses as indices for assessing the culture with respect to management behavior. Taking this approach, it can be determined that there are cultural differences even between neighboring countries in Europe such as Germany and the Netherlands and that they have a major impact on the cooperation in companies doing business internationally.