Budget Performance Evmuation Time Horizons and Inmvidualism-Collectivism
Budget performance evaluation time horizons refer to the evaluation of short-term versus long-term performance of managers as it relates to budgets. Many decisions made by managers over a period of years have an impact on the long-term growth and success of companies. Such significant contribu tions become evident only with the passage of time and it is only in the long-run that members can be adequately rewarded for their initiatives. Thus, budget evaluations done over longer periods of time (say at intervals of three years and over) will truly reflect the performance effectiveness of managers. However, the time horizon for performance evaluation--short term (annual evaluations) and long term (over a period of three years or more)-will be directly influenced by the individualism-collectivism dimen sion and not by the uncertainty avoidance dimension since one cannot predict if one is going to be a more effective performer in the short or long term.
In individualistic societies, where people tend to seek greater advancement for themselves by changing jobs, and organizational loyalty is low, members take a short-term perspective of their jobs, look for better opportunities, and are not committed to a single position. Given this, their preference can be
•expected to favor short-term evaluations and immediate rewards for per- sonal efforts and achievements on the job in the short run. This would also appeal to the calculative value of the individuals. Companies operating in such cultures would tend to evaluate their employees using a short-term time horizon-Le., current year's performance only.