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 Cathay Pacific Airways is a Hong-Kong based airline that has a comprehensive

network of flights to over 90 destinations around the world. It is considered as one of Asia¶s

biggest and most regarded airlines. The company was founded in 1946 in Hong Kong. The

company since then has continued to develop Hong Kong¶s airline industry and supported

Hong Kong¶s position as a major transportation centre in the region. The airline company

was founded by (American) and (Australian). Cathay Pacific was founded in Hong Kong on

the 24th of September, 1946.

Cathay pacific is one of the most well known airline company in the world. It

competes with different airline companies for prestige and notoriety in the airline industry.

Recently the company underwent a change in image and strategies to counter the problems its

industry has. It shifted the focus of its strategy into making sure that there will be an increase

of clients who demanded their services, it also made sure that the services and technologies

they use can be competitive to other airlines company. In 2006 the company was acquired

by Dragon air but it still continues to operate in its own brand. This does not hamper it from

continuously trying to provide the best service to its clients. This shows that with proper

strategies used, a company can stay in the industry for a longer period of time.



Human resources or human capital is the intangible resources of abilities, effort, and

time that workers bring to invest in their work (1999). The people at Cathay Pacific are the

major contributors of strategic capability to the company. One of the advantages of Cathay

Pacific over its competitors is the quality of service that the staffs provide to its customers.

Service has a big impact on the customers¶ perceptions about the company¶s product.

Because of the importance of its people, Cathay pacific formulated an employee development

strategy through proper and effective training. This strategy is expected to strengthen Cathay

Pacific¶s position in the marketplace. Employee development can be an essential ingredient

of an organization¶s competitive advantage. Employee development includes all of the

education and training that organizations might invest in their employees such as training

employees to perform effectively in their current jobs, orienting employees to the workplace,

developing them for advanced positions or programs, and building organizational capability

for future success. Cathay Pacific promotes a working environment wherein the employees

are free to act in both the company¶s and passengers¶ best interests.

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Cathay Pacific believes that its business is selling experience to the passengers.The

emotional bonding with the passengers is the key to building loyalty and one of the major

factors that encourage the customers to repurchase the airline products. The biggest

difference of Cathay Pacific to its competitors is its people. The employees at Cathay Pacific
are the ones who bridge the gap between product development and customer expectation. The

passengers in Cathay Pacific always feel welcomed, appreciated and reassured. Passengers

that travel with Cathay Pacific know that they are in good hands. Service Straight from the

Heart is a programme that aims to develop cultural change within the airline focused on

improving customer service. Service is the principal means of differentiating between airlines

and is highly influential in customer choice. Cathay Pacific has expressed within its

programme its understanding of the importance of the people within the organization and its

recognition of the contribution of those people to its success.


Customer retention and loyalty are among the primary causes of Cathay Pacific¶s

success. Customer service is a very vital aspect of the company. Cathay Pacific maintains its

leader¶s status in the airline industry through its constant improvement in service. The

company continuously makes effort to develop its self-help strategy in order to encourage

growth among its employees. Self-help benefits are seen to make career management, career

planning including blended learning opportunities possible within the company. The

development program aims to equip the employees with the necessary knowledge and skills

to fulfil their current positions as well as prepare them for future career advancements. One of

the most significant improvements that Cathay Pacific employs is incorporating human touch

in its high quality, reliable, and predictable service. The company wants to achieve growth

through sustained, profitable growth. The company is committed to employee development

and continues to enhance service and equip the employees with the ability to control the

means of increasing the company¶s productivity, reduce costs and ensure customer loyalty by

focusing on the areas that matter most to the customers. Emerging business needs and

organizational challenges inevitably require improved performance from employees.

Providing learning and development that are focused on critical performance improvement

needs is one of the methods by which managers continuously improve organizational

effectiveness. A good ED system will generate substantial opportunity for performance

improvement and serve to remedy deficient performance. Employee development also has an

impact on employee morale. Cathay Pacific needs to make its employees feel important and

show concern for the personal health and welfare of the employees. The employee

development of Cathay Pacific helps employees to define career opportunities, assess career

choices and clarify career paths and milestones to help the employees plan their

advancement. The employee development of Cathay Pacific provides learning linked to

career growth that will increase the likelihood that employees will remain satisfied and that

competent people will be available to fill new openings, reducing the costs of external

recruitment and selection.

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One of the keys to successful competition in the global market is the effective

deployment of human resources to achieve strategic capability and competitive advantage.

Human resources as an internal resource of a firm are one of the sources of strategic

capability. Human resources are among the top contributors to Cathay Pacific¶s strategic

capability. Effective management of an organization¶s human resources according to (2002)

is a major source of competitive advantage and may even be the single most important

determinant of an organization¶s performance over the long term.

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Performance management helps organizations sustain or improve performance,

promote greater consistency in performance evaluation, and provide high quality feedback.

Performance management helps organizations link evaluations to employee development and

to a merit-based compensation plan. Moreover, it forms a basis for coaching and counselling,

permits individual input during the evaluation process, and allows for a blend of quantitative

and qualitative evaluations. Performance management provides a process that helps manage

employee expectations of job demands and factors that reveal how well the job is done (1991

cited in and 2000). Performance management is the integration of performance appraisal

systems with broader HRM systems as a means of aligning employees¶ work behaviours with

the organization¶s goals. A performance management system consists of the processes used

to identify, encourage, measure, evaluate, improve, and reward employee performance at

work ().

The employee performance management process that Cathay Pacific uses is not

adequate to support the company¶s goals. It does not encourage the employees to take

responsibility and does not help them to improve. The system that the company uses creates a

standardized process. However, this process also supports wrong values around performance




One of the external factors that have big effects on the operation of Cathay Pacific is

government regulations and policies. Because Cathay Pacific operates worldwide, it is greatly

affected by different regulations and policies. The company continuously asses the political

environment and prepares itself for any possible problems and issues concerning the political



Economic factors also affect the company. Cathay Pacific was greatly affected by the

Asian Economic crisis. For the past years Hong Kong experience economic growth as well as

other Asian countries. The growth of other Asian economies pushed Cathay Pacific to expand

its operations. Internally, the company is doing well. It constantly assesses the economies of

the countries where it operates as economy affects the decision-making process and buyer

behaviour of the customers.


The company makes sure that the services it offers and the technology it uses to

tender its services will be accepted by the public. The company does not authorize the

delivery of some services that will cause outbursts or complains from different group in the

society. The company makes sure that it has a very good relationship with different sector in

the society. The company also engages in social activities that tend to develop a better

relationship between it and the clients.


The company offered new innovations in its technological aspect and introduced new

concepts with regards to its industry. Since technology rapidly changes the company makes

sure they are updated to what is happening and they can adjust to these changes. The

company makes sure that the services they offer are updated with regards to what technology

is used to tender their services. If other companies use new technologies to provide services,

the company has the technology capable of competing with such technologies.

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Mergers and acquisitions have become one of the most important corporate-level

strategies in the new millennium. Merger and acquisition strategies are important to firm

growth and success in the 21st century. Cathay Pacific strengthened its position as Hong

Kong¶s top home carrier in 2006 by integrating Dragonair and enhancing its partnership with

Air China. Expansion (Mergers and Acquisitions) caused by stable economy, maintained

competitive advantage, technological innovations and employee loyalty. If bus iness will

continue to do well for Cathay Pacific, further expansion through mergers and acquisition is

expected. Moreover, the flourishing Asian economy is expected to contribute to the growth of

the company. Through M&As Cathay Pacific aims to acquire excellent businesses and

talented people.

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Downsizing caused by unstable economy and emergence and growth of budget

airlines. Cathay Pacific remains among the most profitable airlines in Asia. As of the moment

the company is not affected by the emergence of low-cost carriers in the Asian region.

However, if Asia is to experience economic crisis like what happened in 1997, Cathay Pacific

will be severely affected. The threats posed by the increasing numbers of budget airlines in

Asia and elsewhere will become a serious problem in the future. Because of these negative

scenarios, Cathay Pacific will be forced to downsize in order to cut cost.



In an optimistic scenario, Cathay Pacific is expected to continue to grow. To support

growth, Cathay Pacific is expected to restructure. Mergers and acquisitions are seen as

strategies that will help Cathay Pacific improve its services and acquire competitive

advantage. Mergers and acquisitions are also seen as an expansion strategy. Human resources

or the company¶s people are one source of sustainable competitive advantage. In a fast-

changing environment where technological innovations and other strategies can be copied, it

is the human resources that bring a sustainable competitive advantage. During restructuring it

is important to establish HRM policies and practices that will help create and sustain a

climate of trust. Some of the issues that arise in mergers and acquisitions are HRM planning,

recruitment and selection. The HRM function focuses its activities on ways to help the

organization achieve corporate goals like growing operations through recruiting and hiring

employees, orienting and training them, and making their initial and future job assignments.


Human resource management needs to be closely integrated with managerial planning

and decision-making. A closer integration between top management¶s goals and HRM

practices helps to elicit and reward types of behaviour necessary for achieving an

organization¶s strategy. Strategic management of human resources includes HRM planning.

The planning process involves forecasting HRM needs and developing programs to ensure

that the right numbers and types of individuals are available at the right time and place. Such

information enables the organization to plan its recruitment, selection, and training strategies.
It is important that the management value human resources as a means of increasing

productivity. The HR managers must be involved in the strategic management process. The

HRM concerns must be integrated into the decision-making at the executive level. This will

help Cathay Pacific deal effectively to changes in the industry as well as the changes in the

business environment. Strategic planning leads to informed, purposeful actions. By

articulating a clear common vision of why the organization exists, now and in the future, a

strategic plan provides direction and a cornerstone for making important HRM decisions.

Planning HRM activities expands awareness of possibilities, identifies strengths and

weaknesses, reveals opportunities, and points to the need to evaluate the probable impact of

internal and external forces.


Once HRM needs are determined, the next step is recruiting employees. It is

important that Cathay Pacific hire the most qualified people. Not only is it important to find

the most talented applicants, but it is equally important to be viewed as the employer of

choice with a strong value proposition. Identifying the right skills necessitates knowing not

just the current culture and structure of the organization, but much more importantly, what

the future of the organization needs to be. Selection of key talent and key employees begins

with an understanding of the vision and the purpose of the organization. Recruitment and

selection is critical to the success of strategy implementation. During mergers and

acquisitions, it is vital to recruit and select applicants that will fit the new organizational

environment and will quickly integrate with the new organizational culture.
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According to (2004) downsizing is commonly the result of a broader process of

organizational restructuring, which refers to planned changes in a firm¶s organizational

structure that affect its use of people. Such restructuring often results in workforce reductions

that may be accomplished through mechanisms such as attrition, early retirements, voluntary

severance agreements, or layoffs.

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Downsizing and other restructuring strategies such as takeovers and mergers and

acquisitions have adverse effects on employee attitudes and beliefs. Restructuring is seen by

millions of employees as a breach of the µpsychological contract¶ between them and the

employer ( 2004). This breach of psychological contract leads to a rise in stress and decrease

in satisfaction, commitment, intentions to stay and perceptions of an organization¶s

trustworthiness, honesty, and caring about its employees.

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The management needs to determine the criteria for selecting which jobs will be

eliminated. Depending in part on the corporate culture, the criteria used frequently are a

combination of job performance evaluations, the type of work remaining to be performed,

and seniority. These factors need to be as objective as possible in order to protect the

organization from legal and governmental challenges. Employees leaving and remaining

must perceive that management was fair when determining which employees will be let go

and which ones will stay. The criteria that the organization can use are:
a? ob Performance ± job performance implies that the organization has fairly,

objectively, and systematically evaluated the contributions of employees and selected

those individuals for dismissal who are least effective.

a? ]ork Remaining to be Performed ± another selection factor is the work remaining to

be performed.

a? Seniority ± aside from employees covered by union contracts where seniority is the

primary determinate of layoff selection, length of service often is a factor in

downsizing ( 2003).


Employee retention is one of the biggest issues in downsizing. Because employees

feel betrayed, they lost motivation and employee loyalty diminishes. It is important to

identify the most valued employees first. Typical methods for conducting these assessments

include interviewing and testing techniques, use of outside consultants or psychologists, or

other strategies. Retaining valued employees is important.


a Focus Groups ± are discussions with 8 to 10 employees with a facilitator in order to

understand employee complaints and concerns so that management can take quick


a Exit Interviews ± are individual discussions with departing employees so that

management understands very clearly the reason for their departure

a Retention Bonuses/Contracts ± contracts and retention bonuses can be attractive to

retain key employees and management level people

a Rotational Assignments ± can be used to enrich an existing assignment

a New Hire Orientation ± can be used to infuse the culture of the new organization by

communicating the core values through a common orientation program in which

various executives are invited to speak to groups of new hires on a regular basis ( and





According to (2002), performance management is the integration of performance

appraisal systems with broader HRM systems as a means of aligning employees¶ work

behaviors with the organization¶s goals. A performance management system consists of the

processes used to identify, encourage, measure, evaluate, improve, and reward employee

performance at work (). Performance management is the process of identifying, evaluating

and developing the work performance employees in the organization, so that organizational

goals and objectives are more effectively achieved, while at the same time benefiting

employees in terms of recognition, receiving feedback, catering for work needs and offering

career guidance ( 2003).



A job description indicates the role of an employee within the organization and what

results they are expected to achieve on the job. Ideally, job descriptions present a clear
picture of employees¶ roles, responsibilities, required outputs, and standards used to judge the

quality of their performance ( and 2000).

Performance planning is the process where in goals are set. Goal-setting should be

done by the manager and the employee. To create a good performance plan, employees need

to know where they are now (the current state) and where they want to go (the goal state).

Goals should be measurable and achievable. The plan should include process and support

during the execution phase to help managers and employees do the things necessary to have

the plan succeed. This includes monitoring progress, identifying and addressing problems,

and helping employees stay on their edge to maximize their growth and their performance.

The plan should be modifiable during the execution phase to respond to changing

circumstances ( 2000).


Performance appraisal is the process by which an employee¶s contribution to the

organization during a specific period of time is assessed (, 2002).

Performance appraisal is integral to the successful operation of most organizations. During

this process, employees are evaluated formally and informally to determine the nature of their

contributions to the organization. Appraisal occurs during time periods and in meetings that

are scheduled to produce reasoned consideration of contributions, but it also occurs

informally as employee contributions are observed, or when an evaluation is brought to the

attention of others (, 1993). Performance appraisal is treated as an evaluation and

development tool, as well as a formal legal document. Appraisals review past performance ±

emphasizing positive accomplishments as well as deficiencies and drafting detailed plans for

future development. The performance evaluation also serves a vital organizational need by
providing the documentation necessary for any personnel action that might be taken against

an employee (, 2002). Performance management typically relies heavily upon performance

appraisals but performance management is a broader and more encompassing process and is

the ultimate goal of performance appraisal activities (, 2002).




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1. Complex and difficult to understand

The job descriptions are so complex. The lengthy statements of duties, authorities,

responsibilities and accountabilities are confusing not only for the employees but for the

Managers as well.

2. Inaccurate Information

There are so many unimportant tasks and duties that are stated in the job description that

makes it hard to understand. The employees also feel that the job descriptions set

unachievable goals and exaggerated job responsibilities.

3. Imposed and inflexible

The job descriptions are often written and imposed on job holders from above. The

jobholders do not have any participation in the performance planning and the creation of job
description. Because the job descriptions are made at the top of the organizational hierarchy

without any input from the job holders, they are often inflexible and not up-to-date.

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The company uses a rating scale in appraising employee performance. The rating

scale is among the widely used method of appraising the performance. The method is simple

and easy to use. Rating scales according to (2003) are readily adaptable to suit specific jobs

and organizations, and there are virtually no limit to the aspects of person or performance that

can be rated. In simple terms, rating scales require the reviewer to rate the employee¶s

performance in an absolute sense, not in comparison to other employees. Employees can be

rated on virtually any trait or characteristic or dimension of performance or behavior. The

characteristics to be assessed are chosen and each step on the scale is given a brief description

in terms of quantity and quality.


Rating scales are among the popular performance appraisal tools. They are easily to

construct, use and understand. However, there are significant problems in using rating scales.

1. Ratings are sometimes subjective.

2. Not all the characteristics of a job are equally important and certain characteristics are

more important for some jobs than for others.

3. Ratings can be given easily enough for individual characteristics or dimensions, but it is

more difficult to turn into a valid or useful overall assessment.

The performance appraisal tool that the organization uses is simple and easy to

understand which is good because performance appraisal should be like that. However, it also

has limitations and weaknesses.




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a? Employee displays at all time, without exception, a consistently high level of factor

related skills, abilities, initiative, and productivity.

a? All assignments/responsibilities are completed beyond the level of expectation.

a? Initiative and self-direction are characteristic.

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a? Employee displays a high level of factor related skills, abilities, initiative and

productivity, exceeding requirements in some areas, but not consistently or not

without exception.

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a? Employee displays and maintains an effective and consistent level of performance of

the job factor under review. ]ork output regularly achieves desired or required

outcomes or expectations.
a? Problems and errors are reported and corrected quickly.

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a? Employee at this level displays inconsistency in the performance of the job factor

under review and output frequently falls beyond acceptable levels.

a? Tasks may be significantly late at times or incomplete, with serious or potentially

serious consequences.



a? ]ork output is consistently low, regularly fails to meet required outcomes, and error

rate is high requiring repetition of duty or completion by others.

a? The employee may require constant supervision, and show an indifference to job


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Perhaps the biggest problem in performance appraisal that our organization

encounters is the tendency of the manager to be bias. I think this is due to lack of proper

training on the part of the managers. The performance review process gives more emphasis

on the personality of the employee. According to and (2001) an evaluator¶s personal feeling

about the person being appraised can significantly affect the result of a performance

appraisal. Appearance, mode of dress, hairstyles, mannerisms, and a host of other factors may
cause an evaluator to like or dislike particular employees and produce negatively or

positively skewed appraisals.

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 The manager is the one who appraise or review employee performance. Presently,

there is little training in how to evaluate performance and conduct performance appraisal

interviews. The lack of training among appraisers has led to other difficulties and problems.

The organization at present do not give much attention to training the managers in performing

performance appraisal.



 Insufficient, inadequate and incorrect information is also a problem in the

performance appraisal. Standards and processes in the performance appraisal are not well-

defined. Also, the employees do not fully understand the purpose of the performance

appraisal aside from µjudging or measuring¶ their contributions. The managers do not clearly

communicate the importance of performance appraisal in identifying their development needs

and their level of compensation and rewards. The performance appraiser (manager) fails to

effectively document employee performance. The documentation is inadequate to support

accurate assessment of employee accomplishments.


The organization uses a rating scale in reviewing employee performance. The rating

scale that the organization is using measures personality traits or characteristics such as

attitude, loyalty, appearance, resourcefulness and personal conduct that are not only difficult

to measure, but are also open to completely subjective interpretation.

I think the main problem in the performance appraisal that the company is using is the

lack of appraiser training. Because the appraisers are not properly trained and educated they

fail to perform their responsibility effectively. Many problems arise because of the

inadequate training. Another issue is that the performance appraisal happens only twice a

year. I think that in order for a performance appraisal to be effective, it should happen on a

daily basis. It should be continuous.


 Hewlett-Packard (HP) is a technology solutions provider to consumers, businesses

and institutions globally. The company¶s offerings span from IT infrastructure, personal

computing and access devices, global services and imaging and printing for consumers,

enterprises and small and medium businesses.


The HP values are the centrepiece of the Hewlett-Packard ]ay. The HP values are

not uniquely different from most large companies. ]hat sets the HP values and the HP way

apart is the seriousness with which values are treated as management tool. The central

element in all activities in Hewlett Packard is the µHP ]ay¶, a set of beliefs, objectives and

guiding principles, and described by as the policies and actions that flow from the belief that

men and women want to do a good job, a creative job, and that if they are provided with the

proper environment they will do so. It is the tradition of treating every individual with respect

and recognizing personal achievements ( and 1982 cited in 2001). The HP ]ay is probably
best illustrated from a number of words and concepts. These are love of the product, love of

the customer, innovation, quality, open communication, commitment to people, trust,

confidence, informality, teamwork, sharing, openness, autonomy, responsibility ( 2001).


The activities of HP employees were guided by a comprehensive system of

management by objectives (MBO). It began with the establishment of long- and short-range

objectives derived from company and group objectives. At each company level, overall

objectives were communicated and subunit objectives were negotiated. Objectives were goals

and provided much freedom in how the goals would be accomplished. The goals were made

to interconnect horizontally and vertically throughout HP. The entire MBO process was part

of annual tactical and strategic planning that defined a job¶s objective and major

responsibilities and performance measures. Although MBO was initiated from the top, the

accustomed nature of the MBO planning cycle provided ample opportunity for individual

initiative and influence in setting overall objectives. Employees were expected to suggest

ways they could help attain the unit¶s goals in order to create individual accountability ().

In an MBO system an employee meets with his or her manager, and they collectively

set goals for the employer for a coming period of time. These goals are usually quantifiable,

they are objective, and they are usually written. During the specified timeframe, the manager

and the employee periodically meet to review the employee¶s performance relative to

attaining goals. At the end of the specified period, a more formal meeting is scheduled in

which the manager and employee assess the actual degree of goal attainment. The degree of

goal attainment then becomes the individual¶s performance appraisal (, 2002).

HP combined MBO with the paired-comparison approach. The paired comparison

approach, according to (2002), measures the relative performance of employees in a group.

A manager lists the employees in the group and then ranks them (). HP managers invested

considerable time and energy ensuring that an individual¶s pay level within their salary range

reflected their performance when compared to others. Performance was judged by the

immediate supervisor but adjusted based on a ranking process, conducted by managers in

face-to-face meetings, which compared employees in different departments with similar




Hewlett-Packard is famous because of its revolutionary management strategy. The HP

way was considered an innovation not only in management but also in managing

performance. Based on the information that I gathered, I can say that the HP has an effective

and efficient performance management system. The performance management strategy is

aligned with the overall strategy of the company.


In Hewlett Packard, there has been a long tradition of targets being determined by

both boss and employee. This reflects not only the longstanding policy of decentralization

within the organization but also the difficulty of imposing performance targets on employees

who are facing changing demands and working in fast-changing markets. These

conversations are participative. The discussions attempt to cover the diversity of situations

the employees would face. In the monthly formal meetings as well as in informal settings,

manager and employee have the opportunity to revise these targets in light of new

information about the environment of client behavior. The revisable nature of the

performance targets, together with the degree of influence employees have over their goal

setting, means that perceptions of fairness are high in terms of the targets being realistic and


]hat I noticed as the main difference between the performance management systems

of HP and our company is that in HP the performance setting and appraisal happens

continuously. Performance is being discussed in formal monthly meetings and in informal

settings. In OICT, the performance appraisal tends to be formal. It happens only twice a year.

The performance are not reviewed informally (during the actual execution or performance)

which I think is important. Another difference is the level of employee input and influence in

the performance setting. In HP the employee have more influence in the goal-setting process,

while in OICT, the goals tend to come form top management and then imposed on the


In HP, the performance appraisal is used primarily as a development tool. Formal

meetings between manager and employee are held every quarter, culminating in a full annual

appraisal. Employee voice in the evaluation was strong. Self-assessment exercise are strongly

encouraged in HP. Managers devote a great deal of time not only to discussing problems and

identifying areas for improvement, but also to giving feedback. This occurred not only in

formal meetings, but also on an ongoing basis. This informal process helped to cement new

organizational values by correcting and reinforcing behaviors and attitudes. In order to

achieve a rounded picture of employee performance, the company has introduced socially

based measures of evaluation such as 360-degree appraisal ( 1999).

In OICT, the performance appraisal is primarily used to determine the strengths and

weaknesses of the employees. It does not give focus on the training and development needs

of the employees. It is more focused on identifying and rewarding top performers. I can say

that the performance appraisal system in OICT is effective in its objective, which is to

identify and reward top performers. The appraisal system aims to encourage employees to

perform better by giving rewards. However, I also believe that long-term benefits will be

achieved if the company gives more importance to employee training and development.


Perhaps management of rewards is the most problematic area of the performance

management system. Both companies experience difficulties in this area. In order to motivate

and retain employees, the reward systems of both HP and OICT have been structured to

ensure that the distinctions between excellent and average performance are recognize and

compensated. Hewlett-Packard uses a ranking system while OICT uses rating scales.

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The performance evaluation process in HP is used primarily as a means of identifying

an employee¶s training and development needs. The company invest heavily in employee

training and development. In Hewlett-Packard, training and development is considered as the

number one priority ( 1999). In OICT, the HR department tries to give training and

development opportunities for those employees who perform less adequately. However, as I

said earlier, this is not the priority of the management. Provision of formal training programs

are accorded less priority in OICT.


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There is no single best way of designing and implementing performance management

systems. ]hat works in one organization might fail in another. However, based on the

experience of a wide range of organizations tend to point out that effective performance

management systems have the following characteristics ( 2001):

a? The performance management system has clear aims and measurable success criteria.

a? Employees are involved in the design and implementation of the system.

a? The system is simple to understand and operate.

a? Effective use of the performance management system is at the core of manager¶s

performance goals.

a? The system allows employees a clear µline of sight¶ between their performance goals

and those of the organization.

a? The system focuses on role clarity and performance improvement.

a? The focus on performance improvement is closely linked to an adequately resourced

training and development infrastructure.

a? The purpose of any direct link between the performance management system and

employee rewards is made crystal clear, and proper equity and transparency

safeguards are built in.

a? The performance management system is regularly and openly reviewed against its one

success criteria.

Performance appraisal must be free from bias and discrimination. The key is not which form

or which method is used but whether managers and employees understand its purpose. An

effective performance management system according to (2002) will be:

a? Consistent with strategic mission of the organization

a? Beneficial as a development tool

a? †seful as an administrative tool

a? Öegal and job-related

a? Ëiewed as generally fair by employees

a? †seful in documenting employee performance

I believe that there is no perfect performance management system. Every performance

management system, tool and strategy has its own strengths and weaknesses. However, I

believe that I strategic performance management system can be useful for the organization.

The performance management must be strategically aligned with the objectives and goals of

the company. It should support the culture, employee behavior and attitude that the company

promotes. It should focus on performance not on the performer. Most of all it should be fair,
credible and reliable. The objective setting or the performance planning process must align

performance with business goals. I believe that a strategic performance management system

will result in achievable and realistic performance goals, clear and easy to understand job

descriptions, and motivated employees.


The manager and the employee should be the ones responsible for job analysis, job

design and job description. The organization¶s generic or model job descriptions should be

used by managers and employees only as a basis for developing and agreeing their own

description of the job the employee really does. ob descriptions should not be written and

imposed on job holders from above. The responsibility of designing the job description

should remain with the manager and the job holders. The contents of the job description

should be agreed by both the job holder and the manager. Getting employees¶ commitment is

a key to setting effective goals. Employees should participate fully in the setting of objectives

for their own jobs, and have an opportunity to contribute to planning the objectives of the

work group, the department and the organization as a whole. Each individual¶s goals must fit

in with those of the wider work group or workplace. How much you involve employees in

setting their targets will depend on the organisation's approach to performance management

and on its style and culture generally. At the very least, managers should ensure that the

person responsible for achieving a particular objective understands and accepts it. Employees

will not feel committed to targets that are just handed down to them by management ( 2003).

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One approach to performance appraisal training is to alert managers to common errors

of judgment so they can spot them in how they evaluate others and guard against them.
Appraisal methods that have clear performance dimensions are likely to reduce rating errors (

1997). For any appraisal system to be effective, training must focus on helping managers

develop specific skills and confidence in their ability to effectively evaluate others. These

skills should include goal setting, communicating performance standards, observing

subordinate performance, coaching, giving feedback, completing the rating form, and

conducting appraisal review. Appraisals without training is a sure route to ineffectiveness,

frustration and dissatisfaction. It is also important to make employees understand the

appraisal system. Everyone in the organization needs to understand why appraisals are being

conducted and how the system operates. The more clearly stated the organization's purpose

for appraisals, the less confusion and ambiguity surrounding the process. The goal should be

that everyone knows why you are conducting appraisals ( and 1992).

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I think the performance appraisal of the organization will be more effective if

management by objectives, which is a way to determine what an employee is expected to do

with behavioural rating scales concerned with how employees carries out job requirements or

behaves on the job.

Management by objectives is the best known of the results-oriented methods of

performance planning and review, and in some form, probably the most frequent used

approach to performance planning and review. In simple terms, MBO is a target-setting or

results-oriented approach to performance management. It recognizes that employees perform

better when they have targets, and even better when they have participated in setting those

targets. ob analysis is used to produce a job description that sets out the principal

accountabilities or key results areas of the job: in other words, the desired outcomes. In this

way, the traditional lists of tasks and duties, or inputs, give way to brief statements of
expected results in each area of a job. In turn, these are translated into specific targets to be

achieved over a particular time period ( 2003).