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I. Cathay Pacific Airways
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.
II. Environmental Analysis
Internal Environment: Strategic Capabilities
1. Human Resources/ Human Capital 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.
2. Organizational Processes and Culture± Service Straight from the Heart
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.
3. Customer Retention and Loyalty
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. Key Internal Strength: Human Resources 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. assess career choices and clarify career paths and milestones to help the employees plan their advancement. Cathay Pacific needs to make its employees feel important and show concern for the personal health and welfare of the employees. reducing the costs of external recruitment and selection. 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. 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. A good ED system will generate substantial opportunity for performance improvement and serve to remedy deficient performance. Human resources as an internal resource of a firm are one of the sources of strategic capability. Employee development also has an impact on employee morale. Human resources are among the top contributors to Cathay Pacific¶s strategic capability. The employee development of Cathay Pacific helps employees to define career opportunities. .
encourage. it forms a basis for coaching and counselling. However. this process also supports wrong values around performance management. measure. 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 helps organizations link evaluations to employee development and to a merit-based compensation plan.Key Internal Weakness: Inadequate Employee Performance Management Performance management helps organizations sustain or improve performance. The employee performance management process that Cathay Pacific uses is not adequate to support the company¶s goals. A performance management system consists of the processes used to identify. promote greater consistency in performance evaluation. and provide high quality feedback. improve. permits individual input during the evaluation process. 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. The system that the company uses creates a standardized process. and allows for a blend of quantitative and qualitative evaluations. evaluate. It does not encourage the employees to take responsibility and does not help them to improve. Moreover. . and reward employee performance at work ().
For the past years Hong Kong experience economic growth as well as other Asian countries. It constantly assesses the economies of the countries where it operates as economy affects the decision-making process and buyer behaviour of the customers. Internally.External Environmental Analysis: PEST Political One of the external factors that have big effects on the operation of Cathay Pacific is government regulations and policies. The growth of other Asian economies pushed Cathay Pacific to expand its operations. Cathay Pacific was greatly affected by the Asian Economic crisis. The company makes sure that it has a very good relationship with different sector in the society. The company continuously asses the political environment and prepares itself for any possible problems and issues concerning the political sector. it is greatly affected by different regulations and policies. Economic Economic factors also affect the company. . The company does not authorize the delivery of some services that will cause outbursts or complains from different group in the society. the company is doing well. Social 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 also engages in social activities that tend to develop a better relationship between it and the clients. Because Cathay Pacific operates worldwide.
. the company has the technology capable of competing with such technologies. If other companies use new technologies to provide services.Technological The company offered new innovations in its technological aspect and introduced new concepts with regards to its industry. The company makes sure that the services they offer are updated with regards to what technology is used to tender their services. Since technology rapidly changes the company makes sure they are updated to what is happening and they can adjust to these changes.
If bus iness will continue to do well for Cathay Pacific. technological innovations and employee loyalty. Cathay Pacific will be forced to downsize in order to cut cost. Merger and acquisition strategies are important to firm growth and success in the 21st century. Cathay Pacific remains among the most profitable airlines in Asia. However. if Asia is to experience economic crisis like what happened in 1997. Because of these negative scenarios. Future Scenarios Optimistic Future Scenario for Cathay Pacific: Mergers and Acquisitions Mergers and acquisitions have become one of the most important corporate-level strategies in the new millennium.III. The threats posed by the increasing numbers of budget airlines in Asia and elsewhere will become a serious problem in the future. Moreover. Pessimistic Future Scenario for Cathay Pacific: Downsizing Downsizing caused by unstable economy and emergence and growth of budget airlines. maintained competitive advantage. further expansion through mergers and acquisition is expected. Through M&As Cathay Pacific aims to acquire excellent businesses and talented people. Expansion (Mergers and Acquisitions) caused by stable economy. Cathay Pacific strengthened its position as Hong Kong¶s top home carrier in 2006 by integrating Dragonair and enhancing its partnership with Air China. . Cathay Pacific will be severely affected. the flourishing Asian economy is expected to contribute to the growth of the company. As of the moment the company is not affected by the emergence of low-cost carriers in the Asian region.
Cathay Pacific is expected to restructure.IV. . and making their initial and future job assignments. The HRM function focuses its activities on ways to help the organization achieve corporate goals like growing operations through recruiting and hiring employees. Strategic HRM Planning Human resource management needs to be closely integrated with managerial planning and decision-making. Mergers and acquisitions are also seen as an expansion strategy. During restructuring it is important to establish HRM policies and practices that will help create and sustain a climate of trust. Mergers and acquisitions are seen as strategies that will help Cathay Pacific improve its services and acquire competitive advantage. Some of the issues that arise in mergers and acquisitions are HRM planning. Cathay Pacific is expected to continue to grow. selection. and training strategies. 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. it is the human resources that bring a sustainable competitive advantage. recruitment and selection. Strategic management of human resources includes HRM planning. Human resources or the company¶s people are one source of sustainable competitive advantage. Strategic Human Resource Management Mergers and Acquisitions In an optimistic scenario. To support growth. In a fastchanging environment where technological innovations and other strategies can be copied. orienting and training them. Such information enables the organization to plan its recruitment. 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.
It is important that Cathay Pacific hire the most qualified people. now and in the future. Selection of key talent and key employees begins with an understanding of the vision and the purpose of the organization. but it is equally important to be viewed as the employer of choice with a strong value proposition. purposeful actions. it is vital to recruit and select applicants that will fit the new organizational environment and will quickly integrate with the new organizational culture. Recruitment and selection is critical to the success of strategy implementation. This will help Cathay Pacific deal effectively to changes in the industry as well as the changes in the business environment. the next step is recruiting employees. identifies strengths and weaknesses. and points to the need to evaluate the probable impact of internal and external forces. but much more importantly. Not only is it important to find the most talented applicants. By articulating a clear common vision of why the organization exists. Recruitment and Selection Once HRM needs are determined. Strategic planning leads to informed. reveals opportunities. what the future of the organization needs to be. . The HR managers must be involved in the strategic management process.It is important that the management value human resources as a means of increasing productivity. a strategic plan provides direction and a cornerstone for making important HRM decisions. During mergers and acquisitions. Identifying the right skills necessitates knowing not just the current culture and structure of the organization. The HRM concerns must be integrated into the decision-making at the executive level. Planning HRM activities expands awareness of possibilities.
the type of work remaining to be performed. commitment. which refers to planned changes in a firm¶s organizational structure that affect its use of people. early retirements. Such restructuring often results in workforce reductions that may be accomplished through mechanisms such as attrition.Downsizing According to (2004) downsizing is commonly the result of a broader process of organizational restructuring. The criteria that the organization can use are: . Restructuring is seen by millions of employees as a breach of the µpsychological contract¶ between them and the employer ( 2004). honesty. and seniority. This breach of psychological contract leads to a rise in stress and decrease in satisfaction. Employees leaving and remaining must perceive that management was fair when determining which employees will be let go and which ones will stay. voluntary severance agreements. or layoffs. intentions to stay and perceptions of an organization¶s trustworthiness. Effects of Downsizing to Employees Downsizing and other restructuring strategies such as takeovers and mergers and acquisitions have adverse effects on employee attitudes and beliefs. the criteria used frequently are a combination of job performance evaluations. Managing Lay-Offs: Selection The management needs to determine the criteria for selecting which jobs will be eliminated. and caring about its employees. These factors need to be as objective as possible in order to protect the organization from legal and governmental challenges. Depending in part on the corporate culture.
o Job Performance ± job performance implies that the organization has fairly. they lost motivation and employee loyalty diminishes. Because employees feel betrayed. o Work Remaining to be Performed ± another selection factor is the work remaining to be performed. objectively. Employee Retention Employee retention is one of the biggest issues in downsizing. or other strategies. Typical methods for conducting these assessments include interviewing and testing techniques. Retention Tools o 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 action o Exit Interviews ± are individual discussions with departing employees so that management understands very clearly the reason for their departure . o Seniority ± aside from employees covered by union contracts where seniority is the primary determinate of layoff selection. Retaining valued employees is important. It is important to identify the most valued employees first. use of outside consultants or psychologists. and systematically evaluated the contributions of employees and selected those individuals for dismissal who are least effective. length of service often is a factor in downsizing ( 2003).
o Retention Bonuses/Contracts ± contracts and retention bonuses can be attractive to retain key employees and management level people o Rotational Assignments ± can be used to enrich an existing assignment o 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 2001) References .
job descriptions present a clear . measure. evaluate. A performance management system consists of the processes used to identify. encourage. Performance Management According to (2002). and reward employee performance at work (). Ideally. 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. Performance management is the process of identifying. so that organizational goals and objectives are more effectively achieved. evaluating and developing the work performance employees in the organization. catering for work needs and offering career guidance ( 2003). improve. receiving feedback.Performance Management I. Performance Management Process Performance Planning A job description indicates the role of an employee within the organization and what results they are expected to achieve on the job. while at the same time benefiting employees in terms of recognition.
2002). responsibilities. Appraisal occurs during time periods and in meetings that are scheduled to produce reasoned consideration of contributions. identifying and addressing problems. 1993).picture of employees¶ roles. The performance evaluation also serves a vital organizational need by . required outputs. Performance planning is the process where in goals are set. Goals should be measurable and achievable. This includes monitoring progress. and standards used to judge the quality of their performance ( and 2000). 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. and helping employees stay on their edge to maximize their growth and their performance. or when an evaluation is brought to the attention of others (. The plan should be modifiable during the execution phase to respond to changing circumstances ( 2000). Appraisals review past performance ± emphasizing positive accomplishments as well as deficiencies and drafting detailed plans for future development. but it also occurs informally as employee contributions are observed. During this process. employees are evaluated formally and informally to determine the nature of their contributions to the organization. Performance Review/Performance Appraisal Performance appraisal is the process by which an employee¶s contribution to the organization during a specific period of time is assessed (. 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). Goal-setting should be done by the manager and the employee. Performance appraisal is integral to the successful operation of most organizations. Performance appraisal is treated as an evaluation and development tool. as well as a formal legal document.
responsibilities and accountabilities are confusing not only for the employees but for the Managers as well. authorities. The employees also feel that the job descriptions set unachievable goals and exaggerated job responsibilities. The jobholders do not have any participation in the performance planning and the creation of job . The lengthy statements of duties. Inaccurate Information There are so many unimportant tasks and duties that are stated in the job description that makes it hard to understand. 2002).providing the documentation necessary for any personnel action that might be taken against an employee (. Complex and difficult to understand The job descriptions are so complex. 2002). Imposed and inflexible The job descriptions are often written and imposed on job holders from above. 2. 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 (. 3. II. Performance Management in Oman International Container Terminal Weaknesses of the Company¶s Performance Planning (Job Description) 1.
Not all the characteristics of a job are equally important and certain characteristics are more important for some jobs than for others. In simple terms. 3. Problems with Rating Scales Rating scales are among the popular performance appraisal tools. Rating scales according to (2003) are readily adaptable to suit specific jobs and organizations. Employees can be rated on virtually any trait or characteristic or dimension of performance or behavior. there are significant problems in using rating scales. Current Performance Appraisal Tool: Rating Scale The company uses a rating scale in appraising employee performance.description. not in comparison to other employees. They are easily to construct. Ratings are sometimes subjective. rating scales require the reviewer to rate the employee¶s performance in an absolute sense. The characteristics to be assessed are chosen and each step on the scale is given a brief description in terms of quantity and quality. Because the job descriptions are made at the top of the organizational hierarchy without any input from the job holders. 2. 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 method is simple and easy to use. The rating scale is among the widely used method of appraising the performance. 1. use and understand. and there are virtually no limit to the aspects of person or performance that can be rated. they are often inflexible and not up-to-date. However.
Sample Performance Appraisal Form: Rating Scale Performance Ratings 5 Points ± Consistently Exceeds Expectations Employee displays at all time.The performance appraisal tool that the organization uses is simple and easy to understand which is good because performance appraisal should be like that. Initiative and self-direction are characteristic. Work output regularly achieves desired or required outcomes or expectations. initiative and productivity. 4 Points ± Often Exceeds Expectations o Employee displays a high level of factor related skills. it also has limitations and weaknesses. and productivity. without exception. abilities. However. o o o All assignments/responsibilities are completed beyond the level of expectation. exceeding requirements in some areas. initiative. 3 Points ± Meets Expectations o Employee displays and maintains an effective and consistent level of performance of the job factor under review. but not consistently or not without exception. abilities. . a consistently high level of factor related skills.
o The employee may require constant supervision. and show an indifference to job responsibilities. with serious or potentially serious consequences. 2 Points ± Some Improvement Needed o Employee at this level displays inconsistency in the performance of the job factor under review and output frequently falls beyond acceptable levels. regularly fails to meet required outcomes. Performance Factors Rating .o Problems and errors are reported and corrected quickly. 1 Point ± Major Improvement Needed o Work output is consistently low. and error rate is high requiring repetition of duty or completion by others. o Tasks may be significantly late at times or incomplete.
and a host of other factors may . According to and (2001) an evaluator¶s personal feeling about the person being appraised can significantly affect the result of a performance appraisal. The performance review process gives more emphasis on the personality of the employee.5 Quality of Work Productivity Knowledge of the Job Adaptability Dependability Initiative and Resourcefulness Judgment and Policy Compliance Interpersonal Relations Attendance Safety and Security 4 3 2 1 Weaknesses in the Performance Review (Performance Appraisal) 1. Personal Bias Perhaps the biggest problem in performance appraisal that our organization encounters is the tendency of the manager to be bias. Appearance. I think this is due to lack of proper training on the part of the managers. hairstyles. mannerisms. mode of dress.
Insufficient Information Insufficient. 3. Also. Standards and processes in the performance appraisal are not well defined. Lack of Appraiser Training The manager is the one who appraise or review employee performance. there is little training in how to evaluate performance and conduct performance appraisal interviews. 4. The rating scale that the organization is using measures personality traits or characteristics such as attitude. . loyalty. the employees do not fully understand the purpose of the performance appraisal aside from µjudging or measuring¶ their contributions. resourcefulness and personal conduct that are not only difficult to measure. Lack of Objectivity The organization uses a rating scale in reviewing employee performance. The lack of training among appraisers has led to other difficulties and problems. but are also open to completely subjective interpretation. The organization at present do not give much attention to training the managers in performing performance appraisal. The performance appraiser (manager) fails to effectively document employee performance. Presently. inadequate and incorrect information is also a problem in the performance appraisal. appearance. The managers do not clearly communicate the importance of performance appraisal in identifying their development needs and their level of compensation and rewards. 2. The documentation is inadequate to support accurate assessment of employee accomplishments.cause an evaluator to like or dislike particular employees and produce negatively or positively skewed appraisals.
I think that in order for a performance appraisal to be effective. 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 company¶s offerings span from IT infrastructure. What sets the HP values and the HP way apart is the seriousness with which values are treated as management tool. businesses and institutions globally. Many problems arise because of the inadequate training. Performance Management in Hewlett Packard Hewlett-Packard (HP) is a technology solutions provider to consumers.I think the main problem in the performance appraisal that the company is using is the lack of appraiser training. The HP Way The HP values are the centrepiece of the Hewlett-Packard Way. It should be continuous. personal computing and access devices. The HP Way is probably . Because the appraisers are not properly trained and educated they fail to perform their responsibility effectively. The central element in all activities in Hewlett Packard is the µHP Way¶. The HP values are not uniquely different from most large companies. global services and imaging and printing for consumers. a set of beliefs. enterprises and small and medium businesses. it should happen on a daily basis. Another issue is that the performance appraisal happens only twice a year. III. and described by as the policies and actions that flow from the belief that men and women want to do a good job. objectives and guiding principles. a creative job.
and short-range objectives derived from company and group objectives. openness. autonomy. the accustomed nature of the MBO planning cycle provided ample opportunity for individual initiative and influence in setting overall objectives. Objectives were goals and provided much freedom in how the goals would be accomplished. informality. the manager and the employee periodically meet to review the employee¶s performance relative to attaining goals. The goals were made to interconnect horizontally and vertically throughout HP. At the end of the specified period. quality. trust. In an MBO system an employee meets with his or her manager. It began with the establishment of long. During the specified timeframe. and they are usually written. Employees were expected to suggest ways they could help attain the unit¶s goals in order to create individual accountability (). At each company level. a more formal meeting is scheduled in which the manager and employee assess the actual degree of goal attainment. commitment to people.best illustrated from a number of words and concepts. they are objective. These goals are usually quantifiable. responsibility ( 2001). love of the customer. The degree of goal attainment then becomes the individual¶s performance appraisal (. sharing. The entire MBO process was part of annual tactical and strategic planning that defined a job¶s objective and major responsibilities and performance measures. innovation. overall objectives were communicated and subunit objectives were negotiated. Although MBO was initiated from the top. Performance Appraisal at Hewlett Packard The activities of HP employees were guided by a comprehensive system of management by objectives (MBO). confidence. . open communication. and they collectively set goals for the employer for a coming period of time. These are love of the product. teamwork. 2002).
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.HP combined MBO with the paired-comparison approach. I can say that the HP has an effective and efficient performance management system. measures the relative performance of employees in a group. The HP way was considered an innovation not only in management but also in managing performance. which compared employees in different departments with similar responsibilities. The performance management strategy is aligned with the overall strategy of the company. Based on the information that I gathered. Performance was judged by the immediate supervisor but adjusted based on a ranking process. IV: Comparison and Recommendations Hewlett-Packard is famous because of its revolutionary management strategy. A manager lists the employees in the group and then ranks them (). according to (2002). The paired comparison approach. Goal Setting . conducted by man agers in face-to-face meetings.
Another difference is the level of employee input and influence in the performance setting. the performance appraisal tends to be formal. Performance is being discussed in formal monthly meetings and in informal settings. The discussions attempt to cover the diversity of situations the employees would face. while in OICT. The revisable nature of the performance targets. 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. It happens only twice a year.Hewlett Packard In Hewlett Packard. In OICT. What 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. In the monthly formal meetings as well as in info rmal settings. manager and employee have the opportunity to revise these targets in light of new information about the environment of client behavior. In HP the employee have more influence in the goal-setting process. These conversations are participative. The performance are not reviewed informally (during the actual execution or performance) which I think is important. means that perceptions of fairness are high in terms of the targets being realistic and achievable. Performance Evaluation . the goals tend to come form top management and then imposed on the employees. there has been a long tradition of targets being determined by both boss and employee. together with the degree of influence employees have over their goal setting.
It does not give focus on the training and development needs of the employees. This informal process helped to cement new organizational values by correcting and reinforcing behaviors and attitudes. It is more focused on identifying and rewarding top performers. Both companies experience difficulties in this area. In order to achieve a rounded picture of employee performance. the performance appraisal is used primarily as a development tool. but also to giving feedback. culminating in a full annual appraisal. Managers devote a great deal of time not only to discussing problems and identifying areas for improvement. Formal meetings between manager and employee are held every quarter.In HP. Training and Development . However. Employee voice in the evaluation was strong. the performance appraisal is primarily used to determine the strengths and weaknesses of the employees. The appraisal system aims to encourage employees to perform better by giving rewards. which is to identify and reward top performers. This occurred not only in formal meetings. In OICT. Self-assessment exercise are strongly encouraged in HP. Hewlett-Packard uses a ranking system while OICT uses rating scales. I can say that the performance appraisal system in OICT is effective in its objective. but also on an ongoing basis. 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. In order to motivate and retain employees. the company has introduced socially based measures of evaluation such as 360-degree appraisal ( 1999). I also believe that long-term benefits will be achieved if the company gives more importance to employee training and development. Rewards Perhaps management of rewards is the most problematic area of the performance management system.
based on the experience of a wide range of organizations tend to point out that effective performance management systems have the following characteristics ( 2001): o o o o The performance management system has clear aims and measurable success criteria. What works in one organization might fail in another. The company invest heavily in employee training and development. . Recommendations 1.The performance evaluation process in HP is used primarily as a means of identifying an employee¶s training and development needs. this is not the priority of the management. o The system allows employees a clear µline of sight¶ between their performance goals and those of the organization. Employees are involved in the design and implementation of the system. training and development is considered as the number one priority ( 1999). Provision of formal training programs are accorded less priority in OICT. However. o The system focuses on role clarity and performance improvement. the HR department tries to give training and development opportunities for those employees who perform less adequately. as I said earlier. In OICT. Align the Performance Management System with the Organizational Goals There is no single best way of designing and implementing performance management systems. Effective use of the performance management system is at the core of manager¶s performance goals. In Hewlett-Packard. The system is simple to understand and operate. However.
However. tool and strategy has its own strengths and weaknesses. The performance management must be strategically aligned with the objectives and goals of the company. employee behavior and attitude that the company promotes. Most of all it should be fair. o The purpose of any direct link between the performance management system and employee rewards is made crystal clear. An effective performance management system according to (2002) will be: o o o o o o Consistent with strategic mission of the organization Beneficial as a development tool Useful as an administrative tool Legal and job-related Viewed as generally fair by employees Useful in documenting employee performance I believe that there is no perfect performance management system. I believe that I strategic performance management system can be useful for the organization. . It should focus on performance not on the performer. It should support the culture. 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. Every performance management system. o The performance management system is regularly and openly reviewed against its one success criteria. and proper equity and transparency safeguards are built in.o The focus on performance improvement is closely linked to an adequately resourced training and development infrastructure.
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. 3. managers should ensure that th e person responsible for achieving a particular objective understands and accepts it. job design and job description. 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. and have an opportunity to contribute to planning the objectives of the work group. At the very least. Employees should participate fully in the setting of objectives for their own jobs. Getting employees¶ commitment is a key to setting effective goals. Rate Training and Employee Education 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. clear and easy to understand job descriptions. and motivated employees. Employees will not feel committed to targets that are just handed down to them by management ( 2003). Job 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 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. The contents of the job description should be agreed by both the job holder and the manager. Flexible Job Descriptions/ Employee Influence in the Process The manager and the employee should be the ones responsible for job analysis. 2.credible and reliable. the department and the organization as a whole.
Everyone in the organization needs to understand why appraisals are being conducted and how the system operates. It recognizes that employees perform better when they have targets. It is also important to make employees understand the appraisal system. The goal should be that everyone knows why you are conducting appraisals ( and 1992). The more clearly stated the organization's purpose for appraisals. Appraisals without training is a sure route to ineffectiveness. and in some form. communicating performance standards. In this way. the traditional lists of tasks and duties. MBO is a target-setting or results-oriented approach to performance management. the less confusion and ambiguity surrounding the process. training must focus on helping managers develop specific skills and confidence in their ability to effectively evaluate others. frustration and dissatisfaction. observing subordinate performance. 4. In simple terms. probably the most frequent used approach to performance planning and review. give way to brief statements of . and even better when they have participated in setting those targets. giving feedback. the desired outcomes.Appraisal methods that have clear performance dimensions are likely to reduce rating errors ( 1997). Rating Scales and Management by Objectives I think the performance appraisal of the organization will be more effective if management by objectives. completing the rating form. Management by objectives is the best known of the results-oriented methods of performance planning and review. Job analysis is used to produce a job description that sets out the principal accountabilities or key results areas of the job: in other words. or inputs. and conducting appraisal review. 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. These skills should include goal setting. coaching. For any appraisal system to be effective.
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).
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