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The Characteristics of Performance Management System Within the context

of Air Traffic Management System

Conference Paper · May 2015

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 The Characteristics of Performance Management System
Within the context of Air Traffic Management System

Âta GHALEM (1); Chafik OKAR (2), Razane CHROQUI (2), SEMMA EL ALAMI (3) …

(1) Faculty of Sciences and Techniques, University Hassan 1er, Settat.

(2) School of Technology, University Hassan 1er, Berrechid.
(3) Faculty of Sciences and Techniques, University Hassan 1er, Settat.

Résumé:
Ce document définit, à travers la revue de littérature, la nature et les caractéristiques du
Système de Gestion de la Performance selon le cadre proposé par Otley (1999) et Ferreira et
Otley (2005, 2009), et examine la notion de la performance dans le cadre du système de
gestion de trafic aérien. Et dernièrement on présente une comparaison initiale entre le cadre de
Ferreira et Otley (2009) et les méthodes de gestion la performance dans le système ATM, qui
a résulté en une conclusion que le système de gestion de la performance n’a pas encore atteint
sa maturité.

Mots clés: Performance, Gestion de la performance, Système de gestion de la performance,

Cadre, Maturité.

Abstract:

This paper defines the nature and characteristics of the Performance Management System
building on the work of Otley (1999) Ferreira and Otley (2005, 2009), through the literature
review, explores the notion of performance within the Air Traffic Management system. And
at last this document proposes a primary comparison between the PMS framework of Ferreira
and Otley (2009), and the latest approaches of Performance used in the ATM system on the
International (ICAO), European (Eurocontrol), and National (ONDA) scale. This comparison
led us to extract how the PMS is not a mature system yet in ATM system, however it’s an
operational concept how has proved his existence.

Key words: Performance, Performance management, Performance Management System,

framework, ATM system, maturity.
I. Introduction:

At this early stage of the study, and before defining the contextual factors of the Performance
Management System (PMS), we will have to, explore the characteristics and the nature of the
PMS on the one hand, according to Ferreira and Otley’s PMS framework. On the other hand
the characteristics will be discussed within the context of Air Traffic Management System
considering the two big entities of the ATM world; Eurocontrol (the European Organisation
for the Safety of Air Navigation) and ICAO (International Civil Aviation Organization).

II. Definition of the Performance Management System:

To explore the characteristics of the Performance management system, it is relevant to define

what performance is. Surprisingly no standardized definition exist, however scholars tried and
proposed many definitions, as shown in Tatjana Samsonowa’s book - Industrial Research
Performance Management Key Performance Indicators in the ICT Industry, 2012- who
through research found in the performance measurement literature, that different fields use
different definitions in different contexts, yet they all have one common characteristic; they
all are related to two terms: effectiveness and efficiency.
Here are some of the definitions mentioned by Samsonowa:

- ‘Performance is a complex interrelationship between seven performance criteria:

effectiveness, efficiency, quality, productivity, quality of work life, innovation, and
profitability/budget-ability’ Rolstadas (1998).

- ‘Performance is understood as the ability of a company to achieve goals, i.e. meet

expectations, and is therefore influenced by results in a wider sense, but also by the
corresponding goal setting’ Grüning (2002).

- ‘Performance refers to the degree of the achievement of objectives or the potentially

possible accomplishment regarding the important characteristics of an organization for
the relevant stakeholders. Performance is therefore principally specified through a
multidimensional set of criteria. The source of the performance is the actions of
players in the business processes’ Krause (2005).

As to us no matter how many definitions of performance there might be, there is one thing
that we are certain about; performance isn’t just about achieving goals, but it is the answer to
three questions asked after achieving the objectives set at the beginning:
Q1: How did we achieve these objectives?
 Q2: When did we achieve them?
Q3: With how many resources?

III. PMS Literature review:

At 1999 Otley proposed a framework for studying the operations of MCSs, and completing
the traditional framework suggested by Anthony at 1965 who distinguished three categories
of control systems: planning strategies, management control, and operational control. Otley’s
framework focused on the management of organizational performance, and was structured
around 5 issues _that he believed will help developing a coherent structure for PMS_ and
were represented as a set of questions:

1. Objectives: What are the key objectives that are central to the organization’s overall future
success, and how does it go about evaluating its achievement for each of these objectives?

2. Strategies and plans: What strategies and plans has the organization adopted and what are
the processes and activities that it has decided will be required for it to successfully
implement these? How does it assess and measure the performance of these activities?

3. Targets settings: What level of performance does the organization need to achieve in each
of the areas defined in the above two questions) and how does it go about setting
appropriate performance targets for them?

4. Incentive rewards: What rewards will managers (and other employees) gain by achieving
these performance targets (or, conversely, what penalties will they suffer by failing to
achieve them)?

5. Information feedback loops: What are the information flows (feedback and feed-forward
loops) that are necessary to enable the organization to learn from its experience) and to
adapt its current behaviour in the light of that experience?

But at 2009 Ferreira and Otley proposed an extension of the 5 questions as an extended
framework named performance management systems framework, and they specified that ‘The
naming of the framework as ‘performance management systems’ aims to reflect a shift from
the traditional compartmentalized approaches to control in organizations—such as Anthony’s
(1965)—to a broader perspective of the role of control in the managing organizational
performance’.

The extended framework of the 12 questions is represented as followed:

1. Vision and Mission: What is the vision and mission of the organization and how is this
brought to the attention of managers and employees? What mechanisms, processes, and
networks are used to convey the organization’s overarching purposes and objectives to its
members?
2. Key Success Factors: What are the key factors that are believed to be central to the
organization’s overall future success and how are they brought to the attention of
managers and employees?
3. Organizational Structure: What is the organization structure and what impact does it have
on the design and use of performance management systems (PMSs)? How does it
influence and how is it influenced by the strategic management process?
4. Strategies and Plans: What strategies and plans has the organization adopted and what are
the processes and activities that it has decided will be required for it to ensure its success?
How are strategies and plans adapted, generated and communicated to managers and
employees?
5. Key Performance Measures: What are the organization’s key performance measures
deriving from its objectives, key success factors, and strategies and plans? How these are
specified and communicated and what role do they play in performance evaluation? Are
there significant omissions?
6. Targets Setting: What level of performance does the organization need to achieve for each
of its key performance measures (identified in the above question), how does it go about
setting appropriate performance targets for them, and how challenging are those
performance targets?
7. Performance Evaluation: What processes, if any, does the organization follow for
evaluating individual, group, and organizational performance? Are performance
evaluations primarily objective, subjective or mixed and how important are formal and
informal information and controls in these processes?
8. Reward System: What rewards (financial and/or non-financial) will managers and other
employees gain by achieving performance targets or other assessed aspects of
performance (or, conversely, what penalties will they suffer by failing to achieve them)?
9. Information Flows, Systems and Networks: What specific information flows (feedback
and feed-forward), systems and networks has the organization in place to support the
operation of its PMSs?
10. PMSs Use: What type of use is made of information and of the various control
mechanisms in place? Can these uses be characterized in terms of various typologies in
the literature? How do controls and their uses differ at different hierarchical levels?
11. PMSs Change: How have the PMSs altered in the light of the change dynamics of the
organization and its environment? Have the changes in PMSs design or use been made in
a proactive or reactive manner?
12. Strength and Coherence: How strong and coherent are the links between the components
of PMSs and the ways in which they are used (as denoted by the above 11 questions)?

Figure 1: PMS framework of Ferreira and Otley (extracted from Ferreira and Otley 2009)
This framework was discussed in the study of Jane Broadbenta and Richard Laughlinb
(2009), who developed a conceptual model of Performance Management Systems
(Alternative models of rationality) building on the work and insights of primarily Otley
(1999) and Ferreira and Otley (2005, 2009), to give a ‘middle range’ theoretical framework
that can provide a language for analyzing any PMS. And considered that the first eight
questions, related to the PMS design, will provide a conceptual nature of any PMS. Yet the
remaining four questions, related to culture and context, will capture a more underlying
factors influencing the nature of the PMS. This create a disagreement with Ferreira and
Otley’s (2009) point of view, since they don’t consider anymore these four questions as
outlining cultural and contextual factors, as they initially did in 2005.

Here is a figure extracted from Broadbenta and Laughlinb (2009), and illustrating the design
of the framework as suggested by Ferreira and Otley (2005), starting with the system at the
center, then the eight question defining its nature, and at last the contextual factors influencing
it.

(*)Figure 1: Ferreira and Otley’s Performance Management Framework (Adapted by

Broadbenta and Laughlinb from Figure 2 from Ferreira and Otley (2005)).

Furthermore Broadbenta and Laughlinb add that only two questions relate specifically to the
underlying nature of the PMS, which are Q9: the PMS’s information flows, Systems and
Networks, and Q10: the PMS’s use. We can see clearly that even in their discussion they can’t
separate the nature of the PMS from the factors influencing the PMS, bringing the focus on
the nature of PMs to the only eight questions, while it is also included in the four last ones.
This leads us to conclude that the framework set by Ferreira and Otley (2009) encompass all
aspects that can define the nature of the PMS, so it is only by answering to all twelve
questions that we can define the nature and characteristics of the Performance Management
System. Actually, Many other researches were built on Ferreira and Otley’s (2005, 2009)
work, and this proves that the framework has given a basic, practical and global
conceptualization of the nature of the PMS.

In fact, according to Ferreira and Otley (2009), the PMS is the wider context of MCS, as it is
used to capture a holistic approach to the management and control of organizational
performance. Thus they defined the PMS as the evolving formal and informal mechanisms,
processes, systems, and networks used by organizations for conveying the key objectives and
goals elicited by management, for assisting the strategic process and ongoing management
through analysis, planning, measurement, control, rewarding, and broadly managing
performance, and for supporting and facilitating organizational learning and change. From
Demartini’s point of view this definition refers to the three essential elements:

1. Different types of mechanisms (both formal and informal);

2. The effectiveness in strategy accomplishment;
3. The PMS’ purpose, i.e. enabling the organization to achieve its goals, through
learning and change.
 Mechanisms:
Formal
&
Informal

PMS
Definition

Effectivness PMS
in strategy purpose
accomplishement

Figure 2: the PMS definition according to Demartini (2014).

IV. PMS within the ATM system:

An obvious question is to be asked on how the Air traffic Management system approaches the
PMS. In fact the ATM world depends on two big entities ICAO and Eurocontrol in
developing the performance of the Air Navigation Services. And therefore the framework set
by these organizations will serve as a reference for us to explore the PMS in the ATM system
of Morocco.

1. International scale (ICAO):

On the international scale, the ICAO considers the performance orientation as a key tenet of
the Operational concept. As stated by the Doc 9854: Global Air Traffic Management
Operational Concept; the operational concept is defined as: ‘….a description of the
anticipated level of performance required from, and the interaction between, the ATM
services, as well as the objects they affect’. In the appendix F (of the same document): ATM
System Performance, the ICAO is trying to link the performance of the seven components
(which are: Airspace organization and management, Aerodrome operations, Demand and
capacity balancing, Traffic synchronization, Airspace user operations, Conflict management,
ATM service delivery management) to the eleven expectations of the users of ATM services
(which are: Access and equity, Capacity, Cost-effectiveness, Efficiency, Environment,
Flexibility, Global interoperability, Participation by the ATM community, Predictability,
Safety, Security).
Clearly, ICAO does have a performance driven approach within its Global ATM operational
concept, yet we don’t see a system, of its own, defined as the Performance Management
System. It surely has a performance oriented vision, but still not explicit as the Security
Management System (SMS) for example, knowing that the 19th annexe of SMS has been
lately added to the other 18 Annexes setting the Standards and Recommended Practices for
each area of ICAO responsibility. We deduce that the PMS is a functioning concept with its
own objectives and measurable indicators…etc. and positive results all deriving from the need
of assuring a high level of safety of ATM, yet it is not mature enough.

2. European scale (EUROCONTROL):

while in Europe Eurocontrol (the European Organisation for the Safety of Air Navigation),
who’s main purpose is to build a Single European Sky that will deliver the air traffic
management performance required for the twenty-first century and beyond, has its own
viewpoint about the SES (Single European Sky) strategic performance objectives, which are
in line with the SES high-level political goals, in terms of measurable Key Performance
Indicators (KPIs), as stated in the European ATM Master Plan (2nd edition, October 2012),
which is the agreed roadmap driving the modernisation of the Air Traffic Management system
and connecting SESAR (Single European Sky ATM Research) research and development
with deployment.
In effect, Eurocontrol has developed a performance scheme (Regulation N°390) to contribute
to sustainable development of the air transport system by improving the overall efficiency of
air navigation services across the key performance areas (KPA) of safety, environment,
capacity and cost-efficiency, which actually are part of the wider set of the 11 ICAO KPAs.
According to the ATM Master Plan (2012), the high-level political goals of the SES provide a
political vision of the performance driven approach. And they should be complemented by
more specific and measurable Key Performance Indicators (KPIs) to capture network
performance trends and define success criteria. This need is met by the strategic performance
objectives.
The Performance scheme is destined to draw a framework for improving the overall
performance of the Air Navigation Services, this framework is mainly constituted of:
- Performance objectives.
- Performance indicators, and Key Performance Indicators (KPI).
- Performance targets.
- Performance plans.
- Incentives.
- Data collection and dissemination of information.
- Performance evaluation

3. National scale (MOROCCO):

As for the Moroccan ATM system performance, the PMS is not a mature system yet, however
the Air Navigation Service Provider (ANSP) hopes to strengthen its position and the
performance of the organisation through the shift to a performance oriented approach, as
shown in the Strategic Plan (2011-2016), axe 2: Performance in all levels. Though it is only
focusing on three aspects: setting the performance objectives, determining the actions to be
undertaken, and defining the performance indicators.
This new orientation by the Moroccan ANSP towards performance, promises a fertile ground
to build a Performance Management System within the framework of Ferreira and Otley
(2009), and inspired by the previous efforts of the ICAO and Eurocontrol, since Morocco is
already an ICAO contracting state, and has signed the Euro-Mediterranean agreement on
aviation services in 2006 with the European Union to converge towards the European ATM
system.
V. Conclusion:

At a first sight, we can see that whether it is ICAO or it is Eurocontrol, the ATM system
performance-driven approach is slightly different one from another with Ferreira and Otley’s
framework (2009), however it is implicitly coherent with the framework proposed by Otley in
1999, as they both answer to the 5 famous issues: Objectives, Strategies and Plans, Target
settings, incentive rewards, and information feedback. Yet the extended framework is still a
bit larger, especially with the last three questions; the PMS use, the PMS change, and the
strength and coherence, and not to forget the two factors that are implicitly considered in this
framework which are the strategy of the organization and the organizational structure.
Certainly all approaches have a vision and a mission to accomplish which are considered in
the ATM system as the expectations; of the SES ATM Master Plan, or of the ICAO Global
Air Traffic Management Operational Concept, they all set objectives, targets, key
performance indicators, and necessarily performance measures.
We can finally conclude from our observation that the difference between the ATM system
approaches and the extended framework is that; the PMS in the ATM system is still in his
early steps to maturity, since all the twelve issues aren’t specified as in the framework of
Ferreira and Otley (2009).

References:

1) Anthony RN (1965), Planning and control systems: a framework for analysis. Harvard
Business School Division of Research, Boston.

2) Broadbenta J, Laughlinb R (2009) Performance management systems: A conceptual

model. Manage Account Res 20 (2009) 283–295.

3) Convention on international civil aviation (1944) (Chicago Convention).

4) Demartini C (2014), Performance Management Systems: Design, Diagnosis and Use.

Contributions to Management Science.

5) Euro-Mediterranean Aviation Agreement between the European Community and its Member
States, on the one hand, and the Kingdom of Morocco, on the other hand (2006).
 6) European Union; REGULATION (EU) N° 390/2013 of 3 May 2013 laying down a
performance scheme for air navigation services and network functions.

7) European ATM Master Plan, 2nd edition, October 2012.

8) Ferreira A, Otley D (2005), the Design and Use of Management Control Systems: An
Extended Framework for Analysis, AAA Management Accounting Section 2006 Meeting
Paper.

9) Ferreira A, Otley D (2009), the design and use of performance management systems: an
extended framework for analysis. Manage Account Res 20 (2009) 263–282.

10) ICAO; Doc 9854: Global Air Traffic Management Operational Concept, First edition
2005.

11) Otley D (1999) Performance management: a framework for management control systems
research. Management Accounting Research, 1999, 10, 363-382.

12) Strategic Plan (2011- 2016), ONDA.

13) Tatjana Samsonowa (2012), Industrial Research Performance Management Key
Performance Indicators in the ICT Industry.

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