1. Australian Travel Insurance Co had revamped its performance management system.

Instead
of annual performance reviews, the employees were having feedback sessions every 6 weeks.
The KPIs of the employees had remained the same. When analyzed, it was seen that the new
performance management system had degraded the employee morale as well as performance.
The fundamental problems with new performance management system are as follows:

· The modified performance management system was developed after comprehensive

discussion of the senior management of the company. However there was no
involvement of the employees in this transition process. If employees were involved, they
would have understood the management’s intent in this new performance management
system. Then they would have acted as facilitators of the new process and would have
ensured its successful implementation. Currently the new system seems forced on them.

· The goal setting process of the company was kept the same and no revision was done
to align it with the new process. The same goals which the employee was required to
achieve in a year’s time with the old performance management process, they had to
achieve it every 1.5 months. This had put the employees in pressure and they were
struggling to perform effectively.

· The employees were considering the feedback session as the annual performance
appraisal. Hence they used to be quite tensed for the evaluation conducted every 6
months and this was taking atoll on their overall performance.

2. Two practical solutions which will help in refining and improving the new performance
management process in the company are as follows:

· Currently the feedback sessions were considered as mini performance appraisal

process in the company. Instead the management needs to present it as informal
feedback session where the manager and the employee meet and discuss about the
things which are going good and the aspects which need to be improved on the part of
the employee. The manager can suggest ways in which the employee can improve his
performance. This will make the employee feel valued that the company is facilitating his
growth and development. The employee will work on his weaknesses and improve his
overall performance.

· The KPIs of the employees have remained the same in this 6 weeks performance
management process. The management needs to revise the same and scale it in a way
to make it realistic and achievable in the span of 6 weeks-time. This will facilitate its
achievement and make the employees believe in the new performance management
process.