Case: Ameco Beijing - Benefits Of Performance Appraisals

Submitted By:
G20053 – Amit Kumar Singh
G20056 – Arijit Dey
G20061 – Digvijay Bhandari
G20077 – Priyanka Biswas
G20093 – Vivek

Case Background:
Ameco is a joint venture between Air China and Deutsche Lufthansa AG, where Air China holds
60% of the company's shares. Firm provides services like airline maintenance, overhaul and
painting of aircraft, engine repairs and ground equipment calibration. The organization structure
is divided into Airline Maintenance, Aircraft Overhaul Product and Engine overhaul product
department having 2500+,1100 and 268 employees respectively.

Problem statement:
Designing Performance Appraisals to serve 3 pronged purposes of: Employee Retention,
External Competition Threat, Cost Cutting/Optimization While increasing the overall
performance of the company. The problem is that the company’s income is lower than the
expense.

Monthly Performance System - Changes and Issues

● The Performance indicators focused on operational efficiency alone. It should have also
chosen indicators whose success relies directly on the individual employee's
performance.

● Since this is a monthly activity, the finance and HR department were burdened by
calculating and collating performance indicators from each project and product teams.
They had to collect information regarding input, output, overtime, safety and quality
incidents etc. every month

● Fluctuations in external environment, like reduction in workload due to phasing out of

older models and increase in workload due to competitors introductions of new models
were not considered in the KPI, that led to talent attrition

● DCPC assigned scores solely on the basis of operational efficiency and increased
workload was not taken into account except to deduct points for overtime costs
 ● KPIs like time duration required for the training of the staff for maintenance of new
engines and workload impact due to fixed price contracts and salary impact due to
appreciation of Chinese Yuan not considered

Recommendations
● Unique and upskilling training programs that are relevant for Ameco can be designed.
This shall subsequently improve employee value and retention. This also rules out the
chances of the employee lacking in contemporary market skills.

● DCPC assigned scores based on a single variable, that is, operational efficiency.
Increased workload has not been taken into consideration. Thus the amount of workload
can be included as a KPI so that the employee is paid for his/her performance.

● The most substantial workload but not the highest salaries. Thus, multi-rater
functionality, like 360-degree feedback, can be implemented, where peers and other
team members review performance

● Analytical tools enable businesses to determine whether their investments are accruing.
The efficient use of productivity analytics helps the Managers to monitor their
employee’s performance in real-time, thus allowing them to make relevant and informed
decisions.

● Currently, the KPIs are linked to the departments, while it’ll be more effective if it’s also
linked to the individual performance of an employee