Back in 2019, I was presented with the case of Attock Refinery Limited (ARL) when it adopted a new Performance Management System (PMS) in 2015.
Attock Refinery Limited (ARL) is one of the oldest oil refining companies in Pakistan. It started its operation in 1922. Over the years, it has maintained and upgraded its facilities and systems to keep up with the demands and challenges of time. Part of their improvement measures was the adoption of a new performance management system (PMS) in 2015.
Normally, when there are changes implemented in an organization, there is resistance, especially from old employees who have become used to the old ways of doing things.
I went over the case and learned about the reasons why employees were dissatisfied with the company’s new Performance Management System (PMS).
- Employees find the implementation of the new PMS very subjective due to its qualitative nature.
As to purpose (promotion and training),
They find it vague because there were instances when an employee had very good performance ratings from different supervisors, was not recommended by his direct supervisor, but was promoted, and was recommended by his manager but assessed by the PAC as not ready to be promoted. It also cannot be relied upon for future trainings because appraisers do not pay attention to filling out training program forms for fear that when employees get trained, they will leave the company. Or, they would only recommend training in areas they had previously identified, making some training repetitive.
As to the composition of the Performance Appraisal Committee (PAC),
The fact that the same members remain in the committee yearly means that their judgment of employees becomes biased. For example, once the employees are found not promotable for a year based on the performance review, they lose the chance of being promoted the next year because committee members’ first impression of the employees lasts, as if employees do not exert effort to improve anymore. Additionally, some of the appraisers lack the necessary training to offer feedback. Hence, their recommendations are vague. They only write one or two in the “development needs/plans” area in the appraisal form. They also ignore the recommendations of line managers, particularly those pertaining to the training of rank-and-file employees.
- Employees find the design of the PMS poorly designed because of the absence of institutionalized norms to rate employees.
The original objective of the PMS was to reduce issues of bias and unfairness because there was so much room for highly subjective judgment by the appraiser. However, because of the lack of a competency dictionary and the ambiguity in the SMARTS criteria, ratings of employees were merely based on the management philosophies and rating styles of individual managers under whom supervisors have performed.
Given the issues raised by the employees, I realized that the design and implementation of the PMS are contradictory to the vision and mission of ARL. As such, I recommend the re-modification or redesign of the currently modified PMS of ARL.
First, the management has to disseminate its intent to remodify or redesign the PMS. After employees gain awareness, they should receive orientation that emphasizes the purpose of the PMS. Open communication is then encouraged to make sure that problems do not arise during the implementation. We must immediately resolve any issues that arise during the early stages of the implementation. Feedback shall be encouraged, though it shall be focused on the PMS and not on the composition of the Performance Appraisal Committee (PAC).
Next, managers should supervise or provide training to their employees so that the latter can enhance their skills, thereby improving their performances, and so they can have a developmental mindset and not be resistant to change.
Lastly, managers should become accustomed to acknowledging and appreciating even the smallest contributions made by employees to the company. This way, employees feel that their efforts matter to the organization. Hence, they could not think of leaving the ARL or transferring to another company.