Performance Management

Performance Management






Performance Management

Performance management is a very important aspect for any organization. It has several benefits that have far reaching consequences to the benefit of the organization at large. Normally the process of performance definition and performance management involves a series of processes that work in tandem to ensure that an organization is in the process of meeting their goals and objectives. First and foremost it enables the employers and employees to set their goals and those of the organization. This occasionally involves the revision of the goals that had previously been set by the organization and are yet to be achieved among several others. By setting their personal goals to achieve within the organization, they get to acquire a sense of ownership of the organization. This enables them to work harder at achieving their goals and in turn improve the performance of the organization.

Next it allows for the acquisition of necessary skills for the development of the organization at large. At certain instances, the only limit to an organization that prevents it from achieving their objectives may be the lack of skills by the employees. Performance definition thereby helps the employees to develop their skills further and thus bring out better outcomes. The third importance of performance definition is that it enables different employees to obtain regular feedback on how their performance is and what is needed to develop their skill or improve them. Finally, performance definition may include performance appraisals. These help mainly in recognition and reward of employees where need be. This forms part of positive reinforcement of the behavior which makes the employees want to work to the best of their ability.

Goals and objectives are two terms that are often used interchangeably yet they have very different meanings. In the business world, goals are defined as a representations of your future aspirations. These are the statements one makes about the desired future of their business. On the contrary, objectives are defined as the definitive steps that your company or organization must take in order to reach to their ultimate desired future goals. Stakeholders are defined as a group of individuals who stand to lose or gain from the success or failure of a given system. Many organizations are brought about by different individuals who have one end goal.

Several times this may include a group of friends, or families or even employees who previously worked together. Even though these individuals all have a similar end goal to achieve, their principles often vary and thus their expectations also vary. On few occasions this may be the source of several disagreements and therefore as stakeholders, the have to device new ways to prevent the onset of conflict. An example of an organization with several stakeholders is the Toyota Motor Corporation. These include the following: The employees, the customers, the investors, the environment and their surrounding communities. In order to ensure that all the stakeholders with different views are incorporated, the company came up with different programs such as the Toyota Corporate Responsibility program to ensure different needs are met.

Defining the goals and performance model of an organization is a management decision. This is because the management of an organization are often aware of the needs of the organization, their goals and their objectives. With this in mind, they can then propel the organization to greater heights and ensure they prosper. Goals may be set by the main shareholders or the management team at large. However, they are best outlined by the management team at large.

There are different levels of management in every organization. All these are able a responsible for defining the goals and performance models. The different levels of management include Top, middle and first line managers. Top managers are responsible for the overall direction and operations of an organization. They have such titles as chief executive officer (CEO), director, president, chairman. These are followed by middle managers. These are responsible for business units and major departments for instance department head, division head, and director of the research lab. The final levels of management are the first-line managers who are directly responsible for the production of goods and services; they include office manager, section chief, line manager, and supervisor.

There is a direct relationship between the performances of a company ant the total profits it obtains and vice versa. This is because, the manner in which a company performs including how well the employees work and how satisfied the customers are will determine how much profit the company makes in the long run. Therefore, for a company to obtain great profits, they have to work to the best of their ability. This is where the different levels of management come in. All the different management levels have to ensure that their respective departments are doing their best.

This will translate to better outcome of the entire organization at large and greater profits. On the other hand, the amount of profits a company obtain has a direct impact on the performance of an organization. This is because when a company is doing well in terms of the profits, then both the employers and employees have the motivation to do better and work much harder to ensure the profits are maintained in greater levels. Greater profits will also mean better allowances and positive reinforcement strategies which will act as enough motivation for the company at large.

The stakeholders of this Air Utopia include the management team including the president, board of directors and the different management levels as previously discussed. The employees also form part of the stakeholders including both the commercial and technical workers. Generally, all the employees at different levels. The next stakeholders are the customers served by Air Utopia. The company serves a variety of individuals from mainly from Europe and its surrounding capitals with the main base at Utopia. The investors also form part of the stakeholders together with the surrounding community. This company has several aims and these have mainly been brought about by the new president Mr. Moullart First and foremost he would like to make his mark to the newly privatized national airline and especially to satisfy its shareholders. This is his very first aim and also seems to be the main aim driving his other aims.

The next aim by Mr. Moullart is to reach a profitability of 5% within three years, which requires to grow to a certain size. Previously, the company did not exceed the 2% over the last 5 years. The third aim is that the new president would like to maintain the company as a traditional company without falling into the current trend of low costs and debts. The fourth aim of the company is to be part of the eventual expansion of the airport which they already might be part of. This would mean growth within the hub infrastructure, flights to contact which then allows access of customers see the plane through gateways, facilitated connections, baggage sorter, maintenance bay nearby among several other benefits. Finally, Mr. Moullart wants to show his skills as a manager by implementing an economic plan, including on the service at the airport and service on board.

The components of the strategy by Air Utopia include a mission statement, vision statement, values statement and guiding principles, a SWOT analysis, a competitive advantage, financial assessment and objectives. The mission of this company is to make the newly privatized company a state of the art and to satisfy the shareholders. Its vision in my opinion is to be able to be the best around Utopia city and by so doing maximizing on their profits. Air Utopia also has values and their guiding principles not overtly stated in the excerpt. The SWOT analysis incorporates the strengths, weaknesses, opportunities and threats that affect the company. The main strength of the company is that it lies in an excellent location. It’s in the heart of Europe where there is a very large turnout of customers. Also, the area in which it’s located is soon undergoing construction and expansion. This means that in the near future, there will be several benefits brought by the expansion as had been stated before. The weaknesses of the company include the fact that they are in debt. As stated in the excerpt, the company has little debt, and its profitability including the net income compared to the turnover has not exceeded 2% over the last 5 years.

The opportunities the company has is the arrival of a new president with new insight and a good vision for the company. Also they have an opportunity to become one of the most sought after airlines because of the airport expansion. The main threat that is evident in the company is the reserved nature of the board of directors. The new president had very good plans for the company, however his ideas are met with several reservations and he cannot make such decisions without the support of this team. Other threats include the low turnout of passengers and the low filling up levels of the airline, this means lower profits to the company.

The competitive advantage of the company is that it has been in existence for a long duration of time and has already established a mark in the business entity. Also, the previously mentioned expansion and reconstruction of the airport gives them an upper hand and a greater chance to flourish than their competitors. The financial assessment other than the fact that the company is in some little debt is not adequately covered in the excerpt. However I believe that their financial records are not at a bad position following the losses that they are stated to have incurred. The objectives of the company include to be able to make as much profit from the newly privatized company as possible, to become one of the best airlines in the region. This will be obtained by positive reviews from the passengers. Another aim is to be able to reach out to as many passengers as possible. This is the reason as to why the online department is coming up with strategies to ensure that this is achieved.

Mr. Moullart has several priorities as stated in the passage, however the most important priority is the fact that he wants to expand the airline both in terms of increasing the number of flights present and increasing the number of employees in the company. He also want to increase the training of the employees and the total number of routes taken by the flights. These priorities are in line with the strategic plan of the company and could easily lead to the flourishing of the company to a greater level. However the main challenge he is facing currently is that the board of directors are not in agreement with him and therefore he might face some difficulty in achieving his goals.

The grids demonstrated below represent the O/VA at the level of the company. The priority objectives in the grid have been selected from the president’s priorities discussed above. The indicators listed below were derived from the appendix with a few adjustments with references to the priorities.

Step 1.

  The acquisition of 4 new Airbus A319 Track equipment The hiring of officers A reprogramming of the flights Profitability Service Quality
ProfitabilityGrowth X X     X X
Corporate Identity X         X
Employee Training X   X X   X

Step 2

Definition of Variables d’action

Variables D’Action Airline Goals
  Profitability Service Quality
Passenger occupancy rate X  
Customer satisfaction X  
Employee Training X  
Employee turn over X
Loyalty Programs   X
Flight Reprogramming X X

Step 3

Selection of Indicators

Goals Results Indicators
Profitability Return on AssetsOperative cash flow
Service Quality Perceived Quality from customer satisfaction reports
Variables D’Action Control Indicators
Passenger occupancy rate Passenger Occupancy rate
Customer satisfaction Customer satisfaction reviews
Employee Training Employee reports on training
Employee turn over Daily registers
Loyalty Programs Number of customers received yearly
Flight Reprogramming Increase in profits
Absolute Punctuality This will be detected in the customer satisfaction reviews
Lost luggage Customer Reports
Number of Passengers Number of tickets sold

The list of indicators in the appendix has several issues. To begin with, in my opinion, not all of them are good indicators of the outcome of the new strategies set. Others are unachievable and may be difficult to follow up in the course of the travels. Otherwise the rest of the indicators are easily achievable and can be followed up. I have included other indicators in the grid that could be of great importance to the assessment of the achievement of the objectives. In conclusion, it is my view that cockpit dashboard is sufficient to control the activity of Air Utopia.