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This case in all is all about implementing the Performance Management System at Packages Limited. According to the case Mr. Nayad Baig, HRD manager, realized that many manager were not following the new performance management system. HRD manager basically think that this system can improve the efficiencies of the firm, but no one was implementing it.

In 1968, company had established a new paper and board mill and its annual production capacity was 24000 tones. In 1994 the paper and board mill was expanded up to the annual capacity of 50000 tonnes. The company revenue had grown from Rs 745 million in 1987 to Rs 3013 million in 1996 1997 company had approximately 2800 employees, 0ut of which 800 worked I paper and board mill.

HRD manger realized that managers were not implementing the Performance Planning, Managing & Evaluation system. Packages limited was founded n 1957 as a joint venture between the Wazir Ali group and AB Akerlund and Rausing of Sweden, modernization In 1997 packages spend Rs 2.7 billion in balancing modernization, replacement and expansion program. In 1996 the company had received the ISO 9001 certification. Safeguarding the environment was an important goal of the company. Company thinks that employees growth means companys growth. Before the joining of Mr. Nayab joined the Company, there was no formal performance evaluation in the company.

After some time HRD manager designed the proper Performance Planning, Managing and evaluation System (PPM&E). Some of the major key objectives of PPM&E were Providing proper feedback to the employees Guideline for attaining personal objectives Formal recognition for superior performance Provide the opportunity for the employees and managers to discuss new assignments PPM&E also help to increase the motivation, commitment and productivity of employees.

The PPM&E system had three components a) Performance Planning b) Performance Managing c) Performance Evaluation

Performance planning is a top down and integrated process, in which individual employee objectives support the division and corporate objectives.

In the Performance Planning, the manager would inform the employee regarding the expected performance level while keeping in mid his own performance objectives and potential of employee.

In the Performance Planning and evaluation form, the manager lists the objectives according to their importance and assigns weights to them. Company believed that the corporate business environment is changing rapidly, so company wanted its employees to quickly adapt change.

There are two set of competencies, one for senior level manager and second for all other managers. The important competencies dimensions include communication skills, work organization, result orientation, strategic vision, business know how, critical reasoning and so on.

The major purpose of performance evaluation

was to assess the employees

performance against the objectives set during the performance planning stage Before the implementation of PPM&E system, HRD manager provide training to the mangers and seventy managers had participated in this training. In 1997 this system was implemented and managers had done fairly well with the setting of the objectives, but they were not regularly following the performance management records. Mostly managers complained that this PPM&E requires a too much time. Some senior managers have to fill the form for fourteen employees because their lower staff doesnt have adequate skill for the system. This system is good, but it will take time to absorb in the company culture, because previously there was no system for the record keeping of employees performance. One manager said that This system is good if the documentation is there. According to another manager, that this system is more ideal then practical and it is time consuming as well. We dont have corporate culture to maintain this system. Mr. Nayab believed that company can get great benefits by implementing and utilizing this PPM&E system.


No formal system in performance, evaluation, promotion and succession planning. Individuals objectives, deadlines, and expected standard of performance were not always defined, so it made difficult for the managers to distinguish high performers from average performers. Lower staff feels that there was no proper feedback on the performance. Managers were not regularly following the performance managing performance. The performance and competency behavioral indicators were not being recorded in proper detail. No proper Span of control.

Managers commonly said that this system requires too much time and it is very lengthy & complicated will required a lot of time. Lower staff doesnt have the adequate skills to fill the form and some senior managers have to complete the form for fourteen employees. One manager said that, this system is good, but it will take time to absorb in the company culture. Another manager said that this system is good, if the documentation is there and the company objectives should be well defined. The percentage of increments in the salary is fixed and the employee is not satisfied no matter how they perform.

The core problem lies in the inadequacy of human capital and the appraisal system is too formalized to fit in the environment of the organization.


Recommended system not followed
The new system introduced by the Mr. Nayab Baig was not being followed by the employees of the organization. In other words we can say that they were unable to implement the new complex and highly extensive performance appraisal system. The managers were not able to cope with the monthly performance records and also they were not able to gauge the behavioral indicators.

In formalized prior system

The system of the organization prior to the flawed implementation of the new appraisal system was highly informal that made new system difficult to be adopted in the organization. The managers were unclear about their goals that the goals could not be transferred down to the hierarchy. They also claimed that there is very less relevance of their goals which made them less motivated.

Lack of qualified Human Resource

According to the exhibit 2 shown at the end of the case that depicts the numbers of management staff in the organization. It is clearly mentioned that there are 52 numbers of people in the management who are B.A, which is the maximum as compared to others. The problem of having less qualified and less capable people in the management made the new system difficult to be implemented.