Introduction to the Case The case Implementing Performance Management System at Packages Limited describes a change initiative through

implementing performance management system at Packages Ltd in 1996. Mr Nayab Baig, the Human Resource Development (HRD) manager of Packages Ltd introduced a new performance management system, referred to as Performance P lanning, Managing & Evaluation (PPM&E). Before 1996, there was no formal performance evaluation system in the company. Absence of a formal system allowed for subjective judgments in the areas of performance evaluation, promotions and succession planning. The new PPM&E system consisted of three main components, namely Performance Planning, Performance Managing and Performance Evaluation. The implementation of new evaluation system called for a cultural change in the company. Managers and employees who were not used to any formal evaluation system earlier found the new system to be lengthy and complicated. One year after the introduction of the new system, an internal audit indicated that although most managers had done relatively well on performance planning, they were not regularly following the performance managing process. Nayab felt that in order to derive value from the system, the performance managing section must be utilized as directed. The case ends with questions of concern by Nayab. What should he do at this stage to ensure successful implementation of the PPM&E system? How could he improve the motivation level of managers to implement the new system more effectively? How could he measure the effectiveness of the PPM&E system in terms of the impact it has on the people and the organization? Core Problem The core problem lies in the performance managing process. Although the system was implemented and was also being used for the purpose it was intended to be used for but not all of its components were implemented the way they should be. This was making this system inefficient and several problems were arising because of this. The performance objectives were set according to the system however the next step of regularly managing the performance was being neglected. The managers were required to keep monthly performance records of the

employees in order to know the lags in the performance so that they could be rectified timely without disturbing the performance more. Because of the poor performance managing process, the evaluation done at the end of the period was also flawed because the essence of the performance management was to identify the shortcomings on regular basis and rectify them but because this was not the case so this was leading to the year-end ineffective evaluations. Performance managing is a process by which managers and employees work together to plan, monitor and review an employees work objectives and overall contribution to the organization. More than just an annual performance review, performance managing at Packages was supposed to be the continuous process of setting objectives, assessing progress and providing on-going coaching and feedback to ensure that employees are meeting their objectives and career goals. Managers at packages were reluctant to keep regular records of performance of their employees because they were taking it as a cumbersome time consuming activity with a little to add to the performance. They preferred spending their time on constructive tasks and according to them this performance managing process was more of a time consuming less productive task. A lot of senior managers were doing this task which was actually their subordinates job and because of this senior managers had a lot of burden of work.