1.

Define the organizations goals

Goals have been defined by organisation theorists like V.H. Vroom in 1960 and A. Etzioni in 1964 as
“desired future state of affairs”. Generally speaking, goals are the objectives, aims or purposes which are
to be achieved by an organisation over varying periods of time. Goals are the result of planning which is
related to future as described by Vroom and Etzioni. Planning is required both for choosing the goals and
attaining the goals.

Moreover, a Goal is even more specific and fine than the objective. An increase in production may be the
objective but when its objective is expressed in relation to particular norms or standard such as increase
in production by 10 units per man per week, it becomes a goal. These distinctions become imperative
when the organisation follows the policy of Management by objectives.

Organizational Goals of AMECO Beijing

Prior to the formulation of the DCPC program (Direct Control of Personnel Cost) at Ameco, the companies
goals as elaborated by Gang Li, the director of the engine product department were that the goals were
made at the beginning of each year, reviewed them in the middle of the year, and make an assessment at
the end of the year. The Goals are as follows :

1- Negotiating a five-year overhaul services contract with United Airlines for its B777 and B747
fleets was a Goal for Ameco. If Ameco managed to sign these contracts, it could reach its internal
financial targets for that year.

2- Another goal was necessity to find ways to increase revenue and employees’ salaries, and to
control costs immediately in order to operate swiftly within the growing market. Since, skilled
employees were a valuable asset that helped support the sustainable development of the
company. And training new professionals and engineers in aircraft maintenance to take their
places would take at least five years to realize.
2. Identify the constraints to the problem of Ameco

While low operation efficiency was the main reason why company could not make ends meet. However,
the annual performance evaluation program currently adopted by the company included a long
assessment period. Therefore, it was difficult to identify problems in time and control the efficiency of the
process. In contrast, implementing monthly performance appraisals could “force” all product managers
to focus on the company’s operational efficiency.

Also 80 per cent of Ameco’s business came from Air China, which is its major shareholder. However, since
the lump sum construction contract price with Air China was relatively low, marketization had never been
realized.

Furthermore, Ameco’s maintenance department should have be the most profitable department in the
company. However, Ameco’s real value has not been reflected, based on such pricing. In the given
situation, personnel costs must be market-oriented. By simply looking at the input-output ratio, Ameco
was not being reasonable at all.

Resultantly it was estimated that first, the assessment period was too long for obtaining timely feedback
and incentives. Second, the assessment effort was weak; that is, only 10 per cent is linked to year-end
awards. Third, the goals Solutions had not been broken down for each month, which is one disadvantage
of process supervision and problem control.

And therefore as a result of this, monthly appraisal systems were deemed necessary for the management
situation of the company. And moreover, whether the work content of each department was right or
wrong, and whether the results were good or bad, should be guided and judged by performance
evaluation indicators.

Consequently, Li Ma the CEO of Ameco came up with the following solutions in order to address the
constraints to the problem of Ameco.

 First, the evaluation indicators should be fewer in number but better in quality, so that we can focus
on achievements and improvements.
 Second, the communication with the employees should be simple and easy to understand.
 Third, everything should be in line with the interests of the shareholders, customers, and employees.

Resultantly, a three-month observation period was set up in order to determine whether the monthly
performance appraisals could help solve the current and future development problems within the
company.

Even though, the workload for the Human resource and financial department to collect and organize the
data increased significantly, in the program, budget indicators of monthly operations, monthly product
operations, and monthly costs were designed for different product departments. Every month, three
product departments were to compare their actual situations with the budget and monthly variable
salaries of the department, based on the ratio.

The official implementation of the DCPC program occurred in January 2011. There were many positive
outcomes
 I. Zhao, the director of the airline maintenance department, changed focus significantly. By using the
tool of performance management, he forced the heads of all product departments to make significant
efforts to increase working efficiency, save labour costs, and increase revenues.

II. As expected, the DCPC monthly appraisal program did inspire all product departments. Instead of
complaining about heavy workload, they actually requested more work.

III. Finally, when the heads of the other product departments saw that the focus of Zhao (which had
always been on the safety and stability of employees) had changed considerably, they were
encouraged. All superiors and subordinates set up goals, exercised strict control, and actively
undertook more work. As a result, Ameco entered a new era in which positive competition stimulated
performance improvements.
3. Develop an implementation plan

Subsequent issues need to be addressed while developing an implantation plan

How can we set up the indicators to motivate the employees and keep talented personnel in the
company?

As employees are the life force of a company, implementation must begin with clarifying the link between
employee performance and the overall desired business outcomes. The human rights department needs
to focus on Talent Management, this is something that is best achieved with input gathered from HR,
managers and employees. The team needs to know what they’re measuring so they can focus on what’s
important.

How can we minimize the impact of external factors, while considering more about the workload?

The new implantation plan should introduce features such as

1) Effective dialogues
2) Frequent check-ins and employee ratings
3) Frequent feedback which can include counselling and coaching
4) Better external negotiations

How can we reasonably assign the department tasks to each employee, while avoiding the
phenomenon of “unmerited” workers reaping the benefits?

Ameco could introduce encourage employees to take up technical courses. Furthermore, it’d be useful to
measure the results of those training opportunities during a performance review. Are employees using
what they learned? This can measured by comparing their performance rating in one skill before and after
relevant training. If an employee’s recent performance metrics are 10% higher than they were previously,
it’s a good indication that their training was effective.

How can we let the employees receive real benefits from the appraisals while increasing the overall
performance of the company?

Time management is a desirable skill in most positions. Employees need to divide their time effectively
across their projects. You can measure their time-management skills by calculating the percentage of
missed deadlines, turnaround time or how quickly they complete tasks. Ameco needs to revise its
measurements. They can shift the performance matrix.
Detailed Implementation Plan
Any changes in setting expectations, measurement and evaluation of set expectations, feedback and
performance appraisal will focus on four important aspects of AMECO.

a) Culture and team engagement

b) Process improvement.
c) Improving the workplace environment (internal environment)
d) Relationships and interactions with other areas of the system (external environment)

1) Setting expectation
Based on Goal setting theory such as SMART goals, revised goals at Ameco will include:

I. The minimum time duration required for the training of the staff for maintenance of new
engines

AMECO can subsequently estimate the total number of employees required for the maintenance of the
new engines and furthermore, decide whether a training can be arranged for the entire staff by AMECO
would be more effective or providing incentive to the workers to take the training after work is more
fruitful. Once the most efficient method is established they can engage the staff accordingly.

II. Marginalize the negative impacts of signing the fixed contracts with Air China

This can be achieved by renegotiating the existing contracts in Chinese Yuan instead of U.S. Dollar and re
designing a better work plan for airline maintenance department in order to circulate equal amount of
work to all employees.

Moreover, with respect to these 2 goals there needs be a clear link between Knowledge, Skills and
Abilities and certain workforce behaviors that are desired. In order to appropriately identify KSAs, job
analysis procedures may be used to ensure that the knowledge, skills, and abilities noted are required for
performance of the specific job duties. To ensure that the KSAs translate into actual job duties, employees
can be asked to rate on a five-point scale whether the job duty in question was (1) one of the easiest
duties, and up to (5) one of the most difficult duties. Based on this information, the KSAs can be grouped
into 5 different competency groups. Within each competency, it will be established that which tasks are
seemingly the most difficult and could require more training. This will provide the administration and the
staff with a clear picture regarding the tasks, duties assigned and the appraisal.

2) Measurement/Evaluation Of Set Expectations and feedback

Ameco needs measure the performance management not only through setting rewards but also through
employee engagement, having a performance oriented-culture, and management commitment.
Measurement and evaluation should incorporate equity theory and expectancy theory.

Given the recent trends, feedback and coaching seems to be more beneficial than earlier measurement
models such as balanced score card, 360 degree feedback and Competency modeling.

Ameco could focus on effective dialogues via regular check-ins and employee coaching and
measurement of the set expectations can be achieved through employee caching. When implemented
properly, coaching can be used to support the delivery and use of feedback, be a facilitator for goal setting,
and also to help employees reflect on their progress. Coaching not only allows direct input to help the
employees build strategies to be more successful, but it also fosters relationship building between the
coach and their clients or employees. Moreover, another major benefit of coaching is that it can help
employees to be more engaged and learning is another outcome of the coaching process.

This process will promote a positive organizational culture within Ameco where employees would be
satisfied with their job related roles and the given feedback will bring process improvement and improve
the workplace environment (internal environment).

3) Performance appraisal
Researchers indicated there are two main goals of performance appraisal: administrative and
developmental. Focusing more on developmental outcomes, at Ameco, performance appraisal will be
linked to feedback and coaching, targeted training, perception of fairness, and linking performance to pay.

The clarity of set goal and possible ways to achieve those goals with regular feedback should have a
positive impact on the environment of Ameco. Therefore, frequency of the appraisal can thus be linked
to the achievement of the targets assigned to the employees in order to achieve the goals instead of pay
based on the market value of individual skills. Tools such as snap chat and scatterplot should be used to
evaluate the overall performance while achieving the goal. Resulting in the time management skill to
be evaluated more effectively. This will not only improve employee perception of the appraisal process,
but may also lead to more consistent performance management results overall.

4) Implementation phase
These revised goals can be first implemented in the maintenance departments at AMECO. This will not
only help subside the issues arising due to change in the external and internal environment but improve
the performance management of the concerned departments. Once the desired outcomes are achieved
the new plan can further be implemented in other departments at AMECO.