AN ASSESSMENT OF ADEQUACY OF PERFORMANCE MANAGEMENT SYSTEM (PMS) IN ENGINEERING SERVICES ORGANIZATIONS OF PAKISTAN

Abstract

Managing employees’ performance and implementing the performance management system (PMS) effectively is one of the most complex and challenging issues companies are facing today. This research highlights the challenges, opportunities, and pitfalls that cause imperfections in the implementation of a performance management system (PMS) in the engineering services organizations. The research also provides conceptual tools that will aid in future endeavors to design and implement effective PMS. At present, engineering services organizations are using empirical approach to predict performance requirements for a forthcoming fiscal year and these approaches are based on the simplified and generic performance standards. HRM departments neither carry out surveys on training needs nor identify training needs on the basis of performance evaluations. The engineering services organizations are facing difficulties in developing flexible work schedules resultantly reducing the time devotion of the employees on work, increasing employees’ absenteeism and significantly decreasing the employees’ retention. There was a worth mentioning need to identify that how effectively engineering services organizations plan and implement the performance management system (PMS) to retain the best talent, skills and knowledge, achieve the desired organizational objectives and to achieve the desired performance outcomes? The empirical study described in this thesis addressed the issues of human resources by focusing on performance appraisal and performance management system that creates organizational effectiveness. The research study variables were attributes of human resource management fundamentals that include human resource planning, recruiting, socialization, trainings and performance management system (along with issues of rewards and benefits associated in performance management system). The research focused on these attributes as these have strong influence on the effectiveness of the organizational performance management systems and performance appraisal process in engineering services organizations of Pakistan. The technical cadre (non-managerial positions) was considered with internal organizational influences on the performance management (external influences considered insignificant). The research approach included detailed literature review on the performance management system and data collection from eight organizations (CDA, EPMC, WAPDA, PES, NESPAK, AAA, HALCROW and SMEC) through iv questionnaire based upon the attributes of human resource and performance management system. The conclusive data analysis was carried out which resulted that 06 engineering services organizations among sample population follow a strict formal organizational environment focusing on productivity which results in poor work relations and nonflexible work schedules. The organizations with range of engineers in between 100-200 and 1001-1500 are unaware of balancing career ladders for proper coaching and mentoring. Use of the performance appraisals is very little for identifying training and development needs, providing feedback on personal strengths and weaknesses, creating a dialogue about performance matters and exchanging information, recruitment, salary administration, compensations, selection and promotion decisions. Effectiveness of the training programs are unevaluated, HR involvement is unbalanced, average planning costs of PA are 14.00% of the overall costs of performance appraisal process and 64.00% is spent on administering the performance appraisals (PA) which shows that performance planning is minimum and administrations costs are higher resulting use of improper generic performance criterion. Temporary/Contract employees neither get the privileges of the permanent job and its facilities (medical, leave assistance etc.) nor discretion in their pay in relation with the pay of permanent employees as 06 organizations have ratio of pay of permanent to the pay of temporary Employees as 1.0-1.0 for junior as well as chief engineer level and 05 organizations have that 1.0-1.0 for senior engineer level. Employees experience great differences in job descriptions (JD) after entering in the organization w.r.t JD informed before entering the organization. Increase in qualification during job has slight effect on career management as only a difference of 01year occurs in promotion from senior to principal and principal to chief engineer level with MSc degree w.r.t BSc degree. Job difficulties and performance criterion deficiencies are unevaluated. Work diversification is less promoted and is experienced as source of performance decline. There is little employee involvement at lower levels as only 02 organizations provide opportunities to junior engineers to participate in quality improvement programs. The 07 organizations among sample population provide forced socialization i.e. expect new entrants to socialize and perform well in very petite duration (a month or less) and prefer their employees to be socialized only by their immediate superiors. v Training expenditure before as well as after conducting PA is almost same indicating that the training programs are ineffective. 05 organizations fill position with about 40- 50% outside hiring which cause 04 organizations having 1.8-2.5 and 03 organizations having 2.5-3.0 times expensive trainings of new entrants at those positions w.r.t internal promotions and demotivation of existing human resources (HR). In 05 organizations employees experience inability to work in teams, supervise subordinates and understand expectations of the management when promoted to senior/upper levels of career stages resulting in overall poor performance. All the 08 organizations use results of performance appraisals provided only by the immediate superiors of the employees with absolute ranking system without any comparison among various employees and do not use any other type of performance evaluation method i.e. customer, co-worker or subordinate evaluations resulting biased performance ratings. 06 organizations prefer to provide written warnings which cause bad effects on the long term career of their employees as these warnings are noted on the personal files of these employees. The detailed thesis results indicated need of formulating performance management controlling tools (PMCT). Time devotion chart (TDC), Absenteeism rate bar graph (ARBG), Stability index histogram (SIH), Retention profile (RP), Cumulative defects causes chart (CDCC) were formulated as PMCT. PMCT resulted that the major causes of inadequacies in existing PMS are (1) failure of employees to perform well after promoting to upper levels, (2) performance based actions does not fully utilize the PAs and (3) criterion deficiencies in performance appraisals. With detailed analysis on the basis of PMCT it was identified that a better Performance management system for engineers (PMSE) needed to be suggested that would help in the betterment of performance management to improve productivity and performance reviews of employees with regard to their specific objectives and overall objectives of organization as a whole. An improved PMSE has been developed which if used to manage the performance of the employees, the results shall continue to be refined as the gap between the performance criterion and actual performance shall continue to bridge over a period of time. Again, improved PMS, can help us to closely track and monitor the employees’ performance and improve employees’ stability and retention.