Case Study
AMECO Beijing-Benefits of PerformanceAppraisals
Questions
1. Why did AMECO introduce the DCPC monthly performance appraisal program? What
does performance management mean to the development of a company?
2. What are the contents and steps of performance management? What are the
differences between performance management and performance appraisal? How did
the company implement the DCPC monthly performance appraisal program? Was it in
accordance with the performance management cycle?
What are the contents and steps of performance management?
Content: continuous process of identifying, measuring and developing performance of someone
aligning his performance with company goals.
6 steps:
- 1. Direction sharing
- 2. Goal alignment
- 3. Ongoing performance monitoring
- 4. Ongoing feedback
- 5. Coaching and developmental support
- 6. Recognition and reward
What are the differences between performance management and performance
appraisal?
- Performance appraisal plays an important role in performance management
- Performance appraisal usually happen every month, quarterly, yearly, but performance
management is on daily/weekly basis
How did the company implement the DCPC monthly performance appraisal program?
Was it in accordance with the performance management cycle?
- 1. Direction sharing => CEO and HR director/Finance director explain to Dept Head
- 2. Goal alignment => Yes, to make sure income higher than expense
- 3. Ongoing performance monitoring => Yes, Heads continuously find more jobs
- 4. Ongoing feedback => Yes, on monthly meeting
- 5. Coaching and developmental support => Yes, Ex: Heads find support from Marketing
- 6. Recognition and reward => Yes, monthly bonus
3. Compared with the yearly assessments, what are the advantages and disadvantages of
the monthly performance appraisal program promoted by AMECO? What problems
should be noted in the process of designing a performance appraisal period?
Annual performance appraisals:
The annual performance evaluation program currently adopted by the company included a long
assessment period.
Disadvantage of yearly:
● difficult to identify problems in time and control the efficiency of the process.
● cover a relatively long period of time and they are not encouraging enough since they are only
linked with year-end awards
● unable to realize what the problems were until the end of the year, which made it impossible to
remedy the situation.
Monthly performance appraisals:
Advantage:
● could “force” all product managers to focus on the company’s operational efficiency.
● could ensure high pertinence and timely feedback
● could be an effective starting point for reducing costs and increasing efficiency.
● implementing monthly performance assessments could influence the benefit distribution of all
departments. (*)
● help make timely adjustments for each department.
Disadvantage:
(*)it was of utmost importance to first convince the heads of all departments. Otherwise,
implementing the monthly performance appraisals would be extremely difficult.
=>> Monthly appraisals are suitable for the current management situation of our company. Whether the
work content of each department is right or wrong, and whether the results are good or bad, should be
guided and judged by performance evaluation indicators.
Problems during designing process:
Halo effect, central tendency, leniency, bias can also be problems
Can cause disagreements among employees and may be unfair if all employees are, in
fact, excellent.
4. Are the appraisal indicators of AMECO reasonable? Why or why not?
No
There are many reason make the appraisal indicators of AMECO unreasonable
- Raise employee’s salary => company income will be lower than expense, while the
direction is staff cost should not be higher than ⅓ of total operating cost
- Organization Culture – It seems that organization culture of Ameco Appraisals is still
dominated by turf wars within various divisions, leading to managers keeping information
close to their chests, this can lead to serious road blocks in future growth as information
in silos can result can lead to missed opportunities in market place
- Lack of Work force diversity – Ameco Appraisals is not diverse enough given that most
of its growth so far is in its domestic market, this can reduce the potential of success of
Ameco Appraisals in the international market.
- Track record on environment consideration is not very encouraging – Ameco Appraisals
track record on environmental issues is not very encouraging. this can lead to consumer
backlash as customers are now considering environmental protections as integral to part
of doing business.
- Implementation of Technology in Processes – Even though Ameco Appraisals has
integrated technology in the backend processes it has still not able to harness the power
of technology in the front end processes
- Customer Dissatisfaction – Even though the demand for products have not gone down
but there is a simmering sense of dissatisfaction among the customers of Ameco
Appraisals . It is reflected on the reviews on various on-line platforms. Ameco Appraisals
should focus on areas where it can improve the customer purchase and post purchase
experience.
- Ameco Appraisals is not efficiently managing the inventory and cash cycle.
- The Ameco Beijing Benefits of Performance Appraisals cannot influence factors which
directly affect the operations and workings of the company (Political, Economic, Social,
- Ameco Beijing Benefits of Performance Appraisals must make sure to continually assess
and review the external environment to make sure that it responds to external factors,
and take them into account, during strategic decisions, and strategy devising
5. In the place of Ma, the CEO of the company, how would you further improve the
performance management program?
• Change the appraisal indicators
• Focus on considering the affect of the new decision to all departments then change the
appraisal indicators following those assessment and evaluation.
