Sample Essay on Performance Management Analysis for Etihad Airways

Performance Management Analysis for Etihad Airways

Etihad Airways, located in Abu Dhabi, was established as the national airline of United Arab Emirates (UAE) in July 2003 through a Royal Decree.  The airline had a fleet of 121 passengers and cargo aircraft by the end of the year 2015 that currently serves 68 countries with 116 destinations. Etihad Airways is a rapidly growing airline, and its main business is offering air transportation for passengers internationally. It also provides other services including Etihad Cargo, Etihad Holidays, Etihad Engineering and Airport services. Moreover, Etihad Airline manages an international loyalty program and offers other aviation and non-aviation services. The airline has a diverse workforce totaling to 26,566 people by December 2015. Since commencing its operations in November 2003, the airline has won various awards reflecting its position as one of leading airline premium brands globally. These awards include the Employer of the year award at the 2014 Middle East HR Excellence Awards (Etihad Airways wins four coveted Abu Dhabi Excellence Awards 1).

Performance management is the process through which an organization establishes a shared workforce that understands what needs to be attained at the organizational level. It is concerned with the alignment of the objectives of an organization with the employees’ measures of agreement, skills, competency needs, plans for development and results delivery. Performance management gives a lot of significance to learning, improvement and development in order to attain the overall strategy of a business and develop a workforce with high performance. It plays a key role in rapidly increasing the performance outcomes of an organization in circumstances where it is correctly implemented by taking certain objectives of an organization and tying them to the strategic and operational plan (Ammons 8).

Performance management is normally associated with four common objectives of business, which provide a valid reason to implement a performance management process. One of these objectives is ensuring there is compliance with contractual or legal requirements. These necessitate a business to have the definition and communication of performance expectation of an employee. It is also concerned with making consistent evaluation and documentation of employee performance based on these expectations.  The second objective is the engagement of high performers whereby employees who make a huge contribution to a company are identified and offered greater rewards and recognition in the form of pay, career opportunities, and development resources. The third objective is enhancing the performance of employees and retention by coming up with greater levels of coaching, constructive feedback, and dialogue around career development. The fourth objective is the development of consistent, well-defined processes and job-relevant criteria to guide pay, promotion, and termination actions (Ammons 11).

Performance management tools applied by Etihad Airways

Etihad Airways uses a wide range of performance management tools including an organization culture that is driven by performance, organizational objectives, performance appraisal processes, focusing on one-to-one discussions, externally conducted employee surveys, employee learning, and developmental programs and rewarding and recognition systems (Buckingham and Goodall 40).

 

 

1. Organizational culture and leadership

One of the significant tools of performance management systems in Etihad Airways is organizational culture and leadership that is driven by performance management. Orientation sessions and training for new members of staff are conducted where the organization’s philosophy is described. Here, the new staff members are informed how their jobs contribute to the performance management strategy of the entire organization. Job specifications are explained to every staff member, and the expected performance is defined by these specifications. Managers at all levels of the organization are committed to maintaining a performance driven culture across the organization (Buckingham and Goodall 45).

2. Objective Setting

Etihad Airways sets clear organizational objectives that act as a tool for performance management. Objectives introduce the kind of environment that individual employees will be measured as per their performance and output employing the standards that have been put in place for evaluation. Setting objectives describe the reason an organization exists and it involves coming up with mission and vision statements. The purpose of these statements is to make sure that all the efforts to enhance performance at all levels including strategic, operational and individual levels are moving in the same direction. Vision statements provide inspiration and make forecasts on where the organization should be in the future. Mission statement gives the organization character, identity and a purpose to exist. Etihad’s mission involve ensuring their guests enjoy their stay while traveling with the airline while their vision is to become the leading and most profitable airline in the Middle East by providing high standards in their air cargo services (Buckingham and Goodall 50). They also aim to provide the services in a consistent manner for their excellent customer service, transparency, connectivity and technology. Moreover, the airlines mission statement can be subdivided into four parts that interrelate including, purpose, strategy, values and behavior standards. The airlines values include delivering best practice, inspiring customers, caring about detail, acting positively and taking responsibility. The behavior standards are guided by the airline’s code of conduct that tries to capture a wide range of situations that employees are likely to encounter while working in the organization.  The purpose deal with the organization being, the strategy is related to the nature of the business, behavior standards represent the norms and rules of carrying out activities in the business, values represent the particular moral principles and beliefs that are associated with the behavior standards. The organization considers all the aspects of its objectives mission and vision statement to come up with the individual performance management targets that have a relationship with the operating unit and the objectives of the wider organization (Etihad Airways 22).

3. Performance Appraisals

Performance appraisal is a process that helps in identifying, evaluating and developing the performance of the employees in their work.  This tool assists in achieving the goals and objectives of an organization in an effective manner while at the same time benefits the workforce by providing guidance in their career, recognition and providing feedback. Etihad Airways’ use of performance appraisal processes is intended to align the individual goals of the employees with the overall strategic objectives of the organization. A vertical chain of dialogue is used in Etihad’s performance appraisal system, which provides tools for planning, monitoring and evaluating career development opportunities for all employees at all levels. The appraisal system is comprised of metrics, employee rating quarterly reviews, promotions, hires, appointments, developmental opportunities and assignments that assist in developing a diverse workforce. Supervisors and managers at Etihad Airways are motivated to develop career paths for all their employees including those who may have been underestimated or overlooked. The performance appraisal systems are continuously revised to develop a process that identifies significant organizational competencies that aid in developing staff and providing career support. Additionally, there is the implementation of a more systematic approach to allocating mission assignments. An organization’s appraisal system can be focused on an employee’s results or behaviors. The appraisals that are based on behaviors focus on the behaviors of an employee that are required for them to carry out their jobs properly. For instance, Etihad has a Code of Business Conduct that provides guidance on the ethical behaviors that employees should display while doing their work. On the other hand, performance appraisals based on results focus purely on the consequences of those behaviors (Etihad Airways 25).

4. Regular one-to-one discussion

Etihad Airways has enhanced frequent communication between employees and management, which it uses as a tool for performance management. The frequent communications assist in discussing new or changing objectives so that all the actions of employees are in line with continuing changes in priorities and situations. This involves supporting a collaborative and inclusive process that gives employees a chance to give their input in the organization’s affairs. The continuous and frequent communications also help in promoting commitment to the organization and ensure employees are aware of the changing environment as well as comprehending its evolving strategic plans. The one-on-one discussions ensure there is a feedback system through which positive and constructive feedback is passed on to the employees (Etihad Airways 1).

5. Employee Opinion Surveys

Etihad Airways carries out externally managed employee opinion surveys. These surveys help in highlighting Etihad Airline key initiatives in its people including training managers on effectiveness and having employee recognition schemes. In the year 2014, the employee survey results indicated that 93 percent of their employees are proud to be part of the airline’s workforce.  A similar survey also confirmed that 92 percent of Etihad workforce is willing to do more than what is required of them in order to push the success of the airline. Additionally, the airline had an overall employee engagement score of 76 percent, which was higher than the global average with 1 percent. Therefore, the employee opinion surveys act as performance management tools since they reflect the success of the airline in enhancing employee performance (Etihad Airways 1).

6. Training and Developing Employees

Etihad Airways is committed to training and developing their employees. This act as one of its performance management tools since it helps in coaching the employees. Employee coaching is essential in developing their skills and knowledge so that they can have better job performance. The airway’s management has implemented training and development programs that are necessary for improving individual performances. In the year 2014, Etihad Airways received the Distinction in Learning and Development award at the 2014 MENA HR Excellence Awards. In their learning and development strategy, the airline is clearly focused on enhancing their employees’ skills, progressing their career and performance management. Etihad has a two to three-year graduate management program that combines classroom education with on job training to develop futures aviation leaders in the UAE. Staffs at all levels also take part in training and induction sessions, for instance in the first quarter of 2014, 2,822 key employees and Abu Dhabi graduate managers attended such sessions. An Effective management program was also launched in 2013 to train managers placed in different countries on management practices of Etihad Airways. To prepare for future growth, the airline has established a Corporate Academy that encourages interactive and creative learning employing state of the art audio video facilities, wireless technology, and practical airline related environments.  It also offers virtual classrooms that enable staff to attend training sessions from any computer in the network.  The good training provided by the airway plays a key role in improving the quantity and quality of the organization output.

7. Performance rewarding

Etihad Airways performance management systems involve demonstrating the commitment to the welfare, safety, and well-being of all their employees. This is a significant way of rewarding the employees’ performance, which acts as a huge motivator increasing employee performance. Performance rewarding comprises ensuring that employees have personal development, pay that is linked to their performance and identifying their specific job performance.  In personal development, there are development principles that include personal involvement whereby individual employees are required to capitalize on the development for it to be valuable. The second objective is mutual objective whereby the development activities should be comprised of clear understanding and mutual objectives by both the employee and organization. In this case, universal opportunities are offered to each employee instead of selecting a few of the employee and giving the opportunities only to those selected.  The fourth principle is individual planning that supports that since development is individual, it should then be tailored in a manner that will fit the situation of an individual. Moreover, development should be tailored in a manner that enhances the performance of an employee’s current job and then makes them start preparations for their promotion.  The pay for performance principle is concerned with giving monetary rewards using a compensation system that is carefully designed to base the pay on measured performance (Moore 26). Etihad Airways has succeeded in using rewards as a tool for performance management. This is because just as the principles of personal development dictate, the airline commitment goes beyond providing competitive salaries and benefits that are in accordance with the UAE laws. It offers a wide range of other benefits including housing allowances, career advancement opportunities, education expenses, childcare services, companywide performance benefits, medical insurance and a generous leave policy. These benefits act as a reward for a wide range of employees and aid in their personal development in a significant way (United Arab Emirates 1).

Comparing Etihad Airways performance management tools to the state-of-the-art tools

The performance management tools applied by Etihad Airways do not differ in a major way from the state of the art tools that should be adopted by all organizations. An effective performance management system utilizes tools that are aimed at achieving a wide range of factors in human resources management. The tools in an effective system help in providing job specifications covering different types of jobs in an organization, and organization strategic direction and culture are properly aligned.  In this case, Etihad Airways has been able to provide proper job specifications to its employees that work in different areas. It has also adopted an organizational culture that is driven by performance.  A state of the art system is practical, can be easily understood at all staff levels of an organization and applicable. It should give an accurate picture of the performances of every employee. Moreover, it supports a collaborative process for setting goals and reviewing performance that is focused on having two-way communication between managers and employee. There should be an effective way of monitoring, measuring results and employees behavior (Al-Ali and Ahmad 4). The feedback provided through this kind of system is comprised of positive feedback for proper job execution and constructive feedback that pushes for improvements are given. Training and development opportunities that help in improving employee performance are provided. The employee work plans are aimed at supporting the strategic direction of the organization. There is clear communication between employees and managers on what they are expected to accomplish. There is continuous and positive feedback on the performance of employees. Employee accomplishments are identified and recognized. Areas of poor performance are identified, and plans are established to improve the performance. Staffs are well supported in their efforts to achieve work and career goals by identifying training needs and opportunities. The system should support administrative decision making about promotions, terminations, compensations, and rewards. The system should have a legal documentation that demonstrates due diligence for legal challenges that are associated with vicarious liability, dismissal (Moore 28).

Impact of performance Management system on the employees and their performance

The performance management systems have different impacts on employees and their performance. An effective performance management system encourages a culture of employee involvement. Thus, employees are more willing to participate in goal setting, decision-making or problem-solving activities, which leads to higher employee performance. The employees also become more labor productive such that they are able to give more outputs and quality services (Stephens 3). The mission statements that are used as a tool of performance management enable employees to develop a personal commitment to the organization. This way the statements motivate staff within an organization. Motivation can be referred to as the capability to transform one’s behavior or a drive that pushes one to act since human behavior is initiated towards a certain goal (Stephens 12).

A number of motivation studies carried out established that motivation led to positive employee outcomes such as productivity, persistence, and performance. Moreover, motivated employees become more self-driven and are more autonomy oriented than those who are less motivated. This implies that they are in a better position to accept responsibility when they are given opportunities to develop (Al-Ali and Ahmad 8). Motivated employees also become more involved and engaged with their duties, the work of their work mates when compared with employees with low motivation. Performance management systems help in enhancing the job satisfaction of employees such that they are well satisfied with their jobs and are able to increase their performance. This is because the systems help in initiating various HRM practices that meet individual expectations of the employees. Communication through the performance management systems ensures employees who may not only be aware of the objectives and plans of business are well informed and participate in their formulation. Feedback in the systems helps employees to learn the advantages and disadvantages of their work ensuring that they work on improving their skills and knowledge and finally change their performance. The pay for performance systems has a positive influence on employees in their performance. They also have an impact on the attraction and retention patterns of organizations, which affects the ability of individuals to perform. These systems provide monetary awards to individuals, which positively influences performance (Hunt 130).

An effective performance management system plays a critical role in encouraging collaboration, communication, and teamwork. The recommendations are based on five common themes of an effective performance management system. These themes are comprised of goal setting processes whereby an organization has to establish its objectives that are communicated through its vision and mission statement. The second theme is the feedback, review and appraisal theme that employs various processes and metrics to evaluate the performance of all employees, obtain feedback and appraise them accordingly. The system should also support employee development by identifying their various needs. This is followed by a strong reward and recognition practices that support employee development. The system should also have a theme that supports collaboration, teamwork and communication, which ensures the organization’s objectives are well communicated across the organization, and there is a proper alignment of the organizational objectives with individual objectives (Hunt 139).

How to improve Etihad Airways performance management system

Etihad performance management system can be improved in a number of ways. One of the ways to improve performance management systems involves ensuring that performance objectives and indicators are properly described. The managers of the airline should ensure that the objectives are set to provide the right representation of the whole range of duties that are performed by the employees. This is especially for the tasks that are performed daily that can consume a lot of time but are often ignored as major accomplishments. For instance, if a measure being applied for Etihad airline takes into consideration of the number of clients served by an employee only, then the quality of this service should be captured. In this case, a more valid measure of good customer service will assess both “what” and “how.” For example, a good client service could be represented by the number of clients served, quality of information offered as well as a 1 percent or less complaint rate (Al-Ali and Ahmad 17).

The second way that the performance management system can be improved is through continuous monitoring of the system. In continuous monitoring, both employees and managers should have regular meetings to assess the systems progress towards attaining performance objectives. Barriers that may hinder employees from accomplishing performance objectives will be identified, and feedback on the progress of relative goals will be shared. The performance management systems can also be improved by providing frequent feedback to employees. This will not only involve positive feedback but constructive feedback as well. The positive feedback will communicate the employees’ good performance in a timely, specific and frequent manner. Constructive feedback should also be given to employees to highlight the areas where they need to improve. The feedback should be descriptive and directed to their actions (Bamber 2). Continuous coaching is also another way to improve performance management systems of Etihad Airways. This will involve continuously evaluating employees’ training needs in order to ensure issues and concerns associated with their performance are addressed. The coaches should b have the ability to ask the right questions, have proper listening skills and be able to provide honest feedback. Another improvement is in the review process whereby in the performance appraisal systems, the organization should avoid assessment errors and rater bias. The scales that may be used for rating should have more reliability by making sure that, they avoid inflammatory language, use words that can be interpreted easily and use simplified rating scales (Bamber 3).

The recommendations for improvements required for Etihad Airways performance management system are based on a number of reasons. Firstly, the objectives and performance indicators used need to be SMART. This can be explained further to mean specific, measurable, attainable, and realistic and time bound. It is recommendable to provide positive feedback in a performance management system because it acts recognition for the effective performance of an employee, which is a powerful motivator. On the other hand, constructive feedback will assist employees in understanding their situation in relation to what is expected of them in their jobs or workplace behavior. Continuous coaching is recommended because it makes sure that the organization will benefit from improved employees contribution. In this case, proper direction, support and guidance is provided to employees in line with the upcoming needs of the organization. Managers will be able to identify employees strengths and weaknesses and work with them to recognize the methods and opportunities that will maximize their strengths and improve their weaknesses. The use of better rating scales in performance appraisal systems is to mainly avoid biases such as leniency or strictness bias, central tendency and same as me bias. Improving the performance management system will assist Etihad Airways in properly utilizing their employees capabilities to achieve their business objectives.

Works cited

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Ammons, David. “Getting Real About Performance Management.” Public Management (00333611) 97.11 (2015): 8-11. Business Source Complete. Web. 2 Mar. 2016.

Bamber, Greg J., et al. Up in the air: How airlines can improve performance by engaging their employees. Cornell University Press, 2013.

Buckingham, Marcus, and Ashley Goodall. “Reinventing Performance Management. (Cover Story).” Harvard Business Review 93.4 (2015): 40-50. Business Source Complete. Web. 2 Mar. 2016.

“Etihad Airways wins four coveted Abu Dhabi Excellence Awards.” ENP Newswire 2015: Academic OneFile. Web. 2 Mar. 2016

“Etihad Airways. (Cover Story).” Air Transport World 53.2 (2016): 22-25. Business Source Complete. Web. 2 Mar. 2016.

“Etihad Airways.” Etihad Airways (2015): 1. Publisher Provided Full Text Searching File. Web. 2 Mar. 2016.

Hunt, Steven T. “There Is No Single Way to Fix Performance Management: What Works Well for One Company Can Fail Miserably in Another.”Industrial and Organizational Psychology 8.01 (2015): 130-139.

Moore, Barbara. “Excellence In Performance Management.” Public Management (00333611) 97.11 (2015): 26-28. Business Source Complete. Web. 2 Mar. 2016.

Stephens Balakrishnan, M. (2011). Etihad Airways: reputation management-an example of the Eyjafjallajökull Iceland volcano. Emerald Emerging Markets Case Studies, 1(4), 1-17.

“United Arab Emirates : Etihad Airways Emirati employee wins Abu Dhabi Excellence Award.” Mena Report 2015: Academic OneFile. Web. 2 Mar. 2016.

 

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