The Urgent Order

Case Analysis – Performance Management and Appraisal

GROUP 8

Aditya Kumar (H14003)

Sangram Patnaik (H14043)

Sayonto Kundu (H14046)

Ashish Pareek (H14017)

Table of Contents

I) Situational Analysis ......................................................................................................2

II) Issues .............................................................................................................................5
III) Possible Solutions .........................................................................................................7
IV) Decision Criteria and Matrix ……………...………………………………………… 9
V) Recommended
solutions................…………………………………………………………………..10
VI) Action Plan...................................................................................................................10

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Executive Summary

The following case deals with an exigent situation faced by Heavy Movers Corporation which is
described as leading company which manufactures heavy equipment for material handling and
port and yard equipment. They manufacture the desired equipment on the specification of the
clients. In this particular case, due to flaws in the organizational processes and policies , there has
been an emergence of a situation which has repercussions for both the business perspective and
organization dynamics. We have done a situational analysis to understand the exact issues faced
by the organization and then we have developed a multipronged approach by filtering possible
solutions on the decision criteria reached by understanding the business perspective

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I) Situational Analysis
A) Business Model

B) Flow of Information and Resources

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C) Actual Flow at Planning Stage

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II) Issues
A) Planning
1) Improper Job Scheduling
i) Mr. Ramachandran is unscientifically scheduling the work orders in “consultation”
with the planning department and the section heads.
ii) It should be the primary responsibility of the planning department to schedule the work
orders.
iii) The improper scheduling is resulting into more idle time which in turn reduces the
productivity and also a mismatch between allocations of the resources and assigning
the work orders which might be leading to inter- section conflicts and potential delays
in fulfillment of orders.

B) Industrial Engineering department:

1) Old Standards: The actual time for most of the jobs is less than half of the standard time
for these jobs. This could be leading to social loafing and thus a loss of productivity.
2) Inability to impose standards for new jobs: The industrial engineering department has not
benchmarked standards for the new jobs through appropriate time motion studies. This
further leads to resistance from the workers to accept new standards for old jobs.
3) For example, suppose a worker has two jobs – Job A and Job B. Job A is an old job with
old standards while job B is a new job without any standards. Let both of these jobs take
50 hours to complete. The standard time for job A is 100 hours while job B is not accounted
for while calculating the PI for the worker. The worker will tend to utilize the remaining
50 hours to complete job B thus ensuring that he has a 100% PI . Imposing new standards
for old jobs will mean that now the worker has to do both of these jobs in the 50 hours for
which he is being accounted for. Thus, due to non-standardization of job B, he will not
want new standards being imposed for old jobs.

C) PMA for workers:

1) There is no quality component while calculating PMA for the worker although this is
included in the KRA of the executives.
2) No compensation in PI during exigent situations like he one described in the case. For
example, in the current situation, workers working in section 2 are losing out on PI due to
loaning of resources to section 1 to overcome the exigent situations. This could be a cause
for dissatisfaction, friction between sections and thus resulted in loss of productivity.
3) Capping of PI: Due to a limit imposed on the PI for workers to cover up their own
inefficiencies the management of the manufacturing unit is in turn promoting loafing
among the workers due to the already suboptimal work standards. This is also one the of
factors causing loss of productivity. Reaching 100% is not difficult for the workers. This
also has some negative impact.

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D) PMA for supervisors:
1) There is a mismatch between expectations from supervisors and workers while the KRA
for supervisors include productivity and quality, PI for workers does not include these
components.
2) Supervisors have managerial component while they have limited control over their
subordinates which lead to dissatisfaction

E) PMA for executives :

1) The performance appraisal cycle includes both normalization as well as a relative ranking.
The basic assumption of the normalization method is that there is uniformity in the
distribution of excellent average and low performers across all the departments. The
ranking method intends to rank executives across the departments and not within
departments. The second method is in effect rendering the first step redundant. This could
be causing dissatisfaction amongst the employees.
2) The Apex Committee is judging the potential of executives while their own supervisors
have no say in it. It seems infeasible for the Apex Committee to objectively gauge the
potential of all the executives of the company without consulting their supervisors.

F) VRS
1) VRS lists were created taken into consideration employees’ performance. But as the PMA
system was itself faulty so the list was also faulty
2) Management was not able to implement VRs for the workers because of the interference
of the union leaders.
3) Some executives who were in the VRS list were let off by the management as the leaders
of the union interrupted their VRS process as a result some good and deserving performers
had to be included in the list.
4) Because of the uncertain future in the company , many promising executives were leaving
the company
5) Loss of face in case the employees are not let off on account of VRS
E) Industrial Relations
1) Powerful Union: The powers of the union were unchecked and uninhibited which caused
them to interfere in managerial decisions. No steps had been taken to curb their power.
Their interference in the finalization of the VRS list was another case in example.
2) Inclusion of quality as a factor was being opposed by the union
3) Unwarranted interference of the union leader in management employee interactions and
issues. For example the employees who did not want to be part of the low performance list
approached Mr. Tripathi.

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III) Possible Solutions:
A) Planning
The planning department should have primary say in the scheduling of the jobs instead of
just being a consultative entity. Optimum scheduling of the jobs in consideration of the
plant layout and process constraints
B) Industrial engineering department
1) The new jobs must be appropriately standardized by time motion studies. The
unfamiliarity of workers with the new processes and overtime as the workers progress on
the learning curve overtime, the standard times for these jobs must be varied accordingly.
2) The standards for old jobs must be revised to account for workers familiarity with the
jobs

C) PMA for workers

1) Quality : The PI should include the quality factor as well which could be quantifiably
measured in terms of number of rectifications , rejections and rework
2) In exigent situations , the workers loaning resources to the other resources should be
compensated so as their idle time caused by unavailability of resources should not be
counted
3) There should be no cap in PI. But this would only work when the process is fully optimal
and all the standards are fully in place.

D) PMA for executives

1) Discontinue relative ranking process post after normalization
2) Immediate supervisors of the executives must be included in deciding the managerial
potential of the executives

E) VRS
1) Delink VRS scheme with the present performance system .Either link it with overhaul
PMA system or link it with LIFO as per ID Act
2) The influence of the Union must be checked to control to keep the sanctity of the
managerial decisions.
3) Induce confidence among the employees that no performers will be cajoled into accepting
VRS
4) Keep the proceedings of the VRS scheme confidential so that even in case where
employees on VRS list are retained they don’t face loss of face and continue to serve
honorably and with confidence.

F) Some other Solutions:

1) Immediate sacking of Rabindra who was assistant general secretary of the union and
kurien with immediate effect which will give a stern warning to the union that no
indiscipline will be tolerated.
2) Introduction of contractual labor over the years and freezing of hiring permanent workers
will reduce the power of the union

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3) Channel of communications : Improvement of Channel of communications between the
intra sections and laborers and executives

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IV) Decision Criteria:
1) Cost: Due to competitive pressures the company has to optimize cost. The lower the cost
of operations, the lower the price the company can bid bettering the chances of
converting a deal.
2) Productivity: The efficiency of the operations depend on the productivity of the work
force.
3) The efficiency of the plant will help the marketing department in applying for more
tenders and will result in meeting the deadlines of the customers.
4) Quality: Quality is of paramount importance because of the fact that the machinery being
supplied is critical to the operations of the customers.
5) Acceptance: The existence of organized workers means that the acceptance of the
decisions by the union is important.
6) Retention : The executives are leaving in large numbers which affects productivity,
operations and margins because of cost of new hiring
7) Compliance : Insubordination and indiscipline of any sort should not be entertained

Criteria
Decision Cost Productivity Quality Acceptance Retention Compliance
Scheduling by Planning
Department
Standardization of new jobs
Revision of old standards *
Inclusion of Quality in PI** ?
PI compensation in exigent
situations
No Cap on PI***
Scrap Relative Ranking
Managerial Potential by
Supervisors
Delink VRS system
Check influence of Union
Keep proceedings of VRS
confidential
Increase contractual
employees
Sack Kurien and Rabindra
Channel of Communication
Decision 3 works only when decision 2 has been taken.
Decision 4 works only when decision 2,3 have been taken.
Decision 6 works only when decision 2,3 have been taken.

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V) Recommendations
1. Based on the above decision matrix we recommend all the decisions in the matrix. We
recommend a multi-pronged approach but also to ensure such situations does not arise in
the future. The decisions that we have arrived till so far will improve the overall
processes and management practices in the company.
VI) Action plan
1. The immediate step is to sack both kurien and Rabindra to ensure compliance and a
signal across the board that no indiscipline will be tolerated.
2. The next step should be to implement decision 1, this may require appropriate training to
the employees in planning dept. So we are looking a possible timeline of 1 month.
3. The industrial engineering dept. should establish standard for new processes and revise
the standard for old ones. So we are looking a possible timeline of 1 month.
4. The recommendations for inclusion of quality factor in PI and compensation for PI in
exigent situations will require the possible timeline can’t be contemplated but we expect
that the union acceptance of the quality check will be higher now that the flaws in job
standard have been taken care of and thus there will be more control of the workers on
their PI.
5. The flaws in the PMA process and VRS system can be taken care of immediately but can
only be applicable in the next appraisal system.
6. The neutralization of the union through the improvement of communication channels and
the out sourcing parts of the operations will require some time which can’t be
contemplated right now.

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