INFLUENCE OF SOCIETAL VALUES TO CHARACTERISTICS OF PERFORMANCE APPRAISAL PRACTICES: ACASE OF AMERICAN AIRLINE
A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR AWARD OF THE DEGREE IN ( ) FACULTY OF ()
Table of Contents
CHAPTER ONE.. 3
1.0 Introduction. 3
1.2 Research Questions. 6
1.3 Methodology. 6
1.4 Conceptual Framework. 8
1.5 Reflection on Research Approach. 9
1.6 Significance of the Study. 10
2.0 LITERATURE REVIEW… 11
2.1 Empirical Review.. 12
2.1.1 Performance Appraisals. 12
2.1.2 Societal Values and Performance Appraisal Systems. 14
2.1.3 Impact of Emotional Values on Work Performance and Managerial Practices. 15
2.1.4 Characteristics of Societal Values to Individual Performance. 20
2.1.4a Individualism/ Collectivism as a social Value. 22
2.1.4b Societal Values and Organizational Performance. 23
3.0 CHAPTER 3. 25
ANALYSIS AND DISCUSSION.. 25
4.0 Conclusion. 29
5.0 Recommendation for future Studies. 30
6.0 Reflection and Learning Statement 31
Bibliography. 32
CHAPTER ONE
1.0 Introduction
Employee appraisals are systems used by managers in conducting job performances, developing a fair payment system and acting as a basis for promotions. Appraisals are also helpful in making employees to improve on their performance alongside acting as a guideline for the management to in devising and reorganizing job functions. In addition, timely appraisals reveal inefficiency in business operations that should be eliminated. Latham and Kenneth (2011), explain that effective appraisal systems in an organization integrate goals to help in improving the employee as well as the overall organizational performance. This is achieved through timely feedback and training opportunities to the managers (13).
In any societal context, business organizations have to depend on the performance of their workers for sustenance. Therefore, how the management conducts performance appraisals becomes a critical issue in any serious business entity. Studies on management indicate that practices in performance appraisals are defined in the manner through which the performance criteria are defined, the approach used in performance interviews and the level of employee involvements (Levy, and Williams, 2011, 905).
In different cultural contexts, performance appraisals are conducted according to such specific cultural contexts. For instance, the cultural drive of individualism or collectivism is closely related to performance appraisal practices that are aimed at self-perception, since the feedback, which is related to another individual, is inherently invaluable. This is an issue of social relations that is related to an individual’s ego. According to Early (2009), employees look forward for positive feedback concerning their achievement and always motivated when they are appreciated for their positive performance. On the other hand, collectivists look forward for feedback on failures since according to them, recognition of an individual through success or positive achievement is the basis of idiocentric self-concept. Apparently, the motivation in collectivism in failure feedback may be beneficial in improving the organizational welfare, which is the essence of allocentric concept of self-interest. This behavior of collectivists may be attributed to their aspect of evading failures or avoiding blame for such failures (168).
This study is focused on evaluating the influence of societal values to performance appraisals at American Airlines. American Airlines or simply AA is considered the second largest airline in the world (Kons, 2006, 5). The Airline has experienced changes recently in its management systems including the human resource department. In effectively understanding the change patterns in this entity, it is paramount to begin looking at the root cause of societal values and the organizational culture (Hofstede, 2009). Presently, the influence of social values on management has been the focus of social sciences. It is therefore the purpose of this study to evaluate the type, nature and changes happening in the management of labor and the relations of these changes to conventional cultural orientations in this organization.
Key Words: Societal, values, culture, Performance Appraisals, case study
1.1Research Problem
Studies have clearly indicated that management is related with social culture. In identifying the main factors that contribute to the variations of the performance assessments in different organizations, it is hereby, argued that the worker’s societal values are significant in explaining such differences. It is acknowledged that economic, political systems and organization culture do influence the societal values of a particular company workers, though this may not be generalized. This is because; the political systems prevalent in a nation may change dramatically and faster. For instance, there has been an experience in economic changes in America since 1980s. A factor which had had an impact on the cultural values of many organizations, individual relations, and intrinsic motivations of workers. These forces may either operate in form of suppressed values by individuals or groups of people. Redding (2010), for instance established that Chinese people held some common values and belief systems irrespective of where they were or worked (289). On the other hand, Adler, (2007) explains that orientations of social values are particularly the complex relation of attitudes, values and behaviors, which organization members display. Individuals may express normative qualities and culture by way of their values that are related to humanity and their perception on the world in general. Consequently, these may influence their attitudes and general behaviors in any given setting. The consistent alteration of personal or group behavior may subsequently influence the societal culture in an organization (345). This is why the researcher was interested in finding out how these factors influence performance appraisal systems in organizations.
In particular, the study was interested in finding out the influence of societal values on the features of performance appraisal practices, the contribution of the fit level between the societal values and features of PA practices to performance as indicated by the turn over, absenteeism, service quality and innovations. The researcher evaluated the relation of societal values and performance appraisal practices at American Airlines, one of the leading airlines in the world.
1.2 Research Questions
This research will be guided by the following research questions
- What are some of the societal existing at American Airlines in employee management?
- To what extend does the societal values influence performance appraisal at AA?
- How do the societal values influence the performance appraisals at AA?
- What can be done to leverage the effect of societal values to favor company performance?
1.3 Methodology
In this study, qualitative and desk approach was used in finding common literature in a partial sampling of the related literature that dealt with the research objectives. Most of the literature used in this study was accessed from www.altavista.com, www.infoseek.go.com, www.google.com and other peer-reviewed journals such as Academic Search Premier, JSTOR and Business Source Premier including the Airline’s Websites. These journals were very helpful in exploring the link between societal values and performance appraisals in organizations. The technique employed in finding these journals included using key search words associated with the topic in the identified websites and databases. Once the articles were accessed, they were stratified with regard to the questions, which they addressed. Afterwards, analysis of the main themes was conducted by relating the findings with the operations and PA practices at American Airlines. The results indicate a positive linkage on the influence of societal values and performance appraisals in organizations.
1.4 Conceptual Framework
The conceptual framework indicates that these factors: attitudes, values, behavior and culture are all interrelated and influences employee performance in an organization.
1.5 Reflection on Research Approach
Qualitative desk research is a research method where the researcher obtains all the required information through the internet. This type of research is also referred as secondary research. It mainly involves data collection, summarizing, synthesis or collation of the existing resources instead of conducting a primary study where information is obtained from research samples, subjects, objects, or experiments. This research technique is considered as a cheap way of gathering information in comparison to fieldwork. In desk research, the main costs associated with telephone expenditure, directories, travelling, time and design of research instruments are eliminated. Its effectiveness is derived from the fact that its cheap and quick to obtain the required information. However, one of the weaknesses of this research technique is that it may lead to a waste of resources, money and time especially if the one conducting the research doesn’t have adequate knowledge on how it is performed (Crouch, 2008, 19). Moreover, the information may not be congruent to that particular moment.
Concerning this case, the researcher found sufficient and credible information regarding the study topic on the internet. There was also adequate information on societal issues facing employees at American Airline, which were found on the company’s websites. In acquiring relevant information, the researcher employed two approaches, one is that he used different search engines as www.altavista.com, www.infoseek.go.com, www.google.com, for the modulate search. In the course of the study, he had to refine the research words and technique in order to obtain relevant and promising information. He also had to follow the study guidelines in order to reduce the time and efforts used for searching and the entire study.
1.6 Significance of the Study
Research on cultural dimensions of performance appraisals in organizations is apparently limited. It is the purpose of this study to fill that gap by performing a case analysis using the American Airline as the focus. Some literature has affirmed the universality of managerial practices, (Pfeffer, 2008, 210). However, this research holds the view that there ought to be no universal practices that could be suitable for policies and practices relating to performance appraisals. This owes to the inherent nature of dealing with workers whose perceptions, socialization, and self-identification are programmed culturally (Hofstede, 2009, 113). For instance, a research done in China by Pye (2005) established that the social aspect of Confucianism was quite influential in instilling individual HRM concepts including their involvement in performance appraisals. The present research will add to the existing literature on management and performance appraisals. The information will therefore be beneficial to scholars and other researchers. In addition to these, the research will issue policy recommendations to the management not only in American Airline but other firms in America and globally.
2.0 LITERATURE REVIEW
The relevance of understanding on how culture contributes to PA has gone higher and relative to globalization. Global firms may benefit from their workers who are derived from different backgrounds. The benefits that may accrue from workers from a diverse background may include but not limited to areas of expertise, skills, and beliefs. A background may contribute to the worker’s collective knowledge and experience, and make the organization to be enriched. Apparently, a diversity of the workforce necessitates that more emphasis is put towards designing strategies that can establish common ground for these workers on the main issues of an organisation. In addition, it also assists them in addressing the issue of societal diversity (Adler, 2007, 177).
Some scholars have classified societal values in different levels. However, some of the common themes derived from such definitions are that societal cultural values are shared among society members and passed on from generation to generation. These societal values are essential in shaping the perception of individuals concerning their world and environment. In applying these features to organizational theory, various studies have posted that the management practices can better be predicted through their societal values (Aycan, et al, 2006, 220). In other words, the beliefs and behaviors of members of any organization are shaped by their social values.
According to Janicijevic, (2012), the content and nature of an organizations culture have an impact on its operations and the management style. This culture is responsible for shaping the behaviour and attitudes of the members in that particular organization as well as the components of management and organization. The culture prevalent in an organization can assist the leaders to design effective strategies of performance appraisals that can improve the performance of that specific organization (290).
2.1 Empirical Review
2.1.1 Performance Appraisals
Employee appraisals are systems used by managers to conduct job performance, develop a fair pay system to organizational workers and acting as the basis for promotions. Appraisals help employees to improve their performance and act as a guideline for companies to devise and reorganize job functions. In addition, timely appraisals reveal inefficient business practices that should be done away with. As reported by Latham and Kenneth in (2011), effective appraisal systems integrate goals to help in improving the employee as well as an organizational performance. This is achieved through timely feedback and training (119).
When appraisals are competitively done, they improve the overall effectiveness and efficiency of a company performance. Through the functional areas of performance appraisal systems, productivity is increased in the company. Appraisals also serve an administrative purpose for organizations through providing an orderly means of increasing wages and other rewards. The administrative function also serves to delegate authority to effective and efficient individuals. Appraisals also supply managers and appraisees with information about their strengths and weaknesses. This helps managers design strategies that will help in building on the strengths of the staff and eliminating weaknesses in order to improve productivity (Fletcher, and Konovsky, 2009, 116). They also assist managers to improve their own performance and guide them on the kind of targets to set for their employees.
The management and workers all benefit from successful performance appraisals. The employees can benefit in a number of ways, for instance, they realize and know what is required of them and therefore, will be able to set the goals and objectives in their work. They also get to discover their weaknesses and failures and therefore, be in a position to improve. Additionally, performance appraisals can be positive in providing individual feedback on their performance and in turn, the workers could be able to give their opinion on various company issues. Consequently, through the feedback generated from the appraisals, the management are at a better position in improving individual performance and therefore achieve organizational goals (Griffin, 2012). According to Griffin, performance appraisal is a tool that has been recognized for improving performance and building both job satisfaction and organizational commitment. Its impact on performance may be attributed to its capacity in enhancing communication effectiveness, its role on clarity, merit pay and administration, expectancy and instrumentality estimates, and perceptions of equity.
According to Cleveland and Murphy (2005), individual based performance appraisals are applied by various organizations in US through various ways. These may include: employee development and feedback, administrative decisions such as, merit pay, terminations, promotions and so on. PA is primarily concerned on offering employees feedback on their performance so that they could improve. It can therefore, be construed that PA is consistent with the principle of equity, where workers are rewarded in accordance to their performance. Additionally, rewarding high job performance will strengthen employee incentives for all workers to achieve high job performance in reaping such rewards (445).
The merit systems where individual are rewarded as per their performance is quite popular in America. In addition, they depict the societal values prevalent in the country. In enhancing competitive advantage, firms are increasingly applying PA as an effective instrument in planning and management of human resources. Murphy & Cleveland, (2005) explains that many organizations have used PA in enhancing their workers and employee performance. Nonetheless, the increased trends in multination operations and globalization have raised an interesting question concerning the level at which organizations found in states with different cultures implement their PA practices and its influence, which such programs pose to the performance outcomes.
This study is focused at bridging this literature gap and in particular the influence of societal and cultural values to implementation of PA programs and their characteristics in assessing employee performance. We also evaluate the influence of PA programs on organizational performance in terms of turnovers, absenteeism, productivity, quality of service, and rate of innovation. To state it differently, the study is purposed to assess the interactive influence of practices in performance appraisals and societal values on the performance of organizations. The study of these issues will be of significance in building a typology of PA characteristics and their impact on a variety of different cultural contexts.
2.1.2 Societal Values and Performance Appraisal Systems
A study on human resource management conducted by Aycan (2005) found out that there were many theories, which had been put forward concerning the determinants of human resources practices in organizations. However, it is only a few of them, which are directly related to social and cultural settings. Despite this aspect, there is an increasing evidence indicating that societal values do influence the HR practices adopted or likely to be adopted by an organizations and also the features of such HR practices (Pye,, 2005, 456).
House et al (2009) found out that the influence, which societal values pose to management actions, and behavior was quite significant. He noted that the societal values, which are also referred as national values greatly, affected an organizational performance (38). Barnett and Lee (2008), explain that operations of any particular firm is based on a given social culture and therefore, impacted by it (409). A study done by Lee and Barnett on two banks in America, one of Taiwan origin and another of America origin realized that the societal cultures of the bank’s nationalities was stronger, typically superseding the culture of the individual organizations. The researcher explained that societal values accounted for more than half of the discrepancy in the culture of the organization. However, the accountability to the variance of the organization’s practices accounted only for 10%. According to the researchers, the low percentage was attributed to methodological factors, and that there was a need for a careful designed research to provide more insights on the relationship of managerial practices and societal values.
2.1.3 Impact of Emotional Values on Work Performance and Managerial Practices
In recent years, the Industrial restructuring that is being experienced not only in the Western World but in many parts of the world has typically encountered a shift in the employment sector from agro- business, manufacturing to service industry. This shift has regenerated into contacts that are more personal with professionals and clients alongside the establishment and development of new work requirements in work places. Owing to these new requirements, many of these companies have come up with standard policies to make employees express proper workplace values while performing their duties.
These work policies across the various occupational areas are not the same. For instance, it is a requirement that retail employees cultivate values related to being friendly and cheerful when interacting with their clients for an enhanced service delivery, and to encourage more visitations. On the contrary, security officers or detectives may express anger to specific people in order to make them comply with their orders or acquire confessions from criminals. Other professionals such as judges have to display the aspect of neutrality to avoid their emotions influencing the proceedings or outcome in a trial. Apparently, medical professionals must be neutral in ensuring objectivity in their profession.
According to Australian OHS policies, it is the duty of employers to making sure that their workplaces are safe. In particular, they are required to take practical steps in identifying, assessing and controlling anticipated risks that can reduce the productivity of employees. For instance, section 28 of the 1995 workplace safety and health act of Australia placed particular conditions to employers to make sure that their workplaces were safe and healthy to their both employees and clients. The judicial systems in the country have adopted a perception of what constitutes an injury. According to the courts, a psychological injury to an individual may have both physical and mental implications. Mental implications may be in the form of posttraumatic disorders and so on. On the other hand, physical implications may be with regard to weight loss or gain, heart diseases, high blood pressure and so on. However, the courts do not necessarily require the evidence of a psychological injury in order to implicate organizations that breach their care duty to clients and employers. The failure to handle employees and clients affectively and provide a safe environment is enough evidence that can subject organizations to prosecutions (NSW Court of Appeal, 2002).
Given the fact that individuals experience different levels of emotions in a given day, emotional values that are required in work activities and those that are felt by the individual may not always align with one another. If the mismatch of real and required emotions occurs, a worker may choose not to follow the stipulated display policies and portray real emotions especially in encounters that appear to be stressful. The resultant emotional deviance may negatively affect the wellbeing of an individual. This is more particular when the worker is well aware of the display rules of his or her profession. In some instances, a discrepancy may happen between the felt and expressed emotions, resulting into an emotional dissonance, a factor related to negative psychological consequences to workers (Zapf, 2002, 236).
Since emotional labor may result into burn out, and draining of emotional resources, many service firms in several parts of the world have incorporated recovery mechanisms in their HR management for the purpose of employee welfare and health in the course of work. Recovery is a process by which the emotional functioning of an individual returns to normalcy. Psychological and emotional disturbance on the part of employees may be depicted through disturbed sleep, low fatigue and psychological detachment while not in work. Failure to succeed in gaining recovery for an individual will ultimately affect his or her well-being and may work in a state, which is suboptimal. Natter and Sonnentag, (2004) post that successful recovery for workers is realized when their wellbeing improves, and the resources derived from the strain process are restored. Many organizations have been mandated to incorporate in their human resource management systems, off work programs and activities such as, parties, gym sessions, sports and so on. This is meant to assist employees to regain their emotions, and recover from stress associated with their works.
Karabanow, (1999) explains that employees in the service industry have to control the aspect of emotional display and their own emotions to establish an environment where interpersonal interactions between their clients and their employers will occur. Debt collectors for instance are trained on how to employ appraisals in detaching themselves from debtors (Sutton, 1991, 252). Sutton articulates that the basic obligation of employees in offering services that are of high quality is not to make material goods, but to come up with action, speech, and emotion which depict the individual’s willingness in being there purposefully for the client (235).
The mismatch between felt and expressed emotions (for instance employees who are required to display cheerfulness though they may be angry) may be an impediment to the EL process in an organization. This makes it crucial for organizations to recruit individuals with personalities and attributes that match the specific area. This is the reason why many organizations administer personality tests to would be recruits as well as the current employees in measuring the affectivity of their traits. In this case, job seekers and employees who depict high sense of affectivity in positive ways are considered as befitting the organization. Relating the individual to the emotional, psychological and social needs of their work has happened to be a cost saving endeavor for such organizations. This is because individuals whose social and emotional traits happen to be aligning with the needs of the job are likely to stay in the job much longer as they are satisfied with the job (Sutton, 1991, 252).
The discrepancy between displayed and felt emotions may be a stress, which some employees have to contend. For instance, feeling a sense of angry but faking happiness to meet the work requirement may be stressful. In most cases, this aspect may result to in- authenticity feelings and emotional dissonance among the workers. This spells the reason why many organizations around the world have found the aspect of training their employees a crucial and valuable factor.
Faber, (2005) observes that the relevance of effective performance appraisals by use of emotional labor is portrayed by the existing perceptions concerning the quality of services. While demand for workers with capabilities in offering services of high quality is consistently increasing, there has not been a clear definition regarding what constitutes quality services. According to Faber, service quality constitutes an elusive and abstract construct owing to its three characteristics that are unique to services, these includes the nature of inseparability to both production and consumption, intangibility and heterogeneity (13).
Faber goes on that the current events with regard to regulations in Australia labor markets for instance, are aimed to control the activities of individuals or organizations engaged in production of goods or services. On the opinion of Flanders, industrial relations constitute the study of organizations with regard to regulation of jobs through both internal and external factors. The external sources of regulation are aimed at protecting employees from influences of a market that is largely unregulated so as to reduce confusion between internal regulation forms, employers and organizational behavior.
A study by Doniel on “the role of emotional labor needs and work resources” was meant to determine the impact to burn out by which emotional labor causes. The study also measured the interactive influence and potential additive of job resources such as social values and support, job control and rewards. The sample used was 208 service workers in the public sector. Findings from regression analysis indicated that the display regulations, which many organizations in Australia had incorporated, required that employees express positive emotions towards clients. However, the research noted that this requirement did not result into a difference in emotional exhaustion while the requirement in emotional display which required that an individual’s negative emotions to be suppressed were more of demanding emotionally. Provision of work resources were consistently related to lower emotional exhaustion. The study also revealed that employee’s colleagues were quite significant in assisting him or her to attenuate the negative influence of emotional demands. Owing to these findings, the study recommended that the management of organizations to encourage teamwork among its employees. In addition, organizations are also required to specify expressions of work related emotions and set values that are appropriate to their employees. For instance, job resources ought to be provided to employees at risk of burn out to facilitate the reduction of job stress and the related burden (Doneil, 2013, 1).
2.1.4 Characteristics of Societal Values to Individual Performance
Hofstede and Peterson, (2009), explain that there are four main cultural values at a given cultural level. These are individualism/collectivism, power distance, future orientation and avoidance of uncertainties (78). The research done by these scholars found out that societal values predicted the management practices and organizational practices. Societal values do influence the manner in which crucial human resource practices of PA are conducted in various organization and states.
The social values adopted by an organization and its culture determine the control method selected by leaders with regard to employee’s behaviour. If the leader employs a control method that proves to be insufficient, it will result into decreased efficiency in control procedures. In addition, it also interferes with an organization’s climate and stakeholder relations. In short, an organization culture determines the control strategies used by the management and that the type of control strategies used will determine the outcome of control measures. The effectiveness of control measures will ensure enhanced performance and therefore create a competitive advantage.
Reginato and Guerreiro, (2012), conducted a study to establish the correlation between the management systems, organizational culture, and its environment. The survey was conducted on 109 companies in Brazil. Data was collected through a structured questionnaire that was presented to the managers of the selected corporations. Data analysis was done by means of multivariate structural modelling equation. According to this study finding, there was a positive correlation between an organization and its external environment including the societal values. Additionally, an organizational culture was the determinant of the management control to be applied in a particular firm. This translates that an organization’s external environment as well as its established culture influences the control, planning, and implementation of company programs and the management strategies. Stated differently, the management would rely on social values that are existing in that organization to strategize on the control methods including PA, to be applied.
However, it is essential for organizational leaders to be keen on the dynamics of external environments. This is because external aspects such as social factors, political, legal or technological issues may not always be predictable and may be a source of threat to the stability of the firm. The leadership qualities will determine stability of these firms even in the case of such uncertainties. Stated differently, organizational leaders who are capable of monitoring the external dynamics accurately will enable the company to excel even in times of uncertainty. This presents the reason why some firms thrive even in the case of economic downturn (Reginato and Guerreiro, 2012), Any particular organization wishing to carry out its mission successfully must harbor an enhanced internal structure and systems, including establishing appropriate social values to be adhered by all its employees in order carry out its operations effectively.
2.1.4a Individualism/ Collectivism as a social Value
The aspect of individualism or collectivism is the level whereby, the societies value the opportunities and rights of individuals in relation to the success of the organization as well as their loyalty to the group. In societies that embrace collectivism, it is expected that individuals become subordinate to the success of the organization where they are working. Hence, employees with values of collectivism may tend to evade PA systems that may be individualistic because of the perception that these may affect some departments, their own morale or the entire organization performance (Vallance, 2008, 79). In contradiction, in societies that embrace individualism, there is likelihood of organizations in such places to establishing PA systems that are individual based in assessment of their employee performance. Owing to these individualistic values, there is a likelihood of these PA systems being influential in policies relating to merit pay, and career path development of employees in relation to their performance (Aycan at al 2006, 117). Apparently, organizations that embrace collective values may implement PA systems that may be of benefit to all workers. These may include human resource management; identification of the workforce needs as well the worker’s development.
2.1.4b Societal Values and Organizational Performance
Understanding the fitness level between societal values and PA systems is a crucial factor in understanding how such systems influence organizational performance. In essence, for those organizations that has adopted the PA systems that relate to their culture, it will subsequently results into increased indicators of performance. These includes, less absenteeism, innovation, service quality, higher productivity and less turnover. On the other hand, if the adopted PA methods in the organization are not consistent with their societal culture, this will subsequently result into a decrease of performance indicators (Jaeger, 2010, 338).
House et al, (2008) postulate that many organizations adopt PA systems which are focused on future goals of the organization. These may be in terms of (identifying the development needs of the workers, human resource management as well as work management). In addition, there is likelihood for firms to assess a higher number of employees especially if they are grounded on future-oriented societal values.
Kemp, and Dwyer, (2001) observes that the social values in an organization is crucial as it is responsible for sustaining the performance of that specific organization. According to these authors, the reason why many organizations fail is attributed to their ignorance of social values and culture in general as a crucial elements when performing performance appraisals and create a competitive advantage over other firms (79). These organizations fail because the leaders do not promote appropriate PA practices and other ideals that can help improve the company performance. Using Browns, (1998) articulation, the author argues the management performs PA practices based on an organizational culture. As such, it should be their responsibility in identifying and implementing appropriate organization culture and social values as it is essential in determining the performance of that organization.
3.0 CHAPTER 3
ANALYSIS AND DISCUSSION
This research was interested in two issues, the contribution of societal values to PA practices in organizations and the interaction aspects to the PA practices on performance indicators of organizations. In the perspective of American Airlines, the finding did support the hypothesis that societal values influenced the characteristics of PA practices. In American Airline, the future orientation influenced PA practices in that there was high number of employees who were subjected to PA. Another factor was the avoidance of risk, which played a role in the high number of employees and management subjected to official PA. Apparently, high collectivism as societal value was a factor, which made the management to focus on PA as a development method. Because of the management focus on employee welfare, the employees looked at the PA practices positively and contributed to devising the PA strategies.
Before explaining on the performance appraisals in American Airlines, it would be important to explain the company’s goals and mission. The company’s mission is establishing a secure and safe airline industry, offer international services, create a participative and open work culture that looks forward for positive changes, innovation and development minded, offering opportunities and security to all workers and offering regular returns to the group’s shareholders (AA, 2013, 1)
Among the societal cultures maintained by the corporation includes: achievement, safety and diversity, which are rewarded and embraced on each particular day. This attitude and mindset is what has set apart the airline from its competitors, enhancing performance, quality and long-term competitiveness of the organization. He company’s history is wide and distinguished. Its commitment to employee’s welfare has regenerated into these workers being dedicated and loyal to the organization. The company is keen on providing the reasonable compensation and benefits to its workers in addition to providing opportunities and career development to them.
The management at American Airline has a strong belief that commitment and dedication of its employees is the key to high performance. It therefore encourages this trend by rewarding employees who do well under various incentive plans including customer service and financial performance. In customer service, employees are offered customer experience every month, if they reach certain specified goals. In financial performance, employees are offered an annual performance bonus if the company achieves an overall earning of more than 5%. The company is also keen to involve its employees on its PA practices where they are encouraged to provide their opinions and feedback concerning the same. The management believes that face-to-face communication with its employees is quite effective in exchanging ideas (AA, 2013).
In an effort to protecting the interests of employees who are not unionized, the company has set up various advisory boards for groups of employees such as AAdvantage, Airports agents, premium service agents, customers service agents, weight and balance agents, and premium service agents. These boards conduct regular meetings for employees to share information with their colleagues and provide the management with their input. These are very helpful in designing means of appraising them. The societal values that comes into play in the perspective of American Airline is therefore, dedication, commitment and collectivism where each employees is required to be involved in the overall company performance.
In 2012, American Airlines contracted Softscape to devise and implement the performance appraisal systems. This is after realizing the inefficiency of the previous PA systems. According to the new PA structure, the PA was to be conducted on all the 300 managers at the firm. The chief goal of contracting Softscape was to incorporate the new PDF systems, which is established by use of the technology of achievement Plus developed by Softscape Company. This technology of performance appraisals had been incorporated in more than 500 other firms across US and this one of the reasons that made the management to justify its adoption. The systems had been acknowledged to facilitating the 360 feedback programs, the performance and other human resource functions at the firm.
Watkins, (2012) explains that the human resource department at American Airlines offers high priority of PA practices that are aimed at increasing the competencies and skills of its employees. The PA application in this firm is employee centric. In other words, they involve their workers in matters relating to PA practices. This in turn has affected positively on employees in terms of being satisfied and maintaining loyalty to the organization. This offers the reason why there are low turnovers and absenteeism at this entity.
The incorporation of Softscape’s technology on PA was strategic since, it enables employees to be the drivers of PA process and not the HR department. In addition, the management is consistently mandated to update the development and coaching of PA practices on a regular basis.
Before that innovation, American Airlines was actually struggling to make an impressive performance. The road to finding a technological substitute was not an easy one. It has brought sense into an earlier system which had caused inflation of grade and assists the executives to find effective managers who in turn find and retain talented workers. Low achievers are not treated harshly, rather, they are accorded kind treatment such as being labeled as the less effective, being given appellation and specific coaching. These features were less noticeable in the past years. These changes are quite crucial for an organization that is trying to change its structure from a six sigma to emphasize on innovation. This aspect according McGregor, (2013) will enable the corporation to avoid risks and failures (2). In March this year, the company evaluated all its 3000 managers on various traits such as external focus, imagination and on the company’s strategic goals.
Apart from these innovations, the airline has also come up with the main Survey Enterprise Information management solutions in order to come to terms with its heavy operations and high number of workers. The company has also leveraged its key strengths such as easy utilization and organization wide scalability, which obtains data from the entire organization. Beyond employing enterprise wide solutions in data management in obtaining employee and customer feedback, the company which has approximately 85,000 workers at the moment has ultimately more HR needs. Therefore, the use of key surveys will make it easy for PA practices and other information gathering.
The ease of use of the key survey and the advanced technology enables AA to establish a diversity of surveys. The company also performs more than eighty surveys in its various departments to obtain particular innovation. These surveys which are quickly created offers the company important feedback not only on employee performance but also other equally important areas.
With regard to the relation of societal values and PA practices on the performance indicators of AA, the result were that the fitness level between societal values PA practices adopted by the organization in the study was crucial and contributed to the organizational performance. Similarly, the development effects based on PA practices are depended on orientation of societal values and time.
4.0 Conclusion
This study has confirmed the hypothesis that societal values do influence the characteristics of performance evaluation systems in organizations. That is, if they happen to be adopted in such organizations. As in the case of American Airlines, societal values play a part on who was to be evaluated (service personnel, managers, experts and so on). It also played a role on who was to evaluate (executives, peers, supervisors, customers, subordinates and so on). The executives evaluates the managers who in turn evaluate the employees. It was also significant in determining the purpose of such PA, identifying the training needs of employees and designing of merit systems. Further, the study has shown that societal values predict the processes used in organizations and management behavior and practices.
This research was interested in two issues, the contribution of societal values to PA practices in organizations and the interaction aspects to the PA practices on performance indicators of organizations. In the perspective of American Airlines, the finding did support the hypothesis that societal values influenced the characteristics of PA practices. In American Airline, the future orientation influenced PA practices in that there was high number of employees who were subjected to PA. Another factor was the avoidance of risk which played a role in the high number of employees subjected to official PA. Apparently, high collectivism as societal value was a factor, which made the management to focus on PA as a development method. The commitment of managers on employee’s welfare was also significant in this perspective since it increased their commitment and dedication to work.
With regard the relation of societal values and PA practices on the performance indicators of American Airline, the study found that the fitness level between societal values and PA practices adopted were crucial and contributed to the organizational performance. Similarly, the development effect based on PA practices is depended on orientation of societal values and time.
5.0 Recommendation for future Studies
This study only focused on one function of HRM, performance appraisals. However, the study has not covered HRM in a strategic view. (McMahan and Boswell, 2010) explains that it is systems and not just single practices which can explains the performance of organizations. Designers in future research should aim at improving the present study by configuring the HRM practices. For instance, they should study the configuration of such aspects as selection, training, performance evaluation, and merit based compensation to shed more knowledge on the effect of strategic HRM in relation to social values.
6.0 Reflection and Learning Statement
While completing this assignment, I leant that desktop research was not easy as many people think. This is because; I had to take a lot of time and effort in searching and finding relevant information on the internet. In other occasions, it seemed as if the information I was looking for was not available at all, however, after changing search terms and databases, I found more than enough information on how the societal values affect the PA appraisals. Information on the direct link between societal values and PA practices at American Airlines could not be directly extracted and I was almost giving up to researching on another company. However, I approached the matter in another angle, where I studied the company’s societal values, objectives and mission, culture, employee management and their relation to performance appraisal practices.
In the course of the study, I leant the essence of performance appraisals to management in organizations. Prior to that, I had little knowledge on why organizations could evaluate their employee performances on regular basis. PA according to my new understanding was key to improving employee and company performance. Another valuable knowledge I gained from the study is the effect of societal values to these PA practices. I have to admit here that I was not aware if big companies like American Airlines could be influenced by some societal values its HR practices. However, the research indicated that social factors such as responsibility, collectiveness, innovation, loyalty, welfare, and valuing employees influenced the PA practices. It is equally interesting to learn that American Airlines involved its workers even in its PA systems and this determined on how they could be assessed.
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