PIA Performance Evaluation System

2. Introduction
 Pakistan International Airlines is one the biggest
airline in Pakistan having both National and
International transportation routes across the world.
 PIA has been as air travel pioneer since its inception in
1955.
 PIA being a national carrier, and a publicly owned
organization, has a culture geared towards
maintaining linkages for the country, creating
employment for the public and presenting national
image to the outside world.

3. Problem Identification
 At PIA, since last one decade management has
changed the performance management system thrice.
Firstly they had ACR system, then Forced Distribution
Ratting System (FDRS) also known as Bell Curve
System. Than again is on cross roads to restore the
ACR system.
 We have focused on the reasons for the failure of
Forced Distribution Ratting System (FDRS)

4. PERFORMANCE MANAGEMENT
SYSTEM
 Effective performance management systems require employees and
supervisors to work together to set performance expectations, review
results, assess organizational and individuals’ needs and plan for the
future.
Feedback
Setting
Objectives
Motivation
Performance
Appraisal
Identify
Training
Needs
Standardize
Performance
Career
Development

5. KEY FEATURES OF PERFORMANCE
MANAGEMENT SYSTEM (PMS)
Section
Explanation
Job Review
To be filled by appraisee at the end of review period
Part A (Objectives)
This part shall be filled by incumbent in consultation of reporting officer and superior
reporting officer at the start of review period. Part A carries weightage of 70% for non
customer focused areas and 30% weightage for customer focused areas.
Part B1 (Skills and
This part is meant for employees working in customer focused areas. This part carries
Abilities)
70% weightage in computation of the final score for all the employees.
Part B1 (Skills and
This part meant employees working in non customer focused areas . this carries 30%
Abilities)
weightage in computation of final score for all the relevant employees.
Part C (Assessment &
This part consolidates the data/assessments written in pervious sections. It consist of
Ranking)
seven sub parts. here employees is ranked and his/her comments are recorded.

6. Level of Performance and Evaluation
Level
Rating
Abbreviation Scale
Measure
Score
Level-1
Outstanding
OS
Performance far exceeds the
4.6-5.0
5% T0p
performance standards i-e excel in all
scales of the work
Level-II
Very Good
VG
20% Remaining Performance frequently exceeds the
Top
3.6-4.5
performance standards i-e excel in some
important scales of the work and meet
all other aspects.
Level-III
Good
GD
50% Remaining Performance consistently meets all the
Top
Level-IV
Needs
NI
Improvement
standards of the work.
20% Remaining Performance doesn’t meet performance
Top
2.6-3.5
1.6-2.5
standards in some important aspects of
the work.
Level-V
Inadequate
performance
IP
5% Last
Performance is well below the standards 1.0-1.5
Remaining
of the work.

7. Forced Distribution Ranking
System (FDRS)

8. Forced Distribution Ranking System
(FDRS)
Forced ranking is a controversial workforce management tool that uses
intense yearly evaluations to identify a company's best and worst
performing employees.
Managers rank workers into three categories:
 The top 20 percent are the "A" players, the people who will lead the
future of the company. They're given raises, stock options, and training.
 The middle 70 percent are the "B" players, steady-eddies who are given
smaller raises and encouraged to improve.
 The bottom 10 percent are the "C" players, who contribute the least and
may be meeting expectations but are simply "good" on a team of "greats."
They're given no raises or bonuses and are either offered training, asked if
they'd be happier elsewhere, or fired.

9. Forced Distribution Ranking System
(FDRS) …
 Forced ranking systems direct managers to evaluate their
employees' performance against other employees, rather than
the more common (and often grade inflated) measure of
evaluating performance against pre-determined standards. The
result of such a process is often brutally blunt.
 Forced ranking is also used by General Electric, Cisco
Systems,
EDS,
Hewlett
Packard,
Microsoft,
PepsiCo,
Caterpillar,
and
Sun
Microsystems, to name only a few well-known employers.

10. FDRS System at PIA
Grading employees as under:
 4.6-5.0
 3.6-4.5
 2.6-3.5
 1.6-2.5
 1.0-1.5
Outstanding or Exceptional
Performance
Very Good Performance
Good Performance
Needs Improvement
Inadequate Performance

11. Failure of FDRS at PIA
Cultural Aspects
 The organization is highly people oriented. Along with
giving competitive salaries, PIA takes care of its employees
by providing lots of benefits like medical, passage, pension
and gratuity etc. Most importantly, people feel very secure
about their jobs which make them complacent. This is one
of the reasons why FDRS failed at PIA.
 Since no job analysis is ever done in the organization, work
activities cannot be described as either team or individual
based. People do work in teams but the sense of
competition and achievement is lacking. This may be
because team based reward system is absent and even if
one person is capable enough to raise team’s performance.

12. Failure of FDRS at PIA…
Biases
 A low performing department may have
employees in the top 5% category and thus
would still be eligible for reward. This
practice
overlooks
the
need
for
improvement and nurturing the best
people.
 The goals are not set high enough, then
almost anybody can get a superior rating.

13. Failure of FDRS at PIA…
Political Involvement
 Being a government organization, there is strong
political involvement is still the part PIA and also
corruption is playing positive role. Many of political
parties have their staff unions in PIA and all have their
own vested interest.
 Such political involvement will never support a
performance evaluation system like FDRS.

14. Failure of FDRS at PIA…
Appraiser’s Attitude
 Performance grading which is done as per
Behaviorally Anchored Ranking Scale
(BARS) at PIA is not normally taken very
seriously by some departments.
 At PIA, appraisal forms are generally filled
without careful planning and in a hurry
(just to get rid of this excess burden).

15. Failure of FDRS at PIA…
 Lack of Knowledge
The appraisers’ and appraise is totally lacking knowledge
regarding the benefits of FDRS system and there
ratings disrupts the bell curve.

16. Failure of FDRS at PIA…
Subjectivity
 The appraisal form used by the organization is highly
subjective and performance grading depends heavily
on reporting officer’s whims and repartee’s
relationship with his / her boss.
 A forced ranking system often incorporates the
subjectivity of department heads, which can
Institutionalize bias and devalue older workers.
Interestingly

17. Failure of FDRS at PIA…
Inflated Rates
 Managers don’t want to give bad news to their people.
This might result in inflated ratings and may distort
the shape of the bell curve.
 The essence of FDRS is sacrificed if managers are given
autonomy to change the shape of the bell curve. This is
exactly what is being practiced at PIA and instead of
keeping employees motivated, has resulted in
aggravating the situation as PIA employees give much
consideration to comparing themselves with each
other

18. Failure of FDRS at PIA…
Inadequate Pay Grade wise Comparison
 FDRS requires that for comparison there should be a
homogeneous group of adequate number of people. At
PIA, even within one department, people of similar
pay grades are doing completely different jobs and
their cross comparison is irrelevant.
 In some departments, there may not be enough
number of people to compare against each other. In
this case, if these employees are compared over and
above their department level, their good performance
may show up as inadequate and causes de-motivation

19. Recommendations
 Revisit the Key Performance Indicators.
 Separate complaint management cell be established
handled by a separate team. The monthly report of
each department will be circulated and also the on
backend have complete details along with particular
employee details. This cell shall also circulate the hard
hitters across the board in order to motivate them.
The same must be included in annual appraisal.

20. Recommendations…
 The personal and professional factors in appraisal form
must be evaluated separately. The 50% of the professional
score includes from Competency level. The complaints
during the year must be the part of appraisal system.
 Re shuffling of employees. The placement of right person
at right place according to their designation and pay scale.
This will suffice the purpose of comparison
 Incase if any have reservations against the annual appraisal,
he/she can consult with HR department where this must
be headed by head of Human Resources
 The annual appraisal form must include the need for
training and development

21. Recommendations…
 In order to avoid the same pay level problems, the employees
with pay scale from Group I to V rate more than the Group VI
to V. Mean strong evaluations required for higher level
employees.
 The final ratings must also be compared with the overall
performance of the department. The complaints must be the
part of annual appraisals
 Management shall try to reduce the political involvement.
The bell curve must be for management employees.
 The extensive training programs shall be arranged order to
facilitate employees to participate in annual appraisal to
implement bell curve system successfully.

22. Recommendations…
 PIA management shall revisit the ratting structure. Below is the
proposed ratting structure.
4.6-5.0
Outstanding or Exceptional Performance
3.6-4.5
Very Good Performance
3.1-3.5
Good Performance
2.1-3.0
Average Performance (Needs Improvement)
1.0-2.0
Poor Performance
 The bonuses shall be awarded to employees comes under the
Good performance and above in following manner:
Good Performance
One Basic Salary
Very Good performance
Two Basic Salaries
Outstanding Performance
Three Basic Salaries

23. Recommendations…
 We recommended basic salaries because PIA management is already
giving lots of benefits to their employees in terms of tickets as well as
other facilities.
 outstanding performers as per PIA current practice shall be posted on
higher level upon availability they may also be posted in PIA’s foreign
office based on the job requirements.
 The promotions shall also based on the ratings. PIA management shall
also introduce promotion approval committee with each member from
every department (Departmental Head), GM Human Resource, Head
of Performance Management Evaluation Cell, Head of Complaint
Management Cell, a judge of high court (As in all government
entities), Government representative, it could be the Defense Minister
or his/her nominee (As it comes under ministry of Defense) and
Managing Director PIA. The MD PIA shall head the committee.
.
.

24. Recommendations…
 PIA management shall separately introduce the
department for performance management system and
evaluations under the direct report of General
Manager Human Resource, Managing Director PIA.
 Apart from annual evaluations, midyear reviews shall
be introduced that create the habit among employees
to understand the advantages of evaluation system ad
also know the proper way of ratting.

25. T HANK YOU
FOR YOUR ATTENTION