Attock Refinery Report

SYNOPSIS

This case on performance management portrays a company’s continuing struggle to fine-tune the process. Attock Refinery Limited (ARL) is a subsidiary of the Attock Group of Companies, a vertically integrated oil conglomerate in Pakistan. ARL has been a pioneer in the industry and refines 70 per cent of the country’s crude oil. Its chief executive officer is determined to foster a performance-oriented culture in the company. In November 2013, Asif Saeed, secretary of the performance appraisal committee (PAC), and senior manager of Human Resources (HR), needs to amend the current performance appraisal system, which is currently unable to generate the desired results.

ARL had made significant changes to the performance management system (PMS) in 1999. Despite minor changes to the appraisal forms from 2000 to 2006, the current system is still not distinguishing a good performer from a poor one. Although employees have a positive perception of the system, they persistently complain that everyone gets more or less the same performance ratings. Saeed wonders whether a system that gives almost equal ratings and increments to all can contribute to creating a performance-oriented culture. He also faces concerns about the weightings of objective setting and competencies, the two main areas of focus in the appraisals. Certain other problems have surfaced as well, such as lack of direction in setting SMART (specific, measurable, attainable, realistic and timely) objectives, limited understanding of the competency list and dissatisfaction with the remote link between performance results and increments/promotions. The case closely examines these issues, which highlight employees’ opinions and management’s concerns.

TEACHING OBJECTIVES

The case is intended to give students an insight into the challenges posed in developing a PMS by comprehensively covering the practical application of target setting and competencies. The in-depth analysis of the different perspectives on performance appraisals will help widen the students’ understanding of the role of HR as a key contributor to attaining strategic targets and developing the culture of an organization. The case has the added advantage of keeping the student’s key focus on the performance management domain while simultaneously creating concrete discussion from various perspectives within the defined parameters.

SUGGESTED ASSIGNMENT QUESTIONS

1. Should ARL change the weightings of performance objectives and competencies? Discuss.

2. Should ARL make adjustments to increment levels?

3. What additional changes would you recommend to improve the PMS at ARL?

 4. Design a presentation to be made by Asif Saeed to the board at ARL.

TEACHING PLAN

The teaching plan is designed for a 90-minute class. The instructor may begin the session with a brief five minutes discussion about the organization, the sector it is operating in, and its vision, mission and core values. The CEO’s quote on the first page of the case may also be discussed. After this introductory discussion, the remaining class time can be divided into four questions as recommended below. Extended Plan: In a three-hour class, the instructor may ask students to present their solutions to Question 4 to the class. Individual students or groups may be asked to volunteer if their solution is significantly similar to or different from others in the class.