The Dilemma at ABC Autos: Group 12

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Group 12

•Pritam Bhaumik H21155

The •Shirley D Souza H21168


Dilemma at
ABC Autos
•Aritra Das H21132

•Shubham Kumar H21170


Problem Statement – 1/2

Introduction of CPI led to reduced performance pay for the employees

• Poor performance of one department affecting the performance appraisal of other


departments within the same unit
• The unit is achieving their production target, but stringent audit in quality control let to lesser
overall scores
• There was a disruption in current production due to expansion of capacity, which led to work
being partially outsourced and increased operating costs
• Lack of objectivity in TPM consistency assessment which may lead to lower scores 
• Criteria for producing new ideas might be stringent
Problem Statement – 2/2

Mr. Shivanna’s concerns:

• Possible dissatisfaction of employees in transmission production unit due to low annual


performance pay
• Substantial Pay not according to performance of Individual
• Due to bad performance of some the whole team may get an average pay
• Bad performers getting better pay than their contribution
• This may reduce incentive for working hard and reinforce less dedication
Analysis of the Performance System
SMART CPI

• Equitable appraisal for individual efforts • Significant focus on team performance


• Less dependance on other’s performance • Transparency in performance system
Advantages • Comprehensive goal setting for individuals • Improved collaborations between teams
• High motivation and clarity for individual • Organizational goals as cornerstone of
performance business plans

• Biased performance appraisal due to • Higher correlation between performance


closeness with senior management across teams.
• Individual goals on higher priority compared • Conflicting role for quality assurance
Disadvantages to organizational goal teams
• Lack of transparency in system • Team collaboration will need time to foster
and grow
Is composite score justified for ABC Auto ?
Yes, the framework is justified
• CPI puts high priority to organizational goals, helping to align the employees with the values and goals
• The composite performance management system focusses on both individual and organizational performance
improvement and this helps to reach collective goals of the organization
• Instead of 5-6 MoPs earlier, now there are 9 MoPs which has improved the objectivity and diversity of the system
• With the new system in place, improved collaboration is encouraged between teams
• The composite performance management system has made the quality audit more rigorous which is beneficial for
the organization to improve on quality issues that'll ultimately lead to customer satisfaction

Currently,
• Quality was not up to the mark and the new system will ensure better measures in subsequent years
• In upcoming years there will be reduction in operating cost – this year there was increase in production capacity
• In upcoming years, it can be expected that other departments will support the poor performing departments –
overall performance will improve.
Our Recommendations
Provide some incentive to the employees to appreciate the effort for winning manufacturing
excellence award and successful completion of capacity improvement project.

Bring the change in performance management system in a period of 2 years with initial weightage as
70% Individual, 30% - Overall to 50% - Individual, 50%- Overall

Organize workshops and townhall meetings to discuss the new performance appraisal system to
ensure better clarity as a part of change management process.

Facilitate brainstorming sessions involving managers and their team to improve coordination, & make
the workplace conducive to bring innovative ideas

Involving the employees in the auditing process along with managers, so that employees can get an
insight in the critical quality parameters.
Thank You

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