Performance Management in Air India

RUNNING HEAD: PERFORMANCE MANAGEMENT
0
Performance Management
Report
Student Name
4/23/2019

Performance Management
1
Table of Contents
Introduction.................................................................................................................................................2
1: Four Perspective of Balance Scorecard....................................................................................................2
2: Critical points to be addressed by Air India as highlighted by auditor.....................................................4
3: Capital Infusion by Government of India in Air India and its impact on domestic airlines.....................5
4. Allegations...............................................................................................................................................6
5: Performance Management System of Air India.......................................................................................7
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9

Performance Management
2
Introduction
Performance Management is a process that is related with aligning the performance of
employees with the organization strategic goals and improving the performance of teams and
individuals in order to make the process effective (Cardy & Leonard, 2015). The concept of
performance management is understood with the analysis of Air India case. Air India is an
airline based in India and founded on 1932, and owned by the government of India. Air India is
the oldest airline of India and operates globally with its subsidiaries that are Air India Cargo, Air
India Express, Indian and Air India Regional form the National Aviation Company of India
Limited. Air India currently operates in 11 countries in rest of the world and in other domestic
destinations (AirIndia, About Us , 2019). Currently company performance in the financial
perspective is improving as its total revenue increased from Rs 17,033.8 million in FY18 and
focused on other perspectives too by reducing the cost of capital and maintenance cost and
changing its strategies to operate effectively in order to improve performance of the company
(AirIndia, 2019).
The report includes analysis of Air India performance and its growth in the market,
through understanding the four perspectives of balance scorecard, the performance of Air India
and role of government in the success of the company. Some of the issues related to its
performance are highlighted in the report and the challenges faced by Air India in order to
sustain in market by continuously improving its overall performance in the market. The
company is facing stiff competition that affected the growth and performance of the company
and to sustain they have to modify its performance management system for that some
recommendations is given followed by a brief conclusion.
1: Four Perspective of Balance Scorecard
Air India showed an improvement in is performance in comparison to past years as the
company focuses on different perspectives that help in gaining the large market share and
strong customer base and directly improve the profitability and efficiency of operation in the
organization. This can be analyzed by applying the concept of balance scorecard in evaluating

Performance Management
3
the performance of the company from all four perspectives and it is to be identified from this
approach whether company is using all perspective in sufficient manner or not.
The balance scorecard is an approach to measure the performance of an organization in
alignment to its goal and mission. The four perspectives under this approach are financial
perspective, customer perspective, internal business perspective and learning and growth
perspective (Pramudita, 2016). Analyzing the Air India on these perspectives; firstly looking into
the financial perspective, the company revenue has increased but its operating expenses also
increased. On other side company has received greater support from the Government of India
which helped them to improve its financial condition and operating efficiency. Whereas in
customer perspective Air India is the lowest cost airline that provides low price flights to
customers, on time boarding and friendly and professional environment during the journey that
helps in attaining the customer satisfaction through its product development like launch of
Maharajah direct, Premier clubs and by introducing Flying return programme. Internal process
perspective includes the turnaround of flights, number of domestic and international fleets and
its operating efficiency in the airline industry (Saranga & Nagpal, 2016). As on 2018 the
company has 120 aircrafts in its fleet out of that 73 are owned and remaining on lease basis.
The Air India international operation reduced as compare to 2017, from India to UK 32 flights
was operated it remained to 28 at present and its operation decline internationally that is not
the good indicator for the company. Furthermore Air India lacking the learning and
development part of employees and staff as people perceive that company is slow to change
and inactive in decision making (AirIndia, 2019).
From all the perspectives it is found that company in some aspect is lacking behind the
competitors in the industry and has chances of improving its performance by efficiently
managing its operational activities and not adequately the perspectives of balance scorecard.
Air India can manage its performance by focusing on the internal processes and through
development of employees and staff and implementing few new strategies according to
learning from the industry.