PGBM70 Report: Evaluating Amazon's Performance Management Strategies

This report critically analyzes Amazon's organizational performance, focusing on its strategic management practices. It begins with an introduction to the importance of performance management, followed by a detailed examination of Amazon's performance management strategies, including the white paper process and feedback culture. The report utilizes tools such as the balanced scorecard to assess financial, customer service, and learning and growth perspectives. It investigates the relationship between decision-making and organizational performance, identifying areas for improvement within Amazon's operations. The analysis covers Amazon's activities and environment, including stakeholder considerations and performance measurement appropriateness. The conclusion offers recommendations and an implementation plan for enhancing Amazon's performance management system. The report provides a comprehensive overview of Amazon's strengths and weaknesses in the context of organizational performance.

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PGBM70 UNDERSTANDING ORGANISATIONAL PERFORMANCE
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8/11/2019
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PGBM70 UNDERSTANDING ORGANISATIONAL PERFORMANCE 1
Contents
Introduction......................................................................................................................................2
Strategic performance management in Amazon..............................................................................3
Performance measurement at amazon.........................................................................................5
White paper process.................................................................................................................5
Amazon activities and environment................................................................................................7
Feedback culture..........................................................................................................................7
Relationship between decision-making and performance of organization......................................8
Areas for improvement....................................................................................................................8
Conclusion.....................................................................................................................................10
Recommendation...........................................................................................................................10
Implementation plan for recommendation.....................................................................................11
References......................................................................................................................................12

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Introduction
Performance of an organization needs to be analyzed and managed for ensuring the success of a
company. The reason being the company is largely responsible by the human resource
performance and overall organizational performance at the strategic level. The purpose of the
report is to analyses performance management of a company for which the selected company is
Amazon. The key reason for selecting the company is the success story of Amazon, which
reflects that the company has been serving high-performance since years, however there may be
some loopholes in the performance management system implemented by the company for which
Improvement areas will be identified, and key recommendations will be provided to the
company. Various strategic performance management tools will be used as balance scorecard
and key activities and environment that reflects the performance management of Amazon will be
discussed in report further.
Amazon is one of the largest ecommerce company owned and run by Jeff Bezos, who is a
transformational leader that has introduced the world with new technology, online retail
presence, and innovative online products and services across the globe. The reason for selecting
this company for discussion over performance management is amazon has included a separate
performance management elements and approach that are considered unique and could be
critically analyse due to the size of the company, which is very broad and expanded and largely
depended on performance of the company. The company is offering large number of products
and services that seems to be anything, which a customer need. Moreover, the performance of
the company is also crucial as the company is focused towards the customer need and
satisfaction, which would only be enhanced by its employees service providing and performance
of the company as a whole (Amazon, 2018).
The company has initiated the business from an online bookstore, which turns out to be every
consumer goods to be available at the site for delivery, including entertainment goods like
amazon prime music, amazon prime video, fire TV stick and many more. Moreover, it has been
identified that the success of amazon is attributed for fulfilling vision and mission, which is
primarily focused around customers of the company (Abdulraheem Sal, 2016). The mission of
amazon depicts its focus over the lowest possible prices to be offer to the customer, the selection

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of goods at best to its capability, and to provide most convenient shopping experience to the
customers. Through these three concentrated elements, it can be depicted that the focus is
completely towards the customer satisfaction, which could lead the company to ignore taking
care of its employees, their growth and their performance. Thus, the performance management of
amazon will be critically evaluated in the report further, succeeding with the areas for
improvement for amazon regarding performance management. The major stakeholders for the
company include customers, government officials, retailers/ sellers, employees, and shareholders
(forbes, 2019).
Strategic performance management in Amazon
A definition by American management association provide the performance management
insights as a partnership among management of the company and employees which will be
helpful for them to serve to their maximum capability which would align to their personal
objectives and company’s values, goals, and organizational initiatives (Zhang & Tan, 2017).
As defined by Bernard Marr, strategic performance management includes frameworks,
methodologies, and indicators that could be helpful for an enterprise in strategy formulation and
let the employees acknowledge strategic insights that would let them challenging the strategic
assumptions, focus over the strategic thinking, inform decision making in strategy and strategic
learning. Some of the identified tool for analyzing strategy performance management includes
balance scorecard, value based management, management by objective, and result oriented
management (Birasnav, 2014).
The balance scorecard model was developed by Norton and Kaplan that has included to
concentrate over key four perspective that is internal process, customers, financial, and learning
and growth. The model try to provide strategy used to the end and not for the structure or
processed. The focus is majorly on customers and shareholders like employees, which can be
helpful in assessing the performance management of the company. The balance score card of
amazon is presented as bellows
Amazon balance scorecard
Objectives Measures Targets Initiatives

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Financial  Profitability growth
 Sales growth
 Profit margins
 Revenue
20% and
30%
increase
 Diversification
strategy
Customer  Service excellence
 Increase Customer
satisfaction
 Customer retention
 Customer
relationship
 Customer
feedback and
rating
 Revenue from
each client
20%
increase
 Customer
feedback
 Understand
customer needs
 Implement CRM
Business
process
 Agile Supply chain
 Service quality
 Benchmarking 20%
increase
 Total quality
management
 Supply chain
management
Learning
and
growth
 Employees training
and benefits
 Performance
appraisal
 Better management
approach
 Gap analysis
 Productivity
 Project planning
and completion
10%,
20%
20%
Increase
 Training program
 Performance
improvement
methods
 Time
management tools
From the balance scorecard of Amazon, the evidence suggest that
 Financial objectives of the company are sales growth and profitability growth for which
the performance can be measured through two factors that is profit margins and revenue
which are targeted to be increased by 20% of profit margin increased and 30% increase in
revenue for one year. In order to achieve the objective of the major strategic initiative
taken by the company includes diversification strategy implementation that is increasing
the product and enhancing innovation through products and services offered to the
customer.
 Considering the customer perspective the key objectives identified for the company or
increase in customer satisfaction as the company is found to be customer obsessed,
excellence in service, customer retention and customer relationship to be maintained
strongly. The key performance measures for the subject is included revenue from each

PGBM70 UNDERSTANDING ORGANISATIONAL PERFORMANCE 5
client that will depict the customer retention and customer relationship and customers
feedback and rating depicts the customer satisfaction level which is targeted to be
increased by 20% for yearly basis.
 Business process perspective includes two tablets that this service quality and agile
supply chain which are measured through benchmarking that is marking a standard that
needs to be maintained by company considering the service quality which needs to be
increased by 20% while measuring the performance (Zhang & Tan, 2017). The key
initiatives taken by the company in order to achieve this objective is supply chain
management and total quality management.
 Learning and growth perspective is one of the major perspective that will depict the
employees performance management in the company for which the objectives include
performance appraisal, employees training and benefits, better management approach. It
can be measured through gap analysis through which the employees skills that needs to
be trained or loaned are identified and for which the training program is implemented.
The level of productivity is another measurement way through which the company look
out for the performance appraisal of the personnel’s and lastly project planning and
completion level depletes the management approach used by the top managers (Miao et
al., 2017).
Performance measurement at amazon
It can be said that the performance management at amazon have pros and criticism as well.
Some of the unique performance management approach of amazon includes
White paper process
According to this approach, the top management believes that it is important to convey the
vision, mission and objectives of the company to understand what employees are expected to
perform or do. The communication of amazon considers all the aspects to be shared clearly in the
organization and has contributed to the employee motivation. According to the sayings by Jeff
Bezos, the good intentions of the organization and employees do not work but the structure and
mechanism is helpful in the performance of the organization. The right mechanism is the most
relevant element considered by the top management of the company to be implemented to

PGBM70 UNDERSTANDING ORGANISATIONAL PERFORMANCE 6
maintain the high standards of the performance (Asfaw et al., 2015). This is one of the decision
making approach of the company, that includes writing white paper that is when anyone coming
up with novel idea for service or company process by the employees, and the top management
ask them to write up the white paper (Gabriel, 2016). The paper reflects approach, reasoning,
anticipation, addressing the questions, and stating what an individual has considered be accepting
and rejecting while developing the recommendation and include a press release that will present
a customer experience at the launch of the idea. After the documentation has been developed the
team members are collected together in order to present or read the white paper. The happening
occurs before any preceding conversation In order to make everyone else understand each
perspective of the writer and the key discussion are based on a similar facts and assumptions for
everyone. By this process and individual needs to be disciplined in their assumption, thinking
and objections are to be considered and the ways to overcome the issues. This process or strategy
has been preventing every individual from having an incredible record of accomplishment
considering the new product launch to the success journey (aboutamazon, 2018). Moreover, this
strategy is for not only making business decisions but also act as the promotional process that is
a major and key part of Amazon pay increase. Through this method, the company makes sure
that the values are constantly increasing for every individual and continuous learning has been
implemented among the employees. Through this, it can be said that in case of a general
organization this implies success and accomplishment are the base for the promotion (Gordon,
2012). However, in case of Amazon at the time of decision regarding promotion of an individual
a manager is looking forward to the white paper written by the individual where the failures,
success and how an individual has grown in the process is presented and made understood to
every other employee. The process for this review process of Amazon includes an attempt to
collect it individual’s data that is the core strength areas of an individual. As it has been believed
by the managers that the promotion should include the superpowers as part of their manager
feedback, peer feedback and understand the areas for growth for a personnel of Amazon
(amazon, 2018).

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Amazon activities and environment
Feedback culture
In order to assess the performance management at the strategic level of amazon, the foremost
element to analysis the feedback culture of the company. It has been identified that Amazon is
customer-obsessed company that means that the company has the only focus towards the
customers. In addition, the company is quite committed to serve the customer expectations. This
is one of the strategies of the company that has been found to be effective for the
accomplishment of the objectives related to the customers and financial perspective as per the
balance scorecard elements (Miao et al., 2017) (Oke & Prajogo, 2016). However, it may effects
the employee morale in the company, as their voice is somehow decree in front of the customer
need and feedback, which may affect their performance in the company. This is one of the issues
when it comes to the strategy of amazon, considering employees of the company. The customer
is being prioritized over the employee satisfaction and employee engagement. According to the
statistics in 2013, the lowest employee retention rate among 500 fortune companies was of
Amazon, which reflects one of the major issues with amazon performance management at
strategic level. The evidence suggests that the ideas of the coworkers are criticized and they are
liable to share feedback of one another secretly to other managers. Through the analysis, it can
be said that the feedback culture of amazon for performance management of the employees
seems to be too open to abuse and may lead negatively due to undermining others work
(blog.aboutamazon, 2019).
The feedback system described above has initiated by the company in order to push employees
limit and improve the performance. This vision of Bezos includes expansion in ambition also
reflect through its performance management approach for which Amazon hold monthly or
weekly reviews of business in which every person is liable for metrics Array, which reflect the
performance measurement approach of the company (Osman, 2016). Evidence suggest that every
employee of Amazon received the relevant data presented in around 50 pages and in between
these reviews each personas are generally validated or tested on the capability and knowledge of
the described metrics. However, this performance measurement approach seems to be very time-
consuming, long and exhaustive for employees that includes substantial amount of discussion for
long work hours considering the metrics (aboutamazon., 2018).

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The tool for this feedback system used to manage the performance of the employees is called any
time feedback tool, which can be used by the person, is directly in order to provide criticism or
praising their co-workers. The manager of the person directly receives the provided feedback and
the secrecy has been maintained between the manager and the person sending the feedback. This
may be useful for the company as the co-workers are mostly of their about the strengths and
weakness of an employee. However, this is system could be used by employers for personal
grudges that is bias decision-making could be included in such a system adopted by Amazon.
The results of this feedback system of Amazonas reflected through creation of bottom
performers list that is prepared and willing. Every year the company list the organizational level
reviews, organize it where the bottom and top performance of the company or identified and
presented in front of borders managers, traditionally this system has been known as rank, and
yank in the company.
Relationship between decision-making and performance of organization
The decision-making in the organization regarding the performance include identifying the best
and worst performer and the gap will be analyzed that will reflect the area of improvement for
every individual, for which the organization may consider training program. Therefore, it can be
said that the feedback system of performance measurement and Management would lead to
improvement in decision making of the company (Du & Bstieler, 2016). Moreover the white
paper approach also depicts increase in decision-making ability of the top management by
understanding every individual‘s performance, success and perspective in order to decide the
promotional level and appraisal of an individual. Considering the performance objectives it can
be said that the actual performance of Amazon are quite similar to that of the objective of the
company for example increased customer satisfaction, increase in service excellence that is
improving the delivery service and after sale services (Betton, 2017).
Areas for improvement
The areas identified for improvement includes

PGBM70 UNDERSTANDING ORGANISATIONAL PERFORMANCE 9
 Employee motivation, as it has been identified that the feedback system for the
performance management and measurement includes secret feedback from the co-
workers, which may be biased nature.
 Performance measurement - It has been identified that the company could have used
better performance measurement techniques for making better decisions regarding the
performance management and improvement of employee’s performance (Caillier, 2014).
 Employee retention - The evidence also reflected that the retention of employees is very
low in the organization, which would indirectly influence the performance of the
company; this was a key area that must be improved by Amazon that is retaining their
employees through various tools and techniques.
 Employee engagement - From analyzing the strategic performance management of
Amazon, it can be said that the satisfaction level of employees and engagement of
employees in the organization is quite low which must be improved in order to enhance
the performance of the people and organization as a whole.
 Feedback system - One of the major cons identified for the feedback system that has been
discussed in the previous section for Amazon, it was unable to consider self-appraisal for
the employees that is providing or analyzing feedback of employees by themselves. They
could only be received the information regarding the feedback from the managers instead
of one on one conversation with co-workers who feel the strength and weakness of an
individual and understand the key reason for that observation. This usually acts as a
barrier in whole purpose of performance management that will eventually help the
personnel to learn and grow. It can be said that the employee empowerment is essential
element that must be outcome of the feedback System (Bradler, 2016).

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Conclusion
From amazon performance management report, it can be concluded that Amazon is one of the
largest ecommerce company owned and run by Jeff Bezos. That has introduced the world with
new technology, online retail presence, and innovative online products and services across the
globe. Performance measurement at amazon includes White paper process. This is one of the
decision making approach of the company, that includes writing white paper that is when anyone
coming up with novel idea for service or company process by the employees, and the top
management ask them to write up the white paper.
Amazon activities and environment includes feedback culture, the evidence suggests that the
ideas of the coworkers are criticized and they are liable to share feedback of one another secretly
to other managers. Through the analysis, it can be said that the feedback culture of amazon for
performance management of the employees seems to be too open to abuse and may lead
negatively due to undermining others work
Recommendation
One of the recommendation regarding the drawbacks identified from the feedback system of
Amazon for performance management is that the employees could start their feedback cycles and
select to communicate with their team members, peer members or managers when they are
willing to do so. Through this strategy, the employees will be able to consider self appraisal and
understand their own weakness and area for improvement instead of worrying about negative
feedback and attend to develop themselves to communicating their gaps in capabilities with their
managers and peer members with whom they feel comfortable. It was also identified that the
feedback system could also be used for personal grudges or for sabotaging others. What this
recommendation includes providing authority to the person who is providing feedback to reveal
their identities. Considering the circumstances if the management feels that the feedback is unfair
and he himself or herself has identified some strength in the person for whom the feedback has
been provided they can view the feedback considering the transparency to large extent in order to
avoid conflicts (Robson & Zeriti, 2014).

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Another recommendation considering the area for improvement is implementing employee
retention strategies by the company. This may include employee engagement program with the
employees will be freely able to share their thoughts, ideas and believes and consider themselves
as being listened in the company in order to understand that they are the important stakeholder of
the company. Moreover, some additional benefits must be provided to the employees for not
only identify the best performer in the organization but also reward them with what they deserve
and appropriate decision-making regarding the promotion (Limbu & Babin, 2016).
Implementation plan for recommendation
The recommended plan can be implemented through a procedure followed by the company. This
will include improving the existing feedback system of the company for which the company will
include option for the person providing feedback to reveal their identity and consider the
feedback discussion one-on-one with the person for whom the feedback has been provided. In
order to retain the employees the company must implement the retention strategies (Smith &
Barrick, 2015). First creating the benchmark that is understanding the standard, which will
consider as the higher performance then what is being asked for; next step will include the
planning stage that will include providing objectives and take it to the employees that must be
accomplished for affective performance measurement. The next step will be to analyze the actual
performance of the individual this would include measuring and controlling stage. The next stage
will be taking relevant action that will include rewards in this case in the form of incentives,
promotion or any other beneficial additional to the base salary of the employee for rewarding
them as the best performers (Sands & Reiter, 2015).