Performance Management Analysis and Recommendations for SABIC

This project analyzes the performance management system at SABIC Company, focusing on its strengths and weaknesses. The analysis reveals that while SABIC excels in performance planning, its performance review processes, particularly regarding action plans, are weak. The project examines the importance of clear objectives, performance standards, and the crucial role of action plans in connecting past behaviors with future goals. It highlights the need for a uniform evaluation cycle, regular coaching, and HR support for supervisors. The project recommends implementing a Performance Improvement Plan (PIP) and a robust reward system to enhance employee performance and align it with organizational objectives. By improving its performance review and action plan implementation, SABIC can mitigate potential losses and achieve exemplary leadership in the petrochemical industry.

Running head: CONSULTANT AT SABIC COMPANY 1
Project:Consultant at SABIC Company
Course Name: Performance Management
Section Number: 101
Instructor name: Dr. Alexander Soldat
ID Number: 201500932
Student Name: Musad altissan
Semester: Spring 2019 – 2020
Due date:s April 4

CONSULTANT AT SABIC COMPANY 2
Consultant at SABIC Company
The application of proper performance management and reward systems is vital for
connecting the employees, line management, and the organization. A harmonious connection
between them ensures that the organization achieves its objectives and mission. Performance
management helps employees have clear job definitions, indicate and determine the criteria for
success, increasing self-esteem, amongst other benefits (Chapter 1, Slides 9-11). Thus, it is a
key-pointer for the strengths and weaknesses of the individuals. Moreover, the supervisors
acquire a platform for communicating their views clearly, while managers become more
acquainted with the subordinates’ issues. Thus, performance management is very important to
any organization and thus must be done in accordance with the best practices available to ensure
that organizational goals are met.
Sabic Company Limited is a Saudi Arabian company with branches in other regions of
the world, including America. The company manufactures, produces, sells, distributes, and
packages agricultural goods, electrical and electronics, building materials, motor vehicle spare
parts, and healthcare products. The employees thus vary in skills and knowledge, depending on
the area of operation. Despite this wide array of activities, the focus is on the Saudi Arabia Sabic
Company, where my father works as an operations officer. The company has a wireless network
performance management system and 360-degree appraisal systems with which it applies
performance planning, execution, assessment, review, renewal of contract processes. Of these
five performance management processes, the company’s planning processes are the best, while
the performance process review is weak.
Performance planning processes are the activities and plans that assess the output of
employees and compare them to the objectives of the organization, specifically on areas that

CONSULTANT AT SABIC COMPANY 3
need improvement in quality, quantity, cost of production, and time the employees take to meet
targets. Thus, if performance planning is appropriately designed, the organization can make
profits and maintain a strong production system
The performance planning process in the company ensures that every employee’s output
is examined to determine where and how to improve so as to achieve the company’s objectives
and be the leading producer of petrochemical products in Saudi Arabia and beyond. Therefore,
the line management sets measurable targets and objectives with clear indications of their
importance to the company’s mission. For example, the company may allocate each employee a
target in terms of productions per person, say 1000 items per day. The focus is on the production
because Sabic Company Limited primarily pegs on this for survival. Targets also ease the
managers follow up on employee’s output per day.
The planning system is strong in that it identifies specific objectives through making
measurable and important statements of the outcome on the one hand, and establishes
performance standards, on the other hand. Identification of specific objectives aligns the
performance management with the overall objective of the organization and thus necessary
changes can be made. According to Mariani, Tieghi, & Gigli, (2016), failure to have specific
objectives may cause the whole process of performance management to lose relevance where
there is a wide area of goals to meet. The class notes further support this position that
performance standards are the ‘Yardstick” to assess how the employees have met or failed to
meet the objectives (("Chapter 2 Performance Management Process," 2013, Slide 19). In a
nutshell, performance planning must have strong performance objectives and standards because
the two are vital for the success of the performance management objectives and the goals of the
organization.

CONSULTANT AT SABIC COMPANY 4
Setting performance standards help the line-management acquire accurate information on
the work environment and the capability of the company to meet the organizational objectives.
The performance standards act as a measure of employee performance so that necessary changes
can take effect (Mone, London, & Mone, (2018). Below par standards may mislead management
decisions on the next course of action. Sabic company has set clear objectives and performance
standards thus making it the best petrochemical industry in Saudi Arabia.
Contrarily, the information on performance management systems of Sabic Company
indicates that the company struggles with implementing performance reviews. There is an
observed inability of the management to connect the past behaviors and results, the
compensation to be received, and the new goals and development plans. For example, for the
past eighteen years, Sabic Company has been losing one percent of its profits because the
company has been unable to adhere to the action plans. Actions plans are guidelines that outline
the approach and implementation of the changes. Deviations from action plans make it hard for
the organization to progress on its overall performance.
A performance review acts as a direct link between the employees and the management
in obtaining the results of the performance assessment. Without it, the whole process of
performance loses meaning. In the review section, the actions that lead to success or failure in
performance are set against the goals. The reviewer assesses whether or not there are avenues
through which good performance can be maintained or improved, and the bad performances
made better. Feedback from the employees and action plans for the way forward are critically
needed at this stage.
According to the class notes, action plans should be made through agreements of the
stakeholders as one of the steps for reviewing performance. Other steps for performance review

CONSULTANT AT SABIC COMPANY 5
are; identification of what the employees have done well and those who have performed poorly;
soliciting feedback from the employees instead of waiting for them to give the information to the
line management; discussing the implications of changing behaviors; explaining how skills used
in past achievements can help overcome any performance problems; and setting a follow-up
meeting and agreeing on behaviors, actions, and attitudes to be evaluated (Chapter 2, Slides 28-
9). No performance management can progress without the six steps of performance review.
The performance review step of making and agreeing on the actions to take and how to
implement them is essential to the whole activity of performance management. The line
management must be aware of employee activities that are measuring up to the objectives so that
the process has meaning. The response of the employees on their individual performances may
give insights to the management on why they hit or failed the set targets. From this perspective,
the process of performance management can review the challenges affecting the employees, or
encourage the performing individuals. An action plan cures the challenges through personal
initiatives from the management and the employees because there is an intention to curb
activities that may affect the performance afterward. According to Devarajan, Maheshwari, &
Vohra (2018), action plans are an integral and most important part of the performance review
process. Thus, they must be strong and implementable. In the end, follow-up measures on
behaviors and actions and attitudes will help the organization’s performance management team
to connect the past, present, and future.
Sabic Company Limited has the potential to eliminate the losses it has been making over
the past eighteen years caused by loss of grip on the performance review element of the action
plan. Action plans are core to the life of the organization. If the company can improve its
approach to the action plan and equate to performance planning, the organization will achieve its

CONSULTANT AT SABIC COMPANY 6
mission of exemplary leadership in the petrochemical industry in Saudi Arabia. The strength it
has in the performance planning process may not shield it from economic dynamics that lead to
losses if the performance review under the action plan heading is weak. However, all other
factors withstanding, the approach of Sabic Company Limited in pushing for proper line
management is commendable.

CONSULTANT AT SABIC COMPANY 7
Recommendations
The company’s weakness is a poor performance review. A performance review is a
formal process with which managers evaluate employee performance thus identifying their
weaknesses and strengths. Since the performance plan is already strong, other measures to
rectify this include; use of a uniform evaluation cycle, introduce regular coaching and feedback
reports, holding formal interim reviews, and setting clear expectations for supervisors and
provide them with training and HR support. (DeNisi & Murphy, 2017)
All the measures are critical but the most important is on concentrating on the supervisor.
The supervisors act as a direct link between the company’s higher hierarchy and the lower
hierarchy. Setting clear goals for review to the supervisors will ensure that they will closely
follow up on the workers to ensure they meet their goals and subsequently meeting his goals. If
employees underperform, then the supervisor will be held liable in his review. Since employees
are more open to their supervisors than the higher hierarchy, providing HR support to the
supervisor will ensure that he communicates employee needs, encounters, and problems.
(Mulvaney, 2019).
Performance management is also weak. This can be rectified by the introduction of a
Performance Improvement Plan (PIP). This will involve close scrutiny of employee performance
within a set time limit to establish the improvement areas. This should be followed up with
positive and negative reinforcements. Employees who perform well should be rewarded for
example by bonuses, pay raises, promotions among others. On the other hand, employees who
consistently have poor performance should face consequences such as demotion or sacking. By
so doing, employees will ensure that they give their best to avoid facing consequences and will
also be motivated by the reward system. (Mone, London, & Mone, 2018).

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References
Devarajan, R., Maheshwari, S., & Vohra, V. (2018). Managing performance: Role of goal setting
in creating work meaningfulness. The Business & Management Review, 9(4), 261-274.
DeNisi, A. S., & Murphy, K. R. (2017). Performance appraisal and performance management:
100 years of progress?. Journal of Applied Psychology, 102(3), 421.
Mariani, L., Tieghi, M., & Gigli, S. (2016). The efficacy of performance management system in
healthcare. A literature review and research perspectives. Management Control.
Mone, E. M., London, M., & Mone, E. M. (2018). Employee engagement through effective
performance management: A practical guide for managers. Routledge.
Mulvaney, M. A. (2019). Examining the Role of Employee Participation, Supervisor Trust, and
Appraisal Reactions for a Pay-for-Performance Appraisal System. Public Organization
Review, 19(2), 201-225.
Performance Management and Reward Systems in Context [PowerPoint]. (2013).
.