Performance Appraisal at Telespazio: Aligning Strategic Goals to People Development

In 2011, Telespazio, a leading company in the aerospace industry, was dealing with the implementation of its new organizational model, a global matrix structure that the firm had adopted in 2010 to foster the process of international growth and integration. The challenge for the HR team was to align the HRM system to the company’s new demands in order to improve strategic and organizational change. In this scenario, the case study focuses on the enhancement of the PAT program, the performance appraisal system that Telespazio first introduced in 2005. The case study is divided into two sections. Part A illustrates the existing performance appraisal program (what is assessed, who is in charge of the assessment, the steps involved). The first part of the case ends in April 2011, when the HR team meets to evaluate the strengths and weaknesses of the system. Part B describes the major revisions that were made to the appraisal program, and brings a new challenge for the HR team: extending the implementation of the revised appraisal system worldwide to all of Telespazio’s foreign subsidiaries by the end of 2014. This case study aims to have students take a hard look at the complexities involved in the improvement of a performance appraisal program in a company undergoing an extensive strategic and organizational change. It focuses on the assessment of employees operating within project-based and matrix organizations. This is a critical issue, as ineffective evaluation methods can lead to an ambiguous understanding of employee roles within organizations with a dual line of authority. This aspect has rarely been examined in case studies. Moreover, the case provides an opportunity to debate over a common dilemma related to performance appraisal systems: how to ensure equity and the selectivity of ratings. The case also allows students to look at a critical issue in Multinational Companies (MNCs): how to harmonize and transfer performance appraisal systems worldwide. Alternative solutions should be suggested and discussed.