Analysis of Performance Management
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ANALYSIS OF PERFORMANCE MANAGEMENT SYSTEM IN NDPL 1
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Transcript of Analysis of Performance Management
ANALYSIS OF
PERFORMANCE
MANAGEMENT
SYSTEM IN NDPL
1
Students Undertaking
“ The project is submitted to Jagan Institute of Management Studies New
Delhi, as a Summer Training Project for Post Graduate Diploma in
Business Management 2007-2009.”
Project Guides: (By Student Name)
Company- Mr. Shivank Singh,
Mr. Bharat Chabra
2
Faculty- Prof. S.C. Kapoor
CONTENTS
ACKNOWLEDGEMENT 4
EXECUTIVE SUMMARY 5
INTRODUCTION 6
COMPANY PROFILE 13
3
OBJECTIVES OF THE STUDY 25
RESEARCH METHODOLOGY 34
ANALYSIS AND FINDINGS 35
LIMITATIONS OF STUDY 49
CONCLUSIONS 50
RECOMMENDATIONS 51
APPENDICES 52
4
ACKNOWLEDGEMENT
My eight weeks training at NDPL was a great learning experience. I had undergone training in HR department in TMG ( Talent Management Group).
My project title was ‘ANALYSIS OF PERFORMANCE MANAGEMENT SYSTEM’.
Earlier my perception was HR only act an advisory function in an organization but after my live interface with the group I realized that how efficiently and rigorously it works so that other departments can function systematically and cohesively. My project would not have been successfully completed without the support and guidance of Mr. Shivank Singh (Executive-HR), Mr. Bharat Chabra (A.G.M HR) and Ms. Harleen Kaur (Sr. Executive, HR). They were really encouraging and the support that I got was really commendable.
I extend my gratitude to the entire group for such an enriching exposure and my thanks to the respondents who gave their invaluable suggestions in respect my study. . I would also like to thank Prof. S.C. Kapoor for his kind guidance. and JIMS for providing me this platform so that I can get first hand knowledge of day to day operations of the organization.
5
EXECUTIVE SUMMARY
I had undergone training in the TMG (Talent Management Group) in NDPL wherein my project title was ‘Analysis of Performance Management System’.
Since the financial year was just over and the appraisal cycle begins. The objective of my project was to understand and analyse the performance appraisal system in the company.
Initially I was given the responsibility of preparing the soft versions of the manual copies received from all the offices of NDPL. When this exercise is over their training and ratings are recorded so as to do the TNA (training need analysis) and the details are handed over to CENPEID where the training calendar is prepared and it is circulated to various centers organization wide.
I was also involved in the follow –up exercise i.e. calling the appraisers who had not submitted their hard copies as the deadline had already expired. I was also involved in the audit and filing of the same with respect to their appraiser, reviewer, ratings, training needs and periods.
I had worked under the mentorship of Mr. Shivank Singh and assisted him in R & R work(
Reward and Recognition).Later on some new trainees had also joined and I was asked to take the
lead and explain the work to them. From this year onwards E-PMS had been launched for the pilot
phase for the executives and above cadre. I had prepared feedback questionnaire for the same as a
part of my research methodology and also to test the recommendations with regard to the present
performance system I had made use of SPSS technique as well.
6
INTRODUCTION
Overview of Power Generation and Transmission Planning in India
India starting from an overall installed capacity of little above 1,300 MW at the time of its
independence in late forties, through its successive five-year planning periods could achieve a
level of about 110,000 MW with energy generation of the order of 600 billion units in five and
half decades. Though initial generation was concentrated to meet load in urban areas, at present
vast country side too has been covered under massive electrification program.
Due to thrust on hydro development for the purpose of both irrigation and power, fifties and
sixties saw a good hydrothermal mix in the generation front to meet the load along with the
formation of Electricity Boards under the State Governments of the Republic of India and some
river-valley project authorities for the implementation of projects. Due to the low level of load and
shorter distance of haulage of power, grids hitherto had been restricted to 132 kV and seldom
But with the setting up of quite a good number of mine-mouth large thermal power stations and
few hydro power stations at the regional level by the Central Government-owned Companies
starting from eighties, state grids were integrated to form the regional ones with simultaneous
development of 400 kV networks for power evacuation from major stations as well as for
strengthening of networks. Thus came into existence the five regional grids in the Northern,
Western, Southern, Eastern and North-Eastern part of the country.
7
Generation Installed Capacity (MW) of Power Utilities in States/UTs regions including allocated
shares in joint & central sector utilities along side the sources as of 2007 is
shown below:
8
Fuel MW %age
Total
Thermal
86,935.84 64.5
Coal 71932.38 53.4
Gas 13,801.71 10.2
Oil 1,201.75 0.9
Hydro 33,485.76 24.8
Nuclear 4,120.00 3.1
Renewable 10175.03 7.6
Total 1,34,716.63
Power Sector Reforms
Power sector is witnessing a critical phase. State Electricity Boards (SEBs) are responsible for
providing electricity to the people. Most of the SEB’s are cash strapped. The power sector in the
country has accumulated a huge deficit, a dues to Central Power Generating Companies because
of the deteriorating financial performance.
To turn around the financial health of the power sector, the Government has taken up reforms in
the power sector for gradual elimination of losses. The sole objective in launching of the reforms
was to mobilize private sector resources for power generating and distribution.
The Ministry of Power has set a goal - Mission 2012: Power for All.
A comprehensive Blueprint for Power Sector development has been prepared encompassing an
integrated strategy for the sector development with following objectives:-
- Sufficient power to achieve GDP growth rate of 8%
- Reliable of power
9
- Quality power
- Optimum power cost
- Power for all
Delhi’s Power Distribution System
Delhi Vidyut Board (DVB) was the organization which provided power to Delhi metropolis until it
was partially privatized in July,2002. The Delhi Vidyut Board (DVB) was a State Electricity Board
set up in 1997 under the Electricity (Supply) Act, 1948, succeeding the Delhi Electricity Supply
Undertaking (DESU), which had existed since 1957 as a wing of the Municipal Corporation of
Delhi.
The creation of DVB, replacing DESU, in 1997 proved to be merely a change in the legal status of
the organization and was not followed by any real change in its structure, functioning and work
culture.
DVB was also a major financial drain on the Delhi government. In the several years before
privatization, the Delhi government was forced to provide DVB with annual subsidies of US $200
to 300 million. There was no reason to believe that the level of subsidies would diminish as long
as DVB remained a state enterprise.
Thus the condition continued to deteriorate. The main problems with DVB were Transmission and
Distribution (T&D) losses, theft of electricity, load shedding, financial problems, distribution
transformer failure was high, consumer dissatisfaction.
It is quite common throughout India for the state electricity boards to be a major financial drain on
the state budgets. But Delhi had an additional problem. DVB’s service was so bad that it had also
become a clear political liability. Ultimately, it was probably this combination of political and
financial liabilities that convinced the Delhi that had to privatize DVB.
T & D Losses
Its T&D losses were perhaps the best-known thing about DVB. These losses have increased
substantially during the previous decade, particularly from 1993, as the following chart will show:
10
As the table shows, the steady increase in T&D loss was somewhat controlled and slightly reversed from
1999 onwards. However, it was clear to the Government that it would be necessary to privatize
distribution as quickly as possible.
World Bank Reports
The World Bank in 1998 had warned India that unless it introduces reforms in the power sector it
could lose millions of dollars in revenue.
“India is plunging head-long into an energy crisis that may cripple the country's burgeoning
economy if the government does not act fast. The opening up of the energy sector to private investors as
part of the Indian economic reform plan may well be the energy boost this industry desperately needs.”
The report prescribed an injection of 10 billion dollars over the next five years into the power sector,
without which India will be facing 8 to 10 power cuts daily, daily.
All these factors made the government enforce privatization reforms in the power sector.
11
Introduction to the topic
PERFORMANCE MANAGEMENT SYSTEM
CONCEPT
Measuring employee performance has come a long way from the annual performance appraisal to an ongoing performance management process. In recent years, there has been a shift away from performance appraisals to a more comprehensive approach called performance management. Performance management is an ongoing process where the manager or supervisor and employee work together to plan, monitor, and review an employees work objectives or goals and overall contribution to the organization.
A PMS enables a business to sustain profitability and performance by linking the employee’s pay to competency and contribution. It provides opportunities for concerted personal development and career growth. It brings all the employees under a single strategic umbrella. It gives supervisors and subordinates an equal opportunity to express themselves under structured conditions. PMS is a formal, structured system of measuring and evaluating an
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employee’s job related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in future so that the employee, the organization and society all benefit. Performance management shifts its focus from command and control concept of leadership to facilitation model of leadership. This change of focus has been accompanied by recognition of the importance of employees, their work related performance in achieving organization long-term objective and control. In performance management individuals and team performance, in terms of the customer’s response to the goods and services offered. All individual and team performance are vital, but they must be interrelated and seen as a part of the total performance. Performance management is like compass, which indicate actual direction as well as the desired direction. It is a continuous improvement over time. Performance management requires willingness and a commitment to focus on improving performance at the level of the individual or team everyday. It provides instantaneous information describing the difference between an individuals or teams current position and actual
desired position. It provides timely feedback on performance while focusing everyone’s attention on overall objective.
According to Armstrong “Performance management system is the process for establishing shared understanding about what is to be achieved and an approach to managing and developing people in a way which increases the probability that it will be achieved in the short term and long term.”
Performance management is about creating a system that provides employees with organizational direction and priorities make them aware of their current performance levels, support them through training and coaching and reward those who demonstrate high performance.
When referring to business performance Management it refers to an enterprise’s ability to build processes and applications that facilitate creation of goals, creation of operational strategies and the ability to monitor key indicators that provide timely and continuous feedback on whether the operational strategies are successful at implementation of the goals and objectives set by executive management.
DIFFERENCE BETWEEN PERFORMANCE MANAGEMENT SYSTEM AND PERFORMANCE APPRAISAL :
The development of performance management was accelerated by the emergence of HRM, a realization that it was a concern of everyone, a shift from top-down to upward appraisal;
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dissatisfaction with performance related pay and allied factors. Performance appraisals are an important component of a PM process, they do not compromise of the entire system. A performance system is mainly an audit of employee performance. It shows what has to be done against what should be done; they should be treated as a pulse to check the health of the organization. Whereas, Performance management system is designed to ensure that the right people are selected, performance goals are set keeping in view employee capabilities and systematic capabilities required to achieve these goals.
COMPANY PROFILE
BRIEF PROFILE
NAME- NORTH DELHI POWER
LIMITED
INDUSTRY TYPE…POWER DISTRIBUTION
CORPORATE OFFICE……NEW-DELHI
14
CEO&ED SUNIL WADHWA
FORMED IN JULY 1 , 2002
ANNUAL TURNOVER……..RS. 1518.98
CRORES
AWARDS WON………’ A) INTELLIGENT ENTERPRISE
AWARD IN THE YEAR 2004 AND 2005 BY
MRB, E&Y,
…………………………. AND INDIAN EXPRESS .
CERTIFICATION RECEIVED- ISO 9001:2000,
ISO14001:2004,
OHSAS18001:1999
MANAGEMENT
STANDARDS
15
16
FORMATION
As mentioned earlier Delhi Vidyut Board (DVB) was the organization which provided power to
Delhi metropolis until it was partially privatized in July,2002 with Tata Power forming a
partnership with the newly formed government enterprise: Delhi Power Company Ltd (DPCL).
This is how NDPL was formed with the right to service north and north west Delhi.
This privatization envisaged that there would be one company for generation (Gencom), one for
transmission (Transcom) and three for distribution (Discoms). Gencom and Transcom will be fully
owned by government while in Discom the majority holding will be by private sector.
There has been a 8 fold increase in Power losses in the past decade and this has been attributed to
two things.
Importance of distribution was not explicitly recognized.
The role of private sector was underestimated.
Under these circumstances Delhi government decided to privatize the distribution end of the value
chain.
Privatization and creation of NDPL required major legislative support of the Central government
and that of GNCTD. From GNCTD side too there were several initiatives that resulted in the
privatization process. This included passage of the Delhi Electricity Reforms Ordinance which
empowered Delhi Electricity Reforms Commission (DERC) to regulate the power industry
including licensing and restricting government’s role in power policy matters.
Discom’s Performance Measure
Losses happens through three means --- Technical losses, theft and commercial losses.
Previously most of the electricity companies relied on Technical and Distribution (T&D) losses to
indicate the extent of losses that were present but this measure never gave accurate information as
it was very easy to hide power thefts and operational inefficiencies under the guise of T&D losses.
17
Keeping in mind the above mentioned losses and to overcome the above flaw in measuring
performance of a distribution system a unique feature was incorporated which was fixing of
Aggregate Technical and Commercial (AT&C) Losses as a measure of performance of the
discoms. This measure is really proving to be a pragmatic way to plug loopholes one by one to
reduce all three losses.
Need for a business model
Apart from the above mentioned performance measure there was a need for a new business model
that would ensure that NDPL wouldn’t go down due to unsustainable operations. This model
would take into account, factors like
Sourcing: Will NDPL be able to continue sourcing from the existing transcom? Will present
sources suffice?
Competition: Will NDPL face competition from other potential discoms/ captive generation/
Association of Person (AoP), merchant power to large consumers from trading companies, or
competition from cheap generators through open access?
Pricing: What will be the nature of controls on pricing stipulated by DERC that NDPL will have
to face?
NDPL Operations
18
NDPL is responsible for sourcing power from Transco, distributing power to the customers, billing
and collecting amounts. This network is divided into circles, districts and zones wherein these
individual zones are responsible for the proper functioning of their segment which gives them a
sense of ownership resulting in a profitable business owing to the pressure to perform.
NDPL has taken a lot of steps to increase the efficiency of the entire system like ---->minimizing
losses by replacing obsolete material, insulating wires to avoid power theft, servicing transformers
to increase the IR value, quality measures to bring down tripping, replacing sick cables,
systematic grid coordination, safety and security measures to name a few.
VISION
NDPL Vision is to be the preferred provider of reliable and competitive power to people we serve
and to be favored company to work for.
MISSION
19
Deliver quality and cost-effective electricity
Ensure excellence in consumer care
Create a work environment which encourages teamwork, learning and innovation
Meet or exceed all stakeholder expectations
Enrich quality of life in the society we operate in
VALUES
Integrity: fair and transparent conduct of business
Understanding: Caring, respectful and being compassionate towards our consumers, colleagues
and society
Excellence: Striving to achieve highest possible standards
Unity: Working cohesively with colleagues
Responsibility: Being sensitive towards communities and environment
HR Management
The vision of NDPL HR is “To create a learning organization, which nurtures talent, innovation
and provides competitive environment that makes NDPL the favored company to work for”.
The breakdown of the employees in terms of their functional responsibilities is given below:
Sl.
No.
Functions/
Departments
Executives Non-
executives
Total
1 Operations 293 1688 1981
20
2 Commercial 262 596 858
3 TS, Projects,
IT
102 92 194
4 Finance 53 97 150
5 Administration 49 254 303
6 HR and
Training
32 55 87
7 Pms and EKM 42 19 61
Total 833 2801 3634
As the majority of the workforce at the beginning were of 40+ age and less qualified it was tough
for NDPL to manage this workforce. But today this workforce has very well adjusted to
the performance based culture adopted in NDPL thanks to the new work systems and schemes
employed by the organization.
Tables below show the employee profile in terms of age and qualifications respectively
Sl.
No.
Age %age
1 ≤ 25 7
2 25 –
35
22
3 35 –
45
26
4 > 45 45
Total 100
21
S.
No.
Qualification %age
1 10-12 pass or
less
49
2 Diploma/ ITI 21
3 Graduate 7
4 BE/ CA/
MBA
16
5 PG/ CA Int./
LLB
3
6 Others 4
100
The challenges that NDPL HR faced at the start were
1. Suboptimal skill and Productivity of workforce
2. Amalgamation of two culturally diverse workforces.
Based on these two challenges six areas of soft skills were identified which were designed to be
promoted through three routes of Work Systems, Job Definition and Performance-based
Management.
A brief mention of these soft skills:
a) Cooperation: Processes were segmented such that cooperation of every employee was
required for the successful functioning of the concerned department.
b) Initiative: Freedom to take initiatives is given to encourage innovative thinking and
brainstorming among employees.
22
c) Empowerment: There is an expanding horizon of responsibility for competent employees
through creation of enhanced job profiles.
d) Innovation: Innovative ideas are promoted and credited.
e) Organizational Culture: A performance oriented culture is followed in the organization thus
replacing man power based contracts.
23
24
f) Agility to keep Current with Business Needs and Achieve Action Plans: Processes are reviewed
continuously to keep up with the latest technology.
A lot of emphasis has been given to training of employees. Sharing the best practices with fellow
employees, merging better performance zones with less performing ones are some of the things
done as part of the training initiatives.
Various pedagogical methods are used for training purposes. The following list in Table provides
the range of delivery mechanisms
that are used for training purposes.
Formal
Approaches
Informal
Approaches
Classroom
Training, Video
Sessions
Mentoring
Role Plays Excursions
/Expeditions
Outbound
Training
Quiz Competitions
Hands on / On the
job training for
building technical
skills
‘Samarth’
Management
games
Peer to Peer
exchange
programmes
Departmental
Brainstorming
sessions
25
e-Learning Interactions with
associates
Town Hall
Meetings
Interactions with
consumer forums
Employee performance is evaluated through components like self appraisal and individual
development plans. To cultivate a performance based culture, NDPL provides various awards and
recognition to employees which motivates them to perform better. Apart from these there are a lot
of welfare schemes in place to help the employees and their families.
Rewards Executives Non-
Executives
Shining star of the
quarter
Champ ion officer
of the year
Champion manager
of the year
Consumer
confidante award
Mission
Accomplished
Valour Award
Catalyst Award
Sportsperson of the
year
Prefered associate
of the year
Shining Star
of the
Quarter
Champion
Workman of
the year
Valour Award
·Sportsperson
of the year
Samridhi
Merit Award
( Lady
Workmen
Recognition Sterling Sterling
26
Performance
Appreciation
Letter
“Shabash
Certificate
Best Engineering
Trainee/
Management
Trainee/Technician
Performance
Appreciation
Letter
“Shabash”
Letter
Leadership, Tata Parenting and Governance
Leadership at NDPL has a major task in addressing performance issues like making healthy
returns on investments as well as a socially sensitive management orientation. For NDPL this task
was even more difficult because there were no existing business models to go by and the
regulatory framework was still at an infancy stage.
The management control of the company is with the Tatas. Top management of NDPL consists of
fifteen member core team headed by the Managing Director. In this system individual
responsibility and authority do not get fixed rigidly, but are flexible enough to deliver
organizational goals while at the same time ensure achievement of individual effectiveness and
growth.
27
Organizational Chart
28
Managing Director
COO Head (HR)GM/HOD
(Administration)ED-Finance
GM/HOD(Operations)
GM/HOD(Commercial)
GM/HOD(Technical Services)
GM/HODProjects
HOD(Enforcement)
GM(Revenue
Recovery & Field Services)
GMSpecial
Projects Group)
Advisor (Operations)Advisor (Govt. Affairs)
Advisor (Technical /PEOAdvisor (Commercial)
Advisor (G)
HOG (Internal Audit and Risk Appraisal)Chief Mentor (CENPEID)
Managing Director
COO Head (HR)GM/HOD
(Administration)ED-Finance
GM/HOD(Operations)
GM/HOD(Commercial)
GM/HOD(Technical Services)
GM/HODProjects
HOD(Enforcement)
GM(Revenue
Recovery & Field Services)
GMSpecial
Projects Group)
Advisor (Operations)Advisor (Govt. Affairs)
Advisor (Technical /PEOAdvisor (Commercial)
Advisor (G)
HOG (Internal Audit and Risk Appraisal)Chief Mentor (CENPEID)
The Ethics policy helps NDPL to institutionalize ethics as part of NDPL’s organizational culture.
The Principal Ethics Counselor is the MD himself. This is followed by the a Chief Ethics
Counselor who in turn is supported by Locational Ethics Councilors.
Every month the Chief Ethics Counselor makes a consolidated report of all the ethical issues faced
at all the locations and this is submitted to the MD every month.
As part of this culture several Lok Adalats were sponsored which have been instrumental in
resolving thousands of cases.
29
OBJECTIVE OF THE STUDY DURING TRAINING PERIOD
To study the performance appraisal system carried out in the company.
To understand the relevance of KRA’s and weightages which are set up at the in the
beginning of the year.
To analyze the e-pms system which was launched as a pilot phase in the company.
To obtain the feedback of the executive category and above with respect to their
maiden process.
To interpret the responses gathered from the employees so that meaningful
conclusions can be drawn out.
To Identify the limitations and challenges of PMS
To make suggestions and recommendations
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PERFORMANCE MANAGEMENT
SYSTEM AT NDPL……
…NDPL has a performance management system (PMS) in place to effectively evaluate and measure
current performance levels of an employee in a way that will encourage innovation, cost
consciousness, quality improvement and promote organizational growth, development and
harmony. The PMS at NDPL seeks to fulfil the following objectives:
Assess the current level of job performance
Counsel the officer on areas for improvement and ways to address them.
Assess the training and development needs.
Identify the potential of undertaking higher responsibility.
Develop a system of increment and rewards based on performance.
Productivity improvement resulting in value addition.
The corporate human resource department initiates the administration of the annual performance
appraisal forms.
Salary increments of employees under NDPL structure are considered based on the
performance and decide by the management once in a year effective from 1st of April
Like every other organization NDPL also evaluates the performance of its employees and provides them with proper guidance and training in their respective fields, through PERFORMANCE APPRAISAL SYSTEM. NDPL follows the five point rating scale for performance appraisal. Here,
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the HR Department combines the various efforts to carry out the task of PERFORMANCE APPRAISAL.
Being new in the corporate world, performance appraisal was altogether a new task for me. It was an interesting and a good learning experience for me. It provided me, an opportunity to bring the theoretical knowledge about the concept into practice. I got to learn the whole procedure of how, when, where, for whom the performance appraisal is being done. It’s a task comprising of great responsibility and dedication ruling out the chance of any corruption or biasness.
In NDPL, the task of performance appraisal starts with an office order. The HR Department of the organization received an office order in the month of February which instructed them to begin with the work of performance appraisal. Performance Appraisal forms a whole system which consists of performing various tasks at the distinct levels. It is a formal process by which the job performance of each employee is periodically and regularly appraised.
Purpose
To effectively evaluate & measure current performance levels of an NDPL employee and to maintain a high standard of professionalism with competent, well trained employees. ObjectivesIn NDPL, Performance appraisal is a process designed to evaluate, manage and ultimately improve employee performance. Following are the main objectives:To ensure that the NDPL has an explicit system for setting objectives and standards with all its employees and for monitoring and evaluating their performance. To ensure that the NDPL has a fair and objective system for the evaluation of performance. To promote and support performance/behavior which is aligned with the NDPL’s values based culture. To facilitate communication of all aspects of performance between the employee and the supervisor. To enable and encourage all employees to take personal responsibility for their performance and their development. To identify areas in which improvement and learning will help the employee become more successful in the future, allowing him/her to make further contributions. To identify training needs annually. To achieve these objectives, it is necessary to document performance in a way that not only describes what the employee accomplished, but also the quality of the employee’s accomplishments. This requires that the appraisal address performance in a measurable and observable way. ELIGIBILITY Any employee who joins NDPL on or before 31st DEC NDPL is eligible for performance appraisal.
DEFINITION Appraisee: The person whose performance is being appraised. Appraiser: The person whom the appraisee is directly reporting to.
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Reviewer: The head of the concerned department to which the appraisee & the appraiser belongs to. Performance Appraisal Cycle It will run from April of first year to march of successive year. Responsibility
Reviewers and Appraisers Each appraiser is responsible for setting and communicating clear performance standards for his/her subordinates at the beginning of and throughout the review period Appraisers are also required to conduct an annual performance discussion to provide feedback about actual performance as compared to the standards. Reviewers & appraisers are responsible for timely & effective processing of performance appraisals.In case, appraiser resigns before completion of appraisal cycle then he/she must appraise his /her subordinates before he/she gets relieved from the services considering that appraisal period is not less than 90 days.
Human Resource Department HOG (Talent Management Group) is responsible for providing materials used in the annual performance appraisals each year, monitoring the process and filing all completed appraisals.Head HR is responsible to ensure process integrity and objectivity, calibrated ratings- normalization & moderation and process consistency across the organization. HOG (TMG) will also provide training and consultation to appraiser / reviewers as needed. Functional heads, reviewers, appraisers & HR must keep HR ratings confidential. Appraisee Appraisee is responsible for working with their appraisers to identify and develop agreed upon responsibilities, expectations, performance standards and areas of development.Appraisee is responsible for completing a self- review to assist in the appraisal process. Procedure The process is initiated in the end of February and ends by mid of May for the appraisal period under consideration. The performance appraisal system of NDPL is 5 point rating scale i.e. Excellent, Very Good, Good, Average, Below Average. Excellent: Goes beyond expectations of job / role, takes initiatives and is keen to improve work processes. Contributes to business/organizational excellence. A role model for others. Very Good: Meets all stretched expectations of job, is systematic and quality conscious and makes some contributions towards business/organizational excellence. A complete Role Fit Good: Meets expectation of jobs. Needs guidance & certain amount of follow up in order to achieve his/her activities/targets. Average: Just able to meet part of the job/role expected, needs regular monitoring & follow up. More activity focus & not result oriented. Below Average: Continuous denial of taking ownership, misses timeliness. Not even able to complete routine activities of his job.
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The process is initiated in the end of February and ends by mid of May for the appraisal period under consideration.The process starts with the adequate communication by Talent Management Group. The appraisee will do self appraisal and will give it to the appraiser. Appraisee will meet appraisee and conduct appraisal discussions. The appraiser will then complete the appraisal form. The Appraisal form will be forwarded to the reviewer for his/her comments. In case there is a difference of opinion in reviewer’s rating & appraiser’s rating , rating of the reviewer will be considered final. Completed forms will then be sent to Talent Management Group, HR by reviewer. The rating is given on the basis of KRA’s i.e. Key Result Areas of the employee which is set in the beginning of the year or at the time of joining (in case of new employees).
After the preparation of the master file, the employees are segregated departmental wise and the segregated data is sent to various departmental heads for normalization.
A bell curve is decided for every function/department as per standards according to which data is normalized.eg. :
There are 50 people in a department then 10% should be given Excellent, 30% should be given Very Good, 40% should be given Good and 20% average & below average, which turns out to be 5 employees for Excellent , 15 for Very Good , 20 for Good and 10 for Average & Below Average.
The departmental Head will normalize the data according to the Bell Curve in case the ratings received are deviating from the approved bell curve structure and will send it back to the HR Department.
Now, one more column will be added to the master file for this moderated rating, which would be considered the final rating on the basis of which increments and performance pay would be decided.
NDPL has different appraisal forms for Executive and Non-Executive category. The executive’s forms are detailed one requiring information like-Performance Appraisal Goals/KRA’s Functional Targets e.g. pertaining to assigned responsibilities and their weightages. Achievements of the appraisee Appraiser’s and Reviewer’s assessment Hindrances faced by the employee while working, if any. Any additional responsibility handled over and above the KRA’s and achievements. Tata Leadership Practices (TLP) like strategic capabilities, managing vision and purpose etc to be marked on 5-point rating scale. Core Values like Integrity, Responsibility etc. Need for Job Rotation, Coaching, Counseling and training. Potential Assessment. Performance Summary.
34
Overall Performance Rating. Wherein the non-executive’s forms are brief and requires basic details like –Major roles and responsibilities. Area of improvement. Training and Development.
BASIS OF APPRAISALThe appraiser evaluates the performance of the appraisee on the basis of COMPETENCIES and CORE VALUES. The competencies comprise of incorporation of SKILL, KNOWLEDGE and ATTITUDE. It provides an aid in the assessment of what employee has accomplished and the mode of accomplishment of the prescribed goals. Competency appraisal is more qualitative in nature. This appraisal is more future oriented, have longer range and is much useful for the development and career path planning. Competency Appraisal focuses more on the ‘how’ of performance. It also takes into account the behavioral changes of the employee. There is another aspect in the assessment of an employee and that is performance of the employee. It emphasizes on ‘what’ aspect of performance. It is more quantitative in nature and is tied to unit goals. It has a short tem frame say one year and is based on the past performance of an employee during that time span. The performance is more reward oriented concept. Core values are the most important values which the employee must possess to perform his duties with diligence. It includes INTEGRITY, RESPONSIBILITY, UNITY, EXCELLENCE and UNDERSTANDING. The appraiser rates the employee on these values according to the five point rating scale.After obtaining the scores from the appraisee and appraiser the reviewer consolidates the two scores and gives his final ratings. He rates the employee on the five point rating scale. Then this rating is sent to the HR Department wherein the HR executives maintain the records of the aforesaid scores of each employee by feeding the data and developing a soft copy of the same. Then the data is sent back to the various department heads to which each employee belongs. The data received by various departments is normalized to calculate the amount of increments. The deserving employees are shortlisted to whom the increment and promotion is to be offered, based on the budget set in advance and intimated to the various departments by the finance department of the organization. Then again the normalized data along with the complete information is forwarded to the HR Department and the increments are awarded there and then. The job rotation needs if approved by the appraiser is also considered and the employee is transferred to the desired department. If the employee has an overall rating of below average discussions are held with that employee for his poor performance. The employees are also provided with the training and coaching desired by the employee if approved by the appraiser.
Procedures for appraising transferred employees or employees who are simultaneously supervised by more than one supervisor during appraisal cycle If, during an appraisal period, an employee is transferred from one appraiser to another in less than 9 months then the annual performance appraisal shall be conducted by each appraiser of the employee for the period the employee was supervised by each appraiser. Both appraisal forms will be submitted to the current reviewer and his/her ratings will be considered as final
35
If, during an appraisal period, an employee is transferred from one appraiser to another after completion of 9 months then the appraisal will be done by the reporting officer with whom he/she has spent more time i.e. 9 months or more In the event an appraisee is simultaneously supervised by more than one appraiser during the same appraisal period, the appraisal will be done by both the appraisers and the rating given by the reviewer will be considered final
Guidelines for the Appraiser Monitoring of performance should be ongoing and feedback should be specific and timely. The detail and outcome of discussions about performance should always be recorded. Avoid allowing a strong factor of the employee’s performance to influence another factor that needs improvements, or that is weak to influence another that is outstanding. Do not let personal feelings influence the evaluation. Provide constructive, specific feedback Give specific examples to illustrative your points. Feedback should be descriptive and informative, not judgmental. Information contained in a performance evaluation is personal and must be treated with great sensitivity. In all instances, the appraisal shall be an analysis of the employee’s performance
of previously established objectives in the employee’s performance plan for the
year.
E-PMS
From this year onwards electronic appraisal system has been launched in NDPL for
the executive category and above.
It is a great step in the technological advancement of the whole system.
It was launched as a pilot process organization wide.
Earlier it was done manually but now a software SAP has been taken from SAIGUN
SOLUTIONS ON TRIAL basis.
It was formerly launched on 21st April. across all branches.
Initially a self appraisal presentation module was introduced so as to enable the
appraise submit the appraisal himself.
Extensive training sessions were conducted at the conference halls namely ‘megawatt’
and ‘kilowatt’ at the corporate office
36
There were numerous queries faced by the appraisees, appraisers and reviewers with
regard to login, KRA’s, weightages , ratings etc. which were handled well by the
executives of talent management group.
Since the whole work is carried out through systems the rationale behind launching this
system was:-
to make the task more convenient , organized and structured.
To fasten up the process so that the next schedule of activities are carried out on
timely basis.
To reduce the unnecessary paper work so that compilation and assembling can be done
quickly.
Some Eligibility conditions for going thru’ E-PMS are :The employee who has joined after January ‘08, need not to fill their appraisal forms. If the employee have been transferred during the year then the latest appraisal would be done online and the older one manually. After the office orders have been received by the competent authorities i.e. the HR Department, the work of PMS takes a fight. The foremost step towards this was feeding of KRA (KEY RESULT AREAS) i.e. the areas on the basis of which the employee’s performance is supposed to be evaluated. KRA are the goals which are set by the employee in consultation with the appraiser at the beginning of the year or at the time of joining if he’s a new employee.The appraisal of an employee is done at three levels. First level is at apraisee’s level where employee himself evaluates his performance. The next level is at appraiser’s level where the reporting officer i.e. the appraiser evaluates the employee’s performance and the final evaluation is done by the reviewer. To begin with, at the first level the appraisee at the time of goal setting fills up his KRA and will define his measures and the targets would be further sent to the appraiser. Then the role of the appraiser comes, in which he gives weights to the KRA and approve the goal sheet drafted by the appraisee after having discussion with the appraiser. The KRA with their weights can be viewed both by the appraisee and the appraiser throughout the year. The appraiser fills his part, evaluates the employee and further forwards it to the reviewer. A copy of the same is sent to the appraisee. The appraiser can also attach an additional task sheet, coaching and job rotation need. The appraisee can view his goal sheet along with the KRA ratings marked by the appraiser. The additional task sheet, coaching and job rotation needs can also be viewed by him.
37
At the third level there is a provision of forced ranking for the reviewers. The reviewer while performing forced ranking is able to see the appraiser’s and reviewer’s final rating This forced ranking is made in order to compare the employees of same rating which is of great help at the time of normalization done at the level of Functional Head. He can also go back and see the appraised forms of the appraisee, if required. The PMS Module fetches the required information like reporting relationships, location departments, designations etc. from SAP database. In E-PMS although the reviewer is able to access the entire form but this won’t enable him to edit the appraisal done by the appraisee and the appraiser.The appraisal form to be viewed by the employee in E-PMS would contain the target and measure and the achievement reported by the appraisee, appraiser and the reviewer. The weights awarded to each key area should stand at 100 and should neither exceed nor be less than the prescribed figure. This weighted score given by the appraisee, appraiser and the reviewer is supposed to be computed for the each KRA. Further these scores are auto-calculated and are visible to each of them – the appraisee, appraiser and reviewer.Since the training sessions are required in the working area, for an employee, training forms an integral part of the follow up of the whole program, the incorporation of a training planner becomes an essential need for the system. The training planner provides a reference and an expert guidance in selection of the training programs. Apart from this an alternative option has also been provided in which a URL is provided and the employee can click and view the training projects and codes and then he can choose the training project by entering the right code. The task of Performance Appraisal took place in the month of February. Budget
list was prepared and the model for distribution of performance appraisal
rating so as to ensure normal distribution for the company for the year 2007-08
was finalized.
Performance Pay is calculated on the basis of employee ratings, their designations and number of days worked in the organization. It increases with the rise in level. It is paid once in a year.
Increment is based on preset percentage and prorated on the basis of number of Months an employee has worked in the last financial year. It is incorporated in the salary of the employee.
After the preparation of the Salary Sheet, it is sent to the CEO for his final approval. After the approval of the salary sheet by the CEO, it is used for providing increment and performance pay to the employees.
After completion of the above tasks, although the Performance Appraisal comes to an end but the Performance Management System continues in the organization.
38
RESEARCH METHODOLOGY
RESEARCH DESIGN
Research design is descriptive in nature
SAMPLE DESIGN
In this study the population size consists of the employees of executive category and above who were eligible for e-pms. The sample size is 31 due to paucity of time.
Convenience sample method is adopted for selecting sample for the study.
DATA COLLECTION
Both, primary and secondary data were collected and used for the study. The required secondary was collected through journals, newspapers, books, reports etc. The required primary data were collected from respondents by face-to face approach using questionnaire. To collect primary data, a structured questionnaire was prepared covering most of the aspects of the objective of the study.
39
STATISTICAL TOOLS USED
PERCENTAGES ‘FACTOR ANALYSIS’ TECHNIQUE OF SPSS
GRAPHS AND PIE DIAGRAMS
DATA ANALYSIS
AND FINDINGS OF
40
THE STUDY
CONDUCTED
Ques.1 Are you satisfied with the present performance appraisal system in the
company?
41
16%
52%
16%
16% 0%strongly agree
agree
neutral
disagree
strongly disagree
The above drawn graph depicts the satisfaction level of employees at NDPL with
respect to the performance appraisal policy of the company. Currently there is three
tier system prevalent consisting of appraisee , appraiser and the reviewer. It enables
the periodic evaluation of the job performance of the employee.
52% of the employees feel that they agree with the policy.
16% of them feel that they strongly agree with the policy.
16% of them are neutral with respect to the policy.
Again 16% disagree with the policy of the company.
Ques 2 Do you recommend 360 degree feedback in the company ?
42
Graphical representation of preference for 360 degree feedback for performance
35%
41%
9%
12% 3%strongly agree
agree
neutral
disagree
strongly disagree
The above graph depicts the recommendation of 360 degree feedback in the company
Because currently there is only three tier system as part of the policy.
As per the survey 41% agree that it should be incorporated in the policy.
35% strongly agree that it should be enforced in the next appraisal cycle.
12% disagree with this feedback.
9% are neutral about this concept.
And 3% disagree with it and are satisfied with the existing system.
43
Ques. 3 Are you satisfied with annual rating system?
Graphical representaion of the satisfaction level with respect to the annual rating system
13%
45%
29%
13% 0%strongly agree
agree
neutral
disagree
strongly disagree
The above pie diagram depicts the satisfaction level of the employees with respect to
the
Annual rating system in the company which actually determines their increment and
Promotion.
As per the survey 45% respondents feel that they agree with the annual rating system
29% of the employees are neutral about the annual rating system.
13% of the employees strongly agree with the system and
13% disagree with the ratings and feel that is should be done either bi-annually or
Quarterly.
44
Ques.4 Your preference lies with
This year onwards electronic appraisal was launched in the company as a pilot phase
for the executive category and above. Earlier it was done manually for all category of
employees. The rationale behind E-PMS was to fasten up the appraisal process so that
next round of activities can be taken up quickly.
As per the feedback survey ,
93.5% of the respondents feel that their preference lies with the electronic system in
the
45
Preference for medium of appraisal
0
5
10
15
20
25
30
35
Manual appraisal Electronic Appraisal
Series1
Company.
And 6.5% of the respondents feel that same manual system should be continued as
before.
Ques. 6 Would you like to recommend this software for the employees (supervisory
and non-executive) category ?
The above diagram depicts the recommendations of the respondents to launch the
46
Recommendation of E-PMS for next category (supervisory and non-executive)
77%
23%
Yes
No
Software for the next category of employees i.e. supervisory and non-executive of
employees from next year onwards. Since it was successfully launched this year for
the executive category and above, it was recommended to introduce it for the
subsequent categories as well.
As per the survey ,
77% respondents felt that it should be launched and
23% of them feel that it should not be launched for the non-executive and
supervisory category owing to the cost of the training.
Ques.7 How do you rate the reward and recognition policy of the company?
Rating for Reward and Recognition policy
10%
23%
26%
31%
10%
Below Average
Average
Good
Very Good
Excellent
47
The above graph depicts the ratings given to reward and recognition policy of the
company. It is an effort to recognize contributions and reward deserving employees.
Rewards are given for outstanding performance that advance the organisation’s
Goals and will be tied to a specific accomplishment.
When the survey was carried out it was found that
31% of them felt that it is a VERY GOOD policy
26% of the respondents felt that it is GOOD policy.
10% of them found the policy EXCELLENT as it contributes to the overall objectives
of the organization and the approach is formal.
23% of the employees interviewed found the policy AVERAGE and
10% of them found it BELOW AVERAGE as it fails to recognize the efforts of the
employees.
Ques. 8 Do you find Reward and Recognition a transparent process?
Reward and Recognition as transparent process
3%
32%
36%
26%3% Strongly agree
Agree
Neutral
Disagree
Strongly disagree
48
When the respondents were asked about the transparency of the reward and
recognition
Policy of the company, following were the findings
3% of the respondents strongly agree that is a transparent process and their efforts
are recognized.
32% of the respondents agree that it is a transparent process and it gives them
opportunity
to perform even better.
36% of them found it a neutral process
26% of the respondents found that it is not a transparent system of recognizing
employee’s potential.
3% of them found that it is not transparent at all.
Ques. 9 Do you think it is successful in motivating and encouraging the employees
for productivity?
49
How far Reward and Recognition encourages productivity?
10%
45%32%
10%3%
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
Reward and recognition policy is characterized by scheduled ways of
acknowledging contributions and accomplishments of an individual or team. It is
formal process and provides more frequent opportunities to recognize employees.
As per the survey,
45% of the respondents agree that it encourages productivity.
10% of the respondents strongly felt that it encourages productivity.
Again 10% of them disagree that it encourages productivity.
32% of them were neutral and
3% of the respondents strongly disagree with the policy as they think that it
should be on monthly basis and it should be more transparent.
Ques.8 What other motivational tools do you think should be incorporated to
boost the Morale of the employees?
Around 31 employees were asked and their responses have been clubbed as under-
50
There should be more transparency in the system.
There should be more group Cultural activities and more employee engagement activities
More recreational activities should be there and outstation trips should be organized for
good performers.
More liberal policies should be the eg. Car policy, home loan policies.
There should be more integration of processes and interdepartmental allignment should
be brought.
As far as the reward and recognition processes are concerned it should be more
transparent, monthly departmental rewards should be there
Proper counseling should be there for employee improvement.
Appraisal should be half yearly and it should be 360 degree.
Instant appreciation notes like “Good work done” should be given to them.
More MTMs (Management Team Meetings) over a cup of coffee.
Heirarchy should be revisited in terms of designation.
51
Ques 9. Do you think NDPL offers unique opportunity for career growth?
Following is the summary of responses given by the employees-
1. Some respondents feel that it offers unique opportunity to the employees
2. Some of them are not satisfied and feel that it doesnot offer such opportunity.
Because-
No specific policies for females
Limitations with regard to the monetary aspect as it is a regulated entity.
Very slow processes.
3. Some respondents feel that success stories should be published to motivate people.
4. Rotation should be done at all levels.
52
Factor Analysis Technique of SPSS
Ques. 5 How do you rate electronic appraisal on a scale of 5 on the basis of-
Training for appraisal
Design/visibility of forms
Understanding
Accessibility
Convenience
IT challenges and problems
Timeliness
Comprehensiveness
Correlation Matrix
VAR00001 VAR00002 VAR00003 VAR00004 VAR00005 VAR00006 VAR00007
Correlation VAR00001 1.000 .563 .683 -.046 .471 .121 .450
VAR00002 .563 1.000 .782 .285 .707 .298 .408
VAR00003 .683 .782 1.000 .289 .689 .325 .432
VAR00004 -.046 .285 .289 1.000 .423 .230 .043
VAR00005 .471 .707 .689 .423 1.000 .310 .656
VAR00006 .121 .298 .325 .230 .310 1.000 .429
VAR00007 .450 .408 .432 .043 .656 .429 1.000
VAR00008 .087 .411 .286 .049 .290 .410 .148
53
Total Variance Explained
Compo
nent
Initial Eigenvalues
Extraction Sums of Squared
Loadings
Total
% of
Variance
Cumulative
% Total
% of
Variance
Cumulative
%
1 3.787 47.332 47.332 3.787 47.332 47.332
2 1.213 15.161 62.494 1.213 15.161 62.494
3 1.044 13.054 75.547 1.044 13.054 75.547
4 .844 10.553 86.101
5 .518 6.469 92.570
6 .272 3.403 95.973
7 .182 2.273 98.245
8 .140 1.755 100.000
54
Component Matrixa
Component
1 2 3
VAR0000
1.676 -.591 .085
VAR0000
2.861 -.055 -.075
VAR0000
3.873 -.175 -.118
VAR0000
4.361 .504 -.749
VAR0000
5.869 .002 -.206
VAR0000
6.521 .552 .343
VAR0000
7.685 -.140 .232
VAR0000
8.448 .502 .493
Extraction Method: Principal
Component Analysis.
a. 3 components extracted.
Findings and Analysis
The three matrices obtained here are-
1) CORRELATION MATRIX
2) TOTAL VARIANCE EXPLAINED
3) COMPONENT MATRIX
55
In the first matrix correlation between various variables have been explained. There is a very
high correlation between the training for appraisal and understanding of the forms as it was
launched as a pilot phase in the organization, intensive training was given to the employees so as
to acquaint the well with the system. Same is the case with understanding of the forms and
visibility of the forms. Convenience is also an important factor as there is reduced paper work and
filing of forms.
In the second matrix first three components have been highlighted and their relevance
has been explained by way of eigen values. The significance of a factor is highlighted more Most
significant factor that has emerged out as training of appraisal because it was conducted
exclusively in KILOWATT and MEGAWATT rooms to explain various issues with regard to the
KRA’s, weightages, ratings etc.
In the last table the first three components ie TRAINING FOR APPRAISAL,DESIGN AND
VISIBILITY OF FORMS AND UNDERSTANDING have absorbed various other factors.
Limitations of the study
The period of eight weeks was inadequate for the detailed analysis of the
research undertaken.
56
Due to paucity of time only a small sample size of 31
respondents could be approached.
My analysis was restricted to only executive category and
above.
The respondents were hesitant in sharing their opinions and
could not complete the questionnaire.
Conclusion
57
I worked with NDPL for 2 months and was responsible for the various tasks associated with Performance Appraisal, at various levels. I had undergone a complete transition phase ie from a student to a management trainee.The entire journey was full of learning and was an exciting interface. I got to know about the whole Performance Appraisal System that what it is and how it is carried out. I became aware of the importance and need of Performance Appraisal System in an organization. While performing the various tasks, I became well acquainted with various aspects of Performance Appraisal System like Key Result Areas, Competencies, TLPs, ratings etc. I was involved in the audit of the same as well. I was also associated with activities like reward and recognition, summer training process organization wideThe best part was the analysis of the questionnaire that was structured and I must confess the support that I received from my mentor was immense. Also I could draw meaningful conclusions which enabled me understand the concepts better.
Recommendations
58
During my training at NDPL, I have some suggestions and recommendations which are as follows:-.
The processes should be made more faster. More transparent system should be incorporated. If possible 360 degree appraisal should be there. Appraisal should be done bi-annually. Short ‘Good work’ appreciation notes should be given. More group incentives should be given. Informal telecalls by senior people for employees doing sincere work. There should be more frequent interactions with the management.
APPENDICES
COPY OF QUESTIONNAIRE
59
REFERENCES
Feedback questionnaire of the Present Performance Management System
60
1. The purpose of this study is academic research and it does not pertain to any Organizational purpose or its involvement. 2. Your response will help me to understand the topic and complete my research. 3. Your responses will be kept confidential & will not be shared with anyone.
NAME AGE:
EMAIL ID Total Experience:
CONTACT NO.
1.) Are you satisfied with the performance appraisal system in the company?
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
2.) Do you recommend 360 degree feedback in the company?
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
3.) Are you satisfied with the annual rating system?
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
4.) YOUR PREFERENCE LIES WITH-
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a. Manual appraisal
b. Electronic appraisal
5.) HOW DO YOU RATE ELECTRONIC APPRAISAL ON ACCOUNT OF -
BASIS 1 2 3 4 5
Objective of PMS
Training for Appraisal
Design / Visibility / of forms
Understanding
Accessibility
Convenience
IT-Challenges & Problems
Timelines (time taken)
Comprehensiveness
6.) Would you like to recommend this software for the other employees (supervisory and non-executive) category?
a.yes
b. no
7.)How do you rate the Reward & Recognition policy of the company?
1 2 3 4 5
8.) Do you find it as a transparent process?
Strongly agree
Agree
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Neutral
Disagree
Strongly disagree
9.) Do you think it is successful in motivating and encouraging the employees for productivity?
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
10.) What other motivational tools do you think should be incorporated to boost the morale of the employees? (kindly state)
11.) Do you think NDPL offers unique oppurtunity for career growth?
Respondent no……..
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REFERENCES
NDPL –opedia Official websites and documents K.K. Ahuja and Balvinder Shukla ( Human Resource
ManagemenT HRM Review Journal Stephen Robbins (Organizational Behavior) www.citehr.com Search engines- google yahoo
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