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    • Summer Training Project Report ON EFFECTIVENESS OF PERFORMANCE MANAGEMENT SYSTEM OF NTPCSubmitted in Partial fulfillment of requirement of award of MBA degree of GGSIPU, New Delhi Submitted By Nidhi Aggarwal 04715603911 Third semester 2011 Batch Northern India Engineering College (Affiliated to GGSIPU) FC-26, Shastri Park, Delhi-110053
    • AcknowledgementTo accomplish a project work like this efforts of many people are required andours is not an exception, a number of people have helped us. First of all we wouldlike to thank Sri S.R Sahoo (manager-HR (RECIT),Mr Chandramauli(Seniormanager-HR-Wages). I convey our special thanks to Miss Pratibha(Sr.Manager-HR(wages)) for her guidance during the course of our project study andall those persons who helped us in getting grass root information about NTPC andthe performance management system working there, from whom we receivedvaluable co-operation, useful suggestions and relevant data and informationpertaining to our project and responses to questionnaire. We are thankful to all ofour friends who have been a source of motivation to us. At last but not least we convey our heartily gratitude to our MBA H.O.D MrD.K Gupta and all the faculty members of MBA program, N.I.E.C for theirconstant guidance and help. Finally we thank God who blessed us in our endeavor. Nidhi Aggarwal MBA-HR (20011-2013) MBA program, N.I.E.C Shastri Park
    • INDEXS.NO TOPIC PAGE NO. SIGNATURE 1. Acknowledgement 2. Index 3. Objectives of the study 4. Introduction to the company/ topic 5. Literature Review 6. Research Methodology 7. Data Analysis 8. Findings & Conclusion 9. Recommendations 10. References 11. Annexure
    • OBJECTIVES OF STUDYTo identify factors in business dynamics to grade employees on theobjectives & transparent productivity parameters.To study about the system of self appraisal, appraisal by reporting officer, byreviewing officer and final assessment by moderation committee.To study about create a direct link between rewards & performance toincrease the motivation level of employees.To study about assessment of training & developmental needs of individualemployees.To study and make employees completely aware about the parameters usedfor evaluation of their performance.
    • INTRODUCTION TO NTPC
    • INTRODUCTION TO NTPCNTPC: India’s largest power companyEstablished on 7th November 1975 to play a major role in the development ofIndian Power Sector: NTPC Limited is today India’s largest power company withan installed capacity of 31,704 MW Lighting up more than one fourth of Indiathrough its 15 coal based 7 gas based and 5 joint venture projects, NTPC Limitedplans to become a 75,000 MW Company by the year 2017 with a vision tobecome a world class integrated power major with increasing global presence.NTPC Ranked No. 1 Independent Power Producer in Asia and 2nd in the world inthe Platts Top 250 Global Energy Company list for 2009. Ranked number ONE inthe category the Best Workplaces for Large Organizations and number tenthoverall for the year 2009 by Great Places to Work Institute’s India chapter incollaboration with Economic Times.
    • NTPC: At a GlanceCategory No. of stations Capacity (MW)Coal based station 15 24,885Gas based station 7 3,955Joint venture 5 2,864Total 31,704Details of power Stations(NTPC)Project State Capacity(MW)a. Coal BasedSingrauli Uttar Pradesh 2000Korba Chhattisgarh 2100Ramagundam Andhra Pradesh 2600Farakka West Bengal 1600Vindhyachal Madhya Pradesh 3260Rihand Uttar Pradesh 2000Kahalgaon Bihar 2340Dadri Uttar Pradesh 1330Talchar Kaniha Orissa 3000Unchahar Uttar Pradesh 1050Talchar Thermal Orissa 460Tanda Uttar Pradesh 440Simhadri Andhra Pradesh 1000Badarpur Delhi 705Sipat-II Chhattisgarh 1000 Total 24885
    • b. Gas BasedAnta Rajsthan 413Auraiya Uttar Pradesh 652Kawas Gujrat 645Dadri Uttar Pradesh 817Jhanor Gujrat 648Rajeev Gandhi(Kayamkula) Kerela 350Faridabad Haryana 430 Total 3955c. Joint VentureRoukela Orissa 120Durgapur West Bengal 120Bhilai Chhattisgarh 574Ratnagiri Maharashtra 1940Kanti Bihar 110 Total 2864 Total Production(a+b+c) 31704
    • Subsidiary companies of NTPCNTPC – Joint Ventures (15) NTPC – Joint Ventures (15) GENERATION SERVICES POWER EQUIPMENT COAL ARAVALI POWER TRADING MANUFACTRUI ACQUISITION COMPNAY PVT LTD UTILITY G PTC INDIA INTERNATIONAL 50% POWERTECH LTD LTD NTPC BHEL COAL VENTURES 50% 5.28% POWER PROJECTS LTD NTPC TAMIL NADU PVT LTD 14.28%ENERGY COMPNAY LTD NTPC ALSTOM NATIONAL POWER SERVICES 50% 50% POWER NTPC SCCL PVT LTD EXCHNAGE BF NTPC ENERGY GLOBAL NABINAGAR POWER 50% LTD SYSTEMS LTD VENTURES PVT GENERATING 16.67% 49% LTD COMPNAY LTD NATIONAL HIGH POWER TEST 50% 50% LABORATORY PVTMEJA URJA NIGAM LTD LTD 50% 25% NTPC SAIL POWER COMPNAY PVT LTD 50% RATNAGIRI GAS AND POWER PVT LTD 29.65%
    • Electrifying performanceThe company recorded a total generation of 218.84 Billion Units (Bus) showingan increase of 6% over the pervious year’s generation of 206.93 Bus with a shareof 20% (Ines of JV company) in the total installed capacity of the country NTPCgenerated 28.6% electricity during 09-10. Exceeded the MoU ‘Excellent’ target of217 BUs. Vision “A world class integrated power major, powering India’s Growth, with increasing global presence.”Core Values Business ethics Customer focus Organizational & Professional Pride Mutual Respect and Trust Initiative and speed Total Quality for Excellence
    • FINANCIAL FACTS >>> 100% realization of the billing for the seventh consecutive year. Provisional and un-audited Net Sales of Rs. 46,504.47 crore during 2009- 10 as against Rs. 41,791.30 crore registering an increase of 11.28%. The provisional and un-audited Gross Revenue is Rs.49,478.86 crore during 2009-10 as against Rs.45,272.76 crore for the year 2008-09, an increase of 9.29%. Provisional and un-audited Profit after tax for the year 2009-10 is Rs.8,656.53 crore as compared to Rs.8,201.30 crore during the year 2008- 09, an increase of 5.55%. Highest interim dividend @ 30% amounting to Rs. 2,473.64 crore paid during the year. Capital Expenditure of Rs. 10,137.18 crore during 2009-10; NTPC Group’s capital expenditure was Rs. 14,002.11 crore. Approved outlay for 2010-11 for NTPC’s capital schemes is Rs.22,350 crore; for NTPC Group the outlay is around Rs.29,104.06 crore. Contributed Rs.3,260.21 crore to exchequer on account of Corporate tax, Dividend and tax thereon and wealth tax.Shareholder WealthThird largest market capitalization of over Rs.1,70,000 crore as on 31-03-2010.Growing Stature Recommended for “Maharatna” status. EXCELLENT rating under Government of India MoU for the year 2008-09.Bulk Tendering
    • Tendering undertaken for 11 units of 660 MW (including 2 units for DVC).Rural ElectrificationUnder Rajiv Gandhi Grameen Vidyutikaran Yojana, NTPC Electric SupplyCompany Ltd (NESCL) completed electrification of 8017 villages and provided8.65 Lakhs BPL connections, thereby exceeding GoI target of electrification of7500 villages and 8.5 Lakhs BPL connections.Commonwealth GamesOfficial Power Partner of Delhi 2010 Commonwealth Games.Further Public Offer
    • Government shareholding in NTPC reduced from 89.5% to 84.5% throughdivestment of Government stake by 5% under Further Public Offer (FPO).Accolades Top six out of eight National Awards for Meritorious Performance of Thermal Power Stations for 2008-09 instituted by the Government of India won by NTPC coal stations.Simhadri 1000 MW Gold ShieldKorba 2100 MW Silver Shield
    • Ramagundam 2600 MW Silver ShieldDadri (coal) 840 MW Bronze ShieldRihand 2000 MW Bronze ShieldVindhyachal 3260 MW Bronze Shield No. 1 Independent Power Producer in Asia and 2nd globally in the Platts Top 250 Global Energy Company Rankings 2009 THE GROWTH STORY >>> Installed capacity reaches 31,704 MW (including 2864 MW under JVs). All time highest single day generation of 684.55 MUs from all NTPC stations on 31st March, 2010 17,830 MW under construction at 17 locations. .Project (Fuel) , State CapacitySipat-I (Coal), Chhattisgarh 1980Barh –I (Coal), Bihar 1980Korba-III (Coal), Chhattisgarh 500Dadri-II (Coal)-Unit # 2, U.P. 490Farakka-III (Coal), West Bengal 500
    • Simhadri-II (Coal), Andhra Pradesh 1000Indira Gandhi STPP - JV With HPGCL & IPGCL (Coal), 1500HaryanaVallur (Phase -I & Phase –II) (Coal) - JV With TNEB, 1500Tamil NaduNabinagar-JV With Railways (Coal), Bihar 1000Bongaigaon (Coal), Assam 750Mauda-I (Coal), Maharashtra 1000Barh-II (Coal), Bihar 1320Rihand-III (Coal), UP 1000Vindhyachal-IV (Coal), MP 1000Muzaffarpur-II (Coal), JV With BSEB, Bihar 390Koldam (Hydro), H.P 800Loharinag Pala ( Hydro ), Uttaranchal* 600Tapovan Vishnugad ( Hydro ), Uttaranchal 520Total 17,830 MWCapacity Addition in 2009-2010 (1560 MW)Project/ Unit Capacity (MW)NTPC ownedKahalgaon Stage-II 500
    • Dadri Stage-II, Unit # 5 490Under JVsRGPPL Block- I 640Less on account of overall de-rating of RGPPL (-)180Kanti Stage-I 110*Net addition 1560Planned Capacity Addition in 2010-2011 (4150 MW)Project/ Unit Capacity (MW)Sipat Stage-I, Unit-1 660Jhajjar, Unit-1 & 2 1000Korba Stage –III, Unit-7 500NCTPP Stage – II, Unit-6 490Simhadri, Stage-II, Unit-3 & 4 1000Farakka, Stage-III, Unit-6 500Total 4150Future Capacity Under Different StagesProjects for which bids invited 7092 MWProjects for which FR approved 4345 MWProjects for which FR prepared/under preparation ~15,000 MW
    • Growth in Commercial Capacity 1490 MW declared commercial (including 500 MW under JV). New national benchmark: Dadri Unit-5 (490 MW) begins commercial operation in 39 months from zero date.GenerationImpressive Growth RateGeneration increased by nearly 6% to 218.84 BUs compared to 3% generationgrowth achieved in 2008-09; Exceeded the MoU ‘Excellent’ target of 217 BUs. Generation (BUs) 218.84 206.93 200.86 188.67 170.88 2005-06 2006-07 2007-08 2008-09 2009-10Sustaining Market LeadershipContributed 28.6% of total electricity generated in the countryTotal electricity available in the country 771.17 BUs
    • Electricity import from Bhutan 5.34 BUsTotal Electricity Generation in the Country 765.83 BUsTotal Generation from NTPC Units 218.84 BUsNTPC share in total electricity generation in the country 28.6%World Class Capacity Utilization With 90.81% Plant Load Factor (PLF) during 2009-10 (National PLF 77.48%), coal stations achieved PLF of more than 90% for third consecutive year.
    • Six coal stations achieved PLF of more than 95%. Dadri (Coal) Stage I (4X210 MW) achieved highest ever PLF of 100.59 %. Sixteen units recorded more than 100% PLF. Seven NTPC coal stations figure among the top 10 stations in the country in terms of PLF. Highest ever PLF of gas stations at 78.38% (previous year PLF 67.01%).Augmenting Fuel Security Model Coal Supply Agreement signed with Coal India Ltd (CIL) for supply of coal to NTPC stations for 20 years. Gas supplies increase to 13.88 MMSCMD (up 29% over previous year). Long term contract for supply of RLNG of 2.0 MMSCMD on firm basis and 0.5 MMSCMD on fallback basis signed with GAIL for 10 years.
    • Under NELP VIII, NTPC has been allotted one block at Cambay basin as a sole operator and three blocks as a member of consortiums.Coal Mine DevelopmentWorking on captive coal mines with target of 47 MTPA by 2017 from the 6blocks allotted.More than 6735 acres of Land in Pakri Barwadih and about 1594 acres of landin Chatti Bariatu coal block have been acquired and land acquisition forDulanga and Talaipalli are in progress.Rehabilitation Action Plan (RAP) has been approved by NTPC Board for PakriBarwadih, Chatti Bariatu and Kerandari.Mining Plan approved for Dulanga (7 MTPA) and Talaipalli (18 MTPA).JV agreement has been signed with CIL for development, operation andmaintenance of Coal Blocks and Integrated Power Projects.Coal Block Acquisition Abroad Due diligence for acquisition of stakes in two coal mines in Indonesia is under progress and consultant appointed for carrying out due diligence for one coal block in Mozambique.
    • International Coal Ventures Ltd (ICVL) has been incorporated on 20.05.2009 as a JV company of NTPC, RINL, SAIL, NMDC and CIL for sourcing coking and thermal coal from overseas countries like Australia, Mozambique, Canada, Indonesia and USA. ICVL is pursuing 3 thermal coal opportunities in Indonesia, Australia and South Africa.Getting into NuclearJV agreement is expected to be signed shortly with Nuclear Power Corporationof India Limited (NPCIL). Approval has been obtained from Department ofAtomic Energy (DAE).Focus on RenewablesBy 2017, NTPC plans to have at least 1000 MW through renewable energyresources such as wind, hydro, solar, biomass and geo-thermal.Long Term Corporate Plan upto 2032Finalizing the Long Term Corporate Plan of NTPC to set the goals and directionsfor a period of 2032 with a view to positioning NTPC as the world’s largest andbest power producer.
    • Technology Roadmap upto 2032Chalking out a long term technology roadmap upto 2032 which involvesdevelopment, adoption and promotion of safe, efficient and clean technologiesfor entire value chain of power generation business.ENVIRONMENT MANAGEMENT NTPC has adopted advanced and high efficiency technologies such as super critical boilers for the up-coming greenfield projects (e.g Barh, Sipat etc). Out of total coal based capacities to be developed during 12th plan period, over 90% will be based on supercritical technologies. In addition to adopting advanced and high efficiency technologies, NTPC has been pursuing the objective of sustainable power development with following initiatives: CO2 measurement systems are being installed at all our stations in the chimney stacks. 61 Ambient Air Quality Monitoring System (AAQMS) installed in all NTPC stations. Installed Bio–methanation Plant at Faridabad. Creation of green wealth of more than 18.80 million trees.
    • ASH UTILISATION Achieved ash utilization of 59.73% i.e. 27.61 million tons of ash.
    • 10.85 million tons fly ash issued to cement and concrete industry which is8.5 % more than last year.545 million ash bricks have been manufactured in Pilot ash brickmanufacturing plants.1.13 million tons of ash from Talcher-Thermal has been utilized for fillingof abandoned South Balanda coal mine of MCL in Orissa.MoU has been signed with Research Designs & Standards Organization(RDSO), Lucknow to explore use of ash in Railway embankment.
    • HUMAN RESOURCE MANAGEMENTHR Vision:To enable our people to be a family of committed world class professionals, makingNTPC a learning organization.The HR Dept. has a long history in NTPC. This dept. was earlier known aspersonnel dept. then finally HRS(Human Resource Services) HRS contributes its expertise in handling and executing theExisting and Developing HR trends and innovations. Following are the areas ofoperation. :-Employee WelfareEmployee BenefitsEmployee Relations (Industrial Relations)Employee Services (Office Admin.)And PensionsEmployee Services (Town Admin.)Training and Development (EDC)Performance Management System and Human Resource DevelopmentCorporate Social ResponsibilityRajbhasha (Hindi)LawPeoplesoft – HRMS (ERP Software)Public Relations
    • The HR strategy of NTPC has been designed around the four buildingblocks of competence building, commitment building, culture building andsystem building. Culture building is done by creating transparency,openness and ease of communication, strengthening mutual respect andtrust, leading to establishment of a people oriented and people sensitiveorganization. This has resulted in recognition of NTPC as one of the bestemployers in the country as well as obtaining consistently high rankingsin surveys such as “Great place to work” and “Best companies to work for”.Employee Development Centers (EDC) have been set up to cater to theneed of appropriate Training and Development of employees.Leadership Assessment and Development System (LEADS): With a view todeveloping a pipeline of leaders for key leadership positions in thecompany, an initiative named LEADS has been launched. A LeadershipDevelopment Centre (LDC) at corporate centre has been set up toformulate the process of identifying and grooming potential leaders.High Productivity of Team-NTPC: During 2009-10, sales per employeeincreased from Rs. 1.77 crore to Rs.1.96 crore, profit per employeeincreased from Rs. 34.7 lakh to Rs. 36.45 lakh, value added per employeeincreased from Rs. 59.36 lakh to Rs. 72.96 lakh and the man:MW ratioimproved from 0.85 to 0.82.Total employee strength is 24,955 as on 31.03.2010, as against 24,713 on31.03.2009 (including employees in JVs & Subsidiaries).
    • LITRATURE REVIEWWhat Performance Management Is Not? it’s not just an annual performance appraisal it’s not imposing targets/goals on an employee by his supervisor it’s not only evaluating individual job performanceWhat is Performance Management: it’s Management By Objectives (MBO) it’s about setting SMARTER goals it’s about planning to perform it’s about periodically reviewing progress in performance it’s about evaluating performance for further improvement it’s about delivering reinforcement for performance success and performance failure
    • BENEFITS OF PERFORMANCE APPRAISAL EMPLOYER’S PERSPECTIVE1. Despite imperfect measurement techniques, individual differences inperformance can make a difference to the company’s performance.2. Documentation of performance appraisal and feedback may be needed for legaldefense.3. Performance appraisal dimensions and standards can help to implement strategicgoals and clarify performance expectations.4. It provides a rational basis for constructing a bonus or merit system.5. Providing feedback is a part of the performance management process.6. Despite traditional focus on the individual, appraisal criteria can includeteamwork and teams can be the focus of teamwork. EMPLOYEE’S PERSPECTIVE1. Performance feedback is needed and desired by the individual employee toimprove his/her performance.2. Fairness requires that differences in performance levels across workers bemeasured and have an effect on the outcomes.
    • 3. Assessment and recognition of performance levels can motivate workers toimprove their performance. PROBLEMS AFFECTING THE VALIDITY OF PERFORMANCE APPRAISAL SYSTEM 1. HALO EFFECTThis type of error occurs when the rater allows one aspect of a man’s character orperformance to influence his entire evaluation. 2. CENTRAL TENDENCYThis error occurs when the rater is in doubt about the subordinates or hasinadequate information about them or is giving less attention and effort to therating process. 3. LENIENCY ERRORSome supervisors have a tendency to be easy raters. Lenient raters consistentlyassign high values to their subordinates. This type of error results in wrongevaluation of the performance of subordinate.
    • 4. STRICTNESS ERRORSome other types of supervisors have a tendency to be harsh in their ratings. Theycontinuously give low ratings to their subordinates. 5. RECENCY EFFECTOften some raters evaluate persons on the basis of their performance in recent fewweeks, average constant behaviour is not checked.
    • PerformanceManagement System At NTPC
    • PMS AT NTPCPMS is a five step process:- Step 1 Step 2 Performance Mid – year planning Review PMS Process Step 3 Feedback Annual Step 5 Assessment Normalisation Process Step 4
    • 1. Performance Planning Performance Planning is the process of: Defining expectations i.e. the work to be done, the results/targets to be achieved and skills/competencies needed to achieve these objectives Setting “Measures” and “Targets”, determining priorities and weightages of results to be achieved Identifying and allocating appropriate resources (such as manpower, tools, training, budget etc.) to enable the executive to achieve the targets While defining work objectives and measures, it is necessary to ensure that: Goals/ Targets/ Objectives are SMART (Specific, Measurable, Agreed, Realistic and Time bound) Results are substantially within the executive’s control Measures relate to results Data is available for measurement Agreement on mutually agreeable and achievable performance targets is arrived at after sufficient discussion between reporting officer and executive has take2. Mid Year ReviewPerformance management is not an event but an ongoing process. Mid yearreviews help in the following ways: Reinforcing good performance in time Updating the status of targets i.e. progress review Identifying areas for “mid-course” correction (37) Revisiting KPAs and goals, if necessary Assessing resource and skill requirements affecting the individual’s performance Discussion and feedback on functional competencies, managerial competencies, potential competencies and core values actualization Providing early warnings of non-performance, i.e. avoiding year end surprises
    • 3. Annual Assessment The objectives of Annual Assessment are to: Discuss and arrive at an assessment of performance with respect to agreed targets Assess the competencies, potential and core values actualization by the individual Agree upon improvement plans and development needs for the individual .4 NormalizationThe objectives of the Normalization System in PMS are to:Ensure parity and integrity by minimizing variation in rating by different reportingofficers across various departments and locations Enhance objectivity andtransparency in the appraisal system To view individual performance from theperspective of organizational achievement.5 Feedback, Coaching and CounsellingIn order to make PMS an open system and to enhance development orientationacross the organization; feedback, coaching and counselling are essentialcomponents. Communicating the final performance results of the executive andproviding developmental feedback are critical to this process. 5.1 Feedback Providing feedback on performance presents the following benefits: Creates transparency making PMS more acceptable to individuals Reinforces good performance on time Enables development of coaching and mentoring relationship between reporting officer and executive Ensures that organizational objectives are achieved to an acceptable standard and in an acceptable form Providing performance feedback is a delicate matter and the reporting officershould create suitable conditions for providing performance feedback in the mosteffective manner. (Refer to appendix for tips to reporting officers on conductingeffective appraisal meetings.) In general:
    • Feedback should be focused on the specific performance actions and not on the personality of the executive Feedback should be generated after reviewing all achievements and issues throughout the assessment period and not focused on isolated incidents Feedback calls for maintaining a log of critical incidents occurring during the assessment period for recording both achievements and failures with details, as an aid to memory during performance discussions with the executive Feedback be given as regularly as possible so that enough opportunities are created for executive to bridge performance gaps through self-development5.2 Coaching and CounsellingCoaching is an on-the-job approach to help individuals to develop and raise theirskills and levels of competence. Coaching typically consists of: Making executives aware of how well they are performing and their present level of knowledge and skill Providing guidance to individuals to enable them to complete their work satisfactorily Motivating individuals to learn new skills and develop themselves (39) Facilitating individuals to raise their level of contribution and achievement.Counselling in the PMS context essentially is a process by which executives canreceive assistance in sorting out issues and related to current and futureresponsibilities and aspirations. Therefore, reporting officers are required toencourage individuals to plan for their own self-development. The process ofcounselling is through: Recognition and understanding of existing strengths Empowering, i.e. enabling the individual to recognize their own problems and expressing the same. Facilitating action through guidance and expertise, i.e. facilitating the process whereby the individual evaluates alternatives and formulates action plans to achieve the most suitable course of action Helping individuals to take ownership of the outcomes of their chosen action.Coaching and counselling together act as a feedback mechanism for the individualon his/her performance. It is often used by reviewer/reporting officer tocommunicate the areas for development and improvement to the executive.
    • KPA Setting Process:Corporate Company Goalsplan MOUsInitiatives Unit Goals Functional /Departmental GoalsSpecial Individual GoalstaskPMS COMPRISES ASSESSMENT ON FOUR PARAMETERS WITH DIFFERENTWEIGHTAGES FOR VARIOUS LEVELSS.NO. PMS PARAMETER WEIGHTAGES FOR DIFFERENT GRADES E1-E3 E4 E5 E6-E7 E7A-E8 E91 KPA 80 75 65 60 50 502 a. Functional 10 10 10 10 10 05 competency assessment b. Managerial 05 05 10 10 15 15 competency assessment3 Potential Nil 05 10 10 10 10 assessment4 Value assessment 05 05 05 10 15 20
    • Total 100 100 100 100 100 100For junior executives there is higher weightage on KPAs and functionalcompetencies as there is higher focus on achieving the immediatefunctional task.The weightage on Managerial competencies and values increases for anexecutive as the grade increases because of importance of achievingbusiness goals by managing work of other employees through ethicalmeans.At NTPC Online Performance Management System is being practiced forExecutives. For Non Executives it is still manual.Thre are three major challenges in effective implementation of PMS atNTPC1. Involvement of big number of executives (approx 1200) in designing of KPAs and Competency Directory.2. Skill gap in feedback and performance counseling.3. Transformation from legacy to transparent system.
    • VARIOUS KINDS OF PERFORMANCE APPRAISAL SYSTEMS  Personality based performance appraisal system:Here the appraiser is supposed to rate the personality traits of the person beingappraised. This is not in much in organisations as it very subjective and judgmental. Itcould also be biased and prejudiced.  Competence based performance appraisal system:Here the job analysis is used and the employee is appraised for the skills heexhibits. For e.g. if his job entails dealing with the clients then he is judged foe hiseffectiveness in dealing with them. This enables both the organisation and theemployee as to what deficiencies are to be overcome and can be useful inproviding training to the employee to better his performance.  Result based performance appraisal system:This system concentrates on the final results achieved by the employee irrespectiveof his personality or deficiencies. This is totally related to the job and concentrateson the end results that are more important to the organization. Thus Performance Appraisal is the process to establish the competencyand the learning gap in addition to reward system. Performance increment woulddepend on the performance appraisal input for the department and the managementfor decision making. Human Resources would craft the notice and letter tocommunicate to the employees. This is also an important issue. Human Resourcesis the corporate communicator and is responsible for employees communication (56)
    • Roles and Responsibilities1 Role of Executive: The executive shall fill out appropriate portions of the form, attend the PMS meetings at all stages (performance planning, mid-year review and annual assessment) and be prepared to have an open and frank discussion about his/her performance. The PMS aims at creating amity and convergence of individual and organizational goals and it should be taken in that spirit. The executive is required to show the necessary flexibility and adaptability to the organisational needs and display system discipline through adherence to all PMS requirements.2 Role of Reporting Officer The reporting officer shall cascade the KPAs based on MoU targets to the executives reporting to him in a fair and achievable manner with necessary stretch for individual excellence. The reporting officer should set up performance planning, mid-year review and annual assessment meetings with all the executives reporting to him within the specified periods as per the PMS calendar. The reporting officer shall maintain a brief log of all critical incidents occurring within his scope of work as an aid to memory while completing the mid year review, annual assessment and giving feedback to the executive. The reporting officer shall carry out the PMS scoring of all executives reporting to him in an objective manner and such that the scores are distributed in a manner requiring minimum adjustment and/or normalisation by either the reviewing officer or the Performance Management Committee. In the event of change of KPAs, measures, targets etc., the reporting officer is required to obtain clearance from Reviewing Officer prior to making the change. (57)
    • 3 Role of Reviewing Officer The reviewing officer shall go through PMS forms for all executives under his purview and ensure that the reporting officer has been objective and unbiased in his scoring of various executives, particularly with respect to the sections relating to Competencies, Values and Potential Where required, the reviewing officer may recommend some changes to the scores after carrying out a detailed discussion with the respective reporting officer The reviewing officer shall also carry out an integrity check to ensure that the scores awarded to all the executives under his/her purview are distributed in a manner requiring minimum normalisation by the Performance Management Committee. Where an executive has a grievance against the reporting officer regarding the PMS process, the reviewing officer shall intervene and settle the grievance in a fair and objective manner. The reviewing officer shall also be responsible for ensuring “stretch targets” for executives under his charge. The Reviewing Officer shall cascade the KPAs in an open and transparent manner with each reporting officer by sharing his KPAs and targets.4 Role of PMS Officer A PMS Officer would be designated for each location (plant/ project/ region/ corporate) The PMS Officer would be responsible for implementing PMS as well as for periodic administration, follow-up, tracking and analysis of PMS activities as per schedule in his/her respective location. To ensure collection, collation and forwarding the Individual Development Needs forms to the concerned EDC/ Regional HRD/ PMI.
    • RESEARCH METHODOLOGY OBJECTIVES OF STUDY To identify factors in business dynamics to grade employees on the objectives & transparent productivity parameters. To study about the system of self appraisal, appraisal by reporting officer, by reviewing officer and final assessment by moderation committee. To study about create a direct link between rewards & performance to increase the motivation level of employees. To study about assessment of training & developmental needs of individual employees. To study and make employees completely aware about the parameters used for evaluation of their performance.RESEARCH DESIGNResearch design was adopted for the “Exploratory Research Study”. The mainpurpose of the study was to formulate the problem in appraisal system forinvestigation. The major emphasis was on the discovery of ideas & opinions of theemployees at different levels to improve the existing appraisal system. Twomethods were used for the study-:1. The survey of concerning literature.2. The experience survey
    • SAMPLING DESIGNThe sampling design used for the study was “Stratified Sampling”. The differentstrata or homogeneous group formed was-: ExecutivesSAMPLING UNITThe sampling unit was “National Thermal Power Station”, Lodhi road, NewDelhi.SAMPLE SIZEIn total 42 employees(executives) were interviewed during the study.DATA COLLECTION METHODSIn the survey two types of data were collected-:1. PRIMARY DATAPrimary data are those which are collected for the first time and therefore originalin nature.2. SECONDARY DATASecondary data are those which have already been collected by someone else andhence passed through the statistical process.
    • For the collection of primary data methods used-: QUESTIONNAIRE METHODI prepared a structured questionnaire on the basis of information collected fromdifferent sources. The questionnaire contains both open & closed ended questions.2. SECONDARY DATA COLLECTIONSecondary data were collected from the following sources-:(A) Books related to the topic(B) Company documents(C) Magazines(D) Websites STATISTICAL TOOLS USEDStatistical tools used in the project study are-:1. TABLES2. PIE CHARTS
    • Data Analysis OfFeedback Given By Executives
    • Quest:-1 your job description clearly define KPA’s on which yourperformance is rated.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 12 28AGREE 27 64CANT SAY 0 0DISAGREE 3 7STONGLY DISAGREE 0 0 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference:- They were well aware about there KPAs and felt that it isaccording to there job profile as 92% Executives agreed to it.
    • Quest: 2 -The goals (KPA’s) set are always mutually agreed uponi.e. your consent is taken into consideration while setting KPA’s.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 8 19AGREE 32 76CANT SAY 0 0DISAGREE 2 5STONGLY DISAGREE 0 0 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference: - The response was divided although 76 % Executives agreed abouttheir consent being taken into the KPA setting process, 5% disagreed. It says thatin general executives participate in the KPA setting process but there is somedissatisfaction.
    • Quest: 3 Do you feel that the mutually agreed upon targets /timelines are soft and can bestretched further for improved performance. OPINION NO. OF RESPONDENTS PERCENTAGE STRONGLY AGREE 5 12 AGREE 18 43 CANT SAY 7 17 DISAGREE 12 28 STONGLY DISAGREE 0 0 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference: - 28% of respondents disagreed about the softness of their timelinesand 17% don’t want to answer. There is a sort of dissatisfaction regardingTimelines or targets that are unable to improve the performance of executives.
    • Quest: 4- You are satisfied with the weightages given against eachactivity that you are supposed to perform in the specified period.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 8 19AGREE 27 64CANT SAY 4 9DISAGREE 3 7STONGLY DISAGREE 0 0 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference:-Mostly, they agreed about the adequacy of weightages given againsteach activity which they are supposed to perform in a given period.
    • Quest: 5- The deadlines set to complete and submit the performancedocuments are sufficient.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 11 26AGREE 26 62CANT SAY 4 9DISAGREE 1 2STONGLY DISAGREE 0 0 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference:- Mostly they are satisfied with the operations of PerformanceManagement system.
    • Quest: 6 - The KPA’s are in accordance with the MOU targets of thecompany and the targets of the plant.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 12 28AGREE 22 52CANT SAY 6 14DISAGREE 2 5STONGLY DISAGREE 0 0 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference:- It simply shows the awareness level of Executives. 66% of themwere agree and felt that individual goals matches well with unit goals andcompany goals.
    • Quest: 7- All the factors facilitating and hindering performance aretaken into consideration while appraising the performance.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 10 24AGREE 17 40CANT SAY 13 31DISAGREE 2 5STONGLY DISAGREE 0 0 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY 8 DISAGREE STONGLY DISAGREEInference:- A healthy proportion of them agreed to this. Generally most of thefactors affecting the performance of an employee are taken into considereation.
    • Quest: 8- Your seniors assist you at the time of your need.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 18 43AGREE 23 55CANT SAY 1 2DISAGREE 0 0STONGLY DISAGREE 0 0 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference:- The response says that that there is a healthy environment ofworking, seniors assist their subordinates whenever there is any need.
    • Quest: 9- Your final rating is doesn’t only on your competencies andKPA’s but also on several other factors are like your interpersonalrelation with the rater.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 7 17AGREE 21 50CANT SAY 10 24DISAGREE 3 7STONGLY DISAGREE 1 2 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference:- Along with the competencies and KPA achievements the factorslike communication skills of the executives matter while rating theirperformance.
    • Quest: 10- Your doubts and queries are addressed by the PMSadministrator while operating online PMS.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 10 24AGREE 27 64CANT SAY 3 7DISAGREE 1 2STONGLY DISAGREE 0 0 10 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference:- Except a few disagreement most of the employees agree that theirdoubts and queries are addressed by the PMS administrator.
    • Quest: 11- The process is used mainly for improving the futureperformanceOPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 5 12AGREE 23 55CANT SAY 10 24DISAGREE 4 9STONGLY DISAGREE 0 0 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference:-Performance management is meant for improving futureperformance of employees and most of them agreed to it. The rewards andrecognitions are part of performance upgradation.
    • Quest: 12- You feel free to express to your appraiser yourdisagreement regarding the appraisal decision.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 6 14AGREE 12 52CANT SAY 8 19DISAGREE 6 14STONGLY DISAGREE 1 0 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference:-It seems that upto some extent the employees are hesitant toexpress their disagreement regarding the appraisal decision to their appraiser,but overall the system is open and flexible as 52% of them agreed to it andalmost the same no were neutral.
    • Quest: 13- Your seniors provides you with continuous feedback tohelp you achieve your KPA’s.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 10 24AGREE 20 48CANT SAY 6 14DISAGREE 5 12STONGLY DISAGREE 1 2 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference:-Mostly Executives are well aware about their KPAs and seniorskeep providing them feedback to achieve that, although some of them disagreedto it which may be due to miscommunication between senior and subordinates.
    • Quest: 14 - The recognition given to high performance isappropriate and helps in motivating the employee.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 9 21AGREE 20 48CANT SAY 7 17DISAGREE 5 12STONGLY DISAGREE 1 2 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference:-The recognition given to High performers is appropriate. There arescopes of evolution of the recognition system so that even those who disagreed tothe appropriateness of the recognition system get satisfied.
    • Quest: 15-Does the PMS effectively captures the training needs ofexecutives.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 5 12AGREE 16 38CANT SAY 9 21DISAGREE 11 26STONGLY DISAGREE 1 2 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREE
    • Quest: 16- Appropriate training is given to employees who fail tomeet the expected performance level.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 3 7AGREE 5 12CANT SAY 18 43DISAGREE 14 33STONGLY DISAGREE 1 2 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference:-Although half of the executives surveyed preferred to not to sayanything, There is a need to improve the training system so that appropriatetraining could be given to those who need it.
    • Quest: 17- The online PMS is dynamic and keeps you aware aboutyour instantaneous weak and strong area of performance effectively.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 6 14AGREE 14 33CANT SAY 9 21DISAGREE 10 24STONGLY DISAGREE 2 5 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference:-The online PMS may be dynamic as compared to the manualsystem but it does not provide instantaneous feedback about one’s KPAs.
    • Quest: 18- Managers and Employees trust the appraisal process.OPINION NO. OF RESPONDENTS PERCENTAGESTRONGLY AGREE 6 14AGREE 18 43CANT SAY 11 26DISAGREE 6 14STONGLY DISAGREE 1 2 NO. OF RESPONDENTS STRONGLY AGREE AGREE CANT SAY DISAGREE STONGLY DISAGREEInference:-The appraisal process is trustworthy.
    • FINDINGS AND ANALYSISOn the basis of the survey conducted, following points has emerged out whichrequire the attention of the management-:1. The present performance appraisal system below E7 level is not effectiveenough to serve the purpose of employee’s appraisal.2. Below E6 level the “Management by Objectives” approach is not followed andhence the employees are not clear about their functions based on these objectives.3. Proper weightages are not assigned to different attributes which differ in theirimportance.4. Many employees are not aware about the criterion used for their appraisal.5. According to those who know about the criterion, it is not sufficient to judgetheir performance.6. There is a wide gap between the self assessment by the employee and the formalappraisal done by the organization.7. There is no provision of incentives to the individual employee based on his/herperformance appraisal rating.
    • 8. Formal feedback is not provided to the employees on regular basis.9. The appraisal system does not help the employees to discover their true potentialfor higher responsibilities.10. Employees do not get sufficient opportunity to appeal to the higher authoritiesin case of adverse entry.11. There is considerable amount of communication gap between the superiors &subordinates.12. No emphasis is given on the behavioral aspect of the employees which affecttheir performance considerably.13. Training is not provided to the employees on the basis of his/ her performanceappraisal rating.
    • CONLUSION AND RECOMMENDATIONSRECOMMENDATIONS1. “Management by objective” approach should be introduced below E6 level andupto E1 level, so that executives at lower levels should also be aware about theirfunctions based on these objectives.2. Before setting the KRA’s, the employees should prepare themselves byreviewing their work beforehand, identifying barriers they faced in doing their jobsand refamiliarise themselves with their job descriptions, job responsibilities etc.3. Appraise should be allowed to present their own opinions and perceptions freelybut in a calm and factual manner.4. Performance appraisal should not be concentrated to forms only but on itspurpose of performance improvement by removing barriers to job success.5. Both appraiser & appraise should combinedly set realistic targets that can beachievable, otherwise the procedure of setting KRA’s is wastage of time.6. Weightages should be assigned to different attributes according to theirimportance.7. Formal feedback should be provided on regular basis to the employees, so thatproblems can be prevented in their early stages. It’s a two way communicationprocess, therefore a subordinate can also initiate the process.
    • 8. Reporting officer should make the employees aware about the criterion used fortheir performance appraisal.9. Monetary & non monetary incentives should be given to the individualemployee on the spot, by the manager, based on their performance. It will motivatethe employee.10. Behavioral aspect of the employee should be given due importance whilereviewing his performance.11. Training should be provided to the employee on the basis of his/ herperformance appraisal rating. It will help him/her to get new skills.12. The procedure of performance appraisal should be transparent in the sense thatthe employee should be aware about his/her appraisal rating.13. Communication gap between the appraiser & appraise should be reduced bymeans of performance appraisal & regular meetings.14. Make employees more accountable towards their duties and responsibilities.15. After the level of manager, there should not be fixed time limit for promotionand employees get higher responsibilities on the basis of their potential andaptitude. So, there should be potential appraisal along with performance appraisalat this level and above.
    • 16. A computerized system should be introduced to fill the forms and submissionat supervisor level and above. It will reduce the time required to do appraisal and atthe same time bring transparency between the appraisers and appraise, as he/shecan see his/her ratings on the computer whenever they want. A password shouldalso be assigned to the employee to keep his/her ratings confidential.
    • CONLUSIONThe aim of performance management system is ensuring themaximization of efforts by the employees of the organization to realizethe desired goals. More effective the performance management of anorganization more productive the organization would be. NTPC as awhole is a big organization with vast number of employees workingthere, to manage the performance of such a great number of peopleefficiently is a herculean task. The survey and personal interviews conducted during theproject work says that an effective performance management system ison place but as we know everything in this world keep evolving itself forbetterment, the performance management system is not an exception. NTPC can touch new heights in the field of energymanagement by managing its manpower more efficiently, addressingthere training needs, recognizing the high performances and makingthem feel the freedom of expressing their points.
    • Limitations of the Research The subject was too big but time available was too less. The survey was not conducted among all the employees of NTPC but on a sample of randomly selected executives. At times it was often felt that there is a difference between the real feeling and the feedback given by executives. Exact feedback must be given so that the analysis done would be correct. Some of the executives were not interested in the subject metter. We were unable to discuss issues related to our project with some people and only responses to questionnaire were collected.
    • REFERENCESHuman Resource and Personal Management - K. AshwathapaOrganizational Behavior - Stephen p. Robinshttp/intranet 1 – KHSTPPhttp://www.ntpc.co.in/index.php?option=com_content&view=article&id=28&Itemid=41&lang=enwww.citehr.comwww.ntpc.co.in
    • ANNEXURE
    • SURVEY ON PERFORMANCE APPRAISAL SYSTEMThis survey will only be used as an instrument for my summer training report for MBA.PERSONAL INFORMATIONGRADE: ………………DEPARTMENT: …………………………. SECTION: ………………………………NUMBER OF YEARS OF SERVICE IN NTPC: ………….S.NO QUESTIONS STRONGLY AGREE CAN’T DISAGREE STRONGLY AGREE SAY DISAGREE1 Your job description clearly defines KPA’s (Key performing areas) on which your performance is rated.2 Do you feel that goals (KPA’s) set are always mutually agreed upon i.e. – your consent is taken into consideration while setting KPA’s.3 Do you feel that the mutually agreed upon targets /timelines are soft and can be stretched further for improved performance.4 Are you satisfied with the weightage given against each activity that you are supposed to perform in the specified period5 The deadlines set to complete and submit the performance documents are sufficient.
    • S.NO QUESTIONS STRONGLY AGREE CAN’T DISAGREE STRONGLY AGREE SAY DISAGREE6 Your KPA,s are in accordance with the MOU targets of the company and the targets of the unit.7 All the factors facilitating and hindering performance are taken into consideration while appraising the performance8 Your seniors assist you at the time of your need.9 Your final rating is based not only on your competencies and KPA’s but also on several other factors like interpersonal relation with the rater.10 Your doubts/Queries are addressed by the PMS administrator while operating online PMS.11 The process is used mainly for improving the present performance.12 Do You feel free to express to your appraiser your disagreement regarding the appraisal decision13 Your senior manager provides you with continuous feedback to help you achieve your KPA’s.14 The recognition given to high performance is appropriate and helps in motivating the employees
    • S.NO QUESTIONS STRONGLY AGREE CAN’T DISAGREE STRONGLY AGREE SAY DISAGREE15 Does the pms effectively capture training needs of executives.16 Appropriate training is given to employees who fail to meet the expected performance level.17 Do you feel the online PMS is dynamic and keeps you aware about your instantaneous weak or strong area of performance effectively18 Do you feel Managers and Employees trust the appraisal processYOUR SUGGESTIONS TO IMPROVE THE EXISTING PERFORMANCE APPRAISALSYSTEM:………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………THANK YOU, NIDHI (STUDENT-MBA, NIEC, NEW DELHI)