Performance_Management_System_NTPC_Inter.pdf

National Thermal Power Corporation 1
Performance Management System – NTPC
Internship Report submitted to NTPC in completion of the
requirement of Summer Internship at National Thermal Power
Corporation
MOHAMMADSHA
(14MBMA06)
Faculty Guide
Dr. P. Jyothi, Professor
School of Management Studies, UOH
May 4, 2015 to June 29, 2015

PROJECT COMPLETION CERTIFICATE
This is to certify that Project Report entitled
“Performance Management System - NTPC” submitted by
―MOHAMMADSHA SHAIK in fulfilment of requirements for the
Summer Internship of 8 weeks from 4 May, 2015 to 29 June, 2015 in
Master‗s in Business Administration, in National Thermal Power
Corporation, Southern Region Headquarters, Patny centre,
Secundrabad is a record of the candidate‗s own work carried out by
her under my supervision. The matter embodied in this project work
is original and has not been submitted for the award of any other
degree.
Date: - Dr. P. Jyothi
29/06/2015 Professor
SMS
(University Of Hyderabad)

ACKNOWLEDGEMENT
It is really a matter of pleasure for me to get an opportunity to
thank all the persons who contributed directly or indirectly for the
successful completion of the project report, “Performance Management
System - NTPC”
First of all I am extremely thankful to National Thermal Power
Corporation for providing me with this opportunity and for all its
cooperation and contribution.
I wish to express my heartfelt gratitude to the following
individuals who have played a crucial role in the research for this project.
Without their active cooperation the preparation of this project could not
have been completed within the specified time limit.
The first person I would like to acknowledge is my Subject
guide Mrs SUBARNA ROY Manager (HR - SRHQ) who supported me
throughout this project with utmost co-operation and patience. I am very
much thankful to you mam.
I am also thankful to the Mr VISHNU MOHAN DGM (HR -
SRHQ), who throughout the project guided me with his valuable
suggestions.
Finally, to all my friends who helped me in making this
project. I want to thank them for all their help, support, interest and
valuable hints. Their unfailing interest and support gave a new dimension
to my work. They made it possible to collect abundance of material, the
relevant portion of which is quoted in this project. Last but not the least
my mentor Dr. P. Jyothi who guided me with spending her valuable time
and ideas.
MOHAMMADSHA
MBA 2nd semester
(14MBMA06)
School of Management Studies
University Of Hyderabad

NOTE
This study primarily deals with the
performance management system of different companies. Initially,
the data includes Performance Management System of NTPC where I
have done my internship for 8 weeks. My manager suggested me to
gather data about other private companies. Since NTPC was a public
organisation, she asked me to be more informative regarding private
organisations for knowing which type of methods and approaches
were used by their competitors.
So, I have included companies in the following
pages like RELIANCE, TATA group, ADOBE etc.

EXECUTIVE SUMMARY
This study has conducted in NTPC as an Internship
program reveals that every employee at NTPC was very satisfied in
terms of their performance & work life balance. After meeting my
manager in organisation it‘s confirmed that every employee was
highly satisfied with organisation goals & objectives.
It was very enthusiastic in knowing about
Performance Management System at NTPC. After working for 8
weeks in the organisation under the guidance of my manager and my
mentor, I have noticed many things such as
 Importance of ―BELL CURVE‖ technique and replacement
techniques for various reasons.
 Why traditional companies were implementing ―BELL
CURVE‖.
 What is ―CHECK - IN‖ method and the advantages over the
BELL curve technique.
 Since internship is performed at NTPC, the study includes
company profile and their PMS approaches, methods etc.
 As my HR manager suggested me to gather some data on other
organisations preferably private organisations because NTPC
was a public sector organisation, the study also includes
organisations like Reliance, TATA group, ADOBE etc.

TABLE OF CONTENT
S. No Topics Page Number
1 CERTIFICATE 2
2 ACKNOWLEDGEMENT 3
3 NOTE 4
4 EXECUTIVE SUMMARY 5
5 INTRODUCTION 7
6 WHY PA TO PMS??? 10
7 ELEMENTS OF PMS 13
8 ORGANISATION’S PROFILE & METHODS
- NTPC
- RELIANCE
- TATA
18
21
28
32
9 TRENDS OF PMS TODAY 36
10 SUGGESTIONS 57
11 CONCLUSION 58
11 ANNEXURE 59
12 BIBLIOGRAPHY 63

INTRODUCTION
PERFORMANCE MANAGEMENT SYSTEM (PMS)
According to peter‘s principle ―Every individual rise to the level of
his/her incompetency‖ where PMS is used at every particular level.
Generally Performance Management System is defined as ―It is a
systematic & periodic approach that assesses an individual employee‘s job
performance and productivity in relation to certain pre-Established criteria and
organizational objectives‖. PMS differs in objectives for both organizational
and employee.
OBJECTIVES
Employee perspective:
 Increase role clarity
 Training & development
 Compensation & reward
 Career planning
 Enhance corporate values
Organization Perspective:
 Measure efficiency
 Manage the organizational control
 Growth and control
 Increase harmony & effectiveness
 Mutual goal of the employee & organization
PMS follows some pre-defined process and levels which can be
made into as follows
1. Before Appraisal process
During this level the following points were followed by any
management
 Keep good records of an employee according to their work.
 Review previous goals of that employee.

 Get input from others about an employee in terms of attitude and
functioning of that employee.
 Prepare performance appraisal template carefully about that
employee.
 Prepare Administrative details
2. During Appraisal process
At this level employee interaction is involved after preparing the details about
any particular Employee
 Explain the meeting agenda.
 Encourage communication.
 Stay focussed about the meeting and know about the employee‘s
thought processing about his/her work
 Communicating short comings
 Administration must be very open to her employee in every
perspective.
 By all this an employee must be evaluated.
 Employer should not make any promises at this point of time.
 In this interaction once again the goals must be reviewed.
METHODS
There are many methods which can be classified by their
implementation into three types
1. INDIVIDUAL Performance Management System
 Confidential reports
 Essay evaluation by their superiors
 Critical incidents
 Check-lists- Simple, Weighted
 Graphic Rating Scale- Histograms
 Behaviourally Anchored Rating Scale (BARS)
 Forced distribution technique ( 2 positives and negatives each)
 Management By Objectives (Plan-Do-Check-Act)

2. GROUP Performance Management System
 Ranking method.
 Paired comparison method.
 Forced distribution method.
3. Other Methods
 Group appraisal
 Field review technique
 360 degrees review technique and 720 Degrees review technique
Intentionally or unintentionally in any Performance
Management System there is chance of occurring errors which
results of following effects
ERRORS
 Halo Effect
 Negative effect
 Central tendency
 Confrontation avoidance
 Initial performance
 Recency
Thus any firm can fix up the Performance Management System
procedure and follows accordingly to their individual organizational objectives
for better functioning of the firm.

PERFORMANCE APPRAISAL TO PMS
A successful shift to leading-edge performance management—
replacing annual ranking and yanking with continuous feedback, coaching, and
development—begins with a frank determination of whether rigid performance
evaluation systems are advancing a company‘s business priorities. If not, as
many organizations increasingly recognize, it is time to take action. Potential
starting points include
 Get senior leaders involved and keep them involved: Hold a senior
executive level conversation about the strategy and philosophy for
employee performance in the company. What does the organization hope
to achieve as a result of performance management activities? What
system will best reinforce the organization‘s talent management strategy?
 Use performance management to build skills: Switch from rigid
performance reviews to flexible performance conversations aimed at
providing employees at all levels with practical steps they can take and
the skills necessary to reach the next level of achievement within the
organization.
 Teach managers to give better feedback: Boost the skills of managers
to enable them to have productive yet less formal conversations about
performance that will drive improvement rather than drive employees to
look outside the organization.
 Simplify the process: Separate the performance coaching and evaluation
process from determinations of compensation. Reduce the number of
forms and make them very simple and easy to use. Ignore the advanced
features in performance management software.
 De-link performance scores and compensation: Consider revising
compensation structures to include broader considerations, such as how
the outside talent market would compensate an employee or how difficult
the employee would be to replace. Analyse the extent to which the
organization can take a broader approach to total rewards by offering
growth opportunities to employees who have outperformed their peers.

 Coach everyone: Search for opportunities for employees in the ―broad
middle‖ of the performance distribution to see themselves as valued
contributors to organizational success, rather than merely looking up to
the perceived superstars. Hold everyone accountable, but give everyone
coaching, development planning, and training to improve.
Today‘s workers expect to be held accountable for
results but they also expect coaching, development, and regular feedback.
Look carefully at the performance management process to see if it truly
drives performance today or is merely an artefact of the past. In many
cases, a shift from ―evaluation‖ to ―development and performance
improvement‖ will drive appreciable results.
Differences between Performance Appraisal and performance management
The terms 'performance management' and 'performance appraisal'
are sometimes used synonymously, but they are different. Performance
management is a comprehensive, continuous and flexible approach to the
management of organisations, teams and individuals which involves the
maximum amount of dialogue between those concerned. Performance appraisal
is a more limited approach which involves managers making top-down
assessments and rating the performance of their subordinates at an annual
performance appraisal meeting.
Performance Appraisal Performance Management
Top- Down assessment Joint process through dialogue
Annual appraisal meeting Continuous reviews with one or more
reviews
Use of ratings Ratings less common
Monolithic system Flexible process
Focus on quantified objectives Focus on values and behaviours as
well as objectives
Often linked to pay Less likely to be directly linked to pay
Bureaucratic - complex paperwork Documentation kept to a minimum
Owned by the HR department Owned by line managers

Performance Management systems typically are:
 A definition of what you want an employee to do for the next
performance period (normally the next quarter, half year or full year).
 The definition includes specific objectives for the period, backed up by a
job description which includes the normal expectations for that position.
 A review of remuneration/bonuses if these objectives are met
 A review of the personal development objectives
 Formally Performed quarterly, half yearly or annually but with input all
year round
 Typically fully automated where the information is accessible to all
participants at any time
Content rich if the automated Performance Management system has features
such as a Performance Diary.

Elements of PMS
A company can have a world-class system in place but it's
only as effective as the managers who implement it. Performance is the true
litmus test for survival in the marketplace. High-performing employees
contribute superior performance, giving the companies they work for a
competitive advantage and their extra effort differentiates great organizations
from merely good ones. An effective system should encourage collaboration,
teamwork, and communication. It's crucial for businesses to have systems in
place to identify, recognize, reward, and retain their top performers to achieve
sustainable growth. Most companies understand this and spend enormous sums
acquiring a performance management system to help ensure their success. Yet
wide variation in employee performance persists despite this investment.
To investigate why this variance occurs, review made on
employee engagement data from one of the most significant emerging
economies India. Final analysis included data from more than 50,000 employees
working in 10 major industry sectors in 22 global companies.
This analysis revealed that more than half of the employees
(54%) felt that their company's performance management system was not
effective. This perception is likely to demotivate employees, creating feelings of
anguish or frustration that negatively affect their performance, which ultimately
defeats the whole purpose of designing and setting up an effective system in the
first place.
This analysis also wanted to discover why the same system was viewed
differently by different employees and why some found the system to be
effective while others didn't. To determine the elements of an effective
performance management system, we asked members of the human resources
function in the 22 companies: "What makes an effective performance
management system?" From their responses, five common themes emerged, as
shown in the graphic below.
An effective performance management system starts
with a thorough goal-setting process, followed by regular feedback and
reviews/appraisals. It also identifies employees' developmental needs and
includes robust reward and recognition practices. The system also should
encourage collaboration, teamwork, and communication.

The manager's effect on a performance management system
To determine the manager's effect on the performance
management system, another research has been made with the same participants
from our initial study. To gain a sense of managerial ability, we asked each
employee to rate his or her manager to determine how much managers:
 helped employees feel empowered
 recognized or praised employees' achievements
 cared about their employees
 had regular discussions with employees
Those who received top scores were considered "best"
managers, while those who received the lowest rating were considered "below
average."

The relationship between employees and their manager is Key…
Though good processes are important in any performance
management system, the human element is the most important component in
whether employees perceive the system as effective. The relationship between
an employee and his or her manager is the key factor in driving those
perceptions, and it accounts for the great variance in those perceptions among
the employees. This research with 22 companies revealed that great managers:
 clearly communicated performance standards and what good performance
in a role looks like
 focused on employee strengths rather than weaknesses
 helped employees understand that the purpose of the performance
management system was to aid in their development; it was not just an
activity required for pay or promotions
 communicated regularly with their team members on performance
expectations, rather than once a year
A company might have a world-class performance
management system in place, but the system is only as effective as the managers
who implement it. Companies that want to increase organizational and
employee performance and productivity should invest in getting the right
managers in place and support them in engaging their employees.
Flaws of a typical Performance Management System
Many organizations will most likely say they utilize a
performance management system but far fewer will admit that it‘s not actually
achieving its original goals. Namely, performance management systems often
fail in motivating better employee performance!
In order to actually motivate employees to perform at their
best, a performance management system should be tied closely to organizational
and personal goals and should be a means for employees and managers to stay
continually on the same page. It can also house employee development plans.

1. Not Giving Employees Timely Feedback
If the only time an employee hears of how he or she is
performing is once per year, there are bound to be some surprises in there.
Many managers use the existence of a performance management system as an
excuse to delay giving feedback until the formal review period—but this is a
recipe for disaster. The formal review period should be just that: a formal
summary of status. There should be no surprises at that time if employees are
given feedback at appropriate times throughout the year. In other words, this
should not be the first time an employee hears how he or she is tracking against
goals and expectations.
2. Setting Inappropriate Goals
 Not tying employee goals to company goals. If employee goals are set
randomly, they may help individuals achieve their goals but may not
bring the business any closer to achieving its organizational goals or
mission. Ideally, individual goals should be clearly linked to company
goals.
 Failing to set stretch goals. Goals that are set at levels that are easily
achievable without any extra effort don‘t motivate employees to perform
at their best. Goals should be realistic, but they should require some effort
to achieve and maintain—otherwise the system isn‘t helping to motivate
behaviours.
 Creating goals that are not measurable or objective. There should be a
clear understanding of what it looks like to achieve a goal and how it will
be measured. Goals need to be Specific, Measureable, Achievable,
Relevant, and Time-bound (commonly referred to as ―SMART‖ goals).
Goals should not be vague.
3. Failing to follow through on the performance appraisal schedule- Even
worse than not providing timely feedback at all!! If manager is not bothered to
treat the program with the respect it warrants, then why bother having a system?
Employees will get discouraged if they‘re never given feedback.
4. Not Explaining Clear Paths to Improvement
Even if a performance management system is used
well and employees are given appropriate feedback, the system can go awry if
an employee needs to improve but does not understand how to do so. The PMS

should have a clear path for employees to meet expectations as well as a clearly
communicated plan when they don‘t.
5. Not Documenting the Process
The rating of employees should be justified, and that
justification should be put into writing. The appraisal should be clear, complete,
and easily interpreted by a third party.
6. Ignoring Problem Employees
This is a problem on multiple levels:
 It decreases employee morale because others don‘t feel like problems are
being addressed.
 It can make other employees resentful that they cannot get away with the
same actions of their co-workers.
 It fails to solve productivity problems. Managers often mistakenly think
that giving a performance review that is better than the employee
deserves will be a motivator but instead it sends the signal that the poor
performance is acceptable.
 It can be a legal nightmare if the employee is later let goes for poor
performance, and there is no record of performance reviews indicating
any problem at all.
1. Not Recognizing Star Employees
On the other hand, if an employee is performing well above
average, he or she should get the deserved recognition. If every employee is
given a ―satisfactory‖ (or equivalent) rating even if some are going above and
beyond expectations, star performers will lose faith that their efforts are being
recognized. Managers should understand how important it is to use the system
to give appropriate ratings across the full spectrum of options—they should not
be trying to avoid tough conversations, and they certainly should not be simply
giving everyone the same rating because they don‘t have the time to put real
thought into it.

Company Profile
NTPC
A MAHARATNA COMPANY
Genesis of NTPC
With a view to supplement the efforts of ―states‖ for quicker and
greater capacity addition, electricity act of 1948 was amended in 1975 to
facilitate establishment of large regional power stations in the central sector. In
the same year, NTPC was set up by GOI with the mandate of planning,
promoting and organising integrated development of thermal power including
associated transmission systems in the country.
NTPC at a Glance
Type : Government-owned Corporation
Industry : Electric generation and utility
Founded : 1975
Head Quarters : New Delhi, India
MD&Chairman : Arup Roy Choudhury
Products : Electric Power and Natural gas
Services : Electric generation and Distribution, Natural Gas
Exploration, Production, Transportation and Distribution.
Revenue : INR 73904 Crores (2013-14)
Net Income : INR 13834 Cores (2013-14)
No.of employees : 24546 (April 2015)
About Company
NTPC's core business is generation and sale of electricity to state-
owned power distribution companies and State Electricity Boards in India. The
company also undertakes consultancy and turnkey project contracts that involve

engineering, project management, construction management and operation and
management of power plants. The company has also ventured into oil and gas
exploration and coal mining activities. It is the largest power company in India
with an electric power generating capacity of 43,803 MW. In May 2010, NTPC
was conferred Maharatna status by the Union Government of India. It is ranked
424th
in the Forbes Global for 2014.
VISION
A World class integrated power major, powering India‘s growth, with
increasing global presence.
CORE VALUES (BE-COMMITTED)
 Business ethics
 Environmentally & Economically Sustainable
 Customer focus
 Organisational & Professional Pride
 Mutual Respect & Trust
 Motivating Self & Others
 Innovation & Speed
 Total Quality For Excellence
 Transparent & Respected Organisation
 Enterprising
 Devoted
MISSION
Develop and provide reliable power, related products and services
at competitive prices, integrating multiple energy sources with Innovation and
Eco-Friendly Technologies and contribute to society.

CORPORATE OBJECTIVES
I. Business Port Folio Growth
II. Customer Focus
III. Agile Corporation
IV. Performance Leadership
V. Human Resource Development
VI. Financial Soundness
VII. Sustainable Power Development
VIII. Research and Development
THRUST AREAS
 Research & Development : The applied research work being
presently undertaken by R&D Centre to be significantly upgraded in
future.
 Energy Conservation/Efficiency: Centre for Energy Efficient
Technologies and Energy Management functioning for thrust in Energy
Conservation/ Efficiency
 Ash Utilisation
 Environment Management
 Consultancy Services
 Corporate Social Responsibility
 Human Resource Development
 Training & Development in NTPC

OPERATIONS
NTPC operates from 55 locations in India, one location in Sri
Lanka and 2 locations in Bangladesh.
Headquarters: In India, it has 8 headquarters.
NTPC Plants
The total installed capacity of the company is 43,803 MW
(including JVs) with 17 coal-based and seven gas-based stations, located across
the country. In addition under JVs, six stations are coal-based, and another
station uses naphtha/CNG as fuel.
Analysis of Performance management system in NTPC
CONTENTS OF PMS POLICY IN NTPC
 PMS objectives
 PMS process
1. Performance planning
2. Mid-Year review
3. Annual assessment
4. Normalisation
5. Feedback, Coaching and counselling
 PMS linkage with other HR systems
 PMS form
1. Performance planning
2. Mid-year review
3. Assessment and Evaluation
4. Communication of scores and Feedback
 Normalisation process, Clusters and Constitution of performance
management committees.
 Administration of PMS

Applicability
PMS policy would be applicable to:
 All executives of NTPC (E1-E9)
 Executives on deputation joining NTPC or those retaining lien
while in service of NTPC
 For those joining in the middle of assessment period with
minimum service of 3 months during the period.
OBJECTIVES OF PMS-NTPC
 To accomplish overall organisational vision and mission by linking
individual performance to company objectives
 To facilitate the fulfilment of individual aspirations
 To build a culture of performance
 To encourage two-way communication between reporting officers and
executives
 To evaluate the potential of the executive to assume higher
responsibilities in the organisational hierarchy
 To translate future skill requirements of the organisation into individual
development plans
 To identify high performers and recognise them through rewards and
incentives

PACE (Personal Achievement through Competency Evaluation) Process
PACE analysis
The following graph reveals the feedback given by the employees
of NTPC regarding different parameters as follows
 Linkage to rewards
 Goal setting
 Role of HR
 Evaluation
 Manager‘s support
SCORING
The questionnaire contains 21 questions on 1-5 scale which are
shown in annexure where ―1‖ stands for ―strongly disagree‖ and ―5‖ stands for
―strongly agree‖. There are no negative questions in the questionnaire. Any

score above ―3‖ can be considered ―Good‖ while a score below ―3‖ should be
considered ―poor‖.
A separate score for each of the main parameters can be calculated as follows-
1. For each respondent, calculate the average score of the items pertaining to
the parameter
2. Calculate the average score for all respondents to arrive at the parameter
score
3. To obtain band (grade) wise scores, calculate the average score for
respondents within the grade band
4. To obtain department wise scores, calculate the average score of the
respondents within department. Similarly, overall, grade wise and
department wise scores for each parameter can be calculated.
Interpreting Results
You may choose either of descriptive analysis (means, graphs etc.) or inferential
statistics to draw conclusions.
Descriptive analysis
To carry out a descriptive analysis of the data, follow the steps-
1. Plot a bar chart of overall parameter scores. Compare the length of each
bar to find out which parameters have been rated comparatively lower
and which have been rated higher. For parameters that have been rated
low, check the related item scores to find out areas of dissatisfaction. Do
the same for any parameter that has been rated below 3.
2. Plot a bar chart of grade band wise parameter scores. Compare the length
of grade band bars within same parameter, as well as, with corresponding
grade band bars of other parameters to find out areas of concern.
3. Plot a bar chart of department wise parameter scores and carry out
comparisons as mentioned in S. I. NO 1 and 2.
4. Compare the findings with any past data if any
5. Sift through employee comments and suggestions recorded in the word/
note pad in response to the open ended questions to seek cues on areas of
concern.

Inferential statistics
Following inferential tools can be used for analysing recorded data. One may
carry out this analysis using MS Excel or even manually. However SPSS
(Statistical Package for the Social Sciences) is best suited for this purpose.
1. Use z – test or t – test to approve/ disapprove null hypothesis for any
parameter and sub-parameter
2. Either use one-way or two-way ANOVA to compare grade wise and
department wise parameter scores
3. Use any of the paired-comparison tools like Dependent samples t – test or
Two way ANOVA to compare scores with similar data recorded in past.
SURVEY
Questionnaire is given among different grades of employees and
various departments. Survey is conducted among 81 Number of respondents
where they have answered for all 22 different questions and the feedback has
1782 responses. Scoring of the employee response is calculated as the above
mentioned procedures.
Graph showing analysis of E1-E4 level employees
E1-E4
1. Employees were linked to rewards.
2. They set their goals with the help of managers
3. Role of HR is optimal
0
1
2
3
4
5
6
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Series1
Series2
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Series4
Series5

4. Evaluation is good
5. Manager‘s support is normal
Graph showing E5-E6 level employee‘s analysis
E5-E6 perception
1. Work is linked to rewards
2. They know their goals
3. Role of HR is good
4. Evaluation has to be improved
5. Mangers role must be enhanced
 Employees were dissatisfying with few issues like career goals and
performance gaps are not considered while nominating employees to any
training programs.
 Managers were not directly addressing the issues of poor performance.
 Managers were not including sub ordinates while proper cascading the
targets.
 PACE process is not more transparent to this level of employee.
0
1
2
3
4
5
6
1 2 3 4 5 6 7 8 9 101112131415161718192021222324
Series1
Series2
Series3
Series4
Series5

Graph showing E7-E7A level employee‘s analysis
E7-E7A perception
1. Linked to rewards
2. Goal setting is done with the help of managers
3. Role of HR is satisfactory
4. Evaluation is good but can do better
5. Managers support is good
 Employees were dissatisfied with the explanation given by the manager
on their work performance.
 PACE process is not transparent to this level of employee.
Areas of improvement
1. Rewarding more will motivate employees
2. Role of HR should drastically increase
3. Evaluation should not be biased
4. Managers can support better.
5. Should try to eliminate the manual errors
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Series1
Series2
Series3
Series4
Series5

This study has the approach of NTPC and as my HR
manager specified to analyse other private company‘s methods and approaches
of PMS. The following data includes companies like RELIANCE, TATA
GROUP, ADOBE etc.
RELIANCE INDUSTRIES
Reliance Industries Limited (RIL) is an Indian conglomerate holding
company headquartered in Mumbai, India. The group is present in many
business sectors across India including petrochemicals, construction,
communications, energy, health care, science and technology, natural resources,
retail, textiles, and logistics. RIL is the second-largest publicly traded
company in India by market capitalisation and is the second largest company in
India by revenue after the state-run Indian oil corporation. The company is
ranked 114th on the Fortune Global 500 list of the world's biggest corporations,
as of 2014. RIL contributes approximately 20% of India's total exports.
Coming to human resource terms RIL has 23,519 Number of employees
till 2013. RIL uses different types of Performance Appraisal Methods such as
follows
PMS METHODS
 3600
Feedback
 Rating scale
 Critical Incidents
 Essay Methods
 Work standards
 Forced Distribution Method
 Result Based System
 Behaviourally Anchored Rating System (BARS)
 Ranking
 Paired Comparison

 General Ranking Method
These methods are very common techniques as the detailed
information is given earlier of each method accordingly. These methods were
followed the PMS procedure as follows.
PMS PROCESS
This procedure involves 7 steps
1. Setting performance standards
2. Communicating standards set to the employee
3. Measuring performance
4. Comparing performance with standard
5. Discussing result
6. Collective action
7. Implementation and review
Explanation of process:
1. setting performance standards
In this very first step in performance appraisal the HR department decides
the standards of performance i.e. they decide what exactly is expected from the
employee for each and every job. Sometimes certain marking scheme may be
adopted. For example A score 90/100 = excellent performance, a score 80/100 =
good. And so on.
2. Communication standard set to the employee
Standards of performance appraisal decided in 1st step are now conveyed
to the employee so that the employee will know what is expected from him and
will be able to improve his performance.
3. Measuring performance
Performance of the employee is now measured by the HR department,

different methods can be used to measure performance i.e. traditional and
modern method. The method used depends upon the company‘s convenience.
4. Comparing performance with Standard
Performance of the employee is now judged against the standard.
To understand the score achieved by him. Accordingly we come to know which
category of performance the employee falls into i.e. excellent, very good, good,
satisfactory etc.
5. Discussing result
Results obtained by the employee after performance appraisal are
informed or conveyed to him by the HR department. A feedback is given to the
employee asking him to change certain aspects of his performance and improve
them.
6. Collective action
Employee is given a chance or opportunity to improve himself in
the areas specified by the HR department. The HR department constantly
receives or keeps a check on the employee‘s performance and notes down
improvements in performance.
7. Implementation and review
Performance appraisal policy is to be implemented on a regular
basis. A review must be done from time to time to check whether any change in
policy is required. Necessary changes are made from time to time.
Limitations
The following are the limitations of performance appraisal
1. Halo effect
In this case the superior appraises the person on certain positive
qualities only. The negative traits are not considered. Such an appraisal will not
give a true picture about the employee. And in some cases employees who do
not deserve promotions may get it.
2. Horn effect or Negativity
In this case only the negative qualities of the employee are
considered and based on this appraisal is done. This again will not help the

organization because such appraisal may not present a true picture about the
employee.
3. Central tendency
In this case the superior gives an appraisal by giving central values.
This prevents a really talented employee from getting promotions he deserves
and some employees who do not deserve anything may get promotion.
4. Leniency and strictness
few bosses are lenient in grading their employees while some are
very strict. Employee who really deserves promotions may lose the opportunity
due to strict bosses while those who may not deserve may get benefits due to
lenient boss.
5. Spill over effect
In this case the employee is judged positively or negatively by the
boss depending upon the past performance. Therefore although the employee
may have improved performance, he may still not get the benefit.
6. Fear of losing subordinates and spoiling relations
Many bosses do not wish to spoil their relations with their
subordinates. Therefore when they appraise the employee they may end up
giving higher grades which are not required. This is an injustice to really
deserving employees.
7. Goodwill and techniques to be used
Sometimes a very strict appraisal may affect the goodwill between
senior and junior. Similarly when different departments in the same company
use different methods of appraisal it becomes very difficult to compare
employees.
8. Paper work and personal biased
Appraisal involves a lot of paper work. Due to this the work load
of HR department increases. Personal bias and prejudice result in bosses
favouring certain people and not favouring others.

TATA GROUP
Tata Group is an Indian multinational conglomerate company
headquartered in Mumbai, Maharashtra, India. It encompasses seven business
sectors such as communications and information technology, engineering,
materials, services, energy, consumer products and chemicals. The Tata Group
and its enterprises are perceived to be India's best-known global brand within
and outside the country as per an ASSOCHAM survey. The 2009, annual
survey by the Reputation Institute ranked Tata Group as the 11th most reputable
company in the world. The survey included 600 global companies. The Tata
Group has helped establish and finance numerous Researches, educational and
cultural institutes in India
PMS Process
1. Establishing performance standards.
2. Communicating the standards.
3. Measuring performance.
4. Comparing the actual with the standards.
5. Discussing the appraisal.
6. Taking the corrective action.
Methods
1. Essay appraisal
2. Graphic rating scale
3. Field review
4. Forced choice method
5. Management by Objectives
6. Ranking method (Alternative method, Paired comparison)
7. 3600
feedback

Limitations
1. Errors in rating
2. Lack of reliability
3. Negative approach
4. Multiple objectives
5. Lack of knowledge
Rating errors
2. Leniency or severity
3. Central tendency
4. Halo error
5. Primary & Regency effects
6. Performance dimension order
7. Spill over effect- Previous rating influences current rating.
Roles in PMS
a. Reporting manager
b. Head of Department
c. HR head
d. Normalization committee ( Bell Curve)

Entire TATA group follows the same methods and procedures
where HR Department significantly differentiate the employees into two types
S. No Exceptional
Contributors
Significant
Contributors
1 Consistency and
substantially above
expectations in all areas
Performs above
expectations in all areas
2 Achieves score >115% Achieves between 100-
114%
3 Continuously delivers on
stretch targets
Versatile in his/her area
of operation
4 Is proactive Is reactive
5 Sees and exploit
opportunities
Sets example for others
6 Recognised as
exceptional by other
functions as well
Demonstrate functional
and business initiative.
7 Develop others Coaches others
 TATA group follows SMART goal setting model.
 Every traditional company follows similar method in PMS i.e., BELL
CURVE
 It is a type of forced ranking technique
 A bell curve model is a systematic bell-shaped graph that is pronounced
in the middle and tapered off at the edges
 It assumes that all the employees in a company can be ranked as follows

Top 30 Percentage – High performers
The middle 50 percentage – Average performers
The bottom 20 percentage – poor performers
 Percentile policy changes accordingly to company policy.
Advantages
 Identify top performers through the bell curve grading
 Manage lenient and strict ratings of managers through the bell
curve
 Identify suitability of employees in a job position through the bell
curve
 Manage training needs through the bell curve
Disadvantages
 Too Rigid: Using the bell curve model for performance appraisal may be
considered a rigid approach for rating employees. Sometimes managers
need to put employees in specific gradients just for the sake of bell curve
requirements. This happens more often when the manager‘s teams are
small.
 Loss of morale: The performance appraisal based on the forced ratings
creates doubts in the mind of both managers and employees, who may
worry about the possibility of an exit during tough job market conditions.
This may lead to a loss of morale and further deterioration of job
performance.

 Not suitable for small companies: The bell curve is not suitable for
small companies where the number of employees is less than 300. With
fewer employees, the categorization cannot be done properly, and the
results are mostly erroneous.
 It is dependent on the supervisors who judge the capability and
contribution of an employee. The supervisor is to keep a day to day
physical record of the favourable and unfavourable tasks performed by
the employee. But, as it is a time consuming task, many supervisors
record them just before the submission of the appraisal sheet to the HR
leaving ample room for errors and omissions.
 Ranking based on favouritism is a failure.
TRENDS IN PMS TODAY…???
Now- a-days organisations were looking for other latest methods in order to
overcome the disadvantages of current methodologies. There are various latest
techniques but this study has the prominent techniques only like as follows
 Check – in‘s
 Coaching and development
 720 degrees feedback
 Employee training
BELL CURVE IN NEWS
 Microsoft dropping its age-old practice of using a relative rating
system made big news last November. The company has been
criticised for holding on to a system that is believed to hamper
creativity.
 Google too, dropped its complex matrix, got rid of the mandatory
bell curve and went in for a simpler classification system, as of
2013.
 Adobe too shed the curve two years ago and opted for a target-
achievement based model it calls "check- ins".

Comments from ADOBE on bell curve
"I don't believe the bell curve values people's strengths. It only
gives a forced value," says Donna Morris, senior vice president, people &
places, Adobe, who led the transition away from relative ratings at the firm.
"One's merit should stand for what one actually does, and not against what
someone else does." Also, in technology, everything depends on innovation, and
you need the brightest of minds to come together, she adds. "It is quite
destructive to tell your team that one day they need to come together and
innovate, and the next day, they get ranked against each other," she says.
Latest technique of ADOBE
 Adobe, a company of 11,000 employees, 54% work in North
America, tried for five years to modify the traditional
performance management system before abandoning it as
inconsistent with Adobe‘s strong culture of teamwork and
collaboration.
 Today, Adobe has a far simpler, but far more effective,
system. Either an employee or a manager may request a
―check-in‖ every three months. Before the actual meeting
occurs, a group of employees provides feedback on the
employee‘s performance.
 The results form the basis of a conversation about
performance improvement, rather than a zero-sum dispute
about compensation or ranking. The goal is to make
coaching and developing a continuous, collaborative process
between managers and employees a far more motivating
outcome.
 The results form the basis of a conversation about
performance improvement, rather than a zero-sum dispute
about compensation or ranking. The goal is to make

coaching and developing a continuous, collaborative process
between managers and employees a far more motivating
outcome.
 The results have been profound: Since rolling out the new
approach worldwide, Adobe experienced a 30% reduction in
voluntary turnover in a highly competitive talent
environment.
 In many companies Bell curve is replaced by ―coaching and
development‖. A critical feature of the new ―coaching and
development‖ model of performance management is
separating feedback provided to employees from
compensation decisions.
 Neuroscience research shows that conversations about
compensation provoke an almost primordial ―fight or flight‖
reaction among employees, which obviously inhibits the
coaching process. Rather than directly linking ratings and
salary increases or bonuses, compensation decisions should
be based on the critical nature of an employee‘s skills, the
cost of replacing them, their value to customers, and the
external labour market.
Performance Management is broken
Replace ―Rank and yank‖ with ―coaching and development”.
Companies worldwide are questioning their forced-ranking, rigid
rating systems and once-a-year appraisal processes. This is the year a new
model of performance management will likely sweep through HR.
 Today‘s widespread ranking and ratings based performance management
is damaging employee engagement, alienating high performers, and
costing Managers valuable time.

 Only 8 % of companies report that their performance management
process drives high levels of value, while 58 % said it is not an effective
use of time.
 Leading organizations are scrapping the annual evaluation cycle and
replacing it with on-going feedback and coaching designed to promote
continuous employee development.
Traditional performance management the annual process of
rating employees‘ performance and ranking them against their colleagues
is widely considered to be broken.
These ―forced curve‖ evaluations became popular under the
influence of the GE model during Jack Welch’s tenure, but they were
originally conceived around the turn of that century the turn of the 19th to
the 20th century, that is. At that time, employees were viewed strictly as
―workers‖ whose performance could be accurately measured by output
the number of railroad ties installed, hours worked, or other numeric
measures.
In addition, today‘s business climate and business priorities
seldom follow the annual evaluation cycle. Goals shift, strategies evolve,
and employees often switch between multiple projects under various team
leaders. Given this dynamic, it is hardly surprising that our research
shows that organizations where employees review their personal goals
quarterly or even more often were nearly four times more likely to score
at the top of Bersin by Deloitte’s Total Performance Index.

The performance management process should focus on continuous
coaching and development, rather than competitive evaluation. Managers who
provide regular feedback and opportunities to improve are far more likely to
field high-performing teams than those who retain once-a-year rankings.
Why grading on the curve consistently fails
This process, widely known as ―rank and yank,‖ has been found
in many companies to demoralize employees, create animosity, and spur good
people to look elsewhere for work.
The distribution of employee performance more often follows the
―long tail‖ rather than the traditional ―bell curve,‖ especially at talent intensive
companies that thrive on expertise and innovation. In other words, some
employees are hyper achievers, while many others work at the middle level of
performance. In industries such as software, a top performer can often
outperform a mid-level performer by as much as tenfold.
In these companies, the performance management system should
treat high performers very well, while encouraging mid-level employees to
improve through coaching and development. A forced bell curve diminishes the
value of the top performers and pushes many mid-level performers into the
bottom. In the process, it inadequately rewards top performers and fails to
motivate middle-of-the-road employees.

A new role for managers
Shifting away from annual performance evaluations toward a
process of continuous coaching and improvement requires a new role for
managers.
The days when managers could lead from a position of command
and control are over. In today‘s high-performing teams, employees must take
ownership of their performance and act on their own to improve their
capabilities. Managers become coaches, rather than evaluators.
720 DEGREES PERFORMANCE APPRAISALS
All organizations aim at being effective and achieving
their goals, in order to do this it is important to monitor or measure the
performance of the employees on a regular basis.720 Degree Performance
Appraisal is considered an all-round appraisal; the 720 degree
performance appraisal gives an employee more than feedback from one
person. This study deals with the need of 720 degree performance
appraisal for today‘s business world, dimensions of performance
appraisal and rating scales of performance appraisal.
720 degree appraisal method aims at monitoring,
measuring, giving feedback and encouraging the employees to achieve
the goal and for the Organization in turn. Effective monitoring also
includes giving timely feedback, reviewing the performance according to
pre-determined standards and timely recognition of the accomplishments
that motivates the employee to perform better each day.
It is rightly said that, ―Encouraged people achieve the
best; dominated people achieve second best; neglected people achieve the
least.‖ as recognition and reward at the right time is the best
encouragement. 720 Degree Performance Appraisal720 degree as the
name suggests is 360 degree twice. It provide for two round of feedback
(a pre and post) or a feedback approach which is done again after nine to
twelve months.

CONCEPT OF 720 DEGREE PERFORMANCE
APPRAISALS:
720 degree performance appraisal is the latest
appraisal method that has been introduced in New Economy companies.
Accurately and objectively measuring the performance of an employee is
the most difficult part of the Performance appraisal process. Different
methods are used for Performance appraisal that includes: Critical
incident method, weighted checklist method, paired comparison analysis,
graphic rating scales, essay evaluation method, behaviourally anchored
rating scales, performance ranking method, Management by Objectives
(MBO) method, 360 degree performance appraisal method, Forced
ranking and Behavioural observation scales.
OBJECTIVES OF PERFORMANCE APPRAISAL:
 Review the performance,
 Judge the gap between actual and the desired performance,
 Strengthen the relationship and communication between
Superior – subordinates and management – employees
 Diagnose the strengths and weaknesses of the individuals so as to
identify the training and development needs of the future,
 Provide feedback to the employees regarding their past
performance,
 Provide clarity of the expectations.
IMPORTANCE OF 720 DEGREES PERFORMANCE
APPRAISALS
The main importance of 720-degrees performance
appraisal can be summarized as follows:
 Provide information about the performance ranks. Assist in
taking decisions regarding salary fixation, confirmation,
promotion, transfer and demotion.
 Provide timely feedback about the performance, set targets and
monitor the performance based on the targets set.

 Helps to check the effectiveness of personnel procedures and
practice i.e. validation.
 It is necessary to ensure that employees reach organizational
standards and objectives.
 To discover the work potential and to understand the areas
where training is required to guide the employees to perform
their best.
 To understand the expectations of the employees and prevent
grievances and in disciplinary activities.
 Provide information to diagnose deficiency in the employee
regarding skill, knowledge, determine training, and prescribe
means for employee growth and information for correcting
placement.
 Set realistic target, monitor the performance and provide timely
feedback to ensure that the performance is enhanced.
 Assessment system should be 360 degrees.
 Assessment should be done twice a year.
 Different assessments should be tabulated and compared in a
given period.
 Ensure that the rating instruments are relevant, valid and
reliable
 Treat employees with sensitivity and respect
 These critical competencies are essential to assist the executives
and managers to be able to lead these organizations toward
successful implementation of strategic changes.
DIMENSIONS OF 720-DEGREE PERFORMANCE
APPRAISAL:
In order to achieve the goals, 720 degree
performance appraisal would be a vital tool as it is used to appraise the
performance of an employee from different dimensions and helps to
overcome the barriers of bias, prejudice and discrimination. The
performance is appraised from 5 dimensions and feedback or the
appraisal meeting is conducted twice (pre and post feedback) to ensure
the efficient performance of the employee. Including the pre and the post

feedback, that plays a vital role, the 720 Degree performance appraisal
has 7 phases.
PRE APPRAISAL FEEDBACK:
This is the first appraisal step that is done after the feedback
is collected from the different dimensions or people with whom the employee
would interact. In this step, the performance is evaluated, targets are set and
feedback or training is organized to help the employee achieve the target.
SELF APPRAISAL:
The employee is given a questionnaire and asked to evaluate
performance himself and through this method, the employee gets an opportunity
to express his thoughts and his valuation of strengths, weakness and judge his
performance.
PEERS/COLLEAGUES APPRAISAL:
The feedback from the peers or colleagues is important as it
helps to understand the ability of the employee to work as a team, co-operate,
co-ordinate with others and bring out the best.
CUSTOMER APPRAISAL:
In order to survive in the current competitive market,
Organizations aim at achieving high customer satisfaction. Customer feedback
helps to analyse the customer point of view and help to improve the person and
the Organization.
SUB-ORDINATES APPRAISAL:
The feedback of the sub-ordinates is essential to analyse the
organizing skills of the employee and to understand his abilities like
communication and motivating abilities, ability to delegate the work, leadership
qualities and way of handling responsibilities.
MANAGERS/SUPERIORS APPRAISAL:

In this, the performance, responsibilities and the attitude of
the employee is evaluated by the Superiors or Managers.
POST APPRAISAL FEEDBACK:
It is this step that makes the 720-degree performance
appraisal different and better than the 360-degree performance appraisal
method. In this step, the performance is evaluated based on the target set in the
Pre appraisal and feedback is given. Timely feedback and guidance helps to
make the employee improve his performance.
MERITS OF 720-DEGREE PERFORMANCE APPRAISAL:
720 Degree performance appraisal will help in creating a
synergetic work environment and will help to bring out the best of each
employee. The other benefits of the 720 degree performance appraisal are as
follows:
 It helps in better analysis and improved feedback from different
dimensions
 Helps to develop a better and co-operative team
 Reduces the appraisal barriers like prejudice, bias and discrimination
 Customer feedback is valued. Better customer service and satisfaction can
be obtained
 Encourages transparency and feeling of treated justly.
DEMERITS OF 720-DEGREE PERFORMANCE APPRAISAL:
 85% of the appraisers consider that 720 Degree performance appraisal
method is considered as time consuming process.
 10% of the appraisers consider that the monetary requirement is higher
for 720 Degree performance appraisal method as appraisal/feedback has
to be done twice.
 5% of the appraisers consider that there might be quality problem as all
the 7 dimensions of appraisal in 720 Degree performance appraisal
method might not be accurate.

RATING SCALES OF PERFORMANCE APPRAISAL FORM:
We can use scales as follows for this performance appraisal
form.
 Unsatisfactory: Major improvements needed.
 Needs Improvement: Less than Satisfactory could be doing better.
 Meets Expectations: Performing duties as directed with minimal
Supervision.
 Excellent: Performing all duties in a cost-effective manner with positive
and measurable results.
 Outstanding: Performing at a level above and beyond the duties of the
current position requirements.
WHY COMPANIES SHOULD USE 720…?
This system is more development focused than performance
alone, and supplements training and development functions in a better way. It is
a powerful developmental tool because when conducted at regular intervals it
helps to keep a track of the changes, others‘ perceptions about the employees.
Many organizations are beginning to realize that the skill base of their
executives and managers does not match the requirements of a rapidly changing
environment. Without these critical competencies, executives and managers are
less likely to be able to lead these organizations toward successful
implementation of strategic changes.
EMPLOYEE TRAINING AND DEVELOPMENT
The quality of employees and their development through
training and education are major factors in determining long-term profitability
of a small business. If you hire and keep good employees, it is good policy to
invest in the development of their skills, so they can increase their productivity.
Training often is considered for new employees only. This is
a mistake because on-going training for current employees helps them adjust to
rapidly changing job requirements.

Purpose of Employee Training and Development Process
Reasons for emphasizing the growth and development of personnel include
 Creating a pool of readily available and adequate replacements for
personnel who may leave or move up in the organization.
 Enhancing the company's ability to adopt and use advances in technology
because of a sufficiently knowledgeable staff.
 Building a more efficient, effective and highly motivated team, which
enhances the company's competitive position and improves employee
morale.
 Ensuring adequate human resources for expansion into new programs.
Research has shown specific benefits that a small business
receives from training and developing its workers, including:
 Increased productivity.
 Reduced employee turnover.
 Increased efficiency resulting in financial gains.
 Decreased need for supervision.
Employees frequently develop a greater sense of self-worth,
dignity and well-being as they become more valuable to the firm and to society.
Generally they will receive a greater share of the material gains that result from
their increased productivity. These factors give them a sense of satisfaction
through the achievement of personal and company goals.
The Training Process
The model below traces the steps necessary in the training process:
 Organizational Objectives
 Needs Assessment
 Is There a Gap?
 Training Objectives
 Select the Trainees

 Select the Training Methods and Mode
 Choose a Means of Evaluating
 Administer Training
 Evaluate the Training
Every business should have a clearly defined strategy and set of objectives that
direct and drive all the decisions made especially for training decisions. Firms
that plan their training process are more successful than those that do not. Most
business owners want to succeed, but do not engage in training design that
promise to improve their chances of success. Why? The five reasons most often
identified are:
Time - Small businesses managers find that time demands do not allow them to
train employees.
Getting started - Most small business managers have not practiced training
employees. The training process is unfamiliar.
Broad expertise - Managers tend to have broad expertise rather than the
specialized skills needed for training and development activities.
Lack of trust and openness - Many managers prefer to keep information
themselves. By doing such they keep information from subordinates and others
who could be useful in the training and development process.
Scepticism as to the value of the training - Some small business owners
believe that future cannot be predicted or controlled and their efforts, therefore,
are best centred on current activities i.e., making money today.
A well-conceived training program can help your firm
succeed. A program structured with the company's strategy and objectives in
mind has a high probability of improving productivity and other goals that are
set in the training mission.
For any business, formulating a training strategy requires addressing a series of
questions.
 Who are your customers? Why do they buy from you?

 Who are your competitors? How do they serve the market? What
competitive advantages do they enjoy? What parts of the market have
they ignored?
 What strengths does the company have? What weaknesses?
 What social trends are emerging that will affect the firm?
The purpose of formulating a training strategy is to answer two relatively simple
but vitally important questions:
(1) What is our business?
(2) What should our business be?
Armed with the answers to these questions and a clear vision
of its mission, strategy and objectives, a company can identify its training
needs.
Identifying Training Needs
Training needs can be assessed by analysing three major
human resource areas: the organization as a whole, the job characteristics and
the needs of the individuals. This analysis will provide answers to the following
questions:
 Where is training needed?
 What specifically must an employee learn in order to be more
productive?
 Who needs to be trained?
Begin by assessing the current status of the company how it
does what it does best and the abilities of your employees to do these tasks. This
analysis will provide some benchmarks against which the effectiveness of a
training program can be evaluated. Your firm should know where it wants to be
in five years from its long-range strategic plan. What you need is a training
program to take your firm from here to there.

Second, consider whether the organization is financially
committed to supporting the training efforts. If not, any attempt to develop a
solid training program will fail.
Next, determine exactly where training is needed. It is
foolish to implement a company-wide training effort without concentrating
resources where they are needed most. An internal audit will help point out
areas that may benefit from training. Also, a skills inventory can help determine
the skills possessed by the employees in general. This inventory will help the
organization determine what skills are available now and what skills are needed
for future development.
Also, in today's market-driven economy, you would be
remiss not to ask your customers what they like about your business and what
areas they think should be improved. In summary, the analysis should focus on
the total organization and should tell you (1) where training is needed and (2)
where it will work within the organization.
Once you have determined where training is needed,
concentrate on the content of the program. Analyse the characteristics of the job
based on its description, the written narrative of what the employee actually
does. Training based on job descriptions should go into detail about how the job
is performed on a task-by-task basis. Actually doing the job will enable you to
get a better feel for what is done.
Individual employees can be evaluated by comparing their
current skill levels or performance to the organization's performance standards
or anticipated needs. Any discrepancies between actual and anticipated skill
levels, identifies a training need.
Selection of Trainees
Once you have decided what training is necessary and where
it is needed, the next decision is who should be trained? For a small business,
this question is crucial. Training an employee is expensive, especially when he
or she leaves your firm for a better job. Therefore, it is important to carefully
select who will be trained.
Training programs should be designed to consider the ability
of the employee to learn the material and to use it effectively, and to make the
most efficient use of resources possible. It is also important that employees be

motivated by the training experience. Employee failure in the program is not
only damaging to the employee but a waste of money as well. Selecting the
right trainees is important to the success of the program.
Training Goals
The goals of the training program should relate directly to
the needs determined by the assessment process outlined above. Course
objectives should clearly state what behaviour or skill will be changed as a
result of the training and should relate to the mission and strategic plan of the
company. Goals should include milestones to help take the employee from
where he or she is today to where the firm wants him or her in the future. Goal
setting helps to evaluate the training program and also to motivate employees.
Allowing employees to participate in setting goals increases the probability of
success.
Training Methods
There are two broad types of training available to small
businesses: on-the-job and off-the-job techniques. Individual circumstances and
the "who," "what" and "why" of your training program determine which method
to use.
On-the-job training is delivered to employees while they perform their regular
jobs. In this way, they do not lose time while they are learning. After a plan is
developed for what should be taught, employees should be informed of the
details. A timetable should be established with periodic evaluations to inform
employees about their progress. On-the-job techniques include orientations, job
instruction training, apprenticeships, internships and assistantships, job rotation
and coaching.
Off-the-job techniques include lectures, special study, films, television
conferences or discussions, case studies, role playing, simulation, programmed
instruction and laboratory training. Most of these techniques can be used by
small businesses although, some may be too costly.
Orientations are for new employees. The first several days on the job are
crucial in the success of new employees. This point is illustrated by the fact that
60% of all employees who quit do so in the first ten days. Orientation training
should emphasize the following topics:

 The company's history and mission.
 The key members in the organization.
 The key members in the department, and how the department helps fulfil
the mission of the company.
 Personnel rules and regulations.
Some companies use verbal presentations while others have written
presentations. Many small businesses convey these topics in one-on-one
orientations. No matter what method is used, it is important that the newcomer
understand his or her new place of employment.
Lectures present training material verbally and are used when the goal is to
present a great deal of material to many people. It is more cost effective to
lecture to a group than to train people individually. Lecturing is one-way
communication and as such may not be the most effective way to train. Also, it
is hard to ensure that the entire audience understands a topic on the same level;
by targeting the average attendee you may undertrain some and lose others.
Despite these drawbacks, lecturing is the most cost-effective way of reaching
large audiences.
Role playing and simulation are training techniques that attempt to bring
realistic decision making situations to the trainee. Likely problems and
alternative solutions are presented for discussion. The adage there is no better
trainer than experience is exemplified with this type of training. Experienced
employees can describe real world experiences, and can help in and learn from
developing the solutions to these simulations. This method is cost effective and
is used in marketing and management training.
Audio-visual methods such as television, videotapes and films are the most
effective means of providing real world conditions and situations in a short
time. One advantage is that the presentation is the same no matter how many
times it's played. This is not true with lectures, which can change as the speaker
is changed or can be influenced by outside constraints. The major flaw with the
audio-visual method is that it does not allow for questions and interactions with
the speaker, nor does it allow for changes in the presentation for different
audiences.

Job rotation involves moving an employee through a series of jobs so he or she
can get a good feel for the tasks that are associated with different jobs. It is
usually used in training for supervisory positions. The employee learns a little
about everything. This is a good strategy for small businesses because of the
many jobs an employee may be asked to do.
Apprenticeships develop employees who can do many different tasks. They
usually involve several related groups of skills that allow the apprentice to
practice a particular trade, and they take place over a long period of time in
which the apprentice works for, and with, the senior skilled worker.
Apprenticeships are especially appropriate for jobs requiring production skills.
Internships and assistantships are usually a combination of classroom and on-
the-job training. They are often used to train prospective managers or marketing
personnel.
Programmed learning, computer-aided instruction and interactive video all
have one thing in common: they allow the trainee to learn at his or her own
pace. Also, they allow material already learned to be bypassed in favour of
material with which a trainee is having difficulty. After the introductory period,
the instructor need not be present, and the trainee can learn as his or her time
allows. These methods sound good, but may be beyond the resources of some
small businesses.
Laboratory training is conducted for groups by skilled trainers. It usually is
conducted at a neutral site and is used by upper- and middle management
trainees to develop a spirit of teamwork and an increased ability to deal with
management and peers. It can be costly and usually is offered by larger small
businesses.
Trainers
Who actually conducts the training depends on the type of
training needed and who will be receiving it. On-the-job training is conducted
mostly by supervisors; off-the-job training, by either in-house personnel or
outside instructors.
In-house training is the daily responsibility of supervisors
and employees. Supervisors are ultimately responsible for the productivity and,
therefore, the training of their subordinates. These supervisors should be taught

the techniques of good training. They must be aware of the knowledge and
skills necessary to make a productive employee.
Trainers should be taught to establish goals and objectives
for their training and to determine how these objectives can be used to influence
the productivity of their departments. They also must be aware of how adults
learn and how best to communicate with adults. Small businesses need to
develop their supervisors' training capabilities by sending them to courses on
training methods. The investment will pay off in increased productivity.
There are several ways to select training personnel for off-
the-job training programs. Many small businesses use in-house personnel to
develop formal training programs to be delivered to employees off line from
their normal work activities, during company meetings or individually at
prearranged training sessions.
There are many outside training sources, including
consultants, technical and vocational schools, continuing education programs,
chambers of commerce and economic development groups. Selecting an outside
source for training has advantages and disadvantages. The biggest advantage is
that these organizations are well versed in training techniques, which is often
not the case with in-house personnel.
The disadvantage of using outside training specialists is their
limited knowledge of the company's product or service and customer needs.
These trainers have a more general knowledge of customer satisfaction and
needs. In many cases, the outside trainer can develop this knowledge quickly by
immersing himself or herself in the company prior to training the employees.
Another disadvantage of using outside trainers is the relatively high cost
compared to in-house training, although the higher cost may be offset by the
increased effectiveness of the training.
Whoever is selected to conduct the training, either outside or
in-house trainers, it is important that the company's goals and values be
carefully explained.
Training Administration
Having planned the training program properly, you must now administer the
training to the selected employees. It is important to follow through to make

sure the goals are being met. Questions to consider before training begins
include:
 Location.
 Facilities.
 Accessibility.
 Comfort.
 Equipment.
 Timing.
Careful attention to these operational details will contribute
to the success of the training program.
An effective training program administrator should follow these steps:
 Define the organizational objectives.
 Determine the needs of the training program.
 Define training goals.
 Develop training methods.
 Decide whom to train.
 Decide who should do the training.
 Administer the training.
 Evaluate the training program.
Following these steps will help an administrator develop an effective training
program to ensure that the firm keeps qualified employees who are productive,
happy workers. This will contribute positively to the bottom line.
Evaluation of Training
Training should be evaluated several times during the process. Determine these
milestones when you develop the training. Employees should be evaluated by
comparing their newly acquired skills with the skills defined by the goals of the
training program. Any discrepancies should be noted and adjustments made to

the training program to enable it to meet specified goals. Many training
programs fall short of their expectations simply because the administrator failed
to evaluate its progress until it was too late. Timely evaluation will prevent the
training from straying from its goals.

SUGGESTIONS
1. Employees were key-point for any company to achieve the targets and
goals. So, every organisation should look after everything for an
employee. Motivate them with rewards etc.
2. Celebrate some innovative treats like ―GRATITUDE WEEK-END‖ for
a week.
 Greet every employee irrespective of employee level.
 Appreciate for their work with some hand written letters.
 Use some sticky slips to motivate about their work and leave that
slip on their table before employee comes to their cabin.
 Decor ate entire office which makes even more colourful and
memorable.
 Share chocolates, sweets etc.
3. Make some testimonial, Inspirational videos about employee work and
upload them in company‘s website.
4. Effective monitoring of company‘s website.
5. It is always recommended to implement latest PMS methods like
―Check-in‖ in medium scale Organisations.
6. Use 720 Degree Performance appraisal technique effectively and
efficiently.

CONCLUSION
As far as my concern I can conclude as below
Since, many job seekers wanted to get into organisations like
NTPC because it is a PSU enterprise and that‘s why it will be always in spot
light of job seekers. So, Organisation should take care of employees and
employees must have the first priority. By all these employees will try to
enhance their skills, performance etc. on their own which is very beneficial for
the organisation. I hope current PMS method is not satisfying majority of the
employees and can implement the latest techniques initially on high level
employees.

ANNEXURE
Respondent details:-
Grade: ___________ Department: ___________
S. No Statement Scale (1-5)
1 The ability to deliver performance commitments
strongly influences career advancements at the
organisation
2 My manager gives me regular performance
feedback so that there are no surprises at the end
of performance cycle
3 Career goals and performance are considered
while nominating employees to any training
program
4 HR is able to effectively answer system related
queries put forward by me
5 There is regular documentation of individual‘s
work which can be easily referred to during
annual performance appraisal
6 My manager explains me the reasons for change
in marks, if any, after normalization
7 I feel PMC marks are in line with my actual
performance
8 My manager directly addresses issues of poor
performance
9 My performance has a significance impact on
my rewards
10 My manager is able to effectively explain my
performance gaps to me
11 HR helps me in understanding the PACE
process
12 My manager takes time to help each employee
achieve their best
13 I set my KPA‘s at the beginning of performance
cycle
14 My manager helps me in understanding how my
work contributes to organisation‘s goals

15 HR provides regular training and reading
material to help employees understand PMS
better
16 My manager inspires me to higher levels of
performance
17 PACE form has a simple and practical format
18 I am rewarded fairly for contributions I make to
the organisation‘s success
19 The performance assessment process helps me
improve my performance
20 Manager‘s jointly set the goals with sub
ordinates to ensure proper cascading of targets
21 Individual‘s career goals, and not only
organization‘s goals, are taken into account
while setting KPA‘s
22 The system of Appeals has helped in making
PACE process more transparent
 The questions are made according to the following parameters
Parameters Items
Linkage to Rewards 1, 3, 9, 18, 19
Goal setting 13, 17, 20, 21
Role of HR 4, 11, 15
Evaluation 2, 5, 6, 7, 8, 10, 22
Manager‘s support 12, 14, 16
Measures of Trust, Trustworthiness, and Performance Appraisal Perceptions
The following instructions prefaced the scales. The anchors shown
below were consistent throughout. Headings of construct names are for clarity
of exposition, and were not included in the surveys.
Indicate the degree to which you agree with each statement by using the
following scale:
1 Disagree strongly
2 Disagree

3 Neither agrees nor disagrees
4 Agree
5 Agree strongly
Think about [company name]'s top management team. For each
statement, write the number that best describes how much you agree or disagree
with each statement.
Ability
 Top management is very capable of performing its job.
 Top management is known to be successful at the things it tries to do.
 Top management has much knowledge about the work that needs done.
 I feel very confident about top management's skills.
 Top management has specialized capabilities that can increase our
performance.
 Top management is well qualified.
Trust
 If I had my way, I wouldn't let top management have any influence over
issues that are important to me
 I would be willing to let top management have complete control over my
future in this company.
 I really wish I had a good way to keep an eye on top management.
 I would be comfortable giving top management a task or problem which
was critical to me, even if I could not monitor their actions.
 Think about the performance review system at [company name], and
answer the following questions.
Benevolence
 Top management is very concerned about my welfare.
 My needs and desires are very important to top management.
 Top management would not knowingly do anything to hurt me.
 Top management really looks out for what is important to me.
 Top management will go out of its way to help me.
Integrity
 Top management has a strong sense of justice.
 I never have to wonder whether top management will stick to its word.
 Top management tries hard to be fair in dealings with others.
 Top management's actions and behaviours are not very consistent.
 I like top management's values.
 Sound principles seem to guide top management's behaviour.
Propensity

 One should be very cautious with strangers.
 Most experts tell the truth about the limits of their knowledge.
 Most people can be counted on to do what they say they will do.
 These days, you must be alert or someone is likely to take advantage of
you.
 Most salespeople are honest in describing their products.
 Most repair people will not overcharge people who are ignorant of their
specialty
 Most people answer public opinion polls honestly.
 Most adults are competent at their jobs.
Accuracy
 The evaluation of what skills I have is pretty accurate.
 How much work I get done is important to my performance review.
 How many mistakes I make in my work is important to my performance
review.
 Whether or not my supervisor likes me is important to my performance
review.
 How much effort I put into my job is important to my performance
review.
 How many "extra" things I do is important to my performance review.
 Finding ways for the company to save money is important to my
performance review.
 Coming up with good ideas for the company improves my performance
review.
Outcome instrumentality
 Whether or not I get a raise depends on my performance.
 If you are one of the better performers in this company, you will get one
of the better raises.
 If I perform well, my chances of moving up are improved.

BIBLIOGRAPHY
 http://empxtrack.com/bell-curve-for-performance-
appraisal
 http://www.chrmglobal.com/Articles/394/1/Bell-
Curve-Method-of-Performance-Appraisal.html
 http://articles.economictimes.indiatimes.com/2014-06-
06/news/50387617_1_performance-appraisal-bell-
curve-closing-bell/2
 The Guidebook for Performance improvement
working with Individuals and Organisations Edited
by Roger Kaufman, Sivasailam Thaigarajan, Paula
MacGillis.
 Deloitte University Press:
http://dupress.com/articles/hc-trends-2014-
performance-management/
 The Effect of the Performance Appraisal System on
Trust for Management :A Field Quasi-Experiment by
Roger C. Mayer, Baylor University and James H.
Davis, University of Notre Dame.
 http://www.bizmove.com/personnel/m4d.htm For
training and development.

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