Summer Training Project Report ON EFFECTIVENESS OF PERFORMANCE MANAGEMENT SYSTEM OF NTPC

Submitted 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

Acknowledgement
To accomplish a project work like this efforts of many people are required and ours is not an exception, a number of people have helped us. First of all we would like to thank Sri S.R Sahoo (manager-HR (RECIT),Mr Chandramauli(Senior manager-HR-Wages). I convey our special thanks to Miss Pratibha(Sr. Manager-HR(wages)) for her guidance during the course of our project study and all those persons who helped us in getting grass root information about NTPC and the performance management system working there, from whom we received valuable co-operation, useful suggestions and relevant data and information pertaining to our project and responses to questionnaire. We are thankful to all of our 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 Mr D.K Gupta and all the faculty members of MBA program, N.I.E.C for their constant 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

INDEX
S.NO 1. 2. 3. 4. 5. 6. 7. 8. 9.
TOPIC Acknowledgement Index Objectives of the study Introduction to the company/ topic Literature Review Research Methodology Data Analysis Findings & Conclusion Recommendations PAGE NO. SIGNATURE

10. References 11. Annexure

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.

INTRODUCTION TO NTPC

INTRODUCTION TO NTPC
NTPC: Indias largest power company
Established on 7th November 1975 to play a major role in the development of Indian Power Sector: NTPC Limited is today Indias largest power company with an installed capacity of 31,704 MW Lighting up more than one fourth of India through its 15 coal based 7 gas based and 5 joint venture projects, NTPC Limited plans to become a 75,000 MW Company by the year 2017 with a vision to become a world class integrated power major with increasing global presence. NTPC Ranked No. 1 Independent Power Producer in Asia and 2nd in the world in the Platts Top 250 Global Energy Company list for 2009. Ranked number ONE in the category the 'Best Workplaces for Large Organizations' and number tenth overall for the year 2009 by Great Places to Work Institutes India chapter in collaboration with Economic Times.

NTPC: At a Glance Category Coal based station Gas based station Joint venture Total

No. of stations 15 7 5

Capacity (MW) 24,885 3,955 2,864 31,704

Details of power Stations(NTPC) Project

a. Coal Based Singrauli Korba Ramagundam Farakka Vindhyachal Rihand Kahalgaon Dadri Talchar Kaniha Unchahar Talchar Thermal Tanda Simhadri Badarpur Sipat-II Uttar Pradesh Chhattisgarh Andhra Pradesh West Bengal Madhya Pradesh Uttar Pradesh Bihar Uttar Pradesh Orissa Uttar Pradesh Orissa Uttar Pradesh Andhra Pradesh Delhi Chhattisgarh Total 2000 2100 2600 1600 3260 2000 2340 1330 3000 1050 460 440 1000 705 1000 24885

State

Capacity(MW)

b. Gas Based Anta Auraiya Kawas Dadri Jhanor Rajeev Gandhi(Kayamkula) Faridabad Rajsthan Uttar Pradesh Gujrat Uttar Pradesh Gujrat Kerela Haryana Total c. Joint Venture Roukela Durgapur Bhilai Ratnagiri Kanti Orissa West Bengal Chhattisgarh Maharashtra Bihar Total Total Production(a+b+c) 120 120 574 1940 110 2864 31704 413 652 645 817 648 350 430 3955

Subsidiary companies of NTPC

NTPC Joint Ventures (15)

NTPC Joint Ventures (15)

GENERATION ARAVALI POWER COMPNAY PVT LTD 50% SERVICES UTILITY POWERTECH LTD 50% NTPC ALSTOM POWER SERVICES PVT LTD 50% NATIONAL HIGH POWER TEST LABORATORY PVT LTD 25% POWER TRADING PTC INDIA LTD 5.28% NATIONAL POWER EXCHNAGE LTD 16.67% EQUIPMENT MANUFACTRUI G NTPC BHEL POWER PROJECTS PVT LTD 50% BF NTPC ENERGY SYSTEMS LTD 49% COAL ACQUISITION INTERNATIONAL COAL VENTURES LTD 14.28% NTPC SCCL GLOBAL VENTURES PVT LTD 50%

NTPC TAMIL NADU ENERGY COMPNAY LTD 50%

NABINAGAR POWER GENERATING COMPNAY LTD 50% MEJA URJA NIGAM LTD 50% NTPC SAIL POWER COMPNAY PVT LTD 50% RATNAGIRI GAS AND POWER PVT LTD 29.65%

Electrifying performance
The company recorded a total generation of 218.84 Billion Units (Bus) showing an increase of 6% over the pervious years generation of 206.93 Bus with a share of 20% (Ines of JV company) in the total installed capacity of the country NTPC generated 28.6% electricity during 09-10. Exceeded the MoU Excellent target of 217 BUs.

Vision
A world class integrated power major, powering Indias 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 200910 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 200809, 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 Groups capital expenditure was Rs. 14,002.11 crore. Approved outlay for 2010-11 for NTPCs 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 Wealth
Third 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 Electrification
Under Rajiv Gandhi Grameen Vidyutikaran Yojana, NTPC Electric Supply Company Ltd (NESCL) completed electrification of 8017 villages and provided 8.65 Lakhs BPL connections, thereby exceeding GoI target of electrification of 7500 villages and 8.5 Lakhs BPL connections.

Commonwealth Games
Official Power Partner of Delhi 2010 Commonwealth Games.

Further Public Offer

Government shareholding in NTPC reduced from 89.5% to 84.5% through divestment 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 Korba

1000 MW 2100 MW

Gold Shield Silver Shield

Ramagundam Dadri (coal) Rihand Vindhyachal

2600 MW 840 MW 2000 MW 3260 MW

Silver Shield Bronze Shield Bronze Shield 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 Sipat-I (Coal), Chhattisgarh Barh I (Coal), Bihar Korba-III (Coal), Chhattisgarh Dadri-II (Coal)-Unit # 2, U.P. Farakka-III (Coal), West Bengal

Capacity 1980 1980 500 490 500

Simhadri-II (Coal), Andhra Pradesh Indira Gandhi STPP - JV With HPGCL & IPGCL (Coal), Haryana Vallur (Phase -I & Phase II) (Coal) - JV With TNEB, Tamil Nadu Nabinagar-JV With Railways (Coal), Bihar Bongaigaon (Coal), Assam Mauda-I (Coal), Maharashtra Barh-II (Coal), Bihar Rihand-III (Coal), UP Vindhyachal-IV (Coal), MP Muzaffarpur-II (Coal), JV With BSEB, Bihar Koldam (Hydro), H.P Loharinag Pala ( Hydro ), Uttaranchal* Tapovan Vishnugad ( Hydro ), Uttaranchal Total

1000 1500

1500

1000 750 1000 1320 1000 1000 390 800 600 520 17,830 MW

Capacity Addition in 2009-2010 (1560 MW)

Project/ Unit NTPC owned Kahalgaon Stage-II 500 Capacity (MW)

Dadri Stage-II, Unit # 5 Under JVs RGPPL Block- I Less on account of overall de-rating of RGPPL Kanti Stage-I Net addition

490

640 (-)180 110* 1560

Planned Capacity Addition in 2010-2011 (4150 MW)

Project/ Unit Sipat Stage-I, Unit-1 Jhajjar, Unit-1 & 2 Korba Stage III, Unit-7 NCTPP Stage II, Unit-6 Simhadri, Stage-II, Unit-3 & 4 Farakka, Stage-III, Unit-6 Total

Capacity (MW) 660 1000 500 490 1000 500 4150

Future Capacity Under Different Stages

Projects for which bids invited Projects for which FR approved Projects for which FR prepared/under preparation 7092 MW 4345 MW ~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.

Generation
Impressive Growth Rate Generation increased by nearly 6% to 218.84 BUs compared to 3% generation growth achieved in 2008-09; Exceeded the MoU Excellent target of 217 BUs.

Generation (BUs)
218.84 200.86 188.67 170.88 206.93

2005-06

2006-07

2007-08

2008-09

2009-10

Sustaining Market Leadership

Contributed 28.6% of total electricity generated in the country

Total electricity available in the country

771.17 BUs

Electricity import from Bhutan Total Electricity Generation in the Country Total Generation from NTPC Units NTPC share in total electricity generation in the country

5.34 BUs 765.83 BUs 218.84 BUs 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 Development

Working on captive coal mines with target of 47 MTPA by 2017 from the 6 blocks allotted. More than 6735 acres of Land in Pakri Barwadih and about 1594 acres of land in Chatti Bariatu coal block have been acquired and land acquisition for Dulanga and Talaipalli are in progress. Rehabilitation Action Plan (RAP) has been approved by NTPC Board for Pakri Barwadih, 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 and maintenance 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 Nuclear

JV agreement is expected to be signed shortly with Nuclear Power Corporation of India Limited (NPCIL). Approval has been obtained from Department of Atomic Energy (DAE).

Focus on Renewables
By 2017, NTPC plans to have at least 1000 MW through renewable energy resources such as wind, hydro, solar, biomass and geo-thermal.

Long Term Corporate Plan upto 2032

Finalizing the Long Term Corporate Plan of NTPC to set the goals and directions for a period of 2032 with a view to positioning NTPC as the worlds largest and best power producer.

Technology Roadmap upto 2032

Chalking out a long term technology roadmap upto 2032 which involves development, adoption and promotion of safe, efficient and clean technologies for 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 Biomethanation 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 is 8.5 % more than last year. 545 million ash bricks have been manufactured in Pilot ash brick manufacturing plants. 1.13 million tons of ash from Talcher-Thermal has been utilized for filling of 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 MANAGEMENT HR Vision:

To enable our people to be a family of committed world class professionals, making NTPC a learning organization.
The HR Dept. has a long history in NTPC. This dept. was earlier known as personnel dept. then finally HRS(Human Resource Services) HRS contributes its expertise in handling and executing the Existing and Developing HR trends and innovations. Following are the areas of operation. :Employee Welfare Employee Benefits Employee Relations (Industrial Relations) Employee Services (Office Admin.)And Pensions Employee Services (Town Admin.) Training and Development (EDC) Performance Management System and Human Resource Development Corporate Social Responsibility Rajbhasha (Hindi) Law Peoplesoft HRMS (ERP Software) Public Relations

The HR strategy of NTPC has been designed around the four building blocks of competence building, commitment building, culture building and system building. Culture building is done by creating transparency, openness and ease of communication, strengthening mutual respect and trust, leading to establishment of a people oriented and people sensitive organization. This has resulted in recognition of NTPC as one of the best employers in the country as well as obtaining consistently high rankings in surveys such as Great place to work and Best companies to work for. Employee Development Centers (EDC) have been set up to cater to the need of appropriate Training and Development of employees. Leadership Assessment and Development System (LEADS): With a view to developing a pipeline of leaders for key leadership positions in the company, an initiative named LEADS has been launched. A Leadership Development Centre (LDC) at corporate centre has been set up to formulate the process of identifying and grooming potential leaders. High Productivity of Team-NTPC: During 2009-10, sales per employee increased from Rs. 1.77 crore to Rs.1.96 crore, profit per employee increased from Rs. 34.7 lakh to Rs. 36.45 lakh, value added per employee increased from Rs. 59.36 lakh to Rs. 72.96 lakh and the man:MW ratio improved from 0.85 to 0.82. Total employee strength is 24,955 as on 31.03.2010, as against 24,713 on 31.03.2009 (including employees in JVs & Subsidiaries).

LITRATURE REVIEW
What Performance Management Is Not?
its not just an annual performance appraisal its not imposing targets/goals on an employee by his supervisor its not only evaluating individual job performance

What is Performance Management:

its Management By Objectives (MBO) its about setting SMARTER goals its about planning to perform its about periodically reviewing progress in performance its about evaluating performance for further improvement its about delivering reinforcement for performance success and performance failure

BENEFITS OF PERFORMANCE APPRAISAL EMPLOYERS PERSPECTIVE

1. Despite imperfect measurement techniques, individual differences in performance can make a difference to the companys performance.

2. Documentation of performance appraisal and feedback may be needed for legal defense.

3. Performance appraisal dimensions and standards can help to implement strategic goals 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 include teamwork and teams can be the focus of teamwork.

EMPLOYEES PERSPECTIVE
1. Performance feedback is needed and desired by the individual employee to improve his/her performance.

2. Fairness requires that differences in performance levels across workers be measured and have an effect on the outcomes.

3. Assessment and recognition of performance levels can motivate workers to improve their performance.

PROBLEMS AFFECTING THE VALIDITY OF PERFORMANCE APPRAISAL SYSTEM

1. HALO EFFECT
This type of error occurs when the rater allows one aspect of a mans character or performance to influence his entire evaluation.

2. CENTRAL TENDENCY
This error occurs when the rater is in doubt about the subordinates or has inadequate information about them or is giving less attention and effort to the rating process.

3. LENIENCY ERROR
Some supervisors have a tendency to be easy raters. Lenient raters consistently assign high values to their subordinates. This type of error results in wrong evaluation of the performance of subordinate.

4. STRICTNESS ERROR
Some other types of supervisors have a tendency to be harsh in their ratings. They continuously give low ratings to their subordinates.

5. RECENCY EFFECT
Often some raters evaluate persons on the basis of their performance in recent few weeks, average constant behaviour is not checked.

Performance Management System At NTPC

PMS AT NTPC
PMS is a five step process:-

Step 1
Performance planning

Step 2
Mid year Review

PMS Process
Step 3

Feedback Step 5

Annual Assessment

Normalisation Process

Step 4

1.

Performance Planning
Performance Planning is the process of: 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 executives 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 take

2. Mid Year Review

Performance management is not an event but an ongoing process. Mid year reviews 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 Revisiting KPAs and goals, if necessary Assessing resource and skill requirements affecting the individuals 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
(37)

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 Normalization
The objectives of the Normalization System in PMS are to: Ensure parity and integrity by minimizing variation in rating by different reporting officers across various departments and locations Enhance objectivity and transparency in the appraisal system To view individual performance from the perspective of organizational achievement.

5 Feedback, Coaching and Counselling

In order to make PMS an open system and to enhance development orientation across the organization; feedback, coaching and counselling are essential components. Communicating the final performance results of the executive and providing 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 officer should create suitable conditions for providing performance feedback in the most effective manner. (Refer to appendix for tips to reporting officers on conducting effective 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-development

5.2 Coaching and Counselling

Coaching is an on-the-job approach to help individuals to develop and raise their skills 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 Facilitating individuals to raise their level of contribution and achievement. Counselling in the PMS context essentially is a process by which executives can receive assistance in sorting out issues and related to current and future responsibilities and aspirations. Therefore, reporting officers are required to encourage individuals to plan for their own self-development. The process of counselling 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 individual on his/her performance. It is often used by reviewer/reporting officer to communicate the areas for development and improvement to the executive.
(39)

KPA Setting Process:

Corporate plan

Company Goals

MOUs

Initiatives

Unit Goals

Functional /Departmental Goals

Special task

Individual Goals

PMS COMPRISES ASSESSMENT ON FOUR PARAMETERS WITH DIFFERENT WEIGHTAGES FOR VARIOUS LEVELS S.NO. 1 2 a. b. 3 4 PMS PARAMETER KPA Functional competency assessment Managerial competency assessment Potential assessment Value assessment WEIGHTAGES FOR DIFFERENT GRADES E1-E3 E4 E5 E6-E7 E7A-E8 E9 80 75 65 60 50 50 10 05 Nil 05 10 05 05 05 10 10 10 05 10 10 10 10 10 15 10 15 05 15 10 20

Total

100

100

100

100

100

100

For junior executives there is higher weightage on KPAs and functional competencies as there is higher focus on achieving the immediate functional task. The weightage on Managerial competencies and values increases for an executive as the grade increases because of importance of achieving business goals by managing work of other employees through ethical means. At NTPC Online Performance Management System is being practiced for Executives. For Non Executives it is still manual.

Thre are three major challenges in effective implementation of PMS at NTPC 1. 2. 3. Involvement of big number of executives (approx 1200) in designing of KPAs and Competency Directory. Skill gap in feedback and performance counseling. 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 being appraised. This is not in much in organisations as it very subjective and judgmental. It
could also be biased and prejudiced.

Competence based performance appraisal system: Here the job analysis is used and the employee is appraised for the skills he exhibits. For e.g. if his job entails dealing with the clients then he is judged foe his effectiveness in dealing with them. This enables both the organisation and the employee as to what deficiencies are to be overcome and can be useful in providing training to the employee to better his performance. Result based performance appraisal system: This system concentrates on the final results achieved by the employee irrespective of his personality or deficiencies. This is totally related to the job and concentrates on the end results that are more important to the organization. Thus Performance Appraisal is the process to establish the competency and the learning gap in addition to reward system. Performance increment would depend on the performance appraisal input for the department and the management for decision making. Human Resources would craft the notice and letter to communicate to the employees. This is also an important issue. Human Resources is the corporate communicator and is responsible for employees communication

(56)

Roles and Responsibilities

1 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 DESIGN
Research design was adopted for the Exploratory Research Study. The main purpose of the study was to formulate the problem in appraisal system for investigation. The major emphasis was on the discovery of ideas & opinions of the employees at different levels to improve the existing appraisal system. Two methods were used for the study-:

1. The survey of concerning literature. 2. The experience survey

SAMPLING DESIGN
The sampling design used for the study was Stratified Sampling. The different strata or homogeneous group formed was-: Executives

SAMPLING UNIT
The sampling unit was National Thermal Power Station, Lodhi road, New Delhi.

SAMPLE SIZE
In total 42 employees(executives) were interviewed during the study.

DATA COLLECTION METHODS

In the survey two types of data were collected-:

1. PRIMARY DATA
Primary data are those which are collected for the first time and therefore original in nature.

2. SECONDARY DATA

Secondary data are those which have already been collected by someone else and hence passed through the statistical process.

For the collection of primary data methods used-: QUESTIONNAIRE METHOD

I prepared a structured questionnaire on the basis of information collected from different sources. The questionnaire contains both open & closed ended questions.

2. SECONDARY DATA COLLECTION

Secondary data were collected from the following sources-: (A) Books related to the topic (B) Company documents (C) Magazines (D) Websites

STATISTICAL TOOLS USED

Statistical tools used in the project study are-: 1. TABLES 2. PIE CHARTS

Data Analysis Of Feedback Given By Executives

Quest:-1 your job description clearly define KPAs on which your performance is rated.
OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE NO. OF RESPONDENTS PERCENTAGE 12 28 27 64 0 0 3 7 0 0

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference:- They were well aware about there KPAs and felt that it is
according to there job profile as 92% Executives agreed to it.

Quest: 2 -The goals (KPAs) set are always mutually agreed upon i.e. your consent is taken into consideration while setting KPAs.

OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

NO. OF RESPONDENTS PERCENTAGE 8 19 32 76 0 0 2 5 0 0

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference: - The response was divided although 76 % Executives agreed about

their consent being taken into the KPA setting process, 5% disagreed. It says that in general executives participate in the KPA setting process but there is some dissatisfaction.

Quest: 3 Do you feel that the mutually agreed upon targets /timelines are soft and can be
stretched further for improved performance. OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE NO. OF RESPONDENTS PERCENTAGE 5 12 18 43 7 17 12 28 0 0

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference: - 28% of respondents disagreed about the softness of their timelines

and 17% dont want to answer. There is a sort of dissatisfaction regarding Timelines or targets that are unable to improve the performance of executives.

Quest: 4- You are satisfied with the weightages given against each activity that you are supposed to perform in the specified period.
OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE NO. OF RESPONDENTS PERCENTAGE 8 19 27 64 4 9 3 7 0 0

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference:-Mostly, they agreed about the adequacy of weightages given against

each activity which they are supposed to perform in a given period.

Quest: 5- The deadlines set to complete and submit the performance documents are sufficient.
OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE NO. OF RESPONDENTS PERCENTAGE 11 26 26 62 4 9 1 2 0 0

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference:- Mostly they are satisfied with the operations of Performance

Management system.

Quest: 6 - The KPAs are in accordance with the MOU targets of the company and the targets of the plant.
OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE NO. OF RESPONDENTS PERCENTAGE 12 28 22 52 6 14 2 5 0 0

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference:- It simply shows the awareness level of Executives. 66% of them

were agree and felt that individual goals matches well with unit goals and company goals.

Quest: 7- All the factors facilitating and hindering performance are taken into consideration while appraising the performance.
OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE NO. OF RESPONDENTS PERCENTAGE 10 24 17 40 13 31 2 5 0 0

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY

DISAGREE STONGLY DISAGREE

Inference:- A healthy proportion of them agreed to this. Generally most of the

factors affecting the performance of an employee are taken into considereation.

Quest: 8- Your seniors assist you at the time of your need.

OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

NO. OF RESPONDENTS PERCENTAGE 18 43 23 55 1 2 0 0 0 0

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference:- The response says that that there is a healthy environment of

working, seniors assist their subordinates whenever there is any need.

Quest: 9- Your final rating is doesnt only on your competencies and KPAs but also on several other factors are like your interpersonal relation with the rater.
OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE NO. OF RESPONDENTS PERCENTAGE 7 17 21 50 10 24 3 7 1 2

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference:- Along with the competencies and KPA achievements the factors
like communication skills of the executives matter while rating their performance.

Quest: 10- Your doubts and queries are addressed by the PMS administrator while operating online PMS.
OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE NO. OF RESPONDENTS PERCENTAGE 10 24 27 64 3 7 1 2 0 0

NO. OF RESPONDENTS

10

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference:- Except a few disagreement most of the employees agree that their
doubts and queries are addressed by the PMS administrator.

Quest: 11- The process is used mainly for improving the future performance
OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE NO. OF RESPONDENTS PERCENTAGE 5 12 23 55 10 24 4 9 0 0

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference:-Performance management is meant for improving future

performance of employees and most of them agreed to it. The rewards and recognitions are part of performance upgradation.

Quest: 12- You feel free to express to your appraiser your disagreement regarding the appraisal decision.

OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

NO. OF RESPONDENTS PERCENTAGE 6 14 12 52 8 19 6 14 1 0

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference:-It seems that upto some extent the employees are hesitant to
express their disagreement regarding the appraisal decision to their appraiser, but overall the system is open and flexible as 52% of them agreed to it and almost the same no were neutral.

Quest: 13- Your seniors provides you with continuous feedback to help you achieve your KPAs.

OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

NO. OF RESPONDENTS PERCENTAGE 10 24 20 48 6 14 5 12 1 2

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference:-Mostly Executives are well aware about their KPAs and seniors
keep providing them feedback to achieve that, although some of them disagreed to it which may be due to miscommunication between senior and subordinates.

Quest: 14 - The recognition given to high performance is appropriate and helps in motivating the employee.

OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

NO. OF RESPONDENTS PERCENTAGE 9 21 20 48 7 17 5 12 1 2

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference:-The recognition given to High performers is appropriate. There are

scopes of evolution of the recognition system so that even those who disagreed to the appropriateness of the recognition system get satisfied.

Quest: 15-Does the PMS effectively captures the training needs of executives.

OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

NO. OF RESPONDENTS PERCENTAGE 5 12 16 38 9 21 11 26 1 2

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Quest: 16- Appropriate training is given to employees who fail to meet the expected performance level.
OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE NO. OF RESPONDENTS PERCENTAGE 3 7 5 12 18 43 14 33 1 2

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference:-Although half of the executives surveyed preferred to not to say

anything, There is a need to improve the training system so that appropriate training could be given to those who need it.

Quest: 17- The online PMS is dynamic and keeps you aware about your instantaneous weak and strong area of performance effectively.
OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE NO. OF RESPONDENTS PERCENTAGE 6 14 14 33 9 21 10 24 2 5

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference:-The online PMS may be dynamic as compared to the manual

system but it does not provide instantaneous feedback about ones KPAs.

Quest: 18- Managers and Employees trust the appraisal process.

OPINION STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE NO. OF RESPONDENTS PERCENTAGE 6 14 18 43 11 26 6 14 1 2

NO. OF RESPONDENTS

STRONGLY AGREE AGREE CAN'T SAY DISAGREE STONGLY DISAGREE

Inference:-The appraisal process is trustworthy.

FINDINGS AND ANALYSIS

On the basis of the survey conducted, following points has emerged out which require the attention of the management-:

1. The present performance appraisal system below E7 level is not effective enough to serve the purpose of employees appraisal. 2. Below E6 level the Management by Objectives approach is not followed and hence the employees are not clear about their functions based on these objectives.

3. Proper weightages are not assigned to different attributes which differ in their importance.

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 judge their performance.

6. There is a wide gap between the self assessment by the employee and the formal appraisal done by the organization.

7. There is no provision of incentives to the individual employee based on his/her performance 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 potential for higher responsibilities.

10. Employees do not get sufficient opportunity to appeal to the higher authorities in 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 affect their performance considerably.

13. Training is not provided to the employees on the basis of his/ her performance appraisal rating.

CONLUSION AND RECOMMENDATIONS RECOMMENDATIONS

1. Management by objective approach should be introduced below E6 level and upto E1 level, so that executives at lower levels should also be aware about their functions based on these objectives. 2. Before setting the KRAs, the employees should prepare themselves by reviewing their work beforehand, identifying barriers they faced in doing their jobs and refamiliarise themselves with their job descriptions, job responsibilities etc.

3. Appraise should be allowed to present their own opinions and perceptions freely but in a calm and factual manner.

4. Performance appraisal should not be concentrated to forms only but on its purpose of performance improvement by removing barriers to job success.

5. Both appraiser & appraise should combinedly set realistic targets that can be achievable, otherwise the procedure of setting KRAs is wastage of time.

6. Weightages should be assigned to different attributes according to their importance.

7. Formal feedback should be provided on regular basis to the employees, so that problems can be prevented in their early stages. Its a two way communication process, therefore a subordinate can also initiate the process.

8. Reporting officer should make the employees aware about the criterion used for their performance appraisal.

9. Monetary & non monetary incentives should be given to the individual employee on the spot, by the manager, based on their performance. It will motivate the employee.

10. Behavioral aspect of the employee should be given due importance while reviewing his performance.

11. Training should be provided to the employee on the basis of his/ her performance appraisal rating. It will help him/her to get new skills.

12. The procedure of performance appraisal should be transparent in the sense that the employee should be aware about his/her appraisal rating.

13. Communication gap between the appraiser & appraise should be reduced by means 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 promotion and employees get higher responsibilities on the basis of their potential and aptitude. So, there should be potential appraisal along with performance appraisal at this level and above.

16. A computerized system should be introduced to fill the forms and submission at supervisor level and above. It will reduce the time required to do appraisal and at the same time bring transparency between the appraisers and appraise, as he/she can see his/her ratings on the computer whenever they want. A password should also be assigned to the employee to keep his/her ratings confidential.

CONLUSION
The aim of performance management system is ensuring the maximization of efforts by the employees of the organization to realize the desired goals. More effective the performance management of an organization more productive the organization would be. NTPC as a whole is a big organization with vast number of employees working there, to manage the performance of such a great number of people efficiently is a herculean task. The survey and personal interviews conducted during the project work says that an effective performance management system is on place but as we know everything in this world keep evolving itself for betterment, the performance management system is not an exception. NTPC can touch new heights in the field of energy management by managing its manpower more efficiently, addressing there training needs, recognizing the high performances and making them 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.

REFERENCES
Human Resource and Personal Management Organizational Behavior http/intranet 1 KHSTPP
http://www.ntpc.co.in/index.php?option=com_content&view=article&id=28&Itemid=41&lang= en

K. Ashwathapa Stephen p. Robins

www.citehr.com www.ntpc.co.in

ANNEXURE

SURVEY ON PERFORMANCE APPRAISAL SYSTEM

This survey will only be used as an instrument for my summer training report for MBA.

PERSONAL INFORMATION
GRADE: DEPARTMENT: . SECTION: NUMBER OF YEARS OF SERVICE IN NTPC: . S.NO QUESTIONS 1 Your job description clearly defines KPAs (Key performing areas) on which your performance is rated. Do you feel that goals (KPAs) set are always mutually agreed upon i.e. your consent is taken into consideration while setting KPAs. Do you feel that the mutually agreed upon targets /timelines are soft and can be stretched further for improved performance. Are you satisfied with the weightage given against each activity that you are supposed to perform in the specified period The deadlines set to complete and submit the performance documents are sufficient. STRONGLY AGREE AGREE CANT SAY DISAGREE STRONGLY DISAGREE

S.NO QUESTIONS 6 Your KPA,s are in accordance with the MOU targets of the company and the targets of the unit. All the factors facilitating and hindering performance are taken into consideration while appraising the performance Your seniors assist you at the time of your need. Your final rating is based not only on your competencies and KPAs but also on several other factors like interpersonal relation with the rater. Your doubts/Queries are addressed by the PMS administrator while operating online PMS. The process is used mainly for improving the present performance. Do You feel free to express to your appraiser your disagreement regarding the appraisal decision Your senior manager provides you with continuous feedback to help you achieve your KPAs. The recognition given to high performance is appropriate and helps in motivating the employees

STRONGLY AGREE AGREE

CANT SAY

DISAGREE STRONGLY DISAGREE

8 9

10

11

12

13

14

S.NO QUESTIONS 15 Does the pms effectively capture training needs of executives. Appropriate training is given to employees who fail to meet the expected performance level. Do you feel the online PMS is dynamic and keeps you aware about your instantaneous weak or strong area of performance effectively Do you feel Managers and Employees trust the appraisal process

STRONGLY AGREE AGREE

CANT SAY

DISAGREE STRONGLY DISAGREE

16

17

18

YOUR SUGGESTIONS TO IMPROVE THE EXISTING PERFORMANCE APPRAISAL SYSTEM: THANK YOU, NIDHI (STUDENT-MBA, NIEC, NEW DELHI)