Compensation Management Tamil 6k546y

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PROJECT REPORT ON REPORT ON "TO ANALYZE THE PRESENT PERFORMANCE APPRAISAL SYSTEM OF NTPC LTD." Project report submitted in partial fulfilment of the requirement of South Asia University for the award of the degree of

MASTER OF BUSINESS ISTRATION 2012 Submitted By

NAME

:

Tamilarasan.A

ENROLLMENT NO

:

SAA04F147ELB1HA3

SOUTH ASIA UNIVERSITY LONDON

BONAFIDE CERTIFICATE

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CERTIFICATE

This is to certify that project entitled “PROJECT REPORT ON"TO ANALYZE THE PRESENT PERFORMANCE APPRAISAL SYSTEM OF NTPC LTD." “ is submitted by Tamilarasan.A (ENROLMENT NUMBER - SAA04M147ELB1HA3), GEMS B SCHOOL, Bangalore. in partial fulfillment of the seventh trimester requirement in for the award of the degree master of business istration and is certified to be an original and bonafide work.

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PREFACE

It gives me great pleasure to bring out this project study entitled- “To analyze the present performance appraisal system of National Thermal Power Corporation Ltd.”. It is interesting and at the same time, challenging also to analyze the performance appraisal system of such a large organization. This project study contains necessary information related to the company viz. - its journey from the year it was founded to the present year, total capacity, product profile, market share, sales figure, functions of various departments etc. It covers the opinions and expectations of the employees in the form of findings. Recommendations to improve the appraisal system have also been included. The procedure adopted to conduct the survey and collection of information is also described in the study. It is hoped that the suggestions recommended in the study would be welcomed and implemented by the management of the organization after proper consideration.

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TABLE OF CONTENTS CHAPTER 1-

EXECUTIVE SUMMARY

CHAPTER 2-

PROFILE OF THE COMPANY (A) INTRODUCTION (B) HUMAN RESOURCE POLICY (C) FUNCTIONS OF VARIOUS SECTIONS OF HR DEPARTMENT (D) HISTORY (E) PRODUCT PROFILE (F) SALES FIGURES/ MARKET SHARES (G) ORGANISATION CHART

CHAPTER 3-

PERFORMANCE APPRAISAL

CHAPTER 4-

RESEARCH METHODOLOGY (A) OBJECTIVE OF STUDY (B) SCOPE OF STUDY (C) RESEARCH PROCEDURE (D) TYPE OF DATA (E) DATA COLLECTION (F) STATISTICAL TOOLS USED (G) LIMITATIONS OF STUDY

CHAPTER 5-

FINDINGS AND ANALYSIS

CHAPTER 6-

CONCLUSION AND SUGGESTIONS

ANNEXURE 1. BIBLIOGRAPHY 2. QUESTIONNAIRE

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EXECUTIVE SUMMARY In my project, entitled-“To analyze the present performance appraisal system of National Thermal Power Corporation Ltd.”, I have studied the present appraisal system of NTPC by analyzing the details of the appraisal system, articulate the organizational, functional, departmental & individual objectives , factors in business dynamics to grade employees on objectives & transparent productivity parameters, self appraisal followed by reporting officer & higher authority’s assessment , link between rewards and performance to increase motivation level of employees , assessment of training & developmental needs of the individuals and make them aware about the parameters used to evaluate their performance. In my own style, I have tried to find out whether the present appraisal system is effective enough to serve the purpose of performance appraisal i.e. to understand the needs of employees and provide them formal & regular related to their performance. For this purpose, I used questionnaires to get the opinions of employees at different levels. I also went through different books, websites and magazines to gather material related to the topic. After collecting the information, I analyzed the data and provide the necessary suggestions to improve the system.

PROFILE OF THE COMPANY INTRODUCTION

National Thermal Power Corporation Limited (NTPC) is the largest thermal power generating company of India. A public sector company wholly owned by Government of India, it was incorporated in the year

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1975 to accelerate power development in the country. Within a span of 30 years, NTPC has emerged as a truly national power company; with power generating facilities in all the major regions of the country. Based on 1998 data, carried out by Data monitor UK, NTPC is the 6th largest in of thermal power generation and the second most efficient in of capacity utilization amongst the thermal utilities in the world.

NTPC's core business is engineering, construction and operation of power generating plants and also provides consultancy to power utilities in India and abroad. As on date the installed capacity of NTPC is 21,749 MW through its 13 coal based (17,480 MW), 7 gas based (3,955 MW) and 3 t Venture Projects (314 MW). NTPC acquired 50% equity of the SAIL Power Supply Corporation Ltd. (SPSCL). This JV company operates the captive power plants of Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74 MW). NTPC is also managing Badarpur thermal power station (705 MW) of Government of India. NTPC's share on 31 Mar 2004 in the total installed capacity of the country was 19.4% and it contributed 27.1% of the total power generation of the country during 2003-04. NTPC has set new benchmarks for the power industry both in the area of power plant construction and operations. It is providing power at the cheapest average tariff in the country. With its experience and expertise in the power sector, NTPC is extending consultancy services to various organizations in the power business. NTPC has entered into a t venture with Alstom, for renovation and modernization of power plants in India.

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NTPC is committed to the environment, generating power at minimal environmental cost and preserving the ecology in the vicinity of the plants. NTPC has undertaken massive afforestation in the vicinity of its plants. Plantations have increased forest area and reduced barren land. The massive afforestation by NTPC in and around its Ramagundam Power station (2100 MW) has contributed reducing the temperature in the areas by about 3°c. NTPC has also taken proactive steps for ash utilization. In 1991, it set up Ash Utilization Division to manage efficient use of the ash produced at its coal stations. This quality of ash produced is ideal for use in cement, concrete, cellular concrete, building material. A "Centre for Power Efficiency and Environment Protection (CENPEEP) has been established in NTPC with the assistance of United States Agency for International Development. (USAID). CENPEEP is efficiency oriented, eco-friendly and eco-nurturing initiative - a symbol of NTPC's concern towards environmental protection and continued commitment to sustainable power development in India. As a responsible corporate citizen, NTPC is making constant efforts to improve the socio-economic status of the people affected by its projects. Through its Rehabilitation and Resettlement programmes, the company endeavors to improve overall socio-economic status of Project Affected Persons. NTPC was among the first Public Sector Enterprises to enter into a Memorandum of Understanding (MOU) with the Government in 1987-88. NTPC has been Placed under the 'Excellent category' (the best category) every year since the MOU system became operative. Recognizing its excellent performance and vast potential, Government of the India has identified NTPC as one of the jewels of Public Sector 'Navratnas'- a potential global giant. Inspired by its glorious past and vibrant present, NTPC is well on its way to realize its vision of being "one of the world's largest and best power utilities, powering India's growth".

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HUMAN RESOURCE POLICY POWERING INDIA’S GROWTH: THROUGH PEOPLE

NTPC strongly believes in achieving organizational excellence through Human Resources and follows "People First" approach to leverage the potential of its 23,500 employees to fulfill its business plans. Human Resources Function has formulated an integrated HR strategy which rests on four building blocks of HR viz. Competence building, Commitment building, Culture building and Systems building. All HR initiatives are undertaken within this broad framework to actualize the H R Vision of "enabling the employees to be a family of committed world class professionals making NTPC a learning organization". To induct talent and groom them into a dedicated cadre of power professionals "Executive Trainee" Scheme was introduced in the year 1977 for recruitment in the disciplines of Mechanical, Electrical, Civil, Control & Instrumentation and now encomes Computer Science, Chemistry, HR and Finance disciplines also. Besides a comprehensive one year training comprising theoretical inputs as well as on-the-job training, the new recruits are attached with senior executives under a systematic and formal 'Mentoring System' of the company to integrate them into the Culture of the company. As part of post employment training and development opportunities, a systematic Training plan has been formulated for ensuring minimum seven man days training per employee per year and includes level-wise planned intervention designed to groom people for assuming positions of higher responsibility, as well as specific need-based interventions based on scientific Training Needs Analysis. NTPC has created 15 project training centres, 2 simulator training centres and an apex institute namely 'Power Management Institute' (PMI). While the project training centres (Employee Development Centres) have specialized in imparting technical skills and knowledge, PMI places emphasis on management development. Besides opportunities for long term education are also

10 | P a g e provided through tie ups with reputed Institutions like IIT, Delhi, (M.Tech in Power Generation Technology), MDI, Gurgaon (Executive MBA programme), BITS, Pilani (B.Tech) etc. In order to realize the HR Vision of making NTPC a learning Organization by providing opportunities to continually learn new capabilities a number of initiatives have been taken. NTPC Open Competition for Executive Talent (NOCET) is organized every year in which teams of executives compete annually through oral and written presentation on a topical theme. Similarly "Professional Circles" have been formed department-wise where Executives of the department meet every fortnight to share their knowledge and experiences and discuss topical issues. In order to tap the latent talent among non executives and make use of their potential for creativity and innovation, Quality Circles have been set up in various units/offices in NTPC. Besides a management journal called "Horizon" is published quarterly to enable the employees to share their ideas and experiences across the organization. Demonstrating its high concern for people, NTPC has developed strong employee welfare, health & well-being and social security systems leading to high level of commitment. NTPC offers best quality of life through beautiful townships with all amenities such as educational, medical and recreational opportunities for employees and their family . The motivation to perform and excel is further enhanced through comprehensive NTPC Rewards and Recognition system. In order to institutionalize a strong Culture based on Values a number of initiatives are taken to actualize the Vision and Core Values (COMIT) across the company. A culture of celebrating achievements and a strong focus on performance are a way of life in NTPC. NTPC has institutionalized "Development Centers" in the company to systematically diagnose the current and potential competency requirements of the employees with the objective of enhancing their development in a planned manner. These Centers give a good insight to the employees about their strengths and weaknesses, the gaps in their competencies which they can bridge through suitable from company. Due to innovative people management practices there is a high level of pride

11 | P a g e and commitment amongst employees as reflected in the "Best Employers in India-2003" survey by Hewitt Associates in which NTPC bagged coveted third rank. Further continuous efforts are being made by HR function to leverage the potential of its employees and become a strategic business partner.

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FUNCTIONS OF VARIOUS SECTIONS OF H.R. DEPARTMENT

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FUNCTIONS OF HR-EB (EMPLOYEE BENEFIT) SECTION 1. ESTABLISHMENT (A) Verification of characters & antecedent as per govt. directions (procedure being followed in C & D categories). (B) Checking of Submission of relevant and complete document before ing. (C) Check whether the personal file is complete in all respect, especially nomination papers, ing formalities etc. (D) Extent of annual assessment being done in case of employees (i.e. no. of complete reports received & total no. of employees). (E) Review discussion with executive before annual assessment. (F) Appoint appraising authorities for different levels. (G) Communication of adverse remarks. (H) Test for promotion of steno typist & stenographer. (I) Promotion of W 2 to W 3 & W 6 to S 1 employees. (J) How is period of unauthorized absence being treated in promotion cases. (K) Promotion of employees against whom disciplinary action has been taken. (L) Promotion in different categories in time with promotion policy/ channel of promotion. (M) Period for which leave is credited in advance for both executive & non-executives. (N) Calculation of amount of salary deducted during HPL. (O) Grant of study leave as per rules. Number of employees who have been granted study leave. (P) Diseases for which quantitative leave is sanctioned.

2. ADVANCES (A) House building advance / conveyance advance sanctioned strictly as per rules. (a) Eligibility (b) Amount of house building advance. (c) 2nd advance in case of conveyance.

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(B) Penal interest being charged in case of default under conveyance advance scheme. (C) System of check in case surety resigns in HBA. (D) Hypothecation of vehicle being ensured or not. (E) Commencement of recovery of HBA.

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FUNCTIONS OF HR-ES (EMPLOYEE SERVICE) SECTION 1. EMPLOYEE SERVICES & OFFICE MANAGEMENT SYSTEM (A) To fulfill the requirements of furniture in different departments of the company. (B) Issuance & entitlement of different items to various employees with in the company. (C) To ensure proper allotment of office space for officer’s cabins. (D) To manage all activities related to VVIP’S visits.

2. TOWNSHIP ISTRATION (A) Allotment of quarters to employees according to the availability of quarters & priority of the employee.

TYPES OF QUARTERS A type - For all employees B type - For W8 & above C type - For E3 & above D type - For E5 & above (B) Regarding education policy NTPC provides only infrastructural help like building, furniture etc. for education institute. (C) Responsibility of security of plant & township both. For plant security CISF personnel are deployed while for township security private guards are used. (D) Welfare activities include ladies clubs, canteen, resident’s welfare associations etc. (a) Company provides Rs. 1100 for marriage & a car for 3 days to the employee. (b) Picnics upto 180 kms. are organised by the company for employees. (c) Company also pays 90 % of the tour to the employee once in a year.

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FUNCTIONS OF HR-IE (INDUSTRIAL ENGINEERING) SECTION 1. RECRUITMENT (A) IE section is responsible for recruitment of trainees/apprentices (ITI, diploma and certificate holders). (B) They also engage visiting doctors for the dispensary of the company on temporary basis. (C) There is a provision of recruitment of fixed number of physically handicapped employees in the company.

2. MANPOWER PLANNING (A) Redeployment of employees like draftsman, operator etc. to other departments, where they are required. (B) IE section also look after the complete Human Resource Management System of the company. (C) They address the grievances of the employees and provide information to the management. (D) They are engaged in the transfers of the employees with in the project i.e. BTPS. (E) They give incentives to the employees for their good performance.

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TYPES OF INCENTIVES (a) ‘Meritorious productivity award’ given on 26th January & 15th August in the form of cash. (b) ‘Star of the month award’ given on monthly basis in non monetary form. (c) ‘Badarpur Bhushan award’ given yearly to those employees whose last 3 years performance is outstanding.

3. EMPLOYEE DEVELOPMENT (A) There is a suggestion scheme for employees in which they can give their suggestions to the management of the company. (B) Company also has job rotation policy for the employees. (C) IE section also carry out a quarterly magazine called ‘Sankalp’ in which different informations are included.

4. PROMOTION (A) Promotions of non executive employees are carried out by IE section. (B) They provide information to the corporate office regarding promotion of executive employees.

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FUNCTIONS OF HR-ER&W (EMPLOYEE RELATION & WELFARE) SECTION Badarpur Thermal Power Station has two tier system of working(A) General staff (from 8.30 a.m. to 5.00 p.m ) (B) Operation staff (work in 3 shifts) The powerhouse runs on 24 hrs. basis and different operational activities are carried out continuously. For general staff Sundays are weekly off while for the operational staff every 4 th day is off. Regarding welfare activities of the employees, both statutory & non statutory facilities are provided.

STATUTORY FACILITIES (A) Canteen facility for breakfast, lunch & dinner is provided to the employees. (B) Rest rooms for the purpose of relaxation are also available for employees. (C) There are separate toilets for ladies & gents in the company.

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NON STATUTORY FACILITIES (A) Accommodation facility is provided to the employees of the company. (B) There is a provision of education facility to the wards of the employees. (C) Balbhavan for small childrens for the purpose of their development. (D) Ladies club & NTPC club for recreation purpose of the employees (E) Company also provides personal accident insurance to the employee. (F) House building and conveyance advances are given to the employees. .

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COMPANY PROFILE

November, 1975 Foundation laid for NTPC. December, 1976, The first super thermal power project at Singrauli was cleared by Government of India. A modest beginning with strong determination and high spirits, moving ahead, gathering pace and heading on to what is today projected as a benchmark in the power generation sector. NTPC - An organization symbolizing reliability, strength and a responsible growth was born. The expansion and advancement of the company was continuous and speedy. Year 1978 The

year

saw

the

initiation

of

a

lot

of

developmental

activities.

Implementation of Ramagundam and Korba Projects was cleared by Government of India. Construction of the Singrauli-Kanpur line of 400 kV initiated. Another opportunity came across in the form of the handover of Badarpur to NTPC by Central Government for better management and improved performance. The Farakka project was also approved by the Government Year 1982 Steering ahead with times, by this year, the first unit of 200 MW of Singrauli, was successfully commissioned on February 13. The Rihand project was also cleared by Government of India with British assistance. The first unit of the Korba project was commissioned and the Ramagundam project began commercial operation by 1983. Year 1984 A technological revolution - a breakthrough in power transmission. for the first time, the HVDC (High Voltage Director Current) technology employed for power transmission from Rihand to Delhi. The

21 | P a g e World Bank agrees to provide $ 485 million for three combined cycle projects at Kawas, Auraiya and Anta. Year 1986 NTPC entered into the 500 MW era by synchronizing its first 500 MW unit at Singrauli in 1986. Farakka also entered operational phase. Year 1987 The first bud sown by NTPC burst full bloom. The Singrauli project achieved the full capacity of 2000 MW. The Korba project added first 500 MW Unit. Keeping in line with all the developmental activities, the first 210 MW unit of Vindhyachal project, which now has a capacity of 2260 MW, also came on stream. The first unit of 500 MW at Rihand was also commissioned by year 1988. Year 1989 To serve the power sector in India and abroad - the Consultancy Wing was launched... acting as a window for the globalization of NTPC operations. A capacity addition of 3,234 MW was made at Korba, Ramagundam, Vindhyachal, Rihand, Auraiya and Anta together. Year 1990 NTPC's first gas based combined cycle power plant at Anta, Rajasthan achieves full capacity. Year 1991 saw the commissioning of the first unit of the Dadri project. Year 1992 Unchahar project with a capacity of 420 MW was taken over from the Uttar Pradesh Rajya Vidyut Utpadan Nigam (UPRVUN). NTPC achieved a complete turnaround in the operation of the station. Two units with a capacity of 210 MW each were commissioned by NTPC after take over. Kahalgaon Project went on stream by synchronizing its first unit. The Kawas project with a capacity of 645 MW became fully operational by year 1993. Year 1994

22 | P a g e The first unit of Jhanor-Gandhar Gas Project was synchronized. The Centre for Power Efficiency and Environmental Project (CENPEEP) was set up. •

To acquire state-of-the-art technologies and practices to optimize performance by plants.

•

To improve efficiency and profitability, aimed at reducing environmental pollution.

•

To achieve a synergy between environmental concerns and utility needs. The centre proved a great help in minimizing the environmental impacts of the stations and also preserving the natural ecology in the vicinity of the stations.

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Year 1995 The first 500 MW unit of Talcher Super Thermal Power Project commissioned. By the year 1997, the Government also approved the Simhadri project with a 1000 MW capacity and the Faridabad Gas project with a capacity of 430 MW. Year 1998 By this year, the first Naphtha based plant of the country at Kayamkulam with a capacity of 350 MW came on stream. NTPC has been declared worlds sixth largest thermal power producer during 1998, by Data monitor, U.K. Year 2000 The power generation capacity of this premier organization reaches a towering high of 19,435 MW capacities moving towards substantial 40,000 MW capacities by year 2012. Pursuing its major objectives of planning, promoting and organizing an integrated development of thermal power in India. NTPC's foray in the Hydro sector. A beginning made with Koldam, the first Hydro Electric Power Project with a capacity of 800 MW in Himachal Pradesh. NTPC also took over Tanda Thermal Power Station (440 MW) of Uttar Pradesh State Electricity Board (UPSEB). Building up well defined, short and long term plans, with committed time schedules, evolving planned and organised functioning and ensuring dedication, loyalty and promptitude of those involved. Developing a participative management culture. Duly recognizing the socio-economic needs and aspirations of its employees and undertaking full scale efforts to meet them. All these moves leading to industrial harmony and progress of the company. NTPC-A globally recognized organization for commitment to Quality in works and services. Keeping pace with its ongoing mission of constant, responsible development and continuous progress and growth, the organization strove towards, improvement everyday. Venturing out, innovating, leading on and reaching pinnacles of success. Winning laurel, acclaim and appreciation and above all assuming the role of a market leader in the field of power generation.

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PRODUCT PROFILE

NTPC is engaged in generating power through its different power stations viz. - coal based, gas/liquid fuel based & t ventures. Its total commissioned capacity including the t ventures is 22,249 MW. It is also managing Badarpur Thermal Power Station (705 MW) of Government of India. In total it has 13 coal based, 07 gas/ liquid fuel based & 03 t ventures with Steel Authority of India Limited. The complete station wise list with respective capacity is given below-:

Power Stations Managed by NTPC Category

No. of stations

Capacity(MW)

Coal Based Stations Gas Based Stations t Ventures Total

14 7 4 25

22395 3955 1054 27,404

Uttar Pradesh Andhra Pradesh Chattisgarh West Bengal Madhya Pradesh Uttar Pradesh Bihar Uttar Pradesh

2000 2600 2100 1600 3260 2000 2340 840

ESTABLISHMENT (A) COAL BASED Singrauli Ramgundam Korba Farakka Vidhyanchal Rihand Kahalgaon Dadri

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SALES FIGURES AND MARKET SHARES NTPC has shown a remarkable performance in the areas of operation and maintenance. It once again sured all MoU targets for the year 2002-03 in the Excellent category. Some of the highlights of its excellence are-: 1. Turnover of Rs.19,984.58 crore and Net Profit after tax Rs.3607.57 crore. 2. With 19% of the country’s installed capacity, NTPC contributed 26% of electricity. 3. Generated 140.85 Billion Units (BUs), an increase of 5.76% over previous year’s generation of 133.19 BUs. This is besides the generation of the NTPC SAIL t venture companies. 4. Achieved all MoU targets in the excellent rating during the year 2002-03 for the 16 th consecutive year. 5. Return On Capital Employed (ROCE) and Return On Net Worth (RONW) 10.88% and 12.13% respectively. 6. Total dividend paid for 2002-03 is Rs. 708 crore. 7. 1000 MW capacity added during 2002-03. The fourth 500 MW unit at Talcher-Kaniha has also been synchronized in October, 2003. 8. Capacity addition of over 9370 MW planned for 10 th plan and about 11210 MW for 11th plan. Projects totaling 5300 MW capacity under various stages of construction.

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GM DGM (HR)

SR.MGR. (HR-EDC)

ASTT.OFF. (CSR) A.E. (HR-EDC)

SR.MGR. (HR-ES)

MGR. (HR-ES) MGR. (HR-ES) Schools & G.H.

SR.MGR. (HR-EDC) Exec.&W/M Trg. ED activities

MGR. (Rajbhasha)

SR.MGR. (LAW) Also look after ER functions

DY.MGR. (HR-ES)

SR.MGR. (HR-EB) Also look after welfare functions

DY.MGR. (HR-ER)W.F

OFF. (HR-EB)

MGR. (PR)

SR.OFF. (HR-EB/IE)

DY.MGR. (HR-ER) Dis.Matters ASTT.OFF. (HR-ER&W)

OFF. (HR-EB)

ENGR. (HR-IE)

ASTT.OFF (HR-IE)

ORGANISATION CHART OF HR DEPARTMENT AT BADARPUR THERMAL POWER STATION

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PERFORMANCE APPRAISAL DEFINITION Performance appraisal includes all formal procedures used to evaluate personalities, contributions & potentials of group in a working organization. It is a continuous process to secure information necessary for making correct and objective decisions on employees. In simple words, performance appraisal is the systematic evaluation of the individual with respect to his performance on the job and his potential for development.

PURPOSES OF PERFORMANCE APPRAISAL 1. Promotions 2. Transfers 3. Wage and Salary istration 4. Training and Development 5. Personnel Research 6. Self Improvement

METHODS OF PERFORMANCE APPRAISAL TRADITIONAL METHODS 1. Unstructured Appraisal 2. Employee Ranking 3. Forced Distribution

30 | P a g e 4. Graphic-Rating Scales 5. Check-Lists 6. Critical Incidents 7. Field Review

MODERN METHODS 1. Management by Objectives 2. Behaviorally Anchored Rating Scales

BENEFITS OF PERFORMANCE APPRAISAL EMPLOYER’S PERSPECTIVE 1. Despite imperfect measurement techniques, individual differences in performance can make a difference to the company’s performance. 2. Documentation of performance appraisal and 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.

31 | P a g e 5. Providing 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.

EMPLOYEE’S PERSPECTIVE 1. Performance 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 man’s 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.

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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.

RESEARCH METHODOLOGY OBJECTIVES OF STUDY

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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.

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SCOPE OF STUDY In Badarpur Thermal Power Station, managed by National Thermal Power Corporation Ltd., there is still sufficient scope for improvement in the performance appraisal system below E7 level. 1 .Below this level no weightages are assigned to different attributes which differ according to their importance. 2. Below E6 level “Management By Objectives” is not followed and hence the employees are not clear about their functions based on these objectives. 3. There is no direct link between the rewards and performance of individual employee. 4. Formal is not provided to the employees on regular basis. 5. They are not aware about the parameters on which their performance is measured. 6. There exist communication gap between superiors & their subordinates. All the above mentioned problems need immediate improvement and attention of the management of the company.

RESEARCH PROCEDURE STEPS IN RESEARCH 1. Understanding the nature & scope of business, the organizational & departmental structure. 2. Study the existing review system of the company. 3. To collect information from functional heads about the technicalities involved in performance appraisal viz. KRA’s & suggested weightages. 4. Discussion with senior officers to understand the expectations of the company.

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5. Meetings with employees of different departments to incorporate their views. 6. Prepare questionnaires on the basis of above information. 7. Obtaining the opinions & expectations of employees at different levels of the company. 8. Gather information from different sources like books, magazines, internet etc. about performance appraisal. 9. On the basis of responses from the employees and the information gathered from other sources, prepared the report with mentioning the necessary changes required in the appraisal system.

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 groups formed were-: 1. Executives 2. Supervisors 3. Workman’s

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SAMPLING UNIT The sampling unit was “Badarpur Thermal Power Station”, Badarpur, New Delhi.

SAMPLE SIZE In total 34 employees 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 ed through the statistical process. For the collection of primary data following methods were used-:

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(A) OBSERVATION METHOD In observation method, I observed the behaviour & tone of the employees while giving the answers. But the style of observation was unstructured.

(B) INTERVIEW METHOD I took personal interviews of the employees at different levels to get their opinions & expectations. And the interviews were structured in nature.

(C) 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 3. BAR GRAPHS 4. LINE GRAPHS

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LIMITATIONS OF STUDY 1. Some of the documents of the company were not accessible due to confidentiality. 2. Many employees didn’t have time to give interviews. 3. Some of the employees were not very forthcoming in their responses & reluctant to answer the questionnaire. 4. Responses of few of them were biased due to fear of the management. And some are influenced by the opinions of their colleagues. 5. Night shift employees were unapproachable due to odd timings of their job. 6. Some of the employees were inaccessible as they were absent during the period of survey. 7. The organization was very large, so it was not possible to cover all the departments.

FINDINGS AND ANALYSIS Q1. The present appraisal system, according to you, is an effective one.

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12% 38%

Yes No Can’t say

50%

Q2. Do you feel comfortable with your reporting officer while discussing your KRA’s/ performance?

29% Yes No Can’t say 12%

59%

40 | P a g e Q3. Are you aware of the criteria used for your performance3 appraisal?

Q4. Is this criterion sufficient to judge your performance? 4

6%

47% 38%

24%

47%

Yes No Can’t say

Yes No Can’t say 38%

41 | P a g e Q5. The formal appraisal done by the organization matches your self assessment.

21% Q6. Monetary & non monetary rewards are given to you are based on your performance 24 % appraisal rating. Yes

6% 29%

55%

No Can’t say

Yes No Can’t say

65%

42 | P a g e Q7. The formal and development of new or better job related skills are in accordance with your performance appraisal.

26%

32%

Yes No Can’t say

42% Q8. In case of adverse entry, is it properly and timely communicated to you and do you get sufficient opportunity to appeal to the higher authorities?

44%

21% Yes No Can’t say

35%

43 | P a g e

Q9. Formal appraisal system helps in discovering your true potential for higher responsibilities.

21%

32%

Yes No Can’t say

47%

Q10. Do you think sufficient time has been given to you for discussion and guidance to improve your performance?

9% 38% Yes No 53%

Can’t say

44 | P a g e Q11.The performance appraisal system helps superiors to know their employees in better way.

15% Yes No Can’t say 50%

35%

Q12. Performance appraisal system helps in reducing the communication gap between the superiors and subordinates.

24% 29% Yes No Can’t say 47%

45 | P a g e Q13. Mid-term review (after 6 months) of employee’s performance, below E6 level, instead of annual review is beneficial.

32% Yes No Can’t say 9%

59%

Q14. Introduction of a computerized system will make the performance appraisal system more effective.

32% Yes No Can’t say 9%

59%

FINDINGS AND ANALYSIS

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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 employee’s 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 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.

47 | P a g e 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.

48 | P a g e

CONLUSION AND SUGGESTIONS 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 KRA’s, 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 KRA’s is wastage of time. 6. Weightages should be assigned to different attributes according to their importance. 7. Formal should be provided on regular basis to the employees, so that problems can be prevented in their early stages. It’s 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.

49 | P a g e

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 able 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 should also be assigned to the employee to keep his/her ratings confidential.

50 | P a g e

BIBLIOGRAPHY BOOKS  Human Resource Management - T. N. Chhabra  Human Resource Management - Gary Dessler  Human Resource & Personnel Management - K.Ashwathappa  Research Methodology - C.L.Kothari  Marketing Research - Harper W. Boyd, Ralph Westfall, Stanley F. Stasch

MAGAZINES  Business World  Business Today  Outlook  The Times of India  The Hindu Business Standard Line

WEBSITES  www.ntpcindia.com  www.ntpc.co.in  www.google.com  www.toolpack.com  www.bpubs.com

QUESTIONNAIRE 1 The present appraisal system, according to you, is an effective one.

51 | P a g e YES

NO

CAN’T SAY

2 Do you feel comfortable with your reporting officer while discussing your KRA’s/performance? YES

NO

CAN’T SAY

3 Are you aware of the criteria used for your performance appraisal? YES

NO

CAN’T SAY

4 Is this criterion sufficient to judge your performance? YES

NO

CAN’T SAY

5 The formal appraisal done by the organization matches your self assessment. YES

NO

CAN’T SAY

6 Monetary and non monetary rewards given to you are based on your performance appraisal rating. YES

NO

CAN’T SAY

7 The formal and development of new or better job related skills are in accordance with your performance appraisal. YES

NO

CAN’T SAY

8 In case of adverse entry, is it properly and timely communicated to you and do you get sufficient opportunity to appeal to the higher authorities? YES

NO

CAN’T SAY

9 Formal appraisal systems help in discovering your true potential for higher responsibilities. YES

NO

CAN’T SAY

52 | P a g e 10 Do you think sufficient time has been given to you for discussion and guidance to improve your performance? YES

NO

CAN’T SAY

11 The performance appraisal system helps superiors to know their employees in better way. YES

NO

CAN’T SAY

53 | P a g e 12 Performance appraisal system helps in reducing the communication gap between the superiors and subordinates. YES

NO

CAN’T SAY

13 Mid-term review (after 6 months) of employee’s performance, below E6 level, instead of annual review is beneficial. YES

NO

CAN’T SAY

14 Introduction of a computerized system will make the performance appraisal system more effective. YES

NO

CAN’T SAY

Reasons: 1 2 3 15 Your valuable suggestions to further improve the performance appraisal system. Suggestions: 1 2 3 Category: Supervisor/ executive