PROJECT REPORT

ON

STUDY OF PERFORMANCE
APPRAISAL
AND PERFORMANCE MANAGEMENT
SYSTEM AND ITS EFFECTIVENESS

Submitted For The Partial Fulfillment Towards The Award

of
Master Of Business Administration
Degree
(2008-2009)

Submitted by
Shruti Saxena
Roll No.0803270042

Department of Management
ACADEMY OF BUSINESS & ENGINEERING SCIENCES,
GHAZIABAD

AFFILIATED TO
UTTAR PRADESH TECHNICAL UNIVERSITY, LUCKNOW

1
 PROJECT REPORT
ON

STUDY OF PERFORMANCE
APPRAISAL
AND PERFORMANCE MANAGEMENT
SYSTEM AND ITS EFFECTIVENESS
AT

NTPC LIMITED
(A Government Of India Enterprise)

POWER MANAGEMENT INSTITUTE

Plot No. 5-14, Sector-16A,
NOIDA-201301 (U.P.)

2
 DECLARATION

I, Shruti Saxena, student of final year, MBA, ACADEMY OF BUSINESS AND

ENGINEERING STUDIES, hereby declare that this dissertation entitled “Study of
Performance Appraisal and Performance Management System & its effectiveness”
in Power Management Institute, NTPC NOIDA is based on my original research work
and has not been submitted for the award of any other degree, diploma or fellowship and
has not been published in any journal or magazine.

All the persons who helped me during and in the preparation of this report are duly
acknowledged. The results that are published here are purely for academic purpose only.

SHRUTI SAXENA
M.B.A. III Sem.

3
 ACKNOWLEDGEMENT

I would like to express my deep and sincere gratitude to NTPC, POWER

MANAGEMENT INSTITUTE, NOIDA for having provided me with the opportunity
to do my project on an interesting area.

The project was a great source of learning and a good experience as it made me aware of
the professional culture and conduct that exists in an organization.

Though at the onset of ambitious project one always encounters certain difficulties in the
beginning, however, overcoming these difficulties of the project as well as making it a
success, greatly depends on the encouragement, inspiration, and help given by Mr.
Yudhvir Singh(), Mr. A. Chatterjee and other employees of NTPC, PMI. For
completion of this project various people have put lots of efforts.

I would like to thank my H.O.D. Sir and all other professors of ABES School of
Management, Ghaziabad for their invaluable guidance, immense support and help.

I will also like to thank other management trainees of my group for their
cooperative attitude and queries which made me understand the different topics of
HR quickly.

And finally I would like to thank god & my parents who inspired a lot for the completion
of the project.

SHRUTI SAXENA

4
 PREFACE

The Summer Training Report Is an Integral Part of the Master of Business

Administration Curriculum of Department of Management, ACADEMY OF BUSINESS
& ENGINEERING SCIENCES, GHAZIABAD affiliated to UTTAR PRADESH
TECHNICAL UNIVERSITY, LUCKNOW.

During the course of training, the researcher is expected to use and apply his academic
knowledge and gain a valuable insight to know the employees and organization behavior.

During the course of my training, I did a comprehensive study of performance appraisal

system and its management towards the effectiveness of the organization. I have
undertaken the training on the same at POWER MANAGEMENT INSTITUTE,
NTPC NOIDA to study the Power Appraisal and Power Management System in this
company regarding Worker/employees satisfaction and awareness. As result of that I
come out with the project titled, “STUDY OF PERFORMANCE APPRAISAL AND
PERFORMANCE MANAGEMENT SYSTEM AND ITS EFFECTIVENESS” in
the organization.

In this report I have put my lines effort to compile the data with utmost accuracy and give
the views to the best of my judgment.

5
 EXECUTIVE SUMMARY

This is an attempt to present a progressive detailed discussion on the PERFORMANCE

MANAGEMENT SYSTEM OF NTPC, PMI. Performance management system is a
method through which total evaluation of an employee’s performance throughout the
year undertaken by his/her superior wherefrom the junior get to know his/her own
standing in the organization. This system is a very important aspect, which gives the true
picture of the company’s driving in a particular year. I have, over here, tried to make
almost a research work on the company’s PMS and fought out my utmost level to bring
the best in my training.

The study comprises of the first textual connotation of the performance appraisal system,
in general, then continued with a detailed study on PMS system of NTPC.
But to go into further details of the topic, I had built a questionnaire for employees
working in the organization based on the PMS forms. In these questionnaires, I have tried
to understand the general psyche of the people regarding the PMS system operating in the
organization.

After observing the results, I interpreted into a conclusion, which further directed me to
find out the loopholes and backlogs. Accordingly, with the meager knowledge and some
kind of intelligence that I carry, I have tried to give necessary suggestions to the
corporate body as to how to overcome its weakness in this system and build up their
strengths. No matter, how ordinary they might be, according to me, they were the actual
recommendations that I could suggest to NTPC.

6
 OBJECTIVES OF THE REPORT

The objectives of taking this project are –

 To understand performance appraisal techniques at NTPC.

 To compare the past system for performance appraisal with the new performance
management system in order to identify the drawback that are overcome by the
new system of performance that is PMS(performance management system)

 To find out the satisfaction level of the employees and areas in which they are
not comfortable with the PMS and does not find it to be effective.

 To find out to what extant the employees find is method effective in appraising
there performance.

 Is there any improvement in their performance after the appraisal?

 To study the effectiveness of the new Performance Management System (PMS)

7
 TABLE OF CONTENTS

TITLE PAGE NO.

1) COMPANY PROFILE 09-50

 An Overview
 Vision and Mission
 Core Values
 Corporate Objectives
 More About NTPC
 Power Management Institute
 Awards and Accolades

2) INTRODUCTION TO PERFORMANCE APPRAISAL 51- 80

 Introduction
 Objectives of Performance Appraisal
 Process of Performance Appraisal
 Purpose of Performance Appraisal
 Managerial Ethics in Performance Appraisal
 Performance Appraisal Methods
 Sample Forms Of Performance Appraisal System
 Rating Errors in Performance Appraisal

3) PERFORMANCE APPRAISAL SYSTEM IN NTPC 81-89

 Performance Management System

4) RESEARCH DESIGN 90-94

 Research Methodology
 Data and Data Collection
 Limitations Of Study

5) DATA ANALYSIS AND DATA INTERPRETATION 95-115

 Questionnaires
 Facts and Findings
 Problems Faced
 Suggestions
 Recommendations
 Conclusion and Summary

6) BIBLIOGRAPHY 116

8
9
 THE COMPANY

NTPC Limited is the largest thermal power generating company of India. A public
sector company, it was incorporated in the year 1975 to accelerate power development in
the country as a wholly owned company of the Government of India. At present,
Government of India holds 89.5% of the total equity shares of the company and the
balance 10.5% is held by FIIs, Domestic Banks, Public and Others.

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 terms of thermal power
generation and the second most efficient in terms of capacity utilizations amongst the
thermal utilities in the world.

10
 NTPC: AN OVERVIEW

Established in 1975, NTPC, the largest power company of the country has been
consistently powering the growth of India. With an installed capacity of 30,644 Mega
Watt (MW), NTPC today contributes 27.08% of the nation’s power generation with only
20.06% of India’s total installed capacity.

NTPC has embarked on plans to become a 75,000 MW company by 2017.

An ISO 9001: 2000 certified company; it is world’s 6 th largest Thermal Power Generator
and 2nd most efficient in capacity utilization.
The corporation recorded a generation of 159.11 Billion Units in 2004-05, through 13
coal based, 7 gas based power plants, and Joint Ventures Projects spread all over the
country.

Driven by its vision to lead, it has charted out an ambitious growth plan of becoming a
75,000 MW plus company by 2017.

NTPC has been rated as one of the top most “Best Employer” of the country for the year
2003, 2004 and 2005 in a row.

It has also been rated as one of the “Best Companies to Work for in India” by Mercer HR
Consulting- Business Today Survey 2004, it has developed into a multi - location and
multi- Fuel Company over the past three decades.

These achievements have been made possible by the 23500 strong and motivated work
forces that with their dedication are ever willing to take NTPC to greater heights
NTPC was among the first Public Sector Enterprises to enter into a Memorandum of
Understanding (MOU) with the Government in 1987-88. Since then, every year, NTPC
has been placed under the 'Excellent category' (the best category). In recognition of its
excellent performance and tremendous potential NTPC has been given the status of
"Navratna" by the Government of India.

11
 CORPORATE PROFILE:

National Thermal Power Corporation Limited

NTPC VISION

"A world class integrated power major, powering India’s growth, with
increasing global presence."

NTPC MISSION

“Develop and provide reliable power, related products and services at

competitive prices, integrating multiple energy sources with innovative and
eco-friendly technologies and contribute to society.”

• Make available reliable and quality power in increasingly large quantities at

appropriate tariffs and ensure timely realization of revenues.
• Speedily plan and implement power projects, with the contemporary technologies.
• Implement strategic diversification in the areas of R&M, Hydro, LNG and non-
conventional and eco-friendly fuels and explore new areas like transmission on IT
etc.
• Promote consultancy and make prudent acquisitions.
• Continuously develop competent HR to match world standards.
• Be a responsible corporate citizen, with thrust on environment protection
rehabilitation and ash utilization.

HR VISION

"To enable our people to be a family of committed world class

professionals, making NTPC a learning organization"

CORE VALUES (COMIT)

• Customer Focus
• Organizational Pride
• Mutual Trust and Respect
• Initiative and Speed
• Total Quality

12
 COMIT

Customer Focus:
1. Has conviction that the customer is the centre of all activity and attention.
2. Is courteous, sincere, patient and sensitive to the customers.
3. Honors commitment on time.
Organizational Pride:
1. Holds the company in high esteem.
2. Rejoices in belonging to it.
3. Demonstrate loyalty and commitment to the organization.
4. Has a sense of ownership and belongingness with it.

Mutual Respect and Trust:

1. Has high regard for and faith in the fellow organizational members.
2. Believes in collaboration and openness.
3. Has good team spirit.

Initiative and speed:

1. Believes in taking the first step.
2. Thinking new and ahead.
3. Being swift with our compromising on quality.
4. Is creative and innovative.
5. Has the willingness to experiment and take risks.

Total Quality:
1. Believes in pursuing excellence in all spheres of activity.
2. Makes continues efforts in improving standards of performance, systems and
processes.

CORPORATE OBJECTIVE

1. Growth:
• To add generating capacity within prescribed time and cost.
• To expand consultancy operation and to participate in ventures abroad.
• To diversify into hydro and non-conventional energy sources for power
generation.
• To diversify into power related business to ensure integrated development
of energy sector in India.
• To achieve continuous performance improvement in the areas of project
implementation, plant operation and maintenance, generation efficiency

13
etc and to acquire and sustain internationally comparable standards in
these areas with good business ethic and values.

14
2. Human Resource Development:
• To develop learning organization having knowledge based competitive
edge.
• To create a culture of team building, empowerment and accountability
to convert knowledge into productive action with speed, creativity and
flexibility.
3. Financial Soundness:
• To maintain and improve the financial soundness of NTPC Ltd by
managing the financial resources in accordance with the best commercial
utility practices.
• To develop appropriate commercial policies which ensure remunerative
tariffs and minimum receivables?

2. Technology Leadership:
• To acquire, assimilate and adopt reliable, efficient and cost effective
technologies and to disseminate knowledge to other constituents of the
power sector in the country.
3. Sustainable Power Development:
• To contribute to sustainable development by functioning as a responsible
corporate citizen and discharge social responsibilities in the areas of
environment protection and rehabilitation.
• The corporation will strive to utilize the ash produced as its stations to the
maximum extent possible.
4. Research Development:
• To carry out Research and Development for efficient and reliable
operation of power plants in the country.

NTPC’S GROWTH CHART

15
 NTPC's core business is engineering, construction and operation of power generating
plants and also providing consultancy to power utilities in India and abroad. As on
date the installed capacity of NTPC is 30,644 MW through its 14 coal based, 7 gas
based and 3 Joint Venture Projects. 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 (120MW) and Bhilai (74 MW).

SUBSIDIARIES OF NTPC

NTPC Electric Supply Company Ltd (NESCL): NESCL is a wholly owned

subsidiary of NTPC. It was incorporated in August 2002 with the objective to
acquire, establish & operate Electricity Distribution Network in various circles/cities
across India. The company provides consultancy in the area of: Turnkey execution,
Project monitoring, Quality Assurance and Inspection, and Third Party Quality
inspection on the behalf of utility.

NTPC Vidyut Vyapar Nigam Ltd. (NVVN): It was formed to cater to and deal with
the vast potential of power trading in the country and optimum capacity utilization.

NTPC Hydro Limited (NHL): It was set up in December, 2002 to develop small
and medium sized Hydro Electric Power Projects of up to 250 MW capacities.

MAJOR ACHIEVEMENTS OF NTPC

• Largest thermal power generating company of India.

• Sixth largest thermal power generator in the world.
• Second most efficient utility in terms of capacity utilization.
• One of the nine PSUs to be awarded the status of Navratna.
• Provides power at the cheapest average tariff in the country.

PRODUCTS AND SERVICES OF NTPC

Power generation is the main activity of NTPC which has an installed capacity of 27,850
MW shared by 22 generating stations. Four generating stations in joint venture have an
additional capacity of 2044 MW. Consultancy in fields of water supply and treatment,
fossil fuel based thermal power stations, environment engineering, and cogeneration
plants. Consultancy service has got NTPC over 435 domestic and international orders.

Power Management Institute in Noida provides classroom training in power plant

operations and management. Full Scope Replica Training Simulator for coal and gas
based power plants makes training meaningful and effective. Students from outside
NTPC can also undergo these training schedules.

16
 NTPC LIMITED - FINANCIAL AND STRATEGIC ANALYSIS REVIEW

NTPC Limited (NTPC) is an independent power company. The company is engaged in

the development, engineering, construction and operation of power generating plants.
NTPC sells electricity to bulk consumers, principally electricity utilities companies or
entities owned by States Government. Further, it is also engaged in providing consultancy
services for power plant construction and power generation to companies in domestics as
well as international. NTPC is the largest thermal power generating company in India as
well as stand sixth in world. In 2008, the company's gross generation was 2,00,863
million units of electricity.

India’s largest power company, NTPC was set up to accelerate power development in
India. NTPC is emerging as a diversified power major with presence in the entire value
chain of the power generation business. Apart from power generation, which is the
mainstay of the company, NTPC has already ventured into consultancy, power trading,
ash utilization and coal mining. NTPC ranked 317th in the ‘2009, Forbes Global 2000’
ranking of the World’s biggest companies.

This power generation company established in 1975 aims at becoming an integrated

power commanding height with total power value chain.

The total installed capacity of the company is 30, 644 MW (including JVs) with 15 coal
based and 7 gas based stations, located across the country. In addition under JVs, 3
stations are coal based & another station uses naphtha/LNG as fuel. By 2017, the power
generation portfolio is expected to have a diversified fuel mix with coal based capacity of
around 53000 MW, 10000 MW through gas, 9000 MW through Hydro generation, about
2000 MW from nuclear sources and around 1000 MW from Renewable Energy Sources
(RES). NTPC has adopted a multi-pronged growth strategy which includes capacity
addition through green field projects, expansion of existing stations, joint ventures,
subsidiaries and takeover of stations.

NTPC's coal based power stations are at:

Singrauli (Uttar Pradesh), Korba (Chattisgarh), Ramagundam (Andhra Pradesh), Farakka
(West Bengal), Vindhyachal (Madhya Pradesh), Rihand (Uttar Pradesh), Kahalgaon
(Bihar), NTCPP (Uttar Pradesh), Talcher (Orissa), Unchahar (Uttar Pradesh), Simhadri
(Andhra Pradesh), Tanda (Uttar Pradesh), Badarpur (Delhi), and Sipat (Chattisgarh).

NTPC's Gas/Liquid based power stations are located at:

Anta (Rajasthan), Auraiya (Uttar Pradesh), Kawas (Gujarat), Dadri (Uttar Pradesh),
Jhanor-Gandhar (Gujarat), Rajiv Gandhi CCPP Kayamkulam (Kerala), and Faridabad
(Haryana).

NTPC's Power Plants with Joint Ventures are located at:

Durgapur (West Bengal), Rourkela (Orissa), Bhilai (Chhattisgarh), and RGPPL
(Maharastra).
NTPC has been operating its plants at high efficiency levels. Although the company has

17
18.79% of the total national capacity it contributes 28.60% of total power generation due
to its focus on high efficiency.

In October 2004, NTPC launched its Initial Public Offering (IPO) consisting of 5.25% as
fresh issue and 5.25% as offer for sale by Government of India. NTPC thus became a
listed company in November 2004 with the government holding 89.5% of the equity
share capital. The rest is held by Institutional Investors and the Public. The issue was a
resounding success. NTPC is among the largest five companies in India in terms of
market capitalisation.

18
At NTPC people before Plant Load Factor is the mantra that guides all HR related
policies. NTPC has been awarded No.1, Best Workplace in India among large
organizations for the year 2008, by the Great Places to Work Institute, India Chapter in
collaboration with The Economic Times.
The concept of Corporate Social Responsibility is deeply ingrained in NTPC's culture.
Through its expansive CSR initiatives NTPC strives to develop mutual trust with the
communities that surround its power stations.
Right from social to developmental work of the community and welfare based
dependence to creating greater self reliance; the constant endeavor is to institutionalise
social responsibility on various levels.

NTPC’S EMPLOYER SURVEY

NTPC has been ranked fifth among the top ten "Best companies to work for in India" by
Mercer HR Consulting-Business Today Survey 2005. This is the third consecutive year
that NTPC has appeared in this prestigious list. Besides, NTPC is also the only PSU
among the top ten companies. The survey was conducted on the basis of four attributes
such as HR Metrics, HR Processes and policy, Internal Employee Perception & Stake
holder Perception on a weighted scale to arrive at a total score for each company
surveyed.

NTPC has also been ranked as "3rd Great Place to Work" for in India again according to
the survey conducted by Grow Talent and Business World 2005. What makes NTPC
stand apart is its ability to balance concern for its employees with a high performance
work culture. All NTPC employees have a Projects Manager’s obsession with
deliverables and deadline.

19
MAJOR POWER STATIONS OF NTPC

20
NTPC POWER LOCATION STATIONS

21
 NTPC - GROWTH PLANS

The liberalization process initiated in the year 1991 and the new power policy announced
by the Government in October 1991 have redrawn the contours of power industry in the
country. Participation of the private sector in the hitherto exclusive domain of the
Government in power generation, transmission and distribution is bringing in
fundamental changes in the sector.

Thus the terminal year of this Plan, year 2012,will witness a very different scenario with
patterns of ownership of assets significantly altered, and the norms of project
implementation, plant availability & reliability, operations etc. changed to match
international standards. The emerging competition form Independent Power Producers
(IPPs), stringent environmental regulations, uncertainties in fuel linkages, funds
constraints, restraints, restructuring of reforms in the power sector are all crucial and
interrelated factors having major impact on business decisions.
These fundamental changes have necessitated a fresh look at how we do our business and
what it is that we must do to achieve our vision:

"To be one of the world's largest and best power utilities, powering India's growth".

To realize this vision, NTPC has drawn up a detailed Corporate Plan for the period 1997-
2012 which represents the company's collective optimism and enthusiasm, inspired by a
glorious past, a vibrant present and a brilliant future. The Plan has been prepared in-house
in consultation the committed, competent and confident members of the NTPC family.
The road map that has been charted out was after a thorough scan of the strengths and
weaknesses within the organization as well as opportunities and threats in the
environment.

Considering multidimensional opportunities in the energy sector, NTPC will adopt a

multi-pronged growth strategy for capacity addition through greenfield sites, expansion
of existing stations, takeovers and joint ventures.

The capacity addition plans that we have drawn up for the fifteen-year period using all
the above strategies to enable the corporation to become a 75,000 MW company by 2017.

22
In addition to the above, NTPC also has plans to venture into the following areas:

Renovation & Modernization of old power stations through a separate joint venture
company that are –

• Investment in LNG terminal;

• Investment in coal mining and washeries;
• Setting up of power plants abroad;
• Joint ventures for ash-based industries;
• Setting up of small pilot plants using renewable energy sources;
• Setting up of hydel power plants to facilitate techno-economic operation of
thermal-hydro mix of NTPC stations;
• Setting up of associated extra high voltage transmission lines / inter-regional EHV
transmission lines so as to ensure evacuation of power from NTPC stations.

23
 NTPC – NEW PROJECTS

The company has formulated a long term Corporate Plan for 15 years upto 2012. The
Corporate Plan seeks to integrate the Company's vision, mission and strategies for growth
with the national plans and to provide the company the cutting edge in the emerging
competitive environment. NTPC is targeting to become a '40000 MW Plus' company by
2012.

PROJECTS UNDER CONSTRUCTION TOTAL CAPACITY - 10990 MW

Project Capacity
Fuel Commission Schedule
(State) (MW)
Ramagundam - III
(Andhra Pradesh) 500 Coal Unit - VII Aug 2005

Rihand - II 1000 Unit - III Aug 2005

Coal
(Uttar Pradesh) (2x500) Unit - IV May 2006
Vindhayachal - III 1000 Unit - IX Feb 2007
Coal
(Madhya Pradesh) (2x500) Unit - X Aug 2007
Kahalgaon Phase II 1000 Unit - V Nov 2006
Coal
Stage I (Bihar) (2x500) Unit - VI May 2007
Kahalgaon Phase II 500
Coal Unit - VII Nov 2008
Stage II (Bihar) (1x500)
Unit - I Apr 2008
1995
Sipat - I Coal Unit - II Feb 2009
(3x665)
Unit - III Dec 2009
1000 Unit - I Jun 2007
Sipat - II Coal
(2x500) Unit - II Dec 2007
Unchahar III 210
Coal Unit - I Sep 2006
(Uttar Pradesh) (1x210)
Unit - I Nov 2008
Koldam 800 Unit - II Jan 2009
Hydro
(Himachal Pradesh) (2x400) Unit - III Mar 2009
Unit - IV Apr 2009
Unit - III 500 MW Jan 2003*
Talcher -II
2000 Unit - IV 500 MW Oct 2003*
(Orissa) Coal
(4x500) Unit - V 500 MW May 2004
Unit - VI 500 MW Feb 2006
Total 10,005 *Already commissioned

24
 MW

NEW PROJECTS BEING PURSUED FOR CAPACITY ADDITION

FOR TENTH PLAN AND BEYOND

In addition to the above, a host of new power projects as given below are being pursued
for further capacity addition in the 10th plan and beyond:

S. No. Project/ State Capacity (MW)

1. Bhilai CPP-II Expansion-JV with SAIL 500
2. Nabinagar-JV with Railways 1,000
3. Barh/ Bihar 1,980
4. North Karanpura/ Jharkhand 1,980
5. Kawas-II/ Gujarat 1,300
6. Gandhar-II/ Gujarat 1,300
7. Loharinag Pala/ Uttaranchal 600
8. Tapoban Vishnugad/ -do- 520
9. Lata Tapovan/ Uttaranchal – to be implemented by 108
NTPC Hydro Ltd, a wholly owned subsidiary of NTPC
10. Kayamkulam – II/ Kerala 1,950
11. Ennore – JV with TNEB 1,000

25
 NTPC JOINT VENTURES

NTPC, with a rich experience of engineering, constructing and

operating nearly 20,000 MW of thermal generating capacity, is the
largest and one of the most efficient power companies in India,
having operations that match the global standards.

NTPC has identified Joint Ventures, strategic alliances as well as

acquisitions and diversifications as viable and desired options for its business
development.

NTPC looks for opportunity to create such joint ventures and strategic alliances, in the
entire value chain of the power business. NTPC as a partner endows the Joint Venture
Alliances with a winning edge. Acquisitions and Diversifications in the areas related to
the core business not only ensure growth but also add to the robustness of the company.

The following joint venture companies have been formed so far:

• NTPC - ALSTOM POWER SERVICES PVT. LTD. (NASL)

(Incorporated in 1999 and formerly known as NTPC-ABB ALSTOM POWER
SERVICES PVT. LTD)
PROMOTERS'EQUITY: NTPC: 50%
ALSTOM Power Generation AG: 50%

• UTILITY POWER TECH LTD

(Incorporated in 1996)
This JV has been promoted with BSES Limited, a private sector Indian Power
Company.
PROMOTERS' EQUITY: NTPC: 50%
BSES: 50%

• POWER TRADING CORPORATION

(Incorporated in 1998)
This JV has been promoted with Power Grid Corporation of India Ltd (PGCIL), a
Government owned transmission major in India. Power Finance Corporation
(PFC), a power sector finance company owned by the Government of India and
National Hydro Electric Power Corporation Ltd. (NHPC), a Government owned
hydropower utility.
PROMOTERS' EQUITY: NTPC:8% , Tata Power:10%
PGCIL:8%, DV:10%
PFC:8% , FII:18.5%

26
 NHPC:8%
*Balance 29.5% unallocated.

• NTPC-SAIL POWER COMPANY (PVT) LTD (NSPCL)

This JV has been formed on 23rd March, 2001 with Steel Authority of India Ltd
(SAIL), a Government of India undertaking engaged in the steel manufacturing
business and owns four large integrated steel plants in the country
PROMOTERS' EQUITY: NTPC: 50%, SAIL: 50%

• BHILAI ELECTRIC SUPPLY COMPANY LTD (BESCL)

This JV has been formed on 22nd March 2002 with Steel Authority of India
Limited (SAIL), a Government of India undertaking engaged in the steel
manufacturing business.
PROMOTERS' EQUITY: NTPC: 50%, SAIL: 50%

SOCIAL RESPONSIBILITY

NTPC fulfilled the social responsibility by taking initiative for

protecting the environment in the following ways –
Harmony between man and environment is the essence of healthy
life and growth. Therefore, maintenance of ecological balance and
a pristine environment has been of utmost importance to NTPC.

Environment protection continues to be a key area of activity in NTPC along with growth
in generation of power.

Driven by its commitment for sustainable growth of power, NTPC has evolved a well
defined environment management policy for minimizing environmental impact arising
out of setting up of power plants and preserving the natural ecology.
In November 1995, NTPC became the first public utility to bring out a comprehensive
document entitled "NTPC Environment Policy and Environment Management System".
Amongst the guiding principles, adopted in the document, are the company's proactive
approach to environment, optimum utilization of equipment, adoption of latest
technologies and continual environment improvement. The policy also envisages efficient
utilization of resources, thereby minimizing waste, maximizing ash utilization and
providing green belt all around the plant for maintaining ecological balance.
NTPC's environment-friendly approach to power has already begun to show results in
conservation of natural resources such as water and fuel (coal, oil & gas) as well as
control of environmental pollution. NTPC has chalked out a set of well-defined activities
that are envisaged right from the project conceptualization stage.

27
Performance enhancement and upgradation measures are undertaken by the organization
during the post-operational stage of the stations. These activities have greatly helped to
minimize the impact on environment and preserve the ecology in and around its power
projects. These measures have been enumerated as follows.

Environment Management System / ISO-14001 -

NTPC has established Environmental Management System (EMS) as per ISO-14001 at
its different establishments. As a result of pursuing sound environment management
practices, all NTPC power stations (excluding Simhadri which was commissioned
recently) as well as the Corporate Environment Management and Ash Utilization
Division have already been certified for ISO-14001 EMS by reputed Certifying Agencies.
The only remaining station Simhadri is also in the process of obtaining the ISO-14001
Certification.

Environment Policy –
The salient features of NTPC's Environment Policy and Environment Management
System as adopted in November 1995 are enumerated below.

• To achieve and maintain a leader's role in the area of Environment Management

in the Power Sector in the country.
• To keep in view the various environmental requirements in all its business
decisions.
• To continuously adopt ways and means for Environment Protection and
Environment Improvement around its business units.
• To adopt sound Environment Management practices.
• To aim at full compliance with the statutory norms / requirements.

In addition, we have specific environmental policies at our Environment management and

Ash Utilization Division at Corporate Centre and at each station as a part of EMS as per
ISO-14001. The Environment Policy of the Corporate Environment Management and
Ash Utilization Division as adopted in March 2003 under the EMS is stated below.

• Continual improvement of environmental performance of all NTPC power

stations in pursuance of our vision of powering India’s growth.
• Continually monitor all the stations for pollution prevention and environmental
protection.
• Conservation of natural resources including land by utilizing more and more ash
generated by thermal power stations of NTPC.
• Assist stations for compliance with relevant environmental legislations and
regulations.
• To promote environmental awareness amongst the employees of NTPC.
• To create awareness of Ash Utilization and its environmental benefits among the
Engineers, Builders, Architects, Potential Entrepreneurs, NTPC personnel and public
at large.

28
Environmental Institutional Set-up –
Realizing the importance of protection of the environment with speedy development of
the power sector, the company has constituted different groups at project, regional and
corporate centre level to carry out specific environment related functions. The
Environment Management Group, Ash Utilization Division and Centre for Power
Efficiency & Environment Protection (CENPEEP) function from the Corporate Centre
and initiate measures to mitigate the impact of power project implementation on the
environment and preserve ecology in the vicinity of the projects. Environment
Management and Ash Utilization Groups established at each station, look after various
environmental issues of the individual station.

Environment Impact Assessment –

One of the environment conscious corporate citizens and have ensured that our efforts
towards improving the environment match with our developmental efforts in the power
sector. NTPC has been conducting Environment Impact Assessment (EIA) studies of the
areas in the vicinity of our projects that form the basis of our efforts to protect and
maintain our environment. These studies extend to around one year period, in its various
power projects. This consists of literature search, field studies and impact assessment in
the area of the land use, water use, socio-economic aspects, soil, hydrology, water
quality, meteorology, air quality, terrestrial and aquatic ecology and noise.

The EIA involves stage-by-stage evaluation of various parameters that affect the
environment. Based on EIA study, wherever required, specific scientific studies are also
conducted to scientifically assess the likely impact of the pollutants on the sensitive flora
and fauna in the surroundings, as also, to take preventive and mitigatory measures,
wherever required.
A detailed post-operational regional integrated EIA study was also conducted by NTPC
through M/s EdF, France for the Singrauli Area during the year 1989-90.

Ecological Monitoring-
NTPC has undertaken a comprehensive Ecological Monitoring Programme through
Satellite Imagery Studies covering an area of about 25 Kms radius around some of its
major plants. The studies have been conducted through National Remote Sensing Agency
(NRSA), Hyderabad at its power stations at Ramagundam (AP), Farakka, (WB), Korba
(Chhatisgarh), Vindhyachal (MP), Rihand (UP).

These studies have revealed significant environmental gains in the vicinity areas as a
result of pursuing sound environment management practices. Some of these important
gains that have been noticed are increase in dense forest area, increase in agriculture area,
increase in average rainfall, decrease in waste land etc.
Such studies conducted from time to time around a power project have established the
environment status at various post operational stages .In general, the studies, as such,
have revealed that there is no significant adverse impact on the ecology due to the project
activities in any of these stations. Such studies conducted from time to time around a
power project have established the environment status at various post operational stages
of the project.

29
Resource Conservation –With better awareness and appreciation towards ecology and
environment, thermal power utilities have been continually looking for innovative and
cost effective solutions to conserve natural resources and reduce wastes. Some of the
measures include:
• Reduction in land requirements for main plant and ash disposal areas in newer
units.
• Capacity addition in old plants, within existing land.
• Reduction in water requirement for main plant and ash disposal areas through
recycle and reuse of water.
• Reduction in fuel requirement through more efficient combustion and adoption of
state-of-the-art technologies such as super critical boilers.

Pollution Control Systems –

While deciding the appropriate technology for its projects, NTPC integrates many
environmental provisions into the plant design. In order to keep emission, effluents and
ambient air quality well within acceptable limits, NTPC has provided the best available
equipments, devices and systems such as high efficiency Electrostatic Precipitators
(ESPs), Tall Stacks and Low NOx Burners for control of stack emissions, Dust
Extraction and Dust Suppression Systems for control of fugitive dust, Effluent Treatment
Plants, Neutralisation Pits and Ash Ponds for control of the effluent quality, Ash Water
Re-circulation System and Cooling Towers for control of the effluent quality as well as
conservation of water and Sewage Treatment Plant (STP) for treatment of the domestic
sewage from its plant and township areas.

Monitoring of Environmental Parameters –

A broad based Environment Monitoring Programme has been formulated and
implemented in NTPC. All pollutants discharged from the power plant through stack
emission, ash pond effluent, main plant effluent, domestic effluent and Condenser
Cooling Water (CCW) effluent are monitored at the stipulated frequency at the source
itself and at the points of discharge. In addition to the above, ambient air, surface water
and ground water quality in and around NTPC plants are regularly monitored to assess
any adverse impacts as a result of operation of the power plant.

Environmental Reviews –
To maintain constant vigil on environmental compliance, Environmental Reviews are
carried out at all operating stations and remedial measures have been taken wherever
necessary. As a feedback and follow-up of these Environmental Reviews, a number of
retrofit and up gradation measures have been undertaken at different stations
Such periodic Environmental Reviews and extensive monitoring of the facilities carried
out at all stations have helped in compliance with the environmental norms and timely
renewal of the Air and Water Consents.

On-Line Data Base Management –

In order to have better control on pollution and to achieve effective environment
management in and around NTPC stations, it is imperative to have an on-line, reliable

30
and efficient environment information system on the plant operational and environmental
performance parameters at all three levels i.e. generating Stations, Regional Headquarters
and Corporate Centre. In consideration of the above, a computerized Programme, namely
"Paryavaran Monitoring System" - PMS, which could provide reliable storage, prompt
and accurate flow of information on environmental performance of Stations was
developed and installed in NTPC. This software facilitates direct transfer of environment
reports and other environment related information from stations to the Regional
Headquarters and Corporate Centre. The PMS has already been implemented at
Corporate Centre, four Regional Headquarters and most of the Stations.

This system will help in achieving continuous improvement in NTPC's environment

performance through improved monitoring and reporting system by using the trend
analysis and advanced data management techniques.

Liquid Waste Management System –

The objective of industrial liquid effluent treatment plant (ETP) is to discharge lesser and
cleaner effluent from the power plants to meet environmental regulations. After primary
treatment at the source of their generation, the effluents are sent to the ETP for further
treatment. The composite liquid effluent treatment plant has been designed to treat all
liquid effluents which originate within the power station e.g. Water Treatment Plant
(WTP), Condensate Polishing Unit (CPU) effluent, Coal Handling Plant (CHP) effluent,
floor washings, service water drains etc. The scheme involves collection of various
effluents and their appropriate treatment centrally and re-circulation of the treated
effluent for various plant uses.
NTPC has implemented such systems in a number of its power stations such as Singrauli,
Vindhyachal, Korba, Farakka and Kahalgaon. These plants have helped to control quality
and quantity of the effluents discharged from the stations.

Advanced / Eco-friendly Technologies –

NTPC has gained expertise in operation and management of 200 MW and 500MW Units
installed at different Stations all over the country and is looking ahead for higher capacity
Unit sizes with super critical steam parameters for higher efficiencies and for associated
environmental gains. At Sipat (Chattisgarh), higher capacity Units of size of 660 MW
and advanced Steam Generators employing super critical steam parameters have already
been envisaged as a green field project.
Higher efficiency Combined Cycle Gas Power Plants are already under operation at all
gas-based power projects in NTPC. Advanced clean coal technologies such as Integrated
Gasification Combined Cycle (IGCC) have higher efficiencies of the order of 45% as
compared to about 38% for conventional plants. NTPC has initiated a techno-economic
study under USDOE / USAID for setting up a commercial scale demonstration power
plant by using IGCC technology. These plants can use low-grade coals and have higher
efficiency as compared to conventional plants.
With the massive expansion of power generation, there is also growing awareness among
all concerned to keep the pollution under control and preserve the health and quality of
the natural environment in the vicinity of the power stations. NTPC is committed to
provide affordable and sustainable power in increasingly larger quantity. NTPC is

31
conscious of its role in the national endeavour of mitigating energy poverty, heralding
economic prosperity and thereby contributing towards India's emergence as a major
global economy.
CLIENTS

Public/private sector
1 ABB LTD. 12 NEPAL ELECTRICITY AUTHORITY.
2 DAMODAR VALLEY
13 NEYVELI LIGNITE CORPN. LTD.
CORPORATION LTD .
NUCLEAR POWER CORPORATION
3 BSES LTD. 14
LTD.
POWER FINANCE CORPORATION
4 ESSAR POWER LTD. 15
LTD.
5 G V K INDUSTRIES LTD. 16 POWER GEN INDIA (PVT.) LTD.
6 GRASIM INDUSTRIES LTD. 17 SIEMENS LTD.
GUJARAT TORRENT ENERGY
7 18 TATA ELECTRIC COMPANIES.
CORPORATION LTD.
INDOGULF FERTILIZER & CHEM. POWER GRID CORPN. OF INDIA
8 19
LTD. LTD.
GUJARAT INDUSTRIES POWER CO.
9 20 RELIANCE INDIA LTD.
LTD.
KARNATAKA POWER THE AHMEDABAD ELECTRICITY
10 21
CORPORATION LTD. CO.
11 LARSEN & TOUBRO LTD.

State Power Utilities

1 A P POWER GEN. CORPN. LTD. 9 KARNATAKA ELECT. BOARD
2 A P POWER TRANSMISSION 10
M P STATE ELECT. BOARD
CORPORATION LTD.
3 CENTRAL ELECTRICITY 11 MAHARASHTRA STATE ELECT.
AUTHORITY BOARD
4 DELHI VIDYUT BOARD. 12 PUNJAB STATE ELECT. BOARD
5 ORISSA POWER GEN. CORPN. LTD. 13 RAJASTHAN STATE ELECT. BOARD

6 GRIDCO. ORISSA 14 TAMILNADU ELECT. BOARD

7 15 WEST BENGAL STATE ELEC.
GUJARAT ELECTRICITY BOARD
BOARD

32
8 HARYANA VIDYUT PRASARAN
NIGAM
POWER MANAGEMENT INSTITUTE (PMI), NTPC

PMI was set up by the National Thermal Power Corporation (NTPC) in recognition of the
vital role of management development in the context of the challenges associated with
the growth of the Indian Power Sector. PMI is committed "to be a global institute of
excellence for developing world-class power professionals" by providing state-of-the-art
training and management development interventions directed towards growth and
development of the power sector. Over the years the institute has emerged as one of the
leading learning centers for power professionals in the country. PMI has strengthened its
capability to support the technical and managerial development of identified executives
for distribution. A dedicated pool of experts and faculty at PMI is providing training and
development of middle and senior level executives from NTPC and other organizations.
An ambitious effort is now being implemented by PMI to conduct programs for the
power sector in a range of areas related to technical improvement of distribution systems
and distribution management systems, as well as managerial competency and skill
development.

Power Management Institute offers Executive Education that works. PMI has offered
executive education courses for more than 20 years and continues to be a leader in the
field. With a mix of more than 150 programs, diversified faculty, and excellent
educational facilities, PMI offers leading-edge solutions to more than 4,000 executives
annually apart from interacting with a large population of power professionals from other
organizations.
NTPC runs a state-of-the-art Power Management Institute (PMI), at NOIDA. PMI has
over the years trained a large number of professionals from NTPC, State Electricity
Boards and other power utilities in the country. Also, participants in PMI programmes
have come from various South Asian and Middle Eastern countries.

With a wide range of expertise and experience acquired over the years, PMI offers
programmes in the following categories:

1. Enhancing General Management Competence and Skills:The programmes

included in this category develop the knowledge, attitude, behaviour and skills of
the participants from the perspective of general management of the enterprise.
2. Enhancing Technical Expertise:These programmes are designed to impart
emerging technologies and practices that augment technical skills and
competencies.
3. Upgrading Functional Skills:The programmes in this category cater to the
functional areas of the organization like HR, Finance, Materials, Contracts etc
4. Managing Information Technology: IT enablement is a key determinant of
organization success and these programmes provide the required knowledge and
skills.

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 5. Induction Level Training Programmes: A key area of expertise is the Induction
level training programme for newly recruited executive trainees in Engineering,
Chemistry, IT, Finance and Human Resources
6. Employee Development Programmes: Programmes are conducted for the
Supervisors and Workmen of our Corporate Centre Office in the areas of power
plant familiarization, attitude, quality, finance and IT.

OVERVIEW

The Power Management Institute (PMI) was set up by NTPC in recognition of the vital
role that management development has to play, in the context of the challenges associated
with the growth of the Indian Power Sector. The Institute is involved in the training and
development of middle and senior level personnel not only from the power sector but
from organizations outside the sector also.

The Power Management Institute is committed to be a leading institute in developing

world-class competencies by providing a state-of-the-art training, which responds to and
proactively meets the needs of the power professionals.

The Institute has an infrastructure capable of conducting eight programmes concurrently.

This year the Institute has set an ambitious target of conducting over 200 programmes of
varied durations and diverse themes.

Apart from training programmes, PMI also offers the following services:
 Open Learning Services.
 Testing services for conduct of departmental examinations.
 Integrated personality development including language proficiency, dramatics and
other fine arts.

34
 Professional update sessions wherein discussions are held after screening of
management or technical films.

LUSH GREEN INTERNAL INFRASTRUCTURE

PMI LOGO

35
 PMI VISION

“To be a global institute of excellence for developing world class power professionals”

PARTICIPATION

Nominations for all programmes at the Institute are to be sent three weeks before the
commencement of the programme. The acceptance of the nominations will be duly
confirmed by the Institute. An information regarding nominations can also be sent
through e-mail or directly from PMI's Website. Organizations other than NTPC Projects
and Divisions should remit the course fee in the name of "NTPC Ltd.," through crossed
cheque/draft payable at New Delhi.

LOCATION

PMI is located on outer NOIDA road (near film-city) in Sector 16-A, NOIDA and faces
the green belt along the Yamuna Bandh. NOIDA is a suburb of New Delhi, situated in
Uttar Pradesh. PMI Campus is merely 2 Kms from Delhi-UP Border. The Rail Heads for
Noida are Delhi, New Delhi and Hazarat Nizamuddin Stations. Airport is Delhi Airport.
Taxis ply upto the campus.

VENUE

The programmes are usually conducted at the campus of Power Management Institute at
Noida. A few decentralized programmes are conducted at the specified Projects or other
venues as indicated in the Programme venue.

ACTIVITIES

 To create and scan new applicable knowledge, and effect its introduction in the
power sector.
 To design and execute need-based programmes, workshops and seminars
 To address key sectoral issues through research and policy seminars.
 To carry out applied research in management areas
 To undertake consultancy assignments in management and technical areas of the
power sector.

36
These activities are carried out in an integrated manner so that there is a synergistic blend
of training, research and consultancy.
While in the initial years, the Institute's orientation was towards augmenting management
skills of NTPC's executives, the Institute now provides training opportunities to
executives of other organization in the power sector. These programmes offer a valuable
opportunity for participants to interact with and learn from the experience of executives
from a variety of operating situations. The Institute also conducts sponsored programmes
in different areas of power sector management.
FACILITIES

The institute's integrated campus at Noida boasts of modern infrastructure and facilities.

The PMI's new integrated campus at NOIDA, set amidst idyllic surroundings, has
modern infrastructure and facilities that include:

 Lecture Rooms, Conference Rooms, Seminar Rooms, equipped with modern

teaching aids and complemented by a set of smaller syndicate rooms used for
group work. Power Management Institute has an elegantly designed auditorium
with a seating capacity of 210 persons.

 Learning Resource Center includes books, data bank and information service in
print and electronic media. The Learning Resource Center also has Computer
based referencing facility, Electronic Information Products (CD ROM) and on-
line access to international databases. There is also an Open Learning Center
which works towards augmenting management skills of NTPC's executives. The
Center has multimedia facilities to support learner-centered development. The
center offers a variety of modules designed to support self-managed learning and
project work.

37
 Computing facility comprises of a Local Area Network (LAN) having 23 nodes.
Further, the institute has a microprocessor lab with 5 PCs and interfacing
hardware.

 The academic and computing needs of the Institute are met through a campus
wide Local Area Network which supports and integrates all the computing
facilities of three computer labs, faculty and administrative offices. The
centralized computer labs are equipped with Compaq servers & have capacity to
train about fifty participants simultaneously; catering to both high end as well as
end user needs on Windows NT, Novell Netware and UNIX platforms. Internet
connectivity is extended throughout the campus through a dedicated 64 kbps
radio-link which is being upgraded to 128 kbps.

 Training Resource Unit has facilities for design and production of course-ware.

 The residential facilities include 50 AC Rooms and 20 suites. The recreational

and sporting facilities include a Swimming Pool, a Physical Fitness Center and
Gymnasium, Tennis Court, Badminton Court and facilities for Table Tennis and
Billiards. The Participants' House has telephone facility in each room. The STD
booth in the premises is the latest facility added.

PROGRAMMES

• Enhancing General Managerial Competence And Skills

• Upgrading Functional Skills
• Career-Linked Planned Interventions
• Technical Planned Interventions
• Enhancing Technical Expertise
• Managing Information Technology
• Programmes For Non-Executives

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HUMAN RESOURCE AT NTPC

HR VISION

39
“To enable our people to be a family of committed world class
professionals, making NTPC a learning organization”

HR GOALS

• To develop an organization having knowledge based competitive edge.

• To create culture of team building, empowerment and accountability to

convert knowledge into productive action with speed, creativity and
flexibility.

HR STRATEGIES

• Institutionalize core values for actualizing throughout the organization.

• Imbibe a culture of openness, competence, commitment, system
orientation, economy, productivity, knowledge management,
communication and training.
• Undertake organizational renewal, restricting, periodic assessment to have
a re look at various initiatives and their impact.
• Create motivational enabling climate of empowerment, participation,
career growth, sensitive line manager and equip them to their own HR
initiative and succession planning.
• Communication within and outside company.

'People before PLF (Plant Load Factor)' is the guiding philosophy behind the entire
gamut of HR policies at NTPC. We are strongly committed to the development and
growth of all our employees as individuals and not just as employees. We currently
employ approximately 24500 people at NTPC.
Competence building, Commitment building, Culture building and Systems building are
the four building blocks on which our HR systems are based.

RECRUITMENT

40
We believe in the philosophy of 'Grow your own timber'. Our 'Executive Trainee' scheme
was introduced in 1977 with the objective of raising a cadre of home grown
professionals. First Division Graduate Engineers/ Post graduates are hired through
nation-wide open competitive examinations and campus recruitments. Hiring is followed
by 52 weeks of fully paid induction training consisting of theoretical input, on job
training, personality development & management modules.

• Theater Workshop - The orientation module for ETs include such unique
practices like Theatre Workshops in order to enhance their communication skills-
verbal and non verbal, team work, body language, expressions etc. conducted
with the help of professional institutions like National School of Drama.
• Yoga - For the holistic development of the trainees, caring for their physical
health and mental alertness is as important as hard skills training. Yoga and
meditation are part of our orientation-training programme for Executive Trainees.
Yoga sessions are scheduled every morning during the training period.
• Corporate Social Responsibility - - In order to make new hires a part of our
social responsibility drive, exposure to on-field community development and
responsibilities towards Project Affected Persons is given. A special module on
corporate social responsibility is a part of orientation training which covers all the
important aspects of corporate social responsibility like environment, safety,
health hazards, environmental impact, ash utilization etc.
• Mentoring "Ankur"- For effective socialization and transformation from
training mode to executive capacity of taking responsibility, executive trainees are
attached to mentors once they are put on job. Mentors are senior executives with
10-15 years of experience in NTPC who act as a friend, philosopher and guide to
the budding power professions.
• Sports - To keep the trainees physically active and agile, emphasis is laid on
sports activities. Sports infrastructure has been provided at each NTPC location
and inter/intra unit matches are organized from time to time.

CAREER ADVANCEMENT & OPPORTUNITIES

We have a well established talent management system in place, to ensure that we deliver
on our promise of meaningful growth and relevant challenges for our employees. Our
talent management system comprises PERFORMANCE MANAGEMENT, CAREER
PATHS and LEADERSHIP DEVELOPMENT.
The brand NTPC Limited holds in it the promise of high performance, growth and
challenge. For a new recruit joining the company, the company promises a challenging
career with an opportunity to be a partner in nation's growth.

• Performance Management - NTPC has a standardized and formalized

performance management system. A KPA based system is designed to assess
functional, managerial and potential competence in an objective and transparent
manner. The system is designed to accomplish the overall organizational vision

41
 and mission by linking individual performance to the company’s objectives and
strike a balance between performance and competence to help individuals excel in
their fields.
• Career Paths - A formal career path and development process exists in NTPC.
All career paths have an underlying management structure. Promotions within
each career path are aligned with the needs of the organization. Succession
criteria for leadership positions in each career path have been identified, which
provide basis for job rotation. Anyone joining the organization can choose to
pursue a business, function or staff career path and will be put through specific
training interventions and job rotation path towards becoming a business, function
or staff head.
• Leadership Development - Potential employees are assessed for leadership
competence and are groomed to occupy leadership positions in the company. We
have a system that enables measurement of leadership effectiveness, gap
identification against an identified set of leadership competence. Individual
development plans are made based on the gaps identified to ensure that the
process of development and growth is meaningful.

REWARDS & RECOGNITIONS

We have, from inception, created a culture of rewards and recognitions through

celebration of various achievements and events and recognizing the contributions behind
such success.

INNOVATE, CREATE, COMPETE

We have introduced numerous initiatives which seek to enhance the creativity,

innovation, functional aptitude and teamwork of our employees. These initiatives include
National Open Competition for Executive Talent (NOCET), Professional Circles, Quality
Circles, Business Minds and Medha Pratiyogita (a quiz for our employees). A
management journal called “Horizon” is published quarterly to enable the employees to
share their ideas and experiences across the organization.

• NTPC Open Competition for Executive Talent (NOCET)- National Open

Competition for Executive Talent (NOCET) is a 3 tier theme based team event
held to solicit ideas on latest issues facing the organisation. A ‘Theme’ for the
competition is decided by CMD of NTPC. A topic that is relevant to NTPC
scenario is chosen. 3-4 member teams are formulated that compete at unit,
regional and corporate levels. A panel of judges comprising of top notch NTPC
executives and external experts judge the teams on their concept and presentation.
• Professional Circles - As a learning organisation, NTPC encourages formation of
Professional circles for knowledge dissemination; knowledge updating etc.
professional circles are interest groups where employees sharing same interest
areas get together to share knowledge and latest developments in the field. In
order to encourage and recognize professional circles, NTPC has institutionalized

42
 a three-tier competition amongst the professional circles culminating at the
company level. Currently, about 300 professional circles are active in the
company.
• Quality Circles- Quality circles were introduced as an initiative to involve every
grass root level employee. Under this initiative, employees volunteer to take up
improvement projects in their work areas. Annual contests are organized at
project level, regional level and company level in which QCs from all over NTPC
compete with each other. The winning team also gets a chance to participate at
National and International level QC Convention. NTPC has been winning the
National Quality Circles Convention for last 4 consecutive years and has
participated in International Quality Control Conventions at Bangkok(2004),
South Korea (2005), Indonesia (2006) and China (2007)
• Business Minds- Another initiative which is very popular among NTPC
employees, is called the Business Minds. This is a management game that
develops strategic thinking & decision making in executives by exposing
participants to simulated real life business situations that help them discover new
skills. It is conducted in association with AIMA. Cross-functional teams
participate in the game as it is multi – disciplinary in nature reflecting real life
multifunctional role of business. Qualifying teams compete at the national level.
In 2008, The winning team from NTPC Ramagundam also won the national
management games competition conducted by AIMA and qualified to compete at
the Asia level.
• Medha Pratiyogita- We have been conducting a quiz competition very
successfully. Medha Pratiyogita is conducted for the children of NTPC
employees. It features renowned Quizmaster Derek O’Brien and his team. The
quiz is conducted at the Project, Regional and Corporate levels.
• Knowledge Management in NTPC- In initiative to meet our ultimate objective
of becoming a Learning Organisation, an integrated Knowledge Management has
been developed. This system allows tacit knowledge in form of learning and
experiences of employees to be captured and summarized for future reference. It
provides adequate communication and a formal process for classification,
codification, and sharing of knowledge through which employee can contribute,
learn, share and generate solutions.

QUALITY OF WORK-LIFE

NTPC is proud of its systems for providing a good quality of work-life for its employees.
In addition to providing beautiful and safe work places, NTPC encourages a culture of
mutual respect and trust amongst peers, superiors and subordinates.

Away from hectic city life, NTPC townships provide an environment of serenity, natural
beauty and close community living. Numerous welfare and recreation facilities including
schools, hospitals and clubs are provided at the townships to enhance quality of life & the
well being of employees and their families. An entire range of benefits, from child care
leave to post retirement medical benefits are extended to employees to meet any exigency
that may arise in a person's life.

43
 TRAINING & DEVELOPMENT

NTPC subscribes to the belief that efficiency, effectiveness and success of the
organisation, depends largely on the skills, abilities and commitment of the employees
who constitute the most important asset of the organisation.

Our Training Policy envisages a minimum of 7 man days of training per employee per
year. We have developed our own comprehensive training infrastructure.
Therefore, a lot of emphasis is laid on the training and development of employees.
NTPC view of employee development has a very wide perspective and is not constrained
to job related inputs. Training in NTPC is carried out with short term and long term
objectives to impart skills required to carry out various jobs and provide developmental
input for the individual’s and organization’s future growth.
TRAINING INFRASTRUCTURE

NTPC’s training policy envisages minimum 7 Mondays of training per employee per
year. Our philosophy is to develop our own training systems and deliver training
internally as far as possible. Hence, NTPC has developed its own training
infrastructure which comprises of –

Power Management Institute– It is the apex training institute of NTPC located in

NOIDA, close to the company headquarters and houses a world class training
infrastructure. It has two residential hostels with internet broadband facility in each
room. PMI has multiple training and conference rooms fitted with audio visual
training aids. The PMI auditorium has a seating capacity of 300 and hosts many
conferences at national and international level.
PMI houses indoor badminton court, swimming pool, tennis court and gym for use of
participants. The Institute has full time dedicated faculty and organizes training and
conferences for NTPC and other companies as well.

Employee Development Centres- Employee Development Centres (EDCs) are located

at all NTPC projects and stations and take care of training needs of employees at the
unit. They have similar infrastructure as that of PMI and have full time dedicated staff
of 150 employees across NTPC. EDCs serve to meet the training needs that can be
catered to locally.

Simulator Centres - NTPC is the proud owner of two simulator training centres, for
both coal based and gas based plants, which are the only ones of their kind in the
country. Our gas based simulator centre is located in Kawas (Gujarat), while coal
based simulator centre is in Korba. These simulator centres are meant give hands on
experience of operating a power plant to our engineers. NTPC also extends this
facility to many other organisations in power industry or equipment manufacturers
who send their employees for training at our simulator centres.

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 PLANNED INTERVENTIONS

For management development, NTPC has a set of planned interventions designed for
each stage in a person’s career. Each of these is a custom made, medium term training
programme, specifically designed to give developmental input at a particular stage in the
person’s career.

EDUCATION UP-GRADATION SCHEMES

To meet the academic aspirations of employees and match them with the needs of the
organisation, NTPC has tie-ups with institutes of repute like MDI, Gurgaon; IIT Delhi;
BITS Pilani, etc. NTPC sponsors fixed size batches of employees who are inducted into
these courses based on their performance rating in the company and their performance in
the entrance exam conducted by the respective institute. Unlike other study leave and
sabbaticals, employees undergoing these courses do not forego their salary or growth
during the duration of the course.

Seeking Feedback

We actively seek and encourage employee feedback to ensure that our HR interventions
and practices remain relevant and meaningful. We regularly conduct Employee
Satisfaction and Organisational Climate Surveys.
Awards

We derive immense satisfaction from the awards we receive and the resulting recognition
they bestow. The awards are key indicators and milestones on our HR journey, and
reinforce our HR philosophy and practices. NTPC has been awarded No.1, Best
Workplace in India among large organisations for the year 2008, by the Great Places to
Work Institute, India Chapter in collaboration with The Economic Times.

AWARDS RECEIVED BY NTPC

AWARDS & ACCOLADES

NTPC Limited has been presented Scope Meritorious Award for Best Practices in Human
Resource Management – 2004-05 for Innovative Human Resource Management Practices
well integrated with the business requirements of the Company was presented by Shri.
Sontosh Mohan Dev, Hon’ble Minister of Heavy Industries and Public Enterprises to Shri
T. Sankaralingam, CMD, NTPC Limited in New Delhi, on 8th November, 2006.

Shri Chandan Roy, Director (Operations), NTPC Limited has been conferred with
Eminent Engineer Award by the Institution of Engineers (India), for his distinguished
services in Engineering Sector during the year 2006 in the area of NCT of Delhi.

A mechanical engineer by profession Shri Chandan Roy is also Chairman, Ratnagiri

45
Power Project Limited. He is also on the Board of Damoder Valley Corporation (DVC),
Northern Coal Fields Limited (NCL) and Nuclear Power Corporation of India Limited
(NPCIL).

On the occasion of Power Line magazine’s Tenth Anniversary celebrations, on 11th

October, 2006 in New Delhi, Mr. Sushilkumar Shinde, Union Minister of Power
presented “Expert Choice Awards” to honour the leading achievers in the power sector.
NTPC was recognized as the "Best Organisation in Central Sector".

The awards are based on the results of a survey conducted by Power Line among a
carefully selected group of 600 eminent industry experts representing all key segments of
the sector including central PSUs, state and private utilities, regulators, equipment
manufacturers, consultancy firms, banks and FIs, employee associations, NGOs and
sector analyst
WINNING ACCOLADES

International Project Management Award (IPMA)-2008 silver medal for Project

Excellence for Vindhyachal –Stage III (2X500 MW).

Ranked number ONE in the category the 'Best Workplaces for Large
Organizations' and number eight overall for the year 2008 by Great Places to Work
Institute’s India chapter in collaboration with Economic Times.

Institute of Chartered Accountants has awarded a Silver Shield Award for Excellence in
Financial Reporting for the year 2007-08 in the category of Infrastructure &
Construction sector

Corporate Award 2008 for Sectoral Excellence by Dun & Bradstreet. Honorary
Fellowship Award by Centre for Excellence in Project Management and Project
Management Award to Shri R.S Sharma, CMD,NTPC for his outstanding leadership
and commitment in Project Management

Best CFO in the Public Sector category to Shri A.K. Singhal, Director (Finance),
NTPC Ltd for his exemplary contribution in the expansion of NTPC Limited and his
outstanding role in ensuring effective governance and managing various aspects of the
business by the Institute of Chartered Accountants of India (ICAI).

“CII- EXIM Excellence Award 2008” to three NTPC stations namely Ramagundam,
Vindhyachal and Badarpur. ‘Significant Achievement’ to Ramagundam and ‘Strong
Commitment to Excel’ award to Vindhyachal and Badarpur.

Ranked No. 1 in Independent power producer & Energy Trader in Asia & 15th in
overall performance in the Asia region in the Platts Top 250 Global Energy Company
list.

46
Most Valuable PSU by the premier Investment Journal Dalal Street at the First DSIJ
Awards Ceremony held in New Delhi

CII –ITC Sustainability awards 2008 to Farakka and Faridabad in the category
“Certificate of commendation for strong Commitment” for exemplary performance in
environmental economic social dimension.

“Infrastructure Excellence Award” to Talcher-Kaniha Stage-II by E-18 Association

with CNBC-TV 18.

‘India Power Award 2008’ in the category of ‘Energy Efficiency’ to NTPC- CenPEEP
(Centre for Power Efficiency & Environment Protection) conferred by Council of Power
Utilities

Star Company of the year in the category of Public Sector Undertaking by Business
Standard.

IEEMA Power Awards for Excellence in Project Execution-Thermal –First prize to

Vindhyachal Stage III and Second Prize in Excellence in Decentralized Distribution

NTPC ranked 317 by Forbes Global 2000 – NTPC Limited the largest power utility of
the country has been ranked 317th in the Annual ranking of top 2000 public companies in
the world by Forbes magazine 2009. The ranking is based on a mix of four performance
metrics of sales, profit, assets and market value.

Navratna Company – In recognition of its excellent performance and tremendous

potential NTPC has been given the status of "Navratna" by the Government of India.

Best Employer – NTPC has been rated as one of the top most ‘’Best Employer’’of the
country for the year 2003, 2004 and 2005 in a row.

Nine employees of NTPC Ltd. have been awarded

Rashtriya Pishwakarma Puraskar for the year 2006 on
17th September 2006 in New Delhi. Five employees of
NTPC Ramagundam Project received category ‘A’
award while 4 employees of NTPC Dadri Project were
presented category ‘C’ award.

47
 Ramagundam, Korba, Kahalgaon and Dadri projects
of NTPC Limited have been conferred Safety
Innovation Award-2006 instituted by Safety and
Quality Forum of The Institution of Engineers(India)
New Delhi. The awards were presented by Sh. R. V.
Shahi, Secretary (Power) and recognize the projects
for their outstanding contribution towards innovating,
promoting and implementing Best Safety Practices on
6th September 2006.

NTPC Limited has bagged the prestigious DUN &

BRADSTREET-AMEX Corporate Award-2006 for
being Number one in the Indian Power Sector on 5th
September 2006.

Shri A.R.Kidwai, Hon’ble Governor of Haryana

presented the Distinguished Fellowship of the Institute
of Director’s (IOD) to Shri T.Sankaralingam, CMD,
NTPC Limited at the 17th Annual Day function of IOD
held in New Delhi on 11 August 2006.

Golden Peacock Eco Innovation & Environment Management Award 2005 was won
by Environment Management Division, NOIDA. The Award was given on 9th June 2006
at the World Congress on Environment.

NTPC wins "Commendation Certificate for Strong Commitment Among Large

Business Organization" in Sustainability Awards 2006. The award has been instituted
by CII-ITC Centre of Excellence for Sustainability Development for the first time this
year to recognize and reward excellence in Social, Economic and Environmental
Performance.

48
NTPC Limited ranked first amongst top 10 PSEs for
MOU Award for Excellence in Performance for the
year 2003-04. Shri C.P. Jain, CMD, NTPC also
commended for his contribution as Chairman
SCOPE during April 2003-March 2005 through a
Special Award. The Awards where given by Hon’ble
Vice President of India, Shri Bhairon Singh Shekhawat
in a function organized by SCOPE at Vigyan Bhawan
on 10th January, ’06.

Best Companies to work in India – ‘Business Today-Mercer Consulting 2005’ has rated
NTPC as fifth Best Company in India to Work For. NTPC is the only PSU and
infrastructure company to figure in the top 10.

Great Places to Work – NTPC was ranked as Third Great Place to Work for in India, by
a survey conducted by Grow Talent and Business World – 2005 for the second year
consecutively.

Platts Global Energy Award 2005 for Community Development Program of the Year.
Golden Peacock Award to PMI for providing innovative training, for the third year in
succession.

Shri C.P. Jain, CMD, NTPC Limited was conferred

with prestigious Greentech Life Time Achievement
Award by Mr. Franscisco Xavier Pacheco,
Agriculture Minister, Government of Goa, at 6th
Annual Greentech Conference on Environment
Management held at Panaji, Goa for his outstanding
contribution in the field of Environment Management
and his efforts to make NTPC a front runner in the
Indian Power Sector.

Shri C.P.Jain, CMD, NTPC Limited, awarded the

prestigious Ernst & Young Manager Entrepreneur
of the Year 2005 Award. Shri Praful Patel, Union
Minister for Civil Aviation presented the Award at a
glittering function at Mumbai on 11th November, 2005.
Shri Montek Singh Ahluwalia, Deputy Chairman,
Planning Commission was also present on the
occasion.

Seven NTPC Stations received CII-EXIM Business Excellence Award 2005

commendations. Dadri awarded for “Significant Achievement” and Kawas,

49
Ramagundam, Rihand, Simhadri, Tanda & Vindhyachal recognized for “Strong
Commitment to Excel” on 10th November, 2005 at Bangalore.
NTPC bagged the International Project Management Award (IPMA) for its Simhadri
Project for the year 2005. NTPC is the only Indian Company that has been presented this
Award since the awards inception in 2002.
Golden Peacock Global Award for Excellence in Corporate Governance 2005 –
instituted by the World Council for Corporate Governance. The award was given in a
glittering function at London, on 12th May 2005.

Greentech Safety Award - This award is given for

outstanding achievement in the field of safety and
environment management. NTPC won 09 Gold, 04 Silver
01 Bronze award on 11th May 2005 in a function at
Hyderabad:
Gold: Corporate Centre, Koldam, Badarpur,
Simhadri, Faridabad, Farakka, Dadri, Rihand and
Jhanor-Gandhar
Silver: NSPCL- Rourkela, Korba, Kahalgaon, Anta
Bronze: Kayamkulam
NTPC HIGHLIGHTS

 NTPC's Coal and Gas stations recorded PLF of 93.22 % & 86.71% in April, 2009
which is the highest ever monthly PLF for the month of April.

 NTPC, NHPC, Power Grid and DVC signed a Joint Venture Agreement (JVA) for
incorporation of a JV Company to set up an Online High Power Indigenous Test
Laboratory for short circuit test facility in the country to ensure testing of the
electrical equipments as per international standards in New Delhi.

 The Chairman & Managing Director, NTPC Limited held a press conference on April
8th, 2009 in New Delhi. The Performance Highlights including Provisional
Unaudited Profit after Tax and Income of NTPC for the financial year 2008-09 was
shared with the press.

 NTPC Coal Stations recorded the highest generation of 588.90 MU, a PLF 102.685%
on 31st March, ‘09. The previous highest generation was 587.99 MU, with PLF of
102.53% on 26th March ‘09.

 NTPC Coal Stations recorded a PLF of 100.03% during the month of March, 2009.
This is the highest ever recorded.

 NTPC Limited the largest power utility of the country has been adjudged the Most
Valuable PSU by the premier Investment Journal Dalal Street today.

50
 NTPC's Coal Stations achieved highest single day generation of 583.24 MUs on
23.03.09 surpassing the previous best of 583.11 MUs achieved on 08.03.09

 NTPC Stations recorded the highest generation of 660.25 MUs at a PLF of 98.56
percent on 6th March 2009. Surpassing the previous best of 655.22 MUs recorded
some days earlier.

 NTPC has achieved the highest ever single day generation of 655.22 MUs on 2nd
March, 2009 with highest ever single day coal based generation of 579.02 MUs.

NTPC’s excellence in executing power projects and its initiative in Decentralised

Distributed Power Generation has been recognised and awarded at IEEMA Power
Awards-2008. NTPC Vindhyachal stage III(2x 500MW) bagged the first prize in
the category” Excellence in Fast Track Power Project Execution- Thermal and
second prize in the category Excellence in Decentralised Distributed Power
Generation.

NTPC announces Joint Venture with NPCIL, where NPCIL will hold 51% stake and
NTPC 49%.

ORGANIZATIONAL CHART

51
52
 PERFORMANCE APPRAISAL

Introduction

Performance appraisal is the process of obtaining, analyzing and recording information

about the relative worth of an employee. The focus of the performance appraisal is
measuring and improving the actual performance of the employee and also the future
potential of the employee. Its aim is to measure what an employee does

53
.
According to Flippo, A prominent personality in the field of Human resources,
“performance appraisal is the systematic, periodic and an impartial rating of an
employee’s excellence in the matters pertaining to his present job and his potential for a
better job." Performance appraisal is a systematic way of reviewing and assessing the
performance of an employee during a given period of time and planning for his future.

Employee performance Management includes:

• Planning work and setting expectations,

• Continually monitoring performance,
• Developing the capacity to perform,
• Periodically rating performance in a summary fashion, and

54
 • Rewarding good performance

Performance management is the systematic process by which an organization involves its

employees, as individuals and members of a group, in improving organizational
effectiveness in the accomplishment of organization mission and goals.’

It is a powerful tool to calibrate, refine and reward the performance of the employee. It
helps to analyze his achievements and evaluate his contribution towards the achievements
of the overall organizational goals.

By focusing the attention on performance, performance appraisal goes to the heart of

personnel management and reflects the management’s interest in the progress of the
employee.

OBJECTIVES OF PERFORMANCE APPRAISAL

• To review the performance of the employees over a given period of time.

• To judge the gap between the actual and the desired performance
• Self assessment by employee
• Understanding strength and weakness.

55
• Identifying training and development needs.
• Identifying potential.
• Better understanding between appraised and appraiser.
• Recognizing achievements.
• Goal setting GOAL.
• Improved organizational performance.
• To review the performance of the employees over a given period of time.
• To judge the gap between the actual and the desired performance.
• To help the management in exercising organizational control.
• Helps to strengthen the relationship and communication between superior –
subordinates and management – employees.
• To diagnose the strengths and weaknesses of the individuals so as to identify the
training and development needs of the future.
• To provide feedback to the employees regarding their past performance.
• Provide information to assist in the other personal decisions in the organization.
• Provide clarity of the expectations and responsibilities of the functions to be
performed by the employees.
• To judge the effectiveness of the other human resource functions of the
organization such as recruitment, selection, training and development.
• To reduce the grievances of the employees.

PROCESS OF PERFORMANCE APPRAISAL

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 STEPS OF PERFORMANCE APPRAISAL

ESTABLISHING PERFORMANCE STANDARDS

57
The first step in the process of performance appraisal is the setting up of the standards
which will be used to as the base to compare the actual performance of the employees.
This step requires setting the criteria to judge the performance of the employees as
successful or unsuccessful and the degrees of their contribution to the organizational
goals and objectives. The standards set should be clear, easily understandable and in
measurable terms. In case the performance of the employee cannot be measured, great
care should be taken to describe the standards.

COMMUNICATING THE STANDARDS

Once set, it is the responsibility of the management to communicate the standards to all
the employees of the organization.
The employees should be informed and the standards should be clearly explained to the.
This will help them to understand their roles and to know what exactly is expected from
them. The standards should also be communicated to the appraisers or the evaluators and
if required, the standards can also be modified at this stage itself according to the relevant
feedback from the employees or the evaluators.

MEASURING THE ACTUAL PERFORMANCE

The most difficult part of the performance appraisal process is measuring the actual
performance of the employees that is the work done by the employees during the
specified period of time. It is a continuous process which involves monitoring the
performance throughout the year. This stage requires the careful selection of the
appropriate techniques of measurement, taking care that personal bias does not affect the
outcome of the process and providing assistance rather than interfering in an employees
work.

COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE

The actual performance is compared with the desired or the standard performance. The
comparison tells the deviations in the performance of the employees from the standards
set. The result can show the actual performance being more than the desired performance
or, the actual performance being less than the desired performance depicting a negative

58
deviation in the organizational performance. It includes recalling, evaluating and analysis
of data related to the employees’ performance.

DISCUSSING RESULTS
The result of the appraisal is communicated and discussed with the employees on one-to-
one basis. The focus of this discussion is on communication and listening. The results,
the problems and the possible solutions are discussed with the aim of problem solving
and reaching consensus. The feedback should be given with a positive attitude as this can
have an effect on the employees’ future performance. The purpose of the meeting should
be to solve the problems faced and motivate the employees to perform better.

DECISION MAKING
The last step of the process is to take decisions which can be taken either to improve the
performance of the employees, take the required corrective actions, or the related HR
decisions like rewards, promotions, demotions, transfers etc.

PURPOSE OF PERFORMANCE APPRAISAL

Performance Appraisal is being practiced in 90% of the organizations worldwide. Self-
appraisal and potential appraisal also form a part of the performance appraisal processes.

Typically, Performance Appraisal is aimed at:

 To review the performance of the employees over a given period of time.

 To judge the gap between the actual and the desired performance.

 To help the management in exercising organizational control.

 To diagnose the training and development needs of the future.

Provide information to assist in the HR decisions like promotions, transfers etc.

• Provide clarity of the expectations and responsibilities of the functions to be

performed by the employees.

59
 • To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development.

• To reduce the grievances of the employees.

• Helps to strengthen the relationship and communication between superior –

subordinates and management – employees.

Challenges of Performance Appraisal

In order to make a performance appraisal system effective and successful, an

organization comes across various challenges and problems. The main challenges
involved in the performance appraisal process are:

• Determining the evaluation criteria

Identification of the appraisal criteria is one of the biggest problems faced by the
top management. The performance data to be considered for evaluation should be
carefully selected. For the purpose of evaluation, the criteria selected should be in
quantifiable or measurable terms

• Create a rating instrument

The purpose of the performance appraisal process is to judge the performance of
the employees rather than the employee. The focus of the system should be on
the development of the employees of the organization.

• Lack of competence
Top management should choose the raters or the evaluators carefully. They
should have the required expertise and the knowledge to decide the criteria
accurately. They should have the experience and the necessary training to carry
out the appraisal process objectively.

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 • Errors in rating and evaluation
Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait
influencing the evaluator’s rating for all other traits) etc. may creep in the
appraisal process. Therefore the rater should exercise objectivity and fairness in
evaluating and rating the performance of the employees.

• Resistance
The appraisal process may face resistance from the employees and the trade
unions for the fear of negative ratings. Therefore, the employees should be
communicated and clearly explained the purpose as well the process of appraisal.
The standards should be clearly communicated and every employee should be
made aware that what exactly is expected from him/her.

PRE-REQUISITES FOR EFFECTIVE & SUCCESSFUL PERFORMANCE

APPRAISAL
The essentials of an effective performance system are as follows:
1. Documentation – means continuous noting and documenting the performance. It
also helps the evaluators to give a proof and the basis of their ratings.

2. Standards / Goals – the standards set should be clear, easy to understand,

achievable, motivating, time bound and measurable.

3. Practical and simple format - The appraisal format should be simple, clear, fair
and objective. Long and complicated formats are time consuming, difficult to
understand, and do not elicit much useful information.

4. Evaluation technique – An appropriate evaluation technique should be selected;

the appraisal system should be performance based and uniform. The criteria for
evaluation should be based on observable and measurable characteristics of the
behavior of the employees.

5. Communication – Communication is an indispensable part of the performance

appraisal process. The desired behavior or the expected results should be

61
 communicated to the employees as well as the evaluators. Communication also
plays an important role in the review or feedback meeting. Open communication
system motivates the employees to actively participate in the appraisal process

6. Feedback – The purpose of the feedback should be developmental rather than

judgmental. To maintain its utility, timely feedback should be provided to the
employees and the manner of giving feedback should be such that it should have a
motivating effect on the employees’ future performance.

7. Personal Bias – Interpersonal relationships can influence the evaluation and the
decisions in the performance appraisal process. Therefore, the evaluators should
be trained to carry out the processes of appraisals without personal bias and
effectively.

MANAGERIAL ETHICS IN PERFORMANCE APPRAISAL

Performance appraisal system should be effective as a number of crucial decisions are

made on the basis of score or rating given by the appraiser, which in turn, is heavily
based on the appraisal system. Appraisal system, to be effective, should possess the
following essential characteristics:

Reliability and validity:

Appraisal system should provide consistent, reliable and valid information and data,
which can be used to defend the organization-even in legal challenges. If two appraisers
are equally qualified and competent to appraise an employee with the help of same
appraisal technique, their ratings should agree with each other. Then the technique
satisfies the condition of inter-rater reliability. Appraisals must also satisfy the condition
of validity be measuring what they are supposed to measure. For example, if appraisal is
made for potential of an employee for promotion, it should supply the information and
data relating to potentialities of the employee to take up higher responsibilities and carry
on activities at higher level.

Job Relatedness:
The appraisal technique should measure the performance and provide information in Job
related activities/areas.

Standardization:
Appraisal forms, procedures, administration of techniques, rating etc. should be
standardized as appraisal decisions affect all employees of the group.

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Practical Viability:
The techniques should be practically viable to administer, possible to implement and
economical regarding cost aspect.

Legal Sanction:
It should have compliance with the legal provisions concerned of the country.

Training and Appraisers:

Because appraisal is important and sometimes difficult, it would be useful to provide
training to appraisers namely insights and ideas on rating, documenting appraisals, and
conducting appraisal interviews. Familiarity with rating errors can improve rater
performance and this may inject the needed confidence in appraisers to look into
performance ratings more objectively.

Open Communication:
Most employees want to know how well they are performing on the job. A good appraisal
system provides the needed feedback on a continuing basis. The appraisal interviews
should permit both parties to learn about the gaps and prepare themselves for future. To
this end, managers should clearly explain their performance expectations to their
subordinates in advance of the appraisals period. Once this is known it becomes easy for
employees to learn about the yardsticks and, if possible, try to improve their performance
in future.

Employee Access to Results:

Employees should know the rules of the game. They should receive adequate feedback on
their performance. If performance appraisals are meant for improving employees
performance, then withholding appraisals results would not serve any purpose.
Employees simply could not perform better without having access to this information.
Permitting employees to review the results of their appraisal allows them to detect any
errors that may have been made. If they disagree with the evaluation, they can even
challenge the same through formal channels.
It follows then that formal procedures should be developed to enable employees who
disagree with appraisal results which are considered to be inaccurate or unfair. They must
have the means for pursuing their grievances and having them addressed objectively.
When management uses it as a whip or fails to understand its limitations, it fails. The key
is not which forms or which method is used. Performance appraisal should be used
primarily to develop employees as valuable resources. Only then it would show
promising results.

ELECTRONIC PERFORMANCE MONITORING

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“Electronic performance monitoring” refers to the use of technology to monitor the
employee’s performance.

Organizations across the world are incorporating the use of various advanced
technologies for all functions at all levels. Many organizations have incorporated
technologies in the performance appraisal and management processes. The electronic and
computerized systems are being used to monitor and evaluate the performance of the
employees.

The concept of electronic performance management has been the latest trend in
performance surveillance in the foreign countries where almost every job has the
potentials of being monitored electronically. But with the increasing number of MNC’s,
the trend is catching up fast in India.

With the organizations using the latest technologies and soft wares, electronic
performance monitoring supports comprehensive, qualitative, and subjective assessment
of the individual’s performance.

The main reasons for practicing electronic performance monitoring are

• It improves productivity and the quality of work

• Subjective work evaluation
• Compliance with the organizational policies and the local laws
• Helps in cost-control in the company
• Helps in the security of the company information.

Despite all its advantages, the arguments given against the use of electronic performance
monitoring is that such systems interfere in the privacy of the employees and some
employees may take it against their dignity.

Using such system can have both positive and negative effects on the organizational
health. It is argued that, to ensure the positive effects of electronic performance
monitoring:

The employees should be explained and communicated clearly about the system:
• The employees’ suggestions should be taken in designing the system
• The employees should be involved in the implementation of the system
• The organization should not solely rely on the system for the data on employees’
performance.
• The system should be supported by effective two-way communication and
feedback.

64
PERFORMANCE AND ITS EFFECTIVENESS

65
 PERFORMANCE APPRAISAL METHODS

(Tools of) Performance appraisal methods include 11 methods / types as

follows:

1. CRITICAL INCIDENT METHOD

The critical incidents for performance appraisal is a method in which the manager writes
down positive and negative performance behavior of employees throughout the
performance period

2. WEIGHTED CHECKLIST

This method describe a performance appraisal method where rater familiar with the jobs
being evaluated prepared a large list of descriptive statements about effective and
ineffective behavior on jobs

3. PAIRED COMPARISON ANALYSIS

Paired comparison analysis is a good way of weighing up the relative importance of

options.
A range of plausible options is listed. Each option is compared against each of the other
options. The results are tallied and the option with the highest score is the preferred
option.

4. GRAPHIC RATING SCALES

The Rating Scale is a form on which the manager simply checks off the employee’s level
of performance. This is the oldest and most widely method used for performance
appraisal.

5. ESSAY EVALUATION

This method asked managers / supervisors to describe strengths and weaknesses of an

employee’s behavior. Essay evaluation is a non-quantitative technique
This method usually use with the graphic rating scale method.

6. BEHAVIORALLY ANCHORED RATING SCALES

This method used to describe a performance rating that focused on specific behaviors or
sets as indicators of effective or ineffective performance.
It is a combination of the rating scale and critical incident techniques of employee
performance evaluation.

7. PERFORMANCE RANKING METHOD

66
Ranking is a performance appraisal method that is used to evaluate employee
performance from best to worst.
Manager will compare an employee to another employee, rather than comparing each one
to a standard measurement.

8. MANAGEMENT BY OBJECTIVES (MBO)

MBO is a process in which managers / employees set objectives for the employee,
periodically evaluate the performance, and reward according to the result.
MBO focuses attention on what must be accomplished (goals) rather than how it is to be
accomplished (methods)

9. 360 DEGREE PERFORMANCE APPRAISAL

360 Degree Feedback is a system or process in which employees receive confidential,

anonymous feedback from the people who work around them.

10.FORCED RANKING (FORCED DISTRIBUTION)

Forced ranking is a method of performance appraisal to rank employee but in order of

forced distribution.
For example, the distribution requested with 10 or 20 percent in the top category, 70 or
80 percent in the middle, and 10 percent in the bottom.

11. BEHAVIORAL OBSERVATION SCALES

Behavioral Observation Scales is frequency rating of critical incidents that worker has
performed.

SAMPLE FORMS OF PERFORMANCE APPRAISAL SYSTEM

Samples / examples of performance appraisal are popular in staff / employee appraisal

with organizations, human resource department, managers.
This information will help us develop effective Performance appraisal.
We can use free sample / example job specifications as follows:

1. Performance appraisal form

This is general form for performance appraisal.

2. Manager performance appraisal form

This form is a performance appraisal sample used for manager position.

3. Employee performance appraisal form

This form is a performance appraisal sample used for staff position.

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4. Essay evaluation form
This form is based on essay evaluation method of performance appraisal.

5. Forced Choice form

This form is a performance appraisal sample based on forced choice method of
performance appraisal.

6. Weighted checklist form

This form is based on weighted checklist method of performance appraisal.

7. Rating scale form

This form is a performance appraisal sample based on rating scales method of
performance appraisal.

8. Employee self appraisal form

This form is a performance appraisal sample based on appraisal self by employee.

PERFORMANCE APPRAISAL FORMS

I/ RATING SCALES OF PERFORMANCE APPRAISAL FORM:

We can use scales as follows for this performance appraisal form.

1. Unsatisfactory: Major improvements needed.
2. Needs Improvement: Less than Satisfactory could be doing better.
3. Meets Expectations: Performing duties as directed with minimal Supervision.
4. Excellent: Performing all duties in a cost-effective manner with positive, measurable
results.
5. Outstanding: Performing at a level above and beyond the duties of the current
position’s requirements.

II/ CONTENTS OF PERFORMANCE APPRAISAL FORM:

1. Quality of work
• Consider accuracy, thoroughness, effectiveness.
• Pressure, ability to meet standards of quality.
• Use of time and volume of work accomplished.
• Work output matches the expectations established.

2. Quantity of work
• Competence, thoroughness, and efficiency of work regardless of volume.
• Neatness and accuracy.

3. Teamwork:
• Establish and maintain effective working relationship with others.
• Shares information and resources with others
• Follows instructions of supervisor and respond to requests from others in the team in a

68
helpful manner.
• Contributing work and effort to group performance to meet agreed upon objectives and
achieve team success

4. Job knowledge
• Application of appropriate level of technical and procedural knowledge in specific field
• Degree of technical competence
• Understanding of job procedures, methods, facts and information related to
assignments.
• Perform duties with minimal supervision but seek guidance where and when
appropriate to the job, consults the appropriate staff

5. Initiative
• Consider the extent to which the employee sets own constructive work practice and
recommends and creates own procedures.
• Self-starter, develop and implement new methods, procedures, solutions, concepts,
designs and/or applications of existing designs or procedures.
• Accepts additional challenges and responsibilities and willingly assist others, self-
reliant.
• Completes assignment on time.

6. Interpersonal relations
• Consider the extent to which the employee is cooperative, considerate, and tactful in
dealing with supervisors, subordinates, peers, faculty, students and others.

7. Health and safety compliance

• The degree to which he or she complies with or over sees the compliance with
university safety rules.
• The following are also to be completed for supervisory personnel and members of the
administrative staff.

8. Communications abilities
Performance appraisal of communications includes elements as:
• Ability to listen and understand information;
• Presents information in a clear and concise manner.
• Knows appropriate way of communicating with immediate superiors and the
management
• Demonstrates respect for all individuals in all forms of communication regardless of
their background or culture.

9. Planning and organizing :

• Adapting to changes and using resources effectively;
• Maintains confidentiality as appropriate.
• Setting objectives, establishing priorities, developing plans;
• Arranging work schedules and prioritizing work to meet deadlines.
• Know when to ask for clarification before proceeding on a work project.

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10. Problem analysis and decision making
• Anticipating problems and facilitate problem resolution.
• Willingness to make necessary and immediate decisions given incomplete information.
• Understanding practical and workable solutions.
• Recognizing when a decision is necessary, asking for input, making decisions and
providing information and feedback in a timely manner.

11. Staff development

• The extent to which the individual provides guidance and opportunities to his or her
staff for their development and advancement in the university.

12. Dependability
Performance appraisal of dependability include elements as:
• Consider the extent to which the employee completes assignments on time and carries
out instructions.
• Starts work at appropriate time;
• Respects time allowed for breaks and lunch;
• Follows policies for requesting and reporting time off;
• Helps ensure work duties are covered when absent;
• Employee’s presence can be relied upon for planning purposes.
• Attendance and punctuality meets supervisor’s requirements.

2. MANAGER PERFORMANCE APPRAISAL FORM

I / MANAGER INFORMATION:
• Name
• Date
• Job Title
• Date of Last Review
• Department:
• Appraiser Name

II/ PERFORMANCE ACHIEVEMENT

• You should design table with columns as No, agreed objectives, weight, result, total
score.
• This table is used for objective performance.

III/ COMPETENCIES
1. Identify competencies needed for job, for example:
• Technical skills
• Financial skills
• Decision making ability
• Analytical ability / problem solving
• Initiative/perseverance/enthusiasm
• Flexibility

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• Written communication skills
• Oral communication skills
• Customer focus
• Teamwork
• Organizational ability.
• Negotiating skills

2. Rating scales can be:

• 1 = Exceptional
• 2 – Strong
• 3 = Fully Competent
• 4 = Continued Development
• 5 = Poor
• N = Not Applicable

IV/ MANAGEMENT SKILLS

1. Staff Development/ Mentoring
2. Influencing Skills
3. Analytical/Conceptual Thinking
4. Ability to Lead a Team
5. Using Business Acumen
6. Coaching skill etc

V/ DISCUSSIONS
1. Strengths (examples of where individual has excelled).
2. Developmental needs (areas that need strengthening, additional experience/exposure).

VI/ OVERALL RATING

1. Rating scales
• Exceptional
• Strong
• Fully Competent
• Continued Development
• Poor
• New to Position

2. Definition of each element:

• Exceptional (clearly outstanding performance). Performance falls within top 5 – 10
% of employees at his/her level.
• Strong (excellent performance). Performance falls within top 15% of the employees at
his/her level.
• Fully Competent (solid performance). Consistently meets expectations. Two-thirds of
your employees should fall within this category.
• Continued Development. Needs development in current position. Overall performance
is somewhat lower than expected for the current position.
• Poor (unsatisfactory performance). Performance is clearly below what is expected at

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current position/level.
• New to Position. Employee has been in position for less than six (6) months.

VII/ MANAGER COMMENTS

VIII/ SIGNATURES:
The employee’s signature below indicates that a performance development discussion
was conducted on the specified date, but does not necessarily indicate agreement with the
content of the session.
Manager / Supervisor Signature Supervisor Signature
Date.
Distribution: (1) Copy to HR departmental Personnel File (2) Copy to line manager. (3)
Copy to Manager / Supervisor.

3. EMPLOYEE PERFORMANCE APPRAISAL FORM

I / EMPLOYEE INFORMATION:
• Name
• Date
• Job Title
• Date of Last Review
• Department:
• Appraiser Name

II/ PERFORMANCE ACHIEVEMENT

• You should design table with columns as No, agreed objectives, weight, result, total
score.
• This table is used for objective performance

III/ COMPETENCIES
1. Identify competencies needed for job, for example:
• Written communication skills
• Oral communication skills
• Customer focus
• Teamwork
• Organizational ability.
• Negotiating skills
• Technical skills
• Financial skills
• Decision making ability
• Analytical ability / problem solving
• Initiative/perseverance/enthusiasm
• Flexibility

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2. Rating scales can be:
1 = Exceptional
2 – Strong
3 = Fully Competent
4 = Continued Development
5 = Poor
N = Not Applicable

IV/ DISCUSSIONS
1. Strengths (examples of where individual has excelled).
2. Developmental needs (areas that need strengthening, additional experience/exposure).

V/ OVERALL RATING
1. Rating scales
• Exceptional
• Strong
• Fully Competent
• Continued Development
• Poor
• New to Position

2. Definition of each element:

• Exceptional (clearly outstanding performance). Performance falls within top 5 – 10
% of employees at his/her level.
• Strong (excellent performance). Performance falls within top 15% of the employees at
his/her level.
• Fully Competent (solid performance). Consistently meets expectations. Two-thirds of
your employees should fall within this category.
• Continued Development. Needs development in current position. Overall performance
is somewhat lower than expected for the current position.
• Poor (unsatisfactory performance). Performance is clearly below what is expected at
current position/level.
• New to Position. Employee has been in position for less than six (6) months.

VI/ EMPLOYEE COMMENTS

———————–
———————–

VII/ SIGNATURES:
The employee’s signature below indicates that a performance development discussion
was conducted on the specified date, but does not necessarily indicate agreement with the
content of the session.
Employee Signature Supervisor Signature
Date
Distribution: (1) Copy to HR departmental Personnel File (2) Copy to line manager. (3)
Copy to Employee.

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 4. ESSAY EVALUATION FORM

1. Definition of essay evaluation

• This method asked managers / supervisors to describe strengths and weaknesses of an

employee’s behavior. Essay evaluation is a non-quantitative technique
• This method usually use with the graphic rating scale method.

2. Input of information sources

• Job knowledge and potential of the employee;
• Employee’s understanding of the company’s programs, policies, objectives, etc.;
• The employee’s relations with co-workers and superiors;
• The employee’s general planning, organizing and controlling ability;
• The attitudes and perceptions of the employee, in general.

3. Disadvantages of essay evaluation

• Manager / supervisor may write a biased essay.
• Some evaluators may be poor in writing essays on employee performance. Others may
be superficial in explanation and use flowery language which may not reflect the actual
performance of the employee.
• A busy rater may write the essay hurriedly without properly assessing the actual
performance of the worker.
• Apart from that, rater takes a long time, this becomes uneconomical from the view point
of the firm, because the time of rater is costly.

HR department can design questions as follows and send to line manager for appraising.
1. Please give examples of the employee’s ineffective behavior
——–
——–
2. Please give examples of the employee’s effective behavior
——–
——–
3. What steps have been taken (or will be taken) to modify ineffective behavior?
——–
——–
4. Does the jobholder’s job description need revision? And how to?
——–
——–
5. What are additional comments related to the conditions and circumstances of
effective/ineffective behavior?
——–
——–
6. Jobholder’s comments
——–
——–

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 5. FORCED CHOICE FORM

1. Design question Forced Choice

Requirements of questions: both statements in the pair may be positive or negative.
• Quality of work: ____quality is good____
• Absent too often: ____works hard____
• Learns quickly: ____work is reliable____
• Performance is exemplary: ____usually tardy____

2. Deployment of Forced Choice form

• This form is conducted by line manager.
• The rater is required to choose the most descriptive statement in each pair of statements.

FORCED RANKING (FORCED DISTRIBUTION)

1. Definition of forced ranking (forced distribution)

Forced ranking is a method of performance appraisal to rank employee but in order of

forced distribution.
For example, the distribution requested with 10 or 20 percent in the top category, 70 or
80 percent in the middle, and 10 percent in the bottom.
The top-ranked employees are considered “high-potential” employees and are often
targeted for a more rapid career and leadership development programs.
In contrast, those ranked at the bottom are denied bonuses and pay increases. They may
be given a probationary period to improve their performance.

2. Application of Forced Ranking

GE, Ford Motor, Conoco, Sun Microsystems, Cisco Systems, EDS, Enron and a host of
other U.S. corporations have adopted similar policies of this method

3. Advantages and disadvantages of forced Ranking

Advantages:
• They create and sustain a high performance culture in which the workforce
continuously improves.
• They force reluctant managers to make difficult decisions and identify the most and
least talented members of the work group.

Disadvantages
• They increase unhealthy cut-throat competitiveness;
• They discourage collaboration and teamwork;
• They harm morale;
• They are legally suspect giving rise to age discrimination cases.

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 6. WEIGHTED CHECKLIST FORM

1. Definition of weighted checklist

This method describes a performance appraisal method where rater familiar with the jobs
being evaluated prepared a large list of descriptive statements about effective and
ineffective behavior on jobs.

2. Process of weighted checklist

• HR department and Managers / Supervisors will set up checklist for each position.
• If the rater believes strongly that the employee possesses a particular listed trait, he
checks the item; otherwise, he leaves the item blank.

3. Sample of weighted checklist

• Does he give respect to his superiors? Yes/No
• Does he follow instructions properly? Yes/No
• Does he make mistakes frequently? Yes/No
The value of each question may be weighted equally or certain questions may be
weighted more heavily than others.

4. Advantages and disadvantages of weighted checklist

• This method helps the manager in evaluation of the performance of the employee.
• The rater may be biased in distinguishing the positive and negative questions. He may
assign biased weights to the questions.
• This method also is expensive and time consuming.
• It becomes difficult for the manager to assemble, analyze and weigh a number of
statements about the employee’s characteristics, contributions and behaviors.

WEIGHTED CHECKLIST FORM

1. Identify question:
Based on elements of job performance, you can design questions as follows (for example)
• Employee cooperatively assists coworkers who need help
• Employee plans actions before beginning work
• Employee works overtime when asked to
• Employee keeps work station well organized
• Employee listens to advice but seldom follows it

2. Design table of checklist

• You should design a table with 5 columns: No, Question, Yes / No, Weight.
• Then, Using benchmarking to identify weight of each question.
• Send this form to employees for answer (stick yes or no).
• Identify result by summarizing all points at weight column.

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 7. RATING SCALE FORM

1. Definition of the rating scales

• The Rating Scale is a form on which the manager simply checks off the employee’s
level of performance.
• This is the oldest and most widely method used for performance appraisal.
• The scales may specify five points, so a factor such as job knowledge might be rated 1
(poorly informed about work duties) to 5 (has complete mastery of all phases of the job).

2. Content of appraisal

• Quantity of work. Volume of work under normal working conditions

• Quality of work. Neatness, thoroughness and accuracy of work Knowledge of job.
• Dependability. Conscientious, thorough, reliable, accurate, with respect to attendance,
relief, lunch breaks, etc.
• Judgment
• Attitude. Exhibits enthusiasm and cooperativeness on the job
• Cooperation. Willingness and ability to work with others to produce desired goals.
• Initiative.

3. Rating scales

Rating scales can include 5 elements as follows:

• Unsatisfactory
• Fair
• Satisfactory
• Good
• Outstanding

4. Advantages of the rating scales

• Graphic rating scales are less time consuming to develop.

• They also allow for quantitative comparison.

5. Disadvantages of the rating scales

• More validity comparing workers ratings from a single supervisor than comparing two
workers who were rated by different supervisors.
• Different supervisors will use the same graphic scales in slightly different ways.
• One way to get around the ambiguity inherent in graphic rating scales is to use behavior
based scales, in which specific work related behaviors are assessed.

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 1. Elements of the rating scale
Elements for performance appraisal can include as follows.
• Quality of work
• Quantity of work
• Dependability
• Initiative
• Overall Output
• Attendance
• Attitude
• Cooperation
For each element, you can ask some questions.

2. Rating scales:
Rating scales of each element above can include scales as follows:
• Excellent – 5 points
• Good – 4 points
• Acceptable – 3 points
• Fair – 2 points
• Poor – 1 point

SELF APPRAISAL FORM

EMPLOYEE SELF APPRAISAL FORM

Review period: from ___to___

Name:
Department:
Position:
Job code:

Based on your job description and current work assignments, please answer questions as
follows:
1. Please list your most significant accomplishments or contributions during this appraisal
period.
2. Describe any factors, positive or negative, you feel may have helped or hindered in
meeting your formal or informal goals or objectives.
3. Have you successfully performed any new tasks or additional duties outside the scope
of your regular responsibilities? If so, please specify.
4. What skills do you have that you feel could be used more effectively?
5. Describe the areas you feel require improvement in terms of your professional
development. List the steps you plan to take and/or the resources you need to accomplish
this.
6. In your opinion, how does the work you perform align with or support the objectives of
the University Mission Statement?

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7. List 2-4 of your career goals for the coming year and indicate how you plan to
accomplish them.
8. Please evaluate yourself on the following factors: outstanding, very competent,
satisfactory, needs improvement
• Interpersonal Skills
• Time Management Skills
• Teamwork
• Innovation/Creativity
Please use this space to provide any additional comments.
Please attach additional sheets if necessary.
Employee Signature:
Date:

SELF EVALUATION FORM

Employee name:
Department:
Position:
Date:
Period of appraisal:

1. What are your main job responsibilities?

2. Which job responsibilities do you view as most important? Why?
3. Have any new responsibilities been added or removed from your job this year? If so,
what?
4. Have there been any special circumstances that have helped or hindered you in doing
your job this year? If yes, how did they affect your work, and what were the
circumstances?
5. List your most significant accomplishments or contributions during the past year. How
do these achievements align with the goals/objectives outlined in your last review?
6. Since the last review period, have you performed any new tasks or additional duties
outside the scope of your regular responsibilities? If so, please specify.
7. To which of the following factors would you attribute your professional development
since last year: offsite seminars/classes, onsite training, peer training, on-the-job
experience, better exposure to challenging projects, other. Please describe.
8. What would help you to do your job better and provide greater job satisfaction?
9. What are your goals for next year and what action will you take to accomplish these
goals?
10. What could your supervisor/manager do to support you in doing your job?
11. What additional support from your organization would help you do your job more
effectively?
12. What recommendations do you have that would make this a better place to work?
13. Indicate your career interests, including the type of assignment you would like next.

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SELF-ASSESSMENT QUESTIONS
1. Describe your job description. For each of the major responsibilities, what were the
expectations and outcomes?
2. What would you have liked to have done this year, but were unable to? Why?
3. What goals have you set for yourself during the next year? What types of projects
would you like to be involved in?
4. What types of developmental activities would you like to take advantage of (e.g.,
seminars, specific training classes, etc.)?
5. What kind of support and/or guidance would you like to see from your supervisor?
6. Describe any projects you have been responsible for which are not in your job
description. What results have you achieved?
7. Describe any changes you suggested and/or implemented this year that led to
improvement in your area (e.g., quality of work life, cost savings, efficiency).
8. What action(s) have you taken this year to gain a better understanding of the
organization, your unit/division/department, or your own job?
9. Give examples of departmental collaborative efforts that you were involved in this
year. What contributions did you make to the team?
10. Describe goals and/or developmental steps you set out to accomplish during this past
year. Of those, which did you accomplish?
11. What do you think has been your most important contribution to the department
and/or the organization? What are you most proud of?

1. DEFINITION OF SELF APPRAISAL

Self-appraisal is a method of performance appraisal that is done by employee (appraisee).

2. ADVANTAGES OF SELF APPRAISAL

• By having employees do some sort of self evaluation before the actual review meeting,
the review meetings can be shorter.
• If done properly and tactfully, encouraging employees to self evaluation or self appraise
at any time during the year, including around the actual review meetings, help convey the
message that the process of performance management and appraisal is a team effort, and
not something the manager does to the employee.
• Whey self appraisal is an accepted and integrated part of the performance management
process, it encourages employees to self evaluate throughout the year.
• Self-ratings are particularly useful if the entire cycle of performance management
involves the employee in a self-assessment.
• The developmental focus of self-assessment is a key factor.
• Approximately half of the Federal employees in a large survey felt that self-ratings
would contribute “to a great or very great extent” to fair.
• Self-appraisals are particularly valuable in situations where the supervisor cannot
readily observe the work behaviors and task outcomes.

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3. DISADVANTAGES OF SELF APPRAISAL

• Research shows low correlations between self-ratings and all other sources of ratings,
particularly supervisor ratings. The self-ratings tend to be consistently higher. This
discrepancy can lead to defensiveness and alienation if supervisors do not use good
feedback skills.
• Sometimes self-ratings can be lower than others’. In such situations, employees tend to
be self-demeaning and may feel intimidated and “put on the spot.”
• Self-ratings should focus on the appraisal of performance elements, not on the summary
level determination. A range of rating sources, including the self assessments, help to
“round out” the information for the summary rating.

RATING ERRORS IN PERFORMANCE APPRAISALS

Performance appraisals are subject to a wide variety of inaccuracies and biases referred to
as 'rating errors'. These errors can seriously affect assessment results. Some of the most
common rating errors are: -

Leniency or severity: - Leniency or severity on the part of the rater makes the
assessment subjective. Subjective assessment defeats the very purpose of performance
appraisal. Ratings are lenient for the following reasons:
a) The rater may feel that anyone under his or her jurisdiction who is rated
unfavorably will reflect poorly on his or her own worthiness.
b) He/She may feel that a derogatory rating will be revealed to the rate to
detriment the relations between the rater and the ratee.
c) He/She may rate leniently in order to win promotions for the
subordinates and therefore, indirectly increase his/her hold over him.

Central tendency: - This occurs when employees are incorrectly rated near the average
or middle of the scale. The attitude of the rater is to play safe. This safe playing attitude
stems from certain doubts and anxieties, which the raters have been assessing the rates.

Halo error: - A halo error takes place when one aspect of an individual's performance
influences the evaluation of the entire performance of the individual. The halo error
occurs when an employee who works late constantly might be rated high on productivity
and quality of output as well ax on motivation. Similarly, an attractive or popular
personality might be given a high overall rating. Rating employees separately on each of
the performance measures and encouraging raters to guard against the halo effect are the
two ways to reduce the halo effect.

Rater effect: -This includes favoritism, stereotyping, and hostility. Extensively high or
low score are given only to certain individuals or groups based on the rater's attitude
towards them and not on actual outcomes or behaviors; sex, age, race and friendship
biases are examples of this type of error.

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Primacy and Regency effects: - The rater's rating is heavily influenced either by
behavior exhibited by the ratee during his early stage of the review period (primacy) or
by the outcomes, or behavior exhibited by the ratee near the end of the review period
(regency). For example, if a salesperson captures an important contract/sale just before
the completion of the appraisal, the timing of the incident may inflate his or her standing,
even though the overall performance of the sales person may not have been encouraging.
One way of guarding against such an error is to ask the rater to consider the composite
performance of the rate and not to be influenced by one incident or an achievement.

Performance dimension order: - Two or more dimensions on a performance instrument

follow each other and both describe or rotate to a similar quality. The rater rates the first
dimensions accurately and then rates the second dimension to the first because of the
proximity. If the dimensions had been arranged in a significantly different order, the
ratings might have been different.

Spillover effect: - This refers lo allowing past performance appraisal rating lo

unjustifiably influence current ratings. Past ratings, good or bad, result in similar rating
for current period although the demonstrated behavior docs not deserve the rating, good
or bad.

Personal Prejudice: If the rater dislikes any employee or any group, he may rate them at
the lower end, which may distort the rating purpose and affect the career of these
employees.

Other factors that are considered as problems are

 Failure of the superiors in conducting performance appraisal and post
performance appraisal interview.
 Most part of the appraisal is based on subjectivity.
 Less reliability and validity of the performance appraisal techniques.
 Negative ratings affect interpersonal relations and industrial relations system.
 Influence of external environmental factors and uncontrollable internal factors.
 Feedback and post appraisal interview may have a setback on production.
 Management emphasizes on punishment rather than development of an employee
in performance appraisal.
 Some ratings particularly about the potential appraisal are purely based on guess
work.
The other problems of performance appraisal reported by various studies are:

* Relationship between appraisal rates and performances after promotions was not
significant.
* Some superiors completed appraisal reports within a few minutes.
* Absence of inter-rater reliability.
* The situation was unpleasant in feedback interview.
* Superiors lack that tact of offering the suggestions constructively to subordinates.
* Supervisors were often confused due to too many objectives of performance appraisal.

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PERFORMANCE APPRAISAL SYSTEM
OF NTPC

83
Earlier in the NTPC performance appraisal system was used till 2004. In this the
performance of the candidate was appraised by employing the method of grading system
for appraising the performance of the candidate. In this method certain categories of
abilities of performance are defined well in advance and candidates are put in a particular
category depending on their trait and characteristic. The categories are outstanding,
good, average, poor, and very poor or may be in terms of letters like A, B, C, D, E etc
and each letter have its own interpretation depending on a reporting officer using it. The
actual performance of the employee is measured against these grades.

In the grading system 5 grades was awarded that are excellent, good, average, below
average and unsatisfactory. In this most weightage was assigned to the special
achievement to the candidate during his work by the reporting officer at the time of
appraising the performance. Special achievement can be the ability in reducing the
expenses of a particular department, effective handling of the group.

Under grading system the assessed himself assess his performance. The performance
was evaluated by filling up the required information in the performance appraisal report.

The format of the performance appraisal report is as follows –

Name of the candidate
Designation
Area of responsibility
Job accomplishment
Special achievement
Obstruction encountered
Comment of the reporting officer is written after discussion with the candidate
Comment of the reporting officer without discussion with the candidate
Overall rating assigned

The appraisal will cover performance during the financial year. The format and the
process of appraisal will be the same for all functions and similar for all levels of
executives. The appraisal form is to be filled by all executives who have served for period
of at least 3 months in the Organization during the financial year.

Periodic Review –
The individual tasks will be set and reviewed on a monthly basis as far as possible.
However, in cases:

 Where a large element of work is of unforeseen nature and hence it cannot

be converted into pro- determined monthly targets.
 Where there is likelihood of frequent changes in the priorities that are set on
monthly basis.
 Where task forces are required to be constituted to meet certain exigencies
at work.

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  Where an individual's work is largely dependent on the work originating in
other departments.

The record of such tasks with respect to each individual will be maintained daily/weekly
in the format close to prescribed format and in-corporate in the periodic records. The
system will thus take care of both pre-determined and unplanned elements of work.

ANNUAL REVIEW

Periodic reports on performance for each employee should be correlated and form the
basis for arriving at the annual assessment. The manner in which the monthly/periodic
reports are translated into an annual assessment will be based on the relative priorities of
tasks/performance norms assigned and fulfilled and extent to which constraints were
overcome.
The appraiser should have a review discussion with the employee before making his
annual assessment.
In the annual report there is a provision for self-evaluation by the appraisee. This is
in view of the fact:

 Jobs at executive level have to be seen in totality rather than a sum total of
tasks, targets or norms and the appraisee just a chance to review his
performance and express his viewpoints.

 There are areas of discretion open to an executive, but not incorporated

formally into objectives such as spontaneously creative activities, which an
innovative executive might choose to do.

Annual appraisal in addition provides for assessment of certain attributes and abilities by
the appraiser on a three-point scale. Assessment of attributes provides a common
standard for comparison between employees (engaged in a vast variety of jobs). Both the
subjective and objective elements of a job are thus considered for assessment.

In the review discussions preceding the annual assessment the following may be
discussed between the reporting officer and the person assessed.

- Extent of achievement
- Reasons for shortfall
- Measures to avoid future setback in target achievement.
- Future action plan.

The extent, of achievement should be communicated to the appraise with respect to the
evaluation on periodic targets, and evaluation of executive abilities and attributes

Drawback Of the Grading System -

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 1. Grades were completely unknown to the candidate being appraised.

2. The result of the employee performance was also not known.

3. Promotion was the only reward, which was granted to the employee, and also it
was given after 3 years.

4. An element of dissatisfaction was present, as the reward for the performance was
seems to be not sufficient.

PERFORMANCE MANAGEMENT SYSTEM in NTPC

The System of Performance Appraisal for Board level positions and of executive’s two
levels below the Board level positions for Navaratna and Mini Ratna Companies has
been revised by Public Sector Enterprises Selection Board for having uniformity in the
Appraisal System.

NTPC has accordingly reviewed the existing Appraisal System of senior executive levels.
The revised Performance Management System having components of Performance
Planning, Monitoring, Review, and Development through involvement of the appraisee is
being introduced.

The system is to develop the competencies by involving the executive in setting targets
and identifying Key Performance Areas.

It aims to bring the concept of ownership and accountability on both appraise and
Appraiser to create mutual trust and confidence and to utilize the Performance
Management System for facilitating individual career development and bring
organization-wide HR intervention at senior levels to bridge competency gaps.

OBJECTIVES

The PMS system has certain objectives that are –

 To accomplish organizational goals through a system of performance assessment
linked to company's objectives.
 To facilitate fulfillment of individual aspirations and promotion of professional
excellence.
 To encourage a two-way communication process between the appraisee and the
Reporting Officer for bringing objectivity in Performance Appraisal System.
 To evaluate the potential of the executive to assume higher responsibilities along
the hierarchy.
 To involve the appraisee through various stages of Performance Management,
thereby reducing the Performance gaps.

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WEIGHTAGE ASSIGNED

The Performance Component as identified and measures evolved would have 50%
weightage in total appraisal.
Generic Managerial competencies exhibited by an appraisee while discharging duties
have been given 20% weightage in appraisal.
The Company’s concern for actualization of organizational Core Values is reflected in
the Performance Management and is assigned a weightage of 15% in appraisal.
The Performance Management System provides for appraisal of the executive’s Potential
to assume higher responsibility and has a weightage of 15% in appraisal.
The Performance Management System brings to focus important managerial attributes
and strikes a balance between ‘Performance’ and other aspects of managerial
talents/skills. Executives will have a set of Key Performance Areas to be identified
through discussion and achieve them during the performance period.

PERFORMANCE EVALUATION
The performance of the employees is evaluated both half yearly and annually.

Determination of KPA
Key Performance Areas (KPAs) are such critical areas of performance, which
though constitute few in number, would have major impact on Business/Targets of
the Units/Functions.

The input for identification of Key Performance Areas, Measures and allocation of marks
to different KPAs will have to be derived and worked out from the Annual Performance
Targets of the Project, Station, Division, Department and Function as the case may be.
Another source for KPAs are the functional role & responsibility being discharged as
Unit Head, Functional Head, Head of Department, etc. In addition, KPAs could be
arrived from the Business Plans for the Unit/Function, Corporate Plan, Recommendations
of Study Groups, Task Forces, R&M Plans, Long Term and Short Term Plans etc. These
are only indicative.

The various activities/sub-activities associated with KPAs should be separately

discussed including ‘Measures/Standards’ for each of them. Therefore a separate diary
for details and for monitoring periodically is preferred.
KPA-Measures should be preferably fixed on a reasonable range of performance target
instead of a fixed target, so that other factors affecting performance could be accounted
for and a reasonable assessment is made.

The range of performance measurement could be ‘Good’ which amounts to meeting the
‘Norm’, ‘Very Good’ would be a range of performance which would be superior to the
‘Norm’ but cannot be classified as ‘Outstanding’. The range of measure for ‘Outstanding’
is a stretch target which could be achieved by best efforts, optimal utilization of
resources.

87
Similarly, allotment of marks should be on a range linked to the extent of achievement of
targets whether it is in range of ‘Good’, ‘Very Good’ or ‘Outstanding’. For performance
below ‘Good’ also, marks are allotted commensurate with performance level.

Therefore, at the beginning of the year, it is essential to discuss the KPAs, Measures and
Marks awarded to different KPAs by the Reporting Officer with the appraise for 1st half-
year performance..
Similarly, at the beginning of 2nd half-year, the KPAs and Measures are assessed and
Marks allotted for the 1st half-year, and a new set of KPAs, Measures and Marks are
arrived at for 2nd half-year Performance.

ALTERATION OF KPAS UNDER SPECIAL CIRCUMSTANCES:

Circumstances may arise when due to the revision of business plans; certain KPAs may
lose relevance in spite of the best efforts put in by the appraisee, as the target may be
abandoned. For example, new project identified may be abandoned and or may be
relegated to lower priority after substantial activities undertaken.
Under such circumstances, the following system may be followed:

 If the KPA was substantially achieved before abandoning of the target/the area of
activities, then the appraisee should be assessed based on the results achieved by
him. Suitable remark should be reflected in the achievement column, against the
KPA and fair assessment of KPA may be made and marks awarded judiciously.

 In circumstances when a person’s responsibility gets changed due to

addition/deletion of certain assignment, then assessment should be carried out
and marks awarded to each of the KPA which loses relevance in the revised
responsibility, provided a minimum of 3 months has been spent in the appraisal
year. If the change is earlier to 3 months replace KPAs by new set of KPAs
commensurate with revised responsibility.

 In cases where the person is transferred out of the present role after completion of
3 months of the appraisal year then his Performance Management System should
be completed for that period before release. On his joining the new place of
posting, the KPAs for his new responsibility is again discussed and arrived at his
new place of posting.

 In case any KPAs lose relevance within three months of the commencement of
the relevant half-year the same may be replaced by a new set of KPAs by
following all the systems provided for evolving KPAs, measurement, etc.

First Half-Year Performance:

The System provides for the Reporting Officer (Appraiser) and the executive (Appraise)
to identify and agree upon a set of Key Performance Areas (KPAs) in brief at the

88
beginning of the first half-year. While identifying KPAs, actual ‘Measures’ for each
KPA is to be defined and written. The Measure could have Quantitative Targets, Time
Schedule for achieving KPAs fully/partially, Qualitative Improvements etc., based on the
nature of the KPA item. The KPA Targets may be having different weightage and limited
to 8 Key Performance Areas only. The idea is to enable the executive to focus on given
deliverables and not miss important critical areas. It should be more focused, concrete
and measurable.

They should be more than the “Norm” i.e. normal standard of performance expected. The
KPAs reflect ‘Stretch Standard’ which is in excess of “Norm”. The KPAs should be
‘SMART’ i.e. Specific, Measurable, Agreed (mutually arrived at by the appraiser and the
appraise), Realistic and Time-Bound.

It may undergo change owing to target accomplished, new targets coming up, change of
role etc. The review of KPAs and target setting for 2nd half-year is to be done jointly
upon completion of 1st half year and not later than 15th Oct.

The Performance Evaluation of 2nd half-year Performance is jointly undertaken on

completion of 2nd half year/Annual Performance year and not later than 15th April.
During the Performance Evaluation, the actual achievement is assessed against each KPA
and marks obtained against each KPA are indicated. The marks obtained are aggregated
at the bottom out of 50 marks as aggregate IB.

ANNUAL PERFORMANCE

The annual performance consolidates the 1st half-year and 2nd half-year Performance of
the appraise by aggregating Performance Marks obtained in half year.
The Annual Performance Marks out of 50 marks be computed based on the formula –
marks obtained*50/100
And marks obtained be indicated in the Box.
The marks so obtained out of 50 would be the marks secured for “Annual Performance”
in the achievement of KPAs and in the end appraisee and the Reporting Officer would
jointly endorse the Annual Performance by signatures.
All these recording and interpretation is done through SAP for which employees are
provided with ID and Password.

PERFORMANCE DISCUSSION

Performance discussion is one of the important activities to be undertaken by the

Reporting Officer with the appraise. The process of discussion needs to be given
utmost importance and carried out in a conductive atmosphere in order to remove any
anxiety or tension in the appraise. The performance discussion calls for creating
conducive atmosphere by putting the appraise at ease and hence exclusive time and
energy is to be spent on this important activity of discussion and feedback.

89
The Reporting Officer need to establish rapport with the appraise by spending initially 5-
10 minutes for discussion on positive aspects, accomplishments, understanding the
problems faced by the appraise and actions taken by him for overcoming the same.

The process of performance discussion is to enable the Reporting Officer to gather all
possible data with respect to performance viz., positive and negative aspects, situations
that contributed to the performance etc. Therefore, active listening is essential. The
Reporting Officer would facilitate the appraisee to reflect on the performance and on
related issues.

COMMENTS ON PERFORMANCE:

Part I related to Performance gets completed on filling up of Part ID by the Reporting

Officer at the end of Appraisal year. In Part ID the Reporting Officer offers comments
With respect to KPAs, Measures, and Achievements and sums up in brief the
Performance profile of the appraise in writing. It would provide a pictorial description on
the performance of the appraise for the year. While summarizing the performance, the
Reporting Officer would bring out summary of Key Performance Areas achieved in the
year; point out positive personality factors that were observed during the performance,
unfavorable situations that were encountered by the appraise during the period, favorable
conditions that prevailed in the situation and finally mention the negative personality
factors which were observed and which came in the way of achieving KPAs, if any. The
Reporting Officer should base the evaluation of the performance based on the data
collected during the performance period. It is therefore desirable to maintain a diary for
monitoring the performance and providing feedback from time to time during the relevant
performance period.

FEEDBACK:

Providing performance feedback is a delicate matter and the Reporting Officer should
lead the performance discussion to create a condition for providing Performance
Feedback in the best possible manner. The feedback should be focused on the specific
performance actions and not on the personality of the assesses. Similarly, feedback
should be a regular feature of performance review rather than reserving it for the end of
the performance year. Therefore regular performance monitoring review and feedback
should be carried out during each half year. The continuous feedback based on the facts
gathered during the period would provide adequate opportunity to the assesses to take
corrective steps during the remaining part of the performance period.
Feedback should be aimed more at improving and developing the person and should be
provided with sufficient descriptive way based on data collected in a non-hurting manner.

90
EFFECTIVENESS OF PERFORMANCE MANAGEMENT SYSTEM
IN NTPC

The basic aim of the new PMS was to create a performance appraisal system with
more objectivity and the system itself was created on a more scientific basis.

The new performance management system was designed keeping in view the
following objectives:

 To accomplish overall organizational vision & mission by linking individual

performance to company objective.
 To cascade company’s strategic goals to individual level.
 To promote professional excellence
 To encourage two-way communication between the executive & the reporting
officer & bring about transparency in the performance assessment process
 To evaluate the potential of the executive to assume higher responsibilities in the
organization
 To provide a source of talent for meeting the organization’s growth requirements
through a process of mapping the competencies & potential of executives
 To translate future skill requirements of the organization into individual
development plans.
 To identify high performers& recognize them through rewards & incentives, and
 To facilitate fulfillment of individual aspirations.

OBJECTIVE OF THE STUDY

I was provided rotation through out the HR department while doing the training in the
NTPC. During that it comes to the notice that the company changes the system for
appraising the performance of the employees in 2004 that is past five years.
The objectives of taking this project are –

 To compare the past system for performance appraisal with the new
performance management system in order to identify the drawback that are
overcome by the new system of performance that is PMS(performance
management system)
 To conduct the study on the step wise method involved in appraising the
performance in the PMS.
 To find out the satisfaction level of the employees and areas in which they are
not comfortable with the PMS and does not find it to be effective.
 To find out to what extant the employees find is method effective in appraising
there performance.
 Is there any improvement in their performance after the appraisal.
 To study the effectiveness of the new Performance Management System
(PMS)

91
WHAT IS A RESEARCH?

92
Research is the systematic and objective search for the analysis of information relevant to
the identification and solution of the specific problem. Research is science and a
systematic search for pertinent information on a particular topic.
In fact research is an act of scientific investigation.

TYPES OF RESEARCH

Broadly research can be divided into two heads – experimental and non-experimental.
Three essential components of experimental research are control, manipulation and
measurement.

Experimental method of data collection is ideal though not always possible because of
many research problems in the social science and education do not lend themselves to
experimental enquiry. A little reflection on some of the important variable in educational
research – intelligence, aptitude, personality etc will show that they are not
manipulability.

Even, if we avoid non-experimental method we cannot. Non-experimental research

posses only one component which is measurement. The researcher does not exercise any
control over the extraneous variable. He simply measures the effect on dependent
variable as they occur naturally- without manipulation. This means that this type of
research cannot establish casual relationship.

One of the common method of survey is non-experimental research is field survey

under which comes the sample survey. A sample survey is also a form of ex-post facto
research in which the researchers simply collect the data about certain psychological or
sociological characteristic of the sample that represents the known population.

The researcher is interested in knowing something about the whole population but cannot
study the whole population and he only studies the sample drawn from the populations.
The data are sought directly from the respondents by a systematic technique like a
questionnaire, which is the most popular are widely used technique of data
collection.

RESEARCH DESIGN

A researcher design is the overall plan or programme of research. It is the general blue
print for the collection, measurement and analysis of data. It includes an outline what an
investigator can do from writing the hypothesis and their operational implication to the
final analysis of data. Various uses of having a research design are as follows –

1. It provides answers to various questions such as:

 What is the object of research?
 What data are needed and how will these be gathered?
 What will be the time, place and sample of study?

93
  How will the data be analyzed and interpreted?

2. It acts as a standard and guidepost, which helps the researcher in

measuring his/her shortcoming and deviation in actual research later on.

3. It forestalls the possibility of a fruitless enquiry and act as an

insurance against future failure.

WHAT IS DATA?

Data constitutes the foundation of any analysis. Data is the collection of any number
of related observations.

Surveys are the most popular device of obtaining the desired data. A survey is a process
of collecting data from existing population units with no particular control over factors
that may affect the population characteristic of interest in study.

Data is the quantitative or numerical information, which is collected for future

analysis and interpretation in order to base decision on them.

SOURCES OF DATA

PRIMARY DATA SOURCE: -

Primary data source comprises responses to questionnaire and interviews conducted with
manager, supervisor of all department of the company.

SECONDARY DATA SOURCE: -

Secondary data source is the one that makes available data that are collected by some
other agency earlier. It comprises different books on the human resource.

PREPARATION OF QUESTIONNAIRE –
Much labor and care was taken in designing the questionnaire to maintain the brevity and
accuracy. The rule is to gather the data you need but not more than is needed,
therefore the number of questions was not more. The questions were such that which
evoked accurate and desired responses – which contained the information sought.

The questionnaire was in a structured format in which the questions were asked
from the respondents were very precise and concisely stated in advance, thus
maximizing standardization.

Question provided the subject with the multiple-choice response with four rating. In order
to design a good questionnaire all relevant books on the subject were consulted. All the
available articles and research work were taken into account. Exploratory discussion with
my guide, who had intimate knowledge of the subject, helped me never lose sight of the

94
hypothesis to be tested. Care was taken to relate all questions intimately to the final
objective of the investigation.

DETERMINATION OF SAMPLE

 POPULATON

It is defined in terms of elements, unit, extent and time. The demographic profile of the
respondents was a below:
Men or women employed in NTPC – PMI starting from grade E1 to E7 must have a
knowledge about PMS (performance management system) and their performance is
evaluated according to that PMS only. Nature of population was homogeneous therefore
a small sample was effective to represent it.

SIZE: - 50 employees

SAMPLING METHOD

Non random (or probability) samples

In which the probability of unit selection is unknown at any stage of the selection
process and the selection of unit is based on the judgment of the researcher was selected.
The method used was purposive sampling. These term means selection by design – by
choice and not by chance. The sample was chosen which was thought to be typical of the
universe with regard to the characteristic under investigation.
Such type of sampling was possible because of my guide who already had the necessary
required knowledge about the employees that made it easier to recognize typical items in
the universe.

COLLECTION OF DATA

When planning was completed, the survey moved into the field and undertook the
fieldwork that is distribution and collection of facts. The total number of questionnaire
distributed were 60 out of which only 50 were taken into analysis, few were not
considered due to incomplete data entry and few questionnaires were not filled.

ANALYSIS OF DATA

Researcher must breathe life into the cold data by skillful analysis and hence need
to follow three steps – editing, classifying and analyzing the data.
The content of the data obtained in a survey were carefully checked for any possible
inconsistencies and incompleteness. Then came the careful analysis – the data are then
coded and tabulated according to the rating in the dummy table. And then finally
tabulated data is interpreted with the help of spreadsheet in excel to reach a final
conclusion.

REASON FOR SELECTING SAMPLE SURVEY

95
Sample survey was preferred as the means of data collection to explore the existence of
the perception phenomenon, as a sample survey is extensive in scope. Use of a
representative sample in a survey reduce problems of sample bias and allow generalizing
the result to the present population. Data collection can take place in any setting. It is
assumed that the respondents replies generally remain uninfluenced by the setting in
which they are given. Data are obtained directly from the respondent.

LIMITATION

There are possibilities of the information being biased. Bias can be both deliberate and
non-deliberate. Non-deliberate bias crept in the form of approximation when respondent
were asked to supply information on some past event which they do not exactly
remember. Use of standardized response formats in many questions forced respondents to
subscribe to statements to which they do not fully endorse.

REASON FOR SELECTING PURPOSIVE SAMPLING AS THE SAMPLING

METHOD
It is very simple to draw and involve less fieldwork since those units can be selected
which possess the required knowledge on the topic of the investigation.

LIMITATION

It is not always reliable. The human mind was difficult in recognizing typical items.
This difficulty tends to distort purposive sampling. The Problem was faced as one does
not have the considerable knowledge about the population and this problem gets solved
with the help of my guide.

REASON FOR SELECTING QUESTIONNAIRE AS THE DATA COLLECTION

TECHNIQUE

It is relatively inexpensive mode of data collection.

It covers wider geographical area at a relatively low cost per respondent. It presents a
uniform stimulus to all respondent i.e. each respondent receives an identical
questionnaire. It enables the respondent to answer question – perhaps those of personal or
embarrassing nature – more willingly and accurately. It can be answered at the
convenience of the respondent

96
Questionnaire of executives

Q -1) Yearly evaluation of the performance of the candidate in the system is?

Very effective 8.33%

97
 Effective 66.67%
Fairly effective 25%
Ineffective 0%
0.8
0.7 66.67%
0.6
0.5
0.4
0.3 25%
0.2
8.33%
0.1
0%
0
Very effective Fairly ineffective
effective effective

In the current PMS (performance management system) the performance of the employee
is evaluated yearly and the response of employees point out that 8.33% consider it very
effective, 66.67% consider it effective, 25% consider it fairly effective and no one find it
as ineffective. So after analyzing I find out that maximum employees are in favour of
yearly evaluation of performance.

Q -2) Is there any scope present in the current performance management system for
accomplishing of the group objective?

High 8.33%
Reasonably well 50%
Partially 33.34%
Not sure 8.33%

98
 Not sure, High,
8.33% 8.33% High
Partially, Reasonably well
33.34% Partially
Reasonably Not sure
well, 50%

Every individual is interested in achieving its own individual objective so I tried to find
out that whether a particular system helps in achieving group objective and with
reference to the PMS employee response were as follow – 8.33% considered it high, 50%
considered it as reasonably well but 33.34% were partial and 8.33% were not sure. So,
maximum employee had positive view about the PMS regarding group objective.

Q -3) The manual way involved in filling the form in the performance management
system is?
Very effective 0%
Effective 58.33%
Fairly effective 41.67%
Ineffective 0%
Ineffective,
0.00%
Very
effective,
Fairly 0% Very effective
effective,
Effective
41.67%
Fairly effective
Effective,
58.33% Ineffective

99
In the PMS the employees are required to fill the PMS form manually which according to
employee 58.33% consider it effective, 41.67% consider it fairly effective and no
employee consider it very effective neither ineffective. Thus maximum response was
toward manual method of filling the form.

Q -4) The extent of involvement in setting the key performance area (KPA) in the
current performance management system for evaluating performance is?

High 33.34%
Satisfactory 66.66%
Average 0%
Not satisfactory 0%

70.00 66.66
% %
60.00
%
50.00
%
40.00 33.34
%
30.00 %
%
20.00
%
10.00
0.00 0.00
%0.00
% %
%
e
y

ry
ag
or

t
h

to
No sfac
ig

er
ct
H

fa

Av

ti
t is

sa
Sa

In the PMS the performance of the employees are evaluated with reference to the KPAs
(key performance area) which are decided and set after the discussion with the employees
and the employees views regarding the involvement in the PMS in setting KPAs are
66.66% consider it satisfactory, 33.34% consider it high but employee find it as average
and not satisfactory. Thus, the maximum employees are satisfied.

Q -5) The marking system adopted in the current performance management

system for evaluating performance is?
Very effective 8.33%
Effective 75%
Fairly effective 16.67%
Ineffective 0%

100
 0.8 75%
0.7
0.6
0.5
0.4
0.3 16.67%
0.2 8.33%
0.1
0 0%

e
iv
e

iv
iv

ct

ct
ct

fe

e
fe
fe

Ef

iv
ef
ef

ct
fe
y
ry

ir l

ef
Ve

Fa

In
Earlier in the NTPC grading system was in operation but now marking system have been
adopted and 75% employees consider the marking system to be effective and 16.67%
consider it to be fairly effective but 8.33% consider it to be very effective and no one find
it to be ineffective. Thus, maximum employees are satisfied with the change from the
grading system to the marking system.

Q -6) The time gap of 6 months provided in re-evaluating the target is?

More than sufficient 8.33%

Sufficient 58.33%
Reasonable 33.34%
Not sufficient 0%
0.7
58.33%
0.6
0.5
0.4 33.34%
0.3
0.2 8.33%
0.1 0%
t

0
n

le

t
ie

n
n

b
ic

ie
ie

a
ff

ic
ic

n
su

ff
so
ff

su
u

a
n

e
a

ot
R
th

N
re
o
M

101
The time gap provided for revaluating the target is considered to be
sufficient by 58.33% employees and 33.34% consider it to be reasonable but 8.33% find
it more than sufficient and no employee considers it as insufficient. As I observe than
more than 50% employees feels than time gap of 6 month is sufficient thus one can say
that PMS is effective with regard to this parameter.

Q -7) The performance management system facilitating the two way communication
between the reporting officer and candidate is?

Highly motivating 16.67%

Reasonably well motivating 83.34%
Not very well motivating 0%
Demotivating 0%

not very
well
demotivatin
motivating, highly motivating
g, 0%
0%
highly
motivating, reasonably well
motivating
16.67%
not very well
motivating
reasonably
demotivating
well
motivating,
83.34%

The two way communication involved in evaluating the performance of the candidate
found to be reasonably well motivating by 83.34% employees whereas 16.67% find it
highly motivating and it is neither not very well motivating nor demotivating. As in the
view of the employees with regard to the flow of communication between the reporting
officer and the employee is rated high, thus one can say that the PMS facilitates two way
communication.

Q -8) Does the competency identify of the candidate in the performance

management system correlates with the work requirement?

Absolutely 16.67%
Partially 66.67%
Reasonably well 16.67%
Not realistically 0%

102
 80.00% 66.67%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00% 16.67%
17%

Reasonably
Partially
0.00%

realistically
Absolutely
0%

Not
well

66.67% were in favour that the identification of the competencies for appraising the
performance of the candidate in the PMS correlates with their work requirement while
16.67% consider it to be absolutely and reasonably well and no candidate find it to be not
realistically. As one observe that more than 50% employees find the PMS to be effective
in the identification of the competencies so they are satisfied with the PMS with respect
to this parameter.

Q -9) Does the key performance area (KPA) setting in the performance management
system correlates with your priority for work?

Absolutely 25%
Partially 41.67%
Reasonably well 25%
Not realistically 8.33%
45.00% 41.67%
40.00%
35.00%
30.00% 25.00% 25%
25.00%
Series1
20.00%
15.00%
8%
10.00%
5.00%
ll

l ly

0.00%
e
ly

w
lly

a
te

c
ly
ia

ti
lu

is
b
rt
so

a
a

al
n
P
b

re
o
A

t
a

o
e

N
R

103
41.67% employees hold a partial view regarding the correlation of KPAs with their work
priority whereas 25% employees consider it absolutely and realistically well and 8.33%
consider it to be not realistically. PMS is not effective with regard to the parameter of
correlation of KPAs with their priority for work as less number of employee hold a
positive view about it.

Q -10) Does the identification of the potential of the candidate in the performance
management system correlates with the work requisite?

Absolutely 16.67%
Partially 50%
Reasonably well 33.34%
Not realistically 0%

60.00% 50.00%
50.00%
40.00% 33%
30.00%
16.67%
20.00%
10.00% 0%
ly

l
el
te

ly

0.00%
w
lu

ly
al

y
so

al
rti

bl

tic
Ab

Pa

na

is
so

al
ea

re
R

ot
N

In the PMS the potential of the candidate is identified for the purpose of the evaluation of
the performance and 50% of the employees hold a view that it partially correlates with
their work requirements and 33.34% consider it to be reasonably well but 16.67% find it
to be absolutely and no employees was in favour of treating as not realistically. Thus,
after analyzing it one can say that the potential of the candidate correlates with the work
requirement to some extent.

104
 FACTS AND FINDINGS

1) Are you aware with the performance appraisal management system in

your organization?

a).80% Yes b).20% No

AWARENESS ABOUT PERFORMANCE

APPRAISAL
NO
20%

YES
80%

Interpretation

According to the data 80% employees are totally aware of the performance appraisal
system.

2) In your opinion what is the degree of transparency in the appraisal

system?

a).40% Low b).40% moderate c).20% high

105
 DEGREE OF TRANSPARENCY IN
APPRAISAL SYSTEM

HIGH
20%
LOW
40%

MODERATE
40%

Interpretation

Most of the employees are not satisfied with the degree of transparency in performance
appraisal.

3) Are you satisfied with the present appraisal system?

a).70%Yes b).10% No c).20% No comment

SATISFACTION WITH PRESENT

APPRAISAL SYSTEM
NO
COMMENT
20%

NO
10%
YES
70%

Interpretation

106
In NTPC, 70% employees are satisfied by present appraisal system used, i.e. Performance
Management System.

4) Do you get any motivation by the appraisal?

a). 80%Yes b).10% No c).10%No comment

GETTING MOTIVATION BY
APPRAISAL
NO
COMMENT
NO 10%
10%

YES
80%

Interpretation

On basis of above data 80% employees are highly motivated by present appraisal
system.

5) Appraisal should be done:

107
 a).40% Annually b).60% Half-yearly

APPRAISAL SHOULD BE DONE

ANNUALLY
40%

HALF
YEARLY
60%

Interpretation

60% employees say that performance appraisal should be done half- yearly. This will
help to get better hold on the employee and bring their efficiency.

6) Do you think that different departments should have different appraisal

forms?

a).50% Yes b).30% No c).20% No comment

108
 DIFFERENT DEPT. SHOULD HAVE
DIFFERENT APPRAISAL FORMS
NO
COMMENT
20%

YES
50%
NO
30%

Interpretation

According to above data 50% employees say that different department should have
different appraisal form.

7) Do you think there is clarity in the appraisal system?

a).40% No b).60% Yes

CLAIRITY IN THE APPRAISAL SYSTEM

NO
40%

YES
60%

Interpretation

109
60% employees say that there is clarity in the performance appraisal system.

8) Is direct feedback associated with the appraisal system?

a).10% Yes b).10% No c).80% No comment

FEEDBACK ASSOCIATED WITH

APPRAISAL SYSTEM

YES
10% NO
10%

NO
COMMENT
80%
Interpretation

Most of the employees don’t want to say anything regarding this.

9) Do you know your job profile very well?

a).95%Yes b).5% No

110
 JOB PROFILE VERY WELL
NO
5%

YES
95%

Interpretation

Most of employees know very well about the job profile.

10) Do you talk freely about your performance appraisal with your boss?
a).60% Yes b).20% No c).20% No comment

TALK FREELY WITH BOSS

ABOUT PERFORMANCE
NO
APPRAISAL
COMMENT
20%

NO YES
20% 60%

Interpretation

111
60% employee talk freely about performance appraisal with their boss.

11) Should counseling method be used after completion of the appraisal

cycle/period?

a).80%Yes b).20% No

COUNSEILING METHOD USED AFTER

COMPLETION PERFORMANCE APPRAISAL
NO
20%

YES
80%

Interpretation

80% employee says counseling method should be used after completion of the
performance appraisal.

12) Do you think that there is a need of training to the appraiser?

a).70%Yes b).30% No

112
 NEED OF TRAINING TO THE APPRAISER

NO
30%

YES
70%

Interpretation

According to the 70% of employees there is a need of training to the appraiser.

13) Are you satisfied with the monetary linkage of appraising system, as a
bonus?
a).60% Yes b).40% No

SATISFACTION WITH MONETARY

LINKAGE OF THIS SYSTEM

NO
40%

YES
60%

Interpretation

60% employees are satisfied with monetary linkage of the appraisal system
LIMITATION OF THE STUDY

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I conducted the assigned task with full effort and dedication but still the extent of my
study was limited.

Questionnaire was used as a measure of data collection for the study. I selected the
sample size of 50 employees.

Everybody did not respond to the question properly. Some respondent misinterpreted
the question, omitted essential items and gave the answer casually and it was
practically impossible to return such incomplete and unsatisfactory questionnaire to
the respondent for the correction.

This technique does not provide a check on the honesty and reliability of replies, if the
respondent gives wrong replies, the investigator cannot know what the truth is.

This technique was inappropriate when spontaneous answers were wanted, where it
was important that the views of one person were obtained, uninfluenced by the discussion
of others. The major response for the non-response was that the respondents refused to
fill the questionnaire. This is a hard core reason no matter how much effort one puts in
completing the return, a source of bias always persist.

At one stage in this technique the response rate being very low I was left in a dilemma
whether the return can be generalized to the whole population or they merely represent
the characteristic of the people who have returned the questionnaires.

Despite these limitations, the data collection through questionnaire fulfills the
purpose of the study.

SUGGESTIONS

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After studying the company’s PMS system we have drawn some measures for more
effective and result oriented working of the PMS policy. Following are some suggestions,
which were drawn after the study.

1. To be made truly objective

2. Implementation should be in the true spirit of PMS
3. There is a strong need for enhanced transparency
4. There should be proper and complete feedback
5. A copy of PMS shall be given to the employee after signature of the HOD
6. Marks should be integrated with other deptt. where work is related with outcomes
7. The targets of reporting officer & subordinates shall be clearly identified/
separated. It is felt that there is no difference in the targets.
8. Individual, reporting officer & reviewing officer all sit together for PMS instead
of the present two tier system
9. Matching of PMS of individual & reporting officer
10. Moderation may be on scientific manner
11. To be followed in letter & spirit after coming out from past knowledge and
experience of old PMS.
12. Prepare Do’s & Don’ts for new PMS
13. Prepare the table of significant changes to make it more appreciative by all
14. The ideology needs to translated to practices in the organization
15. In spite of defined KPA/ KRA marks are given on % of outstanding criteria
(which is 20% presently). Does this mean only 20% employees in NTPC are
outstanding & balances are less? This needs to be changed for the proper
implementation of PMS system in true spirit.
16. PMS is fine but promotions based on this is not
17. Once final scores are given no one tell/ communicates the person cutting of
scores.

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 RECOMMENDATIONS

Earlier in NTPC the method employed to appraise the performance of employees was
grading system but now marking system has been implemented in the PMS (performance
management system). That is why we conducted a survey through the means of filling the
questionnaire by the employee to identify to what extent it is effective and after analyzing
the viewpoint and feedback of the employees we found it to be effective. Though there
are certain shortcomings in the system that can be overcome to some extent by making
certain changes in it.

So few of my suggestion are as follows –

 Presently in the PMS the performance of the candidate is evaluated annually as a
result employees are not highly satisfied with it so the evaluation can be
conducted half yearly so that employees can get to know the area in which they
are lacking so that get the training at the correct time and also get to know their
productivity and efficiency as a result their performance improve at a faster rate.

 The PMS should provide sufficient scope to the employee for accomplishment of
their group objective along with their individual objective by evaluating their
performance in a group because achievement of group objective is also
important.

 The annual way of filling the form or performance report in the current PMS
should be replaced by online way of filling the form as it has few inherent
advantages such as less time consuming, efficient and effective way of utilizing
resources like human being, stationary, less paper pilling etc.

 The competencies identified by the reporter which correlates with the work
should be set after detailed analysis of the work and in consultation with the
employee and there should be frequent evaluation and regular discussion with the
employee to identify any flaws in the competencies and thereby make the
suitable changes.

 In the PMS potential of the candidate identified should correlates with the work
requirement and in order to accomplish it the work should be assigned to the
individual by identifying his potential, interest area so that there is not much
wide gap between the potential possessed and requirement of the work and as a
result of the correlation the performance of the candidate improves, moral level
will be high and he will be satisfied with the work which is beneficial for the
organization for accomplishment of its overall objective.

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 CONCLUSION AND SUMMARY

Knowing how people perform in their work that is their performance level and
identifying those who have for handling the work more effectively are essential for
any organization. Without such knowledge, management cannot take the decision
regarding the need for training, promotion neither for transfer within the particular branch
or across the branches of the organization. In other words, management need to appraise
the performance in order to take the decision regarding the rewarding the employee in
order to motivate him or taking the corrective actions.

Earlier in the NTPC marking system was used for appraising the performance of the
candidates. The system of grading suffers from few of the drawbacks such as the grades
were completely unknown to the candidate even result was not reveal to the candidate
and promotion was the only reward provided which is also get due after the three year of
service. As a result employees were dissatisfied with it. In order to overcome these
limitations NTPC took the initiative and call a external consultancy “AT KEARNEY” to
devise a new system for appraising the performance. The consultancy devises the
performance management system known as “PMS” which was bought into practice in
2004. This PMS system overcome the drawback of the previous method of
appraising the performance and even has one major advantage that is that it
facilitates the two-way communication between the reporting officer and the
candidate.

In order to know that whether employees are satisfied with the PMS system or not, I
conduct a survey with the help of the questionnaire and after analyzing the response of
the employees to the question I find out that mostly all the employees are satisfied with
the PMS system.

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 BIBLIOGRAPHY

BOOKS –

 “Personnel Management” by C.B Mamoria and S.V. Gannker.

 “Personnel Management” by Edwin Flippo.

 “Appraising and Developing Managerial Performance” by T.V. Rao.

 “Human Resource Management” by L.M Prasad.

 “Management of Performance Appraisal” by M.L Monga.

 “Performance Appraisal” by Martin Fisher.

 “Human Resource Management” by V.S.P. Rao.

JOURNALS AND MAGAZINES -

 NTPC Weekly News Bulletin

REFERENCES-

 www.citehr.com

 www.pmintpc.com

 http://en.wikipedia.org/wiki/Performance_appraisal

 www.businessballs.com

 http://www.performance-appraisal.com/intro.htm

 http://www.performancemanagementguide.com/

 www.openlearningworld.com

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