Objective:

Mecon has recently moved from Performance Appraisal System (PAS) to Performance
Management System (PMS). The old system of Performance Appraisal in MECON was a
mechanism of evaluation of employees performance based on his/her past performance in
the complete financial year. There was no detailed feedback given to the employee about
his/her areas of improvement. The above process was unsuccessful in building the
competencies of employees and measuring their potential thereby leading to no alignment of
individual performance with strategic goals of the Organization.
The objective and rationale behind our study is as follows:
Primary Objective:

To study the performance appraisal of employees at Mecon Limited.

Secondary Objective:

To study the purpose of performance appraisal conducted at Mecon

Limited.

To study the methods and processes of the performance management systems at

Mecon Ltd.

To study the effectiveness of performance appraisal and methods in the company.

To trace the drawbacks in prevailing system and suggest the latest methodology with
respect to same.

To support in bridging the gap between current performance and desired performance.

SCOPE OF THE STUDY

The management can identify the employee's opinion of the existing performance appraisal
system.
The study can be used to develop the present appraisal system more effective and
satisfactory among employees.
It could be used to recognise training and development needs of the individual and the
organization as a whole

LIMITATIONS OF THE STUDY

Basic limitations faced while preparing the study were:
The Companys policy of not revealing some data and information for obvious reasons,
which would have been very much useful for the report.
Some of the employees were reluctant to share their opinion.
Few employees sometime felt uninterested and disturbed, as they were busy in their job.
Sometimes it was difficult to collect data from their files, because important files are kept
in volt for safety.
This report was prepared in limited time.

PMS System at Mecon Limited

1.

Need for Change

Due to the lack of proper feedback given to an employee, lack of

developmental steps for his/ her areas of improvement along with no
alignment of individual performance with strategic goals of the
Organization, it became mandatory to shift from the old system of
Performance Appraisal to the new system of Performance Management.
Moreover, there have been a lot of changes in the Industrial scenario
which have brought revolution in the Information Technology thereby
reducing the paper work. In view of the above, a need has arisen to
implement an online system of Performance Management. Following are
the changes introduced in PMS w.r.t. PAS
Performance
Appraisal System (PAS)

Performance
Management System (PMS)

Paper Form

Online System

No clear objective of what is expected out of

the employee at the start of financial year

Key Result Areas (KRAs) and Key Performance

Indicators (KPIs) give a clear view of what is expected
out of the employee at the start of financial year, which
will be dynamic in nature and may be modified every
quarter

No. objectives measured

Specific and Measurable KPIs

No activity plan

Activity plan against each KPI mentioning the time

allotted in executing the KPI

No self-assessment

Self-assessment

No recording of contribution towards

Department/ Organization

Contribution towards Department and Organization is

measured for each employee

Attributes evaluation only

Evaluation of attributes, competencies, ability and

values in an employee in the form of potential

Method of evaluation is Graphic Rating Scale

Method of evaluation is Management by Objectives

(MBO) for work performance evaluation and
Behaviorally Anchored Rating Scale (BARS) for
potential evaluation

No Performance Diary

Performance Diary to record the highlights of/

constraints in performance to remove spillover effect

No Performance Review Discussions

Performance Review Discussions to be held twice a

year

Reporting and Reviewing Officers assessment

interdependent

Independent assessment of Reporting and Reviewing

Officer

No identification of Exceptional Performers

(EP)/ Low Performers (LP)

EP and LP are identified in terms of employees' work as

well as their future ability

No system of appeal against grade obtained

Appeal can be made against grade obtained in PMS to

the Appellate Authority

Limited Transparency

Transparency is envisaged

Single Tier System

4 Tier System with

Performance Grid

No addressing of areas of improvement

Areas of strength and areas of improvement clearly

communicated

Only one Reporting Officer, Reviewing Officer

and higher Authority in all cases

Multiple Reporting Officer, Reviewing Officer and higher

Authority for employees who get transferred to other
location/ Department for a period more than 4 months

5.

final

grade

obtained

from

Scope of PMS

Evaluation of overall performance of employees through PMS is extended

to all regular executive employees of MECON below Board Level i.e.
between grades E-0 to E-9. The period of evaluation of overall
performance of employees through PMS is from 1 st April to 31st March of
every year i.e. financial year wise.

7.

Clusters of PMS

The overall performance of the employee will be evaluated by classifying

the employees in one of the below mentioned clusters across grades:
Cluster A:

E0 E2

Cluster B:

E3 E4

Cluster C:

E5 E6

Cluster D1:

E7 (DGM)

Cluster D2:

E7 (DGM I/c and Jt. GM)

Cluster E:

E8 - E9

With this classification, the method of evaluation of overall performance of

employees in different clusters will be different.

8.

Tiers of PMS

The evaluation of overall performance (in the form of PMS Grade) of an

employee for capturing his/her work performed in the financial year as
well as his/her future potential, is based on the following parameters
(called as Tiers of PMS):
1. Individual Tasks, duties and responsibilities: Performance of an
employee with respect to his basic duties, responsibilities, tasks and
targets based on KRAs and KPIs.
2. Departmental Goals: Employees contribution
Department for serving its predefined goals.

towards

the

3. Organizational Goals: Employees contribution towards achieving

Organizational Goals or towards work performed for the
Organization over and above his/her basic duties and
responsibilities.
4. Individual Potential: Potential of an employee evaluated in terms
of standard behavioural attributes and competencies; ability and
values expected out of an employee with respect to his/her JD.
The first three tiers of PMS (Sl. No. 1,2,3) evaluates the Performance (in
the form of Performance Index) of an employee which signifies his/her
actual work performed in the financial year and the last tier of PMS (Sl. No.
4) evaluates the Potential (in the form of Potential Index) of an employee
which signifies the latent qualities or abilities in the employee for his/her
future growth, in turn facilitating the Organizational growth.

9.

Weightages of Tiers across Clusters

For evaluation of overall performance of an employee in terms of tiers of

PMS, all the tiers have been assigned certain weightages which varies
across different clusters (because of different job descriptions &
accountabilities of employees across different clusters) such that the
weightage from Contribution towards Individual Duties decreases as we
move
up
the
hierarchy
and
similarly
Contribution
towards
Department/Organization increases as we move up the ladder. Following is
the table showing weightage/marks of the tiers across which the
employee would be evaluated, depending on the Cluster to which he/she
belongs:

Clusters across Grades

Parameters
of
Evaluation

Significance

Individual
Duties
Contribution
towards
Department
Contribution
towards
Organization

Potential

Captures
actual work
performed in
the financial
year

Captures
attributes and
competencies;
ability
and values

Total

D1

D2

E0-E2

E3-E4

E5-E6

E7
(DGM)

E7 (DGM I/c
& Jt. GM

E8E9

45%

40%

35%

20%

10%

10%

15%

20%

20%

35%

40%

20%

10%

10%

15%

15%

20%

40%

30%

30%

30%

30%

30%

30%

100%

100%

100%

100%

100%

100%

Table 1
The weightage/marks allotted to Tier 4 (Potential) remains at a constant
value across different clusters as the behavioural attributes and
competencies; values and ability of an employee measured in this tier are
required at the same level in all the clusters. However, the type of
behavioural attributes and competencies required in an employee differs
across different clusters.
For example: An employee in E2 grade will be evaluated out of 45 for
Individual Duties and out of 10 for Contribution towards Organization
whereas an employee in E7 grade will be evaluated out of 20 for
Individual Duties and out of 15 for Contribution towards Organization.
However, employees across all clusters will be evaluated out of 30 for the
Tier 4 i.e. Potential.

10. Reporting matrix

The overall performance of an employee would be evaluated by the
concerned Superior Officers i.e. Reporting Officer (R1), Reviewing Officer
(R2) and Higher Authority (R3). Each of these R1/R2/R3, who are
authorized to give marks to an employee for evaluation across each tier of
PMS, are decided as per the following reporting matrix:
Cluster of employees
across grades

Reporting Officer (R1)

(Minimum Level)

Reviewing Officer (R2)

(Minimum Level)

Higher Authority (R3)

(Minimum Level)

A: E0-E2

Manager

Sr. Manager

AGM I/c / DGM I/c

B: E3-E4

AGM

DGM / DGM I/c

Jt. GM/ GM/ ED

C: E5-E6

DGM

DGM I/c/ Jt. GM

Jt. GM/ GM/ ED

D1: E7 (DGM)

DGM I/c / Jt. GM

Jt. GM / GM

GM / ED

D2: E7 (DGM I/c & Jt. GM)

GM

GM/ ED

ED/ Director

E: E8-E9

Director

CMD

CMD

Table 2
If in a particular case, minimum level officer is not available in the
Department, then the officer in the next higher grade will function as the
minimum level officer.

11. Evaluation by Superior Officers (R1/R2/R3) across

Clusters
For evaluation of overall performance of an employee, all the Superior
Officers i.e. Reporting Officer (R1), Reviewing Officer (R2) and Higher
Authority (R3), decided as per the Reporting Matrix, are authorized to give
marks for each of the tiers of PMS, as per Table 1. But the consolidated
score of any particular tier of an employee, based on the marks given by
R1/R2/R3 in that tier, will be evaluated as per the following weighted
average of marks given by R1/R2/R3:

Clusters across Grades

A

D1

D2

E0 - E2

E3 - E4

E5 - E6

E7
(DGM)

E7 (DGM I/c
& Jt. GM

E8 E9

Reporting Officer (R1)

50%

50%

40%

40%

40%

40%

Reviewing Officer (R2)

30%

30%

30%

30%

30%

30%

Higher Authority (R3)

20%

20%

30%

30%

30%

30%

Weightage of marks given

by

Table 3
For example: An employee in E2 grade (Cluster A) will be evaluated out of
45 for Individual Duties by each of the Superior Officers R1/R2/R3, as per
Table 1. But the consolidated score of Tier 1 (Individual Duties) for that
employee will be evaluated by obtaining the weighted average of marks
given by R1/R2/R3, as per Table 3. Similar process will be followed for
evaluation of consolidated scores of all other tiers of that employee.

12. Method of Evaluation

Since the first three tiers of PMS measures the actual work performance of
an employee throughout the financial year, the method of evaluation of
performance of an employee in each of these tiers (1,2,3) has to be in
absolute terms i.e. the employees would be rated with say 95% marks for
achieving 95% of their targets. Therefore, an evaluation for marking the
actual work performance of an employee, giving due weightage to his
contribution towards individual duties, department and Organization, in
absolute and definite terms, can be through the following method of
Management by Objectives (MBO):
12.1 Management By Objectives (MBO)
It is a set of specific and measurable objectives, mutually agreed upon by
both the Management and employees, which are to be accomplished by
the employees. It is a participative approach directed towards
achievement of Organizational and individual objectives.
In this process, the employees get strong input in identifying their
objectives, time lines for completion along with constant feedback of their
performance by the Superior Officers to fulfil those objectives. This
method increases the Organizational performance by aligning goals of the
Organization with the employees performance.
Thus, Management by Objectives (MBO) aims to serve as a basis for
(A)Greater efficiency through systematic procedures,
(B)Greater employee
motivation and commitment through participation in the planning
process
(C)Planning for results instead of planning just for work

All the objectives identified, by mutual discussion between employee and

R1, in the form of KRAs, KPIs and Departmental Goals would be evaluated
by each of R1/R2/R3 depending on the allotted weightage to each of the
KPIs/Departmental Goals in absolute terms only. Each of the R1/R2/R3 can
give integral or fractional marks to the employee for evaluation across
Tier 1 to Tier 3, through this procedure.
Due to the dynamic nature of business of our organization, KRAs, KPIs and
Departmental Goals may be modified, added or deleted every quarter but
the total weight of the corresponding tier should remain constant.
Similarly, since Tier 4 measures the potential of an employee in terms of
behavioural attributes and competencies; ability and values expected out
of him/her, the method of evaluation of performance of an employee for
Tier 4 has to be in terms of setting a scale/standard rating points.
Therefore, an evaluation for marking the potential of an employee can be
through the following method of Behaviourally Anchored Rating Scale
(BARS):
12.2 Behaviourally Anchored Rating Scale (BARS)
It is a method of mapping the behaviour possessed by an employee in the
form of attributes and competencies; values and ability of an employee to
certain scale points ranging from
1 to 5.
This method is used only for Tier 4 evaluation where the potential of an
employee will be measured by constructing certain bars.
The employees across all clusters would be evaluated by the Superior
Officers R1/R2/R3 for Tier 4 in terms of the following rating scale called
BARS:
Points

Explanation

Exceeds expectations

Completely meets expectations

Meets expectations most of the time

Rarely meets expectations

Does not meet expectations

Table 4

13. Provision of Multiple R1/R2/R3 for evaluation

During the transfer of an employee to other Location/Section, the Superior
Officers (R1/R2/R3) as well as the targets set by them might change. Due
to this, the overall performance of the employee with his contribution in
all Section(s)/Location(s), to which he/she is transferred, is not captured.
Therefore, in order to give due weightage to the targets set by each of the
superior officers and their evaluation for the same, a need has arisen for
the provision of multiple R1/R2/R3 for proper and complete evaluation of
all aspects of employees performance.
In case of transfer of an employee to other Location/Section for a period
more than three months in a financial year, such that any of the R1/R2/R3
changes, the PMS form would be filled by all the concerned R1/R2/R3 who
would be giving marks for all the tiers for the employee.
In case of such transfers for more than three months, the KRAs & KPIs
(used in Tier 1) and Departmental Goals (used in Tier 2), and their
corresponding weightage, for which the employee is to be evaluated, are
to be mandatorily modified, added or deleted by the new Department (by
discussions between employee, Reporting Officer and Section In-charge of
both the previous Department and the new Department) such that the
total weight allotted to the tier should remain constant. The total
weightage for old set of KRAs, KPIs and Departmental Goals set by the
previous Department of the employee should be equal to the total
weightage for new set of KRAs, KPIs and Departmental Goals set by the
new Department of the employee. The evaluation of new set of KRAs, KPIs
and Departmental Goals would be carried out by the concerned R1/R2/R3
who has written those KRAs, KPIs and Departmental Goals.
Therefore, in case of multiple R1/R2/R3, the final marks given by each set
of R1/R2/R3 in Tier 1 & Tier 2 will be the combined marks given by all the
respective R1/R2/R3 in Tier1 & Tier 2. For evaluation across rest of the
tiers which are not linked to KRAs/ KPIs/ Departmental Goals, the final
marks given by each of R1/R2/R3 in Tiers 3 & 4 will be the average of the
marks given by all the respective R1/R2/R3 in Tiers 3 & 4.
For example: An employee in E2 grade (Cluster A) has to be evaluated out
of 45 for Individual Duties and out of 15 for Contribution towards
Department by each of the Superior Officers R1/R2/R3, as per Table 1. But
if due to the transfer of an employee to other Location/Section for a period
more than three months in the financial year such that there are two
R1/R2/R3 each for the evaluation of the employee, the KRAs & KPIs (used
in Tier 1) and Departmental Goals (used in Tier 2), and their corresponding
weightage, for which the employee is to be evaluated, are to be

mandatorily modified, added or deleted by the new Department (by

discussions between employee, Reporting Officer and Section In-charge of
both the previous Department and the new Department) such that the
total weight allotted to the Tier 1 (i.e. 45) and Tier 2 (i.e. 15) for that
employee should remain constant. The total weightage for old set of KRAs,
KPIs and Departmental Goals set by the previous Department of the
employee should be equal to the total weightage for new set of KRAs, KPIs
and Departmental Goals set by the new Department of the employee i.e.
old set of KRAs & KPIs in Tier 1 should be allotted a total weight of 22.5
and new set of KRAs & KPIs in Tier 1 should be also allotted a total weight
of 22.5, in turn making the total weight of Tier 1 as 45 for that employee
in Cluster A. Similarly, old set of Departmental Goals in Tier 2 should be
allotted a total weight of 7.5 and new set of Departmental Goals in Tier 2
should be also allotted a total weight of 7.5, in turn making the total
weight of Tier 2 as 15 for that employee in Cluster A.
For Tier 1 & Tier 2 evaluation, the first set of R1/R2/R3 will be giving marks
for the KRAs/ KPIs/ Departmental Goals set by them and the next set of
R1/R2/R3 will be giving marks for the KRAs/ KPIs/ Departmental Goals set
by them. Once both set of R1/R2/R3 have given their marks for Tier 1 &
Tier 2 then only the consolidated score of Tiers 1 & 2 can be evaluated.
However, for evaluation across Tiers 3,4,5 (which are not linked to KRAs/
KPIs/ Departmental Goals) the consolidated score of each of these Tiers
3,4,5 will be evaluated by the average of the marks given by first set of
R1/R2/R3 and next set of R1/R2/R3.

14. Explanation of Tiers of PMS

14.1

Tier 1: Individual Duties

A process of evaluation of performance of an employee with respect to

his/her basic duties, responsibilities, tasks and targets based on certain
pre-decided KRAs and KPIs.
Firstly, KRAs and KPIs along with the weightage to be assigned to each of
the KPI, are decided by the Reporting Officer by having a mutual
discussion with the employee at the start of the financial year.
The weightage to be assigned to each of KPIs should be strictly in line with
Table 1 i.e. the total of weights assigned to each of the KPI should match
with the weightage allotted to Tier 1 and cluster to which employee
belongs. For example, if an employee in E-5 grade (cluster C) has 10 KPIs,
the total weight assigned to all 10 KPIs taken together should be 35 only.

In this regard, employees are also provided with a tool of Activity Plan
wherein they can mention the details of how each of the KPIs have to be
achieved by the employee as well as the time allocated to execute the
KPIs.
Due to the changing needs and business of our organization, KRAs and
KPIs may be modified, added or deleted every quarter but the total weight
of the Tier 1 should remain constant.
Secondly, after freezing KRAs, KPIs and their weightages, the employee
will be providing self rating depending on the allotted weightage to each
of the KPIs, as a self appraisal, based on how one thinks he/she has
performed the basic duties and responsibilities.
Thirdly, after the self appraisal, each of the Superior Officers (R1/R2/R3)
will be evaluating one by one the performance of the employee for Tier 1,
on the same rating depending on the allotted weightage to each of the
KPIs such that R1 & R2 cannot see marks given by either of them but R3
can see the marks given by both R1/R2. The order of evaluation by the
Superior Officers will be R1-R2-R3.
Marks given by employee or any of R1/R2/R3 can be either in integral
form or fractional form.
The employee can provide his remarks for each of the KPIs giving
justification of the self rating. Similarly, each of the Superior Officers
(R1/R2/R3) can also provide their valuable comment on the rating
provided by them, as a whole.
Once the marks given by R1/R2/R3 are frozen, as per Table 1, weighted
average for marks given by R1/R2/R3 (as per Table 3) can be computed
for each of the KPIs by the system and final consolidated score
corresponding to Tier 1 will be automatically calculated.
All the mathematical calculations carried out in Tier 1 are system
generated and not by employee or any of R1/R2/R3.
The targets set in the evaluation process of Tier 1 varies for employees of
different departments as well as for employees of same department &
different cluster but may or may not vary for employees of same cluster
and same department.

14.2

Tier 2: Contribution towards Department

A process of evaluation of contribution of an employee towards fulfilling

his/her pre-defined Departmental Goals.

Firstly, all the Section In-charges would be defining the Departmental

goals at the start of the financial year for evaluation of employees
contribution in serving these pre-specified Departmental Goals.
Each of these Departmental Goals would be assigned certain weightage,
strictly in line with Table 1 i.e. the total of weights assigned to each of the
Departmental Goals should match with the weightage allotted to Tier 2
and cluster to which employee belongs. For example, if an employee in E5 grade (Cluster C) has 3 Departmental Goals, the total weight assigned to
all the 3 Departmental Goals taken together should be 20 only.
Due to the changing needs and business of our organization,
Departmental Goals may be modified, added or deleted every quarter but
the total weight of the Tier 2 should remain constant.
Secondly, after freezing all the Departmental Goals and their weightages,
the employee will be providing self rating depending on the allotted
weightage to each of the Departmental Goals, as a self appraisal, based
on how one thinks he/she has performed in serving these Departmental
Goals.
Thirdly, after the self appraisal, each of the Superior Officers (R1/R2/R3)
will be evaluating one by one the performance of the employee for Tier 2,
on the same rating depending on the allotted weightage to each of the
Departmental Goals such that R1 & R2 cannot see marks given by either
of them but R3 can see the marks given by both R1/R2. The order of
evaluation by the Superior Officers will be R1-R2-R3.
Marks given by employee or any of R1/R2/R3 can be either in integral
form or fractional form.
The employee can provide his remarks for each of the Departmental
Goals, giving justification of the self rating. Similarly, each of the Superior
Officers (R1/R2/R3) can also provide their valuable comment on the rating
provided by them, as a whole.
Once the marks given by R1/R2/R3 are frozen, as per Table 1, weighted
average for marks given by R1/R2/R3 (as per Table 3) can be computed
for each of the Departmental Goals by the system and final consolidated
score corresponding to Tier 2 will be automatically calculated.
All the mathematical calculations carried out in Tier 2 are system
generated and not by employee or any of R1/R2/R3.

The Departmental Goals set in the evaluation process of Tier 2 remains

same for employees of same department, irrespective of the cluster but
varies only for employees of different departments.

14.3

Tier 3: Contribution towards Organization

It refers to a process of evaluation of performance of an employee towards

achieving Organizational Goals or towards work performed for the
Organization over and above his/her basic duties and responsibilities. It is
completely a subjective evaluation wherein each employee will write
his/her contribution towards achieving Organizational Goals or towards
work performed for the Organization over and above his/her basic duties
and responsibilities, based on certain standard fields.
Firstly, the employee provides the detailed description of his/her
contribution towards Organization in all of these below mentioned fields:
1. Initiatives taken by the employee for introducing any new process in the
Organization or solving longstanding problems/issues faced.
2. Awards received within the Organization or outside.
3. Innovative steps taken for improving the productivity of any system in
the Organization.
4. Other achievements/contributions, if any.
Secondly, this detailed description of the contribution mentioned by the
employee will be evaluated by the Superior Officers (R1/R2/R3), one by
one, for each of the four fields, such that R1 & R2 cannot see marks given
by either of them but R3 can see the marks given by both R1/R2. The
evaluation shall be strictly based on Table 1 i.e. contribution mentioned by
the employee for each of the different fields will be evaluated based on
weightage allotted to Tier 3 and Cluster to which employee belongs. For
example, an employee in E-7 grade (Cluster D2) will be evaluated for each
of the four different fields for Tier 3 out of a score of 20 only. Thus, the
total marks given by each of R1/R2/R3 will be out of 80.
For evaluation of final consolidated score of an employee for Tier 3, the
total marks given by each of the R1/R2/R3 for Tier 3 are first divided by
four and then the weighted average of these marks are evaluated as per
Table 3.
The order of evaluation by the Superior Officers will be R1-R2-R3. Marks
given by employee or any of R1/R2/R3 can be either in integral form or
fractional form.

There is also an option of providing valuable comments by the Superior

Officers (R1/R2/R3) for the rating provided by them for each of the four
different fields
All the mathematical calculations carried out in Tier 3 are system
generated and not by employee or any of R1/R2/R3. The above four fields
in the evaluation process of Tier 3 is same for all employees, irrespective
of Cluster or Department to which employee belongs.

14.4

Tier 4: Potential

A process of evaluating the latent qualities or abilities of an employee in

terms of standard behavioural attributes & competencies, future ability
and values expected out of him/her with respect to his/her basic duties
and responsibilities.
Identifying the potential talent facilitates in preparing the individuals for
higher responsibilities and positions in future and thus it acts as the initial
step of Succession Planning.
Based on the basic duties and responsibilities of an employee, there is a
set of certain standard behavioural attributes and competencies; ability
and values which are required to be possessed in an employee, which is
an indicator of his/her overall potential. Irrespective of the nature of job of
the employee, the total weight allotted to Tier 4 (showing Behavioural
Attributes & Competencies, Ability and Values called as Potential
Parameters) shall remain constant as 30 across all clusters as it captures
employees behavioural attributes and competencies, ability and values,
which play an equally important role across all clusters.
Although the overall potential of an employee can be measured with a
total weight of 30 in any cluster but the individual weight allotted to each
of the potential parameters within a cluster may not be the same due to
different degree of requirement of one type of behavioral competency
over another, within a cluster. Moreover, since the type of behavioural
attributes & competencies, ability and values required in an employee
varies across different clusters due to different nature of job of employees
across different clusters, the type of potential parameters also differs
across different clusters.
The type of behavioural attributes & competencies, ability and values
required in an employee across different clusters along with their fixed
weightages have been identified as below:

Cluster A: Professional Knowledge (7), Communication skills (5), Initiative

(5), Willingness to learn (7), Adherence to deadlines (6)
Cluster B: Problem Solving Skills (7), Analytical Ability (5), Interpersonal
Skills (6), Quality of work (7), Innovativeness (5)
Cluster C: Professional Contribution (7), Customer Focus (7), Team
Management (6), Analytical Ability (5), Managing Interfunctional Interface
(5)
Cluster D1: Delegation Skills (5), Result Orientation (7), Team Management
(4), Customer Focus (7), Leadership (7)
Cluster D2: Business Acumen (7), Planning & Forecasting (6), Decision
Making (7), Relationship Management (5), Team Building (5)
Cluster E: Strategic Orientation (7), Autonomous Decision Making (6),
Business Acumen (6), Change Management (6), Budgeting (5)
In the process of evaluation for Tier 4, firstly, the employee will be
providing a self rating on a rating scale of 1 to 5 (BARS) for each of the
potential parameters, as a self appraisal, based on how one thinks he/she
possesses the required behavioural attributes & competencies.
Secondly, after the self appraisal, each of the Superior Officers (R1/R2/R3)
will be evaluating one by one the performance of the employee for Tier 4,
on the same rating scale of 1 to 5 (BARS) for each of the potential
parameters, such that R1 & R2 cannot see marks given by either of them
but R3 can see the marks given by both R1/R2. The order of evaluation by
the Superior Officers will be R1-R2-R3.
Marks given by employee or any of R1/R2/R3 has to be in integral form
only.
The employee can provide his remarks for each of the behavioral
attributes & competencies, giving justification of the self rating. Similarly,
each of the Superior Officers (R1/R2/R3) can also provide their valuable
comments on the rating provided by them, as a whole.
Once the marks given by R1/R2/R3 are frozen, as per Table 1, weighted
average for marks given by R1/R2/R3 (as per Table 3) as well as weighted
average for weightage allotted to potential parameters can be computed
for each of the behavioral attributes & competencies by the system and
final consolidated score corresponding to Tier 4 will be automatically
calculated.

All the mathematical calculations carried out in Tier 4 are system

generated and not by employee or any of R1/R2/R3. The potential
parameters in the evaluation process of Tier 4 varies across clusters only
and is irrespective of Departments.

15

Index Evaluation

15.1

Performance Index

It refers to an index for measuring the overall work performance of an

employee throughout the year, by giving a rating of Type of Performer to
the employee.
Since the performance of an employee evaluated from Tier 1 Tier 3
captures the actual work performed by the employee in terms of his
responsibilities & accountabilities as well as contribution towards
Department and Organization as a whole, its total marks (out of 70) would
be used for awarding a Performance Index.
The total score obtained by the employee from Tier 1 Tier 3, out of 70,
will be called as Performance Score.
A range of Performance Scores will be used to award a Performance Index
in the following manner:
Performance Index

Performance Score

Exceptional Performer (EP)

>63 marks

High Performer (HP)

>52 & <=63 marks

Average Performer (AP) -

>41 & <=52 marks

Low Performer (LP)

<=41 marks

15.2

Potential Index

It refers to an index for measuring the attributes and competencies; ability

and values possessed by an employee throughout the year, by giving a
rating of type of performer to the employee.
Since the performance of an employee evaluated from Tier 4 captures the
Attributes, Competencies, Ability and Values of an employee, its total
marks (out of 30) would be used for awarding a Potential Index.
The total score obtained by the employee from Tier 4, out of 30, will be
called as Potential Score.

A range of Potential Scores will be used to award a Potential Index in the

following manner:
Potential Index

Potential Score

Exceptional Performer (EP)

High Performer (HP)

>27 marks
-

>22 & <=27 marks

Average Performer (AP) -

>17 & <=22 marks

Low Performer (LP)

<=17 marks

16. PMS Grade Evaluation

The final evaluation of overall performance of an employee is on the basis
of a grade allotted to him/her. The grading structure to be followed in this
regard should be in compliance with the DPE guidelines which states that
the Performance Management System of a CPSE should follow a Bell
Curve Approach wherein there should be top 10% to 15% exceptional
performers in the Organization and bottom 10% below par performers in
the Organization who should not be given any Performance Related Pay
(PRP). Accordingly a four grade system has been prepared, keeping in
view the above statutory guidelines, which mentions the equivalent
meaning of the grade as well as the percentage of employees to be kept
in that particular grade for following the Bell Curve Approach.
Grade

Rating

%age of Executives to be
kept

Outstanding

10% to 15%

Very Good

35% to 40%

Good

40% to 45%

Below Par

10%
Table 5

The PMS Grade, so obtained, will be deciding the Performance Related Pay
(PRP) of the employee based on the linkage method followed. However,
the employees getting the Grade C will not be given any PRP, as per the
DPE Guidelines.
The method of allotment of these grades to the employees is through the
Performance Grid.

17. Performance Grid

It refers to a 4*4 matrix which utilizes the actual work performance of an
employee, in the form of his/her basic duties and responsibilities,
contribution towards Department and Organization as a whole, through
Performance Index and the potential of an employee, in terms of his/her
attributes & competencies, ability and values, through Potential Index, to
obtain the final PMS Grade of an employee.
After obtaining the Performance Index and Potential Index of an employee,
capturing his/her overall performance throughout the year, the final PMS
Grade is identified on the basis of the following 4*4 matrix called as
Performance Grid:
EP

HP

Performanc
AP
e

LP

LP

AP

HP

EP

Index

Potential Index
Table 6

18. Moderation of PMS Score

As per the Guidelines issued by DPE vide OM No. 2(70)/08-DPE(WC) dated
26.11.2008, each CPSE should develop a robust and transparent
Performance Management System which follows a Bell Curve Approach
in grading the Officers so that no more than 10% to 15% executives
should be graded as Excellent and only 10% of executives should be
graded as Below Par such that no PRP will be given to the bottom 10%
performers.
For complying with the above DPE Guidelines of top 10% to 15%
exceptional performers and bottom 10% below par performers, final PMS
ratings obtained by the employees needs to be moderated for the
implementation of Bell Curve.
There are two levels of moderation to be followed:

First level of moderation for employees between grades E-1 to E-7 would
be carried out by GMs, at the individual level, for keeping the grades of
the employees under them, in the percentage band complying with DPE
(as per Table 5). For this, GMs will get the complete access to the scores
obtained by each employee in the evaluation across all tiers along with
the performance diary of each employee.
Second level of moderation for employees between grades E-1 to E-9
would be carried out by a single Performance Management Committee
(PMC), at the Organizational Level, consisting of committee of Directors,
for keeping the grades obtained by all the employees of the Organization
in synchronization with the percentage band complying with DPE and
follow a Bell Curve for the Organization as whole. For employees between
grades E-8 to E-9, there would be a single moderation only i.e. by PMC.
Gradings decided by PMC would be final.