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PERFORMANCE MANAGEMENT SYSTEM

1. INTRODUCTION:

1.1 The System of Performance Appraisal for Board level positions and of executives
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.

1.2 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.

2. OBJECTIVES:

2.1 To accomplish organizational goals through a system of performance assessment


linked to company's objectives.

2.2 To facilitate fulfillment of individual aspirations and promotion of professional


excellence.

2.3 To encourage a two-way communication process between the Appraisee and the
Reporting Officer for bringing objectivity in Performance Appraisal System.

2.4 To evaluate the potential of the executive to assume higher responsibilities along
the hierarchy.

2.5 To involve the Appraisee through various stages of Performance Management,


thereby reducing the Performance gaps.

2.6 To map competencies and potential of executives for enabling the organisation to
source the talent generally from within the company for meeting organizational
growth.

2.7 To involve the executive to share the responsibility and become accountable for
efficient management of the business for result oriented performance through
mutual involvement.

2.8 To provide a transparent system to help each executive to evaluate his own
performance and develop himself with the help of Reporting Officer.

2.9 To provide for removal of differences, if any, in performance appraisal through


intervention of the Reviewing Officer.

3. APPLICABILITY:

3.1 The revised Performance Management System is applicable to all senior


executives at the level of E7A and above including Board level.

3.2 The Performance Management System will also cover senior executives of E7A
and above who may join NTPC on deputation or retaining lien while in service of
NTPC.

3.3 However, for Board level Appointees the ‘The Performance Appraisal Report’ as
prescribed by PESB is applicable.
4. FOCUS OF PERFORMANCE MANAGEMENT:

4.1 The focus of the Performance Management System for senior executives is to
appraise them on different components of managerial responsibilities, consisting
of Performance, Generic Managerial Competencies, Values and Potential, totaling
to 100 marks.
4.2 The Performance Component as identified and measures evolved would have
50% weightage in total appraisal.

4.3 Generic Managerial competencies exhibited by an Appraisee while

discharging duties have been given 20% weightage in appraisal.

4.4 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.

4.5 The Performance Management System provides for appraisal of the executive’s
Potential to assume higher responsibility and has a weightage of 15% in appraisal.

4.6 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.

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

4.8 The System aims to bring the concept of ownership and accountability on both
Appraisee and Appraiser to create mutual trust and confidence.

4.9 To utilize the Performance Management System for facilitating individual career
development and bring organisation-wide HR intervention at senior levels to
bridge competency gaps.
5. PERIODICITY:

5.1 The Performance Appraisal Period would run concurrent with the financial

year i.e. from 1st April to 31st March.

5.2 The System provides for setting up of Key Performance Areas (KPAs) and

reviewing the same in two half-yearly periods.

5.3 The first half year is from 1st April to 30th September and the second half-

year is from 1st Oct. to 31st March.


5.4 While reviewing the KPAs of the first half year, the targets for Key

Performance Areas for the second half year are evolved.

5.5 At the end of the Performance Appraisal year, the review for the second half of the
year is undertaken. The review would also involve annual appraisal of KPAs,
Competencies, Values and Potential Appraisal.

6. COMPONENTS OF PERFORMANCE REVIEW:

6.1 The Performance Management System, consisting of the following

components is implemented through ‘Performance Appraisal Form’.

6.2 Part I- Performance:


- Part IA: First Half Year Performance.
- Part IB: Second Half Year Performance.
Review of KPAs for 2nd half-year.
- Part IC: Annual Perfomance.
- Part ID: Comments on Performance.
6.3 Part II - Competencies
6.4 Part III - Values
6.5 Part IV - Potential Appraisal
6.6 Part V - Performance & Potential Profile

7.0 PART I-PERFORMANCE:

7.1 Part IA: First Half Year Performance:

7.1.1 The System provides for the Reporting Officer (Appraiser) and the executive
(Appraisee) to identify through discussion and agree upon a set of Key
Performance Areas (KPAs) in brief at the beginning of the first half-year.

7.1.2 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.

7.1.3 The KPA Targets may be having different weightages 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.

7.1.4 The KPAs should be more focussed, concrete and measureable.

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 Appraisee), Realistic and Time-Bound.
.1.5 One of the KPAs should be “Staff Development”, as building a performing team is
an essential target for senior executives. The measures for this could be
mandays of training & development activities for the Unit/ Department/function vis-
a-vis the Company’s training targets, HR initiatives like Professional Circles,
Quality Circles, Suggestion Scheme etc.
7.1.6 The Appraiser and Appraisee jointly evolve KPAs, define measures and allocate
marks for each KPA at the beginning of first half-year by 15th April.

7.1.7 The Performance under Part IA is jointly reviewed and performance evaluated at
the beginning of 2nd half year and not later than 15th October.

7.1.8 At the time of joint review, actual achievement is briefly recorded against each
KPA and marks obtained w.r.t. each KPA is indicated in relevant column.

7.1.9 The aggregate of marks obtained for different KPAs is worked out and indicated
as aggregate of IA. Both the Appraisee and the Reporting Officer sign the Part
IA.

7.2 PART IB: SECOND HALF PERFORMANCE:

7.2.1 The System helps to review the Key Performance Area Targets for

the Second Half-Year based on the evaluation of 1st half-year KPAs depending

on actual achievements.

7.2.2 The reworked KPA targets are briefly recorded, ‘Measures’ for each KPA defined
and Marks allocated. KPAs which extend beyond the 1st half year may be re-
recorded in the targets of the 2nd half-year.
7.2.3 The KPAs may undergo change owing to target accomplished, new targets
coming up, change of role etc.

7.2.4 The KPAs may undergo change owing to target accomplished, new targets
coming up, change of role etc.
7.2.5 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.

7.2.6 During the Performance Evaluation, the actual achievement is assessed against
each KPA and marks obtained against each KPA is indicated.

7.2.7 The marks obtained are aggregated at the bottom out of 50 marks as aggregate
IB.

7.3 PART IC: ANNUAL PERFORMANCE:


7.3.1 This part consolidates the 1st half-year and 2nd half-year

Performance of the Appraisee by aggregating Performance Marks obtained in

Part IA and Part IB.

7.3.2 The Annual Performance Marks out of 50 marks be computed based

on the formula mentioned in Part 1C and marks obtained be indicated in the

Box.

7.3.3 The marks so obtained out of 50 would be the marks secured for

“Annual Performance” in the achievement of KPAs.

7.3.4 The Appraisee and the Reporting Officer would jointly endorse the Annual
Performance by signatures.

PERFORMANCE MANAGEMENT SYSTEM

7.4 PART 1D: COMMENTS ON PERFORMANCE:

7.4.1 Part I related to Performance gets completed on filling up of Part ID

by the Reporting Officer at the end of Appraisal year.

7.4.2 In Part ID the Reporting Officer offers comments w.r.t. KPAs,

Measures, Achievements and sums up in brief the Performance profile of the

appraisee in writing. It would provide a pictorial description on the

performance of the appraisee for the year.


7.4.3 While summarising 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,

unfavourable situations that were encountered by the appriasee during the

period, favourable 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.

7.4.4. 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.

7.5 DETERMINATION OF INPUT FOR PART IA AND PART IB:

7.5.1 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.

PERFORMANCE MANAGEMENT SYSTEM

7.5.2 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.

7.5.3 Similarly, the KPA inputs and measures are also derived from the MOU

Targets set for the financial year which flows down from Corporate level to

different Units and Functions across the Organisation.


7.5.4 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.

7.5.5 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.

7.5.6 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.

7.5.7 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 utilisation of resources.

PERFORMANCE MANAGEMENT SYSTEM

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.

7.5.8 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 appraisee for
1st half-year performance..

7.5.9 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 period.

7.6 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:

7.6.1 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.
PERFORMANCE MANAGEMENT SYSTEM

7.6.2 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.

7.6.3 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.

7.6.4 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.

8.0 PART II: COMPETENCIES:

8.1 Evaluation of Competencies:

8.1.1 The System envisages evaluation of competencies of the executives on two broad
categories namely, Technical/Functional Areas and Managerial Competencies.

8.1.2 The purpose of this Part is to identify whether the Appraisee has the right balance between functional and managerial
competencies in order to find roles for which he can be groomed like ‘Generalist’ or ‘Specialist’ and provide suitable
career paths based on the competencies.

PERFORMANCE MANAGEMENT SYSTEM

8.1.3 To reward Appraisees not solely on the performance but also on the competencies,
as performance may be influenced by several other factors on which executive has
no direct control.

8.1.4 Competency based evaluation would help the organisation to take systematic steps
for bridging the competency gaps.

8.2 COMPETENCIES AND RATINGS:

8.2.1 Competencies:

The competencies and the ascribed meaning/ability to be assessed are as under:

A. Technical Knowledge:

Knowledge and understanding of all aspects of the work of the organisation, as well
as, the present assignment which the executive is presently doing.

B. Business Attitude:

The ability to identify opportunities, use data for making effective business

decisions on time, identify the strengths and weaknesses of the existing


system and take action as required. Considers all

departmental/division’s performance in line with the targets and goals

of the company.

C. Strategic Thinking:

The ability to understand situations and to generate alternate strategies, plans and
tactics. Capacity to conceptualise long term role based on operational
analysis and assessment of policies and procedures having impact on
business strategies of the company.

PERFORMANCE MANAGEMENT SYSTEM

D. Resources Management:

The ability to allocate and optimally utilize the resources in a cost effective way.

E. Communication Skills:

Ability to communicate ideas and information effectively through both written and oral
presentations, to convert ideas into action plans after ensuring their
acceptability to present company’s policies and objectives to groups within
and outside.

F. Systematic Thinking:

Ability to see linkages between situations that are not obviously related, using
common sense, past experience and rules to identify key underlying issues in
their proper perspective for taking necessary action.

G. Interpersonal Competence:

To promote open and constructive relationships with all; the ability to understand the
nature and dynamics of interaction with others; respecting individuals as they
are and exhibiting tolerance for differences and disagreements based on
rational and objective grounds.

PERFORMANCE MANAGEMENT SYSTEM

H. Empowering Skills:

The ability to delegate authority to the subordinates while retaining responsibility thus,
contributing to the development of the subordinates. Willingness to consult and
involve subordinates in decision making thereby espousing confidence in
subordinates.

8.2.2 RATINGS OF COMPETENCIES:

The competencies are evaluated annually on a five-point rating scale-1,2,3,4 & 5 - the
rating 1 being the lowest end of the scale and 5 being the highest on the scale.
8.2.3 Based on the competencies observed, the Reporting Officer would classify each
competency on a scale of 1 to 5.

8.2.4 The Reporting Officer would discuss each competency (A to H) with the Appraisee
and plot the rating.

8.2.5 The competencies all together have a weightage of 20% in the total Performance
Appraisal.

8.2.6 The aggregate of the rating of each competency is to be arrived at the bottom of the
ratings column. Thereafter the aggregate rating is to be converted to marks out of 20
using the Conversion formula (based on the maximum attainable marks of 40 i.e. 8
competencies x 5 maximum rating = 40).

8.2.7 The marks so obtained out of 20 is indicated in the Box at the bottom of Part II.

8.2.8 The Part II is duly signed by the Appraisee and the Reporting Officer.

PERFORMANCE MANAGEMENT SYSTEM

8.2.9 The review of competencies and completion of Part II for the previous appraisal year
is done at the end of Appraisal year, not later than 15th April.

9.0 PART III:VALUES:

9.1 Value Actualisation:

9.1.1 Adoption of the Company’s Core Values in the business dealings is one of the
essential duties of employees at all levels.

9.1.2 Especially Senior Executives who occupy leadership positions in the Company, have
a major role in the actualisation of Core Values by being ‘Role Models’ in observing
and practising them and thereby leading by example.

9.1.3 Hence due emphasis is laid on the Core Values demonstrated by the executive in his
day-to-day business dealings and 15% weightage has been ascribed in the
Performance Appraisal to the process of Value actualisation exhibited by the
executive.

9.2 COMPANY VALUES & RATINGS:

9.2.1 The Corporate Values ‘COMIT’ and the indicative observable behavior in respect of
each value is as under:

A. Customer Focus:

The Executive has conviction that the customer (Internal & External) is the center of
all activity; he is courteous, sincere, patient and sensitive to the customers
and honours commitments on time.

PERFORMANCE MANAGEMENT SYSTEM

B. Organisational Pride:

The Executive holds the company in high esteem and rejoices in belonging to it; he
demonstrates loyalty and commitment to the organisation and has a sense of
ownership and belongingness with it.
C. Mutual Respect and Trust:

The Executive has high regard for and faith in the fellow organisational members; he
believes in collaboration and openness and has good team spirit.

D. Initiative and Speed:

The Executive believes in taking the first step, thinking new and ahead and being
swift without compromising on quality; he is creative and innovative and has
the willingness to experiment and take risks.

E. Total Quality:

The Executive believes in pursuing excellence in all spheres of activity; he makes


continuous efforts in improving standards of performance, systems and
processes.

9.2.2. Each value has to be evaluated through discussion on a rating scale of 1 to 5 the
rating 1 being the lowest and 5 being the highest.

9.2.3 The Reporting Officer would evaluate the Appraisee on each of the Value and mark
the rating for each value. The ratings are then aggregated at the bottom of the rating
column out of maximum of 25.

PERFORMANCE MANAGEMENT SYSTEM

9.2.4 The ratings so obtained would be converted to 15 marks by the conversion formula
given.

9.2.5 The marks obtained out of 15 marks is written in the Box.

9.2.6 The Part III is signed jointly by the Reporting Officer and the Appraisee.

9.2.7 The evaluation of Values and completion of Part III for the previous appraisal year is
done at the end of Performance Appraisal Year, not later than 15th April.

10.0 PART IV-POTENTIAL APPRAISAL:

10.1.1 Evaluation of Potential:

10.1.2 Potential is a component related to “Competencies” of Part II. It seeks to achieve one
of the major objectives of the Performance Appraisal System, namely evaluating the
suitability of the executive to assume higher responsibilities along the hierarchy.

10.1.3 In due course of time, the appraisal of ‘Potential Component’ may be done through
Assessment Centres or with the help of such other means, to make the appraisal
more broad-based.

10.1.4 The personality profile of each individual based on the Assessment Centre or with the
help of other process can become available to the Reporting Officer to enable him to
evaluate potential of the appraisee with more objectivity.

PERFORMANCE MANAGEMENT SYSTEM


10.1.5 That would also provide a more detailed prescription of ‘development’ initiatives. This
would be possible once the Assessment Centres or any such other systems are
institutionalised and all senior executives are covered.

10.1.6 Pending institutionalisation of such systems, the Reporting Officer would objectively
evaluate the potential of the assessee based on factual information observed during
assessment year.

10.2 RATINGS ON POTENTIAL:

10.2.1 The following generic competencies are covered for potential evaluation of
Executives :

A. Team Building:

The executive demonstrates ability to cooperate and interact with others in a team
environment, is able to work collaboratively instead of competitively, is able to
reorganize his own department while managing diverse and divergent views
without loosing sight of the objectives.

B. Conceptual Ability:

The executive demonstrates the ability to understand and forecast results, sensitive
to environment, able to respond to situations quickly and predict changes.

C. Strategic Vision:

The executive demonstrates the ability to build future scenarios and to handle change
with a focus on long term issues.

PERFORMANCE MANAGEMENT SYSTEM

D. Leadership Abilities:

The executive demonstrates ability for guiding and facilitating decision making for
achieving goals, generates enthusiasm, pride and commitment amongst all
levels of the organisation, setting an example for others to emulate.

10.2.2 The evaluation of ‘Generic Competencies’ for potential Appraisal is done through
discussion on a rating scale of 1 to 5. Rating 1 being lowest and rating 5 being the
highest.

10.2.3 The evaluation of potential is done on each competency and rating given against
each in the rating column by the Reporting Officer.

10.2.4 The aggregate of all the comptencies A to D would be arrived at by totalling all the
ratings. This would be out of 20 marks.

10.2.5 The Potential Appraisal has a weightage of 15% in the total Performance Appraisal.

10.2.6 The rating on potential out of 15 marks is obtained by using the Conversion formula
at the bottom of Part IV.

10.2.7 The marks so obtained out of 15 marks is written in the Box.

10.2.8 The Part IV is jointly signed by the Reporting Officer and the Appraisee at the
bottom of the page.
10.2.9 The appraisal of this Part for the previous appraisal year is done at the end of
Performance Appraisal year, not later than 15th April.

PERFORMANCE MANAGEMENT SYSTEM

11.0 PART V: PERFORMANCE AND POTENTIAL PROFILE:

11.1 Final Marks Scored:

11.1.1 The Part V would sum up all marks scored for the Performance Appraisal year.

11.1.2 The marks scored for Part I, Part II, Part III and Part IV is transferred to this section and entered against respective
item.

11.1.3 The aggregate of the marks scored is arrived at by adding all marks scored for
different components.

11.1.4 This would form the Final score of Performance & Potential Appraisal rating of the
executive out of 100 marks.

11.2 COUNTERSIGNING THE APPRAISAL:

11.2.1 The Appraisal of the Reporting Officer is duly countersigned by the Reviewing Officers above in the hierarchy.

11.2.2 The Reviewing Officers in the hierarchy would go through the performance of the
appraisee in totality as finally brought out by the Reporting Officer inter-alia indicating
details of marks scored under Performance, Competencies, Values and Potential
before countersigning & offering comments if any.

11.2.3 In case the first Reviewing Officer in hierarchy feels the necessity of reviewing the
appraisal written by the Reporting Officer he would have a detailed discussion with
the Reporting Officer on each of the items and arrive at a fair decision accounting for
the views of Reporting Officer. Thereafter he should offer comments in the relevant
column including different ratings for each of the items duly substantiated by the
facts.

PERFORMANCE MANAGEMENT SYSTEM

11.2.4 Similarly if the Second Reviewing Officer has any comments with respect to the
performance and other parameters of evaluation he would duly discuss with the first
Reviewing Officer and arrive at a fair decision, accounting for the views of the first
Reviewing Officer. Thereafter offer comments and ratings on the Performance of the
appraisee in the relevant column.

11.2.5 Similarly, countersigning authority who is the final authority will offer considered
comments in the final appraisal by him taking into account the appraisal of the
Reporting Officer and the Reviewing Officers. The decision of the countersigning
authority is final.

11.2.6 The Reviewing Officer / countersigning officer while undertaking review would be
guided by such factors like situations/circumstances that may have bearing on the
overall performance evaluation of the appraisee. He would endeavour to have
uniform approach with respect to assessments brought out by different Reporting
Officers under his control.

12.0 REMOVAL OF DIFFICULTIES OF THE SYSTEM:


12.1 Implementation of Performance Management System is very sensitive and needs to
be done with utmost objectivity. Difficulties may crop up in its implementation while
completing the Form.

12.2. Any difficulty or difference that may arise between the Reporting Officer and the
Appraisee in the process of implementation of the system needs to be sorted out
through mandatory intervention of the immediate Reviewing Officer in the hierarchy.

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13.0 PITFALLS TO BE AVOIDED:

13.1 The fact that the Performance Management System is implemented by human
beings, there is likelihood of prejudice, bias and other pitfalls that may influence
appraisal. It is important that one should be aware of the problems that can affect the
validity and dependability of the Appraisal System.

13.2 HALO EFFECT:

It is the tendency to base the overall assessment of an individual on the basis of a


specific trait/characteristic of the appraisee.

13.3 BIAS:

Many a times, appraisal may become invalidated because of biases carried as an


appraiser. Biases may creep in for several reasons such as social background,
regional or religious backgrounds, inter-personal conflicts, dislike etc.

13.4 INFLATION OF RATING:

It is a tendency to inflate ratings. Some appraisers may resort to this for sometime,
but some are generally prone to give inflated ratings without giving regard to
Performance.

13.5 LENIENCY ERROR:

It occurs when the appraiser artificially assigns all or certain group of employees high
performance ratings and consequently all or certain scores cluster at the top of the
rating scales.

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13.6 STRICTNESS ERROR:

It occurs when the appraiser artificially assigns all or certain group of employees low
performance ratings and consequently all or certain scores cluster at the bottom of
the rating scales.

13.7 CENTRAL TENDENCY:

It is the tendency of the appraiser to avoid using the extremes of rating scales and to
cluster the ratings around the mid point.

13.8 SPILL OVER EFFECT:


It is the tendency of the appraiser to carry in mind the past performance of the
appraisee in view while making evaluation on the present Performance.

13.9 RECENCY EFFECT:

Some times the raters assign ratings on the basis of recent behaviour they have seen
in their appraisees forgetting about past behaviour over a period. This is called
recency effect.

14.0 IMPLEMENTATION OF THE SYSTEM:

14.1 Regional HR and Unit HR are responsible for implementation by communicating


down the line and facilitating smooth implementation by extending logistic support,
monitoring and retrieval of completed form.

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14.2 Regional Head and Project Head would facilitate implementation by monitoring
progress, remove difficulties and ensure completion of appraisal report and sending
to Corporate Centre by 15th May every year.

14.3 The primary responsibility for making available of Performance Appraisal Form and
setting the process in motion rests jointly with the Reporting Officer and the
Appraisee as per the time frame provided in the System.

15.0 GENERAL:

15.1 Performance Discussion:

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


Reporting Officer with the Appraisee. The process of discussion needs to be given
utmost importance and carried out in a conducive atmosphere in order to remove any
anxiety or tension in the Appraisee.

15.1.2 The performance discussion calls for creating conducive atmosphere by putting the
Appraisee at ease and hence exclusive time and energy is to be spent on this
important activity of discussion and feedback.

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

15.1.4 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 which 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.

PERFORMANCE MANAGEMENT SYSTEM

15.2 FEEDBACK:
15.2.1 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.

15.2.2 The feedback should be focussed on the specific performance actions and not on the
personality of the assessee. 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.

15.2.3 The continuous feedback based on the facts gathered during the period would
provide adequate opportunity to the assessee to take corrective steps during the
remaining part of the performance period.

15.2.4 Feedback should be aimed more at improving and developing the person and should
be provided with sufficient descriptive way based on data collected in an non-hurting
manner.

15.3 DEVELOPMENTAL NEEDS:

15.3.1 The Performance Management System is a tool to be utilised for identifying the
developmental needs of the appraisee. The Reporting Officer while evaluating
Performance, Competencies, Values and Potential would specifically address the
developmental needs in order to overcome the competency gaps in the appraisee

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15.3.2 The developmental needs identified by the Reporting Officer will be shared with the
Appraisee and the same would be reflected by him while offering the comments in
Part V.

15.3.3 The Reporting Officer should suggest specific competency gaps and developmental
initiative/training and time frame for the same.

15.4 MISCELLANEOUS:

15.4.1 From year 2001-2002, only the revised Performance Management System and
Appraisal Form thereunder is applicable.

16.0 SPECIMEN:

16.1 In order to acquaint the Appraiser and Appraisee with KPAs, Measures allotment of
Marks, two Specimen are enclosed as Annexure I and II.

16.2 The KPAs, Measures, Marks allocated and Marks obtained are all illustrative in
character.

16.3 The Appraiser and Appraisee will have to evolve KPAs, Measures, Standards etc.,
based on their business plans, condition and situations, and they are to be specific to
their job roles and responsibilities.
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