HR PRACTICE AT NTPC-A LOOK

INTRODUCTION NTPC was established as a public sector power utility by Government of India on November 7, 1975. The reason NTPC was created was to bridge the huge electricity supply-demand gap and the State Electricity Boards were not able to cope up with the situation. True to the expectation, it played a key role in the development of the sector, lighting every fourth bulb in the country, become the largest power utility of India, Sixth largest thermal power generator in the World and the Second most efficient utility in terms of capacity utilization. Rightly, NTPC has set for itself the Vision statement To be one of the worlds largest and best power utilities, powering Indias growth. NTPC strongly believes in achieving organizational excellence through Human Resources and follows "People First" approach to leverage the potential of its over 25,000 employees to fulfill its business plans. The Personnel & Administration (P&A) function was rechristened as HR to align the function with the HR Vision of "enabling the people of NTPC to be a family of committed world class professionals making it a learning organization and bring sensitivity and human face to the function. It has formulated an integrated HR strategy which rests on four building blocks of HR viz. o Competence building, o Commitment building, o Culture building and o Systems building All HR initiatives are undertaken within this broad framework. NTPC, a Navratna, was voted as the best employer in the country in many HR surveys in the recent years. The company is well known for its employee friendly HR practices. NTPC attracts the best talent from across the country and recruits candidates by conducting one of the toughest selection process. THE HR PRACTICES Most of the HR practices of NTPC are a result of the vision and the culture that they have created over the years. Since its inception, till the early 1990s, NTPC recruited employees from engineering colleges. The training imparted to them was largely informal and consist of on the job training. In the early 1990s it experienced a shortfall of skilled manpower in the organization due to which it could not realize its growth plan. The company during that time developed the policy of recruiting personnel with generic analytical skills and high learning potential and of imparting them with specific skill required for the job offered in the company.

HR PRACTICE AT NTPC-A LOOK

The company believes that in order to succeed in the competitive environment it is necessary to recruit, train, and retain talented employees. NTPC aims at recruiting the best available talent, training them according to the industry demands and retaining them in a culture that promoted informal learning and free flow of ideas. The career model that the NTPC has created emphasizes on individual growth along with organizational growth. The employees can identify their career path and the additional skills they would have to obtain to move ahead in their career. NTPC identifies the structural requirement of the people at different levels and creates a demand for the roles. If the employees fulfill those demands they would inspire for that role. NTPC adopts a role-based structure, which ensures an employee career growth through different streams. In each of the streams, the role of the employee is defined and for each role competencies have been identified and created. Recruitment, training, performance appraisal and career progression are carried out based on the roles. RECRUITMENT NTPC takes adequate steps to recruit people on the basis of various factors to identify the right candidate. The following are the main factors that are considered while recruiting new employees. Learnability: NTPC give more emphasis on learnability, it means the ability to derive generic knowledge from specific experiences and apply the same in new situation. Competency: NTPC give more importance to professional competence and academic excellence. Other qualities: Other qualities include analytical ability, teamwork, leadership potential, communication and innovation skills, along with a practical and a structured approach to problem solving.

Recruitment Programs: Human resource planning at NTPC was undertaken in accordance with organizational objectives and in line with its organizational culture. The company had two executive positions for every three non-executive positions. Most of the jobs at the company required thorough technical skills. Therefore, NTPC gave preference to recruitment of engineers. Around 80% of NTPCs executives were engineers. Since the company followed the lifetime employment policy as a PSU, it recruited mainly at the entry level for the posts of around 400 Executive Trainees every year. Lateral recruitments especially at the senior levels were very few. The company do not usually hire from premier institutes like Indian Institute of Technology (IIT) and Indian Institute of Management (IIM) but preferred to take candidates from National Institute of Technology (NITs) during campus recruitments. This allowed the company the freedom to mold these

HR PRACTICE AT NTPC-A LOOK

engineers to fit its own culture. It could also check any possible mismatch between the job and an individuals expectations. Apart from this, NTPC follows lateral recruitment programs for experienced cadre of managers as NTPC offers an environment wherein there is a great deal of freedom and challenges. Some of the highlights of NTPCs Recruitment Plan: o Preference to marginalised classes of society o SC/ST,OBC o ex-servicemen o Project Affected Persons (PAPs) o Physically challenged So we do find a tinge of Corporate Social Responsibility in the recruitment plan of NTPC. Recruitment Procedure: NTPC recruited mainly at the entry level for the posts of around 400-500 Executive Trainees every year. The Steps in recruitment procedure: The selection process involved three stages: o Written test - Candidates are called for a written test to test the knowledge of their subject. Candidates who scored the cut off marks in the selection test are called for a Group Discussion. o Group discussion Further short listing is done on the basis of group discussion. o Interview - The interview panel consists of personnel from HR department and technical manager. During the interview a candidates technical knowledge, communication skills, presentation skills, flexibility and aspiration level are tested. For lateral recruitment above entry level, interview is a mode of selection.

The Induction Program: To induct talent and groom them into a dedicated cadre of power professionals "Executive Trainee" Scheme was introduced in the year 1977 for recruitment in the disciplines of Mechanical, Electrical, Civil, Control & Instrumentation and now encompasses Computer Science, Chemistry, HR and Finance disciplines also. Besides a comprehensive one year training comprising theoretical inputs as well as on-the-job training, the new recruits are also attached with senior executives under a systematic and formal Mentoring System of the company to integrate them into the Culture of the company. This way, companys specific skills can be (has been) developed and nurtured among the employees. Today, more than 50 % of the executive strength in the company is through this talent building mechanism. The Executive trainees are the back bone of Engineering, Chemistry, HR, Finance, IT and Hydro functions of the company.

HR PRACTICE AT NTPC-A LOOK

TRAINING AND DEVELOPMENT A systematic Training plan has been formulated for ensuring minimum seven man days (56 hours) training per employee per year and includes level-wise planned intervention designed to groom people for assuming positions of higher responsibility, as well as specific needbased interventions based on scientific Training Needs Analysis. Opportunities for long term education are also provided to employees through tie ups (MOU) with reputed Institutions like IIT-Delhi, (M. Tech in Power Generation Technology), MDI-Gurgaon (Post Graduate Diploma in Business Management), BITS- Pilani (B.Tech) etc. Continuing with their commitment towards developing itself into a learning organization and aligning itself with its corporate vision, the company established a training institute called the Power Management Institute (PMI). The institute moved to an independent campus at Noida, New Delhi as a full fledged Training and Development Centre in 1994. PMIs mission was to work towards wider adoption of innovative and relevant management concepts in the power sector. The institutes activities included conducting management development programs, as well as research and consultancy. The programs at the center were open to NTPC managers (middle and senior levels) as well as to managers from state electricity boards and from multinational companies. They were open to managers in the power sector as well as those not in the power sector, and even took managers from other countries. The center also undertook training courses supported by foreign agencies like USAID, Overseas Development Agency (ODA) UK, World Bank and E7 group21, and ones supported by Indian institutions such as Administrative Staff College of India (ASCI) 22, Hyderabad and IIM, Ahmedabad. Such has been success of this project that it has become a premier training imparting institute and due to the high quality of PMI training, many companies from countries like Korea, Tunisia, etc. came to India to attend the training programs. The PMI campus had a well-equipped auditorium, classrooms and residential and recreational facilities for trainees. The learning center at PMI had a good library of books as well as international databases and enabled online library access. NTPC wanted its employees to better themselves continuously. The company identified the following areas as its focus for training: o change management, o quality management and o continuous performance improvement Besides several management development programs, the company also conducted leadership development programs for its executive directors and general managers. These programs included business simulations and experiential exercises and were conducted in association with NIS Sparta24. Apart from PMI, which focused on management development, the company also ran technical training centers at all its 20 plants. They were called Employee Development Centers (EDCs). NTPC has institutionalized "Development Centers" in the company to systematically diagnose the current and potential competency requirements of the employees with the objective of enhancing their development in a planned manner. These Centers give a good

HR PRACTICE AT NTPC-A LOOK

insight to the employees about their: o Strengths and weaknesses o The gaps in their competencies which they can bridge through suitable support from company. Here the employees imparted specialized technical training to employees based on systematic identification of their competencies and training needs. The company had also pioneered the use of simulation training in the country in 1984. The company has two Simulation Training Institutes at Korba in Chattisgarh, and at Kawas in Gujarat. These institutes enable employees to learn the operations of a real power plant without any loss or damage to the company. The simulation training also raised the level of proficiency and equipped employees to handle emergencies effectively. NTPC has a training budget which is more than Rs.5000 lakh and no wonder NTPC means serious business when it comes to training and development of its employees. NTPC has >90% utilization of its fund allotted to T&D. PERFORMANCE APPRAISAL Till the early 1990s, NTPC had operated through a system of Confidential Reports (CRs) for performance appraisal. A major revamp of the companys HR strategy was undertaken around this time and the company modified its appraisal system to adopt a 360 degree feedback system based on Key Result Areas (KRAs) to bring in more transparency. In line with the recommendation of M/s AT Kearney, a Performance Management System (PMS) based on Key Performance Areas (KPAs) in addition to competency, potential and values has been implemented in order to bring objectivity and transparency in performance evaluation and in order to build a culture of high performance. Intensive preparation has been done for implementing the new PMS. By 2004, NTPC had revised its performance appraisal system and introduced a new rewards system in line with the recommendations of M/s AT Kearney to strengthen its high performance culture. It had also initiated the implementation of an HR Score Card, based on the Balanced Scorecard principle, with the help of Hewitt Associates. NTPC linked its promotions to performance rather than years of service right from the very beginning. NTPC created a performance-driven work culture, full of challenge for its employees, through the use of benchmarking. The companys efforts towards corporate planning began at the top with general managers of all power plants gathering to discuss their targets by benchmarking with the best performing plants within the company, and with other plants within and outside India. Targets were then set, based on these benchmarks, and were further broken down to provide individual targets for employees. The company had adopted the mindset of viewing problems as opportunities and this culture motivated the employees to perform. At NTPC there was a peer pressure to excel and this also contributed to performance and Efficiency. The company ensured that it recruited competitive people. As one of its employees remarked, In NTPC if a peer is learning anything new, you will start doing that

HR PRACTICE AT NTPC-A LOOK

too, otherwise, there is a fear that they will get ahead and get that promotion. He added that the employees who did not get promoted viewed it as a punishment and worked even harder to get it next year. The culture was such that if an employee missed three to four promotions he felt cut out from the companys mainstream. Below par performers were sent for remedial training and if performance still didnt improve, they were moved to less important roles. As a last resort, if there was no hope of improvement, the company asked the employee to opt for its Voluntary Retirement Scheme (VRS). 360-degree feedback mechanism for AGMs and above was introduced with substantial participation. It has also been extended to cover DGMs. COMPENSATION POLICIES NTPC compensates its human assets in three ways. It adds learning value through training and development and appraisal practices. NTPC adds emotional value through initiatives directed towards supporting employees with their work and personal needs, and adds financial value through monetary compensation. Although NTPC faces strong domestic and international competition for its human assets, through enticing offers from competitors, the compensation level at NTPC equals the average industry level for each country. It is neither above market nor below the market level. Says G.K. Agarwal, executive director (HR): We are bound by government regulations as far as salaries are concerned. Our HR policy is worked around boundaries. But now that it has navratna status, it has more flexibility. Moreover, NTPCs entry level salaries are higher than its private counterparts, says R.C. Shrivastav, director (HR). EMPLOYEES WELFARE, HEALTH & SOCIAL SECURITY Demonstrating its high concern for people, NTPC has developed strong employee welfare, health & well-being and social security systems leading to high level of commitment. NTPC offers best quality-of-life through beautiful townships with all amenities such as educational, medical and recreational opportunities for employees and their family members. The motivation to perform and excel is further enhanced through a comprehensive NTPC Rewards and Recognition system. What binds employees to NTPC is security. Remote locations mean the company has to take care of things such as the education of employees children. Apart from full medical benefits, even after retirement, NTPC also has help desks that assist families of employees who are out of station. Social Security on Superannuation Employees Provident Fund Gratuity Employees Voluntary Benevolent Fund Self Contributory Pension Scheme Post Retirement Health scheme Education

HR PRACTICE AT NTPC-A LOOK

>45 schools in various projects imparting quality education to 45000 odd children. Need based funding of schools Workers Education Scheme Regular upskilling Childrens Education Scheme Reimbursement/ scholarship/ award/ coaching policy Initiative for total development

Gender Equality Policy on sexual harassment Paternity leave Tapping rich resources available in families of employees for community development / welfare works / child development projects in and around project Physically Challenged People Employment opportunities as per 1995 Act 237 nos provided employment, recruitment drive for 169 persons currently in process. Facilities for physically challenged people Provision of medical equipments Holding of medical camps Launching inclusive education in schools Health Comprehensive health care to employees and their families Adequate health care to community around project sites Project Hospitals -17 Beds-700 Empanelled Hospitals-58 EMPLOYEES PARTICIPATION (EPM) NTPC believed that participation and participatory culture make employees own their work and result in tremendous synergy. NTPC Open Competition for Executive Talent (NOCET) is organized every year in which teams of executives compete annually through oral and written presentation on a topical theme. Similarly "Professional Circles" have been formed department-wise where Executives of the department meet every fortnight to share their knowledge and experiences and discuss topical issues. In order to tap the latent talent among non executives and make use of their potential for creativity and innovation, Quality Circles have been set up in various units/offices in NTPC. Besides a management journal called "Horizon" is published quarterly to enable employees to share their ideas and experiences across the organization. Suggestion Schemes called for suggestions from employees on the companys equipment and systems, and rewarded good suggestions. Safety Circles suggested improvements in safety measures that could be subsequently implemented by the company.

HR PRACTICE AT NTPC-A LOOK

ANALYSIS OF HR PRACTICES AT NTPC: Strengths:

More than 25 thousand highly trained employees are engaged in NTPC owned projects. Senior executives possess extensive experience of the industry. Executive Turnover Rate 0.44%. Planned interventions at various stages of career. Systematic training ensures 7 man days training per employee per year. 0.19% of revenue allocation for training & development with 92% utilization record. NTPC has a training budget which is more than Rs.5000 lakh. Knowledge sharing & development through various HR initiatives. Cordial & harmonious employee Relations.

HR PRACTICE AT NTPC-A LOOK

Employee security i.e. full medical benefits even after retirement, education of employees children even in remote location etc. "People first practice policy. Township with all basic amenities is one of the USP for NTPC. As one of the employees Navneeta Bhattacharya says "In the private sector, you don't have time for yourself. But here you have a life and that too with benefits like well-protected townships." The 24-year-old means it. She chucked up a job with an Indian IT giant to join NTPC. What binds employees to NTPC is security. Remote locations mean the company has to take care of things such as the education of employees children. Apart from full medical benefits, even after retirement, NTPC also has help desks that assist families of employees who are out of station.

Weakness Performance management (appraisal) is one area of concern. Even though there had been developments to make system more transparent, yet things has not materialized as envisaged. Employees still have apprehensions about this and are yet to have fullest of belief in the system. NTPC yet has to implement the performance linked incentive system. This is one area of concern. NTPC needs to plan for incentive schemes. Compensation though is at par with the sector norm but to recruit and retain bright people, NTPC will have to redraw its compensation policies. It would be difficult as being a PSU; its governed by certain rules and regulations. The Road Ahead

1. NTPC had enjoyed a near-monopoly till the 1990s but with increasing competition

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from private sector players like Reliance Energy Ltd. and Tata Power Company Ltd., it could become tough for the company to keep up its record in future. It has become all the more important for the company to attract the best talent to be able to realize its ambitions of becoming a complete energy company spanning thermal, hydro, nuclear and bio-power, generating 40,000 MW of power by 2012 and entering the Fortune 500 listing by 2017. NTPC could not allow highly accelerated career growth due to the companys stable career policy. The IT, banking, pharmaceuticals and biotechnology etc. in the private sector emerging as preferred sectors for employment due to acetated career growth opportunities. Hence have to gear up to refine its recruiting and retaining strategies to attract young, aggressive fast trackers. NTPC cant be recommended for young, aggressive fast trackers as there is every chance on them being disillusioned in 2-3 years time as they always seek for challenges. But with NTPC making foray in hydropower, coal mining, power trading and power distribution things are changing and will change. As per one Mr. K.K. Sinha, Director (HR) "All this will keep our employees on their toes with new challenges. NTPC would have to shake off even the least degree of complacency that it might

HR PRACTICE AT NTPC-A LOOK

have had in the monopolistic scenario earlier. Though the company had ensured that employees were continuously aware about their performance through HR tools like quality circles, benchmarking and job rotation, it might not be enough to handle future challenges. 4. NTPC also faces the threat of poaching of its highly trained and competent employees by competitors. So they need to gear up for these challenges taking into account the threats from the competitors. The differentiation factor would be the HR policies and practices. NTPC though is doing well as far as it HR activities or processes are concerned but that was in a monopolistic environment. NTPC needs to revisit its processes and plug the lacuna. NTPC has earlier too engaged in a project called DISHA for realigning its business practices. It needs to again focus and canalize its effort in making its practices more employees friendly and too tough for the competitors to break-through. 5. Another area of concern for NTPC is the skewed male-female ratio with women constituting less than 5% of the total workforce

References: 1. http://www.aspiresys.com/web_pages/business_today/business_today.htm 2. http://www.ntpc.co.in 3. http://www.ficci.com/media-room/speeches-presentations/2004/july/ntpc.ppt 4. http://www.citehr.com 5. http://www.powerhrforum.org/members/ntpc.asp 6. http://www.ntpc.co.in/companyperformance/chairmanstat.shtml 7. http://archives.digitaltoday.in/businesstoday/20041121/cover9.html 8. http://www.ficci.com/media-room/speechespresentations/2006/feb/D_K_Sinha.ppt 9. www.icmrindia.org/casestudies/catalogue/Human%20Resource%20and %20Organization%20Behavior/HROB073.htm 10. http://www.shilpabichitra.com/Shilpa2004/anni_1_047.html, 2004.

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