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performance management system at5 BPCL

performance management system at5 BPCL

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Published by: Ajay Sharma on May 08, 2011
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A Case Study of BPCL, Naini

´EFFECTIVENESS OF THE PERFORMANCE MANAGEMENT SYSTEM AT PSUs FROM EMPLOYEE·S PERSPECTIVEµ

About the organization
BHARAT PUMPS AND COMPRESSORS LIMITED y Bharat Pumps & Compressors Limited (BPC) is a Mini Ratna Company, Public Sector Undertaking (PSU) of the Government of India under the Ministry of Heavy Industries and Public Enterprises. y It has an employee strength of 1070 employees( till Dec 2010 ) PRODUCTS MANUFACTURED y The company manufactures Reciprocating pumps, Centrifugal pumps, Reciprocating compressors, and high pressure se

TURNAROUND
y The company has seen a dramatic turnaround in its

performance from the financial year 2005-06.
y After the start of the company in 1970,unfortunately, the

company was unable to make profits. Eventually, it turned sick and was referred to the Board for Industrial and Financial Restructuring (BIFR).
y The turnover went up to 27,112 lakh (US$601.9 million) in

2009-10 from 14,372 lakh (US$319.1 million) in 2006-07.

Objectives of the study:
y To study the performance management practices at public

sector undertaking, taking BPCL as a case study.
y To study the effectiveness of the performance management

system from employee¶s perspective, in order to find out if it is similar/different from the objectives that the organization¶s management desired it to be.
y To give me meaningful suggestions so as to make it more

efficient from the employee¶s point of view.

Research methodology
y Developing the research Plan - The research plan was

y

y

y

y

designed to take decision on the data sources, research approaches, research, instruments, sampling plan and contact methods. For designing the questionnaire and getting appropriate parameters for it, an unstructured interview was conducted with the managers at BPCL. Extensive literature review about performance management systems at various private as well as PSUs was done to derive components for questionnaire. Questionnaire consisted of 32 questions based on a 5 point Likert scale extending from highly dissatisfied to highly satisfied. To enhance the effectiveness of the questionnaire, it was offered to the employees in Hindi also

Analysis
y Factor Analysis using SPSS was done to ensure that effective

components were considered and proper grouping could be done to club the closely related components together, followed by Reliability Test, to enhance the accuracy. degree of influence on the dependent variable i.e. Effectiveness of the performance management system was checked using ANOVA. the pattern of responses.

y Mean was taken out of these clubbed components and its

y Cross Tabulation and frequency analysis was done to study

Observations
y Employees are appraised once in a year through a feedback

form where they conduct self appraisal as well as appraisal by the superiors. y There is no linkage of training programs with the findings of performance appraisal process y Training modules are fixed and they are modified less frequently and are not customized as per individual needs y Promotion is on the basis of time factor, every employee becomes eligible for promotion exam on successful completion of 4 years of service, performance appraisal has a small effect on this process

The traditional performance appraisal mechanism
y No feedback is offered to the employees regarding their

performance levels and shortcomings y There is a process of informal counseling of the employees by their seniors. y Motivation is not a part of performance appraisal process, no rewards are linked to it y Accountability and transparency of the HR department to the workers is not significant y The process is more or less one way with a very less employee participation

Informal system of performance management
there is no formal performance management processes being followed at BPCL yet there is a very strong system of informal performance management y Under informal performance management, the superior guides the subordinate consistently and also does remedial counseling in case of any problem faced by the superior y For motivation there is a tradition of giving monitory rewards to the performing employee and also every one recognizes and praises the efforts of the good performing employee y This leads to a healthy environment where productive employees are motivated informally.
y Though

Conclusion
y The performance management process

is significantly

influenced by support from superiors. y Employee are apprehensive about the objective and purpose of the performance management process which is conducted more or less as a routine affair y Transparency and accountability is a vital component of the performance management system as per the employee perception. . y The performance management system is one sided at BPCL. That is why employees are apprehensive about this process.

y The

process and the performer of the performance appraisal should be more knowledgeable trained and efficient.

y The competent, knowledgeable and efficient HR department leads

to a better performance appraisal and management system in an organization
y When the performance appraisal and management process is in

sync with individual employee¶s career planning and development process, worker¶s response to the performance management process is more positive.
y The performance appraisal and management process is more

interactive, holistic and participative, the worker morale as well as belief on the performance management process is high.

Recommendation
y Holistic and participative approach should be adopted

in performance appraisal process at BPCL, where every aspect of employee¶s key performance factors are taken into consideration y The process at BPCL should be as much participative, multidimensional and interactive as possible. y Synchronization with individual¶s career development would ensure optimum worker participation in the process of organizational growth and development leading to increase in productivity

y Objectivity of the Appraisal Process should be

increased making it more focused on employee as well as organizational development
y Efficiency of HR department is an important factor to

be taken care of as per the perception of employees .
y Transparency and accountability : making workers a

part of the process and explaining the entire process, its results to the employees would build trust necessary for the successful performance of the process.

Limitation and scope for future study
y Respondent¶s indifference:- the survey was conducted

during the working hours of the company and hence many respondents were not very keen on filling the questionnaire . y No Comparison or Benchmarking with Private Organizations: Since this survey was specifically designed for practices at PSUs, many good practices followed at certain private sector organizations and with industries best practices or benchmarks were ignored. y Questionnaire was generic and not specific for specific departments in order to keep the system less complex. y A comparative study can be done with comparisons to industry¶s best standard.

References
y y y y y

y y y y y y

Boice D. F. and Kleiner B. H. (1997). Designing effective performance appraisal systems, 46(6), pp. 197² 201. Brown M., Douglas H. and Benson J.(2010). Consequences of the performance appraisal experience. Personnel Review, 39(3), pp. 375-396. Chen T.,Wu P. and Leung K.(2011). Individual performance appraisal and appraisee reactions to workgroups. Personnel Review, 40(1), pp. 87-105. Financial Accountability & Management Volume 20, Issue 1, pages 39²55, February 2004 http://www.emeraldinsight.com/journals.htm?issn=01443577&volume=17&issue=5&articleid=849047&show=html&view=print&nolog=397817& (as visited on 4th April 2011) http://www.emeraldinsight.com/journals.htm?issn=01443577&volume=17&issue=5&articleid=849047&show=html on Tuesday April 26th, 2011 http://jom.sagepub.com/content/30/6/881.short (as visited on 4th April 2011) http://www.jstor.org/pss/3110329 (as visited on 6th April 2011) http://www.jstor.org/pss/257969 (as visited on 7th April 2011) http://www.jstor.org/pss/4164995 (as visited on 7th April 2011) http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6WMY-45C0

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