HUMAN RESOURCE

MANAGEMENT

REPORT ON PERFORMANCE APPRAISAL IN

ENERGY/POWER SECTOR

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 TABLE OF CONTENTS

1 INTRODUCTION

2 HR CHALLENGES IN ENERGY SECTOR

3 ISSUES IN PERFORMANCE APPRAISAL

4 180 DEGREE APPRAISAL METHOD

4.1 Benefits of a 180 Degree Appraisal Process to organisation

4.2 Benefits of a 180 Degree Appraisal Process to employees

5 PERFORMANCE APPRAISAL FOR ENERGY/POWER

SECTOR
5.1 Target setting

5.2 KPI’s of Junior Level and Mid-Level Managers

5.3 First Half Year Review

5.4 Final Review

5.5 Final Rating and Feedback

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 PERFORMANCE APPRAISAL IN ENERGY/POWER
COMPANIES

1. INTRODUCTION
The energy industry includes all the industries involved in the production and sale of energy,
including fuel extraction, manufacturing, refining and distribution. Modern world will
consume a lot of energy every day and so energy industry plays an important role in the
infrastructure and maintenance of society in all countries. The energy industry comprises of
petroleum industry, gas industry, electrical power industry, coal industry, the nuclear power
industry and renewable energy industry.
Performance appraisal is an organised formal interaction between a subordinate and
supervisor in a company that usually takes the form of a periodic interview. During
performance appraisal Work performance of subordinate is examined and discussed by the
supervisor and other means and methods. In other words, performance appraisal includes
Measuring, evaluating and influencing job-related attributes, behaviours and outcomes.
Performance appraisals helps in identifying Strength, Weakness and Opportunities for
improvement and skill development of the employee in an organisation. The results of
performance appraisal are used directly or indirectly to determine merit pay increases,
bonuses and promotions of the employees. Performance appraisal methods are often broadly
classified into following types
1.Comparitive Appraisal – Ranking, Paired Comparison
2.Behavioural Appraisal – Graphic rating scales, critical incident, BARS
3.Output based Appraisal

2. HR CHALLENGES IN ENERGY SECTOR

Some of the challenges faced by the HR personnel managers while designing a performance
appraisal system for the companies in the energy/power sector are
• Aging workforce
• Attracting right talent to the industry is difficult.
• Primarily a field-based industry-requires mental attitude that cannot be compared to a
regular desk job
• Highly competitive & working depends on many extraneous factors
• Dynamic approach inbuilt into management practices
Professionals from different corners of the world come to work in foreign countries,
sometimes in remote and isolated locations. Working in these locations and away from family
for long periods of time influences the motivation levels.

3. ISSUES IN PERFORMANCE APPRAISAL

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The main aim of the evaluation system is to identify the performance gap, the shortfall that
occurs when performance does not meet the standard set by the organization as acceptable. It
is to inform the employee about the quality of his/her performance. It simply compares “what
should be” with “what is”.
The information flow is not exclusively one way. The appraisers also receive feedback from
the employee about job problems. While all these aim towards achieving perfection there
may be various errors in the appraisal systems:
 Biased approvals – Whether it is in form of gender, culture or age, biased appraisals
not only affect the employees review but also the organisation. We all have positive or
negative feelings towards someone or some event which in turn results in a biased
feedback. This can make the appraisal efforts inconsistent across different employees.
 Recency – At times an employee’s recent activity makes us ignore his performance
over the year. In such case considering only a single event will create an unfair
situation for others.
 Halo effect - Sometimes you may have a generally positive or negative overall feeling
about an employee, and it’s all too easy to let that general feeling cover the appraisal
of specific performance aspects. It’s important to take each criterion while judging on
the performance levels.
 Leniency, Central and Severity Tendencies - Some appraisers are lenient and score
everyone as above average, while others might score everyone as average, while still
others might tend to score everyone as below average. This may lead to creation of a
performance gap with respect to what the organisation actually wants and will create
an unclear picture of the employee’s strength
 Compare/Contrast – Employees are not to be compared or contrasted against each
other. Instead we should be appraising each individual’s performance against a set of
standards and criteria. Contrast can bring down scores of good performers because if
they are compared against high performers. Good performers may seem average on
comparison to high performers

Some of the most frequently used performance appraisal methods in energy/power companies
are described in a detailed manner in the following section

4. 180 Degree Appraisal Process

A 180-degree appraisal process provides a formal opportunity for appraisers to discuss and record
their views on an employee’s performance. A 180-appraisal process also has the added benefit of
enabling employees to comment on their own performance. This invites a two-way conversation
and helps to ensure a more rounded and objective performance appraisal.

180-degree appraisal provides the opportunity to appraisers to consider their thoughts on an

employee’s performance in the light of the appraisee’s comments prior to the performance
appraisal meeting. An easy way to achieve this is to use a pre-appraisal form.

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As a key part of the appraisal process, this pre-appraisal form should be completed by appraisees
and handed back to the appraiser before the 180-appraisal meeting. Giving appraisers the chance
to see an employee’s comments beforehand helps appraisers to compare and reconcile their own
thoughts on performance with the appraisee’s thoughts.

If organised professionally, one of the greatest benefits of a 180 Degree Appraisal process is that
it is simple to introduce and administer.

4.1 Benefits of a 180 Degree Appraisal Process to organisation

 A professionally designed appraisal process with an appraisal form that suits company
culture will provide the organisation with centralised, structured and consistent
performance assessment data.

 Personal performance data held confidentially by the HR team is an essential resource for
succession planning or promotion discussions.

 If smart objective setting takes place, the performance objectives agreed with employees
can be linked to the team’s and ultimately the organisation’s goals.

 Investing time and resources in a comprehensive 180 Degree Appraisal shows a visible
and tangible commitment by the organisation to developing individuals and improving
performance. This is essential if an organisation wants to retain high performers. Talented
employees tend to expect an organisation to present staff with opportunities for personal
development and promotion. An effective performance appraisal process does exactly that.

 Organisations using 180 Appraisal processes notice an immediate improvement in

communication throughout the organisation.

 Ultimately, the organisation reaps the benefits of higher motivation levels and staff
morale which in turn leads to improved organisational performance.

4.2 Benefits of a 180 Degree Appraisal Process to employees

 A 180 Appraisal meeting provides a formal opportunity for managers to show verbal
recognition and appreciation for an employee’s efforts. It might even lead to recognition in
terms of remuneration if the appraisal process is linked to salary increases and bonus
rewards.

 An open and honest discussion at the appraisal meeting enables appraisers to give
objective feedback on performance. Ideally this feedback is fair and balanced in terms of
good performance and areas that require development. Some managers also use the
appraisal process as an opportunity to invite feedback from employees on their own
performance as a manager.
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  A well-structured 180 Degree Appraisal ensures clear targets are agreed with employees
for the coming year. It also invites discussion and assessment of the previous year’s targets.
This is best achieved through the setting of smart work objectives. Ideally appraiser and
appraisee work together on the development of the appraisee’s personal objectives. If
personal objectives are smart objectives (Specific, Measurable, Achievable, Relevant,
Timely), they are much more likely to be of real benefit to the individual.

 An up to date job description should be used during the 180 Appraisal for reference. This
helps to ensure employees are crystal clear about their role and responsibilities. If the
behavioural competencies required in the role are included on the job description and
referred to on the appraisal form, there tends to be more clarity in terms of the individual’s
performance requirements.

 Appraisees should feel comfortable to use the performance appraisal review to discuss
any problems or grievances they have. Ideally this conversation doesn’t come as a surprise
to the appraiser. The performance review meeting should act as a formal conclusion to such
matters.

 A comprehensive 180 Degree Appraisal includes a discussion about an employee’s

training needs and development plans. Any agreements made on training should be
recorded on the appraisal form.

 If the appraiser conducts the appraisal professionally and appraises are briefed properly
on the benefits of the appraisal process, employees should feel more motivated to succeed,
even when areas for improvement have been discussed.

5. Performance appraisal for energy/power industry:

The entire performance appraisal process for energy/power industry for both junior and mid-
level managers goes through the below steps,
a. Target setting: The first step of performance appraisal process is target setting. In this
stage, clear and measurable standards of performance are set for employees in the
organisation.
b. First half year review: It is held to assess the progress of performance till half year
against the set target. This session aims to provide feedback to enable employee to
understand what he/she is doing well, and what he/she needs to do differently. No
rating is provided in this stage.
c. Final review: It is held during the end of appraisal cycle to review and discuss the
extent of employee’s achievements has been obtained against agreed targets. Each
employee provides a rating to his/her own performance. This is followed by rating
provided Reporting and Accepting officer. Assessment would also be done on
―Personal Attributes― and "Special Achievements by Reporting and Accepting officer.
Feedback would also be provided on the developmental needs.

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 d. Feedback and Developmental Planning: During the Final Review process the
supervisor will discuss employee’s strengths and Areas of Development based on
his / her observations during the year and seek the employee’s self-assessment.

Performance Cycle

5.1 Target Setting

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It is most important stage in the appraisal process. In this stage, we prepare measurable
standards for various performances are set across the organisation. The KPI (Key
Performance Indicators) and rating scale is defined for all the processes in this step. KPI is a
quantifiable measure used to evaluate the success of the employees of an organisation. It
helps the firm to find what is important for the growth of the firm. KPI’s focusses on the
processes and functions which helps to meet the strategic goals and performance targets.
Number of KPI’s depends on various factors like
a. Span of Control
b. Span of Accountability
c. Span of Support
d. Span of Influence
Targets are quantifiable elements which indicates the how much which would define the
meeting expectation performance criteria.

5.2.1 KPI’s of Middle level managers

• Timely delivery of Projects
• Schedule adherence of duties assigned
• Availability and responsiveness of personnel
• Query resolution
• Commitment to team working
• Training
• Effective communication

5.2.2 KPI’s for the Junior level managers

• Continuous Learning
• Project Performance
• Quality
• Adherence to rules
• Goal Orientation

5.3 First Half Year Review

The performance evaluation of the activities done by the employees during the first half
of the financial year (for the period 1 st April to 30th September of the current year) will
be conducted. The appraiser will review the performance of the manager and will
provide feedback to enable the manager to understand what he/she is doing well and in
what he/she needs improvement. Ratings would not be provided for the review of first
half year. The first level of review is done by the manager itself (self-appraisal) and the
second level of review is done by the appraiser.

5.4 Final Review

The performance evaluation of all the activities done by the employees during the entire
financial year (for the period 1st April of the current year to March 31st of the subsequent
year) will be conducted. The appraiser will review the progress of performance and will
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check whether the manager has achieved the target against each KPI’s. The appraiser
then gives feedback to the manager to enable him to understand his strength’s and
weaknesses. The final review will go through self-review of the manager itself, review
done through the reporting manager and accepting manager. If the manager is rated
poor after the final review, the manager will go through another review by an appellate
authority and a moderation committee who decides whether the employee needs to be
retained for further training and development or needs to be terminated.
During the final review process, appraisal can also be done for “personal qualities” or
other “special achievement’s and innovations” for the entire year.

5.5 Final Rating and feedback

Proposed Appraisal Performa

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