A PROJECT REPORT ON

EFFICIENCY AND EFFECTIVENESS OF PERFORMANCE APPRAISAL SYSTEM IN NATIONAL THERMAL POWER CORPRATION LIMITED

Submitted For the Partial Fulfillment towards the Award Post Graduate Diploma Management (JAIPURIA INSTITUTE OF MANAGEMENT, NOIDA) (2010-2012)

Submitted by

Vishal Singh
PGSF1013

PROJECT REPORT ON EFFICIENCY AND EFFECTIVENESS OF PERFORMANCE APPRAISAL SYSTEM AT

NTPC LIMITED (A Government of India Enterprise)

BY

Vishal Singh
PGSF1013

A Report Submitted In Partial Fulfillment of the Requirements of PGDM Program of (JAIPURIA INSTITUTE OF MANAGEMENT, NOIDA)

NATIONAL THERMAL POWER CORPORATION LIMITED (NTPC Ltd.)

DECLARATION
I Vishal Singh, student of final year, PGDM (Services), JAIPURIA INSTITUTE OF
MANAGEMENT, NOIDA, hereby declare that this dissertation entitled “Efficiency and Effectiveness of Performance Appraisal System of NTPC” is based on my original research work and has not been submitted for the award of any other degree and has not been published in any journal or magazine. All the person who helped me during and in the preparation of this report is dully acknowledged. That are published here are purely for academic purpose only.

Vishal Singh
PGDM (Services)

(i)

Prabhat Pankaj and company guide Mr. PRANAV VERMA for their keen interest.ACKNOWLEDGEMENT I feel very proud and happy on completion of this Dissertation. . The satisfaction that accompanies the successful completion of any task would be incomplete without the mention of the people whose consistent cooperation made it possible. this report reached the final state. immense guidance and suggestion at every stage of the dissertation. This dissertation was very interesting and a learning experience for me. I take this golden opportunity to convey my inner gratitude and whole hearted thanks to faculty guide Dr. He provided me necessary inputs and gave me the direction through his guidance to accomplish this dissertation work. under whose constant guidance and encouragement served as the beacon of the lightened crowned my effort with success. VISHAL SINGH PGDM-Services (ii) .

During the course of dissertation. This report has put my lines efforts compiles the data with utmost accuracy and give the views to the best of my judgment. Performance And Competence Excellence (PACE) has been selected to study Performance Appraisal System in the NTPC regarding workers/employees satisfaction and awareness through a project titled “Efficiency and Effectiveness of Performance Appraisal System of NTPC”. A comprehensive study has been done on Performance Appraisal System and its management towards the efficiency and effectiveness of the organization.PREFACE The dissertation report is an integral part of the Post Graduation Diploma Management curriculum of Jaipuria Institute of Management. (iii) . the researcher is expected to use and apply her academic knowledge and gain a valuable insight to know the employees and organizational behavior.

PROFILE OF THE ORGANIZATION 3.FACTS and FINDINGS 9.INTRODUCTION 2.ATTACHMENTS 12. Chapter 2 ::. Chapter 11 ::.PERFORMANCE APPRAISAL SYETEM AT NTPC 5. Chapter 1 ::. Chapter 10 ::.DATA COLLECTION and ANALYSIS 8. Chapter 7 ::. Chapter 8 ::.CONCLUSION 10. Chapter 5 ::. Chapter 12 ::. Chapter 6 ::.SUGGESTION and RECOMMENDATION 11.RESEARCH METHODOLOGY 7.COMPARISION BETWEEN GRADING SYSTEM & MARKING SYSTEM OF NTPC 6.1 TABLE OF CONTENTS Declaration Acknowledgement Preface Summary 1. Chapter 9 ::. Chapter 3 ::. Chapter 4 ::.PERFORMANCE APPRAISAL SYSTEM 4.REFERENCES (i) (ii) (iii) (iv) 5-6 7-14 15-21 22-30 31 33-36 37-43 44-53 54 55-56 57-59 60 .

The Performance Appraisal system has an intrinsic motivational significance that facilitates learning and brings about role clarity which helps people focus on performance development. But to go into further details of the topic. The system suffers from certain drawbacks. .2 SUMMARY This is an attempt to present a progressive detailed discussion on Efficiency and Effectiveness of Performance Appraisal System of NTPC. Some necessary suggestion and some recommendation were given to the corporate body to overcome its weaknesses in this system and build up their strengths. The study observed that the PACE in the organization `is capable to specifically address the developmental needs in order to overcome competency gaps in the employees under appraisal. which gives the true picture of the company‟s driving in a particular year. This system is very important aspect. Earlier in the NTPC grading system was used for appraising the performance of the candidates. a questionnaire and Interview was built and tried to understand the general psyche of the people regarding the Performance Appraisal System operating in the organization. The study comprises of the first the textual connotation of the Performance Appraisal System of NTPC. The PACE system overcome the drawbacks of the previous method of appraising the performance and even and has one major advantage that is it fill ups the communication gap between the appraiser and appraisee and facilitates the two-way communication between the Reporting Officer and the candidate. After observing the result and doing the interpretation a conclusion came out that a new Performance Appraisal System named Performance And Competence for Excellence (PACE) is an effective and efficient. Performance Appraisal System is a method through which total evaluation of an employee‟s performance throughout the year undertaken by his/her own standing in the organization.

CHAPTER 1-INTRODUCTION----- . 1.3 -------------------------------------1.1 --------------------------------------2.2 --------------------------------------2.4 --------------------------------------2. ORGANIZATION --------------------------2.1 --------------------------------------1.no.3 --------------------------------------2.5 ---------------------------------------2. -----------------------------------------------1.6 --------------------------------------11 9 Subsidiaries of NTPC-------------------8 Corporate Objectives-------------------8 Core values-------------------------------7 Corporate Profile------------------------7 An Overview-----------------------------6 CHAPTER 2-PROFILE OF THE 7-14 The company-----------------------------5 Limitation of the study -----------------5 Methods of collecting & their sources 5 Purpose of the study --------------------5-6 Objectives of the study------------------ CONTENTS Pg no.3 (iv) LIST OF ILLUSTRATION Sr.2 -------------------------------------1.4 -------------------------------------2.

4 2.1 at NTPC-----------------------------4.7 ---------------------------------------2.7 PAS ---------------------------------------4.4 ---------------------------------------3.2 ---------------------------------------3.5 ---------------------------------------3.9 ---------------------------------------2. 18 How 20 can Performance Appraisal 17 Methods of Performance Appraisal---16 Steps of Performance Appraisal-------15 Characteristics---------------------------15 Objectives--------------------------------14 CHAPTER 15-21 3-PERFORMANCE 12 Recruitment -----------------------------12 Human Resource Management--------12 Growth so far----------------------------Services and Growth plans-------------- Introduction------------------------------- Problems affecting the validity of 20 4-PERFORMANCE CHAPTER APPRAISAL SYSTEM AT NTPC---------.1 ---------------------------------------3.6 System help? -----------------------------3.22-30 4.3 Excellence (PACE)-----------------------23 Performance 23 22 Earlier Performance Appraisal System Drawbacks of grading system---------- And Competence .10 ----------------------------------------3. APPRAISAL SYSTEM---------------------3.8 ---------------------------------------2.2 -----------------------------------------4.3 ---------------------------------------3.

4 -----------------------------------------6.3 --------------------------------------6.5 ----------------------------------------35 34 33 33 33 6-RESEARCH Research---------------------------------- Type of Research------------------------- Research Design-------------------------- Preparation of Questionnaire----------- Determination of Sample---------------- 7.2 --------------------------------------6.37-43 8. CHAPTER METHODOLOGY-----------------------------------.6 ---------------------------------------4.33-35 6. AND ANALYSIS--------------------------.5 4.5 ---------------------------------------4.7 ---------------------------------------5.1 ---------------------------------------6. CHAPTER 7-DATA COLLECTION CHAPTER FINDINGS------------------------------------------------.44-53 8-FACTS and .4 --------------------------------------4. BETWEEN GRADING SYSTEM & MARKING SYSTEM OF NTPC----------------------------------31 26 CHAPTER 5-COMPARISION 24 Components of PACE------------------24 Steps of PACE---------------------------23 Cycle of PACE--------------------------Objective of PACE----------------------- 6.

55-56 Suggestion------------------------------------------------------------------------55 Recommendation----------------------------------------------------------------55 57-59 10.1 10. ------------------------------------------------60 57 Questionnaire----------------------------- CHAPTER 12-REFERENCES-------- .2 11.6 8. -------------------------------------------------10.1 9. 54 Findings ----------------------------------------------------------------------------52 CHAPTER 9-CONCLUSION--------- CHAPTER 10-SUGGESTION and RECOMMENDATION ---------------------.1 -----------------------------------------12. CHAPTER 11-ATTACHMENTS-----------------------------------------------------11.

To increase the productivity by . To find out the satisfaction level of the employees and areas in which they are not comfortable with PACE and does not find it to be effective. This means that while the results are important the organization should also examine and prepare its human capital to achieve this result. the efficiency and To understand Performance Appraisal    PURPOSE and SCOPE OF THE STUDY The purpose of choosing the topic Efficiency and Effectiveness of Performance Appraisal System of NTPC was aimed for the betterment of the organization in terms of quality as well as quantity. the project named “Efficiency and Effectiveness of Performance Appraisal System of NTPC” has been taken. To study effectiveness of Performance appraisal system of NTPC. SCOPE of the STUDY as follows: 1. So for this reason only.  To compare the past system for performance appraisal with the new Performance management system in order to identify the drawbacks that are overcome by the new system of performance that is Performance And Competence for Excellence (PACE). To find out to what extant the employees find this method effective and efficient in appraising their performance of the employees. A good performance appraisal system should focus on the individual and his development. OBJECTIVES OF THE STUDY  Technique of NTPC.7 INTRODUCTION Performance Appraisal is an objective system to judge the ability of individual employee to perform his tasks. The programme would help the organization in meeting it future personal need. increasing the level of performance. The scope of the study under mentioned points depicts the same. 2. besides helping him to achieve the desired performance.

the investigator cannot know what the truth is. Questionnaire and personal interview was used as a measure of data collection for the study. As employees working there was very busy and so they don‟t have enough time to devote in passing the information for this study. Patna. Primary were Interview while secondary data were Internet Company report Brochures etc. METHODS OF COLLECTING DATA and their SOURCES The method used for doing survey is Sampling method in which Non random (or Probability) Samples are taken for doing survey. a source of bias always persist. Everybody did not respond to the question properly. This technique was inappropriate when spontaneous answers were wanted. omitted essential items and gave the answer casually and it was practically impossible to return such incomplete and unsatisfactory questionnaire to the respondent for the correction. This is a hard core reason no matter how much effort one puts in completing the return.. if the respondent gives wrong replies. SAPLE SIZE The sample size is of 50 employees. The most important problem during the study was time constraints. LIMITATION OF THE STUDY The study conducted the assigned task with full effort and dedication but still the extent of this study was limited. uninfluenced by the discussion of others. The documents of the company was very confidential and everyone could not see it but my company guide helped me lot to his full effort. The programme will help the employee in their personal group by improving their knowledge as well as skill. The study was done with the help of primary as collected through the questionnaire and personal collected through:    well as secondary data. This technique does not provide a check on the honesty and reliability of replies.8 3. where it was important that the views of one person were obtained. from NTPC Ltd. . The major response for the non-response was that the respondents refused to fill the questionnaire. Some respondent misinterpreted the question. Sample sizes of 50 respondents have been selected.

5% is held by FIIs. it has chartered out an ambitious growth plan becoming a 75000 MW + company by 2017. it was incorporated in the year 1975. the corporation recorded a generation of 170. 7th November. Driven by its vision to lead. it is the worlds 6th largest thermal power generator and 2nd most efficient in capacity utilization. It is the largest state-owned power generating company of India. the data collected through questionnaire and personnel interview fulfils the purpose of the study. it contributes 27. through 15 coal base . Domestic banks.88 billion units in 2005 -2006 .75% of the total nationalized capacity. carried out by data monitor UK. NTPC is the 6th largest in terms of thermal power generation and the second most efficient in terms of capacity utilization amongst the thermal facilities in the world . and joint ventures projects spread all over the country . Within a span of 36 yrs. Based on 1998 data. . NTPC has emerged as a truly national power company.5% of the total equity shares of the company and the balance 15. with power generating facilities in all the majors regions of the country. with an installed capacity of 34194 meg watt (MW). THE COMPANY NTPC LIMITED is the largest thermal power generating company of India. NTPC has been dated one of the top most. to accelerate power development in the country as a wholly owned company of the government of India. the company has 17. Forbes Global 2000 for 2009 ranked it 317th in the world.40% of total power generation NTPC has embraced on plants to become a 750000 mw company 2017. 1975. An Indian public sector company. At present government of India holds 84. & 2005 in a row.9 At one stage in this technique the response rate being very low I was left in a dilemma whether the return can be generalized to the whole population or they merely represent the characteristic of the people who have returned the questionnaires.2004.” best employer “of the country for the year 2003. NTPC: An Overview The largest power company of the country has been consistently powering the growth of India. 7 gas base power plant . An ISO 9001:2000 certified company. Despite of all these problems and limitations. Public and others. it was founded on November 7.

Since then. it has developed into a multi field company over the past three decades. NTPC MISSION Develop and provide reliable power. In recognition of its excellent Performance and tremendous potential NTPC has been given the status of “NAVRATNA” by the Government of India. NTPC was among the first public sector enterprises to enter into a Memorandum of Understanding (MOU) with the government in 1987-88. Speedily plan and important power projects with the contemporary technologies  Implement strategic diversification in the areas of R & M. with increasing global presence.  Make available reliable and quality power in increasingly large quantities at appropriate tariffs and ensure timely realization of revenues. related products and services at competitive prices. These achievements have been made possible by the 25944 strong and motivated work forces that their dedications are ever willing to take NTPC to greater heights. Hydro. NTPC became a MAHARATNA Company in May. integrating multiple energy sources with innovative and eco-friendly technologies and contribute to society. powering India‟s growth. HR consulting business today survey 2004. LNG and non-conventional fuels and explore new areas likes transmission on IT etc. 2010. CORPORATE PROFILE National Thermal Power Corporation Limited NTPC VISION A world class integrated power major. one of the only four companies to be awarded with this status.10 It has also been rated as the one of the “best companies to work for India” by merces. Promote prudent acquisition consultancy and make   . NTPC has been placed under the „excellent category‟ (the best category). every year.

with thrust on environment protection rehabilitation and ash utilization Continuously develop competent HR HR VISION To enable our people to be a family of committed world class professionals. eight key corporate objectives have been identified.e. Business portfolio growth  To further consolidate NTPC‟s position as the leading thermal power generation company in India and establish a presence in hydro power segment.  Be a responsible corporate citizen. B-COMIT as follows: B-COMIT       Business Ethics Customer Focus Organizational & Professional Pride Mutual Respect and Trust Innovation and Speed Total Quality for Excellence CORPORATE OBJECTIVES In pursuance of the vision and mission. These objectives would provide the link between the defined mission and the functional strategies. . Making NTPC a learning organization CORE VALUES Core Values of the company are the values of the company. Regarding these values only company perform.11  to make world standards. the following are the corporate objectives of NTPC To realize the vision and mission. The company had taken its core values i.

 technology to drive process efficiencies.g.12    To broad base the generation mix by evaluating conventional and non-conventional sources of energy to ensure long run competitiveness and mitigate fuel risks. Customer Focus     Agile Corporation  Performance Leadership  processes. To expand the future customer portfolio through profitable diversification into downstream businesses. To effectively leverage information To aim for performance excellence in To embed quality in all systems and Human Resource Development . energy consulting. with adequate concern for the interests of the customer.  Continuous and co-ordinate assessment of the business environments to identify and respond to opportunities and threats. distribution. To ensure rapid commercial decision making.  To continuously improve on project execution time and cost in order to sustain long run competitiveness in generation.  To develop a learning organization having knowledge based competitive edge in current and future business.  To effectively leverage information technology to ensure speedy decision making across the organization. coal beneficiation.  the diversification business. growing to be a preferred brand for supply of quality power. inter alia retail distribution and direct supply. trading. distribution consulting. To develop a portfolio of generation assets in international markets. coal mining. management practices. To foster a collaborative style of working with customers. etc. T o diversify across the power value chain in India by considering backward and forward integration into areas such as power trading. using customer specific information. To expand the relationship with existing customer by offering a bouquet of services in addition to supply of power e. transmission. To ensure effectiveness in business decisions and responsiveness to changes in the business environment by:  Adopting a portfolio approach to new business development.

To continuously strive to reduce the cost of capital through prudent management of deployed funds. Research and Development  To pioneer the adoption of reliable. reliable and environment friendly operation of power plants in the country‟s  NTPC‟s core business is engineering. leveraging opportunities in domestic and international financial markets. To build and sustain a learning organization of competent world-class professionals. located across the country. peripheral development and energy conservation practices. To carry out research and development of breakthrough techniques in power plant construction and operation that can lead to more efficient. . construction and operation of power generating plant and also providing consultancy to power utilities in India and abroad.194 Mega Watt (MW) through its 15 coal based and 7 gas based stations.13     To enhance organizational performance by institutional an objective and open performance management system. As on the date NTPC‟s installed capacity is 34. Sustainable Power Development   To contribute to sustainable power development by discharging corporate social responsibilities. efficient and cost-effective technologies by carrying out fundamental and applied research in alternate fuels and technologies. To align individual and organizational needs and develop business leaders by implementing a career development system. To continuously strive for reduction of cost of power generation by improving operating practices. To develop appropriate commercial policies and processes this would ensure remunerative tariffs and minimize receivables. Financial Soundness     To maintain and improve the financial soundness of NTPC by prudent management of the financial resources. To enhance commitment of employees by recognizing and rewarding high performance. To lead the sector in the areas of resettlement and rehabilitation and environment protection including effective ashutilization.

14 SUBSIDIRIES OF NTPC Name NTPC Electricity Supply Company Ltd. (NHL) December 12. 2002 Pipavav Development (PPDCL) Power Co. . to effectively utilize installed capacity and thus enable reduction in the cost of power. Kanti Bijlee Nigam Ltd. Ltd. 2004 For development of a 1000 MW thermal power project at Pipavav in Gujarat. Utpadan April 10. 2002 Foundation Services The business of distribution and supply of electrical energy. NTPC Hydro Ltd. (NESCL) August 21. Its main business is to develop small and medium hydroelectric power projects of up to 250 MW. (NVVN) November 1. NTPC Vidyut Vyapar Nigam Ltd.2008 The company was formed renovate the existing unit and run the plant. 2002 The company‟s objective is to undertake sale and purchase of electric power.

NTPC build up total installed 1982. It has been listed on Indian stock exchanges and in this year only Coal mining block was allocated. coal mining.000 MW 1997. 16% gas. with an installed capacity of 34. GROWTH SO FAR  the government of India.  installed capacity  hydro-electric power project of 800 MW  2004.Established 200 MW unit at 1975. power equipment manufacturing. Bihar SERVICES and GROWTH PLANS NTPC Generates power from coal and gas.000 MW  status of “Navratna”. power trading & distribution with an increasing presence in the power value chain.Set up with 100% ownership by .Government of India conferred 1990.NTPC exceeds the 20. NTPC plans to become a 75 GW company by the year 2017 and envisages having an installed capacity of 128 GW by the year 2032 with a well diversified fuel mix comprising 56% coal.194 MW. (BRBCL) The company is set up for setting up of four units of 250 MW each of coal based power plant at Nabinagar.15 Bhartiya Rail Bijlee November 22. oil & gas exploration.Commenced construction of 2002. NTPC is the largest power generating major in the country. 2003. It has also diversified into hydro power. 9% renewable energy and 8% hydro power capacity. NTPC is well on its way to becoming an “Integrated Power Major”. 2007 Company Ltd. 111% nuclear energy.Awarded BTG contract for first super critical thermal power plant.  singrauli commissioned  capacity of 10.

In this year there was strategic diversification by foray into equipment manufacturing. 2007. This department was earlier known as Personnel department then finally HRS (Human Resource Services). 2010.    HUMAN RESOURCE MANAGEMENT At NTPC people before plant load factor is the guiding philosophy behind the entire gamut of HR policies at NTPC. has a long history in NTPC. The HR Dept. HRS contributes it expertise in handling and executing the existing and developing HR trends and innovations. Following are the areas of operation: Employee Welfare   Relations)    Human Resource Development     Corporate Social Responsibility Rajbhasa Law Peoplesoft.NTPC exceeds the 30. HR Vision: To enable our people to be a family of committed world class professional.HRMS (ERP Software) Employee Services Training and Development (EDC) Performance Management System and Employee Benefits Employee Relations (Industrial . 2009.16  2005.In last year only NTPC became MAHARATNA and Government of India divests 5% of paid up capital. making NTPC a learning organization. They are strongly committed to the development and growth of all their employees as individuals and not just as employees.000 MW installed capacity mark. Long term fuel supply management with coal India for 20 yrs was introduced and initiated bulk tendering of super critical equipment.Rechristened as “NTPC Limited” in line with diversification in business operations beyond thermal power generation.

Leadership Assessment and Development System (LEADS): with a view to developing a pipeline of leaders for key leadership positions in the company. A leadership Development Center (LDC) at corporate center has been launched.17  Public Relations  The HR strategy of NTPC has been designed around the four building blocks of competence building. 1.96 lakhs and the man /MW ratio improved from 0. commitment building. strengthening mutual respect and trust. Total employee strength is 24955 as on 31. profit per employee increased from Rs 59.85 to 0. This has resulted in recognition of NTPC as one of the best employers in the country as well as obtaining consistently high rankings in surveys such as “Great place to work” and “Best companies to work for”.36 lakhs to Rs 72. Culture building is done by creating transparency. sales per employee increased from Rs 1.96 crore. A leadership Development Center has been set up to formulate the process of identifying and grooming potential leaders.77 crore to Rs.03.2010. against 24. Employee Development Centers (EDC) have been set up to cater to the need of appropriate Training and Development of employees.03.82.2009(including employees in JVs & subsidiaries).     Recruitment .713 on 31. High productivity of Team-NTPC: During 2009-10. openness and ease of communication. an initiative named LEADS has been launched. leading to establishment of a people oriented and people sensitive organization. culture building and system building.

ISM DHANBAD and the NIIT‟s to recruit ET‟s. DCE. PERFORMANCE APPRAISAL INTRODUCTION .18 The company recruits every year through a highly competitive ET test. Bits-pilani the IIT‟s and including ITBHU. Every year about 1. It started from the year 2007 to reduce the recruitment cost to the company. the stream wise distribution as follows mechanical engineers -40%electrical engineers 45% instrumentation engineers 10% civil engineers 10% hr and finance 15% the company officials also visit the prestigious institution in the country like Anna university . NTPC won the PSU excellence award 2010 in the best financial performance category.5 lakhs students ticked exam and 500-600 candidates are selected after an interview.

 and the desired performance. A prominent personality in the field of human resources. Improved organizational performance To review the performance of the Self assessment by employee Understanding strength and weakness. According to Flippo. Identifying training and development To judge the gap between the actual To review the performance of the . “Performance Appraisal is the systematic. analyzing and recording information about the relative worth of an employee. Its aim is to measure what an employee does? It is a management tool which is helpful in motivating and effectively utilizing human resources. Goal setting GOAL. OBJECTIVE OF PERFORMANCE APPRAISAL  employees over a given period of time. Assessment human potential is difficult.    needs.  and the desired performance. periodic and an impartial rating of an employee‟s excellence in the matters pertaining to his present job and his potential for a better job” Performance appraisal of an employee during a given period of time and planning for his future. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. To judge the gap between the actual Identifying potential Recognizing achievements. no matter how well designed and appropriate the performance planning and appraisal system is.      employees over a given period of time.19 Performance Appraisal is the process of obtaining.

20  organizational control   Helps to strengthen the relationship and communication between superior. Provide information to assist in the To help the management in exercising   CHARACTERISTICS OF AN APPRAISAL SYSTEM Performance appraisal cannot be implemented successfully unless it is accepted by all concerned. There should be common and clear understanding of the distinction between evaluation and appraisal. It should be concentrated on the job of an employee.  other personal decisions in the organization.   Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. training and development. To judge the effectiveness of the other human resource functions of the organization such recruitment. To provide feedback to the employees regarding their past performance. selection. To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future. Some of the important considerations in designing a performance appraisal system are:        Goal Reliable And Consistent Appraisal Practical And Simple Format Regular And Routine Participatory An Open Rewards Feedback Should Be Timely .subordinates and management-employees. the environment of the organization. To reduce the grievances of the employees. and the employee him or herself.

21     Impersonal Feedback Feedback Must Be Noticeable Relevance And Responsiveness Commitment

PERFORMANCE APPRAISAL SYSTEM: THE PROCESS

STEPS OF PERFORMANCE APPRAISAL
Establishing performance standards

Communicating standards and expectations

Measuring the actual performance

22

Comparing with standards

Disscusion results (providing feedback)

Decision making-taking corrective actions Performance Appraisal involves an evaluation of actual against desired performance. It also helps in reviewing various factors which influence performance. Manager should plan performance development strategies in a structured manner for each employee. In doing so, they should keep the goals of the organization in mind and aim at optimal utilization of all available resources, including financial. Performance appraisal is a multistage process in which communication plays an important role. Steps as follows: 1. ESTABLISHING STANDARDS AND MEASURES- The first step is to identify and establish measures which would differentiate between successful and unsuccessful performances. . COMMUNICATING JOB EXPECTATIONS- The second step in the appraisal process is communicating to employees the measures and standards which will be used in the appraisal process. Such communicating should clarify expectations and create a feeling of involvement. PLANNING- In this stage, m managers plans for the realization of performance expectations, arranging for the resources to be available which are required for attaining the goals set. MONITORING PERFORMANCEIt is a continuous process, involving ongoing feedback. Even though performance is appraised annually, it has to be managed „each day, all year long‟. It should involve providing assistance as necessary and removing obstacles rather than interfering. APPRAISING- This stage involves documenting performance through observing, recalling, evaluating, written communication, judgment and analysis of data. This is like putting together an appraisal record. FEEDBACK- After the formal appraisal stage, a feedback session is desirable. This session should involve verbal

2.

3.

4.

5.

6.

23 communication, listening, problem solving, negotiating, compromising, conflict resolution and reaching consensus. 7. DECISION MAKING- On the basis of appraisal and feedback results, various decisions can be made about giving rewards and punishments. The outcome of an appraisal system should also be used for career development. DEVELOPMENT OF PERFORMANCE- The last stage of performance appraisal is „development of performance‟. Or professional development, by providing opportunities for upgrading skills and professional interactions.

8.

METHODS of PERFORMANCE APPRAISAL
The various methods and techniques used for Performance Appraisal can be categorized as the following methods:  Appraisal  Appraisal Modern method of Performance Traditional method of Performance

Traditional method
         Critical incident method Weighted checklist method Checklist method Graphic rating scale Essay appraisal Management by Objectives Forced choice rating method Performance Ranking method Work standards approach

4. Critical incident method: The critical incident for performance appraisal is method in which the manager writes down positive and negative performance behavior of employees throughout the performance period Weighted checklist method: This method describe a performance appraisal method where rater familiar with the jobs being evaluated prepared a large list of descriptive statements about effective and ineffective behavior on jobs Paired comparison analysis: It is a good way of weighing up the relative importance of options. 5. 360 degree performance appraisal Team Appraisal Balanced scorecard method Behaviorally anchored rating scale 2. . 8. Graphic rating scales: The Rating Scale is a form on which the manager simply checks off the employee‟s level of performance Essay evaluation method: This method asks managers/supervisors to describe strengths and weaknesses of an employee‟s behavior. Behaviorally anchored rating scales: This method is used to describe a performance rating that focused on specific behaviors or set as indicators of effective or ineffective performance. 6. and reward according to the result Forced choice rating method: This method is to rank employee but in order of forced distribution. 3.24 Modern method  (BARS)    Methods of Performance Appraisal are as follows: 1. Management by objective: MBO is a process in which managers/employees set objectives for the employee. 7. It is a no –quantitative technique. periodically evaluate the performance.

Performance ranking method: It is used to evaluate employee performance from best to worst 360 degree performance appraisal: 360 degree feedback is a system or process in which employees receive confidential. 10.25 9. of Identify developments need of an . Balance scorecard method: It is a frequency rating of critical incidents that worker has performed. STANDARDS AND INDICATORS OF PERFORMANCE APPRAISAL             Mutual goal Reliable and consistent Accurate and equitable Practical and simple format Regular and routine Participatory and open Rewards Timely feedback Impersonal feedback Noticeable feedback Relevance and responsiveness Commitment HOW CAN THE PERFORMANCE APPRAISAL SYSTEM HELP?    employee. Promote better understanding of an employee‟s role and clarity about his or her functions. anonymous feedback from the people who work around them. Give a better understanding personal strengths and weaknesses in relation to expected roles and functions. 11.

They continuously give low ratings to their subordinates. Lenient raters consistently assign high values to their subordinates. STRICTNESS ERROR Some other type of supervisors has a tendency to be harsh in their ratings. 4. average constant behavior is not checked. CENTRAL TENDECY This occurs when the rater is in doubt about the subordinates or has inadequate information about them or is giving less attention and effort to the rating process. 5. 2.26  the employee and the supervisor    decisions Increase communication Provide an opportunity for self-reflection and individual goal setting employee with the Establish common ground between Assist in a variety of personnel PROBLEMS AFFECTING THE VALIDITY OF PERFORMANCE APPRAISAL SYSTEM 1. They continuously give low ratings. . This type of error results in wrong evaluation of the Performance of subordinate. 3. HALO EFFECT This type of errors occurs when the rater allows one aspect of a man‟s character or performance to influence his entire evaluation. RECENCY EFFECT Often some raters evaluate persons on the basis of their performance in recent few weeks. LENIENCY EFFECT Some supervisors have a tendency to be easy raters.

poor and very poor or may be in terms of letters like A. In this the performance of the candidate was appraised by employing the method of grading system for appraising the performance of the candidate. The actual performance of the employee is measured against these grades. good. The categories are outstanding. In the method certain categories of abilities of performance are defined well in advance and candidates are put in a particular category depending on their trait and characteristic. . B. D. average. E etc and each letter have its own interpretation on a reporting officer using it. C.27  Objective 1: To Understand Performance Appraisal Technique of NTPC PERFORMANCE APPRAISAL SYSTEM AT NTPC Earlier Performance Appraisal System at NTPC Earlier in the NTPC Grading System is used as performance appraisal system and it was used till 2004.

In the annual report there is a provision for self-evaluation by the appraisee. 3. DRAWBACK OF THE GRADING SYSTEM 1. average. 4. PERIODIC REVIEW The individual tasks will be set and received on a monthly basis as far as possible. The record of task with respect to each individual will be maintained daily/weekly in the format close to prescribed format and in-corporate in the periodic records. good. The format of the performance appraisal report is as follows       without discussion with the candidate  Overall rating assigned Name of the candidate Designation Area of responsibility Job accomplishment Special achievement Obstruction encountered Comment of the reporting officer The appraisal will cover performance during the financial year: The format and the process of appraisal will be the same for all functions and similar for all levels of executives. as the reward for the performance was seems to be not sufficient. The appraisal form is to be filled by all executives who have served for period of at least 3 months in the organization during the financial year.28 In the grading system 5 grades was awarded that are excellent. effective handling of the group. The system will thus take care of both pre-determined and unplanned elements of work. performance was also not known. Special achievements can be the ability in reducing the expenses of a particular department. below average and unsatisfactory. The main aim of periodic reports is that the monthly /periodic reports are translated into an annual assessment will be based on the relative priorities of task/performance norms assigned and fulfilled and extent to which constraints were overcome. An element of dissatisfaction was present. The result of the employee Grades were completely unknown to . and also it was given after 3 yrs. ANNUAL REVIEW Period reports on performance for each employee should be correlated and form the basis for arriving at annual assessment. which was granted to the employee. 2. Promotion was the only reward. the candidate being appraised. The appraiser should have a review discussion with the employee before making his annual assessment. In this method most Weightage was assigned to the special achievement to the candidate during his work by the reporting officer at the time of appraising the performance.

In order to sustain their success in the emerging competitive and set better benchmarks for the industry. PERFORMANCE AND APPRAISAL COMPETENCE (PACE) the performance Management system which was reviewed and implemented in the year 2004 has an important role to play in sustaining and enhancing the performance of the team of professional they have. OBJECTIVES are as follows:  To accomplish the overall organizational vision and mission by linking individual performance to company objectives  To cascade company‟s strategic goals to individual level  To promote professional excellence  To encourage two-way communication between the executive and the reporting officer and bring about transparency in the performance assessment process. PERFORMANCE and COMPETENCE for EXCELLENCE (PACE) Organization today is competing in an extremely dynamic environment. To ensure that the system becomes more effective and efficient equips executives at all levels with skills necessary for subordinate development. Continuous improvement in performance and innovation are essential ingredients for survival and growths. OBJECTIVE OF PACE Philosophy of Performance Management System is to to build a culture of performance by aligning individual and organizational objectives and encouraging open communication and continuous feedback.29 PERFORMANCE AND COMPETENCE EXCELLENCE (PACE) NTPC has set many benchmarks in the Indian Power Sector. PACE is introduced.  To evaluate the potential of the executive to assume higher responsibilities in the organization . It has earned a name for itself for its efficient delivery of results. Underlying this success are the robust systems and processes that have been formulated from time to time. To effectively run this system. They have introduced a new Performance Appraisal System to motivate their employees. NTPC also prides itself for having world class professionals who strive to surpass all targets.

and To facilitate fulfillment of individual aspirations PACE CYCLE (IMPORTANT DATES) Stages of PACE Performance Planning Mid Year Review Annual Assessment Normalization Communication of Scores E1 to E5 1st to 25th January 1st to 15th July 15th Dec to 7th Jan 15th to 31st January 7th February E6 & above 1st to 25th April 1st to 15th October 1st to 25th April 1st to 25th May 31stMay Earlier the performance appraisal system was more of a subjective sort of system i. To translate future skill requirements of the organization into individual development plans To identify high performers and recognize them through rewards and incentives.30     To provide a source of talent for meeting the organization‟s growth requirements through a process of mapping the competencies and potential of executives. earlier there weren‟t any set targets or key performance areas for the employees.. the country‟s largest power producer. . it was just the performance they made and the feedback on it was given to the employees on a yearly basis. Steps of PACE With the aim to boost morale of its workforce and to enhance human resource efficiency.e. has devised a new performance management system dubbed performance and competence for excellence (PACE). NTPC. PACE is a five step process:  Performance Planning  Mid-year Review  Annual Assessment  Normalization Process  Feedback PERFORMANCE PLANNING Performance planning is done through a process of discussion between executive and the reporting officer to arrive at the performance targets for the key performance areas.

head of department. So that other factors affecting performance could be accounted for and a reasonable assessment is made. would have major impact on Business/Targets of the units/functions. measures and allocation of marks to different KPAs will have to be derived and worked out from the Annual performance targets of the project. division.31 In the first step of PACE following parameters are taken into consideration:  Identifying KPAs.  The performance management system brings to focus important managerial attributes and strikes a balance between „performance‟ and other aspects of managerial talents /skills. .  The performance management system provides for appraisal of executive‟s potential to assume higher responsibility and has a Weightage of 15%in appraisal. R &M Plans. corporate plan. functional head. recommendations of study groups.  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.  Identifying functional and managerial competencies for the appraisee. Determination of KPA Key Performance Areas (KPAs) are such critical areas of performance. Measures and Targets. KPAs could be arrived from the business plans for the unit/function. in addition. Therefore a separate diary for details and for monitoring periodically is preferred. The various activities/sub-activities associated with KPAs should be separately discussed including „measures/standards‟ for each of them. which though constitute few in number. WEIGHTAGE ASSIGNED  The performance component as identified and measures evolved would have 50% Weightage in total appraisal. Another source of KPAs are the functional role and responsibility being discharged as unit head. Weightages. Constituents. long term and short term plans etc.  Generic Managerial competencies exhibited by an appraisee while discharging duties have been given 20% Weightage in appraisal. etc. The input for identification of key performance areas. these are only indicative. KPA-Measure should be perfectly fixed on a reasonable range of performance target instead of fixed target. task forces. department and function as the case may be. station.  Executive will have a set of key Performance areas to be identified through discussion and achieve them during the performance period.

allotment of marks should be on a range linked to the extent of achievement of targets whether it is in range of „Good‟. The measure could PART l. optimal utilization of resources.PERFORMANCE  Part 1A: first half year performance  Part 1B: second half-year performance Review of KPAs for 2nd half year  Part 1C: annual performance  Part 1D: comments on performance  PART ll.COMPETENCIES  PART lll. The range of measure for ‟Outstanding‟ is a stretch target which could be achieved by best efforts. „Very Good‟ or „Outstanding‟. Therefore.VALUES  PART lVPOTENTIAL APPRAISAL  PART V. „Very good‟ would be range of performance which would be superior to the „Norm‟ but cannot be classified as „Outstanding‟. Similarly. While identifying KPAs. it is essential to discuss the KPAs. at the beginning of the year. marks are allocated commensurate with performance level.32 The range of performance measurement could be‟ Good‟ which amounts to meeting the „Norm‟.  PART 1. measures and marks awarded to different KPAs by the reporting officer with the appraisee for 1st halfyear performance. Similarly. COMPONENTS OF PERFORMANCE REVIEW The Performance management system. consisting of the following components is implemented through „Performance Appraisal Form‟.PERFORMANCE and POTENTIAL PROFILE   PERFORMANCE o 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. the KPAs and measures are assessed and marks allotted for the 1st half-year and a new set of KPAs. actual „Measures‟ for each KPA is to be defined and written. measure and marks are arrived at for 2nd half-year performance.PERFORMANCE: Part lA: FIRST HALF YEAR o . at the beginning of 2nd half-year. For performance below „Good‟ also.

suggestion scheme etc. The measures for this could be mandays of training & development activities for the unit/department/function vis-à-vis the company‟s training targets.. Realistic and Time-Bound. The idea is to enable the executive to focus on given deliverables and not miss important critical areas. KPAs which o o o o o o  o . based on the nature of the KPA item. Qualitative improvements etc. HR initiatives like professional circles. define measures and allocate marks for each KPA at the beginning of first half-year by 15th April. „Measures‟ for each KPA defined marks allocated. The performance under part 1A is jointly reviewed and performance evaluated at the beginning of 2nd half year and not later than 15th October. One of the KPAs should be “staff development”. Agreed (mutually arrived at by the appraiser and the appraisee). normal standard of performance expected. quality circles. The reworked KPA targets are briefly recorded. concrete and measurable. The aggregate of marks obtained for different KPAs is worked out and indicated as aggregate of 1A. The Appraiser and Appraisee jointly evolve KPAs. Time schedule for achieving KPAs fully/partially. The KPAs should be more focused. They should be more than the “Norm” i. The KPAs reflect „Stretch standard‟ which is in excess of “Norm”. specific. PART 1B-SECOND HALF YEAR PERFORMANCE o 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. At the time of joint review. as building a performing team is an essential target for senior executives. Measurable.33 have quantitative targets. Both the Appraisee and the reporting officer the part lA.e. actual achievement is briefly recorded against each KPA and marks obtained with respect to each KPA is indicated in relevant column. The KPAs should be „SMART‟ i.e. o The KPA targets may be having different Weightages and limited to 8 key Performance areas only.

the actual achievement is assessed against each KPA and marks obtained against each KPA are indicated. PART PERFORMANCE o This part consolidates the 1st half-year and 2nd half-year performance of the appraisee by aggregating performance marks obtained in Part 1A and Part 1B.t.r. Measures. o In PART 1D the reporting officer offers comments w. 1C: ANNUAL o o  o 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. 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. new targets coming up. o The marks so obtained out of 50 would be the marks secured for “Annual Performance” in the achievement of KPAs. It would provide a pictorial The Appraisee and the reporting officer would jointly endorse the annual performance by signatures. o  PERFORMANCE o Part 1 related to performance gets completed on filling up of part 1D by the Reporting officer at the end of Appraisal year. The marks obtained are aggregated at the bottom out of 50 marks as aggregate. PART 1D: COMMENTS ON FIRST HALF-YEAR PERFORMANCE . During the performance evaluation. KPAs.34 extend beyond the 1st half year may be re-recorded in the targets of the 2nd half-year. o o The KPAs may under change owing to target accomplished. Achievements and sums up in brief the performance profile of the appraisee in writing. change of role etc.

The KPA targets may be having different Weightage and limited to 8 key performance areas only. PERFORMANCE DISCUSSION Performance discussion is one of the important activities to be undertaken by the Reporting officer with the Appraisee. It may undergo change owing to target accomplished. The idea is to enable the executive to focus on given deliverables and not miss important critical areas.e. Specific. ANNUAL PERFORMANCE The annual performance consolidates the 1st half-year and 2nd half-year performance of the appraisee by aggregating Performance marks obtained in half-year. It should be more focused. While identifying KPAs. And marks obtained be indicated in the box. The Annual Performance Marks out of 50 marks be computed based on the formulamarks obtained*50/100. The marks so obtained out of 50 would be the marks secured for “Annual Performance” in the achievement of KPAs and in the end appraisee and the Reporting Officer would jointly endorse the Annual Performance by signatures. 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. actual „Measures‟ for each KPA is to be defined and written. They should be more than the “Norm” i. new targets coming up. The KPA should be ‘SMART’ i. the actual achievement is assigned against each KPA and marks obtained against each KPA are indicated. Measurable. The Measure could have quantitative targets.. Realistic and Time-Bound. . All these recording and interpretation is done through SAP for which employees are provided with ID and password. The performance discussion calls for creating conductive 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. the review of KPAs and target setting for 2nd half-year is to be done jointly upon completion of 1st half year and not later than 15th Oct. During the performance evaluation. The KPAs reflect „stretch standard‟ which is in excess of “Norm”. Qualitative Improvement etc. The marks obtained are aggregated at the bottom out of 50 marks as aggregate 1B. concrete and measurable. The process of discussion needs to be given utmost importance and carried out in a conductive atmosphere in order to remove any anxiety or tension in the appraisee. Agreed. change of role etc.35 The system provides for the Reporting Officer (Appraiser) and the executive (Appraisee) to identify and agree upon a set of Key Performance Areas (KPAs) in brief at the beginning of the first half-year.e. time schedule for achieving KPAs fully/partially. based on the nature of the KPA item. normal standard of performance expected.

feedback should be regular feature of performance review rather than reserving it for the end of the performance year. if any. Measures and Achievements and sums up in brief the performance profile of the appraisee in writing. COMMENTS ON PERFORMANCE Part 1 related to performance gets completed on filling up of part 1D by the reporting officer at the end of Appraisal year. therefore. Regional HR and unit HR are responsible for implementation by communicating down the line and facilitating smooth implementation by extending logistic support. active listening is essential. The process of performance discussion is to enable the reporting officer to gather all possible data with respect to performance viz. The Reporting Officer should base the evaluation of the performance based on the data collected during the performance period. Therefore regular performance monitoring review and feedback should be carried out during each half-year. situations that contributed to the performance etc. In Part 1D the reporting officer offers comments with respect to KPAs. It would provide a pictorial description on the performance of the appraisee for the year. accomplishments. the Reporting Officer would bring out summary of Key Performance Areas achieved in the year. understanding the problems faced by the appraisee and actions taken by him for overcoming the same. Similarly. . IMPLEMENTATION OF THE SYSTEM I. the Reporting Officer would bring out summary of Key Performance Areas achieved in the year. The continuous feedback based on the facts gathered during the period would provide adequate opportunity to the appraisee to take corrective steps during the remaining part of the performance period. FEEDBACK: 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. point out of positive personality factors that were observed during the performance. unfavorable situations that were encountered by the appraisee during the period. positive and negative aspects. Feedback should be aimed more at improving and developing the person and should be provided with sufficient descriptive way based on data collected in a non-hurting manner. The feedback should be focused on the specific performance actions and on the personality of the appraisee. While summarizing the performance. favorable 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. The reporting officer would facilitate the appraisee to reflect on the performance and on related issues.. It is therefore desirable to maintain a diary for monitoring the performance and providing feedback from time to time during the relevant performance period. monitoring and retrieval of completed form.36 The reporting officer need to establish rapport with the appraisee by spending initially 510 minutes for discussion on positive aspects. point out positive personality factors that were observed during the performance.

E and letters have its own interpretation by a reporting officer. good. COMPARISION BETWEEN GRADING SYSTEM AND MARKING SYSTEM OF NTPC PAST GRADING SYSTEM Earlier Grading System was employed for Performance appraisal till 2004. c) In present appraisal system job families are identified by identifying their job roles.37 II. c) Certain categories of performance are defined. D. middle level and higher level and in these level only all are divided inti different grades from E1 to E9. a) Earlier Grading System was employed for performance appraisal. III. remove difficulties and ensure completion of appraisal report and sending to corporate center by 15th May every year. average. abilities of d) Categories are outstanding. e) Appraisal will cover Performance during the financial year only. b) In 2004 a new Performance Appraisal System is introduced named Performance And Competence for Excellence (PACE). Employees of grade E1-E5 appraisal is in . b) It is used till 2004.e. B. 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. d) The population of employees are divided into different level i. junior level. Regional head and project head would facilitate implementation by monitoring progress. C. e) Appraisa will cover performance during the financial as well as calendar year. MARKING SYSTEM a) At present Marking system is used for performance appraisal. poor and very poor or A.  Objective 2: To compare the past system for Performance Appraisal System with the new Performance Appraisal System in order to identify the drawbacks that are overcome by the new system of Performance Appraisal System that is Performance And Competence for Excellence (PACE).

But in marking system different candidate get different marks according to their performance and final result is displayed after having a discussion with appraiser and appraisee both and after that also reviewing officer checks the whole marks given that it should not be overrating not under rating it should be given perfectly and honestly. This is also the drawback of grading system. So in PACE only promotion was not only the reward. .38 The main drawback of grading system was dissatisfaction among the employee which had been identified and cleared out to the most extent as employees were not satisfied with the reward for the performance seems to be insufficient. So new Appraisal System had shot out this problem by introducing anew way of rewarding that is PRP ( performance related pay) those who are performing well get good PRP then those who are not performing well. Earlier grades were not known to the candidate being appraised and result was also not known. all the candidates are put in same type of category only.

Non-experimental research posses only one component which is measurement. A little reflection on some of the important variable in educational research – intelligence.experimental and non-experimental. Research is science and a systematic search for pertinent information on a particular topic. A sample survey is also a form of ex-post factory research in which the researchers simply collect the data about the certain psychological or sociological characteristic of the sample that represents the known population. Three essential component of experimental research are control. Non-experimental method cannot be avoided. Experimental method of data collection is ideal though not always possible because of many research problems in the social science and education do not lend themselves to experimental enquiry. manipulation and measurement. One of the common method of survey is non-experimental research is field survey under which comes the sample survey.without manipulation. personality etc will show that they are not manipulability. In fact research is an act of scientific investigation. aptitude. This means that this type of research cannot establish casual relationship. He simply measures the effect on dependent variable as they occur naturally. The researcher does not exercise any control over the extraneous variable. TYPE OF RESEARCH Broadly research can be divided into two heads. .39 RESEARCH Research is the systematic and objective search for the analysis of information relevant to the identification and solution of the specific problem.

PREPARATION OF QUESTIONNAIRE- . RESEARCH TYPE: Non-Experimental (Field survey-Sample survey) SOURCES OF DATA PRIMARY DATA SOURCE  Open-ended Questionnaire  Interviews with manager.in T. measurement and analysis of data. It acts as a standard and guidepost. Various uses of having a research design are as follow1. supervisor and employees in all department of the company. RESEARCH DESIGN A researcher design is the overall plan or programme of research. Internet Company guide How will the data be analyzed and What will be the time. So this project report is designed keeping in view the above parameters of research design. It is the general blue print for the collection.co. 4th edition.N Chhabra.ntpc. place and What is the object of research? What data are needed and how will It provides answer to various 3. It includes an outline what an investigator can do from writing the hypothesis and their operational implication to the final analysis of data. It forestalls the possibility of a fruitless enquiry and act as an insurance against future failure. The data are sought directly from the respondents by a systematic technique of data collection.     SECONDRY DATA SOURCE www.40 The researcher is interested in knowing something about the whole population but cannot study the whole population and he only studies the sample drawn from the populations. which helps the researcher in measuring his/her shortcoming and deviation in actual research later on. questions such as:   these be granted?  sample of study?  interpreted? 2.

 It can be answered at the convenience of the respondent.  It enables the respondent to answer question – perhaps those of personal or embarrassing nature. DETERMINATION OF SAMPLE POPULATUION Men or Women employed in NTPC from grade E1 to E7and above must have knowledge about Performance Appraisal System and their performance is evaluated. helped me never lose sight of the hypothesis to be tested.  The questions were such that which evoked accurate and desired responseswhich contained the information sought. each respondent receives an identical questionnaire. All the available articles and research work were taken into account. The method used was purposive sampling. Nature of population was homogeneous therefore sample of 50 employees were effective to represent it as the total strength of NTPC. by choice . The rule is to gather the data you need but not more than is needed. SIZE: 50 employees SAMPLING METHOD Non random (or probability) samples In which the probability of unit selection is unknown at any stage of the selection process and the selection of unit is based on the judgment of the researcher was selected. These term means selection by design. Exploratory discussion with my guide.  The questionnaire was in a structured format in which the questions were asked from the respondents were very precise and concisely stated in advance. It covers wider geographical area at a relatively low cost per respondent. thus maximizing standardization.  In order to design a good questionnaire all relevant books on the subject were consulted. It present a uniform stimulus to all respondent i.more willingly and accurately.41  Much labor and care was taken in designing the questionnaire to maintain the brevity and accuracy.e. eastern region headquarter Patna is around 100 employee. who had initiate knowledge of the subject. REASON FOR SELECTING QUESTIONNAIRE AS THE DATA COLLECTION TECHNIQUE    It is relatively inexpensive mode of data collection.  Questions provided the subject with the multiple-choice response with four rating. therefore the number of questions was not more. Care was taken to relate all questions intimately to the final objective of the investigation.

This difficulty tends to distort purposive sampling.42 and not by chance. ANALYSIS OF DATA Researcher must breathe life into the cold data by skillful analysis and hence need to follow three steps – editing. The human mind was difficult in recognizing typical items. the survey moved into the field and undertook the fieldwork that is distribution and collection of facts. Data collection can take place in any setting. LIMITATION of SAMPLE SURVEY There are possibilities of the information being biased.  The content of the data obtained in a survey were carefully checked for any possible inconsistencies and incompleteness. non-deliberate bias crept in the form of approximation when respondent were asked to supply information on some past event which they do not exactly remember. COLLECTION OF DATA When planning was completed. It is assumed that the respondents replies generally remain uninfluenced by the setting in which they are given. Bias can be both deliberate and non-deliberate.the data are then coded and tabulated according to the rating in the dummy table. LIMITATION of PURPOSIVE SAMPLING It is not always reliable. few were not considered due to incomplete data entry and few questionnaires were not filled. as a sample survey is extensive in scope. classifying and analyzing the data. REASON FOR SELECTING PURPOSIVE SAMPLING AS THE SAMPLING METHOD It is very simple to draw and involve less fieldwork since those units can be selected which possess the required knowledge on the topic of the investigation. REASON FOR SELECTING SAMPLE SURVEY Sample survey was preferred as the means of data collection to explore the existence of the perception phenomenon. The sample was chosen which was thought to be typical of the universe with regard to the characteristic under investigation.  And then finally tabulated data is interpreted with the help of spreadsheet in excel to reach a final conclusion. Use of standardized response formats in many questions forced respondents to subscribe to statements to which they do not fully endorse.  Then came the careful analysis. The problem was faced as one does not have the considerable knowledge about the population and this problem gets solved with the help of my guide. Use of a representative sample in a survey reduce problems of sample bias and allow generalizing the result to the present population. Such type of sampling was possible because of my guide who already had the necessary required knowledge about the employees that made it easier to recognize typical items in the universe. The total number of questionnaire distributed were 60 out of which only 50 were taken into analysis. . Data are obtained directly from the respondent.

QUESTIONNAIRE Q-1) Yearly evaluation of the performance of the candidate in the system is? Very effective Effective Fairly effective Ineffective 8% 66% 25% 0% .  Objective 4: To find out to what extant the employees find this method effective and efficient in appraising their performance.43  Objective 3: To find out the satisfaction level of the employees and areas in which they are not comfortable with PACE and does not find it to be effective.

44 In the current Performance Appraisal System the performance of the employee is evaluated yearly and the response of employees point out that 8% consider it very effective. Q-2) The marking system adopted in the current performance management system for evaluating performance is? Very effective Effective Fairly effective Ineffective 8 76% 16% 0% Earlier in the NTPC grading system was in operation but now marking system have been adopted and 76% employees consider the marking system to be effective and 16% consider it to be fairly . 66% consider it effective and no one find it as ineffective. So after analyzing the whole data collected find it out that maximum employees are in favor of yearly evaluation of performance.

Q-4) The extent of involvement in setting the key performance area (KPA) in the current performance appraisal system for evaluating performance is? High Satisfactory Average Not satisfactory 32% 68% 0% 0% . Q-3) The manual way involved in filling the form in the performance management system is? Very effective Effective Fairly effective In effective 0% 58% 42% 0% In the Performance Appraisal System the employees required to fill the Performance management system form manually which according to employee 58% consider effective. Thus.45 effective but 8% consider it to be very effective and no one find it to be ineffective. 42% consider it fairly effective and no employee consider it very effective neither ineffective. maximum employees are satisfied with the change from the grading system to the marking system. Thus maximum response was toward manual method of filling the form.

Q-5) Is there any scope present in accomplishing of the group objective? High Reasonably well Partially Not sure 8% 50% 34% 8% the current performance appraisal system for . the maximum employees are satisfied.46 In the performance appraisal system the performance employees are evaluated with reference to the KPAs (Key Performance Areas) which are decided and after the discussion with the employees and the employees views regarding the involvement in the Performance Appraisal System in setting KPAs are 68% consider it satisfactory. 32% consider it high but employees find it as average and not satisfactory. Thus.

Q-7) the performance appraisal system facilitating the two way communication between the reporting officer and candidate is? Highly motivating Reasonably well motivating Not very well motivating Demotivating 16% 84% 0% 0% .47 Every individual is interested in achieving its own individual objective therefore it was tried to find out that whether a particular system helps in achieving group objective and with reference to the Performance Management System employee response were as follow. As observed that more than 50% employees feels that time gap of 6 month is sufficient thus one can say that PAS is effective with regard to this parameter. So. Q-6) The time gap of 6 month provided in re-evaluating the target is? More than sufficient Sufficient Reasonable Not sufficient 8 58% 34% 0% The time gap provided for revaluating the target is considered to be sufficient by 58% employees and 34% consider it to be reasonable but 8% find it more than sufficient and no employee considers it as insufficient.8% considered it high . maximum employee had positive view about the Performance Appraisal system regarding group objective. 50% considered it as reasonably well but 34% were partial and 8% were not sure.

Q-8) Does the competencies identify of the candidate in the performance Appraisal System correlates with the work requirement? Absolutely Partially Reasonably well Not realistically 16% 68% 16% 0% 68% were in favor that the identification of the competencies for appraising the performance of the candidate in the Performance Management System correlates with . As in the view of the employees with regard to the flow of communication between the reporting officer and the employee is rated high.48 The two way communication involved in evaluating the performance of the candidate found to be reasonably well motivating by 84% employees whereas 16% find it highly motivating and it is neither not very well motivating nor demotivating. thus one can say that the Performance Appraisal System facilitates two way communication.

49 their work requirement while 16% consider it to be absolutely and reasonably well and no candidate find it to be not realistically. Q-9) Does the key performance area (KPA) setting in the performance management system correlates with your priority for work? Absolutely Partially Reasonably well Not realistically 26% 42% 24% 8% 42% employees hold a partial view regarding the correlation of KPAs with their work priority whereas 26% employees consider it absolutely and realistically well and 8% consider it to be not realistically. As one observes that more than 50% employees find the Performance Management System to be effective in the identification of the competencies so they are satisfied with the Performance Appraisal System with respect to this parameter. Q-10) Does the identification of the potential of the candidate in the performance appraisal system correlates with the work requisite? Absolutely Partially Reasonably well Not realistically 16% 50% 34% 0% . PMS is not effective with regard to the parameter of correlation of KPAs with their priority for work as less number of employee hold a positive view about it.

FACTS AND FINDINGS 1) Are performance appraisal system in your organization? you aware with the a) b) YES 80% NO 20% .  Objective 5:To study the efficiency and effectiveness of Performance Appraisal System of NTPC.50 In the Performance Appraisal System the potential of the candidate is identified for the purpose of the evaluation of the performance and 50% of the employees hold a view that it partially correlates with their work requirements and 34% consider it to be reasonably well but 16% find it to be absolutely it one can say that the potential of the candidate correlates with the work requirement to some extent.

2) of transparency in the appraisal system? a) b) c) LOW MODERATE HIGH 40% 40% 20% In your opinion what is the degree Interpretation .51 Interpretation According to the survey done 80% employees are totally aware of the performance appraisal system.

70% employees are satisfied by present appraisal system used. 3) appraisal system? a) b) c) YES NO NO COMMENT 70% 10% 20% Are you satisfied with the present Interpretation In NTPC. performance Management System.e.52 Most of the employees are not satisfied with the degree of transparency in performance appraisal. 4) appraisal? a) b) c) YES NO NO COMMENT 80% 10% 10% Do you get any motivation by the . i.

This will help to get better hold on the employee and bring their efficiency. . 5) a) b) Appraisal should be done? Annually Half yearly 40% 60% Interpretation 60% employees say that performance appraisal should be done half-yearly.53 Interpretation On basis of collected data 80% employees are highly motivated by present appraisal system.

54 6) Do departments should have different appraisal forms? you think that different a) b) c) YES NO NO COMMENT 50% 30% 20% Interpretation According to the collected data 50% employees say that different department should have different appraisal form but at the same time 30% have no comment and 20% says no. 7) appraisal system? a) b) YES NO 60% 40% Do you think there is clarity in the .

8) the appraisal system? a) b) c) YES 10% NO 10% NO COMMENT 80% Is direct feedback associated with Interpretation Most of the employees don‟t want to say anything regarding this question? .55 Interpretation It was found that there is 60% clarity in the Appraisal System but at the same time 40% employees do not agree the fact.

56 9) well? a) b) Do you know your job profile very YES NO 95% 5% Interpretation The most of the employers know about their job profile very well. 10) performance appraisal with your boss? a) b) c) Do you talk freely about your YES NO NO COMMENT 60% 20% 20% .

57 Interpretation: 60% of employees are talking with their boss about their Performance Appraisal at the same time 20% have to say nothing about it and 20% say no. . 11) after completion of the appraisal cycle/period? a) b) YES NO 80% 20% Should counseling method be used Interpretation: Most of the people around 80% says that counseling method should be used after completion of the appraisal cycle/period.

as a bonus? YES NO you satisfied with the a) b) 60% 40% . 13) Are monetary linkage of appraising system.58 12) training to the appraiser? a) b) YES NO 70% 30% Do you think that there is a need of Interpretation: 30% employees says that there is no need of training to the appraiser And 70% employees says that appraiser need training.

59 Interpretation: The ratio is 60:40% for satisfaction and dissatisfaction with monetary linkage with the PACE. .

Most of the individuals are satisfied with present appraisal system.e. Internet. PACE removed the drawbacks of grading system. Findings of the project report are as follows:             The Employees of NTPC was not satisfied with the grading system as the reward for the performance was seems to be in sufficient.60 FINDINGS Sample survey is taken for doing the research. Performance And Competence for Excellence (PACE). So grading system was not efficient and effective and there were lots employee dissatisfaction present in the system. . PACE contributes much in motivating much more of the employees. Purposive sampling was taken as the sample in which 50 employees was taken as sample and questionnaire and personal interview was taken as primary source of data. and some books were taken as secondary source of data. More than 50% of employees agree for half-yearly appraisal. PACE brought transparency in to the appraisal system. If any employee is not satisfied with the way he/she being appraised he/she can appeal procedure to cater to those dissatisfied result of the appraisal. When the question asked about appraisal form then 50% of employees agree about the fact that different department should have different appraisal form and 50% are in dilemma. in the year 2004 a new Appraisal System i. For this reason to boost the morale of the work force and to improve company‟s performance. The result of the appraisal is finally linked to the annual Performance Related Pay (PRP). company report. brochure. PACE introduce a two-way method where the appraisee and appraiser discuss the process to ensure both are on the same page.

promotion neither for transfer within the particular branch or across the branches of the organization. The system of grading suffers from few of the drawbacks such as the grades were completely unknown to the candidate even result was not reveal to the candidate and promotion was the only reward provided which is also get due after the three year of service. In order to overcome these limitations NTPC took the initiative and call a external consultancy to devise a new system for appraising the performance.e. PACE and find it efficient and effective. In other words.61 CONCLUSION Knowing how people perform in their work that is their performance level and identifying the work more effectively are essential for any organization. management need to appraisee the performance in order to take the decision regarding the rewarding the employee in order to motivate him or taking the corrective actions. In order to know that whether employees are satisfied with the “Performance Appraisal System” or not.“Performance Appraisal System” which was bought in practice in 2004. Earlier in the NTPC grading system was used for appraising the performance of the candidates. This system overcome the drawback of the previous method of appraising the performance and even has one major advantage that is that it facilitates the two-way communication between the Reporting Officer and the candidate. a survey was conducted with the help of the questionnaire and interview and after analyzing the response of the employees to the question it was found that mostly all the employees are satisfied with the Performance Appraisal System i. management cannot take the decision regarding the need for training. As a result employees were dissatisfied with it. Without such knowledge. . The consultancy devises the performance appraisal system for appraising the performance.

To be followed in letter & spirit after coming out from past knowledge and experience of old Performance Appraisal System. The ideology needs to translated to practices in the organization 13. Moderation may be on scientific manner 10. A copy of Performance Management System shall be given to the employee after signature of the HOD 5. 12. Prepare Do‟s and Don‟ts for new Performance Appraisal System. efficient and result oriented working of the Performance Appraisal System policy. 7. 1. Reporting Officer & Reviewing Officer all sit together for Performance Appraisal System instead of the present two tier system 8. It is felt that there is no difference in the targets. feedback 4. In spite of defined KPA marks are given on % of outstanding criteria (which is 20% presently). It has been drawn that some measures for more effective.62 SUGGESTIONS AND RECOMMENDATIONS SUGGESTION After studying the company‟s Performance Appraisal System. Individual. Matching of Performance Appraisal System of individual & reporting officer 9. The targets of Reporting Officer & subordinates shall be clearly identified/separated. Mark should be integrated with other department. Where work is related with outcomes 6. spirit of Performance Management system 2. Does this mean only 20% employees in NTPC are outstanding & balances are less? This needs to be There should be proper and complete There is a strong need for enhanced Implementation should be in the true . 11. transparency 3. Following are some of the suggestions. which were drawn after the study.

RECOMMENDATIONS Earlier in NTPC the method employed to appraisee the performance of employees was grading system but now marking system has been implemented in the Performance Appraisal System. That is why I conducted a survey through the means of filling the questionnaire and personnel interview by the employee to identify to what extent it is efficient and effective and after analyzing the viewpoint and feedback of the employees I found it to be efficient and effective. Though there are certain shortcomings in the system that can be overcome to some extent by making certain changes in it. So few of my suggestions are as follows Presently in the Performance Appraisal System the performance of the candidate is evaluated annually as a result employees are not highly satisfied with it so the evaluation can be conducted half yearly so that employees can get to know the area in which they are lacking so that they can get the training at the correct time and also get to know their productivity and efficiency as a result their performance improve at a faster rate. Once final scores are given no one tell/ communicates the person cutting of scores. 14.  The Performance Appraisal System should provide sufficient scope to the employee or accomplishment of their group objective along with their individual objective by evaluating their performance in a group because achievement of group objective is also important.63 changed for the proper implementation of Performance Appraisal System in true spirit. The annual way of filling the form or performance report in the current Performance Appraisal System should be replaced by online way of filling the form as it has few inherent advantages such  .

stationary. The Questionnaire has been designed in order to know your opinion about Performance Management System.. Please take a few minutes to fill out the following questionnaire.  ATTACHMENTS 1. In the Performance Management System potential of the candidate identified should correlates with the work requirement and in order to accomplish it the work should be assigned to the individual by identifying his potential. Patna Dear Sir/Madam. included in our PGDM schedule. NTPC Ltd. moral level will be high and he will be satisfied with the work which is beneficial for the organization for accomplishment of its overall objective. efficient and effective way of utilizing resources like human being. The objective of the survey is to know the importance of the system in your opinion and thereby recommending it. Thanking you . Questionnaire PERFORMANCE APPRAISAL QUESTIONNAIRE M/s. Eastern Region Headquarter. interest area so that there is not much wide gap between the potential possessed and requirement of the work and as a result of the correlation the performance of the candidate improves. less paper pilling etc.  The competencies identified by the reporter which correlates with the work should be set after detailed analysis of the work and in consultation with the employee and there should be frequent evaluation and regular discussion with the employee to identify any flaws in the competencies and thereby make the suitable changes. It is of great interest for us to approach you to get some valuable information regarding the Performance Appraisal System of NTPC.64 as less time consuming. Your ideas and suggestions will be greatly appreciated. This is for the purpose of partial fulfillment of evaluation of Dissertation Report. I would like to have your comments. With Regards.

65 Vishal Singh PGDM-S Jaipuria Institute of Management PROFILE OF THE RESPONDENTS Name: Designation/Post: Please tick which of the following features of Performance Appraisal System are you Satisfying with: Q-1) yearly evaluation of the performance of the candidate in the system is?     Very effective Effective Fairly effective Ineffective Q-2) The marking system adopted in the current performance management system for evaluating performance is?     Very effective Effective Fairly effective In effective Q-3) The manual way involved in filling the form in the Performance Management System is?  Very effective  Effective  Fairly effective  In effective Q-4) The extent of involvement in setting the key performance area (KPA) in the current performance appraisal system for evaluating performance is?     High Satisfactory Average Not satisfactory .

66 Q-5) Is there any scope present in the current Performance Appraisal System for accomplishing of the group objective?     High Reasonably well Partially Not sure Q-6) The time gap of 6 month provided in re-evaluating the target is?     More than sufficient Sufficient Reasonable Not sufficient Q-7) The Performance Appraisal System facilitating the two way communication between the reporting officer and candidate is?     Highly motivating Reasonably well motivating Not very well motivating Demotivating Q-8) Does the competencies identify of the candidate in the Performance Appraisal System correlates with the work requirements?     Absolutely Partially Reasonably well Not realistically Q-9) Does the key performance area (KPA) setting in the performance management system correlates with your priority for work?     Absolutely Partially Reasonably well Not realistically Q-10) Does the identification of the potential of the candidate in the candidate in the Performance Appraisal System correlates with the work requisite?     Absolutely Partially Reasonably well Not realistically .

Author: Robert L.com www. 2003 by Cengage Learning in Canada by Nelson Education.google. 2004 by Dhanpati rai & Sons Author: T. 5. THE INFORMATION WILL BE KEPT CONFIDENTIAL. Human Resource Management.N.com http://wikipedia.co. Ltd.ntpc.businessballs. 4. Jackson 2. 7.in www.org/wiki/performance www.Chhabra WEBSITES: 3. Human Resource Management. www. 10th edition. Mathis John H.openlearningworld.citehr. HAVE A GOOD DAY!!!!!! REFERENCES BOOKS: 1. 4th edition.com www.67 Any Suggestions ……………………………………………………………………………………………… ……………………………………………………………………………………………… Signature THANK YOU FOR CO-OPERATING AND SPARING YOUR TIME FOR THIS SURVEY. _appraisal 6.com DOCUMENTS: . 8.

68 9. Material and information through . company guide.