EFFECTIVENESS OF PERFORMANCE MANAGEMENT SYSTEM IN GAIL (INDIA) LIMITED Partial Fulfilment of the Requirements for the Award of Post Graduate Diploma in Management (Recognized by AICTE, Ministry of HRD, Govt. of India) By Ms. Pragati PG-10-052 Batch 2010-12 Under the guidance of Dr. Bhawana Garg INMANTEC, Ghaziabad Integrated Academy of Management and Technology Ghaziabad June, 2011
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EFFECTIVENESS OF PERFORMANCE
MANAGEMENT SYSTEM
IN GAIL (INDIA) LIMITED
Partial Fulfilment of the Requirements for the Award of
Post Graduate Diploma in Management
(Recognized by AICTE, Ministry of HRD, Govt. of India)
By
Ms. Pragati
PG-10-052
Batch 2010-12
Under the guidance of
Dr. Bhawana Garg INMANTEC, Ghaziabad
Integrated Academy of Management and Technology
Ghaziabad
June, 2011
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TRAINING PERIOD FROM 18TH APRIL - 18TH JUNE
SUMMER PROJECT REPORT
ON
(A Government of India Undertaking-A Navratna
Company)B-35, 36, Sector-1, Noida | PRAGATI
EFFECTIVENESS OF PERFORMANCE
AGEMENT SYSTEM
IN GAIL (INDIA) LIMITED
Submitted by: PRAGATI PGDM (HR) INMANTEC BUSINESS SCHOOL Guided by- Mr. M.BAA
GAIL (INDIA) LIMITED
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ACKNOWLEDGEMENT
“Vital to every operation is co-operation” I really agree to this wonderful quotation put
by Mr. Frank Tyger. This project was successful due to the co-operation extended
by people who have truly contributed towards it.
Words aren‘t enough to express my gratitude to all those who helped me through- out my
Training period.
With deep regards and humble respect I would like to thanks Shri M. Baa DGM (HR),
Mr. U.P .VAIDYA Chief Manager, (HR) GAIL (India) Limited who provided me an
distinctive opportunity to work at GAIL (India) Limited.
I would like to express my humble thanks and regards to Mr. I.K. Kothari,
Crude oil production from the deepwater block D6 in KG Basin
· Use of improved technology
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· Extended oil field acquisition activities
· Capacity utilization of refineries
· Foreign company collaboration
· End-user market and Infrastructure development
· Setting up oil & gas courses at universities and training institutes
· Opportunities for world-class service providers
Initiatives
National Auto Fuel Policy
The Auto Fuel Policy aims to comprehensively and holistically address the issues of
vehicular emissions, vehicular technologies, and auto fuel quality in a cost-efficient
manner while ensuring the security of fuel supply. The policy objectives are:
(i) Ensure sustainable, safe, affordable and uninterrupted supplies of auto fuels of right
quality to support social and economic development. One of the key factors for meeting
this policy objective is to diversify the sources and reduce dependence on any single
source of supply.
(ii) Over the years, infrastructure for the import of crude and crude products, their
processing and production, and storage and transportation has been created in the
country. Considerable investment has been made in developing this infrastructure and the
logistics for the distribution of petroleum products in the country. The Auto Fuel Policy
is committed to an optimal utilization of such an infrastructure.
(iii) Assess the future trends in emission and air quality requirements from the view point
of public health, and establishment of a consistent framework within which different
policy options to reduce emissions can be assessed. It is, therefore, required that
environmental objectives for air quality be determined, emission reduction targets be
established, input data on costs and benefits be collected and cost effective measures to
reduce emissions be identified .Appropriate institutional arrangements to be put in place
to where such activities can be handled effectively.
(iv) Adopt such vehicular emission standards that they together with other measures, will
be able to make a decisive impact on air quality, without placing an undue burden on the
people.
(v) Vehicular emission standards and auto fuel quality should offer choice to the citizens
and equally a choice to automobile manufactures in matters of technology selection.
Principles of widening the choice and promoting competition amongst automobile
technologies, within the limits that are imposed by the availability of auto fuels and
security of their supplies.
(vi) As elsewhere in the world, the Government should decide only the vehicular mission
standards and the corresponding fuel specifications without specifying vehicle
technology and the type of fuel.
(vii) The requirement of investments to reach vehicular technology and fuel quality of
Euro III equivalent levels throughout the country is estimated in the range of Rs. 50,000 -
Rs. 60,000 crore. Therefore, to achieve the air quality targets by gradually improving
emission standards and a phased up gradation of fuel quality and vehicular technology,
taking note of the financial, technical and institutional considerations as also the
absorptive capacity is required.
FDI Policy
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The present policy on FDI in the Petroleum & Natural Gas sector vide Press Note No 5
(2008) permits FDI up to 100% under the automatic route in all activities other than
refining and including market study and formulation, investment/financing, setting up
Infrastructure for marketing in Petroleum and Natural Gas Sector subject to sectoral Policy.
In Refining, FDI up to 49% in case of Public Sector Undertakings, without involving any
Divestment or dilution of domestic equity in existing public sector undertakings through
Foreign Investment Promotion Board (FIPB) and FDI up to 100% is permitted in case of
Private Companies under Automatic route subject to sectoral policy.
Key Players: Indian Oil, Reliance, Bharat Petroleum, HP, ONGC, BP, BG Group, Gaz
de France, Chevron
Foreign Direct Investment (FDI) Policy
The present policy on FDI in the petroleum & natural gas sector vide press note no 5
(2008) permits FDI up to 100% under the automatic route in all activities other than
refining, investment/financing, setting up infrastructure for marketing in petroleum and
natural gas sector subject to sectoral policy including market study and formulation.
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INTRODUCTION TO GAIL HR
The HR department comprise of two broad sections i.e., Human Resource and Human Re-
source development. The Human resource group integrates in it various functions like Indus-
trial relations, employee services, policy, security and administration. On the other hand
when we see the Human resource development section, it integrates recruitment, performance
management group, career progression department, library maintenance, training & develop-
ment group.
The IR departments here deal with grievances of the employees and solve them with the help
of their grievances redressal system. They generally deals with the two of their collectors i.e,
GAIL officers association (GOA) which is for executives and the other is GAIL officers as-
sociation which is for executives and the other is GAIL karamchari sang (GKS) which is for
non executives. GAIL also has a online workflow through which employees can put their
grievances to their respective Site HR , Corporate HR and Director HR, the advantage to
making the system online is to enrich the system with features like traceability and accounta-
bility, when the user login to system, he fills the grievances form and submits then the system
will generate the automatic registration number and also a link through which he can take the
printout of his registered grievances, the system generates mail is automatically sent to the
Site HR and the Site HR will revert back with relevant solutions in due consideration of his
seniors.
The employee services department in GAIL takes care of employees salary, claims, leave
records, loans and advances, maintenance of files, lease and accommodation, registration,
retirement and probation cases. There are several allowances given to the employess which
includes children education assistance scheme, city compensation allowance, productivity
allowance, dearness allowance, annual and promotional increment, transport subsidy. Ad-
vances like HRA , conveyance allowance , TA , DA ,work location related payments, transfer
benefits. Recruitment department carries out the important work of meeting, manpower needs
in GAIL in the company it is done through a proper recruitment policy, GAIL recruits
through two different ways:
1. By visiting campus 2.Open recruitment on all India bases
33% are taken from the campus and remaining is recruited on all India bases by conducting a
written test. There is a procedure for the site recruitment on the state level basis. The compa-
ny has assigned his task to a single recruitment team. First of all these recruitment are calcu-
lated which is done with the help of standard mapping template of the every different location
of the company. As per the policy the entry levels for the executive level are E1, E2, & E5.
But at times at any other level employees can be recruited that depends on the situation. At
staff level employees are recruited at S0, S3 & S5 levels. The pay packages given in the cam-
pus or all India basis recruitment are kept uniform. It can differ from location to location. As
GAIL is a PSU it also follows the reservation norms. The job specification is done exquisite-
ly. The various steps in the process are:
1. Online filling of application form
2. Scrutinizing the application form
3. Rejection of the application if eligibility is not met
4. Written test is conducted
5. Calling for interview
6. Interview
7. Selection
The interview panel consists of the board member, member of
SC/ST, and also from the specialization for example – HR, Finance, Marketing etc.
The main objectives of the recruitment/selection in GAIL is to plan the manpower
recruitment and budget requirement of requisite human resource with necessary qualifica-
tions, skills, aptitude and experience, to focus on the proper placement of employees in jobs
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to which they are best suited taking into account their qualification, experience and apti-
tude.Generally the sources of recruitment which prevails in GAILs are:
Open recruitment on all India basis
From reputed management institutes
Open recruitment other than All India basis
There are three induction levels for executives where intake is done i.e.,- S0, S3, S5 for non
executives and E1, E2, and E5 for executives. However, depending upon specific require-
ment appointment may be made at other than the induction level with the approval of Direc-
tor. In the campus selection of the candidates the selection process includes group discussion
followed by interview whereas when recruitment is done other than campus selection the re-
cruitment process also includes written test followed by interview. The selection committee
shall consist of not less than four members including the SC/ST representatives, wherever
required. The appointing authority varies from post to post for example for E8 level it is
Board of Directors, for E6-E7 it is the CMD, the appointing authority for the post of E1-E6
levels will be functional Directors, for S5-S6 the GM and for S4 and below is looked after by
DGM. The rosters are maintained to make some seats available for reserved categories.
Training and Development department deals with the development and training of the staff to
meet the requirements of the company. The main focus of this section is : -
Develop and design manpower development strategies and interventions in
Technology and Management Areas.
Research and Technology Development for effective processing, transmission
and utilization of Natural Gas.
Cover a wide spectrum of technical training programs and develop innovative,
environment-friendly energy technologies and sources.
The quality objectives aim to provide a congenial learning environment and development of
human resources. The aim of training and development section is to create total quality cul-
ture in terms of people, products and services, work life, safety, energy and environment.
It is fully equipped to train manpower at all levels covering the entire range of activities re-
lated to gas transmission, petrochemicals and telecommunication. It shares the vision of
GAIL and invites employees to join and further sharpen the knowledge, skills, attitude and
the understanding of new technology.
They are committed to impart internal or external training to all employees once a year and
also committed to exposing the senior executives so international institutes of repute once
every four years.
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PRISE SCHEME
Prise scheme deals with attaining higher levels of productivity, growth and prosperity of the
Company by motivating and rewarding employees based on performance of individual, Work
Centers and Company. All employees including Functional Directors and Company Trainees
appointed on regular pay scale, deputationists to GAIL from Government/ PSUs opting for
GAILs pay structure and GAIL employees on deputation secondment to Government / PSUs/
Joint Ventures will be eligible in terms of PRISE. The payments under PRISE shall be related
to actual period of service rendered during the relevant financial year. PRISE payments in
respect of deputationists to GAIL (except those who have opted for GAILs pay structure) are
to be regulated in accordance with the terms and conditions of their deputation in GAIL. In
case of any doubt, matter along with relevant supportive documents may be reffered to Cor-
porate Office for review.
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Literature review on PMS Literature survey and details on Performance Management System
Performance appraisal is a formal structured system of measuring and evaluating an em-
ployee‘s job related behaviors and outcomes to discover how and why the employee is pre-
sently performing on the job and how the employee can perform more effectively in the fu-
ture so that the employee organization and society all benefit
According to Flippo ―performance appraisal is the systematic, periodic and an impartial rat-
ing of an employee‘s excellence in the matters pertaining to his present job and his potential
for a better job." The work performance of the subordinate is examined and discussed in the
form of periodic interview with a structured formal interaction between a subordinate and
supervisor to identify weaknesses and strengths of the subordinate as well as opportunities for
improvement and skills development. The performance of each and every individual em-
ployee plays a major role to achieve organization goals and to sustain its growth in the
present competitive world. The employee‘s performance should assess continuously to make
their contribution to higher extend.
Objectives of Performance Management System
➢ To review the performance of the employees over a given period of time.
➢ To judge the gap between the actual and the desired performance.
➢ To help the management in exercising organizational control and provides feedback to -
the Employees regarding their past performance.
➢ To help strengthening the relationship and communication between superior and
Subordinates, management and employees.
➢ To diagnose the strengths and weaknesses of the individuals so as to identify the
training and development needs of the future, it also helps to reduce the grievances of
the employees
➢ Provide information to assist in the other personal decisions in the organization.
➢ Provide clarity of the expectations and responsibilities of the functions to be performed-
by the employees. It helps to judge the effectiveness of the other human resource
functions of the organization such as recruitment, selection, training and development.
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Purposes of PMS
FACTOR PERCENTAGE (%)
Payroll Compensation benefit 80
Training department needs 71
Healthy cause of gaping performance 76
Deciding future goals 42
Performance demotion & transfer 35
Other purposes 6
Fig: - Michael Armstrong PMS
UNDERSTANDING PERFORMANCE MANAGEMENT There are five issues that need to be considered to obtain a full understanding of performance
management:
1. The meaning of performance;
2. The significance of values;
3. The meaning of alignment;
4. Managing expectations;
5. The significance of discretionary behavior
80
7176
42
35
6
0
10
20
30
40
50
60
70
80
90
Payroll Compensation
benefit
Training department
needs
Healthy cause of gaping
performance
Deciding future goals
Performance demotion &
transfer
Other purposes
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The sources of performance appraisal are
➢ Manager and Supervisor Appraisal
➢ Self-Appraisal
➢ Subordinate Appraisal
➢ Peer Appraisal and Team Appraisal
➢ Customer Appraisal
What is Performance Management? There are few comprehensive definitions of Performance Management. HM Treasury de-
scribe Performance Management as ―Managing the Performance of an organization or indi-
vidual‖. Whilst this is not a precise definition grounded in literature it demonstrates the
breadth of performance management and hence the difficulties in defining its scope, activities
and practices. It demonstrates that performance management is concerned with the manage-
ment of performance throughout the organization and as a result is a multidisciplinary activi-
ty.
Further, in their Glossary of Performance Terms
the Improvement Development Agency fur-
ther suggest that
“it involves you understanding and acting on performance issues at each level of your
organization, from individuals, teams and directorates, through to the organization it-
self.
As well as involving performance measurement, systems and processes, performance
management is about managing people and „the way people within an organization op-
erate and work together‟. Issues such as leadership, decision making, involving others,
motivation, encouraging innovation, and risk taking are just as important to bring
about improvement”
This definition further demonstrates the breadth of the subject highlighting some of the ac-
tivities involved in managing performance, requiring a range of different skills and functional
approaches. This provides challenges of terminology when we discuss the subject. Academic
research in particular tend to be undertaken in functional subject areas and often within or-
ganizations managers sit in functions and take a functional perspective on the subject of per-
formance.
Despite this the clear multidisciplinary, the field of performance management has developed
from diverse origins. Different measurement and management techniques and approaches
have developed independently. Financial and particularly management accounting have been
concerned with measuring and controlling the financial performance of organisations, opera-
tions have been concerned with ―shop floor‖ performance often focusing on improving
throughput and efficiency whether that be from a manufacturing or a service perspective,
strategy have been concerned with developing plans to deliver future objectives (including
planned performance) and personnel (or HR) have been concerned with managing the per-
formance of people. It is relatively recently that performance management from these dispa-
rate disciplines has begun to converge and recognize the need for integration into a multidis-
ciplinary approach to managing performance.
The management discipline which most often associates itself with the term is in Human Re-
sources, performance management is often associated with the management of the perfor-
mance of people. However even in the HR field best practice emphasizes the contribution of
people to the achievement of organizational performance. From the HR field Armstrong and
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Baron
highlight the importance of performance management being strategic, integrated (ver-
tical, functional, HR integration and integration of individual needs), concerned with perfor-
mance improvement and concerned with development.
The breadth of the subject area and lack of a concise definition make it difficult to identify
the boundaries of what is and isn‘t performance management. The area which is most indica-
tive of the evolution of performance management, and the area perhaps has the most identifi-
able stream of literature is that of performance measurement, and in particular that of the Ba-
lanced Scorecard, with which in many people‘s eyes it has become synonymous. The Ba-
lanced Scorecard began life as an operational tool designed to measure and helps improve
operational performance in a manufacturing organization. Once discovered by an accounting
Professor, Bob Kaplan, its scope broadened to the measurement of organizational perfor-
mance. It has now developed from a measurement tool into a strategic performance manage-
ment approach of which measurement is but a small part. Balanced Scorecard is a much used
and abused term, in the field but it is the most identifiable concept. However in order to study
performance management the comprehensiveness of the subject must be reflected, recogniz-
ing its vertical and horizontal spread throughout organizations.
With its origins in different management disciplines, performance management includes a
variety of activities including the planning and execution of actions required to ensure per-
formance objectives are achieved. Literature is drawn from various disciplines to reflect this.
Approaches to performance management Performance management and measurement are closely associated with the rise of interest in
Management by Objectives (MBO) from the 1950s onwards. MBO involves senior managers
setting indicators and targets in relation to desired outcomes but allowing local managers the
autonomy to innovate to achieve these. However, more contemporary authors suggest that
performance measurement is often used to insert more rigid controls over organisational
processes to standardize delivery and improve efficiency. Integrating performance measure-
ment with organisational learning provides an opportunity to learn lessons from previous de-
livery, confirming or denying underlying assumptions which act as a guide to action. Perfor-
mance measurement in the public sector has been implemented generally
in the context of increasing privatisation of public services and as a mechanism to ensure that
contractors or public sector arms length delivery organisations act in the ways that the pur-
chaser of services would want. Other prominent objectives underpinning performance mea-
surement in the public sector relate to the potential to use performance data to aid public and
political accountability. Performance measurement systems take different types of perfor-
mance indicators and attempt to link them together, particularly to show the relationship be-
tween inputs (the resources devoted to a particular issue), outputs (the immediate results of
activity, such as the number of interventions completed) and outcomes (the ultimate effects of
interventions).
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Example performance measurement systems
I. ‗Balanced Score Cards‘
II. ‗Performance Prisms‘.
Balance Score Cards
Performance measurement does though have some acknowl-
edged problems; notably the diversion of resources into data collection and measurement as
opposed to delivery and so called ‗perverse incentives‘ where individual or organizational
behaviour is diverted away from the ultimate objectives of the organisation. Performance
measurement in Public Employment Services The role of the PES is to facilitate the bringing
together of the supply and demand for labour, through both ‗passive‘ and ‗active‘ measures.
Research on the use of
performance measurement in PES suggests that it is widely used but that there have been
many instances of common problems including perverse incentives to encourage ‗creaming
and parking‘ behaviour where easy to place clients are prioritised over those requiring more
help and who are arguably a more appropriate focus for PES attention. There is also a con-
cern in the literature to avoid incentivising PES and their contractors to promote short-term
rather than long-term outcomes, with some suggesting that longer-term measures of the
sustainability and/or quality of employment gained as a result of PES interventions are
needed to address this concern. The last decade has also seen a number of different initiatives
in Europe to compare performance, for instance through the European PES Benchmarking
Project.
The performance frameworks identified display a number of key characteristics that help
an organisation to identify an appropriate set of criteria against which to assess and manage their
performance24
:
- The work of Kaplan and Norton (1992); and Keegan et al. (1989) emphasises the fact that the
set of measures used by an organisation has to provide a "balanced" picture of the busi-
ness. The set of measures should reflect financial and non-financial measures; internal and
external measures; and efficiency and effectiveness measures.
- The populated framework of measures should provide a succinct overview of the organisa-
tion’s performance. For example, the simplicity and intuitive logic of the Balanced Score-
card has been a major contributor to its widespread adoption as it is easily understood by us-
ers and applied to their organisation.
- Each framework demonstrates the need for organisations to implement a set of performance
measures that is multi dimensional. This reflects the need to measure all the areas of per-
formance that are important to the organisation‘s success. However there is no consensus
over what the dimensions of performance are. The EFQM model provides the broadest
indication of dimensions of performance to be measured.
- The Performance Measurement Matrix (PMM) provides comprehensiveness. It is possible
to map all possible measures of an organisation‘s performance onto the framework and
identify where there are omissions or where there is a need for greater focus. However,
the PMM provides little indication of the different dimensions of performance that should
be measured.
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- The Tableau de Bord, along with the work of Bititci et al. (1998), explicitly demonstrates
the fact that performance measures should be integrated both across the organisation's
functions and through its hierarchy, encouraging congruence of goals and actions.
- The Tableau de Bord and the work of Fitzgerld et al. (1991) explicitly, and the Balanced
Scorecard and Performance Pyramid implicitly, explain how results are a function of
determinates. This demonstrates the need to measure results and drivers of them so that
the performance measurement system can provide data for monitoring past performance
and planning future performance. This demonstrates the way in which measures contri-
bute to an organisation‘s planning (feed forward) and control (feedback) system (Ballan-
tine and Brignall, 1994).
Evolution of the Scorecard Concept By far the most well known and accepted approach to organisational performance manage-
ment is the Balanced Scorecard. Some writers have suggested that 60 percent of Fortune
1000 companies have experimented with the BSC (Silk, and the latest data, from the Gartner
Group, suggest that over 50% of large US firms had adopted the BSC by the end of 2000).
Data collected by the Balanced Scorecard Collaborative suggest that of the firms not current-
ly using the Balanced Scorecard, 43% are planning to use one soon. In a survey of manage-
ment techniques and tool in 15 countries in North America, Europe, Asia, and South America
Rigby (2001) finds that about 44% of organisations in North America utilise the BSC.
Although when first introduced in 1992
it was promoted as a performance measurement sys-
tem, the Balanced Scorecard has evolved somewhat. That evolution highlights some impor-
tant issues regarding the management of organisational performance.
Originally the Balanced Scorecard prompted users to
identify an equal number of measures in each of four perspectives: Financial perspective;
Customer perspective; Internal perspective; Innovation and Learning perspective. This dem-
onstrated the need to balance financial and non-financial measures; internal and external
measures; leading and lagging measures; and short and long-term measures. The approach
encouraged managers to overcome the shortcomings of traditional financial measurement and
ensuring that managers don‘t take a narrow view of performance based on too few measures.
Performance PRISM
Designing performance measurement systems is all about
deciding which measures to select, and just as importantly, which measures to ignore. The
principle behind the Performance Prism is that the number of measures should be limited to
give clarity to what the organization is trying to achieve. Therefore The Performance Prism
approach helps to build a stakeholder focused measurement and management system by ans-
wering a number of key questions:
Stakeholder satisfaction .Who are our key stakeholders and what do they want and need?
Stakeholder contribution. What do we want and need from our stakeholders on a reci-
procal basis?
Strategies. What strategies do we need to put in place to satisfy these twin sets of wants
and needs?
Processes. What processes do we need to put in place to enable us to execute our strate-
gies?
Capabilities. What capabilities do we need to put in place to allow us to operate and im-
prove these processes?
It should be noted that the Performance Prism is not a
prescriptive measurement framework. Instead, the Performance Prism is a tool which can
be used by management teams to influence their thinking about what the key questions
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are that they want to address when seeking to design their performance measures and
measurement systems, and so manage their business. This approach it is argued, would
satisfy both the resource-based theory of the firm (i.e. what resources form the firm) and
the resource dependency view (i.e. what resources are critical to obtain). By using this
approach organisations can explicitly link the processes that they undertake to the wants
and needs of their stakeholders. At this level it is possible to make decision about priori-
ties and objectives for individual activities and processes, and understand how actions at
that level will affect stakeholders and their satisfaction. As management systems are de-
signed to support the achievement of the organisation‘s strategy it is important that when
the organisation‘s strategy changes so do the measures used to assess whether it is being
executed. So regardless of the framework used to develop the original measures, over
time these should change to reflect the organisation‘s changing circumstances and hence
a measurement and management system should always be bespoke to reflect the strategy
being pursued. The performance measurement revolution has prompted many organisa-
tions to implement new performance measurement and management systems, often at
considerable expense. However, unlike the environment in which organisations operate,
many such initiatives appear to be static. Senge (1992) argues that, in today's complex
business world, organisations must be able to learn how to cope with continuous change
in order to be successful. Goold and QuinnTP41PT ―in business that face rapidly chang-
ing environment, or in which strategy needs to change frequently and opportunistically,
fixed strategy goals may be dysfunctional (they might conflict with a skilful manager‘s
powers of intuition and judgement).‖ Further, Meyer and GuptaTP42PT argue that a
number of factors, especially the tendency of performance measures to run down or to
lose the capacity to discriminate good from bad performance, trigger ongoing creation of
new performance measures different from and therefore weakly correlated with existing
measures.
Kennerley and Neely
go on to identify the capabilities
necessary to maintain a dynamic measurement system which changes to reflect the orga-
nisation‘s circumstances. These capabilities fall under the categories of Process, People,
Culture and Systems.
How should performance be managed?
Identifying the right objectives and hence the right things to manage is all well and good, but
without an effective decision making and action planning process it is a waste of effort. Fur-
thermore research by Ernst and Young on the ‗Measures that Matter‘44
found that investors
find strategy execution the most important factor when valuating companies, more important
than the quality of the strategy being implemented. Despite this, relatively little attention is
dedicated to the integration of planning (what should be managed) and execution (how
should it be managed).
Processes and Systems for Managing Performance It is common to see performance reports used by Executives which consist of tables of data or
limited visualisations of data which provide little insight into the actual performance situation
or action that is required to improve.
In the field of quality management, the Demming Cycle (sometimes known as the Shewhart
or PDCA Cycle) is a well established improvement methodology which incorporates four
stages Plan, Do, Check, Act. Primarily the Demming cycle is applied to individual processes
however its constituent phases lie at the heart of performance management as they integrate
planning, action and monitoring of performance to ensure continuous improvement and the
achievement of objectives. Furthermore the Demming Cycle is all about learning – learning
in a systematic way what works and what does not
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Extension of the Demming cycle principles to organizational level performance management
can bring problems be problematic. It has become increasingly difficult to convert the large
amounts of data available into meaningful information. Managers today complain of ―drown-
ing in data while thirsting for information‖. Organizations seem to be generating data at a
much faster rate than any manager can master, and in parallel to that, the useful life of that
data is collapsing. ―One of the most enduring traits of the information age is that we have fo-
cused too much on mastering transaction data and not enough on turning it into information
and knowledge that can lead to business results. If the skills and knowledge of executives is
to be fully exploited then the performance review process should focus their attention on dis-
cussing the issues raised by the performance measures and the actions necessary to meet or-
ganizational objectives, rather than trying to interpret what the measures actually say. To ad-
dress this authors such as Newman, Rasiel and Friga
and Kimberley and Bourne
propose ap-
proaches which extend concepts in the Demming cycle process so that it integrate perfor-
mance measurement into the broader performance management activities by ensuring there is
a systematic approach to identifying objectives; collecting, analyzing and interpreting data;
communicating insights; making decisions; and monitoring performance to ensure that objec-
tives are achieved. Furthermore, Marchand et al
highlight the need to integrate IT, people and
practices to deliver insights and business results. This can be achieved by focusing on report-
ing insights to executives rather than performance data in practice this means:
Restructuring meetings based on the objectives of the organization.
Focusing the agenda on the key performance outcomes represented on the organiza-
tion‘s strategy map. The agenda should be a series of key questions for each of the
key objectives i.e. ‗Is the objective being achieved?‘ and ‗If not why not?‘
Analysis and interpretation of data should be dealt with by specialists in these tasks
(the role of ‗Performance Analysts‘) who identify what insights performance data
provides.
Performance analysts should be responsible for analysing performance measurement
data presenting to executives the answers to the questions (backed up by analysed da-
ta) rather than providing the raw data itself. Analysis includes identification of the
root causes of performance issues and analysts are encouraged to propose possible
future actions based on their analysis. This enables the executives to focus their atten-
tion on discussing the issues raised and the actions necessary to meet organizational
objectives.
Communities of Practice to enable analysts to learn from each other, enabling im-
provement of analysis skills. They allow learning about best ways of communicating
to the key decision makers, visualisation of messages and telling the story of the or-
ganisation‘s performance.
Meetings should change from discussing performance data to identifying and agree-
ing future actions. Because this is a more effective use of time, board meetings can be
more efficient. They should be supported by an issues management process that en-
sures actions are prioritised based on importance and that actions are completed as
and when necessary.
Following these steps moves the focus performance management from review of past per-
formance to the discussion of how strategy is executed to deliver future performance objec-
tives. This focuses executive attention on the issues facing the organisation in the future and
the achievement of strategic objectives.
A systematic process for using performance measurement to check whether strategy is being
implemented and whether performance is improving in line with strategic objectives as de-
scribed represent a process of single-loop strategic learning53
.
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Target setting and milestone setting have also been stressed as a critical for the effectiveness
of performance management and management54
. Guidelines regarding the identification and
selection of these elements seem to be insufficient in the SPM literature. Kaplan and Norton
(1996), for example, only recommend the use of ‗stretch targets‘. Ahn (2001) proposes that
the interdependencies between the measures should be taken into account when quantifying
the values of the targets to be attained each year. There is little evidence in relation to the use
of targets across broad multidimensional perspectives of performance. Johnston et al.55
have
found that most continuous improvement targets are based on past performance; and that
usually, targets are imposed by managers without consultation, with rewards linked to the
achievement of those targets. This practice increases the level of resistance to targets and de-
teriorates the value of the PMS system. In the management control literature, a few more stu-
dies can be found regarding the target-setting process within accounting systems (e.g. Mer-
chant and Manzoni, 1989.
Methods of PMS
There are two types :-
Traditional Method :-
Straight ranking method
Man-to-Man comparison
Paired comparison
Grading
Graphic rating
Checklist
Free essay
Modern Method :-
Assessment Centre
MBO
360 Degree Appraisal
Human asset accounting Method
Behaviorally anchored rating method
1. MBO
Management by Objectives (MBO) is a process of agreeing upon objectives within
an organization so that management and employees agree to the objectives and under-
stand what they are in the organization.
The term "management by objectives" was first popularized by Peter Drucker in his
1954 book 'The Practice of Management‗
.
The essence of MBO is participative goal setting, choosing course of actions and de-
cision making. An important part of the MBO is the measurement and the comparison
of the employee‘s actual performance with the standards set. Ideally, when employees
themselves have been involved with the goal setting and the choosing the course of
action to be followed by them, they are more likely to fulfill their responsibilities.
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Features and Advantages
Some of the important features and advantages of MBO are:
Motivation – Involving employees in the whole process of goal setting and increasing
employee empowerment increases employee job satisfaction and commitment.
Better communication and Coordination – Frequent reviews and interactions be-
tween superiors and subordinates helps to maintain harmonious relationships within
the enterprise and also solve many problems faced during the period.
Clarity of goals
Limitations
1. It over-emphasizes the setting of goals over the working of a plan as a driver of
outcomes.
2. It underemphasizes the importance of the environment or context in which the
goals are set in .In1991 comprehensive review of thirty years of research on the im-
pact of Management by Objectives, Robert Rodgers and John Hunter concluded that
companies whose CEOs demonstrated high commitment to MBO showed, on aver-
age, a 56% gain in productivity. Companies with CEOs who showed low commitment
only saw a 6% gain in productivity.
III. It did not address the importance of successfully responding to obstacles and con-
straints as essential to reaching a goal. The model didn‘t adequately cope with the ob-
stacles of:
Defects in resources, planning and methodology,
The increasing burden of managing the information organization challenge, The im-
pact of a rapidly changing environment, which could alter the landscape enough to
make yesterday‘s goals and action plans irrelevant to the present.
4. Tug of war
IV. 3600 Feedback:
360-degree feedback, also known as multi-rater feedback,
multisource feedback, or multisource assessment Performance-appraisal data collected
from 'all around' an employee—his or her peers, subordinates, supervisors, and some-
times, from internal and external customers. Its main objective usually is to assess training
and development needs and to provide competence-related information for succes-
sion planning—not promotion or pay increase.
The results from 360-degree feedback are often used by the person re-
ceiving the feedback to plan training and development. Results are also used by some or-
ganizations in making administrative decisions, such as pay or promotion. When this is the
case, the 360 assessment is for evaluation purposes, and is sometimes called a "360-degree
review."
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LIMITATION
However, there is a great deal of controversy as to whether 360-degree feedback should be
used exclusively for development purposes, or should be used for appraisal purposes as well
3. BEHAVIOURALLY ANCHORED RATING SCALE
BARS Behaviorally Anchored Rating scales is a method that combines elements of
the traditional rating scales and critical incidents methods. In order to construct BARS
seven steps are followed as mentioned below:
• Examples of effective and ineffective behavior related to job are collected from
people with knowledge of job.
• These behaviors are converted in to performance dimensions.
• A group of participants will be asked to reclassify the incidents. At this stage the inci-
dents for which there is not 75% agreement are discarded as being too subjective.
• Then the above mentioned incidents are rated from one to nine on a scale.
• Finally about six to seven incidents for each performance dimensions- will be used as
BARS.
This is by far the best method used for a performance appraisal method
ADVANTAGES & LIMITATION
Advantages:-
• More accurate
• Clear standards
• Good for providing feedback
BARS technique is more time-consuming and expensive than other appraisal tools.
4. HUMAN ASSET ACCOUNTING METOD
The HAAM refers to activity devoted to attaching money estimates to the value of a
firm‘s internal human organization and its external customer goodwill.
The current value of a firm‘s human organization can be appraised by periodic mea-
surements of ‗Key causal‘ & ‗Intervening enterprise‘
Key causal variables
Organization's management policies
Business leadership
Strategies
Skills and behaviors
Decisions
Intervening enterprise variables
Loyalties
Attitudes
Motivations
Communication
Decision making
5. STRAIGHT RANKING METHOD
This is the most commonly used category rating method. The appraiser
checks the appropriate place on the scale for each task listed.it is giving a rank
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to a person on his job performance against that of another member of a competitive
group by placing him as number one or two or three in total group.its a merit based
rating.
6. PAIRED COMPARISON METHOD
Each employee‘s every trait is compared with all others in pairs one at a time using
the same scale for performance. The numbers of times each individual is compared
with another is recorded in a paper .Thes numbers yield the rank order of the entirs
group.It makes judgement easier than ordinary ranking method.
It is not suitable when group is large.
7. GRADING METHOD
The rater considers certain features such as analytical ability,self;expression,job
knowledge, leadership etc. and marks them accordingly to a scale.
The actual performance is then compared with these grades and he is allocated the
grade which best describes his performance.
.
8. GRAPHIC OR LINEAR RATING
The factors included in this rating system are Employee Characteristics & Employee
Contribution.
Employee Characteristics are:-
Initiative
Leadership
Dependability
Attitude
Enthusiasm
Loyalty
Creative ability
Emotional ability
Decisiveness
Employee Contribution:-
Quantity and quality of work
The responsibility assumed
Specific goals achieved
Regularity of attendance
Versatility etc.
These traits are evaluated to a continuous scale.
9. FORCED CHOICE DISTRIBUTION METHOD
It was evolved after a great deal of research conducted for the military services during
World War II
It attempts to correct a rater‘s tendency to give consistently high or low ratings to all
the employees.
E.g.-The employee is
a) Is punctual and careful
b) Is a hard worker and co-operative
c) Is dishonest and disloyal
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d) Is disinterested in work.
The rater is asked to indicate which of the four phrases are most and least descriptive
of the employee.
10. CHECKLIST METHOD
Under this a rater does not evaluate employee performance, he supplies reports about
is and the final rating is done by the personal department. A series of questions are
presented concerning an employee and checks to indicate if the answer to a question
about an employee is positive or negative.
E.g.:-
1. Is the employee really interested in his job? yes/no
2. Does he show uniform behavior to all? yes/no
It is difficult to assemble, analyse, and weigh a number of statements about employee
characterstics and contribution.
11. FREE EASSAY METHOD
Under this method, the supervisor makes a free form, open-ended appraisal of the
employee in his own words and puts down his impression about the employee.
No attempt is made to evaluate the employee in quantitative manner
DRAWBACKS
It‘s a subjective evaluation
No common criteria for evaluation
Supervisor is required to devote considerable time and thought.
12. GROUP APPRAISAL METHOD
Under this method, employees are rated by a group. It consists their supervisor and
three or four other supervisors who have some knowledge of their performance.
Group discusses the standards and rate accordingly
Very simple
Devoid of bias
Time consuming
PROBLEMS OF APPRAISAL
1. Hallo effect
2. Leniency or strictness or constant error
3. The central tendency problem
4. Similarity error
5. Social differentiation
Using measurement to challenge strategy – double loop learning
In addition it is possible to use performance management to challenge whether the followed
being applied is appropriate. Organizations such as Sears and the anonymous company in the
study by the Institute of Employment Studies
have used statistical analysis of performance
measurement data to challenge whether the strategy being followed is leading to the desired
outcomes. This enables double-loop strategic learning to be applied by challenging the as-
sumptions that underpin the strategy of the organization. The Strategy Map forms a hypothe-
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sis of the drivers of performance. Gathering and analyzing performance measurement data to
enables testing of this hypothesis, enabling executives to make informed decisions about
whether the assumptions underpinning the strategy are valid and whether the strategy needs
to be changed.
Integration within the SPM system and with other management control mechanisms If an organization is to comprehensively manage performance on an organization wide basis
then the management system bust be integrated with other management control systems.
Normally such systems refer to budgeting processes or compensation schemes. Little aca-
demic research exists on how to connect strategic performance management systems to ac-
counting or to compensation systems. Only a few authors have started to investigate the inte-
gration of scorecard measures in compensation practices. For instance, a study conducted by
a Hay Group‘s consultant, Manas (1999), has found that the linkage between SPM systems
and compensation practices vary significantly from company to company. Out of fifteen
companies studied, thirteen had used their scorecard for determining base pay. Six of them
had linked the scorecard to annual incentives only; three to annual and long-term incentives;
one to long-term incentives only; one to base pay and annual incentive; and two to base pay,
annual and long-term incentives. None of them had linked the scorecard to base pay only or
to base pay and long-term incentives
Overcoming the Barriers to Performance Management
Implementation factors
Authors highlight the importance of approaching the implementation of performance man-
agement from a change management perspective (e.g. Bourne et al, 2002; Kaplan and Nor-
ton, 2001; Kasurinen, 2002; McCunn, 1998). In this sense, factors such as the following are
crucial for an effective SPM implementation.
Top manager agreement, commitment and leadership - start with a clear agreement at the top
on the strategy, goals, measures and the performance targets to be implemented
Managers‟ participation and accountability - having the agreement, commitment and leader-
ship at the top is insufficient if it does not go along with having the agreement, commitment
and leadership of the rest of the management team. Furthermore, the involvement of em-
ployees is also crucial. Inviting managers and employees to assist on the development of the
system facilitates their buy-in, and enhances their trust, understanding, and ownership of the
performance measures It is also important to involve the Human Resources and the Informa-
tion System functions. It is essential that managers become accountable for the performance
being managed
Training and education - employees at all levels need to learn the principles of the system, its
measures, tools and procedures (Frigo and Krumwiede, 1999; Maisel, 2001; Kaplan and Nor-
ton, 2001). Individuals can distort the information system by smoothing, biasing, focusing,
gaming, filtering, "illegal‖ acts so it is important to train and educate individuals on how to
engage rather than bypass the causes of dysfunctional behaviours.
Communication and feedback - The factor ―communication‖ is one of the most cited in the
literature. When most authors stress its importance, they tend to focus on the reported feed-
back of measurement results to the employees (e.g. Forza and Salvador, 2000, 2001; Howell
and Soucy, 1988; Keasy et al., 2000). Even so, there are other aspects related to communica-
tion that can affect the effectiveness of performance management. The change management
literature highlights the relevance of verbal and non-verbal communication (e.g. presenta-
tions, manuals, conversations, newsletters, reports, etc.) used to clarify all aspects related to
the measures, in particular and performance management in general; and to facilitate the buy-
in from the people in the organisation (Bourne et al. 2002b; Kaplan and Norton, 2001; Quinn,
1996; Schreuder, 1995) .
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SPM system information infrastructure - an information system should be designed for col-
lecting, analysing and reporting the data efficiently. If data is flawed, the data integration
process is flawed, or its communication is flawed, then decisions based on that data are more
likely to be flawed. Using an IT system to support these tasks seems to be critical. However,
some caution is needed in relation to the use of IT since the capabilities of technology, in
terms of data capture and manipulation, provide a great temptation for senior management to
introduce new measures (Wilson, 2000).
Another key issue about the design of an information infrastructure is mentioned by
Mintzberg: ―the manager must be viewed not as a reflective planner but as an adaptive infor-
mation manipulator who seeks for trigger, speculative, current information. The manager, not
the computer, is the real data bank of organisational information, even though he is a poten-
tial obstruction of the flow of information‖. With this statement, Mintzberg recalls that in-
formation systems are normally designed by the specialists of the organisation for the special-
ists of the organisation, and therefore fail to serve managers‘ needs.
Ongoing Performance Management
Following a review of literature, Franco and Bourne61
identify the most significant factors
affecting the use of performance management. These factors are heavily influenced by the
change management literature reflecting the need not only to manage the implementation of a
performance management system but also the ongoing change hat results from the review and
management of performance.
(1) Corporate culture - some studies highlight the need for a corporate culture that encou-
rages team working, ownership of problems and risk-taking or entrepreneurship,
while others emphasise the need for a corporate culture orientated to continuous im-
provement and use of the SPM system.
(2) Alignment - the integration and linkage of individual strategies and goals, and the ‗good
match‘ between managers‘ responsibilities and the performance being managed.
(3) Review and update - a continuous review of the strategy, the performance being ma-
naged and systems and processes being used to manage. The focus of performance
management should be to drive action for improvement and learning rather than con-
trol. There should also be focus on the development of action plans in order to explain
how the gaps between performance measures and goals could be closed, and review
their progress periodically.
(4) Communication and reporting - of performance and progress. There is emphasis on the
need for prompt and formal feedback.
(5) Involvement of employees. There is consensus around the benefits of making everyone
participate in the development of measures. Involvement in the selection and defini-
tion of measures can reduce employees and managers‘ resistance to performance
management, and increase their usage level of performance measures.
(6) Management understanding.
(7) Compensation link – there is inconsistency in the literature regarding the linkage be-
tween incentive compensation and strategic performance measures. In addition, a lack
of understanding around the concept of compensation seems to exist, since studies use
the words ‗incentives‘, ‗rewards‘ and ‗compensation‘ interchangeably.
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(8) Management leadership and commitment - executive support, leadership and commit-
ment. Management should have clear accountability and responsibility of measures
and results.
(9) Clear and balanced framework - as already discussed
(10) Agreement on strategy and success map.
(11) Data processes and IT support.
Performance is an outcome of both organisational and human activities, positive performance
outcomes only arise when the behaviour of employees is aligned with strategy and when em-
ployees are motivated. As a result it is crucial that performance management activities inte-
grate culture, process, procedures and the management of people to generate learning and
continually improve.
Public Sector Performance and the Modernization Agenda
In many advanced economies, such as those of the Anglo-Saxon countries and Scandinavia,
public services have come under increasing pressure to improve their efficiency and effec-
tiveness, reduce their demands on taxpayers, but maintain the volume and quality of services
supplied to the public. So significant has been the modernisation agenda in the Public Sector,
that the phrases the ―new public sector‖ or ―New Public Management‖ (NPM) have been
coined to describe them. In the drive to achieve this, public service organisations have been
subjected to the introduction of various ‗private sector‘ management techniques, frequently
complemented by the adoption of some form of neo-market system in which the purchasers
and providers of public services are split and required to contract with each other (Brignall
and Modell, 2000). Performance management, through the use of performance targets and
league tables, has been one of the main tools used by the UK Government in its attempt to
push through its modernisation programme and demonstrate that value for taxpayers money
is being delivered.
Despite Government intentions, media attention has focused on examples of performance tar-
gets, and pressure to achieve them, driving inappropriate behaviour. The case of Bristol Eye
hospital cancelling follow-up appointments in order to meet waiting time targets lead to press
headlines such as "Patients Blinded by NHS Targets". This is just one of many examples
which highlight the problems that performance targets are causing. With examples such as
this, and with a 20 per cent funding increase in the past two years having produced just 4 per
cent more output, Public Sector workers, politicians and commentators doubt the value of
using performance targets with broader questions raised about the applicability of private sec-
tor approaches to public sector organisations. Furthermore there is some case study evidence
that to suggest that private sector approaches are not bringing productivity improvements.
From Canadian experiences, Brown suggests that there are two main factors limiting the ap-
plication of performance management approaches in the public sector: Unionisation limiting
the ability to change working practices and the difficulty of measuring performance out-
comes. Symon provides anecdotal support for the general resistance to change in the public
sector with preference for doing things as they have always been done69
.
However there is also research that opposes this view, suggesting that it is possible to apply
private sector approaches in general and performance management in particular in the public
sector.
In July 2003 a report by the Commons Public Administration Committee went further and
argued that if used appropriately measurement can play a "vital part" in improvement efforts.
Whilst research in South America suggests that an effective planning oriented approach to
performance evaluation can effectively enhance democratic accountability, supporting the
thesis that democratic accountability and public administration modernisation can be done
together if performance management is done effectively.
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Following their extensive review of Performance Monitoring practice in the public sector the
Royal Statistical Society Working Party on Performance Monitoring in the Public Services,
suggest that Performance monitoring done well is broadly productive for those concerned.
Done badly, it can be very costly and not merely ineffective but harmful and indeed destruc-
tive. Furthermore they identify various ways in which performance monitoring (and by im-
plication performance management) should be improved in the public sector.
In relative terms Performance management in the public sector is still in its infancy. The
1980s and 90s saw enormous interest in the subject with many leading companies redesign-
ing their performance measurement and management systems to reflect their changing cir-
cumstances. This has resulted in over a decade of experience and research that has provided
insight into the ways in which performance measurement and management can be used most
effectively. Whilst by no means all of the practice in the Private Sector can be described as
good and differences in context must always be considered, it would appear that there are les-
sons from the experience and research in the Private Sector that could assist the Public Sector
overcome some of the performance management problems that are being experienced.
Conclusions
This report reviews the extensive literature relating to organizational performance manage-
ment. It is clear from the literature that to be effective performance measurement activities
should be designed to (i) manage the right things and (ii) mange them properly. Many tools
and frameworks are proposed for each of these attributes of performance management. How-
ever there are clear themes which underpin these activities. These can be summarized as: -
Performance management should be integrated horizontally across the organisation;
The performance being managed should reflect the requirements, wants an needs of
all of the key stakeholders of the organisation and not just reflect a limited set;
Performance management should be integrated vertically linking the strategies an ob-
jectives of the organisation to the execution of activities which will enable their
achievement;
Explicit understanding of linkages across the vertical and horizontal integration (e.g.
through success maps) enables consideration of conflicting priorities and trade-offs
that need to be made in order to achieve overall objectives;
The performance monitoring, review and action panning process should e structured
around the strategic performance objectives of the organisation;
Processes and systems should be designed to extract and communicate insights rather
than performance data;
All systems and processes should be aligned with each other, driving behavior to-
wards the performance objectives;
Effort should be dedicated to developing an appropriate culture to engage the organ-
ization‘s employees and elicit commitment to performance objectives.
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APPRAISAL SYSTEMS OF FEW COMPANIES IN INDIA
1. ONGC
With a view to bringing about a performance driven culture
within the organization, ONGC has an annual objective oriented performance Appraisal
system, which is implemented uniformly across the Organization
The appraisal system used in ONGC is the oldest one.It is a three tier system where an
employee is evaluated in three stages by the Reporting Officer under whom employee is
working.
By the Reviewing Officer
By the accepting officer
Self appraisal is also there.
Whilst many of the tools and frameworks proposed in the field
of performance measurement and management have been designed for commercial organiza-
tions in the private sector, there is some evidence that some of these generic process focused
principles are also applicable in the public
and not for profit
sectors.
2. NRL
The appraisal system implemented in NRL is CR. At first KPI s are fixed. Then each
employee is appraised by his DMGR Here employees are appraised only by the supe-
riors But very soon the appraisal system of NRL is supposed to be changed from CR
to 360 degree appraisal.
3. IOC, 4.HPCL 5.BPCL 6.NTPC
The PMS used by M/s IOC, HPCL, SAP are IT enabled.
PMS in BPCL and NTPC are paper based
M/s IOC follows a no pen – no paper approach only for execu-
tives.
At IOC and at HPCL, the IT enablement has been achieved using separate servers
with offline linkages to HR Master data. The package used is customer specific
within house / consultants support.
At IOC, the database used is Oracle and Java is the programming language, package
developed by third party solution provider. In absence of ERP payroll, the perfor-
mance based incentives are paid by extracting information from data base.
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RESEARCH METHODOLOGY
In order to accomplish the objectives of the study, it is essential to articulate the manner in
which it is to be conducted, i.e., the research process is to be carried-out in a certain- frame-
work. The research methodology, which follows, is the backbone of the study.
Data Collection Sources
Research work was done from two sources: -
(1) Primary data: Primary data was collected by questionnaire and interview in the organiza-
tions. The questionnaire comprised of closed and attitude questions. The opinion on existing
Performance Appraisal practices and their affectivity were collected through
questionnaire which was circulated to all the employees at all levels and the results have been
analyzed on the basis of agree and disagree. The methodology for collection of data also in-
cluded interviews and discussion with the top management of the organization
(2) Secondary data: It was collected by reviewing different literatures, from published books,
management journals, articles published by the other researchers on 360 Degree Appraisal.
Sampling: The total sample size for this project was 30 employees. The information collected through
above methods has been tabulated, analyzed and interpreted. Finally an overall assessment of
the contribution of top management, supervisory staff has been made towards improving the
effectiveness of the organization.
TYPES OF RESEARCH
Research methodology is a way to systematic solve the Research Problem. It is a Procedure,
which is followed step by step to solve a particular research problem.
There are basically four types of researches:
1 EXPLORATIVE RESEARCH
2 DESCRIPTIVE RESEARCH
3 DIAGNOSTIC RESEARCH
4 HYPOTHESIS TESTING RESEARCH
Explorative Research:
To gain familiarity with phenomenon or to achieve an insight into it.
Descriptive Research:
To poetry accurately the characteristics of the particular individual situation or a group.
Diagnostic Research:
To determine the frequency with which something occurs or with which it is associated
with something else.
Hypothesis Testing Research:
To test a hypothesis of casual relationship between variables.
The present project is Descriptive cum Explorative in nature. It is done to poetry
accurately the characteristics of a particular individual situation or a group. The major
purpose of the descriptive research is the description of the state of the affairs as it exits
at present. The main characteristics of this method are that the researcher has no control
over the variables; he can only report what has happened or what is happening.
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SAMPLING TECHNIQUE
The sampling technique adopted for the study is non-probability Random sampling
Technique according to the convenience of the researcher.
A questionnaire was administered to employees of GAIL Info hub of different
Departments like Finance Department, HR Department, G.P.C.T. Department, O & M
Department, Business Information System Department and Gailtel Department.
SAMPLE SIZE
Data is collected using a sample of 32 employees of GAIL Info hub.
SAMPLE DESCRIPTION
The sample mainly consists of data from the primary sources that are utilized for the
purpose of this study. This is done by means of administrating questionnaire to
employees in different Departments. Secondary data like company journals, newsletters,
records etc. were also relied on for retrieving further information.
INSTRUMENTATION TECHNIQUE
Questionnaire
ACTUAL COLLECTION OF DATA
Both secondary and primary sources of data are utilized for the purpose of this study.
Primary data is collected by means of administering a questionnaire to the employees of
GAIL Info hub of different Departments like Finance Department, HR Department,
G.P.C.T. Department, O & M Department, Business Information System Department and
Gailtel Department. Secondary data is collected from various records, manuals and other
Sources of the HR Department.
Sample A finite subset of population, selected from it with the objective of investigating its
properties called a sample. A sample is a representative part of the population. A sample of
30 respondents in total has been randomly selected. The response to various elements under
each questions were tabulated for the purpose of various Stastical testing.
Presentation of Data
The data are presented through charts and tables.
Tools and Techniques for analysis and interpretation of data
MS EXCEL is used for analysis & interpretation of data.
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PRIMARY RESEARCH
The research is carried out with the help of a well prepared questionnaire to extract useful
responses if the employees at the various level in the corporate office of the GAIL (India)
Ltd. While preparing the questionnaire certain precautions were seriously followed to make it
a logical one to meet the requirement of the project as it is considered to be in the well inter-
est of the company and the trainee himself.
The logic followed in this study is to get into details of the minor and major problems in the
system. Also the various brighter sides of this process. Because, in this study the present sys-
tem is to be opinionated by those who are evaluated by this.
DATA COLLECTION
Primary data are in the form of ―raw material‖ to which stastical methods are applied for the
purpose of analysis and interpretation.
The primary sources are discussions with employees, data‘s collected through questionnaire.
A questionnaire is designed as per the requirement of the project. Then targeting a certain no.
of employees and this filled by them. The questionnaire is structured and wide extensive in
order to fetch more information. This will help in getting an insight in to the problem from
the point of view of the employees. The questionnaire was taken to the different employees.
It has also descriptive questions to take more suggestions and feedback.
SECONDARY SOURCES
Secondary data‘s are in the form of finished products as they have already been treated statis-
tically in some form or other. The secondary data mainly consists of data and information
collected from records, company websites and also discussion with the management of the
organization. Secondary data was also collected from journals, magazines and books as stu-
died in the course and in the GAIL Library.
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DATA ANALYSIS
The data is collected through survey, books, reports, newspapers and internet. The survey is
conducted among the employees of GAIL. The data collected by the researcher is tabulated
and analyzed in such a way to make interpretations.
Various steps, which are required to fulfill the purpose, i.e., editing, coding, and tabulating.
Editing refers to separate, correct and modify the collected data. Coding refers to assigning
number or other symbols to each answer for placing them in categories to prepare data for
tabulation refers to bring together the similar data in rows and columns and totaling them in
an accurate and meaningful manner.
The collected data are analyzed and interpreted using tools and techniques. In order to under-
stand the graph we have taken the help of the table given below this is the division of scores
in the questionnaire.
Level wise score Effectiveness
Between -12 & -6 Poor
Between - 6 & 0 Less Effective
Between 0 & 6 Good
Between 6 & 12 Very Good
So the analysis of questionnaire is given below:
Performance planning
Performance planning is the first step in the performance management system. By perfor-
mance planning we mean that the various goals and targets are decided for the employees.
Planning performance can have two aspects that are:-
Organization and the employee and the second appraiser and appraise. A good PMS system
tries to make a balance between these two different two polarities.
Sometimes we call it a setting of performance standards. This is the first step in the whole
process of performance appraisal, which will be used to as the base to compare the actual per-
formance of the employees. This step requires setting the criteria to judge the performance of
the employees as successful or unsuccessful and the degrees of their contribution to the orga-
nizational goals and objectives. The standard set performance of the employee cannot be
measured; great care should be taken to describe the standards.
One of the few good ways to do this is using the concept of ‗Management by Objectives‘
(MBO). It can be identified as a process whereby the employees set their goals to be
achieved, the standards to be taken as the criteria for measurement of their performance and
contribution and deciding the course of action to be followed.
With MBO, came the concept of SMART goals i.e. goals that are:
Specific
Measurable
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Achievable
Realistic
Time bound
The goals thus set are clear, motivating and there is a linkage between organizational
goals and performance targets of the employees.
The focus is on future rather than on past. Goals and standard are set for the perfor-
mance for the future with periodic reviews and feedback. Involving employees in the
whole process of goal setting and increasing employee empowerment increase em-
ployee job satisfaction and commitment.
Therefore in the survey conducted in order to check these two parameters of the performance
planning I took four specific questions two for the aspect of organization and the individual
employee and other two are the another aspect of planning between the appraiser and the ap-
praise, which are:
Q1In GAIL PMS process strikes a balance between organizational and employee‘s goals.
Q2 Meaningful and the time bound goals are carved out in Key Result Areas.
Q3In deciding goals appraiser and appraise both have their mutual consent and involvement
in the process.
Q4 Parameters on which performance is measured are well understood by both appraiser and
appraise.
All the respondents gave their opinions about the problem and the suggestion. In the key find-
ing of the analysis it comes to us that in both the aspects the first one performance planning
between the organization and the employees shows more effectiveness than the performance
planning between the appraiser and the appraise.
We can understand this with the help of the following graph:
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Performance Planning
Organization & employee Appraiser & Appraise
In GAIL (India) Ltd. PMS process strikes a balance between organizational and em-