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Page 1 of 13 MOVING TOWARDS PERFORMANCE BASED CULTURE NDPL WAY TO DEAL CHANGE MANAGEMENT V.D. Apte PEO, NDPL, DELHI SYNOPSIS To tide over burgeoning losses over 50% and to improve power supply position the GoNCTD (Govt. of National Capital Territory of Delhi) privatized the electricity distribution at Delhi with a Joint Venture (JV) model in July 2002. NDPL is a DISCOM having 51% stake of the Tata Power and operating in North & North-West part in Delhi covering 510 sq. km over a consumer base of 8.5 Lacs. The paper narrates NDPL journey in last three years as to how it dealt with the challenges of change management in moving towards quality and performance based culture by orienting its inherited manpower over 5600 personnel, through various initiatives, heading towards a success storey of a turn around utility. NDPL IN JULY 2002 This was the time when NDPL started it’s operations. Almost each functional area was flooded with innumerable problems, which existed since long and every employee looked frustrated with a feeding ‘nothing new is going to happen here’. The summary of the situation drills down to following reality: 1. Burgeoning losses – 53% 2. Dilapidated distribution network – couple of transformers and plenty of cables bursting every day. 3. Reportedly harassed consumers with poor fault management system, wrong billing, and inadequate payment channels. 4. A back log of 1,00,000 billing complaints and 20,000 new connections 5. A workforce of 5638 employees with very little skill sets and humming with arrogance of monopoly’ 6. Absence of key management functions like HR, Finance and Governance etc. 7. No administrative infrastructure and dilapidated un-sanitary buildings/offices INITIAL CHALLENGES There were very high expectations from the consumers / media that a private player would bring a magic wand and change all in one shot. The task of the management in initial months was therefore to take initiatives that deliver results quickly to improve the grand situation. The primary challenge, the senior management faced in HR area was to earn a RIGHT TO GOVERN by creating mutual trust and understanding with all cadres of employees, which would inculcate a sense of assurance in the ability of the senior management. Pramod Singh Manager (EKM) NDPL, Delhi
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Page 1: MOVING TOWARDS PERFORMANCE BASED CULTURE NDPL …mahadiscom.com/emagazine/feb06/ndpl_performanceculture.pdf · Page 1 of 13 MOVING TOWARDS PERFORMANCE BASED CULTURE NDPL WAY TO DEAL

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MOVING TOWARDS PERFORMANCE BASED CULTURE NDPL WAY TO DEAL CHANGE MANAGEMENT

V.D. Apte

PEO, NDPL, DELHI

SYNOPSIS

To tide over burgeoning losses over 50% and to improve power supply position the GoNCTD (Govt. of National Capital Territory of Delhi) privatized the electricity distribution at Delhi with a Joint Venture (JV) model in July 2002. NDPL is a DISCOM having 51% stake of the Tata Power and operating in North & North-West part in Delhi covering 510 sq. km over a consumer base of 8.5 Lacs. The paper narrates NDPL journey in last three years as to how it dealt with the challenges of change management in moving towards quality and performance based culture by orienting its inherited manpower over 5600 personnel, through various initiatives, heading towards a success storey of a turn around utility. NDPL IN JULY 2002 This was the time when NDPL started it’s operations. Almost each functional area was flooded with innumerable problems, which existed since long and every employee looked frustrated with a feeding ‘nothing new is going to happen here’. The summary of the situation drills down to following reality:

1. Burgeoning losses – 53% 2. Dilapidated distribution network – couple of transformers and plenty of cables

bursting every day. 3. Reportedly harassed consumers with poor fault management system, wrong

billing, and inadequate payment channels. 4. A back log of 1,00,000 billing complaints and 20,000 new connections 5. A workforce of 5638 employees with very little skill sets and humming with

‘arrogance of monopoly’ 6. Absence of key management functions like HR, Finance and Governance etc. 7. No administrative infrastructure and dilapidated un-sanitary buildings/offices

INITIAL CHALLENGES There were very high expectations from the consumers / media that a private player would bring a magic wand and change all in one shot. The task of the management in initial months was therefore to take initiatives that deliver results quickly to improve the grand situation. The primary challenge, the senior management faced in HR area was to earn a RIGHT TO GOVERN by creating mutual trust and understanding with all cadres of employees, which would inculcate a sense of assurance in the ability of the senior management.

Pramod Singh Manager (EKM) NDPL, Delhi

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It was important to orient and align the huge manpower over 5600 employees of which majority was non-executive, towards VISION of the organization and make them appreciate their contribution in the journey. The senior management team developed and parameterized VISION & MISSION statement of the organization, which addressed the expectations of all stake holders.

Special efforts were made to discuss and explain these statements, through ‘Learning & Sharing sessions’ cutting across all levels of employees. STAKE HOLDERS EXPECTATIONS While working out the Vision Mission statement, expectations of all the stake holders were kept under view, so that their concerns are addressed. In a newly privatized Distribution utility, typical expectations were jotted down with the help of consumer need analysis survey and a dip stick on employee expectations. STAKE HOLDERS EXPECTATIONS Consumers Advent of consumerism and consumer delight in retail

electricity distribution. Investors Safety & Enhancement of their investment / ventures DERC Compliance to billing, metering, tariff regulation and

performance standards balancing the development and stakeholders interests.

Government Early success of the reform and privatization process

• Employees • Better working conditions • Personal and professional development • Empowerment at all levels • Enhanced communication • Improvement in compensation and incentives

VISION To be preferred provider of reliable and competitive power to people we serve and be the favored company to work for. MISSION To deliver quality and cost effective electricity To ensure excellence in customer care To create a work environment which encourages teamwork, learning and

innovation To meet or exceed all stakeholder expectations To enrich quality of life in the society that we operate in

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PEOPLE, STRUCTURE, PROCESS – APPROACH The organization structure where functional ‘silos’ existed without interdepartmental co-ordination was revamped and new organogram designed which was functional and process oriented, with clearly laid out span of control. A new executive cadre was developed through redesignation of executives from earlier scenario like Executive Engineer, Superintending Engineer, Chief Engineer to Manager, Assistant General Manager, Dy. General Manager, General Manager, etc. This was enthusiastically accepted by all executives which made them forget their past legacy and helped to reorient them towards a management culture. Scientific study was conducted to redefine various business processes particularly in the areas affecting consumers’ services of metering, billing, collection, fault management and new connections. The BPR (Business Process Re-engineering) exercise brought job clarity in defining roles and responsibilities of each person. PARIVARTAN – A PEOPLES MOVEMENT LAUNCHED The first batch 80 engineer trainees, selected through campus recruitment, followed by 30 Management trainees (CAs & MBAs) was inducted as the ‘Change agents’ to take the organization to the next level of excellence. This activity is continued in subsequent years too. Perhaps, the most striking feature of ‘Parivartan’ was the initiatives undertaken to reorient the inherited employees towards a culture of performance and excellence. Some of the key-initiatives of ‘Parivartan’ were: 1. Identification of ‘training needs' as assessed by the employees themselves 2. Institution of ‘suggestion scheme’ to enhance employee participation 3. Initiation of Quality movement by promoting a ‘Measurement culture’ focusing

in areas of CA/PA (Corrective Action & Preventive Action). This was further strengthened by acquiring IMS (Integrated Management System) certification through getting ISO-9001, ISO-18001 (Occupational Health & Safety) & ISO-14001 (Environmental Management System) in a span of 2 years.

Parivartan – New Batch of Engineers taking Oath

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4. Extensive training (around 25,000

man days) in the ‘Technical and Behavioral’ aspects by establishing a state of art ‘Centre for Efficiency in Power Distri-bution’ (CENPEID). This institute is destined to act as a National Resource Centre’ for training & skill accreditation, which would cater the needs in Asia region.

5. Promoting use of computers in daily operation against indents through e-mail

(from 2 computers to 2000 computer-users today) 6. 24 x 7 – ‘Store’ operation to dispatch the line materials at work place without

anybody requiring to visit the store. 7. Creation of centralized call centre, which would send auto generated SMS call

about no light complaint to concerned area manager, who would close the complaint and send back SMS. If the call is not closed in a predefined time auto- escalation to his boss would be done.

MERGING OF STAFF TO NEW PERFORMANCE BASED COMPENSATION STRUCTURE Though every effort was taken by NDPL to equip its workforce with the requisite skills required to perform in a corporate environment, it remained sensitive towards a section of its employees for whom orientation towards a performance driven culture was an inordinate task since they were at the last stages of their careers where their age and physical abilities did not allow them to take the strain that a competitive corporate culture demanded. NDPL valued them for the services that they had rendered to the organization during their lifetime and hence provided them with the option of taking voluntary retirement from the services of the organization. However, NDPL in true TATA tradition provided them with a fair offer in which 30% of the inherited workforce accepted contentedly. Those who still remained on board merged with the new inductees and gave rise to formidable workforce which is being developed to become a benchmark workforce by industry standards. It’s pertinent to add here that driven by the newly inculcated Performance culture in the organization, a section of the inherited staff choose to reincarnate themselves and hence opted for the new performance based compensation structure leaving behind a relatively secure but sluggish government salary structure. NDPL has always believed in the ideology that a professionally engaged and satisfied employee is a performing employee and therefore committed itself to ensure the career development of its 3600 strong workforce.

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INITIATIVES TO ENCOURAGE PERFORMANCE AT ZONAL, DIVISIONAL AND GRID LEVEL It started with a concept of ‘Zonal Empowerment’ which is a smallest field unit catering of around 15 to 25 thousand consumers through 10 to 16 numbers of 11 kV feeders. Number of steps were taken to foster healthy competition between the zones on the parameters viz. • Fault Free Feeder (No tripping on a feeder, which is self declared by the zone)

covering 30% feeders under his control. • Distribution Transformer Failure index (Number and KVA capacity) • SAIFI / SAIDI monitoring • New connection release and pending Similar parameters were developed, with constant input and updation from the field staff to come out with a monthly ‘Score Card’ for the DIVISION, GRID SUB-STATION & PROJECT (CONSTRUCTION) UNIT. (ANNEXURE A – To see format of score card) The ‘Score card’ concept passed through turbulent phases of Resistance Acceptance Improvement Excellence. Today the staff eagerly awaits the ‘Score card’ for their unit which is transparently shared with all, through an e-mail sent by system Administrator. This promotes mutual competition to excel in their areas of operation. The score card is also uploaded on the knowledge management portal (SANCHAY) and the toppers are given recognition through quarterly newsletter (NAVODAYA). Now each unit head today seems eager to see his monthly ‘Performance Score’ vis – a – vis his colleague’s unit & merit rank, his unit has achieved. This resulted in promoting a competitive spirit amongst all unit heads, so that their unit excels in performance. Senior leadership ensured that there was mutual learning and knowledge sharing amongst unit heads through various class room sessions, where top performers could share their experience with their colleagues in the other units, so that overall organizational performance got improved. PERFORMNACE BENCHMARKING The staff was informed about the various performance standards achieved by some of the best utilities across the Globe (CLP – China Light & Power, Hong Kong, BGE – Baltimore Gas & Energy , US) and a need to orient all our efforts to first reach those figures and then exceed them was stressed upon. Some of such parameters viz. SAIFI – System Average Interruption Frequency Index (Average no. of interruptions a consumer faces in a year)

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SAIDI – System Average Interruption Duration Index (Average no. of total hours of interruption a consumer faces in a year) Reliability Index / ASAI T&D LOSS EADCI – Engineering Average Duration Closing Index

(Time required to formulate a scheme & issue demand note for new connection by industry, Group housing society, etc.)

PADCI – Project Average Duration Closing Index (Time elapsed between start & close of an electrification scheme) Customer served / MUs handled per employee. TRAINING ABROAD The staff was exposed for training & learning through visits to the foreign utilities to see the latest developments in the areas of technology / CRM (Consumer Relation Management). Exchange visits of staff of these utilities to NDPL were organized. EMPLOYEE ENGAGEMENT SURVEY Based on the principle that it is important to ‘engage’ an employee besides ‘satisfying’ him, since engaged employee is ‘involved’ and enthusiastic about his/her work, a survey was carried through an agency of international repute. A plan of action was developed and implemented to improve the present level of Engagement by focusing on, catering basic needs, and management support in a climate of team work to achieve individual and organizational growth. INSTITUTIONALIZING A PERFORMANCE MANAGEMENT SYSTEM (PMS) Two years since inception and a stage of Performance Consolidation, the Management felt that it was opportune that NDPL institutionalizes a robust Performance Management System (Refer Annexure-B). Therefore a conscious decision was taken to map the KRAs first up to the level of senior members and then extend it to all executives. The job responsibilities and description at each level were mapped. This actually meant that each employee at the beginning of a new financial year knew as to what is expected from him and what the key deliverables from him are for that year. The individual is then assessed based on his actual performance vis-à-vis the desired levels. The annual increments have been linked with the rating of the individual. Through the Annual Appraisal form itself, the Training needs of the individual are mapped and training programmes customized to his/her needs, are imparted for upliftment of the desired traits/skills needed for that particular job.

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REWARD & RECOGNITION The cornerstone of any PMS is it’s ability to motivate the workforce by recognition of their hard work and rewarding their excellence. NDPL has institutionalized a Reward and Recognition Policy which details the various categories of Awards and their nomination process. PROOF OF CHANGE This case study would certainly be incomplete without mention of the outstanding results that NDPL has achieved in the short duration of 3 years. NDPL now accounts for less than 2% of the total energy shed in Delhi, the Aggregate Technical & Commercial Losses have reduced from 53% at the time of takeover to less than 34% in March 2005. NDPL has thus reduced losses by more than 19% in three years and has achieved the target reduction set by Regulator for 2006-07 in 2004-05 itself.

Award Frequency Area of Excellence

Shining Star Quarterly All areas

Champion Workman

Yearly Best Workman/Lady Workman Award

Champion Officer Yearly Best Officer Award

Samridhi Merit Award

Yearly Best Lady Workman Award

The CEO Order of Excellence

Yearly The CEO Award

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Average Revnue Per Employee

20.41

43.45

0.005.00

10.0015.0020.0025.0030.0035.0040.0045.0050.00

2002-03 2004-05

Rs in

lakh

s

AT & C LOSS REDUCTION CURVE

12 month Rolling AT&C Loss

45.7%

49.0% 49.5%

47.5%

46.0%

53.0%

51.7%51.1%

51.6%

53.4%53.1%

54.1%

37.32%38.14%

39.95%

42.07%

35.14%34.46%

44.86%

33.79%

30%

35%

40%

45%

50%

55%

Apr-0

1

Jul-0

1

Oct-0

1

Jan-02

Apr-0

2

Jul-0

2

Oct-0

2

Jan-03

Apr-0

3

Jul-0

3

Oct-0

3

Jan-04

Apr-0

4

Jul-0

4

Oct-0

4

Jan-05

Apr-0

5

Jul 02 (Privatisation)FY 03

FY 04

AT&C Loss climbing up

before privatisation

Post privatisation reduction in AT&C Loss

FY 05

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ANNEXURE - A Dear All, The performance Scorecard for the month of April 2005 is attached herewith for your perusal. We have included two more parameters beginning this financial year viz. Consumer Survey Results (eQTm Index), O&M Expenditure per unit realized (Rs/unit realized). Data of Zones for which Consumer survey results are not available as on date (Zone 422, 418, 415, 1301, 530,512,506,518) have been based on their Districts figures. The Scorecard for the month of May 2005 shall take into account the performance in regard to Safety Matrix, Employee and Controllable costs also. The District’s scorecard would consider the P&L account statement too. Congratulations and Good luck!!!

District Scorecard The top three performers for April 2005 are as follows:

1. Civil Lines 2. Rohini 3. Pitampura

Top Performers in each parameter

CAIDI SAIDI SAIFI FFF Tx failure

Pending Connection

DA-Pending AT & C MU Recovered

/ Input / Emp

Consumer Survey Results

(eQTm Index)

O&M Expenditure/Unit

realized MTN RHN RHN BDL 8 3 MGP RHN BDL CVL NRL KPM Districts Districts

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Zonal Scorecard

The top three performers for April 2005 are as follows:

1. Zone 411 – Civil Lines 2. Zone 417 – Kamla Nagar 3. Zone 1304 – Pusa

Annual Top Performers in each parameter

CAIDI SAIDI SAIFI FFF Tx Failure

Pending Connection

DA - Pending

Consumer Survey Results (eQtm Index)

O&M Expenditure/Unit realized AT& C

422 Shahzada

Bagh

509 WZPIA

B-Blk

509 WZPIA

B-Blk 22

Zones 40

Zones 29

Zones 14

Zones

423 Tibya

College

511 Alipur

561 Rithala

____________________________________________________________________ Regards, Administrator

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Project Performance Score Card

S.No Index % wt. METRO URBAN BAWANA NARELA TOWN CITY

1 Project Average Duration Completion 20 7.27 20.00 20.00 20.00 20.00 20.00

2 Project Management 30

2.1 Value of Work executed. 20 20.00 20.00 20.00 20.00 20.00 20.00

2.2 Timely Submission of Completion Report 10 4.19 4.71 6.25 3.68 9.69 10.00

3 Quality of Work 10 3.22 4.67 10.00 10.00 10.00 10.00

4 Safety of Work 5 5.00 4.63 5.00 3.67 4.00 5.00

5 Compliance to statutory requirements 5 5.00 5.00 5.00 5.00 5.00 5.00

6 Contract Closing 10 10.00 10.00 10.00 10.00 10.00 10.00

7 Adherence to Report Submission Schedule 10 10.00 10.00 10.00 7.00 10.00 10.00

8 Invoice Certification of Vendors 10 2.77 6.42 10.00 10.00 10.00 5.41

Final Score for Current Month 100 67.44 85.43 96.25 89.34 98.69 95.41

Cumulative Score till Previous Month 100 63.07 69.30 57.74 62.89 63.33 62.35

Cumulative Score for FY 05-06 100 63.61 71.31 62.56 66.19 67.75 66.48

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ANNEXURE B

FACTOR nFACTOR 4FACTOR 3FACTOR 2FACTOR 1

PERFORMANCE MANAGEMENT

SYSTEM

OPMSIPMS

ORGANIZATIONAL EFFECTIVENESS

MANAGING & IMPROVING

ZONAL SCORE CARD

DIST. SCORE CARD

CIRCLE SCORE CARD

CORP. SCORE CARD

I

N

T

E

R

F

A

C

E

HR / ADMIN.

FIN. / ACCTS.

ACHEIVEMENT AGAINST KRAs / GOALS

INDIVIDUAL SCORECARDS

INDIVIDUAL DEVELOPMENT PLANS

COMPETENCIES & SKILLS(14 TLPs)

COMMERCIAL

FUNCTIONAL SCORECARD

BALANCED SCORECARD

KRAs FROM JDs

SPECIAL TASKS FROM TEAM LEADERS

SELF ASSIGNED GOALS

GOALS FROM BSC INITIATIVES

……….

C E O’s DASH BOARD