Ntpc Training Report

ATRANING REPORT

ON

A STUDY OF PERFORMANCE APPRAISAL

SYSTEM AT NTPC, ANTA

Submitted For The Partial Fulfillment Towards The AwardOf

Master of Business AdministrationDegree

(2009-2011)

SUBMITTED BY : SUBMITTED TO:

PIYUSH ADLAKHA MR. MOHIT PANT MBA III SEM (HOD) OKIM&R KOTA

OM KOTHARI INSTITUTE OF MANAGEMENT & RESEARCH, KOTA (AFFILATED TO RAJASTHAN TECHNICAL UNIVERSITY, KOTA)

1

OM KOTHARI INSTITUTE OF MANAGEMENT & RESEARCH,KOTA

OM KOTHARI INSTITUTE OF MANAGEMENT & RESEARCH

(Affiliated to Rajasthan Technical University, Kota, Approved by All-India

Council for Technical Education-Government of India and Sponsored by

Om Kothari Foundation, Kota)

INTERNAL GUIDE CERTIFICATE

This is to certify that Mr. Piyush Adlakha student of MBA I Year at Om Kothari

Institute of Management and Research has completed Summer Training Report

entitled. “A STUDY OF PERFORMANCE APPRAISAL SYSTEM AT NTPC,

ANTA ”.

The project has been completed after studying for one year in MBA course and for

partially fulfilling the requirements for award of degree of Master of Business

Administration of Rajasthan Technical University, Kota.

The Training Project study Report has been completed under the guidance of Mr. Mohit

Pant (HOD of OKIMR) and is as per norms and guidelines provided.

Prof. Mukesh Jain Mr. Mohit Pant

Principal Academic Guide

Kota

Date:

A-1, Special I.P.I.A. Jhalawar Road, Kota-324005

2

(: 0744-2490878, 2490402, E-mail: [email protected]

Fax: 0744-2438069

OM KOTHARI INSTITUTE OF MANAGEMENT &RESEARCH

(Affiliated to Rajasthan Technical Kota, Approved by All-India Council for Technical Education-Government of

India and Sponsored by Om Kothari Foundation, Kota)

CERTIFICATE

This is to certify that Mr. Piyush Adlakha student of MBA I Year at Om Kothari Institute

of Management and Research has completed Summer Training Report entitled. “A

STUDY OF PERFORMANCE APPRAISAL SYSTEM AT NTPC, ANTA”.

The training has been completed after studying for one year in MBA course and for

partially fulfilling the requirements for award of degree of Master of Business

Administration of Rajasthan Technical University, Kota.

The Training Report has been evaluated and viva-voce conducted by the undersigned

panel of examiners. The project has been found satisfactory and is recommended for

acceptance.

Prof. Prof.

Internal Examiner External Examiner

Kota

Date:

3

A-1, Special I.P.I.A. Jhalawar Road, Kota-324005

(: 0744-2490878, 2490402, E-mail: [email protected]

Fax: 0744-243806

DECLARATION

I, PIYUSH ADLAKHA, student of final year, MBA, OKMI&R, hereby declare that this

dissertation entitled “Study of Performance Appraisal and Performance Management

System in Power Management Institute, NTPC ANTA(BARAN) is based on my original

research work and has not been submitted for the award of any other degree, diploma or

fellowship and has not been published in any journal or magazine.

All the persons who helped me during and in the preparation of this report are duly

acknowledged. The results that are published here are purely for academic purpose only.

PIYUSH ADLAKHA

M.B.A. III Sem.

4

ACKNOWLEDGEMENT

I would like to express my deep and sincere gratitude to NTPC, POWER MANAGEMENT INSTITUTE, ANTA(BARAN) for having provided me with the opportunity to do my project on an interesting area.

The project was a great source of learning and a good experience as it made me aware of the professional culture and conduct that exists in an organization.

Though at the onset of ambitious project one always encounters certain difficulties in the beginning, however, overcoming these difficulties of the project as well as making it a success, greatly depends on the encouragement, inspiration, and help given by Mr. ANIRUDDH and other employees of NTPC, PMI. For completion of this project various people have put lots of efforts.

I would like to thank my H.O.D. Sir and all other professors of OKMI&R for their invaluable guidance, immense support and help.

I will also like to thank other management trainees of my group for their cooperative attitude and queries which made me understand the different topics of HR quickly.

And finally I would like to thank god & my parents who inspired a lot for the completion of the project.

PIYUSH ADLAKHA

5

PREFACE

The Summer Training Report Is an Integral Part of the Master of Business Administration Curriculum of Department of Management, OKMI&R affiliated to RAJASYHAN TECHNICAL UNIVERSITY, KOTA.

During the course of training, the researcher is expected to use and apply his academic knowledge and gain a valuable insight to know the employees and organization behavior.

During the course of my training, I did a comprehensive study of performance appraisal system and its management towards the effectiveness of the organization. I have undertaken the training on the same at POWER MANAGEMENT INSTITUTE, NTPC ANTA(BARAN) to study the Power Appraisal and Power Management System in this company regarding Worker/employees satisfaction and awareness. As result of that I come out with the project titled, “STUDY OF PERFORMANCE APPRAISAL AND PERFORMANCE MANAGEMENT SYSTEM ” in the organization.

In this report I have put my lines effort to compile the data with utmost accuracy and give the views to the best of my judgment.

6

EXECUTIVE SUMMARY

This is an attempt to present a progressive detailed discussion on the PERFORMANCE MANAGEMENT SYSTEM OF NTPC, PMI. Performance management system is a method through which total evaluation of an employee’s performance throughout the year undertaken by his/her superior wherefrom the junior get to know his/her own standing in the organization. This system is a very important aspect, which gives the true picture of the company’s driving in a particular year. I have, over here, tried to make almost a research work on the company’s PMS and fought out my utmost level to bring the best in my training.

The study comprises of the first textual connotation of the performance appraisal system, in general, then continued with a detailed study on PMS system of NTPC.But to go into further details of the topic, I had built a questionnaire for employees working in the organization based on the PMS forms. In these questionnaires, I have tried to understand the general psyche of the people regarding the PMS system operating in the organization.

After observing the results, I interpreted into a conclusion, which further directed me to find out the loopholes and backlogs. Accordingly, with the meager knowledge and some kind of intelligence that I carry, I have tried to give necessary suggestions to the corporate body as to how to overcome its weakness in this system and build up their strengths. No matter, how ordinary they might be, according to me, they were the actual recommendations that I could suggest to NTPC.

7

CONTENTS

Certificates Declaration Preface Acknowledgement Executive summery

Chapter no. Chapter name Page No.

1. Company Profile 1-21

2. Conceptual Framework : Performance Appraisal System

22-43

3. Project Profile : Performance Appraisal System in NTPC

44-46

4. Research Design 47-49

5 Data Analysis And Data Interpretations

50-61

6. Conclusions 62

7. Suggestions 63

Bibliography 64

Annexure

Questionnaire 65-66

8

CHAPTER-1

9

THE COMPANY

NTPC Limited is the largest thermal power generating company of India. A public sector company, it was incorporated in the year 1975 to accelerate power development in the country as a wholly owned company of the Government of India. At present, Government of India holds 89.5% of the total equity shares of the company and the balance 10.5% is held by FIIs, Domestic Banks, Public and Others.

Within a span of 30 years, NTPC has emerged as a truly national power company, with power generating facilities in all the major regions of the country. Based on 1998 data, carried out by Data monitor UK, NTPC is the 6th largest in terms of thermal power generation and the second most efficient in terms of capacity utilizations amongst the thermal utilities in the world.

10

NTPC: AN OVERVIEW

Established in 1975, NTPC, the largest power company of the country has been consistently powering the growth of India. With an installed capacity of 30,644 Mega Watt (MW), NTPC today contributes 27.08% of the nation’s power generation with only 20.06% of India’s total installed capacity.

NTPC has embarked on plans to become a 75,000 MW company by 2017.

An ISO 9001: 2000 certified company; it is world’s 6 th largest Thermal Power Generator and 2nd most efficient in capacity utilization.The corporation recorded a generation of 159.11 Billion Units in 2004-05, through 13 coal based, 7 gas based power plants, and Joint Ventures Projects spread all over the country.

Driven by its vision to lead, it has charted out an ambitious growth plan of becoming a 75,000 MW plus company by 2017.

NTPC has been rated as one of the top most “Best Employer” of the country for the year 2003, 2004 and 2005 in a row.

It has also been rated as one of the “Best Companies to Work for in India” by Mercer HR Consulting- Business Today Survey 2004, it has developed into a multi - location and multi- Fuel Company over the past three decades.

These achievements have been made possible by the 23500 strong and motivated work forces that with their dedication are ever willing to take NTPC to greater heights NTPC was among the first Public Sector Enterprises to enter into a Memorandum of Understanding (MOU) with the Government in 1987-88. Since then, every year, NTPC has been placed under the 'Excellent category' (the best category). In recognition of its excellent performance and tremendous potential NTPC has been given the status of "Navratna" by the Government of India.

CORPORATE PROFILE :

National Thermal Power Corporation Limited

11

NTPC VISION

"A world class integrated power major, powering India’s growth, with increasing global presence."

NTPC MISSION

“Develop and provide reliable power, related products and services at competitive prices, integrating multiple energy sources with innovative and eco-friendly technologies and contribute to society.”

Make available reliable and quality power in increasingly large quantities at appropriate tariffs and ensure timely realization of revenues.

Speedily plan and implement power projects, with the contemporary technologies. Implement strategic diversification in the areas of R&M, Hydro, LNG and non-

conventional and eco-friendly fuels and explore new areas like transmission on IT etc.

Promote consultancy and make prudent acquisitions. Continuously develop competent HR to match world standards. Be a responsible corporate citizen, with thrust on environment protection

rehabilitation and ash utilization.

HR VISION

"To enable our people to be a family of committed world class professionals, making NTPC a learning organization"

CORE VALUES (COMIT)

Customer Focus Organizational Pride Mutual Trust and Respect Initiative and Speed Total Quality

COMIT

Customer Focus:1. Has conviction that the customer is the centre of all activity and attention.

12

2. Is courteous, sincere, patient and sensitive to the customers.3. Honors commitment on time.

Organizational Pride:1. Holds the company in high esteem.2. Rejoices in belonging to it.3. Demonstrate loyalty and commitment to the organization.4. Has a sense of ownership and belongingness with it.

Mutual Respect and Trust:1. Has high regard for and faith in the fellow organizational members.2. Believes in collaboration and openness.3. Has good team spirit.

Initiative and speed:1. Believes in taking the first step.2. Thinking new and ahead.3. Being swift with our compromising on quality.4. Is creative and innovative.5. Has the willingness to experiment and take risks.

Total Quality:1. Believes in pursuing excellence in all spheres of activity.2. Makes continues efforts in improving standards of performance, systems and

processes.

CORPORATE OBJECTIVE

1. Growth: To add generating capacity within prescribed time and cost. To expand consultancy operation and to participate in ventures abroad. To diversify into hydro and non-conventional energy sources for power

generation. To diversify into power related business to ensure integrated development

of energy sector in India. To achieve continuous performance improvement in the areas of project

implementation, plant operation and maintenance, generation efficiency etc and to acquire and sustain internationally comparable standards in these areas with good business ethic and values.

2. Human Resource Development: To develop learning organization having knowledge based competitive

edge. To create a culture of team building, empowerment and accountability

to convert knowledge into productive action with speed, creativity and flexibility.

13

3. Financial Soundness: To maintain and improve the financial soundness of NTPC Ltd by

managing the financial resources in accordance with the best commercial utility practices.

To develop appropriate commercial policies which ensure remunerative tariffs and minimum receivables?

2. Technology Leadership: To acquire, assimilate and adopt reliable, efficient and cost effective

technologies and to disseminate knowledge to other constituents of the power sector in the country.

3. Sustainable Power Development: To contribute to sustainable development by functioning as a responsible

corporate citizen and discharge social responsibilities in the areas of environment protection and rehabilitation.

The corporation will strive to utilize the ash produced as its stations to the maximum extent possible.

4. Research Development: To carry out Research and Development for efficient and reliable

operation of power plants in the country.

NTPC’S GROWTH CHART

NTPC's core business is engineering, construction and operation of power generating plants and also providing consultancy to power utilities in India and abroad. As on date the installed capacity of NTPC is 30,644 MW through its 14 coal based, 7 gas based and 3 Joint Venture Projects. NTPC acquired 50% equity of the SAIL Power Supply Corporation Ltd. (SPSCL). This JV company operates the captive power plants of Durgapur (120 MW), Rourkela (120MW) and Bhilai (74 MW).

14

SUBSIDIARIES OF NTPC

NTPC Electric Supply Company Ltd (NESCL): NESCL is a wholly owned subsidiary of NTPC. It was incorporated in August 2002 with the objective to acquire, establish & operate Electricity Distribution Network in various circles/cities across India. The company provides consultancy in the area of: Turnkey execution, Project monitoring, Quality Assurance and Inspection, and Third Party Quality inspection on the behalf of utility.

NTPC Vidyut Vyapar Nigam Ltd. (NVVN): It was formed to cater to and deal with the vast potential of power trading in the country and optimum capacity utilization.

NTPC Hydro Limited (NHL): It was set up in December, 2002 to develop small and medium sized Hydro Electric Power Projects of up to 250 MW capacities.

MAJOR ACHIEVEMENTS OF NTPC

Largest thermal power generating company of India. Sixth largest thermal power generator in the world. Second most efficient utility in terms of capacity utilization. One of the nine PSUs to be awarded the status of Navratna. Provides power at the cheapest average tariff in the country.

PRODUCTS AND SERVICES OF NTPC

Power generation is the main activity of NTPC which has an installed capacity of 27,850 MW shared by 22 generating stations. Four generating stations in joint venture have an additional capacity of 2044 MW. Consultancy in fields of water supply and treatment, fossil fuel based thermal power stations, environment engineering, and cogeneration plants. Consultancy service has got NTPC over 435 domestic and international orders.

Power Management Institute in anta (baran) provides classroom training in power plant operations and management. Full Scope Replica Training Simulator for coal and gas based power plants makes training meaningful and effective. Students from outside NTPC can also undergo these training schedules.

NTPC LIMITED - FINANCIAL AND STRATEGIC ANALYSIS REVIEW

NTPC Limited (NTPC) is an independent power company. The company is engaged in the development, engineering, construction and operation of power generating plants. NTPC sells electricity to bulk consumers, principally electricity utilities companies or

15

entities owned by States Government. Further, it is also engaged in providing consultancy services for power plant construction and power generation to companies in domestics as well as international. NTPC is the largest thermal power generating company in India as well as stand sixth in world. In 2008, the company's gross generation was 2,00,863 million units of electricity.

India’s largest power company, NTPC was set up to accelerate power development in India. NTPC is emerging as a diversified power major with presence in the entire value chain of the power generation business. Apart from power generation, which is the mainstay of the company, NTPC has already ventured into consultancy, power trading, ash utilization and coal mining. NTPC ranked 317th in the ‘2009, Forbes Global 2000’ ranking of the World’s biggest companies.

This power generation company established in 1975 aims at becoming an integrated power commanding height with total power value chain.

The total installed capacity of the company is 30, 644 MW (including JVs) with 15 coal based and 7 gas based stations, located across the country. In addition under JVs, 3 stations are coal based & another station uses naphtha/LNG as fuel. By 2017, the power generation portfolio is expected to have a diversified fuel mix with coal based capacity of around 53000 MW, 10000 MW through gas, 9000 MW through Hydro generation, about 2000 MW from nuclear sources and around 1000 MW from Renewable Energy Sources (RES). NTPC has adopted a multi-pronged growth strategy which includes capacity addition through green field projects, expansion of existing stations, joint ventures, subsidiaries and takeover of stations.

NTPC's coal based power stations are at: Singrauli (Uttar Pradesh), Korba (Chattisgarh), Ramagundam (Andhra Pradesh), Farakka (West Bengal), Vindhyachal (Madhya Pradesh), Rihand (Uttar Pradesh), Kahalgaon (Bihar), NTCPP (Uttar Pradesh), Talcher (Orissa), Unchahar (Uttar Pradesh), Simhadri (Andhra Pradesh), Tanda (Uttar Pradesh), Badarpur (Delhi), and Sipat (Chattisgarh).

NTPC's Gas/Liquid based power stations are located at: Anta (Rajasthan), Auraiya (Uttar Pradesh), Kawas (Gujarat), Dadri (Uttar Pradesh), Jhanor-Gandhar (Gujarat), Rajiv Gandhi CCPP Kayamkulam (Kerala), and Faridabad (Haryana).

NTPC's Power Plants with Joint Ventures are located at:Durgapur (West Bengal), Rourkela (Orissa), Bhilai (Chhattisgarh), and RGPPL (Maharastra). NTPC has been operating its plants at high efficiency levels. Although the company has

16

18.79% of the total national capacity it contributes 28.60% of total power generation due to its focus on high efficiency.

In October 2004, NTPC launched its Initial Public Offering (IPO) consisting of 5.25% as fresh issue and 5.25% as offer for sale by Government of India. NTPC thus became a listed company in November 2004 with the government holding 89.5% of the equity share capital The rest is held by Institutional Investors and the Public. The issue was a resounding success. NTPC is among the largest five companies in India in terms of

market capitalisation

At NTPC people before Plant Load Factor is the mantra that guides all HR related policies. NTPC has been awarded No.1, Best Workplace in India among large

17

organizations for the year 2008, by the Great Places to Work Institute, India Chapter in collaboration with The Economic Times.The concept of Corporate Social Responsibility is deeply ingrained in NTPC's culture. Through its expansive CSR initiatives NTPC strives to develop mutual trust with the communities that surround its power stations.Right from social to developmental work of the community and welfare based dependence to creating greater self reliance; the constant endeavor is to institutionalise social responsibility on various levels.

NTPC’S EMPLOYER SURVEY

NTPC has been ranked fifth among the top ten "Best companies to work for in India" by Mercer HR Consulting-Business Today Survey 2005. This is the third consecutive year that NTPC has appeared in this prestigious list. Besides, NTPC is also the only PSU among the top ten companies. The survey was conducted on the basis of four attributes such as HR Metrics, HR Processes and policy, Internal Employee Perception & Stake holder Perception on a weighted scale to arrive at a total score for each company surveyed.

NTPC has also been ranked as "3rd Great Place to Work" for in India again according to the survey conducted by Grow Talent and Business World 2005. What makes NTPC stand apart is its ability to balance concern for its employees with a high performance work culture. All NTPC employees have a Projects Manager’s obsession with deliverables and deadline.

MAJOR POWER STATIONS OF NTPC

18

19

NTPC POWER LOCATION STATIONS

20

NTPC - GROWTH PLANS

The liberalization process initiated in the year 1991 and the new power policy announced by the Government in October 1991 have redrawn the contours of power industry in the country. Participation of the private sector in the hitherto exclusive domain of the Government in power generation, transmission and distribution is bringing in fundamental changes in the sector.

Thus the terminal year of this Plan, year 2012,will witness a very different scenario with patterns of ownership of assets significantly altered, and the norms of project implementation, plant availability & reliability, operations etc. changed to match international standards. The emerging competition form Independent Power Producers (IPPs), stringent environmental regulations, uncertainties in fuel linkages, funds constraints, restraints, restructuring of reforms in the power sector are all crucial and interrelated factors having major impact on business decisions.These fundamental changes have necessitated a fresh look at how we do our business and what it is that we must do to achieve our vision:

"To be one of the world's largest and best power utilities, powering India's growth".

To realize this vision, NTPC has drawn up a detailed Corporate Plan for the period 1997-2012 which represents the company's collective optimism and enthusiasm, inspired by a glorious past, a vibrant present and a brilliant future. The Plan has been prepared in-house in consultation the committed, competent and confident members of the NTPC family. The road map that has been charted out was after a thorough scan of the strengths and weaknesses within the organization as well as opportunities and threats in the environment.

Considering multidimensional opportunities in the energy sector, NTPC will adopt a multi-pronged growth strategy for capacity addition through greenfield sites, expansion of existing stations, takeovers and joint ventures.

The capacity addition plans that we have drawn up for the fifteen-year period using all the above strategies to enable the corporation to become a 75,000 MW company by 2017.

21

In addition to the above, NTPC also has plans to venture into the following areas:

Renovation & Modernization of old power stations through a separate joint venture company that are –

Investment in LNG terminal; Investment in coal mining and washeries; Setting up of power plants abroad; Joint ventures for ash-based industries; Setting up of small pilot plants using renewable energy sources; Setting up of hydel power plants to facilitate techno-economic operation of

thermal-hydro mix of NTPC stations; Setting up of associated extra high voltage transmission lines / inter-regional EHV

transmission lines so as to ensure evacuation of power from NTPC stations.

22

NTPC – NEW PROJECTS

The company has formulated a long term Corporate Plan for 15 years upto 2012. The Corporate Plan seeks to integrate the Company's vision, mission and strategies for growth with the national plans and to provide the company the cutting edge in the emerging competitive environment. NTPC is targeting to become a '40000 MW Plus' company by 2012.

PROJECTS UNDER CONSTRUCTION TOTAL CAPACITY - 10990 MW

Project(State)

Capacity(MW)

Fuel Commission Schedule

Ramagundam - III (Andhra Pradesh) 500 Coal Unit - VII Aug 2005

Rihand - II(Uttar Pradesh)

1000(2x500)

Coal Unit - III Aug 2005Unit - IV May 2006

Vindhayachal - III (Madhya Pradesh)

1000(2x500)

CoalUnit - IX Feb 2007Unit - X Aug 2007

Kahalgaon Phase II Stage I (Bihar)

1000(2x500)

CoalUnit - V Nov 2006Unit - VI May 2007

Kahalgaon Phase II Stage II (Bihar)

500(1x500)

Coal Unit - VII Nov 2008

Sipat - I1995(3x665)

CoalUnit - I Apr 2008Unit - II Feb 2009Unit - III Dec 2009

Sipat - II1000(2x500)

CoalUnit - I Jun 2007Unit - II Dec 2007

Unchahar III(Uttar Pradesh)

210(1x210)

Coal Unit - I Sep 2006

Koldam (Himachal Pradesh)

800(2x400)

Hydro

Unit - I Nov 2008Unit - II Jan 2009Unit - III Mar 2009Unit - IV Apr 2009

Talcher -II(Orissa)

2000 (4x500)

Coal

Unit - III 500 MW Jan 2003*Unit - IV 500 MW Oct 2003*Unit - V 500 MW May 2004Unit - VI 500 MW Feb 2006

Total 10,005 *Already commissioned

23

MW

NEW PROJECTS BEING PURSUED FOR CAPACITY ADDITION

FOR TENTH PLAN AND BEYOND

In addition to the above, a host of new power projects as given below are being pursued for further capacity addition in the 10th plan and beyond:

S. No. Project/ State Capacity (MW)

1. Bhilai CPP-II Expansion-JV with SAIL 500

2. Nabinagar-JV with Railways 1,000

3. Barh/ Bihar 1,980

4. North Karanpura/ Jharkhand 1,980

5. Kawas-II/ Gujarat 1,300

6. Gandhar-II/ Gujarat 1,300

7. Loharinag Pala/ Uttaranchal 600

8. Tapoban Vishnugad/ -do- 520

9. Lata Tapovan/ Uttaranchal – to be implemented by NTPC Hydro Ltd, a wholly owned subsidiary of NTPC

108

10. Kayamkulam – II/ Kerala 1,950

11. Ennore – JV with TNEB 1,000

24

NTPC JOINT VENTURES

NTPC, with a rich experience of engineering, constructing and operating nearly 20,000 MW of thermal generating capacity, is the largest and one of the most efficient power companies in India, having operations that match the global standards.

NTPC has identified Joint Ventures, strategic alliances as well as acquisitions and diversifications as viable and desired options for its business development.

NTPC looks for opportunity to create such joint ventures and strategic alliances, in the entire value chain of the power business. NTPC as a partner endows the Joint Venture Alliances with a winning edge. Acquisitions and Diversifications in the areas related to the core business not only ensure growth but also add to the robustness of the company.

The following joint venture companies have been formed so far:

NTPC - ALSTOM POWER SERVICES PVT. LTD. (NASL) (Incorporated in 1999 and formerly known as NTPC-ABB ALSTOM POWER SERVICES PVT. LTD)

PROMOTERS'EQUITY: NTPC: 50% ALSTOM Power Generation AG: 50%

UTILITY POWER TECH LTD (Incorporated in 1996) This JV has been promoted with BSES Limited, a private sector Indian Power Company.

PROMOTERS' EQUITY: NTPC: 50% BSES: 50%

POWER TRADING CORPORATION (Incorporated in 1998) This JV has been promoted with Power Grid Corporation of India Ltd (PGCIL), a Government owned transmission major in India. Power Finance Corporation (PFC), a power sector finance company owned by the Government of India and National Hydro Electric Power Corporation Ltd. (NHPC), a Government owned hydropower utility.

25

NTPC-SAIL POWER COMPANY (PVT) LTD (NSPCL )

This JV has been formed on 23rd March, 2001 with Steel Authority of India Ltd (SAIL), a Government of India undertaking engaged in the steel manufacturing business and owns four large integrated steel plants in the country PROMOTERS' EQUITY: NTPC: 50%, SAIL: 50%

BHILAI ELECTRIC SUPPLY COMPANY LTD (BESCL)

This JV has been formed on 22nd March 2002 with Steel Authority of India Limited (SAIL), a Government of India undertaking engaged in the steel manufacturing business.

PROMOTERS' EQUITY: NTPC: 50%, SAIL: 50%

SOCIAL RESPONSIBILITY

NTPC fulfilled the social responsibility by taking initiative for protecting the environment in the following ways –

Harmony between man and environment is the essence of healthy life and growth. Therefore, maintenance of ecological balance and

a pristine environment has been of utmost importance to NTPC.

Environment protection continues to be a key area of activity in NTPC along with growth in generation of power.

Driven by its commitment for sustainable growth of power, NTPC has evolved a well defined environment management policy for minimizing environmental impact arising out of setting up of power plants and preserving the natural ecology. In November 1995, NTPC became the first public utility to bring out a comprehensive document entitled "NTPC Environment Policy and Environment Management System". Amongst the guiding principles, adopted in the document, are the company's proactive approach to environment, optimum utilization of equipment, adoption of latest technologies and continual environment improvement. The policy also envisages efficient utilization of resources, thereby minimizing waste, maximizing ash utilization and providing green belt all around the plant for maintaining ecological balance.NTPC's environment-friendly approach to power has already begun to show results in conservation of natural resources such as water and fuel (coal, oil & gas) as well as control of environmental pollution. NTPC has chalked out a set of well-defined activities that are envisaged right from the project conceptualization stage.

Performance enhancement and upgradation measures are undertaken by the organization during the post-operational stage of the stations. These activities have greatly helped to

26

minimize the impact on environment and preserve the ecology in and around its power projects. These measures have been enumerated as follows.

Environment Management System / ISO-14001 -NTPC has established Environmental Management System (EMS) as per ISO-14001 at its different establishments. As a result of pursuing sound environment management practices, all NTPC power stations (excluding Simhadri which was commissioned recently) as well as the Corporate Environment Management and Ash Utilization Division have already been certified for ISO-14001 EMS by reputed Certifying Agencies. The only remaining station Simhadri is also in the process of obtaining the ISO-14001 Certification.

Environment Policy –The salient features of NTPC's Environment Policy and Environment Management System as adopted in November 1995 are enumerated below.

To achieve and maintain a leader's role in the area of Environment Management in the Power Sector in the country.

To keep in view the various environmental requirements in all its business decisions. To continuously adopt ways and means for Environment Protection and Environment

Improvement around its business units. To adopt sound Environment Management practices. To aim at full compliance with the statutory norms / requirements.

In addition, we have specific environmental policies at our Environment management and Ash Utilization Division at Corporate Centre and at each station as a part of EMS as per ISO-14001. The Environment Policy of the Corporate Environment Management and Ash Utilization Division as adopted in March 2003 under the EMS is stated below.

Continual improvement of environmental performance of all NTPC power stations in pursuance of our vision of powering India’s growth.

Continually monitor all the stations for pollution prevention and environmental protection.

Conservation of natural resources including land by utilizing more and more ash generated by thermal power stations of NTPC.

Assist stations for compliance with relevant environmental legislations and regulations.

To promote environmental awareness amongst the employees of NTPC. To create awareness of Ash Utilization and its environmental benefits among the

Engineers, Builders, Architects, Potential Entrepreneurs, NTPC personnel and public at large.

Environmental Institutional Set-up –Realizing the importance of protection of the environment with speedy development of the power sector, the company has constituted different groups at project, regional and corporate centre level to carry out specific environment related functions. The

27

Environment Management Group, Ash Utilization Division and Centre for Power Efficiency & Environment Protection (CENPEEP) function from the Corporate Centre and initiate measures to mitigate the impact of power project implementation on the environment and preserve ecology in the vicinity of the projects. Environment Management and Ash Utilization Groups established at each station, look after various environmental issues of the individual station.

Environment Impact Assessment –One of the environment conscious corporate citizens and have ensured that our efforts towards improving the environment match with our developmental efforts in the power sector. NTPC has been conducting Environment Impact Assessment (EIA) studies of the areas in the vicinity of our projects that form the basis of our efforts to protect and maintain our environment. These studies extend to around one year period, in its various power projects. This consists of literature search, field studies and impact assessment in the area of the land use, water use, socio-economic aspects, soil, hydrology, water quality, meteorology, air quality, terrestrial and aquatic ecology and noise.

The EIA involves stage-by-stage evaluation of various parameters that affect the environment. Based on EIA study, wherever required, specific scientific studies are also conducted to scientifically assess the likely impact of the pollutants on the sensitive flora and fauna in the surroundings, as also, to take preventive and mitigatory measures, wherever required.A detailed post-operational regional integrated EIA study was also conducted by NTPC through M/s EdF, France for the Singrauli Area during the year 1989-90.

Ecological Monitoring

NTPC has undertaken a comprehensive Ecological Monitoring Programme through Satellite Imagery Studies covering an area of about 25 Kms radius around some of its major plants. The studies have been conducted through National Remote Sensing Agency (NRSA), Hyderabad at its power stations at Ramagundam (AP), Farakka, (WB), Korba (Chhatisgarh), Vindhyachal (MP), Rihand (UP).

These studies have revealed significant environmental gains in the vicinity areas as a result of pursuing sound environment management practices. Some of these important gains that have been noticed are increase in dense forest area, increase in agriculture area, increase in average rainfall, decrease in waste land etc.Such studies conducted from time to time around a power project have established the environment status at various post operational stages .In general, the studies, as such, have revealed that there is no significant adverse impact on the ecology due to the project activities in any of these stations. Such studies conducted from time to time around a power project have established the environment status at various post operational stages of the project.

Resource Conservation –With better awareness and appreciation towards ecology and environment, thermal power utilities have been continually looking for innovative and

28

cost effective solutions to conserve natural resources and reduce wastes. Some of the measures include:

Reduction in land requirements for main plant and ash disposal areas in newer units.

Capacity addition in old plants, within existing land. Reduction in water requirement for main plant and ash disposal areas through

recycle and reuse of water. Reduction in fuel requirement through more efficient combustion and adoption of

state-of-the-art technologies such as super critical boilers.

Pollution Control Systems –While deciding the appropriate technology for its projects, NTPC integrates many environmental provisions into the plant design. In order to keep emission, effluents and ambient air quality well within acceptable limits, NTPC has provided the best available equipments, devices and systems such as high efficiency Electrostatic Precipitators (ESPs), Tall Stacks and Low NOx Burners for control of stack emissions, Dust Extraction and Dust Suppression Systems for control of fugitive dust, Effluent Treatment Plants, Neutralisation Pits and Ash Ponds for control of the effluent quality, Ash Water Re-circulation System and Cooling Towers for control of the effluent quality as well as conservation of water and Sewage Treatment Plant (STP) for treatment of the domestic sewage from its plant and township areas.

Monitoring of Environmental Parameters –A broad based Environment Monitoring Programme has been formulated and implemented in NTPC. All pollutants discharged from the power plant through stack emission, ash pond effluent, main plant effluent, domestic effluent and Condenser Cooling Water (CCW) effluent are monitored at the stipulated frequency at the source itself and at the points of discharge. In addition to the above, ambient air, surface water and ground water quality in and around NTPC plants are regularly monitored to assess any adverse impacts as a result of operation of the power plant.

Environmental Reviews –To maintain constant vigil on environmental compliance, Environmental Reviews are carried out at all operating stations and remedial measures have been taken wherever necessary. As a feedback and follow-up of these Environmental Reviews, a number of retrofit and up gradation measures have been undertaken at different stationsSuch periodic Environmental Reviews and extensive monitoring of the facilities carried out at all stations have helped in compliance with the environmental norms and timely renewal of the Air and Water Consents.

On-Line Data Base Management –In order to have better control on pollution and to achieve effective environment management in and around NTPC stations, it is imperative to have an on-line, reliable and efficient environment information system on the plant operational and environmental performance parameters at all three levels i.e. generating Stations, Regional Headquarters

29

and Corporate Centre. In consideration of the above, a computerized Programme, namely "Paryavaran Monitoring System" - PMS, which could provide reliable storage, prompt 20 and accurate flow of information on environmental performance of Stations was developed and installed in NTPC. This software facilitates direct transfer of environment reports and other environment related information from stations to the Regional Headquarters and Corporate Centre. The PMS has already been implemented at Corporate Centre, four Regional Headquarters and most of the Stations.

This system will help in achieving continuous improvement in NTPC's environment performance through improved monitoring and reporting system by using the trend analysis and advanced data management techniques.

Liquid Waste Management System –The objective of industrial liquid effluent treatment plant (ETP) is to discharge lesser and cleaner effluent from the power plants to meet environmental regulations. After primary treatment at the source of their generation, the effluents are sent to the ETP for further treatment. The composite liquid effluent treatment plant has been designed to treat all liquid effluents which originate within the power station e.g. Water Treatment Plant (WTP), Condensate Polishing Unit (CPU) effluent, Coal Handling Plant (CHP) effluent, floor washings, service water drains etc. The scheme involves collection of various effluents and their appropriate treatment centrally and re-circulation of the treated effluent for various plant uses.NTPC has implemented such systems in a number of its power stations such as Singrauli, Vindhyachal, Korba, Farakka and Kahalgaon. These plants have helped to control quality and quantity of the effluents discharged from the stations.

Advanced / Eco-friendly Technologies –NTPC has gained expertise in operation and management of 200 MW and 500MW Units installed at different Stations all over the country and is looking ahead for higher capacity Unit sizes with super critical steam parameters for higher efficiencies and for associated environmental gains. At Sipat (Chattisgarh), higher capacity Units of size of 660 MW and advanced Steam Generators employing super critical steam parameters have already been envisaged as a green field project. Higher efficiency Combined Cycle Gas Power Plants are already under operation at all gas-based power projects in NTPC. Advanced clean coal technologies such as Integrated Gasification Combined Cycle (IGCC) have higher efficiencies of the order of 45% as compared to about 38% for conventional plants. NTPC has initiated a techno-economic study under USDOE / USAID for setting up a commercial scale demonstration power plant by using IGCC technology. These plants can use low-grade coals and have higher efficiency as compared to conventional plants. With the massive expansion of power generation, there is also growing awareness among all concerned to keep the pollution under control and preserve the health and quality of the natural environment in the vicinity of the power stations. NTPC is committed to provide affordable and sustainable power in increasingly larger quantity. NTPC is conscious of its role in the national endeavour of mitigating energy poverty, heralding

30

economic prosperity and thereby contributing towards India's emergence as a major global economy.

CHAPTER-2

31

PERFORMANCE APPRAISAL

Introduction

Performance appraisal is the process of obtaining, analyzing and recording information

about the relative worth of an employee. The focus of the performance appraisal is

measuring and improving the actual performance of the employee and also the future

potential of the employee. Its aim is to measure what an employee does

.

According to Flippo, A prominent personality in the field of Human resources,

“performance appraisal is the systematic, periodic and an impartial rating of an

employee’s excellence in the matters pertaining to his present job and his potential for a

better job." Performance appraisal is a systematic way of reviewing and assessing the

performance of an employee during a given period of time and planning for his future.

32

Employee performance Management includes:

• Planning work and setting expectations,

• Continually monitoring performance,

• Developing the capacity to perform,

• Periodically rating performance in a summary fashion, and

• Rewarding good performance

Performance management is the systematic process by which an organization involves its

employees, as individuals and members of a group, in improving organizational

effectiveness in the accomplishment of organization mission and goals.’

It is a powerful tool to calibrate, refine and reward the performance of the employee. It

helps to analyze his achievements and evaluate his contribution towards the achievements

of the overall organizational goals.

33

By focusing the attention on performance, performance appraisal goes to the heart of

personnel management and reflects the management’s interest in the progress of the

employee.

OBJECTIVES OF PERFORMANCE APPRAISAL

• To review the performance of the employees over a given period of time.

• To judge the gap between the actual and the desired performance

• Self assessment by employee

• Understanding strength and weakness.

• Identifying training and development needs.

• Identifying potential.

• Better understanding between appraised and appraiser.

• Recognizing achievements.

• Goal setting GOAL.

• Improved organizational performance.

• 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.

34

• Helps to strengthen the relationship and communication between superior –

subordinates and management – employees.

• To diagnose the strengths and weaknesses of the individuals so as to identify the

training and development needs of the future.

• To provide feedback to the employees regarding their past performance.

• 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.

• To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development.

• To reduce the grievances of the employees.

PROCESS OF PERFORMANCE APPRAISAL

STEPS OF PERFORMANCE APPRAISAL

35

ESTABLISHING PERFORMANCE STANDARDS

The first step in the process of performance appraisal is the setting up of the standards

which will be used to as the base to compare the actual performance 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 organizational

goals and objectives. The standards set should be clear, easily understandable and in

measurable terms. In case the performance of the employee cannot be measured, great

care should be taken to describe the standards.

COMMUNICATING THE STANDARDS

Once set, it is the responsibility of the management to communicate the standards to all

the employees of the organization.

The employees should be informed and the standards should be clearly explained to the.

This will help them to understand their roles and to know what exactly is expected from

36

them. The standards should also be communicated to the appraisers or the evaluators and

if required, the standards can also be modified at this stage itself according to the relevant

feedback from the employees or the evaluators.

MEASURING THE ACTUAL PERFORMANCE

The most difficult part of the performance appraisal process is measuring the actual

performance of the employees that is the work done by the employees during the

specified period of time. It is a continuous process which involves monitoring the

performance throughout the year. This stage requires the careful selection of the

appropriate techniques of measurement, taking care that personal bias does not affect the

outcome of the process and providing assistance rather than interfering in an employees

work.

COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE

The actual performance is compared with the desired or the standard performance. The

comparison tells the deviations in the performance of the employees from the standards

set. The result can show the actual performance being more than the desired performance

or, the actual performance being less than the desired performance depicting a negative

deviation in the organizational performance. It includes recalling, evaluating and analysis

of data related to the employees’ performance.

DISCUSSING RESULTS

The result of the appraisal is communicated and discussed with the employees on one-to-

one basis. The focus of this discussion is on communication and listening. The results,

the problems and the possible solutions are discussed with the aim of problem solving

and reaching consensus. The feedback should be given with a positive attitude as this can

have an effect on the employees’ future performance. The purpose of the meeting should

be to solve the problems faced and motivate the employees to perform better.

DECISION MAKING

37

The last step of the process is to take decisions which can be taken either to improve the

performance of the employees, take the required corrective actions, or the related HR

decisions like rewards, promotions, demotions, transfers etc.

PURPOSE OF PERFORMANCE APPRAISAL

Performance Appraisal is being practiced in 90% of the organizations worldwide. Self-

appraisal and potential appraisal also form a part of the performance appraisal processes.

Typically, Performance Appraisal is aimed at:

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.

To diagnose the training and development needs of the future.

Provide information to assist in the HR decisions like promotions, transfers etc.

Provide clarity of the expectations and responsibilities of the functions to be

performed by the employees.

To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development.

To reduce the grievances of the employees.

Helps to strengthen the relationship and communication between superior –

subordinates and management – employees.

Challenges of Performance Appraisal

In order to make a performance appraisal system effective and successful, an

organization comes across various challenges and problems. The main challenges

involved in the performance appraisal process are:

38

Determining the evaluation criteria

Identification of the appraisal criteria is one of the biggest problems faced by the

top management. The performance data to be considered for evaluation should be

carefully selected. For the purpose of evaluation, the criteria selected should be in

quantifiable or measurable terms

Create a rating instrument

The purpose of the performance appraisal process is to judge the performance of

the employees rather than the employee. The focus of the system should be on

the development of the employees of the organization.

Lack of competence

Top management should choose the raters or the evaluators carefully. They

should have the required expertise and the knowledge to decide the criteria

accurately. They should have the experience and the necessary training to carry

out the appraisal process objectively

Errors in rating and evaluation

Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait

influencing the evaluator’s rating for all other traits) etc. may creep in the

appraisal process. Therefore the rater should exercise objectivity and fairness in

evaluating and rating the performance of the employees.

Resistance

The appraisal process may face resistance from the employees and the trade

unions for the fear of negative ratings. Therefore, the employees should be

communicated and clearly explained the purpose as well the process of appraisal.

The standards should be clearly communicated and every employee should be

made aware that what exactly is expected from him/her.  

39

PRE-REQUISITES FOR EFFECTIVE & SUCCESSFUL PERFORMANCE

APPRAISAL

The essentials of an effective performance system are as follows:

1. Documentation – means continuous noting and documenting the performance. It

also helps the evaluators to give a proof and the basis of their ratings.

2. Standards / Goals – the standards set should be clear, easy to understand,

achievable, motivating, time bound and measurable.

3. Practical and simple format - The appraisal format should be simple, clear, fair

and objective. Long and complicated formats are time consuming, difficult to

understand, and do not elicit much useful information.

4. Evaluation technique – An appropriate evaluation technique should be selected;

the appraisal system should be performance based and uniform. The criteria for

evaluation should be based on observable and measurable characteristics of the

behavior of the employees.

5. Communication – Communication is an indispensable part of the performance

appraisal process. The desired behavior or the expected results should be

communicated to the employees as well as the evaluators. Communication also

plays an important role in the review or feedback meeting. Open communication

system motivates the employees to actively participate in the appraisal process

6. Feedback – The purpose of the feedback should be developmental rather than

judgmental. To maintain its utility, timely feedback should be provided to the

employees and the manner of giving feedback should be such that it should have a

motivating effect on the employees’ future performance.

7. Personal Bias – Interpersonal relationships can influence the evaluation and the

decisions in the performance appraisal process. Therefore, the evaluators should

be trained to carry out the processes of appraisals without personal bias and

effectively.

40

MANAGERIAL ETHICS IN PERFORMANCE APPRAISAL

Performance appraisal system should be effective as a number of crucial decisions are

made on the basis of score or rating given by the appraiser, which in turn, is heavily

based on the appraisal system. Appraisal system, to be effective, should possess the

following essential characteristics:

Reliability and validity:

Appraisal system should provide consistent, reliable and valid information and data,

which can be used to defend the organization-even in legal challenges. If two appraisers

are equally qualified and competent to appraise an employee with the help of same

appraisal technique, their ratings should agree with each other. Then the technique

satisfies the condition of inter-rater reliability. Appraisals must also satisfy the condition

of validity be measuring what they are supposed to measure. For example, if appraisal is

made for potential of an employee for promotion, it should supply the information and

data relating to potentialities of the employee to take up higher responsibilities and carry

on activities at higher level.

Job Relatedness:

The appraisal technique should measure the performance and provide information in Job

related activities/areas.

St

andardization:

Appraisal forms, procedures, administration of techniques, rating etc. should be

standardized as appraisal decisions affect all employees of the group.

Practical Viability:

The techniques should be practically viable to administer, possible to implement and

economical regarding cost aspect.

Legal Sanction:

It should have compliance with the legal provisions concerned of the country.

41

Training and Appraisers:

Because appraisal is important and sometimes difficult, it would be useful to provide

training to appraisers namely insights and ideas on rating, documenting appraisals, and

conducting appraisal interviews. Familiarity with rating errors can improve rater

performance and this may inject the needed confidence in appraisers to look into

performance ratings more objectively.

Open Communication:

Most employees want to know how well they are performing on the job. A good appraisal

system provides the needed feedback on a continuing basis. The appraisal interviews

should permit both parties to learn about the gaps and prepare themselves for future. To

this end, managers should clearly explain their performance expectations to their

subordinates in advance of the appraisals period. Once this is known it becomes easy for

employees to learn about the yardsticks and, if possible, try to improve their performance

in future.

Employee Access to Results:

Employees should know the rules of the game. They should receive adequate feedback on

their performance. If performance appraisals are meant for improving employees

performance, then withholding appraisals results would not serve any purpose.

Employees simply could not perform better without having access to this information.

Permitting employees to review the results of their appraisal allows them to detect any

errors that may have been made. If they disagree with the evaluation, they can even

challenge the same through formal channels.

It follows then that formal procedures should be developed to enable employees who

disagree with appraisal results which are considered to be inaccurate or unfair. They must

have the means for pursuing their grievances and having them addressed objectively.

When management uses it as a whip or fails to understand its limitations, it fails. The key

is not which forms or which method is used. Performance appraisal should be used

primarily to develop employees as valuable resources. Only then it would show

promising results.

42

ELECTRONIC PERFORMANCE MONITORING

“Electronic performance monitoring” refers to the use of technology to monitor the

employee’s performance.

Organizations across the world are incorporating the use of various advanced

technologies for all functions at all levels. Many organizations have incorporated

technologies in the performance appraisal and management processes. The electronic and

computerized systems are being used to monitor and evaluate the performance of the

employees.

The concept of electronic performance management has been the latest trend in

performance surveillance in the foreign countries where almost every job has the

potentials of being monitored electronically. But with the increasing number of MNC’s,

the trend is catching up fast in India.

With the organizations using the latest technologies and soft wares, electronic

performance monitoring supports comprehensive, qualitative, and subjective assessment

of the individual’s performance.

The main reasons for practicing electronic performance monitoring are

It improves productivity and the quality of work

Subjective work evaluation

Compliance with the organizational policies and the local laws

Helps in cost-control in the company

Helps in the security of the company information.

43

Despite all its advantages, the arguments given against the use of electronic performance

monitoring is that such systems interfere in the privacy of the employees and some

employees may take it against their dignity.

Using such system can have both positive and negative effects on the organizational

health. It is argued that, to ensure the positive effects of electronic performance

monitoring:

The employees should be explained and communicated clearly about the system:

The employees’ suggestions should be taken in designing the system

The employees should be involved in the implementation of the system

The organization should not solely rely on the system for the data on employees’

performance.

44

PERFORMANCE AND ITS EFFECTIVENESS

45

PERFORMANCE APPRAISAL METHODS

Performance appraisal methods include 11 methods / types as follows:

1. CRITICAL INCIDENT METHOD

The critical incidents for performance appraisal is a method in which the manager writes

down positive and negative performance behavior of employees throughout the

performance period

2. WEIGHTED CHECKLIST

This method describe a performance appraisal method where rater familiar with the jobs

being evaluated prepared a large list of descriptive statements about effective and

ineffective behavior on jobs

3. PAIRED COMPARISON ANALYSIS

Paired comparison analysis is a good way of weighing up the relative importance of

options.

A range of plausible options is listed. Each option is compared against each of the other

options. The results are tallied and the option with the highest score is the preferred

option.

4. GRAPHIC RATING SCALES

The Rating Scale is a form on which the manager simply checks off the employee’s level

of performance. This is the oldest and most widely method used for performance

appraisal.

46

5. ESSAY EVALUATION

This method asked managers / supervisors to describe strengths and weaknesses of an

employee’s behavior. Essay evaluation is a non-quantitative technique

This method usually use with the graphic rating scale method.

6. BEHAVIORALLY ANCHORED RATING SCALES

This method used to describe a performance rating that focused on specific behaviors or

sets as indicators of effective or ineffective performance.

It is a combination of the rating scale and critical incident techniques of employee

performance evaluation.

7. PERFORMANCE RANKING METHOD

Ranking is a performance appraisal method that is used to evaluate employee

performance from best to worst.

Manager will compare an employee to another employee, rather than comparing each one

to a standard measurement.

8. MANAGEMENT BY OBJECTIVES (MBO)

MBO is a process in which managers / employees set objectives for the employee,

periodically evaluate the performance, and reward according to the result.

MBO focuses attention on what must be accomplished (goals) rather than how it is to be

accomplished (methods)

47

9. 360 DEGREE PERFORMANCE APPRAISAL

360 Degree Feedback is a system or process in which employees receive confidential,

anonymous feedback from the people who work around them.

10.FORCED RANKING (FORCED DISTRIBUTION)

Forced ranking is a method of performance appraisal to rank employee but in order of

forced distribution.

For example, the distribution requested with 10 or 20 percent in the top category, 70 or

80 percent in the middle, and 10 percent in the bottom.

11. BEHAVIORAL OBSERVATION SCALES

Behavioral Observation Scales is frequency rating of critical incidents that worker has

performed.

SAMPLE FORMS OF PERFORMANCE APPRAISAL SYSTEM

Samples / examples of performance appraisal are popular in staff / employee appraisal

with organizations, human resource department, managers.

This information will help us develop effective Performance appraisal.

We can use free sample / example job specifications as follows:

1. Performance appraisal form

This is general form for performance appraisal.

2. Manager performance appraisal form

This form is a performance appraisal sample used for manager position.

48

3. Employee performance appraisal form

This form is a performance appraisal sample used for staff position.

4. Essay evaluation form

This form is based on essay evaluation method of performance appraisal.

5. Forced Choice form

This form is a performance appraisal sample based on forced choice method of

performance appraisal.

6. Weighted checklist form

This form is based on weighted checklist method of performance appraisal.

7. Rating scale form

This form is a performance appraisal sample based on rating scales method of

performance appraisal.

8. Employee self appraisal form

This form is a performance appraisal sample based on appraisal self by employee.

SELF-ASSESSMENT QUESTIONS

1. Describe your job description. For each of the major responsibilities, what were the

expectations and outcomes?

2. What would you have liked to have done this year, but were unable to? Why?

3. What goals have you set for yourself during the next year? What types of projects

would you like to be involved in?

4. What types of developmental activities would you like to take advantage of (e.g.,

seminars, specific training classes, etc.)?

5. What kind of support and/or guidance would you like to see from your supervisor?

49

6. Describe any projects you have been responsible for which are not in your job

description. What results have you achieved?

7. Describe any changes you suggested and/or implemented this year that led to

improvement in your area (e.g., quality of work life, cost savings, efficiency).

8. What action(s) have you taken this year to gain a better understanding of the

organization, your unit/division/department, or your own job?

9. Give examples of departmental collaborative efforts that you were involved in this

year. What contributions did you make to the team?

10. Describe goals and/or developmental steps you set out to accomplish during this past

year. Of those, which did you accomplish?

11. What do you think has been your most important contribution to the department

and/or the organization? What are you most proud of?

1. DEFINITION OF SELF APPRAISAL

Self-appraisal is a method of performance appraisal that is done by employee (appraisee).

2. ADVANTAGES OF SELF APPRAISAL

• By having employees do some sort of self evaluation before the actual review meeting,

the review meetings can be shorter.

• If done properly and tactfully, encouraging employees to self evaluation or self appraise

at any time during the year, including around the actual review meetings, help convey the

message that the process of performance management and appraisal is a team effort, and

not something the manager does to the employee.

• Whey self appraisal is an accepted and integrated part of the performance management

process, it encourages employees to self evaluate throughout the year.

• Self-ratings are particularly useful if the entire cycle of performance management

involves the employee in a self-assessment.

50

• The developmental focus of self-assessment is a key factor.

• Approximately half of the Federal employees in a large survey felt that self-ratings

would contribute “to a great or very great extent” to fair.

• Self-appraisals are particularly valuable in situations where the supervisor cannot

readily observe the work behaviors and task outcomes.

3. DISADVANTAGES OF SELF APPRAISAL

• Research shows low correlations between self-ratings and all other sources of ratings,

particularly supervisor ratings. The self-ratings tend to be consistently higher. This

discrepancy can lead to defensiveness and alienation if supervisors do not use good

feedback skills.

• Sometimes self-ratings can be lower than others’. In such situations, employees tend to

be self-demeaning and may feel intimidated and “put on the spot.”

• Self-ratings should focus on the appraisal of performance elements, not on the summary

level determination. A range of rating sources, including the self assessments, help to

“round out” the information for the summary rating.

RATING ERRORS IN PERFORMANCE APPRAISALS

Performance appraisals are subject to a wide variety of inaccuracies and biases referred to

as 'rating errors'. These errors can seriously affect assessment results. Some of the most

common rating errors are: -

51

Leniency or severity: - Leniency or severity on the part of the rater makes the

assessment subjective. Subjective assessment defeats the very purpose of performance

appraisal. Ratings are lenient for the following reasons:

a)    The rater may feel that anyone under his or her jurisdiction who is rated

unfavorably will reflect poorly on his or her own worthiness.

b)    He/She may feel that a derogatory rating will be revealed to the rate to

detriment the relations between the rater and the ratee.

c)     He/She may rate leniently in order to win promotions for the

subordinates and therefore, indirectly increase his/her hold over him.

Central tendency: - This occurs when employees are incorrectly rated near the average

or middle of the scale. The attitude of the rater is to play safe. This safe playing attitude

stems from certain doubts and anxieties, which the raters have been assessing the rates.

Halo error: - A halo error takes place when one aspect of an individual's performance

influences the evaluation of the entire performance of the individual. The halo error

occurs when an employee who works late constantly might be rated high on productivity

and quality of output as well ax on motivation. Similarly, an attractive or popular

personality might be given a high overall rating. Rating employees separately on each of

the performance measures and encouraging raters to guard against the halo effect are the

two ways to reduce the halo effect.

Rater effect: -This includes favoritism, stereotyping, and hostility. Extensively high or

low score are given only to certain individuals or groups based on the rater's attitude

towards them and not on actual outcomes or behaviors; sex, age, race and friendship

biases are examples of this type of error.

Primacy and Regency effects: - The rater's rating is heavily influenced either by

behavior exhibited by the ratee during his early stage of the review period (primacy) or

by the outcomes, or behavior exhibited by the ratee near the end of the review period

(regency). For example, if a salesperson captures an important contract/sale just before

the completion of the appraisal, the timing of the incident may inflate his or her standing,

52

even though the overall performance of the sales person may not have been encouraging.

One way of guarding against such an error is to ask the rater to consider the composite

performance of the rate and not to be influenced by one incident or an achievement.

Performance dimension order: - Two or more dimensions on a performance instrument

follow each other and both describe or rotate to a similar quality. The rater rates the first

dimensions accurately and then rates the second dimension to the first because of the

proximity. If the dimensions had been arranged in a significantly different order, the

ratings might have been different.

Spillover effect: - This refers lo allowing past performance appraisal rating lo

unjustifiably influence current ratings. Past ratings, good or bad, result in similar rating

for current period although the demonstrated behavior docs not deserve the rating, good

or bad.

Personal Prejudice: If the rater dislikes any employee or any group, he may rate them at

the lower end, which may distort the rating purpose and affect the career of these

employees.

Other factors that are considered as problems are

Failure of the superiors in conducting performance appraisal and post

performance appraisal interview.

Most part of the appraisal is based on subjectivity.

Less reliability and validity of the performance appraisal techniques.

Negative ratings affect interpersonal relations and industrial relations system.

Influence of external environmental factors and uncontrollable internal factors.

Feedback and post appraisal interview may have a setback on production.

Management emphasizes on punishment rather than development of an employee

in performance appraisal.

Some ratings particularly about the potential appraisal are purely based on guess

work.

53

The other problems of performance appraisal reported by various studies are:

* Relationship between appraisal rates and performances after promotions was not

significant.

* Some superiors completed appraisal reports within a few minutes.

* Absence of inter-rater reliability.

* The situation was unpleasant in feedback interview.

* Superiors lack that tact of offering the suggestions constructively to subordinates.

* Supervisors were often confused due to too many objectives of performance appraisal.

54

CHAPTER-3

55

PERFORMANCE APPRAISAL SYSTEM

OF NTPC

Earlier in the NTPC performance appraisal system was used till 2004. In this the

performance of the candidate was appraised by employing the method of grading system

for appraising the performance of the candidate. In this method certain categories of

abilities of performance are defined well in advance and candidates are put in a particular

category depending on their trait and characteristic. The categories are outstanding,

good, average, poor, and very poor or may be in terms of letters like A, B, C, D, E etc

and each letter have its own interpretation depending on a reporting officer using it. The

actual performance of the employee is measured against these grades.

In the grading system 5 grades was awarded that are excellent, good, average, below

average and unsatisfactory. In this most weightage was assigned to the special

achievement to the candidate during his work by the reporting officer at the time of

appraising the performance. Special achievement can be the ability in reducing the

expenses of a particular department, effective handling of the group.

Under grading system the assessed himself assess his performance. The performance

was evaluated by filling up the required information in the performance appraisal report.

The format of the performance appraisal report is as follows –

Name of the candidate

Designation

Area of responsibility

Job accomplishment

56

Obstruction encountered

Comment of the reporting officer is written after discussion with the candidate

Comment of the reporting officer without discussion with the candidate

Overall rating assigned

The appraisal will cover performance during the financial year. The format and the

process of appraisal will be the same for all functions and similar for all levels of

executives. The appraisal form is to be filled by all executives who have served for period

of at least 3 months in the Organization during the financial year.

Periodic Review –

The individual tasks will be set and reviewed on a monthly basis as far as possible.

However, in cases:

Where a large element of work is of unforeseen nature and hence it cannot

be converted into pro- determined monthly targets.

Where there is likelihood of frequent changes in the priorities that are set on

monthly basis.

Where task forces are required to be constituted to meet certain exigencies

at work.

Where an individual's work is largely dependent on the work originating in

other departments.

The record of such tasks with respect to each individual will be maintained daily/weekly

in the format close to prescribed format and in-corporate in the periodic records. The

system will thus take care of both pre-determined and unplanned elements of work.

ANNUAL REVIEW

57

Periodic reports on performance for each employee should be correlated and form the

basis for arriving at the annual assessment. The manner in which the monthly/periodic

reports are translated into an annual assessment will be based on the relative priorities of

tasks/performance norms assigned and fulfilled and extent to which constraints were

overcome.

In the annual report there is a provision for self-evaluation by the appraisee. This is

in view of the fact:

Jobs at executive level have to be seen in totality rather than a sum total of

tasks, targets or norms and the appraisee just a chance to review his

performance and express his viewpoints.

There are areas of discretion open to an executive, but not incorporated

formally into objectives such as spontaneously creative activities, which an

innovative executive might choose to do.

Annual appraisal in addition provides for assessment of certain attributes and abilities by

the appraiser on a three-point scale. Assessment of attributes provides a common

standard for comparison between employees (engaged in a vast variety of jobs). Both the

subjective and objective elements of a job are thus considered for assessment.

In the review discussions preceding the annual assessment the following may be

discussed between the reporting officer and the person assessed.

- Extent of achievement

- Reasons for shortfall

- Measures to avoid future setback in target achievement.

- Future action plan.

The extent, of achievement should be communicated to the appraise with respect to the

evaluation on periodic targets, and evaluation of executive abilities and attributes.

Drawbac

k Of the Grading System -

1. Grades were completely unknown to the candidate being appraised.

58

2. The result of the employee performance was also not known.

3. Promotion was the only reward, which was granted to the employee, and also it

was given after 3 years.

4. An element of dissatisfaction was present, as the reward for the performance was

seems to be not sufficient.

CHAPTER-4

59

“Research is the systematic and objective search for the analysis of information relevant to the identification and solution of the specific problem. Research is science and a systematic search for pertinent information on a particular topic.”In fact research is an act of scientific investigation.

OBJECTIVE OF STUDY:

1)To know the awareness of performance appraisal system among employees at NTPC,Anta 2) To get feedback from employees regarding performance appraisal system adopted by NTPC, Anta

RESEARCH DESIGN

A researcher design is the overall plan or programme of research. It is the general blue print for the collection, measurement and analysis of data. It includes an outline what an investigator can do from writing the hypothesis and their operational implication to the final analysis of data. Various uses of having a research design are as follows –

1. It provides answers to various questions such as: What is the object of research? What data are needed and how will these be gathered? What will be the time, place and sample of study? How will the data be analyzed and interpreted?

2. It acts as a standard and guidepost, which helps the researcher in measuring his/her shortcoming and deviation in actual research later on.

3. It forestalls the possibility of a fruitless enquiry and act as an insurance against future failure.

SOURCES OF DATA

60

PRIMARY DATA SOURCE: - Primary data source comprises responses to questionnaire and interviews conducted with manager, supervisor of all department of the company.

SECONDARY DATA SOURCE : - Secondary data source is the one that makes available data that are collected by some other agency earlier. It comprises different books on the human resource.

PREPARATION OF QUESTIONNAIRE –

Much labor and care was taken in designing the questionnaire to maintain the brevity and accuracy. The rule is to gather the data you need but not more than is needed, therefore the number of questions was not more. The questions were such that which evoked accurate and desired responses – which contained the information sought.

The questionnaire was in a structured format in which the questions were asked from the respondents were very precise and concisely stated in advance, thus maximizing standardization.

Question provided the subject with the multiple-choice response with four rating. In order to design a good questionnaire all relevant books on the subject were consulted. All the available articles and research work were taken into account. Exploratory discussion with my guide, who had intimate knowledge of the subject, helped me never lose sight of the hypothesis to be tested. Care was taken to relate all questions intimately to the final objective of the investigation.

(a) Universe: Grade E1 to E7 employees

It is defined in terms of elements, unit, extent and time. The demographic profile of the respondents was a below:Men or women employed in NTPC – PMI starting from grade E1 to E7 must have a knowledge about PMS (performance management system) and their performance is evaluated according to that PMS only. Nature of population was homogeneous therefore a small sample was effective to represent it.

(b)Sample Size: - 50 employees

(c) Sampling method: purposive sampling Non random (non probabilistic) samples In which the probability of unit selection is unknown at any stage of the selection process and the selection of unit is based on the judgment of the researcher was selected.

61

The method used was purposive sampling. These term means selection by design – by choice and not by chance. The sample was chosen which was thought to be typical of the universe with regard to the characteristic under investigation.Such type of sampling was possible because of my guide who already had the necessary required knowledge about the employees that made it easier to recognize typical items in the universe.

(d) Type of research: Exploratory Research

LIMITATION OF STUDY

There are possibilities of the information being biased. Bias can be both deliberate and non-deliberate. Non-deliberate bias crept in the form of approximation when respondent were asked to supply information on some past event which they do not exactly remember. Use of standardized response formats in many questions forced respondents to subscribe to statements to which they do not fully endorse.

1 REASON FOR SELECTING PURPOSIVE SAMPLING AS THE SAMPLING METHODIt is very simple to draw and involve less fieldwork since those units can be selected which possess the required knowledge on the topic of the investigation.

2 It is not always reliable. The human mind was difficult in recognizing typical items. This difficulty tends to distort purposive sampling. The Problem was faced as one does not have the considerable knowledge about the population and this problem gets solved with the help of my guide.

62

CHAPTER-5

63

DATA ANALYSIS AND INTERPRETATION

1) Awareness regarding performance appraisal system in organization?

Option Frequency %Yes 40 80%No 10 20%

64

AWARENESS ABOUT PERFORMANCE APPRAISAL

YES80%

NO20%

Interpretation

According to the data 80% employees are totally aware of the performance appraisal system.

2) In your opinion what is the degree of transparency in the appraisal system?

Option Frequency %Low 20 40%Moderate 20 40%High 10 10%

65

Interpretation

40% employee said that there was low transparency,while 40% said moderate while 10% said high transparency in Appraisal system.

3) Satisfaction with present appraisal system?

Option Frequency %Yes 35 70%No 5 10%No comment 10 20%

66

Interpretation

In NTPC, 70% employees are satisfied by present appraisal system used, i.e. Performance Management System,while 10% said no and 20% said no comment on this matter.

4) Do you get any motivation by the appraisal?

Option Frequency %Yes 40 80%No 5 10%No comment 5 10%

67

Interpretation

On basis of above data 80% employees are highly motivated by present appraisal system, while 5% said not and 5% said no comment on this matter.

5) Appraisal should be done:

Option Frequency %Annually 20 40%Half-yearly 30 60%

68

Interpretation

60% employees say that performance appraisal should be done half- yearly. While

40% said that it should be Annually.

6) Different departments should have different appraisal system?

Option Frequency %Yes 25 50%No 15 30%No comment 10 20%

69

Interpretation

According to above data 50% employees say that different department should have

different appraisal form, while 30% no and 20% not comment on this topic.

7) Clarity in the appraisal system?

Option Frequency %No 20 40%Yes 30 60%

70

Interpretation

60% employees say that there is clarity in the performance appraisal system, while 40% said that there is no clarity in the performance appraisal system.

8) Job profile very well?

Option Frequency %Yes 45 90%No 5 10%

71

Interpretation

Most of the employee said that they know their job while 10% said that they does not know about the job.

9) Talk freely with boss about performance appraisal ?

Option Frequency %Yes 30 60%No 10 20%No comment 10 20%

72

Interpretation

60% employee talk freely about performance appraisal with their boss,10% do not talk freely to them boss regarding performance appraisal system.

10) Counseiling method used after completion performance appraisal?

Option Frequency %Yes 40 80%No 10 20%

73

Interpretation

80% employee says counseling method should be used after completion of the

performance appraisal, while 20% said it should not be used.

11) Need of training to the appraiser?

Option Frequency %Yes 35 70%No 15 30%

74

Interpretation

According to the 70% of employees there is a need of training to the appraiser, while 30% said that, there is no need of training to the appraiser.

12) Satisfaction with monetary linkage of the system?

Option Frequency %Yes 30 60%No 20 40%

75

Interpretation

60% employees are satisfied with monetary linkage of the appraisal system, while 40% employees are not satisfied.

CHAPTER-6

76

Conclusions

1 Most of the employee have awareness regarding performance appraisal system adopted at NTPC Anta.

2 Most of the employees have agreed that transparency is maintained in performance appraisal at NTPC , Anta.

3 Most of the employees are satisfied with the performance appraisal system.

77

4 Most of the employees agreed that performance appraisal system helps in motivating them.

5 Most of the employees prefer half annual performance appraisal system.

6 Majorly of employees want different PMS for different department.

7 Most of the employees agreed regarding the clarity in PMS.

8 Most of the employees have clarity regarding their job profile.

9 Employees at NTPC feel free to talk with their boos regarding performance appraisal system.

10 Most of the employee demanded councelling after performance appraisal.

11 Most of the employee want training of appraiser before appraising the employees.

12 Most of the employees are satisfied with monetary linkage with appraisal system.

78

CHAPTER-7

79

SUGGESTIONS

Earlier in NTPC the method employed to appraise the performance of employees was grading system but now marking system has been implemented in the PMS (performance management system). That is why we conducted a survey through the means of filling the questionnaire by the employee to identify to what extent it is effective and after analyzing the viewpoint and feedback of the employees we found it to be effective. Though there are certain shortcomings in the system that can be overcome to some extent by making certain changes in it.

So few of my suggestion are as follows – Presently in the PMS the performance of the candidate is evaluated annually as a

result employees are not highly satisfied with it so the evaluation can be conducted half yearly so that employees can get to know the area in which they are lacking so that get the training at the correct time and also get to know their productivity and efficiency as a result their performance improve at a faster rate.

The PMS should provide sufficient scope to the employee for accomplishment of their group objective along with their individual objective by evaluating their performance in a group because achievement of group objective is also important.

The annual way of filling the form or performance report in the current PMS should be replaced by online way of filling the form as it has few inherent advantages such as less time consuming, efficient and effective way of utilizing resources like human being, stationary, less paper pilling etc.

The competencies identified by the reporter which correlates with the work should be set after detailed analysis of the work and in consultation with the employee and there should be frequent evaluation and regular discussion with the employee to identify any flaws in the competencies and thereby make the suitable changes.

In the PMS potential of the candidate identified should correlates with the work requirement and in order to accomplish it the work should be assigned to the individual by identifying his potential, interest area so that there is not much wide gap between the potential possessed and requirement of the work and as a result of the correlation the performance of the candidate improves, moral level will be high and he will be satisfied with the work which is beneficial for the organization for accomplishment of its overall objective.

80

BIBLIOGRAPHY

BOOKS –

“Personnel Management” by C.B Mamoria and S.V. Gannker.

“Personnel Management” by Edwin Flippo.

“Appraising and Developing Managerial Performance” by T.V. Rao.

“Human Resource Management” by L.M Prasad.

“Management of Performance Appraisal” by M.L Monga.

“Performance Appraisal” by Martin Fisher.

“Human Resource Management” by V.S.P. Rao.

JOURNALS AND MAGAZINES -

NTPC Weekly News Bulletin

REFERENCES-

www.citehr.com

www.pmintpc.com

http://en.wikipedia.org/wiki/Performance_appraisal

www.businessballs.com

http://www.performance-appraisal.com/intro.htm

http://www.performancemanagementguide.com/

www.openlearningworld.com

81

QuestionnaireName ……………………………..Age ……………………………..Contact No. .…………………………….Occupation ...…………………………...

Q1. Awareness regarding performance appraisal system in organization ?

A) Yes B) No

Q2. In your opinion what is the degree of transparency in the appraisal System ?

A) Low B) Moderate C) High

Q3. Satisfaction with present appraisal system ?

A) Yes B) No C) No comment

Q4. Do you get any motivation by the appraisal?

A) Yes B) No C) No comment

Q5. Appraisal should be done ?

A) Annually B) Half-yearly

82

Q6.Different departments should have different appraisal system?

A) Yes B) No C) No comment

Q7.Clarity in the appraisal system?

A) Yes B) No

Q8. Job profile very well?

A) Yes B) No

Q9.Talk freely with boss about performance appraisal ?

A) Yes B) No C) No comment

Q10. Counseling method used after completion performance appraisal ?

A) Yes B) No

Q11. Need of training to the appraiser?

A) Yes B) No

Q12. Satisfaction with monetary linkage of the system ?

A) Yes B) No

83

84