1. Summer Training Project Report
ON
EFFECTIVENESS OF PERFORMANCE
MANAGEMENT SYSTEM OF NTPC
Submitted in Partial fulfillment of requirement of award of MBA degree of
GGSIPU, New Delhi
Submitted By
Nidhi Aggarwal
04715603911
Third semester
2011 Batch
Northern India Engineering College
(Affiliated to GGSIPU)
FC-26, Shastri Park, Delhi-110053

2. Acknowledgement
To accomplish a project work like this efforts of many people are required and
ours is not an exception, a number of people have helped us. First of all we would
like to thank Sri S.R Sahoo (manager-HR (RECIT),Mr Chandramauli(Senior
manager-HR-Wages). I convey our special thanks to Miss Pratibha(Sr.
Manager-HR(wages)) for her guidance during the course of our project study and
all those persons who helped us in getting grass root information about NTPC and
the performance management system working there, from whom we received
valuable co-operation, useful suggestions and relevant data and information
pertaining to our project and responses to questionnaire. We are thankful to all of
our friends who have been a source of motivation to us.
At last but not least we convey our heartily gratitude to our MBA H.O.D Mr
D.K Gupta and all the faculty members of MBA program, N.I.E.C for their
constant guidance and help. Finally we thank God who blessed us in our endeavor.
Nidhi Aggarwal
MBA-HR (20011-2013)
MBA program, N.I.E.C Shastri Park

3. INDEX
S.NO TOPIC PAGE NO. SIGNATURE
1. Acknowledgement
2. Index
3. Objectives of the study
4. Introduction to the company/ topic
5. Literature Review
6. Research Methodology
7. Data Analysis
8. Findings & Conclusion
9. Recommendations
10. References
11. Annexure

4. OBJECTIVES OF STUDY
To identify factors in business dynamics to grade employees on the
objectives & transparent productivity parameters.
To study about the system of self appraisal, appraisal by reporting officer, by
reviewing officer and final assessment by moderation committee.
To study about create a direct link between rewards & performance to
increase the motivation level of employees.
To study about assessment of training & developmental needs of individual
employees.
To study and make employees completely aware about the parameters used
for evaluation of their performance.

5. INTRODUCTION
TO
NTPC

6. INTRODUCTION TO NTPC
NTPC: India’s largest power company
Established on 7th November 1975 to play a major role in the development of
Indian Power Sector: NTPC Limited is today India’s largest power company with
an installed capacity of 31,704 MW Lighting up more than one fourth of India
through its 15 coal based 7 gas based and 5 joint venture projects, NTPC Limited
plans to become a 75,000 MW Company by the year 2017 with a vision to
become a world class integrated power major with increasing global presence.
NTPC Ranked No. 1 Independent Power Producer in Asia and 2nd in the world in
the Platts Top 250 Global Energy Company list for 2009. Ranked number ONE in
the category the 'Best Workplaces for Large Organizations' and number tenth
overall for the year 2009 by Great Places to Work Institute’s India chapter in
collaboration with Economic Times.

7. NTPC: At a Glance
Category No. of stations Capacity (MW)
Coal based station 15 24,885
Gas based station 7 3,955
Joint venture 5 2,864
Total 31,704
Details of power Stations(NTPC)
Project State Capacity(MW)
a. Coal Based
Singrauli Uttar Pradesh 2000
Korba Chhattisgarh 2100
Ramagundam Andhra Pradesh 2600
Farakka West Bengal 1600
Vindhyachal Madhya Pradesh 3260
Rihand Uttar Pradesh 2000
Kahalgaon Bihar 2340
Dadri Uttar Pradesh 1330
Talchar Kaniha Orissa 3000
Unchahar Uttar Pradesh 1050
Talchar Thermal Orissa 460
Tanda Uttar Pradesh 440
Simhadri Andhra Pradesh 1000
Badarpur Delhi 705
Sipat-II Chhattisgarh 1000
Total 24885

8. b. Gas Based
Anta Rajsthan 413
Auraiya Uttar Pradesh 652
Kawas Gujrat 645
Dadri Uttar Pradesh 817
Jhanor Gujrat 648
Rajeev Gandhi(Kayamkula) Kerela 350
Faridabad Haryana 430
Total 3955
c. Joint Venture
Roukela Orissa 120
Durgapur West Bengal 120
Bhilai Chhattisgarh 574
Ratnagiri Maharashtra 1940
Kanti Bihar 110
Total 2864
Total Production(a+b+c) 31704

9. Subsidiary companies of NTPC
NTPC – Joint Ventures (15)
NTPC – Joint Ventures (15)
GENERATION SERVICES POWER EQUIPMENT COAL
ARAVALI POWER TRADING MANUFACTRUI ACQUISITION
COMPNAY PVT LTD UTILITY G
PTC INDIA INTERNATIONAL
50% POWERTECH LTD LTD NTPC BHEL COAL VENTURES
50% 5.28% POWER PROJECTS LTD
NTPC TAMIL NADU
PVT LTD 14.28%
ENERGY COMPNAY LTD NTPC ALSTOM NATIONAL
POWER SERVICES 50%
50% POWER NTPC SCCL
PVT LTD EXCHNAGE BF NTPC ENERGY GLOBAL
NABINAGAR POWER
50% LTD SYSTEMS LTD VENTURES PVT
GENERATING
16.67% 49% LTD
COMPNAY LTD NATIONAL HIGH
POWER TEST 50%
50%
LABORATORY PVT
MEJA URJA NIGAM LTD
LTD
50%
25%
NTPC SAIL POWER
COMPNAY PVT LTD
50%
RATNAGIRI GAS AND
POWER PVT LTD
29.65%

10. Electrifying performance
The company recorded a total generation of 218.84 Billion Units (Bus) showing
an increase of 6% over the pervious year’s generation of 206.93 Bus with a share
of 20% (Ines of JV company) in the total installed capacity of the country NTPC
generated 28.6% electricity during 09-10. Exceeded the MoU ‘Excellent’ target of
217 BUs.
Vision
“A world class integrated power major, powering India’s Growth, with
increasing global presence.”
Core Values
Business ethics
Customer focus
Organizational & Professional Pride
Mutual Respect and Trust
Initiative and speed
Total Quality for Excellence

11. FINANCIAL FACTS >>>
100% realization of the billing for the seventh consecutive year.
Provisional and un-audited Net Sales of Rs. 46,504.47 crore during 2009-
10 as against Rs. 41,791.30 crore registering an increase of 11.28%. The
provisional and un-audited Gross Revenue is Rs.49,478.86 crore during
2009-10 as against Rs.45,272.76 crore for the year 2008-09, an increase of
9.29%.
Provisional and un-audited Profit after tax for the year 2009-10 is
Rs.8,656.53 crore as compared to Rs.8,201.30 crore during the year 2008-
09, an increase of 5.55%.
Highest interim dividend @ 30% amounting to Rs. 2,473.64 crore paid
during the year.
Capital Expenditure of Rs. 10,137.18 crore during 2009-10; NTPC Group’s
capital expenditure was Rs. 14,002.11 crore.
Approved outlay for 2010-11 for NTPC’s capital schemes is Rs.22,350
crore; for NTPC Group the outlay is around Rs.29,104.06 crore.
Contributed Rs.3,260.21 crore to exchequer on account of Corporate tax,
Dividend and tax thereon and wealth tax.
Shareholder Wealth
Third largest market capitalization of over Rs.1,70,000 crore as on 31-03-2010.
Growing Stature
Recommended for “Maharatna” status.
EXCELLENT rating under Government of India MoU for the year 2008-09.
Bulk Tendering

12. Tendering undertaken for 11 units of 660 MW (including 2 units for DVC).
Rural Electrification
Under Rajiv Gandhi Grameen Vidyutikaran Yojana, NTPC Electric Supply
Company Ltd (NESCL) completed electrification of 8017 villages and provided
8.65 Lakhs BPL connections, thereby exceeding GoI target of electrification of
7500 villages and 8.5 Lakhs BPL connections.
Commonwealth Games
Official Power Partner of Delhi 2010 Commonwealth Games.
Further Public Offer

13. Government shareholding in NTPC reduced from 89.5% to 84.5% through
divestment of Government stake by 5% under Further Public Offer (FPO).
Accolades
Top six out of eight National Awards for Meritorious Performance of
Thermal Power Stations for 2008-09 instituted by the Government of
India won by NTPC coal stations.
Simhadri 1000 MW Gold Shield
Korba 2100 MW Silver Shield

14. Ramagundam 2600 MW Silver Shield
Dadri (coal) 840 MW Bronze Shield
Rihand 2000 MW Bronze Shield
Vindhyachal 3260 MW Bronze Shield
No. 1 Independent Power Producer in Asia and 2nd globally in the Platts
Top 250 Global Energy Company Rankings 2009
THE GROWTH STORY >>>
Installed capacity reaches 31,704 MW (including 2864 MW under JVs).
All time highest single day generation of 684.55 MUs from all NTPC
stations on 31st March, 2010
17,830 MW under construction at 17 locations. .
Project (Fuel) , State Capacity
Sipat-I (Coal), Chhattisgarh 1980
Barh –I (Coal), Bihar 1980
Korba-III (Coal), Chhattisgarh 500
Dadri-II (Coal)-Unit # 2, U.P. 490
Farakka-III (Coal), West Bengal 500

15. Simhadri-II (Coal), Andhra Pradesh 1000
Indira Gandhi STPP - JV With HPGCL & IPGCL (Coal), 1500
Haryana
Vallur (Phase -I & Phase –II) (Coal) - JV With TNEB, 1500
Tamil Nadu
Nabinagar-JV With Railways (Coal), Bihar 1000
Bongaigaon (Coal), Assam 750
Mauda-I (Coal), Maharashtra 1000
Barh-II (Coal), Bihar 1320
Rihand-III (Coal), UP 1000
Vindhyachal-IV (Coal), MP 1000
Muzaffarpur-II (Coal), JV With BSEB, Bihar 390
Koldam (Hydro), H.P 800
Loharinag Pala ( Hydro ), Uttaranchal* 600
Tapovan Vishnugad ( Hydro ), Uttaranchal 520
Total 17,830 MW
Capacity Addition in 2009-2010 (1560 MW)
Project/ Unit Capacity (MW)
NTPC owned
Kahalgaon Stage-II 500

16. Dadri Stage-II, Unit # 5 490
Under JVs
RGPPL Block- I 640
Less on account of overall de-rating of RGPPL (-)180
Kanti Stage-I 110*
Net addition 1560
Planned Capacity Addition in 2010-2011 (4150 MW)
Project/ Unit Capacity (MW)
Sipat Stage-I, Unit-1 660
Jhajjar, Unit-1 & 2 1000
Korba Stage –III, Unit-7 500
NCTPP Stage – II, Unit-6 490
Simhadri, Stage-II, Unit-3 & 4 1000
Farakka, Stage-III, Unit-6 500
Total 4150
Future Capacity Under Different Stages
Projects for which bids invited 7092 MW
Projects for which FR approved 4345 MW
Projects for which FR prepared/under preparation ~15,000 MW

17. Growth in Commercial Capacity
1490 MW declared commercial (including 500 MW under JV).
New national benchmark: Dadri Unit-5 (490 MW) begins commercial
operation in 39 months from zero date.
Generation
Impressive Growth Rate
Generation increased by nearly 6% to 218.84 BUs compared to 3% generation
growth achieved in 2008-09; Exceeded the MoU ‘Excellent’ target of 217 BUs.
Generation (BUs)
218.84
206.93
200.86
188.67
170.88
2005-06 2006-07 2007-08 2008-09 2009-10
Sustaining Market Leadership
Contributed 28.6% of total electricity generated in the country
Total electricity available in the country 771.17 BUs

18. Electricity import from Bhutan 5.34 BUs
Total Electricity Generation in the Country 765.83 BUs
Total Generation from NTPC Units 218.84 BUs
NTPC share in total electricity generation in the country 28.6%
World Class Capacity Utilization
With 90.81% Plant Load Factor (PLF) during 2009-10 (National PLF
77.48%), coal stations achieved PLF of more than 90% for third
consecutive year.

19. Six coal stations achieved PLF of more than 95%.
Dadri (Coal) Stage I (4X210 MW) achieved highest ever PLF of 100.59 %.
Sixteen units recorded more than 100% PLF.
Seven NTPC coal stations figure among the top 10 stations in the country
in terms of PLF.
Highest ever PLF of gas stations at 78.38% (previous year PLF 67.01%).
Augmenting Fuel Security
Model Coal Supply Agreement signed with Coal India Ltd (CIL) for supply
of coal to NTPC stations for 20 years.
Gas supplies increase to 13.88 MMSCMD (up 29% over previous year).
Long term contract for supply of RLNG of 2.0 MMSCMD on firm basis and
0.5 MMSCMD on fallback basis signed with GAIL for 10 years.

20. Under NELP VIII, NTPC has been allotted one block at Cambay basin as a
sole operator and three blocks as a member of consortiums.
Coal Mine Development
Working on captive coal mines with target of 47 MTPA by 2017 from the 6
blocks allotted.
More than 6735 acres of Land in Pakri Barwadih and about 1594 acres of land
in Chatti Bariatu coal block have been acquired and land acquisition for
Dulanga and Talaipalli are in progress.
Rehabilitation Action Plan (RAP) has been approved by NTPC Board for Pakri
Barwadih, Chatti Bariatu and Kerandari.
Mining Plan approved for Dulanga (7 MTPA) and Talaipalli (18 MTPA).
JV agreement has been signed with CIL for development, operation and
maintenance of Coal Blocks and Integrated Power Projects.
Coal Block Acquisition Abroad
Due diligence for acquisition of stakes in two coal mines in Indonesia is
under progress and consultant appointed for carrying out due diligence
for one coal block in Mozambique.

21. International Coal Ventures Ltd (ICVL) has been incorporated on
20.05.2009 as a JV company of NTPC, RINL, SAIL, NMDC and CIL for
sourcing coking and thermal coal from overseas countries like Australia,
Mozambique, Canada, Indonesia and USA. ICVL is pursuing 3 thermal coal
opportunities in Indonesia, Australia and South Africa.
Getting into Nuclear
JV agreement is expected to be signed shortly with Nuclear Power Corporation
of India Limited (NPCIL). Approval has been obtained from Department of
Atomic Energy (DAE).
Focus on Renewables
By 2017, NTPC plans to have at least 1000 MW through renewable energy
resources such as wind, hydro, solar, biomass and geo-thermal.
Long Term Corporate Plan upto 2032
Finalizing the Long Term Corporate Plan of NTPC to set the goals and directions
for a period of 2032 with a view to positioning NTPC as the world’s largest and
best power producer.

22. Technology Roadmap upto 2032
Chalking out a long term technology roadmap upto 2032 which involves
development, adoption and promotion of safe, efficient and clean technologies
for entire value chain of power generation business.
ENVIRONMENT MANAGEMENT
NTPC has adopted advanced and high efficiency technologies such as
super critical boilers for the up-coming greenfield projects (e.g Barh,
Sipat etc). Out of total coal based capacities to be developed during 12th
plan period, over 90% will be based on supercritical technologies.
In addition to adopting advanced and high efficiency technologies, NTPC
has been pursuing the objective of sustainable power development with
following initiatives:
CO2 measurement systems are being installed at all our stations in
the chimney stacks.
61 Ambient Air Quality Monitoring System (AAQMS) installed in all
NTPC stations.
Installed Bio–methanation Plant at Faridabad.
Creation of green wealth of more than 18.80 million trees.

23. ASH UTILISATION
Achieved ash utilization of 59.73% i.e. 27.61 million tons of ash.

24. 10.85 million tons fly ash issued to cement and concrete industry which is
8.5 % more than last year.
545 million ash bricks have been manufactured in Pilot ash brick
manufacturing plants.
1.13 million tons of ash from Talcher-Thermal has been utilized for filling
of abandoned South Balanda coal mine of MCL in Orissa.
MoU has been signed with Research Designs & Standards Organization
(RDSO), Lucknow to explore use of ash in Railway embankment.

25. HUMAN RESOURCE MANAGEMENT
HR Vision:
To enable our people to be a family of committed world class professionals, making
NTPC a learning organization.
The HR Dept. has a long history in NTPC. This dept. was earlier known as
personnel dept. then finally HRS(Human Resource Services)
HRS contributes its expertise in handling and executing the
Existing and Developing HR trends and innovations. Following are the areas of
operation. :-
Employee Welfare
Employee Benefits
Employee Relations (Industrial Relations)
Employee Services (Office Admin.)And Pensions
Employee Services (Town Admin.)
Training and Development (EDC)
Performance Management System and Human Resource Development
Corporate Social Responsibility
Rajbhasha (Hindi)
Law
Peoplesoft – HRMS (ERP Software)
Public Relations

26. The HR strategy of NTPC has been designed around the four building
blocks of competence building, commitment building, culture building and
system building. Culture building is done by creating transparency,
openness and ease of communication, strengthening mutual respect and
trust, leading to establishment of a people oriented and people sensitive
organization. This has resulted in recognition of NTPC as one of the best
employers in the country as well as obtaining consistently high rankings
in surveys such as “Great place to work” and “Best companies to work for”.
Employee Development Centers (EDC) have been set up to cater to the
need of appropriate Training and Development of employees.
Leadership Assessment and Development System (LEADS): With a view to
developing a pipeline of leaders for key leadership positions in the
company, an initiative named LEADS has been launched. A Leadership
Development Centre (LDC) at corporate centre has been set up to
formulate the process of identifying and grooming potential leaders.
High Productivity of Team-NTPC: During 2009-10, sales per employee
increased from Rs. 1.77 crore to Rs.1.96 crore, profit per employee
increased from Rs. 34.7 lakh to Rs. 36.45 lakh, value added per employee
increased from Rs. 59.36 lakh to Rs. 72.96 lakh and the man:MW ratio
improved from 0.85 to 0.82.
Total employee strength is 24,955 as on 31.03.2010, as against 24,713 on
31.03.2009 (including employees in JVs & Subsidiaries).

27. LITRATURE REVIEW
What Performance Management Is Not?
it’s not just an annual performance appraisal
it’s not imposing targets/goals on an employee by his supervisor
it’s not only evaluating individual job performance
What is Performance Management:
it’s Management By Objectives (MBO)
it’s about setting SMARTER goals
it’s about planning to perform
it’s about periodically reviewing progress in performance
it’s about evaluating performance for further improvement
it’s about delivering reinforcement for performance success and
performance failure

28. BENEFITS OF PERFORMANCE APPRAISAL
EMPLOYER’S PERSPECTIVE
1. Despite imperfect measurement techniques, individual differences in
performance can make a difference to the company’s performance.
2. Documentation of performance appraisal and feedback may be needed for legal
defense.
3. Performance appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
4. It provides a rational basis for constructing a bonus or merit system.
5. Providing feedback is a part of the performance management process.
6. Despite traditional focus on the individual, appraisal criteria can include
teamwork and teams can be the focus of teamwork.
EMPLOYEE’S PERSPECTIVE
1. Performance feedback is needed and desired by the individual employee to
improve his/her performance.
2. Fairness requires that differences in performance levels across workers be
measured and have an effect on the outcomes.

29. 3. Assessment and recognition of performance levels can motivate workers to
improve their performance.
PROBLEMS AFFECTING THE VALIDITY OF
PERFORMANCE APPRAISAL SYSTEM
1. HALO EFFECT
This type of error occurs when the rater allows one aspect of a man’s character or
performance to influence his entire evaluation.
2. CENTRAL TENDENCY
This error occurs when the rater is in doubt about the subordinates or has
inadequate information about them or is giving less attention and effort to the
rating process.
3. LENIENCY ERROR
Some supervisors have a tendency to be easy raters. Lenient raters consistently
assign high values to their subordinates. This type of error results in wrong
evaluation of the performance of subordinate.

30. 4. STRICTNESS ERROR
Some other types of supervisors have a tendency to be harsh in their ratings. They
continuously give low ratings to their subordinates.
5. RECENCY EFFECT
Often some raters evaluate persons on the basis of their performance in recent few
weeks, average constant behaviour is not checked.

31. Performance
Management
System
At
NTPC

32. PMS AT NTPC
PMS is a five step process:-
Step 1 Step 2
Performance Mid – year
planning Review
PMS Process
Step 3
Feedback
Annual
Step 5 Assessment
Normalisation
Process
Step 4

33. 1. Performance Planning
Performance Planning is the process of:
Defining expectations i.e. the work to be done, the results/targets to be
achieved and skills/competencies needed to achieve these objectives
Setting “Measures” and “Targets”, determining priorities and weightages
of results to be achieved
Identifying and allocating appropriate resources (such as manpower, tools,
training, budget etc.) to enable the executive to achieve the targets While
defining work objectives and measures, it is necessary to ensure that:
Goals/ Targets/ Objectives are SMART (Specific, Measurable, Agreed,
Realistic and Time bound)
Results are substantially within the executive’s control
Measures relate to results
Data is available for measurement
Agreement on mutually agreeable and achievable performance targets is
arrived at after sufficient discussion between reporting officer and executive
has take
2. Mid Year Review
Performance management is not an event but an ongoing process. Mid year
reviews help in the following ways:
Reinforcing good performance in time
Updating the status of targets i.e. progress review
Identifying areas for “mid-course” correction
(37)
Revisiting KPAs and goals, if necessary
Assessing resource and skill requirements affecting the individual’s
performance
Discussion and feedback on functional competencies, managerial
competencies,
potential competencies and core values actualization
Providing early warnings of non-performance, i.e. avoiding year end
surprises

34. 3. Annual Assessment
The objectives of Annual Assessment are to:
Discuss and arrive at an assessment of performance with respect to agreed
targets
Assess the competencies, potential and core values actualization by the
individual
Agree upon improvement plans and development needs for the individual
.
4 Normalization
The objectives of the Normalization System in PMS are to:
Ensure parity and integrity by minimizing variation in rating by different reporting
officers across various departments and locations Enhance objectivity and
transparency in the appraisal system To view individual performance from the
perspective of organizational achievement.
5 Feedback, Coaching and Counselling
In order to make PMS an open system and to enhance development orientation
across the organization; feedback, coaching and counselling are essential
components. Communicating the final performance results of the executive and
providing developmental feedback are critical to this process.
5.1 Feedback
Providing feedback on performance presents the following benefits:
Creates transparency making PMS more acceptable to individuals
Reinforces good performance on time
Enables development of coaching and mentoring relationship between
reporting officer and executive
Ensures that organizational objectives are achieved to an acceptable standard
and in an acceptable form
Providing performance feedback is a delicate matter and the reporting officer
should create suitable conditions for providing performance feedback in the most
effective manner. (Refer to appendix for tips to reporting officers on conducting
effective appraisal meetings.) In general:

35. Feedback should be focused on the specific performance actions and not on
the personality of the executive
Feedback should be generated after reviewing all achievements and issues
throughout the assessment period and not focused on isolated incidents
Feedback calls for maintaining a log of critical incidents occurring during
the assessment period for recording both achievements and failures with
details, as an aid to memory during performance discussions with the
executive
Feedback be given as regularly as possible so that enough opportunities are
created for executive to bridge performance gaps through self-development
5.2 Coaching and Counselling
Coaching is an on-the-job approach to help individuals to develop and raise their
skills and levels of competence. Coaching typically consists of:
Making executives aware of how well they are performing and their present
level of knowledge and skill
Providing guidance to individuals to enable them to complete their work
satisfactorily
Motivating individuals to learn new skills and develop themselves
(39)
Facilitating individuals to raise their level of contribution and achievement.
Counselling in the PMS context essentially is a process by which executives can
receive assistance in sorting out issues and related to current and future
responsibilities and aspirations. Therefore, reporting officers are required to
encourage individuals to plan for their own self-development. The process of
counselling is through:
Recognition and understanding of existing strengths
Empowering, i.e. enabling the individual to recognize their own problems
and expressing the same.
Facilitating action through guidance and expertise, i.e. facilitating the
process whereby the individual evaluates alternatives and formulates action
plans to achieve the most suitable course of action
Helping individuals to take ownership of the outcomes of their chosen
action.
Coaching and counselling together act as a feedback mechanism for the individual
on his/her performance. It is often used by reviewer/reporting officer to
communicate the areas for development and improvement to the executive.

36. KPA Setting Process:
Corporate Company Goals
plan MOUs
Initiatives Unit Goals
Functional
/Departmental Goals
Special
Individual Goals
task
PMS COMPRISES ASSESSMENT ON FOUR PARAMETERS WITH DIFFERENT
WEIGHTAGES FOR VARIOUS LEVELS
S.NO. PMS PARAMETER WEIGHTAGES FOR DIFFERENT GRADES
E1-E3 E4 E5 E6-E7 E7A-E8 E9
1 KPA 80 75 65 60 50 50
2 a. Functional 10 10 10 10 10 05
competency
assessment
b. Managerial 05 05 10 10 15 15
competency
assessment
3 Potential Nil 05 10 10 10 10
assessment
4 Value assessment 05 05 05 10 15 20

37. Total 100 100 100 100 100 100
For junior executives there is higher weightage on KPAs and functional
competencies as there is higher focus on achieving the immediate
functional task.
The weightage on Managerial competencies and values increases for an
executive as the grade increases because of importance of achieving
business goals by managing work of other employees through ethical
means.
At NTPC Online Performance Management System is being practiced for
Executives. For Non Executives it is still manual.
Thre are three major challenges in effective implementation of PMS at
NTPC
1. Involvement of big number of executives (approx 1200) in designing
of KPAs and Competency Directory.
2. Skill gap in feedback and performance counseling.
3. Transformation from legacy to transparent system.

38. VARIOUS KINDS OF PERFORMANCE APPRAISAL SYSTEMS
 Personality based performance appraisal system:
Here the appraiser is supposed to rate the personality traits of the person being
appraised. This is not in much in organisations as it very subjective and judgmental. It
could also be biased and prejudiced.
 Competence based performance appraisal system:
Here the job analysis is used and the employee is appraised for the skills he
exhibits. For e.g. if his job entails dealing with the clients then he is judged foe his
effectiveness in dealing with them. This enables both the organisation and the
employee as to what deficiencies are to be overcome and can be useful in
providing training to the employee to better his performance.
 Result based performance appraisal system:
This system concentrates on the final results achieved by the employee irrespective
of his personality or deficiencies. This is totally related to the job and concentrates
on the end results that are more important to the organization.
Thus Performance Appraisal is the process to establish the competency
and the learning gap in addition to reward system. Performance increment would
depend on the performance appraisal input for the department and the management
for decision making. Human Resources would craft the notice and letter to
communicate to the employees. This is also an important issue. Human Resources
is the corporate communicator and is responsible for employees communication
(56)

39. Roles and Responsibilities
1 Role of Executive:
The executive shall fill out appropriate portions of the form, attend the PMS
meetings at all stages (performance planning, mid-year review and annual
assessment) and be prepared to have an open and frank discussion about
his/her performance.
The PMS aims at creating amity and convergence of individual and
organizational goals and it should be taken in that spirit.
The executive is required to show the necessary flexibility and adaptability
to the organisational needs and display system discipline through adherence
to all PMS requirements.
2 Role of Reporting Officer
The reporting officer shall cascade the KPAs based on MoU targets to the
executives reporting to him in a fair and achievable manner with necessary
stretch for individual excellence.
The reporting officer should set up performance planning, mid-year review
and annual assessment meetings with all the executives reporting to him
within the specified periods as per the PMS calendar.
The reporting officer shall maintain a brief log of all critical incidents
occurring within his scope of work as an aid to memory while completing
the mid year review, annual assessment and giving feedback to the
executive.
The reporting officer shall carry out the PMS scoring of all executives
reporting to him in an objective manner and such that the scores are
distributed in a manner requiring minimum adjustment and/or normalisation
by either the reviewing officer or the Performance Management Committee.
In the event of change of KPAs, measures, targets etc., the reporting officer
is required to obtain clearance from Reviewing Officer prior to making the
change.
(57)

40. 3 Role of Reviewing Officer
The reviewing officer shall go through PMS forms for all executives under
his purview and ensure that the reporting officer has been objective and
unbiased in his scoring of various executives, particularly with respect to the
sections relating to Competencies, Values and Potential
Where required, the reviewing officer may recommend some changes to the
scores after carrying out a detailed discussion with the respective reporting
officer
The reviewing officer shall also carry out an integrity check to ensure that
the scores awarded to all the executives under his/her purview are distributed
in a manner requiring minimum normalisation by the Performance
Management Committee.
Where an executive has a grievance against the reporting officer regarding
the PMS process, the reviewing officer shall intervene and settle the
grievance in a fair and objective manner.
The reviewing officer shall also be responsible for ensuring “stretch targets”
for executives under his charge.
The Reviewing Officer shall cascade the KPAs in an open and transparent
manner with each reporting officer by sharing his KPAs and targets.
4 Role of PMS Officer
A PMS Officer would be designated for each location (plant/ project/ region/
corporate)
The PMS Officer would be responsible for implementing PMS as well as for
periodic administration, follow-up, tracking and analysis of PMS activities
as per schedule in his/her respective location.
To ensure collection, collation and forwarding the Individual Development
Needs forms to the concerned EDC/ Regional HRD/ PMI.

41. RESEARCH
METHODOLOGY
OBJECTIVES OF STUDY
To identify factors in business dynamics to grade employees on the
objectives & transparent productivity parameters.
To study about the system of self appraisal, appraisal by reporting officer, by
reviewing officer and final assessment by moderation committee.
To study about create a direct link between rewards & performance to
increase the motivation level of employees.
To study about assessment of training & developmental needs of individual
employees.
To study and make employees completely aware about the parameters used
for evaluation of their performance.
RESEARCH DESIGN
Research design was adopted for the “Exploratory Research Study”. The main
purpose of the study was to formulate the problem in appraisal system for
investigation. The major emphasis was on the discovery of ideas & opinions of the
employees at different levels to improve the existing appraisal system. Two
methods were used for the study-:
1. The survey of concerning literature.
2. The experience survey

42. SAMPLING DESIGN
The sampling design used for the study was “Stratified Sampling”. The different
strata or homogeneous group formed was-:
Executives
SAMPLING UNIT
The sampling unit was “National Thermal Power Station”, Lodhi road, New
Delhi.
SAMPLE SIZE
In total 42 employees(executives) were interviewed during the study.
DATA COLLECTION METHODS
In the survey two types of data were collected-:
1. PRIMARY DATA
Primary data are those which are collected for the first time and therefore original
in nature.
2. SECONDARY DATA
Secondary data are those which have already been collected by someone else and
hence passed through the statistical process.

43. For the collection of primary data methods used-:
QUESTIONNAIRE METHOD
I prepared a structured questionnaire on the basis of information collected from
different sources. The questionnaire contains both open & closed ended questions.
2. SECONDARY DATA COLLECTION
Secondary data were collected from the following sources-:
(A) Books related to the topic
(B) Company documents
(C) Magazines
(D) Websites
STATISTICAL TOOLS USED
Statistical tools used in the project study are-:
1. TABLES
2. PIE CHARTS

44. Data Analysis
Of
Feedback Given
By
Executives

45. Quest:-1 your job description clearly define KPA’s on which your
performance is rated.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 12 28
AGREE 27 64
CAN'T SAY 0 0
DISAGREE 3 7
STONGLY DISAGREE 0 0
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference:- They were well aware about there KPAs and felt that it is
according to there job profile as 92% Executives agreed to it.

46. Quest: 2 -The goals (KPA’s) set are always mutually agreed upon
i.e. your consent is taken into consideration while setting KPA’s.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 8 19
AGREE 32 76
CAN'T SAY 0 0
DISAGREE 2 5
STONGLY DISAGREE 0 0
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference: - The response was divided although 76 % Executives agreed about
their consent being taken into the KPA setting process, 5% disagreed. It says that
in general executives participate in the KPA setting process but there is some
dissatisfaction.

47. Quest: 3 Do you feel that the mutually agreed upon targets /timelines are soft and can be
stretched further for improved performance.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 5 12
AGREE 18 43
CAN'T SAY 7 17
DISAGREE 12 28
STONGLY DISAGREE 0 0
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference: - 28% of respondents disagreed about the softness of their timelines
and 17% don’t want to answer. There is a sort of dissatisfaction regarding
Timelines or targets that are unable to improve the performance of executives.

48. Quest: 4- You are satisfied with the weightages given against each
activity that you are supposed to perform in the specified period.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 8 19
AGREE 27 64
CAN'T SAY 4 9
DISAGREE 3 7
STONGLY DISAGREE 0 0
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference:-Mostly, they agreed about the adequacy of weightages given against
each activity which they are supposed to perform in a given period.

49. Quest: 5- The deadlines set to complete and submit the performance
documents are sufficient.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 11 26
AGREE 26 62
CAN'T SAY 4 9
DISAGREE 1 2
STONGLY DISAGREE 0 0
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference:- Mostly they are satisfied with the operations of Performance
Management system.

50. Quest: 6 - The KPA’s are in accordance with the MOU targets of the
company and the targets of the plant.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 12 28
AGREE 22 52
CAN'T SAY 6 14
DISAGREE 2 5
STONGLY DISAGREE 0 0
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference:- It simply shows the awareness level of Executives. 66% of them
were agree and felt that individual goals matches well with unit goals and
company goals.

51. Quest: 7- All the factors facilitating and hindering performance are
taken into consideration while appraising the performance.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 10 24
AGREE 17 40
CAN'T SAY 13 31
DISAGREE 2 5
STONGLY DISAGREE 0 0
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
8 DISAGREE
STONGLY DISAGREE
Inference:- A healthy proportion of them agreed to this. Generally most of the
factors affecting the performance of an employee are taken into considereation.

52. Quest: 8- Your seniors assist you at the time of your need.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 18 43
AGREE 23 55
CAN'T SAY 1 2
DISAGREE 0 0
STONGLY DISAGREE 0 0
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference:- The response says that that there is a healthy environment of
working, seniors assist their subordinates whenever there is any need.

53. Quest: 9- Your final rating is doesn’t only on your competencies and
KPA’s but also on several other factors are like your interpersonal
relation with the rater.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 7 17
AGREE 21 50
CAN'T SAY 10 24
DISAGREE 3 7
STONGLY DISAGREE 1 2
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference:- Along with the competencies and KPA achievements the factors
like communication skills of the executives matter while rating their
performance.

54. Quest: 10- Your doubts and queries are addressed by the PMS
administrator while operating online PMS.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 10 24
AGREE 27 64
CAN'T SAY 3 7
DISAGREE 1 2
STONGLY DISAGREE 0 0
10
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference:- Except a few disagreement most of the employees agree that their
doubts and queries are addressed by the PMS administrator.

55. Quest: 11- The process is used mainly for improving the future
performance
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 5 12
AGREE 23 55
CAN'T SAY 10 24
DISAGREE 4 9
STONGLY DISAGREE 0 0
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference:-Performance management is meant for improving future
performance of employees and most of them agreed to it. The rewards and
recognitions are part of performance upgradation.

56. Quest: 12- You feel free to express to your appraiser your
disagreement regarding the appraisal decision.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 6 14
AGREE 12 52
CAN'T SAY 8 19
DISAGREE 6 14
STONGLY DISAGREE 1 0
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference:-It seems that upto some extent the employees are hesitant to
express their disagreement regarding the appraisal decision to their appraiser,
but overall the system is open and flexible as 52% of them agreed to it and
almost the same no were neutral.

57. Quest: 13- Your seniors provides you with continuous feedback to
help you achieve your KPA’s.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 10 24
AGREE 20 48
CAN'T SAY 6 14
DISAGREE 5 12
STONGLY DISAGREE 1 2
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference:-Mostly Executives are well aware about their KPAs and seniors
keep providing them feedback to achieve that, although some of them disagreed
to it which may be due to miscommunication between senior and subordinates.

58. Quest: 14 - The recognition given to high performance is
appropriate and helps in motivating the employee.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 9 21
AGREE 20 48
CAN'T SAY 7 17
DISAGREE 5 12
STONGLY DISAGREE 1 2
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference:-The recognition given to High performers is appropriate. There are
scopes of evolution of the recognition system so that even those who disagreed to
the appropriateness of the recognition system get satisfied.

59. Quest: 15-Does the PMS effectively captures the training needs of
executives.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 5 12
AGREE 16 38
CAN'T SAY 9 21
DISAGREE 11 26
STONGLY DISAGREE 1 2
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE

60. Quest: 16- Appropriate training is given to employees who fail to
meet the expected performance level.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 3 7
AGREE 5 12
CAN'T SAY 18 43
DISAGREE 14 33
STONGLY DISAGREE 1 2
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference:-Although half of the executives surveyed preferred to not to say
anything, There is a need to improve the training system so that appropriate
training could be given to those who need it.

61. Quest: 17- The online PMS is dynamic and keeps you aware about
your instantaneous weak and strong area of performance effectively.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 6 14
AGREE 14 33
CAN'T SAY 9 21
DISAGREE 10 24
STONGLY DISAGREE 2 5
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference:-The online PMS may be dynamic as compared to the manual
system but it does not provide instantaneous feedback about one’s KPAs.

62. Quest: 18- Managers and Employees trust the appraisal process.
OPINION NO. OF RESPONDENTS PERCENTAGE
STRONGLY AGREE 6 14
AGREE 18 43
CAN'T SAY 11 26
DISAGREE 6 14
STONGLY DISAGREE 1 2
NO. OF RESPONDENTS
STRONGLY AGREE
AGREE
CAN'T SAY
DISAGREE
STONGLY DISAGREE
Inference:-The appraisal process is trustworthy.

63. FINDINGS AND ANALYSIS
On the basis of the survey conducted, following points has emerged out which
require the attention of the management-:
1. The present performance appraisal system below E7 level is not effective
enough to serve the purpose of employee’s appraisal.
2. Below E6 level the “Management by Objectives” approach is not followed and
hence the employees are not clear about their functions based on these objectives.
3. Proper weightages are not assigned to different attributes which differ in their
importance.
4. Many employees are not aware about the criterion used for their appraisal.
5. According to those who know about the criterion, it is not sufficient to judge
their performance.
6. There is a wide gap between the self assessment by the employee and the formal
appraisal done by the organization.
7. There is no provision of incentives to the individual employee based on his/her
performance appraisal rating.

64. 8. Formal feedback is not provided to the employees on regular basis.
9. The appraisal system does not help the employees to discover their true potential
for higher responsibilities.
10. Employees do not get sufficient opportunity to appeal to the higher authorities
in case of adverse entry.
11. There is considerable amount of communication gap between the superiors &
subordinates.
12. No emphasis is given on the behavioral aspect of the employees which affect
their performance considerably.
13. Training is not provided to the employees on the basis of his/ her performance
appraisal rating.

65. CONLUSION AND RECOMMENDATIONS
RECOMMENDATIONS
1. “Management by objective” approach should be introduced below E6 level and
upto E1 level, so that executives at lower levels should also be aware about their
functions based on these objectives.
2. Before setting the KRA’s, the employees should prepare themselves by
reviewing their work beforehand, identifying barriers they faced in doing their jobs
and refamiliarise themselves with their job descriptions, job responsibilities etc.
3. Appraise should be allowed to present their own opinions and perceptions freely
but in a calm and factual manner.
4. Performance appraisal should not be concentrated to forms only but on its
purpose of performance improvement by removing barriers to job success.
5. Both appraiser & appraise should combinedly set realistic targets that can be
achievable, otherwise the procedure of setting KRA’s is wastage of time.
6. Weightages should be assigned to different attributes according to their
importance.
7. Formal feedback should be provided on regular basis to the employees, so that
problems can be prevented in their early stages. It’s a two way communication
process, therefore a subordinate can also initiate the process.

66. 8. Reporting officer should make the employees aware about the criterion used for
their performance appraisal.
9. Monetary & non monetary incentives should be given to the individual
employee on the spot, by the manager, based on their performance. It will motivate
the employee.
10. Behavioral aspect of the employee should be given due importance while
reviewing his performance.
11. Training should be provided to the employee on the basis of his/ her
performance appraisal rating. It will help him/her to get new skills.
12. The procedure of performance appraisal should be transparent in the sense that
the employee should be aware about his/her appraisal rating.
13. Communication gap between the appraiser & appraise should be reduced by
means of performance appraisal & regular meetings.
14. Make employees more accountable towards their duties and responsibilities.
15. After the level of manager, there should not be fixed time limit for promotion
and employees get higher responsibilities on the basis of their potential and
aptitude. So, there should be potential appraisal along with performance appraisal
at this level and above.

67. 16. A computerized system should be introduced to fill the forms and submission
at supervisor level and above. It will reduce the time required to do appraisal and at
the same time bring transparency between the appraisers and appraise, as he/she
can see his/her ratings on the computer whenever they want. A password should
also be assigned to the employee to keep his/her ratings confidential.

68. CONLUSION
The aim of performance management system is ensuring the
maximization of efforts by the employees of the organization to realize
the desired goals. More effective the performance management of an
organization more productive the organization would be. NTPC as a
whole is a big organization with vast number of employees working
there, to manage the performance of such a great number of people
efficiently is a herculean task.
The survey and personal interviews conducted during the
project work says that an effective performance management system is
on place but as we know everything in this world keep evolving itself for
betterment, the performance management system is not an exception.
NTPC can touch new heights in the field of energy
management by managing its manpower more efficiently, addressing
there training needs, recognizing the high performances and making
them feel the freedom of expressing their points.

69. Limitations of the Research
The subject was too big but time available was too less. The
survey was not conducted among all the employees of NTPC but
on a sample of randomly selected executives.
At times it was often felt that there is a difference between the
real feeling and the feedback given by executives. Exact feedback
must be given so that the analysis done would be correct.
Some of the executives were not interested in the subject metter.
We were unable to discuss issues related to our project with some
people and only responses to questionnaire were collected.

70. REFERENCES
Human Resource and Personal Management - K. Ashwathapa
Organizational Behavior - Stephen p. Robins
http/intranet 1 – KHSTPP
http://www.ntpc.co.in/index.php?option=com_content&view=article&id=28&Itemid=41&lang=
en
www.citehr.com
www.ntpc.co.in

71. ANNEXURE

72. SURVEY ON PERFORMANCE APPRAISAL SYSTEM
This survey will only be used as an instrument for my summer training report for MBA.
PERSONAL INFORMATION
GRADE: ………………
DEPARTMENT: …………………………. SECTION: ………………………………
NUMBER OF YEARS OF SERVICE IN NTPC: ………….
S.NO QUESTIONS STRONGLY AGREE CAN’T DISAGREE STRONGLY
AGREE SAY DISAGREE
1 Your job description clearly
defines KPA’s (Key
performing areas) on which
your performance is rated.
2 Do you feel that goals (KPA’s)
set are always mutually
agreed upon i.e. – your
consent is taken into
consideration while setting
KPA’s.
3 Do you feel that the mutually
agreed upon targets
/timelines are soft and can
be stretched further for
improved performance.
4 Are you satisfied with the
weightage given against each
activity that you are
supposed to perform in the
specified period
5 The deadlines set to
complete and submit the
performance documents are
sufficient.

73. S.NO QUESTIONS STRONGLY AGREE CAN’T DISAGREE STRONGLY
AGREE SAY DISAGREE
6 Your KPA,s are in accordance
with the MOU targets of the
company and the targets of
the unit.
7 All the factors facilitating and
hindering performance are
taken into consideration
while appraising the
performance
8 Your seniors assist you at the
time of your need.
9 Your final rating is based not
only on your competencies
and KPA’s but also on several
other factors like
interpersonal relation with
the rater.
10 Your doubts/Queries are
addressed by the PMS
administrator while
operating online PMS.
11 The process is used mainly
for improving the present
performance.
12 Do You feel free to express to
your appraiser your
disagreement regarding the
appraisal decision
13 Your senior manager
provides you with continuous
feedback to help you achieve
your KPA’s.
14 The recognition given to high
performance is appropriate
and helps in motivating the
employees

74. S.NO QUESTIONS STRONGLY AGREE CAN’T DISAGREE STRONGLY
AGREE SAY DISAGREE
15 Does the pms effectively
capture training needs of
executives.
16 Appropriate training is given
to employees who fail to
meet the expected
performance level.
17 Do you feel the online PMS is
dynamic and keeps you
aware about your
instantaneous weak or
strong area of performance
effectively
18 Do you feel Managers and
Employees trust the
appraisal process
YOUR SUGGESTIONS TO IMPROVE THE EXISTING PERFORMANCE APPRAISAL
SYSTEM:
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………
THANK YOU,
NIDHI (STUDENT-MBA, NIEC, NEW DELHI)