1. A Overview of the new Performance
Management System
“KAUSABAN”
P.B.S. KUMAR
B.Sc.MA(PM),MA(Ind.Eco.),MBA(HR),BGL,DLL,PGD IR&PM
MANAGER-HR
P.B.S. KUMAR

2. Objective of today’s discussion
Understand... Basis & rationale for the new PMS - The why
Discuss... Key Features of the proposed PMS - The what
Demonstrate… Performance Appraisal Process - The how
Familiarise... The Communication material - The tools
Define... Key Roles in the new PMS- The who
P.B.S. KUMAR

3. So what is “KAUSABAN”???
• It is the name of AAOIL’s new Performance Management System
• It covers the employees in Supervisory Grade and above.
• Measurement of your performance will be conducted based on “KAUSABAN”
KAUSABAN
 Stands for excellence, sharp growth through performance and alignment
to business goals.
 Reflects the spirit of AAOIL’s endeavours towards aligning each
individual’s performance to the strategic thrust of the organisation.
P.B.S. KUMAR

4. Need for “KAUSABAN”
“KAUSABAN” was needed to ensure the following
 Clear alignment of individual performance with Corporate, Division &
Department goals
Objective measurement of performance against targets plus assessment of
skills and abilities
Uniformity and consistency of the process across the organisation, clearly
aligning it with the corporate Objectives.
Clear defined steps in the process with clearly articulated roles for each
player, minimising scope for subjectivity.
Ownership of PMS by line, HRD as a facilitator only.
Visible and transparent linkage with rewards and other HR systems.
Simplicity and ease of administration - assuming future technology
enablement.
P.B.S. KUMAR

5. KAUSABAN aims to meet these basic objectives...
Drive vision and Address the
performance across shortcomings of the
the company current PMS system
Meet key stakeholder
expectations from the
new PMS
Top Mgt. Perspective Appraiser Perspective Appraisee Perspective

Build Performance Focus 
Facilitate process of planning, 
Provide clear

Alignment of individual monitoring & review performance definition
with corporate goals 
Make an objective assessment  Transparency in the

Consistency in the of performance. process
performance planning 
Enable him to provide 
Clear linkage with
process objective feedback rewards & other HR

Ownership of 
Enable focus on capability systems
performance by line development of appraisee
P.B.S. KUMAR

6. Characteristics of the “Performance Management” Process
• Facilitates Quarterly Appraisals
• Facilitates “mid-course” corrections through monthly reviews for specific
departments
• Defines desired corporate, division and department performance through “Business
Planning”
• Aligns individual performance to corporate, division and department performance
• Facilitates mid-course corrections through Performance Reviews
• Links performance on KRAs to a Variable Pay Scheme, to sharpen focus on
performance around “business goals”
• Facilitates a “Balanced view of Performance” through linking KRAs and Routine
Responsibilities to “annual increments”
• Focuses not only on “performance” but also on “development”
P.B.S. KUMAR

7. Definition of Performance - “KAUSABAN”
Key Responsibility Routine
Areas Responsibilities
KRAs are “Critical Routine Responsibilities are
Achievements” required to “on-going tasks or outcomes
deliver Globals desired that are undertaken or delivered
business results on a day-to-day basis
The targets for these are The targets for these come
derived from the Corporate from the targets on process
goals and objectives- these efficiency that are either set
have been derived through internally in a department/
the Balanced Scorecard division or as a part of
exercise initiatives like Six Sigma
P.B.S. KUMAR

8. Identifying Key Result Areas
– KRAs are directly linked to the AAOIL’s business goals and to
ensure that alignment, a tool called the “Balanced Scorecard”
will be used.
• Framework for articulation of corporate strategy
• Development of strategic initiatives along 4 themes -
Financial, Customer, Internal Process and Learning &
Growth
• Cascading of strategy to actionable initiatives (KRA’s)
at Division & Department levels
P.B.S. KUMAR

9. Development through KAUSABAN
– A key element of KAUSABAN, focusing on building individual
capability using Competencies.
– Competencies are “Skills and abilities described in behavioral
terms that are coachable, observable, measurable, and critical to
organizational performance” for e.g., teamwork
– No marks assigned - used only for Development
– Competency dictionary is under preparation.
– Levels of Proficiency and behavioral indicators would be
defined for each Competency once established.
P.B.S. KUMAR

10. Key Roles in KAUSABAN
Appraisee Appraiser Reviewer
Every Employee whose Every Executive who Your Appraiser’s
performance is assesses the Appraiser, who is
assessed in XXXX performance of one or responsible for
more Appraisees that reviewing the entire
report to him/her performance process
 It’s about your  Will help you manage  Will ensure
Performance your performance & Objectivity,
provide continuous Transparency &
 You are the key driver feedback and Consistency
of the process coaching
P.B.S. KUMAR

11. Overall Performance Planning Cycle
Corporate Performance Mid
Planning Session December
Division Target Setting End
Session December
Individual Performance
Planning Session
Q4: Final Performance 14th January
Appraisal
7th January Q1: Appraisal review &
feedback
7th April
Ongoing monthly
Q3: Appraisal review & review and feedback
feedback
7th October
Q2: Appraisal review &
feedback
P.B.S. KUMAR
7th July

12. How does Corporate Performance get measured?
Objective • To measure achievement of stated strategic corporate objectives
Step 1 Step 2 Step 3
Define Business Set corporate targets and Review and measure
Success Criteria for the weightages for the quarter achievement against targets
corporate every quarter
Key features
• Coincides with the annual Corporate Budgeting session.
• Business Success Criteria defined here, at the beginning of the first quarter (Mid-December to
end-December ).
• 4-5 performance goals, typically from the corporate scorecard as part of the Business Plan.
• Corporate targets set once every quarter (Q1: Mid-Jan, Q2: Mid-Apr, Q3: Mid-Jul, Q4: Mid-Oct).
• Targets defined on a 5-point scale, enabling objective measurement of achievement.
• Weightages against Corporate targets to be decided once a year and spread across 4-5 goals
defined
• Review occurs through quarterly monitoring of the Business Plan
P.B.S. KUMAR

13. How does Division Performance get measured?
Objective • To measure achievement of stated division targets and objectives
Step 1 Step 2 Step 3 Step 4
Define Business Set Division Identify and Review and measure
Success Criteria targets and ensure element of achievement against
for the Division weightages for stretch in targets targets every quarter
the quarter
Key features
• Identical to Corporate Performance Planning
• In addition, consistent element of stretch ensured by incorporating the ‘Stretch Tool’
P.B.S. KUMAR

14. Anchoring Targets to the Rating Scale
Business Success Criteria Target
Order Booking Rs. 20 Crore
1 2 3 4 5
Significantly Mod erately Meets Moderately Significan tly
Below Below Expectations Above Above
Expectations Expectation Expectations Expectations
15 Million 18 Million 20 Million 22 Million 25 Million
The required level of achievement for each point on the Five Point Rating
Scale must be defined
P.B.S. KUMAR

15. Performance and Development Planning
Performance Development
Planning Planning
Routine Other Skill
KRAs Competencies
Responsibilities Gaps
P.B.S. KUMAR

16. Performance Planning [and linkages to pay-outs]
Quarterly [Q1,
Accentuating performance on key result areas Q2, Q3 & Q4]
• From Final Score
Key Result Department BSC
Areas (max. 8) Simple Average
covering at least Will serve as the basis for
1 from each variable payout
category of BSC
Overall Performance Rating Annually [End of Q4]
• Average of Relative
Key Result quarterly “Final Overall Score
Weightage
Areas Scores” [As for KRAs
depicted above]
Will serve as the basis for
• Based on an
Relative fixed pay increases or
Routine Weightage
understanding promotional decisions
Responsibilities for Routine
of the role Responsibiliti
es
(max. 4-5 nos.)
P.B.S. KUMAR

17. Development Planning
Development Planning
Developmental
Competencies
Competencies
Competencies to be A maximum of 4, to be
picked from the identified from the list
Competency Master
and expected levels Development Plan
Other Skill Gaps
applicable to the role
to be identified (Behavioural/
Technical)
Any number, agreed upon
by the Appraiser and the
Appraisee, based on the
specific needs of the role
Forms the basis for the Training Calendar drawn by HR.
Training Needs The Appraiser to drive the “learning and development” of the
Appraisee throughout the year, based on this Development
Plan
P.B.S. KUMAR

18. Evaluation of Individual Performance
Objective • To set “clear performance expectations” from the individual
Step 1 Step 2 Step 3 Step 4
Performance Monthly reviews Quarterly Final Performance
Planning and feedback appraisal, review Appraisal [Q4]
and feedback
[Q1, Q2 & Q3]
Key features
• Performance measured on KRA’s and Routine Responsibilities
• KRA’s, typically from the Department scorecard, identified at the beginning of the year
• Targets, set once every quarter (Q1: Mid-March, Q2: Mid-July, Q3: Mid-October, Q4: Mid-
January)
• Pre-determined weightages based on job type and Division category
• Monthly reviews between appraiser and appraisee (important to ensure that any relative
change in importance of particular KRA gets reflected or updated in the form)
• Appraisal & feedback on a quarterly basis
P.B.S. KUMAR
• Rater bias removed through the introduction of a reviewer

19. Action Planning
The Action Plan describes the specific steps, milestones
and resources planned by the Appraisee to accomplish
the KRA or Routine Responsibility.
KRA Target
Order Booking Rs. 20 Crore
Action Plan:
– Scan the market on an ongoing basis to identify opportunities
– Analyze existing customer base to identify possibilities of repeat orders
– Reduce cycle time to submit proposals/tender
– Conduct analysis identifying reasons for loss of past orders and determine weather loss
was due to technical or commercial reasons
– Gather market intelligence on pricing strategy of competitors and keeps units abreast
of the same
– Have on-going discussions with units on bids being prepared so as to ensure that
optimal techno-commercial bid is prepared
P.B.S. KUMAR

20. Monthly Reviews
Objective • To facilitate “mid-course” corrections, and ensure that targets reflect
market realities
Applicability • Divisions where the targets are very flexible and their realization
depends upon market forces
• The division heads of the respective divisions need to decide at the
beginning of the year whether monthly reviews are required for their
divisions
Process
• Appraisee does self appraisal and determines how he/she is performing against the
targets set for the quarter
• Appraisee and Appraiser have a discussion around the targets and the Appraiser gives
Feedback to the Appraisee on his/ her performance
• If required, Appraisee and Appraiser revise targets for the quarter to reflect market
realities [This is to done only if necessitated by business realities]
P.B.S. KUMAR

21. Quarterly Appraisals [Q1, Q2,Q3 & Q4]
Objective • To assess performance of the Appraisee on KRAs, against the targets
outlined for the quarter
Process • You and Your Appraiser will rate your performance on the KRAs
articulated at the beginning of the year on the basis of the Action Plan
or Steps Taken by you for its accomplishment and the extent of
achievement against outlined targets for the period.
Appraisal Q1 Appraisal 1st Week of April
Schedule
Q2 Appraisal 1st Week of July
Q3 Appraisal 1st Week of October
Q4Appraisal 1st Week of January
Computation of Your Final Score for the quarter will be arrived by adding up the
“Final Score” individual ratings on each KRA and dividing it by the no of goals or
KRAs . This will give you your score on KRAs.
Final Score = Average of Scores on each KRA for the quarter
P.B.S. KUMAR
* Scoring will be done based on the 5 point rating scale mentioned in the next section.

22. Rating scale for Performance Evaluation
The rating scale used for the evaluation of performance on KRA’s is a five point scale
and is explained below:
5: Exceeds Expectations consistently - Consistently exceeded the expectations
beyond a point which deserves special mention
This is the highest rating and is given when the results put in by an individual is truly
outstanding.
4: Exceeds Expectations occasionally - Exceeded most of the set expectations by a
reasonable margin
This rating is to be used when a majority of the the set expectations were exceeded
and outcomes and efforts were above average.
3: Meets Expectations consistently - Met all the set expectations as per target
This rating is the average rating, when an employee delivers what s/he is bound to
deliver. Needs to be given only when all the expectations were met.
2: Meets Expectations on most occasions - Met most of the set expectations
When an employee meets most, but misses some of the expectations, this rating is
applicable.
1: Does not meet Expectations on most occasions - Failed to meet most of the
expectations.
P.B.S. KUMAR
When a majority of the expectations are not met, this rating is applicable

23. Final Appraisal
Objective • To assess overall performance of the Appraisee on KRAs and Routine
Responsibilities and to assess development against the Development
Plan charted at the beginning of the year
Time • End of Q4 [First Week of January ]
Process
• The Appraisee undertakes a self-appraisal and gives a rating on all the KRAs for the
quarter [Q4] and Routine Responsibilities
• The Appraiser then does the assessment & rating.
• He/ she also reviews the actions taken towards achievement of the Appraisees’s
development plan.
• The Reviewer then reviews the ratings. At any stage the appraiser and/or reviewer can
call for a discussion with the Appraisee.
• The overall rating has to be a consensus between Appraisee, appraiser & the reviewer.
• In case of a dispute, the reviewer’s rating will be treated as final and will feed into the
Overall performance score of the Appraisee.
• After ratings are finalized by the Reviewer, they are consolidated by HR and then, checked
for “Rater Bias” P.B.S. KUMAR

24. Final Appraisal
Computation of Your Overall Score for the year will be arrived by taking a weighted
“Overall Score” sum of ratings on routine responsibilities and average of ratings on
KRAs for the 4 quarters.
Overall Score = ((Average of Final Scores on KRAs for the 4 Quarters) *
KRA Section Weightage) + ((Average of scores on Routine Responsibilities) *
Routine Responsibility Section Weightage)
Overall Performance Rating Annually [End of Q4]
• Final Score for Q1
Key • Final Score for Q2 Relative
Result • Final Score for Q3
Simple Average
Weightage Overall Score
Areas • Final Score for Q4 for KRAs**
Will serve as the basis for
Routine • Scores on Relative fixed pay increases or
Weightage
Responsi Routine
Simple Average promotional decisions
Responsibilities for Routine
bilities Responsibiliti
es**
* Scoring will be done based on the 5 point rating scale as discussed earlier
** Relative Weightages for KRAs and Routine Responsibilities are detailed in the following slide
P.B.S. KUMAR

25. Relative weights for KRA’s and routine responsibilities
Objective • Top management to have greater relative weight on achievement
of KRA’s vis-à-vis routine responsibilities (as compared to Middle
Management and Junior Management)
• Support or service functions to have greater relative weight on
achievement of routine responsibilities than KRA’s (as compared
to non-support/ production functions
Core Functions
Non-Support (Production) Divisions [For e.g., HSM, SIP, BF)
Weightages KRAs Routine Responsibilities
Top Management 70% 30%
Middle Management 60% 40%
Junior Management 50% 50%
Support Divisions (For. e.g., CRG, Finance etc.)
Weightages KRAs Routine Responsibilities
Top Management 50% 50%
Middle Management 40% 60%
Junior Management 30% 70%
Note: Classification of grades/ bands into Top, Middle & Junior Management will
P.B.S. KUMAR
need to be decided

26. Removing rater bias
Objective • To improve the consistency and soundness of the evaluation process
• Removing rater (appraiser) bias through introduction of a reviewer
• Applicable to final scores (arrived at in each quarter) and the overall
performance score (computed at the end of the fourth quarter)
Calculate the average of all the “overall ratings” given by an
1
Methodology appraiser to each employee. Call this A
Calculate the average of all “average overall ratings” (or average
2
of all “A”s) given by all Appraisers. Call this figure B.
3 Now check for variance for each Appraiser - (A-B)/ B * 100 = x%
4 If x% falls in the range -10% to 15%, there is no rater bias.
If it does not fall in this range, there is a possibility that rater
5
bias may be occurring, and hence this forms an outlier
For such outliers, the appraiser has to give justification for the
6 rating given and if the reviewer feels that the justification is not
P.B.S. KUMAR
sound enough, he/she may direct the appraiser to revisit the
rating

27. Assessing Development Plans
Assessing Development Plans
⇒ During the year-end appraisal, the Appraiser will rate the
Rating Appraisee on the Competencies, based on the 5 point rating scale
Competencies* mentioned below.
⇒ These ratings will be used only for “Developmental purposes” and
will not form a part of the “Overall Score” and will thus not be
linked to incentives or increments.
Other Skills ⇒ The Appraiser will also assess the achievement of the
Development Plan of the Appraisee on Other Skills during the
year, on the action plans charted by the Appraisee. This however,
will not result in any scoring of any sort
⇒ Based on the “current performance levels” of the incumbent, the
Career
Appraiser, in consultation with the Appraisee, will capture “Career
Aspirations* Aspirations” for the Appraisee, if any will provide his/ her
assessment of the readiness/ potential of the Appraisee based on
the scale mentioned in the next slide.
P.B.S. KUMAR
* Scoring will be done based on the 5 point rating scales detailed in the next slide

28. Rating Scales for Competencies and Career Development
For Competencies
A: Role Model- Encourages and influences others to display the skill.
B: Strength- Almost always demonstrates behavior/skill where appropriate
C: Capable- Often demonstrates the behavior/skill
D: Development Area- Sometimes demonstrates the behavior/skill where appropriate
E: Learner- Has not yet demonstrated the behavior/skill.
For Assessing Potential
The following five point rating scale will be used:
⇒High - This individual can advance well above (one or two levels above) current position
⇒Moderate - This individual shows potential for taking on greater responsibility or moving
to next management/technical level over a period of 6-12 months
⇒Limited - This individual can continue to contribute significantly in his/her current
position, but may have limited upward growth opportunities. A lateral move may be an
appropriate growth opportunity for this individual
⇒Key Resource - This individual is a key resource in his/her current position. This vital
knowledge precludes movement at this time, but development opportunities should
continue to be identified
⇒Too New- This individual has been in his/her current position less than six months and
is too new to evaluate
P.B.S. KUMAR

29. Linkage of Kausaban to Consequence Management
Variable Pay
Score on KRA’s
component
Fixed Pay Increments
Cumulative Score on
KRA’s and Routine
Responsibilities Promotion Decisions
Rating on
Competencies
Training Plan
Development Plan
P.B.S. KUMAR

30. ARANI AGRO OIL INDUSTRIES LIMITED, KAKINADA
Performance Review and Development Plan
From : To :
Name : Designation : Emp No.
Join Dt. : Grade : Qualification :
Division : Department : Section :
Name of the Name of the
Reporting Officer : Reviewing Officer :
P.B.S. KUMAR

31. KRA's to be established at the Beginning of the Year.
H-1 H-2
S.No Key Result areas Weightage Q1 Q2 Q3 Q4
Task Factors (What to do)
1(F)
2(F)
3(F)
4(C)
5(C)
6(IP)
7(IP)
8(IP)
9(L&G)
10(L&G)
TOTAL 100%
Competencies (How to do)
1
2
3
4
5
6
Competencies will be used for Skill Upgradation and Career Progression only.
Appraisee Reporting Officer Reviewing Officer
P.B.S. KUMAR
(Signature) (Signature) ………... (Signature)

32. Performance for Quarter - 3 of FY 2005
Weightage
S.No KRA Measurement Criteria
(W)
TASK (What to do)
1(F)
2(F)
3(F)
4(C)
5(C)
6(IP)
7(IP)
8(IP)
9(L&G)
10(L&G)
TOTAL 100%
Competency data will be used for skill enhancement for career progression
COMPETENCY (How to do) Degree of Competency
1
2
3
4
5
6
Appraisee Reporting Officer Reviewing Officer
(Signature) (Signature) ……………..…... (Signature)
P.B.S. KUMAR

33. Performance for Quarter -3 of FY 2005
1 to 5
Lowest 1
Highest 5
Rating by Rating by
Self Moderation, if
Measurement Weightage Reporting Reviewing
S.No KRA Appraisal required
Criteria (W) Officer Officer
( R-1 ) ( R-4 )
( R-2 ) ( R-3 )
TASK (What to do)
1(F)
2(F)
3(F)
4(C)
5(C)
6(IP)
7(IP)
8(IP)
9(L&G)
10(L&G)
TOTAL 100% Total % in the Quarter
Competency data will be used for skill enhancement for career progression
COMPETENCY (How to do) Required Degree of competency Rating by Rating by
Self Actual Level
Reporting Reviewing
Appraisal of
Officer Officer
( R-1 ) Competency
( R-2 ) ( R-3 )
1
2
3
4
5
6
Rating Criteria
Partial Significant Exceptional
Contributor
Non Performance Contributor Contributor Contributor
(C)
(PC) (SC) (EC)
<60% 60~69% 70 ~ 79% 80 ~ 89% 90~100%
Total Score
P.B.S. KUMAR
Appraisee Reporting Officer Reviewing Officer
(Signature) (Signature) ……………..…... (Signature)

34. On line PMS - Flow Chart
Opening Lotus updation of Master KRA Sending PMS
Notes ID for Emp Master / identification Database linkage
every Dept. Master and updation to all Employees
Individual by PMS Dept. for every thr.Lotus Notes.
Department
Receipt of Approval of Generartion of Training /
approved Annual Plan by Annual plan by Workshop for
Annual Plan by reviewing Reporting ONLINE PMS
Appraisee Officer. Officer
Generation of Sent to Approval by Approval by
Quarterly plan by Reporting reviewer and
Reporting
Appraisee. Setting Officer for sent to
officer & send
KRA's, targets and Approval appraisee
to Reviewer
Weightages
Approval by Approval by QuarterlyPerforma
Sent to
Reviewer Reporting nce Appraisal by
Reporting
(Quarterly officer & send Appraisee (self
Officer for
Appraisal over to Reviewer Appraisal on 1- 5
) Approval
scale)
P.B.S. KUMAR

35. On line PMS - Flow Chart ……… continue
Sr # Activity By Whome For What When Remarks
1 Annual Business Reporting Create Annual Business End of Auto generation of lotus
Plan Officer Plan and Send to Reviewing Dec. note to reviewer with a
Officer copy to Appraisee.
2 Annual Business Reviewing Finalization and Send to End of Auto generation of lotus
Plan Officer Appraisee Dec. note to Appraisee with a
copy to Reviewer.
3 Annual Business Appraisee View and to create End of
Plan Quarterly Performance Dec.
Plan
4 Quarterly Appraisee Create Quarterly Business End of Auto generation of lotus
Performance Plan and Sent to Reporting Dec. note to Reporting officer
Plan Officer
5 Quarterly Reporting Approval and sent to End of Auto generation of lotus
Performance Officer Reviewing officer. Dec. note to reviewer with a
Plan copy to Appraisee.
6 Quarterly Reviewing Finalization of quarterly End of Auto generation of lotus
Performance Officer plan and sent to Appraisee. Dec. note to Appraisee with a
Plan copy to Reporting Officer.
7 Quarterly Appraisee Received and View End of
Performance Dec.
Plan
8 Quarterly Appraisee Create and Send to 1st week Auto generation of lotus
Performance reporting Officer for the of April note to Reporting officer
Card review of performance for
1st Quarter.
9 Quarterly Reporting Approval of Quarterly 1st week Auto generation of lotus
Performance Officer performance and sent to of April note to reviewer with a
Card Reviewing Officer copy to Appraisee.
10 Quarterly Reviewing Finalization and 1st week Auto generation of lotus
Performance Officer performance rating. of April note to Appraisee with a
Card copy to Reporting Officer.
P.B.S. KUMAR
Same Process continue for other quarters.

36. Thank you
P.B.S. KUMAR