4/4/2012

1
NTPC LIMITED
PERFORMANCE MANAGEMENT SYSTEM
Objectives of NTPCs PMS-
P A C E Performance And Competence for Excellence
To accomplish overall organisational vision and mission
by linking individual performance to company objectives
To facilitate fulfilment of individual aspirations
To build a culture of performance
To encourage two-way communication between appraiser
and appraisee
To evaluate the potential of the appraisee to assume
higher responsibilities in the organisational hierarchy
To translate future skill requirements of the organisation
into individual development plans
To identify high performers and recognise them through
rewards and incentives
PACE is a five step process
Joint review of
performance
Document
changes in
KPAs if any
Document
mid-year
review
discussions
Assessment of
KPAs,
Competencies,
Values and
Potential by
appraiser
Training and
Development
Plans
Review by
reviewing officer
Mid-year
Review
Feedback
Performance
Planning
Annual
Assessment
Normalisation
Process
PMS
Process
Step 1
Identify KPAs,
constituents,
weightages,
measures and
targets
Identify
functional and
managerial
competencies for
the appraisee
Communicatio
n of score
Developmenta
l feedback
Step 5
Step 4
Step 3
Step 2
PACE Cycle (Important Dates)
Stages of PACE E1 to E5 E6 & above
Performance Planning 1
st
to 25
th
January 1
st
to 25
th
April
Mid Year Review 1
st
to 15
th
July 1
st
to 15
th
October
Annual Assessment 15
th
Dec to 7
th
Jan 1
st
to 25
th
April
Normalization 15
th
to 31
st
January 1
st
to 25
th
May
Communication of scores 7
th
February 31
st
May
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2
Step #1: Performance Planning
Company
Goals
Unit Goals
Functional /
Departmental Goals
Individual Goals
Set KPAs
KPA setting for all appraisees in
consultation with the reporting
officer (appraiser)
KPAs to be set by referring to the
KPA Directory and taking inputs
from the MoU targets, functional
plans, individual responsibilities and
cascading of KPAs from the top
The KPAs, once finalised, to be
signed off by the appraiser and the
appraisee
Identify Competencies
Functional competencies for the
appraisee to be identified and
written in the PMS form by
referring to the Competency
Directory
Managerial competencies to be
identified from the prescribed set
on the PMS form
Parameters for performance measurement are pre-
defined
Objectives are prioritized
Individual performance is enhanced by clear
definition of deliverables
Role of individuals is clarified within overall
organizational context
Why is it critical?
Process Steps KPA Setting Process
Corporate Plan Corporate Plan
Special Tasks Special Tasks
Initiatives
MOUs
Type of KPAs
Numeric
PLA, Availability, Profit, Cost, Inventory
Time/ Deadline
Projects, Clearance, Maintenance, Land
Acquisition, Accounts, Budgets, Engineering
Negative
Complaints, Grievance, Accidents, IR problems,
man days lost, Rejection, etc.
Define Job
Families
Define Roles
Develop
KPAs
PMS would comprise assessment on four parameters
with different wieghtages for various levels
For executives in lower grades, there is higher weightage on KPAs and functional competencies
as the there is higher focus on achieving the immediate functional tasks
The weightage on managerial competencies and values increases for an executive as the grade
increases because the role requires achieving business goals by managing work of other
employees
SNo. PMS Parameter E1-E3 E4 E5 E6-E8 E9
1. KPA 80 75 65 50 50
2 (a) Functional
Competency
Assessment
10 10 10 10 5
2 (b) Executive/Managerial
Competency
Assessment
05 05 10 15 15
3 Core Values
Assessment
05 05 05 15 20
4 Potential Assessment Nil 05 10 10 10
Total 100 100 100 100 100
8
Performance Management
System
adopted by
Indian Oil Corporation Ltd
21
st
September, 2010
4/4/2012
3
9
Appraisal Cycle
Performance
Planning
Mid Year review &
feedback
Feedback and Review
April - June
October
April
Ongoing monthly
review and feedback
Final Performance
Appraisal
April-May
10
System Design
DEF grades
KRA
55%
Competency
20%
Value
10%
Potential
15%
HI grades
KRA
45%
Competency
20%
Value
15%
Potential
20%
The relative weightages are as follows:
G grade
KRA
50%
Competency
20%
Value
15%
Potential
15%
ABC grades
KRA
60%
Competency
15%
Value
10%
Potential
15%
11
Stretch in target setting
Dimensions of Stretch
Target relative to previous years achievement
Dependence of uncontrollables
Complexity
Skill requirements
Need for Innovation
12
Performance Appraisal Performance Appraisal- -Soft Skills Soft Skills
Values
4/4/2012
4
13
Performance Appraisal-Soft Skills
Adaptability to change
Collaboration
Cost Consciousness/
Resource utilisation
Dependability
Quality of Work / Output
Managing Change
Boundary Management
Entrepreneurial
Leadership
Enhancement of Quality
and Output
Senior Management
Junior Management
Ability to shoulder higher responsibilities
Potential
14
Calculation of Final Score An
Illustration
PMS Calculation Sheet
DGM Level
KRA Weight Rating Stretch Individual KPI Score
50% (weight * rating * stretch)
KPI 1 20% 3.5 0.85 0.595
KPI 2 30% 4.7 0.75 1.058
KPI 3 40% 4.2 0.95 1.596
KPI 4 10% 2.0 0.60 0.120
KPI Score 3.369
Competency Weight Rating Individual Competency Score
20% (weight * rating)
Competency 1 33% 3 0.990
Competency 2 33% 4 1.320
Competency 3 33% 3 0.990
Competency Score 3.300
Values Weight Rating Individual Values Score
15% (weight * rating)
Values 1 33% 4 1.320
Values 2 33% 3 0.990
Values 3 33% 4 1.320
Values Score 3.630
Potential Weight Rating Individual Potential Score
15% (weight * rating)
Potential 1 33% 4 1.320
Potential 2 33% 5 1.650
Potential 3 33% 4 1.320
Potential Score 4.290
Overall score 3.532
Overall Score= (KPI rating * KPI weight + Competency rating * Competency weight + values rating * Values
weight + Potential rating * Potential weight )