Workshop on PMS organised by DPE21st September, 2010

Performance Management

System in BHEL

The e-enabled Performance Management System for Executives

ABOUT BHEL

India’s Largest Engineering & Manufacturing Enterprise in the Infrastructure Sector

> 50 years old Government owned Navaratna PSE

2009-10 revenues of Rs.34000 cr, PBT of Rs. 6591 cr.

65% share of India’s installed generation capacity

Power Generation & Transmission, Industry, Transportation, Defence etc.

180 products

Presence in more than 70 countries

Large employee base

46,000 total employees 11,000 executives

All-India manufacturing, sales, support and projects operations

15 manufacturing locations 4 Power sector regions 36 Regional offices and sales & service centres > 100 sites

ABOUT BHEL

STRUCTURE OF PRESENTATION

BACKGROUND

KEY FEATURES OF MAP

MAP TOOLS

ISSUES FACED

ISSUES IN IMPLEMENTING PRP

ACR system was in operation upto 2000-01.

Lack of objectivity in appraisal was a common complaint. This was mainly on account of the following:

No provision for performance planning at beginning of year to define WHAT is to be done and HOW MUCH?

No visible co-relation between actual performance and final assessment which was done basically on Traits & Competencies.

No provision for feedback since the system was ‘Confidential’. Individuals did not know where they stood until the time of promotions.

BACKGROUND OF MAP

STRUCTURE OF PRESENTATION

BACKGROUND

KEY FEATURES OF MAP

MAP TOOLS

ISSUES FACED

ISSUES IN IMPLEMENTING PRP

Alignment & focus Employees performance aligned to the goals of BHEL.

Objectivity Measuring performance objectively based on targets defined at the beginning of the year.

Transparency Clear, transparent process of target setting and sharing of assessment with individual.

KEY FEATURES OF MAP

Consistency Consistent application of MAP tools across the organisation (standard KRAs, Unit of measurement)

Differentiation Identifying & rewarding high performers .

Development Developing individual competence & capability required for the role

e-Enablement Web-based system linking over 100 locations, covering around 11,000 executives. Centralised monitoring for effective implementation

KEY FEATURES OF MAP

STRUCTURE OF PRESENTATION

BACKGROUND

KEY FEATURES OF MAP

MAP TOOLS

ISSUES FACED

ISSUES IN IMPLEMENTING PRP

MAP TOOLSMAP TOOLS

KRA Masters

Normalisation

e-Enabling MAP

Balanced Scorecards

Rating Scales

Differentiation Tool

TOOLS SUPPORTING VARIOUS FEATURES OF MAP

FEATURES OF MAP

MAP TOOL

Alignment 1.Scorecards: Cascading of parameters & targets from Scorecards to individual plans.

2.KRA Masters : Enables selection of appropriate KRAs linked to objectives of Company / Unit/ Deptt. Scorecard.

Objectivity 1.Performance Plan clearly defines KRAs & targets at begining of year.

2.Rating Scales : Defining five levels of performance during target setting.

3. Final assessment based on achievements against pre-defined targets.

FEATURES OF MAP

MAP TOOL

Consistency KRA MASTERS: Standard KRAs & their unit of measurement. Used by all executives across the company.

RATING SCALES: 5-point scale with targets set at all levels.

Transparency E-enablement: Sharing of entire process from Performance Planning to Final Review including final rating.

Differentiation in performance levels

Differentiating Tool (A2): To account for stretch in targets & Contribution to Group Objectives

Normalisation Tool: To convert scores into Ratings

TOOLS SUPPORTING VARIOUS FEATURES OF MAP

FEATURES MAP TOOL

Developing Individual Competencies

Development Plan Section: Identifies role based competencies for development

Centralised monitoring

E- enablement: Enables centralised monitoring & follow up for completion of activities at each level (Appraisee, Appraiser, Reviewer etc.)

TOOLS SUPPORTING VARIOUS FEATURES OF MAP

THE MAP CYCLE

THE MAP CYCLE

Performance Planning (Target setting)

Mid-year Review

Final Review

Normalisation Ongoing Feedback

Appraiser

Appraisee

April-May

October

April

May

STRUCTURE OF PRESENTATION

BACKGROUND

KEY FEATURES OF MAP

MAP TOOLS

ISSUES FACED

ISSUES IN IMPLEMENTING PRP

ISSUES FACED

PRP has made differentiation mandatory however, Managers are uncomfortable as transparency makes them answerable.

1. Tendency to give same score to majority

2. More vocal employees get better scores

3. People with softer targets get better scores

4. Assessment on absolute performance vs relative ranking in relation to other employees.

STRUCTURE OF PRESENTATION

BACKGROUND

KEY FEATURES OF MAP

MAP TOOLS

ISSUES FACED

ISSUES IN IMPLEMENTING PRP

SOME ISSUES IN IMPLEMENTING PRP

Difficult to justify NIL payment to lowest performer as he also contributes to overall Target. PRP Kitty could be distributed in two parts:

1. Company performance

2. Individual performance. Grade factor has large variation at the higher levels. Performance Factor across 5 levels will create huge

difference in pay-out within same grade affecting Team work.

Performance Rating of Directors & CMD.

Being a huge cultural shift PRP differentials should be increased gradually

Thank you

Eg. KRA- Order Booking (Rs. Crs.)

EMPLOYEEA

EMPLOYEEB

EMPLOYEEC

TARGET Rs. 5000 Crs Rs. 3000 Crs Rs. 1200 Crs

ACHIEVE-MENT

Rs. 4800 Crs Rs. 3000 Crs Rs. 1250 Crs

Assessment on absolute performance

Below expectation

Met expectation

Exceeded expectation

Relative ranking

1 2 3

CASCADE OF PERFORMANCE MEASURES THRU’ BALANCED SCORECARDS

Departmental Measures & Targets

BHEL’s Performance Measures and Targets

Financial Customer

Process Capability

Sector Performance Measures & Targets

Financial Customer

Process Capability

Corporate Department & FunctionPerformance Measures & Targets

Financial Customer

Process Capability

Unit Performance Measures & Targets

Financial Customer

Process Capability

Product Groups Materials Planning Other ServicesSupport Services

Financial Customer

Process Capability

Financial Customer

Process Capability

Financial Customer

Process Capability

Financial Customer

Process Capability

Financial Customer

Process Capability

Measures

1.2.3.4.

Targets

1.2.3.4.

Measures

1.2.3.4.

Targets

1.2.3.4.

Measures

1.2.3.4.

Targets

1.2.3.4.

Measures

1.2.3.4.

Targets

1.2.3.4.

Measures

1.2.3.4.

Targets

1.2.3.4.

Measures

1.2.3.4.

Targets

1.2.3.4.

Measures

1.2.3.4.

Targets

1.2.3.4.

Measures

1.2.3.4.

Targets

1.2.3.4.

Measures

1.2.3.4.

Targets

1.2.3.4.

Measures

1.2.3.4.

Targets

1.2.3.4.

Measures

1.2.3.4.

Targets

1.2.3.4.

Measures

1.2.3.4.

Targets

1.2.3.4.

Measures

1.2.3.4.

Targets

1.2.3.4.

Measures

1.2.3.4.

Targets

1.2.3.4.

Measures

1.2.3.4.

Targets

1.2.3.4.

Individual & Team Measures

STRATEGY MAP & MOU

Company BSC

Unit BSC

Deptt.BSC

Indl.Plans

1. Exhaustive list of Key Result Areas identified in 24 functions to enable executives prepare their plans.

2. Standard unit of measurement fixed for each KRA for uniformity in measurement.

3. KRAs classified into Operational and Capability building categories.

KRA MASTERS

MAP TOOLS

What gets measured get done

TOOL FOR DIFFERENTIATION

Factoring in softer & intangible aspects of Performance in the overall assessment

• Quality of work• Cost Consciousness• Process Orientation• Contribution to overall objectives of the Group

No two individuals within a group can have the same aggregate score on the above factors – system driven check

MAP TOOLS

3Meets

Expectations

2Moderately

BelowExpectation

4Moderately

AboveExpectations

1Significantly

Below Expectations

5Significantly

AboveExpectations

• A 5-point scale to assess the extent of achievement on KRA targets.

• Used during Target Setting for each KRA.

• The required level of achievement for each of the other four ratings are also defined.

RATING SCALES

MAP TOOLS

NORMALISATION

Process of categorising individuals within a department into E / VG / G / F / P, based on Performance Scores.

Principle of ‘Normal distribution’ used to define the percentage in each category.

MAP TOOLS

NORMALISATION MATRIX

1 2 3 4 5

E 5% 10% 10% 15% 20%

VG 10% 15% 20% 25% 30%

G 35% 35% 40% 35% 35%

F 30% 25% 20% 15% 10%

P 20% 15% 10% 10% 5%

100% 100% 100% 100% 100%Ind

ivad

ual

Rati

ng

Company / Unit / Department Ratings

NORMALISATION

It ensures alignment between individual ratings and performance of the Company, Unit & Deptt.

- Percentage of high performers (Rating ‘E’) in a Deptt. that has achieved its performance objectives is greater than the percentage of high performers in a Deptt. which has not fully achieved its performance objectives.

- Percentage of high performers in a year in which the company has met its objectives is greater than the year when the company has not fully achieved its objectives.

MAP TOOLS

KRA  

Implementation of Special Improvement Projects taken under IMPRESS

Item Weightage (%)    5

Level 5 4 3 2 1

Target  0.0  30.0  45.0  60.0  75.0

Unit of Measurement  No. of days delayed from scheduled date 

Scheduled Date 31-03-11

Action Plan, Resources, Assumptions and Milestones  

To complete and sucessfully implement the project within schedule date. MILESTONE: 31st MARCH 2011 

Special Improvement Project Conversion of Long seam welding machine to Cirseam welding machine(OD3)

KRA  

Shop turnover (Physical & / or Financial)

Item Weightage (%)    20

Level 5 4 3 2 1

Target  10169.0  8000.0  7000.0  6000.0  5000.0

Unit of Measurement  Money value/ Numbers/ Tonne. 

Action Plan, Resources, Assumptions and Milestones  

1.Proper planning of men, machine & materials. 2. Preparation of weekly schedule and adherence to it. 3. Conducting periodic review. 4. Monitoring the daily output. RESOURCES: 1.Availablity of materials. 2. Skilled manpower. 3. Availability of documents. ASSUMPTIONS: 1.All MCL in time. 2. All the documents in time. 3. All the machines will work effectively.

Unit Name

Plan submitted by

Appraisee

Plan approved by Apprai

ser

Plan approved by Reviewer

Self Apprai

sal submitted by

Appraisee for Mid year

review

Mid year Revie

w discussion

documented

by Apprai

ser

Self Apprai

sal submitted by

Appraisee for

Final review

Final Revie

w done

by Apprai

ser

Final Revie

w accepted by apprai

see

Final Revie

w accepted by Reviewer

Part-B completed

by AA

(No.) (No.) (No.) (No.) (No.) (No.) (No.) (No.) (No.) (No.)

                   

CORPORATE OFFICE

297 297 297 0 0 2 0 0 0 0

BHOPAL 1309 1309 1309 0 0 8 7 3 2 0

EDN BANGALORE

686 686 686 0 0 2 2 2 0 0

CMG 4 4 4 0 0 0 0 0 0 0

CENTRAL STAMPING UNIT

26 26 26 0 0 1 0 0 0 0

EPD BANGALORE

94 94 94 0 0 0 0 0 0 0

Performance Cycle Tracker – Unit-wise Summary

Staff No Staff Name

Current Phase

Current Status

Pending With Accepting Authority (AA)

3793257 P.K. Biswas

PLANNING Performance Plan approved by reviewer

  2104709, E9, Shri A V Krishnan, GENERAL MANAGEMENT, HPBP TRI

2171880 SHRI Nirmal Kumar Narjari

PLANNING Performance Plan approved by reviewer

  2104709, E9, Shri A V Krishnan, GENERAL MANAGEMENT, HPBP TRI

2067080 SHRI Ramachandran

ENDYEAR Final Review is under final approval by reviwer

SHRI KUMAR R (E8)

null

Performance Cycle Tracker Report

KRA  

Cycle time reduction for a product / assembly/Proces

Item Weightage

(%)    10

Level 5 4 3 2 1

Target  10.0  8.0  6.0  4.0  2.0

Unit of Measurement  % reduction 

Action Plan, Resources, Assumptions and

Milestones  

1. To study the cir seam welding Process. 2. To train the existing welders for tandem welding. 3. To arrange necessary facilities and resources in time with the help of WTC

KRA  

Number of fresh welders qualified for additional position and customers

Item Weightage

(%)    10

Level 5 4 3 2 1

Target  15.0  10.0  8.0  6.0  4.0

Unit of Measurement  Number 

Action Plan, Resources, Assumptions and

Milestones  

Action plan: Planned to qualify 15 welders in IBR. Resources: WTC with all facilities to impart training. Milestone: 31st March 2011 

Bucket I

Unit Name

Unit Score

Unit Rating

1 Unit 1 4.85 5

2 Unit 2 4.85 53 Unit 3 4.75 4

4 Unit 4 4.74 4

5 Unit 5 4.74 4

6 Unit 6 4.68 4

7 Unit 7 4.68 4

8 Unit 8 4.67 3

9 Unit 9 4.45 3

10 Unit 10 4.40 3

11 Unit 11 4.35 3

12 Unit 12 4.30 3

Level 5=1.2 = 2 units

Level 4=4.8 = 5 units

Level 3=4.8 = 5 units

Assigning ratings to Units

Distribution of NCs Performance Cycle

Unit Total No. of NCs

Level 5 Level 4 Level 3 Level 2 Unit Score

Unit Rating

Unit 2

16 3.2 7.2 4.8 0.8 4.85 5

Rounded off to 4 NCs 8 NCs 4 NCs -

Assigning ratings to NCs within Units

Unit 2 : Rating 5

Sl. No. NC NC Score

NC Rating

1 NC 1 4.95 5

2 NC 2 4.95 5

3 NC 3 4.94 5

4 NC 4 4.92 5

5 NC 5 4.91 4

6 NC 6 4.91 4

7 NC 7

4.91 4

8 NC 8 4.91 4

9 NC 9 4.9 4

10 NC 10

4.9 4

11 NC 11

4.9 4

12 NC 12

4.89 4

13 NC 13

4.88 3

14 NC 14

4.88 3

15 NC 15

4.85 3

16 NC 16

4.06 3

Level 5=3.2 = 4 NCs

Level 4=7.2 = 8 NCs

Level 3=4.8 = (5) 4

NCs

Level 2=0.8 = (1) Nil

Assigning ratings toNCs within Units….contd

NC 7 : NC Score 4.91; NC Rating 4

BSC Holders NC

Name Grade MAP Score

Final Rating

1 Mr A E6A 4.92 A+

2 Mr B E6 4.9 A+

3 Ms C E& 4.89 A

4 Ms D E7 4.88 A

5 Mr E E6 4.85 A

6 Mr F E6 4.85 A

7 Mr G E6A 4.8 B+

8 Ms H E7 4.8 B+

9 Mr I E6A 4.752 B+

10 Mr J E7 4.704 B

Level 5 = 2 executivesLevel 4 = 4 executivesLevel 3 = 3 executivesLevel 2 = 1 executive

The system cannot run Normalisation rationally for small populations. Hence distribution into Ratings has been done manually using standard tables for BSC NCs.

Creating the BSC holders NC

NC 7 : NC Score 4.91; NC Rating 4

NC for KRA population

Name Grade MAP Score

Final Rating

1 Mr A E4 5 A+

.. Mr B E6 5 A+

6 Ms D E1A 5 A+

7 Ms E E3 5 A

… Mr J E4 5 A

16 Mr L E2 4.993 A

17 Mr M E2 4.94 B+

… Ms Q E2 4.925 B+

30 Mr S E6A 4.915 B+

31 Mr T E5 4.91 B

… Mr U E5 4.7916 B

36 Mr X E2 4.35 B

37 Mr Y E3 3.5145 C

38 Mr Z E1A 3.5 C

Ratings are assigned by the system

A+ = 6 executives

A = 10 executives

B+ = 14 executives

B = 6 executives

C = 2 executives

Normalisation of KRA holders