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NTPC LIMITED PERFORMANCE MANAGEMENT SYSTEM
NTPC LIMITED
PERFORMANCE MANAGEMENT SYSTEM
Objectives of NTPC’s 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
Development of Strategic GoalsAt the Top Leadership Level
Cascading Down of Goals at the ExecutiveDirector and General Manager/BUHs Level
Cascading Down of Goals at the Head of Department Level and other levels below
Strategy Plans & Memorandum of Understanding
Linking Strategy With Performance
Management
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
AnnualAssessment
Normalisation Process
PMS Process
Step 1
• Identify KPAs, constituents, weightages, measures and targets
• Identify functional and managerial competencies for the appraisee
• Communication of score
• Developmental feedback Step 5
Step 4
Step 3
Step 2
PACE Cycle (Important Dates)
Stages of PACE E1 to E5 E6 & above
Performance Planning 1st to 25th January 1st to 25th April
Mid Year Review 1st to 15th July 1st to 15th October
Annual Assessment 15th Dec to 7th Jan 1st to 25th April
Normalization 15th to 31st January 1st to 25th May
Communication of scores 7th February 31st May
Step #1: Performance Planning
Company Goals
Unit Goals
Functional / Departmental
GoalsIndividual 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 prioritizedIndividual performance is enhanced by clear
definition of deliverablesRole of individuals is clarified within overall
organizational context
Why is it critical?
Process StepsKPA Setting Process
Corporate PlanCorporate Plan
Special TasksSpecial Tasks
InitiativesInitiatives
MOUsMOUs
Principles of Formulating Key Performance Areas
• The critical few areas which define the employee’s contribution towards achievement of organizational objectives
• They are to be derived from MoU, functional plan, plant level plan, supervisor’s priorities etc.
• Select KPAs where there is greater element of control.
• KPAs of managers in a chain are linked to a large extent. Thus, many managers have the interest to support a manager’s KPAs.
Define Job Families Define Roles Develop KPAs
A KPA based Performance Management System plays a critical role in achieving business strategy
• Achieve Business Strategy and Goals– Communicate the strategy, goals and management priorities to the
organisation– Provide a vehicle to align the objectives, actions and behaviour of
employees with the overall objectives of the organisation• Provide control to management
– Track progress towards goals– Assign responsibility and accountability– Provide “early warning” to top management
• Enable the organisational and individual improvement process– Gather data to measure performance– Identify areas that need improvement– Provide objective feedback and facilitate learning
A KPA based Performance Management System provides the “rudder” which management requires to “steer the ship”
Define Job Families Define Roles Develop KPAs
• Vertical & horizontal interdependence• Area of self-responsibility
Common AreaOf Responsibility
Self-Responsibility
EDsEDs
GMGM
AGMAGM
The Nature of KPAs
Define Job Families Define Roles Develop KPAs
FULLFULLCONTROLCONTROL
NO CONTROLNO CONTROL
PARTIAL PARTIAL CONTROLCONTROL
The Nature of KPAs: Three Types of Areas at the Workplace
Define Job Families Define Roles Develop KPAs
Type of KPAs
• Numeric–PLF, 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
IMPORTANCE
LOW HIGH
URGENCY
LOW
HIGH
The Nature of KPAs
ACTIVTY TRAP
ACTIVTY TRAP
FIREFIGHTING
FIREFIGHTING
KPAsKPAs(20% Activities(20% Activities
Lead to 80%Lead to 80%Results)Results)
KPAsKPAs(20% Activities(20% Activities
Lead to 80%Lead to 80%Results)Results)
EMERGENCYEMERGENCY
NORMS FOR KPAs
TO BE DRAWN FROM THE BUSINESS PLANS AS FAR AS POSSIBLE.
THE NO. OF KPA INDICES SHOULD NOT BE MORE THAN EIGHT & THE NO.
OF CONSTITUENTS OF KPAs SHOULD NOT EXCEED 24 IN ALL INCLUDING
THE COMMON INDICES.
THE UNIT OF MEASUREMENT FOR ANY KPA CAN ONLY BE ONE OF THE
THREE ,VIZ., % , TIME , Nos.
EACH KPA SHOULD CARRY AT LEAST 3 MARKS
NO KPA CONSTITUENT SHOULD HAVE MARKS IN DECIMALS SUCH AS 3.5
OR 4.5.
EVERY EXECUTIVE TO HAVE ATLEAST TWO COMMON INDICES. THE
MINIMUM MARKS FOR COMMON INDICES AT VARIOUS LEVELS SHOULD
BE AS FOLLOWS.
Performance Planning
Performance Planning is done through
a process of discussion between
executive and the reporting officer to
arrive at the performance targets for
the Key Performance Areas (KPAs)
Company Goals
Unit Goals
Functional / Departmental
Goals
Individual Goals
KPA Setting Process
Corporate PlanCorporate Plan
Special TasksSpecial Tasks
InitiativesInitiatives
MOUsMOUs
Identify the KPAs, their constituents (Activities), measures for each constituent, marks and three different performance (target) levels. While filling the form, the guidelines need to be kept in mind.
KPA directory available for reference
Performance Planning
Example of KPAs: Coal Mining – CBA Act 1957 (L3): Site
SNo KPA indices with marks
Constituents of the KPA index Measure Weightage of constituents
Target performance levels
Stretch (100%)
Intermediate (80%)
Base (60%)
1 Application & Notifications
Index
Collection of relevant data (Khatian, Maps, etc) (Section 4)
Time
Preparation of land plan and land schedule (Section 4)
Time
Submission of land plan & land schedule to CC (Section 4)
Time
Preparation of Land Plan (Village wise, Plot details) (Section 7)
Time
Freezing of Block Boundary (Section 7) Time
Verification of plot details (Section 7) Time
Submission of land plan to CC (Section 7) Time
Collecting data of nature and the extent of the land to be acquired (Section 9)
Time
Submission of data to CC (Section 7) Time
Liaisoning for Section 10 Time
Performance Planning
Assigning Weightage
• Understanding the Relative Importance of Each Key Performance Area.
• Understanding the Difficulty of Each Key Performance Area.
• Understanding Superior’s Perspective.• Discussing Weightage with the Superior.• Convert the Weightage of Each KPA for the
Different Levels of Performance.
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
Competencies are defined under two heads: Functional and Managerial
A combination of the skills, knowledge and behaviors that are critical to the success of the organization and the achievement of individual
performance goals
A combination of the skills, knowledge and behaviors that are critical to the success of the organization and the achievement of individual
performance goals
Competencies
Types of Competencies Functional Managerial
• Competencies that are required for success in a particular function or job family
• Typically involve demonstrating technical/expert knowledge
• Behavioral in nature• Generally relevant to all
employees
Benefits of defining
Competencies for each role
• The opportunity to link HR systems with business objectives• A common language to define the skills, knowledge and behaviors
required for successful performance in positions across the organization
• An integrated approach to people issues–Recruitment, PMS, Training etc.
• Improved quality of information on people within the organization
Job families have been defined on the basis of the roles performed by different departments within a
functionDefine Job Families
Define functional competencies
Define Roles
IllustrativeElectrical
Maintenance(Head)
Main Plant
Transformers and switch
yard maintenance
Electrical testing
Coal Handling
Plant
High tension Switch Gears
Mot
ors
Level
L1 E6 – E7
L2 E5 – E6
L3 E1 – E5
Typical Grade (1)
Low tension Switch Gears
Transformers and switch
yard maintenance
Electrical testing
High tension Switch Gears
Motors
Low tension Switch Gears
Note: (1) Actual grade varies from plant to plant depending up on size of the plant and experience of individual
ES
P
Gen
erat
or
Roles and functional competencies – Electrical Maintenance (Head)
Illustrative
Role• Ensure high availability of all electrical equipment and systems in the power plant• Minimise cost of electrical maintenance of the plant• Supervision of maintenance measures in electrical maintenance division and ensuring quality of maintenance• Ensure availability of spares and other infrastructure for maintenance• Minimise response time to the customer (i.e. Operations) for handling routine day-to-day problems• Optimise equipment lifecycle cost• Ensure compliance with safety requirements• Optimise Mean Time Between Failure (MTBF) and Mean Time To Repair (MTTR)• Plan resource requirements for electrical maintenance– manpower, materials and contracts• Network with other electrical maintenance teams in the plant and at other locations to capture learning• Coordination with R&M for equipment upgradation
Functional competence requirement• Technical knowledge of all electrical machines and equipment (e.g. generator, motors, transformers, switch gears, relays etc.)• Understanding of working and history of equipment• Knowledge of standard operating procedures with respect to maintenance of main plant, transformers, switch yard and coal
handling plant• Technical trouble shooting• Knowledge of safety requirements• Awareness of suppliers of material and services for electrical maintenance• Knowledge of power generation process• Knowledge of modern maintenance management practices and of NTPC’s Maintenance Management Systems• Spares inventory management• Knowledge of statutory guidelines related to electrical equipment
Cross functional competence requirement• Knowledge of Engineering, Erection and Operations functions• Knowledge of Mechanical, C&I and Civil Maintenance• Knowledge of Finance, HR, IT and C&M
Managerial Competencies
M – Mandatory Competencies, Other shaded boxes – Optional Competencies of which 3 need to be selected for assessment
S No Competency E1-E5 E6-E7 E7A-E8 E9
1 Analytical Ability M
2 Learning M
3 Team Player M
4 Communication Skills M
5 Managerial Effectiveness D M
6 Team Building M
7 Decision Making D M
8 Business Attitude M M
9 Leadership M M
10 Vision and Strategic Thinking M
11 Resource Management and Administrative Ability
12 Interpersonal Skills D
13 System Orientation
14 Innovation and Creativity
15 Adaptability
16 Empowering and Motivational Ability
17 Cost Consciousness
18 Quality Consciousness
Total 11 (08) 11 11 10
Performance Planning
Managerial/Executive Competencies
• Reporting officer and executive to choose three competencies in addition to mandatory competencies based upon direct and significant relevance to the executive’s area of responsibilities
• Mandatory competencies and the basket available depends on the level of executive
Performance Planning
Core Values
Assessment to be done at the end of the year
Potential Competencies
E1-E5 E6-E7 E7A-E8 E9Leadership Leadership Leadership Corporate
citizenship
System Orientation
System orientation
Networking and relationship management
Networking and relationship management
Resource Management and admin ability
Resource management and admin ability
Coaching and counseling
Coaching and counseling
Team Building Business Attitude
Vision and Strategic Thinking
Change management
Competencies – assessment levels
• Needs development ( 1-4);
• Meets expectations (5-6);
• Moderately above expectations (7-8);
• Significantly exceeds expectations (9-10).
Step #2: Mid-year Review
Why is it critical?
Performance management is not an event but an ongoing process
Helps in objective annual evaluation – Provides early warnings of non-
performance; avoids year end surprises– Opportunity to revisit KPAs, change
weightages or measures– Reinforces good performance in time– Provides an opportunity for appraisee
to express his thoughts on progress made and roadblocks encountered
• Appraiser and appraisee to discuss
changes in KPAs, if necessary• All KPAs to be re-filled in the form if
any changes are made in either the
KPAs, weightages or targets• Justification for change to be
documented• Self appraisal to be completed• Appraiser to document mid year
discussion
Process Steps
Guidelines for changing KPAs in the mid year
• Change in roles and responsibilities of appraisee (transfer, additional role etc.)• Changes in organisational goals
• Unanticipated projects• Abandonment of project as per corporate directive
• Situations beyond control of the appraisee such as accident or emergency situations
Step #3: Annual Assessment
Why is it critical?
Formal process to ensure performance is assessed annuallyOpportunity for reviewing officer to offset rating biasesProvides inputs for other HR systems:
• Rewards and Incentives• Career Development • Training and Development
• Evaluate performance against KPAs by comparing actual performance to targets set
• Evaluate • Functional/technical competencies (chosen at the
beginning of the year)• Managerial competencies (3 mandatory and 3
optional)• Values & Potential
• Complete section on Special Achievements• Transfer scores from all sections to the section on Total Marks for consolidation
• Complete Individual Training and Development Plan
Process Steps for Appraiser and Appraisee
• Review the marks given for each section by the appraiser – check for overrating or underrating
• Hold discussion with appraiser in case changes in scores are required
• Rationale for changes in scores must be documented on PMS form
• Reviewing officer and appraiser sign-off on the PMS form
Process Steps for Revng Officer
The reporting officer is to invite the concerned executive to participate in the annual assessment.
Annual Assessment
During annual assessment marks to be provided for the following:
Annual Assessment
• KPAs
• Functional/Technical competencies (to be evaluated on 10 point scale)
• Managerial/Executive competencies (to be evaluated on 10 point scale)
• Values (to be evaluated on 10 point scale)
• Potential competencies (to be evaluated on 10 point scale)
Special achievements to be filled
Individual training & development plan also
needs to be filled
Annual Assessment
Step #4: Normalization ProcessObjectives of Normalization Process• Ensure parity and integrity by minimizing rater variation across various
departments• Enhance objectivity and transparency in the appraisal system
PMS scores from
Appraiser
Top 30%Middle 65% Bottom 05%
Final Output
Reviewer to check
integrity
Performance Management Committee
• Plot distribution of scores for the cluster to check for skewing within and across departments• Checks to be made whether employees have been overrated or underrated on various PMS parameters such as:
• KPA assessment• Competencies, Values and Potential assessment
• Make suitable adjustments to scores, where necessary, • Scores (revised and unchanged) and reasons for moderation to be documented in PMS form• All appraisees in the cluster must be categorized into Top 20%, Middle 70% and Bottom 10%
Process Steps of Normalization
Depending upon the grade and location, employees would be normalized either at the Plant, RHQ or CC
Grade Posted at To be normalized at
E1-E4(to be normalised together)
Plants, Projects Plant/ Project
RHQ RHQ
CC CC
E5 Plants, Projects Plant/ project
RHQ RHQ
CC CC
E6 Plants, Projects, RHQ
RHQ
CC CC
E7, E7A, E8 and E9 Plants, Projects, RHQ, CC
CC
Normalization
Principles of Normalization
• Cluster of different departments have been created (at various levels) for effective normalization of performance
• Minimum size of 15 executives in a cluster for performance normalization
• Departments with affinities have been congregated to form clusters
• Depending upon the level, location and the number of executives in the given level function, clusters would be either at the plant, RHQ or CC level
• The PACE reports of executives who have been transferred during the course of an assessment year shall be normalized at the place of posting where he/she is working as on the last day of the relevant assessment cycle
Example of Cluster
The performance scores finalized by the Performance Management Committee and the categorization at the end of the normalization
process are final
Linkage of PMS to other HR systems
Top 30%Middle 65% Bottom 05%
Outputs of PMS
PMS
Competency Assessment and
Development Plans
• Rewards System - Differential individual rewards
for each category• Career Development System – PMS scores and
relative rankings are one of the key inputs for the
CDS
• Training and Development System – Inputs for
designing of training programmes
• Career Development System – Competency
profiles of employees would provide inputs for job
rotation and placement decisions
Linkage with other HR Systems
Step #5: Communication of Score and Developmental Feedback
Appraisers to be provided training on performance feedback and counseling skills
Appraiser
Employee
Human Resources
Performance Management Committee Output • Performance Management
Committee output to be sent to HR• Final individual scores• Relative ranking• Rationale for any changes
made• HR to consolidate final scores, relative ranking and feedback from Performance Management Committee for all employees
• HR to send final score sheet with relative ranking and feedback from Performance Management Committee (if any) to respective appraisers
• Appraisers to communicate final score, relative performance as well as developmental feedback to appraisee
Process Steps
• Final Score • Relative Ranking (Top
20%; Middle 70%; Bottom 10%)
• Developmental Feedback
Snapshot of the Contents of the PMS Policy Manual Objectives•PMS Process
–Performance Planning -MYR–Annual Assessment -Normalisation–Feedback, Coaching and Counselling
•PMS Linkage with Other HR Systems•PMS Form
–Performance Planning–Mid-Year Review–Assessment
•Normalisation Process, Clusters and Constitution of Performance Management Committees
Applicability:PMS Policy would be applicable to:• All Executives of NTPC (E1-E9)• Executives on deputation joining
NTPC or those retaining lien while in service of NTPC
• For those joining in the middle of assessment period with minimum service of 3 months during the period
PMS calendar for E1 to E5Process Activity Target Dates Responsibility
Performance Planning
Issue of PMS Forms Ist Dec. –15th Dec. HR Department
Performance Planning 1st Jan. - 25th Jan ExecutiveReporting officer
Submission to HR 30th Jan. Reporting officer
Mid Year Review
Issue of PMS Form for Mid-year Review
20th June- 30th June
HR Department
Mid Year Performance Review 1st –15th July ExecutiveReporting officer
Submission to HR 21st July Reporting officer
Annual Assessment
Issue of PMS Form for Annual Assessment
Ist Dec. –15th Dec. HR Department
Annual Assessment 15th Dec. – 7th Jan. ExecutiveReporting officer Reviewing Officer
Submission to HR 12th Jan. Reviewing officer
Normalisation Normalisation 15th Jan- 31st Jan. Performance Management Committee
Feedback Performance Communication and Feedback
15th Feb. Reporting officer (admin support from HR)
System of Appeal
• Incase of grievance on the individual performance
scores finalized by the performance management
committee (PMC), the grievance can be directly put up
to an appellate authority (ies) which is one level above
the PMC with a copy to concerned HR.
• Only such cases where change of marks is equal to or
more than 5% of that awarded by the Reporting Officer
shall be eligible for appeal
Review by Head of Deptt.Location Level 2nd Review level
Project/ Plants
E1 – E4 Head of the department (PMC Member).
Project/ Plants
E5 Head of Plant/ Project to review
RHQ E1 to E4 Same as in the case of Plant/ Project
RHQ E5 Regional ED to review
CC E1 to E4 Head of the department.
CC E5 Head of the department of minimum E8 level.
All locations E6 Head of the department of minimum E8 level.
All locations E7/E7A ED of Region / Functional ED to review.
