Parle Tilak Vidyalaya Associations Institute of Management

SUBJECT- HUMAN RESOURCE MANAGEMENT TOPIC- Performance Management System FY-MMS (Sem-II) DIV B SUBMITTED TO: PROF - MRS. TRUPTI GUPTE SUBMITTED BY:
Mohd. Shoaib Ajinkya More Natarajan Nadar Debashish Phanse Tushar Sathe Pratik Sawant 89 90 93 97 103 104

UNIVERSITY OF MUMBAI

ACKNOWLEDGEMENT

As a part of the curriculum stipulated by the Mumbai University, we had taken up the project of visiting three companies in different sectors (Manufacturing, FMCG & IT Industry) to know the process of performance management system.

We are highly thankful to MRS. TRUPTI GUPTE for having offered us the privilege of doing projects at these companies.

We would like to express our sincere heartfelt gratitude towards our project guide.

Prof. MRS. TRUPTI GUPTE for her invaluable guidance, support and constant encouragement which have been instrumental in shaping the project as it is today.

Mr. Mohd. Shoaib Mr. Ajinkya More Mr. Natarajan Nadar Mr. Debashish Phanse Mr. Tushar Sathe Mr. Pratik Sawant

(2011-2012)

IOCL Company Profile:

Indian Oil is India's flagship national oil company with business interests straddling the entire hydrocarbon value chain from refining, pipeline transportation and marketing of petroleum products to exploration & production of crude oil & gas, marketing of natural gas and petrochemicals. It is the leading Indian corporate in the Fortune 'Global 500' listing, ranked at the 98th position in the year 2011. With over 34,000-strong workforce, Indian Oil has been helping to meet Indias energy demands for over half a century. With a corporate vision to be the Energy of India, Indian Oil closed the year 2010-11 with a sales turnover of Rs. 3,28,744 crores ($ 72,125 million) and profits of Rs. 7445 crores ($ 1,633 million). At Indian Oil, operations are strategically structured along business verticals - Refineries, Pipelines, Marketing, R&D Centre and Business Development E&P, Petrochemicals and Natural Gas. To achieve the next level of growth, Indian Oil is currently forging ahead on a well laid-out road map through vertical integration upstream into oil exploration & production (E&P) and downstream into petrochemicals and diversification into natural gas marketing and alternative energy, besides globalization of its downstream operations. Having set up subsidiaries in Sri Lanka, Mauritius and the United Arab Emirates (UAE), Indian Oil is simultaneously scouting for new business opportunities in the energy markets of Asia and Africa.

Tata Consultancy Services Limited (TCS)

Tata Consultancy Services Limited (TCS) is a global IT services, business solutions and outsourcing company headquartered in Mumbai, India and a subsidiary of the Tata Group conglomerate. It is the second-largest India-based provider of business process outsourcing services. TCS has been ranked #20 in the list of top companies of India, by Fortune India 500 magazine. It is the largest technology service company in India by revenue and market capitalization. TCS has 142 offices across over 47 countries and generates around 30 per cent of India's IT exports

History
It began as the "Tata Computer Centre", for the company Tata Group whose main business was to provide computer services to other group companies. F C Kohli was the first general manager. J. R. D. Tata was the first chairman, followed by Pankaj Roy. One of TCS' first assignments was to provide punched card services to a sister concern, Tata Steel (then TISCO). It later bagged the country's first software project, the Inter-Branch Reconciliation System (IBRS) for the Central Bank of India. It also provided bureau services to Unit Trust of India, thus becoming one of the first companies to offer BPO services.

Recognition
As a brand, TCS is the 76th Most Trusted Brand according to The Brand Trust Report, 2011.TCS has been ranked as the world's 7th greenest company in Newsweek's Green Rankings 2011. In addition, TCS is the highest ranked Asia-based company and second highest ranked globally in the Information Technology & Services company category.

Godrej Boyce & Soaps Profile:

INCORPORATION Established in 1897, the Company was incorporated with limited liability on March 3, 1932, under the Indian Companies Act, 1913. VISION Godrej in Every Home and Workplace MISSION Enriching Quality of Life Everyday Everywhere VALUES Integrity Trust To Serve Respect Environment In 1897 a young man named Ardeshir Godrej gave up law and turned to lock-making. Ardeshir went on to make safes and security equipment of the highest order, and then stunned the world by

creating toilet soap from vegetable oil. His brother Pirojsha Godrej carried Ardeshir's dream forward, leading Godrej towards becoming a vibrant, multi-business enterprise. Pirojsha laid the foundation for the sprawling industrial garden township now called Pirojshanagar in the suburbs of Mumbai, where the Godrej Group has its headquarters. Godrej & Boyce Mfg. Co. Ltd., the holding company of the Godrej Group, started its journey with the manufacture of high quality locks in 1897. Today, we have 15 diverse business divisions offering consumer, office, and industrial products and services of the highest quality to every corner of India and across the globe. Our Businesses: Appliances AV Solutions (Prima) Construction Electricals & Electronics Furniture (Interio) Lawkim Motors Locks Material Handling Precision Engineering Precision Systems Process Equipment Security Solutions Storage Solutions Tooling Vending (Prima) We value integrity, trust, service and respect for individuals and for the environment. We pride ourselves for being one of Indias most respected corporate houses known for our philanthropy and initiation of labor reforms besides being recognized for our fair, transparent and ethical dealings. Our people are our assets who are groomed to deliver their best. What makes us special? At Godrej, its more than a career. Its an opportunity to live your dreams and be part of a culture that nurtures ambition, challenges and provides freedom to operate and express your ideas. The Godrej Group touches the lives of 400 million Indians who use at least one of our products every single day. Our commitment to quality, attention to detail and customer centricity has helped us earn the trust of generations of Indians. EMPLOYEES 11,000 (including 2,000 in Sales and Service)

Objectives & Study:

Literature Review:
A good performance management system works towards the improvement of the overall organizational performance by managing the performances of teams and individuals for ensuring the achievement of the overall organizational ambitions and goals 1. Performance Management A management process for ensuring employees are focusing their work efforts in ways that contribute to achieving the agencys mission. It consists of three phases: (a) Setting expectations for employee performance (b) Maintaining a dialogue between supervisor and employee to keep performance on track and (c) Measuring actual performance relative to performance expectations. 2. Work plan A document that describes the work to be completed by an employee within the performance cycle, the performance expected, and how the performance will be measured. 3. Corrective action plan A short-term action plan that is initiated when an employees performance fails to meet expectations. Its purpose is to achieve an improvement in performance. 4. Individual development plan An action plan for enhancing an employees level of performance in order to excel in the current job or prepare for new responsibilities. 5. Performance Appraisal A confidential document that includes the employees performance expectations, a summary of the employees actual performance relative to those expectations, an overall rating of the employees performance, and the supervisors and employees signatures. 6. Performance Documentation A letter, memo, completed form, or note on which the supervisor indicates the extent to which the employee is currently meeting expectations and provides evidence to support that conclusion. 7. Fair appraisal Appraising employees in a manner that accurately reflects how they performed relative to the expectations defined in their work plan and in a manner that is not influenced by factors irrelevant to performance.

Advantages of PMS:
1. Performance Based Conversations: Managers get busy with day-to-day responsibilities and often neglect the necessary interactions with staff that provide the opportunity to coach and offer performance feedback. A performance management process forces managers to discuss performance issues with employees. It is this consistent coaching that affects changed behaviors and employee development. 2. Targeted Staff Development: If done well, a good performance management system can be a positive way to identify developmental opportunities and can be an important part of a succession planning process. All employees are on a development journey and it is the organizations responsibility to be preparing them for increased responsibility. 3. Encouragement to Staff: Performance appraisals should be a celebration of all the wonderful things an employee does over the course of a year and should be an encouragement to staff. There should be no surprises if issues are addressed as they arise and not held until the annual review. 4. Rewards Staff for a Job Well Done: If pay increases and/or bonuses are tied to the performance appraisal process, staff can see a direct correlation between performance and financial rewards. This motivates and encourages employees to perform at higher levels. 5. Under-Performers identified and eliminated: As hard as we try, it is inevitable that some employees just wont cut the mustard as they say. An effective performance appraisal process can help identify and document underperformers, allowing for a smooth transition if the relationship needs to be terminated. 6. Documented History of Employee Performance: It is very important that all organizations keep a performance record on all employees. This is a document that should be kept in the employees HR file. 7. Allows for Employee Growth: Motivated employees value structure, development and a plan for growth. An effective performance management system can help an employee reach their full potential and this is positive for both the employee and manager. A good manager takes pride in watching an employee grow and develop professionally. Organizations should take a global look at their performance management system and have very objective goals that are tied to strategic initiatives and the performance management process. Successful organizations have learned the secret to this and while not always perfect, a constant striving to improve the process can help organizations reach their Vision.

Disadvantages of PMS:
1. Time Consuming: It is recommended that a manager spend about an hour per employee writing performance appraisals and depending on the number of people being evaluated, it can take hours to write the departments PA but also hours meeting with staff to review the PA. Ive know managers who had 100 plus people to write PAs on and spending weeks doing it. 2. Discouragement: If the process is not a pleasant experience, it has the potential to discourage staff. The process needs to be one of encouragement, positive reinforcement and a celebration of a years worth of accomplishments. It is critical that managers document not only issues that need to be corrected, but also the positive things an employee does throughout the course of a year, and both should be discussed during a PA. 3. Inconsistent Message: If a manager does not keep notes and accurate records of employee behavior, they may not be successful in sending a consistent message to the employee. We all struggle with memory with as busy as we all are so it is critical to document issues (both positive and negative) when it is fresh in our minds so we have it to review with the employee at performance appraisal time. 4. Biases: It is difficult to keep biases out of the PA process and it takes a very structured, objective process and a mature manager to remain unbiased through the process. Performance appraisal rater errors are common for managers who assess performance so understanding natural biases is important to fair evaluations.

Benefits of PMS:
Managing employee or system performance facilitates the effective delivery of strategic and operational goals. There is a clear and immediate correlation between using performance management programs or software and improved business and organizational results.

Benefits may include: 1. Improved business profits: Grow sales Reduce costs in the organization Stop project overruns Aligns the organization directly behind the CEO's goals Decreases the time it takes to create strategic or operational changes by communicating the changes through a new set of goals

2. Increased employee responsibility: Communicating realistic but challenging job expectations and making employees accountable for their decisions and actions result in noticeable improvements in employee tardiness, absences, and organizational commitment.

3. Motivated workforce: Optimizes incentive plans to specific goals for over achievement, not just business as usual Improves employee engagement because everyone understands how they are directly contributing to the organizations high level goals Create transparency in achievement of goals High confidence in bonus payment process Professional development programs are better aligned directly to achieving business level goals

4. Equitable treatment of employees: All employees are treated fairly by implementing standardized procedures that promote consistency throughout an organization.

5. Improved management control: Flexible, responsive to management needs Displays data relationships Helps audit / comply with legislative requirement Simplifies communication of strategic goals scenario planning Provides well documented and communicated process documentation

6. Enhanced quality of work life: Employees experience greater job satisfaction because they become more successful. In addition, employee conflict is kept to a minimum.

Conceptual Study
Performance Management Study: What it is? Performance management is an ongoing communication process, undertaken in partnership between an employee and his/her immediate supervisor that involves establishing clear, shared expectations and understanding about: The essential job functions the employee is expected to do How the employees job contributes to the goals of the organization What doing the job well means in concrete terms How employee and supervisor will work together to sustain, improve or build on existing employee performance How job performance will be measured Identifying barriers to performance and removing them

Performance management is done with the employee because it benefits the employee, the manager and the organization and is best done in a collaborative, cooperative way. What its not? Many people think performance appraisal and performance management is one of the same, but it is not. One has to be aware of some common misconceptions, which are as follows: Something manager does to an employee A club to force people to work better or harder Used only in poor situations About completing forms once a year

In general Performance management is an ongoing communication process between two people. Its something about people to make everyone better.

Indian Oil Corp. Ltd. (IOCL)

Indian Oil Corporation Ltd. is Indias largest company by sales with a turnover of Rs. 3, 28,744 crore ($ 72,125 million) and profit of Rs. 7445 crore ($ 1,633 million) for the year 2010-11. Indian Oil is the highest ranked Indian company in the latest Fortune Global 500 listings, ranked at the 98th position. Indian Oils vision is driven by a group of dynamic leaders who have made it a name to reckon with. Vision:

Values: Indian oil nurtures the core values of Care, Initiative, Passion & Trust across the organization in order to deliver value to its stakeholders. Care Stands for Concern Empathy Understanding Co-operation Empowerment Innovation Stands for Creativity Ability to learn Flexibility Change Passion Stands for Commitment Dedication Pride Inspiration Ownership Zeal & Zest Trust Stands for Delivered promises Reliability Dependability Integrity Truthfulness Transparency

Performance Management: Systematically managing all the people in an organization, for innovation, goal focus, productivity and satisfaction it is a goal congruent win - win plan

Performance management is an ongoing communication process undertaken in partnership between an employee and his or her immediate supervisor, that involves establishing clear, shared expectations and understanding about: The essential job functions the employee is expected to do How the employees job contributes to the goals of the organization What doing the job well means in concrete terms How employee and supervisor will work together to sustain, improve or build on existing employee performance How job performance will be measured Identifying barriers to performance and removing them

IOCL - Performance Management System EPMS (Employee Performance Management System) IOCL is using EPMS for measuring performance of their employees. Here they are not following 3600 approach where data is collected from all the people who are in contact with the employee officially. This system basically checks the performance of the employee on day to day basis and this system is directly connected with the SAP (centralized system which IOCL has for their day to day working). Goal setting of the employee (i.e. the KRAs) is carried out on three different levels: 1. Reporting officer 2. Signing officer 3. Counter signing officer Once the goal setting is done and if employee is finding any difficulty while doing his job, then he can ask for the training in the same field. This training need is decided by the controlling officer. For such kind of trainings IOCL has few internal faculties and if they are not available then external faculty is arranged. IOCL is having Training Need Identification Programs which are handled by Employee Relationship Department. Along with such kind of programs they have training portals where employee can register himself and ask for the training which he wants. Different trainings provided by IOCL for their employees to increase their performance are as follows: 1. 2. 3. 4. 5. 6. SAP training Quality control Safety and pollution control LPG operations, Lube operations Maintenance and repairs RTGS operations

These training programs are carried out at different locations where training environment is different from their regular work environment. There are different training locations, one of which is at Bandra, where training for western region employees is carried out. In IOCL performance is evaluated by the HR department and based on that payment is made (which is called as Performance Rating Payment, PRP). Division of Performance Rating Payment is as follows: 60% - Based on the total Sales/Revenue generated by the company 40% - Based on the individual performance, which is recorded by the EPMS.

A Performance management system includes the following actions; Developing clear job descriptions and employee performance plans which includes the key result areas (KRA') and performance indicators. Selection of right set of people by implementing an appropriate selection process. Negotiating requirements and performance standards for measuring the outcome and overall productivity against the predefined benchmarks. Providing continuous coaching and feedback during the period of delivery of performance. Identifying the training and development needs by measuring the outcomes achieved against the set standards and implementing effective development programs for improvement. Holding quarterly performance development discussions and evaluating employee performance on the basis of performance plans. Designing effective compensation and reward systems for recognizing those employees who excel in their jobs by achieving the set standards in accordance with the performance plans or rather exceed the performance benchmarks. Providing promotional/career development support and guidance to the employees. Performing exit interviews for understanding the cause of employee discontentment and thereafter exit from an organization.

The Performance Management Cycle: Here is a brief description of how one can manage each of the factors in the performance management cycle to help employees to reach their full potential at work:

1. Goal Setting: At the start of the review period, take the time to set SMART goals with your employee. These are Specific, Measureable, Achievable, Relevant and Time-framed. For example, a goal might be to "lose weight". A Smarter goal could be to "lose 1 kilo a week for 8 weeks". 2. Learning: Build in lots of opportunities for your employees to learn over the review period. Learning can take place in many ways, not just through offsite training courses. Offer project work, short-term transfers, involvement in multi- disciplinary teams, distance learning and so on. 3. Employee Development: Discuss short term and long term career plans with your employees, so that you can invest now for the future. Not all employees want to get on the career ladder, but most would appreciate some form of change to keep them motivated and challenged. 4. Feedback: Look out for opportunities to give positive feedback. Meet with your employee on a regular basis to talk about how they are getting on and ask if anything is bothering them. 5. Coaching: Coaching involves an employee being supported by his/her manager to clarify and achieve a specific goal. The employee owns the process so coaching can only occur when the employee is willing to participate. 6. Mentoring: Mentoring involves a manager passing on his/her knowledge and expertise to an employee. Typically, the employee has a mentor who is at management level but not directly involved in his or her work area, so that issues can be discussed in an impartial and confidential manner. 7. Employee Appraisals: All the activities mentioned above should take place on an ongoing basis. The formal appraisal interview, normally held on an annually, is a great forum to discuss progress in each of these areas.

TCS IT INDUSTRY
The paper takes a look at the software engineering education and evaluation model followed in the induction program for fresh engineering graduates at Tata Consultancy Services Ltd. It describes how the induction program fulfils the objective of bridging the gap between what the academia supplies and what the industry demands. It also elaborates the evolution of the evaluation process followed in the program. The current evaluation model incorporates a blended approach using case studies and online exams. Small groups of trainees are assessed based on their case study deliverables. Online exams in which trainees solve problems close to real-world scenarios are conducted at the end of each phase to

assess individual performance. These assessments happen in a staged manner and ensure continuous and comprehensive evaluation. Further the performance analysis of trainees from various institutes also helps in giving inputs to improve talent acquisition in the organization. The TCS software engineering education and evaluation model is a continuously evolving model to meet the demands of the rapidly growing and changing IT industry. TCS IGNITE PROGRAM Learning by doing is one of the important aspects of training at Ignite. During the course of their learning, trainees are expected to work on projects where they practically execute all phases of the software development lifecycle. This approach to learning, called the incubator model, simulates a project-like atmosphere in the training environment and encourages demand-driven learning. The approach maintains a strong emphasis on practically grounded education, teaching not only concepts but also connecting them to real-world challenges and projects. At any given time, 500 trainees work and learn as 42 start-up teams, and over a six month period produce deployable solutions. This process is actively guided by my team of senior technology and business mentors. Promising products are continued by incoming batches and led by founder-members from earlier groups of trainees Learning starts with unlearning. Rote learning is of little value today. So, in order to reboot learning and make it relevant to the 21st century economy; lectures have become clicker-mediated experiments, labs transform into start-up companies and tests prepare learners for the real world. Technology enabled learning Ambient learning

Learning is technology driven. Active participation by the trainees is encouraged at Ignite and this is enabled by learning technologies such as, real-time classroom response systems, personal growth monitors, intelligent software tutors, gaming technologies and creative communication workshops.

Learning to learn: Your path for most effective learning is through knowing

Yourself Your capacity to learn The process you have successfully used in the past Your interest in, and knowledge of, the subject you wish to learn

There are four steps to learning: 1. Begin with the past 2. Proceed to the present

3. Consider the process 4. Build the review

Learning and development at TCS

The objective: Business excellence is a direct result of training. Therefore, organizations like yours continuously seek to build the skills of your resources with up-to-date, contemporary, and relevant technology. However, you need to ensure that expertise in training methodology and learning technologies, expert technical trainers, and content development skills are available in-house. Your training delivery methods must also be suited to your organizational needs and customized for globally dispersed users requiring frequent training for supporting go-to-market (GTM) initiatives simultaneously. Absence of this impacts your speed-to-market and skews the training budget, thus impacting business performance. Tata Consultancy Services' (TCS) IT Training Outsourcing offers end-to-end solutions for your organization's training needs. From identifying existing skills and conducting Skill Gap Analysis, we identify appropriate Blended Learning programs, design and develop/procure learning programs, and appropriate delivery modes. We also help you define the pricing and learning outcomes, and give you options for future programs.

Benefits:
Outsourcing your IT Training and learning management services to a partner like us, ensures that you have time and resources to focus on your core business. From administration of the learning infrastructure, customer support and help-desk services to the training need identification, actual curriculum design, content development, program packaging, contract trainer management, and logistics planning, we take care of it all, across your global presence. Your benefit from: 1. ROI Improvement: Helping you align your training spends to business needs, we deliver more within the available training budget. With measurable training success metrics and various learning activities, you see the program value and get increased competitiveness, as ROI improves. 2. Access to trainers on latest technologies: We have a large pool of technical associates to train on a variety of subjects. Our alliances with the best technology vendors and renowned universities, helps them acquire hands-on experience on the latest technologies and software applications.

3. Proven training practices: Our mature and best training processes ensure that your IT training programs are well designed and incorporate the latest training methods and technologies for successful training outcomes. 4. Help with managing resistance to change: With predefined learning outcomes and extensive knowledge management, we help you counter insecurity and threat from new technologies gives you sub-optimal use of the new investments.

TCS Generic Training Model

Godrej Boyce & Soaps

Performance Management Process
From organizational point of view: PMP is a tool for deploying business strategy to individual employee level and facilitate achievement of the business goals and targets. Its main objective is to create Empowerment, Ownership and Accountability along with developing the capability and competency in the employees. This process provides role clarity and facilitates employees in playing a role appropriate to their levels and job responsibilities. From individual point of view: This process enables the individual employee to Identify KRAs (Key Result Areas) and goals, which are in line with the organizational goals. Identify areas of personal development for enhanced performance Monitor progress on achievement of goals and taking corrective actions, wherever necessary through reviews.

Performance Development Meeting (PDM): PDM is a communication tool to promote an in-depth dialogue on all matters concerning professional activity as well as personal development. PDM allows the company to meet the needs for better communication between the different hierarchical levels, to ensure the upward and downward circulation of information, to help everybody in his own personal development and thus optimize coherence of management and organization. Purpose of PDM is to give collaborators and their managers the opportunities to reflect on matters together, which are often difficult to examine in detail on a day to day basis. PMP: This process is divided into the three different steps, which are as follows: Professional performance development section which includes the formulation of mission, KRAs with the help of L+1, goal setting process Competency evaluation section Personal development section which includes building the capability of employee in context of present and future job responsibilities.

This process (PMP) is conducted every month with the help of L+1 of the employee. Based on the performance of the current year or comparing performance of current quarter with the previous quarter employee is judge and rating is assigned to him. These ratings are as follows: SE- Surpassed Expectations (Achievement > 110%) ME- Met Expectations (91% > Achievement > 100%) CB- Could have done better (60% > Achievement >90%) BE- Below Expectations (Achievement < 60%) Linkages of PMP with other HR processes: Variable Pay: Based on performance evaluation Salary review: parameters considered are as follows: Internal equity, consistent performance, potential, criticality of position, difficulty in replacement, attitude and behavior, value etc.

Learning from Study:

Learned about the process of performance management system in different sectors. The importance of performance management system in increasing business profit & to motivate workforce. To improve the quality of work life & management control. Different training models used by different companies in different sectors. How often performance assessments are carried out. How performance goals are structured. Who is responsible for quantifying performance goals. At what level are performance goals assessed.

Conclusion:
There is no best way to formulate a performance management system. Managers should make every effort to improve the quality of appraisals through attention to choice of measures as well as training. Managers should recognize the importance of viewing performance management as a system comprised of a number of components including communication, feedback, and employee development processes.