EFFECTIVENESS OF PERFORMANCE MANAGEMENT SYSTEM
IN GAIL (INDIA) LIMITED
Partial Fulfilment of the Requirements for the Award of Post Graduate Diploma in Management (Recognized by AICTE, Ministry of HRD, Govt. of India)
By
Ms. Pragati PG-10-052 Batch 2010-12
Under the guidance of
Dr. Bhawana Garg INMANTEC, Ghaziabad
Integrated Academy of Management and Technology Ghaziabad June, 2011
TRAINING PERIOD FROM 18
TH
APRIL - 18
TH
JUNE
SUMMER PROJECT REPORT ON EFFECTIVENESS OF PERFORMANCE AGEMENT SYSTEM
IN GAIL (INDIA) LIMITED
Submitted by: PRAGATI PGDM (HR) INMANTEC BUSINESS SCHOOL
Guided by- Mr. M.BAA
GAIL (INDIA) LIMITED (A
Government
of
India
Undertaking-A
Navratna
Company)B-35, 36, Sector-1, Noida | PRAGATI
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ACKNOWLEDGEMENT
“Vital to every operation is co-operation” I really agree to this wonderful quotation put
by Mr. Frank Tyger. This project was successful due to the co-operation extended by people who have truly contributed towards it. Words aren‘t enough to express my gratitude to all those who helped me through - out my Training period.
With deep regards and humble respect I would like to thanks Shri M. Baa DGM (HR), Mr. U.P .VAIDYA Chief Manager, (HR) GAIL (India) Limited who provided me an distinctive opportunity to work at GAIL (India) Limited. I would like to express my humble thanks and regards to Mr. I.K. Kothari, Senior Officer, (HR) Department, GAIL (India) Limited, whose kind supervision and Interest went all way in successful completion of this work. I would like to thanks all the members of GAIL (India) Limited who directly or indirectly helped me during my project work.
PRAGATI
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Table of Content:
Page
1. Scope ……………………………………………………………………………
07
2. Objectives………………………………………………………………………..
08
3. Limitations……………………………………………………………………….
09
4 Executive summary……………………………………………………………….
10
5. GAIL (INDIA) Ltd……………………………………………………………..
11-24
Overview of the Oil Industry……………………………………………....
25-29
6. GAIL (HR)……………………………………………………………………...
30-32
7. Literature Review……………………………………………………………….
33-50
8. Research Methodology………………………………………………………….
51-53
9. Data Analysis Data Representation…………………………………………………… Data Interpretation……………………………………………………..
54-75 54-75
10. Recommendation & Suggestions………………………………………………
76-81
11. Conclusion……………………………………………………………………...
82
12. Questionnaire on Performance Management System………………………….
83-85
13. Bibliography & References ……………………………... ..................................
86
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Scope This study is intended to find the both sides of the system used in performance Appraisal. We know that good Appraisal system is essential to achieve the goals of the organization. If this is successfully implemented with a proper vision it can enhance the efficiency & productivity as employees are assured not to ignoring their performance and related awards. The present study intends to provide an integrated picture of the Level of employment attitude toward performance appraisal system in GAIL (India) Limited. The study was conducted in GAIL (India) Limited, Noida, in HR departments. The study Covers the feedback from different employees of GAIL (India) Limited, Noida towards the Performance appraisal system of the firm.
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OBJECTIVES OF THE STUDY
The objective of my study of effective measurement of Performance appraisal System in GAIL (India) Limited are:
An overview of the Electronic PMS System in GAIL (India) Ltd.
To study the pros and cons of the existing system of performance appraisal at GAIL (India) Ltd.
To study how this helps in other HR- activities like training, promotion & transfers etc. in the Organizations‘.
To provide the possible practical Recommendation for its improvement in GAIL (India) Ltd.
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LIMITATIONS OF STUDY The biggest limitation of my study was the two months time period of internship which was not enough to understand performance appraisal of a company. Another Limitation of this study was I have made this project in GAIL (India) Limited. In such a small period Getting the views and opinions of the interviewee (HR manager) was a difficult task.
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Executive Summary: (Project) GAIL (India) Ltd. is one of the ― NAVRATNA ENTERPRISES ‖ and ranks among top 5 Companies in India. It is India‘s Flagship Natural gas company, integrated all aspects of natural gas, value chain (including exploration and production, processing, transmission, distribution & marketing) & in its revealed services. In a rapidly changing scenario, GAIL (India) Ltd. Spearheading the move to a new era of clean fuel industrialization, creating a quadrilateral of green energy corridors that connect major consumption centers in India with major gas fields, LNG terminals and other cross border gas sourcing points. GAIL is also expanding its business to become a player in the International Market. Today GAIL (India) Ltd. has almost 3400 Permananent employees, GAIL (India) Ltd. has its corporate office in Delhi which has almost 430 employees most of them of executive level.
GAIL (India) Ltd is engaged in so many businesses and having a large pool of employees so an HR department is established to handle all employees related issues. It has to manage within the minimum cost the benefits and requirements of the employees. The HR department of GAIL (India) Ltd. comprises of two broad sections i.e., employees services, policy, security and administration. On the other hand when we see the Human resource development section, it integrates recruitment, performance management system, career progression department, library maintenance, training & development group. Performance Appraisal system at GAIL (India) Ltd. is functioning for long time. Earlier the process of performance appraisal was done through the manual PMS .For last few years GAIL (India) Ltd. has successfully implemented the Electronic version of Performance Appraisal System which is very successful in completing the Appraisal process timely & easily. Therefore in this project to study PAS in GAIL (India)Ltd. is very relevant as with the increase of business the number of employees will increase and an effective PAS will be required. So this research will be focused on the analysis of effectiveness of Performance Appraisal System.
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Introduction ABOUT THE COMPANY GAIL (India) Ltd. was setup with the mandate to process transport and distribute natural gas and its products. GAIL thus went into the business of natural gas. LPG liquid hydrocarbons and petrochemicals the later are being value-added products. The company also entered into telecom sector by leasing bandwidth which is laid along the gas pipelines for their operations and maintenance and the future will more or less be a continuum of these and the other areas that GAIL has diversified into like Exploration & production. City gas Distribution, overseas presence etc. The focus of course and the efforts/resource allocation in these areas would be different at different times but GAIL would maintain its premier company position in the gas and related segment in India. The core competence of GAIL is gas transmission and it draws its strength from over 6700 km of natural gas pipeline network and over 1900 km of LPG pipelines transmission network. Recently, GAIL has received approval from the Ministry of Petroleum and Natural Gas pipelines in addition to these GAIL will be augmenting the capacities of 3 existing pipelines. The total length of the new pipelines will be around 5000 km and the estimated investment of these would be nearly Rs 20,000 crore. When these pipelines are commissioned, the capacity is expected to increase from 148 MMSCMD at present to around 300 MMSCMD in 2011.
VISION: - Be a leading company in natural gas and beyond, with global focus, committed care, value creation for all stakeholders and the environmental responsibility.
MISSION:- Accelerating and optimizing the effective and economic use of natural gas and its fractions to the benefit of National economy.
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HISTORY OF THE ORGANISATION The company was previously known as Gas Authority of India Ltd. It is India's principal Gas transmission and marketing company. It was set up by the Government of India in August 1984 to create gas sector infrastructure. GAIL India is the country‘s largest gas Transmission Company and handled 82 million standard cubic meters per day (mmscmd) Out of the 111 mmscmd of gas supplies in FY08. The company has a pipeline network of 7,000 kms in place. Its pipeline is the lifeline for major gas consumers from the power and fertilizer sectors. It has also ventured into upstream gas exploration business in order to reduce dependency on a single source of supply and has secured 30 exploration blocks. GAIL is a significant player in downstream petrochemicals business with a production capacity of 410,000 tons per annum. It is also an early mover in city gas distribution with 8 joint ventures and a wholly owned subsidiary, GAIL Gas, are being incorporated. The company has plans to enter into more than 230 cities. GAIL is listed by Forbes as one of the world's 2,000 largest public companies in 2007. GAIL commissioned the 2800-km Hazira-Vijaipur- Jagdishpur (HVJ) pipeline in 1991. During 1991-93, three liquefied Petroleum gas (LPG) plants were constructed and some regional pipelines acquired, enabling GAIL to begin its gas transportation in various parts of India. GAIL began its City gas distribution in New Delhi in 1997 by setting up nine compressed natural gas (CNG) stations. In 1999, GAIL set up northern India's only petrochemical plant at Pata.
BUSINESS DESCRIPTION IN BRIEF Currently the business set up is as such
7 LPG Gas Processing Units to produce 1.2 MMTPA of LPG and other liquid Hydrocarbons. 1,922 km of LPG Transmission pipeline network with a capacity to transport 3.8 MMTPA of LPG.
13,000 km of OFC network offering highly dependable bandwidth for telecom Service providers.
6,700 km of Natural Gas high pressure trunk pipeline with a capacity to carry 148 MMSCMD of natural gas across the country.
North India's only gas based integrated Petrochemical complex at Pata with a Capacity of producing 4, 10, 000 TPA of Polymers.
27 oil and gas Exploration blocks and 3 Coal Bed Methane Blocks.
13,000 km of OFC network offering highly dependable bandwidth for telecom Service providers.
Joint venture companies in Delhi, Mumbai, Hyderabad, Kanpur, Agra, Lucknow, Bhopal, Agartals and Pune, for supplying Piped Natural Gas (PNG) to households and commercial users, and Compressed Natural Gas (CNG) to the transport sector.
Participating stake in the Dahej LNG Terminal and the upcoming Kochi LNG
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Terminal in Kerala.
GAIL has been entrusted with the responsibility of reviving the LNG terminal at Dabhol as well as sourcing LNG.
Established presence in the CNG and City Gas sectors in Egypt through equity Participation in three Egyptian companies: Fayum Gas Company SAE, Shell CNG SAE and National Gas Company SAE.
Stake in China Gas Holding to explore opportunities in the CNG sector in Mainland China.
GROWTH
1990-91 2800Kms Hazira-Vijaipur Jagdishpur (HVJ) pipeline becomes operational in 1991. LPG phase-I plant at Vijaipur commissioned in February 1991.
1991-92 Phase-2 at LPG Vijaipur plant commissioned in Feb 1992.
1992-93 LPG project at Vaghodia commissioned in Feb 1993.
1994-95 Joint venture Agreement signed with British Gas on December 6, 1994.Mahanagar Gas Limited Incorporated to implement Bombay City Gas Distribution project.
1997-98 Government of India grants Navratna status to Gail, herby entrusting greater autonomy. To Gail after restructuring of the Board. Gas processing units (GPU), Offsite utilities of the petrochemical plant at Pata, commissioned.
1999-00 GAIL participates in NELP bidding by submitting offer for 7 blocks in association With ONGC & IOC and Russian company Gazprom. Government of India approved Award of 2 blocks to GAIL, One with ONGC in Orissa offshore and another with Gazprom in Bengal Offshore LPG plant at Pata with a designed capacity of 2.58 lacs TPA of LPG commissioned for commercial production in March 2000.
2000-01 GAIL conceptualizes a National Gas Grid to connect the supply and demand centres in the country with high pressure cross country pipelines networks. The gas processing Complex, Gandhar begins production in March 2001.The process LPG, 0.43 Lacs MT of Pentane and SBP solvent. Jamnagar-Loni LPG Pipeline project, the world‘s longest and India‘s first cross country LPG 1296 Km long pipeline, which passes through Gujrat, Rajasthan, Haryana and Delhi are completed.
2001-02 GAIL picks up 12% equity in GSEG‘s 156 MW power project in Gujarat as a strategic
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Investment. Marketing functions is restructured and decentralize at zonal levels. GAILTEL phase-I commissioned, creating an OFC based DWDM network connecting Delhi-Mumbai, Delhi-Jaipur, Delhi-Ahmadabad, Delhi-Vijaipur, Meerut-Agra. 2003-04 GAIL has an initial success in the form of significant gas find in the block A-1 in Myanmar and discovery of oil and gas in the Cambay block. GAIL successfully secures Participation in 2 retail gas companies in Egypt, Fayum Gas Company and Shell CNG.
Vizag – Secundrabad LPG pipeline. The 580 km pipeline with the maximum throughput Of 1.16 MMPTPA completed in June 2003 Bhagyanagar Gas Limited, a joint venture of GAIL and HPCL, incorporated in August 2003, in the field of distribution and marketing of auto LPG, CNG for vehicles and retailing of natural gas in the cities of Andhra Pradesh. Phase I and II of 8000 km network GAILTEL projects connecting Delhi, Mumbai and 71 other cities, completed. This network provides a national communication Backbone. 2004-05 Incorporation of GAIL Global Singapore PVT.LTD Acquisition of 15 % equity stake in Natural Gas, Egypt. Agreement signed for acquisition of 9 % equity stake in China Gas Holding LTD, a joint venture for city gas projects in 42 cities of China. Tripura Natural gas Co.Ltd, a joint venture for city gas project in Tripura, incorporated UP central gas Ltd, a joint venture for city gas project with BPCL in Kanpur, incorporated De-bottlenecking of LLDPE swing unit from 150000 MT to 210000 MT at GAIL Pata. Gas management system commissioned for HVJ, DVPL and SGPL. Commissioning of South Gujarat pipeline network .Commissioning of Vizag Secundrabad LPG pipeline.
2005-06 GAIL, ilex Australia, Videocon, HPCL and BPCL consortium awarded Blocks no 56 in Oman. GAIL was ranked 11th among top 15 of the world‘s largest listed gas utilities firms in the oil and gas industry, in terms of market capitalization ,for the year 2005. GAIL gets Golden Icon award for e-governance Inauguration of the National gas Management centre (NGMC) of GAIL at NOIDA. GAIL bagged two awards for Excellence in cost management from the Institute of Cost and Works Accounts of India (ICWAI)
.
2006-07 Mechanical completion of new HDPE (High Density Polyethylene) plant with a capacity of 100,000 TPA at Petrochemical complex at PATA Commissioning of Dahaj-Panvel Pipeline Brahmaputra cracker and polymer limited-Joint Venture Company led by GAIL, formed for implementing Assam gas cracker projects GAIL acquires stake in A7 Myanmar block GAIL‘s Vijaipur - Kota pipeline commissioned. GAIL‘s Kailaras Malanpur pipeline commissioned GAIL‘s consortium wins 3 CBM blocks in 3rd round of bidding GAIL HPCL joint venture-Avantika gas limited incorporated GAIL ONGC ink Gas supply agreement GAIL brings India‘s first spot LNG cargo at Dahej.
Subsidiaries and Joint ventures Company has been the pioneer for City Gas Projects in India. With natural gas emerging as the fuel of choice in the country, Company believes that the next decade will belong to the city gas. It was the first Company to introduce City Gas Projects in India for supplies
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to households, commercial users and for the transport sector by forming Joint Venture Companies.
Subsidiaries are as follow: GAIL Gas limited Company has formed a wholly owned subsidiary named ‗GAIL Gas Limited‘ for Implementing City Gas Projects and CNG corridor in the country. The subsidiary Company will act as a vehicle for bidding for laying pipeline infrastructure in the country. GAIL Global (Singapore) Pte. Limited Company has a wholly owned subsidiary, namely, GAIL Global (Singapore) Pte. Ltd. to manage investments abroad .Company is looking for further business opportunities through this subsidiary company. Brahmaputra Cracker and Polymer Limited Company has 70% equity share with Oil India Limited (OIL), Numaligarh Refinery Limited (NRL), and Govt. of Assam, each having 10% equity share. The authorized Capital of the company is Rs. 1,200 Crores. A Feedstock Supply Agreement has been Signed between Brahmaputra Cracker and Polymer Limited (BCPL), and all the three Suppliers‘ viz., Oil and Natural Gas Company Limited, Oil India Limited and Numaligarh Refinery Limited. Financial closure for the project is likely to be completed during the Year 2008-09.
Joint Ventures Aavantika Gas Limited (AGL) GAIL and Hindustan Petroleum Corporation Limited (HPCL) for Implementation of City Gas Projects in the cities of Madhya Pradesh. AGL has started project implementation activities in the city of Indore. Company has 22.5% stake in the Company with HPCL as equal partner.
Bhagyanagar Gas Limited (BGL) BGL is currently operating three Auto LPG stations in Hyderabad and one Auto LPG station in Tirupathi. It is currently operating six CNG stations in Vijayawada and three CNG stations in Hyderabad. Company has 22.5% stake in the company along with HPCL as equal partner. Central U.P. Gas Limited (CUGL): CUGL is currently operating five CNG stations in Kanpur, one CNG Station in Bareilly and one CNG station in Kanpur is under commissioning. CUGL is building MDPE network for supply of PNG to domestic, commercial and Industrial sectors in the city of Kanpur. Company has 22.5% stake in the company along with BPCL as equal partner. Green Gas Limited (GGL): GGL is currently operating four CNG stations in Lucknow and three CNG stations in Agra. GGL will also take up project implementation in other cities of Western UP on the basis of gas availability and project Viability. Your Company has 22.5% stake in the company along with IOC
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as equal partner. Indraprastha Gas Limited (IGL) IGL is supplying piped gas to around 1 Lac domestic, 276 commercial, 16 Small industrial consumers and CNG to over 1.35 Lacs vehicles through 153 CNG Stations. IGL is catering to world‘s largest CNG bus fleet of over 11,000 buses in Delhi. Company has 22.5% stake in the company along with BPCL as equal partner. Maharashtra Natural Gas Limited (MNGL) MNGL is a Joint Venture of your Company and Bharat Petroleum Corporation Limited (BPCL) for implementation of City Gas Projects in Pune city. MNGL is developing necessary infrastructure for supply of CNG and PNG in the city. Company has 22.5% stake in the company along with BPCL as equal partner. Petronet LNG Limited (PLL) PLL was formed for setting up of LNG import and regasification facilities. PLL has a long term LNG supply contract with Ras Gas, Qatar for import of 7.5 MMTPA. PLL Dahej terminal is being expanded to 10 MMTPA capacity. Company has 12.50% stake in the company along with BPCL, IOC and ONGC as equal partners. Ratnagiri Gas and Power Private Limited (RGPPL) RGPPL is a Joint Venture Company between your Company, NTPC, and Financial Institutions and MSEB. Your Company has 28.33% stake in the company along with NTPC as equal partner. The capacity of the Ratnagiri Gas & Power Station is 2,150 MW. Company has made an investment of Rs. 500 Crores and has approved additional Equity of Rs. 475 Crores to RGPPL, out of the Rs. 475 Crores; an amount of Rs. 92.90 Crores has been paid during the month of May, 2008. Tripura Natural Gas Company Limited (TNGCL) TNGCL is presently supplying gas to 6600 domestic, 104 commercial, 21 industrial consumers and has set up one CNG station in Agartala city. Company has 29% stake in the company. Company has approved formation of JV for City Gas Projects in Vadodara with Vadodara Mahanagar Seva Sadan (VMSS) with 26 percent equity, while VMSS will have 24 per cent equity. The balance 50 per cent equity will be held by strategic investors and public. A JV agreement has also been signed with HPCL for city gas projects in Rajasthan. Business operation 1) Upstream Operation Every cloud has a silver lining and every adversity hides an opportunity. GAIL's Exploration and Production (E&P) unit was born in just such a scenario. As the Indian Economy opened up around the year 2000, the business environment changed dramatically. For GAIL, liberalization meant competition in core business i.e. midstream and downstream national gas distribution No longer could they rely on statutory support mandating secured sources of Natural Gas. The reserves contained in existing contracted fields were fast depleting. Apart from securing sources for Natural Gas, there were other compelling reasons for GAIL to get into E&P: Integration in supply-chain Large gap in Gas demand and supply National Gas security
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Balancing of Business portfolio So that GAIL ventured into E&P in 2001. At the end of 2007-08, it has invested Rs. 11.5 billion in this segment. It is involved in oil & gas exploration activities over acreage of 1.7 square km. It has participating interest ranging from 10 to 80 percent in following:24 domestic blocks 3 overseas blocks 3 CBM GAIL is currently participating in 27 exploration blocks, in Basins such as Mahanadi, Mumbai, Cambay, Assam-Akaran , Tripura Fold Belt and Cauvery. GAIL has partnership in these blocks with various companies such as ONGCL, GSPCL, OIL, Hardy Exploration & Production, Petrogas, JOGPL, Daewoo, OVL, IOCL, Korea Gas Corporation, Hallworthy, BPCL, HPCL and Silver wave. GAIL also has stake in 3 overseas blocks (A-1 and A-3 blocks in Myanmar and Block-56 in Oman).Of these, nine are offshore blocks and eighteen onshore blocks, of which 13 are deepwater and 5, are shallow water. Coal Bed Methane (CBM) is stored in coal seams and was generated during the process of coalification. It occurs within these seams either as free gas in fractures or in dissolved form in water. The consortium of GAIL (India) Ltd., Arrow Energy (India) Pty Ltd., EIG Energy Infrastructure Group AB has been awarded 3 CBM Blocks in CBM-III Bidding round. The Tata Power Company is also a consortium partner in two of the awarded blocks. These blocks are in Rajmahal (Jharkhand), Mand Raigarh (Chattisgarh) and Tata Pani Ramkola (Chhattisgarh).
2) Midstream Operation a) Petrochemicals The company has seven gas LPG processing plant with total capacity of 1.2 mtpa 4 plants are situated along the Hazira Vijaipur Jagdishpur pipeline (two at Vijaipur in Madhya Pradesh , one at vaghodia in Gujarat, and one at oriya in Uttar Pradesh ,and one each in Lakwa Assam , Usar , Maharashtra an d Gandhinagar Gujarat). The total liquid hydrocarbon production was over 1.348 million tonnes, which included 1.043 MT of LPG 0.156 tm of propane and 0.074 tm of pentane the company‘s board of director has recently approved them doubling capacity of its pata petrochemical complex in UP to 0.8 mtpa .the installed polymer capacity at pata is 0.41 mta, which will be increased by leveraging existing facility and augmenting them. Company is setting up 280000 tpa petrochemical plant in Assam at an investment of Rs 54.6 billion. It has also signed an agreement with HPCL, OIL, Mittal investment and France total to set up another petrochemical complex and crude oil refinery at Vishakhapatnam in AP.GAIL has a 70% equity stake in Brahmaputra cracker and polymer limited. The other equity partners are OIL, Numaligarh Refinery Limited and the Govt of Assam is having a 10% equity stake. b) Pipeline Operation Interstate pipelines provide open access for shipment of natural gas. Gas enters an interstate pipeline from gathering systems and from interconnecting pipelines. Beginning at individual wellheads, gathering systems usually consist of smaller diameter pipe operating at lower pressure. Gas conditioning is usually performed to reduce contaminants such as water from gathered gas before it is compressed into the transmission system. Gas leaves the transmission system through delivery points to other interstate pipelines, local distribution companies and directly to end users such as industrial facilities and power plants. Local distribution systems deliver gas to residential, commercial and industrial end users. The basic components of an interstate pipeline include steel pipe, valves, and compression, processing and storage facilities. Pipe sizes vary widely with much of the pipe in the 20-inch to 36-inch diameter range and wall
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thickness of about one quarter to one-half inch. A typical range of operating pressures for a transmission system is 300 to 1440 psig. Powered by natural gas or electricity, compression is one of two types: reciprocating or centrifugal. Processing facilities extract undesirable contaminants (such as hydrogen sulfide and water) and marketable hydrocarbons (such as propane and gasoline). Storage facilities have been developed from depleted oil fields, coal mines, salt domes, aquifers and reefs. These facilities can be used for peak-shaving hourly demands and short-term, as well as, seasonal storage of gas. Much of the gas that is transported on interstate pipelines is nominated, that is, scheduled in advance of actual gas flow. Deliveries into local distribution companies that serve weather-sensitive markets, however, cannot be known with absolute certainty. Such demand is met in part with "no-notice" service, which is usually supplied from inventories of the customers' gas, which is stored in the pipeline's storage facilities. 3) Downstream operation Natural Gas usage in Indian cities has been limited primarily due to the scarcity of supply. However this scenario is undergoing change with several LNG projects/transnational pipelines under implementation, which together with new domestic Gas finds are expected to shore up the supply deficit in the next few years. Meanwhile the market for city gas distribution is also set to grow at an accelerated pace. The CNG demand got a boost with the Supreme Court directive on pollution reduction in 12 major cities in India. The domestic segment is also expected to grow with the government's intentions to remove the subsidy on LPG cylinders in a phased manner in 3-5 years making piped gas even more economical. 4) Overseas Operation GAIL has a 10 % equity stake in block A! Ink Myanmar where huge gas reserve has been discovered recently. It also has a 10 % stake in block A3. It has stake in block56 in Oman. However GAIL‘S share in the blocks has been reduced following Myanmar‘s national oil company exercising its ―step in‖ right‘s to 8.5%. In 2003 -04 GAIL acquired equity stakes in CGD project of fayum gas and shell gas in the Egypt. GAIL has setup a wholly owned subsidiary on Singapore, christened GAIL Global private limited, two undertake overseas investment, the subsidiary a 15% equity stake in the Egyptian national gas company- one of the largest natural gas distributing companies in the private sector in Egypt. The company also has a 50% stake in a JV formed with china gas holding limited to undertake projects in china, India and other countries.
Business of GAIL (India) Limited
Natural gas Petrochemicals Exploration and production LPG and other Liquid hydrocarbons Telecommunication
1. Natural gas With only one carbon and four hydrogen atoms per molecule, Natural Gas has the lowest carbon to hydrogen ratio, hence it burns completely, making it the cleanest of fossil fuels. Natural Gas satisfies most of the requirements for fuel in a modern day industrial society, being efficient, non-polluting and relatively economical. The periodic uncertainties and volatility in both the price and supply of oil, have also helped Natural Gas emerge as a major fuel in the energy basket across countries.
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Natural Gas comes in 4 basic forms:
Liquefied Natural Gas, LNG - Natural Gas which has been liquefied at -160 Natural Gas is liquefied to facilitate transportation in cryogenic tankers across sea Regasified Liquefied Natural Gas, RLNG - Compressed Natural gas, CNG - Natural Gas compressed to a pressure of 200-250 kg/cm2 used as fuel for transportation, CNG decreases vehicular pollution Piped Natural gas, PNG - Natural Gas distributed through a pipeline network that has safety valves to maintain the pressure assuring safe, uninterrupted supply to the domestic sector.
SECTORS
NATURAL GAS IS USED
Generation of electricity by utilities
Industrial
As fuel for base load power plants As feedback stock in the production of ammonia and urea. As an under boiler fuel for raising steam. As fuel in furnaces and heating applications.
Domestic and commercial
For heating of spaces and water for cooking.
Automotive
As a non-polluting fuel.
Petrochemicals
As the raw material from which a variety of chemical products, eg. Methanol, are derived.
Fertilizer Industry
2. LPG & Allied Products: LPG GAIL produces LPG through fractionation, known as Straight Run (SR). GAIL LPG is an eco-friendly fuel and provides a cheaper and effective means of reducing pollution and increasing productivity. Characteristics of GAIL LPG: o Processed from Natural Gas. o Clean fuel with almost nil unsaturated compounds o Has a higher calorific value than Refinery's LPG and hence gives more value for money o Its homogeneous composition results in more efficient combustion o The air fuel ratio need not be changed with every batch o No Impurities like sulphur, carbon dioxide, traces of oxides of nitrogen. Hence lower corrosion. o Has nil moisture content Customer-friendly fuel as it is easy to transport, store and use o LPG: Applications Domestic: For use in household Commercial: For use in hotels, bakeries, canteens, etc Auto: For use as fuel in automobiles Industrial: For use in production process, details of which are as under:
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Agriculture
Automobile Ceramics Chemicals and Drugs Electrical
Food Glass Metallurgical
Metal Working Packaging Textile
Transport Miscellaneous
Grain drying/ Weed killing/ Preservation of fruits/ Tobacco curing/ Tea drying Heat treatment/ Paint baking Biscuit and Gloss firing of porcelain & stoneware Heating and Drying Bulbs and Tubelights manufacturing/ Filament manufacturing/ Battery manufacturing Baking/ Boiling/ frying/ milk drying Melting/ holding/ feeding/ working/ Fire polishing Annealing/ Billet heating/ Melting/ Descaling/ Stress relieving/ Mould/ Cupola/ Laddle heating Steel cutting/ Hole piercing/ Welding of non ferrous metals Metal box soldering Drying/ Singeing/ Velvet processing calendaring / Print drying/ Dyeing Engine fuel Aerosols propellant/ Amarjyotis / Torches/ Bird scarers / Bitumen Melting in water proofing industry and road making
GAIL LPG is valued in Industry because of its high energy heat, homogeneous content, cleanliness and easy availability. Industries prefer to use GAIL LPG to power process furnaces, dryers, ovens, kilns, paint shops, etc. Process Heating: Homogeneous composition leads to no residue on combustion and accurate temperature control. Air Fuel ratio need not be changed with every batch. Excellent application in manufacture of textiles, glass, picture-tubes, automobile, bearings, etc. Metal Processing: Clean burning. No residue of Sulphur, Lead & Carbon leads to minimum scaling losses. Melting operations are homogeneous due to constant temperature control. Excellent applications in forging, wire drawing, casting, melting industry Paintings nits: No unburned fuel and residues. Ability to have constant temperature control results in effective and uniform heating with minimum fuel. Major car manufacturers use GAIL LPG for paint shops. Also finds applications in food processing, ink printing, etc.
Kilns & Furnaces: Accurate temperature control leads to enhanced productivity, reduces costs & pollution. No deposits of carbon lead to reduction in downtime and contamination. Excellent application in ceramics, heat treatment units.
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Drying Ovens: Finds excellent application in drying ovens due to less maintenance than oil systems because of one step heat transfer. Metal Industry: Usage of GAIL LPG leads to greater flame stability. No risk for overheating or blow back. Preferred over oxyacetylene fuel due to greater flame stability and efficiency LPG : Production GAIL produces LPG at its seven fractionating units. Detail of locations and their and their production capacity are given below · Vijaipur(2 Nos) , Madhya Pradesh · Auraiya Pata, UP · Gandhar & Vaghodia, Gujarat · Usar, Maharasthra · Lakwa, Assam GAIL is one of the largest indigenous producer of LPG. During 2006-2007 GAIL had produced about 10,25,900 MT (12 %) LPG against total all-India indigenous LPG production of 84,04,000 MT GAIL LPG is being supplied to PSU Oil Marketing Companies namely IOCL, BPCL, HPCL and IBP Ltd ex-Production Units at Import Parity Price. 3. Petrochemicals GAIL's the country's premier Natural Gas Marketer & Transporters , diversified into the manufacturing and marketing of downstream HDPE & LLDPE from natural gas cracking at its Pata (Uttar Pradesh state, India) unit from 19th April 1999. The beginning was with a name plate capacity of 2,60,000 MTPA of HDPE and LLDPE. In FY 2007-08, the petrochemical business portfolio contributed over 32% of the segment gross profit. GAIL is the only HDPE/LLDPE plant operating in Northern India and has a dominant market share in North India. The primary thrust markets for the polymers had been Western India, but, with the entry of GAIL in the HDPE & LLDPE market segments, today north India has also witnessed a rapid and significant growth in the polymer downstream processing segments. In a successful span of about a decades of establishing and marketing its grades under the brand names G-Lex & G-Lene, GAIL has along side augmented its name plate capacity of HDPE & LLDPE to 4,10,000 MTPA by adding another dedicated HDPE downstream polymerization unit of 1,00,000 MTPA. Polyethylene in India represents over 43% of thermo plastic Demand 4. Power Gujarat State Energy Generation Ltd was incorporated on December 13, 1998, with Gujarat State Petroleum Corporation Ltd (GSPCL) as the main promoter, to set up a Natural Gas-based power project at Hazira . The project was planned with a generation capacity of 156 MW by utilising natural gas from Hazira gas fields jointly owned by GSPCL and NIKO Resources, Canada, at an estimated cost of Rs. 576 crore with a 70:30 Debt to Equity ratio within 21 months from June 1, 2000. Fuel Supply Agreement with GSPCL / NIKO and Fuel Transportation Agreement with Gujarat State Petronet Ltd were entered into to securitize fuel supply. An arrangement is in place to sell power to the Gujarat Electricity Board through a Power Purchase Agreement signed on February 28, 2000, for 20 years. Commercial production was declared with the commissioning of the Gas Turbines in open cycle mode in December 2001. Subsequent to successful completion of performance tests, Combined Cycle operation commenced from June 2002.The plant is running smoothly with high Availability and Plant Load Factor.
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5. Gailtel The GAILTEL service arm of GAIL, is engaged in providing GAILTEL services to mission critical in-house SCADA and ERP services apart from commercially leasing services to GAILTEL Operators and ISP‘s across India. GAILTEL has been operating commercially in the Indian GAILTEL sector since June 2001. It is also responsible for meeting the captive communication requirements of GAIL‘s pipeline installations. GAILTEL, today serves most of the GAILTEL operators of the country, which include HUTCH, VSNL, Airtel , Idea Cellular, Reliance Infoco m, Tata Tele services, to name a few. Its high speed optic-fibre network extends to well over 13,000 Km connecting around 200 cities across various states like: Rajasthan, Gujarat, Madhya Pradesh, Maharastra , Uttar Pradesh, Andhra Pradesh, Haryana, Chandigarh, Delhi, Karnataka, Tamil Nadu and Kerela. With SDH & DWDM as the core layer, the network is built largely along the highly secured GAIL‘s cross co untry pipeline corridor and also configured in "self-healing" rings to ensure highly reliable and error free service to its esteemed customers. The network is managed centrally on round the clock basis from a state-of-art Network Management Centre at Noida
6. Exploration and Production Every cloud has a silver lining and every adversity hides an opportunity. GAIL's Exploration And Production (E&P) unit was born in just such a scenario.As the Indian Economy opened up around the year 2000, the business environment changed dramatically. For GAIL, liberalisation meant competition in our core business i.e. midstream and downstream national gas distribution No longer could we rely on statutory support mandating secured sources of Natural Gas for GAIL. The reserves contained in existing contracted fields were fast depleting. The writing was on the wall that we had to find new sources. Apart from securing sources for Natural Gas, there were other compelling reasons for GAIL to get into E&P: · Integration in supply-chain · Large gap in Gas demand and supply · National Gas security · Balancing of Business portfolio · Global opportunity August 2001, therefore, saw the launch of GAIL's Exploration & Production (E&P) unit. Initially, NELP rounds were targeted, and we won 12 blocks under four NELP rounds. GAIL also clinched a chunk of the much sought after A-1 block in Myanmar, in its maiden international E&P venture. The year 2004 placed GAIL firmly on India's E&P map, with the dual strike of gas in Myanmar and oil in Cambay. We are also acquiring international acreages and actively pursuing various international E&P opportunities.We knows that the future will be demanding. And we are ready to embrace it, acquiring the suitable technological equipment and expertise, and enhancing our manpower strength. GAIL is currently participating in 27 exploration blocks, in Basins such as Mahanadi, Mumbai, Cambay, Assam-Arakan, Tripura Fold Belt, Krishna Godavari, Cauvery and Cauvery Palar. GAIL has partnership in these blocks with various companies such as ONGCL, GSPCL, Hardy Exploration & Production, Pet rogas, JOGPL, Eni, Oilex and Daewoo as Operators. Out of these 27 E&P, 3 blocks are overseas (A-1 and A-3 blocks in Myanmar and Block-56 in Oman). GAIL is participating in three CBM blocks awarded to the consortium under CBM-III bidding round. Arrow Energy is the Operator of all the three CBM blocks. GAIL is a member of National Gas Hydrate Programme being coordinated by DGH and is actively involved in activities related to Gas Hydrate
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exploration.A list of current Exploration blocks in which GAIL is participating is on the link 'E&P and CBM Blocks' showing Participating Interest (PI) of GAIL. 3 of these blocks were awarded during NELP-II, 2 during NELP-IV, 3 during NELP-V, 15 during NELP-VI and 1 during NELP-VII. GAIL has farmed-in three blocks. The total area for E&P Blocks is 172,275 KM 2.
OVERVIEW OF THE PETROCHEMICAL INDUSTRIES The Indian oil and gas sector is one of the six core industries in India and has very significant forward linkages with the entire economy. India has been growing at a decent rate annually and is committed to accelerate the growth momentum in the years to come. This would translate into India's energy needs growing many times in the years to come. Hence, there is an emphasized need for wider and more intensive exploration for new finds, more efficient and effective recovery, a more rational and optimally balanced global price regime - as against the rather wide upward fluctuations of recent times, and a spirit of equitable common benefit in global energy cooperation. The Indian oil and gas sector is of strategic importance and plays a predominantly pivotal role in influencing decisions in all other spheres of the economy. The annual growth has been commendable and will accelerate in future consequently encouraging all round growth and development. This has necessitated the need for a wider intensified search for new fields, evolving better methods of extraction, refining and distribution, the constitution of a national price mechanism - keeping in mind the alarming price fluctuation in the recent past and evolving a spirit of equitable global cooperation.
Oil and Gas Sector: An Overview Exploration and Production (E&P) The growing demand for crude oil and gas in the country and policy initiative of Government of India towards increased E&P activity, have given a great impetus to the Indian E&P industry raising hopes of increased exploration. Oil and Natural Gas Corporation Limited (ONGC) and Oil India Ltd. (OIL), the two National Oil Companies (NOCs) and private and joint-venture companies are engaged in the exploration and production (E&P) of oil and natural gas in the country. During the year 2008-09, crude oil production has been 33.51 million metric tonnes (MMT) with natural gas at 32.85 billion cubic metre (BCM).Natural gas production in 2009-10 is targeted to be about 52.116 BCM. Imports and Exports of crude oil and petroleum products During the financial year 2008-09, imports of crude oil has been 128.16 MMT valued at US$ 73.97 billion. Imports of crude oil during 2007-08 was 121.67 MMT valued at US$ 58.98 billion. This marked an increase of 5.33 per cent during 2008-09 in quantity terms and increased by 25.37 per cent in value terms. During the financial year 2008-09, exports of petroleum products in quantity terms is 36.93 MMT valued at US$ 25.41 billion marking an increase of 6.02 per cent in value terms compared to 2007-08.
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New Exploration Licensing Policy (NELP) New Exploration Licensing Policy (NELP) provides an international class fiscal and contract framework for Exploration and Production of Hydrocarbons. In the first seven rounds of NELP spanning 2000-2009, Production Sharing Contracts (PSCs) for 203 exploration blocks have been signed. Under NELP, 70 oil and gas discoveries have been made by private/joint venture (JV) companies in 20 blocks. With a view to accelerate further the pace of exploration, the eighth round of NELP was launched in April 2009.In the eighth round of NELP,70 exploration blocks comprising of 24 deepwater blocks,28 shallow water blocks and 18 onland blocks will be offered. Natural Gas Natural Gas has emerged as one of the most preferred fuel due to its environmentally benign nature, greater efficiency and cost effectiveness. At present, the main producers of natural gas are Oil and Natural Gas Corporation Limited (ONGC), Oil India Limited (OIL) and the Joint Ventures of Panna Mukta & Tapti, and Ravva. Out of the total production of around 96 MMSCMD, after internal consumption, LPG extraction and unavoidable flaring, around 73 MMSCMD is available for sale to various consumers. In addition, around 7 MMTPA of re-gasified LNG (about 23 MMSCMD) is also being supplied to domestic consumers. Gas produced by ONGC and OIL from the existing nominated blocks is sold at administered prices fixed by the Government. As against a total allocation of 150 MMSCMD of gas, actual supply under APM is presently around 53 MMSCMD. Public Sector Undertakings · Oil & Natural Gas Corporation Limited (ONGC) Oil & Natural Gas Commission (then Commission) was established on 14th August, 1956 as a statutory body under Oil & Natural Gas Commission Act (The ONGC Act), for the development of petroleum resources and sale of petroleum products. ONGC was Converted into a Public Limited Company under the Companies Act, 1956 and named as ―Oil and Natural Gas Corporation Limited‖ with effect from February 1, 1994. ·
Oil India Limited (OIL) Oil India Limited (OIL), a Government of India Enterprise, under the administrative setup of Ministry of Petroleum and Natural Gas, is engaged in the business of exploration, production and transportation of crude oil and natural gas. The authorized capital of the company is Rs. 500.00 crores and the paid up capital of the company is Rs. 214.00 crore. OIL produces crude oil and natural gas from its oilfields in Assam and Arunachal Pradesh, non-associated gas from its fields in western Rajasthan and processes LPG from the natural gas in Assam. The Company presently has operational areas in Assam, Arunachal Pradesh, Mizoram, Orissa, Uttar Pradesh, Uttarakhand and Rajasthan in the country.
OIL is operating in 19 nominated ML and 19 nominated PELs. The Company has acquired participating interest in a total of 21 NELP blocks up to the end of NELP-VI bidding round with the right of Operatorship in respect of 12 blocks. The Company also holds Participating Interests (Pis) in another four Pre-NELP JV blocks in India and Production Sharing Interest (PSI) in one Joint Venture Contract with other partners in Arunachal Pradesh. OIL is presently active overseas in seven countries, viz. Libya, Gabon, Iran, Nigeria, Yemen, Sudan and Bangladesh, pursuing various upstream E&P activities. In addition, the Company is continuously scouting for suitable E&P opportunities in other countries like Syria, Indonesia, Oman, Kazakhastan, Russia, etc., either alone or with suitable partners.
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· GAIL (India) Limited GAIL (India) Limited, India‘s principal Gas Transmissi Tr ansmission on and Marketing Market ing Company, Company, was created in 1984 with the objective of accelerating and optimizing the effective and economic use of natural gas and its fractions to the benefit of national economy. In line with core objective of its incorporation, GAIL has, over the years, developed natural gas infrastructure for sustained development of gas market in the country. GAIL, in the last two decades of its existence, has created a sizeable natural gas market in the country and presently markets around 25 BCM of Natural Gas. GAIL handles around 28 BCM of Natural Gas through its Transmission Network. Currently, GAIL‘s market share in gas transmission and marketing is 79% and 70% respectively. Refining Capacity During the year 2008-09, domestic refinery production was 160.77 MMT. By the end of XI plan, refinery capacity is expected to reach 240.96 MMT per annum. The country is net exporter of petroleum products, and products like naphtha, petrol, diesel and Aviation Turbine Fuel (ATF) etc. were also exported during the year. At present, there are 20 refineries operating in the country, out of which 17 are in the public sector and 3 in the private sector. Out of 17 public sector refineries, 8 are owned by Indian Oil Corporation Limited (IOCL), 2 each by Chennai Petroleum Corporation Limited (a subsidiary of IOCL), Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL) and Oil and Natural Gas Corporation Limited, and 1 by Numaligarh Refinery Limited (a subsidiary of BPCL). The private sector refineries belong to Reliance Industries Limited and Essar Oil Limited.
· Chennai Petroleum Corporation Limited (CPCL) Chennai Petroleum Corporation Limited (CPCL) formerly known as Madras Refineries Limited was formed as a joint venture in 1965 between the Government of India (GOI), AMOCO India Inc., U.S.A. and National Iranian Oil Company (NIOC) having a share holding in the ratio 74%: 13%: and 13% respectively. In 1985, AMOCO disinvested in favor of GOI and the shareholding percentage of GOI and NIOC stood revised at 84.62 and 15.38 respectively. Later, GOI disinvested 16.92% of the paid up capital in favor of Unit Trust of India, Mutual Funds, Insurance Companies and Banks on 19th May 1992, thereby reducing its holding to 67.7%. A public issue of CPCL shares was also made in 1994. As a part of the restructuring steps taken up by the Government of India, Indian Oil Corporation Limited (IOCL) acquired equity from GOI in 2000-01. Currently, IOCL holds 51.88% while Naftiran Inter-trade Company Limited (an affiliate of NIOC) continued its holding at %.CPCL has two refineries, with a combined refining capacity of 10.5 million metric tonnes per annum (MMTPA). The Manali Refinery in Chennai has a capacity of 9.5 MMTPA and is one of the most complex refineries in India with Fuel, Lube, Wax and Petrochemical feedstock‘s production facilities. The second refinery at Cauvery Basin, Nagapattinam was set up initially with a capacity of 0.5 MMTPA in 1993 and later its capacity was enhanced to 1.0 MMTPA in 2002. · Bongaigaon Refinery & Petrochemicals Limited (BRPL) BRPL was incorporated on February 20,1974 , with the objective of installation of Refinery having crude processing capacity of 1 MMTPA and a Petrochemical Complex consisting of Xylene Dimethyl Terephthalate (DMT) and Polyester Staple Fibre (PSF) units. The crude processing capacity of the Refinery was enhanced to 2.35 MMTPA in 1995-96 by commissions of its Refinery Expansion Units. The authorized equity capital and the paid-up capital of the Company is Rs.200 crore and Rs.199.82 crore respectively. The Government of India disinvested its equity share of 74.46% to Indian Oil Corporation Limited (IOCL) in March, 2001 and hence BRPL became the subsidiary Company of IOCL on 29th March, 2001.
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· Numaligarh Refinery Limited (NRL) Numaligarh Ref inery, inery, Popularly known as ―Assam Accord Refinery‖ had been set up as a grass-root refinery at Numaligarh in the District of Golaghat (Assam) in fulfillment of the commitment made by Government of India in the historic ―Assam Accord‖, signed on 15th august, 1985 for providing the required thrust towards industrial and economic development of Assam. Both the Refinery and its adjacent Marketing Terminal were completed within the approved project cost of Rs.2724 crore. Commissioning process of Numaligarh Refinery was completed in June 2000 and commercial production commenced from 1st October, 2000. · Mangaore Refinery & Petrochemicals Limited (MRPL) (M RPL) Mangalore Refinery and Petrochemicals Limited (MRPL), first joint venture company for setting up a crude petroleum Refinery in India was formed in 1987 jointly by Hindustan Petroleum Corporation Limited along with Indian Rayon and Industries Limited and its associate companies (A.V. Birla Group). The refinery project was commissioned in March, 1996 with an actual capacity of 3.69 MMTPA. The expansion project of MRPL, having capacity of 9.69 MMTPA, was commissioned in April, 2001. The refinery is located at Mangalore on the western coast of India, primarily conceived to maximize middle distillates, such as kerosene and diesel. The refinery is designed to process light to heavy and sour to sweet crude. The performance of MRPL started deteriorating after dismantling of APM for refineries in April, 1998 and the Company came very close to becoming a sick company by 2002-03. With the approval of the Government, ONGC acquired the entire stake of Aditya Birla Group in MRPL for Rs.59.43 crore and also infused additional equity capital of Rs.600 crore in March, 2003 as part of the approved debt restructuring plan. With this, ONGC acquired 51% stake in the equity of MRPL. Thus, MRPL became a Government company within the meaning and scope of Section 617 of the Companies Act, 1956 and also a subsidiary company of ONGC. In June / July 2003, ONGC acquired 35.80 crore equity shares held by banks and financial institutions issued against part conversion of their loans in terms of debt restructuring plan, increasing its stake in MRPL to 71.62%. MRPL is the first refinery in India to produce Euro-III High Speed Diesel (HSD) and Euro-III Motor Spirit (Petrol).
Other Undertakings/organization Undertakings/organizationss · Directorate General of Hydrocarbons (DGH) The Directorate General of Hydrocarbons (DGH) was established under the administrative control of Ministry of Petroleum & Natural Gas by Government of India Resolution in 1993. Objectives of DGH are to promote sound management of the oil and natural gas resources having a balanced regard for environment, safety, technological and economic aspects of the petroleum activity. DGH has been entrusted with certain responsibilities concerning the Production Sharing Contracts for discovered fields and exploration blocks, promotion of investment and monitoring of E&P activities including review of reservoir performance of major fields. In addition, DGH is also engaged in opening up of new/unexplored areas for future exploration and development of nonconventional hydrocarbon energy sources. · Engineers India Limited (EIL) Engineers India Limited (EIL) was established in 1965 to provide engineering and related technical services for petroleum refineries and other related projects. Over the years, it has diversified into and excelled in various fields. EIL has emerged as Asia‘s leading design, engineering and turnkey contracting company in Petroleum Refining, Petrochemicals, Chemicals & Fertilizers, Pipelines, Offshore Oil & Gas, Onshore Oil &
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Gas, Terminals & Storages, Mining & Metallurgy and Infrastructure Engineers India is an ISO 9001:2000 accredited Company. · Balmer Lawrie & Co. Ltd. (BL) Balmer Lawrie & Co. Ltd. (BL) was established in 1867 as a Partnership Firm and was incorporated as Private Limited Company in 1924. It was subsequently converted into a Public Limited Company in the year 1936 with its Registered Office at Kolkata. Biecco Lawrie Limited (BLL), a Government of India Enterprise, under the administrative control of the Ministry of Petroleum & Natural Gas (MOP&NG), was established in 1919 and became a Government Company in 1972. This is a medium sized Engineering Unit with diversified activities having two factories located at Kolkata. · Oil Industry Development Board (OIDB) The Oil Industry (Development) Act, 1974 was enacted following successive and steep increase in the international prices of crude oil and petroleum products since early 1973, when the need of progressive self-reliance in petroleum and petroleum based industrial raw materials assumed great importance. · Oil Industry Safety Directorate (OISD) The Oil Industry Safety Directorate (OISD) assists Safety Council under Ministry of Petroleum & Natural Gas (MOP&NG) headed by Secretary, P&NG as Chairman and includes Additional / Joint Secretaries, Advisors in MOP&NG, Chief Executives of all Public Sector Undertakings (PSUs) under the Ministry, Chief Controller of Explosives (CCE), Advisor (Fire) of the Govt. of India, DGMS and the Director General of Factory Advice Service & Labour Institute etc. as members.
· Centre for High Technology (CHT) Centre for High Technology (CHT) was established in 1987 as a specialized agency of the oil industry to assess futuristic requirements, acquire, develop and adopt technologies in the field of refinery processes, petroleum products, additives, storage and handling of crude oil, products and gas.
· Petroleum India International (PII) Petroleum India International (PII) is a consortium of Public Sector Companies in the petroleum, Petrochemicals and engineering sector. The member companies include Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd., Bongaigaon Refinery & Petrochemicals Ltd., Chennai Petroleum Corporation Ltd., Engineers India Ltd., Hindustan Petroleum Corporation Ltd, Oil India Ltd and Indian Petrochemicals Corporation.
Petroleum Planning & Analysis Cell (PPAC) The Petroleum Planning & Analysis Cell (PPAC) was created w.e.f. 1st April 2002 after dismantling of the Administered Pricing Mechanism (APM) in the petroleum sector and abolition of the erstwhile Oil Coordination Committee (OCC). The Governing Body under the chairmanship of Secretary (PNG) and senior officials of MOPNG and Chief Executives of major oil and gas PSUs as members provides necessary supervision, guidelines in the functioning of PPAC. Investment Opportunities Petroleum products are the single largest merchandise export from India. Improved Oil Recovery (IOR) / Enhanced Oil Recovery (EOR) techniques Crude oil production from the deepwater block D6 in KG Basin · Use of improved improved technology
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· Extended oil field acquisition activities · Capacity utilization of refineries · Foreign company collaboration · End-user market and Infrastructure development · Setting up oil & gas courses at universities and training institutes · Opportunities for world-class service providers Initiatives National Auto Fuel Policy The Auto Fuel Policy aims to comprehensively and holistically address the issues of vehicular emissions, vehicular technologies, and auto fuel quality in a cost-efficient manner while ensuring the security of fuel supply. The policy objectives are:
(i) Ensure sustainable, safe, affordable and uninterrupted supplies of auto fuels of right quality to support social and economic development. One of the key factors for meeting this policy objective is to diversify the sources and reduce dependence on any single source of supply. (ii) Over the years, infrastructure for the import of crude and crude products, their processing and production, and storage and transportation has been created in the country. Considerable investment has been made in developing this infrastructure and the logistics for the distribution of petroleum products in the country. The Auto Fuel Policy is committed to an optimal utilization of such an infrastructure. (iii) Assess the future trends in emission and air quality requirements from the view point of public health, and establishment of a consistent framework within which different policy options to reduce emissions can be assessed. It is, therefore, required that environmental objectives for air quality be determined, emission reduction targets be established, input data on costs and benefits be collected and cost effective measures to reduce emissions be identified .Appropriate institutional arrangements to be put in place to where such activities can be handled effectively. (iv) Adopt such vehicular emission standards that they together with other measures, will be able to make a decisive impact on air quality, without placing an undue burden on the people. (v) Vehicular emission standards and auto fuel quality should offer choice to the citizens and equally a choice to automobile manufactures in matters of technology selection. Principles of widening the choice and promoting competition amongst automobile technologies, within the limits that are imposed by the availability of auto fuels and security of their supplies. (vi) As elsewhere in the world, the Government should decide only the vehicular mission standards and the corresponding fuel specifications without specifying vehicle technology and the type of fuel. (vii) The requirement of investments to reach vehicular technology and fuel quality of Euro III equivalent levels throughout the country is estimated in the range of Rs. 50,000 Rs. 60,000 crore. Therefore, to achieve the air quality targets by gradually improving emission standards and a phased up gradation of fuel quality and vehicular technology, taking note of the financial, technical and institutional considerations as also the absorptive capacity is required.
FDI Policy
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The present policy on FDI in the Petroleum & Natural Gas sector vide Press Note No 5 (2008) permits FDI up to 100% under the automatic route in all activities other than refining and including market study and formulation, investment/financing, setting up Infrastructure for marketing in Petroleum and Natural Gas Sector subject to sectoral Policy. In Refining, FDI up to 49% in case of Public Sector Undertakings, without involving any Divestment or dilution of domestic equity in existing public sector undertakings through Foreign Investment Promotion Board (FIPB) and FDI up to 100% is permitted in case of Private Companies under Automatic route subject to sectoral policy. Key Players: Indian Oil, Reliance, Bharat Petroleum, HP, ONGC, BP, BG Group, Gaz de France, Chevron Foreign Direct Investment (FDI) Policy The present policy on FDI in the petroleum & natural gas sector vide press note no 5 (2008) permits FDI up to 100% under the automatic route in all activities other than refining, investment/financing, setting up infrastructure for marketing in petroleum and natural gas sector subject to sectoral policy including market study and formulation.
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INTRODUCTION TO GAIL HR
The HR department comprise of two broad sections i.e., Human Resource and Human Resource development. The Human resource group integrates in it various functions like Industrial relations, employee services, policy, security and administration. On the other hand when we see the Human resource development section, it integrates recruitment, performance management group, career progression department, library maintenance, training & development group. The IR departments here deal with grievances of the employees and solve them with the help of their grievances redressal system. They generally deals with the two of their collectors i.e, GAIL officers association (GOA) which is for executives and the other is GAIL officers association which is for executives and the other is GAIL karamchari sang (GKS) which is for non executives. GAIL also has a online workflow through which employees can put their grievances to their respective Site HR , Corporate HR and Director HR, the advantage to making the system online is to enrich the system with features like traceability and accountability, when the user login to system, he fills the grievances form and submits then the system will generate the automatic registration number and also a link through which he can take the printout of his registered grievances, the system generates mail is automatically sent to the Site HR and the Site HR will revert back with relevant solutions in due consideration of his seniors. The employee services department in GAIL takes care of employees salary, claims, leave records, loans and advances, maintenance of files, lease and accommodation, registration, retirement and probation cases. There are several allowances given to the employess which includes children education assistance scheme, city compensation allowance, productivity allowance, dearness allowance, annual and promotional increment, transport subsidy. Advances like HRA , conveyance allowance , TA , DA ,work location related payments, transfer benefits. Recruitment department carries out the important work of meeting, manpower needs in GAIL in the company it is done through a proper recruitment policy, GAIL recruits through two different ways: 1. By visiting campus 2.Open recruitment on all India bases 33% are taken from the campus and remaining is recruited on all India bases by conducting a written test. There is a procedure for the site recruitment on the state level basis. The company has assigned his task to a single recruitment team. First of all these recruitment are calculated which is done with the help of standard mapping template of the every different location of the company. As per the policy the entry levels for the executive level are E1, E2, & E5. But at times at any other level employees can be recruited that depends on the situation. At staff level employees are recruited at S0, S3 & S5 levels. The pay packages given in the campus or all India basis recruitment are kept uniform. It can differ from location to location. As GAIL is a PSU it also follows the reservation norms. The job specification is done exquisitely. The various steps in the process are: 1. 2. 3. 4. 5. 6. 7.
Online filling of application form Scrutinizing the application form Rejection of the application if eligibility is not met Written test is conducted Calling for interview Interview Selection The interview panel consists of the board member, member of SC/ST, and also from the specialization for example – HR, Finance, Marketing etc. The main objectives of the recruitment/selection in GAIL is to plan the manpower recruitment and budget requirement of requisite human resource with necessary qualifications, skills, aptitude and experience, to focus on the proper placement of employees in jobs
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to which they are best suited taking into account their qualification, experience and aptitude.Generally the sources of recruitment which prevails in GAILs are:
Open recruitment on all India basis From reputed management institutes Open recruitment other than All India basis
There are three induction levels for executives where intake is done i.e.,- S0, S3, S5 for non executives and E1, E2, and E5 for executives. However, depending upon specific requirement appointment may be made at other than the induction level with the approval of Director. In the campus selection of the candidates the selection process includes group discussion followed by interview whereas when recruitment is done other than campus selection the recruitment process also includes written test followed by interview. The selection committee shall consist of not less than four members including the SC/ST representatives, wherever required. The appointing authority varies from post to post for example for E8 level it is Board of Directors, for E6-E7 it is the CMD, the appointing authority for the post of E1-E6 levels will be functional Directors, for S5-S6 the GM and for S4 and below is looked after by DGM. The rosters are maintained to make some seats available for reserved categories. Training and Development department deals with the development and training of the staff to meet the requirements of the company. The main focus of this section is :
Develop and design manpower development strategies and interventions in Technology and Management Areas. Research and Technology Development for effective processing, transmission and utilization of Natural Gas. Cover a wide spectrum of technical training programs and develop innovative, environment-friendly energy technologies and sources.
The quality objectives aim to provide a congenial learning environment and development of human resources. The aim of training and development section is to create total quality culture in terms of people, products and services, work life, safety, energy and environment. It is fully equipped to train manpower at all levels covering the entire range of activities related to gas transmission, petrochemicals and telecommunication. It shares the vision of GAIL and invites employees to join and further sharpen the knowledge, skills, attitude and the understanding of new technology. They are committed to impart internal or external training to all employees once a year and also committed to exposing the senior executives so international institutes of repute once every four years.
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PRISE SCHEME
Prise scheme deals with attaining higher levels of productivity, growth and prosperity of the Company by motivating and rewarding employees based on performance of individual, Work Centers and Company. All employees including Functional Directors and Company Trainees appointed on regular pay scale, deputationists to GAIL from Government/ PSUs opting for GAILs pay structure and GAIL employees on deputation secondment to Government / PSUs/ Joint Ventures will be eligible in terms of PRISE. The payments under PRISE shall be related to actual period of service rendered during the relevant financial year. PRISE payments in respect of deputationists to GAIL (except those who have opted for GAILs pay structure) are to be regulated in accordance with the terms and conditions of their deputation in GAIL. In case of any doubt, matter along with relevant supportive documents may be reffered to Corporate Office for review.
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Literature review on PMS Literature survey and details on Performance Management System
Performance appraisal is a formal structured system of measuring and evaluating an em ployee‘s job related behaviors and outcomes to discover how and why the employee is pre-
sently performing on the job and how the employee can perform more effectively in the future so that the employee organization and society all benefit According to Flippo ―performance appraisal is the systematic , periodic and an impartial rating of an employee‘s excellence in the matters pertaining to his present job and his potential
for a better job." The work performance of the subordinate is examined and discussed in the form of periodic interview with a structured formal interaction between a subordinate and supervisor to identify weaknesses and strengths of the subordinate as well as opportunities for improvement and skills development. The performance of each and every individual employee plays a major role to achieve organization goals and to sustain its growth in the present competitive world. The employee‘s performance should assess continuously to make
their contribution to higher extend. Objectives of Performance Management System ➢
To review the performance of the employees over a given period of time.
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To
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To help the management in exercising organizational control and provides feedback to the
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judge
the
gap
between
the
actual
and
the
desired
performance.
Employees regarding their past performance.
To help strengthening the relationship and communication between superior and Subordinates, management and employees.
➢
To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future, it also helps to reduce the grievances of the employees
➢
Provide information to assist in the other personal decisions in the organization.
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Provide clarity of the expectations and responsibilities of the functions to be performedby the employees. It helps to judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.
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Purposes of PMS
FACTOR
PERCENTAGE (%)
Payroll Compensation benefit
80
Training department needs
71
Healthy cause of gaping performance
76
Deciding future goals
42
Performance demotion & transfer
35
Other purposes
6
90 80 80
76 71
70 60 50
42
40
35
30 20 6
10 0 Payroll Compensation benefit
Training department needs
Healthy cause Deciding future Performance Other purposes of gaping goals demotion & performance transfer
Fig: - Michael Armstrong PMS
UNDERSTANDING PERFORMANCE MANAGEMENT There are five issues that need to be considered to obtain a full understanding of performance management: 1. The meaning of performance; 2. The significance of values; 3. The meaning of alignment; 4. Managing expectations; 5. The significance of discretionary behavior
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The sources of performance appraisal are ➢
Manager
and
➢
Self-Appraisal
➢
Subordinate
➢
Peer Appraisal and Team Appraisal
➢
Customer Appraisal
Supervisor
Appraisal
Appraisal
What is Performance Management? There are few comprehensive definitions of Performance Management. HM Treasury describe Performance Management as ― Managing the Performance of an organization or individual‖. Whilst this is not a precise definition grounded in literature it demonstrates the breadth of performance management and hence the difficulties in defining its scope, activities and practices. It demonstrates that performance management is concerned with the management of performance throughout the organization and as a result is a multidisciplinary activity. Further, in their Glossary of Performance Terms the Improvement Development Agency further suggest that “it involves you understanding and acting on performance issu es at each level of your organization, from individuals, teams and directorates, through to the organization itself. As well as involving performance measurement, systems and processes, performance management is about managing people and „ the way people within an organization operate and work together‟. Issues such as leadership, decision making, involving others, motivation, encouraging innovation, and risk taking are just as important to bring about improvement” This definition further demonstrates the breadth of the subject highlighting some of the activities involved in managing performance, requiring a range of different skills and functional approaches. This provides challenges of terminology when we discuss the subject. Academic research in particular tend to be undertaken in functional subject areas and often within organizations managers sit in functions and take a functional perspective on the subject of performance. Despite this the clear multidisciplinary, the field of performance management has developed from diverse origins. Different measurement and management techniques and approaches have developed independently. Financial and particularly management accounting have been concerned with measuring and controlling the financial performance of organisations, operations have been concerned with ―shop floor‖ performance often focusing on improving throughput and efficiency whether that be from a manufacturing or a service perspective, strategy have been concerned with developing plans to deliver future objectives (including planned performance) and personnel (or HR) have been concerned with managing the performance of people. It is relatively recently that performance management from these disparate disciplines has begun to converge and recognize the need for integration into a multidisciplinary approach to managing performance. The management discipline which most often associates itself with the term is in Human Resources, performance management is often associated with the management of the performance of people. However even in the HR field best practice emphasizes the contribution of people to the achievement of organizational performance. From the HR field Armstrong and
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Baron highlight the importance of performance management being strategic, integrated (vertical, functional, HR integration and integration of individual needs), concerned with performance improvement and concerned with development. The breadth of the subject area and lack of a concise definition make it difficult to identify the boundaries of what is and isn‘t performance management. The area which is most indic ative of the evolution of performance management, and the area perhaps has the most identifiable stream of literature is that of performance measurement, and in particular that of the Balanced Scorecard, with which in many people‘s eyes it has become synonymous. The B alanced Scorecard began life as an operational tool designed to measure and helps improve operational performance in a manufacturing organization. Once discovered by an accounting Professor, Bob Kaplan, its scope broadened to the measurement of organizational performance. It has now developed from a measurement tool into a strategic performance management approach of which measurement is but a small part. Balanced Scorecard is a much used and abused term, in the field but it is the most identifiable concept. However in order to study performance management the comprehensiveness of the subject must be reflected, recognizing its vertical and horizontal spread throughout organizations. With its origins in different management disciplines, performance management includes a variety of activities including the planning and execution of actions required to ensure performance objectives are achieved. Literature is drawn from various disciplines to reflect this.
Approaches to performance management Performance management and measurement are closely associated with the rise of interest in Management by Objectives (MBO) from the 1950s onwards. MBO involves senior managers setting indicators and targets in relation to desired outcomes but allowing local managers the autonomy to innovate to achieve these. However, more contemporary authors suggest that performance measurement is often used to insert more rigid controls over organisational processes to standardize delivery and improve efficiency. Integrating performance measurement with organisational learning provides an opportunity to learn lessons from previous delivery, confirming or denying underlying assumptions which act as a guide to action. Performance measurement in the public sector has been implemented generally in the context of increasing privatisation of public services and as a mechanism to ensure that contractors or public sector arms length delivery organisations act in the ways that the purchaser of services would want. Other prominent objectives underpinning performance measurement in the public sector relate to the potential to use performance data to aid public and political accountability. Performance measurement systems take different types of performance indicators and attempt to link them together, particularly to show the relationship between inputs (the resources devoted to a particular issue), outputs (the immediate results of activity, such as the number of interventions completed) and outcomes (the ultimate effects of interventions).
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Example performance measurement systems I. ‗Balanced Score Cards‘ ‗Performance Prisms‘. II.
Balance Score Cards Performance measurement does though have some acknowledged problems; notably the diversion of resources into data collection and measurement as opposed to delivery and so called ‗perverse incentives‘ where individual or organizational behaviour is diverted away from the ultimate objectives of the organisation. Performance measurement in Public Employment Services The role of the PES is to facilitate the bringing together of the supply and demand for labour, through both ‗passive‘ and ‗active‘ measures. Research on the use of performance measurement in PES suggests that it is widely used but that there have been many instances of common problems including perverse incentives to encourage ‗creaming and parking‘ behaviour where easy to place clients are prioritised over those requiring more help and who are arguably a more appropriate focus for PES attention. There is also a concern in the literature to avoid incentivising PES and their contractors to promote short-term rather than long-term outcomes, with some suggesting that longer-term measures of the sustainability and/or quality of employment gained as a result of PES interventions are needed to address this concern. The last decade has also seen a number of different initiatives in Europe to compare performance, for instance through the European PES Benchmarking Project. The performance frameworks identified display a number of key characteristics that help an organisation to identify an appropriate set of criteria against which to assess and manage their 24
performance : - The work of Kaplan and Norton (1992); and Keegan et al. (1989) emphasises the fact that the set of measures used by an organisation has to provide a "balanced" picture of the business. The set of measures should reflect financial and non-financial measures; internal and external measures; and efficiency and effectiveness measures. - The populated framework of measures should provide a succinct overview of the organisation’s performance. For example, the simplicity and intuitive logic of the Balanced Scorecard has been a major contributor to its widespread adoption as it is easily understood by users and applied to their organisation.
- Each framework demonstrates the need for organisations to implement a set of performance measures that is multi dimensional. This reflects the need to measure all the areas of performance that are im portant to the organisation‘s success. However there is no consensus over what the dimensions of performance are. The EFQM model provides the broadest indication of dimensions of performance to be measured. - The Performance Measurement Matrix (PMM) provides comprehensiveness. It is possible to map all possible measures of an organisation‘s performance onto the framework and identify where there are omissions or where there is a need for greater focus. However, the PMM provides little indication of the different dimensions of performance that should be measured.
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- The Tableau de Bord, along with the work of Bititci et al. (1998), explicitly demonstrates the fact that performance measures should be integrated both across the organisation's functions and through its hierarchy , encouraging congruence of goals and actions. - The Tableau de Bord and the work of Fitzgerld et al. (1991) explicitly, and the Balanced Scorecard and Performance Pyramid implicitly, explain how results are a function of determinates. This demonstrates the need to measure results and drivers of them so that the performance measurement system can provide data for monitoring past performance and planning future performance. This demonstrates the way in which measures contribute to an organisation‘s planning (feed forward) and control (feedback) system (Balla ntine and Brignall, 1994). Evolution of the Scorecard Concept By far the most well known and accepted approach to organisational performance management is the Balanced Scorecard. Some writers have suggested that 60 percent of Fortune 1000 companies have experimented with the BSC (Silk, and the latest data, from the Gartner Group, suggest that over 50% of large US firms had adopted the BSC by the end of 2000). Data collected by the Balanced Scorecard Collaborative suggest that of the firms not currently using the Balanced Scorecard, 43% are planning to use one soon. In a survey of management techniques and tool in 15 countries in North America, Europe, Asia, and South America Rigby (2001) finds that about 44% of organisations in North America utilise the BSC. Although when first introduced in 1992 it was promoted as a performance measurement system, the Balanced Scorecard has evolved somewhat. That evolution highlights some important issues regarding the management of organisational performance.
Originally the Balanced Scorecard prompted users to identify an equal number of measures in each of four perspectives: Financial perspective; Customer perspective; Internal perspective; Innovation and Learning perspective. This demonstrated the need to balance financial and non-financial measures; internal and external measures; leading and lagging measures; and short and long-term measures. The approach encouraged managers to overcome the shortcomings of traditional financial measurement and ensuring that managers don‘t take a narrow view of performance based on too few measures.
Performance PRISM Designing performance measurement systems is all about deciding which measures to select, and just as importantly, which measures to ignore. The principle behind the Performance Prism is that the number of measures should be limited to give clarity to what the organization is trying to achieve. Therefore The Performance Prism approach helps to build a stakeholder focused measurement and management system by answering a number of key questions: Stakeholder satisfaction .Who are our key stakeholders and what do they want and need? Stakeholder contribution. What do we want and need from our stakeholders on a reciprocal basis? Strategies. What strategies do we need to put in place to satisfy these twin sets of wants and needs? Processes. What processes do we need to put in place to enable us to execute our strategies? Capabilities. What capabilities do we need to put in place to allow us to operate and improve these processes? It should be noted that the Performance Prism is not a prescriptive measurement framework. Instead, the Performance Prism is a tool which can be used by management teams to influence their thinking about what the key questions
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are that they want to address when seeking to design their performance measures and measurement systems, and so manage their business. This approach it is argued, would satisfy both the resource-based theory of the firm (i.e. what resources form the firm) and the resource dependency view (i.e. what resources are critical to obtain). By using this approach organisations can explicitly link the processes that they undertake to the wants and needs of their stakeholders. At this level it is possible to make decision about priorities and objectives for individual activities and processes, and understand how actions at that level will affect stakeholders and their satisfaction. As management systems are designed to support the achievement of the organisation‘s strategy it is important that when the organisation‘s strategy changes so do the measures used to assess whether it is being executed. So regardless of the framework used to develop the original measures, over time these should change to reflect the organisation‘s changing circumstances and hence a measurement and management system should always be bespoke to reflect the strategy being pursued. The performance measurement revolution has prompted many organisations to implement new performance measurement and management systems, often at considerable expense. However, unlike the environment in which organisations operate, many such initiatives appear to be static. Senge (1992) argues that, in today's complex business world, organisations must be able to learn how to cope with continuous change in order to be successful. Goold and QuinnTP41PT ―in business that face rapidly chan ging environment, or in which strategy needs to change frequently and opportunistically, fixed strategy goals may be dysfunctional (they might conflict with a skilful manager‘s powers of intuition and judgement).‖ Further, Meyer and GuptaTP42PT argue that a number of factors, especially the tendency of performance measures to run down or to lose the capacity to discriminate good from bad performance, trigger ongoing creation of new performance measures different from and therefore weakly correlated with existing measures. Kennerley and Neely go on to identify the capabilities necessary to maintain a dynamic measurement system which changes to reflect the organisation‘s circumstances. These capabilities fall under the categories of Process, People, Culture and Systems. How should performance be managed? Identifying the right objectives and hence the right things to manage is all well and good, but without an effective decision making and action planning process it is a waste of effort. Fur44
thermore research by Ernst and Young on the ‗Measures that Matter‘ found that investors find strategy execution the most important factor when valuating companies, more important than the quality of the strategy being implemented. Despite this, relatively little attention is dedicated to the integration of planning (what should be managed) and execution (how should it be managed).
Processes and Systems for Managing Performance It is common to see performance reports used by Executives which consist of tables of data or limited visualisations of data which provide little insight into the actual performance situation or action that is required to improve. In the field of quality management, the Demming Cycle (sometimes known as the Shewhart or PDCA Cycle) is a well established improvement methodology which incorporates four stages Plan, Do, Check, Act. Primarily the Demming cycle is applied to individual processes however its constituent phases lie at the heart of performance management as they integrate planning, action and monitoring of performance to ensure continuous improvement and the achievement of objectives. Furthermore the Demming Cycle is all about learning – learning in a systematic way what works and what does not
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Extension of the Demming cycle principles to organizational level performance management can bring problems be problematic. It has become increasingly difficult to convert the large amounts of data available into meaningful information. Managers today complain of ―drow ning in data while thirsting for information‖. Organizations seem to be generating data at a much faster rate than any manager can master, and in parallel to that, the useful life of that data is collapsing. ―One of the most enduring traits of the information age is that we have f ocused too much on mastering transaction data and not enough on turning it into information and knowledge that can lead to business results. If the skills and knowledge of executives is to be fully exploited then the performance review process should focus their attention on discussing the issues raised by the performance measures and the actions necessary to meet organizational objectives, rather than trying to interpret what the measures actually say. To address this authors such as Newman, Rasiel and Friga and Kimberley and Bourne propose approaches which extend concepts in the Demming cycle process so that it integrate performance measurement into the broader performance management activities by ensuring there is a systematic approach to identifying objectives; collecting, analyzing and interpreting data; communicating insights; making decisions; and monitoring performance to ensure that objectives are achieved. Furthermore, Marchand et al highlight the need to integrate IT, people and practices to deliver insights and business results. This can be achieved by focusing on reporting insights to executives rather than performance data in practice this means:
Restructuring meetings based on the objectives of the organization. Focusing the agenda on the key performance outcomes represented on the organization‘s strategy map. The agenda should be a series of key questions for each of the key objectives i.e. ‗Is the objective being achieved?‘ and ‗If not why not?‘ Analysis and interpretation of data should be dealt with by specialists in these tasks (the role of ‗Performance Analysts‘) who identify what insights performance data provides. Performance analysts should be responsible for analysing performance measurement data presenting to executives the answers to the questions (backed up by analysed data) rather than providing the raw data itself. Analysis includes identification of the root causes of performance issues and analysts are encouraged to propose possible future actions based on their analysis. This enables the executives to focus their attention on discussing the issues raised and the actions necessary to meet organizational objectives. Communities of Practice to enable analysts to learn from each other, enabling improvement of analysis skills. They allow learning about best ways of communicating to the key decision makers, visualisation of messages and telling the story of the organisation‘s performance. Meetings should change from discussing performance data to identifying and agreeing future actions. Because this is a more effective use of time, board meetings can be more efficient. They should be supported by an issues management process that ensures actions are prioritised based on importance and that actions are completed as and when necessary.
Following these steps moves the focus performance management from review of past performance to the discussion of how strategy is executed to deliver future performance objectives. This focuses executive attention on the issues facing the organisation in the future and the achievement of strategic objectives. A systematic process for using performance measurement to check whether strategy is being implemented and whether performance is improving in line with strategic objectives as de53
scribed represent a process of single-loop strategic learning .
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Target setting and milestone setting have also been stressed as a critical for the effectiveness 54
of performance management and management . Guidelines regarding the identification and selection of these elements seem to be insufficient in the SPM literature. Kaplan and Norton (1996), for example, only recommend the use of ‗stretch targets‘. Ahn (2001) proposes that the interdependencies between the measures should be taken into account when quantifying the values of the targets to be attained each year. There is little evidence in relation to the use 55
of targets across broad multidimensional perspectives of performance. Johnston et al. have found that most continuous improvement targets are based on past performance; and that usually, targets are imposed by managers without consultation, with rewards linked to the achievement of those targets. This practice increases the level of resistance to targets and deteriorates the value of the PMS system. In the management control literature, a few more studies can be found regarding the target-setting process within accounting systems (e.g. Merchant and Manzoni, 1989.
Methods of PMS
There are two types :-
Traditional Method :Straight ranking method Man-to-Man comparison Paired comparison Grading Graphic rating Checklist Free essay Modern Method :Assessment Centre MBO 360 Degree Appraisal Human asset accounting Method Behaviorally anchored rating method
1. MBO Management by Objectives (MBO) is a process of agreeing upon objectives within an organization so that management and employees agree to the objectives and understand what they are in the organization. The term "management by objectives" was first popularized by Peter Drucker in his 1954 book 'The Practice of Management‗ . The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee‘s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.
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Features and Advantages Some of the important features and advantages of MBO are: Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment. Better communication and Coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period. Clarity of goals Limitations 1. It over-emphasizes the setting of goals over the working of a plan as a driver of outcomes. 2. It underemphasizes the importance of the environment or context in which the goals are set in .In1991 comprehensive review of thirty years of research on the impact of Management by Objectives, Robert Rodgers and John Hunter concluded that companies whose CEOs demonstrated high commitment to MBO showed, on average, a 56% gain in productivity. Companies with CEOs who showed low commitment only saw a 6% gain in productivity.
III.
It did not address the importance of successfully responding to obstacles and constraints as essential to reaching a goal. The model didn‘t adequately cope with the o bstacles of: Defects in resources, planning and methodology, The increasing burden of managing the information organization challenge, The impact of a rapidly changing environment, which could alter the landscape enough to make yesterday‘s goals and action plans irrelevant to the present. 4. Tug of war
IV.
3600 Feedback :
360-degree feedback, also known as multi-rater feedback, multisource feedback, or multisource assessment Performance-appraisal data collected from 'all around' an employee — his or her peers, subordinates, supervisors, and sometimes, from internal and external customers. Its main objective usually is to assess training and development needs and to provide competence-related information for succession planning — not promotion or pay increase. The results from 360-degree feedback are often used by the person receiving the feedback to plan training and development. Results are also used by some organizations in making administrative decisions, such as pay or promotion. When this is the case, the 360 assessment is for evaluation purposes, and is sometimes called a "360-degree review."
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LIMITATION
However, there is a great deal of controversy as to whether 360-degree feedback should be used exclusively for development purposes, or should be used for appraisal purposes as well 3. BEHAVIOURALLY ANCHORED RATING SCALE BARS Behaviorally Anchored Rating scales is a method that combines elements of the traditional rating scales and critical incidents methods. In order to construct BARS seven steps are followed as mentioned below: Examples of effective and ineffective behavior related to job are collected from people with knowledge of job. These behaviors are converted in to performance dimensions. A group of participants will be asked to reclassify the incidents. At this stage the incidents for which there is not 75% agreement are discarded as being too subjective. Then the above mentioned incidents are rated from one to nine on a scale. Finally about six to seven incidents for each performance dimensions- will be used as BARS. •
•
•
•
•
This is by far the best method used for a performance appraisal method
•
•
•
ADVANTAGES & LIMITATION Advantages:More accurate Clear standards Good for providing feedback BARS technique is more time-consuming and expensive than other appraisal tools.
4. HUMAN ASSET ACCOUNTING METOD The HAAM refers to activity devoted to attaching money estimates to the value of a firm‘s internal human organization and its external customer goodwill. The current value of a firm‘s human organization can be appraised by periodic me asurements of ‗Key causal‘ & ‗Intervening enterprise‘ Key causal variables Organization's management policies Business leadership Strategies Skills and behaviors Decisions Intervening enterprise variables Loyalties Attitudes Motivations Communication Decision making 5. STRAIGHT RANKING METHOD This is the most commonly used category rating method. The appraiser checks the appropriate place on the scale for each task listed.it is giving a rank
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to a person on his job performance against that of another member of a competitive group by placing him as number one or two or three in total group.its a merit based rating. 6. PAIRED COMPARISON METHOD Each employee‘s every trait is compared with all others in pairs one at a time using the same scale for performance. The numbers of times each individual is compared with another is recorded in a paper .Thes numbers yield the rank order of the entirs group.It makes judgement easier than ordinary ranking method. It is not suitable when group is large. 7. GRADING METHOD The rater considers certain features such as analytical ability,self;expression,job knowledge, leadership etc. and marks them accordingly to a scale. The actual performance is then compared with these grades and he is allocated the grade which best describes his performance. . 8. GRAPHIC OR LINEAR RATING The factors included in this rating system are Employee Characteristics & Employee Contribution. Employee Characteristics are:Initiative Leadership Dependability Attitude Enthusiasm Loyalty Creative ability Emotional ability Decisiveness Employee Contribution:Quantity and quality of work The responsibility assumed Specific goals achieved Regularity of attendance Versatility etc. These traits are evaluated to a continuous scale.
9. FORCED CHOICE DISTRIBUTION METHOD It was evolved after a great deal of research conducted for the military services during World War II It attempts to correct a rater‘s tendency to give consistently high or low ratings to all the employees. E.g.-The employee is a) Is punctual and careful b) Is a hard worker and co-operative c) Is dishonest and disloyal
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d) Is disinterested in work. The rater is asked to indicate which of the four phrases are most and least descriptive of the employee.
10. CHECKLIST METHOD Under this a rater does not evaluate employee performance, he supplies reports about is and the final rating is done by the personal department. A series of questions are presented concerning an employee and checks to indicate if the answer to a question about an employee is positive or negative. E.g.:1. Is the employee really interested in his job? yes/no 2. Does he show uniform behavior to all? yes/no It is difficult to assemble, analyse, and weigh a number of statements about employee characterstics and contribution. 11. FREE EASSAY METHOD Under this method, the supervisor makes a free form, open-ended appraisal of the employee in his own words and puts down his impression about the employee. No attempt is made to evaluate the employee in quantitative manner DRAWBACKS It‘s a subjective evaluation No common criteria for evaluation Supervisor is required to devote considerable time and thought.
12. GROUP APPRAISAL METHOD Under this method, employees are rated by a group. It consists their supervisor and three or four other supervisors who have some knowledge of their performance. Group discusses the standards and rate accordingly Very simple Devoid of bias Time consuming
1. 2. 3. 4. 5.
PROBLEMS OF APPRAISAL Hallo effect Leniency or strictness or constant error The central tendency problem Similarity error Social differentiation
Using measurement to challenge strategy – double loop learning In addition it is possible to use performance management to challenge whether the followed being applied is appropriate. Organizations such as Sears and the anonymous company in the study by the Institute of Employment Studies have used statistical analysis of performance measurement data to challenge whether the strategy being followed is leading to the desired outcomes. This enables double-loop strategic learning to be applied by challenging the assumptions that underpin the strategy of the organization. The Strategy Map forms a hypothe-
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sis of the drivers of performance. Gathering and analyzing performance measurement data to enables testing of this hypothesis, enabling executives to make informed decisions about whether the assumptions underpinning the strategy are valid and whether the strategy needs to be changed.
Integration within the SPM system and with other management control mechanisms If an organization is to comprehensively manage performance on an organization wide basis then the management system bust be integrated with other management control systems. Normally such systems refer to budgeting processes or compensation schemes. Little academic research exists on how to connect strategic performance management systems to accounting or to compensation systems. Only a few authors have started to investigate the integration of scorecard measures in compensation practices. For instance, a study conducted by a Hay Group‘s consultant, Manas (1999), has found that the linkage between SPM systems and compensation practices vary significantly from company to company. Out of fifteen companies studied, thirteen had used their scorecard for determining base pay. Six of them had linked the scorecard to annual incentives only; three to annual and long-term incentives; one to long-term incentives only; one to base pay and annual incentive; and two to base pay, annual and long-term incentives. None of them had linked the scorecard to base pay only or to base pay and long-term incentives
Overcoming the Barriers to Performance Management Implementation factors Authors highlight the importance of approaching the implementation of performance management from a change management perspective (e.g. Bourne et al, 2002; Kaplan and Norton, 2001; Kasurinen, 2002; McCunn, 1998). In this sense, factors such as the following are crucial for an effective SPM implementation. Top manager agreement, commitment and leadership - start with a clear agreement at the top on the strategy, goals, measures and the performance targets to be implemented Managers‟ participation and accountability - having the agreement, commitment and leadership at the top is insufficient if it does not go along with having the agreement, commitment and leadership of the rest of the management team. Furthermore, the involvement of employees is also crucial. Inviting managers and employees to assist on the development of the system facilitates their buy-in, and enhances their trust, understanding, and ownership of the performance measures It is also important to involve the Human Resources and the Information System functions. It is essential that managers become accountable for the performance being managed Training and education - employees at all levels need to learn the principles of the system, its measures, tools and procedures (Frigo and Krumwiede, 1999; Maisel, 2001; Kaplan and Norton, 2001). Individuals can distort the information system by smoothing, biasing, focusing, gaming, filtering, "illegal‖ acts so it is important to train and educate individuals on how to engage rather than bypass the causes of dysfunctional behaviours. Communication and feedback - The factor ―communication‖ is one of the most cited in the literature. When most authors stress its importance, they tend to focus on the reported feedback of measurement results to the employees (e.g. Forza and Salvador, 2000, 2001; Howell and Soucy, 1988; Keasy et al., 2000). Even so, there are other aspects related to communication that can affect the effectiveness of performance management. The change management literature highlights the relevance of verbal and non-verbal communication (e.g. presentations, manuals, conversations, newsletters, reports, etc.) used to clarify all aspects related to the measures, in particular and performance management in general; and to facilitate the buyin from the people in the organisation (Bourne et al. 2002b; Kaplan and Norton, 2001; Quinn, 1996; Schreuder, 1995) .
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SPM system information infrastructure - an information system should be designed for col-
lecting, analysing and reporting the data efficiently. If data is flawed, the data integration process is flawed, or its communication is flawed, then decisions based on that data are more likely to be flawed. Using an IT system to support these tasks seems to be critical. However, some caution is needed in relation to the use of IT since the capabilities of technology, in terms of data capture and manipulation, provide a great temptation for senior management to introduce new measures (Wilson, 2000). Another key issue about the design of an information infrastructure is mentioned by Mintzberg: ―the manager must be viewed not as a reflective planner but as an adaptive info rmation manipulator who seeks for trigger, speculative, current information. The manager, not the computer, is the real data bank of organisational information, even though he is a potential obstruction of the flow of information‖. With this statement, Mintzberg recalls that i nformation systems are normally designed by the specialists of the organisation for the specialists of the organisation, and therefore fail to serve managers‘ needs. Ongoing Performance Management
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Following a review of literature, Franco and Bourne identify the most significant factors affecting the use of performance management. These factors are heavily influenced by the change management literature reflecting the need not only to manage the implementation of a performance management system but also the ongoing change hat results from the review and management of performance. (1) Corporate culture - some studies highlight the need for a corporate culture that encourages team working, ownership of problems and risk-taking or entrepreneurship, while others emphasise the need for a corporate culture orientated to continuous improvement and use of the SPM system. (2) Alignment - the integration and linkage of individual strategies and goals, and the ‗good match‘ between managers‘ responsibilities and the performance being managed. (3) Review and update - a continuous review of the strategy, the performance being managed and systems and processes being used to manage. The focus of performance management should be to drive action for improvement and learning rather than control. There should also be focus on the development of action plans in order to explain how the gaps between performance measures and goals could be closed, and review their progress periodically. (4) Communication and reporting - of performance and progress. There is emphasis on the need for prompt and formal feedback. (5) Involvement of employees. There is consensus around the benefits of making everyone participate in the development of measures. Involvement in the selection and definition of measures can reduce employees and managers‘ resistance to performance management, and increase their usage level of performance measures. (6) Management understanding. (7) Compensation link – there is inconsistency in the literature regarding the linkage between incentive compensation and strategic performance measures. In addition, a lack of understanding around the concept of compensation seems to exist, since studies use the words ‗incentives‘, ‗rewards‘ and ‗co mpensation‘ interchangeably.
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(8) Management leadership and commitment - executive support, leadership and commitment. Management should have clear accountability and responsibility of measures and results. (9) Clear and balanced framework - as already discussed (10) Agreement on strategy and success map. (11) Data processes and IT support. Performance is an outcome of both organisational and human activities, positive performance outcomes only arise when the behaviour of employees is aligned with strategy and when employees are motivated. As a result it is crucial that performance management activities integrate culture, process, procedures and the management of people to generate learning and continually improve. Public Sector Performance and the Modernization Agenda
In many advanced economies, such as those of the Anglo-Saxon countries and Scandinavia, public services have come under increasing pressure to improve their efficiency and effectiveness, reduce their demands on taxpayers, but maintain the volume and quality of services supplied to the public. So significant has been the modernisation agenda in the Public Sector, that the phrases the ―new public sector‖ or ―New Public Management‖ (NPM) have been coined to describe them. In the drive to achieve this, public service organisations have been subjected to the introduction of various ‗private sector‘ management techniques, frequently complemented by the adoption of some form of neo-market system in which the purchasers and providers of public services are split and required to contract with each other (Brignall and Modell, 2000). Performance management, through the use of performance targets and league tables, has been one of the main tools used by the UK Government in its attempt to push through its modernisation programme and demonstrate that value for taxpayers money is being delivered. Despite Government intentions, media attention has focused on examples of performance targets, and pressure to achieve them, driving inappropriate behaviour. The case of Bristol Eye hospital cancelling follow-up appointments in order to meet waiting time targets lead to press headlines such as "Patients Blinded by NHS Targets". This is just one of many examples which highlight the problems that performance targets are causing. With examples such as this, and with a 20 per cent funding increase in the past two years having produced just 4 per cent more output, Public Sector workers, politicians and commentators doubt the value of using performance targets with broader questions raised about the applicability of private sector approaches to public sector organisations. Furthermore there is some case study evidence that to suggest that private sector approaches are not bringing productivity improvements. From Canadian experiences, Brown suggests that there are two main factors limiting the application of performance management approaches in the public sector: Unionisation limiting the ability to change working practices and the difficulty of measuring performance outcomes. Symon provides anecdotal support for the general resistance to change in the public 69
sector with preference for doing things as they have always been done . However there is also research that opposes this view, suggesting that it is possible to apply private sector approaches in general and performance management in particular in the public sector. In July 2003 a report by the Commons Public Administration Committee went further and argued that if used appropriately measurement can play a "vital part" in improvement efforts. Whilst research in South America suggests that an effective planning oriented approach to performance evaluation can effectively enhance democratic accountability, supporting the thesis that democratic accountability and public administration modernisation can be done together if performance management is done effectively.
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Following their extensive review of Performance Monitoring practice in the public sector the Royal Statistical Society Working Party on Performance Monitoring in the Public Services, suggest that Performance monitoring done well is broadly productive for those concerned. Done badly, it can be very costly and not merely ineffective but harmful and indeed destructive. Furthermore they identify various ways in which performance monitoring (and by implication performance management) should be improved in the public sector. In relative terms Performance management in the public sector is still in its infancy. The 1980s and 90s saw enormous interest in the subject with many leading companies redesigning their performance measurement and management systems to reflect their changing circumstances. This has resulted in over a decade of experience and research that has provided insight into the ways in which performance measurement and management can be used most effectively. Whilst by no means all of the practice in the Private Sector can be described as good and differences in context must always be considered, it would appear that there are lessons from the experience and research in the Private Sector that could assist the Public Sector overcome some of the performance management problems that are being experienced.
Conclusions This report reviews the extensive literature relating to organizational performance management. It is clear from the literature that to be effective performance measurement activities should be designed to (i) manage the right things and (ii) mange them properly. Many tools and frameworks are proposed for each of these attributes of performance management. However there are clear themes which underpin these activities. These can be summarized as: -
Performance management should be integrated horizontally across the organisation; The performance being managed should reflect the requirements, wants an needs of all of the key stakeholders of the organisation and not just reflect a limited set; Performance management should be integrated vertically linking the strategies an ob jectives of the organisation to the execution of activities which will enable their achievement; Explicit understanding of linkages across the vertical and horizontal integration (e.g. through success maps) enables consideration of conflicting priorities and trade-offs that need to be made in order to achieve overall objectives; The performance monitoring, review and action panning process should e structured around the strategic performance objectives of the organisation; Processes and systems should be designed to extract and communicate insights rather than performance data; All systems and processes should be aligned with each other, driving behavior towards the performance objectives; Effort should be dedicated to developing an appropriate culture to engage the organization‘s employees and elicit commitment to performance objectives.
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APPRAISAL SYSTEMS OF FEW COMPANIES IN INDIA
1. ONGC With a view to bringing about a performance driven culture within the organization, ONGC has an annual objective oriented performance Appraisal system, which is implemented uniformly across the Organization The appraisal system used in ONGC is the oldest one.It is a three tier system where an employee is evaluated in three stages by the Reporting Officer under whom employee is working. By the Reviewing Officer By the accepting officer Self appraisal is also there. Whilst many of the tools and frameworks proposed in the field of performance measurement and management have been designed for commercial organizations in the private sector, there is some evidence that some of these generic process focused principles are also applicable in the public and not for profit sectors. 2. NRL
The appraisal system implemented in NRL is CR. At first KPI s are fixed. Then each employee is appraised by his DMGR Here employees are appraised only by the superiors But very soon the appraisal system of NRL is supposed to be changed from CR to 360 degree appraisal.
3. IOC, 4.HPCL 5.BPCL 6.NTPC The PMS used by M/s IOC, HPCL, SAP are IT enabled. PMS in BPCL and NTPC are paper based M/s IOC follows a no pen – no paper approach only for executives. At IOC and at HPCL, the IT enablement has been achieved using separate servers with offline linkages to HR Master data. The package used is customer specific within house / consultants support.
At IOC, the database used is Oracle and Java is the programming language, package developed by third party solution provider. In absence of ERP payroll, the performance based incentives are paid by extracting information from data base.
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RESEARCH METHODOLOGY In order to accomplish the objectives of the study, it is essential to articulate the manner in which it is to be conducted, i.e., the research process is to be carried-out in a certain- framework. The research methodology, which follows, is the backbone of the study. Data Collection Sources Research work was done from two sources: (1) Primary data: Primary data was collected by questionnaire and interview in the organizations. The questionnaire comprised of closed and attitude questions. The opinion on existing Performance Appraisal practices and their affectivity were collected through questionnaire which was circulated to all the employees at all levels and the results have been analyzed on the basis of agree and disagree. The methodology for collection of data also included interviews and discussion with the top management of the organization
(2) Secondary data: It was collected by reviewing different literatures, from published books, management journals, articles published by the other researchers on 360 Degree Appraisal.
Sampling: The total sample size for this project was 30 employees. The information collected through above methods has been tabulated, analyzed and interpreted. Finally an overall assessment of the contribution of top management, supervisory staff has been made towards improving the effectiveness of the organization. TYPES OF RESEARCH Research methodology is a way to systematic solve the Research Problem. It is a Procedure, which is followed step by step to solve a particular research problem. There are basically four types of researches: 1 EXPLORATIVE RESEARCH 2 DESCRIPTIVE RESEARCH 3 DIAGNOSTIC RESEARCH 4 HYPOTHESIS TESTING RESEARCH Explorative Research: To gain familiarity with phenomenon or to achieve an insight into it. Descriptive Research: To poetry accurately the characteristics of the particular individual situation or a group. Diagnostic Research: To determine the frequency with which something occurs or with which it is associated with something else. Hypothesis Testing Research: To test a hypothesis of casual relationship between variables. The present project is Descriptive cum Explorative in nature. It is done to poetry accurately the characteristics of a particular individual situation or a group. The major purpose of the descriptive research is the description of the state of the affairs as it exits at present. The main characteristics of this method are that the researcher has no control over the variables; he can only report what has happened or what is happening.
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SAMPLING TECHNIQUE The sampling technique adopted for the study is non-probability Random sampling Technique according to the convenience of the researcher. A questionnaire was administered to employees of GAIL Info hub of different Departments like Finance Department, HR Department, G.P.C.T. Department, O & M Department, Business Information System Department and Gailtel Department. SAMPLE SIZE Data is collected using a sample of 32 employees of GAIL Info hub. SAMPLE DESCRIPTION The sample mainly consists of data from the primary sources that are utilized for the purpose of this study. This is done by means of administrating questionnaire to employees in different Departments. Secondary data like company journals, newsletters, records etc. were also relied on for retrieving further information. INSTRUMENTATION TECHNIQUE Questionnaire ACTUAL COLLECTION OF DATA Both secondary and primary sources of data are utilized for the purpose of this study. Primary data is collected by means of administering a questionnaire to the employees of GAIL Info hub of different Departments like Finance Department, HR Department, G.P.C.T. Department, O & M Department, Business Information System Department and Gailtel Department. Secondary data is collected from various records, manuals and other Sources of the HR Department. Sample
A finite subset of population, selected from it with the objective of investigating its properties called a sample. A sample is a representative part of the population. A sample of 30 respondents in total has been randomly selected. The response to various elements under each questions were tabulated for the purpose of various Stastical testing. Presentation of Data
The data are presented through charts and tables. Tools and Techniques for analysis and interpretation of data
MS EXCEL is used for analysis & interpretation of data.
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PRIMARY RESEARCH
The research is carried out with the help of a well prepared questionnaire to extract useful responses if the employees at the various level in the corporate office of the GAIL (India) Ltd. While preparing the questionnaire certain precautions were seriously followed to make it a logical one to meet the requirement of the project as it is considered to be in the well interest of the company and the trainee himself. The logic followed in this study is to get into details of the minor and major problems in the system. Also the various brighter sides of this process. Because, in this study the present system is to be opinionated by those who are evaluated by this.
DATA COLLECTION Primary data are in the form of ―raw material‖ to which stastical methods are applied for the purpose of analysis and interpretation. The primary sources are discussions with employees, data‘s collected throug h questionnaire. A questionnaire is designed as per the requirement of the project. Then targeting a certain no. of employees and this filled by them. The questionnaire is structured and wide extensive in order to fetch more information. This will help in getting an insight in to the problem from the point of view of the employees. The questionnaire was taken to the different employees. It has also descriptive questions to take more suggestions and feedback.
SECONDARY SOURCES Secondary data‘s are in the f orm of finished products as they have already been treated statistically in some form or other. The secondary data mainly consists of data and information collected from records, company websites and also discussion with the management of the organization. Secondary data was also collected from journals, magazines and books as studied in the course and in the GAIL Library.
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DATA ANALYSIS The data is collected through survey, books, reports, newspapers and internet. The survey is conducted among the employees of GAIL. The data collected by the researcher is tabulated and analyzed in such a way to make interpretations. Various steps, which are required to fulfill the purpose, i.e., editing, coding, and tabulating. Editing refers to separate, correct and modify the collected data. Coding refers to assigning number or other symbols to each answer for placing them in categories to prepare data for tabulation refers to bring together the similar data in rows and columns and totaling them in an accurate and meaningful manner. The collected data are analyzed and interpreted using tools and techniques. In order to understand the graph we have taken the help of the table given below this is the division of scores in the questionnaire. Level wise score Between -12 & -6 Between - 6 & 0 Between 0 & 6 Between 6 & 12
Effectiveness Poor Less Effective Good Very Good
So the analysis of questionnaire is given below:
Performance planning Performance planning is the first step in the performance management system. By performance planning we mean that the various goals and targets are decided for the employees. Planning performance can have two aspects that are:Organization and the employee and the second appraiser and appraise. A good PMS system tries to make a balance between these two different two polarities. Sometimes we call it a setting of performance standards. This is the first step in the whole process of performance appraisal, which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standard set performance of the employee cannot be measured; great care should be taken to describe the standards. One of the few good ways to do this is using the concept of ‗Management by Objectives‘ (MBO). It can be identified as a process whereby the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed.
With MBO, came the concept of SMART goals i.e. goals that are: Specific Measurable
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Achievable Realistic Time bound The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees. The focus is on future rather than on past. Goals and standard are set for the performance for the future with periodic reviews and feedback. Involving employees in the whole process of goal setting and increasing employee empowerment increase employee job satisfaction and commitment.
Therefore in the survey conducted in order to check these two parameters of the performance planning I took four specific questions two for the aspect of organization and the individual employee and other two are the another aspect of planning between the appraiser and the appraise, which are: Q1In GAIL PMS process strikes a balance between organizational and employee‘s goals. Q2 Meaningful and the time bound goals are carved out in Key Result Areas. Q3In deciding goals appraiser and appraise both have their mutual consent and involvement in the process. Q4 Parameters on which performance is measured are well understood by both appraiser and appraise. All the respondents gave their opinions about the problem and the suggestion. In the key finding of the analysis it comes to us that in both the aspects the first one performance planning between the organization and the employees shows more effectiveness than the performance planning between the appraiser and the appraise. We can understand this with the help of the following graph:
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Performance Planning Organization & employee
Appraiser & Appraise
6 5
5
4 2.5
2
1.5
0 level 1 -2
level2
level 3
level 4
level 5
-2 -3.5
-4
-4.5
-5
-6
-6
-8
In GAIL (India) Ltd. PMS process strikes a balance between organizational and em ployee‘s goals. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
0
disagree sdisagree
total
From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that PMS process strikes a balance between organizational and employees goals and 62.5% are agree, and only 6.25% are disagree.
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Meaningful and time bound goals are carved out in Key Result Areas. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree 120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
0
disagree sdisagree
total
Here we see that from total of 32 sample size, 62.5% are agree, that meaningful and time bound goals are carved out in Key Result Areas and 31.25% are strongly agree, while only 6.25% are disagree from this.
In deciding goals appraiser and appraise both have their mutual consent and involvement in the process. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree 120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
0
disagree sdisagree
total
From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, In deciding goals appraiser and appraise both have their mutual consent and involvement in the process, and 62.5% are agree, and only 6.25% are disagree.
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Parameters on which performance is measured are well understood by both appraiser & appraise. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree 120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
0
disagree sdisagree
total
From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, Parameters on which performance is measured are well understood by both appraiser & appraise, and 62.5% are agree, and only 6.25% are disagree.
Problem of Biasness The system has many challenges in its functioning as creating a rating instrument, errors in the evaluation, lack of competence, resistance, and biasness. Among all these problems biasness is very rampant in the various companies. This is existing as it deals with the performance of the human beings not the performance of the machines. Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the evaluator‘s rating for all other traits) etc. may creep in the appraisal process. The rater is supposed to exercise ob jectivity and fairness in evaluating and rating the performance of the employees. This parameter is taken to find the problems of biasness in the different levels. In order to carry out these two well structured questions were put to take the response of the employees at various levels. This problem directly influences the effectiveness of the performance appraisal system in the company. The questions designed for the responses are: Q1 The performance appraisal system in GAIL is bias free and fair. Q2 Some employees get undue favoritism/benefit of their closeness to their superiors.
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These were put randomly in the questionnaire and cross checked for the authenticity of responses of the employees. The findings showed that almost every level is effective by the biasness. This comes because of the subjectivity involved in the process of appraisal. The results depicts that the system has the problem of biasness at every level of the employees. Among all the levels E1 shows the high prevalence of the biasness. Appraiser and appraise both are approached for the responses. Almost every-one is doing both the roles in the company as an appraiser at the same time.
Biasness 2 1
1
0 -1
level1
level2
level3
level4
level5
-2 -2.5 -3 -3.5 -4 -5 -6
-6
-7 -8
-8
-9
From every level of employees we find the negative response. It seems here that the various parameters taken for the performance appraisal are susceptible to the subjectivity of an individual. Also the instances of getting undue favoritism or benefit of their closeness to the superior are prevalent. The Performance Appraisal System in the company is bias free and fair. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree 120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
0
disagree sdisagree
total
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From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, The Performance Appraisal System in the company is bias free and fair, and 62.5% are agree, and only 6.25% are disagree.
Some employees get undue favoritism/benefit of their closeness to their superiors. (1)Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree 120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
0
disagree sdisagree
total
From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, Some employees get undue favoritism/benefit of their closeness to their superiors, and 62.5% are agree, and only 6.25% are disagree.
Communication between Appraiser and Appraise Better communication – frequent reviews and interaction between superiors and subordinates helps to maintain harmonious relationship within the enterprise and also solve many problems faced during the period. Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluator. Therefore the parameter of the communication is taken to check its effectiveness, because in the cases of poor communication between appraiser and the appraise regarding the goal setting, daily performance reviews and the feedback passing in a proper way. So we put a question which was: Q1 PMS related communication between appraiser and appraise is open and frank. In this survey all the 32 respondents gave their responses. At all levels we got a different result, the analysis shows that at the E1 level communication effectiveness is poor and it becomes effective at E2 and E3 level it again goes down at the higher levels E4 and E5 levels. We can see this clearly from the following graph:
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COMMUNICATION 2 1.5
1.5
1
0 level1 -1
level2
level3
level4
level5
-1
-2
-3
-3 -3.5
-4
PMS related communication between Appraiser and appraise is open and frank. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
disagree
0
sdisagree
total
From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, PMS related communication between Appraiser and appraise is open and frank, and 62.5% are agree, and only 6.25% are disagree.
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AFTER APPRAISAL In this parameter it is to be decided that how important it is to measure the performance equally important is the appraisal process which emphasizes the need of counseling and feedback and a link with the rewards and recognitions with respect to the individual and team both. With the following two questions we tried to find the effectiveness of system on the basis of these two parameters. The questions are well structured and well understood and responded by the employees. Q1After appraisal the counseling and feedback mechanism are properly handled by the appraiser. Q2Individual and team performance are appropriately recognized & rewarded. The result of the analysis shows both the parameters are not fully contributing to the effectiveness of the PMS system. The feedback and counseling graph shows that at E1 level it is not well handled through it improves with the experience of the E1 employees till they reach the level E2 but further it declines at the higher levels E3, E4 and E5. This also finds a correlation with the communication and the appraiser training graph. Therefore if the problem of communication is overcome and appraisers are trained properly to handle the feedback and counseling then it will resultantly overcome this problem also.
FEEDBACK 3 2
2
1 0 LEVEL1 -1
LEVEL2
LEVEL3
LEVEL4
LEVEL5
-1
-2 -2.5 -3 -3.5 -4
-4
-5
In the parameter of rewards and recognition most of the employees think that the GAIL is not having a proper link between the performance and the rewards. From the level E1 to E5 every one is showing the negative response. The analysis concludes that there is a need to take note of these two things:
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REWARDS 0 LEVEL1
LEVEL2
LEVEL3
LEVEL4
LEVEL5
-0.5
-1
-1
-1.5
-2
-2
-2.5
-2
-2.5
-3
-3
-3.5
AFTER APPRAISAL
Feedback Rewards
3 2
2
1 0 LEVEL1 -1
LEVEL2
LEVEL3
-1
-1
LEVEL4
LEVEL5
-1.5 -2
-2
-2
-2.5 -3
-3 -3.5
-4
-4
-5
After Appraisal the counseling and feedback mechanism are properly handled by the Appraiser. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
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120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
disagree
0
sdisagree
total
From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, After Appraisal the counseling and feedback mechanism are properly handled by the Appraiser, and 62.5% are agree, and only 6.25% are disagree.
Individual and team performance are appropriately recognized and rewarded. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree 120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
0
disagree sdisagree
total
From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, Individual and team performance are appropriately recognized and rewarded, and 62.5% are agree, and only 6.25% are disagree.
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TRANSPARENCY Transparency is something that is needed to the effectiveness of the process and that leads the acceptance of performance management system in any company. To check the effectiveness of the transparency parameter in GAIL (India) Ltd, I have taken the response of 30 employees of level E1 to E5 by a question that is Q1Every employees know about the functioning of PMS properly. All the respondents gave their response. After analyzing I found that the transparency needs are more felt by the level E1 employees than the other level of the employees. With the increasing level the employees have shown higher transparency in the system now they are more aware of the PMS mechanism in the GAIL (India) Limited. The reason I found for this is the very short experience of the E1 level employees in the organization. For this I think there should be more focus on the training of the E1 level employees in GAIL (India) Ltd about the functioning and whole mechanism of performance appraisal in the company. The results found after the analysis are very obvious in the following graph:
TRANSPARENCY 3.5 3
3
2.5
2.5
2
2
1.5 1 0.5
1 0.5
0 LEVEL1
LEVEL2
LEVEL3
LEVEL4
LEVEL5
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Every employee knows about the functioning of PMS system properly. (1) Strongly Agree
(2) Agree
(3) Disagree
(4) Strongly Disagree
120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
0
disagree sdisagree
total
From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, Every employee knows about the functioning of PMS system properly and 62.5% are agree, and only 6.25% are disagree.
An open and frank system at company leads to the liberal distribution of high ratings. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
0
disagree sdisagree
total
From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, open and frank system at company leads to the liberal distribution of high ratings and 62.5% are agree, and only 6.25% are disagree.
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Training needs identification Here the responses were taken to find out whether the PMS system in helpful in identifying the training needs of an employee. As the performance is somehow related to the proper training of an individual. Also the system is supposed to help in developing their skills. In the annual process of the performance appraisal the appraisal form also provides the facility to mention the needs of training employees in the GAIL to check the effectiveness of the system in this respect. Q1. PMS is a good mechanism for training needs identification of an employee. Q2. PMS helps in developing their skills and improving their performance. For these two questions all 32 employees gave their response. In the findings the level wise response of the employees differs. In our result we find that the level E1, E2 and E3 responded positively and confirmed the effectiveness of the PMS system in identifying their training needs while above level E4, E5 showed some negative results related to the effectiveness of the system in this regard. We can show this with the help of the following graph.
Training Needs Identification
4 3.5 3
2 1.5 1
1
0 level1 -1
level2
level3
level4
level5
-1 -1.5
-2
Here the analysis is showing that the effectiveness of the PMS system in the employee level E1, E2 and E3 is comparatively good. Whereas in the level E4 and E5, it is less effective in identifying the training needs of the employees. It gives an idea that with rise in the level the standard of training is also more required. That is why the upper level of employees opinion about that the system is not much more effective in the identifying their training needs.
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PMS is a good mechanism for training needs identification of an employee. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
disagree
0
sdisagree
total
From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, PMS is a good mechanism for training needs identification of an employee and 62.5% are agree, and only 6.25% are disagree.
PMS helps employees in developing their skills and improving their performance. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
0
disagree sdisagree
total
From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, PMS helps employees in developing their skills and improving their performance and 62.5% are agree, and only 6.25% are disagree.
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PMS system provides role clarity and direction to employees in terms of their work. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
disagree
0
sdisagree
total
From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, PMS system provides role clarity and direction to employees in terms of their work and 62.5% are agree, and only 6.25% are disagree.
APPRAISER TRAINING Under this parameter the appraiser‘s training is considered to be very vital in the effectiv eness of the Performance Appraisal System. Earlier it was considered to be an unnecessary burden. But now as the more and more cases of biasness and the incapability of an Appraiser are arising. It has become very necessary to train the appraiser to make him more objective and fair in rating his subordinates. In order to check their response we put a question before them that is: Q1Appraisers are trained to measure the performance. All respondents gave their response and in the last two questions‘ answer where as an a ppraiser his suggestions are asked most of them conceded that they need to be trained. Here also from the level E1 to E5 their response is showing that the appraiser are not fully comduct the ratings of their subordinates in all the situations. This requirement increases from lower level to the higher level, which directly suggests that as the responsibility of being an appraiser increases they need to be trained. Also this shows a relation between the training of an appraiser and handling of feedback/counseling and problem of biasness.
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Appraiser Training 1 0.5
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LEVEL2
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-1 -1.5 -2
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-2.5 -3 -3.5 -4
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Appraisers are trained to measure the performance. (1) Strongly Agree (2) Agree (3) Disagree
(4) Strongly Disagree
120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
0
disagree sdisagree
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From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, Appraisers are trained to measure the performance and 62.5% are agree, and only 6.25% are disagree.
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EFFECTIVENESS OF THE e-PMS With the time things change and come into the different form with the help of the technology. GAIL (India) Ltd. also changed its old manual PMS system and adopted a new electronics PMS system only a few years back. This change in the process has brought more effectiveness in the matter of the time saving clarity in the whole process was considered by the employees in the company a question regarding this was put in the questionnaire. Q1The Electronics PMS is more effective than the Manual PMS. All 32 employees responded to it and their result depicted a note of effectiveness of the new system overall as well as every level wise. This new way of conducting the whole process of the performance appraisal has proved to be very simple, fast and a highly time saving tool in the hand of management. We can clearly understand this with the help of the following graph:
e-PMS effectiveness
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The Electronic PMS is more effective than the Manual PMS. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree 120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
0
disagree sdisagree
total
From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, The Electronic PMS is more effective than the Manual PMS and 62.5% are agree, and only 6.25% are disagree.
Individual Employee‘s Commitment For the success of any well managed program in the performance appraisal employees need to be more honest and dedicated towards it. Through this parameter tried to measure their honesty with respect to the self appraisal and getting benefit of their closeness to their superiors. It is not the fault of the system alone that is not showing its effectiveness in some of the parameters but employees are also responsible for not being honest in the self appraisal. To check this we took their response through the following two questions: Q1Some employees get undue favoritism / benefit of their closeness to their superiors. Q2Mostly employees are honest in their self appraisal. As a result of our analysis we found that the individual employee commitment is less effective at the lower levels than at the higher levels of the employees. This means at lower level the role of the appraiser is more crucial than the higher levels.
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Individual Employee Commitment 1 0.5 0
0 LEVEL1
LEVEL2
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Mostly employees are honest in their Self- Appraisal. (1) Strongly Agree (2) Agree (3) Disagree
(4) Strongly Disagree
120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
0
disagree sdisagree
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From the above graph, we see that among the total sample size of 32, i.e. in 100%, 31.25 strongly agree with this that, Mostly employees are honest in their SelfAppraisal and 62.5% are agree, and only 6.25% are disagree.
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Overall Effectiveness In GAIL (India) Limited the overall effectiveness of the PMS system is measured under this parameter. It is done through the response of questions put before the employees. A question asked is: Q1 PMS has been very successful in achieving the end results. After the analysis of the responses we found that the employees at level E1 think that the PMS has a scope of improvement in order to achieve its end results. But as the experience of employees increases they think that it has been successful in achieving its end results. But after the level of E3 employees showed a negative response and according to them the system has not been so successful in achieving its end results. One reason why at the higher level of management it is less effective may be these people have considered various other aspects of the PMS system. While at the lower level, employees are having a short term perspective of the PMS system at GAIL.
Overall Effectiveness 4
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PMS has been very successful in achieving the end results. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree 120 100
100
80 62.5
60
respondents %ge
40 32
31.25 20
20 10
6.25 2
0 sagree
agree
0
disagree sdisagree
total
In response of the questions asked by the employees, out of 32, 62.5 % are agree with i.e. PMS has been very successful in achieving the end results and 31.25% are strongly agree while only 6.25% are disagree with these.
Therefore to conclude I can say that PMS is not supposed to be an annual ritual. It should be aiming at a long term perspective, and it should be continuously modified with the new changes as suggested in employees‘ feedback, without changing its basic structure very fast because that will lead to chaos in the system.
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Recommendations and Suggestions In this part of the research I will include the various suggestions and recommendations given by the various respondents during the survey part. They just responded to the two open ended questions. Q1 If you were an appraiser what three things you would like to do to make the PMS more effective? Q2 Any three suggestions that would improve the performance appraisal system in GAIL. These questions are specially structured to find their opinions to improve the effectiveness of the system, or in other words how they want the system to function properly. In the first part their most frequent and recurrent and sensible recommendations and suggestions are coherently depicted. In the second part I as a trainee have given my suggestions and the useful ideas which I thought upon during the research with the help of various books over the subject and the other sources like internet and my interaction with the other summer trainees working on the similar subject in the other companies. I have tried to analyze these suggestions to the best of my capacity and knowledge. Besides this I have repeatedly discussed these with my guide, who using his practical experience of the working with the system helped me to synthesize various conclusions.
What the Respondents say in order to improve the PMS system . 1. In most of the responses 360 Degree Feedback implementation is strongly recommended to avoid the problem of biasness. 2. The process should be more on the quarterly basis which they think that will bring more relevance of the PMS in GAIL. Quarterly the system is thought to be more effective than the yearly which is said to formality. 3. Free and frank communication between the appraiser and appraise also there should be a mutual consent between these two while deciding the goals. 4. Counseling and feedback handling can be conducted timely if there is a planning of these two besides the planning the goals. 5. As far as performance parameters are conducted it should be more on the role and the function based 6. Reporting authority‘s recommendations should have maximum weightage. 7. Stepwise rating should be conveyed to appraise with a reason if ratings are graded by reporting/accepting officer.
down-
8. Most of the employees think that the transparency should be followed in the process. 9. The things which are suitable only should be implemented.
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10. If the company goal is clear and also there is a trust then only one thing is required from the employee that is honesty. 11. In GAIL employees think that the recommendations given by the appraiser are not taken seriously so far. If every year only few of the suggestions are entertained and paid a serious attention then system will reform itself and will become a GAIL PMS rather than a general PMS system. 12. Some employees feel that the organization should try to balance between organizational requirements with individual aspirations. 13. Even a need for the discussion between appraise and the appraiser over the way appraise has been appraised and the reasons for the same. This will lead to the greater transparency. 14. In order to identifying the various performance parameters and their targets balance card approach should be initiated. 15. Timely communication should be there because if everybody knows what needs to be done then there will be no difference over the ratings the appraise will already know it. 16. Appraise should be communicated in a joint meeting where appraise, appraiser (reporting officer), and reviewing officer are present about his weakness and strengths and then allowed to present his view point and only then should appraisal grade be given. 17. The PMS mechanism in the GAIL (India) Ltd should regularly analyze not only for its effectiveness but also for its efficiency.
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Suggestions and Recommendations by GAIL employees when they are playing a role of an appraiser. 1. Most of the employees think that there should be consent among team members for grading of an employee individual performance. 2. Most important thing for an appraiser is to build a trust. It is on the basis of this trust that an employee believes that he has been appraised fairly. 3. After counseling an appraiser is supposed to send feedback and various recommendations to the people who are associated with the PMS program. 4. As an appraiser one should keep track of the subordinates‘ achievements as well as shortcomings throughout the year, not only during the evaluation period. 5. Counseling is the core competent of the PMS. This should be done in an unbiased way. Also the appraiser should take it his moral responsibility to counsel his appraise properly. 6. Appraiser should be more conscious about the PMS throughout the year as his dedication can bring more accurate appraisal ratings. 7. If an appraiser is facing a difficulty in the process then he should tell it to the authority concerned within time and ask to arrange for an appraisal training. 8. In GAIL it should be maintained that the PMS is a continuous process and training for the important area should be available at all times. 9. Instead of a more formal system everything should be kept simple, and the appraisal form should be tried and tested time and again so that its applicability with the changing atmosphere can be maintained. 10. I f the system cannot be made quarterly then at least the feedback and counseling can be arranged in a periodic manner. 11. An appraiser should be asked for his continuous of likes and dislikes. With more and more unsuitability of his continuum should lead to the training and synthesizing.
As a trainee and as a student of this stream what I think to improve this appraisal system with respect to the above taken parameters is described below:
What I analyzed during my two months experience in GAIL while studying the PMS mechanism there is given through the suggestions which can be useful to the company.
While setting targets and goals it should be kept in mind that the jobs can‘t same in the matter of importance. Individual employee‘s competence to do a certain job will differ person to person.
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Define the purpose of the job, job duties, and responsibilities. Define performance goals with measureable outcomes. Hold interim discussions and provide feedback about the employee‘ s performance, preferably daily, summarized and discussed, at least, quarterly, (provide positive and constructive feedback).
FEEDBACK To give the proper feedback is also an important part of the process. Most of the appraiser in GAIL (India) Ltd is not bound to convey the necessary information to their subordinates. So, it gives rise to various problems like communication, biasness, transparency. If an appraiser is given the authority of appraising the employee then he should also be given the responsibility of giving feedback. It should be managed in such a way that the appraiser is bound to finish the feedback process before the next periodical appraisal of an employee.
How to give negative feedback
Giving negative feedback is never so easy. For this every appraiser should be trained how to handle it. With a calm mind having patience and a good sense of humour an appraiser can make it a simple job.
Required In GAIL (India) Ltd there is no issue that annual performance review be completed for every employee‘s. The Human Resources department provides a standard form and a required gra ding scale. Every manager dutifully fills out the form, or has the employee do it, then spends as little time as possible discussing it. Since the system is there to stay so the management needs to make it more useful by linking it more strongly to several other things like rewards, promotions etc.
Quarterly Review In recommending the quarterly review I have logic that most of the human beings have the tendency to perform in the eleventh hour. If we have quarterly review the employees will have four phases like this while in annual it is only once. Assuming you have been doing continual performance reviews as things happen, and more formal reviews every quarter, each of your employees will know how they are doing. Therefore, assembling their annual performance review is simply a matter of pulling material from their previous three quarterly reviews and adding the fourth quarter items. Make sure the employee understands that this is just a quarterly review so they can concentrate on what you are telling them, rather than worry about their grade. Also in this way we are able to find in which quarter the particular employee has not performed properly, and the training needs identified so will be more useful because he can have the benefit of the training during the next quarter and can increase his performance. Al-
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so if some goal is too difficult for him that can be revised timely. When an employee is failing at work, then we think ―What about the work system is causing the person to fail?‖ Most frequently, if the employees knows what they are supposed to do. It is time, tools, temperament or talent that can affect an employee‘s performance. Well, more frequent is better and less Formal is better. Better for both organization and the employee. If we have to do formal reviews, we should do them quarterly. Most of us can actually remember what has happened over the last three months. The best performance review is the ongoing review. Ask appraisers to work with their subordinates on how they are doing on a task by task basis – daily or weekly. Let them know right away what they are doing wrong so they can correct it now, not twelve months from now when it has become an ingrained habit.
How this quarterly review system be useful in GAIL (India) Limited.
The benefit to doing frequent (continual) performance evaluation is that they become less formal. Neither you nor the employee feels stressed about it. This can eliminate the kinds of extreme behavior.
Need of 360 Degree Feedback in GAIL (India) Limited: As suggested by most of the employees in GAIL that there is a need to implement the 360 degree feedback in order to counter the problems of biasness and transparency. In the following paragraph I will analyze the positives and negatives of the 360 degree feedback and its suitability in the company. One thing I would like to convey to the GAIL employees who has given the suggestions of implementing the 360 degree feedback before this they know the 360 degree feedback and how it is working in the other organization wherever it is implemented, implemented with care and training 360 degree feedback is a positive addition to your performance management system. Started haphazardly, because it‘s the current flavor in organizations, or because ―ev eryone‖ else is doing it, 360 degree feedback will cr eate a disaster from which you will require months and possibly years, to cover.
Understanding that the process is confidential, and the meaning of this confidentiality, Goals of the 360 degree feedback process. Methods used in administering the process. Understanding and filling out the instrument. What the organization will do with the data collected and expectation of the employees involved in the process.
360 degree feedback allows each individual to understand how this effectiveness as an employee, co-worker, or staff member is viewed by others. The most effective 360 degree feedback processes provide feedback that is based on behaviors that other employees can see:
Select the feedback tool and process, Select the raters,
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Use the feedback, Review the feedback, and Manage and integrate the process into a larger performance management system.
Different organizations differ in their approach to 360 degree feedback. For GAIL it is necessary to first remove the other problems with the PMS system and then think about the 360 degree feedback. As the organization becomes more comfortable with and has fully integrated this overall performance management system, 360 degree feedback can be effectively introduced. As GAIL is more team-oriented organizations, so 360 degree feedback will have more value for every person in the organization.
Concern about the Impact of 360 Degree Feedback In working with organizations, one of the biggest fears people have about 360 degree feedback is that a group of anonymous people will determine their raises, promotions, and standing. If this is the process of course results are trustworthy : people want to provide feedback, but for the most part, co-workers do not want responsibility for ―bad things‖ happening to their colleagues. The measurement used to determine compensation in such a system includes meeting measurable goals, attendance, and contribution. The 360 degree feedback is used for development. Carried out effectively, people begin to trust that the Goals of the 360 degree feedback process are truly developmental. Consequently, employees become more comfortable providing legitimate and useful feedback to each other. In GAIL (India) Ltd the best thing is that the company has successfully implemented the electronics PMS that makes the data collecting process more easy and confidential, Because in the 360 degree feedback there is a burden of data collecting as now the number of people giving the ratings for a particular employee has increased. So in order to finish the process timely we need a fast tool that is electronic PMS. There are several important questions to ask and answer the method used provides multi-rater feedback.
Selection of Raters in 360 Degree Feedback It is important that allow employee input the rater selection process. Perhaps the employee selects several peers, customers, direct reports and knowledgeable workers. Then the managers select several more.
The supervisors of the employee and the employee who is receiving feedback shows always fill out the 360 Degree instrument. The individual‘s rating of his own performance is impo rtant for later comparison with the rater group‘s feedback, and the boss‘s feedback is impo rtant too., especially since, in most instruments, the feedback of the direct supervisor is not averaged with the feedback from others raters. In developing your 360 degree feedback process, I recommend a shared process selecting raters, always.
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CONCLUSION In the analysis we come to know about the effectiveness of the PMS system in GAIL. Also some of the major challenges this system is facing in its functioning. The various parameters are taken to check the effectiveness of the PMS mechanism. In parameters like transparency, effectiveness of the electronic version of PMS, training needs identification the employees of GAIL responded positively. This shows that the system Maintain a good effectiveness in these parameters. Though there is still some scope for improvement in transparency as the lower level employees E1, E2 respond that they need to know more about the PMS mechanism. So, a training program can be designed for the employees who are new in the company. But there is also a place for concern in some of the parameters like biasness, after appraisal handling of the feedback and counseling and link with the rewards. At lower level employees the problem of biasness is more felt by the employees. In suggestions of the employees appraiser training is strongly recommended. The logic behind this is that a trained appraiser would be able to handle the complexities of the appraisal system; also the feedback handling especially of negative feedback handing can be managed successfully. The quarter review is considered to be a solution of most of the problems like performance planning and a timely action over the feedback of the appraisers, and if somebody requires any training he can be availed of it. In the next quarter he can take benefit of his training. Most of the employee recommended the 360 Degree Feedback as a solution to the prevalent problem of biasness. But till the current PMS system will not become a mature mechanism which also depends on the employees, a 360 degree feedback cannot be implemented. If it is applied drastically then it would have very bad repercussions. As the performance appraisal system in GAIL is well designed it needs only to get modified according to the changing times without changing its basic structure. Being a PSU also there are some confinements over it.
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Questionnaire On The Effectiveness of PMS In GAIL Dear Sir/Madam, For the completion of my project it‘s important to have the general information about the company which can be derived from, one to one interaction and with the help of the questionnaire.
Since this is to be used for the purpose of analysis only and information collected would be strictly confidential. Grade Working Since Please tick (
Qualification Functions ) mark the relevant answer as provided against each question.
In GAIL (India) Ltd. PMS process strikes a balance between organizational and em ployee‘s goals. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
Meaningful and time bound goals are carved out in Key Result Areas. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
In deciding goals appraiser and appraise both have their mutual consent and involvement in the process. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
Parameters on which performance is measured are well understood by both appraiser & appraise. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
The Performance Appraisal System in the company is bias free and fair. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
After Appraisal the counseling and feedback mechanism are properly handled by the Appraiser. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
PMS related communication between Appraiser and appraise is open and frank. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree Every employee knows about the functioning of PMS system properly. (1) Strongly Agree
(2) Agree
(3) Disagree
(4) Strongly Disagree
PMS helps employees in developing their skills and improving their performance. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
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Some employees get undue favoritism/benefit of their closeness to their superiors. (1)Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
Appraisers are trained to measure the performance. (1) Strongly Agree (2) Agree (3) Disagree
(4) Strongly Disagree
An open and frank system at company leads to the liberal distribution of high ratings. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
PMS has been very successful in achieving the end results. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
The Electronic PMS is more effective than the Manual PMS. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
Last few months before the appraisal are most crucial than the initial period in influencing the assessment of the superior. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
Only a small percentage of employees should be rated as outstanding since the ratings ought to be relative. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
Mostly employees are honest in their Self- Appraisal. (1) Strongly Agree (2) Agree (3) Disagree
(4) Strongly Disagree
PMS system provides role clarity and direction to employees in terms of their work. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
PMS is a good mechanism for training needs identification of an employee. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
Individual and team performance are appropriately recognized and rewarded. (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
I expect an increase in Salary/Reward on getting Outstanding Rating? (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
Performance Appraisal must be developed such that it aims for betterment of Employees? (1) Strongly Agree (2) Agree (3) Disagree (4) Strongly Disagree
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If you were an Appraiser what were things you would like to do to make the PMS more effective. (1)……………………………………………………………………………… (2)……………………………………………………………………………… (3)……………………………………………………………………………… (4)……………………………………………………………………………… (5)………………………………………………………………………………
Comment on the overall effectiveness of PMS in your Organization. ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… …………………………………………………………………………………
Thanks for your precious time
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