Measuring Effectiveness of

Performance Management
System in North Delhi Power
Ltd

Submitted to –
Prof. Pankaj Kumar
IIM Lucknow

Submitted by –
GROUP-3
Yogita (PGP23092)
Veena N H (PGP24112)
Kopal Verma (PGP24141)
Parthiban (PGP24148)
Vaibhav Goel (PGP24170)

11/25/2009
 Table of Contents

TABLE OF CONTENTS...............................................................................III
EXECUTIVE SUMMARY..............................................................................IV
LIST OF TABLES........................................................................................V
LIST OF FIGURES......................................................................................V
INTRODUCTION.......................................................................................VI
ABOUT THE ORGANIZATION.....................................................................VII
PERFORMANCE MANAGEMENT SYSTEM IN NDPL......................................VIII
INITIATIVES TO BUILD A PERFORMANCE ORIENTED CULTURE:...............................................................IX

RESEARCH OBJECTIVES.............................................................................X
RESEARCH METHODOLOGY.......................................................................X
SAMPLING AND DATA COLLECTION METHODS............................................X
LIMITATIONS AND SCOPE OF RESEARCH...................................................XI
PARAMETERS TO BE EVALUATED..............................................................XI
ROLE CLARITY: THE PURPOSE OF THE KPA’S IS TO BRING OUT GREATER
ROLE CLARITY AND ENSURE A COMMON UNDERSTANDING BETWEEN
APPRAISER AND APPRAISEE FROM THE VERY BEGINNING. THE PURPOSE OF
IDENTIFYING OBJECTIVES IS TO ESTABLISH MUTUALLY ACCEPTABLE WORK
STANDARDS THAT MAY REDUCE SUBJECTIVITY IN THE FINAL ASSESSMENT.
THIS FORMS THE BASIC FRAMEWORK IN RELATION TO WHICH
DEVELOPMENT EFFORTS ARE TO BE DIRECTED. WITHOUT THESE A SHARPER
FOCUS ON THE CAPABILITY REQUIREMENT TO PERFORM VARIOUS TASKS
CANNOT BE ACHIEVED. ...........................................................................XI
DATA ANALYSIS.....................................................................................XIII
3.1 ROLE CLARITY ........................................................................................................XIII
3.2 IMPROVED COMMUNICATION ..........................................................................................XV
3.3 TRAINING AND DEVELOPMENTAL NEED .............................................................................XIX
3.4 PLANNING ............................................................................................................XXIII
3.5 MOTIVATION .........................................................................................................XXIV
3.6 MEASURE OF PERFORMANCE .......................................................................................XXVI
FACTORS CONTRIBUTING TO PERFORMANCE MEASUREMENT ............................................................XXIX
CONCLUSION........................................................................................XXX
RECOMMENDATIONS............................................................................XXXI
REFERENCES......................................................................................XXXII
SHAY S. TZAFRIR, GEDALIAHU H. HAREL, YEHUDA BARUCH AND SHIMON L.
DOLAN. THE CONSEQUENCES OF EMERGING HRM PRACTICES FOR
EMPLOYEES' TRUST IN THEIR MANAGERS.............................................XXXII
 Executive Summary
In every organization it is important that goals set for the employees are in sync with the
company’s goals. For achieving these set of goals, it is important that the performance of
employees is regularly monitored and improved. To ensure continuous improvement in
the employee’s performance, interactions with employees at regular intervals are
essential. Performance Management Systems are tools to achieve this. Performance
Management by definition is a process that consolidates goal setting, performance
appraisal and development in to a single common system, the aim of which is to ensure
that the employee’s performance is supporting the company’s strategic aims.
This study focuses on performance management system at NDPL and evaluates
effectiveness of the system on parameters like role clarity, Motivation, Employee
involvement, planning, training and developmental needs and communication.
The methodology of research adopted for the project is Survey based. The survey is used
to determine the employee’s perspective of PMS. The questionnaire for employers
includes questions related to the performance metrics considered for appraising the
employees, adherence to Performance Management processes, how far are the
management objectives met, adequate understanding among the managers of the PMS
and sensitivity to subordinate expectations and aspirations, efforts to boost employee
performance, and feedback.
The study reveals that the PMS in NDPL performs well on role clarity and planning
parameters. However the score on parameters like motivation, developmental needs and
periodic review is low.
We therefore recommend that the organization should invest in the training and
developmental needs, periodic performance reviews and in programs which help the
employees to understand and know the repercussions of their ratings on future.
 List of Tables

TABLE 1: ROLE EXPECTATION.................................................................XIII

TABLE 2: KPAS UNDERSTANDING...........................................................XIV
TABLE 3: JOINT KNOWLEDGE...................................................................XV
TABLE 4: OPEN DISCUSSION...................................................................XVI
TABLE 5: COMMUNICATION OF BUSINESS PLANS....................................XVII
TABLE 6: FUTURE IMPLICATIONS..........................................................XVIII
TABLE 7: PERIODIC ORIENTATION PROGRAMMES.....................................XIX
TABLE 8: TRAINING AND DEVELOPMENT..................................................XX
TABLE 9: UNDERSTANDING FACTORS AFFECTING PERFORMANCE.............XXI
TABLE 10: DEVELOPMENTAL NEEDS.......................................................XXII
TABLE 11: STRENGTHS AND WEAKNESSES............................................XXIII
TABLE 12: PLANNING...........................................................................XXIV
TABLE 13: MOTIVATION........................................................................XXV
TABLE 14: GOAL ACHIEVEMENT............................................................XXVI
TABLE 15: MEASURE OF PERFORMANCE...............................................XXVII
TABLE 16: REFLECT COMPETENCIES....................................................XXVIII
TABLE 17: PERIODIC REVIEW..............................................................XXVIII
TABLE 18............................................................................................XXIX
TABLE 19.............................................................................................XXX

List of Figures

FIGURE 1: ROLE EXPECTATION...............................................................XIV

FIGURE 2: KPAS UNDERSTANDING..........................................................XIV
FIGURE 3: JOINT KNOWLEDGE.................................................................XV
FIGURE 4: OPEN DISCUSSION.................................................................XVI
FIGURE 5: COMMUNICATION OF BUSINESS PLANS..................................XVII
FIGURE 6: FUTURE IMPLICATIONS.........................................................XVIII
FIGURE 7: PERIODIC ORIENTATION PROGRAMMES...................................XIX
FIGURE 8: TRAINING AND DEVELOPMENT.................................................XX
FIGURE 9: UNDERSTANDING FACTORS AFFECTING PERFORMANCE...........XXI
FIGURE 10: DEVELOPMENTAL NEEDS.....................................................XXII
FIGURE 11: STRENGTHS AND WEAKNESSES..........................................XXIII
FIGURE 12: PLANNING.........................................................................XXIV
FIGURE 13: MOTIVATION.......................................................................XXV
FIGURE 14: GOAL ACHIEVEMENT..........................................................XXVI
FIGURE 15: MEASURE OF PERFORMANCE.............................................XXVII
FIGURE 16: REFLECT COMPETENCIES..................................................XXVIII
FIGURE 17: PERIODIC REVIEW..............................................................XXIX

Introduction
Research cited in the Harvard Business Review suggests that companies which utilise
effective performance management systems may perform better in financial terms than
those which do not (Rheem 1996, 3–4), although direct cause–effect relationships are
inherently problematic (Colbert 2004). In particular, companies which manage the
performance of their people effectively are more likely to outperform than those which
do not (McDonald and Smith 1995).
Success or failure in performance management depends on organizational philosophies,
and the attitudes and skills of those responsible for its implementation and administration,
together with the acceptance, commitment and ownership of appraisers and appraisees
(Lawler 1994; Hedge and Teachout 2000). A particular programme’s effectiveness may
also be influenced by the notions of ‘procedural fairness’ and ‘distributive justice’
(Gabris and Ihrke 2000), where ‘procedural fairness’ refers to the employees’ perception
of the programme’s overall process equity, and where ‘distributive justice’ is linked to
perceptions of the fairness of associated rewards and recognition outcomes.
Supporters of performance review and management systems such as Drucker (1954),
Cascio (1996), and Wilson (2001), argue that performance review programmes are the
logical, and preferable, means to appraise, to develop, and to effectively utilise,
employees’ knowledge and capabilities.

About the organization

North Delhi Power Limited (NDPL) is a joint venture between Tata Power Company and
the Government of NCT of Delhi with the majority stake being held by Tata Power. It
distributes electricity in North & North West parts of Delhi and serves a populace of 50
lakh. The company started operations on July 1, 2002 post the unbundling of erstwhile
Delhi Vidyut Board. With a registered consumer base of around 10 lakh and a peak load
of around 1180 MW, the company’s operations span across an area of 510 sq kms. NDPL
has been the frontrunner in implementing power distribution reforms in the capital city
and is acknowledged for its consumer friendly practices.

NDPL is the first power distribution utility from India to have won the prestigious Edison
Award in the international category. The prestigious award is given annually by the
Edison Electric Institute (EEI) to honour both international and U.S. electric companies
for outstanding contributions to the advancement of the Power industry.

NDPL was also conferred the ‘Asian Utility of the Year 2008’ award by Asian Power and
is also the winner of Palladium Balanced Scorecard Hall of Fame Award.
NDPL has the distinction of being the youngest company and the first power utility in
India to receive the prestigious CII EXIM Award for ‘Strong Commitment to Excel’. It is
also the only distribution utility to receive the ISO 9001, ISO 14001 and OHSAS 18001
certification. NDPL has also been conferred the ‘National Award for Meritorious
Performance’ by the President of India.

Performance management system in NDPL

Performance Management Philosophy

• To create a congruence between the objectives of the organization, individual

departments and employees of NDPL.
• To help employees to consciously aim at and improve upon their performance and
thus organizational effectiveness.
• To facilitate and equip employees suitably for current and future responsibilities
• To create a sense of fairness among officers about the systems of assessment and
reward

Balance Scorecard (OPMS & DPMS)

• Tool for aligning the objectives of the organization as a whole with departments
and individual employees.
• Mobilise change through executive leadership.
• Sound strategy map at the corporate and divisional level.
• Undertaking initiatives to contribute to the achievement of targets
• Translate strategy into operational terms - Key Performance Indicators identified
and targets set for measuring performance at all levels.
• Undertaking initiatives to contribute to the achievement of targets.
 • Align the organisation to the strategy cascading and establishing linkages with
individual performance.

Objectives of Performance Management System

Performance Planning:
Defines expectations from an individual –in terms of what he has to achieve in the
form of the objectives & how performance will be measured.
Managing Performance:
Action taken to achieve the desired objective which includes a continuous process
of providing feedback on performance, conducting informal progress reviews,
coaching, reviewing objectives and dealing with performance problems where
necessary.
Performance Review:
Individual performance review happens on-line when an annual review of
performance takes place, covering achievements, progress and problems. This
leads to performance ratings. Introduction of Electronic PMS (e-PMS) has
benefited the organization in terms of empowerment, transparency, speed and
automated information for management analysis and decision.
Identifying training needs:
The training needs identified serve as an input while formulating the training
calendar. This would help an employee extend his/her knowledge & skills and
enhance capabilities to improve performance in specified areas.

Initiatives to build a performance oriented culture:

• Defining Career progression for all levels

• Conducting Employee Engagement Survey.
• Reward & recognition policy
• Element of flexible pay and performance bonus in the pay structure
• Customised electronic appraisal system to enable tracking of goals, mid-term
review and achievement of targets.
 • Emphasis on competence enhancement- Competency framework of Tata
Leadership Practices (TLPs) adopted.
• Competency manual prepared- detailing Tata Leadership Practices (TLP).
• Conducting assessment centers for evaluation against competencies and to
identify opportunity for development of employees.
• Formulation of Personal Development Plans
• Conducting Leadership Development Programs -Training imparted for
developing critical competencies.
• Evaluation of Training effectiveness

Research Objectives
To study the performance appraisal system at NDPL and to measure its effectiveness

Research methodology
The methodology of research adopted for the project is Survey based. The survey
included questions related to the demographic information, experience with PMS,
indicators of employee’s performance, and expectations from the PMS, problems and
gaps in the existing PMS, adequate follow-up from employers regarding set objectives
and recommended trainings, employee’s recommendations.
The questionnaire also includes questions related to the performance metrics considered
for appraising the employees, adherence to Performance Management processes, how far
are the management objectives met, adequate understanding among the managers of the
PMS and sensitivity to subordinate expectations and aspirations, efforts to boost
employee performance, and feedback mechanisms in place.
An online survey is administered to employees of NDPL. Response is collected from
employees of different cadre and is analyzed with SPSS.

Sampling and Data collection methods

The data source: Primary as well as Secondary.
The research approach: Survey Method.
The research instrument: Questionnaire.
The respondents: The Managers & Employees of NDPL.
The primary data was collected by interacting with few employees of NDPL. A concise
questionnaire was prepared on the basis of the information collected from these
employees.

Limitations and Scope of Research

Following are the limitations that we had faced in the project with respect to the analysis
and data.
• The sample size is particularly small.
• The data collected is limited to NDPL organization, a power sector.
Therefore, care needs to be taken in generalizing the findings to other
organizations or to other sectors.

Parameters to be evaluated
Role clarity: The purpose of the KPA’s is to bring out greater role clarity and ensure a
common understanding between appraiser and appraisee from the very beginning.
The purpose of identifying objectives is to establish mutually acceptable work
standards that may reduce subjectivity in the final assessment. This forms the basic
framework in relation to which development efforts are to be directed. Without these
a sharper focus on the capability requirement to perform various tasks cannot be
achieved.

Motivation: One of the most important outcomes of Performance management system

is commitment and motivation by Increasing people’s sense of personal value and
enhancing the individual’s perception of empowerment (Bevan and Thompson 1992;
Fletcher and Williams 1992; Taylor and Pierce 1999). Thus in order to achieve improved
performance, PMS should be designed in a way so as to motivate employees and make
them strive for continuous improvements.
Measure of performance: PMS improved organizational performance (Bevan and
Thompson 1992); improved management performance (Smither, London, Vasilopoulos,
Reilly, Millsap and Salvemini 1995). The PMS should help to measure the performance
of employees in an objective manner. Research cited in the Harvard Business Review
suggests that companies which utilize effective performance management systems may
perform better in financial terms than those which do not (Rheem 1996, 3–4)

Communication and employee involvement: Communication is a reflection of the

organizational culture. Organizational communication was found to be positively
correlated with organizational effectiveness (Baruch and Gebbie, 1998). Moreover,
organizational communication generates the big picture for employees, helping them
understand the role of the self within the organizational system (Bowen and Lawler,
1995).
Involving the employee as an equal in the review process is more likely (according to
Meyer) to increase commitment to action plans, making the entire process both more
satisfying and more productive. However, in a study by Carroll & Tosi (1973) results
indicated that "subordinate participation in setting goals did not result in higher levels of
perceived goal success or in more favorable attitudes towards a superior or toward
management by objectives". It may be that in some situations, employee involvement is
seen as positive, and in other not.

Training and developmental need: As per research findings, employee

development is expected to create a sense of certainty, enhance employability and faith in
management. Among its positive outcomes, this investment increases employability for
the individual employee (Waterman et al., 1994).An effective PMS should recognize the
developmental needs of employee and provide necessary support to build upon the
weaknesses.

Motivation and empowerment: Empowerment in an organizational context can be

viewed as a set of conditions necessary for intrinsic task motivation (Conger and
Kanungo, 1988). It can also be seen as a set of motivational techniques, contrasting
traditional paradigms such as Taylorism which is predominantly based on strong
managerial control, first stated by Plato some 2,400 years ago (see Clemense and Mayer,
1987).

An effective PMS should help to build trust, provide vision, remove performance-
blocking barriers, offer encouragement, motivate, and coach employees. More and more
managers are being advised that effective leaders share power and responsibility with
their employees.

Data Analysis
3.1 Role Clarity

Each employee grasp what is expected of him with the help of the
appraisal system
Valid
Frequency Percent Percent Cumulative Percent
Valid Agree 20 41.7 41.7 41.7
Disagree 2 4.2 4.2 45.8
Neutral 16 33.3 33.3 79.2
Strongly
2 4.2 4.2 83.3
Agree
strongly
8 16.7 16.7 100.0
disagree
Total 48 100.0 100.0
Table 1: Role Expectation
 Figure 1: Role Expectation
As seen in the table1 and figure 1, 45.9% agree that performance appraisal provides them
role clarity. However 20.9% feel that PMS does not provide any role clarity which is a
matter of concern.

Are KPAs and KRAs clearly

understood by the
employees?
No 14 0.28 28
Yes 36 0.72 72
Total 50 100 100%
Table 2: KPAs Understanding

Figure 2: KPAs Understanding

As per table 2 and figure 2, only 72% of the employees know their
KPAs and KRAs. Hence effort should be made to explain KPAs and KRAs
to the employees.

PMS helps appraisee and appraiser to have joint knowledge of each

team members job
Valid Cumulative
Frequency Percent Percent Percent
Valid Agree 14 29.2 29.2 29.2
Disagree 12 25.0 25.0 54.2
Neutral 12 25.0 25.0 79.2
Strongly
2 4.2 4.2 83.3
Agree
strongly
8 16.7 16.7 100.0
disagree
Total 48 100.0 100.0
Table 3: Joint Knowledge

Figure 3: Joint Knowledge

According to table 3 and figure 3, only 33.4% agree that PMS helps appraisee and
appraiser to have joint knowledge of each team members job while 41.7% disagree which
is a matter of concern.

3.2 Improved Communication

 PMS encourages open discussion between appraiser and appraisee
through reviews
Valid Cumulative
Frequency Percent Percent Percent
Valid Agree 12 25.0 25.0 25.0
Disagree 8 16.7 16.7 41.7
Neutral 18 37.5 37.5 79.2
Strongly
4 8.3 8.3 87.5
Agree
Strongly
6 12.5 12.5 100.0
Disagree
Total 48 100.0 100.0
Table 4: Open discussion

Figure 4: Open Discussion

According to table 4 and figure 4, only 33.3% employees think PMS encourages open
discussion between appraisers and appraisee through reviews while 29.2% do not think
so. Hence organization can take sufficient steps to encourage open discussions during
reviews.
 PMS aids the communication of business plans to staff
Valid Cumulative
Frequency Percent Percent Percent
Valid Agree 4 8.3 8.3 8.3
Disagree 12 25.0 25.0 33.3
Neutral 22 45.8 45.8 79.2
Strongly Agree 4 8.3 8.3 87.5
Strongly
6 12.5 12.5 100.0
Disagree
Total 48 100.0 100.0
Table 5: Communication of Business Plans

Figure 5: Communication of Business Plans

According to table 5 and figure 5, only 16.6% employees think PMS aids the
communication of business plans to staff while 37.5% do not think so.
Hence organization can take sufficient steps to improve communication of business
plans.
 Objectives and future implications\Repercussions of PMS are clear
to employees and mangers
Valid Cumulative
Frequency Percent Percent Percent
Valid Agree 18 37.5 37.5 37.5
Disagree 6 12.5 12.5 50.0
Neutral 14 29.2 29.2 79.2
Strongly Agree 2 4.2 4.2 83.3
Strongly
8 16.7 16.7 100.0
Disagree
Total 48 100.0 100.0
Table 6: Future Implications

Figure 6: Future Implications

According to table 6 and figure 6, only 41.7% employees think objectives and future
implications\repercussions of PMS are clear while 29.2% do not think so.
Hence sufficient steps should be taken so that objectives and future
implications\Repercussions of PMS are made clear to employees and managers.
 Periodic orientation programmes are conducted to explain the
objectives and process of PMS
Cumulative
Frequency Percent Valid Percent Percent
Valid Agree 8 16.7 16.7 16.7
Disagree 6 12.5 12.5 29.2
Neutral 24 50.0 50.0 79.2
Strongly
10 20.8 20.8 100.0
Disagree
Total 48 100.0 100.0
Table 7: Periodic Orientation Programmes

Figure 7: Periodic Orientation Programmes

According to table 7 and figure 7, only 16.7% employees think periodic orientation
programs are conducted to explain the objectives and process of PMS while 33.3% do not
think so.

3.3 Training and Developmental Need

 With the help of PMS managers know the support they need to give
for achieving departmental goals
Cumulative
Frequency Percent Valid Percent Percent
Valid Agree 14 29.2 29.2 29.2
Disagree 12 25.0 25.0 54.2
Neutral 14 29.2 29.2 83.3
Strongly Agree 2 4.2 4.2 87.5
Strongly
6 12.5 12.5 100.0
Disagree
Total 48 100.0 100.0
Table 8: Training and Development

Figure 8: Training and Development

According to table 8 and figure 8, only 33.4% employees think that with the help of
PMS, managers know the support they need to give for achieving departmental goals
objectives and future implications\repercussions of PMS are clear while 37.5% do not
think so. Hence organization should take sufficient measures regarding training and
development needs of the employees.
 PMS helps the appraisee and appraiser to have the common
understanding of the factors affecting the performance of the
appraisee
Cumulative
Frequency Percent Valid Percent Percent
Valid Agree 14 29.2 29.2 29.2
Disagree 6 12.5 12.5 41.7
Neutral 16 33.3 33.3 75.0
Strongly Agree 6 12.5 12.5 87.5
Strongly
6 12.5 12.5 100.0
Disagree
Total 48 100.0 100.0
Table 9: Understanding factors affecting performance

Figure 9: Understanding factors affecting performance

According to table 9 and figure 9, only 41.7% employees think PMS helps the appraisee
and appraiser to have the common understanding of the factors affecting the performance
of the appraisee while 25% do not think so.
 PMS helps to identify the developmental needs for accomplishing
the departmental goals
Cumulative
Frequency Percent Valid Percent Percent
Valid Agree 16 33.3 33.3 33.3
Disagree 10 20.8 20.8 54.2
Neutral 16 33.3 33.3 87.5
Strongly Agree 2 4.2 4.2 91.7
Strongly
4 8.3 8.3 100.0
Disagree
Total 48 100.0 100.0
Table 10: Developmental Needs

Figure 10: Developmental Needs

According to table 10 and figure 10, only 37.5% employees think PMS helps to identify
the developmental needs for accomplishing the departmental goals while 29.1% do not
think so. Hence organization should take sufficient measures to identify development
needs.
 PMS provides scope for giving insights into strengths and
weaknesses of employees
Valid Cumulative
Frequency Percent Percent Percent
Valid Agree 12 25.0 25.0 25.0
Disagree 10 20.8 20.8 45.8
Neutral 16 33.3 33.3 79.2
Strongly Agree 4 8.3 8.3 87.5
Strongly
6 12.5 12.5 100.0
Disagree
Total 48 100.0 100.0
Table 11: Strengths and Weaknesses

Figure 11: Strengths and Weaknesses

According to table 11 and figure 11, only 33.3% employees think PMS provides scope
for giving insights into strengths and weaknesses of employees while 33.3% do not think
so.

3.4 Planning
 PMS helps managers to plan well the departmental goals and
their accomplishment
Valid Cumulative
Frequency Percent Percent Percent
Valid Agree 26 54.2 54.2 54.2
Disagree 4 8.3 8.3 62.5
Neutral 6 12.5 12.5 75.0
Strongly Agree 6 12.5 12.5 87.5
Strongly
6 12.5 12.5 100.0
Disagree
Total 48 100.0 100.0
Table 12: Planning

Figure 12: Planning

According to table 12 and figure 12, 66.7% employees think PMS helps managers to plan
well the departmental goals and their accomplishment while 20.8% do not think so.

3.5 Motivation
 PMS helps discover individual potential
Valid Cumulative
Frequency Percent Percent Percent
Valid Agree 14 29.2 29.2 29.2
Disagree 4 8.3 8.3 37.5
Neutral 14 29.2 29.2 66.7
Strongly Agree 6 12.5 12.5 79.2
Strongly
10 20.8 20.8 100.0
Disagree
Total 48 100.0 100.0
Table 13: Motivation

Figure 13: Motivation

According to table 13 and figure 13, only 43.7% employees think PMS helps discover
individual potential while 29.1% do not think so. Hence organization should take
sufficient measures to recognize potential.
 PMS acts as a catalyst to motivate the employees towards goal
achievement
Valid Cumulative
Frequency Percent Percent Percent
Valid Agree 14 29.2 29.2 29.2
Disagree 4 8.3 8.3 37.5
Neutral 14 29.2 29.2 66.7
Strongly
8 16.7 16.7 83.3
Agree
Strongly
8 16.7 16.7 100.0
Disagree
Total 48 100.0 100.0
Table 14: Goal Achievement

Figure 14: Goal Achievement

According to table 14 and figure 14, only 45.9% employees think PMS acts as a catalyst
to motivate the employees towards goal achievement PMS helps discover individual
potential while 25% do not think so.

3.6 Measure of Performance

 The data generated from PMS provides objective indications of
actual performance
Valid Cumulative
Frequency Percent Percent Percent
Valid Agree 16 33.3 33.3 33.3
Disagree 6 12.5 12.5 45.8
Neutral 12 25.0 25.0 70.8
Strongly Agree 4 8.3 8.3 79.2
Strongly
10 20.8 20.8 100.0
Disagree
Total 48 100.0 100.0
Table 15: Measure of performance

Figure 15: Measure of Performance

According to table 15 and figure 15, only 41.6% employees think that data generated
from PMS provides objective indications of actual performance while 33.3% do not think
so.

PMS provides scope for reflection and assessment of each appraisee

on the personality factors and other competencies
Valid Cumulative
Frequency Percent Percent Percent
Valid Agree 14 29.2 29.2 29.2
Disagree 8 16.7 16.7 45.8
Neutral 12 25.0 25.0 70.8
Strongly Agree 4 8.3 8.3 79.2
Strongly
10 20.8 20.8 100.0
Disagree
Total 48 100.0 100.0
 Table 16: Reflect competencies

Figure 16: Reflect competencies

According to table 16 and figure 16, only 37.5% employees think PMS provides scope
for reflection and assessment of each appraisee on the personality factors and other
competencies while 37.5% do not think so. Hence organization should take sufficient
measures so that PMS reflects competencies.

3.7 Periodic Review

How often does the manager discuss/performance counselling about the

accomplishments of the KPAs and KRAs with the employees?

Cumulative
Frequency Percent Valid Percent Percent

Valid monthly 4 8.0 8.0 8.0

quarterly 18 36.0 36.0 44.0

Yearly 28 56.0 56.0 100.0

Total 50 100.0 100.0

Table 17: Periodic Review
 Figure 17: Periodic Review

As shown by table 17 and figure 17, only 8 % of the respondents get the monthly
feedback on their performance while 36% and 56% get the feedback about their
performances quarterly and yearly respectively.

Factors contributing to performance measurement

Communalities

Initial Extraction

Monetary 1.000 .855

CareerGrowth 1.000 .736

RoleClarity 1.000 .898

TrainingNeeds 1.000 .739

Motivation 1.000 .740

Promotion 1.000 .792

Control 1.000 .801

ImprovedCommunication 1.000 .706

RecognizingAchievement 1.000 .791

ImprovedPerformance 1.000 .820

Extraction Method: Principal Component Analysis.

Table 18
 Extraction Sums of Squared
Initial Eigenvalues Loadings Rotation Sums of Squared Loadings

% of Cumulative % of Cumulative % of
Component Total Variance % Total Variance % Total Variance Cumulative %

1 6.522 65.216 65.216 6.522 65.216 65.216 4.589 45.893 45.893

2 1.357 13.575 78.791 1.357 13.575 78.791 3.290 32.898 78.791

3 .679 6.792 85.584

4 .426 4.264 89.848

5 .356 3.557 93.405

6 .237 2.370 95.775

7 .177 1.770 97.545

8 .099 .991 98.536

9 .083 .827 99.363

10 .064 .637 100.000

Table 19
As seen in table 17 and table 18, all the above factors are highly related to performance measurement.
Total Variance Explained

Conclusion
The study reveals that 72% of the employees understand their KPAs and KRAs and
approximately 50 % of the employees have a clear understanding of what is expected
from them to achieve the departmental and organizational targets. However 41.7%
employees don’t have the clear understanding of their team member goals.
On communication parameter only 33.3% employees think PMS encourages open
discussion between appraisers and appraisee through reviews. Only 41.7% employees
think objectives and future implications\repercussions of PMS are clear and 16.7%
employees think periodic orientation programs are conducted to explain the objectives
and process of PMS while 33.3% do not think so. Only 37.5% employees think PMS
helps to identify the developmental needs for accomplishing the departmental goals and
33.3% employees think PMS provides scope for giving insights into strengths and
weaknesses of employees.
The study also shows that 66.7% employees think PMS helps managers to plan well the
departmental goals and their accomplishment and only 45.9% employees think PMS acts
as a catalyst to motivate the employees towards goal achievement. Only 41.6%
employees think that data generated from PMS provides objective indications of actual
performance and 37.5% employees think PMS provides scope for reflection and
assessment of each appraisee on the personality factors and other competencies.
Also only 8 % of the employees get monthly feedback on their performance while 56%
get yearly feedback.

Recommendations

• The organisation should arrange training programs to educate the managers about
the whole process of PMS. This effect should trickle-down from the top to
bottom.
• Emphasis should be paid towards having periodic (continuous) performance
reviews rather than the yearly reviews on performance and any deviation from the
desired expectations should be corrected as soon as possible through timely
feedback.
• Human resource department should very clearly communicate the repercussions
of the PMS to employees and a proper documentation of the whole system should
be done.
• Mangers should promote open discussion while deciding the goals and KPAs of
the department in case of any conflict and it should be resolved through mutual
consensus.
 • PMS should be designed to help the employees realize their actual potential. For
example by setting arduous objectives and attaching lucrative rewards with it.

References
Shay S. Tzafrir, Gedaliahu H. Harel, Yehuda Baruch and Shimon L. Dolan. The
consequences of emerging HRM practices for employees' trust in their managers

Wimer, S., and K.M. Nowack. 1998. 13 common mistakes using 360-degree feedback.
Training and Development Journal; 52(5): 69–70.

Harper, S., and Vilkinas T. 2005. Determining the impact of an organisation’s

performance management system, Asia Pacific Journal of Human Resources; 43; 76

Alan R. Nankervis and Robert-Leigh Compton. 2006. Performance management: Theory

in practice, Asia Pacific Journal of Human Resources 2006; 44; 83

Official Website. North Delhi Power Limited, www.ndpl.com

Rao. T. V., HRD Score Card 2500 based on HRD Audit