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Performance

Management
System
in BHEL

Workshop on PMS organised by DPE


21st September, 2010

The e-enabled Performance


Management System for Executives

ABOUT BHEL
Indias Largest Engineering & Manufacturing
Enterprise in the Infrastructure Sector
> 50 years old Government owned Navaratna PSE
2009-10 revenues of Rs.34000 cr, PBT of Rs. 6591
cr.
65% share of Indias installed generation capacity
Power Generation & Transmission, Industry,
Transportation, Defence etc.
180 products
Presence in more than 70 countries

ABOUT BHEL
Large employee base
46,000 total employees
11,000 executives
All-India manufacturing, sales, support and
projects operations

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

STRUCTURE OF PRESENTATION

BACKGROUND
KEY FEATURES OF MAP
MAP TOOLS
ISSUES FACED
ISSUES IN IMPLEMENTING PRP

BACKGROUND OF MAP
ACR system was in operation upto 2000-01.
Lack of objectivity in appraisal was a common complaint. This was
mainly on account of the following:
No provision for performance planning at beginning of year to
define WHAT is to be done and HOW MUCH?
No visible co-relation between actual performance and final
assessment which was done basically on Traits & Competencies.
No provision for feedback since the system was Confidential.
Individuals did not know where they stood until the time of
promotions.

STRUCTURE OF PRESENTATION

BACKGROUND
KEY FEATURES OF MAP
MAP TOOLS
ISSUES FACED
ISSUES IN IMPLEMENTING PRP

KEY FEATURES OF MAP


Alignment & focus
Employees performance aligned to the goals of BHEL.
Objectivity
Measuring performance objectively based on targets
defined at the beginning of the year.
Transparency
Clear, transparent process of target setting and
sharing of assessment with individual.

KEY FEATURES OF MAP


Consistency
Consistent application of MAP tools across the
organisation (standard KRAs, Unit of measurement)
Differentiation
Identifying & rewarding high performers .
Development
Developing individual competence & capability
required for the role
e-Enablement
Web-based system linking over 100 locations, covering
around 11,000 executives.
Centralised monitoring for effective implementation

STRUCTURE OF PRESENTATION

BACKGROUND
KEY FEATURES OF MAP
MAP TOOLS
ISSUES FACED
ISSUES IN IMPLEMENTING PRP

MAP TOOLS
Balanced Scorecards
KRA Masters
Rating Scales
Differentiation Tool
Normalisation
e-Enabling MAP

TOOLS SUPPORTING VARIOUS


FEATURES OF MAP
FEATURES
OF MAP

MAP TOOL

Alignment

1.Scorecards: Cascading of parameters & targets


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

Objectivity

1.Performance Plan clearly defines KRAs & targets


at begining of year.
2.Rating Scales : Defining five levels of
performance during target setting.
3. Final assessment based on achievements
against pre-defined targets.

TOOLS SUPPORTING VARIOUS FEATURES OF MAP


FEATURES
OF MAP

MAP TOOL

Consistency

KRA MASTERS: Standard KRAs & their unit of


measurement. Used by all executives across the
company.
RATING SCALES: 5-point scale with targets set
at all levels.

Transparency

E-enablement: Sharing of entire process from


Performance Planning to Final Review including
final rating.

Differentiation Differentiating Tool (A2): To account for stretch


in performance in targets & Contribution to Group Objectives
levels
Normalisation Tool: To convert scores into
Ratings

TOOLS SUPPORTING VARIOUS FEATURES OF MAP


FEATURES

MAP TOOL

Developing
Individual
Competencies

Development Plan Section: Identifies role


based competencies for development

Centralised
monitoring

E- enablement: Enables centralised monitoring


& follow up for completion of activities at each
level (Appraisee, Appraiser, Reviewer etc.)

THE MAP CYCLE

THE MAP CYCLE


April-May

Performance
Planning

(Target setting)
Appraiser

Normalisation
May

Ongoing
Feedback
Appraisee

Final Review
April

Mid-year Review
October

STRUCTURE OF PRESENTATION

BACKGROUND
KEY FEATURES OF MAP
MAP TOOLS
ISSUES FACED
ISSUES IN IMPLEMENTING PRP

ISSUES FACED
PRP has made differentiation mandatory however,
Managers are uncomfortable as transparency makes
them answerable.
1. Tendency to give same score to majority
2. More vocal employees get better scores
3. People with softer targets get better scores
4. Assessment on absolute performance vs relative
ranking in relation to other employees.

STRUCTURE OF PRESENTATION

BACKGROUND
KEY FEATURES OF MAP
MAP TOOLS
ISSUES FACED
ISSUES IN IMPLEMENTING PRP

SOME ISSUES IN IMPLEMENTING PRP


Difficult to justify NIL payment to lowest performer as he
also contributes to overall Target. PRP Kitty could be
distributed in two parts:
1. Company performance
2. Individual performance.
Grade factor has large variation at the higher levels.
Performance Factor across 5 levels will create huge
difference in pay-out within same grade affecting Team
work.
Performance Rating of Directors & CMD.
Being a huge cultural shift
PRP differentials should be increased gradually

Thank you

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


EMPLOYEE
A

EMPLOYEE
B

EMPLOYEE
C

TARGET

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

ACHIEVEMENT

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

Assessment
on absolute
performance
Relative
ranking

Below
expectation

Met
expectation

Exceeded
expectation

CASCADE OF PERFORMANCE MEASURES THRU BALANCED SCORECARDS


STRATEGY MAP & MOU
BHELs Performance Measures and Targets
Financial

Customer

Process
Sector
Performance Measures & Targets

Company BSC

Capability

Unit
Performance Measures & Targets

Corporate Department & Function


Performance Measures & Targets

Financial

Customer

Financial

Customer

Financial

Customer

Process

Capability

Process

Capability

Process

Capability

Unit BSC

Departmental Measures & Targets


Product Groups
Financial
Process

Materials

Customer

Financial

Customer

Capability

Process

Capability

Planning
Financial
Process

Customer
Capability

Support
Services
Financial
Customer
Process

Capability

Other Services
Financial

Customer

Process

Capability

Deptt.
BSC

Individual & Team Measures


Measures Targets
Measures Targets
1.
1.
Measures
Targets
2. 1.
2. 1.
3. 2. 1.
3. 2. 1.
4. 3. 2.
4. 3. 2.
4. 3.
4. 3.
4.
4.

Measures Targets
Measures Targets
1.
1.
Measures
Targets
2. 1.
2. 1.
3. 2. 1.
3. 2. 1.
4. 3. 2.
4. 3. 2.
4. 3.
4. 3.
4.
4.

Measures Targets
Measures Targets
1.
1.
Targets
Measures
2. 1.
2. 1.
3. 2. 1.
3. 2. 1.
4. 3. 2.
4. 3. 2.
4. 3.
4. 3.
4.
4.

Measures Targets
Measures Targets
1.
1.
Targets
Measures
2. 1.
2. 1.
3. 2. 1.
3. 2. 1.
4. 3. 2.
4. 3. 2.
4. 3.
4. 3.
4.
4.

Measures Targets
Measures Targets
1.
1.
Targets
Measures
2. 1.
2. 1.
3. 2. 1.
3. 2. 1.
4. 3. 2.
4. 3. 2.
4. 3.
4. 3.
4.
4.

Indl.
Plans

MAP TOOLS

KRA MASTERS

What gets measured get done

1. Exhaustive list of Key Result Areas


identified in 24 functions to enable
executives prepare their plans.
2. Standard unit of measurement fixed
for each KRA for uniformity in
measurement.
3. KRAs classified into Operational and
Capability building categories.

MAP TOOLS

TOOL FOR DIFFERENTIATION


Factoring in softer & intangible aspects of
Performance in the overall assessment
Quality of work
Cost Consciousness
Process Orientation
Contribution to overall objectives of the Group
No two individuals within a group can have the
same aggregate score on the above factors
system driven check

MAP TOOLS

RATING SCALES
A 5-point scale to assess the extent of achievement
on KRA targets.
Used during Target Setting for each KRA.
The required level of achievement for each of the
other four ratings are also defined.

Significantly
Above
Expectations

Moderately
Above
Expectations

Meets
Expectations

Moderately
Below
Expectation

Significantly
Below
Expectations

MAP TOOLS

NORMALISATION
Process of categorising individuals within a department
into E / VG / G / F / P, based on Performance Scores.
Principle of Normal distribution used to define the
percentage in each category.
NORMALISATION MATRIX

MAP TOOLS

NORMALISATION
It ensures alignment between individual ratings and
performance of the Company, Unit & Deptt.
- Percentage of high performers (Rating E) in a Deptt.
that has achieved its performance objectives is greater
than the percentage of high performers in a Deptt. which
has not fully achieved its performance objectives.
- Percentage of high performers in a year in which the
company has met its objectives is greater than the year
when the company has not fully achieved its objectives.

KRA

Implementationof
Special
Improvement
Projectstaken
underIMPRESS

Item Weightage
(%)

Level

Target

0.0

30.0

45.0

60.0

75.0

Unit of Measurement

No. of days delayed from scheduled date

Scheduled Date

31-03-11

Action Plan, Resources,


Assumptions and Milestones

To complete and sucessfully implement the project within


schedule date. MILESTONE: 31st MARCH 2011

Special Improvement Project

Conversion of Long seam welding machine to Cirseam


welding machine(OD3)

KRA

Shopturnover
(Physical&/or
Financial)

Item Weightage
(%)

20

Level

Target

10169.0

8000.0

7000.0

6000.0

5000.0

Unit of Measurement

Action Plan, Resources,


Assumptions and Milestones

Money value/ Numbers/ Tonne.


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

Performance Cycle Tracker Unit-wise Summary


Unit
Name

Plan
submi
tted
by
Apprai
see

Plan
Plan
Self
appro
appro
Apprai
vedby vedby
sal
Apprai
Revie
submi
ser
wer
tted
by
Apprai
see
for
Mid
year
review

Mid
year
Revie
w
discus
sion
docum
ented
by
Apprai
ser

Self
Apprai
sal
submi
tted
by
Apprai
see
for
Final
review

Final
Revie
w
done
by
Apprai
ser

Final
Revie
w
accept
edby
apprai
see

Final
Revie
w
accept
edby
Revie
wer

Part-B
compl
eted
byAA

(No.)

(No.)

(No.)

(No.)

(No.)

(No.)

(No.)

(No.)

(No.)

(No.)

CORPORA
TEOFFICE

297

297

297

BHOPAL

1309

1309

1309

EDN
BANGALO
RE

686

686

686

CMG

CENTRAL
STAMPIN
GUNIT

26

26

26

EPD
BANGALO
RE

94

94

94

Performance Cycle Tracker Report


StaffNo

Staff
Name

Current
Phase

Current
Status

PendingWith

Accepting
Authority(AA)

3793257

P.K.
Biswas

PLANNING

Performance
Plan
approvedby
reviewer

2104709,E9,Shri
AVKrishnan,
GENERAL
MANAGEMENT,
HPBPTRI

2171880

SHRI
Nirmal
Kumar
Narjari

PLANNING

Performance
Plan
approvedby
reviewer

2104709,E9,Shri
AVKrishnan,
GENERAL
MANAGEMENT,
HPBPTRI

2067080

SHRI
Ramach
andran

ENDYEAR

FinalReview
isunderfinal
approvalby
reviwer

SHRIKUMAR
R(E8)

null

KRA

Cycletime
reductionfora
product/
assembly/Proces

Item
Weightage
(%) 10

Level

Target

10.0

8.0

6.0

4.0

2.0

UnitofMeasurement %reduction
1.TostudythecirseamweldingProcess.2.
Totraintheexistingweldersfortandem
ActionPlan,Resources, welding.3.Toarrangenecessaryfacilities
AssumptionsandMilestones
andresourcesintimewiththehelpofWTC
Numberoffresh
welders
qualifiedfor
additional
positionand
KRA customers

Item
Weightage
(%) 10

Level

Target

15.0

10.0

8.0

6.0

4.0

UnitofMeasurement Number
Actionplan:Plannedtoqualify15weldersin
ActionPlan,Resources, IBR.Resources:WTCwithallfacilitiesto
AssumptionsandMilestones imparttraining.Milestone:31stMarch2011

Assigning ratings to Units


Bucket I
Unit
Name
1

Unit 1

2 Unit 2

Unit
Score

Unit
Rating

4.85

4.85

Unit 3

4.75

Unit 4

4.74

Unit 5

4.74

Unit 6

4.68

Unit 7

4.68

Unit 8

4.67

Unit 9

4.45

10 Unit 10

4.40

11 Unit 11

4.35

12 Unit 12

4.30

Level 5=1.2 = 2 units


Level 4=4.8 = 5 units
Level 3=4.8 = 5 units

Assigning ratings to NCs within

Distribution of NCs
Unit

Total
No. of
NCs

Unit
2

16

Rounded off to

Performance
Cycle

Level 5 Level 4 Level 3 Level 2

3.2

7.2

4.8

0.8

4 NCs

8 NCs

4 NCs

Unit
Score

Unit
Rating

4.85

Unit 2 : Rating 5
Sl. No. NC

NC
Score

NC
Rating

Assigning ratings
to
NCs within
Units.contd

NC 1

4.95

NC 2

4.95

NC 3

4.94

NC 4

4.92

NC 5

4.91

Level 5=3.2 = 4 NCs

NC 6

4.91

Level 4=7.2 = 8 NCs

NC
7

4.91

NC 8

4.91

NC 9

4.9

10

NC
10

4.9

11

NC
11

4.9

12

NC
12

4.89

Level 3=4.8 = (5) 4


NCs
Level 2=0.8 = (1) Nil

Creating the BSC holders NC


NC 7 : NC Score 4.91; NC Rating
4
BSC Holders NC
Name

Grade

MAP
Score

Final
Rating

Mr A

E6A

4.92

A+

Mr B

E6

4.9

A+

Ms C

E&

4.89

Ms D

E7

4.88

Mr E

E6

4.85

Mr F

E6

4.85

Mr G

E6A

4.8

B+

Ms H

E7

4.8

B+

Mr I

E6A

4.752

B+

10

Mr J

E7

4.704

Level 5 = 2
executives
Level 4 = 4
executives
Level 3 = 3
executives
Level 2 = 1
executive
The system cannot run
Normalisation rationally
for small populations.
Hence distribution into
Ratings has been done
manually using standard
tables for BSC NCs.

NC 7 : NC Score 4.91; NC Rating


4

Normalisation of
KRA holders

NC for KRA population


Name

Grade

MAP
Score

Final
Rating

Mr A

E4

A+

..

Mr B

E6

A+

Ms D

E1A

A+

Ms E

E3

Mr J

E4

16

Mr L

E2

4.993

17

Mr M

E2

4.94

B+

A+ = 6 executives

Ms Q

E2

4.925

B+

A = 10 executives

30

Mr S

E6A

4.915

B+

B+ = 14 executives

31

Mr T

E5

4.91

B = 6 executives

Mr U

E5

4.7916

C = 2 executives

36

Mr X

E2

4.35

37

Mr Y

E3

3.5145

Ratings are assigned


by the system