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HPCL Introduction HPCL is a Government of India Enterprise with a Navratna Status, and a Fortune 500 and Forbes 2000

company, with an annual turnover of Rs. 1, 69, 011 Crores. HPCL operates 2 major refineries producing a wide variety of petroleum fuels & specialties, one in Mumbai (West Coast) of 6.5 Million Metric Tonnes Per Annum (MMTPA) capacity and the other in Vishakhapatnam, (East Coast) with a capacity of 8.3 MMTPA. HPCL also owns and operates the largest Lube Refinery in the India producing Lube Base Oils of international standards, with a capacity of 335 TMT. This Lube Refinery accounts for over 40% of the India's total Lube Base Oil production. HPCL has earned "Excellent" performance for fifteen Consecutive years up to 2005-06, since signing of the first MOU with the Ministry of Petroleum & Natural Gas. Consistent excellent performance has been made possible by highly motivated workforce of over 11,226 employees working all over India at its various refining and marketing locations. HPCL continually invests in innovative technologies to enhance the effectiveness of employees and bring qualitative changes in service. Business Process Re-Engineering exercise, creation of Strategic Business Units, ERP implementation, Organizational Transformation, Balanced Score Card, Competency Mapping, benchmarking of refineries and terminals for product specifications, ISO certification of Refineries and Supply Chain Management are some of the initiatives that broke new grounds. History 1952: 1962: 1974: 1976: The Company was incorporated in the name of Standard Vacuum Refining Company of India Limited on July 5, 1952 On 31st March, 1962 the name was changed to ESSO Standard Refining Company of India Limited. Hindustan Petroleum Corporation Limited comes into being after the takeover and merger of erstwhile Esso Standard and Lube India Limited Caltex Oil Refining (India) Ltd. - CORIL is taken over by the Government of India with an Ordinance in 1976, subsequently ratified by an Act in 1977 and merged with HPCL in 1978. Kosan Gas Company, the concessionaries of HPCL in the domestic LPG market, are taken over and merged with HPCL.


HPCL thus comes into being after merging 4 different organizations at different points of time.

PMS process at HPCL

Performance Appraisal System Process flow

Target Setting

Mid-year Review and Feedback

Final Review and Feedback

Ratings by RO/RVOs

Moderation Process

Countersigning Process

Fig: 1.1

Performance Appraisal System employed in HPCL is based on balanced scorecard. The four perspectives under which the performance planning and review process is carried out at HPCL are Financial / Physical, Customer Delight, Learning and Growth and Improvement in Process. These perspectives are derived from the Balanced Scorecard concept. Every major activity that is carried out by the employees as part their job responsibilities should be viewed from the above four perspectives: Activities / Outcomes that directly impact the bottom line of the business can be categorized under the 'Financial / Physical' perspective. Activities / Outcomes that directly impact the satisfaction of the customer can be categorized under the 'Customer Delight' perspective. Activities / Outcomes that are directly related to the skill / competency development of self or subordinate can be categorized under the 'Learning and Growth' perspective. Activities / Outcomes that directly create improvement in the internal processes can be categorized under the 'Improvement in Process' perspective.

The performance appraisal system in HPCL is deployed on an online platform. The online platform enables easy accessibility, user friendliness, better administrative control, seamless process flow and effortless storage and retrieval of appraisal documents. However HPCL believes that the online appraisals should not replace the one-on-one communication process between appraiser and appraisee. It is essential that there is regular interaction and discussions during target setting and review stages. Online appraisal should merely be the tool to record the discussions and feedback. In addition to the online appraisal HPCL has recently added an Audio Function to their process. This Function allows for recording of the conversations between Appraiser and Appraisee during the Target setting and review stage. These recordings would also be helpful in grievances related to performance ratings. The target setting process in the Online Performance Appraisal System first involves the identification of Key Performance Indicator (KPIs). These are statements that describe the end outcomes to be achieved / critical outputs to be produced during a particular period, which is normally the financial year. Only those major activities would lead to a certain broad outcome or output should be classified as KPIs. The second step involves the setting of Targets for each KPI. These targets indicate the degree to which a particular outcome is required to be achieved during the specified period for each Key Performance Indicator. The targets are required to be set in the specified format under the four perspectives in the online performance appraisal system only after one to one discussion with the Reporting Officer. The next stage is the mid- year review. It involves taking stock of the extent to which the targets are achieved and in this context, to realign priorities or undertake mid-term corrections to ensure that the future actions are planned towards achieving the targets set. Here, the Appraisee and the

reporting Officer, in a one on one discussion discuss the progress made towards achievement of targets pertaining to each KPI. The next step is the process of reviewing the overall performance and achievements of the officer at the end of the appraisal cycle against the targets set at the beginning of the year i.e. the Final Review. Final review and feedback enables the Appraiser and Appraisee to take stock of the outcomes achieved during the year against the targets set. It enables the Appraisee to keep the Reporting Officer informed on the efforts put in towards achieving the set targets and to report reasons for non-achievement of any specific targets. It provides the Appraisee with an opportunity to have qualitative feedback from the Reporting Officer on the overall performance delivered by him / her during the year. Every Appraisee gets an overall score out of 100 against overall performance, managerial competencies and values, as applicable to the grade:

Salary Grade A/B/C D/E/F G/H/I

Performance 80 72 60

Managerial Competencies 20 20 20

Values 8 20

After the completion of the final review, the Reporting Officer assigns ratings to the appraisee on a five point scale against overall performance, managerial competencies and values, as applicable to the grade.

Exceptional Performance; Rarely equaled (1)


Far exceeds all individual goals/targets as set in the performance plan Performs all job responsibilities far above the requirement as specified in the job description Performance better than normally expected (2) Meets all and exceeds most individual goals/targets as set in the performance plan Performs all job responsibilities in excess of the key requirements for the job as specified in the job description Normally expected performance, producing Meets all individual goals/targets set in required results (3) the performance plan Meets the overall standard and/or expectations established for the job as specified in the job description Performance less than normally expected of the Generally meets individual goals/targets

position; not producing required results consistently (4) Invariably poor performance (5)

as set in the performance plan Does not meet the overall standard for the job as specified in the job description Does not meet most individual goals/targets as set in the performance plan Does not meet job requirements Performance demonstrates significant weakness in most areas Counseling and extensive training is required; Individual performance needs to be re-evaluated within six months

The appraisal document is then routed to one or more Reviewing Officers, as the case may be, for their assessment of the appraisee's performance. This is essentially done to assess the performance of the officer at a broader level in comparison with the similarly placed officers and to correct any biases whether positive or negative that may have coloured the judgement of the Reporting Officer. Moderation process aims at rationalizing the possible biases that may have crept in during the individual assessment by having group of senior level officers undertake an independent and collective review of both the performance of the appraisees' and the assessment by Reporting Officers and Reviewing Officers. In this process, all the employees in the Corporation are segregated into groups based on the salary grade and job family (promotion stream).Absolute and Relative Comparison is then carried out in respect of officers in these groups by the Moderation Committee members in line with the pre-defined bell curve percentages. In absolute comparison, performance of the employee against the benchmarked standards of the positions is evaluated. In the relative comparison, the performance of one employee is evaluated in comparison with the other employees in the group. The moderation process is mandatory as per the DPE guidelines.
HPCL has a full-fledged Corporate Training Department, to augment the learning and development requirements of its officers. All training initiatives are planned in order to address new needs
required by change in the market scenario. Training needs for managers are identified as follows: Individual Level: Mainly through recommendation from the Performance Appraisal System. Functional / Departmental Level: Customized Training programs are developed for the departments in consultation with the SBU/Functions. Organizational Level: Individual Development Plan obtained from the Competency mapping exercise is used to provide specific Training to bridge the observed the employee skill gaps.