PROJECT REPORT

AMITY BUSINESS SCHOOL

AMITY UNIVERSITY

SUMMER INTERNSHIP REPORT ON

PERFORMANCE MANAGEMENT SYSTEM
AT

By

INDUSTRY GUIDE
Mr.SANJEEV SHARAN

General Manager -HR

Submitted By: Under the Guidance of

Sakshi Saxena Dr.JAYA YADAV
MBA-HR 2007-09 Assistant Professor
Enroll No.A0102307138 (ABS,AU)
 TABLE OF CONTENTS
Acknowledgments………………………………………………………………….3

Executive summary …………………………………………………………….…4

Certificate of Approval……………………………………………………………5

1. INTRODUCTION( TELECOM SECTOR)……………………………6

1.1 INTRODUCTION TO THE COMPANY…………………………...8
1.1.1 Reliance ADA group…………………………………………….10
1.1.2 Chairman’s Profile……………………………………………….12
1.1.3 Vision………………..…………………………………………..14
1.1.4 Organization Structure……………………………………………16
1.1.5 Reliance comm. Business……………………………………….19

1.2 HR Activities……………………………………………………….20
1.2.1 HR Mission…………………………………………………….21

2. OBJECTIVE OF STUDY…………………….……………………………….22

2.1 Research Methodology………………….…………...............................23

2.2 Project Overview……………………………………………………28

2.3 Introduction to Performance Appraisal…………………………..........30

2.4 Appraisal System at Reliance………………………………………......36

3 FINDINGS AND ANALYSIS ………………………….………………56

4 SUGGESTIONS…………………………………………………………………66

5 CONCLUSIONS……………………………………….……………………..69

6. BIBLIOGRAPHY…………………………………………………………..71

7. ANNEXURE……………………………………………………….72

2
 ACKNOWLEDGEMENT
The completion of any task depends upon the co-operation, coordination and consolidated
efforts of several resources of knowledge, energy, time and above all the proper guidance
of an experienced person.

In pursuing and completion of MBA and other commitments, I undertook the task of
completing my project on performance management system.
To this I would like to thank and convey me gratitude to the top management of
RELIANCE COMMUNICATION who allowed me to conduct my project and gave me
their wholehearted support.

I owe a great debt to Mr. SANJEEV SHARAN (HR Head, Rajasthan) as well as my
INDUSTRY GUIDE Ms.VINI SOMNATH for their valuable suggestions and the quality
inputs thereby giving me the chance to broaden my horizon about HR department.
I also thank my FACULTY GUIDE Dr.JAYA YADAV (Faculty, PMS. ABS, Noida) for
giving me the necessary guidelines regarding the project and supporting me in the
completion of the project successfully as well as insulating a belief regarding its vitality
and importance.

I also record my thanks to HR TEAM and all the employees who were frank and
forthright and gave me their full co-operation to compile the project with their knowledge
and expertise.
Finally, I also acknowledge with deep gratitude the immense support received from my
family members who have encouraged me and have always been the source of inspiration
and help in continuing my effort.

3
 Executive Summary
The internship is an integral part of the Post Graduate Program. I Sakshi Saxena, a
student of Amity Business School (A0102307138) chose the organization Reliance
Communications Limited, Jaipur (Rajasthan) for my summer internship project. This 9
weeks period of my internship in such a huge organization gave me a real time exposure
to know about the organizational working process. Reliance Communications is India’s
largest information and communications service provider with over 32 million
subscribers. It is doing its business by continuously delivering differentiated products and
services that provide high business value in return. I decided to do an internship in
Reliance communication because it’s a larger sector that is booming now a day.

I have done this internship under HR, in the circle office as it is the essential part of MBA
program. I have done this internship on “To study and critically evaluate the current
performance management system in Reliance communications Circle Office in
Jaipur .For this purpose I had been looking into the whole process of performance
management system.

I took key insight into the entire process of appraisal system in the organization and also
interacted with the employees personally and learned about various factors improving
current performance management system.

4
 Certificate of Approval
This is to certify that Ms. Sakshi Saxena This is to certify that student of
Master of Business Administration (HR) , class of 2009 , Amity
Business School , Amity University (Enrollment No. A0102307138)
has undertaken the Summer Internship Training at Reliance
Communications Jaipur, and wef. May 1‘08 to July 10‘08. She has
worked under my guidance for the Project Titled, ‘Performance
Management System.’

This project report is prepared in partial fulfillment of Master of

Business Administration MBA (HR) to be awarded by Amity
University, Uttar Pradesh.

To the best of my knowledge, this piece of work is original and no

part of this report has been submitted by the student to any other
Institute / University earlier.

DATE: 25/07/08

Dr
.Jaya Yadav

A
ssistant Professor

5
 (
ABS,AU)

6
 Introduction
TELECOM SECTOR AN OVERVIEW
The $8 billion telecommunications sectors in India have undergone a major
transformation in the past couple of decades. From a complete monopoly of the
public sector, the telecom industry has witnessed the breaking down of monopolies
and significant policy reforms, favoring the entry of private players. The private
sector has been allowed to make a foray not only into value added services, such as
cellular and paging services, but also the basic telephony services.
Reforms have taken place in the telecom sector in three phases. The first phase began in
the 1980s when in 1984; private manufacturing of customer premise equipment was
given the go- ahead. Proliferation of individual STD/ISD/PCO network took place
through out the country by way of private individuals franchisees. Also, two large
corporate entities, the Mahanagar Telephone Nigam (MTNL) and Bharat Sanchar Nigam
Ltd.(BSNL) were created out of the department of telecommunications (DOT) to handle
the sectors of Mumbai and Delhi respectively. A high- powered telecom commission was
set up in 1989 and Videsh Sanchar Nigam Ltd. (VSNL) was made the international
service provider catering to all telecom services originating from India.

The second phase of reforms in the telecom sector commenced in 1991 with the
announcement of the new economic policy. To begin with the manufacturing of telecom
equipment was delicensed in 1991, while radio paging services opened up in the 1992. In
1994, the basic telephony sector was opened up by providing licenses to six companies to
operate in the basic areas.

7
These Companies were: Bharti Telenet, Essar Commvision, Shyam Telecom,
Hughes Telecom, Tata Teleservices and Reliance Telecom.

The National Telecom Policy in 1994 emphasized on Universal Services and Qualitative
Improvement in telecom services. While an independent statutory regulatory was
established in 1997, the Internet services were opened up in 1998. Since then, more
companies have been given the go-ahead to basic telephony, such as Reliance, Tatas,
HFCL, Bharati, Aircel, Digilink and Birla AT&T.

The third phase of reforms in the telecom sector began in the late 1990s, with the
announcement of the New Telecom Policy in 1999. The underlying theme of the reform
process of NTP was to usher in full competition through unrestricted entry of private
players in all service sectors. The policy favored the migration of existing operators from
the era of fixed license fee regime to that of revenue sharing. The duopoly rights of the
MTNL and VSNL (VSNLs monopoly ended in April 2002 when the sector was thrown
open to the private sector) were discontinued to herald the era of unlimited competition in
the industry.

8
 INTRODUCTION TO THE COMPANY
Founded by Shri. Dhirubhai
Ambani in the year 1966
Think without
constraints…!!!

We were small then - an infant in industry.

We are small now - at the doorsteps of opportunity.”

9
We will create the next generation communication
network and information technology infrastructure
that will bring immense value to every Indian, and
leapfrog India into the center stage of global
Infocomm space

10
Reliance - ADA Group
The Reliance Group, founded by Dhirubhai Hirachand Ambani (1932-2002), is India's
largest private sector enterprise, with businesses in the energy and materials value chain.
Group's annual revenues are in excess of USD 22 billion. The flagship company,
Reliance Industries Limited, is a Fortune Global 500 company and is the largest private
sector company in India.

Backward vertical integration has been the cornerstone of the evolution and growth of
Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of
backward vertical integration - in polyester, fiber intermediates, plastics, petrochemicals,
petroleum refining and oil and gas exploration and production - to be fully integrated
along the materials and energy value chain.

The Group's activities span exploration and production of oil and gas,
petroleum refining and marketing, petrochemicals (polyester, fiber intermediates, plastics
and chemicals), textiles and retail.

Trust enjoys global leadership in its businesses, being the largest polyester yarn and fiber
producer in the world and among the top five to ten producers in the world in major
petrochemical products. The Group exports products in excess of USD 11 billion to more
than 100 countries in the world. There are more than 25,000 employees on the rolls of
Group Companies. Major Group Companies are Reliance Industries Limited (including
main subsidiaries Reliance Petroleum Limited and Reliance Retail limited), Indian
Petrochemicals Corporation Limited and Reliance Industrial Infrastructure Limited.

Across different companies, the group has a customer base of over 50 million, the
largest in India, and a shareholder base of over 8 million, among the largest in the world.
Communications (Reliance Communications Ltd.), and financial services (Reliance
Capital Ltd), to generation, transmission and distribution of power (Reliance Energy),
infrastructure and entertainment.

11
 RELIANCE

COMMUNIC
A
-
TIONS
RELIANCE

ADLABS ENERGY

ADAG
RELAINCE RELIANCE

CAPITAL MONEY

RELIANCE
RELIANCE
MUTUAL
TELECOM
FUNDS

12
 Chairman's Profile

ANIL DHIRUBHAI AMBANI

Regarded as one of the foremost corporate leaders of contemporary India, Anil Dhirubhai
Ambani is the Chairman of all listed Group companies, namely: Reliance
Communications, Reliance Capital, Reliance Energy and Reliance Natural Resources
Limited.

Till recently, he also held the post of Vice Chairman and Managing Director in
Reliance Industries Limited (RIL), India's largest private sector enterprise.

Anil D Ambani joined Reliance in 1983 as Co-Chief Executive Officer, and was
centrally involved in every aspect of the company's management over the next 22 years.

He is credited with having pioneered a number of path-breaking financial

innovations in the Indian capital markets. He spearheaded the country's first forays into
the overseas capital markets with international public offerings of global depositary
receipts, convertibles and bonds. Starting in 1991, he directed Reliance Industries in its
efforts to raise over US$ 2 billion. He also steered the 100-year Yankee bond issue for the
company in January 1997.

13
He is a member of:

 Wharton Board of Overseers, The Wharton School, USA.

 Central Advisory Committee, Central Electricity Regulatory Commission.
 Board of Governors, Indian Institute of Management, Ahmedabad.
 Board of Governors Indian Institute of Technology, Kanpur.
 In June 2004, he was elected for a six-year term as an independent member of the
Rajya Sabha, Upper House of India's Parliament a position he chose to resign
voluntarily on March 25, 2006.

Awards and Achievements:

 Conferred the 'CEO of the Year 2004' in the Platts Global Energy Awards
 Rated as one of 'India's Most Admired CEOs' for the sixth consecutive year in the
Business Barons - TNS Mode opinion poll, 2004
 Conferred 'The Entrepreneur of the Decade Award' by the Bombay Management
Association, October 2002
 Awarded the First Wharton Indian Alumni Award by the Wharton India
Economic Forum (WIEF) in recognition of his contribution to the establishment
of Reliance as a global leader in many of its business areas, December 2001.
 Selected by Asia week magazine for its list of 'Leaders of the Millennium in
Business and Finance' and was introduced as the only 'new hero' in Business and
Finance from India, June 1999.

14
 Vision
"We will leverage our strengths in executing complex global-scale projects to make
leading edge information and communication services affordable by all individual
consumers and businesses in India. We will offer unparalleled value to create customer
delight and enhance business productivity. We will also generate value for our
capabilities beyond Indian boarders while enabling millions of knowledge workers to
deliver their service globally."

Reliance Communications envisions a digital revolution that will sweep the country and
about a new way of life. A digital way of life for a new India.

With mobile devices, network and broadband linked to powerful digital networks,
Reliance Communications will usher fundamental changes in the social and economic
landscape of India.

Reliance Communications will help men and women connect and communicate with each
other. It will enable citizens to reach out to their work place, home and interests, while on
the move. It will enable people to work, shop, educate and entertain themselves round the
clock, both in the virtual world and in the physical world. It will make available
television programs,movies and news capsules on demand. It will unfurl new simulated
virtual worlds with exhilarating experiences behind the scenes of computers and
televisions.

15
Users of Reliance Communications’ full range of services would no longer need
audiotapes and CDs to listen to music. Videotapes and DVDs would not be necessary to
see movies. Books and CD ROMs would not be needed to get educated. Newspaper and
magazines would not be required to keep abreast of events. Vehicles and wallets will
become unnecessary for shopping.
Reliance Communications will disseminate information at a low cost. “Make a
telephone call cheaper than a post card." These prophetic words of Dhirubhai Ambani
will be a metaphor of profound significance for Reliance Communications.

Reliance Communications will regularly unfold new applications. Continually adapt new
digital technologies. Create new customer experiences. Constantly strive to be ahead of
the world.

Reliance Communications will transform thousands of villages and hundreds of towns

and cities across the country.

Above all, Reliance Infocomm will pave the way to make India global leader in the
knowledge age.

16
 ORGANISATION STRUCTURE
The organization structure defines various levels of organization i.e. Business, Work
Centers, Functions, Circles, Cities, etc. The Reliance Infocomm Organization structure
includes:

Business Unit: Enterprises, consumer, Wholesale, & Web stores

Work Centers: Network (O&M - Wireless, O&M - NLD/ILD, O&M - IDC, O&M -
OSP, EWC- Long Distance, EWC-Wireless, EWC-Wire line, OSS, ITC, NOC), Call
Center, BSS, (CRM, RA) m, Billing and Collection, Applications and Solutions Group.

Functions: HR, Commercial, Purchase/Logistics, IT Infrastructure, and Corporate

Staff Function.

Communications operations are spread over 673 cities in the following Circles:

1. Andhra Pradesh 2. Delhi and Rajasthan

3. Gujarat 4. Karnataka

5. Kerala 6. M.P. & Orissa

7. Rest of Maharashtra 8. Mumbai

9. Punjab, Haryana & H.P. 10. Tamilnadu

11. U.P. (East & West) 12. West Bengal & Bihar

17
 WORK LEVELS
The organization structure also defines the organizational functions, considering the
nature and scope of functions to be performed. The following four work levels broadly
indicate the nature of accountability and responsibility assigned to role holders at the
work level.

WORK LEVELS
1. L1-Leadership 2. L2- Managerial

3. L3-Executive 4. L4-Support

L1-Leadership Role - Accountable for participating and leading strategy

creation/direction. Overall business/team performance responsibility for designated area.

l2-Managerial Role- Accountable for execution of business plan and achievement

of team/individuals targets .Be responsible for maintenance of key company assets
(customers, physical assets, people)

L3- Executive Role- Responsible for achieving individual/ team target.

L-4-Support Role- Responsible for performing assigned activities and support

other work levels.

18
 Organization Set Up

DAKC Head Office DAKC Head Office

Delhi, Rajasthan &

Hub
Haryana

Circle Rajasthan

Jaipur, Jodhpur,
Cluster Udaipur, Bikaner,

Alwar, Kota & Ajmer

19
 Reliance Communications Businesses

Networ
Enterprise Personal
Shared k

Services

Web World
DTH

20
The business of RELIANCE COMMUNICATIONS is divided into five sub
divisions-

1) PERSONAL BUSINESS- This business of RELIANCE is counted

amongst the major business and hence contributes towards the 70-
80% of the RELIANCE BUSINESS. This business consists of the Prepaid
and the postpaid connections by 1 to1 dealing. If the no of connections
are more than 5 then it is said to be commercial. This business
comprises of Personal distribution, Win, retail, business commercial,
direct sales, marketing, CSD. The HR head of the personal business is
Mr. SANJEEV SHARAN.

2) ENTERPRISE BUSINESS- This business of RELIANCE is headed

by Mr. Prem Bandula. This business contributes arond10-15% of the
business. The enterprise business comprises of the CWG, BB, PCO.

3) DTH- This stands for DIRECT TO HOME services. In comparison with

their competitors RELIANCE has also started their services of BIG TV
which is still to be launched.

4) SHARED SERVICES- This is that part of the business which does

not contributes directly to the business but helps in the effective
dealings and the conduct of the business. It includes IT, COMMERCIAL.

21
 HR ACTIVITIES AT RELIANCE
COMMUNICATIONS RAJASTHAN

HR ACTIVITIES

TALENT
Acquisition
admin

TALENT
DEVELOPMENT
TALENT
Mana
gement

22
 HR MISSION
Facilitate, coach and enable best in class and
leading edge HR practices across the extended
enterprise of Reliance Communications and
thereby nurture a customer center, positive
energy organization that will maximize
stakeholder satisfaction.

23
 Objectives of the Study

Understand the operations of HR function

Study of Talent Development

» Performance Management
System
» Employee Engagement

24
RESEARCH METHODOLOGY

25
 Critical Incident Score

The basis of this method is the principle that there are certain significant acts in each
employee’s behavior and performance, which makes all the difference between success
and failure on the job.

The supervisor keeps a written record of the events (either good or bad). Feedback is
provided about the incidents during the performance review session. Various behaviors
are recorded under such categories as the type of job, requirement for employees,
judgment, learning ability; several research studies are undertaken and accomplished year
after year but in most cases very little attention is paid to this important dimension
relating to research.

Research design is a model of master plan for gathering formal information. It calls for
certain specification of methods and procedures for obtaining the required information.

Marketing Research Project is defined as either EXPLORATORY RESEARCH or

DESCRIPTIVE RESEARCH depending upon the objectives of the study.

26
The object of the Exploratory is to seek new ideas and to discover new relationship
between different set of factors in a way that will permit statement of specific hypothesis.
To find out this hypothesis, study of secondary sources of information, survey of
knowledgeable person or case studies are conducted.

Descriptive research describes situation and provides information, which helps in

decision-making. Such research requires a formal design, which helps the researcher to
identify cause and affect relationship.

This can be done by case statistical study and experimentation. The present research is a
descriptive research, as it wants to find out effectiveness of present performance appraisal
system. The information has been gathered from survey of sample people selection from
the company.

COLLECTION OF DATA

27
Data collection is an integral part of the marketing research. There are several ways of
collecting the appropriate data, which differ considerably in context of money costs, time
and other resources at the disposal of the researcher. The researcher should keep in mind
two types of data viz. Primary and Secondary.

The primary data are those, which are collected afresh and for the first time, and thus
happen to be original in character.

Primary Data is collected through:

• Questionnaire- in which division of questions are as follows:

(a) No. of close ended questions -9

(b) No. of open ended questions-3

• Observation

• Unsturctured interviews

The secondary data are those, which have already been collected by some one else like
various journals and publications of the company and that are used for quick compilation
of the report.

Both the methods were used for the compilation of the project.

28
 Sampling

• Method: Simple Random Sampling

• Area: Circle Office in Jaipur and also other offices in

Jaipur of Reliance.

• Unit: Employees of Reliance communications in circle

office.

• Sample size: 100 employees

• Research tool: Questionnaire.

PROJECT OVERVIEW

29
Hr activities at reliance communications
in rajasthan includes following:

• Talent acquisition

• Talent management

• Talent development
• admin

The hr department of reliance

communications is divided into four
categories:
1) TALENT ACQUISITION- It comprises of RECRUITMENT AND
SELECTION of the candidates. Generally this process of finding the
suitable candidates is done through the various consultancies such as

30
 MARGDARSHAK, ADECO, etc. The selection procedure in RELIANCE is
started through the process of short listing the candidates who are
eligible and are fit in the culture. The first interview is with the
respective HOD and then with the HR HEAD ( Mr. Sanjeev Sharan)and
finally with the CIRCLE HEAD( Mr. Gurpreet singh)

2) TALENT DEVELOPMENT- It comprises of the TRAINING

AND THE DEVELOPMENT OF THE EMPLOYEES. This work of
training and development also includes the PMS which is conducted
QUARTELY and the PLI (PERFORMANCE LINKED INCENTIVES) are given
to the employees respectively. Various training needs are identified by
the HOD and the same is discussed with the HR and the training is
scheduled accordingly.

3) TALENT MANAGEMENT- It comprises of MANAGING THE

EMPLOYEES OF THE ORGANISATION with respect
to their RETENTION AND SATISFACTION. The team
identifies the needs of the employees and the same is fulfilled
accordingly. The full employee database is managed through the well
known technique SAP.

4) ADMIN - This department of the HR department includes the rest

activities of RELIANCE related to employees. It includes the
management of the stationery, the submissions of the checks etc.

Activities in Talent Development: -

• Training and Development Activities.

31
 • Induction and Orientation to new employees.
• Performance Management System based on
Balanced score card concept.
• Confirmation Appraisal Cycle.
• New HR initiatives.
• Developing and designing new formats and
processes.

INTRODUCTION OF PERFORMANCE
APPRAISAL

Performance Appraisal is the systematic evaluation of individual with respects to his/

her performance on the job and his potential for development. The performance being
measured against such factors as job knowledge, quality and quantity of output, initiative,
leadership abilities, supervision, dependability co-operation, judgment, versatility, health

32
and the like. Assessment should not be confined to past performance alone. Potential of
the employee for future performance must also be assessed.

A Performance Appraisal “is a formal structured system of measuring

and evaluating an employee’s job, related behavior and outcomes to
discover how and why the employee is presently performing on the
job and how the employee can perform more effectively in the future
so that the employee, organization and society all benefits.”

IMPORTANCE AND PURPOSES

Performance appraisal is considered to be most significant and indispensable tool for an
organization for the information it provides is highly useful in making decision:

1. Regarding various personal aspects such as promotions, salary increase, transfers,

demotion and termination.
2. They are means of telling a subordinate hoe he is doing, suggesting needed
changes in his behavior, attitudes, skills or job knowledge.
3. The superior uses them as a base for coaching and counseling the individual

33
PERFORMANCE PLANNING PROCESS

34
 APPRAISAL FORMAT
In order to achieve these objectives the appraisal format should have the following
components: -

 Key Result Area (KRAs):

1. KRAs are measures that are linked to business strategy and are
cascaded from the business KRAs. KRAs are divided into six (6) broad measurement

35
 dimensions which are Financial, Customer, Innovation/Internal Process, Projects,
Employee Learning and Development and Societal. Every employee need not have
KRAs in each of these measurement dimensions
2. Each KRA would have a specific target. The target quantifies or
verifies the extent of achievement in a given time frame

 Individual Contribution Areas (ICAs):

1. The ICAs capture the key impact areas
of the employee’s efforts which are not captured through KRAs.

They have been divided into three broad categories:- Learning &
Growth, Special Projects and Other Job Responsibilities.

2. These are quantitative and/or qualitative measures which are defined through
conversation between employee and the manager.

3. At the end of the year, evaluation on the ICAs is captured through the multirater
feedback system.

 Core Responsibilities(CRs):

1. Core responsibilities are significant ongoing task or outcomes based on day to day
work and are part of the job responsibilities.

36
2. No pre determined targets are set for the core responsibilities in the performance
planning phase.

Roles and Responsibilities in the Performance

Appraisal

Employee/Appraisee :-

 Identification of KRAs, CRs and ICAs with their Manager’s at the beginning
of the Performance Cycle.
 Contribute to the setting of targets against each of the KRAs with their
Manager.
 Contribute to setting the weightages for the KRAs, CRs and ICAs have to be
finalized in co-ordination with the Manager.
 Complete the Performance plan and submit to the manager for verification.
 Complete the Quarterly and Half-Yearly Self review and collect feedback and
guidance from the manager on the performance.
 Complete the Year end Self Appraisal and submit to the manager for year end
appraisal.

Manager/Appraiser :-

 Identification of KRAs and ICAs with the employees at the beginning of the
performance cycle

37
  Contribute to the setting of targets and expected levels of performance with
the employees. Contribute to setting the weightages for the KRAs and ICAs
have to be finalized in co-ordination with the employee

 Verify and finalize the performance plan for the employee for the year
 Provide half yearly performance guidance and feedback, based on the self
appraisal and actual versus target performance of the employee
 Review the year end self review of the employee and provide the final ratings
for the KRAs and ICAs
 Submit the final ratings to the reviewer for finalization of the rating
 Identify potential extraordinary performers

Reviewer :-

 Validate the performance plan for the employee and sign off on the document.
 Review and finalize any deviation from the suggested weightages for KRAs,
CRs and ICAs in the employee manual
 Validate the final score submitted by the manager
Ratify the manager’s identification of extra-ordinary performers

HR :-

It functions as a facilitator in the process would ensure adherence to guidelines, support,

dispute resolution and modify design aspects to align with organization requirements

APPRAISAL SYSTEM

38
 AT

RELIANCE COMMUNICATIONS

PERFORMANCE MANAGEMENT SYSTEM!!!

 A system for managing organizational Performance.

 A system for Managing Employee Performance.

 A system for Integrating the Management of Organizational and Employee

Performance.

 A system for Integrating Rewards to performance and plan development

RELIANCE PERFORMANCE MANAGEMENT

SYSTEM

39
 Purpose
To institutionalize an integrated system to support the organization growth and create a
performance driven culture, encompassing performance planning, monitoring, support
and evaluation with a focus on employee learning and development.

The Performance Management System acts as major integrating factor with the other HR
systems of the organization as follows:

Development Strategies

-Training

-Coaching

-Mentoring

-Job Rotation/ Enrichment/ enlargement

Recognition & Reward PMS Management

Resources

-Individual Recognition Planning

- Inputs to earnings - Inputs to Succession Plans

- Company Resourcing Plan

Career & Selection planning

-Mapping towards competencies required

PMS Framework

40
Process at a Glance

41
Phase 1:- Performance Planning & Target Setting

 March- Performance measures and targets set jointly by employee and

manager
 These are cascaded from the organizational goals to ensure alignment

42
Phase 2:- Interim Review of performance

 July and January- Quarterly reviews. Interactive feedback session

only
 October- Mid year review. Provision for revision of the performance
plan if required, due to business exigencies( Course correction mechanism)

Phase 3:- Year End Performance Evaluation

 April- Assessment of achievement levels against targets by manager

followed by the process of normalization
 Final rating communicated to the employee. In case of any disagreements,
case submitted to the Reviewer

PHASE-1
PERFORMANCE PLANNING

43
What is the Balanced Scorecard????

A new approach to strategic management was developed in the early 1990's by Drs.
Robert Kaplan (Harvard Business School) and David Norton. They named this system the
'balanced scorecard'. Recognizing some of the weaknesses and vagueness of previous
management approaches, the balanced scorecard approach provides a clear prescription as
to what companies should measure in order to 'balance' the financial perspective.

The balanced scorecard is a management system (not only a measurement system) that
enables organizations to clarify their vision and strategy and translate them into action. It
provides feedback around both the internal business processes and external outcomes in
order to continuously improve strategic performance and results. When fully deployed,
the balanced scorecard transforms strategic planning from an academic exercise into the
nerve center of an enterprise.

Kaplan and Norton describe the innovation of the balanced scorecard as follows:

"The balanced scorecard retains traditional financial measures. But financial measures tell
the story of past events, an adequate story for industrial age companies for which
investments in long-term capabilities and customer relationships were not critical for
success. These financial measures are inadequate, however, for guiding and evaluating
the journey that information age companies must make to create future value through
investment in customers, suppliers, employees, technology and innovations.”

The balanced scorecard suggests that we view the organization from four perspectives,
and to develop metrics, collect data and analyze it relative to each of these perspectives:

 The Learning and Growth Perspective

 The Business Process Perspective

 The Customer Perspective

44
 The Financial Perspective

Balanced Scorecard Flowchart

45
 OVERALL PROCESS OF BALANCED
SCORECARD:-
The process consists of seven steps over three phases:

Phase 1:- The Strategic Foundation

46
Step 1: Communicate and align the organization around a clear and concise strategy. This
is the fundamental starting point behind everything else. Your strategy is what “feeds” the
Balanced Scorecard.

Step 2: Determine the major strategic areas or scope for getting the organization focused
on those things the organization can actually do.

Step 3: Build a strategic grid for each major strategic areas of the business.

Phase 2:- Three Critical Components

Step 4: For each strategic objective on each strategic grid, there needs to be at least one
measurement. Measurement provides the feedback on whether or not we are meeting our
strategic objectives.

Step 5: Set targets for each measurement: For each measurement in your Scorecard,
establish a corresponding target.

Step 6: Launch programs: Things will not happen unless the organization
undertakes formal programs, initiates or projects.

Phase 3:- Deployment

Step 7: Once the balanced Scorecard has been built, you need to push the entire process
into other pats of the organization until you construct a single coherent management
system.

CASCADE GOALS
 Cascade refers to the process of aligning organizational

goals to individual goals in a series of steps.

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 Cascading of goals ensures that all efforts within the

organization are focused towards a common organization

wide goal.

Cascade of goals from organization to business &

functional level

Cascade of goals to Individuals Scorecards:

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The process of drawing out individuals KRAs happens in the following
manner:-

Alignment of Goals and Targets:-

Vertically – Do the goals of the individual align with the goals of

the department division and organization?

Horizontally – Do the targets for the sum of the individuals add

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 together to achieve the target of the
department?

Developing Action Plan

Once the goals have been determined and agreed upon by

the manager, initiatives to support the goal can be identified.

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 PHASE-2
INTERIM REVIEW
Benefits of Interim Review:
- Allows provision of performance plan, if required

- Highlights areas of inputs, guidance, support required by appraisee

- Allows appraiser to give feedback & create coaching plan, if required

- Allows documenting feedback for final year and discussion & evaluation

Interim Review Process:

 Quarterly Reviews- July & January

- Interactive feedback session between manager and employees

- Does not result in a performance score

- Feedback is documented during each review session and

discussed at the year end evaluation

Mid Year Review- October

- Provision for mid courses revision to Performance

plan in case of extraneous circumstances

- Any modification to be ratified by manager and

signed off by reviewer

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INTERIM REVIEW PROCESS

PHASE-3

YEAR END PERFORMANCE

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 EVALUATION

Benefits of Year end Performance Evaluation

1. Reinforce Performance Excellence within the organization

2. Reward and recognize high performance

3. Reinforce organization’s priorities and goals

Year end Performance Evaluation Process

1. Take place in April of each Year

2. Assessment of achievements of KRAs, CRs and ICAs

by self & manager

3. Interim review feedback is also discussed

4. Roles with multiple reporting

- Multi-rater feedback obtained

- Final ratings by administrative manager

YEAR END PERFORMANCE APPRAISAL PROCESS

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 Year end Performance Evaluation Process
Continued
1. Final score is calculated from individual ratings on KRAs, CRs

and ICAs

2. Final score is normalized

3. Final rating is arrived at

- Final rating is different from Final score

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PERFORMANCE RATINGS SYSTEM

NORMALIZATION

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 Benefits of Normalization
1. Ensures equity in ratings between departments and SBUs

2. Ensures same standards of performance evaluation across

organization

3. Ensures fairness and recognizes individual, team, business

performance to organizational goals

What is Normalization???
1. Alignment of individual performance to relevant business unit

performance

2. Alignment of business unit performance to circle or business

performance

3. Results in a final performance rating

Normalization Process:
1. Normalization results are computed on the SAP system

2. Review is held by Normalization committee

3. Review takes place at both DAKC & Circle levels

NORMALIZATION PROCESS

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57
 Study of appraisal system

For the study of performance management system in Reliance a questionnaire was

prepared.The questionnaire consisted of 12 questions with the combination of both close
ended and open ended questions. The questionnaire was designed to know the
effectiveness of PMS. It helped us to know the views of the employees regarding PMS in
Reliance.

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Findings are as follows

1) Rating of understanding of PMS:

what is the general understanding of PMS

17%
25%

4% For promotion and incentive

For careeer growth
For formality
Check deviation

54%
Only 17% were aware that it is to basically check the deviation of actuals from the
standard. Mostly the employees were of the opinion that it is for the career growth as well
promotions and incentives. As every appraisal is followed by some kind incentive thus
maximum employees relate it to only incentives and thus growth.

2) Rating of formal discussion of performance with

line manager

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 How often does your team leader or line manager formally
discuss your performance with you?

5%
15%

Quarterly
32%
Half yearly
Only at time of appraisal
Never

48%

The graph clearly indicates that 48% employees were of the opinion that their team
leaders discuss their performance at least half yearly. This shows a positive sign on the
relationship of the two. Discussing the performance would help the employee or trainee
improve on his /her weak areas and thus increase their working efficiencies.

3) Rating of understanding of KRAs

Do you posses clear understanding of KRAs?

5%
9% 22%

Strongly agree
Agree
Disagree
Strongly disagree

64%

When asked from the employees about the understanding of the KRAs on which the
entire performance appraisal of the organization is judged,64% of the employees were
aware of it.This clearly indicates that the organization puts an extra effort on the

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performance appraisal of each and every employee. The KRAs are well defined to the
employees and also the guidelines are already explained to the appraise as well as
appraiser by the HR.

4) Rating of KRAs being realistic

The KRAs set for you are realistic?

14%
27%

Strongly agree
RECOMMENDATIONS
23%
Agree
Diagree
Strongly disagree

36%

One basic reason to ask this question was put up under study wasto analyse and see
whether the employees are satisfied with the work assigned to them. It is very important
to enjoy your work,and to also know from the employees that the KRAs set for them,are
infact realistic according to them or not. This pie chart depicts the degree of the truth of
this statement.27% employees felt that they do the work and are able to achieve the
targets on time,i.e they believed that the KRAs set for them are realistic and
achievable.36% also agreed to the same statement but with a less magnitude, while 23%
felt that there is still a room for improvement and that the KRAs can be more realistic and

rest were not at all satisfied with the kind of work given to them as they said that they
belong to some other field and are given the work of some other field.

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5) Rating of KRAs being quantified

Are the KRAS Quantified for each level of employees?

14%
27%

Strongly agree
Agree
23%
Diagree
Strongly disagree

36%
This shows that 27% of the respondents strongly agreed to the
statement. They thought that their key responsibility areas are properly
and timely quantified. Another 36% people thought the same.23%
workforce under study thought that there might be some amendment in
the quantification of the KRAs.The 14% were the same who did not find
their KRAs realistic. More or less I received a positive response, even
though the organization must find ways to convert the opinion of rest
employees.

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6 (a) Rating of Training opportunity as benefit of PMS

Training opportunity as benefit of PMS

14%

36% Strongly agree

agree
23%
disagree
Strongly disagree

27%

On asking from the employees which of the following you think is the best benefit of the
PMS,only 14% found training as the benefit of PMS and 23% also somewhat greed to
it,but the major number of employees did not find training as the benefit of PMS.This
clearly reflects that there are comparatively less training opportunities for the employees.

6(b) Rating of promotion as benefit of PMS

Promotion as benefit of PMS

13%

38% Strongly agree

22% Agree
Disagree
Strongly disagree

27%

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On asking for promotion as the benefit of PMS 38% strongly agreed to it and 27% also
agreed to it but with a different opinion. Thus, major number of employees believes that
if they perform well then there are better chances of promotion as well as growth for them
.

6(c) Rating of incentives as benefit of PMS

Incentive as benefit of PMS

15%

42% Strongly agree

17% Agree
Disagree
Strongly disagree

26%

Similarly on asking for incentives as the benefit of PMS major number of employees
agreed to it and believed that PMS is directly linked to their performance and the better
they perform better is the incentive made for them. Thus they knew it that it is very
important to perform their job well and complete their KRAs in time as well efficiently
and effectively.

Thus for the above question we can very well conclude that employees are more
concerned about their incentives and are very well aware of the fact that it is only their
best performance that will fetch them growth in terms of both monetary as well career.

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7(a) Rating of influence of PMS on Productivity

Do PMS influence productivity at individual or department level

18% 12%

16% Strongly agree

Agree
Disagree
Strongly disagree

54%

7(b) Rating of influence of PMS on improved efficiency

and effectiveness

Do PMS influence increased efficiency and effectiveness at

individual or department level?

17%
23%

Strongly agree
agree
22% Disagree
Strongly disagree

38%

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7(C) Rating of influence of PMS on career
development

Do PMS influence career development at individual or deapartment

level?

12%
19%

Strongly agree
agree
32% Disagree
Strongly disagree
37%

7(d) Rating of influence of PMS on succession

planning

Do PMS influence succession planning at individual or department

level?

12% 9%

Strongly agree
27% Agree
Disagree
Strongly disagree

52%

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On asking from the employees about the influence of PMS on certain factors, mostly the
employees were of the opinion that PMS influences their efficiency as well as
effectiveness the most. They believed that through appraisal they come to know their
strong area as well as their weak area after appraisal they have the clear picture of where
they are performing well and also where they need to improve and devote more efforts to
make their performance up to the mark. This section got the highest percentage with
23%strongly agree and 38% agree. Similarly second highest score was of career
development with 12% strongly agree and 32% agree. Thus we can conclude that
employees are well aware that it is the PMS only that provides ample opportunity to them
to give their best performance and prepare a room for rewards.

8) Rating of satisfaction on performance linked

incentives

Are you satisfied with the performance linked incentive in your

organization?

8%
18%
12%
Strongly Agree
Agree
Disagree
Strongly disagree

62%

The pie chart clearly depicts that maximum no. of employees are satisfied with the
performance linked incentive that they receive after their appraisal.62% employees were
of the opinion that the PLI they receive is justified by their superiors.

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9) Rating of fairness of performance appraisal

Do you think performance appraisal is a fair reflection of your

performance?

6%
13% 23%

Strongly agree
Agree
Disagree
Strongly disagree

58%

“This is the most trickey of all the questions in the questionnaire”, was
quoted as saying by one of the officials. Most of the respondents agreed to
the fact that the current PMS is free from any kind of bias. This statement
finds support from the fact that 58% of the employees agreed to the fact
that the PMS is a very stringent process and takes into account the actual
performance of the employee and identifies KRA and manages the
performance planning in an unbiased manner. But there are 13% of the
people who believe that the current system of managing performance has
loopholes and is biased towards certain employees.

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 suggestions

1 .A system of psychological appraisal can be introduced where psychologists are

used to specifically assess an individual's future potential. The appraisal normally consists
of in depth interviews, psychological tests, discussions with supervisors and a review of
other evaluations. The psychologist then writes and evaluation of the employee's
intellectual, emotional, motivational and other work related characteristics that suggest
individual potential, This will make the potential appraisal more specific and a reliable
date source for making employee's promotion decisions and future development.

2. The counseling sessions are conducted and the reporting officer obtains the
signature of the ratee after the session but a post appraisal interview report, handwritten
may be introduced. The report may consist of-

(a) Main points conveyed by the superior.

(b) Reactions of the employees appraised.

(c) Summary of the agreed programme.

(d) Finally the date of post appraisal interview and signatures of both the employee
and the reporting officer

3. Team appraisal. Along with the individual appraisal there can be team
appraisal also. In this focus should be on the achievement of the team as a whole. The
team should be appraised on the basis of the contribution to the organization goal. The
ratings should be given team wise and then it should be compared with other teams. The
team which gets the highest rating can be declared as ‘The Best Team of the Year’.This
will not only improve the team efficiency but also will motivate other teams to improve
and achieve. The team which turns out to be the best should not only be given monetary
benefits but also an award for the entire team. With the consent of the team members an
exclusive award can also be given to the team member whom they think is the key
contributor to their achievement.

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4. It has been seen that individuals who are rated as “outstanding” receive a substantially
high amount of increment and a promotion is awarded in recognition to their excellent
performance. In addition to this, a system of awarding certificates and memento/ shields
to outstanding employees on a particular day fixed for this purpose may also be
introduced.

Such a system would increase a sense of recognition and achievement in the outstanding
raters and would also help in motivating other employees. The day may be designated as
“Outstanding Achievers” day the awards may be given away to all the outstanding raters
by the president in the presence of the other employees gathered for this purpose. In this
not only the performer of the winning team should be included but also those employees
who have been very good performers throughout year irrespective of their team’s
performance.

5. EFFECTIVE COUNSELING
“Counseling is a means and not an end in itself”, this should be well included in one’s
mind. Development does not occur just because there is counseling could be used as an
effective instrument in helping people integrates with their organization and have a sense
of involvement and satisfaction.

There should exist a dialogic relationship in goal setting and performance review. With
such a collaborative effort, counseling effort, counseling can result in more objective
results.

More emphasis should be pondered on;

• General climate of openness and mutuality.

• Empathic attitude of management.

• Sense of uninhibited participation by the subordinates in

the performance review process.

• Focus on work oriented behavior and work related problems.

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6. PERIODIC THERAPY SESSION
Periodic psychotherapy sessions can be conducted for assessing the employees'
emotional, intellectual motivational and other work related problems if any. This will
help removing their problems and work more efficiently psychotherapy can be given
through interviews, questionnaires, case study method, etc. The work in itself never
ceases at mere assessing task but a proper planned action and feedback programme are
rather most important of all. This psychotherapy session will also help in including a
feeling of consideration of the company towards its employees.

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 Conclusion

Upon analyzing each dimensions of the questions under study, following are the
conclusions drawn:

 Questions 1-2 reflect about the understanding of PMS among employees which
shows that most of them relate it with their career growth. Similarly for the 2nd
question it is concluded that mostly the performance is discussed formally with
line managers only half yearly.
 Questions 3-5 are basically on KRAs which is the major cause of appraisals. It
reflects the positive responses of employees as they are well aware of their KRAs
and also find them not only realistic and achievable but quantified too. Thus we
can conclude that the KRAs set are realistic and achievable.
 It is also observed that the employees relate PMS basically with the incentives and
then promotions as well as trainings. Thus it is important that after the appraisal
low performers should also be asked for the kind of training they require and then
provide them with it, as training plays an essential role in improving performance.
 Mostly employees also understand that appraisal basically results in improved
efficiency as they are then aware of their strong and weak areas which also results
in their career development.
 It is found that the satisfaction level of employees regarding their incentives as
well as the fairness in PMS of their organization is really high and thus, very
positive for the organization as their employees are well content with it.

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BIBLIOGRAPHY

73
1) Human Resource Management,

K Ashwathapa.

2) Human resource planning, Udai Pareek and TV Rao.

3) www.relianceada.com

4) www.businessballs.com

5) www.relianceinfo.com

6) www.google.com

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 annexures

QUESTIONNAIRE FOR PERFORMANCE MANAGEMENT SYSTEM

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OBJECTIVE: The rationale to outline the questionnaire is for both the academic as
well as management purpose and the information revealed by you will be strictly kept
confidential, so please try to be as honest and objective as possible.

(A) Age :

Department:

Gender :

(B) QUALIFICATIONS:

……………………………………………………..

(C) EXPERIENCE :

Experience in reliance (years/ month) ……………………

(D) DO YOU THINK?

(i) What is the general understanding of PMS?

(a) Is it for promotion and incentive ( )
(b) Is it for career growth ( )
(c) Is it a formality every year ( )
(d) Is to check the deviations of actual from standards set ( )

(ii) How often does your team leader or line manager formally discuss
your performance with you?

(a) Quarterly ( )
(b) Half yearly ( )
(c) Only at the time of appraisal ( )
(d) Never ( )

(iii) Do you possess a very clear understanding of the KRAs ?

(a) Strongly Agree ( )
(b) Agree ( )
(c) Disagree ( )
(d) Strongly disagree ( )
(iv) The KRAs/targets set for you are realistic?
(a) Strongly Agree ( )
(b) Agree ( )
(c) Disagree ( )
(d) Strongly Disagree ( )

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(v) Are the KRAs set quantified for each level of employees?
(a) Strongly Agree ( )
(b) Agree ( )
(c ) Disagree ( )
(d) Strongly disagree ( )

(vi ) What benefits could be derived from PMS?

NAME Strongly
Strongly
Agree Agree Disagree
Disagree

(a) Training opportunity ( ) ( ) ( )

( )
(b) Promotion ( ) ( ) ( )
( )
(c ) Incentives ( ) ( ) ( )
( )
(d) Others (please specify) ( ) ( ) ( ) ( )

(vii) Can PMS influence any of the following at individual or

departmental level?

NAME SA Agree Disagree

SD

(a) Productivity ( ) ( ) ( )
( )
(b) Improved efficiency ( ) ( ) ( )
( )
and effectiveness

(c) Career development ( ) ( ) ( )

( )

(d) Succession planning ( ) ( ) ( )

( )

(viii) Is the current PMS connected with variable parts of

compensation, or are you satisfied with the performance
linked incentive in your organization?

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 (c) Strongly Agree ( )
(d) Agree ( )
(e) Disagree ( )
(f) Strongly disagree ( )

(ix) Do you think the performance appraisal is a fair

reflection of
your performance?

(a) Strongly Agree ( )

(b) Agree ( )

(c) Disagree ( )

(d) Strongly disagree ( )

(x) What improvements/ suggestions can be there for the

present appraisal system?

……………………………………………….

……………………………………………….

……………………………………………….

(xi) Do the PMS possess any loopholes?

……………………………………………….

……………………………………………….

……………………………………………….

(xii) Please suggest any other model to increase efficiency and

effectiveness?

………………………………………………

……………………………………………….

……………………………………………….

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