objectives of using pms in iocl

7/28/2019 Objectives of Using Pms in Iocl

1/19

OBJECTIVES OF USING PMS IN IOCL

The performance management system aims to encourage the following:

Creation of high performance orientation at Indian Oil

Stronger alignment of individual with organizational goals Higher degree of transparency, uniformity and process efficiency

Performance ownership at the employee level

Coverage

All officers working in Grades A I

KEY ROLES IN PMS

FEATURES OF PMS: The features of PMS are stated below

Performance Period

APPRAISEE APPRAISER REVIEWER COUNTERSIGNING

An individualwho is assessedas part of theperformancecycle

The key driverof own PMS

An individual whoassesses theperformance ofone or moreAppraisees thatreport into him/her

Helps manage

performance &providescontinuousfeedback andcounselling

An individual who isresponsible forreviewing the entireperformance processand typically isAppraisersAppraiser

Ensure objectivity,transparency &consistency

Is an individual whois responsible forensuring sanctity ofprocess at the highestlevel. He will be thefinal authority

Final authority

Facilitator/ Administrator

An individual who acts only as a facilitator and ensures adherence to timelinessand consistency in the process

Facilitates the process


2/19

Performance Planning

Mid-year Review

Final Appraisal, Review & Feedback

Cornerstone of PMS

The features and tools of PMS have been designed to reduce subjectivity and individual biases that mayimpact the effectiveness of a performance management system.

Key cornerstones of objectivity, transparency and consistency across IndianOil have been directlyaddressed. While the various design features of PMS address all these cornerstones, the emphasis of eachfeature is highlighted in the following table.

Features Objectivity Transparency ConsistencyDefinition of

Performance Joint Planning &Review with Appraiser Active role of Reviewer

Defined & articulatedRating Scales onCompetency, Value &Potential

Communication ofRatings upto reviewstage

e-Enabled PMS

Stretch Tool Definition ofCompetencies Continuous Rating Scale to rate the KRA/KPI performance will aid Appraiser & Reviewer to minutelydifferentiate between the subordinate performances.

Performance period

PMS follows an April March annual cycle aligned to the financial year. The cycle consists of threephases, namely, performance planning, mid- year review, and Final performance Review. The criticalcalendar months and the sequence of events for these phases are represented in the following figure:

Periodic &

Ongoing

development

activities


3/19

Cascading Process

Performance planning is undertaken from April to June. Once the MOU between the organization andMOP&NG is finalized, these targets are cascaded to the divisions. The division heads then cascade themdown to their subordinates. This process is followed at all levels at which this is possible. At each stage ofcascade, some other targets which may not necessarily be cascaded down, may also be added - thesewould be specific to specific roles, and may be in respect of ongoing projects and carried forward fromthe previous year.

This stage involves discussion between Appraisers and Appraisees to set and agree on the contents of theAppraisees performance plan parameters for the coming year. Once approval is obtained from theReviewer, the performance plan is considered final.

Unique Roles

In order to standardize the performance planning process and measurement of performance acrossdivision/functions/units/, each officers in the organization has been mapped to Unique Role (UR). Thisalso ensures strong alignment between performance plans and organizational business requirements.

Ongoing Feedback

Performance

Planning

Mid Year Review(October)

Final Appraisal

Final Rating

computationand Feedback

(April-May)


4/19

These unique role profiles were created by role holders across divisions and locations, and then validatedby respective functional experts.

DEFINITION OF PERFORMANCE

Definition of performance in PMS is based upon Key Result Area (KRAs), Competencies, Values and

Potential. The achievement against each of these will together constitute the Appraisees performance.

KRAs are identified areas of performance that support the organizations goals that are to beaccomplished during the year. Each KRA is accompanied by one or more KPIs. Some of theKRAs from each unique role are marked mandatory based on organizational alignment toensure consistency in assessment of Appraisees performance.

Competencies are knowledge, skills and abilities described in behavioral terms that arecoachable, observable, measurable, and critical to successful performance.

Values are statement that expresses IndianOil ethical commitments and guiding principleswhich are timeless and will stand the test of time, market forces and management practices anon uploading of which individuals are assessed.

Potential includes the critical attributes which do not get covered in competencies and reflectan individuals capacity to shoulder higher responsibility.

The relative weightages of these 4 sections KRAs, Competencies, Values and Potential has been pre-decided.

GRADE KRA : C : V : PA/B/C 60 : 15 : 10 : 15D/E 55 : 20 : 10 : 15F/G 50 : 20 : 15 : 15H/I 45 : 20 : 15 : 20

H, I grades

KRA (45%) Competency (20%) Values Potential


5/19

F, G grades

D, E grades

A, B, C grades

PMS allows the Appraisee to define his/her performance measures using the three categories of KRAsdefined in the following section.

Additionally, to be able to focus and prioritize on the basis of importance, each KPI also has a

weightages. This would be assigned by Appraisee and Approval by the Appraiser using the e-PMS.

KRA:

Definition Key Result Area (KRAs) are Critical outcomes towards which effort is directed to supportachievement of desired business results. Each KRA in a role profile would fall in one of the followingbuckets

a) Operational/ Direct or critical Outputs: KRAs pertaining to functional/operational activities (interms of efficiency) as performed in the organization.

b) Financial: KRAs are pertaining to direct impact on top line (revenue) or bottom line (cost) at adecision making level.

c) Strategy and growth/ Forward Planning: KRAs pertaining to strategic direction setting orestablishing differentiation with respect to manufacturing, selling & marketing, productdevelopment and delivery.

d) People/Team Management: KRAs pertaining to people development, training, performancemanagement and employees satisfaction activities for all Appraisers with direct reports.

e) Boundary Management/Coordination and Liaison: KRAs pertaining to liaising/ coordinatingwith governmental (Local, state, central), Administrative, Regulatory, statutory bodies andvendors/customers (external & internal)

KRA (50%) Competency Values Potential




6/19

*Titles in italics would apply only to ABC & DEF grade officers

Select KRAs

Broadly three categories of KRAs can be selected/ created. Mandatory KRAs would be pre-selected and the Appraisee has to assign targets on them.

Defining KPI for KRAs

Key Performance Indicators (KPI) are specific indicators of performance to measure extent ofachievement on set KRAs within a given time frame. Each KRA corresponds to specific KPIs defined orverify the extent of performance achievement in a given performance time frame.

For each KRA selected the Appraisee should select at least one KPI. In case of special KRAs, she /heshould define a KPI.

The Appraiser will use the stretch tool to determine the stretch involved in the targets at level 3.Performance plan submission will be possible for Appraiser and reviewer only after 90% of the planssubmitted. The appraiser would be provided with dynamic display of Weighted Average Stretch for theplan and grade wise Weighted Average stretch for reporting group; Plan Weighted Average would sum ofproduct of individual KPI weight and stretch assigned to the KPI. Weighted Average stretch for plansunder an Appraiser/ Reviewer group will be limited at 0.90 through the system intervention.

Role based KRAs

Additional KRAsSpecial KRAs

Refers to KRAs that are

applicable to an

incumbent by the virtue

of role he is performing in

the organisation

There could be incumbents

performing certain tasks

that might be of some other

role existing in the same

function or some other

function e.g. Finance person

in a location carrying out

Refers to certain specific

initiatives and goals that

an incumbent might

have during a year e.g.

Special project of testing

a new product in a

refinery


7/19

If the Appraiser is not in agreement with the choice of KRA/KPI or the weights and assigned byAppraisee, the Appraiser can send the plan back and it is suggested that the Appraiser and Appraiseeshould attempt to achieve a consensus through a process of discussion. In most cases, the Appraiser isexpected to arrive at a outcome that satisfies both the Appraisee and the Appraiser.

Note: The Appraiser will finally view and accept /discuss/ refer to reviewer the performance plan.

In case the Appraiser feels the need he/she can approach the reviewer for appropriate inputs. TheReviewer and Appraiser would arrive at a solution through a process of discussion that would arrive at asolution through a process of discussion that would align the points of view of the Appraiser andAppraisee. The Appraiser would discuss the same with the Appraisee to close the issue.

In the unlikely event of the need for further escalation, the issue can be taken to the Reviewer on a case tocase basis. The Reviewer would have a joint discussion with the Appraisee and the Appraiser where thedecision taken by the Reviewer would be final.

It is mandatory for the Reviewer to view and approve all plans, before the planning phase is closed.

Stretch

Stretch is defined as the degree of difficulty built into targets. A consistent process for target settingensures uniformity in degree of loading and stretch in targets for individuals. The target setting process inPMS works on the following 5 dimensions:

Relative to previous achievements

Degree of dependence on uncontrollable

Degree of complexity

Skill requirements

Need for innovations

During the performance planning phase, the Appraiser will use the stretch tool to determine the stretchinvolved in the targets at level 3. Appraisee proposes targets for each KPI. Appraiser then assesses theoverall degree of stretch of each target using a four point (High, Moderate, Low and Nil) scale alongthese 5 dimensions.

Stretch needs to be calculated for Annual target at level 3 of performance of the target. This is the target

level for MOU and Center point of scale and also the logical definition of target based on MeetsExpectations definitions of scale.


8/19

The 4-point scale for each dimension is as follows:

Dimension Nil Low Medium HighRelative topreviousachievements

NIL Standards oftimeliness(deadlines),quantity and costsof outcomes can

be met withnormal effort.Standards havebeen regularly metbefore.

Standards oftimeliness(deadlines),quantity, qualityand costs of

outcomes requiresome significanteffort. Standardshave been metonce or twicebefore.

Standards oftimeless(deadlines),quantity, qualityand costs of

outcomes requirevery significant,sustained effort.Requires standardsthat have neverbeen met before.

Degree ofdependence onuncontrollable

NIL Limited supportfrom others isnecessary forsuccess of theinitiative.

Others work orsupport isnecessary forsuccess, but it maybe late or notcomplete.

Others work orsupport isnecessary forsuccess, but it maytake a newdirection at any

pointDegree ofComplexity

NIL Steps, milestonesand resourcesrequirementsfollow a testedroute.

Target requires thecoordination ofmore resourcesand elements thantested route.

Required steps,dependencies andtime frames havenot previouslybeen planned,integrated orexecuted

Skill requirement NIL Existing skills maybe challenged butnew skills are notrequired.

Required skills canbe developed bytraining withminimal disruption

Focused anddedicated time andresources will benecessary to gain

required skills.Need forinnovation

NIL Can use standardtechnology andtools

Involves someinnovation inadapting existingtools or methods.

Requiresrevolutionaryinnovations andtechnology.


9/19

Once the targets have been jointly assessed by the Appraiser and Appraisee along each of the 5dimensions, the total points are average to arrive at a stretch score for a KPI.

Stretch can reduce subjectivity but not eliminate it. Appraiser and Appraisee objectivity and processadherence are required for stretch to function adequately. The appraiser/ reviewer would be provided withdynamic display of Weighted Average stretch for the plan and Grade-wise Weighted Average stretch forreporting group; Plan Weighted Average would be sum of product of individual KPI weight and stretchassigned to the KPI. Reviewer is expected to ensure balance in stretch across similar roles. The degree ofstretch varies across KPIs. Weighted Average stretch for plans under an Appraiser/Reviewer group to belimited at 0.90 through system intervention.

A new stage Ready for submission has been introduced to facilitate effective comparison ofplans/appraisals by Appraiser/Reviewer/Counter signing officer (CSO). This will check whether the plan/appraisal is complete in all aspects.

Bulk submission would be allowed for submission of plans as well.

COMPETENCIES

Definition- Behavioral Competencies are defined as Skills and abilities described in behavioral termsthat are coachable, observable, measurable and critical to organizational performance. Competencies formthe function of what capabilities are required for the successful execution of roles and responsibilities,thereby driving functional unit and organizational performance.

Functional competencies include technical skills and know how required to discharge duties. Based onthe demand on the varying demands of each role, competencies and their manifestation degree vary.Although the Appraisee does not have the option to select competencies defines for his role, he/ she mayview the competencies and proficiency levels which are applicable to his role and he is expected to

demonstrate on the job.

VALUES:

Following are the core values which have been defined by the organization as essential to display for allthe grades

Care

Innovation

Passion

Trust

POTENTIAL

Following are the attributes which have been defined by the organization for grades A-I.


10/19

Grades A,B,C: Adaptability to change, collaboration, cost consciousness/ resources utilization,dependability, quality of work/ output

Grades D, E, F: Boundary management, commitment to total organization, enhancement ofquality and output, entrepreneurship, managing change.

Grades G,H,I: Ability to build a strategic vision, business sense, communication skillsleadership abilities, Team building.

EDITING PERFORMANCE PLAN

In situations, where extraneous circumstances significantly impact performance plans, changes in theplans may be incorporated e.g. changes in business environment which may be impact key Result Areas,KPIs or targets of various individuals. Editing the performance plan is to be initiated by the Appraisee,the rationale for the same is to ratified by the Appraiser and the Reviewer before the change can beformalized into the system. Once approval is obtained from the reviewer, the Appraiser is able to modifyhis plan and this then follows the same process as the initial performance planning module.

PERFORMANCE PLANNING- Process steps, Roles and Responsibilities

RESPONSIBLITIESProcess Step Appraisee Appraiser Reviewer Facilitator/AdministratorInitiate performanceplanning phase forthe year

Identify appropriateUR

Identify Role-based

KRAs

Identify overallweightage for KPIs

Propose weightages& targets for eachKPI

Propose targets forKRAs

Assign degree ofstretch

Validate degree ofstretch

Final approval ofperformance plan

Close performanceplanning phase forthe year

Initiation of changein plan

Ratification and sign


11/19

off

FEEDBACK AND COUNSELING

The process of continuous Feedback and counseling is an inherent and critical part of PMS.

The mid-year and the final review are specifically focused on Feedback and counseling and hence requirethe Appraisee and the Appraiser to have formal feedback session.

For Feedback and counseling to be truly effective, it should be provided and received on an on-goingbasis. When used effectively, Feedback & counseling are powerful means of positively impactingperformance.

Feedback and counseling helps an Appraiser in both obtaining information and providing inputs on howan Appraisee is performing and whether or not he/she is headed in the right direction. Such hesitation canbe overcome by considering the importance of their feedback in correcting the performance level of the

Appraisee, and the consequent benefit to the Appraisees career.Feedback is of various types:

Positive feedback

Corrective feedback

Feedback focused on identifying obstacles to performance

Feedback for the purpose of sharing information etc.

Tips for giving Positive Feedback Tips for giving negative Feedback Recognize good performance often Express confidence in the Appraisees ability to

improveProvide specific examples in your feedbackmessages

Focus on behavior that can be changed not theperson

Provide timely feedback, both positive &corrective

Define the impact on you and other members

Listen to the other persons viewpoints andideas

Offer support to help or remove obstacles

Solicit as well as provide feedback Share your expectations for future behaviorCatch performance problems early while theyare small

Together explore options for solving the problem

Check to be sure clear communication hasoccurred

Describe consequences of improved/ not improvedperformance

Remember Giving Feedback Is like Giving GIFTS

Goes both way : Feedback is a two way exchange. It is critical to listen to the

Appraisee to whom you are giving feedback.

Initiated by the person who sees the need: Feedback is initiated by the person

who sees the need. When Appraisee has requested feedback, he or she is less

likely to be defensive. When Appraisee has requested feedback, he or she is less

likely to be defensive. A climate conducive to giving and receiving feedback and

one that values honest communication, makes it easier for people to ask for

feedback when its needed.

Frequent: Feedback needs to be provided on a regular basis. If the Appraisee is

surprised by the message, feedback is not frequent enough.

Timely: Generally, feedback that is given as close to the event as possible is

most useful. However doesnt necessarily mean that feedback must follow

immediately after a triggering event, especially if there are emotions involved.

Specific: Non-specific comments leave the Appraisee with insufficient information

about what changes or improvement he or she might need to make. Base your

feedback (positive, negative or corrective) on observed behavior and facts andnot on inferences, assumptions or what youve heard from others


12/19

Performance Diary:

The performance diary is a tool provided to the Appraisee to keep record of key information related toperformance. The Appraiser can make entries as when required; all the entries will be stamped by the dateand time entered.

Every Appraisee entry is intimated to Appraisees performance entry is intimated to Appraisee.

The Reviewer is able to view the Appraisees performance diary when he desire.

The diary is expected to ease the effort of tracking key performance events/activities. This would be usedas a support document during performance reviews.

Mid-Year Review

The objective of a mid year review is to ensure that performance management is not limited to once ayear report card but has a mid year process for reviewing and tracking achievements. It also reducesthe scope for surprises at the end of the year and ensures that the Appraisee is always aware ofexpectations.

Appraisee will

complete self-Appraisal onKPIs againsttargets set forfirst 6 months

Appraisee will

submit self-Appraisal toAppraiser

Appraiser will

discuss thereview withappraisee

Mid- year

Appraisalcompleted


13/19

Mid -year Review of performance for each individual is conducted during the month of October. This isinitiated as a appraisal by the Appraisee and a review by the Appraiser. The mid year Review does notresult in a performance score, but is a half yearly opportunity to record comments on performanceissues.

The Mid-year review is also an opportunity where under extraneous circumstances changes inperformance plans may be incorporated e.g. Changes in business environment which may impact KeyResult Areas of various individuals.

Final Appraisal, Review & Feedback

Objectives

Final Appraisal, Review & feedback is an assessment phase when Appraisers assess level of achievementof KRAs, targets and routine responsibilities and demonstration of competencies for each Appraisee.

The final performance review and feedback is undertaken in the month of April-May. Ratings andfeedback will be given based on what the employees has delivered.

During the final appraisal, review and feedback phase, first the appraise undertakes a self-appraisal andgives a rating on all the performance parameters i.e. KRAs. The Appraiser then does the assessment &rating on KRAs, Competencies, Value & potential. At any stage the Appraiser and /or Reviewer can callfor a discussion with the Appraisee.

Feedback and guidance to the Appraisee should be provided on a continuous basis throughout the year.PMS provides the Appraisee and the Appraiser opportunity to input the key achievement as when theyhappen through an on-line personal diary. This will also help capture all performance-related informationand keep continuous focus on performance.

The Appraiser/Reviewer will make an assessment of level of achievement using the anchors and willdifferentiate appraisee performance using the continuous rating scale.

Calculation of Stretch

Stretch is the degree of difficulty built into the target at the time of performance planning and the

appraiser had assigned the same during the performance planning phase. At the end of the year rating oneach KPI will be multiplied by the stretch on it get the performance score for each KPI.

This process will ensure that Appraisees whose targets are stretched are not disadvantages as compared tothose whose targets have lower stretch. Stretch has been considered for the


14/19

The Final Review Process

Rating Scale:

All performance ratings in PMS are done on a 5-point rating scale. The scale description is different fordifferent sections.

KPIs

Appraisee

will

complete

Self-

Appraisal

on KPIs &

submit

the

Appraiser

Appraiser

will

review

Self-

Appraisal

and

performa

nce

outcomes

of the

Appraisee

Appraiser

will

determin

e Ratings

on each

KPI,

Compete

ncy,

value

potential

element

Reviewer

will

validate

each

rating

and make

changes

if any

System will

calculate the

PMS score as

per

weightages of

elements and

overall weight

of sections

based on KPI

competencies,

value and

potential

Only the

Final core

on KPIs is

shared

with

Appraisee

at this

stage

Countersigni

ng officer

validates

and

moderates

final rating

as per rating

as per

currentprocess

Concludes Final

review phase,

Overall Rating

to be shared

with Appraisee


15/19

KPIs will have Continuous Rating Scale upto first decimal from 1.0, 1.1to 4.9, 5.0 for assessmenton KRA/KPI

The continuous scale from 1.0 to 5.0 will be anchored to target metrics- reflecting degree of performanceachievement against each KPI. Intermediate performance would be assessed by Appraiser /Reviewerusing the continuous scale. The target metrics against the 5 levels of achievement have been proposed bythe Appraisee, validated by the Appraiser and reviewer y the Reviewer during the performance planningphase.

The following is an illustration of the scale:

Level Level Level of Target Achievement(Illustration forscale in INR crores)

1 Significantly below Expectations 120 crores2 Moderately Below Expectations 130 crores3 Meets Expectations 145 crores4 Moderately Above Expectations 150 crores5 Significantly Above Expectations 170 crores

5 dimensions of Stretch DegreeofStretch

Nil Low Medium HighRelative to the previous years .25 .5 .75 1

Dependence on uncontrollables .25 .5 .75 1Complexity .25 .5 .75 1Skill requirements .25 .5 .75 1Need for Innovation .25 .5 .75 1

Total score 1.25 2.5 3.75 5Stretch 0.25 .5 0.75 1

The performance score is calculated based on performance on KPIs.

For example :

KRA Weight Rating Stretch Individual KPI Score (KPIweight*rating *stretch)

KPI 1 25% 3.2 .85 0.680KPI 2 20% 4.7 .75 0.705KPI 3 30% 4.4 0.95 1.254KPI 4 25% 2.5 0.60 0.375KPI score 3.014


16/19

The following is an illustration of how overall performance scores can be calculated for individuals:

PMS Calculation SheetFG level

KRA Weight Stretch Rating Individual KPI score50% (weight*stretch*rating)KPI 1 25% 0.85 3.2 0.68KPI 2 20% 0.75 4.2 0.63KPI 3 30% 0.95 4.4 1.254KPI 4 25% 0.60 2.5 0.375KPI Score 2.939COMPETENCY Weight Rating Individual Competency

score20% (weight*rating)Competency 1 33% 3 1.33Competency 2 33% 4 1.00Competency 3 33% 3 1.00Competency Score 3.33VALUES Weight Rating Individual Values

Score15% (weight*rating)Values 1 33% 4 1.33Values 2 33% 3 1.00Values 3 33% 4 1.33Values Score 3.67POTENTIAL Weight Rating Individual Potential

Score

15% (weight*rating)Potential 1 33% 4 1.33Potential 2 33% 5 1.67Potential 3 33% 4 1.33Potential Score 4.33Overall Score 3.336


17/19

Overall Score= (KPI rating *KPI Weight+ Competency rating * Competency Weight + Values rating*Values Weight+ Potential rating * Potential weight)

Overall Score= (2.939*50% + 3.33*20% + 3.67*15% + 4.33*15%) = 3.336

Appraisal Submission by Reviewer/Counter Signing Officer (CSO)

They can work on the appraisals received by them and SAVE them in the system to make theseAppraisals ready for submission. Appraisal submission is only possible for Appraiser/Reviewer only after90% of appraisal is submitted. There would be System Alert on exceeding the prescribed percentagelimits on Grade-wise Rating.

The Appraiser will be communicated the Performance score on KPI upto reviewer Level. The final scoresand rating (OS/VG, S/F, US) would be arrived at and after completion of assessment by the CSO aperformance appraisal report will be displayed online. This report would be available for 15 days fromdate of display.

MECHANISM FOR REPRESENTATION:Employees can register their grievances/representation within the duration of display to the concerned HRelse Annual Performance Appraisal Report (APAR) would be treated as final. Competent authority shalldecide the grievances within 30 days receipt of representation. Decision will be communicated to theemployees within 15 days of receipt of the decision of the competent authority by concerned HR.

MANAGING ROLE CHANGES

PMS helps in managing role which arises from transfers, promotion, change in responsibility allocationetc. When there is change in role, the performance appraisal and review is done before transitioning themto the new role, except for incumbents who have occupied the previous role for less than 3 months.

In case of new recruits who come on board during a performance cycle, if he/she spends less than 3months in the performance cycle, his or her performance will not be appraised and reviewed.


18/19

PERFORMANCE APPRAISAL, REVIEW & FEEDBACK Process steps, Roles andResponsibilities:

PROCESSSTEPS

RESPONSIBILITY

Appraisee Appraiser Reviewer Facilitator/Administrator

Initiate appraisal&review phases(mid-year&Final)

MID YEARREVIEWSelf appraisal Commenting onperformance

Closure FINALAPPRAISAL &REVIEWSelf appraisal Year endappraisal

Year end review Achievingconsensus

Communicatingof performancescore andfeedback to

Appraisee

Close appraisal &review (mid- year& final)


19/19

The following is the list of competencies that form a part of PMS:

1) Planning & Organizing

2) Strategic Orientation

3) Change Leadership

4) Championing Customer focus

5) Performance Focus

6) Seizing Opportunities

7) Personal effectiveness

8) Team Leadership

9) Developing Self and others

10) Impact and influence

11) Strategic thinking

12) Practical Creativity

13) Openness and Learning

14) Customer Service Orientation

15) Achievement Orientation etc.

objectives of using pms in iocl

Documents