NTPC LIMITED

PERFORMANCE
MANAGEMENT SYSTEM

Objectives of NTPCs PMS

P A C E Performance And Competence for
Excellence
To accomplish overall organisational vision and mission
by linking individual performance to company objectives
To facilitate fulfilment of individual aspirations
To build a culture of performance
To encourage two-way communication between appraiser
and appraisee
To evaluate the potential of the appraisee to assume
higher responsibilities in the organisational hierarchy
To translate future skill requirements of the organisation
into individual development plans
To identify high performers and recognise them through
rewards and incentives

Strategy Plans &

Memorandum of Understanding
Linking Strategy
With Performance
Management

Development of Strategic Goals

At the Top Leadership Level

Cascading Down of Goals at the Executive

Director and General Manager/BUHs Level

Cascading Down of Goals at the Head of

Department Level and other levels below

PACE is a five step process

Identify KPAs,
constituents,
weightages,
measures and
targets
Identify
functional and
managerial
competencies for
the appraisee

Joint review of
performance
Document
changes in
KPAs if any
Document
mid-year
review
discussions

Step 1
Step 2

Mid-year
Review

Performance
Planning

PMS
Process

Communicatio
n of score
Developmenta
l feedback

Annual
Assessment

Feedback
Step 5

Step 3

Normalisation
Process
Step 4

Assessment of
KPAs,
Competencies,
Values and
Potential by
appraiser
Training and
Development
Plans
Review by
reviewing officer

PACE Cycle (Important Dates)

Stages of PACE

E1 to E5

E6 & above

Performance Planning

1st to 25th January

1st to 25th April

Mid Year Review

1st to 15th July

1st to 15th October

Annual Assessment

15th Dec to 7th Jan

1st to 25th April

Normalization

15th to 31st January

1st to 25th May

Communication of scores

7th February

31st May

Step #1: Performance Planning

KPA Setting Process
MOUs

Corporate Plan

Company
Goals
Initiatives

Special Tasks

Unit Goals

Functional /
Departmental
Goals
Individual Goals

Why is it critical?
Parameters for performance measurement are predefined
Objectives are prioritized
Individual performance is enhanced by clear
definition of deliverables
Role of individuals is clarified within overall
organizational context

Process Steps
Set KPAs
KPA setting for all appraisees in
consultation with the reporting
officer (appraiser)
KPAs to be set by referring to the
KPA Directory and taking inputs
from the MoU targets, functional
plans, individual responsibilities
and cascading of KPAs from the top
The KPAs, once finalised, to be
signed off by the appraiser and the
appraisee
Identify Competencies
Functional competencies for the
appraisee to be identified and
written in the PMS form by
referring to the Competency
Directory
Managerial competencies to be
identified from the prescribed set on
the PMS form

Principles of Formulating Key Performance Areas

Define Job
Families

Define Roles

Develop
KPAs

The critical few areas which define the employees

contribution towards achievement of organizational
objectives
They are to be derived from MoU, functional plan,
plant level plan, supervisors priorities etc.
Select KPAs where there is greater element of
control.
KPAs of managers in a chain are linked to a large
extent. Thus, many managers have the interest to
support a managers KPAs.

A KPA based Performance Management System

plays a critical role in achieving business strategy
Define Job
Families

Define Roles

Develop
KPAs

Achieve Business Strategy and Goals

Communicate the strategy, goals and management priorities to the
organisation
Provide a vehicle to align the objectives, actions and behaviour of
employees with the overall objectives of the organisation
Provide control to management
Track progress towards goals
Assign responsibility and accountability
Provide early warning to top management
Enable the organisational and individual improvement process
Gather data to measure performance
Identify areas that need improvement
Provide objective feedback and facilitate learning
A KPA based Performance Management System provides the rudder which
management requires to steer the ship

The Nature of KPAs

Define Job
Families

Define Roles

Develop
KPAs

EDs

GM
AGM

SelfResponsibility

Common Area
Of Responsibility

Vertical & horizontal interdependence

Area of self-responsibility

The Nature of KPAs: Three Types of Areas at

the Workplace
Define Job
Families

NO CONTROL

FULL
CONTROL
PARTIAL
CONTROL

Define Roles

Develop
KPAs

Type of KPAs
Define Job
Families

Define
Roles

Develop
KPAs

Numeric
PLF, Availability, Profit, Cost, Inventory

Time/ Deadline
Projects, Clearance, Maintenance, Land
Acquisition, Accounts, Budgets, Engineering

Negative
Complaints, Grievance, Accidents, IR problems,
man days lost, Rejection, etc.

The Nature of KPAs

IMPORTANCE
LOW

U
R
G
E
N
C
Y

LOW

HIGH

HIGH

ACTIVTY
TRAP

KPAs
(20% Activities
Lead to 80%
Results)

FIRE
FIGHTING

EMERGENCY

NORMS FOR KPAs

TO BE DRAWN FROM THE BUSINESS PLANS AS FAR AS POSSIBLE.
THE NO. OF KPA INDICES SHOULD NOT BE MORE THAN EIGHT & THE NO.
OF CONSTITUENTS OF KPAs SHOULD NOT EXCEED 24 IN ALL INCLUDING
THE COMMON INDICES.

THE UNIT OF MEASUREMENT FOR ANY KPA CAN ONLY BE ONE OF THE
THREE ,VIZ., % , TIME , Nos.

EACH KPA SHOULD CARRY AT LEAST 3 MARKS

NO KPA CONSTITUENT SHOULD HAVE MARKS IN DECIMALS SUCH AS 3.5
OR 4.5.

EVERY

EXECUTIVE TO HAVE ATLEAST TWO COMMON INDICES. THE

MINIMUM MARKS FOR COMMON INDICES AT VARIOUS LEVELS SHOULD

BE AS FOLLOWS.

Performance Planning
Performance Planning is done through
a

process

of

discussion

between

executive and the reporting officer to

arrive at the performance targets for
the Key Performance Areas (KPAs)

KPA Setting Process

Corporate Plan

Initiatives

MOUs
Company
Goals
Unit Goals
Functional /
Departmental
Goals

Special Tasks

Individual
Goals

Performance Planning

Identify the KPAs, their constituents (Activities), measures for each constituent, marks
and three different performance (target) levels. While filling the form, the guidelines
need to be kept in mind.
KPA directory available for reference

Performance Planning
Example of KPAs: Coal Mining CBA Act 1957 (L3): Site
SNo

KPA indices
with marks

Constituents of the KPA index

Measure

Application &
Notifications
Index

Collection of relevant data (Khatian, Maps,

etc) (Section 4)

Time

Preparation of land plan and land schedule

(Section 4)

Time

Submission of land plan & land schedule to

CC (Section 4)

Time

Preparation of Land Plan (Village wise, Plot

details) (Section 7)

Time

Freezing of Block Boundary (Section 7)

Time

Verification of plot details (Section 7)

Time

Submission of land plan to CC (Section 7)

Time

Collecting data of nature and the extent of

the land to be acquired (Section 9)

Time

Submission of data to CC (Section 7)

Time

Liaisoning for Section 10

Time

Weightage of
constituents

Target performance levels

Stretch
(100%)

Intermediate
(80%)

Base
(60%)

Assigning Weightage
Understanding the Relative Importance of
Each Key Performance Area.
Understanding the Difficulty of Each Key
Performance Area.
Understanding Superiors Perspective.
Discussing Weightage with the Superior.
Convert the Weightage of Each KPA for the
Different Levels of Performance.

PMS would comprise assessment on four parameters

with different wieghtages for various levels
SNo.

E1-E3

E4

E5

E6-E8

E9

80

75

65

50

50

2 (a) Functional
Competency
Assessment

10

10

10

10

2 (b) Executive/Managerial
Competency
Assessment

05

05

10

15

15

1.

PMS Parameter
KPA

Core Values
Assessment

05

05

05

15

20

Potential Assessment

Nil

05

10

10

10

100

100

100

100

100

Total

For executives in lower grades, there is higher weightage on KPAs and functional competencies
as the there is higher focus on achieving the immediate functional tasks
The weightage on managerial competencies and values increases for an executive as the grade
increases because the role requires achieving business goals by managing work of other
employees

Competencies are defined under two heads:

Functional and Managerial
Competencies

Types of
Competencies

A combination of the skills, knowledge and behaviors that are critical

to the success of the organization and the achievement of individual
performance goals

Functional
Competencies that are required for
success in a particular function or
job family
Typically involve demonstrating
technical/expert knowledge

Benefits of
defining
Competencies
for each role

Managerial
Behavioral in nature
Generally relevant to all
employees

The opportunity to link HR systems with business objectives

A common language to define the skills, knowledge and behaviors
required for successful performance in positions across the
organization
An integrated approach to people issues
Recruitment, PMS, Training etc.
Improved quality of information on people within the organization

Job families have been defined on the basis of the

roles performed by different departments within a
function
Define Job
Families

Level Typical Grade (1)

L1

Define
functional
competencies

Define Roles

Illustrative

E6 E7

Electrical
Maintenance
(Head)

L2

E5 E6
Main Plant

Electrical
testing

Coal
Handling
Plant

Electrical
testing

Low
tension
Switch
Gears

ESP

High
Low
tension
tension Switch
Switch Gears
Gears

Generator

E1 E5
Motors

L3

Transformers
and switch
yard
maintenance

Transformers
and switch
yard
maintenance

Note: (1) Actual grade varies from plant to plant depending up

on
size of the plant and experience of individual

High
tension
Switch
Gears

Motor
s

Roles and functional competencies Electrical

Maintenance (Head)

Role

Ensure high availability of all electrical equipment and systems in the power plant
Minimise cost of electrical maintenance of the plant
Supervision of maintenance measures in electrical maintenance division and ensuring quality of maintenance
Ensure availability of spares and other infrastructure for maintenance
Minimise response time to the customer (i.e. Operations) for handling routine day-to-day problems
Optimise equipment lifecycle cost
Ensure compliance with safety requirements
Optimise Mean Time Between Failure (MTBF) and Mean Time To Repair (MTTR)
Plan resource requirements for electrical maintenance manpower, materials and contracts
Network with other electrical maintenance teams in the plant and at other locations to capture learning
Coordination with R&M for equipment upgradation

Illustrative

Functional competence requirement

Technical knowledge of all electrical machines and equipment (e.g. generator, motors, transformers, switch gears, relays etc.)
Understanding of working and history of equipment
Knowledge of standard operating procedures with respect to maintenance of main plant, transformers, switch yard and coal
handling plant
Technical trouble shooting
Knowledge of safety requirements
Awareness of suppliers of material and services for electrical maintenance
Knowledge of power generation process
Knowledge of modern maintenance management practices and of NTPCs Maintenance Management Systems
Spares inventory management
Knowledge of statutory guidelines related to electrical equipment

Cross functional competence requirement

Knowledge of Engineering, Erection and Operations functions
Knowledge of Mechanical, C&I and Civil Maintenance
Knowledge of Finance, HR, IT and C&M

Managerial Competencies
S No

Competency

E1-E5

E6-E7

E7A-E8

E9

Analytical Ability

Learning

Team Player

Communication Skills

Managerial Effectiveness

Team Building

Decision Making

Business Attitude

Leadership

10

Vision and Strategic Thinking

11

Resource Management and Administrative Ability

12

Interpersonal Skills

13

System Orientation

14

Innovation and Creativity

15

Adaptability

16

Empowering and Motivational Ability

17

Cost Consciousness

18

Quality Consciousness
Total

M
D

M
M

11 (08)

11

11

M Mandatory Competencies, Other shaded boxes Optional Competencies of which 3 need to be selected for assessment

10

Performance Planning
Managerial/Executive Competencies
Reporting officer and executive to choose
three competencies in addition to mandatory
competencies based upon direct and
significant relevance to the executives area
of responsibilities
Mandatory competencies and the basket
available depends on the level of executive

Performance Planning
Core Values

Assessment to be done at the end of the year

Potential Competencies
E1-E5

E6-E7

E7A-E8

E9

Leadership

Leadership

Leadership

Corporate
citizenship

System
Orientation

System
orientation

Networking
and
relationship
management

Networking
and
relationship
management

Resource
Management
and admin
ability

Resource
management
and admin
ability

Coaching and
counseling

Coaching and
counseling

Team Building

Business
Attitude

Vision and
Strategic
Thinking

Change
management

Competencies assessment levels

Needs development ( 1-4);

Meets expectations (5-6);

Moderately above expectations (7-8);

Significantly exceeds expectations
(9-10).

Step #2: Mid-year Review

Why is it critical?
Performance management is not an event
but an ongoing process
Helps in objective annual evaluation
Provides early warnings of nonperformance; avoids year end surprises
Opportunity to revisit KPAs, change
weightages or measures
Reinforces good performance in time
Provides an opportunity for appraisee
to express his thoughts on progress
made and roadblocks encountered

Process Steps
Appraiser and appraisee to discuss
changes in KPAs, if necessary
All KPAs to be re-filled in the form if
any changes are made in either the
KPAs, weightages or targets
Justification for change to be
documented
Self appraisal to be completed
Appraiser to document mid year
discussion

Guidelines for changing KPAs in the mid year

Change in roles and responsibilities of appraisee (transfer, additional role etc.)
Changes in organisational goals
Unanticipated projects
Abandonment of project as per corporate directive
Situations beyond control of the appraisee such as accident or emergency situations

Step #3: Annual Assessment

Why is it critical?
Formal process to ensure performance is assessed annually
Opportunity for reviewing officer to offset rating biases
Provides inputs for other HR systems:
Rewards and Incentives
Career Development
Training and Development
Process Steps for Appraiser and Appraisee
Evaluate performance against KPAs by comparing actual
performance to targets set
Evaluate
Functional/technical competencies (chosen at the
beginning of the year)
Managerial competencies (3 mandatory and 3
optional)
Values & Potential
Complete section on Special Achievements
Transfer scores from all sections to the section on Total
Marks for consolidation
Complete Individual Training and Development Plan

Process Steps for Revng Officer

Review the marks given for each

section by the appraiser check for
overrating or underrating
Hold discussion with appraiser in
case changes in scores are required
Rationale for changes in scores
must be documented on PMS form
Reviewing officer and appraiser
sign-off on the PMS form

Annual Assessment

The reporting officer is to invite the concerned executive to participate in the annual
assessment.

Annual Assessment
During annual assessment marks to be provided
for the following:
KPAs

Functional/Technical competencies
evaluated on 10 point scale)

(to

be

Managerial/Executive competencies (to be

evaluated on 10 point scale)
Values (to be evaluated on 10 point scale)
Potential competencies (to be evaluated on 10
point scale)
Special achievements to be filled

Individual training & development plan also

needs to be filled

Annual Assessment

Step #4: Normalization Process

Objectives of Normalization Process
Ensure parity and integrity by minimizing rater variation across various
departments
Enhance objectivity and transparency in the appraisal system

Final Output
PMS scores
from
Appraiser

Reviewer to
check
integrity

Performance
Management
Committee

Top 30%
Middle 65%
Bottom 05%

Process Steps of Normalization

Plot distribution of scores for the cluster to check for skewing within and across departments
Checks to be made whether employees have been overrated or underrated on various PMS parameters
such as:
KPA assessment
Competencies, Values and Potential assessment
Make suitable adjustments to scores, where necessary,
Scores (revised and unchanged) and reasons for moderation to be documented in PMS form
All appraisees in the cluster must be categorized into Top 20%, Middle 70% and Bottom 10%

Depending upon the grade and location, employees would

be normalized either at the Plant, RHQ or CC
Grade

Posted at

To be normalized at

E1-E4
(to be normalised
together)

Plants, Projects

Plant/ Project

RHQ

RHQ

CC

CC

E5

Plants, Projects

Plant/ project

RHQ

RHQ

CC

CC

Plants, Projects,
RHQ

RHQ

CC

CC

Plants, Projects,
RHQ, CC

CC

E6

E7, E7A, E8 and E9

Normalization
Principles of Normalization
Cluster of different departments have been
created (at various levels) for effective
normalization of performance

Minimum size of 15 executives in a cluster

for performance normalization
The performance scores finalized by the
Performance Management Committee and
the categorization at the end of the
normalization process are final

Example of Cluster

Departments with affinities have been

congregated to form clusters
Depending upon the level, location and the
number of executives in the given level
function, clusters would be either at the
plant, RHQ or CC level
The PACE reports of executives who have
been transferred during the course of an
assessment year shall be normalized at the
place of posting where he/she is working as
on the last day of the relevant assessment
cycle

Linkage of PMS to other HR systems

Outputs of PMS

Top 30%
Middle 65%
Bottom 05%

Linkage with other HR Systems

Rewards System - Differential individual rewards
for each category
Career Development System PMS scores and
relative rankings are one of the key inputs for the
CDS

PMS
Training and Development System Inputs for
Competency
Assessment and
Development
Plans

designing of training programmes

Career Development System Competency
profiles of employees would provide inputs for
job rotation and placement decisions

Step #5: Communication of Score and Developmental

Feedback
Performance Management
Committee Output

Human Resources
Final Score
Relative Ranking (Top
20%; Middle 70%;
Bottom 10%)
Developmental Feedback

Appraiser

Employee

Appraisers to be provided training on

performance feedback and counseling skills

Process Steps
Performance Management
Committee output to be sent to HR
Final individual scores
Relative ranking
Rationale for any changes
made
HR to consolidate final scores,
relative ranking and feedback from
Performance Management
Committee for all employees
HR to send final score sheet with
relative ranking and feedback from
Performance Management
Committee (if any) to respective
appraisers
Appraisers to communicate final
score, relative performance as well
as developmental feedback to
appraisee

Snapshot of the Contents of the PMS Policy

Applicability:
Manual
PMS Policy would be applicable to:
All Executives of NTPC (E1-E9)
Objectives
Executives on deputation joining
NTPC or those retaining lien while
PMS Process
Performance Planning -MYR
Annual Assessment -Normalisation
Feedback, Coaching and Counselling

in service of NTPC
For those joining in the middle of
assessment period with minimum
service of 3 months during the
period

PMS Linkage with Other HR Systems

PMS Form
Performance Planning
Mid-Year Review
Assessment

Normalisation Process, Clusters and Constitution of

Performance Management Committees

PMS calendar for E1 to E5

Process

Activity

Target Dates

Responsibility

Issue of PMS Forms

Ist Dec. 15th Dec.

HR Department

Performance Planning

1st Jan. - 25th Jan

Executive
Reporting officer

Submission to HR

30th Jan.

Reporting officer

Issue of PMS Form for Midyear Review

20th June- 30th

June

HR Department

Mid Year Performance Review

1st 15th July

Executive
Reporting officer

Submission to HR

21st July

Reporting officer

Issue of PMS Form for Annual

Assessment

Ist Dec. 15th Dec.

HR Department

Annual Assessment

15th Dec. 7th

Jan.

Executive
Reporting officer
Reviewing Officer

Submission to HR

12th Jan.

Reviewing officer

Normalisation

Normalisation

15th Jan- 31st Jan.

Performance Management
Committee

Feedback

Performance Communication
and Feedback

15th Feb.

Reporting officer (admin support

from HR)

Performance
Planning

Mid Year
Review

Annual
Assessment

System of Appeal
Incase of grievance on the individual performance
scores finalized by the performance management
committee (PMC), the grievance can be directly put up
to an appellate authority (ies) which is one level above
the PMC with a copy to concerned HR.
Only such cases where change of marks is equal to or
more than 5% of that awarded by the Reporting Officer
shall be eligible for appeal

Review by Head of Deptt.

2nd Review level

Location

Level

Project/
Plants
Project/
Plants
RHQ

E1 E4

Head of the department (PMC Member).

E5

Head of Plant/ Project to review

E1 to E4

Same as in the case of Plant/ Project

RHQ

E5

Regional ED to review

CC

E1 to E4

Head of the department.

CC

E5

Head of the department of minimum E8

level.

All locations

E6

Head of the department of minimum E8

level.

All locations

E7/E7A

ED of Region / Functional ED to review.