RESEARCH TOPIC EFFECTIVENESS OF EPMS IN RDCIS(SAIL)

Submitted to: DR. SHRADDHA SHIVANI

DEPARTMSENT OF MANAGEMENT BIRLA INSTITUTE OF TECHNOLOGY,MESRA

SUBMITTED BY

1. ASHISH SINGHANIA 2. DEEPIKA GHOSH 3. HRISHIKESH KUMAR 4. NUSRAT KALAM 5. OROOJ FATIMA 6. RAVI BHUSHAN KUMAR 7. SANTOSH KUMAR 8. SAMIR KUMAR 9. SWATI

MBA/1069/2010 MBA/1094/2010 MBA /1065/2010 MBA/1067/2010 MBA/1097/2010 MBA/1078/2010 MBA/1095/2010 MBA/1070/2010 MBA/1100/2010

ACKNOWLEDGEMENT

We consider ourselves fortunate to receive the encouragement & patronization of all those who helped us in the completion of this project. It is properly guided effort that leads to the goal. We are very grateful and thankful to our project guide, Mrs. Shraddha Shivani, for her valuable guidance. Without her efforts, this project wouldnt have been up to mark. We are thankful to Mr. V.K SINHA, Deputy General Manager, RDCIS(SAIL) Ranchi, and Mr. S.B SAHAY to take the initiative to provide us with all the necessary information and help whenever required. We would like to express our sincerest gratitude to all the respondents of this study who painstakingly filled up the long questionnaire response sheet. Further, a project of this nature calls for cerebral nutriment, professional guidance & encouragement from every corner. To put it together we are highly indebted towards all other faculties whose cooperation has made the project successful.

Thanking you, The Research Team

ABBREVIATIONS

EPMS PMS KPA GACW PMC SAIL

EXECUTIVE PERFORMANCE MANAGEMENT SYSTEM PERFORMANCE MANAGEMENT SYSTEM KEY PERFORMANCE AREA GOAL ALIGNMENT CASCADE WORKSHOP PERFORMANCE MANAGEMENT COMMITTEE STEEL AUTHORITY OF INDIA LIMITED

INDEX

SERIAL NO. 1. 1.1 1.2 2. 3. 4. 5. 5.1 5.2 5.3 6 6.1 6.2 6.3 6.4 6.5 7. 8.

9. 10. 11. 13. 23. 24.

TOPIC INTRODUCTION ABOUT THE PROJECT ABOUT SAIL(RDCIS) LITERATURE NEED OF THE STUDY RESEARCH OBJECTIVES RESEARCH METHODOLOGY HYPOTHESIS RESEARCH PROBLEM MANAGEMENT PROBLEM SAMPLING PLAN SAMPLE UNIVERSE SAMPLING UNITS SAMPLING SIZE SAMPLE METHOD RESEARCH STUDY METHODS OF DATA COLLECTION GRAPHS(DATA ANALYSIS AND INTERPRETATION) CONCLUSION FINDINGS LIMITATION OF THE STUDY SUGESSTIONS QUESTIONNAIRE BIBLIOGRAPHY

PAGE NO. 7 8 10 13 15 17 19 20 21 22 23 24 24 24 24 24 25 27

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STUDY ON THE EFFECTIVENESS OF EXECUTIVE PERFORMANCE MANAGEMENT (EPMS) IN RDCIS(SAIL),RANCHI

1.INTRODUCTION

1.1 ABOUT THE PROJECT

STEEL AUTHORITY OF INDIA TRANSPARENT SYSTEM EPMS.

SAILING

ALONG

WITH

The new EPMS was designed after taking into account inputs from several other reviews conducted previously, interactions with involved parties, and by studying best practices. At SAIL, the main objective behind the performance management system (PMS) is to make the process as transparent for the employees as possible. Many executives had raised concerns about the need to change the appraisal system which had been in effect since 1985-86. Therefore, in 2007, the new Executive Performance Management System (EPMS) was designed after taking into account inputs from several other reviews conducted previously, interactions with involved parties (that is, executives, associations, plant/unit level employees, and top management), and by studying the best practices of other global organisations. The aim was to ensure that the EPMS addressed the needs of the company with regard to building a leadership pipeline for the future. The need for this change arose from the fact that most public sector organisations earlier had systems that were very reserved and secretive, and the lack of transparency was a point of dissatisfaction. SAIL has, therefore, made its entire system online and this system has been customised in-house according to the companys specific requirements. The online PMS is conducted through Goal Alignment Cascade Workshops (GACW) which includes the setting up of departmental goals, thereby finalising on individual KPAs. This is basically done at the level of the MD, by the signing of the required memorandum between the Government and the MD/Chairman. From there, it moves down to the level of the individuals, wherein the MD conducts the GACW.
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In this way, the different KPAs of routine, non-routine and special projects are accordingly framed. These KPAs are quantifiable and weighted, with clear evaluation criteria. There is always a direct correlation between assessment and the KPAs. The appraisal system at SAIL mainly consists of the evaluation of competencies, potential and values. There are 2 separate grading; one on performance factors, and the other for competencies, potential and values.

The system is quite transparent in the sense that the individuals know where they stand in the performance index through the communication of the final grading to them. A 24/7 performance diary is available to all executives for helping them keep track of their performance levels and assessments. The Performance Management Committee (PMC) consists of the HODs, reporting officers and the reviewing officers, who assess performance independently. The reporting officers are the ones who take up ownership of employees performance and decide the grading for them. SAIL have dispensed with the system of forced distribution of grades,that is, providing for fixed percentages at various rating levels. Apart from the regular performance assessment, an assessment of assessors is also carried out. This is done in order to provide inputs to the PMC to ensure that the reporting as well as reviewing officers have done their jobs properly and efficiently. They have also integrated training needs with the PMS and are currently in the process of linking pay with performance. PMS is a very useful and mandatory tool in a companys success. PMS provides inputs and answers for various operational aspects linked to career plans, assessment planning, promotion decisions, and most other HR systems.

1.2 ABOUT SAIL (RDCIS) STEEL AUTHORITY OF INDIA LIMITED (SAIL) FORMATION The committee of public undertaking of the fifth lok sabha was the first parliamentary committee to undertake a significant review of the question of setting up a holding company for steel. It was first considered in the department of steel in 1971 with the following two objectives: Rapid growth of the industrial sector, of the economy, of the state as a committee of public undertaking of the fifth lok sabha was the first parliamentary committee to undertake a significant review of the question of setting up a holding company for steel. Rapid growth of the industrial sector, of the economy, of the state as a leading agent of the growth process. Ability of the Government to divert investment into areas which are strategic from the point of view of future development. In this context, it was recognized that the public sector had to be made more efficient in order that it might be able to contribute far More than it had to the common pool of investible surplus in the Economy. Further, such are holding company could perform a Number of the important functions like programmes, introduction of necessary technological changes, setting up of an R&D Organization and training of managerial personnel for the public Sector as a whole. Based on the above considerations, the proposal to set up a holding company for steel and associated input industries were approved by the Government in January 1972 . According, the formation of steel Authority of India Limited was approved by the Government in December, 1972 .The Company was incorporated on January 24, 1973 with an authorized capital of Rs.2, 000 corers. In 1978 SAIL was restructured as an operating company. PRESENT STATUS OF SAIL Steel Authority of India Limited (SAIL) through its five integrated steel plant at Bhilai, Bokaro, Durgapur, and Rourkela accounts for major steel production capacity of India. Three special steel plants at Bhadravati, Durgapur, and Salem produce a wide range of special steel, special alloy steel and stainless steel MEL, Chandrapur; a subsidiary company is one of the largest producers of bulk Ferro Alloy in the country. There is a proposal to merge it with SAIL. Today, SAIL is one of the largest corporate entities. Its innate strength lies in its technologists and professionals and a trained manpower of over 1.34 Lakh
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including subsidiary .It had a sales turnover of over Rs. 45,555 corers during 200708. MAJOR UNITS INTEGRATED STEEL PLANT Bhili Steel Plant (BSP) in Chhattisgarh Durgapur Steel Plant (DSP) in West Bengal Rourkela Steel Plant (RSP) in Orissa Bokaro Steel Plant (BSL) in Jharkhand IISCO Steel Plant (ISP) in West Bengal SPECIAL STEEL PLANT Alloy Steels Plant (ASP) in West Bengal Salem Steel Plant (SSP) in Tamil Nadu Visvesvaraya Iron and Steel Plant {VISL} in Karnataka SUBSIDIARY Maharashtra Elektrosmelt Limited {MEL} in Maharashtra Raw Materials Division Central Coal Supply Organization {CCSO} Central Marketing Organization {CMO}

R&D CENTRE FOR IRON AND STEEL

The Research & Development Centre for Iron & Steel (RDCIS) at Ranchi is the corporate R&D unit of SAIL. Set up in 1972, the Centre has ISO: 9001 certification to its credit. It undertakes R&D projects in diverse realms of Iron & Steel Technology under the categories of Plant Performance Improvement (PPI), Product Development (PD), Scientific Investigation and Development (SID), Basic Research (BR) and Technical Services (TS). RDCIS has more than 300 dedicated and competent scientists and engineers and its laboratory is equipped with around 300 sophisticated diagnostic research equipment and 5 pilot plant facilities. RDCIS provides customers with prompt, innovative and cost-effective R&D solutions; develop and commercialize improved processes and products;
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continually enhance the capability of its human resources to emerge as a centre of excellence. The major efforts are directed towards cost reduction, quality improvement and value-addition to products of SAIL plants and providing application engineering support to SAILs products at customers end. RDCIS, along with steel plants, takes initiatives to develop special steel products utilizing the modernized production facilities at steel plants. RDCIS also offers technological services to various organizations in the form of Know-how transfer of technologies developed by RDCIS; Consultancy services; Specialized testing services; Contract research; Technology Awareness Programmes.

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2. LITERATURE SURVEY

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LITERATURE REVIEW OF PERFORMANCE MANAGEMENT SYSTEM AT SAIL

During the literature review, we have gone through the findings in the field of Performance Management System. Confining the findings further to SAIL we have come across the following: SAIL has improved the Performance Management System (PMS) by upgrading the software to PRIMAVERA, an Oracle product for project management. The software has an integrated application for Executive Performance Management System (EMPS). The introduction of PRIMAVERA is mentioned in the Annual report March 2009-10. Research and Development Centre for Iron and Steel (RDCIS) is a corporate R&D unit of SAIL. RDCIS provides a conducive environment for smooth functioning of SAIL. The technological changes in the field of PMS were under the guidance of RDCIS. The change in the appraisal system at SAIL has impacted following attributes in certain manner. The attributes are: 1. Profitability 2. Retention rate 3. Work life of employee 4. Job satisfaction 5. Absenteeism

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3. NEED OF STUDY

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NEED OF STUDY-

Appraisal is the evaluation of worth, quality or merit. In the organizational context performance appraisal is a systematic evaluation of personnel by superiors or others familiar with their performance so as to rank as better or worse in comparison to others. In this study we have studied effectiveness of Executive Performance Management System in RDCIS (SAIL).

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4.RESEARCH OBJECTIVES

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OBJECTIVES OF THE RESEARCH

1. To study the effectiveness of Executive Performance Management System at RDCIS(SAIL), Ranchi. 2. To find the flaws and suggest measures to improve the working of EPMS.

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5.RESEARCH METHODOLOGY

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5.1.HYPOTHESIS

1.Executives faced difficulties like technical glitches , lack of understanding while shifting from Executive Performance Appraisal (EPAS) to Executive Performance Management System(EPMS). 2.Level of fairness is more in EPMS as compared to EPAS. 3.EPMS is better in measuring employees efficiency in terms of clarity of tasks and targets, low biasness etc. and help them in long run. 4. EPMS is less time consuming and less costly and helps in advanced planning and improvement.

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5.2.RESEARCH PROBLEM

To study the effectiveness of online performance appraisal system i.e. Executive Performance Management System (EPMS) to increase the efficiency of the organisation (RDCIS,SAIL).

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5.3 MANAGEMENT PROBLEM

Orthodox method of evaluating personnel which is done manually is lengthy, time consuming as well as a costly process and at the same time it is not very efficient.

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6.SAMPLING PLAN

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6.1. SAMPLE UNIVERSE The total number of executives in RDCIS,Ranchi was 450 and it constituted our universe. 6.2.SAMPLE UNITS We carried out survey at the MTI(Management Training Institute), CET(Centre for Engineering and Technology), HRD(Human Resource Management) and R&D(Research and Develop) of RDCIS(SAIL),Ranchi.Our main focus was HRD department which was basically concerned with the implementation of EPMS. 6.3. SAMPLING SIZE Our sample size was 45. 6.4 SAMPLE METHOD Our sampling method was simple random sampling. 6.5 RESEARCH STUDY Our research study is descriptive and conclusive.

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7.DATA COLLECTION

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METHODS OF DATA COLLECTION

Method of primary data collection: 1.Questionaire method 2.Interview method

Method of secondary data collection: Data collected from the SAIL website and SAIL annual report.

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8.GRAPHS(DATA ANALYSIS AND INTERPRETATION)

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8.1 :Table showing the awareness about EPMS Basis Aware and experienced Aware but not experienced Not aware No. of respondent 45 0 0 % age 100% 0% 0%

Awareness

Aware and experienced Aware but not experienced Not aware

Comment: 100% Executive are aware about EPMS.

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8.2: Table showing if executives faced any kind of difficulty while shifting from traditional to online method of appraisal

Basis YES NO

No. Of Respondent 28 17

%age 62.2% 37.8%

Shifting from traditional to online

YES NO

Comment: Most of the executives faced difficulty while shifting from traditional to online method.

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8.3: Table showing the type of difficulties faced by executives

Basis Technical Lack of understanding Others

No. of respondent 24 16 5

%age 53.3% 35.6% 11.11%

Difficulties faced

Technical Lack of understanding Others

Comment: While implementing the EPMS, most of the executives faced technical difficulty followed by lack of understanding then other difficulties.

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8.4: Table showing whether online appraisal is a better way of measuring in executives efficiency

Basis YES NO

No. of Respondent 39 6

%age 86.7% 13.3%

Executive efficiency

YES NO

Comment: Majority of the Executives say that online appraisal is better in measuring employees efficiency.

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8.5: Table showing satisfaction of executive with the level of fairness in the new system BASIS Yes No NO. of respondent 40 5 % age 88.9% 11.1%

Level of fairness

Yes No

Comment: Most of the executives are satisfied with the level of fairness.

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8.6:Table showing whether online appraisal is a better way of measuring in executives efficiency

Basis YES NO

No. of Respondent 45 0

%age 100% 0%

No.of Respondent

YES NO

Comment: Thus online appraisal is better in measuring employees efficiency.

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8.7 Table showing ranking of attributes

Attributes

Rank 1

Rank 2 12 10 14 12 12

Rank 3 10 12 10 9 15

Rank 4 5 7 7 8 3

Rank 5 3 5 5 6 4

Clarity of 15 task&target Performance 11 Low biasness Improve quality Reduce job stress 12 10 11

Weightage Attributes

5 Rank 1

4 RANK 2 48 40 56 48 48

3 Rank 3 30 36 30 27 45

2 Rank 4 10 14 14 16 6

1 Rank 5 3 5 2 6 4

Clarity of 75 task&target Performance 55 Low biasness Improve quality Reduce job stress 60 50 55

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Attributes Clarity of task & target Low biasness Reduce job stress Performance Improve quality Total

Weightage 166 162 158 150 147 783

Attributes

clarity of task & target low biasness reduce job stress performance improve quality

Comment: All the above attributes help in the organisation and all of them are very closely related to each other. When there will be clarity of task & target it will lead to low biasness in the organisation which will reduce job stress and help in performance improvement and finally improve quality.

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8.8: Table showing satisfaction of executives with the performance linked incentives of the new system

Basis Yes No

No. of respondent 29 16

%age 64.4% 35.6%

Satisfaction level

YES NO

Comment: Most of the executives are satisfied with the performance linked incentives of the new system.

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8.9:Table showing whether EPMS is going to benefit the employee in the long run

Basis YES NO

No. of respondent 38 7

%age 84.4% 15.6%

Benefit the Employee in long Run

YES NO 3rd Qtr

Comment: Majority of executives are of the view that it is going to help the employee in the long run.

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8.10: Table showing whether EPMS has simplified the task of appraisal

Basis YES NO

No. of respondent 33 12

%age 73.3% 26.7%

Simplified task

YES NO 3rd Qtr

Comment: Majority of executives agree that EPMS has simplified the task of appraisal.

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8.11:Table showing whether EPMS is less time consuming & less costly process

Basis YES NO

No. of respondent 43 2

%age 95.5% 4.5%

Less time consuming & less costly

YES NO

Comment: EPMS is less time consuming & less costly process

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8.12: Table showing whether EPMS is helpful in advance planning & improvement of work

Basis YES NO

No. of respondent 40 5

%age 88.8% 11.2%

Advance planning & improvement of work

YES NO

Comment: Majority of executives consider EPMS as helpful in advance planning & improvement of work.

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9.CONCLUSION

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CONCLUSION

EPMS is a effective tool of performance appraisal. It is less time consuming. With help of this, employees know what he needs to do to improve the performance as well as strength of them. Mostly executive is satisfied with this new system of performance appraisal. All executive is well experienced about this system and they think it is better than previous ones. But it needs some kind of changes so that better result can be achieved.

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10.FINDINGS

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Our Findings 1. 100% Executive are aware about EPMS 2. While implementing the EPMS,most of the executives faced technical 3. 4. 5. 6. 7. 8.
difficulty followed by lack of understanding then other difficulties. Majority of the Executives say that online appraisal is better in measuring employees efficiency. Majority of executives consider EPMS as helpful in advance planning & improvement of work. EPMS is less time consuming & less costly process Most of the executives are satisfied with the performance linked incentives of the new system. Most of the executives are satisfied with the performance linked incentives of the new system Most of the executives are satisfied with the level of fairness.

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11.LIMITATIONS

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Limitations 1. Our Study premises is confined to RDCIS, Ranchi. 2. There was the lack of proper knowledge about EPMS system among the employee. 3. Many employees dont know how to use the on-line system so thats why they are facing difficulty to fill the KPA.

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12.SUGGESTIONS

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Suggestions 1. Performance appraisal should be performed more frequently. 2. More customized format should be used for performance appraisal in each wings of RDCIS(SAIL). 3. The proper training should be provided to the employees about new EPMS system to fill the on- line appraisal.

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13.QUESTIONNAIRE

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QUESTIONNAIRE

Q1. Name: ............................................................................................................... Q2. Wings of SAIL : a. MTI b. CET c. HRD d. R&D Q3. Grade: E1 E2 E3 E4 E5 E6 E7 E8 E9

Q4. Are you aware about the implementation of the EPMS (Executive Performance Management System)? Aware and experienced If you are aware and experienced then Q5. Did you face any kind of difficulty while shifting from traditional to online method of appraisal? Yes No Aware but not experienced Not aware

Q6. If yes then what were the difficulties you faced? Technical Lack of understanding Others (specify) Q7. In your view which system of appraisal is better? EPMS (Executive Performance Management System) EPAS (Executive Performance Appraisal System) Q8(a). Are you satisfied with the level of fairness in the new system? Yes Q8(b). If no then why? No

Q9(a). Do you think that the online appraisal is better in measuring employees appraisal efficiency? Yes No

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Q9(b). If yes then what are the attributes through which its going to help the organisation? Rank according to your preference.(Rank 1 to 5) Clarity of tasks and targets Performance improvement, Organisation development and culture change Low biasness Improve quality, efficiency and effectiveness Reduce job stress, wastage of resources and conflict Q9 (c). If no then why ?

Q10(a). Are you satisfied with the performance linked incentives of the new system? Yes Q10(b). If no then why ? No

Q11(a).Do you think that its going to benefit the employees in the long run? Yes Q11(b). If no then why? No

Q12.Do you think that its really good method which has simplified your task of appraisal? Yes No

Q13.Do you agree that the new system is less time-consuming and less costly process? Yes No

Q14.Do you think EPMS helps in advanced planning of work and is focussed towards the improvement of work? Yes Q15. Any suggestions regarding EPMS. .......................................................................................................................................................................... .......................................................................................................................................................................... .................................................................................................................................................. No

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14.BIBLIOGRAPHY

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BIBLIOGRAPHY Books 1) Research Methodology- C.R. Kothari 2) Human Resource Management- V.S.P. Rao Websites 1) www.sail.co.in 2)www.actionaid.org

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