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A Industrial training report on

“PERFORMANCE MANAGEMENT SYSTEM “ At

JK Cement WORKS ,Nimbahera (RAJ) For 45 working days during the period from 16.05.2011 to 01.07.2011 Submitted in partial fulfilment of the requirements for Bachelor of Business Administration (BBA)

Guided By: Submitted By- Mr. R P Singh Roshan jain Sr GM HR & RTC BBA(HONS) 5th sem. REGIONAL TRAINING CENTRE (NORTH) DEPARTMENT OF BUSINESS MANAGEMENT JK CEMENT WORKS Dr. H.S GOUR CENTRAL UNIVERSITY NIMBAHERA (RAJ) SAGAR (M.P)

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Undertaking This is hereby stated that this report is very original in every sense of the term

and it carries a sense of creditability and strength and that I have taken no shortcuts and remained both rigorous and scholarly.

I have tried my best to keep this work as watertight and squeaky clean as

possible.

It may be further stated here that in the preparation of this report and projects undertaken some aid has been taken from a pool of professionally shared

knowledge, a detailed description of which has been mentioned in the bibliography section of this report.

Dated………………….. Signature_____________

ROSHAN JAIN BBA 4thsem

Dr.H.S. Gour Central University Sagar (m.p)

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Acknowledgements I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and organizations. I would like to extend my sincere thanks to all of them. I am highly indebted to Mr. R P Singh, Sr. GM –HR & RTC, Mr.Shailendra Sharma (Ast.Manager,RTC) & Mr. N.K Vaishnav (Officer,RTC) for their guidance and constant supervision as well as for providing necessary information regarding the project & also for their support in completing the project. I would like to express my gratitude towards Mr.Pawan Kumar Jain(Brother In Law) & Mrs Vinita Jain(Sister) for their kind co-operation and encouragement which help me in completion of this project. I would like to express my special gratitude and thanks to industry persons for giving me such attention and time. My thanks and appreciations also go to my colleague in developing the project and people who have willingly helped me out with their abilities.

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CONTENTS

Undertaking

Acknowledgement

CHAPTER 1 1. Cement industry……………………………………………………… 5 2. Overview of Jk cement works…………………………………... 7 3. Company profile of Jk cement ltd………………………....... 10 4. Regional Training Centre (North) ………………………. …14 CHAPTER 2 1. Introduction to the topic………………………………………. .18 2. Highlights of the system………………………………………. ..21 CHAPTER 3 1. Conclusion …………………………………………………………..... 27 2. Suggestions…………………………………………………………… 30 3. Bibliography…………………………………………………………..

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CHAPTER 1 INTRODUCTION

1.1 Cement industry

Fast rising Government Expenditure on Infrastructure sector in India has resulted a higher demand of cement in the country. In the same direction, participation of larger companies in the sector has increased. For raising efficiency in the sector, the Planning Commission of India in the 10th plan has formed a 'Working Group on Cement Industry'. With an installed capacity of around 173 million tonnes per annum (mtpa), The Indian cement industry is comprised of 129 large cement plants and 300 mini-cement plants, with installed capacities of 160 mtpa and 13 mtpa respectively. Large cement plants accounted for 93% of the total installed capacity in India. The installed capacity is distributed over across approximately 129 large cement plants owned by around 54 companies. India is the second largest producer of cement in the world. In 2005, India produced 142 mt of cement, accounting for 6.4% of global production of 2.22 billion tonnes. India is the second largest producer-behind China (1,000 mt), but ahead of the US (99 mt) and Japan (66 mt). India's cement industry-both installed capacity and actual production-has grown significantly over the past three decades, with production increasing at an average rate of 8.1% per year between 1981 and 2004-05. In India, about 44% of the cement produced is Ordinary Portland Cement (OPC), 47% is Pozzolana Cement (PPC), 8% is Portland Blast Furnace Slag Cement (PBFS), and the remaining 1% are special cements. The cement industry has witnessed substantial reorganisation of capacities during the last couple of years. Some examples of the consolidation witnessed during the recent past include: Gujarat Ambuja taking a stake of 14% in ACC; Gujarat Ambuja taking over DLF Cements and Modi Cement; India Cement taking over Raasi Cement and Sri Vishnu Cement; Grasim's acquisition of the cement business of L&T; Indian Rayon's cement division merging with Grasim; Grasim taking over Sri Digvijay Cements; L&T taking over Narmada Cements; ACC taking over IDCOL.

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Major Players As discussed, ACC is the largest player with a capacity of 18.64 mtpa at end-March 2006. UltraTech CemCo Ltd. now occupies the second slot with a capacity of 17 mtpa (which includes 1.5 mtpa of subsidiary Narmada Cement). The Gujarat Ambuja group has emerged as the third largest player with a capacity of 14.86 mtpa. Grasim ranks fourth with a capacity of 14.12 mtpa. Other leading players include India Cements, Jaypee group, Century Textiles, Madras Cements, Lafarge, and Birla Corp.

Major cement producing states

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1.2 Overview Of J K Cement Works

History behind J K CEMENT

The initial "J.K." stands for a father- son team, namely

: Juggilal Kamlapath Singhania

§ J .K. organization started in the year 1884 at Calcutta. J .K. started their business as a Financier, Investor, Trading Supplier of cotton belts and manufacturer of small machinery parts like ‘V' belts, etc. They e

§ Established few small cotton textile industries also.

§ In the year 1914 they shifted their business from Calcutta to Kanpur where they established many big industries like J.K. cotton Mills, Straw product Co, Lohia Mach, J.K. Pulp and Raymond’s Woolen, etc.

§ In the year 1934 J.K. organization started one more division, as J.K. Synthetics Ltd. They established various big plants of Nylon, Acrylic fiber, etc. at Kota and Tyre Cord, Chemical and Pesticides at Jhalawar.

§ In the year 1974 under the same division one more unit was started for manufacturing of Grey Cement at Nimbahera.

§ The present cement factory was commissioned in the year 1974. The plant started its production from 27th Dec 1974.

§ Ist plant / kiln was commissioned in 1974 and the capacity of this plant was 900 tonne per day and 3 lakh tonne per year. After modification in Preheater, its present capacity is 1200 TPD.

§ Expansion of this plant took place in the year 1979, when 2nd kiln was commissioned with a capacity of 1200 tonne per day and 7 lakh tonne per year. After modification in Preheater its present capacity is 1800 TPD.

§ Again in the third phase, a kiln was erected in the year 1982 and production of this kiln was 1350 tonne per day.

§ In the year 1988 a new technology was introduced in this 3rd Kiln that consisted of precalcination process, which raised the capacity of this plant to

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3400 tonne per day, which was earlier 1350 tonne per day. In Aug.-2003 after again some modification in Preheater and Folex cooler its capacity is increased to 5000 TPD.

§ Besides, J.K. cement plant is having its own diesel generator sets, producing power to meet the power energy requirements.

§ Main raw material for cement is LIMESTONE, for limestone we have our own open cast mines adjoining to the plant. Besides we have developed few more mines at Maliakhera, Karoonda and Tilakhera for producing 10,000 tonnes limestone per day as needed.

§ J .K. Cement erected one more plant from Jan. 2001 with the capacity of 1400 tonne per day at village Mangrol. In Nov.-2003 after modification in Preheater and installation of Mechanical elevator its capacity increased to 2200 TPD.

§ Due to power shortage as imposed by Ajmer electricity supply board J.K. established its own Thermal Power Plant at village Bamania, near Shambhupura, which is generating 15 M.W. power every day, which is consumed by J.K. Cement Plant.

§ J K Cement also has a plant of 400TPD installed capacity of White Cement at Gotan, Nagour (Raj).

• Cement Plant at Karnataka of over 5500 TPD and Thermal Power Plant of capacity 30 MW.

• Thermal Power Plant at Nimbahera of 22 MW.

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Types of Cement in India The types of cement in India have increased over the years with the advancement in research, development, and technology. The Indian cement industry is witnessing a boom as a result of which the production of different kinds of cement in India has also increased. By a fair estimate, there are around 11 different types of cement that are being produced in India. The production of all these cement varieties is according to the specifications of the BIS. Some of the various types of cement produced in India are:

• Clinker Cement • Ordinary Portland Cement • Portland Blast Furnace Slag Cement • Portland Pozzolana Cement • Rapid Hardening Portland Cement • Oil Well Cement • White Cement • Sulphate Resisting Portland Cement

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1.3 Company Profile - J.K. Cement Ltd. Chairman- Dr. Gaur Hari Singhania

MD & CEO- Mr. Yadupati Singhania

J.K. Cement is an affiliate of the J.K. Organization, which was founded by Lala Kamlapat Singhania. The J.K. Organization is an association of industrial and commercial companies and has operations in a broad number of industries.

Its cement operations commenced commercial production in May 1975 at our first plant at Nimbahera in the state of Rajasthan. The aggregate capacity at Nimbahera is 2.8 million tons as of September 30, 2005. It commissioned a second grey cement plant at our Mangrol plant in 2001. As of September 30, 2005, it had an aggregate production capacity of 3.55 million tons per annum of grey cement. Its white cement plant was completed in 1984 with a capacity of 50,000 tons. Our continuing modifications to the plant have increased its production capacity to 300,000 tons as of September 30, 2005.

J. K. Cement Ltd. is one of the largest cement manufacturers in Northern India. We are also the second largest white cement manufacturer in India by production capacity. While the grey cement is primarily sold in the northern India market, the white cement enjoys demand in the export market including countries like South Africa, Nigeria, Singapore, Bahrain, Bangladesh, Sri Lanka, Kenya, Tanzania, UAE and Nepal.

Management Phylosophy

• Customer Satisfaction • Always invest in Latest Technology • Huge Distribution Network Creation • Expansion through Balancing Equipment • Constant focus on Cost Control & Quality • Invest in Managers & Develop People Skills • Stability of Executive Management & Low Employee turnover Social

Welfare - A Priority

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Strengths • Leading position in attractive Northern India grey cement market • One of the Leading white cement producer in India • Proximity and access to large reserves of high quality limestone • Quality of products and strong brand name • Extensive marketing and distribution network • Experience and technical know-how

Plants It manufacture grey cement in two facilities located at Nimbahera and Mangrol in the state of Rajasthan in Northern India. White cement is produced at our facility at Gotan in the state of Rajasthan.

CLINKER PRODUCTION – Nimbahera and Mangrol Plant

Ist Plant / Kiln 1200 Tonne Per Day

(TPD)

IInd Plant / Kiln 1800 TPD

IIIrd Plant / Kiln 5000 TPD

IVth Plant at Mangrol 2200 TPD

Total Capacity 10200 TPD

PRODUCTION ANALYSIS TABLE: Nimbahera and Mangrol Plant(in tons)

Year Clinker Cement 2005-06 3170268 3511022

2006-07 2907196 3638786

2007-08 2917045 3690726

2008-09 3024091 3646220

2009-10 3096463 3594387

2010-2011 2461905 3280016

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FINANCIAL ANALYSIS: IN Million - J K Cement Ltd.

Year Turnover PBT

2005-06 11087 522

2006-07 15297 2720

2007-08 18128 3466

2008-09 18765 2340

2009-10 22481 3112

2010-11 26520 837

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Production Process

Achievements

• 1944: First in India to produce Aluminium virgin metal from Indian

Bauxite. The company was nationalized in 1973. • 1949 : First in India to manufacture Steel Engineering Files. • 1969 : First to manufacture Acrylic Fibres in India. • 1977 : First to produce steel belted radial treys for passenger car, trucks

and buses in India • 1980 : First in the world to make steel belted radial tyres for 3 wheeler. • 1984 : First to produce white cement in India using dry processed

technology.

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1.4 REGIONAL TRAINING CENTRE- NORTH

Second Decade of Competency Enhancement and Skill Development in Cement Industry The Regional Training Centre - North is a premier training centre of North India

promoted with assistance from World Bank, DANIDA and Govt. of India as a

unique HRD project in Cement Industry. It is equipped with modern training aids

and caters to the skill enhancement and competency developmental needs of

more than 20 cement and other plants. It has trained over 8000 technical and

managerial personnel during the last 14 years. The centre has conducted many

tailor-made in-house programs for cement and other industries:

ABROAD:

• Oman Cement, Oman • Star Cement, Dubai • Hama Cement, Syria / EHDASSE Sanat Corp. Iran. INDIA:

§ J & K Cement, Srinagar § Thermax Ltd., Pune § Jindal Steel & Power Ltd., Raigarh, etc.

RTC has specialized packages / modules in Mining, Process, Maintenance disciplines like Operation & Maintenance of HEMM / Gear-boxes / Pumps / Compressors / Electrical & Electronics Equipments / Energy Conservation / Environment Management and Machinery Alignment, etc. designed and developed by renowned International / National agencies like FLS Denmark, NCCBM, TATA Interactive Systems, VEC, NITTTR, etc. More than 100 senior line mangers from ten plants have been trained at Denmark, NITTTR, Bhopal and Chennai, who act as resource persons for these programs. Besides, OEM’s and management experts of national repute are invited for various technical and

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management programs to make them effective and gainful experience for the participants.

CORPORATE SOCIAL RESPONSIBILITY J K Cement has contributed significantly to the development of various services

in and around its offices and plants. Some of such activities can be enumerated

as under :

Education Schools and University: • Dr Gaur Hari Singhania Institute of Management & Research, Kanpur • Sir Padampat Singhania Technical University at Bhatewar, Udaipur. • J K Institute of Technology – JKIT at Nimbahera • Padam Vidya Vihar – Primary School at Nimbahera • Kailash Vidya Vihar – Sr Secondary School at Nimbahera • Sr Secondary School, Gotan Educational services: Ø Construction of rooms in Govt. College at Nimbahera. Ø Running JK Institute of Technology, ITI in five trades affiliated to NCVT. Ø Running 10+2 CBSE affiliated school

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Ø Running Regional Training Centre for Cement technocrat’s aided by WB & DANIDA.

Ø Various constructions in nearby govt. Schools of Chittorgarh district. Ø We are involved in girls school (under construction) and committed

reasonable financial contribution for above Medical services Ø Rs. 36 lacks contribution for the construction of govt. Hospital at Nimbahera. Ø Ambulance to govt. Hospital. Ø Free facility of pathological laboratory for the persons of surrounding area. Ø Financial contribution to various NGOS for medical camps in the district. Ø Financial contribution for construction of dispensary & health centre in

nearby villages. Ø Free Homeopathic consultancy/medicines for the patients of nearby area. Religious services Ø Radhakrishna temple at colony premises. Ø prayer hall in hanuman temple in Nimbahera. Ø Bheemkeshwar temple in staff colony. Ø Dharmashala at Bhanwarmata (tourist/ religious place). Ø 8 rooms for Dharamshala at Pashupati Nath temple in Mandsaur (M.P.). Ø Various temples in number of nearby villages. Sports services Ø Sports infrastructure like wooden badminton court, table tennis court,

billiard room, and cricket ground, volleyball ground in colony campus. Ø Sponsoring all India youth football, volley ball and badminton tournaments. Ø Sponsoring inter-district tournaments. Ø Arranging summer camps for various sports.

Other social services

Ø Construction of approach roads in and around villages of mining area. Ø Digging of tube wells. Ø Supply of tube well pumps. Ø Construction of water tanks. Ø Supply of drinking water in tankers in nearby needy places during summer.

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Ø Regular plantation in plant, colony and nearby villages. Ø Direct and indirect employment to thousands of persons of surrounding area. Ø Financial helps to NGOS. Ø Financial aid to organize religious festivals by municipal board.

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CHAPTER - 2

2.1 Performance Management System

The “Performance Management System” considers the holistic approach that leads to the performance planning, performance evaluation and performance development .At times, people consider performance management and performance appraisal as one and the same, however, performance appraisal can only be considered as a part of the performance management system.

Performance management is an organization wide program that provides a structured approach to:

• Identify performance standards § Communicate standards § Performance appraisal § Facilitate common understanding of “what” is to be achieved & “how” is

to be achieved § Measure & motivate performance § Provide basis for compensation decisions, promotion decisions,

Training and developmental programs, feed-back & personal development of managers

What Is ‘Performance Management’? It is an organization - wide management program that provides a structured approach to:

• Communicate business strategy • Establish a shared understanding of what is to be achieved and how it is to be achieved • Facilitate management of self and others • Measure and motivate performance (organizational and individual).

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Why Measure Performance?

Because.. • What you cannot measure you cannot improve. • If you cannot improve you cannot grow. • Measurement helps in objectively differentiating between performers and non-performers. • Pay for performance is possible only through metrics.

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A successfully implemented Performance Management System will foster an environment for the organization that encourages employees and managers to effectively learn, solve problems, communicate, and hold each other accountable for success.

Why Measure Values In Action?

Because..

• It is important for an organization of character to have synergy between means and ends. • How much is achieved is as important as how it is achieved! • Values in Action enable mastery of the ‘environment’ which is achieved by carrying out the routine to perfection.

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2.2 Highlights Of The System

• The appraiser and the appraise jointly set the Key Result Areas (KRAs) and assign mutually agreed

weightege expressed as a percentage. The achievement of the KRA is also expressed as percentage.

• Simple mathematical relationship between set weightage and accomplishment gives a final numerical

score on KRAs. • To evaluate all management personnel on company values and leadership

attributes a new section has been added entitled “Values in Action”.

WHAT ARE KRA ---KPA --- KPI.

Key Result Areas [KRA] “Key Result Areas” or KRAs refer to general areas of outcomes or outputs for which the department's role is responsible. A typical role targets three to five KRA. Value of KRAs. Identifying KRAs helps individuals: · Clarify their roles · Align their roles to the organisation’s business or strategic plan · Focus on results rather than activities · Communicate their role’s purposes to others · Set goals and objectives · Prioritize their activities, and therefore improve their time/work management · Make value-added decisions Description of KRAs Key result areas (KRAs) capture about 80% of the department's work role. The remainder of the role is usually devoted to areas of shared responsibility (e.g., helping team members, participating in activities for the good of the organisation).

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KEY PERFORMANCE AREAS.[KPA] When the key results area is large, it is broken into manageable areas for managing/ evaluation. these sub-sections of KRAs are called KPA Example KRA = RECRUITMENT/ SELECTION KPA 1= RECRUITMENT KPA 2 = SELECTION

KEY PERFORMANCE INDICATORS [ KPi] To manage each KRA/ KPAs, a set of KPI are set . KRA and hence KPI is attributed to the department /INDIVIDUAL which can have effect on the business results and is self measured where applicable.

CORE KRAs of HR DEPARTMENT -RECRUITMENT/ SELECTION -WORKFORCE PLANNING/ -DIVERSITY MANAGEMENT -PERFORMANCE MANAGEMENT -REWARD MANAGEMENT -WORKPLACE MANAGEMENT -INDUSTRIAL RELATIONS -SAFETY AND HEALTH WORKPLACE -BUILDING CAPABILITIES AND ORGANIZATION LEARNING -EFFECTIVE HR MANAGEMENT SYSTEMS , SUPPORT AND MONITORING

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To manage each KRA/ KPAs, a set of KPI are set .

KRA and hence KPI is attributed to the department which can have effect on the business results and is self measured where applicable. THE IMPORTANCE AND WEIGHTAGE OF THESE ELEMENTS kras/kpas/ kpis ARE GUIDED BY THE *VISION STATEMENT *MISSION STATEMENT *CORPORATE OBJECTIVES *CORPORATE STRATEGY *CORPORATE BUSINESS UNITS/ DEPARTMENTAL PLANS/STRATEGY. FOR THE BUDGET PERIOD, WHICH IS USUALLY 12 MONTHS.

The evaluation of HR DEPARTMENT can have four levels of perspective. 1. Strategic Perspective — the results of strategic initiatives managed by the HR group. The strategic perspective focuses on the measurement of the effectiveness of major strategy-linked people goals. For instance, the business strategy called for major organizational change programs as the business faced major restructuring and multiple mergers and acquisitions. In this context, the organization’s change management capability will be a key factor in the success or failure of its execution. Therefore, measuring the ability of the business to manage change effectively is the core measure of the effectiveness of HR and will be a key strategic contribution to the future success of the business. EXAMPLES -change management capability of the organization -organization compensation and benefit package with respect market rate. -organization culture survey -HR BUDGET / ACTUAL -HR COSTS BENCHMARK EXTERNALLY -HR annual resource plan. -skills/ competency level etc

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2.Operational Perspective — the operational tasks at which HR must excel. This piece of the Balanced Scorecard provides answers to queries about the effectiveness and efficiency in running HR processes that are vital to the organization. Examples include measuring HR processes in terms of cost, quality and cycle time such as time to fill vacancies. EXAMPLES -time taken to fill vacancies -cost per recruitment promotions -absenteeism by job category -accident costs -accident safety ratings -training cost per employee -training hours per employee -average employee tenure in the company -lost time due to injuries -no. of recruiting advertising programs -no. of employees put through training. -turnover rate -attrition rate etc 3.Financial Perspective — this perspective tries to answer questions relating to the financial measures that demonstrate how people and the HR function add value to the organization. This might include arriving at the value of the human assets and total people expenses for the company. HR EXAMPLES -compensation and benefits per employee -sales per employee -profit per employee -cost of injuries -HR expenses per employee -turnover cost -employee '' workers compensation costs'' etc

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4.Customer Perspective — this focuses on the effectiveness of HR from the internal customer viewpoint. Are the customers of HR satisfied with their service; are service level agreements met; do the customers think they can get better service elsewhere? Conducting an HR customer survey might typically arrive at this. EXAMPLES -employee perception of the HRM -employee perception of the company , as an employer -customer/market perception of the company, as an employer. etc

Examples of KRA KPA & KPI

SUPPOSE THE CORPORATE OBJECTIVE for the organization is -improve the company competitive positioning and productivity by 10%. HR DEPARTMENT OBJECTIVE FOR THE PERIOD IS -IMPROVE THE PRODUCTIVITY 10%. THIS MEANS KRAs, KPAs and KPI [shown in brackets ] for HR. KRA 1 -RECRUITMENT/ SELECTION KPA 1- RECRUITMENT [KPI= average time taken for recruitment per employee = 2 months] KPA 2 -SELECTION [ KPI = average cost per new employee = $ 10,000] ==================================== KRA 2- PERFORMANCE MANAGEMENT KPA 1 - PERFORMANCE APPRAISALS [KPI = all staff to be appraised at least once annually] KPA 2 -SUCCESSION PLANNING [ KPI = 8 POTENTAL staff to be identified and talent managed] =================================================

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KRA 3 - REWARD MANAGEMENT KPA 1- MARKET ORIENTED SALARY STRUCTURING [ KPI = total compensation to sales 12%] KPA 2 -BENEFITS PLANNING [ KPI = 6% of total salary bill] ============================================ KRA 4 - BUILDING CAPABILITIES AND ORGANIZATION LEARNING KPA 1 - TRAINING [ KPI = average training hours per employee annually= 24 hours] KPA 2 - MANAGEMENT DEVELOPMENT [ KPI =average MD cost per employee annually= 16000 DOLLARS] =============================================== KRA 5 - WORKPLACE MANAGEMENT AND RELATIONS KPA 1 -JOB EVALUATIONS [ KPI = 600 lower staff , below grade 4 to be evaluated] KPA 2 - EMPLOYEE COMMUNICATIONS [ KPI = 4 newsletter on intranet, one per quarter ] =========================================== KRA 6 - WORKFORCE PLANNING/ DIVERSITY KPA 1 - ANSENTEEISM [ KPI = absent rate at 5%] KPA 2- TURNOVER [ KPI = turnover rate at 7%] KPA 3- DIVERSITY [ KPI = 3 FEMALES TO BE INDUCTED INTO MANAGEMENT CADRE] =========================================== KRA 7 - SAFETY AND HEALTH WORKPLACE KPA 1 - SAFETY [ KPI = accident safety ratings, benchmark with industry] KPA 2 - HEALTH [KPI = actual health expenditure vs budget ] ============================================ KRA 8 - EFFECTIVE HR MANAGEMENT SYSTEMS , SUPPORT AND MONITORING KPA 1- HRIS [ KPI = finalize the software . $ 0.5 million capital budget] =======================================================

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Conclusion According to “MAOTSE TUNG” – “it is well known when you do any thing ,unless you understand its theory, its circumstances , its nature and its relation to other things, you will not know the laws of governing it or know how to do it; you will not know when or where to put it into practise or be able to do it well”

I learnt a lot during the period of my of my practical training at JK cement works niba hera rajisthan,infact this traning provide me with an opportunity to practically observe the things that I studied earlier in college and going to study.

I concluded the following benefits from a effective performance management system-

Direct financial gain

§ Grow sales § Reduce costs in the organization § Stop project overruns § Aligns the organization directly behind the CEO's goals § Decreases the time it takes to create strategic or operational changes by

communicating the changes through a new set of goals Motivated workforce

§ Optimizes incentive plans to specific goals for over achievement, not just business as usual

§ Improves employee engagement because everyone understands how they are directly contributing to the organisations high level goals

§ Create transparency in achievement of goals § High confidence in bonus payment process § Professional development programs are better aligned directly to achieving

business level goals Improved management control

§ Flexible, responsive to management needs § Displays data relationships § Helps audit / comply with legislative requirements § Simplifies communication of strategic goals scenario planning

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§ Provides well documented and communicated process documentation

Some other advantages which I came to find out were:-

1. Performance based conversations

§ Managers get busy with day-to-day responsibilities and often neglect the

necessary interactions with staff that provide the opportunity to coach and

offer performance feedback. A performance management process forces

managers to discuss performance issues. It is this consistent coaching that

affects changed behaviours.

2. Targeted Staff Development

§ If done well, a good performance management system can be a positive way

to identify developmental opportunities and can be an important part of a

succession planning process.

3. Encouragement to staff

§ Performance Appraisals should be a celebration of all the wonderful things

an employee does over the course of a year and should be an

encouragement to staff. There should be no surprises if issues are addressed

as they arise and not held until the annual review.

4. Rewards staff for a job well done

§ If pay increases and/or bonuses are tied to the PA, process staff can see a

direct correlation between performance and financial rewards.

5. Underperformers identified and eliminated

§ As hard as we try, it is inevitable that some employees just won’t “cut the

mustard” as they say. An effective PA process can help identify and

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document underperformers, allowing for a smooth transition if the

relationship needs to be terminated.

6. Documented history of employee performance

§ It is very important that all organizations keep a performance record on all

employees. This is a document that should be kept in the employee’s HR file.

7. Allows for employee growth

§ Motivated employees value structure, development and a plan for growth.

An effective performance management system can help an employee reach

their full potential and this is positive for both the employee and manager. A

good manager takes pride in watching an employee grow and develop

professionally.

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SUGGESTIONS

• Organizations should take a global look at their performance management

system and have very objective goals that are tied to strategic initiatives

and the performance management process.

• Successful organizations have learned the secret to this and while not

always perfect, a constant striving to improve the process can help have

the organizations reach their Vision.

• Performance management system should be a integrated part of an

organization , all the employees should have the knowledge of

performance management system by default.

• Performance management system could be very costly process so it

should be thoroughly analyzed for feasibility.

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BIBLIOGRAPHY

BOOKS

Performance Management By Robert Bacal Performance Management And Appraisal Systems By T. Venkateswara Rao Janus Performance Management System By Jon Warner WEBSITES www.jkcement.com http://en.allexperts.com http://en.wikipedia.org