THDC India Ltd.—Performance Management System

Abstract

The case is based on the current performance management system (PMS) followed by THDC India Ltd. (THDCIL). It intends to provide inputs about the importance of sound and objective performance management as a key HR subsystem that helps in planning, measuring and integrating performance, contributing towards organizational and business objectives, and developing a collaborative organizational culture. The case portrays an incident of performance review grievance between a superior (Mr Ajay Kumar) and a subordinate (Mr Prashant Kumar) and shows an organization’s struggle to handle an inefficient performance planning claim by a subordinate. Despite creating a clear mandate and SMART (specific, measurable, attainable, realistic and timely) PMS goals, the HR team and employees are continuously showing resistance to discuss and develop SMART KRAs and KPIs collaboratively. It further talks about the issues in the performance planning process regarding goal setting, providing regular feedback and managing performance effectively while actively engaging employees. It also states how an incident about the unsatisfactory appraisal rating of Mr Prashant Kumar led to organizational chaos and employee dissatisfaction. It further provides insights into managing an aggrieved manager using performance review discussion and coaching. It also intends to give students an insight into the different steps in designing and modifying performance management to suit business requirements.

The case may help students appreciate the different roles played by HR, such as employee champion, administrative expert, strategic partner and change agent for aligning and achieving individual, team and organizational goals and objectives. They would also gain knowledge and skills to understand the role of HR in designing, executing and managing the PMS by analysing a real-life situation.

Keywords

Evaluation and assessment organizational performance management performance appraisal performance management

Discussion Questions

Does the performance management system (PMS) lack active employee involvement at THDCIL? Support your views with evidence from the case.

If you were in Mr Ajay Kumar’s place, how would you conduct a performance review discussion for Mr Prashant Kumar?

Suppose you were in place of Ms Supriya Shule (Sr. Manager-HR); how will you design KRA/KPI for the selected role (Mr Prashant Kumar)? Comment/suggest changes for revising the KRA format for the selected role.

What are the challenges and biases of PMS at THDCIL?

Considering the current PMS process at THDCIL, would you like to suggest any other appraisal method for better results?

Further Discussion Question

Define the steps followed by THDCIL during the PMS process.

Introduction

Prashant Kumar (Senior Manager—Project), who joined the organization 8 years ago and was working in one of the project locations of THDC India Ltd. (THDCIL), waited outside Mr Ajay Kumar’s office, his reporting manager, on 10 April 2020. One of his colleagues informed him that Mr Ajay Kumar (General Manager (GM)—Projects) was in Rishikesh and had been called to the head office for a meeting.¹ Disappointed, he returned to his workstation and sat beside his senior colleague Pradipta Das, who had been working with the organization for the past 9 years and was expecting a promotion that year. Pradipta asked him, ‘Where have you been?’ Prashant replied, ‘Trying to get hold of Mr Ajay Kumar, he is so busy transiting between the project and the head office. I need to discuss the KRAs with him. It’s already due’. Pradipta said, ‘Don’t worry; he will be busy for the coming few weeks. You just fill out the sheet like you did last year, and he will take care of it. After all, everyone knows what we do here’. Prashant was confused as he was dissatisfied with the rating given by his boss as ‘below average’ despite achieving agreed KRAs. Mr Prashant Kumar used to share a good relationship with his boss Mr Ajay Kumar. However, in the previous year during a meeting, both exchanged some heated words over a certain official issue, and Mr Ajay Kumar rebuked him publicly, owing to which Mr Prashant Kumar showed his displeasure. Anxious Mr Prashant approached Mr Ashish, GM-HR, to discuss his concerns about the performance rating given by his boss (Mr Ajay) last year and showed his anguish in the email sent to him (Appendix 1).

Mr Ashish was sitting in his office and re-reading the mail sent by Mr Prashant. While going through this email, he was also thinking about his upcoming department meeting, where he was asked to critically review the PMS system and make a presentation to Mr Bala S., Director-HR, in the following month. He was a little concerned as the organization was undergoing business and structural changes due to the merger with National Thermal Power Corporation (NTPC) Ltd. (one of the ‘Navratnas’ in Indian public sector undertakings), which happened on 01 March 2020. He was apprehensive about whether the reporting officers would follow all the PMS guidelines to the letter and in spirit. Mr Ashish, as the GM-HR, also felt quite concerned about aligning the PMS with business goals to enhance employee motivation and engagement at the workplace. He understood that PMS was the key to active employee engagement. He was also thinking about different actions required to make the PMS more transparent, objective and robust.

The Company—HDCIL

THDC India Limited (THDCIL), a joint venture (JV) of the Government of India and the Government of Uttar Pradesh (GoUP), was a public sector enterprise under the administrative control of the Ministry of Power (MoP), Government of India (GoI) and registered as a public limited company in July 1988 under the Companies Act, 1956. The company’s equity was shared between GoI and GoUP at the ratio of 75:25. THDCIL was conferred ‘Mini Ratna–Category-I Status’ in October 2009 and up-graded to Schedule ‘A’ PSU in July 2010 by the Government of India. THDCIL was constituted with the sole objective to develop, operate and maintain the 2,400 MW Tehri Hydro Power Complex and other hydro projects. The 2,400 MW Tehri Hydro Power Complex comprised (a) Tehri Dam and HPP (1,000 MW), (b) Koteshwar HEP (400 MW) and (c) Tehri PSP (1,000 MW). The Memorandum and Articles of Association of the Company were modified on 31 August 2010, to reflect the business reality of projects outside the Bhagirathi valley. The object clause of the company was amended to incorporate the development of conventional/non-conventional/renewable sources of energy and river valley projects.

THDCIL had a portfolio of 13 projects (hydro, thermal, wind and solar), totalling an installed capacity of 5,539 MW, which included 1,513 MW already operational and the remaining under various stages of development/implementation. In addition, a number of projects in the country were in the business development stage. The corporation grew into a multi-project organization, with projects spread over various states and neighbouring Bhutan. THDCIL commissioned the 1,000 MW Tehri HPP in 2006–2007. The Tehri HPP (1,000 MW) was a multipurpose project, providing electricity to the northern region, irrigation benefits to Uttar Pradesh and drinking water to the NCT of Delhi and Uttar Pradesh. Due to regulated releases from the Tehri storage reservoir, the existing downstream hydro projects of the state also benefited by way of augmentation in generation at no additional cost to them.

THDCIL was also implementing a 444 MW Vishnugad Pipalkoti Hydro Electric Project (VPHEP) in the river Alaknanda in Uttarakhand, which was scheduled to be commissioned in December 2022. In addition, various hydro projects of THDCIL were under survey and investigation/DPR preparation stage. The Government of UP allotted Khurja Super Thermal Power Project (2 × 660 MW) in the district of Bulandshahar to THDCIL for implementation. The Government of India accorded investment approval for Khurja STPP for ₹110,844.2 million and Amelia Coal Mine for ₹15,871.6 million on 07 March 2019. The Honourable Prime Minister also laid the project’s foundation stone on 09 March 2019. With the award of major packages, the construction work at the site was underway.

Towards diversification of the company into renewable energy areas, THDCIL commissioned 50 MW wind power plant in Patan, Gujarat district, on 16 June and a 63 MW wind power plant at Devbhumi Dwarka, Gujarat, on 17 March. THDCIL and Solar Energy Corporation of India (SECI) signed an MOU in 2015 to set up 250 MW solar PV projects in India. A tripartite agreement among SECI, Kerala State Electricity Board (KSEB) and THDCIL was also signed in 2015 to develop a 50 MW solar project in the district of Kasargod, Kerala. The power sale agreement was signed between KSEB and THDCIL in 2019. The Land Use Agreement and Implementation Agreement were signed between THDCIL and RPCKL on 07 February 2019. The work of a 50 MW (AC) solar PV power plant in the Kasargod, Kerala district was awarded to M/s Tata Power Solar System Limited on 08 August 2019. The project was scheduled to be commissioned by May 2020. The Ministry of New and Renewable Energy also allotted THDCIL to develop 1,800 MW ultra mega renewable energy power parks through SPV/JVC in Uttar Pradesh and 1,500 MW in Rajasthan. THDCIL was in the process of formation of SPV/JVC with the agencies of the respective state governments and identification of suitable land.

The Government of Maharashtra entrusted the pumped storage scheme (PSS), namely, Malshej Ghat (700 MW), to the joint venture of THDCIL and NPCIL to update DPR and subsequent implementation, if found viable. The DPR for Malshej Ghat had already been submitted. The Implementation Agreement was to be signed with the Government of Maharashtra, for which consent of GoMH was awaited.

Under India–Bhutan cooperation in hydro sector development, MoP allotted two projects: Sankosh Storage Project (2,560 MW) for updating the DPR and Bunakha HEP (180 MW) in Bhutan for updating the DPR and subsequent implementation of inter-governmental authority model/JV with Bhutanese PSUs. THDCIL updated the DPR of Sankosh HEP (2,585 MW) and Bunakha HEP (180 MW) in Bhutan. Modalities for the execution of Sankosh HEP and Bunakha HEP were being worked out. Furthermore, THDCIL also diversified to provide specialized consultancy services in the power sector.

Evolution of Performance Management System at THDCIL

Until 2007, the organization used to follow an annual confidential report (ACR) method for performance appraisal, which was a closed system, and it only appraised the performance and did not manage it, as the system was based on the evaluation of personality traits and other subjective achievements and lacked the process of feedback at the end and hence was not a very effective appraisal tool. The Department of Public Sector Enterprises (DPE), while approving the pay scale of executives effective from 01 January 2007, introduced the concept of performance related pay (PRP) based on physical and financial performance. Simultaneously, the PSUs were directed to develop robust and transparent PMSs. The organization clearly understood the importance of performance management, and the corporation introduced the PMS with this aim. A mandate was given to the human resources (HR) team to create a new and robust PMS. Accordingly, certain changes were brought about, and the decision was taken that the key result areas (KRAs) would be quantified in measurable terms. The organization designed a new PMS and formulated KRAs and Key Performance Indicators (KPIs), which were planned and decided in advance through mutual consultation at the beginning of the annual appraisal cycle. While measuring the employee’s performance, KRAs/KPIs supported in identifying the job gaps, which also helped the HR team perform functions such as coaching, training and even succession planning. Pursuant to DPE guidelines, a forced ranking method in the name of a bell curve was introduced where the employees were rated as outstanding/excellent (up to 15%), very good (45%), good (30%), average (5%) and not satisfactory (5%) in assigned percentages, which were modified to the extent that the cap of 15% was applicable for only 15% outstanding performers.

Performance Management System at THDCIL

The existing system of PMS was well-designed and well-documented. Each employee had been trained at least once in the past 3 years about the different steps of PMS, its formats, rules and guidelines. The Director of HR, Mr Bala S. believed:

Performance management system is a major step towards strengthening the performance-oriented culture in the organization. Strong performance management practices are critical to the success of almost any organization. When it is effective, performance management drives positive operational outcomes by encouraging the desired attitudes, behaviours and results in employees. Our company has moved much ahead in the successful implementation of a robust and transparent performance management system.

He also mentioned that the corporate personnel department (HR team) had designed and delivered more than 10 training programmes annually discussing the different aspects of PMS to create awareness among the employees. A PMS handbook as a ready reckoner had also been designed.

Process of Performance Management at THDCIL

The different stages of PMS are explained below with their concerns.

Performance planning (KRAs’ formation): It started with the reporting officer discussing the expectations from the subordinate executives in terms of targets to be achieved during the assessment year, considering the organizational objectives, including the MoU rating and departmental targets. In an effort to keep the KRAs as SMART, a KRA directory was also maintained for this purpose. The executives from grades E2–E5 were evaluated based on KRAs, additional tasks and competencies. Whereas for executives from grades E6–E9, the KRAs were based on the balance score card, an additional value component was added for executives of E6 and E7 categories (Table 3). Mr Ashish and his team spoke to more than 100 appraisees and appraisers in the past two months. He spoke to employees across sites and departments. One of the HR team members, Mr D. P. Sahoo (Sr. Manager-HR) from the Tehri project, mentioned that ‘many officers raised the issues that there are no clear guidelines about how many KRAs are considered and at times it is difficult to define/fix KPIs as standards were not benchmarked’. Mr Hameed (Manager-Operations) told Mr Sahoo that ‘he was transferred from Rishikesh to the Tehri plant, and he felt that he was rated below performer by his boss last year’. Similar issues were also reported by other managers, including freezing KPIs for KPAs and their alignment with past job roles for employees who were transferred during the appraisal year, weightage of KPAs, lack of time given by bosses to fill the forms at this stage with no/minimal explanation and no joint discussions to reach a mutual agreement. However, Mr Nair (GM-Projects) found the system complex and biased. He shared his views several times that identifying KRAs and KPIs was a limitation because sometimes it might not be ‘SMART’ as roles and responsibilities were unclear. He also stated that ‘performance management is one of the key areas where organizations usually struggle because of the challenge of ongoing commitment and putting forward a continuous effort in applying fair, objective and consistent processes that measure and evaluate employee performance over time. The success of PMS largely depends on the clear understanding and proper implementation by all concerned’.

Mid-year review: Mid-year review allowed the appraisee to revisit the KRAs and to discuss the changes with the reporting officer to take necessary steps. If the need existed, KRAs could be modified for the remaining period. This review could also act as an early warning of non-performance, giving time to the appraisee to catch up. In discussions with employees, the HR team found that most employees were unhappy and dissatisfied at this stage. Again, one of the HR team members Ms Supriya Shule (Sr. Manager-HR), said that most bosses took it as a formality. Even in the other power plant at Koteshwar HEP, the head of the project mentioned to the HR team, ‘I don’t see any merit in this stage of PMS, and we should remove it. Most of us give continuous feedback to our appraisees. Further, it is time-consuming; we have to spend a whole day conducting the mid-year reviews separately, which is a mere waste of our time’.

Annual assessment: At this stage, the THDCIL measured employee’s performance against three pre-set critical evaluation components, namely, KRAs/KPIs/KPAs, competencies and special/additional tasks. Each of these three components carried specific marks allotted to each employee as per their achievements during the appraisal year. The weightage of each component is as follows: (A) KRAs/KPIs/KPAs 60 marks, (B) competencies 20 marks and (c) special/additional achievement/tasks 20 marks (refer Table 2 (A), (B) and (C) for details).

The objective of the annual appraisal assessment was to discuss and arrive at performance ratings with respect to the agreed targets. Since the PMS consisted of a section named special achievement section, which included additional tasks achieved by all the executive grades, there were broad guidelines as to what activities could qualify for additional tasks. During the year, all the additional tasks that were performed by the executives were recorded; tasks like handling any emergencies, representing the organization at various levels, contributing to process improvements or creating a knowledge base by contributing articles, acting as an internal trainer in different training programmes organized by the HR department and so on, should only form a part of special achievements section. Ms Supriya told Mr Ashish that although this was the most important stage, managers did not assess their appraisees objectively. She mentioned, ‘I got at least 50 written complaints last year regarding a boss giving fewer marks, boss being too lenient to their “blue-eyed protegees,” managers’ rude behaviour and showing attitude prior to appraisal season etc.’ She also shared that after giving repeated training to them, many managers still did not stop giving low marks and differentiate high performers vis-à-vis below average or low performers. Mr Chetan (AGM-Projects) from the Tehri site mentioned that his boss gave a higher rating to a few selected employees in 1 year and the remaining the next year, to avoid bad blood in project teams. When HR contacted his boss, Mr Dax Patel, he said:

‘I can’t afford for my team to break up. Last year I gave low ratings to 10%, and whenever I told them to do something, they would tell me that we are low performers, you ask your stars to do the tasks. He also mentioned that employees have a lot of issues with marks given for competencies and special assignment/tasks as they see high subjectivity bias.’

Communication of scores and appeal process: With the aim of fairness and transparency in the evaluation process, the executives were provided with a copy of the PMR and given a fair chance to appeal against the assessment made. The executives could appeal against the assessment, but the appeal had to be factual and follow the procedure. The appeal was generally restricted to the agreed KRAs, and marks allotted, subject to the condition that there was a difference of more than or equal to 15% between the score awarded by the reporting officer and the accepting authority against individual KRAs. In exceptional cases, an appeal against scoring for competencies and values could be considered only when relevant evidence was present. Mr Prashant Kumar mentioned in his email that his boss never discussed anything during the mid-year review. He said that ‘as I am not a very “buttering type,” he started avoiding me since last year. He started avoiding me when I asked for performance feedback after rating.’

Performance improvement plan (PIP): In PMS, during the mid-year review, there was a provision wherein the reporting officer was supposed to counsel each subordinate and give proper feedback on their performance so that they could improve during the latter part of the year. A performance improvement plan, also known as a performance action plan, was a tool to give an employee with performance deficiencies the opportunity to succeed. It could be used to address failures to meet specific job goals or to ameliorate behaviour-related concerns. The first step towards developing a performance improvement plan was to get clarity about any issues behind poor performance. Before an employee was put on a performance improvement plan, there had to be specific proof that he or she was underperforming on the job. The information used needed to be objective, factual and detailed. An employee whose performance appraisal report for two consecutive appraisal years was rated below par (poor) would be put on a performance improvement plan immediately after completing the second appraisal year.

The reporting officer/HOD, in which the employee whose performance had been poor, should prepare a performance report, call the employee for a one-to-one meeting and convince him/her about being put on a performance improvement plan. A performance improvement plan was not a performance audit; instead, it was aimed at helping and supporting the employee to improve his/her performance by identifying the cause of underperformance.

Normalization: Post-final scores were given by the respective accepting officers, and the cumulative scores grade-wise and unit-wise were put to normalization. The normalization was done to balance the variability of scores given by the reporting authority; lenient or harsh scoring often led to variability in the scores, which also affected the proper implementation of the bell curve, and these variations also impacted the appraisal of the employees along with the performance-related pay component. Normalization centres were created based on administrative control of the units, grade-wise grouping, number of executives and clubbing of different grades of executives if required to ensure adequate representation of executives’ grades in units/departments. Mr D. P. Sahoo said that about 65% of employees mentioned that they did not understand it. The design head Mr Anil once shared that ‘it’s like another magic tool in the hands of HR, and they used it for creating division in our cohesive teams.’ He further stated that many departmental heads were part of the normalization committee but did not share accurate information about it unless an employee made an appeal on low-performance ratings.

Performance-related pay (PRP): DPE introduced this concept during the 2007 pay revisions. Every PSU was mandated to frame the PRP guidelines based on the broad guidelines outlined by DPE. There were three basic components of PRP, namely, organizational target, departmental target and individual target. The formula devised by the DPE was multiplicative and not addition-based; therefore, if any component had zero as a value, the entire PRP was denied. Each year, 3% of the profit and 2% of the incremental profit of the corporation were distributed as the PRP component; the distribution of PRP depended on the organization’s level and the employee appraisal rating. Mr Keshav (Head-Generation, Vishnugad Pipalkoti HEP) told Mr Ashish:

It’s disadvantageous for us and being a construction project, there is high dependability on contractors and there are chances of slippage of construction targets due to several reasons. Maybe during the project stage (initial 2–3 years), the ROI will be negative for us, and my team will be highly frustrated as they got the lowest amount of PRP as a group as compared to project teams where generation has already started, or they are optimized fully.

Review and Appellate Authorities: To make the process fair and objective, THDCIL charted the roles and duties of the reporting officer, reviewing officer and accepting authority. This helped employees to discuss their issues with PMS and solve their grievances related to PMS effectively. The brief roles of these three officers are given below:

The Reporting Officer (RO) should give marks to the appraisee under his control in such a manner that the reviewing authority would find it easy to rate the marks considering the bell curve criteria. Furthermore, it was clarified that the RO would not give the same marks to two appraisees under his control under any circumstances. The RO should rank the appraisee under his control to apply the bell curve by the normalization committee. After obtaining all the performance management ratings (PMRs) of all appraisees under his control, then the ranking process should be done.

Reviewing Authority (RA): The RA would follow the same process to help the accepting officer rate the appraisee under the bell curve criteria. If required, the RA might discuss/consult with the accepting officer and the reporting officer. After obtaining all the PMRs of all appraisees under his control, the ranking process should be done.

Accepting Officer (AO): The AO would ensure the ranking of the appraisee to help the normalization committee apply the bell curve because ranking was an important management function that needed to be strictly adhered to, in order to enhance objectivity and transparency in the appraisal system. The AO would ensure the availability of all appraisees under his control before starting the ranking process. If no reviewing officer was positioned between the reporting officer and the AO, then the AO would act as the reviewing officer.

Table 1 below compares the old (Annual Confidential Report) and the current PMS process at THDCIL.

Table 1.

Comparison between Old and Current PMS at THDC.

Basis	Annual Confidential Report (Old PMS)	Current Performance Management
Focus	The focus was on top-down assessment.	It stresses mutual objective setting through a process of joint consultation.
Reviews	No mid-year reviews.	A continuous process with the mid-year review.
Duration of cycle	Annual process	Continuous/periodical process.
Use of ratings	The use of ratings is common.	Rare use of ratings.
Aim	Completion of task	Create measurable objectives, values and behaviours.
Structure	Monolithic system	Flexible system
Linkage with pay	They are linked only with promotion and pay.	Performance management is not directly linked with pay.
Scope	Limited scope and missed performance improvement planning.	Broader scope and covers performance improvement planning.
Nature of process	One-way & closed process	Transparent and mutual process
Linkage to organizational objectives	An isolated system not linked to organizational objectives.	An incorporated business-driven system which is aimed at organizational and individual development.
Annual target base	Only dealt with tasks and no scope for the formulation of annual targets.	Development-oriented process. Annual targets are fixed in advance in mutual consultation with employees.

Source: The authors.

It had been a week since Prashant had written to Mr Ashish. He called Mr Ashish to check why he had not responded to his emails. He also shared that Mr Ajay Kumar entrusted him with more work and unrealistic timelines, particularly regarding projects. On the other side, when Mr Ashish asked Mr Ajay Kumar about Prashant’s appraisal, he argued:

Prashant never met the deadlines and KPIs. He is above average performer but never an excellent performer. Rewarding a performer has a long-lasting effect on employee motivation and a cascading effect in the case of other employees. I have 115 appraisees to evaluate every year. I cannot be unfair to others by giving him excellent ratings.

He mentioned that his team performed the best during 2019–2020, and excellent performers were rewarded per industry benchmarks,

Prashant is a person who never liked critical feedback, which I gave during the mid-year review but he neglected the feedback completely. He also did not meet his KRAs 1, 3, 5 and 6 (Table 2(A)), and his current performance rating was purely based on the total marks (67 out of 100; refer to Table 2(D) for details) assigned to him after assessing all critical evaluation components by all three competent authorities, that is, RO, RA and AO.

Table 2(A).

Employee No:

Dept: Operations

PERFORMANCE PLANNING/ASSESSMENT SHEET)

2019?20201 Part 1(D) (60 marks)

1 The PMR booklet of THDCIL contains Four Parts, viz.

Part 1A: To be filled at the beginning of the Performance planning stage

Part 1B: To be filled during Mid-year Review

Part 1C: To be filled in case of transfer during appraisal year at a new place of posting

Part 1D: To be filled at the end of the Appraisal Year

		Targets/Key Result Areas for the Year (Including Key Tasks/Responsibilities, etc.) (To be filled in by the appraisee after discussion with Reporting Officer)
S. No	Description of Annual Plan Task/KRAs		Unit of Measurement (No. of Days, % Ascending (ASC) or Descending (DSC) order)	Max. Marks at 100% achievement	Targets
						Marks by RO	Marks by RA	Marks by AO
1	To qualitatively execute scheduled works under annual maintenance of Unit 1 for control and monitoring system, protection system, etc., as per schedule		Days	7	30 days	5	4	4
2	To qualitatively execute scheduled works under annual maintenance of Unit 4 for control and monitoring system, protection system, etc., as per schedule*		Days	8	30 days	8	8	8
3	To qualitatively execute scheduled works under annual maintenance of Unit 2 for control and monitoring system, protection system, etc., as per schedule**		Days	6	30 days	6	5	4
4	To identify shortfall of spares of control and monitoring system, protection system at stores, collecting offers from vendor/ OEM, taking approval and raising of indents, liaison with Contracts and Material Management (C&MM) and inspection of material on receipt at site		Percentage DSC	6	90% DSC	3	3	3
5	To acknowledge and attend routine complaints (min. 60%) registered by operation staff (provided unit is available for shutdown and severity of fault) (delay in working days)		Days	6	2 days (for complaint redressal)	4	3	3
6	To ensure that all spare parts arrive on time and annual maintenance schedule is completed as per schedule***		Percentage DSC	3	90%	2	1	1
7	Implementation of ISO 9001 and 14000 observation and clearing of nonconformities and maintaining the ISO documentation		Percentage DSC	4	100%	4	4	4
8	Compliance with inspection report of quarterly inspection conducted by operations and maintenance and safety, safety audit report, consultant recommendations, etc.		Percentage DSC	4	100%	4	4	4
9	To ensure realization/utilization of the Operation & Maintenance (O&M) budget***		Percentage DSC	4	100%	2	2	2
10	To qualitatively execute routine/breakdown maintenance of generating units and auxiliaries to ensure minimum unit availability of Koteshwar Hydro Electric Project (HEP)		Percentage DSC	4	100%	4	5	5^$
11	Feedback from the peer department		Percentage DSC	5	Above 90%	4	4	4
12	Submission of Performance Management Report (PMR) within the stipulated time at the beginning of the appraisal period (no. of days of delay)		No. of days of delay	1	No. of days of delay	0.5	0.5	0.5
13	Submission of PMR within the stipulated time at the Mid-Year period		No. of days of delay	1	No. of days of delay	1	1	1
14	Submission of PMR within the stipulated time at the time of Final evaluation		No. of days of delay	1	No. of days of delay	1	1	1
	Maximum Marks			60		44.5^#

Source: The authors.

Note: *Ideally, the KRA are mutually set between Reporting Officer (RO) and appraisee, so RO is the best judge of task accomplishment. AO should maintain restraint in deducting marks and deviating from that given by RO.

** The marks given by Reporting Officer, Reviewing Authority and Approving Officer vary, and the completion of KRA was not solely attributable to Mr Prashant.

*** This KRA is not only related to Mr Prashant; many senior authorities are associated with its timely completion. Such KRA should be framed for an appraiser of his level.

$ Review Authority and Approving Officer should not deviate from marks given by RO until and unless they have records.

# The marks given by AO are considered the final marks obtained, which is 44.5.

DSC-Descending order

Table 2(B).

Rating of competencies (for Mr Prashant) at THDCIL (B) (20 Marks).

Sr. No.	Competencies	Description	Assessment by Reporting Officer	Evaluation by Reviewing Officer	Evaluation by Accepting Authority
	Scale of Rating		1	2	3
1	Communication	The ability to communicate ideas/information effectively to the management/counterparts through verbal/written presentation.	3	3	3
2	Analytical ability	The ability to co-relate the problem with facts and other related information and formulate feasible alternatives for decision-making	2	2	2
3	Learning	The ability to update knowledge by way of reading journals/discussion with others/acquiring higher education with respect to the current development in his field of work	3	3	3
4	Relationship management	The ability to develop a collaborative relationship with internal/external customers of the organization to meet departmental objectives	3	3	3
5	Cost consciousness	The ability to plan the work and implement it with the optimum cost within the budget	1	1	1
6	Quality consciousness	The ability to execute a work in a time-bound manner within the cost and without compromising the quality	2	2	2
7	Taking ownership	The ability to take responsibility to accomplish a task assigned with minimum involvement of higher officials	2	2	2
8	Teamwork	The ability to work with many individuals as a group member to achieve team objectives and goals under the group leader	3	3	3
9	Problem-solving	The ability to solve problems involving varied levels of complexity, ambiguity and risks with confidence	3	3	3
10	Proactiveness	The ability to take an advanced step to accomplish the task	2	2	2
	Total (maximum marks = 40)		25	25	25
Total marks for a rating of competencies (prorated to 20 marks) = 25 ? 20/40 = 12.5
SIGNATURE: NAME: DATE: APPRAISEE: Mr Prashant Kumar REPORTING OFFICER: Mr Ajay Kumar

Source: The authors.

Note: The reporting officer may award 1, 2, 3 or 4 marks if he feels the competency needs development, meets expectations, is moderately above expectation and significantly exceeds expectations, respectively. Reviewing Authority and Accepting Officer may ratify the same.

Table 2(C).

Special/Additional Task/s (C) (20 marks).

S. No.	Additional/Special Tasks Performed by Mr Prashant During the Appraisal Period	Marks Obtained
1	Repair of the turbine at Unit 4, which stopped functioning suddenly in August 2019	2
2	Compilation and updating of ISO 9001 records of the past 3 years for internal audit purposes	3
3	Preparing the safety manual of Unit 1	2
4	Conducting two training programmes of 3 days each for engineers at Unit 4	3
	Total marks (out of 20)	10
SIGNATURE: NAME: DATE: APPRAISEE: Mr Prashant Kumar REPORTING OFFICER: Mr Ajay Kumar

Source: The authors.

Table 2(D).

Annual Performance Assessment Matrix (A + B + C).

Components of Annual Assessment at THDCIL	A (KRA/KPIs)	B (Applicable Competencies for the Role)	C (Special/Additional Task/s)	Total
Total marks	60	20	20	100
Attained marks	44.5	12.5	10	67
SIGNATURE: NAME: DATE: APPRAISEE: Mr Prashant Kumar REPORTING OFFICER: Mr Ajay Kumar

Source: The authors.

Mr Ajay Kumar also shared that he did not like the HR department interfering in the appraisals conducted without his knowledge.

Table 3.

Vision/Mission/Values of THDCIL.

VISION: A world-class energy entity committed to the environment and social values.

MISSION

To plan, develop and operate energy resources efficiently

To adopt state-of-the-art technologies

To achieve performance excellence by fostering work ethos of learning and innovation

To build a sustainable value-based relationship with stakeholders through mutual trust

To undertake rehabilitation and resettlement of project-affected persons with a human face

VALUES

S. No	Values	Definition
1	Fairness	Decisions are made objectively, free from patronage and reflect just treatment of employees and applicants
2	Transparency	There is open communication about every aspect of managerial decisions that concern people
3	Trust	Trustworthiness leads to confidence, allow staff the freedom to grow and develop, relate to others based on mutual respect, courage to stand by your mistake
4	Candour	Frank and forthright, give and receive constructive criticism/suggestions, openly discuss performance deficiencies, take corrective action, appreciate the good performance, be consistent in words and deeds, face up to your mistake
5	Collaboration	Working in tandem, be open in sharing information and in seeking suggestions/opinions, be sensitive to the concerns of others, honour your commitment, encourage teamwork across departments/function
6	Involvement	Total commitment, be committed, be dedicated and committed to working, build commitment by encouraging wide participation in the decision-making process as per agreed timeline
7	Flexibility	Ability to participate and adapt to changing circumstances using sound judgement, be open to accepting new ideas, be willing to learn from anyone and to do things differently, be prepared to operate and adapt to different environments
8	Willingness to accept the challenge	Be willing to experiment, allow for freedom to fail, but learn from it too
9	Discipline	Adherence to accepted norms, honour the promises and adhere to the agreed system, respect for overtime, exercising self-control
10	Ethical behaviour	Demonstrate honesty and sincerity in every action, apply sound business and professional ethics, and show consistency with principles, values and behaviour

Source: THDCIL Documents, updated on 24 January 2020.

Mr Prashant called Mr Ashish again after two days and told him that if he was not promoted this time, he will go to the appellate authorities and complain against Mr Ajay Kumar. He also requested whether he could be transferred to some other project in Sankosh or Malshej Ghat Project. Mr Ashish tried to calm him. He said he should go again and meet Mr Ajay Kumar to discuss the performance feedback and how he could improve his performance to get a promotion the following year. He suggested that Prashant discuss his performance improvement plan and new KRAs (with SMART KRAs and KPIs) with Mr Ajay Kumar when he meets him next time. He said he would discuss this issue with the concerned authorities and write him a response soon. Mr Ashish was wondering what to write in his email to Mr Prashant and what to include in the presentation for the HR meeting with Mr Bala S. next month.

Issues faced by employees in current PMS as of March 2021

The PMS in THDCIL has changed from being processed in hard copy to an e-version (e-PMS). Due to the technological upgradation of the process, employees who are not tech-savvy face issues.

Mutual goal setting sometimes becomes a customary rite. A deeper and more meaningful involvement of the Reporting Officer is missed at times.

The goals need to be aligned with organizational targets; mundane official assignments generally should not be part of KRAs.

The PMS appeal system is rigid, and the system could be more flexible by involving the appraiser and allowing mutual discussion during the appeal process rather than making it a closed one-way system wherein the appraiser does not have much say.

The guidelines make it tough to rate more than 15% of the employees as outstanding.

Several PSUs have started to adopt a system of 360-degree appraisal wherein peers and subordinates also rate their superiors, which is absent in the current system.

There is no periodic revision in potentials and competencies to match the fast-changing environment.

Footnotes

Authors’ Note

Dr Hardik Shah, Mr Ashutosh Kumar Anand and Dr Pallavi Tyagi wrote this case solely to provide academic material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of managerial situations/practices at THDC India Ltd. (Formerly Tehri Hydro Development Corporation Limited). The authors have disguised and changed selected names, figures, timelines and data to protect confidentiality.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The authors received no financial support for the research, authorship and/or publication of this article.

THDC India Ltd.—Performance Management System

Abstract

Keywords

Discussion Questions

Further Discussion Question

Introduction

The Company—HDCIL

Evolution of Performance Management System at THDCIL

Performance Management System at THDCIL

Process of Performance Management at THDCIL

Issues faced by employees in current PMS as of March 2021

Footnotes

Authors’ Note

Declaration of Conflicting Interests

Funding

APPENDIX 1