A PROJECT REPORT ON

PERFORMANCE MANAGEMENT SYSTEM

AT

INDIAN OIL CORPORATION LTD.

INDIAN OIL CORPORATION LTD.

SCOPE COMPLEX, LODHI ROAD, DELHI

UNDER THE GUIDANCE OF:

MR. ANIL YADAV, Dy. MANAGER(HRD)

INDIAN OIL CORPORATION LTD., SCOPE COMPLEX ,

LODHI ROAD, NEW DELHI

SUBMITTED BY: SHRUTI BANGIA

BBA SEMESTER-IV, TRINITY INSTITUTE OF

PROFESSIONAL STUDIES, DWARKA, AFFILIATED TO

G.G.S.I.P. UNIVERSITY KASHMERE GATE, DELHI

ACKNOWLEDGMENT
 ACKNOWLEDGEMENT

I express my profound sense of gratitude and indebtedness towards all those

who have rendered me direct or indirect support and assistance during my

Summer training.

I would like to express my deep gratitude to the Indian Oil Corporation Ltd

Headquarters for granting me permission to undergo my Summer Internship. My

Heartfelt thanks to Mr. Anil Yadav for providing me with a pleasant training

environment during the course of my summer training . His valuable thoughts

were of great importance and I express my gratitude towards him for providing

me with such valuable information about the Indian Oil Corporation Ltd.

I would also like to thank Mr. Sunil Arora (Deputy Manager, C&M, NTPC, Noida)

to provide me with the valuable information about the NTPC which helped me in

making my project.

Finally, I express a hearty acknowledgement towards all the employees in the

organization for providing a co-operative environment during the course of my

summer internship and help me adjust in the organization for these days.
ORGANIZATION’S
PROFILE
 ORGANIZATION’S PROFILE OF IOCL

Indian Oil Corporation Ltd. is the largest commercial enterprise in India.

Incorporated in 1959 as Indian Oil Company Ltd. became a corporation in

1964 when Indian Refineries Ltd.(Estd. 1958) was merged with the company.

Indian Oil Corporation Ltd. is currently India's largest company by sales with a

turnover of Rs. 247,479 crore (US $59.22 billion), and profit of Rs. 6963 crore

(US $ 1.67 billion) for fiscal 2007.

Indian Oil is also the highest ranked Indian company in the prestigious Fortune

'Global 500' listing, having moved up 19 places to the 116th position in 2008. It is

also the 18th largest petroleum company in the world. Indian Oil's vision is driven

by a group of dynamic leaders who have made it a name to reckon with.

In this section, you can peruse through the profile and spread of Indian Oil across

the country & abroad. You can also know about Indian Oil's current financial

performance, special initiatives and causes along with the prestigious recognitions

& awards that have come its way for exceptional performances.

IOCL has a large, divisionalized, multi-location structure, dispersed throughout

the country, with its corporate office at New Delhi. It has three major division-

‘Marketing with its head office at Mumbai. ‘Refineries’ with the head –office
at New Delhi, and Pipelines with head office at Noida. The R&D centre is

located at Faridabad about 20 k.m. from Delhi.

There are presently seven refineries namely Guwahati , Barauni , Gujrat , Haldia,

Mathura , Panipat and Assam Oil Division(AOD). The pipelines set-up functions

as two major regions-Eastern Region and Western Region.

Similarly , marketing division operates through its four regions , North , South ,

East , and West. Indian Oil has two subsidiary companies, Chennai Petroleum

Corporation Ltd. And Bongaigaon Refinery and Petrochemicals Ltd., with a

combined refining capacity of 9.35 MMTPA, thereby raising its total refining

capacity to 47.50 MMTPA, the highest in the country today. Indian Oil has the

country’s largest network to crude and product pipelines, with a combined length

of 6,523 km and a capacity of 43.45 MMTPA. With sales of 47.17 million metric

tones in 2001-02, Indian Oil holds over 53% of the petroleum products market

share in India. Its extensive network of over 22,000 sales points is backed for

supplies by 182 bulk storage points and 78 Indane bottling plants. 92 Aviation

Fuel Stations cater to the Aviation Industry, defence as well as civil.

The following are the salient features of IOCL:-

 It is the 21st largest petroleum company in the world.

 Indian Oil is the highest ranked Indian company in the Fortune 'Global 500'
list of companies.

 For the year 2005-06, the Indian Oil group sold 54.6 million Tonnes of
Petrolium products, including 2.09 million tones through exports.

 The Indian Oil Group of Companies owns and operates 10 of India’s 18

refineries.

 IOCL owns and operates the widest and the largest network of Petrol &
Diesel stations in the country (more than 15,000).

 It has a network of 4,856 Indane Distribution of Indane Gas to its domestic

customers.

 IOCL has a wholly owned subsidiary, Indian Oil Technologies Ltd.

 It is also a leading distributor of natural gas in India.

HISTORY
OF
IOCL
 HISTORY OF IOCL

YEAR MILESTONES

1958 Indian Refineries Ltd. formed in August with Mr. Feroze Gandhi
as the Chairman.
1959 Indian Oil Company Ltd. established on 30th June 1959 with Mr.
S. Nijalingappa as the Chairman.

1960 Agreement for supply of Kerosene and Diesel signed with the then
USSR.
MV Uzhgorod carrying the first parcel of 11,390 tonnes of Diesel
for IndianOil docked at Pir Pau Jetty in Mumbai on 17 th August
1960.
1962 Guwahati Refinery inaugurated by Pt. Jawaharlal Nehru, Hon’ble
Prime Minister of India.
Construction of Barauni Refinery commenced.
1963 Foundation laid for Gujarat Refinery
Indian Oil Blending Ltd. (a 50:50 Joint Venture with Mobil)
formed.
1964 Indian Refineries Ltd. merged with Indian Oil Company with
effect from 1st September, 1964, and Indian Oil Company
renamed as Indian Oil Corporation Ltd.
Barauni Refinery commissioned.
The first petroleum product pipeline from Guwahati to Siliguri
commissioned.
1965 Gujarat Refinery inaugurated by HE Dr. S.Radhakrishnan,
President of India. Barauni-Kanpur product pipeline and Koyali-
Ahmedabad product pipeline commissioned.
IndianOilPeople maintained the vital supply of Petroleum products
to Defence Services during Indo-Pak war.
1967 Haldia Barauni product pipeline commissioned.
Bitumen and marine bunkering businesses commenced.
1968 Techno-economic studies for Haldia-Calcutta, Bombay-Pune and
Bombay-Manmad Pipelines submitted to Government.
1969 Marketing of Madras Refineries Ltd. products commences.

1970 Acquired 60% majority shares of IBP Co. Ltd. The same was
offloaded in favour of the President of India in 1972.

1971 Dealership/reservation extended to war widows, disabled Defence

personnel, freedom fighters, etc. for the first time after the Indo-
Pak war.

1972 R&D Centre established at Faridabad.

SERVO, the first indigenous lubricant, launched.
1973 Foundation-stone of Mathura Refinery laid by Mrs. Indira Gandhi,
Hon’ble Prime Minister of India.

1974 Indian Oil Blending Ltd. became the wholly-owned subsidiary.

Marketing Division attained a new watershed with market
participation of 64.2%.

1975 Haldia Refinery commissioned.

Multipurpose Distribution Centres introduced at 132 Retail Outlets
pioneering rural convenience.
1977 Nutan wick stove launched by R&D Centre.

1978 Phase-wise commissioning of Salaya-Mathura crude oil pipeline

begins.

1981 Digboi Refinery and Assam Oil Company's (AOC) marketing

operations vested in IndianOil and it became Assam Oil
Division(AOD)of Indian Oil on 13th oct. 1981.

1982 Mathura Refinery and Mathura- Jalandhar Pipeline commissioned.

1983 Massive augmentation of LPG storage and distribution facilities

undertaken. Proposal for the 6 MMTPA Refinery at Karnal
submitted.

1984 Taluka Kerosene Depots (TKDs) commissioned for improved

availability of kerosene in rural and hilly areas in addition to
Multipurpose Distribution Centres.
Foreshore Terminal at Kandla Port commissioned.
Integrated Corporate Planning – a 10-year Perspective Plan and 5-
year Long Range Plan – initiated.
1985 New office complex for Registered Office of the Corporation and
Head Office of Marketing Division in Mumbai completed.

1986 A new Foreshore Terminal at Madras commissioned.

1987 Test marketing of 5 kg LPG cylinders begins in 1986-87 in Garo Hills

and Kumaon.

1989 Salaya-Mathura crude oil pipeline suitably modified for handling

Bombay High Crude during winter.

1990 Kandla-Bhatinda product pipeline project approved.

First LPG Bottling Plant of Assam Oil Division (AOD) commissioned
at Silchar.
1991 Digboi Refinery modernisation project initiated.
Bunkering facility at Paradip commissioned.
1993 New era Micro-processor based 'Distributed Digital Control Systems'
replacing the pneumatic instrumentations began in refineries.
1994   India's first Hydrocracker commissioned at Gujarat Refinery.
  'Vision-2000', the Retail Visual Identity programme launched to
 upgrade retail outlets.
1995 1,443 km. long Kandla-Bhatinda product pipeline commissioned.
First lndane Home Shoppe launched.
1996 State-of-the-art LPG Import Terminal at Kandla (capacity of 6,00,000
tonnes per annum) commissioned.
First batch of one-year International MBA (iMBA) programme passes
out of IndianOil Institute of Petroleum Management (IIPM).
1997 Business Development received renewed thrust with new functional
group.
IndianOil enters into LNG business through Petronet LNG -a JV
company.
1998 Panipat Refinery commissioned.
Haldia-Barauni crude oil pipeline completed.
Administrative Pricing Mechanism (APM) withdrawn for refining
sector with effect from 1st April. Phase-wise dismantling of APM
began.
IndianOil Board reconstituted under the Navaratna concept, with the
induction of five part-time non-official independent Directors.
1999 'Indian Hydrocarbon Vision -2025' was announced at PETROTECH-
99, organised by IndianOil on behalf of the oil Industry.
Manthan - IT re-engineering project launched.
2000 IndianOil crossed Rs l ,00,000 crore in turnover – first corporate in
India to do so.
The 'IndianOil Foundation', a non-profit trust, the first of its kind in
Corporate India, unveiled to protect, preserve and promote the
country's heritage.
2001 Digboi Refinery completed 100 years of continuous operation.
Chennai Petroleum Corporation Ltd. (CPCL) and Bongaigaon
Refinery & Petrochemicals Ltd. (BRPL) became subsidiary
companies.
2002 APM dismantled for marketing sector. Pricing of petroleum products
decontrolled.
IBP Co. Ltd. acquired with management control.
2003 Lanka IOC Pvt. Ltd. (LIOC) launched in Sri Lanka.
Retail operations begins in Sri Lanka. Indian Oil becomes the first
Indian Petroleum Company to begin downstream marketing
operations in overseas market.
2004 IndianOil begins gas marketing of regassified LNG.
IndianOil Mauritius Ltd. state-of-the-art oil storage terminal at Mer
Rouge port in Mauritius commissioned .
2005 Entry into E&P with the IndianOil-Oil India consortium signing
 Exploration and Production Sharing Agreement with the National Oil
Corporation of Libya for a block in the Sirte basin of Libya.
IndianOil's Mathura Refinery becomes the first Indian refinery to
produce Euro-III compliant diesel with the commissioning of diesel
hydrotreater. Also commissions India's first petrol quantity
upgradation unit to produce Euro-III compliant petrol.
2006 IndianOil Blending Ltd. (IOBL), the wholly-owned subsidiary of
IndianOil, merged with the parent company on 12th May, 2006.
Panipat Refinery capacity enhanced from 9 to 12 MMTPA.
2007 Marketing subsidiary IBP Co. Ltd. merged with parent company.
Concept of SERVOXpress Centres as one-stop shops for autocare
services launched.
2008 SERVO lubricants launched in Oman.
IndianOil Chairman elected as President of World LP Gas
Association.
2009 The 'historic amalgamation' of Bongaigaon Refinery &
Petrochemicals Ltd. (BRPL) with the parent company - Indian Oil
became effective from March 25, 2009. BRPL was inducted as an
IndianOil Group Company on 29th March, 2001.
 OBJECTIVES OF IOCL

 To serve the national interests in oil and related sectors in accordance

and to consistent with Government Policy.

 To ensure maintenance of continuous and smooth supplies of petroleum

products by way of crude oil refining, transportation and marketing

activities and to provide appropriate assistance to consumers to conserve

and use petroleum products efficiently.

 To enhance the country's self-sufficiency in crude oil refining and build

expertise in laying of crude oil and petroleum product pipelines.

 To further enhance marketing infrastructure and reseller network for

providing assured service to customers throughout the country.

 To create a strong research &development base in refinery processes,

product formulations, pipeline transportation and alternative fuels with a

view to minimizing/eliminating imports and to have next generation

products.

 To optimise utilisation of refining capacity and maximize distillate yield

and gross refining margin.

 To maximise utilisation of the existing facilities for improving efficiency

and increasing productivity.

 To minimise fuel consumption and hydrocarbon loss in refineries and

stock loss in marketing operations to effect energy conservation.

 To earn a reasonable rate of return on investment.

 To avail of all viable opportunities, both national and global, arising out

of the Government of India’s policy of liberalisation and reforms.

 To achieve higher growth through mergers, acquisitions, integration and

diversification by harnessing new business opportunities in oil

exploration & production, petrochemicals, natural gas and downstream

opportunities overseas.

 To inculcate strong ‘core values’ among the employees and continuously

update skill sets for full exploitation of the new business opportunities.

 To develop operational synergies with subsidiaries and joint ventures

and continuously engage across the hydrocarbon value chain for the

benefit of society at large.

FINANCIAL OBJECTIVES OF IOCL

 To ensure adequate return on the capital employed and maintain a

reasonable annual dividend on equity capital.

 To ensure maximum economy in expenditure.

 To manage and operate all facilities in an efficient manner so as to

generate adequate internal resources to meet revenue cost and

requirements for project investment, without budgetary support.

 To develop long-term corporate plans to provide for adequate growth of

the Corporation’s business.

 To reduce the cost of production of petroleum products by means of

systematic cost control measures and thereby sustain market leadership

through cost competitiveness.

 To complete all planned projects within the scheduled time and approved

cost.
VISION, MISSION,
VALUES AND
OBLIGATIONS OF
IOCL
 VISION OF IOCL

A major diversified, trans-national, integrated energy company, with national

leadership and a strong environment conscience, playing a national role in

oil security & public distribution.

 MISSION OF IOCL

 To achieve international standards of Excellence in all aspects of

excellence in Petroleum refining marketing and transportation

with concern for customer satisfaction.

 To maximise creation of wealth, value and satisfaction for the

stakeholders.

 To attain leadership in developing, adopting and assimilating state-of-

the-art technology for competitive advantage.

 To provide technology and services through sustained Research and

Development.

 To foster a culture of participation and innovation for employee

growth and contribution.

 To cultivate high standards of business ethics and Total Quality

Management for a strong corporate identity and brand equity.

 To help enrich the quality of life of the community and preserve

ecological balance and heritage through a strong environment

conscience.

VALUES OF IOCL
 

(I) Care - Stands for

 Concern
 Empathy
 Understanding
 Cooperation
 Empowerment

(II) Innovation - Stands for

 Creativity
 Ability to learn
 Flexibility
 Change

(II) Passion - Stands for

 Commitment
 Dedication
 Pride
 Inspiration
 Ownership
 Zeal & Zest

(IV) Trust - Stands for

 Reliability
 Dependability
 Integrity
 Truthfulness
 Transparency
 Delivered promises
OBLIGATIONS OF IOCL
 Towards customers and dealers:- To provide prompt, courteous and

efficient service and quality products at competitive prices.

 Towards suppliers:- To ensure prompt dealings with integrity,

impartiality and courtesy and help promote ancillary industries.

 Towards employees:- To develop their capabilities and facilitate their

advancement through appropriate training and career planning. To

have fair dealings with recognised representatives of employees in

pursuance of healthy industrial relations practices and sound

personnel policies.

 Towards community:- To develop techno-economically viable and

environment -friendly products. To maintain the highest standards in

respect of safety, environment protection and occupational health at all

production units.

 Towards Defence Services:- To maintain adequate supplies to

defence and other para military services during normal as well as

emergency situations.
HUMAN RESOURCE
DEPARTMENT
OF
IOCL
 HR DEPARTMENT OF IOCL

The human resources in Indian Oil Corporation was 31,675 strong as on

31.03.2002, of which 9,728 are in the Officers cadre and 21,947 are in the Staff

cadre. There are 5,672 employees from SC category and 2,097 from ST category.

The SC and ST employees constitute 24.53% of the total employees’ strength.

There are 2,387 women employees, out of whom 692 are in the Officers carde and

1,695 in Staff cadre. The women employees constitute 7.54% of total employees’

strength.

The HR department at IOCL Refineries Division subdivided into the following

areas:-

(i) Personnel Department :-

The main function of personnel

department is to ensure that the all information related to employees is

maintained and updated, to provide various benefits to employees under

the rules, to frame policies etc. The main sections of the personnel

department are as following:-

(a) HRD:- This section looks after the manpower recruitment of the

refinery division. It is concern with recruitment, promotion, transfers

of employees across the division.

 (b) Policy Section:- Policy section is concerned with framing and

modification of policies. It also books into HR and legal matter.

(c) Establishment :- Establishment section maintains the personal data of

employee /individuals and facilitates providing various employee

benefits such as medical benefits, leave , pay, post retirement benefits

etc.

Objectives of Personnel Department of IOCL :-

The primary objectives of Personnel Department are as under:  

(i) Design and develop an organizational structure with well

defined relationships commensurate with the business
plans and corporate strategies;

(ii) Promote and develop co-operative attitude amongst

employees by fostering harmonious relations at all levels
and inculcate sense of belonging;

(iii) Evolve progressive and pragmatic personnel policies,

procedures and practices and ensure its uniform
interpretation and judicious implementation;

(iv) Develop the capability and proficiency of employees and

their advancement through appropriate training and
 continuous knowledge updation to face corporate
challenges and new technologies;

(v) Promote and inculcate the culture of employees’

participation in management;

(vi) Ensure compliance of social and statutory obligations and

Govt. directives; and

(vii) Inculcate productivity consciousness amongst employees.

(viii) Administration of Electronic Performance Management

System and Productivity Incentive Schemes.

(ix) Change agent to new interventions.

FUNCTIONS OF PERSONNEL DEPARTMENT OF IOCL:-

(i) STAFFING:-

 Manpower planning.
 Determine the organizational structure and optimize
manpower to effectively meet Company’s objective.
 Job description.
 Recruitment.
 Personnel records.
 Promotion.
 Transfer.  

 
(ii) PERSONNEL MAINTENANCE:-

 Motivation.
 Performance Appraisal.
 Recreation.
 Communication.
 Employee amenities - canteen , clubs etc.
 Safety.
 Medical Services.
 Security.  

(iii) DEVELOPING THE HUMAN RESOURCE:-

 Induction and apprentice training.

 Training & development of employees.

(iv) INDUSTRIAL RELATIONS:-

 Productivity Bargaining.
 Grievance Handling.
 Discipline Administration.
 Providing joint consultative machinery-Joint Management
Councils.  

(v) COMPENSATION :-  

 Wage & Salary surveys & controls.

 Negotiations.
 Incentives / bonus.  

(vi) PERSONNEL POLICY & PLANNING:-

  Defining Organizational goals, Policy guidelines and
strategies.

 Formulating & implementing Personnel policies.

RESPONSIBILITIES  OF PERSONNEL DEPARTMENT OF IOCL:-

It will be the responsibility of Personnel Department at Refineries HQ to

formulate, under  the overall  direction of Director (Refineries), the

Refineries Division's personnel policies and programmes  and to

communicate the same to the Units. Personnel Department at Hqrs. and

P&A Departments at each unit shall provide assistance and counsel to other

departments on personnel matters.

Personnel   management   essentially being a staff functions, Personnel

Department's role will be that of a staff department with  emphasis on its

advisory character in all matters connected with  personnel  activities except

in respect of the promotion of welfare  measures  which  will be the

executive responsibility of this  Department.  Personnel Department shall

also be responsible for ensuring compliance with the provision of various

labour laws and other statutes.  

(ii) Administration Department :-

The function of administration department

is to provide services related to administration and welfare of
employees. Some of the main areas looked after for administration
department are:-

 Allotment of quarters/ accommodation to employees.

 Arranging vehicles for official requirements.

 Implementation of hindi language in various official activities.

 Supervising canteen services.

 Providing loans/ advances to employees for house.

 Community development programs.

 Orgnising functions.

 Maintaining stores and dispatch activities.

 Objectives of Administration Department of IOCL:-

(i) The primary objective of the Department is to assist the Management in

implementation and execution of various administrative decisions taken by
the Board of Directors of the Corporation. For this purpose, it acts as a
Secretariat of the Director (Refineries) / Director In-charge (AOD).

Apart from it, the Department also functions as Service Department to the
internal and external customers and provides necessary assistance on
general administrative, welfare and security matters to all the Refinery
Units including AOD, Kolkata and Mumbai offices as well as other
Departments at Headquarters.

(ii) Coordination is another important task of the Department. For this

purpose, the Department maintains various records and statistics and
handles correspondence with the Ministry, Government agencies,
Parliamentary bodies, other organizations and VIP references.

(iii) The Department also renders assistance to Refinery Units and various
departments at the Headquarters in maintaining liaison with various
Ministries of the Government of India, Lok Sabha Secretariat etc.

(iv) The Department aims at achieving the highest level of efficiency and
productivity with utmost speed and accuracy.
FUNCTIONS OF ADMINISTRATION DEPARTMENT OF IOCL:-

Policy Matters :
(i) Delegation of Powers.

(ii) Implementation of Board's decisions.

(iii) Rajbhasha implementation.

(iv) Administration of House Building Advance, Conveyance Advance,

Festival Advance, reimbursement of conveyance expenses, etc.
(v) Office and residential accommodation (company owned / company lease/
self-lease).
(vi)  Furniture and computers on hire for officers at residence.
(vii) Furniture / computers for office at residence of Sr. Executives.
(viii) Disposal of unserviceable materials including vehicles.
(ix) Maintenance of office records.
(x) Transport facilities.
(xi) Security of Company Assets & Personnel.
(xii) Provision of Club memberships/ credit cards.
(xiii) Schools in Refinery Townships.
(xiv) Community Development

Coordination:
 (i) Reply to Parliament Questions.
(ii) Reply to VIP references.
(iii) Furnishing information required by Deptt. Of Public Enterprises,
Estimates Committee, Parliamentary Committee on Public
Undertakings and other such Committees.
(iv) Coordination with Ministries.

Legal Matters:
i) Providing assistance in processing of contracts and agreements.
ii) Land/Houses acquisition matters.
iii) Office Services Contracts.
iv)  Bonds and Mortgage deeds.
iv) Lease agreements.
v) Liaison with Solicitors for obtaining legal advice.

General Administration:
(i) House keeping of office space.
(ii) Dak receipt, distribution and dispatch.
(iii) Domestic Rail and Air bookings.
(iv) Control of Staff/Hired Cars including maintenance.
(v) Transportation – Hiring of Cars & Buses.
(vi) Photocopiers / Digital Document Centres / Fax Machines / Cellular
phones.
(vii) Office furniture and equipments.
(viii) Stationery and Stores.
(ix) International travel arrangement including Foreign exchange.

(x) Allotment of office space / residential accommodation.

 (xi) Maintenance and Administration of Guest Houses.
(xii) Lodging arrangements for officers on tour.
(xiii) Communication Services maintenance.

Civil Defence, Security & Safety:

(i) Territorial Army.
(ii) Security measures in Refinery Units & HO including CO.
(iii) Induction of CISF
(iv) Civil Defence Measures
(v) Issue of identity cards.
(vi) Fire fighting.

Welfare Activities:

(i) Maintenance and Administration of Holiday Homes for officers at

Shimla & Manali and for workmen at Manali, Darjeeling, Goa and
Mussoorie.
(ii)  Maintenance and Administration of Medical Transit Camps, Transit
accommodation, etc.
(iii) Canteens.
(iv) Sports
(v) Coordination jobs relating to official functions/gatherings.

Maintenance of Assets
(i) Maintenance of land / property records.

(ii) Servicing and maintenance of office equipment viz. lifts, air

conditioners, staff vehicles, photocopiers, Digital document centers,
Mobile phones etc. purchased by the Corporation.

(iii) Operation and maintenance of electrical installations, water supply,

water storage tanks, neon signs etc.

(iv) Maintenance of office buildings, company owned / leased residential

accommodation, Townships and Guest Houses.

(v) Communication Services like Fax, MTNL Telephones, Mobile

phones, etc.
PERFORMANCE
MANAGEMENT
SYSTEM
 PERFORMANCE MANAGEMENT SYSTEM

Performance Management System(PMS) is one of the important components in

systemic process of human resource management. The information obtained

through performance management system provides foundations for recruiting

and selecting

new hires, training and development of existing staff, and motivating and

maintaining a quality work force by adequately and properly rewarding their

performance. Without a reliable performance appraisal system, a human resource

management system falls apart, resulting in the total waste of the valuable human

assets a company has.

There are two primary purposes of performance management system : evaluative

developmental. The evaluative purpose is intended to inform people of their

performance standing. The collected performance data are frequently used to

reward high performance and to punish poor performance. The developmental

purpose is intended to identify problems in employees performing the assigned

task. The collected performance data are used to provide necessary skill training or

professional development.

In order for performance appraisal information to be useful, the PMS system must
be

able to consistently produce reliable and valid results. Measurement items in the

performance appraisal system must be designed in such a way that the results of
rating are consistent regardless of the raters and the timing of the assessment.

The purpose of performance appraisal must be clearly communicated both to raters

and ratees, because their reactions to the appraisal process are significantly

different depending on the intended purpose. Failure to inform about the purpose

or misleading information about the purpose may result in inaccurate and biased

appraisal reports.

In order for performance information to be useful, the PMS system must be

able to consistently produce reliable and valid results. Measurement items in the

performance managemnt system must be designed in such a way that the results of

rating are consistent regardless of the raters and the timing of the assessment.

Another critical criterion in developing a PA system is the validity of the

measurements. It is important to make sure that the appraisal items are really

measuring the intended performance or target behavior. If they are not, the PM

system encourages the wrong kind of work behaviors and produces unintended ,

frequently negative, organizational outcomes. For instance, if the number of traffic

violation tickets issued is an item in performance appraisal of police officers, it

encourages them to sit on a corner of a street and pull over as many violators as

possible during heavy traffic hours. The true purpose of a police force, which is

public safety, may become secondary to issuing a large number of tickets for many

officers.
 What to Evaluate?

The first important step in developing a PM system is to

determine which aspects of performance to evaluate. The most frequently used

appraisal criteria are traits, behaviors, and task outcomes.

(a) Traits :- Many employees are assessed according to their traits, such as

personality, aptitudes, attitudes, skills, and abilities. Traits are relatively easy

to assess once a rater gets to know ratees. But traits are not always directly

related to job per formance. Trait-based assessment lacks validity and thus

frequently raises legal questions.

(b)Behaviors :- For many jobs, performance is so broadly defined or so

conceptual in nature— such as ensuring public safety in the police de

partment—that it is hard to come up with reliable performance measures. In

such cases, desirable behaviors can be identified and assessed in the belief

that such behaviors lead to successful performance. Such behavior-focused

assessment encourages employees to adopt desirable behavioral patterns in

the workplace.

(c) Task outcomes :- When information about task outcomes is readily

available, it is the most appropriate factor to use in evaluating performance.

 When an organization has a clear and measurable goal as in the case of a

sales force, this approach is recommended. However, it has its own pitfalls.

There is a problem if employee behaviors are not directly related to the task

out-come. Too narrow a focus on measuring out-come only sometimes

results in unintended negative consequences. When sales staff narrowly

focus on target sales figures to increase their performance measure, for

example, they are encouraged to help a few large-volume customers and to

ignore many smaller buyers. This may result in poor customer service on the

floor.

 Who Evaluates?

The most common raters of performance are

employees' immediate supervisors, who are usually in the best position to know

and observe the employees' job performance. They are also responsible for

employee’s work. Their evaluation is a powerful tool in motivating employees to

achieve successful and timely completion of tasks. However, as a result of working

together over a long time with the same employees, the immediate supervisor may

build up a fixed impression about each employee and use it every time he or she

has to evaluate performance.

Some companies find that subordinates are in an excellent position to observe and
evaluate their managers' performance, especially when it comes to measuring

effective management of their department. While there is merit in asking

subordinates to evaluate how they are managed, such evaluation may turn into a

popularity contest. Accurate and objective assessment may not be obtained if

employees are fearful of possible retaliation from their supervisors. Anonymity of

the evaluators is key to the successful use of subordinates for objective evaluation.

Other raters who are frequently used in some companies include peers, customers,

and the employees themselves. Peer evaluation is particularly useful when

teamwork and collegiality are important to successful task performance. Peer

pressure is sometimes a powerful motivator in encouraging teamwork among

members. Customer satisfaction is vital to a company's success and can be used in

performance management. Many companies systematically collect performance

information from customers, typically through anonymous surveys and interviews.

Self-assessment is also a useful means, especially when the performance appraisal

is intended to identify the training and development needs of potential employees.

Organization exist to attain certain goals and objectives through a effort. Some

form of control and co-ordination is needed to facilitate the achievement of such

goal. Some form of control and co-ordination is needed to facilitate the

achievement of such goal. Some form of control and co-ordination is needed to

facilitate the achievement of such goal. Control devices in the form of

performance appraisals were invented by the corporate world to accomplish their

professed objectives.
“Performance management system is systematic and objective way of judging
the relative

worth or ability of an employee in performing his task.” It is a process of

evaluating an employees performance on a job in terms of its requirement.

In industry, appraisal is a systematic evaluation of performance by supervisors or

other familier with their performance because employers are interested in knowing

about employee performance. Employee also wishes to know their position in their

organization. Performance mgt helps to identify those who are performing

their assigned tasks well and those who are not and the reason for such

performance. A caution has to be exercised as the assessment of an individual’s

performance is a delicate task since it is intricately enmeshed in the personality

make up of one who is assessing the performance and having profound effect on

the individual who is being assessed. It is here that the weakness of human

judgement comes to the force. In the field of human behavior and performance, the

measurement or appraisal can’t take the form of weighing on a scale certain

material object or accurately temperature with the instrument. Thus judgement as

the basis of the appraisal can be subject to numerous drawbacks connected with

the perceptions one’s own bias, the social prejudice, unconscious urges and the

fact that it is impossible to arrive at categorically absolute judgement in this

sphere.

Performance Appraisal is useful in many ways as it many ways as it helps in

salary and wage determination, helping the employees know their achievements
and failures, training and development needs, promotions and transfer decisions

etc. Therefore, a good performance appraisal system should aim at facilitating the

communication between two officers and developing empathy, mutuality and

appreciation for one another’s problem.

Performance management system concerns with mainly three purposes:-

 Administrative decisions i. e. Promotions, transfers and allocation of

financial rewards.

 Employee development i.e. identification of training and developmental

needs and performance feedback.

 Personnel research i. e. identification of training and developmental

needs and performance feedback.

Therefore a good performance appraisal

system should aim at facilitating the communication between two officers

and developing empathy, mutuality and appreciation for one another’s

problem.
 PURPOSE OF PERFORMANCE APPRAISAL:-

 To help determine promotions and transfer decisions.

 To identify area for further training.

 To help in deciding the compensation plan.

 To uncover the potential of the person.

 To decide about confirmation or termination during probationary period.

ADVANTAGE OF SYSTEMATIC APPROACH TO PERFORMANCE

APPRAISAL:-

(1) If it is possible to establish an atmosphere of mutual trust and confidence an

effective performance appraisal system will help to build up employee morale.

(2) It will stimulate employee participation in decision making affecting his own

work. Management By Objectives is an established criterion as the standard

of performance is established by the superior in consultation with employee

concerned. Employee interest to improve his performance will help the

 management in achieving the organizational goals.

(3) It will also help the management in rationalizing a job-oriented level of

individual performance. Once the performance level is satisfactorily

established, the standard of performance could also move upward leading to

productivity.

(4) Employee performance can be utilized for placement, job-rotation,

transfers, lay-offs, dismissal and discharges demotions.

(5) Such appraisals can also serve as a guide in properly administering wage-and

salary administrations.

In addition to having an impact on productivity, an effectively designed

performance appraisal form servers as a contract between the organization

and the employee. This contract acts as a control and evaluating system,

better enabling performance appraisal to serve the following performance:

 Management development: -

Focuses on the future by identifying and

preparing individuals for increased responsibility or by establishing
remedial training programs.
 Performance measurement:-

Emphasis the past, trying to determine the

relative value of employee performance; is useful for promotion,
transfer, compensation and layoff decision.

 Feedback:-

Outlines what performance is expected from employee.

 HR planning:-

Audits management talent to evaluate the present supply

of HR for replacement planning.

 Communication:-

Provide a format for the dialogue between superior

and subordinate and improves understanding of personal goals and
concerns; can also increase the trust between the rater and rate.
PERFORMANCE APPRAISAL- CONCEPT AND PHILOSOPHY :-

Performance appraisals are also known as employee appraisal. It is a technique by

which the performance of an employee is measured in terms of cost, quality, time
and quantity. Performance appraisal is considered as part of career improvement
and development.
Performance appraisal are is on going continuous review of company’s employee
performance.

The purpose of these appraisals are as follows:

 Give feedback on employee’s performance.

 Recognize training needs of employee.

 Shape criteria for salary increments, promotion etc.

 Offer the chance for organizational analysis and improvement.

 Bridge the communication gap between employee and administrator.

 Document criteria used to allocate organizational rewards.

 Form a basis for personnel decisions: salary increases, promotions,

 disciplinary actions, etc.

 Provide the opportunity for organizational diagnosis and development.

 Validate selection techniques and human resource policies to meet federal

equal Employment Opportunity requirements.

A frequently used technique to evaluate performance is to make use of

numerical or scalar rating method where managers numerically score an

individual against a number of objectives/ attributes.The other method is 360

degree performance appraisal in this the employees are also allowed the

opportunity to assess the person and give feedback about manager.

Mostly used appraisals are:-

 360-Degree Performance Appraisal.

 General Performance Appraisal.

 Technical /Administrative Performance Appraisal.

 Manager Performance Appraisal.

 Employee Self –Assessment.

 Project Evaluation Review.

 Sales Performance Appraisal.
 PROCESSES OF PERFORMANCE APPRAISAL

The process of Performance Appraisal is as shown in the following

tabular form:-
PERFORMANCE
MANAGEMENT
SYSTEM
AT IOCL
 BRIEF ON PERFORMANCE APPRAISAL IN IOCL

With a view to appraising each employee, helping the management in placement,

transfer and promotion, and deciding about his training needs.The following

systems are in practice in IOCL.

(i) e-PMS (Electronic Performance Management System) for officers.

(ii) CRs (Confidential Reports) for non officers.

Assessment period

The assessment period for recording the performance of officers is financial

year (1 April to 31 March).

For staff it is calendar year.

Employees having rendered more than three months service in a

particular year has been separated before end assessment years are

eligible and rated through ePMS System.

PROCESS OF PERFORMANCE APPRAISAL SYSTEM FOR OFFICERS:-

Three persons participate actively in Performance Appraisal System. Who are:

(i) Appraisee: The employee, who is to be evaluated.

(ii) Appraiser: Supervisor, who evaluate the performance of Appraiser.

(iii) Reviewer: Sr. executives, who check the evaluation process.

Apraisee fills a form in the starting of financial year which includes targets to

be achieved by that particular employee. Then Appraiser and Appraisee discuss

them, reach an agreement and put the agreed goals in writing.

Then they plan how to achieve these goals. On the basis of priority they decide

activities to be done to achieve the goals.

At the end of financial year, Appraisee evaluates himself and gives marks out of

5. Then Appraiser evaluates the Appraisee and gives him marks out of 5.
These 3 marks signify:

3- Outstanding
2- Average.
1- Needs improvement

Appraiser evaluates Appraisee on the basis of following areas:

(i) KRA (Key Result Area) is basic area to evaluate employee’s

performance.

KPI (Key Performance Indicator): On the basis of KRA, Appraiser

gives measurable grades to Appraisee is known as KPI. It may be

in terms of marks or percentage.

On the basis of difficult KRA, Appraiser decide the stretch for

each KPI.

(ii) Competency Skills such as Intelligence, Communicative

Ability, Decisiveness, Human Skills, Teaching Skill, Executive

Skills, Leadership Skills, Negotiation Skills, and Creativity Skills.

(iii) Potential: It shows Employee’s ability to do the work and to take

up higher responsibilities in future.

(iv) Values: It shows how much values of individual match to the

objectives of organization.
COMPARATIVE
ANALYSIS BETWEEN
NTPC AND IOCL FOR
PERFORMANCE
APPRAISAL SYSTEM
 COMPARATIVE ANALYSIS OF PERFORMANCE APPRAISAL

IN 2 PSUs(HIGHER LEVEL)

NTPC IOCL

(i) In the appraisal form the key (i) In the appraisal form activities
result areas are set by discussion & corresponding targets under
of both. each KPA are set.
(ii) Self-assessment & appraisal (ii) Self assessment & Appraisal
assessment are done side by side assessment are done side by side
helps in easy comparison. for easy comparision.
(iii) The constraints faced by the (iii) Self -analysis of appraise on his
appraise are not mentioned in performance considering the
the self appraisal form. unfavourable & informable
factors in self & the work
invironment are done.
(iv) Targets are set after mutual (iv) Targets are set after mutual
agreement by both the appraise agreement by both the appraise
& the appraiser. & the appraiser.
(v) The moderation committee does (v) A form of counseling session
final assessment on basis of that takes into accounts the
overall evaluation & potential strengths, weakness & areas of
assessment. improvement & the appraise do
this feedback.
(vi) Career profile & plan are not (vi) Career profile & plan that takes
considered. account of mobility and
constraints and career analysis.
(vii) Benefits to the organization by (vii) Contributions by the appraise,
the contribution of appraise are its benefits to the organization
not taken account of. are considered.
(viii) Overall assessment is done on (viii) Overall assessment is done by
average of & responses by appraiser, reviewing officer &
reporting reviewing, next higher the countersigning officer on the
authority & basis of his potential for growth.
Countersigning authority.

(ix) Don’t consider the training need (ix) Training needs are not
& the job rotation. identified.
 COMPARATIVE ANALYSIS OF PERFORMANE APPRAISAL

IN 2 PSUs(LOWER LEVEL)

NTPC IOCL
(1) Form consists of 4 parts. (1) Form consists of 6 parts.
 For Appraisee.  Annual Perf. Appraisal.
 For Appraiser/Rep. officer.  Perf. Highlights and
 For reviewing officer and other add.information.
higher authority.  Overall appraisal.
 By Chairman of the  Career profile & Plan.
moderation(counselling)  Councelling.
committee.  General.

(2) Appraise is assessed by Reporting (2) The appraise is assessed on the basis of
Officer only on the basis of 4 factors attributes rated on a 3 point scale. No
viz. job knowledge,cost consciousness, weightage is given to factors.
initiative and communication skill.
Important factors like leadership,
quality and quantity of work,
adaptability, etc., have not considered
at all.Moreover the assessment is
comprehensive as factors are not rated
on a suitable scale.

(3) Targets achieved and other (3) Targets achieved & extra contribution
achievements are considered but the by the appraisee are also considered for
difficulties faced or facilitating appraisal.
resources are ignored all together.

(4) Over all performance and potential of (4) Over all performance & potential of
appraise are reassessed by reviewing, appraise are reassessed by appraiser,
reporting, next higher officer and reviewing officer & the
countersigning officer. countersigning officer.

(5) No career profile and profile and plan (5) Career Profile & Plansheet allows
sheet. appraise to give his own choices for
future assignments i.e. it in a way gives
an opportunity to the appraise to decide
his KPAs.
(6) No comments are given by the rating (6) Any constraints faced by the appraise in
officers for their extreme ratings so case of transfer, etc.,are also considered
doubts that appraise has can’t be so no employee is forced to do a job
solved. which he/she might be unable to do
because of any reason.

(7) The training needs of the appraisee are (7) Councelling is also done so that biasing
not identified so appraisal form can’t be (if any) is reduced to minimum & both
used by the training dept to plan sides get a suitable hearing.
actions.
SWOT ANALYSIS
OF
IOCL
SWOT ANALYSIS OF IOCL:-
The corporation is a big organization and the
Main endeavour for it is to be ahead of the competitors.
SWOT Analysis of the corporation gives the following results:-
Strengths:-
 Wide field network.
 Dealership network to assist in our direct efforts.
 Up-country storage nearer to the market.
 Lower cost of production from old refineries.
 Strength on international trade.
 Seven existing refineries.

Weaknesses:-
 Lack of dedicated organizational set up for support system like
Finance etc.
 Manpower reduction because of downloading at head office, Regional
Offices and field offices.

Opportunities :-
 Liberalized market scenario.
 Lack of so many refineries producing Free Trade Products by other
marketing companies.
 Capability to import and market shortfall products.

Threats:-
 Emerging players like Reliance Petroleum Ltd.,Essar oil and MNCs,etc.
 Dismanting of Administered Price Mechanism.
 Penetration of International giants into marketing.
 Old traditional production techniques.
CONCLUSION

CONCLUSION
From all the above information with the help of which I have been able to make

my summer training project I draw a conclusion that the performance management

system at IOCL has gradually developed over years at IOCL from hand written

records to the compturised management systems which is commonly known as the

e- PMS at the IOCL. This project also shows that the e-PMS policy at IOCL is of a

great importance for the IOCL itself and the employees of the IOCL. It is found

that during the e- PMS policy the employees are assessed on regular basis which

helps to keep a regular check on the employees and by the performance appraisal

methods the employees are assessed only at the end of year which helps them to

complete their goals at last minute time also. I also want to tell that the employees

had a difficulty when this method was introduced in the organization to adapt this

method but later on it made work easy for them as more and more handy records

are not maintained .i would also like to come to the point that the performance

management system at IOCL is better than other PSUs. The performance

management system at IOCL is transparent and clears all the problem of HR

department. Its more sinple to understand the working environment of IOCL than

NTPC because the self assessment procedure of IOCL specifies all the

requirements for the to manage the performance of employees working at IOCL.

It is also seen by the comparison made between IOCL and NTPC that both the

Organizations have similar work environment but IOCL is providing with the

Employees more career oriented work environment which help employees to grow

and perform more tasks as compared to the NTPC. The NTPC rate their employees

on the basis of 4 factors while the IOCL rate their employees on a 3 point scale
which is more easy to understand and rate the performance of each employee on a

similar basis. As the working environment of NTPC says that no career plans are

made by the employees even they are not allowed to make, IOCL contradicts this

activity of NTPC by allowing their employees to make career oriented plans and

plans which are helpful in future so that they provide with employees more vscope

to grow. One more point of difference between IOCL and NTPC is that IOCL

provides their employees with some workshops, training and counsellings which

help them to grow whereas NTPC does not conduct any. By the swot analysis we

got to know that despite of being so powerful in market by possessing strengths

like wide field network , low cost of production and many more still there are some

threats to the PSU like emergence of more and more big companies like Reliance

ltd and lesser share in market but overall IOCL is still the biggest and most

powerful PSU in oil production.