A

STUDY REPORT ON
PERFORMANCE MANAGEMENT SYSTEM
IN
MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE)

Submitted as a partial fulfillment of the award of

Masters
In
Business Administration (2014-15),
Ghaziabad University
Under the guidance of
Manoj Ku. Mishra,
Manager (HRD),
M/S Mc NALLY BHARAT ENGG CO LTD,JAJPUR

Submitted By
NIRANJAN MAHAPATRA

C E R T I F I C A T E
It is certified that this understudy program report entitled A Study On
Performance

Management

System

at

McNally

Bharat

Engineering Company Ltd. (MBE), carried out in partial fulfillment of

the requirement for the master degree in Business Administartion is a
result of genuine research work carried out by

Niranjan Mohapatra, a

student of MBA, under the guidance of Mr. Manoj Kumar Mishra, Manger
(HRD) . No part of this work has been submitted for any other degree or
published in any other form.

Jajpur

(Mr. Manoj Ku Mishra)

Dated.

Manger (HRD),
McNally Bharat
Engineering Company
Ltd.

D E C L AR A T I O N

I Niranjan Mohapatra declare that this piece of dissertation

report

entitled

Effectiveness

Study

Through

Report

On

Organizational

Performance

Management

System at MCNALLY BHARAT ENGINEERING COMPANY LTD.

(MBE) , submitted by me to the Department of Masters in
Business Administration, _____ University, Vanivihar, is of my
own and neither submitted to any other institution or university
nor published at any time before.

( Niranjan Mohapatra )
DEPT OF MBA, GHAZIABAD
UNIVERSITY, UP

ACKNOWLEDGEMENT

It is my proud privilege to express my deep sense of gratitude to

Prof. B.N.Mishra, head of the department of Personnel Management &
Industrial Relations, Ghaziabad University, Uttar Pradesh for his wise
counsel and inspiration to undertake the dissertation work at MCNALLY
BHARAT ENGINEERING COMPANY LTD. (MBE) , Uttar Pradesh for the partial
fulfillment of the course in M-PM&IR.

Also my sincere thanks to the entire faculty and other staff of my

department for their help & co-ordination to me.

I specially want to pay my heartiest gratitude to Mr S.C. Jena,

AGM, HRD, MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE)

for

allowing me to do the project in the organization & also for rendering his
valuable guidance & advice.

I also express my deep sense of appreciation to Mr. Manoj

Mohanty Deputy Manager (HRD), MCNALLY BHARAT ENGINEERING
COMPANY LTD. (MBE) , Bhubaneswar for his special guidance, enthusiastic
assistance & valuable suggestions to bring completeness to my project
work at the organization.

My sincere thanks also goes to all the staff & executive staff of
HRD dept. of MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) , for
their kind co-operation & help in data collection and survey work.
( Niranjan

Mohapatra )
EXAM ROLL NO:-012
DPT. OF MBA
GHAZIABAD UNIVERSITY,
UTTAR PRADESH

CONTENTS
CHAPTER
Chapter-I
Chapter-II

TOPIC

PAGE NO.

Introduction
Theoretical Framework of
Performance Management System

Chapter-III

Organizational

Profile

of

McNally

Bharat

Engineering Company Ltd. (MBE)

Chapter-IV

Performance

Management

System

at

Bharat Engineering Company Ltd. (MBE)

Chapter-V

Data Analysis

Chapter VI

Findings & Suggestions

Chapter-VII

Conclusion
Annexure
Bibliography

McNally

CHAPTER-I
INTRODUCTION

The word MANAGEMENT embraces man all the time.

Peter F. Drucker
Business has always been competitive. Yet the kind of fierce
competition being witnessed now has not been witnessed before. Gone
are the days of monopoly and with the advent of consumerism more and
more corporate houses are beginning to realize that the ultimate
competitive advantages of any business over it rivals will be provided by
the people. Technology is no longer a monopoly nor is availability of
money. But what may be a monopoly would be the people associated with
any business organization. The competitors can duplicate ones business
strategy but not their people.
Ultimately the survival and prosperity of any organization would
depend upon its ability to keep its human resources update and in tune
with the realities of the fast changing business scene. To remain
competitive, industrial personnel have to change their attitude towards
work and perception regarding their organizational culture. Organization
must realize that people are the ultimate competitive advantage and
should understand the importance of human resource. Actually speaking
effective utilization of all resources depends on the utilization of human
resources. This is the essence of Human Resource Development. Effective
utilization of all resources must be evaluated periodically for which a
performance management system is indispensable in the human resource
development. In the context of global approach to HRM, skilled people
become only sustainable competitive advantage. Such a sustainable
competitive advantage must be determined from time to time for which
an continuous and ongoing performance management system is essential.
Since every organization is made up of people, hiring their services,
developing their skills, motivating them to high level of commitment to
the organization are essential to achieve organizational objectives.
Therefore, getting and keeping good people is the first priority for the
success of any organization. Since organization exists to achieve goals

through unified efforts, the degree of success depends on employees

reaching their individual goals through organizational goal is an important
for organizational effectives. The organizational goal is therefore is a
significant part of HRM. That mechanism is known as performance
management, which plays a vital role in dealing with human resource
management problems.
In India, appraisal system, by and large, still remains conventional in
its approach. Despite the multiple techniques and programs, the
employees are not still systematically understood it. Moreover, the
managerial responsibilities and problems are increasing day by along with
the changing times due to the change in the attitude, values (social,
economic, political) in the society as a whole. These factors to a great
extent influence the worker of an organization either in contribution either
in contributing satisfaction or dissatisfaction in work.
Therefore some system is required to know, to what extent it has
been successful in realizing the organizational goal, at the same time the
individual comes to know his relative worth in terms of his performance. In
this regard, it became necessary to examine the relevance of the existing
performance system of an organization and to suggest how better people
can be managed to fulfill the organization.
IMPORTANCE OF STUDY
Since the beginning of industrial revolution and setting up of
personnel departments to cater to the various needs of the organizational,
the personnel practices of the organizations have undergone various
changes.

Significant

changes

in

our

society

brought

about

by

technological advancement, social alternations; economic and political

influence have further affected the personnel or human resource
management scenario. To cope with these changes it is essential for
organization to have right kind of man at right time on the job.
A proper and systematic performance management system in any
organization is essential as it is an add-up in creating and maintaining a
satisfactory level of performance by employees in their jobs. It highlights
needs and opportunities for growth and development of the person; it

helps in taking decision regarding promotions, transfers, and pay increase.

Performance management plays an important role in organization strategy
that of assuring consistent behaviors. It is means for knowing if an
employee behavior is consistent with the overall strategic focus. It is also
a mechanism to reinforce the values and culture of the organization.
We are on the road to integrating our self with market driven
economy internationally. So it becomes almost a necessary precondition
for not only maintaining but also developing our national economy further.
Therefore with change in technology, to integrate our economy to global
scale the human resource is called upon to manage the advanced
technological inputs and other resources towards ensuring growth in
industry, state or nation. To win the active participation of employees and
obtain the optimum resources, all industries should bear in mind that any
industry which tries to delink the growth of an individual from the growth
of the industry can not sustain the growth, hence linking growth of
individual to the growth of the industry will not only sustain growth but will
succeed in achieving higher growth. It is imperative for an organization to
concentrate towards managing the performance of its personnel and
developing

its

human

resources

to

survive.

Hence

performance

management becomes a prime concern of every leading organization.

Therefore
management

modern

system

scientific

focuses

on

and

systematic

improving

performance

performance

through

continuous and ongoing feedback and guidance from reporting officer. It

addresses the growth and career development of employees through
identification of strengths and weaknesses of employees, which leads to
better utilization and development of talents. Performance management
system also serves the purpose of developing better superior-subordinate
relationship based on trust and mutuality. The most important aspect of
performance management is that it is an integrated system where both
vertical and horizontal integration is well addressed. Vertical integration is
achieved by aligning individual and team objectives with business
strategy.

Whereas

performance

horizontal

management

integration

strategies

is

with

achieved
other

by

HRD

aligning
strategies

specifically focusing on competency, reward, performance based culture,

team working, career growth and development etc.
Thus

performance

organizational

management

effectiveness

as

it

has

tremendous

addresses

the

impact

competency

on
and

capability of the people of the organization.

OBJECTIVE OF THE STUDY
The very objective of this dissertation work is to study the existing
performance management system in MCNALLY BHARAT ENGINEERING
COMPANY LTD. (MBE) and the impact of factors like developmental
planning on the effectiveness of the performance management system.
However the scope of the study is concentrated upon the following
points.

To have a brief insight into the existing performance management

of MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) .

To critically access the satisfaction level of different factors of the

existing performance management system.

To access the impact of Developmental Planning on Performance
Management System as the system is all about developmental in

nature.
To recommend necessary change/ modification for making the
performance management system more objective as well as
effective for fulfillment of organizational goals.

HYPOTHESIS:
The formulation of usable hypothesis is of central importance. The
entire study rests upon the potential significance of the hypothesis.

statistical hypothesis is some assumption or statement, which may or may

not be true, about a population or equivalently about the probability
distribution characterizing the given population, which we want to test on
the basis of the evidence from a random sample.
Here the emphasis given to the criterion that a hypothesis should be
related to a body of theory. It is also important to anticipate the
verification problem.

It should be borne in the mind that the acceptance of a statistical

hypothesis is due to insufficient evidence provided by the sample to reject
it and doesnt necessary imply that it is true.
Here the researcher made an attempt to find whether the factors of
performance management system have the significant effect on the
effectiveness of performance management of the organization.
So the null hypothesis taken for this study is:
The

performance

management

system

of

MCNALLY

BHARAT

ENGINEERING COMPANY LTD. (MBE) is independent of the Developmental

Planning of the organization.
To test this hypothesis the researcher used the Chi-Square test for
independence of attributes. The hypothesis is proved in chapter-v.
SCOPE OF THE STUDY
Organization is a social world in miniature. The association of
various

persons,

workers,

supervisors

and

management

creates

relationships. One of the most important roles of a manager or a

supervisor is to motivate encourage, build, train, reinforce and modify
behaviors of the subordinates regularly does this. As concerned, the scope
of the study covers the system of performance management system
followed in MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) . This
study includes the executives and non-executives of HR department of
MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) . I during my study
have collected information about the origin and the history of MCNALLY
BHARAT ENGINEERING COMPANY LTD. (MBE) . I have also studied various
aspects of HR administration of MCNALLY BHARAT ENGINEERING COMPANY
LTD. (MBE) .
METHODOLOGY
It refers to the methods adopted to reach at a conclusion.
a) Data Collection
Data are collected from both the sources, primary and secondary.
Primary Source

The data collected by directly observing employees and asking questions

are called primary data. For the collection of primary data various
questionnaires were prepared depending on the category of personnel
involved, which were to be filled by the respondents. For administering the
questionnaires the researcher was to visit MCNALLY BHARAT ENGINEERING
COMPANY LTD. (MBE) office, Jajpur Road, Jajpur.
Secondary Sources
Secondary data was collected from published and non-published sources.
Published sources included magazines, bulletins, pamphlets etc. nonpublished sources included official files and records, booklets, quarterly
reports, annual reports, journals and the records of the company were also
used. Also unpublished project reports of previous year were used to
understand the meaning of the study properly.
b) Selection of respondents
Only one type of questionnaire was prepared for the completion of the
study. As this study is carried out in HRD dept. of MCNALLY BHARAT
ENGINEERING COMPANY LTD. (MBE) , the respondents are executives.
They were asked about the nature of the current PMS in their organization,
their perception about the performance management system of MCNALLY
BHARAT ENGINEERING COMPANY LTD. (MBE)

and the effectiveness of

their performance management system. They are given short multi choice
questions to give the correct data and their free opinions concerning PMS.
c) Method of sampling
For collection of primary data random sampling and survey method was
used. Employees of various departments are contracted randomly as and
where available. The sample consists of 20 respondents from HRD
department of MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) ,
Bhubaneswar.
d) Data processing and analysis
The data were processed and analyzed manually. The opinions of the
respondents were ascertained by percentage analysis only.
PLAN OF THE STUDY
The entire study and the data collected are presented in six different
chapters for systematic presentation analysis.

Chapter-I:It is the introductory one depicting meaning and concept of

performance management, highlights the significance, objectives,
scope of the study, methodology adopted during the research work,
the plan of the study and the limitations found during the study.
Chapter-II: Deals with conceptual analysis of performance management
system and literature reviews.
Chapter-III: Give pictures of the organization, its historical background,
manpower position, organizational structure and departments.
Chapter-IV: Deals with performance management system followed by
MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) .
Chapter-V: It deals with opinion survey of executives on performance
management system. It shows the tabulation of data collected
through primary sources as well as their calculation, interpretation,
and analysis. Hypothesis testing is also done in this chapter.
Chapter-VI: It deals with the concluding part, which deals with the
summary of the whole research work and suggestion for the
improvement of its performance management system.
And towards the end the annexure
questionnaires and bibliography.

is

there

which

shows

the

LIMITATION OF THE STUDY

1. Un-willingness on the part of the executives is also a major barrier in
collecting information. Collecting information from the respondents
against their fear of being exposed was a tough and critical job.
2. Hesitating attitude and lack of support from the executives of HRD
wing of MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) .
3. As most of the executives of the company did not have enough time
to have a satisfactory and result oriented discussion with the
researcher so as make his/her study more meaningful.
4. Lastly, certain information were not made available to the
researcher on the ground that they were confidential. This created
some hindrances in portraying the true picture of the company.
Despite all these limitation the efforts are made to correct the
necessary data and responses to make the study more reliable and
scientific.

CHAPTER-III
THERORETICAL FRAMEWORK
If you're not measuring talent and monitoring performance
you can't improve profit per employee.

PERFORMANCE MANAGEMENT SYSTEM

The

current

status

of

todays

business

environment

require

organization to be fast, focused and adaptable in order to thrive. Booming

economy has created the buyers market. A successful organization is one
that continually improves and adapts to the changing environment by
rapidly creating and refining the capabilities required for change and
success. The success of an organization is not just a factor of frequent
introduction of new products or use of 1st class technology alone.
Organizations have realized that they must also derive competitive
advantage from the effective management of their people. The growth of
organizations and their people are comprehensively linked and so the
organizations have started focusing on the development of their people in
order to facilitate the organization to grow.
People is that resource of organization whose potential is
unlimited and enormous. Unlike other resources it is likely to be nourished,
focused and developed in a continuous way. Their development ensures
competency, dynamism, motivation and effectiveness to individual, group
and organization. Human Resource Development in the organizational
context is a process by which the employees of organization are helped in
a continuous planned way to acquire or sharpen capabilities required to
perform various functions associated with their present or expected future
roles.
HRD is a process, not merely a set of mechanisms and techniques.
The mechanics and techniques such as performance management,
counseling, training and organizational development interventions are
used to initiate, facilitates and promote this in a continuous process.
Because the process has no limit, the mechanisms may need to be
examined periodically to see whether they are promoting or hindering the
process.
Young professionals today are driven to achieve great heights and
want to make it faster than ever before. They also have the desire and

drive to be the best in the entire industry. Performance feedback

and

prediction play important roles in all human resource management

decisions.

Transformation Performance Appraisal To Performance

Management System:
Performance appraisals, performance reviews, appraisal forms,
whatever you want to call them, let's call them gone. As a stand-alone,
annual

assault,

a performance

appraisal is

universally

disliked

and

avoided. Traditionally performance appraisals have been used as a tool to

access employees performance. Later organizations graduated from
performance

appraisal

to

performance

management.

The

internationalization of human resources introduces cultural differences

regarding job design, performance expectation and role of performance
feedback. In the modern times, the role of a leader in an organization is to
inspire and manage performance.
Now-a-days people in one organization dont want to hear that they
were less than perfect last year. Managers dont want to face the
arguments and diminished morale that can result from the performance
appraisal process.
How many supervisors feel their time is well-spent professionally to
document and provide proof to support their feedback - all year long?
Plus, the most important outputs for the performance appraisal, from each
person's job, may not be defined or measurable in your current work
system. So it will be effective if organization make the appraisal system
one step harder to manage and tie the employee's salary increase to
their numeric rating.
If the true goal of the performance appraisal is

employee

development and organizational improvement, consider moving to a

performance management system. Place the focus on what is really
wanted to be created in your organization - performance management
and development.

Traditional performance review system produces cynicism and

skepticism when the management tries to unveil its latest employee
involvement programs.
The focus of performance management system is progress and
success towards Employee Development and organizational improvement
& goal achievement. The goal of performance is to achieve the company
mission and vision. Almost no one performs, for the organization,
however, if his or her own mission and vision are not accomplished as
well.
Performance appraisal refers to all formal procedures used to
evaluate the contributions and potentials of employees. It is systematic
and periodic evaluation or rating of an employees performance in his
existing job and on his potentialities for taking up greater responsibilities.
P.A was traditionally used as a mechanism of controlling employees
through salary administration, reward administration, promotion and
disciplinary action.
Performance management became popular as a total quality
management programs are emphasized using all of the management tools
including performance appraisal to ensure achievement of performance
goals. Tools such as reward system, job design, leadership and training
ware placed along with performance appraisal as a part of comprehensive
approach to manage performance.
Performance management system is a strategic and integrated
approach to deliver sustained success to organization by improving the
performance of the people who work with them also developing the
capabilities of the team and individual performers. It is the whole work
system that begins when a job is defined as needed.
To bring performance orientation, organizations should focus on PMS
than on the PA systems. This is where the PMS becomes the need of the
hour especially for those organizations, which want to create and sustain
performance culture.

The essential reason for shifting to performance management

systems is to drive performance among individuals across organizations
and transform them to performance-oriented organizations.

Meaning And Definition Of Performance Management

System:
Performance management system is the logical process by which an
organization involves its employees, individuals and members of a group
in improving organizational effectiveness in the accomplishment of
agency mission and goal.
Performance management system is the process that firmly focuses
on achieving the results and accomplishing the goal of the organization.
Performance management sounds a wake-up call to employees and
managers to improve their performance continuously and remove barriers
for success. Organizations intending to carve an edge in the marketplace
must develop and deploy effective Performance management system that
motivate and stimulate the employees to do the right things and do
them right.
The below figure shows how the companys mission is achieved
through the continuous development of human resources through ongoing
performance management system.

Susan

Heathfield,

Management

Consultant,

defines

Performance management as: The processes of creating a work

environment or setting in which people are enabled to perform to the best
of their abilities. Performance management is a whole work system that
begins when a job is defined as needed. It ends when an employee leaves
your organization. According to this definition, PMS involves creating work
environments for employees success rather than setting a tight a tight
control system as many managers would believe.
Its also true that PMS is an accountability system. Patricia Davis
and Robert Rogers, two performance management specialists, say that
a PMS shows everyone from senior executives to front line employees
what business results they are accountable for and sets expectations for
how they should go about achieving results. According to them to have a
efficient PMS, organizational leaders, particularly senior executives, have
to define the organizations priorities and clearly communicate those to all
organizational members. The function of strategic priorities is to inform
everyone in the organization what are the action-oriented targets on
which the organization must focus and move towards.
From the above two definitions we can conclude that a PMS requires
a clear definition of the organizational vision, which is communicated to all
members of organization in the context of a work environment where
everyone knows what is expected in terms of performance , and people
are enabled to perform to their best. From this perspective PMS is more of
a motivational tool than a control mechanism.
According to T.V. Rao, Performance management system (PMS) is
the heart of any " people management " process in organization.
Organizations exist to perform. If people do not perform organizations
don't survive. If people perform at their peak level organization can
compete and create waves. According to him Performance management
systems if properly designed and implemented can change the course of
growth and pace of impact of organizations. In the past organizations as

well as the HR function have wasted a lot of time by wrongly focusing on

performance appraisals rather than performance management.
According to him PMS involves enhancing performance of:

Individuals
Dyads
Teams and SBUs
Entire Organization
To T.V. Rao Performance Management means

Identifying the parameters of performance and stating them very

clearly
Setting performance standards
Planning in participative ways where appropriate, performance of all

constituents
Identifying

contribute/hinder to performance
Planning performance development activities
Creating ownership
Recognizing and promoting performance culture
A

competencies

Performance

and

Management

competency

System in

gaps

which

that

employee

performance can be directed, monitored, and refined with SMART

objectives for the organization and the individual which have been clearly
communicated and agreed is essential to any organization or business
that aims for continuous improvement.
SMART Objectives stands for :

Specific

Measurable

Appropriate

Relevant

Timed

Performance

management

is

the

process

of

creating

work

environment or setting in which people are enabled to perform to the best

of their abilities. Performance management is a whole work system that
begins when a job is defined as needed. It ends when an employee leaves

your organization. Many writers and consultants are using the term
"performance management" as a substitute for the traditional appraisal
system.

But in careful usage, in this broader work system context

performance management is the larger domain and includes performance

appraisal.
The goal of performance is to achieve the company mission and vision.
Almost no one performs, for the organization, however, if his or her own
mission and vision are not accomplished as well.
As Fred Nickols, Senior Consultant with the Distance Learning
Company, says, "The blunt truth is that, if they have any work objectives
at all, most people set their own. This is the era of knowledge work and
the knowledge worker " Many so-called "bosses" are in no position to set
work objectives, to monitor their accomplishment, or to supervise their
pursuit.
The work, especially at the task level, is in the hands and the heads of
the workers. To be sure, a manager could formulate goals and objectives
having to do with improvement in work processes and the like, but if these
must be left to the workers to realize, who needs the manager? An even
better question is "Who needs work objectives?"
An effective performance management system sets new employees up
to succeed, so they can help your organization succeed. An effective
performance management system provides enough guidance so people
understand what is expected of them. It provides enough flexibility and
wiggle room so that individual creativity and strengths are nurtured. It
provides enough control so that people understand what the organization
is trying to accomplish.
The task of management in this new world of work is to enable and
elicit employee contributions of value to the organization. To continue with
a system designed to exact and enforce compliance is folly."
Objectives Of Performance Management System :
To provide a framework for systematic planning of Performance
Objectives at the beginning of the year.

 To accomplish the overall organization vision and mission by linking

individual performance to companys objective.
To cascade companys strategic goal to individual level.
To ensure an objective and scientific evaluation of employee
performance.
To promote professional excellence.
To identify gaps in performance and take necessary actions to
ensure the achievement of organizational and individual goals.
To encourage two-way communication between the executives and
employees and bring about transparency in the performance
assessment process.
Elucidate tasks, goals, responsibilities, priorities and expectations.
To evaluate the potential of the executives to assume higher
responsibilities in the organization.
To motivate and improve the performance of the individuals as well
as that of their organization.
To translate future skill requirements of the organization into
individual development plans.
Recognize quality performance and linking performance with reward
and incentives system.
Identify and resolve performance problems.
To define a proper career planning process.
To provide inputs for administrative decisions such as promotions,
succession and strategic planning, and pay for performance.
To facilitate fulfillment of individual aspiration.
Performance Management is a process, not an event, which
operates as a part of a continuous business planning cycle and is an
integral part of the management process. It operates in a holistic mode,
encompassing each and every aspect of the organization. Thus the
primary objective should be to build a culture of high standards and
supreme quality of service as part of the organization.

Components Of Performance Management System

Performance

management

is

the

practice

of

actively

using

performance data to improve the public's health. This practice involves

strategic use of performance measures and standards to establish

performance targets and goals, to prioritize and allocate resources, to

inform managers about needed adjustments or changes in policy or
program directions to meet goals, to frame reports on the success in
meeting performance goals, and to improve the quality of public health
practice.
Performance Management components include:
Performance Standards - establishment of organizational or
system performance standards, targets and goals and relevant indicators
to improve public health practice.
Performance Measures - application and use of performance
indicators and measures
Reporting of Progress - documentation and reporting of progress
in meeting standards and targets and sharing of such information through
feedback
Quality Improvement - establishment of a program or process to
manage change and achieve quality improvement in public health
policies, programs or infrastructure based on performance standards,
measurements and reports.
A Performance Management System is the continuous use of all the
above practices so that they are integrated into the organization's core
operations. Performance management can be carried out at multiple
levels, including the program, organization, community, and state levels.

The Performance Management System Process Flow

The PM process is employed in communicating the organizational
plans, emphasizing on individual employee responsibility for meeting
those targets and for assessing and comparing the individual and
organizational performance results.
The process involves:

Performance planning

Monitoring employee performance

Employee development

Rating/evaluating employee performance

Recognizing/rewarding

Process of Employee Performance Management

Source:www.opm.gov/perform.overview
Planning:
Planning is the process of setting organizational goals, stating
performance expectations and communicating those to the employees.
Organizational goals are established during the strategic planning stage.
At this stage, managers define the expectations, objectives and
priorities which employees have to work on. Performance management is
the process that aims at translating these lofty visions and objectives into
concrete results in terms of quality and quantity by delivering products
and services to the society.
Goals mutually set and accepted by the manager and the
employees should be SMART-specific, measurable, acceptable, reliable,
and achievable. Clear expectations leave no room for confusion and
employees get involved in their job immediately.
The planning process lays down a clear set of standards that is
measurable, understandable, verifiable, equitable and achievable against
which performance will be judged.
Monitoring performance:
Monitoring is the process of consistent tracking of performance and
providing an ongoing feedback and guidance to the employees and work
groups on their progress toward their goals.

Conducting

regular

progress

reviews,

comparing

their

actual

performance against predetermining standards, provides an opportunity

for employees to make changes when their performance falls short of
expectations.
Continuous observations and monitoring can detect unacceptable
performance and address performance problems at every stage. Periodic
meeting between the managers and the employees help in resolving
issues before they become too big to handle. This leads to better
reliability and ensures better results.
Developing Performance:
Employee performance has to be evaluated with the perspective of
increasing the capacity to perform. All the shortcoming and performance
deficiencies can be set right through training programs and exercises.
Providing sample developmental opportunities enhance competencies and
help employees to update themselves to meet the rising demands of the
job.
The matrix based on potential performance model (below) shows
the classification of employees into Stars, Backbone, Problem Children and
Icebergs.
Performance Matrix
High performance

High performance

Low potential

High potential

Backbone/Workhorses
Low performance

Super Stars
Low performance

Low potential

High potential

Icebergs/Dead Wood
Problem Children
Source: www.businessballs.com

During the performance developing stage, if the performance

problem realized, then the Problem Children who have high potential, but
perform below their potential, can be helped to excel to their full potential.
If the work done by the problem children is of unacceptable quality and

full of defects, then they can be provided direction and training to reduce
such factors.
The icebergs (those employees whose potential and performance
are rated low) can be helped to discover their hidden potentials or
improve their capabilities, identify fitting roles and provide direction to
enhance their performance. Problems can be resolved through counseling
and non-threatening discussions for the poor performance through specific
examples.
Thus Problem Child and Ice-bergs can be helped to upgrade their
performance to become Workhorse and Stars.
This increases the productivity of an organization by providing
information on the importance of evaluating and addressing employee
development.
Rating of performance:
This refers to evaluating employee or group performance against
the elements and standard in an employees performance plan and
assigning a summary rating based on the procedures included in the
performance system.
It is based on work performed during an entire appraisal period
under consideration. This will ultimately result in the fulfillment of the
objectives for which the Performance Management System (PMS) is
created.
When the performance does not meet the desired performance
standards, then plans are developed to address the gaps.
Rewarding performance/Recognition:
A PMS has to duly acknowledge good performance by appropriate
reward systems in terms of monetary benefits and promotions. Rewarding
means recognizing employees, individually and as a group, for their
performance and acknowledging their contributions.
When good performance is not recognized, it acts as a demotivator.
Hence, good performance should be rewarded and bad performance must
be admonished appropriately.

The underlying principle of effective PMS is to encourage desired

behavior by rewards and control undesirable behavior.
Effective management of PMS requires that each component of the
process is well taken care of. Goals are set and work is meticulously
planned, progress is accurately measured, frequent feedback is provided
and steps are taken to reward and recognize good performance.
PROBLEMS In PMS:
Author Gabris and Michell have termed the employee performance
as Mathew Effect-wherein the employee keeps receiving same results
year after year, leading to self-fulfilling error. Thus, those who tend to
perform well continue to do well and those who do not continue to be low
on performance.
Personal biases also influence the process, leading to unfair and
inconsistent appraisal of performance, especially if such evaluations are
based on a few isolated events rather than on the entire evaluation
period.
Some managers tend to be lenient by giving liberal rating while
some others are too harsh in giving good ratings. Lack of follow-up,
unfamiliarity with the employees potentials etc., are some problems of
the PMS.
Hence, companies have to create a PMS that is well developed and
see that it leads to desirable results.

Who will be involved in Performance Management?

Supervisors
Peers
Subordinates
HR managers
Self rating
Team members
Customers
Consultants
Suppliers

SUPERVISORS

The general practice is that immediate supervisors manage the

performance

which

in

turn,

is

reviewed

by

the

head

of

the

Department/manager. The supervisors are responsible to managing their

and they have the opportunity to observe, direct and control the
subordinates regularly. Moreover they are accountable for the successful
performance of their subordinates.

PEERS
Managing performance of an employee by his or her colleagues can
be affected in predicting future management success because peer rating
are quite accurate in predicting which officer should be promoted and who
should not. Peer appraisal may be reliable if the work group is stable over
a reasonably and perform work with frequent interaction.

SUBORDINATES
The concept of having superiors rated by subordinates is prevalent
in most of the organizations, especially in developed countries. For
instance in most of the Universities of US, students evaluate a professors
performance in the classroom. This method is also called as upward
feedback can be used at other places too provided there exists cordial
superior subordinate relationships.
HR MANAGER
The HR managers may advise the supervisor while evaluating their
subordinates stressing the need for evidence for making specific appraisal
judgments and comparing a particular subordinates evaluation with those
of others.
SELF RATING

Employees self rating of performance are also sometimes needed. If

the employees understand the objectives they are expected to achieve
and the standards by which they are to be evaluated, they are largely, in
the best position to appraise their own performance. The employees who
appraise themselves are highly motivated.
TEAM MEMBERS
CONSULTANTS
SUPPLIERS
CONSULTANTS
As consultants are specially trained and they observe that the
employee at work place for long time sometimes, consultants may be
engaged for managing the performance of employees.
WHEN PERFORMANCE MANAGEMENT IS DONE
Generally performance management is not an event but an ongoing
process. Informally it is conducted whenever or personal manager feel it is
necessary. However systematically it is conducted on a regular basis may
be semi annually or annually.

Effective Performance Management System:

Performance management system is the systematic process of
standardizing the effectiveness of the organization, which therefore
enables them to aim and achieve the goals of the organization, with the
help of highly skilled and committed employees. Employee performance
management not only contributes in planning work, setting goals and
monitor performance, it also periodically evaluates the skill of the
employees and rewards them with compensations and other bonus
schemes.
There is one potential determinant of performance management
system being effective, which has received less attention; how tightly the
results of PMS are tied to significant rewards.
An effective PMS process aims to:

Communicate organizational goals so that they can be easily

understood ;

Align individual employee objectives with the organizations vision,

goals and strategic plans;

Clearly communication employee functions and responsibilities ;
Focus on setting clear performance objectives and expectations
through the use of actions, behaviors and results based on accurate

measures which are reliable, valid and specific;

It provides required training along with the suitable compensation

and reward schemes to the members of the organization;

Increases motivation to perform to the best of ones ability;
Gain new insight into employee performance and employee self-

esteem by providing clear developmental plans;

Distribute rewards on a credible and acceptable basis; and
Fosters excellence in performance by encouraging respect for one
another.
Based on their research, the Gallup organization suggests there

are

four

disciplines

necessary

for

effective

performance

management:

Hold all employees accountable for their local performance

outcomes.
Teach all employees to identify, deploy and develop their strengths.
Align all performance appraisal and review systems around

identifying, deploying and developing employees strengths.

Design and build each role to create world-class performers in the
role.

In many ways there are no secrets to implementing effective performance

management. Performance management, if implemented effectively
ensures that both employees and managers remain both productive and
motivated.
It can therefore summarize that highly motivated and committed
human resource of an organization depends upon the effective ways of
managing their performance. In order to unite the goals of employees with
the employees with the goals of the organization, their performance
should be accordingly appraised and they should be given the requires
training to enhance their skills for the same. Therefore performance
management is still the holy grail which contains key to the success of
the organization.

A performance management system will only be effective if

it:

Reward behavior that improves the employees performance

Address behavior or incompetence that results in poor performance

by discipline, development, or redundancy.

Is integrating into a cycle of planning

and

performance

measurement that extends from corporate, through business unit

planning down to individual performance agreements

Objectively measures performance. Objectivity can be achieved by
setting competency standards or goals for various levels of
performance, explaining how each will be measured and committing
to rewards or discipline for each standard during performance
planning. Appraisal then becomes a simple and unemotional process

based on objective criteria.

Is trusted to be fair. Employees need to be reassured that the
system will be used equitably across their organization. Achieve this
by negotiating use of the system into an Enterprise Agreement or
individual performance contracts and then making implementation

of the system as transparent as possible.

Both managers and employees see that they something to run using
the system. Correct implementation sometimes requires managers
to change the way they currently work. Good design will ensure
ease of operation and managers should then be held accountable
for using the system through their own performance contracts.
Performance management system is an attempt to establish a clear

understanding of what the organization strives to achieve and streamline

the combined efforts of all the employees so that the company improves
its effectiveness and competitiveness in the marketplace. Its a systematic
alignment of employees objectives, skills, abilities and efforts with the
organizations strategic objectives to create a high-performance culture.
The emphasis here on improving, learning and developing the career
potential employees to achieve overall business objectives. Performance
management system focuses on ensuring that all the units of an

organization are working efficiently to get the best out of everyone for
obtaining organizational results.

CHAPTER-III
ORGANISATION
OVERVIEW

INTRODUCTION
The Indian construction sector has rapidly grown in the last few decades and has
consistently been deemed important for socio-economic development in a country where
infrastructure growth remains a priority. Construction sector is understood to be the second
largest sector after agriculture, with steady growth of 8%-10% per annum. Doloi, Iyer and
Rentala, (2012) outline that this sector has rapidly accelerated in the last five years, having
generated 31.46 million jobs (2008-2009) with a potential to add another 2.5 million jobs in
the coming years; the level of sophistication, inconsistent performance, inconsistent quality
and lack of talented manpower remains areas of key concerns for the sector. Their study
highlights that in terms of project performance in this sector, India depicts the worst schedule
overrun (55% of 1 Previous studies in the HRM context and PMS context have been generic
with focus across Indian industries. Refer studies by (Amba-Rao, 1994, 2000), (Budhwar et
al., 1997, 2001, 2003, 2004), (Rao S.A., 2007) EFFECTIVENESS OF PMS IN THE
INDIAN CONSTRUCTION SECTOR actual schedule). Their study details a report by
MOSPI (Ministry of Statistics and Project Implementation) that found 309 projects having
cost overruns and 474 projects being behind schedule out of the total 951 infrastructure
projects being monitored by the ministry.
The main characteristic feature of construction industry is a mix of organized and
unorganized players in all sub sectors right from construction workers to Supervisors,
Contractors and material manufactures / suppliers etc. This being a labor intensive industry, a
lack of good quality manpower and shortages of critical skill sets at various junctures of the
project can serve to increase project costs, cause delays and reduce the credibility of the
project owners. Moreover, manpower planning becomes ineffective and causes snags in the
project execution.
Construction project environment is understood to be quite different from other
manufacturing/production oriented environments. A key aspect that differentiates this
industry is its unpredictability relative to static production industries (Loosemore et al.,
2003). That is, the construction project environment is characterized by groups of individuals
working together for short periods of time before being disbanded and redeployed elsewhere
within the organization (Atkins and Gilbert, 2003). Projects also involve undertaking a range
of work activities for a finite period with one or more defined objectives (Turner and Muller,
2003). This short-term interaction presents one of the greatest challenges to the individuals
managing performance within it (Turner and Muller, 2003).

Company Overview
McNally Bharat Engineering Company Ltd. (MBE) is one of the leading Engineering
Companies in India engaged in providing turnkey solutions in the areas of Power, Steel,
Aluminum, Material Handling, Mineral Beneficiation, Pyro processing, Pneumatic Handling
of powdered materials including fly ash handling and high concentrate disposal, coal
washing, Port cranes, Cement, Oil & Gas, civic and industrial water supply etc. Over 350
plants have been constructed on turnkey basis by MBE till date. In 2011 company celebrated
Golden Anniversary year (1961 - 2011).
The Company, headquartered at Kolkata, is a part of the Williamson Magor Group.

PERFORMANCE MANAGEMENT IN MCNALLY

BHARAT ENGINEERING COMPANY LTD. (MBE)

The

success

of

an

organization

depends

on

the

ultimate

performance of its employees, developing the skills and abilities to

achieve

the

organizational

goals

and

provide

maximum

possible

satisfaction to the employees, cover major areas of responsibility of HRD

department. The focus of performance management system is progress
and

success

towards

Employee

Development and

organizational

improvement & goal achievement. The goal of performance is to achieve

the company mission and vision. Performance management became
popular as a total quality management programs are emphasized using all
of the management tools including performance appraisal to ensure
achievement of performance goals.
Performance appraisal refers to all formal procedures used to
evaluate the contributions and potentials of employees. It is systematic
and periodic evaluation or rating of an employees performance in his
existing job and on his potentialities for taking up greater responsibilities.
The PA system serves as an useful tool for development of
employees but its effectiveness depends on the importance placed on it.
The system works when appraisals are factual, honest and they
encourage employees to set and achieve both work and personal
objectives. It is therefore essential that the appraisal should be an honest
reflection of the employees abilities, attitude, output and discipline.
Performance appraisal process at MCNALLY BHARAT ENGINEERING
COMPANY LTD. (MBE) normally goes through 2 processes.
I.

Executive performance appraisal

II.

Non-executive performance appraisal

EMPLOYEES PERFORMANCE APPRAISAL SYSTEM

Employees

are key

to

any

organization.

Without

competent

employees no organization is accepted to hold a pace of provisions other

than valuable resources such as capital, technology etc. Performance
appraisal system is essential for assessment of the performance of both
executive and non-executive as well as to plan out other development in
an

effective

management

system.

Though

MCNALLY

BHARAT

ENGINEERING COMPANY LTD. (MBE) is a successful and profit earning

organization, its success is devoted to its employees. It has introduced the

performance appraisal system with a view the organizational success
depends on the commitment and contribution of the employees. It shall
be the policy of the company to introduce an open appraisal system for
the officers which will be applied in a fair and equitable manner and
designed to help.
Executive performance appraisal
Executive appraisal system is a 3 step based process like Selfappraisal, , Appraisers Review and Reviewers Review. The PMS of MBE is
an ERP based system. Executive performance appraisal system in
MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) has certain
objectives.
To integrate individual and organizational goals through a system of
performance assessment which is linked to the achievement of
organization
To ensure an objective assessment of the executives performance
against mutually agreed target well in advance
To provide individual executives with continuous and periodic
feedback on their performance and identify their developmental
needs
To identify and develop the potential of executive for enhanced
performance
To identify impediments to performance and action needed to
remove them
PMS Flow Chart, 2015 of MCNALLY BHARAT ENGINEERING
COMPANY LTD. (MBE)

Each employee of the company will be apprised during the month of

February, March or April. The appraisal is undertaken by the Controlling
officer. The appraisal system will evolve a proactive review, by the officer
concerned and his controlling officer, of the work related activities and
standards of performance relating to both the job and the behavior of the
officer. In doing so the appraisal process will provide an overall
assessment of each employees performance.
LEVEL OF REPORTING OFFICER, REVIEWING OFFICER AND
ACCEPTING OFFICER
Note:

1. ordinarily, the reporting officer shall be the immediate senior

officer under whom an officer is working.
2. Where there is no reviewing officer, the performance appraisal
form may be sent to the accepting officer.

Form Description Of Appraisal Process

Part-I (To be filled up by the appraise)
Task and Target assigned for the year
Part-II (To be filled up by the Reporting Officer/Appraiser)
A. Task Accomplishment
B. Work Performance and Managerial Trait appraisal
C. Overall evaluation

Part-III (To be filled up by the Reviewing Officer)

A. Performance review and the steps undertaken by the reviewing
officer to improve the performance of the appraise
B. Overall evaluation (to be filled by reviewing officer)
C. Overall evaluation (to be filled up by Accepting Officer)
Part-IV (Statement for Training and Development Needs)

CHAPTER-V
ANALYSIS OF DATA

In order to know the satisfaction of employees towards the current

Performance Management System in MCNALLY BHARAT ENGINEERING
COMPANY LTD. (MBE) a survey was made with the help of structured
questionnaires. Questionnaires were distributed in the basis of single
random sampling among the employees. However, only 15 schedules
were sorted out for final analysis. The response with regard to question
schedule and personal interview with the employees were analyzed. The
analysis of these data collected is presented in the following tables.

1. Performance management system is necessary for MCNALLY BHARAT

ENGINEERING COMPANY LTD. (MBE)?
Options
a. Strongly
Agree
b. Agree
c. Neutral
d. Disagree
e. Strongly
disagree
Total

Response in
No.

Response in %

19
6
3
2
0
30

63.33
20
10
6.67
0
100

2. Your organization operate a formal performance management system?

Options
a. Strongly
Agree
b. Agree
c. Neutral
d. Disagree
e. Strongly
disagree
Total

Response in
No.
16
6
4
3
1
30

Response in %
54
20
13
10
3
100

3. If yes, which of the following groups of employees do these processes applies?

Options
a.
b.
c.
d.
e.

Senior Managers
Managers
Technical/Clerical
Professional
No idea

Total

Response in Response
No.
in %
2
3
8
7
14
27
5
46
1
17
30
100

4. Are the following processes a part of your performance management system?

Options
a. Coaching
b. Training & Development
c. Career
Mgt.
&
Development
d. Succession planning
e. No idea
Total

Response Response in
in No.
%
3
7
16
7 10
2
53
2
23
30
7
100

5. Please indicate which of the following methods of performance appraisal form a part of
your system?
Options
a.
b.
c.
d.

Graphic Rating Scales

Ranking Method
Self Appraisal
Critical
Incident
Assessment
e. All of the above

Satisfactions

of

employees

Respons Response
e in No. in %
2
7
3
10
2
7
1
3
22
73

with

the

current

Performance

Management System of Mcnally Bharat Engineering Company Ltd.

(MBE) ?
To measure the satisfaction of employees towards the current
performance system and its factors we have used the 5 point Likerrt scale.
Highly satisfactory:
5
Satisfactory:
4
Undecided:
3
Dissatisfied:
2
Highly dissatisfied:
1

Highly

Sl

Satisfacto

No

ry

Satisfact
ory

Neutral

Dissatisfact

Performance
1

2
3
4
5
6
7

Planning/ Goal
Setting
Performance
Evaluation
Development
Planning
360- degree
feedback
Coaching &/or
Mentoring
Training
Leadership

Development
Rewards

Discipline
Effectiveness of

10

current Performance
Management
System

The responses of 30 respondents are given below.

ory

Highly
Dissatisfact
ory

4
5
4

5
4
4

5
5
4

4
4
4
3
5
5
4
2
4
4
4
4
3

4
4
3
3
4
4
3
2
3
4
3
3
3

4
4
4
3
4
5
5
3
5
4
5
3
4

4
4
4
3
5
5
4
2
5
4
3
3
2

5
4
5
4
5
4
4
3
5
5
4
5
5

R23

R24

R25

R26

R27

3
4
5
4
4
3
3

3
4
5
4
4
2
3

3
4
5
5
4
3
3

3
4
4
4
4
3
3

1
4
5
4
5
2
2

3
4
5
4
4
3
4

4
4
5
5
5
4
3

R28

R29

R30

121

124

119

126

123

125

106

122

121

136

Respondents

Discip
line

Effective
ness of
current
Performa
nce
Managem
ent
System

Perform
ance
Planning

Perform
ance
Evaluati
on

Developm
ent
Planning

360degree
feedback

Coaching
&/or
Mentoring

Training

Leaders
hip
Develop
ment

R1

R2

R3

5
5
4

5
5
4

5
5
4

3
4
4

R4

R5

R6

R7

R8

R9

R10

R11

R12

R13

R14

R15

R16

R17

4
4
4
4
5
5
4
3
5
4
4
3
3

4
4
4
3
5
5
4
2
5
4
4
3
3

R18

R19

R20

R21

R22

Rewards

In the following the Means are analyzed and interpreted categorically to find out
the level of satisfaction and effectiveness of Performance Management
System in the organisation.

Sl No

Questions

Total Points

Mean

Performance Planning/ Goal

121

4.03

Setting
Performance
Evaluation

124

4.13

Development Planning

119

3.97

360- degree feedback

126

4.2

Coaching &/or Mentoring

123

4.1

Training

125

4.17

Leadership Development

106

3.53

Rewards

122

4.06

Discipline

121

4.03

10

Effectiveness of current

136

4.53

Performance Management
System Total

40.75

As we know the highest scale is 5 (Highly satisfactory) and satisfaction

level is 4, so mean falls between 3.5 to 4.5 scale shows that people
are satisfied , means

more than 4.5 shows that some are highly

satisfied. As from the above table, we can see that overall

Performance Management System of McNally Bharat Engineering
Company Ltd. is satisfactory. The employees are satisfied with the
Performance Planning & evaluation, 360 degree feedback, training,
reward systems of the company and a little more satisfied with the
Effectiveness of the current performance Management System.
Where the employees are satisfied with the above mentioned
facilities,

they

Developmental

are

not

planning,

satisfied
Leadership

or

undecided

Development,

about

the

Coaching

mentoring and Discipline areas, which are the Key areas of a

developmental process and which are need to be focused for a more
effective Performance Management System.

Testing of hypothesis:
As collected from the secondary data and primary data, it is clear that
MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) is using to establish
a relationship between the Developmental Planning towards performance
management and its effect on the overall performance Management
System of the organization, the researcher had used the responses of the
following 2 questions:
i)
ii)

Whether the Developmental planning of the organization is

satisfactory
Whether Performance Management of the organization is
effective.

Define T-Test:
The t-test is our simplest and mostly used parametric test for statistical
work. The value of t describes the magnitude of the discrepancy
between theory and observation. It applies only in case of small
sample(s) when population variance is unknown.
DEGREE OF FREEDOM:
In Contingency table, degree of freedom is calculated by number of
frequencies. The number of frequencies of all columns but one (n-1)
can be assigned arbitrarily and so the numbers of degrees of freedom
= (n-1)
Level of Significance: 5%
5% - This means that the probability of accepting a true hypothesis is
95%
HYPOTHESIS - I
H0- There is no significant relation between the Developmental Planning of
PMS and the effectiveness of the Performance Management System
of the organization.
H1- There is significant relation between the Developmental Planning of
PMS and the effectiveness of the Performance Management System
of the organization.

T-Test Table:
Hypothesis Variables
Developmental

Df

0.057

29

@5%

Level
Significance

Planning

with Effectiveness of
Performance
Management System

2.045

of

F-Distribution for 5% level

Accepted

-2.045

t <5% Rejected

+2.045

0.057

t >5% Rejected

Inference:
t at 5% level of significance 29 df = 2.045
Here, Cal t (0.057) < Tab t (2.045) @ 5%
Hence, Null Hypothesis (H0) is accepted.
Statement:
Therefore, it is clear that there is no such significant relation between the
Developmental Planning and effectiveness of Performance
Management System in the organization. Except the developmental
planning other factors like Performance planning, evaluation,
Coaching and Training like factors are mostly responsible for the
effective performance management system of the organization.

CHAPTER-VI
SUGGESTIONS
AND
CONCLUSION

FINDINGS FROM THE STUDY

In the foregoing chapter we have discussed different components

relating

to

the

performance

management

in

MCNALLY

BHARAT

ENGINEERING COMPANY LTD. (MBE) . In this chapter, an attempt have

been made to give an integrative or comparative picture of MCNALLY
BHARAT ENGINEERING COMPANY LTD. (MBE) on the basis of the analysis
and some suggestions are made by the researcher for improving the
existing PMS in MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) and
to overcome the barriers relating to Performance management.
Findings of this survey are as follows:

From the study it is found that there is no formal PMS exists in

MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) . According to
most executives of HRD dept. of MCNALLY BHARAT ENGINEERING
COMPANY LTD. (MBE)

a formal performance management is very

much necessary for the organizational effectiveness. The existing

performance

management

system

ENGINEERING COMPANY LTD. (MBE)

of

MCNALLY

BHARAT

needs radical changes to

promote competitiveness.
The status of performance planning and development is inadequate

in MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) .

Performance management in MCNALLY BHARAT ENGINEERING
COMPANY LTD. (MBE)
training

and

only includes performance appraisal and

development

process.

No

formal

performance

counseling or focused career management system is carried out in

MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) .

Majority of the respondents showed their dissatisfaction towards

performance assessment system.

PMS in MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE)

involves a performance appraisal review form.

There is no performance linked pay system in MCNALLY BHARAT

ENGINEERING COMPANY LTD. (MBE) .

It has been found out that the self-appraisal system as viewed by
the executives is far behind of its purpose.

According to the respondents the goal setting should be done by the

mutual consent of both superior (appraiser) and the subordinate

(appraise).
From study it is seen that PMS in MCNALLY BHARAT ENGINEERING
COMPANY LTD. (MBE) contributes little or no value in improving the

organizational performance and effectiveness.

From study it is evident that lack of clarity

and

lack

of

communication of plans & objectives of the organization as well as

PMS, are the major reasons of failure of PMS in MCNALLY BHARAT
ENGINEERING COMPANY LTD. (MBE) .
CONCLUSION
Performance

Management

System

at

MCNALLY

BHARAT

ENGINEERING COMPANY LTD. (MBE) has been in vogue since its inception.
So, its high time to introduce a new policy by this organisation. The
procedure laid down in this system is quite clear to the concerned persons
who have been given the job to measure the performance of various
individuals. But yet the persons (Executive) at the various levels for whom
this policy has been implemented are not well aware of the procedure and
policies followed by this system.
This policy is capable of identifying the individuals performance and
is able to give information to the management relating to an individual
performance efficiency, his promotion criterion and the performance
deficiency and means and ways to minimize his deficiency and take
corrective measures to develop the skills of individuals which is required
for the future needs of the organisation.
Apart from the above merits, the management could not implement
this system in its true spirit, for it been new for the organisation, yet they
are working hard to derive benefits from this. The day this PMS is carried
on as per stipulated procedures and policies then it is definitely going to
earn fruitful results for the company (i.e. MCNALLY BHARAT ENGINEERING
COMPANY LTD. (MBE) ) and will garnish the entire organisation with its
presence

SUGGESTIONS

The opinion survey gives a brief insight into study of performance

management in MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) .
After a detailed study and analysis of the PM in MCNALLY BHARAT
ENGINEERING COMPANY LTD. (MBE) , I would like to put forth the following
suggestions to the company:
The

very

purpose

of

establishing

formal

performance

management system in MCNALLY BHARAT ENGINEERING COMPANY

LTD. (MBE)

and its objectives should be communicated down

properly to its all levels. It should be accepted in its true sense, it

means the policy should be followed as per stipulated method.
Performance planning and development plans should be carried out
purposefully.
Performance appraisal should be more specific and transparent.
The purpose of the appraisal system should not be only promotion
but should be developmental.
The task and target should given to the appraise in time and must
be decided through mutual consent of both the appraiser and
appraise.
Cross Team Appraisal should be followed to eliminate the biasness
from the Performance Management System.
The performance review meeting should be conducted periodically.
Proper evaluation process should be carried out and biasness on
part of the appraiser should be avoided.
Performance

Feedback

is

given

to

the

executives

through

counseling, Training, Coaching, Transfer to other department etc.

Feedback should be given regularly so that individuals could rectify
their performance deficiency within the short period and not after
one assessment year.
Proper attention should be given to developmental plans.
Performance counseling should be given more attention.
It needs more exercises both on the part of appraiser and appraises
to make the self-appraisal process more effective.
Career management and development and performance linked pay
must be included as apart of the PMS of MCNALLY BHARAT
ENGINEERING COMPANY LTD. (MBE) . Focus should be more on
training needs, responsibility change over and career growth.

 Appraisal system must be linked to reward system to motivate

employees

towards

better

performance

of

individual

and of

organization.
Organization should practice a formal PRP system.
A committee should be formed for reviewing the performance of
executives starting from EI and above.
It is necessary for the system to establish the way by which the
executives (appraisee) and his boss (appraiser) can deal more
directly with the work related problems.

ANNEXURES

Department of Personnel Management

& Industrial Relations
Respected Sir/Madam,
I am conducting a survey on Performance Management
System in your organization as a part of my course curriculum of
P.G in P.M.I.R, Ghaziabad University. So I, request you to spend some
of your valuable time in completing this questionnaire. Your
responses with respect to this questionnaire will be strictly used for

academic purpose only. I would request you to provide your frank

opinion.
Thank you for your co-operation.
Your sincerely
Monalisha Nayak
Student,P.G Deptt. Of P.M.&I.R.

Questionnaire
(Identification of the respondents will not be disclosed))
General profile of Respondents:
1.
2.
3.
4.

Sex:
male
female
Age group: 25-35
36-45
46+
Designation:
Experience :
a) Less than 1 yr b) 2-4 yrs c) 5-7yrs d) More than 7yrs
5. Which of the following economic sectors best describes your
organization?
a) public sector
b) private sector-manufacturing
c) private sector-service
d) others (pls. specify)
6. Appropriately how many people are employed in your organization?
a) Less than 100 b) 101-500 c) 501-1000 d) more than 1001

PERFORMANCE MANAGEMENT SYSTEM

Nature of current performance management system:

1. Do you think a performance management is necessary for MCNALLY
BHARAT ENGINEERING COMPANY LTD. (MBE) ?
a) Yes
b)
No
c)
No idea
2. Does MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) operate
a formal performance management system?
a) Yes
b)
No
c)
No idea
3. If yes, which of the following groups of employees do these
processes applies?
a) Senior managers
b) Others managers/team leaders
c) Technical/clerical
d) professionals
e) no idea
3. Which of the following process (es) form a part of your performance
management system?(mark as many options as appropriate)
a) Coaching
c) Career management &
development
b) Training and development
d) Succession planning
4. Please indicate which of the following methods of performance
appraisal form a part of your system?

a) Written essay method

b) Graphic rating scales

e)
f)

Critical incident assessment

Behavioral

Assessment(BARS)
c) Ranking method
g) Paired Comparison
d) 360 degree appraisal
h) Forced distribution method
e) Self-appraisal
j) Balance scorecard
If any other pls. specify
5. Who sets the performance goals/requirements for individuals better
in MCNALLY BHARAT ENGINEERING COMPANY LTD. (MBE) ?
a) Senior Manager
d) Appraises
b) HR professionals
e) Appraiser & Appraises
c) Line managers/Team members f) Others (pls. specify)
Satisfactions

of

employees

with

the

current

Performance

Management System of Mcnally Bharat Engineering Company Ltd.

(MBE) ?
Using the following scale, please rate your satisfaction with the following
parts of your current performance management system.
Highly satisfactory:
5
Satisfactory:
4
Undecided:
3
Dissatisfied:
2
Highly dissatisfied:
1

Highly

Sl

Satisfacto

No

1
2

ry

Performance Planning/
Goal Setting
Performance
Evaluation

Satisfact
ory

Neutral

Dissatisfact
ory

Highly
Dissatisfact
ory

Development Planning

360- degree feedback

5
6
7

Coaching &/or
Mentoring
Training
Leadership

Development
Rewards

Discipline
Effectiveness of

10

current Performance
Management System

BIBLIOGRAPHY
BOOKS

Armstrong and Baron, Performance Management, key strategies and

practical
guidelines, Prentice Hall of India (P) Ltd.
Rao VSP, Human Resource Management
Rao TV, Appraising & Developing Managerial Performance, Academy

of HRD, Ahamedabad, 1992

HRM Reviews, ICFAI university press
Gupta C.B., Human Resource Management
Ascent, The Times of India, East
Richard C. Grote, Making performance management work
Annual reports of MCNALLY BHARAT ENGINEERING COMPANY LTD.
(MBE)

WEBSITES

www.google.com
www.perormancemanagementguide.com
www.answer.com
www.Cite-Hr.com
www.ItsMyAscent.com
www.McNally Bharat Engineering Company Ltd. (MBE) .com
www.businessball.com