Competency Based Performance Management System: An Initiative Towards A High Performing Ofganization.

CHAPTER – VII CONCLUSION 7.1 Summary The degree of human resource efficiency reflects in the core competency of an organization; to what extend the organization can optimize its resources and utilize the potential market opportunities of business environment depends solely on the human competency an organization builds. It is off late that many organizations have understood the significance of competency based management, but it is still a mirage to many organizations for its complexity and intricacies of building the competencies for the organizations. Competency management includes the identification of critical knowledge, skill and attitude that is to be possessed by an employee to perform his role effectively. This may be categorized under the individual, departmental and organizational heads. Grouping of the different level competencies may develop a competency model for the organization. The articulated and customized competency model brings out the competency based performance. The competency based performance may be better used to reward, career development, leadership, measuring performance and culture building. It assists the organizations to achieve their vision, mission, objectives and goals, paves the career path of the employees and creates a system which may focus on developing human capital of the organization. Its importance is very much critical in the organization in many scenarios. The competencies are built in various levels like in organizational level, functional level and job level. These competencies are mainly used to assess the employees and to evaluate their performance which may result in reward, career, culture, measurement, leadership and team based performance management. Performance management system is a tool which is used to communicate the organizational goal to the employees individually, allot individual accountability towards that goal and tracking of the progress in the achievement of the goals assigned and evaluating their individual performance. It is the tool that helps the managers to manage their resources and eventually result in the success of the organization. Performance management system is a very broader and complicated function of HR. A performance management process sets the platform for rewarding excellence by aligning individual 223

employee accomplishments with the organization’s mission and objectives and making the employee and the organization understand the importance of a specific job in realizing outcomes. It includes activities such as joint goal setting, frequent communications, continuous progress review, feedback of the performance and rewarding the achievements. Skilled manpower, low turnover, low absenteeism, improved morale and motivation, job satisfaction and commitment are the key indicators of performance management system. It is a much broader system as it is linked with the processes of planning, implementing, reviewing and evaluating, for augmenting growth and productivity at both the individual and organizational level. Performance of employees is a major tool for the working of the organization. The success of the organization depends on the way its employees are working. Workplace environment, employee competency, performance standards and expectations, performance appraisal, employee training, post appraisal measures are the factors influencing performance management system of any organization. Performance management basically refers to the process of measuring, managing and developing the performance of the employees. It is the ongoing process of communication between the supervisors and its subordinates to make decisions and strategically achieving the objectives. It allows the organizations to align the resources and system in a strategic way. There are various methods available for evaluating the performance of the employees. The process of evaluating the performance of the employees is called as performance appraisal. However, the challenge lies in the identification of the best method which can help in identifying the areas where employees need to improve and through which the employee can find that they are best and at what. Performance appraisal is the part of the performance management system. There are various methods available for measuring the performance of the employees. Employees are the most valued asset for the organization; one cannot produce the replica of these. Assessing their performance, measurement, positive reinforcement, communication and decision making are the key elements for the performance appraisal. The methods chosen for measuring the performance of the employees should have these elements because the presence of these elements shows the effectiveness of the 224

performance management system. A good performance appraisal method is the one which ensures that an individual gets perception of ways to achieve the organizational goals and objective. If the employees know exactly about the goals, then it acts as a motivational factor for them. Motivated employees work harder and put their best which leads to increase in the productivity of the organization. A good performance management system helps in clarifying the job responsibilities and duties. This helps in knowing which employees is to be promoted and give reward. Promotion and rewards helps in increasing the enthusiasm of the employees and they work with great confidence and zeal. It increases their motivational level and employees’ involvement in the organizational activities also increases. The employees work with good concentration due to which the output also increases. Evaluating the performance of the employees helps in finding the areas in which there is need to give training to the employees to acquire new skills and develop themselves. The employee development however is the ongoing process. Therefore, the effectiveness of the performance management system plays an important role in it. It is the heart of any HR processes in an organization, as it influences the rest other HR functions or processes. Profit margin, customer satisfaction and low wastage are the outcomes of performance management system. In an employee oriented organization performance management system is very important to assess the performance of employees as well as to motivate them to contribute effectively in the organization. In the competitive world today, employee performance is the key for success of an organization. Organizations in the steel industry have a large manpower. A dedicated manpower will be able to contribute greatly towards profit and prosperity of the company. Therefore, the main concern of this study was how the management takes care of the successful implementation of competency-based performance management system. The study is based on empirical data, to know the impact of performance management system on organizational performance. Rourkela Steel Plant (RSP), a unit of Steel Authority of India Limited (SAIL) has been selected for the purpose of study to draw a clear picture on the impact of competency-based performance management system on organizational performance. 225

7.2 Recommendations During the study, the researcher has identified some aspects of performance management system of Rourkela Steel Plant, which are in need of special care and attention to be given by the management towards the very success and gaining of competitive advantage in the present business environment. Based on the findings of the study, the following recommendations are given for effective and successful of organizational performance management system:  Employee Competency: As great employees are always interested in learning new things and expanding their skill sets, and there is no better time than the present, the management of RSP has to give more focus on employee competencies to lay out organization’s performance outcome. At the same time specific measures are also to be taken to enhance the competency level of the employees of RSP to motivate the people for achievement of organizational goal and objectives.  Performance Appraisal: Since performance appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development, the management of RSP has to give proper and more emphasis to maintain records in order to determine compensation packages, wage structure, salaries etc., identify the strengths and weaknesses of employees to place right men on right job, maintain and assess the potential present in a person for further growth and development, provide feedback on regular basis to the employees regarding their performance and related status, review and retain the promotional and other training programmes.  Employee Training: The success or failure of modern business organizations depends on the quality of their human resources. Well trained and highly developed employees are considered as corner stone for such success. Hence, the management of RSP should pay special attention to investigate the relationship between training & development and employees’ performance & productivity. It is also recommended that effective training programs and carefully set development plans should be provided to all employees to enable them to enhance their skills and upgrade their knowledge. Finally, foreseeable future research can be conducted to cover other variables like (capabilities, involvement so on) which might affect performance and productivity. Besides the above, both in-house and out-house training programmes should be regularly conducted by the organization and organization’s own training centre will be well structured along with all necessary facilities. 226

 Post Appraisal Measures: Performance appraisals are important for managing company and employee resources. Each performance appraisal offers feedback that can be used in a variety of ways and managers need to be aware of what can go wrong when they deliver performance appraisal feedback. There are specific guidelines managers can use to deliver the appraisal and the feedback. In addition, performance appraisals can be used to develop and enhance employee careers. A post appraisal, also known as an employee review, is a regular interview that assesses an employee’s performance, usually to determine whether or not the employee will receive a bonus, raise or promotion or be retained. The key to successful employee post appraisals is setting up review parameters in advance and communicating them to your workers. Since, post appraisal measures help management in deciding about the promotions, transfers and rewards of the employee, help appraiser for offering suggestions, guiding, coaching and counseling the individual employees for their advancement and perform as the tool for motivating employees towards higher performance, it is recommended that management of RSP should pay special attention and more focus on the same.  Organizational Goal: Performance management is a strategic and integrated process which provides sustainable success for organizations through developing individual and group capabilities and matching individual performance with organizational objectives. Since, organizational goal helps to motivate the employees and work groups as they work towards larger aims, the management of RSP should give more special focus on proper communication and clarity of organizational goal for involvement and engagement of the employees.  Organizational Development: It is the process of increasing organizational effectiveness and facilitating personal and organizational change through the use of interventions driven by social and behavioral science knowledge. Organization development intervention is a deliberately planned, organization-wide effort to increase an organization's effectiveness or efficiency and many enterprises today fails to exist because they lack the strategies for sustainability in terms of intervention. Since organizational development establishes strategies to improve processes and develop the skills required within the framework of the business’s current activities, it is recommended that management of RSP should focus on human process interventions through team building in the organization because team-building interventions are directed towards the analysis of the effectiveness of team processes 227

such as problem solving, decision making and interpersonal relationships, a diagnosis and discussion of the issues and joint consideration of actions required to improve effectiveness 7.3 Conclusion In today’s competitive and global environment, it has become crucial for every organization to strive for the best towards survival and sustainability. The success of an organization depends not only on how the organization makes the most of human competences, but also how it stimulates commitment to an organization. Employee commitment, together with a competent workforce, seems to be of importance for an organization’s success. Organizations are focusing on competency based performance management as a critical measure for the success of any organization. Competency framework is used by the organizations today in different HR practices like recruitment and selection, training and development, performance management, career development, compensation and pay etc. to improve the performance of the organization as well as of employees. Competency based performance management approach focuses on increasing the potential of employees to have the competitive edge over other organizations in today’s time. The present study explored and analyzed the specific measures relating to performance management system experienced by Rourkela Steel Plant (RSP) in the present competitive environment. It is visible from the present study that competency based performance management is a fast emerging as a new approach for making employees more proficient in their work so that organization can achieve the competitive edge over their competitors and thrive in today’s time. Hence, competency based management have turned out to be an effective tool for HR to improve the organizational performance. Integration of competency model with the HR function has enhanced the performance of individual as well as organization to become competitive and market leader. 7.4 Scope for Future Research During the present research it was not possible to cover all aspects of performance management system (PMS). Hence, for the future researchers, there are ample opportunities and gaps to carry out further research in the following directions: 228

 All data were collected within a single organization, which limits the observed variability and decreases external validity. Of course, conducting this study in a single organization did provide the advantage of controlling for organization-level confounding variables.  Future research in multiple settings may increase the generalizability of the findings to other type of employees and organizations. Also, the study could be replicated for specific industries to examine and extend the applicability of present research models to varied context. A comparative analysis can be made with other leading organizations to get clarity on outcomes of employee performance management.  Future researchers might also test the derived research model and quantify its relationships. Additionally, researchers may explore supplementary dimensions which may further facilitate performance management system. It may nevertheless be possible that more essential elements, such as workplace environment, employee competency, performance standards and expectations, performance appraisal, employee training, and post appraisal measures, which have a vital link to the success of performance management system, needs to be explored.  Further research can also be carried out on other indicators of performance management system on organizational performance, such as: profit margin, customer satisfaction and low wastage of the organization.  The study also can be broadly extended to the other public sector units like service, pharmaceuticals, power, petrochemicals, telecommunication, insurance, heavy engineering, electronics, information technology, automobiles, etc., and it can further be extended to private sector organizations too, so as to get more generalized outcomes of performance management system. 229

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Website References:  http://arcelormittal.com/  http://en.ansteel.cn/a/about/jituanjianjie/  http://gbr.sagepub.com  http://ijecm.co.uk/  http://scholarworks.waldenu.edu/dissertations  http://www.baosteel.com/group_en/  http://www.ijmsbr.com  http://www.imedpub.com/  http://www.imtuoradea.ro/auo.fmte/  http://www.jisco.com/hrd.htm  http://www.journalijar.com  http://www.ripublication.com  http://www.sciedupress.com/jha  http://www.scirp.org/journal/ajibm  http://www.scirp.org/journal/jhrss  http://www.visasteel.com/  https://en.wikipedia.org/wiki/Rourkela_Steel_Plant  https://en.wikipedia.org/wiki/Steel_Authority_of_India  https://www.cipd.co.uk  https://www.eng.nssmc.com/english/index.html  https://www.sail.co.in/rourkela-steel-plant/about-rourkela-steel-plant  www.abhinavjournal.com  www.ajabs.org  www.ajbasweb.com  www.austinpublishinggroup.com  www.ccsenet.org/ies  www.ccsenet.org/ijbm  www.eajournals.org  www.extension.iastate.edu/agdm  www.hrmars.com  www.iiste.org  www.ijariie.com  www.ijbssnet.com  www.ijhssi.org  www.ijmas.org  www.ijsrp.org  www.ijtrd.com  www.impactjournals.us  www.jchps.com  www.mednet.gr/archives  www.OneStreet.org  www.qvartz.com  www.ralphlewis.co.uk 244

 www.rdmodernresearch.com  www.sail.co.in  www.sciencedomain.org  www.theijbm.com Policy & Manual References:  CCR for Non-Executive Employees of SAIL (non-technical)  CCR for Non-Executive Employees of SAIL (non-technical)  CCR for Non-Executive Employees of SAIL (Technical)  Financial Year Book 2015-16 (SAIL – Rourkela Steel Plant)  Manpower Planning Group – Labour Productivity (SAIL)  Manpower Planning Group – SAIL Manpower  SAIL Personnel Manual - New Executive Performance Management System  SAIL Personnel Policy Circular (No.207)  Understanding Job Competency Modeling (Personnel Commission, Bassett Unified School District, CA) 245

APPENDICES

QUESTIONNAIRE Declaration: Information collected through this questionnaire will be used for academic purpose only. Please give a tick (√) on the appropriate box given below: Section – I: Personal Profile Age Group Years of Service in SAIL Gender & Position 25 - 35  1 -10  Male  36 - 45  11 - 20  46 - 55  21 - 30  Female  56 - 60  31 - 40  Executive  Non-Executive  I would be very grateful if you would answer all of the following questions by giving a tick (√) on the number given at the right hand side (Strongly Disagree = 1, Disagree = 2, Neither Agree nor Disagree = 3, Agree = 4, Strongly Agree = 5). Section – II: Factors Influencing Performance Management System A. Workplace Environment Do you think emphasis on ‘workplace environment’ will enhance the degree of performance of employees? For each statement, indicate the extent of your agreement or disagreement. 01. The workplace environment is free from dust and noise. 12345 02. The work premises are cleaned regularly. 12345 03. An arrangement for adequate level of lighting and ventilation in 1 2 3 4 5 the work premises. 04. The jobs are standardized so that individuals are experiencing 1 2 3 4 5 low stress. 05. Perception of individuals as a pleasant and safe workplace. 12345 06. Superiors are very cordial and caring. 12345 07. Attention on various aspects of work environment will enhance 1 2 3 4 5 the level of performance of employees. B. Employee Competency Do you think proper emphasis on continuous development of ‘employee competencies’ will enhance level of performance of the individuals? For each statement, indicate the extent of your agreement or disagreement. 08. Emphasis on desired skills, knowledge, abilities, and attitude 1 2 3 4 5 towards goal attainment. 246

09. Performance expectations set for individuals on the basis of 12345 individual competencies. 12345 12345 10. Employee competencies are used to lay out an organization’s 12345 performance outcome. 12345 12345 11. Competent employees will experience a high degree of engagement and motivation. 12. Employee competencies outline employee development and promotional paths within the organization. 13. Competencies enable employees to become more proactive beyond their individual roles and responsibilities. 14. Emphasis on continuous development of employee competencies will enhance the level of performance of the individuals. C. Performance Standards and Expectations Do you think clearly defined ‘performance standards and expectations’ for the employees will have a positive impact on individual performance? For each statement, indicate the extent of your agreement or disagreement. 15. Performance standards are objective, measurable, realistic, and 12345 stated clearly in writing. 12345 12345 16. Performance expectations are the basis for appraising employee 12345 performance. 12345 12345 17. Performance standards enable employees to achieve the best 12345 results. 12345 12345 18. Performance standards enable employees to differentiate between acceptable and unacceptable results. 19. Performance standards increase job satisfaction, because employees know when tasks are performed well. 20. Performance standards inform new employees about organizational expectations and job performance. 21. Performance standards encourage an open and trusting relationship with employees. 22. Superiors and subordinates have jointly defined the performance standard and expectation relating to the assigned job. 23. Clearly defined performance standards and expectations will have a positive impact on employee performance. 247

D. Performance Appraisal Do you think emphasis on ‘performance appraisal’ for all round development of the employees will have a positive relationship with the performance management system? For each statement, indicate the extent of your agreement or disagreement. 24. Performance appraisal is the foundation for determination of 12345 adequate compensation and appropriate reward system. 12345 12345 25. Performance appraisal identifies the strengths and weaknesses of 12345 employees to place right men on right job. 12345 12345 26. Performance appraisal maintains and assesses the potential 12345 present in a person for further growth and development. 27. Performance appraisal provides a feedback to employees regarding their performance and related status. 28. Performance appraisal serves as a basis for influencing working habits of the employees. 29. Performance appraisal is an ongoing activity for maximum exploitation of individual resources. 30. Emphasis on performance appraisal for all round development of the employees will have a positive relationship with the performance management system. E. Employee Training Do you think emphasis on ‘employee training’ will enhance the skills, capabilities and knowledge of employees and influence the performance management system.? For each statement, indicate the extent of your agreement or disagreement. 31. Employees’ training is an essential driver of an organization’s 12345 success. 12345 32. Through training programme the workers are properly educated 12345 about the effective use of technology. 12345 12345 33. Emphasis on training has improved the efficiency and productivity of employees. 12345 12345 34. Both in-house and out-house training programmes are regularly conducted by the organization. 35. Organization’s own training centre is well structured along with all necessary facilities. 36. Employee’s training ensures competitive edge in the market. 37. Training programmes creates opportunities for career development and personal growth, an important factor in retaining workers. 248

38. Training measures will enhance the skills, capabilities and 12345 knowledge of employees and influence the performance management system. F. Post Appraisal Measures Do you think organizational emphasis on ‘post appraisal measures’ will influence the degree of performance management system by reducing the competency gap of individuals? For each statement, indicate the extent of your agreement or disagreement. 39. Post appraisal measures help management in deciding about the 12345 promotions, transfers and rewards of the employee. 12345 40. Post appraisal measures helps appraiser for offering suggestions, 12345 guiding, coaching and counseling the individual employees for 12345 their advancement. 12345 12345 41. Post appraisal measures focus on regular feedback towards the 12345 development of employees. 12345 42. Post appraisal measures helps in mental boosting of employees in 12345 order to avoid frustration. 43. Post appraisal measures emphasize on open discussion in between superiors and subordinates. 44. Post appraisal measures helps in identification of developmental means for enhancement of employee performance. 45. Post appraisal measures used to access employees’ weakness, identifying areas, which may require additional training and support. 46. Post appraisal measures are the tool for motivating employees towards higher performance. 47. Organizational emphasis on post appraisal measures will influence the degree of employee performance management system by reducing the competency gap of individuals. Section – III: Facilitators of Performance Management System Do you think organizational emphasis on the specific facilitator: ‘mission-vision-goal- objectives’, ‘organizational culture’, ‘organizational development’ and ‘recognition and rewards’ will have significant relationship with the performance level of individual employees? For each statement, indicate the extent of your agreement or disagreement. 48. Mission and vision inspire employees to achieve high 12345 performance ratings, regardless of whether the company is in the 12345 business of making a profit or not. 49. Organizational goals drive department goals, which helps managers and employees to establish job and career objectives. 249

50. Organizational goal help to motivate the employees and work 12345 groups as they work towards larger aims. 12345 12345 51. Organizational culture promotes equality by ensuring no 12345 employee is neglected at the workplace and that each one is treated equally. 12345 12345 52. Organizational development helps in developing confidence, transparency and autonomy within teams and individuals. 53. Organizational development establishes strategies to improve processes and develop the skills required within the framework of the business’s current activities. 54. Recognition and reward system of an organization increases motivation, improves morale, and employee loyalty to the organization. 55. Facilitators of performance management system will enhance the degree of individual performance. Section – IV: Indicators of Performance Management System Do you experience the following as the indicators of sound performance management system? For each statement, indicate the extent of your agreement or disagreement. 56. Enhancement of skill sets of the employees. 12345 12345 57. Rate of employee turnover is very low. 12345 58. Rate of absenteeism is very low as individual employee becomes 12345 responsible corporate citizen. 12345 59. Evidences of improved moral and motivation level of the employees. 60. Employees are experiencing high level of job satisfaction and commitment. Section – V: Organizational Performance A. Profit Margin Do you think performance management system is the heart of any HR processes which will enhance the profit margin of an organization? For each statement, indicate the extent of your agreement or disagreement. 61. Performance management system enhances profit margin of an 12345 organization by recruiting the best talents, reducing absenteeism, 12345 identifying and meeting the training needs of existing staff. 62. Performance management system of an organization enhances profit margin by ensuring employee welfare, positive employee relationship and safe working environment of employees. 250

63. Performance management system saves money by implementing 1 2 3 4 5 cost effective benefit programmes. B. Customer Satisfaction Do you think Performance Management System will have a significant relationship with the ‘Customer Satisfaction’? For each statement, indicate the extent of your agreement or disagreement. 64. Human resource management holds immense importance in 12345 providing motivation to the employees and at the same time, to 12345 increase the level of consumer satisfaction. 12345 65. One of the most effective and efficient ways of increasing consumer satisfaction in performance management system, is to ensure employee satisfaction. 66. Setting of customer-focused goals and standards is an important component of performance management system. C. Low Wastage Do you think performance management system will have a significant impact on ‘low wastage’ or reduction of material wastage? For each statement, indicate the extent of your agreement or disagreement. 67. Waste management is very important for a company’s 12345 profitability. 12345 12345 68. Reduction in waste can help the company to reduce its cost and 12345 cost control is an outcome of the performance management system. 69. Environmental management system, workforce education and training, and incentive and reward mechanism can help an organization to the wastage of the resources. 70. Top management pays more attention on waste management as one of the key indicators of performance management and corporate profitability. Researcher Sukanta Mishra Research Scholar (Commerce and Management) North Orissa University, Baripada, Odisha. 251

LIST OF PUBLICATIONS

LIST OF PUBLICATIONS & SEMINARS CONFERENCE PAPERS  “The Real Essence and Key Drivers of Employee Engagement: An Evidence of Organizational Effort” in the National Seminar on “Employee Engagement and HR Initiatives” organized by PG Department of PM & IR, Utkal University, Bhubaneswar, India on 14th May 2011. INTERNATIONAL PUBLICATIONS  Sahoo, C.K. and Mishra, S. (2012). “Performance Management Benefits Organizations and Their Employees”, Human Resource Management International Digest (Emerald Group Publishing Limited, UK), 20 (6): 3-5. NATIONAL PURBLICATIONS  Mishra, S., Sahoo, C.K. and Behera, H. (2011). “360-Degree Feedback and Managerial Performance: A New Perspective of Assessment”, Growth (Journal of the Management Training Institute, SAIL, Ranchi, India), 38 (4): 45-51.  Mishra, S., Sahoo, C.K. and Das, S. (2010). “Competency Based Performance Management System: An Exploration”, Personnel Focus (Quarterly Journal of National Institute of Personnel Management, Utkal Chapter, Bhubaneswar, India), October-December 2010, 15-22. 252