DSIL :The C Dilemma

Submitted by
Saurabh Kumar(15pgpm12)
Akshay Agrawal(15pgpm08)

Company Profile
DSIL is subsidiary of SAIL,Steel Authority of India Limited (SAIL) is one of the largest state-owned steel
making company based in New Delhi, India and one of the top steel makers in world. With an annual
turnover of 43,337 crore (US$6.4 billion) (FY 2015-16). It is a public sector undertaking which trades
publicly in the market is largely owned by Government of India and acts like an operating company.
Incorporated on 24 January 1973, SAIL has 93,352 employees (as of 31-Mar-2015) with an annual
production of 13.9 million metric tons, SAIL is the 24th largest steel producer in the world .The Hot Metal
capacity of the Company will further increase and is expected to reach a level of 23.5 million tonnes per
annum by the end of the Financial Year 2015-16. P.K Singh is the current chairman of SAIL.

Performance Appraisal
Performance Appraisal is the systematic evaluation of the performance of employees and to
understand the abilities of a person for further growth and development. Performance appraisal is
generally done in systematic ways which are as follows:
The supervisors measure the pay of employees and compare it with targets and plans.
The supervisor analyses the factors behind work performances of employees.
The employers are in position to guide the employees for a better performance

Objectives of Performance Appraisal

To maintain records in order to determine compensation packages, wage structure,
salaries raises, etc.
To identify the strengths and weaknesses of employees to place right men on right job.
To maintain and assess the potential present in a person for further growth and
development.
To provide a feedback to employees regarding their performance and related status.
To provide a feedback to employees regarding their performance and related status.
It serves as a basis for influencing working habits of the employees.
To review and retain the promotional and other training programme

Performance Appraisal System followed in DSIL

Company strictly followed Bell curve distribution, in performance Appraisal System

Bell curve Appraisal

It assumes that all the employees in a
company can be divided into groups such as:
A bell curve model is a systematic bell
shaped graph that is pronounced in the
middle and tapered off at the edges.

Bell
Curve

It assumes that all the employees in a

company can be divided into groups
such as:

Top 10% Excellent (E)

Above Average(A) 30% - Below
Average Performers (B)

Some common feedback from employees toward Bell Curve

DSIL Management view towards Bell Curve

Bell Curve seen as Dated, but Necessary Evil

80% Companies use the Bell Curve

It stays on only because a fully developed alternative is not availabe

Case Background (Major Problems)

After appointed as CEO of DSIL, Mr. U.R. Hiem find several problems in Appraisal system in
largest steel makers company-

Retiring employees
were graded as C

Grades of individuals
were inconsistent

E and A grades are

following same pattern

Attrition rates was

negligible

The Major concern in appraisal system was the employee who is going to retire is graded as
Grade C
If we look as Indian context, People want an honorable farewell from any organization because
after serving his whole life in an organization if one didnt get a respected farewell, its really
impact one personally and also socially.
Its not only badly effect a retiring employee, its also effect organization as well like-

Retiring Employee will influence other employee against management

Our Suggestions

Retiring employees should not to be graded C at least for 3 years when they are going to
be retire

PRP and Promotion should be delinked

Performance Improvement Plan/Training should be arranged for each under performing

employees

Moderate rating

PRP payment to be paid quarterly

Some Important Questions

In the Indian context, the bell curve creates too much emotional stress, and

most importantly, it destroys the loyalty factor and leads to high levels of
attrition, says TV Mohan Das pai
A bell curve ranks employees in three categoriespoor, average and top performers. It pegs the
ratings and rewards given to one employee to how others fared, rather than assessing the person
purely on just individual performance
According to an employee after securing poor performer in bell curve-I had worked in the
company for more than seven years and there was no mention of poor performance in my
appraisal report. Despite that they asked me to leave the company
This is not a problem just in a company or in one sector, but across
industry. According to HR experts, the Bell Curve was initially established by General Motors in

the US for accessing customer satisfaction, but later on assumed as a tool to access employee
performance. The big advocate of the system for employee assessment was General Electric
(GE) and the US major had intensely advocated it under the leadership of then CEO Jack Welch.
The Bell Curve method is seen as one with a rigid framework that forces a manager to slot at
least some in his team as poor performers. While they may not been shown the door
immediately, there is always that threat hanging over their heads.
These all factors increase emotional stress in employees.

What are the alternatives to the Bell Curve Appraisal System?

According to us the alternatives to the Bell Curve Appraisal system can be360 Degree feedback - Instead of relying on one supervisor to evaluate an individuals
performance, some companies ask everyone with whom the employee interacts to weigh in.
Thats the idea behind 360-degree feedback, a technique that collects performance data from a
number of stakeholders like team members, customers, and direct reports. When its done well,
360 programs allow all your team members to improve in key areas that might be limiting their
upward career path or actually causing major conflict within a team, Eric Jackson
Calibration - Calibration is a face-to-face process, in which managers who oversee similar
groups review one anothers employee-performance ratings. In these "rater reliability" sessions,
supervisors discuss each of their employees performance rankings and their reasons behind the
evaluation. "A calibration session catches the 'easy graders' and 'tough graders' and helps them
rate their employees more realistically," Joanne Lloyd
Management by Objective - First outlined by management whiz Peter Drucker, management by
objective occurs when supervisors work with employees to outline goals and desired outcomes.
Managers evaluate staff members based on their ability to achieve results. The advantage of the
MBO process is that it allows employees to actively participate in goal setting
Peer Review - As the term implies, peer reviews require co-workers to comment about each
others performance. Coworkers often know more about their peers' strengths and weaknesses

than supervisors do, and letting employees review one another is a great way for management to
share in that knowledge,

Application of the bell curve leads to competition among employees and

results in reduced collaboration
The major drawback of bell curve is it judge employees to each other and in this situation
employees collaboration reduced and also their performance and various problem arises,
Majors areo

Some people get frustrated by a work environment that feels competitive, preferring
to do their job and be evaluated against clear goalsnot against an ever-changing environment
and internal competition.

Constant comparison can be exhausting and can eventually be a de-motivator. Even

for employees who are performing well, it can be frustrating for the competition to be
continual. This type of environment is stressful.

If employees view one another as competitors, it can sabotage collaboration and

teamwork. It can even cause workers to sabotage one anothers efforts in order to get ahead,
leading to mistrust and fear, which is not a good working environment.

Organizational goals can get lost in the fray. If employees focus more on beating the
competition within the organization than on actually achieving the organizations goals, this
could mean they are being less productive overall in moving the company or project forward.

When an individual doesnt win the competition, that can be a de-motivator from
there on out, thus reducing future productivity after the first contest ends. In other words, it
can create an if you cant win, why to bother trying? mindset.

Morale can decrease. If competition is tied to the possibility of being fired (e.g., the
lowest performer or lowest 10 percent of performers are let go), it has the potential to
negatively affect morale. Furthermore, the organization will eventually be firing great
employees simply because of a ranking system.

Percentile marking in education does not reflect knowledge it only reflects

relative ranking.

Many highly intelligent people are poor thinkers. Many people of average intelligence are
skilled
thinkers. The power of a car is separate from the way the car is driven. - Edward
de Bono
Like bell curve, in this system organization evaluate one by didnt his ability, his knowledge, his
experience,
In this system, there is only one parameter is fixed and that is,
Whats your performance in comparison to other?
In percentile, we evaluate one from other position, not from his knowledge

Learning from Case

Advantage and Disadvantage of Bell Curve
Behavioral Economics
Diminishing Desirability
Understand Various problems that can be occurred in Bell Curve appraisal system
How to deal with retiring employees
Gain and Loss theory