A Case Study of BPCL, Naini

“EFFECTIVENESS OF THE PERFORMANCE MANAGEMENT

SYSTEM AT PSUs FROM EMPLOYEE’S PERSPECTIVE”
 About the organization
BHARAT PUMPS AND COMPRESSORS LIMITED
Bharat Pumps & Compressors Limited (BPC) is a Mini
Ratna Company, Public Sector Undertaking (PSU) of the
Government of India under the Ministry of Heavy
Industries and Public Enterprises.
 It has an employee strength of 1070 employees( till Dec
2010 )
PRODUCTS MANUFACTURED
The company manufactures Reciprocating pumps,
Centrifugal pumps, Reciprocating compressors, and high
pressure se
 TURNAROUND
 The company has seen a dramatic turnaround in its performance
from the financial year 2005-06.

 After the start of the company in 1970,unfortunately, the

company was unable to make profits. Eventually, it turned sick
and was referred to the Board for Industrial and Financial
Restructuring (BIFR).

 The turnover went up to 27,112 lakh (US$601.9 million) in

2009-10 from 14,372 lakh (US$319.1 million) in 2006-07.
 Objectives of the study:
 To study the performance management practices at public
sector undertaking, taking BPCL as a case study.

 To study the effectiveness of the performance management

system from employee’s perspective, in order to find out if
it is similar/different from the objectives that the
organization’s management desired it to be.

 To give me meaningful suggestions so as to make it more

efficient from the employee’s point of view.
 Research methodology
Developing the research Plan - The research plan was designed to
take decision on the data sources, research approaches, research,
instruments, sampling plan and contact methods.
For designing the questionnaire and getting appropriate
parameters for it, an unstructured interview was conducted with
the managers at BPCL.
Extensive literature review about performance management
systems at various private as well as PSUs was done to derive
components for questionnaire.
Questionnaire consisted of 32 questions based on a 5 point Likert
scale extending from highly dissatisfied to highly satisfied.
To enhance the effectiveness of the questionnaire, it was offered
to the employees in Hindi also
 Analysis
Factor Analysis using SPSS was done to ensure that effective
components were considered and proper grouping could be done to club
the closely related components together, followed by Reliability Test,
to enhance the accuracy.

Mean was taken out of these clubbed components and its degree of
influence on the dependent variable i.e. Effectiveness of the
performance management system was checked using ANOVA.

Cross Tabulation and frequency analysis was done to study the pattern
of responses.
 Observations
Employees are appraised once in a year through a feedback
form where they conduct self appraisal as well as appraisal
by the superiors.
There is no linkage of training programs with the findings
of performance appraisal process
Training modules are fixed and they are modified less
frequently and are not customized as per individual needs
Promotion is on the basis of time factor, every employee
becomes eligible for promotion exam on successful
completion of 4 years of service, performance appraisal has
a small effect on this process
 The traditional performance appraisal
mechanism
No feedback is offered to the employees regarding their
performance levels and shortcomings
There is a process of informal counseling of the
employees by their seniors.
Motivation is not a part of performance appraisal
process, no rewards are linked to it
Accountability and transparency of the HR department to
the workers is not significant
The process is more or less one way with a very less
employee participation
 Informal system of performance
management
Though there is no formal performance management
processes being followed at BPCL yet there is a very strong
system of informal performance management
Under informal performance management, the superior
guides the subordinate consistently and also does remedial
counseling in case of any problem faced by the superior
For motivation there is a tradition of giving monitory rewards
to the performing employee and also every one recognizes
and praises the efforts of the good performing employee
This leads to a healthy environment where productive
employees are motivated informally.
 Conclusion
 The performance management process is significantly
influenced by support from superiors.
 Employee are apprehensive about the objective and
purpose of the performance management process which is
conducted more or less as a routine affair
 Transparency and accountability is a vital component of the
performance management system as per the employee
perception. .
 The performance management system is one sided at
BPCL. That is why employees are apprehensive about this
process.
The process and the performer of the performance appraisal
should be more knowledgeable trained and efficient.

The competent, knowledgeable and efficient HR department

leads to a better performance appraisal and management system
in an organization

When the performance appraisal and management process is in

sync with individual employee’s career planning and
development process, worker’s response to the performance
management process is more positive.

The performance appraisal and management process is more

interactive, holistic and participative, the worker morale as well
as belief on the performance management process is high.
 Recommendation
Holistic and participative approach should be adopted
in performance appraisal process at BPCL, where
every aspect of employee’s key performance factors
are taken into consideration
The process at BPCL should be as much participative,
multidimensional and interactive as possible.
Synchronization with individual’s career development
would ensure optimum worker participation in the
process of organizational growth and development
leading to increase in productivity
Objectivity of the Appraisal Process should be
increased making it more focused on employee as well
as organizational development

Efficiency of HR department is an important factor to

be taken care of as per the perception of employees .

Transparency and accountability : making workers a

part of the process and explaining the entire process,
its results to the employees would build trust necessary
for the successful performance of the process.
 Limitation and scope for future study
Respondent’s indifference:- the survey was conducted
during the working hours of the company and hence many
respondents were not very keen on filling the questionnaire .
 No Comparison or Benchmarking with Private
Organizations: Since this survey was specifically designed
for practices at PSUs, many good practices followed at
certain private sector organizations and with industries best
practices or benchmarks were ignored.
 Questionnaire was generic and not specific for specific
departments in order to keep the system less complex.
A comparative study can be done with comparisons to
industry’s best standard.
 References

Boice D. F. and Kleiner B. H. (1997). Designing effective performance appraisal systems, 46(6), pp.
197–201.
Brown M., Douglas H. and Benson J.(2010). Consequences of the performance appraisal
experience. Personnel Review, 39(3), pp. 375-396.
Chen T.,Wu P. and Leung K.(2011). Individual performance appraisal and appraisee reactions to
workgroups. Personnel Review, 40(1), pp. 87-105.
Financial Accountability & Management Volume 20, Issue 1, pages 39–55, February 2004
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Thank You