PROJECTON

REPORT

STUDY OF PERFORMANCE APPRAISAL AND PERFORMANCE MANAGEMENT SYSTEM AND ITS EFFECTIVENESSSubmitted For The Partial Fulfillment Towards The Award of Master Of Business Administration Degree (2008-2009)

Submitted by

Shruti Saxena Roll No.0803270042 Department of Management ACADEMY OF BUSINESS & ENGINEERING SCIENCES, GHAZIABAD

AFFILIATED TO UTTAR PRADESH TECHNICAL UNIVERSITY, LUCKNOW

1

PROJECTON

REPORT

STUDY OF PERFORMANCE APPRAISAL AND PERFORMANCE MANAGEMENT SYSTEM AND ITS EFFECTIVENESSAT

NTPC LIMITED (A Government Of India Enterprise) POWER MANAGEMENT INSTITUTE Plot No. 5-14, Sector-16A, NOIDA-201301 (U.P.)

2

DECLARATIONI, Shruti Saxena, student of final year, MBA, ACADEMY OF BUSINESS AND ENGINEERING STUDIES, hereby declare that this dissertation entitled Study of Performance Appraisal and Performance Management System & its effectiveness in Power Management Institute, NTPC NOIDA is based on my original research work and has not been submitted for the award of any other degree, diploma or fellowship and has not been published in any journal or magazine. All the persons who helped me during and in the preparation of this report are duly acknowledged. The results that are published here are purely for academic purpose only.

SHRUTI SAXENA M.B.A. III Sem.

3

ACKNOWLEDGEMENTI would like to express my deep and sincere gratitude to NTPC, POWER MANAGEMENT INSTITUTE, NOIDA for having provided me with the opportunity to do my project on an interesting area. The project was a great source of learning and a good experience as it made me aware of the professional culture and conduct that exists in an organization. Though at the onset of ambitious project one always encounters certain difficulties in the beginning, however, overcoming these difficulties of the project as well as making it a success, greatly depends on the encouragement, inspiration, and help given by Mr. Yudhvir Singh(), Mr. A. Chatterjee and other employees of NTPC, PMI. For completion of this project various people have put lots of efforts. I would like to thank my H.O.D. Sir and all other professors of ABES School of Management, Ghaziabad for their invaluable guidance, immense support and help. I will also like to thank other management trainees of my group for their cooperative attitude and queries which made me understand the different topics of HR quickly. And finally I would like to thank god & my parents who inspired a lot for the completion of the project.

SHRUTI SAXENA

4

PREFACE

The Summer Training Report Is an Integral Part of the Master of Business Administration Curriculum of Department of Management, ACADEMY OF BUSINESS & ENGINEERING SCIENCES, GHAZIABAD affiliated to UTTAR PRADESH TECHNICAL UNIVERSITY, LUCKNOW. During the course of training, the researcher is expected to use and apply his academic knowledge and gain a valuable insight to know the employees and organization behavior. During the course of my training, I did a comprehensive study of performance appraisal system and its management towards the effectiveness of the organization. I have undertaken the training on the same at POWER MANAGEMENT INSTITUTE, NTPC NOIDA to study the Power Appraisal and Power Management System in this company regarding Worker/employees satisfaction and awareness. As result of that I come out with the project titled, STUDY OF PERFORMANCE APPRAISAL AND PERFORMANCE MANAGEMENT SYSTEM AND ITS EFFECTIVENESS in the organization. In this report I have put my lines effort to compile the data with utmost accuracy and give the views to the best of my judgment.

5

EXECUTIVE SUMMARYThis is an attempt to present a progressive detailed discussion on the PERFORMANCE MANAGEMENT SYSTEM OF NTPC, PMI. Performance management system is a method through which total evaluation of an employees performance throughout the year undertaken by his/her superior wherefrom the junior get to know his/her own standing in the organization. This system is a very important aspect, which gives the true picture of the companys driving in a particular year. I have, over here, tried to make almost a research work on the companys PMS and fought out my utmost level to bring the best in my training. The study comprises of the first textual connotation of the performance appraisal system, in general, then continued with a detailed study on PMS system of NTPC. But to go into further details of the topic, I had built a questionnaire for employees working in the organization based on the PMS forms. In these questionnaires, I have tried to understand the general psyche of the people regarding the PMS system operating in the organization. After observing the results, I interpreted into a conclusion, which further directed me to find out the loopholes and backlogs. Accordingly, with the meager knowledge and some kind of intelligence that I carry, I have tried to give necessary suggestions to the corporate body as to how to overcome its weakness in this system and build up their strengths. No matter, how ordinary they might be, according to me, they were the actual recommendations that I could suggest to NTPC.

6

OBJECTIVES OF THE REPORT

The objectives of taking this project are To understand performance appraisal techniques at NTPC. To compare the past system for performance appraisal with the new performance management system in order to identify the drawback that are overcome by the new system of performance that is PMS(performance management system) To find out the satisfaction level of the employees and areas in which they are not comfortable with the PMS and does not find it to be effective. To find out to what extant the employees find is method effective in appraising there performance. Is there any improvement in their performance after the appraisal? To study the effectiveness of the new Performance Management System (PMS)

7

TABLE OF CONTENTSTITLE 1) COMPANY PROFILE An Overview Vision and Mission Core Values Corporate Objectives More About NTPC Power Management Institute Awards and Accolades 2) INTRODUCTION TO PERFORMANCE APPRAISAL Introduction Objectives of Performance Appraisal Process of Performance Appraisal Purpose of Performance Appraisal Managerial Ethics in Performance Appraisal Performance Appraisal Methods Sample Forms Of Performance Appraisal System Rating Errors in Performance Appraisal 3) PERFORMANCE APPRAISAL SYSTEM IN NTPC Performance Management System 4) RESEARCH DESIGN Research Methodology Data and Data Collection Limitations Of Study 5) DATA ANALYSIS AND DATA INTERPRETATION Questionnaires Facts and Findings Problems Faced Suggestions Recommendations Conclusion and Summary 6) BIBLIOGRAPHY 8 PAGE NO. 09-50

51- 80

81-89 90-94

95-115

116

9

THE COMPANY

NTPC Limited is the largest thermal power generating company of India. A public sector company, it was incorporated in the year 1975 to accelerate power development in the country as a wholly owned company of the Government of India. At present, Government of India holds 89.5% of the total equity shares of the company and the balance 10.5% is held by FIIs, Domestic Banks, Public and Others. Within a span of 30 years, NTPC has emerged as a truly national power company, with power generating facilities in all the major regions of the country. Based on 1998 data, carried out by Data monitor UK, NTPC is the 6th largest in terms of thermal power generation and the second most efficient in terms of capacity utilizations amongst the thermal utilities in the world.

10

NTPC: AN OVERVIEWEstablished in 1975, NTPC, the largest power company of the country has been consistently powering the growth of India. With an installed capacity of 30,644 Mega Watt (MW), NTPC today contributes 27.08% of the nations power generation with only 20.06% of Indias total installed capacity. NTPC has embarked on plans to become a 75,000 MW company by 2017. An ISO 9001: 2000 certified company; it is worlds 6th largest Thermal Power Generator and 2nd most efficient in capacity utilization. The corporation recorded a generation of 159.11 Billion Units in 2004-05, through 13 coal based, 7 gas based power plants, and Joint Ventures Projects spread all over the country. Driven by its vision to lead, it has charted out an ambitious growth plan of becoming a 75,000 MW plus company by 2017. NTPC has been rated as one of the top most Best Employer of the country for the year 2003, 2004 and 2005 in a row. It has also been rated as one of the Best Companies to Work for in India by Mercer HR Consulting- Business Today Survey 2004, it has developed into a multi - location and multi- Fuel Company over the past three decades. These achievements have been made possible by the 23500 strong and motivated work forces that with their dedication are ever willing to take NTPC to greater heights NTPC was among the first Public Sector Enterprises to enter into a Memorandum of Understanding (MOU) with the Government in 1987-88. Since then, every year, NTPC has been placed under the 'Excellent category' (the best category). In recognition of its excellent performance and tremendous potential NTPC has been given the status of "Navratna" by the Government of India.

11

CORPORATE PROFILE:National Thermal Power Corporation Limited

NTPC VISION "A world class integrated power major, powering Indias growth, with increasing global presence." NTPC MISSION Develop and provide reliable power, related products and services at competitive prices, integrating multiple energy sources with innovative and eco-friendly technologies and contribute to society. Make available reliable and quality power in increasingly large quantities at appropriate tariffs and ensure timely realization of revenues. Speedily plan and implement power projects, with the contemporary technologies. Implement strategic diversification in the areas of R&M, Hydro, LNG and nonconventional and eco-friendly fuels and explore new areas like transmission on IT etc. Promote consultancy and make prudent acquisitions. Continuously develop competent HR to match world standards. Be a responsible corporate citizen, with thrust on environment protection rehabilitation and ash utilization.

HR VISION "To enable our people to be a family of committed world class professionals, making NTPC a learning organization" CORE VALUES (COMIT) Customer Focus Organizational Pride Mutual Trust and Respect Initiative and Speed Total Quality

12

COMITCustomer Focus: 1. Has conviction that the customer is the centre of all activity and attention. 2. Is courteous, sincere, patient and sensitive to the customers. 3. Honors commitment on time. Organizational Pride: 1. Holds the company in high esteem. 2. Rejoices in belonging to it. 3. Demonstrate loyalty and commitment to the organization. 4. Has a sense of ownership and belongingness with it. Mutual Respect and Trust: 1. Has high regard for and faith in the fellow organizational members. 2. Believes in collaboration and openness. 3. Has good team spirit. Initiative and speed: 1. Believes in taking the first step. 2. Thinking new and ahead. 3. Being swift with our compromising on quality. 4. Is creative and innovative. 5. Has the willingness to experiment and take risks. Total Quality: 1. Believes in pursuing excellence in all spheres of activity. 2. Makes continues efforts in improving standards of performance, systems and processes.

CORPORATE OBJECTIVE1. Growth: To add generating capacity within prescribed time and cost. To expand consultancy operation and to participate in ventures abroad. To diversify into hydro and non-conventional energy sources for power generation. To diversify into power related business to ensure integrated development of energy sector in India. To achieve continuous performance improvement in the areas of project implementation, plant operation and maintenance, generation efficiency etc

13

and to acquire and sustain internationally comparable standards in these areas with good business ethic and values.

14

2. Human Resource Development: To develop learning organization having knowledge based competitive edge. To create a culture of team building, empowerment and accountability to convert knowledge into productive action with speed, creativity and flexibility. 3. Financial Soundness: To maintain and improve the financial soundness of NTPC Ltd by managing the financial resources in accordance with the best commercial utility practices. To develop appropriate commercial policies which ensure remunerative tariffs and minimum receivables? 2. Technology Leadership: To acquire, assimilate and adopt reliable, efficient and cost effective technologies and to disseminate knowledge to other constituents of the power sector in the country. 3. Sustainable Power Development: To contribute to sustainable development by functioning as a responsible corporate citizen and discharge social responsibilities in the areas of environment protection and rehabilitation. The corporation will strive to utilize the ash produced as its stations to the maximum extent possible. 4. Research Development: To carry out Research and Development for efficient and reliable operation of power plants in the country.

NTPCS GROWTH CHART

15

NTPC's core business is engineering, construction and operation of power generating plants and also providing consultancy to power utilities in India and abroad. As on date the installed capacity of NTPC is 30,644 MW through its 14 coal based, 7 gas based and 3 Joint Venture Projects. NTPC acquired 50% equity of the SAIL Power Supply Corporation Ltd. (SPSCL). This JV company operates the captive power plants of Durgapur (120 MW), Rourkela (120MW) and Bhilai (74 MW).

SUBSIDIARIES OF NTPCNTPC Electric Supply Company Ltd (NESCL): NESCL is a wholly owned subsidiary of NTPC. It was incorporated in August 2002 with the objective to acquire, establish & operate Electricity Distribution Network in various circles/cities across India. The company provides consultancy in the area of: Turnkey execution, Project monitoring, Quality Assurance and Inspection, and Third Party Quality inspection on the behalf of utility. NTPC Vidyut Vyapar Nigam Ltd. (NVVN): It was formed to cater to and deal with the vast potential of power trading in the country and optimum capacity utilization. NTPC Hydro Limited (NHL): It was set up in December, 2002 to develop small and medium sized Hydro Electric Power Projects of up to 250 MW capacities.

MAJOR ACHIEVEMENTS OF NTPC

Largest thermal power generating company of India. Sixth largest thermal power generator in the world. Second most efficient utility in terms of capacity utilization. One of the nine PSUs to be awarded the status of Navratna. Provides power at the cheapest average tariff in the country.

PRODUCTS AND SERVICES OF NTPCPower generation is the main activity of NTPC which has an installed capacity of 27,850 MW shared by 22 generating stations. Four generating stations in joint venture have an additional capacity of 2044 MW. Consultancy in fields of water supply and treatment, fossil fuel based thermal power stations, environment engineering, and cogeneration plants. Consultancy service has got NTPC over 435 domestic and international orders. Power Management Institute in Noida provides classroom training in power plant operations and management. Full Scope Replica Training Simulator for coal and gas based power plants makes training meaningful and effective. Students from outside NTPC can also undergo these training schedules.

16

NTPC LIMITED - FINANCIAL AND STRATEGIC ANALYSIS REVIEWNTPC Limited (NTPC) is an independent power company. The company is engaged in the development, engineering, construction and operation of power generating plants. NTPC sells electricity to bulk consumers, principally electricity utilities companies or entities owned by States Government. Further, it is also engaged in providing consultancy services for power plant construction and power generation to companies in domestics as well as international. NTPC is the largest thermal power generating company in India as well as stand sixth in world. In 2008, the company's gross generation was 2,00,863 million units of electricity. Indias largest power company, NTPC was set up to accelerate power development in India. NTPC is emerging as a diversified power major with presence in the entire value chain of the power generation business. Apart from power generation, which is the mainstay of the company, NTPC has already ventured into consultancy, power trading, ash utilization and coal mining. NTPC ranked 317th in the 2009, Forbes Global 2000 ranking of the Worlds biggest companies. This power generation company established in 1975 aims at becoming an integrated power commanding height with total power value chain. The total installed capacity of the company is 30, 644 MW (including JVs) with 15 coal based and 7 gas based stations, located across the country. In addition under JVs, 3 stations are coal based & another station uses naphtha/LNG as fuel. By 2017, the power generation portfolio is expected to have a diversified fuel mix with coal based capacity of around 53000 MW, 10000 MW through gas, 9000 MW through Hydro generation, about 2000 MW from nuclear sources and around 1000 MW from Renewable Energy Sources (RES). NTPC has adopted a multi-pronged growth strategy which includes capacity addition through green field projects, expansion of existing stations, joint ventures, subsidiaries and takeover of stations. NTPC's coal based power stations are at: Singrauli (Uttar Pradesh), Korba (Chattisgarh), Ramagundam (Andhra Pradesh), Farakka (West Bengal), Vindhyachal (Madhya Pradesh), Rihand (Uttar Pradesh), Kahalgaon (Bihar), NTCPP (Uttar Pradesh), Talcher (Orissa), Unchahar (Uttar Pradesh), Simhadri (Andhra Pradesh), Tanda (Uttar Pradesh), Badarpur (Delhi), and Sipat (Chattisgarh). NTPC's Gas/Liquid based power stations are located at: Anta (Rajasthan), Auraiya (Uttar Pradesh), Kawas (Gujarat), Dadri (Uttar Pradesh), JhanorGandhar (Gujarat), Rajiv Gandhi CCPP Kayamkulam (Kerala), and Faridabad (Haryana). NTPC's Power Plants with Joint Ventures are located at: Durgapur (West Bengal), Rourkela (Orissa), Bhilai (Chhattisgarh), and RGPPL (Maharastra). NTPC has been operating its plants at high efficiency levels. Although the company has

17

18.79% of the total national capacity it contributes 28.60% of total power generation due to its focus on high efficiency.

In October 2004, NTPC launched its Initial Public Offering (IPO) consisting of 5.25% as fresh issue and 5.25% as offer for sale by Government of India. NTPC thus became a listed company in November 2004 with the government holding 89.5% of the equity share capital. The rest is held by Institutional Investors and the Public. The issue was a resounding success. NTPC is among the largest five companies in India in terms of market capitalisation.

18

At NTPC people before Plant Load Factor is the mantra that guides all HR related policies. NTPC has been awarded No.1, Best Workplace in India among large organizations for the year 2008, by the Great Places to Work Institute, India Chapter in collaboration with The Economic Times. The concept of Corporate Social Responsibility is deeply ingrained in NTPC's culture. Through its expansive CSR initiatives NTPC strives to develop mutual trust with the communities that surround its power stations. Right from social to developmental work of the community and welfare based dependence to creating greater self reliance; the constant endeavor is to institutionalise social responsibility on various levels.

NTPCS EMPLOYER SURVEYNTPC has been ranked fifth among the top ten "Best companies to work for in India" by Mercer HR Consulting-Business Today Survey 2005. This is the third consecutive year that NTPC has appeared in this prestigious list. Besides, NTPC is also the only PSU among the top ten companies. The survey was conducted on the basis of four attributes such as HR Metrics, HR Processes and policy, Internal Employee Perception & Stake holder Perception on a weighted scale to arrive at a total score for each company surveyed.

NTPC has also been ranked as "3rd Great Place to Work" for in India again according to the survey conducted by Grow Talent and Business World 2005. What makes NTPC stand apart is its ability to balance concern for its employees with a high performance work culture. All NTPC employees have a Projects Managers obsession with deliverables and deadline.

19

MAJOR POWER STATIONS OF NTPC

20

NTPC POWER LOCATION STATIONS

21

NTPC - GROWTH PLANSThe liberalization process initiated in the year 1991 and the new power policy announced by the Government in October 1991 have redrawn the contours of power industry in the country. Participation of the private sector in the hitherto exclusive domain of the Government in power generation, transmission and distribution is bringing in fundamental changes in the sector. Thus the terminal year of this Plan, year 2012,will witness a very different scenario with patterns of ownership of assets significantly altered, and the norms of project implementation, plant availability & reliability, operations etc. changed to match international standards. The emerging competition form Independent Power Producers (IPPs), stringent environmental regulations, uncertainties in fuel linkages, funds constraints, restraints, restructuring of reforms in the power sector are all crucial and interrelated factors having major impact on business decisions. These fundamental changes have necessitated a fresh look at how we do our business and what it is that we must do to achieve our vision: "To be one of the world's largest and best power utilities, powering India's growth". To realize this vision, NTPC has drawn up a detailed Corporate Plan for the period 19972012 which represents the company's collective optimism and enthusiasm, inspired by a glorious past, a vibrant present and a brilliant future. The Plan has been prepared in-house in consultation the committed, competent and confident members of the NTPC family. The road map that has been charted out was after a thorough scan of the strengths and weaknesses within the organization as well as opportunities and threats in the environment. Considering multidimensional opportunities in the energy sector, NTPC will adopt a multipronged growth strategy for capacity addition through greenfield sites, expansion of existing stations, takeovers and joint ventures. The capacity addition plans that we have drawn up for the fifteen-year period using all the above strategies to enable the corporation to become a 75,000 MW company by 2017.

22

In addition to the above, NTPC also has plans to venture into the following areas: Renovation & Modernization of old power stations through a separate joint venture company that are

Investment in LNG terminal; Investment in coal mining and washeries; Setting up of power plants abroad; Joint ventures for ash-based industries; Setting up of small pilot plants using renewable energy sources; Setting up of hydel power plants to facilitate techno-economic operation of thermal-hydro mix of NTPC stations; Setting up of associated extra high voltage transmission lines / inter-regional EHV transmission lines so as to ensure evacuation of power from NTPC stations.

23

NTPC NEW PROJECTSThe company has formulated a long term Corporate Plan for 15 years upto 2012. The Corporate Plan seeks to integrate the Company's vision, mission and strategies for growth with the national plans and to provide the company the cutting edge in the emerging competitive environment. NTPC is targeting to become a '40000 MW Plus' company by 2012. PROJECTS UNDER CONSTRUCTION TOTAL CAPACITY - 10990 MW Project (State) Capacity (MW) Fuel Coal Coal Coal Coal Coal Coal Coal Coal Commission Schedule Unit - VII Aug 2005 Unit III Unit - IV May 2006 Unit IX Unit - X Aug 2007 Unit V Unit - VI May 2007 Unit - VII Nov 2008 Unit I Unit II Unit - III Dec 2009 Unit I Unit - II Dec 2007 Unit - I Sep 2006 Unit I Unit II Unit III Unit - IV Apr 2009 Nov Jan Mar 2008 2009 2009 Apr Feb Jun 2008 2009 2007 Aug Feb Nov 2005 2007 2006

Ramagundam - III (Andhra Pradesh) 500 Rihand (Uttar Pradesh) Vindhayachal (Madhya Pradesh) Kahalgaon Phase Stage I (Bihar) Kahalgaon Phase Stage II (Bihar) Sipat - I Sipat - II Unchahar (Uttar Pradesh) Koldam (Himachal Pradesh) Talcher (Orissa) Total -II II 1000 (2x500) III 1000 (2x500) II 1000 (2x500) II 500 (1x500) 1995 (3x665) 1000 (2x500) III 210 (1x210) 800 (2x400)

Hydro

2000 (4x500) 10,005

Coal

Unit - III 500 MW Jan 2003* Unit - IV 500 MW Oct 2003* Unit - V 500 MW May 2004 Unit - VI 500 MW Feb 2006

*Already commissioned

24

MW

NEW PROJECTS BEING PURSUED FOR CAPACITY ADDITION FOR TENTH PLAN AND BEYONDIn addition to the above, a host of new power projects as given below are being pursued for further capacity addition in the 10th plan and beyond: S. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Project/ State Bhilai CPP-II Expansion-JV with SAIL Nabinagar-JV with Railways Barh/ Bihar North Karanpura/ Jharkhand Kawas-II/ Gujarat Gandhar-II/ Gujarat Loharinag Pala/ Uttaranchal Tapoban Vishnugad/ -doCapacity (MW) 500 1,000 1,980 1,980 1,300 1,300 600 520

Lata Tapovan/ Uttaranchal to be implemented by 108 NTPC Hydro Ltd, a wholly owned subsidiary of NTPC Kayamkulam II/ Kerala Ennore JV with TNEB 1,950 1,000

25

NTPC JOINT VENTURESNTPC, with a rich experience of engineering, constructing and operating nearly 20,000 MW of thermal generating capacity, is the largest and one of the most efficient power companies in India, having operations that match the global standards. NTPC has identified Joint Ventures, strategic alliances as well as acquisitions and diversifications as viable and desired options for its business development. NTPC looks for opportunity to create such joint ventures and strategic alliances, in the entire value chain of the power business. NTPC as a partner endows the Joint Venture Alliances with a winning edge. Acquisitions and Diversifications in the areas related to the core business not only ensure growth but also add to the robustness of the company. The following joint venture companies have been formed so far: NTPC - ALSTOM POWER SERVICES PVT. LTD. (NASL) (Incorporated in 1999 and formerly known as NTPC-ABB ALSTOM POWER SERVICES PVT. LTD) PROMOTERS'EQUITY: NTPC: 50% ALSTOM Power Generation AG: 50% UTILITY POWER TECH LTD (Incorporated in 1996) This JV has been promoted with BSES Limited, a private sector Indian Power Company. PROMOTERS' EQUITY: NTPC: 50% BSES: 50% POWER TRADING CORPORATION (Incorporated in 1998) This JV has been promoted with Power Grid Corporation of India Ltd (PGCIL), a Government owned transmission major in India. Power Finance Corporation (PFC), a power sector finance company owned by the Government of India and National Hydro Electric Power Corporation Ltd. (NHPC), a Government owned hydropower utility. PROMOTERS' EQUITY: NTPC:8% , Tata Power:10% PGCIL:8%, DV:10% PFC:8% , FII:18.5%

26

NHPC:8% *Balance 29.5% unallocated.

NTPC-SAIL

POWER

COMPANY

(PVT)

LTD

(NSPCL)

This JV has been formed on 23rd March, 2001 with Steel Authority of India Ltd (SAIL), a Government of India undertaking engaged in the steel manufacturing business and owns four large integrated steel plants in the country PROMOTERS' EQUITY: NTPC: 50%, SAIL: 50% BHILAI ELECTRIC SUPPLY COMPANY LTD (BESCL) This JV has been formed on 22nd March 2002 with Steel Authority of India Limited (SAIL), a Government of India undertaking engaged in the steel manufacturing business. PROMOTERS' EQUITY: NTPC: 50%, SAIL: 50%

SOCIAL RESPONSIBILITYNTPC fulfilled the social responsibility by taking initiative for protecting the environment in the following ways Harmony between man and environment is the essence of healthy life and growth. Therefore, maintenance of ecological balance and a pristine environment has been of utmost importance to NTPC. Environment protection continues to be a key area of activity in NTPC along with growth in generation of power. Driven by its commitment for sustainable growth of power, NTPC has evolved a well defined environment management policy for minimizing environmental impact arising out of setting up of power plants and preserving the natural ecology. In November 1995, NTPC became the first public utility to bring out a comprehensive document entitled "NTPC Environment Policy and Environment Management System". Amongst the guiding principles, adopted in the document, are the company's proactive approach to environment, optimum utilization of equipment, adoption of latest technologies and continual environment improvement. The policy also envisages efficient utilization of resources, thereby minimizing waste, maximizing ash utilization and providing green belt all around the plant for maintaining ecological balance. NTPC's environment-friendly approach to power has already begun to show results in conservation of natural resources such as water and fuel (coal, oil & gas) as well as control of environmental pollution. NTPC has chalked out a set of well-defined activities that are envisaged right from the project conceptualization stage.

27

Performance enhancement and upgradation measures are undertaken by the organization during the post-operational stage of the stations. These activities have greatly helped to minimize the impact on environment and preserve the ecology in and around its power projects. These measures have been enumerated as follows. Environment Management System / ISO-14001 NTPC has established Environmental Management System (EMS) as per ISO-14001 at its different establishments. As a result of pursuing sound environment management practices, all NTPC power stations (excluding Simhadri which was commissioned recently) as well as the Corporate Environment Management and Ash Utilization Division have already been certified for ISO-14001 EMS by reputed Certifying Agencies. The only remaining station Simhadri is also in the process of obtaining the ISO-14001 Certification. Environment Policy The salient features of NTPC's Environment Policy and Environment Management System as adopted in November 1995 are enumerated below. To achieve and maintain a leader's role in the area of Environment Management in the Power Sector in the country. To keep in view the various environmental requirements in all its business decisions. To continuously adopt ways and means for Environment Protection and Environment Improvement around its business units. To adopt sound Environment Management practices. To aim at full compliance with the statutory norms / requirements.

In addition, we have specific environmental policies at our Environment management and Ash Utilization Division at Corporate Centre and at each station as a part of EMS as per ISO-14001. The Environment Policy of the Corporate Environment Management and Ash Utilization Division as adopted in March 2003 under the EMS is stated below. Continual improvement of environmental performance of all NTPC power stations in pursuance of our vision of powering Indias growth. Continually monitor all the stations for pollution prevention and environmental protection. Conservation of natural resources including land by utilizing more and more ash generated by thermal power stations of NTPC. Assist stations for compliance with relevant environmental legislations and regulations. To promote environmental awareness amongst the employees of NTPC. To create awareness of Ash Utilization and its environmental benefits among the Engineers, Builders, Architects, Potential Entrepreneurs, NTPC personnel and public at large.

Environmental Institutional Set-up 28

Realizing the importance of protection of the environment with speedy development of the power sector, the company has constituted different groups at project, regional and corporate centre level to carry out specific environment related functions. The Environment Management Group, Ash Utilization Division and Centre for Power Efficiency & Environment Protection (CENPEEP) function from the Corporate Centre and initiate measures to mitigate the impact of power project implementation on the environment and preserve ecology in the vicinity of the projects. Environment Management and Ash Utilization Groups established at each station, look after various environmental issues of the individual station. Environment Impact Assessment One of the environment conscious corporate citizens and have ensured that our efforts towards improving the environment match with our developmental efforts in the power sector. NTPC has been conducting Environment Impact Assessment (EIA) studies of the areas in the vicinity of our projects that form the basis of our efforts to protect and maintain our environment. These studies extend to around one year period, in its various power projects. This consists of literature search, field studies and impact assessment in the area of the land use, water use, socio-economic aspects, soil, hydrology, water quality, meteorology, air quality, terrestrial and aquatic ecology and noise. The EIA involves stage-by-stage evaluation of various parameters that affect the environment. Based on EIA study, wherever required, specific scientific studies are also conducted to scientifically assess the likely impact of the pollutants on the sensitive flora and fauna in the surroundings, as also, to take preventive and mitigatory measures, wherever required. A detailed post-operational regional integrated EIA study was also conducted by NTPC through M/s EdF, France for the Singrauli Area during the year 1989-90. Ecological MonitoringNTPC has undertaken a comprehensive Ecological Monitoring Programme through Satellite Imagery Studies covering an area of about 25 Kms radius around some of its major plants. The studies have been conducted through National Remote Sensing Agency (NRSA), Hyderabad at its power stations at Ramagundam (AP), Farakka, (WB), Korba (Chhatisgarh), Vindhyachal (MP), Rihand (UP). These studies have revealed significant environmental gains in the vicinity areas as a result of pursuing sound environment management practices. Some of these important gains that have been noticed are increase in dense forest area, increase in agriculture area, increase in average rainfall, decrease in waste land etc. Such studies conducted from time to time around a power project have established the environment status at various post operational stages .In general, the studies, as such, have revealed that there is no significant adverse impact on the ecology due to the project activities in any of these stations. Such studies conducted from time to time around a power project have established the environment status at various post operational stages of the project.

29

Resource Conservation With better awareness and appreciation towards ecology and environment, thermal power utilities have been continually looking for innovative and cost effective solutions to conserve natural resources and reduce wastes. Some of the measures include: Reduction in land requirements for main plant and ash disposal areas in newer units. Capacity addition in old plants, within existing land. Reduction in water requirement for main plant and ash disposal areas through recycle and reuse of water. Reduction in fuel requirement through more efficient combustion and adoption of state-of-the-art technologies such as super critical boilers. Pollution Control Systems While deciding the appropriate technology for its projects, NTPC integrates many environmental provisions into the plant design. In order to keep emission, effluents and ambient air quality well within acceptable limits, NTPC has provided the best available equipments, devices and systems such as high efficiency Electrostatic Precipitators (ESPs), Tall Stacks and Low NOx Burners for control of stack emissions, Dust Extraction and Dust Suppression Systems for control of fugitive dust, Effluent Treatment Plants, Neutralisation Pits and Ash Ponds for control of the effluent quality, Ash Water Re-circulation System and Cooling Towers for control of the effluent quality as well as conservation of water and Sewage Treatment Plant (STP) for treatment of the domestic sewage from its plant and township areas. Monitoring of Environmental Parameters A broad based Environment Monitoring Programme has been formulated and implemented in NTPC. All pollutants discharged from the power plant through stack emission, ash pond effluent, main plant effluent, domestic effluent and Condenser Cooling Water (CCW) effluent are monitored at the stipulated frequency at the source itself and at the points of discharge. In addition to the above, ambient air, surface water and ground water quality in and around NTPC plants are regularly monitored to assess any adverse impacts as a result of operation of the power plant. Environmental Reviews To maintain constant vigil on environmental compliance, Environmental Reviews are carried out at all operating stations and remedial measures have been taken wherever necessary. As a feedback and follow-up of these Environmental Reviews, a number of retrofit and up gradation measures have been undertaken at different stations Such periodic Environmental Reviews and extensive monitoring of the facilities carried out at all stations have helped in compliance with the environmental norms and timely renewal of the Air and Water Consents. On-Line Data Base Management In order to have better control on pollution and to achieve effective environment management in and around NTPC stations, it is imperative to have an on-line, reliable and efficient environment information system on the plant operational and environmental 30

performance parameters at all three levels i.e. generating Stations, Regional Headquarters and Corporate Centre. In consideration of the above, a computerized Programme, namely "Paryavaran Monitoring System" - PMS, which could provide reliable storage, prompt and accurate flow of information on environmental performance of Stations was developed and installed in NTPC. This software facilitates direct transfer of environment reports and other environment related information from stations to the Regional Headquarters and Corporate Centre. The PMS has already been implemented at Corporate Centre, four Regional Headquarters and most of the Stations. This system will help in achieving continuous improvement in NTPC's environment performance through improved monitoring and reporting system by using the trend analysis and advanced data management techniques. Liquid Waste Management System The objective of industrial liquid effluent treatment plant (ETP) is to discharge lesser and cleaner effluent from the power plants to meet environmental regulations. After primary treatment at the source of their generation, the effluents are sent to the ETP for further treatment. The composite liquid effluent treatment plant has been designed to treat all liquid effluents which originate within the power station e.g. Water Treatment Plant (WTP), Condensate Polishing Unit (CPU) effluent, Coal Handling Plant (CHP) effluent, floor washings, service water drains etc. The scheme involves collection of various effluents and their appropriate treatment centrally and re-circulation of the treated effluent for various plant uses. NTPC has implemented such systems in a number of its power stations such as Singrauli, Vindhyachal, Korba, Farakka and Kahalgaon. These plants have helped to control quality and quantity of the effluents discharged from the stations. Advanced / Eco-friendly Technologies NTPC has gained expertise in operation and management of 200 MW and 500MW Units installed at different Stations all over the country and is looking ahead for higher capacity Unit sizes with super critical steam parameters for higher efficiencies and for associated environmental gains. At Sipat (Chattisgarh), higher capacity Units of size of 660 MW and advanced Steam Generators employing super critical steam parameters have already been envisaged as a green field project. Higher efficiency Combined Cycle Gas Power Plants are already under operation at all gasbased power projects in NTPC. Advanced clean coal technologies such as Integrated Gasification Combined Cycle (IGCC) have higher efficiencies of the order of 45% as compared to about 38% for conventional plants. NTPC has initiated a techno-economic study under USDOE / USAID for setting up a commercial scale demonstration power plant by using IGCC technology. These plants can use low-grade coals and have higher efficiency as compared to conventional plants. With the massive expansion of power generation, there is also growing awareness among all concerned to keep the pollution under control and preserve the health and quality of the natural environment in the vicinity of the power stations. NTPC is committed to provide affordable and sustainable power in increasingly larger quantity. NTPC is conscious of its

31

role in the national endeavour of mitigating energy poverty, heralding economic prosperity and thereby contributing towards India's emergence as a major global economy.

CLIENTSPublic/private sector 1 2 3 4 5 6 7 8 9 10 ABB LTD. DAMODAR CORPORATION LTD . BSES LTD. ESSAR POWER LTD. G V K INDUSTRIES LTD. GRASIM INDUSTRIES LTD. GUJARAT TORRENT CORPORATION LTD. ENERGY VALLEY 12 NEPAL ELECTRICITY AUTHORITY. 13 NEYVELI LIGNITE CORPN. LTD. 14 15 NUCLEAR POWER CORPORATION LTD. POWER FINANCE CORPORATION LTD.

16 POWER GEN INDIA (PVT.) LTD. 17 SIEMENS LTD. 18 TATA ELECTRIC COMPANIES.

INDOGULF FERTILIZER & CHEM. POWER GRID CORPN. OF INDIA 19 LTD. LTD. GUJARAT INDUSTRIES POWER CO. 20 RELIANCE INDIA LTD. LTD. KARNATAKA CORPORATION LTD. POWER 21 THE AHMEDABAD ELECTRICITY CO.

11 LARSEN & TOUBRO LTD. State Power Utilities 1 A P POWER GEN. CORPN. LTD. 9 KARNATAKA ELECT. BOARD

2 A P POWER TRANSMISSION 10 M P STATE ELECT. BOARD CORPORATION LTD. 3 CENTRAL AUTHORITY ELECTRICITY 11 MAHARASHTRA BOARD STATE ELECT.

4 DELHI VIDYUT BOARD. 5 ORISSA POWER GEN. CORPN. LTD. 6 GRIDCO. ORISSA 7 GUJARAT ELECTRICITY BOARD

12 PUNJAB STATE ELECT. BOARD 13 RAJASTHAN STATE ELECT. BOARD 14 TAMILNADU ELECT. BOARD 15 WEST BENGAL BOARD STATE ELEC.

32

8 HARYANA NIGAM

VIDYUT

PRASARAN

POWER MANAGEMENT INSTITUTE (PMI), NTPCPMI was set up by the National Thermal Power Corporation (NTPC) in recognition of the vital role of management development in the context of the challenges associated with the growth of the Indian Power Sector. PMI is committed "to be a global institute of excellence for developing world-class power professionals" by providing state-of-the-art training and management development interventions directed towards growth and development of the power sector. Over the years the institute has emerged as one of the leading learning centers for power professionals in the country. PMI has strengthened its capability to support the technical and managerial development of identified executives for distribution. A dedicated pool of experts and faculty at PMI is providing training and development of middle and senior level executives from NTPC and other organizations. An ambitious effort is now being implemented by PMI to conduct programs for the power sector in a range of areas related to technical improvement of distribution systems and distribution management systems, as well as managerial competency and skill development. Power Management Institute offers Executive Education that works. PMI has offered executive education courses for more than 20 years and continues to be a leader in the field. With a mix of more than 150 programs, diversified faculty, and excellent educational facilities, PMI offers leading-edge solutions to more than 4,000 executives annually apart from interacting with a large population of power professionals from other organizations. NTPC runs a state-of-the-art Power Management Institute (PMI), at NOIDA. PMI has over the years trained a large number of professionals from NTPC, State Electricity Boards and other power utilities in the country. Also, participants in PMI programmes have come from various South Asian and Middle Eastern countries. With a wide range of expertise and experience acquired over the years, PMI offers programmes in the following categories: 1. Enhancing General Management Competence and Skills:The programmes included in this category develop the knowledge, attitude, behaviour and skills of the participants from the perspective of general management of the enterprise. 2. Enhancing Technical Expertise:These programmes are designed to impart emerging technologies and practices that augment technical skills and competencies. 3. Upgrading Functional Skills:The programmes in this category cater to the functional areas of the organization like HR, Finance, Materials, Contracts etc 4. Managing Information Technology: IT enablement is a key determinant of organization success and these programmes provide the required knowledge and skills. 5. Induction Level Training Programmes: A key area of expertise is the Induction level training programme for newly recruited executive trainees in Engineering, Chemistry, IT, Finance and Human Resources

33

6. Employee Development Programmes: Programmes are conducted for the Supervisors and Workmen of our Corporate Centre Office in the areas of power plant familiarization, attitude, quality, finance and IT.

OVERVIEWThe Power Management Institute (PMI) was set up by NTPC in recognition of the vital role that management development has to play, in the context of the challenges associated with the growth of the Indian Power Sector. The Institute is involved in the training and development of middle and senior level personnel not only from the power sector but from organizations outside the sector also.

The Power Management Institute is committed to be a leading institute in developing world-class competencies by providing a state-of-the-art training, which responds to and proactively meets the needs of the power professionals. The Institute has an infrastructure capable of conducting eight programmes concurrently. This year the Institute has set an ambitious target of conducting over 200 programmes of varied durations and diverse themes. Apart from training programmes, PMI also offers the following services: Open Learning Services. Testing services for conduct of departmental examinations. Integrated personality development including language proficiency, dramatics and other fine arts. Professional update sessions wherein discussions are held after screening of management or technical films.

34

LUSH GREEN INTERNAL INFRASTRUCTURE

PMI LOGO

35

PMI VISIONTo be a global institute of excellence for developing world class power professionals

PARTICIPATIONNominations for all programmes at the Institute are to be sent three weeks before the commencement of the programme. The acceptance of the nominations will be duly confirmed by the Institute. An information regarding nominations can also be sent through e-mail or directly from PMI's Website. Organizations other than NTPC Projects and Divisions should remit the course fee in the name of "NTPC Ltd.," through crossed cheque/draft payable at New Delhi.

LOCATIONPMI is located on outer NOIDA road (near film-city) in Sector 16-A, NOIDA and faces the green belt along the Yamuna Bandh. NOIDA is a suburb of New Delhi, situated in Uttar Pradesh. PMI Campus is merely 2 Kms from Delhi-UP Border. The Rail Heads for Noida are Delhi, New Delhi and Hazarat Nizamuddin Stations. Airport is Delhi Airport. Taxis ply upto the campus.

VENUEThe programmes are usually conducted at the campus of Power Management Institute at Noida. A few decentralized programmes are conducted at the specified Projects or other venues as indicated in the Programme venue.

ACTIVITIES To create and scan new applicable knowledge, and effect its introduction in the power sector. To design and execute need-based programmes, workshops and seminars To address key sectoral issues through research and policy seminars. To carry out applied research in management areas To undertake consultancy assignments in management and technical areas of the power sector. These activities are carried out in an integrated manner so that there is a synergistic blend of training, research and consultancy. While in the initial years, the Institute's orientation was towards augmenting management skills of NTPC's executives, the Institute now provides training opportunities to executives of other organization in the power sector. These programmes offer a valuable opportunity for participants to interact with and learn from the experience of executives from a variety of operating situations. The Institute also conducts sponsored programmes in different areas of power sector management. 36

FACILITIESThe institute's integrated campus at Noida boasts of modern infrastructure and facilities. The PMI's new integrated campus at NOIDA, set amidst idyllic surroundings, has modern infrastructure and facilities that include: Lecture Rooms, Conference Rooms, Seminar Rooms, equipped with modern teaching aids and complemented by a set of smaller syndicate rooms used for group work. Power Management Institute has an elegantly designed auditorium with a seating capacity of 210 persons.

Learning Resource Center includes books, data bank and information service in print and electronic media. The Learning Resource Center also has Computer based referencing facility, Electronic Information Products (CD ROM) and on-line access to international databases. There is also an Open Learning Center which works towards augmenting management skills of NTPC's executives. The Center has multimedia facilities to support learner-centered development. The center offers a variety of modules designed to support self-managed learning and project work.

Computing facility comprises of a Local Area Network (LAN) having 23 nodes. Further, the institute has a microprocessor lab with 5 PCs and interfacing hardware. The academic and computing needs of the Institute are met through a campus wide Local Area Network which supports and integrates all the computing facilities of

37

three computer labs, faculty and administrative offices. The centralized computer labs are equipped with Compaq servers & have capacity to train about fifty participants simultaneously; catering to both high end as well as end user needs on Windows NT, Novell Netware and UNIX platforms. Internet connectivity is extended throughout the campus through a dedicated 64 kbps radio-link which is being upgraded to 128 kbps. Training Resource Unit has facilities for design and production of course-ware. The residential facilities include 50 AC Rooms and 20 suites. The recreational and sporting facilities include a Swimming Pool, a Physical Fitness Center and Gymnasium, Tennis Court, Badminton Court and facilities for Table Tennis and Billiards. The Participants' House has telephone facility in each room. The STD booth in the premises is the latest facility added.

PROGRAMMES

Enhancing General Managerial Competence And Skills Upgrading Functional Skills Career-Linked Planned Interventions Technical Planned Interventions Enhancing Technical Expertise Managing Information Technology Programmes For Non-Executives

HUMAN RESOURCE AT NTPC38

HR VISION To enable our people to be a family of committed world class professionals, making NTPC a learning organization HR GOALS To develop an organization having knowledge based competitive edge. To create culture of team building, empowerment and accountability to convert knowledge into productive action with speed, creativity and flexibility.

HR STRATEGIES Institutionalize core values for actualizing throughout the organization.

39

Imbibe a culture of openness, competence, commitment, system orientation, economy, productivity, knowledge management, communication and training. Undertake organizational renewal, restricting, periodic assessment to have a re look at various initiatives and their impact. Create motivational enabling climate of empowerment, participation, career growth, sensitive line manager and equip them to their own HR initiative and succession planning. Communication within and outside company.

'People before PLF (Plant Load Factor)' is the guiding philosophy behind the entire gamut of HR policies at NTPC. We are strongly committed to the development and growth of all our employees as individuals and not just as employees. We currently employ approximately 24500 people at NTPC. Competence building, Commitment building, Culture building and Systems building are the four building blocks on which our HR systems are based.

RECRUITMENTWe believe in the philosophy of 'Grow your own timber'. Our 'Executive Trainee' scheme was introduced in 1977 with the objective of raising a cadre of home grown professionals. First Division Graduate Engineers/ Post graduates are hired through nation-wide open competitive examinations and campus recruitments. Hiring is followed by 52 weeks of fully paid induction training consisting of theoretical input, on job training, personality development & management modules.

Theater Workshop - The orientation module for ETs include such unique practices like Theatre Workshops in order to enhance their communication skillsverbal and non verbal, team work, body language, expressions etc. conducted with the help of professional institutions like National School of Drama. Yoga - For the holistic development of the trainees, caring for their physical health and mental alertness is as important as hard skills training. Yoga and meditation are part of our orientation-training programme for Executive Trainees. Yoga sessions are scheduled every morning during the training period.

40

Corporate Social Responsibility - - In order to make new hires a part of our social responsibility drive, exposure to on-field community development and responsibilities towards Project Affected Persons is given. A special module on corporate social responsibility is a part of orientation training which covers all the important aspects of corporate social responsibility like environment, safety, health hazards, environmental impact, ash utilization etc. Mentoring "Ankur"- For effective socialization and transformation from training mode to executive capacity of taking responsibility, executive trainees are attached to mentors once they are put on job. Mentors are senior executives with 10-15 years of experience in NTPC who act as a friend, philosopher and guide to the budding power professions. Sports - To keep the trainees physically active and agile, emphasis is laid on sports activities. Sports infrastructure has been provided at each NTPC location and inter/intra unit matches are organized from time to time.

CAREER ADVANCEMENT & OPPORTUNITIESWe have a well established talent management system in place, to ensure that we deliver on our promise of meaningful growth and relevant challenges for our employees. Our talent management system comprises PERFORMANCE MANAGEMENT, CAREER PATHS and LEADERSHIP DEVELOPMENT. The brand NTPC Limited holds in it the promise of high performance, growth and challenge. For a new recruit joining the company, the company promises a challenging career with an opportunity to be a partner in nation's growth.

Performance Management - NTPC has a standardized and formalized performance management system. A KPA based system is designed to assess functional, managerial and potential competence in an objective and transparent manner. The system is designed to accomplish the overall organizational vision and mission by linking individual performance to the companys objectives and strike a balance between performance and competence to help individuals excel in their fields. Career Paths - A formal career path and development process exists in NTPC. All career paths have an underlying management structure. Promotions within each career path are aligned with the needs of the organization. Succession criteria for leadership positions in each career path have been identified, which provide basis for job rotation. Anyone joining the organization can choose to pursue a business, function or staff career path and will be put through specific training interventions and job rotation path towards becoming a business, function or staff head. Leadership Development - Potential employees are assessed for leadership competence and are groomed to occupy leadership positions in the company. We have a system that enables measurement of leadership effectiveness, gap identification against an identified set of leadership competence. Individual development plans are made based on the gaps identified to ensure that the process of development and growth is meaningful.

41

REWARDS & RECOGNITIONSWe have, from inception, created a culture of rewards and recognitions through celebration of various achievements and events and recognizing the contributions behind such success.

INNOVATE, CREATE, COMPETEWe have introduced numerous initiatives which seek to enhance the creativity, innovation, functional aptitude and teamwork of our employees. These initiatives include National Open Competition for Executive Talent (NOCET), Professional Circles, Quality Circles, Business Minds and Medha Pratiyogita (a quiz for our employees). A management journal called Horizon is published quarterly to enable the employees to share their ideas and experiences across the organization.

NTPC Open Competition for Executive Talent (NOCET)- National Open Competition for Executive Talent (NOCET) is a 3 tier theme based team event held to solicit ideas on latest issues facing the organisation. A Theme for the competition is decided by CMD of NTPC. A topic that is relevant to NTPC scenario is chosen. 3-4 member teams are formulated that compete at unit, regional and corporate levels. A panel of judges comprising of top notch NTPC executives and external experts judge the teams on their concept and presentation. Professional Circles - As a learning organisation, NTPC encourages formation of Professional circles for knowledge dissemination; knowledge updating etc. professional circles are interest groups where employees sharing same interest areas get together to share knowledge and latest developments in the field. In order to encourage and recognize professional circles, NTPC has institutionalized a threetier competition amongst the professional circles culminating at the company level. Currently, about 300 professional circles are active in the company. Quality Circles- Quality circles were introduced as an initiative to involve every grass root level employee. Under this initiative, employees volunteer to take up improvement projects in their work areas. Annual contests are organized at project level, regional level and company level in which QCs from all over NTPC compete with each other. The winning team also gets a chance to participate at National and International level QC Convention. NTPC has been winning the National Quality Circles Convention for last 4 consecutive years and has participated in International Quality Control Conventions at Bangkok(2004), South Korea (2005), Indonesia (2006) and China (2007) Business Minds- Another initiative which is very popular among NTPC employees, is called the Business Minds. This is a management game that develops strategic thinking & decision making in executives by exposing participants to simulated real life business situations that help them discover new skills. It is conducted in association with AIMA. Cross-functional teams participate in the game as it is multi disciplinary in nature reflecting real life multifunctional role of business. Qualifying teams compete at the national level. In 2008, The winning

42

team from NTPC Ramagundam also won the national management games competition conducted by AIMA and qualified to compete at the Asia level. Medha Pratiyogita- We have been conducting a quiz competition very successfully. Medha Pratiyogita is conducted for the children of NTPC employees. It features renowned Quizmaster Derek OBrien and his team. The quiz is conducted at the Project, Regional and Corporate levels. Knowledge Management in NTPC- In initiative to meet our ultimate objective of becoming a Learning Organisation, an integrated Knowledge Management has been developed. This system allows tacit knowledge in form of learning and experiences of employees to be captured and summarized for future reference. It provides adequate communication and a formal process for classification, codification, and sharing of knowledge through which employee can contribute, learn, share and generate solutions.

QUALITY OF WORK-LIFENTPC is proud of its systems for providing a good quality of work-life for its employees. In addition to providing beautiful and safe work places, NTPC encourages a culture of mutual respect and trust amongst peers, superiors and subordinates. Away from hectic city life, NTPC townships provide an environment of serenity, natural beauty and close community living. Numerous welfare and recreation facilities including schools, hospitals and clubs are provided at the townships to enhance quality of life & the well being of employees and their families. An entire range of benefits, from child care leave to post retirement medical benefits are extended to employees to meet any exigency that may arise in a person's life.

TRAINING & DEVELOPMENTNTPC subscribes to the belief that efficiency, effectiveness and success of the organisation, depends largely on the skills, abilities and commitment of the employees who constitute the most important asset of the organisation. Our Training Policy envisages a minimum of 7 man days of training per employee per year. We have developed our own comprehensive training infrastructure. Therefore, a lot of emphasis is laid on the training and development of employees. NTPC view of employee development has a very wide perspective and is not constrained to job related inputs. Training in NTPC is carried out with short term and long term objectives to impart skills required to carry out various jobs and provide developmental input for the individuals and organizations future growth.

TRAINING INFRASTRUCTURENTPCs training policy envisages minimum 7 Mondays of training per employee per year. Our philosophy is to develop our own training systems and deliver training

43

internally as far as possible. Hence, NTPC has developed its own training infrastructure which comprises of Power Management Institute It is the apex training institute of NTPC located in NOIDA, close to the company headquarters and houses a world class training infrastructure. It has two residential hostels with internet broadband facility in each room. PMI has multiple training and conference rooms fitted with audio visual training aids. The PMI auditorium has a seating capacity of 300 and hosts many conferences at national and international level. PMI houses indoor badminton court, swimming pool, tennis court and gym for use of participants. The Institute has full time dedicated faculty and organizes training and conferences for NTPC and other companies as well. Employee Development Centres- Employee Development Centres (EDCs) are located at all NTPC projects and stations and take care of training needs of employees at the unit. They have similar infrastructure as that of PMI and have full time dedicated staff of 150 employees across NTPC. EDCs serve to meet the training needs that can be catered to locally. Simulator Centres - NTPC is the proud owner of two simulator training centres, for both coal based and gas based plants, which are the only ones of their kind in the country. Our gas based simulator centre is located in Kawas (Gujarat), while coal based simulator centre is in Korba. These simulator centres are meant give hands on experience of operating a power plant to our engineers. NTPC also extends this facility to many other organisations in power industry or equipment manufacturers who send their employees for training at our simulator centres.

PLANNED INTERVENTIONSFor management development, NTPC has a set of planned interventions designed for each stage in a persons career. Each of these is a custom made, medium term training programme, specifically designed to give developmental input at a particular stage in the persons career.

EDUCATION UP-GRADATION SCHEMESTo meet the academic aspirations of employees and match them with the needs of the organisation, NTPC has tie-ups with institutes of repute like MDI, Gurgaon; IIT Delhi; BITS Pilani, etc. NTPC sponsors fixed size batches of employees who are inducted into these courses based on their performance rating in the company and their performance in the entrance exam conducted by the respective institute. Unlike other study leave and sabbaticals, employees undergoing these courses do not forego their salary or growth during the duration of the course. Seeking Feedback

44

We actively seek and encourage employee feedback to ensure that our HR interventions and practices remain relevant and meaningful. We regularly conduct Employee Satisfaction and Organisational Climate Surveys. Awards We derive immense satisfaction from the awards we receive and the resulting recognition they bestow. The awards are key indicators and milestones on our HR journey, and reinforce our HR philosophy and practices. NTPC has been awarded No.1, Best Workplace in India among large organisations for the year 2008, by the Great Places to Work Institute, India Chapter in collaboration with The Economic Times.

AWARDS RECEIVED BY NTPCAWARDS & ACCOLADES NTPC Limited has been presented Scope Meritorious Award for Best Practices in Human Resource Management 2004-05 for Innovative Human Resource Management Practices well integrated with the business requirements of the Company was presented by Shri. Sontosh Mohan Dev, Honble Minister of Heavy Industries and Public Enterprises to Shri T. Sankaralingam, CMD, NTPC Limited in New Delhi, on 8th November, 2006. Shri Chandan Roy, Director (Operations), NTPC Limited has been conferred with Eminent Engineer Award by the Institution of Engineers (India), for his distinguished services in Engineering Sector during the year 2006 in the area of NCT of Delhi. A mechanical engineer by profession Shri Chandan Roy is also Chairman, Ratnagiri Power Project Limited. He is also on the Board of Damoder Valley Corporation (DVC), Northern Coal Fields Limited (NCL) and Nuclear Power Corporation of India Limited (NPCIL). On the occasion of Power Line magazines Tenth Anniversary celebrations, on 11th October, 2006 in New Delhi, Mr. Sushilkumar Shinde, Union Minister of Power presented Expert Choice Awards to honour the leading achievers in the power sector. NTPC was recognized as the "Best Organisation in Central Sector". The awards are based on the results of a survey conducted by Power Line among a carefully selected group of 600 eminent industry experts representing all key segments of the sector including central PSUs, state and private utilities, regulators, equipment manufacturers, consultancy firms, banks and FIs, employee associations, NGOs and sector analyst

WINNING ACCOLADESInternational Project Management Award (IPMA)-2008 silver medal for Project Excellence for Vindhyachal Stage III (2X500 MW).

45

Ranked number ONE in the category the 'Best Workplaces for Large Organizations' and number eight overall for the year 2008 by Great Places to Work Institutes India chapter in collaboration with Economic Times. Institute of Chartered Accountants has awarded a Silver Shield Award for Excellence in Financial Reporting for the year 2007-08 in the category of Infrastructure & Construction sector Corporate Award 2008 for Sectoral Excellence by Dun & Bradstreet. Honorary Fellowship Award by Centre for Excellence in Project Management and Project Management Award to Shri R.S Sharma, CMD,NTPC for his outstanding leadership and commitment in Project Management Best CFO in the Public Sector category to Shri A.K. Singhal, Director (Finance), NTPC Ltd for his exemplary contribution in the expansion of NTPC Limited and his outstanding role in ensuring effective governance and managing various aspects of the business by the Institute of Chartered Accountants of India (ICAI). CII- EXIM Excellence Award 2008 to three NTPC stations namely Ramagundam, Vindhyachal and Badarpur. Significant Achievement to Ramagundam and Strong Commitment to Excel award to Vindhyachal and Badarpur. Ranked No. 1 in Independent power producer & Energy Trader in Asia & 15th in overall performance in the Asia region in the Platts Top 250 Global Energy Company list. Most Valuable PSU by the premier Investment Journal Dalal Street at the First DSIJ Awards Ceremony held in New Delhi CII ITC Sustainability awards 2008 to Farakka and Faridabad in the category Certificate of commendation for strong Commitment for exemplary performance in environmental economic social dimension. Infrastructure Excellence Award to Talcher-Kaniha Stage-II by E-18 Association with CNBC-TV 18. India Power Award 2008 in the category of Energy Efficiency to NTPC- CenPEEP (Centre for Power Efficiency & Environment Protection) conferred by Council of Power Utilities Star Company of the year in the category of Public Sector Undertaking by Business Standard. IEEMA Power Awards for Excellence in Project Execution-Thermal First prize to Vindhyachal Stage III and Second Prize in Excellence in Decentralized Distribution

46

NTPC ranked 317 by Forbes Global 2000 NTPC Limited the largest power utility of the country has been ranked 317th in the Annual ranking of top 2000 public companies in the world by Forbes magazine 2009. The ranking is based on a mix of four performance metrics of sales, profit, assets and market value. Navratna Company In recognition of its excellent performance and tremendous potential NTPC has been given the status of "Navratna" by the Government of India. Best Employer NTPC has been rated as one of the top most Best Employerof the country for the year 2003, 2004 and 2005 in a row.

Nine employees of NTPC Ltd. have been awarded Rashtriya Pishwakarma Puraskar for the year 2006 on 17th September 2006 in New Delhi. Five employees of NTPC Ramagundam Project received category A award while 4 employees of NTPC Dadri Project were presented category C award. Ramagundam, Korba, Kahalgaon and Dadri projects of NTPC Limited have been conferred Safety Innovation Award-2006 instituted by Safety and Quality Forum of The Institution of Engineers(India) New Delhi. The awards were presented by Sh. R. V. Shahi, Secretary (Power) and recognize the projects for their outstanding contribution towards innovating, promoting and implementing Best Safety Practices on 6th September 2006.

NTPC Limited has bagged the prestigious DUN & BRADSTREET-AMEX Corporate Award-2006 for being Number one in the Indian Power Sector on 5th September 2006.

47

Shri A.R.Kidwai, Honble Governor of Haryana presented the Distinguished Fellowship of the Institute of Directors (IOD) to Shri T.Sankaralingam, CMD, NTPC Limited at the 17th Annual Day function of IOD held in New Delhi on 11 August 2006. Golden Peacock Eco Innovation & Environment Management Award 2005 was won by Environment Management Division, NOIDA. The Award was given on 9th June 2006 at the World Congress on Environment. NTPC wins "Commendation Certificate for Strong Commitment Among Large Business Organization" in Sustainability Awards 2006. The award has been instituted by CII-ITC Centre of Excellence for Sustainability Development for the first time this year to recognize and reward excellence in Social, Economic and Environmental Performance. NTPC Limited ranked first amongst top 10 PSEs for MOU Award for Excellence in Performance for the year 2003-04. Shri C.P. Jain, CMD, NTPC also commended for his contribution as Chairman SCOPE during April 2003-March 2005 through a Special Award. The Awards where given by Honble Vice President of India, Shri Bhairon Singh Shekhawat in a function organized by SCOPE at Vigyan Bhawan on 10th January, 06. Best Companies to work in India Business Today-Mercer Consulting 2005 has rated NTPC as fifth Best Company in India to Work For. NTPC is the only PSU and infrastructure company to figure in the top 10. Great Places to Work NTPC was ranked as Third Great Place to Work for in India, by a survey conducted by Grow Talent and Business World 2005 for the second year consecutively. Platts Global Energy Award 2005 for Community Development Program of the Year. Golden Peacock Award to PMI for providing innovative training, for the third year in succession.

48

Shri C.P. Jain, CMD, NTPC Limited was conferred with prestigious Greentech Life Time Achievement Award by Mr. Franscisco Xavier Pacheco, Agriculture Minister, Government of Goa, at 6th Annual Greentech Conference on Environment Management held at Panaji, Goa for his outstanding contribution in the field of Environment Management and his efforts to make NTPC a front runner in the Indian Power Sector.

Shri C.P.Jain, CMD, NTPC Limited, awarded the prestigious Ernst & Young Manager Entrepreneur of the Year 2005 Award. Shri Praful Patel, Union Minister for Civil Aviation presented the Award at a glittering function at Mumbai on 11th November, 2005. Shri Montek Singh Ahluwalia, Deputy Chairman, Planning Commission was also present on the occasion. Seven NTPC Stations received CII-EXIM Business Excellence Award 2005 commendations. Dadri awarded for Significant Achievement and Kawas, Ramagundam, Rihand, Simhadri, Tanda & Vindhyachal recognized for Strong Commitment to Excel on 10th November, 2005 at Bangalore. NTPC bagged the International Project Management Award (IPMA) for its Simhadri Project for the year 2005. NTPC is the only Indian Company that has been presented this Award since the awards inception in 2002. Golden Peacock Global Award for Excellence in Corporate Governance 2005 instituted by the World Council for Corporate Governance. The award was given in a glittering function at London, on 12th May 2005. Greentech Safety Award - This award is given for outstanding achievement in the field of safety and environment management. NTPC won 09 Gold, 04 Silver 01 Bronze award on 11th May 2005 in a function at Hyderabad: Gold: Corporate Centre, Koldam, Badarpur, Simhadri, Faridabad, Farakka, Dadri, Rihand and Jhanor-Gandhar Silver: NSPCL- Rourkela, Korba, Kahalgaon, Anta Bronze: Kayamkulam

NTPC HIGHLIGHTS

49

NTPC's Coal and Gas stations recorded PLF of 93.22 % & 86.71% in April, 2009 which is the highest ever monthly PLF for the month of April. NTPC, NHPC, Power Grid and DVC signed a Joint Venture Agreement (JVA) for incorporation of a JV Company to set up an Online High Power Indigenous Test Laboratory for short circuit test facility in the country to ensure testing of the electrical equipments as per international standards in New Delhi. The Chairman & Managing Director, NTPC Limited held a press conference on April 8th, 2009 in New Delhi. The Performance Highlights including Provisional Unaudited Profit after Tax and Income of NTPC for the financial year 2008-09 was shared with the press. NTPC Coal Stations recorded the highest generation of 588.90 MU, a PLF 102.685% on 31st March, 09. The previous highest generation was 587.99 MU, with PLF of 102.53% on 26th March 09. NTPC Coal Stations recorded a PLF of 100.03% during the month of March, 2009. This is the highest ever recorded. NTPC Limited the largest power utility of the country has been adjudged the Most Valuable PSU by the premier Investment Journal Dalal Street today. NTPC's Coal Stations achieved highest single day generation of 583.24 MUs on 23.03.09 surpassing the previous best of 583.11 MUs achieved on 08.03.09 NTPC Stations recorded the highest generation of 660.25 MUs at a PLF of 98.56 percent on 6th March 2009. Surpassing the previous best of 655.22 MUs recorded some days earlier. NTPC has achieved the highest ever single day generation of 655.22 MUs on 2nd March, 2009 with highest ever single day coal based generation of 579.02 MUs. NTPCs excellence in executing power projects and its initiative in Decentralised Distributed Power Generation has been recognised and awarded at IEEMA Power Awards-2008. NTPC Vindhyachal stage III(2x 500MW) bagged the first prize in the category Excellence in Fast Track Power Project Execution- Thermal and second prize in the category Excellence in Decentralised Distributed Power Generation. NTPC announces Joint Venture with NPCIL, where NPCIL will hold 51% stake and NTPC 49%.

ORGANIZATIONAL CHART50

51

PERFORMANCE APPRAISAL IntroductionPerformance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is

52

measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does . According to Flippo, A prominent personality in the field of Human resources, performance appraisal is the systematic, periodic and an impartial rating of an employees excellence in the matters pertaining to his present job and his potential for a better job." Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future.

Employee performance Management includes: Planning work and setting expectations, Continually monitoring performance,

53

Developing the capacity to perform, Periodically rating performance in a summary fashion, and Rewarding good performance

Performance management is the systematic process by which an organization involves its employees, as individuals and members of a group, in improving organizational effectiveness in the accomplishment of organization mission and goals. It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. By focusing the attention on performance, performance appraisal goes to the heart of personnel management and reflects the managements interest in the progress of the employee.

OBJECTIVES OF PERFORMANCE APPRAISAL To review the performance of the employees over a given period of time. To judge the gap between the actual and the desired performance 54

Self assessment by employee Understanding strength and weakness. Identifying training and development needs. Identifying potential. Better understanding between appraised and appraiser. Recognizing achievements. Goal setting GOAL. Improved organizational performance. To review the performance of the employees over a given period of time. To judge the gap between the actual and the desired performance. To help the management in exercising organizational control. Helps to strengthen the relationship and communication between superior subordinates and management employees. To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future. To provide feedback to the employees regarding their past performance. Provide information to assist in the other personal decisions in the organization. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development. To reduce the grievances of the employees.

PROCESS OF PERFORMANCE APPRAISAL

55

STEPS OF PERFORMANCE APPRAISAL

ESTABLISHING PERFORMANCE STANDARDS

56

The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards.

COMMUNICATING THE STANDARDS Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators. MEASURING THE ACTUAL PERFORMANCE The most difficult part of the performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work. COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative

57

deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees performance. DISCUSSING RESULTS The result of the appraisal is communicated and discussed with the employees on one-toone basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better. DECISION MAKING The last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.

PURPOSE OF PERFORMANCE APPRAISALPerformance Appraisal is being practiced in 90% of the organizations worldwide. Selfappraisal and potential appraisal also form a part of the performance appraisal processes. Typically, Performance Appraisal is aimed at: To review the performance of the employees over a given period of time. To judge the gap between the actual and the desired performance. To help the management in exercising organizational control. To diagnose the training and development needs of the future. Provide information to assist in the HR decisions like promotions, transfers etc. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. 58

To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.

To reduce the grievances of the employees. Helps to strengthen the relationship and communication between superior subordinates and management employees.

Challenges of Performance Appraisal In order to make a performance appraisal system effective and successful, an organization comes across various challenges and problems. The main challenges involved in the performance appraisal process are: Determining the evaluation criteria Identification of the appraisal criteria is one of the biggest problems faced by the top management. The performance data to be considered for evaluation should be carefully selected. For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms Create a rating instrument The purpose of the performance appraisal process is to judge the performance of the employees rather than the employee. The focus of the system should be on the development of the employees of the organization. Lack of competence Top management should choose the raters or the evaluators carefully. They should have the required expertise and the knowledge to decide the criteria accurately. They should have the experience and the necessary training to carry out the appraisal process objectively.

59

Errors in rating and evaluation Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the evaluators rating for all other traits) etc. may creep in the appraisal process. Therefore the rater should exercise objectivity and fairness in evaluating and rating the performance of the employees.

Resistance The appraisal process may face resistance from the employees and the trade unions for the fear of negative ratings. Therefore, the employees should be communicated and clearly explained the purpose as well the process of appraisal. The standards should be clearly communicated and every employee should be made aware that what exactly is expected from him/her.

PRE-REQUISITES APPRAISAL

FOR

EFFECTIVE

&

SUCCESSFUL

PERFORMANCE

The essentials of an effective performance system are as follows: 1. Documentation means continuous noting and documenting the performance. It also helps the evaluators to give a proof and the basis of their ratings. 2. Standards / Goals the standards set should be clear, easy to understand, achievable, motivating, time bound and measurable. 3. Practical and simple format - The appraisal format should be simple, clear, fair and objective. Long and complicated formats are time consuming, difficult to understand, and do not elicit much useful information. 4. Evaluation technique An appropriate evaluation technique should be selected; the appraisal system should be performance based and uniform. The criteria for evaluation should be based on observable and measurable characteristics of the behavior of the employees. 5. Communication Communication is an indispensable part of the performance appraisal process. The desired behavior or the expected results should be

60

communicated to the employees as well as the evaluators. Communication also plays an important role in the review or feedback meeting. Open communication system motivates the employees to actively participate in the appraisal process 6. Feedback The purpose of the feedback should be developmental rather than judgmental. To maintain its utility, timely feedback should be provided to the employees and the manner of giving feedback should be such that it should have a motivating effect on the employees future performance. 7. Personal Bias Interpersonal relationships can influence the evaluation and the decisions in the performance appraisal process. Therefore, the evaluators should be trained to carry out the processes of appraisals without personal bias and effectively.

MANAGERIAL ETHICS IN PERFORMANCE APPRAISALPerformance appraisal system should be effective as a number of crucial decisions are made on the basis of score or rating given by the appraiser, which in turn, is heavily based on the appraisal system. Appraisal system, to be effective, should possess the following essential characteristics: Reliability and validity: Appraisal system should provide consistent, reliable and valid information and data, which can be used to defend the organization-even in legal challenges. If two appraisers are equally qualified and competent to appraise an employee with the help of same appraisal technique, their ratings should agree with each other. Then the technique satisfies the condition of inter-rater reliability. Appraisals must also satisfy the condition of validity be measuring what they are supposed to measure. For example, if appraisal is made for potential