The main aim of this report is to evaluate the effectiveness of Performance Management System in Tata Indicom Company. The main objective of this project will go through the history and structure of the Tata Indicom company. The report will also examine the different types of theoretical approaches which is suitable for the company. It will also show the study of Performance management and Performance Appraisal in depth. The literature review research will help in findings by developing the framework on which the research is done. The framework will be used to critically evaluate the effectiveness of the Tata Indicom performance management. The final part conclusion and recommendation is formulated from the deep research of critically evaluating and findings.

INDUSTRY PROFILE

Introduction

The Indian Telecommunications network is the fifth largest in the world with 110.01 million connections and in emerging economies of Asia it comes among second largest in the world. Presently, it is growing fastest in the world market and presents again the unequaled opportunities for companies in United States in the stagnant worldwide scenario. The total subscriber base, which has grown by 40% in 2005, is expected to reach 250 million in 2007. By 2007 Government of India aims nine million broadband connections and eighteen million internet connections as per Broadband Policy 2004. In 2004 the wireless subscriber has jumped from 33.69 million to 62.57 million in financial year 2004-2005. Previous three years, every three new telephone subscribers were wireless subscribers out of two. Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as compared to only 40% in 2003. By 2007 the wireless subscriber growth is expected to bypass 2.5million new subscribers per month. Global Mobile Communications (GSM) and Code Division Multiple Access (CDMA) are in currently use of wireless technologies. In Nineteen telecom circles and 4 metro cities, 2000 towns across the country has primarily 9 GSM and 5 CDMA operators providing mobile services.

A large population, low telephony penetration levels, and a rise in consumer’s income and spending owing to strong economic growth have helped make India the fastest-growing telecom market in the world. The first and largest operator is the state-owned incumbent BSNL, which is also the 7th largest telecom company in the world in terms of its number of subscribers. BSNL was created by corporatization of the erstwhile DTS (Department of Telecommunication Services), a government unit responsible for provision of telephony services. Subsequently, after the telecommunication policies were revised to allow private operators, companies such as Bharti Telecom, TATA Indicom, Vodafone, MTNL, Idea,Vodafone and BPL have entered the space. Major operators in India. However, rural India still lacks strong infrastructure.

In 2007, an article by Business week magazine reported that India’s mobile phone market is the fastest growing in the world, with companies adding some 6 million new customers a month.

The total number of telephones in the country crossed the 300 million mark on June 18 2008The overall tele-density has increased to 36.98% in March 2009 In the wireless segment, 15.87 million subscribers have been added in March 2009. The total wireless subscribers (GSM, CDMA & WLL (F)) base is more than 391.76 million now. The wireline segment subscriber base stood at 38.22 million with a decline of 0.13 million in October 2008.

COMPANY PROFILE

TATA GROUP

TATA is a rapidly growing business group based in India with significant international operations. Revenues in 2007-08 are estimated at $62.5 billion (around Rs251543 crore) of which 61 per cent is from business outside India. The Group employs around 350,000 people worldwide. The TATA name has been respected in India for 140 years for its adherence to strong values and business ethics. The business operations of the TATA Group currently encompass seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. The Group’s 27 publicly listed enterprises have a combined market capitalisation of some $60 billion, among the highest among Indian business houses, and a shareholder base of 3.2 million. The major companies in the Group include TATA Steel, TATA Motors, TATA Consultancy Services (TCS), TATA Power, TATA Chemicals, TATA Tea, Indian Hotels and TATA Communications.

The Group’s major companies are beginning to be counted globally. TATA Steel became the sixth largest steel maker in the world after it acquired Corus. TATA Motors is among the top five commercial vehicle manufacturers in the world and has recently acquired Jaguar and Land Rover. TCS is a leading global software company, with delivery centres in the US, UK, Hungary, Brazil, Uruguay and China, besides India. TATA Tea is the second largest branded tea company in the world, through its UK-based subsidiary Tetley. TATA Chemicals is the world’s second largest manufacturer of soda ash. TATA Communications is one of the world’s largest wholesale voice carriers.

In tandem with the increasing international footprint of its companies, the Group is also gaining international recognition. Brand Finance, a UK-based consultancy firm, recently valued the TATA brand at $11.4 billion and ranked it 57th amongst the Top 100 brands in 11 the world.

Business week ranked the Group sixth amongst the world’s most Innovative Companies and the Reputation Institute, USA, recently rated it as the World’s Sixth most Reputed Firm founded by Jamsetji TATA in 1868, the TATA Group’s early years were inspired by the spirit of nationalism. The Group pioneered several industries of national importance in India: steel, power, hospitality and airlines. In more recent times, the TATA Group.s pioneering spirit has been showcased by companies like TATA Consultancy Services, India’s first software company, which pioneered the international delivery model, and TATA Motors, which made India’s first indigenously developed car, the Indica, in 1998 and recently unveiled the world’s lowest-cost car, the TATA Nano, for commercial launch by end of 2008.

The TATA Group has always believed in returning wealth to the society it serves. Two thirds of the equity of TATA Sons, the TATA Group’s promoter company, is held by philanthropic trusts which have created national institutions in science and technology, medical research, social studies and the performing arts. The trusts also provide aid and assistance to NGOs in the areas of education, healthcare and livelihoods. TATA companies also extend social welfare activities to communities around their industrial units. The combined development-related expenditure of the trusts and the companies amounts to around 4 per cent of the Group’s net profits.

Going forward, the Group is focusing on new technologies and innovation to drive its business in India and internationally. The Nano car is one example, as is the Eka supercomputer (developed by another TATA company), which in 2008 is ranked the world’s fourth fastest. The Group aims to build a series of world class, world scale businesses in select sectors. Anchored in India and wedded to its traditional values and strong ethics, the Group is building a multinational business which will achieve growth through excellence and innovation, while balancing the interests of its shareholders, its employees and wider society.

CORE VALUES OF TATA

Purpose

At the TATA Group “our purpose is to improve the quality of life of the communities we serve. We do this through leadership in sectors of national economic significance, to which the Group brings a unique set of capabilities. This requires us to grow aggressively in focused areas of business. Our heritage of returning to society what we earn evokes trust among consumers, employees, shareholders and the community. This heritage is being continuously enriched by the formalization of the high standards of behaviour expected from employees and companies”. The TATA name is a unique asset representing leadership with trust. Leveraging this asset to enhance Group synergy and becoming globally competitive is the route to sustained growth and long-term success.

FIVE CORE VALUES

The TATA Group has always sought to be a value-driven organization. These values continue to direct the Group’s growth and businesses. The five core TATA values underpinning the way we do business are:

Integrity:

We must conduct our business fairly, with honesty and transparency. Everything we do must stand the test of public scrutiny.

Understanding:

We must be caring, show respect, compassion and humanity for our colleagues and customers around the world, and always work for the benefit of the communities we serve.

Excellence:

We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide.

Unity:

We must work cohesively with our colleagues across the Group and with our customers and partners around the world, building strong relationships based on tolerance, understanding and mutual cooperation.

Responsibility:

We must continue to be responsible, sensitive to the countries, communities and environments in which we work, always ensuring that what comes from the people goes back to the people many times over.

INDICOM – PROFILE

•Brand Name: TATA Indicom

•Network: CDMA 2000-1x

•Network Coverage: 20 Telecom circles

•Subscriber base: > 2 million

•Market Share: 8 . 10%

•Subscriptions: Post Paid, Pre Paid , internet facility

TATA Teleservices is part of the INR Rs. 2,51,543 Crore (US$ 62.5 billion) TATA Group, that has over 80 companies, over 3,30,000 employees and more than 3.2 million shareholders. With a committed investment of INR 36,000 Crore (US$ 7.5 billion) in Telecom (FY 2006), the Group has a formidable presence across the telecom value chain.

TATA Teleservices spearheads the Group’s presence in the telecom sector. Incorporated in 1996, TATA Teleservices was the first to launch CDMA mobile services in India with the Andhra Pradesh circle.

Starting with the major acquisition of Hughes Tele.com (India) Limited [now renamed TATA Teleservices (Maharashtra) Limited] in December 2002 the company swung into an expansion mode. With the total Investment of Rs 19,924 Crore, TATA Teleservices has created a Pan India presence spread across 19 circles that includes Andhra Pradesh, Gujarat, Karnataka, Delhi, Maharashtra, Mumbai, Tamil Nadu, Orissa, Bihar, Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (W), Kerala, Kolkata, Madhya Pradesh and RoWB. Having pioneered the CDMA 1X technology platform in India, TATA Teleservices has established a robust and reliable 3G ready telecom infrastructure that ensures quality in its services. It has partnered with Motorola, Ericsson, Lucent and ECI Telecom for the deployment of a reliable, technologically advanced network. The company, which heralded convergence technologies in the Indian telecom sector, is today the market leader in the fixed wireless telephony market with a total customer base of over 3.8 million.

TATA Teleservices bouquet of telephony services includes Mobile services, Wireless Desktop Phones, Public Booth Telephony and Wireline services. Other services include value added services like voice portal, roaming, post-paid Internet services, 3-way conferencing, group calling, Wi-Fi Internet, USB Modem, data cards, calling card services and enterprise services.

Some of the other products launched by the company include prepaid wireless desktop phones, public phone booths, new mobile handsets and new voice & data services such as BREW games, Voice Portal, picture messaging, polyphonic ring tones, interactive applications like news, cricket, astrology, etc.

TATA Indicom redefined the existing prepaid mobile market in India, by unveiling their offering TATA Indicom Non Stop Mobile which allows customers to receive free incoming calls. TATA Teleservices today has India’s largest branded telecom retail chain and is the first service provider in the country to offer an online channel Http://www.ichoose.in to offer postpaid mobile connections in the country.

TATA Teleservices has a strong workforce of 6000. In addition, TTSL has created more than 20,000 jobs, which will include 10,000 indirect jobs through outsourcing of its manpower needs. Today, TATA Teleservices Limited along with TATA Teleservices (Maharashtra) Limited serves over 27 million customers in more than 6000 towns. With an ambitious rollout plan both within existing circles and across new circles, TATA Teleservices offers world class technology and user-friendly services in 19 circles.

TATA Indicom Product Profile

Product/ServicesTATA Indicom has three services Dial up internet, mobile connection, landline connection.

Products / Services

Landline Service

Mobile services

Internet

Dial up internet Prepaid mobile Wireless phones Mobile internet Post paid mobile Landline phones Wireless internet Mobile mobile

Literature Review

Performance Management

Performance management is a process which business uses to achieve its targets and objectives effectively. It includes such processes as planning and targeting, strategy development, performance appraisals, etc.

Performance management is important for a business because it helps the business to remain competitive, it helps to expand and help the business grow, it involves self-evaluation and other staff evaluation which helps improve the communication between staff and makes staff more aware of how well they are performing. Training and development takes a significant role in performance management. It has a major influence in promotions of employees and the future of every employee.

Managers exercise their control by planning with objectives and targets, establishing the performance standards, monitoring the actual business performance, comparing performance with targets and correcting mistakes and taking action.

In short Performance management is a continuous process based on flexible objectives closely aligned with business goals and supported by regular feedback. Employees are increasingly being given greater ownership of the process and responsibility for their own career development. But line managers still have a vital role to play in monitoring progress, providing constructive feedback and coaching employees to improve. (IDS HR Studies Jan 09) .The performance management process provides an opportunity for the employees and managers to discuss goals and develop plans for achieving those goals. Therefore, communication involve between managers and employees that they have to identify job roles and functions related to the company objectives. They get together to devise some performance appraisals to enhance the company overall performance. The performance manager responsible for supervising workforce and the group educates and develops employees potential in order to improve workforce performance. Moreover, rewards is directly employees performance.

An effective Performance Management system is based on these concepts:

Employees need to understand their roles clearly

Performance may be managed

There is a direct relationship between performance and rewards

Employee involvement is critical to performance development

Performance expectations must be set in advance and there must be agreement

Performance management requires on-going coaching, feedback and planning

Performance management can be a positive experience

Facilitate a process to establish clear role definitions and accountabilities.

Create a custom Performance Management program or improve your existing program.

Establish the objectives of your Performance Appraisal and Performance Management program.

Determine your performance criteria and integrate these criteria with your compensation systems.

Create your evaluation format.

Develop policies and procedures.

Conduct training sessions for your managers and supervisors.

Assist with the roll-out and communication of the program to your total employee group.

How managing performance for a success of a business

To begin the process, manager and the employee will collaborate on the development of performance standards. The manager will develop a performance plan that directs the employee’s efforts toward achieving specific results, to support organizational growth as well as the employee’s professional growth. Discuss goals and objectives throughout the year, providing a framework to ensure employees achieve results through coaching and mutual feedback. At the end of the rating period, manager will appraise the employee’s performance against existing standards, and establish new goals together for the next rating period.

Effective performance standards:

Serve as an objective basis for communicating about performance

Enable the employee to differentiate between acceptable and unacceptable results

Increase job satisfaction because employees know when tasks are performed well

Inform new employees of your expectations about job performance

Encourage an open and trusting relationship with employees

Quantity: Specifies how much work must be completed within a certain period of time, e.g., enters 30 enrollments per day.

Quality: Describes how well the work must be accomplished. Specifies accuracy, precision, appearance, or effectiveness, e.g., 95% of documents submitted are accepted without revision.

Timeliness: Answers the questions, By when? , How soon? , or Within what period? e.g., all work orders completed within five working days of receipt.

Effective Use of Resources: Used when performance can be assessed in terms of utilization of resources: money saved, waste reduced, etc., e.g., the computer handbook project will be completed with only internal resources.

Effects of Effort: Addresses the ultimate effect to be obtained; expands statements of effectiveness by using phrases such as: so that, in order to, or as shown by, e.g., establish inventory levels for storeroom so that supplies are maintained 100% of the time.

Manner of Performance: Describes conditions in which an individual’s personal behaviour has an effect on performance, e.g., assists other employees in the work unit in accomplishing assignments.

Method of Performing Assignments: Describes requirements; used when only the officially-prescribed policy, procedure, or rule for accomplishing the work is acceptable, e.g., 100A Forms are completed in accordance with established office procedures.

Performance Review and Development is an on-going performance management system. PRD:

Provides an avenue for staff to express their views about any aspect of work

Enhances communication between supervisors and their staff

Encourages joint planning

Facilitates the identification of training and development needs

To provide an opportunity for reviewing activities and achievements made in the previous year,

To provide an opportunity for the appraisal of staff needs in relation to staff development, career development and professional performance.

Expectations are clear well communicated and related to the goals and objectives of the department or unit staff receives frequent m constructive feedback.

Staff receives frequent, constructive feedback, including interim evaluations as appropriate.

Staff has the necessary knowledge, skills and abilities to accomplish goals.

The requirements of the performance planning and evaluation system are met and evaluations are completed by established deadlines with proper documentation

Performance issues are addressed and documented as they occur

Safety issues are reviewed and communicated to assure a safety and healthy workplace.

Objectives

The evolution of the concept of performance management as a new Human Resource Management model reflects a change of emphasis in organizations away from command and control toward a facilitation model of leadership. This change has been accompanied by a recognition of the importance to the employee and the institution of relating work performance to the strategic or long-term and overarching mission of the organization as a whole. Employees’ goals and objectives are derived from their department’s, which in turn support the mission and goals of the University.

For performance managers, this changing environment offers many new challenges and opportunities. Performance managers and their employees are increasingly being asked to become generalists who step outside of traditional narrowly-defined job descriptions in support of team objectives and goals. These changes are resulting in the development of new approaches to human resource management.

In this organization, continuous learning is a prerequisite to successful job performance and organizational effectiveness. Employees must be able to learn work, developing effective technical and people skills in order to assume new responsibilities, and keep pace with and anticipate the changing nature of work and our workplace.

For performance managers and employees alike, responding to these changes requires the ability to learn, adapt to change, solve problems creatively, and communicate effectively in diverse groups. In addition, employees must take personal and proactive responsibility for their careers to ensure future employability and advancement.

Different types of appraisal

Direct observation

Specific work results (tangible evidence that can be reviewed without the employee being present)

Reports and records, such as attendance, safety, inventory, financial records, etc.

Commendations or constructive or critical comments received about the employee’s work

Once performance objectives and standards are established, the head should observe employees’ performance and provide feedback. Manager have a responsibility to recognize and reinforce strong performance by an employee, and identify and encourage improvement where it is needed. They provide informal feedback almost every day. By observing and providing detailed feedback, they play a critical role in the employee’s continued success and motivation to meet performance expectations.

Coaching is a method of strengthening communication between Manager and the employee. It helps to shape performance and increase the likelihood that the employee’s results will meet their expectations. Coaching sessions provide manager and the employee the opportunity to discuss the progress toward meeting mutually-established standards and goals. A coaching session focuses on one or two aspects of performance, rather than the total review that takes place in a performance evaluation.

Effective coaching can:

Strengthen communication between Manager and the employee

Help the employee attain performance objectives

Increase employee motivation and commitment

Maintain and increase the employee’s self-esteem

Provide support

A typical performance management cycle

Performance planning

Setting individual objectives

Determining key behaviours for improvement

Agreeing a personal development plan

Reviewing progress

Formal interim review

Regular feedback

Amending objectives

Supporting achievement through coaching

Annual appraisal

Self- assessment

Evaluating performance

Determining ratings to inform pay decisions

Figure 1 (IDS Study 886 January 2009)

A performance management cycle typically starts with a planning meeting, where employees can discuss their goals for the forthcoming review period with their line managers, as well their development needs and career aspirations. The performance plan agreed between employees and their line mangers establishes a framework for future discussions about performance, provides role clarity and sets out the basis on which an individuals progress will be assessed. There are typically three core elements they are Individual objectives, Competencies and behaviours and personal development. Individual objectives says about what an employee needs to achieve it includes mainly about job or task oriented targets. Second element competencies and behaviours shows how employees work towards their objectives and lastly the third element personal development plans mention the development activities required to achieve individual objectives and to foster appropriate behaviours.

How does performance management work?

Performance Management is (or should be ) so all- pervasive, it needs structure to support it. These should provide a framework to help people operate, and to help them to help others to operate. But it should not be rigid system , there needs to be a reasonable degree of flexibility to allow people freedom to operate.

Performance management is a process , not an event. It operates as a continuous cycle.

Corporate strategic goals provide the starting point for business and departmental goals, followed by agreement on performance and development, leading to the drawing up of plans between individuals and managers, with continuous monitoring and feedback supported by formal reviews.

Tools of performance management

Performance and development reviews

Many organisations without performance management systems operate appraisals in which an individuals manager regularly (usually annually) records performance, potential and development needs in a top-down process.

Learning and development

Coaching

Objectives and performance standards

Competences and competencies

Measurement

Pay

Teams

360 degree feedback

Performance problem solving

Performance Appraisal

Performance appraisal is one of the most important activities in every organisation. It helps the organisation to improve its performance and individual employees as well. The process of appraisal consist the following steps, stating objectives, developing standards, system design, preparing for interview and conducting the interview. Appraisal will be successful when the process is followed in an exact manner and the method that suits the organisation. Appropriate method of conducting appraisal should be selected by the company. The method should also be related to their objectives and needs. It identifies the problems related to performance of employees and provides solutions to overcome the problems. Specific training needs are also identified and effective training is provided to employees in the areas in which they are actually lacking.

OBJECTIVES OF PERFORMANCE APPRAISAL:

        To effect promotions based on competence and performance.

        To review past performance of employees.

        To assess the training and development needs.

        To help improve current performance.

        To assess future potential.

        To assess increases or new levels in salary.

        To assist career planning decisions.

        To set performance objectives.

 

PERFORMANCE APPRAISAL PROCESS:

Source: www.rose.edu/faculty/bperryman/f6.pdf

PERFORMANCE APPRAISAL METHODS:

Measurement of performance is a very crucial aspect for any organisation. Performance appraisal can be done annually or half yearly. It is very important to any organisation to determine the methods of evaluation. To measure the quantity and quality of employee’s job performance number of methods have been devised. No method can be dismissed or accepted as they are closely related to the particular needs of an organisation or the type of employees. The most popular methods adopted by many organisations are:

        Management By Objectives (MOB)

        360 Degree Appraisal

        Critical Incident Method

        Behavioural Anchored Rating Scale

   Management by Objectives:

The method of management by objectives requires the manager to set up specific goals or objectives with each employee in the organisation and discuss with them periodically regarding the progress towards the goals.

MBO has an important role in performance management, MBO is a process in which individual performance and organisational performance is being consistently measured against objectives and targets that have been mutually agreed between managers and employees. MBO can be determined through regular meetings between managers and employees. This involves a top-down and bottom-up approach.

The processes of MBO are more likely to be successful if they meet the SMART criteria:

S – Specific- Specific means that an observable action, behaviour or achievement is described and is also linked to a rate, number, percentage or frequency.

M – Measurable- This is the process of tracking, monitoring and assessing the behaviour or action upon which the objective is focused.

A – Achievable- The objectives that are set with people need to be capable of being reached but most importantly they need to be agreed by both parties involved.

R – Realistic – This means two things: (1) The goal or target being set with the individuals where they can impact upon change. (2) Objectives are realistic and important to the business.

T – Time Based – This means there has to be a date and time for when the task staffed and when it is to be completed.

360 Degree Appraisal:

The 360 degree feedback appraisal is mostly used as a method of performance appraisal to gather traditional sources of information. It is more often used for the developmental purposes where managers get aware of their strengths and weaknesses. 360 degree appraisal is termed as the combination of information from self appraisal, sub ordinate appraisal, peer appraisal and feedback from other internal customers, with the possibility of including external suppliers and customers.

 Critical Incident Technique:

This method is one of the early attempts to move away from trait rating approaches and was advocated by Flanagan. The supervisor sets some incidents to each employee which is related to work behaviour. In this method rater is required to observe the positive and negative behaviours of the employees in the given review period. It is the method which is based on the description of the events which does not depend on the rating and ranking systems. Critical incidents can be exceedingly useful in helping employees improve since the information in them is more detailed and specific than in methods that involve rating employees.