Page 105 - DMGT517_PERFORMANCE_MANAGEMENT_SYSTEM

Performance Management System

Notes

Performance Improvement: The IOC Experience

Introduction
In the deregulated business environment there has emerged a growing need to accelerate
performance improvement to face the challenges of the free market and competition. With
globalization, the oil industry in India has had to gear itself to complete effectively with the
entry of private players including MNCs.

This calls for a rethinking of performance management and measurement practices and
policies that are aimed at encouraging a performance-oriented culture. Among the key
factors that drive performance improvement are differentiation of high performance, and
recognizing and rewarding it, as also setting up a transparent communication channel.
What is Performance Management?
It is said that whatever gets measured gets done and whatever gets done is measurable.

Performance measurement is a significant movement from Human Resource Development
to Human Resource Management.
It is a process that measures output in terms of delivered performance in relation to
expectations expressed as objectives. A forward-looking developmental approach,
performance management is more a transformational rather than an appraisal process. A

smart approach in goal-setting presupposes that goals are specific, measurable, achievable,
relevant and time targeted.
Performance quotient is a function of emotional quotient plus intelligence quotient, which
indicates that possessing intelligence or knowledge is not enough for high performance. It
must be supplemented by emotional maturity.

The Oil Industry Context
The oil industry, in general and Indian Oil in particular, has been experiencing a variety
of concerns in the recent past due to the opening up to the market. These concerns relate
to the following:
1. Extreme pressure on the bottoms line
2. Commercial competitiveness
3. Dismantling of the administered pricing mechanism (APM)

4. Entry of big players
5. Squeezed resources
6. Enhanced stakeholder expectations
7. Social aspect of business

In view of the above, some of the critical issues confronting the management are:
1. Moving from potential to performance
2. Providing an environment to excel
3. Enhancing competitiveness
4. Creating differentiators for performers
Contd....

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