Page 107 - DMGT517_PERFORMANCE_MANAGEMENT_SYSTEM

Performance Management System

Notes In the fiercely competitive market environment, Indian Oil has been working towards

evolving innovative schemes to recognize and reward high performance which also can
serve as a strong incentive to other employees of the organization. Towards this end, the
marketing division has developed a unique scheme that recognizes the performance by
various section of the marketing division. It has also evolved a highly comprehensive
methodology for differentiating the high performers who deserve rewards.
Performance Management Schemes

Some of the incentive schemes implemented at Indian Oil are:
1. Productivity-linked incentives bonus, region/unit-wise
2. Ex-gratia (applicable for all)
3. Performance-related incentives (for super perfumers)
Methodology
The steps involved in carrying out the schemes are threefold.

Step 1: Target Setting
The scheme is goal-oriented. Targets are broken down and allocated top-down across all
the levels. The allocation is done by the Head Offi ce based on annual growth projections
aligned with business realities. These targets are agreed upon and owned by the business
heads at various levels as benchmarks of their performance.

In accordance with the methodology, target setting is done: region-wise by the Head Offi ce:
state-wise by the regions; and location-wise by the State Offi ces.
Step 2: Measurement

The measurement parameters provide for the consequences of performance by assigning
weightage and value to achievements, including negative marking.
Step 3: Evaluation

The final evaluation is carried out by evaluation committees at the state, regional and head

office levels. The HRD department coordinates the entire process.
Towards High Performance with an Integrated Approach
To motivate teams to not only delivers performance for achieving targets but also to
strive for excellence in the entire range of service, quality, safety and other related areas of

performance. The Indian Oil marketing division identified the key business units and also
the frontline personnel responsible for achieving critical business results. The performance
parameters of the following personnel throw light on the various areas of performance
taken into consideration.

1. Best Head of State: Performance Parameters
(a) Market share
(b) LPG enrolment
(c) Indane showroom computerization

(d) Inspections
(e) Growth in profi tability
(f) Computerization, Executive information system

Contd....

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