PERFORMANCE MANAGEMENT SYSTEM OF NUMALIGARH REFINERY LIMITED

1. PERFORMANCE MANAGEMENT SYSTEM OF NUMALIGARH REFINERY LIMITED

2. Presentation Profile • Genesis • Needs and Objectives • Components of PMS • PMS Process • Salient Features of NRL PMS • Review of PBT and PRP Distribution

3. Refinery Location IOCL, Digboi Numaligarh Refinery IOCL, Guwahati IOCL, Bongai-gaon Refinery Capacity Dist. (km) from (MMTPA) Numaligarh Refinery Digboi 0.65 310 Numaligarh 3.00 ---- Guwahati 1.00 260 BRPL 2.35 460

4. THE GEOGRAPHICAL TERRITORY…. Refinery area : 750 Acres Marketing Terminal area : 265 Acres Location : Latitude 26ºN, Longitude 93º E situated at about 90m above Mean Sea Level. Nearest towns : Bokakhat (18 kms) & Golaghat (28 kms) Nearest Airport : Jorhat (60 kms) Nearest Rivers : River Kaliyani, Dhansiri & Brahmaputra Kaziranga National Park : 40 Km away by road. Township area : 250 acres - at a distance of 5 km from Refinery

5. Our Vision To be a vibrant, growth oriented energy company of national standing and global reputation having core competencies in Refining & Marketing of petroleum products committed to attain sustained excellence in performance, safety standards, customer care and environment management and to provide a fillip to the development of the region.

6. Our Mission • Develop core competencies in Refining & Marketing of petroleum products with a focus on achieving international standards on safety, quality & cost. • Maximize wealth creation for meeting expectations of stake holders. • Contribute towards the development of the region. • Create a pool of knowledgeable & inspired employees and ensure their professional & personal growth.

7. Employee Profile NRL is having a small workforce of 820 nos. of employees out of which 388 are in management category & 432 are in non- management category.

8. Need and Objective of PMS The challenges to Oil industries world wide mainly due to rise in crude prices has led Refinery Management’s to examine their people processes, business processes, technology, projects & identify strategic drivers. One of the strategic drivers for business excellence in today’s environment is a robust Performance Management System (PMS). Such a system should be characterized by accountability, clearly defined workflows, roles & responsibilities and commitment for continuous improvement in performance.

9. Need and Objective of PMS • Keeping in mind the above objectives, NRL decided to replace its existing Annual Performance Appraisal System by PMS for all Officers. • It seeks to achieve: • Awareness by all officers of its Corporate Strategy, vision, mission and business goals. • Cascading of organization goals to measurable objectives of individual officers. • Identification of managerial potentials of Officers. • Continuous feedback on performance. • Development and monitoring of improvements in performance.

10. Components of PMS • The entire performance plan will be on the model of balanced scorecard. Balanced scorecard is a management system which helps organizations to clarify their vision and strategy and translate them into action.

11. PMS PROCESS 2 Half Yearly Review of Performance Performance Management Process Cycle 1 Performance Management System Annual Review And rating Objective Setting Process 3 Moderation Process & Closure 4

12. 1 PMS PROCESS Objective Setting Process • Setting up of KRAs, Objectives • and Measures: • KRAs will be derived from Roles • and the Strategy . • The aggregate of individual • KRAs/objectives should constitute • the departmental objectives . • The objectives should have an • element of stretch. • There should be mandatory target • of self development. • The subordinate KRAs should be • cascaded goal of the superior’s • KRA. • There should be a balance between • outcome measures and process • measures Mission, Vision, MOU Departmental Goals 1 2 3 4 Individual KRAs, objectives, measures

13. 2 PMS PROCESS Half yearly Review of Performance • Key activities: • Check performance against • KRAs, objectives, measures. • If difficulties surface the superior officers shall commit action. • In case of gap between expected • and actual, the superior officer • should do performance counseling. • Evaluation of special circumstances if any requiring revision of the objectives.

14. 3 PMS PROCESS Annual Review & Rating • Key activities: • Self Appraisal against the • KRAs, Objectives & measures. • Discussion for a common • understanding on the actual • performance. • Superior Officer discusses • with the Reviewer and decides • on the rating. • The PMS forms sent to HR • Department for moderation.

15. 4 PMS PROCESS Moderation & Final Rating • Key Activities: • Setting up of the committee and convening meeting by HR Role holder. • F ormulate principles for moderation. • Formulate decision making process • Actual process of moderation by discussing individual PMS and Performance. • 5. Confirmation of submission of Annual Returns. • 6. Approve moderated ratings and sign off. • 7. PMS with moderated rating sent to the • Department for reading. • 8. Reports read out along with ratings • and signature obtained.

16. PMS PROCESS Performance Rating of NRL Officers during last three Years

17. Review of PBT and PRP Distribution The payment of Performance Related Pay (PRP) to Board Level and below Board Level executive is directly linked to profit earned by the Company, as per DPE OM dated 26.11.2008. Formula for Computation of PRP = P x Q x R x S x T P = Revised Annual Basic Pay for respective year. Q = Eligibility level for Company’s MOU rating. R = Grade incentive. (varies from 40% to 70% from entry level to ‘H’ Grades Officers, 150% for Directors & 200% for Managing Director. S = Percentage payout against individual performance rating (Outstanding 100% , Very Good 95%, Good 85%, Fair 75% & Poor 60%) T = Ratio of requried amount to available amount.

18. Review of PBT and PRP Distribution PRP Paid during 2007-08, 2008-09 & 2009-10

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