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EXECUTIVE SUMMARY

Oil and Natural Gas Corporation Limited (ONGC) is engaged in the business of exploration and
drilling of crude oil and natural gas and is the world’s second biggest exploration and production
company ONGC owns and operates more than 11000 kilometers of pipelines in India, including
nearly 3200 kilometers of sub-sea pipelines. The company contributes more than 78% of India’s
oil and gas production.

Today, ONGC is the flagship company of India; and making this possible is a dedicated team of
nearly 40,000 professionals who toil round the clock. It is this toil which amply reflects in the
performance figures and aspirations of ONGC. The company has adapted progressive policies in
scientific planning, acquisition, utilization, training and motivation of the team. At ONGC
everybody matters, every soul counts.

ONGC has a unique distinction of being a company with in-house service capabilities in all the
activity areas of exploration and production of oil & gas and related oil field services.

Needless to emphasize, this was made possible by the men & women behind the machine. Over
18,000 experienced and technically competent executives mostly scientists and engineers from
distinguished Universities/Institutions of India and abroad form the core of our manpower. They
include geologists, geophysicists, geochemists, drilling engineers, reservoir engineers, petroleum
engineers, production engineers, engineering & technical service providers, financial and human
resource experts, IT professionals and so on.

This report concentrates on the study of the performance appraisal system being practiced in
ONGC and to check its effectiveness and further to suggest and recommend any possible ways
to improve and strengthen its PMS.

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INTRODUCTION TO THE INDUSTRY

The India Petroleum Industry is a case in point for exhibiting the giant leaps India has taken
after its independence towards its march to attain a self-reliant economy.

During the Independence era of 1947, the India Petroleum Industry was controlled by foreign
companies and India’s own expertise in this sector was limited. Now, after 60 years, the India
Petroleum Industry has become an important public sector undertaking with numerous skilled
personnel and updated technology that is comparable to the best in the world. The vim and the
achievement during these years is the growth of productivity in petroleum and petroleum-based
products. Even the consumption has multiplied itself nearly 30 times in the post-independence
era.

An important advancement in the petroleum industry came with the Industrial Policy Resolution,
1956 which signified the promotion of growth of industries. The ONGC originally set up as a
Directorate in 1955, was transformed into a Commission in 1956. In 1958, the Indian Refineries
Ltd., a government undertaking, came into existence. The Indian Oil Company (IOC), also a
government undertaking, was set up in 1959 with the purpose of marketing petroleum-related
products. Indian Oil Corporation Ltd. was formed in 1964 with the merger of the Indian
Refineries Ltd. and the Indian Oil Company Ltd. Presently, 17 refineries operate under the India
Petroleum Industry.

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OVERVIEW OF ONGC LTD:

Born as a modest corporate entity within serene Himalayan settings on 14th August 1956 as
Commission, Oil and Natural Gas Corporation Limited (ONGC), has grown into a full fledged
horizontally integrated upstream petroleum company. Today, ONGC is a flagship public sector
enterprise and India’s highest profit making corporate, which has achieved the landmark since
inception, ONGC has produced more than 600 million metric tones of crude oil and supplied
more than 200 billion cubic meters of gas, thus fuelling India’s economy.

GLOBAL RANKING

➢ ONGC ranks as the Numero Uno Oil & Gas Exploration & Production (E&P) Company
in Asia, as per Platt’s 250 Global Energy Companies List for the year 2007.

➢ ONGC ranks 23rd Leading Global Energy Major amongst the “Top 250 Energy Majors
of the World in the Platt’s List” based on outstanding performance in respect of Assets,
Revenues, Profits and Return on Invested Capital (RIOC) for the year 2007.

➢ ONGC is the only Company from India in the Fortune Magazine’s list of the World’s
Most Admired Companies 2007. ONGC is 9th position in the Industry of Mining, crude
oil production.

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VISION. MISSION AND OBJECTIVE

ONGC VISION
To be a world class Oil and Gas Company integrated in energy business with dominant Indian
leadership and Global presence.

ONGC MISSION
• Dedicated to excellence by leveraging competitive advantages in R&D and technology
with involved people.
• Imbibe high standards of business ethics and organizational values.
• Abiding commitment to safety, health and environment to enrich quality of community
life.
• Foster a culture of Trust, openness and mutual concern to make a stimulating and
challenging experience for our people.
• Strive for customer delight through quality products and services.

OBJECTIVES OF THE COMPANY

To maximize production of hydrocarbon, self reliance in technology, promoting indigenous
efforts to achieve self reliance in technology, promoting indigenous efforts to achieve in all
related equipment, material and services.
• Assist in conservation of oil, more efficient use energy and development of
alternate source of energy.
• Environmental protection

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• Observe 100% safety in work.

SWOT ANALYSIS

STRENGTHS
A) O.N.G.C LTD is perceived to be the leader in oil production industry.
B) O.N.G.C has a very efficient and professional management team.
C) O.N.G.C being an international company has sufficient resources and capital to invest.
D) O.N.G.C has ISO-9001 & ISO 14001 registration.

WEAKNESSES
A) O.N.G.C facing difficulties to produce oil from aging reservoirs.

OPPURTUNITY
A) Energy utilization of buried coal resource (700 -1700M), estimated 63BT – Equivalent to
15000 BCM.
B) O.N.G.C facing difficulties to produce oil from aging reservoirs.

THREATS
A) Security of personnel & property especially crude oil continues to be a cause of concern in
certain area.
B) In some exploration Campaign Company involves high technology, high technology, High
investment and high risk.

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HR VISION, MISSION AND OBJECTIVE

HR VISION
"To attain organizational excellence by developing and inspiring the true potential of company’s
human capital and providing opportunities for growth, well being and enrichment".

HR MISSION
"To create a value and knowledge based organization by inculcating a culture of learning,
innovation & team working and aligning business priorities with aspiration of employees leading
to development of an empowered, responsive and competent human capital".

HR OBJECTIVES
➢ To develop and sustain core values
➢ To develop business leaders for tomorrow
➢ To provide job contentment through empowerment, accountability and responsibility
➢ To build and upgrade competencies through virtual learning, opportunities for growth
and providing challenges in the job
➢ To foster a climate of creativity, innovation and enthusiasm
➢ To enhance the quality of life of employees and their family
➢ To inculcate high understanding of 'Service' to a greater cause

HR Strategy

• To meet challenging demands of the business environment, focus of the HR strategy is

on change of the employees ‘ mind set’.
• Building quality culture and resources.
• Re-engineering and redeployment for maximizing utilization of HR potential .

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• To build and upgrade competencies through virtual learning, opportunities for growth
and providing challenges in the job.
• Re-strengthening mutual faith, trust and respect.
• Inculcating a spirit of learning & enjoying challenges.
Role of HR

• Alignment of HR vision with corporate vision.

• Shift from support group to strategic partner in business operations.
• HR as a change agent.
• Enhance productivity and performance by developing employee competency and
potential.
• Developing professional attitude and approach.
• Developing ‘Global Managers ‘ for tomorrow to ensure the role of global players.

Measuring HR Performance

HR Parameters have been incorporated in the MOU by ONGC since 1994-95 to systematically
and scientifically evaluate effectiveness of HR Systems, which enables and facilitates time
bounds initiatives

HR Parameters of MOU for 2008-2009

• Transformation of ONGC –HR as facilitator and change Agent .

• Training and development.
• Action Plan and Implementation for achieving HR mission and objectives.
• HR audit.
• HR for enhancing efficiency and productivity.
• Introducing the concepts of mentoring and knowledge management.
• Conducing a Climate Survey to identify areas for Organizational development

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Challenges faced by Oil and Gas Industry

The oil and gas industry is totally a global industry. However, its underlying importance in
India’s growth cannot be ignored. Current business scenario has raised many challenges for oil
and gas industry and policy makers.
In order to acquire and sustain competitive advantage, companies need to continuously innovate;
un-learn; learn; restructure; and improve their core and support processes. It is not just enough to
manage current processes; but go beyond the existing model and framework to question and
reassess how value is created and delivered. Functional area challenges must be unique for this
unique and growing industry.

STRATEGIC VISION
• For focusing on core business of E&P, ONGC has following Objectives:
• To double Reserves.
• To improve average recovery from 28% to 40%.

The focus of management will be to monetize the assets as well as to assetise the money.

GLOBALIZATION
ONGC operations are being internationalized with a view to acquiring exploration
acreage and access to oil in other basics world over in line with the over strategy followed by
international oil companies .ONGC Videsh Limited .a subsidiary of ONGC , is managing the
overseas ventures.

PERFORMANCE APPRAISAL

Performance appraisal can be defined as the process of evaluating the performance of an

employee & communicating the result of the evaluation to him for the purpose of rewarding &
developing the employee. According to Michael Armstrong “Performance appraisal is a formal
assessment & rating of individual by their managers at usually at annual review meeting.”

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Performance can be defined as the degree of accomplishment of tasks by an employee in his job.
In some organizations it is measure of the result achieved & target accomplished whereas in
others, it is a measure of employee efforts & behavior. However most organizations use a
combination of both efforts & results. Performance appraisal is also termed as performance
review, annual review & annual appraisal.

THE APPRAISAL PROCESS

1. The first step in the appraisal performance process is the determination of standard of
performance based on the organizational objectives & job descriptions.
2. The next step of performance appraisal is the measurement of employees performance
against the pre-determined goal & standards.
3. The next step is the actual process of measurement. Performance appraisal has to be a
continuous process & feedback should be given to the employee at regular intervals.
4. The next step is the very critical step & involves communicating the result of the
appraisal to the employee concerned.
5. Once appraisal is finalized after discussing it with the employees, it have to be put
effective use.

MAJOR PLAYERS IN PETROLEUM

• Indian Oil corporation
• ONGC
• Reliance Industries
• NTPC
• Hindustan Petroleum
• Bharat Petroleum
• TCS
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• Infosys Technologies
• Wipro
• SAIL

PERFORMANCE APPRAISAL METHODS

1. Management by objective or goal setting.

2. Graphic rating scale.
3. Work standard approach.
4. Essay appraisal.
5. Critical incidence method.
6. Forced choice rating method.
7. Point allocation method.
8. Ranking method.
9. Check list.
10. Behavioral anchored rating scale.(BARS)
11. 360 degree performance appraisal.
12. Team appraisal.
13. Balanced scorecard method.

MANAGEMENT BY OBJECTIVE (MBO)

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The main aspect of MBO is clear & well defined goals, a definite time span to achieve the goals,
action plan & finally, timely & constructive feedback. It is also called a goal setting approach;
MBO is more commonly used for managers & professionals.

GRAPHIC RATING SCALE

This method of appraisal requires the rater to rate the employee on factors like quantity &
quality of work, job knowledge, dependability, punctuality, attendance etc. This method is also
used for performance appraisal of employees. They check their employees daily by using this
method.

WORK STANDARD APPROACH

This method of appraisal is more suitable in a manufacturing scenario, where the goals are pre
determined work standard. These work standards can be set based on the average output of a
typical employee in the organization or by bench marking against the work standard of a
competitor in a similar business.

ESSAY APPRAISAL

In the essay appraisal method, the appraiser prepares a document describing the performance of
the employees. Questions or guidelines are provider to the appraiser based on which analyses &
describes the employees’ performance.

CRITICAL INCIDENT METHOD

In this method of performance appraisal, the appraiser makes a note of all the critical incident
that reflect the performance & behavior of the employee during the appraisal period. These are
recoded as & when they occur & can demonstrate either positive or negative traits or
performance.

FORCED CHOICE RATING METHOD

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In this method the appraiser is required to assign ranks to different attributes are all seemingly
positive, but have different weights which are unknown to the appraiser. Once the employees’
attributes are ranked the human resource department applies the weights & arrives at a score
which is the final appraisal score.

POINT ALLOCATION METHOD

In this method of appraisal, the appraiser has to allocate points to different members in his team.
He has at disposal, a specific number of points which he has to distribute among his team
members, based on their performance during the appraisal period.

RANKINNG METHOD

There are three commonly used methods of ranking namely alternation, paired comparison &
forced distribution. The first two methods are used when there are only a few employees to be
ranked, whereas forced distribution method is used in large companies which have thousands of
employees.

CHECKLIST

In this method the rater has to respond ‘yes’ or ‘no’ to a set of questions which assess the
employee’s performance & behavior. Normally weights are attached to each of these questions
based on which the final appraisal score of the employee is calculated.

BEHAVIOR ANCHORED RATING SYSTEM (BARS)

BARS concentrates on the behavioral traits demonstrated by the employees instead of his actual
performance. Some of the other methods like graphic rating scale & checklist also measure the
behavior based on the assumption that desirable behavior result in effective performance.

360 DEGREE PERFORMANCE APPRAISALS

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A 360 degree appraisal system aims at a comprehensive & objective appraisal of employee
performance. In a 360 degree appraisal system the employees’ performance is evaluated by his
supervisor, his peers, his internal external customers, his internal external suppliers & his
subordinates. This system reduces the subjectivity of a traditional supervisor appraisal.

TEAM APPRAISAL

In the new economy era, where team work is essential for any venture to succeed, team appraisal
has emerged as one of the best tool for the performance management. In the team appraisal
method the individual team member evaluate their colleagues in the team & provide feedback.

BALANCED SCORECARD

The balanced scorecard as a method of measuring performance channelizes the efforts of people
to achieve organizational goals. The implementation of balanced scorecard involve formulating
a strategy & deciding what each employee needs to do to achieve the objectives based on
strategy.

PERFORMANCE APPRAISAL SYSTEM AT ONGC

Performance appraisal report is an index of an employee’s work performance over a given

period of time. It is crucial for his or her career growth as it indicates the strengths, weaknesses,
training needs, nature of job being performed and problems faced in work situation.

The objectives of the performance appraisal system at ONGC are:

• To set norms and targets of work performance, as well as, to monitor the work progress
of employees.

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• To facilitate placement of employees in accordance with their suitability for different

types of assignments.
• To provide an objective basis for determination of merit, efficiency and suitability for the
purpose of promotion.
• To identify areas requiring exposure for training and development.

The performance appraisal system seeks to evaluate:

• The work performance of an employee on the present job in relation to the expected
levels of performance, both qualitative and quantitative.
• The extent of development achieved by the employee during the period under review.
• Evaluation of behavioural attributes, attitudes and abilities.
• Evaluation of potentials for assuming higher responsibility.

The appraisal covers:

• Performance during the period from 1st April to 31st march of every year.
• All regular employees of the company.

a) Non Executives.
b) Executives

RESEARCH METHODOLOGY
RESEARCH DESIGN

The present investigation is descriptive type of study undertaken to estimate the effectiveness of
the performance appraisal system of ONGC Ltd. The present study identifies views of
employees of different levels and disciplines.

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They have divided the whole sample into various groups on various criterions like age,
experience, discipline, and management level.

To do the better analysis these groups are further incised as

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Age
Experience
• Age less than 40 years
• Experience less than 10 years
• Age between 40-50 years
• Experience between 10-20 years
• Age above 50 years
• Experience between 20-25 years
• Age not provided
• Experience between 25-30 years

• Experience more than 30 years

Discipline Managerial Level

• Finance • Junior Management(E0 - E2)

• Geo Sciences • Middle Management(E3 – E4)

• HR • Senior Management(E5 and

above)
• Production

• Technical and Engineering

MAJOR FINDINGS

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• Performance Appraisal System in ONGC is not transparent.

• Appraisers are usually unbiased.
• Employees are not able to know their actual position after the appraisal.
• The management is serious about the appraisal process.
• The appraisal process provides them an opportunity for development and growth.
• Relations with the superior affect the evaluation.
• Greater weight age is given to the recent performances.
• There are fixed standards to evaluate the performance but those are not clear due to the
subjectivity of the topic.
• Raters know how to conduct the appraisal.
• Raters are not that much concerned about the varied needs of people at levels of
experience and background.
• Superior-subordinate relations are good. Superior helps them set and achieve meaningful
goals. This makes the environment amiable and congenial.
• Performance appraisal sheet is lucid and easy to understand and fill.
• The parameters used to appraise the potential are ample.
• The system being not so transparent, employees are unable to identify the performance
gaps in order to prepare for the future.
• Individual feedback is not provided.
• The management helps provide an atmosphere where all are encouraged for comradeship
and teamwork.
• Appreciation is provided for the good job done.
• The appraisers are generally aware about their subordinates and their talents and
potential.
• Most of the raters have the ability to give constructive criticism in a friendly, firm and
positive manner.
• Employees don’t have the opportunity to respond to the appraisal result.
• Employees are being rated on their knowledge and skills.
• Majority of people want that there should be some incentives based on performance.

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• Employees are not provided with the genuine feedback.

• Appraisal counseling is considered beneficial for future developments.
• Management doesn’t bother much about the training requirements mentioned in the
appraisal sheet.
• Most of the employees want that 360o feedback system should be introduced.

PORTERS 5 FORCE MODEL

Threat of new entrants:
Due mostly to the industry that ONGC is in, it’s hard for there to be many new entrants. The
only real threat that might arise would be another government funded Oil and Gas company.
The reason for this is that a government would not have as hard a time raising funds and gaining
access to resources. This is assuming that the company would be researching and developing on
domestic soil. The only other threat may not be from new entrants but from smaller competitors
who already have access to resources and distribution channels. There is really not much of a
threat because there are two main barriers to entry that would be stopping potential threats.
These would be very high capital requirements as well as access to Cost disadvantages
independent of scale.
Even though this industry if very attractive because of the high profits it would be very hard for
a company to have enough capital to get in the market. Every part of Oil and Gas Exploration
and Development is costly and not something that would be worth the costs as a new entrant into
the industry. Going along with the high cost of capital are the cost disadvantages. The
companies already in the industry already have the access to raw materials as well as desirable
locations. This is something that would be very difficult for a new entrant to try and gain.

Bargaining Power of Suppliers:

ONGC is a vertically integrated company that really deals in all areas from finding the product
to refining the product to selling the product. With this being said there is not much to worry
about the bargaining power of the suppliers. Supplier power is high as the net margins are

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strongly dependent on the price of the crude. Due to crude price volatility and supply risks, a lot
of the Indian companies are integrating backwards into E&P activities
Bargaining Power of Buyers:
Not too critical for most companies as refining operations are a part of the complete supply
chain, with the refining operations supplying the product to the marketing company. However in
case of standalone companies (which may no longer apply) long term contracts have to be
signed with the marketing companies. The margins in such cases are dependent on such long
term contracts.

The industry that ONGC is a part of is different than many other industries. It is different in the
fact that people really cannot go without their product. While over a long period of time it may
be possible to find other fuels it is not really feasible in the short term. This has been seen in the
US in the last few years. Gas companies can keep the prices high and consumers will still pay
the high prices. When looking at the individual buyer they have almost no bargaining power
because they are only buying such an extremely small portion of the industries total output.
Another reason for this lack of bargaining power is that as of right now there is not a real
alternative to Oil. All of these reasons make it very hard for the buyer to have much bargaining
power at all.

Threat of Substitutable Products:

Although gas, solar power etc exist as substitutes, none of them are big enough to impact the
demand of the petroleum products.

As stated above there is not a real alternative to oil at this time. There is research being done to
try and find substitutes. With the price of oil as high as it is at this time, it is only giving more
reason to try and find other fuel sources. This is where the main players in this market must be
careful. The prices are staying fairly high now because people really don’t have a choice and
must pay. If other fuel sources do come out that are less costly, many people will go towards
those alternatives. It does not seem that at this time there is a huge threat of this happening but it

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is definitely a possibility that any player in the market must be aware of.

Intensity of Rivalry among Competitors:

The rivalry in the industry was low till as the industry was tightly regulated by the government.
However, the level competition has increased with Reliance and other MNC becoming more
aggressive.
The largest competitors in this industry for ONGC are Exxon Mobile and Royal Dutch Shell.
ONGC is currently in 14 different companies whereas Exxon Mobile is in 20 different countries.
While Exxon may be a larger company now ONGC is growing and is becoming a very
important global player.

STRATEGIC DECISIONS
Strategic decisions taken by ONGC

 ONGC changed from a Commission to a company.

 ONGC appointed MC Kinsey as a consultant for complete revamping and restructuring

of the organization.

 ONGC expanded its global operation through its subsidiary OVL.

 ONGC bought 71% stake in the MRPL refinery.

 ONGC decided to acquire equity oil abroad through the endeavors of the OVL.

 Human resource development.

OPERATIONS:

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ONGC to sign 17 oil, gas contracts

Oil and Natural Gas Corporation (ONGC) along with its partners will sign contracts for half of
the 34 oil and gas blocks awarded in the latest round of auction under the New Exploration
Licensing Policy (NELP) on Wednesday. Of the 70 blocks offered in NELP-VIII, companies bid
for only 36 blocks. ONGC and its partner won 17 areas out of their bidding for a maximum of
25 blocks.

ONGC to finalize Rs800 crore shipbuilding contract in a week

Bangalore: India’s biggest oil exploration company, the state-owned Oil and Natural Gas Corp.
Ltd (ONGC), is expected to name within a week the winner of a tender to build 12 ships that
will support its oil drilling operations. ONGC has budgeted about Rs800 crore for the purchase.

Pipavav Shipyard Ltd, India’s newest private sector shipbuilder, has submitted the lowest price
quotation, said a person familiar with the price quotations submitted by the eight firms, whose
bids have been opened. He did not want to be named ahead of a formal announcement by ONGC
and also because the price quotations are confidential.

In the first round of bidding, the lowest price quotation was $16.7 million (Rs81 crore) for
building each vessel. Several shipbrokers Mint spoke with said the ships would now cost about
$13.5 million each, as prices have declined in the wake of the global economic down turn.

ONGC added 284 million tones of oil & gas reserves in 2008-09

Oil and Natural Gas Corp (ONGC) said on Wednesday it added a record 284 million tones of oil
and gas reserves in the 2008-09 fiscal, the highest addition by the company in the past 18 years.

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ONGC added in-place reserves of 284.81 million tones of oil and oil-equivalent gas, of which an
estimated 68.90 million tones are recoverable, the company said in a press statement here.

"With annual production of 47.852 million tons of oil and oil equivalent gas, the Reserve-
Replacement Ratio (RRR) works out to 1.44. This is the fifth year in running when RRR had
exceeded 1,"

Market share
ONGC accounts for more than 80% of Indian domestic oil & gas production

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Financial Highlights of the Organisation

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Net Profit

Turn over

Recruitment and selection procedure of ONGC

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Fig Recruitment Methods

Oil and Natural Gas Corporation carries out its recruitment process in the process as
shown in the block diagram as shown in the figure above. The methods involved are:
(1) Internal Recruitment.
(2) Direct Recruitment.
(3) Indirect Recruitment.
(4) Third Party.

Internal Recruitment
Internal Recruitment involves selecting the deserving candidates to various posts by
promotions and transfer job posting. Internal Recruitment is also done on the basis of employee
referrals.

Direct Recruitment
Direct Recruitment involves conducting the campus recruitment. HR employees
Of ONGC are responsible for conducting the recruitment process at the campuses of many
Colleges and undertake the selection procedure that involves various tests that are discussed as
follows:
(a) Aptitude Test;
(b) Group Discussion;
(c) Personal or Technical Interview.

Indirect Recruitment
Under the indirect recruitment, company informs about the vacancies through various
advertisements on newspaper, internet etc. The aspirants need to fill the online application form

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which is available on ONGC’s website i.e. ongcindia.com. After filling the application form the
aspirants are issued admit cards as they have to go through series of tests which were discussed
above. After the completion of the all the above mentioned steps the final decision on hiring the
candidates is taken. Now let us have a look at the eligibility for various posts in the company.

Third Party Recruitment

Under third party recruitment, ONGC contact the following:
• Private Employment search firms.
• Employment Exchange.
• Gate Hiring and Contractors.
• Unsolicited Applicants/ Walk-ins.

RECOMMENDATIONS

The performance appraisal system of ONGC is of good quality. With the introduction of new e-
PAR system, the PMS system is refined further. On the basis of the analysis of responses and
findings I have reached to some conclusions. So taking them into consideration few steps may
be considered to strengthen the performance appraisal system.

➢ The system should be made more transparent. This can be achieved by creating
awareness among the employees regarding each and every aspect of the appraisal
process. They should be made aware about the standards and the criterions for
evaluation. Further they should be shown the appraisal result.

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➢ The appraiser and appraise should sit together and then the appraiser should rate the
appraise for his performance and should state the reason for the same. This will increase
the level of transparency and the employee will feel satisfied as he will have an
opportunity to respond at that very moment itself.
➢ The genuine feedback should be provided to the employees. So that they may be in a
position to know where they stand exactly. So that they can identify their performance
gaps and prepare accordingly for the future.
➢ The general belief among employees is that the relations with the superior affect the
evaluation process. This is not good as this creates a sense of favoritism in the
organization. No doubt one should be in pleasing terms with the superior but that should
not affect the evaluation at all. For this the raters should always consider the performance
as the only measure for the evaluation.
➢ The raters should take note of the critical performance incidents of an individual so that
at the end of the year it should not be that only the recent performances are given more
weight age.
➢ Raters should consider the specific requirements of the people to do the job. They should
help them out by providing necessary skill set to do the job more efficiently. They
should set the goals as per the potential and caliber of the individual.
➢ Employees should have the opportunity to respond to the appraisal result. For this
individual feedback should be provided.
➢ Management should take serious note of the training requirements shown by the
individual in the appraisal sheet. Training plays a vital role in the development of an
individual and helps improve the performance.
➢ Some incentives should be introduced on the performances basis. This thing creates a
sense of healthy competition among employees which boost up the growth of the
individual as well as the organization.

Corporate Governance Recognized

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In recognition of excellence in Corporate Governance, the following awards have been conferred
on ONGC:

• 'Golden Peacock Award for Excellence in Corporate Governance - 2002' by the Institute
of Directors;

• 'ICSI National Award for Excellence in Corporate Governance' - 2003 by the Institute of
Company Secretaries of India; and

• 'Golden Peacock Global Award' for Corporate Governance in Emerging Economies

-2005 by World Council for Corporate Governance, U.K.

• 'Golden Peacock Award for Excellence in Corporate Governance - 2005' by the Institute
of Directors;

• ' Golden Peacock Award for Excellence in Corporate Social Responsibility in Emerging
Economies' 2006 - by World Council for Corporate Governance, UK.

• 'Golden Peacock Award for Excellence in Corporate Governance - 2006' by Institute of

Directors.

RELIANCE OIL AND PETROLIUM

INTRODUCTION
The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private
sector enterprise, with businesses in the energy and materials value chain. Group's annual
revenues are in excess of US$ 44 billion. Reliance Industries Limited, is a Fortune Global 500
company and is the largest private sector company in India.

Backward vertical integration has been the cornerstone of the evolution and growth of Reliance.
Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical
integration - in polyester, fiber intermediates, plastics, petrochemicals, petroleum refining and

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oil and gas exploration and production - to be fully integrated along the materials and energy
value chain.

Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre
producer in the world and among the top five to ten producers in the world in major
petrochemical products.

Major Group Companies are Reliance Industries Limited (including main subsidiary Reliance
Retail Limited) and Reliance Industrial Infrastructure Limited.

Human Resource Development

RIL's talent base, as on March 31, 2010, stands at 23,365 with the average employee age of 41
years. The aim is to lower the average employee age and invigorate the youth to take the
organisation forward over the next few decades as indeed the current leaders have done over the
last 30 years by starting early in their 20s and 30s. The entrepreneurial spirit has been a hallmark
of the organisation. The Company continues to nurture this as it grows exponentially.

Business Transformation - HR Transformation: To quote RIL CMD, Shri Mukesh D. Ambani,

"The Business Transformation initiative that they have embarked upon is singularly going to be
the most significant project that Reliance would have ever undertaken in its organizational
history". While this strategy cuts across Manufacturing, Businesses and Services, most of the
transformation agenda is around and strongly interlinked with people practices and processes.
The mandate is to build a world class HR organisation with benchmark processes and systems

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around Performance Management, Rewards and Recognition, Competency and Capability

Building, Succession Planning, etc. amongst others.

As an ongoing exercise, RIL has continued to look at, identify, create and execute seamlessly,
initiatives which enhance productivity and efficiency. Towards this end, the Company has put
into place a central shared services organisation for HR, wherein Global Best Practices for HR
Shared Services are integrated. The objective of this centre, apart from leveraging on the
economies of scale, is to provide a world class experience to our people on all the matters that
they have to deal with on a day-to-day basis including all transactions.

RIL continues to invest in people through various Learning & Development initiatives, which
has seen 3,092,403 man hours of Learning & Development activities at manufacturing divisions.
E-learning as a medium is much sought after by the employees for upgrading skills and
competencies since people can learn when needed at their own convenience and from where
they may be. The Company has continued to invest in this area through newer and state-of-the-
art modules both in the Technical and Management domains.

In FY 2009-10, 105 Six Sigma projects were completed leading to financial benefits
(annualised) amounting to Rs. 55 crore. Presently, 439 Black Belts and Green Belts are
associated in Six Sigma projects at different sites. For the success of the projects, 1,896 team
members and supervisory personnel are providing active support. To further embed Six Sigma
and develop a cadre of Reliance Certified Black Belts (RCBB) across locations, RCBB
development plan was launched at each site. Reliance Certified Black Belt will have the
knowledge and skills to do complex projects and also guide, coach and train others in executing
Green Belt (GB) projects.

Research & Development, Technology Development and Innovation

Research & Development (R&D), Technology Development and Innovation continues to be
an integral part of RIL's agenda for achieving growth, business profitability, sustainability and
rural transformation. The Reliance Technology Group (RTG), created by consolidating

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various research and technology functions is helping create enhanced value delivery by
leveraging all the skills and competencies, and creating new opportunities at the interfaces.
RTG continues to get external perspectives from members of the Reliance Innovation Council
(RIC).

Key objectives of RTG are as follows:

• Develop fit-for-purpose and sustainable technology and its application.

• Provide effective project support and assurance to manufacturing plants and

businesses.

• Provide technical assurance to projects including technology selection and absorption.

• Proactively identify and support technical opportunities to add value across RIL's
businesses.

• Develop technology strategies suited to create business growth and offset threats.

• Improve technical productivity on a continuous basis.

• Develop / recruit staff with skills and motivation to meet current and future business
needs.

RTG is also working on the development/commercialisation of new products e.g., oxygen

barrier
polyester resin for packaging, material for fruits/vegetables preservation and low cost
Antimicrobial Polyester. In addition, RTG is working on emerging technologies such as fuel
cells, carbon fibers, bio-fuels and gasification of various feed stocks.

Some major ongoing/completed projects include

• Maximizing light olefins yields.

• Expansion of testing and pilot plant facilities in refining.

• Technology development to process cheaper and heavier crudes.

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• Computational Fluid Dynamics (CFD) studies for trouble shooting.

• Molecular modeling in blending and feed characterization.

• Value addition by upgrading of coker streams.

• Process development for co-monomers from ethylene.

• Material development for enhancing shelf life of fruits and vegetables.

• Development of new grades of elasestomers.

• New Purified Terephthalic Acid (PTA) technology development.

Corporate Governance at Reliance is based on the following main

principles:
• Constitution of a Board of Directors of appropriate composition, size, varied
expertise and commitment to discharge its responsibilities and duties.

• Ensuring timely flow of information to the Board and its Committees to enable
them to discharge their functions effectively.

• Independent verification and safeguarding integrity of the Company’s financial

reporting.

• A sound system of risk management and internal control.

• Timely and balanced disclosure of all material information concerning the

Company to all stakeholders.

• Transparency and accountability.

• Compliance with all the applicable rules and regulations.

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• Fair and equitable treatment of all its stakeholders including employees, customers,
shareholders and investors.

Financial performance for the quarter ended 30th June, 2010

Highlights of Quarter’s Performance

• Turnover increased by 88.1% to ` 61,007 crore (US$ 13.1 billion)

• Exports increased by 103.5% to ` 32,849 crore (US$ 7.1 billion)
• PBDIT increased by 41.9% and achieved a record level of ` 10,064 crore (US$ 2.2 billion)
• Profit Before Tax increased by 27.0% to ` 6,038 crore (US$ 1.3 billion)
• Cash Profit increased by 46.1% to ` 8,536 crore (US$ 1.8 billion)
• Net Profit increased by 32.3% to ` 4,851 crore (US$ 1.0 billion)
• Gross Refining Margin at US$ 7.3 / bbl for the quarter ended 30th June 2010

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FINANCIAL RESULT TILL QUARTER ENDED BY 30TH JUNE 2010.

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