Govt sets up uniformity to distribute bonus to PSU employees
The government has put in place a performance management system (PMS) to have a uniform system for distributing performance-linked bonus to employees of public sector companies
By Sushmi Dey & Dheeraj Tiwari, ET Bureau |
NEW DELHI: The government has put in place a performance management system (PMS) to have a uniform system for distributing performance-linked bonus to employees of public sector companies. At present individual companies have their own parameters for rewarding their executives.
"The second pay revision committee proposed for central public sector enterprises (CPSEs) to develop a robust and transparent PMS. The proposal has found favour in the government. The department of public enterprises (DPE) and other administrative ministries are now working in conjunction to put the new system in place," a department of heavy industry (DHI) official, who wished not to be named, said.
Under the new PMS, the government will ask PSUs to adopt a "Bell Curve Approach" while grading its executives, he said. Only 10-15% of the executives in a public sector undertaking (PSU) will be graded as "outstanding or excellent" in the process of their performance appraisal. Similarly, the new system will also ensure that 10% of officers in the company are graded as "below par", he added.
Some companies already have performance management system. "We already have a sophisticated PMS in place which is much like the new one that the government has prescribed," Bharat Heavy Electric Ltd (BHEL) chairman and managing director K Ravi Kumar said. According a BHEL official, the company is the first PSU to implement e-network based paperless performance appraisal process. In BHEL, the executives sets key result areas (KRAs) and targets for themselves, which are assessed and revised every year by a committee.
With the new PMS system is in place, all PSUs will be mandated to sign MoUs with their respective controlling ministries. The MoU rating will then form the basis of performance related pay (PRP) for executives in these companies. "PSUs that do not enter into MoU will not be eligible for any PRP," the official said.
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