PRESENTATION ON PERFORMANCE MANAGEMENT SYSTEM (PMS) AND PERFORMANCE RELATED PAY (PRP) THE STATE TRADING CORPORATION OF INDIA LIMITED
The State Trading Corporation of India Ltd Premier international trading Company of Government of India since 1956. Our Trading activities are primarily in the following six segments:- Agro commodities, Minerals & Metals, Petrochemicals & Fertilizers, Manufactured products, Bullion Hydrocarbons Diversified across sectors/ commodities.
MISSION “To emerge as one of the largest global trading companies with international standards of excellence nurturing a blend of quality, business ethics and proactive enthusiasm to enhance stake holders value”
Our Offices CORPORATE OFFICE - New Delhi BRANCH OFFICES Ahmedabad Mumbai Hyderabad Bangalore Chennai Kolkata Agra Jalandhar Bhopal SUB-BRANCHES Gandhidham Cochin Guntur Web :- www.stc.gov.in Jalandhar New Delhi (Corporate Office) Agra Ahmedabad Kolkata Bhopal Gandhidham Mumbai Hyderabad Guntur Bangalore Cochin Chennai The State Trading Corporation of India Ltd 4
BASIC FACTS * Provisional results
HIGHLIGHTS FOR FY 2007-08 TO 2010-11 Rs. Crores
DEPARTMENT OF PUBLIC ENTERPRISE – GUIDELINES ON PMS & PRP PRP IS GOVERNED BY DPE’s OMs DATED 26.11.2008, 09.02.2009 & 02.04.2009 REGARDING REVISION OF SCALES OF PAY OF EXECUTIVES W.E.F. 01.01.2007 THE PRP HAS BEEN DIRECTLY LINKED WITH THE PHYSICAL AND FINANCIAL PERFORMANCE OF THE COMPANY AND PERFORMANCE OF THE EXECUTIVES
DEPARTMENT OF PUBLIC ENTERPRISES : PRE-REQUISITES ON PERFORMANCE RELATED PAY • The Company should have Professional Boards with Independent Directors. Board DPE STC • Remuneration Committee headed by an Independent Director to be constituted. • No PRP unless the Independent Directors are on the Boards. • Remuneration Committee will decide the annual bonus/variable pay pool and policy for its distribution within the prescribed limits. From the date of implementation, STC has Professional Board with Independent Directors Remuneration Committee PRP – Factors effecting Remuneration Committee, headed by an Independent Director was constituted by the Board • The PMS was revised and PRP policy is framed accordingly • The MOU is being signed as per schedule every year • Robust & Transparent PMS • MOU Rating – Each CPSE is to sign an MOU with the Parent Ministry
There will be no incremental profit for the year 2007-08 as it will be the first year of introduction of PRP scheme. PROFITS OF THE ORGANISATION - PERFORMANCE RELATED PAY The proposed PRP scheme will begin from the financial year 2007-08. STC DPE The PRP Policy was implemented from 2007-08. Being first year, PRP was paid without taking Incremental Profit into account
PERFORMANCE RELATED PAY - CALCULATION For arriving at the PRP payable to the executive his Annual Basic Pay (B) is required to be multiplied by the following factors:-
PERFORMANCE OF THE EXECUTIVES – BELL CURVE APPROACH • A Robust PMS was developed; • Performance Appraisal Forms were re-designed ; • Assessment Level was fixed on a 5-point scale as per DPE Guidelines.
PERFORMANCE MANAGEMENT SYSTEM IN STC The Outcome of Performance Management System for the last three years is as under: As per DPE the percentages should be as under
PERFORMANCE MANAGEMENT SYSTEM - BELL CURVE APPROACH It may be noted that hitherto Annual Performance Appraisal ratings (APARS) were mainly used for the purpose of promotions only. In managerial cadre there is requirement of four ‘Very Good’ APARs during the last five years of service. Further APARs below ‘Good’ gets zero. Thus ‘Good’ , ‘Fair’ and ‘Poor’ ratings taken altogether are not good for promotion and they are being treated as below par as per promotion policy.
Existing Performance Management System • Different sets of Appraisal Forms for below Board level executives: ► Performance Appraisal Form for CGMs (E8) & above (as per DPE guidelines) vide DO. No. 5(1) / 2000-GM dated April 05, 2010 for adoption by all CPSEs from 2010-11. ► Performance Appraisal Form for GMs(E7) & above (as per DPE guidelines) vide O.M. No. 5(1)/ 2000-GM-GL-71 dated 18th October, 2005 for adoption by all CPSEs from 2006-07 to 2009-10. ► Performance Appraisal Form for *JGM- E6 to be adopted from 2011-12 on the same pattern (as per DPE Guidelines for GMs(E7) & above vide OM. No. 5(1)/ 2000-GM-GL-71 dated 18th October, 2005. ► Annual Performance Appraisal Report (APAR) for all other executives AM (E1) TO JGM(E6)*
Features of Performance Management System in STC • Objective assessment on • Goals & targets • Attributes & values • Competencies (Behavioral/ technical & managerial) • Goals & targets are mutually decided between the appraisee & appraiser at the beginning of the assessment year • 4 tier process : appraisal by self & Reporting Officer; review by Reviewing Officer & acceptance by Accepting Authority • Organizational goals cascaded to departmental goals which are further cascaded to individual goals
Components of Performance Appraisal Form for CGMs (E8) & above as prescribed by DPE Contd…
Components of Performance Appraisal Form for CGMs (E8) & above as prescribed by DPE
INDIVIDUAL FACTORS FOR APPRAISAL RATINGS FOR EXECUTIVES (E1 to E6)
OVERALL ASSESSMENT – FOR EXECUTIVES (E1 to E6) FACTOR SCORE: Each of these factors has to be assessed on a 5 point scale and multiplied by the specified weightage for each factor. Assessment of each factor will be done separately by the Reporting Officer & Reviewing Officer. TOTAL WEIGHTED SCORE: The Factor score arrived at for all factors is added separately for Reporting officer and Reviewing Officer. Further both factor scores are multiplied by weightage of Reporting Officer- as 40% & Reviewing Officer- 60%. The total weighted score is calculated by adding the scores of both Reporting officer and Reviewing Officer.The corresponding rating of the executive based on the weighted score is as under:-