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Electronics Corporation of India Ltd. Hyderabad – 500 062

Learn about ECIL's new Performance Management System designed by Dr. A.N. Chakravarthi, and the Remuneration Committee's recommendations on Performance Related Pay.

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Electronics Corporation of India Ltd. Hyderabad – 500 062

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  1. Electronics Corporation of India Ltd.Hyderabad – 500 062

  2. PART I:PMS & BELL CURVE APPROACH PART-II: REMUNERATION COMMITTEE & RECOMMENDATIONS ON PRP PART-III: CALCULATION OF PRP

  3. PERFORMANCE MANAGEMENT SYSTEM SALIENT FEATURES • Dr. A.N. Chakravarthi, Senior HR Expert was engaged for designing the New Performance Management System for ECIL. • After due deliberations with employees at all the levels in the Company including Workers’ Union and Officers’ Association, the new PMS was introduced from the year 2010-11 onwards. • Approval of the Board was obtained and PMS implementation was initiated.

  4. PERFORMANCE MANAGEMENT SYSTEM SALIENT FEATURES • OBJECTIVES OF PMS: • FOCUS IS ON GOAL SETTING AND CONTRIBUTION TO BE MADE BY INDIVIDUAL EXECUTIVES • BASED ON AGREEMENT WHICH IS DEVELOPED THROUGH CONSULTATION BETWEEN APPRAISEE AND APPRAISER • PROVIDE OPPORTUNITIES FOR IDENTIFYING THE DEVELOPMENT NEEDS • FORM THE BASIS FOR THE AWARD OF PERFORMANCE RELATED PAY

  5. PERFORMANCE APPRAISAL FORMATS PA - 4: FOR AGM(EG-8) AND SDGM(EG-7) LEVEL EXECUTIVES PA – 3: FOR DGM(EG-6) TO ATO(EG-1) LEVEL PA – 2: FOR NON-TECHNICAL/ ADMINISTRATIVE/ SECRETARIAL STAFF / OTHERS PA – 1: FOR ARTISAN, TRADESMAN AND UNSKILLED WORKERS

  6. FRAME WORK for Executives PERFORMANCE PLAN AND REVIEW PROFESSIONAL DEVELOPMENT PLAN PERFORMANCE APPRAISAL RECORD

  7. BELL CURVE APPROACH • GRADING: • EXCELLENT: > 9 – 10 • VERY GOOD: > 7.5 – 9 • GOOD: > 6 – 7.5 • SATISFACTORY: 5 – 6 • POOR: < 5 • B. Not more than 10% Executives to be in the highest/lowest grading (Excellent / Poor)

  8. To ensure “Bell Curve” the following additions have been made in the PEN PICTURE COLUMN of all APAR Forms: • Writing the ‘pen picture’ for employees is mandatory. • The highest / lowest ratings (9 to 10 and <5 ratings) are to be specifically qualified by explanation in ‘pen picture’. • A difference of more than 2 points between Reporting and Reviewing Officer has to be qualified and explained. • HoDs have to do moderation of ratings in consultation with Reporting & Reviewing Officers in order to ensure “Bell – Curve”.

  9. REMUNERATION COMMITTEE • Remuneration Committee first constituted on 21.4.2009. The members are: • Dr M J Zarabi Chairman (Non-official Director) • Shri U Visnhumurthy Member (Director – Finance) • Shri Shiv Kumar Nori Member (GM – Finance) • Shri A AHussain Member-Secretary (Head, PG)

  10. REMUNERATION COMMITTEE • Re-constituted on 24.5.2010. The members are: • ShriUmesh Chandra – Non-functional Director • ShriJ.K.Ghai - Non-functional Director • Dr. Chandrasekhar was included in March, 2011 and made Chairman. • Again re-constituted on 2.12.2011 consisting of all non-functional Directors. The members are: • Shri V V R Sastry Chairman • ShriUmesh Chandra Member • Dr.C B S Venkataramana Member • Again re-constituted as under: • ShriV.V.R.Sastry Chairman • ShriChakrapani Member • Dr.C.B.S.Venkataramana Member

  11. RECOMMENDATIONS OF REMUNERATION COMMITTEE • To pay 5% of PBT as PRP in line with recommendations of OM. • b) To allow the management to either pay PRP from 01 April 2009 i.e. 3% from profits of 2009-10 and 2% from incremental profits of 2009-10 over 2008-09 • OR • Pay incentive for 2009-10 and PRP from 2010-11, subject to approval of DPE. • In case PRP is paid, to seek a waiver from DPE of implementing PRP on existing ACR format grading for 2009-2010 and on the new PMS for 2010-11. • Based on OM no other incentive would be admissible to Executives, once PRP is paid. • The above recommendations are approved by the Board.

  12. PROFIT BEFORE TAX AND THE NUMBER OF EXECUTIVES ELIGIBLE PRP being paid from 2010-11 onwards (will be paid by Dec. 2012)

  13. CALCULATION OF PRP for 2010-11 • The MOU Rating for 2010-11 is Good, thus MOU rating factor is 0.6 • The PBT for the year 2010-11 is Rs.2236 Lakhs. • The amount available under Part A, ie., 3% of PBT is Rs.67.08 lakhs • The amount available under Part B i.e., 2% of incremental profit over the year is nil, as there is no incremental profit.

  14. CALCULATION OF PRP for 2010-11 FORMULA: PRP PAYABLE = 0.6(AXBXCXDXE1)+0.4(AXBXCXDXE2) A = Annual Basic Paid to the individual B = Rating of MoU performance of the Company for the year C = Grade Factor D = Individual Performance Rating Factor E1 = Payout factor (i.e. ratio of amount available to amount required) for component of current year PBT: E2 = Payout factor (i.e. ratio of available to amount required) for the component of increase in profit over the previous year

  15. Thank you

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