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NEFI PRESENTATION
ON
NEFI
WELCOMES
Honble Justice Satish Chandra (Retd.)
and
Other Members
of
3rd Pay Revision Committee
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ABOUT NEFI
NTPC Executives Federation of India (NEFI), the sole apex
representative body of NTPC Executives, representing
more than 13,000 executives, was formed in the year
1989 and ever since its formation, NEFI has been working
towards continuous improvement in the overall
performance of NTPC thereby making significant
contribution in the nation building.
VISION
To be a distinctive federation of world class
professionals promoting the growth of its
members, the organization and society.
BACKGROUND
The Govt. had constituted 2nd Pay Revision Committee headed by
Honble Justice M. J. Rao to examine the revision of Pay and
Allowances for Executives and Supervisory staff of CPSEs w.e.f.
01.01.2007.
The appointment of 2nd Pay Revision Committee had given us hope
and it eventually gave justice while making recommendations for
pay revision of CPSEs executives, particularly the profit making
CPSEs, as there was a need for an in-depth examination of the pay
structure of CPSEs executives.
Though the critical issues of concern were appreciated by 2nd Pay
Revision Committee as mentioned in different sections of its report
but eventually the same didnt touch the ground because some of
the key recommendations were not accepted by the Government.
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BACKGROUND
Since last Pay Revision, major changes have been witnessed
in the Indian Economy and the role of CPSEs have got
broadened & they have also made a turnaround making
significant increase in its contributions to the Govt. exchequer
besides making significant contributions to the society at
large.
BACKGROUND
NTPC is facing the challenge of recruiting and retaining the
best talents so as to provide the services effectively and
efficiently. Further, the need of recruiting more & more no. of
fresh entry level executives has been heightened keeping in
view the projected high GDP growth rate, an aging workforce,
and changing preferences concerning benefits and job
mobility among younger executives.
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Anomalies in Implementation of
2nd PRC Recommendations
Pay Committee Recommendations As per DPE Guidelines
CPSEs be Grouped into 5 categories viz Recommended only 4 categories as A, B, C & D.
A+, A, B, C & D
Committee recommends a graded Uniform fitment (30% of B.P+DA) for all grades
fitment benefit (30%, 37% & 42%). with minimum of recommendation is taken.
Committee recommends Fixed Pay Fixed Pay as Basic pay only was accepted.
with two sub-components, i.e. Basic
Pay and Risk Pay
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Role of Government
The Scope of Pay Revision Committee is only limited to the
Executives & non-unionized Supervisors of CPSEs.
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Role of Government
During last Pay Revision, the Govt.s decision regarding
revised pay scales for the Board level and below board level
executives and supervisory staff was stated in the Office
Memorandum issued by the Department of Public
Enterprises, Govt. of India Dated 26th November, 2008 which
contained the following:
Presidential directives would be issued by all the
administrative Ministries/Departments indicating these
scales as a ceiling.
The Presidential directive also covered guidelines
relating to Dearness Allowance, PRP besides prescribing
ceiling on perks.
This contradicts the Govt.s contention that it only
prescribes the Model Scales of Pay.
Role of Government
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Role of Government
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Functional Hardships:
Working in Night Shifts
Working in Hazardous Area like: Mining, Coal Handling etc
Engaged in O&M of High Risk Machines like: Boiler, Turbine etc
Working in Construction Sites
Locational Hardships:
Working in Remote Locations
Working in Insurgency & Naxal Affected Area
Working in Difficult Terrain and at High Altitude having extreme weather
conditions
Working in Green Field Projects having lack of Infrastructural facilities like
Township / Housing, Medical Facilities, Schooling Facilities, etc
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RELATIVITY
Relativity
2nd PRC Recommendations on Relativity:
The Committee recommends that the compensation package for
executives of CPSEs should be decided independent of what is
proposed for the government servants. Progressively, executive
compensations in CPSEs should be aligned with their counter
parts in the Private Sector. The Committee is accordingly
recommending compensation package for the executives of CPSEs
independent of the recommendations made by the Sixth Central
Pay Commission for the Central Government Employees.
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Relativity
INTERNAL:
The ratio of B.P. between the highest and the lowest paid
employee should be 20:1. (Justice Mohan Committee
had recommended the ratio as 10:1 which was not
agreed by the Workmen Unions and it was brought
down to around 9:1 in NTPC).
The ratio of B.P. at the topmost level and the entry level in
the executive category should be 4:1.
EXTERNAL:
With reference to MNCs & Private Companies:
The level of compensation in the private sector has gone
very high after removal of ceilings on the managerial
remuneration in the private companies by the Govt.
DETERMINATION
OF
BASIC PAY
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Pay Fixation
Pay Fixation:
There should be point to point fixation to ensure that senior personnel
are not placed at a disadvantage vis--vis their juniors. This will also
avoid post revision pay anomalies.
The Pay Scales should be open ended or alternatively the span of pay
scales should be long enough to avoid stagnation as most of the
executives are not getting increments for the last more than 5 years.
Rate of Increment
Rate of Increment:
During Pay Revision w.e.f. 01.01.1997, the rate of
annual increment was 4% but during last pay revision
it was reduced to 3%.
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Dearness Allowance
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A question that was repeatedly raised in our discussion with CPSEs was
that 10 years are too long a period for pay revision in the public sector
and that this time gap should be reduced to five years or so. Our general
preference will be that once our recommendations have been given
effect, the responsibility of future revision should be given to the Board of
Directors of a company subject to the approval of concerned Ministry in
discharge of its role as shareholders. We would like to see that we are the
last such committee for deliberating on the remuneration structure in the
public sector as a whole and that hereafter no such committee will be
necessary. Revision can be considered by the Board of Directors and the
concerned Ministry as and when necessary on the basis of the economic
situation and the nature of the concerned industry.
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Superannuation Benefits
Keeping in view the hardships of superannuating
employees of CPSEs, the following are proposed:
Superannuation Benefits
100% leave encashment without any ceiling and it should be
100% tax free because accumulation of leaves is an indication of
extra working days (working without taking leaves). Further, for
Govt. employees leave encashment is 100% tax free.
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RECAPITULATION
MAJOR ISSUES/CONCERNS:
Distinction should be made between profit - making /
performing and non-profit making/non-performing CPSUs.
Maharatna CPSEs may be categorized separately as
recommended by 2nd Pay Revision Committee.
Granting complete/greater autonomy to the Boards of CPSEs
particularly Maharatna CPSEs to decide the Pay Package of
their executives. Pay scales should be comparable to
MNCs/Private Companies at all levels.
Introduction of one more pay scale at E10 level just below the
Board level as recommended by 2nd Pay Revision Committee.
The rate of increment should be 10% of B.P and promotion
increment should be 12%.
Pay scales should be replaced with open ended pay scales to
avoid stagnation.
RECAPITULATION
MAJOR ISSUES/CONCERNS:
Ceiling on Superannuation Benefits to be increased to 35% of
Basic Pay plus Dearness Allowance (DA) and gratuity should be
kept out of the ceiling.
The overall ceiling on perks & allowances should be increased to
75% of Basic Pay plus DA.
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RECAPITULATION
MAJOR ISSUES/CONCERNS:
Companys overall performance should be taken as the basis for
granting performance related pay & it should be entirely linked to
PBT only instead of mix of PBT & incremental profit.
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