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Performance Management System & Performance Related Pay

Presentation by
NSIC

NSICs MANDATE

NSIC established in 1955 with the aim to: aid, counsel, assist, finance, protect and promote the interests of MSMEs in India.
NSIC achieves its mandate by:

Devising schemes which are need based and demand driven,

Catering to the requirements of the MSMEs through a judicious blend of `Commercial and `Promotional activities. Functioning on self-sustaining basis, with cost recovery in each scheme.

NSICs SCHEMES
MARKETING
Raw Material Distribution Registration for Government Purchase Tender & Consortia Marketing, Marketing Events Marketing Intelligence

CREDIT
Credit for Raw Materials & Marketing Credit facilitation through 15 Banks.

TECHNOLOGY
Training Material Testing Job-work Energy and Environment Audit

SUPPORT SERVICES
Performance and Credit Rating B2B Portal Training cum Incubation Software Technology Parks International Cooperation

NSICs BRIEF OUTLINE

1) A self sustaining, profit making, dividend paying company Dividend being paid since 2006-07.

2)
3)

No budgetary support for its operations since 1.4.2007.

Mini Ratna (Category-II) status conferred 2011. in

4) 5) 6)

Achieved Excellent since 2007-08.

MOU rating

continuously

Nil comments received from C&AG on Annual Accounts continuously since 2006-07. Manpower 849 in 2006-07 and 896 in 2011-12.

NSICs BRIEF OUTLINE

8) 9) Training & Redeployment of Manpower. All offices independent profit centre.

10) Reach & Volume of Operations multiplied manifold during last few years (2006-07 to 2011-12):
a) Total business increased from crore (increase of 407%). Rs.2198 crore to Rs.11137

b) Business per employee increased from Rs. 2.59 crore to Rs. 12.43 crore, (increase of 380%) c) Gross Margin increased from Rs. 15.33 crore to Rs. 153.33 crore (increase of 900%),

d) Gross Income increased from Rs.47.68 crore to Rs.252.71 crore

e) Profit Before Tax increased from Rs 3.00 crore to Rs. 60.21 crore ,

Performance Appraisal System in NSIC

MOU signed with each Head at the Field Office, Zonal Office and at Head office outlining the targets for each year.

Targets / work allocations are assigned to each employee at Field Office(s) and Head Office, at the beginning of each Financial year.
Targets / work allocations are also made to all employees engaged in Support Services. The achievements of the field offices get evaluated on monthly basis by the respective Zonal Head, on quarterly basis by the Directors. A half yearly review is made by the CMD. Achievements at the end of the year are compared with the targets / work allocations assigned for the year.

Performance Appraisal System in NSIC

NSIC adopted new Annual Performance Assessment Report (APAR) with effect from 2009-10. APAR has three segments aggregating to 100 marks viz. a) Performance Evaluation (60 marks), b) Functional Competencies (20 marks), and c) Discipline (20 marks) Annual Appraisal is linked with the achievements against the targets / work allocation. Marks obtained against performance in APAR get graded as per details given below:
Marks 91-100 71-90 46-70 Grading Excellent Very Good Good

31-45
1-30

Fair
Inadequate/Poor

Performance Appraisal System in NSIC

Performance Evaluation: made by comparing the achievements against the targets / work allocation. Functional Competencies: the achievements w.r.t following are assessed: a) Professional Ability and Job Knowledge b) Quality of Work c) Judgement, Decision Making and Initiative d) Organizational Commitment Discipline: the achievements w.r.t following are assessed: a) System Discipline b) Personal Conduct c) Punctuality and Frequency of Leave d) Inter Personal Relations

Performance Related Pay (PRP) in NSIC

DPEs guidelines on PRP followed. Remuneration Committee of the Board constituted, consisting of three independent Directors. Headed by an Independent Director.

PRP paid in NSIC from 2009-10 to Executives and in 2010-11 to Executives and Unionized cadres.

Details of PBT, PRP, Distributable Profit

(Rs. In Crore)
Financia l Year PBT 3% of PBT PRP from 3% Incremental PBT 10% of Col. 6 2% of PBT PRP from Col. 6 5% PBT Total PRP Distrib utable Profit

Year 1 2009-10 2 25.94 3 0.78 4 0.78 5

Amt. 6 7 1.90 8 0.52 9 0.52 10 1.30 11 3.27 12 1.30

(09-10) 19.02 (-) (08-09) (10-11) (-) (09-10) 9.23

2010-11

35.17

1.06

1.06

0.92

0.70

0.70

1.76

3.97

1.76

PRP for 2009-10 and 2010-11 was restricted to Distributable Profit for each of these years.

Bell Curve Approach in NSIC

DPEs guidelines on compliance of Bell Curve Approach followed w.e.f. 2010-11.

For complying with Bell Curve Approach, NSIC has taken:

a) 15% of the highest ranked amongst Excellent graded employees, and the

a) 10% of the employees have been graded as Poor.

THANK YOU