A

PRESENTATION
BY
COAL INDIA LIMITED

21 st MAY 2010
21.05.10

COAL PRODUCING SUBSIDIARIES OF CIL

1.Eastern Coalfields Ltd. (ECL)
2.Bharat Coking Coal Ltd. (BCCL)
1
5

4 3

3.Central Coalfields Ltd. (CCL)

4.Northern Coalfields Ltd. (NCL)
5.Western Coalfields Ltd. (WCL)
6.South Eastern Coalfields Ltd. (SECL)
7.Mahanadi Coalfields Ltd. (MCL)
8.North Eastern Coalfields (NEC)
(A Unit Under CIL (HQ))

2
7

COAL

9.Central Mine Planning & Design Institute

(CMPDIL)

6
9

Foreign Subsidiary:
Coal India Africana Limitada

COAL INDIA OPERATION

SPREADS OVER EIGHT STATES (JHARKHAND, WEST
BENGAL, ORISSA, CHATTISGARH, M.P., U.P., MAHARASHTRA
& ASSAM).
OPERATES THROUGH 8 SUBSIDIARIES & 78 AREAS.
OPERATES 473 MINES.( UG MINES : 279, OC MINES: 163
MIXED MINES: 31)
OPERATES 17 WASHERIES (COKING COAL-11, NON
COKING- 6 )
HAS
OVER
200
OTHER
ESTABLISHMENTS
LIKE,
WORKSHOPS, HOSPITALS, CAPTIVE POWER PLANTS ETC.
3

SPECIFIC FUNCTIONS:
A.
B.
C.
D.
E.
F.
G.
H.
I.

PRICING OF COAL.
WAGE ADMINISTRATION .
EXECUTIVE
CADRE
CONTROL
RECRUITMENT,
PROMOTION/ POSTINGS, PAY/PERKS ETC.
MANPOWER PLANNING - HRD.
FOREIGN C0LLABORATION.
INTRODUCTION OF NEW TECHNOLOGY.
R&D ACTIVITIES.
MOBILISATION OF RESOURCES - LONG TERM & SHORT
TERM.
CONSUMER SERVICES THROUGH REGIONAL OFFICES.
4

EXECUTIVES
EXECUTIVES ARE GOVERNED CENTRALLY BY
CIL.
o

CIL IS THE APPOINTING AUTHORITY FOR ALL

EXECUTIVES.

oON
THE
BASIS
OF
REQUIREMENT
OF
SUBSIDIARIES
THE
EXECUTIVES
ARE
POSTED/PROMOTED BY CIL.
o

CIL EXECUTIVES CAN BE TRANSFERRED FROM

HOLDING COMPANY TO THE SUBSIDARIES AND
VICE VERA , ALSO FROM ONE SUBSIDIARY TO
ANOTHER AND VICE VERSA

oTHE PAY REVISION OF EXECUTIVES IS DONE BY

CIL

5
contd..

EXECUTIVES
o Revision of pay of Board level and below
Board level executives of CPSEs done in
terms of DPEs Office Memorandum No.
2(70)/08-DPE
(WC)-GL
XVI/08
dated
26.11.2008, effective from 01.01.2007.
o Presidential Directives was issued by
Ministry of Coal vide letter No. 21/25/2008ASO dated
30th April, 2009 and No.
49015/1/2008-PRIW-II dated 1st May,2009,
for implementation of pay scales, fitment
formula, DA and perks for Executives of
Coal India Limited.
6

Pay Scales of Board Level

Executives - CIL
Grade

Pre - Revised

Revised

22500-600-27300

22500-600-27300

CMD B

25750-650-30950

75,000-90,000

Dir A

25750-650-30950

75,000-1,00,000

CMD A

27750-750-31500

80,000-1,25,000

Dir. B

Pay Scales of Below Board

Level Executives - CIL
Grade
E-1
E-2
E-3
E-4
E-5
E-6
E-7
E-8
E-9

Scale (in Rs.)

16400-40500
20600-46500
24900-50500
29100-54500
32900-58000
36600-62000
43200-66000
51300-73000
62000-80000

TERMS
VARIABLE PAY/PERFORMANE RELATED PAY
The PRP has been directly linked to the profits of
the CPSEs/units and performance of the executives.
Performance of the company as per MOU &
executive concern, Grades of executives and
available PBT & Incremental Profit would be other
variables.

contd..

Performance Related Pay (PRP)

O.M. dated 26.11.2008 stipulates that
a) 60% of PRP will be given with the ceiling of 3% of PBT;
b) 40% of PRP will come from 10% of incremental profit;
c) The total PRP limit will be 5% of the years PBT;
d) For 2007-08 amount available will be 3% of PBT;
e)

PRP scheme will begin from financial 2007-08 and

there will be no incremental profit, this being the first
year of introduction of PRP.

TERMS
Performance Management System
Each CPSE would develop a robust and transparent
Performance Management System.CPSEs would adopt
Bell Curve Approach in grading the officers so that not
more
than
10%
to
15%
executives
are
Outstanding/Excellent.Similarly, 10% of executives
should be graded as Below Par. Some CPSEs already
have a PMS and others will have to frame a robust and
transperent PMS to be able to Pay PMS . However,
CPSEs which do not have a robust and transperent PMS
till date may put in place a transperent PMS by
31.03.2009. For the period 01.01.2007 and till a PMS is in
place not later than 31.03.2009, the executives will be
governed by the existing guidelines of DPE on PRP, which
is limited to 5% of distributable profit in an enterprise.

TERMS
REMUNERATION COMMITTEE
Each CPSE would have Professional Boards
with Independent Directors. CPSE to constitute
a Remuneration Committee headed by an
Independent Director. CPSE will not be eligible
for PRP unless the Independent Directors are
on its Board. Remuneration Committee will
decide the annual bonus/variable pay pool and
policy for its distribution across the executives
and Non-Unionised Supervisors , within the
prescribed limits.

ACTIONS TAKEN
BY CIL
IN
DISTRIBUTION
OF
PRP

Remuneration Committee
Remuneration Committee constituted, consisting of : i) Prof.S.K.Barua,

Independent Director

Chairman

ii) Sri Arvind Pandey,

Independent Director

Member

iii) Sri P.K.Banerjee,

Independent Director

Member

iv) Sri S Murari,

Independent Director

Member

v)Sri Sanjiv Mittal,

Jt.Secy & FA,MOC

Member

vi) Sri R Mohan Das,

D (P&IR), CIL

Member

PERFORMANCE
MANAGEMENT SYSTEM IN
CIL

Performance Management
In CIL , the system for evaluating
Performance & Identifying potential
and
development
needs
for
Executive
growth
towards
achievement
of
corporate
objectives is done by Executive
Evaluation Report.

Steps followed in
evaluation
1. Preparation of Task Assignment and Acceptance Document (TAAD)
by Reporting Authority in consultation with the Appraisee.
2. TAAD is prepared after consultation with Group responsible
giving support for the assigning work.

for

3. TAAD is handed over to the appraisee before commencement of

financial year.
4. Four monthly review made in regard to the task performance on
basis
of
TAAD
clearly
indicating
the
areas
were
development/exposure/training/enrichment is needed which are
indicated by the Controlling Officer.
5. On completion of assessment year the appraisee submits the EER
format showing his achievements to the Reporting Officer for
assessment.

PARAMETERS KEY TASKS FOR

TAAD

Quality;
Quantity;
Development;
Cost;
Safety;
Industrial Relations;
Welfare;
Asset Management, etc.

Approach for overall assessment

E2 to E7 Grade
1. For officers upto E7 grade, the Performance
Evaluation with reference to the task performed as
mentioned in TAAD carry 60 marks as against 40
marks for
(a)the professional & technical skills like knowledge
and application;
(b)Managerial skills like leadership/team building,
commitment, communication, delegation, interdisciplinary perception and decision making;
(c)Planning;
(d)Environment and Man Management.
2. While reviewing the EER, the Reporting Officer
takes into consideration performance as well as the
Constraints and arrives at his final Marking/Rating.

GRADING
To identify High Performers to
develop their potential and utilizing
them in the overall interest of the
Company, grading is done in four
GRADING
MARKS OBTAINED
categories:EXCELLENT

85 100

COMMENDABLE

60-84

ADEQUATE

41-59

INADEQUATE

40 & BELOW

Review of EER

After assessment of Performance by

Reporting Officer- EER rating is reviewed at
two levels.

Level
Final ReviewingBy
Authority

Upto E3
grade E4 & E5
E6 & E7
E8 & E9

CGM/GMs
Directors
CMD of Subsidiaries/FDs
of CIL
Chairman, CIL

EER FORMAT
To be filled by apprise as
per TAAD
(i) Key Tasks
(ii) Constraints
(iii) Effort made
to overcome
constraints
(iv) Strength/
Quality
(v) Improvement/
Assistance Areas
Final
achievement (%age)
Points obtained
out of 60

Achieveme
nt %

Reportin
g Officer

1st
Review

2nd
Review

Assessme
nt %

Commen
t

Comme
nt

EER FORMAT-Personal Qualities

Scale :
quality
E7 & below

Marks for each

10+15+5+10

1. Professional & Technical

Skills
(a) Knowledge
(b)Application
2. Managerial Skills
(a)Leadership/Team Building
(b)Commitment
(c)Communications
(d)Delegations
(e)Inter-disciplinary Perception
(f)Decision making
3. Planning
4. Environment & Man
Management
Final achievement (%-age)
Points obtained out of 40

Reporting
Officer

1st Level
Review

2nd Level
Review

EER FORMAT-Training &

Development needs
Training & Development needs

Reporting
Officer

1st Level
Review

2nd Level
Review

(Appraiso
r)

(Appraisor
)

(Appraisor)

1. Needs Development
Training (Specific Areas)
2. May be considered for
wider exposures (Specific
Areas)
3. Training / Development
Areas
4. Needs Enriched Job

EER FORMAT- Assessment

a) Reporting Officer
Comments
Grading

Excellen
t

Commendab Adequate Inadequat

le
e

85-100

60-84

41-59

b) Review by 1st Level

40 &
below

Comments
Grading

Excellent Commendab Adequate

le

Inadequat
e

EER FORMAT- Assessment

c) Review by 2nd Level
Comments
Grading

Excellen
t

Commendab Adequate Inadequat

le
e

d) Review by Functional Head

Comments
Grading

Excellent Commendab Adequate

le

Inadequat
e

EER FORMAT- Assessment

e) Review by 3rd Level
In case of Excellent/Inadequate
and/or any difference of opinion
between 1st & 2nd Level Review
Comments
Grading

Excellent

Commenda
ble

Adequate

Inadequat
e

Approach for overall assessment E8 & E9

Grade

Performance & Potential of Senior Level

Executives is assessed on the basis of
Performance
Competencies
Values
Potential

The
appraisee
submits
detailed
performance on which the appraiser
reviews the same and rates the
appraisee on 1 to 5 scale and final
rating on the marks obtained .

RATING OF E8 & E9

Grading

Excellent

Commendabl
e

85-100

60-84

Adequat Inadequat
e
e
41-59

40 &
below

PERFORMANCE REVIEW - DIFFERENCE

E7 & BELOW vis--vis E8 & E9 GRADES
E7 & BELOW

E8 & E9

60% marks allocated for 50% marks for key performance

performance in reference to areas 25% each for mid year
key tasks
review and year end review

40% marks for personal a) 20% marks for competencies

qualities
i.e
i.e
Business
Management
Professional/Technical
Skills,
Knowledge
,
Profession
Managerial Skills, Planning,
Specific Knowledge, Making
Environment
and
Man
Business Decision, Vision etc.
Management
b) 15% marks for Values which
are demonstrated in day to
day activities.
c)

15% marks
for Generic
Attributes
i.e.
Leadership
Abilities,
Team
Building,
Business
Sense,
Communication
Skill
and
ability build a Strategic Vision.

Profitability during the year 2007-08

(Rs. In Crores)

COMPANY

ECL

PROFIT BEFORE AVAILABLE FOR

TAX
PRP AS PER Govt.
order
-1026.66

0.00

97.05

2.91

CCL

1035.25

31.06

NCL

2763.75

82.91

WCL

930.22

27.91

SECL

2067.37

62.02

MCL

2504.79

75.14

CMPDIL

5.00

0.15

CIL/NEC

2642.58

79.28

Sub Total

11019.35

BCCL

Less : Dividend & other

adj.

2280.89

Profitability during the year 2008-09

(Rs. In Crores)

COMPANY

PROFIT BEFORE AVAILABLE FOR

TAX
PRP AS PER Govt.
order

ECL

-2105.70

0.00

BCCL

-1376.99

0.00

CCL

763.80

22.91

NCL

3131.01

93.93

WCL

516.12

15.48

SECL

1817.93

54.54

MCL

2580.25

77.41

CMPDIL

6.74

0.20

CIL/NEC

3657.68

109.73

Sub Total

8990.84

Less : Dividend & other

adj.

3246.74

Profitability during the year 2009-10

(Rs. In Crores)

COMPANY

PROFIT BEFORE AVAILABLE FOR

TAX
PRP AS PER Govt.
order

ECL

333.40

16.67

BCCL

793.93

39.70

CCL

1533.05

76.65

NCL

3766.30

176.52

WCL

931.03

46.55

SECL

3063.57

153.18

MCL

2953.90

125.98

CMPDIL

19.61

0.98

CIL/NEC

3870.40

137.38

Sub Total

17265.19

Less : Dividend & other

adj.

3300.26

BALANCED SCORE CARD LINKED

PMS
A Strategic HR consulting and
change Management firm has been
appointed
as
Consultant
for
designing and implementing a
Balanced
Score
Card
linked
Performance Management System
(PMS).
The Balanced Score Card linked
PMS will be implemented from the
assessment year 2011-12 and
thereafter PRP will be linked with it.

Process Map of PMS in Coal India Limited

Employee
Reporting
Authority

Start
Ensure Outside
Support from other
groups

Goal Setting
using
TAAD Manual
&
Drawing
Task Timelines
on 4 Monthly
Basis

Joint Discussions
at the start of every
4 months

Self
Appraisal
by the
employee
Appraisal by
the
reporting
authority

Appraisal by
first
reviewer

First Reviewer
Second
Reviewer

Difference in
rating with reporting
authority
No

Appraisal by
second
reviewer

Functional
Head
Executive
Establishment

Appraise should
have worked for
min. 4 months
with the reporting
authority

Yes
Difference in
rating with first
reviewer
No

Executive
Evaluation Report
(EER) to be given to
all executives

EER primarily facilitates evaluation of performance

and behavioral traits. For M1 and below 60%
weightage is for performance and 40% weightage
is for behavioral traits, whereas for M2 and above
50% weightage is for performance and 50%
weightage is for behavioral traits

Yes

State
Reasons

Goes to
third
reviewer

Appraisal by
Functional
Head

Receive
EER

Stop
28th
Feb,09

30th
Apr,10

15th
May,10

15th
15th -30th
Source:
EER
Form
&
HR Manual of
Jul,10
Jun,10
CIL

Format D of EER Form consists of T&D needs of an employee in triplicate. One copy remains with EE
T&D
department
and two copies are sent to functional heads at corporate office. The Functional Head after
recording his observation sends one copy to GM (HRD) for training.

Implicatio
ns of PMS

35

Promotion

PRP

On the basis of EERs officers are categorized into A,B and C categories. Those with C gradi
are generally not considered for promotions, while those with B are considered after
exhausting the officers who are graded as A.
Under PRP system, performance rating of employees will linked with their compensation

REPORT OF THE
REMUNERATION COMMITTEE
1. CIL has an unique structure with holding
company and subsidiary company.
2. Appointment, Posting and Inter Company
transfers of all executives posted in
different subsidiary companies are
controlled by CIL. The Executives of Coal
Companies are frequently transferred by
CIL from one subsidiary company to
other in accordance with the rules and
functional requirement.

REPORT OF THE REMUNERATION

COMMITTEE
contd

3.If PRP is considered to be paid being on

the PBT of individual subsidiary company,
there will be great resentment amongst
the Executives posted in the loss making
companies and meager profit making
companies. Consequently, no executive
would be interested to work in such
companies where as PLRS for the
workmen are paid equally to all.
4. For the year 2008-09 no PLRS has been
paid to any executive.

REPORT OF THE REMUNERATION

COMMITTEE
Contd

5. To have a proper distribution of PRP,

keeping in mind the sprit of the OM of DPE, it
has been recommended to pay PRP to all
the executives based on the performance of
the subsidiary with reference to the MOU
rating and the individual performance rating.
However, to take care of the transferability
and executives posted in CMPDIL, it has
been suggested that the corpus for the PRP
payment will come out of CIL financial figure
as a whole but the ceiling of percentage will
remain same as per DPE circular.

THANK YOU