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Pay Structure in CPSEs Presentation by Rajendra Kumar, Director, DPE 11 & 12.08.2011 Chandigarh

Pay Structure in CPSEs Presentation by Rajendra Kumar, Director, DPE 11 & 12.08.2011 Chandigarh. 1. 1. Background. DPE is Nodal Department as on 31.3.2010. Different schedules & pay structure.

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Pay Structure in CPSEs Presentation by Rajendra Kumar, Director, DPE 11 & 12.08.2011 Chandigarh

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  1. Pay Structure in CPSEs Presentation by Rajendra Kumar, Director, DPE 11 & 12.08.2011 Chandigarh 1 1

  2. Background • DPE is Nodal Department as on 31.3.2010

  3. Different schedules & pay structure • CPSEs in different Schedules: A, B, C, D • Pay scales of Board Level Executives depend on schedule of the CPSE • Pay scales of below Board Level Executives common to all CPSEs • E9 only in Sch ‘A’ • E8 only in Sch ‘A’ & ‘B’ • E7 only in Sch ‘A’ ‘B’ & ‘C’

  4. Pattern of Pay Scales • Govt. pay structure vis-à-vis CPSE pay structure • IDA pattern pay scales : 96% 3) CDA pattern pay scales : 04% 4) Ratna Status is not linked as far as pay structure is concerned

  5. Different Categories of employees

  6. Various Pay Revisions in CPSEs • In IDA pattern pay scales (i) 2007 (ii) 1997 (iii) 1992 (iv) 1987 B. In CDA pattern pay scales (i) 2006 ( VI CPC) (ii) 1996 (V CPC)

  7. Basic Principles of Pay revision • Affordability, capacity to pay and sustainability of the CPSEs • CPSEs have to meet cost of salary and wages from their own resources • No Budgetary support by Government • Economic viability of the CPSE • CPSE employees not civilian employees

  8. 2007 Pay Revision : Background • Constitution of the II PRC in November, 2006 • Headed by Justice M.J. Rao, retired Supreme Court Judge • Committee gave its recommendations in May, 08 • Some recommendations not accepted • DPE O.Ms dated 26.11.2008 & 9.2.2009 • Appointment of Committee of Ministers (Chidambaram Committee) • DPE O.M dated 2.4.2009

  9. Components of Remuneration • Fitment up to 30% on BP + DA (78.2%) as on 1.1.07 • Uniform rate of 3% for annual, stagnation and promotional increment • DA is allowed quarterly based on All India Consumer Price Index (AICPI) • HRA @ 30%, 20% and 10% depending upon the population of the cities • Perks and allowances subject to a ceiling of 50% of Basic Pay with “Cafeteria Approach” where executives can choose from a set of perks and allowances • 4 allowances kept outside the 50% limit for perks & allowances

  10. Components of Remuneration (contd.) • PRP as percentage of Basic Pay ranging from 40% to 200% • Up to 30% of Basic Pay+DA as superannuation benefits • Ceiling of gratuity in r/o executives and NUS raised to Rs. 10 lakhs w.e.f. 1.1.2007 • Implementation of 2007 pay scales based on affordability • Concept of 20% dip in PBT

  11. Components of Remuneration (contd.) • Concept of maximum ceiling and lower limits • Effective date of revised allowances is 26.11.2008 if Presidential Directives issued on or before 1.5.2009 otherwise from the date of issue of Presidential Directives • Concept of bunching of increments • Provision for Anomalies Committee • 2007 pay revision to be taken as a ‘Total Package’

  12. 2007 Pay Scales (Board Level)

  13. 2007 Pay Scales (Below Board Level)

  14. Fitment method

  15. Profit of the CPSE and PRP • PRP will come out of profits of the CPSE • 60% of the PRP will be within ceiling of 3% of Profit before Tax (PBT) • 40% of PRP from 10% of incremental profit as compared to previous year’s profit • The total PRP, however, will be limited to 5% of the year’s PBT, both for executives and non unionized supervisors • The PRP for the year will be calculated latest by December of the following year, based on the CPSE’s performance as per audited accounts • The proposed PRP scheme will begin w.e.f. financial year 2007-2008

  16. Maximum PRP for different Grades

  17. PRP based on MoU rating

  18. PMS - DPE Guidelines (26.11.2008) • CPSEs to adopt ‘Bell Curve Approach’ • Not more than 15% of executives to be graded as “Outstanding” • 10% of executives to be graded as “Below Par”. • PMS to be introduced latest by 31.3.2009 • Between 1.1.2007 and 31.3.2009 till a PMS is in place, existing guidelines on PRP, (which is limited to 5% of distributable profit will be applicable) • Remuneration Committee headed by Independent Director

  19. PRP and Performance Basedon PMS

  20. Amount of PRP from current and Incremental Profit • Basic Pay X MoU rating X PAR • 60% will be from current years PBT • 40% will be from incremental profit • Depending on availability of funds, the PRP would be paid proportionately

  21. Other issues • Pay, etc. of Government officers on deputation to CPSEs • Pay etc. of executives of CPSEs on deputation/transfer • Concept of ESOPs • Concept of CTC • Creation of corpus for retired executives

  22. DPE Website : www.dpe.nic.in Link to DPE pay related guidelines : http://dpe.nic.in/newgl/glch4index.htm Contact details in case of any query on salary/wage related matters. Shri Rajendra Kumar, Director, DPE Telefax : 011 24360624 Email : rajendrakumar67@nic.in Shri P.J. Michael, Under Secretary, DPE Tele : 011 24360823 Email : michael.pj@nic.in Thank you

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