mmtc

PERFORMANCE PERFORMANCE MANAGEMENT SYSTEM MANAGEMENT SYSTEM & PRP IN MMTC LIMITED& PRP IN MMTC LIMITED

COMPANY’S PROFILECOMPANY’S PROFILE

MMTC Limited is a Miniratna Company under the MMTC Limited is a Miniratna Company under the administrative control of Department of Commerce, administrative control of Department of Commerce, Ministry of Commerce & Industry, Government of India.Ministry of Commerce & Industry, Government of India.

Set up in 1963, MMTC Limited is the largest Set up in 1963, MMTC Limited is the largest International Trading Company of Govt. of India and the International Trading Company of Govt. of India and the first Public Sector Enterprise to be accorded the status of first Public Sector Enterprise to be accorded the status of ‘FIVE STAR EXPORT HOUSE’‘FIVE STAR EXPORT HOUSE’..

Its vast International Trade Network spans almost in all Its vast International Trade Network spans almost in all countries in Asia, Europe, Africa, Oceania and America countries in Asia, Europe, Africa, Oceania and America giving MMTC a global market coverage. giving MMTC a global market coverage.

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MMTC’S TRADE PROFILEMMTC’S TRADE PROFILE

The major items of trade include Minerals, Non-Ferrous Metals, The major items of trade include Minerals, Non-Ferrous Metals, Precious Metals, Coal & Hydro Carbon, Agro Products, Fertilizers Precious Metals, Coal & Hydro Carbon, Agro Products, Fertilizers and Fertilizer raw material. and Fertilizer raw material.

MMTC is major player in the minerals trade and is the single largest MMTC is major player in the minerals trade and is the single largest exporter of minerals from India.exporter of minerals from India.

MMTC is the largest importer of gold and silver in the Indian sub MMTC is the largest importer of gold and silver in the Indian sub continent.continent.

MMTC is also engaged in manufacture/and retail sale of silverwares MMTC is also engaged in manufacture/and retail sale of silverwares and artifacts made of silver in the brand name ‘and artifacts made of silver in the brand name ‘SANCHISANCHI’.’.

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PERFORMANCE PERFORMANCE MANAGEMENT SYSTEMMANAGEMENT SYSTEM

To link individual performance to To link individual performance to company objectivescompany objectivesTo build a culture of performanceTo build a culture of performanceTo encourage two-way communicationTo encourage two-way communicationTo make evaluation objective and reduce To make evaluation objective and reduce subjectivitysubjectivityTo identify high performers and provide To identify high performers and provide career progression opportunities to career progression opportunities to them.them.

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Development of Strategic GoalsAt the Top Level

Cascading Down of Goals at various DivisionLevel and other levels below

Cascading Down of Goals at the Regional Level

Draft of plans and Signing ofMemorandum of Understanding

Creating Strategy Linked Performance

Management

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KPA based Performance KPA based Performance Appraisal process Appraisal process

• Joint review of performance

• Document changes in KPAs if any

• Assessment of KPAs, Competencies, Values and Potential by appraiser

• Training and Development Plans

• Review by reviewing officer

PMS Process

Step 1

• Identify KPAs, constituents, weightages, measures and targets

Step 4

Step 3

Step 2

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TIME SCHEDULE TIME SCHEDULE (Up to E-7 (Up to E-7 Level)Level)

S. No. Month Stages in Appraisal

1 March Distribution of Appraisal Forms

2 April Finalization of KPAs and targets/ weightage

3 September/ October Mid- year review of KPAs

4 April (Next Year) Submission of Appraisal report by appraisee to appraiser & forwarding to report by appraiser to reviewing officer after giving the rating.

5 May(Next Year) Final submission of Appraisal reports after signing by reviewing and counter signing authority.

6 June/ July Moderation of reports by the moderation committee

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TIME SCHEDULE TIME SCHEDULE (E-8 Level & (E-8 Level & Above)Above)

Sl. No. Activity Cut-off Date

1 Finalization of Targets, weightage 30th June (Reporting Yr.)

2 Circulation of PAR 30th September

3 Submission of PAR after self- appraisal by the Officer to Reporting Authority

31st October

4 Submission of PAR after appraisal by Reporting Authority to Reviewing Authority

15th November

5 Submission of PAR after review by Reviewing Authority to Accepting Authority

30th November

6 Furnishing of PAR after appraisal by Accepting Authority to Nodal Officer

15th December

7 Disclosure of PAR 31st December

8 Submission of Representation, if any 15th January

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Components of Performance Components of Performance Appraisal (Up to E-7 Level) Appraisal (Up to E-7 Level)

Sl. No. Component Weightage

1 Performance 50%

2 Competencies 20%

3 Values 15%

4 Potential 15%

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Components of Performance Components of Performance Appraisal (E-8 & above)Appraisal (E-8 & above)

Designation Weightage

MOU Targets

Individual targets flowing from MOU targets

Personal Attributes & functional Competencies

Total

Chief Executives

75 - 25 100

Functional Directors

40 35 25 100

E8 & E9 25 50 25 100

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Features of KPA based Features of KPA based PMS PMS

Covers all Executives below Board level.Drawn from the business plans, objectives

and functions of Division .Number of KPA indices not more than

eight, out of which development of subordinate, a mandatory field.

The unit of measurement based on SMART principle (Specific, Measurable, Attainable, Relevant & time- bound).

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GUIDELINESGUIDELINESKPAs are determined along with target of performance and their weightage in beginning of the year.As far as possible targets are based on SMART principle (Specific, Measurable, Attainable, Relevant & time-bound).Decided by one to one discussions held between the appraisee & appraiser.Competencies, Potential & value is assessed by the appraiser on the basis of his/ her observations.The appraiser recommends for training for the development of appraisee.

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Benchmark Norms for Benchmark Norms for Rating Scale(1 to 5)Rating Scale(1 to 5)

Rating Qualitative Quantitative

5 Significantly above expectations

On achieving 100%

4 Moderately above expectations

On achieving 80% or more

3 Meets the expectations

On achieving 60% or more

2 Moderately below expectations

On achieving 40% or more

1 Significantly below expectations

On achieving less than 40%

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PERFORMANCE PERFORMANCE RELATED PAY(PRP)RELATED PAY(PRP)

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1.MMTC is MOU signing Company and has earned profit in 2007-08, 2008-09 & 2009-10.

2.MMTC has a robust and transparent Performance Management System, which includes KPA based appraisal system.

3.MMTC has Independent Directors on its Board.

Remuneration Committee :

MMTC has formed a Remuneration Committee headed by an Independent Director.

CONDITIONS FOR IMPLEMENTING PRP

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PRPPRP

Variable Pay / Performance Related Pay Variable Pay / Performance Related Pay (PRP) is made integral part of (PRP) is made integral part of compensation package w.e.f. 2007-08. compensation package w.e.f. 2007-08. PRP depends on several factors-PRP depends on several factors-

PRP is paid on the basis of MOU rating of the PRP is paid on the basis of MOU rating of the Company ranging from 100% for Excellent to no Company ranging from 100% for Excellent to no PRP for ‘Poor rating’ of the Company.PRP for ‘Poor rating’ of the Company.

MOU rating of MMTC was ‘Excellent’ in last 3 years.MOU rating of MMTC was ‘Excellent’ in last 3 years.

CONTD.

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PRP is directly linked to profit of MMTC-PRP is directly linked to profit of MMTC- 60% of PRP with a ceiling of 3% of PBT comes from profit of the

company and 40% of PRP comes from 10% of incremental profit. Total PRP limited to 5% of PBT exclusively for executives.

As 2007-08 was base year and there was no incremental profit in year 2008-09 only 60% of the PRP was distributed to Executives during these 2 years.

During 2009-10 Company achieved highest ever net profit. PRP with in maximum 5% PBT ceiling has been disbursed to Executives

PRP depends on the grade of the Executives-PRP depends on the grade of the Executives- Percentage ceiling increases from 40% at junior level to 200% Percentage ceiling increases from 40% at junior level to 200%

for CMD.for CMD.

PRPPRP

CONTD.

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• PRP also depends on performance of executive. Executives with ratings- Outstanding, Very Good, Good, Above Average and Average performance ratings get PRP up to 100%, 80’%, 60%, 50% and 40% . No PRP for ‘Poor Rating’.

• From financial year 2011-12 Above Average performance rating (50% PRP) has been removed to make PRP scheme at par with DPE 5 tier rating system.

PRPPRP

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Constraints faced Constraints faced

Implementation of new Appraisal System-Implementation of new Appraisal System- Apprehension among Executives for new System- Apprehension among Executives for new System-

Workshop organized to explain importance, benefits Workshop organized to explain importance, benefits of new KPA based Appraisal System.of new KPA based Appraisal System.

Implementation of Bell CurveImplementation of Bell Curve

Regulation of PRP in case of less than 3 months Regulation of PRP in case of less than 3 months appraisal period. appraisal period.

2020

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PRP FACTORS

 1) MOU RATING

  EXCELLENT 100%VERY GOOD 80%GOOD 60%FAIR 40%POOR NIL

2) GRADE INCENTIVE

  E0 TO E3 40%

E4 TO E5 50%

E6 TO E7 60%

E8 TO E9 70%

DIRECTORS 150%

CMD 200%

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Percentage of Bell Curve

S. No. Rating % Of Employees

1 Outstanding Up to 15%

2 Very Good 30%

3 Good 30%

4 Above Average 15%

5 Average 10%