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NMDC OFFICERS’

ASSOCIATION
PRESENTATION BEFORE
THE 3RD PAY REVISION
COMMITTEE
OUR MISSION

TO EMERGE AS A GLOBAL MINING


ORGANISATION WITH
INTERNATIONAL STANDARDS OF
EXCELLENCE RENDERING
OPTIMUM SATISFACTION TO ALL
ITS STAKE HOLDERS
NMDC OFFICERS’ ASSOCIATION

WELCOMES 3rd PRC

• HON’BLE JUSTICE SATISH CHANDRA (RETD.) – CHAIRMAN


• SHRI JUGAL MOHAPATRA, IAS, EX. SECRETARY (MOF) –
MEMBER
• PROF. MANOJ PANDA, DIRECTOR, INSTITUTE FOR
ECONOMIC GROWTH, DELHI – MEMBER
• SHRI SHAILENDRA PAL SINGH, EX. DIRECTOR(HR), NTPC
LIMITED – MEMBER
• SECRETARY, DPE, GOVT. OF INDIA EX-OFFICIO – MEMBER
• JT. SECRETARY/ADDL. SECRETARY, DPE, GOVT. OF INDIA
NMDC Officers’ Association representing
all Executives of NMDC extends special
thanks to Esteemed 3rd Pay Revision
Committee for giving us a chance to
represent our views & suggestions. We
are highly anxious to get an adequate &
attractive pay package with resolving the
long pending issues related to pay
Package through yours recommendation
only.
Existing Scales of Pay in NMDC(W.E.F. 01.01.2007)

GRADE SCALE OF PAY


E-0 16400 – 3% - 40500
E-1 20600 – 3% - 46500
E-2 24900 – 3% - 50500
E-3 32900 – 3% - 58000
E-4 36600 – 3% - 62000
E-5 43200 – 3% - 66000
E-6 & 7 NOT YET FINALISED
E-8 51300 – 3% - 73000
E-9 62000 – 3% - 80000
Composition of Pay Package
The existing composition consisting of
• Basic Pay,
• Dearness Allowance,
• Perks & Allowances,
• Performance Related Payments,
• HRA,
• Superannuation Benefits
• CPSE PAY SCALES AT PAR WITH MNCs
The pay scales of CPSEs Executives including Board
level executives should be redesigned and be made
comparable to their counterparts in the leading
MNCs/Private Companies in the related industry.
• BASIC PAY RATIO TO BE MADE 1:4
The present ratio of Basic Pay between the lowest
and highest level executives is 1:6. The proposed
ratio is 1:4
POINT TO POINT FIXATION IN BASIC PAY

•To ensure that senior personnel are not placed at


a disadvantage vis-à-vis their juniors, there should
be Point to point fixation in basic pay. This will also
avoid post revision pay anomalies.

•Entry level scale in all CPSEs to be kept at par to


avoid frequent migration of Executives from one
CPSE to other
BASIC PAY
• FITMENT BENEFIT TO BE 50%
Fitment Benefit amount should at least be 50% of
Basic Pay plus DA at the entry level.

• OPEN ENDED PAY SCALE


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.
BASIC PAY
• 5% 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%. Taking into
consideration the trend of rising inflation in last five
years particularly the increase in DA on quarterly
basis is not sufficient

• TWO INCREMENTS @ 5% ON PROMOTION.


At least two increments on promotion to be
introduced to motivate the Executives
PROPOSED SCALE
GRADE SCALE AT PRESENT ENTRY LEVEL SCALE AFTER REVISION

E0 16400 3% 40500 42968 5% 106110


E1 20600 3% 46500 53972 5% 121830
E2 24900 3% 50500 65238 5% 132310
E3 32900 3% 58000 86198 5% 151960
E4 36600 3% 62000 95892 5% 162440
E5 43200 3% 66000 113184 5% 172920
E6 & E7 NOT DEFINED
E8 51300 3% 73000 134406 5% 191260
E9 62000 3% 80000 162440 5% 209600

40% OF FITMENT FACTOR TO BE APPLIED TO ALL SCALES


FOR THE EMPLOYEES WHO ARE ON ROLLS ON 31-12-2016
CALCULATION SHEET
Justification for “Multiplication Factor”

•As proposed by VIIth pay commission the scale of entry level


executives is 2.62 x in pay matrix. Considering 2.25 x (Basic
+DA) + 14.3% hike, which comes to 2.62 x as proposed.

• 50% fitment factor should be considered for executives. As


the revision for non-executives implemented on 01-01-2012
@ 23% in NMDC ltd and if the same hike is expected during
their next revision due on 01-01-2017, the total hike given to
non-executives over a period of 10 years become 46%.
DEARNESS ALLOWANCE
• 100% NEUTRALIZATION
100% neutralization of rise in consumer price index
for DA calculation should continue and the reference
date / Index (WPI) for calculating IDA should be
same as applicable to Central DA.
• MERGER OF DA AT 50%
Merger of DA equal to 50% of B.P. with Basic Pay
should be done for the executives of CPSEs as this will
help in taking care of pay disparity wrt CPSEs where
wage revision for non-executive is taken after every 5
years(Due on 01.01.2022).
PERKS & ALLOWANCES
• CONTINUATION & EFFECTIVE DATE
Perks and allowances should continue and the
effective date for perks & allowances should be the
same as the date of Pay Revision i.e. 01.01.2017.

• CAFETERIA APPROACH OF 50%


The present system of “Cafeteria Approach” of
choosing from a set of perks and allowances within the
overall ceiling of 50% of Basic Pay is satisfactory.
PERKS & ALLOWANCES
ALLOWANCES TO BE KEPT OUTSIDE 50% CEILING
•LTC should compulsorily be kept out of the ceiling on perks as it is linked to fulfilling
social needs. Foreign LTC also should be allowed with monetary ceiling.
•FIELD ALLOWANCE(For all executives working in field area irrespective of discipline.
•North east Allowance
•Non-practicing Allowance
•Officiating Allowance for holding higher post.
•Remote area Allowance-
Remote area allowance can be classified as :

A B
10% in locations less than 15% in locations more than
400kms from 400kms from
schedule B city as schedule B city as
considered for HRA considered for HRA
 Additional 5% in Naxal affected areas
PERKS & ALLOWANCES
• REMOVAL OF ADDITIONAL INCOME TAX ON HRR:
For the purpose of levying Income Tax on HRR, the
employees of CPSEs staying in company provided
accommodation should be considered at par with
Government employees staying in Government
accommodation.

The additional Income –Tax burden on the employees of


CPSEs comes in the range of 5 – 15% of Basic Pay. This
needs to be taken into account while deciding pay package
for CPSEs executives.
PERKS & ALLOWANCES
• NO MONETIZATION OF INFRASTRUCTURE FACILITIES
CPSEs create infrastructure such as hospitals, schools,
clubs etc. just to meet the basic necessities of their
employees & their family members who are compelled
to reside in company’s townships in locations where
even basic infrastructural facilities are not available.
Further, these facilities are also used by the people
residing in the surrounding areas. Therefore,
monetization of infrastructure facilities shouldn’t be
done for the purpose of computing perks & allowances.
PERFORMANCE RELATED PAY
• Present Grade factor of 40% to 200% to be enhanced to 60% to 300%
•Entire corpus amount of PRP should be distributed among all executives
•Total profit to be taken in to account for calculation of PRP instead of a mix of
PBT and incremental profit. Currently 60% PBT and 40% incremental profit

As per this formula even after having registered profit in particular financial
year if incremental profit is not there, only 60% share of PBT is paid. Due to
which PRP in grades E0 to E3 becomes invariably less than ex-gratia paid to
non executives. To cater with this disparity, we suggest:
•Not considering incremental profit for PRP calculation
•If at all it is considered, 80% of PBT and 20% of incremental profit to be
used.
•PRP protection scheme to be introduced i.e., in any case of eligible
executive it should not be less than the ex-gratia paid to the non-
executives.
PRODUCTIVITY LINKED INCENTIVE

•Should be reintroduced
•Should be kept outside PRP
•As it acts a motivating factor for employees in field /
project areas
•Should be linked to be production only and no other
factor such as sales or profit as these are beyond the
control of employees
BELL CURVE
• ABOLISH OF BELL CURVE APPROACH
Adoption of “Bell Curve Approach” for PRP is grossly unfair as
this is a forced ranking system of employees which inter alia
creates a situation where a genuine performer is categorized as
a mediocre in order to normalize the distribution curve. There
should be strict distinction between the performance of an
executive for PRP payment and for promotion.

Rather a two way evaluation system or a balance score card


system with an ultimate aim to motivate performer and retain
the talent should be introduced.

IF NOT ABOLISHED, FORCED 10% MANDATORY BARELY


ADEQUATE RATING SHOULD BE SCRAPED TOTALLY.
GRATUITY
•Currently paid from provision of 4.16% of 30%
(Basic + DA) guaranteed superannuation
benefit. It should be paid as per gratuity act
without any ceiling and with income tax
exemption
•Current scheme of 30% (Basic + DA) as
superannuation benefit to be increased to 40%
of basic + DA with CPF, pension & PRMB as
component of it.
ENCASHMENT OF LEAVE
•100% leave encashment(EL & HPL)
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.
VOLUNTARY RETIREMENT SCHEME
• CPSEs executives should be allowed to take
VRS without any restriction particularly during
last 5 years before superannuation. As such,
there should be a provision of standing VRS in
CPSEs with attractive compensation package.
This would also help in addressing the issue of
career stagnation particularly at higher levels.
THANK YOU FOR YOUR PATIENCE