Performance related pay: Panel puts IIM-A on job

Exploring whether the link between performance and pay is one of the key drivers to achieve efficiency and accountability of government employees

Exploring whether the link between performance and pay is one of the key drivers to achieve efficiency and accountability of government employees, the Sixth Central Pay Commission has asked Indian Institute of Management, Ahmedabad, to conduct a study to examine the feasibility of having Performance Related Pay PRP in government.

The study will essentially examine the correct basis of pay increases and their relation to performance and productivity of employees along with possibilities of evolving a direct correlation between PRP and delivery of services. It will also aim to evolve measurable, qualifiable criteria for judging performance and productivity of government employees. The study will also look into questions as to whether PRP should be applied to all jobs and all sectors or higher managerial positions to begin with and should it be individual based or group based.

IIM-A has proposed to conduct the study by dividing the ministries into three clusters having two ministries each. The three clusters include ministries of Health and Family Welfare, Urban Development, Company Affairs, Finance, Science and Technology, and Communication 038; Information Technology. In addition, IIM-A will also constitute separate teams to undertake separate studies for ministries of Railways, Defence and Home Affairs. Prof Prem Pangotra, Prof Biju Varkkey and Prof Manjari Singh will be some of the people associated with the study, expected to be completed by June 30.

While an IIM-A team has already had a meeting with the Federation of Railways Officers Association FROA at Rail Bhawan, similar teams are learnt to have started their interactions with various employee organisations in other ministries.

As a starting point, the study will seek to identify the metrics for five measures of performance8212;competence, effort, result, efficiency and quality. The study will then look at developing generic framework for performance measurement at the ministry level, evolving guidelines for developing specific performance measures, making comprehensive illustrations with specific performance indicators for one department for each of the two ministries covered in a cluster and evolving guidelines for implementation of PRP.

IIM-A8217;s proposal for formulating the concept, principles and parameters for Performance Related Pay PRP in Government states 8220;the current pay structure does not provide sufficient flexibility to properly implement PRP8221;.

8220;The key focus of the study will be to evolve a Modified Pay Structure having two main components8212;fixed and variable. The variable component will comprise on incentives, increments, bonuses and will be linked to the performance measures. Variable component will be x of the total pay, and this x will depend on a number of factors. This study is going to look into these factors and suggest a range for x,8221; the proposal says.