WORKSHOP ON WORKSHOP ON

Performance Management Performance Management System System

& & Performance Related PayPerformance Related Pay

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NSICNSIC

NSIC established in 1955 with the aim to:aid, counsel, assist, finance, protect and promote the interests of MSMEs in India.

NSIC achieves its mandate by:

Devising schemes which are need based and demand driven,

Catering to the requirements of the MSMEs through a judicious blend of `Commercial’ and `Promotional’ activities.

Functioning on self-sustaining basis, with cost recovery in each scheme.

NSIC’s MANDATE

NSIC’s SCHEMES

MARKETING

• Raw Material Distribution• Registration for

Government Purchase• Tender & Consortia

Marketing, • Marketing Events• Marketing Intelligence

TECHNOLOGY

• Training• Material Testing• Job-work• Energy and Environment

Audit

SUPPORT SERVICES

• Performance and Credit Rating

• B2B Portal• Training – cum –Incubation• Software Technology

Parks• International Cooperation

CREDIT

• Credit for Raw Materials & Marketing

• Credit facilitation through 15 Banks.

CREDIT

• Credit for Raw Materials & Marketing

• Credit facilitation through 15 Banks.

1)1) A self sustaining, profit making, dividend A self sustaining, profit making, dividend paying company – Dividend being paid since paying company – Dividend being paid since 2006-07.2006-07.

2)2) No budgetary support for its operations since No budgetary support for its operations since 1.4.2007.1.4.2007.

3)3) Mini – Ratna (Category-II) status conferred in Mini – Ratna (Category-II) status conferred in 2011.2011.

4)4) Achieved Achieved ‘Excellent’ ‘Excellent’ MOU rating MOU rating continuously since 2007-08.continuously since 2007-08.

5)5) ‘‘Nil’ comments received from C&AG on Nil’ comments received from C&AG on Annual Accounts continuously since 2006-07. Annual Accounts continuously since 2006-07.

6)6) Manpower – 849 in 2006-07 and 896 in 2011-Manpower – 849 in 2006-07 and 896 in 2011-12.12.

NSIC’s BRIEF OUTLINE

8)8) Training & Redeployment of Manpower.Training & Redeployment of Manpower.

9)9) All offices independent profit centre.All offices independent profit centre.

10)10) Reach & Volume of Operations multiplied Reach & Volume of Operations multiplied manifold during last few years (2006-07 to 2011-manifold during last few years (2006-07 to 2011-12):12):

a)a) Total business increased from Rs.2198 crore to Total business increased from Rs.2198 crore to Rs.11137 crore (increase of 407%).Rs.11137 crore (increase of 407%).

b)b) Business per employee increased from Rs. 2.59 crore to Business per employee increased from Rs. 2.59 crore to Rs. 12.43 crore, (increase of 380%)Rs. 12.43 crore, (increase of 380%)

c)c) Gross Margin increased from Rs. 15.33 crore to Rs. Gross Margin increased from Rs. 15.33 crore to Rs. 153.33 crore (increase of 900%), 153.33 crore (increase of 900%),

d)d) Gross Income increased from Rs.47.68 crore to Gross Income increased from Rs.47.68 crore to Rs.252.71 croreRs.252.71 crore

e)e) Profit Before Tax increased from Rs 3.00 crore to Rs. Profit Before Tax increased from Rs 3.00 crore to Rs. 60.21 crore ,60.21 crore ,

NSIC’s BRIEF OUTLINE

Performance Appraisal System in Performance Appraisal System in NSICNSIC MOU signed with each Head at the Field Office, MOU signed with each Head at the Field Office,

Zonal Office and at Head office outlining the Zonal Office and at Head office outlining the targets for each year.targets for each year.

Targets / work allocations are assigned to each Targets / work allocations are assigned to each employee at Field Office(s) and Head Office, at employee at Field Office(s) and Head Office, at the beginning of each Financial year.the beginning of each Financial year.

Targets / work allocations are also made to all Targets / work allocations are also made to all employees engaged in Support Services.employees engaged in Support Services.

The achievements of the field offices get The achievements of the field offices get evaluated on monthly basis by the respective evaluated on monthly basis by the respective Zonal Head, on quarterly basis by the Zonal Head, on quarterly basis by the Directors. A half yearly review is made by the Directors. A half yearly review is made by the CMD. CMD.

Achievements at the end of the year are Achievements at the end of the year are compared with the targets / work allocations compared with the targets / work allocations assigned for the year. assigned for the year.

Performance Appraisal System in Performance Appraisal System in NSICNSIC

Marks Grading

91-100 Excellent

71-90 Very Good

46-70 Good

31-45 Fair

1-30 Inadequate/Poor

NSIC adopted new ‘Annual Performance Assessment Report’ (APAR) with effect from 2009-10.

APAR has three segments aggregating to 100 marks viz.

a) Performance Evaluation (60 marks), b) Functional Competencies (20 marks), and c) Discipline (20 marks) Annual Appraisal is linked with the

achievements against the targets / work allocation.

Marks obtained against performance in APAR get graded as per details given below:

Performance Appraisal System in Performance Appraisal System in NSICNSIC

Performance Evaluation: made by comparing the achievements against

the targets / work allocation.

Functional Competencies:the achievements w.r.t following are assessed:a) Professional Ability and Job Knowledgeb) Quality of Workc) Judgement, Decision Making and Initiatived) Organizational Commitment

Discipline:the achievements w.r.t following are assessed:a) System Discipline b) Personal Conductc) Punctuality and Frequency of Leaved) Inter Personal Relations

Performance Related Pay (PRP) in Performance Related Pay (PRP) in NSICNSIC

DPE’s guidelines on PRP followed.DPE’s guidelines on PRP followed.

Remuneration Committee of the Board Remuneration Committee of the Board constituted, consisting of three independent constituted, consisting of three independent Directors.Directors.

Headed by an Independent Director.Headed by an Independent Director.

PRP paid in NSIC from 2009-10 to Executives PRP paid in NSIC from 2009-10 to Executives and in 2010-11 to Executives and Unionized and in 2010-11 to Executives and Unionized cadres.cadres.

Financial Year

PBT 3% of

PBT

PRP from 3%

Incremental PBT

10% of

Col. 6

2% of PBT

PRP from Col. 6

5% PBT

Total PRP

Distributable ProfitYear Amt.

1 2 3 4 5 6 7 8 9 10 11 12

2009-10 25.94 0.78 0.78 (09-10)(-)

(08-09)

19.02 1.90 0.52 0.52 1.30 3.27 1.30

2010-11 35.17 1.06 1.06 (10-11)(-)

(09-10)

9.23 0.92 0.70 0.70 1.76 3.97 1.76

Details of PBT, PRP, Distributable Details of PBT, PRP, Distributable ProfitProfit (Rs. In Crore)

PRP for 2009-10 and 2010-11 was restricted to PRP for 2009-10 and 2010-11 was restricted to Distributable Profit for each of these years.Distributable Profit for each of these years.

Bell Curve Approach in NSICBell Curve Approach in NSIC

DPE’s guidelines on compliance of ‘Bell Curve DPE’s guidelines on compliance of ‘Bell Curve Approach’ followed w.e.f. 2010-11. Approach’ followed w.e.f. 2010-11.

For complying with ‘Bell Curve Approach’, For complying with ‘Bell Curve Approach’, NSIC has taken:NSIC has taken:

a)a) 15% of the highest ranked amongst the 15% of the highest ranked amongst the ‘Excellent’ graded employees, and‘Excellent’ graded employees, and

a)a) 10% of the employees have been graded as 10% of the employees have been graded as ‘Poor’.‘Poor’.

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