hey people,
Im doing my MBA and currently pursuing my summer training in a Public Sector bank. The project being "differential Pay- Linked to performance".
Normally PSU banks have a very structured pay scale wherein every employee gets paid according to these scales. There is no differentiation in the compensation of the employees regardless of their performance. A performer as well as a non performer is paid the same. But with the recent autonomy given by government some large PSU banks can go in for a differential pay system but within the pay scale. Now my Bank wants me to study the Differential pay existing in companies and inturn develop a model for them.
Ive targeted a few private organisations and some private sector banks. but it is very difficult to get information regarding the existing differential pay systems especially in private banks. :roll:
Simultaneously ive studied the current performance appraisal system in my Bank and keeping in mind the their Appraisal system constraints ive decided to develop a model only for the branch heads as they have quantifiable business targets and specific KRA's. Likewisely ive started collecting data from some branch heads about their views and what would they want to incorporate in a differential pay system.
just want opinion if my approach is right and if any ideas how do i get information about performance linked pay system at private banks..
thank you
-anjali
From India, Agartala
Im doing my MBA and currently pursuing my summer training in a Public Sector bank. The project being "differential Pay- Linked to performance".
Normally PSU banks have a very structured pay scale wherein every employee gets paid according to these scales. There is no differentiation in the compensation of the employees regardless of their performance. A performer as well as a non performer is paid the same. But with the recent autonomy given by government some large PSU banks can go in for a differential pay system but within the pay scale. Now my Bank wants me to study the Differential pay existing in companies and inturn develop a model for them.
Ive targeted a few private organisations and some private sector banks. but it is very difficult to get information regarding the existing differential pay systems especially in private banks. :roll:
Simultaneously ive studied the current performance appraisal system in my Bank and keeping in mind the their Appraisal system constraints ive decided to develop a model only for the branch heads as they have quantifiable business targets and specific KRA's. Likewisely ive started collecting data from some branch heads about their views and what would they want to incorporate in a differential pay system.
just want opinion if my approach is right and if any ideas how do i get information about performance linked pay system at private banks..
thank you
-anjali
From India, Agartala
Anjili
This is a tragedy with the most of our Public Sector Organizations, where employees are given increments/pay rise irrespective of their performance. Good workers and below average performers are treated equaly in terms of salary/pay if they are working in same payscale/Pay Group.
What you need to do is to analyse whether all tasks are quantifiable or not? In Pay for Perforance System we have to quantify each task and then attach grading to that.
I think you are going in right direction by taking Senior level initially. This will help you shape up a reasonable PSM which can be stretched, later on, to down the line level.
Saleem
This is a tragedy with the most of our Public Sector Organizations, where employees are given increments/pay rise irrespective of their performance. Good workers and below average performers are treated equaly in terms of salary/pay if they are working in same payscale/Pay Group.
What you need to do is to analyse whether all tasks are quantifiable or not? In Pay for Perforance System we have to quantify each task and then attach grading to that.
I think you are going in right direction by taking Senior level initially. This will help you shape up a reasonable PSM which can be stretched, later on, to down the line level.
Saleem
Dear Anjali,
First of all let me assure you that your approach is correct.
Variable (Performance Related) salary structure is possible only when you have defined parameters and benchmarks to measure performance.
Organizations often set benchmarks and KRAs but their feedback and measurement mechanisms are not that strong and are mostly dependent on the self appraisal and review. We need to incorporate systems like 360 degree feedback in KRA appraisals.
Sales Company have variable salary even at the lowest levels and often have most objective performance measurement systems.
Some of the components having a "Range or scale" can be incorporated even at the lower levels, depending upon the most critical factor of performance for that level.
For a bank It can be in the form of a "Customer Satisfaction Incentive" or "Response time Incentive" for the frontline staff, having defined parameters for achievement and measurement.
All the best for your project.
Mohit Mathur
First of all let me assure you that your approach is correct.
Variable (Performance Related) salary structure is possible only when you have defined parameters and benchmarks to measure performance.
Organizations often set benchmarks and KRAs but their feedback and measurement mechanisms are not that strong and are mostly dependent on the self appraisal and review. We need to incorporate systems like 360 degree feedback in KRA appraisals.
Sales Company have variable salary even at the lowest levels and often have most objective performance measurement systems.
Some of the components having a "Range or scale" can be incorporated even at the lower levels, depending upon the most critical factor of performance for that level.
For a bank It can be in the form of a "Customer Satisfaction Incentive" or "Response time Incentive" for the frontline staff, having defined parameters for achievement and measurement.
All the best for your project.
Mohit Mathur
i find ur proj interting and also the difficulty in incorporating the information regarding differenti,al pay scales.
i can suggest u to study the appraisal systems followed in SMES(small and medium scale companies) , as they dont have any entry restrictions and issues regarding confidentiality , that would render you greater assistance in doing the proj in ease
i am doin a proj in 360 degree appraisal and one step ahead of it, if you can mail me what are the kra s you have taken into consideration that would help me a lot as i am struggling in designing the parameters
tnq
raaj
From India, Hyderabad
i can suggest u to study the appraisal systems followed in SMES(small and medium scale companies) , as they dont have any entry restrictions and issues regarding confidentiality , that would render you greater assistance in doing the proj in ease
i am doin a proj in 360 degree appraisal and one step ahead of it, if you can mail me what are the kra s you have taken into consideration that would help me a lot as i am struggling in designing the parameters
tnq
raaj
From India, Hyderabad
hey,
thanx a lot for yr replies. Really appreciate them.
but still a lil perplexed about how to structure the project.
i think only if i study the existing performance pay system in private banks i will get a clearer picture. Though again it may not be very prudent to compare a private sector bank system with a public sector bank. Anyways any info at this stage i guess will take me further...
right nowwhat i have decided is to short list 4-5 KRA's like total no. of deposits, total advances given, reduction in NPA, customer satisfaction decided by no. of complaints received etc. As much as possible im trying to keep them quantifiable.
But i still have to decide how shuld i decide the quantum of the amount to be given as performance pay. I have to keep in mind the approximate cos tthis performance pay will garner to my bank. should it be:
1. certain fixed percentage of profits earned by the bank in the year
2.on an annual basis the bank can decide what part of the profits should be given as performanc pay
3.based on the performance parameters and the grades received thereof i can suggest cash figures (if u get Grade 2= Rs 5000, grade 3=rs7000 etc)
or some other scheme. please give yr views......
another question i have is that since bamking sector is one which requires team effort fr it to be a success, if initially introducing the scheme only fr the branch heads will demotivate the other employees or make them indifferent causing the scheme to fall flat on its face.... ???
i know im raving and ranting, but have so many questions...!!!!
as to yr query Raaj, id suggest go thru some performance appraisal forms of organisations similar to the one yr doing the project for.. moreover there are loads of books on performance management which will give u a clearer picture about performance app and KRA's , they will have egs of KRA's... u culd try the books authored by T V Rao.
if u need anything else let me know....
-anjali
From India, Agartala
thanx a lot for yr replies. Really appreciate them.
but still a lil perplexed about how to structure the project.
i think only if i study the existing performance pay system in private banks i will get a clearer picture. Though again it may not be very prudent to compare a private sector bank system with a public sector bank. Anyways any info at this stage i guess will take me further...
right nowwhat i have decided is to short list 4-5 KRA's like total no. of deposits, total advances given, reduction in NPA, customer satisfaction decided by no. of complaints received etc. As much as possible im trying to keep them quantifiable.
But i still have to decide how shuld i decide the quantum of the amount to be given as performance pay. I have to keep in mind the approximate cos tthis performance pay will garner to my bank. should it be:
1. certain fixed percentage of profits earned by the bank in the year
2.on an annual basis the bank can decide what part of the profits should be given as performanc pay
3.based on the performance parameters and the grades received thereof i can suggest cash figures (if u get Grade 2= Rs 5000, grade 3=rs7000 etc)
or some other scheme. please give yr views......
another question i have is that since bamking sector is one which requires team effort fr it to be a success, if initially introducing the scheme only fr the branch heads will demotivate the other employees or make them indifferent causing the scheme to fall flat on its face.... ???
i know im raving and ranting, but have so many questions...!!!!
as to yr query Raaj, id suggest go thru some performance appraisal forms of organisations similar to the one yr doing the project for.. moreover there are loads of books on performance management which will give u a clearer picture about performance app and KRA's , they will have egs of KRA's... u culd try the books authored by T V Rao.
if u need anything else let me know....
-anjali
From India, Agartala
HI Anjali
Nice project and i think u're in the correct way.
I guess its fine to start off with the seniors for appraisals and subsequent resulting revisions, if any. The juniors, well..tell me how would u do a perf app for a junior clerk? its not that u cant..no u def can and have to. but divide the staff into categories and take up caetgory-wise..that'll be easier i guess. Its not necesaary to start off with the seniors..u can take up any category..be it cashiers or managers. Do a perf App dry run on 1 categ..change yur relative KPA's and KRA's for the next and do a perf app dry run on them and so on. Its kinda lengthy but yu'll get the results u require for streamlining the whole system eventually by clubbing yur results together.
KRA's for Mgrs..u have the right ones..NPA,Deposits,Intrest Earned,Assets Acquired,Loans Given,FDs Given etc.
KRA's for Cashiers..Time taken to service indiv customers, behavioral attitude (that u can get by surveying the customer reaction), Ease with numbers, Efficiency with Micr Machinery etc., Timeliness etc.
KRA's for Front Desk Staff..mainly lies on the behavioral and Psychological front, attitudes, behaviors with customers, service with a smile, problems solved, queries attended to, time taken for each query to be solved..those kinda stuff.
Hence, overall..related each person or employee category to his/her behavioral and Technical abilities and yu'll get yur KRA's.
Hope this helps..
chow
Junaid
From India, Mumbai
Nice project and i think u're in the correct way.
I guess its fine to start off with the seniors for appraisals and subsequent resulting revisions, if any. The juniors, well..tell me how would u do a perf app for a junior clerk? its not that u cant..no u def can and have to. but divide the staff into categories and take up caetgory-wise..that'll be easier i guess. Its not necesaary to start off with the seniors..u can take up any category..be it cashiers or managers. Do a perf App dry run on 1 categ..change yur relative KPA's and KRA's for the next and do a perf app dry run on them and so on. Its kinda lengthy but yu'll get the results u require for streamlining the whole system eventually by clubbing yur results together.
KRA's for Mgrs..u have the right ones..NPA,Deposits,Intrest Earned,Assets Acquired,Loans Given,FDs Given etc.
KRA's for Cashiers..Time taken to service indiv customers, behavioral attitude (that u can get by surveying the customer reaction), Ease with numbers, Efficiency with Micr Machinery etc., Timeliness etc.
KRA's for Front Desk Staff..mainly lies on the behavioral and Psychological front, attitudes, behaviors with customers, service with a smile, problems solved, queries attended to, time taken for each query to be solved..those kinda stuff.
Hence, overall..related each person or employee category to his/her behavioral and Technical abilities and yu'll get yur KRA's.
Hope this helps..
chow
Junaid
From India, Mumbai
hi Anjali,
in our organisation we have KPA i.e key performance area ,and where in an employee will fill this KPA for every quarterhis/her own self that what he will do in the forth coming quarter.he sets his gaol,and the Mgt.matches percieved goals Vs actual rachieved and on that basis performance is judged and so the incentives.
thanx
Promila
in our organisation we have KPA i.e key performance area ,and where in an employee will fill this KPA for every quarterhis/her own self that what he will do in the forth coming quarter.he sets his gaol,and the Mgt.matches percieved goals Vs actual rachieved and on that basis performance is judged and so the incentives.
thanx
Promila
hey promila,
first would like to thank u for your reply....
with respect to your quesry regarding mba in HR... please dont get disheartened with the MAT scores... infact there are plenty of good institutes which have their own private exams or seperate screenings... u could deifnately try them (some like Wellingkars have no written tests, only GD and PIs).... one being TISS (as u are interested in HR)....
but must warn u... ull have to start yr preparations fr TISS very soon....
if u are based in maharashtra u culd try CET... u have plenty of time to prepare fr it (if ive got it right its post april)...
all the very best
let me know if u need any more help
warm regards
-anjali
From India, Agartala
first would like to thank u for your reply....
with respect to your quesry regarding mba in HR... please dont get disheartened with the MAT scores... infact there are plenty of good institutes which have their own private exams or seperate screenings... u could deifnately try them (some like Wellingkars have no written tests, only GD and PIs).... one being TISS (as u are interested in HR)....
but must warn u... ull have to start yr preparations fr TISS very soon....
if u are based in maharashtra u culd try CET... u have plenty of time to prepare fr it (if ive got it right its post april)...
all the very best
let me know if u need any more help
warm regards
-anjali
From India, Agartala
Dear Anjali,
I have some reservations about the practical implementation of Performance linked Pay. I have also posted the same in this Site. You can go through the same, if it will be of any help.
The next part regarding performance in the Banking Sector, I believe with the Regulatory Authorities in place and the social obligations( eg Rural Schemes) our PSU Banks carry out, I dont think it is advisable to link Performance to Pay for PSU.
Many people start comparing PSU Banks with Private Sector Banks, I feel it is not fair because of the following reasons.
1) Look at the difference in Minimum Balance you need to keep for Savings Accounts. Does it cater to our majority customers.
2)Private Sector Banks do not have branches in most part of rural India but the PSUs have to operate whether they incur profit or loss because of our Government Policy.
3)Think of the Political influences it have regarding Credit and Debt Facilities like Agriculutural Loan, Krishan savings , waivering of Debts, Self Employment Schemes.ect,
4) You must have come across incidents that Private Sector Banks employ Strong Arm tactics to get back thier Loan if the Lender fails to pay. PSUs cannot do that because of their socialistic nature.
5) It is very easy to talk abour Performance and Pay when you are dealing with the urban and semi urban class. But when you have instruction from the Government to give loan to farmers who you know will not be able to pay you back as part of your social or other obligation, the whole concept of perfomance and pay becomes irrelevant.
6) Last and not the least, the Board which determines PAy for PSU Banks, have some of the Best Minds of the Country, but while determing the Pay, they have to look at a wide range of factors and not only Profit and Customer base factor our Private Banks look into.
Regards,
SC
Think of a sector working with all these restrains.
From India, Thane
45I have some reservations about the practical implementation of Performance linked Pay. I have also posted the same in this Site. You can go through the same, if it will be of any help.
The next part regarding performance in the Banking Sector, I believe with the Regulatory Authorities in place and the social obligations( eg Rural Schemes) our PSU Banks carry out, I dont think it is advisable to link Performance to Pay for PSU.
Many people start comparing PSU Banks with Private Sector Banks, I feel it is not fair because of the following reasons.
1) Look at the difference in Minimum Balance you need to keep for Savings Accounts. Does it cater to our majority customers.
2)Private Sector Banks do not have branches in most part of rural India but the PSUs have to operate whether they incur profit or loss because of our Government Policy.
3)Think of the Political influences it have regarding Credit and Debt Facilities like Agriculutural Loan, Krishan savings , waivering of Debts, Self Employment Schemes.ect,
4) You must have come across incidents that Private Sector Banks employ Strong Arm tactics to get back thier Loan if the Lender fails to pay. PSUs cannot do that because of their socialistic nature.
5) It is very easy to talk abour Performance and Pay when you are dealing with the urban and semi urban class. But when you have instruction from the Government to give loan to farmers who you know will not be able to pay you back as part of your social or other obligation, the whole concept of perfomance and pay becomes irrelevant.
6) Last and not the least, the Board which determines PAy for PSU Banks, have some of the Best Minds of the Country, but while determing the Pay, they have to look at a wide range of factors and not only Profit and Customer base factor our Private Banks look into.
Regards,
SC
Think of a sector working with all these restrains.
From India, Thane
Dear Anjali,
I am a Hr professional working in Bangalore, I am also working on developing a perfromance linked pay system for my company. The approach that you have taken is 100% correct but what I feel from your post is that you know what to do but not how to go about doing it. I think the first step in your project should be to difine performance in terms of what it means to the people in your company. Have a focus group discussion with the senior and middle management of your company and let then debate and descide the performance definition and perfromance measure. I would also suggect that you try and understand the performance management system of the company because it forms the backbone of a strong variable pay system.
Well it would be helpful if you keep me updated about the developements in your project.
Regards,
Ashish
From United Kingdom,
I am a Hr professional working in Bangalore, I am also working on developing a perfromance linked pay system for my company. The approach that you have taken is 100% correct but what I feel from your post is that you know what to do but not how to go about doing it. I think the first step in your project should be to difine performance in terms of what it means to the people in your company. Have a focus group discussion with the senior and middle management of your company and let then debate and descide the performance definition and perfromance measure. I would also suggect that you try and understand the performance management system of the company because it forms the backbone of a strong variable pay system.
Well it would be helpful if you keep me updated about the developements in your project.
Regards,
Ashish
From United Kingdom,
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TEACHER PERFORMANCE APPRISAL SYSTEM.zip
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