A model for introducing

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A model for introducing Performance Related
Rewards in Government of India Prof Biju Varkkey,
IIM Ahmedabad.
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Introduction

• Introduction of PRR in government would lead to
  significant improvements in economy, efficiency
  and effectiveness.
• It will enhance employee motivation and will
  provide performing employees with opportunity to
  earn.
• The experience of performance related pay in
  government in a number of countries has shown
  that it led to productivity improvements and
  efficiency gains as well as tangible cost
  savings. (OECD Studies). Yes there are negative
  examples also.
• These savings may be marginal in the beginning,
  in the medium and long run these could be
  substantial and the PRR scheme can become
  self-financing.

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Introduction

• Pilot studies in India support the well known
  fact that, the approach to PRR should be
  contextual since expectations and measures of
  performance are such.
• Reforms become integral to introduction of PRR

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Introduction

• Definition of PRR in GoI emphasizes that
• PRI is not an assured entitlement for all
  employees. It is totally based on performance
  (individual, group or combination) and varies
  according to performance.
• PRI payment will be made over and above the
  compensation entitlement for a particular
  rank/position
• The model will be 1X, where X is expressed as
  percent of the annual basic salary. The value of
  X should be decided by the ministry/department.
• The PRI system runs with the support of
  Performance Budgeting at Macro Level, Employee
  Performance Management System (PMS) system and
  MIS system.
• Clarity about objectives and deliverables at
  multiple levels, starting with ministry and
  cascading down the line up to individual level
  has to be worked out.
• PInitiating the process of internal reforms.

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Introduction

• Definition of PRI in GoI emphasizes that
• PRR is for the measures of employees performance
  that are within the ambit of their influence.
• PRR is only awarded when targeted performance
  levels are exceeded by the individual or group.
• The PMS and MIS systems will capture the extend
  of target achievement. However, in rare cases
  when target achievement has failed to materialize
  because of unpredictable events, limited
  moderation can be applied.
• The fund for pay out should be generated from
  benefits accruing through higher productivity,
  cost efficiency etc.
• Awarded after a proper assessment of completed
  tasks. It is not meant for anticipated results.

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Conceptual PRI Model for the Government of India
Two-stage model is proposed that can be
generalized across the government
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Conceptual PRI Model for the Government of India

• Reforms and restructuring involves
• Process Re-engineering and restructuring
• Performance Management
• High Performance Work Organization (skill
  enhancement / training / multi-skilling,
  cross-training and job rotation, career
  development paths and job enrichment etc.)
• More delegation with autonomy and accountability.
• Public Service (Stake Holder) Accountability
  Sevottam.

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Expected Outcomes

• In the long run PRI can lead to the following
  positive results
• Enhance employee productivity/performance and
  motivation PRR will be linked to achievement of
  targets and not length of service. This will
  motivate employees to work towards their targets,
  thus enhancing their productivity. This can be
  one of the earliest achievements.
• Better internal business processes One of the
  key effects of implementing PRI will be that
  inefficient or redundant business processes will
  be reviewed to improve organisational or group or
  individual performance.
• Improve citizen service delivery Customer
  orientation of employees will be further honed if
  certain targets/ measures are directed towards
  it.
• Develop result/business orientation Result
  orientation focuses on efficient and effective
  governance and business orientation focuses on
  promoting market value of products/services.

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Expected Outcomes

• In the long run PRR can lead to the following
  positive results
• Strengthen team spirit Group rewards help in
  fostering teamwork. They also assist in
  clarifying organizational/ group objectives and
  engage employees with the organizations goal.
• Perception of procedural justice PRR has two-way
  link with perceived procedural justice. On one
  hand, proper goal setting and objective and
  transparent assessment of performance will lead
  to perception of procedural justice. On the other
  hand, perceived procedural justice is very
  critical for long term success of PRR
• Attract talent
• Accountability

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Expected Outcomes
The end objective of PRR in government about
benefits is not just limited to obtaining higher
productivity or output, but seeks larger goals of
economy (cost-effectiveness) efficiency,
effectiveness and responsive governance.
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• Thank You
• bvarkkey_at_iimahd.ernet.in