HRDD-779/2018-Performance Based - Employee Incentive ...aipnbsf.org/files/Performance Based Employee...

PUNJAB NATIONAL BANK

HUMAN RESOURCES DEVELOPMENT DIVISION Corporate Office, Plot no.4, Sector 10,

Dwarka, New Delhi -110075

August 16, 2018

TO ALL OFFICES

HRDD Circular No. 779

Reg.: Performance Based - Employee Incentive Policy (EIP)

In order to inculcate performance driven culture in Bank and reward Employees/

Business Units which are contributing significantly towards Bank’s goals and

corporate expectations, an Employee Incentive Policy (EIP) has been approved by

the Board in its meeting dated 15.06.2018.

This Policy aims to implement Enhanced Access and Service Excellence (EASE)

agenda of Ministry of Finance, Government of India for Developing Personnel

through identification and rewarding the top performers.

At present, Bank is already having reward schemes for performers in select areas

such as MD & CEO Club for Branch Heads (SMEAD Cir. no. 09 dt. 13.07.2018), for

top performers in area of recovery (Recovery Division Cir. no. 23 dt. 23.05.2018),

recognition of Digital Champions (DBD Cir no. 45 dt. 25.07.2018 & 47 dt.

30.07.2018).

The Employee Incentive Policy (EIP), extends the benefit of the incentive to all the

performers across different roles in various Branches/ Offices. Details of the

approved policy are appended.

Major Highlights of the EIP are as under:

1. The incentive policy is based on the principles of objectivity & transparency

through use of system driven data.

2. The Policy covers employees working in all Branches/ Offices of the Bank.

3. Incentives under the Policy will be in form of non cash rewards as under:

a. Option to purchase a memento/ article.

b. Learning Opportunities:

i. Specialized trainings at premier Institutes in India & Abroad.

ii. Reimbursement of fees for acquiring new qualification

c. Recognition:

i. Certificate of Appreciation

ii. Recording the achievements in employee records (HRMS).

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4. Incentive Scheme for General Banking Branches, MCBs, LCBs, SIBs, Circles

and Zones shall be administered by SMEAD, HO as per policy. Similarly,

Incentive Scheme for RAPC, Currency Chest, CPPC, ZAO, and Training Centres

shall be administered by respective owner Divisions.

5. Selection of General Banking Branches (upto VLBs) for incentive will be based

on achievement of all specified parameters. For all other categories of Branches/

Offices, selection for incentive will be based on the performance vis a vis defined

parameters/ Key Responsibility Areas.

6. Performance Parameters for ascertaining incentive eligibility of HO Divisions will

be informed separately.

7. Detailed guidelines pertaining to the Employee Incentive scheme for the F.Y

2018-19 will be issued separately.

All concerned Offices/ Divisions are requested to take note of the above and all Staff

members are requested to work towards achievement of parameters as part of

Employee Incentive Policy.

(Punit Jain)

General Manager

Index: Performance Based- Employee Incentive Policy

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HRDD Circular No. 779 Dated 16.08.2018

EIP: Annexure I

Performance Based - Employee Incentive Policy (EIP) 2018-19

An Incentive Policy is being introduced in the Bank to reward select top- performers

identified through a Performance Management System/Process. This is also a step

to move towards Enhanced Access and Service Excellence (EASE), one of the

priorities of Ministry of Finance, Government of India.

The policy aims to establish guidelines related to performance based incentive to

reward employees who significantly contribute to the Bank’ goal and perform

according to corporate expectations. Further, policy intents to inculcate performance

driven culture with ethics in the Bank by recognizing hard work done by employees

as individual and member of the team.

The policy is based on the principles of objectivity, transparency and fair evaluation

therefore the entire reward and recognition process is based on system based data

matrix drawn and programmed for arriving at evaluation which is reflective of

achievement of corporate priorities.

Scope & Coverage:

This policy shall be called Employee Incentive Policy (EIP).

The policy covers all confirmed employees working in bank posted in offices

located in India (excluding employees on deputation).

The policy shall be applicable for FY 2018-19 & onwards subject to an annual

review and shall be changed when required to align the budget, strategy and

risk appetite of the Bank for each performance period.

Incentive Recommending Factors:

The Incentive shall be based on following determining parameters:

Identification of performers through Performance Management System.

Objective grading framework that distinguishes top performers.

Achievement of various Budgeted Business Parameters.

Recommendation of controlling Authority w.r.t. Qualitative aspects, Effort

made by employee to achieve budgets, Compliance/ Inspection Reports,

prudence risk taking approach, Integrity etc.

Incentive Plans:

Incentives to encompass following:

Non Cash Rewards:

- Option to purchase a memento/ article.

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EIP: Annexure I

Learning Opportunities:

- Specialized trainings at premier Institutes in India & Abroad.

- Reimbursement of fees for acquiring new qualification.

Recognition:

- Certificate of Appreciation

- Recording the achievements in employee records (HRMS).

Categories eligible for Incentive:

Employees of the bank shall be eligible for incentive under following Categories:

Category Inclusion Applicability/ Eligibility

I. General Banking

Branches (upto

VLBs)

All Branches* achieving all specified parameters will

be eligible for the incentive.

* Note: In case, less than 3 branches qualify the

above criteria, 3 top branches of the circle shall be

eligible for the incentive.

II. Branches (LCBs/

MCBs/ ELBs &

SIBs)

Based on the performance in Budgeted Parameters

of the branch, total number of branches eligible for

incentive shall be as under:

Branch Type Number of Branches eligible for

incentive

LCB 1

MCB 1

ELB 3

SIB 3

III. Service Branches

(RAPCs, Currency

Chest, CPPCs) &

Other offices

(Training Centres,

ZAOs and

LDMOs)

Service Branch/ other offices in each category to be

identified by the owner Division on their parameters :

Offices Owner Division Number of Office eligible for Incentive

RAPCs Retail Banking Division

3

Currency Chest Govt. Business Division

2

CPPCs Govt. Business Division

1

Training Centers LKMC, HO 1

ZAOs Inspection & Audit Division

1

LDMOs PS & FI Division 2

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EIP: Annexure I

IV. Zonal & Circle

Offices

Top 1 Zone & Top 3 Circles

V. HO Divisions 3 HO Divisions**

(** Division each from Business, Support & Control

Divisions)

Administration of Incentive:

Administration Authority at various levels shall administer the type of incentive

taking into account the achievement of business parameters and rationalization

of performance in case of non fulfilment of budgets due to various issues beyond

the control of the business unit.

The competent authorities for the purpose of approving eligible offices for

incentives in various categories shall be as under:--

Category Inclusion Administration Authority/ Incentive

Committees

I. General Banking Branches

(upto VLBs)

SMEAD, HO shall be the nodal Division to

place the performance of these branches to

Managing Director & CEO for decision.

II. Branches (LCBs/ MCBs/

ELBs & SIBs)

SMEAD, HO shall be the nodal Division to



III. Service Branches

(RAPCs, Currency Chest,

CPPCs) & Other offices

(Training Centres, ZAOs

and LDMOs)

Eligible Branch/ office to be identified by

the respective owner Divisions on the

specified parameters. HRDD, HO shall be

the nodal Division to place the performance

of these offices to Managing Director &

CEO for decision.

IV. Zonal & Circle Offices SMEAD, HO shall be the nodal Division to



V. HO Divisions Performance of the Divisions (categorised

under category: business/ Control/

Support) shall be based on the parameters

to be advised to respective Division

Separately. Further, Division may also

place any other Achievements/ work done

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EIP: Annexure I

by the division in this context.

The parameters for selection of eligible

office shall be finalized in consultation with

respective owner Division.

HRDD, HO who shall be the nodal Division

to place the performance of these offices to


Quantum of Incentive

Applicability & Quantum of Incentive:

Type of Incentive Applicability & Quantum

Option to purchase a

memento/ article

All employees under winning categories are eligible for

the incentive as under:

Scale Admissible amount for purchase of Memento/ article (Amount in Rs.)

ZM/ GM 200000

DGM 100000

AGM 80000

Chief Manager 60000

Sr. Manager 35000

Manager 25000

Officer 15000

Clerical 8000

Sub staff 5000

Specialized trainings

at premier Institutes in

India & Abroad.

Select officers form Top Branch/ Office under each

category will be considered for trainings at premier

Institutes in India & Abroad.

Reimbursement of

fees for acquiring new

qualification.

- Guidelines regarding acquiring special qualification have been conveyed by the LKMC circular no.03/2014 & 02/2016 -Apart from the above the officers selected for incentive shall also be eligible for acquiring certification from Digital Platforms. -The Competent Authority shall be General Manager- LKMC. - Maximum Reimbursement of fees for above shall be Rs.20000/-

Certificate of

Appreciation

Employees covered under all categories

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EIP: Annexure I

Recording the

achievements in

employee records

(HRMS).

Employees covered under all categories

Selection Criteria/ Process:

In case PMS score is not available, Performance shall be calculated by relevant

data drawn out of online systems & portals in the bank and put in matrix for the

parameters as mentioned below.

Category I: General Banking Branches (upto VLBs)***

Branches achieving all the following parameters will be eligible for the

incentive:

- Growth in CASA - Budget for Average Core Deposits - Budgets for Advances(Core Retail/ Agriculture/ MSME)

- Budgets for Fee based income

- NPA Management

Category II: (LCB/MCB/ELB/SIB)***

Selection criteria of the LCB/ MCB/ SIB to be based on following Parameters:

- NPA Management


- Reduction in RWAs

Selection of ELB to be based on achievement of following Parameters:

- Growth in CASA - Budget for Average Core Deposits - Budgets for Advances(Core Retail/ Agriculture/ MSME)


- NPA Management

Category III: (Specialized Offices)

- Respective owner Division shall carry out the exercise of identifying top

performing offices/branches based on specified parameters as per

Annexure A, with specific detailed calculations. Divisions may add or

delete any parameter keeping in the view of the Business Priorities with

the permission of respective General Manager.

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EIP: Annexure I

- Division shall send the recommendations to the HRDD, HO who shall be

the nodal Division to place the performance of these branches to


Category IV: (Zones/ Circles)***

Selection criteria of the Zone/ Circle to be based on achievement of

following Parameters:

- YoY Growth in Average CASA - YoY Growth in Average Core Deposits - YoY Growth in Advances(Core Retail/ Agriculture/ MSME)


- NPA Management

- Number of Circles/ Branches registering positive Growth (Profit)

- Reduction in RWAs

Category V: (HO Division)

- Performance of the Divisions (categorised under category: business/

Control/ Support) shall be based on the performance parameters to be

informed separately. Further, Division may also place any other

Achievements/ work done by the division in this context.

- HRDD, HO shall be the nodal Division to place the performance of

these offices to Managing Director & CEO for decision.

*** Note: Detailed marking scheme for Branches, Circles & Zones is annexed at

Annexure B.

Restrictions:

Claw Back Clause: It is important to understand that a good decision today

might have negative future consequences. In event of identification of any

imprudent risks which are not consistent with the long term health of the

Bank or non adherence to internal procedures and/or proper risk

management in the decision-making process, all incentive will be subjected

to claw back arrangements.

A staff member coming under any of the category mentioned below shall not

be eligible for the incentive:

- Employee involved in fraud etc. during the review period.

- Employee placed under suspension during the review period.

- Major penalty has been inflicted upon the employee during the review

period.

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EIP: Annexure I

- Any contemplated case is arising against an employee, out of cause of

action happening during the review period.

- Prosecution for criminal charge is pending.

- Employee categorized under LODI/ Agreed List during review period.

Miscellaneous:

To be eligible for incentive, rating of an officer in APAR for the preceding 5

years should Very Good or above.

An employee who is already eligible for incentive under any other incentive

scheme of the Bank during the review period, shall not be eligible for incentive

under the scheme issued under this policy.

For purposes of paying amount for purchase of memento/ article, the staff

working or who were working at such offices for the period for which the office

has got the award, would be eligible for the incentive even though they may

have been transferred/ retired, on a pro-rata basis, for the period of stay at

such offices. Incentive amount shall be calculated as under:

Amount of Incentive X No. of days worked in the incentive winning office

365

Sanctioned leave will be included for number of days for basis of calculation

of incentive. An employee who has availed more than 1 month leave during

the review period shall be eligible for the prorata incentive.

Part Time Sweepers are also covered as part of sub-staff for payment of

amount of incentive for purchase of memento/ article on prorata basis.

Data generated from the system [wherever applicable] shall be taken for

calculation of score.

An employee on deputation working in incentive winning branches/ offices

shall be eligible for incentive; vice-versa is not applicable.

Only employees having more than 6 months of residual service as on

31.03.2019 shall be eligible for the incentive.

The incentive would not be available to staff posted in subsidiaries/ outside

agencies on deputation and those on sabbatical leave/ loss of pay. An

employee who has resigned from the services of the bank will not be eligible

for getting incentive.

The SMEAD, HO shall provide the list of offices eligible for the incentive under

category I, II & IV to HRDD, HO after finalization.

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EIP: Annexure I

After completion of disbursement process, ZO/COs would send a

consolidated statement containing the names of employees category wise

and amount of incentive paid for purchase of memento/ article under various

categories to HRDD, HO. The total amount paid should tally with the amount

entered in HRMS and appearing in revenue statement of the Circle/Zone.

After approval by HO, Zone/Circle Office would calculate and enter the

amount of incentive for purchase of memento in HRMS of each employee and

pay the eligible amount to the debit of Expenditure Head “Performance Linked

Incentive paid to staff” in the CBS system, at Circle Office/ Zone. A record of

approval by Circle Head and HO approvals shall be kept for audit.

Operational Guidelines & Other Modalities:

The policy depicts the broad guidelines for providing incentives to employees based

on the existing processes and PMS Score (wherever applicable). The Managing

Director & CEO is empowered to approve the detailed operational guidelines,

modification (if any) and modalities of this policy.

**********

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Annexure -A

Selection criteria/ parameters for Specialized Offices/ Branches

I. Parameters for Selection of LDMO:

S.No. Parameters Marks

1 Annual Credit Plan (% Achievement) & Total Priority Sector advances and Agriculture Advances vis-à-vis budgets allotted to LDMO by circle office (Growth Rate).

20

2 Total Deposits vis-à-vis budgets allotted to LDMO by circle office (Growth Rate).

20

3 Total Agriculture Investment Credit- Fresh Sanction/ Disbursement vis-à-vis budgets allotted to LDMO by circle office.

10

4 No. of SHGs credit linked during the year. 10

5 Financial Inclusion –

No. of BSBDA A/cs/ PMSBY/ PMJJBY/ APY opened during the year.

Activation of SSAs/ BC Agents during the year.

10

10

6 Recovery / Reduction in NPA and Fresh Slippage. 20

II. Parameters for Selection of RAPC:

PARAMETERS/ SCORE 0 1 2 3 4 5

Total Sanctioned Amount (Housing+Eucation+Mortgage) (Amt. in Crs.)

Below 40

40<50 50<75 75<100 100<125

125 and above

Lead Conversion Rate (In %age)

Below 50

50<60 60<70 70<80 80<90 90 and above

Turn Around Time (TAT) {In Days}

More than 15

More than 13 upto 15

More than 11 upto 13

More than 9 upto 11

More than 7 upto 9

Upto 7

Sanction Per Day Per Officer [(Sanction/No. of Officer)/ No. of Working Days] {Amt in cr}

Below 0.40

0.40<0.60

0.60<0.70

0.70<80

0.80<1 1 and above

LAPS Usage (Housing & Education) {In %age}

Below 50

50<65 65<80 80<90 90<95 95<100

TAT for vetting of loan proposal entered through E-Veda {In Hrs.}

More than 120

120<96 96<72 72<48 48<24 Less than 24

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Annexure -A

III. Parameters for Selection of Training Centre/college:

1. Programme & Participation:

PARAMETERS Targets Achievements KRAs Maxi.

Marks* 20

No. of programme to be conducted

No. of Participant attended

No. of programme where participants are more than 30

No. of employees (in a command area of college/ centre) who have not been imparted training during the last 2 years based on figure at the end of the F.Y. 2018-19.

2. Faculty Utilization:

No. of Faculty

No. of programme conducted

No. of Session taken

Average Session per faculty

No. of Publication

No. of Research Assignment submitted

No. of outside training attended

Maxi. Marks* 20

3. Programme & Coordination : (Based on feedback received from

participants)

Category Outstanding Excellent Very Good

Good Needs Improvement

Marks* 20

Programme

Coordination rating

4. Logistics:

Category Excellent Very Good

Good Satisfactory Unsatisfactory Marks* 15

Catering

Accommodation

Cleanliness

Library

5. Classroom Utilization:

Classrooms Capacity

Training Days

Maximum Capacity Available

Actual Capacity utilization

% utilization Marks* 15

6. Compliance : MARD Rating Timely

Closure of MARD

Compliance of TMC Minutes

Compliance of LKMC reporting system

New Initiative if any

Marks* 10

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Annexure -A

IV. Parameters for Selection of Currency Chest:

S. No

Parameter Data/Document to be submitted

Marks

1. Levy of penalty/penal interest by RBI on account of i) detection of shortage/ forged notes in the remittances made to RBI during FY 2018-19. ii) Detection of shortage/ forged notes in chest balances during conduct of inspection of the chest. iii) Non compliance of operational guidelines of RBI/violation of any terms & conditions of agreement with RBI/deficiency in service

Date-wise detail of Penalty/penal interest levied by RBI during FY, with reasons

15

2. Levy of Penal Interest by RBI on account of delayed/ wrong/non reporting of Currency Chest transactions during FY 2018-19

Date-wise detail of penal interest levied by RBI during FY, with reasons

15

3. Maintenance of average cash ratio of the branches attached to the chest as per average budget allocated

Provide list of branches attached and cash retention fixed for each branch and achievement of each branch for March 2019.

10

4. Cash Handling charges recovered from linked other bank branches and non linked other bank branches.

Furnish date wise amount of cash handling charges as under:

Charges recovered for non-linked other bank branches prior to delinking :

Charges recovered from linked other bank branches :

20

5. Closure of Internal Annual Inspection Report/ RBI Inspection Report

Date of submission of IR ……….. Date of closure ……………..

10

6. Sorting of all Cash Receipts on daily basis and kept in chest and maintenance of cash sorting Register (Copy of sorting register be enclosed)

Please ensure that Note Sorting Register is maintained by the Currency Chest. Copy of Note Sorting Register maintained in the chest for any two months from April 2018 to March 2019 be submitted.

10

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Annexure -A

7. All remittances of soiled notes to RBI are recounted, resorted on Note Sorting Machine and suspect notes are checked manually by the person accompanying remittance to ensure remittance is free from shortage, counterfeit notes and issuable notes.

As per S. no. 1 10

8. Daily and correct ICCOM reporting to Link Office and RBI within stipulated period.

As per S. No. 2 10

V. Parameters for Selection of CPPC:

Sl. No.

Name of parameter

Marks

1

IR Rating Rating as per last IR Whether it is LOW RISK or MEDIUM RISK

20

2

Outstanding entries of Pension reimbursement / Imprest suspense / sundry /Non customer account as on 31.03.2019

30

3

Productivity Calculation of Productivity of all activities shall be done as under:

Approved Norms for activity is say-------A Actual volume is say ----------B Productivity of CPPC in activity ------B/A X 100

Productivity Norms

Production activity No.of Accounts Per Month by SWO

No.of Accounts Per Month by SA/Officer

New PPOs entered / authorised

450 500

Modifications in existing accounts

450 500

30

4

Income activity (Earlier the better)

No. of days after completion of Quarter

Receipt of Agency Commission

10 Days / 20 Days / 30 Days/>30 Days

Distribution of Agency Commission to Branches after receipt

10 Days / 20 Days / 30 Days/>30 Days

20

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Annexure -A

VI. Parameters for Selection of ZAO:

S. No.

Parameters & Max. Score (Total 100) for F.Y. 2018-19 Score Allocated

1 Overdue Regular Inspection Reports out of Total Reports >10% 0 >7% to 10% 8 >5% to 7% 12 >3% to 5% 15 Up to 3% Overdue 20

20

2 %age of QCAR closed by rectification of irregularities within stipulate period Upto 65% 0 >65% to 80% 8 >80% to 90% 12 >90% to 95% 15 >95% to100% 20

20

3 Average monthly %age of rectification of regular Inspection irregularities Average % of rectification of irregularities O/s at the beginning and identified during the month. Upto 50% 0 > 50% to 60% 8 > 60% to 70% 12 > 70% 20

20

4 Up-gradation in risk rating of Branches. ZAOs having > 90% Low Risk Rated Branches 10 ZAOs having > 80% to 90% Low Risk Rated Branches 6 ZAOs having > 70% to 80% Low Risk Rated Branches 4 ZAOs having 70% and below Low Risk Rated Branches 0

10

5 No. of Limitation Expired cases % of total no. of loan a/cs 10 >5 lac 2 to 5 lac & < 2 lac Above 3% 0 Above 5% 0 Above 5% 0 <3% 2 <3% 2 < 5% 2 <1% 4 <1% 4

10

6 Compliance Audit Audit conducted on pro rata basis i) Target = ii) Conducted = iii) Achievement 100% 20 iv ) Achievement 95 to <100% 12 v) Achievement 90 to <95 % 8 vi) Achievement <90% 0

20

Total Score (i.e. 1 to 6) 100 100

**********

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HRDD Circular No.779 Dated: 16.08.2018

Annexure B

Marking Scheme for Branches, Circles & Zones

II. Business parameters for LCBs/ MCBs/ SIBs

S.No.

Parameter

Max. Marks

1. NPA Management 45

a Achievement of NPA terminal budget 25 b Total Reduction in GNPA as per Budget [Cash Recovery +

Upgradation] 10

c NPA Slippage as % age to standard advances on the close of last FY 10 2. Fee Based Income 25

a Fee Based Income [Budget Achievement] 25 3. Reductions in RWAs 30

a Credit RWA to Credit ratio (Decrease over previous year) 30 Total 100

I. Business Parameters for General Banking Branches (incl. ELBs)

S.No.

Parameter

Max. Marks

1

Deposits

30

a Average Core Deposit - YOY Growth 15

b Growth in CASA Deposit over last year. 15

2

Advances

25

a Core Retail Advances – Absolute – YOY Growth 10

b MSME Advances – Absolute – YOY Growth 8

c Agri Advances – Absolute – YOY Growth 7

3

Fee Based Income

15

a Budget Achievement for Fee Based Income 15

4

NPA Management

30

a Achievement of NPA terminal budget 20

b Total Reduction in GNPA as per Budget [Cash Recovery + Upgradation]

5

c NPA Slippage as % age to standard advances on the close of last FY 5

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HRDD Circular No.779 Dated: 16.08.2018

Annexure B

III. Business parameters for Zones & Circles

S.No.

Parameter

Max. Marks

1. Deposits 30

a Average Core Deposit [Budget vis a vis achievement] 15 b Growth in CASA Deposit over last year. 15 2. Advances 15

a Core Retail Advances – Absolute – Budget vis a vis achievement 5 b MSME Advances – Absolute – Budget vis a vis achievement 5 c Agri Advances – Absolute – Budget vis a vis achievement 5 3. NPA Management 25

a Achievement of NPA terminal budget 15 b Total Reduction in GNPA as per Budget [Cash Recovery +

Upgradation] 5

c NPA Slippage as % age to standard advances on the close of last FY 5 4 Fee Based Income 10

a Fee Based Income [Budget Achievement] 10 5 Circles/ Branches registering Positive Growth 10

a Reduction in number of branches making loss for more than 2 years. 10 6 Reductions in RWAs 10

a Credit RWA to Credit ratio (Decrease over previous year) 10 Total 100

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