Bonus Schemes and Performance Related Pay

Bonus Schemes and Performance Related Pay

Bonus Schemes in the Central Government : Apart from DAE/DoS, there are bonus payments to Group `B’ (non-gazetted) and Group `C’ Central Government employees. The bulk of these employees are covered under the Productivity Linked Bonus (PLB) Scheme, which is implemented in Railways, Posts and Telecommunications, production units under the Ministry of Defence and other establishments.

The functioning of the PLB Scheme was reviewed in 1982-83 by a Group of officers. The Group of officers also considered the demands for grant of bonus made by those Central Government employees who were not covered by the PLB Scheme. The Group suggested evolution of a productivity linked bonus scheme for Central Government employees as a whole. Based on the recommendations of the Group, and pending evolution of a single scheme of bonus for employees, an Adhoc Bonus Scheme was evolved and the remaining employees, who were not covered by the PLB Scheme, were allowed ex-gratia payment. The Commission notes that the financial outgo on these two bonus schemes stood at ₹1847.08 crore for the year 2013-14.

 These Bonus schemes have no clear, quantifiable targets and performance evaluation of any individual, therefore, is not possible in an objective fashion. The Commission notes that Ministry of Finance has been insisting on revision of the PLB Scheme. It has been suggested, inter-alia, that the PLB scheme should be on the basis of an input-output ratio, should be based on productivity and profitability and that productivity should be assessed on financial parameters based on profitability of the organisation.

The VI CPC too had recommended that all departments should ultimately replace the existing PLB Schemes with PRIS. The VI CPC further opined that in places where PLB is applicable and it is not found feasible to implement PRIS immediately, the existing PLB schemes may be continued in a modified manner where the formula for computing the bonus has a direct nexus with the increased profitability/productivity under well-defined financial parameters.

The Commission notes that since PRIS could not be implemented, it could not supplant the existing system of Performance Linked and Adhoc Bonus Schemes.