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COMPENSATION AT NTPC PVT. LTD. Submitted to – Prof. Mamta MohapatraPrepared by –Ashutosh Ranjan (11PGDHMR11)Nirankar Royal (11PGDMHR36)
INTRODUCTIONNTPC Limited is the largest Indian state-owned energy service provider based in New Delhi,India. It is listed in Forbes Global 2000 for 2011 ranked it 348th in the world1. Incorporated on7th November, 1975, it is an Indian public sector company in which at present the government ofIndia holds 84.5% (after divestment the stake by Indian government on 19th October, 2009) ofits equity. With a current generating capacity of 36,014 MW, NTPC has embarked on plans tobecome a 75,000 MW company by 2017.NTPC has been established to carry out the objectives specified in the Memorandum & Articlesof Association of the Company as amended from time to time. The main activities of NTPC aresetting up of power plants and power generation through its coal-based and gas-based powerplants. The Company has also diversified into construction of hydro power plants and generationof hydro power besides power trading and distribution of electricity. The Company has enteredinto area of coal mining & coal washeries and oil exploration as well.The business portfolio of the company is as under:1. Power Project Construction.2. Renovation & Modernization of Power Stations3. Generation of Electric Power.4. Coal Mining and Coal Washries.5. Oil/ Gas Exploration.6. Distribution and Trading of Electricity through its wholly-owned subsidiary companies.The company is also participating, in to following businesses through its Joint VentureCompanies: Power equipment manufacturing Power related services Energy efficiency servicesCOMPENSATION STRATEGY OF NTPCNTPC is known as the highest payer in the power sector. The main objectives of such strategyare – Recruitment and retention of qualified employees
Increasing the moral of employees Rewarding and encouraging good performance Achieve internal and external equity Promote loyalty Modify (through negotiations) or influence the practices of unionsREWARDS AND BENEFITSNTPC believes that everyone who works should feel valued and appreciated. That is why thecompany offers a total compensation package that includes both cash compensation and benefits.Cash compensationTo ensure that NTPC attracts, retains and motivate high-performing individuals. Thecompensation structure is designed in such a way so as to recognize and reward critical skills andcompetencies in employees. Compensation structure includes base pay, fixed bonuses,allowances or other payments relevant to the local market. Performance bonus and salesincentive may also be included in the cash compensation, and are used to ensure that theemployees are paid competitively in the market.Performance bonusHigh performing employees are paid performance bonus through schemes like „generationperformance scheme‟ to reward the employees for good performance. This helps in boosting themoral of employees and recognizes their effort.Employee stock purchase planSince 1988, NTPC has offered stock purchase plans because the company believes in the valueof employee ownership. All regular employees, including workers who are regular part-timers,are eligible to participate in the plan if they choose.Healthcare, well-being and personal benefitsNTPC offers a range of personal benefits such as medical schemes, dental schemes, healthscreening, wellness programs, retirement and insurance programs. The dependents of theemployeeare also under the purview of this benefit.Flexibility and work-life balanceNTPC is committed to create a workplace culture and environment in which the employee canbalance the career aspirations and personal priorities. The company offers a number of programs,
ranging from staggering work hours to work from home to part time regular work which givesthem the opportunity to achieve a better work/life balance.Additional programsNTPC offers employees various discounts for goods and services – NTPC Personal computerpurchase, housing assistance purchase plan, car purchase plan, child care services and mobilephone plans, fitness centers and educational courses.COMPENSATION & BENEFIT PRACTICES, POLICIES, PROGRAMS ANDPOLICIES –EMPLOYEE BENEFITS – Health care (PPO, POS, HMO, HAS) Dental care plans Retirement plans Flexible benefit plans Disability benefit plans Group life & AD insurance plans Benefits for part-time employees Domestic partner benefitsEMPLOYEE POLICY & PROGRAMS – Paid – time off (PTO) Alternative work schedule Recruitment and hiring Hiring bonuses Referral bonuses Retention bonuses Severance practices Workplace environment Career planning & professional development Military leave policy
BASIC PAY -The remunerations of employees are fixed through negotiations with Employee‟s Union subjectto the overall guidelines of Department of Public Enterprises, Government of India.Pay Scales of Executives (Effective from 1.1.2007)Scale Code Pay Scale (Rs.) Representative DesignationE1 20600-46500 Asst. Engineer/ Asst. OfficerE2 24900-50500 Executive Trainee/Sr. Astt. Engineer/ Sr. Asstt OfficerE2A 24900-50500 Engineer/OfficerE3 29100-54500 Senior Engineer/Sr. OfficerE4 32900-58000 Deputy Manager/ACDE/Deputy Supdt.E5 36600-62000 Manager/DCDE /Supdt.E6 43200-66000 Senior Manager/Chief Manager/CDE/Sr.Supdt.E7 51300-73000 Deputy General ManagerE7A 51300-73000 Addl. General ManagerE8 51300-73000 General ManagerE9 62000-80000 Executive DirectorPay Scales of Supervisors (Effective from 1.1.2007)Scale Code Pay Scale (Rs.) Representative DesignationS1 16000-35500 Jr. Controller/Jr. Foreman/ Jr. Supervisor/Jr. AccountantS2 17000-37000 Assistant Controller Gr.II/ Foreman Gr.II/Supervisor Gr. II Accountant Gr.II/Private Secretary Gr IIS3 18500-40000 Assistant Controller Gr.I/ Foreman Gr. I/Supervisor Gr.I/ Accountant Gr. I/Private Secretary Gr.IS4 20000-42500 Sr. Asst. Controller/Sr. Fore- man/Sr. Supervisor/Sr. Accoun- tant/Sr. Private SecretarySG 20500-44500 Selection Grade (w.e.f 25.1.2001)Pay Scales of Workmen (Effective from 1.1.2007)Scale Code Pay Scale (Rs.) Representative DesignationW0 8700-20000 UnskilledW1 10500-23000 Unskilled/Gangman/Mazdoor/ Attendant/Security GuardW2 11000 – 24500 Semi-skilled/Key man/Sr. Attendant/Sr.Mazdoor/Dresser-cum-First AiderW3 11500-26000 Jr.Operator/Jr.Technician/ Artisan/Jr. Draughtsman/ Jr. Assistant/Cook.W4 12500-27500 Operator Gr.IV/Technician Gr.IV/Draughtsman Gr.IV/ Assistant
Gr.IV/Steno-Typist.W5 13500-29500 Operator Gr.III/Technician Gr. Ill/Draughtsman Gr.III/ Assistant Gr. Ill/Stenographer.W6 14500-32000 Operator Gr.II/Technician Gr.II/Draughtsman Gr.II/ Assistant Gr.II/Sr. Stenographer.W7 15500-34500 Operator Gr.I/Technician Gr.I/ Draughtman Gr.I/Asstt. Gr.IW8 16000-35500 Sr. Technician/Sr .Draughtsman Sr.Assistant.W9 17000-37000 Master Technician Gr.IIW10 18500-40000 Master Technician Gr.IW11 20000-42500SG 20500-44500 Selection Grade ( the selection grade has come into force with effect from 25.1.2001)In addition to above accommodation in Company quarter on nominal rent, other perks &allowances upto 47% of Basic Pay, Leave as per Rule, Medical Treatment/ reimbursement,Subsidized Canteen facilities, Self Contributory Superannuation Benefit Fund, Provident Fund,Productivity Incentive, Performance Related Payment are also admissible as per CompanysRules.DEARNESS ALLOWANCE(For Executives, Supervisors & Workmen)The Dearness Allowance in the revised pay scales as on 1-1-97 shall be zero, w.e.f. 1.4.97, theDA payable would be governed as per the following provisions:(a) Dearness Allowance would be revised on 1st April, 1st July, 1st October and 1st January ofeach year based on the percentage increase in the quarterly average of the AICPI for the Quartersending February, May, August and November respectively over AICPI 1708.(Basic 1960=100)(b) There shall be 100% neutralization of DA for all employees. Based on the revised DAscheme, the payment Dearness allowance w.e.f 1.1.97 is enclosed at Annexure „A‟.(c) DA shall be payable on Basic pay and special pay, if anyCITY COMPENSATORY ALLOWANCE
Employees borne on the regular establishment of the Company other than those appointed oncasual/daily rated/daily but monthly paid basis; will be paid City Compensatory Allowance at therates, as given here under:i) EXECUTIVES & SUPERVISORS:CCA will be paid as per the following rates, w.e.f 01.08.97, based on the revised classification ofcities as announced by the Government of India:(Amount – Rs. per Month) (As per being informed by a reliable source in HR in theorganization) BP Month A-1 City A City B-1City B-2City (Rs.) 4001-5250 125 95 65 35 5251-6499 200 150 100 65 6500-above 300 240 180 120However, in case of any workmen if the revised amount becomes less than the existing amountthe existing amount will be paid on protection basis to such workmen.The term Pay, as above, includes in addition to basic pay, special pay, personal pay, deputation(duty) pay.CCA at the above rates will be admissible from the date of joining duty at the places mentionedabove.Payment of CCA at the above rates will be governed and regulated by the same terms,conditions and rules, as laid down in the Govt. of India, Ministry of Finance, and OfficeMemorandum No. F2 (37)-E.II (B)/64 dated 27.11.1965 as amended or modified from time totime.HOUSE RENT ALLOWANCE RULES House Rent Allowance is payable to the eligible employees who are not pro- vided with theresidential accommodation by the Company at the places where the Company has itsProjects/Units/Offices etc.APPLICABILITYFor the purpose of House Rent Allowance, the employees eligible are those borne on the regularestablishment of the Company including probationers, lien holders, deputationists (unlessotherwise specified in their terms of deputation) and persons appointed on contract basis (unless
otherwise specified in the terms of their contract) but excluding apprentices/trainees whetherengaged under Companys own training scheme or under the Apprentices Act, 1961 (save to theextent specifically mentioned in these Rules) and muster roll, daily rated, casual, badli orsubstitute employees.DEFINITIONS -In these rules, unless the context otherwise requires:"Company" means the National Thermal Power Corporation Limited including theoffices/projects/units under its management."Places" means A1, A, B-1, B-2 & C Class cities notified by the Government of India for thepurpose of payment of HRA to the Central Govt. employees, from time to time and otherunclassified localities."Family" means employees spouse, legitimate children and step children (including legallyadopted children) and parents (parents-in-law in case of female employees).Only one spouse is included in the term "Family".Grade Percentage of basic payA1 30%B-1, B-2 15%C 7.5%Unclassified 5%CONVEYANCE ALLOWANCE/REIMBURSEMENT/ADVANCES –Conveyance allowance at NTPC was different for Executives, supervisors and workers. It is asfollows –Transportation allowance per month for car – E7 & Above – Rs. 800 E5-E6 – Rs. 800 E2A-E4 – Rs. 800 E1-E2 – Rs. 800Scooter/Motor cycle – Executives – Rs. 800 Selection grade – Rs. 800
W8-W11/S1-S4 – Rs. 800 W1-W7 – Rs. 585Moped – All Executives – Rs. 645 Selection Grade – Rs. 510 W8-W11/S1-S4 – Rs. 480 W0-W7 – Rs. 400Not owning any vehicle – Executive & SG – Rs. 500 W8-W11 & S1-S4 – Rs. 400 W0-W7 – Rs. 325Transportation allowance for blind or orthopedically handicapped employees – Executives & SG – Rs. 1000 W8-W11/S1-S4 – Rs. 800 W0-W7 – Rs. 650Conveyance reimbursement(per month)For Car – E7 & Above – Rs. 3035 E5-E6 – Rs. 2690 E2A-E4 – Rs. 2350 E1-E2 – Rs. 1640For Scooter/ Motor cycle – Executives – Rs. 385 Selection grade – Rs. 385 W8-W11/S1-S4 – Rs. 80Conveyance advance for car, scooter, motorcycle and moped would be paid only up to 90% ofthe total cost of the vehicle.
CHILDREN EDUCATION ALLOWANCEOver and above Rs. 75 per month per child reimbursement. (Rs. 225 per month per child whereCCA is not payable.)Over and above Rs. 75 per month per child reimbursement. (Rs. 340 per month per child whereCCA is payable.)Hostel subsidy at Rs. 1500 per month per child.MEDICAL BENEFITSFree treatment in NTPC Hospital/ Dispensaries/ company hospital/ full reimbursement innotified or empanelled hospitals/ in non-empanelled hospitals reimbursement limited to ceilingsnotified as per the rules.LEAVE TRAVEL ALLOWANCEELIGIBILITY Staff will be entitled to LTA on completion of one year of service subject to confirmation of services For journeys performed by Air: Economy fare of airlines by the shortest route to the place of destinationINCENTIVES AT NTPC LIMITEDGENERATION INCENTIVE SCHEME (PERFORMANCE LINKED INCENTIVE)The Scheme shall be called "NTPC Power Generation Incentive Scheme".BASIC CONSIDERATIONSThe purpose of any Incentive Scheme is to motivate the employees to give their best. In the caseof a power plant, the incentive plan also takes into account the maintenance aspect of the plantwhile motivating employees to maximize generation. Any Scheme which encouragesmaximization of Generation only in the short term may be self-defeating as it leads to irreparabledamage to plants and machinery because of insufficient motivation to employee of the proper
upkeep and regular maintenance of the Plant. A successful Incentive Scheme, hence, shouldstrike a balance between short range and long range plant requirements and should achieve agood blend of the two in such a way as to optimize generation on a sustained long range basis.The parameters for payment have been determined to encourage better maintenance for higheravailability of plant.APPLICABILITYThe Scheme covers all regular employees of NTPC directly or indirectly engaged in Generationof Electricity. The Scheme will not be applicable to:- Apprentices under Apprentices Act and Trainees Casual or daily rated employeesMonthly IncentiveThe monthly incentive will be paid based on Equivalent Availability Factor (EAF %) achievedduring the month.Quarterly IncentiveThe quarterly incentive will be paid based on Equivalent Availability Factor (EAF %) achievedduring the quarter. The quarter for this purpose will be April-June, July-Sept., Oct.-Dec. andJan.-March of the financial year.Yearly IncentiveThe yearly incentive will be paid based on Equivalent Availability Factor (EAF %) achievedduring the year. The year for this purpose will be April-March of the financial year.Generation incentive payable (% of Basic Pay) -EAF 70% - Monthly – 5.625, Quarterly – 1.875, Total – 7.50EAF 90% - Monthly – 22.5, Quarterly – 7.5, Total - 30OTHER GENERAL CONDITIONSThe employees will be entitled to incentive payments on pro-rata basis for actual period ofattendance. The period of training in India for duration of not more than 15 days and casual leavewill be treated as attendance for the purpose of incentive payment.The amount of Incentive earnings will neither be termed as pay nor allowance, nor wages.Accordingly, this amount would not count for any service benefits i.e. computation of House
Rent Allowance, Compensatory Allowance, cash compensation, encashment of leave, payfixation, Provident Fund, Pension or Gratuity etc.Employees may be transferred from one department/division to another. In such cases theirentitlement for incentive will be determined as per the entitlement of the department/division inwhich they are actually posted.Relevant particulars and data relating to generation, oil consumption, attendance etc., will befinalized on the basis of records and accounts maintained by the Company.NTPC INCENTIVE SCHEME FOR ACQUIRING HIGHER/ADDITIONALQUALIFICATIONSThe NTPC Incentive Scheme for acquiring higher/additional qualifications has been formulatedwith a view to encouraging employees to acquire higher/ additional qualifications so as to enablethem to improve their knowledge and professional competence for better and more efficientperformance in their respective functional areas.APPLICABILITY:The Scheme shall be applicable to all employees and drawing pay in the regular pay scales of theCompany excluding the following:- Deputationists; Apprentices/trainees engaged under either Companys own training scheme or Apprentices Act, 1961; and Muster roll, daily-rated, casual, badli or substitute employees.OTHER CONDITIONS:If an employee, who has received the Incentive under the Scheme, leaves the services of theCompany within a year of the receipt of the incentive, he shall be liable to refund the same to thecompany before his Resignation is accepted.LONG SERVICE AWARD SCHEMEThe Scheme shall be called the “NTPC Long Service Award Scheme”
OBJECTIVE:Rewarding the employees suitably in recognition and appreciation of long, continuous andsatisfactory service rendered by them, so as to further motivate them and strengthen their rangeof belongingness to the Company.COVERAGE:The Scheme shall be applicable to all regular employees borne on the establishment of theCompany, but shall exclude the following: Casual, daily rated, temporary or muster roll employees; and Persons in employment of the Company on contract basis.ELIGIBILITY:An employee shall be eligible for grant of awards under the Scheme on completion of 15 yearsand 25 years of continuous service.THE AWARD:(a)On completion of 15 years of continuous service, the employees shall be presented with asilver plaque weighing 110 gms.(b)On completion of 25 years of service, the employees shall be presented with a silver plaqueweighing 250 grams.