COMPENSATION AT NTPC PVT. LTD.

Submitted to Prof. Mamta Mohapatra

Prepared by Ashutosh Ranjan (11PGDHMR11) Nirankar Royal (11PGDMHR36)

INTRODUCTION

NTPC 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 on 7th November, 1975, it is an Indian public sector company in which at present the government of India holds 84.5% (after divestment the stake by Indian government on 19th October, 2009) of its equity. With a current generating capacity of 36,014 MW, NTPC has embarked on plans to become a 75,000 MW company by 2017.

NTPC has been established to carry out the objectives specified in the Memorandum & Articles of Association of the Company as amended from time to time. The main activities of NTPC are setting up of power plants and power generation through its coal-based and gas-based power plants. The Company has also diversified into construction of hydro power plants and generation of hydro power besides power trading and distribution of electricity. The Company has entered into 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 Stations 3. 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 Venture Companies: Power equipment manufacturing Power related services Energy efficiency services

COMPENSATION STRATEGY OF NTPC

NTPC is known as the highest payer in the power sector. The main objectives of such strategy are 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 unions

REWARDS AND BENEFITS NTPC believes that everyone who works should feel valued and appreciated. That is why the company offers a total compensation package that includes both cash compensation and benefits. Cash compensation To ensure that NTPC attracts, retains and motivate high-performing individuals. The compensation structure is designed in such a way so as to recognize and reward critical skills and competencies in employees. Compensation structure includes base pay, fixed bonuses, allowances or other payments relevant to the local market. Performance bonus and sales incentive may also be included in the cash compensation, and are used to ensure that the employees are paid competitively in the market. Performance bonus High performing employees are paid performance bonus through schemes like generation performance scheme to reward the employees for good performance. This helps in boosting the moral of employees and recognizes their effort. Employee stock purchase plan Since 1988, NTPC has offered stock purchase plans because the company believes in the value of 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 benefits NTPC offers a range of personal benefits such as medical schemes, dental schemes, health screening, wellness programs, retirement and insurance programs. The dependents of the employee are also under the purview of this benefit. Flexibility and work-life balance NTPC is committed to create a workplace culture and environment in which the employee can balance 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 gives them the opportunity to achieve a better work/life balance.

Additional programs NTPC offers employees various discounts for goods and services NTPC Personal computer purchase, housing assistance purchase plan, car purchase plan, child care services and mobile phone plans, fitness centers and educational courses.

COMPENSATION POLICIES

&

BENEFIT

PRACTICES,

POLICIES,

PROGRAMS

AND

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 benefits

EMPLOYEE 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 Employees Union subject to the overall guidelines of Department of Public Enterprises, Government of India.

Pay Scales of Executives (Effective from 1.1.2007)

Scale Code E1 E2 E2A E3 E4 E5 E6 E7 E7A E8 E9 Pay Scale (Rs.) 20600-46500 24900-50500 24900-50500 29100-54500 32900-58000 36600-62000 43200-66000 51300-73000 51300-73000 51300-73000 62000-80000 Representative Designation Asst. Engineer/ Asst. Officer Executive Trainee/Sr. Astt. Engineer/ Sr. Asstt Officer Engineer/Officer Senior Engineer/Sr. Officer Deputy Manager/ACDE/Deputy Supdt. Manager/DCDE /Supdt. Senior Manager/Chief Manager/CDE/Sr.Supdt. Deputy General Manager Addl. General Manager General Manager Executive Director

Pay Scales of Supervisors (Effective from 1.1.2007)

Scale Code S1 S2 S3 S4 SG Pay Scale (Rs.) 16000-35500 17000-37000 18500-40000 20000-42500 20500-44500 Representative Designation Jr. Controller/Jr. Foreman/ Jr. Supervisor/Jr. Accountant Assistant Controller Gr.II/ Foreman Gr.II/Supervisor Gr. II Accountant Gr.II/Private Secretary Gr II Assistant Controller Gr.I/ Foreman Gr. I/Supervisor Gr.I/ Accountant Gr. I/Private Secretary Gr.I Sr. Asst. Controller/Sr. Fore- man/Sr. Supervisor/Sr. Accountant/Sr. Private Secretary Selection Grade (w.e.f 25.1.2001)

Pay Scales of Workmen (Effective from 1.1.2007)

Scale Code W0 W1 W2 Pay Scale (Rs.) 8700-20000 10500-23000 11000 24500 Representative Designation Unskilled Unskilled/Gangman/Mazdoor/ Attendant/Security Guard Semi-skilled/Key man/Sr. Attendant/Sr.Mazdoor/Dresser-cumFirst Aider

W3 W4 W5 W6 W7 W8 W9 W10 W11 SG

11500-26000 12500-27500 13500-29500 14500-32000 15500-34500 16000-35500 17000-37000 18500-40000 20000-42500 20500-44500

Jr. Operator/Jr. Technician/ Artisan/Jr. Draughtsman/ Jr. Assistant/Cook. Operator Gr.IV/Technician Gr.IV/Draughtsman Gr.IV/ Assistant Gr.IV/Steno-Typist. Operator Gr.III/Technician Gr. Ill/Draughtsman Gr.III/ Assistant Gr. Ill/Stenographer. Operator Gr.II/Technician Gr.II/Draughtsman Gr.II/ Assistant Gr.II/Sr. Stenographer. Operator Gr.I/Technician Gr.I/ Draughtman Gr.I/Asstt. Gr.I Sr. Technician/Sr .Draughtsman Sr.Assistant. Master Technician Gr.II Master Technician Gr.I 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 up to 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 Company's Rules.

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, the DA 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 of each year based on the percentage increase in the quarterly average of the AICPI for the Quarters ending 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 DA scheme, 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 any

CITY COMPENSATORY ALLOWANCE Employees borne on the regular establishment of the Company other than those appointed on casual/daily rated/daily but monthly paid basis; will be paid City Compensatory Allowance at the rates, 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 of cities as announced by the Government of India: (Amount Rs. per Month) (As per being informed by a reliable source in HR in the organization) BP (Rs.) Month A-1 City A City B-1City B-2City

4001-5250 5251-6499 6500-above

125 200 300

95 150 240

65 100 180

35 65 120

However, in case of any workmen if the revised amount becomes less than the existing amount the 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 mentioned above. 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 Office Memorandum No. F2 (37)-E.II (B)/64 dated 27.11.1965 as amended or modified from time to time.

HOUSE RENT ALLOWANCE RULES House Rent Allowance is payable to the eligible employees who are not pro- vided with the residential accommodation by the Company at the places where the Company has its Projects/Units/Offices etc. APPLICABILITY

For the purpose of House Rent Allowance, the employees eligible are those borne on the regular establishment of the Company including probationers, lien holders, deputationists (unless otherwise 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 whether engaged under Company's own training scheme or under the Apprentices Act, 1961 (save to the extent specifically mentioned in these Rules) and muster roll, daily rated, casual, badli or substitute employees. DEFINITIONS In these rules, unless the context otherwise requires: "Company" means the National Thermal Power Corporation Limited including the offices/projects/units under its management. "Places" means A1, A, B-1, B-2 & C Class cities notified by the Government of India for the purpose of payment of HRA to the Central Govt. employees, from time to time and other unclassified localities. "Family" means employee's spouse, legitimate children and step children (including legally adopted children) and parents (parents-in-law in case of female employees). Only one spouse is included in the term "Family". Grade A1 B-1, B-2 C Unclassified Percentage of basic pay 30% 15% 7.5% 5%

CONVEYANCE ALLOWANCE/REIMBURSEMENT/ADVANCES Conveyance allowance at NTPC was different for Executives, supervisors and workers. It is as follows Transportation allowance per month for car E7 & Above Rs. 800 E5-E6 Rs. 800 E2A-E4 Rs. 800 E1-E2 Rs. 800

Scooter/Motor cycle

Executives Rs. 800 Selection grade Rs. 800 W8-W11/S1-S4 Rs. 800 W1-W7 Rs. 585

Moped All Executives Rs. 645 Selection Grade Rs. 510 W8-W11/S1-S4 Rs. 480 W0-W7 Rs. 400

Not owning any vehicle Executive & SG Rs. 500 W8-W11 & S1-S4 Rs. 400 W0-W7 Rs. 325

Transportation allowance for blind or orthopedically handicapped employees Executives & SG Rs. 1000 W8-W11/S1-S4 Rs. 800 W0-W7 Rs. 650

Conveyance reimbursement (per month) For Car E7 & Above Rs. 3035 E5-E6 Rs. 2690 E2A-E4 Rs. 2350 E1-E2 Rs. 1640

For Scooter/ Motor cycle Executives Rs. 385 Selection grade Rs. 385 W8-W11/S1-S4 Rs. 80

Conveyance advance for car, scooter, motorcycle and moped would be paid only up to 90% of the total cost of the vehicle.

CHILDREN EDUCATION ALLOWANCE Over and above Rs. 75 per month per child reimbursement. (Rs. 225 per month per child where CCA is not payable.) Over and above Rs. 75 per month per child reimbursement. (Rs. 340 per month per child where CCA is payable.) Hostel subsidy at Rs. 1500 per month per child.

MEDICAL BENEFITS Free treatment in NTPC Hospital/ Dispensaries/ company hospital/ full reimbursement in notified or empanelled hospitals/ in non-empanelled hospitals reimbursement limited to ceilings notified as per the rules.

LEAVE TRAVEL ALLOWANCE ELIGIBILITY 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 destination

INCENTIVES AT NTPC LIMITED

GENERATION INCENTIVE SCHEME (PERFORMANCE LINKED INCENTIVE) The Scheme shall be called "NTPC Power Generation Incentive Scheme". BASIC CONSIDERATIONS The purpose of any Incentive Scheme is to motivate the employees to give their best. In the case of a power plant, the incentive plan also takes into account the maintenance aspect of the plant while motivating employees to maximize generation. Any Scheme which encourages maximization of Generation only in the short term may be self-defeating as it leads to irreparable

damage 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, should strike a balance between short range and long range plant requirements and should achieve a good 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 higher availability of plant. APPLICABILITY The Scheme covers all regular employees of NTPC directly or indirectly engaged in Generation of Electricity. The Scheme will not be applicable to: Apprentices under Apprentices Act and Trainees Casual or daily rated employees

Monthly Incentive The monthly incentive will be paid based on Equivalent Availability Factor (EAF %) achieved during the month. Quarterly Incentive The quarterly incentive will be paid based on Equivalent Availability Factor (EAF %) achieved during the quarter. The quarter for this purpose will be April-June, July-Sept., Oct.-Dec. and Jan.-March of the financial year. Yearly Incentive The yearly incentive will be paid based on Equivalent Availability Factor (EAF %) achieved during 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 7.50 EAF 90% - Monthly 22.5, Quarterly 7.5, Total - 30

OTHER GENERAL CONDITIONS The employees will be entitled to incentive payments on pro-rata basis for actual period of attendance. The period of training in India for duration of not more than 15 days and casual leave will 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, pay fixation, Provident Fund, Pension or Gratuity etc. Employees may be transferred from one department/division to another. In such cases their entitlement for incentive will be determined as per the entitlement of the department/division in which they are actually posted. Relevant particulars and data relating to generation, oil consumption, attendance etc., will be finalized on the basis of records and accounts maintained by the Company.

NTPC INCENTIVE QUALIFICATIONS

SCHEME

FOR

ACQUIRING

HIGHER/ADDITIONAL

The NTPC Incentive Scheme for acquiring higher/additional qualifications has been formulated with a view to encouraging employees to acquire higher/ additional qualifications so as to enable them to improve their knowledge and professional competence for better and more efficient performance in their respective functional areas. APPLICABILITY: The Scheme shall be applicable to all employees and drawing pay in the regular pay scales of the Company excluding the following: Deputationists; Apprentices/trainees engaged under either Company's 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 the Company within a year of the receipt of the incentive, he shall be liable to refund the same to the company before his Resignation is accepted.

LONG SERVICE AWARD SCHEME The Scheme shall be called the NTPC Long Service Award Scheme

OBJECTIVE: Rewarding the employees suitably in recognition and appreciation of long, continuous and satisfactory service rendered by them, so as to further motivate them and strengthen their range of belongingness to the Company. COVERAGE: The Scheme shall be applicable to all regular employees borne on the establishment of the Company, 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 years and 25 years of continuous service. THE AWARD: (a) On completion of 15 years of continuous service, the employees shall be presented with a silver plaque weighing 110 gms. (b) On completion of 25 years of service, the employees shall be presented with a silver plaque weighing 250 grams.

BIBLIOGRAHY http://www.forbes.com/lists/2008/18/biz_2000global08_The-Global-2000_Counrty_5.html