CB BureauAs per the new guidelines of the department of public enterprises (DPE), salaries of PSU employees can vary by up to 300 per cent as three new elements – corporate social responsibility (CSR), research and development (R&D) and sustainable development – have been included in the performance assessment process.
In the appraisal scale of 100, CSR, sustainable development and R&D will account for 15 out of the 50 marks allocated to non-financial parameters.
According to DPE secretary Bhaskar Chatterjee, the 15 marks will make a considerable difference in the performance-related pay (PRP) structure for the top management of 213 functional PSUs.
‘We have introduced the PRP system under which you take home your basic salary. But if you perform well (on all counts including R&D, CSR and sustainable development), you get 100 per cent more; if you perform very good, you get 200 per cent more; and if you perform outstanding, you will get 300 per cent more,’ Chatterjee said.
Under the CSR guidelines that have become mandatory from the current financial year, a PSU with a net profit of less than Rs 100 crore will have to spend 3 to 5 per cent of it on the CSR. Those earning Rs 100-500 crore a year will have to earmark 2 to 3 per cent of it on CSR.
A company with a bottomline of Rs 500 crore and above will have to set aside 0.5 to 2 per cent on the CSR job, which should preferably be related to its business as a natural corollary.
According to the norms, investment in CSR should be project-based and mere donations to charity and expenditure related to staff benefits would not be treated as CSR.