Madhu Arora, GM (Corporate Restructuring)

Performance Management System

A robust and effective performance management system is an important HR tool to measure and incentivize desired behavior

Performance Management System in BSNL

Given BSNL's size and complexity, a step-wise approach adopted to introduce PMS in BSNL

PMS

Comprehensive group based approach to cover all employees in Group PMS (GPMS)

Field level PMS (FPMS) to cover field staff involved in sales, CSCs, exchanges and mobile operations

Individual PMS (IPMS) for officers (DGM level & above) to be gradually introduced

Group Performance Management System (GPMS)

Covers all BSNL employees in 19 group types Each Territorial Circle, non-Territorial Circle, SSA is a Group Key Performance Indicator(KPI) based score cards designed for objective and transparent assessment of performance

Group score cards have been finalized with targets assigned for all groups for this year
GPMS is aimed at rewarding everyone in the group based on overall Groups performance GPMS score to form the basis of PRP, other financial incentives
3

As part of GPMS design, all BSNL employees have been structured along 19 groups
Category of groups Group Type
1. Consumer Fixed Access 2. Consumer Mobility 3. Enterprise 4. New businesses 5. Corporate Affairs 6. HR (Incl. Legal and Vigilance) 7. Finance Sub-total Territorial Circle Sub-total 1. Project Circle 2. Maintenance Region 3. Inspections (earlier T&D) 4. QA 5. Telecom Stores 6. Telecom Factory 7. ITPC 8. NCES 9. Data N/W 10. Training Circle Sub-total SSAs Total

Number of group types

1 1 1 1 1 1 1 7 1 1 1 1 1 1 1 1 1 1 1 1 10 1 19

Number of groups
1 1 1 1 1 1 1 7 26 26 5 4 1 1 1 3 1 1 1 3 21 330 384
4

Corporate office

Territorial circles

Non Territorial Circles

SSA

Organisation redesign

Metrics for appraisal and scoring are drawn from various dimensions to give a fair appraisal
Key performance indicators
1

Financial

What impact can this person have, in terms of financial measures?

The appropriate mix of KPIs will depend on the role and on the importance of each perspective

Objective 2

Measure

Target

Weighting

Customer / Market
How can this person maximize customer satisfaction?

1 2 3

Operations / Processes
What are the operations / processes relevant to this person that most drive performance?

Weighting and mix

4 5 6

Employee development
What can this person do to most actively facilitate the development of others?

There should be no more than 57 objectives in total; more could result in lack of focus, potentially undesirable trade-offs, and reduced performance

KPIs Design Parameters

Source of Inputs
MOU Between DOT and BSNL for year 2010-11 JD and KRAs defined as part of organization Design. Interaction with individual Groups Previous BBS parameters

Criteria for KPIs definition

GPMS SCORE Card

Weighting Factors

Definition& Formulas

Strategic

Measurable

Target Can be set

Source of information Target setting mechanism

SAMPLE GPMS SCORE CARDS

Score Cards for Corporate Office Units

Circles

SSAs

Consumer Fixed Access

Group Performance Management System (GPMS) score-card

Consumer Fixed Access
Key Performance Indicators
Weighting Annual Target factor

Targets and Scores

Performance levels1
Good V.Good Excellent

Key Performance Indicators (KPI) Financial 1. 2. 3. 4. 5. 6. 7. 8. CFA Revenue - Basic (LL, PCO, VAS, etc.) (Rs. Cr.) CFA Revenue - Broadband (including VAS, IPTV) (Rs. Cr.) Net adds (by number of subscribers) - Basic (in 000's) Net adds (by number of subscribers) - Broadband (in 000's) Customer satisfaction level (including QoS) (Scale of 1 to 5) Net adds in Tax capacity (in KC) CDR implementation (No. of SSAs) CCR rate for Landline local

Targets achieved

Marks achieved

Weighted score

20% 20% 5% 7.5% 7.5% 2.5%

8518 4084 -1500 3500 5 1200 305 66.10 51 5.3 5 90 90 97 100 5

5110.80 2450.40 -2160 2100 3 720 270 58.00

6814.40 3267.20 -1830 2800 4 960 290 63 49 6

8518 4084 -1500 3500 5 1200 305 66.10 51 5.3

xxx

xxx

xxx

Customer/Market

Operations

5%
2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 5% 10% 10%

9.

CCR rate for Landline STD

45
7 6 85 83 90 90 3

10. Fault rate (LL) 11. Fault rate (BB) 12. % of faults cleared by next working day (LL) 13. % of faults cleared by next working day ( Broadband) 14. % of new services (LL) provisioned within the norm (7 days) 15. % of new services (BB) provisioned within the norm (7 days)(Subject to technical pheasibility) Overall performance 16. Overall performance (on scale of 1 to 5 - to be assessed by CMD) Total

5.4
88 87 94 96 4

5
90 90 97 100 5

1. Marks for Good rating = 60, Very good = 80, Excellent = 100. Marks achieved for rating below Good = 0. Achievement between Good and Very good and between Very good and Excellent would be linearly scaled Note: Financial parameters of budget adherence on capex and opex and EBITDA to be added when BU level financial statements are available

Consumer Mobility

Group Performance Management System (GPMS) scorecard

Consumer Mobility
Key Performance Indicators
Key Performance Indicators (KPI) Weighting factor Annual Target

Targets and Scores

Performance levels1
Good V.Good Excellent

Targets achieved

Marks Weighted achieved score

Financial 1. Revenue GSM (Rs Cr) 20% 2. Revenue GSM (VAS)(Rs Cr) 10% 3. Revenue EVDO (Rs Cr) 2.5% 4. Revenue WLL (Rs Cr) 2.5% 5. Revenue Wi- Max (Rs Cr) 5% Customer/Market 6. Net adds (by number of subscribers) (GSM - 2G) (in 000's) 5% 7. Net adds (by number of subscribers) (GSM - 3G) (in 000's) 3% 8. Net adds (by number of subscribers) (Data Card-3G) (in 000's) 2% 9. Net adds (by number of subscribers) (CDMA) (in 000's) 2% 10 Net adds (by number of subscribers) (Data Card - EVDO) (in 2% 000's) 11. Wi-MAX Net adds (By nimbers ) (in 000s) 1% 12. Customer satisfaction level (including QoS) (Scale of 1 to 5) 5% 13. % of call centre complaints resolved within 24 hours 5% Operations 14. Call drop rate (%) 5% 15. BTS availability (%) 5% 16. Blocked call rate - TCH congestion (%) 5% 17. Call handover success rate (%) 5% 18. Call set-up success rate (%) 5% Overall performance 19. Overall performance (on scale of 1 to 5 - to be assessed by CMD) 10% Total 100%

16964 3200 148 1130 395 17000 3000 200 1500 157 1035 5 70 2% 98% 2% 95% 96% 5

10178.4 13571.2 2560 1920 118.4 88.8 904 678 316.8 237.6 10200 1800 120 900 94.2 621 3 63 13600 2400 160 1200 125.6 828 4 67

16964 3200 148 1130 395 17000 3000 200 1500 157 1035 5 70 2% 98% 2% 95% 96% 5

xxx

xxx

xxx

2.2% 2.5% 97% 96% 2.2% 2.5% 94% 94.50% 95% 94% 3 4

1. Marks for Good rating = 60, Very good = 80, Excellent = 100. Marks achieved for rating below Good = 0. Achievement between Good and Very good and between Very good and Excellent would be linearly scaled Note: Financial parameters of budget adherence on capex and opex and EBITDA to be added when BU level financial statements are available

Enterprise

Group Performance Management System (GPMS) scorecard

Enterprise
Key Performance Indicators
Weighting factor Annual Target

Targets and Scores

Targets achieved Marks Weighted achieved score

Key Performance Indicators (KPI)

Performance levels1
Good V.Good Excellent

Financial 1. Revenue from leased circuits and managed services (Rs. Cr.) 2. Wholesale revenue from other carriers and service providers, i.e. bulk deals (e.g. ILD, NLD) (Rs. Cr) 3. Revenue from enterprise customers from all other voice and data offerings (e.g. PRI, mobile CUG, EPABX, leased internet, bulk broadband, data cards) (Rs. Cr.) Customer/Market 4. Number of new Platinum accounts penetrated (minimum business of Rs 40 lakhs per account p.a.) 5. Number of new Gold accounts penetrated (minimum business of Rs 10 lakhs per account p.a.) 6. Customer satisfaction level (including QoS) (Scale of 1 to 5) Operations 7. Average time taken to provision leased circuits (days) 8. MPLS Network uptime (including edge routers) (%) 9. Average restoration time for OFC and systems by regions (hours) 10.% ILD bandwidth commissioned vis--vis planned 11.% OFC route km commissioned vis--vis planned 12.% OFC system km commissioned vis--vis planned Overall performance 13.Overall performance (on scale of 1 to 5 - to be assessed by CMD) Total

40%2 -

1950

1463 -

1716 -

1950

xxx

xxx

xxx

5% 5% 10% 5% 5% 5% 5% 5% 5% 10% 100%

72 230 5 30 100% 8 100% 95% 98% 5

56 157 3

64 187 4

72 230 5 30 100% 8 100% 95% 98% 5

45 60 99.50% 99% 10 12 80% 60% 80% 70% 85% 75% 3 4

1.Marks for Good rating = 60, Very good = 80, Excellent = 100. Marks achieved for rating below Good = 0. Achievement between Good and Very good and between Very good and Excellent would be linearly scaled 2. The performance of Financial KPI no. 2 & 3 cannot be measured at present, hence no targets are being given for them and weightage of KPI 1 has been increased to 40% Note: Financial parameters of budget adherence on capex and opex and EBITDA to be added when BU level financial statements are available 10 Note: SLA related metric to be introduced in Operations once SLAs are established and enforced as standard practice, and when SLA violations are tracked in MIS

New Businesses

Group Performance Management System (GPMS) scorecard

New Businesses
Key Performance Indicators
Key Performance Indicators (KPI) Weighting factor Annual Target

Targets and Scores

Performance levels1
Good V.Good 200 8800 80% 4 4 Excellent

Targets achieved

Marks achieved

Weighted score

Infrastructure 1. Infrastructure business revenue and savings (Rs. Cr.) 2. Number of towers shared with other operators 3. Timely commissioning of USO towers (%actual vs. planned) International Business 4. Total transaction value (revenue) from international business deals (minimum value of each business deal Rs. 1 Cr.) 5. Number of international business proposals taken to offer or negotiation stage Civil Electrical Architecture USO 6. Business earned from External Works during the course of year (Rs. Cr.) 7. Electricity bill saving during the course of the year (in Rs Cr.) 8. Effective management of Architectural Services for BSNL-HQ, Territorial Circles, Telecom Factories & Training Centres (incl. building design, interior design, design standardization, cost reduction, new technologies, energy conservation, etc.) (on scale of 1 to 5 to be assessed by Circle Heads and BU heads) 9. Timely roll-out of USO towers (%actual vs. planned) Telegraph Services 10 Rationalization / closure and modernization (e.g. conversion to CSCs) of Telegraph infrastructure and systems (esp. low traffic or loss making units), and redeployment of manpower for gainful utilization (on scale of 1 to 5 to be assessed by BU Heads and Territorial Circle Heads) Telecom Factory (HO) 11. Timely and effective management of Telecom Factory related afGoods (allocation of items to circles, planning and coordination of production, etc.) (on scale of 1 to 5 to be assessed by Territorial circle Heads, Project circle heads, Maintenance region heads and BU heads) Overall performance 12. Overall performance (on scale of 1 to 5 - to be assessed by CMD) Total
1.

10% 20% 5% 10% 5% 7.5% 5% 5%

250 11000 100% 5 5

150 6600 60% 3 3

250 11000 100% 5 5

xxx

xxx

xxx

600 75 5

360 45 3

480 60 4

600 75 5

5% 5%

100% 5

60% 3

80%
4

100% 5

10%

10% 100%

Marks for Good rating = 60, Very good = 80, Excellent = 100. Marks achieved for rating below Good = 0. Achievement between Good and Very good and between Very good and Excellent would be linearly scaled Note: Financial parameters of budget adherence on capex and opex and EBITDA to be added when BU level financial statements are available. Additional revenue KPIs to be added when applicable. 11 * Figure modified as per 100 days target, (for GPMS)

Corporate AfGoods

Group Performance Management System (GPMS) scorecard

Corporate Affairs
Key Performance Indicators
Key Performance Indicators (KPI) Weighting factor Target

Targets and Scores

Performance levels1
Good V.Good 80% 90% Excellent 100% xxx 100% In time 2 90% 90% 90% xxx xxx

Targets achieved

Marks achieved

Weighted score

Corporate IT 1. % of ERP modules for which blueprint document preparation completed (target is to complete for 10 modules by March 31st, 2010) 2. Availability of critical IT systems at the Corporate Office, e.g. LAN, WAN, corporate email etc. (%) Planning & Monitoring 3. % of reports and MIS completed or published in time 4. Number of EoIs floated based on planning for forward looking communication technologies (actual vs. planned) Coordination 5. Timely monitoring or review of performance against business plan and publishing of reports and MIS (actual vs. planned) 6. % of Right to Information requests and Public Grievances cases cleared or answered within the prescribed time frame as per the norms Materials Management 7. Number of tenders finalized vis--vis total number of tenders planned + requisitioned (%) 8. % of tenders finalized within the standard time (120 days between requisition from BU and tender finalization for single stage bid and 180 days for two stage bid) 9. Inspection and followup of Nodes (Exchange Nodes, Broadband Nodes, GSM BTS, WLL BTS) Regulation 10. Timely and effective monitoring of compliance with TRAI regulations in all BSNL processes incl. tariff, license fees, spectrum etc. (on scale of 1 to 5 to be assessed by Territorial Circle Heads) 11. Timely signing of interconnect agreements with other operators including review and amendment thereof (within 30 days) Marketing 12. Number of marketing campaigns executed vis--vis requisitioned (%) 13. Quality of marketing initiatives (brand strength, customer awareness of BSNL offerings, satisfaction levels etc.) (on scale of 1 to 5) Overall performance 14. Overall performance (on scale of 1 to 5 - to be assessed by CMD) Total

15% 5% 5% 5% 5% 5% 5% 5% 10% 5% 10% 5% 10% 10% 100%

100% 100% In time 2 90% 90% 90% 70% 5000 5 50% 80% 5 5

60% 80%

Delay 2 Wk Delay 1 Wk

1 80% 80% 50% 40% 3000 3 30% 60% 3 3

1 85%

85%
70% 50% 4000 4 40% 70% 4 4

70%
5000 5 50%

80%
5 5

1. Marks for Good rating = 60, Very good = 80, Excellent = 100. Marks achieved for rating below Good = 0. Achievement between Good and Very good and between Very good and Excellent would be linearly scaled

12

Human Resources

Group Performance Management System (GPMS) scorecard

Human Resources
Key Performance Indicators
Key Performance Indicators (KPI) Weighting factor Target

Targets and Scores

Performance levels1
Good V.Good 20% 70% 70% 80% Excellent 10% 80% 80% 90%

Marks Weighted Targets score achieved achieved

Manpower planning and Recruitment 1. Effectiveness of manpower planning for executives (incl. equalization 5% or balancing of manpower amongst circles, excluding tenure circles) 2. Number of executives (DGMs, MTs, JTOs) recruited during the course 5% of the year vis--vis planned (%) (actual vs. planned) Promotion 3. Number of personnel promoted during the course of the year vis--vis 10% planned (%) (actual vs. planned) Transfers 4. Timely compliance of transfers and postings orders for executives (% 10% of transfer and posting orders executed within 45 days from date of issue) Timely completion of ACRs 10% 5. % of ACRs for corporate office completed by the required date Training 15% 6. Total number of persons trained as a percentage of total number of people in the organization (yearly MoU target) 5% 7. % of courses conducted having quality rating more than 85% by the trainees GPMS 8. Timely creation of Corporate Office , Circle office and SSA GPMS 2.5% Scorecard for 2010-11. 9. Timely mid term evaluation of BSNL CO and Circle GPMS Scorecard for 2.5% year 2010-11 FPMS 10. Timely finalisation of FPMS Scheme along with all cards 2.5% 11. Implementation of FPMS scheme in all Circles. 2.5% Staff Relation 12. Quality of Staff relations - % of mandays out of total mandays lost due to union disputes 10% Establishment 5% 13.. % of Court cases processed 5% 14. % of National Council decisions followed up as per agreed terms Overall performance 10% 15. Overall performance (on scale of 1 to 5 - to be assessed by CMD) 100% Total

10% 80% 80% 90%

30% 60% 60% 70%

xxx

xxx

xxx

100% 25% 75%

80% 21% 55%

90% 23% 65%

100% 25% 75%

30-Jun-10 15-Nov-10 20-Apr-10 100% 1% 100% 90% 5

>30 Days >15 days >30 Days >15 days >30 Days >15 days 90% 95% 3% 80% 70% 3 2% 90% 80% 4

30-Jun-10 15-Nov-10 20-Apr-10 100% 1% 100% 90% 5

1. Marks for Good rating = 60, Very good = 80, Excellent = 100. Marks achieved for rating below Good = 0. Achievement between Good and Very good and between Very good and

13

Finance

Group Performance Management System (GPMS) scorecard

Finance
Key Performance Indicators
Weighting factor

Targets and Scores

Targets Marks Weighted achieved achieved score

Key Performance Indicators (KPI)

Budgeting and Financial control 1. Timely monitoring and communication to circles (e.g. quarterly) regarding adherence on capex and opex budget (actual vs. planned) 2. Timely creation, communication and review of financial plan and budget for BSNL across all circles (actual vs. planned) Corporate Accounts 3. Timely closing of annual and quarterly accounts for BSNL and conducting external audit (actual vs. planned) Investments 4. ROI of BSNL's funds management activities (banking, treasury etc) Taxation 5. Timely filing of statutory and regulatory returns (% actual vs. planned) 6. Effectiveness and efficiency of settlement of tax related legal cases against BSNL (at COD level) (actual vs. target) Revenue Assurance 7. Planning and implementation of Revenue assurance policy, process and guidelines (on scale of 1 to 5 to be assessed by BU Heads) Transfer Pricing 8. Effectiveness of Transfer Pricing policies and guidelines incl cost, pricing and taxation issues, based on proposals of transfer pricing from respective BUs for various services (on scale of 1 to 5 to be assessed by BU Heads) Procurement Finance 9. Ratio of number of cases in which financial evaluation or financial appraisal / advice not accepted by approving authority to total number of cases for which appraisal / evaluation is carried out (%) Internal Audit 10. % of Circles, SSAs, non-territorial circles and units of Corporate Office for which internal audit (both proprietary and regulatory) conducted (actual vs. planned) Finance Personnel 11. Effectiveness of managing HR related issues for Finance cadre (incl. training, promotions, manpower planning etc.) (on scale of 1 to 5 - to be assessed by Finance Heads at Territorial Circles) Overall performance 12. Overall performance (on scale of 1 to 5 to be assessed by CMD) Total

Target

Performance levels1
Good V.Good Excellent

5% 15 days from finalisation of Quarterly Accounts 5% RE compilation by 15th October, BE by 28th Feb 10% Adoption of annual accts by Board by 30th June 10% Avg ROI for the year-4.5% 10% Filing IT Ret. by 30thSep Submit cases to COD in 45 5% days from rec. from Circles 10% 5 10% 5

30 days 21 days 15 days 15 days 1%

15 days xxx

xxx

xxx

7 days Within time

7 days Within time

4% 4.50% within time within time 5 5

30 days 15 days 15 days 7 days 3 3 4

10% less than 5 %

15%

10%

5%

10% 100%

75%

90%

100%

5% 5 10% 5 100%

3 3

4 4

5 5

1. Marks for Good rating = 60, Very good = 80, Excellent = 100. Marks achieved for rating below Good = 0. Achievement between Good and Very good and between Very good and Excellent would be linearly scaled

14

Group Performance Management System (GPMS) scorecard

Territorial Circle
Group Group level weightage S. No. Dimension KPI Weig Target htage Performance Levels1 Target Marks Weighted Achieved Achieved Score

1 2 3 4 5 Consumer Fixed Access 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Consumer Mobility 30% 20 21 22

Financial Financial Customer / Market Customer / Market Customer / Market Operations Operations Operations Operations Operations Operations Operations Operations Operations Operations Operations Financial Customer / Market Customer / Market Customer / Market Operations Operations Operations Operations

CFA Revenue - Basic (LL, PCO, VAS, etc.) (Rs. Cr.) CFA Revenue - Broadband (including VAS, IPTV) (Rs. Cr.) Net adds - (by number of subscribers) Basic (in 000's) Net adds - (by number of subscribers) Broadband (in 000's) Customer satisfaction level (including QoS) (Scale of 1 to 5) Net adds in tax capacity(in KC) CDR Implementation (No. of SSAs) CCR rate for Landline local CCR rate for Landline STD Fault rate LL Fault rate BB % of faults cleared by next working day LL % of faults cleared by next working day BB % of new services (LL) provisioned within the norm (7 days for LL) % of new services (BB) provisioned within the norm (7 days of BB) [subject to technical feasibility] Overall performance (on scale of 1 to 5 - to be assessed by Director - CFA) CM revenue (Rs. Cr.) CM Net adds - GSM (by number of subscribers) (in 000's) CM Net adds - CDMA (by number of subscribers) (in 000's) CM Net adds - WiMAX (by number of subscribers) (in 000's) BTS availability (%) Call drop rate (%) Blocked call rate - TCH congestion (%) Overall performance (on scale of 1 to 5 - to be assessed by Director - CM)

20% 20% 5% 7.5% 7.5% 2.5% 5.0% 2.5% 2.5% 2.5% 2.5% 2.50% 2.50% 2.50% 5.00% 10% 40% 13% 2% 5% 10% 10% 10% 10%

692.48 393.00 -118.67 350 5 212 21 69.8 54 4.2 5% 90% 100% 99% 100% 5 1458.83 2497.00 70 80.80 98% 2% 2% 5

Good V.Good Excellent 415.49 553.98 692.48 235.80 314.40 393.00 -170.88 210 3 127 12 60.0 46 7.5 6% 85% 90% 90% 90% 3 1312.95 2247.30 63 48.48 96% 2.5% 2.5% 3 -144.78 280 4 170 17 65.0 51 5.5 5.4% 88% 97% 95% 96% 4 1385.89 2372.15 66.5 64.64 97% 2.2% 2.2% 4 -118.67 350 5 212 21 69.8 54 4.2 5% 90% 100% 99% 100% 5 1458.83 2497.00 70 80.80 98% 2% 2% 5

25%

23
24

15

Group Performance Management System (GPMS) scorecard

Territorial Circle
25 26 Enterpris e 15% 27 Financial Customer / Market Operations Operations Operations Financial Financial Financial Financial Other 20% 33 Customer / Market Employee development Enterprise BU revenue (Rs. Cr.) Number of new Enterprise Gold accounts penetrated MLLN / MPLS network uptime (%) Average provisioning time for leased circuits(no. of days) Overall performance (on scale of 1 to 5 - to be assessed by Director - Enterprise) New Businesses revenue (Rs. Cr.) Budget adherence on opex (% actual spend vs. budgeted) (on items excluding those in schedule P) Operating ratio (%) Overall assessment on Finance related issues, including budget adherence, financial planning, accounting, revenue assurance etc. (on scale of 1 to 5 - to be assessed by DirFinance) Customer satisfaction level (including QoS) (Scale of 1 to 5) Overall assessment on HR related issues, including training, recruiting, promotion, transfers etc. (on scale of 1 to 5 - to be assessed by Dir-HR) Overall performance (on scale of 1 to 5 - to be assessed by CMD) 40% 20% 15% 15% 10% 15% 15% 15% 15% 156.86 20 98% 30 5 17 100% 58% 5 117.65 14 96% 90 3 8.5 115% 75% 3 138.04 17 97% 60 4 12.75 105% 68% 4 156.86 20 98% 30 5 17 100% 58% 5

28
29 30 31 32

34

20% 20%

5 5

3 3

4 4

5 5

35 Overall performa nce

100%

10%

36

Overall assessment

1. Marks for Good rating = 60, Very Good = 80, Excellent = 100. Marks achieved for rating below Good = 0. Achievement between Good and Very Good and between Very Good and Excellent would be linearly scaled CFA - CO Nodal designate: Mr. Tarun Kumar (GM, BP - CFA) CM - CO Nodal designate: Mr. B.N. Mishra (GM, Product & Pricing) Enterprise - CO Nodal designate: Mr. S. K. Seth (GM, Business Planning) New Businesses - CO Nodal designate: Mr. R. P. Nigam (Sr.GM, TF - NB) HR - CO Nodal designate: Mr. Neeraj Verma (GM, Training) Finance - CO Nodal designate: Mr. K. R. Tiwari (GM, Transfer Pricing, Revenue Assurance & Finance Personnel) Note: i) Assessment by CMD and all directors of the BSNL board will be based on qualitative measures defined for the parameters

16

Group Performance Management System (GPMS) scorecard

SSA
Group Group level S. No. weighta ge Dimension KPI Target Weight Marks Weighta Target Performance Levels1 Achieve ed Achieved ge d Score Good 1 Financial CFA Revenue - Basic (LL, PCO, VAS, etc.) (Rs. Cr.) 20% Very Excelle Good nt

2
3 4 5 6 Consumer Fixed Access 25% 7 8 9

Financial
Customer / Market Customer / Market Customer / Market Operations Operations Operations Operations

CFA Revenue - Broadband (including VAS, IPTV) (Rs. Cr.)

Net adds - (by number of subscribers) Basic (in 000's) Net adds - (by number of subscribers) Broadband Productivity of Sales Associates of SSA in number of connections/Active SA per month CCR rate for Landline local CCR rate for Landline STD Fault rate LL Fault rate BB

20%
5% 10% 5% 2.5% 2.5% 2.5% 2.5%

10
11 12 13 14 15 16 17 18 Consumer Mobility 30% 19 20 21 22

Operations
Operations Operations Operations Operations Financial Customer / Market Customer / Market Customer / Market Customer / Market Customer / Market Operations Operations

% of faults cleared by next working day LL

% of faults cleared by next working day BB % of new services (LL, BB) provisioned within the norm (7 days for LL, 7days for BB) Timely implementation of CDR project (actual vs. planned) Overall performance (on scale of 1 to 5 - to be assessed by Circle Head) CM revenue (Rs. Cr.) CM Net adds - GSM (by number of subscribers) (in 000's) CM Net adds - CDMA (by number of subscribers) (in 000's) CM Net adds - Wi-Max (by number of subscribers) (in 000's) % of Non BSNL Retailers converted in to BSNL Retailers vis--vis number of retailers serveyed in SSA. True reflection of secondary sale of SIMs in sanchar soft ,for SIM selling and recharge selling retailers. BTS availability (%) Overall performance (on scale of 1 to 5 - to be assessed by Circle Head)

5%
5% 10% 5% 5% 40% 15% 5% 5% 5% 5% 20% 5%

17

Group Performance Management System (GPMS) scorecard

SSA
23 24 Enterprise 15% 25 26 27 28 29 Financial Customer / Market Operations Operations Operations Financial Financial Enterprise BU revenue (Rs. Cr.) Number of new Enterprise Gold accounts penetrated MLLN / MPLS network uptime (%) Average provisioning time (no. of days) Overall performance (on scale of 1 to 5 - to be assessed by Circle Head) New Businesses revenue (Rs. Cr.) Budget adherence on opex (% actual spend vs. budgeted) (on items excluding those in schedule P) 40% 20% 15% 15% 10% 20% 15%

30 Other 20% 31 32

Financial

Overall assessment on Finance related issues, including budget adherence, financial planning, accounting, revenue assurance etc. (on scale of 1 to 5 - to be assessed by Circle Head) Customer satisfaction level (including QoS) (Scale of 1 to 5) %Implementation of Field Performance Management system on time

20%

Customer / Market Performance mangement Employee development

20% 10%

33

Overall assessment on HR related issues, including training, recruiting, promotion, transfers etc. (on scale of 1 to 5 - to be assessed by Circle Head)

15%

Overall 10% performance

34

Overall assessment

Overall performance (on scale of 1 to 5 - to be assessed by Circle Head)

100%

1. Marks for Good rating = 60, Very Good = 80, Excellent = 100. Marks achieved for rating below Good = 0. Achievement between Good and Very Good and between Very Good and Excellent would be linearly scaled Note: Targets would be set by nodal designate at circle office under the guidance of respective functional heads and the CGM. The nodal designates at SSAs are required to coordinate with the respective circle office nodal designates for any clarifications/further alignment as per the direction of SSA head. 18

Explanation of target and performance level for a positive parameter - Revenue

Marks achieved for revenue of a group between 0 and 400 Cr.
100 marks 100 marks

Marks achieved
100
60 marks

80 marks

80 60 40
0 marks

20 0 0 50 100 150 200 250 300 350 400

Revenue (Rs. Cr.) Illustration of defining performance levels

Target
60 300 100

Illustration of marks vis--vis achievement

Target Achieved Marks Achieved 0 60 76 86.7 100 100
19

Performance levels
80 150 100 300

50 100 140 200 300 350

Explanation of target and performance level for a negative parameter Average restoration time
Marks achieved for average restoration time of a group between 8 and 16 hrs
100 marks

Marks achieved
100

80 marks 60 marks

80
100 marks

60 40 20 0

0 marks

10

11

12

13

14

15

16

17

18

19

20

Average restoration time (hrs) Illustration of defining performance levels

Target
60 8 16

Illustration of marks vis--vis achievement

Target Achieved Marks Achieved 0 60 70 80 100 100
20

Performance levels
80 12 100 8

20 16 14 12 8 6

LINKAGES TO PMS

Organisation redesign

GPMS is presently proposed to be linked to PRP, PLI Non Financial Awards- Trophies, Certificates in FPMS
Important to link PMS to Transfers Promotions Training / Travel opportunities
Performance management system can be a key HR tool
Financial incentives Bonus scheme Variable compensation Other benefits

Career management Promotion policy Transfers

Non-financial rewards

Performance Management System

Top-performer program Material rewards / perks Training / travel opportunities

Recognition Feedback Formal recognition in company / other forums

Source: BCG analysis

21

Linkage of GPMS to PRP

DPE Guidelines

How can PRP be worked out?

22

Organisation redesign

GPMS could potentially be the basis for PRP

Incentive payout pool available will be based on the company's financial performance
DPE guidelines for PRP (Performance Related Pay)
Contributes to 60% of payout pool

A Profit before Tax (PBT) for current year X 3%

Total payout pool available

+
B Incremental PBT (Current Previous) X 10%
Contributes to 40% of payout pool (ceiling 2% PBT)

(cannot exceed 5% of current year PBT)

1. Ceiling of 2% of current year PBT Source: Department of Public Enterprise (DPE) guidelines

23

Organisation redesign

Individual payout to be based on a combination of factors

2
Base Salary (Rs.)

3
MoU rating1

4
Performance rating

5
Grade level

6
Prorating factor Payout (Rs.)

PRP calculations
A PRP from current year profit

PRP split

60% X
Base salary of the individual

Company MoU rating

Individu al's Perform ance rating

B PRP from incremental profit

40%

PRP ceiling for each grade level as per DPE guidelines

Scaling factor based on available payout pool2

To be calculated from current and previous year PBT

Total

Based on DPE guidelines

Based on GPMS scorecard rating

1. PRP eligibility based on MoU rating as per DPE guidelines: Excellent (100%), Very Good (80%), Good (60%), Fair (40%), Poor (0%). 2. Example: if available payout pool is Rs. 30 Cr. and total possible payout is Rs. 40 Cr., pro-rating factor is 30/40 = 0.75 Source: Department of Public Enterprise (DPE) guidelines

24

Organisation redesign

Groups within a category will have a 'bell-curve' distribution based on performance

Distribution of Groups based on performance Total no. of units 7 26 21 330 384 Excellent (15%) 1 4 3 50 58 V. Good (20%) 1 5 4 66 76 Good (25%) 2 6 5 82 95 Fair (30%) 2 8 7 99 116 Below Par (10%) 1 3 2 33 39

Group category Corporate Office Territorial Circles Non territorial circles SSA Total

25

Organisation redesign

Performance rating and distribution of employees across ratings feeds into incentive payout calculations

% employees falling under different ratings (bell curve distribution1 ) Rating Excellent Very Good Good Fair Below Par % employees 15% 20% 25% 30% 10%

PRP eligibility for different ratings Rating based on scorecard assessment Excellent Very Good Good Fair Below Par PRP eligibility 100% 75% 50% 25% 0% 4

Bell curve will be applied at the group level for Corporate Office, Territorial circles, Non-territorial circles, SSAs
1. DPE guidelines recommend following a "Bell curve approach" Source: Department of Public Enterprise (DPE) guidelines

26

Example - Representative numbers only

Organisation redesign

Individual payout to be based on a combination of factors

Includes company rating, individual performance rating, grade level and payout pool available

Current year PBT = 2000 cr., Previous year PBT = 1500 cr.
1 2
Base Salary (Rs.)

3
MoU rating

4
Performance rating1

5
Grade level

6
Prorating factor Payout (Rs.)

PRP calculations
PRP from current year profit

PRP split

60%

5L

Fair (40%)

Good (50%)

E-5 (50%)

0.90

27k

PRP from incremental profit

40%

5L

Fair (40%)

Good (50%)

E-5 (50%)

0.90

18k

Total

Based on DPE guidelines

45k

1. Individual performance rating to be initially based on Group Performance rating

27

FPMS

FIELD PERFORMANCE MANAGEMENT SYSTEM

28

Objectives for Field-level Performance Management System

KPI based mechanism for measuring & rewarding performance at the field level

5 critical job families to start with Consumer Mobility sales (retailer managers) Consumer Fixed Access sales (sales associate) CSC Exchanges (PSTN & Broadband) internal & external plant SSA level consumer mobility ops team
Additional job families will be added over time FPMS already launched

29

Combination of individual and group based approach

Job family / Group
1 Sales Consumer Mobility (Retailer Manager) Sales Consumer Fixed Access

Coverage at Group level / Individual level

Organization coverage

Performance to be recognized at individual level

Sales roles

Customer Service Centre

Customer centric role

Fixed Line & Broadband Exchange SSA Consumer Mobility Team

Performance to be recognized at Group level Operational roles

Key Performance Indicators have been defined for measuring performance of Job families / Groups
30

Group based Awards in FPMS

1. For exchanges and CSCs, topper group one each in each category of exchange and CSC would be awarded in all SSAs. (Swarna CSC and Swarna Exchange in each category) 2. For consumer mobility operations teams, top 3 groups would be awarded in every circle. 3. The scheme for exchanges and CSCs would be driven at the SSA level and for the consumer mobility operations teams at the Circle level. The final decision on awards at SSA level should be made by the SSA Head after taking into account the KPI scores of all Exchanges and CSCs in the SSA. 4. The final decision on awards at the Circle level should be made by the PGM/GM (Consumer Mobility) after taking into the account the KPI scores of all SSAlevel Consumer Mobility Operations teams in the Circle. 5. The PMS team at the corporate office would be responsible for the overall coordination

31

Proposed Awards for CSCs

Name of award Swarna CSC (One in each Category)

Level Within SSA

Type of Category

Frequency Quarterly

Award for Award for individuals group in group Certificat Certificate e of Merit, with Rolling Trophy

Basis for decision Highest score on KPIs for CSCs

Type-I,II,and III

32

Proposed Awards for Circle-level Consumer Mobility Operations teams

Name of award Swarna padak

Level Within Circle

Frequency Quarterly

Award for group Certificate of Merit ,with Rolling Trophy Certificate of Merit ,with Rolling Trophy Certificate of Merit ,with Rolling Trophy

Award for individuals in group Certificate

Basis for decision Highest score on KPIs for CM teams

Rajat padak

Within Circle

Quarterly

Certificate

2nd Highest score on KPIs for CM teams

Kansya padak

Within Circle

Quarterly

Certificate

3rd Highest score on KPIs for CM teams

33

Proposed Awards for Exchanges

Name of award

Level

Type of Category

Frequency

Award for group

Award for individuals in group

Basis for decision

Swarna Within exchange( SSA One in each Category

Quarterly
Cat-A,B,C,D

Certificate Certificate of Merit, with Rolling Trophy

Highest score on KPIs for exchanges

34

Customer Service Centres (CSCs)

Field Performance Management System (FPMS) scorecard

Customer Service Centres
Key Performance Indicators
SubWeighting Weighting factor factor

Targets and Scores

Targets achieved Marks achieved Weighted score

Key Performance Indicators (KPI)

Target

Performance
Fair Good

levels1
Excellent

Efficiency of bill collection 1. Number of bills collected per day / Number of cash counters in the CSC Sales leads generated per employee3 2. Number of sales leads generated / Number of employees in a CSC Waiting time of customers in the queue 3. Waiting time in queue during the pay by due dates (based on survey feed back) Efficiency of Survey 4. % of survey form collected to total number of bills collected. Customer feedback on qualitative aspects 30% 5. Average of rating given on a scale of 1 to 5 by customers. Customer survey to include factors including (but not limited to): i. Responsiveness of staff to customer requests change of address, change of plans, disconnection, etc. ii. Knowledge of the people in the CSC about products and plans iii. Availability of tariff plans and information brochures in the CSC iv. Availability of products in the CSC v. Behavior and attitude of the staff vi. Cleanliness of the centre Total

25% 302 15% 152 20%

xxx xxx xxx xxx xxx xxx

< 5 min.
10%

5% 5% 5% 5% 5% 5% 100%

1. Marks for Fair rating = 60, Good = 80, Excellent = 100. Marks achieved for rating below Fair = 0. Achievement between Fair and Good and between Good and Excellent would be linearly scaled 2. Representative numbers only targets to be fixed 3. For CSCs where lead generation is not feasible , 25% weightage will be divided as 10 %, 10 % and 5% amongst KPI 1,3 and 4 respectively. 35

Field Performance Management System (FPMS) scorecard

( Exchanges)
Key Performance Indicators (KPI)
Weighting factor

Target

Performance
Fair Good
xxx

levels1
Excellent xxx

Targets Marks Weighted score achieved achieved

Time to provision new service 1. % of new services (Land Line) provisioned within the norm (7 days for new LL) 5% 2. % of new services (LL, BB) provisioned within the norm (7 days for BB where 10% LL exists, 15 days for new LL + BB) Fault rate (%) 5% 3 Number of faults per 100 active connections (LL)(in %) 4 Number of faults per 100 active connections (BB)(in %) 10% Repeat fault rate (on same number) within 30 days 5. Number of faults on a number which has been repaired once (in the last 30 10% days) per 100 active connections- Land Line 6. Number of faults on a number which has been repaired once (in the last 30 10% days) per 100 active connections- Broad band Fault clearance turn-around time 10% 7. % of faults cleared within 24 hours(Land Line) 10% 8. % of faults cleared within 24 hours (Broad band) Time taken to service/execute requests 9. % requests for local shift of LL executed within 3 days 2% 10. % requests for local shift of BB executed within 3 days 3% 11. % requests for inter-exchange shift of LL executed within 5 days 2% 12. % requests for inter-exchange shift of BB executed within 5 days 3% 13 % requests for termination of connection executed within 7 days (LL) 2% 14. % requests for termination of connection executed within 7 days (BB) 3% Management of co-located BTSs 15. BTS availability (%) 10% 16. Number of faults/interruptions per BTS due to passive infrastructure failures in a 10% month (Average fault rate over a quarter/year will be taken) Total 100%

xxx

xxx

xxx

xxx

1. Marks for Fair rating = 60, Good = 80, Excellent = 100. Marks achieved for rating below Fair = 0. Achievement between Fair and Good and between Good and Excellent would be linearly scaled Note: The data for the above will be obtained from MIS reports generated in DotSoft, other softwares installed in SSAs;

36

SSA Consumer Mobility Operations Team

Field Performance Management System (FPMS) scorecard

SSA consumer mobility operations team
Key Performance Indicators
Weighting factor

Targets and Scores

Targets achieved Marks achieved Weighted score

Key Performance Indicators (KPI)

Target

Performance levels1
Fair Good xxx Excellent xxx

BTS availability 1. BTS availability (%) - for sites where responsibility is with SSA CM team 2. BTS availability (%) - for sites where responsibility is with respective CFA teams at exchanges Fault rate 3. Number of faults per BTS due to passive infrastructure failures in a month (Average fault rate over a quarter/year will be taken) for sites where responsibility is with SSA CM team Fault clearance turn-around time 4. % of faults cleared in 6 hours for sites where responsibility is with SSA CM team BTS upkeep 5. Subjective assessment given by GM CMTS (O & M) at circle based on (but not limited to): (1) Earthing at BTS site (2) Installation and upkeep of lightning arrestor (3) Proper functioning of aviation light (4) Proper working of "tower up" beep (5) RF cable safety (6) Cleanliness of site Total

35% 15%

xxx

xxx

xxx

xxx

30%

10%

10%

100%

1. Marks for Fair rating = 60, Good = 80, Excellent = 100. Marks achieved for rating below Fair = 0. Achievement between Fair and Good and between Good and Excellent would be linearly scaled Note: The data for the above will be obtained from MIS reports generated in DotSoft, other softwares installed in SSAs

37

Individual based incentives in FPMS-Illustrative Key Performance Indicators for sales roles in Consumer Fixed Access
1. Sales achieved for Landline

2. Sales achieved for Broadband

3. Number of connections recovered

4. Sales achieved for EVDO or 3G cards or FWTs

38

Illustrative Key Performance Indicators for sales roles in Consumer Mobility

1. Sum of SIMs sold by franchisee whose area is being surveyed by the Retailer Manager

2. Sum of recharge value sold by franchisee whose area is being surveyed by the Retailer Manager

3. Number of retailers visited by the retailer manager

39

Individual PMS (IPMS)

Being targeted for DGM level officers and above

Gradually, the system to be expanded to other levels

Requires complete IT support to handle PMS of this size

PMS module being planned in ERP system

Finally, an individuals performance to be combination of GPMS and IPMS

40

End of Presentation

41