Being among the biggest public sector companies is not the only common point between Oil and Natural Gas Corporation, Coal India and NTPC Ltd. Despite these companies doing well, full annual bonus to their employees has not accrued.
At ONGC, for instance, thanks to the subsidy burden borne by the company, the profit and bonus to its employees have been impacted. ONGC employees said this year their performance related pay is down around 40 per cent resulting in a reduction of anywhere between Rs 50,000 and Rs 1,50,000. Last year, ONGC had doled out 100 per cent bonus or performance related pay to its employees. "Though we have posted increase in our turnover and did well in meeting our production targets this year, our bonuses have seen a drastic reduction. While junior officers have taken a hit of Rs 50,000, senior officials have suffered up to Rs 1.5 lakh," said an engineer from ONGC.
In 2012-13, ONGC's profit after tax was down to Rs 20,925 crore from Rs 25,123 crore in 2011-12. The major cause for the decline in profit was attributed to the subsidy burden shared by ONGC and the increase in the cess paid on sale of crude oil from Rs 2,500 per tonne to Rs 4,500. In 2012-13 ONGC's shared the subsidy burden to the tune of Rs 49,421 crore up from 44,466 crore in 2011-12.Though ONGC did not reply to a detailed questionnaire sent last week, in a letter written last December to Subhash Khuntia, additional secretary and financial advisor, Ministry of Petroleum and Natural Gas, the Association of Scientific and Technical Offiers of ONGC requested the performance related pay (PRP) to ONGC employees be modified. "PRP is an important motivating factor and should not be influenced by factors which are beyond the control of the individual and organisation," Suresh Chandra, Vice President, ASTO wrote in the letter.
According to Amit Nandkeolyar, assistant professor, organizational behaviour, Indian School of Business, PSUs find the situation particularly difficult as they have too many stakeholders. "External environment is common to all companies. There is a challenge for any company to build an HR policy and ensure implementation when external forces are at play. The only way out is for the companies to be transparent and communicate with employees."
Employees at NTPC and Coal India are also disappointed. "We do not expect any bonus this year because of the regulatory order which is not very positive to the company," an NTPC official said.
The central power regulator, CERC, recently came up with its new tariff regulations which reduces the return on investments for NTPC significantly. NTPC claims the new regulations can result in losses of around Rs 7,000 crore. While NTPC is pleading its case against them, it is likely to be a long-drawn affair, and until then the company's profits and returns are likely to remain muted.
NTPC did not respond to e-mailed questionnaire sent last week. The company posted a 20.4 per cent growth in net profit for the third quarter, excluding one-offs on an adjusted basis, to Rs 2,861 crore. The total income for the quarter too went up by 18 per cent to Rs 19,554 crore.
For Coal India, on the other hand, net profit dropped 11 per cent in the last quarter, on the back of reduced margins. The net revenues of the country's largest coal producer also went down by around three per cent, as demand for coking coal used in steel plants as well as thermal coal used in power plans remained subdued. Coal India is one of the largest corporate employers in India with around 3,57,926 employees.