Performance-related incentives for Central Ministries and Departments may be this year.

Cabinet Secretariate works on performance-related incentives, on monitoring, evaluating targets for all personnel.

In a major administrative reform exercise, the Cabinet Secretariat is working on implementation of a performance-linked incentive scheme for officials. With this, it is also in the process of reforming the performance appraisal report (PAR) system.

Performance Monitoring and Evaluation System (PMES) for ministries and departments.

A senior government official told Business Standard the proposed performance-linked incentive scheme was intended to be budget-neutral. He moted the recommendations of the 6th Pay Commission on levels and structures of benefits had been implemented but the linked ones to introduce performance-related incentives weren’t. The Cabinet Secretariat was working towards this goal.

An outline of the new PMES was approved by the Prime Minister on September 11, 2009. Since then, work had been on at various levels, resulting in implementation in two phases to 62 departments and ministries out of a total of 84. The whole process is expected to be implemented in full swing from this year.

Under the new PMES, at the beginning of each financial year, with the approval of the minister concerned, each department has to prepare a result-framework document (RFD). This is to consist of the priorities set out by the ministries concerned and agenda as spelt out, if any, as in the President’s Address and announcements by the government from time to time.

After six months, the achievement of each ministry/department will be reviewed by a committee on performance and the goals reset, taking account of priorities at that point. At the end of a year, all ministries and departments are to review and prepare a report listing their achievements against the agreed results in the prescribed format. This report will be expected to be finalised by May 1 each year.

How will the PMES work?
The result-framework document (RFD) of a ministry/department (see chart) would list key objectives (most important and relevant ones) for the year in the first column. Objectives in the RFD would be ranked in descending order of priority according to the degree of significance. Specific weights would be attached to these objectives in the second column, decided by the minister in-charge. In column three of the RFD, the department would specify the required policies, programmes, schemes and projects for each objective. Further, column four would specify one or more ‘success indicators’ (key performance indicators) for each action mentioned in column three. Column five is meant for providing relative weights to the success indicators. Finally, column six in the RFD allows the department to choose a target for each success indicator.

With this, the RFD would also provide actual values for the past two years and also projected values for two years in the future. At the end of the year, the government will look at the achievements of each department, compare these with the targets, and determine the composite score.

The RFD for 2010-2011 have been finalised by the departments and been approved by the High Powered Committee on Government Performance. The whole exercise is going to make the functioning of the government completely transparent, with accountabilities fixed at every level, said the official.

Source : Business Standard.