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Methodology for Functional competency Mapping

Process flow for Competency Mapping(CM)
Competency model are position models which are at the heart of every competency-based HR application. The bases of generating competency models are processes. Thus questions that needs to be raised:
  • What does the employee have to be able to do?
  • What does the employee have to know in order to do it.

Background information about the organization
  • Product and Services provided by the organization
  • Process Flow-chart( From Raw material to Finished Product)
  • Sister units and Sub-units(within the organization)
  • Hierarchy level followed

Decide on the Job Positions that need to be assessed
  • Finalization of Hierarchy Level to be covered
  • Grouping of certain Levels into one group

Career stages categorization
Level 3 – Senior
Manage Managers

Technical leader or guide to a group of professionals

Level 2 – Professional
Manage Others

Technical professional or guide to a group of entry level professionals

Level 1 – Entry Level Professional
 Manage Self

New Entrants/Entry Level professional

Description of career stages
Career Stage -- I: Manage Self
• Accountable for own actions.
• They are usually new to culture and work environment and learn from others.
• Responsible for their own work and limited actions.
• Activities like communicating, enabling, building relationships, etc comes into focus
Career Stage – II: Manage others
• First time manager and accountable for others actions.
• This stage requires a major transition – the responsibility is for getting work done through others, in addition, to own.
• New managers recognize this intellectually and reject it psychologically. Typically they overpower their direct reports with their expertise.
• Giving up tasks and responsibilities that earned them a manager’s title in the first place is tremendously difficult aspect of this stage.
• Managerial activities like planning, organizing, delegating, monitoring, communicating, enabling, building relationships, etc comes into focus.

Career Stage – III: Manage Managers
• Important middle-management position for managing and developing support managers.
• False assumption that there is very little difference between the previous stage and this one.
• This stage calls in for different skill sets which include selecting and training first line managers, holding them accountable for managerial work, deploying/redeploying resources, etc.
• Managers, who fail to become proficient at this stage display poor performance management, fail to build a strong team, have difficulty in delegating, etc.
• This person is the ‘management’ for the greatest number of people in the company who do ‘hands on’ work.

Presentation for Head of Departments(HOD's)
  • To discuss the purpose and applications of the exercise
  • To validate the categorization of various hierarchical levels
  • Suggestions for improvements(if any)
  • Assigning of coordinators from different units and different section.

Presentation for coordinators:
  • Complete competency exercise discussed
  • Discussion about competency dictionary, Road map and forms to be used
  • Discussed plans for data collection to frame competency dictionary

  • To be filled by individuals
  • Carries information about past work experience
  • Key trainings attended
  • Key Responsibility Areas in previous organization
  • Special Assignment handled

Data Collection:

1. Source of Primary Data
Brain storming session with the coordinator of particular section in a particular unit

2. Source of Secondary Data
    a) Job Descriptions
    b) Resumes/ Bio-data/ CV
    c) Dictionaries used by other organizations of relevant Industry downloaded from internet.

Organize Data:
  • Organize collected data to give final shape
  • List top 8 to 12 broad competencies
  • Splitting Broad competencies into small branches to get insight of the competency
  • Validation of competency dictionary by HOD (Both by HR and Sub-unit).

Assessment centre
The assessment team which consists of subject matter expert from similar industry, the HOD and the supervisor, will assess the individuals by means of an interview to check the knowledge domain.

For skills, field test is considered as appropriate. This would give the assessor a fair idea of the practical aspect of his/her job. His/her on the job skills would be assessed. This is the main aim of the assignment that the present skill can be determined in the most effective manner for easy conduct of gap analysis

Assessment form(to be uploaded shortly)
The form used by assessors to assess the individuals is posted herein. All the assessors individually assess them and at the end of interview they standardize the grades awarded into one final form.

Process Flow for Identification of Talent Pool

Potential assessment:
After identification of employee career stage i.e. managing self, managing others, managing managers etc, competencies of each employee would be assessed by a panel consisting of his/her respective plant /functional head, HR head and professional from similar industry.

Following 5 Point scale would be used to assess potential of individuals at each level of the Career stage:

Potential assessment rating scale
Exercises outstanding performance on this competency far exceeds acceptable standards
Exercises very good performances on this competency better than acceptable standards
Exercises quite acceptable performance on this competency and meets requirements
Performance on this competency is not quite up to acceptable standards.
Performance on this competency fails to meet acceptable standards.

Note: If any individual is ‘inadequately equipped’ i.e. he/she shows some gap between his current competency level and required competency level, for his current / next 1-2 level of career stage his assessment stops at that particular level and he would be considered only for the immediate below level career stage where he has ‘exceeded / adequately equipped’ for all the competencies mentioned for that career stage.
However, If any individual is ‘inadequately equipped’ for his current level career stage he/she will not be considered for further potential assessment and talent pool segmentation and training will we arranged for such individuals.

Potential slotting
Based on the above potential assessment for current and next level of career stage, potential slotting will be done. For potential slotting competency lead is calculated i.e. first the maximum lead that an individual can take is calculated, then the present lead is calculated i.e. Present level – Required level. Now Present lead is divided by maximum lead and percentage is calculated. For slotting, Please use following table and assign A / B / C rating as per the below mentioned criteria and explanation in talent assessment and Segmentation form:

Potential rating criteria
If individual’s competency lead lies between 0-40 %, it means the individual is equipped for the present level only.
If individual’s competency lead lies between 40-80 %, it means the individual has potential to compete for the next level.
If individual’s competency lead lies between 80-100 %, it means the individual has high potential to compete for next two levels.

Note: Please do not assess potential of an individual below his current level of career stage for e.g. If any individuals current career stage is “Managing Others” then he / she should not be assessed for career stage below “Managing others” i.e. “Managing Self”.

Performance assessment:
To assess performance of managerial employees, last 3 performance ratings would be considered. 3 point scale (3, 2, 1) would be used to assess performance. Based on following combinations of last 3 performance ratings (01-02, 02-03, 03-04), performance of an individual would be assessed using 3 point scale.
Performance rating criteria
Rating Criteria
Performance assessed as per the scale
3 A / 2 A and 1 B
3 B / 1 A and 2 B
Any other combination of Performance rating with “C” but not with ‘D’ and ‘E”
For e.g. If any managerial employee having 3 outstanding / exceptional achiever or 2 outstanding/ exceptional achiever and 1 Very Good / High Achiever rating in last 3 years would get 3 on the performance scale. Like wise, if an individual is having combination of 1 Outstanding and 2 Very Good or 3 Very Good continuously in last 3 years, he would be assigned 2 on the performance scale. Similarly, if a performance rating of any individual in last 3 years is in the combination of 2 Very Good and 1 Good or 1 Very Good and 2 Good or 3 Good or 1 Outstanding and 2 Good or 1 Outstanding and 1 Very Good and 1 Good, he would be assigned 1 on the performance scale.
Individuals having performance ratings below ‘Good’ in any of the last 3 years would not be considered for Talent Management.

The next important step is ‘Talent Segmentation’ where each manager would be placed in one of the boxes of performance – potential matrix. Performance and Potential are the two most important element of talent segmentation. Correct assessment of performance and potential provides the building block to talent management process. Performance and potential can be best understood as per following:
Potential and performance parameters
Linked to Present Job
Is capable of coming into being in future.
Is measurable
Potential rated low is not a write off case.
Consistent good / high performance is a pre-requisite to advancement.
High potential may represent the
organizations inventory of future leaders
High performance is not a sure indicator of ability to move to next 1-2 career stages.
Judgment of senior management in assessing potential is the most critical tool for potential identification.
Age, career stage, compensation, upbringing, motivation, style of boss, culture at workplace etc impact performance.
Potential assessment examines if an
individual has “what it takes” to advance to position of greater management
/leadership/ technical skills.
Is relative to others
Comes from within
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सरकारी नौकरी - Government Jobs India - Sarkari Naukri: Trainee jobs in Numaligarh Refinery Nov-2010

सरकारी नौकरी - Government Jobs India - Sarkari Naukri: Trainee jobs in Numaligarh Refinery Nov-2010
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Performance and potential matrix

There are several ways to review talent in the organization. Performance and Potential matrix is the most frequently used tool. It is simple to understand and apply. It helps in making a talent inventory for the organization. It is 3*3 matrices where each box has its own definition and developmental challenges. It is 9-box matrix. Each managerial employee would be reviewed on performance and potential and assigned to one of the nine boxes. On the ‘X’ axis performance would be plotted using 3 point scale, 3 being high performance, 2 medium performances and 1 low performance. On the ‘Y’ axis potential in the form of competency framework would be plotted using scale of C, B and A. ‘C’ being competencies demonstrated in the current career stage and ‘A and B’ would be the competencies demonstrated for the next 1-2 career stage.

Talent pool:

Based on the performance – potential matrix, talent pool would be created at the organizational level. Talent pool would be divided into 3 categories:
Leadership Talent: Individuals identified / assessed as 3A in performance–potential matrix.
Management Talent: Individuals identified / assessed as 2A, 2B, 3B in performance– potential matrix.
Support Talent: Individuals identified / assessed as 1A, 1B, 1C, 2C, 3C in performance – potential matrix.

Talent pool description
Leadership Talent
• Consistent exceptional performer in the current role / career stage and demonstrated potential to grown in to Leadership role.
Key characteristic are:
• Person is committed to make quantum leaps.
• Questions status quo – situations, assumptions, the way things are done & leverages the situation through innovative ideas and solutions.
• Redefines the role today and tomorrow regardless of circumstances; goes beyond expectations.
• Builds enduring greatness through a paradoxical combination of personal humility and professional will.

Management Talent
• Consistent high performer in the current role / career stage with adequate / reasonable demonstrated potential to grow to next career stage.
Key characteristic are:
• Consistently delivers high performance by optimal usage of all resources, to deliver required output.
• Organizes people and resources towards effective and efficient pursuit of pre- determined objectives.
• Very dependable.
• Leverages strengths of self and of others, in a judicious manner.
• May not be able to cope with complex/stretch assignments.

Support Talent
• Good / acceptable performance in the current role / career stage but with limited potential to move to next career stage.
Key characteristic are:
• Delivers output as directed through standardized methods & systems.
• Is motivated to perform well on the current job.
• Contributes to achievements of group objectives by working effectively with others.
• Keep current skills sharp.
• Demonstrates little efforts to build skills for next career stage.
• May confine themselves to requirements and hence, occasionally assigned stretched targets.

This article is a part of Competency Mapping.
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Human Resource Info4all: Purpose and benefits of Functional Competency Mapp...

Human Resource Info4all: Purpose and benefits of Functional Competency Mapp...: "In the modern competitive world, business managers require to improve the efficiency and effectiveness of operations. Manpower is the most i..."
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Purpose and benefits of Functional Competency Mapping

In the modern competitive world, business managers require to improve the efficiency and effectiveness of operations. Manpower is the most important resource for any organization and also most difficult to manage as the level of competence in all employees vary according to the background, experience and intellect of the person. Every person has different qualities, attitudes, motives, personality traits, skill, knowledge etc. which affects their performance at work. Organizations, in order to facilitate excellence in the performance of the people are required to identify the right person for every job and improve the performance of their people. It needs a clear and cohesive performance management framework that is understood by all across the organization. For effective implementation of strategy, competencies constitute a crucial link as they bind business objectives with that of the people capabilities.

The processes in manufacturing industries involve a lot of technicalities and a majority of its workforce is engaged in technical jobs. The companies have been taking up lots of new projects to increase their productivity and improve their position in the competitive market and achieve their objective of growth and globalization.

To fulfill the vision and achieve the goals, there is a need to have an efficient workforce. While it is important to evaluate the results attained by an employee, it is also essential for the organization to emphasize on the means adopted to achieve those results. When we are able to assess and help develop the competencies of employees, the capability of the entire organization gets enhanced and this is how the losses are minimized and the entire process of production becomes cost effective.

The initiative of technical Competency Mapping of the employees encompasses a large number of employees for assessment and improvement. Organizations believe in development of their employees in the best way possible so that a competitive edge can be achieved over other organizations.

This exercise can be taken up in consonance with the above mentioned challenges and the objectives of organization. 
The main aims of Competency Mapping are as follows:
  •  To build a uniform system for measuring technical competencies of the employees and not separate systems at different locations which may have been adopted at different points of time in different departments so far.
  •  The linkage of training with organizational goals has to be clearly identified i.e., understanding whether the training need is adequately addressed to fulfill the organizational goals or not.
  •  Competency based compensation system.
  •  Recruitment and selection on the basis of competencies identified for different positions and to select best suited person.
  •  Talent management on basis of Competency Mapping

Many organizations have taken up the project of Technical Competency Mapping for its employees mainly to assess the knowledge and skills present in the employees and their required level. The exercise would enable cost reduction for the companies. The motive is to understand the gap that exists between the required and the present level and then train the employees to bring them to a desired level of proficiency required for their job. Also the exercise would help the company identify the number of employees who might be over skilled for a particular position and hence promoting them to a higher level and not training them unnecessarily.

The entire exercise of technical Competency Mapping of the employees would require in-depth generic knowledge about the work such as:
a) Operational knowledge: know each and every detail of production process
b) Knowledge on production concepts, standards and specifications
c) Job related skills and competencies
d) Technical expertise: technology used
e) Detailed knowledge of tools and equipments used
f) Awareness about effort requirement
g) Awareness of the process
h) Awareness of manpower requirement of the processes
i) Awareness of safety measures
j) Awareness of factors affecting quality and productivity
These are the kind of knowledge and skills that the employees would be tested and trained for. More or less, these are the parameters on which each employee will be checked unless his/her work purview does not include any of the factors. So, the task is to bring the employee to the level from where he would have his fundamental concepts clear and would know its applicability in the right manner in different work situations. He would know why a particular job is being done. Basically he/she would be aware of the how’s and why’s of his/her work. He would be trained in a manner that he would be competent enough to perform well and the entire workforce of the organization would be technically sound to make the company achieve its objectives effectively.

A system for technical assessment of employees has to be developed which can be uniformly followed throughout the organization. The procedures and steps have to be made in establishment of such a system. It would include all the steps that would be followed for assessment of positions and assessment of individuals in order to determine the talent pool to which the employees belong. Broadly the objectives can be stated as follows:
a) To maintain database of skill inventories so as to best utilize the skills and knowledge of employees when and where needed.
b) Develop a method where the management can differentiate between superior and average employees.
c) Talent segmentation through talent matrix in order to best use their talent in future to fulfill the organizations needs and promote the deserving employee to fill the vacant positions within the organization.

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Steps involved in Competency Mapping

These following steps are involved in Competency Mapping:
(a) Technical and functional competencies required for different functional positions
(b) technical and functional competencies possesses by employees manning those positions and 
(c) gap analysis.

Competency Mapping is a process which has not been widely used in organizations in India yet, and those who have done it have done it for behavioral Competency Mapping of employees. The company, however has realized that technical Competency Mapping of employees is very essential and that too for the workforce here which is expected to be more technically sound.
The methodology used for this exercise is as follows:
a)Contacting various companies who have adopted this system to understand how they have mapped their employees’ competencies through phone and email.
 b)Studying the Competency Mapping done at various levels in industries.
c)Compilation of the methods adopted by them and adding our own methodologies to cover up the flaws that we found in system.
The system of technical competency of employees of the company comprises of two parts:
(a) Assessment of positions and (b) Assessment of individuals
For assessment of individuals, a profile of employees has to be prepared department wise. The panel has to be formed for assessment purpose which would conduct interview and field test. Administration would be done for the same. What follows is the skill gap analysis. The project is concluded by covering the advantages of this newly developed system like its universality which was absent in the earlier systems studied. The data that would be gathered by this exercise could be used for other purposes apart from training and development. These could be recruitment, selection, career planning and succession. It could be used as a part of performance management system.
Talent assessment and talent segmentation:
(a) Collect data on grades awarded to employees during last three performance appraisals of one and a half years which show performance parameter of talent matrix, (b) quantify potential from skill gap analysis done in functional Competency Mapping which shows potential parameter of talent matrix, (c) prepare talent matrix of performance vs. potential matrix, and (d) talent segmentation on basis of region marked on the talent matrix.

The talent management process provides a holistic and systematic approach to acquire, develop and embed the competencies that are required to survive and achieve our aspirations. Framework is built on the work done so far on the people processes and is applicable to all managerial employees at senior, middle and junior levels.

We have used various terminologies to describe talent management process, universal understanding of these terminologies would be very handy in understanding and implementing this framework.

a) Talent: Talent has both aptitude and skill and is very critical to business success.
b) Potential: Potential is not merely a demonstration of the acquired intellectual and emotional assets but, also a demonstration of ability to acquire the assets needed for future situations. Not necessarily, every talent represents a potential. A high talent does not necessarily imply high potential.
c) Leadership: Talent when coupled with potential occupies certain positions that set the direction and drive the organization and teams towards an aspirational goal. High performance and high leadership potential is critical to the success of the business. All employees have talent and potential that is important for the organization, however, some talent are crucial than others and organization would make differential investment in different talents.

There are recommendations given in the end in order to increase the usability of the results of the exercise; employees have to be motivated to take up the exercise and participate willingly without force. They have lots of apprehensions which have to be removed. Reward based performance should be there. Promotional avenues could be increased so that they feel that the training has been useful to them. There has to be co-operation from the management and ultimate purpose of development has to be fulfilled to prove the worth of the investment that would be done to conduct this exercise. Also attitude of the people has to be changed and could be another exercise in itself. Also an IT based system should be developed to reduce errors.
The exercise could be a bigger success only if the planning done is religiously followed and development of the employees is taken-up seriously. This would be beneficial both to the employees and the company. It would help the company in a big way to increase its productivity and meet the targets it has set for the years to come.
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INFO4ALL: Retaining Talent

INFO4ALL: Retaining Talent: "Support and engagement is the key to retention Retention of top talent is an important concern in both good times and bad. While a soft ..."
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Retaining Talent

Support and engagement is the key to retention 
Retention of top talent is an important concern in both good times and bad. While a soft labor market may have depressed turnover rates in many organizations, retention issues can be expected to surface once labor markets strengthen. Even in the present environment, options are still available to top performers.

Savvy organizational leaders recognize that their best people work for their organizations because they want to, not because they have to, and treat them like 'volunteers' regardless of market conditions.

"Dissatisfaction with pay is not what leads employees to begin exploring alternatives."

While compensation is often a factor for employees when they consider new employment, it is seldom the precipitating factor. Nonetheless, retention strategies commonly focus on compensation, for example, retention bonuses, stock options.

The downturn has made it more difficult to rely on pay to keep key people committed, so how should companies react?

Organizations must focus on two key concerns to retain and motivate their talent: increasing employee engagement and developing systems that provide better support for the success of their employees.

To foster high levels of engagement, companies must make greater use of non-monetary rewards such as career growth opportunities, meaningful job designs, training, and recognition programs. For these measures to be effective, there must be a clear link between performance and rewards in the minds of employees. The best way to do this is to make sure there is clear differentiation in performance ratings between employees. Those differences in performance should be reflected in meaningful differences in pay and advancement prospects.

Hay Group Insight's research shows that high employee engagement alone does not guarantee an organization's effectiveness.

"A good many companies enjoy high levels of engagement, yet still struggle in terms of performance."


What's missing is real employee enablement to position motivated employees to succeed. In fact, our findings suggest that while organizations in the top quartile on engagement demonstrate revenue growth 2.5 times that of organizations in the bottom quartile, companies in the top quartile on both engagement and enablement achieve revenue growth 4.5 times greater. But how do you ensure that you're doing the best possible job of enabling your employees?


"High employee engagement alone does not guarantee an organization's effectiveness, you also need real employee enablement."

The first step is to make sure you're putting the right people in the right jobs, as employees in the wrong role can quickly become disillusioned and unproductive.

In deploying talent, leaders must consider both the requirements of the job and the employee's ability to meet them. They also have to think about the extent to which the job will draw upon the employee's distinctive competencies and make the most of them. It's also crucial to root out bad business practices, such as unnecessary or duplicated work, to ensure that work environments are supportive of high levels of productivity.

Create the right climate

Finally, organizations have to understand and manage the work climate. The benefit of a positive work climate is often underestimated, but our research shows that business results can vary by as much as 30 per cent purely due to differences in the work climate created by a manager. To create a positive work climate, leaders must have the right competencies to engage and enable employees. They have to understand how to give employees the authority to get on with their jobs so they feel empowered to act where decisions are best made at a local level. If organizations succeed in putting these measures in place they will reap the rewards of highly engaged employees willing to go the extra mile to make the organization a success. And harnessing this 'discretionary' effort through enabling work environments will provide companies with a competitive edge that will prove invaluable in helping them to ride out the stormy economic conditions created by the global downturn. It will also ensure that they are well positioned when the upturn eventually arrives.

Six steps to better engagement and motivation

In order to succeed in engaging and motivating employees organizations should:

ensure that there is a clearly communicated link between performance and rewards within the organization
ensure that there is proper differentiation in performance ratings between employees
root out bad business practices, such as unnecessary work and duplication, that can adversely affect employee enablement
put the right people in the right jobs by focusing on job sizing and the kind of person that best fits the role
monitor and improve the work climate within the organization by ensuring that leaders have the right competencies and management styles to motivate employees
focus on non-monetary rewards such as career growth opportunities, development, and recognition programs

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INFO4ALL: Corporate Social Responsibility Guidelines for PSU...

INFO4ALL: Corporate Social Responsibility Guidelines for PSU...: "1. CONCEPT1.1. Public Corporations have legal responsibilities to maximize shareholder profits; but a shift in corporate mindset led by soci..."
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Corporate Social Responsibility Guidelines for PSU-Identification, Implementation and Evaluation

1.1. Public Corporations have legal responsibilities to maximize shareholder profits; but a shift in corporate mindset led by social expectations and pressure is causing business leaders to rethink their responsibilities with respect to corporate performance measured in terms of economic impact, social impact and environmental impact - commonly called the Triple Bottom Line.

1.2. Economic growth is possible only through consumption of inputs available in the environment and society. The harnessing of natural resources has a direct impact on the economy, the environment and society at large. Corporate Social Responsibility (CSR) is a concept whereby organizations serve the interests of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations.

1.3. Corporate Social Responsibility is a Company's commitment to operate in an economically, socially and environmentally sustainable manner, while recognizing the interests of its stakeholders. This commitment is beyond statutory requirements. Corporate Social Responsibility is, therefore, closely linked with the practice of Sustainable Development. Corporate Social Responsibility extends beyond philanthropic activities and reaches out to the integration of social and business goals. These activities need to be seen as those which would, in the long term, help secure a sustainable competitive advantage.
2.1. The planning for Corporate Social Responsibility should start with the identification of the activities/projects to be undertaken. CSR projects/activities may be undertaken in the periphery where a company carries out its commercial activities as far as possible. Where this is not possible or applicable, a Company may choose to locate CSR projects anywhere in the country. Company specific Corporate Social
Responsibility strategies should be developed that mandate the design of Corporate Social Responsibility Action Plan (Long-term, medium-term and short-term), with a shift from the casual approach to the project
based accountability approach. The business plan under CSR should be integrated with the social and environment concerns related to the business of the company.

2.2. Selection of activities under CSR may be made to ensure that the benefits reach the smallest unit i.e. village, panchayat, block or district depending upon the operations and resource capability of the company.
The approach to CSR planning needs to be shifted from an ad-hoc charity to a long-term sustainable approach. The Project. Management and Monitoring skills available with the companies could be shared as far as possible, with the local administration by training and setting up required structures and systems.
2.3. The long-term Corporate Social Responsibility Plan should match with the long term Business Plan. This should be broken down intomedium term and short term plans. Each of these plans should clearly specify:
i) Requirements relating to baseline survey;
ii) Activities to be undertaken;
iii) Budgets allocated;
iv) Time-lines prescribed;
v) Responsibilities and authorities defined;
vi) Major results expected.

2.4 Such plans should also clearly specify the implementation guidelines and the involvement of the implementing agency. The procedures and methodologies prescribed for monitoring should be highlighted as well as the modalities of the concurrent and final evaluation. Finally, there should be a clear specification regarding mandatory documentation of the experience.
a. CSR initiatives of Central Public Sector Enterprises (CPSEs) should consider the following parameters for
identification/selection of schemes/projects:
(i) Thrust should be given wherever possible to areas related to the business of the CPSEs as a natural corollary to the business.
(ii) Investment in CSR should be project-based. Mere donations to philanthropic/ charity or other organizations would not come under the category of CSR.
(iii) CSR activities should generate community goodwill, create social impact and visibility.
(iv) For every project, the time-frame and periodic milestones should be finalized at the outset.
(v) CSR activities should also involve the suppliers in order to ensure that the supply-chain also follows the CSR principles.
(vi) CSR activities should help in building a positive image of the company in the public perception.
(vii) CSR activities may be related to United. Nations Global Compact Programme on Environment.
(viii) CSR projects may be closely linked with the principles of Sustainable Development, based on the immediate and longterm social and environmental consequences of their activities.
(ix) Every CPSE should shoulder responsibility for restoring /compensating for any ecological damage that is taking place  as a result of its operations.
(x) Care may be taken to ensure that CPSEs work towards fulfillment of the National Plan goals and objectives, as well as the Millennium Development Goals adopted by our country, ensure gender sensitivity, skill enhancement, entrepreneurship development and employment generation by co-creating value with local institutions/people.
(xi) Central Public Sector Enterprises should redefine their business continuity plan to factor in hazards, risks and vulnerabilities. They should also create value in innovative social investments in the community and may focus on the areas of "Preparedness and Capacity Building" in Disaster Management (OM).
(xii) Public-Private Partnership between the Government and the Central Public Sector could also be encouraged to leverage the strengths of the latter in Disaster Management. CPSEs need to network with the Ministries in Government of India / NOMA at the National level and State Governments / SOMAs at the State level to strengthen and formalize their role in the OM process for ensuring preparedness of the communities towards disaster resilience.

3.2 Project activities identified under CSR are to be implemented by Specialized Agencies and generally NOT by staff of the CPSE concerned. Specialized Agencies could be made to work singly or in tandem with other agencies.

3.3 Such specialized agencies would include:-
i) Community based organizations whether formal or informal;
ii) Elected local bodies such as Panchayats;
iii) Voluntary Agencies (NGOs);
iv) Institutes! Academic Organizations;
v) Trusts, Missions, etc.;
vi) Self-help Groups;
vii) Government, Semi-Government and autonomous Organizations;
viii) Standing Conference of Public Enterprises (SCOPE);
ix) Mahila Mandals! Samitis and the like;
x) Contracted agencies for civil works;
xi) Professional Consultancy Organizations, etc.
3.4 CPSEs should generate awareness among all levels of their staff about CSR activities and the integration of social processes with business processes. Those involved with the undertaking of CSR activities should be provided with adequate training and re-orientation.

3.5 Initiatives of State Governments, District Administration, Local Administration as well as Central Government Departments! Agencies, Self-Help Groups, etc., would be dovetailed! synergized with the initiatives taken by the CPSEs.

3.6 Every care should be taken to ensure that there is no duplication of CSR activities undertaken by the CPSEs with that of programmes run by Central, State and Local Governments.

3.7 While assigning CSR projects to specialized agencies, every possible effort must be made to verify the reliability and clean track record of such agencies. CPSEs may make efforts to prepare suitable panels of such agencies or they may select from panels maintained by Government, Semi-Government, Autonomous Organization or the National CSR Hub, etc.

3.8. Activities related to Sustainable Development will form a significant element of the total initiatives of CSR.

3.9. Such activities should come under the 3 UN Global Compact Principles pertaining to the Environment. Businesses are asked to:
i) Support a precautionary approach to environmental challenges;
ii) Undertake initiatives to promote greater environmental responsibility;
iii) Encourage the development and diffusion of environmentally friendly technologies.
3.10. Companies may also keep in mind the Environmental Management System as per ISO 14001.


4.1. The Department Of Public Enterprises, in conjunction with SCOPE and the CPSEs will create a National CSR Hub which will undertake/facilitate the following activities:
i) Nation-wide compilation, documentation, and creation of database;
ii) Advocacy;
iii) Research;
iv) Preparation of Panels of Implementing organisations/ monitoring and valuation Agencies;
v) Promotional activities, including production of short films, printing of brochures, pamphlets etc.;
vi) Conferences, Seminars, Workshops - both national and international;
vii) Act as a Think Tank;
viii) Any other matter as entrusted to it from time to time by the Department of Public Enterprises (OPE)

4.2 The National CSR Hub will begin operations with funding provided by Department of Public Enterprises. It will, however, be free to receive funds from:
i) SCOPE and both Central as well as State PSEs;
ii) UN Agencies, reputed international agencies such as World Bank, EU and other multilateral bodies and organisations;
iii) Reputed National and State Bodies;
iv) Government Departments, Autonomous Organisations, Planning Commission, Attached and Subordinate Offices, Corporations etc.
v) Philanthropic Missions, Trusts, etc. of national and international repute.

4.3. Decisions relating to the location and functioning of the HUB will be taken by DPE. SCOPE will be kept informed of such decisions and will be free to offer suggestions, inputs etc.

5.1 The CSR budget. will be mandatorily created through a Board Resolution as a percentage of net profit in the following manner:-
Type of CPSEs Expenditure range for CSR
in a Financial Year Net Profit (Previous Year) (% of profit)
                           (i) Less than Rs. 100 crore 3%-5%
                           (ii) 100 crore to Rs. 500 crore 2%-3%(Subject to a Minimum of 3 crores)
                           (iii) 500 crore and above 0.5%-2%

5.2 Loss-making companies are not mandated to earmark specific funding for CSR activities.

5.3. They should achieve CSR objectives by integrating business processes with social processes wherever possible and taking up such initiatives which do not involve cash outgo, e.g., by synergising their CSR activities with those of other profit-making coso
5.4. The CSR Budget should be fixed for each financial year. This funding will not lapse. It will be transferred to a CSR Fund, which will accumulate - as in the case of non-Iapsable pool- for the North East.
5.5. In case CPSEs have different Profit Centers like Factories I Plant locations, they may be allocated separate CSR budgets to be spent by them under the Annual CSR Budget allocations.

6.1. These Guidelines will supersede/override any other Guidelines/Circulars/lnstructions etc. that may have been issued by any Ministry/ Department on any prior date. Guidelines on CSR for CPSEs will henceforth issue only from the Department of Public Enterprises.

6.2. These Guidelines are fully in consonance with the draft Guidelines for Corporates issued by the Ministry of Corporate Affairs as per their website.

6.3. Such companies who are operating in sectors such as financial services, and have no specific geographical area or limited area, would adopt and define the areas of their choice for undertaking CSR activities.

6.4. Activities and expenditure related to staff benefits will not count as CSR.

6.5. Also grants to organizations/ institutions that are not specifically implementing CSR projects specified by the CPSE would not count as CSR.

6.6. These Guidelines may be amended by the Department of Public Enterprises from time to time with the approval of the competent authority.
7.1. The impact made by CSR activities should be quantified to the best possible extent with reference to base line data, which need to be created by the CPSEs before the start of any project. Hence Base-line Surveys are mandatory.

7.2. Meticulous documentation relating to CSR approaches, policies, programmes, expenditures, procurement, etc., should be prepared and put in the public domain, (particularly through the internet) and made available to the National CSR Hub.

8.1. Monitoring of the CSR projects is very crucial and needs to be a periodic activity of the Enterprise.

8.2. The Boards of CPSEs should discuss the implementation of CSR activities in their Board meetings.

8.3. Each CPSE should include a separate paragraph/chapter in the Annual Report on the implementation of CSR activities/projects including the facts relating to physical and financial progress.

8.4. The implementation of CSR guidelines will form a part of the Memorandum of Understanding that is signed each year between CPSEs and Government.

8.5. The performance of each CPSE with reference to its CSR activities should be monitored by the Ministry/Department concerned on a regular basis.

8.6. In MoU Guidelines from 2010-11 onwards, 5 marks have been earmarked out of the non-financial parameters for CSR activities and 5 marks for Sustainable Development initiatives.

8.7. For proper and periodic monitoring of CSR activities, companies may appoint a CSR committee or a Social Audit Committee or a suitable, credible external agency.

8.8 CSR projects should also be evaluated by an independent external agency. This evaluation should be both concurrent and final.
i) Drinking Water Facility
ii) Education
iii) Electricity Facility
iv) Solar Lighting System
v) Health and Family Welfare
vi) Irrigation Facilities
vii) Sanitation and Public Health
viii) Pollution Control
ix) Animal Care
x) Promotion of Sports and Games
xi) Promotion of Art and Culture
xii) Environment friendly technologies
xiii) Promotion of livelihood for economically weaker sections through forward and backward linkages
xiv) Relief to victims of Natural Calamities like eartl}-quake,. cyclone, drought & flood situation in any part of the country
xv) Supplementing Development Programmes of the Government.
xvi) Non-conventional Energy Sources
xvii) Construction of Community Centres/Night Shelters/Old Age Homes
xviii) Imparting Vocational Training
xviii) Setting up of skill development centres.
xix) Adoption of vi"ages
xx) Taking action on points suggested by Ministry of Forest and Environment pertaining to Charter on Corporate Responsibility for Environment Protection for 17 categories of Industries.
xxi) Scholarships to meritorious students belonging to SC, ST, OBC and disabled categories.
xxii) Adoption/Construction of Hostels (especially those for SC/ST and girls),
xxiii) Skill training, entrepreneurship development and placement assistance programmes for youth.
xxiv) Building of Roads, Pathways and Bridges.
xxv) Entrepreneurship Development Programme (EDP)
xxvi) Disaster Management Activities including those related to amelioration/ mitigation.
xxvii) Activities related to the preservation of the Environment/Ecology and to Sustainable Development

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