ONGC employees lose out as bonus slashed
ONGC employees are upset and blaming the company’s increased fuel subsidy bill for eating into net profits and reducing bonuses.
In December ONGC complained to the oil ministry after its 33,000 employees lost nearly half their 2013 bonus despite record turnover of Rs82,552cr ($13.4bn) - up 8.4% over last year. Blame ONGC’s share of the fuel subsidy ‘burden’, where ONGC is forced to share the costs of government subsidies on diesel, LPG and kerosene, for knocking down net profit in 2012-13 to Rs20,926cr ($3.4bn) - 16.7% less than the previous year.
Under a new performance related pay scheme set up in 2011 any fall in profit means workers automatically lose 40% of their annual bonus. “This year each employee received an average Rs2 lakh ($3300) less than last year,” says an ONGC source.
“It was a big hit. We’ve met all our targets and feel we deserve our performance pay.
” To increase worker productivity annual bonuses were renamed PRP and linked to basic pay, individual performance and ONGC’s overall performance. ONGC’s share of the ‘subsidy burden’ rose sharply in 2012-13 to Rs49,421cr ($8bn) from Rs44,466cr ($7bn) in 2011-12.
“If it wasn’t for this ONGC would have reported a rise in net profit,” adds a source. In its letter to the ministry ONGC says subsidy payments should be taken out of the equation when deciding staff pay.
