0601 Generation Incentive

7/21/2019 0601 Generation Incentive

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NTPC Limited

Corporate Human Resources Division

HR Policy Manual

Generation Incentive Scheme

Section:0601

Issue No: II Rev.No.:0

Issue Date: 26.09.2011

Updated as on: 31.01.2012

Page: 1 of 20

GENERATIONINCENTIVESCHEME

Preamble:

Thefollowingsaretheessential featuresofthemodifiedPower GenerationIncentive Scheme which is enclosed as Annexure:-

1. Theprovisionsoftheschemeareapplicablew.e.f.1.4.2005.

2. BasicpayforthepurposeofpaymentofIncentivewillbeactualbasic

pay(w.r.t.1997paystructure)andspecialpay,ifany.However,basic

pay will not include any Dearness pay, DA,PersonalPay,Personal

Adjustment.

3. The Incentive payment will continue to be linked with the

performanceparameter,theEquivalentAvailabilityFactor%.

4. Theincentive willbe paidin two components i.e. monthly and

quarterly.

5. The employees, for the purpose of Incentive payment, will be

categorized into Direct(Group-A)and Indirect (Group-B/C)and the

maximum quantum of Generation Incentive payable to each

category/groupindifferentstagesofprojectwillbeasunder:-

DuringO&Mphase During Expansion/

Concurrentphase

Group-A

(O&Memployees)

Amount as

per

performance-

payment matrix as

Amount as per

performance-payment

matrix as given in

scheme(para7.2)

Group-B

(Common serviceemployees)

85% of

amountpayable to

85% of amount payable

to employees in Group-A

Group-C

( Project Const.employees)

N.A. 30% of amount payable

to employees in Group-A


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6. The oil linked incentive/disincentive as applicable to only for

Operation & Maintenance employees in group-A, will continue to bepaidasperexistingscheme.

7. Inrespectofemployeeswhohave beentransferredfromoneproject

to another after 1.4.2005, payment for the period where the

employee had worked at the transferor project will be made by the

project where he is presently working. For this purpose, the

transferor project should send the amount payable in respect of

employee transferred to other projects/units within a period of one

monthofissueofcircular.

8. The Scheme shall not be applicable forTandaTPS for which a

separateschemeisinoperation.


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Annexure

GENERATIONINCENTIVESCHEME

1.0 SHORTTITLE

The Scheme shall be called "NTPC PowerGeneration Incentive

Scheme".

2.0 BASICCONSIDERATIONS

2.1 The purpose of any Incentive Scheme is to motivate theemployees to give their best. In the case of a power plant, the

incentive plan also takes into account the maintenance

aspect of the plant while motivating employees to maximize

generation. Any Scheme which encourages maximization of

Generation only in the short term may be self defeating as it

leadstoirreparabledamagetoplantsandmachinerybecause

of insufficient motivation to employee for the proper upkeep

and regular maintenance of the Plant. A successful Incentive

Scheme, hence, should strike a balance between short range

and long range plant requirements and should achieve a good

blend of the two in such a way as to optimize generation on a

sustained long range basis. Further, increase in Generation

may not lead to desirable results if increased costs are

allowed to eat away the substantial surplus as a result of

higher generation. From this point of view, it is desirable to

build the fuel costs and their impact on the economics of

generation into the scheme itself so that reasonable norms of

fuelconsumptionaremaintained.

2.2 The following objectives have been considered in designing the

incentivescheme.

2.2.1To keep the Generating station in readiness to deliver e

x-busoutputexpressedas%ofratedinstalledcapacity so

that the available resources are optimized based on the

merit order operation thereby bringing about an

overalleconomyingeneration.

2.2.2To maximize generation of electrical energy through


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d

e

ve areeasily measurable and have a direct co-relation to the

2.2.3 the scheme by the

employees, smooth implementation and amenability to

2..2.4 rameters for payment have been determined to

encourage better maintenance for higher availability of

2.2.5 e

while at

same time,ensuring thatpaymentsareconsistent

economictermswiththelevelofperformance.

3.0r

ion, morale and the team spirit among the

employees, the followings are the principal objectives of the

b) n of generation of Electrical energy through

d other allied

c) Reductionofcostperunitofenergygenerated. d)

inabsenteeism.

4.0loyeesofNTPCotherthanTanda

TPS,directlyor indirectlyengaged inGenerationofElectricity.The

em

a) ApprenticesunderApprenticesActandTrainees b)

optimum use of installed power plant capacity an

reduction of cost per unit of energy generated. Th

factors recommended for payment of incenti

extentofachievementoftheaboveobjectives.

To ensure easy understanding of

simpleunambiguouscomputations.

The pa

plant.

Thequantumof incentiveoffered toemployeeshas tob

enough to motivate them to put in extra effort

the

in

OBJECTIVES

Withtheaboveasbackgroundandapa tfromthe generalpurposeof

promoting motivat

IncentiveScheme:

a) TokeeptheGeneratingstation in readinesstodeliverex-bus

maximumoutputexpressedas%ofratedinstalledcapacity.

Maximizatio

optimum utilization of installed plant capacity an

resources.

Reduction

APPLICABILITY

TheSchemecoversallregularemp

Sch ewillnotbeapplicableto:-

Casualordailyratedemployees


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5.0 RECOMMENDEDFACTORSFORINCENTIVEPAYMENTT

ac

of po and cost reduction, a multi-factor scheme has beendesigned

i)

To hieve the twinobjectivesofavailabilityofplant forgeneration

werincorporatingthefollowingfactors:

Generation Incentive based on Equivalent Availability Factor

%:-

pa

EAF% orked outasper formulagiven

below

a) Thestation AF%shall

, as

certif

H of DC is issue

termsofMU

PaymentlinkedwithEquivalentAvailabilityFactor(EAF%)will

be id monthly and quarterly to eligible employees.The

forastationshallbew

:

swhereABTisinoperation,theE

becalculatedasunder:

EAF(%)= Declared Capacity(%) / Availability(%)iedby concernedAuthority.

owever, in case the certification din

theEAF%willbecalculatedasunder:

DeclaredCap.(MU),ascertifiedbythe

concernedAuthorityEAF(%) = Ex-bus Generation (MU) at installed

capacity

x 10

0

b) StationswhereABTisnotinoperation,EAFwillinclude

shortfall in g o don

t structions

RLDC/REB/C

Actual Gen.(MU)+Shortfall in Gen.

EAF(%) = duetobackingdown(MU)

eneration due to backing d wn (base

he certificate issued) on the in of

EAandwillbecalculatedasunder:

Generation(MU)atinstalledcapacity

x 10


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The responsibility of obtaining the relevant certificate

from the above authorities will be of the

concerned Project/Station. If capacity declared isfound to be wrongandpenalty imposedonNTPCon

accountof the falsedeclaration, theamount of

penalty shall be recovered from the

incentive payable to employee in proportion to their

basic pay. The maximum amount of recovery will

be restricted to the total amount of Generation

Incentivepaidinthatmonth.

d) Based on the EAF of the station, the incentive willbe

payableasperperformance-paymentmatrix inpara7.2

below.

(ii) Oil Consumption linked Incentive:- Payment will be made

monthly only to the employees directly and exclusively

engaged in operation and maintenance of the plant as per

para8.0below.

6.0 GENERATIONLINKEDINCENTIVEBASEDONEAF%The Generation Incentive Scheme based on EAF% will have

monthly and quarterly components of payment linked with the

corresponding performance levels as detailed below.There willbegraded increase in rate of Incentive for increase in EAF% above

70% EAF.The maximum Incentive will be payable at EAF of 90%

andabove.ThePerformancePaymentmatrixshowingmonthlyand

quarterlypayments isgiven intheClause7.2.Thecapacity for the

purposeofcomputingEAF%shalltake intotheaccountderationof

newlycommissionedunitsduring the firstyearasgiven inclause

7.1.ThetotalpaymentlinkedwithEAF%willbeasunder:-

a) At70%EAF-incentivepaymentwillbe7.5%ofbasicpay.

70% there will

for every 1%

b) For EAF% above

incentive payment

be graded increase in

increase in EAF% with


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maximum incentiveequal to30.0%ofbasicpayat90%EAF.

The graded increase in rate of Incentive payment has been

madeasperdetailsgivenbelow:-

6.1 MonthlyIncentive6.1.1Themonthly incentivewillbepaidbasedonEquivalent

AvailabilityFactor(EAF%)achievedduringthemonth.

6.1.2 Performance-PaymentRelationship

At 70% EAF, the incentive payable is 5.625% of basic

payand therewillbegraded increase in Incentive rate

with maximum incentive equal to 22.50%ofbasicpay,

payableat90%EAF.

6.2 QuarterlyIncentive6.2.1The quarterly incentive will be paid once in three

months based on the average EAF% achieved during

corresponding period. The performance period for

paymentofquarterlyincentivewillbeasunder:

1st quarter - ApriltoJune

2nd quarter - ApriltoSeptember

3rdquarter - ApriltoDecember

4th quarter - ApriltoMarch

6.2.2 Performance-PaymentRelationship

At70%EAF, the total incentivepayable for thequarter,includingmonthlycomponentis7.50%ofbasicpayand

there will be graded increase in Incentive rate with

maximumIncentivebeing30.0%ofbasicpaypayableat

90%EAF.

6.3 An illustrationshowingcomputationofmonthlyandquarterly

incentiveratesareenclosedforreference.

7.0 CAPACITYANDPERFORMANCE-PAYMENTRELATIONSHIP

7.1 Capacity

Installedcapacitywillbetakenasthebasisforcomputationof

EAF%. When the capacity is de-rated/re-rated, theEAFwill

be calculated on that basis. Reviewin capacitywillbedone

with the approval of Competent Authority. In case of newly

commissionedUnit, thecapacity tobe taken intoaccountfor

thecomputationofEAF%willbedeterminedasfollows:


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a) CoalS

ii) Inthesubsequent four (04)months, itwillbe70%

lled/Ex-buscapacityand thereafter, itwill

beequalto100%ofinstalled/Ex-buscapacity.

b) GasS

tations

i) In the first two (02) months from the date ofcommercial operation, it will be 60% of

installed/Ex-buscapacity.

ofinsta

tations

i) In the first month from the date of commercial

ii) In thesubsequent two (02)months, itwillbe70%

c) EAF%

shallbe roundedoff to thenearest integer.Decimalof

0.5 and above will be rounded off to the next higher

integerwhiledecimalsbelow0.5willbeignored.

operation, it will be 60% of installed/Ex-bus

capacity.

ofinstalled/Ex-buscapacityandthereafter, itwill

beequalto100%ofinstalled/Ex-buscapacity.

Forthepurposeofcalculatingincentiverates,the


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7.2 PerformancePaymentMatrix:

Incentivepayable (%ofBasicpay)EAF(%)Monthly Quarterly Total

70

71

7273

74

7576

77

7879

8081

82

8384

8586

87

8889

90&above

05.625

06.075

06.52506.975

07.425

07.87508.625

09.375

10.12510.875

12.15013.050

13.950

14.85015.750

16.65017.550

18.450

19.80021.150

22.500

1.875

2.025

2.1752.325

2.475

2.6252.875

3.125

3.3753.625

4.0504.350

4.650

4.9505.250

5.5505.850

6.150

6.6007.050

7.500

07.50

08.10

08.7009.30

09.90

10.5011.50

12.50

13.5014.50

16.2017.40

18.60

19.8021.00

22.2023.40

24.60

26.4028.20

30.00

8.0 INCENTIVELINKEDTOOILCONSUMPTIONFACTOR

The incentive will be payable monthly only if the Specific oil

consumption of the station is 2.00ml/kwh or less in a particular

month. Similarly, there will be dis-incentive if the Specific oil

consumption of the station in any month is more than the 4.00

ml/kwh.8.1 PerformancePaymentTableforIncentive-The

matrixofpaymentswillbeasunder:-

OilConsumptionin

ml/kwh

Incentive as % of

monthlybasicpay

Above2.00 Nil

2.001.76 0.70

1.751.51 1.00


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1.501.26 1.30

1.251.01 1.60

1.000.76 1.900.750.51 2.20

8.2 There will be no incentive foroil consumption between 2.00

8.3 e forexcessiveoilconsumption -Thematrix fordis-incentivewithrespecttoexcessiveoilconsumptionwillbe

asu :

Oil on

inm

0.50&below 2.50

ml/kwhand4.01ml/kwh.

Dis-incentivnder -

Consumpti

l/kwh

Dis-ince as %ntive

ofmonthlybasicpay

4.014.25

4.264.50

4.514.75

4.765.00

5.015.25

5.265.50 2.20

5.51&Above 2.50

0.70

1.00

1.30

1.60

1.90

8.4 disincentive for excessive oil consumption for themonthwillbesubjecttoamaximumof25%oftotal incentive

8.5

n

theEAF%inanymonthislessthan70%,there

will be no incentive/disincentive on account of oil

8.6

nwill

bemoderated in thesimilarmannerduring first six months.

sm t

a) Duringfirst2monthsafter =60%ofoilconsumption

The total

payable.

The above incentive on account of oil consumption will be

payableo lywhen thebase levelofgeneration i.e. 70%EAF

isachieved.If

consumption.

For the purpose of generation linked incentive, the capacity

for computation of EAF% for a newly commissioned unit, is

derated to 60% in the first 2 months and to 70% in the

subsequent4months.Theactualspecificoilconsumptio

Thi oderationwillbecarriedou inthefollowingway:


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0.6)

dateofcommercialoperation (Moderating factor-

b) Duringsubsequent = 70%ofoilconsumption04months (Moderatingfactor-0.7)

c) After06monthsof = 100%ofoilconsumption

commercialoperation (Moderatingfactor-1.0)

8.7 Thespecificoilconsumption (x)ofthestation forthepurpose

ofoillinkedincentivewillbecomputedasfollows:-

Ci * Mfx(ml/kwh) = ---------------------------------------

TotalgenerationofstationinMU

Ci = OilconsumptioninK.LiterforUnit`i'

Mf = ModeratingFactorforunitasgivenin

para8.6above.

8.8 There may be situation in a project when some of the units

maynothavecompleted 06monthsofcommercialoperation.

Under this situation, the calculation of station specific oil

consumption for thepurposeof incentiveshallbecarriedout

asperexamplegivenbelow:-

a) Totalnumberofunits - 5

b) No.ofunit(s)monthswhichhavecompleted

06 of commercialoperation

- 3(Unit

I,II&III)

c) No. of unit(s) which have completed 03-06

monthsofcommercialoperation

- 1(Unit

IV)

d) No. of unit(s) which have completed less

than03monthsofcommercialoperation

- 1(UnitV)

e) Oilconsumptionofindividualunits:

UnitI C1 K.Liter

UnitII C2 K.Liter

UnitIII C3 K.Liter

UnitIV C4 K.Liter

UnitV C5K.Liter


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f) Station specific oil consumption (x) for oil linked

incentivepurposewillbe:

C1+C2+C3+0.7*C4+0.6*C5x = ----------------------------------------

TotalgenerationofstationinMU

The above station specific oil consumption `x' will then

be compared with the incentive/disincentive matrix

givenaboveand incentive/disincentivewillapply,asthe

casemaybe.

8.9 Theoil incentivepayment ispayableonlytotheemployees in

Group-À'.The disincentive due to excessive oil consumption

willalsobeapplicabletotheemployeesinGroup-À'only.

9.0. CLASSIFICATION OF EMPLOYEES FOR THE INCENTIVESCHEMES

9.1 For thepurposeofpaymentof incentivesunder this scheme

GroupA' : Eligible engaged

commiss

GroupB' : asspecifAll other

theemployeeswillbeclassifiedintothefollowinggroups:-

employees directly and exclusively

in Operation & Maintenance of the

onedunitorunitsincludingAuxiliaries

iedinPara9.2eligible employees not covered under

Group À'above inrespectofastationwhereall

units are declared under commercial operation.

Thisgroupwill includeemployeesasspecifiedin

Para9.2(i).GroupC' : The employees posted in Civil Construction &

Equipment Erection department during

expansion/concurrent phase. This group will

includeemployeesasspecifiedinPara9.2(ii).

9.2 Deptt./areasundereachgroupwillbeasunder:

Deptts/Areasunder

DirectCategory(Group-

A)

Deptts/AreaunderIndirectCategory

(Group-B/C)


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,EEMG,

e

Plannin

Operations,Chemis

FuelHandling

try,

FuelTransportation/

MGR, Maintenanc

Group-B

HeadofProject,Commercial,

PlantCivilMntce,R&M,T/shipCivil&Electrical

(i)

Mntce.,HR,

Autobase,Const.Workshop, EMMechanical G,


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ElectricalandC&I

Maintenance

(excluding nisterialanddrivers)

mistaff

Note:-

includingthosepostedinO&M.

(ii)

F&A,C&M,ETP,TS(P&S,FQA,FE),

e, s .

Allministerialstaffanddrivers

R&R,IT/CommnSafety.Tel.

Exchang Medical,A hUtln ,Vigilance,TQM

Group-C

Erection&CivilConstruction

(i) The clarifications regarding any Department/Area not

cate entive

ill be obtained from Corporate HR Division.

h time, the r edemployeewillbepaidincenti nd .

( artment/a s be the sis for

cate roup pur of incentive. The

al area/function assigned, if any, will not

e incentive category/group of an individual

10.0 QUANTU INCENTIVEthe Performance Payment

10.2 e oyees posted in

irect category (group-B)willbe

un

GroupA

Indirect

Category

covered above, its gory for the purpose of inc

payment w

Till suc matte is clarifi the concernedveofthei irectcategory

ii) The dep rea of po ting will ba

gory/g for the pose

addition

chang

employee.

MOF10.1 The Incentive rates indicated in

relationship Matrix are to be applied on the Basic Pay forcorresponding period in respect of Equivalent Availability

Factor (%)both forCoal&Gasstations andinrespectofOil

Linked Incentive(para 8.0), forCoal stationsonly,onmonthly

basic.

Th generation incentive payment to empl

common service group i.e. ind

as der:-

DirectCategory

GroupB

100%ofIncentivepayableonEAF%as

indicatedinthePerf.PaymentMatrix.In

additionemployeesunderthiscategory

wouldalsobeentitledforIncentive,as

perPara8.0,forSp.OilConsp.

r factor

o

85%ofGroup-'A'

rates indicated

inPerf.Payment

Matrix fo

fEAF %


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10.3 Indirect Category Group-C during Expansion/Concurrent

phase:- The employees posted in Civil Construction &

Equipment Erection department will get 30% ofapplicablerateofGenerationIncentiveofGroupA.

10.4 The Generation Incentive payable during various stages of

project i.e. during O&M and concurrent phase/expansion

phase to all categories of employees is given below as

illustration:

Stage/phase of the

Project/Station

GenerationIncentiveRate

Deptt/Areas O&M Service Erection&CivilFunction

Construction

O&MPhase

(a Units inll

Commercial

operation)

Group-A

( ) 5100%

Group-B

(8 %)

-

Expansion/Concurren

tPhase

Group-A

(100%)

Group-B

(85%)

Group-C

(30%)

11.011.1

iftheperformanceisbelowstandard:

11.2

12.0 OTHERGENERALCONDITIONS

REDUCTIONININCENTIVEPAYMENTS

Inordertocontrolthecostofgenerationandimproveworkingand performance of the power station, management in its

absolute discretion may introduce,from time to time,oneor

moreofthefollowingfactorsforwhichreductionsinincentive

rateswillbemade

a) Controlonauxiliarypowerconsumption

b) Timelywagonunloading

c) Cleanliness

d) Excessiveovertimepayments

e) Anyotherrelevantfactor

Thetotaldeductionsonaccountofalltheabovefactorsshall

not exceed 40% of the total incentive payable including

disincentive foroilconsumption.Dependingon the relevance

and requirements, the introduction/discontinuance and

extentofdeductionmayvaryfromstationtostation.


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12.1

rata

trainincasua

purpo

12.2 e a

payn

not c r

Rent

comp

Fund, .

12.3 Employees may be tra red fromonedepartment/division

toanother. Insuchcases theirentitlement for incentivewill

be determined as per the entitlement of the

department/divisioninwhichtheyareactuallyposted.

12.4 Relevant particulars and data relating to generation, oil

consumption,attendanceetc.,willbefinalizedonthebasisof

recordsandaccountsmaintainedbytheCompany.

12.5 The management reserves the right to review/modify the

scheme at its own discretion from time to time keeping inviewefficiencyoftheplantbeingincreased/improvedthrough

installation of more or better equipment or by improving the

mechanical/process/technology/methods/systemsand

procedures.

12.6 ComputationofEAF%andspecificOil consumption (ml/kwh)

forthepurposeofthiswillbemadebyHRinconsultationwith

F&AonthebasisofcertifieddatafromHeadofO&M,withthe

approvalofHeadofStation/Project.AtRegionalHeadquarter

in respect of EAF% will be done by Regional HR in

consultationwithRegionalF&Aon thebasisofcertifieddataprovided by Regional OS/Commercial, with the approval of

RegionalED.Similarly,atCorporateCentreprocessingw.r.t.

EAF% will be done by Corporate HR in consultation with

Corporate Finance on the basis of certified data provided by

Corporate OS/Commercial or Regional Commercial/OS,with

theapprovalofGM(HR).

12.7 GenerationIncentivepaymenttoCC&RHqsemployees

Theemployeeswillbeentitled to incentivepaymentsonpro-

basis for actual period of attendance. The period of

g in India for a duration of not more than 15 days,l leave and RH will be treated as attendance for the

seofincentivepayment.

Th mount of Incentive earnings will neither be termed as

orallowance,norwages.Accordingly,thisamountwould

ount fo any service benefits i.e. computation of House

Allowance, Compensatory Allowance, cash

ensation, encashment of leave, pay fixation, Provident

PensionorGratuityetc

nsfer


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a) Generation Incentive rate in respect of Corporate

Centre employees will be worked out based on the

weighted av it ialof licable incentive ra of the indirect category-

Gro BineachoftheStati ProjectofNT

the applicable Generation Incentive rates of

al Head rter employees will be worked out

ed on the apaci

commercialoperatio plic n erat

o - ineach the jects

therespectiveregions.

-

The

erage on capac y in commerc operationapp

up-

te

on/

PC.

b) Similarly,

Region

bas

qua

w

r

eigh

nof

up

ted

ap

B

aver

abl

age

e in

of

on

ce

c

tiv

pro

ty

ft

ith

in

he

in

eo

wry-G

--o

-

indirectcatego


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M+Q AddlinQtr.

Monthly EAF Monthly

(a) (b) (c) d=(c)-(b) (a) (b)

IllustrationforcalculationofGIrates-MonthlyandQuarterlycomptation-I tatio

EAFGIRates

1.1 April 86.00% 17.55% 74.00% 7.43%

Sl. S S

Month

1.2 May 86.00% 17.55% 73.00% 6.98%1.3 June 84.00% 15.75% 71.00% 6.08%

1.4 TotalGIpaid(1.1-1.3) 50.85% 20.48%

1.5 1stQtr(April-June) 86.00% 70.20% 19.35%

73.00%

2.1 July 88.00% 19.80% 77.00% 9.38%

2.2 August 81.00% 13.05% 41.00% 0.00%

2.3 September 93.00% 22.50% 65.00% 0.00%

2.4 TotalGIpaid(1.1-2.3) 125.55% 37.28%

2.5 2ndQtr(April-Sept) 86.00% 140.40% 14.85% 67.00%

3.1 October 86.00% 17.55%

70.00% 5.63%

3.2 November 94.00% 22.50% 74.00% 7.43%

3.3 December 99.00% 22.50% 78.00% 10.13%

3.4 TotalGIpaid(1.1-3.3) 202.95% 60.45%

-


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4.1 January 90.00% 22.50% 4.0 7.43%

4.2 February 100.00% 22.50% 0.00% 12.15%

4.3 March 95.00% 22.50% 81.00% 13.05%

4.4 TotalGIpaid(1.1-4.3) 321.30% 93.08%

5.0 4thQtr(April-March) 90.00% 360.00% 38.70% 71.00%

6.0 AvgIncinFY 30.00%

N.B. Quarterly,Incentivewillbepayableonlywhentotalm y centivepaid inthe

minimumbasedEAF%ofthequarter.Ifitislessthan it llbetreatedaszero.

7

8

0%

on

zer

thl

o,

in

wi


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RECORD OF REVISIONS

Section-Clause No. Revision

No.

Revision

Date

Amendment Details

0601-Record ofRevisions

0 13.02.2012 Provision Added

PREPARED BY REVIEWED BY APPROVED BY

D P GiriM(HR)

P K SenapatiM(HR)

D S RaoAGM(HR)

Documents

0601 Generation Incentive