Performance Related Pay in Central Public Sector Enterprises in India

The latest second pay revision for central public sector enterprises (CPSE), accepted in 2008 in India, calls for implementation of the concept of performance related pay (PRP) based on a transparent and robust performance management system (PMS) for executives. This paper studies the implementation of performance related pay in CPSEs and the perception of employees towards performance related pay. The paper is based on both primary data collected through questionnaire and also on secondary data. The paper highlights the pre-requisite of PRP implementation in CPSEs in India, the need for a transparent and robust PMS and the various challenges in the implementation process.