Improving Governance of PSUs - Addl Inputs

Members of various circles continue to report instances of corruption at Public Sector Organisations. Below are your key inputs to improve the functioning of PSUs in India. Kindly review and if you have any further specific inputs to fix corruption and mis-governance, please share. We will be submitting this whitepaper shortly to PMO, CVC and leadership at Dept of Public Enterprises.

We look forward to your inputs!

Improving Functioning of PSUs – Key Solutions

1.Biometric attendance system should be used to make the PSU employees report to work everyday
2.Processes should be computerized
3.All files should be digitized
4.Time limits should be set for each process
5.Auto-escalation of the task should be enabled in case it exceeds the set time limit
6.Employees should be trained on using computers and other modern electronic devices used in everyday working
7.The top management of the PSU should have sufficient business experience in the field
8.Only competent individuals with demonstrated past performance should qualify for CEO positions regardless of tenure in Government
9.The working of the PSUs should be made free of political influence
10.Customer centric approach should be inducted in the daily working of the PSUs
11.Customer care departments should be revamped and customers should be given top notch telephonic and web support
12.Employees should be made accountable for the responsibilities assigned to them via KRAs
13.Performance benchmarks should be set for all employees
14.The yearly salary reviews of the employees should be performance based and not fixed
15.Salary increments should be based on the profit that the PSU makes
16.Help of the private sector should be taken to revive the loss making PSUs
17.Cost management should be taken seriously and expenditure should be brought in line with the long term vision
18.E-tendering should be introduced for sourcing and vendor management
19.Caste/religion or just years of experience based promotions should be stopped
20.Like inter-department transfers, inter-PSU transfers could be started to reduce corruption
21.Some loss making PSUs that have not recruited fresh man power for years should be allowed to churn their workforce by replacing old employees with fresh talent
22.Evidence based reward system should be introduced to drive in culture change
23.Ethics and Integrity should be re-enforced regularly via trainings and employee undertakings.

State/Functioning of Public Sector Enterprises – Root Causes

1.Responsibility & Accountability is not built into the systems
2.General culture in these organizations is to please the boss and forget about the customer
3.Top managers usually are politicians or bureaucrats and do not have prior business experience
4.Senior management lacks leadership qualities
5.High ranking officers have a lot of authority which in turn leads to corruption
6.Senior level appointments are politically influenced through PSEB and many times come with conditions/expectations/cost
7.Infrastructure of these PSUs is vast and tough to maintain
8.Employees have a high level of job security and hence ignore their responsibilities
9.KRAs of the employees is not defined
10.Employees are scared of stepping out of their comfort zone
11.No one is ready to own up to tasks which results in bad customer service
12.Annual increments are not performance linked
13.Promotions are not performance based
14.Government does not have a divestment plan for the ailing public sector enterprises
15.Labour laws are heavily tilted in favour of the unions
16.Employees/management are scared of change
17.Competition is not kept in mind while deciding the price of the finished goods
18.Recruitment system is archaic
19.The unblemished record of the UPSC selection procedure is not used for Public Enterprise selections
20.PSUs are sometime forced to take non-feasible projects because of the Government pressure
21.Concept of right man – right job is not implemented.

Functioning of Public Sector Enterprises - Key Issues

1.Corruption is rampant
2.Management is not up to the mark
3.A lot of scams happen
4.Lack of vision from top management
5.The working of these organization is highly politically influenced
6. Services given to the customer are poor
7. Responsibility for losses & leakages is seldom fixed
8.There is a lack of transparency in the appointment at Senior level
9.Employees are untrained and not ready to adapt new technology
10.Customer care is pathetic
11.Performance of the employees is very poor
12.Some organizations have been running in losses for years
13.Customer service of these PSUs is pathetic
14.Labour Union leaders are involved in political activities, therefore, not working towards good work of the organisation
15.Work distribution and responsibilities are not fixed
16.Major mismanagement of resources
17.Lack of focus on growth
18.Lack of focus on cost management
19.Lack of accountability especially at top management level
20.Major corruption in sourcing and vendor management
21.Quality of their work is not up to the mark
22.Public Enterprise Selection Board is influenced by politicians and in many cases requires payoffs for Senior jobs at PSUs
23.Promotions are made based on caste/religion or just years of experience
24.Technological advancements in the PSUs are very slow
25.Price of the finished products is much higher than the competition
26.Inadequate after sales service. more  

View all 187 comments Below 187 comments
PSU's are more for Social then for business.Unless this is reversed or made purely for business we can not expect gimmics. more  
We have sacrificed quality in the name of reservation.Thus half the problems are because of this factor alone. more  
Because they are guarding and well Protected too more  
PSUs are formed for speedy decisions by overcoming the red tape in govt for decision making. However most of the PSUs follow the procedures of govt since the directors and most of the functional heads are drawn from bureaucrats.
The vigilance guidelines and other policy guidelines are rarely followed. One such aspect is long standing of executives in same seats / offices by pleasing their bosses. Though there is clear vigilance circular that executives should not continue in sensitive seats for more than 4 years this is rarely followed. It goes without saying that in govt there is no seat which is not sensitive and all executives should necessarily be shifted in fixed intervals.
In order to ensure implementation of periodical transfers the following is suggested.

Performance reports are filled in every year and "outstanding" rating plays key role in career growth. In order to implement transfers outstanding rating should not be given for continuing in the same seat /office/city for more than the stipulated period.
For example
In fifth year of working in same seat outstanding should not be given even the performance is outstanding

For sixth consecutive year in the same office no outstanding.
For seventh consecutive year in year in same city no outstanding. more  
The inputs are very good and let it be presented before the authorities for taking corrective action. more  
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