Aslam Khan, an Assistant Director in State Bank of Pakistan (SBP), is visibly very happy. His hard work throughout the year has paid off. He has been graded ‘A’ (exceptional) by his appraiser and reviewer in the final rating of the Performance Management System (PMS) which is in force at SBP and its subsidiaries since long.
The PMS is based on a forced bell curve whereby 10 percent of the officers are given ‘A’ (exceptional), 20 percent officers are given ‘B+’ (Exceeds Expectations), 50 percent are awarded ‘B’ (Meets Expectations) and the remaining 20 percent are given ‘C’ or ‘D’ grades (Below Expectations). The Annual Merit increase (AMI) in salary as well as promotions are linked to the final rating of the PMS. For example, in the year 2019-2020, officers getting ‘A’ grade were given a 12% increase in salary; those getting ‘B+’ were given a 10% increase; officers who got ‘B’ grade were given 8%, those who secured ‘C’ were given 5% while those who got ‘D’ in final ratings were given no increase.'
Hence, Aslam Khan’s happiness is plausible.
However, his excitement proves to be short-lived. Faiza Malik*, who was given ‘B’ grade, commensurate with the average performance throughout the year, approaches some influential contact in the top management of SBP. The Director/Chief Manager receives a call from the top, and asks the appraiser and reviewer to swap the grades of Aslam and Faiza. i.e., give Aslam a ‘B’ grade and award Faiza with the ‘A’ grade. The appraiser and reviewer try to resist, but to no avail. Since their grades are to be decided by the Director/Chief Manager, whose own grade in turn is to be decided by the top management, they surrender before a phone call. Hence, Aslam is given ‘B’ grade and resultantly 8% increase in salary despite all the hard work and excellent performance throughout. Meanwhile Faiza enjoys a hefty 12% increase in salary despite a lax attitude and average performance throughout the year.
This malpractice of subjective grading and the corresponding salary increase on the whims and wishes of the top management – as well as external sources including bureaucracy, military officers etc. – is prevalent throughout State Bank of Pakistan and its subsidiaries. Apart from phone calls from high-ups or external sources, an ‘A’ grade can also be secured by doing the domestic chores and arranging undue favours for the appraisers, reviewers and preferably the top management, which includes executive directors, directors and chief managers. This Performance Management System (PMS) has severely affected the performance of the country’s premier institution where the focus of the officers is on flattering high-ups, becoming professional sycophants or arranging some strong ‘paawa’ (‘reference’) to get exceptional grades. Failing to get getting exceptional grades dents the salary, after all.
To make matters worse, the Annual Merit Increase (AMI) for the year 2020-2021 proved to be the last nail in the coffin. It is pertinent to mention here that AMI is recommended by a HR committee which comprises some Executive Directors (EDs) of the State Bank, whose own salary is also affected by the AMI – which is a clear case of conflict of interest. Final approval is given by the Governor of the State Bank, who is not a beneficiary of the AMI. This year, lot of Executive Directors were retiring and their post-retirement benefits were linked to the AMI for the year 2020-2021. And they had somehow secured ‘A’ and ‘B+’ grades. They played a very clever game. They recommended such an AMI that provided maximum benefits to them at the expense of 70% officers of the bank.
The AMI for ‘A’ grade, which was 12% last year, was increased to 14%; that for ‘B+’ was increased from 10% to 12%; that for ‘B’ grade was not only not increased from 8% but decreased to 6%, etc. Similarly, the AMI for ‘C’ grade was decreased from 5% to 2%. The Governor of the SBP was kept in the dark about this rent-seeking decision – and he approved these recommendations!
This decision has sent a shockwave of anger and fury throughout the State Bank of Pakistan. Officers of SBP BSC – a subsidiary of the State Bank of Pakistan whose size and functions are bigger than the State Bank of Pakistan itself – have decided to form an association to fight against this injustice. Although lot of policies are designed by the top management to the advantage of their “blue-eyed favourites,” this Performance Management System (PMS) and associated anomalous salary increase this year will be the single largest reason for the demise of the State Bank of Pakistan, if not corrected in time.
P.S.: Dr Ishrat Hussain, former Governor of the SBP and former advisor to the Prime Minister on Austerity and Institutional Reforms, touted the SBP’s “excellent” Performance Management system based on the forced bell curve. He has recommended the same system to be replicated in the bureaucracy!
(*names have been changed to protect privacy)
The PMS is based on a forced bell curve whereby 10 percent of the officers are given ‘A’ (exceptional), 20 percent officers are given ‘B+’ (Exceeds Expectations), 50 percent are awarded ‘B’ (Meets Expectations) and the remaining 20 percent are given ‘C’ or ‘D’ grades (Below Expectations). The Annual Merit increase (AMI) in salary as well as promotions are linked to the final rating of the PMS. For example, in the year 2019-2020, officers getting ‘A’ grade were given a 12% increase in salary; those getting ‘B+’ were given a 10% increase; officers who got ‘B’ grade were given 8%, those who secured ‘C’ were given 5% while those who got ‘D’ in final ratings were given no increase.'
Hence, Aslam Khan’s happiness is plausible.
However, his excitement proves to be short-lived. Faiza Malik*, who was given ‘B’ grade, commensurate with the average performance throughout the year, approaches some influential contact in the top management of SBP. The Director/Chief Manager receives a call from the top, and asks the appraiser and reviewer to swap the grades of Aslam and Faiza. i.e., give Aslam a ‘B’ grade and award Faiza with the ‘A’ grade. The appraiser and reviewer try to resist, but to no avail. Since their grades are to be decided by the Director/Chief Manager, whose own grade in turn is to be decided by the top management, they surrender before a phone call. Hence, Aslam is given ‘B’ grade and resultantly 8% increase in salary despite all the hard work and excellent performance throughout. Meanwhile Faiza enjoys a hefty 12% increase in salary despite a lax attitude and average performance throughout the year.
This malpractice of subjective grading and the corresponding salary increase on the whims and wishes of the top management – as well as external sources including bureaucracy, military officers etc. – is prevalent throughout State Bank of Pakistan and its subsidiaries. Apart from phone calls from high-ups or external sources, an ‘A’ grade can also be secured by doing the domestic chores and arranging undue favours for the appraisers, reviewers and preferably the top management, which includes executive directors, directors and chief managers. This Performance Management System (PMS) has severely affected the performance of the country’s premier institution where the focus of the officers is on flattering high-ups, becoming professional sycophants or arranging some strong ‘paawa’ (‘reference’) to get exceptional grades. Failing to get getting exceptional grades dents the salary, after all.
This decision has sent a shockwave of anger and fury throughout the State Bank of Pakistan. Officers of SBP BSC – a subsidiary of the State Bank of Pakistan whose size and functions are bigger than the State Bank of Pakistan itself – have decided to form an association to fight against this injustice
To make matters worse, the Annual Merit Increase (AMI) for the year 2020-2021 proved to be the last nail in the coffin. It is pertinent to mention here that AMI is recommended by a HR committee which comprises some Executive Directors (EDs) of the State Bank, whose own salary is also affected by the AMI – which is a clear case of conflict of interest. Final approval is given by the Governor of the State Bank, who is not a beneficiary of the AMI. This year, lot of Executive Directors were retiring and their post-retirement benefits were linked to the AMI for the year 2020-2021. And they had somehow secured ‘A’ and ‘B+’ grades. They played a very clever game. They recommended such an AMI that provided maximum benefits to them at the expense of 70% officers of the bank.
The AMI for ‘A’ grade, which was 12% last year, was increased to 14%; that for ‘B+’ was increased from 10% to 12%; that for ‘B’ grade was not only not increased from 8% but decreased to 6%, etc. Similarly, the AMI for ‘C’ grade was decreased from 5% to 2%. The Governor of the SBP was kept in the dark about this rent-seeking decision – and he approved these recommendations!
This decision has sent a shockwave of anger and fury throughout the State Bank of Pakistan. Officers of SBP BSC – a subsidiary of the State Bank of Pakistan whose size and functions are bigger than the State Bank of Pakistan itself – have decided to form an association to fight against this injustice. Although lot of policies are designed by the top management to the advantage of their “blue-eyed favourites,” this Performance Management System (PMS) and associated anomalous salary increase this year will be the single largest reason for the demise of the State Bank of Pakistan, if not corrected in time.
P.S.: Dr Ishrat Hussain, former Governor of the SBP and former advisor to the Prime Minister on Austerity and Institutional Reforms, touted the SBP’s “excellent” Performance Management system based on the forced bell curve. He has recommended the same system to be replicated in the bureaucracy!
(*names have been changed to protect privacy)