ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION

/o the Managing Director,

Bus Bhavan, Hyderabad-624.

No.OS3/767(30)/2010-PO-III

CIRCULAR No.PD-69/2010, DATED 23.12.2010

 

SUB: REVIEW OF BSR & PERSONNEL COST –Action plan for reduction  of BSR- Reg.  

***

Profitability of an organization not only depends on the Revenue alone but also on costs. Both the absolute values of inputs as well as the efficiencies with which the resources are utilized, determine cost per kilometer of operation. The absolute values of inputs are escalating at a very rapid rate day by day. At this juncture, there is dire need to expend on areas where managerial performance translates in to tangible results and to adopt strategic initiatives in order to control Personnel cost and Bus Staff Ratio.

 

Need To Control Personnel Cost

 

Personnel cost plays a pivotal role in financial performance of our organization. It is inversely proportionate to profitability. So managerial analysis is essential in identifying the cost  drivers in order to focus on reducing the cost since the personnel cost is major component of total cost. Lack of control on Personnel cost proves to be disastrous in the long run. So managerial efforts are prerequisite to regulate formidable cost drivers and to avoid profligacy in the utilization of human resources in order to ward off the escalation of Personnel cost and BSR.

 

 

 

 

 

 

 

 

 


 

 

i)        Personnel Cost in Total CPK :

 

Sl.No.

Year

CPK

P-Cost

%

1

2008-2009

1843

664

36.03

2

2009-2010

2064

865

41.91

3

2010(upto oct-10)

2160

845

39.12

 

ii) Personnel Cost in Total EPK:

Sl.No.

Year

EPK

P-Cost

%

1

2008-2009

1884

664

35.24

2

2009-2010

1878

865

46.06

3

2010(upto OCT-10)

2104

845

40.16

 

 

 

 

           

            From the above it is seen that the percentage of P-Cost in total EPK has been increased from 35.24% to 46.06% when compared to 2008-09 & 2009-10.

 

Reasons for increase in personnel cost

 

The following elements contribute increase in personnel cost.

 

(1) Statutory/Mandatory elements

 

 

(2) Managerial control elements  

 

 

            During the peak season i.e., from April to June the reporting of Sick and applying Leave by the Crew would be more on account of Hot Summer.  In order to tide over the situation, additional cushion at 0.1 per double shift schedules, 0.05 per single shift schedules over and above the existing 2.6 per double shift schedules and 1.3 per single shift schedules for both Conductors and Drivers has been permitted to all the Regions from the year 2003 onwards in order to operate more no. of services in view of Summer Holidays, Marriages/Auspicious days etc.  This procedure is to increase the market share by increasing   the Operated Kilometers; reducing the cancellations; increasing the vehicle utilization, by supplementing the casual/contract crew in place of non-availability of crew due to long sick and absenteeism etc. However, Guidelines were also issued regarding non drawl of wage in respect of absented regular crew in lieu of whom contract crew are booked.

 

            Since, spot absenteeism of regular crew was more or less a regular phenomena irrespective of slack or peak seasons, a decision was taken during the year 2003 to provide additional cushion of crew in slack season also, subject to the conditions that;

 

(i)        At any time the utilization of crew should not exceed the Norm of 2.6 with wages at Depot ie., 2.6 for double shift schedules and 1.3 for single shift schedules.

 

(ii)       No wages shall be paid to the crew who absent for their duties at any time when once casuals are engaged in their place and paid daily wages.

 

            In the year 2007, it was observed that cancellation of services for want of crew had been increased alarmingly.  During the year 2005-06 a total of 1.14 Cr. KMs were cancelled whereas during the year 2006-007, a total of 1.33 Cr. KMs were cancelled.  The percentage of crew cancellation was increased from 0.48% to 0.55% during this period.  With a view to increase the reliability and regularity of services by minimizing the cancellation for want of Crew, the Corporation Board vide its Resolution No.96/2007, dt.4.8.2007 has accorded approval for increasing the norm of crew from 2.6 to 2.7 per schedule by engaging additional contract crew (Drivers and Conductors) @ 0.1 per schedule towards buffer to take care of impact of absenteeism etc.

 

            Even after providing additional crew there is no substantial reduction in cancellation defeating the very purpose of providing additional crew.

 

Crew cancellation:

 

Sl.No.

Year

Total KMs cacelled

% of crew cancellation

1

2008-2009

10866030

0.41

2

2009-2010

11345387

0.40

 

3

Upto oct-10

6119533

0.59

 

           

            From the above it is seen that the percentage of Crew cancellation has increased from 0.40% to 0.59% up to oct-10 over the last year.

 

Payment of Double Duty amount:

            Though additional cushion of crew to an extent of 0.1 per double shift schedules and 0.05 per single shift schedules is provided, still huge payments are made for double duties as detailed hereunder:

 

Year

Drivers

(Rs.in Crores)

Conductors

(Rs.in Crores)

Total

 

2007-08

17.09

11.64

28.73

2008-09

18.71

13.52

32.33

2009-10

21.71

15.02

36.73

 

From the above, it can be seen that there is no improvement in operational efficiency, in reduction of expenditure on double duty OT payments, in reduction in cancellation of KMs even after providing additional contract crew (Drivers and Conductors) at 0.1 per schedule  resulting  in increase of Personnel cost and BSR

 

Impact of absenteeism on performance

 

1. Punctuality is affected

2. Loss of earnings

3. Increase in crew cancellation

      4  Reduction of crew productivity 

      5  Loss of reliability and confidence in commuters

6. Increase of private operators

 

Need to control Absenteeism           

 

Human Resource is the most valuable asset of our organization. Every region is provided with required crew @ 2.7 including cushion, reckoning on no. of schedules and also taking in to consideration of additional crew for long distance services, ground booking and for departmental vehicles. Even after providing the sufficient crew, services are being hampered and irregular operations are taking place on account of Absenteeism. As a result corporation is incurring huge losses though we are having adequate resources. So managers have to strive hard to curb the menace of absenteeism. 

Recently, a review was conducted in one of the regions to find out the reasons for increase in Personnel cost and Bus Staff Ratio. In this Region for sep-2009 BSR is increased by 0.52 i.e. from 5.59 to 6.11 and Personnel cost is increased by Rs.1.20 ps over the last year. The committee report reveals that 171 drivers and 148 conductors are being utilized against Leave, Sick and Absenteeism. Moreover 11 drivers absented continuously for 30 days and 22 drivers are under LWP continuously for 30 days. The ostensible fact for increase in Personnel cost and BSR is excess utilization of crew over and above the norm of 2.7. After thorough analysis it is evident that in this region, due to lack of certain practical approaches and disciplinary actions against absenteeism, led to escalation of Personnel cost and BSR.

        Absenteeism can be categorized in the following types

 

1) Sporadic  absenteeism

2)  Long absenteeism

 

Sporadic Absenteeism:-

 

            If any employee is often irregular to his duties for trivial reasons, this can be considered as sporadic absenteeism. Sporadic absentee tends to absent for his duties frequently and does not show any interest in performing his duty. Traffic inspector shall record the reasons for his frequent absenteeism every time and counsel accordingly.

 

Long Absenteeism:-

 

If any employee absents for 10 days or more than 10 days that can be considered as long absenteeism.

 

Mechanism to control Absenteeism

 

     The following methods should be adopted to control absenteeism.

 

a)      Counseling

b)      Initiating disciplinary action

 

a)      COUNSELING:

 

Counseling of absentees has to be done at two stages.

 

     i)    When employee absents on the spot, he should be counseled on the day when he reports for duty.

 

ii)   The non-availability of the employee basing on LSA (Leave, Sick and Absenteeism) from January to June and July to December has to be maintained in a register as shown hereunder. After obtaining data, the Depot Manager/Asst.Manager(T) has to counsel the non-available employees during the period from January to June and July to December.

 

 The proforma for maintaining a register is shown as under.

 

S.No.

Name of the Employee

No. of days not available for duty

Total No. of days not available for duty

No. of working days

Remarks of the employee with assurance not to absent for duty

Signature

 

 

L

S

A

Total

Jan to June

July to Dec

 

 

Employee

Supervisor

 

 II.   INITIATING DISCIPLINARY ACTION:

 

1. Every week the list of employees absented for more than 3 days has to be sorted out and those employees have to be counseled. If the same trend of absenteeism is repeated by the employees even after counseling, disciplinary action must be initiated against them.

 

2. For every 10 days, the Traffic in charge shall submit a report of long absentees who absented themselves for 10 days or more than 10 days continuously and unauthorisedly to the Depot Manager. The Personnel Department shall put up all absenteeism cases to Depot Manager after receiving the report from the traffic section and obtain orders for framing charges.

           

3. The Depot Manager shall initiate disciplinary action in all absenteeism cases and final action shall be completed within a span of two months.

 

In case of unproductive employee:

 

1.  The employees who are not available for more than 40% of total working days due to Leave, Sick and Absenteeism can be treated as unproductive employees.

 

2.  The Traffic In charge shall submit the list of unproductive employees basing on Leave, Sick and Absenteeism, to the Depot Manager for every six months.

 

3.  The report should be submitted for the first half year, ie., January to June,by July 10th and  for the second half year, ie., July to December, by January 10th .

 

4.  Basing on the report, disciplinary action must be initiated against unproductive employees. They must be issued with the charge sheet on the grounds of his non-productivity.  Further a detailed enquiry must be conducted.   

 

    5. The Depot Manager shall nominate an Enquiry officer (Traffic Supervisor/Personnel Supervisor/ Accounts  Supervisor/ Mechanical Supervisor) duly addressing a letter to absentee to attend the detailed enquiry.

 

6.   If any employee does not acknowledge the charge sheet or if he does not submit his explanation after receiving the charge sheet or if he does not receive the letter to attend the enquiry or if he refuses to attend the inquiry even after receiving the correspondence from the unit officer or if he gives wrong address to avoid the inquiry, in all such circumstances no case should be kept pending for all above reasons, the Enquiry Officer shall proceed to conduct ex parte enquiry. 

 

7.      The Enquiry Officer should send notice of enquiry to the employee twice.  And if the employee does not receive the notices or if he does not respond even after in receipt of enquiry notices, the Enquiry Officer should conduct ex parte enquiry.  While sending notices to the addresses of the employee, simultaneously a copy of the notice has to be displayed on the Notice Board and obtain acknowledgement of the co-employee and the same should be kept in the enquiry case.  At every stage of the disciplinary action, seven days time has to be given duly following the procedure in CC&A Regulations

 

      8.       In the most of the Depots, absenteeism cases are pending for want of detailed enquiry. To over come this all Unit Officers shall follow the procedure mentioned above to expedite the action in absenteeism cases.

 

    9.    The Depot Manager has to send the status of absenteeism cases every    month to Dy.CPM/zone in the proforma as stated below.

   

Sl

No

 

Name of the

employee

 

Designation

 

Absent period

 

Dt of the case opened

Dt of the CS issued

 

Dt of final action

 

 

 

 

 

 

 

 

 

 

   10. The DY.CPM/zone should monitor the progress of the absenteeism cases  and ensure that all the cases should end up with final action within two months.        

  11.    The Dy. Chief Personnel Managers should consolidate the Region information and send a copy to Chief Personnel Manager by 15th of every month.  This should be discussed in the Officers meeting of Depot Managers with Regional Managers, Personnel Officers with Regional Managers/Dy. Chief Personnel Managers and in the meeting of Depot Managers/Personnel Officers with Executive Directors.  This will also be reviewed periodically in the meetings held with Executive Directors and HODs by VC & MD.

 

Sd/- (B.PRASADA RAO)

VICE CHAIRMAN &

MANAGING DIRECTOR

To

All Officers of the Corporation

// ATTESTED // 

CHIEF PERSONNEL MANAGER

 

Copy to Secy. to Chairman / PS to VC&MD

Copy to PRO/HO – for translation into Telugu ; TO/HO for inclusion in monthly index of Circulars (4 copies)