1. What is Performance Related Pay (PRP) in Coal India Limited?
Performance Related Pay (PRP) is a variable performance incentive disbursed annually to executives in Maharatna and Navratna Central Public Sector Enterprises (CPSEs). In Coal India Limited (CIL), PRP rewards executives based on company profitability, coal production targets, subsidiary MoU achievements, and individual annual appraisal ratings (PAR / PMS).
PRP is governed by the 3rd Pay Revision Committee (PRC) notifications issued by the Department of Public Enterprises (DPE), Ministry of Heavy Industries and Public Enterprises.
2. Coal India PRP Mathematical Calculation Formula
Here is how each multiplier works:
- Annual Basic Pay: The total basic salary drawn during the financial year (Basic Pay × active service months).
- Grade Ceiling %: DPE grade cap ranging from 40% (E-1 to E-3) up to 125% (CMD).
- MoU Factor (Company Performance): Derived from CIL / Subsidiary annual MoU ratings (Excellent = 1.0, Very Good = 0.8, Good = 0.6, Fair = 0.4, Poor = 0.0).
- Individual PAR Factor: Performance appraisal rating from the Executive Performance Management System (Outstanding = 1.0, Very Good = 0.8, Good = 0.6, Fair = 0.4).
- Kitty Factor: Multiplier applied if total required PRP exceeds the 5% Profit Before Tax (PBT) distributable corpus.
3. What is the Kitty Factor in Coal India?
Under DPE guidelines, a CPSE cannot distribute more than 5% of its annual Profit Before Tax (PBT) as PRP to its executives.
If the cumulative PRP calculated for all executives across CIL and its subsidiaries exceeds this 5% PBT ceiling, the company calculates a scaling factor called the Kitty Factor:
When the company earns robust profits (as Coal India consistently does), the Kitty Factor remains 1.0 (100%), ensuring full disbursement.
4. Worked Calculation Examples (Assistant Manager vs Senior Manager)
Frequently Asked Questions (FAQs)

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