In a bid to usher in more transparency in reporting salary components during placements, B-schools, led by the Indian Institute of Management, Ahmedabad (IIM-A) have decided to do with away with the concept of cost-to-company (CTC). Instead, B-schools would now look to declare a maximum earning potential (MEP) which would include both cash, non-cash and other variable components.
The move was a result of the Conference on Placement Reporting Standards was at IIM-A on Saturday. Of the 170 B-schools, 85 recruiters, and 13 media and ranking agencies invited for the conference, 33 B-schools, 4 recruiters, and 7 media and ranking agencies attend the conference. IIM-A had held the conference with an aim to refine the Indian Placement Reporting Standards draft.
Talking about one of the major refinements in the draft standards, Saral Mukherjee, chairperson - placements at IIM-A said, "Earlier, CTC did not specify guaranteed cash components. Also, it gave a wrong picture about variable components. Hence, the participants agreed to replace the concept of CTC with that of the maximum earning potential (MEP). Reporting the total guaranteed cash components and MEP separately will provide sufficient meaningful information."
A revised draft will now be sent across to all stakeholders by IIM-A. According to Mukherjee, a reply from all stakeholders will be sought by July 31, 2011 in terms of their acceptance or rejection of the revised draft.
Among other updates in the draft, it was also decided that internship data would be further segregated based on whether internships were secured through the institute or otherwise. The sectoral information was further expanded to include sectors like travel and tourism. "It was also agreed by participants that verification by an external auditor would be the appropriate method to lend credibility to this initiative," said Mukherjee.
To ensure fair and transparent placement reporting, IIM Ahmedabad had proposed in the Recruiter Conclave held in October 2010 to release a set of Placement Reporting Standards. The first draft of these standards were released in February this year to the major stakeholders, including recruiters, media and other B-schools, to solicit feedback. "There used to be lot of misreporting during placements. Once the format is standardised, misreporting will reduce over a period of time. Which is why we thought of such a standardisation," said Samir Barua, director, IIM-A.
On its part, IIM-A aims to release its final placement report according to the proposed standards this year. "We have received placement data from 210 students out of 314 PGP students placed. In the PGP-ABM batch all recruiters have shared the data with us," Mukherjee added.
