While evaluating PSUs? performance in corporate social responsibility, the focus should not be limited to inputs but should also cover the output. For example, the number of projects should not be the only criterion for evaluating the CSR performance. Rather, the quality of projects also need to be judged following the guidelines laid down by the department of public enterprises.
It has been clarified in the DPE guidelines that: ?The long-term CSR plan should match with the long-term business objectives. This should be broken down into medium term and short term plans.?
This indicates emphases on impact and long-term sustainability of the CSR projects.
In contrast, the memorandums of understanding (MoUs) signed by the government and the central public sector enterprises (CPSEs) focus on parameters like funds deployed and new projects launched for assessing the CSR performance. Thus, the focus of evaluation gets narrowed to the inputs , neglecting the output parameters.
The MoU system is a major policy initiative of the government for facilitating the process of performance management of CPSEs. The government has initiated an organised process of planning and implementation of CPSE activities and performance monitoring, which improve their performance and operational autonomy.
The CSR guidelines stress on the linkage of CSR with sustainable development. These norms define CSR as a philosophy wherein organisations serve the interest of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment.
Aligning-social-development processes with business development objectives is the thrust of the guidelines.
According to the principles of strategic CSR, the selection of CSR activities, with a specific reference to the nature of the project and its size, depends entirely on the business processes of the CPSE. It is therefore the prerogative of the board of a CPSE to decide which specific social process (project) or processes should be selected to generate best possible outcome in the long run.
This process may lead to small-sized projects or a few medium-sized projects or even one large project demanding more funds than the annual CSR budget, where results achievable in the long run and sustainability are the key determinants. Therefore, the number of projects may not be the key indicator of CSR performance.
In fact, the number of projects as the sole parameter contradicts the long-term impact and sustainability objective. It is commonly known that what gets measured gets done. If the indicator for measurement is the number of projects, it will be done, but may not produce the optimum outcome and impact. May be, these are teething problems in the process of a change from an ad-hoc charity environment to a strategic CSR environment, which can be resolved.
A new agency, the department of performance management, created recently is focusing on the targetted results by each entity. Under this new system of performance management, a Results Framework Document is being prepared for each ministry and department, focusing on the agreed performance targets.
The writer is a management and CSR consultant