Top line Growth of 18%, Profit Growth of 78 %, Cash Balances at a healthy 6900 crores, improvement in operational efficiencies.
Sadly for this CEO it is not to be. He heads the railway ministry and is widely regarded by the media as this buffoon who, through a mix of caste dynamics and compulsions of coalition politics, has managed to get himself the important railway ministry.
The papers were quick to clarify overtly and otherwise that this performance was completely the result of a buoyant economy. Growth in freight is an obvious by-product. Lets not get carried away. The minister has nothing to do with it. I am sure the analysts are right.
But should not a similar question also be asked of private sector managers?
Surely the quadrupling of the Sensex over the last four years has had a lot to do with the robust revenue growth of Equity Brokerage Houses. A 300 basis point fall in interest rate that happened four years ago made it possible for banks to book huge gains through bond trading. And the bond traders walked away with crores.
This is certainly not an argument against performance-based pay. Without a doubt, such a system works wonders for the motivation of employees. The point is that one should be careful in defining performance. There has to be a distinction between luck and skill.
Our current definition seems to be that an MBA from a premier institute generally found in an expensive suit and red tie who has "performed", has done so because of skill, while the pyjama-clad, pan chewing minister from Chapra has been merely "lucky" to head the rail ministry in good times.