The Securities and Exchange Board of India (SEBI) on Wednesday issued a detailed response hours after some officials reportedly lodged an unprecedented complaint with the Union Finance ministry last month alleging toxic work culture within the organisation.
The letter has accused the leadership of using harsh language, setting unrealistic targets and micromanaging. The employees, in their letter on August 6, said: "Shouting, scolding and public humiliation have become a norm in meetings," said the August 6 letter.
In its response on Wednesday evening, the Sebi said a group of employees consciously designed a strategy to change the narrative to frame the issue as relating to the work environment, with an objective to have bargaining power to seek more benefits.
SEBI said that the junior officers have been receiving messages from external elements outside their group, effectively instigating them to ... "go to media, go to the Ministry, go to Board"..., perhaps to serve their own purpose.
Here's what Sebi said:
On work culture
Replying to the charges one by one, the capital markets regulator stated that: "SEBI is committed to ensuring that it is responsive to the market ecosystem and all its participants, both in terms of speed of approval and facilitating ease of doing business as well as in carrying out timely investigation and enforcement against wrong doing in the market. SEBI employees have been delivering this over many decades and with increasing complexity and scale of the market, they have adopted technology and new processes to continue to deliver to the markets."
It added that: "In line with this commitment, over the last 2-3 years, the following initiatives have been taken by SEBI:
a. Quantified KRAs being set at the start of the year
b. Officer-level and team-level monthly targets set for completion of work c. Sharp accountability for ageing and pendency from date of first receipt of applications/ reference instead of the date of receipt of the last communication. d. Monthly MIS for early identification of problem areas for timely resolution of bottle necks, if any. e. End of year review of performance of each department by a panel of Whole Time Members and Chairperson to facilitate reward and recognition to high performing teams and appropriate bell curve for low performing teams. f. Promotion policy adapted to include suitability of candidates for core functions of SEBI in assessment criteria in addition to seniority and past performance. g. Mandatory certifications for employees in line with certifications that are mandatory for market participants. h. Quantified output based staffing, based on KRAs and transparent rules on creation of vacancies for promotion. i. Adoption of technology to improve productivity across the organization.
The claims of unprofessional work culture in the letter dated August 06, 2024, are misplaced and seem to stem from instances such as: a. Under-pitching of processing capability of officers by as low as 1/4th of actual capacity b. Mis-reporting of status of achievement of KRAs c. Shuttling of files between departments over a long period to avoid taking decisions d. “Adjusting” appraisal marks of poorly performing officers to “somehow” make them eligible for promotion.
On External elements
SEBI further added that it is unfortunate that some elements have attempted to diminish the significant capabilities of SEBI employees by instigating employees to believe that, as “employees of a Regulator” they should not be required to have such high standards of performance and accountability.
It added: "SEBI apprehends that the junior officers have been receiving messages from external elements outside their group, effectively instigating them to …go to media, go to the Ministry, go to Board…, perhaps to serve their own purpose. In fact, the letter of August 06, 2024, was not sent by the SEBI employee associations to the Government (and a section of the media). It was an anonymous email that was sent, and officers and associations have themselves condemned it and communicated the same to HRD through emails."
It is interesting to note that while the letter of August 06, 2024 laid great stress on unreasonable targets, when, in response to this feedback, the KRAs were reviewed, the majority of the KRAs were reaffirmed as is by three/four levels of management, and only a few departments saw minor changes to their KRAs. > In summary, it is our belief that SEBI’s junior officers, who were in large numbers, originally aggrieved in respect of HRA allowances, have been misguided, perhaps by external elements:
a. To believe that as “employees of a Regulator”, they should not be held to high standards of performance and accountability even though, they have in fact demonstrated that they are fully capable of delivering to high standards to the market ecosystem. b. To believe that they are being “underpaid”, even at a CTC of Rs. 34 lakhs per annum and that it would be in their interest to use issues of work culture to bargain for monetary benefits. c. To believe that they should get automatic promotions.
Issues raised
Sebi said in the recent past, amongst numerous other benefits, employees were demanding a 55% increase in House Rent Allowance (HRA), over the allowance set in 2023. Employees also raised an issue on updation of SEBI’s automated Management Information System for Key Result Areas (KRAs), which had been designed to bring more transparency, fairness and accountability within SEBI. A 15-minute silent protest was held in this context.
"It is understood that when media reported on this protest as being “only about their working conditions and allowances and perks…” and “nothing about the issues faced by the vast majority of investors and stakeholders …”, a group of employees consciously designed a strategy to change the narrative to frame the issue as relating to the work environment, with an objective to have bargaining power to seek more benefits. Accordingly, a letter focused on “work culture” was crafted and sent to HRD on August 06, 2024," it said.
The Sebi added after 7 days, apparently as part of the strategy, a second letter was submitted with a long list of 16 demands, for numerous monetary and non-Page 2 of 5 monetary benefits including increase in HRA. Further, automatic promotions at lower performance ratings without interviews has also been “demanded”.
SEBI officers are already well paid, and for entry level officers at Grade A, the cost to the company is approximately Rs. 34 Lakhs per annum, which compares extremely favourably even with the corporate sector. The new demands placed by them would amount to an additional CTC of almost Rs. 6 Lakhs per annum.
What Sebi employees had said
The Sebi officials, in their letter – titled 'Grievances of Sebi Officers-A Call for Respect', said the leadership uses "harsh and unprofessional language" toward team members, monitors their "minute-by-minute movement" and imposes “unrealistic work targets with changing goalposts”, the letter says. This has impacted mental health and thrown work-life balance out of gear, the officials said in the letter to the finance ministry.