Ten Point Scale

Forget India, everywhere in the world, be it in public or in private sector, decisions are based on guidelines or are arbitrary. This means that very rarely, the decisions will go wrong. Take, for example, the case of Vijay Mallya. Are we to blame or are we to blame those who didn’t notice Kingfisher Airlines is a sinking ship and gave him loans? Every businessman thinks pumping money till the right time comes, things will turn around. And especially if the money is not from his pocket, he will not hesitate to pour it. The onus, in this case lies on those banks, which decided to fund them. How did they decide? Is it based on their internal standards or is it due to corruption? Note that corruption simply doesn’t mean bribing someone. It is defined(by UN I guess) as being of either of the below three categories –

1.     Using your influence

2.     Using the influence of someone who can influence

3.     Buying your way

In cases like Vijay Mallya, we are seeing cases one and two and very rarely three. Someone powerful asked the banks to give him loans. He may be a personal friend of Vijay Mallya, he may be a Minister thinking of the job security of those umpteen employees or someone else. But the point is this – do we have a solid benchmark which banks can use and which people can understand, a benchmark which can be used to question the decision and people will understand why it is questioned?

The answer almost always is, we have our guidelines and we have our questionnaires. But, who will understand questions like How fast is your P/E ratio growing or How much is the Year-on-year increase in your advertising cost? Both of them indicate the slow rotting of the core of the business; but these are for experts. Now, if we say, we have got a ten point scale and any application which has got a score greater than 8 will be automatically cleared; anything below 6 will be rejected and anything in between will go for a second opinion? And if Kingfisher scores 9 and even after it collapses, the only question I will get is, is your formula correct. I will be ready to share my formula with anyone who wants to scrutinise it. I will be out of the hook even if the damage is done. If this is the case, set up a panel who will devise that formula for you. It can be something internal you can do or it can be a consortium defining it for you. May be, for loans, we should consider the possibility of reclaiming of surety, strength of field, strength of company, job creation potential, percentage presence in a field or a ten thousand such questions. It will be a form based questionnaire which the bank employee asks and the output is a number.

Thinking about this seriously, this can be applicable everywhere. What we need is a questionnaire and a formula to convert the questionnaire to a ten-point scale. It can be promotions, it can be development index of a state, it can be defence preparedness, it can be the customer friendliness of a bus conductor, it can be the foreign policy directed towards a particular country or whatever, ranging all across the spectrum.

Let’s take one specific area – promotion of judges. Today, both the government and the judiciary are fighting with each other over who will appoint the judges. Instead of that, let’s see if it fits into a formula. Below are some parameters –

1.     How may awards has he received? Each award will have it’s own weightage.

2.     How many leaves did he apply over the prescribed maximum?

3.     How many days he takes to close a case vis-à-vis the mandated time

4.     Average number of adjournments in a case

5.     Percentage of cases transferred to a different judge before the final judgement is given

6.     Number of types of cases he is handling

7.     How many cases he judged, and the judgements are overturned by a higher judge (well, I don’t want such a judge for obvious reasons)

8.     Number of complaints against him

9.     His total experience

Club them into a formula and if he gets a number 5 and if he questions why he is rejected for the vacancy of a Supreme Court judge, the number will be staring at his face. The same number can be updated daily on a portal, putting a pressure on their working style, ultimately changing it.

Can you tag this number to a performance pay component in their salary? May be. But, the purpose of this scale should not to gauge performances, but to simplify the decision making when staring at potential risks and reducing questions over the decision making process. After all, if anyone is not happy, there is an ocean of logic awaiting him to dig into and pick the gaps.