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MEP to replace CTC at B-schools

AHMEDABAD: Gone are the days when MBA aspirants were lured by misleading advertisements on attractive packages. The concept of reporting just the cost-to-company (CTC) in packages offered to business school graduates is set to be replaced with Maximum Earning Potential (MEP), which will now include cash incentives and variable components as well.

At present, companies and business schools report only the CTC in placement reports, which does not specify the guaranteed cash components. The decision was made at a conference hosted by Indian Institute of Management, Ahmedabad (IIM-A) to discuss the revision in the draft for Placement Reporting Standards.

The Placement Reporting Standards aim to make the placement reports transparent, easy to understand, more comparable and reliable. The conference was attended by 33 business schools, four recruiters and other stakeholders like media and ranking agencies.

It was also decided that internship data will be further segregated based on whether internships were secured through the institute or otherwise. The participants also agreed that verification by an external auditor would be the appropriate method to lend credibility to this initiative.

Saral Mukherjee, chairperson, placements at IIM-A said, "Reporting the total guaranteed cash components and MEP separately will provide sufficient meaningful information."

In October 2010, IIM-A had proposed the Placement Reporting Standards at a recruiters' conclave. The institute released the first draft of these standards in February this year to its stakeholders. The conference held on Saturday focused on refining the draft further and concluded with the decision that a copy of the revised draft would be sent to the stakeholders. A reply from them will be sought by July 31, 2011 in terms of their acceptance or rejection of the draft.

Every business school has its own system of reporting placements after campus recruitment. According to IIM-A, the lack of standardization may lead to misinterpretation of data and wrong decision-making for future aspirants to a business school. Top global business schools like Harvard Business School, Stanford, Wharton and MIT Sloan are compliant to the 'MBA CSC Standards for Reporting Employment Data', a standard reporting format...

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