The government is weighing performance-linked incentives for the senior management of public sector banks.
“The government is examining the recommendations of the A.K. Khandelwal committee and, in all likelihood, a majority of the recommendations will be accepted.
A final decision is expected in another couple of months,” joint finance secretary K.V. Eapen told reporters on the sidelines of a banking seminar organised by the CII here today(4th Oct).The Khandelwal committee had suggested training for the top management at PSU banks and performance-linked variable pay.
According to Eapen, the government is considering “incentives based on certain parameters”. “The recommendations are currently being considered by a group consisting of bankers and ministry officials and a decision is expected with a month’s time,” he said.
The committee headed by former Bank of Baroda chairman Anil Khandelwal submitted its report to the ministry in June this year. The committee suggested that banks should do away with the present practice of an industry-wide wage settlement. Instead, it had proposed wage settlement at the individual bank level.
There are no such proposals for officers in the middle or lower levels.
Led by AK Khandelwal, the ex-chairman of Bank of Baroda, the committee had proposed sweeping changes in the functioning of PSBs, particularly in recruitment and compensation.
According to Eapen, while matching salaries of PSB employees with their counterparts in the private sector might not be feasible, the issue of compensation of senior bankers was being discussed.
The committee had also recommended that each PSB be allowed to settle salaries for its employees in accordance with their specific skill sets and the bank’s overall performance. Now, most government-owned banks follow an industry-wide wage settlement, brokered by the Indian Banks Association once in five years.
The committee had recommended certain variable components in the salary package. Eapen said if at all implemented, the variable pay structure was more suited to top employees at the decision-making level.
Over 100,000 employees — 7,736 executives, over 50,000 officers and around 48,000 clerical staff — would retire from PSBs over the next five years.
The combined manpower of the country’s 27 PSBs stands at about 700,000.
(With Inputs from The Telegraph, The Financial Express and Business Standard.)
7 comments :
This should have happened long back. Atleast this would have prevented exodus of good officers to the private sector.
The hike is also required at grass root level also.If you cover only senior Management & Top Management.The Top Management has already taken away major part of 9th BPS Hike.The Scale I-III were given peanuts in 9th BPS.Then frustation will further push Scale 1,2,3 to Private sector.We have already shared that the attrition is majorly at Scale I,II & III not in the Senior Management or Top Management level.This can be verified by any PSB in their trend of Resignation.
Any if the Big bosses in MOF think that work is only done by TOP & Senior Management.Then from whom these people will get the work.
If you look at the trend the younger lot is more frustated.
The compebnsation should be increased at all level and should not be biased and Banking will not get good clerk also if they continue this trend.
GOVERNMENT ONCE AGAIN IS ON THE WRONG FOOT BY THINKING ONLY SCALE IV AND ABOVE PEOPLE ARE LEAVING BANK JOB FOR GREENER POSTURES AND THEY ONLY NEEDED BETTER COMPENSATION. WHETHER THEY ARE DELIBERATELY INNOCENT , GOD ONLY KNOWS.MAJORITY OF THE CREAM IS ONLY UPTO SCALE IV LEVEL. ATTRITION WILL BE LESS AT THE EXECUTIVE LEVEL DUE TO AGE AND COMPELLING OTHER FACTORS LIKE MOBILITY ETC. MOF/IBA/FM/PM IF THEY ARE SINCERE AND REALLY IN THE DEVELOPMENT OF THE BANKING SECTOR AND FOR RETENTION/ ATTRACTION OF TALENTS LET THEM INCREASE WAGES IMMEDIATELY BY 40% -20% DIRECT AND 20% THROUGH PERFORMANCE BASED AND LET THEM APPOINT A ONE MAN PAY COMMISSION. NO REPRESENTATIVE EITHER FROM UNIONS OR FROM IBA SHOULD BE THERE. ONLY INPUTS IN WRITING SHOULD BE COLLECTED BY THE PAYCOMMISSION JUDGE.
OTHERWISE IT WILL BE HALF HEARTED WHICH WILL INCREEASE THE FRUSTRATION. THEY ARE ALSO QUALIFIED ICWAS IN THE CLERICAL CADRE ALSO .GOVT SHOULD NOT MAKE AN HASTY DECISION. LET THEM COMPARWE THE WAGES OF CLASS I OFFICER AND BANK SCALE I OFFIER THEN THEY CAN COME TO KNOW WHAT THE INJUSTICE THAT THEY HAVE DONE TO THE BANKMEN /ENTIRE FINANCIAL SECTOR EMPLOYEES BY KEEPING SOME IRRELEVANT PERCENTAGE IN THEIR MIND.
K BALASUBRAMANIAN
Dear Balan Sir,
Absolutely you are correct. If bank top/senior management think of it, definitely they would also suggest the revised pay scales at root levels. If not, there is a scope for new controversy between managements.
The Banking is the only establishment where CMDs/Top Management projects the Staff as duffers in front of Ministry of Finance.Although there are exceptions but Most CMDs do this.They neither have vision nor foresight to groom quality Human resources from grass root level.This is very much visible in the recent trend of NPAs.Most of the people in the present set except SBI are at the Top because of AGe/ experience not because they have done some thing remrkable.Most of risk takers either end up at scale 4 or 5.
In terms of incentive nothing is there.The comparision drawn by ministry babus is with pvt sector banks.Who pay peanuts to junior level people and whole chunk of compensation is eaten away by scale 4 and above.The MOF Babus want the same structure.They do not understand that the Public sector banker is a multi tasker and far far knowledgeable than private counter part at junior level who works in restricted domain.
If this happens there will be mass exodus from PSBs to Private.The PSB will retain their Top level talent and loose quality resources at grass root level who are back bone of PSBs
How Much Retirees are Made to loose in Every Settlement
http://www.allbankingsolutions.com/How%20much%20lost%20by%20retirees%20in%20each%20settlement.htm
PIL filed in High Court against 9th Bipartite Settlement & Joint Note
http://www.allbankingsolutions.com/PIL%20-%20Bombay%20HC.htm
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