| Finmin against IDBI Bank variable pay move | |
| BS Reporter / Mumbai June 18, 2009, 0:07 IST | |
Writes to the lender’s board saying the new salary structure should be in line with that of PSBs.
The finance ministry has expressed concern over IDBI Bank’s plan to implement a variable pay scheme under which 30 per cent pay will be linked to performance.
According to sources, a day before the bank’s board took the decision, the finance ministry wrote to IDBI Bank Chairman Yogesh Aggarwal that the bank’s directors should keep in mind that the new pay scales were based on those in public sector banks.
While other public sector banks have dropped plans to move to a variable pay structure as part of the latest round of wage negotiations, IDBI Bank, outside the ambit of the talks, has decided to shift to a cost-to-company model.
On May 23, a day after the advisory from the government, the board approved a proposal to harmonise compensation for officers and workmen.
Similarly, despite the government advisory against taking a decision on harmonisation of terms and conditions of service, the board approved the move with a rider that the there could be a need to change some of the terms and conditions. The board, sources said, authorised Aggarwal to make the required changes.
Sources say that following the decision, the unions have petitioned the government as the bank has proposed to reduce the number of leave that can be accumulated, increase work timings and link interest rate on loans to the bank’s cost of funds.
RS Athaley, general secretary of the All India IDBI Officer’s Association, said the move was being opposed by the unions. “The proposed salary structure cannot take care of the minimum salary. In the banking industry, there is an understanding on at least 17 per cent increase in salary. Whatever is the proposal, IDBI Bank should give its employees at least that much increase, which the present proposal does not cover.”
Besides, he said that while the bank intended to shift to a performance-linked pay structure, no systems were in place to measure performance. “It may take six months to work out the performance parameters, so how can we sign on a blank cheque? Even the government directions on the issue are very clear,” Athaley said.
He said that the proposal was discussed with the employees on April 15 and the bank management took a decision despite opposition from the staff.
Asked about his view on the government communication on variable pay plan, IDBI Bank chairman Y Agarwal said it is a sensitive issue and will like to work quietly.
|
Content Guide
