LIC unshackles salaries to counter poaching
Staff of branch that fares better will get productivity-linked incentive
| "All employees of the branch that fares better than others will get productivity-linked lumpsum incentive (PLLI)," said chairman A K Shukla. PLLI was introduced back in 2000 during the reign of G N Bajpai. |
| It was decided at the time that depending on the growth in premium, LIC employees, across the board, would get an additional incentive capped at 6 per cent of their salaries. In the last two years as LIC's growth in premium on a larger base has not been as expected, employees have not received PLLI. |
| With the induction of a new chairman, LIC will restructure PLLI within six months and incentives will be paid to deserving employees. |
| "Just because the corporation has not qualified at the corporate level, employees should not suffer if individual branches have performed well," Shukla said. Talks with unions will shortly take place, and employees will not get a percentage of the profits, but a targeted amount. |
| The target will no longer be just the premium growth rate, but will also include the ability of the staff to reduce expense ratios and increase productivity and cut costs, said Shukla. |
| "Our agents and employees are committed and their loyalty level is very high. But we need to involve them in ensuring total growth of the corporation, and not just their own growth," Shukla said. |
| Public sector banks too are moving towards offering variable performance-linked salaries. State Bank of India and Bank of Baroda have announced their plans to offer variable pay to employees based on the performance of branches, zones and regions. |
| LIC proposes to reward employees based on the performance of individual branches. For instance, of the total Rs 2,107 crore mopped up under Future Plus, a unit-linked insurance plan, the northern zone fared the best in terms of highest premium collections of Rs 367.37 crore. |
| Similarly, the eastern zone outperformed all others in mopping up the maximum number of policies aggregating 2.4 lakh of the total 10 lakh plus sold within a short time span. |
| PLLI was introduced at the last wage revision, and was valid for three years. Today, the wage revision of LIC employees are overdue and expected to be completed in the next fortnight. |
| LIC's wage bill is expected to rise by 13 per cent, and the corporation will reintroduce PLLI in its new form. |