Letters: For macro reform

Beyond the gaps in bank reforms, articulated well in the editorial, “Chasing rainbows” (February 15), Indradhanush 2 may have to do a lot of homework to make state-owned banks more enterprising. 
 

Linking rewards, incentives and disincentives to a performance matrix will be a daunting task but one that has to be done. PSBs have been struggling to raise the bar for their performance to match their private sector peers. But macro reform integration has not been adequately aligned with a change in the performance management system. Annual performance appraisal reports (APAR), currently used by all PSBs, are not enough to bring rigour into performance orientation.
 

The fact that there is neither much incentive for better performance nor a striking disincentive for poor performance is ingrained in the system. No monetary rewards, barring some bank-level bonus or incentives that are sporadic and not adequately and exactly matched with any defined performance index. 

This leads to temporariness (one to two years) in demonstrating performance at the unit level, to only get early promotion and/or better placement. There is a weak linking of dots on performance despite the advancement of technology and availability of business management information systems. Talent management, succession planning, incentive as reward for risk-taking are yet to gain strategic space in PSBs.  

Macro reforms have to be adequately supported by micro reforms in Indradhanush 2 to reinforce performance orientation with sufficient incentive.

K Srinivasa Rao, Pune

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