PSU bank Employees to Get Performance Based Payouts
PSU bank employees may have to toil more if they want to earn more. Apparently senior management at PSU banks are considering to introduce a system that could link salaries to performance.
A report suggests that banks such as State Bank of INdia, Punjab National Bank and Bank of Baroda were planning to introduce a system in place to award better salaries to performers of the bank.
PNB’s Managing Director and CEO Sunil Mehta had been quoted in the report as saying that his bank was seriously thinking of introducing a system of performance-based incentives for officers above general manager grade.
“There will be a component of fixed and variable pay. But it will evolve slowly,” he explained.
The private sector had been a regular user of performance-linked pay. The PSU system, doesn’t have a system in place to check for performers, but promotions have more or less been time-bound. This, in spite of no performance metrics has been a major dampener for the public banking system.
Coal India Ltd and its subsidiaries were the first PSUs that the government approved a performance-related system.
Performance based linkages have been approved for all central government employees under the 7th Pay Commission. But, a rider suggests that each department would have its own flexibility to create a matrix. A panel of experts suggested that incentives could be in the form of a “non-additive cash component” of employee’s current pay, paid at the end of the fiscal year and should not be linked to savings.
The PSBs would need approval from the government for introducing performance-linked salary structure. The pay and allowances of different levels of employees at PSBs are usually decided through settlements between the Indian Banks’ Association, the bank’s management and trade union body United Forum of Bank Unions.