Bank employees’ salary will be now linked with performance
A new revolution is soon going to hit the Indian banking sector as few Public sector banks have recommended a new salary model: No performance, no pay!
Quite obviously, employee unions have opposed this decision, with full vigor.
Will banks embrace this new change?
Performance Linked Salary Structure In Banks?
Three of the largest public sector banks: State Bank of India (SBI), Punjab National Bank (PNB) and Bank of Baroda (BoB) have suggested a performance-based salary for senior bank officials.
This would be modeled on the existing performance-based salary structure of some key senior positions in private banks.
As per incoming reports, this performance-based salary structure will be applicable to only those who are above the general-manager grade position.
However, if we believe rumors, then this model can be soon applied to all banking jobs.
The rule shall be simple: Deliver on the tasks, and get your salary. No performance, no salary.
PNB Managing Director and Chief Executive Officer Sunil Mehta said, “The bank is seriously thinking of introducing a system of performance-based incentives for officers above the general manager grade. There will be a component of fixed and variable pay. But it will evolve slowly.”
Please note here, that as of now, this is only a suggestion. Govt. must approve this to make it happen.
Employee Unions Say No Way This Can Happen!
Quite predictably, employee unions have opposed this move.
As per Ravinder Gupta, joint general secretary, All India Bank Officers’ Confederation, banks cannot evaluate exact performance metrics, and this model will fail.
He said, “We are not in the corporate sector, where people are hired for performing a particular job.”
The Union is demanding one-rank-one-pay, and there have been some heated debates on this issue in the past.
Wage increment for all employees higher than scale-III officers or up to the senior manager level is already on, and now, the recent performance-based salary issue has come up, triggering ideology clash between employee unions and the management.
Generally, such salary negotiations and wage issues are settled between the Indian Banks’ Association (IBA), the bank’s management and trade union body United Forum of Bank Unions (UFBU).
Going by the stand taken by these employee unions, it can be tough for the Govt. and the banks to implement performance-based salary model.
Do you think bank employees should be paid based on salary? Which other sectors should have this performance-based salary? Do let us know by commenting right here!
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