This underwritten piece has no issues with whatsoever load factor or
quantum increase is decided between IBA and UFBU (representative of employee).
This article simply attempts to understand the spectrum of Bankers pay
structure vis-à-vis its synchronisation with career path/ hierarchy available
in bank’s pyramid
Between
IBA and UFBU hustle and tussle on quantum increase in banker’s wages, the real
issue of right pay structure to senior Public sector Bankers is getting lost.
We need to look at the pay band across hierarchy in PSBs from the realities of
the market. Few critical factors which are deliberated and drawn from prevalent
understanding are as under:-
- Senior Bankers, say Chief Manger & above with 12+ years of experience are paid very poorly in comparison to the commercial decision making & responsibilities vested in them.
- PSB pay better at entry level profiles of Clerks/Officers/Assistant Managers as compared to the new generation private sectors Banks (NGPB). The teller level CTC are less in NGPB when compared with PSB’s.
- PSB have max of 7 tiers (Scale-I to CEO) in career progression as compared to minimum 15 to 25 slabs in NGPBs. The Table-I Indicate that highest level in PSB i.e. General Manager (takes min 17 to 20 + years) gets 3.23 times of Basic Salary of entry level Asst Manager. This has caused ordinality loss in pay hierarchy and has had manifested across employee motivation in career progression and has diminished the value of position which comes with hierarchy.
- Banks ED’s, MD’s, CEO’s and CMD’s who are now getting paid as per 7th CPC, which are no match for Salary of Board level executives in NGPBs. After 7th CPC, Banks CEO present salary is 10 times of Scale-I officer and post bankers to be 11th Bipartite settlement it will come down to multiple of 5 times approx. This does not compare favourably with the multiple of 100+ which a CEO of Axis, ICICI and HDFC Bank gets over their starting officer grade salary
- As such best talent to guide the Bank in hyper competitive ever changing landscape is not getting attracted to senior critical roles in PSBs.
- Who is responsible for building the Bank for future when Fintechs and Internet Giants are changing the very definition of banking every single day? How will PSBs pay the right price for the desired skill sets?
Public
sector Banks are still playing the role akin to infrastructure utilities,
having last mile connectivity with masses. The fast pace technology revolution
which is driving financial access like never before is still a decade away from
annulling the role of PSB in financial landscape until the status quo does not
change. PSB will never become redundant like BSNL and Air India unless the
Government/regulator open the savings channel to Fintech /Internet Giants and
allows them the power to create money supply.
Most
of the reforms which have been spoken in context of PSBs are like:-
- Autonomy of Board
- Dilution of Government ownership to 33%
- Freedom for outsourcing
- Autonomy / Dilution of CBI/CVC watch dogs in decision making
- Freedom in hiring
- Capacity and skill building
The New Thumb Rule
- Let the bipartite wage revision fix only quantum hike for the Scale-I / Assistant Manager starting basic pay as the base value for deriving subsequent pay scales for grades.
- Instead of merging DA and loading the hike and distributing it across spectrum, Let there be multiples /Ratio be fixed for all scales upto CEO in relation to Scale-I
The
need of the hours is to have fresh thinking in revamping the career path
hierarchy and compensation consummating with experience and position. It is
imperative to broaden the existing 7 Tier promotion and compensation multiples more
closely to NGPB slabs. Splitting of existing seven grades structure into more
will lead to more frequent promotions during the service currency. But this
cannot be done within the existing narrow bands where General Manager with 20+
years of experience has basic just 3.23 times of Scale-I officers.
Expected Criticism of
above suggestions
1. Till
GoI remains the dominant owner, there shall exist the uniform umbrella pay
bands across PSB, which also suits their highly organised nature.
2. The
right pay for professional, will spark the debate on jobs identified for professionals.
How will bank incentivise staff who have organically grown into skilled professionals
by virtue of experience, as compared with professional hired from market at
higher Cost to company.
3. Since
maximum employees are engaged in routine banking operations, which are routine defined
jobs. Would it be then right to have the differential pay bands for 80% of
staff? How will variance in performance define the variable component of pay?
As it is Banks have had issues with ratings and bell curve.
4. The
focus on fee based income by banks to enhance profitability has earned lot of
negative press on cross sell and miss sells. This core sources of income
enhancement through outbound sales has had manifested in wider distress and alarming
suicide rates in recent probationary officer batches recruited since 2009
onwards.
5.
Is
the commercial component only the right motivation for youth to join PSB, when
it is known that cream has moved away from entry level PSB jobs?
Conclusion:- There are many loose ends to fix, which
will evolve over longer term. Along with all the reforms advocated by the world,
it is about time to add more layers in Bank’s hierarchy to provide broader
career path to young officers along with higher responsibilities, remunerations
and without any further delay in paying Bank’s senior management their due
remuneration in sync with broader competitive market.
PS: PSB wages are not discussed here in
light of the bad press which banks balance sheets had attracted since Jan-16 onwards.
The delivery governance (Jan Dhan, Demonetisation, Aadhaar Linkages, Atal
Pension, Pradhanmantri Bima Yojna & etc…) driven on top of PSB
infrastructure, necessities the closer scrutiny in their wages in parallel with
which government employee, railways and monopolistic CPSE are paid.
(The View expressed are
author's personal view)
Author: Ravi Gupta
