Under increasing pressure from fierce private-sector competition, public sector bank chiefs are planning to dole out performance-linked incentives, out-of-turn promotions, special projects and overseas postings to retain talent.
This strategy would be used for employees upward of Scale 4 — deputy general managers, general managers and even executive directors. Those who come under Scale 1 to 4, however, draw a salary in line with their counterparts in the private sector, the Indian Banks Association (IBA) said quoting an analysis.
The average annual salary for a junior officer posted in Mumbai is about Rs 10 lakh.
“The issue is being looked into and one of the proposals is to introduce performance-linked incentives or variable pay besides adopting other measures, which include promotions, overseas postings among others,” TM Bhasin, chairman, IBA told HT.
The government banks are facings a huge talent crunch, at a time when their loan books are weak and non-performing assets, or bad loans, are worrisome highs.
Last month, the country’s largest lender State Bank of India chief Arundhati Bhattacharya said as compared to their private counterparts state-owned bank employees are poorly paid. She also underlined that it was critical to provide better remuneration to attract talent.
At present, negotiations are underway on wage revisions for public sector banks employees.
An executive director of a mid-sized public sector bank, who did not wish to be identified, said that the efforts are on to incentivise employees who are able to perform beyond expectations.
“Most banks are trying various things, which are in the direct control of the management… The idea is to motivate them and incentivise them... The management tries to identify the employees, provide them recognition and give even out-of-turn promotions and exciting postings to keep them motivated,” he said.
Banks have also been hiring specialists for risk management, policy framing and other roles on contract for a limited period at a salary comparable to the private sector.