IDBI Bank has moved to a variable pay structure for its off

Only public sector player to have performance-linked salary.

Ignoring a government advisory, IDBI Bank has moved to a variable pay structure for its officers, who will now have a 70 per cent fixed salary component.

In the process, it has become the first public sector bank to shift to this structure, while the other banks, that are part of a negotiated wage structure, gave up the plan in the wake of opposition from employee unions.

The move came as a surprise for most IDBI Bank managers, who discovered the shift only after they received their salary for January. The government has also set up a committee, headed by former Bank of Baroda Chairman and Managing Director A K Khandelwal, to review the human resource policies of public sector banks and variable pay is one of the issues being discussed.

The bank has also raised salaries around 20 per cent, three bank executives said.

While IDBI Bank Executive Director (Human Resources) Pramod Sadar Joshi confirmed the variable pay package had been implemented, he did not respond to an e-mailed questionnaire. An IDBI Bank spokesperson said Joshi was tied up with meetings.

Executives said they were surprised the bank had gone ahead and implemented the move, since there was no mechanism in place to measure their performance.

Also, last May the government had written to IDBI Bank to put on hold plans to shift to variable pay and harmonised service conditions, saying the proposals required closer examination. Bank workmen had got a stay, following an intervention by the labour commissioner. Following this, the bank had put its plan to implement a variable pay structure on hold.

IDBI Bank wanted to shift to a uniform pay structure as it had merged three entities to form the present bank. While IDBI, the development financial institution was converted into a bank seven years ago, IDBI Bank and United Western Bank were merged into the new entity. Each entity had a different set of service rules and salary structure and the bank management was trying to harmonise these.

At least two bank executives said the revised salary scheme had been implemented with retrospective effect and the bank would pay arrears over the next few days.

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