SBI may introduce variable pay structure; Unions say it might be difficult for them to stop this move after merger.

SBI may introduce variable pay structure; Unions say it might be difficult for them to stop this move after merger.

State Bank of India (SBI) might revive an old salary structure proposal that the bank always wanted to implement but could not because of union pressure. The structure entails that the salaries of officers in scale four to seven be divided into fixed and variable components. Fixed will club basic, dearness allowance, house rent allowance and the rest would be performance linked variable.

The new structure, if adopted, would be applicable for the employees of associate banks, too, once they become part of SBI after April 1. According to a senior SBI official, performing employees want a variable pay structure as their hard work would not be rewarded otherwise. The new wage structure need not mean pay would be less than the current package, but there would be scope for an upside through this structure, the official said.

SBI has been trying to introduce this for some time and in wage negotiations, the bank has time and again rooted for it. But unions have scuttled the proposal. This time, however, the case could be different. The unions said a variable structure seemed inevitable now.

“It doesn’t look like we would be able to stop this structure after merger. The bank management will force officers to sign the deal and will carve out a different structure than the industry,” said a senior union leader.

Associate banks have already offered employees a voluntary retirement scheme (VRS). The scheme is expected to be widely accepted. The scheme is for employees who have completed 20 years of service or have five years of service left. Unions have asked employees to reject the offer. But it would be difficult to convince the employees, conceded unions.

This is because a number of branches would have to be closed or re-designated after the merger and existing staff could get transfers arbitrarily, said bank unions.

As of March 2016, SBI had an employee strength of 207,739. State Bank of Travancore had 14,892 employees, State Bank of Bikaner and Jaipur had 13,529, State Bank of Mysore had 10,650, State Bank of Hyderabad had 17,414 and State Bank of Patiala had 11,175. The last two are not listed. “How the associate bank employees would be treated largely depends on the success of the VRS scheme. If it is a failure, the employees could get rough treatment,” said a senior official of an associate bank.

If the previous merger is any indication, associate bank employees could expect some discrimination as a given. Predictably, unions are opposing the move and the agitation might intensify soon. After the merger with State Bank of Saurashtra and State Bank of Indore, the SBI management reduced seniority of the officers from the merged entities.

Seniority of scale one officers of State Bank of Saurashtra was reduced by a year, scale two officers by two years and scale three officers by three years. A case in this regard is going on. Perhaps to counter the loss of seniority problem, associate banks’ managements have given aggressive promotions to employees since talks of the merger started firming up, said sources. This has not gone down well with SBI employees.

SBI is currently offering a smart package for its officers in scales one to three. The package entails monetising all small perks. For scale one officers, the monetisation comes at Rs 1.54 lakh a year. For scale two, it is Rs.2.24 lakh and for scale three it around Rs.2.5 lakh. Unions had advised the employees to reject the offer.

Source:BankingUpdates