Monday, May 5, 2008

Navratna and mini-ratna public sector companies may get freedom to set non-monetary perks

Navratna and mini-ratna public sector companies, which have long suffered attrition, may now have reason to cheer. The government is planning to give these companies complete autonomy in deciding the perks and bonuses of their employees. The second pay revision committee for central public sector enterprises (CPSEs), which is giving final touches to its proposals, is likely to ask the government to make necessary amendments to ensure this. The panel would come out with its recommendations on May 31. The suggestions would affect 4 lakh employees directly and about 17 lakh indirectly.

CPSEs, however, would not get the freedom to decide the pay scales of their employees. “The committee feels profit-making CPSEs should have the freedom to decide incentives for their employees. This would help them retain talent and stave off poaching by the private sector,” said a government official involved with the move. Central PSEs currently have the freedom to decide non-monetary perks such as housing, health and education for children of employees.

They are, however, not free to decide monetary perks such as timely bonuses, equity and cash incentives. CPSEs would now be free to decide the parameters of performance appraisal for employees in the executive cadre. The committee does not give recommendations for workers below the executive rank.

The panel has met 33 times and would meet thrice more before submitting its final report. In its recommendations, the committee would include suggestions of the Sixth Pay Commission to keep parity in the pay scales of central government employees and PSU staff. The recommended pay scale of the chairman & managing director of a CPSE is likely to be equivalent to that of a central government secretary. Directors would be recommended a salary equal to the joint secretary, and so on.

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