There will be a total outgo of Rs 8146 crore from all four companies for meeting wage revision expenses
The unions have criticized the government for mentioning “conditional future performance linked pay revision’’ and threatened agitational path in case of unilateral imposition of such a rule
New Delhi:
The government has quickly notified 12 per cent wage hike, since August 2017, for the 44,000 workforce of PSU general insurance industry (GI) and has also now made it a rule that the next revision starting from August, 2022 will be in the form of a variable pay based on the performance of the company and the employee.
Asia Insurance Post earlier had reported that Nirmala Sitharaman, finance minister, after a bit of haggling over “Performance Linked Future Wage Revision’, had cleared the 12 per cent wage revision proposal of the PSU GI industry before leaving for US to attend annual meetings of World Bank and International Monetary Fund.
Now, GIPSA, the coordinating body for the four PSU GI companies and GIC Re, will issue administrative guidelines about the quantum and timeline for payment of higher salaries for the industry.
The unions have criticized the government for mentioning “conditional future performance linked pay revision’’ in the gazetted notification and have already threatened agitational path in case of unilateral imposition of such a rule.
The unions had earlier clarified that they were not against KPI(key performance indicator) being the sole criteria for assessing the performance and pay structure of PSU GI employees in future but these concepts need detailed and serious discussion
The unions want the government should share the consultant report prepared by Ernst Young(E&Y), which has been hired by GIPSA to turn the PSU GI industry into agile as well as profitable and has recommended `Performance Linked Future Wage Revision’, to enable them to study the consultant’s proposals before its implementation.
The unions also have now raised its demand for merger of three companies- National Insurance Company(NIC), United India Insurance(UII) and Oriental Insurance Company(OIC) as per Budget Proposals 2018.
In `Performance Linked Wage revision’ the performance assessment of each employee will be linked to the performance of the organisation along with his/her own performance, GIPSA had said earlier in a letter to the unions of the industry.
According to the new plans, primary component of the wage revision will be variable (performance based). However, a small fixed component of the pay shall be towards the cost of living adjustment during each appraisal and wage revision cycle, GIPSA had said.
Measurement of performance will be made absolutely objective, based on key performance indicators identified for each employee as well as the performance milestones set for each organization. APAR(annual performance and appraisal report) and promotion policies will be modified accordingly to recognize and reward good performance, said GIPSA.
With the 12 per cent hike along with five years of arrears, wage bill for National Insurance Company (NIC) will be around Rs 2177 crore, Rs 2080 crore for New India Assurance (NIA), Rs 2135 crore for Oriental Insurance Company (OIC) and Rs 1752 crore for United India Insurance(UII).
There will be a total outgo of Rs 8146 crore from all four companies for meeting wage revision expenses, said analysts.
The government last year had approved a 16 per cent wage revision with arrears for the employees of IPO bound LIC and had even finalised a hike of 15 per cent with arrears for the PSU banking industry in 2020.