Article: At Air India, productivity is no incentive

Performance Management

At Air India, productivity is no incentive

Air India, the largest public carrier in India which has been going through financial crisis seems to have buckled under pressure from powerful labor unions representing lower level employees by keeping them out of the purview of pay cuts. The country’s premier carrier has accepted the recommendations of its committee which had recommended upto 50% cut in productivity linked incentives for employees at the higher level of pay slab such as pilots and cabin crew. The cuts in productivity linked incentives (PLI) range from 25% for those getting upto Rs. 10,000 to 50% for Rs. 2 lakh and above.

With this pay cut, Air India hopes to impress the government enough to get a bailout. For the year ended March 2009, the total loss for the carrier stood at $875 million for which experts blamed the state run airline’s excessive and unnecessary spending. The unions representing the affected group of employees have however refused to accept this policy which becomes effective retrospectively from August.

Topics: Performance Management, Strategic HR, Employee Engagement

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