News: Public banks also exploring pay for performance

Compensation & Benefits

Public banks also exploring pay for performance

Performance linked wage structure is no longer a forte in the private sector only. Public sector bank has taken an initiative to pay the employees according to their performance. IDBI bank will introduce Performance-Linked wage structure with effect from July. Under this scheme, 70% of the salary will be fixed and rest will be performance based. The fixed part of the income will be equal to the current salary of the employee and the rest will act as a bonus for them. The wage pact on which public sector banks functions could give a 17.5% hike in the salary of bank officials. Analysts argue that it will be a challenging to survive with the new structure in public sector but if it is successful then it will open doors of opportunities and will also help in attracting and retaining personnel.

Performance linked wage structure is no longer a forte in the private sector only. Public sector bank has taken an initiative to pay the employees according to their performance. IDBI bank will introduce Performance-Linked wage structure with effect from July. Under this scheme, 70% of the salary will be fixed and rest will be performance based. The fixed part of the income will be equal to the current salary of the employee and the rest will act as a bonus for them. The wage pact on which public sector banks functions could give a 17.5% hike in the salary of bank officials. Analysts argue that it will be a challenging to survive with the new structure in public sector but if it is successful then it will open doors of opportunities and will also help in attracting and retaining personnel.

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Topics: Compensation & Benefits, Performance Management, Culture, #Updates, #TotalRewards

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