The Hindu Business Line : ‘Give public sector cos autonomy to decide on staff salary’

Managing attrition
“Empowered boards will help in retaining talent and fighting growing attrition by introducing performance-based compensations among employees, which is now alarming at the management level and in employees engaged in core and critical functions to businesses of PSUs.”

Our Bureau

New Delhi, Aug. 23 The Standing Conference of Public Enterprises (SCOPE), a representative body of the central public sector enterprises (PSEs), on Wednesday urged the Government to allow greater autonomy to the boards of PSEs to decide on employee compensation in order to check attrition.

Speaking to reporters here on Wednesday , SCOPE Chairman, Mr Sarthak Behuria, said a report on Compensation Management Practices in PSEs has been presented to the second pay revision committee set up by the Government.

Mr Behuria said that uniform salary structure for all PSEs is not a realistic approach and companies should have the freedom to reward its employees based on performance.

“The board of directors in a PSE has immense power in all matters, like investment, expansion, production, distribution but no power at all regarding pay scales,” he said, adding that there is a need to break out of the socialist structure in businesses.

Empowered boards

“Empowered boards will help in retaining talent and fighting growing attrition by introducing performance-based compensations among employees, which is now alarming at the management level and in employees engaged in core and critical functions to businesses of PSUs,” he said.

The SCOPE Chairman said that salaries in PSEs should be de-linked from the salaries of Government employees.

He also pointed out that the rate of progression of salaries in PSEs is gradual and the ratio between the entry-level executive’s salary and that of the CEO is about 1:4 as compared to the private sector companies where it is much higher.