Bagging a job in a public sector undertaking (PSU) is like a ‘mission accomplished’ for most. The reason - ‘the future is secure’. But, today it has also become a stepping stone for greener pastures - private sector - for people entering the senior management levels.

The movement from a public to a private sector entity at the middle to senior management level is due to the wide gap in salaries offered to senior executives in a public sector against the private sector counterparts.

“At the entry point the salaries offered in a public sector are higher than what the private sector offers, but, as you go up, the slope starts becoming steeper in private sector unlike what we (PSUs) offer,” said K.S. Jamestin, Director – Human Resources, ONGC.

Despite this, the executive attrition rate in major PSUs, such as ONGC and NTPC Lts, is less than one per cent.

This speaks volumes about employees’ confidence in these companies and their HR policies, said a senior NTPC official.

Sixty years into the oil and gas exploration business, ONGC has faced poaching of staff at the senior management level by private sector companies. In fact, most of the private sector entities in the petroleum business today boast of trained manpower from PSUs such as ONGC, Oil India Ltd and even refiners like Indian Oil, Hindustan Petroleum Corp and Bharat Petroleum Corp.

At the entry level, attrition is seen to be lower in PSUs because they make huge investments on training these employees and offer better packages than the private firms. The problem arises at the middle-level, said K.S Jamestin, adding that it is at this level that the career reaches a plateau, and salary is lower than in private sector.

In 2006, ONGC launched a scheme to woo back its former employees, especially in core activities, such as geosciences, engineering and finances. When the company launched this scheme, it received over 300 applications, of which it shortlisted 130-140 people. Besides, it worked out a set of parameters to ensure that the option to rejoin the company was not misused.

“We are in constant process of succession planning to build a strong and continuous leadership pipeline,” an NTPC official said.

The reasons for attrition are mainly attractive salary package in the private sector, along with better career and growth prospects, the executive said.

Though PSUs continue to make efforts to bridge the gap between the public and private sector, it may not be fair to draw parallels between salary structure of the two as the public sector policies have to fit in with the socio-economic reality. Staff in public sector not only enjoy job security unlike in private sector but also get a range of benefits and perquisites that are not monetised, such as accommodation at subsidised rates.

So, what do public sector companies do to retain talent? For one, ONGC has built a mechanism that rewards performance.

In lieu of the Performance Incentive Scheme, the company has implemented a new scheme called Performance Related Pay, which relates to the performance of the organisation and the performance of its employees, said K.S. Jamestin.

The scheme is based upon organisational performance, which determines the distributable kitty. The differentiation based on Employee Performance (PAR score) moderated through the ‘bell curve’, the position of the employee in the hierarchy and the role (field and office roles) are factored in.

Further, since a PSU cannot have hire and fire policy, it offers a VRS scheme.

According to NTPC, as a fresher what one perceives of a company is mostly due to what he has heard of it in the market and through interactions with various stakeholders. But, what will hold him back is the company policy. HR policies play a vital role in keeping the employee engaged and motivated.

“At NTPC we have also put in a lot of effort to increase the welfare activities, both for the employees and their families,” the official said. Also, NTPC is improving the social security benefits by charting out their own pension scheme.

According to Indian Oil officials, the company had conducted its last employee engagement survey in 2007 and level of engagement during that time was found to be about 70 per cent, which is considered to be high. “We are repeating the survey in 2012, which will give us new insight regarding the employee morale,” the official said.

“All HR related indicators, like value added per employee, refinery, pipelines and marketing throughput have shown increase in the recent years,,” the official added.

(This article was published on August 2, 2012)
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