Considering the fact that both are competing for the same markets, there is a need for benchmarking compensation levels between the public and private sectors for comparative accountability.
New Delhi, July 9
EXECUTIVES in public sector enterprises have demanded that the pay differentials in public sector enterprises and private corporates should be equitable.
According to the Chairman of the Standing Conference of Public Enterprises (SCOPE) and Chairman of IOC, Mr Sarthak Behuria, the salary structure in private companies has risen so high to create huge disparity between workers and senior managerial personnel. In contrast, in the public sector, the disparity has been shrinking.
Both the trends are moving in opposite directions. There is need for convergence. Pay should be linked with performance.
While inaugurating a workshop on `Emerging issues in pay and reward system in public sector enterprises' organised by SCOPE and International Management Institute (IMI) here, Mr Behuria said PSEs should be innovative in designing new monetary and non-monetary rewards, which will optimise the satisfaction of employees without increasing costs to the companies.
Mr Ramachandran Pillai, Chairman-cum-Managing Director of NTC, said there is fundamental mismatch between the salaries paid by PSEs and those paid by the private sector. Considering the fact that both are competing for the same markets, there is a need for benchmarking compensation levels between the public and private sectors for comparative accountability.
He said a reward system with both financial and non-financial benefits should be evolved.
The Director-General of SCOPE, Dr S.M. Dewan, in his welcome address said the pay and reward system in PSEs needs a paradigm shift. Review of broad trends in compensation system has become inevitable as the pressure of competitiveness is mounting on PSEs. With the same kind of responsibility there is wide range of difference between the remuneration of private sector CEO and public sector CEO. The Chairman of Steel Authority of India Ltd is paid Rs 8.33 lakh per annum compared to Rs 1.23 crore to Tata Steel Chairman, he pointed out.
Dr Dewan said: "A well paid employee with variable incentive based high wages results in higher productivity thus reducing the product or transaction cost which is a must for survival of PSEs in globally competitive market place."