Boards must have greater say in PSE salaries: SCOPE

The Standing Conference of Public Enterprises (SCOPE), the body representing all public sector enterprises (PSEs), has called for greater autonomy to boards of companies to decide salaries of employees, besides emphasising that pay packages need to be incentive-based.

The association has also called for a more frequent review of salary structures of employees of the PSEs.

"We have submitted a report to the Second Pay Revision Committee where we have asked for salary structures to be reviewed every three years," said SCOPE Chairman Sarthak Behuria, who is also the chairman of the Indian Oil Corporation.

Behuria added that this would help in retaining talent and fighting growing attrition among its employees, which is alarming at the management levels, and in employees engaged in core and critical functions of PSEs.

Behuria said remuneration committees of PSEs hardly meet as they have no issues to discuss.

"Although PSEs have been giving away crores in dividend, we have been kept away from many issues. The boards of Navratna companies, which have sweeping powers in many investment decisions, have absolutely no powers in compensation packages," he added.

The Oil Sector Officers' Association (OSOA) went on strike for four hours on Tuesday after their demand for merger of 50 per cent dearness allowance with basic pay, release of ad-hoc payment and withdrawal of tax on perquisites like company-provided accommodation were not accepted. The indefinite strike was called off only after the government decided to hike their interim relief to Rs 60,000-1,20,000 per employee from Rs 50,000-1,00,000.

The second Pay Revision Committee has a deadline till May next year to submit its report. PSE workers' salary structures were last revised in 1997, and were scheduled for the next revision on January 1, 2007.

Scope Pay Committee Chairman AK Balyan, who is also human resources director in ONGC, said the primary issue before PSEs was the retention of talent.

The PSE representative body has also recommended that salaries of public sector executives be delinked from those applicable to employees of the government or civil services.

SCOPE has suggested that the salary level of various PSEs be based on factors such as capacity to pay of each individual PSE, relevant market benchmark for pay and benefits; company, team and individual performance.

SCOPE has also recommended that the board of directors of PSEs be given the flexibility to enhance the bonus pool from the profits of the company from the existing 5 per cent.