Employees from around 47 banks in India are on a two-day strike on 22nd-23rd August to protest the proposed reforms in the banking sector and outsourcing of jobs.
This strike is not about increasing wages but on those issues which, when implemented, may perhaps help in making banking sector function with increased efficiency. Now let us have a look at the issues on which around 10 lakh bank employees and officers working in 27 public sector banks including State Bank of India (SBI) and 12 old generation private sector banks and eight foreign banks have resorted to the extreme measure of disrupting work of financial sector.
At the centre of the dispute is Khandelwal Committee Report. This 186 page report is formally known as “Report of the Committee on HR Issues of Public Sector Banks” and was published in June 2010. The recommendations contained in the report are mainly on the following:
- Manpower and Recruitment Planning: The recommendations in this regard include achieving Officer – Clerk ratio of 1:0.50 in urban areas and 1:0.75 in semi-urban rural areas, achieving staff cost ratio of 50% in the next 5 years, outsourcing of non-core activities, raising recruitment standards, recruiting 50% of the officers directly, banking qualifications to be mandatory for officer recruitment, graduation to be minimum for clerical staff and 10th standard for sub-staff and fresh recruitment of clerks only for rural and semi-urban branches.
- Training and Skill Development of Staff: Creation of talent pool in identified areas, training colleges to function as centre of excellence, importance to e-learning and alternate delivery channels, two year training mandatory for directly recruited officers.
- Career Planning: Systematic job rotation, mandatory rural service of three years for officers, fast track promotions, sabbatical of two years for women employees.
- Performance Management: All categories of staff to be covered by PMS, introduction of 360 degree feedback for Scale IV and above.
- Succession Planning and Leadership Development: System to groom potential successors, common pool of GMs for entire banking industry, HR Head to be given importance.
- Employee Engagement and Motivation: Online resolution of grievances, suggestion schemes, recognition of learning initiatives.
- Professionalization of HR: Position of ED (HR) to be created in large banks, recruitment of HR professionals and HR agenda being driven by top management as a priority and HR audit to be conducted every two years.
- Wages, Service Conditions and Welfare: Movement away from industry-wide wage settlements on the principle of “Capacity to Pay” and Staff Welfare allocation guidelines.
- Reward Management: Fixed and variable pay concept. A portion of wage will be fixed and balance will vary according to performance. Introduction of incentive schemes with at least 50% earmarked for operational functionaries, 25% for branch heads in rural and semi-urban centres.
- Corporate Governance: Govt. Requested to consider separating the position of the Chairman and Managing Director.
- Govt. To consider Navaratna status to some PSBs.
- Creating Risk Culture: Committee approach for sanctioning of large loans, accountability and pre-mature retirement as one of the tools to enforce accountability and staff accountability policy for NPAs.
- Industrial Relations: PSBs to review internal settlements that affect mobility of staff.
From the above recommendations, it appears, the dispute is around the following:
- Bank specific wage structure based on profitability, productivity etc.
- Fixed and variable pay concept. A portion of wage will be fixed and balance will vary according to performance.
- Settlements with unions on transfer of employees to be reviewed
- 50% of officer vacancies to be filled directly
- The minimum qualification for appointing a clerk to be graduation and 10th standard for Sub-staff
- Outsourcing of non-core bank jobs which is unfair labour practice.
A glance at the above disputed issues will make it apparent that disrupting financial sector for two days on such issues may be a bit unfair. These issues are do not appear to be blatantly anti-employee but on the other hand may facilitates the PSBs to increase their efficiency and serve the nation in a more productive way. This is an era of extreme competetion with very thin margins and fast changing consumer preferances. A rigid and inflexible approach may make PSBs compete with Air India and others for Govt. funds to survive! It is time for PSBs to redifine their strategies and learn from successful corporates on defining their HR policy. When some PSB banks are aspiring to become world class and play a major role in the international stage, there is a need to have a HR policy which does help these banks to achieve these goals.
Only thing is that such a realization should dawn on the employees of PSBs. There are more serious issues with these banks which need to be addressed such as increasing NPAs, increasing costs and reducing efiiciency.
I am still wondering why some of the private banks and foreign banks are joining the strike!