Page 119 - DMGT517_PERFORMANCE_MANAGEMENT_SYSTEM

Performance Management System

Notes The variable portion of 30-per-cent could increase by a maximum of 100 per cent, depending
on the performance, taking the whole package to 70+30+30.
However, the bank has also ensured that even if an employee does not get the 30-per-cent

variable component, the final salary would not fall below the existing salary, said Mr K. P.
Nair, Chief General Manager, Head-Human Resources.
In talks with union
The management is still in discussions with the clerical and Class IV staff, about how this
scheme would be implemented as the union had raised a dispute under the Industrial
Disputes Act. They number about 3,000. The management had organised 25 workshops
with employees to communicate this change in the pay structure over the past few months,
Mr Sadarjoshi said.

IDBI Bank is the first public sector bank to introduce a variable compensation scheme. It is
not part of the Indian Banks’ Association, with regard to wages, as its pay scales are at par
with that of the Reserve Bank of India.
For the next fiscal, the bank is looking to hire between 3,000 and 3,500 personnel, based on

the current plans to add over 300 branches to its network.
Industry observers feel that IDBI Bank, with over 11,900 employees, may be a testing
ground to check the effectiveness of variable pay before it is rolled out in other public
sector banks.
“The new pay structure has been introduced in our bank unilaterally without taking the

officers’ into confidence,” said Mr R. S. Athalye, General Secretary of the All India IDBI
Bank Offi cers’ Association.
He also pointed out that the new pay scales are lopsided. While offi cers in the fi rst three
grades got an average salary increase of 20-23 per cent, in higher grades the increase is
45-65 per cent.
Source: www.thehindubusinessline.com

Make a strategy for effective implementation of performance management
system.

10.4 Summary

Performance management is a broader concept which includes the performance planning,
performance appraisal, monitoring and performance evaluation.

It would be very difficult to effectively manage the human resource without an instrument
that measures its effective ness and capability.
For effective utilisation of human resource the organizations need a sys tem that can
identify the capabilities and performance of its human capital so that they can deal with
performance problems and encourage performance excellence.

10.5 Keywords

Performance oriented work culture: Performance oriented work culture means launching a
variety of improvement efforts, including designing high-performance work systems.
KPI: Key Performance Indicators

114 LOVELY PROFESSIONAL UNIVERSITY