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Delhi Business Review X Vol. 12, No. 1 (January - June 2011)

Case Study CHANGING FA CHANGING FA CE OF COMPENSA CEOF COMPENSATIOTIOTIO N IN PSU sssssAN ATTEMPT TO COMPETE WITH PRIV TEMPT TO COMPETE WITHPRIVAAAAATE SECTOR TE SECTOR

Neelam Saraswat*Neelam Saraswat*Gaurav B ar!ava**

"I# $u%l&' se't(r %a) s are re+u&re, t( '(m$ete w&t $r&vate %a) s () a level $la-&)!.el,/ t ere &s a !((, 'ase #(r '(m$e)sat&)! t em t(( () a '(m$et&t&ve %ase01

2 Reserve Ba) (# I),&a G(ver)(r 31 Su%%ara( 4www1&)1)ews1-a ((1'(m5 HIS 'ase &s

)(t ()l- releva)t &) t e %a) &)! se't(r %ut als( matter (# #('us &) (t er &),ustr&es1

T'e,ures1

T

e- are '

a)!&)!

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t e&r(r!a)&6at&()stru'ture&)(r,ert(%e'(mem(re$r(m$t &)

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res$()se t( t e ' a)!&)! e)v&r()me)t w &' &)'lu,es '(m$et&t(rs als(1 Em$l(-ees%e'(me a ver- &m$(rta)t s(ur'e (# '(m$et&t&ve a,va)ta!e #(r a) (r!a)&6at&()1 T( attra'ta), t( reta&) em$l(-ees/ a) (r!a)&6at&() )ee,s t( ave s(u), '(m$e)sat&() strate!-su$$(rte, %- (t er HR #u)'t&()s1 C(m$e)sat&() &) PSU as ma)- reas()s #(r rev&s&()1 "T ee7e'ut&ve '(m$e)sat&() &) t e $u%l&' se't(r/ as &s well )(w)/ &s l(wer t a) t at &) t e$r&vate se't(r1 N(tw&t sta),&)! t e &st(r&'al reas()s #(r t &s/ t ere &s $er a$s a !((,reas() t( rev&s&t t &s1 T ere &s als( t e r&s t at &# t e $u%l&' se't(r %a) 4PSB5'(m$e)sat&() &s )(t &m$r(ve,/ t e $u%l&' se't(r ma- l(se tale)t t( t e $r&vate se't(r0/Su%%ara( sa&, 4www1&)1)ews1-a ((1'(m51 Tale)t a'+u&s&t&() a), tale)t rete)t&() &s t e%as&' $r(%lem #a'e, %- m(st (# t e PSUs1 PSBs seem t( %e #a'&)! a 'r&s&s w&t alm(st al# t e t($ ma)a!eme)t 'a,re ret&r&)! &) t e )e7t '(u$le (# -ears/ w&t )( &,e)t&.a%le tale)t t(re$la'e t em 4www1m()e-l&#e1&)51 S&tuat&() %e'(mes m(re a$$all&)! #(r PSUs w e) $e($leare a),s(mel- $a&, &) $r&vate se't(r (r!a)&6at&()s1 S( t &s &ssue as starte, t( !a&)atte)t&() (# $(l&'- ma ers &) I),&a1 Pa-me)t a''(r,&)! t( t e &),ustr- )(rms &s %e'(m&)!$art (# '(m$e)sat&() ,eterm&)ates #(r PSUs1 A$art #r(m $a- & e/ PSUs are a,($t&)!

(t er e8e't&ve '(m$()e)ts (# '(m$e)sat&() &) $r&vate se't(r u)&ts1 Var&a%le $a- (r $a- #(r$er#(rma)'e w &' &s m(re $($ular &) $r&vate se't(r &s )(w !a&)&)! &ts $($ular&t- a),a''e$ta)'e &) $u%l&' se't(r u)&ts als(1

C(mm&ttee w &' was C a&re, %- A191 9 a),elwal/ #(rmer CM3/ Ba) (# Bar(,a/ a),'()st&tute, (# .ve (t er mem%ers : 3r1 T1V1 Ra(/ Pr(#ess(r/ IIM;A me,a%a,/ 3r1 3ee$aPat a / Pr(#ess(r/ IIT Mum%a&/M1V1 Na&r/ e7;' a&rma) I),&a) Ba) s< Ass('&at&() a), H1N1S&)(r/ #(rmer e7e'ut&ve IBA 4www1e7$ress&),&a1'(m5 as $r($(se, t at PSB s (ul, %eall(we, t( a,($t t e CTC 4'(st t( t e '(m$a)-5 '()'e$t/ s(met &)! t at &s m(re attu)e,w&t t e $r&vate se't(r t a) t e $u%l&' se't(r1 T e '(mm&ttee as als( su!!este, t atvar&a%le $a- s (ul, %e a ma=(r '(m$()e)t (# wa!es 4www1)ews1&)1ms)1'(m51 O)e (# t ema=(r re'(mme),at&()s !&ve) %- t e '(mm&ttee &)'lu,es &)tr(,u't&() (# em$l(-ee st('($t&()s $la)s 4ESOPs5 #(r t($ $er#(rmers (# t e %a) s t( reta&) tale)t &) $u%l&' se't(r

%a) s1 T e '(mm&ttee as $r($(se, t at %a) s must a' )(wle,!e >? $er 'e)t (# t e t($$er#(rmers t r(u! ESOPs a), $er#(rma)'e l&) e, &)'e)t&ves1 ESOPs ma- el$ PSUs t($ull u$ t e $r(,u't&v&t- level (# *Ass i s t an t ro !es so r, De lh i "#hoo l o ! ro !es s iona l " tu$ ies an$ Resea r#h (A%%rove$ &y A ' ) ,De lh i , ' n$ ia .**Assis tant ro!essor, +ovely ro!ess ional nivesi ty, un a&, 'n$ia .

12

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Neela/ "araswat aurav Bhar ava

em$l(-ees a), t( 'ur% attr&t&() rate1 Few (t er re'(mme),at&()s !&ve) %- t e'(mm&ttee &)'lu,e 4www1e7$ress&),&a1'(m5 4www1m()e-l&#e1&)5@

l I)tr(,u't&() (# se$arate $(s&t&()s #(r ' a&rma) a), t e ma)a!&)! ,&re't(rl Outs(ur'&)! (# )();'(re ($erat&()s a), &)'e)t&v&6e m(%&l&t- (# 'ler&'al sta8 t( t e ruralareas &)

PSBs1l Wa!e settleme)t at t e &),&v&,ual %a) level/ w&t ea' %a) ,e'&,&)! &ts (w) wa!estru'ture

,e$e),&)! () &ts $r(.ta%&l&t- a), 'a$a'&t- t( $a- &)stea, (# &),ustr-;w&,e wa!e settleme)t1

l C a)!es t( t e ar' a&' re'ru&tme)t 'r&ter&a (# PSBs1 F(r 'ler&'al sta8 m&)&mum+ual&.'at&()s (ul, %e !ra,uat&()/ &)stea, (# t e 'urre)t SSC re+u&reme)t1 Als(/ #(r t e ( 'er 'a,re/'a),&,ate s (ul, (l, a %a) &)! ,&$l(ma/ a$art #r(m !ra,uat&()1

l F(rmat&() (# a %(ar, '(mm&ttee () HR &) ea' %a) 1 Ba) s av&)! %us&)ess w(rt Rs la'r(re

a), a sta8 (# / w&ll %e re+u&re, t( a$$(&)t a) e7e'ut&ve ,&re't(r;HR () t e&r %(ar,1l Su''ess&() $la))&)! %- %a) <s %(ar, #(r ea' e- lea,ers &$ $(s&t&() %- &,e)t&#-&)! t ree$(te)t&al

su''ess(rs1 T e C(mm&ttee as als( su!!este, #(r t e sett&)! u$ (# a )at&()al levelBa) erDs ea,ers &$ 3evel($me)t I)st&tute w &' w&ll ,evel($ lea,ers #(r %a) &)!&),ustr-1

l I)tr(,u't&() (# $er#(rma)'e ma)a!eme)t s-stems1

I)'e)t&ve stru'tures ave %e!u) t( !a&) !r(u), &) PSUs (t er t a) %a) s als(1 "A)&)'e)t&ve s-stem &s %e&)! w(r e, u$() as re'(mme),e, %- t e s&7t $a- '(mm&ss&()1 It'(ul, %e &m$leme)te, %- )e7t -ear01 Pra=a$at& Tr&ve,&/ se'retar-/ $er#(rma)'ema)a!eme)t/ sa&, at t e a))ual e'()(m&' e,&t(rs< '()#ere)'e4www1e'()(m&'t&mes1&),&at&mes1'(m51 T &s &)'e)t&ve s' eme w(ul, %e %ase, u$()$er#(rma)'e (# t e em$l(-ee a), w(ul, als( ,e$e), u$() '(st sav&)!s () a''(u)t (# re,u't&() &) t e use (# ( 'e stat&()ar- a), sav&)!s &) t e ele'tr&'&t- '()sum$t&()1G(ver)me)t as starte, t( $re$are t e s-stem #(r $er#(rma)'e m()&t(r&)! a), evaluat&()#(r t e same1

G(ver)me)t ( '&als are ver- ($t&m&st&' a%(ut t e ' a)!es &) '(m$e)sat&() stru'ture1 T &s m&! t el$ PSUs t( attra't %est tale)t a), t( reta&) t e same1 T &s ' a)!e &) PSUs 'a)

el$ (r!a)&6at&()s t( (ut$er#(rm $r&vate (r!a)&6at&()s1 It 'a) eve) s(lve t e $r(%lem (# l(wm(t&vat&() (# !(ver)me)t em$l(-ees w &' as alwa-s %ee) t e ma=(r &ssue &) PSUs1 T &s &st e e7$e'te, (ut'(me %ut real&t- ma- eve) %e ($$(s&te1 Bureau'rat&' stru'ture (# G(ver)me)t (r!a)&6at&() ma- $r(ve t( %e'(me %l(' a!e &) t &s $at 1 I)tr(,u't&() (# var&a%le $a- w&ll &)'rease t e .)a)'&al %ur,e) () alrea,- l(ss ma &)! PSUs1 Em$l(-ees atPSUs ma- ($$(se t e &)'e)t&ve s-stem1

uest&()s1W&ll t e )ew $a- stru'ture el$ PSUs t( '(m$ete w&t t e&r '(u)ter$arts &) tale)t

a'+u&s&t&()2 Cr&t&'all- evaluate1>1W at &), (# $r(%lem ma- %e #a'e, %- PSUs &) &)tr(,u't&() (# &)'e)t&ve s' emes a), $a-

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