According to media reports, State Bank of India and Punjab National Bank are exploring possibilities to move out from 11th Bipartite Settlement. SBI and PNB are exploring to move to performance linked variable pay structure.

SBI is looking to give stock option plans to its employees to retain talent. Punjab National Bank has formed a committee of General Managers to explore possibilities of moving out from bipartite settlement and to introduce variable pay structure.

Government has already sent two letters to Banks and IBA to initiate the process for 11th bipartite settlement. Some Banks have given their consent to IBA for being part of 11the bipartite settlement.

MD and CEO of Punjab National Bank, Usha Ananthsubranium said that ‘we need to move out of old things as time is changing and need to recognize the performance and give remuneration to manage talent.

Although this is initial thoughts only, but if internal committees give positive feedback, the issue may be taken to board level.


The problem with existing wage structure is that employees in one rank are paid equally irrespective of their talent/ potential of performance. But moving from bipartite settlement to performance linked variable pay structure will not be easy for state run banks because they are not following established performance tracking systems.

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Unless the performance appraisal of employees is not fair, transparent and undisputable, implementation of variable pay structure will not help the banks to attain the objective of rewarding performing employees and retaining talent.

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