Wednesday, November 18, 2009

HRD panel for PSBs

This is the best news PSBs have, perhaps, had in a long time. The government has constituted a panel headed by BoB ex-CMD A K Khandelwal to look into various HRD issues at PSBs. It is a timely move because PSB unions are planning a march to parliament next month and a strike in support of various demands, including strengthening PSBs.

Apart from a status report, the committee’s mandate include preparing an action plan on how to professionalise 27 public sector banks. Besides, the government wants to work out a system of succession plan at these banks, which often have to do without a chairman for months altogether.

In addition, the committee has been asked to recommend how the banks should go about preparing their recruitment plans and whether it was desirable to follow common hiring and HR practices across all these banks, accounting for nearly 75 per cent of the business carried out in India.

I am pleased because I have made the argument for constituting an HRD panel for PSBs more than once in my ET column and I have been shouting that HRD should be the no 1 priority for PSBs, not consolidation or overseas branches or getting into new areas such as insurance. My argument is simple: until you have strengthened HRD at PSBs, don't even think of other things. What has galvanised the government into action is the prospect of nearly three fourths of senior management at PSBs retiring by 2012. I only hope this is not a case of too little, too late.

I hope the committee doesn't get sidetracked into issues like performance-linked pay. I am extremely sceptical - as many academics are- about the merits of variable pay even in the private sector. In the public sector, it could be a disaster. Those at the helm need to realise one thing: you don't compete through imitation.

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