Indian Express on Sixth Pay Commission

PROPOSING a 40% hike in salaries, the Sixth Pay Commission has taken a leaf out of the private sector book to introduce performance-related incentives but has rejected the argument for parity between public and private sector salaries. It has cited studies and discussions to argue that several factors, including prestige, job-security, pension, allowances and perks, outweigh the salary gap.
The commission received a large number of representations, particularly from Group A officers, highlighting disparities between salaries in the government and those in the private sector and arguing that this led to reduced attractiveness of the Government as a career option and a decline in the quality of intake.
Extensive discussions with heads of training institutions, the panel's report says, found that this contention had no sound basis "as the compensation package has not made any significant impact on quality of intake which has remained consistent over the years."
The commission's key conclusions: ¦ According to a study by the Xavier Labour Relations Institute, commissioned by the Pay Panel, compensation provided by the Government is higher at Group C and D levels, marginally high for Group B employees and only substantially higher for Group A officers in the Government. The study also revealed that "merely comparing salaries without taking into account the total package of allowances and benefits available within the government, especially the value of pension and the value of job security provided, cannot be undermined since they form major components of the total package."


¦ The Government provides "unparalleled variety and job content," along with a much wider canvas of operations than the private sector. "The prestige involved in working for the Government and the opportunity of making a contribution to national policy or its implementation" are other aspects which add an unquantifiable value to Government jobs.

¦ Job-related stress is "significantly lower" in the government and work schedules provide a "more favourable work-life balance."

¦ In the private sector, the Cost To Company (CTC) may not actually be a reflection of the take-home pay, as a major proportion of the CTC consists of variable pay which is based on performance. Further, high-starting salaries as projected in the media and other reports are granted only to a minuscule number who are the best students of top-end management schools and, at times, are not reflective of the industry average.

¦ Grant of extremely high pay packages in certain sectors maybe a result of the demand for talent at the time of initial setting up of an industry or during the boom period. "Such episodic events should not be used as the yardstick for comparison, as ultimately higher salaries in these sectors get normalized over time."

¦ The main consideration in the private sector being "profit," an equal comparison with the Government is not going to be ever possible as any increase in the resources of the Government needs to be primarily directed towards development.

However to bridge the gap vis-à-vis the private sector to some extent, the Commission says it has recommended a higher starting salary for Group A posts and called for giving the Government flexibility to offer a "market-driven salary" to highly qualified scientific and technical personnel whose skills are in demand in the private sector.

This higher package, the report says, will be accompanied with a fixed-term contract which could be altered based on performance. Further, taking into account the fact that a large portion of the salary in the private sector comes from performance-related payments, the Commission has recommended introduction of performance-related incentives in the Government.