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IDBI going for big HRD overhaul

Ashok Jainani

MUMBAI, Dec. 5

THE Industrial Development Bank of India (IDBI) is finally waking up to the call of the competition and has set the ball rolling for massive organisational overhaul.

The exercise, which includes sharing a small part of incremental profits with the employees, clearing the way for fast-track promotions and introduction of a voluntary retirement scheme (VRS), is intended to help IDBI enhance its profitability.

The package, on the one hand, will boost employee productivity and trim the workforce, on the other. The move is also intended to retain talent.

IDBI is introducing a revised compensation package for officers, which is based on an independent expert committee report. It is understood that the revised compensation package will include a component of the performance-linked incentive envisaging a pe rcentage of incremental profits of IDBI to be distributed as incentive among employees based on their performance.

The IDBI Executive Director, Mr T.M. Nagarajan, told Business Line that the reason behind overhauling the human resources development (HRD) policy was to ``incentivise'' performance towards improving the bank's profitability. The programme will enable pe rsonality development of individuals and help push profitability. ``The idea is to achieve improvement in the bottomline, not only in the amount of sanctions and disbursements,'' Mr Nagarajan said.

The performance-linked incentive will be partly in the form of issue of equity shares to employees. IDBI is also introducing VRS the details of which are still being worked out by the top management.

The package also envisages total revamping of the performance appraisal system. The promotion policy will be further streamlined to provide for fast-track promotions for the officers in high-fliers category.

Mr Nagarajan said that the entire package was awaiting formal clearance by the IDBI board which would meet in the third week of December before being sent to the Finance Ministry for clearance. The revised package is planned to be introduced before the e nd of current fiscal.

IDBI has appointed the Pune-based National Institute of Bank Management (NIBM) to assess employees' competencies, identify the potential and initiate further developmental action.