Air India to abolish productivity-linked incentives

The incentive constitute as high as 200 per cent of the total salary of a section of employees.

Air India has announced that Productivity-Linked Incentives (PLI) to employees will be scrapped and replaced by Profit-/Productivity-Related Pay (PRP),which will be given only after the airline starts making profit.

The decision to scrap PLIs,which constitutes over 60 per cent of Air Indias annual wage bill of around Rs 3,000 crore,will impact about 27,000 employees. The incentive constitute as high as 200 per cent of the total salary of a section of employees.

The move is part of the loss-making carriers turnaround plan,and the abolition of PLI was recommended by Justice Dharmadhikari Report on pay/wage rationalisation in the post merged entity of Air India.

…it has been decided to discontinue payment of PLI to the employees of Air India with effective from July 1. The airline employees shall be paid salary and allowances as per the Department of Public Enterprises (DPE) guidelines, said a release from the aviation ministry.

The Dharmadikari report says the airlines can save around Rs 260 crore in the first year of abolishing of the PLI. However,Air India says that its wage bill will remain unchanged as salaries under DPE guidelines had dramatically increased with the implementation of the sixth pay commission.

The employees,however,have said that the new salary structure will be an injustice to lower category employees of the airline.

Looking at precarious situation of the airline,we are in full support of the company but the government should look into our plight. With the new pay structure,our salaries will be much lower than a fourth grade employee of a public-sector undertaking like NTPC Ltd, said Arun Malhotra,general secretary,Air Corporation Employees Union,which represents around 17,000 employees.

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PRP shall be determined on the achievement of Key Performance Indicators (KPIs) like yield,aircraft utilisation,passenger load factor,on-time performance and revenue achievement, said the release.