With the finance ministry notifying the wage hike for employees of state-owned general insurance companies, the respective boards have decided to clear all arrears, which would come up due to the wage hike in the sector, by January 9, 2006. The additional outflow would be between Rs 150 to Rs 200 crore depending on the number of employees. The increase would be between 12.9% and 13.3% depending on the cadre.

Salary revision was due since 2002. Hike for the Life Insurance Corporation employees has already been cleared by the finance ministry. Sources said that the increase in salaries would not impact the balance sheets of the companies as it has been provisioned for.

The general insurance sector in India has witnessed a growth of about 14% in the last few years, primarily due to the growth in the fire insurance business. In the wake of de-tariffing, the four state-owned general insurance companies have also started collecting data on the same.

Meanwhile, the companies have also decided to go ahead with restructuring plans related to human resource activities. A number of Class I officers would be offered higher designations and promotions. Designations of those not promoted would be aligned with global standards, in a bid to provide the much required motivation. “The managements have finally accepted and the exercise would definitely provide a feel-good factor to the employees of the four companies,” sources said.

Feel Good Factor

• Already provisioned for, the hike won’t hit balance sheets
• Firms have decided to restructure HR activities to provide motivation
• LIC employees’ wage hike has already been cleared by finance mininister

Also, the government has asked the companies to increase the number of working hours while reducing the number of leave. The number of casual leave, including the additional ones, has been drastically reduced to only 12 from 25.

(www.financialexpress.com)