Public sector companies should increase efficiency and productivity to reduce the gap between salary structures of government undertakings and private firms, Sarthak Behuria, chairman and managing director of Indian Oil Corp and chairman of SCOPE said on Thursday.
The pay structures in some private companies have risen so high that they create vulgar disparity between workers and managerial personnel. In contrast, the disparity has been shrinking in the public sector.
Both the trends are moving in opposite directions and there was a need for convergence, Behuria said at a workshop organised by the Standing Committee on Public Enterprises in New Delhi.
The IOC chief said the compensation system should not only be linked to money and non-monetary rewards but also be adequately included in the system.
Speaking on the occasion, National Textiles Corporation chairman Ramachandran Pillai said the chairmen and CEOs of public sector undertakings figure among the lowest paid in the industry in which they operate.
The PSUs should rework their compensation strategy by having fixed and variable components, which would be linked to individual performance as also to the company's profitability, Pillai suggested.
To match private sector salaries, public sector firms either have to raise productivity or increase prices of goods and services it produces, he said, adding the second option could have an adverse impact on the country's economy.