Question 2: In most of the VRS implementation exercises in Indian PSUs, the largest numbers of applicants have been from

the officer cadre. Was SBI wrong in not anticipating this for its VRS? Also comment whether SBI was justified in altering the officer cadre to restrict their outflow. Answer: The SBI was clearly wrong in not anticipating that the officer cadre would be most affected by their altered VRS scheme. The main reason for this would be that with the VRS scheme balanced against the officer segments interests, they could look for employment prospects in the blooming NPB sector. Also the employees in PSU like SBI were not used to rapid change in their organisation. So in absence of a smooth transition they had to look for private sector options. This change would not have affected the clerical staff in the same way, as they had less private sector opportunities. Also the timing of this change was not right since many of the senior staff were to retire in this time period. Not considering the changing role of private banks in India and not considering the view of the employees resulted in the scheme being open to all employees and caused attrition at the officer level. Employees viewed this as a form of discrimination against them and also argued that no other bank had adopted such practices. Even the analyst had regarded VRS as a bad move. Because about 29000 employees relived by 2001 would cause increased workload on others. They might resort to practices like work-to-rule which might negatively affect the earnings of the bank. The rural part of SBI was the worst affected with this scheme as officers in rural areas would find it extremely difficult to work in rural areas with this modified VRS scheme and thus resulted in increased attrition. A solution for this can be offering incentives for working in rural areas like increased salaries. Or officers working for a minimum time period in rural areas can be given exception from this limited VRS scheme. Another option was to apply this scheme to only those employees who joined in a more recent time frame like 20 years. This would have avoided the senior staff attrition. They should give more incentives for the existing employees so that their confidence is restored. Also the promotion policy as well as other HR policies should be made more transparent and fair.