1/7/2011 Air India takes off on a major HR miss…

Publication: The Economic Times Mumbai;Date: Jan 7, 2011;Section: Corporate;Page: 5

Air India takes off on a major HR mission

Sets Up Panel To Prepare Ranks, Work & Wage Profile Of
Over 30k Employees, Bid to Create Uniform Structure
Anindya Upadhyay NEW DELHI

NATIONAL carrier Air India (AI) has set up a human resources’ committee to prepare a document covering
compensation, ranks and work profile by March-end as it attempts to integrate its 30,000-odd employees after the
merger of AI and erstwhile Indian Airlines in 2007. “This will be a road map aimed at offering a uniform structure of
wages, level mapping and productivity norms to all Air Indians. What we can assure is that there will be no
monetary loss for anyone,” a senior AI official told ET.

In addition to the 1200-crore equity infusion, the government gave its approval to the AI management to reduce
its outgo on wages as part of the airline’s turnaround plan. The airline plans to do so by having a single union
agreement for its employees.

The airline will carry out this process in a very transparent manner as they will hold negotiations with union
representatives starting April after the HR committee has prepared its report, the official said. The committee will
comprise officials from AI’s finance and human resource departments and representatives of unions. AI
spokesperson confirmed the development but declined to divulge details.

Currently, the airline’s employees are governed by 18 legacy agreements made with 14 workers associations,
including Indian Commercial Pilots Association, Indian Pilots Guild, engineering staff, cabin crew and non-
technical cadre to name a few. These agreements have different wage structures and career progression paths,
which the airline wants to harmonise.

According to Aviation Industry Employees Guild (AIEG) general secretary George Abraham, unions will show
support as long as they are consulted.

“When the merger happened we all knew that one day integration will take place. As of now, they haven’t
spoken to us on this but if they involve us, we will go with an open mind. If they call us to the negotiating table and
do things in a transparent manner, we will co-operate.”

After the merger of erstwhile Indian Airlines and Air India in 2007, the integration of the airline’s staff hadn’t
happened in the sense that the two entities continued with different rank and wage structures and productivity
norms.

AI CMD Arvind Jadhav in an earlier interview to ET had said that his company is looking at harmonisation of the
variable component in salaries or the Productivity linked incentive (PLI). “We are looking to introduced a balance
scorecard system where we propose to link 40% of the employees’ salary to the company’s as well as the
individual’s growth drivers — that is linking 20% of the salary to each of these components. We have made
presentations to the unions on that and they are aware of these issues,” Mr Jadhav had said.

Emphasising Mr Jadhav’s idea, an official from the civil aviation ministry said that this system will make every
unit of the airline viz. groundhandling, engineering and the core business self sustaining and avoid cross
subsidisation. Efficiency in units will increase when monetary compensation is linked to productivity.

“The HR committee will have to keep the aviation ministry, labour ministry and the Prime Minister’s Office in the
loop while preparing the document,” the ministry official said.

When the airline had tried to cut wages in 2009, employees went on strike causing the airline to lose crores of
rupees. Finally, the wage-cut had to be rolled back. “If everything goes smoothly, perhaps a uniform Air India
agreement will be ready by Diwali,” the AI official added.
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1/7/2011 Air India takes off on a major HR miss…

CREW CONTROL

AI plans to prepare a road map aimed at offering uniform structure of wages, level mapping and productivity norms
to all Air Indians

The Centre has given its approval to the AI management to reduce its outgo on wages as part of the turnaround
plan

The airline will hold negotiations with union representatives starting April after the HR committee prepares the
report

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