…No downward revision
The revision in pay and allowances of Druk Holding and Investments (DHI) and DHI-owned companies has thrown light on indiscriminate structuring of pay and allowances of both the state enterprises under finance ministry and the civil service.
This anomaly also prevails in existing pay structure within the DHI and its companies. For instance, as employees move from grade 4 to 3, there is a jump of 20 percent in basic pay. The gap between grade 6 and 5 is 14 percent, 12 percent between grade 7 and 6. The gap is highest (22 percent) in grade 8 and 7.
“The revised pay and allowances of DHI and its companies rationalises the basic pay structure, maintaining a difference of 10 percent in every grade,” said DHI’s head of HR and administration, Kinga Lotey.
The ESP level in DHI was earlier getting Nu 8,050 a month and no other allowance was provided. With the new revision salaries of ESP level employees are increased by 8 percent, to Nu 8,700 a month. However they are now entitled to 20 percent corporate allowance, 15 percent performance-based variable allowance (PBVA) and even bonus which comes to about 16 percent.
In total, Kinga Lotey said that there would be a revision of more than 60 percent.
Similarly, in the mid-level, between grade 6 and 11, the revision comes to around 48 percent on an average. In grade 2, the revision is about 9 percent. However, there is only handful of employees in that grade and the company encourages those employees to serve on contract.
“Since different companies have different grading system, we have mapped the grades and came out with a DHI reference grade, to bring about uniformity,” he said.
While the rationalisation has been done, Kinga Lotey said seniority would be protected up to a maximum of five increments, after which only 50 percent of the increment would be considered for pay fixation. This is because there are some employee who got more than 15 increments in the same grade.
As for the contract employees, who are mostly in directorial and CEO position, Kinga Lotey said that there was no pay structure earlier. For instance, a director in BPC’s pay is different from that of DGPC. A general manager in Bhutan Telecom’s pay is different from that of others.
“The pay structure of contractual employees have also been rationalised based on business size and business complexity,” he said. The average pay revision for contract employee amount to about 32 percent on an average and average hike for regular employees is maintained at about 28 percent.
Corporate allowance however is brought down to 20 percent from 23 percent. “Due to increase in basic pay, this reduction will not have much impact,” he said.
This is to bring down the financial implication on the companies.
The DHI, he said, did not find a rationale to provide house rent allowance. The head of HR and administration said that House Rent Allowance was discussed in detail in the last pay revision. “Corporate allowance is paid in lieu of house rent allowance,” he said. Companies like DGPC and BPC already have housing colonies, rents determined by area in square feet. If HRA is provided, he said it would discourage employees from residing in the colonies and these are the employees who are supposed to report on call, any hour of the day.
However, in an anonymous letter sent to Kuensel, it was mentioned that the pay for some section of employees have rather decreased. “While they have increased basic pay structure, they have reduced or done away with many other allowances. For some, it would rather be apt to call pay reduction exercise,” the letter stated.
“We have carried out simulation for all 7,600 employees and we don’t anticipate any reduction in salary,” he said, adding salary revision should not be downward in any case. One or two isolated cases, if it surfaces, he said the DHI would deal with it individually.
The anonymous letter also mentioned that DHI had done away with position specific allowance (PSA). Every company has PSA policy, which was approved by respective boards after thorough scrutiny. “If whatever done by board has to be undone by the DHI, then there is a big question of whether it is necessary to have board in each company.”
With regard to other allowances, Kinga Lotey said that the remuneration review committee didn’t touch much because most were provided based on nature of job and complexity of business. “However, few had to be reviewed and were either revised or discontinued,” he said.
The PSA, he said, was introduced even before the establishment of DHI. Most head of departments were given PSA because of the added administrative and financial responsibilities. People holding critical position was also given PSA as a strategy to retain and attract skills and talent. This continued even in the newer companies like Dungsam Cement and State Mining.
“But we found that it varied from one company to another and few companies have not reviewed it properly,” he said.
Now, he said a clear guideline is framed wherein positions eligible for PSA were identified and the board was also asked to review it.
However, the heads of departments, who are on contract, are not eligible for PSA now.
Unlike the civil servants’ and SOE’s pay hike, the DHI has increased pension contribution from both employee as well as employer.
Kinga Lotey said cash-in- hand will reduce a bit in doing so. However, the basic pay is increased and this is a good opportunity to save. “It is a forced saving,” he said.
“In the name of rationalising, the pay for contract employees, particularly at DHI, are increased substantially. Thus, it is also time to question rational of having all top level employees in contract,” the anonymous letter stated.