Benefits and Drawbacks of Pay Band and Grade Pay System – IRTSA Memorandum to 7th CPC

Benefits and Drawbacks of Pay Band and Grade Pay System – IRTSA lists out New Pay Elements introduced by 6th Pay Commission

• Problem of Pay stagnation eliminated
• Quantum of increment increases exponentially, but the difference is too large at higher levels.
• Grade Pay decides the hierarchy.
• Increase of Pay in Pay Band & Grade Pay is not uniform – in favour of higher scales.
• Arbitrary adoption of formula of 40% of maximum of the merged scales for deciding the Grade Pay.
• Inadequate rate on annual increment & increment during promotion.
• Situation of senior promotes getting less pay than Junior direct recruits, is in violation of basic principle of Pay Band system.

i. Problem of stagnation in pay is eliminated, since pay bands are having long spans.

ii. If employees are stagnated at the maximum of any pay band for more than one year, continuously, he/she shall be placed in the immediate next higher pay band without change in the Grade Pay.

iii. Point to point fixation was facilitated by the pay band system, (with one increment in the revised pay cale for every three increments in the pre-revised scale)

• But the employees with more years of service were placed in a disadvantageous position.

iv. Quantum of increment increases exponentially, instead of fixed rate of increment attached to every pay scale

• But the difference became very large at higher levels – thus causing discrimination with those at middle & lower levels.

v. Grade Pay decides hierarchy / seniority of the post.

13.2. Main Draw backs of Pay Band and Grade Pay system introduced by 6th CPC

i. Increase between minimum basic pay of prerevised scale and minimum of every Revised Pay Band is not uniform. There is much greater increase in favour of PB-3 & PB-4.

ii. Arbitrary adoption of formula of 40% of maximum of the merged scales for deciding the Grade Pay – instead of progressive and proportionate rise of Grade Pay from one scale to the next.

iii. Disproportionate rise of pay after Sixth Pay commission – due to grant of disproportionate Higher Grade pays in higher scales (S-24 & above) as compared to S-4 to S-23 (Please see details in the following Table and also the table in next page)

iv. Rate of annual increment (3% of basic pay) is inadequate.

v. Increment on promotion (difference in grade pay + one additional increment) is inadequate.

vi. Situation of senior promotes getting less pay than Junior direct recruits, is in violation of basic principle of Pay Band system. For example,

a. A JE with five years of service while getting regular promotion from Grade Pay Rs.4200 in PB-2 to Grade Pay Rs.4600 as SSE is fixed at a Basic pay of Rs. 16120 compared to the Direct recruit’s basic pay of Rs.17140.

b. A JE with five years of service while getting promotion (through LDCE) from Grade Pay Rs.4200 in PB-2 to Grade Pay Rs.4800 as AWM/AME/AE is fixed a Basic pay of Rs. 16120 compared to the Direct recruit’s basic pay of Rs.18150.

c. Pay on Promotion should be fixed at least at par with Entry Pay in the Revised Pay Structure for direct recruits.

Download Supplementary Memorandum Submitted by IRTSA to 7th Pay Commission